Debates of June 2nd, 1994

Ultramar Canada

[Ron MacDonald, Liberal, Dartmouth, NS]

Mr. Speaker, my question is for the Minister of Industry.

Ultramar Canada has announced plans to sell if possible and, if not, to completely close down its refinery in Dartmouth; this in spite of the fact that when Ultramar acquired this plant in 1990 it signed an agreement with the federal competitions bureau to keep this operation open until at least 1997.

I want to ask the minister what measures he and his department are taking to ensure that Ultramar indeed lives up to the letter of these commitments and does not easily extract itself from this agreement with the federal government.

[John Manley, Liberal, Minister of Industry]

Mr. Speaker, as the hon. member knows, Ultramar acquired the assets of Texaco in 1990 pursuant to a consent order of the competition tribunal and subject to the agreement of the director of investigations and research under the Competition Act on the basis of undertakings given by Ultramar to keep the refinery in Dartmouth open for seven years, unless there was a material adverse change in circumstances.

Ultramar is now saying that there is such a material adverse change in circumstances and endeavouring to either sell or, failing to sell, to close the refinery.

The director of investigations and research is investigating to assure himself of the facts that are the basis of the claim of an adverse change in circumstances. Once he is satisfied as to whether such a change has occurred he will then be in a position to take the appropriate action either to enforce the undertakings or to permit Ultramar to proceed with its actions.

I can assure the hon. member that we are very concerned, with him, about the jobs that are at risk in Dartmouth as a result of this decision and we want to make sure that the right thing is done.

Business Of The House

[Michel Gauthier, Bloc, Roberval, QC]

Mr. Speaker, I would like the leader of the government in the House to inform us of the order of business for the next few days.

[Herb Gray, Liberal, Leader of the Government in the House of Commons and Solicitor General of Canada]

Madam Speaker, I am pleased to provide the weekly business statement. Tomorrow we will begin with Bill C-18 concerning the Electoral Boundaries Readjustment Act. I will have a motion on the Order Paper by six o'clock this evening with respect to certain amendments. If the House deals with the matter quickly enough we will return to Bill C-34 regarding Yukon native self-government, followed by Bill C-33 respecting Yukon land claims.

Next Monday, as already announced and as already agreed to by the House, the House will commence its sitting at two o'clock in the afternoon rather than eleven o'clock in the morning in order to permit members to attend the service at the National War Memorial commemorating the 50th anniversary of D-Day.

The government business for Monday when we come back will be the amendments to the Young Offenders Act. We will begin debate on second reading of the bill to carry out those amendments.

Tuesday and Wednesday shall be allotted days. Wednesday being the last allotted day for the present supply period, the House will sit late pursuant to the rules, with any questions necessary to dispose of the main estimates and the supplementary estimates being voted on starting at ten o'clock in the evening.

Subject to further discussions and to the progress in debate made earlier I would hope to call the bill reorganizing the Department of Citizenship and Immigration on Thursday. I will confirm the business for the latter part of next week at the regular weekly House leaders meeting early next week.

The House resumed consideration of the motion.

Supply

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

Madam Speaker, I did not realize that I had five minutes left on my remarks. I will take that time to review some of the points that I made in my speech before question period began.

As I said, the opposition motion today tried to discredit the Government of Canada as not having effective regional development plans or programs or instruments. Those people in every region of Canada know that we have always had decentralized instruments to help deal with very sensitive and diverse regional business opportunities.

The Atlantic Canada Opportunities Agency has been dealing with the problem of regional development expansion for the last number of years. In the province of Ontario we have the FedNor, which has been designed to look after northern Ontario opportunities, western Canada diversification and FORD-Q in the province of Quebec.

For the Bloc Quebecois to put forward an opposition motion today that would suggest that we are not governing in a decentralized way is not accurate.

The real point of the Bloc's motion today has to do with the fact that it does not believe the Government of Canada should have people speaking for Canada in the province of Quebec. It does not believe in having a Government of Canada presence active on the ground in Quebec.

Of course none of us on the government side of the House shares that position. Imagine a situation in which it is saying, have the Government of Canada send a cheque because they in the province of Quebec know how to spend that cheque best.

We have had experiences in the province of Quebec in the past in which it has not been interested in the national position or the national view. Normally the province of Quebec or for that matter the province of Ontario are just basically speaking for provincial matters. When we are in the national government position we have to balance our view.

As a national parliamentarian coming from Toronto I do not just stand here and speak for Toronto. We do not just stand here and say that the only part of the country we are concerned about is Ontario. The proof in the pudding on that has to do with the entitlements that were granted before the budget in January when under the Constitution of Canada the new formula for entitlements was announced by the Minister of Finance in which the have provinces of British Columbia, Alberta and Ontario will transfer to the province of Quebec $70 billion over the next five years.

If a person were just interested in the province of Ontario do you think that the provincial members would say they have to send cheques off to the province of Quebec? That would not happen.

The purpose of this Chamber is to make sure that the regional disadvantages and the regional diversity are looked after by a strong national government, so stronger provinces make sure that provinces that go through weaker periods from time to time share in the wealth of the whole nation.

I resent the opposition motion today because it really is not a motion that speaks about how we build a stronger Canada. It is not a motion that is sincere because it is coming from a party that basically wants to destroy the country. I do not want any part of it.

[Ghislain Lebel, Bloc, Chambly, QC]

Madam Speaker, I listened carefully to the much too lengthy comments of the hon. member for Broadview-Greenwood who talked about almost everything, except regional development.

I want to point out to the hon. member that although it is true that the federal government is about to transfer $70 billion to Quebec in the next five years within the equalization program, this money comes for the most part from the pockets of Quebecers. The only pennies which are paid to Quebec but do not come from the pockets of Quebecers are those which are borrowed in their names. The government should know it and stop acting as if it was always playing Santa Claus because it is not true. The government is acting in bad faith.

Canada's accumulated deficit of some $500 billion is nothing to be proud of, even in Broadview-Greenwood. Our economy is in such a mess because of the accumulated debt that they should not dare play Santa Claus.

Members of the Bloc have been rightfully and legally elected to this House and they have a right to speak and the hon. member for Broadview-Greenwood is not the one who will silence us. If this does not please him, he can always go behind the curtain. This is maybe where he will do his best work.

Moreover, we are here to talk about regional development. Did the hon. member tell us about regional development infrastructures? We would have expected him to talk about that. Did he say anything, for example, about regional airport infrastructures? This is an important issue. My riding of Chambly is located in the Richelieu valley and includes some large municipalities. We have a road system. We have provincial road infrastructures that were not given to us by the hon. member for Broadview-Greenwood. They were paid for by the province of Quebec.

We have a nice road system that, unfortunately, is deteriorating rapidly because the Liberals have cut rail transport, because they have abandoned rail lines everywhere. That forces us to overutilize our roads, which are paid for with provincial funds.

The hon. member for Broadview-Greenwood tells us that the federal government helped make Hydro-Québec what it is today. If the federal government ever gave a penny to Hydro-Québec, Madam Speaker, I would like the member to compare that with the amount of money that the federal government gave to Atomic Energy of Canada, in Ontario, over the same period. There is absolutely no comparison possible. They are federalists. The hon. member for Madawaska said that some people in this House have a selective memory. I think that applies very

much to members of the present federal government. Talk about selective memory! The federal government never gave a penny to Hydro-Québec, as opposed to billions of dollars that were given to Atomic Energy of Canada.

The member did not talk much about Hibernia. Regional development is important. We need the infrastructures and we have to spend money for that. Let us take regional airports, for example. I said a few minutes ago that the town of Richelieu, in my riding, and all the surrounding towns, including Marieville-almost all of which have a small industrial park and a good road system connecting with the Montreal-Sherbrooke freeway, Highway 10, Highway 30 and roads to the United States, and are not far from railway lines which have not yet been abandoned-adopted resolutions asking for a regional airport.

Many people, including those from Sivaco, a fair-sized factory in Marieville, talked of closing their doors because the senior executives who come from God knows where in the United States find that there is an access problem because they have to land in Montreal and then travel the rest of the way by car in winter. They would prefer to have a small airport close by.

So the towns adopted resolutions to that effect and we are trying to wake the federal government up because it has the bad habit of investing only when it can see the picture of the minister responsible for the area in local papers; otherwise regional development does not interest it. They did that to me last week in Saint-Bruno, when the Minister of Canadian Heritage came to announce a contribution of $11 million from the infrastructure program and tried to convince the people there that that money was a gift from heaven, from a place not far from Toronto, probably Broadview-Greenwood.

I conclude by saying that instead of moaning as they have all day about the presence here of the Bloc Quebecois, they should shoulder their responsibilities and do some regional development. That is what we need and that is the subject of today's debate, whatever the hon. member for Broadview-Greenwood may think.

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

Madam Speaker, I would not want the hon. member to think that I was whining. I was merely trying to point out to the member and to members of the Bloc that the province of Quebec has benefited by being part of Confederation.

I can say that James Bay has received hundreds of millions of dollars from the national government, from environment and from Canada Mortgage and Housing for every aspect of that project. If you do not believe me go to the Library of Parliament and they will produce the records dollar for dollar for you.

There is no resentment for that. This is part of Confederation. All we are saying is do not pretend that the national government has done nothing for the province of Quebec. My goodness, that is an insult to all the elected members who come from Quebec.

Look at the 16-year period of Pierre Elliott Trudeau when the Liberals had 74 out of 75 members and see all the great things that happened in the province of Quebec.

The difference was that those members of Parliament believed in Canada. If this group over here would start believing in Canada maybe then we could get our economy going a little better and maybe we could put even more money into the province of Quebec. That is how we would get more Quebecers back to work.

Throw away this idea of destroying the country and get back to reality. You will never be able to build a strong economy by ignoring the fact that a great deal of the reason we are rated number one in the world today as a nation to live in is because historically we have all worked together. The minute that we destroy that reality of Canada, it is not just your constituents who are going to suffer, it is mine and everyone else's in this country.

That is why I become very emotional about my country. I believe and I am going to continue to preach the fact that when you are in this House of Commons you should be building Canada, you should not be here trying to destroy it.

[Jim Abbott, Reform, Kootenay East, BC]

Madam Speaker, I will be sharing my time with the member for Edmonton Southwest.

One of the most interesting things about human beings is that we very frequently do not learn from history. If we do not learn from history the one thing that we can count on is the fact that we will be doomed to repeat it.

When I was first involved in business, going back a few years to the very early seventies, I became aware of a government regional grant program under the acronym of DREE. Somehow under this DREE program the decision was made that the West Kootenays would be a have not portion of my particular part of the country whereas the East Kootenays had a lot of funds and could do its own thing.

As a result of the DREE program, there was a decision to go ahead with a chainsaw manufacturing process at Waneta, just outside of Trail in British Columbia. This chainsaw manufacturing was really spot on in terms of its time in coming to the market. Rather than just manufacturing chainsaws it was manufacturing a small personal portable chainsaw. For those of

us who are familiar with what was happening in that particular marketplace, it was very timely. Between 1972 and 1976 DREE put $200,000 into that chainsaw manufacturing company.

In Castlegar at about the same time there was another venture that went forward to generate light weight travel trailers. If we go back 21 or 22 years in our minds, we realize that there was a market for a light weight travel trailer. DREE had this light weight travel trailer manufacturer set up in Castlegar and put in $220,000.

Unfortunately, I am forced to report that neither of these ventures are still in place. As a matter of fact, they disappeared from the business scene. They are gone.

Working a little bit in this direction, in the early eighties in Cranbrook, which is where my home constituency is, there was a printing company. I am not really sure of the figures, but it was put into place with between $496,000 and $750,000 of government grants. That business went for about 24 months, ran into cash flow problems and the business was shut down. There was no way the government could ever recover its over half million dollar investment. Because it had run into the cash flow problems it had let its insurance lapse. The building was vandalized and hence there were no assets for the government to reclaim.

Coming even further forward into the mid to late 1980s I am very familiar with an operation in Langley. This one, instead of being unfortunate, unfortunately was a scam. A company decided to develop a communication development laboratory. The principals of that firm actually disguised antiquated equipment. People in smocks were running around and this fooled the government inspectors. The venture lasted one year. It was not quite enough of a scam to catch the attention of the police. As a result Canadians are out half a million dollars.

My thesis is if the marketplace will not support a business start up it likely will not support the business. That is the fundamental flaw, the fundamental problem of regional development grants.

Let me give some specific examples. The federal government wants to forgive $5.3 million it lent to the Sydney Steel Corporation of Nova Scotia which is owned by the Nova Scotia government. The Cape Breton company borrowed the money in the early 1970s to build a wharf. The government also wants to forgive the $20.4 million in interest payments the corporation now owes on that loan.

The government wants to forgive a $4.6 million loan to the International Tin Association, an organization set up to help stabilize the tin process. Since the association was disbanded in 1985 the government has determined the chances for repayment are rather slim.

We have an absolute hole as it were that we seem to be constantly pouring money into with good intentions. I sincerely applaud the motive, the background, and the desire of the government. Unfortunately, it has not learned from history.

In doing some research on this speech I had my assistant make some telephone calls and he reports this:

"Government's best intentions whether it be to assist small business or to employ people or train people would be best left to the people who know how to develop and manage company's employees, which means small business people in every community.

The best way government could do that according to the people I have talked to would be for the government to demand less from each small businessman in the way of red tape, completing forms, GST returns, in other words the services he is required to fulfil for the federal government. This would allow him more time to do what he does best which is to effectively run his company so as to produce some real dollars and provide real lasting jobs for people in his community and Canada as a whole.

Government by trying to control the labour market that interferes with supply and demand whether it be printers or cows only interferes with free enterprise and the people who really know the marketplace".

My point is that when the government gets involved with throwing around taxpayer's money unfortunately that almost invariably interferes with the normal marketplace.

The very best result that we can expect from the funds the Atlantic Canada Opportunities Agency and the Western Diversification Fund are throwing into the marketplace is that it will simply distort the marketplace. The difficulty is when it distorts the ordinary marketplace it makes it difficult for successful tax paying businesses to be able to continue in business. They find that all of a sudden their taxpayers' dollars are being used to subsidize businesses that are in competition with them.

I have been hearing a little bit of yapping from the other side of the House. Perhaps if they were to talk to some of their business people they would get exactly the same story as I am relating here.

I have explained the best result. The worst result is probably best explained when western economic diversification fund officials on January 16, 1990 lent $526,990 to Myrias Research Corporation. On April 17 they gave it another $1.4 million. On May 30, 1990 they gave it another $686 million. On August 9, 1990 they gave it another $775,000. On October 5, 1990 they gave it another $517,000. On October 26 the corporation was placed in receivership.

If the government, which has the best of intentions, granted, is not prepared to take lessons from history and learn from history then we have the difficulty of repeating history.

[Alex Shepherd, Liberal, Durham, ON]

Madam Speaker, talking about taking a lesson from history, I wonder how the hon. member's party would have existed in the early stages of our history when the government actually had to finance Canadian Pacific to build a railway across the country to link the country together to create the nation we live in today. It seems, if we had had a Reform Party representing the people out west, they would not have been part of Confederation in the first place. Incidentally that was a perfect example of the government getting a business going, turning it over to private hands and turning it into a success story.

All I hear from the Reform Party is about failures. Certainly every time we get involved in a business venture there is the possibility of risk, the possibility of failure.

I also want to focus on another aspect of regional development. In some of these areas the federal government through a process of transfer payments or whatever is sustaining people. We have people on welfare and on unemployment insurance.

I would like to direct a question to the Reform Party. If we have a choice between paying people to sit home and do nothing or trying to create worthwhile jobs and careers for people to get out of that situation, which is more preferable?

[Jim Abbott, Reform, Kootenay East, BC]

Madam Speaker, the member raises the interesting point of bringing 1800 solutions to 1994 problems.

In 1800, when the CPR was being put together, we did not have the gigantic welfare state we presently have. We did not have unemployment insurance. We did not have 53 per cent of all government spending going to individuals in a giant welfare state like the Liberals in particular pioneered through the seventies.

With the greatest respect, I must agree with the member about the Canadian Pacific. Clearly it is a fact of history that it tied Canada together; it is a done deal. How much did it really cost Canada by coming out west when we take a look at the amount of property that was given to the corporation, or by coming out west when we take a look at the fact that we are still basically paying for the line?

That is fine. That is history. I am proud of Canada. I am proud to be a Canadian. I am happy the CPR was brought in. However I suggest with the greatest respect that he is bringing an 1800 solution to a 1994 problem.

[Mary Clancy, Liberal, Parliamentary Secretary to Minister of Citizenship and Immigration]

Madam Speaker, I wonder if the hon. member, with his great knowledge of Canadian history, is aware of a certain phenomenon that took place in post-war Canada, in Atlantic Canada and eastern Canada in general but most particularly in Atlantic Canada.

Atlantic Canadians paid $5 over world price for their oil that went to the province of Alberta so that the oil industry could off the ground. Eastern Canadians, maritimers, Atlantic Canadians, did this in good faith because they believed we were one country. They believed an oil industry in Alberta would be a good thing for Canada, and they did it with pleasure.

Therefore, would the hon. member like to comment on that fact, if he knows about it?

[Jim Abbott, Reform, Kootenay East, BC]

Madam Speaker, I would be very interested in receiving some documentation of the fact the member has put forward. My understanding of the oil industry in Alberta is that it was financed fundamentally from the U.S. That was where most of the dollars came from.

However, I suggest as part of the price the people in Alberta have paid in order to be in Canada under the wonderful-

[The Acting Speaker (Mrs. Maheu)]

On a point of order, the hon. member for Chambly.

[Ghislain Lebel, Bloc, Chambly, QC]

On a point of order, Madam Speaker. We would like to listen to the remarks of the hon. member, but it is difficult because some members are talking in front of us. Could all members be more cooperative?

[The Acting Speaker (Mrs. Maheu)]

From time to time, there are heated discussions in the House. The hon. member should use his earphone, and I would ask all hon. members to show more consideration.

[Jim Abbott, Reform, Kootenay East, BC]

Madam Speaker, I was about to say that the people of Alberta can recall very clearly, very vividly, the confiscation of $67 billion from one province to central Canada under the Liberal government's national energy plan. The point therefore I want to make is that the people in western Canada have contributed very much.

With the greatest respect to the people in Atlantic Canada, I do not think they have an edge on contributions to Canada.

[Ian McClelland, Reform, Edmonton Southwest, AB]

Madam Speaker, it might not be a bad idea for members opposite and those Canadians viewing the debate at home if we were to go over the motion again so they know what we are talking about.

Today is a supply day which means the opposition, and in this case the Bloc, supplies the motion for debate in the House. The motion the Bloc Quebecois put forth for debate today reads:

That this House condemn the federal government's ineffective regional development interventions, which create overlappings and inconsistencies, resulting in an administrative chaos that hampers regional economic growth.

Although I probably would not have put it in those terms at all, the whole notion of Canada's regional development is one of the basic differences between Canada and the United States, Canada and many countries in the world. There are not many countries in the world that take resources from one part of the country and transfer them holus-bolus to another part of the country in order to create some sort of evenness across the country.

What usually happens in terms of world affairs is that they make sacrifices for the future. Perhaps none of us would be here in Canada today, or very few of us except the indigenous people, if our forefathers had not left where they were so that they, their children and their grandchildren could have a better life in a new country.

What has happened in Canada over the years is that rather than making the sacrifices for the future, we made the future sacrifice for us today. Today when we are making transfers of money from one part of the country to another, by and large the transfers of money are transfers of borrowed money. We are really transferring money and wealth from future generations to this generation and then once again transferring it to another part of the country, in the hopes that it will make one part of the country work a bit better and that we will have a more even playing field.

I guess the debate is not really out. Does it work? Is it effective? If it worked probably there would not be much debate about it because we would recognize it as a good thing.

Given that we have been doing this transfer of resources from one part of the country to another over these years and given that it really has not changed the nature of dependence in various parts of the country, it is reasonable to question whether it works at all.

The basic premise of the Bloc motion is to suggest that perhaps this money transfer could be done in a more efficient and more effective way. From the Bloc's perspective it would like to see all the money transferred to the province of Quebec and the province of Quebec making the determination, controlling all the strings, even though it is federal money. The real question, though, is whether or not we should be doing it at all.

I would draw the attention of hon. members to the situation that exists in the United States. The southern United States, as many members would know, for many years languished relatively poorly compared with the northern and western United States. Yet today the south is vibrant and flourishing in part because it was not force-fed resources from the more prosperous parts of the nation and in part because they have a triple-E senate. Things were able to find their natural level. The cost of land and the cost of being in business today in the southern United States are less than in the north. Therefore people establish their businesses in the south.

We do not have the same playing field in Canada because we have a federal system of government that favours central Canada at the expense of the regions, particularly the maritimes. If we had a system of government that did not favour one part of the country over another because the vast majority of the population of Canada is centred in Ontario and Quebec, we might not have the need for regional economic expansion.

I suggest we should give some thought to why we got into this situation in the first place. The Bank of Nova Scotia headquartered in Toronto is not called the Bank of Nova Scotia because it started in Toronto. It is called the Bank of Nova Scotia because it was established and started in Halifax. Why did it move to Toronto? It is because that is where the economic base of the country is. Chapter and verse the concentration of wealth is in Ontario and Quebec because that is where all the votes are in the country.

We need to change things in a much more fundamental way. As a Parliament we should consider a triple-E senate because in my opinion it would help dramatically in regional economic expansion.

Does it work? Is it worthwhile? We have read with considerable interest that the new entrepreneurial class in Quebec in the last 20 years or so has created a revolution in thinking and in spirit. My colleagues from Quebec could speak in much more detail about it, but that is the perception many other Canadians have of the entrepreneurial class in Quebec.

Quebec and Alberta in harmony embraced the whole notion of NAFTA or free trade with the United States. As a matter of fact Canada has free trade with the United States in very large measure because Quebec wanted it and Alberta wanted it.

Let me just read a few statistics about what has happened to the west after five years of free trade with the United States. I submit that in these statistics lies the avenue for expanded economic activity for Quebec, for the maritimes and for all other parts of Canada. I am quoting from a report by the Centre for International Business Studies, the Faculty of Business, University of Alberta, Edmonton, dated April 1994:

Over the five year period, 1988 to 1993, the value of exports from western Canada grew by 23 per cent, while exports to the U.S. market rose by 58 per cent. The growth of total exports amounted to 51.3 per cent for Alberta, 18.4 per cent for Manitoba, 9 per cent for British Columbia, and 3.7 per cent for Saskatchewan. The growth in exports to U.S. markets was 77.1 per cent for Alberta, 70.4 per cent for Saskatchewan, 46.4 per cent for Manitoba, and 34.2 per cent for British Columbia.

I recognize that in quoting all these numbers it ends up being a major jumble. However, the fact remains we are not going to get rich in our nation by transferring wealth from one part of the country to another and then quibbling over who got more and who got less or where it came from. We are going to be wealthy as a nation because we produce wealth all over Canada. As an exporting nation we export primarily to the biggest and wealthiest market in the world which is right next door to us no matter where we live in Canada, the United States.

If we would put half of our energies into developing our manufacturing base, our competitiveness and our export markets and break down the internal trade barriers so that we are competitive within the country and put those energies into exporting and developing our markets in the United States and elsewhere in the world, we would gain dramatically. This incessant bickering about who gets more and who gets less within our Confederation is destructive and leads nowhere.

[Brenda Chamberlain, Liberal, Guelph—Wellington, ON]

Madam Speaker, the hon. member for Edmonton Southwest used the words quibbling and bickering several times. That concerns me. As a new member in this House I have heard a lot of quibbling and bickering and quite frankly, it has come from that side of the House.

A colleague from eastern Canada not so very long ago talked about the people whose livelihood in fishing had been suspended. They were glad this government was helping them, that it was willing to stand up for what we might call our brothers and sisters in our family. I believe Canada is a family. I think the Reform Party shares this view and believes that Canada should continue to be a family and live as one. As a family, sometimes it is important to help each other. When we talk about putting money into different parts of Canada sometimes that is the reality. In tough times we have to stick together and do what is right for the country.

Members have spoken today about history repeating itself. Many times in Canada's history it has been very positive to put money into different parts of Canada and to have jobs flourish and grow through that. Sometimes a hand up is a help.

Does the hon. member honestly believe there is a simple solution? Should people only look out for themselves in their own backyards and not for the rest of the people in the community or country? Does the member believe that being a grab all and keeping it for himself would promote growth and jobs?

[Ian McClelland, Reform, Edmonton Southwest, AB]

Madam Speaker, in response to my hon. colleague's questions, I do not remember saying anything about a grab all in my presentation. One must be very cautious in using the term grab all. What we are talking about is putting money into the hands of individuals, in lending a helping hand and a hand up. I do not think that anyone seriously quibbles or quarrels with that.

What we do have a problem with is when the federal government taxes individuals and takes the money into government. It takes a dollar from the hands of the taxpayer and then spits out 20 cents into the arms of a business. That business will then go into competition with the business which supplied the taxes in the first place.

This debate has nothing to do with transfers to individuals. It has to do with regional economic expansion, which is federal government money going to businesses and the federal government picking winners and losers, or any government picking winners and losers. I submit if members were to make a list of winners and losers that all levels of governments have picked, the list of losers would be as long as their arms and the list of winners would be very short indeed.

[Mary Clancy, Liberal, Parliamentary Secretary to Minister of Citizenship and Immigration]

Madam Speaker, I am absolutely delighted to be able to stand here today and set the record straight on some rather outlandish statements by Her Majesty's Loyal Opposition and Official Opposition.

To claim that regional economic development efforts are creating overlap and inconsistencies resulting in "administrative chaos" could not be further from the truth. This government's approach to economic development is working and is working toward eliminating the very overlap and duplication my hon. colleague speaks of.

In particular, the record shows that the approach being taken in regional economic development by the Atlantic Canada Opportunities Agency is extremely effective. In fact, given its success in creating permanent jobs, ACOA is this government's prime instrument to create economic development in the Atlantic region.

The regional agency approach has the full confidence of the government. Important gains have been made, but our government is still not satisfied with the rate of economic growth in Atlantic Canada. As such, much remains to be done to assist the region in attaining its full potential.

In order to help it respond to new development challenges, the agency must strategically direct its help to the most promising economic development opportunities in terms of job creation. Moreover, ACOA must become more aggressive in its efforts with small businesses to help them discover viable commercial ideas and actively realize them.

Atlantic Canada's economy is going through a transition, which can also be said of the rest of Canada and, in fact, most industrialized countries. Many factors explain this transition, the most notable being the changing structure of international trade, the speed of technological development and the generalization of government policies and the changes made to them.

This trend is likely to continue at a rapid pace over the current decade. Trade liberalization offers numerous opportunities for trade development. New technologies offer tremendous opportunities for productivity improvement in all sectors of the economy and in all phases of the production process. All of these will open new opportunities for Atlantic Canadian producers and entrepreneurs, but will also translate into increased and intense competition on domestic and world markets.

Governments increasingly constrained by mounting debt loads are forced to rethink their role and review social and economic programs. Speaking of learning from history, that is what this government is doing and that is what it is doing particularly through the mode of ACOA.

First let me talk about the comprehensive approach to the economic development of the Atlantic economy. Regional economic development programs are not immune from this review process and ACOA is currently defining new corporate directions.

The current government recognizes that strong regional economies are the building blocks for a strong Canadian economy. However, a new and more innovative approach to regional development needs to be developed, taking into consideration the global environment and tight fiscal constraints. Job creation will be the prime guiding principle for this new approach. This fulfils the promises we made in the red book and it is part and parcel of the philosophy and the base of this Liberal government.

Small and medium sized enterprises, SMEs, will be the focus of ACOA's programming and initiatives. The general approach will be to build on the expertise of all agents for economic development. This calls for economic co-operation, joint action and integrated development at the regional level.

Strong emphasis will be put on public sector and private sector partnering and the mobilization of scarce resources necessary to achieve strong regional economies and help regional firms and industries meet the challenges of international competition and change.

Second, we have to improve co-ordination among federal and provincial governments. A major regional development priority of this government is to work closely with provincial governments to ensure that the federal government is a partner in the formulation of regional development.

A second guiding principle given for job creation is as follows: in conjunction with provincial governments, we will try to reach the goals set in the strategic economic plan by focusing our efforts on tourism infrastructure, on commercial applications of research and development in local institutions and on assistance directed particularly at small businesses.

The government also recognizes that it is imperative to take at the regional level some action to improve co-ordination and effectiveness under the present circumstances of fiscal restraints and a heavy debt load.

There must be a greater harmonization of efforts and actions by the federal government and the provinces in the area of regional development. In view of its size and population, the Atlantic region will be able to compete more effectively on the world market if it integrates its economy, harmonize its strategies and co-ordinate its activities on a regional basis. ACOA has already taken the first steps by establishing such co-operative efforts at the regional level. Partnership with the tourism industry in Atlantic Canada, which was talked about earlier, is an eloquent example of that.

I also just recently announced an important measure on trade in the whole region, that is the co-operation agreement between Canada and the Atlantic provinces. That measure deals with the promotion of external trade. It will unite the four Atlantic provinces, ACOA, Industry Canada and Foreign Affairs and International Trade, in their efforts to help small and medium business in capturing export markets.

However, it is possible to do even more and, in order to do so, the president of ACOA conducts a forum of deputy ministers responsible for economic development in the provinces. This forum has the mandate of harmonizing even more the development efforts in the Atlantic region.

Improving government services to small and medium sized business is a high priority for this government. In "Creating Opportunity" this government pledged to review regional development programs and grants to business to ensure that they reflect a commitment to streamline government operations and eliminate duplication, to provide better support to commercial applications of R and D, to export oriented industries, and to small and medium sized businesses.

To this effect ACOA has established a Canada Business Service Centre in Halifax. One is currently being set up in Fredericton. Plans call for two other centres, in St. John's and in Charlottetown. These will serve as one stop shops for all federal and provincial government assistance to business. These centres will help improve considerably the delivery of assistance to these businesses.

There is currently numerous overlap and duplication in programs and services among federal departments and between provincial and federal governments. The CBSCs as well as the harmonization process between the federal government and provinces will contribute significantly toward elimination and reduction of overlap and duplication.

ACOA as the government's primary industry for supporting small business in Atlantic Canada is well placed to play a lead role.

The emphasis will be put on the creation of permanent jobs as well as on the economic renewal, through the infrastructure program.

We expect that 7,500 jobs will be created in the Atlantic region during the first two years of the infrastructure program. This program is making good progress and to date, 164 projects have been announced, representing a federal contribution of over $72 million earmarked for projects worth almost $200 million. This will create a little over 2,500 jobs.

Effective infrastructures will be put in place to attract industries to the communities. This new way of doing things will lead to increased competitiveness, a positive adjustment of the declining sectors, and a maximization of new opportunities.

ACOA, together with other federal departments, the provincial governments and its partners in the private sector, will concentrate its efforts on improving the competitiveness of the businesses in the Atlantic region so that they can compete on regional, domestic and international markets. To achieve this, ACOA will target the aid for adopting and adapting high technology processes and information technology as well as developing human resources to improve the quality of labour management and finally allow companies in the Atlantic region to exist and to grow in today's highly competitive environment.

One example of the type of innovative small company which the agency intends to target is Holland Stafford of Charlottetown which has become a leader in seafaring technology. This company has recently developed hundreds of new patterns for boat propellers by incorporating the latest technological developments and using new computerized design methods. This expertise has enabled the company to successfully expand into international markets for these products, as I am sure my colleague from Egmont would agree.

Another example is Eastland Industries in Minto, New Brunswick which has set up a new computerized assembly line of production machinery. This innovation has helped it expand its sales of European style cabinets and countertops to the Atlantic and New England markets.

Rationalization is occurring in all traditional industries: pulp and paper, fisheries and mining. As a result, employment in these industries has been declining. The transportation sector, notably railways, has also been shedding unprofitable activities which will also result in job losses.

The demilitarization ensuing from the end of the communist regime in eastern Europe is resulting in the closure and downsizing of many bases in Atlantic Canada. This has been accompanied by the loss of military and civilian jobs.

ACOA is taking a lead role in working with other federal departments, provincial governments and the affected communities to put in place development to replace these jobs. Some funds will soon be available to help communities get organized and develop and implement projects. ACOA's regular programs will of course be available to assist businesses seeking to establish or expand in these communities.

Trade liberalization, as reflected by the General Agreement on Tariffs and Trade, the Canada-U.S. free trade agreement and the NAFTA and, to a lesser extent, the economic integration of the European community, offer numerous new opportunities for Atlantic firms.

ACOA will put significant emphasis on trade development so that entrepreneurs in Atlantic Canada can take full advantage of opportunities arising from trade globalization.

A proactive approach will be adopted to support sectors and firms which have high growth potential. There will be a focus on high growth potential sectors such as communications and information technology, health industries and pharmaceuticals, geomagnetics in space. Development at the firm level will be encouraged through such measures as diagnostic services, benchmarking and strategic planning.

Another example of a small company that has been able to penetrate export markets is Day Industrial and Minetech Incorporated in Cape Breton. The company has developed a long lasting, durable lamp for Cape Breton coal mines. It now sells its products to mining and other markets in Canada, the United States, Australia, Europe, South Africa and South America.

Some of our friends across the way do not think that this is a good way to invest in Canadians. I think that is a shame.

Ultima East of St. John's, Newfoundland has developed into a world leader in the development of access technology for mobile satellite data networks. Satellite Communications is a global industry and the company has developed a large foreign

market, including Brazil, Norway and the United States. Ultima East has rapidly emerged as a success in a highly technical and competitive field. Started in 1985, Ultimate East and its parent company, New East, now employ 50 people, but hey, why should we put money into ACOA?

ACOA with other federal partners and the provinces has also a major role to play in maximizing the benefits from major projects such as the Northumberland Strait crossing project, the link, or as some of us like to call it, the span of green cables, and in helping deploy effectively the workers who will be displaced from cessation of the ferry service. The link will be unique in North America and world class. It will cost about $800 million to build and generate 5,000 person years of employment, 2,000 during the peak employment period.

The project will offer numerous regional benefits in terms of procurement, including goods, services and labour, significant investment opportunities and spin-off activities. The developer is committed under the regional benefit agreement to procure 70 per cent of goods, materials and services and 96 per cent of labour content from Atlantic Canada. I think that is a great idea. I think the member for Egmont would agree with me.

[Joe McGuire, Liberal, Egmont, PE]

I agree.

[Mary Clancy, Liberal, Halifax, NS]

I would bet even the member for Guelph-Wellington would agree with me.

[Brenda Chamberlain, Liberal, Guelph—Wellington, ON]

Agreed.

[Mary Clancy, Liberal, Halifax, NS]

The agencies major objectives are to help ensure that the construction of the project contributes to ACOA's major corporate objectives of long term job creation and attracting new industries, to help ensure that the developer complies with the regional benefit agreement, to help mitigate the negative impact of the cessation of the marine Atlantic operation, to help minimize negative effects on marine Atlantic workers displaced by the construction of the fixed link, to help maximize development opportunities and benefits for the Borden area of Prince Edward Island and the Cape Tormentine area of New Brunswick arising from the Northumberland Strait crossing project.

The federal government is committed to providing $20 million to fund development activities in these areas. As a maritimer, as an Atlantic Canadian, I say hooray.

Like the other Canadian provinces, those in Atlantic Canada must face the major stakes created by the world economy which has become more and more competitive because of trade globalization and free trade. Moreover, Canadians from the Atlantic region must deal with a new reality: a systematic structural transformation of some major industries like the groundfish fisheries.

If ACOA really wants to help the area to cope with the situation, it must absolutely use the meagre monetary resources it has in the best possible manner.

The agency favours direct support of those sectors and companies which hold the most promise in terms of permanent jobs creation for Canadians of the Atlantic region. This government is determined to make the best possible use of its meagre resources by eliminating duplication and overlapping in services and programs offered to businesses and by reducing the number of departments and agencies providing those services.

Besides, the agency will continue to improve the efficiency of public investments by obtaining a greater commitment from the private sector towards the development of small and medium-sized businesses. But it is also the agency's responsibility to administer the resources allocated to it in the most effective way possible.

Discussions about the necessity for Canadian businesses to improve their productivity to allow the country to be more competitive on the markets have become commonplace. However, the improvement of productivity is very important for the overall competitiveness of the country. The government is determined to improve the effectiveness of the bureaucracy, and I can tell you that any other private or public organization would die to be able to show results comparable to those of ACOA.

The agency's move to focus its activities on improving the competitiveness of small and medium sized business is more credible because ACOA has demonstrated it has an understanding of what is needed to improve efficiency and the benefits that are possible.

Over the last three years ACOA has been able to reduce corporate administration costs as a percentage of total agency costs by 20 per cent. The agency is forecasting a further drop of 25 per cent and so costs are expected to be only 3 per cent this year of total costs.

Part of this government's commitment to creating opportunity has been to look at the relevance of all bodies and recommend elimination or downsizing.

Shortly after taking charge of the agency a study was commissioned by Dr. Donald Savoie of the ACOA advisory board. The study was made available by the minister to the public. The recommendations are now being considered and he will soon be making recommendations in a number of areas, including the issue of streamlining the board's operation.

The savings which have been achieved and those which are able to come will potentially allow a transfer of funds from operating costs to contributions in support of SME growth and competitiveness.

We in Atlantic Canada are very happy with ACOA. We are very happy as members of Parliament for Atlantic Canada and as Canadian members of Parliament that this government is committed to the regional development of every part of the country. The best and happiest Canadians are those with economic security. This government and ACOA know how to put that in motion.