Madam Speaker, I know we have heard from the government speaker and my colleague from the Bloc who spoke in support of Bill S-40. I plan to speak on behalf of the Canadian Alliance in support of this bill as well. Although, members know our feeling about bills that originate in the Senate. Although this is an amendment, so it is a little different. We have always held the opinion that bills should originate in this House but we will make an exception here because this is a good bill.
Bill S-40 would amend the Payment Clearing and Settlement Act. It is important to note that this glitch in the act has existed for some time and the government has known about it. The Minister of Finance and his department officials have known that our clearing houses have been operating at a disadvantage to our counterparts, particularly in the G-7, which have made changes to look after the problem involving bankruptcy and dealing with the collateral and derivative contracts.
The government has known about the problem for some time. Principal groups and companies that are involved in this type of business have been saying that there is a problem. On the grand scale of running government, something like this is a minor change that would eminently be beneficial to the various types of clearing houses, to the buyers and sellers who deal with the trading companies, to our competitiveness with our G-7 counterparts in attracting foreign business to our clearing houses and to the people who buy and trade through the clearing houses.
One would think that someone in the finance department would have said “let's just get this done” and make the change. This will not change the direction of the world but it will make the people in Canada who are involved in this sector of our economy a lot happier. They will be able to attract more business, create more jobs and acquire a higher degree of technology in their operations. However this has been dragging on for some time now.
In February the member for Calgary Southeast, who was our finance critic at that time, wrote the finance minister and asked him to introduce the requested amendments as soon as possible. The way the government marks time, February, March, April, a month and a half is really nothing.
There has been precious little other business on the government agenda. It could have introduced the amendment earlier than this. As well, it could have been done even before our finance critic had to write to finance minister to ask him to get on with it. It is just the typical slow wheels of government turning. I have been here since 1993 and I have never seen government wheels turn as slow as I have with this Liberal government.
There are so many issues that parallel the movement on this amendment. One only needs to look at the softwood lumber issue. When the softwood lumber agreement was signed in 1996, there was a set termination date five years hence. The government knew that. It knew it would have to prepare for the eventual end of that agreement.
One would think it would be good government business to begin looking five years ahead from the date the agreement was signed in preparation for when it would run out in order to avoid a trade crisis. The fact is the government simply did not do that. Anyone who has some sort of gift for planning, and one would hope that there would be some in the government who could look further ahead than 10 days, would see that five years from 1996 we would be in some sort of a trade crisis with the United States unless we did some planning.
There were warnings from the official opposition about the perils that lie in the SLA. There were warnings that when the softwood lumber agreement ended we would be in a trade dispute which perhaps would lead to a crisis situation. There were warnings not to get into the SLA in the first place. Despite all the warnings, the government did not move until about six months before the softwood lumber agreement expired. That foot dragging, the same type of foot dragging it did on the amendment to the Payment Clearing and Settlement Act, got us into a full scale trade crisis with the United States on softwood lumber.
Now the U.S. is playing hardball. We went into the game at the end of the SLA unprepared hoping that the negotiators and the U.S. forest industry and the lobby group that represents it would somehow do us a favour. Well it does not work that way. They do not do anyone any favours. They play for keeps and they play hardball. Those who are not prepared, as Canada was not, are going to get beat up.
In relation to Bill S-40, this is the sort of the thing that was placing our clearing houses at a disadvantage to our competitive partners in the G-7. The other G-7 partners, as the Secretary of State for International Financial Institutions will know, were way ahead of us on this one. Canada was lagging behind.
I am sure the hon. member knows how important this amendment is. Not only should we get it in now but we should have had it in long before now to allow our clearing houses to be more competitive. In particular, the one in Montreal has been really pushing this so it can expand its business. Other similar businesses and clearing houses in Canada could attract foreign business and use the services of the clearing houses with the confidence that the agreements are not going to be held up through some court order due to a bankruptcy from some of their members.
It is important to be on top of things like this and the government simply has not been on top of it. The hon. member, being a former chief economist and a good one at that, has to know how important it was to get this amendment in. However there has been more foot dragging which should not have happened.
We can talk about the slow pace of the Liberal government on a number of other issues and draw parallels to this bill. For example, the part of British Columbia where I live has a huge natural disaster called the pine beetle infestation. The government has known about this situation.
The Pacific forest centre in Victoria that deals with the science of forestry and forest management has known about this and the federal government has known about it for a number of years now. A few short months ago I asked the government if it would come to the assistance of the British Columbia government in fighting the pine beetle infestation.
The answer was that the federal government had not been asked yet. My question had to be, is there anything wrong with being a little proactive on it? Why not call B.C. and ask if the federal government could be of help? There is an obligation on behalf of the federal government to return some of the billions of federal tax dollars that have come out of the British Columbia forest industry.
Just a few short weeks after that day, the British Columbia government did make a formal proposal to the governing Liberals. It presented its five or six year plan to deal with the pine beetle infestation and asked for the federal government's help.
The forest industry is in crisis out there. Tens of thousands of B.C. workers have lost their jobs not only in the forest industry but in related industries. The future of that particular part of the province because of the pine beetle infestation looks dismal.
The fact is the federal government has not responded to the request for help by the Government of British Columbia. That is a shame considering that the B.C. forest industry has sent billions of dollars, perhaps tens of billions of dollars to Ottawa over the last number of decades. The five year plan calls for a total expenditure of about $500 million. That is a very small percentage of what B.C. has sent here. Also it would be a cost sharing plan so perhaps the federal government's share would be down to about $250 million.
The federal government has simply ignored the west once again in the face of a very serious crisis. It has ignored the western forest industry, a prime area of softwood lumber harvest and production in Canada. It has ignored it and allowed the softwood lumber crisis to develop. It has ignored the province of British Columbia, and in particular my riding where literally hundreds of thousands of acres are infested by the pine beetle. It has ignored that.
The government seems to ignore and drag its feet on the real important issues that face various parts of our country, as it has been ignoring this amendment to the Payment Clearing and Settlement Act. Now it is acting on it. It is late but at least the government is acting on it.
While the Liberals tend to delay making decisions on major issues that affect the country, they seem to have no problem when it comes to making a perk-like purchase for the Prime Minister and cabinet, such as a couple of Challenger jets to fly around the country. It took them 10 days to do that. My colleague from Elk Island has been keeping track of the government on this issue.
It appears that one day in the parliamentary restaurant the Prime Minister said to some of his colleagues “Listen folks, I may only be around here for another year or year and a half. It would sure be nice to have some new planes to fly around in because I have a lot of countries to see and a lot of people to meet. I want to ensure that my final year or year and a half is filled with a very high degree of comfort and a lot of travel because that is always fun”. It took them 10 days to spend $101 million on Challenger jets.
This has not come up yet but I am sure it will. Under questioning the Minister of Public Works and Government Services said that the planes were ordered from Bombardier because it was the only one that could supply Challenger jets. The government wanted Challenger jets because it already had four Challenger jets and it wanted to stay with the same type of aircraft and therefore Bombardier got the order.
That is the wrong way for a government to order its goods and services. There is a written process. It appears the order was deliberately put through national defence so that the government could avoid going to public tender to allow other companies that build that type of aircraft to bid on it.
Under the procurement guidelines any contract for goods and services over $37,000 must be publicly listed through the MERX system and is open to bid by suppliers in Canada, the United States and Mexico. That is part of the NAFTA agreement. This is the way the rules were set up under NAFTA so that suppliers in the U.S. and Mexico as well as in Canada could bid on these contracts. This was the reason the government established what is called the MERX system, which is being run by one of the major banks, that posts all the requirements for the government on the service so that suppliers can make bids.
When the government is looking to purchase airplanes, it is very deceiving of it to put the tender out in such a way that it names the manufacturer and the brand of aircraft it wants. Under the procurement rules the government should have stated that it needs a passenger jet which must have a certain number of seats, a flight range of x number of miles, a fuel economy of a certain standard and it must be fitted to special requirements regarding avionics and things like that.
That is the way the government should have put that tender into the MERX system which would allow companies that are capable of supplying an aircraft like that to bid on it. It is a public tender. That is what the procurement system in the government is all about. The MERX system is there so that the government can easily put its requirements in front of anyone who chooses to bid on a contract.
There are companies in the United States, such as Gulfstream, Citation, Beachcraft and Lear that build corporate jets. Had the government put the requirements of a type of plane out, it could have had four or five other tenders including Bombardier's. If all the other tenders were simply not suitable, the government could have held them up and said “These are the tenders we received and here is why we chose Bombardier”. No one would question that, but the government did not do it.
The government may have another problem with the purchase. It may be in direct violation of the NAFTA rules by not allowing American and Mexican companies to bid on the planes. I would advise the Minister of Public Works and Government Services to be prepared for a NAFTA challenge from a company that could have provided that same plane.
Everything the government needs has to go out to public tender unless for example it is required for a state of emergency or if it is an issue of national security. I suspect that the government put the purchase of these aircraft through national defence hoping that people would think it must have been a security issue and would not worry about it. The people watching the procurement system the government is bound to operate under are a lot smarter than that. I suggest that the government be ready for a NAFTA challenge on the purchase of the aircraft.
I could talk about Kyoto. However the House has heard enough about how the government has been mismanaging that issue so I will instead try to sum up Bill S-40. It is important to point out that Bill S-40 would make technical changes to correct a significant problem faced by certain Canadian clearing houses. Under existing solvency laws derivative contracts are not exempt by court ordered stays. If member corporations go into bankruptcy any collateral deposited at clearing houses is frozen along with other assets. Clearing houses have to line up behind all the other creditors. Our counterparts in the G-7 foresaw this problem years ago and took steps to correct it by introducing legislation. However the Liberal government has not. This has put Canada way behind.
Bill S-40 would bring Canadian law into line with our G-7 counterparts by exempting such collateral deposits from the law relating to bankruptcy or insolvency procedures. This would allow clearing houses to realize collateral deposited by its members without the risk of a court imposed stay. Under existing law Canadian clearing houses operate under a competitive disadvantage compared to derivative clearing houses in the United States and Europe. This is exactly what I was talking about.
Our friends in the G-7 have been way ahead of us on the issue. As a result they have been attracting businesses from outside their countries that have confidence in dealing with them because the flaw in our laws governing the issue does not affect them. The passage of Bill S-40 would put us on a level playing field with our friends in the G-7.
I will make an observation for those who are watching. During a trading day a member of a clearing house will be both a buyer and seller of listed stocks. That is the way it works. Instead of each member making separate settlements with other members a designated central clearing system or clearing house handles the daily settlement process between members. The Montreal stock exchange has spearheaded the effort to change the law but the Liberal government has not listened to it.
Bill S-40 must go through. We in the Canadian Alliance Party will support it. It is about time the bill came forward.
Before I close I am sure the House will allow me to say hello to my father who is watching. He is in Sidney and has been very ill. I told him I would try to brighten his day by saying hello to him. We are hoping all the treatment he is getting will bring his strength back, and I will see him in a couple of weeks.