House of Commons Hansard #139 of the 35th Parliament, 1st Session. (The original version is on Parliament's site.) The word of the day was federal.


Questions On The Order PaperRoutine Proceedings

3:30 p.m.


Ian McClelland Reform Edmonton Southwest, AB

With respect to those individuals who have already been compensated by the Government of Canada because they contacted the HIV virus as a result of tainted blood transfusions, ( a ) what is the government's policy concerning the spouses of individuals with HIV and ( b ) is the government considering compensation for the spouses who unknowingly contracted HIV from their partners?

Questions On The Order PaperRoutine Proceedings

3:30 p.m.

Sudbury Ontario


Diane Marleau LiberalMinister of Health

The question of including HIV-infected spouses was given very serious consideration by the government at the time the extraordinary assistance plan was being developed. The terms of reference of the plan remain unchanged.

Only those directly infected with HIV as a result of having received contaminated blood are eligible for assistance but spouses of such persons are ineligible.

The plan was developed in consultation with the Canadian Hemophilia Society and representatives of non-hemophiliac HIV-infected blood transfusion recipients. The plan, which provides $120,000 tax free, is an exceptional response by the federal government.

When the government established the amount payable, it did take into consideration factors such as support of spouses and children. At this time no compensation for spouses is contemplated by the government.

In addition to the assistance already provided by the federal government, a multi-provincial and territorial assistance program was announced in September 1993. It provides financial assistance for life for the person directly infected as well as assistance for spouses and children.

Questions On The Order PaperRoutine Proceedings

3:30 p.m.

The Acting Speaker (Mrs. Maheu)

Shall the remaining questions stand?

Questions On The Order PaperRoutine Proceedings

3:30 p.m.

Some hon. members


Motions For PapersRoutine Proceedings

3:30 p.m.

Kingston and the Islands Ontario


Peter Milliken LiberalParliamentary Secretary to Leader of the Government in the House of Commons

Madam Speaker, I would ask that the notice of motion for the production of papers be allowed to stand.

Motions For PapersRoutine Proceedings

3:30 p.m.

The Acting Speaker (Mrs. Maheu)

Is it agreed?

Motions For PapersRoutine Proceedings

3:30 p.m.

Some hon. members


Department Of Industry ActGovernment Orders

3:30 p.m.

Ottawa South Ontario


John Manley LiberalMinister of Industry

moved that Bill C-46, an act to establish the Department of Industry and to amend and repeal certain other acts, be read the third time and passed.

Department Of Industry ActGovernment Orders

3:30 p.m.


David Berger Liberal Saint-Henri—Westmount, QC

Madam Speaker, I am glad to have the attention of the minister while I speak and I thank him for being here. I am also happy to see that the spokespersons are here for the opposition parties.

I am pleased to participate in the debate at third reading of the bill to establish the Department of Industry. Those who have followed the debate know that this bill concerns the organization of the Department of Industry. The minister and the department have been given a broad mandate: industry, science and technology, consumer and commercial affairs, communications and investment. All are brought together under the responsibility of a single department and a single minister.

The bill, as I was saying, concerns the organization of the department and the responsibilities it has been given. It is a housekeeping bill, if I may use that expression.

It is perhaps more important to know what the department will be doing. What is the minister's vision with respect to economic development? He made an important statement earlier this week that answers this question and gives us an idea of where he is headed. In his statement, he says that the government does not accept that Canadians must choose between high unemployment and stagnation of their incomes. Nor does Canada want to accept the American approach of low unemployment and a large number of low-paying jobs. But neither do we want to adopt the European approach, which is characterized by a relatively low number of low-paying jobs and a rate of unemployment that is chronically very high. The government believes that we can move forward on both fronts, employment and income, at the same time. In other words, the government would like to create good jobs that pay well. This is an objective to which all Canadians would give their approval. But you will agree that it is not so easy to put into practice.

In his statement, the minister observed that although Canada is a large trading nation, it has not yet acquired a large trading mentality, particular with respect to small and medium size business.

The report of the Special Joint Committee reviewing Canada's Foreign Policy, which was also tabled in the House a few weeks ago, is even blunter. It reads: "Canada is a trading nation but has not yet proved itself to be a nation of traders".

We are reminded in this report that only one in ten Canadian manufacturing companies exports and that automotive, natural and energy resources trade account for three quarters of our total exports. The picture is brighter for trade in services and high-tech products, but 25 per cent of total trade in these industries is done within three companies. Furthermore, exports to the rest of the world, outside North America, account for less than 10 per cent of our exports.

In short, the natural resource industry is doing well. It has its ups and downs, but for the time being, it is doing well. The current price of resources on the world markets is high. The automotive and automotive products industry is also faring well, in southwestern Ontario in particular, but in Sainte-Thérèse, Quebec, as well. While high technology is somewhat successful, we have a substantial trade deficit in that area. This means that we import far more high-tech products than we export.

To sum up, we have not managed to put in place the fully developed structure of an industrial economy. As everyone knows, the wealth of Canada comes mostly from its natural resources. So, if we want to get somewhere, we need to know where we stand so as to determine where we need to go from here.

I think that we will also have to take a realistic view of the role of small and medium size businesses in the Canadian economy.

While it is true that many jobs have been created by small and medium size businesses over the last 10 years, they are not the be all and end all of our economy. Many small and medium size businesses exist because of the existence of large companies. They are suppliers to these large companies.

Second, as I have already noted, few Canadian small and medium size businesses are exporters. Small and medium size businesses contribute only 9 per cent of total exports and less than 8 per cent of manufacturing exports.

Third, the contribution of small and medium size businesses to manufacturing in Canada is anaemic. In 1990 manufacturing firms with less than 100 employees were responsible for only 32 per cent of manufacturing employment.

In Japan I understand that small and medium size businesses account for 75 per cent of manufacturing employment. That is quite a difference, 32 per cent in Canada of manufacturing employment accounted for by small and medium size businesses versus 75 per cent, over twice the proportion in Japan.

In the report that the industry committee tabled several weeks ago on financing small and medium size businesses, we referred to the role of such businesses in today's economy. We referred to the significance of these businesses. We remarked that globalization requires a rapid response capability in design, production, marketing and other activities. We added that flexibility, innovation and technological capability are critical. This applies to all firms regardless of their research intensity or the nature of their product. It applies just as well to firms in the traditional sectors of our economy.

As a result, finely subdivided, highly specialized linear production processes are no longer advantageous and the large, traditionally structured firms do not achieve the best results. We noted that small, knowledge intensive firms are moving into the vacuum.

However, we noted that in Canada we have few new competitors. New competitors are the firms which are characterized by managerial and technological capability, by flexibility in their production processes, by the emphasis that they place on developing and nurturing their human resources. We need more new competitors if we wish to maintain our high standard of living.

The industry committee made a number of recommendations which relate to such new competitors, to those Canadian firms that have set themselves national and international goals. Our whole focus on venture capital is the solution only for firms with growth potential. Therefore, our focus on venture capital is directed to those firms.

We also made, for example, a recommendation that the government establish a limited working capital guarantee for small and medium size business exporters, again because of the importance of exports to our economy and because of the fact, as I mentioned earlier, that so few Canadian businesses and small and medium size businesses are exporters.

Recently, two young men came to my riding office and asked me to help them find work here in Canada. They are both doctoral students in the same field, engineering. One of them wants to do research in robotics. They approached me independently a few months apart. One came to see me in September, perhaps, and the other more recently, in October. By coincidence, one of these students is from Saint-Henri and the other from Westmount, the two parts that make up my riding. I must say that the riding also covers all of downtown Montreal, but those are two important parts of my riding.

These two young men applied to the Canadian Space Agency, but unfortunately opportunities are limited now. They have looked all over. They applied for work in the private sector, in Quebec and elsewhere in Canada. Unfortunately, they have not had the desired success. One of these young men recently

accepted a job in Philadelphia and I was told that the other might go to Detroit.

I was told that many of their engineering classmates from Concordia and McGill universities had to go to work in the United States.

I firmly believe that the Canadian government is on the right track by emphasizing employment and growth. However, it is regrettable that the Government of Quebec does not have the same priorities. Once again, we will waste so much energy debating existential questions instead of dealing with the real needs of Quebecers.

The Canadian government must stay the course. We must continue to emphasize the economy and growth with the policies which have been announced since the last election, following the direction taken by the industry committee and with the same priority for growth and jobs that underlies and is in fact the main theme of the action plan tabled this week by the Minister of Industry.

Department Of Industry ActGovernment Orders

3:50 p.m.


Gaston Leroux Bloc Richmond—Wolfe, QC

Madam Speaker, it is with great pleasure that I take part in this third reading debate on Bill C-46. Since my colleague for Saint-Henri-Westmount said that Quebec is a province, a region that cares more about existential issues than about job development, I rise to examine sections of this bill which provide precisely for job creation and development.

At this third reading stage, I would like to go into the details of the regional development concept. I want to base my speech on two distinct approaches, which are the key factors of the regional development problem in Quebec.

The dynamic policies of regional development in Canada are based on the concepts of growth and development. Both these concepts continually bring the central government in Ottawa into conflict with Quebec and its regions: it is the Quebec government versus the centralizing Canadian federation.

Let us ask ourselves what regional development is really about. First of all, let me remind the House that Canada is composed of four main regions: the West, Ontario and Quebec, in the heart of the country, and the Atlantic Provinces. Each of these four regions has its minister responsible for regional development. What should be examined is the impact the concepts of economic growth and development have.

In its 1989 report on social and demographic development, the social affairs council describes its approach as follows: "Growth is a quantitative measure of the increase in a society's wealth." That is how the increase in the gross domestic product per capita, for example, is presented. "Development implies a kind of growth that does not create inequality and is aimed at giving all individuals, wherever they live, the same opportunities for fulfilment." This is a major difference between the two concepts of growth and development.

In this perspective, regional development originates in each of Quebec's regions and is based on a dynamic of balanced economic growth among the regions. The member for Saint-Henri-Westmount knows Quebec very well. He knows that there are sixteen regions and that regional development means a balance among these regions. This notion of development versus growth underscores the federal government's approach with regard to regional development.

Indeed, given how all the federal government's regional development policies have evolued over the last 40 years, one can say objectively that the federal system has favoured growth as measured by economic output over development and the structural changes it involves.

The economic dimension, that is favouring a particular area or industrial region in order to stimulate Canada's gross domestic product, is clearly given priority over the structural dimension in most of what the federal government does in the regions. This approach, this federal involvement in regional development, will have an extremely detrimental effect in the long run on the development of our regions, in Quebec. That is the point I want to make.

I would like to start by reviewing a number of Quebec's demographic characteristics tied in with the economic problems faced by peripheral regions. Let us keep in mind that Quebec's share of Canada's population has been eroding steadily, down from 30 per cent at the beginning of the century to 25.8 per cent in 1986. The problem in Quebec is due mainly to the acceleration this trend. It took exactly 70 years from 1901 to 1971, for its share of the total population to decline two points but a mere 15, from 1971 to 1986, to drop two more.

In the regions, it has dramatic effects and the federal government's regional development policies are partly responsible. In Quebec, more communities are loosing population than growing. In Quebec, more regions are declining than growing.

Between 1971 and 1986, the number of young people in communities with declining populations fell by 43 per cent and that of adults by 9.5 per cent, while the number of seniors increased by 24 per cent.

Over the same period, in communities with growing populations, however, the number of young people remained more or less the same, while the adult population of childbearing age increased by 49 per cent. This means that when they leave their community, young adults take with them their reproductive potential, causing a further decrease in the birth rate.

The communities, mostly in peripheral regions, that experienced a substantial decline in population between 1971 and 1986 are also those with the highest rate of unemployment. Basically, a decline in population spells social problems.

In April 1994, for example, the rate of unemployment in the Gaspé and the Magdalen Islands was 27 per cent; in the Lower St. Lawrence region, 17 per cent; in Saguenay-Lac-Saint-Jean, 15 per cent; in the Laurentians, 16 per cent; in Lanaudière, 16 per cent. An analysis of rural depopulation over a 15-year period shows that people are moving to major centres of economic growth with significant impact on Canada's Gross Domestic Product, which determines smaller communities and regional development in Quebec.

This is demonstrated by a historical overview of federal involvement in Quebec's regional development and the impact of these policies on Quebec's dynamics in this area.

In the 1960s, despite some valid initiatives, federal efforts as a whole lacked a global development strategy and co-ordination among the various departments involved. The departments operated sector by sector, each pursuing their own goals, without co-ordinating their actions regionally and correcting regional disparities. In the early 1990s, this attitude became a trademark of the federal government's regional development efforts in Quebec.

The Liberal government's current dismantling of VIA Rail networks in the regions shows that this Crown corporation did not receive the mandate to promote Quebec's regional development. There is only one criterion: profitability and economic growth and not regional development and people's well-being.

Such an attitude to regional development threaten the infrastructure of outlying areas, speeds up the depopulation of outlying municipalities and aggravates regional underdevelopment.

Let me give you another example: The disappearance of local post offices and of some local CBC TV stations shows the same disregard for regional development and the priority given by Ottawa to profitability and sectoral economic growth. There is a lack of global vision. They are busy saving the furniture while the house is burning down.

In the late 1960s and early 1970s, the need to co-ordinate the federal government's regional development initiatives in Quebec led to the creation of the Department of Regional Economic Expansion. The department focused its efforts on several economic growth centres, hoping that their development would extend to disadvantaged regions.

At the same time, the Higgins-Martin-Raynauld report commissioned by the department, on which the federal government's new regional development policies are based in part, concluded that Quebec's economic difficulties lie in the weakness of its only growth centre, Montreal.

The purpose of the study which led to this report was to define the main development objectives for the province of Quebec, simply from the perspective of territorial development. What this report has to say about the approach to development is important. It says that growth centres have an attractive force that drains human, financial and managerial resources from the outlying regions and that this process feeds on itself. The policy is to invest in the major centre and bring people, money and resources in from the outlying areas. Some kind of development! How can you be more centralizing?

Further on, the report says that no territory can become a development centre unless it was first a satellite-so it must have grown-and that being a satellite should have no pejorative connotation because it is the only way to strengthen a territory's competitiveness. That is the federal approach, philosophy and thesis for developing Quebec.

Further on, the report says in the same vein that much more important today are the innovations related to technological progress, concentrated in the relatively large and dynamic cities which are the centres of development. As far as this report is concerned, and it remains an important document in the evolution of federal policies and of the Liberal philosophy of regional development, even though the report is old, Quebec's economic future will be mainly determined by the competitive position of Montreal compared to the economic space dominated by Toronto and other regions dominated by big cities elsewhere in the world.

Unfortunately, the Government of Quebec is just as ignorant about some outlying communities and at times even denied their existence.

Influenced by the liberal line of thought which promotes megaprojects and seeks to build momentum for economic growth, sometimes by expanding large urban centres, the Quebec government decided, in the mid-sixties, to concentrate in regional centres the public services provided by various institutions, so as to reinforce the natural poles of economic attraction. At that time, a Liberal government was in office in Ottawa, while another Liberal government was controlling Quebec's destiny. The growth of Quebec cities over the last 15 to 20 years

would have been stronger without this concentration of public services in natural poles of economic attraction.

Unlike communities which did not provide such services and which experienced a decrease in population, the centres offering these services experienced a population increase. So, the development of some 16 Quebec regions, that is the structural planning of fringe areas, necessarily included the setting up of important services, as well as the development of a stable economic infrastructure adapted to the need of the community for a dynamic economic activity of its own, generated by local people instead of being subjected to the remote interests of a centralizing pole.

Again, the influence of this liberal and centralizing federalism is responsible for the delicate situation of most remote regions in Quebec, as well as for their demographic and socioeconomic underdevelopment.

The seventies saw the emergence of general development agreements between Canada and Quebec, the second generation of ERDAs which, incidentally, will expire a week from today, on December 14. However, these agreements all suffer from the same deficiency, that is the lack of a development policy based on eliminating the structural problems which impede regional growth. This problem is an inherent part of the federal regime, which helps maintain and even increase regional disparity, and which also jeopardizes the evolution and the survival of a whole nation.

The unilateral patriation of the Constitution in 1982 was, to a degree, a form of federal interference in regional development.

This was undemocratic, since Quebec has yet to endorse the Constitutional Act of 1982. It was a show of force against Quebec, by the federal Liberals and their friends from the other Canadian provinces, to increase, among other things, the federal spending power in Quebec, so as to control its regional economic development. In the eighties, Ottawa increased its interference in regional development matters, thus showing more clearly than ever its enormous potential for developing parallel structures and for generating duplication, which costs Canadians and Quebecers dearly, and which also accounts for their indebtedness.

This disastrous federal policy on regional development in Quebec continues to apply. The Department of Regional Economic Expansion was replaced by the Department of Regional Industrial Expansion. They are very good at inventing new structures and duplicating what has already been done. DRIE was to focus industrial policy on economic growth strategies. Unfortunately, and this was to be expected, the department was dominated by sectoral concerns, so that industrial development got more money than regional development.

Today, legislation to establish the Department of Industry is about to be adopted. We are now on third reading. Bill C-46 provides that the Department of Industry has the power to "initiate, recommend, co-ordinate, direct, promote and implement programs and projects in relation to regional economic development in Quebec". In other words, the department will go on investing and having an impact on regional development in Quebec, but its activities will not be part of a comprehensive approach to deal with the structural problems of the regions.

The federal government should withdraw from regional development in Quebec, since it tends to ignore the process for the development of regional structures, initiated by Quebec and its regions through its regional county municipalities, its regional development secretariat and its regional economic development councils. As a result, the federal government has a negative impact on regional development in Quebec and on the general development of Quebec's potential.

In Bill C-46, the federal Liberal government has irresponsibly ignored Quebec's clear-cut and traditional claim to sole jurisdiction over regional development. Furthermore, with its total lack of concern about duplication and overlap, the federal Liberal Party helps waste public funds, and it has done so by creating and putting in place structures that Quebec has already had for more than 20 years.

The approach taken by the federal Liberal government, with its two-fold obsession with developing the industrial centres of Quebec's metropolitan areas while ignoring the rest of the province, and with spreading the federal centralist gospel right and left, without a co-ordinating policy, has not only proved to be disastrous for the development of the regions but in many cases has been an obstacle to Quebec's attempts to decentralize socio-economic responsibilities to the regions.

As a distinct society, Quebec has a creative and innovative potential for regional development that, in terms of its perspective and emphasis on long-term solutions, goes well beyond anything the federal government has been able to do in the West, Ontario, Quebec or the Maritimes with its regional development policies.

In response to invasive federal policies and intent on saving Quebec society from regional underdevelopment and eventual cultural assimilation, since the two go together, in 1979 Quebec passed the Act respecting land use planning and development, Bill 125, and created regional county municipalities. These regional centres were to become a vehicle for involvement at the grass roots level.

In Quebec, decentralization of decision-making powers, together with a planning approach that differed substantially from

the federal government's growth policies, were subsequently seen as essential components of a regional policy for the year 2000.

At the same time, in an unprecedented spirit of planning and development, the Government of Quebec divided its territory into 16 administrative regions. These are strategically important to Quebec. They are based on geographic, economic, industrial and cultural components in which we find the only real actors responsible for Quebec's development. And this is something that the federal government cannot and does not want to understand, because acceptance of the principle of decentralization is fundamentally at odds with the federal Liberals' idea of centralization that has come straight from Trudeau.

Regional county municipalities, or RCMs, are groupings of municipalities with a combination of economic, cultural and social activities reflecting their proximity, and the movement of people to the places where they work and live. Administrative regions have called upon these RCMs to define development thrusts setting forth the whole range of problems being experienced by these regions with respect to employment, and social, educational and cultural development.

These diagnoses were used to develop a strategic plan for each RCM. The government in power must listen to and recognize the work already accomplished through the expenditure of public money, and the investment of resources and skills.

Take the example of the Eastern Townships, a region that includes seven RCMs. These local bodies analysed and pooled their strategic development plans, and then gave priority to the major development thrusts and development projects, in line with the regional decentralization policy of the Quebec government.

These priorities, which are determined by the particular environment, reveal areas where correction is required, where development is indicated. Thus, by promoting the development of human resources, training and manpower, research, technological development and the linkage of businesses, the decisions made locally have an influence on the economic development of the whole country.

We have to go back to the real make-up of the country, beyond the administrative regions, and focus on the sub-regions and the local communities, assess successes and failures and rethink development. That is what the Parti Quebecois and the Bloc Quebecois have being working on in their joint plan for a sovereign Quebec. Regional economic development must be coupled with a social development policy to provide every citizen with an equal opportunity to achieve their full potential in a healthy and challenging environment, wherever they live in this huge area. A growing majority of Quebec players, we hope, will be able to pull along in their wake all of Quebec, and Quebec society, through its regional players, fully supports the decentralization proposal put forward by the new Quebec government.

So, at the third reading stage of Bill C-46, the Bloc Quebecois, the Official Opposition, objects to the domination exercised by the Department of Industry and the powers assigned to the minister, relating to regional development in Quebec. We definitely denounce the new powers and duties of the Minister of Industry to formulate and implement policies, plans and integrated federal approaches in Quebec, as stated in Clause 9( a ) of the bill.

We also denounce the power to lead and co-ordinate the activities of the government of Canada in establishing co-operative relationships between various agencies of the government of Canada and Quebec. The government has the gall to have the legislation provide that the minister may deal directly with certain bodies in Quebec, going over the head of the Quebec government and National Assembly, and going as far as identifying municipal bodies, which come under provincial jurisdiction. Incredible!

This bill shows how stupid and wasteful it is to want to interfere like that, further compounding duplication and overlap.

Essentially, Bill C-46 reflects the federal government's resolve to take over regional development in Quebec and set it in a Canadian perspective of economic growth and efforts to bring the federal deficit down, a perspective that greatly hinders the enfranchisement and development of the people of Quebec.

The only option acceptable to us is the structural development of our regions through the decentralization program developed by the new government of Quebec. It is therefore by leaving the current federal system that we will achieve our goal as a society, a society destined to really develop structurally, all over its territory, and one looking towards the next century and open to the world.

The Official Opposition's position on this bill is no to the federal government and yes to Quebec.

Department Of Industry ActGovernment Orders

December 7th, 1994 / 4:15 p.m.


David Berger Liberal Saint-Henri—Westmount, QC

On a point of order, Madam Speaker, I wonder if there would be unanimous consent to let me ask the member a short question.

Department Of Industry ActGovernment Orders

4:15 p.m.

The Acting Speaker (Mrs. Maheu)

Is there unanimous consent?

Department Of Industry ActGovernment Orders

4:15 p.m.

Some hon. members


Department Of Industry ActGovernment Orders

4:15 p.m.


David Berger Liberal Saint-Henri—Westmount, QC

Madam Speaker, I would like to ask the member how he can speak on industry for about 30 minutes without even mentioning small and medium size businesses or even mentioning the word business.

His whole speech concerned the administrative structure. Does he not recognize that the Government of Quebec is quite free to structure itself as it wants, to create regional county municipalities, which have already existed for many years under the federal system, to set up its own decentralization plan, to plan as it wants? The federal government has absolutely nothing to do with these internal decisions of a province.

Does he not admit either that almost all government subsidies were or will be abolished for budgetary reasons and because we recognize that these subsidies are ineffective?

Once again, I am amazed that his speech dealt only with the administrative structure and that he did not even mention business; his speech was almost a Marxist treatise. His approach contrasts sharply with what the Minister of Industry said here earlier this week, when he said that the Canadian government recognizes that it is up to the private sector and not the government to create jobs. What the government can do, however, is to make the climate favorable for job creation by business.

I think that the member has absolutely no idea that it is business which creates jobs and not all the wonderful structures which he would like to set up.

Department Of Industry ActGovernment Orders

4:15 p.m.


Gaston Leroux Bloc Richmond—Wolfe, QC

Madam Speaker, I think that the hon. member was more interested in making comments than in asking a question.

At the beginning of his speech, the hon. member himself said that this was a housekeeping bill. This piece of legislation sets out the directions given by the minister with regard to the power to take action. I referred to the bill, to the powers the minister gives himself by addressing regional development directly without going through the National Assembly, by allowing himself to negotiate and deal directly with Quebec structures, including municipalities which come under provincial jurisdiction.

The basic question in this case is clearly one of jurisdiction; the bill determines federal jurisdiction over regional development. The hon. member knows full well that according to all analyses of the federal government's regional development initiatives in Quebec, results are quite negative compared to all regional development.

When Quebecers talk about business, they mean small business. The hon. member knows full well that Quebec's strategic plans also include everything that goes with it, all the structures needed to finance small business. He knows very well that Minister Paillé's latest program is a vigorous small-business support program aimed at helping Quebec entrepreneurs start their own businesses and create jobs, since we know that small businesses do create jobs.

Although the hon. member is well aware of that, he tried to insinuate that we were all talk and no action-since it took him a long time to put his questions, allow me, Madam Speaker, to respond to all the matters he raised. In my opinion, he merely showed that Quebec's regional development program is currently ahead of anything that the Department of Industry may suggest in this area.

I want to add that when talking about this-as the hon. member pointed out-we should try to define the real needs instead of raising existential questions. Is the hon. member willing to admit that to do so, we must start by asking those involved to define their real needs? Regional county municipalities, regional development councils and a regional development secretariat were put in place to define the real problems and needs of the regions, instead of commissioning Price Waterhouse to conduct various studies here and there.

Local people are defining their own needs. They developed strategic plans, and I remind the hon. member that the government itself has just produced a series of reports evaluating Quebec's regions when Quebec issued such reports just last year. This duplication of regional analysis is a waste of energy and public funds.

Quebec is capable of developing itself.

Department Of Industry ActGovernment Orders

4:20 p.m.


Werner Schmidt Reform Okanagan Centre, BC

Madam Speaker, it is my pleasure to participate in the debate. I did not reckon to stand to debate this bill. I want to recognize the chairman of the Standing Committee on Industry with whom it was a pleasure to work during the last number of months. I look forward to continued work with him. There are times when we need to recognize good work that is being done.

We also want to recognize that this bill is probably one of the most significant pieces of legislation that has appeared before the House.

It has been interesting to watch the progress of the bill. I am pleased to acknowledge and to recognize that Reform was able to achieve certain amendments in committee. This shows there is a role for the opposition even though we do not have as much influence as we would like to have. However sometimes good sense does prevail and even the government side recognizes common sense.

It has been a pleasure to address the House on several occasions on different parts of this bill. To date, I have spoken more specifically to its particular aspects. This afternoon, I wish to look at certain other aspects. For example, I have spoken in the past about the need to curb the power of the minister to dispense public funds with impugnity, to intervene in the economy and to pick winners and losers.

I have spoken of the need to eliminate regional development as an economic tool of not only this minister and his department but of the government as a whole. I have spoken of the need to curb the powers of centralized economic planning that the bill imparts to the minister and to the cabinet. I have spoken about the disappointment, and even to this day, the lack of efficiencies realized in the amalgamation of the four departments that came together last year to form this new industry department.

I have spoken of the lack of vision that the bill represents because in reality it is nothing more than a rubber stamp of Tory policy set by Prime Minister Campbell last year.

I have spoken about the confusion created by having responsibility of aboriginal economic matters in this department and not in the Department of Indian Affairs and Northern Development.

I have spoken about the need to provide for interface between departments, for example with Heritage Canada and the Department of Communications.

I have spoken about the confusion over technical and spectromanagement and who is really in charge. I have spoken about Heritage Canada and neighbouring rights and the questions of overlap and jurisdiction.

I have spoken about this and more in the time I have had, only to scratch the surface. Today we will look at some of the fundamentals, the principles and the challenges that are involved with this department and the future that it faces.

Where are we now? Bill C-46 puts into effect the machinery for the new Department of Industry. In my opinion this is the most important department in government. Why? Because in effect it constitutes the engine that will bring about the economic growth and development of our country.

By that I mean it is the department that is directly responsible for shaping the way businesses, both large and small, function in our economy. The department is responsible for science and technology. It is responsible for directing research and development. It is responsible for shaping a good chunk of the regulatory field under which business operates. It is, in conjunction with the Department of Finance, responsible for establishing the banking environment, both public and private.

In short the department influences most of the important economic levers in Canada and for that reason I call it the most important department in government. It allows Canadians to achieve their most fundamental goals, that is the acquisition of food, shelter and clothing. It helps to structure the economy so that we can work to provide ourselves with these things.

Under the new law this department is both powerful and weak. It is powerful because the authority granted to the minister under the bill allows that minister the opportunity to intervene directly in the marketplace through various instruments and actually have the power to pick winners and losers.

It is powerful because of the financial consequences of some of its actions. It is powerful because of its control over small business through the various programs that are geared to that sector.

Yet under the bill the department is also a weak one. For example, the department has a very poor record of success when it comes to its more famous interventions on behalf of certain businesses and sectors, Canada's well known corporate welfare recipients such as Bombardier, de Havilland, SNC, MIL Davie, and others.

The department is weak because it has not been successful in achieving its goal of revitalizing regional economies through its regional development programs. It is weak because of the inefficient path it sets for science and technology investment. It is also weak because it has great difficulty resisting the urge to micromanage Canada's economy on a sector by sector basis.

It is also confusing in the number of responsibilities the department carries. May I just give a brief list of what some of those are. It is not a complete list.

Based on this bill and what is in the main estimates, this department is responsible for a variety of quasi and independent agencies and tribunals which include the following: the office of the federal chief negotiator, internal trade negotiations; the office of the chief scientist; the Canadian aboriginal economic development program; Canadian Workplace Automation Research Centre; the Defence industry productivity program; the Canada scholarships program; the Information Highway Advisory Council; the National Advisory Board on Science and Technology; the Industrial research assistance program; the remnants of Investment Canada; the Canadian Network for the Advancement of Research Industry and Education, commonly known as CANARIE; the Natural Sciences and Engineering Research Council; the Federal Office of the Regional Development-Quebec, which requires an order in council to pass these responsibilities to yet another minister, the Minister of Finance; regional development in northern Ontario under FEDNOR; the network of centres of excellence, the National Research Council; the Social Sciences and Humanities Research Council; the Standards Council of Canada; the Canadian Space Agency; the Communications Research Centre; Statistics Canada; Emergency Preparedness Canada; the Bureau of Competition; the Copyright Board of Canada; and more. It is pretty clear from this admittedly incomplete list that the minister has a wide range of responsibilities which makes it difficult for the department to develop and keep a clear focus.

What is the bottom line? The bottom line is a challenge to create a Department of Industry for the end of the nineties and into the next century that is efficient; that makes the right decisions for the economy when needed; that is administratively sound; that is co-ordinated properly and carefully with a concerted focus on providing the best service for the least cost as its private sector clients are required to do; and most important and above all, that is fiscally responsible and uses available dollars in a way that produces maximum possible return for the taxpayer while exposing that same taxpayer to the minimum possible risk.

This fiscal emphasis must recognize the fundamental tenet that the marketplace is the best equipped to do something and to help business operate. The marketplace should be allowed to proceed without undue interference from government.

In short, the role of government should be to set the department in such a position that its mandate is to establish and maintain a culture which rewards entrepreneurship, innovation and research, and that it ensures a level, competitive and honest marketplace. That is the way in which the department should be organized.

Where do we go from here? In terms of small business we should recognize that it is probably the single most important sector in the Canadian economy. Why? It is because it creates the lion's share of new jobs in the country. We all know that when people are working, the country and taxpayers benefit most.

The government's approach to small business should be based on sound fundamental principles. The government's own recently published paper by its small business working committee stated a set of principles for growing small businesses. It said that the government should have the following priorities.

The government should be removed from the market to let it function freely rather than seek to influence or distort it. The government should restrict its own activities to fulfilling gaps not currently served by the private sector. It should do so on a temporary basis until the private sector can take over. It should redesign the taxation system as a vehicle for economic development rather than its current narrow role as a generator of tax revenues. It should focus on helping small businesses access the information and intelligence they require. These are four very significant foundation setting principles given to the government by one of its own committees.

I have spoken before in the House about the report of the Standing Committee on Industry entitled "Taking Care of Small Business" in which the government could find much in the way of directing its activities to actually influence our economy to reach the goals that need to be reached.

I focus now on the other sector of business, large business. Government can rely on the same principle enunciated just a moment ago. I would encourage government to refrain from undue interference through grants, contributions, subsidies and bail outs of large and small businesses.

It may seem harsh to some on the government benches, but if the free market decides that a company should fail as a result of its own activities then the government has no business intervening to save it. It is just that simple.

We have too many examples of corporate welfare in Canada which highlight how wrong a policy of intervention can be. Certain names in the corporate community are synonymous with government largesse. For this past taxation year alone, based on the public accounts, we are reminded of how extensive the problem is. I want to give some examples.

Bombardier received from the federal government a little over $21 million; SNC Lavalin received over $1 million; Boeing received $3.7 million; Litton Systems, over $4 million; Pratt & Whitney, $36 million; Canadian Marconi, $10,750,000; Apotex Pharmaceuticals, $3.3 million; and de Havilland, $81,350,000. That is just a short list; the list goes on for pages. It is the tip of the iceberg and is only for last year.

It is easy to understand why companies would take advantage of government largesse. They would be crazy not to do so. If we are dumb enough to give it to them, they are smart enough to pick it up. The point is that government should not offer it in the first place.

Big business also must reverse its attitude that government's role is to pay to ensure its survival and must stop reinforcing that notion. A good product or service, a sound knowledge of the marketplace and an efficient business plan will ensure survival and jobs on a permanent or long term basis without an expenditure or burden on the taxpayer. Let the marketplace decide.

I focus now on the area of science and technology which requires a very significant and comprehensive overhaul. The Auditor General cited in his report this year how poorly the government had done with respect to spending $7 billion. He made several useful recommendations in this area.

He said that priorities needed to be established, including what is the need, what is the opportunity and what is the potential payback. This will require co-operation among all stakeholders. Overall performance must be monitored, according to the Auditor General, to measure success and provide a framework with indicators for that performance. When that is established the program can go ahead with some success.

Then he went on to say that our science and technology strategy should be appropriate, should be balanced and should be workable. He then said that parliamentarians-that is those of us in the House of Commons-have no basis under the present arrangement on which to assess whether the government's expenditures on science and technology reflect Canadian needs and opportunities and to hold the government accountable for results. Implementing his recommendations as soon as possible should therefore be a critical priority for the government.

These are some of the items that need to be looked at in terms of getting the department to work at the cutting edge of economic development in the next century.

Some members of the government respect and appreciate these approaches. The minister's parliamentary secretary, for example, is forward thinking in many ways. He is the leading proponent of some very positive changes in Canada's taxation system. His flat tax proposals have generated much interest with academics and economists alike. Many of my colleagues including myself on this side of the House find his ideas intriguing and worthy of considerable study with likely implementation. We hope he can convince his colleagues that it is the proper way to go.

In addition, there are two ministers for whom I have a lot of respect: the ministers of industry and finance. They both seem to have a good grasp of what needs to be done and what the direction should be for the future. I believe their personal philosophies tell them we cannot continue with business as usual. We require some radical shifts in our fundamentals. Unfortunately the two ministers appear to be having some difficulty with their cabinet colleagues, some of whom are still pursuing the thinking of the past that put us into the mess we are in today. This is reflected in the strategies released by them.

What is the government attempting to do now? I would like briefly to look at this point on a couple of fronts. First is the orange book that was delivered on Monday morning. The minister released the government's new industrial strategy in an orange coloured book. The report was praised by the Globe and Mail and others for its sound forward thinking principles. However many business groups have said that it is short on detail. The content seems to be based on the old thinking that we know does not work any more.

An example is the government's proposed increase in the ceiling for the loans it guarantees under the Small Businesses Loans Act. It is well known that some of the banks are using this program to grant loans to businesses that would otherwise qualify. That is not the purpose of the act.

If the free market were allowed to operate and prevail, as I have suggested, there would be no need for such a program. Businesses that were sound would be considered a secure risk by the banks and receive their loans. Those that were not would not get a loan and would not require the subsidy. This is as it should be. The government should not be encouraging the banks to lend by assuming most of the risk on the taxpayer's back rather than the operation of the market forces.

Banks in Canada show a profit of over $4 billion, referring to the big chartered banks, for this year. They should be accountable for the risks they make and not depend on the taxpayer to underwrite their small business loans.

Moreover the orange book fails to address the most pressing problem identified time and time again by businesses, that is the business of overbearing taxes. We are overburdened with taxes and that is true of business. The way to address the tax burden problem is to reduce spending which in turn will allow us to curtail the deficit, begin to deal with the debt and in turn reduce onerous tax levels, interest rates and the cost of doing business. That creates jobs.

If the government really wanted to lay out a comprehensive, coherent, industrial strategy for the coming century, it would focus its energy on creating a climate for entrepreneurship. It would create an environment in which the free market could work and would stay out of it to the greatest degree possible.

Some positives in the orange book include the government's commitment to reduce the paper burden, that is to get businesses off the government payroll and back working for themselves as they should be. The paper also recommends expanding our foreign trade horizons, a natural for building more business.

Now I come to the restructuring which was also a positive part of that book. The minister has indicated in the House that his department faces up to a 50 per cent reduction in its overall budget inside of the next two years. I wish him much success in his endeavour and will help in whatever way I can.

Coming back to the Auditor General, I have a few more words about what he said. The government spends $7 billion each year on science and technology research, $6 billion directly and $1 billion in tax credits. The Auditor General concluded that there was a lack of overall government-wide leadership, direction and focus on results and accountability for implementing desired changes. It is gone; it is not there. Then comes his most shattering statement. He said that Industry Canada, the department, was not well positioned to provide effective leadership among departments with science and technology responsibilities. That is the Auditor General's conclusion. I fail to see in this reorganization how that will be resolved.

The science and technology consultations that were conducted under the Department of Industry produced nothing but the regurgitation of the same problems identified 30 years ago. The orange book industrial strategy shifts the money around and increases the government's liability in favour of the banks. The reorganization was dreamed up by Kim Campbell and others. It

does nothing to deal with the problems identified by the Auditor General.

In conclusion, I return to the principles enunciated earlier. We know the foundation needs to be an efficient, administratively sound and fiscally responsible department that encourages a sound environment so that business can build and support itself. Our science and technology policy must have an eye to the needs and opportunity for potential advancement.

I encourage the minister to move ahead with aggression, courage and success as he reduces his department, as he makes it fiscally responsible, and as he gives it the direction to meet the needs of business and the needs in terms of science and research so we will become the economic leader in North America that we could be. We have tremendous talent in our people. We have tremendous resources. This department could marshal the resources and bring it together so that all of us benefit. I wish him good luck and Godspeed.

Department Of Industry ActGovernment Orders

4:45 p.m.


Jean Landry Bloc Lotbinière, QC

Madam Speaker, as the assistant to the Official Opposition critic on regional development, I am pleased to address Bill C-46.

Back on September 26, I had the opportunity to express my strong disagreement with this piece of legislation, since it does not recognize Quebec's jurisdiction over its regional development. That bill was unacceptable in its original form. Yet, this House rejected the amendments to clauses 8, 9 and 10 proposed by the opposition critic on regional development. These amendments read as follows:

That Bill C-46 be amended by replacing, in Clause 8, line 23, in Clause 9, line 22, and in Clause 10, line 36, with the following:

with the approval of the Lieutenant Governor in Council of Quebec where such powers, duties and functions relate to regional development in Quebec-

We simply asked that Quebec have control over its regional development. Who, if not Quebec, is in the best position to develop policies in that sector? Certainly not the federal Minister of Industry, although he could, through this legislation, have the authority to set up such policies and exercise control over Quebec's regional development.

The previous government wanted to streamline federal bureaucracy with this bill. The current government admits to looking for ways to eliminate duplication and overlap. Is it just paying lip service to the idea? It looks like it, since Bill C-46 would allow the federal government to intervene at will in Quebec.

This government is ignoring, or pretending to ignore, the efficient regional development programs which have been in place for a long time in Quebec. Incidentally, the new Quebec government has developed a dynamic regional development policy which will be implemented by the stakeholders and which takes into account the fact that trade liberalization eliminates trade barriers and exposes regional economies to stiff competition.

The Quebec government devised a new sharing of responsibility between itself and the regions, including the Quebec union of municipalities, as well as the Quebec union of regional county municipalities and local municipalities. As we have already explained to this House, RCMs will become decision-making centres for Quebec's socio-economic development. These RCMs will be designated as independent and multi-purpose political authorities.

Municipal councils will have to rely more on participation. Under the authority of the RCM's board, sectoral commissions will be delegated various powers, depending on the sector concerned. Regional delegates were appointed to provide direct liaison between the regions and the Premier.

The Quebec government also developed a sectoral development policy which puts the emphasis on the agri-food, fisheries, forestry, energy, recreation and tourism sectors. But what about the federal government? Has it demonstrated an ability to develop programs which take into account already existing provincial and regional policies? The answer is no, Madam Speaker.

No, because the federal government has never been able to reach a consensus where regional development is concerned. No, because the priorities of the Liberal government differ from those of the provinces and the regions. Let us decentralize the funding and the decision-making authority! Then, the regions would be able to develop according to their own priorities.

With this bill, the federal government is trying to control the economic development of Quebec. The government party is digging in its heels and the results are duplication and overlap.

People do not seem to understand the situation; either we have not been able to explain it to members opposite well enough or they are not listening. We all remember the three little monkeys: see no evil, hear no evil, speak no evil. The government is following the advice of the first two monkeys too closely; it should pay more attention to the third one. Several commissions have clearly stated in their reports that the federal government is impeding our regional development.

In its report, the interdepartmental working group on regional development, set up by the Quebec government in 1991, when the Liberals were in office, I might add, examined the issue of the proliferation of regional development initiatives.

The working group came to a very clear conclusion: confusion, duplication and overlap.

Confusion in terms of regional divisions: the federally defined regions do not match Quebec's administrative regions. Frequent confusion concerning regional officers, since there are too many government officers.

Duplication of structures: regional advisory bodies, economic development organizations, creation of program management committees to reconcile all the various types of initiatives.

Duplication that leads to operating costs that are high compared to the amount of money actually spent on development.

The Bélanger-Campeau Commission, also established by Quebec's former Liberal government, draws conclusions that are equally clear. If Quebec assumed responsibility for existing federal programs without any reduction in services, there would be annual savings of $289 million in spending related to the collection of customs duties and taxes, $250 million in manpower and $233 million in transportation and communication costs.

A study indicates that 67 per cent of federal programs overlap provincial programs to some extent. This study, conducted by Germain Julien and Marcel Proulx, tells us that overlap accounts for 65 per cent of government spending, excluding the public debt and unemployment insurance. This represents $67.5 billion and 45 per cent of personnel or 114,000 full-time employees for 1991 and 1992.

What is the origin of this overlap? Seventy-six per cent is attributable to the authority to legislate in shared areas and 24 per cent to federal spending power in areas under provincial jurisdiction.

We know all too well the consequences of these overlapping programs: increased cost of government action when it would be more economical to give one government exclusive responsibility for services provided at both levels.

Redundancy in programs: irrational use of personnel and equipment by both levels for similar activities.

The exorbitant cost of co-ordination: officials meet hundreds of times a year to check whether they are offering the same services, to harmonize program objectives and to ensure they are compatible.

Reduced effectiveness of government measures: how many times have we seen measures that are put in place by two levels of government cancel each other out for lack of consensus on objectives and priorities. Of course, no one wants to make concessions.

An additional burden on the target population, which has trouble finding its way through the labyrinth of government programs, especially when there is duplication.

Turf wars that make governments act irresponsibly. And who pays for all this? The taxpayer.

In spite of these factors, the Liberal government insists on passing legislation like Bill C-46 which dismisses out of hand Quebec's policies on regional development. The government says that it wants to eliminate duplication and overlap and then introduces a bill in which it maintains its hold on regional development.

Unlike Quebec, the federal government does not consult but implements policies from coast to coast. Consider the changes made within the Federal Office of Regional Development-Quebec. The new focus targets four areas: exports, new technologies, entrepreneurship and catalyst projects. According to the government, that is what the directors of SMEs want.

However, every region has to identify its own priorities. In our region for instance, these include tourism and culture. It will not be easy to get approval for these projects, since proposals for a cultural centre in my own riding have just been turned down. The federal government refuses to consider the specific needs of each region. We have developed instruments, including the CRD, the Conseil régional de développement, to promote regional priorities. The government could have consulted to harmonize its actions.

All this duplication and overlap is very costly. Why should we believe today that the Department of Industry will be able to reduce waste? When reading Bill C-46, I see, like everybody else in this chamber, that it maintains the status quo-an expression dear to the Prime Minister-between the mandates and the grouped departments.

Quebec's demand for exclusive jurisdiction over regional development is nothing new. Since the Quiet Revolution, it has been constantly restated. These are not whims, contrary to what the Prime Minister said. Since then, Quebec has had governments of every political stripe, but its demands have remained the same. Federal interference is still ubiquitous, and the regions are no better off as a result.

Let us recall why the Department of Regional Industrial Expansion disappeared in 1987: the regions were not involved in the funding request development and review process. The money that could have been used to fund excellent projects was instead given to useless ones. Industrial development was favoured at the expense of regional development. Since then, we have been living the same nightmare. If the federal government believes its general agreements have improved the situation, it is quite wrong. There may be no complaint from western Canada and the Maritimes which received $630 million and $1.2 billion respectively, whereas Quebec received $165 million. Is this fair? Regions can and must do more than simply supply domestic and foreign markets with raw materials.

It is the processing industries which create jobs and develop local resources. If we do not look after them, regions become more and more dependent. The federal government refuses to acknowledge that its approach to regional development are wrong. Yet, studies clearly show that the economic base is eroding, the social fabric is unravelling, the depopulation of rural areas is continuing, and young people are moving out of the regions.

All Ottawa is doing is regionalizing its operations by setting up regional structures. It might increase visibility, but it certainly does not improve efficiency. As we already said, federal interference causes duplication and inconsistency. The result is an administrative mess which slows down economic development in the regions and makes them the big losers.

The federal government's scope is so broad that it cannot correctly target the particular needs of a given region. As far as we can tell, FORD-Q is not free to make its action fit any total vision of local development.

It would be so simple for the government to promise to accept the priorities set by the regions, in order to maximize the impact of measures initiated by regional leaders in Quebec. Going along with the priorities set by the regions is one thing, having a third party role in the financing of regional development projects is another.

On this point, the rise in administrative costs and the squabbles with the provinces should convince the federal government that duplication between the two levels of government is damaging. This is why we insist so much on the need to decentralize budgets and decision-making. The future of the regions lies in the decentralization of power towards regional decision centres.

The government is not proposing anything to redress the imbalance in funding. While federal regional development funding has increased 50 per cent in Quebec since 1983, it jumped 300 per cent in the West and 250 per cent in the Maritimes.

Based on figures from the Federal Office for Regional Development-Quebec itself, the federal input in regional development is inequitable. Quebec's per capita share is $230, compared to $240 in Western Canada and $920 in Atlantic Canada.

Master agreements were mentioned earlier. The per capita results are catastrophic for Quebec in that regard as well, with $64 spent in Quebec in 1987, compared to $431 in Atlantic Canada and $259 in Western Canada.

The government could restore equity by cutting expenditures, as the Auditor General said, by eliminating tax breaks such as family trusts and the waste from duplication and overlap caused mostly by infringing on provincial jurisdictions, as mentioned earlier.

What would these billions of dollars be used for, Madam Speaker? This money could be used to restore equity in the amounts received by Quebec from the federal government for regional development. Quebec does not want its regional development to be built only on an industrial vision dictated by the Department of Industry in Ottawa.

Quebec has had its fill of inconsistent federal initiatives and policies. Why is it that the Quebec government has realized that the regional stakeholders are the only ones who grasp the real needs of their respective regions and the people across the way have not?

This bill is far from putting to rest the concerns that regional development organizations and all stakeholders have. The government must change course. We want Quebec to have exclusive control over the development of its regions.

We want to repatriate, in the form of tax points, the budget allocated to local development. We want decision-making and spending powers to be decentralized to the regions. This is a must for the economic development of Quebec. It is also a major component of our people's plans for sovereignty.

Department Of Industry ActGovernment Orders

5 p.m.

The Acting Speaker (Mrs. Maheu)

It is my duty, pursuant to Standing Order 38, to inform the House that the questions to be raised tonight at the time of adjournment are as follows: the hon. member for London-Middlesex-Refugees; the hon. member for Mackenzie-Canadian Wheat Board; the hon. member for Berthier-Montcalm-Bovine somatotropin.

Department Of Industry ActGovernment Orders

5 p.m.


Pierrette Ringuette-Maltais Liberal Madawaska—Victoria, NB

Madam Speaker, I listened with great interest to the speech delivered by the Bloc member for Lotbinière, which was full of statistics-my congratulations to your researchers.

I find it very hard to understand logically how one can make such a wide-ranging speech in the House while demonstrating to this House that there is a lack of logic in Quebec on the subject of duplication.

The regional county municipalities that were created in Quebec in the last decade add another level of government, thus increasing administration and other costs and generating inefficiency. They then tell us that duplication must be reduced.

On the other hand, I agree that in the last nine years, the hon. member may have felt that the previous government did not look favourably on Quebec's demands.

Naturally, since our government's first year in power, we put in place a process to eliminate duplication. We said that before asking, or requiring each province to put its house in order, the federal government would start by putting its own house in order, thus eliminating duplication in all the various departments. The process is well under way. Public consultations on industry, finance and social programs were held at all levels before we started putting our house in order.

I also find it a pity that the member for Lotbinière does not admit that maybe Quebec should eliminate duplication among levels of government which may not meet the needs of small communities. We know that normally, the larger communities in a group or collection steer the ship.

The member also raised a very interesting point, that the federal government should withdraw from provincial jurisdiction, and he mentioned forestry, for example. Today, there is a very interesting article in which the president of the Quebec farmers' union, the UPA, demands that the federal government not withdraw from programs that subsidize agriculture in Quebec.

So are people talking to each other in Quebec? Are you members from Quebec listening to what your constituents are asking for, like continued federal participation in programs?

Considering the various federal programs which assist development in Quebec, I think that the member's speech should seriously be revised because it is quite illogical.

Something else you mentioned-

Department Of Industry ActGovernment Orders

5:05 p.m.


Jean Landry Bloc Lotbinière, QC

Ask the question.

Department Of Industry ActGovernment Orders

5:05 p.m.


Pierrette Ringuette-Maltais Liberal Madawaska—Victoria, NB

You will have your question. You had your speech, so I will ask my question.

He said that processing industries are a priority for the regions. I agree, but if the primary industry for developing natural resources in these regions is not a priority in the first place, how can you develop a manufacturing industry in that field?

So the question is this: How can the member, in concluding his speech, ask for a transfer of tax points, when yesterday he wanted to withdraw completely from this beautiful country?

Department Of Industry ActGovernment Orders

5:05 p.m.


Jean Landry Bloc Lotbinière, QC

Madam Speaker, how much time do I have left to answer? I would like to know before answering-

Department Of Industry ActGovernment Orders

5:05 p.m.

The Acting Speaker (Mrs. Maheu)

You have five minutes left.

Department Of Industry ActGovernment Orders

5:05 p.m.


Jean Landry Bloc Lotbinière, QC

Thank you.

I am very pleased to give an answer to the hon. member. First, I want to thank her for confirming that my figures are accurate. I might add that she could not have said that they were not. In any case, I am very pleased because it confirms that we are telling the truth.

I could mention other examples, other incidents which have occurred in the context of the federal government versus Quebec or the United States. I agree that we have a free trade arrangement, but still. Earlier, I referred to the Federal Office of Regional Development. Where did it invest in industry? It invested many hundreds of thousands of dollars. Some people asked me not to raise this issue. The office invested hundreds of thousands of dollars in a given Quebec industry, yet the federal government simply turns around and, for a comparable or similar price, buys in the United States.

I can tell you about this issue because I was involved in it. I said: Wait a minute; did this industry have an opportunity to bid? We are talking about a Quebec industry from my region, in which the federal government invested-listen to this-hundreds of thousands of dollars for research and development. If the federal government does not buy in Quebec but buys elsewhere in Canada, I say fine.

These are examples of duplication and mismanagement. I am telling you about what I know to be true, about what is really going on. The figures I mentioned are the actual figures.

I want to say something further about the industrial situation. In my riding, we have what is called BDCs, business development centres, which can also be found, I am sure, in other ridings as well. With $5,000, I can create a job. And if some people can deny this, I will listen to what they have to say, but I know that with $5,000, I can create one job. At the federal level, the infrastructure program needs $100,000 to create just one job. Did you hear that? With $5,000, I can create one job, but the federal government needs $100,000 in its infrastructure program to create just one job. This is quite a difference. In fact, it is a $95,000 difference to create just one job, since we go from $5,000 to $100,000. I thought I would just mention these figures.

Madam Speaker, you are indicating that I have two minutes left. I will take what time I have left to stress how important Bill C-46 is.

I do not want people to think that I criticize all the time. That is not my role. My role is to make suggestions, to ensure that there is some openness, but you, on the other side of the House, also need to show that you are open-minded. That is how we will be able to harmonize some of the various programs and initiatives.

The hon. member said earlier that I was very good at quoting statistics and that she could not deny these figures. I know she cannot deny them, I am not crazy!

Do you understand what we want? The hon. member recognized earlier that for the last nine years the situation has not been fair. I said so myself earlier. I always come back to the same example: it is important for a father with three or four children to treat them all equally. By treating his children fairly and equally, he avoids creating any type of quarrel.

I used some figures earlier. I understand what Quebec wants. I have seen other industries in Western Canada receiving millions of dollars in subsidies to gain access to Quebec's market, while Quebec's own industries were not receiving one penny for exactly the same products.

Madam Speaker, on the issue of fairness, let me give some advice: Render unto God what is God's and unto Caesar what is Caesar's, and everybody will be happy.

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5:10 p.m.


Ed Harper Reform Simcoe Centre, ON

Madam Speaker, it is my honour to rise in this House today and speak to the third reading of Bill C-46, an act to establish the Department of Industry.

Given that this act gives the Minister of Industry powers relating to trade and commerce in Canada, consumer affairs, competition, and restraint of trade, it seems only appropriate to discuss a very major impediment to growth in the economy, the interprovincial trade barriers. This act gives jurisdiction to the industry minister to deal with the very serious situation that exists in trade between our provinces.

When Canada was created out of four British colonies in 1867, the founding Fathers of Confederation had one purpose in mind. They believed that if they united they could resist being pulled into the American sphere of influence and would retain their distinct cultural heritage.

There were two strategies to implement this which they saw as essential to resisting American pressures. The first was a unified military which could better defend the borders of Canada and which did so. The second was free trade between the provinces. It was believed that the free flow of goods and services would strengthen economic, political and cultural ties east to west instead of north to south. It is quite obvious in which strategy we failed to accomplish our objectives.

The fact is that trade in many goods between Canada and the U.S. today is freer and easier than the trade between provinces. For generations we have allowed the inefficiencies of small, protected regional markets in many goods and services to constrict the economy, hurt our political and cultural objectives and cost us jobs.

The United States is a good example of a country where wide open commerce between jurisdictions, negotiated and enforced by a national government has led to greater prosperity for the whole nation.

We are a trading nation and we have spent great energy concentrating on our external trading relationships which account for 25 per cent of our economy. The Americans count on exports for about 8 per cent of their economy yet they are a more prosperous nation. There is certainly a lesson for Canada in this. We must become much more focused on reducing barriers when it comes to domestic trade.

The Minister of Industry and the Prime Minister recently sat down with provincial counterparts to discuss eliminating some barriers. Unfortunately very little was agreed to and the status quo of small, inefficient and protected industries continues to reign.

A renewed effort is needed and if some parties are resistant to the movement the federal government should consider using some of its powers to force agreements into place. As the Prime Minister stated during the first ministers conference, thousands of new jobs will be created and this will benefit all Canadians regardless of region.

There is over $146 billion worth of trade happening between the provinces. There are also over 300 barriers to interprovincial trade in Canada and each one costs jobs, money, growth, and competitiveness. This has hurt the province of Ontario and indeed all Canadians directly. These barriers are a problem that can be solved. Even small improvements in reducing barriers can mean big gains for the country. It is time for us to get serious about dealing with them.

I am going to examine a few examples of barriers that exist to internal trade in Canada and the effect they have on Ontario and the country as a whole. The first barrier that comes to mind is one that has a large effect on employment in my riding.

There is a modern brewery in Simcoe Centre that employs hundreds of Canadians. Over the years this brewery could have employed more people, expanded its operations and become efficient enough to compete with major American brewers. This did not happen because its market has been restricted by trade walls enforced by provinces in an attempt to protect their local brewers. The protectionism that insulated and sustained these inefficient brewers for so long could now be the death of many of them.

International trade pressures are forcing small breweries out of business. Brewing is a $9.6 billion retail industry in Canada so even small reductions in production costs due to greater economies of scale will produce better prices for consumers in a much more competitive economy.

American brewers are gaining more and more access to our domestic beer market through the GATT, NAFTA and the free trade agreement. They will force out those who cannot compete. For example, a single brewery in Colorado Springs, Colorado produces all the beer under a particular label for the entire United States, a market of some 250 million people. How can we expect breweries that produce only enough product for a few million consumers to compete? It is extremely difficult to compete with that economy of scale.

Another barrier that may be less obvious to my constituents but affects them directly is the variation in provincial trucking regulations. Since each province has different size, weight, and licensing requirements there is a lowest common denominator that takes effect in interprovincial trucking. Truckers take a load that is the smaller and lighter of the two provinces' requirements and therefore a more expensive load. This ultimately hurts consumers who will have to pay more for the same products.

I believe that all Canadians wish to see this type of waste done away with and receive the most efficient and economic value possible for their hard-earned wages.

A barrier of major importance that must be dealt with quickly is the barrier each province erects when conducting its own government procurement. The provinces have a long history of purchasing from within their own borders regardless of cost. This raises the cost of purchasing, raising government expenditure and raising taxes. It also costs jobs in other provinces because the most efficient producers cannot sell outside their own provinces.

Some jobs may be protected locally but just like the brewing industry, these local producers are insulated and inefficient. The higher taxes affect all Canadians and cost in total more jobs than protecting the local industry will save. This hurts Ontario as it hurts all Canadians.

The industry minister attempted to achieve a deal on this important subject over the summer but due to the short-sightedness of some provinces, the agreement ended up being window dressing only. It is important that he make it a high priority to get the provinces back to the table and remove these barriers to competitiveness.

Interprovincial barriers to trade and financial services creates once again a higher cost to consumers, costs financial institutions their competitive position and costs Canadians jobs. It also affects another major employer in my riding which finds restrictions on selling its services outside Ontario.

Trust companies for example find barriers to trade in the different regulations that each province sets up. Much like the trucking industry a lowest common denominator approach must be taken to selling services in more than one market thereby increasing costs. A standard set of regulations for all provinces would eliminate administrative overhead, produce more competitiveness, lower costs for consumers and again ultimately create more jobs.

A further barrier to trade is the restriction placed on various types of labour mobility between provinces. This is of particular concern to an area such as Ottawa-Hull which straddles a provincial boundary but still affects people in my riding and indeed all Canadians.

Many of us are familiar with the dispute that erupted earlier this year between Ontario and Quebec on the issue of construction jobs. This was one of many barriers that prevented professionals and labourers from offering their services across Canada. This means competition is reduced and will result in higher costs in taxes for consumers.

Fortunately, Ontario and Quebec managed to resolve their differences on this single issue to the benefit of both. However this is the exception rather than the rule. It is time for us to sit down at the bargaining table and eliminate the many other barriers that are still in place.

It is important to reflect on the statements that have come from this government on the recent GATT agreement. The finance minister estimated that the economy would grow .4 per cent as a result of the implementation of this freer trade agreement. Estimates by the Fraser Institute on the effect of removing interprovincial trade barriers range from 2 to 6 per cent.

In other words, with GATT we spent seven years and millions of tax dollars to negotiate with 120 foreign countries an agreement to open up trading, yet we have an opportunity to realize five to fifteen times the economic benefit by negotiating among only ten provinces. Unfortunately this government has only given a very half-hearted effort to this point.

The bottom line is that interprovincial trade barriers mean lost jobs for Canada, higher taxes and product cost and a less competitive economy with which to face the world.

It is within the substance of this bill and the industry minister's mandate to reduce and eliminate all barriers to interprovincial trade and make Canada as competitive as it can be. The speed with which this minister takes action on this important issue will indicate to Canadians how serious the Liberals are about their promise of jobs, jobs, jobs.

We have an opportunity here that should not be missed. We can improve the economy. We can create jobs here in Canada and indeed hone our edge to be more competitive in the global market we are competing in today.