Debates of Oct. 17th, 1994

Questions On The Order Paper

[Lee Morrison, Reform, Swift Current—Maple Creek—Assiniboia, SK]

With regard to the Department of Industry, has federal funding been provided to Para-Ordnance located in Scarborough, Ontario, If so, how much, for what purpose and for how long?

[John Manley, Liberal, Minister of Industry]

A search of the department's corporate database has indicated that there is no record of financial assistance having been provided to "Para-Ordnance Mfg Inc." located in Scarborough, Ontario under programs administered by Industry Canada.

[The Acting Speaker (Mrs. Maheu)]

The question as enumerated by the parliamentary secretary has been answered.

[Peter Milliken, Liberal, Kingston and the Islands, ON]

Madam Speaker, I suggest that all other remaining questions stand.

[The Acting Speaker (Mrs. Maheu)]

Shall the remaining questions stand?

[Some hon. members]

Agreed.

[The Acting Speaker (Mrs. Maheu)]

I wish to inform the House that pursuant to Standing Order 33(2)(b), because of the ministerial statement Government Orders will be extended by 12 minutes.

The House resumed consideration of the motion that Bill C-46, an act to establish the Department of Industry and to amend and repeal certain other acts, be read the second time and referred to a committee; and of the amendment; and of the amendment to the amendment.

Department Of Industry Act

[Bob Nault, Liberal, Kenora—Rainy River, ON]

Madam Speaker, I rise today to support Bill C-46. I want to talk about some positive aspects of the government's policy direction because economic indicators in Canada are indeed positive.

It is not a complete coincidence that the Canadian government has introduced new restructuring such as the Department of Industry. At the same time, to be frank and forthright, there are still unsatisfactory economic conditions which need to be addressed. It is my hope that logical steps, including the new Industry Canada format, will lead to sustainable economic recovery in Canada.

The approach of fiscal responsibility with sensible spending reductions while maintaining integral support for business and industry is a reasonable policy for today's economic climate. The reorganization and creation of the new Department of Industry is probably most often associated with business operations in cities such as high tech and sophisticated science based companies. However, I would like to comment on the new Industry Canada from a different perspective, that of a rural setting. Canada's rural regions also depend on industrial development.

My riding of Kenora-Rainy River is in northern Ontario where most people automatically think of resource industries like mining and forestry. While that is true, we do depend on the resource sector to provide us with an economic foundation but the realities of a new market order dictate that economies across Canada diversify.

Industry Canada is tailored to accommodate diversity in all regions of the country. In northern Ontario diversification has been ongoing for many years, out of necessity I might add. Changing market conditions and economic downturns in the major resource sectors have forced regional economies to develop new markets and new strategies.

Diversified industrial sectors play a vital role in northern Ontario's economy. The focus of tourism has expanded to include non-traditional and non-consumptive vacation packages which complement the more common products of fishing

and hunting lodges. This new brand of ecotourism is not replacing the traditional tourism market but rather diversifying a strong sector.

In the past our resource sector consisted of pulp and paper mills and gold mines only. These mills and mines are still the backbone of the northern Ontario economy but now we realize there must be a concerted effort to diversify.

Companies are now concentrating on secondary industry by manufacturing wood and mineral products instead of exporting raw materials. The production of wood furniture and mineral products such as granite headstones is indicative of a diversified economy taking shape in northern Ontario.

Secondary manufacturing such as printing products and packaging and, yes, leading edge technology in a vast array of fields from computers to agriculture and telecommunications is the new wave of economics in northern Ontario and rural regions across the country. This is why Industry Canada profoundly affects rural Canada as well as urban Canada. This is why northern Ontario is keenly interested in the structures within a new department of Industry Canada.

Although I have just cited fairly large resource sectors, there is another area important to my riding and the rest of the country which Industry Canada must service efficiently to promote economic growth and that is a topic that I have raised many times in the House, the area of small and medium sized businesses.

The initiatives and new mandate of Industry Canada are essential tools for small business growth. In order to become more efficient and gain access to large markets, small business across the country must be provided with a network of services and information so that skills can be acquired to start new innovative operations as well as expanding traditional businesses.

Federal developments important to the success of the small business sector include the Canadian Technology Network, Canada Investment Fund, engineers and scientists programs and the much talked about information highway.

Networking and sharing of market information are absolutely crucial to building competitive companies in the global marketplace. Organizations such as economic development offices, centres of excellence, and the new local training boards must develop networks so that business can access the tools they need to remain competitive. Industry Canada is actively promoting such a network with its new initiatives.

New changes to the Small Businesses Loans Act, the Federal Business Development Bank and the formation of a new relationship between financial institutions and small business are also areas important to business and industrial progress. I took part in a task force hearing in Ontario with my colleagues examining a new code of conduct for banks and small business. Granted, changes will not take place overnight. It is this type of initiative that small business will need to survive in the new marketplace.

Gaining reasonable access to capital dollars has been a distinct problem for small and medium sized businesses attempting to expand or establish new ventures. We need these companies to create new jobs and fire the economic engine.

Industry Canada is one of the federal departments working to enhance financial conditions for Canadian companies. Industry Canada will also work toward other objectives to strengthen our potential for economic growth. Eliminating duplication of business services and regulations between federal and provincial governments is an important step in making it easier for our industrial sectors to flourish.

Industry Canada is vigorously pursuing new and practical partnerships with different levels of government. Combine this action with programs that are developed in co-operation with the private sector and we hope to have a new industrial structure in Canada that promotes growth and prosperity. I acknowledge that the private business community will lead Canada's economic recovery, but we in government on this side of the House strongly feel there is a constructive role to play for departments like the Department of Industry.

Specifically I do not blame the industrial sector in northern Ontario if it feels the previous government left it out in the cold during tough economic times. Unfortunately it was the attitude of the federal government to feed struggling companies to the dogs. Liberals, I might add, do not think that is the way we should go. We do not want to throw good money after bad money, but far too often companies needing only a small amount of support to get over the hump were ignored and died a very quiet death.

In the past I have suffered alongside business people in my riding who were unable to access appropriate government services and funding programs. Business proposals with excellent promise were often ignored because of patronage attitudes, a lack of vision within the federal government and plain old bungling. I hope we can eliminate that in the future.

Programs and services being developed by Industry Canada are designed to identify struggling companies with a potential worth saving. That is the Liberal way of building a strong economy.

In conclusion, I return to the resource sector in northern Ontario and the rest of Canada. Primary resource industries not only provide revenues, jobs and valuable exports, but they also spark secondary industry. This economic process is vital to my riding and all of northern Ontario.

Secondary industries, or clusters as they are known in the current terminology of new age economics, spin off from a strong resource sector and form all sorts of companies providing jobs and stability. It is of the utmost urgency that Industry Canada follow through with the promising initiatives created by this new federal department. The new and revitalized role of Industry Canada truly has the potential to forge a solid economic framework in the country. The new mandate of federal departments like Industry Canada is to nurture co-operative partnerships on which we can build an effective national economy.

I am confident that regions such as northern Ontario will now at least have a fighting chance to take advantage of a healthy business environment, due in large part to the development of practical effective federal programs.

[Jim Abbott, Reform, Kootenay East, BC]

Madam Speaker, my constituency happens to be virtually a mirror reflection of the hon. member's constituency. I understand the whole business of resource base and the business of having to diversify.

I was very encouraged this morning when the finance minister said: "Equally we believe that regional economic assistance should focus on genuine opportunities that have the potential to be self-sustaining. We intend to concentrate, for example, more on tourism and on the creation of a positive environment for small and medium sized businesses, the multinationals of tomorrow. At the individual level, as our social security reform proposals make clear, we also believe there is a need to change unemployment insurance, building on reforms begun in last February's budget".

Using exactly the same context in the very next paragraph that follows he said: "The current system is outdated social policy. While it has worked well for a lot of people, for too many others the UI system does little or nothing for their self-esteem or success. But the current UI system is outdated economic policy too. It encourages chronic use and repeat use of the program by businesses and individuals. It is a barrier that prevents people from adapting to changes that are unavoidable and opportunities that are present. Therefore we intend to take measures that will bring UI back closer to what the term says, insurance".

I would like to ask the hon. member two questions. First, during the course of the last election I am sure the hon. member will have run into a Reform candidate somewhere along the line. I would rather suspect that Reform candidate said exactly what the Minister of Finance said this morning, that unemployment insurance should be returned to its original purpose, insurance.

I would be curious. What did the hon. member say in those particular situations? I would suspect that his constituents might be interested to see if what he is saying today, reflecting on what the minister who is a leader in his party is saying, is actually parallel to what he was saying during the course of the campaign.

Was he like other Liberal members attacking Reform Party people who were saying unemployment insurance should be returned to its original purpose, insurance, or was he agreeing with the minister? Is there a consistency in his position?

[Bob Nault, Liberal, Kenora—Rainy River, ON]

Madam Speaker, yes, I did run into Reform candidates in the last election, which I found to be quite interesting. The member should know two things. I very much followed the platform of the Reform Party, simply because if I was going to run against somebody I should know what my opposition was saying.

Reform Party members did not say that they were just in favour of bringing UI back to its original intent of insurance. They were saying they wanted the government to get out of UI completely, to privatize UI and put it in the hands of the employers and the employees or, more important, in the hands of the business sector and let it run the whole show.

The member has to be a little more frank and open when he says that what the minister said today in his paper is identical to what the Reform Party said. There is a very significant difference between what was said in the paper today and what the Reform Party said during the last election campaign.

During the campaign I said-and we have said it continually in the House and I will say it again-that the UI system as it is presently working is ineffective for people in regions like mine because it puts them on a treadmill. Because of the problem created by the regulations as they now exist, businesses use UI as a means of augmenting their business and their existing revenues within the company structure.

I am a railroader. I have three railway terminals in my riding. At the height of the transportation of grains and other commodities at a certain time of the year there are hundreds more employees working in the railway industry than in winter months. As soon as they get enough weeks the railway lays them off. The industry is compensated by having individuals who are technically sound come back into the business when business picks up. Who pays for that?

[An hon. member]

They get a subsidy.

[Bob Nault, Liberal, Kenora—Rainy River, ON]

Obviously, it is a subsidy. I have questioned that for a number of years and it is only one example. Those are things the minister and the government are trying to change so that people will be able to improve their lot without being on a treadmill.

In conclusion, this morning the minister referred to diversifying northern Ontario and having regional development programs that do two things. They access dollars for the

diversification of regions like mine. We continue to say that. We still say that and the minister has said that.

We have also said that we want to focus on a business relationship more than subsidies, wherein we will give loans and encourage businesses to succeed by having a fair regional development program. That is very consistent with what we all have said in the past.

By taking the criticisms of the finance minister out of context the member is suggesting that somehow we have changed. In fact we have not; we are still saying what we said all along.

[The Acting Speaker (Mrs. Maheu)]

We are now in a period when all speakers can speak for 10 minutes and there are no questions or answers.

[Charlie Penson, Reform, Peace River, AB]

Madam Speaker, I am not sure if I am hearing a drum roll over there or something more serious is happening; it is a bit disconcerting.

[Jim Abbott, Reform, Kootenay East, BC]

A drum roll for your speech.

[Charlie Penson, Reform, Peace River, AB]

Yes, that is what it is.

I am pleased to have the opportunity to speak to Bill C-46. The bill clearly demonstrates the government's vision of how business should be carried out in Canada, with a ball and chain tied to one leg.

As far as business is concerned the bill is taking industry in exactly the wrong direction. Business is not crying out for regional development grants. In most cases, when such money is withdrawn the enterprise that was initially helped by government money fails.

Business is not crying out for more programs and more bureaucrats to administer them. In fact the opposite is the case. It should be government's role to provide an environment where business can operate freely and do what it does best: creating competitive goods, creating services on one hand and sustainable employment on the other.

Instead Bill C-46 gives the minister wide-ranging powers to create an environment in which government is the central tool of economic development and where government establishes policies and programs for specific groups and industries. Surely we must learn from the lesson of the former east bloc countries: government intervention does not work.

If taxpayers had all the details of how their hard earned money was spent in the past in the so-called national interest, they would be outside picketing right now. The cabinet should have no right to alter significantly any industry or company in favour of another. Companies and industries must be able to enter and exit the market on the basis of their financial viability. All industries and organizations must face a level playing field and evenhanded policies that facilitate and improve on trade and commerce within Canada.

Governments must learn to let industry stand on its own and die on its own. In the west we have seen the national energy policy and we have seen Petro-Canada. We know the results of government interference and excess of ministerial direction.

It is time to rein in an overbearing government and let Canadian businesses push the country forward. Instead the government insists on having its nose in the workings of the Canadian economy through micromanagement of industry. It is an unacceptable intrusion in all sectors of the economy. The government must devise national policies and stay out of influencing Canadian industry, organizations, regions and provinces in a piecemeal manner.

The Hibernias, Novotels and Lloydminster upgraders of the country should be things of the past. Unfortunately they continue to place a heavy burden on Canadian taxpayers and distort allocation of Canadian human and physical resources. Successive governments, including this one, have still not learned that these projects do not work.

The bill gives a blank cheque to the Minister of Industry to fund projects at will. Canadians remember the individual projects awarded to Shawinigan and Baie Comeau. That was done by the past government, but we seem to be following the same road here. They remember the millions of dollars funnelled into projects of no economic benefit, starting with changes to the mandate of the Department of Industry and responsible to the minister. Reform believes these kinds of projects should be eliminated.

No less out of date is part II of this bill which relates to regional economic development. At one time regional economic development was perceived as a means of reducing regional disparities. Regional economic policy has been in existence for a long time and is widely condemned by economists as a means of creating economic dependence, not economic development. Since its inception regional development policy has been about pork barrelling and perpetuating dying industries. In their heart of hearts I am sure everyone in this Chamber knows or at least suspects this.

The government should admit that regional development starts and ends in the regions themselves. The purpose of the government in the Department of Industry should be to develop national policies and facilitate trade and commerce within Canada, not to provide goods or services that the private sector should and could provide for itself and not to try to manage Canadian industry.

Let me mention some of the things businesses are asking of the government. I take these items directly from the task force

paper released in September 1994 and prepared for the Business Council on National Issues.

Industry wants balanced government budgets with low levels of public indebtedness. Industry wants competitive levels of taxation that encourage savings and investment, things that other countries such as China has. Industry wants international economic policies that promote aggressive trade development and diversification. Industry wants a federation characterized by free trade internally and smaller and more efficient governments working more closely together.

The Department of Industry cannot give businesses balanced budgets, competitive taxation levels and internal free trade by distributing grants or delivering programs. I cannot help but wonder if the government is at odds with itself in the design of this bill.

Today, in this very Chamber we heard the member for Kootenay East refer to the Minister of Finance and his press release, explicitly stating and I quote: "That the private sector is the core of the economy and that government's role requires a fundamental redesign". I quote the Minister of Finance as well: "If Canada is to become more productive, government must become more productive too. We must shift from trying to fix every problem ourselves. And if government activities still do not serve a significant public purpose they should not be continued. I say let us go to it and eliminate grant giving and regional development programs altogether". The Minister of Finance has more to say on the subject: "Restoring the fiscal health is essential. If we do not do that job we will fail at everything else". He is absolutely right.

Here is an opportunity to create enormous savings. One department is being created out of four: the department of industry, science and technology; the broadcasting side of the department of communications; Investment Canada; and the department of consumer and corporate affairs. These changes were put in place under the previous short-lived government before it became apparent how Canada's fiscal situation really was.

Could not more have been done to bring fiscal sanity to bear here? Out of 6,000 positions within these four departments only 230 are being eliminated. That is less than 4 per cent. Out of a budget of $3 billion only $26 million is being eliminated. That is less than 1 per cent. I suggest that the proponents of this bill get hold of the press release of the Minister of Finance and study it.

The government does require a fundamental redesign, as the finance minister puts it. In the area of industry a whole new model is required. The federal government's goal in the industry department should be to establish and maintain a culture that rewards entrepreneurship, innovation and research, and which ensures a level, competitive and honest marketplace.

Hand in hand with this approach should be government policies that encourage free markets, enhance competition and treat all individuals and groups equally. Such policies will see too that business can trade fairly within Canada and that tax rates allow business to be competitive.

These are the kinds of changes industry requires for the 21st century. I hope the government is listening and will make the required changes so Canadian industry can compete and be healthy in the future.

[Andy Mitchell, Liberal, Parry Sound—Muskoka, ON]

Madam Speaker, I am very pleased to have the opportunity this afternoon to discuss Bill C-46, a reorganization of the industry department. It is an important piece of legislation. A large number of activities which are going to affect the business community are being brought together into one department: small business support; tourism; economic development; telecommunications; trade and commerce; science; and consumer affairs.

The thrust of the legislation in what it is trying to accomplish is very positive. We are trying to make the department more efficient. We are going to give the small business sector and the business community in general one stop, the Department of Industry, in which to interface with government rather than having to go through a paper chase every time.

It is going to be a more efficient process. We are going to have a number of consolidations. The member opposite mentioned some of the savings that are beginning. Those will be accelerated as time goes on. We are going to have a more productive department. We are going to have centralized planning and direction for our government's industry policy. This consolidated department will give us the opportunity to do that.

There are three specific areas I would like to talk about: small business support; tourism; and regional economic development.

Small business support by the Department of Industry is absolutely critical to the Canadian economy. It is the fastest growing component of our economy. In the first three years of this decade during one of the worst recessions we have ever experienced, 73,000 new small businesses were created. Eight of ten new jobs in the country come from the small business sector. It employs 4.2 million Canadians and accounts for 37 per cent of the country's employment. This new Department of Industry is undertaking a number of important initiatives to help this sector grow, to help it expand, to help it employ more Canadians.

One of the most important initiatives which I have had some direct input on and one which my colleague for Kenora-Rainy River mentioned was access to capital. It is absolutely essential that the small business sector be able to access both debt and equity capital if it is going to have an opportunity to expand or an opportunity to establish new businesses. The department has already moved in this area. A private sector committee estab-

lished last winter has been studying this issue. It is about to make a report with some very specific recommendations on how an environment can be created within which small business can access capital.

The department is working with the chartered banks, with this committee and others on a code of conduct. It will establish the relationship that will exist between the small business sector and the banking community to help ensure there is better access to capital.

There is an ongoing review of the Federal Business Development Bank to make it more effective and more responsive to the needs of the small business sector. An all party committee of this House, the industry committee, will table within a couple of days its report with some very thorough and sound recommendations on how this process can be taken even further.

I had an opportunity earlier this year to chair an access to capital task force. It toured the province of Ontario and discussed with the small business sector some of the things that can be done to help them access capital.

Beyond that the department is doing other things. It is helping formulate business networks to help individual small businesses combine their strengths so they can compete globally. They are working on establishing a Canada investment fund to help innovative firms access venture capital, to operate not as a replacement for capital from the private sector but as a stimulus for entry into those markets.

There should be better access to government programming through business service centres. This is an important initiative. Small business people do not have the time to go through reams and reams of paper trying to access information. They need it to be given concisely and in one location. This is an important initiative that is being undertaken co-operatively with the provinces.

There is a private sector committee working under the auspices of the industry department looking at the business environment, including the regulatory and paper burden that small businesses have to operate under today. We have to relieve the small business people from spending more time on paperwork than doing their jobs and more time on trying to adhere to regulations than trying to earn profits and employing people.

The second area is tourism, a critical industry in Canada and a critical industry in my riding of Parry Sound-Muskoka. Representing 10 per cent of the Canadian labour force, 1.2 million jobs depend on this sector. In Canada 60,000 businesses are directly employed in the tourism industry. It generates $12.9 billion in tax revenue which can be used for the betterment of all Canadians. Locally in my riding 52 per cent of all employed individuals are directly affected by the tourism industry. For each million dollars that we are able to increase tourism in my riding we can create 39 person-years of employment.

Industry Canada through Tourism Canada is working hard on making that a bigger and better industry in this country. It is helping to formulate partnerships with the private sector so that we can market ourselves internationally as a country and attract more visitors to Canada. They are concentrating on the development of new products such as a winter experience product including snowmobiling and cross-country skiing, areas of vital concern in my riding where people are able to earn their livings.

This is not going to be the end. It is the beginning. As the Minister of Finance said today in his statement, the area of tourism is one the government will concentrate on in the months ahead. As well, the Prime Minister appointed his special advisor to recommend further action. Tourism will be looked at by this government. It will be pursued and will become an even more important industrial tool in Canada.

The last area I would like to touch on very briefly is the area of economic development. Something that is often forgotten in all of the plans is that in northern Ontario we are a resource based economy which has experienced great financial difficulties over the years.

The economic development agency FEDNOR operates in northern Ontario. I agree with the Minister of Finance and several other comments in the House that we cannot subsidize a losing proposition and expect it is going to have any meaningful impact. However, economic development agencies can invest in the future winners. It can help lever investment from the private sector. In fact FEDNOR has committed $53 million directly but by doing so it has been able to lever $186 million in additional funds. That is what economic development agencies are all about. That is what they do.

FEDNOR has participated in 843 projects since its inception and it has helped create or maintain over 3,600 jobs. FEDNOR is an important initiative for northern Ontario. It is one under the auspices of the Minister of Industry and I am pleased to see it will continue under the reorganized department.

In summary, this bill is committed to creating a department which will create an environment in which business can prosper. The reorganization of the department will help this happen. It will make it more efficient, more effective and more productive. I would like to congratulate the minister, his assistants and the people of his department on a job well done in formulating this piece of legislation.

[Tony Ianno, Liberal, Trinity—Spadina, ON]

Madam Speaker, I am pleased to speak on Bill C-46, the Department of Industry Act.

Our nation faces many challenges. Canada can no longer rely solely on its natural resources. The demands of the future cannot be met by supplies of the past. We must develop in ourselves and in our industries the skills needed to challenge the conventional ways of competing at home and abroad.

The competition we face abroad requires us to create new skills among our workforce and a new vision in our industry. A country that solves its own problems and competes successfully with others stays strong and independent. We must begin competing as a team against our international competitors.

This bill will allow the formation of a framework with which we can begin to build Canada's industrial strategy.

The newly created Department of Industry will work with all sectors of the economy to facilitate partnerships between government, business, research centres and labour. An industrial strategy will enable us to better compete in the global marketplace.

We must also foster a climate to encourage Canadians to develop an entrepreneurial spirit that harnesses their skills and creativity. As we know, small and medium sized businesses are the engine of our economy and that is why they must be an integral part of a national industrial strategy.

The small and medium sized businesses of today with the right climate can become tomorrow's multinationals. In order for us to achieve economic growth we must use our limited resources more effectively to encourage entrepreneurs to create the wealth by becoming innovative and helping to expand our export economy.

Canada's exports account for about 40 per cent of the total output of the private sector. One in five Canadian jobs is directly dependent on exports. One billion dollars of exports translates into 15,000 new jobs. That is why the government is aggressively pursuing international trade opportunities.

The creation of this department will help set the framework of achieving the government's objectives, the creation of jobs and economic growth by encouraging businesses, labour and institutions to work together in setting goals and striving to achieve them.

This will enable us to achieve a stronger economy and a better standard of living for all Canadians. Canada already is home to companies that are at the leading edge in their field such as telecommunications, biotechnology, environment and health care, et cetera.

What we must do is facilitate the greater success of these industries in an ever competitive international climate by ensuring that the environment here at home is conducive to the continued achievement of excellence.

Through business networks our government has initiated the sharing of information among diverse sectors of the economy, enabling them to compete internationally, such as the business corporation network which enables Canadian firms to access thousands of partnering opportunities in 36 countries.

Another example is the advisory council made up of diverse business interests working together on the development of the information superhighway, not only for internal use but also for the export market.

We must also improve the efficiency of our industries by allowing them to compete more effectively within our borders. Canada is hampered by many internal trade barriers. The cost of these barriers to Canadians is as high as $6 billion annually.

The Minister of Industry, working in co-operation with his provincial counterparts, has already begun and continues to reduce these barriers to assist the free mobility of goods and services.

Without the innovations of basic research industry will stagnate. Countries such as Japan, Germany and the U.S. spend a far greater proportion of their GDP on research and development than does Canada. To compete internationally we must use our limited resources by working smarter in partnership with existing institutions in the private sector to find new technologies that can be applied and marketed both internally and abroad.

With this bill we will fulfil our responsibility as co-ordinators of the vital relationship between research and industry and promote the fullest use of science and technology from the conception of an idea to its fruition in the international marketplace.

In order for the government to continue to strengthen its support of basic research and its industrial applications we must be able to obtain royalties from research that succeed in being used in the industrial applications in order that these moneys can be reinvested in future research.

Small and medium sized enterprises must be in a position to obtain and capitalize on the innovations of Canadians as they develop these new technologies. Our government will continue to streamline programs to assist the small and medium sized enterprises to foster these new technologies.

In order for these small and medium sized enterprises to succeed access to capital is vital. Along with the reduction of red tape and the burden of the GST our government has already begun the process of streamlining programs and eliminating

some of these obstacles that impede the growth of small and medium sized enterprises.

We must encourage competition among financial institutions to ensure that we give our SMEs as much access to capital as possible. Along with these initiatives our government has increased funding to and the role of the FBDB which will play a more active role in aiding our small and medium sizes enterprises.

As a member of the industry committee I studied the issue most critical to the SMEs which is their inability to access capital. We will putting forward our recommendations tomorrow. Along with those recommendations that will be tabled tomorrow I will be making an additional recommendation to my caucus and colleagues which is to encourage the chartered banks to achieve a target of lending to small and medium sized enterprises of 33 per cent of the total corporate loans, a ratio of one to two; that is, for every two dollars lent to large businesses one dollar should be lent to small and medium sized enterprises.

If the banks comply with this recommendation the capital available to the small and medium sized enterprises will increase from $30 billion to $45 billion, an increase of 50 per cent. Two banks are already achieving this target on their own.

The industry act will help our business become more innovative, efficient and be armed with enough capital to compete internationally. We must take advantage also of our well established international reputation to take Canadian business to the world and also to bring the world to Canada.

Our tourist industry already accounts for more than 500,000 full time jobs and more than 60,000 enterprises. Last year visitors to Canada contributed $9 billion in foreign exchange to our economy and Canadians added a further $18 billion while travelling within the country.

A national tourism strategy will be undertaken with the public and private sectors to restructure and improve Canada's tourism. A comprehensive marketing program both domestically and abroad will help reduce the $8.2 billion travel account deficit as well as improve industry competitiveness.

My constituents of Trinity-Spadina are looking forward to this revitalization of tourism. We must market Canada to the people of the world with pride and invite them here so that they can share with us the beauty our country has to offer. I believe this bill will enhance the streamlining required to make Canada's industries competitive in the global marketplace.

The framework is set to establish a comprehensive industrial strategy which will allow our governments to be the catalysts in achieving our common goals. By helping to co-ordinate these partnerships we will stimulate economic growth and at the same time reduce the deficit and increase the standard of living for all Canadians.

[The Acting Speaker (Mrs. Maheu)]

It is my duty, pursuant to Standing Order 38, to inform the House that the question to raised tonight at the time of adjournment is as follows: the hon. member for Kootenay West-Revelstoke-Pearson International Airport.

[Werner Schmidt, Reform, Okanagan Centre, BC]

Madam Speaker, I wish to address my remarks with regard to Bill C-46 starting with the explanation of why the Reform Party had a subamendment which my colleague presented to the House to include that not only should Quebec be recognized but that rather all the provinces should be recognized. We put this into the framework of the Reform's vision for the department.

I would like to now recognize some of the remarks that have been made by my colleagues opposite. If all of those things that they are talking about, the industrial development that is going to take place, the research and development, the integration of research with industrial development, take place it will take place not because of this bill but in spite of the bill.

We believe the department needs, like all governments, a set of guiding principles and policies, a mission if you will. I would like to state that once again. We believe the role of the Department of Industry is to establish and maintain a culture which rewards entrepreneurship, innovation and research, and ensures a level, competitive and honest marketplace.

To achieve that means to decentralize, not to centralize control. We need to emphasize the reduction of the ability to interfere in the marketplace, and this bill does exactly the opposite. What this bill does is allow the minister and the cabinet in particular to interfere in the marketplace. There must be an emphasis on improving the ability of the marketplace to self-regulate, as was so clearly demonstrated by my colleague. Serious intervention by the government and by the minister in particular should be in emergency cases only.

The national interest must be clearly defined by the people of Canada through Parliament, and in extraordinary circumstances by a national referendum, and not be left in the hands of the cabinet as this bill does.

Regional development is in particular the focus of our amendment. Many fundamental problems that exist in the marketplace today arise not because of the fact that the marketplace was allowed to operate but because there was intervention in the marketplace. Many scholars and former senior mandarins of this and related departments have noted that a national industrial strategy and regional development strategies are mutually incompatible. They fight against one another. We heard my

colleague mention that with regard to subsidies and grants in particular.

The federal government should treat all regions of Canada equally and provide a level field so that people can compete on an equal footing. Fair treatment would eliminate the need for a minister to decide between the national interest on the one hand and the regional interest on the other.

Regional political patronage and, just as important, the temptation to engage in it would be removed to a great extent if the instrument of regional development were done away with. Better efficiency within the department should be realized.

The history of the department coupled with this proposed reorganization shows that this minister has chosen not to exercise leadership, but rather to accept as a fait accompli what was there with the previous government which was a Progressive Conservative government. This government in this bill is perpetuating the confusion and lack of solid direction that existed before.

I want to draw particular attention to some of the things that have happened with regional development. They are an excuse very often for the pork barrelling patronage that goes on. They have represented slush funds in the history of Canada.

Let us talk in particular about Shawinigan for a moment. Shawinigan turned into a canoe specialist area, with the federal government's infrastructure contribution to the canoe hall of fame this year. The canoe hall of fame may be portrayed as regional development but it is certainly not an infrastructure program as Canadians understand it.

When Canadians voted this government in last fall they expected two things from the red book: integrity in government and sound fiscal management. I contend that the record thus far has shown they did not get either.

Projects across this country similar to the Shawinigan one may be noted and we need to look at some of the ways that money has been spent. It does not matter whether the projects are under the infrastructure program or the regional development agencies, it is a pork barrel at its worst.

Let me give a few examples. The list is long but I will refrain from going through the whole list.

Twenty thousand dollars was given to a Quebec fashion industry gala at Montreal's Olympic Stadium; $500,000 for the Upper Humber Golf Club in Deer Lake, Newfoundland; $89,434 for an Acadian wax museum in Caraquet, New Brunswick; $150,000 to develop a program to educate teachers in Cape Breton about economic development; over $500,000 for boccie courts in Toronto; $5 million to help Peter Pocklington improve Northlands Coliseum and Ducey Park in Edmonton; $25,000 to study the possibility of hosting the International Pan-Celtic Festival; and $224,000 for Rita McNeil's tea room and gift shop. It is all too sad that these types of projects are the norm and not the exception. There are some noted good projects as well, but these are the kinds of examples that should not exist at all.

A new parity is needed, one where the free market is allowed to operate freely with competition and let the best one win, not the government deciding who wins and who loses.

I conclude with these words. We should establish a marketplace, an industry department that establishes and maintains a culture and rewards entrepreneurship, innovation and research and ensures a level, competitive and honest marketplace. Hand in hand with this approach are government policies encouraging free markets, enhancing competition and treating all individuals and groups equally. They are the kinds of policies that will make Canada strong and prosperous in the 21st century. These are the kinds of policies we support.

[David Berger, Liberal, Saint-Henri—Westmount, QC]

Madam Speaker, I welcome this opportunity to participate in the debate on this bill to establish the new Department of Industry.

As you know, the department is given wide powers including not only functions previously assigned to the former Department of Industry, Science and Technology, but also certain functions of the Department of Communications and the former Department of Consumer and Corporate Affairs.

The Department of Industry is responsible for the administration of government programs in support of the industry, including small businesses, tourism, science and technology. All government activities relating to science and technology come under the Department of Industry, including those carried out by agencies like the National Research Council, the Canadian Space Agency and the Natural Sciences and Engineering Research Council, just to name a few.

Telecommunications policy, consumer protection and corporate affairs in Canada come under the Department of Industry. This is a very wide mandate.

Naturally, this bill deals with government organization. And while organization is important, it is the policy set forth by the department that is the essential factor. The department objectives are stated in Section 5 of the bill: a ) strengthen the national economy and promote sustainable development; b ) promote the mobility of goods, services and factors of production, [-]and of trade and commerce in Canada; c ) increase the international competitiveness of Canadian industry, goods and services[. . .]

And the list goes on. My point in quoting these examples is that this government's action is in fact based on Chapter 3 of the famous red book, the Liberal electoral platform. This chapter is entitled "An Innovative Economy". I would say that this document, the red book, was innovative in that it emphasizes the importance of the small- and medium-sized businesses in the modern economy.

Let me quote briefly from page 47 in Chapter 3 on an innovative economy, where we read that a "Liberal government will focus on small- and medium-sized businesses because they can and must be the determining factor in turning around what has so far been a jobless recovery". Small- and medium-sized businesses employ 36.7 percent-almost 37 percent-of the labour force and account for roughly 40 percent of our gross domestic product. They have recently-in the 1980s-been responsible for up to 85 percent of new job creation in Canada.

In its electoral platform, the government undertook to improve access to capital for small- and medium-sized businesses. The industry committee has spent the past six or seven months reviewing this issue and will be tabling its report tomorrow. The government also promised to establish a Canada-wide technology network. Plans to that effect have already been announced. Here is another example. The government promised to promote technology partnerships between universities, research institutions and businesses, with a view to focussing on commercial applications of research and development.

Since coming to power, the government has embarked upon widespread consultations on the expansion of science and technology. Such consultations are carried out under the direction of the Minister of Industry, Mr. Manley, and the Secretary of State to Science, Research and Development, Mr. Gerrard.

I do not think members would find it surprising for me to say that I believe the industry committee has a particularly important role to play in policy development. Being the chairman of the committee, I suppose it is only normal that I would say that. Committee work may not always appear to be glamorous but it is in committees that the nuts and bolts of government policy become reality.

Tomorrow we will table our report on small business financing. The report deals with financing but it also tries to provide a context. We try to address the significance of small- and medium sized businesses in today's economy.

I referred earlier to the off-sided statistic that small- and medium sized business accounted for 85 per cent of the jobs that were created in the 1980s. Small businesses are important to job creation and community cohesion but there is more to it than that.

Not all small businesses have the potential to become medium sized businesses or big businesses. We need policies that address the needs of small businesses with strong growth potential. We also need to concern ourselves with the interactions between small and large businesses.

We need to be conscious of the competitive environment in which all Canadian businesses operate. We address these questions in the report that we will be tabling tomorrow. I hope the report will contribute to the debate and lead to policies that respond to the needs of Canadian businesses, small, medium sized and large.

[Alfonso Gagliano, Liberal, Secretary of State (Parliamentary Affairs) and Deputy Leader of the Government in the House of Commons]

Madam Speaker, thank you for giving me this opportunity to speak to Bill C-46, an Act to establish the Department of Industry. The year 2000 is drawing near. With technology, the global village has become a reality. All sectors of activity are interconnected. It has become impossible to work in isolation.

At the same time, the difficult economic times we are going through force us to streamline, to be creative, to do more with less. This is exactly what the government is doing. It is integrating two key sectors under one department. It recognizes the major links that exist between the various sectors, particularly between science, research and technology, communications and industry. It is streamlining the government administration, making it leaner, thus producing substantial savings.

This bill puts into action the recovery plan announced by the Prime Minister last month in Quebec City, to improve the business climate for entrepreneurs, help businesses gain access to new technologies, seek expanding markets and promote tourism.

The Department of Industry is ideally suited as the focal point for the efforts put forth by all the economic development stakeholders, and this is very important in the province of Quebec.

There is no doubt that Quebec entrepreneurs are dynamic, imaginative and competitive. The success of what we call "Quebec Inc." is envied and copied far beyond the "belle province". But there is no doubt either that the federal government has provided precious and beneficial support to many businesses in Quebec.

A study by professor Gérald Bernier, of the University of Montreal, shows that, between 1970 and 1989, the federal government paid $3.9 billion in grants and loans to Quebec businesses.

We will also recall that it is thanks to export credits that Bombardier was able to secure the contract to manufacture subway cars for the New York subway system. That is how Bombardier broke into the international market of transportation. A few years later, the aerospace division of Bombardier bought Canadair from the government of Canada. Of course, you know this company well, Madam Speaker, since it is based in your riding. Bombardier took advantage of extremely easy conditions for the purchase of Canadair. It was also awarded a contract worth over $1 billion to maintain F-18 fighter aircraft, which is how Bombardier penetrated the aerospace market.

Same thing for Bell Helicopter. The Canadian government invested $165 million to convince the Texas company to settle in Quebec. The list of striking examples could go on and on and take up hours of this debate. What is most striking is that the government helps Quebec businesses in high-tech sectors, in sectors with good, permanent, well-paid jobs.

It must also be realized that the industry with a capital "I" is not limited to what it used to mean in the past. It goes beyond heavy industry and manufacturing. It represents the sector of society which generates wealth and promotes well-being. It covers financial aspects such as investments, human aspects such as consumers, as well as economic aspects such as the small- and medium-sized businesses my colleague eloquently talked about earlier.

This single name, Department of Industry, includes all the key factors that will enable Canada to set an innovative economic policy for one purpose only: to promote employment-generating growth. That is our goal. Putting consumers and businesses under the same departmental roof is an innovative idea.

Government officials and business people increasingly realize that industrial growth is a result of the interaction between them. This interaction allows businesses to design better products, develop sound corporate strategies and face global competition. We reinforce this principle of interaction by ensuring that consumers can be heard whenever policies affecting Canadian markets are put in place. In an ever changing market, it is essential to listen to consumers right from the start of the production process. This avoids costly adjustments afterwards.

The same goes for science and technology, regional development, small- and medium-sized businesses, and Aboriginal economic development. All these voices will be heard when policies are developed, agreements negotiated and decisions made. Science and technology will then have the impact needed to create an innovative economy. The $6 billion injected into this sector will thus yield the highest returns possible.

In the age of the information highway, adding telecommunications to the Department of Industry's responsibilities shows the increasingly important role of this sector as an engine of the Canadian economy.

In addition, small- and medium-sized businesses will remain among our priorities because this sector is the best source of long-term jobs. Initiatives such as the recent agreement on internal trade are another important step toward more open markets.

By eliminating over 700 barriers to the free movement of people, goods, services and investments, we will be more efficient and competitive. This is a concrete example of federalism in action.

We can never say loudly enough or often enough how important it is for everyone to co-operate in ensuring our economic and industrial development. Each fight, each confrontation, even each moment of hesitation, is costing us dearly in terms of lost investments and jobs that are not created.

That is why I am happy that the Prime Minister of Canada has asked the leader of the Quebec government to reconsider his decision not to participate in our major trade mission to China in two weeks.

We all understand that the Premier of Quebec is very busy forming his government and preparing for the next parliamentary session. This is certainly a very important and demanding stage, but it should not exclude everything else. In fact, the leader of our government faced exactly the same conflict soon after we were elected last year. He even described this experience in a letter he sent to the Premier of Quebec last week. The Prime Minister wrote this: "I remember the difficult decision I made to participate in the first Asia-Pacific Summit in November 1993, only a few days after my government was sworn in".

As the old saying goes, when there is a will, there is a way. The Quebec premier could concentrate on the most important days of the trade mission if his schedule does not allow for any more time. The important thing is that Quebec be represented by its premier, putting it at the same level as the other provinces. We want to show our trading partners that we are serious, consistent and well organized. All that is important to help Canadian businesses establish themselves on the new Asian markets.

That is why, as the Prime Minister so logically explained, we have asked Mr. Parizeau to reconsider his decision and participate personally in the Canadian mission to China. Quebecers from all regions and of all political stripes will be grateful to him.

I know that my time is up.

[Susan Whelan, Liberal, Parliamentary Secretary to Minister of National Revenue]

Madam Speaker, I am happy to participate in this debate on the bill to reorganize the Department of Industry. The red book foreshadowed this bill. Like this bill its main focus was on small and medium sized businesses as a determining factor in turning around the Canadian economy. It acknowledged that the growth of these firms is essential to creating jobs for all Canadians.

Several initiatives have been announced as part of the small and medium enterprise agenda. A new fund has been established to help expand existing businesses through the Federal Business Development Bank. As well, the Canada Community Investment Fund has been announced to ensure equity financing for smaller firms.

Part of the role of this bill is to focus on the importance of tourism to the Canadian economy. It must be recognized that the money government puts into tourism we get back within 90 days. We get this money back not tenfold but many times that rate.

In 1992 as an example, tourism generated $28 billion in sales revenue for Canada. In the same period the federal government through Industry Canada had a tourism budget of $23.2 million. Every federal dollar spent on tourism contributed $1,201 in sales revenue in Canada in 1992.

Canada's tourism industry also had a significant impact on our current account, contributing $8 billion a year. Tourism employs more than half a million Canadians directly and generated jobs faster than the economy as a whole over the past decade. It is an industry to be recognized. As well, the analysis shows that tourism affords solid opportunities for income and employment generation in all regions of Canada. Current favourable economic conditions offer an excellent opportunity to exploit more fully Canada's international competitive advantage, its clean, safe, natural environment and support industry efforts to attract more international tourists, thus increasing revenue for Canada.

It is my belief that the tourism industry affords an opportunity to provide entry level work and job experience for young Canadians and for groups that traditionally have had more difficulty obtaining employment. Almost 40 per cent of the people working in tourism are under the age of 25, nearly double the proportion of young people in the general labour force.

The tourism industry is also an important provider of jobs to the unemployed. It is a stepping stone for back to work after unemployment, particularly for the young. Sixty per cent of the people who get work in tourism get that work after a period of not working and are under the age of 25.

This government recognizes the importance of this industry and we support it accordingly. The support is shown by the Prime Minister's initiative and appointment of the Hon. Judd Buchanan to work with the government and the private sector to make recommendations on how to increase Canadian tourism and revenues.

I had the opportunity to meet with Mr. Buchanan to discuss tourism concerns in my area of the country and I look forward to Mr. Buchanan's recommendations which I understand are to be made public soon.

In my riding we have the basis for creating an excellent tourism industry. Essex county and the city of Windsor have a wide degree of tourism oriented businesses. We have such historical sites as the Park House, Fort Malden, the North American Black Museum and additional historical sites that are being developed such as the Gordon House and HMS Detroit . As well everyone has heard about the opening of the casino in Windsor. It was expected and is bringing hundreds of thousands of new visitors to the area so far and will continue to do so we hope every year.

As well the recent acquisition of Boblo Island by a local developer who is interested in working with the community to create a year round tourism facility with year round employment opportunities should provide excellent opportunities for the area. Most important our area is bordered on three sides by natural waterways affording numerous recreational opportunities including one of Canada's most beautiful national parks, Point Pelee.

What is needed to create a sustainable tourism industry in our area is a strategic plan. The reorganized Department of Industry will be well positioned to create such an over-reaching strategic plan. I look forward to the announcement of measures in this area.

It has been my privilege to have the opportunity to participate in this debate.

[The Acting Speaker (Mrs. Maheu)]

Is the House ready for the question?