Mr. Speaker, on behalf of the whip of the Reform Party I would like to advise the House that pursuant to Standing Order 43(2) our speakers on this motion will be dividing their time.
Before I speak to the motion, I would like to address some remarks made earlier by the member for Beauharnois-Salaberry who evidenced some concern with the aspect that the standing joint committee on defence was not addressing the problem that we are dealing with in this motion today.
I would like to go on record as saying that my concept of the standing joint committee on defence policy is to establish what it is that Canadians want from their defence department. He mentioned that we are travelling across the country and this is true. We are travelling from coast to coast. We are visiting every capital with the view of seeing informed Canadians on the aspect of defence and also to talk to people off the street who want to come in and make their views known.
We are also going to Europe and to the United States to establish with the appropriate agencies the importance of the Canadian defence contribution to their plans and our plans for mutual defence and obviously now in security.
The main thing I think that we want to do is establish a criteria whereby the security of the world is enhanced and thereby Canada's ability to operate in the world both industrially and tradewise will be better.
As I see it, the motion submitted by the member for Hochelaga-Maisonneuve is basically a demand for more funds to support industrial conversion. There is in my mind a defence aspect to this, but a very minor one. This is basically a matter of industry.
The defence aspect of it I will discuss a little later, but right now I would like to speak to the industrial aspect of it. The defence industry productivity program, a program whereby the federal government gives some $200 million-plus to various defence industries to support research and development and defence aspects, has been in place for some time.
In point of fact during our election campaign, the Reform Party was against this program. The rationale for that was that if private industry and private citizens do not see the value of investing in such programs, why should the Canadian taxpayer.
Since my election I have been approached by a number of people in these industries and they have pointed out that there is a very valid reason for this. In fact there is a good repayment program. I accept this and am willing to look at it again, but I also know that in some cases this money has been granted to very dubious projects and that there has been a tremendous amount of this money that has just disappeared never to be returned to the Canadian government.
The defence industry covers many sectors. Among them I would mention aerospace, electronics, ship construction, aircraft construction including many components, avionics and communications mainly involved in the defence area in command and control but very, very adaptable to civil industries as well.
Many of these companies have international links which provides them access to merging technologies and global markets. A great deal of Canada's high tech industry in fact has evolved from defence research and development or procurement projects. There are some 800 companies employing over 60,000 people who are active in the defence related industries in Canada.
The Canadian Defence Preparedness Association provided a briefing to the standing joint committee the day before yesterday. They represent some 60 companies and said categorically that they have had great success at conversion.
The Aerospace Industries Association of Canada, which represents a large number of companies in this field, is evidence again of a very successful conversion program from defence to civil industries. In the past their ratio of output went from 70 per cent defence and 30 per cent civil to today, where it is exactly reversed. Their output now is about 30 per cent defence and 70 per cent civil.
This is where I am getting back to the impact of how industry impacts on defence. Obviously there are certain industries where Canada must retain a defence production capability and it is in those areas that I think the government should be involved. They may not be completely economical but they are of overriding importance to our ability to maintain a defence posture and government may have a place in there. It is not only prudent but necessary that government may do this.
However I think basically it should be left to the managers of industry to decide how they run their businesses, what products they get into and which avenues they should follow.
It brings a question to mind that if government directs the conversion of industries from defence to civil, does the government also then have to assume some responsibility for the success of those companies? If they move them from an area where there has only been a defence relationship into a civil one and the company fails, does that mean the government has to pick up the tab for that? I do not think that is the way it should be. I think that is an industry situation which should be covered by the industrial manager.
Indeed if the conversion is into an area where there is already a surfeit, too much capability, it could in fact result not only in the company that converted into that area failing but also other companies that were in there. There is a rollover effect there.
I think it is without any question the responsibility of the managers of industry to find and occupy the appropriate niches. If I may use the analogy, there is not much call for chariots any more, so a chariot manufacturer would not be a very viable occupation or a business. But that company might very well develop into bicycles or cars. On the other hand they have to accept the fact that there are many other competitors and they would have to be prepared to meet that competition.
It is the responsibility of the industry concerned to say this is no longer viable and where are we going to go to maintain our industry.
I think there is a place for government in industry in providing support. That support should be in the areas of perhaps providing a strategic analysis, to say to industry: "This is where we see Canada emerging, this is where we see the marketplace going, this is an area that you might look at to exploit in future".
I think government, as the minister said earlier, should be in the business of, wherever possible, removing barriers to trade. We should enhance the ability of our industries to compete on the world market. We should not subsidize them; we should enhance their ability to do it on their own.
I think probably the most tremendous impact the government could have on our industry, whether it be defence, whether it be civil or whether it be the conversion thing, is to bring the spending habits of the government back into line to balance the budget, to lower taxes. This in itself, in and of itself, would create a far more vibrant industry, it would result in far greater employment and to a large extent it would solve the problem that we are dealing with.
In conclusion I would just like to say that I do not believe that the government has too much place in the conversion from defence to civil industries. Certainly as I have mentioned, there is a road clearing process that it could do to remove the barriers, to enhance the trade, to indulge or enter into trade agreements, reciprocal agreements with other countries and other areas. Other than that I think the industrial base of a country should be run by the industrial managers who are concerned with it.
