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.