Debates of Dec. 12th, 1995

Small Business Loans Act

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

A true liberal. The personification of distinct society.

I shall now turn to Bill C-99, and to make the most constructive criticism possible. We must bear in mind that Bill C-99 was introduced as a result of one the measures announced in the last budget speech, when the finance minister expressed hope that the Small Business Loans Act would become self-financing. As we know, in 1993, the administration of this act is said to have cost the public purse in terms of coverage-let us call it bad debt for the sake of discussion-nearly $32 million on a $4 billion small business envelope.

This $32 million in lost income for the government is expected to grow to approximately $100 million this year on an envelope now totalling $12 billion; that is how much can be loaned to small business through lending institutions.

We agree that this is a burden that must not be overlooked, a burden on the taxpayers. But at the same time, we believe that, before limiting in any way the scope of this bill, which is a good bill, the government should conduct-and this is one of the recommendations made by the official opposition that was almost approved by the industry committee-a cost-benefit analysis of administering the act. Because, if the $32 million or $100 million in question are considered as money injected by the government in the economy, then we have less trouble talking about this shortfall.

Talking not only of cost, whether it be $32 million or $100 million, but also of benefits, would give a better idea of the jobs created, the direct and indirect taxes collected by the government because of such job creation and the survival or expansion of companies as a result of incentives provided by this act.

We know the social and economic importance of jobs-there are consequences, we will never say it enough and this is a particularly good forum to do so-and of lower unemployment; it may be better education for children, less family violence, less violence against women, less violence against children. It may also lead to a lowering in drug consumption; it may be workers more inclined to do their bit to get the economy rolling, that is for sure.

Coming back to this act, before amending it in a significant way, we should bear in mind all the benefits. Unfortunately, the government did not accept the recommendation of the official opposition which had been approved by the industry committee.

Now for the particular provisions of the bill we do not agree with. There are three of them. The first one is the liability, whereby the government guarantees 90 per cent of the loan provided by a lending institution. This liability will be reduced from 90 per cent to 85 per cent. This is our first objection. The second one deals with the fact that we still require personal securities. Thirdly, administration fees will be offloaded onto borrowers through higher interest rates.

As I was saying, our first objection deals with the reduction in liability from 90 per cent to 85 per cent. We argue that it will have particular significance for smaller lending institutions. In Quebec, this means the caisses populaires you find in every village and which make only a few dozen loans per year and which, seeing their protection lowered, will be inclined to lower their risks, and therefore limit their loans to the most secure businesses. Therefore, the effect on smaller lending institutions will probably be felt rather quickly.

Our second objection is even more important, because this bill will have particular impact on high tech businesses, which are the future of our economic development. These businesses are based on the knowledge, the expertise and the skills of the employer, the owner-manager, who cannot offer tangibles guarantees to the credit institution. All he can offer is his skills, which are impalpable, intangible. Therefore, there is a higher risk for the credit institu-

tion; the same thing is true for businesses which are starting and have no background, who have nothing to offer.

Since they have no records to show, these businesses cannot reassure the bank. Consequently, the banker's risk being higher, it is expected that it will be the high tech businesses on which we are counting increasingly, as well as the new businesses that will be mostly affected by these new provisions.

Particularly if the government sees, in the coming years, that only 85 per cent coverage is still not sufficient, it may further reduce its risk. It will be able to reduce it to 80 or 75 or 70 per cent, and this, by way of regulation, without holding a debate in the House, without permitting us to talk about the borrowers' interests, without permitting us to face the executive branch and either applaud or condemn the government's policies. To act by way of regulation in such a matter is not very nice.

The second major objection, the one which maintains the personal guarantee that could be required by the lender, was a commitment made in the red book of the Liberal Party of Canada; it was conveniently forgotten. This makes us sad, because we believe that, because of the guarantee that the lender enjoys through the involvement of the federal government in the transaction, personal guarantees could have been applied instead to another transaction between the banker and the borrower, who could have offered his home, his car or part of his personal wealth as a guarantee to develop another type of project that would not be covered by the Small Business Loans Act.

Finally, we are concerned by the establishment of an administration fee the percentage of which could be set through regulation, again without any debate, surreptitiously, arbitrarily by the government, and also by the fact that the fee provided for in the legislation can be passed on to the borrower through interest rates, so that the lender can get even richer.

Therefore, for these three reasons, we will vote against this bill.

[Werner Schmidt, Reform, Okanagan Centre, BC]

Mr. Speaker, it is a pleasure to rise to debate Bill C-99, an act to amend certain parts of the Small Business Loans Act.

I too was rather impressed by the parliamentary secretary's comments as to how the industry committee functions. From his description of that committee I cannot help but say I have to be one of the most fortunate MPs in the federal House of Parliament. My first experience in Ottawa was to be made a member of the best committee on the Hill. That is really something. My hon. colleague has been on other committees and if this is the best committee, that is great. The committee has worked well.

What has happened with Bill C-99 is an example of what can be done and how Parliament should function because all members put aside their partisan differences, their political affiliations and came to an agreement on some very significant matters that are exemplified by the provisions of the bill.

Members of the Reform Party are going to support this bill, despite the fact we have some rather grave reservations about the whole concept of the Small Business Loans Act. The Small Business Loans Act is based on the provision of a form of subsidy of certain kinds of financing to private enterprise. The reason we can support the bill is because the amendments bring about an accountability of that program and it is supposed to have 100 per cent cost recovery. If that in fact happens, then some of the our concerns are going to be mitigated to the point where they do not exist.

We also want to support this bill because the Reform Party motions that were presented in committee were accepted by the committee and by the minister. It is necessary to recognize the significant role the Minister of Industry played in this decision. Communications went back and forth about the provisions, especially the one which removed the authority of Parliament and shifted it to the cabinet. This took authority away from the representatives of the people and put it in the Privy Council committee to make decisions behind closed doors.

The committee, as well as the minister, saw that was probably not the most democratic thing to do and went so far as to say that it should be taken out. An amendment to that effect was presented to the committee by the Reform Party and it was accepted.

Members need to recognize that these are the kinds of things that Parliament really should be doing. In certain instances we should put aside political and partisan differences and say that for the good of the people of Canada, for the business development of Canadians, we need to do something that will help all of us. In this instance that was accomplished and it was to the credit of all those who had a part in it.

I want to talk about the concept behind the Small Business Loans Act. Reform Party members do not think that the government should take risks on behalf of the taxpayer. Those risks should be taken by the private sector. That is why we object to the principle behind the Small Business Loans Act. However, that is not our concern at this point. Our concern is to make the act better and the amendments do that. That should demonstrate to all and sundry that the Reform Party is a reasonable party.

We recognize there are certain gaps that need to be filled from time to time and we have done that. In this instance that has happened. I want to credit the committee, the Minister of Industry

and the parliamentary secretary on recognizing that and getting to work and doing it.

The House needs to recognize that the financial industry in particular is one of the most difficult industries or institutions to move. The parliamentary secretary suggested that maybe we have moved the banks an inch. I am not so sure. Almost I think that is optimistic.

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

I was exaggerating.

[Werner Schmidt, Reform, Okanagan Centre, BC]

Maybe we only moved them a quarter of an inch. The important thing is we moved them and that is significant.

I recall the first day I met the hon. member at the committee meeting. Members of the committee were deciding what to make our focus. I remember so clearly the absolute commitment that this member of Parliament had when he said: "Mr. Chairman, there is only one thing that this committee should deal with and that is the access to capital by small business. That has to change and that has to be improved. If we achieve nothing else in this 35th Parliament, that is what we have to achieve". He turned to the chairman and said: "Mr. Chairman, that is your job as chairman, to make sure that this committee gets that job done". He did not ever deviate from that focus. His enthusiasm infused other members of the committee. They too said: "Yes, that is what we want to do".

It has been successful. We have moved the banks maybe a quarter of an inch. I hope that a year from now we can say that we have moved them a half-inch or three-quarters of an inch. I would like to move them a mile. If a good idea, a new innovation, of an entrepreneur wishing to establish himself is supported by the financial institutions, that would be a great step forward.

I know there are all kinds of words being used. One of the banks recently announced a $300 million venture fund which it was going to establish so that innovative ideas could take root and businesses could develop. Three hundred million dollars. That bank made almost $1 billion in profit last year. That is not even one-third of its profit. That is not a very great concession on the part of one institution.

We have to go much further than that and I believe we can. If the financial institutions were as concerned about building small business and about supporting the high tech industries as they are about lobbying MPs, Canada would grow. Canadians would begin to do the kinds of things that we imagined, which the banks often stopped.

When will we see the kind of co-operation from the financial institutions which was evident from the various parties that were represented in committee? Surely the imagination of the members of the committee is not restricted to them. Surely the financial institutions can also use some imagination and say: "If 85 per cent of new jobs are created by the small business sector, then we had better get on the ball. Then we will make even more of a profit than we are making now". Sometimes the financial institutions think as far as the end of their noses and no farther. It leaves me dumbfounded.

On the other hand, we also have to say that the banks agreed to do something. They actually agreed to provide to the committee on a quarterly basis numbers which will allow us to compare their performance from one quarter to the next. That is wonderful. If this results in them moving the next inch so that the building and growing process for small business can be achieved, the task and purpose of the committee will have been rewarded.

This committee has demonstrated that it can be done. The amendments to the bill indicate that the parties can co-operate. Reformers support the bill, however, I would like to make it clear that does not mean we like the idea of subsidizing business, whether it is through the banks or in any other way. That being said, we will support the bill because of the things which I have outlined.

[The Deputy Speaker]

Dear colleagues, pursuant to the order made earlier today, the motion is deemed to have been put and agreed to.

(Motion agreed to, bill read the third time and passed.)

Under the same order made earlier today, the House will now proceed to Private Members' Business as listed on today's Order Paper.

The House resumed from November 30 consideration of the motion that Bill C-315, an act to complement the present laws of Canada that protect the privacy of individuals with respect to personal information about themselves obtained by certain corporations, be read the second time and referred to a committee.

Protection Of Personal Information Obtained By Certain Corporations Act

[Grant Hill, Reform, Macleod, AB]

Mr. Speaker, Bill C-315, put forward by the hon. member for Cariboo-Chilcotin, proposes to improve the privacy of individuals with respect to personal information obtained by corporations. I wonder why he is interested in that. Is privacy important?

As our society advances, new technologies are available to us. Let me talk about two of those new technologies. One I favour is a technology called a smart card. A smart card is designed to have

information encoded on it to prevent abuse of our health care system. Abuse of our health care system is something that most Canadians would like to see addressed. A smart card would allow the individual to present themselves to their physician. The card would be encoded, recent medical information would be accessible which would prevent double doctoring, double testing. In fact, it would prevent some overspending of significant amounts of money. A smart card sounds like a good idea for that purpose.

Let us take that idea one step further. I have seen cards used in the grocery stores where an account can be debited very quickly. I heard someone say that those cards could be made smaller and implanted under the skin. It could have a significant amount of personal information on it. It would be scanned, some numbers punched in and bills could be paid that way.

I also heard it said that the little implanted chip would allow a satellite locating system to know someone's location at any time. Now you could never get lost. That is the final step in the use of the smart card for those of us who are too dumb to figure out where we are.

Are there pitfalls on the issue of privacy with these new computer technologies which are available to us? Are people aware and concerned about computer technology? I believe they are. I can give two recent examples. Ontario is bringing out an omnibus bill in which one of the concerns is the issue of privacy of information. The omnibus bill looks as though it will make information more available to legislators and there is been an outcry about that issue.

Bill C-7, recently passed in the House, had significant components which related to privacy. There were a number of very public concerns about the information being made available. I believe this bill has some component of public concern to it and the interest is reasonable.

When can we go overboard with information that should not be made publicly available? That is my question. When do we go overboard?

I would also like to step back a bit and say that there are times when I do not think information is made publicly available which should be made available. I would like to use two examples.

Across from an elementary school in my riding is a house called the drug house. The teachers say that drugs are sold from that house. They have watched this going on for eight years.

I went to meeting with the RCMP, the mayor and some community activists to find out what could be done about this drug house. Apparently people arrive at the house, quickly go in and out, having made their drug deal and off they go. It is known to the police and the principal and it is now known to the MP. Surely this can be stopped. This is not a great thing to have across the street from an elementary school. Also the junior high school is not far away.

The RCMP told me their hands were tied. My reply was that surely they could go to a justice of the peace and say that there are reasonable grounds to suspect and search this house. I was told that the rights of the individual in that house would be trampled on if we did that. I said that surely the rights of the kids in that elementary school would take precedence. I was told: "No, doc, that is not the way it works. Our legal system has put the rights even. The kids and the people in that house have even rights". I was puzzled by that. I do not agree with that.

I have another example. A man raped a young woman, was caught and sentenced to jail. She in her wisdom wondered whether he could have infected her with a disease. She went to the court and asked that the rapist have a blood test because she was living in fear that she may have AIDS. His reaction was: "No chance. My rights of privacy say you cannot touch me".

I say wait a minute, if the rights of the victim collide with the rights of the criminal, and in this case they do and she has a legitimate need to know, whose rights should take precedence? The victim's rights take precedence over his.

When I tell that to students in high schools, you should see how upset they get. I challenge members opposite to ask students in high schools whose rights should take precedence, his privacy or her need to know. They will say very quickly whose rights should take precedence.

There is another side to the privacy issue, the charter of rights and freedoms, which today does not talk about responsibilities and puts those rights side by side. It needs an adjustment.

In a previous conversation there was talk about banks. Banks have information that is profoundly private. Banks want to get into the insurance business. There has been quite a lobby in that regard. They have a monopoly in the banking interests. They now want to get into the insurance business. Since Reformers are really interested in free enterprise, why would I be concerned about banks stepping into the insurance business?

If they are to step into the insurance business they had better be willing to open up the monopoly they have in other businesses. They had better let the insurance companies in there. They had better let the insurance companies have access to Interac. They had better let the insurance companies have access to the private information on an individual's account, where they spend their money, how they spend their money. It is a very unfair advantage if they are competing with the private insurance business.

On the issue of privacy where the banks are concerned great caution needs to be exercised. There is a need for Bill C-315 by the member for Cariboo-Chilcotin. There is a need for a look at privacy in relationship to the electronic age we are in. I would like it considered very carefully.

I suppose the government should bring in its own bill which would get the stamp of approval of the government. The member for Cariboo-Chilcotin might well be a little disappointed that his bill did not get in, but probably he would accept that change is needed. I will watch with interest for those changes.

[Don Boudria, Liberal, Glengarry—Prescott—Russell, ON]

Mr. Speaker, I believe you would find unanimous consent for the following motion. I move:

That, in the event that a recorded division is demanded on Bill C-315 later this day, that such a division be taken tomorrow, December 13, 1995 at 5.15 p.m.

[The Deputy Speaker]

Hon. members have heard both the terms of the motion and the request for unanimous consent to introduce it. Are both acceptable?

[Some hon. members]

Agreed.

(Motion agreed to.)

[Eleni Bakopanos, Liberal, Saint-Denis, QC]

Mr. Speaker, I am pleased to participate in today's debate on Bill C-315. I wish to acknowledge the initiative put forward by the hon. member for Cariboo-Chilcotin in his desire to see the privacy of Canadian citizens protected. However, I feel there are several weaknesses with the bill. As a result, I will not be lending my support to its passage.

The issue of privacy is perhaps a very central one in the technological society of today. However, we must not confuse the broader issue of privacy protection, an issue which we are pleased to see debated in the House in the context of this bill, with the reality of Bill C-315. While it is designed to protect privacy in the context of the sale of marketing lists, it will scarcely achieve that because it is so narrowly crafted.

Here again are some of the features of the bill. It is designed to stop the sale of marketing lists without the consent of individuals whose names are on the list. Before selling a list containing names and personal information of individuals, a federal corporation must send a notice to the individual seeking consent for the sale.

The firm must ensure it receives consent and has not received a request to remove the name from the list. If it has, it must remove the name or particulars pertaining to the individual within 10 days.

A firm which buys a list must also send a notice to the individual informing the person of what is on the list, where it came from and that he or she may request to have their names or data removed from the list. Requests for removal of names or data must be processed within 10 days and corporations must send confirmation to the individual.

Contraventions of the act are punishable by fines of up to $5,000 for the first offence and up to $10,000 for subsequent offences.

I do not support Bill C-315, because I feel that it is flawed in several ways. The definition of "personal information" is not comprehensive and does not meet the current standards of related federal and provincial acts. Marketing lists are not sold, they are rented. In its present form, this bill would not affect customary business practices.

It would be inconsistent with the Quebec privacy act, which includes a carefully drafted section on the use of name lists. Moreover, the bill only applies to a limited number of federally regulated corporations. It would not prevent the vast majority of list sales and would affect only a fraction of the problem of protecting personal information, which would give consumers a false sense of security.

The cost to businesses would be prohibitive, and consumers would receive notices seeking their consent as another wave of intrusive advertising.

The government is considering various aspects of the protection of personal information. Consumers are becoming increasingly concerned about what will happen to their personal information in the interconnected world of the information highway. They want the government to react and legislate.

Canadian businesses want to enjoy the advantages of an electronic business environment where bureaucracy and paperwork can be reduced, where they can create a closer relationship with their customers and business partners and administrative processes can be simplified and computerized.

If there are to be rules regulating the use and protection of personal information, businesses want those rules to be consistent and predictable.

The information highway advisory council presented a number of recommendations in its final report, including a call for the federal government to table flexible framework legislation based on the Canadian Standards Association model privacy code. This model privacy code is the product of a consensus committee of consumer representatives, key industry players such as the banks, telecom companies and the direct marketing association and provincial and federal government representatives. It makes a sound basis of consensus for us to start from when we are thinking about the protection of privacy.

We are studying these recommendations now with a view to action and to presenting a much more comprehensive approach to the problem. The Minister of Industry will be making an announce-

ment for the protection of personal information in the context of the government's response to the report of the information highway advisory council.

While I agree with the spirit of Bill C-315, I believe the points which I have outlined clearly explain why the scope of the bill is too narrow and why it cannot be as effective as the hon. member would like it to be.

[Paul Forseth, Reform, New Westminster—Burnaby, BC]

Mr. Speaker, I thank the hon. member for Caribou-Chilcotin for the introduction of his private member's Bill C-315.

The bill will protect the privacy of individuals with respect to personal information about themselves obtained by certain corporations. There have been many times when my mailbox at home is literally stuffed with so-called addressed junk mail. We all get it and I think it is safe to say most of us do not like it. In most cases it is a request for money for an obscure organization or it is an ad for a product we know will not be exactly how it appears in the picture.

We file this mail in the circular file, file 13, in a place where it rightfully belongs. However, what is it exactly that I am throwing out in that situation? Is it just a letter or a notice from some organization that happened to get my name and address out of the phone book? Chances are it did not come from a phone book but rather from some corporation that had me on its computer list and that corporation probably sold my name as a part of a mailing package to some interest group that has an interest in me as part of a targeted marketing scheme.

What could it know about my personal information? It can include a variety of things and could be gathered from several different sources. It could include a home address, business address, unlisted telephone numbers, physical characteristics, health records, education, employment, financial history, social insurance number, the magazines we read or even what political party we belong to.

Every Canadian who uses credit has their credit rating and related information stored in American computers and filed under their Canadian social insurance number.

Members should recall what was said in the House by the government of the day when the social insurance number was introduced. The government of the day misled us. Canadians, as it is now commonly observed by the commentators, were lied to about the scope, the use and the implications of our social insurance number. However, we cannot now turn back the clock of history. However, we can remember what group broke faith with Canadians on this subject. It was the Liberals.

It is an old story, the social insurance number debate in the House with the solemn promises made, especially in stark contrast to the current state of affairs. Are we any wiser now in this techno age? Are the Liberals? That is why we need much more protection in this general area. This private member's bill is a useful part of that developing awareness.

Opponents might say disseminating such information is not serious. I point out some examples that caused me to believe the issue is quite serious. In a recent Globe and Mail article a story was raised about a computer company that recently sent samples of its Internet browsing software free to four million people. However, when it was used the sample software automatically dialled up the company's home page, gathered information about users without their permission, gathered Internet addresses, types of software being used on the computer and who knows what else.

There are people who are geniuses with computers. They are capable of breaking encrypted codes and getting access to top government information. If they are able to get this type of information with ease there is no question what type of information they can obtain from me all without my knowledge or my permission yet still completely legal.

This bothers me and I am sure that when more Canadians are made aware of this it will trouble them as well.

The Internet is something completely new I am sure to most members of the House. Computer technology seems to be updated hourly, too fast for me to keep up. Last year I purchased a new laptop computer and at the time it was the latest technology. A week after I bought it a newer and better model was available. It is the same with the Internet. Every day someone has a new way of tapping into someone else's information.

Control of access on the Internet remains an unanswered problem. With more and more people accessing it everyday concerns certainly rise. People have expressed a concern to me and therefore I believe something must be done. We cannot sit around and do nothing. If we do, the technological world will overrun us and could literally prevent any protectionist measures from being eventually implemented.

The computer is only one of many ways of retrieving confidential information. I have heard of a hospital employee who supplied a computer disc of names of terminally ill patients to a local funeral home. There are no clear rules surrounding our privacy. The result is a clear lack of individual security.

The largest problem with parallel provincial privacy acts is they do not cover any federally regulated institutions. Bill C-315 affects all corporations as outlined in section 2 of the Canada Labour Code

such as air transportation companies, maybe a radio station or banks or any other work deemed under the Canada Labour Code.

Today I stopped by the Bank of Montreal and picked up an application for an air miles MasterCard to check the terms of application. At the bottom of the application is the fine print that should be read before we sign our life away, so to speak.

I want to read what it says:

By signing below I accept as notice in writing of and consent to you obtaining or exchanging any information about me at any time from any credit bureau, my employer or other person in connection with any relationships between us or those which you or I may wish to establish.

It is incredible. This disclaimer allows the financial institution to exchange my information, so basically other corporations may know what I purchased on my last trip. If any transaction has a name or a number attached to it, it is in the computer. The disclaimer does not indicate what information they can exchange. They simply say any information. Since most of us need a credit card, we sign off on the application and send it in. There is no getting around it. In other words, the banks have us in a catch 22. A credit card is needed to operate in the business world but complete exposure is the price of the card. Obviously all this needs to be changed.

However, the banks are against any federal changes and for obvious reason. They have their own privacy code, so they say. Linda Routledge, director of consumer affairs for the Canadian Bankers Association, said:

The association's voluntary privacy code is already used as the basis for rigorous safeguarding of consumer information by the banks.

The banks say why regulate. We have a code that works just fine. The problem is that with the code it does not allow the consumers the legal right or opportunity to complain. The power of banks is enormous and obviously they will do everything in their power to ward off federal regulators from intervening.

Canadians ought to have a right to control what is done with their personal information. I know my constituents would be completely behind me in that regard. Sure there are people out there who could not care less if anyone in the world knows who they are, what they earn, who they owe and what they owe. I am confident in saying that an overwhelming majority of Canadians are not comfortable with this type of knowledge being freely disclosed. It seems our whole lives are stored on a chip to validate who and what we are. It all comes from the computer. There is a movie playing with a plausible premise, that personal computer information could be put in the wrong hands and used in a sinister manner against the person.

The bill proposed by my colleague is an excellent foundation. It is vitally important that the bill make it through second reading and on to committee. If members have problems with the bill, they would have the opportunity to amend it in committee. We understand bills are not always perfect. That is why we have committees in this place: to make legislation better and to have successive review.

My colleague from Cariboo-Chilcotin has done his homework and produced a good bill. Along with my colleagues who have spoken before me, I too support the legislation and urge my friends from across the floor to do likewise, if not for themselves, then for the personal security of the community that has sent us here as their representatives.

[Jerry Pickard, Liberal, Essex—Kent, ON]

Mr. Speaker, I thank the hon. member for bringing the issue before the House. Even though I cannot support the bill at this time, the protection of personal information is a matter of concern for all Canadians and deserves a comprehensive response.

The bill the hon. member has put forward does not do enough to stop the kinds of privacy invasion Canadians are complaining about. While I share the concerns expressed by the Reform Party about the abuse of personal information in the context of direct marketing, if Parliament is to intervene with new legislation, we had better be sure that we are doing that which addresses the most broad problem of fair information practices.

Here are some areas where I feel we need change. The bill would only apply to corporations. Businesses that engage in the practices are often individuals or small partnerships and would not be covered by the legislation. It applies only to a narrow range of corporations engaging in the federal regulatory activity. It includes those in the banking, telecommunications and broadcast industries but not small entrepreneurs. Consumers want similar protection across a range of provincial and federal jurisdictions. They do not want to figure out who would be responsible.

The bill does not resemble anything now available in the provinces. It gives us no basic model to suggest to the provinces and would be an odd patch on the already spotty quilt of privacy protection. It does nothing to solve the problem of operators setting up outside our jurisdiction, such as in the United States. Technologies are changing and developing quickly these days and information is being collected and massaged in new and different ways.

The bill addresses only the issue of peoples' names appearing on lists or nominative lists as the practices are referred to in Quebec privacy legislation which covers the private sector. With information management systems changing daily it may soon be out of date to talk about lists.

Information travels everywhere and can now be vacuumed up automatically. It is no longer necessary to hand someone a computer tape to trade information. We can simply configure a computer system to make the required links.

When we address the protection of personal privacy we want to talk about the use of personal information in the broadest possible ways. The rules we come up with should address every sector of the economy, not just the direct marketing industry. Personal information is a vital commodity in just about every business from banking to telecommunications to health care.

We need necessary rules for all sectors tailored to meet the special needs of each one. Instead of working on the bill we should support the work that has been going on for several years at the Canadian Standards Association or the CSA. A consensus committee passed a model of privacy code in September of this year, the result of three years of work in the committee with representation of industry, consumers and federal and provincial governments.

The concept behind this model code is that each sector of business industry would take this set of fair information practices and apply it to its own information holdings. They would be accountable for what they did with personal information but they would have some input into the process.

The Standards Council of Canada will soon publish this code of fair information practices as a national standard for Canada. This is a first among developed countries that have addressed the issue of data protection. It is the first time that protection of personal information has been looked at in the context of standards. In this information age that is a very useful way of looking at the matter.

The CSA privacy code has the support of a broad range of private sector organizations, including the Canadian Direct Marketing Association. On October 3 the president of the Canadian Direct Marketing Association called on the Minister of Industry to produce legislation in the House that would use the CSA standards as the basis for legislation federally. He suggested that the federal government encourage the provinces of Canada to do the same in their own jurisdictions.

Much of the information that Canadians are most concerned about is information over which provinces have direct control. For instance, medical and educational records are provincial matters. The privacy commissioner of Ontario released a letter to the Minister of Health last week wherein he expressed deep concern regarding the provisions of the omnibus bill 26 now before the Ontario legislature. That bill would permit the opening of private medical records and release officials from liability for their disclosure.

As the commissioner pointed out in his letter, 92 per cent of Canadians are expressing concern about the misuse of their personal information. It is great concern to them. Unfortunately it is not all protected by law. We in the federal government must do our part to protect consumers' personal information, but we must also start a much broader discussion with the provinces about the issue. Only Quebec, as my colleague from the Bloc has pointed out, has moved to protect personal information held in the private sector.

Canadians deserve and want more protection for their personal information than is offered in the bill. I understand the issue is being studied by the departments of industry and justice with a view to developing solutions that will work for the protection of personal information in all sectors of the economy across the country.

It is a huge and complex issue because the increasing availability and use of personal information and consumer files to target service delivery affect virtually every sector of our economy. Protection of personal privacy is identified as one of the foundations vital to the network world into which we are moving.

The Minister of Industry established the Information Highway Advisory Council to advise him on how to make the most of new possibilities brought to us by the communications network. It focused on the issue and Industry Canada has produced a number of studies. The council consulted experts and produced the following recommendations on privacy.

The federal government should act to ensure privacy protection on the information highway. This protection shall embody all principles of fair information practices contained in the Canadian Standards Association draft "Model Code for the Protection of Personal Information". To this end the federal government should continue to participate in the development and implementation of effective national voluntary standards based upon this model code.

The federal government must take leadership in the implementation of these principles through the following actions.

In co-operation with other levels of government that share responsibility for various sectors of activity on the information highway, it should establish a federal-provincial-territorial working group to implement the privacy principles in all jurisdictions.

It should create a level playing field for the protection of personal information on the information highway by developing and implementing a flexible legislative framework for both public and private sectors. Legislation would require sectors or organiza-

tions to meet the standard of the CSA model code while allowing the flexibility to determine how they will refine their codes.

In co-operation with the CSA working group on privacy and other interested parties, the government should study the development of effective oversight and enforcement mechanisms.

The government should establish a working group to co-ordinate the development, demonstration and application of privacy enhancing technologies for the provision of government services and information.

The government should update and harmonize appropriate privacy protection policies, legislation and guidelines applicable to its operations and to the delivery of government services and information.

Industry Canada should establish a working group-

[The Deputy Speaker]

I might indicate to the member for Lincoln that we only have 10 minutes left. Perhaps he would wish to divide his time with his colleague so that both of them could speak.

[Tony Valeri, Liberal, Lincoln, ON]

Mr. Speaker, I am pleased to have the opportunity to speak on the issue of the protection of personal privacy. It is an issue with which we are confronted every time we open a newspaper or turn on a television. It is entirely appropriate that our laws be revisited on this subject.

When we brought in the current federal Privacy Act in 1982, it was decided that we should address the issue of personal information held by government first, so the act only applied to federal holdings. When the provinces passed their bills they did the same.

It is now time to revisit the issue. The work is well in progress. When the Minister of Industry set up the Information Highway Advisory Council to advise him, he stipulated that privacy be considered as one of the four operating principles. The council was set up to advise the minister on how Canada should meet the challenge and opportunities ahead of us in the global networks of the future.

Industry Canada released a discussion paper to sound out public opinion to see what the Canadian public and Canadian business wanted to see. The response was overwhelming in its recognition of the problem. Consumers and industry did not necessarily agree on the solution, with business pushing for voluntary codes, with most stressing the good work done on the Canadian Standards Association model code, and with consumers demanding that government act and legislate.

The Information Highway Advisory Council combined these two comments and recommended framework legislation based on the CSA standard. The Canadian Direct Marketing Association has added its voice to the debate, calling on the Minister of Industry to table framework legislation based on the CSA standard, and urged the provinces to do likewise in their jurisdictions.

This is the kind of flexible compromise position that is good for business and good for consumers. Business wants to be involved in crafting of marketplace rules and so do consumers. We should recognize this and work on the basis of the consensus that has been built around the CSA model privacy code, soon to be published as a national standard by the Standards Council of Canada.

There is no way that Bill C-315 however worthy in its intentions could be confused as a piece of framework legislation. I am afraid that it falls short of what we need. However the debate that we have had here in the House, thanks to the hon. member of the Reform Party who tabled this bill and so ably defended it, has been a very useful introduction to what promises to be an important and complex issue when it comes before the House.

I recommend that we urge the minister to return to us and report on the progress that has been made. I look forward to that and to the opportunity to bring about the kind of broad based protection for personal information that Canadians are expecting of this government.

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

Mr. Speaker, I want to take the few minutes that are left in this debate to commend the member for Cariboo-Chilcotin for bringing Bill C-315 forward.

I regret that I am unable to support this bill. The issue is an important one but the approach is far too narrow. I believe that if we send this bill to committee and try to correct it we would lose valuable time trying to redirect an approach which simply does not address the concerns Canadians have in regard to the protection of their privacy.

Every time we open a newspaper we see another story about the abuse of personal information, about the potential that new technology has to invade our privacy and provide surveillance of our every movement.

Even the chairman of Microsoft, Bill Gates, in an article which appeared in the Ottawa Sun on September 20 of this year pointed out the need for government action and indeed legislation to protect privacy in the face of new technologies. He used the example of software programs which would replace human travel agents and track customers' tastes and preferences to give the best possible service.

While I applaud the hon. member for bringing the issue of privacy protection to the attention of Parliament, I believe that we could follow Mr. Gates' advice and start the process of unrushed debate leading to intelligent public policies, not by accepting this bill and fixing it, but by building on the work that has been done in Canada. We have among other initiatives the first data protection legislation in North America to cover the private sector. I am referring to Bill 68 in the province of Quebec as an example.

We need a far more comprehensive approach to these issues. This government has been doing the groundwork necessary to provide greater privacy protection.

I would like to ask the hon. member to consider the work that is presently being done. It is important that we look at the teeth that have to be given to any specific bill that is in the House, who will be responsible to hear and act on complaints and what resources they will have. I am suggesting that although this bill is laudable in terms of its focus on the fundamental issue of free and informed consent of the individual as a key issue in data protection, it is not clear how this would work out for other types of information and other types of business.

I commend the member. It is not often that the industry itself asks for legislation, but at this specific point in time the industry has been asking the minister responsible to pay some attention to details in this regard.

[The Deputy Speaker]

The hon. member has two or three minutes to sum up.

[Philip Mayfield, Reform, Cariboo—Chilcotin, BC]

Mr. Speaker, I appreciate the opportunity to do that. I would first like to thank those members who took part in the debate on my private member's bill on personal information. The debate has been most instructive for me as I continue to consider this very important issue. Out of the debate I realize there are some aspects that do need amendment in the bill, particularly the area regarding sales. Leases were not mentioned in the bill.

With regard to the narrowness of the crafting of Bill C-315, I do believe if members did the same research that I did, they would find there are federal and provincial jurisdictions that limit how widely this bill can have influence. It has been purposely crafted in such a narrow manner so that it would not impede provincial influence. It is my anticipation that if this bill were passed it could be a model and a forerunner for the provinces in bringing in their own individual pieces of legislation for the protection of personal information.

I would like to ask fellow members who are being asked to keep in mind what is fair to commercial interests also to keep in mind what is fair to the people whose names and personal information are being used for commercial gain without their knowledge, without their consent and frequently to their own personal disadvantage, if not their jeopardy. While it may seem burdensome for a commercial enterprise to seek the permission of every person whose name they record, buy, sell or lease, as the case may be, why should companies be able to use this information simply because the rightful owners cannot prevent them from doing so?

In summary, I am asking colleagues to consider first the needs of the protection of their constituents as well as themselves and to support Bill C-315 at this second reading stage.

[The Deputy Speaker]

It being 7.50 p.m., pursuant to our Standing Orders, the time provided for debate has now expired.

Is it the pleasure of the House to adopt the motion?

[Some hon. members]

Agreed.

[Some hon. members]

No.

[The Deputy Speaker]

All those in favour will please say yea.

[Some hon. members]

Yea.

[The Deputy Speaker]

All those opposed will please say nay.

[Some hon. members]

Nay.