Debates of May 5th, 1994

Supply

[John Manley, Liberal, Ottawa South, ON]

Mr. Speaker, I am afraid I could not answer that question off the top of my head but I will certainly undertake to get that information to the hon. member as quickly as possible.

[The Acting Speaker (Mr. Kilger)]

Resuming debate. I will take the occasion to remind all members on both sides of the House that for a member to be given the floor he must seek the floor and of course that means to rise at your chair. We speak about or refer to these unofficial lists that we have, which are somewhat helpful at times, but in the end members seeking the floor of course are those who will be recognized by the Chair.

[Bob Ringma, Reform, Nanaimo—Cowichan, BC]

Mr. Speaker, after reading the Bloc Quebecois motion, I have more questions than anything else. The motion reads as follows:

That this House condemn the government for its unacceptable delays in developing and implementing a genuine strategy for the conversion of defence industries-

This certainly raises questions. I am pleased to say first of all that some of my questions were answered by the first speaker, the Bloc critic, and also by the Minister of Industry.

Before listening to this morning's speech, I had decided that I should speak for the motion for one part and against it for another, based largely on the interpretation of certain key words in the motion.

In listening to the first speaker, the member for Hochelaga-Maisonneuve, some of the answers came clear to me. One was that first of all he was making a very Bloc Quebecois statement, one that is enshrouded a little in mystery. In fact, it was partly brought out by the Minister of Industry saying: "Why are they talking about this defence industry when their long term motivation is to withdraw and perhaps have no armed forces at all". That part of it is still a bit of a mystery to me.

I noted also that the speaker talked really only about Quebec. He did mention regionalism. I think regionalism is a very great consideration to all Canadians partly because we do not see sufficient consideration on the part of the government about regionalization or the necessity for developing different regions. We see a total concentration, it seems to me, on one at a time and giving way to political considerations rather than human or industrial ones.

The main question I had in listening to the Bloc spokesman was what is the motivation behind the motion. I think that came very clear that the motivation was to get money for industry in Montreal. I do not think that is sufficient. Perhaps it needs money. Perhaps it needs help. Perhaps it needs government leadership. However, to just say: "Let's have more money for Montreal or for Quebec" is not acceptable. It should be put in the context of what is needed in the rest of the country.

I heard the statement by the Minister of Industry in response. I have to say that the thrust of his statement was good. I did agree with a good part of what he said. He said there should be no question of just giving cheques to industry, that industry must take the initiative itself.

I would put a little caveat in here in saying that the government must show some leadership for industry, but the minister said it correctly in saying that the defence market has to take care of its own. It has to be market driven and, he said very clearly, there must be no major subsidies or bailouts. I could not agree more with what the minister says in that regard. He wound up in effect saying the whole process must be industry led. I agree with that also.

Having in a cursory manner described what I heard from both of these presentations on the part of the Bloc and on the part of the government, I have to admit that my own thought processes on this process were much more objective. I am looking at the context of the world situation, of Canada's foreign policy, Canada's defence policy and what industry has to do within that whole milieu.

Let us see how objective I am.

The motion introduced by the Bloc Quebecois refers to unacceptable delays in developing a genuine strategy.

My comment on that is that some delay is inevitable in that it must await the evolution of foreign policy and defence policy. That review is under way now. We will not see anything until the end of September. There is an inevitable delay there.

Having said that I have to criticize the government for some of its dealings with defence policy. For example, that it did a whole base closure program before the defence review was done.

That does not make good sense to me. I know the government was under the gun to save money. I agree with the government and compliment it in the sense that it has allowed the Department of National Defence to rationalize its own infrastructure. The government did well in that regard, but there is a certain backwardness to putting the closures ahead of the defence review.

Coming back to the motion, let us talk about the development of policy. Here the point to be underlined I would think is that government leadership is required. The government should be talking very seriously with industry, not but bailing it out but saying here is what we foresee, here is what is falling out so far from the defence review, which incidentally I understand is being done in a pretty non-partisan way by the special joint committee on that and good for them.

The government nevertheless can take some leadership here. It should be talking with industry, perhaps it is but we do not know about it, saying here is what we see in the medium term and the long term. Let us look ahead 5 years, 10 years, 15 years and let us build on the strengths of Canadian industry today as demonstrated in the field of electronics, communications, extrasensory perception-not ESP, sorry-but the remote sensing as practised by and developed by firms like MacDonald Dettwiler of Richmond. These are the areas where Canada is a leader. Government I think should be sitting down with industry and saying, fine, how can we exploit the advantages that we have in this country in these industries to give us a long term benefit of employment.

While at it the government should make a firm resolve to have no political patronage or interference once the policy has been decided. If you look back over a number of governments, Mr. Speaker, that is precisely what you will find. When the Bloc talks about contracts for Quebec, what I have seen from a western point of view is the scandalous putting aside the contract of Bristol Aircraft of Winnipeg on the F-18 maintenance and giving it through pure political patronage to Canadair in Montreal.

That sort of thing has to stop. I hope the government will take a lesson from the past and say yes, it is resolved to do that.

In the development of policy I would urge the government to do a continuous strategic review of our defence policy, update it from year to year. The government should not leave it hanging in the balance for five years at a time and then say, now we must do a review. It should do a continuous, ongoing strategic policy reassessment year by year so that we do not have to make these sudden shifts, some of which of course affect industry. If industry cannot see what the long term prospect is and be able to adjust year by year to smooth things out, it does not know where it is.

The final point in the development of policy is that I would encourage the government to please get more public input. The public of Canada is very supportive of defence and the armed forces in time of war, but it is not that supportive as it is uninformed during most of peace time. Therefore I would encourage the government please to get the public more involved in the review of policy.

We have been talking about developing policy. In implementing this policy the emphasis must be on industry rather than government. Again I take the words of the Minister of Industry and emphasize them.

Government must emphasize research and development. It has a role to play. We have a fairly sizeable research and development expense year by year in national defence. I suggest that it should be more tightly attuned to what is going on in industry to give us more bang for the buck.

I agree with the motion when it calls for more jobs in high tech. That is the direction in which we must be going. Look at what has happened in the past because of government policy. Look at the Avro Arrow. The Avro Arrow has been talked to death over the years but I would like to bring it back as a reminder. It had wonderful potential for Canadian industry but it was chopped and thousands of jobs were lost because of a political decision. That sort of thing should not happen.

Closer to our time, perhaps not as severe but nevertheless of high impact is the EH-101 helicopter decision. I understand clearly that the government of the day, the Liberal Party, as part of its election campaign, said that it would cancel the contract. It stuck to its promise. By sticking to its promise, it hurt the country and it hurt industry. I am not sage enough to say how the government could have got around breaking its promise but if it had had an all party review of that project, perhaps that would have given them the answer.

The predicament the government got itself into by cancelling the EH-101 contract is that it says: "Fine, we are probably liable to $250 million in cancellation charges" but the word is that perhaps those cancellation charges will be as high as $1 billion. Whatever the figure is, we have nothing for our money

and yet we still are going to have to pay out hundreds of millions if not billions of dollars to acquire a replacement helicopter.

The Bloc is talking about good paying jobs and high technology and they were there with the EH-101 contract. Ten per cent of the manufacturing of every helicopter produced worldwide would have been done in Canada. That would have meant a lot of jobs and a lot of money.

People will say that we are at peace. We are not at peace and I will come to that later. I remind members that some of the applications of this helicopter are peaceful as well as warlike. It had a naval version, a transport version and a passenger version and I think we are going to see more of this helicopter in the future.

I have heard estimates there is a market for 800 such helicopters. More recently I heard that the U.S. marine corps is thinking of buying 500. Think of the market that Canada has lost. Think of the jobs. Think of the high tech job creation we have lost by putting that behind us.

Let us talk generally about the defence industry. When anyone says defence industry it sparks emotion. It sparks emotion on the part of the general public which says it does not want a military industrial complex. I agree with the public that we do not want a military industrial complex that drives the government, such as we saw in the former United States model. We do not need that in Canada.

At the same time, however, we must be realistic and recognize that there is a defence industry. It will continue, we can be a contributor, and government should take its leadership role in asking industry what it can do best and how can government best encourage it without necessarily giving them dollops of money.

The idealism that gets involved, the exaggeration that is involved when one says defence industry, should really be moderated in Canada. It is too much of an extreme view when we hear people saying: "Oh, you can't even say the word defence industry because it is bad". The fact is there is a positive role for the defence industry, not just in employment but in creating new products for the good of all people. The government's role vis-à-vis the defence industry must be one of preserving a minimum base for that industry throughout the years ahead.

In this connection there is an organization called the Canadian Defence Preparedness Association, which I understand gave testimony to the joint committee in the last day or two. It has a real role to play with the government. Its objectives, if I may read it, are "to foster an industrial framework to achieve both the sustainment of forces in being and a modest mobilization capacity in times of conflict." I think that is a worthy objective.

What government can do in conjunction with a group like the Defence Preparedness Association and other defence minded groups is to look ahead and ask how they may co-operate. Can we have the production of aircraft, for example, that are stressed so as to land on rough terrain but have an application, a use, in time of peace but are available to the government, to the Canadian forces in time of emergency?

The answer, if the government looks long term, is yes we can have things like that. Can we have, for example, roll on roll off ferries that are in day to day use, let us say with B.C. Ferry Corporation in British Columbia, subsidized to a degree by the Canadian government? If we can have these used in peacetime but also available in time of emergency, we have something that is a good combination for peace and war, if you will.

There are other things that the government can do in its leadership role vis-à-vis organizations such as the Defence Preparedness Association. One such is legislation. It should be listening to these organizations and asking how we can best support the militia or members of the militia by ensuring that they have a job once they come back from either peacekeeping operations or militia training. Things of that order can be done.

Implicit in the Bloc motion, or at least my interpretation of it, is that we are now in a time of peace. If that is so, I have to say we are not there yet. You simply have to look at Rwanda, the situation in Somalia and the situation in the former Yugoslavia. You can look anywhere in the world and if there is no trouble there right now, you can see it coming in the future.

In summary, there is good and bad to be said about this motion. I was cheered by the reply of the Minister of Industry. I think the government is going in the right direction. However, government can do much more in the planning sphere to create jobs and to make better life for us all.

[Yves Rocheleau, Bloc, Trois-Rivières, QC]

Mr. Speaker, I would like to comment on what the hon. member for Nanaimo-Cowichan said about the F-18.

I think it would be a good idea to remind the hon. member for Nanaimo-Cowichan of the historical facts on the F-18. We need to place the F-18 events in their historical context. In this regard, we must remember that during the referendum debate, after our friends opposite got involved, in particular the hon. member for Saint-Maurice, who was already a minister in Mr. Trudeau's Cabinet, Quebecers were promised a carrot: "If you vote against the Parti Quebecois' proposal to give them the mandate to negotiate eventual sovereignty with all related commitments, we promise you, first of all, that the superspecialized F-18 will be built in Quebec". That was the carrot.

And I remember in the 1980s seeing follow-up analyses saying that, according to the experts, the promises were never kept. Either I misunderstood the member from the Reform Party or he does not know-that is his right-but I hope we will no longer hear such remarks, as though Quebecers' concerns were whims, to use once again the words of the hon. member for Saint-Maurice.

I would like to suggest to my dear colleague from Nanaimo-Cowichan, who is responsible for recruiting Reform Party members in Quebec, that such comments will not help him in his task.

[Bob Ringma, Reform, Nanaimo—Cowichan, BC]

Mr. Speaker, I obviously did not express myself clearly in English because the hon. member misunderstood me or he does not understand the F-18 situation.

First of all, there were no promises to build the F-18 in Quebec; it was to be built in the United States but a few parts would be built here in Canada. The contract I mentioned was only for the maintenance of this plane and it was awarded to Winnipeg-based Bristol Aerospace, which had it in the bag but, as the hon. member said, the government decided that it should still give Quebec something even if it lost votes in the West or upset Westerners. It did not matter; they had to give it to Quebec.

The contract was awarded for political reasons, and that must stop in Canada.

[Jean H. Leroux, Bloc, Shefford, QC]

Mr. Speaker, first I want to tell the hon. member that indeed, and Quebecers are aware of it, there are frustrations in Western Canada, where people may have the impression that Quebec gets more than its fair share. However, I want to remind the hon. member that, among large provinces, both in terms of population and size, Quebec is undoubtedly the province with the highest unemployment rate and the largest number of poor in cities. It is a state, or at least a province, where there are numerous problems. And I personally do not think that Quebec is asking for more than its fair share, far from it.

I want to point out to the hon. member one thing which was overlooked. If we proposed to discuss today the conversion of defence industries, and if Bloc Quebecois members talk more specifically about Quebec, it is because a consensus already exists in our province between the City of Montreal, the Quebec Liberal government, the unions and the Conseil du patronat.

Mr. Speaker, the situation in Quebec is such that we must absolutely find a way to ensure the conversion of this industry. As my colleague from Hochelaga-Maisonneuve mentioned earlier, out of 57,000 jobs, 11,000 have disappeared since 1988.

The situation is disastrous and even catastrophic. The Reform Party member did not say that we are in times of war, but he seemed to imply that there are conflicts everywhere. We must be serious and believe that it is possible to have peace. I think it is reasonable to say that we are less in danger than we were 20 years ago, and that the need for arms is also less than it was 20 years ago.

I find it somewhat unfortunate to think that we must continue to arm ourselves. In conclusion, I want to tell the hon. member that there are frustrations in the West. However, the Bloc Quebecois is well aware of those frustrations and we have a plan for the future of Canada which will eliminate those frustrations once and for all. Our plan will ultimately put an end to the constant bickering between us by creating parallel systems, in harmony. This is what Quebecers hope.

[Bob Ringma, Reform, Nanaimo—Cowichan, BC]

Mr. Speaker, I would agree with my hon. colleague that indeed we want to work side by side in peace not just with Quebec and all of Canada but elsewhere in the world.

Absolutely there is no one who likes peace more than a professional military person. Having put in my 35 years, having seen the terrible results of war, I could not agree more. Let us go for peace.

Having said that, I look around the world. I look at the two Koreas. I look at the situation in Vietnam and Cambodia. I look at Sri Lanka, the Tamils vis-à-vis the rest of India. I look at the Kashmir situation, Afghanistan, on and on. You cannot look at any part of the globe and say there is peace around the world because peace is not there. Therefore the assurance of peace is certainly being threatened. Anyway, that is getting far too much into philosophy.

We are aware of the unemployment problem in Quebec, but I wonder why the problem is more acute in that province. I believe Quebec has all the necessary tools: intelligent people, hard workers, industries, the river, transportation, everything.

So, if unemployment is more severe in that province, I wonder if it is not partly a matter of policy.

[Yves Rocheleau, Bloc, Trois-Rivières, QC]

Mr. Speaker, as industry critic for the opposition, I am very pleased to take part in this debate on a motion put forward by my colleague, the hon. member for Hochelaga-Maisonneuve, for which I want to congratulate him. His motion concerning industrial conversion reads as follows:

That this House condemn the government for its unacceptable delays in developing and implementing a genuine strategy for the conversion of defence industries to civilian production, which would save and create new jobs in high-technology sectors.

This motion shows how concerned we, in the opposition and in the Bloc Quebecois, are about this whole issue of industrial conversion, given the current situation.

You have to realize that the problem is very acute and the situation is very serious. During the last few years, defence expenditures have decreased. In fact, in only seven years, from 1987 to 1994, they have dropped by 10 per cent. According to some experts, defence expenditures are expected to fall by another 25 per cent in the next few years. This 10 per cent drop in activities has had devastating effects throughout the West. In Europe, for example, 600,000 jobs have already been lost. In the United States, 700,000 jobs disappeared in five years. By the year 2000, about 1.6 million jobs will have been lost because of the reduction in military production. Here, in Quebec, as was mentioned earlier, 10,000 workers in the defence industries have already lost their jobs.

According to some analysts, in Quebec, there are about 650 businesses directly or indirectly involved in military production.

Around forty of those are mainly and fundamentally involved in military production, a high-tech sector where much emphasis is put on research and development. So, we are talking about highly-qualified workers, who are highly paid, and, as you know, for every job in this high-tech industry, there are five indirect jobs.

Faced with this very serious problem, there is only one conclusion to be drawn. We urgently need a strategy for the conversion of defence industries to civilian production. The nature of manufacturing must be changed.

Here is Canada's position in the world market: in 1992, Canada was the eighth arms producer in the world, with a production value ranging from $3 to $7 billion, depending on the products. We should know that 70 per cent of these products are exported and that 80 per cent of our exports go to the United States.

In view of the reduction of military activity that was talked about earlier and that has caused the loss of 700,000 jobs in the United States, we can already see how the situation is threatening for Canada and Quebec, since the market is constantly shrinking.

Once again, that is another way of seeing the urgency of the situation and the need to redirect all military production effort at the present time.

We should also know that the federal government's intervention in military production has been specifically a type of intervention called the Defence Industry Productivity Program, better known as the DIPP. The DIPP is defined as follows:

The main mission of this program is to support businesses in the defence industry, mostly in aeronautics and avionics, to facilitate and consolidate research and development activities, to establish suppliers networks in by-products and components for these sectors, and to promote investments and exports in these high-value added manufacturing sectors. The objectives of the program are to assist defence businesses in remaining competitive in the world markets and the Canadian market.

In 1989-90, three years ago, the DIPP had a budget totalling $300 million.

In 1992-93, the budget was only $226 million, a reduction of a little over 25 p. 100. This means that Quebec received $168 million dollars in 1989-90, and only $80 million in 1992-93, a reduction of 52 p. 100, whereas the total budget has been reduced only by 25 p. 100. Given this, the Opposition now feels that this program must be revisited and that the DIPP mandate of military equipment promoting agent must be changed, so that part of this budget will be allocated to the conversion of defence industries into civilian production.

The Opposition is not saying anything new when making such remarks. For once that we agree with the Liberal Party, let us capitalize on that. I believe we agree with them more than they agree among themselves. This may be the difference between this side and that side. On this side, one can make remarks, on the other side, one must implement them. This is not always easy. Power is painful and difficult to assume. We understand it.

The press release of March 26, 1993 says a lot about the intentions of this government. This press release was cosigned by the leader of the Opposition, now prime minister, the present minister of Human Resources Development, the present member for Labrador and his colleague for Willowdale, who was then the critic for industrial affairs. It states three major commitments. "Expand the mandate of the Defence Industry Productivity Program (DIPP) of the Department of Industry, Science and Technology, which has a budget of $200 million, in order to add to it a support element that would facilitate the conversion and diversification to areas such as environment technology and advanced technology for peacekeeping".

Second recommendation: "The creation of a commission of economic conversion in co-operation with industry and labour in order to facilitate and co-ordinate the conversion of the military industry which today employs some 100,000 workers. Sign conversion agreements with the United States, which import 80 per cent of our military equipment production". And finally, "the conversion of military bases" which has already started. We can already see the position taken by the Liberals.

There is one aspect that I would like to draw to your attention because I think this is the source of the hesitation of the government regarding the role of the state in that area. Yet, the Liberal Party was very clear at the time, that is only 14 or 15 months ago which is not a whole life time.

I would now like to quote the second paragraph on page 3 of their press release: "The Liberal Party believes-and we are reliably informed that this is the cause of the hesitation of the government-, believes that the mandate of the state is to take initiatives that are in line with the evolution of the international scene and that create jobs for Canadians. A plan must be adopted to encourage our military equipment industries to turn away from that type of production and export. We commend the sub-committee of the House of Commons on arms exports which adopted our view in its report of September 1992 and made useful recommendations that were in good part inspired by liberal ideas".

Being consistent, the Liberal Party underlines this fact in its red book, which led many Canadians to support them especially in Ontario and in the Maritimes. The red book, on page 55, reads as follows:

The defence industries today employ directly and indirectly over 100,000 Canadians. The end of the Cold War puts at risks tens of thousands of high-tech jobs. A Liberal government will introduce a defence conversion program to help industries in transition from high-tech military production to high-tech civilian production.

Specifically, a Liberal government will expand the mandate of the Defence Industry Productivity Program (DIPP) to assist in a conversion and diversification.

That is what the Liberal Party says.

DIPP is the primary grant and loan program designed to influence the development of a defence industrial base in Canada. Administered by Industry, Science and Technology, it aims at developing defence technology and strengthening Canadian and North American defence industries.

So, the Liberal Party was already agreeing to fund the defence conversion using the DIPP budget.

Oddly enough, we have not heard a single word about that since the red book has been released, neither in the Speech from the Throne nor in the Budget Speech.

The Bloc position is more or less the same. I will explain it briefly. It aims at creating, in three steps, a conversion fund flowing from the industrial diversification fund. The fund would mainly consolidate and complement the assistance coming from existing programs in order to provide military facilities and businesses with adequate and long term support in their conversion and diversification process. It would also bring about consultative committees on conversion at local and regional levels, when the scope of conversion and diversification activities would warrant them. It would help in establishing an independent committee that would review the various existing programs that could be helpful and to put forward amendments and other improvements that could be required. That committee will propose a framework to ensure coordination between the different levels of government in order to avoid overlappings.

Besides, Mr. Speaker, I can remind you of the position taken by the Bloc that was largely inspired by the position taken during the campaign in the debate on the cancellation of the helicopters contract. The Bloc Quebecois supported the position of the Liberals, who sensed that power was within their grasp, and said that the contract should be cancelled provided that, let us not forget that, the money earmarked for this contract and the know-how needed to build the helicopters was transferred to a civilian project which would benefit a lot of people. The Bloc had clearly indicated that a high speed train linking Quebec City, Trois-Rivières and Windsor met both criteria.

Unfortunately, the government acted upon only one of those two recommendations, and cancelled the helicopter deal. Since then, Canadians and Quebecers have been left hanging, without any compensation whatsoever.

Therefore, DIPP should be modified so that, instead of promoting defence production as it does now, it helps military industries to convert to civilian production.

One must realize that, in Quebec, there is a solid consensus among all the stakeholders in this vast project, including the Quebec government which has expressed its impatience several times already through its Minister of Industry, Trade and Technology, Mr. Gérald Tremblay. No matter how federalist and Liberal he is, he did not mince his words and said, on April 11 last:

In its red book, the federal government promised to make available to DIPP, significant sums of money for converting defence industries to commercial production. We are presently negotiating with the federal government. We want to know how much money will be made available, when and for which company.

These are the very words spoken by the Quebec Minister of Industry, Trade and Technology.

The Conseil du patronat du Québec, which-you will admit, Mr. Speaker-is not necessarily a natural ally of the Bloc Quebecois, is another stakeholder. A few months ago, precisely in September 1993, it held a symposium entitled "Rendez-vous économique 1993", and came up with two main recommendations pertinent to our present debate. Recommendation 31 said that the federal government should provide adequate financial support for the conversion of industries dependent on military contracts.

This financial help would last as long as it takes to adapt, convert and diversify defence industries.

The implementation of conversion and diversification activities would be planned by conversion committees, made up of representatives from industry and labour in the affected communities and representatives from the Government of Quebec. This is the position of the Conseil du patronat which, in its first

recommendation-and this is very relevant to the concerns of the Official Opposition-said that the federal government should give MIL Davie a contract for about $6.5 million to design, and then another contract for $200 million over three years, according to the figures of the Conseil, to build a prototype of the "smart ship" we hear so much about.

This ship would fill urgent and recognized needs of some federal departments, but it would also be the prototype of a series of similar ships for the international market, a promising and expanding market. This is the position of the Conseil du patronat, but it is supported by the CNTV and the FTQ. So, the Government of Quebec, the Conseil du patronat and the two largest unions in Quebec all agree on that point. The CNTV said in a press release dated October 31, 1993:

Between 1987 and 1992, Quebec lost 11,000 of its 57,000 jobs in the military sector. Jobs are still disappearing. Since more than 60 per cent of contracts are awarded to companies in the Montreal area, it is essential that forces stick together to obtain a realignment of government industrial policies, especially in the military sector which comes under federal jurisdiction.

Two days earlier, on October 29, Mr. Fernand Daoust, then president of the FTQ, had said:

Considering that the future government wants to cancel the helicopter contract, we want to know the projects which will be put in place to provide the 8,000 jobs for 12 years that the Prime Minister is going to abolish without serious analysis of the issue.

As we were told a moment ago, the decision to cancel the helicopter contract, without any compensation, demonstrated a total lack of vision.

To show you how serious the situation really is in Quebec, I will quickly give you the level of dependency of companies. Let me name a few just to show how serious the situation is: Bendix Avelex Inc. depends on military contracts for 70 per cent of its production; Canadian Marconi, 55 per cent; Héroux, 80 per cent; MIL Davie, 91 per cent; Oerlikon and Paramax, 100 per cent in both cases and SNC Technologies, 95 per cent.

As far as job losses are concerned, Bendix lost 350 jobs, Anachemia Canada Inc. 68, Marconi 1,480, MIL Davie 2,740, Oerlikon 410, Expro Chemical Products Inc. 300, Héroux 131, Paramax 1,000, Pratt and Whitney, 200 and I could go on and on; Vickers lost 350 jobs.

This goes to show how much we hope the government will abide by the promises it made to the public; when governments shamelessly treat commitments that way, I think we have a right to be worried about democracy. It could mean they can say anything to the constituents but after election day, fight shy of their commitments and I think this is very serious. When we speak like this, the figures do not seem like much but we must remember that when we talk about unemployed people, we are also talking about human lives, families, careers, educated people leaving the country, brain drain or the outflow of know-how.

Somebody told me this morning we can even use the term hemorrhage. In my view neither the economy of Quebec nor that of Canada can afford such a hemorrhage.

In conclusion, if, as we wish, the government takes action to help the DIPP and point it in a new direction, I hope it will do so according to generally accepted practices and will respect conventions. The minister mentioned it before, it is not enough to talk about manpower adjustment committees; I know these committees, I worked with them for eleven years; they give good results in traditional circumstances.

The money given must be administered by committees where the employer and the union concerned will be duly represented, along with representatives of the region. The context must be considered and the government of Quebec has to be consulted, since it is very sensitive to that issue and very interested. These committees must study the situation on a case by case basis, according to the type of activities carried out until now. Indeed we must realize that manufacturing ammunition and making satellite telecommunication devices are two operations that are very different.

These committees should examine the situation, ensure that a dialogue is initiated and reach a consensus about the new orientations and the changes that need to be made to everyday management practices. This is a proven formula that should work. I really hope the government will act upon the positive proposal put forth by the opposition today, which is to see that the situation improves. It particularly makes sense if we recall the government's pretensions, with its slogan "jobs, jobs, jobs", and the 11,000 jobs lost in the high technology sector. We have to demand a minimum of consistency on the part of this government.

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

Mr. Speaker, I begin by saying to the member that the unemployed people of the member's community are as important to us as people in any other community in this country. Whether it is someone unemployed in the defence industry or any other sector of the economy, we feel that it is our responsibility as a government to do our very best to put everyone back to work. That was our campaign, putting people back to work, and we are looking at this in a comprehensive way.

I want to pick up on something that the Minister of Industry said earlier in his speech. It had to do with the responsibility of management of defence industries to develop a strategic approach and to look at new markets for new opportunities for

their highly skilled and highly trained staff. I think that he hit on something that is very important for all of us to dwell on.

I go back to an experience I had when I was in the private sector for a while after I left here in 1984. I worked for a multinational organization called Magna International. There are many unique qualities of the Magna Corporation. One of the unique qualities of the management team that I noticed at that time was it began a conversion from defence production in 1982. In 1980 it was an organization with about $400 million to $500 million in sales. About one-third of its sales were in defence related products, radar systems and machine guns.

I think most people would recognize that in terms of the quality of its products it is probably ranked with anyone in the world. In 1982 the directors of Magna said: "We are going to do a full conversion into the automotive parts manufacturing sector". It was a very tough transition period. It was tough for management, tough for the toolmakers and tough for everyone on the shop floor. They were entering, even though there was some foundation experience because the company had been in the automotive parts business for about 25 years at that time, into a whole new field because the technology in the automotive parts business was becoming very sophisticated with computer aided design and computer aided manufacturing. The management team at Magna decided that it would move into the new economy, become highly specialized, get the latest equipment, develop systems and components, and be the most competitive in the world.

This story is not based on theory. Over the next 10 or 12 years we saw a company grow from about 3,000 employees doing about $600 million in sales to today where it is employing approximately 20,000 people and doing over $4 billion in sales. The relevance of this example is that the leadership of the corporation took the leap into the new economy, searched for new markets and searched for new products.

I had the pleasure of working there for two years from 1984 to 1986. What impressed me aside from the conversion and the commitment to the conversion of the highly skilled staff was the management shift. Management moved out of the traditional markets of North America in terms of the auto industry because prior to the conversion from defence most of their orders were going to General Motors, Chrysler and Ford. When they decided to do the full conversion they knew they could not just rely on those three manufacturers of automobiles.

The leadership of that company went to Japan, went to Toyota, and said that it had a company that could make a quality product at a price as competitive as Toyota. It asked for an opportunity. It said that it had the highly skilled staff and the technology. Lo and behold it was successful. It brought back orders from Japan and Germany.

That is a principle or an approach many companies in the defence industry have to look at. That was the point the minister was trying to make today in part of his speech.

It is not a question of the government saying that it would not help or that it would leave them alone. The minister said in his speech that DIPP would be redesigned and would be more on a loan basis. We are also using other instruments of government for support like the Export Development Corporation. That is the kind of message members of Parliament have to communicate to industries that are having a difficult time making the conversion.

It was interesting that as I was sitting here a couple of other examples were brought to my attention. The story of Securiplex Technologies of Montreal is about the successful conversion of a company that was well established in the defence industry. Recently it obtained a $26 million order for a control system from Bombardier in Belgium.

There is another example. ATS was founded on Montreal's south shore in 1979. It originated as a small company specializing in the testing of ammunition. Recognizing the fact that it had limited business opportunity, the company sought to take its considerable expertise in developing software systems to new markets.

Today the original business is history. The future of the firm is in an entirely new market that it could claim to have invented: the simulation of air traffic control towers and control rooms. There is an incredible market all over the world for this company that reinvented itself.

We inherited a very difficult fiscal framework. The minister said in his remarks that during the campaign we talked of some $30 billion in deficit and now we are hitting over $40 billion. This is a shock to the budgetary system of the country very few of us expected.

When I say leadership I do not just mean the chief executive officer. I mean the production manager, the lead tool maker and the people on the shop floor. Securiplex, Magna and ATS had to take on a leadership thought process. Companies going through conversion should do this, along with having a redesigned DIPP and the banks beginning to look at the new economy and knowledge based industries. We have heard time and time in the last two to three weeks in the industry committee that the banks were beginning to look at small and medium sized organizations, not at the strength of their balance sheets but at the strength of the mind and the character of the persons involved.

When we are dealing with companies going through this very difficult period we have to help them along the path to new hope by showing other examples. I say to the member for Trois-Rivières, as a former employee, as a former senior officer of Magna, that I know the former chairman went many times to help companies in Quebec with conversion. Today there would be leaders in Magna who would be happy to share their experiences with companies in the member's riding that might be having difficulty in making the conversion.

Companies that basically were successful making the conversion remember the pain. They remember the experience. By and large most of them are willing to share it. That is the type of direction we have to take.

I hope the member realizes that we cannot write grant-type cheques for any industry in trouble. We do not have the room to do so because of our tight fiscal framework, but the minister said that DIPP was being redesigned to become more of a loan situation. We will help them through it in that way, combined with other resources. I believe that is the approach we must work on over the next conversion period.

[The Acting Speaker (Mr. Kilger)]

Questions and comments. I recognize the hon. member for Trois-Rivières.

[Some hon. members]

No, no.

[Some hon. members]

Yes, go ahead.

[The Acting Speaker (Mr. Kilger)]

Order, please. The hon. parliamentary secretary may have directed questions to other hon. members in his remarks, but having concluded his remarks, if the hon. member for Trois-Rivières wishes to ask a question or make a comment on the hon. parliamentary secretary's remarks at this time, he has the floor.

[Yves Rocheleau, Bloc, Trois-Rivières, QC]

Mr. Speaker, I cannot help but disagree with what my distinguished colleague just said because it contradicts the Liberal Party's own platform.

In view of the disastrous economic situation we are facing, with 11,000 high-tech jobs lost in Quebec alone over the past five years, we are being told that it concerns only the private sector. Personally, and it was also the Liberal Party's position last fall, I consider the public interest is at stake and that the state-and I could quote again from the document I read earlier-should play a leading role in promoting recovery.

What we are saying is not to spend without thinking, but rather-that is at least how I see things personally-that the minister should ask companies where jobs are continually lost because they are no longer able to obtain contracts: "Where is your conversion plan? Show us a decent plan, a plan that is well thought out, well structured and pragmatic, a plan with a vision and we will help you."

The government's present position however is more along the lines of washing its hands of the matter, leaving it up to free market and free competition and relying on companies that have proven more innovative than others such as Magna International Inc., a Montreal business mentioned earlier. Perhaps these companies have had a keener eye, more business acumen and more vision. Perhaps not all companies are to blame, but I think that this government has the duty to question these people in the public interest, because we cannot let this go on, with engineers and skilled technicians finding themselves out of work and possibly getting ready to put their skills to the service of foreign economies. Our economy may never recover from that.

I think it is the role of government, not only that of the private sector, to manage the economy sensibly, like a reasonable man as we used to say. The Liberal Party said, and I agree: "The government obviously has a social responsibility in this matter."

[Dennis Mills, Liberal, Broadview—Greenwood, ON]

Mr. Speaker, I guess I have not put enough emphasis on government participation for the hon. member. I was not saying that the government should walk away and not assist businesses in the process of conversion. We never have. I was suggesting that the balance should be one where we do not ignore other success stories in the conversion process.

In other words, as a government we should not think we are the only ones who have the solution. We will aid. We will support. We must bring into the discussion people who have already had success in the conversion exercise.

The member is not opposed to that. My point is that we have to start. We have to make sure that we do not create a sense of false hope. In other words we are not running away. However it must be much more of a joint venture with government giving advice, government giving some form of assistance where possible, maybe not in grants but through some loan guarantees and bringing in other experts who have achieved success. That is the point I was trying to make to the hon. member.

[Yves Rocheleau, Bloc, Trois-Rivières, QC]

Mr. Speaker, I agree with the hon. member that this is a complex issue. That is why, as I mentioned in my statement, we must approach it as tactfully as possible, and abide by the rules. We must call upon all existing resources of businesses that have already had the foresight to proceed with conversion. These resources should be used by businesses planning to convert. As I said, when a business intends to convert with the help of the state, all

stakeholders must be genuinely and completely involved, that is the employer, labour unions and regional players because this process can sometimes have a tremendous impact on a region. The Quebec government must also be involved because of its thorough knowledge of this question within the Quebec context.

Of course, this does not preclude-and this is the way the issue is set out-seeking out all those who have some expertise in this field to help speed matters along and ensure that case by case, the situation improves and production is geared to new markets. I think this is one point on which we all agree.

[Dennis Mills, Liberal, Broadview—Greenwood, ON]

Mr. Speaker, we are beginning to agree. The approach that the member for Trois-Rivières just suggested is essentially what I was trying to communicate in my remarks.

As the minister said, we need to develop a strategic approach and that is what we are attempting to do. We cannot just look at these difficulties in isolation from the work that the minister of human resources is doing. It cannot be looked at in isolation from what the industry committee is doing or what the Minister of the Environment is doing.

In my view we have not spent enough time today talking about the potential in environmental technologies. We must become a nation that measures its strength not by its armaments but by our environmental technologies. That is an area where I think most people would agree there is terrific potential.

There is another thing, a final point I want to make. This is actually a plug. On May 17 a group of members of Parliament from both sides of the house, 10 of us, are going to Beijing with people from over 100 small and medium sized businesses, not the big businesses that tend to go on these missions. We will be looking for new markets, new opportunities.

We all know that the Asia-Pacific region is just exploding with opportunity especially for small and medium sized business. There might be all kinds of opportunity for people who are currently in the conversion process and looking to that region of the world for new markets and new potential.

As the Minister of Industry said earlier this morning, it has to be a comprehensive approach. We have to get the financial institutions on side. The Export Development Corporation has to be working. The human resource component is helping people get retrained for the new economy. We have to beef up our ability to go out and sell abroad. We are not very good hustlers in this country. We tend to be staid. We are not as aggressive as some of our American friends to the south or the Germans or the French. One of the things that we as parliamentarians have to do is encourage our small and medium size business community to hustle a little more beyond the boundaries of Canada.

I realize I only have a minute, but that is something that we as members of Parliament can do to support the small and medium size business sector. We go with them.

The only problem that I have is that members of the Reform Party do not want to come with us when we take these small and medium size business people on these trips to try and forge new markets because they do not think these trips are that productive. However, I hope eventually they will see that they are very important to the small business community and they are not junkets.

[Laurent Lavigne, Bloc, Beauharnois—Salaberry, QC]

Mr. Speaker, I am pleased to speak today on the motion before us. First of all, I would like to say that last week, on an opposition day, we had a motion with which I showed the Liberal government's inaction on agriculture. I spoke last week to show, with supporting figures, that this government was really not doing enough about agriculture in Canada, especially in Quebec.

This week, we are speaking up to denounce again this government's inertia on the whole issue of the conversion of military industries to the manufacture of useful civilian items. I care about this issue and that is why I chose to participate in the proceedings of the defence committee, to look at the whole issue of defence more closely. What interested me on the defence committee was the whole issue of the conversion of military factories to civilian uses.

To my great dismay, this famous committee has met at least fifteen times, if not more. First, I must say that there was a standing committee, which I joined, and then the government called for the addition of a joint committee, made up of MPs and senators, besides the standing committee on defence.

At every meeting I attended of either committee, I always added the whole question of industrial conversion to the agenda because it was never there. Every time I asked the question on one committee or the other, they wondered whether the defence committee was the one to deal with conversion and today they again raise the question as to whether the defence committee will discuss conversion or will pass it on to the industry committee.

It is total confusion now. In the end, we do not know which committee will have to deal with defence. The government has already been in office for six months. Many military factories, especially in Quebec, have to work with their employees every day to try to keep those jobs, and we are still discussing which committee, the standing committee on defence or the joint committee on defence or the committee on industry, is to deal with industrial conversion.

I noticed that the joint committee was much more concerned with preparing trips to Oslo, Brussels and eastern and western Canada. Take a good look at the schedule of the joint committee for the coming weeks and months, Mr. Speaker, and you can see for yourself. I think that five, six or seven trips have been planned to see how other countries in the world go about defining a new defence policy. I have nothing against that but, in the meantime, there are men and women working in our defence factories and we should talk about conversion for their sake. Meanwhile, we are discussing the trips we will have to make to see how other countries deal with the end of the cold war, how they will redesign their defence. This may have to be done but not at the expense of conversion.

Certainly, since the end of the cold war, people throughout the world are calling for a disarmament and peacekeeping policy rather than an armament policy. And this makes me the happiest man in the world. If every country in the world could pursue a disarmament and peacekeeping policy, I think that, as the evidence shows, disarmament and not war makes people happier. Except that it has major economic repercussions.

We know that for many years the richest countries in particular built defence factories to arm themselves. They armed themselves to the teeth. Until the east bloc collapsed, we lived with the stress of the cold war between east and west. In the meantime, of course, our defence factories were kept busy. People were hired to make ammunition, guns and shells. They were working but not, in my opinion, for a good cause. I prefer disarmament to armament and so much the better if we are already there. Except that, as I was saying earlier, one of the economic repercussions of disarmament may be unemployment. It has already started.

But, at that time, the government was proud of the factories making its guns, ammunition and shells. And it was making them work at what was called "cost plus". They were told, "Make the equipment and we will pay you whatever it costs". Since these plants could take the time they wanted or just about, the workers were not very efficient because they were not competing against other countries.

The country that had built these plants bought the equipment at cost. So if workers took one and a half instead of one month to make a gun, they were paid for a month and a half. Consequently, defence industries now wanting to switch to civilian production have to improve the profitability of those new products which will compete on the market.

I listened to the Parliamentary Secretary to the Minister of Industry and he seemed to evade his responsibility by saying that the issue concerns the private sector and not the government. Yet, the government was quite pleased to have these industries when it needed them. Now that it does not have the same need for these companies, it lets them down. The government has a duty to ensure that these defence industries are able to switch to civilian production.

As you know, arms production has been experiencing difficult times since the late eighties. This is an enormous market estimated at over $450 billion worldwide. Indeed, it is a market which involved billions of dollars. There has been a drop since 1987, and especially in 1994. It is expected that this $450 billion figure will drop by 25 per cent in the next few years. As a consequence of that pattern, 600,000 jobs have disappeared in European defence industries since 1987.

In the United States, the figure is 700,000, while in Quebec the drop is proportionally the same. This sector is in a state of collapse. It is being abandoned but the government cannot let down all these plants, employers and employees, chemists, engineers and qualified workers after using them for its needs and the needs of its military forces.

Now that we no longer place orders, we do not have the right to abandon these industries. That is why I urge the government to take money out of the defence budget, or the environment budget, or any other budget for that matter, since it all comes out of our pockets anyway, and to use that money to provide these plants not with hand-outs, but with assistance in areas like research, development, expertise, or capabilities. I urge the government not to let these plants down, because in the next few days, weeks and months, these plants will need to turn around their whole production.

The jobs in those sectors were mostly in Quebec, and especially in the Montreal area. The impact on its economy is significant. The cancellation of the famous helicopter deal did hurt for sure, but we, in the Bloc Quebecois, were all for it, except that the government forgot one thing. After cancelling the deal, which saved Canadians $5 billion to $6 billion, the government should have used parts of the savings to set up an Industrial Conversion Assistance Fund, which it chose not to do.

The government let the defence industries down and pocketed the $5 billion to $6 billion it saved by cancelling the helicopter contract. Yesterday, I was watching televison and I saw the prime minister who was taking stock of his first six months in office, and bragging. He said "one of our first achievements" is the cancellation of the helicopter deal, which he had promised to do during the election campaign.

And at one point, reporters asked the Prime Minister who had just enumerated his good deeds if he did not make mistakes. The Prime minister scratched his head and said: "I cannot think of any."

If I had been next to the Prime Minister, I would have whispered this to him: "Mr. Prime Minister, during the election and even before that, when you were in the opposition, you gave us a lot of hope and made a lot of great promises concerning industrial conversion programs and when you cancelled the helicopter contract, you should have proposed that program, but you did not." That is a mistake the Prime Minister should have mentioned to the reporters, yesterday, when he was taking stock of his first six months in office.

The Prime Minister and the Liberal government on the other side have so-I am tempted to say-lied to us, if I may, although it may be too strong a term in this House, but this is almost the case. I could quote government members when they were in the opposition, as well as provincial members. When it was in the opposition, the Liberal Party was a keen advocate of conversion. They wanted an assistance program that would help businesses to take over other markets than the defence market.

So, they promised to develop a program to help businesses move away from military production. The Liberals reiterated their promise in the red book. Almost every day in Question Period, the Prime Minister continuously refers to his red book and the need to create jobs, jobs and more jobs.

And yet, once in office, all these good intentions went unheeded, so much so that even the Martin budget said nothing about a conversion program for defence businesses.

On the other hand, the Prime Minister speaks a lot of his famous infrastructure program. If it creates jobs, that is great.

The infrastructure program will create about 45,000 jobs. But what good will it do to create 45,000 jobs, temporary jobs that will last six months or a year, if the government allows 60,000 existing jobs to be lost in our military industries and allows plants to close permanently? I think that the government could have kept a portion of the one billion dollars it will invest in its infrastructure program and used it to help the 60,000 workers in the defence industries keep their jobs. What good will it do to create one job if two are lost elsewhere? We are not moving forward by doing that, we are going backwards.

On March 26 1993, some MPs, namely Mr. Axworthy, Mr. Rompkey and Mr. Peterson, said-

[The Acting Speaker (Mr. Kilger)]

Order. I simply want to repeat once again that, in this House, people must be referred to by their title, such as parliamentary secretary or hon. member for such-and-such a riding, and not by their name.

[Laurent Lavigne, Bloc, Beauharnois—Salaberry, QC]

Mr. Speaker, I was not sure if I should name them, but I am reading a text dated March 1993, when these people were not in government. Anyway, it is these three Liberal members, who were in opposition at the time, who said that the military businesses assistance program had to be reformed for the conversion of these businesses to civilian production.

They said jointly: "It is necessary to expand the mandate of Industry, Science and Technology Canada's $200 million Defence Industry Productivity Program (DIPP) which is aimed at developing defence technology". There already is a $200 million assistance program for military businesses, but as the members said at the time, it was necessary "to add to that program a new component that will help the industry convert and diversify into areas such as environmental technologies and high-tech peacekeeping technologies". The Liberals said that. They were encouraging our defence industries to penetrate the environmental sector.

Let us take as an example a business in the riding of Beauharnois, Expro, which manufactures gunpowder and shells and which, for the past few years, has been taking part in a soil decontamination program. Those people are now struggling to survive, since 70 per cent of their orders were government defense production orders. Now that they hardly get any such orders, they have to redirect their operations. They are now working on a soil decontamination program, which is related to the whole question of environment.

However, they need support, they need studies and research, and the government could and should get involved in that area. Otherwise, what will happen to those people who worked for many years at making gunpowder and shells and who are hardly making any today? We know also that the company had major sales on the United States market; they had many orders from the United States. But the Americans too are tightening their arms program and have significantly reduced their orders, and therefore the orders for Expro are going down.

Going further than what the Liberals were saying when they formed the Opposition, the present Prime Minister did not hesitate to say that defence industries were industries of the past. Liberals were saying that Canadians deserved a government that could show the way, a government that could bring forth new ideas and new strategies, a government that could help them adapt to change.

The defence conversion policy is an example of how a Liberal government intends to meet the needs of Canadians in the 1990s. That is what the present Prime Minister constantly repeated during the campaign and when he was Leader of the Opposition.

After having said such things, it is unacceptable to abandon the defence industries that cry out for government assistance. The government is turning a deaf ear to their pleas.

Finally, the then opposition critic for Industry, Trade and Commerce admitted realistically that unless we develop a defence conversion policy for the 1990s, we could lose tens of thousands of jobs. If the present Liberal government is aware of all that, why does it not take action? They said so, they seem to have all the relevant information, they are aware that we will lose jobs, that we are already losing some-11,000 have been lost already-and it is escalating, but they take no action. During the last campaign, the key words for the Liberal Party to get elected were jobs, jobs, jobs. The government should make an effort in that area, they should give more assistance by making funds available to help defence industries make a conversion they are only too willing to make.

[English]

[Jan Brown, Reform, Calgary Southeast, AB]

Mr. Speaker, these are comments of a general nature. The hon. member may wish to comment and he may not.

It seems to me when we stand in this House and challenge the government, there is also an obligation upon us to provide some constructive alternatives as to how government approaches the matters of the day, the problems and issues facing all of us.

In the hon. member's statements for example he mentioned that the military industry is an industry of the past. That may be true but an alternative, and one perhaps the government should look at soon, is to redefine the role of the military in Canada.

Rather than challenging and saying the government is not doing anything, it would be far better to say it is time that government looked at some alternatives for using our military personnel. It should look at how our defence industry can be changed to meet the new environment in the global considerations facing us today. There was not a single constructive alternative for Canada that I heard in the hon. member's presentation, not a single one.

The hon. member is asking questions about conversion, but what about the root problems that face Canada today: high taxation, a huge debt, an unstable dollar, an insecure economic community, high unemployment. There was not a single thing I heard that was a constructive alternative to addressing those issues and those are the root problems facing Canada today.

We can talk about committees in this House that dither around in deciding that maybe they will do this today, maybe they will do that. Maybe it will be the defence committee that will look at the issue today or maybe it will be trade and industry. However it is our obligation and responsibility as members of this House to start looking at some of those root problems. We must start providing the government with some constructive alternatives rather than standing and complaining about a particular position Quebec is dealing with. Unemployment in Quebec is every bit as much an issue for all of Canada.

I would like the hon. member to respond to those comments if he so wishes. I would be interested to hear what the hon. member has to say.

[Laurent Lavigne, Bloc, Beauharnois—Salaberry, QC]

Mr. Speaker, the hon. member who asked this question could read everything the Liberal Party said when it was in the opposition.

All the alternatives are there. In my remarks, I blamed the government for its inaction. I did not criticize it for not doing the impossible. There are indeed ways to ease the conversion of our defence industries. The Bloc Quebecois suggested the establishment of an assistance fund. Incidentally, the Liberal Party agreed that such a fund should be set up to help the conversion of defence industries. Labour unions, the CNTU and the FTQ, and the Quebec Liberal government are waiting for some action on the part of the federal government, but I am sorry to say that nothing is forthcoming.

In my riding, there is a plant that manufactures shells and gunpowder. Purchases by the Canadian army represented 70 per cent of its order book, but the Canadian army is buying less and less. That firm decided to convert its operations to cleaning up contaminated soil. It has professional engineers, architects, and chemists. A whole group of qualified employees work on that project, but they need government support. They do not necessarily need money, maybe just technical help, but they do need it. Yet, the government turns a deaf ear to their requests. True enough, we have a $500 billion debt, and we should not let it increase unduly. But we are letting unemployment rise. In the manufacturing industry, we lost 11,000 jobs in the last four years.

The government spends $1 billion without flinching to create 45,000 jobs, supposedly, through its infrastructure program. We are not asking the government to spend $1 billion on restructuring defence industries, but only to offer some kind of help to the people in those plants. Waiting for the plants to close and creating more unemployment is not going to help the economy either.

We already have much too much unemployment, so this government should make it its duty to help the workers whose job is at risk before they lose it. As I was saying earlier, what good is it for the government, with its infrastructure program, to create jobs, on the one hand, if it does not help the defence

industry workers and loses twice as many jobs, on the other? That is not progress, it is a setback.

[Patrick Gagnon, Liberal, Parliamentary Secretary to Solicitor General]

Mr. Speaker, it is a pleasure to be given this opportunity to rise on this issue which is extremely important for many Quebecers.

I would like to thank the hon. member opposite for drawing attention to the future of defence industries. Over the years, these industries have been creating many jobs in our province and will continue to do so.

The future prosperity of defence industries is essential to Quebec's future prosperity as a part of Canada and North America. Quebec and its industries can adapt to technological changes and developments that are occurring in the world.

Once again, I congratulate the hon. member for the interest that he is showing in asking this question, and I would like to speak on that major issue for a few minutes.

In defence industries in Quebec, there are many small businesses and less than 20 medium or large businesses. These industries are very concentrated and the majority of sales are made by medium and large businesses.

All these businesses, regardless of their size, have seen their defence product sales progressively decreased over the last years. And, in view of the shrinking of international military markets that is projected, we can assume that this trend will continue.

Sales of defence products on European markets have radically decreased, causing the loss of 150,000 jobs in the last three years. This represents 10 per cent of the labour force in the aerospace and defence sector.

In America, the experience is similar with large reductions in military procurement matched by significant job losses, more than 3,000 in the last three years. Both European and American industries have been faced with a serious industrial adjustment problem. In various countries, the government has responded in various ways. It is tempting to look to solutions such as those proposed in the United States for the problems facing Quebec's aerospace and defence industry.

I believe we can learn from others. I am confident that some of the lessons we might learn from others in defence industry conversion are universally acceptable. For example, there are a number of internal and external obstacles to defence industry diversification and conversion. These include a narrow client base, lack of experience in export or commercial markets, over-engineered products and small product runs. External obstacles include shrinking global defence markets, difficulty in attracting capital and market protectionism among others.

The various approaches adopted worldwide by governments to deal with their defence industry conversion problem all address these common elements but the approaches are often tailored to the particular circumstances unique to their defence industries.

As a general rule, none of these programs envisage getting out of military markets. Instead the first goal of diversification is normally to retain a viably industrial base. Many governments have dealt with this issue in a regional or community perspective and have given their support accordingly.

Many of them have set up committees where all parties concerned are represented, including governments, unions and the industry. The so-called dual use technologies-that have both civilian and military applications-are often a criterion on which governmental assistance for research and development is based.

One of the key objectives of all those programs consists in maintaining knowledge-based industries and quality jobs related to the high technology which is part of those industries. The efforts we are making to help in the conversion of the defence industry in Quebec are within the spirit of that objective.

Even though several of the approaches that I have just described could apply to the Quebec defence industrial base, I think that it would be wrong to use, for example, an American-style solution in Quebec. There are some noteworthy differences in the conversion of the defence industrial base in Quebec, in the United States and in other parts of the world like Europe.

Basically, the conversion of the Canadian defence industrial base in Quebec is different and unique. Many Canadian defence industries in Quebec could be described more appropriately as aerospace and defence industries because, unlike many other countries, Quebec has diversified a lot of its production. It produces a great variety of commercial products and, of course, defence materiel.

The Quebec industry is different, too, in another important area. The aerospace and the defence industries sell many of their products and services to world markets. Therefore, in order to succeed, it must produce first quality materiel at competitive prices. Like other Canadian industries in the aerospace and defence area, Quebec industries are looking for a ready market for high-tech products. They export sub-systems and components that are sold mainly to principal contractors in the aerospace and defence materiel area all over the world.

This is remarkable. A country as small as Canada is sixth in the world for the sales of the aerospace and defence materiel sector, which exports between 70 and 80 per cent of its total production. We should be proud of those dynamic firms and their workers who bring a high contribution to the economy of the province of Quebec and of Canada.

As my remarks show, Quebec industries in the area of aerospace and defence materiel are different in several regards from similar industries in other countries. I realize that several aerospace and defence materiel industries are facing an uncertain future in the years to come. Nevertheless I have reasons to believe that because of their achievements, the aerospace and defense materiel industries in Quebec are able and willing to meet that challenge.

I hope I have clearly explained today the significance of recognizing the unique character of Quebec industries in the aerospace and defense materiel area. By building upon their relative force compared to the majority of the industries in the rest of the world, Quebec industries are well on the way to the diversification of their production and the conversion of their technology.

As was announced recently in the budget, the federal government intends to change the Defence Industry Productivity Program in order to support the changes that the Quebec industry of aerospace and defense materiel is carrying out. I am confident that support from the federal and provincial governments for Quebec's aerospace and defence industry will help create the proper environment for the changes to continue.

As I said before, given the very unique situation existing in Quebec, it is probably not appropriate to think about implementing solutions adopted in Europe and the United States. We all recognize that production diversification in the defence equipment industry presents many challenges. As we said earlier today, the task is not an easy one and there are no miracle cures. But it certainly does not mean problems are unsolvable. There is a solution and there will always be one.

Some major efforts are being made in the private sector in Quebec and they benefit the aerospace and defence equipment industry. The government will continue to fully support those efforts to make sure this industry can continue to face the challenges and seize the opportunities which will arise in Quebec, in Canada and all over the world.

[The Acting Speaker (Mr. Kilger)]

I would like to know if the Parliamentary Secretary to the Solicitor General still intends to share his time with the Parliamentary Secretary to the Minister of Transport.

[Patrick Gagnon, Liberal, Bonaventure—Îles-De-La-Madeleine, QC]

Yes, Mr. Speaker.