Debates of March 19th, 1999

Bank Act

[Paul Martin, Liberal, Minister of Finance]

moved that Bill C-67, an act to amend the Bank Act, the Winding-up and Restructuring Act and other acts relating to financial institutions and to make consequential amendments to other acts, be read the second time and referred to a committee.

[Jim Peterson, Liberal, Secretary of State (International Financial Institutions)]

Mr. Speaker, I am very pleased to rise in the House today to speak to Bill C-67 at second reading stage, I hope with the support of this House that this bill will go to committee.

We are moving forward on second reading today to allow foreign banks to establish certain types of commercially focused branches in Canada. Establishing this branching regime will undoubtedly enhance competition for banking services within the Canadian market. This will help to provide a wider and better range of financial services for all Canadians.

The essence of Bill C-67 is that it will remove unnecessary regulatory barriers by allowing foreign branches to offer specified services in Canada through branches rather than requiring them, as at present, to set up a separate subsidiary in Canada with all of the regulatory implications and capital implications that that involves.

The major benefit that we will be giving to the foreign banks coming to Canada is that they will be able to draw on the capital base of their parent. They will be able to draw on their global capital in order to back up their Canadian lending operations.

They will be spared as well the expense of having here in Canada a separate board of directors and the different committees that are required by our regulators to ensure that they are compliant.

This will give to foreign banks greater flexibility in how they structure their Canadian operations. We believe this to be a useful step to help stem what has been over the years a withdrawal of foreign banks from Canada.

Yes, there has been a reduction in the number of foreign banks in Canada since we allowed them to come in here in a subsidiary form in 1980.

The cost-effectiveness of foreign banks operating in Canada is noticeably lower than that of the Canadian banks. The reason given most often for this difference is the cost structure relating to the activities of foreign subsidiaries.

But it must also be acknowledged that our Canadian banks are truly competitive worldwide, and this may well be the real reason.

A considerable number of foreign banks have cut back on Canadian activities, or pulled out of Canada altogether. Between 1990 and 1998, the number of foreign banks with subsidiaries in Canada dropped from 57 to 45.

I do not believe that this is something we should ignore. Any unwarranted damper on the ability of foreign banks to maintain a presence in Canada runs counter to our efforts as a government to encourage competition in the market for financial services. We want and need this competition in order to ensure maximum choice and value for consumers of financial services in Canada.

We believe that maintaining the status quo would likely rule out the prospect of more new foreign banks establishing operations in Canada. Simply put, they have plenty of opportunities throughout the world to expand their efforts and their operations. Their investment choices and decisions will be made on the basis of where they can get the best return on their capital. Removing some of these impediments will enhance the capacity of these foreign banks to develop higher returns because of the lighter regulatory burdens.

I would also point out that not only throughout the G-7 but throughout the entire banking world, there are only two countries today, and unfortunately Canada is one of them, that do not permit this type of foreign bank branching in the host country.

In order to remedy this, in February 1997 the government announced its intention to allow foreign banks to open branches in Canada. The following September, it published a consultation paper on the foreign bank access policy, followed by extensive consultations with all interested parties, as well as an examination of the regimes other countries had put in place in connection with foreign banks.

The regime set out in Bill C-67 is the outcome of these consultations. The key parameters of the proposed framework are similar to those of our main trading partners. The proposed regime will enable foreign banks to set up subsidiaries in Canada which would focus mainly on commercial banking activities and lending operations of a more general nature.

The regime would offer two options to foreign banks wishing to establish branches in Canada. They could establish either a full service branch or a lending branch.

Let me begin by explaining that neither type of branch would be permitted to take retail deposits. That would mean they would be limited to deposits of $150,000 or more. There is very good reason for this. If foreign bank branches were allowed to take retail deposits, then we could not offer them as attractive a regulatory regime. We would have to impose the full measure of regulations in order to protect those depositors.

In any event, foreign banks already have the option in Canada to take retail deposits by setting up a fully regulated subsidiary. This option remains open to them. Let us recognize right from the start that most foreign banks will not set up retail operations. They have indicated that their interest is in expansion in the commercial wholesale banking market.

Accordingly, these foreign banks would not be permitted to take retail deposits and since there would be no Canadian retail depositors' funds at risk they would naturally face this lighter regime of regulations.

Looking at the two types of branches that we are allowing, lending branches and full service branches, it is only the full service branches that will be permitted to take deposits of greater than $150,000. The lending branches will not be permitted to take deposits, large or small.

As well, the lending branches would be restricted to borrowing only from other financial institutions. As the name implies, the lending branches, the most lightly regulated of these branches, would be in the business of providing loans to Canadians.

The availability of two options for branches will make the regulatory framework more flexible. Regulatory requirements may be adapted to the nature of the activities of foreign banks in Canada.

Since lending branches will not be able to accept any deposits, they will be subject to fewer regulatory requirements than the full service branches.

Foreign banks choosing to operate lending branches will not be able to operate either a deposit branch or a full service branch. However, they will be able to operate other types of financial institutions that do not take deposits, such as insurance companies or other financial services. Foreign banks choosing to operate full service branches will also be able to operate deposit taking branches.

These options should be attractive to foreign banks already operating in Canada and those perhaps contemplating setting up here. I have had indications from a number of foreign banks that, with the new Canadian system, they will consider setting up business here.

The manoeuvring room associated with these options and the more flexible regulatory requirements adapted to each category of activity should reduce the costs to foreign banks of operating in Canada.

What does this mean for Canadian consumers of financial services? Since the foreign bank branches would be prohibited from taking retail deposits they would not be competing with fully regulated foreign bank branches or domestic banks in the retail deposit market.

However, we believe that they can make a positive contribution to the Canadian market in terms of lending to small and medium size businesses, corporations and some areas of consumer lending such as, for example, credit cards.

We believe in addition that the domestic banks stand to gain from liberalization. More often access to the Canadian market helps to promote fair and open treatment of our Canadian banks abroad and from 1980 when we allowed foreign banks to come into Canada this of course was always the main—

[Nelson Riis, NDP, Kamloops, BC]

Mr. Speaker, I have to rise on a point of order to ask my hon. friend a question. He just said that this new legislation will provide many opportunities in the retail banking sector, particularly for small business. How can he say that with a straight face?

[The Deputy Speaker]

I am afraid the hon. member for Kamloops, Thompson and Highland Valleys knows that is not a point of order.

[Jim Peterson, Liberal, Willowdale, ON]

Mr. Speaker, we have seen how foreign competition such as the Wells Fargo operations directed at small business have actually sparked some lending in Canada to small businesses which is not based on balance sheets.

We have seen how foreign operations through electronic banking here in Canada have encouraged Canadian banks to get into all of these areas. We have received indications from a number of these foreign banks that the areas they will concentrate on are certainly commercial; big companies of course, but also hopefully the smaller businesses that may not have options under existing regimes.

Let me talk about the conditions for entry. I emphasize that the government will maintain control over which banks will be allowed to enter our market. Let me highlight some of the standards they will be required to meet.

A foreign bank must obtain the approval of both the Minister of Finance and the Superintendent of Financial Institutions. As a condition of establishing a branch in Canada, the foreign bank must be regulated in its home country in a manner satisfactory to the superintendent. Furthermore, we will be looking to see whether it has sufficient size, experience and financial health to support its branch operations in Canada because, above all else, we do not want to see banks in Canada going under, even if they are not taking retail deposits.

More specifically, a foreign bank wishing to branch into Canada must generally have a proven track record in international banking, must have demonstrated a favourable financial performance over the last five years and must be widely held. These are the guidelines which are in place. In addition, foreign banks wishing to set up a full service branch must have a minimum of $5 billion in worldwide assets.

Safety and soundness in the financial sector is our top priority. Let me explain how these banks would be regulated. First, they would be required to maintain a minimum deposit with an approved financial institution in Canada. For full service branches the deposit would be the greater of 5% of the bank's liabilities or $10 million. Since lending branches would have no depositors but would only be permitted to borrow from other financial institutions, they would be required to maintain a lower minimum deposit of only $100,000.

The only way to establish a foreign bank in Canada is by establishing a subsidiary, not a branch, and presently the minimum deposit is $10 million. The bank's parent is naturally incorporated in another jurisdiction and its primary supervisor would be the authorities in its home jurisdiction. However, its business in Canada would be supervised by the superintendent. OSFI would be given adequate regulatory powers to carry out this role, including the ability to order that a branch maintain specific additional access with an approved Canadian financial institution if this were deemed necessary to protect depositors and creditors of the branch.

In the case of insolvency, OSFI could take control of the assets of the foreign bank which are in Canada. If the proceeds from any liquidation that might occur were not sufficient, the depositors and creditors could seek recourse from the liquidator of the foreign bank in its home jurisdiction. While foreign bank branches would be exempted from many regulations, I emphasize that they would be subject to all of the rules that we have in place for the protection of consumers, such as regulations on disclosing the cost of borrowing, interest and other charges.

I will touch briefly on four technical changes contained in the bill. First, if the foreign bank is a member of the World Trade Organization, then it would no longer have to seek our approval to establish individual branches in various different locations in Canada. In other words, we would remove one regulatory impediment to their further expansion.

Second, there are proposals to eliminate the reciprocity provisions in the financial institutions statutes to reflect the most favoured nation principle of the WTO. Under this principle, parties to the agreement must not discriminate among financial institutions from different countries and must grant most favoured nation treatment. This means that Canadian firms can expect to receive the same treatment in other jurisdictions as those host countries offer to any other foreign institution coming to them.

A third amendment will be that OSFI can accept delegated legislation or regulatory responsibility from the provinces in Canada. We are trying to harmonize a lot of the regulatory laws and rules governing financial institutions in Canada and this is a major thrust in that direction.

There are federal rules and there are provincial rules. This causes unnecessary red tape. We will continue to try to eliminate this overlap and duplication, this totally unnecessary burden, by offering to take over the regulatory functions of provincial regulators so that we have one regime.

We are working to encourage the provinces, where they do not want to give up regulatory control by delegating it to the federal government, to at least harmonize provincial laws among the 10 provinces and territories and with the federal government so that at least people can understand that there is only one regime they need comply with.

Last, an amendment to the law would provide authority to OSFI to make regulations restricting the disclosure of supervisory information by financial institutions.

We are attempting to enhance the competition in our financial services sector. This is in accord with what the MacKay task force recommended, with what the Senate committee recommended, with what the House committee recommended and with what the committee chaired by the hon. member for Trinity—Spadina recommended. We are proceeding with this and we look forward to this law being passed.

Let me conclude by saying something about the entire banking structure in Canada. Our domestic banks are in favour of this legislation. It will subject them in certain areas of business to even greater competition from abroad. That is a sign of the confidence which they have in their own future.

I want to put on record very clearly that I could not be prouder than to be the secretary of state dealing with Canada's financial institutions. By all objective criteria, Canada's financial institutions are among the finest in the world in terms of the service they offer their customers and in terms of what they have contributed as an industry to our country.

Our banks, for example, employ directly over 200,000 Canadians. That does not include the thousands upon thousands of other jobs which they generate, such as those found in marketing, accounting and in other areas. They are the most highly taxed industry in Canada. Forty per cent of the their income comes from abroad. They have penetrated foreign markets throughout this world.

In spite of the fact that 40% of their income comes from abroad, fully 85% of the global taxes they pay are paid right here in their home jurisdiction, Canada. Ninety per cent of their global jobs are in Canada.

I would defy members of this House, if they wanted to set up a new industrial strategy for Canada, to find an industry which is contributing more in terms of exports, taxes and jobs than our banking sector.

Maybe it is in fashion to criticize our institutions. I am not saying that they are perfect any more than I am perfect. However, this does not mean that we will renounce our obligation to continue to work with all groups in Canada to make sure that our banks provide not only world class service, but that they are world class players.

Let us look objectively at what the banks have achieved in Canada and around the world. Let us give them the credit that is their due.

I look forward to the comments of members, to the bill going to committee and to its eventual passage into law.

[Val Meredith, Reform, South Surrey—White Rock—Langley, BC]

Mr. Speaker, it is my pleasure to be speaking to Bill C-67 which amends the Bank Act to permit eligible foreign banks to establish branches in Canada. The bill also amends the Winding-up and Restructuring Act and a number of acts relating to financial institutions, and makes consequential amendments to other acts. In plain English, Bill C-67 would allow foreign banks to open branches in Canada but under strict regulation.

The bill was required as part of the commitment Canada made to the World Trade Organization. We are happy to support the efforts of the government.

I will be splitting my time with the member for Esquimalt—Juan de Fuca. You will find unanimous consent for me to do so, Mr. Speaker.

[The Deputy Speaker]

Does the House give its unanimous consent so that the hon. member may split her time?

[Some hon. members]

Agreed.

[Val Meredith, Reform, South Surrey—White Rock—Langley, BC]

Mr. Speaker, we will not be seeing foreign banks on every street corner as we do our Canadian banks. The new full service foreign banks are restricted to taking deposits of $150,000 and up, so that will eliminate the everyday person who does not have that kind of deposit to make. Basically that is out of reach for the vast majority of Canadians. They would cater to those individuals who receive the largesse of the government.

New lending banks will not be permitted to accept deposits or borrow except from other financial institutions. It is hoped that these foreign banks will serve as sources of funds for both small business and credit card users.

Both the full service and lending branches will be allowed access to Canada's clearing and settlement system with the approval of the Bank of Canada. An analysis of the bill would show that there will be more choice, but for the most part choice is limited to businesses and wealthy Canadians.

The reality is that few foreign banks have any interest in coming to Canada to set up expensive brick and mortar branches on the main streets of our communities. In today's world of e-commerce banks want to compete electronically. However the average retailing banking customer will benefit from the trickle down effect.

More banks will be fighting for business customers which means that more money will be available for customers. If the banks lose some of their small and medium size customers they will be more competitive going after the average private consumer.

Most other countries in the world allow direct foreign banking. The Liberal government has been promising the same for Canada since February 1997. It has taken two years to introduce the legislation. We are pleased to see it is finally here today.

As mentioned the World Trade Organization has been the impetus for these measures as there is a June 1999 deadline to comply with the agreement.

Some of the most ardent protectionists believe that we must protect Canadian banks. They believe that Canadian businesses cannot compete without protection. This attitude has been one of the factors in the drop in Canada's productivity over the last 20 years. In today's global economy it is crucial for all sectors of the Canadian economy to compete internationally. That includes facing foreign competition at home.

It was less than 20 years ago that foreign banks were allowed to have any access at all to the Canadian market. However these banks have had to set up separate Canadian subsidiaries that were not connected to their parent banks in terms of capital, governance and accounting.

There has not been a steady growth in foreign banking activity in Canada. In 1987 there were 59 foreign banks operating in Canada. Last year there were only 45. In 1990 foreign banks had a 12% share of total banking sector assets. Last year that was down to 10%. This means that Canadians and Canadian businesses have been deprived of a large pool of capital. How will foreign banks react to the legislation? Only time will tell.

While the protectionists rail against the entry of foreign banks, we in British Columbia have been living with the largest subsidiary of foreign banks for over a dozen years. The Hongkong Bank of Canada was incorporated in Canada on July 1, 1981. It rose to prominence in western Canada in 1986 when it acquired the Bank of British Columbia. With this acquisition the Hongkong Bank of Canada went from being the 20th largest bank in Canada to the 9th largest bank.

In 1988 the Hongkong Bank of Canada bought Midland Bank Canada and in 1990 it acquired the Lloyds Bank Canada. These last two acquisitions provided the Hongkong Bank with retail branches across most of the country.

Despite the name, the Hongkong Bank of Canada is a subsidiary of HSBC Holdings of London, England, the fifth largest bank in the world. The Hongkong Bank of Canada is the largest bank in Canada and is headquartered in British Columbia. Both the chief operating officer and the senior executive vice-president were educated at the University of British Columbia. Thus many British Columbians have more attachment to this bank than they do to the Canadian banks headquartered in Toronto.

The Hongkong Bank of Canada is a good corporate citizen. In British Columbia some of the events it sponsors include the Whistler Winterstart Festival, the Okanagan Wine Festival and the Yuletide Lights of Hope fundraiser for the B.C. Children's Hospital.

More important, it has generally provided good banking services to its customers, both individuals and businesses, but what is most intriguing about the Hongkong Bank of Canada is that it has gone international with offices in Seattle, Washington and Portland, Oregon. This is the future of banking, banks that transcend borders in a global economy.

In summary, the official opposition supports the legislation even though it took the government more than two years to get it before the House of Commons. We support it because in the long term the presence of foreign banks in Canada will benefit all Canadians. Canadians should never fear foreign competition. We should have enough confidence to realize that we can compete in today's global economy.

If we could just get the Liberal government to dump its high taxation policies, Canadian business could be at the forefront of the global economy instead of trailing along behind. Bill C-67 is a good step in the right direction, but the government has a long way to go.

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

Mr. Speaker, it is a pleasure today to speak to Bill C-67. I thank my colleague for allowing me to share her time.

Bill C-67 was necessary to bring competition into the banking sector in our country. We have had for quite a few years banking centralized in the hands of a very few number of large banks which were subject to decreasing confidence in the eyes of the public. There is an increasing amount of scepticism as to what they are doing and whether they are servicing the Canadian public well.

By introducing these smaller banks or banks from other countries we are introducing an element of competitiveness that will actually decrease the monopolies we have had in the country for a long time. By doing that we will be able to hopefully decrease the cost to the Canadian public.

At the end of the day this is about trying to improve service and decrease costs to the Canadian public and to enable our economy to move in a much more aggressive and competitive fashion.

Unfortunately the new banks will be forced to receive deposits of more than $150,000. This is unfortunate because the banks will not be accessible to the average member of the public. That should have been changed in the legislation. Any new bank that comes into the country should be able to compete on a level playing field with other banks. All Canadians should have access to those new banks, not just small and medium size businesses and large corporations which will be able to derive benefits from them.

In the last 20 years the number of banks in the country has diminished. In the last 10 years the number has gone down by 10%. We do not think that is correct. Bill C-67 will increase competitiveness and thereby give companies a greater choice. As I mentioned the government could have and should have made a level playing field for the new banks so that the average Canadian would have access to this increased competition.

We applaud the regulations that there has to be the approval of the Minister of Finance, that there has to be an established customer compliance procedure, that all services have to be disclosed and so forth. However, I wonder whether or not the checks and balances the government is putting in place are good enough to ensure the solvency of those banks in their home countries.

We have seen banks in other parts of the world, particularly in Southeast Asia, collapsing because of gross mismanagement. We do not want those types of banks to be allowed into this country. I have not seen whether or not the appropriate checks and balances are there to ensure the banks coming into our country are not some fly by night institutions or institutions that are on shaky economic and fiscal ground. This is information the government will have to bring to the House to ensure a clean passage of the bill.

The hon. parliamentary secretary has made some very cogent points about the banks in Canada. There are a lot of myths surrounding banks, both positive and negative. The negative myth is that the banks are not paying taxes, that they are somehow taking money from the public and that they are not employing many people. The fact of the matter is that the banks provide a lot of taxes for governments. Some 80% of the taxes they pay are paid in Canada and 90% of the people they hire on a global basis are here.

However all Canadians have seen service charges go up. They have seen the banks introduce things such a tied selling. This is bullying and is an unfair practice. If the banks want the confidence and the support of the Canadian public, they better do a far greater job than what they have been doing in terms of letting the Canadian public know that it is giving good service for its money.

With the downsizing which is taking place many individuals who frequent banks have found services to be decreased. They are not happy with that. If the banks want the increased confidence of the Canadian public, as the international community has in them, they better been seen to be acting in the best interest of the public. Anything less will prevent them from having the things they want in the future such as bank mergers.

The banks aggressively lobbied the House and the Minister of Finance for the government to introduce and approve legislation which would allow them to merge. They did not do a good job of explaining to us and the public how the public would benefit from bank mergers. We want them to be internationally competitive, as the secretary of state mentioned.

However, the banks must explain to the Canadian public how the average person is to benefit from their expansion into mega banks. We want them to compete internationally but not at the expense of the Canadian public.

Bill C-67 is rooted in globalization and free trade. Again there are a lot of myths around free trade. The last Conservative Party leadership race showed clearly that putting forth the argument that free trade is bad for Canada resonates well among a significant part of our population, but is it the truth? We have actually benefited from free trade.

However, Canadians could have benefited more if the government had be able to give our Canadian companies a level playing field with other companies from around the world. The high taxes we have, the overregulation and the culture of dependence that governments instituted and supported within our country are having a deleterious effect on Canadian companies to compete on a level playing field with other companies from around the world.

If Canadian companies had that level playing, the benefits to Canada in terms of employment and a healthier economy would have far exceeded what we are seeing today. Unfortunately the government only did half the solution. It opened up international and domestic markets to free trade but did not do the other side of the coin which would have enabled companies to be competitive in that environment. >It opened up these companies to competition but at the same time tied one hand behind their back.

We have often heard in the House about the need to lower taxes, to decrease rules and regulations, to provide financing for education and to do innovative things to ensure our students will have the skills to be competitive in the future.

Finally, I would like to talk about the international financial institutions. The government, along with representatives from the IMF, should look at ways to deal with short term capital flows which were so destabilizing to the international economy last year. This will happen again. We need some kind of check and balance to make sure short term capital flows across the world will not have the destabilizing and destructive effect to not only economies but to people around the world.

There are some innovative things being done now. I challenge the Minister of Finance and the secretary of state to bring these ideas to the House now so we can have and support internationally a comprehensive plan to limit short term capital flows. Forty per cent of short term capital flows are moved in and out of countries within two days or less. In 48 hours large term capital can flow in and out of a country that can have a massive negative effect not only on the economy but on the people of that country. These can be long lasting.

Another issue concerns international financial institutions providing money to countries that are unstable and engaging in actions that profoundly affect international security. There are over 45 countries right now that are engaged in bloody, brutal conflicts where individual civilians are caught in the middle and pay the price 80% of the time. What fuels those conflicts and the purchase of those arms? It is cold, hard cash. Most of these countries rely heavily on international aid and moneys from international financial institutions.

By providing money through these organizations to countries that are purchasing arms to commit atrocities on certain groups within and outside their borders, we are actually providing the fuel that fires the wars and conflicts.

If we are able to deal with these conflicts, if we can prevent the situation in central Africa, the situation in Sierra Leone where people are having their eyes gouged out and their arms chopped off, the situation in Angola where the diamond producers and purchasers are fueling a conflict that is costing hundreds of lives every day, if we are to continue to support the regimes in the Sudan that are supporting a war that has cost the lives of hundreds of thousands of people, then we are almost as guilty as the people who are pulling the trigger in those countries.

If we are to deal with these situations in a pre-emptive way, if we are to prevent the bloody conflicts that are occurring around the world, we have to ask our representatives at the international financial institutions to prevent those moneys from going into the hands of those people who would purchase arms to fuel a fire to create international instability and conflict, death and destruction.

The last point I want to make is with respect to the United States. The United States I believe will not be paying up its dues to the United Nations as of May 1999. The money it owes is essential for the United Nations to function. If the U.S. does not pay up in May 1999, the U.S. will lose its vote. If the U.S. loses its vote, one can argue that it is a very unfortunate thing because it is a powerful country. More important, the billions of dollars that the U.S. owes to the UN will probably not be paid. What we will see is a potential significant collapse in the ability of the United Nations to engage in peacekeeping, peacemaking and international humanitarian operations in which it is engaging now that save millions of lives around the world.

I strongly advise the Minister of Foreign Affairs to work with the Minister of Finance and the Secretary of State for International Financial Institutions to bring up these issues on the international stage. If we do not do that, all of us will pay a price not only internationally in increased demands for a defence budget and an international aid budget but also at home. When conflicts brew and take place half a world away, they come home to roost right here at home, because there is an egress of refugees, some of whom will ultimately come to our shore, and there will be an increased demand on our own social programs.

It is not to say that we are somehow against individuals coming to our shores, but certainly people would like to live in their own homes, in their own countries and in their own culture rather than come to a world that is alien to them.

The failure to deal with this now will cost all of us millions if not billions of dollars and potentially the loss of human lives and probably Canadian lives too.

I implore members and ministers on the other side to deal with these issues internationally and do it now. We cannot continue to fail as we have in the past. It is resulting in increasing international instability and increasing destruction to economies around the world, which also affects our economy.

In closing, we will support Bill C-67. I will ask again that the minister look at the international implications of this bill to make sure that the small banks, the banks that are coming here, will have checks and balances to make sure that those banks are solvent back home. They should make sure that without a shadow of a doubt, banks that are on unstable grounds do not come into this country and somehow create great instability within our own economic system.

Last, they should ensure that the banks ultimately will be able to provide better, cheaper service to the Canadian public, because at the end of the day the thing that counts the most is to make sure Canadians will benefit from this bill.

[The Speaker]

I am told it is the turn of the hon. member for Sherbrooke to speak. Since statements by members are about to begin, perhaps the hon. member could wait until after oral question period.

The Francophonie

[Sue Barnes, Liberal, London West, ON]

Mr. Speaker, the Francophonie is a modern language, a culture that evolves, a sense of belonging and exchanges between the various communities in Canada that share a common language and culture.

Young people represent the future of the Francophonie and it is important to recognize their desire to live in French.

The Liberal government is counting on young Canadians to make a valuable contribution to the debate and to get involved in projects that will stir people into action, so as to protect and promote the French language and culture in Canada.

Highlighting the economic benefits related to the French language for businesses that are part of the Canadian and international francophone community, finding a niche for French in the world of technology, encouraging those who will take over, such are the goals.

Immigration

[Grant McNally, Reform, Dewdney—Alouette, BC]

Mr. Speaker, the immigration system is broken and the minister of immigration either cannot or will not fix it.

Honduran drug dealers are posing as refugees to sell crack cocaine on Vancouver streets. What is the government's response to the problem? The Liberal government says there is no problem and when the issue is raised by the official opposition it calls it nonsense. I guess any issue that involves B.C. is nonsense to these arrogant Liberals.

Yesterday the Liberals voted against shutting down refugee drug dealers in Vancouver. The Liberal member for Vancouver Kingsway voted against stopping bogus refugees from selling drugs to children in her community. She toed the party line and voted against her constituents once again.

British Columbians are concerned about the situation. The attorney general for B.C. is calling for action from Ottawa. The RCMP, Vancouver police and community leaders are all calling for action. Unfortunately no one in the Liberal government is listening and it wonders why it needs a western alienation rescue team, or should I say WART.

André Fréchette

[Darrel Stinson, Reform, Okanagan—Shuswap, BC]

Mr. Speaker, last week former chief page André Fréchette added another remarkable achievement to his career. Many colleagues will recall when we bid a happy retirement to my good friend in December, 1994 after 42 and a half years of service as a page.

Some 42 months later André bowled the perfect game, hurling 12 straight strikes for a score of 450 at five pin bowling in the Vanier Francophone Centre. He also achieved a triple of 1,000 points and even won the 50:50. Tonight he will be awarded some prizes but he says the best prize was making his grandson David proud of him.

David is celebrating his eighth birthday today and his grandfather says David is also becoming a good bowler.

André says he misses this place but he has been enjoying his retirement, including time for another favourite hobby, picking berries and turning them into jams and jellies.

Happy eighth birthday, David. Please give your grandfather a hug from his old friends here in the House of Commons and make sure he uses the number 42 on any lottery tickets he buys.

St. Joseph

[Bonnie Brown, Liberal, Oakville, ON]

Mr. Speaker, on Wednesday last many Canadians of various cultural backgrounds, including Mr. Speaker, came together to celebrate St. Patrick's Day, the feast day of the patron saint of Ireland.

Today, March 19, is the feast of St. Joseph, the patron saint of Canada. He is also the patron saint of fathers and the patron saint of workers.

His feast day has special meaning for all those who do work, both paid and unpaid, for all fathers and indeed for all Canadians.

St. Joseph has been honoured in Canada since the early days of our history, most visibly through the work of the Sisters of St. Joseph. They have built hospitals and nursed the sick for more than a century. They have taught young boys and girls in elementary schools but they are most famous for the education of young women in both high schools and universities.

Several women in this Chamber are products of the education provided by these dedicated nuns.

On the occasion of his feast I wish the Sisters of St. Joseph and all Canadians a happy St. Joseph's Day.

Rights Of Children

[Karen Kraft Sloan, Liberal, York North, ON]

Mr. Speaker, the European Network of Ombudsmen for Children urges governments to establish independent institutions to promote and protect the rights of children. This network welcomes the trend toward creating special offices to monitor and support the full implementation of the UN Convention on the Rights of the Child.

Children need a special office like a national children's commissioner to protect their human rights. Children lack a political voice as they do not have the right to vote. Children are particularly vulnerable. They are more affected than adults by the conditions under which they live and by the action or inaction of government. Canada's children need a national children's commissioner.

Elimination Of Racial Discrimination

[Gordon Earle, NDP, Halifax West, NS]

Mr. Speaker, racism wounds. It hurts, it stunts lives, it weakens us all.

Sunday, March 21 is the International Day for the Elimination of Racial Discrimination. The United Nations declared this day in 1966. Canada was one of the first countries to show its support for this declaration.

I am saddened to stand in this House, the first black MP ever elected from the province of Nova Scotia, knowing that discrimination on the basis of race still exists today and that it has negatively affected so many people in so many ways. We see it in legislatures, in our law firms and in our schools.

I am heartened however to stand in the House knowing that people all across my riding, my province and my country are working hard to end racial discrimination, especially young people like those working with the Youth Against Racism project in Nova Scotia. I also commend the organizers of the Harmony Brunch being held at the East Preston Recreation Centre in Nova Scotia.

The March 21 campaign for the elimination of racial discrimination aims to make Canadians aware that the scourge of discrimination exists in our communities. It also serves to inspire each of us to take action against racial discrimination.

Let us all strive to do our part, not just on special days but every day of our lives.

Sherbrooke

[Serge Cardin, Bloc, Sherbrooke, QC]

Mr. Speaker, it is with pride that I rise in the House today to point out that Sherbrooke is the best place in all the G-7 countries to locate a business.

With its highly competitive labour force and the many competitive advantages it affords businesses in all categories, Sherbrooke offers great potential as a business site.

In fact, a study of G-7 countries ranks Sherbrooke first among 64 cities in which industrial corporations are likely to locate. This study, which was released last Thursday in Ottawa by the internationally acclaimed KMPG, was submitted to the Minister for International Trade.

This is excellent news for all residents of the riding of Sherbrooke, including myself. Such recognition can only be a plus for the economic future of our lovely region.

Once again, I say bravo to the people of Sherbrooke.

Elimination Of Racial Discrimination

[Eleni Bakopanos, Liberal, Ahuntsic, QC]

Mr. Speaker, Sunday will mark the 10th Canadian campaign for the elimination of racial discrimination.

Although acts of ignorance, intolerance and racism are the sins of a few, their destructive nature plagues society as a whole. For this reason we must all play a part and take personal responsibility to fight the evils of racism.

All members of society, whatever their age and ethnic background, must be allowed to take their rightful place. This sends a clear message: Canadians reject discrimination in favour of respect, equality and diversity.

As a first generation Canadian, I have lived the enriching experience that is Canadian pluralism. While some individuals in this nation are quick to emphasize what divides us, I prefer to view diversity as Canada's greatest strength.

Only when we are able to live harmoniously in our own country will we be able to serve as a model internationally.

Canadian Pacific Railway

[Lee Morrison, Reform, Cypress Hills—Grasslands, SK]

Mr. Speaker, Canadian Pacific Railway has donated 1,600 kilometres of abandoned railway right of way to the Trans Canada Trail Foundation and is basking in the warm glow of its public spirited gesture. Time for a reality check.

Thanks to the gravel topped grade that runs down the centre of the land, thousands of tonnes of cinders dumped on it during the steam age and contamination from a century of leaching of toxic wood preservatives, the gift is essentially wasteland. For tax purposes CP valued it at $40 million and received a $13 million tax break. That break alone is three times the market value of the land and the company is relieved of its responsibilities to pay real estate taxes, suppress weeds and so on.

CP tries to justify the high price by referring to urban segments in Nova Scotia and B.C., but they are minimal. Shame on Revenue Canada for approving this scam.

St. John's Harbour

[Charlie Power, Progressive Conservative, St. John's West, NL]

Mr. Speaker, today alone, as was the case yesterday and will be again tomorrow, more than 120 million litres of raw sewage and municipal runoff will be dumped directly into the harbour of St. John's, Newfoundland.

The chemical and bacterial cocktail being thrown daily into St. John's harbour is really a national disgrace that could be corrected if government would demonstrate the political will to tackle this problem.

The waste water treatment system so urgently required by the city of St. John's could reduce phosphorous and nitrogen loadings by up to 80%, biochemical oxygen demand materials by up to 90% and bacterial loadings by greater than 99.9%.

I and my colleagues in the Progressive Conservative caucus applaud the efforts of the St. John's Harbour Atlantic Coastal Action Program. We join with the concerned citizens of the capital city of St. John's, as well as the city of Mount Pearl and the town of Paradise in urging the government to immediately draw attention to this environmental disaster.

The Francophonie

[Mark Assad, Liberal, Gatineau, QC]

Mr. Speaker, the Francophonie is alive and well in Canada and throughout the world.

Spanning five continents, it comprises 400 million people in 52 countries. French is the official language in a number of countries and is spoken in bilingual countries such as Canada and Cameroon and multilingual countries such as Switzerland and Mauritius.

Through the years, the Francophonie has grown. It now encompasses language, culture, cooperation, the economy and politics. French culture is diverse and all the richer for it.

I want to thank all those who work hard to promote the Francophonie on the national and international scene.

Royal Canadian Air Cadets

[Janko Peric, Liberal, Cambridge, ON]

Mr. Speaker, I rise to welcome the 85 member 296th Royal Canadian Air Cadets Cambridge Squadron who are visiting from my riding.

Formed in 1943 as the Galt Squadron, this select group of youth originally devoted their time to preparing for the day when they would serve as aircrew members of the Royal Canadian Air Force.

Fostering leadership, responsibility, discipline, good citizenship and loyalty to country, today's cadets train weekly and participate in special training sessions at Canadian forces bases during the summer.

The Royal Canadian Air Cadets are supported through a partnership between the Canadian forces and the Air Cadet League of Canada.

I join all members in welcoming the 296th Squadron to our nation's capital.

Crime Rates

[Beth Phinney, Liberal, Hamilton Mountain, ON]

Mr. Speaker, there has been a reduction of 14.2% in the overall crime rate in the Hamilton-Wentworth region.

The Regional Hamilton-Wentworth Police Services Board announced this week that not only have violent crimes gone down, including murder, but also that property crimes and auto thefts have been significantly reduced.

Homicides went down 54.5% in 1998 compared to the previous five year average. Property crimes have decreased by 16.6% as compared to the previous five year average. There was also an 18% decrease in the number of fatal accidents last year.

I want to congratulate the chief of police, Kenneth Robertson, and the Hamilton-Wentworth Regional Police for their continuing and diligent efforts to make the streets of Hamilton and the surrounding areas a safer and better place to live.

Indeed, local police forces across the entire country deserve our congratulations and our support for all the work they do to keep the crime rates down.

Journée Internationale De La Francophonie

[Monique Guay, Bloc, Laurentides, QC]

Mr. Speaker, tomorrow, March 20, we will celebrate la Journée internationale de la Francophonie.

To belong to the Francophonie is to be part of a rich geopolitical group of 500 million people in 49 countries and governments with French as a common language.

It is absolutely vital for Quebec to belong to the Francophonie, since our proximity to the American giant is a reminder that our culture, although rich and vibrant, is always at risk.

The defence of Quebec culture is the responsibility of the people of Quebec and not the federal government, which does not recognize it and tries in every way possible to bring it under the maple leaf.

I invite every Quebecker and all the francophones of the world to join in the festivities marking the Journée internationale de la Francophonie to celebrate their membership in this vast global community based on the use of the most beautiful language in the world, French.

Bulk Water Exports

[Bill Blaikie, NDP, Winnipeg—Transcona, MB]

Mr. Speaker, some weeks ago in this House we passed a motion unanimously calling for an immediate national moratorium on the bulk export of water. We had an announcement the next day from the government which did not live up to that motion. Instead, we had a call for 10 provincial moratoriums.

Yesterday in Montreal we saw the inadequacy of that approach. Apparently the Quebec government has indicated its intention to consider proceeding with the bulk export of water. If that happened, it would prejudice the ability of Canada as a nation to bring in a ban on bulk water exports because it would set a precedent under NAFTA.

I would urge the federal government to bring in the moratorium immediately to respect the motion. I would urge the Quebec government not to act in a way that prejudices the ability of the rest of Canada to bring in a ban on the bulk export of water by doing something precipitous.

Trade

[Reg Alcock, Liberal, Winnipeg South, MB]

Mr. Speaker, hon. members will have read in today's Ottawa Citizen the latest account of the Reform Party's involvement in Canada's WTO trade dispute with Brazil.

First the member for Red Deer denied that the Reform Party gave documents to Brazil. The next day the Reform Party admitted that it had, but Reform claimed that the documents were available to the public, including on the Internet. What Reformers do not mention is that they caused civil servants in 13 government departments and agencies to work countless hours to provide the Reform Party with that information.

Today we learn that the Reform Party provided its research document dated October 22, 1996 to Brazil. It was not until one month later that the Reform Party posted this information on its web site.

Surely the 60,000 Canadians from coast to coast who are employed in our aerospace industry deserve better from a political party that purports to represent Canadians.

Merchant Navy Veterans

[Peter Goldring, Reform, Edmonton East, AB]

Mr. Speaker, Bill C-61 effectively reduces outstanding merchant navy concerns to one. After 55 years, Bill C-61 finally gives merchant navy veterans recognition as war veterans, prisoner of war benefits and recognition for ceremonial days, but it ignores the issue of compensation completely.

The merchant navy was truly comparable to the other three services yet veterans suffer from government imposed poverty. They are not seeking great wealth, only the respect and benefits given their armed forces brethren.

This final issue has existed for over 50 years. Merchant navy veterans have little time left to enjoy restitution for inequalities. They want our government to act now, not later. Our merchant navy veterans' final concerns should not be a new millennium project.

Sledge Hockey

[Andrew Telegdi, Liberal, Kitchener—Waterloo, ON]

Mr. Speaker, I rise today to congratulate the Kitchener-Waterloo Sidewinders and wish them good luck when they host the International Sledge Hockey Tournament in my riding of Kitchener—Waterloo this weekend at the Waterloo Recreation Complex.

Sledge hockey is a form of ice hockey played by people who have physical disabilities. The game is played with players on a sled that has two skate blades under the seat. Players move around the rink on these sleds using two short hockey sticks which have picks on one end for pushing and a blade on the other end for shooting.

The opening ceremonies taking place tonight will be hosted by Ron Maclean of Hockey Night in Canada. Teams from across Canada, the United States, Holland and Norway are expected. A total of 30 teams with 700 players will be taking part in this exciting tournament.

I wish to congratulate the Kitchener-Waterloo Sidewinders for hosting this event. I wish them the very best for the tournament.

Poverty

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

Mr. Speaker, opposition parties such as the Reform Party can rant and rave against every idea that comes along, but unless a party is prepared to seek out and propose solutions to real problems, it can never hope to form a government.

It was in the spirit of finding workable solutions for real Canadians that the Progressive Conservative Party of Canada established our national caucus task force on poverty and homelessness.

As an associate member of this important task force, I am pleased to say that today marks the launching of our cross-Canada consultations in Saint John, New Brunswick. The task force members will meet with several anti-poverty organizations in New Brunswick and with individuals who live in poverty.

The growing incidence of poverty is a national disgrace. Parliamentarians need to take a leadership role in developing concrete solutions to the problems facing low income and homeless Canadians. As Joe Clark said, the PC Party of Canada will provide that leadership. This task force will demonstrate to Canadians our desire to make Canada a better place to live for all of its citizens.

I wish the task force good luck.

Canada Elections Act

[Libby Davies, NDP, Vancouver East, BC]

Mr. Speaker, a recent court decision in Ontario striking down discriminatory provisions of the elections act concerning smaller parties was a significant decision.

I recently attended a press conference as a result of this decision to uphold and support the fundamental principles of democracy and fairness in Canada. How we conduct elections is fundamental to our democratic system. The discrimination faced by smaller parties is shameful. These provisions have been struck down.

Now it is up to the government to be clear that it will not appeal this decision and will indeed bring in amendments to the Canada Elections Act to eliminate punitive and discriminatory provisions as struck down by the court.

Will the government give an assurance that it will do the right thing?

The Economy

[Jason Kenney, Reform, Calgary Southeast, AB]

Mr. Speaker, yesterday at 2.15 in the afternoon the Prime Minister told us that Canada's productivity is still on the rise. But yesterday at 3 p.m. the industry department released a study called “The Productivity Gap between Canada and U.S. Firms—as of February 5, 1999”. That is the name of the study.

It showed that as recently as last month Canada's standard of living was still plunging. According to the report, the gap between Canada and the U.S. “has been widening”.

Why does the government continue to deny that Canada's standard of living is lower than in the United States by $7,000 per person per year?

[Paul Martin, Liberal, Minister of Finance]

Mr. Speaker, apart from the fact that the hon. member is mixing apples and oranges, let me simply say that what the productivity gap which the Department of Industry demonstrated is that in fact over the last 15 years there has been a decline in productivity.

The study began in 1985. What we are dealing with are numbers throughout that period and a tale from that period. At the same time, let me be very clear that as a result of the actions of this government and of Canadians across the country, more recently the numbers have begun to turn around. That is what the Prime Minister has said, that is what I have said and it is what the Minister of Industry has said.

[Jason Kenney, Reform, Calgary Southeast, AB]

Mr. Speaker, that may be what the finance minister says, but it is not what our manufacturers and exporters are saying. Yesterday they released a statement in response to the finance minister saying “The finance minister is simply off base when he says Canadians should not worry about falling living standards”. That is from the Alliance of Manufacturers and Exporters. It said that the current situation is not adequate to ensure continued growth in Canada's place in the international marketplace. It said that last year Canada had gone from fifth place in the G-7 in terms of productivity to last place.

Is the finance minister telling us that the Alliance of Manufacturers and Exporters is wrong when it says that Canada—

[The Speaker]

The hon. Minister of Finance.

[Paul Martin, Liberal, Minister of Finance]

Mr. Speaker, first of all, I have met with the alliance on numerous occasions. In fact the productivity numbers differ substantially from industry to industry. One of the problems that we have, as an example, is that obviously there are more productivity improvements in the higher value added area, the newer economy, than there are in a number of our older industries, those which produce basic commodities.

That is why it is so important to emulate, for instance, what has been done in the oil and gas industry where a lot of the newer technologies are involved and are in fact improving substantially our productivity.

[Jason Kenney, Reform, Calgary Southeast, AB]

Mr. Speaker, let me get this straight. Last month the industry minister gave a speech in which he said “Canada's productivity is falling. We are $7,000 per person behind the United States”. Yesterday the industry department released another report saying that as of February of this year we are falling behind.

Yesterday the Alliance of Manufacturers and Exporters said that we have fallen from fifth to seventh in the G-7 in terms of productivity and this finance minister still stands and denies the cold, hard facts.

Why does he not agree that we have a problem and develop a solution in terms of tax relief and debt reduction to improve Canada's productivity?

[Paul Martin, Liberal, Minister of Finance]

Mr. Speaker, not only is the hon. member misquoting the Minister of Industry, the fact is that he is misquoting me as of about one minute ago.

There is no doubt that we have had a long term decline in our productivity, going back well into the eighties. There is also no doubt that it is absolutely crucial that this be reversed and, if we look at the more recent numbers, we are in the process of turning that around. That is why we put money into research and development. That is why we reduced the debt. That is why we have reduced taxes and put money into education.

There is no doubt that we have to continue to work on improving productivity because it is the source of wealth. There is also no doubt that we have a long way to go—

[The Speaker]

The hon. member for Dewdney—Alouette.

[Grant McNally, Reform, Dewdney—Alouette, BC]

Mr. Speaker, the finance minister likes to talk about quotes, so let me read for him what the industry minister said. He said “The debt is simply too large”. He also said that “taxes are 20% higher than they should be”. One of the ministers is wrong and I want to know which one it is.

The Liberals are embarrassed by the dropping standard of living which has been found by these reports. Now we know. It is out in the open. They have to admit there is a problem before they can deal with that problem.

Which minister is right about the dropping standard of living?

[Paul Martin, Liberal, Minister of Finance]

Mr. Speaker, the hon. member continues to make perceptive glances into the obvious. Of course our debt is too high. That is why we have been reducing it. We have taken the debt to GDP ratio from 71% to where in two years it will be 62%.

Yes, we want to reduce taxes. They were too high and that is why we reduced them in the last budget. That is why we reduced them in this budget and that is why we will reduce them in the next budget.

Yes, we have to improve our productivity. There has been a long term declining trend. We have now arrested it and we have to do everything we possibly can to make sure we have an upward trend in the future.

[Grant McNally, Reform, Dewdney—Alouette, BC]

Mr. Speaker, the finance minister likes to brag about tax cuts, but the chief economic adviser for CIBC says that there are no tax cuts after the bracket creep and after taking a look at the real effects of what this government has done.

The industry minister said that the debt is simply too high and that taxes are 20% too high as well. Is that something which this finance minister is going to address to help improve the standard of living for Canadians which has dropped so dramatically under his guidance and leadership?

[Paul Martin, Liberal, Minister of Finance]

Mr. Speaker, I do not know where the hon. member has been for the last four or five years. We have addressed it in every single budget. We are one of the very few industrial countries that is actually paying down debt. The income tax cuts which we brought in, $16.5 billion over the course of the next three years, will more than compensate for bracket creep, and every economist in the countries knows that.

What I would really suggest to Reform is that instead of writing its supplementary, it actually listen to the answer and then pose the question based on that.

International Cultural Forums

[Michel Gauthier, Bloc, Roberval, QC]

Mr. Speaker, not only does Quebec have trouble gaining the ear of federal politicians, the Prime Minister and the Minister of Intergovernmental Affairs in particular, but now the ambassadors are getting involved too.

Jacques Roy, Canadian ambassador to Paris, has apparently stated that Canada would never give Quebec the status Belgium has given the Walloons and the Flemings.

Can the Deputy Prime Minister tell us whether the opinion expressed by Ambassador Roy was personal, or whether it was the government's position?

[Mauril Bélanger, Liberal, Parliamentary Secretary to Minister of Canadian Heritage]

Mr. Speaker, after having their bid for separation rejected twice by Quebeckers, the PQ and the Bloc Quebecois are now developing a new strategy which requires outside support. The leader of the PQ refuses to acknowledge the existence of such a strategy, but the new adviser to the Bloc Quebecois, Jacques Parizeau, is frank enough to admit it. In Paris yesterday, Mr. Parizeau stated “Yes, that is exactly the strategy we need, and what is more, it is very timely”.

Meanwhile, Mr. Bouchard is trying to convince us that this new strategy has nothing to do with his separatist designs. So which one is right, the old leader of the Parti Quebecois, or the new one?

[Michel Gauthier, Bloc, Roberval, QC]

Mr. Speaker, someone ought to have told him, when his reply was being prepared, that asking the questions is our job. He is supposed to give the answers.

I will repeat my question, and I would very much like an answer from the government, because this is an important issue.

Can someone in authority tell me whether Jacques Roy was expressing the position of the Government of Canada, or his personal opinion? No parliamentary secretary is in a position to tell me that.

[Herb Gray, Liberal, Deputy Prime Minister]

Mr. Speaker, it has always been our intention to help promote the French culture of our country throughout the world.

Unlike the Bloc Quebecois and the Parti Quebecois, we are working to help French language and culture flourish across Canada.

As well, we are seeking to do the same thing throughout the world, under the leadership of the federal government, the national government.

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

Mr. Speaker, even the very federalist Liberal opposition in Quebec City is reminding the federal government of the need to accord Quebec its rightful place in international organizations where language and culture are concerned.

Can the Deputy Prime Minister tell us whether the federal government will continue in its isolation as it has since the start of this matter or will it heed the consensus in Quebec and listen to basic common sense?

[Herb Gray, Liberal, Deputy Prime Minister]

Mr. Speaker, we are doing exactly the opposite, namely expanding Quebec culture and the French language across the country and around the world.

The Bloc and the Parti Quebecois are trying to isolate one million French Canadians outside Quebec, and they should be ashamed of this lack in their policy.

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

Mr. Speaker, can the Deputy Prime Minister tell us then whether the federal government intends to honour the consensus in Quebec expressed by the premier and the Liberal opposition on negotiating an administrative agreement to establish Quebec's place in international forums?

[Herb Gray, Liberal, Deputy Prime Minister]

Mr. Speaker, we are already working to help Quebec have a role in international forums, but under the aegis of the federal government, the Government of Canada.

Health

[Judy Wasylycia-Leis, NDP, Winnipeg North Centre, MB]

Mr. Speaker, for almost five years this government has known that the reuse of disposable medical devices is potentially dangerous.

For almost five years this government has known that reused disposable devices like catheters and tubes going into stomachs and intestines can cause the transmission of disease and can even break down in the patient's body. For five years this government has known that hospitals want this government to act and they want national standards.

Why did this government, when it had a choice to act or do nothing, choose to do nothing and put patients at risk?

[Lyle Vanclief, Liberal, Minister of Agriculture and Agri-Food]

Mr. Speaker, the role of the government is to set the standards, and the federal government has done that.

The provinces and the individual hospitals get involved in the reuse. The minister has indicated that he is prepared to sit down with health professionals, the provinces and the hospitals to discuss this issue. It will very likely be a topic of discussion at a meeting of ministers in May.

[Judy Wasylycia-Leis, NDP, Winnipeg North Centre, MB]

Mr. Speaker, this is my point. The government has not set standards for the reuse of disposable medical devices. As a result, patients are at risk. We know that from a study that goes back to 1994. We know that the Canadian Health Care Association has called for national standards. All we are getting is the minister saying that he is going to study the matter and consider national standards.

We want to know today if this government is prepared to stand and say that national standards will be implemented immediately and that patients will not be put at any unnecessary risk.

[Lyle Vanclief, Liberal, Minister of Agriculture and Agri-Food]

Mr. Speaker, I clarified and explained very clearly to the hon. member that the minister is prepared to sit down, but it can only take place and be effective if it is done in consultation with the provinces and with the medical profession.

He is prepared to do that and he will be having that discussion.

Canada Mortgage And Housing Corporation

[Charlie Power, Progressive Conservative, St. John's West, NL]

Mr. Speaker, my question is for the minister responsible for the Canada Mortgage and Housing Corporation.

Bill C-66 will retroactively legalize its mortgage insurance underwriting program. Given that CMHC has eliminated appraisals on applications for high ratio mortgages, will the minister tell the House what practices are in place to measure the conditions of Canada's housing and to ensure there is no fraud in the marketplace? Does the minister think it is fair that the Canadian home purchaser should pay for this policy change by higher insurance premiums?

[Alfonso Gagliano, Liberal, Minister of Public Works and Government Services]

Mr. Speaker, the new program, called the emili, was implemented by CMHC. Since 1996 the industry has been involved in this program. There was a period so that underwriters could be ready for it. As late as last December I met with the Canadian Institute of Appraisers to discuss this issue.

The purpose of the program is to speed up the length of time it takes so that Canadians can have their mortgage insurance as soon as possible and can enjoy—

[The Speaker]

The hon. member for St. John's West.

[Charlie Power, Progressive Conservative, St. John's West, NL]

Mr. Speaker, I would like for the minister to explain why the Canadian Mortgage and Housing Corporation has eliminated appraisals on these mortgages at the same time as its counterpart in the U.S. is demanding more up to date and better appraisals.

Could the minister explain why this difference takes place? Why are property appraisals being swept aside? Does the minister agree that Canadian consumers could be better protected by professional appraisals on their properties at the time of purchase?

[Alfonso Gagliano, Liberal, Minister of Public Works and Government Services]

Mr. Speaker, as I said, the reason is to accelerate matters. As a matter of fact the office is also open on Sundays so that they can have very speedy, easy and fast assessments.

Naturally that does not stop individual buyers having personal appraisers if they feel the general appraisal we do with the financial institution is not satisfactory or is not enough.

We believe that we have a good system. The results are there. As I said, last December I met with the Canadian Institute of Appraisers. We discussed how we could implement this program. They have been giving good service in the past and we are sure they will continue to work—

[The Speaker]

The hon. member for South Surrey—White Rock—Langley.

Transitional Jobs Fund

[Val Meredith, Reform, South Surrey—White Rock—Langley, BC]

Mr. Speaker, the Prime Minister's apologists say that he was just acting as an ordinary member of parliament when he helped Yvon Duhaime secure a federal grant, but everybody here knows that the Prime Minister has more power than all the backbenchers combined.

Three years ago the current Minister of Transport had to resign from cabinet when his staff intervened in an immigration case because he was a cabinet minister and not just an ordinary member of parliament.

Why did the Minister of Transport have to leave cabinet for interfering on behalf of a friend, yet the Prime Minister seems to think he can get away with the same thing?

[Herb Gray, Liberal, Deputy Prime Minister]

Mr. Speaker, the program in question is structured so that MPs are consulted on each and every one of the applications under the transitional jobs fund.

The Prime Minister, through his representative in his riding, did exactly the same thing as the member for Prince George—Peace River, the member for Okanagan—Shuswap, the member for Nanaimo—Alberni, the member for Prince George—Bulkley Valley, and I could go on and on and on.

The input in question was exactly as required by the program and the Prime Minister conducted himself totally appropriately.

[Val Meredith, Reform, South Surrey—White Rock—Langley, BC]

Mr. Speaker, the government's claim that the Prime Minister was acting just like any other ordinary MP is ludicrous. As the Minister of Transport can attest, that argument did not hold water three years ago and it does not hold water today.

If the government is certain that the Prime Minister did not act in any improper fashion, will it release every document relating to this grant, or is it hiding something?

[Herb Gray, Liberal, Deputy Prime Minister]

Mr. Speaker, as a matter of fact, what the hon. member is complaining of is done every day by members of her own party. Why does she not admit that if she wants something out in the open?

Employment Insurance

[René Laurin, Bloc, Joliette, QC]

Mr. Speaker, based on the data compiled over a period of 26 years, the cost of the employment insurance program has always followed the unemployment rate.

The report on employment insurance that was tabled yesterday confirms this fact by pointing out that half of the reduction in benefits can be attributed to the changing labour market.

How can the Minister of Finance claim in his budget that the 11% cost increase for the EI program can be attributed to an improved economy, thus contradicting 26 years of statistics and the EI experts?

[Paul Martin, Liberal, Minister of Finance]

Mr. Speaker, clearly, when the economy is doing well, salaries are higher and many more people qualify for benefits because more people are working, that is they have not been unemployed for extended periods of time.

I can assure the hon. member that it is because the economy is doing well; many more people are working and salaries are higher.

[René Laurin, Bloc, Joliette, QC]

Mr. Speaker, everyone knows that the Minister of Finance is taking $5 billion out of the employment insurance fund to eliminate his deficit. But he is also hiding a cushion of at least $1 billion in that same employment insurance program.

Either that surplus was hidden to allow the Minister of Finance to boast, come the next budget, or the government refuses to admit that it has no choice but to improve the EI program.

[Paul Martin, Liberal, Minister of Finance]

Mr. Speaker, if we look at the figures, it is very clear that there is indeed a surplus. When we took office, there was a deficit of $6 billion. I personally think it is much better to have a surplus.

Transitional Jobs Fund

[Chuck Strahl, Reform, Fraser Valley, BC]

Mr. Speaker, the more I look at the Prime Minister giving a government grant to his friend Yvon Duhaime, the more I am reminded of the situation back home in British Columbia.

Glen Clark had a friend too, a contractor who built a deck for him. The Prime Minister had a friend who took a money losing hotel off his hands. Glen Clark is being investigated because his friend received a casino licence. The same thing here: the Prime Minister is under fire because his office lobbied to have a grant given to a friend. I hope Glen Clark is not the new ethical adviser to the Prime Minister.

At the very least will the Prime Minister do what Glen Clark has done? Will he release all the documentation surrounding this affair?

[Bonnie Brown, Liberal, Parliamentary Secretary to Minister of Human Resources Development]

Mr. Speaker, I remind the questioner and all my colleagues in the House that funds from this program are available in every area of high unemployment.

Shawinigan is one of those areas. It has a set of criteria. Those criteria were met by the Shawinigan project. One of the criteria is that all local MPs are consulted.

By his question, the questioner is suggesting that MPs should not be consulted. If that is the case, he is expressing a total lack of faith in his colleagues in his party and in all of us. It is a lack of faith that we on this side do not share.

[Chuck Strahl, Reform, Fraser Valley, BC]

Mr. Speaker, I would say to the hon. parliamentary secretary that MPs with a shred of integrity would have absented themselves from those meetings if a friend were involved.

There is another similarity between Glen Clark and the Prime Minister. They both look like a deer caught in the headlights. There is a difference, though. At least Glen Clark has called for an independent inquiry. He is releasing all the documents. In fact, he is even doing interviews with the media. Imagine that.

Will the Prime Minister at least live up to Glen Clark's level of integrity? Will he release all the documentation and will he start talking about this event so we can get to the bottom of it?

[Herb Gray, Liberal, Deputy Prime Minister]

Mr. Speaker, questions are being asked and informative answers are being given every day in the House of Commons.

One thing that my hon. friend neglects to put on the record is that this transitional jobs fund grant created 19 direct jobs. I guess they are against creating jobs for unemployed people. Also this project had to be reviewed and approved by the Quebec provincial government, no friend of the Prime Minister and no friend of this party.

Employment Insurance

[Madeleine Dalphond-Guiral, Bloc, Laval Centre, QC]

Mr. Speaker, not only is the Minister of Finance helping himself to $5 billion from the surplus in the EI fund to pay down the deficit, but he is apparently planning an additional estimated cushion of $1 billion to $1.5 billion.

Since the Minister of Finance has let women and youth carry the load long enough, could he not make this $1 billion plus cushion available to his colleague, the Minister of Human Resources Development, so that the system can be improved and made less discriminatory towards youth and women?

[Bonnie Brown, Liberal, Parliamentary Secretary to Minister of Human Resources Development]

Mr. Speaker, it is a simple fact that when unemployment goes down the number of claims and benefits paid out also goes down.

We think this report has some good news in it too. It tells us that our measures to help people are working. The 450,000 new jobs that were created last year made it the best year in a decade. Of those 143,000 were for youth and 300,000 were for women.

If the member wants to know what we are doing for youth and women, this is what we are doing: we are helping them by getting them jobs.

[Madeleine Dalphond-Guiral, Bloc, Laval Centre, QC]

Mr. Speaker, with such large surpluses in the EI fund and such a damning report on women and youth, does the Minister of Finance really believe he is managing EI wisely and not just exploiting people?

[Some hon. members]

Oh, oh!

[The Speaker]

I would ask members to be a bit more judicious in their choice of words.

[Bonnie Brown, Liberal, Parliamentary Secretary to Minister of Human Resources Development]

Mr. Speaker, the member's question reveals an attitude toward our young people with which this side disagrees. That attitude suggests that youth should receive more EI. On the other hand we think young Canadians should be given the opportunity to go to school and to get a good job. That is how we are trying to help them.

Most Canadians share these values with us. The 143,000 new jobs for young Canadians is the best performance in youth employment in 20 years. Let us give credit where credit is due and let us allow young people to have an optimistic—

[The Speaker]

The hon. member for Wetaskiwin.

Movement Of Grain

[Dale Johnston, Reform, Wetaskiwin, AB]

Mr. Speaker, time and time again Canadian farmers have been forced to endure the effects of work stoppages at west coast ports. Last night in debate in the House the President of the Treasury Board indicated that he was looking at all options to rectify this situation.

Could he tell us if all options include final offer selection arbitration, a long term remedy as recommended by Justice Estey, by the west coast ports inquiry, and by the Reform Party?

[Marcel Massé, Liberal, President of the Treasury Board and Minister responsible for Infrastructure]

Mr. Speaker, we are looking at all options and I do not want to limit them.

We have been looking at arbitration but as the member knows arbitration was suspended by law in 1996. At present we are looking at how we can indicate to the union that the correct course for it and for all Canadians is to come back to the table and stop making excessive demands which it knows cannot be met. We are asking the union to stop taking Canadians as hostages. We hope that this will be concluded very soon.

[Jake Hoeppner, Reform, Portage—Lisgar, MB]

Mr. Speaker, when the Canadian Wheat Board figured it was losing a few dollars by farmers exporting their own grain, the government was quick to react and throw a few of them in jail. Because of the negligence of the government, 120,000 farmers are now losing millions because of the strike at Vancouver.

Who will be thrown in the clink this time? Could it be the treasury board minister? Could it be the labour minister, or could it even be the wheat board minister? Western farmers feel it should be all three.

[Marcel Massé, Liberal, President of the Treasury Board and Minister responsible for Infrastructure]

Mr. Speaker, members of the Reform Party have to learn that there are some laws in the country which give the unions the right to strike.

They have to recognize that the laws are there and that they, like all Canadians, have to obey them. In this case, if the right to strike is being abused, we listened to the emergency debate last night. We learned the position of the Reform Party. We will take the decision that is favourable to all Canadians very soon.

Black Lake Bc Mine

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

Mr. Speaker, on January 28, the federal government announced that it was making a lump sum payment of $111 million for employees affected by the decision to scale back operations at the Phalen mine in Cape Breton. This plan included an early retirement program, severance pay, and a training allowance.

Why does the Minister of Human Resources Development not introduce a similar program for former employees of the BC mine in Black Lake, who have had to settle for the minister's rhetoric since the mine was closed?

[Art Eggleton, Liberal, Minister of National Defence]

Mr. Speaker, I can only answer with respect to the Cape Breton development issue. In this case a workforce adjustment package of $111 million will be provided to workers with fair severance and early retirement packages.

A $68 million economic development package has been made available to invest in the Cape Breton economy. This is in addition to some $80 million already planned for investment through the budgets of the Atlantic Canada Opportunities Agency and Enterprise Cape Breton Corporation.

Agriculture

[Larry McCormick, Liberal, Hastings—Frontenac—Lennox And Addington, ON]

Mr. Speaker, my question is for the Minister of Agriculture and Agri-Food. How severe is the hurt to our international reputation from this on again, off again public servant strike against private grain company terminals on the west coast?

[Lyle Vanclief, Liberal, Minister of Agriculture and Agri-Food]

Mr. Speaker, as I informed the House yesterday, the Canadian Wheat Board has already lost at least one sale of $9 million. Other customers are saying that because of their hesitancy and their confidence in the reliability of supply that they do not even want to talk. Farmers have taken enough of a blow to their incomes because of export subsidies in other countries and international prices.

We ask the workers to come back to the bargaining table, to do the right thing, bargain in the reality of today and get the grain moving for the benefit of the whole industry.

Justice

[Jay Hill, Reform, Prince George—Peace River, BC]

Mr. Speaker, Paul Gervais is a twice convicted pedophile. Instead of being locked up for molesting nine boys this child predator was awarded a conditional sentence and sent home free. It is not bad enough that his victims suffered from his abuse but now they must endure the abuse of a failed justice system.

I met with five of these young men last night. They asked me some tough questions. On their behalf I ask the justice minister why she will not change the law so that rather than setting child molesters like Paul Gervais free, they go directly to jail.

[Eleni Bakopanos, Liberal, Parliamentary Secretary to Minister of Justice and Attorney General of Canada]

Mr. Speaker, I have had occasion to speak on this question often in the House. Obviously the opposition does not get it. The minister has written to the justice committee asking the committee to study this issue.

[Some hon. members]

Oh. oh.

[Eleni Bakopanos, Liberal, Ahuntsic, QC]

They do not care about due process.

The Supreme Court of Canada will be rendering a decision very soon. If the supreme court and the justice committee recommend it, the minister will make the changes. She has said so in the House.

Mount Royal College

[Art Hanger, Reform, Calgary Northeast, AB]

Mr. Speaker, Mount Royal College in Calgary borders on the now closed Canadian Forces Base Calgary. This college is overflowing in capacity and has been that way for years now. There is a desperate need for more room. It has been trying to negotiate a fair price with the federal government for a portion of the military base that has been abandoned but the government wants profits instead at the expense of students.

Will the President of the Treasury Board put the educational needs of the students ahead of profit and give Mount Royal College—

[The Speaker]

The hon. Minister of Public Works and Government Services.

[Alfonso Gagliano, Liberal, Minister of Public Works and Government Services]

Mr. Speaker, the policy of the Government of Canada is to transfer land to anybody at market value. Therefore if the Government of Alberta wants to negotiate it can do so with Canada land. For example, a school on the base was sold to a private school at market value.

The Government of Canada has transferred a certain amount of money to the province through the Minister of Finance for education, health care and other social programs. I think the Government of Alberta should negotiate and pay market value for that piece of land.

Publications

[Bill Blaikie, NDP, Winnipeg—Transcona, MB]

Mr. Speaker, my question is for the Deputy Prime Minister. It has to do with a recent interpretation by Heritage Canada which puts at risk several catholic newspapers in the country, the Catholic Register , the Prairie Messenger and a number of others.

Could the Deputy Prime Minister say whether the government is prepared to abandon this interpretation and ensure the survival of these catholic newspapers and other religious journals that may be affected by subsequent rulings if the government does not come to its senses on this?

[Mauril Bélanger, Liberal, Parliamentary Secretary to Minister of Canadian Heritage]

Mr. Speaker, the adjustment to the policies is a result of the decision by the WTO to which the Government of Canada is responding by complying. That has been the consequence of the change in administering the subsidy. Some magazines have been advised that they would lose their subsidy. The government has agreed to review that in an attempt to accommodate these magazines in the future, as we have in the past. That review is being carried out as we speak.

[Bill Blaikie, NDP, Winnipeg—Transcona, MB]

Mr. Speaker, I cannot believe the reach of the WTO is so deep that it would threaten these newspapers. We truly have a world government and no national government when this kind of thing can happen.

I have a supplementary question for the Deputy Prime Minister also having to do with freedom of expression. The Deputy Prime Minister will be aware of a recent Ontario court decision having to do with the elections act and various provisions in it with respect to smaller parties.

I wonder whether the Deputy Prime Minister could tell the House now that the government will not be appealing this decision and in the upcoming amendments to the elections act these provisions, which have been struck down, will be changed so that there will be greater freedom of access for smaller parties to the Canadian electoral system.

[Don Boudria, Liberal, Leader of the Government in the House of Commons]

Mr. Speaker, as minister responsible for the Canada Elections Act, I can tell my hon. colleague that the issue is presently being reviewed. We are reviewing and analysing the court decision in reference to the Figueroa case.

We will able to make a determination as to whether there will be an appeal probably within the next week or so.

In terms of when we will be introducing the revisions to the elections act, I hope to be able to do so within the next few weeks.

Public Works And Government Services

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

Mr. Speaker, we have learned that cost of operating the ministerial regional office in Fredericton for the first year is $484,000. Only three cabinet ministers have used this office in the past year. That means it cost taxpayers over $161,000 for each meeting. One can get a hotel suite with an adjoining board room in Fredericton for $175 a day.

Will the minister shut down this money pit and end this embarrassing habit?

[Alfonso Gagliano, Liberal, Minister of Public Works and Government Services]

Mr. Speaker, there used to be 26 regional offices. We have cut them to 11, a 21% saving. At the same time we have had a 34% increase in service. I think we have done the right thing by reducing them from 11 to 26 . When ministers travel they use common services which are a savings. We also give service to Canadians.

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

Mr. Speaker, although I could stand here and make fun of the minister's math skills all day, the reality is that those MROs should be closed and the money should be put to better use.

For example, in Plaster Rock and Florenceville, New Brunswick kids have no recreation complex in which to play sports because the government claimed there was no money for infrastructure grants.

What is the minister's priority, giving ministers and expensive office they almost never use or providing kids with a place to learn and grow?

[Alfonso Gagliano, Liberal, Minister of Public Works and Government Services]

Mr. Speaker, this member is a member of the Conservative Party. It had more than 26 regional offices. We have reduced them to 11. We are looking to cut costs as soon as possible. Wherever possible, we will use space where a crown property exists. We are looking at every expenditure. We will make sure that when a minister travels across Canada there are no obstacles to them serving and receiving Canadians.

Disaster Relief

[Sheila Finestone, Liberal, Mount Royal, QC]

Mr. Speaker, Canadian citizens who suffered from the ice storm of 1998 and were in receipt of disaster relief are very concerned about how their tax measures are to be handled by the Minister of National Revenue.

What type of tax relief is being considered by the federal government? Can the minister clarify the situation?

[Beth Phinney, Liberal, Parliamentary Secretary to Minister of National Revenue]

Mr. Speaker, the revenue department is sensitive to the losses to ice storm victims in eastern Ontario, parts of Quebec, New Brunswick and Nova Scotia.

To assist Canadians in areas affected by the ice storm, in the interest of fairness and flexibility, the department is offering relief to the taxpayers who received financial assistance to help them through their period of hardship. Ice storm victims will not have to include the amount of assistance in their income when they file their 1998 income tax returns. The employers who gave financial assistance to their employees will be able to deduct those payments as business expenses.

Agriculture

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

Mr. Speaker, as if farmers did not have enough problems fighting for their survival, the minister of agriculture has now created a bureaucratic nightmare.

The disaster application forms are 40 pages long and accountants are charging farmers $500 and $1,000 to fill them out.

Why is the minister giving western grain producers more bills to pay instead of the disaster assistance they desperately need?

[Lyle Vanclief, Liberal, Minister of Agriculture and Agri-Food]

Mr. Speaker, the comments the member just made are absolutely false. I reviewed the package in the lobby this morning an hour ago. There are a number of pages at the beginning that are explanatory and obviously necessary so people and accountants know. There are pages at the back of it that list beginning inventory, ending inventory, income and expenses.

All an accountant has to do is transfer from the income tax and from the business statement of the farm for the year over to there. They do not have to create any new numbers whatsoever.

Agriculture Canada

[Hélène Alarie, Bloc, Louis-Hébert, QC]

Mr. Speaker, last week we asked the Minister of Agriculture to look into the case of Lucien Beaupré, an elk breeder who lost his entire herd due to the negligence of Agriculture Canada veterinarians.

Has the minister looked into this, and can he tell us whether he plans to award Mr. Beaupré fair and adequate compensation, as was done for the Prince Edward Island potato growers some years ago, when they were the victims of an error by Agriculture Canada?

[Lyle Vanclief, Liberal, Minister of Agriculture and Agri-Food]

Mr. Speaker, the producer in question and those that have animals destroyed because of reportable diseases are treated according to the act and the regulations. The individual was treated in that way and it would be the same way whether it is an elk producer, a sheep producer, a cattle producer or whatever. They were treated equitably, as we always do.

Employment Insurance

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

Mr. Speaker, the Minister of Human Resources Development's progress report on employment insurance confirms my findings during my tour across the country: the minister's cuts are having painful results.

Naida was refused sick benefits because she was two hours short. Kelly, Sarah and numerous others did not get maternity benefits because the minister requires 400 more hours than before.

The minister said he was waiting for the report before making changes. Now that he has it in front of him, is he going to make changes to employment insurance right away, to finally meet the needs of the workers of this country?

[Bonnie Brown, Liberal, Parliamentary Secretary to Minister of Human Resources Development]

Mr. Speaker, of course the report is giving us the information with which to analyse the results of our EI reform. We will do that. We have to find out exactly why in certain areas the number of claims did go down. We want to do that.

I think the member is wrong on his maternity description. The birth rate went down 4.6% but the number of claims, and therefore benefits, went up slightly. As a percentage rate the number of women receiving maternity benefits from the EI system has increased, not dropped.

World Trade Organization

[André Bachand, Progressive Conservative, Richmond—Arthabaska, QC]

Mr. Speaker, my question is for the Minister for International Trade.

On November 25, a special panel was set up at the WTO to decide on France's rejection of asbestos. However, the members of this famous panel have yet to appointed, because the two countries cannot agree. Under WTO provisions, if, after 20 days, there is no agreement, one of the countries can ask the director general of the WTO to appoint people to this special panel.

The panel has not sat. Is the Government of Canada today in the process of asking the WTO director general to appoint the members of this special panel in order to reach a decision?

[Sergio Marchi, Liberal, Minister for International Trade]

Mr. Speaker, Canada is negotiating the composition of the WTO special panel. We think that agreement on the composition is imminent, but should no agreement be reached soon, Canada is prepared to ask the director general of the WTO to designate the members of the special panel.

Aboriginal Affairs

[Bryon Wilfert, Liberal, Oak Ridges, ON]

Mr. Speaker, accessibility to many communities in Northern Quebec is difficult and often expensive due to reliance on air and sea transportation. The Cree of northern Quebec have particularly been affected by the situation.

Can the Minister of Indian Affairs and Northern Development tell this House what the department is doing to respond to the challenges faced by Cree communities in the James Bay area?

[David Iftody, Liberal, Parliamentary Secretary to Minister of Indian Affairs and Northern Development]

Mr. Speaker, I would like to thank the member for his interest in this issue and his good work on the standing committee on Indian affairs.

I am pleased to report to him and to the House that while we are here today, my minister is in the community of Waskaganish in the northern Quebec region signing an agreement with her Quebec counterpart on a new $40 million road. It will connect for the first time all the Cree communities to southern Quebec. I am pleased to make that announcement. I thank the hon. member for his good work on this file.

Government Response To Petitions

[Mauril Bélanger, Liberal, Parliamentary Secretary to Minister of Canadian Heritage]

Mr. Speaker, pursuant to Standing Order 36(8), I have the honour to table in both official languages the government's response to 10 petitions.

Committees Of The House

[Marlene Catterall, Liberal, Ottawa West—Nepean, ON]

Mr. Speaker, I have the honour to present the 63rd report of the Standing Committee on Procedure and House Affairs regarding the associate membership of the Standing Committee on Finance. If the House gives its consent, I intend to move concurrence in this report later this day.

[Don Boudria, Liberal, Glengarry—Prescott—Russell, ON]

Mr. Speaker, I rise on a point of order. I wish to seek unanimous consent for the following:

That, notwithstanding any standing order or usual practice of this House, a bill in the name of the President of the Treasury Board, entitled an act to provide for the resumption and continuation of government services, shall be disposed as follows:

1. Commencing when the said bill is read a first time and concluding when the said bill is read a third time, the House shall not adjourn except pursuant to a motion proposed by a minister of the crown and no Private Members' Business shall be taken up;

2. The said bill may be read twice or thrice in one sitting;

3. After being read a second time, the said bill shall be referred to a committee of the whole;

4. During consideration of the said bill, no division shall be deferred.

[The Acting Speaker (Mr. McClelland)]

Does the hon. government House leader have the unanimous consent of the House to move the motion?

[Some hon. members]

Agreed.

[Some hon. members]

No.

Business Of The House

[Don Boudria, Liberal, Leader of the Government in the House of Commons]

Mr. Speaker, pursuant to Standing Order 56.1, I move:

That, notwithstanding any standing order or usual practice of this House, a bill in the name of the President of the Treasury Board, entitled an act to provide for the resumption and continuation of government services, shall be disposed as follows:

1. Commencing when the said bill is read a first time and concluding when the said bill is read a third time, the House shall not adjourn except pursuant to a motion proposed by a minister of the crown and no Private Members' Business shall be taken up;

2. The said bill may be read twice or thrice in one sitting;

3. After being read a second time, the said bill shall be referred to a committee of the whole;

4. During consideration of the said bill, no division shall be deferred.

[The Acting Speaker (Mr. McClelland)]

Will those members who object to the motion please rise in their places.

And more than 25 members having risen:

[The Acting Speaker (Mr. McClelland)]

More than 25 members having risen, the motion is withdrawn.

(Motion withdrawn)

Committees Of The House

[Marlene Catterall, Liberal, Ottawa West—Nepean, ON]

Mr. Speaker, if the House gives it consent, I move that the 63rd report of the Standing Committee on Procedure and House Affairs presented to the House earlier this day be concurred in.

[The Acting Speaker (Mr. McClelland)]

The House has heard the motion as presented by the deputy government House leader. Is there unanimous consent?

[Some hon. members]

Agreed.

(Motion agreed to)

Petitions

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

Mr. Speaker, pursuant to Standing Order 36, I am pleased to present two petitions in the House.

In the first, 128 petitioners from the riding of Acadie—Bathurst call on Parliament to set up a program to help those affected by the groundfish moratorium.

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

Mr. Speaker, the second petition is signed by 616 Canadians from across the country and calls for the creation of an independent EI fund.

In addition, they are asking that EI benefits be more easily accessible and of longer duration.

[Nelson Riis, NDP, Kamloops, BC]

Mr. Speaker, it is again an honour to present a petition pursuant to Standing Order 36 on behalf of a number of residents of Chase, Salmon Arm and the general Shuswap Lake area.

The petitioners are concerned about the recent developments regarding the export of water and list a number of concerns they have.

[John Bryden, Liberal, Wentworth—Burlington, ON]

Mr. Speaker, I have the honour to present a petition from constituents in my riding. They call on the government to support a timetable by the year 2000 for the abolition of nuclear weapons worldwide.

Questions On The Order Paper

[Mauril Bélanger, Liberal, Parliamentary Secretary to Minister of Canadian Heritage]

Mr. Speaker, I suggest that all remaining questions be allowed to stand.

[The Acting Speaker (Mr. McClelland)]

Is that agreed?

[Some hon. members]

Agreed.

The House resumed consideration of the motion that Bill C-67, an act to amend the Bank Act, the Winding-up and Restructuring Act and other acts relating to financial institutions and to make consequential amendments to other acts, be read the second time and referred to a committee.

Bank Act

[Serge Cardin, Bloc, Sherbrooke, QC]

Mr. Speaker, it is of course with great pride that I accepted to participate today in this important debate on Bill C-67, which deals with the establishment of foreign bank branches in Canada.

First, I would like to comment briefly on the speech of the Secretary of State for International Financial Institutions, which is most indicative of the quality of Bill C-67.

He said “This bill will allow us, we hope—”. We hope. If I introduced a bill, it would aim at achieving specific goals through practical means. I would not merely make a wish, hoping it will fulfil itself.

Before explaining the position of the Bloc Quebecois on this bill, I must say that the attitude of the finance minister shows he is true to himself. This minister is unable to look at the big picture with respect to national finances. He has lost all credibility as our national treasurer, because of both his budgetary forecasts and his financial achievements. The Minister of Finance always tries to deal with a complex and general situation with a careless approach and in a piecemeal fashion.

We will recall how he dealt with the MacKay Report on the future of financial services. The minister decided to ignore the true issues raised in this massive report and dealt with only one aspect of the document, bank mergers.

Acting unilaterally, and without waiting for the publication of the complete report of the Standing Committee on Finance, the minister took position on the bank merger issue and, based on incomplete preliminary data, decided to oppose the merger, “for the time being” as he said, adding that he would see later what could be done. This minister, who improvises on a daily basis, is an amateur financier who has no strict timeline for his political agenda.

The finance minister continues in the same vein with Bill C-67, an act to amend the Bank Act, which will allow the establishment of foreign banks. To allow foreign banks to open branches in Canada without affording any protection to financial institutions in Quebec and Canada is to open our market without protecting ourselves. How re-assuring it is to be represented by such a government on the eve of negotiations with the World Trade Organization.

Like his colleague the Minister of Agriculture, who weakened Canada with his recent positions, the Minister of Finance is about to act incoherently by opening our market against the interest of our institutions.

Did the finance minister take the time to read the MacKay report? Is he really aware of the impact of this review? I doubt it. The finance minister, like his Liberal colleagues, hastens to say he consulted various socio-economic stakeholders involved in this issue. I submit that is pure bunk.

I would like to know if the finance minister consulted the Deputy Premier of Quebec before introducing Bill C-67. Was the president of the Mouvement Desjardins, Claude Béland, consulted? If so, how?

The analysis of Bill C-67 leads us to the conclusion that this piece of legislation introduced by the Minister of Finance is an attack on the know-how and expertise of Quebec.

I draw your attention to clause 128, which amends the Office of the Superintendent of Financial Institutions Act. Let us have a closer look at clause 7.1, which says, and I quote:

7.1 (1) The Minister may, with the approval of the Governor in Council, enter into agreements with the appropriate authority of a province

It goes on:

(a) with respect to the administration, application and enforcement of provincial legislation in respect of trust, loan or insurance companies incorporated or regulated by or under an Act of the legislature of the province;

(b) in order to authorize the Superintendent to exercise or perform the powers, duties and functions on behalf of the appropriate authority of the province, that the Minister may determine, in respect of trust, loan or insurance companies incorporated or regulated by or under an Act of the legislature of the province; and

(c) in order to

(i) make applicable the Trust and Loan Companies Act, the Insurance Companies Act or this Act, or any provisions of these Acts, and the regulations made under any of these Acts, with the modifications that the Minister considers necessary, in respect of trust, loan or insurance companies that are incorporated or regulated by or under an Act of the legislature of the province, and

(ii) limit the application of provincial legislation in respect of trust, loan or insurance companies that are incorporated or regulated by an Act of the legislature of the province.

We can see once again an undisguised attempt by the Minister of Finance, through this legislation, to get involved in areas that come under Quebec's jurisdiction.

Every day, the Bloc Quebecois condemns the numerous federal intrusions in areas of provincial jurisdiction, including those of Quebec. This is why we are opposed to the principle of the bill and will vote against it, unless satisfactory amendments are made to section 7.1, which allows the federal government to squarely intrude into Quebec's areas of jurisdiction.

This one-way provision would allow the government to appropriate and control Quebec's know-how. This is why the Bloc Quebecois is asking for the following amendments, which are essential in the current context.

First, any agreement mentioned in section 7.1 should be the result of government-to-government negotiations.

Second, section 7.1 should be amended to provide for reciprocity. Under such reciprocity, the appropriate authority of a province, and a provincial government, would enjoy the same privileges as those enjoyed by the superintendent and the federal government under section 7.1.

In other words, the Inspector General of Financial Institutions and the Government of Quebec could subject federally chartered financial institutions to Quebec laws.

Let us take a look at the main amendments found in Bill C-67.

The amendments set the general requirements that must be met by a foreign bank to establish a branch in Canada, the type of business that such a branch can conduct, and the standing regulatory requirements that will have to be met. The bill also includes a number of changes concerning the access by foreign banks to the financial services sector.

Under the proposed system, on top of being allowed to establish a Canadian subsidiary, foreign banks will be able to set up either a full service branch or a loan branch.

We bemoan the lack of overall vision on the part of the government regarding the future of the Canadian banking system and financial markets.

Since 1993, the finance minister, who does not know where he is going in this issue, has been improvising. He is putting at risk one of the pillars of our economy, the financial services sector. He should listen to what the Bloc Quebecois has been telling him for years now, namely first strengthen our national industry, then open the market, and finally liberalize.

The Bloc Quebecois has always been of the opinion that the merger debate should be seen as part of a broader debate on the future of financial institutions. The same is true of the bill before us today.

The government is acting irresponsibly and, by refusing to proceed cautiously according to the logical order suggested by the Bloc Quebecois, is leaving Quebec and Canada open to inconsistencies and discrepancies in the quality of services between poor and rich regions, a glaring and on-going lack of fairness.

Let us not forget that, under the federal Insurance Companies Act, a federally chartered insurance company or a foreign company cannot sell policies in Canada to an insurance company set up under provincial legislation. Only a federally chartered insurance company, with the approval of the Minister of Finance, can buy these blocks of business. This situation is unfair to Quebec insurers.

This situation shows clearly that while our financial markets are about to become more and more open to financial institutions, there are still barriers between our own institutions and we do not have full competitiveness within our own borders.

I remind the House that the Bloc Quebecois had proposed a three-step approach which provides for a methodical opening up of financial markets.

As a first step, the Bloc asks the federal government to change the ownership rules for banks and some of the accounting rules in order to allow and foster the grouping of medium and small size financial institutions into financial holdings.

For instance, a bank could join with a life insurance company, an investment funds company and a brokerage. This first step would allow the establishment in Quebec and in Canada of giant financial institutions which would be able to truly compete with megabanks.

The government should allow a period of two to three years for the establishment of these holdings, which would be subject to the 10% rule and whose operations would remain compartmentalized, as is already the case for banks. We should begin by taking the necessary means to encourage competition with new major players on a global scale.

Second, the federal government could then allow bank mergers. For instance, we would have on the Canadian market eight to ten players of similar size and strength and we would therefore have sound competition in our domestic financial sector.

Sound competition is vital if we want consumers and small and medium size businesses throughout the country to have easy access to services at competitive prices.

In the interest of fairness, the bank mergers should occur at the same time that the multisector holdings become operational. All players should be able to start at the same time.

At the same time, the Bloc Quebecois would call for a greater democratization of banks and financial holdings along the proposals of the Quebec association for the protection of savers and investors.

We would also ask for a mechanism to encourage and measure the investments of banks and financial holdings in communities.

In view of the human aspect and of the socio-economic efforts of this reform, the Bloc Quebecois will support measures aimed at protecting access to financial services for the whole population throughout the territory.

We will also be calling for a mechanism for parliamentary follow-up in order to measure the impact of the changes made on competition, service charges, employment, access to credit, transparency, and services to outlying and disadvantaged communities, so as to be able to make the appropriate corrections and adjustments as we go along, if need be.

Third, the federal government could open up the Canadian financial services market completely to international competition.

Having made it possible for the small players in Quebec and Canada to join forces, there are less grounds for concern that they will disappear or pass into the hands of foreign companies as soon as the market is opened up to international competition.

I remind hon. members that our concern has always been, and will always be, to increase the competitivity of all sectors of financial services in Quebec and in Canada, and to increase the competition in all of Quebec and Canada. More competition means better and better-priced services for consumers and small and medium-sized businesses throughout the country. Enhancing competition is one of the concerns of the Bloc Quebecois.

We are also concerned with making these changes equitably. All those involved in the financial sector must have an equal opportunity to make changes so as to enhance their domestic and international position, for example, by allowing financial holdings which bring together institutions from various sectors.

Hon. members will agree with me that today's debate is liable to have a great impact on our society. We must always remember that public interest comes first and that there are people behind the figures.

In this sense, the Bloc Quebecois has always advocated the establishment of a parliamentary committee to oversee banks and financial institutions, which would periodically check whether consumers and SMBs are well served at competitive prices throughout Quebec and Canada, regardless of their personal wealth. We have advocated the entry of new players into the market to increase competition and thus improve service to consumers.

I should mention that Quebec is at the forefront in protecting consumer interests. In October 1998, Quebec announced the establishment of the Bureau des services financiers to protect the public.

It receives public complaints, ensures the law respecting the distribution of financial products and services is applied, sets up an insurance information and reference centre to give consumers access to clear and complete information, establishes a fund to provide compensation in the event of fraud, keeps a record of offices, independent companies and independent representatives and issues certificates to representatives.

To avoid overlap, the federal government should give Quebec the role of protecting consumers in the area of financial services.

The Bloc Quebecois also advocated greater democratization of the banks. We share the concerns of Yves Michaud in this regard.

Moreover, I want to remind you that the Bloc Quebecois is the only party to have tabled a bill on community reinvestment. We want the banks and other financial institutions to fulfil their social role and to be transparent about the means and objectives involved.

To conclude, I repeat that without appropriate amendments to permit government to government negotiations, we will vote against Bill C-67.

[Nelson Riis, NDP, Kamloops, BC]

Mr. Speaker, I want to acknowledge my Reform friend for co-operating earlier. I appreciate it very much.

Bill C-67, an act to amend the Bank Act, the Winding-up and Restructuring Act and other acts relating to financial institutions and to make consequential amendments to other acts, is opening the door to foreign banks coming into Canada. Let us make that clear.

We have heard about some of the concerns raised by others, some of the benefits and so on. I will venture out and do something that I think is unusual for a politician and attempt to predict the future. I have no corner on wizardry or looking into a crystal ball, but it does not take much crystal ball gazing to figure out what is going on.

The other day I said that sometimes when I stand in the House to make a speech I feel a bit like a eunuch. I do not mean that in any kind of personal sense. I mean it in a helpless sense, in kind of a worthless sense. What is the point? It is sort of the opposite of the Viagra issue. Why are we doing this? Sometimes I feel like I am a great big thick rubber stamp with ink all over one side of me, and every now and then I am asked to rubber stamp something that is going on.

I have a choice. I am either a eunuch or a rubber stamp. I will probably go with the rubber stamp classification. Why do I feel this way? Those in the gallery, those watching television, those listening in and those who will read Hansard or perhaps watch the CPAC version later today will be under the impression that we are debating whether or not to proceed with allowing foreign banks into the country. There will be some good ideas, some bad ideas, concerns and so on, but there will be an impression that we are actually debating this issue and that the debate has some consequence.

It does not. It has no consequence at all. Just as sure as the sun came up this morning, the legislation will pass expeditiously. It is not because most parties will support it. It will pass expeditiously because the government has committed to the World Trade Organization to pass the legislation by end of June.

What does all this mean? Let us look at the details. First we got a clue, not from the Canadian government, not from any government press release, but from the Wall Street Journal . Those of us who read the Wall Street Journal on November 10, 1997, would have noticed the article “Financial services talks heat up”. That article stated that Canada would submit a revised offer committing itself to open branch banking to other WTO members. In other words, Canada made a commitment on November 10, 1997 to open up its doors to foreign banks. We did not learn about that in Canada. We had to read it in the Wall Street Journal .

On December 12 a government press release came out stating that Canada welcomed WTO financial services agreement. Services such as banks and insurance companies of a foreign nature would have access to Canada. That was the formal announcement.

Just a few days later guess what other announcement was made? It was the announcement that the Royal Bank and the Bank of Montreal were to merge. They had read the newspapers as well. They were aware that the Canadian government had negotiated a deal with the World Trade Organization to allow foreign banks to come into Canada. The Royal Bank and the Bank of Montreal said they had to do something about it. They had to get a little tougher and bigger and merge in order to confront the foreign banks being allowed into Canada and made that announcement. This apparently shocked the Minister of Finance.

Knowing the discussions that take place around these issues, I suspect the banks were aware of the discussions in the World Trade Organization regarding financial institutions. I am sure the Department of Finance would have been in touch with the major banks of Canada to alert them to this fact.

What did the Minister of Finance expect, that the Canadian banks would just sit there and say that any foreign bank could come into the country and be able to operate? They had to take some steps to protect themselves, and merging was one of the options.

I will make a prediction today. Soon, because of the foreign banks that will be coming into Canada, in particular at the commercial level, and because of the increased competition from these great big foreign banks we will have to revisit the idea of bank mergers. In order to compete the Canadian banking industry will have to take on the international banking giants. They are too small to do it on their own so they will have to merge in some form. Will the Minister of Finance be open to some aspect of merging?

We now understand the changing world conditions and the changing conditions of international banking. We have huge American, European and Japanese banks now operating in Canada at the commercial level. We have to protect our Canadian banks and allow them to grow. Then the debate will be over and mergers will be announced in due course.

That is my prediction. I hope I am wrong in my prediction but that is the way I suggest things are likely to evolve.

What does the legislation do? I listened to my friend, the secretary of state for financial services. He is a man of great integrity. He is a man whose words I listen to carefully and whom I often support. I am encouraged by his openness. We will notice in today's issue of Hansard that on the issue of whether foreign banks coming into Canada will help the small business community he said hopefully. That was his word. He was hopeful the foreign banks would be providing services to Canadian small business that are in search of capital.

I give the minister credit because he certainly did not say that this would be good news for small business. He said that he was hopeful. I give him credit for being hopeful at least. Surely we ought to do something more than simply being hopeful that small business will have better access to capital. I will set that aside for now.

Anybody who believes for a moment that Bill C-67 will result in foreign banks coming in and providing much needed competition for the citizens of Canada is dreaming in Technicolor. That will not happen.

It is clear. They are here. They are interested in commercial banking. Their primary interest is not in retail banking. They tried that. We had all kinds of foreign banks coming to Canada in an effort to provide retail competition. Most of them have left or have identified a small niche market which they are in at the moment.

By and large, expansion in the retail banking sector by a foreign bank will simply not happen. The big Canadian banks have that market pretty well sewed up. There will be a creaming off of the system. We will have increased numbers of foreign banks competing with our national banks to get the best business.

One thing about big business is that it does not now rely on Canada's banks. Big business has access to capital on a global scale. It can access capital in Europe. It can access capital in the United States. It can access capital in Asia.

This is not necessarily a problem. Basically we will have some big banking giants competing with our banking giants for the very lucrative top end commercial market. That is fair enough. That is what will happen. That is what the banks say they are interested in. They are not interested in providing more competition at the retail level.

In other words, they are not interested in providing competition that will benefit the people of Canada in any meaningful way. They will not open branches in small communities. They will not open branches in rural communities. They will not provide better services in small towns of Canada or in the suburbs of our cities.

They will be on the main street. They will be on the Bay Streets of Canada competing for the international global capital market. That is where they will be. Let us understand the average Canadian citizen will not benefit by the existence of foreign banks in this country.

For those people who are operating small businesses in Canada, for those people who are probably operating medium size businesses, for those people who are self-employed, running home based businesses or small operations, foreign banks will be of little if any help at all. That is not the market foreign banks are looking for.

In terms of the problems of accessing capital, the problems of establishing good operating lines of credit, and the problems of accessing money for small entrepreneurs, for small business operators and for self-employed individuals will not be assisted in any meaningful way by allowing large foreign banks to open operations in Canada.

The legislation says that to open an account the minimum deposit is $150,000. How many people have $150,000 to deposit into a bank just like that? We are talking about a certain amount of people, not average individuals interested in the banking services of Canada.

When I listen to some of my friends saying this will create competition for Canadian banks in terms of getting them to lower their service charges and so on, it is just by and large dreaming in Technicolor. That will not happen.

[An hon. member]

They will probably go up.

[Nelson Riis, NDP, Kamloops, BC]

As my friend from Winnipeg says, they will probably even go up.

[An hon. member]

They will be losing money to the other guys.

[Nelson Riis, NDP, Kamloops, BC]

They will be losing money to the other guys and have to go elsewhere for their profits. Service charges are a lucrative aspect and something they could easily introduce.

Let us acknowledge very clearly the debate we are having today. The legislation will go to committee, come back here for debate and off to the Senate. That is essentially meaningless because it is a done deal. The government commitment at the World Trade Organization back in December 1997 was that it would do this. Therefore parliament is irrelevant. Parliamentarians are irrelevant. The finance committee is irrelevant.

Let us consider what we are doing today. We are talking about a major change to Canada's banking. We have just gone through a long process of looking into the future of Canada's financial services sector. A huge report was recently tabled.

The government says it will come out with a white paper to talk about the future of the financial service sector in Canada over maybe the next decade or two or three. Why are we taking this decision today on introducing foreign banking? This seems to be the cart before the horse. The horse is not out of the barn and the cart is already running down the road. There is something wrong with this process.

[An hon. member]

You know what the cart is full of.

[Nelson Riis, NDP, Kamloops, BC]

My friend says that we know what the cart is full of. Yes, we probably do know what it is full of. That is why I say I feel like a rubber stamp today. I know that by and large the debate is absolutely meaningless in terms of having any influence on the future outcome of the legislation. It is incredibly frustrating.

There is another aspect to the legislation. I listened carefully to the explanation of the secretary of state on how this would be helpful to the average citizen. I made some notes as well. I probably used my own wording. I do not think he said it was some version of the trickle down approach, but that was my interpretation of what he was talking about.

If we could provide large foreign banks with an opportunity to come into Canada and compete with our banks at the upper end level of huge corporate business, he said that the benefits would eventually trickle down to the normal folks of the country. In other words, give a break to the large international banking community, the large international banks, be patient and eventually the benefits will trickle down to the average citizen.

[An hon. member]

There are no breaks.

[Nelson Riis, NDP, Kamloops, BC]

I hear what my friend says. We are just changing Canadian legislation to allow greater access for large foreign banks to come into the country. That is a pretty major change in how banking is conducted here.

The secretary of state for financial services said that he had faith in the trickle down approach. He said if we waited long enough eventually the good things would trickle down on us. If average Canadians were asked if they wanted to be trickled on, they would say no. Being trickled on is not something they find attractive. They probably feel they have been trickled on for a long time.

[An hon. member]

They are probably trickled off.

[Nelson Riis, NDP, Kamloops, BC]

They are probably trickled off at this point. Getting trickled on, which is what the legislation is all about, is not the kind of thing we want to see in Canada.

We would maybe welcome a change in legislation if in fact it meant that there would actually be real competition so the average citizen would benefit by lower service charges, by a greater range of services and by easier access to financial services. The legislation will do the opposite. It will put pressure on the existing banking system to cut back to enable it to compete at the high end level.

What does cutback mean? It means a whole bunch of people will lose their jobs. A whole bunch of people will lose access to branches in their various communities. Branches will be closed. The banks have already acknowledged this. The Royal Bank the other day suggested that it would have to cut back at last $400 million in the next little while.

Cutting back $400 million means a whole lot of people who have jobs today will not have them. A whole lot of people will be inconvenienced so that the Royal Bank of Canada can compete at the upper end of the commercial lending market.

What is our job here? Is it not our job as elected representatives to protect the interests of ordinary people? We do not have to protect the interests of banks. Goodness, they have small armies of lawyers, financial experts and lobbyists and unlimited amounts of money. They do not need our protection.

The average Canadian expects us to represent their interests. That is why the folly of this debate today and this discussion is to give the illusion to people sitting in the gallery that somehow this is an important debate when the deal was cut two years ago when the Minister of Finance said “I promise that we will pass legislation permitting foreign banks in Canada before June 1999”.

What are we doing here? We all are like a bunch of rubber stamps. Stamp, stamp, stamp, that is all we end up doing now. As long as we understand we are just rubber stamps, then that is fair enough, but let us not pretend to anybody listening to this debate that this is meaningful in any way. The Minister of Finance has decided on this.

Let us understand what this reveals. Who runs this country? Who runs this government? Is it the members of parliament elected by their constituents who make decisions? The answer is clearly no. Is it the cabinet that sits there in secret and makes decisions? The answer is absolutely no. One person sitting over there makes all the decisions, the Minister of Finance. He made the decision on whether we should have foreign banking. Was it discussed among the Liberal caucus members? No, it was not.

[An hon. member]

Read our report.

[Nelson Riis, NDP, Kamloops, BC]

The report came after this was signed. My Liberal friend reveals the problem. The Liberals did not start the report until after this was signed, sealed and delivered. He reveals the fact that he actually thinks he is not a eunuch. He actually thinks he has some energy, that he has some role to play. He does not. He is just a nice piece of backdrop that every now and again is asked to bleat, what we call voting, and that is his job.

Let us understand that when we debate legislation like Bill C-67 we are acknowledging one more time in a long list of acknowledgements that one person runs this country and runs this government, the Minister of Finance. He decides now on education policy. He decides on health care policy. He decides on environmental policy. He decides everything.

Once again, should we have foreign banks? My friend says there was a committee roaming the country looking into this. I am on the finance committee. We actually study this. It was all after the fact, after the Minister of Finance had committed to the world that this is what the Government of Canada would do on a particular day, and that is what we are doing. That is why this is really a frustrating place sometimes.

I like the Minister of Finance. He is a smart guy. He is not an expert on health care, education and so on. Maybe foreign banking is getting close. That is not the way we are supposed to work in this place. Members of parliament are supposed to have some role in deciding on the appropriateness of certain legislation.

I lament the fact, I regret the fact that we are living in a dictatorship. It is a kind of elected dictatorship, because we do elect the dictator every four or five years, but basically once that is done, that is it. We are all a bunch of rubber stamps. We sit here and stamp ourselves and that is it, and the Minister of Finance decides what will go on.

It is an elected dictatorship in the hands of the Minister of Finance who now decides all types of economic and social policy and all types of foreign policy. Look at our defence budget. Who decides on the nature of Canada's armed forces? Is it the minister of defence? No, it is the Minister of Finance because he decides on the financial ability of our armed forces to develop the infrastructure they require.

This is frustrating. I am frustrated. I know other members of parliament are frustrated. They are shaking their heads. Even some Liberals are shaking their heads one way or the other. I know the people of Canada are frustrated because they know that the government ignores them. They say they feel alienated. They feel left out of the circle. Of course they should feel alienated because they are left out. They are not considered. Their views are not considered.

We do not support the trickle down theory of economics. We do not like the idea of foreign banks coming into the country and not providing any useful services to the average Canadian. We lament the fact that this debate is irrelevant. What I am saying is that we will not be voting in favour of the legislation.

[Bill Blaikie, NDP, Winnipeg—Transcona, MB]

Mr. Speaker, I would like to ask the hon. member a question. I could have asked him off the record but then the people of Canada would not have benefited from his answer. The member was speaking about the way this legislation has its origin in the WTO and in the international financial services agreement which was signed by this government a day before the Royal Bank and the Bank of Montreal announced their intention to merge or issue their wedding bands or however one wants to describe this.

That was no coincidence. What struck me at the time was the false outrage of the Minister of Finance who claimed to be totally shocked and surprised that the banks might be considering this when in fact the day before the government had signed an agreement which in some ways precipitated the banks' considering the advisability of merging, something we are against but which nevertheless we recognize was effected by the signing of this financial services agreement.

Would the member care to comment more on that sequence which is something I do not think the Canadian public was fully aware of then or is fully aware if now? There is the way the government prejudiced the outcome of the entire organization of our banking industry by signing this agreement with no debate in the House of Commons beforehand, and still no debate until today. Now it expects us to pass something as significant as this after about two hours of debate. Clearly this is not something we are prepared to co-operate in. We feel this kind of thing should receive more debate and I am sure the member would want to help that happen by commenting on what I have just said.

[Nelson Riis, NDP, Kamloops, BC]

Mr. Speaker, once again the member for Winnipeg—Transcona has asked the kind of intelligent, thoughtful and probing questions we do not hear enough of in the House. My friend asked me to give a short history lesson.

People who read the Wall Street Journal would have noticed on November 10, 1997 a small article stating that Canada would be submitting a revised offer on that day committing itself to open branched banking to other WTO members. We were perplexed by this because we had not heard about the government negotiating WTO's openness for foreign banking. There had been discussions of foreign banking but we thought it would wait until the finance committee report was submitted to the House and until other reports underway had been completed.

We were perplexed so we made some inquiries in the House. We found out that the government had been negotiating changes to the financial services act for some time, that it had been negotiating the best way to open up Canada to foreign banks. This made everybody's ears perk up.

On December 12 we got an elaborate news release stating that Canada was now welcoming the WTO financial services agreement which would open up Canada to foreign banks and foreign insurance companies. There was no debate here, not even a ministerial statement. Unless we had the inside track through the office of the Minister of Finance, there would be no way the ordinary citizen even knew this was taking place until it was announced. Was it announced in the House of Commons? No. That would be the last place. It was announced in the national press theatre. That is where the announcements are. Why would you make an announcement in such an irrelevant place? It feeds into this cynicism.

As my friend said, then the banks came out with their notice. They said if the Government of Canada has just allowed the floodgates to be open for foreign banks, they have to do something and they have been thinking about a merger so they will announce their intention to look at merging.

We see the sequence. I add one more element to what I said earlier. Now that the foreign banks are coming in, and the biggest foreign banks now have access to Canada, we will soon hear a case to lower the 10% ownership level for our banking system. Then we will see more bank mergers announced because we will have no choice under the WTO.

[Jay Hill, Reform, Prince George—Peace River, BC]

Mr. Speaker, I listened with great interest to my hon. colleague. I thought it was a great speech.

I really do not have a question for him other than I would like to hear him elaborate at greater length about the elected dictatorship in this country.

[Nelson Riis, NDP, Kamloops, BC]

Mr. Speaker, this is a little off the topic but I guess not really when we are trying to make the point that the Minister of Finance essentially runs the show now and he is run by the WTO.

What we are saying is that we are becoming irrelevant now in terms of what is important. Earlier today in question period my friend asked a question about catholic newspapers. The parliamentary secretary indicated that one of the reasons they took this action was because of the World Trade Organization. Now catholics from coast to coast to coast who are looking forward to their publication on a regular basis may not see it anymore because of the World Trade Organization's ruling. What does the World Trade Organization have to do with whether catholics get a decent news letter? That is what it has come to.

[Roy Cullen, Liberal, Etobicoke North, ON]

Mr. Speaker, the member for Kamloops, Thompson and Highland Valleys is an experienced member of the House but I am wondering if his constituents are listening. If he feels eunuch like, maybe the constituents would be better advised to send a member of the government side to this Chamber.

As part of a task force chaired by the member for Trinity—Spadina, it was the members on this side who recommended strongly against the bank mergers. Lo and behold the government did not allow the bank mergers to go through. Maybe the member over there feels eunuch like, but not the members on this side.

I ask the member a question with respect to his comments. He talked about the trickle down theory and about all the breaks that were being given to these foreign banks. I wonder if he could cite any of those breaks. What this bill is about, if the member had read the bill, is breaking down the barriers to entry and creating more affordable and accessible financial services for all Canadians. Can he identify the breaks to the foreign banks mentioned in this bill?

[Nelson Riis, NDP, Kamloops, BC]

Mr. Speaker, I thought my friend actually answered his own question when he said what changes are being made to benefit foreign banks.

That is what the whole act is about. There are 141 pages of ways and means to permit, encourage and enable foreign banks to access the Canadian capital market. That is what this is all about. In other words, it removes the barriers that presently exist against foreign banks. If that is not helping foreign banks I do not know what is. We are saying we are now open for business for foreign banks to come in and cream off the top of the market. That is what this is all about.

My friend reminded me of something that I forgot to say in my speech, the Liberal task force on bank mergers. I will ask this rhetorical question. Did the Minister of Finance have the courtesy to ask the members of the House of Commons who represent all the people of Canada, not just those who support Liberals but people who support the Reform Party, the Bloc Quebecois, the Progressive Conservative and the New Democratic Party, to seek the views of Canadians as to whether the banks should merge? No. He asked some of his backbenchers to keep him out of trouble. It must get awfully boring sitting there bleating all the time. Rather than bleat for the next few weeks they can go out, travel around and then he will tell them what to say in the end.

I use that again as an example of the Minister of Finance and the government abusing this place. They do not ask MPs to do something. They ask a bunch of Liberal flacks in the back row to do something. That is not the way it is supposed to work.

[André Bachand, Progressive Conservative, Richmond—Arthabaska, QC]

Mr. Speaker, I followed this debate with a great deal of interest, including the comments of the hon. member for Kamloops, Thompson and Highland Valleys, who displayed an unprecedented degree of frustration with government members.

The hon. member for Kamloops, Thompson and Highland Valleys has been here for quite some time. He can usually live with his frustration. If he ever has problems, he can always go to a therapist, including one from the Reform Party.

My colleague and friend, the hon. member for Sherbrooke, also expressed a great deal of concern about clause 7.1. I hope the decision not to support the bill will not be based on clause 7.1. After all, that clause includes the key word “may”. As members know, there are many problems concerning financial institutions in Quebec.

What happens is that the financial system is changing because of the WTO, among other factors. But the problem is more global than that. It is not the first time that we go through this kind of major change. We experienced a similar situation 25 or 30 years ago, when federal and provincial legislation was adjusted. Quebec had made legislative changes to prepare the ground for the major shakeup that had taken place.

These changes had a very negative impact on certain lending institutions in Quebec but, in the end, consumers were the winners.

What is clear is that today's bill is the result of WTO negotiations. This bill should have been debated in the House shortly after the WTO hearings. Officially we were told we had to wait for the report on bank mergers, but in truth, the finance minister wanted to wait for the decision on bank mergers to avoid giving the banks any legal argument regarding the fact that foreign banks are beating a path to our door. They are now in. It is made official by this bill, they are moving in.

Is Canada ready for this? Is Quebec ready for this? Probably not. The government made political hay on the issue of bank mergers. I can guarantee that this same government. which prevented bank mergers from happening in 1998, will allow them to go ahead in 2000 or 2001. Mark my words. It said no then, it will say yes later. Why? It will argue that the international environment has changed. The proof will be in the fact that Bill C-67 will have been passed by this House.

The move towards bank mergers in Canada is not over. What we and others fear however is that bank mergers will lead to a massive concentration of financial markets, insurance and car loans.

It was also feared that bank mergers would bring about a major reduction in services to savers in Quebec and Canada, particularly in rural areas. Guess what is happening today? Bank mergers are not allowed to go ahead.

A number of banks announced massive layoffs. Many banks, big and medium one, will announce branch closures. In Quebec, the flagship caisses populaires have announced—and will be discussing on the weekend—a major reorganization of local caisse populaire federations. Over 300 small caisses populaires in remote areas are going to close. Massive layoffs are taking place throughout Canada's financial sector. And there have been no bank mergers yet.

This has been made into a strictly political issue and the broader picture largely ignored. Yes, foreign banks are entering the country and yes, foreign banks will increasingly take hold. Yes, it is true that, with computer technology, an American credit card can be used to pay bills in the United States, that a car can be bought through the Internet, and an American loan taken out as well. All that is true.

Bill C-67 legalizes only a small part of what is now going on internationally. Whether we like it or not, even though the major banks have not been allowed to merge, major changes are still taking place.

And yet, the number of branches is still dropping. And yet, the job losses expected to follow bank mergers are occurring; it is just less obvious. The Minister of Finance has arranged not to be held responsible for branch closings and job losses by saying no to the bank merger.

These branch closings and layoffs are therefore being blamed on the nasty Canadian banks and Quebec's mean caisses populaires. It is their fault, and the ministers of finance in Ottawa and Quebec City are off the hook.

A wonderful opportunity has been lost to set up a financial safety net for the savings of Canadians. We missed an opportunity. At present, there are no bank mergers but there is no financial safety net either. In remote areas in Quebec and Canada, branches are closing, services are being reduced and fees are rising. This is what is going on. And yet, there have been no bank mergers.

Bill C-67 will legalize something we already know is coming. There will be a complete reorganization. At the end of this year or at the beginning of the year 2000, there will be other applications for mergers.

We can be wiser, because Canadian banks know that the American and foreign institutions are coming. There could be a legislative change which would not bring official mergers of Canadian financial institutions. However, the legislation says nothing about services agreements, at present. We should not be surprised if the Royal Bank, the Bank of Montreal, the Toronto Dominion Bank, the CIBC and Scotia Bank sign service agreements without going as far as merging.

In a town with a population of 6,000, for instance Asbestos in Quebec, where there are several bank branches, we can be sure that one of these branches will close while the other remains open. There will be service agreements. Each branch will keep its sign outside, but the number of branches of each bank will be reduced.

If there are no legislative changes, the government will have to deal with the situation and allow one or several bank mergers, or pass a bill at the last minute to set terms for bank mergers or service agreements between financial institutions, otherwise the market in Canada and Quebec will be taken over by foreigners and we will not be prepared for it.

Yes, we are open to competition. Yes, we are not afraid to have our institutions and businesses compete in the United States. Yes, we are prepared to let the Americans into our country with their financial services. But can we be prepared with a financial safety net, which will guarantee that the people of Quebec and of the rest of the county will be protected?

Reduced service charges, more customer services, continued services to rural areas, these are some of the demands that were made when the whole issue of bank mergers was being discussed. Unfortunately, the issue got rather clouded and today Bill C-67 reflects only part of the discussions.

Bill C-67, which was to be voted on in the House, was held up in order not to give the financial institutions that wanted to merge the legislative argument that “Yes, it is true, the foreign banks are on the way here”.

If one goes out and asks people in the street, they will say “We are fine now. Those big bad banks did not merge, so we will be protected. I'll still have my local branch. I'll still have my teller; service charges won't go up too much; I won't have to deal with that darned banking machine too often”. That is what they think, but that is not what is going to happen.

If there is an agreement, what we need in this country is not subsidiaries, but actual branches. There is a $150,000 investment, and some people see this as positive, as an element of protection. The only ones that will benefit from competitive service will be the people who are better off. That is a pity, because it was one of the arguments used by the Reform Party.

They also said that the $150,000 figure was negative, since it deprived all Canadians financial consumers, all Canadians wishing to save money, of any entitlement to more competition.

Unfortunately, we do not have the overall picture. The MacKay report was good, because it did provide the overall picture. But who has read the report among those who use their bank cards daily or go to the bank every Thursday to deposit their pay cheques? No one. The only thing that is remembered from the MacKay report is that it was against bank mergers. But it did not end there. It was much more than that.

It was a wake-up call about what we can expect from the banking industry at the international level, but the issue was not addressed in the House. We will miss the boat.

I mentioned the MacKay report. Bill C-67 only provides that foreign banks have to open branches, instead of subsidiaries. There is no one on the face of this earth who can make any sense out of this bill.

What it means is that, first of all, the financial environment will make it easier for foreign banks to set up shop in this country. Second, branches will close, jobs will be lost, services charges will go up and services will be reduced in rural areas.

The new legislation will come into force and people will say “We have a problem. One option is to reduce the minimum $150,000 loans.” Foreign banks will be brought down to the level of other banks, to the level of branches, not subsidiaries, just branches. Watch out for what will happen during the next two years.

At that point the foreign banks will do their lobbying. Financial institutions, including the caisses populaires in Quebec—do not be surprised of they make agreements; they have already done so, but the Mouvement Desjardins will be reaching agreements with others in order to meet the competition—will be amalgamating and entering into service agreements more and more.

Then there will be a problem in the regions and with the SMBs. BDC reports will prove there are financing problems for SMBs. The government will be running around trying to put out as many fires as possible. They will not be prepared for the inevitable, that is, international competition within a country. That is today's reality—international competition within a country. That is today's financial reality, and we have to live with it.

Credit is even harder for people to obtain, and yet banks will not be amalgamating. There is nothing. People earning a lower or middle income have a lot harder time borrowing today than five or ten years ago. And yet the interest rates are low.

Look at consumer protection groups. Look at what is happening in Quebec with the difficulty in borrowing. The guarantees they want are incredible. In the past, they wanted your shirt; now they want your pants, your underwear, your socks and those of your parents and your uncles. That is what they want when you borrow these days. Why? Because the banks and the caisses populaires in Quebec cleaned out their financial portfolios.

Financial institutions have financial ratings for borrowers like you and me. Mr. Speaker, I know yours is excellent. A bank may, for example, have a rating between 1 and 9. One is the best rating and it is yours, Mr. Speaker. A Reformer would probably get a rating of nine. Why? Because that party is almost at the end of its political life. We do not know what rating the Conservatives would get.

[An hon. member]

And what about the Bloc?

[André Bachand, Progressive Conservative, Richmond—Arthabaska, QC]

The Bloc? That would be 5.5.

What happened is that financial institutions did a cleanup. One of them, which I will not name, decided that it would get rid of all its customers' accounts with a rating of 6, 7, 8, 9 and even 5. This means that if you are a customer and have a hard time making ends meet, when the time comes to renew your personal loan or whatever, the bank informs you that it will not renew your loan. It cleans up its financial portfolio.

All of sudden, the customer is faced with the bank's refusal to renew the financing. Think about the person who goes looking for alternative financing. In the old days, Household Finance, not to mention it, was there just in case. Even that institution has tightened up its lending conditions, now.

The situation regarding our country's financial institutions was not planned properly. Many changes occur and people are very concerned. If we look at what is going on in Quebec, or in the rest of the country, we can see that people are worried about what will happen to services.

I see my Bloc Quebecois colleague nodding. People in Quebec are very concerned about what is going on. My colleague, the member for Sherbrooke, explained it very well. Right before an election, the Government of Quebec introduced a legislative amendment allowing people to be more closely involved, by filing complaints about financial institutions in Quebec, including the caisses populaires.

What power does this body have? To receive complaints, the way the ombudsman does? It has no legislative authority, just political.

Bill C-67 represents an obligation, with international agreements that must be observed. I cannot examine the bill from a fiscal point of view today. I am sure members would be able to follow me, but I do not really know myself what I would say. It is a very complex issue.

My criticism is that this bill should have been discussed rapidly after the agreement between all the WTO countries with a view to standardizing the international financial system. That is when it should have been done. This was a political issue. I use the word political, rather than economic or financial, advisedly. The political issue was bank mergers.

Apples and oranges were compared, oil was thrown on the fire, and things were confused generally with respect to the banking issues. It is most unfortunate.

In future, I hope that the necessary time will be taken to ensure that there is a financial safety net for Quebeckers and all Canadians. They will need one.

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

Mr. Speaker, some aspects of our colleague's speech were most interesting, even though he got carried away at times.

Regarding his assessment of the Reform Party's political future, I think we would have a consensus. Regarding the Bloc Quebecois, I think the mark would be close to 9. And regarding the Conservative Party, I understand everything is possible.

Having said that, I want to ask my colleague a question. I believe there is one concern he shares with many members of the House, namely access to financial services.

I represent the riding of Hochelaga—Maisonneuve. In 20 years, the number of bank branches in my riding went from 20 to four. Access to financial services has become a problem for the most disadvantaged among us.

[Mauril Bélanger, Liberal, Ottawa—Vanier, ON]

Then why did you support bank mergers?

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

I do not know whether the member for Ottawa—Vanier is speaking up to encourage me to go on, but the fact is—

[Mauril Bélanger, Liberal, Ottawa—Vanier, ON]

Why did you support bank mergers?

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

Mr. Speaker, the member for Ottawa—Vanier is a little confused, but I will straighten things out for him.

The Bloc Quebecois was almost unanimous in saying that it would accept bank mergers as long as there would be guarantees with regard to access to capital, the Community Reinvestment Act and, most importantly, the ability of people to be served at any branch.

That said, the question I want to put to my colleague from Richmond—Arthabaska, an interesting speaker in this Parliament, is the following. Would he agree that, if we did what the United States has done and passed a law on community reinvestment, it would be the best thing to happen to the economically weak?

My colleague, who agrees with me, knows what a law on community reinvestment can do, which is to evaluate the involvement of each bank in its community.

[Mauril Bélanger, Liberal, Ottawa—Vanier, ON]

You would do better to get your act together.

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

That is what we need, and the member for Ottawa—Vanier agrees with me.

I ask the member for Richmond—Arthabaska if he agrees with my assessment. I am not asking him to comment Quebec's potential independence, except to say that it is inevitable.

[André Bachand, Progressive Conservative, Richmond—Arthabaska, QC]

Mr. Speaker, what is inevitable is that, even within the Bloc Quebecois, there is no consensus on this. Perhaps the addition of a few Conservatives to the membership has confused things a bit, who knows.

One thing we do know is that the presence of former Conservatives within the Bloc Quebecois sometimes gives rise to worthwhile logic.

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

That's the United alternative, an appeal to the United alternative.

[André Bachand, Progressive Conservative, Richmond—Arthabaska, QC]

The hon. member for Hochelaga—Maisonneuve said that branches are being closed in his riding and, as I said in my speech, this is happening even though the banks were not allowed to merge.

Branches of banks and of caisses populaires are merging, and people are afraid that this will happen primarily in less advantaged communities and neighbourhoods. Unfortunately, rural areas are always less advantaged, and the major urban communities always have disadvantaged areas more likely to be without any suitable financial services.

When we speak of a financial safety net for investors in Quebec and in Canada, what we mean is that people need protection. If there can be some kind of tax or refund to the taxpayer, why not?

[Bill Blaikie, NDP, Winnipeg—Transcona, MB]

Mr. Speaker, I was interested in the remarks by the hon. member a few minutes ago about the ideological confusion that exists within the Bloc. He gave credit for that confusion to the presence of some Conservatives within the Bloc.

I would certainly remind him that the Bloc was founded by Conservatives. The influence of Conservatives in the Bloc has been persistent throughout, particularly when it comes to questions having to do with globalization, the WTO and the whole question of free trade and the liberalization of trade and investment.

I see now at least one new member of the Bloc who is questioning the whole globalization phenomenon. Hopefully, he will have some influence on his colleagues.

However, I did not rise to question the Bloc because the Bloc was not speaking so I will try not to get diverted. I will ask a question of the member who was actually speaking.

A number of things have happened over the last little while. One in particular is our debate on this agreement which is much after the fact. This is legislation to implement an agreement that the Government of Canada signed over a year ago without parliamentary debate or consultation.

The member's party has been an uncritical advocate of the World Trade Organization and the global phenomena it represents whereby more and more decisions that used to be taken by national governments are now taken in the course of bureaucratic negotiation at the WTO. Does this not give the member some pause for reflection, some second thought about the wisdom of the past? His party set our country on this path with the beginning of the FTA and NAFTA, a direction albeit followed and accelerated by the Liberals in spite of the fact that they had said they would do otherwise when they were running in 1993. However, I do not want to get diverted again and talk about the Liberals.

I want the member to say whether or not he has any concerns in this regard.

[André Bachand, Progressive Conservative, Richmond—Arthabaska, QC]

Mr. Speaker, I will not talk about the Conservative Party either, except to tell the NDP member that there is a Conservative government in Alberta, in Manitoba, in Ontario, in Prince Edward Island and in Quebec. As members know, there are two former Conservatives in Quebec: one is the province's premier, while the other one is the leader of the opposition. Therefore, there is a Conservative government in Quebec. This is just a joke.

[Mauril Bélanger, Liberal, Ottawa—Vanier, ON]

It is a good one!

[André Bachand, Progressive Conservative, Richmond—Arthabaska, QC]

As for the numerous international agreements that were signed, it is true that, at some point, we begin to wonder about what is going on. I remind the NDP member that one the candidates for the Conservative Party leadership, Mr. Orchard, raised that issue and often said “To regain our sovereignty”.

This makes us realize that we will have to be much more sensitive to what is going on when the time comes to sign futures international agreements.

Do we feel we are losing part of our sovereignty at the expense of globalization? We must never forget that we cannot afford to lose that sovereignty. If that concern surfaces, then we will have to react.

Earlier, I mentioned that we must face international competition even within our country. This may sound strange, but there is international competition within a country. Such is the result of the many treaties that we signed.

I am not saying we should revisit the agreements that we signed in the past. We made the right decisions. However, opening markets through international agreements such as those does carry consequences. It impacts on those who live in our country. Some people benefited from these treaties, but let us not forget that others were adversely affected.

If we are aware of that, then we can continue to be a key player on the international scene, while being even more sensitive to the impact of any agreement or contract that is ratified.

[Serge Cardin, Bloc, Sherbrooke, QC]

Mr. Speaker, further to the remarks by the member for Richmond—Arthabaska, I am pleased to hear that he is largely in agreement with what the Bloc Quebecois said about the MacKay report.

He mentioned protection of employees' jobs, bank charges, access to financial institutions, easier credit, and, of course, the obligation to reinvest in the community raised by the member for Hochelaga—Maisonneuve.

In light of the arguments we advanced and the purpose of the bill, as well as the reference to your credit rating being number one, Mr. Speaker, am I to understand that the member for Richmond—Arthabaska intends to boost his credit rating by joining the Bloc Quebecois?

[André Bachand, Progressive Conservative, Richmond—Arthabaska, QC]

Mr. Speaker, on the topic of credit ratings, various polls showed the Progressive Conservative Party last in the polls. I think we were even right off the scale and certainly out of credit at one point. We are doing better now.

No, I will not be joining another party. It is true, however, that the Progressive Conservative Party often has similar concerns as well as ideas on the Quebec issue.

What we hope, however, is that the hon. members of the Bloc Quebecois would also share certain ideas, certain interests and a certain plan for Canada with the Progressive Conservative Party in the future.

[Bill Blaikie, NDP, Winnipeg—Transcona, MB]

Mr. Speaker, I would not have mentioned him but it is very interesting that the Conservative member mentioned Mr. Orchard. He was a candidate for the leadership of the Conservative Party who ran against the free trade agreement. I thought it funny to run for leadership of a party that brought in the free trade agreement when one is a virulent, anti-free trade guy. I now understand why he always had so many unkind words to say about the NDP. He was a Tory at heart who just could not find a Tory party that fit his particular version of—

[The Acting Speaker (Mr. McClelland)]

I will interrupt in order to give the hon. member for Richmond—Arthabaska the last word.

[André Bachand, Progressive Conservative, Richmond—Arthabaska, QC]

Mr. Speaker, I think that all parties in the House could learn from the experience of the Progressive Conservative Party's openness, in its leadership race.

Mr. Orchard's contribution was to look at all the repercussions and to always be mindful of all the treaties signed. His candidacy kept us open to the world so that the world would be open to Canada. At the same time, it should not be forgotten that Canada is more than a name. It is inhabited by people and we must not lose sight of this.

I think that Mr. Orchard introduced many very human elements to the leadership race and, make no mistake, this sensitivity to the people who make up this country is a legacy that remains.

[The Acting Speaker (Mr. McClelland)]

I have received notice from the hon. member for Wanuskewin that he is unable to move his motion during private members' hour on Monday, March 22, 1999. It has not been possible to arrange an exchange of positions in the order of precedence. Accordingly, I am directing the table officers to drop that item of business to the bottom of the order of precedence. Private members' hour will thus be cancelled and Government Orders will begin at 11 a.m.

It being l.30 p.m. the House will now proceed to the consideration of Private Members' Business as listed on today's order paper.

The House resumed from March 15 consideration of the motion that Bill C-260, an act to amend the Young Offenders Act, be read the second time and referred to a committee.

Young Offenders Act

[Val Meredith, Reform, South Surrey—White Rock—Langley, BC]

Mr. Speaker, I would like to start by congratulating my colleague and friend from Surrey North for putting this private member's bill before the House.

I think back to the days when I sat on the justice committee and the hon. member for Surrey North and his wife appeared before that committee when it was dealing with Bill C-37, a bill to amend to the Young Offenders Act. I remember comments that were made after the hon. member and a number of other individuals brought to the attention of members of the justice committee the end results of the behaviour of young offenders. It caused me a bit of concern when a Liberal member of that committee said to me after the hearing that these people brought nothing to the debate other than sentiment.

I think it is very important that all Canadians, including Liberal members, understand that the feelings of Canadians are very important when we talk about legislation. Canadians must feel that they can support the legislation that is put before them by the government.

The private member's bill which the hon. member for Surrey North has introduced is really quite simple, straightforward and easy to understand. He is merely asking that section 7.2 of the Young Offenders Act be made a hybrid offence. That means that there can be a fine imposed or incarceration as part of the sanctions.

Section 7.2 of the Young Offenders Act deals with the responsibility that someone assumes in order for a young offender not to be locked up; in other words, posting bail or whatever we want to call it. It is interesting that the Minister of Justice has obviously seen the merits of this argument. I understand it is part of the new youth criminal justice bill. Therefore, I have to assume, because the government has put it into its own legislation, that it will be supporting this amendment to the Young Offenders Act.

The reason it needs to be supported now and not put on the table until the youth criminal justice bill is passed is very simply this. It is extremely important, knowing the timeframe that some of this legislation takes to get through the House, to have this amendment in place sooner rather than later.

I would suggest to government members who may be looking for an excuse not to support this bill because it is in the government's legislation to deal with the issue. It is obviously supported and it is obviously an important amendment to be made. I am hoping that when the time comes to vote on this bill governments members will be there to support the hon. member for Surrey North.

As I mentioned, the amendment deals with the issue of accountability. People sign undertakings or bonds. There is an acknowledgement or a responsibility for them to live up to what it is they have signed.

It is not just criminal matters where this happens. We run into this situation in immigration. People agree to sign a document indicating that they will sponsor an individual and that they will assume financial responsibility for a person coming from another country, and then they walk away from that responsibility.

This issue is more of a justice issue in that it is a person signing a document which says they will be responsible for the actions of a young offender and that they will make sure the young offender meets the conditions that have been imposed as a condition of their release.

What this private member's bill is doing is showing that if a person has wilfully failed to comply with the conditions they agreed to, then something should happen. There should be some responsibility laid upon them for having failed.

If a parent or guardian is unable to enforce the conditions that are spelled out in section 7, then basically the young offender should not be allowed to remain at large. That is the contract which they have signed.

When a parent or guardian knows that they are not able to control or make sure that the young person is where they are supposed to be, or staying away from friends whom they are not supposed to be mixing with, then the onus should be on the parent or guardian to notify the authorities, who would then take the young person into custody or control them in some other manner.

There is an obligation for parents or guardians to do that. The obligation which they undertook was that if they could not handle the individual they would turn the young person over to the control and authority of the courts.

It really is a question of differentiating. I would suggest that this bill is not trying to nail all parents because they are unable to know where their kids are 24 hours a day. It is aimed at the people who have entered an agreement, a legal understanding, in order that the young person not be incarcerated or held until the court case is heard. It is really earmarked or geared to that specific situation. I do not think that anyone should misunderstand that it is a broader brush, that it tries to deal with all parents in all circumstances.

Canadian taxpayers, the parents and guardians of young people, should realize that we are encouraging and supporting what the youth criminal justice bill or the Young Offenders Act offers, that young people can be released into the custody of parents or guardians.

In most cases that is perfectly all right. It works out fine. However, in those cases where somebody takes on that responsibility and then does nothing to make sure their undertakings are being fulfilled, there is something that can be done about it.

The reason the hon. member is asking for it to be treated as a hybrid offence is to give the courts the ability to put some meat behind their decisions, to put some emphasis on the responsibility that they are handing over to the parent or guardian.

As it is now, because it is a summary conviction and there is not any real penalty or sanction, it is too easy to walk away from that responsibility.

I commend my colleague for bringing this weakness in the legislation to the attention of the House. It is obviously a weakness that the government has accepted needs to be addressed, as it has done exactly that with the youth criminal justice bill.

Again I want to ensure that my colleagues understand that if it is good enough to put in a new act, then it is good enough to support now so that it can at least be in existing legislation rather than waiting for future legislation. We have no idea how long it will take for the new legislation to pass through the House and then the Senate after we have dealt with it.

For those of us who are close to the member for Surrey North it is obvious why this is important. The failure to pass this and put it into legislation can cause situations such as that which happened to the hon. member for Surrey North. His son was murdered by a young offender who was in the custody of his parent. The conditions of his release were not fulfilled. We are all very sympathetic with the reasons this bill was introduced and we certainly support its intention. I urge all government members to support this private member's bill when it is voted upon.

[Eleni Bakopanos, Liberal, Parliamentary Secretary to Minister of Justice and Attorney General of Canada]

Mr. Speaker, I commend the hon. member for Surrey North for his contribution to youth justice through private member's Bill C-260. We should all be applauding his efforts and acknowledging the work he has done on this issue.

It bears repeating that this amendment to the Young Offenders Act would not create a general liability for parents based on the crimes of their children. The proposed amendment would make the existing offence of wilfully failing to comply with an undertaking given to a court, made in connection with a young offender's release from pretrial detention, a hybrid rather than a summary conviction offence.

The proposed amendment to the Young Offenders Act contained in Bill C-260 applies where a youth has been found to be ineligible for judicial interim release under the Criminal Code test. The current provisions of the Young Offenders Act allow such a youth to be placed in the care of a responsible adult instead of being detained in custody. The responsible adult must undertake in writing to take care of the young person and to comply with conditions set by the court. Currently, if the responsible adult wilfully fails to comply with the undertaking, he or she could be found guilty of a summary conviction offence.

The hon. member for Surrey North is proposing that the potential criminal liability for wilfully failing to comply is not serious enough. On March 11 the government introduced Bill C-68, the new youth criminal justice legislation, which would repeal and replace the Young Offenders Act. It should be noted that the new legislation makes the offence of wilfully failing to comply with an undertaking given to a court to act as a responsible adult a hybrid rather than a summary conviction offence.

An undertaking to act as a responsible adult is a serious responsibility and we have acknowledged that in the changes we have made. It applies only to youth who would otherwise be detained in custody pending their trials. We acknowledge that some may well be dangerous and difficult to control. The wilful failure of a responsible adult to comply with undertakings could have tragic consequences for members of the public, as the hon. member who introduced this legislation can attest to.

Equipping those in the system with the tools to make decisions based on the facts of the case in front of them is a key direction of the new legislation. Flexibility in the options available and empowering those in the system with a full range of tools that can be applied depending on the seriousness and circumstances of individual cases are hallmarks of the youth justice legislation.

While some favour automatic provisions and set tariffs, we believe that the discretion and judgment of those in the judicial system counts and leads to fairer and more constructive outcomes.

The bill stipulates that, in each and every case, teenagers should face sanctions that promote responsibility toward victims and the community, teach them good values and help them measure the consequences of their action.

During the debate on Bill C-260 some members have commented on elements of Bill C-68 and those comments must be addressed. The hon. member for Crowfoot claimed that the government had abandoned 10 and 11 year olds who, by their criminal acts, have signalled to society that they are in need of help and assistance.

This government does not believe that criminalizing the behaviour of 10 year olds is helpful. Child welfare and mental health systems are more appropriate ways of providing safe and effective help to disturbed children. These systems have access to a wider array of services and are more age appropriate, family oriented and therapeutic than those available to the criminal justice system. I believe there is much consensus on that in the public and here in the House.

We are not abandoning these children but are working with key partners to ensure they do not fall through the cracks but get the supervision and treatment they need.

The hon. member for Crowfoot also criticized restrictions placed on the publication of names. The proposed legislation, Bill C-68, strikes an appropriate balance we believe between two legitimate and competing values, the need to encourage rehabilitation by avoiding the negative effect of publicity on the youth versus the need for greater openness and transparency in the justice system.

Allowing for the publication of the names of youth who commit the most serious crimes while protecting the privacy of those who commit less serious crimes is an appropriate balance.

We look forward to further debate next week on Bill C-68 and the opportunity to refute suggestion made by members to criminalize 10 year olds and scrap important privacy protections for youth.

The bill before us today, however, proposes a change in the penalty structure for those who wilfully fail to respect undertakings made to the court. I agree there is considerable merit in this being a hybrid offence so that the decision to proceed by summary conviction or by indictment could be made based on the seriousness of the crime.

If we are to impress on youth that the justice system should be respected, should foster values such as accountability and responsibility and that criminal behaviour will lead to meaningful consequences, then we must apply those values to responsible adults in the youth justice system.

I thank the hon. member for Surrey North for bringing this important proposal forward and I assure him that it is included in Bill C-68.

Like a good number of Canadians, the hon. member for Surrey North has put forward proposals to reinforce the Canadian youth justice system.

Now that new comprehensive and balanced youth criminal justice legislation has been introduced by the government and that a new youth justice system will soon be implemented, we are looking forward to work hand in hand with all Canadians who, like us, want to solve the complex issue of youth crime.

We want to prevent youth crime by establishing sanctions for the broad range of criminal acts committed by young people and by helping to rehabilitate young Canadians and turn them into law-abiding adults.

Once again I want to insist on the fact that, as the member before me said, this provision existed in the Young Offenders Act. We are increasing the sentence provision in the new criminal justice act, Bill C-68. I again thank the member who brought this forward and I commend his efforts to see it become part of our new youth criminal justice system.

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

Mr. Speaker, I join in today's debate with a great deal of caution and earnestness.

I want to assure my colleague, the mover of the bill, that we will keep in mind at all times the unfortunate events he lived through, and which led him to enter political life.

However, after consulting with members from my party, I do not think we will be able to support the provisions of the bill, as mentioned already by the member for Berthier—Montcalm during the first hour of debate.

Yet, the bill is an important one because it highlights a fundamental issue, that of parental responsibility in the process, admittedly often a trying one, that leads to criminal behaviour and juvenile delinquency, and as members know, to deep trauma in the communities concerned.

I have been interested for years in the whole issue of crime, especially as a member of Parliament. In my riding of Hochelaga—Maisonneuve, some segments of our community are experiencing a serious crime problem.

I quickly learned that, when discussing these issues and holding a debate on juvenile delinquency and crime, one has to deal in nuance because of the different levels involved.

Crime can be a symptom: often emerging in the teenage years, it is commonly linked to gangs or personal distress. Often there is a connection between crime, the family environment, the social surrounding, and finally failures in an individual's life.

It is not the same kind of crime we are dealing with when we are talking about bikers gangs, money laundering or immigrant smugglers for example.

This being said, the question raised by our colleague is: What part of the responsibility should be assumed by a parent? The persons in charge could be the parents or anyone who has custody of the child, who is still a minor. If the guardians are negligent, that is if they have failed to exercise proper supervision, as mentioned in the bill in question, if these people have not been as vigilant as required under their contractual obligation, it is asked that they be liable to a longer prison term.

We come to our jobs as lawmakers with the sum total of our past experiences. I have the utmost understanding, respect and sympathy for the motivations behind the bill introduced by the hon. member for Surrey North, and find them highly respectable.

Nevertheless, the question arises: what impact will holding parents who have failed to meet their obligation of supervision and guidance more responsible have on outcome? I believe that the underlying question we have as a party is not a denial of the existence of juvenile delinquency. It is not a refusal to recognize that there are certain conditions conducive to the development of youth crime. It seems to me that there are two premises in the contributions made by the hon. member for Berthier—Montcalm, himself a lawyer moreover, and those made by our colleagues within caucus discussions.

My understanding of the matter is that, first of all, it is extremely difficulty to look at crime without examining a whole set of factors. Is there not a wider responsibility, a more general one, and is it not rather risky to focus essentially on the family unit? This is the first aspect we question.

Second, does the bill not reflect—despite reasons which, I repeat, for very personal considerations, are utterly responsible and respectable—a desire to say basically, at 14, 15 or 16 years of age that you are an adult to some extent and should be considered equal to someone of 30, 40 or 50 years of age, whereas we know that the circumstances surrounding behaviour at age 14, 15 or 16, however dramatic they may be, must not prevent us from making distinctions?

Why not? First, because at age 14, 15, 16 or 17 we are at our most vulnerable, our values are not entirely established and we are still learning.

Second, our opposition focuses on the fact that, as a society, when things happen in the family that verge on the criminal, should we not make resources available to this family? More basically—and I want our position to be very clearly understood—it must not prevent us from establishing whatever it takes to provide a dissuasive effect and ensure the level of juvenile delinquency in our society decreases. I think that is what all the parties in this House want.

I hope to have a chance, later on, to make the connections between youth crime, poverty and other factors which reinforce this reality, but must we not also ask ourselves what this will do to the rehabilitation process?

I would say the big difference between the Reform Party and the Bloc Quebecois on this issue is our concern with rehabilitation.

As soon as signs of juvenile delinquency start appearing within a family—and I also mean within a community—should we not ask ourselves what it will do to the rehabilitation process if the parent or guardian or the person responsible, the person who signed the undertaking mentioned in section 7.2 of the act as proposed in the bill is thrown in jail for two years? In this type of situation, do we not have a duty to bring the parent and the child closer together? Do we not have a duty to make available to this family, that is going through a difficult time, mechanisms that are based on mediation and dialogue where we have to try to understand what went wrong?

If a 14, 15, or 16-year old kills one of his peers, commits vandalism or commits any other offence under the Criminal Code, that means that, at some point, the youth rebelled against society. Of course there are different degrees of rebellion. I can understand that.

The one criticism we can address to the Reform Party is that it looks only at solutions centred on sentencing. There may be something there worth looking into, but I notice they have given no thought or consideration to understanding the causes of such behaviour and the rehabilitation process.

This is why we are not very enthusiastic about the bill. This being said, we are ready to consider it, as the member for Berthier—Montcalm said on several occasions,. But how can we make the rehabilitation process even more effective?

If the Reform Party could give us the assurance now that sending parents to jail would ensure that the young offender will be a better citizen in 5, 10 or 15 years from now, we would have no difficulty supporting the bill, but we believe there is something missing here.

We are not convinced that sending parents to jail for a longer time, with a stiffer sentence, which would prevent the child from maintaining contact with them, at least within the family unit, will enhance the rehabilitation process.

With regard to young offenders, there is already a model in Quebec. We have the expertise, we have the legislation. On the basis of verifiable data, which deserve to be discussed, we believe that the results were worth it.

I will conclude by saying that we understand and respect our colleague's motivation, but we are not convinced that this is the right way to go in order to reach the goals identified in his bill.

[Libby Davies, NDP, Vancouver East, BC]

Mr. Speaker, I am very pleased to have this opportunity to speak to the private member's bill that was introduced by the member for Surrey North.

I thank the member for bringing this issue forward. It is not always easy to bring forward a private member's bill for debate. A lot of work is involved. Next week we will begin debate on the new youth criminal justice act which is very important. I would like to congratulate the member for having done the work on this issue and for being part of a democratic process which ensures that these issues are aired.

The member's personal circumstances surrounding this issue are tragic. This is all the more reason that we need to debate these issues, to ensure that our youth justice system works properly and protection is provided not just for young people but for society as a whole.

The purpose of this bill is to make an offence as set out in section 7.2 of the Young Offenders Act a hybrid offence. As we have heard today in debate the bill does not change the section other than to make the penalty more serious. In serious cases under section 7.2, parents or guardians could face a jail sentence of up to two years if they fail to supervise their children who have been released from custody. This would be an increase from the current maximum penalty of six months in jail and/or a $2,000 fine.

Normally when a child is charged with a crime under the current Young Offenders Act, a parent or guardian signs an agreement with the court to supervise the child and enforce certain conditions until the charges are heard. This bill would increase the penalty if the conditions are not met.

There will be a much fuller and comprehensive debate in this House as a result of the newly introduced youth criminal justice act, Bill C-68. While we welcome this private member's bill as a good opportunity to debate something that needs to be aired, it is important that it also be in the context of youth justice as a whole. From that point of view it is important that the new youth criminal justice act be debated on the next day of business of the House.

We in the New Democratic Party very strongly support measures to protect the public from serious violent repeat offenders. We believe that youth who fall into this category and have been determined to be a risk to public safety should be held in custody.

One purpose of our youth justice system is to recognize when violent crimes have taken place, if custody is determined to be in the interests of the public, then those young offenders should be held in custody. We will get into this more when we debate the new act that has been introduced. We have some concerns about the impact that provisions such as the one before us today may have on families and their ability to meet conditions. What kind of difficulty will imposing a stiffer penalty have for a single parent, low income families or even families where both parents are working full time?

It is important to put on the record that although there are very good intentions around this bill, we have to have a balanced approach. We have to look at whether or not this kind of penalty will place a significant and unfair burden on some families and parents who lack the resources to strictly enforce the supervision orders. A bill such as this one may be something that becomes discriminatory.

In the last few weeks a lot of the debate in the House of Commons has been about what is happening to Canadian families and how they are under enormous stress. We have had debates from the Reform Party about the tax system. There has been a lot of useful exchanges in the House.

In today's day and age there is enormous stress on families. Parents sometimes have one, two or three jobs. Wages are being driven down. People are working longer and longer hours for less money. All of those things create stress on families, particularly on single parent families and low income families. These are very difficult times.

I do want to be clear about our concerns on the impact this bill, if it were approved, would have on some families in terms of their ability to provide the resources and supervision required under this bill and generally under section 7.2 of the act. We have to make sure that the families that can least afford the resources are not families that would be singled out and unduly punished.

If we want to deal with the issue of youth crime or youth justice, the NDP believes very strongly that we have to look at the underlying causes of youth crime. We must have adequate long term programs, not just a little bit here, a band-aid there, a new announcement today, or a few more dollars here and there. Governments at all levels have to make a serious commitment to address things like chronic youth unemployment and the lack of educational opportunities.

In my own community, I am sure every parent is aware that education has a real impact on young people. Young people who are seriously involved and doing very well in school and whose needs are being met through the educational system are very unlikely to get into trouble.

Education is a lifelong process. Young people must be supplied with the educational, employment and training opportunities they need. I and many other members in my caucus believe they are fundamental and critical things we can address as a society to ensure that we are actually preventing crime.

When kids are productive and involved in their communities and in their schools, they are not getting into trouble. They are not falling off the edge. They do not feel isolated, that nobody cares about them, that they have no future and that they have no hope.

Unfortunately, the converse is true. When we see the lack of educational opportunities, the lack of training and jobs and the lack of community support then we see kids who are very high risk. They become vulnerable to the sex trade, to illegal drug use and to youth gangs. All of those things become pressures on young people.

From our point of view, those are the issues that need to be addressed if we are serious about addressing the causes of youth crime.

Next week for the first time, the B.C. government is declaring a week to stop the sexual exploitation of children. Youth awareness week is being very much supported by the RCMP as one way to draw attention to some of the issues facing our young people and how they get drawn into a criminal and marginalized lifestyle. This is something we need to deal with and ensure that there is an adequate response.

We appreciate this bill being brought forward. As we begin to debate the youth criminal justice bill next, we want to deal with these issues in a more comprehensive way. While we do support the intent of what is being brought forward here, we do have some concerns about the impact this provision would have on some families.

We look forward to the debate that is coming forward in the next few days around the youth criminal justice system.

[Charlie Power, Progressive Conservative, St. John's West, NL]

Mr. Speaker, on normal occasions we are very pleased to speak about issues that affect our constituents but to speak about dealing with young offenders, especially young offenders with some very serious offences, is not something we prefer to do. However we do not live in a perfect world and as such, we have to deal with the issues we are faced with as parliamentarians.

I agree with the member for Vancouver East who says that we should do all these proactive things to solve the problems before they happen. But it seems in our society the old days are gone.

In Newfoundland in the old days people would say if you had three square meals a day and a roof over your head, the world was a pretty good place to live. That world of food, clothing and shelter being the only requirements for a person in society is not something which now exists.

Our society has become unbelievably complex. We need a lot of help from parliamentarians and from governments to make sure that our society is safe, that we have the basics in life which now include the requirement for a very significant social net. When one is young, when one is aged, and certainly when one is sick or disabled a lot of things are required to be put in place by governments to make sure that one has more than just food, clothing and shelter.

Education, as the member mentioned, is one of the things which is needed in a more significant and increasingly aggressive and progressive way to get at the problems before they become issues which we have to deal with.

Besides having food, clothing and shelter, citizens require safety and that governments address the fundamental things, for example, the issues of crime and youth and adult offenders which make us feel so insecure in our communities.

It is almost like insurance in reverse. We buy fire insurance to protect our homes. Most of us will never see a fire. Most of us, if we are lucky, will never see a violent offence.

There is criminal activity. We have seen some especially in St. John's West. There have been terrible incidents all across Canada. Violent young people whom we are speaking about today commit the most terrible crimes. It frightens us all. It makes us want to buy safety insurance because we have been touched by this violence.

In Newfoundland recently we have had half a dozen terrible examples of violence by young offenders against our senior citizens, some of the most defenceless people in our communities. Many times these young offenders are repeat offenders. They have been in trouble with the law in many places. When it happens to an aged person it frightens us all and makes us wonder where we are going to go.

Like all the members who have spoken on Bill C-260, I want to congratulate the member for Surrey North for bringing it to the attention of the House and to the Canadian public. Obviously we all deeply regret why the member has had to do this. I say again, when one is touched by violence there has to be a reaction to it.

I am disappointed that it took 18 months to bring the issue to the floor of the House of Commons so we could discuss an issue which plagues many Canadian communities and many Canadian families. I wonder why that has had to happen. Everyone knows the problem of young offenders, violent offenders and repeat offenders. Why could we not deal with it when the issue was first brought forward?

I remember a saying, I think it was by a president, that it would be amazing how much we could accomplish together if we did not care who got the credit. Sometimes in this place we are so involved with policy, with procedure and with positioning that we forget about the good idea. Last night we had an emergency debate. We have done that a couple of other times. If there is something that needs to be done and the Canadian public wants it, demands it and expects it, does it make any difference whether it comes from a backbencher from the Reform Party, a member of the Conservative Party or a member of the government, either backbencher or government minister? The idea is that the Canadian public wants certain things done.

I want to concur with the comments made by our justice critic, the member for Pictou—Antigonish—Guysborough who spoke when this legislation was last before the House. He said that some of the progressive advances we are talking about are not going to be seen in the government's bill, Bill C-68. Some of the better ideas are here now in Bill C-260 that we could implement.

Some of the ideas that the provinces wanted to bring in are not in Bill C-68. In many ways we think Bill C-68, the government response which will become the law of this country, is going to be regressive. It reverts to the not so good old days of the juvenile delinquency act. The idea is that repeat young offenders who are involved in offences which are less serious in nature will be tried in court as adults but then sentenced as children. Many people are left wondering why it is that it took the Liberal government 12 months of head scratching to come up with a very old idea.

The government has come up with a bill that fails to adequately protect Canadians from increasingly violent crimes committed by young people. Public opinion on the subject is so strong that it should be obvious to everybody, even the Liberal government.

While it seems it wants to project the image of a government that has toughened up the Young Offenders Act, the reality is that the patchwork legislation will do little to accomplish the objectives the minister claims to support.

Age is part of it, lowering the age to 14 when 12 or 10 is recommended. Parents, who are very proud of their young sons or daughters, are sometimes asked how old they are. For some strange reason they might say four going on forty or six going on sixty. It seems that in our progressive society where change takes place so fast some of our young offenders are ten going on forty or fifty in the way they deal with the world.

In lowering the age to 14 at which young offenders could face adult sentences for the most serious of crimes like murder, attempted murder, manslaughter and aggravated sexual assault, the government has failed to go as far as it should. Instead the ever present Liberal spin doctors are treating the important issue of youth justice as merely another public relations exercise, apparently indifferent to the substantive effects of the legislation the Minister of Justice has introduced.

Let me point out that even the minister's advisers in the Department of Justice recommended that the age of accountability should be lowered to 10 years. The minister chose to ignore this advice and we as Canadians are left to wonder why.

Another problem with the minister's bill is the ambiguity in the language it employs. This ambiguity will mean the implementation will depend on the interpretation of the legislation after the fact, instead of being clear and direct in the first instance. We are left with the same problem that the courts will make our laws for us. Some of the legislation as drafted is hundreds of pages long. We begin to wonder if lawyers who draft legislation do it so other lawyers will have reason to take it to court for appeals on top of appeals until eventually we get a new law many years hence.

I am not alone in identifying the serious deficiencies in the proposed youth criminal justice act. It has been criticized severely by the governments of Ontario and Alberta, both provinces in which youth justice is a particularly salient issue.

It seems clear that the governments of these provinces are much more in touch with the views and concerns of the residents than the federal government. They know that window dressing is not adequate response to a very real problem. They know that it is not enough to want to be seen to be doing something and that the kind of public posturing the federal government adopted with regard to youth justice is worthless without meaningful legislative measures to back it up.

I understand the spirit of the legislation introduced by the member for Surrey North. It is an unfortunate fact of our system that it has taken so long to get it here. It is also unfortunate for members of the House, and indeed for all Canadians who look to their governments for leadership on youth justice issues, that since the introduction of Bill C-260 the Liberals have chosen to bring forward such a weak response in Bill C-68.

I congratulate the member for bringing it to the attention of all members of parliament and the public of Canada. It is an issue that should be dealt with as quickly as possible.

[Lee Morrison, Reform, Cypress Hills—Grasslands, SK]

Mr. Speaker, I am very pleased today to speak in support of the bill of the hon. member for Surrey North. The bill is quite clear in its intent to make section 7(2) of the Young Offenders Act a hybrid offence to present clear and genuine penalties to people who make a signed undertaking and then fail to live up to it.

People who post bail for accused offenders forfeit it if the bail conditions are not met. Why should any responsible adult who signs an undertaking to supervise a young offender not have to pay a significant penalty for failing to meet his or her commitment? The concept is fairly clear.

The hon. member for Vancouver East suggested that the proposed legislation might discriminate against parents who for one reason or another lack the means to provide necessary supervision. Section 7(2) of the Young Offenders Act is specifically designed to protect the public. It is not put there for the convenience of the parent. It is to protect the public.

Parents are not obliged to sign these undertakings. There is no rule or coercion which says they must sign these undertakings. If a parent voluntarily undertakes to accept responsibility, I would submit the parent should be held responsible for his or her actions. It is not something that can be done frivolously.

The speech of the hon. member for Hochelaga—Maisonneuve left me somewhat bemused. I did not know what he was getting at a lot of the time. If I could cut through all of it, it would seem that he rejects the concept of individual responsibility, not just for juveniles but for adults as well. Bill C-260 is all about accepting responsibility for personal undertakings.

The parliamentary secretary and others made reference to the fact that the bill would duplicate one of the provisions of the upcoming youth criminal justice act. It would be covered in section 138 of the act, but I do not accept the premise that because the YCJA may be coming down the road some time in the future we should not be seriously considering this one small amendment to the YOA at this time. One does not stop scrubbing floors at home just because there is a plan to make major renovations. One continues normal everyday maintenance.

Bill C-260 could be enacted now. The new YCJA was only tabled last week. Heaven knows when it will become law. Hopefully it will not become law in exactly the same form in which it is now. It needs a lot of revision and renovation. We could make this one quick fix to help the public, to benefit society in general at this time, simply by enacting a bill that incidentally has been coming down the pike for a year and a half. It has taken that long to reach the point where we are now.

I get a feeling—maybe it is a misplaced feeling—in listening to the hon. parliamentary secretary that there is a slight Machiavellian motive here, the ploy that we should not worry about Bill C-260 because the meat of it will be buried or hidden away in the new youth criminal justice act when it comes down.

Maybe the broader bill is being gussied up a bit with the clause to attempt to force MPs to support a pretty noxious piece of legislation for the sake of one very valuable clause. It is like the old story about a chocolate covered smartie buried in a bowl of manure. Anyone wanting to eat the smartie knows what has to be done. I do not appreciate that approach to legislation.

The parliamentary secretary diverged a little from the debate today. I would like to respond to what she said about the child welfare and mental health systems being all that we need to look after 10 and 11 year olds caught up in the criminal justice system. That is what we are relying on right now. That is what we are doing. We are trying to deal with the 10 and 11 year olds strictly through child welfare and the mental health system and it is not working.

The new YCJA would do nothing to change an approach which has been a dismal failure. I have not had a chance to read the bill in any depth yet but on scanning the bill I cannot see very much serious improvement in the YCJA over the old YOA. It is the old car with a new coat of paint. Why are we taking this long and tedious approach to doing nothing? The Muslims have a saying that the elephant laboured and brought forth a mouse. That seems to be what is happening with the new act.

[Sophia Leung, Liberal, Vancouver Kingsway, BC]

Mr. Speaker, I am delighted to join the debate. As a member from British Columbia I commend the hon. member for Surrey North who has worked hard to introduce Bill C-260, an act to amend the Young Offenders Act. In many ways this is a timely proposal.

The government's strategy involves replacing the Young Offenders Act with new youth justice legislation which has proposed significant improvements to the youth justice system. The strategy focuses on three key areas: preventing youth crime, ensuring meaningful consequences for offences committed by youth, and improving rehabilitation and reintegration for young offenders.

The government's strategy for the renewal of youth justice launched on May 12, 1998 sets out a vision for responding to Canadians' concerns about youth crime. Clearly, Canadians want a youth justice system that protects society.

It is in the context of addressing problems with the current youth justice system through new youth justice legislation that Bill C-260 has been considered. The bill, sponsored by the hon. member for Surrey North, proposes making the offences of wilfully failing to comply with an undertaking made in connection with a young person's release from pretrial detention a hybrid rather than a summary conviction offence.

One of the weaknesses of the existing system relates to pretrial detention and judicial interim release. There is a failure to distinguish adequately between those who should be detained in custody prior to their trials and those who need not be. This situation should be addressed through greater clarity on the criteria for pretrial detention and enhanced program support to ensure there are alternatives for those who do not need to be in jail prior to trial. The hon. member for Surrey North's concern relates to those who are released and improperly supervised.

The provision of the Young Offenders Act that is the subject of Bill C-260 takes effect after the bail criteria have been applied and the youth has been found to be ineligible for judicial interim release. In such cases the current provisions of the Young Offenders Act permit youth to be placed in the care of a responsible adult instead of being detained in custody.

I thank the hon. member for Surrey North for bringing Bill C-260 forward and I assure him that it has been given every consideration during the development of the new youth justice legislation.

The new legislation will soon be introduced. It is an important component of our broad, comprehensive strategy to address youth crime.

[The Acting Speaker (Mr. McClelland)]

The time provided for the consideration of Private Members' Business has now expired and the order is dropped to the bottom of the order of precedence on the order paper.

It being 2.30 p.m. this House stands adjourned until Monday next at 11 a.m. pursuant to Standing Order 24(1).

(The House adjourned at 2.30 p.m.)