Debates of Feb. 24th, 1994

The Budget

[Alex Shepherd, Liberal, Durham, ON]

Mr. Speaker, I would like to speak in favour of the budget as presented by the hon. Minister of Finance.

My hon. colleague has spoken of the five and one plan. Tonight I only want to deal with a two and one plan, that is, two expenditure cuts with one expenditure increase.

First, I would like to discuss the actions the hon. Minister of Finance has taken with regard to the federal civil service. I am sure that our civil service across this country is basically hard working and shares the commitment of the government toward a prosperous Canada. There are those who feel that the continued freeze of $500 million in 1994-95 fiscal period and the further $620 million in the 1995-96 fiscal period is a great hardship.

I would like to point out that this only represents a reduction in the federal civil service payroll of 2.2 per cent.

I know that many of us are all too well aware of reductions much more significant than this by national and international companies based in our own ridings. I would like to refer to a study done by the Canadian Federation of Independent Businesses which undertook an analysis of the 1991 Canada census data.

It discovered in all sectors of employment that the federal civil service had the highest paid workers in all classification for all sectors studied in all urban areas across this country. On average, the federal civil service is paid 13.9 per cent higher than similar classifications of the private sector.

What sort of a message does this send our workers and taxpayers?

I have been unable to find similar parallels in any other country in the world. At a time when we are negotiating international trade agreements such as NAFTA and GATT with the objective of making our private sectors more competitive, we discover that the federal government is over burdened by an inequitable wage system.

I note that the finance minister has attempted to deal with this very serious situation by proposing payroll freezes in the hopes of curtailing layoffs. Having said that, I acknowledge the planned layoffs which are to occur in the military, being well over 17,000 jobs.

Not only is the civil service pay structure out of step with the private sector, many of my constituents inform me of great difficulties in dealing with the personnel of the civil service who often do not return phone calls, often have work hours which are inconsistent with the concept of service. I know that there are many individual conscientious civil servants but it would appear

that there is much that we have to do in improving service in the federal civil service.

I would now like to address the second of my points dealing with the expenditure support of the budget. This is the area of social programs.

The Minister of Human Resources has often stated Canada's social programs were designed for another time and another place. There is a tremendous structural change sweeping our country. This change means that my generation, a generation that thought our career paths were set for life, now finds itself without jobs and uncertain of the future.

We have to reach out to these people and give them hope but also give them the tools to find alternate employment. It is not good enough to talk about retraining and train people for jobs that either do not exist or will not exist in the near future.

The government has to show leadership in planning the training needs of the future. This is why the federal government must retain its discretionary spending power in this area across this nation to set national training standards.

What does this say about our present social welfare system? It says that it is no longer sustainable. It says that we are creating social ghettos in which we subsidize people to do nothing, fostering a loss of self-respect and dignity. We must do better.

Our benefits under the unemployment insurance system in this country are in excess of 20 per cent of the average of the United States and indeed all G-7 countries. I have always believed that money restored energy. It is a human's way of taking work and converting it into a liquid commodity.

For instance, if I pay someone at the front door of this place $25 he or she will use their car and expend natural resources and time to drive me to the train station. To take money and give it to people to have them simply subsist is an insult to human intelligence. We must use unemployment insurance and other forms of transfers to individuals to assist them to rise up and take control of their lives. I am talking about using these funds to send them to learn new skills so that everyone can benefit from the new challenges of an evolving economy.

I now want to talk about the final point in my support of the budget and that deals with the area of small and medium size businesses. Much talk has been made around this place on this issue and much discussion has been made about the relation of these businesses with the banking community.

I would like to draw the attention of the House to the fact that these institutions account for less than 6 per cent of all deposits in this country. As a consequence, castigating this sector, the banking sector, is much like trying to fix a leaky row boat to cross the Great Lakes. It will not do the job even if we do fix it.

I note that the minister has elected to study pension funds and how they can be used to more effectively finance small and medium size businesses. Clearly, this is the right direction.

The minister has also pointed to a number of government initiatives in the budget. These include Canadian investment fund, business network strategies and the establishment of business service centres for one stop shopping for government services. One feature of these initiatives is the electronic highway.

The railway bounded this country in our history, then roads made it easier for people to communicate. Finally, the telephone first operated in Canada so that we could even more effectively deal with each other. Our diversity and the fact that we are spread fairly thin across this great nation turned us into the world's expert in the field of communication.

While we have squabbled about our internal problems, as my colleagues to the left of me continue to do, the real world is passing us by. We need to get on with the fourth stage of our nation building. The ability to link each individual in the country by means of an electronic highway, regardless of language or culture is our challenge.

I am proud to note that the government has provided funding for this worthwhile project, recognizing that it, together with the initiatives for the small and medium sized business sector, will set the agenda for a new tomorrow for all Canadians.

[The Deputy Speaker]

I think the hon. members understand that we will not have five minutes for questions and answers because it is already very late. Is there unanimous consent?

[Some hon. members]

Agreed.

[The Deputy Speaker]

Pursuant to Standing Order 84(4), it is my duty to interrupt the proceedings and put forthwith all questions necessary to dispose of the amendment to the amendment now before the House.

The vote is on the amendment to the amendment. Is it the pleasure of the House to adopt the amendment to the amendment?

[Some hon. members]

Agreed.

[Some hon. members]

No.

[The Deputy Speaker]

All those in favour will please say yea.

[Some hon. members]

Yea.

[The Deputy Speaker]

All those opposed will please say nay.

[Some hon. members]

Nay.

[The Deputy Speaker]

In my opinion the nays have it.

And more than five members having risen:

[The Deputy Speaker]

Pursuant to order made Tuesday, February 22, 1994, a recorded division stands deferred until 6.30 p.m. Tuesday, March 8, 1994.

A motion to adjourn the House under Standing Order 38 deemed to have been moved.

[Jack Ramsay, Reform, Crowfoot, AB]

Mr. Speaker, on Tuesday of this week I rose in the House to ask the Minister of Indian Affairs and Northern Development a question of great importance to me, to my colleagues and particularly to the members of the Slave Lake bands.

The hon. member chose to blatantly ignore the question which showed disrespect to me and to the grand chiefs and chiefs who brought this issue to our attention.

I did not simply ask the question of my own accord. We had contacted members who were present at the meeting between the minister and the Slave Lake bands. I was told that they felt the minister's conduct at the meeting was insulting and shocking. They said his comments, as they pertained to the Reform Party, were indeed racist.

My colleague, the hon. member for Nanaimo-Cowichan, who was upset by the lack of response by the minister to my question, was prompted to pose the same one later in the question period.

The minister, when asked to provide a direct, clear answer, once again avoided the question. He said: "I am sure, Mr. Speaker, that the Reform Party does not hate Indians", but he did not deny or admit saying to a group of aboriginal people that the Reform Party hates Indians and they want to be seen as the defender of the white man. I believe the hon. member has a duty and responsibility as a minister of the crown to answer this question.

I and other members of the Reform Party have established close ties with many First Nations people and leaders over the years. This kind of comment, if made by the minister, amounts to a racist and slanderous attack on members of the Reform Party by a minister of the crown and defames us in the eyes of the aboriginal people and all Canadians. Nothing short of an honest and straightforward answer will suffice in a matter of this importance.

I was present in the House today when the question was posed in almost identical words to the minister for the third time. I also have the "blues" that indicate his answer. Again he does not clearly indicate whether he had made this statement. He only deals with a portion of the statement that has to do with the hate of the Reform Party for Indian people and does not cover the other part of the question, that we want to represent the white man, in effect against the Indian people.

Although it appeared to me that the minister had come a certain way in resolving this issue, it has not been resolved in my mind nor in the minds of my colleagues within the Reform Party.

We have also received a joint affidavit from people who were present at that meeting when this incident occurred. Eight of the leaders have signed a document and sworn before a notary public what actually happened at that meeting. I am prepared to table a copy of that here today.

I feel the minister should resolve this matter so that we can get on with our business and he can get on with the affairs of his ministry.

[Jack Iyerak Anawak, Liberal, Parliamentary Secretary to Minister of Indian Affairs and Northern Development]

Mr. Speaker, as you know this question concerns an alleged comment by the Minister of Indian Affairs and Northern Development that Reform Party members hate Indians. As the member said, it was raised earlier in the House this week. At that time the minister answered the charge, clearly stating that he does not believe he said any such thing.

Again today the minister told members of the House categorically that he does not believe Reform members or any other members of the House for that matter hate Indians. I think it is quite understandable that he would not believe any such thing. The minister took the opportunity to encourage all members to look beyond their partisan interests so that we might all work together in building a new relationship with us, the aboriginal people of Canada.

Aboriginal people have told us that implementing the inherent right to aboriginal self-government should be the cornerstone of this new relationship. To that end the minister has had an opportunity to meet with many leaders across the country, discussing various issues, one of which is the inherent right to self-government.

The member would like the minister to respond to one particular community or meeting that he attended and at that point the minister answered clearly, again restated today that he does not believe any such thing. He said he has checked with

other members who attended the same meeting and they do not remember such a statement being made.

[Simon de Jong, NDP, Regina—Qu'Appelle, SK]

Mr. Speaker, on February 22 I asked the Minister of Canadian Heritage why his government did not follow the requirements of the Investment Canada Act and in fact allowed Paramount to obtain the book publishing company's Maxwell Macmillan and Ginn Publishing.

The act prevents a non-Canadian from acquiring a Canadian controlled book publishing business.

Ginn Publishing was 51 per cent owned by the government through CDIC. In the case of a non-Canadian wishing to sell an existing Canadian business like Maxwell Macmillan the act requires that the vendor must prove that the potential Canadian investors have had a full and thorough opportunity to purchase. In both cases the government simply ignored the act.

In the case of Ginn Publishing the government claims it was obliged to sell its 51 per cent share to Paramount because of a legal obligation.

Canadians would like to see that contract made public in order to determine what that obligation is, who incurred it, when and where. Even if that obligation is there this government has renegotiated commitments made by the past Tory government, i.e. Pearson airport and the helicopter deal.

The Minister of Industry also claimed there was not "a substantial indication of interest".

Let me quote from the Toronto Star of February 22:

One of Canada's top publishers, Canada Publishing Corporation, insists that its repeated expressions of interest in the company were constantly spurned.

The firm's chairman, Ron Besse, says that the government kept promising a prospectus on Ginn but never issued one.

After the Liberals assumed power, Besse sent his lawyers to Ottawa to again explore the possibility of purchasing Ginn. The next day, he received a call from Paramount asking what he wanted.

In other words, it is Paramount that is speaking on behalf of the minister and the government and not the department.

In the case of Maxwell Macmillan this is a direct acquisition and the act requires that Canadians have a full and fair opportunity to bid.

What effort was made to find Canadian buyers? Why was the acquisition of Maxwell Macmillan not reviewed by Investment Canada as part of the larger review that the act requires because Paramount in turn has been bought by Viacom?

The government could have had significant leverage in negotiating with Paramount but again it failed to do so.

This government could have acted to prevent the book publishing business of especially high school and university texts being dominated by American controlled companies. The fact the government did not has sent shock waves through the cultural community.

As Keith Kelly, national director of the Canadian Conference of the Arts stated, " What is stopping other transactions from acquiring other Canadian cultural industries?"

One wonders if the ministers involved in this decision really knew what they were doing. Were they misinformed by their advisers? If not, is this going to be the Liberal government's policy, the same as the previous Conservative policy.

I quote from the Liberal red book:

At a time when globalization and the information and communications revolution are erasing national borders, Canada needs more than ever to commit itself to cultural development. Instead, the Conservative regime has deliberately undermined our national cultural institutions.

The purchase by Paramount of Maxwell Macmillan and Ginn is an undermining of our national cultural institutions.

I ask this government, is this what it means when it talks about cultural development? Is this a harbinger of things to come?

[David Walker, Liberal, Parliamentary Secretary to Minister of Finance]

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.

[The Deputy Speaker]

Pursuant to Standing Order 38(5), the motion to adjourn the House is now deemed to have been adopted. Accordingly the House stands adjourned until tomorrow at 10 a.m., pursuant to Standing Order 24(1).

(The House adjourned at 7 p.m.)