Alex Shepherd

[The Environment, October 25th, 2002]

Mr. Speaker, the Treasury Board has, through its guidelines to other departments, requested them to inventory their contaminated sites and 85% of this work has now been done and is displayed on our Internet site. In addition, over $100 million a year is now being funded through various departments to ensure that we identify the remainder of those sites. By July 1, 2003, we believe that the balance, from 85% to 100%, of those sites will be identified and a plan for remediation will be in place.

[Supply, October 24th, 2002]

Mr. Speaker, I was just wondering while listening to the Leader of the Opposition's speech about the connection between carbon dioxide emissions and climate change. I know that his party likes to be a sort of spokesperson for the business interests in the country and I have noticed that the insurance industry has been very clear in saying that it no longer wants to cover for the issue of climate change. For some of those businesses, indeed even the oil and gas sector, when they are reviewing their insurance policies, these insurance companies are now saying they will not insure for the downside of climate change. How does the member reconcile that with his stand on not proceeding with the accord?

[Resumption of debate on Address in Reply, October 11th, 2002]

Madam Speaker, under the British North America Act, as I understand it, we do have trade in commerce or interprovincial trade priorities. The reality is that commercial law is a provincial jurisdiction. That has been set out I think from 1967 onward and is where the evolution of these exchanges has occurred.

The irony of course is that while they are a provincial jurisdiction, it is not uncommon that a corporation that has all its business in the province of British Columbia will list on the Toronto Stock Exchange solely and therefore be governed entirely by the Ontario securities administration. There is a lot of irony that exist.

It is clear that the provinces still covet their position in the area of commercial law to the point that they feel it is their jurisdiction to regulate securities within their borders. That in fact is the big constitutional issue.

I do not believe that the federal government has the jurisdictional authority to simply create a national securities administration. I believe we have to get the provinces on side, but we need some leadership in this. We have to impress upon our provincial legislators that it is time to move on and to go forward with this file.

However, I thank the member for his suggestion. I can see that he supports the idea of creating a more robust capital system in Canada.

[Resumption of debate on Address in Reply, October 11th, 2002]

Mr. Speaker, it gives me great pleasure to enter this debate on the Speech from the Throne.

I want to talk to the House and those people listening out there today about capital markets. Some people will ask what that has to do with the Speech from the Throne. This is an area of the Speech from the Throne that possibly has not been talked about a lot in the House, although we have had a few questions from the Bloc on this issue.

A very interesting aspect of the Speech from the Throne talked about Canada's fragmented securities regulatory structure being “inadequate and an obstacle to growth”. I think that is a very bold statement, because I can well remember when I first came to this place back in 1993 that I was very concerned about having a very fragmented registration system for securities across this country. I thought it was very much an impediment to our growth as a nation. I did some initial research and discovered a humongous roadblock called federal-provincial relations.

As most of us know, our country was founded in Confederation by the British North America Act back in 1867, which was a very long time ago. Some of the innovation occurring in our marketplaces today moves at the speed of light. In this city, as a matter of fact, we have a huge high tech industry that is doing some tremendously interesting and innovative things. Most of us are aware of Canada's investment in the space program. In fact my own son is involved in some of these things, so I am particularly interested in what Canadians can do and in the opportunities that are available to them.

When I look at this whole issue of capital markets in Canada, to me it is a statement about our inability as a country to work together for the best interests of all the people of Canada. When we talk about capital markets, the stock exchanges and so forth, some people have an aversion to it and think we are just making some kind of intellectual or economic comment, but in reality the movement of capital and the concept of innovation are very much part and parcel of the same thing. If we have capital and innovation, we can create great things in this country. We have done that in the past.

Up to the 1970s, Canadians were great savers. That was historically what Canadians did. We had a conservative approach to things. We put things in banks and for that reason our banks and our banking structure were very important to us. We spent a lot of time in this place and in others ensuring that our banks were solid, had a good regulatory framework and were national in scope, that they had the ability to protect people's savings. People had some confidence in putting capital into those banks. Of course banks then were able to do things like loaning mortgages and so forth, basically creating an alchemy of innovation and capital for the benefit of all the people of Canada.

Since 1970 Canadians have gradually moved from being savers to being investors. Indeed, one out of two people in Canada today has some form of investment, whether it is in pension systems or in direct investments in the stock markets, teachers' pensions, et cetera. Indeed, I am a member of the baby boom generation. I am very much at the forefront of that. I was born in 1946. The baby boomers are now talking about retiring. Retirement plans are very much related to their ability to invest so that those investments will return cash flow in their retirement. Canadians are now investors, but the reality is that in Canada we have a tremendously fractured capital market. What I mean by this is that because it is a provincial domain each province and territory has its own regulatory framework for controlling investments for stock markets.

The result is a tremendous amount of overlap and duplication. Canada is a very small country when it comes to the whole aspect of a capital market. We only represent something like 2.07% of the world's capital market. Therefore, in some ways we are a small player but having said that, the Toronto Stock Exchange is the third largest stock exchange in North America.

On a comparative basis, we can look at what other countries have done. Canada is one of the very few countries in the world that does not have a national securities administration. When I say that, I think of countries like Australia. It has recently realized that with only about 1% of the world's capital market, it was unable to have a fractionalized capital system and still provide the opportunities for investment, to attract investment capital and to create jobs in that country with a fractionalized system. Australia had the wherewithal to think ahead and create a national securities commission.

We all know that the United States has a national securities administration. The European Union is going through a consolidation in many of its industrial areas, not the least of which is the fact that it has come to the recognition that it must have a national securities administration. In Europe there is a two tier system; one is a national security administrator, but it allows the individual states to still do the enforcement and so forth.

I would suggest that is not a bad framework for Canada. Imagine at the same time that Canada is dragging up the rear with 13 different regulatory environments and with politicians getting involved in the process. We do not want the big, bad federal government getting involved in the regulatory framework and so forth. That may not be the model we are looking at, but it is clear we need to move forward on this file.

People talk about the regulatory framework in Canada. For instance, I believe a member of the Alberta Stock Exchange said it takes 17 months to change one regulation. That is the average in the province of Alberta and it is probably the same in every other province. The Toronto Stock Exchange just went through a changeover to a different trading system. It took four years to implement that.

Different provinces are all going off on different tangents on this. Of course, the province of Quebec does not want to be part of anything that looks national in scope. It wants to have a regulatory regime that includes all financial sectors under one umbrella. The capital markets of Canada are simply too small to fractionalize. The countries that do fractionalize, in the final analysis, are not thinking of the best interests of their own people. They are not thinking of the ability to innovate and create opportunities for their own people. They are putting their politics in front of the best interests of their people.

National governments do national things. In all the time we have spent debating in this country there has been a great theory of devolution of power from the federal government to the provinces. The fact of the matter is this is one particular file where it is time that everyone in the country came to the recognition that there is a purpose for a national regulatory system.

I am going to digress for a moment to talk about some of the things that have really had a tremendous negative impact on investor confidence. I was visited recently by people in my own profession, chartered accountants. They were telling me they have to react to some of the very negative things that have happened in the United States and other capital markets, the Enrons, the WorldComs and so forth.

As we look at the stock markets today, people are fleeing from them. They do not trust the institutions that exist there today. This is going to have a negative impact eventually because small entrepreneurial companies are starting up in a very difficult time to raise capital.

Once again I think of the infrastructure that exists in this city and in Quebec, Vancouver, Calgary and other parts. I think Saskatoon has a tremendous emerging high tech sector. The government is going to make it more and more difficult for people to get access to capital, to turn those good ideas into commercial products, to turn those good ideas into something that not only the local people but all the people in the country can take advantage of. We can export that kind of technology.

To diverge a bit once more, we have been talking about the importance of Kyoto. One of the important aspects of Kyoto is that Canada be a leader, that we take advantage of some of the technology that we can evolve if we are there first. If industry is going to be there last, the person who is into this game last will pay the highest price and will be the least competitive. Many of our corporations realize that.

Suncor and others in Alberta and other parts of Canada realize the importance of being there first. I heard DuPont Chemicals say the other day, “We subscribe to Kyoto. We are going to be there first because our production costs will be lower than anybody else's dragging up the rear taking their time to get there”.

Any benefits that we could get from the technology sector in Kyoto will be mitigated if we do not find a better way to raise capital and if we do not find a better way to harmonize and modernize our capital system.

I said it was costly. There is an example of a company that wanted to raise $600,000 for a mining operation in Alberta. The cost to that company to raise $600,000 by going through the capital markets was $300,000. That was partly for registration and so forth in the various security exchanges, but it was also for all the legal work, the lawyers and accountants and so forth. In other words, the bottom line is it is prohibitive. Nobody is going to do it for small amounts of money. Even for larger amounts of money it is questionable whether a person would go to the Canadian capital markets today.

I have heard many people in the corporate sector say that if they are serious about raising money, they go to the United States. The U.S. has a robust system. It is possible to get things registered there. It is quicker to get on the securities market and it is possible to raise more money and do it faster.

There is a problem with that philosophy and it is possible to study the history of this file. If the company's stock is being issued on the U.S. stock exchange, inevitably the company will become an American company. The control of the company will be in the United States. The people making the decisions will be in the United States and Canadians will simply be working for those other people who are calling the shots. That has been somewhat the history of our country; we have let other people call the shots because we did not have the capital to do it.

But Canadians do have the capital. We have to unlock that key to our capital markets by creating a robust system. That is why I was very happy to see in the Speech from the Throne that the government was very interested in finding a way of doing this. Discussions have gone on with some of the provincial governments on this. I say discussions because since 1993 I have been interested in this file and those discussions have been going on all that time.

It is time to act. It is time to put some meat on the bone. The people in the provincial capitals should park their baggage for a bit. They should stop worrying about how to devolve power from the federal government and start saying “This is an issue that requires a national regulatory regime and we are prepared to stand up to the plate and do that and work with the government”.

It does not mean we would have some huge regulatory regime or governmental regime here in Ottawa or Toronto. Different models could be used where this two tier system of regulatory framework could be achieved and which everyone could agree on. The enforcement could be taken on by the provincial administration. The object of the exercise is to reduce costs to make this an efficient, vibrant, securities administration.

Earlier I used the example of Australia, but imagine that the Nordic states, all of Scandinavia, have come together to create one stock exchange. I am talking about Norway, Sweden and Denmark. These are independent countries that have come together to make an arrangement. They realize that without that ability, without the opportunity of scale that they will not be able to attract capital and they will not have the opportunities that other capital markets will have.

Those countries have realized that, yet here in Canada we continue to lag behind them. We continue to not be a part of the solution, but part of the problem. We continue to argue back and forth between provincial capitals about who should be on side and who should not.

As a matter of fact, we have had supporters go in and out on this file. The CEO of the Toronto Stock Exchange, Mrs. Stymiest, has been a great advocate. I have been a follower of her career to some extent. She has been a great promoter because she realizes this is something that is mitigating Canadians from realizing their potential.

Without this we are going to continue to subjugate Canada as a junior market and a junior business environment. We are going to ensure that Canada's productivity will decline. We have to catch up. People talk about our productivity deficit. We have to catch up to the United States.

The mathematics is we have to be 1.6% more productive than the United States every year to catch up and to make ourselves competitive. The only way we are going to do that is by squeezing that last ounce of efficiency out of our business system. The only way we are going to do that in this area is to stop the duplication, create greater harmonization and have a single focus as we go out to parade a national securities administration.

I have talked at long length on this issue, but if we were sitting at home today looking at the stock market pages, we would see that the stock markets continue to ratchet downward. Some say a lot of people are not affected by that and too bad for those who are, but the reality is we have a significant lack of confidence in our capital system in North America today.

This is not about the rich and the famous. It is about the workers of the country who have their money invested in their own companies. The workers have their money invested in pension funds. It is somewhat of a disconnect and a lot of people cannot relate the connection between those capital markets and the best interests of their families, but the reality is that we are all impacted by this. Without the opportunity for capital formation effectively, without the ability to instil that capital in new burgeoning innovative technologies, Canada and those families are being put at risk.

We have to work together as a federal government with our counterparts in the provinces to park the baggage of where we are going on this issue. We have to do away with the rhetoric that has occurred in the past.

The people who run the Vancouver Stock Exchange see it as quite a different stock exchange from some of the others in the country, but some people will have to park their baggage. We have to have a regulatory framework.

The accounting bodies are trying to get voluntary compliance to ensure there are ethical standards. We are big on ethical standards around here, but the problem is the business sector has a huge ethical problem itself right now. We need to find a way to do that. I do not think voluntary compliance is going to work. We need a regulatory environment that works. Canada has a great opportunity to do that. I am very much in favour of the throne speech which talks about moving in this general direction. I hope all of us will support that when whatever legislative framework comes up in the future.

[Supply, June 4th, 2002]

Mr. Chairman, it is a great opportunity to ask the minister a question.

The issue of advance contract awards has been already mentioned here tonight. There is a great ongoing debate with the auditor general and various departments of government, not the least of which is treasury board, to deal with the whole issue of whether these contracts are awarded on a competitive basis or not. The auditor general is of the opinion that they are not competitive.

As I understand the whole concept of advance contract awards, essentially it is a process that allows the government to continue working efficiently. Every time a contract comes up, it is very difficult for the government to simply open it up for tender because of the time constraints involved in switching suppliers and so forth. Unfortunately, or maybe fortunately, I do not know, governments are very large. They need to secure their channels of procurement in such a way that there is not a significant disruption of services to the general public.

In my riding General Motors has a great influence. While the plant is not in my riding, a lot of the workers are in my riding. General Motors more or less has a very similar system in the sense that it cannot afford to shut down the production of manufacturing cars to have a competitive open bidding system every time a contract comes up for bumpers.

What advance contract awards do, as I understand it, is they provide an opportunity for competition because they are posted. Posting allows anybody who is interested to, as the minister mentioned, challenge, but I am told that we are not supposed to use the word challenge any more. We are supposed to use a different kind of word. The concept was that anybody could provide a similar service given their capabilities. What we ask the supplier to do is give us a list of their capabilities of fulfilling the contract. It is clear the government cannot run the risk of offering contracts to those who have no real way of fulfilling them. It essentially allows other competitors to come forward.

There is a 15 day window. Maybe the minister could elaborate on that. As I understand it the 15 day window is actually considered to be long in the business community. Clearly where contracts are signed over the Internet in a matter of hours today, 15 days is considered a significantly long period. As I understand it, a lot of the thought process behind why it is 15 days is to allow small and medium size businesses that may not have the same reaction time as some of the larger suppliers in the country to be part of the process.

It is clear that the whole concept of ACANs is to provide a competitive process. I also understand that they are in compliance with our NAFTA obligations and they are also in compliance with WTO obligations.

For this reason the big difference of opinion between the Government of Canada and its auditor general is that the auditor general does not figure that is a competitive process. I think any reasonable person looking at that will see that it allows for competition. It allows people to challenge these contracts. The minister just mentioned the number of people who have successfully challenged ACANs, so there is a process.

I understand that 83% of all transactions over $25,000, and this is a very important number for people to grasp, are competitively bid in this country by a method of open bidding, tendering or using ACANs. That is a fairly significant open bidding process where people have the opportunity and well they should. I have been approached by representatives of small and medium size businesses in my riding. They say that just because they live far away from Ottawa does not mean they should not be able to compete in the process.

These contracts are posted over the Internet. This allows the smallest contractor to submit a bid. I know some small and medium size businesses in my riding that have successfully bid on these small contracts. The whole idea of using the Internet and electronic commerce is to allow more people to participate in the bidding process.

What is the minister's opinion regarding the policy guidelines that have been put in place to do with ACANs? Does he feel that those policies are being carried out within the Department of Public Works and Government Services? Their importance to us as a government is to ensure that the people of Canada see that the process is a fair, open and competitive one. What are the minister's views on the use of ACANs?

[Financial Information Strategy, June 3rd, 2002]

Mr. Speaker, I thank the member for Cariboo--Chilcotin for bringing this matter to the floor of the House of Commons this morning. I do not think he mentioned the fact that there is no need for divisiveness across the way. The government has been very supportive and has taken the initiative to implement the financial information strategy.

The member gave us a rough outline of the difference between accrual accounting and cash basis accounting. I am sure for all those who are watching today, it must be a big yawn when accountants get together.

I would like to briefly explain this, more or less building on what the member has stated. The government's accounting system is basically a cash basis of accounting. We record when the money comes in and when the money goes out. It is as simple as that. That is how most people's personal income tax returns are filed. It is based on income that they receive during a year and expenditures that they pay during the year is called a cash basis of accounting.

A lot of our farm community are still allowed to be on a cash basis of accounting. In my days as an accountant for many farmers it was always amazing to me that they had fields full of cattle but never had recorded these as inventory. They showed them as an expense when they bought them. We can see how it is sort of an absurd accounting system but it is a very simplistic one to use.

This is the one the government has used for countless years and most other countries in the world have started initially with cash basis or fund basis accounting.

In the private sector, although it has been on an accrual system for a long time, that means that they record their inventories at the end of the year. General Motors will record its inventory of car parts and so forth at the end of the year as an asset, whereas the government may have bought a destroyer and has recorded it as an expense, like it is off the books. This is a big difference of opinion. Even within the private sector accrual accounting is treated differently even within some industries.

I can well remember different airlines having different depreciation methods for their aircraft. Some felt they had a better maintenance program and so forth and therefore their aircraft declined in value slower than did some that maybe did not spend enough money on maintenance. Even within the private sector thereare judgment calls as to what type of accrual methods to use.

When I first came to the House in 1993 there was a major concern about government deficits and the amount of debt this country had. With hindsight we have been able to deal with some of that. However, what is the government really worth? At the time the auditor general talked about the sustainability of Canada's debt. How long can governments continue building up huge debts and servicing them?

What is the House of Commons worth? If we look at the financial statements of the Government of Canada we will not see the assets of the House of Commons. Most of us would believe it must be worth something. The difficulty is how we apply a value to it. We could go back to its original cost, which was built after the fire of 1919, but that would not be a proper evaluation because that would be historic. We could go to replacement cost. What would it cost to replace it today? There are various methodologies of arriving at this. One of the major departments of government, the biggest issue is with defence. What is the value of a destroyer? The destroyer has a better value in wartime than it does in peacetime. If we do not maintain it properly, what is its real value today?

This has been an ongoing problem within government to find ways to value these assets. The concept of accrual accounting is not new but it certainly is new to government since governments have been very slow to react to this kind of accounting methodology.

Why do we want to implement it? It is because the people in control of the assets, the managerial class within government, have a responsibility to administer their portfolios effectively. We have all heard about the situation where come the end of March we need to spend a whole bunch of money to get money off the books because of the budget. People look at this as a ludicrous concept.

We want people to manage the resources they have effectively. It is not about spending money. It is about managing buildings, assets, people, human skills and so forth effectively. The motion would provide an impetus for better management of financial assets within government. We have been talking a lot about that recently. People want more accountability and transparency in government.

It is hoped this would lead to better management decisions. The hon. member touched on that. In other words, given the resources under one's command how does one measure the effectiveness with which one administers the assets? There should be a measurement tool.

The hon. member talked about outputs. That is where governments want to go today. Let us measure what we provide for citizens. Ultimately what governments do is transfer money from one set of taxpayers to another. These are all agreements we have among ourselves as people. As a people we want to know how programs are delivered, whether they are effective and whether they are efficiently provided. We need to do more than provide programs for the sake of providing them. We need a measurement tool to see if they are effectively achieving goals.

My minister, the President of the Treasury Board, has been forthcoming in providing a leadership role to ensure we find a way to measure this. In the area of health care, presumably we want to measure infant mortality. We want to measure all these things to be able to say our spending has a significant effect on the people to whom it is directed. Child care is another area. Are we improving the lives of younger citizens of the country?

As the hon. member has mentioned, the program was kicked off in 1995 by the former minister of finance. In March, 2000 the President of the Treasury Board issued a proposal called “Results for Canadians: A Management Framework for the Government of Canada”. In the document she set out a framework for management and an agenda for change designed around commitments to focus on citizens, sound public service values, the achievement of results for Canadians, and responsible spending. An important element of the agenda for change was the initiative to modernize comptrollership across the system.

Once again this gets back to how managers manage. We have had a lot of problems with this in government. Sometimes we do not like managers to manage because we are afraid they will make mistakes. This is where the opposition often makes headway in the headlines. When a manager makes a mistake, all of a sudden it is the direct responsibility of a minister and so forth. For this reason governments have been slow to allow the managerial class to manage these assets.

We need to change our thinking as a people and as a country. People make mistakes. We need to take a bit of risk to get good management. Managers should be responsible for decisions within their control. This is the way we are trying to evolve but it has been a slow process. There has been a culture of change in the federal civil service where things take a long time to evolve.

We need to develop standards and practices to integrate financial and non-financial performance information to properly assess and manage risk and to ensure appropriate control systems. We need to improve procurement, real property asset management and other financial management policies. The Financial Information Strategy was implemented in this context to enable modern comptrollership to happen. It provides the technical infrastructure, business-like accounting policies, modern financial system and trained staff necessary to support modern comptrollership.

We are not opposed to the hon. member's motion per se. We are opposed to the aspect that talks about the immediacy of change. The reality is that the change in process. It is happening. We must let the evolutionary process take its natural course, but we are pretty close to being there.

[Whistleblowing, May 31st, 2002]

Mr. Speaker, as the member suggested, a public service integrity officer has been appointed by the government for the very purpose of protecting those civil servants.

Look at what the member is saying. He is saying grant a general amnesty for anyone involved with this. That is exactly what we do not want to do. The government wants to get to the bottom of this mess and it will not do that by giving people a general amnesty.

[Technology, April 26th, 2002]

Mr. Speaker, the government is highly committed to keeping government online and to making government online as user friendly as possible.

It is with great pride that I focus on the Accenture report. This is a global, international management company which focuses on 23 countries worldwide. What was the number one country for getting people online out of these 23? It was not the United States, it was not the United Kingdom, it was not the European Union, but this country, Canada, through information technology.

[Privilege, April 22nd, 2002]

Madam Speaker, it is surprising that the hon. member for Esquimalt--Juan de Fuca wants to dig himself deeper in this today. I do not know if he needs an extra shovel or not. He is earning a lot of disrespect from members who held him in high esteem.

I believe the member must be guilty of somehow catching an old copy of Mr. Smith Goes to Washington because that is the way this is all playing out. It is a poor rerun.

What incensed me, and I wonder if the hon. member for South Shore would comment, was that the hon. member for Esquimalt--Juan de Fuca went so far as to call Canada a Fascist country. We understand Fascism as Franco's Spain, Mussolini's Italy, and Hitler's Germany. How can an hon. member in all consciousness possibly compare our country with those Fascist regimes?

I have had private members' bills that actually went through second reading and then the House dissolved and I could not get them voted on again in the following parliament. I know the frustration that the hon. member feels. The reality is it is a democratic institution. We are sitting here and we have a majority government. A vast number of people in this country voted for the government. That is the ultimate democracy.

If the other parties were representative of all the people their numbers would not be so small. Their polling percentage would not be only 12%. The other parties are the minority group.

On the specific issue of his legislation, there are a number of people here that, guess what, do not buy into it, do not believe in the decriminalization of marijuana. Some of the people I saw voting against the legislation in fact were going the other way. They wanted the opportunity to defeat it here on the floor of the House.

A number of the Canadian Alliance members voted for the hon. member for Esquimalt--Juan de Fuca. Does that mean they were whipped as well? This whole thing is a ridiculous waste of our time. I wish the hon. member for Esquimalt--Juan de Fuca would sit down with himself and do a little bit of rethinking. Let us put the House back in order and get on with our obligations to the people of Canada.

[Enabling Resource Centre, March 22nd, 2002]

Mr. Speaker, I reiterate the fact that it was a temporary program and it has come to an end. However the government remains committed to the concerns of the disabled. In fact the Treasury Board Secretariat will continue to identify how best to deliver these needed services and remove the barriers for persons with disabilities in the public service.