Debates of June 15th, 1995

Cn Commercialization Act

[Some hon. members]

Yea.

[The Speaker]

All those opposed will please say nay.

[Some hon. members]

Nay.

[The Speaker]

In my opinion the nays have it.

[Some hon. members]

On division.

(Motions Nos. 2 and 3 negatived.)

[The Speaker]

My colleagues, we will now proceed to Group No. 2 which is Motion No. 5.

[Jim Gouk, Reform, Kootenay West—Revelstoke, BC]

Motion No. 5

That Bill C-89 be amended by adding after line 13, on page 7, the following:

"11.1 (1) On continuation day and during the initial period following continuation day, neither the Minister nor CN shall sell or otherwise dispose of shares to persons who are not Canadian persons.

(2) In subsection (1)

"initial period" means ninety days or such longer period as is set by order of the Governor in Council;

"Canadian person" means a ) an individual who is a Canadian citizen or who has the right of permanent residence in Canada, or b ) a corporation registered in Canada the majority of the voting shares of which are held by

(i) individuals mentioned in paragraph ( a ), or

(ii) corporations, the majority of the voting shares of which are held by individuals mentioned in paragraph ( a ).''

Mr. Speaker, I would like to explain why I have put forward this motion. It addresses the very point that the parliamentary secretary addressed when giving his explanation of the 15 per cent under the former grouping.

This will protect and give an opportunity to Canadians to buy shares and address the concerns that could only be dealt with by putting in another restriction. I would defer to my hon. colleague from Lethbridge for debate on this motion.

[Ray Speaker, Reform, Lethbridge]

Mr. Speaker, I would like to make a few remarks. First of all, I would like to express my support for the privatization of CN. This is the proper move at this time.

To put it in economic terms, for example, the Government of Canada at the present time has a $550 billion debt. That is of major concern to Canadians. Canadian National has an accumulated debt of $2.5 billion which is an encumbrance on the people of Canada. It is time to privatize and bring an operation like this one into the private sector so that it works under the rules of the private sector in terms of its financing and its efficiencies.

The amendment we are speaking on tonight, which puts the shares out to Canadians in the first 90 days, is a good one. If the capital is in Canada for individuals or corporations in order to buy Canadian National and to operate it as a Canadian entity, that would be a good thing. It would be divided among Canadians in a variety of ways.

Let us give Canadians the first opportunity. After the 90 days we could open it up so those international people who wish to invest can do so and in a very proper and positive way participate in the economy of Canada.

[Joe Fontana, Liberal, Parliamentary Secretary to Minister of Transport]

Mr. Speaker, Motion No. 5 proposes that the shares of CN be sold only to Canadian individuals and corporations for the first 90 days that the shares are sold on the stock market. It would negatively affect both the value the government would receive for its shares in CN and its ability to sell 100 per cent of its shares.

Given the size of the CN initial public offering it is unlikely that the Canadian equity markets could absorb the issue alone. Therefore, in order to sell 100 per cent of CN for a value which maximizes the return to Canadian taxpayers, foreign investors will need to participate in the share offering.

Changing this clause, as suggested by the Reform Party in Motion No. 5, would be viewed as foreign ownership restriction. Any restriction on the ability of foreigners to participate in the sale of CN would affect value and the shares would have to be sold at a significant discount in order to sell them all exclusively to Canadians.

Given the likely size of the share issue, all Canadians who so desire will have an opportunity to purchase CN shares, resulting in broad Canadian ownership of CN stock. An amendment such as suggested in Motion No. 5 is therefore unnecessary.

[The Speaker]

Is the House ready for the question?

[Some hon. members]

Question.

[The Speaker]

The question is on Motion No. 5. Is it the pleasure of the House to adopt the motion?

[Some hon. members]

Agreed.

[Some hon. members]

No.

[The Speaker]

All those in favour of the motion will please say yea.

[Some hon. members]

Yea.

[The Speaker]

All those opposed will please say nay.

[Some hon. members]

Nay.

[The Speaker]

In my opinion the nays have it.

[An hon. member]

On division.

(Motion No. 5 negatived.)

[The Speaker]

We will now deal with Group No. 3 which contains a number of motions.

[Jim Gouk, Reform, Kootenay West—Revelstoke, BC]

moved:

Motion No. 6

That Bill C-89 be amended by deleting Clause 12.

Motion No. 7

That Bill C-89, in Clause 12, be amended: a ) by replacing line 14, on page 7, with the following:

"12. (1) Subject to subsection (2), the Minister, with the approval of the"; and b ) adding after line 30, on page 7, the following:

"(2) The aggregate amount of all debts of CN owed to Her Majesty in right of Canada may be reduced only by application of the proceeds of sales referred to in paragraph (1)(c), unless the amount to which it is so reduced exceeds a level that an accredited bond rating agency has certified to the Minister in writing as a level that would ensure for CN a bond rating no lower than BBB, in which case the Minister may make such further payment referred to in paragraph (1)(c) only to the extent necessary to reduce the aggregate amount to the level so certified."

[Paul Mercier, Bloc, Blainville—Deux-Montagnes, QC]

moved:

Motion No. 8

That Bill C-89, in Clause 12, be amended: a ) by replacing line 14, on page 7, with the following:

"12. (1) Subject to subsection (2), the Minister, with the approval of the"; and b ) by adding after line 30, on page 7, the following:

"(2) No agreement or arrangement under paragraph (1)( a ) or ( b ) or payment under paragraph ( c ), may be entered into or made until a ) the Minister has laid before the House of Commons a proposal that the agreement or arrangement be entered into or the payment be made, b ) the proposal has been referred to such committee as the House may determine, c ) the committee has reported that it approves of the proposal, and d ) the House has concurred in the report.''

Motion No. 9

That Bill C-89 be amended by adding after line 36, on page 7, the following new Clause:

"13.1 No transaction that is made by the Minister or CN at any time before the first day that more than fifty percent of the shares in CN are owned by parties other than Her Majesty in right of Canada a ) that would transfer to Her Majesty in right of Canada any part, subsidiary, operation or property of CN with a value exceeding one million dollars, or b ) that would transfer to a party other than Her Majesty in right of Canada any part, subsidiary, operation or property of CN with a value exceeding ten million dollars,

shall be entered into until c ) the Minister has laid before the House of Commons a proposal that the transaction be entered into, d ) the proposal has been referred to such committee as the House may determine, e ) the committee has reported that it approves of the proposal, and f ) the House has concurred in the report of the committee.''

Motion No. 10

That Bill C-89 be amended by adding after line 36, on page 7, the following new Clause:

"13.1 (1) No transaction that is made by the Minister or CN at any time before the first day that more than fifty percent of the shares in CN are owned by parties other than Her Majesty in right of Canada a ) that would transfer to Her Majesty in right of Canada any part, subsidiary, operation or property of CN with a value exceeding one million dollars, or b ) that would transfer to a party other than Her Majesty in right of Canada any part, subsidiary, operation or property of CN with a value exceeding ten million dollars, shall be entered into unless c ) the Minister has referred the matter to the Auditor General of Canada, and d ) the Auditor General has reviewed the transaction and prepared and caused to be laid before the House of Commons, a report stating that, in the opinion of the Auditor General, the transaction is in the interest of CN and of Canada.

(2) The Auditor General shall cause the report to be laid before the House of Commons within fifteen days after the date of referral by the Minister."

[Michel Guimond, Bloc, Beauport—Montmorency—Orléans, QC]

moved:

Motion No. 11

That Bill C-89 be amended by adding after line 36, on page 7, the following new Clause:

"13.1 (1) The pension plan for employees of CN known as the CN Pension Plan shall continue to exist and be funded and be administered by the CN Pension Board in accordance with the rules in existence immediately prior to the coming into force of this Act.

(2) The CN Pension Plan shall not be amended without the agreement of the CN Pension Board."

[Jim Gouk, Reform, Kootenay West—Revelstoke, BC]

Mr. Speaker, again I would like to say a few words in explanation of my amendments.

During the course of committee investigation the minister came before the committee and stated that it was his intention only to pay off enough debt after taking off the assets and resources of the company to allow the company to reach a BBB credit rating.

I have accepted this but wish to restrict the minister to ensure that he will do no more than what he said. Given that he has made this statement, it is very reasonable to ask him to make that commitment by way of amendment to the legislation. However, if he is not prepared to do this, then I would suggest that we should take away the power for him to arbitrarily pay off any amount of debt he chooses.

With regard to Motions Nos. 8, 9 and 10 I have looked at them but I have not been able to find my way clear to recommend that we support them. However I think Motion No. 11 by the Bloc Quebecois is a good motion. It deals with a sensitive subject. A lot of people will be reassured without causing any problems, and I recommend we support that motion.

Beyond this I would defer to my colleague from North Island-Powell River on debate.