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.