Debates of April 28th, 1994

Prescription Drugs

[Hugh Hanrahan, Reform, Edmonton Strathcona, AB]

Mr. Speaker, I rise today to discuss the motion introduced by my hon. colleague. Motion 167 allows us to discuss the possibility of repealing Bill C-91 which was passed during the 34th parliament.

I believe that in all fairness to both the generic and to the brand name manufacturers we should hold off on this debate until such time is allowed to determine whether Bill C-91 has had a positive or a negative impact on research and development spending in Canada, employment and health care costs.

In fact, it is already explicitly stated in sections 14(1) and 14(2) of Bill C-91 that a review of this bill will be done in 1997. We should allow the Patent Medicine Price Review Board and the drug manufacturers time to adjust to this new legislation. However, I would like to make a few comments on the motion.

First, I think that it would be useful to examine why we need patent protection in the pharmaceutical industry. Patent protection is crucial to this innovative sector. These companies require a certain amount of market exclusiveness guaranteed to them in the form of patents in order to recoup their research and development expenditures and finance the development of new products.

I believe like other inventions pharmaceutical products are entitled to patent protection. Unlike other products, however, the pharmaceutical industry must undergo a strict regimen of tests and evaluations to determine a product's safety and efficiency before it can be sold commercially. This testing process is rigorous and time consuming, involving animal and clinical trials.

Essentially Bill C-91 allows patent extensions to approximately three or four years. This extension still does not bring us in line with the rest of the world. In fact, the European Community averages 15 years, the U.S. 14, while Canada is at 10. It is little wonder that Canada has also one of the lowest research and development spending levels compared with the rest of the developed world.

Since 1987 when Bill C-22, the previous amendment to the Patent Act, was introduced R and D in Canada also increased. It was through Bill C-22 that multinational pharmaceutical manufacturers agreed to spend 10 per cent of Canadian sales in R and D in Canada. As a result R and D in Canada has increased approximately 250 per cent between 1988 and 1992. However, as mentioned earlier, it is too soon to determine just what impact Bill C-91 will have on the R and D spending in Canada in the long run.

Yet I do know that since the passage of Bill C-91 the pharmaceutical industry has spent over $600 million in research and development in Canada. This is a large capital output which has been a benefit to all regions of Canada.

Other key issues that must be considered are the mandate and powers of the Patented Medicine Price Review Board. This body was created under amendment to the Patent Act enacted in Bill C-22. The board was also amended in Bill C-91 during the last Parliament. The board is a quasi-judicial body which has the power to issue corrective orders when at the outcome of a hearing it is determined that the price of a patented drug sold in Canada was excessive. The board's jurisdiction extends to all patented medicines sold in Canada, whether they be prescription or non-prescription.

The mandate of the board is threefold: first, to ensure that the factory gate prices of patent medicines charged by the drug companies are not excessive; second, to report annually on the activities and pricing trends in the pharmaceutical industry; and, third, to report annually on research and development expenditures by the patented medicine industry.

The board's pricing guidelines ensure that no medicines exceed the international range regardless of the category in which the drug falls. These guidelines also ensure that price increases do not surge above the estimated consumer price index.

Since the creation of the board the prices of patent medicines in Canada have increased on average less than the consumer price index per year. Prior to the establishment of the board prices of the patent medicines rose on the average twice that of the consumer price index.

The principal amendments to the Patent Act brought about by Bill C-91 include new remedies for firms that charge excessive prices. These remedies include ordering price reductions, ordering a monetary payment in the amount of the excess revenues, and the extension of the patent life of patent medicines by approximately three years.

With the adoption of Bill C-22 the pharmaceutical industries in Canada increase both their patent protection life and the amount of employees hired. In fact employment increased by almost 15 per cent from 1987 to 1991. Again I believe we should have had a longer time period in order to assess the impact Bill C-91 will have on the employment rate in the pharmaceutical industry.

Another key area that must be examined is whether or not the extension of the patent life to 20 years has increased health care costs in Canada. Again the jury is still out. There has not been sufficient time to do a realistic study of the prices of medicines in Canada that relate directly to the patent life. Bill C-91 allows the board to be an effective control and watchdog that has some real teeth to it, which ensures that drug prices do not become an albatross to the health care system.

According to the executive director of the Newfoundland Hospital and Nursing Home Association, the boards have brought the pricing back down and companies have made large settlements. The Drug Prices Review Board seems to have done some very positive things which have brought companies into line.

As mentioned earlier the board has a new mandate which is ensuring that those manufacturers that wish to break the pricing standards will be financially accountable.

If we look at the total costs of health care the pharmaceutical industry's portion of these costs is approximately 2 per cent of health care expenditure in Canada. Therefore I am not overly convinced that allowing these companies an extension in patent longevity is the driving force behind our increasing health care costs.

A comparison between the generic industry in Canada and the United States illustrates a few interesting points. There are two Canadian companies that control 80 per cent to 90 per cent of the generic market in Canada and their prices average 60 per cent to 80 per cent of the brand name product. In the U.S. there are 200 to 300 companies that compete in the marketplace and the prices of the generic manufacturing there average 25 per cent to 35 per cent of the brand name product.

I must state we are premature in discussing the pros and cons of Bill C-91 because it has not been enacted long enough to make a well informed, unbiased decision. I would think we would be better suited to discuss this issue in the future, allowing both generic and brand name manufacturers to have sufficient time to make changes and work within the new bill.

[The Acting Speaker (Mr. Kilger)]

The time provided for the consideration of Private Members' Business has now expired. Pursuant to Standing Order 96(1) the order is dropped from the Order Paper.

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

[Antoine Dubé, Bloc, Lévis, QC]

Mr. Speaker, on April 13, I asked a question to the Minister of Human Resources Development concerning the new apprenticeship program for young people which, as you know, is now called "Young Apprentices". Unfortunately, my question was not answered satisfactorily.

What I was asking the minister was to commit himself to give Quebec its fair share of the program funds so that it could invest them according to its own needs and priorities.

Instead of answering my question, the Minister of Human Resources Development criticized some figures that I had not even mentioned in terms of vocational training. Vocational training is a provincial responsibility. The next day representatives from both the Parti Quebecois and the Liberal Party of Quebec in the National Assembly unanimously passed a motion asking the federal government to withdraw from vocational training.

Quebec was not the only one to make this request to the minister. At least three other provinces also expressed their reservations to the minister, which seemingly caused the cancellation of the federal-provincial conference that was expected for the next Monday.

Since then, the minister has continued to go forward unilaterally with this "Young Apprentices" Program, despite the fact that vocational training is, and I repeat it, the exclusive responsibility of the provinces.

Using federal spending power, with about 24 per cent of tax revenues coming from Quebec, the Minister of Human Resources Development admitted yesterday before a parliamentary committee that he used funds formerly allocated to community agencies to partly finance his new programs. For the benefit of Quebecers, I may point out that these programs are commonly referred to as direct employment programs.

I think it is highly improper to divert funds allocated to agencies that focus on local community development, in order to finance a new intrusion into a field of provincial jurisdiction. Hundreds of community agencies are now waiting for a reply from the Minister of Human Resources Development.

They talk about new models and new programs but never about new budget envelopes. They just recycle and fiddle with the existing envelopes for community agencies.

Does the minister really think he can fool us? When will the federal government finally understand that it is now time to reduce duplication, get rid of bureaucratic fat, encourage consultation on program financing and respect provincial jurisdictions such as education and job training?

Will the minister finally understand that we can save more than $300 million if he stops the duplication in the field of job training and if he gives the Government of Quebec the money he intends to spend in this area?

Finally, will the minister show some common sense and abide by the unanimous resolution of the Quebec National Assembly on job training and the various programs for young people recently announced by the minister?

[Dennis Mills, Liberal, Parliamentary Secretary to Minister of Industry]

Mr. Speaker, I begin by saying that in the government's recent announcement of the youth employment and learning strategy we stated that we would work in close collaboration with all the provinces in the implementation of the approaches and specific programs for young Canadians. In saying this the government is committed to assisting Canada's youth through programs that complement those offered by the provinces.

Quebec has a very different apprenticeship program from those in all other provinces. In Quebec those who wish to learn a trade attend a CEGEP for two or three years and then seek out an employer. In other provinces a person who wants to learn an apprenticeship trade must find an employer who is willing to employ and to train him or her. As a result Quebec does not require nearly as many funds for apprenticeship as do other provinces. Therefore funds are allocated where they are most needed, such as for the forms of vocational training offered at CEGEPs.

In addition Quebec still receives more than its fair share for the province's youth through regular employment programs and services, as well as through special current initiatives such as the joint management of co-operative education and project based training courses which are jointly delivered with the SQDM.

We will continue to work with the province of Quebec to set priorities for our youth programs and, where possible, we will harmonize our programs with those of the province of Quebec.

[Gaston Péloquin, Bloc, Brome—Missisquoi, QC]

Mr. Speaker, I have a question for the Minister responsible for the Federal Office of Regional Development-Quebec and it concerns the status of the Hyundai automobile plant in Bromont.

As the minister already knows, more than 850 workers lost their jobs when the plant closed. On March 23 last, I put a question to the minister asking him if he could provide any information to the residents of Brome-Missisquoi as to how the government planned to handle this matter. At the time, the Minister responsible for the Federal Office of Regional Development-Quebec informed us that he wanted to work closely with the Quebec government in an effort to find a way of reopening this plant located in my riding.

Today, nearly one month after putting this question to the minister, I am again asking him for a status report on the efforts made thus far to bring this matter to a happy resolution.

For over a month now, all kinds of rumours have been making the rounds about the possible reopening of the Hyundai plant. It has been rumoured that work will resume either in 1998, in the year 2000 or in the year 2002, that the plant will close permanently, that other companies have agreed to buy the building. And I could go on. Furthermore, the employees received very little severance pay from the company.

You will agree with me that the situation is already quite difficult and that it is essential for the Hyundai workers, their families and those around them, as well as for all the taxpayers of Brome-Missisquoi, that we avoid creating still more confusion on this issue.

It is time for the Minister responsible for the Federal Office of Regional Development-Quebec to tell this House what he has done and what he intends to do so that the Bromont plant can reopen to make cars or any other product that would put back to work the 850 workers who are waiting to use their talents and dedication.

[Lyle Vanclief, Liberal, Parliamentary Secretary to Minister of Agriculture and Agri-food]

Mr. Speaker, I would like to begin by expressing once again the great disappointment felt by the government following the decision of Hyundai Canada to delay the reopening of the Bromont plant indefinitely.

We are well aware that a definite closing of this facility would be an immense loss not only for the eastern townships but indeed for all of Quebec. I would like to state today, however, that we do not regard this as a dead issue and we are not going to sit back and resign ourselves to our fate.

We have therefore undertaken consultations with the Quebec government in the hope of finding a solution to this problem. I would like to add that during a recent visit to South Korea in early April the Minister for International Trade had an opportunity to speak to the chief executive officer of the Hyundai group, Mr. Chung, as well as the chairman of the board of Hyundai Motor, the parent company of Hyundai Canada, a gentleman by the name of Mr. Chong.

Both of these gentlemen, I stress, clearly indicated their firm intention of reopening the Bromont plant for the assembly of a competitive vehicle which could carve out a place for itself in the automotive market.

Hyundai's directors have mentioned that they intend to submit a business plan in the fall of 1994. We will examine this document carefully. We will go over it a second time with the Quebec government. The results of this examination will determine the type of support we will give to Hyundai to carry out its plans and reopen the Bromont plant.

Our government is committed to setting the economy of this country back on the road to prosperity. Our actions are an integral part of our desire to provide all Canadians with productive and well paid jobs like those in the automotive industry.

[John Solomon, NDP, Regina—Lumsden, SK]

Mr. Speaker, on April 22 I raised with the Minister for International Trade a question concerning the recent decision by the U.S. government which affected Canadian exports of durum wheat.

What happened at that time is that the American farm lobby pressured the U.S. government, the U.S. trade representative and the President to initiate some anti-dumping regulations and penalties according to the GATT agreement.

What this has done is really create an air of uncertainty for Canadian farmers, in particular farmers I represent in the province of Saskatchewan. The problem we have with this is that the Americans in every election year seemed to initiate a number of anti-dumping and countervailing actions on our Canadian exports.

This is a very serious concern because it seems that we signed the free trade agreements in 1988 and NAFTA in 1993. We signed last week the GATT agreements to facilitate freer trade, competitive trade between nations, particularly between Canada and the U.S.

Since these agreements have been signed we tend to have all of these actions, which are extremely difficult for many of our producers, particularly the grain producers in western Canada and in other parts of the country when they have a very good market. They have a very good product and they are very competitive in terms of their product. It is not subsidized to any great extent. It is an action of fair trade.

I was not totally pleased with the response I received during question period. It was very short. What I wanted to do is give an overview of my experience in Washington last week. I met with a number of U.S. congressmen to discuss trade issues as well as with the U.S. trade representative and other people.

What I concluded from all this is that in private the U.S. congressmen understand the issue of durum wheat imports into the U.S. They understand the complexities of trade and the commonalties between the U.S. and Canada. In many ways they are aware of the very important fact that Canada is the U.S.' major trading partner and vice versa.

Privately they are very consoling and they are saying do not worry about these things, they are pretty important to the farmers they represent but it is election year.

This is the point. We have all of the Congress of 435 representatives, congressmen, running for re-election this fall. We have 34 of the hundred senators running for re-election in the U.S. this fall. It seems that every two years, which is a very gruelling schedule for elections, the U.S. has a large number of these anti-dumping and countervailing actions taken upon Canada. It is not only Canada, it always means to target other countries like Brazil and Europe and South America and some of the Pacific rim countries, but it always includes Canada because it is really politically astute for it.

My question at this time is the same except I would like a little more information from the government. Can we have this government's assurance that it is going to protect Canadian farmers' interests and not cave in to this American pre-election posturing?

What I am looking for in specific terms is what is our week by week, month by month response to this action, which I classify as an unfriendly action on our country, to the Americans and to some of the businesses that are based in America that do business with Canada?

Can the hon. member give us a precise overview on what that might be?

[Lyle Vanclief, Liberal, Parliamentary Secretary to Minister of Agriculture and Agri-food]

In the brief time available to me, Mr. Speaker, I think I can help the member.

This is certainly an issue that has top priority with the government. It is an issue that has been raised at the highest level and that is between our Prime Minister and the President of the United States. The minister of agriculture, the Minister for International Trade and the government have the intention and the will to stand firm and hard in order to conclude an agreement which will respect the interests of the Canadian agricultural industry.

Specifically our object in these negotiations is to reach a deal that will protect Canada's access to the United States and which provides certainty and predictability for our agricultural and agri-food producers.

As the minister of agriculture has stated many times, there can be no deal unless it is a good deal for Canada. This means a good deal for the grains, food processing and supply managed sectors.

With respect to grains, we know that on April 22, last Friday, the United States notified the GATT of its intention to renegotiate tariffs on Canadian wheat and barley under GATT article XXVIII. By notifying us this did not shut the border. Negotiations can continue for 90 days, and if at the end of that 90-day period the United States is determined and takes a unilateral action we will retaliate in kind. We will protect and we will defend the interests of Canada and the Canadian producers.

We trade fairly with the United States. Our success there has been because of our high quality and because of a shortage there; a shortage there that has been mainly created by its export enhancement program which has taken products out of the United States in order to take advantage of its huge export subsidies.

Throughout these negotiations which began in December we have consulted closely with the industry and the provincial governments on a very high level. We will continue to do that because we know that the bilateral trade between Canada and the United States of $11.5 billion is important. We are committed to ensuring that this trade continues to grow for the advantage and for the future positive effects and mutual benefits to both countries.

[René Canuel, Bloc, Matapédia—Matane, QC]

Mr. Speaker, I put my question to the Minister of Finance and Minister responsible for the Federal Office of Regional Development-Quebec.

It pertains to Opération Dignité II . Representatives from this organization came to Ottawa to raise awareness among government members, because they felt their message was not getting through. They are from rural areas. I do not understand. Governments change, we had the Conservatives, and now the Liberals who were here also before the Conservatives, but the rural areas are more and more dependant on UI and welfare.

Now, unemployment insurance is being cut. Years ago, the Eastern Quebec Development Bureau spent millions of dollars to close small parishes. Instead of creating employment they went out of their way to close villages. Fortunately some people in those places took things into their own hands. There was the first Operation Dignity, the Ralliement populaire -a citizens' coalition, and the creation of corporations to pool woodlots, the pooling of resources by land owners.

There were many demonstrations in the streets under the banner of the Ralliement populaire and we were able to get a plant, Panval de Sébec. People managed to keep open the parish of Sainte-Paule which was scheduled to close. I invite you, Mr. Speaker, as well as the minister of regional development, to come and visit this parish which took hold of its own destiny.

Other municipalities did the same thing. But governments do not seem to have any political will, they seem to be trying to turn the Gaspé Peninsula into a huge park. It is harder for us to get a bit of money for a slaughterhouse than it is for Hibernia to get billions. And all this money might not be bring a good return on

investment, while a few dollars for a slaughterhouse in our area would make sure that our beef would stay in our region, instead of going to Montreal or Toronto on the hoof and coming back as meat.

What was done over the last twenty years? Millions are spent on unemployment while we are just asking for a few thousand, a few million maybe, to produce finished products, but we are being refused. That is the reason why I was not at all satisfied with the minister's answer. I have this second chance, and I am sure that the parliamentary secretary will give me his vision of rural life. The minister promised he would come to my riding next summer. He said so on the 17th, when I invited him to come and talk to the residents of the Gaspé Peninsula.

[Dennis Mills, Liberal, Parliamentary Secretary to Minister of Industry]

Mr. Speaker, I would like to begin by saying to the member that I cannot speak on the minister's coming to his riding but one day I would love to visit his riding and I hope that one day he will come and visit my riding in downtown Toronto.

To the member I want to say that even though he looks after his people in a rural setting and I am in a downtown setting we both share and care in the same way. What the government is trying to do is take a number of steps that hopefully will put people back to work.

We are not just reforming the unemployment insurance system. We are also trying to urge the financial institutions and the banks of Canada to be more generous in their attitude toward small and medium size businesses, the businesses that the member described in his riding. With the support of his colleagues in committee we are beginning to have some success in that area. We are trying with our infrastructure program to get some activity stimulated in the member's community and throughout all of Quebec and Canada.

We are also trying to the best of our ability to reform the tax system in the finance committee. There are a number of things we are trying to do. We know that there is a great sense of urgency and we are doing our best to move these projects forward.

Make no mistake about it, the member's riding will get the same attention and the same care as any other riding of any other member in this House.

On behalf of the minister I want to say that we do care about the pain that the member's constituents are experiencing and we are going to do our best to make sure that some of that pain can be relieved in the not too distant future.

[Réal Ménard, Bloc, Hochelaga—Maisonneuve, QC]

Mr. Speaker, two weeks ago, I asked a question of the Minister of Industry who, very casually, did not bother answering it. And yet, I was asking him a very important question regarding the conversion of defence industries to civilian production.

As you know, for the last three years, due to the international situation and defense budget cuts, the industries involved with defense production, 60 per cent of which are located in Quebec, have been going through horrendous times.

So much so that 10,000-Mr. Speaker, you heard right, I see worry on your face-jobs were lost in the military sector and it is the reason why I had asked the minister to highlight the concrete measures his government intends to take to remedy this disastrous situation.

I was flabbergasted when I realized that all he did was skate around the issue. The minister, whom I thought was an earnest man, could not tell us anything in spite of the promises made by his government during the election campaign. They are in the red book which has know become a black book for Canadians.

This government must give us its agenda and assist these industries. There are 600 in Quebec, 30 of them in jeopardy for lack of orders. And yet they have plans, and they know how to go about this long-awaited diversification.

Allow me to quote the great Quebec specialist in the area of conversion strategies, Professor Yves Bélanger who made a statement confirming my own conviction in the Le Soleil on April 16. He said the defence industry is not lacking in diversification ideas, especially given the fact that it gathered the greatest concentration of specialists attracted there by good salaries and research conditions.

And Professor Bélanger concluded that we must act quickly and adequately since recent experiences show that it takes from five to seven years to convert half a company's capacity from military to civilian production. We will necessarily lose some very important players along the way if the government does not act swiftly.

One wonders why the government does nothing; it certainly has the proper tool for it, namely the Defence Industry Productivity Program under the management of minister Manley and his department. It is the perfect instrument, the ideal vehicle for the implementation of a conversion program.

How come the minister has not found the vim to propose a schedule, and a concrete plan for addressing that problem which weighs heavily upon that important industrial sector?

Mr. Speaker, you have here a man who is demoralized by this negligence on the part of the government, but I want you to know that the fight will not end for us until the government presents a concrete program or schedule. It can be sure that we will continue to fight relentlessly as long as the government will not have produced a real program including a schedule.

The stakes are too high for Quebec for us to allow the government to fail to produce a work schedule by the end of the session. We challenge it to act on this, Mr. Speaker, and you can be sure that we will be watching it closely and urging it to exercise great caution.

[Dennis Mills, Liberal, Parliamentary Secretary to Minister of Industry]

Mr. Speaker, I begin by saying how disappointed I am that the member for Hochelaga-Maisonneuve does not appreciate the British humour of the Minister of Industry. This is something we on this side of the House are all quite proud of.

I want to tell the member for Hochelaga-Maisonneuve that we are committed to carrying out our promise to assist defence industries in transition from high technology military production to high technology civilian production.

The member knows, because this member is educated and he is very close to these issues, that this is not like buying a can of soup, putting it in a microwave and 20 seconds later it is ready to eat. This is a very complex issue. The exercise of converting these defence industries into industries that are going to be viable in peacetime is very complex.

The member should know that we are committed and we are working with several organizations, especially in Quebec. As he knows, in the February budget the DIPP program was explicitly targeted for redesign and we are working with many companies such as Oerlikon and Paramax, so I would ask the member to please bear with us.

I think by the time we return from China along with the member and 100 small and medium-sized businessmen from all over Canada who are going there with us, there will be even more action on the DIPP conversion program.

[The Acting Speaker (Mr. Kilger)]

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

(The House adjourned at 7.21 p.m.)