Debates of Oct. 19th, 1998

Salaries For Stay At Home Mothers And Fathers

[Guy St-Julien, Liberal, Abitibi, QC]

moved:

That, in the opinion of this House, the government should legislate to grant a salary to mothers and fathers who stay at home to care for their children.

Mr. Speaker, on October 7, 1997, I tabled the following motion in the Order Paper and Notice Paper :

That, in the opinion of this House, the government should legislate to grant a salary to mothers and fathers who stay at home to care for their children.

I thank the Liberal member for Mississauga South, who seconded my motion today.

We have been promoting this idea, with the support of many Canadians, for several years. On April 28, 1998, I said in this House that Canadian and Quebec parents seem to have the best of intentions about sharing the job of raising children.

Canadians must recognize the contribution made by parents in raising their children and governments must give them the maximum support possible. It is my view, and that of many Canadians, that a guaranteed annual salary would be an important tool in the fight against poverty.

At the instigation of the Minister of Finance, an ad hoc Liberal committee was formed in April to examine possible solutions to the problem of unpaid work in the home.

In point of fact, the Income Tax Act discriminates against Canadian parents who choose to care for their own children, especially those who have large families.

An example is the Côté-Germain family of 1016 Quessey Street in Val d'Or, Abitibi, whose child tax benefit was cut by a whopping $280 a month this year. Right now there are nine children in this family, and in a few months there will be ten. The eleven of them are relying on a single gross annual salary of $55,000 and, to add insult to injury, are not entitled to a GST refund.

The Government of Canada's tax legislation does not take size of family into account. We should rethink our approach and draft legislation that is fair to Canadian families.

I would like to thank Beverley Smith of Calgary, who has worked for years with a group of Canadian stakeholders in support of salaries for women and men who stay at home to raise their children. For many years now, the people of Abitibi and Canadian MPs have known about my efforts to see mothers or fathers who stay at home to care for their children paid a salary.

I turn the floor over to my colleagues. Canadian parents want to hear whether or not you will be supporting my motion today.

[Eric C. Lowther, Reform, Calgary Centre, AB]

Mr. Speaker, I rise today to speak to the motion which has been presented by the hon. member for Abitibi. For many of the people watching it might be wise to read the motion:

That, in the opinion of this House, the government should legislate to grant a salary to mothers and fathers who stay at home to care for their children.

For many years, in spite of the concerned voices of many Canadian families and the intense lobbying work by many in this House including even some in the Liberal Party, the government has chosen tax funded support of only one approach to child care. That one approach is institutional day care, not parental care or extended family care, but only formal day care.

In the current budget I thought the Liberal cabinet and the finance minister might finally have heard parents who want the discrimination against their options of child care, including full time homemaker and parent, to stop. But they went in the other direction again. They increased the child care expense deduction for the cost of institutionalized day care by up to $2,000 more per child but did absolutely nothing to recognize the cost and value of other forms of care parents choose to provide. It is interesting that this is what they have done.

I have consulted a number of studies that point out how important parental care is to the long term emotional stability of children. Even without considering those studies, let us consider why the government cannot treat parents' choices equally. If the government will provide up to a $7,000 deduction for institutional receipted care expenses, why can parents who choose other options not also be considered? This question has been asked again and again by parents and it was asked loudly after the current budget ignored them one more time.

Perhaps the motion on the floor of the House today which calls for parents to be employed by the government, i.e., the government would pay them a salary to be parents, is the Liberal government's best solution, but surely we can do even better. I appreciate the member's attempt to recognize the value of parental care in the motion. I truly hope it is a real start. However, based on the federal government's repeated determination to only subsidize day care, and it increased the tax breaks for it just eight months ago, there is little real hope that the pattern will change with the current government. Parents will continue to be told that through the tax system the only valuable child care is non-parental day care. That is tragic.

Let us assume somebody is listening and perhaps today's debate will influence the government to finally consider changes to bring in fair family tax reforms. The Reform Party has long called for fair family tax reforms.

Let us seriously consider the motion. It calls for the government to pay parents. Does this give parents the freedom to choose the child care arrangement that best works for them? Does it allow them to make that choice without discriminating tax treatment? Is it really simple?

I have had parents ask me these questions. How would this work? If parents work part time and only use day care a little bit and care for their children at home the rest of the time, do they get a salary for being stay at home parents? What if a grandparent or another member of the extended family looked after the kids when the parents were working and occasionally day care was used but three days a week mom was home for part of the day, what do they get?

There are some families where parents work alternative shifts. One parent is with the children in the day and the other at night and maybe there is an hour with a sitter. Do these parents qualify? They both work but they both stay at home with the kids.

Add to this that life is dynamic. Situations change because of illness, job changes, moves, et cetera. Child care arrangements within families may often change several times in the same year.

Picture trying to figure all this out on an already overly complex tax form. Does this not add more stress to the family? Maybe there is a better way. There is and I am going to get to that in a moment.

First let me ask are Canadian families not also concerned about their country and the overall prudent operation of the government? I think they are. Why then would they want to pay the high taxes that they pay? I should point out that the Liberal government has raised taxes 37 times since coming to power. Why would they want to pay these high taxes and have the government flow that money through Revenue Canada and only have Revenue Canada give some of it back to the same taxpayer? This is expensive bureaucratic manoeuvring. Where is the value added by flowing the money through Revenue Canada? Put a dollar in and get 75 cents back out. The bureaucracy burns up the rest.

Why not just leave the dollar with the taxpaying family in the first place? Save us all the money. That family pays less tax and has more disposable income now when it is needed. Other taxpayers are saved the expense of collecting dollars from and returning dollars to the same people.

The Reform Party, driven by its membership made up of thousands of Canadian families, has long called for fair family tax treatment when it comes to child care costs. Instead of just a child care expense deduction for day care, Reformers have long proposed a child care expense credit that would be available to all parents. This per child credit can be deducted directly from the tax the parents are required to pay thereby leaving the money and the child care choices with them.

If the family has no tax to pay, then the credit would be paid to them in the form of a refund. This way everyone receives equal monetary recognition for the costs of child care, regardless of the method of child care chosen. As well, there is no added bureaucratic cost flowing through Revenue Canada.

Finally, let us examine the concept of paying someone to be a parent. The proposal in this Liberal motion today would give the appearance that stay at home parents are employed by the state. In effect, parents would be hired using their own money. This is strange. Down the road would conditions be applied to the salary? Is it conceivable that parents would be required to meet some government set of parenting rules or risk loosing the salary? Is that far-fetched? Perhaps, but why go down that road? History is full of examples of things that people thought would never happen, but they did. Do parents have children so they can be employed by the state? No. Parents have children to build a family and express their love.

It is better to recognize that there is a cost and a social contribution to raising the next generation of Canadians and all parents, regardless of the change in child care options chosen, should be given the same degree of tax relief. There is no salary that appropriately addresses the interaction between loving parents and their children and it is inappropriate to try to set one.

In summary, it is good that this motion is a recognition of significant tax inequities and tax discrimination against homemakers. Unfortunately, this government, in typical fashion, also demonstrates an approach that increases government dependency and wasteful spending through an inefficient methodology. Instead, replacing the child care expense deduction with a fully refundable child care expense credit is a much superior means to addressing the current inequities in the tax structure. It would not be dependent on the method of child care chosen and it would reduce both family and government administrative overhead.

This approach to a fair family tax system for Canadian families, which the Reform Party has long advocated and developed, is simple, flexible and efficient. Most importantly, it is good for Canadian families and it is good for the children they care for.

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

Mr. Speaker, I am delighted to rise on this motion on behalf of the people in the riding of Kamouraska—Rivière-du-Loup—Témiscouata—Les Basques.

The motion reads as follows:

That, in the opinion of this House, the government should legislate to grant a salary to mothers and fathers who stay at home to care for their children.

My first thought is that the member for Abitibi—Baie-James—Nunavik has introduced an interesting subject for public debate, but that his position is either very naïve or out of touch with reality.

Everyone in Canada knows that family policy is a provincial responsibility. It is the responsibility of the Government of Quebec. Furthermore, the proposal by the Liberal member, a member of the majority, is totally contrary to the approach his government has taken in recent years.

We will recall that, in 1993, the electoral promises of the Liberals included a national child care service. In short, they said:

We must try harder—A Liberal government will create up to 50,000 child care spaces—

We are still looking for them. The project was cancelled. It was swept under the carpet. This is the first contradiction with the motion of the member for Abitibi—Baie-James—Nunavik.

In the meantime, the government responsible for family policy set up a $5 child care service, which is so popular that they are looking all over for money to meet the demand. People in Quebec gave some thought to finding the appropriate solution. It was put into effect and is working.

This is an example where the federal government and federal MPs should limit themselves to proposing interventions in areas of federal jurisdiction.

There may well be a certain amount of visibility involved. There may also be a real desire to improve a difficult situation, but I cannot say the solution proposed is the right one.

During their prebudget consultations throughout Quebec, Bloc Quebecois members held information sessions and listened to what people had to say. Let me give you an example.

Take the case of a young couple who earned $20,000 in a given year, or about $10,000 for each person. They have three children. At the end of the year, they receive their income tax assessments, and are asked to pay $500 and $800 respectively. On the same day, they also receive a letter telling them they are allowed to invest $10,000 in an RRSP. We are talking about a couple with three children and an annual income of $20,000. To tell them they owe taxes and then say that they could have invested up to $10,000 in an RRSP is adding insult to injury.

These are the real tax problems in Canada. They have to do with the indexing of tax tables. We must make sure that low income people can manage adequately, and not necessarily by having an additional salary, as suggested in the member's proposal.

The member for Abitibi—Baie-James—Nunavik is contradicting his own government. Let us not forget that, over the two mandates of this government, transfer payments to the provinces have been reduced by $42.2 billion. In order to truly improve the plight of our families, would it not be better for the member for Abitibi—Baie-James—Nunavik to propose that the money be given back to the provinces, now that we will have budget surpluses? Is this not a much more pressing need, and would it not be a much more realistic solution to the problems being faced?

Here is another contradiction. The Liberal government reduced access to employment insurance benefits for women on maternity leave by implementing a reform that makes it much more difficult to qualify for benefits. On the one hand, they want to pay a salary to the spouse who stays at home, while on the other hand they make it harder to qualify, so much so that women on maternity leave can no longer qualify for employment insurance benefits. This is another contradiction that dampens the member's good will. I think there are other initiatives he could propose that would produce much more positive results.

There is the whole issue of pay equity. There is talk of paying a salary to the stay-at-home parent, but the government does not even comply with the rulings issued by its own tribunals, which provide that there must be equal pay for work of equal value. This principle was confirmed by a tribunal, and now the federal government is trying to find some way to avoid having to pay the amounts involved. They refused to settle out of court, a ruling was handed down and now they will not abide by it. This is yet another example of bad faith.

While the intention behind the motion of the hon. member for Abitibi—Baie-James—Nunavik is good, the solutions put forward are not first rate.

We in the Bloc Quebecois are proposing constructive solutions, which I will outline again. First, to use the surpluses to restore social transfers to the provinces. If they get their share back, the provinces will be able, within their jurisdictions, to direct the funding where it is needed and to decide where it is best invested; as a result, individual citizens will have an adequate income to ensure the economic well-being of their families.

The second solution is to negotiate in good faith with the Government of Quebec so that its new family policy can be fully implemented. We also ask that the federal government withdraw its appeal before the federal court on the issue of pay equity in the public service and make changes to employment insurance to provide greater access to maternity leave.

The whole issue of income for stay at home spouses is a complex issue that must be examined thoroughly. We must seek the opinion of women's groups on this. We must consider solutions people put forward.

There is a problem that needs to be resolved. Traditionally, women are the ones who stay at home for thirty years or so. By the time they reach retirement age, they may be widowed, divorced, separated or what not, and find that they have to fend for themselves. But unlike women who have been on the labour market, they do not have access to a plan like the Quebec pension plan or the Canada pension plan.

With respect to social protection, we should give serious thought to ensuring that women do not find themselves in a difficult financial situation at that time in life. But the solution is not necessarily to provide a salary to stay at home parents. I think this whole issue needs to be revisited.

In conclusion, the hon. member for Abitibi—Baie-James—Nunavik has proposed a significant motion for ensuring that our families have a decent income. As far as solutions are concerned, he is disadvantaged by being a member of a government that has been unwilling to find solutions to problems and is now living with the results of its inaction, namely increased poverty in Canada. The gap between rich and poor is widening. It is becoming increasingly difficult for families to survive as families.

There are no easy solutions to this problem, but there is a need for an overall strategy, a collective intervention strategy which will make it possible to find a satisfactory solution. This is why I wish to see a strategy that respects jurisdictions. If there is one instance where Quebec can show that it is working efficiently within a jurisdiction that belongs to it, it is the way it has defended social rights.

At the present time, there is someone in Quebec who wants to become premier and who has no concern whatsoever for providing people with social protection, and he has decided that Quebec needs to be nothing more than a market-based economy. It is my impression that Mr. Charest will be getting the very clear message that the people of Quebec want nothing to do with this model. They have developed another, and are capable of continuing to develop it.

This motion by the hon. member for Abitibi—Baie-James—Nunavik is a good starting point for reflection. He will need to see that it is debated further within his caucus so that we may all work together to focus the same amount of energy on overall solutions to poverty as there was on overcoming the deficit.

More original solutions must be found, and not at the expense of the poorest members of society, so that in 10 years from now when we are retired, we will be able to say we did our part in the battle against poverty.

[Libby Davies, NDP, Vancouver East, BC]

Mr. Speaker, I am very pleased to rise in the House today to speak to the motion that is before us.

I would like to thank the hon. member for Abitibi—Baie-James—Nunavik for bringing forward this motion because it provides us with an opportunity to talk about a very important issue, that is, the role of caregivers who are primarily women in the home in our society. It is a very important issue that I think must be debated in the House.

We in the NDP believe that it is very important that the role of caregivers, primarily women working in the home, is recognized. Women working in the home are often portrayed negatively in a society that seems to place value only on economic pursuits. In fact, child rearing is the most important task that we face as individuals and as a society.

From that standpoint this motion is grounded on some important principles that we should be debating. One of those principles is that our children are our most valuable resource and those who care for children on a full time basis must be recognized as providing an important service to society. They are nurturing those who will shape the future of our society.

However, having said that I must point out that we have some concerns about this motion because it is put forward in a very simplistic way and does not give any context to the condition that we now find ourselves in of growing poverty, growing unemployment and fewer and fewer options for caregivers and parents who remain in the home.

For example, what safeguard is there that the salary that the motion refers to will be adequate to ensure that caregivers, who are mostly women, will have the options that women have been struggling for over the course of the last 100 years? I think the danger here is that the salary the motion refers to will be so far below the poverty line that it will serve the opposite purpose than that which is intended. Instead of adding to the value of the work that women do in the home, it could actually undervalue the important contribution that caregivers make. Instead of opening doors for women it could limit the options.

We only have to look at other issues of public policy and at how we treat caregivers in the home to see how we undervalue that work. This is where the danger lies in the motion. We only have to look at welfare policies. In most provinces welfare payments are way below the poverty line. Many people who are on welfare are women. They are raising children. They are struggling to pay rent and to meet the daily needs of food. We only have to look at the situation with the EI cutbacks which are forcing more and more women into a range of more and more limited options, if they can even claim EI.

We note from the changes in the regulations that less than 40% of workers who pay into UI, many of whom are women, are now no longer eligible. It is forcing those women back into poverty and back into a situation where they cannot meet the basic needs of raising their families. Those are the kinds of public policy decisions we have had that have really pointed the finger at the Liberal government as to what it really thinks about the role of women and caregivers at home.

We only have to look at pay equity and the disastrous course this government has embarked on in terms of denying federal civil servants what has rightfully been theirs for so many years. That struggle has gone on for more than 14 years. The member needs to go back to his own caucus and his own government to establish accountability and to point out the contradictions and the hypocrisy this government has put to Canadians in terms of policies that have actually penalized women and caregivers.

A program of affordable quality child care would truly provide women with meaningful options. At the same time it would ensure all children were given the necessary early education and care despite a woman's income. There is no question that families in Canada are under incredible pressure. Prolonged high unemployment, a labour market in which wages are stagnant and jobs are hard to come by, and massive cuts to social programs and public services have made it more and more difficult for families to meet their own needs and the needs of their children. The fact is that affordable, accessible, high quality early childhood education and child care are critical components of an integrated strategy to meet the needs of families. Unfortunately this motion does not address that.

Child care performs many important functions in our society, functions that improve the quality of life for children and families, both for those who are poor and for those who are not. High quality child care and early childhood education ensure children are given important foundations necessary for healthy growth and development throughout the rest of their lives. Access to child care is a key source of equality for women because it allows women access to jobs, therefore improving their chances for greater economic equality. As such we should look at child care as an anti-poverty measure for Canada's children.

The sad reality is the Liberals and the Tories before them have not taken this issue seriously. The Liberals delivered the biggest blow to Canadian children by eliminating the Canada assistance plan which was the only source of federal funding for regulated child care in Canada. Under the Canada health and social transfer there is now no provision for federal-provincial sharing of subsidized child care. Therefore there is no incentive for provinces to provide more child care spaces. By eliminating the Canada assistance plan, the Liberals effectively cut $350 million from federal spending on child care. This hurts poor women and children the hardest.

Canadians do care about child care. A national survey commissioned by the child care sector studies steering committee and conducted by Environics in May found that 89% of Canadians agree that high quality child care is an important factor in helping to ensure Canada's future social and economic well-being. Eighty-one per cent of those surveyed think the government should develop a plan to improve child care, and seventy-eight per cent would like to see government spend more money than it does now to ensure high quality care exists at fees families can afford. That is a very important matter in terms of accessibility. Despite promises to the contrary, this government has done nothing.

In the throne speech of the member's own party, the Liberals had the gall to say “one of our objectives as a country should be to ensure that all Canadian children have the best possible opportunity to develop their full potential”. The truth is that while 1.4 million children participate in some form of paid child care, the organizations operate without the support of clear public policy and with little or no public funding. The shocking reality is that on average child care workers are paid less than zoo keepers. In 1996 the net average annual income of caregivers in regulated family child care was $8,400.

That is the kind of value the Liberal government has placed on caregivers. I think it raises very serious concerns about where this motion is coming from, that it is not connected to the reality of what has happened in Canada which has undermined the ability of families to provide care at home or to give options to women to improve their equality and to ensure there is early childhood education for children.

In 1993 the Liberals abandoned their 1993 election promise to create 150,000 new child care spaces. The 1997 platform does not even mention child care, so we have a travesty on our hands.

While we support the idea of remuneration for the important work mothers and some fathers do in the home, the real issue and the ideal is to have this become one component of a much broader comprehensive initiative centred around early childhood care and education, the equality of women and ensuring there are real options in the home as well as in the workforce to make sure we do not see a situation of growing poverty among children and families. It is to make sure we do not see a situation where women are denied EI benefits, where women are denied pay equity and where women are struggling, living below the poverty line caring for their children.

I urge the member to go back to his government and to point out the stark realities and the contradictions and the victimization that has happened to women and children of this country because of policies from the government.

[David Price, Progressive Conservative, Compton—Stanstead, QC]

Mr. Speaker, the hon. member for Abitibi—Baie-James—Nunavik has long worked on this. He presented a similar motion in 1993, when he was a member of the Progressive Conservative Party. The only difference is that he referred only to women then. In five years, not only did he become a Liberal, but he now includes men too. I congratulate him on that.

The motion is a good idea, but it should be looked at more seriously. I think that everyone agrees the work done by parents who stay at home is important and should be recognized in some way or other. However, a guaranteed hourly salary of $5.40 is not very realistic these days. The member must realize that his own government will never agree to his motion. But it is nice to dream.

If the member were serious, he would perhaps be looking at more realistic solutions. My colleague from Shefford introduced in this House a motion to index the child tax benefit, which was agreed to on division. Perhaps the member should try to convince his own government to introduce legislation consistent with his motion.

The government could perhaps think about investing more money in child care or about giving tax credits. More flexible work schedules could be established. The hon. member could also pressure his own caucus to get the government to consider these proposals.

The cost of such a project could reach $9 billion. I do not think the government is prepared to spend that kind of money. I thank the hon. member for proposing this motion, but, unfortunately, I do not think it is very realistic.

[Paul Szabo, Liberal, Mississauga South, ON]

Mr. Speaker, I am very pleased to speak to this motion today. I extend my congratulations to the member for Abitibi for taking the time, with all the issues he could have raised in this House, to put forward the family and investing in children as the issue he wanted to bring before the House and phrase it in a way that did not lock people into anything but rather gave us the opportunity again to talk about investing in children and the family.

There is no doubt that the Government of Canada has taken positive steps to invest in our children such as the increases in the Canada child tax benefit, cumulatively about $1.7 billion of additional investment. Is it enough? No, but it is a start and we are working in the right direction.

This is not a debate about child poverty. This is a debate about the principle of how to invest in children so we improve the probabilities of better physical, mental and social health outcomes of children.

Dr. Fraser Mustard, the founder of the Canadian Institute for Advanced Research, came before the Standing Committee on Health, of which I was a member, in October 1994. Dr. Mustard provided us with substantive evidence that childhood outcomes were not a question of being rich or poor but rather of other factors related to the quality of care during the formative years of infancy.

That is a very important point. Poor people can raise very healthy, well adjusted children. Rich people can have very poorly developed children. It is not simply a matter of rich and poor. Poverty is an exacerbating factor, not a causal factor.

I have spent a lot of time on this issue and I want to share with the House some new research that has come out this year regarding why it is important to have direct parental care. It came out in a report that was completed in April 1998 and published in June 1998. It came from Dr. Christopher Ruhm of the University of North Carolina.

The study was of population data from 1969 to 1994, 25 years of population data. It looked at nine European countries, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Norway and Sweden.

The study is long but the conclusion is not. The conclusion is very important. Dr. Ruhm found up to a 29.1% reduction in infant mortality where paid maternity leave, direct parental care, was given for the first year of a child's life. That first year is very important.

The study does elaborate a bit. When he broke down the 29% of the reduction in infant mortality, Dr. Ruhm found more specifically that there was a 25% decline in post-neonatal deaths. That means the first year. Of the 29%, 25%, almost all of it, had to do with the first year of life. Eleven per cent of the total was for the period from age one to age five.

This is an issue of quality of care and it has to do with a lot of issues. One really important issue is breast feeding. There is a lot of research regarding the importance of breast feeding. In February of this year the president of the Canadian Paediatric Society, on behalf of the society said to Canadians that they wholeheartedly support the international guidelines set by the World Health Organization and UNICEF that breast feeding should be given for one year at least for the optimal health of the children during that first year.

That is not an insignificant amount. They indicated that about 1.5 million children in the world die each year because they are not breast fed. That is an outstanding statistic that members should keep in mind.

There is no question in my mind that it is important that we invest in children and it is not just a matter of throwing money somewhere and hoping something is going to happen. The issue is trying to improve the quality of care given to children during the formative years.

In the Carnegie task force study of 1994 entitled “Starting Points” the research observed that good physical and mental health, the ability to learn, to cope with stress, to relate well with others and to have a positive outlook were all rooted in the earliest experiences of life. They concluded that where, how and with whom children spend their early years of life are the most significant determinants of health.

When we consider the impact on the brain development of a child and the fact that 80% of the lifetime development of a human being's brain is complete by age three and that the issue of abstract reasoning, problem solving and general logic in a child's brain is all wired and established by age one, there is no question based on current research that the first year of life is where we should be investing in our children.

There have also been a number of other studies but I will not go into them because members have them on the record. Many initiatives have been brought forward in this place. There have been bills, such as Bill C-256 in the last parliament, on income splitting between spouses so one could stay at home and care for preschool children.

There was Motion No. M-30 on the caregiver tax credit. It passed in this House in the last parliament. It proposed a caregiver tax credit for those who supplied care in the home to preschool children, the chronically ill, the aged and the disabled. It passed 129 to 63 in this House. I know who the 63 were and they opposed the motion on a technicality, of not supporting anything that involves spending money. The point is that when we had the debate in the House, member after member stood up during the three hours of debate and supported the issue that we have to support caregivers.

Some suggest that maybe this should go through the Income Tax Act. I will give one example of why this should not go through the Income Tax Act. It has to do with farm mothers. Under the Income Tax Act a woman working on the family farm is not considered to be working. Therefore she does not qualify for the child care expense deduction or any other deduction because she has no earned income. To do it through the Income Tax Act would be discriminatory against every farm mother in Canada.

It also does not address lone parent families. If the lone parent cannot work and there is a benefit through the Income Tax Act and there is no earned income, there is no way the lone parent could benefit from anything through the tax act.

The best approach is to go back to something we had earlier. It was called the family allowance. The family allowance was an allowance for parents because they had children.

Child care costs exist for no other reason than the fact that the child exists. Parents who provide direct parental care also have real costs in raising their children.

These are some important points which we should really take into consideration when we consider a motion like this one. This issue transcends partisan politics. Some issues are brought up by private members in good faith. They are not motivated by partisan politics, not motivated by trying to rattle somebody's cage, but motivated because those members are prepared to stand in this House and declare what their interests are and to declare to their constituents that they care about family and children.

Again I want to congratulate the member for Abitibi—Baie-James—Nunavik. The member has done this House a service by raising again that investing in children and the family is the dollar best spent by Canadians. I know that this is an issue which is shared by many people in this House. I hope that as we get more and more opportunities in this place to talk about investing in children and not just about child poverty but the poverty of physical, mental and social health, we will see that directing some sort of a benefit to our children is in fact the best thing for our children.

[Lynn Myers, Liberal, Waterloo—Wellington, ON]

Mr. Speaker, I am pleased to rise in the House today to discuss this very important issue. I have to say at the outset that I have some serious reservations about the hon. member's motion. I ask the question, would it improve the lives of Canadian children more than the current initiatives undertaken by the Government of Canada and our provincial and territorial partners?

It may be helpful at this time to consider the initiatives presently under way to help give our children every opportunity to develop their full potential as Canadian citizens. I am sure that is what the hon. member is hoping to adopt if his motion in fact were to proceed and go forward. I commend him for his initiative.

Some of our hon. colleagues have already outlined the effectiveness of the Canada child tax benefit and other measures that benefit families with children. I would like to talk a little about the national children's agenda. I will begin by briefly outlining the positive history of the development of this agenda.

In January 1997 at a meeting of the Ministerial Council on Social Policy Renewal, federal, provincial and territorial government officials agreed to work together to develop a national children's agenda. This agenda was confirmed as a priority for government in the September 1997 Speech from the Throne. To quote from that speech “Federal, provincial and territorial governments will work together to develop this broader agenda for children, including clear outcome measurements by which to gauge success”.

Further confirmation to the high priority given to the national children's agenda was evident in the publication of “Securing our Future Together” and again at the December 1997 meeting of first ministers. In fact the development of the national children's agenda to date is a superb example of what can be accomplished when we work in partnership.

The national children's agenda has a broad scope. The government and its partners recognize that the full development of our children cuts across many sectors: health, social services, justice, and education to name a few. It involves participation at many levels of authority.

In a February 1997 speech to the Ottawa-Carleton Board of Trade, the Prime Minister said that the national children's agenda will be “an effective, modern, truly national approach to benefits and services for children and for families”.

At the same time, the government and its partners are not about to reinvent the wheel. The national children's agenda will build upon efforts already under way by federal, provincial and territorial governments, community groups, business and voluntary sectors, child care professionals and of course families themselves who have the greatest responsibility for their children's welfare.

One of the major provisions of the national children's agenda is that it will act as a springboard for future and further initiatives. It will be a magnet that will draw partners together to continually enrich the provisions under that agenda.

Some people may ask why a national children's agenda is necessary. There is strong evidence including scientific research which shows that what happens to children when they are very young shapes their health and well-being throughout their lives.

We need the national children's agenda because unfortunately some Canadian children are especially vulnerable in today's rapidly changing world. We know that although children in many families experience a great deal of love, others experience abuse and neglect and suffer from physical and mental health problems. We need then to pay particular attention to family difficulties to ensure that these disadvantaged children have the chance to get a good start in life.

Many people and levels of government are already involved in helping Canada's children grow into healthy and well adjusted adults. There is however widespread recognition that no one individual or organization can meet all the child's needs. That quite frankly is why we need a national children's agenda. We need a truly comprehensive and complementary approach to ensure that there is no wasteful duplication of services and to ensure that no child falls between the cracks. That is very important for all of us as Canadians.

Some of the national children's agenda initiatives have already been announced, such as the national child benefit. The learning readiness indicators are another priority which is being worked on. A lack of readiness to learn can harm a child's chances of fulfilling his or her potential. Data from the national longitudinal survey on children and youth indicates that up to 15% of all Canadian children who begin school may not in fact be ready to learn. Learning readiness indicators also will help us to measure the readiness of our children to learn. That will enable us to assess just how well we are doing at giving our children the very best possible start.

Under the national children's agenda the Government of Canada will also expand the aboriginal head start program to cover First Nations children living on reserves. Begun in 1995, aboriginal head start already helps First Nations, Metis and Inuit children living in urban centres and large northern communities to prepare for school. This initiative responds to the report of the Royal Commission on Aboriginal Peoples which underlined the importance of extending corresponding assistance to First Nations children living on reserves.

The national children's agenda will establish centres of excellence for children's well-being. This also is important to note. The purpose of these centres will be to help us understand and respond to the physical and mental health needs of children and to understand the critical conditions for healthy development.

This represents an overview of the national children's agenda. I would ask the hon. member for Abitibi—Baie-James—Nunavik to support this agenda and other measures mentioned today and to work with the government to implement them before we take on the massive legislative changes necessary to adopt his motion.

I believe we should take one approach and evaluate the results before trying another. I appreciate the intent of the hon. member's motion but I am unable to support it at this time.

[Garry Breitkreuz, Reform, Yorkton—Melville, SK]

Mr. Speaker, it must be abundantly obvious to everyone sitting in this House that we need more time to debate this very important issue.

I am very thankful that I have the opportunity as someone who has helped to develop Reform's family issues policy to be able to address this motion for a very brief time this morning.

I want to immediately let everybody know where I am coming from. Caring for our children is the most worthwhile and important task anyone in this country can perform. I think we all agree on this. I have been listening to the debate and we may not agree on the solution but we do agree that this issue is very important and needs to be talked about in this House.

There is one thing that I have not heard very much talk about and which needs to be discussed. Whenever we talk about developing a program such as this one, we have to first ask what the costs will be. I am talking about money but there are also justice, education, health care and social costs such as welfare that need to be factored in when we develop a program like this one.

I have studied this for quite some time. If, as we have advocated many times, we were to run this through the tax system and recognize child care in that way for those parents who wish to stay at home and take care of their children, the reduced justice costs, education costs, health care costs and social costs would more than pay for any program.

One of the things that disturbs me and actually surprises me is that members who have been talking about this have not told us what the costs would be if we simply paid out a certain sum of money for child care to the parent.

The second point I would like to make is incentive. Every time we have a government program there is going to be an incentive of some kind or another built in and that needs to be analysed. If we were to simply pay out the money through another large government program, what kind of an incentive would that give? Would a small percentage of people abuse it and have children simply for the sake of having children rather than having them because they wish to raise the next generation?

Finally, the devil is in the details. What regulations would accompany this? When the state gets involved and interferes in family affairs, problems will come down the road. We will run into problems unless parents take care of their children as they wish rather than as the state dictates.

In conclusion, the highest quality of child care is given by parents who care for their children because their motive is love. Unless that is happening, we are going to have problems. That is why we need to run this through the Income Tax Act, income splitting and so on.

Because of the importance of this issue, I would like to ask for unanimous consent to make this a votable motion so that we can debate the issue further.

[The Speaker]

At any time members can appeal to the House for unanimous consent. Does the House understand the request made by the member?

[Some hon. members]

Yes.

[The Speaker]

Does the hon. member have permission to put the motion?

[Some hon. members]

Agreed.

[Some hon. members]

No.

[Guy St-Julien, Liberal, Abitibi, QC]

Mr. Speaker, it is interesting to hear members from the other parties here. It is true that I can continue the debate this morning on family, mothers, fathers and, particularly, children. A number of members from all parties in this House have put forth ideas this morning.

It is important for the government to realize that members from all parties are here today to find solutions for families and children.

I said during my speech that we must respect all governments, including the provinces. But the important thing today is the ideas expressed by members. We should take the time at some point to discuss the motion put forward by the hon. member opposite seeking the unanimous consent of the House to continue the debate.

All the members who spoke this morning should table motions relating to their speeches. The issue must come back before the House, on behalf of all stakeholders in Canada, including Beverley Smith and all the groups that work for families, for mothers and fathers. It is important that we find solutions. It is also important that the government listen to families.

[The Speaker]

It being 12.03 p.m., the hour provided for the consideration of Private Members' Business has now expired and this item is dropped from the order paper.

Personal Information Protection And Electronic Documents Act

[John Manley, Liberal, Minister of Industry]

moved that Bill C-54, an act to support and promote electronic commerce by protecting personal information that is collected, used or disclosed in certain circumstances, by providing for the use of electronic means to communicate or record information or transactions and by amending the Canada Evidence Act, the Statutory Instruments Act and the Statute Revision Act, be read the second time and referred to a committee.

Mr. Speaker, I welcome this opportunity to address the House regarding Bill C-54, the personal information protection and electronic documents act.

With the advent of the new information economy, Canadians are finding new ways of connecting to each other, to markets, to governments and, indeed, to the world. All Canadians have a stake in the new knowledge based economy which brings with it changes that profoundly affect all of our lives.

Canada's success in the 21st century depends increasingly on the ability of all Canadians to participate and succeed in the global knowledge based economy. To ensure that participation we must move quickly to provide Canadians with the necessary access, skills and confidence.

Bill C-54, the personal information protection and electronic documents act, is a significant step toward achieving these goals. In very significant and practical ways it will help build the confidence of Canadians in a field that will be key to Canada's prosperity in the 21st century.

The bill addresses three issues to help Canadians fully exploit the true potential of the Internet as a medium of information and commerce. The proposed legislation would protect the personal information of Canadians in their dealings with private sector organizations. It would create an electronic alternative for doing business with the federal government. It would provide a legal footing for electronic records and secure electronic signatures.

The bill demonstrates leadership in building the information society. It will make it both easier and more secure for citizens to deal with the government electronically, when they choose to do so.

Already, the federal government has pioneered the use of the Internet as a means to improve service to Canadians, increase efficiency and lower costs. Many of the federal government's transactions with the public—from filing for patent protection to the provision of information on any number of subjects—can now take place electronically.

Much more can be done if we update federal statutes and regulations to capture the opportunities presented by the Internet. Many existing statutes and regulations often specify that information must be given “in writting,” or “signed.” Such references can be interpreted as restricting transactions to paper only, and as precluding the electronic provision of information.

In fact, the Department of Justice has found that more than 300 federal statutes contain references that appear to limit electronic service delivery.

Bill C-54 allows us to make existing statutes and regulations compatible with an electronic environment. It will enable us to provide an electronic alternative to the transmission of information on paper.

With regard to the operations of the federal government it addresses very real needs in three specific fields.

Bill C-54 gives federal departments, agencies and boards the authority to decide how requirements in existing statutes and regulations can be satisfied by electronic means in place of paper. Since the integrity and reliability of electronic transmissions must be ensured, provisions to foster the practical development and implementation of secure electronic signatures are a key component of the bill. A federal department, agency or board must be technologically and operationally ready before it offers its services to the public via electronic media. The time required to attain readiness will undoubtedly vary.

Accordingly, each federal body will be given flexibility and have the discretion to apply the new law and do business electronically when it is fully up to speed and has both the technological and operational capabilities necessary to do so.

Electronic technology is affecting evidence presented to Canadian courts in ever increasing ways. Bill C-54 will clarify how the courts assess electronic documents and recognize electronic signatures, give recognition to notices and acts published electronically by the Queen's Printer and give official status to the electronic version of the consolidated statutes and regulations of Canada.

I would like to stress that the creation of an electronic alternative does not mean the federal government is doing away with the more traditional methods that it uses to communicate with Canadians. People will not have to throw out their pens and paper and typewriters or be forced to communicate exclusively over the Internet. Rather, we are enabling the federal government to accommodate a way to do business that is more and more popular with Canadians through electronic means. Canadians increasingly have demonstrated that they want to do business electronically, not just with their governments but with the private sector as well.

Electronic commerce conducted over the Internet is currently estimated at about $45 billion Canadian. However, exponential growth is forecast, with e-comm revenues expected to reach $600 billion Canadian by year 2002. This is a reflection of the skyrocketing growth of the Internet. The Canadian Federation of Independent Business has found that the number of small businesses with Internet access doubled in just one year between 1995 and 1996.

Building of an environment where electronic commerce can flourish is a key component of the government's commitment to ensure that Canadians can take advantage of the opportunities offered by today's connected and global economy. We want to establish Canada as the world leader in electronic commerce by the year 2000.

For electronic commerce to flourish in Canada, the first requisite is clear: a predictable and supportive environment wherein citizens, businesses and institutions can feel comfortable, secure and confident. All of us, consumer, business and government alike, need to feel confident about how our personal information is gathered, stored and used. The protection of our personal privacy is a basic right which Canadians cherish.

To safeguard privacy, however, there is a significant challenge to be met. In the electronic age, every time we make a transaction we leave a “data trail,” traces that can be compiled and assembled to provide a detailed record of our own personal histories and preferences.

There is a risk that these records may be sent across provincial and national borders, or sold, reused or integrated with other databases without our knowledge or consent.

Consider just some of the ways in which Canadians already can and do use the Internet. We already use it to shop and to plan vacations from our homes. We use it to do banking from home. We use it to correspond with family and friends wherever they may be in the world. We use it to read on-line magazines and to participate in discussion groups. All of these uses can unavoidably reveal traces of personal information.

As consumers and citizens we need to know that we have some control over our information and be assured that it enjoys a basic level of protection. Bill C-54 will provide this protection. It addresses the need to safeguard personal data by establishing a right to the protection of personal information. It sets clear rules for how that information will be collected and used and disclosed in the course of commercial activities.

In January 1998 the departments of industry and justice released a public discussion paper entitled “The Protection of Personal Information—Building Canada's Information Economy and Society”. This paper outlined the various issues which must be addressed in the development of legislation to protect personal information and it sought input from Canadians.

Canadians consistently expressed concerns about their privacy in light of the new technologies, particularly with regard to the control of personal information. Canadians have told us that they want legislation that is light, flexible and effective and that provides meaningful recourse for consumers. They support building on existing instruments, especially the national standard for the protection of personal information of the Canadian Standards Association, and they told us that they wanted independent oversight, someone to investigate complaints and ensure compliance.

In the development of the legislation before us the CSA standard was a particularly relevant avenue to explore.

It is a set of ten fair information principles. They address the ways in which organizations should collect, use, disclose and protect personal information. They also concern such things as accuracy and security safeguards; the need for an individual's knowledge and consent regarding information collection; and measures to provide organizational accountability.

The CSA standard was developed in the early 1990s, through a broad consultative process that included representatives from the public sector, business, consumer advocacy groups, labour and others.

The legislation before us will require organizations to comply with all 10 fair information principles of the CSA standard for the protection of personal information. Furthermore, compliance with the legislation will be overseen by the privacy commissioner of Canada. The privacy commissioner's role will include receiving and investigating complaints and mediating disputes. Unresolved disputes can be taken to the Federal Court of Canada for final resolution.

At the present time in Canada the protection of personal information in the private sector can, by and large, best be described as sporadic and uneven. Many industries are not subject to any rules at all concerning the collection, use and disclosure of personal information. The rest are covered by what the privacy commissioner of Canada has called a patchwork of laws, regulations and codes. The result is that protection is incomplete and, quite possibly, inconsistent. This situation is no longer acceptable.

In our consultations regarding privacy, Canadians told us over and over again that they were very concerned about having consistent protection across Canada for their personal information.

Canadian business raised similar concerns about consistency and the need for a single set of rules to ensure a level playing field.

To address these concerns the legislation will apply first to the federally regulated private sector. Three years after coming into force it will apply more broadly, covering virtually the entire private sector, except where a province or territory has passed similar legislation. Where and whenever organizations are subject to such provincial or territorial law they would be exempted from the application of the federal law by order of the governor in council.

Bill C-54 also has the great advantage that it builds upon the existing CSA voluntary measures. It is designed provide a regime that is simple, yet effective, consumer friendly, not overly burdensome for industry, especially small and medium sized enterprises, cost-efficient and with a minimal administrative burden, and, in conformity with Canada's international agreements and trade obligations.

Canada needs new legislation to protect privacy. Legislation must strike a balance between the right of individuals to have some control over their personal information and to have access to avenues for effective redress, and the need of industry to collect and use personal information as a vital component of success in the information economy.

The legislation before us strikes that balance. It addresses both the business need to gather, store and use personal information and the consumer need to control the collection of information, to be informed about how that information will be used and to be assured that the information will be protected.

Bill C-54 will help build the consumer trust and market certainty needed to ensure that Canada is a world leader in electronic commerce and the global information economy.

Information privacy is crucial for a number of reasons. First and most basically, it is related to a series of other rights and values, such as liberty, freedom of expression and freedom of association. Without some control over our personal information our ability to enjoy these fundamental rights may be hindered.

Moreover, in the new information economy information is a valuable commodity that can bring jobs, prosperity and higher levels of customer service. This reality, along with other key factors, is creating mounting pressure to collect and use personal information more broadly than ever before.

Canadian citizens are right when they ask for adequate privacy protection in the new digital economy. The legislation before us will help to provide that protection. It addresses both present and future challenges, and I am confident that it will receive justly deserved support from the House of Commons.

[Werner Schmidt, Reform, Kelowna, BC]

Mr. Speaker, I rise to discuss Bill C-54, which I believe goes in the right direction. Some very good points have been made in the bill. The minister's statements of a moment ago illustrate the significance of electronic commerce in Canada and virtually the entire world. We need to recognize and accept that, and I think we all do.

The problem I see with this bill has to do with what is really being done here. It is not as if electronic commerce developed yesterday. It has been with us for quite some time. It has existed for at least 13 years in terms of doing business, in terms of consumer shopping, and we have had ATMs for a number of years. It is almost as if suddenly something has happened, that it is recent and has happened just now, but it has not happened just now.

We need to recognize that this is really a catch-up system, and for that I want to commend the government. This bill will make it possible to use some of the modern technology, to do some of the filing that needs to be done electronically and to get information and things of that sort.

Perhaps there are some people who wonder: What is this electronic commerce anyway? What are we really talking about?

We are talking about the business of making transactions via telecommunications systems using computer technologies. It is almost as if computer technologies and telecommunications are separate. I do not think one could exist without the other. The telecommunications industry depends upon computers and computers depend upon the telecommunications industry. The two are very much involved.

How big is electronic commerce? It is big. The minister just indicated to us some of the dimensions of the electronic commerce industry and we know they are true. It looks like there will be not only a tenfold increase, but a manifold increase. Nobody knows exactly how fast this electronic commerce area is going to grow.

Why is this an issue today?

First of all, we have many laws in Canada covering paper transactions and paper commerce. Paper transactions are founded on the notion and the awareness of boundaries: provincial, federal and international. Laws and taxes are applied within these boundaries and there are agreements as to which law or tax has precedence in cross-boundary transactions.

However, traditional boundaries do not exist on the Internet. Therefore, legal rules and consumer protocols become unclear, especially when the consumer is not even aware that they have crossed a traditional border in making a transaction.

Which law or tax then applies? Can the same law be applied to the electronic world as is applied to the paper world? This is a fundamental question because it raises the kinds of principles which ought to govern legislation with regard to electronic commerce.

This bill is not complete and I think the minister would agree that it is not complete. It is be a good beginning, but it is only a beginning.

We have to be very careful that in this beginning we do not chart a course that ends up with errors of some kind. We have to be very careful that we choose the right course at the beginning.

We use electronic commerce to transfer funds in banking, to pay our bills and to access automatic teller machines. We use it in the operation and in the guidance of trucks, ships, planes; vehicles which are in the air, on land and at sea.

The global positioning system, for example, is strictly an electronic mechanism. Satellites such as RADARSAT make a very significant contribution to electronic commerce. What does it do? It provides information, for example, about what is happening to the ice caps. It also inventories and gives information almost immediately about the moisture conditions in various parts of the world.

What are some of the issues involved? The minister said that one of the big issues is privacy. Yes, privacy is a major issue, but I would like to raise another issue before I speak about privacy, and that is the integrity of the information.

Integrity means that we can have trust and confidence in the information that is made available to us by electronic means. For example, can we be assured that what we think is happening is actually happening? Is the money being transferred from my bank account to somebody else's bank account as it ought to be? Is my account being credited or debited as it ought to be? Will the person receive exactly what it is they thought they were buying via the Internet or the telephone?

Verifying signatures is a very significant issue as well.

The public information cryptography issue is involved. The business of recognizing the public key infrastructure on cryptography is something that this bill wants to control. We need to ask ourselves the question: To what degree can or ought the government be able to control the various encryption methods and systems?

Earlier this year there was a discussion regarding the type of policy the government should pursue with regard to encryption. There was a lot of resistance to this particular issue. A policy statement was finally drafted. I believe there are some good aspects to this particular policy. However, I would like to ask whether the provisions in the legislation before us are consistent with the provisions of the policy on encryption.

For example, one of the elements in this encryption policy states that Canadians are free to develop, import and use whatever cryptography products they wish.

The government will not implement mandatory key recovery requirements or licensing regimes. The government encourages industry to establish responsible practices, such as key recovery techniques for stored data. The government will act as a model user of cryptography through practices of the Government of Canada public key infrastructure program.

The policy indicates that Canada will take into consideration the export practices of other countries and the availability of comparable products when rendering export permit decisions. The export permit application process will be made more transparent and procedures will be streamlined to ensure the least regulatory intervention necessary.

If the issue is to ensure that the integrity of information from one business to another business is indeed safe, secure and private, that is one thing. However, if the issue is government intervention and the ability to intervene, to read, to uncover and to break through the encryption that is used by businesses to do their business, then all privacy will be destroyed.

I think the policy suggests that the government will not do that. However, the issue is that it is not protected in this particular legislation. This legislation does not say that the government may not or the government shall not get into the encryption systems that various industries may use in doing their business.

I would like to deal with encryption a bit further. Someone may ask: What is encryption? It is actually a code. Someone who does not know the code cannot uncover the message. We must ensure that a message which is designed to reach a particular destination only reaches that destination.

We know that the Internet is accessible by many. That message, once it is put on the Internet, can be retrieved by virtually anyone unless it is encrypted. The person who receives the message must either decipher what the encryption is or have the key that gets them into the message immediately. There are many people who are pretty sharp at discovering encryption systems.

We need to accept that the new laser technology and the application of the laser technology is one that we need to look at carefully. There are experts in this field who say that if one human being has created a code another human being can decrypt that code. Dr. Paul Corkum of the National Research Council makes the statement that unbreakable codes for secure information transfer can be based on the basic structure of light.

When we enter the field of laser technology we are dealing with a complicated issue. Nevertheless, Dr. Corkum makes the unequivocal statement that unbreakable codes for secure information transfer can be based on the basic structure of light.

Nowhere in this legislation is there reference to unbreakable codes or the use of encryption codes being limited to business, government or anything of the kind.

If we are to have privacy we must be absolutely sure that if someone wishes to encrypt a message the message can be encrypted to the degree that no one else can understand it except those for whom the message was destined in the first place.

We need to recognize not only the need for privacy but another area in the legislation which has to do with privacy. It has nothing to do with encryption but it has something to do with the provision of privacy of information. I refer to the beginning of the bill. In division 1, which is headed “Protection of personal information”, subclause 5(2) says:

The word “should” when used in Schedule 1, indicates a recommendations and does not impose an obligation.

“Should” is a guidance and not an obligation. Let us go to schedule 1 and have a look at what is there. In section 4.2.3 it states:

identified purposes should be specified at or before the time of collection to the individual from whom the personal information is collected—

The purpose should be stated. It continues:

Depending upon the way in which the information is collected, this is can be done orally or in writing. An application form, for example, may give notice of the purposes.

This is a possibility. It should be there, but it is not a requirement that it be there. However, the next section, which is section 4.2.4, states:

When personal information that has been collected is to be used for a purpose not previously identified, the new purpose shall be identified prior to use.

Is that not an interesting contradiction or at least an implication of confusion? In the first instance it is not obligatory that the purpose be stated, but if it is stated and it is changed then there is a requirement that the individual be notified. If we wanted to protect ourselves and wanted to be flexible, we would simply never state the purpose. Then we could do whatever we wanted because section 4.2.4 would not apply.

There are some interesting questions about what is being done and being proposed in the legislation. As the committee deals with it, I hope it will be in some detail and that some of the weaknesses will perhaps be rectified.

We need to look as well at the conflict of interest issue. In the bill there is no statement about the use of private information in a conflict of interest situation. I refer particularly to the application forms currently in vogue and used by certain banking institutions in Canada.

Until very recently an application form to do business, for example with the security branch of a bank, contained the name. Underneath there was very tiny print stating: I hereby allow or give permission to this bank to use the information given for trading securities to be used in other parts of its operation.

We know that banks today own trust companies and insurance companies. Some of them are health insurance companies and life insurance companies. They have investment dealers and clearly they have the banking institution. Is it not interesting that a bank which collects information to trade securities may use it in other parts of its operation?

Let us suppose one has a loan in the particular bank and an insurance problem. Is it not interesting that individuals may suffer ill health which as a consequence, at least in the mind of the bank, places in jeopardy their ability to repay the loan?

Information was collected for the purpose of doing trading only in a particular bank. Yet the bank is now able, through its insurance branch, to transfer the information. That insurance branch may and will, if it owns an insurance company, have transactions with other insurance companies and may trade information. The potential for a conflict of interest is very real.

It is interesting that although one has given voluntary permission to the bank to use this information and suddenly withdraws that permission, the bank reserves the right, in very tiny print, to close one's account with 30 days notice.

There are some very interesting issues. Compliance is granted by giving permission, but it is used in a way that was never intended, or the customer never believed it would be used in such a way. The action is unilateral on the part of the financial institution to close the account if the individual suddenly chooses to withdraw access to the information for a purpose other than the one for which it was intended originally.

I now wish to move to the interdependence between electronic commerce and traditional or other commerce. Electronic commerce cannot exist without a traditional infrastructure for moving things and people. For example, a service may be ordered through the Internet but the product or service must be delivered. A contract must ultimately be signed and become operational. Funds must actually be moved from one state to the other.

It is not just the ability of being able to do electronic commerce. There is an interdependence between electronic commerce and regular or traditional kinds of commerce. This requires an infrastructure that is ready and able to meet the requirements, one of which is speed.

Time delivery is all very well if it is in a beautiful computer and it has to be deliver, for example, on September 30 of a particular year at one o'clock. However, if the truck does not get there it does not help. There is no relationship. If the relationship is not there and it is not working, there are backlogs and queues and things break down.

We need to recognize that there needs to be a back-up for intercommunication. We need to trace the trail. If something goes wrong we need to know where it went wrong, why it went wrong, who is responsible and how can it be fixed. It involves all kinds of aspects. It involves many people and things. We need to know where are the airplanes, the satellites and the rockets on land. Will it be done by foot, by truck, by rail or by any other method? The situation on the sea is similar.

It is not just the business of controlling electronic commerce. It is also the matter of developing adequate human resources. The number one requirement in the whole business of electronic commerce is the ability of personnel. Ultimately people will make the system go. They need the ability to use electronic commerce information.

They must know how it works. They must understand how it works. Then they must expect to be able to apply it. There must also be confidence and faith in the integrity of the information. All else depends on it. Because it is so fast and because it allows transborder transactions very easily, errors are multiplied and magnified if they occur.

There also must be integration. We need to recognize the interconnection of nations, the interconnection of industries and the interconnection of people. There will be a tremendous requirement in the ability of management to integrate what appears to be separate and disparate parts into a corresponding and working whole.

It really does something to me when I hear our Prime Minister answer the question about how far the dollar has to sink before we become alarmed. The minister has often talked about the issue. The Prime Minister, the senior minister in the country, is the one who should know. He is the one who is asked this question because it is fundamental to our economy, to electronic commerce and to any other commerce. He answers that the problem is market decisions. He answers that either it is floating currency or monetary policy under Canadian law like in most of the countries managed by the Bank of Canada. According to him it is the way the system operates. It is never the Prime Minister; it is the Governor of the Bank of Canada who makes these daily decisions.

The Canadian economy is functioning very well. We reduced the deficit from $42 billion to a surplus that was billions of dollars for the first three months. In spite of strikes at GM, in construction and in the paper industry in Quebec, unemployment did not go up. It remained at 8.4%. We have around 1% inflation.

A few weeks ago there was a report for the first time in a long time that activity in Canada had been higher than in the United States. It is a very positive sign. The monetary policy of the Canadian government is made by the governor of the bank under the Bank of Canada Act.

We need to do better. What can we as parliamentarians learn from the complications of electronic commerce and from the need to protect the privacy of individuals and to do business successfully and well? We need to learn about a couple of issues. We need to recognize that our ability to do things has been magnified manifold. That means the responsibility of doing it right is greater than it has ever been. We also need to recognize that one error can cause many other errors and have a far broader impact than was the case before.

Above all we need to recognize the need for integrity and leadership in the country. We need to know more. The bill is not sufficient. It is a good beginning but is not a leadership document. If anything it is a document that catches up to where industry has been for the last 10 years. We need leadership. We need to understand the significance of what we are doing. We need to be confident. We need to have an attitude of co-operation, humility and self-control. We need to recognize, as never before, the absolute necessity and the centrality of integrity, truth and honesty in whatever we do.

It is not good enough for the Prime Minister to try to explain the value of the Canadian dollar and its fluctuations the way he does. It is not good enough for the Minister of Finance to say we have a surplus while recognizing full well that the surplus is built on sand. In fact it is not even good sand. It is shifting sand because it is built on the revenues collected for the EI program rather than on the management of the finances of the country.

We need to tell the truth. The Prime Minister, the Minister of Finance and the rest of the ministers need to tell the story the way it really is. If they do not it will not be long, particularly with the transfers across borders, with e-commerce and any other mechanisms available to us, that the truth will be known. Where is the confidence going to come from when in fact we recognize that the Minister of Finance has not told us the truth?

Where is the confidence when we recognize that we do not have a balanced budget, that it is a concoction of numbers which makes it look as if it is balanced but is not really balanced? This is dangerous. If there ever was a time for us to learn from a bill, it is this one which is at the cutting edge. It does not provide leadership but it is at the cutting edge, and for that I commend the minister.

We need to recognize, however, that within this lies the seed of our undoing if we do not recognize the need for integrity of information, integrity of communication of the people of Canada and integrity within the civil service of Canada so that the ministerial position, the government's position and the position of the bureaucrats are identical, and that government can be there with integrity so that we can depend on what it tells the people and base our future direction on that. That is what we need to learn from legislation like this.

[Francine Lalonde, Bloc, Mercier, QC]

Madam Speaker, for very many years now—as I am going to document—Canada has been waiting for legislation on the protection of personal information, privacy legislation relating to the private sector. The bill we have before us this morning is titled as follows:

An Act to support and promote electronic commerce by protecting personal information that is collected, used or disclosed in certain circumstances, by providing for the use of electronic means to communicate or record information or transactions and by amending the Canada Evidence Act, the Statutory Instruments Act and the Statute Revision Act

The problem with this bill is that it is not a bill addressing the protection of privacy. My colleague has just referred to the need for leadership, and the Minister of Industry has spoken of his desire to take a lead role by introducing this bill in the House of Commons.

Where he was expected to show leadership was not only in protecting consumers involved in electronic commerce—and even here we need to look at how much protection they have, because it is far from sufficient—but also in protecting privacy.

Privacy is a fundamental right. In 1983, Canada enacted privacy legislation relating to government bodies coming under federal jurisdiction. The Charter contains certain provisions, but the minister himself has acknowledged that this protection is sporadic and uneven, and no longer acceptable. This situation is no longer acceptable.

The leadership in privacy protection came from Quebec. Since 1984 Quebec has had legislation, effective legislation, to protect personal information in the private sector. That legislation has proven itself. We would have expected to see it used as a model, because it is the only legislation based on experience and know-how. It has not had the catastrophic results some were predicting in the private sector.

Now more than ever, when private information can be collected and collated without an individual's knowledge, transmitted, sold, used for all sorts of reasons, with impunity, or just about, except in Quebec, what we would have expected from the minister was a bill with some teeth.

That is what we are going to ask him for. And we are going to take this opportunity not just to talk about the importance of the right to privacy, but also to get some information across. Because, all too often, members of the public, who are not just consumers of commercial services, but people living in the real world, faced with a plethora of intermediaries collecting potentially erroneous information and selling it or using it for their own or other purposes, deserve much more.

Members will tell me that, if Quebec's legislation is so effective, it can go on being effective, and Quebeckers should decry the fact that Canadians cannot count on a better law. But it is much more complicated than that, because not only does this bill fail to provide sufficient protection for the public's privacy but, as it now stands, it undermines—yes, undermines—the protection Quebeckers enjoy under Quebec's legislation. And that is even more unacceptable.

I will give clear and documented examples. Right now, under Quebec's legislation, an Eaton's employee in Montreal has access to his personal file held by his employer, even if this personal information is kept in Toronto. With Bill C-54, this request for access becomes part of a interprovincial access request. Thus, since it is not part of a commercial transaction, according to the interpretation in the bill as it now stands, and given the recourses available, that employee will no longer be entitled to access.

Let us consider another example: at the present time, if a person undergoes a medical examination for insurance purposes, the results of that medical are recorded by an American organization with a branch in Toronto. At this time, the client has the right to access his records. Since this will no longer be part of a commercial transaction, there is a good chance that right will not continue. This is not taking into consideration the type of recourse that is in the federal legislation. I will come back to this point a little later.

We have read the minister's press releases which intimated that the Quebec legislation would apply in its entirety. Yet this is not at all what we see in the bill, in a number of aspects. Clause 27 gives all of the power to the governor in council, or to put it more simply, to the government, for deciding whether or not a provincial act will apply in whole or in part. I think it is worthwhile reading this clause, although it is couched in the curious language used in bills.

It states:

27(1) The Governor in Council may make regulations—

(d) if satisfied that legislation of a province that is substantially similar to this Part applies to an organization, a class of organizations, an activity or a class of activities, exempt the organization, activity of class from the application of this Part in respect of the collection, use or disclosure of personal information that occurs within that province.

It is all very well for the law in Quebec to be the law in Quebec, the governor in council can decide what part of the law applies or does not apply within the province involved.

This provision is shocking. I could say we are used to this, but it is more than that. This is serious. In the very area the minister wants to open up, electronic commerce, there are a number of players, including a major one, our neighbour, the United States. We know that, in the United States, and this is one of the problems we will talk about, the government wants to let business regulate itself.

Then there is the European Union. Canada wants to establish a free trade zone with it. A meeting to this end is being held here right now. The European Union has already established guidelines that are very much along the same lines as the law in Quebec, in fact so much so that it had planned not to authorize any business links except with Quebec, because the other provinces and the United States could not properly guarantee the protection of the personal information of the people of the European Union. This issue of effectively and efficiently guaranteeing personal information is more than a Quebec-Canada dispute. It is far more than that.

I must underscore, and perhaps members will think excessively so, the fact that Quebec was really at the forefront in formulating clear, readily implemented and effective legislation—unlike the federal one—which meets the criteria of the European Union.

Had the minister wanted to demonstrate the leadership he is claiming, he should have adopted these principles, not because they are our principles or because Quebec is involved, but because this is the sort of protection the people of Quebec and of Canada are entitled to expect. Instead, Quebeckers' rights are being infringed. And Canadians do not have enough protection, not in the least.

A number of the provisions in this bill fall short, but one involves the reduction of Quebec's rights and that is the one concerning all the provincial provisions. Under Quebec law at the moment, as I was saying earlier, an individual working in Quebec can access his record, wherever it is, or a person having a medical examination can see his records, wherever they are.

From now on, it will no longer be the case, since all the provisions that go beyond provincial jurisdiction will be subject to federal legislation. One might wonder whether federal legislation will provide the same protection. The answer is no. When it comes to information that is not of a commercial nature, the act is vague, to say the very least.

The core of Bill C-54 is a standard, a CSA national standard that bears a number and that was approved in a totally different legislative context by the standards board, in consultation with the telemarketing board and another body whose name I forget, as well as with consumer representatives.

While this self-regulating project is commendable, particularly since it originated with the private sector, it is also full of conditions. There are a number of very important provisions for people on the information needed to create their files, and on the use of these files, that are full of conditional “may”.

The act provides that these conditions may be overlooked. The problem is that all this is extremely confusing. What can a person do when he or she is refused access to his or her file?

Under the federal act, the person may file a complaint with the privacy commissioner, who then conducts an investigation. Fine. We hope he will have the proper means to do so. The commissioner may attempt to resolve the complaint through mediation. Fine. If a solution can be found, great. But what happens if no solution is found? This is what people want to know.

What happens is that the person must go to court. The commissioner can take it upon himself to go to court, but this is not automatic. The person, even assuming he or she has the means to do so, cannot do it. He or she cannot directly take his or her complaint to a court at the beginning, because he or she must wait for the commissioner's report.

There is question of means involved. There is a delay, because the person must wait for the commissioner's report. First of all, there is a degree of confusion in the drafting of the legislation, a lack of clarity that surprised even the experts from what they told me.

This means that, instead of the legislation the minister promised, one that would be user friendly—he described it as simple yet effective—where users may not always be commercial services consumers but are citizens, the legislation before us is not simple to use and, on the face of it, certainly not effective, except when good will is involved and mediation may suffice.

We agree it will work that way some of the time, but legislation is required when the government has to say where it stands, on whose side it is, the unco-operative business or the citizen; the government does not side with citizens unless the commissioner himself decides to go to court. Do members have any idea what this means?

This bill will disappoint a great many people. I for one might say I understand the minister may be feeling stuck between the United States on the one side and the European Union on the other, but his primary duty as minister is to reassure the people of Canada and Quebec that the current level of protection will be maintained.

It is not the role of Canada to undermine the protection they are currently afforded. It is not to reduce the level of protection but to increase it because, as a country, together with other countries—and I have never found it so sad that Quebec was not one—it could push to have all countries adopt compatible rules, to reassure the public. But the public will not be fooled and no one will believe that a meaningless piece of legislation will provide consumers across Canada and Quebec with greater protection against American companies. There is a real problem.

An OECD conference was held in Ottawa on the initiative of the Minister of Industry, and I congratulate him on this. One thing came out very clearly at this conference, however. Right now, 80% of e-commerce is U.S based, 80% of it in business.

When it comes to the defence of consumers and the public, governments should sit up and take note. Many have said so. I was pleased to hear that the Canadian Federation of Independent Business does not want it forgotten that consumers are not just individuals, members of the public, but also small and medium sized businesses, which do not have the wherewithal of big business, and which are also in a David and Goliath situation, much worse in fact, as things now stand.

This bill is extremely disappointing. It fails to give citizens the protection they are looking for. The Internet is not just a place were business is transacted, and cannot be divorced from civil society.

Telemarketing was debated in this House. We saw that the government wanted to clamp down on businesses engaging in deceptive telemarketing, by requiring them to state very clearly over the telephone who they were and the purpose of their call. We wanted to amend this to apply to the Internet as well, and now we are looking at a bill on e-commerce. This provision remains completely vague in the bill. But members of the public wishing to use this medium—which is just a medium, and not another way of life, as the OECD recognized—will increase their use of it only if they are truly protected.

The first step is protection that is not just partial, not just aimed at e-commerce, but real protection of privacy. Then we can consider it further, but first there will have to be international agreements.

Yes, we are waiting for Canada, the country we are depending on, to show some leadership, but not without first reassuring the public.

Successive Liberal governments have repeatedly promised real legislation, legislation that would protect privacy. In 1982, the then communications minister, Francis Fox, said that the next step with respect to privacy legislation would be to extend the principles governing the protection of privacy to the federally regulated private sector.

In March 1987, the Standing Committee on Justice and the Solicitor General endorsed this recommendation in its report entitled “Open and Shut: Enhancing the Right to Know and the Right to Privacy; a Review of the Access to Information Act and the Privacy Act”. Quebec embarked on a similar process which resulted in 1994 in the passing of its current legislation.

In his 1996-97 annual report, the privacy commissionner saluted as a fundamental and highly significant event the undertaking by then justice minister Allan Rock to enact before the year 2000 a bill protecting privacy in the private sector in a real and effective fashion. What happened next?

In 1996, the industry minister himself promised an umbrella bill on the protection of privacy in response to the Information Highway Advisory Council's report. I stress that the member for Kamouraska—Rivière-du-Loup—Témiscouata—Les Basques moved a motion which was unanimously approved providing that all crown corporations be subject to the Privacy Act, but not all of them are.

In April 1997, the Standing Committee on Human Rights adopted a report entitled “Privacy: Where Do We Draw the Line?” recommending that the current act be replaced by one applying only to parliament and to all government agencies as well as to private sector entities under federal jurisdiction.

Today the minister is tabling a bill to promote electronic commerce by protecting personal information. I will not read the full title again. This is sad and woefully inadequate. This bill will not meet the desired goals and will actually weaken the current rights of Quebeckers while recognizing the efforts by the private industry in its own code, which contains many conditions.

We have to demand that the federal government give proper protection, not one that is so limited, so minimal, and in many cases inexistent, because of the nature of the procedure, of the conditions and of the confusion and also because of the power of the governor in council, who can even change the content of the legislation to adjust to the changing standards of private business.

We cannot let this bill go unnoticed. We cannot be content with saying that we would like to see many more provisions included in this bill. This was to be such an important piece of legislation, but, should it pass without amendments, it will create more problems than it will solve in the long run.

The Bloc Quebecois and all governments in Quebec, of whatever political stripe, have always very strongly supported the principle of respect for privacy and personal information. The Parti Quebecois and the Liberal Party did so again, recently, in a review of the legislation. We are deeply committed to this principle, and that is why we cannot agree with this bill to promote electronic commerce, because it does not meet its stated goals, and does not protect the needs of citizens and consumers.

[Nelson Riis, NDP, Kamloops, BC]

Madam Speaker, I am happy to rise today to join in the debate of Bill C-54, the personal information protection and electronic documents act.

Today's debate may be the beginning of perhaps one of the most important debates in the House for many months as we begin the discussion of virtually a new form of commerce, a form that is already beginning but a form of commerce with dimensions that are somewhat awesome, the whole issue of electronic commerce.

I will refer to what could be exploding as a new way of doing business. At the recent OECD conference in Ottawa it was suggested that electronic commerce transactions totalled about $4 billion in 1997. Within another three years from now that could accelerate to nearly $400 billion. In Canada it could reach as high as $13 billion within that short period.

We are talking about a totally new way of doing business, a complete transformation of commerce not only within Canada but all the other nations with which we do business. On a business level there are tremendous implications and on a personal level tremendous implications, and of course that is what the debate is all about. We are going to hear the term e-commerce, electronic commerce, a great deal in the next few weeks and months.

Recently the House has heard much discussion of the transfer of vitally important information. Rather than discussing the dangerous transfer of cabinet secrets in public places such as airplanes or gymnasiums, today we are gathered to discuss a transfer of a different type of information, the electronic variety. The bill before us aims to support and promote electronic commerce by increasing Canadians' confidence in online transactions, providing protection for personal information that is collected, adjusting the legal framework of the electronic environment and providing an alternative means for the federal government of providing valuable government services.

It is fair to say that Bill C-54 is part of a much larger overall strategy to make Canada an international leader in the growing realm of electronic commerce. The debate today is timely because if there is one role that Canada can play it is to widen the debate on future electronic commerce within our borders and beyond. At this point it would appear that Canada is playing a leadership role.

I want to talk about some of the contents of the bill and outline some of the reservations my colleagues in the New Democratic Party and I have with the bill. I begin by discussing the phenomenon of electronic commerce in the information age. A variety of commentators from all sorts of disciplines have commented on the increasingly important role electronic commerce is playing in the lives of everyday citizens.

Recently the chairman and CEO of Bell Canada, Mr. Jean Monty, told delegates at the Ottawa OECD conference: “What we are witnessing today is the birth of a new economy, a new economic order that is based on networks and chips”. This electronic transfer of information has changed the way humans interact with each other and for this reason it is the subject of great importance and we would be wise to consider very carefully any decisions we take. That is why I say the bill is really the first piece of direct legislation that says something about this whole new issue of electronic commerce.

First, it may be helpful to discuss the very definition of electronic commerce itself. If we are to adapt a broad understanding of the concept of e-commerce we will see that it includes two very different types of transactions. One type, which has proven quite successful in this country, involves the exchange of information through closed networks. This would include such systems as those used for debit cards and credit cards. As I say, Canada is recognized as a world leader in developing the infrastructure for these kinds of closed networks.

Other types of transfers are those conducted through open networks such as the Internet. This type lags far behind its closed network counterpart for numerous reasons which I will examine in a moment.

Perhaps it would be useful to outline very briefly what e-commerce is and how it works. In the friction free ideal of electronic commerce, a typical catalogue order for example would happen like this. A consumer would fill in an order form on a computer and file it through the Internet directly to their retailer's computer system. The system would immediately process the information to create a shipping weigh bill, a packing list and would be electronically charged to one's credit card. A likely low paid warehouse employee might then prepare the shipment and deliver it to the loading dock, but other than that the human element is removed.

In other words, a job that perhaps would involve four, five or six people would now be handled by a single person and likely one who would be relatively low paid, removing any need for data processors, bookkeepers, shipping clerks and others. These types of jobs would become automatically redundant.

When one starts to think about the online world a certain minister comes to mind. Just as the solicitor general has had some difficulty lately maintaining the security of his department's private information, so does the Internet in ensuring the confidentiality of important matters.

Canadians have demonstrated a lack of faith in the minister as a result. This is similar to the reservations Canadians also have about entrusting their own personal information in cyberspace. It is our job as legislators to address these concerns adequately.

The Internet remains mainly an intimidating world for most Canadians in which trade relations are purely developed and people cannot be certain of the ways in which confidential information is being handled. Business as well as consumers are often unsure exactly with whom they are dealing, whether payment measures are secure and just what the legal frameworks are for these types of transactions.

The Internet for most Canadians remains as a sort of computer wild west where law and order at the moment is relatively poorly represented and in some cases not represented at all and one enters at one's own risk. Many parents are reluctant to establish these Internet accesses because of well founded fears that the online environment has become a haven for those who traffic in such horrible issues as child pornography.

Business as well as consumers have been clamouring to build confidence in terms of building measures with this electronic commerce for some time. I think it is fair to say that Canadians do not want cyberspace to be lawless. Proof of this can be found in the recent controversy surrounding Mr. Zundel's events in British Columbia.

One part of the bill which attempts to tackle people's reservations about trade on the information highway is the section on privacy rights. The bill adopts a set of guidelines developed by the Canadian Standards Association for using, gathering and disclosing the personal information of Canadians.

At the present time the federal Privacy Act deals strictly with information that is collected by the public service. Bill C-54 goes further than this. After a period of three years the guidelines for the handling of personal information will apply to all commercial transactions. For example, the bill would force companies to obtain the consent of individual Canadians in order to collect personal information. It would force them to only use this information for the purpose for which it was collected.

Under the bill people would be granted access to the information held about them and would also have the right to make changes to it when there are inaccuracies in the information regarding their personal financial holdings and other relevant personal information.

Bill C-54 significantly strengthens the office of the privacy commissioner and allows Canadians a means of recourse against those who abuse confidential personal data. New Democrats support these provisions in principle and feel they are long overdue. With the rapid manner in which information can be transferred in today's world it would be reassuring to know that individuals do have some control on this information as it relates to them personally.

In order that Canadians can feel confident enough to engage in electronic commerce, common guidelines for the handling of personal information are totally essential. They would benefit business as well as the piece of mind of the consuming public.

The other prominent feature of this legislation that attempts to remove the fears of Canadians is the discussion of security features such as secure electronic signature which would now be recognized by law. More noticeable, however, is the absence of any discussion on encryption technology. I know my hon. friend across the way is very interested in encryption technology, as we all are, in terms of what we this can do for the whole privacy issue. At first glance this appears to be an adequate solution to addressing security concerns. However, the way the government is going about this raises some very serious concerns about our future.

Cryptography technology allows users to encode information then pass it along the Internet; in other words, use various codes to codify information being passed along so that others, without knowing that code, would have a difficult or impossible time deciphering what it is all about. This can be used to encode all sorts of information such as credit card numbers, medical records and private correspondence. In itself it is a good thing. Unfortunately this legislation has adopted a completely hands off approach in the area licensing encryption software. This government has indicated no concern about licensing this type of software. It has not demanded any sort of access mechanism that would allow it to intercept and decode these kinds of messages.

I fear that the government has forfeited any means whatsoever of policing the Internet when it comes to these critical matters. For example, the privacy commissioner would have little power to actually see whether personal information is being mishandled and transferred illegally. The privacy provisions of the bill seem to be weakened by the rather hands off approach to cryptology.

Also, law enforcement agencies might see their ability to thwart child pornography traffickers severely curtailed as a result of this omission. Similarly, without any source of access mechanism, cryptology technology will possibly play into the hands of organized crime and the perpetuators of corporate sabotage.

The fact that government will allow any type of cryptology technology will serve only to increase the security fears of Canadians using this system. The thought that the RCMP and other police forces will be basically powerless to investigate Internet abuses is obviously something of great concern. This is really a violation of the peace and good government principle on which this nation was formed. It will do little to make Canadians feel more secure.

It is true that the Internet presents a very difficult medium to regulate. However, Canadian law enforcement agencies must be permitted to fulfill their basic obligations to protect the public. Barbara Roche, Britain's parliamentary undersecretary of state for small firms, trade and industry, stated recently that governments must not loose sight that electronic commerce is at heart a human issue.

The point is that people risk being hurt if any encryption is not regulated. In this area the government has shirked its responsibilities to protect our citizens of all ages by taking this hands off approach.

Other countries have expressed serious opposition to unrestricted cryptology, including the United States, France, Russia, Australia and New Zealand. Clearly there exists some international consensus as to the dangers of allowing any sort of cryptology products to be used. I wonder why the government has chosen to ignore this concern. An opportunity to co-operate with other nations on this security issue seems to have been missed as a result of this omission. I hope the government will see fit when this legislation moves through the House to change that and enable Canada to join with these other nations to control the misuse of cryptology products.

Bill C-54 attempts also to establish the federal government as a responsible and model user of the Internet as a tool for delivering services. With this in mind, many federal statutes have been examined to see whether the references to means of collecting information were limited only to paper. The result that nearly half seem to indicate that paper transactions are the only legal means of sharing information is worth noting.

Bill C-54 attempts to adjust or apply current laws so that there is an electronic alternative for transmitting appropriate information. In principle, when asked to only say that this is a good proposition, it would offer Canadians access to a new and faster means of communicating with their government bodies regarding important services.

The government believes that by acting as a role model it can stimulate a substantial increase in the use of technology in all realms. A quick glance at the current electronic commerce situation reveals that Canadians are far from embracing the Internet. In many cases this is because they simply cannot afford to. Even if we assume that about 30% of Canadians have some sort of access to the Internet, which may be just the fact that they have connected computers at their schools, we must acknowledge that the other three-quarters of the country are presently in the dark.

I noted some statistics the other day, which are not much more than serious estimations. Approximately 13% of Canadians had home Internet access in 1997 and I suspect that number probably has not changed much. We are talking about a relatively small number of Canadians. We recognize Canadians are world leaders in access to the Internet so we can see this is just the beginning for this technology. This affords Bill C-54 an excellent opportunity to do the job correctly.

Many Canadians in rural areas have begun to voice concerns. They foresee exorbitant increases in the cost of local phone services in their areas in the near future. We have all been hearing from rural Canadians. With the competition between existing phone companies they are concerned with what we have known for many years as cross-subsidization. Charges levied on long distance charges and related charges provide phone companies the ability to keep rates relatively low in rural areas. That is now coming under some question.

Will people living in rural Canada have reasonable phone rates and therefore reasonable access to services such as the Internet? How can a farmer in rural Saskatchewan be expected to invest in a second line for Internet purposes if these service charges are not kept affordable?

It seems that the government has put the cart before the horse on this issue. In order for electronic commerce to work, New Democrats believe all Canadians must be given an opportunity to get on board this new technology. Otherwise we risk creating a future society of information haves and information have nots.

One of the concerns that was raised in the commentary at the recent OECD conference in Ottawa was the development of a select technological elite not only in the world of commerce but in the world in general. There would be people with access to the Internet with a sophisticated knowledge of computer use and there would be a vast majority of people who would be marginalized and would have neither access nor that type of knowledge.

Small and medium size businesses have complained that the costs of participating in electronic commerce are simply prohibitive. Ideally, electronic commerce would provide an excellent means for small businesses to expand their market reach but unfortunately many cannot afford the fees charged by banks for setting up secure on-line ordering services. The costs are keeping electronic commerce in the big leagues. Small businesses will be put at a competitive disadvantage unless this issue is considered.

Industry Canada has addressed this issue with the community storefront program which helps many small businesses become on-line merchants. However we believe that a significant expansion of this program will be absolutely crucial in order to ensure the equitable growth of electronic commerce for the big players as well as the small players. The present program is good but certainly is not good enough at its present stage.

There is another important issue surrounding electronic commerce. Very drastic economic changes will take place should this type of on-line trade take off the way governments and others predict. It is impossible to deny that when electronic commerce becomes a more popular means of conducting business, thousands of Canadians will risk losing their jobs.

Jeremy Rifkin, the American expert on the future of work, concluded in his recent book that adverse effects of electronic technology will have major impacts on Canadian society and other societies around the world. There is a danger that electronic commerce will eliminate whole types of workers. Those at risk are a diverse group, everyone from stockbrokers to call centre operators to shipping clerks in warehouses. A society in which there is a large pool of unskilled labourers with no work and a small compact group of informational elite is not a desirable outcome.

I see my time is quickly wrapping up. We have a number of other concerns which I do not have the time to elaborate on but my other colleagues will. It is clear at this point that we oppose the legislation in its present form as being somewhat short on the details required.

[Sarkis Assadourian, Liberal, Brampton Centre, ON]

Madam Speaker, I have a short question to ask the hon. member from the NDP.

The member made a statement that everyone must have access to the Internet but the member did not indicate who was going to pay for it and how the program was going to be paid for. We all like to have services but we have to come up with a way to pay for them and who is going to pay for them.

[Nelson Riis, NDP, Kamloops, BC]

Madam Speaker, I am pleased to hear that my colleague was paying attention.

That is exactly the point I was making. As we develop this technology option in terms of electronic commerce, it is imperative upon us as legislators that all Canadians have access to this crucial service of the future. At the moment the way the legislation is in this bill, this is not taking place. Small businesses tell us that they are unable to take full advantage of the service because of the cost.

As I said earlier we do not have to look far to find out how we can go about it. I refer to the community storefronts program which was introduced to assist small businesses in particular but also medium size businesses in accessing this type of technology for market development.

We will have to ensure that this program is expanded in all regions of the country. There was an announcement just the other day by Bell Telephone indicating its intention particularly in the province of Ontario to provide this type of technology option for the small and medium size business sector.

Our job is to ensure that these opportunities, as we move into this new form of doing business, are available to all Canadians, consumers and businesses alike.

[Sarkis Assadourian, Liberal, Brampton Centre, ON]

Madam Speaker, I did not receive the answers to my questions of who is going to pay for it, how we are going to pay for it and how much it is going to cost to make Internet available to everyone in Canada. I ask the member for a short answer.

[Nelson Riis, NDP, Kamloops, BC]

Madam Speaker, I appreciate my hon. friend has asked for a short answer. There are some things in life that simply cannot be answered in a snappy, quick way and this is one of them.

My friend makes an important point. This is something we cannot rush and that is what we are saying. I think all the speakers I have heard so far, including those from the government side, have indicated a concern that we take this step by step to ensure it is developed properly.

It is fair to say that some countries are dealing with this in a creative way. For example as of September one country took the unprecedented decision to provide every child in the country with a laptop computer as part of the infrastructure for their education. It is a relatively small and a relatively wealthy country.

The point is that if we are going to address this whole issue of including all Canadians in the information culture of the 21st century, we have to take some bold steps as a country and as a parliament. We have to acknowledge the fact that there is an elite in our country that has access to the Internet and the sophisticated computers that are required, but also a vast majority currently are not hooked into the Internet and do not have computer technology expertise.

We have a challenge as legislators as we move into the e-commerce of the 21st century. All Canadians should have the opportunity to participate. In other words there should be equal opportunity to participate in e-commerce.

[Jim Jones, Progressive Conservative, Markham, ON]

Madam Speaker, today we begin the process of crafting legislation to catch up with technology.

If Canada is truly to become a cyberspace world leader and carry the title of most connected nation, government must conduct itself accordingly. Indeed if a balance is struck between the privacy of Internet users and the legitimate marketing efforts of Canadian businesses, we could face a situation where Canada is the world leader in e-commerce importing.

Trust is at the very centre of this entire exercise. Internet users need to trust the security safeguards put in place by on-line marketers. Canadian industry needs to trust that legislation will permit them to responsibly do business on-line. The Canadian taxpayers need to trust that they are getting value for their money from their elected officials and that out of their work will come a comprehensive state of the art electronic commerce policy.

It should come as a surprise to nobody that Canada is poised to be one of the world leaders in e-commerce. Unlike almost every other nation in the world, our massive geography has dictated that we seek innovative solutions to draw our population closer. This should not be lost on my colleagues in the House today.

Bill C-54 is the first step in developing an e-commerce structure. In many ways it is the 21st century equivalent of the first spike. The Internet continues to grow exponentially with implications for every Canadian business, government department and indeed every Canadian resident.

It will be a privilege for me to work with my colleagues on the industry committee in a diligent and non-partisan effort to achieve responsive legislation. However, this issue goes well beyond the boundaries of the industry department. Just as the Y2K bug impacts every facet of government and what we try to accomplish in this House, so does the Internet.

E-commerce will have far more implications than just privacy issues. This government needs to come up with a comprehensive plan which addresses the issues of uniformity in the digital marketplace, on-line eavesdropping by security forces, public private on-line relationships, competition, the role of small and medium size enterprises, Canadian heritage and culture, and the list goes on and on and on.

One Canadian executive made an interesting observation on this issue and I think it bears repeating in this House. He said that a fax machine is only valuable when the rest of the world has a fax. Value explodes exponentially with membership. Extending his advice to its logical conclusion would see government treat this very carefully so as not to allow the fledgling Internet commerce industry to falter. Possibly this is legitimate advice but there are other ramifications to this.

There are industries that are immune to Internet competition. When a family in Markham decides they want to have a Saturday night barbecue, it is unlikely they will turn to the Internet to supply their hamburgers. It is probably reasonable to assume that given the choice, most people would rather step into the warmth and smell of a bakery to buy their rolls than to order on-line.

Many consumer choices remain which can be reviewed and ordered in a visually pleasing format on a computer screen. Perhaps the message here is that the butcher and the baker are safe but the candlestick maker should beware. There is no doubt that my analogy is simplistic but it does lead me to the discussion of the pending showdown between downtown and cybertown.

Incentives are a very intricate balance in the marketplace. Some are intrinsic such as the desire to be self-employed. Others can be nurtured through regulations such as those that favour the use of tax implications. The important issue to note is that there are artificial incentives created by legislation. It is almost certain that an equal and opposite disincentive is created as well. The job of legislators should be to determine what is a disincentive and debate it rationally.

Recently the federal revenue minister announced that the government is not interested in creating new taxes for e-commerce. I wish to commend him for that position. Canadians have spoken loudly and clearly that they do not have the stomach for any new taxes. Instead we should be looking for ways to cut taxes. The question we must ask ourselves is how we apply existing tax legislation in a fair, predictable, revenue neutral fashion.

At the present time a situation exists whereby online retailers, set up in Prince Edward Island as an example, ship to other provinces like Ontario. They are not required to collect sales taxes. Instead consumers are responsible to remit their own sales taxes to the provinces in which they reside.

This may come as a shock to the revenue minister so I ask him to brace himself, but by and large these taxes are not being remitted. It is not an insurmountable problem. Time and time again Canadian industry has shown its willingness to comply with the necessary regulations which allow government to collect the revenue needed to provide the services Canadians demand.

At issue is the interim situation. There appears to exist a marketplace where those who open storefronts, employ sales clerks and pay commercial property tax will also have to endure a competitive disadvantage. They are required to collect sales taxes that their online competitors need not collect. I suggest that this situation be addressed sooner rather than later. There should not exist a timetable for when tax regulations will be fair. Fairness must remain an inherent fundamental.

I have dealt with a purely domestic Internet tax issue, so now I turn my attention to taxation and the international marketplace. At the recent OECD e-commerce ministerial conference held in Ottawa much of the focus was on the principles of e-commerce taxation.

There was fundamental agreement in five areas. They included the following. The first was neutrality. This would see that taxation would seek to be equitable and fair as it pertained to both e-commerce and traditional forms of commerce. The next was efficiency. This would target compliance to ensure that it would meet the dual objectives of limiting costs in administration. Next came certainty and simplicity. This would ensure that taxation levels and collection procedures were transparent and predictable. Then came effectiveness and fairness. This would limit the potential avoidance and evasion and guarantee that the right amounts of tax were collected at the right time. Finally there was flexibility. This provision was included to assist legislators in the attempt to keep pace with emerging technology.

Fair minded, far reaching in their scope, even highbrow, all these terms could be used to describe these principles. The dilemma is that taken together the principles seek to equalize a world of incongruent tax regimes. Perhaps they could be implemented in a single nation state or even negotiated for a long term phase-in within the realm of a free trade agreement. However this is not the world we live in today.

Quite frankly there is no international formula for taxation that could possibly balance the playing field. If we were trying to negotiate such a treaty we would be beginning a long arduous process which would entail all the same pitfalls as currently are being encountered with the MAI. How do we respond to this?

The House is charged with the duty of protecting and fostering Canadian interests. As far as I can see we have to choose to be a player in a liberalized trading world or we can follow the path of protectionist policies, a trail that most assuredly leads to a dead end.

The Progressive Conservative Party, as the author of the greatest, most successful free trade agreement in the nation's history, is not about to turn its back on free trade. However we must be realistic about the competition that exists out there.

The cold reality is that Internet commerce cannot help but be brutally efficient. Price comparisons will be performed in a matter of seconds, eliminating what used to be an entire Saturday of window shopping. Price as a determinate will become the overriding decision maker on the Internet. When we understand this and couple it with our knowledge of our completely uncompetitive situation, when we compare our tax system to our neighbour's to the south, the situation is a serious one.

If the success story of the Ontario provincial government has not provided the Minister of Finance with enough evidence that tax cuts create growth, perhaps the uneven environment may spur him on. By and large regulation of the Internet has been a failure in every jurisdiction that has tried to overstep the boundaries of common sense.

On November 23, the CRTC will begin hearings into what kinds of regulations, if any, are needed for new media and the Internet. The commission has been vilified for this and has been accused of empire building. The Progressive Conservative Party believes that this is exactly the kind of exercise we must engage in. Certainly that is not to say we will support any move to censor the Internet. In fact quite the opposite is the case. The private sector must determine what the future holds for the Internet. However the public sector has a role to play in facilitating the debate.

One of the realities we must accept is that the Internet is expanding at a rate which far exceeds our ability to respond with legislation. The biggest impediment to any regulation is the fact that rules can only be imposed through national laws. Yet the medium itself is global in scope. Therefore government will have to rely on the private sector to produce new technology which individuals can use to access or eliminate specific Internet content as they see fit. Government's role will be greatly curtailed in the exercise.

The expansion of this technology that was originally devised as a research tool for academics has surpassed all of us. Recently an IBM executive referred to the phenomenon as a digital revolution and labelled its impact as being no lesser in scope than that of the industrial revolution. Like the industrial revolution the Internet and e-commerce have the ability to change the way business is done, the way governments are organized, and the way economies are structured. The major difference though is that this revolution is happening 10 times faster than the industrial revolution. Beyond that the Internet is doubling in size at a rate measured in months rather than in years.

I am certain that the CRTC will generate many worthy submissions and be provided with volumes of advice. However it seems clear that any attempts to control levels of Canadian content on the net would result in abject failure.

Instead it is time for government and the Canadian industry to work together in this pioneering venture. As model users of how the Internet can be adapted to the needs of Canadians we will have the greatest impact. Uniformity of policy from nation to nation will become a much touted idea. By responding early we have the greatest opportunity to leave a lasting Canadian imprint on this emerging technology.

The challenge before us is no less than monumental. Perhaps the most daunting realization we have to come to as legislators is the elimination of our influence. Instead of imposing our will we will have to become more proactive in our spheres of influence. The days of paying lip service to providing incentives must come to an end. There is no way to legislate others to invest in Canada. Thus we must back up our knowledge based economy with incentives and access to capital, something which the industry minister failed to do when he recently tabled the revamped Small Business Loans Act in the form of Bill C-53.

Recently the Liberal newsletter, otherwise known as the Toronto Star , offered up some free advice on how these incentives might be implemented. The suggestion was that the Income Tax Act be amended to provide incentives for Canadian businesses to advertise on Canadian Internet services.

Whether this suggestion has merit or not is a point for debate. However the overriding principle that we need to grasp and incorporate is the need to pursue e-commerce legislation with an eye to the carrot and not the stick.

The OECD estimates that by the year 2003 e-commerce transactions will reach $1 trillion, a number so large in scope it represents 54% of the U.S. direct marketing sales industry. Governments and business need to develop solutions which will make this bulging phenomenon available to all.

Computer costs have come down dramatically in recent years. However personal computers are still out of the reach of many households. If this gap is not addressed now, it will only result in a larger chasm in the future.

One of the greatest reasons for the rapid growth of the Internet is its ability to allow expression which goes right to the heart of what it is to be alive, to be human. Knowing this we cannot accept that some might be disenfranchised.

This is not a subject which should fill us with fear. Predictably many in the union movement have reverted to their Luddite ways and decried the potential loss of jobs. There is no basis for such fears. Instead the reality is that many new high salary positions have been created and in fact remain unfilled as demand continues to outstrip supply. These same positions are ones which traditionally have not leant themselves to trade union affiliation. Perhaps those in the labour movement who engage in such fearmongering should examine their own motivations. It seems that job losses are not their greatest worry but instead it is their own influence which worries them.

Other issues that need to be addressed include law enforcement for serious egregious offences which are committed over the Internet. Bill C-54 begins to deal with this issue in its amendments to the Canadian Evidence Act. The proposed amendments would create an admissible provision which defines electronic signatures. This will make it difficult for online fraudsters to lurk behind some perceived anonymity. It is also my hope that this provision will assist in the identification of hate promoters that will continue to permeate the Internet.

This issue will continue to be revisited as long as this virus continues to exist in Canada. Whether it is on line or otherwise it strikes me as ironic that tools such as the Internet, which has so much power to unite the planet, continues to provide a haven for blatant distorters of truth. I call on all my colleagues in the House to work together so we can begin the process of eliminating this plague.

Copyright infringements are a serious concern which cannot be successfully addressed by one nation. Canada needs to show the same leadership on this issue as we have exhibited in the past when it comes to protecting creative capital. A point that we all need to be reminded of, plain and simple, is that copyright violations are theft and there is a victim.

The head of the digital crime unit, the Federation Against Software Theft, FAST, recently confirmed that Internet crime is growing. The Internet is a primary tool used for software theft. It is also used increasingly for the distribution of counterfeit software and other intellectual properties such as music. It is imperative that we give law enforcement officials all the tools they need in this battle.

I have spoken to some very large picture issues regarding e-commerce. Now I would like to turn my attention to the specific provisions of Bill C-54.

[The Speaker]

I think that this would be an opportune moment to intervene because the member is just getting into his last points and will have the floor right after question period.

It being 2 p.m. we will proceed to Statements by Members.