Debates of Dec. 10th, 1997

Criminal Code

[The Acting Speaker (Mr. McClelland)]

Is there unanimous consent?

[Some hon. members]

Agreed.

[The Acting Speaker (Mr. McClelland)]

There being no further members rising for debate and the motion not being designated as a votable item, the time provided for the consideration of Private Members' Business has now expired and the order is dropped from the Order Paper.

A motion to adjourn the House under Standing Order 38 deemed to have been moved

[Michelle Dockrill, NDP, Bras D'Or, NS]

Mr. Speaker, on November 5 I asked the Minister of Natural Resources to table the secret report by the auditor general of his examination of the Cape Breton Development Corporation.

This report would shed light on recent disturbing facts regarding Devco's management of billions of dollars of crown assets.

It is unlikely this House will see the report. The minister appears uninterested in making this agency under his responsibility accountable to the public. In the weeks following his decision to keep the murky dealings of the Devco board from public scrutiny, the special Senate committee investigating Devco found it nearly impossible to make heads or tails of the numbers in Devco's five year plan and other fundamental documents of record.

As a Cape Bretoner, it was embarrassing to see senior officers of one of Cape Breton's most visible institutions being given an accounting lesson by senators. Senators were shocked at how the board signed a letter of intent to hand over Donkin Mine, a crown asset worth billions, to a company with no assets. In what surely will be one of the largest transfers of public assets in years, board members seemingly had less than a day to learn of the chairman's quicksilver negotiations to lock up the deal before they rubber stamped the process as part of a routine Wednesday afternoon meeting.

Senators felt that the handling of this matter with little explanation and no accountability was highly inappropriate. Senator MacDonald, and this is directly from the minutes of the November 18 Senate hearing, said the board sealed this deal using “indecent haste”.

Senator Murray said the letter of intent to dispose of the Donkin billions was based on and I quote, “quite incomplete and flimsy information”. Senator Murray said the board's actions were incredible.

The chairman of Devco told senators he did not consult with anyone about the deal. The minister then told senators that Devco's board has no legal right to either develop the Donkin Mine or to sell it as it belongs to the federal government. But they went ahead and signed a deal to sell without even bothering to pick up the phone and let the minister know he would soon be a few billion dollars lighter.

It was the former Minister of Health who announced that $300,000 in federal funds were being released into DRL bank accounts through a subsidiary of the Atlantic Canada Opportunities Agency. Until this federal gift arrived, DRL was unable to meet its responsibilities under the terms and conditions of the contract with Devco, namely, to prepare its plans to develop a mine through the study of data.

I implore the minister to table the auditor general's report on Devco to meet its mandate promoting accountability and best practices in government.

What are Devco and the minister afraid of? Senator Murray is afraid that Devco's letter of intent may have crippled the rights of the federal government to reject the deal or even to set terms and conditions. If so, the terms of this deal have been illegally established because, according to the minister, Devco has no such legal right to do so. I wonder if the deal would even stand up in court at this point without federal government approval.

Just this week, Nova Scotia Power announced it needs to import coal from the U.S. because Devco could not meet its requirements. Nova Scotians are appalled by this need to import coal given our expertise and resources.

There is an absolute mess brewing under the minister's nose. Before this all takes on a whiff of scandal or the stench of government rot, I urge the minister to clear the air by tabling in this House the auditor general's report on the Cape Breton Development Corporation in the name of accountability and for the sake of the integrity of his own department.

[Bernard Patry, Liberal, Parliamentary Secretary to Minister of Indian Affairs and Northern Development]

Mr. Speaker, the hon. member has raised the matter of a special examination by the auditor general of the Cape Breton Development Corporation.

Let me begin by saying that I, and I believe all members, share a concern for the Cape Breton region. All of us want to see successes on the island. I believe that Devco can be a success and I have confidence in the management and employees of the corporation to achieve this.

To return to the audit, according to the Financial Administration Act, all crown corporations must undergo a special examination at least once every five years. The purpose of this examination is to determine if the corporation's financial and management controls, information systems and management practices are acceptable.

These systems and practices should provide reasonable assurance that the assets of the corporation are safeguarded and controlled; the financial, human and physical resources of the corporation are managed economically and efficiently; and the operations of the corporation are carried out effectively.

The auditor general's examiner has indicated to Devco that he expects to submit his report to Devco's board of directors soon.

As I understand the process, if the auditor general's office believes the report contains information that should be brought to the attention of Parliament, his office would prepare a report for inclusion in the next annual report of the corporation. Mr. Desautels, like every previous auditor general, will not be reluctant to bring forward any concerns he might have.

To repeat, Devco has not yet received the report of the special examination. Until this happens, I cannot speculate on next steps by the auditor general's office or possible reaction by the government.

Now I would like to mention some of the ways in which Devco has established public accountability. Like all crown corporations, Devco prepares an annual report that is tabled in Parliament. In addition, Devco produces quarterly performance reports which are made public. As well, Devco has established the practice of consulting at least twice annually with its various stakeholders. Finally—

[The Acting Speaker (Mr. McClelland)]

The parliamentary secretary's time has expired.

The hon. member for Red Deer.

[Bob Mills, Reform, Red Deer, AB]

Mr. Speaker, on November 18 I rose in the House to ask a question of the government about the $1 billion deal which was being proposed with the Iraqi government. This deal was proposed by Mr. Zed, who had gone to Iraq and supposedly signed a deal at a time when we were at a very critical point in dealing with Iraq. It was refusing people access to various sites in the country. It was a time when the United Nations was proposing other action.

The timing could not have been worse. In my estimation, it greatly undermined Canadian foreign policy that this, in fact, was being pushed under the carpet by this government.

Basically this shows a real lack of foreign affairs initiative and policy by this government. It makes you wonder who is in charge of the foreign affairs department when a company, Summa Strategies, directed by ex-Liberal MPs Doug Young and Paul Zed, can in fact put forward a deal like this at such a critical time.

Shortly after the 1997 election these two gentlemen set up Summa Strategies as an Ottawa lobbying group. Obviously they are now taking great advantage of their contacts within the government. Mr. Young is acting for Canadian National Railways, a crown corporation he helped to privatize when he was minister of transport. No wonder Canadians are so skeptical of government and ex-ministers when they are involved in this sort of lobbying activities.

We need to tighten up these arrangements dramatically. Just imagine proposing to deal with a government like that of Saddam Hussein. While all the time arguing that this was a humanitarian deal for trucks and a number of items which were not listed, they went further to invite the foreign affairs minister, Tariq Aziz, to visit Canada, to visit the Prime Minister of New Brunswick, for which he claimed he had an invitation.

We in this House get tired of the government standing up, beating its chest and saying how wonderful it is. It talks about standing up to Saddam Hussein, yet we let this billion dollar deal to go ahead. Maybe the UN will scuttle it. We talk about how great we are in saving the world with land mines, meanwhile we are selling nuclear plants to India, Romania, China, Turkey and Korea, to name a few.

We talk about how we have solved all the financial problems, when in reality we have a $600 billion debt. We talk about a Zaire mission which we championed because the Prime Minister saw it on television. Then we found out that the day before the President of the United States called and suggested that that is what Canada should do.

We get tired of this sort of double standard and double talk. I question who is in charge over there? Doug Young, Paul Zed and Summa Strategies or the foreign affairs minister.

[Ted McWhinney, Liberal, Parliamentary Secretary to Minister of Foreign Affairs]

Mr. Speaker, the United Nations sanctions were imposed on Iraq to persuade the Iraqi government to comply with all UN Security Council resolutions which flowed from Iraq's invasion of Kuwait.

The Government of Canada has repeatedly expressed its full support to the UN Security Council resolutions and has called on Iraq to comply fully with the relevant security council resolutions.

Canada has also played an active role in the implementation of these resolutions through its presence in the United Nations special commission, UNSCOM, and the participation of its navy in the Maritime Interdiction Forces in the Gulf. During the most recent crisis Canada again demanded that the Government of Iraq comply fully with all the obligations imposed on it by the international community.

We hold the Government of Iraq and its leader Saddam Hussein fully responsible for the continued suffering of the Iraqi people by their persistent refusal of full co-operation with the international inspections. However, it was not the intention of the UN Security Council to inflict suffering on the Iraqi people. That is why the security council passed resolution 986 to permit the sale of humanitarian goods to Iraq to help the Iraqi people while sanctions are in place.

Canada and its principle partners, including the United States and the United Kingdom, fully supported this resolution which was opposed for a long time by the Iraqi government. Under this resolution Canadian companies are free to pursue sales of humanitarian goods subject to approval by the UN Sanctions Committee and the Government of Canada.

It is a Canadian legal requirement that all Canadian companies seeking to export goods to Iraq under this resolution, whether in Canada or overseas, must submit their application to the Department of Foreign Affairs and International Trade for approval. The Department examines each application to ensure that all conditions for such exports laid down in Canadian regulations are met before a certificate permitting the export will be issued or can be issued. One of these conditions is that the UN Sanctions Committee approve the deal.

The Government of Canada is aware that a recent Canadian business delegation to Iraq, led by a Kanata company, concluded several deals with the Iraqi government—

[Jean-Guy Chrétien, Bloc, Frontenac—Mégantic, QC]

Mr. Speaker, on November 19 last, I asked the Minister of Agriculture and Agri-Food a question on the future of the dairy industry.

To give you the appropriate background, I would like to quote part of that question. It said:

Does the minister intend to vigorously defend the dairy producers of Quebec and Canada by taking a clear and firm stand in the face of American claims?

Please note the answer.

Mr. Speaker, yes I will confirm that we will defend the Canadian dairy industry vigorously.

Each time I ask that minister a question, he invariably says “I defend very strongly, I defend vigorously.”

How can he explain that processors, and especially Unilever, are importing butter oil, the mix containing 49% butter oil and 51% sugar, at a very low tariff?

For a minister who keeps saying that he is vigorously defending the dairy industry, this is really great. Dairy producers have lost this fiscal year $50 million, which represents about 3% of their quota. And since there are 25,000 dairy producers, this represents an average of $2,000 that every dairy farm is losing today because of the import of butter oil. “I defend vigorously”, he says. How can we believe a minister who is so vigorously failing to act?

The problem is caused by the fact that the product is not under the proper tariff item. From 1995 to 1997, there has been more than a four-fold increase in imports. At the rate that these imports are going, there is every reason to fear that dairy producers will find themselves in a dire financial straits. Not only does the minister have to work vigorously, he also has to work quickly, because this is urgent.

This butter oil mix was obviously invented to avoid tariff regulations. Unfortunately, Revenue Canada is slow in reacting, and our Minister of Agriculture is sleeping on the job. Meanwhile, it is the agricultural community that is paying not for the lack of courage of this government but for its failure to act, especially as far as the Minister of Agriculture is concerned.

I hope there will be appropriate foresight on the part of officials during the next WTO negotiations. Proper management means proper foresight, and the Liberal government is showing neither when it comes to agriculture.

[The Acting Speaker (Mr. McClelland)]

Before we go to the parliamentary secretary for a response, I want to say that the interpreters did a wonderful job in that discourse. I know it is difficult chore from time to time and I want to thank them.

[Some hon. members]

Hear, hear.

[Ted McWhinney, Liberal, Parliamentary Secretary to Minister of Foreign Affairs]

Mr. Speaker, may I just in preface say, adding to my previous answer, that no application has been received for an export permit to Iraq by the Department of Foreign Affairs from the Kanata company's group.

Responding to the hon. member for Frontenac—Mégantic, I do apologize. I have just seen this text now and there is no French version. I can try to translate it, but I think it would probably speed up things if I give the version in a somewhat less eloquent English than his French.

[Jean-Guy Chrétien, Bloc, Frontenac—Mégantic, QC]

Mr. Speaker, I have a point of order.

I would like to encourage and forgive right now the member for Vancouver Quadra, because at the Department of Agriculture, there is little concern for the French language, and this is not surprising.

[The Acting Speaker (Mr. McClelland)]

That is not a point of order and there are no points of order in adjournment proceeding. The hon. parliamentary secretary has the right to respond in either language and was being courteous.

[Ted McWhinney, Liberal, Vancouver Quadra, BC]

Mr. Speaker, I accept the challenge.

Canada wants to vigorously defend the Canadian dairy industry against American claims that we are subsidizing dairy exports, in violation of our obligations under the World Trade Organization.

They also state that we did not respect our quota on milk. The United States asked Canada for formal consultations on these issues until October 8. These consultations were held at Geneva on November 19. Consultations are the first formal step in a complaint made to the World Trade Organization.

It will be up to the United States to request that a World Trade Organization panel be set up 60 days after the request for consultations, that is after December 7.

The special system for pricing in Canada and for quotas on dairy tariffs meets Canada's obligations under the rules of the World Trade Organization. We are ready to defend our system before a commission so that this conflict can be resolved.

Canada will insist that any action taken by the United States on this issue not be in compliance with the rules of the World Trade Organization.

[John Williams, Reform, St. Albert, AB]

Mr. Speaker, I appreciate the opportunity to follow up on the question I raised in the House approximately a week ago. I asked the minister of Indian affairs about the problems of accountability on reserves and the fact that unfortunately many of the people were extremely destitute. Yet, according to the department's own statement, although everything may not be nice and wonderful it is certainly well under control. I would beg to differ.

Unfortunately our aboriginal people who live on the reserves have living conditions that are absolutely intolerable and would not be tolerated elsewhere in the country. I wonder why the government would continue on that basis.

The minister held up the Alexander First Nation, which happens to be in my riding, as an example of good management that we should look at for other reserves.

In the St. Albert and Sturgeon Gazette on November 19, 1997 the chief executive officer of the band was quoted as saying:

Let me be the first to publicly admit to our membership, the only people we feel we have to answer to, that there are problems. There is need for change and greater accountability.

That was in relationship to an investigation that was being conducted by the St. Albert and Sturgeon Gazette into some people on the reserve who were living in absolutely abominable conditions.

In the St. Albert and Sturgeon Gazette of Wednesday, September 24, 1997 there was an article entitled “Rich man, poor man”. It talked about one member of the reserve, Mr. Ernie Bruno, who was given $1,800 to help build a 289 square foot home. Now a 289 square foot home is not a mansion.

I was actually taking a look at the financial statements which came my way too and I noticed that the auditor had qualified the statement because he had problems with the audit. He stated:

We were unable to obtain sufficient audit evidence to support our documentation.

The rest of the qualifications were contained in there. The statements were of significant length. I was amazed by the amount of money the first nations were paying out in salaries.

For example, under medical, transportation, alcohol and drug abuse, community health representative and van transportation, they paid out $231,000 in salaries against $473,000 in revenues. More than half went on salaries.

How about the social services department? This is the department they run to help people. It has revenues of $672,000 but its salary bill was $121,000. It goes on and on. Economic development salaries were $65,000 against receipts of $240,000. Land management salaries were $65,000 against receipts of $212,000.

If I were given the opportunity I could go on at length in a 20 minute speech about the lack of accountability on this reserve and others reserves across the country.

This is what we talked about in question period. We asked the minister to substantiate that the report was factual and that something needed to be done. I would still like to have a real response by the department to this lack of accountability.

I could go on at great length, but in view of the time I would like to hear the response from the department.

[Bernard Patry, Liberal, Parliamentary Secretary to Minister of Indian Affairs and Northern Development]

Mr. Speaker, on behalf of the Minister of Indian Affairs and Northern Development I am pleased to respond to the question of the hon. member for St. Albert regarding the Alexander First Nation.

The hon. member suggests that the Alexander First Nation is not an example of good management. I disagree. The remarkable turnaround this first nation has made in a few short years deserves credit.

Three years ago the auditor of the Alexander First Nation gave a denial of opinion on the 1994-95 financial statements. At that time the first nation, in open consultation with its community, took a number of steps toward rectifying the situation, including holding open community meetings with the band auditor. Over the past two years the first nation has made positive steps by showing an operating surplus each year and plans to have no deficit by March 1999.

Under the terms of its remedial management plan Alexander must make arrangements for professional accounting assistance and provide monthly financial statements to the department. Regional officials meet regularly with band representatives to review progress on the plan.

Aside from the department's reporting requirements, the chief and council hold general band meetings each year to provide information to community members on the band's financial picture, to inform members of achievements and new initiatives, and to seek clarification on any issue. Each year, members are provided with a copy of the annual report which includes the financial statements.

In addition, this community, under the direction of the chief and council, has been able to reduce the number of community members on social assistance from 100 to 12 persons as a result of innovative economic development projects. These results illustrate real progress within this first nation.

[Greg Thompson, Progressive Conservative, Charlotte, NB]

Mr. Speaker, I asked a question of the prime minister on December 4, just about a week ago, in relation to Summa Strategies Inc., a lobbying company in Ottawa.

My question was with regard to the activities of this company because two former Liberal members of Parliament were acting on behalf of an American company to take possession of a Canadian port.

We had a vote in the House last night on the marine act, Bill C-9, which would see the privatization of ports in Canada.

What disturbs me about these two members of Parliament is that one of them is Doug Young, the former minister of transport who was the architect of the marine privatization act or Bill C-9. It is identical to the original bill that he introduced to the House when he was the Minister of Transport in the previous Parliament.

There is something patently wrong when the government allows that type of activity to happen, because here we have it. The gentleman who knows the department intimately, the former minister who wrote the act, now works on behalf of an American company that wants to take ownership of a Canadian port.

It is bad enough that Mr. Paul Zed, a former member of Parliament, is also involved in that consulting company. In fact, he is one of the co-owners with Mr. Young of Summa Strategies. It is bad enough that a member of Parliament would be involved, but when you have a minister acting along with the member of Parliament doing that, the former member of Parliament and the former minister, there is something absolutely wrong.

When I raised that question in the House, I asked the Prime Minister, does this meet his definition of ethical behaviour. They just fudge on the answer. A lot of Canadians want to know whether or not that would meet the Prime Minister's definition of ethical behaviour. I think most people in this House on both sides would say no, it does not meet what would be an acceptable level of ethical behaviour.

What Mr. Young and Mr. Zed are doing in terms of the law, I am not going to stand up here and say they are breaking the law, because obviously they are both very smart men, they are intelligent men. But we are talking about ethical behaviour, and insider knowledge and information of departments, and the architect of the very act which we debated in this House this week which will be given royal assent very soon. There is something wrong when that happens.

On the provincial side of this equation, we have a former minister of economic development in the province of New Brunswick by the name of Al Lacey who owns the company Al Lacey and Associates. He is lobbying on behalf of the provincial government.

We have the consummate insiders both federally and provincially. There is something wrong when that is allowed to happen, especially when we are looking at giving ownership of a Canadian port to an American company.

It is absolutely bizarre that we would allow the Canadian government and the province of New Brunswick to allow a port like that to be sold and allow the highest paid lobbyists in the country to represent these companies, every one of these lobbyists being former members of the crown cabinet or members of Parliament.

On that I rest my case. I look forward to the response from the parliamentary secretary.

[Ted McWhinney, Liberal, Parliamentary Secretary to Minister of Foreign Affairs]

Mr. Speaker, we cannot comment on innuendoes or suggestions. We must deal with facts and we operate under the rule of law in Canada.

I thank the hon. member for Charlotte for his question concerning Summa Strategies and the divestiture of the port of Bayside, New Brunswick.

I must emphasize that the divestiture initiative under the national marine policy is going extremely well. In Atlantic Canada alone, 38 ports have been transferred, negotiations are concluded on a further six, and 10 additional letters of intent have been signed with negotiations presently under way. These ports are being transferred to provinces, community based groups and private companies.

Transport Canada is implementing this initiative under a set of guidelines and procedures developed by the department and approved by Treasury Board.

With regard to Bayside, New Brunswick, the officials from Transport Canada convened a public meeting on June 19, 1996 and provided a briefing on the national marine policy and the positive effect it could have for the stakeholders of a port like Bayside. Subsequent to that meeting, a local group of stakeholder representatives was formed and a letter of intent was signed with the group on July 29, 1996.

Charlotte County Ports Ltd. represented by Summa Strategies also came forward and expressed interest in the port. As with any other interested party, the process was explained to them and they were urged to make contact with the local negotiating committee. Charlotte County Ports Ltd. followed this advice and verbally withdrew their expression of interest in favour of working positively with the local port divestiture committee.

Specifically, the hon. member has questioned the involvement of Summa Strategies. Both of the individuals he has referred to are now private citizens and are free to carry out their business affairs as they see fit and in conformity to the rule of the law.

There exists legislation that addresses the lobby business in Canada. I am certain that both of these individuals are fully aware of the requirements surrounding their private business interests.

[The Acting Speaker (Mr. McClelland)]

The motion to adjourn the House is now deemed to have been adopted. Accordingly, this House stands adjourned until tomorrow at 10 a.m., pursuant to Standing Order 24(1).

(The House adjourned at 6.50 p.m.)