House of Commons Hansard #221 of the 35th Parliament, 1st Session. (The original version is on Parliament's site.) The word of the day was trade.

Topics

Agreement On Internal Trade Implementation Act
Government Orders

June 19th, 1995 / 4:55 p.m.

Reform

Werner Schmidt Okanagan Centre, BC

Mr. Speaker, I rise to debate Bill C-88, a bill to implement the internal trade agreement signed last July by the various participants.

Last July the Prime Minister and the premiers came together in Ottawa to announce an agreement had been reached to break down the barriers of internal trade between provinces.

Canadians were hopeful that at last barriers would come down and they would have free access to goods and services, jobs and the competitive marketplace because the trade barriers between provinces would be broken down.

The agreement reached was said to be an important part of the Liberal promise to build an innovative economy within which all Canadians would benefit. It was touted as a vision for the future and it reflected well on the premiers and the Prime Minister. Canadians were happy.

Today, almost a year later, the euphoria has died and Canadians are questioning the vision they saw one year ago. Last July the premiers and the Prime Minister held up the internal trade agreement as a reflection of unity but Quebecers did not see it that way. They responded by electing a PQ government in their province. The premiers and the Prime Minister held up the agreement saying: "This is what we can do for one another". The then premier of Quebec was defeated in the subsequent election.

They said the agreement was a reflection of growth, but the inadequacy inherent in maintaining the status quo saw little job creation. Within the last five months job creation has dwindled to practically nothing.

Last July the premiers and the Prime Minister held up the internal trade agreement as a reflection of stability, but months later Moody's bond rating service put Canada on the alert then downgraded our credit rating because our debtload remained too high.

Today this House is being asked to ignore those undercurrents and put that internal trade agreement into practice by passing Bill C-88. The Reform Party of Canada cannot do this. We cannot support an agreement that so blatantly ignores the necessity to pull this country away from the edge of permanent economic instability. We came to Ottawa to prevent that. We came to champion the right of Canadians to a balanced budget, to deficit reduction, to more effective government, to a productive and stable economy and to national unity.

Despite the rhetoric that flies across this room every day, we have made every effort to keep that promise. By challenging this bill we remain true to that mandate given to us by our constituents who have asked again and again for freedom from internal trade barriers.

By not supporting this bill we know we run the risk of being accused of not supporting free trade in Canada. I ask Canadians to recognize that kind of accusation is a political move and not the truth.

Let us make it absolutely clear this afternoon that the Reform Party of Canada is committed to the removal of interprovincial barriers to trade through agreements among the provinces but we will not support any so-called agreement under the guise of freer internal trade when that agreement does not achieve this.

The Reform Party cannot support any internal trade agreement that does not once and for all recognize that the barriers to internal trade in this country are killing our marketplace. Higher taxes, a higher cost of living and an uncompetitive marketplace create a heavy and unnecessary burden on Canadians and guarantee the deterioration of our economy.

Bill C-88 I subdmit is a disguise for a non-agreement which purports to improve internal trade in Canada and improve our economic stability but does neither.

The Liberal government won an election on a promise to build a better Canada, to get Canadians employed and to ensure a stabilized economy. If this government truly seeks revitalization then it must admit that this agreement fails to keep that promise because it fails to eliminate internal trade barriers in this country.

I would like to believe that the government is committed to the future of this country but I cannot as long as politically motivated agreements like this one are held up as agreements. Canadians are looking for strong leadership, not the kind of leadership that is acted out every night on television, but real leadership, the kind that works hard behind the scenes at achieving what is best for our country. For months we were led to believe that this was happening and last July we had hoped to see the effects, but it did not materialize. What we witnessed was a photo opportunity and nothing more.

Canadians did not see progress. The government did not realize our goals. It did not put our economy on a better footing and Canadians continue to pay the price.

Some may think it is easy for me to stand or to sit on this side of the House and criticize the government for failing to produce an effective agreement. I am well aware of the difficulties involved in negotiating with many different parties. I know it is important to ensure fairness and the democratic process and that these be observed and to avoid dictating what is best. However when the stakes are high, when the best interests of the nation lie at the mercy of the government leaders, then I know that the time has come and the place has been arranged for strong and courageous leadership.

If I have one criticism this afternoon it is that the Liberal government failed to provide the necessary leadership. In an effort to avoid creating enemies it opened up a nothing lost, nothing gained, be happy approach. What we got was nothing gained and almost everything lost.

This country is threatening to break apart. Canadians no longer have that sense of unity they should have. Now more than ever we need leadership that will bring us together at every possible opportunity. Failure to bring about a good internal trade agreement only serves to enforce our differences, create more barriers and reveal a lack of confidence in ourselves.

The internal trade agreement was a failure. The blame must lie squarely and we must lay it squarely on the federal government. I believe the government failed in its mandate to first and foremost preserve the country. The government not only had an obligation to the future of the country to see that this happened, it had a vision to carry out, a vision that was created many years ago when the nation was first born.

In 1867 Canadian leaders saw fit to entrench within the Constitution these wise words: "All articles of the growth, produce or manufacture of any one of the provinces shall, from and after the union, be admitted free into each of the other provinces". That is section 121 of the Constitution Act. In that section there was an agreement that was a true reflection of unity and a commitment to growth and stability.

Perhaps in those days it was easier to recognize the danger. In those days, in our bid to resist American pressures and maintain a distinct culture, we could see that strengthening our internal economic ties would be the foundation of our identity and our unity. In the Constitution was laid the reflection of courage and co-operation, of government doing what was right and fair for the Canadian people and an example of strong leadership.

Today we face a greater danger. It is a danger because we failed to recognize it ourselves. We are spurred on by protectionist attitudes that really serve no one. We have reached a critical point and it is time for strong leadership to prevail.

We are a big country, a beautiful country. We have a small population. We are a wealthy country. However we are not an economic power in the world. We are a vast land of people with different orientations. That is our identity. However we have lost sight of the common ground: our economic alliance, one with another.

In 1867 the leaders of the day recognized the need for leadership and an economic alliance. They added section 91, which declared that the exclusive legislative authority of the Parliament of Canada extends to the regulation of trade and commerce, the very essence of what we are talking about in Bill C-88 and the internal trade agreement.

The Constitution recognizes that government leadership must begin by assuring economic stability to ensure the survival and unity of our country. That is why the Reform Party of Canada has made it the foundation of its mandate and why every day in the

House we fight for economic stability. It is why we debate the bill and why we cannot support it, because the government has failed to see the urgency in removing internal trade barriers for the good of the economy and has failed to reaffirm the objectives of section 121 of the Constitution, the free flow of articles of growth, produce and manufacture.

By ignoring the precedent of section 121 of the Constitution the successive governments of the country have assured an atmosphere of protectionism, disunity and almost certainly economic vulnerability. That is why this agreement and this bill fall short.

My colleagues have stood during this debate and pointed out a number of deficiencies inherent in the agreement and in the bill. One emotion that has prevailed throughout is frustration. Their frustration comes from not being able to say Canada is a nation of free trade. Many are embarrassed to acknowledge that there is freer trade north and south between Canada and the United States than there is east and west among the provinces and territories of Canada. They are frustrated, as are all Canadians, because they can see the way toward economic rejuvenation being thwarted. They can see the opportunities that exist for them in their ridings and in their home industries if those barriers are removed, as local industries are given a fair and competitive chance to become national industries. They are frustrated because they must answer the difficult questions of constituents who want to know why their industries are not doing better and why those industries are laying off people in times when the government purports that jobs are being created.

If this nation would commit to breaking down internal trade barriers Canadian industries would flourish. Entrepreneurs would find a reason to create innovation. Investors would find a reason to support the innovation and innovation would build the economy.

Once we have created an innovative economy internally we will be poised to enter into the global marketplace and we will succeed there. In the process, we will have obtained many things: a strong economy and more importantly pride in ourselves and confidence in our abilities.

Canada has the potential to be more than just a collection of small protected markets, but governments must implement the means that will change what currently exists. I believe Canadians deserve that chance. Canadians deserve the rewards of an open market, job mobility and economic stability, not the provincial protectionism that creates high taxes, low productivity and unemployment. This agreement will not provide those rewards and this bill will not implement an agreement that will provide them.

It is time to stop hiding behind regional development schemes, equalization payments and cost sharing agreements. It is time the inefficient government policies were thrown away rather than contributing to the financial burden on Canadian taxpayers. It is time the provinces stopped working on the false premise that exclusivity will protect their own markets. It is time the inherently weak marketplace created by protectionist policies gave way to vital marketplaces, strong, self-sufficient industries and real job creation.

The bond markets have made it clear that we can no longer continue the premise of borrowing more and more and creating a perpetual debt. The demise of our economy will not come some day, it will come soon because we have failed to act as a nation and correct the wrongs that pull us down. It is time to revive our nationality so we can say we have our wealth in common not our debt.

It is time for strong leadership to set in motion the process of eliminating internal trade barriers. The strong leadership we want will pull together the commitment of governments at all levels, business, labour and taxpayers, all the contributors. Together we can build a common market, establish compatible standards of licensing, certification, education and create the mobility and open markets that will become the fertile ground for new industries and generate innovation.

It is time to shut out the protectionists, the naysayers and weak leadership, the businesses built on protectionism provided by internal trade barriers and the governments with poor, ineffective policies which cost the taxpayers. Those things should be stopped.

The plan has been laid out for us. In 1992 the committee of ministers for internal trade adopted these guiding principles, which we should note carefully: one, that governments treat people, goods, services and capital equally irrespective of where they originate in Canada; two, that governments reconcile standards and regulations to provide for the free movement of people, goods, services and capital within Canada; three, that governments ensure that their administrative policies operate to provide for the free movement of people, goods, services and capital within Canada.

Those are strong, good, solid principles. These were the guiding principles necessary to ensure a successful agreement but they were not implemented. It is time for this government to show leadership that is necessary to enact these principles.

I say to the Liberal government, tear up Bill C-88, go back to the bargaining table, apply the principles of the CMIT and the spirit of the Constitution and build something meaningful, something we can support. Fashion an agreement that will build trust among the provinces and give them the courage to break down the barriers. Let us do what is right for Canadians and rebuild trust in our democratic process. Let us acknowledge Canadians' right to economic unity and their desire to declare their sovereignty.

Canadians will not be served well should this bill pass. It does not reflect the government's commitment to building an innovative economy, except for one exception which is the deletion of part III of the vehicle and transportation act. This particular section within the proposed bill is the only section that was not part of the internal agreement negotiated a year ago. It is also the only provision in this act that does in fact put into practice the provisions of sections 121 and 91 of the Constitution Act. Other

than that this bill does not reflect the process which begins on the right footing.

It does not reflect a country built on the principles of freedom, democracy and unity. In fact it goes beyond that. There is a provision within the bill which allows the governor in council under certain conditions to amend and to suspend application of any provision legal or otherwise of another province or department.

It is unpardonable to think that Parliament should be able to tell another government: "The particular law that you passed, you cannot have it any more because we are going to suspend its operation". It does not inspire a sharing of ideas, products, technologies and people. There is no structure for innovation in it and nowhere for the talents and skills of the people of the country to grow and provide stability.

We must try to do it now and not later. Canadians deserve the chance to develop into a nation of free traders before their industries are exposed to the larger global market. If we do that Canada will be ready to take advantage when the moment comes, and that moment is coming quickly.

I urge the government to go back to the bargaining table. I urge the government to show a strong leadership and not just political rhetoric. I urge the government to provide Canadians with a free interprovincial trade agreement and begin the process of economic rejuvenation.

It will symbolize to Canadians and everyone in the world, but more important to us and our young people in particular, that we are a confident people, strong and self-assured. We are an economically stable, united nation with the ability and skills required to face the challenge of a modern world.

Agreement On Internal Trade Implementation Act
Government Orders

5:15 p.m.

Liberal

Ron MacDonald Dartmouth, NS

Mr. Speaker, I listened with a great deal of interest to the hon. member. I have to say I am not exactly sure what the hon. member really wishes to do to try to get free trade within the country.

On a number of occasions the hon. member was urging the federal government to abandon the consultative process which resulted in the bill before us today. One year ago July 13 senior governments in Canada-the 10 provinces, the federal government and the two territorial governments-arrived at a consensus.

A little later in his speech he talked about the government using its heavy hand because there was a section in the legislation that may allow it, given certain circumstances under the Constitution by the way to disallow provincial legislation.

He cannot have it both ways. What does the hon. member find so offensive about a process that has finally arrived at a framework under which all governments in the country, federal, provincial and territorial, have agreed to reduce internal barriers to trade? What process would he want to put in its place? This process has been under way since 1987. The agreements that were reached in July of last year were agreements that were reached after seven years of negotiations.

Would he have the federal government use the heavy hand, the constitutional powers he says we have, to completely abandon a moral requirement for consultation in these areas? Would he have us roll over the rights of provincial governments? Would he have us abandon the consultative process? Would he have us abandon the basics of the agreement on internal trade, specifically the section that deals with the affirmation of constitutional rights and responsibilities since he spoke a lot about them, the general rules section which sets out the obligations for activities governed by the act, a special rules section which sets out the particular ways in which the rules apply in the 10 sectors covered by the agreement, and the section that sets out administrative provisions and the dispute resolution mechanism?

Surely the hon. member opposite knows that when we are dealing in the area of trade it is not as easy as walking in and saying: "Here is what I want; therefore that is what I get". This is a process of negotiation similar to what was done with the free trade agreement with the United States. It was probably a little easier in the free trade agreement with the United States because we were only dealing with two governments. Indeed when we were dealing with the NAFTA we were dealing with three governments. In Canada, because of our constitutional structure, we were dealing with 13 governments.

Should we abandon the consultative process which he seems to have condemned in his remarks and use the available tool albeit blunt in our Constitution, or does he say that we should abandon the process and start again? Which does he want? Does he want consultation or does he want heavy handed federal action in this area?

Agreement On Internal Trade Implementation Act
Government Orders

5:15 p.m.

Reform

Werner Schmidt Okanagan Centre, BC

Mr. Speaker, that is probably one of the most thought provoking questions I have heard in the House for a long time. I appreciate the question. It is a good one.

In no way do I wish to suggest that the consultative process is not a good one. It is a good process and one that should be observed, absolutely. However there comes a time when the consultative process breaks down and does not result in an agreement. Then senior government has to come in and make some essential changes.

Another point I recognize is that the primary criticism is not in the process. There is no criticism of the process. The criticism is in bringing to the House a bill which says we have an agreement. It is not an agreement. There are major parts of the economy of Canada that are totally exempted from the agreement.

Let me mention one area. The whole energy sector is exempted from the agreement. It is not a complete agreement. Yet it was presented as if it were.

I say again that consultation is essential, but leadership is also essential in a country when the consultative process breaks down. The three principles in my speech are the ones we ought to take forward. The responsibility lies with the Parliament of Canada to say that we have to solve the question. We can go this far and then we have to say that we have consulted so long but there is an end to the process.

Agreement On Internal Trade Implementation Act
Government Orders

5:20 p.m.

Bloc

Yves Rocheleau Trois-Rivières, QC

Mr. Speaker, I would ask my hon. colleague for Okanagan Centre, whom I have the pleasure of meeting regularly on the Standing Committee on Industry, how he can question not only the bill before us, C-88, and clause 9, which the Reform Party condemns with us, but also the agreement reached by the provinces, the territories and the federal government after seven or eight years of negotiations?

Is is not rather presumptuous of the Reform Party to question something that all these elected officials and all these governments agreed on, with such difficulty, I might add? Is this not the extent to which Canadian leaders had agreed to agree in a certain number of areas? Is it relevant to tear up the agreement, as my colleague puts it?

It stands to reason he would condemn the bill. However, it is another matter to tear up the agreement and reject the efforts of the premiers or ministers of trade who worked on this agreement. Is it not going too far to call the entire process into question?

Agreement On Internal Trade Implementation Act
Government Orders

5:20 p.m.

Reform

Werner Schmidt Okanagan Centre, BC

Mr. Speaker, I think that was a very thoughtful question.

No, I am not calling into question the fact that the premiers got together to work on things. That is commendable. However to suggest that what they agreed to was meaningful and actually resolved some of the trade barriers is false because the trade barriers were not eliminated in many instances.

We are supposedly being presented with a breakdown of internal trade barriers in Canada, but I submit to the House that is not the case. We are being led to believe something which is not complete. We should not be led to believe that it is complete. It is not.

Agreement On Internal Trade Implementation Act
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5:20 p.m.

Liberal

Ron MacDonald Dartmouth, NS

Mr. Speaker, I gave away a little of my firepower in questions to the hon. member opposite. I indicated to the hon. member that it was very clear when I read the documents relating to the bill that nobody on this side of the House believes this is the be all and end all.

The Prime Minister in his remarks last year when this was all done clearly indicated that he thought it was a step, albeit a small but very necessary step, toward the full removal of internal trade barriers in Canada.

I understand what the hon. member was speaking about. I also understand that sometimes we have to crawl before we walk and walk before we run. There is no question the bill is long overdue. There is no question that the internal trade barriers perpetuated by various provincial governments, with the blessing of the federal government because perhaps in the past the federal government has not shown the necessary leadership, have caused a real mishmash of provincial trade barriers not just in the movement of goods and services but also of people. It is fair to say to individuals watching that the bill is a step in the right direction.

The hon. member opposite mentioned that it did not apply to the energy sector. That is exactly right. By the time the agreement was signed last year there was no agreement among the 13 players on how we should treat the energy sector. If my reading of the memorandums of last year is correct, it was agreed that there would be some framework to deal with the energy sector by the end of this month.

The hon. member raised some good points. If he waits 10 days-and perhaps we could wait 10 days-he will see the process concluded and there will be some guidelines, rules and framework for the energy sector.

It is clear the bill is long overdue. It does not impose anything on the provinces. It simply reaffirms the requirement in legislation of the federal government to fulfil the commitments made last year when the agreement was made. The bill provides a federal legislative framework. It does not impose anything on anyone. It encourages the type of debate that has taken place in the past and the consensus building that has arrived at the framework of today.

I mentioned that perhaps it was easier to conclude the free trade deal with the United States because there were only two partners, or the NAFTA because there were only three partners, than it was to deal with the Canadian provinces and territories.

Everybody knows there is a problem within Canada. Everybody knows there are certain things that must be done to make us more competitive. One only has to look at some of the areas that are covered. The agreement covers 10 very specific areas: procurement of goods, services and construction; investment; labour mobility; consumer related measures; agricultural and food goods; alcoholic beverages; natural resource processing;

communications and transportation; and environmental protection. It is a step in the right direction.

I want to focus my speech a little away from the bill per se and at a microcosm of some of the problems in Canada. I want to specifically focus on Atlantic Canada. There are four Atlantic provinces including the three maritime provinces of P.E.I., New Brunswick and Nova Scotia. It is very clear to me as a student of history and a student of Murray Beck, a political scientist who has written some very good and thought provoking accounts of the political history of Nova Scotia, that Nova Scotia has always felt it was at a disadvantage in Confederation.

Prior to Confederation we were free traders. All one has to do is look at our location. We are stuck out on the northeastern coast of North America. We have the closest deep water, ice free port in Halifax to the great circle route. We were great world traders. When we got into Confederation it started to change because the trading patterns were forced by regulation and by legislation to be east-west when we normally should have been trading across the ocean and north-south.

My friends from the Bloc Quebecois might be interested to know that the first secessionist movement in Canada did not happen in the province of Quebec but in the province of Nova Scotia. There was great debate shortly after Confederation on whether or not the province should stay. We chose the right course and we chose to stay even though there were some restrictions to our growth. We decided the way to deal with it was to stay in a larger unit and to try to address the problems.

Since the 1970s the Council of the Maritime Premiers realized that three small provinces, Nova Scotia, Prince Edward Island and New Brunswick, had less than two million people and had far too many barriers to internal trade in that small region. Each of those provinces had its own professional accreditation boards. A pipe fitter in New Brunswick may not have been able to work on a job in P.E.I., or a barber in P.E.I. may not have been able to cut hair in Nova Scotia. Those were the barriers to trade set up during that many decade period of protectionism in an effort to create jobs and keep them in each area.

We have had much talk in Atlantic Canada about how we must become more competitive and less reliant on government. If we go back to 1989 there was a gentleman by the name of Dr. Charles McMillan who wrote a very good document called "Standing Up to the Future" in which he talked about the need for maritime Canada to take up the challenge of integrating our economies. He said very clearly that governments must pursue a strategic program and that economic integration is a key to economic prosperity. He said:

The strategy must be based on eliminating trade barriers, encouraging new investment and being outward oriented.

Back in 1989, after almost 19 or 20 years of having the Council of Maritime Premiers, it was clear we recognized the requirement of reducing internal barriers to trade.

In 1991, after Dr. McMillan's paper had been around for about a year and a half, the Council of Maritime Premiers responded very forcefully and effectively. It came up with the Maritime Procurement Act which stated that for goods tendered for $25,000 or more, for services of $50,000 or more and for construction contracts of over $100,000 there would be no more discrimination based on where the company that bid for those contracts came from in Maritime Canada. Clearly the movement had begun to reduce those barriers to trade.

In 1992 the council came up with the Maritime Economic Co-operation Act. It has been working on a number of major projects since then. The Council of Maritime Premiers has a number of boards, organizations and bureaucrats working for the continued removal of barriers to the mobility of apprenticeship trades people. The primary goal of this whole focus in maritime Canada is to become more competitive.

Everybody in maritime Canada knows one of the stumbling blocks to removing internal trade barriers has been the free movement of beer in Canada. Although this may not seem like a big deal to some people it is a big deal in Atlantic Canada for two reasons. We had come out of a period when individual provinces had restrictions on the movement of beer between provinces. They did that to protect brewing industry jobs in their areas.

With some of the agreements in the past, we found products were flooding into Nova Scotia but perhaps Nova Scotia or New Brunswick products did not have equal access to the most lucrative market which is in Ontario.

My point in all of this is the maritime provinces, the traditional have nots, the ones which seem to be left out of the economic cycle when it is on the up swing but always first included when it is on the down slide, have long since recognized the key to competitiveness is to remove internal barriers to trade.

I have always been a free trader. People in my area and all over Canada will only prosper and be able to recognize their potential and our potential as a nation if we work aggressively to remove those barriers to trade.

This is not a perfect bill, but it is closer to perfection than anything I have seen in the six years I have been here. I urge members of the Reform Party opposite who seek a perfect bill to support the direction of the bill and to work with us on this side and with members of the Bloc Quebecois to ensure the people we represent have access to markets unfettered by regulatory and non-regulatory barriers to free trade.

Agreement On Internal Trade Implementation Act
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5:30 p.m.

Bloc

Yves Rocheleau Trois-Rivières, QC

Mr. Speaker, I find it odd that the hon. member made no mention of clause 9 of Bill C-88, which is the heart of the bill, the key, and which was totally unexpected.

The opposition informed the Government of Quebec of clause 9 and Bill C-88, and, in turn, the Government of Quebec contacted the Government of Ontario to see if it was aware of this provision. Apparently, nobody in Canada was aware of this bill, even though close to a month earlier, on April 10, 1995, the trade ministers met in Calgary and there was never any question of the federal government's intention to go ahead with the bill.

I would like to ask the hon. member what he thinks of clause 9. How can he justify that the federal government has unilaterally declared itself the referee, when nobody was consulted, when nobody mandated the federal government to take on this role, and on top of this and perhaps most importantly, when the bill goes against the spirit of the agreement which provided for conflict resolution mechanisms based on the good will of each party, and not on judicial mechanisms?

Now, the federal government is bringing in a judicial mechanism, announcing to everybody that, in the future, its actions will be based on the spirit and the letter of clause 9 of Bill C-88. It will issue orders and ultimately will take all of the measures in paragraph 9 d ), do everything it deems appropriate to bring any province it feels is reluctant in line.

Can our colleague explain to us how the position that the federal government has taken on this issue in clause 9 of Bill C-88 is justified?

Agreement On Internal Trade Implementation Act
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5:35 p.m.

Liberal

Ron MacDonald Dartmouth, NS

Mr. Speaker, the Government of Canada within its own area of responsibility clearly feels if there is a dispute settling mechanism and the dispute is settled but a province is stubborn and decides after one year of going through the two bodies, the joint co-operative committee and the processes outlined and agreed to by all 13 parties, that it will not to be party to the dispute settlement mechanism finding, to the resolution, and still refuses to act in compliance with the agreement, the government will take some actions.

Those actions are extremely limited by the very section of the bill. It does not say the Government of Canada can take straight retaliatory action. It outlines clearly the actions that can be taken and the actions that cannot be taken.

I understand the member opposite would be worried that the federal government can use its heavy hand to impose a settlement. Clearly after 10 provinces, two territories and the federal government agree on a dispute settling mechanism and a province or territory refused to adhere to the rules of the game, the government believes it is justified to use within its jurisdiction certain economic means.

I do not think it is unjustified. It is like telling my children over and over again there are rules but if they violate the rules there will not be any penalty. If my children violate the rules there is a penalty. It is a penalty of last resort after consultation, after communication and after dispute settling in my house.

At the end of the day if they continue to violate the agreements in our house-it would be the same in the federal House-I reserve the right, as would the federal government, to take reasonable means in response to that.

Agreement On Internal Trade Implementation Act
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5:35 p.m.

Etobicoke—Lakeshore
Ontario

Liberal

Jean Augustine Parliamentary Secretary to Prime Minister

Mr. Speaker, I am pleased to participate in this debate on the agreement on internal trade which will come into effect on July 1.

The agreement may not be perfect, in response to the Reform Party's comments, but it represents an improvement from where we were before that agreement. Bill C-88 is intended to make it possible for the federal government to comply fully with its obligations under the agreement.

It is important the House proceed expeditiously in its consideration of Bill C-88. For years businesses and private sector groups have complained to both the federal and provincial governments about domestic trade barriers and impediments to a free and open internal market.

We have had numerous studies going back as far as the 1937 Rowell-Sirois commission which recognized the issue and documented the broad scope of the problem.

The Canadian Manufacturers' Association in 1991 estimated the cost associated with barriers and economic inefficiencies to be approximately $6.5 billion annually. The most recent statistics indicate interprovincial exports of goods and services in 1990 were worth $141 billion annually and responsible, directly or indirectly, for 1.7 million jobs.

A recent study by the chamber of commerce underlined that the Canadian internal market is the most interdependent of any area in the world today.

In agreeing to negotiate the agreement, Canadian governments recognize how well our domestic economy works. It is key to how we will prosper as a nation and how we will compete in the international economy.

An open domestic market and economy will allow Canadians and Canadian companies to strengthen their internal competitiveness and develop new opportunities for growth and prosperity. The alternative offers only and ultimately self-destructive protectionism which benefits only special interests at the cost of the country as a whole.

When they agreed to negotiate the agreement on internal trade the federal, provincial and territorial governments all recognised and accepted the importance of working together in the national interest. In concluding the agreement Canadian governments have demonstrated they are prepared to work together both now and in the future.

As my colleague, the Minister of Industry, has said in the House, the agreement is a consensual agreement. Some members opposite have criticized the agreement as inadequate and insufficient. As I said before, the agreement may not be perfect but it is an improvement over where we were. It reflects a consensus on the principle of an open and efficient national economy. It establishes a detailed rules framework for internal trade. It provides a consistent and defined process for preventing and resolving disputes which may arise over specific issues or measures.

All the parties have accepted, to a greater or lesser degree, disciplines which in the sectors covered will improve how the national economy functions in the future. It will be possible and it is the government's intention to work to improve the agreement in the future and to expand its scope and coverage.

I call on all colleagues in the House to work together with us as we proceed into the future to expand the scope and coverage of the agreement. For the moment this is a start, a point from which to work. We can and should build on that.

Some members have also criticized the government for not exercising its constitutional authority over interprovincial trade to open the internal market more forcibly. The national economy has become considerably more complex than it was when the constitutional powers of the different levels of government were agreed on in 1867. In the context of today's economy and modern Canadian federalism the views of those critics, frankly speaking, are simplistic.

If anything is clear it is that the country operates most successfully when all levels of government work co-operatively in the national interest, not unilaterally and certainly not by fiat. Governments were not negotiating constitutional changes in the agreement on internal trade; rather, they were developing the basis for working together with their respective powers and responsibilities to make the national economy operate more efficiently and effectively.

Unilateral action may be a theoretically possible method to achieve the same ends. Some of us may consider it to be a desirable way of proceeding. However it is simply not an effective or acceptable way to make Canada's federal system work.

Some members opposite have suggested the government has a hidden agenda in Bill C-88, that it conceals a power grab and that it is intended to provide a means to force provinces over to the will of the federal government. That is purely and simply wrong. My colleague, the Minister of Industry, has responded at length and in detail to those allegations.

Bill C-88 does not deal with the responsibilities of provinces or provincial measures, only federal responsibilities and measures. It is intended to make it possible for the federal government to comply fully with its own obligations under the agreement and to play its part in making the agreement work.

Bill C-88 gives the government specific authority to make changes to certain parts of legislation to enable it to act in accordance with its obligations. It also changes some existing legislation to make it easier for provinces to comply with some of their specific obligations under the agreements.

We should be clear in our understanding that Bill C-88 does not by itself legislate or give life to the agreement on internal trade. The agreement has been signed by all its parties: the federal, provincial and territorial governments. When it comes into effect, as agreed on July 1, all those governments will be bound by the obligations of the agreement. Each government is responsible for complying with its obligations and for living up to its responsibilities under the agreement.

Two provinces, Alberta and Newfoundland, have already passed their implemented legislation. As I said earlier, it is important that we proceed expeditiously in our consideration of this legislation. The federal government has played a leading role in getting all governments to work together in the interests of all Canadians on internal trade issues.

Bill C-88 does what is necessary to ensure the federal level of government will be able to continue to play its role in the co-operative intergovernmental process.

We should not delay this further. I call on all colleagues to join with us in ensuring that Bill C-88 gets swift passage through this House.

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5:45 p.m.

Bloc

Yves Rocheleau Trois-Rivières, QC

Mr. Speaker, I would like to ask the member for Etobicoke-Lakeshore, a bit as I did with my colleague earlier, how she can justify the government's action in this regard. She knows very well indeed that the federal government cannot legitimately take this action, since it has neither the mandate nor an invitation to take it and it consulted no one in its action. It is giving itself powers of arbitration so it can act as a disciplinarian, without anyone having asked it to intervene. It has led, and here the seriousness

of the situation and the all the scheming behind the bill become apparent, the Premier of Quebec, Mr. Parizeau, to denounce the bill as a trade war measure.

I would like further explanation. Oddly, and this is in keeping with the way the government works, nobody is referring to clause 9, the keystone, the source of friction, the heart of the bill. To us, this is indicative of the government's desire to meddle in a number of areas of jurisdiction in the operations of the future Canada where the Government of Canada will be the sole government. Canada will be a unitary country, a centralized country. Bit by bit, in this House, the government is giving itself what it needs to ensure that, increasingly, governments that claimed to be, were seen to be and considered themselves provincial will become regional, because bills like this one are being adopted.

I would ask my hon. colleague to talk more about clause 9 of this bill, which is exceedingly pernicious.

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5:45 p.m.

Liberal

Jean Augustine Etobicoke—Lakeshore, ON

Mr. Speaker, the hon. member is presuming quite a lot in his interpretation of section 9. Perhaps he has misread the section. In that section there is a principle underlying the concept of retaliation. My colleague spoke quite clearly to this by giving some real life examples within his own family situation.

It has to be understood that subsections 9(a) to (d) do not give the government greater freedom of action. To suggest that it does ignores the headnote of the section. I would ask the hon. member to go back to the headnote which limits the degree of possible action pursuant to article 1710 of the agreement. Article 1710 would limit retaliatory action only to cases where a province has been found to have an impartial panel which violated the agreement and has refused to comply within the period of a year or more.

It spells out quite clearly that the government would have to discuss whatever it proposes to do with the committee on internal trade which is composed of representatives of all the parties to the agreement. Any action to be taken has to be equivalent to the economic impact which led to the original violation.

There is much within the section which must be read with article 17(10) in mind.

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5:50 p.m.

Bloc

Gaston Leroux Richmond—Wolfe, QC

Mr. Speaker, I am pleased to participate in this debate as the official opposition critic on regional development. I want to show very clearly that, with this interprovincial trade agreement, the Canadian government is indeed giving itself powers which largely exceed what is provided in the agreement reached by the parties.

We just heard the hon. member explain clause 9, in reference to articles 1705 and 1710. I intend to show unequivocally that, in this agreement, the federal government is giving itself extensive third party powers, without informing those involved.

What is the purpose of this bill? It is simply to implement the provisions of the Agreement on Internal Trade, which was signed by the provinces last summer. To that end, the federal government must pass the required legislative provisions before July 1, 1995, when the agreement will take effect. This is basically the purpose of the legislation.

First, I want to show that, with Bill C-88, the Liberal government is assuming powers which were never mentioned when the agreement was negotiated or signed, thus showing a very centralizing attitude which is also noticeable in relation to several other bills, and which is part of an overall centralizing legislative strategy.

I also want to show some elements of the current international trade dynamics which point to the need for the political autonomy of the regions, as well as the establishment of economic unions, rather than large federations with a rigid and centralizing constitution, such as the Canadian federation.

The clauses of the agreement to which Bill C-88 refers essentially deal with the dispute resolution process, as if the federal government could do anything but regulate. I want to point out to this House the context in which the interprovincial agreement will operate, by going over a few provisions of the Agreement on Internal Trade.

Articles 1601 to 1604 deal with the establishment of an internal trade committee and its secretariat. That committee will supervise the implementation of the agreement and facilitate the resolution of disputes. Article 1705 deals with the setting up of a panel, following a request by the parties involved in a dispute. The panel is composed of five members who will decide on the validity of the request and on the retaliatory action which may be taken by the aggrieved party. We are talking here about a dispute involving two parties.

Paragraphs 4, 5 and 6 of article 1710 provide that, if the matter has not been resolved within one year of issuance of the panel report, the complaining party may request a meeting of the committee. The committee shall convene within 30 days to discuss with the complaining party the option of taking retaliatory action in respect of the party complained against.

So, the complaining party may, until such time as a mutually satisfactory resolution of the dispute is achieved, impose retaliatory measures of equivalent effect against the party complained against. This is important: the retaliatory measures must be of equivalent effect.

We must understand that the panel's decisions are not binding, which implies that the committee governing the interprovincial trade agreement has no power. If the party complained against does not comply with the panel's recommendations, article 1710 applies. As we saw, article 1710 deals with retaliatory action that the complaining party may take in respect of the party that did not comply with the agreement.

The main purpose of this bill, as we said earlier, is to implement the agreement on internal trade. The Bloc Quebecois has always been in favour of freer trade, which is the context in which states do business today. We support the principle of the agreement.

However, what we understand is that, if the federal government is the aggrieved party under a trade agreement referred to in the agreement, it can impose retaliatory measures that are unprecedented.

However, that is not what is said in Bill C-88. In fact, clause 9 goes well beyond the spirit of the agreement reached by the provinces last summer. Clause 9 reads as follows: "For the purpose of suspending benefits or imposing retaliatory measures of equivalent effect against a province pursuant to Article 1710 of the Agreement, the Governor in Council may, by order-" By order, no less.

This is a method commonly used by a totalitarian government. This bill clearly shows that the Liberal government wants to govern by order. Are we again facing Liberal totalitarianism? In fact, clause 9 means that if a party is at fault pursuant to article 1710 of the agreement, then the federal government, whether or not it is party to the dispute, assumes the right to impose retaliatory measures against all the provinces without distinction.

The parties were agreed that it was a matter between two parties: the injured party and the party at fault. The government however, assumes the rights of all parties so it can interfere in the dispute. Bill C-88 clearly indicates that the federal government intends to interfere in interprovincial trade and be both judge and judged, to provide through this agreement the power to act by order, a power it alone can exercise, and to extend the application of any federal law to the provinces, as mentioned in clause 9 (c) .

Governing by order in council, setting oneself up as the arbiter of interprovincial trade, are measures that go way beyond the spirit of the agreement signed with the provinces last summer and are an indication of the clearcut centralist strategy of the federal Liberals.

Nowhere in the 13 paragraphs of article 1710 of the agreement is there mentioned any right of the federal government to intervene in a trade dispute when it is not itself one of the parties to the dispute, contrary to the retaliatory measures described in clause 9 of Bill C-88, which it may impose, by order, on any of the parties concerned.

The range of retaliatory measures that the federal government has given itself in this clause is too broad. The attitude reflected in recent federal bills concerned with regional economic development, such as C-46, to establish the Department of Industry; C-88 on interprovincial trade; C-91, to redefine the Federal Business Development Bank; C-76 on certain provisions concerning transfers to the provinces is a clear indication of the ultra-centralist strategy of the present Liberal government.

As the official opposition critic for regional development, I want to warn provincial governments against interference by the present federal government in matters concerning regional economic development. I urge them to be extremely vigilant. They must not downplay their autonomy and jurisdictions or give up certain responsibilities, just because of an impending referendum.

I say to Canada's provincial governments that supporting Quebec's demands means supporting the development of the regions.

Among other things, the 1982 Constitution, the famous Canada Bill, instituted provincial egalitarianism, an egalitarianism which denied the Canadian duality and the existence of the Quebecois people. The current face of Canadian nationalism was formed on the basis of this egalitarianism. Do not forget that, at the end of the 1960s, Pierre Elliott Trudeau came to power with a vision for the nation in which he persisted despite the sharp criticism it drew. He set out to build a more closely integrated Canadian economy by rationalizing the government's activities and by centralizing power.

In June 1978, during the unilateral patriation of the constitution, the federal government published a detailed statement by Pierre Trudeau, called "Time for Action". It was in fact an elaborate constitutional reform proposal. Under that proposal, even though Canada is a patchwork of different sociological and historical influences, for example aboriginal peoples whose legitimate rights we must respect, the two main linguistic communities, the many different multicultural communities, the federal Liberals' approach to the constitution has always been based on the primacy of the citizen and of the rights of the individual. I would like to quote a passage from the publication: "The unity of Canada must transcend the identification Canadians have with provinces, regions and linguistic or other differences-Each must feel that Canada, and the federal Parliament and government acting on his or her behalf, are the best guarantors of the security-"

Such was Pierre Elliott Trudeau's grand statement on centralization. This is the federal Liberals' grand statement on centralization.

As a Bloc member, I say to my fellow Quebecers that such a statement of intentions significantly threatens the existence of a Quebec state, a Quebec nation and the means it needs to develop economically. Ottawa is counting on the marginalization of the provinces. This same objective is reflected in the federal position in all other matters of importance to do with shared jurisdiction. This unitary state spirit of centralizing federalism, which opposes provincial peculiarities, is an obstacle to the development of the people of Quebec and is also the spirit of Bill C-46.

We must remember that this enabling legislation of the Department of Industry increases duplication and overlap in Quebec and denies its government the complete control over regional development it has so long sought.

In the same centralizing vein, under clause 8 of this bill, the Minister of Industry is responsible for regional development in Ontario and Quebec. This bill simply confirms regional development overlaps, because it confirms federal government and Department of Industry intervention in an area of jurisdiction Quebec has long sought as its own.

Quebecers have a very different view of regional development requirements. Decentralization of funds and powers advocated by the Parti Quebecois are what the regions have long waited for in order to take charge. This is a democratic vision of regional development that has nothing to do with the centralist vision of the Liberal government in Ottawa.

In Quebec City, we do not want the development of the province's 16 administrative regions to be driven by the purely sectoral vision of the federal Minister of Industry. Regional development is the cornerstone of a vision of society that requires the intimate understanding of all the needs of the various environments that only regional stakeholders have.

I say to my fellow Quebecers that when, in the referendum, they are asked to decide on the political autonomy of Quebec, a no to the Quebec government's proposal will signify acceptance of Canadian federalism as defined by Pierre Elliott Trudeau, and the death of Quebec. Bill C-91 is another example of the denial of the State of Quebec. In this bill, the government's stated objective is to streamline and modernize the Federal Business Development Bank. The vocabulary is undoubtedly meant to reflect the reality of late twentieth century markets, but nobody is in any doubt about the federal government's real objective, which is to meddle further in the regional development of Quebec and increase its presence in the most important mechanisms of Quebec's economic development.

The state of Quebec exists. It is trying to develop its own tools of economic development in spite of the federal government's intrusive presence in regional development. And the Federal Business Development Bank remains a parallel structure, an unacceptable administrative duplication.

Finally, I would like to remind this House, by way of illustration, of some of the extremely centralizing and anti-Quebec provisions of Bill C-76. This bill, which concerns the implementation of provisions of the 1995-96 budget, sets its sights much further than that fiscal year. In fact, clause 48, which requires no prior negotiation with the provinces, would result in a shortfall of $2.5 billion, $650 million of it in Quebec alone. Furthermore, implementation of the Canada social transfer for health care and social programs will result in a shortfall of $4.5 billion for the provinces in 1997-98. The Bloc Quebecois also condemns this bill because it introduces a mechanism that the federal government, which according to the constitution has no jurisdiction over social programs, will use to intervene to a greater extent in this area and impose national standards on Quebec.

Bill C-76 maintains national standards for health care and provides for adding new national standards for social assistance and post-secondary education. If the provinces fail to abide by these standards, funding will be cut accordingly under C-76. This arrogant federalism bears not the slightest resemblance to decentralization. These national standards will limit the provinces' autonomy within their own jurisdictions. Furthermore, distinct as they are, the people of Quebec will not see their demands reflected in the new national standards applied from coast to coast in an area that is crucial to its cultural identity: education.

As for Bill C-88, it is eminently centralist. It reflects a retrograde view of trade relations between the regions of one and the same continent. Today, the trend is towards globalization, removing tariff and non-tariff barriers and free trade, not using orders in council to regulate a continental market led by a unitary state like Canada.

The decisive levels at which we can be competitive are increasingly located at the local, regional and provincial levels, all of which does not fit Ottawa's centralist mould. The new international model for regional economic development reflects the globalization of our economies which, in turn, means that regional economic spaces are gradually becoming absorbed into a single global economic space.

Fernand Martin, of the Faculty of Economic Science at the University of Montreal, is very emphatic about this international regional reality, and I quote: "Local businesses now realize that they are not only competing with domestic competitors but all the others as well, without the benefit of the protection afforded by national borders". This new reality of international

markets gives rise to a second economic phenomenon: economic concentration by businesses to remain competitive. As a result, regional economies are becoming an important part of the overall strategy.

In this context, intervention through a national government structure is no longer required. The State of Quebec, by giving the regions unprecedented powers in its blueprint for society, has shown it has a very sure grasp of the new problems it faces as a result of international trade, unlike the Canadian federal government. NAFTA would help to further diminish the federal government's power to intervene in economic matters. Where international trade is concerned, agreements like GATT already prevent Canada from imposing tariffs and subsidizing exporters. These international agreements tend to accelerate the globalization of our economy and, like the dynamics of regional economics, to diminish the federal government's control over the national economy.

In the nineteenth century, globalization of trade was sparked first of all by the new multinationals. It was the multinationals which initially caused countries to shift towards a new economic space like NAFTA. Today, their ability to restructure an economic space has been illustrated many times over. In fact, they confer international status on the cities or regions where they are located.

In conclusion, we are not opposed to this bill because we do not care about the globalization of markets and international trade. We oppose this bill simply because, to the detriment of all other parties, the federal government granted itself the ultimate power, the power to govern by order without making any agreement with any of the parties beforehand.

I say to my fellow Quebecers that a vote for a sovereign Quebec is a vote for the elimination of the federal government's interference in Quebec's areas of jurisdiction and for the elimination of many overlaps and duplications, which will result in real savings. A yes vote for a sovereign Quebec would permit Quebec to put job creation, labour force training, education, health and social assistance policies in place which meet its needs and are geared to its priorities.

In addition, a yes vote would help protect Quebec from being the victim of federal manoeuvres like the 1982 constitutional patriation and would help put an end to the federal government's unilateral cuts to transfer payments.

To sum it up, it would be a yes to adulthood, to confidence, and to the open-mindedness and pride of the people we already are.

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6:10 p.m.

Bloc

Yves Rocheleau Trois-Rivières, QC

Mr. Speaker, I would like to congratulate my colleague for Richmond-Wolfe right off for his excellent and edifying speech, which rattled the Minister of Transport so much he was forced to leave the House.

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6:10 p.m.

The Acting Speaker (Mr. Kilger)

Order. We must remember that we never draw attention to the presence, and, more particularly, the absence of anyone in the House. We are all familiar enough with the requirements of our work on the Hill or in committee.

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6:10 p.m.

Bloc

Yves Rocheleau Trois-Rivières, QC

Mr. Speaker, I just wanted to point out that this was the Minister of Transport's way of standing out.

All those who have carefully examined Bill C-88, and in particular clause 9, can see that the legitimacy of the government's action is seriously in doubt. There was no consultation, and the government was given no mandate to act this way. The legitimacy of its action is questionable.

We must also ask what was the intent-and this question is for my colleague-of the federal government in striking such a blow against all the provinces, particularly Quebec, which has reacted strongly. All the provinces, however, are reacting similarly. What is going on in people's heads in Ottawa? What is going on in people's heads in the Langevin building? What is this Canada of tomorrow to be? I will let my colleague for Richmond-Wolfe elaborate on this.