Debates of April 11th, 1994

National Security

[Michel Bellehumeur, Bloc, Berthier—Montcalm, QC]

Mr. Speaker, to begin, I would like to thank the Solicitor General of Canada for letting me see and read his statement, his press release and the report he quoted. We were able to become acquainted with it all before he read it and I thank him for that.

That will be the only thanks I extend to the Solicitor General of Canada and to the government in general today, since we were read a statement that I think is completely empty and contains nothing instructive on this area of the jurisdiction of the Solicitor General of Canada.

I think that it raises many more questions than it answers. The Solicitor General acted like his predecessors; that is, he very solemnly read an annual statement. I think that Canadians and

Quebecers want to have more than this very broad information. We want to know to what use the money we give this government and this agency in particular is put.

If the real purpose of this statement and the public report was to provide Canadians with an assessment of the present intelligence and security environment and especially to inform them about what is being done to protect the security of the country, I think that they have missed the boat again; we learn absolutely nothing. A lot of information is scattered left and right as a diversion but there is nothing substantial to show the real value obtained from the $228.7 million spent by the Canadian Security Intelligence Service last year. That is not peanuts-it is a quarter of a billion dollars.

I am sure that the Solicitor General of Canada will answer me that for reasons of national security, the government cannot reveal more.

But would it affect national security to know in which province CSIS spent the most or which province benefited the most from the $228.7 million spent last year?

Would it affect national security to know about inactive files-I hope that CSIS has closed a few files in its ten years of existence-so that we have tangible evidence of what this service has accomplished, in what areas it has conducted investigations? Would it affect national security to know that Quebecers and Canadians have in their hands something tangible to check whether or not they do a good job?

Would it affect national security to know which investigations saved lives or prevented attacks or disasters? Unfortunately, what we now see in the newspapers is only the negative side. I am quite willing to offer constructive criticism but I am not provided with the arguments, the files or anything else I need to do so. We now hear about things like Air India that are not too flattering to CSIS, or about terrorists entering Canada. But if we had something more constructive, more positive in the reports, we could present different arguments.

In ten years of existence, as I was saying earlier, and three public reports, I feel that something more concrete could be said to increase transparency without threatening national security. I think that if the government wants to be more transparent, it should apply this philosophy in these reports.

True, the Canadian Security Intelligence Service itself is watched by the Security Intelligence Review Committee or SIRC, as the Solicitor General said earlier. It is reassuring to know that, Mr. Speaker. I feel comforted by the fact that the Solicitor General of Canada is reassured by SIRC's last report saying that CSIS operations were legal and effective.

But who are the wise people who wrote this report and came to this conclusion? I am going to name them because I think that some members of this hon. House do not know them.

They are Jacques Courtois, a 73-year-old lawyer; Rosemary Brown, a 63-year-old social worker and the first Black woman to be elected in British Columbia; Edwin Goodman, a 75-year-old lawyer; George Vari, 70; and Michel Robert, whose age I do not know, a former national president of the Liberal Party of Canada.

When we see who is overseeing this committee, we may wonder. I am not saying this is not a good group whose members are not qualified, but what right have these people to monitor an organization that we in this House cannot monitor? I think that we must be even more suspicious of and look more closely at an organization such as CSIS. And I think that the recently elected 35th Parliament has the mandate and the capacity to determine if this $228.7 million is well spent. On the contrary, this job has been given to a committee where the average age is about 70. These people are probably friends of the government but are they qualified to present such a report and say that yes, everything is consistent with the law? I have my doubts and that is why I cannot present a very positive report, because we were given a statement almost impossible to verify, general principles, wishful thinking, but nothing more tangible. When we see who monitors CSIS, we realize there may be a problem there also.

Mr. Speaker, as I said earlier, the friends of the government who sit on the external review committee may have a definition which is different from that of the legitimate elected members of the 35th Parliament on what the protection of Canadians and Quebecers' lives, as well as of the country's interests, entails.

As for the legitimate Official Opposition, I can tell you that we surely have a definition which is different from that of the Security Intelligence Review Committee. Since the Solicitor General of Canada quoted an excerpt of the report in his statement, I will also refer to a part of this report which raises questions in my mind on just what the protection of life means.

In its report, the committee notes that in a small number of recent cases-identified by the five people I referred to earlier, whose average age is 70-, the intelligence gathered by the Service during these investigations on certain individuals seemed unrelated to the issue of national security. The committee is also of the opinion that even though some investigations were related to law enforcement issues regarding legal protest activities or the expression of dissent, no intelligence information leads it to conclude that activities described in paragraph (c) of the definition of threats to the security of Canada, in section 2 of the Canadian Security Intelligence Service Act had occured.

I wonder about this excerpt. Are we going back to the good old seventies? This could well be the case. I would have liked to know when these investigations were conducted, who was targeted, and in what province they took place. What legitimate protest triggered these investigations?

As long as we have an external review committee with no democratic control over targeted intelligence activities, the risk of bias will always exist.

Members of the external committee are not elected. There is no parliamentary control over intelligence activities and, in spite of what the Solicitor General said earlier in his speech, I find this situation extremely dangerous.

When we have a real report, a report with real questions and real answers, then we may be able to make more constructive criticism. What we have right now is an extremely important organization, important enough not to have to come before elected representatives. We were elected and these people do not even have to come before us to explain what they do exactly. Moreover, in these difficult times when the government keeps saying that we must tighten our belt, it spends $228.7 million and we cannot even see how the money was used.

Until we have a real report with real answers, it will be very difficult for the opposition and for democracy in Canada to come to a conclusion on this.

[Paul Forseth, Reform, New Westminster—Burnaby, BC]

Mr. Speaker, as a member of the Standing Committee on Justice and Legal Affairs I am pleased to respond to the minister's statement on the tabling of the annual report of the Canadian Security Intelligence Service.

In the public's view of CSIS there exists an inordinate secrecy about its general operations and an apparent lack of accountability to the government and the Canadian community it serves. This report tabled today does not assuage legitimate public concerns about the underlying assumptions of the existence and the operational philosophy of CSIS.

We are in a time for governments when business as usual is not good enough. The government of the day is being forced to recognize that basic reviews of social programs and general priority setting of departments will happen one way or another.

It can be done in a rational way or by disjointed incrementalism. It is like rushing, putting out fires so to speak, when the crisis of finance and popular political support implodes upon the sleepwalking government as it stumbles along toward a new Canada of new international, fiscal and democratic realities.

When we come back to look at CSIS from this side of the House there is an increasing uneasiness about the aspects of a government bureau that spends a fair amount of public resources to in effect maintain an image while at the same time satisfying the self-serving interests of insular survival at a time when all else in government is under fundamental review.

We are in social service review and, more closely to CSIS, the military establishment will be undergoing a white paper review process. Certainly it is also time to ask this government about CSIS, its mission statement, its performance results measured against its own goals and mandate laid out in the previous annual reports and the legislation.

There has been fundamental review before but we need more than the current committee oversight process and annual reports.

I have been 21 years in provincial public service and I have come to appreciate how government bureaucracy can become focused on its self-importance and develop a driving agenda that is so right for those on the inside while it is losing the proper connections with those it was originally created to serve.

From the opposition chairs, from this side of the House, from Her Majesty's loyal constructive alternative, I want to ring the bell of this government again on the community accountability issue for CSIS. Members of the Liberal cabinet may think it is business as usual, they may think they have the traditional Canadian divine right to govern, for after all they are the Liberals. It is a new Canada of more open and accountable government that is the standard required.

The pre-Confederation reformers' agenda of responsible and accountable government beyond mere representative government has finally come of age and is represented by a new wave of Reformers in this House. We question the business as usual attitude, the annual report of CSIS which really tells this House nothing much about what goes on there. The public report is a good press release but justifies nothing.

I am quite aware of the difference between the operational confidentiality required for the organization to be effective and the new higher level of ongoing accountability that citizens are coming to demand of government which in so many areas this government has not comprehended, being stuck as it is in old Canada thinking.

CSIS is said to look after security intelligence, national security enforcement and national protective security. The 1994 report is said to provide a window on security intelligence. I think it is a very small window and not large enough to let the light in of effective accountability.

CSIS is mandated to perform a difficult job, formerly done by the RCMP which led to a national scandal and the resultant creation of CSIS as a solution. One wonders what the 1994 scandal will be-cigarettes? I do not have any alternatives to present today.

We have CSIS. We need such an organization. It has legislation, resources and about 2,500 people involved. That is no small change. Daily in the media Canadians hear from around the world reports of war, political unrest and intrigue and a changing geopolitical landscape. Canadians want to be assured that someone is minding the store and tracking world events specifically in a Canadian security sense in view of vital Canadian interests.

The cold war is over. The western alliance intelligence systems have had to re-examine operations, assumptions and priorities. Despite the reports that are annually tabled and the current review and accountability structure, how is CSIS really? How is it moving to respond to rapidly changing world circumstances and the emerging new risks?

Specifically, despite what we have all heard about CSIS has it been able at this point to become truly proactive and predictive or is it still largely reactive or, in the vernacular, functioning "catch as catch can".

Issues of espionage, foreign influence, illegal activities in Canada and politically motivated violence are of grave concern. The world is a less predictable place. Canada is an international player and cannot isolate itself.

Hostile intelligence services of other governments, transnational corporations, which often are larger than many countries in resources and capabilities and are accountable to no one, these are issues for CSIS. As the number of global power centres grows so does the potential for threat.

As Canada becomes a seller and inventor of high value added technologies, both Canadian law and our international trade agreements may be broken by both the Canadian criminal element and underground operatives in the nations with which we trade.

Economic espionage is not new but it is a major issue for CSIS. This activity disrupts the level playing field which is a principle of international trade agreements. Yet there is a doubtful priority given to it. Accordingly, last year there was a liaison program from CSIS to the private business sector to enhance understanding of vulnerabilities.

Unfortunately the marching orders for CSIS' role in economic security was defensive, only advisory and precautionary. Canadian law could be broken. International conventions could be violated, our trade agreements subverted yet in economic espionage CSIS was again to be passive, reactive rather than proactive.

What about specific training and research done jointly with manufacturing associations or other national trade and financial organizations? It is community policing at a national level, block watch in the industrial, technological and financial sectors. I doubt from what I have heard that CSIS has anywhere near that kind of preventive, predictive level of operation, yet that is the best kind of law enforcement.

To say that private sector industrial espionage is strictly the responsibility of the private sector is like standing guard at the front door while the thieves come and go at will through the back door.

Monitoring and intercepting the deadly traffic of weapons and their associated technologies is a CSIS role. Terrorism is active in the world. Canada has been used for fund raising for foreign weapons buying and sometimes as a safe haven for numbers of extremist groups. CSIS, the RCMP, the military, Immigration and so on have overlapping roles to control criminal acts from these sources.

Global trends of ethnic nationalism, fanatic types of religious fundamentalism and other forms of destabilizing ideological extremism warrant vigilance. The immigrants to this country and the millions who have come since the 1970s must be protected from foreign influenced activities and be dissociated from former homeland quarrels, violence and extortion. These immigrants must not be exploited by homeland interests. Old disputes from offshore must not continue in and through Canada.

The sources of terrorism remain strong. Nationalism, separatism, ideological extremism are I am sure some of the things that CSIS touches as it works to ensure the safety, security and integrity of our society within the context of a national security system.

The task of monitoring our national security agency is not one that parliamentary systems handle very well. With CSIS, we pay the piper but we never hear the tune or have much knowledge about what instrument is being played. We invest large sums of money in gathering security intelligence. I am not too sure we know what to do with a lot of what is gathered.

CSIS is something like a national insurance policy or a security alarm in the night to protect the public and national interest. Value for money then is an issue. How do we know the alarm works or if it is even turned on. We see the CSIS budget stay about the same despite changing realities. They are coming together in one building, organizing and reorganizing. I certainly hope that by now the internal turf wars are over between the grandfathered RCMP types and the other technocrats.

Reputation has it that for the past while much of CSIS' resources have been used up by itself for itself with infighting, reorganization upon reorganization with not much of real product or results for the national interest, the basic reasons why CSIS exists. This gets back to the basic issue of accountability.

Although I am sure we have people there who see themselves as dedicated and hardworking, secret unaccountable organizations, like governments that behave that way, very soon get completely off the rails. There must be an ongoing tension for an

efficacious result as the blank check of power is very corrupting to those within the system.

As a final suggestion, it is often the lowest level operatives in the system who actually deliver the service, the ones who actually do the work that are the best source for renewal, new and better accountability and a help for a mission statement. They usually are never asked or seriously considered.

In summary, CSIS must be accountable, not in just that it spent its money within the allowable vote and its accounts are correct. Canadians have a right to know that the existence of CSIS is worth it. My opening remarks related to a change in community attitude against top-down, we know best government activity.

I thank the minister for his report. I make the point for the need of better, broad based accountability. Increased public confidence in CSIS can only strengthen its role. I close by saying we hope against hope that CSIS can truly deliver a degree of security that places our nation in the ranks of the more fortunate few nations that have peace, order and good and honest government.

Greenpeace Canada

[David Anderson, Liberal, Minister of National Revenue]

Mr. Speaker, on March 24 I responded to the hon. member for Comox-Alberni on a question concerning the registered charity status of Greenpeace Canada.

I looked into the situation as promised. I wish to inform the member that Greenpeace Canada was formerly a registered charity but this status was revoked in June 1989 by Revenue Canada at the request of Greenpeace itself.

The Greenpeace Canada Charitable Foundation is however a registered charity and it is quite distinct, I am told, from Greenpeace Canada.

With respect to advocacy, political advocacy is permitted to a registered charity but only in a very limited sense. When we get information that this provision is being abused of course Revenue Canada carries out investigations.

I trust this will explain that Greenpeace Canada is permitted to carry out any advocacy that it wishes and that it does not in fact receive charitable status for receipt purposes.

[The Deputy Speaker]

As the hon. members know, the Official Opposition is entitled to reply to the minister's statement. Does anyone from the Bloc Quebecois wish to speak? The same goes for the Reform Party.

Is there somebody from the Reform Party who wishes to reply to the statement by the minister?

[John Duncan, Reform, North Island—Powell River, BC]

Mr. Speaker, if I understood the minister's statement there is a difference between the international Greenpeace organization and Greenpeace Canada. If I understood the context, is it allowable to transfer funds from the one organization to the other?

[The Deputy Speaker]

I do not believe it is an opportunity for further questioning. I think the way the rules work, as spokesman for your party you have to make a statement rather than ask a further question of the minister. If you wish to ask a question perhaps at a later time or else make a statement now putting your points on the record the hon. member may do so.

The Chair takes it that the hon. member does not wish to make a statement at this time in the name of the Reform Party.

[Elwin Hermanson, Reform, Kindersley—Lloydminster, SK]

Mr. Speaker, just for clarification. Was proper notice of this minister's statement tabled with the House before the statement was made?

[The Deputy Speaker]

Ministers are not obliged to give notice of the fact that they wish to make a statement. As the member will appreciate, it is normally done when a formal statement is being made such as was made by the Solicitor General. However, it is not a requirement that a minister do so.

[John Duncan, Reform, North Island—Powell River, BC]

Mr. Speaker, I misunderstood the intent. The answer is that I do not wish to make a statement at this time.

[Elwin Hermanson, Reform, Kindersley—Lloydminster, SK]

Mr. Speaker, the Reform Party would have responded to the statement had we been notified that a minister's statement would be forthcoming.

Credit Card Interest Calculation Act

[Paul Devillers, Liberal, Simcoe North, ON]

moved for leave to introduce Bill C-233, an act to provide for the limitation of interest rates, the application of interest and of fees in relation to credit card accounts.

Mr. Speaker, I wish to introduce a private member's bill entitled an act to provide for the limitation of interest rates, of the application of interest and of fees in relation to credit card accounts.

The purpose of the bill is to make the rules that govern credit cards fairer for the consumer. Such legislation is long overdue and I look forward to debating the provisions of the bill in the very near future.

(Motions deemed adopted, bill read the first time and printed.)

Petitions

[Audrey McLaughlin, NDP, Yukon, YT]

Mr. Speaker, I have the duty to present petitions on behalf of the Kaska Tribal Council of British Columbia and the Yukon. The petition is signed by residents of Watson Lake, Lower Post, British Columbia and that general area covered by the Kaska Tribal Council.

The Kaska Tribal Council in this petition is urging the Minister of Indian Affairs to confirm to the Kaska Tribal Council that Canada will honour its fiduciary obligations to the Kaska Tribal Council under the 1989 framework agreement on land claims. It also urges the minister of Indian affairs to remedy any breaches to date to the 1989 framework agreement, including those that may be contained in the umbrella final agreement signed in May 1993.

[Jim Hart, Reform, Okanagan—Similkameen—Merritt, BC]

Mr. Speaker, I rise today pursuant to Standing Order 36 to present a petition which has been certified correct as to form and content by the clerk of petitions.

The petitioners request that Parliament review Canada's foreign policy through a process involving broad consultation and participation and improve the official development assistance program so as to support more effectively the solutions put forward by poor countries to meet their own peoples' needs.

These petitioners are from Summerland, Penticton and Naramata in the riding of Okanagan-Similkameen-Merritt. I present this today.

Questions On The Order Paper

[Peter Milliken, Liberal, Parliamentary Secretary to Leader of the Government in the House of Commons]

Mr. Speaker, I would ask that all questions be allowed to stand.

[The Deputy Speaker]

Shall all questions stand?

[Some hon. members]

Agreed.

[The Deputy Speaker]

I wish to inform colleagues that pursuant to Standing Order 33(2)(b) because of the ministerial statements, Governments Orders will be extended by 38 minutes.

The House resumed consideration of the motion that Bill C-17, an act to amend certain statutes to implement certain provisions of the budget tabled in Parliament on February 22, 1994 be read the second time and referred to a committee; and of the amendment.

Budget Implementation Act, 1994

[Jim Gouk, Reform, Kootenay West—Revelstoke, BC]

Mr. Speaker, the omnibus nature of this bill makes it very awkward to deal with the component parts contained in it. Some of the items are realistic and reasonable. Some are not.

In normal circumstances one studies a bill and then makes an informed decision whether or not that bill should be supported. In the case of Bill C-17 that decision is not so easy to make.

One of the great political red herrings of the past Parliament was the Charlottetown accord. It too was omnibus in nature. There was something in it which almost everybody could accept collectively and there were areas which almost no one could accept as well. On the whole the majority of the Canadian population rejected the accord because in an all or nothing arrangement there were too many areas that were not acceptable. Therein lies the problem.

Since the rejection of the Charlottetown accord the past and present government have used the rejection to throw back in the faces of people advocating such timely reforms as an elected Senate the fact that such a reform was offered and rejected.

At the same time the government seems able to proceed with such constitutional items as official bilingualism for another province, changes in wording of an agreement which allow a bridge to replace a ferry system and negotiations on aboriginal self-government.

Thus is the problem associated with omnibus type bills which have in the past created a lose-lose situation for many of those involved in the process. It is with this obstacle in mind that I have prepared my position on transportation subsidies.

The prairie grain farmer has many problems in attempting to operate a successful and very necessary business in Canada. For years grain farmers have been receiving freight subsidies to offset the cost of grain transportation. There is in this subsidy a bit of a misconception. The farmers do not receive the subsidy directly. It is paid to the railway and there many unresolved

problems with the rail system which I believe are further complicated by the manner in which the subsidy is paid.

By paying the railroad directly one would assume that they ship all the grain and the overall cost of the freight is reduced by the subsidy amount. This is not the case. Many grain elevators are full to capacity and have been for quite some time. Some of these elevators have not seen a rail car in over two months.

A further complication to this is the spring road weight restrictions which are now in place which make it even harder for farmers to move their grain when elevators space does become available. Grain farmers are not paid for their harvest until it is sold and shipped to the purchaser. In the interim period grain farmers are not only not paid for their work and expenses, they also incur further costs which are often the difference between making a decent return on their labour and investment or going broke.

Some of these include the cost of storage of grain, interest charges on debts which should have been reduced or paid off from the proceeds of the grain sale, lost sales as a result of failure to deliver the product on time and demurrage charges levied by ships sitting in Vancouver harbour empty, waiting on grain to be delivered by the railway. These demurrage charges run up to $20,000 a day and some ships have left the harbour empty after collecting as much as $350,000 in demurrage charges.

The total crop transportation subsidy last year was about $36 million. Western grain farmers have lost approximately $200 million in grain sales and demurrage charges alone since the beginning of the Vancouver port labour dispute which the government was so reluctant to end.

Since the 1970s provincial and federal governments and the Canadian Wheat Board have supplied thousands of hopper cars to the railway. The Western Grain Transportation Act pays a transportation subsidy directly to the railway. In doing so there seems to be a loss of accountability which can be addressed very easily.

Paying the subsidy directly to the grain farmer on a pro rata basis will allow the farmers to have more control over the method of shipment and provide more incentive to the rail lines to move the grain more effectively and efficiently. The concept of a reduction in the amount of the subsidy paid is not where my concern lies. I know costs have to be cut and this is an area that has potential for reduction. These cuts however must not be solely on the backs of the grain farmers who are already in a very insecure financial position.

In normal business practices one looks at a rate of return on an investment. A return of 10 per cent is not considered particularly high, especially if there is an element of risk involved.

In addition, one normally and reasonably expects to be paid something for one's labours. Many grain farmers are currently paid less than one-quarter of the normal return on their investment that they hold. If we look at their total income in light of that small investment return they are paid nothing at all for their labours.

These farmers are not growing coloured TVs or fancy furniture. They are growing the food we need to produce in this country to maintain our independence for this vital commodity and an extremely important export product which helps maintain the economic viability of our country in an international global market.

We cannot simply turn our backs on the needs of the farmer. We must find a way to reduce expenses like the grain transportation subsidy without creating further economic hardships on people who are a vital part of our food chain and economic well-being.

The changing of the payment of the subsidy directly to the grain farmer is the first step. This step however must be accompanied by further changes to reduce unnecessary loss of income caused by the current transportation problems.

Subsidy reductions contained in the 1994 Liberal budget would result in a saving of approximately $5 million.

If the government were prepared to take some initiative in ending the unnecessary loss of income through the current transportation problems, not only would the subsidy reduction not create a further hardship, it would open up the potential for further reductions without hardships at all.

In short, there is a potential in this small portion of a great all-encompassing bill for savings in the area of grain transportation subsidies, but the government must do its homework first. In this draft that homework has not been done.

I trust the government will accept these remarks as items to consider and modify this entire section before it is brought before the House again.

I now turn my attention to the Atlantic region transportation subsidies. The Atlantic region consists of New Brunswick, Nova Scotia, Newfoundland, Prince Edward Island, Labrador and the eastern portion of Quebec. The purpose of these subsidies is to promote and encourage the transport of goods within the Atlantic region.

There are three different components to these subsidies under the Maritime Freight Rates Act. The first is a basic westbound subsidy on virtually all commodities travelling from inside the region to territories outside the region.

In 1992 this totalled $38.4 million, $9.6 million for rail transport and $28.8 million for truck transportation; a separate

westbound selective subsidy of 20 per cent on selected goods which were actually manufactured inside the region as opposed to simply passing through.

In 1992 this totalled $13.7 million, $3.7 million for rail transport and $10 million for truck transportation.

In addition, there was an internal regional 10 per cent subsidy which was reduced to 9 per cent in the budget of April 1993 on a selected list of commodities. In 1992 this totalled $57.7 million, $9.5 million for rail transport, $47.5 million for truck transportation and $.7 million for marine transportation.

The combined total of all Atlantic subsidies for 1992 was $109.8 million.

In the budget of April 1993 this $109.8 million subsidy was reduced by 10 per cent. To achieve this cut the overall westbound rail shipment subsidy was cut from 30 per cent to 28.5 per cent.

Other reductions in costs were made through general administration and internal cutbacks across the board.

This year's budget calls for another 5 per cent cut in the total Atlantic shipping subsidy, which now sits between $100 million and $105 million, commencing April 1994.

Once again I find myself in a mix of support and opposition. On the one hand we have the continuing problem of the needs of government to reduce expenditures. On the other hand I find the government has once again not done its homework.

The general economy of the maritimes is fragile at best and the government while recognizing the need to reduce its spending must also be mindful of the need to examine all areas of savings before taking any arbitrary action.

The reduction of the Atlantic shipping subsidies as proposed is not unreasonable. The reality is these subsidies could probably be reduced considerably more but not without coupling these reductions with other changes.

One of these changes is the removal of interprovincial trade barriers in the region. These barriers already cost the Atlantic region more than the total value of the regional development grants. As in the case of western grain farmers, subsidy reduction would be a lot more palatable if it were coupled with reductions of other costs of doing business.

Another area that should also have been considered is the cost of keeping the port of Montreal open in the winter months. Currently icebreaking services are provided by the coast guard at no cost to the shippers or ships that the goods travel on. This creates two problems. First, this service costs the federal government about $33 million a year. To be sure some of this, about a third, is spent on flood control work. The rest amounts to yet another transportation subsidy costing the Canadian taxpayer four times the amount of saving in the Atlantic regional freight subsidy reductions proposed.

Second, this free service actually works against the Atlantic region by subsidizing the movement of goods through the maritimes in the winter instead of utilizing the ice free ports in Halifax and St. John's. It is well and good to have this service available for ships wishing to utilize this service, but it should be user pay. This would result in savings far in excess of the current amount targeted by the government and at the same time likely produce some economic benefit for the Atlantic ports.

To put it mildly, the St. Lawrence icebreaker issue certainly seems ironic considering the large degree of difficulty the Atlantic shipping industry is presently going through. The disorganized, self-defeating government policy in subsidy fields does not end there.

To add further fuel to the fire I must also express some sincere concerns regarding the proportion of truck subsidies received in the Atlantic region when compared with the alternate subsidies received by rail and marine transportation sectors. I am a bit perplexed as to why the government would provide such a proportionately huge subsidy for the very industry that is supposedly bringing about the untimely demise of our nation's rail system.

This is particularly true in the case of Atlantic Canada which has been suffering a great deal in recent years and has suffered deep cuts by both Canadian National Rail and Canadian Pacific Rail as a result.

Although there is certainly an argument that is to be made that Canada's railroads are not competitive enough to go head to head with trucking firms in the ongoing quest for this market share, I am not sure that I am prepared to accept this argument at full face value. The fact that major trucking companies are being so well subsidized by the government is bound to have a negative effect on our important rail system, something that will only hasten the demise of the rail lines in the Atlantic region.

Prince Edward Island and Newfoundland in particular have already felt the sting of line closures, a predicament that strikes at the very heart of interprovincial arrangements which were made with the east at the time of Confederation. This relatively heavy subsidization of truck transportation in Atlantic provinces is a double pronged blow to our nation's railroads.

The reason for this is simple. The disproportionate amount of direct subsidy money received by trucking firms amounts to a second major subsidy for this industry which already receives a major indirect subsidy in the form of government paid highway construction and repair. Whereas railway companies like CN and CP are obliged to basically pay their own way for the upkeep and maintenance of their expensive rail lines, trucking companies are under no such obligation when it comes to Canada's roads. Yes, there are fuel taxes paid by trucks that travel down

our highways but trains are also obligated to pay these same taxes.

The result of this scenario is that trucking firms are being assisted in their transportation responsibilities to double and triple the tune of what our railways are receiving on a per capita basis.

While all this is happening our essential highways, particularly the Trans-Canada, are crumbling beneath the weight of heavy 18 wheel vehicles that are not required to pay their full share of much needed repairs. At this point it seems unlikely the federal government would be willing to put any more money into expensive highway renovations. This has not been done for years and the present deficit mess certainly does not lend itself to alleviating the often dangerous conditions drivers must deal with.

Nevertheless, the fact remains that the present subsidy system in the Atlantic region as it now operates is obviously geared to work against railways that might not be so indebted at present if it were not for unfair government policies.

I am not arguing that the subsidy systems provided to Atlantic Canada are too high, although it is good to see small cuts have been made by the government in this sector. What I am arguing is that subsidies are being unevenly, unfairly, unwisely spread throughout the transportation sector.

This is what I mean by the government not having done its homework or having the courage to alter and improve what is clearly an very inequitable subsidy system. I would hope and expect that the Minister of Transport will give some serious consideration to the revamping of its funding allocations in the weeks and months to come. There are clearly much greater potential savings than those proposed by the government and without serious effect on either group or region involved.

Beyond the fact of subsidy issues we are now talking transportation matters and none of this has come before the transportation committee.

I generally support both subsidy reductions proposed by the government although I cannot support the overall bill because of clauses that have nothing to do with the subsidies. I suggest the government now commence to complete its overdue assignments: government cost reductions coupled with economic benefits to these regions.

[Louis Plamondon, Bloc, Richelieu, QC]

Mr. Speaker, I would have a comment to make on the extremely well-thought-out speech by the hon. member who just spoke. At the beginning of his speech, he talked about subsidies which should be paid directly to the farmers instead of to the railway to ship wheat, for example, from the West to the East. This battle has been going on for years and is known as the Crow's Nest Pass battle. That debate reflects the conflicting philosophies of agricultural development in Eastern Canada and Western Canada.

If the hon. member thinks that these subsidies should be paid directly to western farmers, you will understand that eastern Canada, Quebec in particular, is dead against it because this freight assistance was intended to allow all regions of Canada to be supplied with wheat, and not to provide the grower with a subsidy he could then use as he wishes, to pay for shipping wheat, raising cattle or operating a slaughterhouse. In other words, to use this money to increase his personal wealth without necessarily supplying regions where wheat is less plentiful. That is why this assistance was applied directly to transportation, to ensure supply.

If we, in Quebec, object to it being any other way, it is because we believe that, if the province of Quebec-with about 25 per cent of the total population of Canada-were assigned 25 per cent of the overall budget for agriculture, it would be receiving $800 millions more every year and could easily use this extra money to diversify its agricultural production.

On the other hand, if the assistance went directly to the grower, then the money which was intended to be applied directly to transportation would be directed to that region of the country where it would be put to a use that differs from the very objective, the very principle of Crow's Nest, as it was called, which would destabilize the entire Canadian farming industry. We have always been opposed to this direct subsidy concept in the East, that is to say in Quebec as well as in eastern Canada.

You may remember that there was a report tabled by the previous government. In 1983, the Liberal government had considered subsidizing growers directly, but the idea was rejected. Later on, following an extensive Canada-wide debate, the Conservative government also held an inquiry into the Crow's Nest problem, which concluded that things should remain as they were. The very fact that the hon. member raises this issue again today goes to show that a block really exists and how different both sides' philosophies are.

As for his remark on transportation in the East, it goes without saying that we too, in Quebec, are not clear on a certain number of things. But one must bear in mind that in that case, we are dealing with a common household commodity like potatoes. If a potato grower from Prince Edward Island or New Brunswick receives federal freight assistance, that will cause some inequity vis-à-vis growers from other regions, like Ontario and Quebec, who have started to grow this product. For example, the grower from Pierreville, in my riding, who wants to sell his potatoes in Chicoutimi receives no freight assistance, while potato growers from New Brunswick or Prince Edward Island do.

So, that is somewhat unfair. However, we recognize that this legislation to help the Eastern provinces is still worth something and we think the freeze will be extremely hard on these regions which are going through tough economic times. The 10 per cent freeze stipulated in the legislation is a very harsh measure.

As for the 10 to 15 per cent increase in the West, it is also a tough decision which brings into question the supply process we had in the East for crops coming from western regions. Finally, the hon. member wondered about the port of Montreal and mentioned that the use of ice-breakers was extremely costly. Personally, I think the port of Montreal was one of the most profitable ports in Canada and was affected by the opening of the St. Lawrence Seaway. If you want to maintain the seaway, which does not serve only Montreal, but links the city to other parts of Canada, you need to keep the port of Montreal open in the winter months. That seems as obvious to me as it was to the Government of Canada when it decided to build the Seaway.

Although I understand very well the issues raised by the hon. member, I want to tell him that I do not agree at all with him about wheat production in western Canada and the subsidies going directly to the farmers instead of the shippers. Above all, I do not agree with his view on keeping the port of Montreal open in the winter months, even though it costs money. We have gained some expertise in the area of ice-control throughout Canada and the Coast Guard is renowned throughout the world. We could even export our expertise, make it some kind of know how, as you say in English, knowledge we could export.

That is all I had to say following the brilliant speech made by the Reform member, even though I do not agree with him.

[Jim Gouk, Reform, Kootenay West—Revelstoke, BC]

Mr. Speaker, I thank the hon. member for his comments and questions.

With regard to prairie grain subsidies I would point out that if they go to the farmers they still have to transport their grain. It is not a question that they are going to pocket that money, use it for other things, and not bother to ship their grain because there is no way to get paid until they ship it.

The point I was trying to make during my presentation was that these subsidies to western grain farmers could be reduced or, for that matter, virtually eliminated if we also eliminated the other unnecessary expenditures they are burdened with right now because of the problems with shipping grain other than the cost factors.

With regard to the port of Montreal the hon. member seemed to indicate that it should be kept open because it was a decision made by the Canadian government. It was also a decision made by the Canadian government that put us over $500 billion in debt. I do not think the hon. member likes that decision. Many decisions made in the past have to be questioned.

I am not questioning whether we should be keeping the port of Montreal open. To suggest that we shut down the port would be ridiculous. In my speech I said that I had no objection to the icebreaking service being made available to ships, but let them pay the cost of having this service provided to them. It otherwise forms an extremely expensive offset subsidy in direct disproportion to all other subsidies for the service.

We have to look at ways of cutting all costs right across the country in virtually every area the government does business. This is just another way of addressing the problem.

[Albina Guarnieri, Liberal, Parliamentary Secretary to Minister of Canadian Heritage]

Mr. Speaker, it gives me great pleasure to join today's debate. I am rising to speak in support of Bill C-17 and to address more particularly clause 18 which introduces an amendment to the Broadcasting Act. This amendment will allow the CBC a greater measure of financial flexibility.

I would like first to convey my appreciation to the Minister of Finance faced with the difficult task of balancing so many competing priorities. His support for the CBC has been most gratifying. I know the employees of the CBC, including very many talented Canadian artists along with millions of loyal CBC viewers, also join me in expressing their appreciation.

The importance of public broadcasting in Canada fully justifies such a commitment. Thanks to public broadcasting, Canadians remain in touch with one another locally and nationally scene and with the whole world. Public broadcasting also gives all communities across this vast country of ours a chance to define and articulate their own vision of the world. Public broadcasting plays a decisive role in reaffirming our national identity.

That is why annual budget funding for the Canadian Broadcasting Corporation totals about $1 billion. This is 62 per cent of all federal funding for cultural agencies reporting to the Department of Canadian Heritage.

However, the financial situation of the CBC has deteriorated in recent years. Since 1984, its budget has been cut by over $200 million, which has had the effect of increasing its dependence on advertising revenue. In 1984, this source of financing made up 21 per cent of the CBC's total budget. Today, it is 36 per cent of the CBC's total budget, an increase of 15 per cent, although this has not been enough to turn around a very serious deficit. Its

dependence on advertising revenue calls into question the role of the CBC as public broadcaster.

Furthermore, the 1993 budget inflicted cuts totalling $100 million, effective in 1996. The CBC has already told us that if its financial situation is not turned around, it will have to proceed with further cuts in operations.

However, the problems of the CBC are not only due to budget cutbacks, a structural deficit and the impact of the recession on advertising revenue. The Canadian broadcasting industry has changed considerably in recent years. New and specialized services obtained operating licences in the eighties.

Canadians now enjoy a wider range of programming and services than ever before. Although these changes are significant, they are only a preview of what we can expect in the broadcasting industry. In radio and television, technological progress will generate even greater diversity. It is expected that this diversity will lead to increased competition, fragmented audiences and major investments in technology, and will increase the cost of Canadian programming.

In television, the advent of direct satellite broadcasting and the ability of cable companies to increase the number of channels they offer mean that 200 or even 500 channels will be available before the end of the century. New American direct satellite broadcasting services will be extended to Canada in the next few months. Cable companies will add a number of new services, including a number of specialized services which the CRTC is expected to authorize this year.

This new competition will further fragment the audiences and advertising revenue of Canadian broadcasters, including the CBC.

Radio is also facing a number of changes. A few years from now, we will probably be seeing new radio services and digital technology adopted by existing services.

Our government has an historical tradition of supporting CBC, of supporting Canadian culture.

Our electoral platform was clearly outlined in the red book. In that document we stated that culture is the very essence of our national identity, the bedrock of national sovereignty and national pride.

At a time when globalization and information and communications revolution is erasing national borders Canada needs more than ever to commit itself to cultural development.

There is no single instrument more important to the development of our national cultural identity than the CBC. This belief was the basis for our electoral pledge to provide the corporation with stable, multi-year financing. It is a key element in our plan to strengthen the CBC's ability to adapt to the new communications universe.

On February 3 of this year the Prime Minister announced the appointment of Mr. Anthony Manera as president of the CBC. Mr. Manera has enjoyed a distinguished career both within and outside the CBC. His commitment to the ideals of public broadcasting and his understanding of the corporation are deep indeed. The government is confident that under the capable leadership of Mr. Manera and the direction of the board of directors the corporation will meet its many challenges.

The government recognizes the enormity of the task before the CBC. In asking itself how the CBC can continue to reflect our fundamental values that project an image of Canada in which all Canadians recognize themselves the government understands that it must provide some measures of assistance to the corporation.

As a first step the government has committed not to impose new reductions on the CBC over the next five years subject to annual parliamentary approval of appropriations.

In addition, the government agreed to reprofile the cuts announced by the last government in order to ease their integration by the CBC. This measure comes in cost of $100 million in foregone savings to the consolidated revenue fund. It is a sure sign of this government's commitment to the CBC that this decision was made in the context of severe financial constraints.

These measures, the appointment of a strong new president, our agreement not to impose new reductions on the CBC and the reprofiling of previous cuts will give the corporation both the leadership and the clear picture of its financial future for the next five years it needs to plan for the longer term with confidence.

The next step in our campaign to help the CBC has been our agreement to grant the corporation's longstanding request for a borrowing authority. This measure will permit the CBC to become more efficient in its operations and allow it to enter into other ventures acceptable to the government that provide a return on investment.

The proposed legislative amendment to the Broadcasting Act would authorize the CBC to borrow from the consolidated revenue fund and from Canadian banking institutions through lines of credit, commercial loans and issuing bonds or commercial paper.

These borrowed funds would be used only to generate operating savings or for venture investments. The operating savings would accrue from investments in small and medium capital equipment and projects which have a payback of four years or less.

At the present time the corporation is unable to take advantage of such opportunities due to its shortage of capital re-

sources and the immediate need of addressing physical obsolescence in plants and equipment across the country.

Although the CBC can currently request an advance from the government this can be obtained only in exceptional circumstances.

The present situation is inadequate for two reasons. Requests must be evaluated in competition with other government priorities and the outcome of a request is directly dependent on the availability of operational reserves.

An obvious example of how this initiative could generate operational savings would be the purchase of capital equipment to replace leased equipment.

The operational savings would first serve to repay the capital investment over a period of three to four years and then further be applied against the corporation's operational shortfall. The authority to borrow would also facilitate the corporation's undertaking of large scale initiatives that further the achievement of the CBC's mandate and yield significant returns for a relatively small investment.

A good example of an initiative of this magnitude is the recent arrangement reached by the CBC to establish its owned and operated stated in New Brunswick. If the CBC had taken out a loan of $9.5 million for the purchase of the station, the advertising revenues from this new station would have allowed the CBC to repay the loan over a shorter timeframe than the life of the current agreement. The ability to borrow would have improved the CBC's financial position over the term of the agreement by over $3 million.

At this juncture I would like to assure the House that under no circumstances would the CBC be permitted to use these borrowed funds to address an operational shortfall and thereby operate on deficit financing. The CBC would be responsible for raising all the borrowed funds and ensuring that all procedures are followed in full compliance with the guidelines for market borrowings by crown corporations issued by the Department of Finance. The cash flows from the projects in question would remain with the CBC with their first priority being to service the debt.

The CBC's borrowing ceiling would be $25 million. A memorandum of understanding between the CBC and the Department of Finance would set out the terms and conditions governing the borrowing authority. Foremost among these conditions is that the CBC would require the approval of the Minister of Finance for each case in which borrowed funds were required.

In my opinion granting this long standing request for the borrowing authority is an important initiative in fostering the business like flexibility that is required for a $1 billion corporation with commercial objectives like the CBC.

No other corporation operating such a large enterprise would wish to operate without at least some such ability to borrow for viable investment opportunities.

The government and the CBC have taken a joint approach to resolving the corporation's problems. In addition to these measures, the minister has resolved to consult with his Cabinet colleagues, with other broadcasting industry stakeholders and with the corporation itself with a view to finding other ways of generating revenues in the public broadcasting field which would reduce the CBC's dependence on advertising revenues.

For its part, the CBC is expected to eliminate structural deficits and to absorb inflation costs as well as operating costs.

Mindful of the unique and highly enviable reputation enjoyed by the CBC's radio broadcasting services as well as the vital role that regional services play in helping the corporation serve the regions and introduce them to audiences nationwide, we have asked that current radio services and a regional presence be maintained.

The challenge is formidable. The move to grant the CBC limited borrowing authority will be one important component of the new strategy which the corporation will need to embrace if it is to meet the challenge.

Clearly, what we want is a renewed CBC.

Canada needs an effective public broadcaster as a front-line weapon in the battle to defend our cultural sovereignty against the influences of globalization.

To wage this battle effectively, the CBC must do the following: it must be the perfect reflection of regional perspectives across the network; it must help English-speaking Canadians and French-speaking Canadians gain a better understanding of the other group's culture by exposing them to programs produced by the other group; it must contribute to the common understanding of the multicultural or multiracial makeup of our population; it must adopt the strictest standards of journalistic responsibility; finally, it must co-operate with the rest of the broadcasting industry in an effort to come up with new markets for Canadian programs and sound recordings.

If we really want the CBC to be the typically Canadian voice that will shape our national identity in a multichannel environment, we must give it the necessary tools with which to confidently plan its future.

I call upon my hon. colleagues in the House to support the passage of Bill C-17 which, among other very commendable things, will amend the Broadcasting Act so as to grant the CBC limited borrowing authority. Recourse to this mechanism under the stringently controlled circumstances described above will

give the CBC considerable commercial flexibility. In turn, this flexibility will result in operating savings in the long run.

[Ian McClelland, Reform, Edmonton Southwest, AB]

Mr. Speaker, I wish to congratulate the member opposite for her spirited defence of mother corporation.

I think most Canadians grew up with CBC and view it as an integral part of our lives. However, I have a problem with CBC particularly over the last few years. I also have a problem with CBC as a purchaser of advertising from CBC, but that is another story.

I wonder if the member opposite would comment on this question and I will phrase it this way. The CBC is neither fish nor fowl. It tries to be a private broadcaster but it is a public broadcaster. It tries to be a public broadcaster and it is caught up in being a private broadcaster.

I wonder if the member opposite has given any thought to the CBC's paring itself down to a more affordable operation or a model, striving for excellence using the BBC as a model, BBC-1 or BBC-2, running a commercial free network but not in competition with the private broadcasting networks.

[Albina Guarnieri, Liberal, Mississauga East, ON]

Mr. Speaker, the Reformer is on record as wanting to privatize part or all of CBC. I thank the hon. member for his question.

As some make this recommendation they also claim that Canadians would be better served by the privatization of CBC. All they would succeed in doing by imprudent budget cuts is waste much of the money that remains spent on the CBC because it will not be commercially viable and its product would deteriorate to irrelevance.

Closing the CBC or severely cutting funding would be to dam the last river of Canadian culture and leave it in effect as a stagnant pool. Certainly if the hon. member has suggestions to make he may wish to make representation before the CRTC.

The hon. member also said that all Canadians recognize the importance of CBC as a refuge from the mainstream of American sitcoms and documentaries about the civil war or the FBI. As the principal carrier of Canadian content, the CBC does prevent Canadians from being completely culturally disenfranchised.

Regrettably, though, the CBC must continue to suffer the slings and arrows of Reform MPs who were advocating its demise, unfortunately with a very narrow view of what constitutes Canadian culture.

[Ian McClelland, Reform, Edmonton Southwest, AB]

Mr. Speaker, I do not think the hon. member opposite heard what I said when I asked the question. My point was this. Would the CBC not better serve the people of Canada if it were to become a true public broadcaster rather than trying to be a private broadcaster and a public broadcaster? It may necessitate scaling down so that it could go into a commercial free broadcasting mode similar to the BBC. The BBC is world recognized for the quality of its programming.

The point that I would ask the hon. member to consider is that perhaps Access TV for instance in Alberta may be shut down. Why could the programming on Access or TVO not all be put into CBC and CBC become truly a public broadcaster?