Debates of Oct. 31st, 1995

Government Response To Petitions

[Peter Milliken, Liberal, Parliamentary Secretary to Leader of the Government in the House of Commons]

Mr. Speaker, pursuant to Standing Order 36(8), I have the honour to table, in both official languages, the government's response to four petitions.

Petitions

[Paul Szabo, Liberal, Mississauga South, ON]

Mr. Speaker, on this first and new day for Canada I present a petition that has been circulating all across Canada. It has been signed by a number of Canadians from Uxbridge, Ontario.

The petitioners draw to the attention of the House that managing the family home and caring for preschool children is an honourable profession which has not been recognized for its value to our society. They also state the Income Tax Act discriminates against families that make the choice to provide care in the home to preschool children, the disabled, the chronically ill and the aged.

The petitioners therefore pray and call on Parliament to pursue initiatives to eliminate tax discrimination against families that decide to provide care in the home for preschool children, the disabled, the chronically ill and the aged.

[Chuck Strahl, Reform, Fraser Valley East, BC]

Mr. Speaker, I have three petitions this morning to present.

The first petition calls on the House of Commons to do an independent and transparent review of whether we should allow BGH, a synthetic bovine hormone, to be used in Canada.

[Chuck Strahl, Reform, Fraser Valley East, BC]

Mr. Speaker, the second petition draws to the attention of the House that there is a problem with serious personal injury crimes being committed against people across Canada.

The petitioners call for a list of nine different things they would like to see the House of Commons address, including keeping dangerous sex offenders locked up for life, eliminating statutory release and so on.

I agree with my petitioners on that.

[Chuck Strahl, Reform, Fraser Valley East, BC]

Mr. Speaker, the third petition calls on Parliament to go slowly on the negotiations with native land claims in British Columbia and turn the Indian reserves over to the bands in fee simple.

[The Speaker]

Just a gentle reminder that we need not agree or disagree with the petitions we present. We should simply present them and let them stand on their own.

[Brent St. Denis, Liberal, Algoma, ON]

Mr. Speaker, I have a petition from dozens of citizens in the metro Toronto area and small communities around Toronto expressing their support for the mining industry in Canada. Mining employs tens of thousands of Canadians and is an important part of the economic strength of the country.

Questions On The Order Paper

[Peter Milliken, Liberal, Parliamentary Secretary to Leader of the Government in the House of Commons]

Mr. Speaker, I ask that all questions be allowed to stand.

[The Speaker]

Is that agreed?

[Some hon. members]

Agreed.

The House proceeded to the consideration of Bill C-102, an act to amend the Customs Act and the Customs Tariff and to make related and consequential amendments to other acts, as reported (with amendments) from the committee.

Customs Act

[Christine Stewart, Liberal, for the Minister of Finance]

moved that the bill, as amended, be concurred in.

(Motion agreed to.)

[The Speaker]

When shall the bill be read the third time? By leave, now?

[Some hon. members]

Agreed.

[Christine Stewart, Liberal, for the Minister of Finance]

moved that the bill be read the third time and passed.

[David Walker, Liberal, Parliamentary Secretary to Minister of Finance]

Mr. Speaker, I have the privilege of beginning the debate on Bill C-102 at third reading.

I also have the privilege of being the first member of the government to speak to the House of Commons after the rather monumental day we had yesterday. I welcome back all members who participated in the referendum. We will continue to debate the affairs of the country, as we have in the past, with the good spirit and dignity all members bring to the House.

Although we have felt very passionately and very differently in the last while about things, I expect we will continue to work together both in committee and in the House in the spirit of improvement during the coming months.

Before I get into the details of Bill C-102 I will discuss the efforts of the government, particularly the Minister of the Finance and the Department of Finance. I will discuss the improvements we are making in the framework to deal with questions of tariff and trade.

In a general way governments have during the last 10 years endeavoured to change our relationship with our major trading partners. That resulted in the emergence of the free trade agreement, which was a bitterly contested piece of legislation, becoming law in 1988. In its original form it caused a great deal of dislocation in Canadian industry and trade. Since we have formed the government we have made some improvements to it and we now find it an effective framework for dealing in North American trade.

At the same time the less controversial agreement, NAFTA, which was as influential as the free trade agreement, came into effect and set out our trading relationship with Mexico.

More important, from a strategic point of view the underlying agreements around the world have changed in the last few years. I am referring to the World Trade Organization. Canada is now participating in a whole new regime which affects its trading relationships. It affects the way disputes are being adjudicated. It changes the specifics of tariff regimes on a whole number of commodities traded around the world. It is a giant step forward and Canada has played a leading role.

As Canada fights for its interest on the world trade stage, it continues to have a number of disputes with its trading partners and it must aggressively pursue its interests. I do not have to tell the House how frequently the minister of agriculture has had to defend and promote the interests of western Canadian grain farmers against, in the trade sense, parochial interests from the United States.

Similarly, the fur trade industry is threatened by new European regulations which will come into effect on January 1. The regulations will affect a large part of the fur export business. However, the Canadian government, under the leadership of the Minister for International Trade, has been very aggressive in pursuing changes to these regulations which will not only achieve the environmental and humane aspects of the fur trade business but also promote our access to markets.

We have suggested a number of worthwhile compromises. Leaders from Europe have visited Canada. They have visited our research stations. They have visited the north to speak with the aboriginal people involved in the fur trade.

In the end we are going to find ourselves with an agreement which is more acceptable to everyone. Failing that, we are willing to take the dispute to the World Trade Organization. Although not many cases have been made before it since its inception, this is a very strong case and we can promote it.

Returning to the ground level of the World Trade Organization, we are constantly going through our regulations and trade structure to make sure that our own rules and regulations conform to the international situation. For example, our tariffs have to be reviewed constantly.

There is a new trade structure in Canada for arbitrating among different industries. The CITT is an example of a trade tribunal

which allows different industries to present their case as to what the levels of tariffs should be. This too is a new dispute mechanism which we think in the overall picture is a very important change. It gives the different sectors of the economy a chance to make a plea in front of a regulatory body instead of simply making a plea to the political leaders, which at times because of the specific interest and regional needs can be a very difficult act for industries to get involved in. Everybody prefers the new tribunal to the old system. It is dealing with its first case and we will see how that proceeds.

Bill C-102 fits into the good government theme we have been pursuing since forming the government two years ago this month. The red book, the speech from the throne and the budget each year have promoted this good government theme. We believe we are bringing to Canadians changes that are necessary, essential and desired to make for a more effective and productive economy.

A number of the measures in Bill C-102 build on the government's review of Canada's tariff regime announced in the 1994 budget. They are designed to ensure that Canada remains a favourable location for producing goods for investment, and also that Canadian businesses, including small businesses, are placed in a better position to profit from Canada's free trade agreements.

Certain amendments we put into this piece of legislation, for example, the enhancements to duty deferral programs and tariff reductions on manufacturing inputs, are designed to lower input costs for businesses and to maintain and enhance the competitiveness of Canadian businesses in Canadian and world markets. In addition, Bill C-102 provides for a number of technical changes to simplify, clarify and modernize the customs tariff and its administration, and to make it easier and less costly for business to access tariff relief programs.

The amendments to facilitate the processing of travellers at the border will allow Revenue Canada to focus on other important border issues such as smuggling and the processing of growing commercial imports. I want to speak to that for a moment. One of the aggravations which has developed in Canada and U.S. trade is not among big corporations or even in our professional relationships, but is as individuals travelling back and forth.

It has been a long time since these regulations have been modernized. We are trying to achieve a threshold so that people returning from the United States, Europe, Asia, or from wherever they have travelled can bring back a reasonable amount of goods, taking into account what the prices really are around the world, without having to go through a lot of processing and trying to figure out how to cook the books and evade the law.

More important, for those people who conform to the law or who are regular travellers, new systems have been designed for them to cross the border without having the complication of constantly being checked and having to fill out forms. Those people are in the vast majority of Canadians who, when they travel back and forth between the United States and Canada, do so without complication and without any idea of trying to avoid the border crossings. Allowing them to go through quickly allows Revenue Canada without any increase in resources to concentrate on contraband and smuggling. The large movement of goods or services costs the Canadian economy money. They are illegal and we want to keep them out of the country.

These are productive changes which reinforce the message that good government is responsive to Canadians. Good government means providing an easy way for people to carry out their activities in accordance with the law at the same time creating a more effective police force to deal with those who are not conforming with the law.

These changes were first announced last June and have been well received at border crossings. Canadian businesses have not felt any undue hardship because of the increased limits for travellers. In the coming winter travel season Canadians will appreciate the ability to get across the border more quickly. We anticipate an increasing tourist industry for Canadians travelling abroad, but more important of people coming to Canada. It is incumbent upon us to make sure that people can come into this country easily.

Vancouver is emerging as a very important port in the cruise industry. We have done things to facilitate the movement of people into Vancouver and on to those ships without tying them up for hours at border crossings or causing unnecessary procedural delays.

I commend the Minister of National Revenue, who is from British Columbia, for many of these initiatives. He was very proud when the Prime Minister visited the Vancouver airport a couple of weeks ago. That visit by the Prime Minister showed that real progress has been made in the area of customs and customs administration.

I look forward to input from members of the House who have border crossings in their ridings on whether they now find the service more effective. As the service is extended from coast to coast over the next few years, more and more Canadians will appreciate the changes being made by the Minister of National Revenue. He has the full support of the government. I again commend him on his initiatives and activities.

As hon. members may recall, this bill provides for important customs changes that will give Canadian businesses and individuals significant benefits in the long term.

These changes include the improvement of Canada's duty referral programs and the reduction of tariffs on a broad range of inputs. They will allow us to improve the competitiveness of Canadian industry by lowering the cost of inputs.

The proposed amendments will also update travellers' exemptions. Together with other measures proposed in this bill, this provision will facilitate the processing of travellers' applications and allow customs officers to focus on the real priorities such as processing the ever increasing number of trade imports and the fight against smuggling.

The bill also contains technical amendments that will make the customs system more effective. The customs value of imported goods is one of the most important changes in this regard.

The finance committee had a very good hearing last week. Several witnesses met with us and talked about questions of evaluation and answered questions on how to proceed with the law. Tariff is an obscure part of what we do, yet for many businesses and many professionals who specialize in tariff regulations it is at the heart of the way they do business. Witnesses came forward and told us that we should be doing some things in a different way. The government was very interested and listened to them.

The Canadian Manufacturers' Association had a dispute over how we were dealing with tariff relief on certain types of items. After a couple of years it was found that if the government decided that a particular item, for example a table in the manufacturing process, was not tariff free, a tariff could be retroactively applied. The committee broke at that point and national revenue officials went up to my office with officials from the Canadian Manufacturers' Association. Consequently, they came down with an amendment and changes were made.

That is an example of being very productive in the way we approach legislation. It is very respectful of the finance committee.

Under the leadership of the member for Willowdale, the finance committee has to deal with many different subjects. It is probably one of the busiest committees in the House of Commons. The areas under consideration can be very complex. For example, in the last two weeks we have had to deal with the tax treaty with the United States in Bill S-9. We have had to deal with tax treaties with other countries in Bill C-105. We have had to deal with measures from the budget in Bill C-90. We have had to deal with Bill C-103, which is the change in the Income Tax Act to deal with split runs, and we have had to deal with Bill C-102.

All of this shows the wide range of interests members on the committee have and their ability to respond relatively quickly to the needs of a minister, whether it is the finance minister, the national revenue minister, the minister of citizenship, or the heritage minister. We have had to respond very quickly and find out what the subject issues are.

When witnesses come forward and say to be careful, that we may be making a mistake, it is not taken lightly. As I alluded to a moment ago in the case mentioned earlier, changes were made on the spot when we saw that the association had a very good point.

One of the issues I wish to address is to make sure that the witnesses understood why we did what we did and why some changes were not made. The major amendment we introduced in committee was to reduce tariffs on manufacturing imports which would remove the competitive disadvantage that currently burdens Canadian manufacturers, since the U.S. tariff rates on average are lower than ours.

Another amendment enhanced, streamlined and consolidated Canada's duty deferral programs resulting in lower import costs for Canadian exports, easier access to programs by small and medium size business and the greater ability of Canadian regions to compete with U.S. free trade zones.

The most controversial area is the free trade zones. I will take a minute to explain what our strategy is because members opposite probably have local businesses, chambers of commerce, or whatever coming forward and saying they want a free trade zone. They want to have an area where economic activity can take place in a zone free from any taxes or taxes shared by others.

Free trade zones have emerged around the world as a very important tool in reducing costs for businesses in dealing with their markets. The Europeans have one in Amsterdam around the airport. The Americans have several. There has been a longstanding demand for a free trade zone in Canada.

Going back to the early 1960s, at least for the last 35 years we have made a number of efforts to target slow growth areas in this country and create some regional development programs. It goes back to the days of DRIE and DREE. There was also the tax credit which was eliminated last year. There have been a number of them.

The premise behind this is the isolation of slow growth areas from faster growing ones, or in the vocabulary of economists, it is red pencilling certain areas. We can isolate by census track those areas in greatest need. We can take the lowest 5 per cent and say that arbitrarily we are going to help everybody who lives in the lowest 5 per cent of the census track as judged by unemployment rates, industrialization and population size. There are many factors you can take into account. What we have found over the years is that the schemes have not been particularly effective. Despite 35

years of pretty extensive programming and tax measures, there has been limited success in attracting industries that are of long term benefit to a region.

Since we have formed the government the three regional development agencies we have, Western Economic Development, FORD-Q, and ACOA, have all changed their strategy as a result of the recognition of what I have just said, which is that many of our programs have been ineffective. This applies not only to the federal government but also to the provincial governments, who are hesitant to get involved aggressively in regional development schemes because frequently they do not work and they cost the taxpayer a lot of money.

Having said that, we still have to find very effective ways to increase the capabilities of our industries for producing goods and transferring products from the Canadian market into our export markets, because that is our fastest growing area. Those who have been watching the economy very closely for the last 18 months know full well that the growth in our economy has come from exports and not from the domestic market. We still have a reluctant consumer. We have a very low demand on residential housing and commercial real estate is also slow. But we do have, to our credit, a very productive and fast growing export oriented industry, which crosses several different sectors: manufacturing, agriculture, professional services, and the automobile industry. We have been very effective in developing expertise that takes us around the world.

A number of cities have come to us, Calgary being one, as well as some suburbs just outside of Vancouver, Halifax, and my own town of Winnipeg. They have told us that if we help them form a free trade zone they will create an atmosphere to increase exports, particularly into the American market. Winnipeg, through a new group called Winnport, has been very aggressively profiling Winnipeg as a transfer point from the European markets to Southeast Asia and into the United States. I wish the leaders in this campaign every success in achieving its new ambitions.

They have come to us and asked why we do not help them form a free trade zone. They ask us why we do not take the area around the Calgary or Winnipeg airports and create a zone that eliminates tariff barriers and eliminates, in some cases in the United States, labour laws and eliminates a whole number of regulations to make it easier to export to the United States.

We are very much interested in exports to the United States. However, at the federal government level we are preoccupied with enhancing the activities related to the export and not to the geographical region. That goes back to what I said at the beginning. The regional development strategies where we delineate zones for special treatment tend to be counterproductive. If we take an area around an airport, what do we do with the exporter who is two blocks away? Do we want the exporter to take down his plant and move it, or do we want to move the zone over two blocks? If we move the zone two blocks, what about the architectural firm that happens to be three blocks away? Do we move the zone three blocks away?

We have said to the municipal governments, the local development authorities, the chambers of commerce, and the provincial governments that have come forward with different schemes that they should be organizing and stacking up the provincial and municipal programs they want. If they want as a municipal government to zone certain lands and create an industrial park to encourage exporters to move there and show them the benefit of being close to an airport or a truck route or whatever mode of transportation is important, they should go ahead.

What we are interested in is a tariff regime that makes it effective for exporters to get their goods out of Canada and into the United States. We will change the rules and regulations to make it as easy as possible for businesses to import the products, the goods and the services they are working with to make whatever it is they are exporting so they can get them to market with minimal intrusion by the federal government.

We think Bill C-102 goes a long way to accomplishing that goal. We believe that once this becomes law exporters will find themselves within a regime that makes it a much easier decision to get into export markets, a much easier decision to import certain inputs and to add value into export to the United States, Europe or Southeast Asia.

I must say we have deliberately decided not to get into free trade zones as traditionally defined at the local level but instead to tell people who come to us with proposals to do what they think has to be done in their local market and we will be there to support them through a national regime that will facilitate the activity, which will in turn create jobs and economic growth.

This returns us to one of the premises of our government, which is that good government means the production of jobs and the expansion of the economy. The heart and soul of this government rests on the jobs and economic growth strategy. We feel that Bill C-102 contributes directly to this.

The legislation also contains changes to improve the operation of the customs tariff and the Customs Act. One of the most important changes concerns the valuation provision of the Customs Act. This valuation provision was discussed by many witnesses before the finance committee last week.

It is essential that the rules for determining value for duty not be vulnerable to manipulation or abuse. Otherwise, both government revenues and fair competition would be put at risk. In this connection, Bill C-102 contains provisions that would clarify existing Canadian valuation policy. That policy is that the basis for duty and tax assessment on imported goods is the price payable by

the Canadian purchaser. This is consistent with the thrust of the GATT-WTO valuation code and with NAFTA. Furthermore, the provision corrects problems that have also been identified and corrected by some of our major trading partners. These measures will ensure that Canadian producers receive the full protection they are entitled to under Canadian legislation.

In going through the bill in more detail, I would like to begin with the enhancements to Canada's duty deferral program. Duty deferral programs defer or relieve custom duties on imported goods that are subsequently exported but are awaiting formal entry into Canada. Bill C-102 will enhance, streamline, and consolidate Canada's existing duty deferral programs: duty drawback, inward processing, and bonded warehousing. This is what I was speaking to a few minutes ago when I talked about our response to the free trade zone concept.

The results will be lower costs for Canada's exports, programs that are more easily accessible by small and medium sized business, and greater ability of Canadian regions to compete with U.S. free trade zones. This will help attract and keep investment in our country.

I would like to emphasize that the changes are a result of extensive consultation with business and they enjoy broad industry and regional support. I can attest that after consultations with us, people in Winnipeg see more clearly what we are trying to do and how their plan fits in with our own plans.

Related to the enhancement of duty deferral is a change to the Access to Information Act. This change would protect the confidentiality of taxpayer information provided by the importing community under the Customs Act, customs tariff, and the Special Import Measures Act.

This is very important for businesses dealing with us. Most export sectors are very competitive. If individual manufacturers feel that the information about their companies is being shared, they will not participate. At the same time, we desperately need their participation in order to have a better understanding of what is happening.

Another major amendment proposed in the legislation is a reduction of tariffs on a wide range of manufacturing inputs. The amendment is also directed toward the relief of customs duties on manufacturing inputs so that our producers can compete more effectively. This amendment will enhance the competitiveness of Canadian producers both at home and internationally.

In essence, we will be removing the competitive disadvantage that currently burdens Canadian manufacturers vis-à-vis their American counterparts by reducing tariffs on some 1,500 tariff items covering manufacturing inputs to more competitive levels, generally to the levels seen in the United States. Since the United States is our major trading partner, we feel it is very important that our levels be consistent with their levels to maximize the competitive advantage of our industries.

The competitive problem is mitigated by the fact that exporters are entitled to receive full reimbursement of their input duties through duty drawback. However, as of January 1, 1996, existing duty drawback entitlements on exports to the U.S. will become more restricted under the NAFTA commitment. Therefore, to ensure that Canadian manufacturers enjoy the full benefit of Canada's free trade agreements we must bring our tariffs on imported inputs to more competitive levels. The 1,500 input tariff reductions I have referred to account for over $2.5 billion in dutiable trade.

Another important amendment is the increase in duty exemptions for Canadians travelling abroad. This is a simple updating measure, which brings Canada's exemptions into line with those of its major trading partners. The bill will raise the levels of exemption as follows: to $50 from $20 after a 24-hour absence; to $200 from $100 after 48 hours; and to $500 from $300 after seven days, with the once a year limit being dropped. I would remind hon. members that the new travellers exemptions are already operating without disruption.

A further measure in the bill will also help to streamline Canada Customs clearance procedures for travellers under what is known as a basket tariff item basis. Under this measure the government is proposing to replace the thousands of existing categories of goods with as few as 12 categories. That will be of great benefit to Canadians travelling abroad.

In addition to the amendments I have discussed, the bill contains a number of other changes of a largely technical or housekeeping nature. Most will serve to clarify the intent of existing customs and tariff provisions. Perhaps the most important of these deals with the value for duty of imported goods, also known as the valuation provisions of the Customs Act. It is essential that the rules for determining value for duty not be subject to any manipulation or abuse. Otherwise, revenue and fair competition will be put at risk.

Bill C-102 contains provisions that clarify our existing practices in dealing with valuation. It is founded on the concept that the price paid or payable should form the basis for assessing duty and taxes on these imported goods. The valuation policies and practices that are used by Revenue Canada are in fact the same ones that have been in place since the introduction of the GATT valuation code in the mid-1980s. The amendment to the valuation provisions of the

Customs Act will provide protection to Canadian businesses as envisioned by the legislation.

Members of the House will recall that Bill C-102 contains one tariff rate increase, which I would like to explain. The British preferential tariff is being withdrawn from certain rubber footwear, thereby restoring the 20 per cent most favoured nation tariff rate. Former British preferential trade imports will now compete on the same basis as other foreign suppliers. At the same time the bill allows for future improvements to preferential tariff treatment for the world's poorest developing countries.

Finally, several motions were introduced in committee, as I mentioned before, and amendments were made. For the most part the changes introduced by the government were minor technical amendments, but I should like to make sure the House fully understands what these were.

Of note, one amendment responds to requests from Canadian importers by allowing rubber footwear in transit to Canada on June 13, 1995, when legislation was introduced eliminating the British preferential tariff free rate, to take advantage of the lower tariff free rate rather than being subjected to the 20 per cent most favoured nation tariff rate.

The other notable amendment responds to the concerns expressed by the Canadian Chamber of Commerce about the proposal to shorten the filing time limit for remissions under the machine program. The government has responded to this concern by allowing importers up to four years to claim remissions on goods eligible for duty free treatment under the program.

To sum up the specifics of the act, the legislation is about improved competitiveness, increased exports and enhanced employment prospects for Canadians. Bill C-102 will help to promote the continuing good health of Canada's large and vital export sector. It will help Canada maximize the benefits we enjoy under the free trade agreements and the changes proposed in the legislation will be welcomed by the great majority of Canadians affected by them.

As I alluded to when I began my speech, this is a piece of legislation which may not have high visibility to average Canadians. However, to those who are working in manufacturing plants, to those travelling abroad regularly and to those seeking the most competitive position because their own jobs are at stake, this is one of the most important steps the government is taking in its workaday fashion, its desire to make the economy work and its desire to get government right. This is one of the steps we are taking that we think will in the end provide for greater job security and the enhancement of our export sector.

It is with a great deal of pride I presented the bill to the House and have taken it through committee. It will make a major contribution to the Canadian economy. For that reason I call on members of the House to support the bill and to see to its speedy passage.

[Paul Crête, Bloc, Kamouraska—Rivière-Du-Loup, QC]

Mr. Speaker, I find very telling the fact that the first bill to be considered following yesterday's referendum in Quebec would deal with free trade.

I think that, in a way, this confirms the opinion held by the vast majority of Quebecers, who believed that a partnership with the rest of Canada would have been possible. We received some confirmation this morning that the federal government wishes to improve Canada's economic relations with the U.S. through a bill which basically makes trade between these countries easier. This is very telling indeed, in my opinion.

Quebecers were the first to agree with and to support free trade between Canada and the United States and Mexico. I would just add this must go on, and efforts must be made to ensure that markets are available regardless of which political entities maintain them.

This is true particularly for small business, which accounts for 80 per cent of all job creation taking place in Quebec andwhich has taken on the challenge of dealing with the U.S. and Mexico.

However, free trade must definitely be seen as more than merely an economic issue. The challenge for all Quebecers and Canadians is not to trash the social programs that may have been put in place in Canada. It seems to me that this is a major consideration.

We will not win this free trade battle with the U.S. and Mexico by trying to make anything and everything match the American standard. I think that this will be particularly true in what lies ahead in terms of social program reform, including unemployment insurance and old age pensions. The government of Canada will come up with options which it will hopefully table soon and which will enable us to determine whether it has given in to the American competition and agreed to play their game or else decided to play the free trade game while preserving the values unique to our society.

Accelerated harmonization will only result in making people increasingly dependent on the economy, and increasingly the poor will be going after a limited number of available jobs and, while their employability will increase, their incomes, wages, gains may not follow. In examining a free trade bill, therefore, it is important to look at the other side as well, that is to say the larger system within which free trade will take place.

So, yes to free trade, because we want trade conditions to be eased. We even made a proposal in that sense in the referendum, but it was not accepted by a majority of Quebecers. I think that Quebecers should be congratulated for respecting the democratic choice made. Results such as those of yesterday are not necessarily easy for anyone to take, considering that, for each group of 100 Quebecers, a single person made the difference.

This is true regardless of who that person is. I am not trying to make individual distinctions, but the fact is-and you people know what it is in terms of winning an election-that, for each group of 100 persons, a single Quebecer made the scale tip in favour of one side instead of the other. And you know what it is to win elections. Given that result, people deserve a great deal of respect for accepting, as they did in Quebec, such a close decision. This is not to say that we are giving up on our ideals. Certainly not.

I want to point out another aspect of the bill which, I feel, is important for both Quebec and Canada, namely the need to ensure that the protection granted to the cultural industry will not be jeopardized by a bill such as this one, which concerns goods, including a number of concrete physical products. But there is the whole cultural sector, where we will have to maintain such protection. Indeed, the debate that just took place in Quebec made Canada realize how fragile its position was in relation to its U.S. neighbour. We have to take a close look at some of this.

In fact, Americans should perhaps go back to their history books. It seems as though they decided, in recent days, that no change was better than good change. Sometimes, such things lead to short term victories. However, from a medium term perspective, these issues must be looked at more closely, since Canada, as a member of NAFTA, will, in the future, be confronted with such situations, particularly when countries with economies comparable to that of Chile, likely the next nation to join NAFTA, will become partners under that agreement. We will have to show the same respect towards these countries, whether they are big or small, and treat them for what they are.

When the free trade agreement was signed, we were told that it would take a few years before we started to notice a real difference. It is important to understand that this bill allows for an increase in the value of goods travellers can bring back, to bring these values in line with those set by our main trading partners.

With this bill, therefore, there will be concrete action to increase exchanges, to facilitate exchanges. It must be looked at from that point of view, and it will be seen that there may be some advantages to Quebec consumers, Canadian consumers and American consumers once these regulations are in place. At the same time, we must ensure that our economy and our industrial structure are capable of following suit.

There is one aspect which the representative of the government has not addressed, but which I would like to present. This type of

bill will impact upon the regions of Quebec and of Canada, because a change in customs operations can impact upon the number of customs offices there will be in a region, for instance, and on how businesses will be serviced.

I refer in this connection to clause 12 of the new bill, which states:

Goods, other than goods of a prescribed class, that have not been removed from a customs office, sufferance warehouse or duty free shop within such period of time as may be prescribed may be deposited by an officer in a place of safe-keeping designated by the Minister for that purpose.

That may seem gobbledygook to some, but basically the question that must be asked about this clause is the following: in regions where customs offices are closed, will that mean businesses are farther from their markets and therefore less able to service them?

We must ensure that proper choices will be made. There have been some indications that have not been very reassuring. For example, the government has announced the closure of five customs offices in eastern Quebec. There will, in fact, be none further east than Quebec City. The offices that used to be located in Rivière-du-Loup and Rimouski, the customs officers right out to the Gaspe, all those will be done away with. Can these changes be made without negative impact, ensuring that acts such as this one will facilitate trade?

These are matters that must be looked into. Care must be taken to ensure that the thing is done correctly. This is not really a change in legislation but rather a change in administrative application, and the government must ensure that its decisions do not penalize the regions.

I have already stated, and return to the point here, that it is highly significant in my opinion that the intent of this bill is to concretize aspects of the partnership between Canada and the U.S. Throughout the entire referendum campaign we were told many times that the same thing is not possible between Quebec and Canada. It is very surprising, but at the same time very instructive, to come upon it again this morning, and this allows those who have taken part in the debate to see where the reality of that debate lay.

How can we arrange things in this area to avoid the bureaucratic complications experienced in a number of other sectors? Bill C-102 contains many technical elements, such as clause 5, according to which the operator of a sufferance warehouse or duty-free shop:

-shall keep in Canada such records-and shall, where an officer so requests, make them available to the officer.

In other words, customs brokers, the people who work in this sector, have a list of items-a, b, c, d, e, f, and up to i-which they are supposed to keep, so that in future they can produce them for the federal administration. From this side, it looks much like an approach that was often used in the seventies, which I think is not necessarily a good idea for the future, because when I talk to owners of small and medium size businesses today and ask them

what the government, any government, could do to improve the situation, I get two answers.

The first one may seem rather surprising but is understandable. They suggest reducing subsidies but doing it across the board. The second one is about bureaucracy.

I am referring to the administrative paper burden for small and medium size businesses, which means they often have to spend as much time on paperwork as much larger companies in order to meet government regulations. In this bill we will have to ensure that what customs is asked to do-maintain certain records-can be done efficiently without getting into the same problems we had with the GST, for instance.

Finally, Bill C-102 implements the effects of the free trade agreement. Generally speaking, we applaud the fact that these regulations will be put in place, since they will provide for a better trade relationship between the signatories to the free trade agreement, which is what everyone wants.

Quebecers were among the instigators of the Canada-U.S. Free Trade Agreement, and they certainly hope this will continue. At the same time, we should remember that countries do not necessarily need very big borders to engage in mutually beneficial trade. In the nineteenth century, wars were fought to expand a country's territory and thus its domestic markets. As we approach the end of the twentieth century, we realize this can be done quite differently by simply letting everyone engage in trade, thus shifting the scene from the battlefield to the economy, where people who can produce goods and have a stable society are able to survive and contribute to economic development. That is where we are today. And we hope this trend will continue, but always with due respect for the society we represent.

One sector that is more or less affected by this bill and that I would like to bring to your attention is the dairy industry. Farmers in Quebec and five other provinces in Canada signed an agreement in the summer of 1995 which covers milk supply management throughout their territory. This agreement is valid at least until 1999, when it will be reassessed. It could last much longer. The producers reached this agreement in an effort to face the approaching challenge as the GATT agreements reduce tariffs in milk sales, which are of concern to them. We have set them a big challenge. Fortunately, however, they have already faced major challenges.

This sector, which is more vulnerable than a number of others requiring appropriate measures, needs all the support it can get to face the upcoming changes. One is the partnership between Quebec and five other provinces in Canada to deal with this market and also to obtain appropriate forms of assistance from government in increasing productivity to enable producers to provide a better quality product and to make products available in market niches that do not yet perhaps exist. One example of this is biological milk production.

It is important to be able to forecast developments in industry, in agriculture and in other sectors and to see what is coming up. When we do not look to the future, we find ourselves in situations like the one in Quebec last week, when, suddenly, the federal government realized the situation in Quebec was special. After two years of saying that Quebec's situation in Canada would be resolved through good federal government, it had the lesson of its life, discovering that, in both Quebec and Canada, the problems were more than just economic. There are problems of distribution of wealth and of balance between the country's two founding peoples. The message from Quebecers was very clear: without specific change and without concrete proposals acknowledging Quebec's place in this country, in the very near future, a majority of Quebecers could well decide to change the situation.

That was an example involving the agricultural sector. One thing Parliament could do, in my opinion, through the standing committee on agriculture, for example, would be to ensure the options chosen for the coming years, and I am referring not just to the term of the present agreement, which lasts until 1999, but afterwards, are relevant to the priorities of the sector.

There is a sort of distress at the fact that there are fewer and fewer actual people farming, but their economic impact remains as strong. We must not fall into the trap of elected officials who say that, if fewer people are involved, less concern is warranted. We must instead establish the sensitivity of this sector and the type of action to be taken. This latest referendum campaign was a real revelation for me: it showed me the importance of these situations and of knowing how to plan ahead. I think we may be judged on this as well.

Bill C-102 is therefore here to be passed. The Bloc Quebecois feels it should be passed. It will support it. It also feels that bills enabling us to make progress should always be passed. We should never be afraid of change for its own sake.

When change is appropriate, we have to know how to integrate it. When it is not appropriate, we can reject it. However, when it is appropriate, we have to know how to integrate it. This is very important and, much later, this is how what we have done will be judged.

I would therefore like to say in conclusion that Quebec put its faith in free trade and will continue to do so, so that, in the end, each of the characteristics of the components of North America, and of the francophone people in particular, may be recognized,

validated and further developed, and Bill C-102 is one tool that will help in this regard.

[Ian McClelland, Reform, Edmonton Southwest, AB]

Mr. Speaker, the Reform Party also supports the bill. I will be speaking generally in favour of the bill.

Before I do I will take a couple of seconds and speak to the referendum last night. We cannot pretend that did not happen. We cannot just walk into this place and sleepwalk toward a further disaster.

The hon. parliamentary secretary had a few words to preface his remarks and my blood ran cold when I listened. The essence of what he said was that he welcomed those people who were trying to break up our country over the last couple of years and last night. He welcomed them back and said let us go on as before, working in committee and working in the House.

For the last two years going on before meant that every single word that came out of the mouth of the Bloc, and everyone in the Chamber knows it, has been to one direction, toward building a preface for the referendum last night for taking Quebec out of Confederation.

We cannot go on as before. We have to turn the page on that. We have to go forward. We have had 30 years, all of my adult life, of trying to appease people who would break up the country. It is time to stop it. All it does is foster a festering tribalism evidenced last night for everyone to see on national television by the premier of Quebec.

If we pretend this kind of thing is not going on in our country we are not doing our jobs as representatives of the people who sent us here. Tribalism is tribalism and that is what we have had here for the last two years. Let us not call it anything else.

To the embarrassment of Canadians everywhere, because the vast majority of Liberals opposite are afraid to confront the Bloc, to confront this tribalism, to confront these people, at every opportunity they get they back away. They back away from it in committee. They back away from it in all opportunities in the House. We recognize the Bloc has 53 seats. It is the loyal opposition but that does not need to be the way the House operates.

No one has ever retreated to victory. One does not build a country on appeasement. One builds a country on the values we share. We should be defining the values that make up Canadianism to be a Canadian. It does not matter what language one speaks, what race one is, these are the values that unite us as a country.

I will get on to Bill C-102. The hon. Parliamentary Secretary to the Minister of Finance explained in good detail exactly what the bill is all about.

We support it for essentially the reasons he said. It is a step in the right direction. It is a step to breaking down trade barriers. My hon. colleague from the Bloc is quite right when he asks why we would set up trade barriers between the rest of Canada and Quebec when we are trying to knock trade barriers down between us and the United States.

We are in the process of breaking down trade barriers. One of the ways to do that in a free trade agreement is to, as GATT has forced us to do, start looking at the zillions of financial transactions that take place with us and the Americans on a daily basis and ask how we can make them easier. That is what the bill does.

Many Canadians travel very often to the United States, as I have on occasion with my family, with our pooch Rex in the back seat. Coming across the border, as we are wont to do, we add up all of our purchases. Especially after becoming a member of Parliament I start sweating about an hour before I get to the border making sure I have everything because the last thing I want to do is find myself in Frank magazine for having smuggled something across the border.

I start to sweat about an hour before we hit the border and I have a list. By the time we get a little closer my wife is upset. She says: "For goodness sake, why do you not forget it? Let's just go". We have everything listed and we are prepared to stop and pay the 5 cents or 50 cents or $5 duty or whatever it is.

The last time we got to the border and we had these itemized lists the customs agent asked how long we had been gone. I said six days. We had our list ready and he said he had good news for us: "Keep on going, there is no duty applicable on this".

That makes great sense. We are absolutely thrilled the government is doing this. The government is also going one step further. It is trusting Canadians to make declarations on what they have.

It is very prudent of the government to carry a big stick. If we as Canadians break our trust and smuggle things through, we do not pay the duty or we do not pay the sales tax applicable, the government should reserve the right to come down hard on us.

The changes in the bill, forced by GATT, by the free trade agreement, are obviously steps in the right direction which we support wholeheartedly.

However, it would seem to me that if somehow we could inculcate within the whole apparatus of government the notion of common sense, we could make life a lot simpler for a whole lot of Canadians doing business.

I want to recount the story of Western Carpet Distributors Inc. in my constituency. A few years ago it was one of the primary distributors of carpet in western Canada. The carpet manufacturers had distributors who would in turn sell their carpets for them. Recently the carpet industry in Canada became vertically integrated. That means that the manufacturers started to sell directly to the retailers without the middleman, without the distributor. When one started doing it they all started doing it.

This left my constituent, Western Carpet Distributors, in a kind of bind. He had built his business over the years and it was a prosperous, successful business. All of a sudden he found that his suppliers were selling direct and no longer selling to him. The carpet manufacturers bought up many suppliers, but for whatever reason they did not buy his business. He was left in a situation where he was competing with the very companies he had built in the first place by supplying product to retailers.

When faced with this, as a businessman is wont to do, he found other suppliers. The other suppliers he found were in the United States. He then had to import material from the United States and sell in competition to the vertically integrated suppliers manufacturing and selling their own carpet in Canada. Because these manufacturers sold in Canada, he had a significant tariff put on his product.

Now it starts to get fairly complicated. The cost of his product should include the retailing or the selling expense. He was not allowed to claim that and had to pay duty on it, yet his competitors did not. This was a fairly substantial blow to him. There is a thick file at Revenue Canada, as he has been trying to get this changed but to absolutely no avail.

We have another situation in which he is caught up, adjusting to that, paying the premium. He is now in a situation where a company that manufactures in the United States, sells to its Canadian subsidiary, a wholly owned subsidiary who then retails, is able to get a cash discount before delivery of 5 per cent. This is within its own family. The manufacturer sells to its wholly owned Canadian distributor but can take a 5 per cent discount. The same Canadian distributor I am talking about does a deal with his competitor and he is not allowed to take that. That is considered a reduction in price, and he has to pay duty on it.

We are treating two apples like apples and oranges. This should not be. If we are prepared to give individual citizens the freedom and the right to be held personally liable and give them the trust to come back and forth across the border, should we not also do exactly the same thing with Canadian businesses? Should we not give Canadian businesses the same trust and responsibility? If they misuse that responsibility, we should come down hard on them like a ton of bricks. But if in the normal course of business they are doing what is not only reasonable but right and makes common sense, why do we not extend that to this sector as well?

Perhaps it is because there would be an army-I do not know; I am sure no one has even thought of it. But if we were to take this to its natural conclusion, there are a lot of things in our Canadian life that we could do as citizens and do not need governments to do for us. We do not need a whole building full of people with sharp little pencils trying to figure out who is right and who is wrong, who is doing what and who is not doing what. If we are going to have free trade, let us have free trade.

In conclusion, I want to put a few remarks forward on this bill just to ensure that they are on the record.

Bill C-102 and bills like Bill C-102 restore faith in the business sector in imports and exports. They help to bring our country to a competitive level. This is good. However, because of our complicated tax system Canadian investors are still investing outside of Canada more than they are in Canada.

We would support this bill. We would ask that the government continue to bring forward bills such as this and try to make life simpler for Canadians as individuals and businesses so that we can face the future in a much more competitive spirit.

[The Acting Speaker (Mr. Kilger)]

We will now move on to the next stage of debate, where members will be entitled to a maximum of 20 minutes for their speeches subject to a 10-minute question or comment period.

[Jean Augustine, Liberal, Parliamentary Secretary to Prime Minister]

Mr. Speaker, I am very pleased to join in this discussion today on Bill C-102, an act to amend the Customs Act and the customs tariff and to make related and consequential amendments to other acts.

I know there are many in Etobicoke-Lakeshore, the business and industry community, the manufacturers, the exporters, the trading companies, and those who travel either as tourists or in business, who are very interested in these amendments.

I thought I would have to debate some of the issues in the bill and call for support from the opposition. I was pleased to hear the support of my hon. colleague from the Bloc and also support from the Reform member who spoke just before me.

It seems as though there is general agreement among all members that the amendments in Bill C-102 would do a number of things. They would increase the capability of transferring goods to export market, enable us to be competitive, and encourage and improve the capacity for people doing business in Canada and across our borders.

I want to draw attention to some of the concepts of good government as we see them in Bill C-102. A number of measures provided for in this bill build on the government's review of Canada's tariff regime.

I want to take the opportunity to compliment not only the Minister of Finance and the Minister of National Revenue, whose work and whose departments have brought forward these amendments, but also the committee on finance that worked on so many of the pieces of legislation, such as S-9, C-105, C-90, C-103, and these present amendments before us.

This bill introduces tariff reductions on a broad range of goods used as inputs in Canadian manufacturing operations. The bill also introduces changes. I believe there was general agreement on these changes to enhance, streamline, and consolidate Canada's duty deferral programs and also to make them more accessible to all manufacturers. These changes exist not only to enhance but also to reduce input costs. These changes allow for regions to more effectively market the programs in competition with the U.S. free trade zones to attract and keep investment in Canada.

There are several amendments to Bill C-102. In the context of good government, these amendments are designed to lower business input costs and maintain and enhance our competitiveness and therefore create more jobs and opportunities, as we promised in our red book.

Bill C-102 provides for a number of technical changes to simplify, clarify, modernize and bring up to date the customs tariff and its administration, to make it easier and less costly for business to access tariff relief programs. We heard earlier some examples of individuals in the business community who work with rules that are bureaucratic, out of sync with the way of doing business in today's world.

Several amendments to Bill C-102 resulted from broad consultations with the private sector and at the request of those sectors. We heard earlier from the parliamentary secretary about the changes that were made as a result of the input from consultations and presentations that were made to the committee in the drafting stage.

The measures adopted in the bill will do a number of things. They will provide $60 million in import tariff relief to Canadian manufacturers to level the playing field with NAFTA trading partners. I can say that in Etobicoke-Lakeshore business people are very concerned about this area and I am sure will be quite pleased with the tariff relief section.

These amendments will also position Canadian businesses with a duty deferral program to more easily attract investment and compete in expanding world markets with a minimum of customs overhead. Again, I think every member in the House who is in touch with export business people knows the issue is an important one for them.

The amendments will also assist and provide opportunities for provincial and municipal governments to enrich the duty deferral program with local incentives. It is always the way in which we on this side of the House work to ensure that the municipal, regional, and other levels of government work in accordance with policies and with what we are attempting to do in the House.

The improvement of services to travellers through simplification of customs procedures will allow customs to focus on smuggling and commercial importation. Those who have been out of the country recently and have come back into the country with goods would already know the implication of this change.

Enacting this bill will not only ensure competitiveness and make all of the housekeeping amendments, but it will also increase the value of goods travellers can bring back to Canada after absences abroad. As someone who has travelled in the last few months, I had to fill out forms and state what I was bringing back into the country. I also became aware of exemptions Canadian travellers are allowed versus the U.S. exemptions, as we cross from the U.S. into Canada. It is a positive step toward the accord we recently signed on our shared border.

There are several other technical things within the bill. I want to stress a few that I am sure my constituents in Etobicoke-Lakeshore, who are watching very closely the passage of this and who are awaiting its full implementation, would like me to emphasize.

I would like to draw attention to specifically the amendments to allow for possible future improvements to preferential tariff treatment for the world's poorest developing countries to improve their export opportunities. This is very important for a number of people within the communities attempting to do business in this area.

The protection of all goods and jobs and the withdrawal of the British preferential tariff, or the BPT rate as it is called, on certain rubber footwear ensure that all manufacturers and producers are on an even playing field. I mentioned earlier travellers' exemptions and the basket tariff items to facilitate the processing of travellers.

In the context of good government I stress that the amendments will facilitate smooth business across our borders. They will encourage competitiveness. They will respond to our manufacturers, small business people and exporters. They will provide opportunities to provincial and municipal governments to come up with local initiatives to deal with free trade arrangements. All the amendments in Bill C-102 will give Canada the climate to ensure that we have the facility to trade across our borders on an equal footing. The Access to Information Act will protect the confidentiality of taxpayer information provided by importers pursuant to

the Customs Act and the customs tariff. Those changes would be greatly appreciated by business people.

The housekeeping and technical amendments contained in Bill C-102 ensure that competitiveness will be increased. They will also ensure that the exemptions for Canadian travellers will be in line with those of our major trading partners. The amendments will ensure that related and consequential amendments will be made to all acts that impinge upon the Customs Act and the customs tariff.

These amendments are needed and desirable. I join with my colleagues in saying that the amendments are excellent. Therefore I ask members to ensure that Bill C-102 receives swift passage.

[David Walker, Liberal, Parliamentary Secretary to Minister of Finance]

Mr. Speaker, I thank the Parliamentary Secretary to the Prime Minister for getting involved in the debate as it affects all Canadians.

I appreciate that growth is the heart of the Canadian economy. It is very important for all of us to remember that the growth of the wider Toronto area has been in large part based on the export industries. Major cities around Toronto house the auto industry, the direct manufacturers being the big three, and small firms that feed into it such as the parts suppliers. In Toronto a number of different industries export across Lake Ontario into the heartland of American industry.

The message the government is trying to get across to Toronto area business people is that we are there to support them in the expansion of the economy and the expansion of their businesses. We are there to make sure they can get through customs at Buffalo or Windsor quickly.

Individual travellers or those who own businesses and use border crossing points know that there are long lines and it can be very difficult. It is one thing for individual citizens to be tied up for a few hours on a Sunday. It is frustrating if they are with their children. However it is another thing for truck drivers to be constantly held up as they do business. It extends the working day too long. It makes the cost particularly for businesses with just in time delivery systems very expensive.

We are trying to recognize the new realities in the legislation. We are trying to have members such as the parliamentary secretary take an interest because it helps us to give the message to the business community. The hon. member would probably want to go to the business community in Toronto to explain some of these points.

By way of a question I ask the hon. member whether or not the business community on the export side, as far as she knows, was beginning to understand the changes and the fact that we can accommodate tax free transitions as goods are brought into Canada and exported not only into the United States, which accounts for a large part of what we are doing, but also into Europe and South America. The Pearson airport is a centre for such transactions into new markets.

The Toronto business community would be very interested. I ask her to discuss it with her colleagues from Toronto. Perhaps we on this side of the House, those from Ontario and others, could help to take the message into the business community and to promote Canadian exports through the new legislation.

[Jean Augustine, Liberal, Etobicoke—Lakeshore, ON]

Mr. Speaker, the comments made and the questions asked are very important and are at the basis of my decision to speak to Bill C-102.

Perhaps I can speak to the fact that Etobicoke-Lakeshore is geographically centred in an area close to major highways, the Toronto airport and the borders through Niagara Falls and Windsor. There are thousands and thousands of small businesses, small industries and small manufacturers that are very interested in ensuring their businesses prosper, continue to grow and are a hub of activity in Etobicoke-Lakeshore.

When I speak to business people one thing they say is that governments can do just so much. The business people need to keep government out of the way they operate. They need governments to facilitate. They need the bureaucracy, the paperwork and all such things to be facilitating. If the policies, guidelines, rules and tariffs are facilitated, we can do what we do best. We can produce. We can make sure our production lines are moving, make sure we provide opportunities for individuals and make sure we are part of the global world before us.

We should look at tariff regimes and at what we are doing to ensure that the bureaucracy and the paperwork are minimized for businesses. We should ensure that businesses continue to grow and develop and that we produce employment for individuals.

Not only would I take the message back, but I would make sure that businesses in my area have copies of the legislation and that they understand fully what the government is ensuring will happen for them.

[Brent St. Denis, Liberal, Algoma, ON]

Mr. Speaker, I am pleased to join in the debate on Bill C-102, an act to amend the Customs Act. I am especially pleased to do it today, the morning following a major decision in Quebec to keep Quebec in a strong Canada.

I made mention of that because Bill C-102 is all about keeping our country strong. Keeping our country strong has been one of its elements and trade is very important to ensuring that our nation remains strong and continues to grow and prosper for the benefit of ourselves, our neighbours, our children and our grandchildren. We

can now look forward to getting on with other agenda items for the country. We can focus on some very important matters.

While Bill C-102 contains numerous items that on the face of them appear to be relatively minor, people involved in importing and exporting know they are very important.

I will talk about trade in the larger context. Most Canadians, my constituents included, will read in the newspapers from time to time Canada's trade balance compared with the rest of the world or that it has x billions of dollars in surplus with our trading neighbours, particularly our American neighbours to the south. This is an important number but it does not give the whole picture about what trade does for our nation, our citizens, our businesses and the world.

Trade opens and keeps open lines of communication. When the Prime Minister led a delegation dubbed Team Canada to China not long ago, in some quarters he was criticized because there were deemed to be certain problems in China over the issue of human rights. The message was made very clear by the Prime Minister of Canada. We have concerns about what happens in terms of human rights in China, but the way to improve human rights there and elsewhere in the world is principally through trade. Through trade is communication. Through trade is learning. Through trade is job creation and growing and strengthening economies. Trade is the best way to improve our understanding of each other around the world. As is so often the case dollars talk. Free enterprise and capitalism when properly undertaken can in themselves drive the entire world toward higher standards of living and better relations among all people.

The bill is part of the big picture. It is part of what Canada needs to do to ensure that all our small, medium and large businesses compete in the world and at the same time contribute to the world. It is very much a give and take situation.

Canada, with its vast human resources, natural resources and technical know-how, has been able to maintain a relationship with the rest of the world that has been very much to our advantage. We have seen the maintenance of hundreds of thousands of jobs in many sectors of the economy. My riding of Algoma is a riding in northern Ontario which one might not think is dependent on trade. It includes part of Sault Ste. Marie, a border community. I will talk a bit later about what it means to be a border community. We also depend on tourism which is very much a trade item. We also depend on forestry and mining.

I had the chance recently to meet a delegation representing the mining sector during their visit to Parliament Hill on a lobby day. It is easier to appreciate that even mining involves trade, the trade of minerals, the trade of natural resources and also the trade of people.

There is no question that without trade we cannot as a nation make the advances necessary to continually improve the lot of our citizens and the citizens of other countries.

I would like to pick out a few of the items in this bill for special mention. The Parliamentary Secretary to the Minister of Finance and the Parliamentary Secretary to the Prime Minister have capably outlined some of those provisions. I would like to relate some of those provisions to experiences I have had in years past in my own work life, for example measures to deal with duty deferral and the tremendous red tape that is involved in importing an item which will be further processed and perhaps become part of another item which will then be exported.

In the seventies I was the manager of a small electronics manufacturing company in my riding. We were producing an electronic product. It was necessary to import a couple of components which simply were not available in Canada. The red tape we had to go through to import those items which would be included in a final product which would then be exported caused more headaches than I could possibly describe in the short time I have today. The lost manpower, the loss of time and resources were incredible.

If there is one commitment this government will keep to business, particularly small and medium sized business, it is the reduction of red tape. Bill C-102 is going to combine the drawback provisions, the numerous provisions that are presently required of small business. Inward processing and bonded warehousing are other examples of red tape now facing importers who require products from outside the country for inclusion in a product which is made here and then exported.

If there is anything we can do for small and medium sized businesses it is to reduce the red tape. From my experience I can say that this is certainly a most welcome addition to the streamlining this government is committed to making.

Numerous small companies in my riding export. In Elliot Lake, ELMAR Co. manufactures products for the mining sector. More recently it has diversified to include consumer products such as special clothing for handicapped children and other products. It has faced numerous difficulties with the very issue I raised a moment ago, that being the importation of a good for inclusion in the final product which is to be exported.

The fact that Bill C-102 will also streamline and reduce tariffs is a very welcome measure for this company and others involved in export. The books which contain the tariff codes are huge, about two feet thick. We should do whatever we can to simplify and reduce the requirement that small businesses need to call their broker or a government office to find out about a particular product and its code standing. Whatever we can do to eliminate the

necessity of businesses to do that, we are adding that much more to the productivity of that business. Red tape never actually adds profits to the bottom line.

I think business accepts that there needs to be a certain amount of involvement with provincial and federal governments when it comes to paperwork, but there is far too much of it. We made a commitment in the campaign to reduce the amount of unproductive work required by businesses in this regard.

Mention has been made about streamlining border crossings for travellers, tourists and truckers. As I mentioned a moment ago, part of Sault Ste. Marie is in my riding. The border crossing at Sault, Michigan and Sault, Ontario is popular. Some years ago there was a tremendous problem with cross border shopping at a time when our exchange rate was not such as it is today.

Happily, I can report that is not a major problem right now but line-ups are a problem. Line-ups are created because even though 99.9 per cent of travellers are honest citizens and would tell customs or immigration agents the truth when asked, a tremendous bureaucracy has been created to catch the less than 1 per cent of people who are dishonest and might be trying to hide something.

I see in Bill C-102 a recognition that most people are honest. Let us find ways to zip them through the border crossing and instead focus our energies on those who would try to avoid duties or would try to smuggle something into the country.

We have the modern technology and we have seen some pilot projects in B.C. and elsewhere that will lead us to fulfilling the commitment made between President Clinton and our Prime Minister during the president's visit to this country some months ago. That commitment was that the border between our two friendly nations be made more open. We have seen it with open skies in the airline industry. We are also seeing a push toward opening the border, being respectful of the need to manage our different citizenship and our different cultures, but at the same time recognizing that this border, the longest, friendliest border in the world as I understand it, needs to be managed in a way which recognizes that most people crossing the border are honest citizens with nothing to hide.

When I see the provisions of Bill C-102 that are moving us toward that goal, I am very pleased for my constituents of Algoma riding in northern Ontario who are not very far from the U.S. at Sault Ste. Marie.

I do not think we know for certain how this will all work out, what regimes will be put in place to simplify the crossing for visitors and truckers, but if there is a will, there is a way.

I mentioned truckers. What a waste of time for a trucker with a load to deliver to have to wait at the border for some official to go through endless paperwork and examination before allowing him to cross the border. Like our visitors, I am sure 99 per cent of our truckers are carrying legitimate loads to legitimate destinations. Whatever we can do to speed things up, we will be adding to that company's productivity. We will be able to help companies reduce their transportation billings to their customers. Down the line it will mean less expensive products at the consumer level. We are doing everyone a favour when we streamline our border crossings.

Also in relation to borders, there have been attempts by the Manitoulin Economic Development Association to establish a ferry service between South Baymouth on Manitoulin Island and Alpena, Michigan. Sadly, that project has been put on hold for a while because of cutbacks by the Ontario government and because the Ontario Northland Transportation Commission has had to cut back.

As part of the project, I had made a commitment to work with the Minister of National Revenue and his officials to find a way to establish an international ferry between Canada and the U.S. on Lake Huron. Tourists would benefit from a streamlining of the relationship between our two nations.

Even though this project has been put on hold for the time being, it is very important that we push ahead with initiatives right along the border between Canada and the U.S., be they land or marine borders and that the ability for travellers to enter each country be made as easy as possible. This is in recognition of the fact that most people are honest and do not want to deliberately deprive the province or the federal government of their small share of taxes or duties.

There is an issue which arose in committee and which the parliamentary secretary referred to dealing with the valuation for purposes of calculating duty. In simple terms, the confusion arose over the value placed on an imported good if it was shipped from the manufacturer, but the order was placed by a third party who charged a mark-up for the good. The debate was, should the value be the price from the manufacturer or the price the third party actually charged the final user in Canada? Very good arguments were made by a number of excellent witnesses, who said that the price should be from the manufacturer level.

The committee was not convinced that the proposal in Bill C-102 was different from similar practices in the U.S. or Europe, although good arguments were made that we were undertaking a practice that was different from either the U.S. or Europe.

In moving ahead with Bill C-102 and with the valuation provision, we have made a commitment that, as for all trade related legislation, this legislation will be sent to an international panel for review to make sure it fits within the terms of our international trade agreements. A WTO panel will look at the trade provisions of Bill C-102 to ensure that it is consistent with our commitments to our trading partners around the world.

I am sure that if a problem is found, being a responsible government we will look at any comments or suggestions which come back from the WTO panel. The majority of committee members were convinced that the provisions of Bill C-102 with respect to valuation were consistent with our European and American trading partners in particular.

In my concluding moments, I would like to go back to the general theme of Canada as a trading nation. It is important that we maintain our integrity as a good and honest trading partner to the world.

We are a trading partner that can be relied on to deliver product on time because our small, medium and large businesses are strong and able to produce and deliver on time. This requires that we not stand in the way of business to produce quality products, that we do not stand in its way to be profitable and that we ensure our education system, our manpower training system, is always there ready and able to provide qualified workers who know how to produce excellent products, who know how to do the research required to enable Canada to maintain its proper place as a leading trading nation.

We look forward to seeing Bill C-102 implemented.

[Larry McCormick, Liberal, Hastings—Frontenac—Lennox And Addington, ON]

Mr. Speaker, Bill C-102 represents the opinion and the majority belief of most of us that most Canadians are honest.

I cross the border. I live within 30 miles of border at Thousand Islands. My riding of Hastings-Frontenac-Lennox and Addington extends from the Thousand Islands to Algonquin Park. We have a steady flow of tourists back and forth. We have small businesses exporting and importing.

Whether I was driving back from the United States or whether, as in a previous life, I was importing, I could see the honest person with the small company was being confronted with too much paperwork. There was a real lack of support for the small business person who was being put behind the eight ball.

Certainly there is smuggling today. If a person wants to smuggle something he would target our area of the St. Lawrence River. I do not want to see us penalize the honest person. I do hope Bill C-102 will help eliminate some of this overburden of paperwork.

The large corporations in our part of eastern Ontario are expanding at a great rate. Bombardier is shipping $595 million worth of cars to Malaysia and other places around the world. Celanese just got an expansion. It has invested $191 million so it can export most of that. It is a polymer based product. Basically the polymer to make a shirt is the same product used to make a two-litre plastic pop bottle.

These companies have the resources, the income, the background and the experts to help with the trading nation philosophy we have. However, the small businesses do not always have all this information available. I certainly hope Bill C-102 will help in this respect.

We need to send the message as the bill progresses that we will ally with small businesses so they can access this neighbouring market.

Small businesses in my riding are getting the spinoff from these major orders. Almost $1 billion has been invested into our area this year. From that many small businesses can take the opportunity to reach into the United States, Mexico and to the fourth amigo down the road. Yet the atmosphere is not always there which says we care about small business. We all acknowledge small business is the engine of the economy. That is where our jobs will come from. How many people are not certain the government is really looking after small business?

This is a great opportunity for Bill C-102 and for us. It is my responsibility following this to show how this will help our small businesses.

I want to get the opinion of my colleague from Algoma that the mandate of Bill C-102 will help our small businesses and in what ways. I know he has studied this bill much more than I have.

[Brent St. Denis, Liberal, Algoma, ON]

Mr. Speaker, my colleague has always expressed the concerns of his constituents and small businesses across the country very well.

Whatever we can do to lift the burden from small business, be it at the border, in sales tax, at the level of corporate reporting, whatever kind of red tape we can lift from the backs of small business is something we can do to improve productivity, improve the bottom line and improve therefore the ability to create and maintain jobs.

The fact that we can plan through Bill C-102 to move trucks through the border more quickly and efficiently means less time for that load between point A and point B and therefore less cost in terms of wasted fuel, manpower, et cetera. This fact alone may only mean pennies on a item in a load, but multiply that millions and

millions of times; take two pennies on something worth a dollar and that is 2 per cent.

If we do that over and over, day in and day out, the accumulation of benefits to the small businesses trucking goods to consumers, to workers, will accumulate indefinitely. The present value of those would virtually be immeasurable.

When coupled with commitments the government has made to deal through regulatory reform with the issue of red tape in all areas, we are as partners to small business. I know some members of the third party say we should be out of business all together. I am not in favour of government's being overly involved in business but it has a role to play in assisting businesses to trade in the world, to take their proper place in the community, but not to be there as a burden. Government can work with businesses to ensure that even though they have to pay taxes those taxes are used wisely and are as low as possible.

If there is one thing the government can do to assist our economic growth and renewal it is to reduce and eliminate where possible the red tape burden that now hangs over too many small businesses.