Debates of Nov. 30th, 1998

Royal Canadian Mint Act

[Ghislain Lebel, Bloc, Chambly, QC]

Mr. Speaker, on this beautiful November 30, I am pleased to speak on financial matters here in this House.

Before I do, however, I would like to remind my fellow residents of Chambly to vote today, because for them and for all Quebeckers, today is a very important day. According to the polls, the people of Quebec are anxious to get out and vote, they want to participate in this democratic act.

I invite them to do so before La petite vie starts, because, on a day like today, that television program holds as much interest for Quebeckers as the election itself does. I therefore encourage them to get out and vote before La petite vie comes on. Then they can just relax and watch their favorite show.

Bill C-41, which we are discussing today, responds to certain imperatives with which we agree. For example, the Royal Canadian Mint, or “the Mint” as it is called in the bill, is setting itself up as a business. According to its president, Mrs. Lépine, the Mint has an excellent world reputation and mints coinage not just for the Canadian government but also for other countries, on contract.

Examples were given of several countries that lacked the technical facilities and support to issue their own currency They contract this out to the Government of Canada, or in other words the Royal Canadian Mint, which prints their bank notes and mints their coinage.

As the Parliamentary Secretary to the Minister of Public Works has already said, Canada can be justifiably proud of the coins it produces, which are incidentally among the finest in the world. I took the same tours as the parliamentary secretary, and we could see that we had reason to be proud of our royal mint when outside Canada. The increase in borrowing power from $50 million to $75 million, which upset the former speaker, I consider necessary.

It is necessary because Canada, which produces coins under contract for foreign countries, must be competitive. Ms. Lépine told us in committee that a firm that strikes coins, in England I think, was recently up for sale. The Royal Canadian Mint was not able to bid on it and acquire it, because it lacked not only the legal capability but also the financial means to do so. While the first condition was not present, the second could have been arranged, in other words, with the capital necessary, acquiring this firm would apparently have been a very good deal. The Germans, our competitors in this sort of business, bought the firm in question and they will likely benefit and profit amply from doing so.

There are reasons for supporting Bill C-41. Unfortunately, however, when we begin considering it, it is often the things not in it that are the problem. It is often what this bill does not include or change that causes a problem.

Section 3.1(2) in the Royal Canadian Mint Act gives the mint the power to redeem shares it issued a number of years previously, that is 4,000 shares at $10,000 each, in favour of a single shareholder, the Government of Canada, providing $40 million in capital stock. Bill C-41 makes no mention of this.

Section 3.2 of the current legislation, which is not amended by Bill C-41, provides:

The Mint shall, at the request of the Minister after consultation with the Board, redeem such number of shares issued to the Minister in accordance with this Act as the Minister may direct.

The price to be paid for each share redeemed by the Mint pursuant to subsection (1) is the issue price of the share.

Therefore, in 1969, when the 4,000 shares were issued at $10,000 each, the price was frozen at that level. That is understandable, as Ms. Lépine, the President of the Royal Canadian Mint, told us. The government was the only shareholder, and all the members of the board were government representatives. So there was little or no chance that the value of the shares would change. If it did, the government would benefit one way or another.

Under Bill C-41, the Royal Canadian Mint receives corporate status and the power to buy back its own shares.

My friend, the member for Hochelaga—Maisonneuve, has been taking law courses in his spare time this fall. He already has a university degree and is qualified, but he wanted to brush up and upgrade his skills. I am sure his brilliant academic performance will make it possible for him to graduate magna cum laude. For his benefit, as a friend, and that of the members opposite, particularly the member for Winnipeg, who is absorbed in his reading right now, I would like to say that, in corporate law, purchase and redemption are two completely different things.

Redemption takes place without the holder's consent. This means that the Royal Canadian Mint could come to the minister and say “We have accumulated a surplus and decided to use it to redeem some of our shares. Here is $40 million in exchange for the 4,000 shares issued at $10,000 each in 1969”. This is called redemption. The shareholder, that is the government or the minister in this instance, does not have to agree.

This is how purchase differs from redemption. In one case, there is an agreement. We are talking about a transaction by mutual agreement. Agreement or consensus is what makes the difference between purchase and redemption.

Section 3.2, which is not amended by Bill C-41, provides that shares be redeemed at their issue price. At the same time the legislation gives the Royal Canadian Mint what it has long been asking for: the powers, privileges and legal capacity of a natural person, including the power to acquire interests in one or more corporations anywhere in Canada or abroad.

If the Royal Canadian Mint makes good investments and acquisitions, its shares will increase in value. In 1969, it issued 4,000 shares at $10,000 each. If it acquires companies, distributors, gold refiners or other interests in the industry, these shares will increase in value. I notice that the hon. member across the way, my friend who represents the riding where the military base of Petawawa is located, whose name escapes me, is nodding in approval. He knows I am right in making that statement, and I thank him for that.

The danger is that, some day, the royal mint may decide to privatize its operations. For two, three, four, five or ten years, the Royal Canadian Mint could make acquisitions, mergers and transactions to make sure its shares are worth good money. We may not always have ministers as honest as the ones we now have, including the current Minister of Public Works who manages all that and who is responsible for everything. Canadians could get taken by being told “We bought back our shares at $10,000 per share, even though their actual value is higher, and we sold them back for $10,000 each. We did not incur any loss”. However, there might have been a gain.

This is the type of operation we have to anticipate when we discuss a measure as important as Bill C-41.

Members must not say that this sort of things cannot happen. I have with me the report released by the auditor general in October 1997. Chapter 20 of that document dealt specifically with the privatization of Canada Communication Group, or the government printing bureau, as it used to be called.

In his findings, the auditor general is far from praising the current government and the Minister of Public Works of the time, not the current minister. A transaction was probably presented to cabinet as a good operation, as a positive measure that would eventually be successful.

Some figures were submitted but, unfortunately, they were not absolutely up to date. According to the auditor general, the projections were for a three-year period but were not particularly useful because the printing bureau, that is Canada Communication Group, had invested in new technologies and, after allowance for depreciation over the first three years, anticipated benefits suffered. According to the auditor general, if a five-year period had been used, the figures would have been very different.

The presses were sold and the eventual buyer was given a five-year option to purchase all government contracts under $100,000. Say, for instance, that the auditor general's report has to be printed. This would cost under $100,000 so the Saint-Joseph group, which bought the presses, is called, and it does it without a call for tenders for $100,000. Right now, 95% of printing contracts awarded by the Government of Canada are for less than $100,000. So the Saint-Joseph group, which acquired the Canada Communication Group, enjoys an advantage that not all its competitors have.

I share the concern of the Reform Party member over this kind of attitude. The Auditor General of Canada also castigates the people who decided to sell the Canada Communication Group.

Between the tendering of submissions in November 1995 and the actual sale in March 1996, the bidder comes out $454,000 ahead. Were all the other bidders aware of this? It seems not. The highest bidder saw his price drop by $454,000.

If we do the same calculations, looking at these things, we notice that there is also a small error of $150,000, for a total of $604,000. That is over the half-million dollars that favours the Saint-Joseph group. The auditor general goes on for pages in his report criticizing this transaction. He does not condemn it, because it is the first major privatization this government undertook. But we can see that he is in the process of spilling the beans about a number of privatizations.

What concerns me at the moment is the day the mint is privatized, because we know that, when a business is in difficulty, it becomes a public business. When it turns a profit, the government sells it to its friends. The public at large absorbs the deficit, and the benefits are shared by a gang of friends, who, oddly enough, are rarely members of the opposition. They are more often friends of those on the right side.

This sort of criticism has to stop. Provisions must be established to prevent this sort of criticism from recurring, to move this sort of thing far from the minds of politicians and legislators.

This is why I say that, had the government truly acted in good faith, it should have amended subsection 3.2(2) in Bill C-41 making the stock redemption price the fair market value of stocks at the time of redemption.

If the price fluctuates, if it goes up as we hope, the government will benefit. If it goes down, as the government is already the sole shareholder, it will make up the difference.

Although there is no talk right now of privatizing the Royal Canadian Mint, it is not unthinkable that such a proposal might be made in the not-so-distant future. If privatization is what Canadians and their government want, it should be carried out with the greatest possible appearance of transparency. We are moving away from that.

It would be even more difficult because the bill allows the Royal Canadian Mint to buy companies, goods, buildings, all sorts of things, but does not give the Auditor General of Canada the authority to audit companies owned by the Royal Canadian Mint.

There is another weak point that has not been raised yet. One day, I began to wonder about this. There was a post office in my riding that unfortunately was located in the middle of a shopping centre parking lot. The shopping centre owners had had their eye on the post office for ages. “If ever that comes up for sale,” they said, “we would certainly like to hear about it. We would be interested in buying it”. I do not know who started the rumour, but that same morning I received two calls at my office, from the two owners of the shopping mall, who told me that they heard the post office might be up for sale. I was surprised, because I had not heard the rumour myself.

I phoned Canada Post and was told that it was indeed a rumour whose origin was unknown. I was also told that, should Canada Post decide to hand over the post office, presumably to a charity, even parliamentarians and the government would not have a say in it. The only time the government has a say is when Canada Post submits its annual financial statement and tells the government “We generated x million dollars in profits for you, or we are asking for x million dollars because we incurred a deficit”. This is the only time the government can get involved and show its authority or lack thereof.

The government has no say in the day to day management of the corporation, or in the control of its assets and liabilities. This is increasingly the case with crown corporations and this is what we must control. Such a situation should not even exist. Unfortunately, because of some principle, the government comes up with bills like this one. We know we are in a minority and we have no illusions, but, according to the principles of sound management, we should have a say.

I see my friend, the hon. member for Charlevoix. He is a prosperous man who manages his business successfully. He is definitely not the type to keep his figures at the bottom of a drawer; he will always be accountable to his wife, to his children and to himself.

A good manager must first and foremost be accountable to himself and then release the information to Canadians, particularly when that manager is a government that claims to be responsible.

The fact that we cannot buy back shares at their fair market value and the fact that the Auditor General of Canada does not have the authority to audit the subsidiaries of those companies owned by the Royal Canadian Mint were major concerns for us.

I am less worried about competition. My friend from the Reform Party referred to a company in western Canada—he gave the name but I have forgotten it—which has the expertise and the technical facilities to make coins. Yet, the mint competes with this company, which pays taxes to Ottawa. So this company's taxes are being used to support its competition and force it out of the market.

If this is true, I agree with the hon. member that there is something abnormal about this. I have heard people from the mint describe this particular company as “overworked and not able to keep up with demand. Recently, we had a requisition for 10-cent coins that we had to contract outside the country because the company referred to by the hon. member could not provide us with the coins when we needed them”.

The Royal Canadian Mint ought not to be competing with private business, but our companies need to be competitive. If dimes are needed for December 1, or loonies for January 1, there is no use having them for March 1. Deadlines must be met. As everyone knows, where money is concerned, deadlines are very important. Just think of the old saying: time is money.

I would like to say a few words about the crown corporations, which are not answerable to Parliament, the auditor general, or indeed anyone, except for having to produce an annual report. Some of them are even entitled not to have the auditor general look at their figures, their statistics and their accounting ledgers.

Let us discuss the Canada Mortgage and Housing Corporation. It was created under the National Housing Act right after the last war. The economy was growing and would give rise to the families of the baby boomers. Our parents moved from rural Canada or Quebec to the cities to help rebuild the economy. They wanted to be part of a booming economy. They headed to cities like Montreal and Quebec City.

So the National Housing Act was created to help these people, who otherwise would not have met the banks' or mortgage lenders' criteria. For example, in order to acquire property or a house, they had to come up with 25% of the total price in cash as a downpayment. At that time, people did not have that kind of money. So, the National Housing Act created the Canada Mortgage and Housing Corporation, which could authorize and guarantee loans with a much smaller downpayment. At the time it was 10% of the total value of the property, and it was recently brought down to 5%.

If we ask for money, for a loan from a company and it cannot afford the 25% downpayment, we are told “Your loan is going to be approved and guaranteed by the Canada Mortgage and Housing Corporation. If you do not pay, that is not a problem, we will get our money back from the CMHC. We will take your house away and give it to the CMHC and we will get all our money back. The CMHC will deal with your house”.

This is not free. The Canada Mortgage and Housing Corporation charges $235 to look at the file. A few weeks ago, the CMHC decided, because of the competition and since this is a time when there are no house buyers, to reduce its fee for a while and to bring it from $235 down to $185, which is a $50 reduction.

People are being told “We are charging you $235 to assess your situation, to appraise the house you want to buy, and then we will let you know if we are going to lend you money”. But there are other costs involved. There is a scale of fees. There is a fee of 1% if you borrow less than $50,000; 1.5% if you borrow between $50,000 and $100,000; and 2% if you borrow between $100,000 and $150,000. That fee can reach 3.5%. The borrower, that is the buyer of the house, not a rich person to begin with since he does not have the required 25% for his mortgage equity, really gets dinged when he gets a loan.

For example, if the CMHC lends him $100,000, he is told “We will lend you $103,000, but we will withhold $3,000 on that amount to pay for your mortgage insurance”. We are now finding out, and this happens more and more frequently to the point where it is almost an established rule, that the Canada Mortgage Housing Corporation does not appraise the property for which it guarantees the loans. The CMHC will often loan $100,000 for a house and then discover, when it takes it back, that it is worth $45,000. This is true and it is a common occurrence.

The CMHC says “It is not a big deal. We charged $2,000, $2,500 or $2,800 to the borrower. With all these accumulated amounts, it is not a problem if we lose money, because we collected enough to pay the mortgagee and absorb a loss of $50,000, $60,000 or, in some cases, $70,000”. So, we are talking about 30%, 40% or 50%.

I think that this shows poor management on the part of the Canada Mortgage and Housing Corporation. When a person backs something, he should know what exactly it is he is backing and what it will cost if things go wrong. But no. The Canada Mortgage and Housing Corporation has more money than it knows what to do with. It takes the attitude that, if the borrower does not have the money, someone else will.

But if the Canada Mortgage and Housing Corporation were doing its job, if it were assessing all buildings, or 50% of buildings, and not just the 5% it is assessing right now in Quebec, perhaps, instead of charging borrowers between 2% and 3.5%, it would reduce this to 0.5% or a maximum of 1%. The Canada Mortgage and Housing Corporation would truly play the role it was originally intended to play.

But, instead, it still comes under the authority of the Minister of Public Works. A lax approach is taken, not to mention that people who feel that the Canada Mortgage and Housing Corporation is looking out for them and assume that it is in the government's interest to protect them are often misled. People say “I offer $100,000 for a property. If I am being had and it is not really worth that amount, the Canada Mortgage and Housing Corporation will let me know and turn down my application. It will see that I am paying too much.” But this is not the case. The Canada Mortgage and Housing Corporation does not do an assessment.

It is all very fine and well to trust a minister with one's hopes and dreams, but some caution is required.

Ministers come and go, and not all of them are the same, which is a comforting thought. But when it comes to big money, they tend to sound alike. I noticed that. Their constituency is often the same, irrespective of what party is in office or who is managing government funds.

I will conclude on this note, but I would appreciate it if, the next time he tables a purely technical, housekeeping bill like Bill C-41 before us, the Minister of Public Works would go one step further and consider the impact such a bill really has on all the legislation governing or dealing with any government activity.

The Bloc Quebecois nevertheless recognizes how important it is for the Royal Canadian Mint to be able to compete and to grow. The Bloc Quebecois will therefore support, albeit very reluctantly, the bill at third reading.

[John Solomon, NDP, Regina—Lumsden—Lake Centre, SK]

Mr. Speaker, it is a pleasure to stand in the House this afternoon to put forward the viewpoint of the New Democratic Party on Bill C-41, an act to amend the Royal Canadian MINT Act and the Currency Act.

I want to make a few comments about our position, what we think has happened and might happen in the future. I want to put forward some opinions I received from various Canadians across the country on the topic of money, currency, and in particular that part of the currency we refer to as toonies and loonies.

The bill will amend the Royal Canadian MINT Act to update the terminology for coins in order to reflect the market surge rather then the metals of which the coins are composed. The amendments simplify the process for issuing coins by giving additional powers to the mint and to the Minister of Public Works and Government Services.

The mint is given the capacity of a natural person and the power to incorporate subsidiaries and to acquire and dispose of interests in other entities. I will make some comments about that in due course. Other amendments are of an administrative nature. I want to make one reference in particular. It is not administrative but it may be viewed as administrative by the government.

Some of my colleagues in opposition have pointed out that the mint's capability of increasing its capital from $50 million to $75 million is an important development because the mint will be basically borrowing extra cash to expand its operations.

We support most of the sections of the bill. It is important to update the powers of the mint as time goes on and to make sure it is in line with the powers of other crown corporations. We are happy with a particular change that occurred between second and third reading when the bill was at committee.

The member for Winnipeg—Transcona spoke on the second reading of the bill. He indicated he was concerned that the coins circulated in Canada would continue to be circulated but any new issue of circulated coins would be on a 15 day notice. I see the committee has changed that to sustain the power of parliament to decide whether or not a new denomination of coin would be created.

I acknowledge the efforts of the member for Winnipeg—Transcona. I think that is an important democratic function and an important responsibility of the House of Commons and of parliament rather than letting regulation determine whether or not these things will happen. We have had additional time to consider them rather than just 15 days before they become law. The bill provides for this provision. I am pleased to see the amendment. But every Canadian will be affected by additions or deletions of coins. We must ensure their needs and concerns are properly heard.

We have seen the introduction of the loony under the former Conservative government. It was widely believed at that time and has been actually proven accurate that the Mulroney government made pocket change of the one dollar bill. People were quite upset with that move until of course the Liberals got elected. They did one better than the Tories who were so roundly rejected by the taxpayers in 1993. They created pocket change out of the two dollar bill. So now what that means is that taxpayers have to earn a lot more money to buy the same goods and services they purchased earlier and the Liberal government is responsible for that effort.

The mint will drum up additional business outside the country. Before I get into that issue I want to make reference to the fact the Reform Party was quite concerned about a couple of issues, about the need for fair competition. Of course everyone is embracing and supporting fair competition.

The hon. member from the Reform Party made reference to the fact that the Competition Bureau ensures there is competition. The Competition Bureau is actually called, in the circles I travel in, not the Competition Bureau but the lack of competition bureau.

Time after time, whether it is drug pricing issues or gasoline pricing issues, the Competition Bureau has failed Canadians in terms of protecting the interests of consumers and ensuring there is fair competition. In fact, it has done the opposite, according to the thousands of people I have spoken to.

This legislation was brought in by the Conservatives. The Liberals endorse it wholeheartedly. The anti-combines legislation, which existed prior to Mr. Mulroney's getting elected in 1984, provided power to the Competition Bureau to investigate price fixing, to investigate predatory pricing without needing a letter from one president of a company to another saying let us fix prices. It had the ability to go into a particular business and investigate without notice whether allegations of price fixing or predatory pricing were true.

I join with my colleagues in the Reform Party by saying I agree with their comment with respect to having fair competition. I believe the only way we can do that is to have a competition bureau that has some teeth and has some capability to look into some of these very serious allegations.

I come from Saskatchewan. We have, depending on the year, approximately 25 crown corporations. What I find incredible with the federal government is that there is no committee responsible for holding crown corporations accountable for their actions.

In Saskatchewan I had the honour to chair the standing committee on crown corporations in the legislature. That committee had the power to call every year all the crown corporation presidents and their management individually before the committee as well as the ministers responsible. We could go for as long as we wanted, not two hours on each corporation, to investigate and question the officials and the ministers in charge of those corporations on matters before the public or matters they were dealing with in terms of their own crown responsibilities.

Saskatchewan is the only jurisdiction I am aware of in the Commonwealth that has a standing committee on crown corporations. That is why in Saskatchewan we have very significant crown corporations providing very significant services to the people of Saskatchewan in a very reasonably priced way, in an accountable way and in a transparent way.

What I would like to see the government do with respect to the Royal Canadian Mint and other crown corporations is establish a standing committee on crown corporations so that we as parliamentarians can have the presidents and their top staff and the ministers responsible come before the committee to answer questions which are important and relevant to the business they are in.

What this does is provide, as a public committee meeting, an opportunity to make sure the crown corporations' objectives and missions are being adhered to, that they are transparent and doing the service to the public they were created to do. I think that is what we need in the House of Commons.

I am sure my colleagues in the Reform Party support this. We have a lot of support in the province of Saskatchewan for such a committee. I think the Royal Canadian Mint, a crown corporation, would not only continue to operate in a well organized way but its productivity, efficiency and profitability would be enhanced. I think that is a very important suggestion.

The annual reports would be on the table. We could ask any questions pertaining to those annual reports. We could ask any questions pertaining to the business of that crown corporation except for matters before the courts or matters pertaining to human resources for individuals. Those are logical things we do not want to talk about in public.

It is a similar recommendation such as I made to make the Board of Internal Economy a public board. In Saskatchewan the board of internal economy is a public board. The press and members can come. They cannot ask questions but they can see how the board operates rather than doing it in secret as we do in the House of Commons. It is a matter of accountability. It is a matter of being more accountable to the taxpayers and a matter of making sure everything is transparent in the business they do.

I also want to note the concerns of small business with respect to this bill. I am a small business person. Although I believe crown corporations play an important role in our economy, I support generally the initiatives of government to use crown corporations as economic instruments to deliver a program or service that is necessary. Collectively deliver it as opposed to individually if that is the mandate of the government.

The mint is located in Winnipeg where the minister responsible for small business comes from. I believe it is in his constituency. I used to live in his constituency many years ago when I was a young student. I know where the mint is located. It is a very good crown corporation. It provides a very good service. It employs a large number of individuals and pays them relatively well. I think that is something we have to continue to do.

With respect to the concerns of small businesses, they tell me they want to have in this bill enough notice as well as an opportunity to consult if any changes are made. I know the member for Saint Boniface, the minister in charge of small business, is very much aware of that. I know that in the minister's consultations with small business he has been told the same, in particular as it applies to the operation of the mint in his district.

We are very worried about this. I know that when the loonie and the toonie were introduced we had a number of small business people voice their concerns because of the short notice and the fact they were not consulted in advance and could not prepare their vending machines. Vending machines are becoming fairly important these days. We can get coffee from them, soda pop, food, sandwiches, all kinds of snacks. They are used in places without cafeterias. I think it is a very important thing to do.

Business people are telling me that when new coins are struck they should be consulted in advance so they can prepare their machines because it takes in some areas up to $300 to convert one machine for a new coinage denomination. Some companies have instituted some sort of cash box adapters, patented them and they are selling for around $10 each. Those are things that are a little more reasonable. But still they need time to convert those vending machines.

I would also like to make one quick reference with respect to what Reformers talked about. They talked about the need for fair competition which I agree with. I recommended the creation of a standing committee on crown corporations which they probably agree with. They made some reference to privatization. There is a good way to do privatization and there is a bad way to do privatization. What scares the living daylights out of me and my colleagues and the people of Saskatchewan is when the Reform Party starts promoting privatization.

We had a Reform style government in Saskatchewan from 1982 to 1991. That was a Tory government which was a combination of Liberals, Tories and Reformers. Many are now members of the Reform Party in Saskatchewan called the Saskatchewan Party led by the former Reform House leader Elwin Hermanson. He has the same caucus members who ran the province in 1982 to 1991. They attended the Saskatchewan party convention.

I want to talk about privatization in Saskatchewan as it refers to the mint bill. We have experienced firsthand the Reform style of government in Saskatchewan. It came to power in 1982. We had the lowest tax rates in the country. We had free dental care for children 18 and under. We had the lowest cost prescription drug plan in the world. We had the lowest unemployment rate in the country. We had no debt as a province. After nine years of a Reform style privatization government, with 1 million people we have $15 billion in debt as a result of its privatization initiatives.

When Reformers talk about privatization the people of Saskatchewan look at them and just shake their head and say will they ever learn. Having listened to today's debates, my hon. colleagues in the Reform Party have not learned a thing, not one lesson from privatizing and bankrupting the province of Saskatchewan. Now they want to bring that experience to the House of Commons and bankrupt Canada as a result of some of their initiatives.

Canadians will look very closely and think twice before they support that kind of party with respect to its privatizations.

I will give an example of privatization in Saskatchewan. The government privatized a Saskatchewan potash corporation worth over $2 billion. It kept the debt for the taxpayers. It gave away the assets to the shareholders. As a result of that we have lost revenues of about $100 million a year to the treasury to help out programs like health care and education. We have half a billion dollars in extra debt as a result of that privatization which the taxpayers are now paying off for the next 40 or 50 years.

We had a reduction in employees in the corporation, an increase in the profits, but all the profits are now leaving the provinces to other parts of the world, which is just fine. The other interesting thing is that when we ran the potash corporation as a crown corporation the salary of the president was $150,000 a year Canadian. The privatized corporation is now paying $2 million U.S. to a president of the potash corporation who is from the U.S. Guess who the vice-presidents are? They are from the U.S. and they are all getting millions of dollars in U.S. payments and working in Canada for a Canadian crown corporation. That is the legacy of the Reform style government of Grant Devine in the 1980s in Saskatchewan.

That is the bad way to do privatization. Maybe there is a good way to do it. If a crown corporation is struggling and is not particularly providing any service to Canadians or any kind of programs to Canadian we should look at privatizing that to make sure we have a better service or a better program if that is what the government decides.

At this point we can more or less support Bill C-41. The Reform Party will not support this bill. Privatization is one thing. The Reform member for Elk Island has been pumping a company that is competing with this crown corporation. He has been supporting this company. That is fair. But when the Reform Party is creating policy it always fails to sell its policy in the light of day. In the backrooms or in the dark, if not telling anybody both sides of the issue, they are not reasonably bad ideas from time to time. When we expose the ideas or recommendations of Reformers to the light of day we see that they are pushing other motives. I do not know what relationship anybody has to the company from the Reform riding of Elk Island, but it is another reason people should be aware of in terms of why Reformers would oppose the bill. This is a newspaper story, but the member wants to hear more about how wonderful Reform style government did in privatization in Saskatchewan respecting the Royal Canadian Mint Act.

[An hon. member]

Tell us about the NDP style government in British Columbia.

[John Solomon, NDP, Regina—Lumsden—Lake Centre, SK]

The NDP style government in Saskatchewan and the hon. member from the Reform are doing a fairly good job. They have taken the $15 billion debt of the Reform Party from 1982 to 1991 and have turned it around. They have made it very clear that they will continue to be responsible and accountable for their actions, unlike the Reform style government of Grant Devine.

[An hon. member]

Tell us how they have destroyed the economy of British Columbia.

[John Solomon, NDP, Regina—Lumsden—Lake Centre, SK]

A member of the Reform Party is asking about British Columbia. I would like to know his recommendations on how to manage a provincial economy when the population is increasing over a 10 year period by 85,000 or 90,000 people a year and no additional revenues are committed to infrastructure or to health programs. He would not know about that because he probably cannot count to 85,000 or 90,000. If he did, he would realize that when the population grows by a million over a 10 year period there have to be additional programs, supports and initiatives by government in infrastructure or transportation.

[An hon. member]

We have every socialist in the country feeding off the province.

[John Solomon, NDP, Regina—Lumsden—Lake Centre, SK]

The member from the Reform Party does not know what socialism is because if he did he would not say what he just said.

However, that aside, I am pleased to see the amendments undertaken by the government to retain the power of parliament in this bill. As a result we will be supporting the bill when it comes to a vote.

[Howard Hilstrom, Reform, Selkirk—Interlake, MB]

Mr. Speaker, I will reply to the member for Regina—Lumsden—Lake Centre.

With regard to Reform's economic policy I suggest to the member that in the 1997 election the NDP put out its policy as to the economic conditions in Canada and what its solution was. Reform put out our policies. I see us sitting here with about 60 members after the election and them with maybe 20. The people judged the economic policies of the Reform Party to be far superior to that of the NDP.

The hon. member refers to the Reform being associated with the Progressive Conservative Party of Saskatchewan. My relatives are all from Saskatchewan. He knows very well, if he had done any research and looked at Reform Party policies on the economy and at what Grant Devine did in Saskatchewan, that there is no comparison. He is lying right here and right now when he talks like that.

[The Deputy Speaker]

The hon. member knows that kind of language is inappropriate. I know he will want to withdraw those words at once.

[Howard Hilstrom, Reform, Selkirk—Interlake, MB]

Mr. Speaker, it slipped out by accident and I apologize for that. It is not appropriate language for here.

In any event I would like the hon. member for Regina—Lumsden—Lake Centre to expand on his knowledge of comparison between the Grant Devine Conservative government and the honest economic policies of the Reform Party.

[John Solomon, NDP, Regina—Lumsden—Lake Centre, SK]

Mr. Speaker, I thank the hon. member for Selkirk—Interlake for his question. I am surprised why the member would not understand the history or the implications of what happened between 1982 and 1991 in Saskatchewan under the Devine-Reform-Liberal coalition. I know he would not be aware of it because as an RCMP officer at that time he was all over the country except in Saskatchewan.

[An hon. member]

What coalition was there?

[John Solomon, NDP, Regina—Lumsden—Lake Centre, SK]

The coalition was with Elwin Hermanson, Grant Devine and Grant Schmidt who are all members of the Saskatchewan Party now. They are Reformers and supporters of the Grant Devine regime and were cabinet ministers.

I know this is a sore point with the Reform Party. We have had about 22 elected Reform, Tory, Liberal and officials from that Devine government, that coalition, who were charged for breach of trust and other very terrible things about which the former RCMP officer from Selkirk—Interlake would know more than I. I was just an MLA at that time and not part of the police force. It was his colleagues who investigated these people.

I do not know the number, but I think about 15 of them were found guilty. The Saskatchewan Party is a new party in Saskatchewan made up of Reformers. Elwin Hermanson, the former Reform house leader, is the leader of the Saskatchewan Party and has all these Grant Devine folks in there, those who were not in jail.

They attended a big convention the other day of about 150 people. By the way, on Saturday one of the provincial ridings in my federal district, Regina—Qu'Appelle Valley, had a nomination convention. We had just under 300 at a nomination convention for one provincial riding with only two people seeking nomination. We can tell how powerful the Reform Party of Saskatchewan is in Saskatchewan.

The Reform Party and the party in Saskatchewan of Grant Devine are basically the same. They put forward the same policies, the magic policies of less taxes, more services and more jobs. That is what they promise. Grant Devine did that and the Reform Party did that. Grant Devine was elected, however, and we ended up with fewer jobs, incredulous increases in taxes and very few people working. I believe that was part of the problem.

The Reform Party just embraced this Grant Devine policy. I should not be warning it not to continue doing that. I should encourage it to keep pumping that policy because if it does that it will never get elected. I am very concerned that Reform members do not remember their history. Somebody once said that if we forget the lessons of history we are doomed to repeat them.

I am not a teacher by background, but I think it is really important to remind them of their history. Their history in Saskatchewan is really bad, corrupt and terrible. It has been shown across the province that all the things they have undertaken resulted in fewer people working, higher unemployment rates and higher taxes for people, which resulted in money leaving the province and huge debts left for taxpayers.

We in the west are very worried about that. Yes, the member's arithmetic is right. There were more Reform members elected in the last election than there were New Democrat members, but that is the way it goes. We in this party respect democracy. Being from Saskatchewan, the member would know that there is an old saying that when you throw a rock in the dark and a dog yelps you have hit a dog.

[Rick Borotsik, Progressive Conservative, Brandon—Souris, MB]

Mr. Speaker, I appreciate the comments of the hon. member from the NDP, but I did not hear a lot of relevance with respect to Bill C-41 on the Royal Canadian Mint.

The member alluded to and analysed the Saskatchewan government and how it has been very productive in the province of Saskatchewan. Since we are off on a tangent right now, would the member analyse the two provincial governments, the one of Bob Rae and perhaps the one of Glen Clark?

I understand they were both NDP governments that perhaps had problems with the issues of taxes and job loss and perhaps has a problem right now with a loss of confidence in the voters of those two particular provinces, particularly Bob Rae who unfortunately or fortunately for a lot of us no longer seems to be in the political sphere. Would the hon. member please analyse those two governments?

[John Solomon, NDP, Regina—Lumsden—Lake Centre, SK]

Mr. Speaker, I appreciate the question from the member for Brandon—Souris. He always has some great questions and I think this is a pretty good one.

I can only speak about things that I am familiar with. For example, I know that the NDP government in Saskatchewan did not send anybody to jail, whereas the Reform-Tory coalition sent 18 to jail. That is one example. I guess it is not very good.

The Bob Rae government did not send anybody to jail from its caucus. The Reform-Tory coalition in Saskatchewan sent about 17 or 18 to jail. I may be off by about one or two but it is approximate.

As for the NDP government in British Columbia, none of its officials are in jail, at least yet. The Tories and the Reform in Saskatchewan sent 17 or 18 Tory and Reform MLAs to jail. I guess I can only compare what I know. To me that seems to be somewhat balanced.

I know the NDP in Ontario had a bit of a rough ride. The member for Brandon—Souris would appreciate this immensely because he is the member of a party that had a rough ride in 1993 in Canada. They went from government to two members. He can relate to the anxiousness and the anxiety of the NDP in Ontario.

If we look at the polls the NDP is doing very well across the country. We are leading the polls in Saskatchewan. We are leading the polls in Nova Scotia. We are leading the polls in Manitoba. That is three provinces. We have a government in Yukon. In British Columbia we have two more years to go, and I am very confident the NDP in that province will rebound.

[Ken Epp, Reform, Elk Island, AB]

Mr. Speaker, I really do not have a question but I do have a comment.

This is the House of Commons. It is a place with elected officials. One of the things that really bothers me about this presentation is the implication and innuendo that the member used. It reduces the respect that this place can generate.

For example, I had a number of people from the NDP support me in both the elections in which I ran, including the candidate for the NDP. I do not think he would want me to say that because of the presence of an NDP member on my executive I should automatically be considered a really bad guy. That is my comment. I think the hon. member is out to lunch.

[John Solomon, NDP, Regina—Lumsden—Lake Centre, SK]

Mr. Speaker, I think the member for Elk Island misinterpreted my comments. I did not make any reference to him personally by name. I did not make any reference to his executive. If it has NDP members on it, it has to be a darn good executive in my view.

In debate we have to look at the facts. In Saskatchewan we had a Reform-Tory-Liberal coalition in government that was corrupt, ended up in jail, and they happened to be Reformers.

[Gilles Bernier, Progressive Conservative, Tobique—Mactaquac, NB]

Mr. Speaker, I am pleased once again to be able to speak to Bill C-41, an act to amend the Royal Canadian Mint Act and the Currency Act. I just want to get back to what we are here for, and it is not criticizing each other.

When the minister responsible for the mint first introduced the bill on May 7, I was careful to go through it with a fine toothed comb. I saw many important changes being proposed, but I also identified two items which caused me grave concern.

In the time since I have had a great number of meetings and have done a fair bit of work on the bill so that I am satisfied now that most of my concerns have been dealt with. As a result, I am pleased to say we will be supporting Bill C-41 at third reading.

Today I would like to talk about the process we have gone through to get to this point, readdress my original concern and discuss why I now believe it is important for members to support the bill.

When Bill C-41 was first introduced it contained two provisions that prevented me from immediately endorsing the bill without further study. The first of the changes contained in clause 3 would have stripped parliament of the authority to introduce new coins into circulation or to delete old coins from circulation. It proposed putting that authority into the hands of cabinet and streamlining the decision process.

I have always jealously guarded the authority of the Chamber. Members of the House are the people's representatives.

It is right that having been vested with this authority we should have an important part in the decision making process of government. Unless there is a clear and compelling reason for any power held by members of parliament to be moved elsewhere, I oppose any effort to diminish the authority of the Commons.

This is not an academic discussion. It is very likely that at some point in the near future members of parliament will be asked to consider whether they wish to replace the $5 bill with a $5 coin. It is also quite conceivable that they will have to decide if having a penny in circulation serves any useful purpose or if it should be retired. As it stands now, if the government wishes to take an existing coin out of circulation, or bring in a new coin, it must introduce legislation for consideration by parliament.

As with all bills such as the one before us today, there must be a full public debate with committee hearings and ultimately a public vote before such a change can take place. This bill proposes turning this decision over to cabinet. It would require the minister to give 15 sitting days notice before cabinet makes the decision. However, it would have been powerless to stop any decision the public found undesirable and that is what I oppose. Government works best when it bases its decisions under the full scrutiny of the public eye. It is not pretty at times, but it works.

For example, take the decision to replace the $1 bill with the $1 coin back in 1987. I remember that there was great discussion over the efficacy of having the loonie. On one side of the discussion we had the vending machine lobby and the bus companies which promoted the convenience of having a $1 coin. On the other side was a diverse group of people who were concerned about replacing the dollar for reasons that ranged from nostalgia to concern that pant pockets would have to be reinforced because coins were too heavy. Regardless of what our individual feelings were on that issue, it was right for us to have that debate in the House, the most public of forums. It is right that we should have a debate here if there are to be similar changes to Canada's currency in the future. Understandably, the fact that Bill C-41 would take this decision away from parliament troubles me a lot.

I was fortunate enough to have a briefing on the bill in June by officials from the Royal Canadian Mint, including the master of the mint, Danielle Wetherup. When I asked Mrs. Wetherup why the government would consider removing from members of parliament the power to approve a change in the country's coinage she was able to give me some history behind this portion of the bill.

Apparently, when parliament was dealing with what was then Bill C-82, the act to replace the $2 note with a $2 coin, the master of the mint received some negative feedback from members of parliament on the process involved in approving the new coin. At that time it was in late June. The days were very hot. The government had a very busy agenda. The committee room where the government operations committee was reviewing the bill was not air conditioned.

In the heat of the moment, if members will pardon the pun, and faced with a large number of bills to approve in the final days before the House recessed for the summer, some members of parliament observed that Bill C-82 was not the most important piece of legislation before them. They wondered out loud if there was not an easier way to deal with what seemed to them to be a straightforward change.

Understandably, mint officials made a note of this. When it came time to update the Royal Canadian Mint Act, as is done every 20 years or so, they decided to propose changes to simplify the approval process for changes in coinage in response to suggestions by members of parliament at that time. The result was clause 3, as it appeared in the original printing of Bill C-41. However, members will note that clause 3 has changed.

For reasons that I have already explained, it was unacceptable to me that the decision to change Canada's coinage should have been taken from parliamentarians. Therefore, on behalf of my party I drafted a amendment to leave that decision where it belonged, in the hands of the peoples' representatives.

I shared my idea with Mrs. Wetherup, the master of the mint, on two occasions, during our first real briefing with members of parliament and during the hearings of the natural resources and government operations committee into Bill C-41. Throughout the committee meeting she rightly stated that the final decision as to whether the government would support the amendment rested with the minister. She indicated during our first meeting that since the original idea for clause 3 had come from members of parliament the mint would not oppose leaving the decision making process the way it was if, on reflection, members of parliament believed it should remain that way.

I also spoke to the minister's office and to the critics from other parties about my amendment. I argued the importance of my amendment and said that members of parliament must continue to have an important role in the government decision making process. Apparently they must have found my arguments to be persuasive. When I presented my amendment in committee last Tuesday, it received the unanimous support of the members of parliament present. I acknowledge and thank all members of the committee and the minister for their considered, non-partisan support of my amendment.

Clause 7 is another provision of Bill C-41 that concerned me. It proposes increasing the borrowing authority of the mint from its present $50 million to $75 million. This proposed change troubled me because of a new venture the mint is undertaking in building a new facility in Winnipeg to manufacture coin blanks.

Clause 7 worried me principally because I thought the mint would use this newly acquired borrowing power to finance this poorly thought out venture and put a successful Canadian company out of business. I did not realize at that time that the mint financed this $30 million venture in March and that the building which will house the coin plating facility is nearly completed. It is clear at this point that Bill C-41 has no bearing on the mint's decision to build this new facility. Therefore, I must separate my opposition to this scheme from my position on the bill and evaluate clause 7 on its own merits.

Do not mistake my support of this bill as an endorsement of the mint's decision to get into the manufacturing of coin blanks. I oppose that decision for two reasons. First, the facility will put the Royal Canadian Mint into direct competition with a successful Canadian supplier of coin blanks, Westaim of Alberta. Westaim has supplied the mint with coin blanks for 35 years. It employs 110 people at its plant in Fort Saskatchewan and the entry of the mint into this industry will jeopardize this Westaim division and its 110 employees.

Second, this is a risky venture for the mint to undertake. Because it has borrowed the money on taxpayers' credit, it is also risky for Canadians. There is currently a 30% to 40% oversupply in the world's coin blanks market. If the entry of the mint into this market does not drive Westaim out of business and put its 110 employees on the unemployment line, it could go spectacularly down in flames and take millions of taxpayers' dollars along with it. Industry experts agree that the market for coin blanks will experience a slight blip in demand as the new European currency starts, but it will then continue its steady decline as electronic transactions become more popular and the need for coinage and paper money decreases.

As if poor markets were not enough, the costs of getting the mint into the coin plating business are enormous. The $30 million dollars borrowed by the mint in March is just to build the Winnipeg plant. Start-up costs are substantial for a new competitor in a mature to declining market. The Royal Canadian Mint will have to compete against established, experienced, well-entrenched competitors which have had decades to build their expertise and economies of scale.

For example, consider employee costs. The process of manufacturing coin blanks requires highly skilled workers. There are only two ways to obtain employees such as this. The first way is to spend an extraordinary amount of time and money to train these people. The other option is to hire them away from competitors by offering them more money. Either way, employee costs are going to be higher than those of competitors, and in a commoditized, price sensitive industry this is bad news.

Not only will the mint have to contend with its high cost structure, but like any brand new business it will make many mistakes.

Thus, I fear for the Royal Canadian Mint, I fear for the employees of Westaim and I fear for the taxpayers who are, so far, on the hook for $30 million.

However, I realize now after considerable debate and consultation on Bill C-41 that these are two separate fights. Although I will continue to search for a resolution to the mint's entry into the coin blanks industry, I can happily say that we have won the fight on Bill C-41. Now that the committee has fixed the problem with the bill, it has removed the final obstacles to my party's support.

In closing, I would like to again thank the members of the Standing Committee on Natural Resources and Government Operations as well as the minister for helping to get my amendment approved.

I would like to thank Danielle Wetherup and the other officials of the mint who were kind enough to meet with me on a number of occasions, both privately and publicly, to review this bill and to discuss my concerns in detail.

Although, as I have mentioned, I do not agree with everything the mint is doing, I do agree with the changes to the Royal Canadian Mint Act and Currency Act as proposed in this bill.

I have no hesitation in supporting this bill and I would urge other members to do the same.

[Werner Schmidt, Reform, Kelowna, BC]

Mr. Speaker, I would like to congratulate the hon. member who just entered the debate. I thought his analysis of the function of the mint was very interesting and very good.

However, could he address the question of whether he finds his support of the bill, generally, not to be inconsistent with his criticism of what the mint is doing?

Would he agree that clause 2 of the bill, which amends section 4 of the Royal Canadian Mint Act, expands rather dramatically the power of the mint? It allows precisely what he just said in his speech. He disagrees with what the mint is doing, mainly getting into the coin plating business. This bill allows that to happen and gives the powers to the mint to do precisely that.

While he may disagree with the mint doing that, the legislation being proposed permits the mint to do precisely what he says he does not want it to do.

That is exactly the point and why I object to that clause. The hon. member, on the one hand, says he disagrees with that; on the other hand, he supports the amendment. Could he clarify the apparent contradiction here?

[Gilles Bernier, Progressive Conservative, Tobique—Mactaquac, NB]

Mr. Speaker, I want to thank the hon. member of the Reform Party for his question. It is a very good question.

I have been in business for over 20 years. I said from the start that government should not be in business. The mandate of government is to manage taxpayers' dollars, and I have not yet seen this government do that.

When there is a bill in front of the House, members do not have to agree with everything in the bill. They can work hard along with their party colleagues to try to make amendments and to change some provisions that would make the bill acceptable. That is what I did.

There are some flaws in the bill. However, being 43 years old, I believe in a life of compromise. That was the way I was brought up. My dad always told me that if someone wants to get a little in life they have to be able to give a little. I strongly believe that.

It is true that there are still some flaws in the bill. However, just because there are a few flaws here and a few flaws there, whether we vote for it or vote against it, the bill is going to pass anyway.

I fought to get the amendment I wanted and I won the amendment. The amendment is good for members of parliament because it keeps the power here in the House of Commons and it is good for Canadians in general.

[Carolyn Parrish, Liberal, Parliamentary Secretary to Minister of Public Works and Government Services]

Mr. Speaker, I have a comment to make. I would like to congratulate the member opposite. It is not often that someone gets to make their mark in this place. The member has made his mark today as well as at committee. I think he has done a very reasonable job.

As the member just explained, there are parts in the bill he does not like, but he got in there and negotiated rather than just being negative. I really appreciated it and I would like to express the appreciation of the minister on his co-operation. Congratulations.

[Gilles Bernier, Progressive Conservative, Tobique—Mactaquac, NB]

Mr. Speaker, I just wanted to comment on what the hon. parliamentary secretary said. I am very flattered. It is not often that this happens in this place.

I believe that regardless of which political party we are from, we were sent here by Canadians to represent Canadians. I am here to represent the people of Tobique—Mactaquac in New Brunswick. In my portfolio of public works and government operations, I am here to represent all Canadians, whether it has to do with Canada Post or the Royal Canadian Mint. It is one of the biggest departments in Canada. It includes Canada Mortgage and Housing Corporation and a lot of others.

Whether one is a Reformer, an NDP, a Bloc, a Conservative or a Liberal, we have to work together in the House to make things happen for Canadians. That is what Canadians deserve and that is what we have to do for them. I hope by the time the next election comes around people will see the work that I do and they will elect more Conservatives.

[Rob Anders, Reform, Calgary West, AB]

Mr. Speaker, I have been listening to all of this debate today. It shows how insidious Ottawa is that people can come forward with a bill that competes with the private sector, uses taxpayers to do it, and people in the House will stand and support it and help to shut down private businesses.

This is not the only time this has happened. Canada Post uses its dollars, the dollars that hon. members and other taxpayers will spend in terms of regular mail, to cross-subsidize and compete against people in the courier industry and against people in the private sector who deal with e-mail when Canada Post delves into that for the first time.

Once again we have the situation of the mint using taxpayer dollars to edge out private competitors. That is the type of wrong-headed philosophy that has got us into the debt that we have. As well it has been responsible for limiting and curtailing business possibilities and entrepreneurship.

I do not know how people can reasonably stand and be in favour of edging out private business.

[Gilles Bernier, Progressive Conservative, Tobique—Mactaquac, NB]

Mr. Speaker, again the hon. member from the Reform Party has a good question but he is way off base. He does not know what he is talking about.

The reason I am saying that is the Royal Canadian Mint is building a plant in Winnipeg for a price tag of some $30 million. The mint is not using taxpayers' money. It has borrowing authority. It borrows from banks. A person who wants to buy a car does not come to the government, that person will go to the bank. That is what the Royal Canadian Mint did.

The mint is asking parliament to increase its borrowing authority from $50 million to $75 million. The plant it is building in Winnipeg was started last March, before presentation of this bill. The mint went to wherever it went and borrowed the money. It is not taxpayers' money. There is a cliche in that. If the Royal Canadian Mint makes money, Canada wins. If the Royal Canadian Mint, which is a crown corporation, loses money, the government is liable and the taxpayers are going to pick up the tab. The money used to build that plant in Winnipeg is not taxpayers' money, it is money that the corporation borrowed from an outside source.