Debates of Nov. 15th, 1999

Cape Breton Development Corporation Divestiture Authorization And Dissolution Act

[An hon. member]

Mr. Speaker, perhaps we should ask for a quorum count.

[Randy White, Reform, Langley—Abbotsford, BC]

Mr. Speaker, I note that there are very few government members in the House. I would like to have a quorum count.

[The Deputy Speaker]

Call in the members.

And the bells having rung:

[The Deputy Speaker]

I see a quorum.

[Dale Johnston, Reform, Wetaskiwin, AB]

Mr. Speaker, I would like to pick up where my colleague left off. He talked about the need for a plan. Perhaps members will recall the expression “If you fail to plan, you plan to fail”.

It would seem to me that this is a perfect example of that. The government has had no plan in place. It started back in 1966 under the assumption that it was going to phase-out coal mining in Cape Breton, and yet it has continued to hire, it has continued to open new mines and it has continued to give the impression that coal mining would be a viable way of life and a reliable occupation.

It took years and years. The plan was that it would take 15 years to shut down coal mining in Cape Breton. One would assume, albeit incorrectly in this case, that if the governing was going to shut down something as important to the region as a basic industry like coal mining it would come up with some sort of a plan to diversify the economy or to prepare people for the eventuality that there would be no coal mining. I think it was Forest Gump who said it best: “Life is like a box of chocolates”. The people of Cape Breton did not know what to expect. They did not know what they were going to get. They did not know from day to day or week to week what was going to become of the mining industry.

We are getting this mixed message. The people of Cape Breton always got the mixed message that the government was going to phase out coal mining, and yet the mines remained open and they continued to hire people. That is totally unacceptable.

Eleven months ago, in January, the government announced plans to shut down one Devco mine and to sell the other. That is not too bad. Let us see, that was 1966 to 1999. That is only 33 years. I think the government acted fairly quickly on Prime Minister Pearson's plan. It only took 33 years. When the decision was made, it was as though the government pulled the plug in the basin and let everything go at once. What a tremendously shortsighted, poorly thought out, ill-advised plan this was. As a matter a fact, this is so bad that nobody could call it a plan. At the very best we could call it crisis management.

This reminds me of other things that have gone through the House. Our House leader, the member from British Columbia, spoke a bit about this in his remarks. We seem to be getting all kinds of time to discuss this in the House today, which is appropriate, but we have had other things come before the House, which have run into the billions of dollars, on which the government has moved closure and time allocation so that members on this side of the House did not get an opportunity to express their concerns or thoughts.

I wonder if it is only a matter of an hour or so before the government House leader comes rushing in and says “That is enough of this stuff. We are going to shut you down”, because it has to deal with the tiddlywink act or some other tremendously important piece of business. It seems to me that we are dealing with the lives of at least 1,100 people in Cape Breton and there has been no alternative presented or suggested to them.

I want to talk a bit about the whole aspect of being an underground miner. I cannot imagine the bravery it must take day after day to go down into the mines, even the mines which have every safety precaution, especially those which are located under the ocean. I would think that people would have to have fairly good nerves and great resolve to be an underground miner of any type, but when the miner works underneath the ocean, a bay or whatever, it seems to me it would take a particularly strong individual to put up with that kind of work and that possibility of danger.

Over and over again we have seen that there have been cave-ins, slumps and sags. I do not consider myself to be claustrophobic, but I am sure that if I was in a shaft someplace and the roof caved in between me and the escape route, I would not be able to make that claim. Claustrophobia would set it regardless of my resolve. I admire and marvel at people who can work under those conditions.

Having said that, I want to assure the House that I am sure the people of Nova Scotia and Cape Breton are very adaptable and diversified people who could make a living in many different ways. They are talented and they have many things at their disposal which they could apply if they were given a chance.

In this instance the government has chosen only to pour money into a mine that should never have been supported. I think the original intention of phasing out the mine in 1966 was probably a good one in that there was co-operation and agreement between the federal and provincial governments. The question is, why did the government not act on it then? Instead it nursed this along to the point where people got their hopes up and then at the last minute it just simply pulled the plug, leaving the people high and dry.

I look forward to hearing what my colleagues have to say in regard to this bill. I have been listening to hon. members from Nova Scotia and Cape Breton who have talked very passionately about the problems. I am certainly hopeful that the debate today will have a great amount to do with the resolution of this whole situation in Cape Breton.

[Brent St. Denis, Liberal, Parliamentary Secretary to Minister of Natural Resources]

Mr. Speaker, I listened carefully to the hon. member's comments, as well as the comments of his fellow Reformer.

The essential message coming from both members is actually the opposite of what we hear from the NDP, which is “Why were the coal mines not closed down 15 or 20 years ago?” There are those who would argue why we would even consider any option other than keeping the mines open. It proves again that a Liberal government is a government that can bring balance to the debate. We are seeing the two extremes and at the end of the day the position of this government will be seen as the right decision which will ensure that the future for Cape Bretoners is a diversified future which will rely on the creativity and the innate ability of Cape Bretoners.

There has been a dearth of ideas across the floor on what members of the opposition would do if they had the financial resources that are being made available in this case. What ideas would they bring forward to help diversify, prepare and assist the Cape Breton economy for the next century, indeed for the next millennium?

I would ask the hon. member to put aside his view of the history and give us his vision for the future. After all, this debate should be about the best ideas that can be put in place for Cape Breton. The panel has been asking for those ideas from the community. What ideas does the hon. member or his party have to ensure that the very best outcome possible can be found?

Before the member answers, I would advise him that in my riding of Algoma—Manitoulin in northern Ontario, the community of Elliot Lake suffered massive mine layoffs not too many years ago. Something like 4,000 jobs were lost in a community of roughly 16,000 people. I do not want to make comparisons as each situation is unique but if any Cape Bretoners asked me for some of the ideas that were attempted in Elliot Lake, I would be glad to share them.

I look forward to hearing from the member about any ideas he or his party might have to assist in moving the whole matter forward.

[Dale Johnston, Reform, Wetaskiwin, AB]

Mr. Speaker, I do not know that I agree with the member opposite that the government is taking a balanced approach. I do believe the government is taking a very, very slow approach.

It was the Liberal government in 1966 that made the assumption and set forth the so-called plan to phase out mining entirely in 15 years. Here we are, more than twice that length of time since then, and the Liberal members have reached no conclusion except to suddenly look at their watches and say that today is the day to cut everything off.

There has been no preparation as far as diversifying the economy is concerned. The people in the Cape Breton area are very capable of doing other types of work. It is just a matter of providing some incentives and markets for the people that live there. As far as giving specific solutions regarding what the exact route to take is, I could not do that in the little bit of time that is allowed to me.

Suffice it to say that the approach that has been taken to this point has been devastating to the people who have worked there. Since 1966 people have based their careers on the possibility of working in a mine or a mine related field. In 1999, some 33 years later, the government simply cuts it off.

[Peter Mancini, NDP, Sydney—Victoria, NS]

Mr. Speaker, there is shame in the House today. There should be shame and I think there is shame on the part of some government backbenchers, perhaps even on the part of some cabinet ministers of the Liberal government.

There ought to be shame first of all because a fraud has been perpetrated on the people of Cape Breton. The government says that in January of this year it came to a decision to disengage itself from the mining industry in Cape Breton.

When my colleague from Bras d'Or introduced into the House of Commons a cabinet document dated 1995, there were howls and protests by the government. The government said, “We weren't planning to divest ourselves of a role in Cape Breton in 1995. That was just a study document”.

I live in Cape Breton. I remember in February 1995 the current Minister of Finance giving an interview in Halifax. Oddly enough he was asked a question on economic recovery in Canada. Canada was going through a recession. His words to the interviewer were, “I think we will find our way out of this economic recession in Canada and Canada will prosper, but for Cape Breton I don't see that prosperity”.

At that time those of us in Cape Breton wondered why the Minister of Finance might make such a comment. Later on that year, when faced with miners who wanted to open Donkin mine, who wanted some kind of assurance from the government as to a plan for Devco, the former member of parliament for Cape Breton—East Richmond said, “There are no rabbits in the hat, boys. I can't do anything for you”.

I was a citizen at that time; I was not a member of parliament. We wondered why that minister who represented Cape Breton did not have an answer. Now we know. We know because the then Minister of Natural Resources was talking of privatization in 1995. I submit that the Minister of Finance knew in February 1995 that there was not going to be a coal industry in Cape Breton. I think the then Minister of Health knew in 1995 that there was not going to be a coal industry in Cape Breton.

The only people who did not know were the Cape Bretoners. Even though they had a Liberal member of parliament at the cabinet table, even though a Liberal member of parliament represented my riding, even though a Liberal member of parliament represented what was then Highlands—Canso, the only people who were not told to get ready for economic adjustments were Cape Bretoners. There has been a fraud and the shame is justified.

There is another reason for shame. The Liberals are abandoning not only the miners and the people of Cape Breton with Bill C-11, but they are abandoning their own history. They are abandoning their own legacy.

Devco was the child of Lester Pearson. It was conceived and drafted by a Liberal government composed of people like Allan MacEachen, Romeo LeBlanc and Liberals who back then said that they saw a role for government in compassionate help for regions of the country outside the Ottawa valley.

There is a statue behind the west block of Prime Minister Lester Pearson. If his spirit is in the House today, it weeps at the hypocrisy of the government. Let me read some words. These are not my own words. These are the words of Lester Pearson:

The federal government realizes that the Cape Breton coal problem is essentially a social one. It is because of its awareness of, and concern for, the well-being of individuals and their communities that the federal government is prepared to assist, on a massive scale, the transition of the areas from dependence on a declining natural resource to a sound economic base.

It was to be on a massive scale because government understood the role and the history that Cape Breton miners have played in building this country. He went on, and I shame members further:

The Government of Canada and the government of Nova Scotia believe that a rigid adherence to a fixed timetable to reduce the level of coal production might involve unnecessary hardship on the dependent communities.

Rigid adherence to a fixed timetable. What do we have from the Prime Minister's Liberal government? An announcement in January that come hell or high water the coal mines will close in December 2000, a fixed agenda regardless of what it does to the communities. That is hardly in the spirit of Lester Pearson. Let me continue to shame the members:

Consequently, the rationalization of the mines will be related to the success in the introduction of new industries. The crown corporation will be instructed to give full consideration to the needs of orderly adjustment, including the implementation of a generous early retirement plan for the miners as recommended by Dr. Donald.

A generous early retirement plan for the miners. They are the people I went to school with. Today, at 42, 43 or 45, some with one eye because of an accident in the mine, some with one shoulder a little lower than the other because of a roof fall-in, some missing a finger, they are told they will get a severance package taxable by the Government of Canada and they should retrain. That is hardly in the spirit of Lester Pearson. Shame on the Liberals for that.

The contrast is so dramatic. If people in this country who used to vote Liberal wonder whether they can find a home in this right-wing government, that should tell them. If anyone thinks that the Prime Minister's shuffling of a few cabinet ministers and talking about a children's agenda is a pretence to the return of the Liberals of old, they are right. It is a pretence. Bill C-11 which will cause undue hardship to the miners in Cape Breton is a testament to the fact that the Liberal Party lost whatever soul it had under Lester Pearson. The present Prime Minister, who was brought into politics by Prime Minister Pearson, should be ashamed.

There is another aspect. I credit Allan MacEachen as he thought he could enshrine some sense of responsibility on the part of the government. Section 17 of the Cape Breton Development Corporation Act was passed in the House of Commons. That put the words of Lester Pearson into law. It reads in part:

(4) Before closing or substantially reducing the production of coal from any coal mine operated by it, the corporation shall ensure that

(b) all reasonable measures have been adopted by the corporation, either alone or in conjunction with the Government of Canada or of Nova Scotia...to reduce as far as possible any unemployment or economic hardship that can be expected to result—

What happened to the Liberal Party that it would take that section out of the new proposed legislation? What happened was a fundamental shift in ideology. There was a fundamental shift in thinking. The Liberal Party no longer believes there is a role for the government in communities like Cape Breton.

Shame hangs on the House and it hangs on the Liberal Party. My only hope and I think the hope of Cape Bretoners is that some backbenchers who still adhere to what was once a Liberal philosophy will muster the courage of the miners and stand up against their government when it comes time to vote on this bill.

Let us talk about the people who are affected by this. I have talked a little about the men who for the most part are courageous. They have been talked about in debate here. They are the draegermen who went down into the Westray mine to recover the bodies of dead miners, risking their own lives.

We are a people, a distinct people. We are a people with our own history, our own culture and, in some ways—if one talks to my mother-in-law or my mother—we are a people of our own language. We have preserved the Gaelic culture and the Gaelic language. We are a people who, because we were fishermen, farmers and miners, were never dependent on the government but understood the interdependence of communities one on the other. That culture today is under attack by the Liberal government with this bill.

I was delayed in the airport the other night and wandered through the bookstore. I saw many books on self-help: how we need to reach out to each other; how we need to understand each other; and how we need to be affectionate with each other. It made me think of the miners who live in the communities that I represent. When I go door to door, these people tell me “I do not want much, I want to be able to keep my home here”. Their homes are not $250,000 homes in Toronto. They are $30,000 to $40,000 homes in New Waterford, Glace Bay, Reserve Mines or Sydney Mines. They want to stay in those homes because four blocks away is a mother who is getting older and needs to be looked after. Three blocks down in the other direction are brothers who go underground with them, protect them and look after them. Their kids can go to school and stop at any house and find a relative or a friend.

The self-help books say that this is the kind of community we have to build. I say that we have it but the government is tearing it asunder. The government is saying to those men “move”.

The speaker who preceded me said “Oh, I know the people of Cape Breton are resilient, adaptable and can be trained”. Yes, we are. However, let me propose to the members of the House that tomorrow I will take away their privileges, tomorrow they will lose their seat, tomorrow whatever professional degrees or whatever work they did will not matter, they will go down in the coal mine and learn how to dig it. They should go ahead and adjust accordingly. They should move from Rosedale, from Toronto or from Calgary because that is what economic adjustment is all about. They should sell the house even though the market is depressed. That is what economic adjustment is all about. That is what the bill is all about.

The history of the coal mining communities in Cape Breton is a long one. It has been recited here over and over again. There seems to be some kind of thought that there was government dependence. We heard the figure of $1.6 billion that has been spent in Cape Breton on Devco. The miners in Cape Breton worked for private companies until the 1960s and then began to work under the crown corporation. Inasmuch as the government spent $1.6 billion, it took back $6 billion in taxes. That is not a bad return. It is not dependence, it is work.

What did we ask for in return? We asked for pensions. I do not think that is unfair. We asked for some readjustment. We asked for some economic development money.

The miners in Cape Breton have contributed to the building of the country from one coast to the other. They did not all just stay in Cape Breton and go underground. They went to Flin Flon, northern Ontario and Elliot Lake. Why did they go? It was because the companies knew they were the best damned miners in the business. They knew that if they needed someone who could do explosive work, Cape Breton miners would respond and would risk their lives, which some of them did, to build this country.

I began this address by referring to the statue of Lester Pearson behind the West Block. There are four other carvings that the members of the House of Commons should look at the next time they wander out into the lobby.

Above the ceiling in the lobby of the House of Commons, in the four corners which is a testament to their prominence, are four carved portraits: One is a farmer because the farmers were recognized as having helped build the country; one is a fisherman, and we all know what happened on the east and west coasts to the fishermen who helped build the country; one is a woodcutter, a carpenter who helped construct and build the country; and, in a place of honour under the Prime Minister's office, is the face of a miner because there was a time when miners mattered to the government. There was a time when it was recognized that those people contributed.

Today we stand in the people's House, in the House of commoners, and debate how to make them adjust in the new economy.

Shame on the government. Shame on the policy. The shame will follow it. The government will take its place beside the Dominion Steel and Coal Company which called in the army to shoot the miners when they tried to strike for a decent wage. The government will place its name alongside those companies that exploited and then put out of work the Cape Breton miners.

We will survive as we always have. However, I do not think the Liberal government should come knocking on the door of Cape Breton. It might be strange to see the Prime Minister who is now out of the country. It is interesting that since the whole package was announced, we have never seen the Prime Minister visit Cape Breton except maybe for a game of golf. When he did that he did not do it in the industrial heartland. It would interesting to see the Liberals come to Cape Breton and speak to the miners eye to eye and tell them that they have to adjust to the new economic forces because this is the new Liberal Party.

It is a shame on the House, a shame on the memories of Liberal cabinet ministers for whom Devco represented an ideology and a shame for the people in my riding.

[Brent St. Denis, Liberal, Parliamentary Secretary to Minister of Natural Resources]

Mr. Speaker, as with previous speakers, I listened carefully to the member for Sydney—Victoria who spoke passionately about the people and communities he represents. That is what we expect in the House and we appreciate that.

That being said, there was a certain element of exaggeration in his comments, although he did not exaggerate the importance of this issue to the communities and the miners. I come from a mining area myself. I live in Elliott Lake and I represent 60 communities, many of which have a history of mining. Some are still in mining today. Mining is important to our area.

It is important that a few things be clarified. One of the most important points is his reference to section 17(4). He was lamenting that Bill C-11 would delete all of section 17, including section 17(4), from the bill. He knows, as all members who are following the debate know, that will have no bearing whatsoever on the grievance. I will not comment on the grievance except to say that the grievance process will continue. The removal of section 17(4) will have no bearing whatsoever. The minister said as much in his speech.

As far as the economic development responsibilities of Devco, he knows that many years ago that responsibility was transferred to the Enterprise Cape Breton Corporation. He tried to make a good point but he failed on facts.

He mentioned Mr. Pearson who was the member for the riding I now represent. I am proud and honoured to represent the area that he represented. He made reference to a particular book which stated that the government at that time would not adhere to a rigid timetable.

Well, I hardly think that 30 years later suggests that a rigid timetable was in mind at that time.

I again emphasize that the government has found a balance between the views on the left and the views on the right of those who would say “let us look to the past as we go to the future” and those who would say “we should have closed the mines down 20 years ago”.

[Peter Mancini, NDP, Sydney—Victoria, NS]

Mr. Speaker, I am glad to respond to this because I think the member's history needs a little correcting.

There is something the member failed to mention. He talked about a 20 year timetable and the 30 years it took to phase out the coal industry, which was the original intent, but the reality is that was the intent and the government began to take steps in that direction.

What happened in the 1970s was that there was a determination made in 1974 and again in 1978 to expand the coal mines because it was necessary for the betterment of the country. This government, which is now phasing out the coal industry, did make an original plan in the late sixties to phase out coal, but then it came into my community and into my schools saying that there was a 25, 35 or 45 year career path in the coal mining industry. Young people believed their government members who said, “Come to work for us and you will have a job for life”. That is the covenant that was made. That is the bargain that was struck.

When it comes to talking about history, let us not forget the handshake that was extended to the young men of Cape Breton who were told that Canada needs their coal and that they would have a job there forever.

The member is right that the original intent was to phase out the coal mine, but for him to say that it took 30-some years, there is a little interruption there and that is when a promise was made. It was the generation of today's miners' fathers who were told in the sixties that the coal mines would be phased out, but it was the next generation who was promised something different and they were promised that by Liberal governments.

I take the member at his word. I think he is proud to represent Lester Pearson's former riding, but I suggest he reread some of the speeches of his predecessor to see what he would have done in this situation.

[Dave Chatters, Reform, Athabasca, AB]

Mr. Speaker, I listened carefully and I certainly appreciate the comments of the member. Being a native Cape Bretoner, certainly his comments are from the heart and very relevant. He gave great voice to the concerns of the working people and the miners of Cape Breton, but there are a couple of areas I am still kind of confused about.

What exactly is the position of the member and his party when it comes to the future of coal mining in Cape Breton? Does he support the closure of the coal mines or does he not?

Further, I would like to hear the member's views on the proposal by the hon. member for Broadview—Greenwood who expressed such confidence in his minister's ability to turn Cape Breton into the Hollywood of the north. We have some wonderful, talented people from Cape Breton, certainly Hank Snow, Rita MacNeil and some others come to mind, but is that the future of Cape Breton? I wonder how much confidence the people have in that kind of a proposal or in the idea of turning Cape Bretoners into bureaucrats working for the government, as has been done in so many other parts of Atlantic Canada.

Last, what would his party's position be with the idea of the private sector being allowed to use the world-class pier in Sydney, Nova Scotia, which belongs to Devco, for the import and export of value-added products from the massive oil and gas reserves off the coast of Nova Scotia and Cape Breton and using the free trade agreement to access the markets in New England for those products that would perhaps be manufactured in Cape Breton and Nova Scotia?

[Peter Mancini, NDP, Sydney—Victoria, NS]

Mr. Speaker, it is a long question and much to cover. Let me start by saying that nobody in Cape Breton is saying that the coal industry has to go on for ever and ever. The reality, however, is that we were told on January 11 there would be a shutdown of the industry. We were told that there would be community consultation in that regard. Sixteen days later a package was presented with no consultation, with no discussion. It simply was done as is.

As to the member's comments about talented Cape Bretoners, he mentioned some of our singers and songwriters. I suggest he read a new best seller called No Great Mischief , written by Alistair MacLeod from the coal mining town of Dunvegan.

The title is an interesting one. It comes from General Wolfe who, when he used the Highlanders in the battle on the Plains of Abraham, said “Send the Highlanders over first; it is no great mischief if they fall”. I think Cape Bretoners have felt for a long time that the attitude of the government is to send them over the wall first; it is no great mischief if we fall.

[Chuck Strahl, Reform, Fraser Valley, BC]

Mr. Speaker, it is a pleasure to speak to the bill and specifically to talk about the future of Devco and some of the problems in Atlantic Canada. I have been listening with interest today to some of the debates by people who live in the area. I respect much of what they have had to say, especially the parts that dwelt upon the work ethics and the good character of the people of Cape Breton.

I used to work in the logging industry and always thought that was pretty tough, but from the times I spent going down in mines to have a look at them and so on I was very impressed with the hard work and the good work ethics of people who work in such situations. There is not much doubt about that. The members who are closely associated have been speaking on that. Their tributes to the people in their ridings are well taken.

Obviously we have to be concerned about those workers and those people, but let us do it without doubting the hard work and the work ethics of the people in the area. The bill does not bring that into question. The question is not about whether or not these people are hard workers. Obviously they are. It is a tough life and it is a tough type of work.

We are wondering about and debating today the best way to create long term wealth for the people in this area. What is the long term answer? Is it to continue along the path that has been set out before them with Devco for the last 33 years? Is it in the best interest of both the workers in the area and of Canadian taxpayers in general to subsidize this industry to the tune of a couple of billion dollars?

I would argue that it is not. It has nothing to do with how hard they are working. It has to do with the quality of the coal they are mining and the impossible situation they are in. They will never be able to make money in that pit. It will never happen. It cannot happen.

As I was preparing my notes I thought of the situation in British Columbia where successive governments propped up an area of my province called Cassiar. We can all tell stories of what happened in Cassiar, but the similarities are fairly consistent with what is going on with the people affected by the closure of Devco.

Cassiar was propped up year in and year out for political reasons. Millions upon millions of dollars were sent into that area in an effort to prop up the local economy, to keep the mines open, and so on. It just did not work. It was a good effort and it was a good heartfelt concern for local workers.

The sad fact is that at the end of the line when finally the subsidies ran out not only did the workers lose their jobs. That happened, but because they had been strung along so long with the process of a never ending supply of government grants coming their way that when it finally shut down they not only lost their jobs. They lost everything. They lost their homes, their businesses, and what they felt was their future. They lost it all because it was an unsustainable level of government subsidies. It was just a matter of time until it was cut off.

I cannot remember how long Cassiar was subsidized, but it was certainly in excess of 20 years. When they finally pulled the subsidies it was a harsh pill for locals to swallow because of the huge disruption not only in their work lives but in their overall lives. Most of them had to move away.

I do not think we can make the case that continuing subsidies at the level we have been used to in Devco's case is sustainable in the long run. There are 1,100 workers involved. There are hundreds of millions of dollars in losses in a single year. We cannot sustain that level of subsidies. It is just not possible.

The question needs to be asked: When is it appropriate to subsidize a business? When is it something federal or provincial governments should entertain? There is a very short list of circumstances where government subsidies are appropriate.

I think first of a natural disaster. When the floods hit the prairie provinces and completely wiped out the crops in quite a large area it affected prairie farmers through no fault of their own in a one time disaster situation. They deserved our help. It was not their fault. It was nothing they did. Flooding is not a routine yearly problem. They deserved some help from us to tide them through that natural disaster. An earthquake would be another example where the government could step in and say that this is an odd situation with very severe economic hardship.

Another example is when there is systemic and long term inappropriate foreign subsidies that distort the trade situation. That is not the case with the coal industry. That is not why this mine cannot make money. It has to do with the quality of the coal, the access to markets and so on. It is not the workers. It is the fact that they are in an untenable economic situation that cannot be sustained. Again, it is not appropriate to subsidize it.

Why then has the government over the last 30 some years continued to subsidize this industry even when it seems to be hopeless? It is because successive Liberal and Conservative governments have felt that the best way to secure a vote in eastern Canada, in Atlantic Canada, was to throw money into subsidy programs. If it was working for unemployment reasons then every person in Atlantic Canada should have two or three jobs because they have spent like crazy in one bad government decision after another which has not resulted in increased employment.

Unemployment has been the highest in Atlantic Canada throughout my lifetime because the government subsidy programs the Liberals and Conservatives have been so in love with have guaranteed that their industries remain inefficient and uncompetitive for generations on end.

They do not diversify. They do not build the infrastructure necessary. They do not get into the business of the 21st century because they are looking for the subsidies of the 19th century. That is why they cannot break out of the endless circle of government subsidies combined with high unemployment.

When I was in Atlantic Canada last there was a headline in one of the Atlantic magazines: “Government Subsidies: Toxic Waste for Atlantic Canada”. That is what they called it, because wherever the subsidies went they showed an absolute corresponding increase in unemployment the more subsidies the government put into an area. Is that not ironic? We would think we were helping people by giving them money. We would think that if another $100 million could be thrown into this area surely everybody would have a job, but absolutely no correspondence could be shown between high government subsidies and high unemployment. That is the case.

People around the world have been able to break out of this syndrome. It can be done but it takes some leadership and some vision on the part of the government. The inappropriate government subsidies have to be cut when governments start to pick winners and losers in the free market system. They have to give generalized tax relief to allow businesses to thrive in a free market system. Unless we are willing to throw money at the free market system indefinitely—and we are seeing today that is not possible—the alternative is to lower taxes, lower bureaucratic red tape and allow businesses to thrive on their own.

We do not have to go far south from Atlantic Canada to see the juxtaposition between a high subsidy and high unemployment zone, which is unfortunately our Atlantic provinces. We do not have to go that far south to a physical environment that is not much different to see that the unemployment rate is much less, the employment rate is much higher and the standard of living starts to increase.

We could even go further south, Georgia for instance, and see what it did. It was once the basket of the United States economy. I have a clipping entitled “Atlantic Canada should take a financial lesson From Georgia”. The head of the program was in charge of giving out research funds. He could help people research and he could do R and D work, but he was not allowed to give out any government subsidies in Georgia.

He was commenting on the comments of the former Liberal Premier of New Brunswick, Frank McKenna, when he called on an end to subsidies to Atlantic Canada after he retired. I respect Frank McKenna somewhat because he did have his head screwed on straight. He knew the long term answer was not increased government subsidies because they are always subject to patronage, always subject to abuse, and they always picked winners and losers in a marketplace where they have no business being.

Mr. McKenna saw how Georgia, Ireland and other places around the world with high taxes and high regulatory government regimes had turned it around almost overnight by reducing taxes, reducing regulatory red tape and allowing businesses to thrive based on the free market system.

I think there is hope for Atlantic Canada. One day it will rise from the high unemployment situation it is in. It will not be because of government subsidies. It will not be because people are buying votes with a guarantee to keep a mine or a certain sector open. It will be because they will get their act together on the tax issue. People like Frank McKenna will come forward asking for an end to this arbitrary subsidy program and move toward a free market system.

That is not to say the public does not have an interest in it or that governments cannot have an interest. I think there will be an increasing need for public-private partnership whether we are talking about ports, airports or facilities of different sorts. We will be looking increasingly at public-private partnerships. Of course public money will be involved. We will also be looking for private money because we will need more money than we could ever possibly spend out of the tax purse. We will need private investment to make things shine in Atlantic Canada.

We will need to sort out basic things in Atlantic Canada as in the rest of Canada like the fallout from the Marshall decision as an example. It did not take very long for the Marshall decision to ripple right down into the Sable Island gas issue. It took only a couple of weeks after the decision for another appeal board to strike down the consultation side, on whether or not they consulted enough on the pipeline for the Sable Island gas project. The board said that they had not consulted broadly enough with the Mi'kmaq people, that consultation was inadequate and that they had to start over again. They better get that settled.

Atlantic Canada has a very bright future. Its greatest export over the last generation has been its young people. It has a chance to repatriate not only those young people, but to woo people from across Canada and around the world if it has a vibrant economy.

Not only Sable Island gas, but the new gas discoveries are going to be the basis of a new, broadened and more productive workforce. It will not be based on government subsidies but on the fact that it will have access to materials, natural resources and the technology that is all part of the modern natural resource industry.

It is going to have to quickly settle this jurisdictional problem of whether we have equal access to natural resources, or whether we have access based on ethnicity or race. That issue has to be settled. I am not saying it is absolutely one way or the other. I am saying that the government should not leave that open as it is right now. The federal government has basically abdicated its role and shrugged its shoulders.

The Minister of Indian Affairs and Northern Development has said that he thinks it means open access to all natural resources, including wood products and access to the mines in Atlantic Canada. That is quite a statement, but I do not think the people in Atlantic Canada, who are looking to finally break out of this high unemployment and high subsidy business they have been in for years, think that is the way. They want this clarified.

People in Atlantic Canada want to see where we are heading as to the allocation of natural resources. They want to see whether we are going to divvy it up based on ancestry or based on the need to access the products equally among all Canadians. That will have to be settled in Atlantic Canada. Once again that will do more to take that uncertainty out of the system which will allow the free enterprise system to do its part. Hopefully in my lifetime, and hopefully within the next decade, it will result in a reversal of the sad fortune Atlantic Canada has been facing for quite some time now.

In case people are wondering why I am so hip on this idea that grants, loans and so on should be given based on need rather than on political expedience, I will refer to a couple of newspaper articles which were written back in 1993, the year I was first elected. The articles extensively quote the Prime Minister who is in his home town. He talked about government grants. This is the problem with them. In general they do not go toward the purpose originally intended.

The Prime Minister said “You vote for the Liberals, Saint-Maurice wins with Jean Chrétien”. What did it mean? An October 1993 article reads “At each public appearance in the region, Wednesday night and yesterday, the Prime Minister reminded them that he will probably have enormous clout as Prime Minister to pull the government strings. He said `When the dossier for Saint-Maurice lands on a cabinet minister's desk, need I say more', he says to rounds of laughter during the meeting”. That is a nice make work project. When a dossier lands on his desk or a minister's desk. And it says across the top that this is for Saint Maurice. “Need I say more, it is a done deal. It is going to be good for Saint Maurice”. Why? Because they need it? Because it is based on objective criteria? No. It is based on buying votes.

Here is a headline: “I'm not a traitor, says the Prime Minister, I am Santa Claus”. That is an interesting concept for a prime minister. I do not think he is a traitor, but he said that he was Santa Claus and that he had the answer. “If you know me” says the big guy, “I can get you some grants. When it comes across my desk, it is a done deal”. When I first saw that, I thought that may be pushing it. Maybe that would not really happen. Maybe he was just joshing.

Let me run down a list of what happens with government grants when the Prime Minister is allowed to pull the strings.

[Brent St. Denis, Liberal, Algoma—Manitoulin, ON]

Mr. Speaker, I rise on a point of order. I would ask for your judgment on whether the member's comments are relevant to the very important debate on Bill C-11.

[The Acting Speaker (Mr. McClelland)]

As the parliamentary secretary is aware, I just replaced the Deputy Speaker not moments ago. However, knowing the opposition whip and his knowledge of parliamentary procedure, it would seem utterly unbelievable that his comments would not be relevant.

[Chuck Strahl, Reform, Fraser Valley, BC]

Mr. Speaker, it is very relevant when I talk about grants in the Prime Minister's riding because we are talking about job creation grants. Devco has been operating for the last 33 years with $2 billion in grant money from successive governments. During that time governments have tried to argue that job creation grants, $2 billion worth, are an excellent way to promote full employment. It is $2 billion later and now everybody is going to be laid off.

As another example, the same thing is happening in the Prime Minister's riding. I will quote myself. It is very relevant. It made the front page of the National Post a week or two ago. Let me just go over this again for the benefit of the House.

There is only one job creation grant in the entire country that ended up in a trust fund over the transitional jobs fund, one grant in the entire country. That trust fund proved to be illegal. It happened in only one place and that was in the Prime Minister's riding. It benefited only one person and it was not Santa Claus. The person it benefited was Claude Gauthier, a man who bought $500,000 of the Prime Minister's land and his golf course. He gave $10,000 to the Prime Minister's personal re-election campaign. He got a $6 million CIDA grant. That would all be fine, but the problem is that the jobs created in that area went from 115 to 45.

Grants like this do not create jobs; they create dependency and they create patronage. That is why we are in the situation we are in today, excessive government grants over a long period of time with no long term plan to get out of it.

[Brent St. Denis, Liberal, Parliamentary Secretary to Minister of Natural Resources]

Mr. Speaker, I believe the member for Fraser Valley was straying a bit, but I respect your ruling that his comments were relevant. I am sure there would not be very many members, if any, on this side of the House who would think they were.

Earlier on when he was a little more relevant in his comments he referred to the state of Georgia in the U.S. and the measures taken to spur individual creativity and investment. I suggest that his comments in that regard would best be given to the province of Nova Scotia because in his example that would be a state jurisdiction and in our system, the equivalent would be the province. I recommend that he pass those ideas on to the province.

The member's comments highlighted very graphically the difference between the left and the right and the further proof to my thesis that the Liberal government has found that right balance in the middle. The member would have us believe that total worship at the altar of free enterprise would answer all the problems of society. Those on the left would say that total devotion to socialism would answer all the problems of society. I say to the House and to the hon. member that it is the balance we have brought to government that has brought us closer to the right solution.

I will not claim and I do not think anybody can claim that any government is perfect, but I think one would have to go a long way to find a more balanced approach to governance than we have seen with this government.

[Chuck Strahl, Reform, Fraser Valley, BC]

Mr. Speaker, I think I did try to paint in the limited time available to me that there is a role. I said there was a role for the public sector. I hope the member remembers my comments about the public-private partnerships which I think will be inevitable in areas like Atlantic Canada that have an infrastructure deficit. I do think there is a role for the public sector. I have maintained that.

Getting back to the example of Georgia, it is interesting that it changed the constitution. An odd little clause says that it prohibits subsidies to businesses in Georgia. It is prohibited in the state constitution. Tax breaks are okay as long as they apply to all businesses, not just to hockey teams, not just to one specific favourite of the minister, but they have to apply to all businesses. What is the result? Over the last 20 years, Georgia's economy has grown 150%. The Canadian economy has grown by 45%. Even in the United States it has only grown by two-thirds.

I do not claim that Maine is the be all and end all of a perfect American state, but even in Maine where similar programs are in place its unemployment rate is only 8.5%, half of what it is just north of the border. It has the same type of geography, the same type of logistical problems yet its unemployment rate which is a key determining measurement factor is much less.

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

Mr. Speaker, I heard my colleague talk about patronage and how that happened in Atlantic Canada. I have to say that I agree with him.

Having lived on Cape Breton Island all of my life, we have been the epitome of patronage over the course of the last 10 to 15 years. I refer to the Liberal patronage under the auspices of ACOA which we have all come to know and which some love very well. The majority of Atlantic Canadians have no use for ACOA because they have not been politically affiliated with the government to access any money.

Cape Breton Island has had make work projects for a very long time. Under the former ACOA minister we had what I refer to as boardwalks to nowhere which have nothing to do with sustainability or economic development.

Having said that, there have been serious failures on behalf of the Liberal government with respect to commitments to Cape Bretoners and the individuals who have decided to live there. Is the hon. member saying that we should make the decision now that that is not the path we are going to take any more and that we are going to leave them out in the cold?

Some of my constituents are in very desperate situations. I talk to them on a regular basis about their not having money for things such as school supplies. I believe that is the direct result of patronage. There is a saying in Cape Breton Island that it is not what you know but who you know.

It is recognized that that has been the major problem in Atlantic Canada and certainly in my part of the country. We agree that we have to chart a new course in terms of commitment. Would the hon. member agree that we have to be committed right now to dealing with the crisis that is facing Cape Bretoners which has been due to the lack of leadership and commitment, and as the member said, the buying of votes in Atlantic Canada by the government?

[Chuck Strahl, Reform, Fraser Valley, BC]

Mr. Speaker, I sympathize with the situation. I see it in pockets in other parts of the country as well. Cape Breton is a large enough area and it is in our folklore in Canada. Even though I am not a part of Cape Breton and never have been, it is a little pocket of Canadiana we are all proud of in some special way. I do not know exactly why, but it is there and we are focusing on that today. We also see it in pockets across the country in other natural resource areas. I mentioned Cassiar as an example, which virtually does not exist anymore. There are pockets where that happens.

I went to the region a couple of years ago during the general election of 1997. Our candidate took me down the road. He did not win. He did not even come close, but he showed me something which was built with an ACOA grant on one side of the street during the reign of the Liberals for a Liberal. Then he showed me that another guy had built a new roof for his hotel when the Tories were in power. I said that it could not be that bad. He said that the way it works is, if you do not know the guy at the top, you do not get anything, and that is just the way it goes.

Coming from western Canada it was just too bizarre for me to believe. I could not believe that a system could be run so corruptly. I sympathize with the NDP because it has not been in power in this place, so it has not been able to pull those strings. It is a tribute that the NDP got elected. That is an amazing fact.

The truth is that if the solution was an ACOA grant or a descendant of ACOA, then I would say we should have a look at it, but I cannot imagine a system set up along the lines of a government grant program that is anything like what we had that would allow free market forces to apply. I am concerned that no matter what the program and no matter how good the intentions, whoever is pulling the strings will still be that politicized, that partisan in nature, will not allow the actual economy to take over, and it will still get sidetracked.

[The Acting Speaker (Mr. McClelland)]

We have time for a quick question from the member for Yorkton—Melville.

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

Mr. Speaker, I thank you for giving me a few minutes.

I have been sitting here all day listening to this debate and becoming educated on an issue I know very little about. I am really astounded at the amount of money that has been spent on Cape Breton. Two billion dollars is quite a bit of money to a small prairie boy.

The member talked about Santa Claus giving away all this stuff. Santa Claus gives away his own money. Where does the money come from that is given to these people? I come from Saskatchewan and the prairie farmer is—

[The Acting Speaker (Mr. McClelland)]

That was a great question. Now there is time for a quick response.

[Chuck Strahl, Reform, Fraser Valley, BC]

Mr. Speaker, I think I can answer the question. I know the member for Yorkton—Melville is concerned about the situation with the farmers on the prairies and the fact that when the Prime Minister says to the people in his riding “I am no traitor, I am Santa Claus” it may be some comfort to the people in that riding, but most of us realize that the money comes from somewhere. A lot of the money the Prime Minister has handed out has come from the backs of Cape Breton coal miners, from prairie farmers, from loggers in my riding and from people around the country. It has been sent to be used or misused in ridings that the Prime Minister thinks—

[The Acting Speaker (Mr. McClelland)]

I am sorry, but we are out of time.