CONTENTS
Monday, November 14, 1994
Bill C-239. Motion for second reading 7699
(Amendment agreed to.) 7707
(Order discharged and bill withdrawn.) 7707
Mr. Mills (Broadview-Greenwood) 7716
Mr. Mills (Broadview-Greenwood) 7717
Mr. Leroux (Richmond-Wolfe) 7720
Mrs. Brown (Calgary Southeast) 7723
Mr. Gauthier (Roberval) 7727
Mr. Gauthier (Roberval) 7727
Mr. Axworthy (Winnipeg South Centre) 7732
Mr. Axworthy (Winnipeg South Centre) 7732
Mr. Martin (LaSalle-Émard) 7734
Consideration resumed of motion 7736
Mr. Leroux (Richmond-Wolfe) 7736
Mr. Gagnon (Bonaventure-Îles-de-la-Madeleine) 7737
Mr. Mills (Broadview-Greenwood) 7746
Consideration resumed of motion. 7749
Mr. White (Fraser Valley West) 7756
Mr. Mills (Broadview-Greenwood) 7766
Mrs. Brown (Calgary Southeast) 7766
7699
HOUSE OF COMMONS
Monday, November 14, 1994
The House met at 11 a.m.
_______________
Prayers
_______________
PRIVATE MEMBERS' BUSINESS
[
English]
Mrs. Sue Barnes (London West, Lib.) moved that Bill
C-239, an act respecting the decade of the brain, be read the
second time and referred to committee.
She said: Mr. Speaker, I will be sharing my time today.
I am pleased to introduce debate on Bill C-239, a bill that
would declare the 1990s the decade of the brain. First, I would
like to recognize and thank all the individuals and organizations
that have since early in the decade assisted in this legislative
endeavour.
The legislation I am speaking on today is the duplicate of a
private member's bill introduced in 1992 by the previous
member of Parliament for Niagara Falls. Private members' bills
can take a number of years before they are debated in the House.
Given that we are already in 1994, members may ask what the
purpose of the bill is and what will be accomplished by declaring
the 1990s the decade of the brain.
(1105 )
My response is that the legislation will help to raise the
awareness of Canadians and will help to focus attention on the
prevention, research, treatment and rehabilitation of brain
related diseases and disorders. I believe this to be a worthwhile,
rewarding goal, as do many of my hon. colleagues.
We only have to look at numerous examples in the world
community to see this is an important issue worthy of our
attention as legislators. In 1986 at the 39th world health
assembly, the World Health Organization called on member
states to apply preventive measures with regard to mental,
neurological and psychological disorders and to include these
activities in their long term health strategies.
In 1991 Dr. Nakajima, director general of the World Health
Organization, urged all governments to designate the 1990s as
the decade of the brain. Our neighbours to the south did this in
1990. In 1992 the member states of the European community
followed suit, forming an ad hoc task force.
The World Federation of Neurology proclaimed the 1990s to
be the decade of the brain in 1992. As we speak, researchers
from my riding are gathering with over 12,000 other
professionals in Miami to discuss among other subjects
advances made in the decade of the brain.
They have expressed to me their support of the bill before the
House. Treatments that would have seemed miraculous 10 years
ago are now reality and are being applied successfully. We can
now look to a day when new drugs may free patients from their
struggle with neurodegenerative diseases such as Alzheimer's.
Regeneration research is providing new expectations, new
hopes for patients with spinal cord and various other brain
injuries. In every riding in Canada research efforts and
treatments continue, utilizing more and more advanced and
ground breaking technology. In my own riding of London West a
young scientist has recently commenced a new research project
focusing on brain functioning. Currently magnetic resonance
imaging shows brain anatomy clearly. Functional magnetic
resonance imaging will allow us to view the working brain and
will help map out the centres concerned with such aspects as
speech and motor activity.
There is no doubt the human brain is a remarkable feature that
distinguishes us from other living creatures. A mere 3-pound
mass of interwoven neurons controls all our activities. The brain
is the most complex and mysterious wonder of creation. It has
been called the seat of human intelligence, the interpreter of
senses, the keeper of memory, in essence the sanctum of the
soul.
Ailments of the brain carry with them heart rending
disabilities that can rob us of the very essence of personhood. A
healthy mind is essential for living a full life with total liberty
and independence. A great threat to the independence of the
elderly are diseases of the brain. Cognitive mental stability
enhances the ability to heal and recuperate, to cope and to
overcome physical ailments.
Unfortunately like all things human the brain is not perfect,
being subject to injury and disease, including the time of
development in the youngest members of society. Diseases are
7700
not limited by geographical borders. Nor do they recognize any
difference in language, gender, race or economic status. Any
human being in the world community is a potential victim of a
brain related illness.
I would be very surprised if any member of the House had not
been personally affected by such diseases and disorders. All of
us have had a friend, relative or family member who has suffered
the tragedy of brain related illness. At the beginning of the
decade it was estimated that five million Canadians were
affected by disorders of the brain ranging from congenital
malformations, degenerative disorders, neurogenetic disorders,
epilepsy, multiple sclerosis and stroke, to problems with
learning, hearing, language and speech.
I have been encouraged by the numerous physicians,
individuals and associations that have given me support to work
for the recognition of the decade of the brain. I am aware of
many who fought for this long before I was involved. Many of
these people devoted their careers to the treatment and
elimination of brain related illnesses. Designating the 1990s as
the decade of the brain would be an acknowledgement of their
contributions and an encouragement for them to continue with
their noble crusade.
Studying the brain has enormous potential for the health of
Canadians, while decreasing the severe economic and emotional
burdens placed on our society by brain disease and disorder. In
efforts to see the legislation proclaimed, I have also been
contacted by people who are right now directly affected,
sometimes tragically. I have received scores of letters from
parents whose children have died or are dying of brain tumours.
(1110 )
I have listened to people faced with the difficult task of caring
for loved ones who suffer from brain disorders. There is more
eloquence in their private struggles with adversity, more
eloquence in their challenges and their grief than I could ever
hope to bring to the Chamber today. It is because of these people
that I encourage members to lend their support to the bill.
In 10 minutes it is impossible to speak on the full scope of the
problems in research. I would like to highlight two forms of
brain related illnesses as well as their effects.
Today over one-quarter of a million Canadians suffer from
Alzheimer's disease and related dementias. By the year 2030 it
is estimated that this figure will have increased to over
three-quarters of a million. The social and human costs of
Alzheimer's disease are devastating. A person's ability to
understand, think, remember and communicate is affected. The
process is always a progressive degenerative one that means the
formerly self-reliant men and women slowly become dependent
upon others.
The disease has a similarly devastating impact on the
caregivers who are often family members. Family members
must cope with long periods of emotional, financial and
physical stress. Hence we see that the health and well-being of
the family members become just as important a concern as that
of the person with the disease.
Each year thousands of Canadians are diagnosed with a
primary or secondary brain tumour. Since brain tumours are
located at the various control centres of thought, emotion and
physical function, they can cause serious impairment in motor
functions, vision and language abilities and make treatment
very difficult.
In 1982 in my home of London, the Brain Research
Laboratory was established with both experimental and clinical
research units. The Brain Tumour Foundation of Canada was
also a founding member of the North American Brain Tumour
Coalition, a network of brain tumour organizations dedicated to
increasing public awareness of the nature of the brain tumour
and of the availability of treatment options.
London has also seen the establishment in 1991 of the brain
tumour tissue bank which acts as an international resource from
which researchers from Canada, the United States and other
nations are able to obtain tissue samples to carry out
experiments.
Brain tumours were highlighted in the bill not because they
are any more or less important than any other disorder or
disability, but rather it was an association that I was involved
with at the time when work began on the bill. I have also had
some insight through other areas of my previous work into the
devastation that mental illness can play in antisocial, violent
acts. I can think of no other aspect of our criminal justice and
health systems where everyone involved is a victim.
Measures can be taken to facilitate even more effective
sharing of knowledge, information and resources to accelerate
the research for effective prevention and treatment of brain
related illnesses. Canadians must recognize the relationship
between the health of the brain and the well-being and quality of
life of individuals. Brain related illnesses exact a tremendous
toll in human suffering, often during the most productive years
in a person's life.
I have mentioned previously the effects that this can have on
the individual and his or her immediate circle of family and
friends. However we must acknowledge the tremendous
financial cost of such illnesses.
Dr. John Evans in the November 1994 Flavelle lecture at the
University of Western Ontario stated that neurological diseases
require more people to be hospitalized than any other disease
group and therefore consume a disproportionate share of scarce
health resources. He stated that the staggering burden of the cost
of treatment and rehabilitation is estimated to be approximately
$300 billion annually for the United States and Canada. In the
area of Alzheimer's and other forms of dementia alone Cana-
7701
dians spend approximately $3.3 billion a year providing care for
afflicted individuals.
This debate should not be reduced to dollars and cents. To do
so is to cheapen the humanity of all involved in the issue. We are
talking about the health and happiness of our children, our
parents, our friends, our partners and ourselves. No one can go
through their lives untouched by brain related illnesses. We all
age eventually and our independence will be linked to our
physical and mental health.
I stated at the beginning of the speech that the legislation
would help to raise the awareness of Canadians and would help
focus attention on the importance of the research in this critical
medical field. I am seeking approval today of an
acknowledgement of that fact and action that will benefit
Canadians today and into the future.
Hon. Roger Simmons (Burin-St. George's, Lib.): Mr.
Speaker, I am delighted to second and give my support to Bill
C-239. Let me, at the outset, congratulate my good friend and
colleague from London West for taking this significant and
important initiative. It is not a new initiative. Others have put it
to the House before, including the former member for Niagara
Falls. Several efforts have been made to have the House do what
other legislatures and other jurisdictions have already done. As
my friend noted in the debate, this includes the United States
which as a result of a proclamation by former President Bush is
now observing the decade of the brain with considerable results.
However I will come back to that.
(1115)
First, let me read for the information of the House some
portions of a handwritten letter that came to a member of
Parliament from northern Ontario. In part it reads as follows:
``On May 21, 1992, our 20-year old daughter died from a
malignant brain tumour. Our lives and the life of her only sister
will never be the same''. Later the parents who wrote this letter
said: ``Most people can only imagine the pain of standing at your
child's side, helplessly watching her die. We believe that, had
we known more about the symptoms of brain tumours, our
daughter would have had medical attention sooner, would have
lived longer and might even be writing this letter herself''.
In the most graphic and eloquent terms, more so than I could
express, this letter states very clearly why we need to have
greater awareness, greater public profile for the brain and brain
related diseases.
The parents wrote: ``We believe, had we known more about
the symptoms of brain tumours, our daughter would have had
medical attention sooner, would have lived longer and might
even be writing this letter herself''.
The impressive aspect of this initiative by my friend from
London West is that it has garnered so much support from the
scientific community. The letters that have come to me and to
other members of Parliament, but particularly to the member for
London West, are very gratifying. People who know this issue
inside out are saying in the most urgent terms: ``Let us do it. Let
us declare this the decade of the brain because it will have the
effect of focusing awareness on an important issue: issues
related to prevention, research, treatment and rehabilitation in
this vital area''. That is why literally every organization that one
could mention is on side.
We wonder at the list, such organizations as the Alzheimer
Society of Canada, the Canadian Mental Health Association, the
Canadian Brain Tissue Bank, the Canadian Paraplegic
Association, Epilepsy Association of Metropolitan Toronto,
Epilepsy Canada and Huntington Society of Canada. The list
goes on.
Let me read excerpts from another letter from the dean of
medicine at the University of Western Ontario. He says in part:
``Allow me to speak in favour of the concept of the decade of the
brain. It is truly an essential initiative from a number of
perspectives in light of the discussions that are currently
nationally relative to both research and the health care system''.
He makes two or three specific points. First, the dean of
medicine of the University of Western Ontario talks about the
aging population: ``Increasingly we need to seek alternatives to
institutionalizing older Canadians. With the passage of time
AIDS tends to be associated with problems afflicting bone,
bladder and the brain. In other words there is an increasing
disease burden relating to fractures, incontinence and dementia
that will affect our senior citizens and which results in the need
for admission to hospital''.
(1120)
Then he talks about the impact it would have on
disadvantaged children. In short he makes the case that what is
needed is more focus on this important issue.
If I sound as though I am repeating myself on the issue of
awareness, it is because the bill is such simple legislation. We
are not asking for the expenditure of great gobs of public money.
We are simply asking to enact a bill that will focus on this
important issue. The effect will be felt in many areas.
Let me again demonstrate my point by reading from another
letter, also from the dean of medicine at Western.
``As former vice-president of the North American Brain
Tumour Coalition, I can relate to you that the declaration of the
decade of the brain legislation in the United States has resulted
in increased awareness of brain related disorders. This has
occurred at local, state and national levels. The support for
charitable organizations and for patients with tumour related
7702
disorders has changed because of this legislation. Many
pharmaceutical companies that I deal with use the decade of the
brain logo on their letterhead and are fairly supportive. The
decade of the brain legislation in the United States has resulted
in a number of new initiatives which I have been involved with.
As a member of the board of directors of the Brain Tumour
Foundation of Canada, I have interacted with several U.S.
organizations. I can relay to you that there is a commonality of
purpose in goals among our organizations. We are working
together to help both Canadian and U.S. patients''.
The point of the letter from the dean of medicine is the point
of my speech, the point of the intervention made by my
colleague from London West in introducing the legislation. The
legislation, as simple as it is in its wording, will effectively
focus attention on this very important issue. And so we should.
An estimated five million Canadians are affected by disorders
of the brain ranging from stroke, degenerative disorders,
problems with speech, language and hearing. Today these
patients are justifiably hopeful as a new era is unfolding in brain
research. We can help smooth that along a bit by giving our
support to this very significant piece of legislation.
[Translation]
Mrs. Pauline Picard (Drummond, BQ): Mr. Speaker, it is
with great pleasure that I rise in the House today to support Bill
C-239, the Decade of the Brain Act, introduced by the hon.
member for London West.
The human brain, a mass weighing more than one kilogram
and essentially consisting of nerve cells that control our
emotions, reactions and activities, is one of the most impressive
and mysterious wonders of creation. This seat of human
intelligence, which enables us to control our movements,
interpret our senses and interact with our environment,
continues to intrigue researchers and scientists throughout the
world.
In recent years, science has made it possible to clarify certain
aspects of the human brain, but too many questions still remain.
How does the brain function? By what is it affected? How can we
prevent its degeneration? The rise in diseases related to
disorders of the brain means that increasing our knowledge in
this field is no longer an option but a necessity and also one of
the greatest scientific challenges of our time.
Japan was the first country to launch a scientific program in
1987 to maximize the effectiveness of neurological research.
Three years later, the Americans proclaimed the nineties as the
decade of the brain and decided to set up a wide-ranging
research program. The Europeans followed suit in 1992.
(1125)
The purpose of Bill C-239 is therefore to ask Parliament to
follow the example of other western countries and to declare this
decade the decade of the brain and, at the same time, support and
recognize the importance of research in this field.
The brain is the seat of many neurodegenerative disorders and
diseases like Parkinson's disease and Alzheimer's, of mental
health problems like schizophrenia, emotional disorders, drug
addiction and neurological disorders such as learning
disabilities.
Canadians suffer from a wide range of neurological diseases.
In 1989, the Canadian Neurological Coalition sponsored a
ten-year retrospective survey of the frequency of neurological
diseases in Canada. The results of this survey are disturbing: it
was found that more than one Canadian out of six is affected by
some mental disorder.
Our mental health is a very fragile thing and over a lifetime, a
number of emotional problems may affect its delicate balance.
We may experience a divorce, the loss of a loved one, the loss of
a job, poverty, drug addiction, alcoholism or stress, and one
morning we get up and we are in poor mental health. The balance
is upset. The very strong are able to overcome such problems but
others are not.
More than 50,000 Canadians today are also suffering from
multiple sclerosis, the neurological disease most frequently
found among young adults in Canada. Researchers have yet to
find a way to treat this disease, and there is no explanation for
the fact that Canada is one of the countries where the probability
of getting this disease is particularly high.
There is also the problem of brain tumours. According to the
Brain Tumour Foundation of Canada, brain tumours rank second
as the cause of death in children under 14 and third as the cause
of death in men between the ages of 15 and 34. The number of
deaths caused by brain tumours increased 100 per cent between
1968 and 1987.
And what about Altzheimer's, a neurodegenerative disease
that causes the irreversible destruction of brain cells and is one
of the main causes of death among the elderly, although we now
know it can strike at any age. Today, more than 250,000
Canadians are affected by Altzheimer's and related dementias,
and it is estimated that 30 years from now, their number will
reach 750,000 30 years from now.
In addition to the social impact, neurodegenerative diseases
also have economic repercussions that cannot be ignored. We
already invest substantial amounts of money in patient
treatment and accommodation. As the number of individuals
affected by this disease increases, long-term treatment will put
an additional burden on health costs.
According to a study on health and aging in Canada,
Canadians spend approximately $3.3 billion annually for the
treatment of at least 150,000 people with Alzheimer disease in
long-term health care facilities. This figure does not include the
costs to families caring for afflicted relatives at home.
7703
It is clear that diseases of the brain, including mental illness,
degenerative diseases such as Alzheimer's and stroke are very
costly. By making the public aware of disorders and disabilities
of the brain, we will be encouraging increased support for
research in this field, and thus stretching our health care dollars.
The decade of the brain has already begun. As I have already
mentioned, Europe and the United States have proclaimed the
1990s the decade of the brain, and a number of research centres
in Quebec and in Canada are already on board.
The Montreal Neurological Institute will be playing a major
role in the upsurge in research resulting from the proclamation
of the decade of the brain in the United States, decreed by
President Bush in 1990. The Neurological Institute, an affiliate
of McGill University, with about sixty professors, neurologists,
computer scientists, students and other researchers, is
participating in one of the most ambitious projects to come out
of the decade of the brain: the creation of a computerized atlas of
the most complex organ in the human body, the brain.
(1130)
This project to map the brain is part of an extensive program
being carried out by a large consortium of research centres,
co-ordinated by the National Institute of Mental Health in the
United States and funded by eleven American agencies. The
Montreal Neurological Institute, which is a member of this
consortium, is the only non-American institution to take part in
this important project, an indication of its reputation.
The Montreal Neurological Institute and its McConnell
Centre have become leaders, possibly world leaders, in the field
of brain mapping. Although we must recognize their excellent
research and their contribution to medical research in Quebec
and Canada, we must regret that this work is largely supervised
and financed by foreign interests.
In medical and pharmaceutical research, Quebec and Canada
have the ability to excel and be leaders and, for that, we must
continue to promote research and development. Proclaiming the
1990s the Decade of the Brain would be major support, since it
would make Canadians and governments aware of investment in
prevention, research, treatment and rehabilitation for those who
suffer from various diseases of the brain.
Today, millions of Quebecers and Canadians and their
families have the right to hope that science will elucidate the
mysteries of the human brain. Following recent discoveries in
genetics, with research and exhaustive studies compiled over
many decades and extremely sophisticated medical equipment,
scientists are about to penetrate one of the most closely guarded
secrets of our civilization.
The impact of such a discovery is incalculable. Not only
would it help to finally find a cure for the terrible mental
illnesses that ravage our society but it would also make it
possible to take a new approach and even cure certain disorders,
like phobias, addiction and even violent behaviour.
While we support research and wait for further discoveries,
we must propose effective prevention programs. We must
always keep in mind that as our health care system and its
funding are restructured, we must adopt an approach based more
on prevention and education.
As health critic of the Official Opposition and as a member of
the Bloc Quebecois, I am pleased to support Bill C-239 and to
ask this Parliament to proclaim the 1990s the Decade of the
Brain.
[English]
Mr. Ken Epp (Elk Island, Ref.): Mr. Speaker, I am very
honoured to enter into today's debate on Bill C-239. I will begin
by acknowledging the good work of the hon. member for
London West in bringing the matter forward for our interest and
debate.
I would also like to go on record as applauding all those many
researchers in the private enterprise companies and certain
government funded organizations that do research. I would also
like to give my accolades to those who work in medicine,
particularly in the area of neurological and brain disorders.
I think the bill is somewhat misunderstood because of its
name. Not long ago a columnist in one of the Toronto papers
indicated total ignorance of the subject. The same thing
happened this week in my constituency when I indicated to
someone that I would be giving a speech on the decade of the
brain today. She laughed and said: ``Don't you people have
anything worth while to do there? Everybody has a brain''. She
had totally misunderstood. When I explained to her that we
wanted to increase awareness about brain disorders and increase
awareness and understanding for people with these various
illnesses and diseases, her attitude changed abruptly. She
immediately became very supportive.
(1135 )
I could probably use my time best today by bringing some
personal experiences into this debate. I have been challenged
and privileged to be near some people who have suffered from
brain disorder. I would like to say first that it is right in my own
family.
In February 1945 my mother was taken to the hospital because
though we did not know it then, it was time for our little sister to
be born. To everyone's regret there was what was called an
accident. Actually it was very clearly an error on the part of the
7704
medical people present. It was ignorance. My sister suffered
brain damage at birth because of oxygen deprivation.
My sister is going to be 50 in just a few months now. All her
life she has suffered from a disorder called cerebral palsy. She is
a bright young woman and understands everything but she is
unable to speak. How do we know she is bright? It is because she
has developed her own language that my mother mostly
understands and the rest of the family understands to some
reasonable degree. However she does not speak so that anyone
else can understand. She is totally dependent.
How I wish there had been enough information so that
hospital workers would know that one does not prevent a baby
from being born because the timing is inconvenient, thereby
causing this very severe trauma for our family over the years. I
will say just as a parenthetical phrase here that I take great
umbrage at the suggestion from some that perhaps my sister
should be put away because she is not useful to society. She is
part of our family and we love her dearly.
I would also like to share another experience of a young lady
who used to come to our home when she was in nurse's training.
She got married and had a family. One day she and her husband
and young family were in a car accident that was not of their
cause. Unfortunately their oldest son, at that time a very bright
precocious 10-year-old, suffered brain damage. He has become
totally dependent. His life was never allowed to be fulfilled as it
would have been had that not occurred. Despite the best medical
efforts, it seems there was nothing that could be done for him.
The next experience is probably the one closest to our family.
My wife and I know a couple who have been our closest friends
for years. About 10 years ago my friend who is indeed even
younger than I-I guess just about everyone is younger than
I-showed the first symptoms of what was diagnosed as
premature Parkinson's disease. I do not know how I can express
and communicate the impact that has had on his wife, his family,
his own life and those of us who know him and who care for him.
My friend went through some research studies. He was
involved in some of the experimental work. A number of years
ago he underwent a new and very intriguing surgery. They
actually took off the cap of his skull. A cavity was made between
the two hemispheres of the brain in the part that is called the
caudate nucleus which generates the chemical dopamine which
is necessary for muscular movement. After a short time they
operated on him again and removed part of his adrenal gland.
That was put into the cavity in the brain. They thought that
perhaps it would stimulate the caudate nucleus again to do its
work.
(1140 )
Unfortunately this attempt was not successful and 10 years
later now my friend continues in total dependency. I am sure
members can hardly understand the impact that has had on us.
We try to see him every week, although with this new job I have
it is more difficult. He cannot speak most of the time. He
communicates very poorly and it is a very severe intrusion into
our relationship because we cannot communicate well.
Those are some examples. I am sure all of us can relate to
someone who has had these problems. The question is what we
should do about it. The proposal before us is to declare the
nineties the decade of the brain, the purpose being to promote
research and understanding. Certainly we must do more to
promote understanding of these diseases among Canadians and
people worldwide. People do not know how to react when in the
presence of those with a brain disorder. They need to be
educated. They need to be taught.
I think of my friend in the hospital. At times he can move very
easily and then within minutes he is totally immobilized. Even
the nurses misunderstand and sometimes ridicule him. How
unfortunate. There needs to be more understanding.
We definitely need to put our resources into research. I do not
think Canadians would approve of the bill if they thought it was
only making a case for people to travel around the world on
junkets to get together and have a good time. However if it is
used for people to work together internationally sharing their
research and discoveries and promoting advancement in this
cause, and if it is genuinely used in an efficient way I am sure
there would be a high degree of support.
We need to promote medical research, but we also need to
start looking very seriously at how we are spending money in the
whole medical field. It is atrocious that people with brain
disorders and brain tumours sometimes have to wait for up to
half a year before they can get an MRI diagnosis while we fritter
away our money on other things.
We need to focus very sharply the limited funds that are
available to us and use them for properly directed research. We
need to make sure that some very distinct objectives are met in
that research.
We could accomplish a great deal if we were to focus on this
issue in the same way the Americans did some several decades
ago when they said they would put a man on the moon. They put
all their resources into it, all their technology and top scientists.
It is definitely a challenge to us to do that and to focus our
resources. I am sure that through research and with our scientific
abilities and the available technology we can do very much to
discover new frontiers in this area.
Mr. Rey D. Pagtakhan (Winnipeg North, Lib.): Mr.
Speaker, I rise this morning to voice my strong support for Bill
C-239, an act respecting the decade of the brain. I also would
like to commend my hon. colleague from London West for her
initia-
7705
tive in bringing the issues of mental and neurological health of
Canada's citizens to the floor of the House.
I feel the case for the adoption of the bill can best be made by
applying a legislative litmus test. The questions for us are: First,
can the bill if enacted make a positive difference in the lives of
all Canadians? Second, can the bill make a positive contribution
to Canada as a whole? In both instances the answer where Bill
C-23 is concerned is an unequivocal yes.
(1145)
Formally declaring the 1990s the decade of the brain can only
serve to heighten awareness, as has been said, of neurological
and mental health disorders in Canada and throughout the world.
Awareness can do much to dispel some of the damaging means
surrounding mental and neurological illnesses and their victims.
That awareness can prompt Canadians to monitor their own
mental and neurological health more carefully in a preventive
way and thereby prevent ill health. Awareness can increase our
resolve as a nation to support efforts to develop cures and
superior treatments for the variety of elements that afflict the
human brain and the human mind.
Some observers of this morning's debate may wonder why we
in the House have elected to focus part of our energy and
attention on the health of the brain. Certainly it is not as though
the afflictions that strike other areas of the human anatomy are
any less worthy of our attention. Indeed the Canadian
Neurological Coalition has noted: ``Far from being a single
organ to be centred out, the brain is the focus of an enormous
range of frontier medical science as the seed of logic, reason,
creativity, intelligence and yes, even compassion and human
understanding in the human body. We are understandably taken
aback when disease affects the normal, healthy functioning of
the brain''.
Witness the public reaction when a former U.S. president
announced just this past week that he is suffering from
Alzheimer's disease. So much of what makes us human is rooted
in our brains. Mental and neurological illness has the power to
strip us not only of our good health but also of our identity, our
sense of human self.
The statistics from the neurological association placed the
number of Canadians affected by disorders of brain at some five
million, nearly 20 per cent of Canada's population. This number
only serves to underscore the importance of acting to call
attention to the various ailments that range from strokes,
degenerative disorders, neurogenetic diseases, to speech,
language and hearing disorders.
There is hope. Medical scientists in Canada and throughout
the world are working diligently to find effective treatments for
the various disorders. As they do so, they are also unlocking the
mysteries that are intrinsic to the body's most complex organ.
As our understanding of the brain and the pathogens and
chemicals that attack it has broadened to techniques such as
magnetic resonance, imaging and computerized action
tomography, sophisticated treatments previously unimaginable
have become reality today.
As the neurological coalition points out, neuroscience has a
direct impact on almost every area of modern medicine,
including cardiovascular and immunologic disorders. The
coalition has stated: ``Studying the brain has enormous potential
for contributing to the health of Canadians and decreasing the
severe economic and emotional burden exacted on our society
by the diseases and disorders that affect the brain''. Disorders of
the brain ultimately affect the remainder of the human body.
``Declaring the 1990s the decade of the brain'', the coalition
adds, ``would ultimately increase public support of research,
thereby reducing the eventual government burden of hospital
and service delivery costs''.
For the thousands of Canadians who suffer from Alzheimer's
disease, Parkinson's disease, Huntington's disease,
schizophrenia, multiple sclerosis, epilepsy, dementia,
amyotrophic lateral sclerosis and other disorders, this
declaration would be proof positive that the government would
not turn a blind eye to their needs and, indeed, that the
government would continue to give them the attention they
deserve.
(1150 )
It is for these individuals as well as for the health and
well-being of Canada as a whole that I offer my wholehearted
support for Bill C-239, an act respecting the decade of the brain.
Ms. Margaret Bridgman (Surrey North, Ref.): Mr.
Speaker, it gives me great pleasure to speak on the bill. I
commend my colleague for London West. I have listened to the
debate today. We have discussed the intricacies of the brain. We
have also discussed numerous illnesses of the brain.
The brain is indeed a very complex organ. Attention should be
given to the brain. I feel strongly that we are not aware of how
important the brain is to us. Everything we look at, everything
we do, every philosophy we have has been generated by the
functioning of our brain. It is an extremely important organ and
we know very little about it.
My colleague from the Bloc commented on the mapping of
the brain. It was not long ago that we thought memory had a
specific location in our brain. Experiments that have been done
on Parkinson's disease have shown that one can have very small
7706
sections of the brain stimulated and suddenly start singing the
Coca-Cola song or something.
We now realize that the brain is functioning like the rest of our
body based on chemical components. It is the chemical structure
of our body that allows messages to pass through the synapses,
making us function and do things that we think are very
important to our lifestyle and to build the societies we need.
We talk about brain disorders. Someone here previously
mentioned that five million Canadians are suffering from brain
disorders. It was also mentioned that a considerable amount of
the health care dollar is spent on conditions involving the brain,
which is true, but this does not seem to be a situation that is
going to go away rapidly. We do not cure a condition of the brain
in six weeks like we do a fracture of the arm or some other bone.
Disabilities of the brain can vary from very minute kinds of
behaviour pattern to extreme disorders. We really do not know
why this is happening. It is very essential that we look at this
organ and try to understand it so we can better understand our
own lives.
For example, in my background of psychiatric nursing I have
had the opportunity to witness and work with people who are
totally incapable of dressing themselves. They do not know how
to put on their pants. They will stick their arm in the pant leg. On
the other hand, the particular young man I am thinking of could
be given questions like: ``What is the total of 2,925 plus-?''
One could go on and on with a list of figures. He could have the
answer by the time one was finished saying what the figures
were. Yet here was a man who was totally incapable of
functioning in any other way. All that was required to get his
mathematical mind going was the bribe of a cup of coffee. He
was very serviceable in the accounting department and that
seemed to be his role. Those were the days before computers.
The other thing we tend to think about is the human brain. We
have to also consider what has happened over the years in
relation to our awareness of animal brains. We are now looking
at the possibility of not being the only species that is capable of
thinking. There is a tremendous amount of research being done
on dolphins. We are gradually becoming aware that other
animals do indeed communicate. This is something that has
come about because of some people's awareness of the brain, its
intricacies, its unknown powers, et cetera.
(1155)
We do not actually know what we are capable of doing. We
hear people talk about having a sixth sense, ESP. Some of us
think that we know what that means; some of us do not. Some of
us are very capable of carrying that out. Obviously there is a
mechanism in our brain that could be developed along this line.
Again, we do not know because of lack of research or whatever.
Also with regard to awareness, we seem to be more aware of
the mysteries and the wonders of outer space, for example. That
can be common coffee table talk in restaurants or wherever. Yet
we do not even know the capabilities of our own brain or our
own head, our capabilities of what we as a species can do. We
wonder about outer space and this kind of thing. We are more
aware of that than what actually makes us who we are. Nothing
that we have achieved to date would be here were it not for the
capabilities of our brain, and yet we still do not understand how
it functions.
A few years ago schizophrenia was thought to be, and some
aspects of schizophrenia are still thought to be, a behavioural
disorder. Through research it has been discovered that there is a
physiological situation involved in our bodies that creates some
diagnoses of schizophrenia.
Another tremendous condition affecting us today in our
present lifestyles is depression. We really do not know why we
get into the various states of depression, yet we have all kinds of
drugs and all kinds of people taking these drugs for depression.
We are rapidly moving into a situation in our society where we
are going to have a pill for everything. You can probably change
your personality if you just start taking medication.
We realize that the brain is totally dependent on the chemical
constitution of its environment. We also realize that it is very
very subject to trauma. There have been situations in which
trauma has occurred and we do not understand why. It is not only
trauma. It can be stroke as well. Certain people are left with
aphasias. These conditions can differ as well. Some people can
say only half a word. Some people know what they want to say.
For example, they know it is an ashtray but they cannot
remember the name so they say ``something to put your cigarette
in''. This is debilitating for them in their existence. We do not
know how to help them help themselves.
I strongly advocate that the decade of the brain, and I realize
that we are about halfway through it, be recognized. I think that
our awareness as a species is inadequate. I would also suggest
that it not only happen once in a lifetime but that it happen
probably once every hundred years, if it is going to take this kind
of legislation or this kind of awareness to make us aware that we
do not know very much about ourselves and what we are capable
of doing.
Mrs. Barnes: Mr. Speaker, I would seek unanimous consent
of the House to make Bill C-239 votable.
The Deputy Speaker: Is there unanimous consent to make
this a votable item?
An hon. member: No.
Mrs. Barnes: Therefore I move:
7707
That the bill be not now read the second time but that the subject matter thereof be
referred to the Standing Committee on Health; and that accordingly the bill be
withdrawn.
The Deputy Speaker: Colleagues have heard the motion to
withdraw the bill and refer the subject matter of the bill to the
Standing Committee on Health. Is there unanimous consent for
that?
Some hon. members: Agreed.
(Amendment agreed to.)
The Deputy Speaker: Accordingly, the order is discharged,
the bill withdrawn and the subject matter thereof referred to the
Standing Committee on Health.
(Order discharged and bill withdrawn.)
_____________________________________________
7707
GOVERNMENT ORDERS
(1200)
[Translation]
Hon. Alfonso Gagliano (Secretary of State (Parliamentary
Affairs) and Deputy Leader of the Government in the House
of Commons, Lib.) moved:
That this House take note of the Second Report of the Standing Committee
on Industry (``Taking Care of Small Business''), presented to the House on
Tuesday, October 18, 1994.
He said: Mr. Speaker, in the ten years I have been sitting in
this House, I have always taken an aggressive and enthusiastic
stand for the small and medium-sized business sector. This is
one of my priorities because I know how crucial and invaluable
the vitality of our small and medium-sized businesses is to our
economy.
Our small business sector accounts for nearly 40 per cent of
our gross national product. It already provides employment to
over four million people across Canada and generates a great
many new jobs. Between 1979 and 1989, 85 per cent of new jobs
in Canada were created by small businesses. This sector of our
economy is the one with the highest growth rate. Because they
are closer to the people and more closely tied to the community,
small businesses are at the heart of our society. They are part of
our daily life. The vitality, creativity and success of Canadian
businesses is recognized world-wide. We all benefit from the
talent, ingenuity, perseverance and sense of responsibility of our
small business leaders.
Of course, much attention is being paid to Quebec Inc., these
groups of Quebec businesses that have grown very quickly
during the 1970s and 1980s. This is the fabulous success story of
small businesses that expanded greatly in a very short time with
government assistance, particularly that of the federal
government. But Quebec Inc. is more than that. It is also
thousands of less flamboyant and lesser known businesses
which are nevertheless very successful and, more importantly,
provide employment to thousands of people.
I am very proud of the fact that our government has made
assistance to small businesses one of its priorities. For years,
when we were in opposition, I have done everything to try and
make the previous government realize how important our small
and medium-sized businesses are to the Canadian economy. I
asked in every possible way for governmental red tape to be
reduced, single windows to be established and access to capital
be made easier. I suggested that our embassies and consulates
put more emphasis on the export of Canadian products. I called
for the Canadian government to take a more active part in
developing new markets in conjunction with businesses.
I must say that the events of the past week have made me very
proud and very happy. Night after night I could watch on
television as our Prime Minister and hundreds of business
leaders from here developed trade ties with the most populous
country in the world: China. The approach used by Team Canada
has already been widely praised as a model of effective and
efficient trade development. This is when we were able to see
how a Prime Minister that takes the trouble to do so can, better
than anybody else, develop trade opportunities abroad.
(1205)
The team that represented us in China is an all-star team; it is
the best team our country has ever produced. All my colleagues
will agree, I am sure, to award the Prime Minister the first star of
this historic diplomatic and trade mission. However, its success
is not measured in goals as in hockey. It is measured in terms of
jobs for our workers and expansion opportunities for our
businesses.
This diplomatic and trade achievement did not happen by
accident. It rests on this government's fundamental belief in the
need to identify in concert with the private sector the strategic
niches likely to enable the small businesses of today and
tomorrow to achieve their full potential. In this regard, my
colleague, the Minister for International Trade, has just
published a report outlining how the government intends, with
the help of banks, to shore up its support of small exporters.
This report sets out an action plan and proposes concrete
solutions to the needs of small businesses to ensure their
development and their access to export markets. We still do not
fully realize how much momentum exports can give our small
businesses and our economy. For example, Quebec is a trading
province where not enough entrepreneurs care to face external
markets. Quebec exports are worth almost $35 billion a year, but
only 22 per cent of Quebec's small manufacturers export their
products. And they only export 14 per cent of their production.
7708
Two hundred businesses account for almost 95 per cent of
foreign sales. Let us think for a second about the amount of
business and the number of jobs that would be created if the
majority of Quebec's 160,000 small and medium-sized
businesses took full advantage of export opportunities.
The action plan identifies three areas where support of small
exporters must be improved: access to information, access to
short-term financing and access to intermediate financing.
Entrepreneurs will recognize these as areas where the
government's strategic involvement can largely benefit small
businesses.
Through the measures it proposes to make it easier for small
businesses to access information, this action plan is designed to
eliminate the real frustrations felt by entrepreneurs who want to
obtain crucial information on their export capacity. It creates a
real resource guide that will allow small businesses to save
precious time in their efforts to break into international markets.
It gives them access to a team of experts and a series of dynamic
and effective training programs.
We also want to create a climate of co-operation between
financial institutions and small businesses. This would meet an
essential need of our businesses. In this regard, the
government's role is crucial because many entrepreneurs were
not well treated by financial institutions during the recession.
As it is, Canada does not have enough businesses that can face
the new competition, without our small and medium-sized
businesses having to overcome financing problems.
This reality is clearly identified in the report of the Standing
Committee on Industry entitled ``Taking Care of Small
Business'', which was tabled recently and which we are
debating today here in this House.
(1210)
The report deals with the obstacles which our small
businesses must overcome to find the capital required to grow
and expand. The committee came to this conclusion: ``Financial
institutions, especially the banks, in accepting that their own
responsibility to society is greater than `merely' being efficient,
stable and profitable, must recognize the importance of small
and medium-sized businesses to the national economy''. This is
a very important and serious point.
I congratulate the members of the Standing Committee on
Industry for their clear and articulate report. Obviously, this
government wants businesses to develop and to create jobs
which will benefit all Canadians. For that to happen, we must act
on several fronts. We want services provided by the federal
government to be concrete, well targeted and, particularly,
efficient. This is why the Minister responsible for the Federal
Office of Regional Development-Quebec is in the process of
redefining the mandate of that agency. The minister wants the
federal government to become a strategic ally of small and
medium-sized businesses in every region of Quebec. He wants
federal services and programs to be better integrated and more
accessible for those businesses, everywhere in the province.
From now on, federal programs will be based on four
initiatives which relate to supporting the development of small
businesses, namely innovation, market development, promotion
of entrepreneurship and projects which serve as regional
catalysts.
The objective is to allow the Federal Office of Regional
Development-Quebec to help small businesses meet new
challenges, at a time when markets are increasingly more open.
The agency currently has 13 business offices in Quebec. It will
put these offices at the disposal of other federal departments, in
order to provide an integrated service to small businesses in the
various regions. The Federal Office will thus become the real
broker regarding information and programs; it will be the single
window which entrepreneurs have been asking for so long.
Federal services will therefore be accessible to all small and
medium-sized businesses in Quebec and there will no longer be
second-class businesses or regions in that province.
This work is not only being conducted in Quebec. Federal
agencies in other regions, including the Atlantic, the West and
Ontario, are doing the same thing, because the number one
priority of the government is to develop small and
medium-sized businesses.
Our government formally pledged to cut public spending and
we are taking measures to reach that goal. We must often make
difficult choices. However, we are firmly convinced that the
federal government must remain an efficient partner of small
and medium sized businesses, because they are the ones creating
the largest number of jobs.
Our approach will be better targeted and will rely more on the
provision of strategic services than on financial assistance. This
is what entrepreneurs have been asking for a long time. We are
going to concentrate on those sectors where the federal
government is better equipped to ensure real added value. There
will be no waste, nor any duplication.
Real waste would be to ignore the potential of Quebec regions
by depriving them of efficient federal services. As well, real
duplication would be for another level of government to build
from scratch a second international network to open world
markets to Quebec regions.
(1215)
Canada's geographic location is unique: Two main windows,
one on the Atlantic, the other on the Pacific, plus a long border
with the United States. We are in a unique position to develop
our trade with the largest markets in the world. This is how we
will ensure our prosperity.
7709
[English]
No doubt our small business sector faces many challenges.
Our entrepreneurs are concerned about the scope, the
complexity and the rigidity of the regulatory processes. Our
regulations are complicated and confusing. Compliance takes
too much time, effort and money. Regulation by different
departments or different governments leads to confusion,
overlap and additional paper burden. Small businesses
operating outside their own provinces often have to comply with
different product and operation standards.
In 1992 a Canadian Federation of Independent Business
survey found that 71 per cent of small business owners found
regulations and paper burden to be an increasing problem. It is
clear that with their limited resources small businesses face a
disproportionate burden of compliance requirements. The
government knows that and it is taking action to reduce that
burden.
The House committee on regulatory reform and federal
government review has been studying the situation. Thousands
of small business managers have contributed to the work of the
committee. More than 1,700 federal regulations are now
examined and improved.
The small business working committees will be submitting
their report within the next few weeks. The committee on
business environment has examined the regulatory best
practices of other countries and governments in areas such as
sunset legislation, elimination of unnecessary or inappropriate
licences, certification costs and the use of phase-in periods,
differential standards and thresholds to alleviate the burden.
It is also considering how to reduce the complexity of the
federal regulatory process, how to reduce or simplify the
numbers of forms, reports and records required by regulations.
We must also improve the delivery of our programs and
services. Currently there are over 700 federal and provincial
government support measures for small business. Accessing the
right program and service is a complex and most often a very
unfriendly process. There are extensive overlap and duplication.
Sometimes the government may also be competing with private
sector suppliers of services for businesses.
The government believes that it is urgent to take action. That
is why the Canada business service centres provide small
businesses with referrals to sources of assistance. They provide
quick, accurate information about relevant programs, services
and regulations as well as some diagnostic assistance.
Business service centres minimize telephone runaround, that
is where small business operators are sent from one office to
another, from one telephone number to another. The business
centre is supposed to take care of that problem as well as
inadequate or incorrect information and duplication of
government services. This will enable clients to make well
informed business decisions in an increasingly global economy.
Each centre offers a combination of products and services
tailored to meet the needs of its distinctive client base. Currently
19 federal business departments or agencies participate in this
initiative as well as other levels of government and
non-government organizations.
(1220)
The combination of participants varies from province to
province with the designated managing partners who are
responsible for the development and management of the Canada
business service centres. In British Columbia and Alberta it is
Western Economic Diversification. In Saskatchewan, Manitoba
and Ontario it is Industry Canada. In Quebec it is the Federal
Office of Regional Development and in the Atlantic provinces it
is the Atlantic Canada Opportunities Agency. Each managing
partner is well suited to deliver the best services to our clients,
the small business owners.
We want to go further. We want to spread the business service
centre concept to every province as a model of co-operation
between the public and the private sectors. We want to work with
the private sector, provincial and municipal governments to
eliminate duplication and overlap.
Our colleague, the President of the Privy Council, is currently
reviewing all federal government programs. A key element of
his initiative will be a rationalization of small business
programs.
This is more than the words and vague promises we were
given by the last government. This is action. This is action to
eliminate duplication and overlap. This is action to minimize
the paper burden small businesses have to face on a daily basis.
I am glad to see the Minister of Industry here listening. I hope
he will be listening to the debate all day so that in the near future
he can respond to the report of the House industry committee
and give us more good policy for small business.
In conclusion, this is action to help our entrepreneurs to do
what they do best. What small business does best is create jobs.
It is what every government has to do to help small business
create more jobs and when we have more jobs we have a better
country.
[Translation]
Mr. Yves Rocheleau (Trois-Rivières, BQ): Mr. Speaker, I
am delighted to take the floor on behalf of the Official
Opposition in this debate on the second report of the Standing
Commit-
7710
tee on Industry, since I am also the vice-chairman of this
committee.
The committee sat from February to September and then
prepared the final text of its report. We heard from 58 witnesses
and received 62 submissions. I must stress that proceedings
were conducted in a very constructive, cordial and non-partisan
atmosphere. The problem of business financing is, obviously, a
non-partisan issue and, although we are particularly interested
in the political status of Quebec, an issue which will remain
important and forever present irrespective of the political status
we choose.
In all, the committee came up with 22 recommendations. We
totally agree with some; we agree with others with some
reservations; but there are three recommendations on which we
totally disagree with the view and direction expressed by the
committee.
At this stage, I should probably remind you of the reason why
the committee considered credit or rather the tightening of
credit. Because of the recession, many members, especially in
Ontario, received representations protesting the attitude of the
business and banking worlds towards small businesses when it
came to credit. This generated a consensus among members of
the committee to study this question and find out whether or not
there was indeed a credit crunch. As we shall see it is not all that
clear.
(1225)
Concerning the 22 recommendations, I would like to draw
your attention to the major ones, those that seem to me the most
significant, starting with the ones we totally agree with.
The first recommendation we agree with and the most
significant is the second one, a recommendation to the business
world, and to banks in particular, that they report quarterly on
lending to small business. The collection, compilation and
publication of the data would give a picture of past economic
activity based not only on actual loans, but also on loan
applications. The information requested would include the size
of the business, the nature of its activities, the gender of the
applicant, the number of employees at the time of application,
the volume of sales and the location of the company, so we could
have, ideally by municipality, a true picture of the situation.
As I mentioned earlier, it proved impossible for the
committee to demonstrate, appearances notwithstanding, that
credit was tighter. In spite of all the horror stories which were
related to the committee and are familiar to any well-informed
citizen, especially the way borrowers are treated by bankers, the
committee members were unable to demonstrate that credit was
indeed getting tighter, due to the lack of proper data. We could
have demonstrated that credit was tighter if we could have
shown how many applications had been turned down and how
many had been accepted. But without the total number of
applications and the total number of loans, we are not in a
position to prove that credit was indeed tighter. All we can say is
that there was a drop in lending and that it may be due to a drop
in demand; we have documents from the Bank of Canada to back
this up.
It is presently impossible to prove anything, which justifies
this seemingly technical but very important recommendation to
the effect that, from now on, all business stakeholders,
especially the banking world, should report their activities on a
quarterly basis.
The second recommendation we totally agree with is
recommendation no. 3; it deals with the drafting of a code of
conduct which would compel both sides to better manage their
activities, especially with regard to interpersonal relationships.
On one hand, borrowers would have to disclose a certain amount
of information in an objective manner, and on the other, lenders
would have, of course, to behave constantly in an ethical
manner, avoiding arbitrary decisions and clearly stating all the
reasons why the loan is refused, and suggesting alternative
sources of financing. Moreover, all lending establishments
would create internal complaints-handling mechanisms.
As I said, we do agree with the establishment of a code of
conduct; we understand that one is already being drafted by the
Canadian Bankers Association.
The third recommendation of the committee with which we
agree is recommendation no. 5. It concerns the establishment of
an office of bank ombudsman, in case the internal
complaints-handling mechanism described earlier fails to
address the concerns of disappointed and frustrated clients. The
ombudsman would be independent, impartial and could
investigate complaints of breach of duty or maladministration
by the banking world. Also, following the British model, if the
complaint is well-founded, the bank could be required to pay
compensation.
These are the three recommendations of the committee with
which we readily agree.
(1230)
We agree with the rationale behind two other
recommendations, although we have some reservations. First of
all, there is recommendation 14 which promotes the creation of
a new category of banks, the so-called schedule III Banks. Let
me remind hon. members that Schedule I Banks are the banks we
are familiar with, that is the six major Canadian-owned banks,
and Schedule II Banks are foreign owned banks, for example,
the Banque nationale de Paris and the Hong Kong Bank. Now,
we would have Schedule III Banks, institutions set up by
Canadian stakeholders, like Canada Trust, mentioned in the
report, or by existing groups or very wealthy individuals in
Canada who would now be able to create their own banks.
7711
We have reservations, because this recommendation, as
worded, does not limit the size of these institutions, of these
Schedule III Banks. There is no restriction to avoid extreme
concentration of financial powers that would let some groups or
very wealthy individuals become even richer.
We also have reservations about the fact that there is no
restriction to avoid what can be called incestuous relationships
between the parent corporation and the subsidiaries set up by
this parent corporation. There is currently no code of conduct
for related companies, but what makes it worst is that this kind
of relationships can be set up at the expense of the people
dealing with these financial institutions.
Moreover, we have no guarantee that the Schedule III Banks,
these new banks, will be particularly concerned about small
businesses, even though this bill tends to promote competition
in the current banking system, by opening the door to new
players who would be more sensitive to the needs of small
businesses. The current recommendations include no measures
to ensure that these new banks deal more specifically with the
small and medium-sized businesses.
As I said, we agree with the principle, but with the
reservations I just mentioned.
We also agree with recommendations 18 and 19, which we
find a good lead that should be explored and which provide for
owners of small businesses to invest up to 20 per cent of their
own RRSPs in their businesses.
Since small businesses in general lack capital, we consider
this to be a good idea even though we should keep in mind that
the primary goal of RRSPs is to help Canadians and Quebecers
to better prepare for their retirements. We must realize that this
will always be some kind of alteration of the terms of reference.
The main objective is retirement planning. Until now, people
were allowed to use this fund to buy a first house; they would
now be able to invest up to 20 per cent of it in their own
businesses. This is not a bad idea, but we must remember that it
is an alteration in the terms of reference. So much so that if the
businesses go bankrupt, owners will not only lose their
businesses but up to 20 per cent of their RRSPs also. The loss
could be significant.
Also, nowhere is it stipulated that business people who have
invested part of their RRSPs must pay it back over a certain
period of time. Thus, the risk is all the more important. In any
case, we think that this recommendation is not supported by a
sufficient number of studies and that an in-depth study should
be carried out before anything is done.
(1235)
I will now turn to the three recommendations we completely
disagree with, as shown in the minority report which is an
integral part of the report. These recommendations are about
section 22 concerning labour sponsored venture capital
corporations, section 8 on the Small Businesses Loans Act and
section 10 on the Federal Business Development Bank and more
specifically on changing the name of the FBDB.
In case the minister has to leave to attend to his numerous
obligations, I will speak first on the changing of the name of the
FBDB. Personally, I find this proposal rather ludicrous. The
name of the Federal Business Development Bank is known in
Quebec as well as in English Canada. I think I forgot to mention
that one of the proposals is to change the name of the Federal
Business Development Bank to Small Business Bank of Canada.
This is nothing more than a business decision. It limits
considerably the bank's mandate because it is not only the small
business sector that has legitimate needs which have to be
addressed.
Of course, as a nationalist and a sovereignist from Quebec, I
cannot help but think that the minister and his parliamentary
secretary want to use the name Small Business Bank of Canada
as part of their referendum campaign strategy. It is very obvious,
Mr. Speaker. Every Quebecer will know it. I would almost like
to see the name changed just before the referendum campaign
because it would give us one more example to show the people
the kind of things that the federal government is doing, to show
them what is going on in the Langevin Block.
It is similar to what the government just did with the new
tourism policy, increasing the budget by $35 million to sing the
praises of Canada and Canadian federalism from coast to coast.
It is easy, especially when it is done with the taxpayers' money.
There is something indecent about changing the name of the
Federal Business Development Bank in this period of fiscal
restraint, right after the announcement of a new war budget. The
government wants to spend a lot of money at the taxpayers'
expense to play politics so that Quebecers will soon be able to
see, as my colleague the parliamentary secretary was telling me,
nice signs announcing the Small Business Bank of Canada in all
of the province's regional capitals. This must mean that the
government is short of arguments, which is comforting to us.
Labour sponsored venture capital corporations were our first
point of dissent. It is a very subtle way for the federal
government to interfere in an area under provincial jurisdiction.
I will read to you proposal no. 22. ``Labour sponsored venture
capital corporations. The committee recommends the adoption
of a new self-regulating mechanism for labour-sponsored
venture capital corporations. This mechanism would link the
annual supply of federal tax credits to the labour-sponsored
venture capital corporation's prior investment in small and
medium-sized Canadian businesses, and be subject to a strict
annual audit.''
7712
And here is where the shoe pinches: ``Where such a
self-regulating mechanism exists under provincial legislation,
the federal government would limit its review to ensuring that
the labour-sponsored venture capital corporation's performance
meets the objectives for which the federal tax credits were
provided''.
This is a very subtle, technical way of interfering in an area of
provincial jurisdiction, especially, in the case of Quebec, in an
area which is very well managed by the Quebec government.
That government, together with the Solidarity Fund, represents
a third of all labour-sponsored venture funds in Canada.
The Solidarity Fund was set up under a legislation which also
defines its objectives. The application of that legislation is well
managed, and we do not accept that the federal government
could be coming in through the back door, by defining
objectives for the Solidarity Fund because of the tax credits it
gives to Solidarity shareholders. If, in the final analysis, and
hypothetically, these objectives were not met by the Solidarity
Fund, the federal government could come in and change the
rules of the game, interfering with the Fund's mandate and its
portfolio management, because of the tax credits given to
Solidarity Fund shareholders. That scheme should be exposed.
It is also an attack on shareholders of the fund.
(1240)
If the federal government wants to do away with this tax
shelter, let it be upfront and say so publicly. Let it be open about
this, and wage the political fight that will ensue. It should be
warned, though, that we will join the fray, all the more so
because the Parti Quebecois government has kept its word and
eliminated the ceiling forced upon the QFL Solidarity Fund by
the former Liberal government in Quebec.
When this government tries to restrict such a positive
initiative, an initiative that is costly for the government but
maybe not that much, when it dares to create difficulties for an
institution such as the Fonds de solidarité, which is more than a
mere investment mechanism but is also a means to foster
regional economic development-together with other actors in
Quebec such as Mouvement Desjardins, the National Bank, the
Quebec Deposit and Development Fund, and local actors, the
Fonds de solidarité managed to create regional units in order to
fulfil specific regional needs-when this government dares to
interfere with instead of improving such an initiative, we have to
expose that action, which we will oppose as forcefully as we
can.
It would be ill-advised for me to do otherwise, since my
riding benefitted immensely from the Solidarity Fund. When
you think that CIP Forest Products, a well established pulp and
paper company, almost a multinational company, which closed
its doors for all kinds of reasons is now reopening with the help
of the Solidarity Fund which invested $28 million in
Trois-Rivières so that the plant can resume its activities and put
350 people back to work, you have to admit we will never be
grateful enough for the Solidarity Fund.
The other important point on which we disagree entirely, as in
the first two cases, has to do with recommendation No. 8 on the
Small Businesses Loans Act. That act is very popular and
increasingly put to use. I think it is a sound measure
implemented by the federal government which supports the
development of small businesses.
However, some committee members were of the opinion that
the administration of this act is too expensive for the public
purse. I think that is wrong. We will not successfully fight the
deficit by reducing investments. On the contrary, we should
think of investing much more in order to promote the
establishment and development of small businesses. That is how
we can promote economic growth.
Section 7 proposes the creation of a new program that would
help export businesses since we know that banks shrink from
lending on the basis of accounts receivable from foreign
customers. If memory serves me well, banks will guarantee
approximately 75 per cent of domestic accounts receivable but
in the case of foreign accounts receivable, bankers are very
hesitant, perhaps with good reason. That new program would
give some form of assurance to the banks.
We feel that this program should not exist by itself but be
included in an broader version of the Small Businesses Loans
Act. In that way, exporters would benefit from the act, but so
would the new economy types of businesses, those based on
technology, research and development, patents, those who have
no tangible assets as collateral to lenders. The act, therefore,
should have a broader scope and cover the working capital of
these small businesses. Then, given the guarantee offered by the
Small Businesses Loans Act, banks would lend greater amounts
to these businesses. That would show some vision, some
innovative spirit in dealing with those who represent Canada's
economic future, the young entrepreneurs of our new economy.
We think that is the key to fighting the deficit on the home front.
(1245)
As I said before, according to one school of thought, this
legislation is too expensive for the public Treasury. We think
that before any attempt is made to downsize the cost of this
legislation, there should first be a cost-benefit analysis to
evaluate the number of jobs created as a result of this
legislation: the amount of taxes paid directly and indirectly and
the money saved on unemployment insurance benefits and
welfare payments. To say that this legislation costs the public
Treasury millions of dollars shows a lack of vision and
innovative spirit and a failure to see the medium- and long-term
benefits. That was the third recommendation with which we
entirely disagreed.
7713
Before I finish, I would like to touch on two aspects that were
not included in the committee's recommendations or in
representations by the Liberal caucus, although the red book,
their major source of inspiration, mentioned two measures that
could very well have been included among the committee's
recommendations.
The first measure was the elimination, as planned in the red
book, of personal guarantees under the Small Business Loans
Act. The Liberals had promised to get rid of this provision under
the Small Business Loans Act; so that personal guarantees could
be used to obtain loans from other sources. The Liberals
conveniently forgot a promise that would have been a great help
to small entrepreneurs.
A second and more substantial measure was a commitment by
the Liberal Party of Canada to establish an industrial investment
fund to the tune of $100 million, four times $25 million, Mr.
Speaker! It was made quite clear during the election campaign
that the money would be there, and the mood was very
optimistic. Strangely enough, very little was said about this in
committee: no recommendation on the allocation or use of such
financing, of this amount of $100 million.
We can only hope that, if the matter is ever raised again, the
$100 million or $50 million-which is more likely-will not be
spent on a new program within a new framework but within an
existing framework and especially one that already exists in
Quebec.
On a more personal point, something was left out, something I
myself recommended which was considered for awhile but,
unfortunately it was dropped from the recommendations. It is
common practice among banks, and I know this from personal
experience, that when a business is in trouble or proves to be a
bad risk, the lender has the right to have an outside firm go and
check the financial status of the business. It does this at the
request and for the purposes of the bank, which bills the
individual, who is already in trouble, for the expenses incurred.
This means that the borrower is hit with a so-called double
whammy: he is already in financial difficulty, and then he gets
the bad news when this outside firm comes, not to further his
interests but those of the lender, and in the final instance charges
a fee that is often quite substantial and may mean the difference
between survival or going under altogether.
(1250)
I had suggested that responsibilities be at least shared if they
could not be completely assumed by the lending institution. This
was under consideration for a while, but it does not appear as a
recommendation in the final report. Personally I deplore it.
In concluding, I would say that we must always keep in mind
that when we talk about small and medium sized businesses, in
Canada, we are talking about 900,000 small organizations, a
good third of which are located in Quebec; this is more than just
a number, it is something we should never lose track of. Small
and medium-sized businesses are our hope for the future. If they
flourish, the economy in Canada and in Quebec will benefit. If
they vegetate, so will our economy. I hope that the report will
help improve the situation as a whole.
I would like to point out that regional economic development
is a provincial jurisdiction to which Quebec is deeply
committed. The Canadian government should always keep in
mind that, when it deals with regional development, it must be in
a supportive role, not as the driving force.
[English]
Mr. Werner Schmidt (Okanagan Centre, Ref.): Mr.
Speaker, it is a pleasure for me to participate in the debate this
afternoon.
It has been a privilege to work on this committee. It was my
first experience as a member to work on a standing committee of
the House of Commons. It was an exciting experience and a
particularly intense learning experience as we were exposed to
procedural matters. The substance of the committee was very
significant and required a lot of learning. It was a good
experience in terms of co-operation among members as well. It
showed beyond doubt that things can be made to happen if
people want them to take place.
This afternoon I want to focus on three things. First, why is it
necessary to take care of small business? Second, what are some
of the major elements affecting small business in the economic
and changing social environment that we are going to face?
Third, how will some of the recommendations in the report help
small business survive today and be prepared to meet the
challenges of tomorrow? It is within that context we can well
look at the report as setting some pretty good foundational types
of statements for the future.
Why is it necessary to take care of small business? Small
business creates jobs. Eighty per cent to eight-five per cent of
the new jobs created in Canada were created by small business.
It is also the engine of economic recovery. I can give some
examples from Kelowna. It has been described by many as the
best place to live in Canada.
What is the economy of Kelowna? It is small business. I can
give some specific examples. Western Star Trucks recently won
the Canada export award. In terms of the context of General
Motors and Chrysler it is a very small operation. Kelowna
Flightcraft recently got the contract for Purolator and is
distributing parcels and mail all over the world. Riverside
Forest Products supplies plywood and lumber products
internationally and nationally. Then there are literally hundreds
of small, often mom and pop shop operations that make up the
basis of the economy of Kelowna. Some of them are on the
cutting edge of new technology.
7714
Take for example Brenda Mines which had to close its mine
just up from Peachland and is now using technology that was
developed in that mining operation and travelling all around the
world, centred in Kelowna. These specialists are going into
South American and other countries helping these people to
develop their mining operations.
Northern Airborne Technology supplies much of the internal
electronics found in helicopters today. The very same small
businesses are providing a very interesting transition between
the old economy and the new economy. We have a truck that runs
on today's highways and yet is using computer technology in
terms of the way the trucks communicate with one another and a
whole system of record keeping is right on the truck as it moves
across the continent.
(1255 )
Let us now look briefly at the environment within which these
small businesses today and tomorrow will operate. Our society
is in transition. The farmer has become an agribusiness person
with specialized knowledge and skill in the agricultural
business. Blue collar industrial workers are becoming auxiliary
employees in many instances and yet they leave a very
significant legacy that affects all of us. With them came unions,
with them came middle income salaries without the need for
extensive post-secondary education, and with them came strong
political power.
Today a new workforce is emerging. That new workforce is
the knowledge worker. This workforce will be highly educated
and manually skilled. The transition from the predominantly
blue collar workforce to the new knowledge worker will require
a change of attitude, beliefs and values on the part of every
member of society. Education will become the centre of that
society. World economic competitiveness will rely on our
ability to acquire and apply knowledge. Productivity of the
knowledge worker will become the economic challenge of
society and productivity of the non-knowledge worker will
become the social challenge of the knowledge workforce.
To many of us these are new ideas with significant
consequences. Small business will play a significant role in the
new economy because small business represents the creativity
and ideas of the entrepreneur.
Let us take the establishment and growth of Microsoft as an
example. In the beginning it was an idea. Today it is a
multimillion dollar corporation that remains on the leading edge
of technology. It is particularly significant that Bill Gates, the
man who pursued the idea of the Microsoft company, is
rumoured to have recently purchased the ideas of Leonardo da
Vinci. That is very interesting: greatness then, greatness now;
two men, two big ideas, each in their own way changed the world
they lived in, the world we live in and the world that is going to
be facing our children and grandchildren.
Once farmers ploughed with horses, and today farmers drive
tractors with electronic sensors to monitor temperature
bearings, they talk to their home base via electronic telephone
from pressurized cabs, listening to quadraphonic music played
on CDs. Internal combustion engines have computerized fuel
injection systems. Making things is often now the function of
robots that do not get tired and seldom vary in terms of quality;
all ideas, all knowledge, all had their roots in small business.
Ideas are the key. Some of the characteristics of the new
economy will require new ideas if our economy, our society and
our small businesses are to benefit. We must recognize that the
new economy is knowledge based and that means that
production will be the application of knowledge and that
requires not one time learning but continuous learning. It relies
on highly specialized people.
That new economy is also global in scope. Knowledge knows
no boundaries. It is portable and can be applied almost anywhere
that people live. It is independent of race, age, sex, culture and
religion.
The new economy also affects and impacts the old economy.
Whether we live in the new economy or the old economy we will
still need food, clothing and shelter. This new economy also
requires its own infrastructure, for example satellites, fibre
optic cable communication systems and so on.
It will significantly affect our workforce. Training and
education will become central. Increasingly we will rely on a
voucher system of financing education by individuals. Private
and public institutions will be proliferating. Industry will take a
far larger role in the training and education of its people and
continuous learning will be the hallmark. That learning will
often be modular in terms of programming and in terms of times
when it is delivered or partaken of. Productivity and quality will
both be measured in terms of the availability and efficiency of
the application of knowledge.
(1300)
Another point that needs to be put in here is that the ownership
of the means of production will shift and will be redefined. It
will gradually move into the hands of the workers.
For many of us we know that this has already happened and is
happening right now. Pensions, for example, own increasingly
large proportions of the equity of businesses and through
deferred income very many workers are now owning significant
sections of the means of production.
There has also been a shift in sectoral development. Sectors
that were once the driving force of our economy are no longer as
important as they once were. Auto, steel, petroleum and housing
industries are still important. We still need them but they have
7715
been replaced as significant sectors by semiconductors and
computers.
Health and medicare, communications and
telecommunications and instrumentations are the new sectors
that drive the economy. They are the new engines of today's
economy. Today Canada's electronic industry is larger than its
pulp and paper industry.
The computer service industry in Canada employs more
people than the auto industry. More people in British Columbia
work in communications and in telecommunications than in the
entire forest industry. More people in Ontario are employed in
business services than in the construction industry.
More Quebecois work in health and medical care than in
construction, textiles, clothing, furniture, auto, forest and
mining industries combined. We are in the midst of significant
industrial changes and whether by sheer will or by
circumstance, we are making the transition from the old
economy to the new and small business is the key.
Why is it necessary to take care of small business? Knowledge
workers are the ones who will establish small businesses. Small
businesses will provide the flexibility for knowledge workers to
develop their ideas.
Adaptation to the new economy will require change. Small
businesses are much more likely to change than are large ones.
Why? There are fewer people involved. There are not as many
interrelated parts. Co-ordination and planning are much easier.
Learning can take part at one's own speed rather than having to
wait for someone else to catch up.
Change can be much faster. The concept stage to the idea
stage to the planning stage to the implementation stage can
happen with one person. There is no board of directors to
persuade. There is no senior manager to convince. There is no
petty company politics and there are no petty jealousies. Change
is easier and faster.
The rate of change will become a major factor in order to
maintain our competitive advantage if that is the situation in the
future and it will be. The small business person also owns the
knowledge. Take for instance a software company and the means
of production, the computer.
The farmer knows how to farm. He owns the land and the
machines. The small businessman needs money to get
established in the first place and then to do the operation that is
necessary in terms of hiring the right people and in building the
buildings that are necessary in a manufacturing operation. They
need money for expansion.
There are some serious difficulties with access to capital. One
of these is excessive taxation both in terms of payroll taxes and
in particular capital gains taxes. Financial institutions,
especially banks, stand in the way because they are so large and
slow to change.
Remember, one of the big things we are going to have to do is
change quickly and to do so successfully. They are often
untrained in personnel and not knowledgeable about the
knowledge based industries. There are some notable exceptions
but by and large they understand only hard assets. They do not
know how to value what is between the specialist's ears.
Concentration of financial powers in the banking community
in particular is also a resister, a very serious one. In Canada we
have eliminated the four financial pillars. We used to have
banks, trust companies, insurance companies, brokerage or
investment dealers, four distinct financial pillars. Banks now
function in all four areas. It has reduced competition among
these sectors. It has reduced the efficiency because the size
problem makes change difficult and slow.
(1305)
Of even more significance is that because of their
concentration these institutions now determine policy, a policy
that is first of all in their best interest and not necessarily in the
interest of the general public. Governments are unduly
influenced by that. It is a very serious consideration that has to
be examined.
The report does not deal with this thing but it is one thing that
is very significant and the omission should be recognized. It is
really significant that we look at some of the key
recommendations now and how they will tie in and help small
businesses and clear the way for them to do the things that have
to be done.
I would like to pay particular attention here to the community
based venture capital companies that exist in some areas. There
are a number of people who had advocated these. Larry Zepf is
the chairman of Canada's technology triangle alliance,
Kitchener-Waterloo, Guelph and Cambridge. This is a pilot
project that looks like it is going to do a lot of good things in
getting venture capital going. Mr. Doyle cited Austin, Texas, as
a good example of how local venture capital companies can
work.
In that city which is about the same size as Ottawa technology
jobs since 1981 increased from 10,000 to 30,000, a 300 per cent
increase since 1981. During that same period in Ottawa the
number of technology workers increased from 22,000 to 25,000,
a 13.6 per cent increase. That is all. Who is running the show
here? Who is at the leading edge?
There are some interesting things happening in Quebec. Let
me quote the senior executive vice-president of the national
bank: ``With regard to start-up capital the route we prefer is to
channel our resources through the many regional or sectorial
7716
risk capital corporations that exist in Quebec''. We would do
well to listen to these community establishments.
Gordon Sharwood, referring to a study by the Canadian
Chamber of Commerce, states community investment banks to
assist local entrepreneurs to assess risk and capital and apply
that capital are the things that we should be advocating in the
future.
Another recommendation that comes out of the report has to
do with the reporting of statistics to make sure that we get a
reflection of how well the banks are serving the needs of the
small business person. The new statistics should be reported
quarterly and indicate the size, type of loan, the nature of the
borrower, including gender and employment, the number of
people in the business, their sales volume, major sector of
operation and so on. One or more of these banks should report
quarterly to the industry committee.
Another key recommendation is code of conduct. I do not
know whether we have ever had of such a thing as a code of
conduct for the banks. They tell us that they have one. When it
comes to calling them to account, we wonder where that code of
conduct went. The recommendation says clearly that a code of
conduct shall be developed and that there should be an
independent, self-financing position of ombudsman to make
sure that the banks do live up to the code of conduct that has been
set.
In order for Canadians, business workers, citizens, all of us, to
receive the maximum benefit from the present economy and to
be prepared for the new economy we will require a new attitude
for government. First, the government should get out of the way
of entrepreneurs; second, set clear guidelines that establish
level playing fields for every one; and, third, prevent the
concentration of power by preventing the establishment of huge
combines and abuses of trust.
Another is the development of a new culture and attitude on
the part of each Canadian saying that government does
government and business does business. Neither one should try
to do what the other one should be doing.
(1310)
Specifically I would suggest that the role of government is to
establish and maintain a culture that rewards entrepreneurship,
innovation and research, and ensures a level, competitive and
honest marketplace. To do so it should emphasize achieving first
an attitude of spending by government that does not exceed
revenues and results in a balanced budget over a three-year
period beginning now; second, less interference in the
marketplace by getting out of business; third, by repositioning
and renewing government resources to maximize efficiency at
reduced costs; and, fourth, a commitment to no further tax
increases for Canadians.
We also need a new relationship among businesses, business
networking where businesses learn to work together in new
ways to help one another while maintaining a competitive edge
and a co-operation among businesses to help assess risk in terms
of getting new capital and negotiating interest rates with banks
and other financial institutions. This report is called taking care
of small business. The truth is small business is creativity. Small
business is ideas and if government gets out of the way small
business will take care of itself and us. I urge the minister to act
immediately to implement the recommendations in the report.
Mr. Dennis J. Mills (Parliamentary Secretary to Minister
of Industry, Lib.): Mr. Speaker, I have a short question for the
member for Okanagan Centre.
Sitting on that committee with him over the last nine months
was a real privilege. The member provided great insight and was
passionate in his concern for small and medium sized business.
He in large measure was one of the reasons why we virtually
presented a unanimous report to the House. It is something the
people of Canada really wanted, the first ever challenge to the
banks of Canada coming forward in a unified way.
My question to the member is one of clarification. Members
of the Reform Party say they do not want the government to
interfere in business or to get involved in business. Many of the
recommendations in the report would mean that we would have
to reopen the Bank Act and would in effect mean that we as
legislators were giving new direction to the financial
institutions. Surely the member is not advocating that we walk
away from giving that kind of advice to banks.
Mr. Schmidt: Mr. Speaker, I really appreciate the kind
comments from the parliamentary secretary. I guess this
becomes a mutual admiration society at certain stages because it
was pleasant working together.
With regard to the involvement of government in business,
the key point is that government should not do business but
should provide the kind of leadership and parameters within
which businesses can operate and where they can be in
competition with other businesses so that the marketplace can
operate and costs can be reduced and that all of us will benefit.
It seems to me that money left in the hands of the
entrepreneur, the individual Canadian citizen, will be far more
effectively spent than $1 put in the hands of a politician. It is in
that sense that we make the point.
Business people are far more effective in making business
decisions than government is about making business decisions.
Government should provide the legislation, a level playing field
that allows the business person to operate. That becomes the key
7717
and I am sure the hon. parliamentary secretary recognizes that is
an appropriate role for government and business. They should
not be mixed up like this. They should be separate.
(1315 )
Mr. Alex Shepherd (Durham, Lib.): Mr. Speaker, I also was
very happy to have worked on this committee with my hon.
colleague. Could he clarify for me one comment in his very good
and very well presented speech? He talked about his concerns
with concentration in our economy. Since we focused a lot of our
time on the banking sector I am assuming that is one of the
specific areas of our economy to which he is referring.
As we know, a high concentration of chartered banks basically
control the banking sector. Has he some specific proposals
regarding how to break the banks down into smaller units? What
are his ideas?
Mr. Schmidt: Mr. Speaker, the question is an extremely
cogent one and one that will require more study than I am
prepared to give it in the next two or three minutes. The fact
remains that the elimination of the four pillars that I mentioned
in my speech where we had a separate and distinct function for
trust companies, for insurance companies, for investment
dealers and for banks was a useful distinction.
Now that the banks are doing all of these things we have this
concentration of power. Somehow there has to be either more
competition outside the banking field so this can happen, or the
whole idea of concentration within the banks needs to be
re-examined. I would suggest the Bank Act has to be reopened,
as would certain other legislation. It would be a very useful
exercise for the House to get involved in that type of activity.
Mr. Dennis J. Mills (Parliamentary Secretary to Minister
of Industry, Lib.): Mr. Speaker, I am very excited about
participating in the debate. It is something I felt very strongly
about in opposition, as did the whole party.
As most Canadians will remember, the Prime Minister made a
commitment even before the red book was published. During the
last election campaign he made a commitment in the press
gallery across the street that his would be a government that for
the first time ever would challenge the financial institutions in
the country to become much more sensitive to the small
businessmen and women who are employing right now close to
80 per cent of the nation's workforce.
I put a little emphasis on women because it is not just the
language that is changing. The facts are also changing by the
contribution that women are making in terms of owner operated
small businesses today, not just in our economy but throughout
North America.
I was reading not too long ago in Fortune magazine that
women owned or operated businesses in the United States
employed more Americans than all the Fortune 500 companies
combined. That thrust of women participating in the
entrepreneurial sector, the small business sector of our
economy, is no less a dominant factor in Canada. It is very
important that all of us recognize that, especially the banks of
Canada.
After we were elected the first order of business with the
industry committee is living up to that commitment. I must
compliment the members of the opposition, the member for
Trois-Rivières, and the earlier mentioned member for
Okanagan Centre from the Reform Party. Without the unified
spirit and desire to really make this committee work, I do not
believe we would have the report we have before us today.
(1320)
Mr. Speaker, you have been around here for a long time. I have
not been around as long as you have, but I do know for a fact it is
very rare that a committee report has such a unanimous spirit
about it.
A second very rare thing is that there are no copies of the
report left. We had to order a reprint. It shows the keen interest
that all members of Parliament have in looking out for the small
businessmen and women in every constituency across the
country. We have all said repeatedly that the small business
community represents the greatest hope for putting Canadians
back to work.
Last week was our recess week and I had the privilege of
having lunch with a former parliamentarian, a former minister
of the crown, Paul Hellyer. He has just finished publishing a
book entitled Funny Money, a common sense alternative to
mainline economics. As I read the book on the weekend I
noticed there is just one page of his description of the attitude of
banks toward small business. For the benefit of the House I
would like to read a short excerpt from the book Funny Money
by Paul Hellyer.
Nothing irritates me quite as fast as a bank spokesperson saying, in response
to the suggestion that they make more money available to small business, ``We
have to act as guardians of our depositors' money.'' Such fatuous
double-speak! What they are really saying is that we, and we alone, will decide
for whom we will create loans and we prefer governments, brokers and big
business because that way we can make more money for less work. If they were
only concerned about the safety of existing deposits they would have been less
cavalier in making loans to Third World governments, large real estate
developers and the leveraged-buyout monopoly players. It was the banks'
greed, rather than their prudence as guardians of their depositors' money,
which ruled the day.
If the whole idea of creating new money is to facilitate the creation of new wealth in
the form of increased output, then the entire addition to the money stock should be
directed to that purpose. In effect new loans should be made for either investment or
consumption because they are the two sides of the same coin! I cannot remember a
market for anything that some enterprising entrepreneur didn't try to capitalize on. But
if, as in the Great Depression and in one or two recent recessions, existing capacity
7718
exceeds demand, entrepreneurs are unlikely to line up for loans to create additional
redundant capacity. So consumption, which creates income and savings for others, and
investment are Siamese twins which cannot be separated.
It is the small businesses, which create the most jobs and increased output,
that have the most difficulty getting bank financing. In the Spring of 1994,
Helen Sinclair, president of the Canadian Bankers Association, cited one of the
best known excuses. She admitted that banks have a problem in their
relationship with small business but defended their caution by pointing out that
federal government statistics show 50 percent of all small businesses don't
make it past their fifth birthday. That may be so but an equally interesting and
important statistic would be the percentage which failed because their bank
took away the safety net just as they jumped off the highwire. As I mentioned
earlier, I have never known an entrepreneur, myself included, whose bank
didn't try to put them out of business at one stage or another of their
development. It would be in the country's interest if a certain proportion of new
loans had to be made to small business with limited or no collateral where the
investors, as a condition, were willing to risk their own savings. Character
assessment might be part of the consideration. It is one which appears to have
been pretty well disregarded in recent decades.
Having considered that, the bank should be prepared to lose and write off
some proportion of the small loans each year. It should satisfy their irresistible
urge to gamble if they were to gamble on people who want to build real
products and provide real services for a change.
(1325)
I recommend the book that Mr. Hellyer put together. It is
extremely appropriate when we are debating the
recommendations of this report.
The report in question is a very significant signal from the
government, and supported by the opposition parties. Less than
a month after it was tabled, we are having an all day debate on it.
We realize it is a non-votable motion but it is very important
because it is the Prime Minister, the cabinet, the government
sending a signal that they are truly committed to the work that
all members are doing in trying to get the small business
community going.
Therefore Canadians have to ask ourselves what is in the
report that is going to change the attitude that banks will have
toward small business. I would like to begin by sharing with the
House and Canadians that starting with recommendation
number one in the report the attitude of banks will change.
The first recommendation is that the committee proposes to
continue monitoring small businesses' access to capital by
calling one or more banks as witnesses every quarter to review
their performance in lending to small business.
I can tell the House that never ever in our history have we had
a committee complete a report and then institute a
recommendation whereby a sitting standing committee of the
House agrees that at every quarter it will continue to do the very
work that it was doing in the first six months.
What does it mean? It means that probably in February,
because the report was tabled last month, the committee
members will sit around and say: ``Okay, what three or four
banks do you think we should invite first to come before the
standing committee to talk about the new products, the new
services and the performance that they have given to small and
medium size business?''
We are certainly not going to let them know in advance
because obviously that would not be fair. What we will do is put
them all on notice. There are many financial institutions in this
country of course. Some might want to come right away. We
cannot do that so we will randomly pull three or four and they
will come before the committee and report. By reporting to us
they are in fact reporting to all the people in Canada. At that time
hopefully they will be proud of the accomplishment they have
pulled off just since the report has been tabled.
However, it does not stop there. The second recommendation
in the report has to do with the reporting structure. Most
Canadians do not realize it but the current situation for banks
reporting to the Superintendent of Financial Institutions is very
haphazard. In other words, one bank will classify a small
business loan as anything under $500,000. Another bank will
say a small business loan is anything under $1 million. Another
one will say it is everything under $500,000 plus whatever
mortgages it loans that small business.
The point is there is no standardized reporting structure. It
means we do not have a handle on exactly what is going on with
the small business portfolios of all the financial institutions in
Canada.
I must say that recommendation number two is a very tough
recommendation. I am sure that the banks will find it very
frustrating to live up to this one. This is what it is. The
committee recommends that the Superintendent of Financial
Institutions, together with Statistics Canada and the Bank of
Canada, develop a new format for the collection, compilation
and publication of statistics on bank lending to small business.
(1330 )
These statistics should be based not only on the size and type
of loan but also on the nature of the borrower, including gender,
according to employment, sales, major sector of operations
and-key word here-by municipality. These statistics should
be reported quarterly. That seems self-explanatory but one
might ask why by municipality is important. Many members of
Parliament brought to our attention that they felt their
municipalities were not being serviced by the banks.
There might be a remote region of our country where lots of
people are putting money on deposit but the bank might not be
putting it back into the community. Recommendation number
7719
two will allow members of Parliament to call the superintendent
of financial institutions and say that they want to look at the
banking activity in the municipalities located in their ridings.
If all of a sudden it is discovered that a bank is doing well with
the loans it is putting back into the small business community in
the riding, we can let the bank know it is doing a good job. If
other banks are only taking out deposits and not putting anything
into the municipality, we can also write nice letters asking:
``What about our ridings? What about our municipality? The
deposits you are taking out of here are pretty large. Why can you
not put some back into the small business community?''
I believe recommendation number two is going to have a
profound effect. Everyone knows that the thing banks fear most,
believe it or not, is not government regulation. The thing they
fear most is competition. Banks cannot stand competition.
Never mind the schedule III stuff, we will get to that, but just
competition among themselves.
If you put the scanner on banks in your municipality and you
see that two or three of them are a way up there in their
contributions but a couple of them are not doing anything, that
does not look good to the depositors and the customers who
provide their lifeblood and their viability.
I am really confident that the recommendation which was
unanimously accepted will go a long way in stimulating the
small business community. There are many other
recommendations in this report I would like to deal with.
I would like to deal with the concern the industry critic, the
Bloc member from Trois-Rivières, stated in his address. The
member talked about his concern of this government's
commitment to the Federal Business Development Bank which
the committee recommended should be changed to the small
business bank of Canada.
None of us supported the condition that exists currently in the
FBDB. Most of us believe that the Federal Business
Development Bank needs to rethink its policy approach. It has to
be much more contemporary. It should look at new instruments
to get more financial support, not by going to the public treasury
but possibly by looking at the issuance of preference shares
which would not have an adverse effect on the treasury of
Canada.
However we believe that the small business bank of Canada, if
we could rename it that, could act like a supercharger in terms of
creating more interest in that field. In other words it would go
back to bringing attention to what it was designed for. It was
primarily designed to be there when the other financial
institutions were not supporting small and medium sized
businessmen and women.
(1335 )
We looked at one of the best banking systems in Canada, the
Caisse populaire Desjardins. The people from Desjardins came
before our committee. They have a fabulous system. We do not
have such a system in Ontario but I wish we did. We are run by
the paper pushing towers of Bay Street. That is the problem we
have in Ontario. We do not have a Desjardins movement. Many
of us thought that through redesigning and retrofitting the
Federal Business Development Bank we could create a much
more aggressive and grassroots approach to banking.
Bloc members should not think this is part of a referendum
strategy. It is a genuine approach to making sure that we have
more instruments in getting access to capital for small business.
I jokingly said to Bloc members that maybe we would set up a
couple of hundred branches of the small business bank of
Canada in Quebec to accelerate the federal presence in the
province of Quebec. I was only kidding when I said that so the
member should not think that is part of our design. We merely
want to make sure that this bank becomes much more
contemporary and much more aggressive in dealing with small
businessmen and women.
I will end my remarks by saying that the Prime Minister and
the Minister of Industry have led the way for all of us in the
House in making sure that small business becomes a front
burner sector in terms of policy making. They have also made
sure that this issue is put on the front burner in terms of
implementing change in legislation quickly.
I hope that the tone of today's debate can continue. The more
constructive we are in making the recommended amendments
that are needed to the Bank Act, the quicker we can get on with
making sure we create that environment the member for
Okanagan Centre described which will cause the entrepreneurial
spirit to flourish once again in this country.
[Translation]
Mr. Yves Rocheleau (Trois-Rivières, BQ): Mr. Speaker, I
have a question for the Parliamentary Secretary to the Minister
of Industry. Concerning the name change from Federal Business
Development Bank to Small Business Bank of Canada, I would
say that the principle of helping small business may be
worthwhile, but we consider that this would restrict the bank
unduly. And quite frankly, we object to the expression ``of
Canada'', which we consider inopportune and a bit too
pre-referendum to our taste.
I would like to ask the hon. member whether he believes that
the report deals fairly, sufficiently and adequately with the
concept of a new economy, considering that, as he will recall,
the committee was seeking to limit the application of the act,
while the opposition fought that notion and argued that any
restriction should be imposed only after a cost-benefit analysis
7720
of the pros and cons? As regards the new economy and the
guarantees to be given to the lender which make the lender
insecure, should we examine such issues? Does the hon. member
believe that the committee has done anything for the
advancement of science in that field so that the movers of the
new economy will be better served?
[English]
Mr. Mills (Broadview-Greenwood): Mr. Speaker, I realize
that the member for Trois Rivières is talking about the Small
Businesses Loans Act. We all agree that the Small Businesses
Loans Act has done a terrific job. When in opposition many of us
proposed amendments. I have to say that the Conservative
government of the day, believe it or not, listened to some of our
amendments and the Small Businesses Loans Act is working
right now.
(1340)
The problem of course is with the government float of $4
billion put on that Small Businesses Loans Act. Right now it
seems the float program has been so successful that the float is
tapped. Therefore the member from the Bloc is asking whether
or not I would recommend that we expand the float. This
decision of course is ultimately the responsibility of the
Minister of Finance.
I say to members opposite that I do not share the pessimism on
the loan loss on the Small Businesses Loans Act. I think the loan
loss will be much lower than the pessimists predict. The
pessimists predict it is going to cost the treasury about $100
million. I do not share that pessimism. The economy is coming
back. No doubt there will be some loan loss but I think it will be
considerably lower. Of course that spin about the loan loss
provision is causing people to get nervous about the float. In
fairness the committee said that we would look at it in the next
60 to 90 days.
A far more aggressive thing for us to do is to make sure that
the banks start picking up some of that slack in the small
business area which the Small Businesses Loans Act picked up
over the last year and a half. In other words now that the banks
realize the Small Businesses Loans Act did its job and they have
had time to rethink they can pick up the slack. As the member for
Spadina has often mentioned in committee and in the House, and
Mr. Hellyer supports his view, we should give some specific
targets for loans to small business. If we started pushing the idea
that a percentage of the portfolio in the banks should go toward
small business then maybe we would not need to augment the
float under the Small Businesses Loans Act.
Mr. Ian McClelland (Edmonton Southwest, Ref.): Mr.
Speaker, I read with great interest the industry committee's
report on small business. In my view there is one very glaring
omission and that is the tax base on small business and
businesses at large. I wonder if the member for
Broadview-Greenwood would care to spend a few minutes
talking about what could be done to encourage business through
the tax base.
Mr. Mills (Broadview-Greenwood): Mr. Speaker, that of
course is a glaring omission in the report. There should have
been some recommendation as to how this government should
look at tax reform for small business but that was not our
mandate.
I am confident that over the next 60 days this House of
Commons will look at comprehensive tax reform in a very
serious way. We are all getting signals that defending the status
quo is no longer the right option or the right path to take.
The Reform opposition has the view which I happen to share
that it is time the country had a single tax system, 20 per cent
across the board. Small business would not pay anything on the
first $50,000 which would go to reduce paper burden and a lot of
other things.
I hope we can have that debate because I think the whole
country is ready for it. However that was not the mandate of the
committee, but stand by.
(1345)
[Translation]
Mr. Gaston Leroux (Richmond-Wolfe, BQ): Mr. Speaker,
I am pleased to speak to government motion No. 16 on the
Second Report of the Standing Committee on Industry, for two
important reasons.
Primarily, first of all, there is regional development. There is
all the energy, efforts and action with respect to regional
development in Quebec, and I am speaking about true regional
development that will reach all the administrative regions in
Quebec, not just the major centres or the large cities, but the
furthest reaches of all administrative regions.
This is an exercise that has been going on in Quebec since
1984. It is a major exercise in defining regional development in
the regions, and a series of framework agreements are now being
signed, region by region, with respect to economic
development.
I would simply like to tell my government colleagues across
the way that regional development is Quebec's business and that
it is in order to avoid duplication, in order to increase the
efficiency of actions and investments in regional development
that all the members of the Bloc Quebecois, the official
opposition, are simply asking that the federal government
withdraw from regional development in Quebec.
``The Bloc Québécois Members of Parliament on the Standing
Committee on Industry are of the opinion that the Government
of Quebec is in the best position to recognize the financing
requirements of SMEs, and to develop and implement
programs''. So reads the first sentence in the dissenting report
by the Bloc Quebecois members of Parliament on the Standing
Committee on Industry, of which I am a member, studying
access to financing for SMEs.
7721
I therefore propose to take this opportunity to speak to
government motion No. 16 in order to broaden the debate and
thus express the dissent of the Bloc Quebecois, which continues
and which is linked to the federal government's overall
approach to regional development in Quebec.
The Bloc Quebecois is opposed to the interference of the
federal government in regional development for two very
specific reasons. First, because the federal government, instead
of eliminating regional disparities, only made them worse,
while precipitating the disintegration of peripheral regions, as
its action was limited to central regions.
Let us be quite clear. I mentioned earlier that regional
development in Quebec concerned all remote areas, and not
central ones such as major cities. One master agreement after
another is being signed with the Quebec government respecting
the economic development of all areas. But such federal
initiative has traditionally been limited to major urban centers
and has literally caused the disintegration of peripheral regions,
that is to say those regions outside of major urban centers.
Second, federal government initiatives within Quebec has
been synonymous with the duplication of organizations. And my
hon. colleagues know it full well. We all know of overlapping
responsibilities and instances of horizontal and vertical
duplication. They have been identified and the government even
indicated it was prepared to eliminate this overlap and
duplication in public administrations which are basically
mismanaged since public funds are being squandered over
various structures that serve essentially the same function. In
time, this adds up, as we have seen, to billions of dollars and we
end up today with a major deficit in the federal budget.
As for the disintegration of peripheral regions, I want to make
something quite clear to our colleagues opposite. Since 1974,
with the Liberals in power at the federal level, regional
development was generally funded under federal-provincial
agreements to which subsidiary agreements were added, as you
know.
(1350)
All these agreements covering the decade from 1974 to 1984
-these were 10-year contracts- totalled $1.8 billion, 26 per
cent of which was earmarked for the greater Montreal region and
4 per cent for Quebec City. This means that 30 per cent of the
total budget for this first set of so-called regional development
agreements went to central regions. This first Canada-Quebec
umbrella agreement for 1974-84 followed on the 1970 report by
Higgins, Martin and Rénaud, which had been ordered in 1969, as
you will surely recall, by the federal Department of Regional
Economic Expansion, DREE, for the purpose of directing the
federal government's activities for economic development in
Quebec. So it meant a doubling of federal involvement in
economic development in Quebec.
This report concluded that Quebec's economic weakness was
due to the weakness of its only major centre, Montreal. As a
result, the federal government's active involvement in Quebec
in the 1970s set the tone for its approach to Quebec and did
considerable harm to the Quebec government's regional
development policies. The federal government sees a whole
region or province as the focus of its regional development
efforts. The federal government does not consider the
geographic and demographic regions that make up a province.
From 1972 to 1984, regional development focused on certain
growth centres. That was the approach. The way to a better
distribution of wealth involved industrial solutions
concentrated in urban areas. The policies adopted were
disastrous for the outlying regions since the urban centres went a
different way and it aggravated the rural crisis by draining
workers, resources and capital.
I will explain the prime example which concerns the
allocation of the budget and the corrective action that can be
taken.
A second umbrella agreement was signed in 1984, in effect
extending the first one for ten years. Knowing full well that
outlying regions are breaking down, they renewed a $1.7 billion
agreement for this period, allocating 36 per cent of the budget to
Greater Montreal and 10 per cent to Quebec City. Between 1984
and 1994, the federal government increased its involvement in
central regions to the detriment of outlying regions.
On the subject of regional development, it is important to
respect the extraordinary dynamics between small and
medium-sized businesses, municipalities and all stakeholders
in the areas of education and health to organize a region in such a
way as to prevent an exodus of our young people. This
situation-the exodus of our young people and the aging of our
population-is one that the hon. member is experiencing in his
own region and that is also being experienced in other regions of
Canada.
The subsidiary agreements that make up this second
Canada-Quebec agreement, such as the regional and economic
development agreement signed in 1988, confirm the existing
structural inequalities. Businesses are allowed to set up shop in
and develop central regions where they will find a concentration
of people, a market. For some businesses, it is better to be based
in a densely-populated area with a market of 2 million people
than to move to an outlying region.
As we are fully aware, small and medium-sized businesses
have different distribution systems for their products. Exporting
businesses, in particular, can be based outside major centres,
since they can ship their exports by road or other types of
transportation allowing them to set up shop elsewhere.
7722
Quebec regions are in an advanced state of disintegration. The
demographic weakening of outlying regions is symptomatic of
the state of degradation in several regions. The population of
outlying regions continues to decline dramatically, especially in
rural areas, thus compromising the settlement and viability of
these regions. You are aware that people in every region fight to
keep plants, small businesses, schools and even whole villages
from closing.
(1355)
This legislation tabled by the new Liberal government to
establish the Department of Industry is patterned on the
centralizing principle which has always prevailed within that
party, in that it provides the same rigid and heavily centralized
structures, as well as national standards for the whole territory.
We will still have an across-the-board policy applying to all
of the very large Canadian territory, regardless of the particular
situation in the various regions.
Take a look at how program services and business services are
split within the regional operations branch of the department. It
says very clearly-and the member who tabled this motion
should listen-in the development program of the Department
of Industry, under the heading ``Regional Offices'', that: ``This
component establishes a general framework designed to
promote excellence and competitiveness in every region of the
country. Regional offices participate in the development of
policies designed to promote the fulfilment of national
objectives''. We are back to square one, because these are
precisely the national objectives which ruined remote regions in
Quebec.
By integrating the federal offices of regional development
and transforming them into service centres for Canadian
businesses, the Liberal government creates a single window to
provide information on federal, provincial and municipal
programs and services in Quebec, with the objective of-
[English]
Mr. Mills (Broadview-Greenwood): Mr. Speaker, I rise on
a point of order. I listened carefully for the last 10 minutes to the
member from the Bloc. We are on Motion No. 16 which talks
about the industry report taking care of small business. We are
halfway through the member's remarks and so far we have not
had anything that is relevant to the message of that report.
Some hon. members: Hear, hear.
The Speaker: Hon. members have me at a bit of a
disadvantage. I just came into the chair. It surely is not a point of
order.
[Translation]
As there are a few minutes left, the hon. member could carry
on now and continue after question period, since he will have
some time left.
Mr. Leroux (Richmond-Wolfe): Mr. Speaker, I understand
that it hurts when we discuss regional development and refer
specifically to small businesses in remote regions. This is what I
am talking about. This is related to the motion tabled. It hurts the
hon. member, but he is depriving me of some of the time allotted
to me.
The Speaker: Order! I can assure the hon. member that he
will be able to use all the time to which he is entitled.
[English]
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.
_____________________________________________
7722
STATEMENTS BY MEMBERS
[
English]
Mrs. Brenda Chamberlain (Guelph-Wellington, Lib.):
Mr. Speaker, in the past few weeks we have acknowledged the
anniversary of the last federal election. We must never forget the
volunteers who worked on the behalf of all candidates and all
political parties throughout the election.
My campaign manager, Alex MacCrae, worked very hard on
my behalf. His caring and enthusiasm always supported me and
provided encouragement to the volunteers who knocked on
doors, delivered brochures, telephoned and did all of the work
associated with elections.
All of us are here today because of individuals who worked
with endless energy on our behalf. Volunteers represent all ages
and come from every background in order to elect their
candidate. Whether we are elected or not we are all winners
because of these people who are often strangers to us and who
believe in us and in what we do.
* * *
[
Translation]
Mr. Bernard Deshaies (Abitibi, BQ): Mr. Speaker, I have
just returned from a trip to Belgium and the Netherlands
organized by the Department of Veteran Affairs as part of the
Canada Remembers Program.
In connection with Remembrance Day, I wish to draw the
attention of this House to the respect and gratitude expressed by
the people of Belgium and the Netherlands at the various
ceremonies I attended, which were held to commemorate the
fiftieth anniversary of the liberation of their country by
Canadian soldiers in October and November, 1944.
7723
The Bloc Quebecois is proud to take part in events of this kind
and, in so doing, ensure we will never forget the Quebecers and
Canadians who gave their lives to defend and liberate these
countries from the Nazi yoke.
May the memory of their supreme sacrifice help us avoid
further armed conflicts and renew our attempts at reconciliation
and peace.
* * *
[
English]
Mrs. Jan Brown (Calgary Southeast, Ref.): Mr. Speaker,
today marks the final day for which a court appeal can be
launched against the Goat's Eye project at Sunshine Village ski
resort. This project was approved in 1992 subject to
endorsement by the Environment Assessment Review Panel,
which was given.
In September 1993 Parks Canada and Sunshine executed a
construction project agreement and a $100,000 bond was issued
by Sunshine Village. In November a court injunction was sought
by outside environmental groups to prevent further
development. In January 1994 the Minister of Canadian
Heritage halted development at Sunshine and requested the
project be referred to a FEARO panel.
Sunshine Village then launched Federal Court action to
enforce its contractual rights with Parks Canada. On October 13,
1994, the Federal Court of Canada ruled in favour of Sunshine
Village, given that the environmental assessment provided for
sensitive management of the ecosystem during construction.
On behalf of all Canadians who in good faith conduct
legitimate business with the Government of Canada, I urge the
Minister of Canadian Heritage not to launch an appeal against
the Federal Court of Canada's earlier decision.
* * *
Mrs. Marlene Cowling (Dauphin-Swan River, Lib.): Mr.
Speaker, I rise today to recognize the accomplishments of two
outstanding young people from rural Manitoba, Donald Green
and Leah Beddome. Donald and Leah were among the 16
national winners of the Farm Credit Corporation's 4-H
scholarship awards program. I am proud to note that Leah is
from Rapid City in my riding of Dauphin-Swan River.
This is the first year of the program which has been
established to assist rural youth and future Canadian farmers.
The winners were selected based on essays submitted on one of
three agricultural topics. For their efforts Leah and Donald each
receive a $1,000 scholarship to pursue post-secondary
education.
Leah and Donald are to be commended for their interest in and
commitment to agriculture and rural Canada. I ask all members
of the House to join with me in saluting the achievements of
these young leaders of tomorrow.
* * *
Mr. John Finlay (Oxford, Lib.): Mr. Speaker, I want to
congratulate a resident of Oxford who was honoured with a
distinguished award yesterday. My friend, Dr. Rusty McDonald,
was inducted into the Canadian Agricultural Hall of Fame for
his pioneering work and many years of service in the artificial
insemination industry.
Dr. McDonald spearheaded developments in Oxford with the
Oxford Holstein breeders AI unit and as general manager of the
Western Ontario Breeders Inc. from which he retired in 1988.
Rusty graduated from the University of Guelph and received
the Alumnus of Honour Award from that institution in 1979.
Since his retirement Dr. McDonald has been executive director
of the Canadian Association of Animal Breeders.
His nomination to the Canadian Agricultural Hall of Fame is
in recognition of his leadership role in the development of
research and policies which have guided the artificial
insemination industry.
On behalf of all hon. members I congratulate Dr. McDonald.
* * *
Ms. Susan Whelan (Essex-Windsor, Lib.): Mr. Speaker, it
was 50 years ago that Canadian soldiers of the second world war
fought to liberate Belgium and bring peace to Europe.
Between October 1 and November 8, 1944, 6,367 Canadians
were killed or wounded in the Battle of the Scheldt. From
October 24 to November 7 of this year 60 Canadian veterans
returned to Belgium and the Netherlands to attend
commemorative services as part of the Canada Remembers
Program. Over 38 events were held including a ceremony at
Bergen-Op-Zoom, a parade at the Hickman Bridge and a church
service in Knokke.
One overwhelming theme which rang through at each town
and cemetery was the enormous admiration and respect the
people of Belgium and the Netherlands have for our Canadian
veterans.
1994 also commemorates the 80th anniversary of the
beginning of World War I. Remembrance services were held at
Vimy and Beaumont-Hamel to honour those who served in the
first world war.
7724
I ask all members to join with me and the Secretary of State
for Veterans in remembering all Canadians who fought on behalf
of our country. We ask you to salute the veterans who
participated in the commemorative services for the Battle of the
Scheldt.
* * *
(1405)
[Translation]
Mr. Jean-Paul Marchand (Québec-Est, BQ): Mr. Speaker,
social housing in this country is at risk. Tenants in social
housing are faced with unprecedented threats from the federal
government. In Canada, 1,200,000 households urgently need
accommodation. However, the Liberal government has made
cuts in social housing, leaving the neediest and tenants in
sub-standard housing to fend for themselves. This government
is spreading confusion and despair.
The Liberal government's failure to act and its withdrawal
from social housing, as well as the planned 20 per cent increase
in rental fees, will have serious consequences for low-income
families. This Liberal government is even worse than the
previous government. It is oblivious to poverty.
* * *
[
English]
Mr. John Duncan (North Island-Powell River, Ref.): Mr.
Speaker, on Thursday of last week Bosanquet township workers
were ditching Outer Drive which is their road boundary with
Camp Ipperwash, owned by the Department of National
Defence. This work was being done to remove illegal access, to
prevent suspicious activities at Camp Ipperwash and to remove
access for public safety because of possible unexploded
ordinances on site.
Shots were fired close to the workers who removed
themselves from the area. The OPP and RCMP have no
jurisdiction within the camp. The township wants the Minister
of National Defence to give this problem his highest priority.
Two or three days of military presence will allow both parties to
dig up illegal access roads while still maintaining the four legal
access points.
Will the minister please give this issue his attention while it is
a simple issue and before it escalates?
* * *
Mr. John Richardson (Perth-Wellington-Waterloo,
Lib.): Mr. Speaker, recently I held my third town hall meeting in
my riding. One of the concerns that was discussed at each
meeting was the introduction of BST, bovine somatotropin.
I wonder if all members of the House are aware of what BST is
and the effect it has on dairy cows. BST is a hormone that is
injected into cows at regular intervals to increase their milk
production. Normal dairy cows remain in full production for
seven to nine years. However, BST injected cows have to be
taken out of production after only two years. In addition, these
animals are covered with red sores and in the end there is
nothing left but skin and bones.
I share the concerns of dairy farmers in my riding who oppose
artificial stimulation of cows and the resulting emaciation of
these animals that is caused by the repeated injection of BST.
I call on all members of this House to encourage discussion on
this issue. Milk is a natural, pure food and I believe that this
image should be maintained in Canada.
* * *
Mr. Gar Knutson (Elgin-Norfolk, Lib.): Mr. Speaker,
traditionally nations have defined security by the size of their
armies. However, the Liberal red book states: ``A Liberal
government will adopt a broader definition of national and
international security, encompassing such goals as sustainable
development, global economic prosperity, capable defence and
the eradication of poverty and social inequality''.
What this resolution is truly about is the need for Canada to
look at the evolution of its security needs. Less and less we see
the armed forces as a military combatant. More and more the
armed forces must be viewed as a useful resource in times of
public emergency, disaster and participation in international
peacekeeping efforts.
The United Nations Security Council has stated that while the
instability of the cold war is over, the non-military sources of
instability, economic, social and humanitarian have become
greater threats to peace and security.
Our armed forces have shown themselves adept at flexibility
in the past. I encourage the minister of defence and this House to
reflect on the need to evolve the Canadian forces further.
* * *
Hon. Roger Simmons (Burin-St. George's, Lib.): Mr.
Speaker, Canada and France have just successfully concluded a
new fisheries agreement which, as it turns out, is a good deal for
Canada, for Newfoundland, particularly for the Burin Peninsula,
and for the town of Grand Bank especially. It gives south coast
Newfoundland fishermen secure access for at least 10 years to
lucrative scallops in French waters and it provides a stable
7725
management regime to prevent the kind of overfishing by the
French that we saw in the late 1980s.
It secures more than 100 jobs in the town of Grand Bank alone
at a very difficult time, given the disastrous unemployment rate
and the loss of the Hibernia work recently. It is not the answer to
every woe, but it does put an end to a long festering conflict
between the two countries and does mark the beginning of an era
of co-operation between France and Canada on fisheries as well
as on aquaculture, tourism, environmental protection and
transportation.
I congratulate my friends, the secretary of state for fisheries
and the minister of fisheries on bringing this about.
* * *
(1410)
[Translation]
Mr. Bernard St-Laurent (Manicouagan, BQ): Mr. Speaker,
it is becoming more and more obvious that Team Canada's trade
mission in Asia is a vast propaganda effort. The people of
Quebec and Canada are led to believe that this mission has
generated billions of dollars in contracts for Canada and Quebec
businesses.
But the reality is altogether different. Many of these contracts
were signed ages ago and Team Canada's mission has nothing to
do with securing them. One example of this is the agreement in
principle between Bombardier and Power Corporation signed
last April.
But there is worse. Several pseudo-contracts rest on nothing
but agreements in principle and letters of intent. There are
actually three times fewer firm contracts than the government
claims, with its far-fetched figures.
As Confucius would say: ``A rolling bicycle gathers no
moss''.
* * *
[
English]
Mr. Jim Hart (Okanagan-Similkameen-Merritt, Ref.):
Mr. Speaker, I bring to the attention of the House a very serious
situation. For the past two weeks the Penticton Indian band has
blocked access to the Apex mountain ski resort in my riding.
This is just the latest in a series of roadblocks by the band since
1990. Each time it happens a major source of winter
employment is further crippled by the flames of conflict that are
fanned on both sides.
We need a lasting solution to the underlying historic problems
in this situation if we are to prevent a conflict such as we
witnessed at Oka. For two weeks I have repeatedly tried to
contact the minister of Indian affairs to discuss with him the
concerns of my constituents, both native and non-native. To
date he has not seen fit to respond, while with each passing day
the crisis edges toward irreconcilable conflict. I challenge the
minister to be a help rather than a hindrance in this situation. His
inaction will only make a resolution more difficult.
I call upon him to help bring the parties together and to be part
of the solution rather than a part of the problem.
* * *
Mr. Len Taylor (The Battlefords-Meadow Lake, NDP):
Mr. Speaker, I rise today to pay tribute to aboriginal veterans.
On Friday, November 11, at eleven o'clock in the morning, I
attended a Remembrance Day ceremony hosted by the
Poundmaker Cree First Nation in honour of all aboriginal
veterans. It unveiled a a special memorial cairn and laid wreaths
following a Remembrance Day service.
I congratulate the people of Poundmaker for taking this
initiative. At the same time I take this opportunity to remind the
people of Canada of the great contribution aboriginal people
made to Canada's armed forces and their participation in World
War I, World War II and the Korean conflict.
I also remind the federal government that aboriginal veterans
have grievances that have not yet been acknowledged by the
Department of Veterans Affairs.
I hope that before next Remembrance Day these grievances
are properly and adequately addressed.
* * *
Mrs. Anna Terrana (Vancouver East, Lib.): Mr. Speaker,
the federal government entered into an administrative
agreement on pulp and paper with the province of British
Columbia.
Through this agreement, co-signed by the B.C. minister of
environment, lands and parks, the federal regulations under the
Fisheries Act and the Canadian Environmental Protection Act
will be administered in harmony with British Columbia's laws
on liquid effluents from pulp and paper mills. It is an important
example of this government's commitment to harmonizing its
efforts with all provinces and territories to improve Canada's
environment.
This is a win, win, win arrangement. Taxpayers win by having
a more streamlined government. Management and pulp and
paper workers win by having streamlined reporting and other
procedures. The environment wins by having policies and
procedures that are strong and consistent.
7726
This agreement also meets an important objective of the
Canada-British Columbia action plan on improving the
efficiency of the federation.
* * *
[
Translation]
Mr. Nick Discepola (Vaudreuil, Lib.): Mr. Speaker, more
than two thirds of the population of Quebec live along the St.
Lawrence River and, for this reason alone, more should be
known about this river. That is why we have undertaken in the
St. Lawrence Action Plan, Vision 2000, to develop information
tools on the St. Lawrence River intended for the general public.
(1415)
I am pleased to announce that three new pages of the St.
Lawrence environmental atlas have been published, describing
the river's shores, environment and inhabitants in an easy to
understand presentation.
These atlas pages deal particularly with the St. Lawrence at
the heart of the inhabited area (population and shore
occupation), its many and varied habitats (saline and freshwater
ecosystems) as well as the shapes and dynamics of the St.
Lawrence shores from soft embankments to scarped shorelines.
These pages were presented at the 29th congress of the science
teachers' association of Quebec, held from October 13 to 15 in
Montreal.
_____________________________________________
7726
ORAL QUESTION PERIOD
[
Translation]
Hon. Lucien Bouchard (Leader of the Opposition, BQ):
Mr. Speaker, last week, the Minister of Intergovernmental
Affairs received a proposal from the new government of Quebec
that improved last July's agreement in principle for maintaining
the military college in Saint-Jean.
The minister rejected Quebec's offer of a major financial
contribution out of hand, on the pretext that it was provincial
interference in federal jurisdiction. The cat is finally out of the
bag, since according to the minister, the purpose, as Ottawa now
admits, is to demilitarize the college in Saint-Jean.
How can the minister have the nerve to claim that the Quebec
government is responsible for closing the military college in
Saint-Jean when it was his government, in its first budget,
which decided to close it?
Hon. Marcel Massé (President of the Queen's Privy
Council for Canada, Minister of Intergovernmental Affairs
and Minister responsible for Public Service Renewal, Lib.):
Mr. Speaker, to answer the Leader of the Opposition in the same
terms, how can he have the nerve to ask us who is closing the
college, when we have had an agreement since mid-July
ensuring the survival of the college in Saint-Jean, but which the
Government of Quebec does not want to implement? The
Government of Quebec refuses to implement an agreement
signed by the former government and it is the Government of
Quebec which must bear the blame for closing it if it is closed.
Hon. Lucien Bouchard (Leader of the Opposition, BQ):
Mr. Speaker, let us return to the facts. The college in Saint-Jean
is a military college; the government decided to close the
military college and make it into a shell of a college, a sort of
language school.
In light of the rejection of Quebec's proposal, I ask the
minister if we are to understand that the decision to close the
military college in Saint-Jean is not budgetary, as claimed, but
rather political; is it not based on the desire to exclude Quebec
and its institutions from the training of French speaking officers
in the Canadian Forces?
Hon. Marcel Massé (President of the Queen's Privy
Council for Canada, Minister of Intergovernmental Affairs
and Minister responsible for Public Service Renewal, Lib.):
Mr. Speaker, what the Leader of the Opposition is insinuating is
entirely incorrect. Under the agreement signed on July 19, there
would still be 100 officer cadets in Saint-Jean, as well as a
language course. Yes, military training has been concentrated in
Kingston because as the army downsizes, we no longer need
three military colleges; one is enough.
The reason the Quebec government wants to keep military
courses in Saint-Jean, as Louise Beaudoin indicated, is that it
wants to prepare to have its own army for when Quebec is
independent.
Hon. Lucien Bouchard (Leader of the Opposition, BQ):
Mr. Speaker, this does not show much consideration for all the
generations of French-speaking officers who were brilliantly
trained in Saint-Jean, had a great military career and are now
being told that officers can no longer be trained in Quebec
because it is a separatist province.
I ask the minister if, in his letter of November 9 to his Quebec
counterpart, he suggested that only the military college in
Kingston is able to promote ``the values appropriate to the
Canadian Armed Forces''. How, except for the fact that it is in
Quebec, is the military college in Saint-Jean unable to meet the
requirements of the Canadian forces?
Hon. Marcel Massé (President of the Queen's Privy
Council for Canada, Minister of Intergovernmental Affairs
and Minister responsible for Public Service Renewal, Lib.):
Mr. Speaker, the college in Saint-Jean has had a great and
illustrious career. Even though more than 75 per cent of French
speaking officers in the armed forces were trained outside
Saint-Jean,
7727
there is no doubt that the college in Saint-Jean played an
extremely useful role in training French speaking officers.
But it so happens that the size of the armed forces is being
reduced considerably. We only need to educate about 200 cadets
a year and we will educate them and give them just as good an
education as they would get in Saint-Jean in the military college
in Kingston, where Canadian forces personnel will be brought
together to be educated.
(1420)
We no longer need three colleges; we need only one and that is
just what we will do in Kingston.
Mr. Michel Gauthier (Roberval, BQ): Mr. Speaker, in a
last-ditch effort to save the college in Saint-Jean, the Quebec
government offered $8 million a year, enough for this institution
to run properly, while meeting the federal government's
cost-cutting targets. The Minister of Intergovernmental Affairs
rejected this offer from Quebec out of hand.
Can the minister of Canadian intergovernmental affairs tell us
if the federal government seriously analyzed the budgetary
impact of the Quebec government's offer to spend $8 million a
year to run the college in Saint-Jean before it hurriedly rejected
it?
Hon. Marcel Massé (President of the Queen's Privy
Council for Canada, Minister of Intergovernmental Affairs
and Minister responsible for Public Service Renewal, Lib.):
Mr. Speaker, the future of the college in Saint-Jean has been
studied for months, at least since last year's budget. The former
government of Quebec and the federal government arrived at a
solution that would allow the college in Saint-Jean to remain
open with a military presence. That is the agreement that we
came to and that we want to maintain.
It is no longer possible to use the college in Saint-Jean for
military training, simply because there are not enough military
students in Canada. The college in Kingston will provide a
bilingual education to all military students in Canada. We only
need one college and the officers to be trained in Kingston will
undoubtedly receive an education as good as that previously
provided at the college in Saint-Jean.
Mr. Michel Gauthier (Roberval, BQ): Mr. Speaker, by
referring to last year's studies, the Minister of
Intergovernmental Affairs just confirmed that the government
did not even bother to review the budgetary impact of the
Quebec government's proposal, and that is serious.
How can this minister state that Quebec's proposal does not
take into account the federal government's budget requirements,
when transferring military training from Saint-Jean to Kingston
involves major additional expenditures for building facilities
that already exist at the college in Saint-Jean?
Hon. Marcel Massé (President of the Queen's Privy
Council for Canada, Minister of Intergovernmental Affairs
and Minister responsible for Public Service Renewal, Lib.):
Mr. Speaker, the Government of Canada estimates that it will
save about $23 million a year-and not $8 million-by closing
the military college in Saint-Jean and that transferring the
Saint-Jean students represents only a fraction of the money we
will save in the long run.
There is no doubt that, as far as the Canadian Forces and
Canadian military training are concerned, concentrating our
military training in Kingston is a better solution. We also
offered Quebec $25 million over five years so that the college in
Saint-Jean could remain open. That is the acceptable solution,
one that will allow the college in Saint-Jean to remain open, and
that we want the Quebec government to honour because it signed
an agreement to that effect.
* * *
[
English]
Mr. Art Hanger (Calgary Northeast, Ref.): Mr. Speaker, the
immigration minister released confidential names and
testimony to his embattled appointee to the IRB, Michael
Schelew. These were names of people who had accused Schelew
of intimidation and wrongdoing but gave testimony under the
promise of confidentiality.
My office consulted with the privacy commission and was
told that the minister's actions are grounds for a complaint
under the Privacy Act. The minister released to someone
accused of intimidation the names of his accusers before any
discovery was made.
How can the minister of immigration possibly justify this
gross contravention of the Privacy Act?
Hon. Sergio Marchi (Minister of Citizenship and
Immigration, Lib.): Mr. Speaker, throughout the process I took
great care in terms of not releasing or disclosing those names.
Once the chair made her report available to me, my counsel
wrote a letter to the deputy chair asking for his response to that
report and the appropriateness of the recommendation.
It was then on the advice of the justice department that those
names be disclosed to the deputy chair's counsel so that
individual may respond in kind.
(1425)
At the same time the IRB was advised of that and
subsequently advised those individuals. It was on the advice of
the justice department. The justice lawyer communicated those
names to the counsel for the deputy chair. Our officials have also
been in touch with the same privacy commissioner.
7728
Mr. Art Hanger (Calgary Northeast, Ref.): Mr. Speaker, I
find it remarkable that an investigation could go on in this
fashion and yet there be influence against a witness who may
pose as a potential witness in a future investigation or a court
hearing.
This weekend Schelew called two of the people and actually
went to the home of another person who had filed complaints
against them, like an accused calling on the victims for a little
chat before a trial.
The minister has repeatedly said that the IRB is at arm's
length and that he does not have any influence over it. Will the
minister admit that he has exercised influence by improperly
releasing confidential information in an attempt to bolster the
defence of appointee Michael Schelew?
Hon. Sergio Marchi (Minister of Citizenship and
Immigration, Lib.): Mr. Speaker, I reject that completely out of
hand. I repeat for the hon. member that the names were disclosed
to the counsel of Mr. Schelew on the advice of the justice
department in response to my request for the deputy chair to
respond to the report of the chair and the appropriateness of the
recommendation and that the IRB members in question were
advised immediately by the IRB.
Second, with respect to the report made by the chair to me, I
take that report as well as the response by the deputy chair very
seriously. I also say to the member that it is very extensive,
particularly the report. My office received the response late
Thursday. I had a chance to look at it for the very first time only
on late Friday evening. We are taking the matter very seriously
and I would suspect that the member would not want me to
speculate until a decision has been rendered which will be done
in the right way.
Mr. Art Hanger (Calgary Northeast, Ref.): Mr. Speaker,
this minister clearly thinks he is above the law. The minister has
not violated-
Some hon. members: Oh, oh.
The Speaker: I would ask the hon. member to put his
question, please.
Mr. Hanger: Mr. Speaker, the minister has not only violated
the Privacy Act but also basic justice. We are talking about an
investigation here and witnesses.
As a former police officer if I were to release information to
an accused in a crime of those people who were accusing me or
an individual before any charges were laid that would cost me
my job and probably there would be criminal charges against
me.
Recently in Ontario two ministers-
The Speaker: I would ask the hon. member to put his question
now, please.
Mr. Hanger: Mr. Speaker, will this minister admit that he has
made a gross and inexcusable violation similar to those
ministers in Ontario who had to resign and consider doing the
same?
Hon. Sergio Marchi (Minister of Citizenship and
Immigration, Lib.): Mr. Speaker, I ask the member to put the
entire situation in proper context.
I first received five names from a media outlet. Upon
receiving those names I wrote the chair of the board to have her
look into the allegations made by these five individuals. In my
letter to her I explicitly left out the names. I phoned her and
verbalized the names. She did the same in her report.
Subsequent to that I asked through my counsel at justice that
the deputy chair be seized with the chair's report and respond to
the appropriateness of the recommendation. Following that the
counsel to the deputy chair asked the counsel at the Department
of Justice for the names in order that that individual may defend
himself.
(1430 )
Only after advice from the Department of Justice was the
advice that we had to give those names to the lawyer of the
deputy chair. Nothing has been compromised. No one is above
the law. This minister and this government have followed the
process flawlessly.
* * *
[
Translation]
Mr. Stéphane Bergeron (Verchères, BQ): Mr. Speaker, my
question is for the Minister of Foreign Affairs.
Team Canada's trip to China gradually became a political
show where investments totalling billions of dollars are
announced when, in fact, these figures are arrived at by adding
contracts signed a long time ago with mere letters of intent
regarding eventual contracts, as in the case of the CANDU
reactors. In fact, the communique released in Beijing by the
Canadian government states that the federal government is not
responsible for the accuracy of information relating to
investments or to the value of contracts.
Will the Minister of Foreign Affairs admit that the Team
Canada mission is essentially a political show, since most of the
contracts announced are either only letters of intent or were
known long before that trip, and that the government itself
refuses to endorse the figures released?
Hon. André Ouellet (Minister of Foreign Affairs, Lib.):
Mr. Speaker, our political opponents are obviously very bitter
following the extraordinary success of the mission led by the
Prime Minister.
Some hon. members: Hear, hear.
7729
Mr. Ouellet: I am aware of the bitter reaction of minister
Landry and I am disappointed to see the opposition member
adopt the same attitude. The fact is that Team Canada, which is
led by the Prime Minister and includes nine premiers as well as
some 300 business people, made an extremely successful trip to
China which is unprecedented. Chancellor Kohl made a visit
which resulted in contracts totalling some four billion dollars
for Germany; a trip by the US trade representative, Mr. Brown,
resulted in business deals of some $5.2 billion. Yet, the total
figure for these two missions is not even as high as the amount of
the contracts obtained by the group led by the Canadian Prime
Minister.
In other words, this is an extremely successful trip and,
instead of minimizing its results, our opponents should be
pleased because this will mean jobs for Canada and particularly
for several Quebec ridings.
Mr. Stéphane Bergeron (Verchères, BQ): Mr. Speaker, if the
minister stands by what he just said, how can he explain the fact
that the $800-million contract for Dominion Bridge, which was
hailed as one of the major achievements of that mission, was not
signed during Team Canada's trip to China but last June?
Hon. André Ouellet (Minister of Foreign Affairs, Lib.):
Mr. Speaker, the chairman of that company thanked the Prime
Minister for putting the final touch to a contract which was
taking time to finalize.
Our friends in opposition should realize that, ultimately,
several contracts being negotiated can only be finalized and
approved through a final political decision. Meetings between
high-level political representatives help finalize contracts for
which negotiations often drag on for too long.
I can assure the hon. member that, with this visit, the Prime
Minister was able to help many Canadian businesspeople,
including some from Quebec who had the courtesy of joining
Team Canada to China. This initiative helped finalize and sign
contracts which will translate into thousands of Canadian jobs in
the months to come.
* * *
(1435)
[English]
Mr. Philip Mayfield (Cariboo-Chilcotin, Ref.): Mr.
Speaker, my question is for the Minister of Citizenship and
Immigration.
The minister has shown a fondness in the past for stating with
much bravado that he is in charge. He is fond of telling us that
the buck stops with him.
Now we learn that his office has broken the confidence of
members of the Immigration and Refugee board and filed
complaints against suspended deputy chief Michael Schelew by
releasing their names to Mr. Schelew. This is a clear violation of
section 29(a) of the Privacy Act which states that confidential
information may not be released for any purpose other than that
for which it was collected.
The fact remains that provisions of the Privacy Act were
broken. Did the justice department advise the minister to break
this act? If not, will the minister tell the House specifically what
the advice was that he was given by the justice department?
Hon. Sergio Marchi (Minister of Citizenship and
Immigration, Lib.): Mr. Speaker, I responded to his colleague
in the first round of questioning.
I repeat once again that there was caution throughout the
process of not releasing or disclosing any such names to the
point where I chose not to write those names to the chair in
asking quite appropriately for her to review the allegations that
were made by these individuals. When she wrote me the letter
attaching the report, she made reference to the fact that if those
names were to be disclosed to me that I would make those names
available.
When the deputy chair was asked to respond to the report and
the appropriateness of the recommendation, it was at that point
that advice came from the Department of Justice that in
preparation for that response the names had to be given to the
counsel to the deputy chair so that he could fairly and
appropriately respond. At the very same time when that advice
came in and was followed those members of the IRB were
advised that this action was to take place.
The government has followed the process flawlessly. There
has been no attempt to hide or hijack anything. In fact it is clear
that the minister in asking the chair to look into it does not want
anything hidden.
We followed the process appropriately. We will be rendering a
decision based on the recommendation of the chair very soon. To
speculate needlessly on other elements would not help the
judicial process that we are following.
Mr. Philip Mayfield (Cariboo-Chilcotin, Ref.): Mr.
Speaker, my supplemental is also for the Minister of Citizenship
and Immigration.
When the Al Mashat affair took place three years ago, it was
clearly stated by the current Minister of Human Resources
Development in the House on June 12, 1991 that a government
minister is required to protect the anonymity of individuals and
to decline to publicly identify them.
What is offensive is that members of the IRB have been
brought to light in a way that they should not have been. The
Minister of Citizenship and Immigration has not only broken
section 29(a)-
7730
The Speaker: My colleagues, I would ask if you both could
make the questions and answers a little shorter. I ask the hon.
member to please put his question forthwith.
Mr. Mayfield: Mr. Speaker, will the minister now concede
that he is responsible for this gross injustice and for further
compromising the integrity of his department? Will he take
charge to remedy the serious damage that he has caused within
his department?
Hon. Sergio Marchi (Minister of Citizenship and
Immigration, Lib.): Mr. Speaker, I repeat once again that no
one is undermining any process. In fact I was given the names by
a media outlet. I have not made any names public. It was on the
advice of the Department of Justice counsel that for the deputy
chair to appropriately and fairly respond to those allegations
contained in the report that his counsel disclose the names of
those individuals who made those allegations.
Therefore it was the counsel in the Department of Justice in
connection with the counsel to the deputy chair that those names
were disclosed. The process has been followed.
* * *
(1440)
[Translation]
Mr. Bernard Deshaies (Abitibi, BQ): Mr. Speaker, my
question is directed to the Minister of Foreign Affairs.
During his trip to China, the Prime Minister avoided any
public reference to the question of human rights violations in
that country. He said he raised the matter privately. However,
the Chinese Prime Minister said that the Prime Minister of
Canada made no reference to human rights.
How does the Minister of Foreign Affairs account for this
obvious contradiction between what was said by the Prime
Minister of Canada and by his Chinese counterpart?
Hon. André Ouellet (Minister of Foreign Affairs, Lib.):
Mr. Speaker, I think that everyone who attended these
discussions in China can testify that the Prime Minister raised
the matter with his counterpart. He took a very practical
approach, considering the situation in that country.
We were very pleased that the Chinese authorities accepted a
number of suggestions by the Prime Minister of Canada for
exchanges of judges, lawyers and judicial representatives, to
give the Chinese authorities a chance to become better
acquainted with the Canadian system, use it as an example and,
in the process, advance the cause of human rights in their
country, over time.
Mr. Bernard Deshaies (Abitibi, BQ): Mr. Speaker, would
the Minister of Foreign Affairs agree that this excuse of
allegedly raising the matter of human rights in private will cause
Canada to lose all international credibility in this respect?
Hon. André Ouellet (Minister of Foreign Affairs, Lib.):
Mr. Speaker, on the contrary, I think that the way Canada
approached the matter could well be used as an example by a
number of other countries who have to deal with China,
especially since the results are very encouraging. In this respect,
I believe the dialogue that was engaged is a respectful dialogue,
but it is nevertheless a dialogue that may lead to some major
results.
* * *
[
English]
Mr. Ken Epp (Elk Island, Ref.): Mr. Speaker, my question is
for the Prime Minister.
Considering the problems the Minister of Canadian Heritage
has had recently and considering these new problems of the
Minister of Citizenship and Immigration, it would appear the
Prime Minister needs to assure Canadians that these serious
allegations against his ministers are unfounded. The Prime
Minister or the ministers saying that they did nothing wrong is
not reassuring.
Will the Prime Minister launch a public inquiry to investigate
what appears to be a breach of the insider information section of
the conflict of interest code by the Minister of Citizenship and
Immigration?
Hon. Herb Gray (Leader of the Government in the House
of Commons and Solicitor General of Canada, Lib.): Mr.
Speaker, the Minister of Citizenship and Immigration has given
a full and complete answer. It is very clear the hon. member has
forgotten one of the basic principles of Canadian and British
justice, that someone who has been accused has a right to know
his accusers and what they say in order to make an answer to
those charges.
Mr. Ken Epp (Elk Island, Ref.): Mr. Speaker, it appears this
minister has contravened the Privacy Act and he has also
contravened the conflict of interest code. He claims now that he
was advised to break the law by the justice department. We need
some clarification. Canadians need clarification.
Will the Prime Minister direct both the privacy commissioner
and the ethics counsellor to conduct independent, full
investigations into the action of this minister and make those
findings public immediately?
Hon. Herb Gray (Leader of the Government in the House
of Commons and Solicitor General of Canada, Lib.): Mr.
Speaker, with all due respect to the hon. member there is nothing
in the allegations or in his question that justifies the course of
7731
action he mentions. The Minister of Citizenship and
Immigration has given a complete explanation for his actions
and they show there has been no illegality, contrary to the
insinuation of the hon. member.
* * *
[
Translation]
Mr. Michel Guimond
(Beauport-Montmorency-Orléans, BQ): Mr. Speaker, for
several months now, the MIL Davie shipyard in Lauzon has been
waiting for the federal government to make a decision on
building a new ferry to serve the Magdalen Islands.
(1445)
While more and more workers are being laid off, MIL Davie is
waiting to be awarded this vital contract so it can ensure its
short-term survival and undertake its conversion program.
My question is for the Minister of Industry, who is
responsible for this matter. Does the minister confirm that his
government is about to buy a used ferry rather than have a new
one built in Lauzon, thus making it impossible for the MIL
Davie shipyard to restructure and ensure its survival?
[English]
Hon. John Manley (Minister of Industry, Lib.): Mr.
Speaker, the assumption that the only basis of MIL Davie's
survival would be the acquisition of a ferry is a rather poorly
founded assumption.
If the member were to review the proposed business plan,
which I must say has yet to be approved by the principal
shareholder of MIL Davie, the Government of Quebec, that
business plan has yet to be approved. Furthermore, the business
plan is based on many more components than the acquisition of a
single vessel.
[Translation]
Mr. Michel Guimond
(Beauport-Montmorency-Orléans, BQ): Mr. Speaker, does
the government realize that by buying a used ferry, it will
deliberately bring about the final closing of MIL Davie, thus
eliminating a competitor of Saint John Shipbuilding in New
Brunswick, the home province of the Minister of Transport?
[English]
Hon. John Manley (Minister of Industry, Lib.): Mr.
Speaker, I am reminded again that sound and fury often signify
nothing. I think that is within the rules.
Some hon. members: Oh, oh.
The Speaker: It reminds me of the Wallendas sometimes.
Mr. Manley: Mr. Speaker, the Minister of Transport has
stated repeatedly in the House that no decision has been taken on
any possible replacement for the Lucy Maud Montgomery. A
number of alternatives are being considered. Taken into account
in making that decision will be the needs and the interests of the
residents of Îles-de-la-Madeleine who, after all, are ultimately
the ones who will be using the service.
With respect to MIL Davie, of course we are very concerned
with the future of that shipyard as should be the shareholder, the
Government of Quebec.
* * *
Mrs. Sue Barnes (London West, Lib.): Mr. Speaker, my
question is for the Minister of Justice.
The Department of Justice released a discussion paper on the
weekend raising the possibility that cultural defences might be
permitted to criminal charges. Will the minister clarify just what
this might mean if introduced?
Hon. Allan Rock (Minister of Justice and Attorney
General of Canada, Lib.): Mr. Speaker, may I begin by
emphasizing what this discussion paper was about. We are
engaged in a process for the first time in 100 years of reviewing
the general part of the Criminal Code to determine whether it
should be changed or modernized. In the course of that, this
discussion paper raises questions, not public policy but just
questions, that are worthy of examination. It does not reflect
government policy.
I had hoped that the paper would be drafted to reflect my own
perspective. My own personal view is that I am very much
opposed to any general defence based on culture. However, it is
important, if we are going to have a discussion, that we at least
identify a list of questions that have been raised by law reform
commissions and by legal journals in the past.
I am especially troubled at the suggestion on the weekend that
just raising these questions might create the spectre of
justification for female genital mutilation. We have been at
pains over the past six months to emphasize that this practice is
criminal, will be investigated and will be prosecuted to the full
extent of the law where it is detected.
I hope what we have launched on the weekend is an open
discussion about fundamental principles of criminal justice. In
closing, I say that every reform we have put forward in the
House to the criminal law has been to make people more
accountable not less accountable.
Mr. Paul E. Forseth (New Westminster-Burnaby, Ref.):
Mr. Speaker, over the weekend the Minister of Justice released a
discussion paper that outlined possible amendments to the
Criminal Code, one being a defence based on cultural or
7732
religious practices. It would mean that if it was the practice of a
religious group to use prohibited drugs, weapons or ritual abuse
it could be exempted from the Criminal Code. The minister is
definitely flirting with these ideas, or else they would not be
contained in his paper.
(1450)
Is the minister prepared to implement such amendments to the
Criminal Code that possibly could put Canadians at risk and
bring to even further disrepute the criminal justice system?
Hon. Allan Rock (Minister of Justice and Attorney
General of Canada, Lib.): Mr. Speaker, as I mentioned in
response to the question from my colleague, this discussion
paper does not reflect government policy. It is intended only to
stimulate a consultation about the fundamental principles of the
criminal law.
We hope through this process of reform to put in place a
general part of the code that will last another 100 years.
However we cannot do that without examining the issues that
arise. We have listed this among others. However I want to
assure the hon. member that I oppose a general defence based on
culture and I will never introduce it so long as I am minister.
Mr. Paul E. Forseth (New Westminster-Burnaby, Ref.):
Mr. Speaker, the minister is consulting and delaying. He
obviously does not know what to do.
His trial balloon on criminal intoxication would mean that
intoxication could be used as a defence because there would be a
separate punishment for voluntary intoxication, with
consequences of half or less the maximum of the main offence;
in other words a drunkenness discount.
Is the minister suggesting that even for something as serious
as murder, if someone is intoxicated they could receive only half
or less of the regular sentence? Or, will he toughen the Criminal
Code rather than opening more escape hatches?
Hon. Allan Rock (Minister of Justice and Attorney
General of Canada, Lib.): Mr. Speaker, I know of the hon.
member's interest in this subject. We have discussed it. He is as
concerned as I am that there be accountability in the criminal
law.
I assure the hon. member that the options we are looking at are
intended to achieve just that. I am concerned about the way the
recent decisions will be interpreted and applied.
When I spoke on Saturday to the criminal lawyers I
emphasized that a discount for drunkenness is not acceptable as
a matter of principle. We have to find a way to change the law
that is constitutional and that gets the job done. That is what we
are doing through this discussion process.
[Translation]
Mr. Antoine Dubé (Lévis, BQ): Mr. Speaker, my question is
for the Minister of Human Resources Development. Among the
series of cuts planned as part of the social programs reform,
Ottawa wants to discontinue transfers to the provinces for
post-secondary education. The rector of McGill recently
announced that, as a result of this reform, the university's
tuition fees would climb to $8,000 a year.
Does the minister agree that his proposal, which will increase
student debt substantially, is unacceptable, and will he agree, in
the interests of common sense, to go back to the drawing board?
[English]
Hon. Lloyd Axworthy (Minister of Human Resources
Development and Minister of Western Economic
Diversification, Lib.): Mr. Speaker, if I may be allowed to
make two corrections to the hon. member's assertions to begin
with.
First, the green paper is only a series of options for
discussion. There is no government policy at this point in time.
Second, the assertion that the government is withdrawing
funding from higher education is totally false. At the present
time the federal government provides over 50 per cent of the
funding of higher education. We intend to maintain our
commitment. What we have pointed out is that the provinces
will receive the same amount, $6.2 billion, except more will
come from tax revenues.
If you can get the provinces to start living up to their
responsibilities to ensure that the transfer of money totally goes
to higher education, then there would be no problem with
tuitions or funding.
In fact what we are proposing is to find ways of adding more
money, upward of $12 billion over the next 10 years, to higher
education. That is the truth. Not a reduction but an addition.
[Translation]
Mr. Antoine Dubé (Lévis, BQ): Mr. Speaker, does the
minister realize that his stubbornness is confirmation that the
Liberals are in the process of denying a university education to
thousands of young people?
[English]
Hon. Lloyd Axworthy (Minister of Human Resources
Development and Minister of Western Economic
Diversification, Lib.): Mr. Speaker, I am just trying to explain
to the hon. member that the proposal in the green paper is
designed to provide substantial new funding for higher
education. In this way we can broaden accessibility for another
quarter of a million people to go to college and university. That
is the fact.
7733
That is the truth, not the silly assertion made by the hon.
member which is simply designed-
(1455)
The Speaker: The hon. member for Beaver River.
* * *
Miss Deborah Grey (Beaver River, Ref.): Mr. Speaker, as
the justice minister knows, names are never to be released until
the deposition and discovery stages of an investigation are
complete.
Does the justice minister not agree that the names of accusers
should never be released until the accused has actually been
charged? This has not occurred in the Schelew case. Why?
Hon. Allan Rock (Minister of Justice and Attorney
General of Canada, Lib.): Mr. Speaker, the Department of
Justice was called on to give legal advice to my colleague, the
Minister of Citizenship and Immigration. I can tell the House
that the advice we gave was entirely in accordance with the law.
Beyond that we are satisfied that the minister acted in
accordance with the advice we gave.
Miss Deborah Grey (Beaver River, Ref.): Mr. Speaker,
intimidation knows no bounds.
I ask the justice minister again, exactly what legal advice did
his department give to the minister of immigration, and why did
they sanction this contravention of section 29 of the Privacy
Act?
Hon. Allan Rock (Minister of Justice and Attorney
General of Canada, Lib.): Mr. Speaker, in the first instance I
am not prepared to accept the premise that there was a violation
of the statute. Second, it is not the practice of the Department of
Justice to disclose publicly the advice that it gives to client
departments.
* * *
Mrs. Rose-Marie Ur (Lambton-Middlesex, Lib.): Mr.
Speaker, my question is for the Minister of Agriculture and
Agri-Food.
Ontario pork producers recently stated they could support a
freer trade policy provided that Washington's countervailing
duty on live Canadian hogs is dropped and a tough and effective
mechanism is put in place to halt incoming U.S. hogs possibly
carrying the pseudorabies virus.
Will the Minister of Agriculture and Agri-Food inform the
House what measures his department is taking to address the
concerns of Ontario pork producers?
Hon. Ralph E. Goodale (Minister of Agriculture and
Agri-Food, Lib.): Mr. Speaker, the hon. member has raised two
issues in her question, one having to do with the U.S.
countervailing duty on live Canadian hogs exported to the
United States, and the other relating to the risk of pseudorabies
in U.S. hogs imported into Canada.
It is important to note that one is a very serious trade issue and
the other is a very serious health of animals issue. Both are
important but they should not be linked together.
On the countervailing duty issue the government has worked
very closely with the Canada Pork Council and Canada Pork
International on a variety of market access and trade issues. We
will continue to do so, especially with respect to our fight
against that U.S. countervailing duty on Canadian live hogs.
The pseudorabies issue, which I emphasize is a separate issue,
is a complex health of animals concern. Evaluation of the
information on the potential consequences of imports from the
United States is what our department is engaged in at the present
time.
We would consider permitting imports only when we can be
totally satisfied that our stringent health and safety standards
will not in any way be compromised.
* * *
[
Translation]
Mrs. Pauline Picard (Drummond, BQ): Mr. Speaker, my
question is for the Minister of Health. The minister has not yet
made her intentions known regarding the Patent Act, following
the statements made by some members of her caucus who want
to change the regulations pertaining to Bill C-91 at the expense
of brand name pharmaceutical companies.
Can the minister tell us whether she is in favour of the existing
legislation remaining unchanged or whether she advocates a
change in regulations along the lines of what her Liberal
colleagues are calling for?
[English]
Hon. John Manley (Minister of Industry, Lib.): Mr.
Speaker, the hon. member will be aware that the legislation
contains a parliamentary review provision which will come into
effect at a stated period of time after the proclamation of the
legislation. Undoubtedly the appropriate parliamentary
committee will wish to review it at that time.
(1500 )
We have also made it clear that in the process of reviewing the
impact of the legislation, as we undertook to do, we are looking
at all aspects of its impact. In the context of international
commitments we will take the action we think is in the best
interest of all Canadians.
7734
Mr. John Williams (St. Albert, Ref.): Mr. Speaker, our
federal debt is $535 billion and growing. Our total debt, federal
and provincial, now exceeds 90 per cent of our gross domestic
product and our foreign debt is 44 per cent of our gross domestic
product. That is worse than any other leading industrialized
country.
Yet we find that the supplementary estimates will show that
we are going to spend $527 million to help other countries
reduce their debts. My question to the Minister of Finance is:
Can he please justify this expenditure to Canadians when he is
telling them they must accept cuts or tax increases because we
are so heavily in debt?
Hon. Paul Martin (Minister of Finance and Minister
responsible for the Federal Office of Regional
Development-Quebec, Lib.): Mr. Speaker, as the hon.
member undoubtedly knows, Canada benefits a great deal in
terms of our own commercial links from the fact that we do
provide aid. At the same time the member undoubtedly knows
that the provision of aid certainly to the poorest countries, the
poorest of the poor, is a matter of international responsibility.
Canada is a member of that club.
* * *
Hon. Audrey McLaughlin (Yukon, NDP): Mr. Speaker, my
question is for the Minister of Indian Affairs and Northern
Development. As the minister will know, there are 21 DEW line
sites that have toxic and non-toxic waste that need to be cleaned
up.
The federal government-I would like to know the minister's
position on this-has said that it will bury the debris, which is in
contravention of the 1984 Inuvialuit land claims agreement and
other land claims agreements with the Inuit. Would the minister
please tell the House what his position is on this and whether he
supports the appeal of this arbitration decision which has
ordered the government to respect these agreements?
Hon. David Collenette (Minister of National Defence and
Minister of Veterans Affairs, Lib.): Mr. Speaker, there are
many troubling aspects about the leaving of armed forces bases
in northern Canada, one of which the hon. member has outlined.
I certainly am troubled by the response that I am getting in
terms of it being cheaper to bury this kind of waste in this one
instance rather than transport it. I have asked my officials to
reconsider the option.
More important, we will be entering into discussions with the
United States, with my American counterpart, about DEW Line
cleanups, the compensation arising from DEW Line cleanup and
any compensation that should be paid. We will keep the House
informed as these negotiations unfold.
* * *
The Speaker: I would like to draw to the attention of hon.
members the presence in the gallery of a parliamentary
delegation from the Republic of Hungary. Isten hozott.
_____________________________________________
7734
ROUTINE PROCEEDINGS
[
English]
Mr. Peter Milliken (Parliamentary Secretary to Leader of
the Government in the House of Commons, Lib.): Mr.
Speaker, pursuant to Standing Order 36(8), I have the honour to
table, in both official languages, the government's response to
27 petitions.
* * *
(1505 )
Mrs. Beryl Gaffney (Nepean, Lib.): Mr. Speaker, I have the
honour to present, in both official languages, the third report of
the Standing Committee on Citizenship and Immigration in
relation to order in council appointments.
* * *
Mr. Paul Szabo (Mississauga South, Lib.): Mr. Speaker, I
rise to present a petition on behalf of a number of residents of the
Toronto and Mississauga area.
The petitioners call on the members of Parliament to request
that Parliament not amend the Canadian Human Rights Act or
the Charter of Rights and Freedoms in any way that would tend
to indicate societal approval of same sex relationships or of
homosexuality, including amending the Canadian Human
Rights Act to include the prohibited grounds of discrimination
the undefined phrase sexual orientation.
Mr. John Duncan (North Island-Powell River, Ref.): Mr.
Speaker, I rise to present a petition signed by 101 individuals,
the majority from my riding of North Island-Powell River,
calling for a public inquiry into the need for staffed light stations
on the west coast.
7735
Safety will be jeopardized by the destaffing of these stations.
Mr. Ted McWhinney (Vancouver Quadra, Lib.): Mr.
Speaker, I have the pleasure of presenting a petition signed by
1,279 Canadians of Greek ancestry who reside in the greater
Vancouver region. They congratulate the Canadian government
for its principled stand under international law of continuing
full respect to the integrity of Greek territorial frontiers,
including Macedonia, as established under the treaties ending
the two Balkan wars and under the World War I peace treaties.
Mr. Ronald J. Duhamel (St. Boniface, Lib.): Mr. Speaker,
the petitioners want to remind parliamentarians that our young
people are our greatest asset and that they face many challenges
such as breakdown of the traditional family, additional violence
in society. They want parliamentarians to ensure that these
young people, young men and women, get the education,
training and jobs they require to integrate fully into society in
order to create a better country.
Ms. Paddy Torsney (Burlington, Lib.): Mr. Speaker, I rise
with several sets of petitions.
The first set has about 50 names petitioning the government to
recognize and address the concerns related to the Young
Offenders Act and amend the Criminal Code of Canada.
Ms. Paddy Torsney (Burlington, Lib.): Mr. Speaker, I have
also a set of petitions relating to the statutory foundation for
witness relocation program. There are about 50 signatures.
Ms. Paddy Torsney (Burlington, Lib.): Mr. Speaker, I also
have the honour to present petitions related to the steel accord.
Whereas the Canadian steel industry directly provides over
35,000 jobs in the production of primary steel and iron, and in
steel pipe and tube, the petition urges the government to support
the efforts of Canada's steel industry and specifically to work
toward a Canada-U.S. sectoral steel accord which would ensure
fair rules and procedure in steel trade. This petition contains
several hundred names.
Ms. Paddy Torsney (Burlington, Lib.): Mr. Speaker, the
remaining petitions relate to killer cards, calling on the
government to ban killer cards and make sure they do not come
into the country any longer.
This petition contains several hundred names.
Mr. Bob Ringma (Nanaimo-Cowichan, Ref.): Mr.
Speaker, pursuant to Standing Order 36, I have three duly
executed and signed petitions representing the views of some of
my constituents that I would like to present to the House.
The first calls on the government to enforce the existing
provisions of the Criminal Code prohibiting assisted suicide. It
also asks that no changes be made to those provisions that would
sanction or allow assisted suicide.
Mr. Bob Ringma (Nanaimo-Cowichan, Ref.): Mr.
Speaker, the second petition calls on the government to maintain
the status quo with regard to same sex relationships.
Mr. Bob Ringma (Nanaimo-Cowichan, Ref.): Mr.
Speaker, the third petition calls on the government to act
immediately to extend protection to the unborn child by
amending the Criminal Code to extend the same protection
enjoyed by born human brings to unborn human beings.
On behalf of these concerned constituents I am pleased to
table these petitions in the House.
Mrs. Beryl Gaffney (Nepean, Lib.): Mr. Speaker, I have a
petition bearing about 30 signatures. These people believe that
crimes committed against society by young offenders are on a
serious rise and young offenders go virtually unpunished due to
protection under the Young Offenders Act.
(1510)
These people believe that we should revise our laws
concerning young offenders by empowering the courts to
prosecute and punish the young law breakers who are terrorizing
our society by releasing their names and lowering the age limit
to allow prosecution to meet the severity of the crime.
* * *
Mr. Peter Milliken (Parliamentary Secretary to Leader of
the Government in the House of Commons, Lib.): Mr.
Speaker, Question No. 57 will be answered today.
[Text]
Question No. 57-Mr. Strahl:
During the last fiscal year, what expenses relating to projects over $1,000
were unaccounted for by the Canadian International Development Agency;
what is the list of projects to which the unaccounted expenses pertained; and
what is the explanation for each unaccounted expense?
Hon. André Ouellet (Minister of Foreign Affairs): No
projects are left unaccounted for by CIDA.
7736
CIDA's country to country projects are all managed within
policies and procedures that ensure CIDA obtains a full
accounting for funds paid to executing agencies during the life
of projects and at the conclusion of projects.
All CIDA's country to country projects are over $1,000 and
disbursements relating to these projects are made according to
the terms and conditions of a contract or contribution agreement
signed between CIDA and an executing agent. The terms and
conditions also define how and when the executing agent will
account for the expenditures pertaining to the project.
Subsequently each invoice, claim or financial report received
is verified against the contract or the contribution to ensure it is
in compliance with the terms and conditions and is then certified
by the manager responsible for the project. In some instances
the agency also hires public accounting firms to carry out audits
of executing agents to ensure that expenditures submitted for
payment are in compliance with the terms and conditions of the
contract or contribution agreement and are properly accounted
for.
[English]
* * *
Mr. Peter Milliken (Parliamentary Secretary to Leader of
the Government in the House of Commons, Lib.): Mr.
Speaker, would you be so kind as to call Starred Question No.
78.
I would ask that the answer to this question be printed in
Hansard as if read due to the length of the answer.
[Text]
*Question No. 78-Mr. Lalonde:
With respect to the new projects announced for the current year under the
strategic initiatives program, (a) which programs have experienced cuts as a
result of the reallocation of funds within the 1994 budget, (b) how much was
cut from each program and (c) what is the breakdown of the cuts by province
and territory?
Hon. Lloyd Axworthy (Minister of Human Resources
Development and Minister of Western Economic
Diversification): (a) the employment and insurance program,
(b) $90 million, and (c) the budget impact by province of this
redirection cannot be provided as the funds were not directly
repatriated from regional allocations.
It is important to note the funds that will be spent in support of
these strategic initiatives will, to a large extent, offset the
impact on provinces that may have resulted in the creation of
this special budget.
In the 1994 federal budget $800 million was provided over
1995-96 and 1996-97 so that innovative approaches to training
and getting people back to work could be tried in co-operation
with the provinces and territories. This government is
committed to improving the job opportunities for Canadians and
has, in partnership with the provinces and territories, developed
strategic initiatives projects which are ready for implementation
this fiscal year. This is why funds from existing budgets have
been redirected to support the advancement of these important
projects.
[English]
Mr. Milliken: I ask that the remaining questions be allowed
to stand.
The Deputy Speaker: Shall the remaining questions stand?
Some hon. members: Agreed.
_____________________________________________
7736
GOVERNMENT ORDERS
[
Translation]
The House resumed consideration of the motion.
The Deputy Speaker: The hon. member for
Richmond-Wolfe has about five minutes left to conclude his
remarks.
Mr. Gaston Leroux (Richmond-Wolfe, BQ): Including the
minutes taken up by the hon. member for
Broadview-Greenwood, Mr. Speaker?
The Deputy Speaker: We will give Mr. Leroux one minute
more, naturally.
Mr. Leroux (Richmond-Wolfe): Mr. Speaker, as we resume
this debate, I would like to recap briefly what was said in the
first part, which is extremely important and deals with the
impact of regional development, and federal involvement in
regional development in particular. Let me remind this House,
first of all, that, between 1974 and 1984, both sets of economic
and regional development agreements commonly called ERDAs
have had an extremely negative impact on peripheral regions,
that is to say regions outside of major centers that monopolized
46 per cent of the total budget in terms of investments.
I would like to push on a little further with this demonstration,
my ultimate goal being to bring the federal government to
understand that it must withdraw completely from regional
development in Quebec and recognize the province as prime
mover with respect to development. To continue with my
demonstration, by integrating the regional offices known as
FORD-Q with the Department of Industry and turning them into
business service centres, the Liberal government is creating a
single window for information on federal, provincial and
municipal programs and services in Quebec, the sole purpose of
7737
which, in our view, is to emphasize Canadian regional
development policies with the catastrophic results that we know,
results noted in several studies.
So, as a member of the industry committee, it is my duty to
denounce this contempt displayed by the federal government for
Quebec's regional development policies. Quebec, the State of
Quebec, has had a regional development process for over 40
years, across that is far more effective and better adapted to the
needs of fringe regions.
I repeat that today, we have a series of general agreements
involving 95 regional municipalities that have done their own
strategic development studies in terms of the development of
SMEs and industry. These general agreements reflect how
important it is to be close to the fringe areas, as opposed to
following federal imperatives based on a mythical vision of
what industrial development ought to be in Canada.
Speaking as a member of Industry Committee, I support the
dissenting opinion of my Bloc colleagues, which includes
recommendation No. 20. I support the dissenting opinion,
including recommendation No. 20 of this committee which is
intended to enable the federal government to interfere with the
definition of the objectives and portfolio structure of the assets
of the QFL Solidarity Fund. It is entirely unacceptable that the
committee should recommend that the federal government
interfere with the definition of the objectives and orientation of
labour-sponsored venture capital corporations established
under provincial legislation.
More about duplication and overlap. The new mission of the
Federal Office of Regional Development, which has now been
merged with the Department of Industry, is to all intents and
purposes that of a service centre for business.
(1515)
However, this is what the Department of Industry has to say
about the purpose of the FORD: Taking into account its limited
financial resources, it plays a major role by offering SMEs
services including information, analyses and strategic
assistance. In Quebec we already have the wherewithal to
provide such services to SMEs, including exporter SMEs,
through the General Secretariat for Foreign Affairs of Quebec,
which provides entrepreneurs with information and a very
detailed guide that has an excellent reputation among
entrepreneurs active on international markets.
In fact, legislation passed in Quebec in 1979, the Act
respecting land use planning and development, which created
regional municipalities, the so-called MRCs, provided the
structure for such services. With a council in each of the 95
MRCs, economic development corporations and industrial
commissioners, it was possible to start a development process
involving interaction between the SMEs and all the various
regions and microregions.
According to a study by Marc-Urbain Proulx, an expert on
economic development in Quebec, in a market economy whose
many weaknesses are compensated for by more concerted action
by authorities at all three levels of government, development
plans for MRCs in Quebec are mainly aimed at integrating a
variety of activities.
What causes duplication, overlap and poor management of
funds is the failure to recognize existing structures. In this
context, a parallel network of 13 regional offices, or FORD-Qs,
in Quebec is unjustified, constitutes duplication of services and
is basically squandering public funds. This is an example,
among existing direct assistance to small business and direct
funding support to small and medium-sized businesses. Liberal
members from Quebec should advise their colleagues of the
existence of such a major development and financial assistance
structure for small and medium-sized businesses at the regional
level, and I am coming to this.
Quebec has its own regional development secretariat under
the responsibility of a minister of state for regional
development. This House must realize that there is no reason for
federal involvement in regional development. Federal
involvement complicates greatly government intervention to
help small and medium-sized businesses. Regional
development boards have been in existence for over 30 years
and, with tools such as regional initiatives funds and business
assistance funds-our suggestion is not off the wall; it is the
same kind of instrument-these boards provide direct assistance
to small business.
The development secretariats I referred to earlier can also
assist small business with tools such as local initiatives funds
and decentralized job creation funds. In the field, other
stakeholders actively support small and medium-sized
businesses. Take the Solidarity Fund, the industrial
development corporation and the regional investment
corporation for example. Note the smooth industrial
development in the Sherbrooke area, where small and
medium-sized businesses from nine municipalities have trade
relations and agreements with the United States, particularly the
northeastern states, including the city of Hartford, have access
to markets and prosper.
To conclude, out of solidarity with the Quebec government
and state and in support of the initiative of the Quebec minister
of state for regional development, the Bloc Quebecois asks that
the Liberal government withdraw from regional development
and transfer to Quebec the federal regional development
envelope.
Mr. Patrick Gagnon (Parliamentary Secretary to Solicitor
General of Canada, Lib.): Mr. Speaker, again, they would have
us believe that the federal government is doing absolutely
nothing in the regions. When I hear the opposition's demagogy, I
find that it hurts our ears to hear the member opposite say that
the Federal Office of Regional Development has done nothing,
the Federal Business Development Bank has done nothing, the
Prime Minister of Canada, who is now in China, has done
7738
nothing for regional economic development and especially to
advance social and economic development in Quebec.
(1520)
As a member from the rural hinterland of Quebec, I can tell
you, Mr. Speaker, and I find it regrettable that the opposition
fails to mention it in their propaganda, that there is a serious lack
of co-ordination and co-operation among various provincial
bodies involved in small-business development.
People in Quebec, and especially in the regions, have
denounced the Caisse populaire Desjardins, which has over
$500 million, for not lending enough to small-business people
in the regions. One would say that the opposition is taking an
urban point of view which does not reflect the socio-economic
reality of the regions. For example, they do not realize the major
investments we have made in important enterprises in the
regions, including in forestry. Take the Eastern Quebec
Development Plan, for example.
Six thousand small businesses and workers commended the
Government of Canada for what it is doing, its serious approach
and business plan, and that is no joke. If there is a lesson to be
learned from this, it is that the Government of Canada is
welcome because it is a good manager. Unfortunately, all we
hear from the opposition is that there are too many players and
unfortunately the provincial level is not well co-ordinated.
Our area does not even have someone to go to foreign
countries to promote the regions, because Quebec is doing a bad
job and they should admit it.
Mr. Leroux (Richmond-Wolfe): Mr. Speaker, it is obvious
that the hon. member for Bonaventure-Îles-de-la-Madeleine
does not know his region at all, since what he is demanding is, in
fact, a settlement. I urge him to tell me if the Eastern Plan has
indeed been renewed. They have been fussing with this plan for
several months. Of course, the government did not see fit to
respond to the first invitation last summer. It then kept putting
off the meeting with Eastern producers. The last I heard, nothing
has been settled regarding the Eastern Plan. The agreement has
not even been renewed at this time.
In any case, for a member coming from Quebec and very
familiar with regional tools like regional development councils,
industrial associations, the general secretariat of foreign affairs,
which make loans to businesses and work on domestic and
international market development and prospecting with them-
he knows full well that there is increasing co-operation in
integrating structures, precisely because they decided that there
were too many structures and players.
The underlying reason why the regions decided to analyze
their economic development strengths and weaknesses was to
come up with strategic development plans to be shared through
an integrated forum called the regional economic development
council. The purpose of this was to reduce the number of steps
required, to make business and socio-economic development
more efficient, to avoid overlap-within their own territory, to
say nothing of federal involvement-to rationalize their own
actions and structures.
The hon. member should know that these integration efforts
will soon be stepped up in his own region. We do not need to
create anew, as with the 13 FORD-Q information offices.
Quebec already has integrated offices providing information,
including export information, to small businesses and all
stakeholders.
The Minister of Regional Development in Hull specifically
said that this program would be helpful to small exporters.
Quebec already has a recognized and appreciated organization
which supports small exporters and gives them a complete kit on
how to develop their own markets and foreign business plans.
That is duplication. People in Quebec, to convey to the federal
government that if its goal is indeed to maximize the funds
invested and provide real and effective support to small
businesses, are sending the following message.
(1525)
Why does the government not admit that the experience of the
past 40 years in regional development-again, the development
of all regions and not major centres-Forty-seven per cent of
the amounts under recent agreements were invested in central
regions. Why not admit that Quebec is the primary force in
regional development and that its experience-and that of all its
people-is concentrated at the regional development level, as
the hon. member for Bonaventure-Îles-de-la-Madeleine
should know? Who are the people working together at the
regional development level? The same people he mentioned
earlier: regional county municipality officials, mayors,
socio-economic businesses, entrepreneurs, unions. This full
integration of economic development players only makes them
more efficient while reducing the number of action structures.
What is being proposed here? To create other action structures
without integrating into existing structures. We cannot accept in
good faith-
[English]
Mr. Manley: Mr. Speaker, I rise on a point of order. I know it
was previously raised that in his first remarks the member was
not on topic. He is likewise off topic now. If there is any time for
further-
The Deputy Speaker: I think the minister will be well aware
that was not a point of order.
7739
[Translation]
Mr. Leroux (Richmond-Wolfe): Mr. Speaker, I explain
these things because they are reluctant to see them. They are
upset by my comments. Regional development is a
responsibility of the Minister of Industry and, by order in
council, the minister himself is responsible for a region. The
Minister of Human Resources Development is responsible for
the West. The Minister of Supply and Services is responsible for
the East, while the Minister of Finance is responsible for
Quebec.
If this is not about regional development, what is it? This is
about helping small and medium-sized businesses; it is about
development and access to credit for those businesses. These
aspects are all relevant. The government simply does not want to
face the issue squarely and with a structured approach.
It is because it does not look at the basic question in a
structured fashion that duplication and all these structures are
maintained, with the result that the ultimate objective-
[English]
Mr. McClelland: Mr. Speaker, I rise on a point of order. This
is question and comment period and there are others who would
like to get a question in. Perhaps he could be-
An hon. member: And it is irrelevant.
Mr. McClelland: And it is irrelevant.
The Deputy Speaker: The member will also know that was
not a point of order. There remain two minutes in the period for
questions and comments. Perhaps there will be unanimous
consent to extend the period. In the meantime, the hon. member
has a minute and a half left.
[Translation]
Mr. Leroux (Richmond-Wolfe): Mr. Speaker, clearly this
government has to understand that, given the exceptional and
enormous work undertaken by Quebec regions to promote their
economic development through framework agreements, through
RCM's and through regional development councils, it is
absolutely essential that Quebec be the only one responsible for
its development. The federal government must negotiate with
Quebec and transfer to it the whole responsibility of that sector,
as well as the necessary funds which are, in all fairness, owed to
that province for regional development purposes.
[English]
The Deputy Speaker: There remain 20 seconds in the period.
I assume there is not unanimous consent to continue the question
period.
Some hon. members: No.
Mr. Mills (Broadview-Greenwood): Mr. Speaker, on a
point of order, I would like to ask you for clarification on the
process we will follow for the rest of the afternoon.
My understanding is that today's debate is on Motion No. 16.
We are debating the report on access to capital for small
business that the industry committee members put together over
the last several months. The previous speaker chose not to deal
with the report not only during his main address but also during
the eight minutes of the ten he took up during the question and
answer period. Is it your position, Mr. Speaker, that members
can speak on whatever they want for the rest of the afternoon or
are we going to deal with Motion No. 16?
(1530)
The Deputy Speaker: Colleagues, the member and all
members will know that there is a relevance rule in our standing
orders that is observed mostly in being ignored in the House.
This Chair at least would be delighted if members would respect
the rule of relevance but in the time I have been here that rule is
ignored more than any other in the standing orders.
Mr. Milliken: I rise on a point of order, Mr. Speaker. It has
been my experience, limited as it has been in terms of the House
and in comparison with other members, that when the Speaker's
attention is drawn to the fact that a member is addressing the
House in a manner that is irrelevant to the subject under
discussion the Speaker then directs the person speaking to make
his remarks relevant.
The parliamentary secretary was suggesting that perhaps it
would be appropriate that when members rise on a point of order
to point out the irrelevance that Your Honour would take note of
it and direct the member to make his remarks relevant or face the
consequence in Standing Order 11 which says:
The Speaker or the Chairman, after having called the attention of the House,
or of the Committee, to the conduct of a Member who persists in irrelevance, or
repetition, may direct the Member to discontinue his or her speech, and if then
the Member still continues to speak, the Speaker shall name the Member or, if
in Committee, the Chairman shall report the Member to the House.
The Deputy Speaker: Thank you to the hon. parliamentary
secretary. As I say I think all the Chairs would be delighted to
see the relevance rule respected. If members in the House are
indicating they wish to see it pursued vigorously, I suppose all of
us will take careful note of that.
In the meantime it is the Secretary of State for International
Financial Institutions who has the floor on debate.
[Translation]
Mr. Leroux (Richmond-Wolfe): Mr. Speaker, I am still
referring to the point of order. I think that the members are
trying to raise an issue by claiming that my speech was not
relevant. Yet, they know perfectly well that my speech was
directly related to the development of small businesses and to
7740
access to financing, that it suggested a much wider and
structured approach, and that it was right on target.
It may hurt them, but my comments were really relevant and
related to the issue being discussed here today.
[English]
The Deputy Speaker: The hon. minister has the floor. We
trust his remarks will be relevant.
Hon. Douglas Peters (Secretary of State (International
Financial Institutions), Lib.): Mr. Speaker, I am extremely
pleased to have this opportunity and to congratulate the industry
committee for the work it has done on the issue of financing
small business. I intend to keep my topic to that item.
Our government clearly recognizes that small business is a
vital sector of Canada's economy. The report of the industry
committee makes a valuable contribution to public debate and
understanding of the needs of that sector.
It is worth emphasizing and it is worth emphasizing again and
again just how important small business is by beginning with a
few facts.
Small business accounts for nearly 40 per cent of our national
economy, a third of corporate profits. More than half of all
Canadians working in the private sector are either
self-employed or work in businesses with fewer than 100
employees. Even more important, in just a decade this same
sector of companies with fewer than 100 employees created
more than eight out of ten of the new jobs in Canada.
This is not a passing trend. Small business is clearly the
engine of growth in the new economy and the policies of this
government recognize that fact. As you know, Mr. Speaker, we
campaigned on this issue. For example, the Prime Minister and I
held a small business forum in my riding in Scarborough East
during the election campaign. As the Prime Minister pointed
out, if only a third of small businesses in Canada each hired one
additional employee fully 300,000 new jobs would be created.
To realize their full potential as creators of new jobs small
businesses need the right environment, one that allows them to
prosper and expand. Canadians are tired of governments that
pursue quick fixes or jump on the latest fad but have no
fundamental vision of what government should and should not
do in the economic arena. That is why our government set out a
new comprehensive vision in its recent paper ``A new
framework for economic policy''.
That paper sets out five key areas on which we must focus.
The first is helping Canadians acquire skills; the skills to get
jobs, the skills to keep jobs, and the skills to find better jobs.
(1535 )
The second part of our economic framework is encouraging
Canadians to adjust to change. That will require changes in the
government's approach to subsidies as well as to unemployment
insurance and high payroll taxes, which are a detriment to small
business.
The third element in our framework is getting government
right. That means targeting scarce resources on the highest
priority programs and reducing or eliminating lower priority
activities. It also means draining the swamp of federal
regulations.
Providing leadership in the economy is our fourth objective.
The private sector creates jobs, especially the small business
sector. The government has a role in fostering economic growth.
It can do this for example by gathering and sharing information
about technology and information about new markets.
It can help bring businesses together with other businesses
and together with the new technology. It can facilitate trade by
ensuring access to markets and to adequate export financing.
The fifth and final objective is absolutely essential to
fulfilling the other objectives. We must create a healthy fiscal
and monetary climate in Canada. Canadians are paying a painful
price for decades of deficit and debt. It is measured in high
taxes, high interest rates, too few jobs and too little growth.
Higher interest rates have imposed a heavy burden on all
Canadians and few understand that burden better than the men
and women who operate small businesses.
The matter of interest rates brings me back to the central issue
here today, access to financing. While know-how and
entrepreneurship are the engines of small business success they
are not always enough. Access to financing can be a critical
issue for small businesses, particularly during their early years.
The importance of bank financing to this sector would be
difficult to overstate. Indeed, bank financing accounts for about
90 per cent of the external financing of small businesses.
Recognizing this our government met with the CEOs of
Canada's major banks shortly after taking office. We urged them
to re-examine their approaches to small business lending and
challenged them to be more innovative and responsive. The
Minister of Finance and I have been very clear in our
discussions. The government expects improvement in banking
practices. In no small measure Canada's economic prospects
hinge upon the banking community, recognizing that small
business has specific needs. To meet these needs banking
practices must change.
I believe that the banking community is listening and that we
are seeing some results. The banks have been taking initiatives
to help their small business clients. These include such things as
increases in funds set aside for conventional loans to small
businesses. One bank introduced a program to provide financial
7741
assistance to viable small businesses that are experiencing
temporary cash flow problems. Another created a $125 million
venture capital fund to invest in small and medium size
companies.
Several banks have introduced programs to enhance the
accessibility of knowledge based firms to financing and other
banking services. Others have introduced new procedures to
handle complaints. One bank has appointed an internal
ombudsman reporting directly to the chairman to ensure that a
proper level of service has been provided to small business
clients. Another bank has established a panel to review
complaints, a panel that includes a representative from small
business.
The list goes on. Two banks have established regional
business centres to provide specialized services to small
business clients. Another has introduced a program to provide
overdraft protection to SBLA customers that do not have
operating credit.
I recently issued a letter to all hon. members outlining these
and other bank actions to help meet the needs of small
businesses. I sought members' assistance in monitoring the
results of these initiatives. Specifically, I asked members to let
me know if the banks were fulfilling those commitments and if
their initiatives were helping to reduce the credit difficulties of
small businesses in their constituencies.
In addition, the government has been working with the banks
on a number of important areas related to bank financing. These
include several major areas in which the committee reports
make some substantial recommendations.
(1540 )
For example, senior representatives of the Department of
Finance and Industry have been encouraging the banks to move
ahead on a number of issues, including a code of conduct for
small business lending.
This code should help place the relationship between banks
and small business on a sounder footing by making the
borrowing process more transparent and providing a simple,
timely and effective mechanism to resolve disputes.
The government has also been reviewing a number of other
areas with the banks; export financing, the improvement of
banking statistics and the question of personal guarantees for
loans under the Small Businesses Loans Act. All these are areas
that are being examined.
Against that backdrop I would welcome the industry
committee's report with enthusiasm. Many of the committee's
recommendations touch on areas where, as I indicated earlier,
work is already under way.
I understand that the code of conduct for small business
lending will be released shortly. It will establish minimum
industry wide guidelines. Individual banks will also be able to
develop their own codes which will be released soon after.
The best method of dispute resolution remains to be
determined. There are a number of options that will need to be
reviewed and the committee's proposals are a useful addition to
this discussion.
The committee has also recommended that government
departments and agencies work with the banks to improve
statistics on lending to small business. Work to improve data in
this area is already under way. It involves officials from the
Bank of Canada as well as those from the Department of
Finance.
In addition to proposals related directly to the bank, the
committee has made a number of recommendations pertaining
to government programs and agencies. It has, for example,
recommended that the Small Businesses Loans Act be revised.
We must ensure that this program is run on a cost efficient basis
with minimal risk shifting to the government and without
preference to bank financing.
The committee is correct to point out that there are concerns
about future program costs as well as the extent to which the
program adds to the total supply of financing. A successful
SBLA program will remain a critical element of the
government's small business agenda.
We are reviewing the program with an eye to improving its
incremental nature. We are also reviewing it with addressing the
fiscal concerns through increased cost for coverage. We will
also continue to ensure that qualified private sector lenders
other than the banks remain eligible to participate in that
program.
Among the committee's other major recommendations was
the establishment of a limited working capital guarantee
program for small and medium sized exporters. This too is an
area in which work is already under way. The Export
Development Corporation is currently working with financial
institutions on a new insurance product. This product will
facilitate the use of foreign accounts receivable by small and
medium sized exporters to secure working capital lines of
credit. As recommended by the committee, this program will be
self-financing and the premiums will be commensurate with the
risk.
I focused on the committee's proposals in areas where work
has already started. The committee has, of course, made other
7742
recommendations that touch on areas where further study is
needed.
For example, the committee has made several proposals,
particularly in the area of venture capital which have a
significant tax dimension. Clearly these proposals must be
examined further to ensure that their full fiscal ramifications
and possible side effects are taken into account. Alternative
approaches must also be duly considered.
One recommendation in this area is a reduction in the capital
gains tax rate on so-called patient capital, that is capital
investments with a five-year term or longer. As many hon.
members are aware, a task force has been consulting with
business and farm groups on the $500,000 lifetime capital gains
exemption.
In the course of this review, a number of proposals for
reforming capital gains treatment of small businesses have been
received including proposals for reducing the capital gains rate
on longer term investment. These proposals will of course be
examined closely.
I should also point out that a few of the committee's
recommendations appear to suggest an easing of prudential
standards for financial institutions. These, like all the
recommendations, will be carefully considered. Let me
emphasize that the government will not pursue any measure that
could weaken the financial system in any way. A strong and
reliable financial system is central to Canada's economic health.
We will certainly not jeopardize it.
(1545)
In closing, I once again would like to express my appreciation
for the opportunity to participate in today's discussion and to
congratulate the committee on its report. It is also my intention
to state my conviction that Canada's small business sector will
become even stronger and more competitive.
Mr. Dick Harris (Prince George-Bulkley Valley, Ref.):
Mr. Speaker, I listened with great interest to the hon. member's
presentation.
I purchased my first business when I was 18 years old.
Throughout all of my life save for about five years I have been in
and out of small business and consider myself somewhat of an
entrepreneur. The definition of that as an entrepreneur through
your life you have some winners and some losers but at the end
of the day you hope you have more winners than losers.
Fortunately I lucked out from hard work, but through all those
years my biggest competitors were the bankers.
I listened to the hon. member talk about proposals and that the
banks are going to do studies and they are going to talk about
this and talk about that. They have been doing that for years.
I particularly remember the period of the great recession in
early 1982 when the Bank of Commerce had a multimillion
dollar television campaign with Anne Murray telling all small
businesses in Canada that the Bank of Commerce was their
friend. I was operating a business then and fortunately I was not
really caught in the recession. One day I got a call from my
banker who said: ``Dick, we are going to cut your credit line in
half''. When I asked why, he said: ``We have just been advised
we have to raise some capital''.
The banks can talk all they want about programs and plans.
The government can talk all it wants about how much it is
talking to the banks, but nothing is going to happen to help small
business until the monopoly of the big five bankers in this
country is threatened or broken up.
The hon. member said that the government has met with the
CEOs of the major banks and they have promised to look at
improving banking practices in relation to small business. That
is fine, but my question is, improving banking practices or
what? What kind of hammer is the government going to hold
over these bankers to make sure they do?
If the government would dare to suggest to the big five who
have this country in a monopolistic grip when it comes to
finance, if it would threaten to open up the banking industry to
private enterprise, to competition, to regional banks that would
specialize in small business financing, that would be the biggest
incentive for the banks to start looking seriously at small
business. As long as the banks hold all the cards, as long as they
are contributing millions of dollars to the two old line parties to
help them with their election costs, they are never going to give
up their monopoly and small business is never ever going to get
any benefit or relief from the banking industry in this country.
Mr. Peters: Mr. Speaker, the hon. member raises several very
interesting points. First, there are more than five banks in this
country. There are over sixty banks. All of the world's largest
banks are here. They are quite free to lend to small business if
they wish. One or two of them do lend to small business. The rest
of them do not.
Opening up the banking business to what? The charters of
trust companies, loan companies and the banks are all the same.
Any one can get a charter if they want to. If they want to open a
regional business, some have been successful, others have been
less than successful. The member should look at the number of
financial institutions that OSFI and CDIC insure and inspect.
There are several hundred financial institutions. The options are
there.
(1550)
I would also point out that the member is correct in that small
business indeed deals with the six large chartered banks. I do not
know why. Would it be because for the most part small busi-
7743
nesses get the financing they want from them? It is probably
because they provide service to most small businesses.
I do not think all small businesses have problems with the
banks. There are far too many. I hope the hon. member will
review the list of initiatives I sent to each member of this House.
I ask members to go over the list and tell me where these things
have not been done. If there are failures in them, if the initiatives
are not being pursued, then I would like to know because I will
bring those up with the banks that have proposed them.
I presume the banks are serious about those initiatives. They
would not have announced them if they were not. They were
announced after we had pursued them. If they are not serious,
then I hope hon. members will let me know. Some have. Several
members have written to me. I hope the hon. member will take
the opportunity and tell me of specific instances where these
initiatives have not happened in his riding or elsewhere.
Mr. Boudria: I rise on a point of order, Mr. Speaker. Pursuant
to Standing Order 43(2) I wish to indicate to the House that
Liberal members of Parliament for the rest of this sitting day
will be sharing their time.
Mr. Harris: Mr. Speaker, I assure the hon. member that I will
be monitoring the promises-if we can call them that-of the
banking industry to see whether they are actually following
through on them. I am not going to cross my fingers because I
have heard this rhetoric from the banking industry for a number
of years. It is always the small businessmen. When the sun is
shining the banks will hand them an umbrella but when it starts
to rain they are the first ones to take it away.
The hon. member knows very well that the big six do in fact
control virtually all the business in the country. The hon.
member also knows that the big six have the resources to get
involved in a little bit of risk financing. I am sure they consider
small businesses as high risk, otherwise they would not treat
them as they do.
The hon. member also knows that the smaller banks do not
have the kind of capital to get involved in the more risky loan
portfolios like small business. That is why all the small
businesses are pretty much obliged to deal with the big banking
institutions, the big six. They really do not have too many
choices.
The government should tell the banking industry: ``Now
listen. You folks are talking about rearranging your priorities
when it comes to small business, rearranging the conditions
under which you lend. You are doing these studies and you are
going to come up with some good programs. You have admitted
it has to be done, now what are you going to do about it? Are you
really going to do something? Because if you do not we as a
government are going to impose a few restrictions on you. You
will not have such a monopoly in dealing with business in this
country''.
Clearly the government is going to have to hold some sort of a
hammer over these guys in the banking industry. If not, they are
simply not going to do anything no matter how much the
government talks to them, no matter how many times their CEOs
meet and say that yes, they have to be a little more gentle toward
the small business interests. They are simply not going to
change their practices they have followed since day one until the
government holds a hammer over their heads to change their
lending practices.
(1555 )
Mr. Peters: Mr. Speaker, it is nice to know the hon. member is
an expert on how the CEOs of the banks react to the admonitions
of government. Unfortunately he is not an expert. Let me tell
him that the CEOs of the banks have taken the admonitions of
the Minister of Finance and myself seriously. That is exactly
what we told them. We told them that they have to change. We
told them that shortly after we were elected and we told them at
meetings again and again.
Let me assure the hon. member that there have been far more
initiatives put out by the banking industry since this Liberal
government was elected than have been put out by that same
industry-
The Deputy Speaker: Order, the time has expired. The hon.
member for Edmonton Southwest on debate.
Mr. Ian McClelland (Edmonton Southwest, Ref.): Mr.
Speaker, I take great pleasure in participating in this debate
today. It is interesting. You can certainly identify those of us in
this House who have signed a cheque in our lives because we
certainly have a lot more interest and a lot more fire in our
bellies when we get to talking about the banks and the banking
institutions in Canada.
The relationship with the big sisters, the big banks in Canada,
was very well summarized in the title of a book that was
published about 10 years ago: Towers of Gold, Feet of Clay.
When you think about that for a second it really brings into focus
the reason for this debate in the first place and why the industry
committee worked so hard on its report on small business
financing.
It was interesting to me coming from western Canada that this
country did not really have a recession until the late 1980s and
closer to 1990 when it really hit southern Ontario. That is when
we had a recession. But for business people in the west the
recession started much earlier than that and it started overnight.
It was exacerbated by the national energy plan but made much
worse by the fact that during that time the big banks had loaned
vast amounts of money all over the world and then were drawing
in the loans all over Canada from the small business sector.
That was one interesting time to be in business. Banks were
lending money and had loaned money and taken huge losses all
over the world but they were putting the screws to small
business people because they were the only ones they could put
the screws to.
7744
There is a saying in the banking business that when you are
not a lender, you are a receiver, and if you owe the bank a
thousand dollars you have a problem, but if you owe it a million
dollars it has a problem. That is absolutely true.
Both sides of this story have learned a little over the
intervening years and as in everything in life when there is
competition in any industry it is good for the business. It is good
for the industry. I think we are getting more competition in the
banking business and that competition is good.
This report put together by the industry committee has 24
recommendations. They run the gamut of just about everything
you can imagine: monitoring and approving statistics,
regulating bank behaviour, leasing, federal programs to assist
small and medium business, stimulating competition, using
RRSPs, provincial security regulations, taxation and capital
gains, labour sponsored venture capital corporations and mutual
guarantee co-operatives.
I would like to restrict my comments to four separate issues:
the role of the Small Businesses Loans Act; the role of the
Federal Business Development Bank; whether or not to speak
more generally to the role of business and government and the
relationship and how much government money should be
involved in business; and just a few minutes to speak about the
legitimate role of an entrepreneur and just who should have the
risk.
(1600 )
Let us start with the Small Businesses Loans Act. For the
benefit of those who may not be aware of it, when an
entrepreneur gets an idea they go into the bank and say they have
an idea, they want to start a business. The Small Businesses
Loans Act will lend government guaranteed money up to 90 per
cent of the value of the loan and it is guaranteed by the
government. It is set and established at a rate of 1.75 per cent
over prime.
A few years ago the amount was increased dramatically. I
think it went to $200,000 from $50,000. At the same time the
economy was going down the tubes in Ontario.
As Don Cherry says, you don't have to be a rocket surgeon to
figure it out. If the economy is going down the tube-
Mr. Calder: A rocket scientist.
Mr. McClelland: A rocket surgeon, a brain scientist. This is
Don Cherry.
You do not have to be a rocket surgeon to know that if we have
an economy that has gone down the tube like the economy in
Ontario we increase the amount of money that is available under
the Small Businesses Loans Act that is guaranteed 90 per cent by
the Government of Canada; that is taxpayers at 10 bucks a pop.
What is going to happen? The banks are going to roll all of their
questionable loans into the small business loans. They are all
going to be guaranteed by the taxpayer-guess what, at 1.75 per
cent above prime.
What entrepreneur would go into a bank and say: ``I would
like to borrow some money but I'm prepared to pay 2 or 2.75 or
2.5 above prime and use my own money and by the way I don't
want the government to backstop it so you use your money
because that is why you're in a risk business''. They go in there
and say: ``I want a Small Businesses Loans Act loan'' and the
bank is quite happy to have its risk guaranteed by the
government.
Is it any wonder that the use of small businesses loans
skyrockets? This is not rocket science here. This is fairly basic.
Then what do we do? We say we are going to try to increase
the amount of money that is made available under the Small
Businesses Loans Act to small business. What is that going to
do? That is going to give the banks that much more freedom to
get all of their small business loan accounts guaranteed by the
taxpayer.
That distorts the banking business and it distorts the
responsibility of the entrepreneur going into business. When
someone goes into business, it is not the responsibility of the
taxpayers to hold them harmless from risk because with risk
comes reward.
In the report there is one particularly good recommendation
that I would hope the government would take to heart and
incorporate: ``The program should increase the availability of
credit rather than allowing lenders to reduce the risk on loans
that would be made without the guarantee''.
That means the banks should be making loans to small
business and the loan rate should be commensurate with risk. If
the Government of Canada, that means the taxpayers of Canada,
is going to be guaranteeing loans to businesses, small or
medium, those loans should carry a rate of interest
commensurate with the risk so that in the long term small
business loans would be self-financing or self-liquidating. The
losses of some would be offset by the profits of others.
(1605 )
Surely if a loan is going to be guaranteed by the Government
of Canada, the taxpayers of Canada, that should carry a cost to
the user that it would ensure that the citizens of Canada are held
harmless from any risk. That rate should also be high enough
that the loans may be determined and may be provided by the
bank without having to go to the well of the taxpayer.
If for instance the small business loans were at a rate of 2.5
per cent and the average small business could get a loan at prime
plus two or prime plus one and a half, there would be some
impetus on the part of the banks and the borrower to borrow
money without having to go to the public trough. That is the way
it should be.
7745
That is a particularly good recommendation in the report and I
would certainly suggest that the government should take it to
heart. It is not so much a question of how much within reason a
small business or an entrepreneur pays for the use of someone
else's money, it is whether that money is available at all.
Another consideration in the small business loans came up in
discussion of just what part of the loan should be guaranteed.
Should it be the first 90 per cent or the last 90 per cent? Should
any loan be guaranteed the first half of it or the last? In my view
it should always be, if the Government of Canada is
guaranteeing anything, the last portion of the loan, not the first
portion.
If I am lending money to someone, I want that person to be
lying awake at night trying to figure out how they are going to
pay it back. I want to make darn sure that if I lend someone
money their number one objective in life is repaying that money,
not repaying the last half of it. It is pretty basic but it is real.
A change in the Small Businesses Loans Act which is perhaps
the most important is it should be available for working capital,
not just for bricks and mortar, not just for equipment, not just for
inventory.
If a venture has the strength, and now we are talking about
businesses that as a nation we are going to need more of as we
get into the knowledge based economy, we are going to be
making decisions on working capital which will allow
entrepreneurs to develop knowledge based material such as
computer programs, CD-ROMs, things that require virtually no
inventory, very little bricks and mortar but without working
capital would never get off the ground.
The consideration of making working capital requirements of
business available under the Small Businesses Loans Act is
another very worthwhile objective. I would caution that we are
going to have to be very vigilant to ensure that there is oversight
on these loans.
We are not doing anyone a favour if we ask them to put their
house up, put all of their possessions up and then do not
vigorously give an objective analysis to the new venture, to say:
``Wait a minute. Make sure you have all your bases covered
before you risk everything you have in life''.
The next subject I would like to speak about is role of the
Federal Business Development Bank. I must admit that I have
mixed emotions about the FBDB because it is a lender of last
resort. Its purpose is to lend money when chartered banks will
not lend money and my feeling is that if a chartered bank will not
lend the money or the treasury branch in Alberta, we really have
to wonder why on earth the taxpayers of Canada should be
taking the risk.
I know that the banks in Canada have not over the last 50 years
or so been particularly venturesome. There is a need for longer
term patient capital. is possible that the Federal Business
Development Bank may be able to fill a legitimate role in this.
Frankly, I just do not know.
(1610)
I would caution that if a bank using taxpayers' money is going
to get into the business of lending money on a long term basis to
high risk businesses, we had better make sure that it does so in
an extremely prudent manner. This cannot be a shotgun
approach where we are going to throw enough money at it and
hope we will have enough spectacular winners that they will
offset the losers.
That brings me to the next part of what I would like to speak
about. It is the whole notion of governments at all levels,
including the governments in the great province of Quebec that
somehow consider their function, their legitimate purpose is to
tax money from individuals, take it into the government and
then lend it out to other people to go into business against
businesses or individuals who paid the taxes in the first place.
What is it about us as politicians that when we get elected we
somehow think we have the knowledge or the ability to tell the
private sector what it should do? How is it that we think we
somehow have the right or even the responsibility to manage an
economy? Our country did not get into the hole by $535 billion
federally because we in this House have proven to be such great
stewards of the taxpayers' wealth.
Mr. Mills (Broadview-Greenwood): What are you doing
here?
Mr. McClelland: My hon. colleague across asks what I am
doing here. I am here to try and stop this foolishness. I am here
to try to put an end to this.
Some hon. members: Oh, oh.
Mr. McClelland: My hon. colleagues across the way laugh,
but the fact of the matter is that 25 years ago the Liberal Party
started us on this slippery slope, thinking it is somebody else's
money.
Mr. Mills (Broadview-Greenwood): Here it comes.
Mr. McClelland: It is giggle time over there. I thought that
might happen. I just happen to have a list of financial
institutions that have gone down the tube since 1970 for which
the taxpayers of Canada have picked up the pieces. There are 32
of them, $9,392,000,000. Of that, there is $5,189,000,000 in
recoveries. Somehow there is $4 billion of taxpayers' money,
people who are struggling to get by earning $8 to $10 an hour,
going to the government and all of a sudden we are backstopping
huge businesses. There are a few more here, another three pages.
I do want to compliment the government on one of these. This
is through western economic diversification. This was federal
funding to Consumers' Paper Corporation and SHOTCO
Ammunition Corporation. They were cancelled by the minister
in charge of western economic development. One was labelled
as a
7746
political handout and the other 30 per cent owned by the
Venezuelan military. At least it is looking at it. I give the
government credit for that.
Meanwhile we have Bell Helicopter, $165 million; Algoma
Steel, $15 million-pages and pages of money that has been lent
by governments to small and medium size business that has been
written off. It is not our responsibility as elected members of
Parliament to-
(1615)
Mr. Mills (Broadview-Greenwood): What do you mean
written off?
Mr. McClelland: What do I mean by written off? From the
Department of Industry; International Tin Council, $4.6
million. From FORD-Q; Nambera Studio, $63,000, a grant to a
company that went bankrupt. From ACOA; Preston & Area
Development Fund, $144,000, $570,000 write-off,
uncollectable. There are zillions of them. Maybe not zillions,
there are some success stories.
Would we have had the same successes whether or not
taxpayers' money was involved in underwriting these
businesses? That is the question.
There are some instances where taxpayers' money has proven
to be beneficial. For instance, the hon. member opposite has
brought to my attention time and time again the auto pact and
what a great benefit it has been to the country. However, when
we are talking about these things, we are talking about huge
sectoral vision things. We are not talking about the little
industry or a little micro thing. We are talking about vision and
the broad picture.
We did not get into this mess by accident. We got into it
because we thought we could make investment decisions on
behalf of individual taxpayers. We cannot do that.
Mr. Dennis J. Mills (Parliamentary Secretary to Minister
of Industry, Lib.): Mr. Speaker, I continue to marvel at the
member's remarks because I never realized he was such a
defender of the banking institutions in our country. I thought
that essentially he agreed with most of his colleagues'
recommendations, that this was an opportunity and a time in our
history when all members of Parliament could get together and
challenge the financial institutions to change their attitude and
banking practices toward small and medium sized businesses.
That of course was the essence and the purpose of this debate
today.
I will get right to the question and I will take less than two
minutes. The question goes back to the the member's
recognition of the auto pact and the fact that this is an area where
legislators made a decision that the automobile industry was an
industry that we would support.
We have also made similar decisions in the House of
Commons for the oil and gas sector. Is the member suggesting
that legislators should have nothing to do in trying to assist the
oil and gas sectors of the country?
Mr. McClelland: Mr. Speaker, I point out to the hon. member
opposite that he must have been working on that question for me
during the first 15 minutes of my presentation. At that time I
spent a fair amount of time talking about the towers of gold and
feet of clay and what led to it and how that came about.
Certainly no one would ever see me standing and defending
the banks. The banks certainly do not need any defence by me
nor would they be likely to get it.
The second question had to do with the role of government in
regulation in the oil and gas industry and in particular the auto
pact. Government has a legitimate role to play in the financial
affairs of the country. However, the legitimate role should be to
ensure that the marketplace is fair, to ensure that competition
exists, to ensure that consumers are not taken advantage of by
any industry that has an oligopoly or a monopoly. We are talking
about the banking industry as an oligopoly.
(1620 )
The government has a role to play in water resources, in
resources like oil and gas. We have to ensure that we have a
competitive marketplace, that we have a tax structure for
instance that encourages people to invest their money in the oil
and gas industry.
The government does not have a role to play in picking
winners and losers in the marketplace. It does not have a role to
play in taking money from me and giving it to somebody else
and saying: ``You are the business that we want''.
Hon. members opposite pointed out the role of government in
their science and technology review. Some of the most esteemed
people in the country came together under the auspices of the
Department of Industry to discuss science and technology in
Canada. They said it is not the role of the government to pick
winners and losers but to assist winners that have been decided
by the marketplace.
I realize that it is very difficult to make the distinction but
there is a distinction. The marketplace decides who the winners
are and what has to be done to support them. The way we can
support winners in industry is by making sure that we have a
steady supply of educated and trained people as a workforce for
them. That is one of the things that we can do.
The member opposite asks: ``What about Bell helicopters?''
What about Bell helicopters? We throw all that money at Bell
helicopters. What about Boeing? It is talking about picking up
its toys and going home because we ended up buying some air
buses.
7747
We get involved in deciding who are going to be winners and
who are going to be losers. I am trying desperately not to bring
up the names of Lavelin-Bombardier and that whole group in
the aerospace industry. How much of what that company has
done would have been done had we not gone to them with a
public purse and they had had to do it themselves.
The shareholders of Bombardier-Lavelin are the ones that get
the benefits. Joe Taxpayer earning $10 an hour is not getting a
nickel from them.
[Translation]
Mr. Yves Rocheleau (Trois-Rivières, BQ): Mr. Speaker, I
would like to ask my colleague from Edmonton Southwest what
he thinks of the recommendations made by the Standing
Committee on Industry in its report concerning the efforts the
government must make to support the new economy based on
high technology, patents, research and development, technology
transfers, with very little concrete guarantees compared to what
is provided to lending banks. We know this is a problem for
those who deal with creative people, but then it is tomorrow's
economy.
I want to know if my colleague thinks that the report does not
go far enough in this area?
[English]
Mr. McClelland: Mr. Speaker, the report is the first tentative
step in that direction. The fact that nobody quite knows how to
address this is reflected in the report. The possibility of the
Small Businesses Loans Act being amended to include working
capital will go a long way to solving that problem.
Therefore this has been addressed tentatively in the report. I
say tentatively because I am sure that most people share a little
indecision on just where we should go.
If I may in 10 seconds, I would like to sum up where the
Department of Industry should focus. We should try to establish
and to maintain a culture that rewards entrepreneurship,
innovation and research and ensures a level, competitive, honest
marketplace.
Mrs. Brenda Chamberlain (Guelph-Wellington, Lib.):
Mr. Speaker, I am pleased to rise to participate in this debate
concentrating on one of the most important aspects of Canadian
society. The government has recognized that small business is
our future.
Small business creates many of our new jobs, stimulates our
economy and provides employment for millions of Canadians.
In Guelph-Wellington and elsewhere when small business
succeeds, Canada succeeds.
(1625)
I was a small business owner. I am excited about what the
government is doing to assist small and medium sized business
in my riding of Guelph-Wellington and across Canada. I can
tell you, Mr. Speaker, that many of my constituents are excited
about it too.
I would like to spend some time concentrating on labour skills
and the importance of further enhancing the competitiveness
and growth of our small and medium sized businesses. I have
had the opportunity to meet with many small business owners
and managers throughout Guelph-Wellington. They are
excited about their future. They believe they have one. They
weathered the recession and they weathered the GST. They want
government help in order to succeed. They need government,
though, to get out of the way where it creates unnecessary
bureaucracy and red tape.
I have been told over and over again: ``Please, get this red tape
away from us''. Single shop people cannot handle it and the
government is going to address some of those needs.
They want government to initiate incentives which will
encourage their success. They count on us to do that. We can
assist the small and medium sized business owner who wants to
expand through providing Canadian workers with the skills to
compete in this highly competitive and rapidly changing
environment.
Guelph-Wellington has one of the finest skilled worker
forces in Canada with one of the lowest unemployment rates in
the country. However there are still some who are unemployed.
They want to work. There are still some in Guelph-Wellington
receiving social assistance. They also want to work. There are
also thousands of unskilled or underskilled workers who can
contribute if given the skills. They have to have those skills.
Business leaders in Guelph-Wellington know what they
need to succeed. Our economy depends on small business; 69.7
per cent of businesses in Ontario have less than five employees.
The needs of each one of those businesses are unique but
government can help.
In the past we have spent too much time training people for
skills that are not required. What is required now is flexible
training programs that provide on the job training, training for
which the employer provides time off or tuition assistance, or
classroom training at educational institutions. Business people
in my community will help to train workers because they want to
ensure that our community and, more important, all of Canada
have the best skilled labour force so that we can compete in this
world.
7748
We must train people for jobs that do exist or will exist and
business must play a role in both identifying these positions as
well as helping in the training process. This is a win-win
situation.
Guelph-Wellington business people want better
information. They want to share that information with other
business leaders across Canada. Our knowledge based economy
means that we must work together to make it work. Eighty-five
per cent of new employment is being created today in small and
medium sized businesses.
Our businesses will need child care workers, veterinarians,
dental hygienists and psychotherapists in the near future. If we
are going to prepare for the future we must invest in people
today.
The social security review process will assist us in identifying
priorities and overcome the obstacles to successful skills
development in Canada. We must decide how basic skills
training can best be improved and what priority this training
should receive.
Employers in my riding want to be given a better role in
training. They want to be consulted and informed and they want
to participate in all facets of skills training. Already employers
and employees are working together to shape this kind of
training. The reason for quality skills training is obvious:
Well-trained workers are more employable and can adapt more
easily if they must change jobs.
(1630)
The enthusiasm is there. Guelph-Wellington workers want
the skills necessary to compete. They want to be able to adjust to
marketplace changes and they do want to work. The employers
in my riding are asking for new and innovative ways to provide
training. They want tax credits, direct government assistance,
educational leave and work sharing agreements. Like their
workers, they are not looking for handouts. They want the tools
which will enable them to invest in developing employee skills.
Investing in the workforce of Guelph-Wellington means
investing in our future.
The workplace is changing. Canada is looking to expand into
an ever competitive global market. As the Prime Minister and
Team Canada have shown us over the past few days, we are not
afraid of competing with the world's best. We are the world's
best. Business people in Guelph-Wellington and elsewhere in
Canada know they can do business anywhere in the world. They
need workers who are adaptable, flexible and willing to learn
new job skills.
We are talking about investment. Business leaders know that
smart investment leads to success. We must invest in our people
in order to compete, to expand, to grow, to be healthy. We must
encourage lifelong learning. Gone are the days where a worker
can be trained for a position of 30 or 40 years. We must build on
providing literacy training, encourage our young people to stay
in school and to prepare for the jobs that are available and
provide incentives for individuals and employers to invest in
continuous skills upgrading. Learning is a lifelong adventure.
Responding to the demands of the global marketplace means
keeping pace with changes in today's workplace. The
progressive business person in Guelph-Wellington knows that
for every dollar spent on training by Canadian businesses
American businesses spend twice as much. Japanese business
spends five times that and German business spends eight times
that. Without ongoing skills training we cannot survive.
This government is forging partnerships. Team Canada has
shown what working together can do for Canada.
Guelph-Wellington business people want to be partners with
their employees. Workers want their employers to be successful.
All want government to work. We know that investing in people
will result in a highly skilled and competitive workforce in
Canada. I am proud of the optimism of businesses in
Guelph-Wellington. They are looking ahead. They have
weathered a terrible storm.
Our workers do not want unemployment insurance or social
welfare. They want to work. They want to contribute in a
successful and expanding society. They want to give their
children and they want for themselves the skills necessary to
ensure economic prosperity. They are tired of facing layoffs and
work slowdowns. They want sustainable employment. They
want to be the best that they can be.
The United Nations has stated that Canada is the best place in
the world in which to live. Through continued partnerships
while fostering training, Canada will continue to be the best
place in the world to live.
Mr. Dick Harris (Prince George-Bulkley Valley, Ref.):
Mr. Speaker, I want to touch on a couple of points the hon.
member mentioned. I acknowledge that certainly people in
Canada want to work and people in Guelph-Wellington indeed
want to work. They want jobs. No one wants to be on welfare,
although that seems to be somewhat of an industry in the country
these days.
(1635 )
The hon. member touched on the fact that the United States,
Japan, Germany and one other country spend many more times
on worker training than does business in Canada. I do not doubt
that statistic for a moment but the fact is that by comparison the
cost of doing business in those countries is many times less than
it is in Canada.
The fact that probably our businesses are not spending an
equal amount of money on training programs is that they cannot
afford it. The taxation levels for small and medium sized
business in this country are many times higher than what it is in
the four countries the hon. member mentioned. The cost of
doing business in this country with taxation in all its forms,
property taxes, payroll taxes, is many times more than in other
countries.
7749
The fact is the other countries simply have more money to
spend on training programs. They do not have a $40 billion
deficit ratio to GDP that we have in Canada. They do not have a
$535 billion debt which when ratioed out to the GDP is almost
uncontrollable or we are going to have a terrible time making a
dent in it. They do not have the financial problems Canada has.
The problems that Canada has with its financial house is a
direct factor in the cost of doing business in this country
particularly for small and medium sized business which
invariably do not have the advantages the large
mega-businesses do. They struggle to a far greater extent. They
do not have the money to put into training programs.
There was a time in this country prior to a Liberal government
which started this deficit and debt spiral some 25 years ago,
when the cost of doing business made Canadian business
extremely competitive in the world market. Canadian business
was very profitable because we did not have these extreme
taxation levels and cost of doing business. Those times are long
gone.
Right now the biggest deterrent to training programs in this
country is that the businesses simply cannot afford it. If we did
not have the deficit and the debt, this country would be in fine
shape.
Mrs. Chamberlain: Mr. Speaker, the hon. member
mentioned that we cannot afford to spend money on training
programs. I would submit that we cannot afford not to spend
money on training programs. If we do not we will not have a
future in this country, quite clearly. There is no question about
that.
There is an issue on partnerships. He raised from my speech
the issue that other countries do develop and put far more into
their training than Canada does. Those are true statistics but
Canadian companies are now finally realizing that this is a very
important part of their survival too.
I spent this summer visiting the CEOs at many factories in
Guelph-Wellington. They realize they have made an error in
not bringing people along and not always at a great cost. Many
times they could have people on the floor doing things halfway
through a shift that they have not been thinking about doing.
They have not necessarily seen the new technology coming
down the pipe. I submit to the hon. member there are a lot of
things we can do better in that area. Our industries know that. I
encourage the hon. member to take some time to see this for
himself.
The member is quite right. Our businesses have a real problem
with some of the wages, CPP and other programs they have to
pay into. Our finance minister has continually said that one of
the things this government is committed to doing is that we will
meet our 3 per cent target. That will help us a lot.
(1640 )
Mr. Peter Milliken (Parliamentary Secretary to Leader of
the Government in the House of Commons, Lib.): Mr.
Speaker, I think you will find unanimous consent for the
following motion. I move:
That at 3 p.m. tomorrow the House shall revert to presenting reports from
committees.
The Deputy Speaker: Is there unanimous consent?
Some hon. members: Agreed.
(Motion agreed to.)
* * *
The House resumed consideration of the motion.
Mr. Alex Shepherd (Durham, Lib.): Mr. Speaker, it gives
me great pleasure to involve myself in the debate on the industry
committee report ``Taking Care of Small Business''. Indeed, I
worked many, many hours on that committee. I thank colleagues
from all parties for their co-operation.
One of the basics of that report was the examination of some
of this country's banking structures. I was pleased to take this a
bit further this week by accepting the invitation of the Royal
Bank to go through its executive headquarters in Toronto and
speak with the executive staff on how they are administering
their loan portfolios for small and medium size business. I think
we are getting a little better understanding of where the
problems lie but there is still much to be done.
A mere six years before the turn of the century is an ideal time
to consider whether we should reinvent a new industrial strategy
for Canada. The problem with Canada and Canadians is that we
are not aware of our own greatness. Biomedical research,
software development, telecommunications, and geomatic
engineering are only some of the areas in which Canada is a
recognized world leader.
The new economy will not be based on brawn but rather
brains. Also, small and efficient will be the watchwords as big
industrial structures come apart crumbling into decay. The
smokestacks will be silenced as Canada moves from infancy to
adulthood.
Nuala Beck in the recent book Shifting Gears: Thriving in the
New Economy refers to some of these changes. In British
Columbia more people are engaged in telecommunications than
in forestry. In Nova Scotia there are more people engaged in the
workforce in education than in the fishery, forestry and
construction industries put together.
7750
Small and medium sized businesses will be the engine of the
future economy. This engine will be fueled by knowledge and
driven by a new breed of entrepreneurs. They will be the
employers and the wealth creators of the 21st century. It is by
them that employment will be created and they will deliver new
consumer goods.
As a government we must redefine ourselves in light of these
new changes. We must get out of the way of this new engine lest
we be run over by it. But more important, we must restructure
government so that it can assist this emerging economy, so that
Canada's small and medium sized businesses can dare to be the
very best in the world.
How can this relationship between government and small and
medium sized business be strengthened to ensure Canada
reaches its full potential in the next century? I am pleased to see
that our government has undertaken a number of initiatives in
support of small and medium sized businesses. Over 30 per cent
of our gross domestic product is accounted for by trade.
Currently almost all of this is done by a mere handful of
companies. Clearly this is not good enough.
The Department of Foreign Affairs and International Trade
has undertaken along with our banks a robust venture to redefine
what skills our business people will need to attack foreign
markets. It ranges from aggressive training sessions, more
intuitive financing devices for export trade through the Export
Development Corporation and the Canadian Commercial
Corporation to development of a data bank of contracts and
highlights of emerging markets.
In addition we will have to restructure our foreign trade
missions. I have had some experience with this having been in
Beijing in the spring. I can say that some of the people in our
trade missions are not cognizant of some of the needs of small
business in an international environment. These people must
work hand in hand with business to ensure that Canadian
companies can make the leap to international traders.
(1645 )
I need only remind my colleagues of the great successes we
are hearing from the Team Canada mission now travelling in
Southeast Asia. As I mentioned, I had the opportunity of visiting
Beijing on a trade mission along with some of my parliamentary
colleagues in the spring. Unfortunately some of my Reform
colleagues did not bother to come along, but it was a very big
success. It was a trade mission of a lot of small and medium size
businesses basically from the Ontario area. We went to Beijing
and created new alliances.
I am happy to say that due to that process, their mayors and a
number of people from Weifang in China, with over 85 million
people, have signed an economic alliance agreement with the
township of Whitby in my riding. Many of our small and
medium size business today are trading with China. Some of our
small businesses have opened branches in Beijing. These are
the things we have to do.
The change is happening now. More employment has now
reached my riding of Durham. I can only say that we must
encourage more of this sort of development. I believe the
initiatives of the Department of Foreign Affairs and
International Trade will do just that.
I have spoken about the area of trade. We must also address
some of the needs of small and medium sized businesses as they
attempt to establish themselves in the domestic market. Often
government practices are a hindrance to them. High commercial
and business tax assessments, meddlesome provincial standards
and regulations, our own dreaded GST, as well as an
inordinately high level of taxation are only some of the
overwhelming obstacles faced by our business community.
The deficit hems us in as a government and does not give us
the affordability to pursue more aggressive policy. Indeed, by
being a heavy borrower governments have crowded out the
capital requirements of small business. In a way our best
commitment to small and medium size business will be deficit
control and reduction.
Current high interest rates and high taxation are choking off
business formation. To arrest this problem is a major
commitment to small and medium size business.
Having said this, I believe that there are things that
government can do better to achieve a greater degree of business
confidence. We should seriously consider bringing back a form
of income tax moratorium on capital invested in small and
medium size business. In other words, encourage capital
retention within the business sector by deferring capital gains
recognition to that date when the investor wants to enjoy the
fruits of his or her labour. This would allow more aggressive
capitalization of small and medium size businesses.
I have mentioned how we could change the taxation system.
We also need to reform how small and medium size businesses
get access to new capital. I note this was the basis of a report.
However, I think there are some other things that we could do.
Most small businesses will fail in the first few years of
operation. Often this is not because their product was faulty or
poorly marketed but because of insufficient capital.
The government has done much in this area. The Small
Businesses Loans Act, venture programs administered by the
Federal Business Development Bank, working ventures, and
even section 25 of the Unemployment Insurance Act are all good
initiatives to help small and medium size businesses but still
there is something missing.
What we need in this country is an aggressive, over the
counter equity market, one which provides relatively cheap
access to capital markets but also has the regulatory regime
7751
which can earn the respect of the general public. This is the focal
point of investing in ourselves. Canadians have all too often
avoided investment risk. This has worked against our potential
as a nation. This new and improved market would provide a
relatively easy trading system. I note in fact that something of
this nature already exists. It is called the Canadian dealer
network and is part of the Toronto Stock Exchange. Still, it is too
expensive to access and it must be made easier to access.
Finally, we need to believe in ourselves and our great
abilities. We need to see beyond tomorrow to what we could be.
Business itself will have to be more effective in networking,
seeking out solutions of excellence in everything we do. We
need to end some of our parochial attitudes which are holding us
back from being the best. We must learn to share with each other
so that Canadian products will be the best there is and so that the
21st century will truly be Canada's century.
(1650)
[Translation]
Mr. Bernard Deshaies (Abitibi, BQ): Mr. Speaker, it is a
pleasure to rise in the House today to speak to motion No. 16
standing in the name of the Secretary of State for Parliamentary
Affairs, and I quote:
That this House take note of the Second Report of the Standing Committee
on Industry (``Taking Care of Small Business'').
I should point out that an analysis of the recommendations of
this report and the dissenting report of the Bloc Quebecois to
this committee provided an opportunity to ask some important
questions about SMEs in general and SME funding in particular
which is largely the key to economic development in Quebec
and Canada.
I agree the report contains some much needed changes in the
way SMEs are financed, to raise them to the level of
productivity and competitiveness required as a result of
globalization. In my opinion, the number of SMEs should
continue to rise, and their production capacity and ability to
diversify should be improved, all of which will not be possible
unless SME financing helps them expand from a small to a
medium sized business and, if possible, to a very big company.
Unfortunately, according to the statistics, between 1978 and
1986 only 1 per cent of Canadian small businesses graduated to
the rank of medium-sized businesses, compared with 15 per
cent, over the same period, in the United States.
It is very important to find an explanation for the
unsatisfactory growth of our businesses, but in the short term,
for many regional businesses, financing is often the problem.
This report contains some positive reports concerning SMEs
and SME financing, but I feel that some recommendations lack
real substance and innovative spirit.
I would support the committee's recommendation that the
Federal Development Bank be confirmed in its role as
complementary lender to small and medium-sized businesses.
However, it must be understood that this role should be
redefined so as to avoid duplication and overlap, since all
provincial governments have their own government policies.
The Government of Quebec is no exception, with its new policy
for regionalizing development programs.
Instead of changing the name of the Federal Development
Bank, which would mean spending a lot of money with no direct
benefit, the federal government would be better advised to give
this agency a new philosophy, that is, let it act as a
complementary lender of venture capital to businesses, the role
formerly played by the Federal Office of Regional
Development, which has seen its mandate crumble as a result of
the absence of budget allocations.
While on the subject of funding and risk capital, I would like
to say a few words about the Small Business Loans Act my Bloc
Quebecois colleagues referred to in their dissenting report. I
would have liked the committee to show more vision, more
understanding in its consideration of small and medium sized
business funding. Small business loans are very popular tools
among small and medium sized businesses and essential ones
too, resolving a number of problems in terms of productivity,
market strategy, job creation, by making the necessary funds
available.
To be eligible to funds under the Small Businesses Loans Act,
SMEs must perform well in management and other areas
considered important. These are the conditions essential to their
success.
In the committee proceedings, we note that the Liberal
members of the committee completely disregard or do not
understand the first thing about the basic needs of Quebec and
Canadian entrepreneurs desperately seeking a way out of the
slump.
This government is proposing that small business groups be
divided up in categories based on economic priorities. The
Liberals want a new short range program to be put in place to
support small business working capital financing just for export
businesses.
(1655)
We can see once again that Liberal lobbyists have
successfully looked after their own interests at the expense of
other SMEs who also need financial assistance to increase their
productivity
7752
in order to become more competitive, and they too are
exporting.
Innovative ideas are often required. To boost the economic
growth in regions such as Abitibi-Témiscamingue, in my
riding like every other riding in the region, small businessmen
have to be able to rely on regional development funds created by
local investors, for local investments, with the input and/or
assistance of both levels of government naturally.
The report deals with similar ideas and I hope that they will be
considered by the ministers.
By establishing a regional fund, we could avoid unfortunate
situations like that of a woman who came to see me in my office
after she was refused a $15,000 bank loan for working capital
under the SBLA to start her business. The reasons given for the
refusal were her lack of experience and the risky nature of the
business, when she herself had already invested nearly $45,000
in equipment. This money had come from her family to help her
start her business and create jobs.
By cutting funds for small businesses, the banks prevent them
from investing and facing the globalization of the economy. One
may wonder whether the small-business programs benefit only
the banks, because they have rigid discretionary criteria for
funding small businesses, as in the case I just mentioned. They
only lend to low risk enterprises, although their mission should
be much broader. If these banks cannot do the job, then we
should find a government agency such as the Federal Business
Development Bank which could do it.
We should all know that if some of the committee's policies
were reflected in the government's next budget, small
businesses would unfortunately decline considerably, especially
in Quebec but also in the rest of Canada. Testimony heard by this
committee would seem to justify the Bloc Quebecois's
apprehensions.
It is harder and harder for some small businesses to obtain
loans because the present government favours those that export.
This shows beyond any doubt that the government has no
job-creation policy that applies to all small and medium-sized
businesses. It has not kept the promise that it made in its red
book to help all small and medium-sized businesses. It was
supposed to promote employment and its slogan was ``jobs,
jobs, jobs'', but the reality for many small businesses now
sounds more like ``bankruptcy, bankruptcy, bankruptcy''.
The policies of this government are disgusting. The Liberals
have the nerve to tell us they will create jobs when in fact they
provoke the closure of businesses which did not get the
financing they desperately needed, this after being told they
would get it. Without access to adequate capital, even the most
gifted managers and the best commercial strategies can fail.
I want to give an example, from my riding, where federal
support helped promote the development of a business. If the
government would only continue to provide this kind of support,
we would be in a position to create jobs instead of changing
policies. The company I am referring to is called Préci-Bois, in
the small village of Barraute. New technology would allow the
use of trees with a diameter of less than four inches to make
small wooden blades, which are sold and exported to the United
States.
The owner personally invested over $500,000, was able to
borrow one million dollars from a chartered bank but still had to
find $500,000 in risk capital, for a total of $2 million. The
Federal Office of Regional Development took eight months,
almost a year, to make a favourable decision, but after a lot of
representations and explanations federal officials probably
realized this was an excellent project. Consequently, more than
30 jobs will be created, which means that the same number of
people will leave the welfare or unemployment rolls.
This is a good example where, instead of having the
government spending money, jobs are being created for the
benefit of the whole country.
Unfortunately, many other projects did not get sufficient
funding. This government had promised financing sources to the
residents of these communities-I named one village, but
representatives from many other ones came to see me because
they have developed projects but will not have the necessary
funds to complete them-so that they would be able to
implement projects which enjoyed unanimous support in their
communities and which would have created new jobs.
(1700)
These people were willing to take the risk and to create
companies to diversify local economies. By changing its
policies, the government broke its promises without offering
any alternative financing. For its part, the Bloc Quebecois
wishes to broaden the application of the Small Business Loans
Act to include businesses' working capital for all SMEs,
because this often makes the difference between success and
failure for a given project, whether for export or for the local
market.
To implement this financing of SMEs' working capital, the
Bloc proposes concrete and realistic solutions in its dissenting
report, Appendix F of the report. I agree, of course, that the
government should gauge all suggestions in the context of fiscal
responsibility, and weigh the costs and benefits of all loan
applications. SMEs must assume part of the technical
responsibilities, that is to say they should have well structured,
profitable and sustainable plans.
Clearly, if the government accepts the suggestion of the Bloc
Quebecois or any other positive suggestion on small business
capital financing, there will be social and economic benefits, in
particular in remote areas like my riding of Abitibi, in Quebec.
In 1988, the FBDB, a major agent of development in our
regions, gave more than $8.9 million to 86 manufacturing
projects in Abitibi-Témiscamingue. The money was allocated
under the Enterprise Development Program-Industrial, the
EDP-I. This program allowed a number of businesses to acquire
equipment and to upgrade their facilities, thereby improving
7753
their productivity and preparing themselves for an economic
recovery.
I could mention a number of examples of companies who
benefited from this financing and have, today, the means to
export wood byproducts from our area. Presently, with a budget
of $ 1.5 million last year instead of eight million which could
drop to zero, FORD-Q is targetting small and medium-sized
businesses with, as I mentioned before, a strong export
potential, which is not bad per se, but other small and
medium-sized businesses in the tourism industry, for instance,
should not be neglected. More importantly, new services
provided by FORD-Q will no longer be in terms of investment
but in terms of technical support, that is to say feasibility studies
review and so on.
With such a small budget, it is going to be difficult for small
and medium sized businesses in the Abitibi area to find funding
in order to diversify their production since they depend mainly
on mining and forestry as a source of funds for regional
development. It is urgent to establish secondary industries in the
region, which will result in more jobs, lower unemployment
insurance expenses and, therefore, lower government
expenditures and higher revenues.
The facts speak for themselves. Given the new orientation, the
$1.6 million investment by FORD-Q in a tourism project in
Val-d'Or will be the last one of this size. I do hope that with
respect to the recommendations of the Standing Committee on
Industry, budgets will be sufficient to stimulate all small and
medium-sized businesses, without any discrimination.
To conclude, I would like to quote Mr. Alain Garneau,
president of the Northwest Quebec prospectors association,
Val-d'Or sector. It should be noted that, in our community,
mining is one of the most important economic sectors. He said:
``-most jobs are created by small and medium-sized
businesses. They train most of the people employed in their own
sector. They are economically and socially extremely important,
a fact which is unfortunately too often forgotten by our
governments-''.
The Deputy Speaker: 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 Gaspé-Fisheries; the hon. member for Calgary
Southeast-CRTC; the hon. member for Davenport-Law of the
Sea.
[English]
Mrs. Terrana: Mr. Speaker, apparently one of my colleagues
in the opposition would like to speak first. He has an emergency.
I would not mind letting him go first.
(1705 )
The Deputy Speaker: A most courteous act by one of our
members in favour of the hon. member for Prince
George-Bulkley Valley. Then we will switch back.
Mr. Dick Harris (Prince George-Bulkley Valley, Ref.):
Mr. Speaker, I do wish to extend my appreciation to the hon.
member for letting me speak. I am going to split my time with
the hon. member for Fraser Valley West. I will take 10 minutes.
We are talking about small business today. That is something
that I am not totally unfamiliar with, having spent a number of
years in small business, most of my life actually. I have come
face to face with almost every single problem that small
business today and over the last 25 or 30 years could ever face. I
am happy to say that I was able to meet those challenges in most
cases.
Although I agree with the report from the committee in many
respects, I think it is important today that I spend some time
talking about the difficulties and the attitudes of small business
if for no other reason than to try and put it again in front of the
government and again in front of the banking industry, if it
happens to be listening today, so that some of the challenges that
small businesses face is driven home to them as well the
important role that small business plays in the economy of
Canada.
Most people probably believe that it is Esso, IBM, General
Motors and the other mega companies that we all so familiar
with that are the engine that drives the economy in this country.
These same people would probably be of the opinion that it is
these large corporations, these mega companies, that employ the
majority of the people in this country. This is truly not the case.
In fact the opinion that these mega companies drive the
economy and hire the most people in the country is very far
removed from reality.
The truth is that the economic health of this country depends
on small business. It is the small businesses with less than 20
employees that create new jobs, create new growth in the
country, and create growth in the economy and opportunities for
Canadian workers.
Given the importance of the role that small business plays in
the economy of this country it is surprising, as highlighted in the
report from the Standing Committee on Industry, to see again
the numerous obstacles and challenges that small business must
continue to deal with in order to simply do business in this
country, obstacles established by government and by the
banking industry in this country.
7754
I hope today that the banking community and the government
will take note of what is being said here today as well as the
contents of the report in the interest of the health and welfare of
the country, the survival and growth of small business in this
country, and the future well-being of Canada.
In 1990 small business employed some 4.2 million people in
Canada. That is out of a total of 12 million people who are
working in this country. Small business was responsible for 80
per cent of all new jobs created between 1977 and 1987 and it
continues. Small business continues to be the lifeblood of the
Canadian economy.
The government is truly aware of these numbers. It has
displayed its understanding of the importance of the role that
small business plays in the country. As a matter of fact, the red
ink book devotes quite a few pages to extolling the virtues of
small business in Canada and some of the challenges and
impediments that small business faces.
(1710 )
The budget promised a small business review, the purpose of
which would be to determine how government can help these
smaller firms succeed. It recognized in the budget that the tax
burden, paper burden, lack of financing and lack of access to
government information and programs were all issues that
needed to be addressed by this government in relation to small
business.
During the G-7 in Naples on July 9 all countries agreed that it
was important to focus on removing the challenges and the
impediments to small and medium sized business. It was
important to the lifeblood of the economies of all the countries
that participated in that conference.
In short, the government is certainly well aware of the
importance of small business and the various difficulties it
encounters. The government knows about small business
according to the report from the industry committee. It is
reminded of it every night as well during the required reading of
the red ink book and is reminded of small business importance
when attending international economic conferences.
Beyond trips to Naples, beyond the red ink book rhetoric,
beyond the issuance of this report, what has the government
done to assist this vital sector of the economy? We have had lots
of talk, lots of words and lots of promises. In fact, what has been
accomplished in the year since this government took office to
help small business is almost absolutely nothing.
I spoke earlier about some of the things the government could
do to encourage the banking industry, the big six that controls
the banking community in this country. They control all the
financing for small business. I spoke of some things they can do.
Make no mistake about it, until the government puts a hammer
to the heads of the big six that control all the money and tells
them they are going to have to start paying attention to small
business in a real way, nothing is going to happen in the area of
financing for small business.
That is one thing the government can do. It does not have to
wait for two or three years. It can do it almost immediately. It is
the government. It controls the regulations that govern the
banking industry in Canada. That is something it can do right
away.
In the government's last budget it created another impediment
when it increased the taxes on all medium sized business that
had at least $15 million in capital. We are not talking about
small business in this group, but there are many small
businesses that benefit from medium sized businesses having
this kind of capital and this kind of revenue. It increased the
taxes on that particular sector of medium sized business.
Now the Minister of Finance in his new work entitled ``A new
framework for economic policy'' is of the opinion, and this is
surprising, that income taxes and payroll taxes distort economic
behaviour and stunt economic growth.
All he had to do was walk downtown and talk to a few small
businesses and he would have got this in a moment without
having to spend a lot of time pondering it. It is not a trade secret
in the small business community that taxes hurt.
Nowhere are taxes more abundant than on small and medium
sized businesses. This is the major deterrent to economic growth
of small businesses and expansion and job creation. They have
income tax, payroll tax, capital tax, sales tax, property tax, and
who knows what other taxes.
If we take the ratio of taxes levied on a business in relation to
the income of the business we find that small businesses are
saddled with 30 per cent more taxes in comparison with larger
firms. Payroll and local taxes hit small businesses particularly
hard. They carry up to 44 per cent of the tax burden in this area
while the megafirms carry some 28 per cent or less.
(1715 )
I just want to sum up now by saying that I stated in this House
before that the biggest thing this government can do to help
private sector job creation, to help private sector growth in the
economy is get out of the pockets of business. In particular, that
applies to small and medium size business. They are the
lifeblood of the Canadian economy.
That is the area that the Minister of Finance and the Minister
of Industry can look at if they want the economy to grow. That is
the area they should be looking at if they want to reach that
magical 3 per cent deficit to GDP. That is the area they can look
at to help small and medium size businesses. One place they
7755
have to concentrate is lowering the tax levels and getting on the
backs of the big financial institutions.
Mr. David Iftody (Provencher, Lib.): Mr. Speaker, I am
pleased to rise in the House today to debate and discuss the
report of the Standing Committee on Industry on small business,
taking care of business.
All members on that committee worked very hard to produce
what has been called by the Financial Post a mini task force
report because of its depth. Considerable thought was given to
the precise nature of the recommendations. It is heartening to
hear helpful suggestions from members on the other side of the
House with respect to the contents of the report.
I would like to mention a couple of things with respect to what
is happening in this country in terms of job growth and
economic growth, let us say since January. We can use that as a
timeframe. There were 327,000 new jobs created, most of those
in the manufacturing sector which, as the House will know, are
long term jobs. Only 11,000 of those are considered part time
jobs.
I would like to share with members on the other side of the
House that the most recent economic indicators on a number of
different fronts suggest that business confidence is at a record
high, profits are up, expectations for hiring are also on the rise.
The retail industry in this country is expecting the greatest
volume of retail sales this Christmas. The reason is that
consumers are now buying cars, microwaves and refrigerators
and so on, what are considered the soft market items or the
confidence items in the economy.
This government has set a framework to give confidence to
small businesses that are now producing the jobs, a confidence
that we need in this country.
I would like to speak briefly about my riding in Manitoba, the
rural riding of Provencher, and the importance of small business
to rural Manitobans and to rural people across Canada. Because
of the farming communities I represent which provide the
lifeblood of small business and economic activity in rural areas,
a number of small businesses have sprung up around those. One
of the larger communities I represent, Steinbach, has done
tremendous things working closely with the farm community
and has developed a number of leading Canadian companies,
taking off from basic family businesses. Small business is an
important element in rural Canada and something we ought to
continue to support.
Earlier a member from the Reform Party mentioned his
concerns about the use by small business of the instrument
called western economic development. I believe it was a
member from Edmonton. I would remind him and the House
about a number of projects that were funded in Alberta, almost
800 since 1988 until 1992 or thereabouts. In Alberta 800
projects in Alberta were funded under the western economic
development program, a number of them in Edmonton.
(1720 )
I noticed one recently with great interest with the Edmonton
Chamber of Commerce where it received about $17,500 under
western economic diversification to undertake a symposium
with business people in Alberta to seek ways it might access
Asian Pacific markets and assist its small businesses. I do
believe that we are making a contribution, a very valuable one,
even in Alberta.
Let me speak briefly about one of the other questions that was
raised here earlier with respect to women in small business. In
my riding of Provencher I have had a great number of calls and
interest by women starting small businesses. We have to give
this idea considerable thought.
Between 1990 and 1994 during the recession the majority of
companies that were created were what we call
micro-businesses. In other words, they are not really small
businesses defined as less than 50 employees but those creating
two, three, or maybe five or six jobs in a small community. We
found that women, working usually out of their homes, joining
with some other partners, are starting these small cottage
industries that are moving toward greater possibilities in terms
of growth.
We have seen in the most difficult times the contribution that
they have made to the Canadian economy. I was very pleased
therefore when my colleague, the hon. Minister of Human
Resources Development, announced through western
diversification the women's business network instrument which
we believe is going to be very helpful in terms of assisting
women, and I hope rural women in western Canada, to access
and network resources.
I say this because it comes back to one of the principal
elements of this report. Canadians, small business people in
particular and I believe even more so women, having faced these
difficulties are having difficulty getting access to capital. We
believe that through a number of these government programs,
through the implementation of the recommendations in this
report, we are going to be able to provide those kinds of
financial tools to individuals and small business people so that
they can get these companies up and running.
With respect to the banks I know it has been debated
extensively here today. The media has given this topic a great
deal of coverage over the last few months. This is not an exercise
in bank bashing. I believe all members of Parliament who were
sitting on the committee approached it with integrity and good
faith and were honestly seeking solutions. We took it with great
interest and respect when the banks said to us that they did not
want to be regulated. They wanted competition and they were
not afraid of competition.
7756
I found it quite surprising that when we announced the
suggestion of a schedule III bank to provide more competition
outside of the larger cities in the rural areas the Canadian
Banker's Association said that it would vigorously oppose these
kinds of measures, and its concern about depositors'
investments.
I hasten to remind those who perhaps do not know when we
are talking about small businesses that they create 85 per cent or
90 per cent of the jobs in the country. If the banks are concerned
about depositors' money, who is it on the 15th and 30th of every
month who go to the bank with they pay cheques? Who are the
depositors? It does not take a lot of thinking to quickly conclude
that those depositors the banks are trying to protect are people
working for small businesses in this country.
We have to have a closer look at that. We are willing to work
with the banks in a very constructive way to address the needs of
small business. It is very disconcerting to hear that they are
criticizing some of the elements of the report.
One of the things that I wanted to mention in my final minute
is the most recent deal in China with the CANDU reactors
involving some $3.6 billion and the export of high tech and
value added jobs in this country. I wish to advise the House that
the majority of those contracts once successful are going to go to
hundreds of high tech companies that will export in terms of
services and direct sales their capabilities to this China deal.
I thank the government and the Prime Minister for taking
leadership in that role, for undertaking those memorandums of
understanding on those deals. I believe it is going to help small
business all over Canada.
(1725 )
Mr. Randy White (Fraser Valley West, Ref.): Mr. Speaker,
it is a pleasure to talk about taking care of small business.
One of the things I want to concentrate on here in my 10
minutes in speaking about what I think small business needs in
this country is government involvement in small business. I am
going to select for my example ACOA, the Atlantic Canada
Opportunities Agency, which the government is up to its arm
pits in donations, grants and subsidies on.
We all know there has been a shift in political ideals in recent
years. The government now talks about a fiscally responsible
way of operating business, how to cut dollars and how to operate
efficiently which is a good change for this government.
However, I think when you look at where this government has
come from from a sociological point of view, you only have to
look at what Michael Thomas once said, just because you have
been bad at socialism doesn't mean you will be good at
capitalism. That fits well in my mind with this particular
government because I do not think this government has a real
good idea of what capitalism really is. I am going to demonstrate
that by talking about ACOA.
The Business Council of British Columbia has recently issued
a report on cutting the deficit. The business council gave all
kinds of suggestions on how the government might be able to do
that. One of the suggestions it made was to phase out all three
regional development agencies.
I know there was some talk here earlier about regional
economic development programs but it is relative today to talk
about that in the line with small business. The relevance is we
have our hands into small business in two ways. We tax them to
death and we create a terrible inequity between small business.
Why do we do that? On the one hand we give some grants and
subsidies. Note that it is non-taxable, just a gift. It is like
winning the Lotto 6/49. The competitor down the street has to
borrow money to try to get some kind of capital back into his
business or if they want expansion they have to borrow money.
ACOA comes along in many cases in Atlantic Canada and just
issues a cheque.
I have done a lot of talking to some of the recipients of ACOA
grants in Atlantic Canada. We have also had some discussions
with ACOA. I want to give members an idea of some of the
grants that come out of this operation, not to mention the fact
that the management of ACOA is well known for its spending
habits. I really do not have to get into that because that is known
all across Canada.
Let us just take a look at some of the grants that are given to
small business in Atlantic Canada. For instance, Cynthia Billard
in Newfoundland received $37,105 to construct two
housekeeping units. That is a gift from the taxpayers of this
country. I somehow think that if somebody came knocking at my
door in Fraser Valley West, British Columbia and asked if I
would like to give Cynthia Billard some money toward building
two housekeeping units out of my taxes, my answer would be no.
You do what the other people do when they want to expand on
their housekeeping units. They borrow money or they save their
money through profits from using their other units and they
allow the expansion that way. We do not give money to some and
not to others. It creates a terrible imbalance in small business.
I will run through a lot more of these grants. This government
is quite well known for giving grants around the country.
(1730 )
Let's take Mr. Stedman Brophy. He advertised in hunting
magazines and attended trade shows. He was given $5,000.
Congratulations. They have given $5,000 of taxpayers' money
away. How did that benefit the other people in the same line of
business? It does not.
Mr. Mills (Broadview-Greenwood): Did the hon. member
ask him?
7757
Mr. White (Fraser Valley West): The question I am asked by
one of the Liberal members is: did I ask him. I really do not have
to ask him. He is not going to complain. This individual is not
going to complain. He got $5,000 tax free from this generous
Liberal government.
What about the people in similar industries down the street
who did not get any of that money? They went to the bank and
borrowed money, or saved money to produce a similar exercise.
Is it the idea of this Liberal government to perhaps try to cover
everybody in Atlantic Canada that is in business and try to get
everybody at the trough all the way along the line.
Mr. Mifflin: Did you tell them that when you were
campaigning in St. John's West?
Mr. White (Fraser Valley West): Mr. Speaker, let us look at a
couple more. I invite the Liberal members here and all the
people watching and listening to see if they would spend their
tax money this way.
Mr. Mills (Broadview-Greenwood): Irrelevant.
Mr. White (Fraser Valley West): Let's talk about Ducky's
Homebrew in Newfoundland that got $15,816 tax free, I might
add with no pay back, risk free, to establish a facility to produce
home brew beer kits.
Mr. Mills (Broadview-Greenwood): What is wrong with
that?
Mr. White (Fraser Valley West): Again, one of the Liberal
members asks: ``What is wrong?'' What is wrong is this. In my
community one of these home brew small businesses just started
up as a matter of fact. The fellow saved his money, he was telling
me, for something like 10 years in another business. He sold that
one off. Now he is trying to establish another one. He did not get
Lotto 649-type grants from the government. He did not get
money from the taxpayer. He saved his money and he borrowed
some more money. What is wrong with that?
Let's go to some more. Gerald's Machine Shop Limited, to
purchase a computerized milling machine received $70,552.
What about the other machine shops? What will be done for the
other machine shops? How does small business get competitive
in this world when one machine shop gets a grant, not repayable,
and not the other? How does small business survive doing that?
How does it stay competitive? The government has to get out of
the business of handing those cash cows out to some and not
others.
Let's talk about some other folks who want to establish a
restaurant and bakery that got $48,000. Another person in
Newfoundland got $63,560 to upgrade hotel rooms and
housekeeping units
Mr. Mills (Broadview-Greenwood): Why is the member
picking on Newfoundland?
Mr. White (Fraser Valley West): The question was: why am
I picking on Newfoundland. I am not. I am going to go through
all of the provinces of Atlantic Canada. I am going to go through
all of them.
Why would we upgrade hotel rooms and housekeeping units
for one person and not all the others?
Let's talk about some bigger bucks, about Maynard Limited in
Newfoundland. They received $363,000 to expand existing
facilities by adding a dining room. Is that the right thing to do?
Is it fair to all the other organizations in the province, in the
country for that matter, who want to expand their dining rooms?
What kind of mentality is this? How much money did we give to
Newfoundlanders? There were 344 contracts in Newfoundland.
We gave $19,906,166 taxpayer dollars to some and not to others.
Justify to me the logic in that.
Mr. Mills (Broadview-Greenwood): They are all
businesses.
Mr. Harper (Calgary West): Check what party they donated
to.
Mr. White (Fraser Valley West): The suggestion is to check
the party to which they donated. I am sure there are a lot of
political hacks because we know this party likes their patronage
so that would be obvious.
Let's skip Newfoundland then and go to P.E.I. In P.E.I.
Broadview Properties Incorporated got to modernize their motel
by upgrading furniture and equipment, et cetera, for $74,000.
(1735)
Members opposite do not like what they hear. They do not like
the fact that we are talking about taking care of business. The
way the government takes care of business and creates equality
in business is to give tax free money to some and not to others.
The government's problem is that it has no idea how to be
competitive. Competition to this government means giving to
some and not to others. It is who you know.
In Nova Scotia 559 contracts were issued since November 4,
1993 for $27,721,000 to some and not to others. In New
Brunswick, 617 contracts for $35 million were issued.
How is equity created between competing small businesses by
giving to some and not to others? Your book may say a lot. It
does say a lot. There are positive things in the book but you do
not have what it takes to be capitalists.
Mr. Fred Mifflin (Parliamentary Secretary to Minister of
National Defence and Minister of Veterans Affairs, Lib.):
Mr. Speaker, I was listening very intently to the debate on this
excellent report. Being on House duty I was listening in the
lobby with great interest. I was very impressed with the quality
of the speeches and decided to come into the House and hear
them firsthand.
7758
I must say I felt a certain amount of disappointment when I
arrived because all of a sudden the presentations stopped being
about this excellent report. I am sitting here in my seat and I
cannot really believe what I am hearing. A responsible member
of Parliament is getting up and complaining about a system that
supports Atlantic Canada and he states that the people from his
area would not support it.
I have a comment and a question. I am very seldom partisan
but I have to say I find it very difficult to understand how the
hon. member intends to go to Newfoundland after that speech to
campaign on his support for ACOA and for regional
development in Newfoundland. I suggest he frame this speech
and turn around in reverse and never show it to anybody when he
goes down looking for votes in Newfoundland.
He is suggesting that ACOA is made up of a group of
imbeciles that just willy-nilly give out money to some
businesses and not to others. He is totally wrong. I am telling
him that the vice-president of ACOA, Gordon Slade, happens to
be one of the finest civil servants in the country. He is a very
responsible person. He is very selective in what he does. When
there is competition the ACOA grant is not given.
My comment to the individual is that ACOA management
does not work that way. It is much more responsible, much more
selective.
My question to him is: What is his alternative? What would he
rather do?
Mr. White (Fraser Valley West): I just love it when they
sanctimoniously get up on the other side, Mr. Speaker. They do
not like to hear the truth.
The comment was that Gordon Slade is selective-
Mr. Mifflin: On a point of order, Mr. Speaker, is
sanctimonious a parliamentary word?
The Deputy Speaker: With respect, there is a dictionary on
the table. I think if that word is not a parliamentary word then I
do not know what word would be parliamentary.
Mr. White (Fraser Valley West): Yes, I think it has more
than eight characters in it, Mr. Speaker.
The comment was that Gordon Slade is selective in the grants
that come out of ACOA. I would suggest that is very likely the
truth of the matter. That is the problem.
(1740 )
It does not take a brain surgeon to go through any list to see
that the selection of the grants in ACOA are made on an
inequitable basis. There are all kinds of similar industries in
Atlantic Canada. And not just in Atlantic Canada, but in
Ontario, in western Canada. They do not get money although
taxpayers right across the country pays into it.
Where does the government get the right to select the
taxpayers' money and pay it to whomever it wants on its basis?
It is selective all right. It is a selective procedure but it is unfair
to all those who do not get it. The answer is to get out of regional
development grants, get out of ACOA.
Mrs. Anna Terrana (Vancouver East, Lib.): Mr. Speaker,
first of all I would like to say that the Liberal Party was voted
into government. That is where we get our strength to do what
we are doing and also get back to being a little more positive.
[Translation]
I am pleased to rise in this House today to speak to the motion
on small business. My riding of Vancouver East contains many
small businesses. Our proximity to the Asia-Pacific region
makes us major players in negotiations with Asia and South
America.
Team Canada's trip to the Orient led by the Right Hon. Prime
Minister generated a great deal of interest and enthusiasm.
Small businesses do not have the resources required to negotiate
directly with China but, with governmental assistance, they can
create many jobs for Canada, as they have done for several
years.
Last May, I had the privilege of participating in a trade
mission to Beijing together with over 100 small and
medium-sized business owners. I learned a lot during this trip; I
realized in particular that small and medium sized businesses
cannot operate alone. They need help. Canada has much to offer
to the world in terms of skills and resources, but we must sell our
potential. Trips to foreign countries are extremely important to
ensure our country's well-being and to let the world know all
that Canada has to offer, including solid, honest and capable
business people. In short, we must learn to become more
aggressive.
[English]
Canada is a trading nation. The challenge is to transfer
Canada from a nation dependent on trade into a true trading
nation with a much larger role being played by small business.
Having said that, I would like to discuss the export sector of
our country. Facing global competition has become the sine qua
non of any serious business plan. The best way to find out if your
company is truly competitive is to tackle the export challenge.
The arithmetic is simple. In the global market for many niche
products and services, Canada often accounts for only 1 per cent
or so of global consumption. Companies that do not export are
often ignoring literally 99 per cent of their potential customers.
The process of exporting successfully though is somewhat
difficult, particularly for small companies who have never even
dreamed they would have to enter global markets. The vast
majority of companies has to take to exporting one step at a
7759
time, pausing at each step to seek advice and information about
what lies ahead.
The owners of small businesses always emphasize that they
are in the market for information about market opportunities and
how to exploit them. Canada's trade commissioners can help to
achieve this goal. The trade commissioner service has 100 years
of experience in opening doors to foreign markets. It knows the
ropes and can help exporters deal with the challenges of
complex foreign environments.
The government is in the business of offering all kinds of
guidance to exporters, particularly to the small and medium
sized companies that need help most.
For example, the focus of Canada's program in support of
fairs and missions has shifted to smaller businesses. Then there
are the programs to provide hands-on training to new exporters
to the United States border states, Mexico and Europe.
(1745 )
WIN Exports, the Department of Foreign Affairs and
International Trade's electronic databank of Canadian firms
capable of taking on export challenges, as well as its market
intelligence and information program, is also being enhanced to
better meet the needs of small businesses seeking niche markets
worldwide.
The efforts of the Department of Foreign Affairs and
International Trade are to assist exporters start right at the
beginning, when the decision to export is first being examined
by entrepreneurs.
To that end government officials work closely with the Forum
for International Trade Training. The Forum for International
Trade Training philosophy is that to compete successfully in
world markets, a company that wants to export has to act like a
long distance runner who trains for a marathon. To help out, the
Forum for International Trade Training provides a wide range of
services which can be customized to the skill and experience
levels of participants. This year the program is operating in 30
community colleges across Canada with some 1,000 students
registered.
FITT is a major undertaking, patterned after the
government-business training vehicles that have long been in
operation in Germany and Japan. As such, FITT has received
federal and provincial government funding along with the
support of business associations, including the Canadian
Chamber of Commerce, the Canadian Exporters Association
and the Canadian Manufacturers' Association.
As significant as these developments are, we can still do
better. We cannot rest on our laurels.
Over the last months the Minister for International Trade has
been listening to what Canadians have had to say through
meetings with small and medium enterprises across Canada as
well as a number of other venues. The message conveyed was
consistent and clear; do less but do what you already do better.
Government is being told that there are too many programs
being run by too many players.
In response to demands by the private sector, our government
has already taken some preliminary steps which will benefit the
business community as a whole but, more important, will also
benefit small business.
For example, because of their size, small businesses often do
not have the resources to find international trade leads.
Accordingly, we are undertaking a number of improvements to
the way we collect and disseminate market intelligence and
market information. We have put into place an electronic
bulletin board service that allows exporters access to the latest
international market information by a personal computer and a
modem.
We are also developing a market intelligence messaging
system for broadcast faxing of trade opportunities.
Furthermore, small businesses often complain about the
plethora of government programs and are confused by what
different levels of government are responsible for when it comes
to international trade. This government is therefore undertaking
a second set of measures to provide greater cohesion and focus
to the support role played by governments.
There is a need for better co-ordination of international
business development activity among both federal departments
and the provinces.
Accordingly, this year's International Trade Business Plan
will include the input and international business activities of all
provinces, as well as 18 federal departments and agencies that
are already part of the process.
In addition, in conjunction with the provinces and a number of
federal government departments, this government is
undertaking a new initiative called Trade Team Canada. We are
looking to optimize services to clients by co-ordinating the
delivery of international business development activities among
various levels of government. We intend to move ahead
promptly by setting up pilot projects in co-operation with those
provinces that have already shown an interest in the idea.
In conclusion, the initiatives that I have been describing are
based on a co-operative approach of the kind we need to
mobilize Canada's export potential and in particular the
potential of our small and medium sized businesses.
Our government is making a conscious effort to consult
extensively with our clients. We promised that and we are doing
that. I do not think we should just go to our next door neighbours
to consult but we should call all of Canada to consult with us and
tell us what they want.
7760
Our government is making a conscious effort to consult
extensively with our clients, the people of Canada who run our
small businesses. I wish to assure the House that we will
continue to seek ways to work together with the business
community so it can meet the challenges and opportunities of an
expanding world market. We will not stop trying until the world
beats a path to the door of Canadian small and medium sized
businesses.
(1750)
Mr. John Williams (St. Albert, Ref.): Mr. Speaker, I listened
intently to the previous speaker's great commendations about
the government's role in helping small business. One thing that
strikes me as being rather opposite to the whole idea of
government trying to help small business is the fact that the
national debt accounts for over $38,000 for every taxpayer in
this country. Of course small business people are taxpayers. Not
only are they taxpayers for themselves but they create
employment that generates all other kinds of taxpayers as well.
I think about how small business has to labour under the heavy
taxation caused by the national debt. This government has
continued to increase the national debt, to increase the amount
of burden that is being put on every taxpayer, including small
business. How would the member expect these business people
to compete in the international marketplace as she is saying they
should, could and will when in fact the best thing that could
happen to small business would be if the federal government
were to reduce or eliminate the deficit and take the cost of this
overburdening national debt off the backs of small business?
What better place could the member suggest that we start after
listening to the member for Fraser Valley West who said that this
government seems to not just pick winners and losers but to pick
individual people and say: ``Here is some money that is tax
free''. He quoted all kinds of statistics and actual numbers about
individual people or businesses getting specific amounts of
money, $300,000 here, $75,000 there and so on.
If the previous speaker is serious about this government
helping all small businesses, would she recommend that her
party and the government that she supports get out of this
selective subsidization and grants to small businesses in various
parts of the country in order to reduce the overburden on small
businesses and allow them to complete?
Mrs. Terrana: Mr. Speaker, first of all I want to remind my
hon. colleague that we were elected to do what we are doing, to
create an atmosphere, and not to cut our deficit in three years or
our debt in five. We were elected to do what we are doing.
Second, the approach is very simplistic. We have been in
government for one year. We have done a lot of things. We listen
to people. They tell us what we should do. We have been hearing
them. We listened and we heard.
We are trying to put into place what we have heard. In the
meantime we are taking care of the deficit as we promised.
Mr. Werner Schmidt (Okanagan Centre, Ref.): Mr.
Speaker, I would like to ask the hon. member who just spoke just
exactly what would be the manner in which business could
actually get into a true competitive environment without
government interference so that we would not have all this
subsidization, so that indeed business could compete in its own
right and so that it could do the kinds of things that business was
intended to do without subsidization and interference by
government to give advantage to some business over and against
another business.
Mrs. Terrana: Mr. Speaker, I went to some of the hearings.
Of course, there are those people who say: ``Don't give any
subsidies''. Some people say: ``We need the subsidies''.
We will slowly get there. Canada is a big country with a few
people and a lot of regional disparities. We eventually will get
there. We will eventually find a way to let businesses prosper on
their own. There are more and more doing that. I am hopeful. I
am a positive person.
Mr. Leon E. Benoit (Vegreville, Ref.): Mr. Speaker, the
member in answering a question by my colleague commented
that what he is suggesting, that government not subsidize
business, is simplistic. If indeed government or civil servants
are trying to pick winners, trying to determine how they are
going to direct subsidies when there are many people competing
in the same business, how are they going to wisely choose the
businesses to give money to, if that is not being simplistic?
(1755)
Mrs. Terrana: Mr. Speaker, this has been the system until
now. Of course, as I said, we are looking into it and we are trying
to get rid of it.
We have to remember the disparities in this country. We have
to create some kind of an atmosphere all over Canada that brings
in the money and the jobs that are necessary to survive. This has
been there all along and it is something that we have to cure.
Mr. Gordon Kirkby (Prince Albert-Churchill River,
Lib.): Mr. Speaker, I am pleased to address this motion to take
note of the second report of the Standing Committee on Industry
entitled ``Taking Care of Small Business''.
The committee report contains a thoughtful analysis of the
financing problems small businesses face and provides a series
of extensive and helpful recommendations on the financing
issue. The committee is to be congratulated for its hard work and
its excellent report.
7761
In a similar vein, I would like to formally acknowledge the
work of the federal Ontario Liberal caucus task force which has
also made valuable recommendations on financing for small
businesses.
All members of this House are aware of the great importance
of small business to the Canadian economy. In fact the
government is carrying out a wide ranging small business policy
review of which the report will form a very important and
integral part.
However, I am particularly interested in the recommendations
as they relate to the growth of knowledge based, high tech firms.
Both these reports have suggested ways in which the banks
could better respond to the financing needs of small and medium
size businesses. It is encouraging, as both reports have pointed
out. Canada's banks themselves are also aware of the need to do
more to assist in the development, growth and stability of
Canada's small businesses.
In today's business climate, banking needs are evolving
rapidly as are the demands on business itself. The pace of
technological change is accelerating while the product cycles
are shortening. Flexibility and capacity to adapt and respond
quickly to changing market conditions are more important than
ever before. These are some of the things that small businesses
tend to do best.
It is encouraging to see the beginnings of change in the
banking culture. As important as it is to match banking practices
with the demands of today's marketplace, that is only one piece
of the puzzle. If any one single area is critical to the success of
Canadian business in general and small and medium size
businesses in particular, it is technology.
In one sense, technology is an investment issue for many
small firms since access to financing is often required to be able
to utilize technology. Over and above financing considerations
however, technology itself is key to the ability of small
businesses to compete and thrive in the global marketplace. The
whole area of technology presents a critical challenge to
Canadian small businesses. For the Canadian economy to
prosper this is a challenge we must meet.
Small businesses created 87 per cent of all new jobs in the
decade from 1979 to 1989. In the first six months of this year
small businesses have created over 80 per cent of the net new
jobs created in Canada. Since last year's election this
government has presided over an economy that has created in
excess of 320,000 new jobs. This is good news for all Canadians.
Yet, there are specific areas where the performance of
Canadian small business could improve and innovation,
research and development and the use of technology are among
them. Canadian companies, especially smaller firms, fall behind
their foreign counterparts in a wide range of industries when it
comes to protecting advancements in a number of technologies
important to Canada. Among the OECD countries, Canada's
share of international patents is lower than the population would
warrant. Many small businesses are slow to innovate or to apply
technology to improve competitiveness. Small businesses may
lack the time or resources to become well informed about
technological change or its implications for what they do.
(1800)
They might not even recognize that solving a particular
problem or taking the advantage of a market opportunity might
depend on technology. Too few small businesses have the
expertise or the capacity to absorb the ideas in technology that
can mean success if adopted or failure if neglected.
Businesses increasingly compete on their abilities to innovate
in product development, marketing production, distribution,
after sales service and internal administration. A rapidly
changing innovative business environment helps create jobs by
attracting and retaining international investment.
The government is well aware of the special problems that
small businesses face when it comes to technology and is
committed to helping business resolve them. One of the most
interesting and revealing approaches we have taken was a study
designed to find out what makes growing small businesses
successful. The strategies for success report is a joint product of
Industry Canada and Statistics Canada. It provides an analysis
of growing small and medium size enterprises in Canada. It
examines the reason for the success of groups of firms that grew
rapidly in the 1980s and provides entrepreneurs with the clues
they need to see how they can do the same.
The report focuses on the tactics used by small firms to make
themselves successful and how to implement these strategies.
For example, the more successful firms place greater emphasis
on their ability to adopt technology and research and develop
capabilities.
These companies focus on developing new technology,
refining the technology of others and improving their own
technology. Successful firms were generally more innovative. A
large proportion of them, 30 per cent, attributed success to an R
and D based innovation strategy. An even larger proportion, 55
per cent, reported having successfully introduced innovation.
The lessons of the strategies for success report are clear but
those lessons will remain theoretical unless they can actually be
put into practice on the shop floor or during a service call or in
the laboratory. That is why the government is implementing a
number of important practical programs to help small business
take advantage of the technology it needs to succeed.
In August, for example, the government announced the
Canadian technology network to deliver solutions to
technological problems through an integrated package of
business services. The Canadian technology network will help
small and medium size businesses acquire, adapt,
commercialize and manage new
7762
and complex technologies in partnership with the Canadian
research community.
The CTN is in effect a major consulting service which will be
available to businesses of every size. It will provide firms with
rapid and effective access to data, intelligence and services from
across Canada and from foreign sources. It will build upon the
current network of the National Research Council's industrial
research assistance program, IRAP. The program's 260
industrial technology advisers draw upon the work of a host of
organizations across Canada, including provincial research
organizations, universities and colleges, industrial associations
and other professional bodies.
The CTN will give the small business community easy access
to the broad array of technology, services, skills and expertise
offered by IRAP, together with other business related services
through an integrated electronic network.
The work of the CTN is nicely complemented by the activities
of another partnership in which the federal government is
playing a leading role. This is the Canadian network for the
advancement of research industry and education, CANARIE.
CANARIE is a joint project by the government and over 140
private and public participants. CANARIE is a cost sharing
research and development program to develop the next
generation of networking technologies, products and
applications. It will also help create a network to test and
showcase advanced technology.
CANARIE will facilitate access to and use of the information
highway by Canadian business. It is working to upgrade
CA*net, the Canadian branch of Internet. Essentially the
information highway is going to be a private sector project.
Business is doing most of the building and most of the investing
but government has a part to play as well.
(1805 )
It must help to write the highway traffic code. In other words,
make sure the highway develops to meet the needs of all
Canadians in all regions and in all sectors. This is why the
government has set up the information highway advisory
council comprised of 30 Canadians. The members of this
council have been given a year to set up a fairly broad set of
questions to answer, all aimed at recommending how the
government can speed up the development of information
highway services.
As Canadian businesses strive to innovate and make the best
use of technology that can help to compete, a very important
resource it can use is the Canadian intellectual property office.
Within CIPO one can find a gold mine of innovation. For
example, in the patents office there are 1.3 million Canadian
patents. In addition, the patents office contains millions of
foreign patent documents including 5.5 million U.S. patents.
Small businesses can use the information available through
the patent office to keep abreast of technological innovations
and to avoid investing R and D dollars in projects that have
already been explored. Patents can provide state of the art
information on particular technologies. They can indicate which
technologies are ready for development or which ones are viable
but unprotected. They can help business anticipate, identify and
respond to foreign competition or to launch a new product.
The practical value of this information is directly related to
the ease with which it can be accessed. The patent information
exploration program can provide research for the information
and patent documents about technologies, about competitors,
about patents which have expired and can now be exploited.
Eventually in the not too distant future information from the
trademark office as well will soon be available from electronic
databases using vehicles such as the information highway.
Small businesses and individual innovators will be able to do
so from their own stations. The automation of CIPO databases
will contribute to developing and marketing new products and
technologies.
In my remarks today I have covered a wide range of topics
relevant to small business from financing to technology, from
the information highway to the use of patents. In all of these
areas the federal government is doing things that are important,
that will help small and medium size firms to take advantage of
new and emerging technologies that are so essential to business
growth.
The work of the standing committee and of the Ontario caucus
will undoubtedly help to shape and improve the course of these
future policies. So too will the report of the small business
working committee which will report soon.
Technology and financing are ultimately linked, intimately
linked and are key to the growth of an innovative small business
sector in Canada. The small business community is central to
our jobs and growth strategy. Helping it optimize the flexibility
that its size gives it is a key element to our agenda for small
business.
With the support of this House and the other governments
across this country small and innovative firms will continue to
create the highly skilled jobs Canadians all across this country
need.
Mr. John Williams (St. Albert, Ref.): Mr. Speaker, I listened
with interest to the previous member's speech. Unfortunately I
find it is full of the same general platitudes of how well small
business can do and how competitive it is. I asked the same
question of the previous speaker as I did once before. How do we
7763
expect small business to be competitive in this international
environment when it is loaded down with $38,000, each and
every one of them, of federal debt that has to be paid through
higher taxes and so on?
The member for Fraser Valley East talked about the fact that
this government is picking individual people and handing them
all kinds of tax dollars, tax free at the same time. Everybody else
has to pick up the cost for these things. How does he justify these
two items when he is saying that small business is so
competitive and should get on with the business of creating
jobs?
Would it not be far better to stop this nonsense of being
selective and giving money to individual firms and individual
people? Would it not be better also that we get rid of this deficit
and this burgeoning national debt that is dragging small
business down under the water?
(1810 )
Mr. Kirkby: Mr. Speaker, one thing this government has
done very successfully is adopt its election platform, carry it
through and do what it said it was going to do.
I recall in the red book it indicated that we would be reducing
our annual deficit as a percentage of the GDP to 3 per cent. Mark
my words, this government through program review and through
a number of initiatives has gone a long way in doing what it said
it would do.
I think in the budget over the next few years when we are
dealing with our expenditure problems we will be moving in that
direction. We are going to meet that target. We will be dealing
with the deficit. I hope when people react to the types of budgets
we will be bringing forward the Reform Party will be proud to
say it did it twice as fast as we did.
With respect to the success of western diversification and
ACOA, I know these have been picked on mercilessly today by
members of the Reform Party. We were also elected to enhance
and encourage regional development right across this country.
We have to utilize the wealth of this nation to make sure people
all across this country have access to economic opportunity.
We will do likewise with the deficit. We will do what we said
we would do by utilizing these agencies to properly and
intelligently promote regional and economic development. I
know the Reform Party would like to leave the impression that
somehow money is handed out willy-nilly. Such is not the case.
The people who manage these, whether it is western
diversification or ACOA in the Atlantic provinces, are
extremely capable, qualified individuals who select business
propositions on grounds of merit. Over the years we have seen a
tremendous number of successes come out of these types of
operations.
As I have indicated, this government will do what it said it
would do. We are going to reduce the deficit and we are going to
enhance our regional economies by the sensible spending of the
taxpayers' dollars.
Mr. Leon E. Benoit (Vegreville, Ref.): Mr. Speaker, the hon.
member opposite talked about how the people who manage the
regional diversification programs such as western economic
diversification are very good at choosing businesses based on
merit.
I would just like to ask the hon. member specifically what
merit. If they are choosing businesses based on merit, why do
these businesses need special treatment compared with their
competitors?
I would like the hon. member opposite to give me some
examples of businesses that have received money under these
programs and demonstrate clearly to me first that it was fair to
give them money when not giving competitors money. Second,
how is merit determined?
Mr. Kirkby: Mr. Speaker, I noticed the members of the party
opposite are not keen on questions about merit. I can see why.
With respect to the issue of merit, obviously these projects are
chosen on the basis of those which are likely to succeed as in the
case of western diversification. They are not picked when there
are competitors in the marketplace. They are picked when there
is innovation or something new which is not done in the region
in which it is proposed. This is the type of thing that I know
western diversification picks. Probably ACOA has the same
rules, to pick subjects and projects which are meritorious, which
have an excellent chance of success, which will aid the
diversification of an economy that too often has been based on a
single or a narrow group of industries.
(1815)
This is the type of progress our country needs. We are doing it
and we are making things happen. I know that the hon. member
will be grateful when he looks at the job statistics and sees how
many new jobs are created all across the country by a
government that is doing what it said it was going to do.
Mr. John Williams (St. Albert, Ref.): Mr. Speaker, it is a
pleasure to participate in the debate today on taking care of
small business.
A few years ago the previous government loaded on small
business one of the biggest paper burdens we have seen in many
a long year, which was the introduction of the goods and services
tax. It turned every small business person into a tax collector.
The government said it was going to get rid of the GST and
now a year later we are still waiting. Last February the Minister
of Finance introduced his budget and took away the capital gains
exemption. I wonder what that is doing for small business. He
7764
reduced the small business tax exemption, which caused good
and prosperous small businesses to pay more taxes. I wonder if
that is what they mean by taking care of business.
The first responsibility of government to small business and
the millions it employs is to create an economic climate that is
conducive to economic growth and expansion. This growth and
expansion will lead to prosperity for the risk takers, jobs for the
employees, create new opportunities for the unemployed,
provide economic stability for Canadians and their families, and
create new and novel businesses and economic opportunities.
We have to get the government off the people's backs. We
have to give incentive and opportunity for small businesses to
see opportunities, take advantage of these opportunities where
they can go forward, put their money where their mouths are,
take the risk, take the gamble, go forward and win without the
federal government either taxing them to death or providing tax
free money to the competition and shooting them down at every
opportunity.
What are the ingredients for this economic climate? Surely it
is a federal government that both preaches and practises fiscal
responsibility. We expect small business to practise and preach
fiscal responsibility, look after its credit and be able to repay its
loans, otherwise we are not going to give them money.
The federal government talks about fiscal responsibility but
has yet to deliver on anything regarding fiscal responsibility. It
had a very weak and timid objective to reduce the deficit to $25
billion per annum. By the Minister of Finance's own admission
he is going to miss that target, yet he has done nothing to bring
the government back into line with its own estimates and targets.
Government spending must be significantly reduced to restore
order to our fiscal house and to provide some confidence to
small business.
Once government spending is brought under control and the
budget is balanced, the benefits for Canadians, including small
business people, will be a stable fiscal environment in which
they can plan for the future, grow, develop, create employment
and reduce the unemployment costs to the country. We could
also then look forward to a reduction in the exorbitant levels of
taxation that funds the voracious and excessive appetite of
government spending.
When the Auditor General tabled his report earlier this year,
he said that hard choices lie ahead.
(1820 )
The federal portion of the national debt today is
$538,000,181,919.99 according to the number I have. The debt,
as I mentioned before, per taxpayer which includes every small
business person who is also a taxpayer, is $38,287. The federal
debt per capita is $18,920. As small business people go around
the world trying to compete, to sell their product, they have to
build into the price of that product the cost of the high taxes that
pay for the interest on the debt.
The Auditor General stated in his 1993 report that hard
choices have to be made to deal with the problem of the debt.
The hard choice is between the continued growth of the debt or
stop digging a bigger debt hole, as we said during the last
election. The hard choice is between continued excessive
overspending or practising fiscal responsibility and prudence.
The hard choice is between continued high levels of taxation,
with the possibility of even higher taxes and new taxes to fund
the debt or hopefully the prospect of tax relief by restoring order
to the federal government's fiscal house.
If we do not make these hard choices and go with what we
have been doing before, we can guarantee that taxes will
continue to go up. We can guarantee that our interest rates will
remain high as we try and bring in more and more money every
month to just pay the groceries, so to speak, of the federal
government. The dollar will have to be maintained up so that
foreign lenders to us will continue to lend money to Canada.
Therefore, we expect small business and business in general
to compete around the world as it worries about high taxes
because of the national debt, high interest rates because of the
current fiscal situation, a high dollar on the international money
markets because of our situation. We still expect them to
compete.
Is that what we call taking care of business? I hope not. I hope
that the federal government would see its way to changing the
policies and dramatically reducing the spending. In that way we
can expect small businesses to play their part, create the jobs,
create the environment where there are more people paying
taxes and collecting taxes and bring our whole fiscal situation
under control.
Unfortunately we have had nothing but paper from the
government. A year ago it introduced a red book which stated
that the GST would go. The finance committee sat for months
and months and produced a report that is now on the shelf. The
government cannot move from the report to action. We are still
waiting for any kind of action on a report that was tabled months
ago and promised a year ago. There has been no action.
The Minister of Human Resources Development tabled a
paper several weeks ago. He now says we have a problem but
that he does not have any plan whatsoever to try and fix it.
The Minister of Finance tabled a couple of papers recently in
which he stated: ``We have a problem in this country but I don't
have any idea how we were going to fix it. Let's go out there and
see if somebody else has an idea''. Now we have a report titled
``Taking Care of Small Business'' from the Standing Committee
on Industry. I sincerely hope that this is not another one that is
just going to go on the shelf and that is the end of it.
7765
The time has come to act. Let us take a look at some of the
statistics. In 1990, 97.2 per cent of all registered businesses in
Canada had fewer than 50 employees; 52 per cent of Canadians
employed in the private sector are employed by businesses with
fewer than 100 employees; and 45 per cent of Canadians are
employed in businesses with fewer than 50 employees.
Therefore, there is no question whatsoever that small business is
the engine that drives the Canadian economy. It has to be
protected, encouraged, enhanced. It has to be competitive. They
are the ones we depend upon to generate the taxes that we spend
on our social programs.
(1825)
I urge the government to stop the endless production of paper
and let us see some action. Let us see it create a climate that
fosters economic growth and prosperity rather than just picking
a few winners and handing them all kinds of cash. Let us see a
climate of reduced government spending, a balanced budget and
tax relief. These are concrete suggestions. Good government
solutions must be found and implemented to address the long
term concerns and issues facing the small business community
rather than giving them short term, quick fix and politically
expedient measures.
Mr. Peter Milliken (Parliamentary Secretary to Leader of
the Government in the House of Commons, Lib.): Mr.
Speaker, I have a question for the hon. member. I found it quite
extraordinary that in his speech he listed a series of things the
government had done which he claimed hurt small business.
Some of them may have; some of them may not have. Some of
them may in fact help small business. He listed all these as
arising out of the last budget.
Then he made the most extraordinary statement, having gone
through a fairly comprehensive list that the government had
done nothing during its term of office to do anything about
anything and that all it had done was study. If it has done
nothing, why did he come up with a list at the beginning of
things the government had done?
The inconsistency was quite extraordinary. I do not know
whether the hon. member reviewed the remarks he was going to
make in advance and picked up this illogical inconsistency or
not. But it was quite obvious to those of us sitting here that he
was talking through his hat for the second half of his speech at
least. It cast serious doubt on the statements he made in the first
half of his speech when he listed the government's many
accomplishments and then decided the government had done
nothing and that all we were doing were studies.
He knows perfectly well the government has done a lot more
than study. He knows the government has produced these studies
with a view to taking action. Part of the study process involves
consultation with Canadians which he knows the government
believes is in the best interests of the country so the views of
Canadians can be solicited before the government takes
decisions that sometimes are going to be painful or unpleasant.
Surely he agrees that is the right approach. Surely he agrees
that the speech he just made is utter nonsense.
Mr. Williams: Mr. Speaker, I do take exception to the hon.
member's remarks. The point is that this government has yet to
prove it can move beyond taking reports and put them into
action. That was the whole point of my speech.
We have had the GST study. My goodness, my colleagues on
the finance committee were meeting for months, sometimes
three times a day. They produced a big report months ago and we
have not seen anything. That was the end of it. I mentioned that
the Minister of Human Resources Development produced a
report which said: ``We have a problem in this country but do not
ask me for solutions. What do you think?'' The Minister of
Finance tabled two reports in two consecutive days which
basically said the same thing: ``We have a problem in this
country but I am not offering any solutions''.
Surely the government's job is to offer solutions. The solution
we are offering is less taxation and less government. Stop
picking winners and giving them all kinds of cash and expecting
small business and business in general to try and compete under
the heavy load of high taxes, a high dollar and high interest
rates. They are trying to compete in the international
marketplace to create jobs and some employment here, to create
some wealth in this country yet we continue to tax them as if
they were sponges with endless amounts of cash.
That whole idea is past. The day has come when there is no
more money for small business to pay. Therefore before small
business goes bankrupt we now find that this government is
bankrupt of ideas. For the past number of months we have done
nothing except some house cleaning from the previous
government: the restructuring of this department, the
restructuring of that department and the amalgamation of some
other departments. These things were produced by the previous
Prime Minister. This government has been in power for more
than a year now and we are still doing house cleaning from the
previous government. When are we going to get some serious
action and decisions?
(1830)
The Deputy Speaker: The time for this debate has expired.
_____________________________________________
7765
ADJOURNMENT PROCEEDINGS
[
Translation]
A motion to adjourn the House under Standing Order 38
deemed to have been moved.
7766
Mr. Yvan Bernier (Gaspé, BQ): The issue I wish to bring to
the attention of this House this evening, Mr. Speaker, is one I
raised three weeks ago regarding the Gaspé Cure Inc.
consortium and the problem it is faced with.
I would like to inform this House of what Gaspé Cure is and
what problem it is faced with. Gaspé Cure is a grouping, as the
name consortium indicates, of five processing operations
dealing in salted dried codfish. This consortium employs
approximately 250 people.
Last spring, in a contest sponsored by the Quebec agri-food
export club and Soquia, Gaspé Cure won the highest award of
excellence. With respect to what Gaspé Cure is, I wanted to add
that this consortium used to include at least eight processing
operations four or five years ago. but following some form of
industrial rationalization, there are only five remaining today.
I want to emphasize that these people are trying to maintain
their trademark, as well as working on improving their visibility
world-wide and their efficiency in terms of production. The
problem now, and it has grown in the last two years, is that other
companies in other regions of Canada, in the Maritimes, have
started to produce what we in the Gaspé call an imitation
product.
There is a difference between the two products. Why?
Because the process in the Gaspé takes into account our
humidity, our climate, the number of days of sunshine, which
give us a particular micro-climate for the type of production
that we want to have.
The dried salted product may be less well known in Canada
and to Canadian consumers. Nevertheless, you should know that
it is highly prized in some countries and eaten in ceremonies or
at big festivals, as in Portugal or Spain, for example.
For this reason, the market and image of the Gaspé Cure
consortium are very important for them.
I am being signaled to speed up a little; indeed, I am not really
used to speaking under Standing Order 38. What I am asking the
government, because I know that it is supposed to have done
studies to come to a conclusion, is that it recognize right away
that after all the studies are done, the Gaspé Cure consortium
will have its own restricted trade name for the region.
It is very important for them. In the past, they showed that
there was a glaring difference between their product and the one
made elsewhere, so we want this issue to be cleared up as soon as
possible.
[English]
Mr. Dennis J. Mills (Parliamentary Secretary to Minister
of Industry, Lib.): Mr. Speaker, the designation of Gaspé cured
has appeared in the federal fish inspection regulations for many
years.
The current regulations permit the labelling of any saltfish as
Gaspé cured provided that the fish meet the specific quality
characteristics of Gaspé cured, light salted fish. It is recognized
that there is a long tradition in the Gaspé region associated with
the production of this unique type of salted fish.
(1835 )
In an effort to address the concerns of the Gaspé saltfish
producers, the inspection branch of the Department of Fisheries
and Oceans has consulted with the saltfish industry and has
made considerable effort over the past few months to develop
both sensory and chemical criteria which will more precisely
define Gaspé cured. It is expected that this work will be
completed by December 1.
The Department of Fisheries and Oceans will then meet again
with the saltfish industry to review this issue and finalize the
standard for Canadian saltfish products by early 1995.
Once the standard has been completed, the Department of
Fisheries and Oceans will implement a comprehensive training
program for all inspectors involved in the inspection of saltfish
in Atlantic Canada. The combination of a finalized, written
product standard, specific chemical and sensory criteria and
uniform application of the standard by inspectors will create a
regulatory environment which will be fair for all producers of
saltfish cod in Canada.
Mrs. Jan Brown (Calgary Southeast, Ref.): Mr. Speaker,
the Minister of Canadian Heritage made an error. He regrets his
intervention to the CRTC on behalf of one of his constituents. He
admits that his decision to write this letter was imprudent.
My question to the Minister of Canadian Heritage on October
28 raised a number of issues I wanted to clarify as they related to
the minister's mistake. I wanted to clarify how the mistake
occurred, how to prevent such an event from reoccurring, how to
address the damage done and how to restore the lost credibility
of the CRTC.
In his response, the minister suggested that I did not
understand. He stated that his letter was not an intervention.
This is not true. The facts are clear and simple.
On March 15 the minister wrote a letter to the CRTC on behalf
of a constituent. On March 29 the minister received a response
from the CRTC. Its response made it unequivocally clear that
the minister's letter was received by the CRTC, stamped as an
intervention and included in the Daniilidis application as a letter
of intervention. The secretary general of the CRTC has
concurred with these facts as they have been presented thus far.
They are indisputable.
7767
Further, the Prime Minister stated that the Minister of
Canadian Heritage had made an error in judgment, that the letter
was an intervention and he too wished the minister had not
written the letter.
The sad fact is it is not I who is confused but the minister
himself. Mr. Daniilidis, the CRTC, the Prime Minister, the
cabinet ministers also named, the opposition and the Canadian
public all know the minister intervened. The question is not if he
intervened but why and how does he plan to clean up the mess he
created.
When the CRTC wrote back to the minister on March 29 it was
clear that the letter was understood to be an intervention. The
minister stated that he moved quickly to remove this
understanding.
The minister took no action for 199 days. Is this what he calls
quick action? This complacency and inaction is exactly why
Canadians have lost faith in politicians. Only when this issue
became news was the minister stirred to react. The facts are that
his actions belie his rhetoric.
This scandal has served as a lightning rod for all Canadians
tired of lying politicians, tired of coverups and tired of
repressive rhetoric. Errors like this one should not be tolerated.
As my questions to the minister continued, I focused on the
issue of influence peddling. I asked about the influence of the
letter of intervention on the application process. The minister,
contrary to fact, denied that his letter was an intervention. As
well, he chose not to address the issue of the damage he had
caused to the credibility of the CRTC.
My office has been in contact with Mr. Daniilidis and some of
the interveners in the process and everyone is concerned with
the negative influence brought about by the minister's
meddling. The minister's letter of intervention was received by
the subcommittee prior to its rejection of the CHOM
application. The subcommittee membership for the CHOM and
the Daniilidis applications had overlapping membership. Given
that the minister's letter supported the Daniilidis application
prior to the CHOM rejection and given that the committee
membership was the same, it is clear that the minister's letter
had some influence.
However, once this whole affair became public, once the
question of potential influence was posed, the CRTC had no
choice but to reject the Daniilidis application.
The minister has an obligation to rebuild the credibility of the
application process. He has an obligation to rebuild the
credibility of the CRTC. He has an obligation to remove the
blemish on his ministry. It is a long, long climb especially for a
ministry weakened by such gross incompetence.
(1840 )
Ms. Susan Whelan (Parliamentary Secretary to Minister
of National Revenue, Lib.): Mr. Speaker, I was informed that
the question the member for Calgary Southeast wanted to refer
to was the one she brought up on October 24th. My response is
with regard to that question.
The Deputy Speaker: The note for today, if it will be of
assistance to both hon. members, reads October 28, 1994, which
is the list that I was given. There may have been a
miscommunication. Do the members wish to put this off to
another day? This will not count on anybody's time.
Mrs. Brown (Calgary Southeast): Mr. Speaker, it was
addressed to the issue of the question raised on October 28.
However, if the hon. member would be prepared to give a
response in general to the action of the minister, I would be
satisfied with that.
Ms. Whelan: Mr. Speaker, I am not prepared to respond to the
question of October 28. I am prepared to respond to the question
of October 24. I apologize but that is the information I was
given. If the hon. member would like, I can talk in general about
October 24.
The Deputy Speaker: We can put the matter over to deal with
on another occasion or have the parliamentary secretary speak to
it. As the hon. parliamentary secretary has indicated, she can
reply in very general terms to the specific remarks of the hon.
member. I think it is up to the hon. member for Calgary
Southeast as to which she prefers.
Mrs. Brown (Calgary Southeast): Mr. Speaker, I would
prefer a response this evening.
Ms. Whelan: Mr. Speaker, my response is with regard to the
CRTC and with regard to the fact that the Government of Canada
did not intervene in the activities regarding RDI. That is what I
am prepared to respond to tonight, that the CBC's application to
authorize a specialized Canadian-
Mrs. Brown (Calgary Southeast): Mr. Speaker, this is
clearly way off base. It has had nothing to do with RDI. In
deference to this confusion and to the hon. member, we will put
it off for this evening.
The Deputy Speaker: I am reminded that there are no points
of order to be raised during this period. In any event that is
agreeable to both members.
Hon. Charles Caccia (Davenport, Lib.): Mr. Speaker, some
12 days ago I asked the Minister of Foreign Affairs for the date
when Canada will ratify the law of the sea. It is most important
that Canada take steps to ratify this comprehensive and overdue
piece of international law.
7768
The law of the sea is designed to protect the world's fisheries
and to stop the pollution of the oceans. It contains the idea that
ocean resources belong to humanity and that all of humanity is
entitled to share in their benefits and use.
Canada signed this law some 12 years ago. It was one of the
first nations to sign it. However, it has yet to ratify it, which is
the second step required. The law of the sea will come into
effect, into force so to say, in two days, on November 16, 1994.
Sixty countries have now ratified it and that is the number
required to get the convention working.
Of the 60 nations that have ratified it all but two, Iceland and
Malta, are developing countries. It is therefore necessary to
make the point that to be truly effective this legislation or this
law should have universal support, including that of the major
developed countries and marine powers. There is no doubt about
that.
Being one of the first countries which signed the law of the
sea, it puts Canada in an advantageous position because it could
play a role in setting up the institutions which will enforce this
particular convention. It is our hope therefore that Canada will
have the possibility to appoint a Canadian judge to the law of the
sea tribunal and also have a seat on the council of this decision
making international body.
Apparently the reason Canada is so late is that there were
concerns about some particular provisions including deep
seabed mining which somehow echo the policies we also heard
in Washington. It is my understanding these issues have now
been resolved, including the main concerns to ensure that
Canadian law is compatible with the convention.
In conclusion, as I said Canada was one of the most ardent
promoters of the law of the sea convention. It is a great pity to
see Canada somehow reluctantly joining the world community
instead of being among the 60 signatories required to get the
convention going. It seems to me that Canada would be very
well served by ratifying this convention. This is a landmark
piece of international negotiation in international law.
Tonight I am asking our distinguished parliamentary
secretary to confirm that Canada will ratify the law of the sea
convention before the end of the year.
Mr. Jesse Flis (Parliamentary Secretary to Minister of
Foreign Affairs, Lib.): Mr. Speaker, I compliment the hon.
member for Davenport on being such a strong advocate of the
need to achieve universal convention to govern all uses of the
sea.
Canada participated actively in the negotiation of the law of
the sea convention and signed it in December 1982. Our
involvement in the convention stems from three basic
principles: our general support for rule of law and multilateral
processes; our extensive coastline and substantial continental
shelf; and a desire for stable ocean law and additional rights for
coastal states concerning fisheries, navigation, pollution
prevention and the mineral resources of the continental shelf.
Along with other industrialized states Canada did not ratify
the convention due to concerns, as the hon. member said,
regarding its provisions on deep seabed mining. After four years
of negotiations these concerns were resolved. An agreement was
adopted by the United Nations on July 28 and signed by Canada
the very next day.
Canada has already been applying most of the provisions of
the convention in practice as along with other countries we
believe they reflect the customary law of the sea. We are now
reviewing our domestic legislation to make certain it is in
conformity with the provisions of the convention. This must be
done before ratification to avoid any inconsistency with the
convention.
We hope the hon. member's support for ratification of the
convention will aid in the rapid passage of any amending
legislation that may be brought forward.
I want to assure the hon. member for Davenport who has taken
such a leadership role in this issue that the government intends
to ratify the law of the sea as soon as possible.
The Deputy Speaker: Pursuant to Standing Order 38(5), the
motion to adjourn the House is now deemed to have been
adopted. Accordingly, the House stands adjourned until
tomorrow at 10 a.m. pursuant to Standing Order 24(1).
(The House adjourned at 6.48 p.m.)