Mr. Speaker, this is my first opportunity to congratulate you in your new job. I wish you well. I remember working in caucus with you. I very much appreciate the contribution you made as a member of our caucus and I look forward to working with you in the House.
I am pleased to have the opportunity to speak to the questions raised by the hon. member for Regina Qu'Appelle. Also, I would like to elaborate on the information that was already distributed to all members so that the hon. member can better understand the series of events that led up to this transaction.
Further to a directive from the previous government CDIC acquired 51 per cent of Ginn from Paramount in 1989. In consideration of the book publishing policy then in effect known as the Baie Comeau policy, Paramount, then Gulf & Western Industries Inc., had acquired Ginn as part of a larger takeover of a U.S.-based parent. It was subsequently required to divest a controlling interest in Ginn to Canadians.
Following Paramount's unsuccessful efforts to find a Canadian buyer, the government through CDIC bought a 51 per cent interest in Ginn for $10.3 million. At the same time CDIC was directed to sell its interest to Canadians as soon as practical.
In negotiating the forced divestiture of Paramount the previous government agreed that if its policy respecting indirect acquisitions in the Canadian book publishing industry changed while CDIC continued to hold its interest in Ginn, Paramount would have the right to repurchase the holdings by CDIC at the same price.
Furthermore, while CDIC technically purchased the Ginn holding in 1989, there remained a number of legal and commercial issues to resolve with Paramount before the interest could be offered for sale to Canadians. CDIC succeeded in resolving some but not all those issues.
In the meantime CDIC received inquiries from Canadians interested in purchasing the Ginn holding and a list of potential purchasers was compiled. However, contrary to the statement made by the hon. member, no potential purchaser was turned away. In reality, CDIC was at no time in a position to market its interest in Ginn actively until the resolution of certain outstanding issues, one of which was a complicated distribution arrangement to be settled.
In January 1992, when the former government announced its new book publishing policy, Paramount's legal right to repurchase CDIC's holding in Ginn was triggered. From that time forward CDIC's hands were tied as it was not able to consider a sale to a Canadian purchaser until Paramount declined to exercise its right to repurchase the 51 per cent interest in Ginn.
To have proceeded otherwise could have exposed CDIC and the government to possible legal action. Paramount decided to exercise its right to repurchase the Ginn holding for the original price paid by CDIC of $10.3 million. The government was required to complete a transaction that was set in motion by its predecessors.