Debates of June 2nd, 1994

Supply

[Yvan Loubier, Bloc, Saint-Hyacinthe—Bagot, QC]

Mr. Speaker, I listened carefully to the minister, earlier, say things that are not totally true. He was talking in a lyrical way, but very cynically, of his vision of Canadian regional development.

The truth is that his government is against regional development. His government has just cut, through its budget, $5.5 billion in the unemployment insurance fund. At the hearings of the sub-committee on Bill C-17, which is the piece of legislation that cuts unemployment insurance, people from the Maritimes came to tell this government, the members of the government, that it was on the wrong track. These people were desperate, because they were being cut left and right where they should not be cut.

That is the government's vision of regional development, to totally destabilize communities, particularly rural communities. The federal government should stop trying to make us cry with the millions of dollars that it sprinkles over Quebec. In case you did not know it, we pay $28 billion in taxes every year. So, those millions are no gift. The government should undertake a complete assessment of federal transfers, instead of looking only at what suits it. For the last five years or so, we have been the losers in these tax transfers, given what we are paying and what we are receiving.

So, the government should stop making us cry with arguments that are senseless, and most of all, demagogic arguments coming from a minister who is always demagogic anyway. The government should stop praising the phantom of the opera, Mr. Trudeau.

Mr. Trudeau spat on Quebec's aspirations, and if you are proud of having been part of his government, that is too bad for you. That will just make things clearer for Quebecers. So, is that your vision of regional development, to completely destabilize rural communities of the Maritimes and of Quebec with such a despicable, outrageous and hated bill as Bill C-17? I ask the question to the minister.

[Lloyd Axworthy, Liberal, Winnipeg South Centre, MB]

Mr. Speaker, let me say first to the hon. member that I am really pleased to hear that he is concerned about destabilizing the economy. I would hope as a result of that at the very first opportunity he will leave this Chamber and go to his leader's office and tell him to quit making those comments. I guess he is taking my advice, he is leaving right now.

[Some hon. members]

Hear, hear.

[Lloyd Axworthy, Liberal, Winnipeg South Centre, MB]

As the old saying goes, if you cannot take the heat, get out of the kitchen.

The fact of the matter is that if there is any one person responsible today for destabilizing the economy, for causing the substantial increase of interest rates which is putting real pressure on our international financing-

It is the leader of the Bloc Quebecois. He is the worst, when it comes to dealing with stability problems of the economy, and that is the truth.

That is the real problem we face. As long as we have the kind of sermon of separation that we hear coming time and time again from members opposite, we will continue to face economic difficulties because the international marketplace is looking at that problem.

If they were really concerned about the economy and ensuring that we can start building a stronger economy, getting our financing back in order, helping solve problems of deficits, putting more money back into investment, then they would stop talking about separation. That would be the one contribution members opposite could really make to economic renewal.

[Darrel Stinson, Reform, Okanagan—Shuswap, BC]

Mr. Speaker, I rise today to support parts of the Bloc's motion. After listening to the rhetoric that has gone on here today, I kind of get lost.

I enjoy the comments from the other side. I would like to refer specifically to two matters that have importance to western economic development: first, the federal government's prolonged inaction regarding dumping of apples grown in Washington state; second, the federal government's seemingly perpetual bungling of the handling of grain.

On Monday, May 9 more than 400 fruit growers gathered at the Canada-U.S. border crossing near the small community of Osoyoos in British Columbia to protest the government's lack of action regarding an extremely perishable agricultural commodity, apples, which are no longer being protected against unfair marketing practices by American growers due to contradictory actions by the federal government.

According to an article in the Osoyoos Times :

When the dumping of U.S. apples occurred in 1987 and 1989, apple growers in B.C. lost more than $10 million, according to the association. But Ottawa responded by placing apples under the Special Import Measures Act, a five-year plan protecting orchardists against dumping. However, in February of this year the Canadian Import Trade Tribunal chose not to renew the plan, leaving growers vulnerable to what they call unfair competition.

Imagine what would have happened to fishermen on the east coast when federal legislation providing special support to them called the northern cod adjustment recovery package expired on May 15 if the federal government had simply done nothing.

When the legislation expired, hundreds of fishing families, the main economic support of their communities, would have faced bankruptcy. Rather than let this happen, the government brought in the Atlantic groundfish strategy, or TAGS. While I cannot speak wholeheartedly in favour of TAGS, I do recognize that a responsible federal government cannot expect major sectors of the Canadian economy to go cold turkey from wide scale government support and government control to full fledged, free enterprise overnight.

Yet this is exactly what is happening to apple growers in British Columbia. Their industry was protected, and with not one effort to prepare growers for the sudden transition that protection was withdrawn.

The Reform Party is strongly in favour of free trade but we emphasize that it must be fair trade. In the long run we in the Reform caucus look forward to the time when Canadian agriculture can thrive in a free market economy but we recognize that this time has not yet come.

Okanagan fruit growers must not simply be thrown to the wolves or Canada may soon face the situation in which having apple tree in the backyard is merely a hobby and all commercial fruit must be imported. I believe that is totally unacceptable. The Reform caucus urges the government to recognize that there must be an orderly transition to tomorrow's world of free trade. In the interim, B.C. fruit growers face great economic hardships which will result in many of them going bankrupt.

I hear the hon. member on the other side basically suggesting that there should be no support given to the B.C. Okanagan fruit growers. According to David Hobson, president of the B.C. Fruit Growers' Association: "Farm families cannot sustain another year of dumping".

At the B.C. rally on May 9, B.C. provincial government representatives, including Okanagan-Boundary MLA Bill Barlee, former B.C. agriculture minister and now B.C. minister of small business, as well as Okanagan East MLA Judy Tyabji pointed out that fruit growers have become entangled in a conflicting maze of B.C. and federal policies.

More thoughtful government policies could moderate many economic consequences of the shift to a competitive world of free market. The lack of competitiveness from either B.C. fruit growers or west coast grain handlers is not due either to the farmers and workers involved nor to the conditions supplied by mother nature.

Canada has been recognized around the world for the high quality of our tree fruit, particularly our apples. Our growers and our agricultural researchers deserve much credit for their dedication and hard work. We are blessed with abundant water as well as soil and climate that provide some of the best growing conditions in the world both for grain on the prairies and for the tree fruit industry, especially in the Okanagan Valley which historically has provided approximately one-third of Canada's apples.

The future of Canada's horticultural industry should be bright. Instead we have growers who face a troubled and uncertain future due to the lack of wisdom in the way govern-

ment has dealt with the problems of our farms and orchards on one hand and the transportation of grain on the other hand.

In the past government took the easy route. If a problem emerged it would throw tax dollars at it. If west coast grain handlers went on strike or elevator operators locked the union out, the federal government would wait whatever it considered the appropriate amount of time to give lip service to free market forces. Then Parliament would be called on once again as we were this spring to legislate an end to the strike.

I voted in support of the back to work legislation with the specific suggestion that the House must develop a long term solution to problems of handling grain. According to the Edmonton Journal for May 17 the Minister of Agriculture and Agri-Food noted ``a wrinkle in the Western Grain Transportation Act'' which sometimes makes it cheaper to haul grain east to Thunder Bay before shipping it west to qualify for cheaper rates. That is the kind of unrealistic nonsense that can result from federal government intervention.

To compensate for time lost in this spring's grain handlers strike, complicated by a lack of hopper cars earlier this year because of grain shipment disruptions in the U.S.A. due to flooding in the Mississippi River valley, west coast grain terminals are now being operated on a seven-day per week basis at full overtime rates. Such seven-day per week operation has long been necessary to handle the increasing volumes of grain going through west coast ports. In response to requests for seven-day coverage the federal mediator to the previous west coast grain handlers strike allowed it on condition that the terminal operators pay full overtime rates for weekend work even if weekend hours were to form part of the regularly scheduled work week, according to the terminal operators.

In the world of free trade and strong international competition prairie grain pools cannot hope to remain competitive with emerging suppliers from other countries under those conditions. It is obvious that a long term resolution to such problems must be found.

The minister of agriculture indicated he was interested in such action with a meeting he scheduled two weeks ago with officials from the grain companies, west coast terminal operators and union and federal grain agencies. After the meeting the Alberta agriculture minister said the immediate concerns about the grain backlog left little time for discussing long term plans. He said: "We just managed to scratch the surface in a tentative way".

For the prairie communities and railroads and the 3,500 west coast grain handlers who were subject to special legislation in 1974, 1975, 1982, 1988, 1991, and again in 1994, these make-do meetings are simply not good enough.

Productivity of wheat, productivity per man hour of the grain handlers and the demand for wheat among the Pacific rim customers are growing. Both wheat and the production of apples are important regional aspects of the Canadian economy. For example, the fresh and processed fruit and vegetable industry has an annual production that exceeds $4 billion. The fresh fruit and vegetable sector alone accounts for $1.8 billion.

Regarding wheat, according to green matters, I quote: "The Far East and Oceania, home to 3.2 billion consumers, could account for 40 per cent of world wheat trade by the end of the century. Population and income growth, increased urbanization and the resulting dietary shift away from rice are expected to lead to greater use of wheat based products. Canada could secure as much as 30 per cent of this market".

The Canadian horticultural action plan published by agriculture Canada in 1993 recommended that agricultural policies be changed in several areas. Currently the federal government has piecemeal agricultural policies which see wide differences from province to province.

In conclusion, overall the Reform Party caucus is in favour of as little federal government intervention in our regions as possible. However, we recognize that in the transition from yesterday's heavily supported and controlled economy to tomorrow's world of free trade, orderly, thoughtful and reasonable steps must be taken to ensure that survival, particularly of Okanagan apple growers and prairie grain producers, are looked at in a different light. The federal government's intervention is often inefficient at best and harmful to regional development.

[The Deputy Speaker]

I understand that the hon. member for Okanagan-Shuswap wishes to share his time with the member for Capilano-Howe Sound.

[Darrel Stinson, Reform, Okanagan—Shuswap, BC]

Yes, Mr. Speaker.

[The Deputy Speaker]

Then there are five minutes for questions.

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

Mr. Speaker, I caution the hon. member in his remarks, saying that he would want to get a little closer to the Bloc. I cannot believe that the Reform Party is trying to destroy Canada whereas the Bloc's specific mission is to destroy Canada. Right now it is doing a very good job of it. We really should not associate with the Bloc.

A month ago I went to members of the Reform Party and asked them to participate in a mission to China whereby we would export Canadian products and services. I could not get any support.

Yet the previous member of Parliament from Kelowna, Mr. Al Horning, came to Beijing, China with us on this mission. He was

there for the express purpose of selling apples, the fruit of the Okanagan Valley, and also ginseng.

The members of the Reform Party cannot have it both ways. They stand here in the House of Commons and say they do not want any government interference or government help, but here is a specific example where we should be supportive and come to the aid of not just the fruit growers but also deal in a substantive way with the grain problem.

That is the point that I want to make. The Reform Party has to decide. Either there are times when they really need Government of Canada assistance or they do not. They cannot have it both ways.

[Darrel Stinson, Reform, Okanagan—Shuswap, BC]

Mr. Speaker, I listened to the member on the other side. Maybe the ears get plugged or maybe we are misinterpreted. The understanding of what is being said from this side is not quite there.

First, who says that because we are on opposite sides that one party or another cannot come up with a policy of which part can be supported by the other parties. Just the Liberals say that if it is not a Liberal policy nobody should support it.

I have sat here since the beginning of the session and all I have heard is how well you people on the other side want to get this country going. Yet you sit over there and refuse to accept any suggestions from any side on this. If it is not Liberal it does not wash, that is your way of thinking.

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

Work with the separatists.

[Darrel Stinson, Reform, Okanagan—Shuswap, BC]

There we go again. If it is not to your liking, everybody has to be against Canada. We have tried to introduce bills and motions in full support of Canada but that side does not support them. They go off on their own rhetoric.

The Reform Party caucus has stated all along that you cannot just totally cut off everything.

[An hon. member]

You have to work with the Bloc.

[Darrel Stinson, Reform, Okanagan—Shuswap, BC]

No, no. We are trying to work with the government. Unfortunately there are certain members on the other side who refuse to listen.

When you are trying to further the output of companies it cannot be done through grants but you cannot cut them off instantly. It does not work that way. First the field has to be level. The member or his colleague mentioned it before in interprovincial trade barriers. We have more interprovincial trade barriers in our own country than we do for exports from other countries.

It has been years. You have had your chances before. Now you are starting to listen a little bit. Not very much, just a little bit. I can understand that over here. It is too bad that gets lost over on the other side.

[The Deputy Speaker]

Order, please. Time has expired. We would ask both of the members who just spoke to try to put their remarks to the Chair. The "you" should just refer to whoever is in the Chair, not to people on the other side of the House.

[Herb Grubel, Reform, Capilano—Howe Sound, BC]

Mr. Speaker, I have studied economic development for the last 30 years of my professional life. I would like to put some historic perspective into this discussion.

In the post-war years in the 1950s and 1960s there were two economic development models floating around in the academic world and in the world of reality. On the one side we had the Soviet Union. It promised to solve all problems of economic development through deliberate central government action of planning and strict control over the lives of its members.

On the other extreme we had the market liberal model of the 19th century which believed that economic development was essentially the responsibility of individuals and that the role of the government was limited to setting down rules that protected and set up property rights, law and order, protection of individuals from both foreign and domestic interference. It essentially believed that minimal government was best to set free the energies and entrepreneurship of the individuals.

There was a lot of discussion during this period as to which was the best model, which would best succeed in raising the welfare of people in this world. It was largely a theoretical model because we never, ever have had any experience with the kind of planning model which was used in the Soviet Union.

We now know differently. We have now learned that the alleged success of the Soviet Union was all a big lie, that after all planning does not work.

At the same time we have the very great success of the Asian tigers, Singapore, Taiwan and Hong Kong, which in a very short time by using basically the model of the libertarian 19th century market oriented philosophers succeeded in bringing unprecedented rates of economic growth to their people.

I believe that the recent experiences are directly relevant to what is going on in Canada and what I believe Canada should do. Unfortunately in my judgment in the post-war years the Government of Canada travelled a great deal toward the model that is exemplified by the experiences in the Soviet Union and Cuba. I do not wish to say that we have become totalitarian. I merely wish to say the government has taken on the role of a major agent in economic development. This is in contrast to the idea that the government should merely facilitate economic development through some basic rules.

We heard from a couple of representatives from the government ministry this morning. They still believe they can do essentially what has failed in so many other countries around the world. They believe they are responsible for the export success of some industries which they have mentioned.

If there really is a project in Canada which can demonstrably be successful in exporting products to China which it now cannot do, many greedy capitalists in New York and elsewhere would love to put money into such a project. If it is worthwhile it should be done by the private sector.

When there is a government agency which says: "Fill out 15 forms and subject yourself to all kinds of hearings and then we will give it to you", no wonder they all come to the government and say: "We will do it your way. It is much easier than subjecting ourselves to the rigours of the market". Then the minister can say: "Oh, what a great success this was".

If it had been anticipated to be a great success, why did the private sector not do it? The private sector would have done it, but one of the problems in Canada is that the government is constantly stepping in and removing the incentive for the private sector to engage in this kind of development.

The future of Canada can go in either of two ways. One is the vision of the present government, which is continued government involvement in regional development projects. In the rest of the world it is almost a totally discredited approach to economic development. There is hardly an economist in the world who will disagree with the proposition that the government cannot pick winners. The government is not good at picking winners for economic development and which of the industries should be supported. The failure rate is extremely high.

Remember that every time the government supports an industry and then fails, it has taken away money from the rest of Canadians. They are therefore less able to do the kind of economic development projects which traditionally were within their abilities.

My vision for Quebec and Canada is let us make our country and Quebec after the model of Switzerland. Let us have free trade. Let us have a federation where all of the policies for economic development and social development are undertaken at the lowest level possible.

The minister said that unless we do it from Ottawa we will not have a country. Switzerland has a very strong sense of country, but a very weak central government. The government in Switzerland is doing what the 19th century model says it should do: provide security, internal rules, freedom, property rights. That is what the Swiss government is doing. To say that unless we take money away from the rich provinces or cantons and give it to the poor there will not be a country is obsolete. That model has failed. Just look at the countries which have pushed it to the extreme.

In conclusion, I support the position of the resolution that is before us today. The government should generally support decentralization of function. It should go back to the function it had in the first place up until the end of the second world war.

Also, if I may be so bold as to suggest, although I am not supporting it, but if it were to take place unhappy as I would be that Quebec became independent, I do hope it would take the model of Switzerland and not that of Albania in deciding which policies it would adopt with respect to trade and economic development. If Quebec were to become like Switzerland then many of the fears which have been voiced about the consequences for the rest of Canada, even the consequences for the people of Quebec on independence would be unwarranted and unjustified.

I wish I could be optimistic about the people of Quebec and the Government of Quebec accepting my advice. Unfortunately from what I have heard in this House we will not have much support for a market Liberal type of policies. I am afraid the indications are and it makes me very sad that we will move closer toward the model that has failed.

[Alex Shepherd, Liberal, Durham, ON]

Mr. Speaker, I am very saddened by the hon. member's comments. I think I actually heard him giving advice to the separatist element of the country of how they should properly separate. This follows more on the heels of what the Minister of Human Resources Development said about the problems with this great nation of ours. There are two parties in the House each with its own single focus which seems to be on separating us and making us different.

The hon. member went on with a history lesson. He tells me he is an economist but in fact, he must be a historian. He wants to take us back into the history of the country, a history which incidentally has never existed, a laissez faire economy in which government is not involved in the economy whatsoever. The government's only function is presumably to make postage stamps. This economy has never existed in the world. An Adam Smith economy has never existed. The reality is the great United States, that great capitalist country has all kinds of these programs.

The hon. member went on to talk about China, the new evolution and the new world. I note the Reform Party refused to send people to China. I was one of the ones who was honoured to

go and support some of our small and medium sized businesses. Some of them were from the west.

In talking to the people of China I was surprised to learn that in spite of their demand type of economy they were all working. There was no unemployment. I am not supporting a communist system, but I am saying that when I look back on the situation in Canada I realize we have one of the highest standards of living in the world.

If I took anything seriously from the member's comments, somehow we would be all destitute. I would like the hon. member to comment on some of those aspects of our economy.

[Herb Grubel, Reform, Capilano—Howe Sound, BC]

Mr. Speaker, the more I listen to people like the hon. member who just spoke, they should get a lesson in listening. There are so many things I am supposed to have said which I never said. I will let Hansard stand for that.

I never supported Quebec separation. However I believe it is not in the interests of the people of Quebec or Canada for us to refuse to think about what policies they might adopt if they do decide to become independent. I will justify that any time.

Also, I never mentioned the people of China. If you go to China you will get shepherded around by a guide like I did. I have been to China. You see what you want to see. In the 1930s people came back from the Soviet Union saying: "There is no unemployment. The Soviet Union is a model for economic development. Let's go that way". The NDP for a long time pushed that line until finally somebody said what Stalin had done and what lies had been perpetrated on us.

Since we have begun to intervene strongly in our economy in the 1960s with all the programs the hon. member's party is so proud of, the rate of economic growth in this country has decreased. It has gone from one of the biggest in the OECD down to the middle.

Before Sweden started its massive programs of the sort members wish more of, it was the country with the highest per capita income in the world. However, it went to where it is now, which is in the middle. In the last 20 years it has had the smallest growth in per capita income. History speaks clearly that the model of maximum involvement of the government in economic development has failed. The empirical evidence is in.

I would like to reiterate what I have said and the advice I can give as a 30-year student of economic development. Quebec demands for decentralization of this process of economic development. Keep more of the money there and let them do with it what they want to. This would be in the interests of the people of Quebec. Similarly this kind of approach might very well be the solution to keeping the country together, a looser federation modelled after that of Switzerland. Nobody can say that Switzerland is not a country. We can achieve that here, but we have to have it as a goal.

[The Deputy Speaker]

Unfortunately the five minutes are up. I see someone else wishing to ask a question. Is there unanimous consent to extend the period?

[Some hon. members]

Agreed.

[Dianne Brushett, Liberal, Cumberland—Colchester, NS]

Mr. Speaker, to the hon. member for Capilano-Howe Sound, Switzerland is much smaller than Canada. It is not as diverse in geography and population and it does have a very different economic outlook and economy.

My point to the hon. member regards economic development which we are talking about today, and not the development of new countries. In economic development Canada has acted as a unified country to serve all the regions, to serve them as equitably and as fairly as we can.

In Atlantic Canada, there is the Atlantic Canada Opportunities Agency, better known as ACOA. It helps to sustain some of the industries which cannot take on new technologies, new markets, new global competition without a little assistance. Let me give an example of what happened during the first week of May in my home town of Truro, Nova Scotia.

I attended a sod turning ceremony at Intertape Polymer Group Inc. The head office of Polymer is in Montreal. It has a plant in Nova Scotia where it manufactures synthetic fibres, plastic tape for the backing of carpets, polysac bags, even large sacks for bales of hay. This high tech company markets globally. As I said, the head office is in Montreal and there are five branches of that plant in Virginia, Florida, Louisiana, Montreal and Truro.

The company was looking at expansion. We, through ACOA, gave $1.4 million to Polymer to expand in Truro and the parent plant put in $15 million, for more than $16 million of investment in my home town. This investment created 45 new jobs for more than a total of 300 jobs in Truro, not Louisiana. We got ACOA funding as a stimulus and the parent company put the additional money in because that was where the best investment was for the best growth in exports from our ports to global markets throughout the world.

That is the advantage of regional economic development. That is a success story of long term jobs, sustainable jobs and a sustainable economy in the Atlantic region that we appreciate and love Canada for. That is what economic development is all about.

I hope the hon. member for Capilano-Howe Sound appreciates where we are coming from.

[Herb Grubel, Reform, Capilano—Howe Sound, BC]

Mr. Speaker, one of the great troubles we have as economists is that people always see their narrow, tiny little piece of the world. The world does not work that way.

A month ago I gave a speech on the damage done by the economic policies of the government on what they call charity to the regions.

[An hon. member]

We do not call it charity.

[Herb Grubel, Reform, Capilano—Howe Sound, BC]

I know you do not call it charity but that is what it is.

The other side of charity is now showing up in every country of the world that has gone too far with charity. I am not against charity, just how much. It has another side. With charity we also create dependence. Until the program of regional redistribution was enacted the income in the maritime provinces was a bit behind that of the rich centre.

The problem of economic development was solved by slow outward migration. Chances were that outward migration would have maintained income in the regions equal or near equal to that in the centre.

However, what did we do? We instituted in the name of charity a program which when exposed turned out to have been a disaster. It told the people of the maritimes to stay where they were and, if they fell behind, they would be given money. They would be given charity. What happened? They became so dependent on it that when the fish disappeared, when an economic crisis developed, they ended up having the worst possible kinds of problems.

We do not give money to our children after a certain stage because we know if we keep giving them money they will never become independent. Yet here we have a state institution which continuously says: "Stay poor, we will take care of you".

This is the long run perspective on those kinds of programs which I believe has to be brought out in our discussion of where we are going into the future.

[Pierrette Ringuette-Maltais, Liberal, Madawaska—Victoria, NB]

Mr. Speaker, I am appalled by the comments of the member who just spoke. He talked about charity to Atlantic Canada and before that he talked about history.

Perhaps the member needs a little lesson in history. Atlantic Canada was one of the most prosperous regions when Canada was built, at the time of Confederation. The Atlantic region helped Quebec open up its waters to the world, to the detriment of Atlantic Canada. It helped develop western Canadian agriculture, and we are here as Atlantic MPs listening to western MPs telling us that we are charity cases.