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House of Commons Hansard #130 of the 35th Parliament, 2nd Session. (The original version is on Parliament's site.) The word of the day was children.

Topics

Canada-Chile Free Trade Agreement Implementation ActGovernment Orders

February 14th, 1997 / 1:35 p.m.

Ottawa South Ontario

Liberal

John Manley Liberalfor the Minister for International Trade

moved that Bill C-81, an act to implement the Canada-Chile Free Trade Agreement and related agreements, be read the second time and referred to a committee.

Canada-Chile Free Trade Agreement Implementation ActGovernment Orders

1:35 p.m.

Dartmouth Nova Scotia

Liberal

Ron MacDonald LiberalParliamentary Secretary to Minister for International Trade

Mr. Speaker, it is a pleasure to debate a very important piece of legislation for all Canadians. The legislation would solidify the good trading relationship Canada has had with Chile.

Bill C-81 is enabling legislation for the Canada-Chile Free Trade Agreement. It is an important milestone for us because it broadens the access to Canadian products and services under a free trade regime into Latin American and South American countries.

As most people in the House and in the country are aware, Canada has a very proud and strong tradition of being very competitive in international markets.

I come from Atlantic Canada which has a history of trade. Many times I have said in the past that up until 1867 when we were merely a British colony places like Nova Scotia did a great deal of trade. The reason Nova Scotia did so well in the 1800s is that the culture of the people in Atlantic Canada was to look abroad.

The port of Halifax, the finest natural port in the world, used to be chock full of ships plying their trade. I am told one could almost walk from the shores of Dartmouth to the shores of Halifax on a good summer day. Ships from all over the world were coming into the port of Halifax in the 1850s and 1860s to trade with the world. They would not just trade with central or upper Canada. They would trade with the New England states. They traded a great deal with Latin America, with the Caribbean, with Europe and with the rest of the world.

In 1867 with the formation of Canada and the various regimes and nation states that were being put in place protectionism became the name of the game. For well over 120 years we saw countries like Canada looking more and more inward and putting up barriers to trade to protect their industries and markets.

In the last decade there has been an explosion in trade deregulation. If we look around the globe we see the emergence of different trade groups like the European Union and the Mercosur block in South America. In North America we initially had the free trade deal with the United States which was then extended to Mexico and was known as the NAFTA.

Great debates took place in Canada on whether or not this nation was up to the challenge of competing globally and of removing the tariff and non-tariff barriers to its own markets, on whether or not we had the wherewithal as an entrepreneurial class of Canadians to still be competitive, to have growth in our industries and jobs, and to create wealth.

Maybe the verdict is out but I think the verdict in on free trade. After two recessions, one in the early eighties and the other in the early nineties, Canadian industries are among the must competitive in the entire world.

In my job as Parliamentary Secretary to the Minister of International Trade I deal with some of the most successful competitive companies with the best practices in the world. They are Canadian companies in almost every sector: mining, natural resources, telecommunications and infrastructure. They are renowned around the world for the way in which they do their business, the quality of the product and the timeliness of delivery of their service.

In the last few years we have seen the Canadian industrial infrastructure take advantage of the reduction in tariffs and the introduction of free trade in the NAFTA. We continue to penetrate the toughest market in the world, the American market.

The statistics are important. At the risk of sounding boastful I would like to repeat them. Canada, this great country of ours with 30 million people, does $1 billion a day in two-way trade with the United States of America. We ship $550 million in goods and services south of the border and we get $450 million back. For every working day of every month in Canada, Canada does over $1 billion in two-way trade. This is a small country with 30 million people and we do over $1 billion every working day.

If anybody out there questions whether or not Canadian industries are up to the challenge of free trade and can compete in international markets and keep their own markets the answer is yes.

Canada leads G-7 countries in terms of the percentage of GDP coming from trade. It is approaching 39 per cent. It boggles the mind that Canadian industry has been as competitive as it has been. Most of the nearly 700,000 jobs created since the government came to power have been created in industries that have expanded their export performance. They have gone out. They have competed. They have penetrated markets. They have created jobs and wealth for Canadians.

What does it mean in terms of jobs created in international trade? How do they relate? They relate in a very real manner. For every $1 billion in exports from Canadian industry there are 11,000 jobs maintained or created in the Canadian economy. These are not the traditional McJobs at $5 per hour. These jobs are in the high tech sector. These are jobs for scientists, researchers and professionals. These jobs create real wealth and prosperity across the country.

Places like Atlantic Canada where I come from have benefited a great deal. It has taken us a little longer to twist our minds around to the fact that we once again can be competitive and that we are no longer bridled and collared by just the domestic marketplace and the regulatory regimes that go with it.

Increasingly we see ships from around the world once again making the port of Halifax and the port of Saint John, New Brunswick, part of their international ports of call. We see the jobs that come with that. We see more and more people from around the world looking at places like Atlantic Canada because of its strategic location, because of its natural resources and because of its history of entrepreneurship and trade. Increasingly we are seeing these individuals looking at places like Atlantic Canada and the ports in the province of Quebec and in British Columbia as places where they want to invest dollars.

The recent history of free trade has been extremely successful. About a year ago we decided we would not wait for the United States which had decided not to give fast track authority to its president to pursue trade liberalization or free trade negotiations with Chile. We as a government made a strategic decision to follow an independent forum and an independent trade policy. It was in our best interest, because we knew how competitive our industry was, to extend our free trade negotiations to our friends to the south. We found a willing partner in the great nation of Chile. Chile said: "We also want to become a partner in free trade with Canada. We believe there is a tremendous amount we can do together". The negotiations began in January 1996. In less than one year, on November 18, 1996 the Prime Minister of Canada and the President of Chile initialled the free trade deal between Canada and Chile.

It is a very important deal. It showed the world that Canada was not just going to talk about free trade. It showed Canada was going to pursue opportunities wherever they existed so Canadian companies could have access to foreign markets. It showed that we were not afraid to allow foreign companies access to the Canadian marketplace because we were absolutely convinced of the competitiveness of our industry and our entrepreneurs.

What has this deal done for us? Some people would ask why we would go with Chile, that we do not really have a lot of trade with

that country. We do have a lot of trade. We have about $700 million a year in trade. More important is the recognition that we invest about $7 billion in Chile. Canada is the second largest investor in Chile. It is important for us. It gives us a window on that market in South America.

This is a good deal for Canada. It is a deal that has good support around the House of Commons. It immediately reduces the import duty for about 75 per cent of the goods that Canada exports to Chile. For the rest of the goods, by and large with one or two exceptions, over the next five years a zero tariff will be applied.

The deal also allows us to do a couple of other things which I will cover quickly. It gives us a very good dispute settlement mechanism which is similar to the deal we have with the United States. On trade remedies, where I will draw the line, we have agreed in this deal that there is no room in a free trade association for anti-dumping laws to be applied. This is a great victory for Canada. This deal is a great victory for the people of Chile.

I look forward to support from all members of the House to have this speedily passed at second reading and referred to a committee so that on June 2 this free trade deal will come in force for the benefit of all people of Canada and Chile.

Canada-Chile Free Trade Agreement Implementation ActGovernment Orders

1:45 p.m.

Liberal

Bob Kilger Liberal Stormont—Dundas, ON

Mr. Speaker, on a point of order, I have engaged in some discussions with representatives of the official opposition and the Reform Party. There is unanimous support for this legislation. I know the sitting has been extended until two o'clock.

Could we have unanimous consent that there would not be any questions or comments to any of the interveners, that we would still have a member from each of the two parties, the Bloc Quebecois and the Reform Party speak, and then we would put the question.

Canada-Chile Free Trade Agreement Implementation ActGovernment Orders

1:45 p.m.

An hon. member

No.

Canada-Chile Free Trade Agreement Implementation ActGovernment Orders

1:45 p.m.

Liberal

Bob Kilger Liberal Stormont—Dundas, ON

Mr. Speaker, I see there is no consent to that so let me try this. While there would be questions and comments if people chose to have them, that a member of the Bloc would speak and then a member of the Reform Party. At that time you would put the question. Effectively, you would not see the clock at two o'clock.

Canada-Chile Free Trade Agreement Implementation ActGovernment Orders

1:45 p.m.

The Deputy Speaker

Is there unanimous consent?

Canada-Chile Free Trade Agreement Implementation ActGovernment Orders

1:45 p.m.

Bloc

René Laurin Bloc Joliette, QC

Mr. Speaker, we would be in agreement, but on condition that each party be limited to 10 minutes.

Canada-Chile Free Trade Agreement Implementation ActGovernment Orders

1:45 p.m.

The Deputy Speaker

Subject to the wrinkle added, is there consent from the Reform Party to that?

Canada-Chile Free Trade Agreement Implementation ActGovernment Orders

1:45 p.m.

Reform

Jim Silye Reform Calgary Centre, AB

Mr. Speaker, I thought we had discussed that we would allow one question on the Liberal member's speech and then after that no more questions, just finish the speeches if they wanted.

Canada-Chile Free Trade Agreement Implementation ActGovernment Orders

1:45 p.m.

The Deputy Speaker

We have added a second wrinkle. There will be one question to the hon. parliamentary secretary and then 10 minutes to each of the parties. Agreed?

Canada-Chile Free Trade Agreement Implementation ActGovernment Orders

1:45 p.m.

Some hon. members

Agreed.

Canada-Chile Free Trade Agreement Implementation ActGovernment Orders

1:45 p.m.

Reform

Jim Silye Reform Calgary Centre, AB

Mr. Speaker, after listening to the speech of the hon. member for Dartmouth, I do not think he is a Liberal. He spoke of all the virtues and strengths and benefits of a free trade agreement, of the North American free trade agreement and this wonderful agreement with Chile. My goodness, he sounds like an entrepreneur and a free enterpriser if I ever heard one.

He also spoke of the advantages of Halifax. With his forward vision I am surprised that the Liberal Party under John Turner was against free trade. We hear these great sounding speeches from Liberal members which is quite an about face, but I might add a welcomed about face. However, I take exception to the reference in his speech about the NAFTA in terms of the dispute mechanism settlement.

When the Liberals ran in the last election their three big issues were jobs, jobs, jobs; get rid of the GST and renegotiating NAFTA. We all know that they did not renegotiate NAFTA. They signed it the way it was presented.

They made the mistake of not sticking to their original principles and by not adhering to their commitment to hold the agreement up until there was a satisfactory dispute settlement mechanism. That has really cost this country severely. It has caused a severe problem in international trade and trade with our partners because the Americans are taking advantage of us very chance they get. We would not have the dispute over softwood lumber. It would have been settled. Settlements would be a lot faster if there was a proper dispute settlement mechanism in place in the NAFTA.

Based on the comments in his speech that he feels this is a good deal with Chile because it is the same as the one Canada has with the States, I submit we are not happy with the one with the United States. It is causing some problems. I would like clarification of that kind of double talk.

Canada-Chile Free Trade Agreement Implementation ActGovernment Orders

1:50 p.m.

Liberal

Ron MacDonald Liberal Dartmouth, NS

Mr. Speaker, the hon. member needs a lot of clarification if he misunderstands that the Liberal Party has always been the traditional party of free trade. It was not the Tory Party, it has never been. The hon. member laughs, but if he looks at some of the most important trade liberalization moves that have been taken since 1867, they were taken by the Liberal Party of Canada.

What he does not want to understand is that when the Liberal Party of Canada goes forward with trade liberalization, it does not succumb to the wishes of the United States. We stand firm for the rights of Canadian industry. We have done it under NAFTA. We have done it under the FTA and we have done it with Chile.

Finally, the hon. member has asked a very important question. He alluded to the fact that the dispute settlement mechanism under NAFTA simply does not work. I would like to sit down and show my hon. colleague that the dispute settlement mechanism has worked very well. Of the disputes that have gone full term, Canada has won over 90 per cent of them. I believe the deal we have negotiated has protected Canadian industries.

With respect to the promises made in the election campaign about NAFTA, working groups have been established to look at a subsidies code as well as at anti-dumping. Those reports are going to be the subject of negotiations and discussions at the next NAFTA commission. If he is still around when those are discussed we will be edified with the results of those negotiations.

Canada-Chile Free Trade Agreement Implementation ActGovernment Orders

1:50 p.m.

Bloc

Maud Debien Bloc Laval East, QC

Mr. Speaker, I am pleased to speak to Bill C-81, an act to implement the Canada-Chile Free Trade Agreement.

It was at the Summit of the Americas held in Miami in late 1994 that the decision was made to allow Chile into NAFTA. One year later, following complications in its negotiations with the US, the Chilean government decided to break off talks.

Canada and Chile then looked into the possibility of bilateral negotiations on an interim agreement. This agreement would eventually pave the way for Chile's accession to NAFTA.

Negotiations with a view to such an agreement took place between January and November 1996, and the Canada-Chile Free Trade Agreement, signed in December 1996, will take effect June 2, 1997. It is an interim agreement, one purpose of which is to facilitate the accession of Chile to NAFTA, probably around the year 2000.

First of all, I will tell you the Bloc Quebecois is pleased that this agreement has been signed, and it is with an open mind that we prepare to welcome our Chilean friends into the vast North American free trade zone.

The Bloc Quebecois is obviously in favour of the principle of free trade. I would point out that this has been the traditional position of the Quebec government. Furthermore, we were strongly

in support of the Free Trade Agreement between Canada and the United States. Let us remember that this was one of the primary issues in the 1988 federal election campaign in Quebec.

Similarly, we also supported extending the FTA, which later became the NAFTA, as well as the Canada-Israel Free Trade Agreement.

In reiterating the sovereignists' strong position on free trade, I cannot help thinking about the last election campaign of the Liberal Party, the party forming the government today.

I was listening earlier to the Parliamentary Secretary to the Minister for International Trade as he boasted-we have a more colourful expression for it-that they have been in favour of free trade since 1867. I would encourage the parliamentary secretary to take another look at his history books.

At the time, the Liberals were strongly opposed to the free trade treaty with the United States. In the infamous red book, the Liberals promised, on page 24-the parliamentary secretary does not need to take a history course, all he has to do is read the red book-that "a liberal government will renegotiate the Canada-United-States Free Trade Agreement and NAFTA".

It just happens that this is another one of their broken promises. Today, a few years after they came to power, the Liberals seem to have miraculously converted to free trade.

Indeed, once elected, the Liberal Party decided to change its tune and is now finding the Free Trade Agreement quite acceptable. It likes its purpose, content, and wording so much that instead of making changes to it, the current government used it as a model to draft the Canada-Chili Free Trade Agreement, and rightly so.

Of course, since the purpose of the Canada-Chili Free Trade Agreement is ultimately for Chili to join NAFTA, it was appropriate to include dispositions similar in many respects. However, I believe that since it is on a smaller scale, with less of an impact on both partners, it would have been possible to include certain elements, if only to put its feasibility to the test. I refer mainly to parallel agreements.

As was the case with NAFTA, parallel agreements on the environment and labour standards are attached to the Canada-Chili Free Trade Agreement. I believe the government could have taken this opportunity to include environmental and labour standards within the agreement.

The government should have done everything in its power to raise the labour standards and thus increase protection for Chilean workers. I will, once again, quote the red book where the Liberals said: "Future trading arrangements will be shaped not only by economic considerations but also by social concerns".

The Liberal government could have included a clause on respect for human rights and democratic principles. In any case, the government must not forget that, over and above trade and commercial interests, it bears some responsibilities both on the national and the international scene.

On the question of human rights, I want to emphasize that the Bloc Quebecois considers that respect for fundamental rights is a top priority and that such a principle should always be part of any agreement like the Canada-Chile Free Trade Agreement.

Trade must go on, free trade must be encouraged, but not at the expense of our responsibilities as individuals and as members of the global community.

The Minister for International Trade feels that the protection of human rights has no place in a free trade agreement, but the free trade agreement between Israel and the European Union contains an interesting clause in this regard.

It says: "The relations between the parties, as well as all the provisions in this agreement, are based on respect for human rights and the democratic principles that underlie their domestic and international policies and constitute an essential part of this agreement".

As I have said repeatedly in this House, respect for human rights will not come about automatically, either in isolation or through trade. I now take this opportunity to applaud the Quebec government for subscribing to an unknown part of NAFTA this week: the North American Agreement on Labour Cooperation.

This agreement will now allow the filing of complaints against businesses in the United States or in Mexico which do not respect certain basic principles relating to their employees' working conditions. Apart from Quebec, Manitoba and Alberta are the only provinces to have signed this agreement.

I will conclude by welcoming a new economic partner of Quebec and Canada. The institutionalization of closer political and economic ties with Chile, through this bilateral agreement, and possibly in the longer term, through its accession to NAFTA, is promising.

For many Quebecers and Canadians, Chile is now associated with democracy, political stability and economic success. What a change for a country that, for a long time, reminded us more of authoritarianism and human rights violations. In less than a decade, Chile has been able to put itself in the forefront of a renewed, resolutely modern and promising continent.

Canada-Chile Free Trade Agreement Implementation ActGovernment Orders

2 p.m.

Reform

Lee Morrison Reform Swift Current—Maple Creek—Assiniboia, SK

Mr. Speaker, my party has agreed to this truncated form of debate because, like the government, we would like to see

this bill get into committee where it can be properly dealt with. We do support it in principle. There are a couple of stickers in it that are worthy of further discussion. We will get to them in committee and at third reading.

As everyone here knows, the origins of this treaty were at the summit of the Americas in Miami in 1994 where the leaders of Canada, the U.S., Mexico and Chile announced their intention to pursue Chilean ascension to NAFTA.

Chile looked rather briefly at this possibility however, since the Clinton administration was unable to convince the U.S. Congress to fast track a treaty to a pass or fail vote without amendment. Chile therefore backed away from the risk of entering into an agreement that could be further modified after it was signed.

This treaty as everyone knows, although it will have bilateral advantages to Canada and to Chile, certainly is mostly about what the Department of Foreign Affairs likes to refer to as building bridges. The Department of Foreign Affairs and International Trade sometimes calls the Canada-Chile FTA an interim bilateral free trade agreement because it is hoped that the agreement will ultimately lead to incorporating Chile into NAFTA, or FTAA as it is sometimes called now, a free trade agreement for the Americas.

It appears that the U.S. Congress' stubborn refusal to fast track Chile's entry into NAFTA will be to our gain. Mexico already has an FTA with Chile and the Americans will eventually have to get on board through the free trade agreement for the Americas initiative.

One of the advantages of leading by example is that we do get a head start. Chile has strong trade links throughout the southern hemisphere, in particular through its association with Mercosur, the common market between Argentina, Brazil, Paraguay and Uruguay. Chile is not a full member of that trading bloc. Therefore even though it has this easy access, it was able to give us certain considerations which are a little better than it is giving to its neighbours.

For example our agricultural products will get much better treatment. Many Canadian companies are already finding that Chile is an excellent gateway or an open door to the other markets in Latin America.

The deal in its immediate consequences provides Canadian exporters with significantly improved access to the Chilean market through the elimination of the 11 per cent duty on about 75 per cent of the goods which we ship into Chile. Since 80 per cent of Chilean exports into Canada are already duty free, it is reasonable to expect that the adjustment phase for the Canadian market will be very moderate.

In the agricultural sector which is of particular concern to me Canadian durum wheat which accounts for 35 per cent of Canadian agricultural exports to Chile will benefit from an immediate removal of the 11 per cent duty currently imposed. There is similar treatment slated for barley and pulse seeds.

Duties on Canadian exports of a variety of processed agricultural products will be reduced to zero over five years. The exception for a long phase out period is for Chile's most sensitive product, milling wheat, but in 17 years that will be duty free as well. On the Canadian side we will phase out a limited number of tariffs over six years primarily for horticultural products. Canada's over quota most favoured nation tariffs for dairy, poultry and eggs are excluded from tariff elimination and will continue to be protected.

However it is not all wine and roses. Some Canadian producers are afraid of the Chilean $15 a day average farm wage, cheap land and flexible government regulations, all of which lower the cost of production for Chilean agricultural goods. Fortunately most Canadian horticultural produce will be available during our summer and fall and Chilean produce will fill in the winter-spring gap of our growing season. So Canadian and Chilean producers will mostly complement each other rather than compete head to head.

Apples however are another story. This is a very significant worry. B.C. fruit growers have expressed concerns about the six year phase out period of the FTA's anti-dumping regulations. Chilean apples have been entering Canada duty free for years with no problems apparent. However Canadian orchardists are uneasy over the precedent that the agreement sets when Chile eventually gets into the general NAFTA agreement for this reason: A few years back the price for red delicious apples was driven below the cost of production when Washington state growers dumped their product in the B.C. market. The Okanagan apple producers eventually won damages under the anti-dumping laws in the Canada-U.S. FTA.

Should Chile eventually be admitted to NAFTA and the phasing out of anti-dumping regulations be extended to all NAFTA partners, Washington producers could dump their apples in Canada again and drive down domestic prices. So it is not Chile they are afraid of, it is the U.S.A. which is sitting in the wings watching this.

We must be cautious. I hope that this will be addressed in committee. The only remaining recourse for Canadian growers in the scenario that I have outlined would be an appeal to the Canadian International Trade Tribunal, a safeguard action. The CITT could apply immediate tariffs on a temporary basis and probably for one season. It would be a mirror image of our never ending softwood lumber dispute, only in this case the plaintiffs would be north of the border instead of south of it.

Let us proceed with a moderate degree of caution. In general, this treaty is a good deal for both Chile and Canada but like all

treaties, it is not perfect and I would not want to see British Columbia apple growers sacrificed for the general benefit of our trade relations.

Canada-Chile Free Trade Agreement Implementation ActGovernment Orders

2:05 p.m.

The Deputy Speaker

Is the House ready for the question?

Canada-Chile Free Trade Agreement Implementation ActGovernment Orders

2:05 p.m.

Some hon. members

Question.

Canada-Chile Free Trade Agreement Implementation ActGovernment Orders

2:05 p.m.

The Deputy Speaker

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

Canada-Chile Free Trade Agreement Implementation ActGovernment Orders

2:05 p.m.

Some hon. members

Agreed.

(Motion agreed to, bill read the second time and referred to a committee.)

Canada-Chile Free Trade Agreement Implementation ActGovernment Orders

2:05 p.m.

The Deputy Speaker

It being 2.10 p.m., the House will now proceed to the consideration of Private Members' Business as listed on today's Order Paper.

Nuclear Liability ActPrivate Members' Business

2:05 p.m.

Liberal

Warren Allmand Liberal Notre-Dame-De-Grâce, QC

moved that Bill C-249, an act to amend the Nuclear Liability Act, be read the second time and referred to a committee.

Mr. Speaker, this bill would amend the Nuclear Liability Act. Members may ask: What is the Nuclear Liability Act? The Nuclear Liability Act was passed in 1970 but was only proclaimed in 1976. Its purpose was to make operators of nuclear installations absolutely liable for damages, but at the same time it limited their liability for a particular incident to $75 million.

When I say that it made them absolutely liable, I mean that it provided that victims of a nuclear accident would not have to prove negligence against the operators of a nuclear facility; they merely had to show that the damages to their person or to their property were caused by a breakdown or by an accident at the nuclear installation. Once they did that, the defendant was absolutely liable. However as I said, the liability was limited to a total of $75 million for all claimants on any one particular incident.

The Nuclear Liability Act also protects manufacturers of nuclear facilities and manufacturers of components for nuclear facilities, such as General Electric, Westinghouse and others. It protects them from any liability whatsoever. It does the same thing for the suppliers of fuel for nuclear installations. In other words, all damage claims by victims of a nuclear power accident must be channelled to the operators who are in turn limited to $75 million.

The act also provides that where the damage exceeds $75 million, the Government of Canada may decide to pay additional amounts, but that is not obligatory.

It should be noted that all operators must be licensed under the Atomic Energy Control Act by the Atomic Energy Control Board. Of course the purpose of that is to screen out unreliable operators.

Bill C-249 which is before the House today would do two things. First, it would increase the liability limit for operators from $75 million to $500 million per damage incident. Second, it would oblige the government to pay damages when they went above $500 million, subject to certain conditions.

Why is this necessary? Why am I putting forward this bill? It is necessary because the liability limit of $75 million is totally out of date and inadequate.

There are presently 23 nuclear installations in Canada situated in Ontario, Quebec and New Brunswick.

If we were simply to adjust the $75 million maximum to compensate for inflation, the adjusted maximum calculated for 1989 would be $279 million. As members know, it is now 1997 so with further inflation adjustment the maximum would be close to $500 million.

Experience has now shown us that the original maximum was woefully too low. The 1986 Chernobyl breakdown resulted in $300 billion of damages in Ukraine and Belarus. As a result of that accident 250,000 people had to be evacuated from their farms, villages and communities.

Briefs to the Ontario Hydro hearings in 1990 demonstrated that a severe accident at the Darlington, Ontario installation would result in damages of $1 trillion. In 1990 the Business Journal stated that Ontario Hydro was not adequately insured for damage from accidents of this kind.

It should be pointed out that Toronto is closer to Pickering than Kiev was to Chernobyl yet Kiev incurred approximately $100 billion in damages in 1986. That is probably why the city of Toronto with Energy Probe and Rosalie Bertell went to court in 1986 to have the Nuclear Liability Act declared unconstitutional.

Unfortunately in 1996 after 10 years of legal wrangling they were obliged to drop their action. The principal opponents in that action were Ontario Hydro and New Brunswick Power.

Some say that these changes are not necessary because Canadian installations are extremely safe. It may be correct that the Canadian safety record is a good one, and I congratulate the operators for that, but no one will argue that our system is fail safe. Not only do we have the examples of Chernobyl in 1986 and Three Mile Island in the United States in 1979, but in 1995 in this country there were 786 unusual incidents recorded for Canadian installations and 391 were formally reported to the Atomic Energy Control Board.

In 1983 there was a serious accident at the Pickering 2 installation less than 20 miles from Toronto. The two reactors were shut down for four years. A pressure tube had burst without warning in the in the very core of the reactor system. The replacement cost was $700 million.

Ontario's nuclear facilities are not built to withstand the magnitude of earthquakes now anticipated in this region. An earthquake is considered the most likely cause of a severe accident to a nuclear power facility.

The bill is also necessary because individuals in Canada cannot get personal or household insurance which will cover them for damages resulting from a nuclear facility accident. No insurance company will cover this risk for individuals. The insured has no coverage for radioactive contamination. I was shocked to learn that but that is the case. None of us can get an insurance policy which will cover us against these kinds of damages.

Consequently the only recourse for individual damage claims from victims is the operators under this law. At present the operators are only liable up to $75 million. One can imagine what this would give to the citizens of greater Toronto if there was a Chernobyl type breakdown at Pickering or Darlington. One million people would get about $75 each.

In the United States under the 1957 Price Anderson Act recent amendments require liability coverage of $160 million per reactor. Plus, in event of claims beyond that, a fund has been established which provides total coverage of up to $7 billion. Sweden has recently increased its liability in similar circumstances from $81 million to $130 million per reactor, and Japan from $80 million to $240 million.

If you were affected by a nuclear accident, Mr. Speaker, because the winds deposited radioactive fallout over your home, business, farm or workplace making them uninhabitable for tens or perhaps hundreds of years, think of what this would mean to you, quite apart from the knowledge that you and your loved ones might contract cancer or your offspring suffer genetic damage.

Financially your means of livelihood could be wiped out and your property destroyed. You and your family could be ruined and there is no way to protect yourselves because insurance companies also fear a meltdown. Every insurance policy in Canada excludes coverage for nuclear accidents. No other industry has the freedom to destroy the health or property of innocent third parties who can neither insure themselves beforehand nor sue for compensation afterwards.

In conclusion let me summarize. The Nuclear Liability Act in its present form is not adequate to compensate victims of a nuclear facility accident. Accidents have taken place before and can take place again. The law needs to be updated and revised. The act requires other amendments as well but I am not dealing with those today. For example, in the act there is a limitation that all claims must be made within 10 years. Now they realize that such claims for such damage only come to light much later than 10 years, such as damage to offspring or cancer and so on. There have been recommendations that claims be allowed up to 30 years but I am not dealing with that. I am not dealing with that today; I am simply saying that the act requires other amendments.

I urge hon. members to send the bill to committee where witnesses could be heard and if necessary have the bill amended. I am extremely flexible on the details of the bill. If the evidence suggests that the liability should be higher than $500 million then change it. That is no problem. If the committee can find a better way of protecting citizens when the damage goes beyond $500 million I am all in favour of improvements.

On the other hand I cannot accept that this matter be ignored. Nuclear energy is too dangerous a substance. There is no perfect way to control it or its waste product. I would prefer that we stop using nuclear energy, but if that cannot or will not be done then at least let us make sure that any victims get fair and just compensation.

Nuclear Liability ActPrivate Members' Business

2:20 p.m.

Bloc

Maurice Dumas Bloc Argenteuil—Papineau, QC

Mr. Speaker, I thank the hon. member for Notre-Dame-de-Grâce for introducing Bill C-249, an act to amend the Nuclear Liability Act.

If I am not mistaken, the purpose of this bill is to increase to $500 million the maximum level of liability for which a private sector nuclear facility operator may be required to have insurance coverage. This level is currently set at $75 million. So, the cost of a nuclear disaster exceeding $75 million would be borne by the Crown if, of course, it agrees to meet that cost.

Personally, I have no objection to increasing the insurance coverage required. I would even feel that $500 million is not enough.

We only have to consider what happened last summer in the Saguenay-Lac-Saint-Jean region to realize that a figure like $500 million is not nearly enough when disaster strikes.

Another example more closely related to the nuclear industry is the Chernobyl disaster. Five hundred million dollars is not much considering the extent of a disaster such as Chernobyl. I am sure that accident cost billions of dollars, and I am not taking into account all the repercussions on the lives of the people affected.

In a country like the USSR, at a time when human rights and individual rights did not count for much, officials were able to come through all right.

Let us imagine for a moment that such a disaster should occur in Canada. Let us consider the impact on people and estimate the costs of such an accident.

I do not think Bill C-249 goes far enough. I agree that companies should have excellent insurance coverage, but is that the real problem?

Some may think an insurance coverage of $1 billion is excessive. They think so because, collectively, we do not think we could experience such a disaster here. Personally, I am convinced we could.

Since the beginning of nuclear power plants in Canada, a number of minor incidents have occurred. More recently, we have realized that certain components of our plants deteriorate faster than our engineers had expected. Moreover, those who run these plants in the public or parapublic sectors have only one goal: producing electricity at the lowest possible cost.

Some of you may agree with me, but they do not think companies would push it to the point of jeopardizing public safety. Again, I am a bit more sceptical. Collectively, when we have examined this issue in committee or when other bills have been put before the House, we have realized that if public safety is a goal, it is not necessarily assured.

In the nuclear industry, the situation is worse, because this form of energy is extremely difficult to control and a relative safety can be achieved only with the most advanced and carefully implemented technology.

And I do mean relative safety. Also, $500 million in coverage does not seem like much for the following reason. If an accident were to occur in one of our plants in Quebec, in Ontario or in New Brunswick, it could mean massive population evacuations, and depending on the direction of the winds, it would not be surprising if our neighbours down south were affected.

We know that several countries were affected by the fallout from the Chernobyl accident. Do you think that $500 million would be enough to deal with the problem? I do not think so. We would need to evacuate the whole population of some cities and towns, the sick, the elderly, the school children. Not to mention the unavoidable damages to the environment. The fallout could affect livestock, wildlife, the flora and all the food production over quite a large area. Add to that the destruction of whole service sectors in cities located near these facilities.

Man still has much to learn about nuclear energy. An oil spill can be contained. With much effort, the environment can be restored within a few years, but following a nuclear accident, it will be thousands of years before the environment is back to normal.

For example, such an accident in Canada would have a major impact on extensive forests, agricultural lands, and vast mining areas. Would 500 million years take care of it? In Ontario, with Ontario Hydro, in Quebec, with Hydro-Québec, in New Brunswick or elsewhere in Canada, I doubt any operator could deal with a major accident.

The introduction of this bill is another opportunity for me to raise the question of the development of nuclear energy as a source of power. I really think that, in spite of the assurances they give us as taxpayers, the leaders of all the countries in the world have made decisions in too great a haste.

We started to build nuclear generating stations without being assured of their total safety.

To conclude, we support Bill C-249 but we are still sceptical that $500 million will be sufficient in the event of a major nuclear catastrophe.

Nuclear Liability ActPrivate Members' Business

2:30 p.m.

Hillsborough P.E.I.

Liberal

George Proud LiberalParliamentary Secretary to Minister of Labour

Mr. Speaker, I rise to address the House on Bill C-249. I thank my colleague, the hon. member for Notre-Dame-de-Grâce, for bringing this important matter before the House.

The hon. member has a long and distinguished history of service to Canadians. I commend him on his commitment to issues of public safety and well-being. This member is well known across the country for the good work he has done. He is especially well known in my part of the country.

This proposed legislation is another example of my colleague's concern for Canadians and it deserves the careful attention of this House. As I understand it, Bill C-249 would achieve three objectives. First, it would increase the maximum level of a nuclear operator's liability for third party damage in the event of a nuclear accident. The hon. member for Notre-Dame-de-Grâce is proposing that nuclear operators be required to carry $500 million worth of liability insurance compared to the current requirement of $75 million.

By extension, Bill C-249 would increase the threshold at which the Nuclear Damage Claims Commission would be established and claims would be moved from the court system to the commission.

Finally, the bill would require the minister to make liability payments once an order is issued by the commission. This addresses what some have criticized as unwarranted discretion on the part of the minister.

I want to make it very clear that the government supports in principle the objective of increasing operator liability under the Nuclear Liability Act. We support a strengthened commitment to compensate victims of nuclear accidents. At the same time, we recognize that a number of other important changes need to be made to the act. I would like to take a few moments to explain why.

The Nuclear Liability Act, as the hon. member said, was proclaimed in 1976. It establishes a comprehensive scheme for

compensating victims of injury and damage arising from nuclear accidents. Twenty years after its proclamation, the act continues to uphold the principles that are important to a nuclear liability regime.

It is important to note that in those 20 years the Nuclear Liability Act has not changed substantially. A full six years before it was proclaimed, the act was actually passed by Parliament in 1970. It is a quarter of a century old and in that time the nuclear industry has evolved dramatically. While there is clearly a need to increase liability levels in the act, this is only one of several modernizations that need to be made for the benefit of potential victims of a nuclear accident.

In other words, the time has come for a comprehensive review of this act. Recent litigation that challenged the constitutionality of the act also highlighted the need for a comprehensive review. Although the Ontario Court, General Division, ruled in 1994 that the act is valid federal legislation, in 1996 an appeal of that decision was discontinued.

We need to update and modernize the act to more fully meet our present domestic needs and also to reflect changes in the area of international nuclear liability. In addition to revising the compensation regime, we need to correct several technical problems that have been identified within the act.

I am pleased to inform the House that such a comprehensive review is currently under way. A federal interdepartmental review committee has already developed a number of proposals to amend the act, and these proposals have been presented to key stakeholders, including operators of nuclear facilities, representatives of provincial ministries with responsibility for energy and emergency planning, and the Nuclear Insurance Association of Canada. Based on the feedback received during these preliminary discussions and on subsequent consultations, the review committee will recommend how to proceed.

Hon. members should know that the stakeholders involved in these discussions have expressed strong support for a comprehensive review of the Nuclear Liability Act, one that will encompass all of the issues that need to be addressed. The outcome will be a package of amendments that will update, modernize and clarify the entire act.

I want to assure the House that the improvements to the compensation regime as proposed in Bill C-249 are a key element of the review. This is the most important objective of the revision process. I agree with the hon. member that we need to review the current liability limit of $75 million. We must arrive at a liability level that reflects current realities. I think the limits should be raised, but I do not know whether that amount should be $500 million or some other amount. We should approach the matter in a thoughtful way, assessing what funds might be available from whom, and in what form.

The interdepartmental review committee is currently exploring options for securing higher levels of insurance from private insurers. This would increase funding for victims. The review committee is prepared to consider other forms of security, such as self-insurance, pooling arrangements and government compensation. If we examine all these sources, we may well come up with a $500 million fund. However, I am told that this is not an easy matter and certainly it is not clear that the private insurers can come up with these funds.

Another issue we need to consider is the impact Bill C-249 will have on the federal government's liability under the reinsurance agreement that was signed with the Nuclear Insurance Association of Canada in 1976. Reinsurance enables insurance companies to undertake business that their limited capacity would not normally allow them to touch.

This arrangement between the federal government and the NIAC provides for both additional insurance capacity and additional types of risk. Basically it ensures that the federal government will provide coverage for all the risks contemplated in the Nuclear Liability Act that are not covered by the operator's insurance up to that limit of $75 million.

For example, some small reactors may be required by the Atomic Energy Control Board to carry only $500,000 in liability insurance. In that case, the remaining $74.5 million is guaranteed by the federal government through the reinsurance agreement. Increasing the maximum liability to $500 million would mean that the federal government could become liable for as much as $499.5 million under this scenario. Any amendment to the liability limit clearly should be accompanied by changes to the reinsurance agreement.

The interdepartmental review committee is addressing another issue, the limitation periods for claims arising from nuclear accidents. Under the current act, claims must be brought within 10 years of the accident. However, some arguments favour extending the limitation period for claims related to personal injury or death.

Other arguments favour relying more heavily on administrative systems, rather than the courts to deal with compensation. This could be achieved by amending the act to explicitly lower the threshold at which the Nuclear Damage Claims Commission is established. The result would be a more effective compensation scheme that minimizes hardships for victims of nuclear accidents.

A number of other provisions of the Nuclear Liability Act need to be clarified or updated. For example, the definition of compensable nuclear damages should be reviewed. The current definition does not make explicit reference to environmental damage, preventive measures or economic losses. This is not consistent with evolving international trends, nor with the growing public concern for the environment or with principles of fairness. The review will

address the need to revise the definition of nuclear damage to reflect these matters.

As well, the rules and regulations governing the Nuclear Damage Claims Commission need to be elaborated. The criteria for the commission's membership could be broadened to permit people with a range of experience to participate.

Another concern is that under the current act, the rules governing the commission's procedures can only be developed after the commission is established. It would seem to make sense to have this operating framework in place before an accident occurs, rather than after an accident when the development process may be rushed and may not be well thought out.

As mentioned earlier, there are also a number of technical problems with the act. For example, the act lacks a preamble that would explain its purpose and objectives and describe a constitutional basis for the legislation. It has also been suggested that compensation amounts be included in regulations rather than in the act itself, since it is easier to amend regulations to take account of inflation or increased insurance capacity than it is to amend the act.

There is also a perceived need to clarify and strengthen the relationship between the federal government and the Nuclear Insurance Association of Canada.

In conclusion, I can offer my qualified support for Bill C-249. I acknowledge and agree with the objective of increasing liability limits under the Nuclear Liability Act. However, we need to establish a solid rationale for a new liability limit. As well, we need to identify where these funds come from and how this proposed change will affect the federal government's liability.

Nuclear Liability ActPrivate Members' Business

2:35 p.m.

The Deputy Speaker

The hon. member for Hamilton-Wentworth. A senior colleague has given his place to him because he has to catch a plane.

Nuclear Liability ActPrivate Members' Business

2:40 p.m.

Liberal

John Bryden Liberal Hamilton—Wentworth, ON

Mr. Speaker, it is a pleasure to rise in support of Bill C-249 because it gives me an opportunity to share with you an historic anecdote pertaining to Canada and Canada's role in nuclear energy that I do not think is very well known.

During the second world war, Canada was very active in research in chemical and biological warfare weaponry at Suffield in Alberta near Medicine Hat. At that time the Canadians experimented with the dispersal of biological and chemical dust with the expectation that this would be the kind of weapon that would be used during the second world war by the Germans or possibly the Japanese. So the research was primarily directed at the developing countermeasures.

However, by the end of the second world war because this research took place out in the prairies Canada became the number one nation with an expertise in the dispersal of small particulate matter over very large areas.

What we are really talking about in Bill C-249, which is an act to amend the Nuclear Liability Act, is nuclear fallout. In the event of an accident occurring at a nuclear reactor there is the possibility of radioactive dust escaping into the atmosphere, polluting and irradiating large regions and causing serious consequences to the health of humans and animals.

This is the same problem that existed in the late 1940s when at the onset of the cold war it was realized that the Soviet Union had developed an atomic bomb. My historic anecdote is for those of that generation who remember the early years of the cold war and the nuclear fallout scare. I think people in their fifties and sixties will remember that their parents were installing fallout shelters in their basements. They will remember that there were all kinds of maps and diagrams showing the effects of nuclear fallout.

These maps and diagrams were produced mainly by the Americans and by the British showing the impact of a nuclear explosion on a city in the United States or in Europe were entirely the product of Canadian research in chemical and biological weapon dispersal.

It is an interesting anecdote because as Canada was the second country in the world to develop nuclear capability, we have always had a responsibility to lead the world in issues pertaining to nuclear energy and certainly issues pertaining to nuclear safety.

The Nuclear Liability Act addresses the possibility that a peacetime nuclear reactor will have a catastrophic accident and will pollute the atmosphere with down wind fallout in the same sense as a nuclear explosion. There is no doubt that in the event of such a catastrophe the provision for $75 million in damages is inadequate in every way for the kind of damage that would actually occur.

Canadians studies done during the second world war and the immediate post-war period indicated that in the event of a nuclear bombing or a nuclear accident at a reactor the fallout could go down wind for as much as 30 miles on a widening, fan shape that could be a couple of miles wide at the outset to very wide at the 30 mile limit.

Since then as a result of the accidents that have occurred, in particular at Chernobyl, we have come to appreciate that when there is a nuclear fallout emergency, it very long term and long range. In fact the radioactivity from the Chernobyl accident has been detected all away around the world, so the fallout has come down.

Therefore, it is high time, after 26 years, to upgrade Canada's nuclear liability legislation.

Of the G-7 nations, Canada has the lowest at $75 million of nuclear liability in the event of an accident. In Great Britain and Germany the liability in the event of an accident is $550 million. In other countries in Europe there is an unlimited liability. In the United States the liability runs up to $13 billion.

Therefore it seems clear that Canada needs at least to come up to the minimum level of liability as expressed by our European colleagues.

It is certainly true there is a different situation occurring in Europe in the sense that the countries are small and there has been a need for international conventions in the event of an accident in one country that contaminates the territory of another country. There are conventions that provide for compensation across borders.

Because of the vast spaces in Canada and the vast spaces in the United States, in the event of an accident of less than 1,000 kilotons only Canada and possibly the United States will be affected. It is not likely to affect other countries of the world. We do have an arrangement with the United States in the event of an accident in Canada or in the United States. Crossing the border there is a provision for liability payments if the lives and properties of citizens of our neighbouring country are affected.

In the final analysis Bill C-249 addresses only one aspect of the Nuclear Liability Act. Obviously the act has to be upgraded and modernized in many aspects. Other colleagues have suggested some ways in which this can be done.

By raising the liability threshold from $75 million to $500 million at the very least we say to the operators of nuclear facilities, who in some instances are private operators, that they have a very high responsibility to ensure every level of safeguard is implemented in the operation of their nuclear establishments. This is the very least we can expect of both nuclear institutions that are privately run and those that are publicly run.

It is with great pleasure that I support in principle and to the letter the intent of Bill C-249. The member for Notre-Dame-de-Grâce has done a great service to his country and to the House bringing the bill forward.