House of Commons Hansard #118 of the 35th Parliament, 1st Session. (The original version is on Parliament's site.) The word of the day was quebec.

Topics

World Trade Organization Agreement Implementation ActGovernment Orders

11:55 a.m.

Reform

Elwin Hermanson Reform Kindersley—Lloydminster, SK

Mr. Speaker, I appreciate the question from my colleague from the Bloc. I would first like to inform him that there are supply managed producers not only in western Canada, but a number of them are in my constituency. A number of them support the Reform position with regard to what will happen to supply managed industries.

During the election campaign Reform was the only party that was calling a spade a spade. We said there were going to have to be changes to the supply management industry if we were going to be able to comply with the GATT negotiations that were under way at that time and which were not completed until after the election.

In fact what we predicted almost happened to be 100 per cent accurate. The import quotas were replaced by tariffs. We suggested those tariffs would have to be high enough to protect those industries during a transition period to a global market economy. The GATT agreement has actually been very generous to the supply managed industries in that there are extremely high tariffs in place, 300 per cent tariffs for many commodities, which basically excludes any importation of those products.

As a result of this World Trade Organization agreement and regulation it seems that the supply managed industries have preferential treatment over many other sectors of agriculture which are phased down more quickly and have to take much greater reductions in subsidies.

I would respond to the hon. member in saying that the supply managed industries have probably fared better than the majority of producers in my part of the country who are going to see substantially higher reductions in the subsidies they receive.

I would also take this opportunity to remind the hon. member that if he does get his way and Quebec does separate from the rest of the country, these favourable conditions certainly would be very difficult to sustain. I am sure that Canadians would not continue to give the province of Quebec as high as a 50 per cent market share of industrial milk into Canada for instance.

It would be wise if he would explain the situation to his constituents. In fact they would be hurt much more by opting out of Canada than by remaining in Canada, even though we agree that supply management has to be reformed and that some of the basic rules under which it functions have to change.

World Trade Organization Agreement Implementation ActGovernment Orders

Noon

Bloc

Stéphane Bergeron Bloc Verchères, QC

Mr. Speaker, I will try to be as brief as I can. I was a little upset by what I just heard from my Reform Party colleague, when he said that if, as they say, Quebec should separate from the rest of Canada, the rules for selling Quebec milk on the Canadian market would no longer be the same.

May I remind the hon. member that Western Canada, and especially Alberta, enjoys certain facilities for marketing its beef in Quebec which are also very attractive.

World Trade Organization Agreement Implementation ActGovernment Orders

Noon

An hon. member

Eight hundred million.

World Trade Organization Agreement Implementation ActGovernment Orders

Noon

Bloc

Stéphane Bergeron Bloc Verchères, QC

Eight hundred million dollars worth of beef annually, I am told. That is quite a lot. I imagine Canada will not be so stupid as to jeopardize its markets in Quebec by trying to strong-arm a future sovereign Quebec. The president of the Mouvement Desjardins said that if Canada wanted to play hard ball with Quebec after sovereignty, the financial consequences would probably be the same for both parties.

Since Canada is a free trade country-at least I hope so-and since it is a capitalist country and wants to make a profit, it will not forego this attractive market in Quebec and thus will not close its own markets to Quebec products, which would make it vulnerable to the same treatment from Quebec.

That being said, my Reform Party colleague should also realize that in a North American free trade context, these so-called threats that Canada might close its doors to products from Quebec are an anachronism, and Quebecers realize this.

World Trade Organization Agreement Implementation ActGovernment Orders

Noon

Reform

Elwin Hermanson Reform Kindersley—Lloydminster, SK

Mr. Speaker, it is interesting the hon. member would refer to the beef industry because it is one of the most freely traded commodities in Canada. If there is anything we have done in Canada in the way of regulation it is to help the beef industry in central Canada by shipping our feed grains to eastern Canada at subsidized rates under the Western Grain Transportation Act, which I said should be eliminated and administered in different ways.

I am not sure if there is a problem with the beef industry in Quebec, but I assure the hon. member that industry is not subsidized in western Canada. I am not sure if it is in his part of the country. The only area where there are significant subsidies is in the transportation of feed grains to his part of the country for the beef industry there.

It must be that the producers in western Canada are very efficient and are able to make a profit in the marketplace. I applaud that and say that if they lose the Quebec market I am sure they will be able to fill other markets without any difficulty.

World Trade Organization Agreement Implementation ActGovernment Orders

Noon

Bloc

Suzanne Tremblay Bloc Rimouski—Témiscouata, QC

Mr. Speaker, I rise in the House today to draw the attention of my colleagues to the specific impact on culture of the current trend towards globalization. We are now examining Bill C-57, an Act to implement the Agreement Establishing the World Trade Organization. The purpose of this bill is to harmonize Canadian laws with the broad principles negotiated by GATT members.

During the Uruguay Round, we maintained and we continue to maintain, that in these wide-ranging global trade talks, culture should enjoy special safeguards that respect the sovereignty of states and their desire to preserve their specific identity. We are of course referring to the demands made by the Americans to include culture in free trade.

The Americans have been trying to impose their cultural industry throughout the world for some time. The U.S. audio-visual industry is their second largest export sector. They have been able to develop a very powerful industry, since their domestic market is the biggest in the world.

That is why according to them, culture should be considered as just another commodity, like a pair of shoes or a computer. In fact, the Americans totally dominate the industry.

As early as 1947, the General Agreement on Tariffs and Trade contained a major provision, article IV, which was intended to protect national cultures against the unbridled implementation of the principle of the free movement of goods. This article covered special provisions relating to cinematography. Member countries were allowed to set screening quotas, in other words, a minimum of domestic films to be screened in the country concerned.

In 1961, the Americans demanded national treatment as provided under article III and felt that the quantitative restrictions imposed by certain states, including Canada, with respect to U.S. television programs were discriminatory and violated article III. Canada argued that its right to impose such restrictions arose from article IV of the agreement, which provided that a country had the right to limit access to its film market. In fact, Canada extended to television its right to limit the screening of foreign films. Of course in 1947, when the GATT agreements were signed, television was a technology whose impact was hardly predictable.

Various attempts to reach an agreement were unsuccessful, so that as far as television programs are concerned, the intent of article IV is still not quite clear. However, the controversy clearly showed the lack of enthusiasm of the American government for trade restrictions on cultural grounds.

In the late 1970s, the Americans are at it again. The GATT secretariat is mandated by the contracting parties to compile a list of all non-tariff barriers. The US list mentions various foreign practices designed to limit the importation of American cultural products. Also and for the first time, the United States denounced the subsidization of national film producers and distributors practised in 21 member countries. Again, the principle of financial freedom advocated by American interests clashes with that of cultural development and national identity.

This exercise did not result in any concrete measures at the Tokyo Round, in particular because the major part of the cultural product was often considered within the OECD as falling under trade in services instead of trade in goods, which automatically excluded it from the scope of the GATT agreement.

Starting in 1986, at the insistent request of the United States, three new subjects were to be covered in the new round of trade negotiations: intellectual property, investments and services, culture being assimilated to a service. It then became increasingly difficult to exclude cultural products from the market logic peculiar to GATT.

In 1990, in the context of these negotiations, a special committee was set up to look into the liberalization of trade in the specific area of audiovisual. Two opposite sets of views were represented in this committee, with the United States insisting that no restriction be put on the movement of goods and services, while the European Community was asking that, where the cultural identity of a state were involved, the State in question not be forced to make concessions that could put its cultural identity at risk. This committee was eventually dissolved, it being absolutely impossible for its members to come to an agreement.

At the same time, Canada was negotiating a free trade agreement with the United States. And again, culture and cultural sovereignty were at the centre of the debate. All the lobbies directly or indirectly associated with cultural industries set out to convince negotiators and the public that cultural products had to be excluded from this agreement. The Conservative government changed its mind on this issue depending on which way the wind was blowing: one day, culture was on the table; the next day, cross my heart and hope to die, it was not.

Completely contradictory statements made it impossible to get at the truth. The government claimed that the question of cultural sovereignty was not negotiable, but in fact did not demand the exclusion of the cultural industries for fear of jeopardizing the success of the negotiations. Furthermore, during the negotiations, the government scrapped a film bill designed, among other things, to guarantee better control over the distribution of foreign films within Canada.

In other words, even while the North American Free Trade Agreement was being hammered out, the Canadian government was backing away from one of its fundamental responsibilities intended to support cultural development. Knowing that Americans produce 97 per cent of the films we see, we cannot help but be concerned by the lack of vision of the Canadian government of the day.

The withdrawal of this bill is a threat to our cultural future. In fact, according to the experts, the cultural protection obtained by Canada in the Free Trade Agreement and renewed in NAFTA remains ambiguous and could be challenged. This ambiguity is summed up in article 2005 of NAFTA. Paragraph 1 provides that cultural industries are exempt from the provisions of the agreement, and paragraph 2 allows the Americans to take reprisals in other areas of activity if they feel that Canadian cultural policy goes against their interests. So much for Canada's ability to undertake any legislative measures necessary to further its cultural development. Such measures could be ill viewed by the Americans, who would take retaliatory action by virtue of the powers given them under paragraph 2 of article 2005.

Now we understand why the Canadian government withdrew its bill limiting distribution of foreign films within its jurisdiction and why the present government is dragging its feet on amendments to the Copyright Act.

In the last round of GATT negotiations, we are told, culture had a narrow escape. The Americans' push for unanimous agreement that culture is a product like any other and should be exempt from national and international regulation failed because of the forceful intervention of France, supported by the European Economic Community.

In this last-ditch attempt to save cultural expression and the democracy of ideas, Canada played a minor role, overshadowed by our cousins from France. The current government, need I remind you, belatedly supported the agreement after a period of guilty silence. This attitude reveals Canada's position on the whole issue of culture.

The Ginn Publishing affair reveals just as much about Canada's position on protecting our cultural development. Under the Free Trade Agreement and NAFTA, the Canadian government can take measures to protect its publishing and book industry. This provision was designed to allow the Canadian government to maintain its policy on foreign investment in publishing.

Why did the Minister of Heritage agree to sell Ginn Publishing? By enacting a law on foreign investment, the Canadian government had given itself a tool to protect the Canadian publishing industry. Yet, the Minister of Heritage ratified the americanization of one of our publishing houses with a smile and his proverbial naivety. This minister submitted to our neighbour's blows by willingly abandoning what nothing was forcing him to relinquish.

Do you really believe that, in the current circumstances, we can trust this minister to protect our country's culture in the next round of multilateral negotiations?

Cases like that of Ginn Publishing make us wonder about what many call the "secret clauses" of the Free Trade Agreement. Is it normal that, in a democratic country, our government makes its decisions not by consulting Parliament and the people in accordance with its own laws, but under pressure from other countries?

Some observers noted that Canada's lack of involvement in the GATT multilateral negotiations was due to the fact that it considers its cultural sector as already protected by the FTA and NAFTA. But, as we know, this protection is limited by the fear of retaliation from the American giant, by verbal agreements that leave traces and by the Canadian government's unwillingness to stand up in promoting this country's culture.

Furthermore, Carla Hills told Congress that GATT had precedence over the FTA, that there was therefore no cause for concern about this concession to Canadians. I should point out that she said this to the U.S. Congress. In fact, the FTA has precedence over GATT. Still, this statement by the woman who was in charge of FTA negotiations for the American side says a lot about the relative importance given to this agreement by the U.S. and their intention of re-opening it in the future.

Let us go back to the last round of GATT negotiations, which addressed for the first time the issue of intellectual property. The bill before us today contains some 20 clauses on copyrights. As with the rest of the bill, these amendments are proposed to make our Copyright Act comply with the agreements in the Trade Related Aspects of International Property Rights , a document containing the rules of the World Trade Organization, including those related to copyright.

These changes are minor, to be sure. They create only one new right: they allow the performing artist to authorize or refuse to permit the recording and broadcast of his performance. The remaining clauses on copyright are intended to update our Copyright Act by including the agreements in Trade Related Aspects of International Property Rights and the provisions of the Universal Copyright Convention, to which this international agreement refers.

As examples of these changes, note the clarifications made to the definitions of "infringing" and "performance". Accordingly, industrial piracy and trade in illegally copied merchandise will be limited.

The changes imposed by international trade are commendable. Nevertheless, they put the Canadian government's inaction on copyright on the national agenda. Phase II of the Copyright Act review was planned for last spring. The Minister of Canadian Heritage, who appeared before the Standing Committee on Canadian Heritage on May 4, said this: "I have said right from the beginning, probably even when I became responsible for this portfolio, that our copyright legislation is out of date. There has not been any major change for many years. It is not even fully in keeping with the international agreements on copyrights. We need an overhaul. We are working on it. We have teams of people doing an examination of all this. They are doing the economic impact studies and extensive consultations -I am quite determined to see amendments to the Copyright Act before too long".

But like everyone in the cultural community in Canada and Quebec, we are still waiting for this Copyright Act. This delay is tragic. Of course, it is tragic for our working artists who for ten years or so have been calling for major changes to this law. It is also tragic because we suspect that this delay could be due to the difference of opinion between the Department of Industry and the Department of Canadian Heritage.

On December 22, 1993, the Union des artistes wrote this to the Prime Minister: "The Copyright Act is now being reviewed -Under the previous government, there was an obstacle to the harmonious review of that legislation: The sharing of responsibility between the Department of Canadian Heritage and the Department of Consumer and Corporate Affairs. That arrangement led to a dual vision which, more often than not, resulted in contradictory objectives. That act is the only one protecting the right of Canadian creators".

As for the Minister of Canadian Heritage, he said on CBC radio that he did not really know what the content of phase II of the legislation on copyright would be, and that there would probably be a phase III. It seems that the heritage minister no longer has any authority to impose his views on that issue. He finds himself in a weak and isolated position in his wrestling match with the Minister of Industry. This is truly tragic, considering that it is incumbent upon that department to protect the cultural interests of Canada.

The government resorts to a stopgap measure, namely Bill C-57, to make up for the tragic and unacceptable delay. The Department of International Trade is trying to ensure that the current act is in compliance with international agreements.

I want to emphasize the importance of cultural development for a society.

The role of the department in this issue is crucial and vital. Why? Because, as evidenced by the Ginn episode, as evidenced now by the government's apathy regarding the review of the Copyright Act, and as evidenced also by what observers called a very close call with GATT, the right to culture, on one hand, and economic considerations, on the other hand, are on a collision course. And if the Minister of Canadian Heritage does not start creating strategic alliances right now, it is not only Canadian cultural industries which will be in jeopardy, but also democracy itself.

To understand that, we have to define culture. We could, of course, quote several authors. Let us take the definition given by British sociologist Raymond Williams, whom authors Marc Raboy, Yvan Bernier, Florian Sauvageau and Dave Atkinson quote in their book Développement culturel et mondialisation de l'économie : ``At various times and in various contexts, the term culture has been used in one of three ways. First, it may refer to a general process of intellectual, spiritual and aesthetic development; second, it may describe the way of life of a people or a

group in a specific location or time; third, it may refer to the activities of artists or intellectuals in a given society".

Except for the last definition, which only applies to cultural producers, it appears that culture includes a wide array of information and knowledge which allow individuals to develop (including through education, as shown by Williams' first definition), to adjust and to play a role in their community (as shown by the author's second definition). From this viewpoint, it would seem that artists and intellectuals as well as cultural producers not only participate in the intellectual, spiritual and aesthetic development of individuals, but also help create an awareness of their living environment. This shows the importance of their activity, which comes under all three definitions of culture according to Williams."

Canadian economist Michael Walker also gives the following definition, and I quote: "What we refer to as culture is simply a society-wide summation of the individual choices people make".

From this perspective, culture is essentially demand as expressed by the markets. This definition puts less emphasis on cultural content, as a set of information and knowledge, than on the mechanism that promotes culture, namely a market free of any restrictions.

To compare the definitions provided by Williams and Walker is somewhat of a joke, but it goes to show the conflict between sociological and economic approaches to culture, and particularly the historical conflict between economy and culture which has characterized to this day the evolution of industrialized nations.

To conclude, the proposed amendments to the Copyright Act are imposed upon us from the outside, as a result of multilateral trade agreements signed by Canada. Are we going to let foreign countries decide what is good for Canada in terms of culture or will we pass legislation that reflects our directions, our wishes and those of our creative artists as well as the needs of our cultural industry, which promotes Canadian and Quebec talent? The Bloc Quebecois has made a choice and opted for the cultural sovereignty of this country.

World Trade Organization Agreement Implementation ActGovernment Orders

12:20 p.m.

Bloc

Stéphane Bergeron Bloc Verchères, QC

Mr. Speaker, first of all, I would like to heartily congratulate my colleague from Rimouski-Témiscouata on the excellent speech she just gave us. I find it quite revealing that she could make a twenty-minute speech dealing specifically with the cultural issue of the Uruguay Round accords and their applications to Canada.

She presented some facts on the implications of the Uruguay Round accord for culture in Canada and more specifically for copyright in Canada. Once again, I find it quite revealing that international trade agreements force us to make some adjustments to Canada's copyright law.

For months, my colleague has been clamoring for the federal government to legislate clearly on the issue of copyright. Is there not some ambiguity, a problem when the federal government is forced by international trade agreements to act or react on the subject of copyrights?

I put my question to the hon. member because I am sure that she has some points to make about this. Personally, I am very surprised that the federal government has taken so long to legislate on copyrights and that it is doing so in a roundabout way, when forced to by international agreements. Is this not further proof that the present Minister of Canadian Heritage lacks clout and credibility?

World Trade Organization Agreement Implementation ActGovernment Orders

12:25 p.m.

Bloc

Suzanne Tremblay Bloc Rimouski—Témiscouata, QC

Mr. Speaker, it is quite clear that it is imperative for Canada to legislate as soon as possible, calmly and in all fairness with respect to copyright. Of course, this is a very complex subject, but it will only increase in complexity as we travel further on the electronic highway. It will be complexified.

In terms of culture, I am particularly concerned when I hear Mrs. Hills tell us that neither the FTA nor NAFTA afford us any protection, while we had been led to believe they did. If indeed we are not protected under these agreements and the GATT agreement will prevail, this means in the short run that, before we know it, Canada will have been invaded by the American culture.

I would not want to be accused of trying to score political points here, but it is high time that the people of Canada, from Newfoundland to Vancouver Island, realize that the threat to English Canada is much greater than the threat to the francophone community in Quebec. The American culture is much more of a threat to you than to us. We are French-speaking and intend to remain so. That is why we want to leave this country which is oblivious of the fact that it is going to the dogs.

Wake up, English Canada, before it is too late and you have become Americans! Because we are your credit card, right now, and we are about to cut your financing.

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12:25 p.m.

Reform

Bob Mills Reform Red Deer, AB

Mr. Speaker, I listened with interest to the presentation and certainly would find areas of agreement in it. However I have a real concern when I hear about a bogeyman being out there in the world that is trying to close in on us and shut us down. I am not quite sure what the member was talking about concerning all the threats that exist outside the country.

We are becoming a smaller and smaller world and in fact have to start moving outward. We cannot stay looking in as we so often hear the Bloc talking about. We cannot hold everything in and keep everybody out.

I would like to know from the member exactly what the terrible threats are against our culture from outside the country other than from the Americans.

World Trade Organization Agreement Implementation ActGovernment Orders

12:25 p.m.

Bloc

Suzanne Tremblay Bloc Rimouski—Témiscouata, QC

Mr. Speaker, I think that the greatest threat to any country comes from the United States of America. Immediately after the war, the Americans sought to impose their culture upon Europeans countries, which were flat broke coming out from the war years.

The international response was: "No way. We will not let American films invade our market this easily". And the famous motion picture production agreement was signed.

When television broadcasting first started here, in Canada, the Americans attempted once more to invade our market, going as far as boycotting Canada for a while. But they eventually realized that we were not giving in and that we were protected against such an invasion by our regulations, so they accepted to sit down and talk. What the Americans are doing now is trying again, in a roundabout way, to impose their culture around the world, from coast to coast, without forgetting anybody, because they can afford to do this. And the day when only American films, soaps, news and variety programs can be seen around the world, this world of ours will no longer be a democratic world because democracy starts up here, in your head.

World Trade Organization Agreement Implementation ActGovernment Orders

12:30 p.m.

Reform

Bob Mills Reform Red Deer, AB

Mr. Speaker, I guess I am fairly shocked at that answer, that the terrible threat out there are the Americans.

I certainly cannot imagine why any part of Canada would want to separate. Obviously the rest of Canada is going to look less favourably on a province that would separate because it would destroy the country we believe in.

Then it will be forced to deal with the Americans and let them totally dominate its culture. The best way I see for Quebec to lose its culture is the threat of separation when it would be totally dependent on the United States.

I guess I just totally do not understand the answer that I just got to my question.

World Trade Organization Agreement Implementation ActGovernment Orders

12:30 p.m.

Bloc

Suzanne Tremblay Bloc Rimouski—Témiscouata, QC

It is quite simple, Mr. Speaker. We are francophones, while the Americans are English-speaking. We do not tune in to American stations. We watch the French CBC network, TVA and TQS, mostly because programs produced in Quebec is of such superior quality, as compared to American and English Canadian productions, that we feel no need to check what is on in English to spend a lovely evening in front of the TV. We watch our shows. In addition, we have concluded agreements with the international French-speaking community and gained access to TV5. We are happy with this. But English Canadians are asleep. They do not realize that the American cultural steam roller is at their door. Too bad for them if they would rather sleep and become Americans. As far as we are concerned, we plan to remain Quebecers and so we will, by leaving this sleeping country.

World Trade Organization Agreement Implementation ActGovernment Orders

12:30 p.m.

Reform

Jake Hoeppner Reform Lisgar—Marquette, MB

Mr. Speaker, it is my privilege and honour to be in the House today to address Bill C-57.

Just before I start my address I would like to make a couple of comments on the debate I have heard this morning. I have travelled quite a bit and I think culture is very important. I have never had the opportunity to meet a cow that speaks French or a chicken that speaks French or English. I have had different cultures fry bacon and eggs for me in the morning and I have always enjoyed them no matter with what type of vocabulary they were prepared.

I think this is something that sometimes overshadows the problems we really have. It is always important to me that we address the real issues and make sure those things that help us to survive or give us the opportunity to live in this country are not destroyed.

As we know, this bill implements Canada's full participation in the World Trade Organization. This is the result of our signing the Uruguay round agreement on the GATT in April this year.

The Uruguay round agreement was the largest and the most complex trade negotiation ever undertaken. The final package included more than 25 separate agreements. The nations that signed this agreement have made commitments to eliminate tariffs and other barriers to trade.

From Canada's standpoint this makes it necessary to amend at least 31 different statutes. Each country will have to amend its subsidy and support programs and its border control measures in order to harmonize them with an overall world standard.

Reductions will occur in the volume of subsidized exports.

These must be reduced by 21 per cent over a six-year period ending in the year 2001. Our country's expenditures on export subsidies must be reduced by 36 per cent over that same six-year period.

With a minimum reduction of 15 per cent for each commodity domestic support programs must also be reduced by 20 per cent over the six-year period. Regional development, research, environmental protection and farm income protection programs are exempt from this.

The system of quotas in supply management sectors will be replaced by tariffs that will be lowered an average of 36 per cent over the six years.

I must agree that supply management has very good protection under this tariffication program. I will generally limit my comments to the areas for which I am responsible as the Reform Party critic. They are the areas of agriculture, transportation and agriculture trade. These are truly areas where the nations that took part in this agreement have worked toward establishing a common set of rules to standardize their industries.

The Reform Party is very much pro free trade. We supported the free trade agreement with the United States and we support further extension of free trade in general through the NAFTA and the GATT.

With agreement on the Uruguay round I think we can look forward to more economic growth around the world. This will in turn lead to more investment and more jobs. About 50 per cent of Canadian farmers revenues are generated by exports. That means the agriculture sector will definitely benefit from increased access to foreign markets and from reductions in trade distorting subsidies in other countries which are the major reasons for low world grain prices.

The Reform Party supports several transportation reforms. The underlying principle on which we base our reforms is the belief that Canadian agriculture products should move to market by any expeditious mode, any route in any form or state of processing based exclusively on the principle of cost effectiveness and with the best interests of the consumer in mind.

This is one reason I have been a very strong supporter of the Hudson Bay Route Association in promoting the port of Churchill. When I look at the distance to Churchill and to the other ports I realize how much saving there is as far as rail line maintenance is concerned.

When I see statistics, and these are done by different investigations or task forces, that we could cut our costs of transportation by about $20 to $25 a tonne, I think it is not only cost effective but also environmentally friendly.

The other thing we have to realize is that we have a huge north in Manitoba where the native people depend on this type of transportation.

We should be striving to develop an atmosphere that provides for a viable, self-reliant market driven industry by creating an environment in which regional development is eliminated as a goal of transportation policy.

We support elimination of transportation subsidies but the funds should be redirected systematically to comprehensive safety net programs that are designed to defend Canada's food producers against matters over which they have little control.

We cannot eliminate transportation subsidies altogether without a definite long range plan to help the industry adjust accordingly. By reallocating the funds and paying them to farmers as part of a GATT-green program we can allow our economy to diversify and can give farmers the opportunity to take advantage of the market forces of the new international trading agreement.

One thing that was really impressive to me the other day when the former agriculture minister, Mr. Whelan, was a witness before the standing committee was how we have lost our secondary industries, our processors and are killing plants due to transportation problems and other types of subsidies.

It is of the utmost importance that we try to resolve that problem. Canada should endeavour to create a genuinely competitive transportation system. To achieve this end the deregulation of the railway system and the privatization of Canadian national rolling stock should be clearly defined goals.

I do not know what the answers are but when I looked at the speech that the transportation minister delivered the other day, seeing that the labour force is only 64 per cent as efficient on our rail lines as it is in the United States, I know that subsidies are not the only problem. When I also see the United States transports 66 per cent more freight per rail mile than we do, we also know there is another problem of moving the products in the most expeditious way.

In the area of grains, oilseeds and special crops, Canadian producers should benefit from a more stable trading environment. Greater opportunities for exports and hopefully international prices will increase over the six year transportation period. With the volumes of subsidized wheat exported from the United States and the European union expected to be reduced 40 per cent over the next six years, significant market shares should open up for Canadian farmers.

Once this agreement goes into effect, the United States will no longer be able to use section 22 against imports of Canadian wheat. I would note however that these trade agreements can mean little if the government does not have the fortitude to back them up. We have seen other GATT agreements and they have all been broken by the bigger trade partners. As Canadians that is one thing we have to be very concerned about.

We look back to the wheat pact this government not only agreed to with the U.S. but imposed on itself. We see an example of where we were within our rights under the free trade agreement but were bullied away. Article 705.5 of the Canada-U.S. free trade agreement states clearly that the cross border grain shipments can be restricted only if they increase significantly as

a result of a substantial change in either country's support programs for the grain in question. That was not the case last year.

Increases in wheat and durum to the U.S. last year were the result of an increased demand in the U.S. resulting from many factors. There was definitely no increase in Canadian support programs. This government agreed to surrender anyway. Mere days after this wheat pact occurred we saw the United States sign a wheat deal with Algeria with what had been a major Canadian market, export enhancement durum. The disturbing influence of the United States export enhancement program always allows it to distort grain markets.

If the Canadian government had not buckled under the U.S. pressure, its senators, congressmen and farmers would soon have realized how detrimental the export enhancement program really was. Canadian farmers would only have recouped a small percentage of damage done by the U.S. unfair trade practices.

Hopefully we will see it align its harmful subsidy program under the terms of this agreement. I would point out that although this was a bilateral dispute, there are provisions in the new rules for GATT that would force the United States to prove Canada was unfairly subsidizing exports.

Hopefully this provision will be helpful in avoiding the capitulation that we have seen in the past from our government. This was brought home again last week when the United States department of agriculture began to require that Canadian wheat farmers who export into the U.S. have end user certificates. This despite the fact that the wheat pact signed with the U.S. included a peace clause that stipulated that Canada would be free from further restrictions or harassment for 12 months.

It is just another example of how trade agreements are useless if the government seems either unable or disinterested in standing up for the rights of its citizens. A partner in a trade agreement cannot be allowed to be a bully. If this is allowed, the agreement will fall apart sooner or later.

All that Canadian farmers really want is a level playing field. They know they can compete and be the best in the world at producing, but they cannot be expected to continue to be at a disadvantage in trading situations. With a fair set of trade rules that apply equally to all countries across the board, we can achieve that level playing field.

Before these changes can take effect there will have to be major changes to the Western Grain Transportation Act. Any government policy that favours export shipments is deemed as an export subsidy by the GATT. Canada has maintained that the Western Grain Transportation Act provides internal support to farmers, but some countries, including the United States, insist that it provides export assistance.

Recent studies confirm that it will be viewed as an export subsidy by the GATT. This point emphasizes that the shortest route to an export port is the best route. Under the agreement there will be two systems governing WGTA subsidy restrictions; one will be for grain shipped through Vancouver, Prince Rupert or Churchill. This is specifically export grain that is subject to an export reduction subsidy under the GATT.

The second system is for grain shipped through Thunder Bay or Armstrong. This is deemed as grain for export or for domestic use, and therefore the transportation payments for grain movements under the WGTA can be considered either an export subsidy or domestic support, depending on which shipping route is used.

This clause seems to me to set up a recipe for a tremendous amount of conflict and disagreement. It can only be a detrimental clause in this agreement and will probably cause a lot of hard feelings, not just between producers but also between shippers in the different regions.

WGTA payments on grain that travels through the west ports are contingent on that grain being exported. The GATT was notified that these payments were export subsidies and will be subject to the reduction commitment of 36 per cent for export subsidies and also the 21 per cent reduction in the volume. WGTA payments on grain shipped through Thunder Bay have been notified to the GATT as green domestic support.

I do not know how we can resolve that issue. I think it will be challenged and history will tell us that it is improper and we will have to address it.

According to the GATT text the total Western Grain Transportation program is an amber domestic support program, while the portion related to grain movement to the west coast and Churchill is considered an export subsidy. Canada will have to make according changes to address the export subsidy provisions of the GATT.

The challenge for Canada is to make the WGTA GATT-green. The Reform Party had addressed this problem very well with a trade distortion program that we recommended for WGTA during the election campaign. It was well received. I think the government will sooner or later have to realize that this type of program is the only one that will really be fair and beneficial to western farmers.

Since the GATT requires a change in the WGTA subsidy payment method from paying the railways to paying directly to farmers, it is likely the only method that would comply with GATT requirements.

This is another area where the Liberal government will have to be tremendously diligent and innovative. It has to find a way to pay that subsidy out so that it does not distort the value of land, it does not distort taxation to municipalities because we could be find a number of different real problems.

As I stated, under GATT countries have agreed to reduce their export subsidies by 36 per cent. There are several questions that arise in this bill. I know that farmers in my riding will have a number of concerns.

For example, what safeguards are there for farmers that the railways will be obligated to move grain to other ports? Also, what safeguards do we have that our rail cars will not be going to the United States?

Last year was a disaster for grain transportation. One of the main factors was that the railways decided to chase business in the United States. With the longer car turnaround cycle, this took needed grain cars out of the picture and caused serious ramifications. What assurance do we have that this will not be repeated?

There are also reports that the railways do not have enough engines. I would like to know if anyone has looked especially at this problem. We have the rail cars but we do not have the engines to pull them. That does not give us a very effective transportation system.

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12:50 p.m.

Liberal

Gordon Kirkby Liberal Prince Albert—Churchill River, SK

Mr. Speaker, I would like to know this. You indicated earlier in your speech that grain or whatever agricultural product is being transported should be moved by whatever means to whatever destination that the market sees fit.

At the end of your speech, you are criticizing the rail companies for-

World Trade Organization Agreement Implementation ActGovernment Orders

12:50 p.m.

The Acting Speaker (Mr. Kilger)

Order. I would like to interrupt for a brief moment to remind members to make all interventions through the Chair and not directly to each other across the floor of the House.

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12:50 p.m.

Liberal

Gordon Kirkby Liberal Prince Albert—Churchill River, SK

Mr. Speaker, the hon. member mentions that the market should determine by what mode of transportation grain or agricultural products should be shipped. Near the end of his speech he indicates that there is a shortage of grain cars because the companies have decided to use them to ship grain into the United States. It would suggest that he has been quite inconsistent in his approach and I would like him to explain the inconsistency.

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12:50 p.m.

Reform

Jake Hoeppner Reform Lisgar—Marquette, MB

Mr. Speaker, I do not think I was inconsistent in my remarks. The reason why these grain cars have been diverted to the United States is that under the Western Grain Transportation Act the railways get paid on the amount of grain they move.

However if we do not have the engines to pull these cars, it does not do us very much good to try to get the amount of cars on the system that are needed. Therefore these cars that provincial governments, the federal government and the wheat board bought for the transportation system have been diverted across to the U.S. to gain income. They could not be used in Canada because of the lack of engine power.

It is financially beneficial to the railways to do that. Freight rates in the United States, the pace at which they move their cars, the time of turnaround for these cars are far superior to the Canadian system.

We exported some grain last year and the agent who was shipping that grain further down the line paid from $250 to $750 per car according to the need that he had for them. There was a tremendous amount of incentive to move cars that the railways could not use to the U.S. because of a lack of engine power and benefit financially by probably millions and millions of dollars.

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12:55 p.m.

Bloc

Jean-Guy Chrétien Bloc Frontenac, QC

Mr. Speaker, I wish to thank my colleague from Verchères for his excellent job in directing the debate on Bill C-57. I want to point out at the outset that the time has finally come to deal with the important matter of GATT.

Bill C-57 allows us to question some aspects of this agreement which remain what I would call grey areas. The purpose of my comments is not to oppose this bill, but to raise questions to show the members of this House that it is essential that we have enough time to consider this bill before approving it.

Quebecers have been open and in favour of free trade for a long time. You will recall that Quebec stood alongside the U.S. among the first free trade supporters and that, without their support, Canada might have refused to sign the free trade treaty. You certainly remember that, in the 1988 election, when the free trade agreement with the U.S. was the main election plank of the Conservative Party led by Mr. Mulroney, the former Tory leader found his staunchest allies in Quebec.

Despite the misadventures encountered by the Conservative Party during its first mandate, Quebecers gave their overwhelming support to the Progressive Conservative Party precisely because it advocated tree trade with the U.S. Quebec showed consistency by greatly facilitating the signing of NAFTA, and it now favours extending this agreement to other countries in Latin America.

It is not hard to see the logic behind this attitude. It is crucial for Quebec's small and medium-sized businesses to secure access to larger markets. Like all Quebecers, I am prejudiced in favour of free trade and therefore in favour of Bill C-57 before us today. What I would like, however, is enough time to look at it carefully, and the Liberal government's railroading of such an important bill is unacceptable.

When several major powers with sometimes conflicting interests sit around the negotiating table, we realize how difficult it is to please everyone. In the current economic context, it is essential to agree on how to develop free trade mechanisms. That is why this agreement can, if it is used properly, provide a basis for future trade negotiations.

The potential increase of $755 billion in international trade between now and the year 2005 is the most convincing guarantee of the positive impact of that agreement. The Final Act of the Uruguay Round signed on April 15, in Marrakesh, meets some of the expectations of Quebec and Canada. However, as regards agricultural issues, that agreement is far from making Quebec producers happy.

The structure of GATT has always differed from that of most major UN agencies. Even though Canada was among the 23 original members, it is now at the same level as the other 107 member countries. It is at the mercy of talks dominated by three major players: The United States, Japan and the European Community.

Like all the other members, Canada is somewhat subjected to the priorities and decisions of these giants, particularly the United States and the European Community. Yet, when a sector as important for Quebec and Canada as agriculture is targeted, the federal government must react and stand up for our producers.

Canada did very poorly when it came to protecting the interests of agricultural producers, regarding article XI, because it was trying to do two different things. Article XI essentially allowed Ontario and Quebec dairy producers to benefit from their supply management system. That initiative was obviously extremely important to them. In the east, producers wanted to keep their supply management programs, while in the west, they wanted new markets for their grain. Given its political situation, Canada tried to please both groups at the international level. In the end, it lost some of its credibility and more. The government found itself caught between a rock and a hard place.

As regards article XI, the government could not let down Quebec producers in the current political context. On the other hand, grain exports have very significant economic spin-offs. When you negotiate, you have to make concessions in order to make gains on those issues which are important to you. However, in order to do that, you must first define your priorities.

This example of double-edged sword is clear evidence that we have to put our house in order. The problem is a major one. How can only one voice protect the diverging interests of western and eastern producers?

The fight on Article XI also undermined Canada's credibility with its own agricultural producers. Indeed, the government tried to be reassuring by explaining that, in the short term, higher tariffs would provide producers subjected to quotas the same protection as under article XI. However, the government was silent on the medium term and the long term.

Even though the tariffs proposed by Canada to GATT were not opposed, there is no guarantee that we will not find ourselves in a perpetual trade dispute once they are implemented.

However, during the bilateral talks on durum wheat, Canada made concessions in order to avoid prolonging the dispute by going before a panel.

What will Canada do when the Americans revive the debate on quota production and tariffs on yogurt and ice cream, for instance? Who will decide whether GATT or NAFTA takes precedence? These issues are still unclear.

We need assurances that the government is prepared to answer some very specific questions. You may recall, Mr. Speaker, that during the last election campaign, in the fall of 1993, the Prime Minister, the leader of the Liberal Party, was travelling across Canada and saying: "I will not sign NAFTA unless everything is reviewed from A to Z. And I will negotiate". A few weeks after he was sworn in, the Prime Minister went on a short trip to the United States, came back and quickly signed NAFTA.

Just another instance of the past being no guarantee of the future.

What will Canada do when the Americans revive the debate on yogurt and ice cream, for instance? Who will decide whether GATT or NAFTA takes precedence?

We need assurances that the government is prepared to answer some very specific questions. We must go to committee to assess the impact of this bill. We must also keep abreast of steps being taken by our principal trading partners to conform to GATT. The Canadian government should be able to tell us, for instance, whether it and the American government agree on the definition of dumping.

Although we realize that our agricultural policies must conform to our international trade agreements, the government must not take advantage of our obligation to conform to GATT to justify certain measures to reduce the deficit. In many cases, Canada has already reduced its domestic subsidies by more than 20 per cent, which means that for this round of talks, it has met its commitments for subsidy reduction.

If we look at the amendments to the WGTA to harmonize it with GATT requirements, a number of issues are still outstanding. We still do not know whether the Crow benefit will be transferred to producers or how that will be done. This matter should be dealt with immediately. The Minister of Transport, who has been responsible for the Crow so far, announced last

spring that he would not renew the subsidy. His colleague, the Minister of Agriculture and Agri-Food, was quick to announce that his department would be responsible for the subsidy and would, we may assume, make it more effective by making certain changes.

Since that time, the minister has asked the Producer Payment Panel to examine the question. This review led to recommendations about which the minister has not said a word yet. About the Crow's Nest Pass Rates, he told the magazine Le Coopérateur last June: ``Although this problem has been around for many years, we must, for various reasons, tackle it without delay. Not the least of these reasons is the GATT Agreement''.

We, however, still do not know anything about the minister's intentions. It must also be pointed out that Quebec and Canada will benefit from stronger trade regulations. In the last 15 years, several member states, in particular our American neighbour and the European Community, made excessive use of protectionist measures. Clarifying the GATT regulations on the definition of the types of subsidies that are allowed, compensatory or prohibited and the use of countervailing and anti-dumping duties largely favours an international system based on relationships dictated by law rather than force. For smaller states like Quebec and Canada, this strengthening of trade regulations is a safeguard against giants like the United States.

There may be many advantages to an agreement such as the one we are discussing this afternoon. In any case, there is no doubt that, given the internationalization of markets, we must take our place on the international scene and take advantage of trade treaties. Agriculture is only one component of the agreement but its place in Quebec's and Canada's economy does not allow us to minimize the impact of measures affecting this sector. Losing Article XI will require us to restructure our agricultural sector. However, only the future will tell us whether these adjustments were worthwhile. I still think that the grey areas or outstanding problems justify our asking that some aspects of Bill C-57 be clarified in committee.

Furthermore, I find it hard to understand why it is so urgent to conclude this debate when the two giants, the U.S. and Europe, are taking their time. The Americans are moving slowly since some members of Congress are in the middle of an election campaign and this type of agreement is not very popular with voters. Europeans, for their part, have turned this into a power struggle between the European Commission and the Council of Ministers. If this bill is really acceptable, why is it so urgent?

Mr. Speaker, thank you for your attention, and I must again in closing point out that my colleague from Verchères is doing an admirable job of dealing with this matter, for which he is responsible, in order to defend Quebec's major interests.

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1:15 p.m.

Reform

Ian McClelland Reform Edmonton Southwest, AB

Mr. Speaker, I have listened with considerable interest as the debate has unfolded today. The Bloc speakers have been virtually unanimous in their support of supply management.

Those who are consumers have an opinion of supply management that is somewhat different from the opinion of those who are producers. It depends whether they are getting paid or are paying for the product under supply management. Supply management in any other industry would be considered price fixing.

Could the member comment on his perception in Quebec, leaving aside the relationship between Quebec and the rest of the country? Is it his opinion that supply management is a net benefit and, if it is not a net benefit, given that consumers are paying a premium for dairy products and poultry products their costs of living are greatly increased?

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1:15 p.m.

Bloc

Jean-Guy Chrétien Bloc Frontenac, QC

Mr. Speaker, I wish to thank my distinguished colleague from the Reform Party for his very pertinent question. Nevertheless, as you know, three agricultural sectors in Quebec are covered by supply management: poultry, eggs and milk. Supply management in these three fields is so well structured that every month delegations from the UPA, the Quebec farmers' union, receive invitations from other countries that want to know how we could have set up such an effective supply management system.

Mr. Speaker, do you know that without this supply management system in Quebec and in Ontario, no farmer could make a living from producing poultry, eggs or milk? Why? Because we would have been invaded by the Americans. Last week, the president of the UPA told me that he visited a farm in the United States that raises 100,000 steers a year. A hundred thousand!

He told me that Quebec does not produce 100,000 steers a year. Down there, a single huge farm produces more than Quebec does. But once agriculture in Quebec and Ontario is killed off, prices would not be set by government bodies in Quebec or Ontario but by American farmers. The independence of a country is at stake.

When a country cannot feed its people, it is weak. If we want a strong country, this strength must be based on an agricultural system that is competent, productive and also versatile. Thanks to supply management, farmers enjoyed some security and could invest and acquire farms and make them profitable. As for milk production, because I am more familiar with this field, I could tell my distinguished colleague that some farmers have been bled white. They have mortgaged their farm to buy the right to produce-they have bought quotas.

This past weekend, I met one of these farmers, who estimates that his quota is worth $750,000. Three quarters of a million dollars and he is afraid that when the tariff system is well in place, quotas will lose their value. Quotas could eventually disappear.

I have been asking the same question to Agriculture Canada officials week after week. I even asked the agriculture committee and I was told: "Time will tell. One thing is sure: no problem is to be expected for the first six years". But what about the seventh year or the tenth? When a farm producer has borrowed huge amounts to buy this piece of paper allowing him or her to have 25 or 30 more cows but is told: "Look, ten years from now, your $750,000 quota may not be worth a penny", is that reassuring? Would you find it encouraging, Mr. Speaker, if you were told: "Your pension plan that you have accumulated here, at the House of Commons, will not be worth a penny, six or seven years down the road"? This is hypothetical. It may be worth something, but then again it may not. You would be concerned, I am sure you would.

Farm producers need reassurance. When you see a farmer with a production quota worth $1.5 million or $2 million and they come and tell him: "We expect no problem for the first six years. Later on, we will have to see", take my word for it, supply management becomes awfully important.

On predatory pricing, I cannot say that I share the views of my colleague from the Reform Party, which reflect a lack of knowledge of the situation in Quebec. To get a one cent per litre increase, milk producers have to go before a Quebec government agency called dairy commission where consumer associations, the farm producers association and the Dairies' Association are represented, and negotiate. "Our production costs are such and such, and there has been no increase in the past six months to a year". Consumers say that milk already costs too much and that its price should be reduced, not increased. Farmers want a five-cent increase. And then you have UPA representatives trying to come up with a compromise. Finally, farmers ask for a five-cent increase and often get only a one-cent increase.

So, if you come to Quebec or to Ontario, you will realize that farmers do not work 40 hours a week and then rest. They usually work seven days a week, 365 days a year, along with all their family, and still cannot afford to spend three weeks or a whole month in Florida or in Europe. They have to stay on their farm to operate it.

I would now like to give my view of the outlook for supply management. Of course, I would like the government to stand up and tell us what will happen to supply management six or seven years down the road. Farmers have the right to know. In fact, they represent the class of workers in Quebec for whom we should have the most respect. According to statistics for all of Canada, the people who work on farms are those who work the highest number of hours in Canada.

On average, Quebec farmers work more hours than other Canadian farmers, precisely because we have a more diversified agriculture.

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1:20 p.m.

Bloc

Stéphane Bergeron Bloc Verchères, QC

Mr. Speaker, I would like to make a brief comment.

I am a bit overwhelmed by the very eloquent speech that we just heard from the hon. member for Frontenac. My colleague focused on what was, I think, the main problem for Canada in the Uruguay Round, namely the double talk used by the federal government in trying to protect the interests of producers in Canada and Quebec, those of grain producers from the western provinces on one hand and those of poultry and dairy farmers and other producers on the other hand.

It must be said that this double talk, this double standard still exists today. The problem is still there and it became obvious when we asked the government very recently, as my colleague was saying, which rules would have precedence, the NAFTA rules or the GATT rules, with regard to tariffs on dairy products, poultry, etc.

The problem that exists right now is related to the fear of seeing that western grain production will be played off against Quebec's egg, milk and poultry production in future negotiations with the United States. At the present time, the United States imposes limits on Canadian grain imports and the Canadian government could very well be tempted to reduce the tariffs that will be imposed on Quebec's agricultural products in the place of quotas in order to obtain greater access to the American market.

The Canadian government could be tempted to reduce its tariffs in order to open the American market to Canadian grain. The danger is there and the double talk to which the hon. member for Frontenac was referring still exists. It is important to note that we are well aware of the problem and that we will watch the government very closely on this issue.

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1:25 p.m.

Bloc

Jean-Guy Chrétien Bloc Frontenac, QC

Mr. Speaker, my colleague, the hon. member for Verchères, is absolutely right. This reminded me of what my Reform Party colleague said earlier about high prices.

I went shopping with my wife on Friday evening and I saw Prince Edward Island potatoes at a price which was exceptionally high for the season. Three years ago, there was an oversupply of potatoes in New Brunswick. The Canadian and New Brunswick governments of the time bought the potatoes to bury them in an open dump. On the CBC news, they showed us hundreds and hundreds of thousands of tons of potatoes being bulldozed

into a hole while we could have fed the starving people of the world with those vegetables.

To support the price of potatoes, our two governments had bought the farmers' production. They deliberately kept the potatoes from being marketed precisely to create scarcity. Sometimes we talk about environmental protection. Well it is certainly not very clever to bury potatoes, and not even make compost, when you think there are millions of people, tens of millions of people who cannot even eat a meal a day. And here, in New Brunswick, three years ago, we buried hundreds and hundreds of thousands of tons of potatoes.

When we talked about supply management, do you not think that a supply management system for potatoes would have been much better? Of course in Quebec, we could produce 25 per cent more milk if we wanted to. But why produce 25 per cent more milk if you cannot sell it?

[English]

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1:25 p.m.

Reform

Ian McClelland Reform Edmonton Southwest, AB

Mr. Speaker, it is a pleasure to speak in the debate.

I always enjoy the interventions of my hon. colleague from Frontenac. I should point out to him that I believe the potatoes to which he was referring that were buried in Prince Edward Island were not buried to support a price. They were seed potatoes and there was a problem. There was a potential for disease and in order to protect the integrity of Prince Edward Island seed potatoes, which is among the highest in the world, it was determined that it would be best to do away with the potatoes. It was not a question of price fixing.

I also thought this might be the crowning glory and achievement of the Bloc. We have heard a lot of statements from the Bloc in this House from time to time, some statements more or less preposterous than others. I have to tell you when the hon. member for Frontenac said that we have to protect supply management because the farmers in Quebec worked harder than any other farmers, I mean that was it. How does he know? I really do believe that farmers as people and business persons in our country do work very long hours, but don't we all? I really do not think the farmers in Quebec work any harder than the farmers anywhere else in the country.

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1:30 p.m.

An hon. member

How can you know?

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1:30 p.m.

Reform

Ian McClelland Reform Edmonton Southwest, AB

Obviously I cannot know. I just do not think that is one contest we need to get into. This debate has been most enlightening today because we have an interesting separation.

We are talking about whether or not Canada should sign into the World Trade Organization. The actual title of this bill is the World Trade Organization Agreement Implementation Act. It is at the second reading stage. We support this bill.

There is a truism about being competitive: If you do not compete, you cannot be competitive. Therefore we have to have within our psyche the desire to compete and to be competitive. That is the dichotomy which has come in this debate thus far today. There are members of the Bloc who are by and large supportive of the notion of free trade and expanded trade, but with a severe reservation because of its impact on supply management.

It is fair to say that as a result of the implementation of the GATT agreement supply management will have seen the last of its days in Canada. Let there be no mistake: Supply management is price fixing. If it was supply management of photo finishing, it would be called price fixing. If it was supply management of shoe manufacturing, it would be called price fixing.

Supply management creates a situation whereby a limited number of producers have access to the market exclusive of anyone else. They are thereby provided a guaranteed return on their investment. What happens of course as a result of that is that everybody else who makes a living based on that investment also has a guaranteed return on their investment, the feed suppliers, the implement suppliers, everyone down the line. You know who gets it in the neck? Mr. and Mrs. Joe Consumer in the land.

If we want a situation where we are going to have industries which are non-competitive, where we are going to have winners and losers in society picked not by the marketplace but by the government, then supply management is a textbook illustration on how to do it. Therefore, one of the main beneficial and most important things that will come as a result of signing this agreement will be the ordered timely end of supply management.

This whole exercise as many people know started in 1944. It was called the Bretton Woods agreement. It was determined that at the conclusion of the second world war it might not be a bad idea if the nations of the world figured out some sort of an arrangement whereby they could learn to trade with each other under certain rules and conditions that might help to prevent future wars. That was essentially the reason behind the United Nations and the Bretton Woods agreement.

Three major decisions were reached at Bretton Woods in 1944. They were the International Monetary Fund, the International Bank for Reconstruction and Development, and the International Trade Organization.

The International Trade Organization did not really get off the ground but the successor, which is the GATT, did. To most people GATT is an obscure term. It stands for General Agreement on Tariffs and Trade. It really has a tremendous impact on the lives of all Canadians daily. It is not just an obscure international agreement that we are signing. It is an agreement that will fundamentally change the way we function as a nation.

As Canada goes forward into the next century it is perhaps a very timely agreement for us to be signing.

We should compare our nation today with our nation when we got involved in the free trade agreement. Going back to the time when we got into free trade with the United States it was a major leap of faith for most Canadians. It said we were going to start to break down the trade barriers within Canada and start competing on our own as a nation within the world.

First we had to compete with the United States. Then we went to the North American free trade agreement in which we decided we were going to compete with the United States and Mexico. Now we are going one step further with the GATT which means we will be competing sooner or later with everyone in the world.

What does that mean to us here in Canada? How does it affect us when we are trying to get by, trying to get a job, trying just to pay our rent? This is it. If we are not the very best that we can be, if we do not as a nation and as individuals strive for excellence, we are going to be buried in the world. We can no longer hide behind tariff barriers.

The tariff barriers in Canada existed for years and years. They created artificial subsidies. The unnatural but natural conclusion were things like the back-in agreements or the backflow where empty grain cars go to Thunder Bay and then come back so that the railways can get a subsidy, so they can get more money for some God forsaken government program. We have the situation where grain grown in western Canada is subsidized to be shipped east. It goes into a feedlot in central Canada so that we can sell beef raised in central Canada on western grain rather than having the beef fattened on western grain in western Canada and then sending dressed beef to the markets, a natural advantage.

All of these distortions that are built into our trade agreements within our own country serve one purpose only: to make us less competitive on the world stage. That is why it is so important that we as Canadians in the present supply managed sectors and all other sectors understand the absolute necessity of becoming competitive as world traders.

A quarter of our nation's wealth is derived from international trade. Eighty per cent of our international trade is with the United States. Twenty-five per cent of that trade is internal trade within branch plants.

In last Saturday's Globe and Mail there was a business report from the Royal Bank. I will just show it very briefly for those in television land-