Debates of May 13th, 1998

Budget Implementation Act, 1998

[Keith Martin, Reform, Esquimalt—Juan de Fuca, BC]

Madam Speaker, it is a pleasure today to speak Bill C-36, the Budget Implementation Act.

I will not go over the litany of problems we have historically had in our country. I will not go over the 30 years of mismanagement of our finances by previous Liberal and Conservative governments. My colleagues have outlined that specifically and very eloquently.

I look forward to constructive solutions that the government could have employed but has not. It can employ them in the future if we are to create a stronger more stable country, a stronger more vibrant economy, and save our social programs, that social net which protects many underprivileged people in our country.

It is instructive for us to look at real world experiences. We should look at other countries, other provinces and other states that have employed very specific solutions to problems that have affected them and are affecting us. Let us look at our own country, at Ontario and Saskatchewan.

I lived in Ontario for 18 years. It was very sad to see the economic devastation that took place with respect to the huge debt load the NDP government foisted upon the people of Ontario at that time, the high tax rates that crushed the life out of the economy, and the egregious rules and regulations that prevented the Ontario economy from being the lion it could be.

The current government took the bull by the horns. It substantially cut taxes. It streamlined and eliminated government spending, not by doing fancy accounting or changing accounting practices but by cutting the fat off the government beef. It also eliminated rules and regulations that tended to constrict and restrict the private sector. What has happened? Ontario is engaging in a boom. Ontario has had more money coming into its coffers. This is very interesting.

Those who slandered the Ontario government for engaging in its policy of fiscal conservatism, tax cuts and diminished government spending said that it would gut social programs. What has happened to health care? In spite of a $2.7 billion cut in health care transfer payments to Ontario, the Ontario government has had an extra $1 billion to spend on health care. That is very instructive because it dispels the myth that some would put forth that if taxes are cut social programs are gutted. That is not true at all. If taxes are decreased what happens? It causes investment to go into the province. It causes a revamping and a resurgence of the private sector. By doing so the amount of money in the public coffers is actually increased.

Mr. Mulroney did it in 1992. He lowered taxes. What happened? More money went into the public purse. As a result he could have spent more money on public social programs but instead he increased taxes.

We have been pushing forward a very constructive plan. We have given it to the government. To some extent the government has pursued it and should be congratulated for balancing the budget. We have been telling the government to do this for many years.

It is also instructive to look at Saskatchewan. An NDP government in Saskatchewan woke up and said that it should look at what works, at the reality of the late 20th century economies of the world and becoming competitive. The NDP government took a very balanced approach. It listened to the Reform Party and said that it would cut taxes and balance the budget. It wanted to give people more money in their pockets, to have a balanced budget, to cut taxes and to spend intelligently doing what governments do best.

That government invested in infrastructure, invested in education and put money where governments should put money to give people the tools to take care of themselves.

Historically there has been a rule among Liberal thinkers that government can take care of us better than we can take care of ourselves. We obviously do not adhere to that rule. We believe the government's role is to give people the tools, the power and the ability to take care of themselves. Governments should also take care of those people who cannot take care of themselves. Those two can actually work together. Those two are actually two halves of the same whole.

If we are fiscally irresponsible we are socially irresponsible. By being fiscally irresponsible and spending more than we take in, we compromise the social programs we profess to help by spending more on those programs than we take in. By elevating debt and interest payments we diminish the amount of money available to spend on those programs. We do not compromise the rich because they can go wherever they want. We compromise the poor.

As my colleagues in the Reform Party have mentioned, the government is saying that it will take care of people instead of people taking care of themselves. That is why the government has increased CPP payments made by individuals by a whopping 75% for every working man and woman in the country. What does that do? It takes money out of people's pockets and prevents people from taking care of themselves. It does not work.

If we look at New Zealand we see very clearly that approach does not work. In every country that has tried to do this it has resulted in abysmal failure.

Great Britain and Chile have taken a long pragmatic look at their pension plans and social programs and have put them on firm financial ground. They have managed to privatize them while still ensuring that all individuals will be taken care of. No one will go without. Those most socially deprived in those countries will be taken care of. If they did not do that those in the lowest socio-economic areas would be compromised the most.

We do not try to devise grandiose new plans for the problems that affect us. The problems that affect us in Canada affect other developed nations all over the world. If we were to take those solutions and employ them in Canada we would see a national growth rate that could rival the provincial growth rates we have seen in Ontario and Saskatchewan.

If one wants to look at the other side of the coin one need only look at my province of British Columbia to see what high tax rates, high debt loads, egregious rules and regulations and labour laws that constrict and restrict the private sector do to an economy.

British Columbia, arguably the richest province within the country, has an enormous amount of natural resources and a well trained and educated workforce. It is actually 10th in the nation in terms of development. Who would have thought that British Columbia would be 10th, the bottom of the barrel, in economic growth for two years running?

The reasons for it are very simple. I implore the government to take a look at what we have been trying to convince it to do for years. The member for Medicine Hat, our finance critic, has been very eloquent in suggesting this to the finance minister. Why not adopt most of these solutions when they have been proven to work all over the world?

We can take a look at the United States, for example the state of New Jersey which has employed constructive solutions to its problems. It has right to work legislation. It has used tax havens. It has decreased taxes and eliminated egregious rules and regulations.

What happened to the individual worker there? What happened to the person who works day in and day out slogging on the streets? Their incomes were increased by over $2,200 per person. This meant more money in their pockets and better health and welfare for every individual in those communities.

I implore the government to adopt the policies put forward by the Reform Party. They have been used in New Zealand, the United States, in Ontario and Saskatchewan. Decrease taxes. Decrease debt load. And for heaven's sake remove the egregious rules and regulations that constrict the private sector. In doing so we would provide for better socioeconomic circumstances for all and we would save our social programs.

[Paul Mercier, Bloc, Terrebonne—Blainville, QC]

Madam Speaker, my colleagues in the Bloc Quebecois who spoke before me had an opportunity to express all of their objections to the millennium fund and, since the subject provided lots of fodder, they had lots to say.

To be objective, all of this should be weighed and some acknowledgement made of the fund's positive aspects. The millennium fund to its credit advances the cause of sovereignty. It will bring home the truth to Quebeckers that the federal system, regardless of the party in power, will never change, that it is incorrigible.

We sovereignists know that many Quebeckers are not sovereignist because they still hope that the federal system will change. Now, the pretentious millennium fund, which is infringing provincial rights, has revealed the true colours of the federal government, and we hope that many Quebeckers, who up to now have not understood, will now understand that federalism, regardless of the party in power, will not change.

Such disdain for the people of Quebec to have thought that they would swallow it holus-bolus because it meant money.

Madam Speaker, you are as familiar with the Bible as I am. You know that Esau gave up his birthright for a dish of lentils because he was hungry. We will not do the same for the dish of lentils the millennium fund represents. We in Quebec have not stopped advocating and claiming provincial rights because the federal government is infringing them.

It was wrong to think that we would give up our rights for a dish of lentils. I understand that it is a rude awakening for the Liberals to discover that their proposal did not slip through and that Quebeckers are protesting and indignant at this unfair fund.

The neat thing in all this is that it is not just the sovereignists who are complaining. All the various communities in Quebec are protesting this fund. I have a few examples. First those from the educational community, obviously.

The CEQ stated that the millennium fund was not the way to provide young Quebeckers with improved access to a university education.

Let me give another example among many. The Fédération des étudiants des collèges du Québec said that student debt was a big problem, but that the millennium fund was not the answer. We should not forget that this fund was supposed to lure young Quebeckers, most of whom are sovereignists. Obviously, it did not work.

I could go on and on. We also have the general manager of the Canadian Institute of Adult Education. Here is what he had to say: “The federal government's budget and tax decision over the last few years have contributed to the erosion of the standard of living of students and of the provincial public education systems. The package contained in the last budget may well go against what provincial governments have been trying to do”.

I could give so many examples, but the one that takes the cake comes from a federalist, John Trent, from the University of Ottawa. He told us: “The millennium fund will necessarily be a source of federal-provincial duplication and overlap with existing programs. Bill C-36 which provides for the millennium fund is a direct attack against the principles of federalism.” That is a federalist talking. The millennium fund is an abuse of the very principles of federalism. It shows contempt for the parliamentary resolution, proposed by the Prime Minister, to recognize the distinct nature of Quebec society. One of the advantages of the millennium fund is that it has shown people that this distinct society resolution is pure window dressing.

The educational sector is not the only one putting up a fuss, so is the business sector. This is worth noting. The Finance Canada experts have estimated that the administrative costs for the foundation will be around the 5% mark, or twice what they are in Quebec. The comment by the Alliance des manufacturiers et exportateurs du Québec was “Duplication must be avoided, and the millennium fund is definitely one example of this. Existing provincial structures must be taken advantage of.” That is the reaction of the business sector.

As for the Canadian taxpayer, the comment by Walter Robinson of the Canadian Taxpayers Foundation was that this showed “contempt for accounting standards”. It is unbelievable. Need I go on?

The arrogance of Ottawa's desire to trample over the rights of the provinces is nothing new, but until now Quebec had managed to block it as far as student loans were concerned. Earlier on, one of my colleagues recalled that, back in 1964, the Pearson government proposed student loans for which it would cover the interest. In response, Mr. Lesage, who was not a sovereignist, said that Quebec would have to go to court in order to have its constitutional rights respected in this matter. Mr. Pearson then had to acknowledge that, if a province preferred to have its own loan program, it would be entitled to an equivalent amount in compensation. It seems to me that the federal federalists were brighter than they are now.

This time, the scandal is even greater, because it comes in the wake of cuts to education which have forced the provincial government to slash budgets, particularly those allocated to universities and colleges, which have done them real harm. The Liberals have, therefore, cut provincial education budgets, to then use the money merely to increase their political visibility through the millennium fund, which does not meet any real need in Quebec. This is outrageous. The Liberal motto is “Make political hay while pretending to serve the public”.

This arrogant government, with its contempt for provincial jurisdictions, thought it could once again pass off as a service something that was totally focussed on gaining political popularity. It did not work and, as I have said, it will help show Quebeckers that the federalist cause is no longer sustainable. The arrogant, authoritarian, overbearing federal regime, which is also disrespectful of provincial areas of jurisdiction regardless of which party is in power, is simply hopeless. Thanks to the millennium fund, more Quebeckers than ever now understand that there is but one solution for Quebec, and that is sovereignty.

[Rahim Jaffer, Reform, Edmonton Strathcona, AB]

Madam Speaker, on behalf of my constituents in Edmonton—Strathcona and on behalf of every Canadian taxpayer, I am pleased to rise to speak against Bill C-36 concerning the implementation of many of the recent announcements made by the government in the 1998 budget.

My colleagues have dealt thoroughly with this legislation in committee. I would like to address only the Group No. 1 amendments concerning the millennium fund.

As this House is aware, the passing of this act would bring into effect the much talked about Canada millennium scholarship foundation. This fund concerns me for a number of reasons, the first of which has nothing to do with the world of budgets and finance at all.

Education is an area of provincial jurisdiction. Any further meddling by the federal government only helps to enhance the frustration felt by our provincial partners about the Canadian federation.

This point is important because the millennium fund will be more than just another ineffective and wasteful Liberal policy. It will be a constant reminder to our friends in Quebec, Alberta and elsewhere that this government refuses to recognize constitutional division of powers.

I recall very well the Bloc supply day motion which opposed the millennium fund because it violates provincial jurisdiction. There were aspects of the motion that were admittedly objectionable to the Reform caucus, but I share the sentiment felt by my colleagues in the Bloc that the federal government has once again overextended its reach.

I would also suggest that the members of the Bloc, like the members of the Reform caucus, are no less concerned about the quality of education than the Prime Minister. They simply appreciate that the federal government should respect provincial jurisdiction. They also understand that the provincial governments are better able to administer programs than is a distant and out of touch federal government.

The premiers of this country are united in their support for a rebalancing of powers that better reflects the original constitution. Yet the federal government refuses to respect this consensus.

I would recommend that if the government is interested in solving the national unity problem, it should look at the new Canada act put together by the Reform caucus. This act embodies many of the concerns felt by our premiers and is a blueprint for positive change.

I mention this to illustrate a point. There are consequences of bad policies which are not readily apparent but that must be addressed fully. We cannot continue to ignore the delicate political reality in this country.

The millennium fund must be opposed because of the potential damage it will do to intergovernmental relations. The Prime Minister is not concerned about national unity or constitutional matters. He is concerned about his political legacy.

The millennium fund will provide the Prime Minister with a legacy, but not for being a champion for higher education. Our Prime Minister will instead join the long list of status quo federalist politicians who refuse to listen to our first ministers who are calling on this government to get out of areas of provincial jurisdiction.

My second concern with the millennium fund is one that has been addressed many times. It is a concern I alluded to only minutes ago. This fund, simply put, will not be effective in improving the financial situation for Canadian students.

Even after billions are spent, 90% of Canadian students will never see a penny of this money. They will face the same financial constraints they always have. If the federal government was concerned about education, it need only to reinvest money in provincial transfers for education. Maybe it could look at such things as an income contingent student loan plan which would ensure adequate funding for students. Or maybe the Prime Minister could work toward building a partnership between educators and industry.

My point is that the possibilities for helping Canadian students are endless. We must look for creative ways to drive down the cost of education and to ensure access to funds for students in need. However the millennium fund is clearly not the way to accomplish this.

While the Reform caucus is opposed to the fund, we have recommended some changes that will improve the current legislation.

First, the millennium scholarship fund should be subject to the Access to Information Act. This is fair. It is hard to argue why the fund should be shrouded in secrecy. If the government is confident the money will be properly spent, it should embrace the opportunity to make the fund open to scrutiny. Second, eligible institution should mean an institution that is a public or private post-secondary educational institution in Canada that is designated for Canada student loan purposes and grants degrees, certificates or diplomas.

I think this amendment satisfies the principle of equality and fairness and should be considered by all members of this House.

Third, it is our recommendation that the provinces and territories be allowed to opt out and enter into agreements with the foundation to use their portion of the fund to suit their post-secondary priorities with no strings attached.

I would be very surprised if Liberal members of this House opposed the amendment, as it is in keeping with Liberal policy on the procedure for implementing federal programs in areas of provincial jurisdiction where the provinces are reluctant to allow federal intervention. This is a part of Liberal policy on national standards, so I expect the government's support on that amendment.

Finally, we recommend that an appeal process be established to consider grant applications which were denied or rejected. Again, this is a reasonable amendment that entrenches a provision for fairness.

The millennium fund will not help Canadian students struggling to pay their way through university. It is a bad program that should be scrapped. However, if it must remain the recommended amendments made by my hon. colleague from Medicine Hat should be given careful consideration and support.

This is only one of the issues that have put a black mark on Bill C-36. For this reason I will join my colleagues in the Reform caucus in opposition to it.

[Libby Davies, NDP, Vancouver East, BC]

Madam Speaker, I am pleased to have this opportunity to rise in the House to speak about Bill C-36, the budget implementation act. There has been much debate about this bill already in committee and certainly in the House coming out of the budget that was presented. We have heard a lot of discussion about the millennium fund and whether it will improve the situation for post-secondary education.

Having looked at the document in committee where some of this discussion has taken place it is quite clear that post-secondary education is in a very deep crisis. One of the reasons that we are facing a crisis with post-secondary education is the retreat of public funding to our post-secondary educational facilities.

Although we have heard a lot of talk about the millennium fund, this grand fund of $2.5 billion, the reality is this fund will not even begin until the year 2000 and will in reality help only about 7% of students.

By the time the fund begins in the year 2000 we will have experienced cuts of around $3 billion from post-secondary education. So it becomes very clear that the millennium fund does not even come close to replacing and compensating for the massive drain and cuts we have experienced in post-secondary education.

This is causing enormous concern in terms of where public policy is going but also for the impact it is having on the lives of individual students. It is because of the retreat of public funding that tuition fees have skyrocketed. We have seen an increase of 240% in tuition fees over the last 10 years. We have all used the figure that average student debt is now at $25,000.

There is a direct relationship between the pain and the debtload students are facing and the retreat of public funding as a result of a loss of transfers from the federal government to the provincial government. There is absolutely no escaping that fact, and the millennium fund cannot make up and does not make up for the loss we have experienced.

In addition, the other really serious situation that the millennium fund creates is it begins to take us down a slippery slope of privatization.

New Democrats are very concerned that with this foundation, a private foundation being set up which will have representation from corporations in the private sector, there will be less and less control in terms of public administration and public direction of our post-secondary educational facilities.

For that reason alone, this fund should be rejected and we should go back to the drawing board and say that the real issue here is to support publicly administered, publicly accessible post-secondary educational facilities.

We have already seen examples in Canada where the corporate influence on board of governors of universities and colleges and now on this millennium fund is beginning to have an impact on curriculum of deregulation of tuition fees and deregulation of programs. All these things are creating an environment where there is increasing privatization and corporatization of our post-secondary educational system.

The millennium fund is a part of that direction and for that reason must be rejected.

The NDP believes very strongly that we must have an open discussion with the provinces because education is a provincial jurisdiction. Members of the Bloc Quebecois have pointed out very well the huge concerns they have with the millennium fund. It is not only in Quebec. This is echoed across the country in terms of unilateral decisions being taken by the federal government with regard to post-secondary education and the establishment of this private foundation with no consultation whatsoever with provincial jurisdictions.

The NDP believes we need to have leadership from the federal government. It needs to be the kind of leadership done in co-operation and collaboration with provincial jurisdictions to design a national program of national grants that deals with different provincial jurisdictions and different provincial contexts where there is a clear understanding and a principle that accessibility for all students in Canada is a national standard.

The NDP believes that is the starting point of ensuring that our post-secondary education system is protected and strengthened and not destroyed as we have seen over the last few years.

Canada is one of only two OECD countries that do not have a national grant system. We need to ensure federal funding is provided in co-operation with provincial governments to establish a national system of grants.

In my province of British Columbia as well as in the province of Quebec there has been leadership shown in terms of trying to keep education accessible for students even in the face of massive cutbacks.

In British Columbia we are now in the third year of a tuition freeze. That has been very difficult to accomplish given the massive cutbacks we have experienced in transfers from the federal government.

The NDP is calling on the federal government to show the leadership that is necessary. We have heard a lot of rhetoric and concern expressed by government members about the level of students debt, but there is nothing in this bill that will really alleviate the pressure and the huge debtload now facing students.

I have talked to students in my riding and here in the Ottawa area and have been really shocked to hear stories of students who are now facing debts of $40,000, $50,000, $60,000. What kind of way is that to start a life?

We need to go back to the drawing board and say clearly that this millennium fund is taking us down the wrong road. We need a national grant system. We need accessibility. Most important of all, we need restoration of federal funding for post-secondary education in Canada.

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

Madam Speaker, it is with great interest that I wanted to speak to Bill C-36, particularly with regard to the millennium scholarship fund. There are many reasons for this: first, because I am a father; second, because I worked in the area of education; and third, to show that, once again, we are duplicating structures.

I will always remember the farmer who, in 1970, convinced me to join in the fight for Quebec's sovereignty. He lived on concession 7 in a small community in my riding. His argument was quite simple.

“Jean-Guy, take a good look in my barn”. He had a magnificent herd of Ayrshire cows. That dairy farmer had a mixed quota: 50% fluid milk and 50% industrial milk. The part of a cow's production used for industrial milk was under federal jurisdiction, whereas the part used for fluid milk, the kind we drink every day, was, and still is, under Quebec's jurisdiction.

For the same cow, two agriculture ministers: one for industrial milk and one for fluid milk. All that for the same dairy producer—

[An hon. member]

And the same cow.

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

And the same cow, of course.

This government is doing the same thing to our students. The same student will have to send two applications for a loan or a scholarship: one to the Quebec government and one to the federal government. We are talking here about the same taxpayers, the same parents and the same students.

A few moments ago, I heard my friend, the member for Laurentides, say that 5% of the $2.5 billion will be used to pay employees, to pay for the forms, and so on. That means $1 out of every $20. If the federal government really wants to help our students, why does it not allow former students who are starting to repay their student loans to deduct the interest on their loans from their income?

If it were so generous, if it really had the interests of young Canadians and young Quebeckers at heart, it would accept our suggestion immediately and would gain from this situation that opposes it to the Quebec government. In the early 1960s, under the late Jean Lesage, whom I had the pleasure to work with in the Liberal Party of Quebec, an honest man who worked for the well-being of his community, the well-being of Quebeckers, the Government of Quebec established a loans and grants program in co-operation with the federal government. It is working exceptionally well.

Our students are leaving universities with a bachelor's degree, with an average debt of $11,000, while students outside Quebec, elsewhere in Canada, have an average debt of $19,000 or $20,000.

In Quebec, tuition fees are almost half those outside Quebec. It is not surprising that our English universities are filled with students from Ontario or elsewhere.

Duplication creates unwarranted and unacceptable expenses, and the result is, in Canada, we pay 27 % more taxes of all kinds than in the United States for equal services.

A second point that also hurts and offends students, the future recipients of these scholarships, and they demonstrated this in all the universities and cegeps of Quebec, is the way the federal government is getting ready—

[The Acting Speaker (Ms. Thibeault)]

I am sorry to interrupt the hon. member. You will have about five minutes when the debate on this bill resumes.

It being 5.30 p.m., the House will now proceed to the consideration of Private Members' Business as listed on today's order paper.

Bank Act

[Réal Ménard, Bloc, Hochelaga—Maisonneuve, QC]

moved that Bill C-289, an act to amend the Bank Act and the Statistics Act (equity in community reinvestment), be read the second time and referred to a committee.

Madam Speaker, you will understand that I have been waiting for this moment for a long time, since I introduced this bill in November. This is a somewhat special day, because it is also my birthday.

[Some hon. members]

Hear, hear.

[Réal Ménard, Bloc, Hochelaga—Maisonneuve, QC]

I am not saying this simply to get attention, I just think this might be my lucky day and that my luck will benefit poor communities.

Let me start off by saying that this bill is a concrete step against poverty. As MPs, we all know there is a direct link between poverty and access to credit.

In the United States, a country where, we must admit, capitalism and free enterprise are thriving, they have had since 1977, that is for the past three decades, the Community Reinvestment Act, which makes it compulsory for banks to invest in disadvantaged communities.

What is this all about? The six major chartered banks listed in schedule I of the Bank Act have the privilege to earn big profits using the money deposited by their clients. What we are asking for is some balance between the deposits they receive and the loans they make to the community.

We are not challenging the fact that banks are trying to make profits. If they make money by playing the bond market smartly or making a wise use of any other financial vehicle, we understand. What we do not understand is that in 1998 banks are no longer present in poor communities.

Hochelaga—Maisonneuve is a case in point. This once thriving blue collar community is now hurting. Elderly people there tell me that in the 1960s there were 10 banks in their community. I challenge you to guess how many there are today. There are two. That is what has to change.

The banks, which are making record profits, have entered the global market, with 40% of their assets coming from foreign investments at the present time. It is not right that banks are not present in communities needing their help.

In a community such as mine, Hochelaga—Maisonneuve, housing is where banks could invest and get involved. Eighty-six per cent of my constituents rent their accommodation. The banks' requirements are such that it is extremely difficult for anyone wishing to buy property to get a loan. This must end.

In the United States, the equivalent of our superintendent of financial institutions tables an annual report in Congress on the efforts banks make in disadvantaged communities. This report looks at loans made for community development purposes, loans to small business and loans to individuals.

In the case of loans to individuals, there are figures for low, middle and high income earners, by urban census area.

Here is what I am asking of all parliamentarians today. At a time when the Bank Act is being debated, at a time when a five-year review is obligatory, at a time when the Minister of Finance has set up a task force, is it not incumbent upon us as parliamentarians to send a very clear message in the end to the effect that we want the philosophy behind the Community Reinvestment Act to be part of our concerns as parliamentarians?

This is not a partisan issue because, regardless of which side of the House we are on, there is always a need for banks to get involved in the community. The Reform Party and the Bloc Quebecois each represent a part of this constituency. The same is true of the New Democratic Party and the Progressive Conservative Party, not to mention the government party.

Why should banks get involved in their communities? The most obvious reason is of course that they can afford it. My bill does not call for this social involvement of banks across Canada to take a specific form. Within each of their communities, banks should work with industry, community groups, elected representatives, the bone and sinew of the community, to ensure that investments can be made which will benefit community development. That is the philosophy behind community reinvestment.

Let me remind you that, in 1992, banks made approximately $2 billion in profits. This year, profits will likely be closer to $8 billion. So, we are in a situation where, as I said, the effort asked of banks is not an unreasonable one.

Banks should get involved in their communities because they operate in an extremely sheltered environment. The socio-economic studies chair at UQAM reported that 90% of loans issued by banks are secured by one level of government or the other and that 92% of all banking activities in Canada are conducted by the six major schedule I chartered banks. In a word, banks make profits and operate in a sheltered and concentrated environment.

The good news for bank shareholders is that retained earnings are higher than they have ever been in recent years. The retained earnings of banks have grown by 18% per year. Few industries in our society can match that.

UQAM is a breeding ground of ideas, which has enlightened the Quebec society. A good friend of mine, whom I wish to mention in passing—his name is Dominic Peltier-Rivest—is a professor of economics at UQAM and he supports my bill, which is comforting to me. I would ask my colleagues to some enthusiasm about this.

[Some hon. members]

Hear, hear.

[Réal Ménard, Bloc, Hochelaga—Maisonneuve, QC]

Also, the socio-economics studies chair at UQAM has revealed, along with banking specialist professor Bernard Élie in his latest book, available from the Presses de l'Université de Montréal for the modest sum of $28, that the banks are getting rich off people's savings.

Every day in Canada, 2.5 million transaction slips are churned out by automatic tellers, and the banks get 50 cents for each transaction. Imagine, a person cannot even take money out of his own account, his own independent income, without the banks charging for the transaction.

It cannot be repeated enough, we parliamentarians must tell the financial institutions, the chartered banks, that they have to get involved in disadvantaged communities, that they have to do so because they can afford to, and because they receive a lot from the community by virtue of their protected situation, so it is the least they can do.

To give some examples, once again in the United States, the Community Reinvestment Act has been in force since 1977 and so we can see what the effects of such an arrangement can be. I do not want to talk about coercion here, we do not see a bill of this kind as compulsion. It is a bill that will clarify the framework within which the banks can act in order to get involved in their community.

As you know, in recent years the Hispano-American community and the Afro-American community have seen their access to credit improve by 30%. That is, of course, understandable. When a bank is in a predominantly black community, efforts will be expended to ensure that this community has access to personal loans and to mortgage money. This is possible because there is an evaluation of banking business. Bank involvement is assessed. The monitoring agency makes reports and the consumers and American consumer groups follow those reports.

The following are a few examples. In some American states, there are special accounts just for people who write a limited number of cheques. Some states have said that, in the spirit of the Community Investment Act, a certain number of free cheques will be allowed. The banking institution will process a certain number of cheques without a service charge.

I will quote an example from New York State. As the member for Quebec, who has always been sensitive to these issues, knows, some communities passed rules making it impossible to freeze a client's account for more than two banking days. This is something important which comes from the Community Reinvestment Act.

More important yet, as I was saying earlier, in an area like Hochelaga—Maisonneuve, 86% of the population lives in rental accommodation. If we do not help them a bit, and God knows banks are not easy to deal with in that respect, they will never own a home.

Let me give you another example. In a number of American states, banks absorb part of the mortgage-related costs such as the appraisal, title search and credit rating costs.

You will no doubt agree with me, Madam Speaker, that all this is very reasonable. There is nothing outlandish about this. There is nothing in the examples I just gave that is not consistent with what banks are all about.

Is there anybody in this House who believes that, if we leave the banks to their own devices, they will voluntarily invest in disadvantaged communities? Certainly not. As law-makers, we must send them a very clear message and tell them exactly what we expect of them, regardless of our political affiliation. Whether we belong to the government, the NDP—of course, much to its credit, the NDP has a long history of social action—the Reform Party or the Conservative Party, we must tell banks now that we will no longer tolerate their being absent from large communities.

I recently gave a press conference with the bishop of Rimouski. He is highly respected in his community; he received a classical education and he is an extremely sensitive man. He told me that, just as in Hochelaga—Maisonneuve, banks have deserted his community. I have to say it, I want this to be very clear, it is the main thrust of the bill before us today.

For the rest, I can only hope. This bill is very close to my heart. I want to get this thing going because I know that several other parliamentarians are sensitive to this problem. I want to use my colleague from Brome—Missisquoi as an example, because he has also introduced a bill to better control bank fees, to ensure that banks will have to appear before a committee to explain any fee increases and also to establish the appropriate regulations. I raise that point because there are obviously, in every political party, members who could work on this in a non-partisan caucus.

Imagine for a minute how strong we would be in this House if we were to decide to review the Bank Act and address the issue of the operations of the banks and our expectations in this area in a non-partisan way. We would work as parliamentarians in a non-partisan caucus, where all members who are concerned about this issue would represent their parties and give their best for greater social justice.

I see that my time is running out. I just want to stress that this is a very important bill for me and I am very proud of it. I am also extremely moved by all the support my caucus colleagues gave me. As far as I am concerned, this battle will be over only when this bill is passed.

[Tony Valeri, Liberal, Parliamentary Secretary to Minister of Finance]

Madam Speaker, I will begin by making it clear that the government fully supports the principles of community investment.

We are also committed to ensuring proper accountability and transparency of the banks' small business lending activities. We will continue to challenge the banks to do a good job of meeting the needs and in particular the credit needs of consumers and small businesses across Canada.

It is also important to note that the Task Force on the Future of the Canadian Financial Services Sector is examining the responsiveness of financial institutions to community needs as part of its work. Consequently we believe that it is appropriate to wait for the task force views before deciding whether any further action is required.

The issue of community reinvestment involves a number of important considerations. At the end of the day the task force will need to assess whether there is a need for a more focused approach to community investment by the banks. There may be a number of models that would have to be carefully considered. The government's primary task, should it decide to move forward on this matter, is to ensure that the model chosen will accomplish specific policy objectives in an efficient manner.

Bill C-289 represents one approach to community reinvestment. While the bill's provisions are intended to promote equity in community investment, it contains some elements that could have unintended negative impacts.

Bill C-289 appears to be loosely modelled on the American community reinvestment act, legislation that was implemented in the U.S. in response to a unique credit discrimination problem. This type of credit discrimination does not exist in our banking system.

It is important to recognize that the CRA was introduced in the U.S. during the 1970s to discourage financial institutions from red lining inner city areas, that is, taking deposits from the entire service area but not lending in certain neighbourhoods. This practice is believed to be the primary factor underlying the transformation of many U.S. inner cities into urban ghettos.

While the CRA has been useful in raising U.S. lenders' awareness of their lending patterns, it remains unclear whether its benefits, primarily social, outweigh the regulatory costs. This legislation has been criticized for imposing cumbersome and expensive data reporting and record keeping requirements on both the government and regulated institutions.

Bill C-289 will require Stats Canada to produce estimates of monthly unemployment rates for each federal riding. Statistics Canada has estimated the initial implementation cost would be $15 million. The ongoing annual cost of the monthly labour force survey would mushroom to $40 million, triple the current cost. We would want to explore whether there may be a more cost efficient method of designating disadvantaged communities and establishing stress measurements.

Under the provisions of the bill, branches of schedule I banks located in designated disadvantaged federal ridings would be required to produce detailed lending statistics for those specific areas. Disadvantaged ridings would be defined on the basis of the unemployment rate within the riding. However the proposed criteria that would be used to assess whether a riding is disadvantaged is problematic.

Any federal riding having an unemployment rate equal to or higher than the national average unemployment rate would be designated as disadvantaged. Furthermore a riding's monthly unemployment rate need only equal or exceed the national rate once during the preceding year to be designated as disadvantaged. Such a loose definition goes far beyond capturing those ridings with chronic unemployment problems.

Moreover there is a problem with the definition of community in general. Imposing artificial limits on bank lending based on the geographic source of deposits presupposes that the market is not working efficiently. In considering any potential community investment initiatives, the government would want to be assured that the model being examined would not lead to inefficient allocation of capital.

A further area of concern with Bill C-289 is the requirement for banks to generate detailed lending statistics at the federal riding level. This could impact negatively on privacy protection for bank customers.

During its hearings with the banks on small business financing, the House industry committee explored the concept of requiring a much more detailed breakdown of lending statistics. In fact the committee looked at seeing whether we could get the breakdown by postal code or community. In the end it was determined that the aggregating of lending statistics to this extent would potentially result in the breach of client privacy.

I want to re-emphasize the government's commitment to community investment despite the criticisms I have put forward here. Today the government is taking action to promote community investment. The regional development agencies and other government programs continue to play a big role in financing community needs across Canada. We are also sustaining efforts to aggressively encourage the banks to meet legitimate small and medium size businesses' financing needs in all regions of Canada.

The government is nevertheless sensitive to the fact that many rural communities have experienced difficulties in accessing not only credit but banking services in general. Let us be clear. The banking landscape has changed dramatically in recent years. The banks must take steps to ensure that rural and remote communities have sufficient access to banking services.

The government is also keeping a watchful eye on the banks' lending activities and carefully reviews their lending data in order to assess progress in meeting the financing needs of small business. Regular House industry committee hearings with the banks provide a good opportunity to question the banks on statistics which may reveal problem areas with respect to access to capital. While it is recognized that credit decisions are highly subjective and involve potential considerations, the data reporting requirements of the banks provide an effective check on the banks with respect to their efforts to support community development.

Much of the debate on community reinvestment has focused on the increasing availability of microcredit to small business. I would note that there are a number of federal and provincial microcredit initiatives run by a variety of community organizations right across the country.

In general these programs offer financial assistance as well as training, mentoring and counselling services. These programs serve not only small business operators but also target youth, aboriginal peoples, women and non-urban rural communities. The government considers these microcredit programs to be of vital importance in promoting community development at the grassroots level and will continue to support and promote microcredit lending.

In summary, while the government supports the principle of community investment, Bill C-289 may not be in fact the best approach. Furthermore, we believe that it would be premature to take any action in this area before the task force submits its views to the government this fall. For this and the other reasons I have outlined in my discussion today, I believe that it would be incumbent upon the House to reject Bill C-289.

I also want to say that the hon. member, I am sure, is quite sincere in putting forward the bill and does believe in what he is doing. I merely want to point out a number of deficiencies that I see in this particular bill.

In fact the reason we set up the task force was to look at the changing financial institutions and the changing financial sector. I do believe that waiting for that report would be the most effective way of dealing with the change that is going on.

In the end we all want to ensure that Canadians in urban Canada and rural Canada, Canadians who are involved in small businesses and Canadians who deal in microcredit are all properly served by the financial institutions in this country.

I certainly applaud the work of the industry committee and certainly the work of all members. The outcome is the benefit that can be achieved by ensuring that small business and Canadians in general do have the proper access to capital and do receive the necessary banking services they require so that they can continue to contribute in a very real and effective manner to the growth of this country and its economy.

[Werner Schmidt, Reform, Kelowna, BC]

Madam Speaker, I feel privileged to enter the debate on this bill. I think the motivation that gave rise to the bill is a very commendable one.

I believe at the beginning of the last parliament, the 35th Parliament, the industry committee undertook a major study on access to capital for small business. That study has continued to guide the hon. member who just spoke on behalf of the government side in this debate. It certainly influenced him and it influenced a lot of other people.

The issue here is the availability of credit to individuals and to businesses. We need to be very careful that this credit is available in a fair and equitable manner and in a competitive marketplace where the people who are providing the capital do so in a fair and reasonable manner.

The issue before us is that banks, chartered banks in particular, be forced. I know the hon. member who is presenting this bill said that there is no coercion involved. That word perhaps is false. There is coercion involved in this bill.

At the outset of the bill its summary clearly suggests rather directly that the banks shall. It says that this enactment amends the Bank Act and provides that certain branches of banks must take measures to facilitate access to credit to persons who have a residence or place of business in the federal electoral district in which the branches are located.

Throughout the clauses of the bill the words “shall” and “must” are located. The issue is very clear that there is definitely an element of coercion involved in this bill.

The purpose of my remarks is not to suggest that the banks are doing an exemplary job in providing access to capital to small business or to individuals. That is not the issue. The issue is that the banks are doing that sort of thing. Are they doing it as well as they should?

My hon. colleague opposite said that the industry committee receives quarterly reports from the way in which the chartered banks are lending money to the various businesses. It is very interesting. The most recent of those quarterly reports is dated September 30, 1997. I did a comparison with the first report dated December 1995. I compared what has happened to the lending patterns of the chartered banks in that time.

It was very interesting that in December 1995 the banks were lending more money to small businesses, that is from zero to $25,000, than they were in 1997. The total number of dollars available in fact decreased during that time period. The number of people however who received those loans increased. This really meant that more people were getting smaller loans than was the case two years previously.

When we look at the other end of the scale, the number of those who borrowed $1 million to $5 million dollars had gone down. However, the total amount available in credit was considerably higher. Therefore, there were fewer people borrowing more money.

This is all part of the banks' profit picture. It is true that the banks can argue that they are profitable organizations. Nobody will debate that. We all know that they are highly profitable. They are so profitable indeed that many people would criticize their profitability.

Let us not forget that there are a lot of other profitable businesses in this country. The issue here is not to criticize the profitability but rather to look very carefully at whether their pattern is such that we can take exception to the accessibility to the lending and the borrowing that we need to do in order to run our businesses and our own individual lives.

This bill restricts itself only to chartered banks. It also restricts itself to branches in chartered banks. There are two difficulties with this.

First of all, there are many other deposit taking institutions that are not chartered banks. I look particularly at the credit unions, caisses populaires and trust companies. Those are probably the most commonly recognized as being deposit taking institutions.

These institutions are very community centred, very involved in the community. They take money out of the community and lend money back into the community. To distinguish one particular group by saying that it must but others can do whatever they feel I do not think is quite fair. I do not think that was the intention either. Perhaps it was; I do not know.

I suppose it could be argued that because the banks have 85% of the deposits in Canada therefore in each community that is the case. It may follow or it may not. In fact in many cases it does not follow. There are other ways of depositing money.

The issue is one of reinvestment. How do we reinvest? If a bank takes substantial sums of money in deposits from a particular community, ought it not reinvest in the same proportion as it receives deposits from the community? The bill is not clear as to whether that is how it would work or whether it would not work that way. It is not known.

I would like also to refer to another provision in the bill which I think has a serious shortcoming. It suggests that a disadvantaged community is a community in which the unemployment rate once during the previous 12 month period was equal to or larger than the national average. This is to be done on an electoral basis.

An electoral district does not have a constant boundary. It changes every 10 years, but nevertheless it does change. The issue now becomes one of being very micro centred. A community goes beyond an electoral district.

If we take the city of Montreal it can in one sense be considered a community. If we look at the unemployment statistics for that community—and I agree there is more than one electoral district—it would as the larger community certainly qualify as being a disadvantaged community. Not only that one, but we could go right across Canada and most of our major centres would qualify as disadvantaged communities under that definition. If we break it down small enough into certain sections there would not be a disadvantaged community in that sense. In other cases there would be very much the opposite situation.

I suggest that there are some shortcomings in the bill. The intention may have been reasonable but the way it is worded will cause us a lot of difficulty.

Also we want to recognize the intent and purpose. Certainly my purpose on the industry committee and certainly my purpose as a parliamentarian is to make sure that there is a sound and stable financial institutional system in Canada. Our chartered banks have served us very well, but there are some very severe shortcomings. The issue is that some of our chartered banks are perhaps moving into areas that are to the disadvantage of the small borrower, the small lender, the small depositor.

I know the pressures that have come with quarterly reports have caused the banks to perhaps change their behaviour slightly but not enough to make a material difference. The intention may be okay but I think there are some difficulties.

I would also like to suggest that there is a major change coming. It is happening already in the whole financial institutions area and in particular with regard to banking and banking services. We are getting into electronic banking in a big way. In fact there are electronic banks that have no branches.

What would the legislation do in that regard? Non-branch banks also take deposits out of what would have been defined as a disadvantaged community. Would the same requirements that are imposed on chartered banks with branches be imposed on them? If not, one group is being preferred over another and it does not create fair competition or equality of competition. I do not think that is fair.

For that reason, if for no other, I would say let us vote against the bill.

[Lorne Nystrom, NDP, Qu'Appelle, SK]

Madam Speaker, I would first like to say that I support Bill C-289 moved by my friend, the member for Hochelaga—Maisonneuve. There may be some details on which I disagree, but this is normal.

It is very important to refer this bill to a committee of the House to have a debate on the future of the banking system in our country.

Similar legislation exists in the United States. It is not something very radical. In the United States, just south of the border, there is very similar legislation. For this reason, I am in favour of this bill before us this afternoon.

The time has come when we should start treating more seriously private members' initiatives in the House in terms of referring them to committee more often; giving our committees more power and independence so that a committee of the House can actually initiate legislation; reforming our political parliamentary system to make it more democratic and more independent from the executive, the government; and making parliament more meaningful to the people of the country. I think that is a very non-partisan statement.

I come from Saskatchewan where our party has been in power for the most part of the last 50 years. I know there and in every other province that too much power resides with the executive. There is not enough independence for ordinary members of parliament who are elected to express their point of view and initiate legislation that is useful to people of any province or any country.

The time has come where members on all sides of the House, all five parties, will have to band together to make sure we get some meaningful reforms to make parliament more acceptable.

When I look at the cynicism out there today I see it is increasing. When we look at the turnout in the last election we see that it is going down. People are more and more turned off by the political process. If we could somehow make debates like this one more meaningful, it would serve a great purpose for Canadian people.

One of the great exercises in democracy that I hope will occur in the next six months will be to allow the opinion of the people of the country to be expressed about the bank mergers and the future of financial institutions.

The Minister of Finance, probably in November, will make a decision on whether or not he will allow the merger of the Royal Bank and the Bank of Montreal along with the merger of the CIBC and the Toronto-Dominion Bank.

As I travel around the country there is a great amount of concern about megabanks being expressed by a broad spectrum of the Canadian population that support all parties in the House. It does not only come from certain groups in society. It comes, for example, from the Canadian Federation of Independent Business that represents 89,000 small and medium businesses. It recently did a survey which shows around 75% of its members are in opposition to these megamergers.

That should tell us something. Small business is the real motor of our economy. It employs people. It talks to the public. It has a good sense of what the public wants.

We in parliament should find a way to make sure that point of view is heard by and expressed to the government. We should be saying to John Cleghorn, Matthew Barrett and the other presidents of the banks that they will not hold parliament to ransom by making their announcement well ahead time and expecting us to rubber stamp the merger of these four great Canadian banks into two.

That will not be the case just because the stock market has reacted and bank stocks have gone up by $19 billion since January in anticipation of our being trained seals. We will not necessarily react that way. Parliament should express the will of the people.

Big is not necessarily better. We can look at the big Japanese banks that are having trouble today. These two megabanks which are now four Canadian banks represent assets of over $900 billion compared to the budget of the Government of Canada in the $120 billion to $150 billion range. We are talking about two huge sumo wrestler type banks.

They do not want to merge to be a better service to the Canadian people. It is the bank workers, the customers and the communities which have built those banks and made them profitable that will be devastated by these mergers.

The banks want to merge for one reason and that reason is greed. Those bank presidents have seen their stock options increase by approximately $100 million since January. In the CIBC and the TD alone the nine major officers of those two banks have seen their stock options increase by $142 million since January. No wonder they want the mergers to proceed. It is good for the big fat bankers, but is it good for Canadians?

Experts are saying that approximately 20% of the people who work for those banks will be laid off. They will lose their jobs. Approximately 30,000 Canadians will lose their jobs. That is a population of a small city. That is why parliament has to stand up and say no and represent the Canadian people on this issue.

Those four banks have about 5,000 branches, many of which will close throughout rural Canada and in city centres. This will result in a lack of service for the Canadian people. There is also the issue of corporate concentration. Our banking sector already is the most concentrated banking sector of any country in the Organization of Economic Co-operation and Development.

When we go from five big banks to two megabanks we will see about 70% of the banking assets in the hands of two banks. In the United States it would take approximately 100 banks to make 70% of the banking assets of that country.

This should be a great worry to Canadian people in terms of service, bank service charges, interest on loans, service to the small business community, farmers and ordinary people. These mergers will not be in the interest of the people of the country. They are in the interest of Mr. Cleghorn, Mr. Barrett, Mr. Baillie and Mr. Flood, the presidents, CEOs and banking executives of these four big banks.

Those banks have been made very profitable. They have made over $7 billion in profits in the last year, and they have done that in Canada. They do not have to get bigger to be more profitable.

Even my Liberal friend from Winnipeg is embarrassed about the power of these big banks. He knows the electorate in his riding is very concerned about the layoffs that will ensue, the lack of competition and the branches that will close throughout Manitoba. In Lynn Lake, Manitoba, there was only one bank which is the Toronto-Dominion Bank and it has closed. It is a community without a bank. This is happening right across the country.

I hope we take advantage of this debate to focus once again on the power of these banks and to say at the very least that Canadian banks should be forced to reinvest in their local communities the money they take from depositors in their local communities. This is happening now in the United States of America.

There is nothing radical about it. It is happening in the United States. Let us make sure it happens here. The banks are here to serve the Canadian people, not to fatten the pockets of John Cleghorn, Al Ford and the other big bank CEOs.

I will do whatever I can as a member of parliament to help channel public opinion against these big mergers. They are not in the Canadian interest and I say to John Cleghorn “Don't take parliament for granted. We are not trained seals. We are not a rubber stamp. You can't blackmail the Parliament of Canada”. Parliament is supreme in terms of making up its mind whether or not these mergers go ahead. We reflect the Canadian people. We will make sure they say no.

There was a survey in the Regina Leader Post about two weeks ago. It was a survey and not a poll. The question was “Do you think if these big banks merge you will get better service or worse service?” Over 2,000 people called the Leader Post and 93% said the service would be worse and 7% said the service would be better.

This is another reason we as members of parliament should say that it is not in the public interest, not in the interest of Canada, that these mergers go ahead. That is one of the reasons I support the bill of the hon. member for Hochelaga—Maisonneuve.

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

Madam Speaker, I congratulate the member for Hochelaga—Maisonneuve for putting forward this piece of legislation, which I have read. I echo the comments of my colleague in the NDP that it is very refreshing to speak to issues that are important to us as individual members of parliament.

I share some sympathy with the member who submitted this bill that it is not votable. I find that to be unfortunate. I wish that all private members' legislation, bills or motions, were votable in this House. I have had the opportunity to speak to a number of my own that were not votable, although they were very important issues. They are very necessary issues for individual members of parliament, not only for their own constituencies but for the constituency we all serve, the constituency of Canada.

I was confused as I read the bill because it did not speak a lot about the bank mergers. I respect the hon. member in the NDP for his opinion on a number of issues. He has conviction and he is certainly very dedicated to his cause. However, I am not prepared to stand here and not speak to the legislation, and I certainly will not bank bash, which was the soap box given to the hon. member with respect to this piece of legislation.

I will try to home in on what the member for Hochelaga—Maisonneuve is trying to put forward. As I understand it, this bill would amend the Bank Act and the Statistics Act to promote equity in community reinvestment. It is not a bill that talks about bank mergers and the operations of banking institutions and how the Americans are either better or worse than us. What it talks about is a very important issue to all of us, in particular the smaller communities which have banking institutions. Moneys are taken from those communities, whether in deposits, in RRSP contributions, in mutual funds or in other investment vehicles to be invested in other areas, most of them being the major financial centres, the larger centres in eastern Canada.

I understand the theory and practicalities of economy. Let us be serious about it, perhaps a little more serious than the NDP member who spoke, who may not quite understand all of the mechanics of international and national economies.

I believe very seriously that in my own community the banking institutions are good corporate citizens. They become a part of our community, but they have a job that has to be done. That job is obviously to make a profit, which the NDP member would see slightly as a dirty word. I see it as an opportunity for corporations to reinvest in themselves and to help those same employees the member suggested would be impacted by the mergers. They are and have always been good corporate citizens in my community. They are certainly there when necessary to help the community in any number of fashions.

We first talked about reinvestment in the community. The banking institution is there to help people like members of the House to maintain the standard of living they have developed over the past number years in their families. They allow us to purchase our residences, to purchase our vehicles, to purchase things for our leisure activities and to purchase the education that is vital for our families.

They reinvest in the community with respect to commercial and industrial reinvestment. We have heard constantly about small and medium size enterprises, the backbone of the Canadian economy. In most cases the small and medium size enterprises depend an awful lot on the same financial institutions we speak about in this legislation. That is not in all cases because mistakes are made and everything is not perfect in this world. However, in most cases those small and medium size enterprises are assisted by the banking industry, which is good, not bad. This legislation also speaks to those good things. I am very pleased about that.

The legislation also calls for more transparency in the banking institutions. It suggests that the banks should tell us how many dollars are being taken from our communities and how many are being reinvested.

That is as far as it should go. I do not think there should be a quota system. I do not believe there should be legislation saying that if dollar one goes out then dollar one must come in. That changes the whole dynamics of what we realize as being a Canadian economy built on a banking system which is probably second to none in the world.

The PC Party believes in promoting equity in community reinvestment and in strengthening the corporate citizenship of the banks in those communities. However, the measures that Bill C-289 would take to ensure equity are ambiguous and a bit unclear. Under Bill C-289 banks in different regions would be held at different standards. Only those banks in a district with higher unemployment than the national average would be subject to this bill and the accountability that it would bring.

I would suggest that the bill should be applicable to all electoral districts, not just to a selected few. Currently the legislation is not equally applicable to all banks. Judging a bank in Cape Breton differently than one in Medicine Hat is not a solution that will promote community reinvestment.

Government intervention in the lending sector is not the solution to job creation. Lowering payroll taxes and tax relief should be the first steps in promoting job creation.

However, Bill C-289 does propose a very productive step forward in promoting accountability in the banking industry that is very positive. It is a step for which I congratulate the member. But the accountability brought forward by Bill C-289 should not be restricted just to electoral districts with unemployment rates greater than the national average. That same accountability and transparency should be throughout all electoral districts. There should not be any criteria with respect to unemployment rates. It should be applied to all banks across the country.

Currently the Canadian Bankers Association distributes business credit statistics outlining recent credit extended to small and medium size businesses. In fact, the banking sector undertook this practice even before crown corporations began to publish similar reports.

The bill rightfully pushes the level of accountability and transparency further than the current reporting practices of the banking sector. The proposal under section 522.06 where banks would have to analyse their operations systems, rules and practices in order to determine their position relative to community reinvestment is positive.

However, the bill admits that the government would be hard-pressed to apply specific measures to certain banks which did not comply with the bill's intention. Nowhere in the bill is there any mention of how the minister could impose greater lending practices on institutions that do not meet the ambiguous and undefined criteria for community reinvestment.

The PC Party is in favour of having a report published and publicly accessible outlining the commitment the banking sector has made toward community reinvestment. At this point in time we believe that simply publishing this information would ensure greater public accountability in the banking sector. If the numbers are there the public then has the opportunity to make its own decision as to whether sufficient dollars are being reinvested into the community from that one institution and whether the public should in fact support that institution in their community.

If this bill is meant to promote accountability in the banking sector, then yearly reports are the first step in this process. However, if this bill is meant to strengthen job creation in underdeveloped employment regions of Canada, the government should not confuse the issue with accountability in the banking sector. They are two separate issue. I appreciate the fact that we should have transparency in accounting in the system because then we do have a choice, but for the institutions to put that money back into a region simply because of a high unemployment rate is not the way to do it. There are other ways.

Instead of intervening in private enterprise the government should offer small and medium size businesses in Canada the tools to expand and promote job creation on their own. I touched on that earlier by suggesting that the government should help regional development with respect to taxation, which is the major impediment of any regional development, and provide the opportunity to develop those industries.

Offering Canadians tax relief and cutting employment insurance premiums are the first steps the government should undertake to assist regions with high unemployment.

I thank the member for Hochelaga—Maisonneuve for putting the bill forward.

[Réal Ménard, Bloc, Hochelaga—Maisonneuve, QC]

Madam Speaker, I would like to clarify three points.

First, the government member who said that this legislation dates back to the 1970s probably does not know that the Clinton administration has updated the Community Reinvestment Act. The impact of this legislation and its underlying objectives are just as relevant today as they were when the bill was first passed in 1977.

Second, why was the electoral district used as unit of reference? Simply because it is the unit for which there was the most data available and because we thought, along with the drafters who worked on the bill, that it was an interesting unit of reference.

Now, if a member thinks that another unit of reference should have been used, in a democracy, the best way to counter an idea is to put forward a better one. I am very open to any kind of amendment that would improve this bill.

At the end of my remarks, I will ask unanimous consent to refer this bill to a parliamentary committee so that we can have a real debate on this issue.

I will not have unanimous consent. The four opposition parties, namely the New Democratic Party, the Progressive Conservative Party, the Reform Party and the Bloc, are willing to give it, but not the government. Do you know why the government is not willing to give its consent? Because this government is made up of hypocrites who speak from both sides of their mouths, particularly the House leader. They tell us that they support the philosophy behind the Community Reinvestment Act, but they back off when the time comes to engage into a real debate.

You know very well, Madam Speaker, that we have a problem with credit in Canada and in Quebec. The Liberals are hypocrites, particularly their House leader. They are just short of being liars.

What is unacceptable is that, yesterday, the leader of the Bloc Quebecois and I came very close to an agreement with the government for the bill to be referred to a parliamentary committee, which is the minimum one can expect in a democracy. Today, the Liberals are opposed to that. Do you know why? Because none of them can rise and speak without his hands being tied by the banks.

If one of these members were to rise and say this is not true, I would be prepared to table in this House the banks' contributions to the political parties. You can see these people cannot be honest and upright. They cannot hope for a real debate and take a stand on behalf of the disadvantaged, as in the south centre, Hochelaga—Maisonneuve and Winnipeg, because they have sold their souls. They are owned by the banks. I find the position of the House leader of this government insulting, disdainful and unparliamentary, as I do the remarks of the government members who just spoke.

We are nowhere near a real debate on the banks. I know we cannot count on the Liberals. What is interesting today is that the Reformers, the New Democrats and the Conservatives, with whom we do not agree on everything, as is to be expected, are giving their consent and are prepared to meet in committee and call witnesses in order to have a real debate.

I am sick at the thought of how hypocritical the Liberals are. Earlier, the deputy whip said to me “No, we will not support this bill”. They were prepared to give their support, yesterday, because they thought the Reformers would not.

I would like those watching this evening to know that the Liberals are deeply dishonest. They lack integrity. If people do not take to the streets, if there is no groundswell to force this government to assume its responsibilities, there will be no debate on the banks.

And what will happen. We will go on as before. How is it that, yesterday, the National Council of Welfare reminded us of the five million Canadians living in poverty, when in 1989 we passed a resolution to have all parties work to fight poverty?

Is there one member in this House who will rise? Is there one individual among the government members, with their stupid smiles, who will rise and say there is no relationship between poverty and access to credit? The Liberals make me sick, and I want people to know that they will never be honest with the banks, because of the funding they get. We know, we have the list. That is the distinction between democracy, between people who can stand up and speak honestly with their hands untied and the traditional parties that let themselves be bought by the banks.

[The Acting Speaker (Ms. Thibeault)]

The hour provided for the consideration of private members' business has now expired and this item is dropped from the order paper.

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

[Gordon Earle, NDP, Halifax West, NS]

Madam Speaker, both military and civilian employees of the Department of National Defence are under heavy attack from this government. That was evidenced by what the federal standing defence committee heard last week in Halifax.

The committee was told of military families so strapped for money they were forced to knowingly cash bad cheques to pay for their children's medicine. There were also horror stories about people injured while serving their country, only to be thrown on the scrap heap by DND.

Instead of working to maximize the potential of our armed forces, this Liberal government has chosen to treat our defence personnel as second class citizens, sacrificing their jobs and their families' future to the short term selfish economic gains of large corporations.

This Liberal government's ASD allegedly stands for alternate service delivery. It really stands for armed services destruction.

This shortsighted and destructive strategy of cutting the civilian workforce in Halifax, Goose Bay, Shiloh, Gagetown and throughout the country hurts not only those employees sacrificed but also their families and entire communities.

This offensive against Canada's military reads like a well crafted government strategic campaign to attack from two fronts. It was not enough to disrupt the lives and plans of civilian defence employees by forcing them to all of a sudden compete for service bids with mega corporations.

When civilian military workers successfully beat the ASD contract bids of private companies, this government abruptly changed the rules of engagement to favour large corporations. The bundling of bids provides for the awarding of contracts on a national basis, not only a cheap shot at our military but a slap in the face to small businesses throughout this country.

What is this Liberal government's real agenda, an efficient military or a privatized and gutted military where there are enough funds for huge capital purchases but not enough to sustain the dedicated men and women serving Canada in both civilian and military roles?

Before rushing blindly into a minefield, will this government not take time and fully explore what this will mean to the people of Halifax and elsewhere?

The plan to cut 125 jobs at CFB Halifax is structured to allow management favourites to keep their jobs while those with better credentials are fired.

There are close to two and a half thousand civilian defence employees in Nova Scotia, about 90% of them in greater metro Halifax.

In 1994 the federal government cut over 50% of the civilian jobs at CFB Shearwater and has been cutting further through this ASD fiasco. Just what are the government's plans for Shearwater? The people of Halifax deserve to know what this government has up its sleeve for their future.

In Goose Bay, Newfoundland where support services were privatized to a foreign corporation, jobs and wages were slashed. The impact on the local community has been dire, with everyone from the DND workers to the local chamber of commerce denouncing the shortsighted and selfish deal.

The Minister of Defence has suggested that people would be treated humanely as this offensive against Canada's military was deployed. If laying off people and cutting salaries in half is humane, it is a good thing his portfolio does not include human rights.

The people of the Halifax region, throughout the province of Nova Scotia and across Canada deserve answers, answers this Liberal government seems loathe to provide, as if it is afraid to jeopardize this backward strategy of taking wages and jobs from Canada's civilian defence personnel in order to hand over quick cash to large corporations. Not good enough.

[John Richardson, Liberal, Parliamentary Secretary to Minister of National Defence]

Madam Speaker, as the Minister of National Defence has previously stated in this House, the Department of National Defence has an obligation to meet budget reduction targets.

The Canadian forces and the Department of National Defence must deliver the missions defined by the government in the defence policy in the most cost effective way possible within the constraints of the budget available.

Achieving cost savings in support activities is something that can be done with the alternative service delivery program. At the same time, however, the government has an obligation and a desire to make sure that employees are treated fairly. We have demonstrated that with the way we have gone about the downsizing of the public service. We will demonstrate it again in the terms of how we treat employees affected by the alternative service delivery program.

Among the options being considered are various alternative service delivery mechanisms such as competition, which may at times include in-house bids, or employee takeover leading to contractual arrangements and partnering and collaborations between government and private sector and privatization.

However, the Minister of National Defence directed the department to ensure that the six sites recently selected for an alternative service delivery review have the opportunity to demonstrate whether sufficient savings can be achieved through internal redesign of the work before a decision is made to pursue the competitive process.

The review of alternative service delivery initiatives provides for fair consultation and involvement of all interested parties including management, employees, unions, industry, local communities and other government departments.

In cases where there may be personnel cuts resulting from these initiatives, the Department of National Defence and the Canadian forces work with the union leadership and affected personnel to discuss the possible impact of anticipated reductions. In these cases arrangements can be made to secure employment with the new employer and remaining—

[The Acting Speaker (Ms. Thibeault)]

I am afraid I must interrupt the hon. member as his time has expired.

[Yvon Godin, NDP, Acadie—Bathurst, NB]

Madam Speaker, I rise in response to the reply provided by the Minister of Transport on February 24 to my question on the toll highway in New Brunswick.

The Trans-Canada Highway between Moncton and Fredericton was built with Canadian taxpayers' money. The federal government joined New Brunswick to fund the construction of that highway.

But at the last minute, the New Brunswick government played behind the back of the residents of that province and reached an agreement with Maritime Road Development Corporation. This agreement creates a number of problems. First, New Brunswick residents have already paid for the highway, through taxes. To collect a toll from those who travel from one city to another violates people's right to move freely.

The tolls collected may not be a problem for someone like Doug Young, but they represent several hundreds of dollars every year for those who travel from Moncton to Fredericton a number of times every week.

The agreement also poses a problem in that the negotiations with Maritime Road Development Corporation were conducted behind closed doors. I realize it is common practice for the Liberals to do things behind the back of Canadians, but this must stop.

Let us not forget that the person behind these negotiations is Doug Young, the former Liberal Minister of Transport. Mr. Young is now getting rich at the expense of the residents of New Brunswick.

Enough is enough. Canadians are sick and tired of seeing patronage everywhere they look. They are sick and tired of seeing that their elected officials are only looking after their friends' interests instead of protecting the interests of Canadians. Awarding a contract to a former minister of one's own party and helping him get rich is not only deplorable, but is clearly a conflict of interest.

Canada's highways should never be subject to tolls, particularly not to help private contractors get rich. The situation was best described by the mayor of Salisbury, Ruth Jackson, who said “Setting tolls on any section of the Trans-Canada Highway is an abuse of the trust of Canadians, because it deprives them of a unified transportation network from coast to coast. Any toll road, whether provincial or private, must be completely separate from the Trans-Canada Highway. If such tolls are set up, any commercial haulage in the region east of Moncton will be deprived of the access to the national highway network”.

Let us listen to Canadians and do away with the idea of toll highways.

[John Richardson, Liberal, Parliamentary Secretary to Minister of National Defence]

Madam Speaker, let me remind the hon. member that highway matters fall under provincial jurisdiction. Lesson one. This means that provincial governments decide on their alignment, design, construction standards, tendering process and financing as well as subsequent operations and maintenance.

The decision to establish tolls on highways is exclusively a provincial decision. New Brunswick has chosen to operate the 195 kilometre highway project from Longs Creek west of Fredericton to Magnetic Hill west of Moncton as a public sector-private sector partnership using tolls.

New Brunswick announced on January 23, 1998 that the Maritime Road Development Corporation would construct and operate the four lane controlled access highway which will be opened by November 30, 2001.

The total capital cost of this project is $887 million. This cost includes new construction at $584 million plus a payment to the province for work completed or under way on various sections of $123 million, not including the $32 million federal contribution plus land costs and construction interest costs. The overall agreement is for 50 years.

This highway project is not being funded under the federal-provincial cost shared agreement. The federal government has no legal basis to prevent New Brunswick from imposing tolls on this highway.

[Libby Davies, NDP, Vancouver East, BC]

Madam Speaker, as the post-secondary education critic for the NDP I have tried to do my best to press the federal government on concerns about post-secondary education and the crisis we are facing.

In question period about a week ago I questioned the government about the skyrocketing tuition fees and deregulation which is causing a two tier educational system in Canada. I pointed out to the government that the Americanization and the privatization of post-secondary education is directly as a result of the gutting of federal funding.

I was shocked by the response from the Secretary of State for Children and Youth, who suggested I speak to my colleagues in the Government of British Columbia to deal with the issue of skyrocketing tuition fees. I was shocked at this response because I could not believe a government minister was not aware, especially the Secretary of State for Children and Youth, that in the province of British Columbia we have had a tuition freeze not for one year, not for two years but for three years.

The B.C. government introduced legislation very recently that will continue the tuition freeze until 1999. The government of B.C. is doing this to ensure that post-secondary education is affordable and accessible. The freeze will include tuition fees for graduate, undergraduate, career, technical, vocational and developmental programs. It also freezes mandatory ancillary fees that could increase the cost of tuition, including such items as library registration or laboratory fees.

I point this out because I really find it appalling that the federal government apparently has not a clue what is going on in British Columbia and the leadership that has been taken to ensure that post-secondary education is still accessible. This tuition freeze will ensure tuition fees of B.C. are among the lowest in Canada.

In other provinces such as Ontario tuition fees have increased by 20% in recent years and enrolment has declined. But B.C. has increased funding to post-secondary education despite the massive cutbacks by the federal government, a 20% increase, $39 million for this year alone. Even today in British Columbia the government announced that it is removing tuition fees completely for adult basic education.

I want to set the record straight and call on the government to issue an apology to the B.C. government in alleging and charging that tuition fees in B.C. are skyrocketing. That is the case elsewhere in Canada as a result of the gutting of funds from post-secondary education and that is something that is of huge concern to all of us, particularly to students who are facing a massive debtload. Let us get the facts straight here. I would like to see in the government response today and in future responses government members acknowledging the leadership that B.C. has taken to ensure that post-secondary education is accessible to students.

We are calling on the federal government to demonstrate and to show that same kind of leadership across the country by instituting a national freeze on tuition fees and instituting a national program of grants for students in Canada.