Debates of April 22nd, 1996

Department Of Health Act

[Pauline Picard, Bloc, Drummond, QC]

Mr. Speaker, we are here to discuss Bill C-18, not raw milk cheese. I think the hon. member is out of order.

[The Acting Speaker (Mr. Kilger)]

With all due respect for the hon. member, the issue of relevance is always a difficult one. A degree of flexibility comes into play. While the debate is on the critical issue of health, I think that the member can raise a health related issue.

As I just said, with all due respect for the hon. member for Drummond, this is a matter of debate; it is not a point of order.

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

Mr. Speaker, does my colleague not agree with me that the minister acted responsibly in ensuring this issue was gazetted and permitted that consultation to ensure that on one hand my dairy producer constituents are protected and that on the other people like Mr. Redmond, this young person paralysed in hospital today, also receive the protection of our health care system, and that the minister, knowing these issues are important, brought it to the committee?

Would my colleague not agree that the minister in his power under this act did the appropriate thing in referring this issue to the gazetting process which permits that kind of consultation with Canadians?

[Paul Szabo, Liberal, Mississauga South, ON]

Mr. Speaker, the chief government whip raises a very important and timely issue. He is quite correct.

As the minister indicated, we want to get all the facts and listen to Canadians before any decisions are taken. That is why he sent out draft regulations for a 75-day comment period.

The government is not prepared to take risks with the health and safety of Canadians. Evidence suggests there may be increased risks of illnesses or disease when consuming cheese made from raw milk. Obviously from the example cited by the hon. member, this is a very important issue and I know it will receive due attention and care by the Government of Canada to ensure the health of all Canadians.

[The Acting Speaker (Mr. Kilger)]

It is my duty, pursuant to Standing Order 38, to inform the House that the question to be

raised tonight at the time of adjournment is as follows: the hon. member for Mercier-unemployment insurance reform.

[Gilbert Fillion, Bloc, Chicoutimi, QC]

Mr. Speaker, I am pleased to address this bill which seeks to create a superfluous department-

[An hon. member]

Superfluous?

[Gilbert Fillion, Bloc, Chicoutimi, QC]

Yes, superfluous. This bill will allow the House to spend over $1 billion and to hire 8,000 people before even treating one person and taking one medical action regarding a patient.

I can understand that members opposite are a bit touchy when questioned about the establishment of such a department, which brings nothing new and which favours overlap more than anything else.

These people of course are very sensitive; they get touchy when we raise this issue. All the more so because a debate like this one allows us to point out some electoral promises in the red book that have still not been kept. When we do that, they fidget and get upset.

The establishment of this department shows us once again that the federal government seeks to act in an area of jurisdiction where it has no authority. I say it once again because this is not the first time this happens, since the House has considered bills to establish other departments also.

Yet, the minister would have us believe that this is an act without much importance, that this is no big deal, as we say where I come from, and that the bill's aim is simply to change the department's name. Nonsense. It is more than that. I will take a few minutes to demonstrate that this is not true.

When we read the bill and look at paragraph 4(2)( a ), describing the minister's powers, duties and functions, we have to pay attention, because that is what the whole bill is about.

This provision says that the promotion and preservation of the physical, mental and social well-being of the people of Canada will be ensured by the department. What a fine plan of action. With such a mandate, however, the minister is using the physical, mental and social well-being of the population to interfere even more in the area of health. This is the federal government's excuse for claiming a legitimate authority over a matter of exclusive provincial jurisdiction. This issue has already been raised in this House, and it has also been raised in other legislatures throughout Canada.

Discussions over this intrusion clearly show that everybody is fed up. The BNA act of 1867 provides for provincial primacy over health. That provision has not been amended, as far as I know. The federal government does not have any power over health except what flows from its spending power, which it interprets in a such a way as to set up departments in areas over which it has no jurisdiction whatsoever. The federal spending power is a licence to do as it pleases.

It is also because of this spending power that this government and the previous one have accumulated a huge debt. While driving us ever deeper into debt, this government is reducing transfer payments to provinces. These payments are being constantly reduced, yet they are made under certain conditions. The provinces can lose them if those conditions are not met. And successive budgets have made cuts.

Let us consider what happened recently in British Columbia, where new welfare measures and structures were put into place. Since these structures and measures did not meet national standards, the Minister of Human Resources Development told the provincial authorities that they would suffer the consequences if they did not move toward those standards, because there would be cuts.

In fact, I do not think that this situation has been resolved. In fact, negotiations between the federal government and that province are still going on. These negotiations are time-consuming and extremely costly. In the meantime, the recipients, the people in need, are getting low quality, substandard services. Therefore, within specific programs, the money allocated to the people in need is not totally spent on them. If we take into account all the money that is spent on management and on discussions at various levels, what is left? Very little, only half of what should have been allocated to the programs and gone directly to the citizens.

However, a lot of existing acts ensure that the doors are wide open-and I say wide open-for the health department to intrude on areas under provincial jurisdiction. There are, for instance, the Criminal Code, the Narcotic Control Act and the Food and Drugs Act, where the central government is getting fully involved.

Of course there is duplication in health care. I have always wondered why members of the armed forces were not treated by the same physicians as everybody else. Why was this kind of health care system created within the armed forces? You certainly know that the army has its own physicians, its own dentists and its own psychiatrists. They have a parallel system for every type of health care service found in a province.

Imagine the costs. Imagine the savings we could make if these people used the services provided by the provinces. But no, the army had to build this large structure that cost a lot of money. Moreover, the army had to have the required infrastructure to accommodate these people, so it built military hospitals across the country.

Let us not forget about the social health services that are mainly for aboriginal people and residents of northern Canada. This is all duplication. Since aboriginal people are under federal jurisdiction, the health department is responsible for them. Duplication, overlap, and at what cost?

I can easily understand why our debt is growing so rapidly. Canadians are making the necessary effort to pay taxes in order to reduce this debt, but the government is not doing what needs to be done. It is creating parallel structures while we can barely pay the interest on the debt.

The federal government has no right to interfere in these areas, but it is doing so anyway. It is doing so with Bill C-18. It wants the right to interfere in the area of health care. This is just one more instrument to launch debates between the provinces, debates that lead absolutely nowhere. Let us leave these rights where they belong.

If members look at the funding aspect, they will see that something is wrong in this bill. Members will recall that transfers to the provinces do not come from the health department but from the finance department.

This is a situation I would call ludicrous. The Department of Health will set its national objectives, the standards to be met if the provinces are to get their money, but it is the Minister of Finance who eventually-although the cost has not yet been calculated-will make the decision, depending on what he wants to have as a deficit or a debt. He will decide what amount will be transferred. He sets the amounts himself without assessing the costs of the national standards.

Putting it more clearly, this means that the Minister of Health tells the provinces what they need to do, and then the Minister of Finance hands over the money: "Manage with that as you can". Obviously, reducing transfer payments indicates a lack of cohesion somewhere. The objectives remain the same, but cannot be met if the financial resources are not there.

In Quebec, what is transferred or not transferred, depending on the mood of the Minister of Finance, is tax points. Naturally, in the aftermath of the massive cuts to health and the Canada transfer to the provinces, Quebec will soon be receiving no more real money, just tax points. What does that mean? It means that the government will have to either limit services or increase taxes in order to provide quality services, yet with less money.

What makes the situation ridiculous is that, once again, the federal government will continue to dictate to Quebec what it must do, while the federal government will not cough up one cent more.

Contrary to what one might think, the Minister of Health plays a very great economic role as well. That economic role has repercussions within each region. When there is a shortfall somewhere, cuts somewhere, the entire population, the entire region feels it. In Health Canada's 1995-96 main estimates, it indicates financial requirements of a little more than $1 billion for operations.

Very often, as I said at the beginning, when that money is spent on infrastructures or discussions here, there and everywhere, there is very little left for medical care for Canadians.

I would also like to focus on the national forum on health, held in October 1994, when we were here in this House.

It was obvious that this government wanted to increase its involvement in the area of public health. Visibility was the watchword of this forum. This government tries to pounce on everything that moves to increase its visibility. Instead of increasing its credibility, it increases its visibility. Flags are going to be flown all over the place; we are inundated with flyers from each department; they are very visible. But when the time comes to provide heath care, the government is no longer visible. It does not believe in high quality care. It would rather have little red flags on paper, brochures, and cheques instead of improving its credibility.

It is no wonder so many people no longer trust politicians. It is very simple. When you do not take any action, when you act solely to be visible, you cannot expect any other outcome.

As a matter of fact, as far as the national forum is concerned, I remind the House that every single province, not only Quebec, openly criticized the government's attitude. Why? Because the government wanted them to play second fiddle with regard to health. In this respect, many people can be quoted. The Conservative health minister in Ontario criticized the federal government, saying that the federal government's attempt to impose its own interpretation of the health care principles should be opposed.

The Conservative premier of Alberta was of the same mind. He condemned the inflexibility of the federal government in that area.

Furthermore, this government reneged on one of the red book promises. Let me quote it. It is said in the red book that "a Liberal government will establish a National Forum on Health", up to here everything is fine, "chaired by the Prime Minister", imagine, the Prime Minister himself will chair the forum, downplaying all other participants, but even that would have been acceptable, "bringing

together for public discussion the major partners and parties involved with the health of Canadians". So everybody was to be on the same level, talking about health problems, with a moderator in the centre who just happens to be our Prime Minister.

In spite of this firm commitment, again stated clearly in the Liberals' red book, the federal government refused to let the provinces participate fully in the proceedings of the national forum on health.

This government wanted to grant provinces observer status only.

As you are indicating that my time is almost up, I will conclude with the following. The provinces are should be the main players as far as health is concerned. The central government should review its intention to cut the Canada health and social transfer. It should no longer offload the deficit onto the provinces. Why? Because this impacts on the quality of health care and adds to the financial burden of each and every Canadian.

[Suzanne Tremblay, Bloc, Rimouski—Témiscouata, QC]

Madam Speaker, I rise to speak, at third reading stage, on Bill C-18, an act to establish the Department of Health and to amend and repeal certain acts.

I believe it is essential to remind my fellow citizens that health is a provincial jurisdiction under sections 16(7) and (16) of the BNA Act of 1867, and the interpretation given to it by the courts. It is clearly established and recognized that health and social services are exclusively under provincial jurisdiction. However, the federal government has often intruded in the health sector, over the years.

Since the beginning of the century, the federal government passed the following health legislation. In 1919, it created its health department and gave its first grants; in 1948, it put in place a national program of health grants; in 1957, it passed the federal act on hospital insurance, in 1966, the medical care act and, in 1984, the Canada Health Act that superseded the 1957 and 1966 acts.

Moreover, this act established the federal principles governing the Canadian health system, enacted national standards and, by the changes it imposed, limited Quebec's autonomy. Bill C-6 of 1984 set out the criteria to be met by the provinces, including universality, accessibility, portability, public administration and comprehensiveness. Otherwise, the federal government might withhold its financial contribution to health care.

The Quebec government has always condemned federal meddling in the area of health. In 1926, the Taschereau government-a good Liberal government, needless to say-was the first one to oppose federal interference in health care, and all successive Quebec governments have followed suit.

Although the health and social service system appears to have originated in Ottawa, it was only used as an excuse by the federal government to gradually encroach on an area of provincial jurisdiction. Every federal intrusion in health care forced the Quebec government to respond in order to regain full control and assert its determination to exercise its authority in an area under its exclusive jurisdiction.

Let me remind the House, for example, of two great moments in Quebec's history with respect to health care. In response to the Hospital Insurance and Diagnostic Services Act passed by the House of Commons in 1957, Jean Lesage, then the Liberal premier of Quebec and a former minister in Lester B. Pearson's federal government, set up Quebec's hospital insurance plan, which was approved by the National Assembly in 1961.

After the House of Commons passed the Medical Care Act in 1966, Robert Bourassa's Liberal government introduced the health insurance act, which was adopted by the Quebec National Assembly in 1970.

Over the years, the federal government's meddling cost taxpayers more and more money. Ottawa could afford to be generous as it was using the provinces' money or buying on credit through its own unlimited spending powers, which played a large part in getting all of us into debt.

May I remind the House briefly that, during the second world war, the federal government invoked the war effort to encroach on the area of corporate and personal income taxes, which was then under provincial jurisdiction. This measure, which was supposed to be temporary, is still in place. The federal government has clearly succumbed to the temptation of exerting greater control and, instead of giving back to the provinces the taxation powers they enjoyed before the war, granting subsidies linked to the establishment of federally approved programs.

By exercising such control over tax revenues, the federal government has been able to keep on centralizing, which caused untold duplication and shameful squandering of taxpayers' money. Worse yet, to make sure they would remain in office, generation upon generation of federal politicians distributed presents, even if it meant putting future generations of Quebecers, Canadians and, just for you, Madam Speaker, Acadians, into debt.

In the report of 1987 commission of inquiry on health and social services in Quebec, Thomas Dupéré wrote that establishing federal programs merely shifted to the federal level a debate that had already started at the provincial level and would have led to the same results over the same period of time, give or take a few months or a few years.

It is therefore pretentious to claim that, through its involvement, Ottawa has been an instigator in the social and health area. It would be more accurate to say that Ottawa's action was made much easier by the concentration of resources that took place at the federal level during the second world war. Ottawa took over the provinces' idea of developing a health care system. After the federal government made an about-face in 1945, refusing to give back the taxation it was supposed to have taken away from the provinces

only on a temporary basis, Ottawa had the means to act, to carry out its plans to encroach on exclusive provincial powers.

Today, in spite of the fact that health is clearly an area of provincial jurisdiction, Health Canada looms large. Its operating budget for 1995-96 is $1.5 billion, $347 million of which just goes to pay federal employees, from Newfoundland to British Columbia, to administer something that essentially comes under provincial jurisdiction and $703 million to procure goods and services for the department, while transfer payments to the provinces are $7 billion for the same year.

Altogether more than $8 billion is being spent in an area that comes under provincial jurisdiction. That is one quarter of the past year's deficit. When we look at all the departments where there is duplication, it is easy to imagine what how much money this government is wasting and to see how the current situation came about.

However, the federal government never indicated that it intended to loosen its grip on the Canadian health system. Also, during the election campaign, the Liberal Party of Canada wrote in the red book, and I quote: "The role of the federal government should include the mobilization of effort to bring together Canada's wealth of talent and knowledge in the health care field. This is a societal issue in which every Canadian has an interest. The federal government must provide the means to ensure that Canadians are involved and informed, and can understand the issues and the options".

For once, the Liberal Party kept its word. Last June 29, even though all the provinces were opposed, the then Minister of Health announced the creation of the national forum on health. The forum was to define a vision of the Canadian health system in the 21st century, to promote dialogue between Canadians concerning their health system, and to set priorities for the future.

On October 14, 1994, Quebec's minister of health and social services, Jean Rochon, wrote to the federal Minister of Health to tell her, and I quote: "The mandate of this forum is an encroachment by the federal government in a field which essentially falls under provincial jurisdiction, and that is unacceptable. The clearly stated objective of your government, which is to give the forum a mandate to define future priorities, in the context of health care reform, and to define the means to that end, is a direct intrusion in provincial governments' affairs. This is something that cannot be hidden behind the consultative nature you ascribe to the recommendations that would come out of this forum".

Incidentally, Mr. Rochon, the Quebec Minister of Health, was recently congratulated for the courage he displayed in implementing the health reform in Quebec by one of his predecessors, Marc-Yvan Côté, who is well known to the Liberal Party of Canada, since it recruited him to be its chief organizer in Quebec, in anticipation of the next federal election.

In his letter to the federal health minister, Mr. Rochon added that Quebec had not waited for the federal government to adjust its health care system according to current needs, and that extensive public consultations had already taken place.

Moreover, he reminded his federal counterpart that cuts in health related transfers to the provinces were not the best way for a government to protect and to promote health care in Canada.

Indeed, it is precisely these cuts that undermine the very principles stated in the Canada Health Act.

While the federal government was pursuing its efforts to take control over a field of provincial jurisdiction, it unilaterally and drastically reduced its contributions to provincial health programs. In that regard, in the spring of 1995, the National Council of Welfare, whose role it is to give advice to the Minister of Health, warned the government against such a situation, saying that it would be very hypocritical to reduce contributions to provinces while increasing the requirements they have to meet.

Yet, this is precisely what is happening. I should point out that, when the finance department created the program called established programs financing, through which transfers to provinces are made regarding social services, health and education, it was understood that such transfer payments would be indexed according to the growth in the Canadian economy.

Since 1986, the federal government has been using money from these transfers to contain its deficit. It made a unilateral decision, without any regard for the provinces' ability to cope. Between 1982 and 1995, it saved, at the expense of Quebecers, $8 billion in the health sector alone. This shortfall forced Quebec to increase taxes to make up for the federal withdrawal.

According to a study carried out by the C.D. Howe Institute between 1988 and 1992, while established programs financing expenditures remained stagnant, other federal program expenditures increased by 25.5 per cent. In other words, while the federal government was telling the provinces to tighten their belts, it continued to spend right and left and to add to the deficit and the debt.

This lack of stability in federal health expenditures is a serious problem. Expenditures are in turn frozen, reduced or de-indexed according to the mood of the finance minister and the cash requirements of his department. We no longer have a fixed funding formula approved by all the governments. Funding is unilaterally

and arbitrarily determined by the federal government, without any consideration for the real costs of the provincial programs.

This constant change in the funding level, which is always dropping, has become a real nightmare for those involved in the health industry. What is worse is that the finance minister does not seem to realize that he is no longer juggling only with figures now, but that he is playing with the health of the Canadian population.

Last February, in his latest budget, the finance minister decided to reduce once again health transfers to the provinces. In this area, Quebec stands to lose $650 million in 1996-97 and $1.9 billion in 1997-98. That must be part of the benefits of federalism. It is important to note that when a federal government member says that federalism is profitable, he means it is profitable for the federal government, but costly for the provinces which do not have as much leeway as they used to.

In the spring of 1995, the National Council of Welfare made these comments about the planned cuts to health care funding, and I quote: "The measures announced in this budget would likely destroy a national social services system that took a whole generation to build".

Here is what the British Columbia health minister said about these cuts, and I quote:

"Last February's budget which cut transfers to provinces for health has forced provinces to look at unpalatable cuts that threaten medicare".

If Canada's health minister was so concerned about the health care system in our country, he would have done what his colleague from Notre-Dame-de-Grâce did and would have opposed his government's last budget attacking social programs. He would have stood up in cabinet where these decisions are made and would have set the people's pressing needs for quality health care in Canada against the finance minister's figures. The health minister could have suggested to the government to get the money from those who benefit from many tax shelters, starting with the Liberal Party's generous financial backers, and not forgetting of course the finance minister's own companies.

But this is not what he did. Today, he is proposing to us an old bill that was severely criticized by all stakeholders at second reading, during the first session of this 35th Parliament. A bill that is nothing but rehash, a bill that perpetuates the federal government's interference in health care, an area-we will never say it enough-under provincial jurisdiction.

Subclause 4(1) of the bill describes the powers, duties and functions of the minister while subclause 4(2) spells out what these functions encompass and deals with the protection of the people of Canada against risks to health and the spreading of diseases. Having seen where that got us with raw milk cheeses, we can easily imagine that on the strength of these provisions the federal government would not hesitate to meddle further in the administration of health care in Canada.

The bill before us is hypocritical enough to state, in clause 12, and I quote:

Nothing in this Act or the regulations authorizes the Minister or any officer or employee of the Department to exercise any jurisdiction or control over any health authority operating under the laws of any province.

When provincial health funding is cut this drastically, there is direct interference in the operation of agencies operating under provincial authority, by reducing their ability to continue to offer a satisfactory level of services to the public.

The Bloc Quebecois condemns this bill, because it sanctions the interference of the federal government in areas of provincial jurisdiction. In the health field, Quebec has its priorities and must have the right to manage them independently, in accordance with the current Constitution. This bill does not talk about ensuring satisfactory and stable funding for health care. The minister has abdicated his responsibilities in this field and is taking his orders from the Minister of Finance.

This bill attacks the provinces to such an extent, without helping them to solve the pressing problems they face, that even the most ardent federalists have decided to fight the initiatives of the health minister. Ontario's Conservative health minister said on September 19 of this year that there should be opposition to the federal government's desire to dictate to the provinces its interpretation of the principles that should govern the health care system. That same day, Ralph Klein, the Conservative premier of Alberta, also condemn the federal government's inflexibility, with reference to the then minister.

In a joint communiqué, on the occasion of a meeting of health ministers, the provinces declared that the federal government's desire to take unilateral decisions with respect to health funding, the interpretation of standards, and the setting of arbitrary deadlines for the termination of consultations was certainly not helping to resolve the problem.

Because the federal government is not able to protect the public adequately against risks to health, and because its continual cuts constitute the main threat to the health of the people of Quebec and of Canada, the federal government should withdraw from the health field and transfer the corresponding fiscal resources to the provinces, allowing them to take over responsibility for this area with, at the very least, the same level of effectiveness as the federal government.

[The Acting Speaker (Mrs. Ringuette-Maltais)]

Is the House ready for the question?

[Some hon. members]

Question.

[The Acting Speaker (Mrs. Ringuette-Maltais)]

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

[Some hon. members]

Agreed.

[Some hon. members]

No.

[The Acting Speaker (Mrs. Ringuette-Maltais)]

All those in favour of the motion will please say yea.

[Some hon. members]

Yea.

[The Acting Speaker (Mrs. Ringuette-Maltais)]

All those opposed will please say nay.

[Some hon. members]

Nay.

[The Acting Speaker (Mrs. Ringuette-Maltais)]

In my opinion the yeas have it.

And more than five members having risen:

[The Acting Speaker (Mrs. Ringuette-Maltais)]

Call in the members.

And the bells having rung:

[The Acting Speaker (Mrs. Ringuette-Maltais)]

Division on the motion is deferred until Tuesday, at 5.30 p.m.

Agreement On Internal Trade Implementation Act

[Ron Irwin, Liberal, for Minister of Industry]

moved that Bill C-19, an act to implement the Agreement on Internal Trade, be read the third time and passed.

[Morris Bodnar, Liberal, Parliamentary Secretary to Minister of Industry]

Madam Speaker, I am pleased to speak in favour of Bill C-19. This is an important piece of legislation and marks a major advancement in the quest to reduce barriers to trade within Canada and to open up the domestic market to the freer flow of goods and services.

Bill C-19 is the result of a long process of consultation which has included many Canadians: people who are concerned aboutthe economic future of Canada; people who want to expandthe scope for employment and wealth creation for the benefit of allCanadians.

In the years since 1867 the Canadian economy has grown and evolved in ways never imagined by the original Fathers of Confederation. The federal government still has constitutional responsibility for trade and commerce but over time individual provinces have assumed prominent roles which have influenced economic growth and have set regulations for the conduct of trade and commerce at their levels. As a result of this, a variety of ad hoc measures have been introduced over the years.

We now have a system of federal, provincial and territorial trading arrangements and regulations which often conflict, which sometimes discriminate, and which can put Canadian businesses at a competitive disadvantage. Such barriers can cause the inefficient use of our economic resources and can limit the ability of our industries to take advantage of economies of scale and to maintain competitive market positions.

There are many examples of such impediments to trade in Canada. There are different professional and occupational standards in different jurisdictions which can work to limit the mobility of labour between provinces. Some provincial liquor boards have followed selective listing policies which have the effect of discriminating against products from outside their jurisdictions. There are different transportation regulations covering safety codes, inspection arrangements and vehicle standards which make it difficult for truckers to operate in different provincial markets.

Many local governments and other entities that have spent taxpayers' dollars practise procurement policies which give preference to local companies so that the ability to offer competitive sources of supply can be determined by geography and not by traditional marketplace measures such as price and quality.

Some jurisdictions seek to attract new investment by offering special incentive programs for industry development which can distort normal risk-reward equations in the investment marketplace. Regulations governing construction procedures and building standards can differ from one jurisdiction to the next and cause difficulties for construction companies and labour alike.

These are just some examples of barriers and impediments that can impact negatively on our ability to do business openly and freely in Canada. There are many many more. Thus we have in Canada a patchwork of regulations, standards and other barriers to interprovincial trade which have grown around us and which have become an unacceptable feature of the domestic marketplace.

The business community has been aware of the negative impact of this situation for some time. Our government as well as other governments have heard from many representatives of the private sector who have assessed the problems in the domestic trading environment and who have been pressuring us to make necessary changes to open up the system.

These people and many others, including colleagues at the provincial and territorial levels, have recognized that a new trading regime has to be established, one based on more open interprovincial trade, one that will not impede the movement of people and investment within the country and one that will give us a mechanism to allow for co-operative approaches to the resolution of domestic trade disputes.

The agreement on internal trade, which was negotiated by the committee of ministers responsible for internal trade and signed in July 1994 by the Prime Minister and all the other first ministers of this country, gives us the framework to create such a new regime. Bill C-19 puts in place the legislative changes that need to be made at the federal level in order that the agreement can be implemented and the process of change can continue.

With these changes, we will ensure that the framework for a new regime will be in place and that we can continue the work to remove barriers to interprovincial trade in goods and services as well as to reduce impediments to the movement of workers and capital between provinces. We will establish the forum for the resolution of individual trade disputes without resorting to the courts.

By passing this bill, the House will show leadership to other Canadians and will confirm the intent of the federal government to make the changes necessary to create a new trading regime within Canada, one that reflects the political and economic realities of the day.

As I mentioned earlier, the process leading up to this bill has been a long one. It has involved many people and it has considered many issues and perspectives, both national and regional.

Federal, provincial and territorial governments at both the ministerial and official levels have been extensively involved. It is important to note that political parties of all stripes and regional perspectives have been involved in the process. So have many sectors of the private sector, including business, labour and consumer organizations.

A notable aspect of the process has been the spirit of co-operation which has consistently characterized the negotiations. There has been a high degree of goodwill from all parties. There is a shared recognition that the domestic trading environment must be improved and that it is up to governments to meet this need head on.

The agreement represents a major step toward the shared objective of improving the domestic trading environment and eliminating the barriers to trade, investment and labour mobility. It gives us general rules that prevent governments from erecting new trade barriers and which require the reduction of existing ones in areas covered under the agreement. As well, it gives specific obligations in 10 economic sectors, streamlining of regulations and standards, a formal dispute resolution mechanism and a commitment to liberalize trade further through continuing negotiations.

This last point is important because the bill before the House does not signal the end of the process. It signals our support for a continuation of the process of domestic trade policy renewal and our commitment to make it work for all Canadians.

The committee of ministers of internal trade, which achieved the current agreement, is now constituted as a permanent body to carry on the work of domestic trade policy renewal. A secretariat has been set up to provide administrative and technical support to ministers and negotiators in this work.

A key aspect of the agreement, indeed, a key aspect of any trading agreement, is the method by which disputes that may arise under the agreement are to are to be resolved. While international trading agreements have useful lessons for us in Canada, none of their precedents was directly suitable. To meet the special needs of the Canadian situation, an approach was needed that would accommodate the federal-provincial system of power sharing. A dispute settling mechanism was needed that would deal with both general level compliance complaints, those based on the principles of free trade, as well as specific complaints from consumers and private business interests, those complaints that cannot be resolved by governments themselves.

The challenge was to find solutions that would accommodate the desires of the provincial governments to retain the flexibility necessary to pursue their legitimate political and economic objectives under existing constitutional power sharing arrangements while at the same time providing a dispute settlement mechanism that would offer open access and cost efficient resolution without resorting to court action and enforceable implementation. This was the challenge and the agreement has given us a new model for handling trade disputes, a made in Canada model.

The agreement on internal trade sets out the framework for the new dispute resolution mechanism that is unique to the Canadian situation of federal and provincial power sharing and that provides for open access to the settlement process. The approach being followed commits all parties to the use of conciliation to address problems that may arise from the provisions of the agreement, including issues arising from the application of its principles, its rules and its individual sectoral agreements.

Issues are to be resolved in the first instance on a government to government basis. In the case of an issue or problem of concern to a private individual or business that governments cannot or will not deal with and where the private interest is not satisfied, the complaint can be raised directly with a dispute resolution panel.

This is an important feature. It means that individuals as well as governments can bring forward issues for consideration.

In other words, a private party that feels harmed by an alleged unfair trade practice or policy can bring his concerns forward whether or not the government under whose jurisdiction a question has arisen agrees that there is a reviewable question.

A defining principle of the internal trade agreement and of the dispute settlement process is an emphasis on open co-operation to solve problems. Disputing parties will be encouraged to make every attempt to arrive at a solution through consultation and conciliation.

If consultation fails, governments or governments on behalf of individuals or individuals directly can ask to have a matter raised before a panel. The panel will consider the facts and, if appropriate, make recommendations for changed policies or behaviour.

The underlying objective of the process is to promote changes in inconsistent behaviour and policies through recommendations and not by applying penalties or awarding damages. Concerns have been raised in some quarters that the federal government will be set up as the policeman of interprovincial trade under the provisions of Bill C-19. During committee hearings a few points of concern were raised on the language of the act with respect to the powers of the federal government under the act. These sections have been clarified and the bill that we now have for third reading reflects these changes.

It is simply not true that the federal government is seeking to act as a policeman nor will the federal government have the power to act unilaterally on matters concerning internal trade because of Bill C-19. The ministerial level committee on internal trade is the main body responsible for the implementation and operation of the agreement, including the resolution of disputes.

All governments which are party to the agreement, that is the federal, provincial and territorial governments, are members of that committee. At this time the committee is co-chaired by the Hon. James Downey, Minister of Industry for the Government of Manitoba and the federal Minister of Industry. They are co-chairs. They share the job. The office of the secretariat has been set up in Winnipeg and Mr. André Dimitrijevic, a former associate deputy minister of federal-provincial relations in Saskatchewan has been appointed as the head of the secretariat. His office will be responsible for administering the dispute resolution mechanism.

A number of working groups have been or will be formed to assess and report annually on the effects of the agreement on each province and territory. These working groups will continue to monitor the domestic trading environment and will make recommendations as appropriate.

This is a broad based agreement. It includes a broad based dispute settlement process. It includes the federal, provincial and territorial governments and it responds to the very real concerns which have been brought forward by representatives of all parts of Canadian society.

The agreement represents a significant milestone in the evolution of Canadian economic development. It represents an important step in the process of creating a more open and competitive market. It is a flexible agreement and it provides the framework to deal with special situations or changing priorities.

At their annual meeting last year, the provincial premiers reaffirmed their commitment to the objective of reducing and eliminating barriers to the free movement of persons, goods, services and investment among the provinces and territories. The premiers want to continue the process of trade renewal and so does this government. Internal trade remains an important priority, as was most recently reaffirmed in the speech from the throne.

The passage of Bill C-19 will provide the foundation for a more competitive domestic marketplace. It will complement the work of the Prime Minister and other first ministers who have been actively involved with the highly successful Team Canada approach, seeking to broaden the market for Canadian goods and services in export markets. We are part of a global economy and we have to compete in the competitive international environment.

Internal barriers to trade inhibit our ability to compete internationally. We may not be able to control every factor in the international marketplace, but we can act on the problems that arise within our borders.

Bill C-19 does that. In the spirit of co-operation which has brought us this far in dealing with the matter of improving the environment for doing business within Canada, I am pleased to have the opportunity to express my support for this legislation. I urge other members of the House to support it as well.

[Nic Leblanc, Bloc, Longueuil, QC]

Madam Speaker, I am pleased to rise today to speak to Bill C-19, an act to implement the Agreement on Internal Trade.

To those of us in Quebec, this bill is both very significant and very encouraging. For a number of years, I would say more than ten even, we have been discussing the possibility of freeing trade among Canada's provinces. Today, we are proud to see that the government has acted on it.

It is vital to harmonizing trade relations, and I will explain in detail a little later on why we agree with harmonizing trade relations among the provinces. We freed trade with the United States first, before we freed trade among the provinces. You can imagine how important it was to do so.

It is also important to have a dispute resolution mechanism. We find this mechanism quite acceptable, except as we mentioned at the bill's earlier stages, and as we discussed with Quebec officials, it is a bit odd in our free trade agreement with the United States that the parties-Canada and the U.S.-have to decide as the very last thing how a dispute between firms or sectors of the economy is to be resolved.

In the end, the federal government will decide by order in council where disputes will be settled. In other words, it will unilaterally decide what is right and what is not.

This is why we, together with my colleague who was then the industry critic, had suggested a two day debate in the House of Commons on the importance of dispute settlement. We believe, as I said earlier, that some sectors might be more affected in some provinces than in others and that if a dispute was settled by order in council, it could be unfair at times to economic sectors which might be in a more favourable position in one province than in others.

This is why we believe that settling a dispute by order in council might be harmful to certain economic sectors and to certain provinces, especially the small ones.

Interprovincial free trade is of the utmost importance. Already, trade in goods and services in Canada and in Quebec represents 16 per cent of the gross domestic product of Quebec, for instance. It is quite important for Quebec to have free competition with the rest of Canada.

For instance, we can say products that Quebec sells in the rest of Canada represent $23.3 billion. The goods we purchase from other provinces represent $19 billion. That means we sell a little more in the other provinces than we buy from them.

However, we sell $11 billion in services to the other provinces, and we buy $14 billion from them. We buy about $3 billion more in services than we sell. So, if we look at the total average, what we sell and what we buy is about equal.

If the government had not acted by liberalizing trade between the provinces, we could see that Quebec would have further developed its trade with the United States. We will continue to do so with the United States because, particularly in Quebec, we have an extraordinary market with the cities of New York, Boston and Buffalo, in the United States, and with Toronto, in Canada. We have a tremendous market. In a radius of about 1,000 kilometres, there are almost 100 million consumers.

For Quebec, it is very beneficial to work at the shortest distance possible. We have an extraordinary market. New York and Boston, the northeastern United States, is the richest region in the world; it is where consumers buy the most. That is also where the business culture is the most like ours, so that it is much easier for us to do business in this radius. It requires much less effort, much less research on the human behaviour level, on the cultural level, etc. It is much simpler. Quebec will pursue its efforts to develop these markets, which have become much easier to break into. The figures I just gave you are based on the year 1994.

For all these reasons, our ultimate goal is to achieve Quebec sovereignty and negotiate an economic partnership with the rest of Canada. The government is to be thanked for this initiative. It is a step in the right direction. As we proposed during the referendum, we want to negotiate an economic partnership with the rest of Canada. What we have done, what we are doing today is a step forward that will help us achieve our goals when Quebec becomes sovereign. In this regard, I think we have just taken an extraordinary step.

There are other reasons, for example the advantage of liberalizing trade with the other provinces and the U.S. The economy is changing and will change even more dramatically in the future. We face an extraordinary, an exciting challenge in the coming years. The new ways of communicating, high technology, robotics, computers, the electronic highway are all transforming the dynamics of the economy.

That is why borders should disappear, so that everyone can benefit from their own intellectual and technical resources. I would like to say a few words on this, if I have the time.

I will deal mainly with our economy of the past 50 years-there is no need to go back to ancient history-for those sceptics who think that free competition and free trade at the international level are bad for us.

For those sceptics, I would like to go over the economy of the past and that of the future. In my days as a Conservative member, I took a strong stand for free trade with the United States. I worked very hard to make it happen. That is why, thinking back on all the speeches we made, the studies we commissioned and the evidence we heard, I am convinced that free trade is a good thing.

For the benefit of those who remain sceptical, I will raise the issue of competition. Let us not forget that, in the old days, our main markets were wood, fur and iron. We also had a very domestic farm industry. We raised our livestock to meet our immediate needs. We also had coal, petroleum, in very limited supplies, and all naturally renewable commodities, which ensured our survival locally.

When we had plentiful supplies of natural products such as coal, iron, wood and so on, we sold some and used some. Revenues were relatively stable. In the old days, the economy was relatively stable because it was driven for the most part by natural resources.

Wood was used to build houses and to heat them, livestock was killed for its meat and cows gave milk. All this makes for a very local economy. To keep warm, people burned wood; that is quite simple. They did not have much need for trading with Ontario or the U.S. to feed themselves, heat their homes and what not. Theirs was a strictly local economy. We had an enormous wealth, particularly in Quebec, but also in the other provinces, of materials of all sorts.

In a way, it was quite important to take protective measures. In those days, Canadians were very afraid of having their market invaded by the Americans or the Europeans, of anything that might destabilize their economy. It was therefore important that barriers be erected to protect our small local economy.

We tended to be protectionists. Barriers were erected. Customs tariffs and tariffs of all sorts were imposed to prevent our economy from being disturbed in any way. For decades, I would even go as far as to say centuries, our economy remained virtually unchanged. We were undoubtedly protectionists, and probably rightly so.

As far as national and international markets is concerned, as I said earlier, we did not really need to rely on other countries to provide for our needs.

Our multinationals set up mainly in countries where natural resources were vast and where labour was cheap. Products were made, finished and then sold. This is how the economy and the multinationals used to work. These businesses would go in countries where they could produce at a low cost, thanks to the natural resources and cheap labour available.

In the sixties, seventies and eighties, governments would get involved when they realized that a business was experiencing financial troubles or productivity problems, among others, and they would subsidize these companies. It was easy for companies to get subsidies. A lot of money was spent to subsidize businesses. I clearly remember, and so do other members who take an interest in the economy, that enormous amounts of money were used to subsidize companies, until governments realized that they were just wasting our money.

Generally speaking, when companies were in financial difficulty, it was because they had not properly analyzed future markets, changes affecting labour and technology, automation, and all sorts of new ways of doing things. This was the main reason these companies had problems and were helped out by governments, which were essentially wasting money. Indeed, even though they were subsidized, these companies still ended up shutting down.

They were subsidized because they were located in remote areas. However, they were not suitable for the region, sometimes because the natural resources were no longer as abundant as when they had first settled there. In any case, this resulted in a lot of money being wasted.

Let us now look at the current economy. To those who are sceptical and who believe that free trade is something bad which will hurt us, let me say that I think just the opposite, and I have for several years now. The economy in which we live, and in which we will live in the years to come, is based on ideas rather than on natural resources.

Mental competence will be very important. In Quebec in particular, we have tremendous intellectual competence, and young people graduating from our schools, colleges and universities are outstanding. With regard to software development, in particular, we see that we are among the best in the world. The economy of the future will be based a lot more on mental competence than on natural resources, as used to be the case. The information highway is a case in point. There is much talk about it now.

People with the capacity to develop software and to use it for promotion, sale or information, whether through the Internet or other means of communications, will be in the forefront and will do well. This economy will be based on ideas, on mental competence.

Thanks to this new way of doing business with ideas and mental competence, the economy will change a lot more rapidly. We will witness an economic revolution that could be considered astounding by some, but which I would see instead as a particularly exciting new development. As you know, ideas evolve a lot faster than coal or iron plants. Ideas change, evolve at a rapid pace.

Previously, the economy was based on natural resources like coal and iron. We could rely on our resources, we had plenty of them for 50 or 100 years. We lived off them, we had only to extract and sell them, it was not complicated.

Tomorrow's economy will be much more flexible and will move much faster. It will change more rapidly, and I think it will be very exciting for young people.

Help from governments will be different too. Governments will help companies to better communicate and sell their products, get international information and international market intelligence, and assess world markets. Government help will also target certain sectors of the economy.

Small businesses may need information, for example. It will be important for the government to have experts throughout the world that can use Internet to let that small business acquire some knowledge of what the culture is like in India, of what the lifestyle of the Indians, the Japanese or the Chinese is like, and on how they go about purchasing goods or services. So the government will

have an important role to play in conveying to small businesses the information they require in order to develop.

This is the economy of the future, and it is important to realize it. I think we do, but governments will have to be flexible. That is why Quebec is looking for more autonomy. We want to be flexible in order to move quickly. We think that federalism, with its eleven governments, is doomed to stagnation. It stifles development. The government is always slow to move and takes a lot of time to react. That is why we advocate sovereignty with an economic and political partnership with the rest of Canada. In order to expand, we need to be able to react more quickly and to be more efficient as a government in our support for this new approach.

I mentioned earlier that more accessible markets will mean a lot more transfers, not only of products but also of skills. Transfers of skills do not cost much in transportation fees. It can be done through computers. It will be done in the future through the Internet and more user friendly communication services.

We are told that we will soon be able to contact anyone in the world without having to make long distance calls. We will not have to call long distance to talk to someone in Japan or in China in the near future, in just a few years from now. It means we will be able to exchange ideas and work on research or other projets with experts from anywhere in the world.

This is why free trade with the United States, with the provinces and with other large markets is so interesting. It will allow us to be more efficient. Our productivity will increase and who will benefit in the end? The consumer.

We will have good high-quality products. We will definitely be able to increase the standard of living of our citizens. It can take us far, but I just wanted to show that an opening onto the world, with freer trade and increased competitiveness, should help to improve our productivity. In turn, it should improve our products and result in a higher standard of living for consumers and the general public.

We will have better and nicer clothes. We will have nicer automobiles and television sets with interactive programming. We will be able to afford a lot of things. We need high technology, but, in some cases, it can cost a lot of money.

When we were negotiating free trade with the United States, some major international investors told us: "We need large markets to justify our investments". People stopped investing in Canada for two main reasons. First, they told us: "The market is not big enough to justify our investments. Besides, Canada's debt is too high and we will have to pay for it. It will be too expensive and, in the end, it will not be profitable to invest in Canada".

High technology has its advantages, but it can sometimes be expensive. It costs a lot of money to invent a high technology product, which means that large investments are required, and you need markets to make these investments profitable. Not only did Canada have a very small market of about 25 million people, but companies were not sure they would be able to sell their products in other provinces. So you can imagine how restricted our market was. Very few people were interested in investing in Canada because the market was too small to justify the investment. Consequently, international investors in high technology went to Europe, to the United States, to Japan and other countries.

For these reasons, it was really necessary to secure free trade with the United States. It was hard because Quebec was almost the only province in favour of free trade with the United States. We, Quebecers, worked very hard because we believed in free trade with the United States. There was unanimity in Quebec between the Liberal Party, the Parti Quebecois and a majority of Conservative members at the time. We worked real hard, and it is with the help of Quebecers that we succeeded in signing a free-trade agreement with the United States.

Except for Mr. Turner, the Liberal Party at the time was against free trade with the United States. Only Mr. Turner, the former Prime Minister, was in favour of free trade. He came to the House to make a speech in support of free trade. He contradicted the present Prime Minister, who was against it.

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

You are a wise man.