Bernard Deshaies

[Supply, June 7th, 1995]

Mr. Speaker, I would like to make a comment on what my colleague from Calgary North said regarding our public responsibilities, including the fact that programs would no longer be efficient if they came directly under provincial jurisdiction.

There is some discrepancy in what she said. She just stated how important it was to fund training. She also mentioned that with its motion, the Bloc Quebecois was refusing, so to speak, any cuts, especially to the Department of Human Resources Development for the unemployment insurance program.

Since the unemployment insurance fund is showing a surplus, why not allocate this money, which belongs to the workers and the employers, the very same employers who are clamouring for top notch skilled workers-which is what the Bloc's amendment is all about-to training and programs specially aimed at employees and employers, or even give it to the provinces, which are in the best position to use it efficiently? How can she draw a parallel between the Bloc Quebecois not wanting to cut and its wish to train employees and employers?

[Supply, June 7th, 1995]

Mr. Speaker, I would like to thank my colleague opposite. He had a lot to say about cost recovery, transparency and money the government has to spend. I have a simple question for him about unemployment insurance.

When there is a $2 billion surplus, and regions such as ours will be penalized significantly because of distances, how does he explain the transparency of the Department of Human Resources Development, which does not use the extra $2 billion to provide more services for its clientele? It is not transparent as regards other budget items because we cannot find out why it does not use this extra money to keep the people needed in the regions to give training courses or simply provide services.

[Supply, June 7th, 1995]

Mr. Speaker, I was very interested in what my colleague from Kamouraska-Rivière-du-Loup, who is from one of the regions, had to say and I have a question for him, not about decentralization, because he would like to see a move to decentralize towards the regions, but as the Canada human resources centres are formed, we realize there will be some centralization. Because of staff reductions, they are going to centralize staff, which is supposed to enhance efficiency, and they will set up service outlets. Since we are from these regions and, in my opinion and that of my colleague,

these service outlets will not have any decision making authority, people in the riding of Abitibi will have to travel more than 250 kilometres to talk to someone who has that authority.

Does he think it is efficient for the federal government to establish Canada human resources centres without consulting the regions and to develop a strategy that may be effective in Toronto and Montreal but not necessarily in our regions?

[Mining Exploration And Development, June 5th, 1995]

Mr. Speaker, I would like to congratulate my colleague, the hon. member for Timiskaming-French River, on presenting Motion M-292, which reads as follows:

That, in the opinion of this House, the government should consider implementing a new program of mining incentives which would encourage exploration and development in Canada.

After sitting on the Standing Committee on Natural Resources with my hon. colleague for nearly four months to review the Canadian mining industry, I would say that the government is well aware of the situation of this industry, which is confronted with one of the greatest challenges it has had to face in years.

The fact is that base metal reserves have been dwindling since the 1980s, and these are unlikely to be replenished quickly in the near future, as mineral exploration has declined in Canada in recent years.

The mining industry has repeatedly expressed its concerns to the Government of Canada, which, instead of making the adjustment process easier, is in fact making matters worse by letting the investment climate deteriorate in the mining industry in Canada, as compared with rival countries.

More specifically, the mining industry claims that recent trends in mining taxation have caused a decline in exploration and other investment activities in the Canadian mining industry.

A mining exploration incentive program similar to the one put in place in the 1980s should be implemented, but with stricter controls. In spite of the depletion of base metal reserves, Canada's geological potential is still enormous.

Just to show how great this potential is and how much interest it generates, suffice it to say that, on April 25, more than 700 people, VIPs, guests and employees, attended the official opening ceremony of the Louvicourt mine, near Val d'Or, 2,000 feet beneath the surface of the earth.

This mine, which was started up with $300 million in investments and will provide more than 350 direct jobs for a minimum of 15 years, is the result of a joint federal-provincial initiative, the province being in this case Quebec, to conduct exploration around old mining sites that had already been mined out and were therefore not considered as likely to offer sufficient prospects.

New technologies and adequate financing made it possible to open this mine containing copper, zinc, gold and silver, with an estimated capacity of approximately 4,000 tonnes of ore per day for the next 15 years. Recent finds in adjacent zones could extend the life of the mine to 25 years; it is the largest underground copper mine in Quebec at this time.

In addition, three other major mines will open in the next two years as a result of flow-through incentives from the 1980s that promoted a surge of mine exploration.

This is proof that federal tax incentives must be enhanced by adapting them to those of the provinces, so as to encourage preliminary mining exploration and replace the base metal reserves, in Quebec and in Canada, being depleted.

Such a measure would also limit the impact of the developing countries which, through aggressive promotion campaigns, managed to convince many Canadian companies to concentrate their efforts on mining opportunities at the international level.

Because of this, the Canadian mining sector is getting smaller. This, in turn, has a major impact on the Canadian economy as a whole, as well as on many regional economies which rely heavily on the mining sector.

Mining incentives provided in Canada are not less attractive than those existing in most other competing countries. Yet, these incentives do not generate enough preliminary mining exploration activities to replace the reserves of base metals being depleted.

In the meantime, some developing countries have many high quality mining projects on the go, either on the surface or just under it, and they currently do not need incentives to promote their preliminary mining activities.

It is therefore necessary to intensify preliminary mining exploration in Quebec and in Canada. The solution could be to improve the overall international competitiveness of mining investments in Canada.

To that end, it is essential that all levels of government strive to create a favourable investment climate. This includes the following measures: first, improving environmental regulations and the time required to deliver mining licences; second, improving land access and land use, as well as the tax provisions which relate to income and which are not based on profits; third, having a positive impact on the other costs relating to the operation of a company.

The time has come to take into account the economic impact of the restrictions and prohibitions which were imposed in the eighties regarding land use, and which adversely affect Canada's image as a place to invest. We must look at the economic benefits related to our mineral resources, and we must make major improvements to the process for designating protected areas, as well as to the industry's ability to have a significant impact on that process.

As early as September 1992, in its report on the mineral industry, the intergovernmental working group on the mineral industry identified five urgent issues necessitating government intervention. They were the following: first, stopping the erosion of Canadian producers' competitiveness in certain key sectors of mineral production, including copper and nickel; second, increasing reserves of base metals in Canada; third, finding new ideas and developing technology, policies and programs to make grassroots prospecting more efficient, so that new high calibre mineral deposits can be discovered, like the one at Louvicourt, close to Val d'Or; fourth, reversing the obvious trend among mining investors, including Canadian mining multinationals, of passing Canada over in favour of developing countries in Latin America, Asia, or the Pacific with rich resources; fifth, in general, implementing a policy and regulatory framework that is more conducive to maintaining the viability of the industry and stimulating investment in the exploration and development of minerals in Canada.

Regarding the production costs associated with the main metals, Canada is very competitive on the metal market because of the low cost of operating its mines, which is mostly the result of high productivity levels in the industry.

In fact, the Canadian mineral industry was able to considerably increase its productivity because of the rationalization caused by the recession in the 1980s. The productivity of all sectors of the industry markedly increased as a result of new technologies and new mining methods, which were developed in Canada for the most part.

We must consider future generations. We must prevent the decline of base metal reserves by planning now for the exploration and mining of new deposits to replace those that will eventually be depleted.

I would like to point out that financial incentives, sometimes offered by provincial governments and sometimes by the federal government, exist or should exist, but they should be properly co-ordinated. For instance, assistance for the purchase of mining equipment. In this case, the company should be given a tax holiday of two or three years-the time it takes to build a mine. Quebec does this in the case of new mines but the federal government does not.

There are also regional investment funds. In fact, it costs at least $10 million to do the exploration work on a site that may yield $100 million. However, if there is no money to dig, this does not create jobs. We need regional investment funds to develop local sites.

We also need a consortium. The Fonds de solidarité des travailleurs du Québec wants to invest money in mining development. We are glad this is happening in Quebec, but it could be done in other provinces as well. Mr. Speaker, since you say I have only a few minutes left, I will drop the list of suggestions. I can take them to the natural resources committee.

In concluding, I want to mention very briefly the main points we discussed on the Standing Committee on Natural Resources, namely that the mining industry merits immediate tax relief to help offset the existing structural impediments, to restore some of the fiscal advantages taken away during previous rounds of tax reform, and to boost sagging levels of domestic exploration.

Finally, to enhance investor attraction to flow through shares, historically an important source of investment capital for junior mining firms, it was proposed that the adjusted cost base of such shares should be changed from zero to the actual cost of the shares.

This incentive should be available for five years, allowing time for structural reform to be completed.

Finally, these tax changes, together with the measures I mentioned earlier, would help create a climate more conducive to investment in the mining sector in Quebec and Canada and would help to create jobs.

[Business Development Bank Of Canada Act, May 29th, 1995]

Mr. Speaker, I am happy to rise today to speak to Bill C-91 on second reading.

Through this bill, the government wants to streamline the Federal Business Development Bank and modernize its operations, two words that are undoubtedly tied to the reality of markets as we near the end of this century, but which fool nobody as far as the intentions of the federal government are concerned. The government simply wants to interfere even more in regional development, and in the case of Quebec, to increase its presence in the most important economic development mechanisms of the Quebec state.

The government is proposing major changes with this entirely new act, the Business Development Bank of Canada Act, which changes the name of the Federal Business Development Bank and repeals the FBDB Act.

The Bloc Quebecois is therefore opposed to any amendment of the actual Federal Business Development Bank Act. This bank must not lose its role as banking service of last resort for small and medium size businesses in Quebec looking for venture capital and development capital.

In the past, the FBDB has always been a very efficient development tool, greatly appreciated by Quebec's small and medium size businesses.

It should be noted that more than 33 per cent of current FBDB loans are made in Quebec, that 23 per cent of the bank's offices are located in Quebec, that the annual volume of FBDB loans to Quebec is in the order of $310 million, or 38 per cent of the annual volume for the whole of Canada, and that 50 per cent of the organization's staff is active in Quebec.

That is why the Bloc Quebecois is proposing the status quo with respect to the FBDB. We should not forget that the Quebec state exists and that it is trying to create its own development mechanisms, despite strong federal interference in regional economic development. The FBDB remains a parallel structure, an administrative duplication, when it cannot adapt to regional specificity because of so-called national policies.

Several structures and programs of the government of Quebec are already geared to small and medium size enterprises in Quebec. The Société de développement industriel (SDI), with programs such as Aide à la production, which can contribute up to 35 per cent of capital expenditures for a minimum investment of $100,000, or Reprise de la PME, a program which provides loan guarantees covering up to 80 per cent of the net loss on a loan made by a financial institution, are among the many examples that attest to the economic involvement of the Quebec state in small and medium size businesses.

There is also the Fonds d'aide aux entreprises that is administered by the Conseils régionaux de développement, an association of individuals where a greater importance can be given to the specific policies of these same regions. There is also the Fonds décentralisés de création d'emplois that are administered by the Secrétariat au développement des régions, and other programs for small businesses, including Innovation, administered by the Quebec department of industry, commerce, science and technology, that also attest to the existence of a small business financing structure in the province of Quebec.

Moreover, in his last budget, Quebec finance minister Jean Campeau announced that he intends to really play the venture-capital card by increasing regional funds and by creating the Fonds de solidarité de la CSN. We already had the FTQ solidarity fund. By adding another solidarity fund, we expect to be able to create many more jobs. I would like mention one of these regional funds in particular: SOLIDE, a venture capital fund related to the SOLIDEQ program and designed to promote local development. SOLIDEQ is a joint venture of the Fonds de solidarité du Québec and the Union des municipalités régionales de comté du Québec.

I must also mention the Caisses populaires Desjardins, which play a major role in financing small business by granting loans at the local community level. This network of more than 1,232 credit unions accounts for nearly 25 per cent of all commercial loans in Quebec. This is unequalled anywhere in Canada.

There is no point in looking for more evidence of the fact that the new bank will not operate at that level, that broadening the Federal Business Development Bank's mandate as suggested in Bill C-91 constitutes not only duplication of small business assistance structures in Quebec and every other province in Canada, but also overlap of responsibilities.

The question we must ask ourselves regarding the role of the FBDB in Quebec is: How can this last resort institution be integrated into the assistance facilities already available in Quebec without causing duplication or overlap? For many years now, the FBDB has been moving away from venture capital financing and development assistance for new businesses.

The FBDB had its place in remote areas, where capitalization through the creation of medium or large size businesses often proves impossible. Why then mess with this assistance that remote areas need so desperately and start competing with provincial governments and traditional banking institutions?

The Bloc Quebecois members sitting on the Standing Committee on Industry prefaced their dissenting report by saying that the Quebec government is in a better position to assess the financial requirements of small and medium size businesses, as well as to develop and implement appropriate programs; yet, the federal government has currently taken over most of this area of jurisdiction, thereby causing many costly instances of overlap. It is obvious that, with Bill C-91 broadening the FBDB's mandate, the federal government is only reinforcing this tendency.

Furthermore, this bill could also have a very worrisome impact on the FBDB's role as an instrument for economic development. Indeed, since the bank will no longer be limited to its role of lender of last resort, it could provide complementary financing.

The risk, of course, is that the FBDB might go the easy way and concentrate on complementary financing, rather than on last resort financing such as stock or risk capital. Since complementary financing is less risky, the FBDB may naturally be inclined to concentrate its activities on that type of financing.

The expansion of FBDB's mandate, combined with the fact that it will now be able to issue hybrid capital instruments, is likely to distort the bank's role of supporting economic development, while also changing the nature of its mandate.

Before concluding, I want to draw the members' attention to clauses 20 and 21 of Bill C-91, which are totally unacceptable to the provinces, and particularly Quebec. Clause 20 reads: "The Bank may enter into agreements with, and act as agent for, any department or agency of-a province-for the provision of services or programs-on their behalf-"

That provision in the bill goes against the decentralization process undertaken by the Quebec state within its territory, where the regions want to take control of their own development.

With this clause, the federal government pursues its centralizing strategy, a political strategy the objective of which is to significantly reduce the power of the Quebec state to become involved in economic development and, ultimately, to keep it from achieving political independence.

By assuming the right to act, through the FBDB, as agent for Quebec organizations or departments, the federal government totally ignores the authority of Quebec's National Assembly and its executive council act, which provides that any Quebec organization or department must seek the authorization of the Quebec government prior to dealing with the federal government.

The new Federal Business Development Bank, or the Business Development Bank of Canada as it is called in Bill C-91, is now the federal government's main means of interfering in Quebec's economic and regional development. This government wants to act as a banker and take over the role of financial institutions in Quebec and Canada.

This is a definite departure from the FBDB's current mandate. The federal government wants to use the FBDB as a tool to limit the powers of the Quebec state to become involved in economic and regional development so as to take over provincial fields of jurisdiction and, ultimately, weaken the Quebec government's autonomy.

This is why the Bloc Quebecois opposes Bill C-91 and is in favour of maintaining the existing structure if the government is not prepared to propose new ways which would truly promote regional development and which would also help the regions take control of their development.

[Mining Exploration, May 15th, 1995]

Mr. Speaker, on April 25, I attended the official opening of the largest copper mine in operation in Quebec, the Louvicourt mine, near Val-d'Or.

This mine, which will employ over 350 people for more than 10 years, is the result of a roughly $300 million investment by partners Aur, Teck and Novicourt. This impressive achievement shows how important government assistance, in the form of flow-through shares, is to mining.

We deplore the fact that the government has rejected the Standing Committee on Natural Resources' recommendation to enhance the federal contribution to the flow-through share system. The Minister of Natural Resources should be reminded that the government's involvement in mining is not an expenditure but a profitable investment that would benefit a number of mining regions in Canada and Quebec as well as thousands of workers.

[Cn Commercialization Act, May 15th, 1995]

Mr. Speaker, I welcome the opportunity today to speak on second reading of Bill C-89, whose purpose is to privatize Canadian National, a decision that was announced in the last budget and is well on its way to being implemented.

However, before this bill does what it is supposed to do, which is to privatize CN, there are a few points I would like to raise for the benefit of the Minister of Transport and his colleagues, and I am referring to the importance of the railways for resource rich regions like the Abitibi in Quebec, the riding I represent in this House. My concern is that this bill should benefit, not penalize the railways.

The railway system was one of the keys to the economic development of the Abitibi and, as we all know, was also instrumental in the development of many other resource regions in Quebec and Canada. I often wonder, when I see these small rural municipalities along the railroad tracks, whether they grew up around the railway station or attracted CN to the area so they could expand.

We have to ask whether this government, like previous governments, will again be wide of the mark with its railway development policy and this new policy of privatization.

Could it be that once again, Quebec has been the first to realize the importance of having a modern railway adapted to the needs of today's economy?

We all know that the decline of our Canadian railways is not a measure of their usefulness, since during the recent debate on

special legislation tabled by the Liberal government to put the railway companies and their employees back to work, much was made of the importance of the railways for the economy in general.

Oddly enough, the railways were called an essential national service. so that the government could force a settlement during this latest dispute, while in our region we had to fight to justify maintaining sections of the railway network in order to preserve our principal means of shipping our natural resources, our mining and forestry products.

Despite the importance of the railways, the reason for their decline is simple: no government has ever made a serious attempt to remedy the situation when there was still time, although it provided substantial grants for operating the railways.

We have been trying to placate unions for too long, instead of searching for efficient or cost-effective solutions for both the employer and the employee. What effort has this government or previous governments made to promote this means of transport over the past 20 years? Absolutely none. We can sum up the actions of the successive governments by the word "cuts" and the federal leitmotiv "we cannot afford it". Infusions of capital were certainly not the best solution, as we can see by the results today.

Over the past twenty years or more, the only notable things about the coast to coast rail system have been staff cuts, abandonment of lines and cuts to client services. Instead of investing in this great Canadian asset and creating jobs, the government is cutting.

On the other hand, the government found a way to meet the needs of western grain transporters, justifying itself by saying that we need international trade and that our wheat producers have to be competitive. Why did the government not place the same importance on the transport of wood and minerals from northern Quebec and northern Ontario?

Natural resources, and the jobs they create, are the foundation of our economy. The executives controlling rail transport in this country exhibited a flagrant lack of leadership skills. They failed to rationalize an essential service and to make it cost effective when they had the chance. They neglected their responsibilities by letting rolling stock age without replacing or improving it.

The longer they let it go, the higher the costs of getting the equipment back on track. They had gotten so behind in their upkeep and replacement of rolling stock that the situation came to a head at the beginning of the 1970s. The situation only worsened under VIA which, with the weather beaten material it inherited from CN, was never able to break even.

Furthermore, the leaders at the time denied the importance of also maintaining efficient, competitive and aggressive passenger service, deeming it less profitable than freight transportation and not essential because road transportation was available by car or bus. Through its policy, the government supported this situation rather than look for solutions that would put the industry back on a solid footing and would serve the real needs of the communities affected by the flood of lost jobs and services.

Is the government trying to isolate distant localities once and for all by taking away their trains, airports, TV stations and even the social programs the people have contributed to in large and ever growing measure? No study has compared the huge costs of highway maintenance with rail line maintenance in northern regions such as Abitibi, with its notorious climate. The potential end of rail transportation could mean increasingly poor roads. The people in my riding know about this problem. They are faced with increasing numbers of trucks on the road, since the railway was not competitive and lacked the services to compete with the trucking industry.

In my region, this type of transportation is causing a lot of problems, since the highways were not designed to take such heavy loads. It is always the same problem, unfortunately-a lack of consultation. Government makes decisions without consulting the regions and without taking their particular needs into account. Even today, privatizing CN as outlined in this bill does not guarantee that services will be maintained in outlying areas. In spite of this, the federal government gives itself the power to interfere in short-line railway operations through clause 16 of Bill C-89.

This is totally unacceptable, since short-line railways were created thanks to the initiative of rail staff and unions, who took the risks that our leaders had avoided taking in the past. These people feel that some sections abandoned by CN and the government can become profitable through sound management. To fulfil their potential, short-line railways also needed the operating flexibility that only provincial regulations could provide.

It would be dishonest for the government to discourage the creation of short-line railways, or to try to hamper the development or operations of those already in existence by interfering whenever it feels like it. The short-line railway in my riding of Abitibi is a very good example of a CN section. It meets with the Lac-Saint-Jean line. We managed to rescue it from abandonment with all the attendant advantages for our region in terms of jobs, economic benefits, development, transport, and so on.

I would also like to take this opportunity to address clause 8 of this bill. As it now stands, this clause is unacceptable. Let me explain. The government plans to sell most of CN, an institution over 100 years old, through the largest share issue in Canadian history, which would amount to some $2 billion.

Like my Bloc colleagues, I deplore the fact that this government did not include in the bill a clause explicitly prohibiting foreigners from holding a majority of shares. Today, I will try to explain to the Minister of Transport and all his colleagues how important it is to encourage local purchase by local investors if possible or any concrete gesture through short-line railways.

Railways have played an important part in the development of my region and many others, and they can still play this role if we make the effort of identifying the needs of people in the regions and helping them meet these needs. May I point out that we are not dependent on the U.S., and yet the danger is real. The presence of Goldman Sachs, an American firm, among the brokers appointed by the government confirms the government's need to issue shares outside the Canadian stock market.

We also know that American investors are used to assessing railway companies. There are at least a dozen on the stock exchange list in the U.S., while in Canada, there is only CP, hence the risk that less informed Canadian investors may not recognize a good deal when they see it. That is why I propose that clause 8(5) be deleted or at least amended to apply only to Canadians.

To conclude, if the railway system was the connecting link for all the regions of this country, and promoted its development, why is it that today, on the eve of the 21st century, we are not able to find innovative ways of making it profitable? The railway is an essential public utility, connecting people and businesses.

If a committee to save the railway system were set up, I am sure that we could come up with solutions, because I am still convinced that solutions do exist and that short-line railways are part of the solution. Personally, I think that privatizing CN is not a bad idea in itself since investors are needed to boost the rail industry if it is to become more performing and modern. And I think that regional business functions may offer solutions.

Privatizing must take place in the interests of all stakeholders: customers, employers and employees. In terms of profitability, CN is not doing as bad as in 1992, with estimated profits for 1994 between $240 million and $250 million.

Perhaps we have the time and resources to make the right choices. Let us take the time to weigh up the pros and cons of Bill C-89 to try to make up for the mass of not so great decisions made by rail officials and our governments over the past 20 years.

[Canadian Broadcasting Corporation, May 10th, 1995]

Mr. Speaker, this morning's Toronto Star announced that the CBC's English network is forced to coproduce television shows with foreign companies, especially from the United States. Therefore, we will slowly but surely watch the Americanization of the CBC. This is neither a coincidence nor a deliberate change in the CBC's programming.

Could it be that the budget cuts affecting the English and French networks of the CBC are dramatically reducing the production of Canadian television shows? It is very likely that this is the case. The English network no longer has the means to produce its own shows.

The Liberal government is therefore presiding over the systematic dismemberment of what has long been cherished as a pillar of Canadian culture. The English Canadian culture, with the unwilling help of the CBC, is on its way to becoming a carbon copy of the North American culture.

[Burundi, March 30th, 1995]

Mr. Speaker, although the situation in Burundi is getting critical, and ethnic massacres might start any day now, all the United Nations Security Council is doing on the matter is considering appropriate measures to bring to court people who might commit actions which could be construed as genocide.

It is astounding to realize how fast the international community has forgotten what happened in Rwanda. Rather than trying diplomatic means to defuse the situation and planning for the quick deployment of multinational forces should the conflict degenerate, the UN is preparing for a post-genocide period.

Canada's attitude toward this partner state in the Francophonie is just as disappointing as the attitude of the Security Council, and it shows a total lack of leadership.

[Indian Affairs, March 23rd, 1995]

Mr. Speaker, my supplementary is for the same minister.

In the last four years, over 400 pages of studies and reports have been produced by that department on the Omnibus air service and the nutritional status of the Inuit.

Based on these studies, can the minister explain why the cost of food remains so high, in spite of substantial subsidies?