Debates of Nov. 3rd, 2010

The House resumed from November 2 consideration of the motion that Bill C-32, An Act to amend the Copyright Act, be read the second time and referred to a committee.

Copyright Modernization Act

[Pablo Rodriguez, Liberal, Honoré-Mercier, QC]

Mr. Speaker, I am very pleased to have this opportunity to speak to Bill C-32, An Act to amend the Copyright Act.

I want to begin by saying that, as everyone knows, we have been waiting for this bill for a long time. We need this bill, we want it and we have been waiting for it. The government was elected two years ago, and we are just now beginning to debate this bill at second reading.

Nevertheless, as they say, “better late than never”. Now is our chance to debate it, and we must do so. Over the past few years, the Liberal Party and the Conservative Party have tried to introduce bills. Once again, this one comes from the Conservative government. It was a long time coming, but it is here now, and we will debate it.

We need this debate because we have to modernize the Copyright Act. I am sure everyone will agree that is necessary. This legislation must be modernized and adapted to the reality of the century we live in, the 21st century.

We need legislation that takes into account the technological changes that have already happened and will continue to happen at a dizzying pace. We need only consider everything that has happened over the past 10 years and all of the new products that have come to market. For example, consider the role of the iPod, the iPad and all of the other new devices that did not exist 10 or 15 years ago. Today, everyone uses these devices to listen to music and watch movies. We have to take into account the extraordinary technological changes in terms of platforms, production and dissemination.

That is why we need legislation that reflects these changes. We also need legislation that protects the rights of creators and artists. That has become even more important in the digital age now that everything happens so quickly.

It is just as clear that we need legislation that sends an unmistakable message to the international community, legislation that shows Canada takes copyright seriously and promotes and protects those rights. That is the most important part of this.

Unfortunately, we are dragging our feet. We are lagging behind. In some ways, we are looked down on by the international community. All too often, we are being singled out as a bad example. That needs to change.

The law needs to be modernized for all of the reasons I listed, but also to allow us to ratify certain international treaties that are of significant importance to us and our allies.

In preparation for the debates surrounding the passing of this bill, I decided to travel across Canada to meet and talk with those directly or indirectly affected by this important issue. Other members did the same. I am thinking about my colleagues from the Standing Committee on Canadian Heritage and the Standing Committee on Industry, Science and Technology as well as my colleague and our industry critic, the member for Westmount—Ville-Marie, who has done incredible work on this issue.

As I was saying, I travelled from one end of Canada to the other in order to meet with the people concerned by this significant bill. I met people in Halifax, Montreal, Winnipeg, Toronto, Regina, all over, in fact. I could list them all, but it would take too long because there are more than 100 groups.

I will simply say that I met with people from the film, television, production and music industries. These are artists, musicians, Internet service providers and others. Over the past several months, I have had extremely productive and worthwhile discussions with people from all of the provinces, except Alberta, where I will be next week to discuss this very important bill.

We need to talk in a fair and balanced manner about this copyright modernization bill. We have to find a delicate balance between the important needs of creators and the needs of consumers, which is not easy. Unfortunately, numerous critics are already speaking out against this bill. They come from everywhere—Quebec, Ontario, British Columbia.

Creators and copyright owners are afraid that this bill will undermine their current rights. That is one fundamental aspect that we need to examine closely. While the bill is a step in the right direction in some cases, is there not a chance that it will undermine or eliminate some existing, protected rights in other cases?

That is an absolutely fundamental issue that must be addressed, and we will take the time to do so. And just because the government took so long to introduce this bill, that does not mean we will examine it hastily and without taking a step back. That would be irresponsible on our part. On the contrary, we will take the time to consult all the stakeholders involved in order to come up with a bill that is fair and balanced and that really protects copyright owners. Thus, we will meet with several people with whom members of the Liberal caucus have already met, and others with whom we have not yet had the opportunity to meet. This could all be done in committee.

Copyright is a vast, complex and rapidly changing subject. On this side of the House, we understand that it has a real impact on artists, writers, poets, filmmakers and musicians, as well as on video game makers, photographers, merchants, producers, Internet service providers and of course consumers. Copyright has an impact on many people and industries, and we must take that into account. We also need to make sure we have long-term legislation that will not need to be replaced tomorrow, since it is so hard to reach a consensus. Furthermore, the proposed legislation must be as neutral as possible in terms of technology.

Clearly, finding common ground when so many different parties are involved will demand some compromises, but they must be fair and balanced. In order to achieve this, we need to have frank, open discussions from beginning to end.

At this time, I would like to mention some of the issues that were raised during my cross-country visits and some points that were raised during meetings here in Ottawa with stakeholders from the cultural community and from industry.

I want to raise some of the important concerns and questions that we should be debating, especially with regard to digital locks. For example, should these famous digital locks prevail over all other rights to make copies? That is the question because Bill C-32 includes new rights that authorize Canadians to make copies for personal reasons, including format shifting, time shifting and back-ups. Nonetheless, the new provisions in the bill having to do with digital locks take precedence over these rights. In other words, to be clear, under the new legislation, someone who buys a CD on which a company has installed a digital lock cannot get around this lock in order to transfer the content of the CD to another format without breaking the law.

I know that is a bit technical, but it is a fundamental aspect of the bill and we must debate it. It is also extremely contentious and was highly contested when the Conservatives introduced their other bill, Bill C-61. We have already heard many protests and discussions on this aspect of the bill. It is clear that this point needs to undergo further review, and we believe that amendments will need to be made in committee.

The second point has to do with education. Bill C-32 contains new exemptions that allow teachers and teaching institutions to make copies of works for educational purposes without copyright infringement. This blanket exemption from fair dealing rules is facing growing opposition from the various cultural communities.

Given the comprehensive nature of fair dealing, writers and publishers, for example, believe that this new exemption will permit teachers and educational institutions to make copies of their works at will and then give them to their students. Will that happen? Is that really what will happen? We will have to see and study the bill, but I can say that many people believe that teachers and educational institutions should be required to pay royalties to creators for the use of their works. I find this to be a fair and consistent position.

Let us go a little farther. How should this exemption be applied? Should a teacher be able to claim that a copy of an unedited version of a movie was made and shown to a class for educational purposes and not pay a royalty? We have to ask the question. Is that the case?

We realize that it is important to modernize the act so that teachers can apply it in the digital age. But we also believe that authors and creators are entitled to be compensated for the use of their works and for what they have created. That is clear. We will want to discuss this in committee as well.

Similarly, we will have to clearly define what constitutes “fair” dealing, as it is used in the bill. I ask the question and we will ask it in committee. What are the limits and the parameters that apply to the term “fair”? We must answer this question.

The third point has to do with mashups, or user-generated content. Clause 22 of the bill provides for an exception for mashups and user-generated content.

What is a mashup? A mashup is, for example, a personal video produced by combining excerpts from films and sound recordings and then posted on YouTube or a similar site. That happens.

In our opinion, the wording of this clause is far too broad. With this rule, someone could post the full version of a movie on YouTube. All they would have to do is add an excerpt at the beginning or the end and call the video a mashup. That seems a bit too broad. We want to define this and debate it. This point will also have to be carefully examined in committee.

The fourth point has to do with the statutory damages in the bill. Clause 38.1 of the bill provides for damages of between $100 and $5,000 for all copyright infringements for non-commercial purposes. Members will understand that we have some concerns here. It seems logical to us that damages related to copyright infringement should be in proportion to the seriousness of the infringement. That is also something that will have to be analyzed and studied in committee.

The bill also leaves a few things out, such as the public display of art, for example. Currently, if an artist displays a piece of art in a public space for reasons other than to sell it, they receive compensation. However, if the work was created before 1988, the artist does not receive compensation; they do not receive a penny. We need to use this opportunity to fix this situation, which we find to be discriminatory.

Another thing that has been forgotten is the resale of artwork, or resale right. Across Europe, artists are compensated when their works are sold and resold. Everyone knows that original art increases in value over time. Artists become more and more well known and the value of their works increases. Artists feel, and rightly so, that part of this increase in worth should come to them upon resale. It already exists in Europe.

When this is studied in committee, we would like to look at what has happened in Europe to see how Canadian artists could be more fairly and equitably compensated for their work. We believe that our artists' efforts are no less valuable that those of their European counterparts.

There are many other points that I would like to raise, but I do not have the time. However, I will definitely raise them in committee. We just need to remember that this bill has some good points but also some flaws and, in certain cases, leaves things out altogether. We will work hard to improve it.

[Jim Maloway, NDP, Elmwood—Transcona, MB]

Mr. Speaker, the member seems to be very knowledgeable about the subject matter of the bill.

The government has made the claim that it must follow the American approach to the WIPO Internet treaties and must support the digital lock measures in the bill. However, 88 countries have now ratified the WIPO treaties and only half of those 88 countries support the American approach.

Does the member believe that perhaps the current government is being overly influenced by the American movie industry, business lobbyists or perhaps even American politicians to get their version of what should be a proper agreement in force in Canada with the view to having a sort of common competitive market in North America?

[Pablo Rodriguez, Liberal, Honoré-Mercier, QC]

Mr. Speaker, I thank my hon. colleague for his question. First of all, I would say that generally speaking, the government is always a little too easily influenced by what happens in the United States, especially during the previous administration, the Bush administration.

The issue of digital locks is interesting, because there are various options and various ways to respect our treaties. We think it is acceptable, however, but not in an absolute way. There must be some kind of reasoning behind it, a certain limit. For instance, when people buy a certain product, there must be a way for them to make a copy for their personal use without violating the copyright.

[Alan Tonks, Liberal, York South—Weston, ON]

Mr. Speaker, it appears that there is a conflict in terms of intellectual property that would be applicable to educators, the teaching profession and those involved in long distance learning, and so on. On the other hand, the copyright law is trying to establish a broader umbrella to protect those who are the initiators of creative musical and artistic property. Does the member think the committee can come to a resolution?

I must say that I lean on the side of those from the educating field who are saying that in terms of intellectual property and the ability to use in the classroom that which has been created to the benefit of students is an extremely important objective and concern that has been raised. Would the member please address the question of whether the committee in fact can deal with the elements of that issue?

[Pablo Rodriguez, Liberal, Honoré-Mercier, QC]

Mr. Speaker, I thank my hon. colleague for his important question.

The bill adds another exemption for the education sector. I understand the member's reasoning and I know how much he cares about the education sector, and so do I. However, just as a teacher would not agree to work for free, an author should not have to work for free, or in other words, supply his or her work without getting paid.

That is, in fact, the point of this bill. We need to strike a balance between, on the one hand, the rights of creators, authors and publishers and, on the other hand, the rights of consumers. In this case, we could also add the rights of students and teachers.

We do not believe that this bill is balanced. The government tells us it is balanced, but I do not believe that is the case, because certain points from the consultations were not included. We can do much better, and that is exactly what we hope to do in committee. We want to come up with a bill that is fair to both creators and consumers.

[Glenn Thibeault, NDP, Sudbury, ON]

Mr. Speaker, New Democrats support collective licensing and fair access to education materials. We have three fantastic post-secondary institutions in my great riding of Sudbury. We have Cambrian College, Collège Boréal and Laurentian University, which, I might add, has a new chancellor, Aline Chrétien who I congratulate on being the new chancellor. One of the things that all three post-secondary institutions have is fantastic distant education programs.

What is concerning about this bill is that we are hearing that under the bill digital lessons for long distance learning must be destroyed within 30 days of a course. We feel that this would treat students in digital learning environments as second-class citizens and would undermine the potential of new learning opportunities. If we look at the vastness of northern Ontario, we need to ensure that all students who participate in digital learning have that opportunity.

I would like to hear the hon. member's comments on what he thinks about that piece of this legislation.

[Pablo Rodriguez, Liberal, Honoré-Mercier, QC]

Mr. Speaker, I thank my colleague for the question.

This, too, is an important issue because it deals with education, particularly the education exemption. It is extremely important precisely because we have to bear in mind the challenges faced in the regions and the ability to provide distance education. It is an extremely important aspect.

I want to reiterate the importance of striking a balance. We have to be able to make it easier for students to take these courses and for professors to teach them. But in so doing, must we accept that authors and creators will not be compensated?

My colleague refers to the fact that course materials must be destroyed. They must be destroyed because no royalty is paid on them because of an exemption. In fact, because the materials are exempt, they do not infringe on the copyright; however, because no royalty is paid, they must be destroyed. That creates a challenge: the materials have to be recreated. It is one of the rather odd and strange aspects of this bill. The options are as follows: either royalties are paid or professors are not required to destroy the materials. We must strike a balance that currently eludes us.

[Jim Maloway, NDP, Elmwood—Transcona, MB]

Mr. Speaker, I can see this bill being popular with photographers because it includes giving them the same rights as other creators. That is certainly a first.

The carve out for network locks on cell phones is bound to be popular with people. Canadians will have the right to unlock their phones if they want to switch carriers as long as they abide by their provider's contract terms.

However, I think what people will not like is what was followed up in the last question by the member for Sudbury, which is that teachers and students will need to destroy digital lessons 30 days after their courses conclude. That is absolutely ridiculous and I think there will be a lot of push back by citizens of Canada on that very point.

[Pablo Rodriguez, Liberal, Honoré-Mercier, QC]

Mr. Speaker, once again, I thank my colleague, who raised the issue of education with good reason. That is one of the fundamental elements of Bill C-32. I would say that there is no definite answer because we do not yet know the bill's scope with respect to education. What does “fair” mean? As I said in my speech, we need to figure out what the word “fair” means, what its parameters are and what it covers. What is included in the exemption for education and what is not?

We have to find a balance. We want it to be easy for students to access and easy for teachers to prepare, but we also want our creators to get paid. As I said earlier, would teachers—both of my parents were teachers—agree to work without being paid? No, because teachers have to earn a living. So do authors and publishers. Once again, we have to find a balance here, a balance that the bill does not provide. We hope to find that balance in committee.

[Glenn Thibeault, NDP, Sudbury, ON]

Mr. Speaker, I am pleased to rise today to speak to Bill C-32, An Act to amend the Copyright Act.

I, for one, am a strong advocate of reforming Canada's copyright regulations in order to modernize them and ultimately align them with the realities of the 21st century. Yet, despite my belief that Canada is in dire need of a modernized, intellectual property rights regime, the bill fails to realistically address what is needed.

The government has stated that its aim in updating the Copyright Act is not to punish individual users but rather to focus its deterrence and enforcement efforts on distributors and large websites that illegally host copyrighted content.

The first thing we need to know about creating balanced copyright is that we need to engage all the players. Bill C-61, the government's initial attempt at reforming copyright law in Canada was legislation that was so badly constructed it had to be dropped as soon as it was announced. The Conservatives were forced back to the drawing board, so here we are, after another two years of waiting. Unfortunately, they still have not got the message. The lack of thorough consultation has left major questions about the impacts of the bill.

Specifically, whether the bill will achieve the intended objectives is a subject of debate among the various stakeholders affected by copyright reform, including authors, artists, musicians, record labels, book publishers, collective societies, libraries, museums, school associations, software developers, retailers and consumers.

The lack of thorough consultation with independent stakeholders, such as those mentioned above, is troubling, considering the same problem plagued the bill's predecessor. It all seems to me that there needs to be a consensus-building process which takes into account the concerns of all stakeholders in order to wholly legitimatize the regulatory framework being proposed.

On a different note, it is my opinion that the scope of the bill strongly misses the mark through its heightened focus on individual consumers as opposed to going after the more heinous commercial pirates who profit monetarily off the intellectual property of others.

There are two key problems with the Conservative approach to copyright. The first problem is that the rights that are offered in terms of the fair dealing, mashup and parity exemptions can be overridden by the heavy, legal protections being put in place by digital locks.

Under Bill C-32, it is illegal to break a digital lock, even if that lock prevents us from accessing material that we would otherwise be legally entitled to access. In fact, it treats breaking of digital locks for personal use the same as if the lock were being broken for commercial counterfeit.

We oppose the criminalization of consumers, which this aspect of Bill C-32 represents. The government needs to re-evaluate its stance on copyright reform in order to properly address the current realities of the 21st century. Criminalizing hundreds of thousands of individual consumers for simply digitizing their music for personal consumption fails in this regard. We need to focus on commercial piracy, not individual consumption.

I happen to have a seven-year-old daughter who is a huge Hannah Montana and Jonas Brothers fan. We must buy as many Jonas Brothers and Hannah Montana movies and music as we possibly can in my household. I can rhyme off Hannah Montana songs. I am sure many other MPs who have young children could do the same thing. I will not sing one for the House. I do not want to embarrass myself that badly because I am not a great singer. My daughter has a CD collection but we cannot find CD players, so we need to put those on to our MP3 player. Under the bill, my seven-year-old daughter is now breaking the law.

We need to ensure that we are not criminalizing the consumers. The approach the Conservative government is taking goes far beyond the norms adopted by many of the World Intellectual Property Organization countries, or WIPO. In terms of copyright reform, we have been consistent. We support the fundamental principle of remunerating creators for their content. We have consistently called on the government to bring the WIPO treaty into the House to be ratified. If the government had taken this advice, it would have alleviated a great deal of international pressure and given us the space to create a truly made in Canada approach to digital copyright issues.

The Conservatives had five years to address issues in WIPO, and stalled on the WIPO ratification. Instead, their first run at copyright was constructed entirely behind closed doors and read like a wish list for the U.S. corporate lobby.

The second serious problem with the bill is that a number of previous revenue streams for artist organizations appear to be undermined through exemptions and changes. The most notable of these is the government's decision not to extend the private copying levy on CDs to music-playing devices. This fails to address the reality that more and more consumers are choosing to purchase intellectual property through non-traditional means such as digital music files. The levy worked on cassettes. It worked on writable CDs. However, if it is not updated for MP3 players, the levy will die.

The New Democrats put forward Bill C-499 to update the levy on devices marketed specifically as music players and recorders. The Conservatives have misrepresented this levy. They have used it as a straw man for their mailings attacks in our ridings. They have made up figures for the cost of the levy and have denounced copyright licensing as a killer tax.

Let us see what the national media have to say about this attack on the remuneration of artists. The Edmonton Journal said that the NDP offered a perfectly reasonable compromise, but that the industry minister misrepresented its contents on a bill that is thoughtful and upholds the basic Canadian values of straight dealing.

The National Post was even blunter, saying:

...the government's nonsensical, “Boo! Hiss! No new taxes!” response … is just dumb...

This is the National Post we are talking about, definitely not a progressive bastion that routinely calls for more expansive powers in taxation and regulation. Even this newspaper has shown a willingness to confront the real issues. Why has the government not come to its senses on this matter?

The widespread use of iPods, iPads, and MP3 players, as well as the emergence of products like Kindle, serves as an excellent example of the changing nature of consumption in a technology-driven environment. We must address this gap to ensure that Canada's intellectual property regime is appropriate for the ever-changing technological landscape.

The most obvious criticism that can be made of Bill C-32 is that it fails to address the realities presented to us by 21st-century technology. The fact is that no amount of legislation or legal action will force consumers to return to the business models of the 1990s. The emergence of the digital economy has changed the dynamics of intellectual property. The digital economy is not going away. We need to recognize this. We are attempting to rectify 21st-century problems with 20th-century solutions. Let us be clear. An intellectual property regime designed for the dynamics of the 1990s is not the best means for dealing with the issues of commercial piracy, which is really where our energies need to be focused.

Over the past 20-odd years, technological innovation has led to massive and abrupt changes in the way Canadians live their daily lives. Whether it is the way we get the news, or the way we do our banking, or pay our bills, technology has dramatically altered our consumption habits. Instituting a regulatory regime that fails to observe the significance of the transition to an information technology and e-commerce paradigm will only lead to further failure in distinguishing between commercial piracy and legitimate consumer uses.

Nowhere is this folly more clear than in the United States, with its digital millennium copyright act. The U.S. entertainment industry has used legislation in courts to lock down content and criminalize consumers. The result has been a scorched earth policy waged by the recording industry of America against its own consumers. After more than 35,000 lawsuits against kids, single moms, and even dead people, the digital genie has not been put back in the bottle. The market has simply moved on.

Does this mean that digital technology has trumped the traditional right of creators to be compensated? Certainly not. New markets and new models are emerging. The difficulty is to find the best way to update copyright to meet these challenges. We have a unique opportunity to develop legislation that looks forward rather than back. That is why it was unfortunate to hear the Minister of Canadian Heritage denounce citizens' legitimate questions about the bill as digital extremism.

If copyright reform is to succeed, the government must move beyond the rhetoric of a self-defeating culture war. The choice is really about whether we support regressive or progressive copyright. Regressive copyright tries to limit, control, or punish users of creative works. Regressive copyright is self-defeating, because the public will ultimately find ways to access these works.

Progressive copyright, on the other hand, is based on two clear principles: remuneration and access. The digital age has shown us that consumers of artistic works want to be able to access these works. The Internet is not a threat; it is an amazing distribution format. As legislators, artists, and technological innovators, we need to find the monetizing streams in this new distributing culture.

This balanced approach represents the mainstream of Canadian copyright opinion. I refer the House to the judgment in the case of Théberge v. Gallerie d'Art du Petit Champlain inc. The Supreme Court stated that copyright's purpose was to strike a balance between promoting the public interest in the encouragement and dissemination of works of art and intellect, and obtaining a just reward for the creator.

There is a public interest in the access and dissemination of works and a public interest in obtaining a just reward for the creator.

The New Democratic Party's position on copyright is based on the principles of compensation and access. Artists need to be paid for their work, and consumers should be able to access these works with a minimum of restrictions.

The New Democrat position is that we support collective licensing and fair access to educational materials. For example, under the bill, digital lessons for long-distance learning must be destroyed within 30 days of the completion of a course. This would treat students in digital learning environments as second-class citizens and would undermine new learning opportunities.

Specifically, under Bill C-32, students who take long-distance courses would be forced to destroy their class notes after 30 days, and teachers would be forced to destroy their on-line class plans after every semester. This is the digital equivalent of telling universities to burn their textbooks at the end of every session.

What kind of government would force students engaged in digital learning to burn their class notes? No writer gets compensated and no student benefits. This provision shows just how badly out of whack the government is when it comes to understanding the importance of digital education.

In my great riding of Sudbury, we have three fantastic post-secondary institutions: Laurentian University, Cambrian College, and Collège Boréal. All three of these post-secondary institutions offer distance education and distance learning. We want to ensure that this continues, because it is a great way for students in the vastness of northern Ontario to get the education they need.

All this is particularly troubling for me as an MP from northern Ontario. Our country contains many remote areas, and we should be encouraging distance and online education, since course offerings of this type are often the only way for Canada's rural residents to gain access to quality higher education.

We should not be discouraging these types of educational regimes with unduly burdensome regulations prescribing how long a digital lesson can be held.

It is therefore my hope that all parties will be able to reconcile their differences so that we can provide Canadian artists, performers, writers, and the cultural community as a whole with the intellectual property rights protection they deserve, while ensuring that the new regulatory regime respects the changing nature of individual consumption in the 21st century.

[The Acting Speaker, Conservative, Barry Devolin]

The hon. member for Sudbury will have five minutes remaining when the House returns to this matter.

It being 5:52 p.m. the House will now proceed to the consideration of private members' business as listed on today's order paper.

Northwest Territories Act

[Dennis Bevington, NDP, Western Arctic, NT]

moved that Bill C-530, An Act to amend the Northwest Territories Act (borrowing limits), be read the second time and referred to a committee.

Mr. Speaker, I am pleased to have an opportunity to stand here today. It is the first time I have had the opportunity to put forward a private member's bill for debate. It is certainly something that I am sure every MP looks forward to in his career here in Parliament.

Members of this House have heard me say many times how the people of the Northwest Territories want to be masters in their own land. I think this is something people in every province aspire to.

I have spoken about how the NWT is a mature jurisdiction and should not be controlled by Ottawa. Members have also heard me mention that the people of the Northwest Territories know that their requirement for infrastructure is one of the keys to building a better north, a more prosperous north, a north that can better share its wealth with the rest of Canada.

Bill C-530 is a small step towards achieving these aspirations. As many members already know, the Northwest Territories is a creation of this House, much like Canada was a creation of the British House of Commons.

Currently, under the Northwest Territories Act, before the NWT can borrow any money it must first ask permission of the federal cabinet. By practice, the cabinet has set a limit on the amount the NWT may borrow. Currently the limit is $500 million. This is a recent increase from the previous limit of $300 million, an increase that took years of lobbying, persuading, and hard work to achieve.

Unfortunately, when the lobbying started all those years ago, $500 million was sufficient. Today it barely meets the needs of the NWT and will not be adequate for the future.

However, even though it was nowhere near sufficient, because the funds were so badly needed when the limit was increased in 2007, the territorial government said in a press release:

This is a significant step in providing the GNWT with flexibility to make strategic investments in infrastructure to improve the lives of Northerners.

It was not enough. What my bill does is provide the Northwest Territories with a line of credit they can use to finance the building of vital infrastructure, ensuring that our territory progresses in a good fashion.

My bill provides a formula for borrowing based on gross revenues applied every year. The figure we have set is 70% of gross revenues. If my bill passes, the Government of the Northwest Territories will be able to borrow up to 70% of its gross revenues for that year, in totality. The debt is in totality, of course. That would be the total debt that it is allowed to hold: 70% of the gross revenues of any particular year.

What is the government going to do with this borrowing power? Canada has many aspirations for the Northwest Territories and its development. We have heard the Minister of the Environment speak eloquently many times about the Mackenzie Valley pipeline.

Part of what we need to do to develop the Mackenzie Valley pipeline is develop a Mackenzie highway. This will cut the cost of the pipeline, and it will be an essential component of our vision of the Northwest Territories. Connecting all the communities of the Mackenzie Valley with an all-weather road would reduce living costs for residents, open up the rest of the Mackenzie Valley, and provide the opportunity for planned and careful development of our resources.

This is essential to us, but it is expensive. The Taltson hydro project is another example. We are moving ahead quickly to provide hydroelectric power to the diamond mines, which provide large amounts of revenue to the federal government as well as jobs and business opportunities in the Northwest Territories. However, the costs are very high because they use diesel fuel for all their power needs.

We propose that the Taltson hydro project go through an environmental assessment, but its cost is in excess of $500 million. Without better fiscal capacity within the Government of the Northwest Territories, it is going to be difficult for the people of the Northwest Territories to own this resource.

So once again we see the need for the Government of the Northwest Territories to have flexibility in fiscal capacity in order to accomplish projects that actually are self-financing, such as the Taltson project. Even if a project is self-financing and is owned by the Government of the Northwest Territories, it goes against its borrowing limit. So we are shackled right now by this borrowing limit that is in place.

Another example is the road to Tuktoyaktuk, which the previous Minister of Indian Affairs and Northern Development thought was a great project. He put money into the feasibility work that was going on, which got the project up to a point where it could go to an environmental assessment. It is a $100 million investment to tie in Tuktoyaktuk with Inuvik. This would give us year-round access to the port of Tuktoyaktuk on the Arctic Ocean, something that will assist in every fashion with the development of the north.

Where is the money going to come from for this? How can the Government of the Northwest Territories make arrangements with the federal government on shared projects or work together with other interests to create these projects without available fiscal capacity when it needs it?

There are many more examples, such as the need to upgrade the Liard Highway, at about $50 million, in order to bring tourists into Nahanni National Park. This government supported its expansion two years ago, but we need to improve access into the area in order to make that world heritage site available to Canadians and create a tourist opportunity greater than we have today.

Through these vital infrastructure projects and many others, the Northwest Territories will be able to begin developing its full potential.

Infrastructure is important, but we also need to look at our communities. Many communities need infrastructure in order to provide a comparable standard of living with other communities across this great nation. We want that for our communities. We need to invest in our communities to make that possible.

These are some of the fundamental reasons we want to see a change in the borrowing limit. We need the money. We need the opportunity and fiscal capacity for our government to be able to do this.

Why should we trust this government?

The negotiators for the Government of the Northwest Territories and Canada have recommended the acceptance of a draft agreement in principle that would transfer administration and control of lands and resources from Canada to the Northwest Territories. We call that “devolution”. There is much work to be done on this yet. There are many parties in the Northwest Territories that have to come together on this agreement, no doubt. However, this is the closest we have come in a very long time to getting an agreement.

Once devolution is complete, the people of the Northwest Territories will become masters in their homeland to a greater extent than before, and to an extent that is almost similar to that of the provinces. But to reap the benefits of devolution, we need to invest in our territory. This is not going to happen without that investment. My bill provides a vital tool to achieve that.

The first line of the AIP says:

WHEREAS, to enhance the ability of the Government of the Northwest Territories to serve the interests of its constituents

That is my reason as well for bringing forward this bill. It is not in the interest of the people of the Northwest Territories to have to have its government come forward on regular intervals to beg Ottawa for an increase in the amount it has to borrow. This is not responsible government. This is not the kind of relationship that we want to have with Ottawa. This is not the way that Canadians should be treated in this land today.

On March 26 of this year, Moody's Investors Service gave the Northwest Territories an Aa1 rating. This rating is the second highest, and in terms of credit risk, it places the NWT in line with most of the provinces, and in fact higher than many of the provinces. This is the second year in a row that Moody's has issued the NWT such a high rating.

Moody's rating takes into account recent developments related to the Deh Cho Bridge project. So a project that was somewhat controversial is under this rating. The credit opinion notes that Moody's had already included the Deh Cho Bridge liability in its calculations of the NWT's net direct and indirect debt, reflecting the government's debt-like obligation to make periodic availability payments. As such, formal assumption of the related debt is not expected to alter the NWT's credit profile in a material way.

According to Moody's, the rating reflects:

prudent fiscal policies that have, over the past several years, limited debt accumulation. A well-developed fiscal framework (including a Fiscal Responsibility Policy which guides the NWT's fiscal policies and use of debt) should help to ensure that the debt burden remains low and affordable.

The NWT's fiscal responsibility policy mandates how the NWT may borrow. The policy guides NWT's fiscal policies and use of debt and includes guidelines respecting the type of activities for which debt can be issued, as well as limits on total debt and debt-servicing costs to ensure affordability.

What a remarkable thing for a small territory to do.

Under this policy, affordable debt is considered the level of debt where the corresponding annual debt servicing payments do not exceed 5% of total annual revenues. Infrastructure debt has to be paid off within 20 years. Debt for self-liquidating investments will be repaid from new revenues such as user fees, tolls, or expenditure savings. Debt incurred to finance repayable loan programs will be repaid from cash generated from the loan repayments and corresponding interest revenue.

Our territory is responsible. It is acting in a manner that many other provinces should emulate. Yet, at the same time, we do not have the fiscal capacity to do the things that we need to do for our territory.

I hope that Parliament will join with me in giving the Northwest Territories the tools it needs to build a strong and beautiful part of Canada.

In the words of the Hon. Floyd Roland when he was minister of finance:

This borrowing limit flies in the face of the principle of territorial political autonomy. It reflects an outdated and unreasonable view that we cannot make sound financial decisions on our own.

My bill would bring an end to this outdated and unreasonable situation.

[Mike Wallace, Conservative, Burlington, ON]

Mr. Speaker, I want to thank the hon. member for Western Arctic, who is someone I know well from across the aisle here. I have served with him on a number of parliamentary committees, including Canada-Japan, and he does a fine job there.

However, I am a little confused about the private member's bill that he brought forward. We do not always get a time slot to do so, so I would think one would be particular about what one would bring forward.

I agree with him that development of the north is very important. However, I am not sure if he understands that the Government of Canada is now discussing these particular issues with all three territorial governments, the Yukon, the Northwest Territories and Nunavut. Those discussions are ongoing and include the issue of borrowing levels.

So my question for the mover of this private member's bill is, who in his territorial government has he spoken to about this issue, and has he received agreement from them? Am I missing something that he knows about this issue that we do not know and that the government is not already doing?

[Dennis Bevington, NDP, Western Arctic, NT]

Mr. Speaker, I have had numerous discussions with the Premier of the Northwest Territories and the finance minister of the Northwest Territories on this very subject. In fact, on CBC Radio this morning, the finance minister indicated that he thought what I was going ahead with was a good idea because it would actually provide a legal framework for changing the legislation that guides the borrowing limit. If the government wants to review the borrowing limit, what a good time to do that.

However, what we want out of this is legislation changed so that the borrowing limit truly is put in stone, so that as the government grows larger and we take on more responsibility and our gross revenues increase, we will have an orderly progression in the size of our debt. These are things that are useful.

If the member thinks this Parliament is not here to discuss this type of issue, then I think he is missing the point. We do not want bureaucrats in the backrooms deciding how this is going to happen. This debate in Parliament lays it out clearly for all people to hear.

[Marc Lemay, Bloc, Abitibi—Témiscamingue, QC]

Mr. Speaker, I listened to my colleague and I will have a chance to come back to that during my floor time. However, I am impressed and I would like my colleague to talk about revenues.

I take a close look at all bills that are introduced, especially those relating to Indian affairs and northern development, because I am the Bloc Québécois critic for that portfolio. I was surprised to learn that the Northwest Territories' 2010-11 budget was $1.357 billion. That is more than many countries, yet they have to come to Ottawa for authorization to borrow money.

That does not make sense. Can my colleague explain?

[Dennis Bevington, NDP, Western Arctic, NT]

Mr. Speaker, the Government of the Northwest Territories is a creature of this Parliament. It was formed under the Northwest Territories Act. Within the NWT Act, there is a clear paragraph outlining that any debt that the Government of the Northwest Territories wants to take on has to come through an order in council.

It is the same for the Yukon and for Nunavut. However, with the Northwest Territories, we have right now the opportunity to do much more in terms of developing our economy. We need to invest in the economy. We need to move forward. It is time to take this step away from the colonialism that is evident with the NWT Act and move toward responsible government.

This is part of our evolution. It is a small part. It is a small issue but a very significant one right now and I trust that parliamentarians can get behind this and support it, because it will build a better Canada, a Canada that speaks to the rights of every Canadian, to equality in their legislative assemblies and the rights of responsible government.

[Ted Menzies, Conservative, Parliamentary Secretary to the Minister of Finance]

Mr. Speaker, I thank the House for the opportunity to speak against this disappointing NDP proposal.

Before addressing the specifics of this proposal, let me reiterate our Conservative government's strong support for the Northwest Territories as well as the other territories.

Federal support for the territories is at an all time high. For the territories, this totals almost $3 billion in 2010-11, an increase of a whopping $766 million from the previous Liberal government. This is helping to ensure the territories can provide essential public services, such as health care and education. In the words of the finance minister of the Northwest Territories, Michael Miltenberger, this commitment of long-term growing support has provided “much needed relief”.

Additionally, as part of our overall northern strategy, we have taken numerous other measures. For instance, to help offset the higher cost of living in the north we have increased the northern residents deduction by 10%, representing nearly $10 million in annual tax relief for northern residents. This was a much welcomed move.

Yellowknife Mayor Gord Van Tighem heralded it as “something we've been asking for for a significant period of time. The move will mean more spending into local economies and further reduce the cost of living”.

Inexplicably, the NDP member for Western Arctic voted against it and deeply disappointed his constituents.

Quoting from an editorial in the Yellowknifer, it states:

—a boost for the Northern Residents Tax Deduction...It is not a whole lot is a whole lot more than previous Liberal governments ever gave. Despite enormous budget surpluses and the voice of a...the Liberals never lifted a finger to increase the tax deduction, even after years of steadily rising costs...it would have been best had [the member for Western Arctic] swallowed the pill and voted with the government.

Unfortunately, that pattern of disappointment among northerners has continued with the NDPs last minute support to keep the long gun registry and, here today, with a poorly thought out NDP proposal.

Let me be clear from the outset. Our Conservative government respects territorial governments, especially on matters that directly impact them, like their borrowing limits. We are already actively working and consulting with all three territories about their borrowing limits.

Earlier this year we initiated a review of the operation of the territorial borrowing limits with all three territorial governments. This review will ensure consistency in the accounting or debt instruments between the borrowing limit and the territorial government's own public accounts, as well as ensure territorial governments are clear about their authority and can make appropriate decisions about their borrowing. Moreover, we are focusing on the borrowing limits of all three territories, not just one. We are actively engaging all three territorial governments.

This NDP proposal would effectively toss aside this consultation process and impose a solution that territorial governments would have no involvement in crafting. As such, we fundamentally believe that such an issue should only come from a consultation process and a careful review and government to government dialogue.

There is a long tradition in Canada of federal-territorial matters like this being discussed directly between governments. It would be grossly inappropriate to push this tradition aside, pushing aside territorial governments on matters that directly affect them and dictate to the territories through a private member's bill considered only in the federal Parliament in far away Ottawa.

While the NDP may disagree, we believe it is important to be sensitive and to be engaged directly with the concerns of all three territories. That is why we are working collaboratively with their governments in the current review, and we will continue to do so in the future.

To that end, our government strongly believes the review currently under way and the spirit of our collaborative work with all three territorial governments should be allowed to continue. This is a sign of respect.

On the other hand, to unilaterally impose a new borrowing limit on a territorial government without even consulting it, as this flawed NDP proposal would do, is not a sign of respect. That has been demonstrated in the extremely muted and skeptical reaction we have seen to this proposal since it was first introduced last June.

For instance, I note that Northwest Territories Finance Minister Miltenberger has not endorsed this proposal publicly. Likewise, other regional politicians, like Deh Cho councillor Tom Wilson, have even publicly voiced caution about it. Let me pause here to provide a bit of background.

First, through the Northwest Territories Act, the NWT government is required to have its borrowing approved by the Governor-in-Council. Similar provisions are included in both the Nunavut Act and the Yukon Act. Each territory is free to borrow up to the total borrowing limit established. I should note the federal government does not review individual territorial borrowing decisions within the limit. Such decisions are the territorial government's alone to make.

This existing framework sets fixed borrowing limits for each territory to operate within, providing them with certainty about their authority to borrow and the development of their fiscal plans. I underline once again that this is a framework that applies to all three territories equally.

This unsound NDP proposal we are dealing with today, on the other hand, would give one territory preferential treatment, completely ignoring both Yukon and Nunavut. Our Conservative government understands all territories should be considered equally when speaking of borrowing limits, which the NDP proposal clearly does not.

Another problem with this faulty NDP proposal is that it would tie the borrowing limit of the Northwest Territories to total estimated revenues. However, total estimated or projected revenues can and do change significantly, even from year to year. This is especially true for resource-based territorial economies.

While territorial governments are accustomed to this variation, this troubling NDP proposal would unilaterally expand the consequences of this variation for territorial decision makers and their borrowing. This would not be helpful. What is more, it is not even feasible.

For example, how would this estimated revenue number used to calculate territorial borrowing limits be generated? What information would be used? When is the estimate to be done and by whom? Does the federal government have to review this information? Does it have to agree with it? How will the Auditor General review it to ensure that it is transparent? The NDP proposal provides zero answers to any of those key questions.

For the information of parliamentarians, let me remind them how limits are currently set. A territorial government's own economic and fiscal outlook, chiefly the revenues from the economic activity within each of the territory's borders, forms a primary consideration. This is an objective and a prudent way to establish borrowing limits as it reflects the actual economic reality of the territories themselves.

On the contrary, this misjudged NDP proposal would not make revenues from economic activity within a territory the chief consideration. Rather, it would create an artificially elevated combination of territorial tax revenues along with various federal government supports, both temporary and permanent. This would include territorial formula financing, support for health care and even one-time initiatives.

In summary, the NDP proposal would unilaterally impose an unworkable, uncertain and unequal framework on the territorial government's borrowing authority. This is not in the best interest. The territories would and should be opposed.

What is more, our Conservative government has already undertaken a more responsible and respectful course of action by working with all three territorial governments to review the borrowing limits collaboratively.

[Larry Bagnell, Liberal, Yukon, YT]

Mr. Speaker, I am delighted to rise to speak to the bill. I have a lot more to say now that the Conservatives have spoken to it. What they have said about it is shocking.

There are 13 jurisdictions in Canada, 10 provinces and 3 territories, where people govern themselves in a great nation. They are responsible for their own actions. They are responsible for their own legislation and for governing themselves on a number of matters, except those of national importance. Why would anyone be opposed to a bill that would give more of that authority, more equality to those 13 regions, to treat them as responsible governments?

That is why I fought hard to get the devolution agreement for Yukon through Parliament. Yukoners wanted to have the decision making in their territory, just as people in all provinces do. People in Ontario, Nova Scotia and Newfoundland and Labrador are no more capable of making decisions about their future than are the people in the Northwest Territories or, indeed, Yukon and Nunavut. We should treat these as mature and responsible governments, and not be paternalistic toward them.

The way the system works now, unlike the provinces which go into debt, the territories need to have a limit set by Ottawa, an arbitrary limit set by cabinet, which I believe at the moment for the Northwest Territories is $500 million, and that could change. It depends on the particular cabinet. As the member said, it was a long, protracted process to make that change, which is obviously quite a hindrance on the government of the Northwest Territories.

The bill would take it from an arbitrary decision of cabinet to a specific percentage of their revenue to the amount they want to borrow. It is 70% of their revenues, which is a very modest amount of debt. It is far less, be it a third or a quarter, proportionately, than the deficit of the present federal government, which has the biggest deficit in history, and the huge debt the Conservatives have assisted in accumulating.

Until 10 minutes ago, of all the consultation I did, I had not heard a single complaint about the bill. No one could possibly think of a reason as to why we would not improve the system for the government of the Northwest Territories.

I want to describe a scenario of the Northwest Territories, because the 40,000 or 50,000 people who are watching may not know what it is like there. They may not know some of the conditions that the government of the Northwest Territories has to deal with, has to govern and why the need loan financing. It is a huge area, bigger than Europe with very few taxpayers and a lot less infrastructure than there is in southern Canada. A lot of communities are not accessible by road. The airports need upgrading and there are no harbours. It is very hard to access, to develop and to govern. It is also very expensive to provide health care. The Northwest Territories needs a government with good resources and the capability to at times get loans, which would be much more modest than those of the federal government.

There is great wealth in the Northwest Territories, but people have to access that wealth. Therefore, the territories need money for infrastructure which is very expensive. The few people who live there could not afford that infrastructure. Once they can access that wealth, then they can reduce their dependency on taxpayers in southern Canada, because they would be creating more revenues for themselves and for Canada from the development of those resources.

There are first nations governments there, the Inuvialuit, the Gwich'in, the Sahtu, the Tlicho. They already have land claim agreements or self-government agreements. They have sufficient areas of land, but they need access as well to that land and could certainly be helped in some cases.

Nahanni National Park was a good example of tourism access to a wonderful site. There are some mines in the far north at the Arctic Ocean that could certainly be opened if they had road and port access. In the Northwest Territories, because there are no roads, development has to be done by ice roads. Many mines cannot open because they do not have power. That could be provided through loans by the GNWT to its energy agency.

The Mackenzie Valley highway would increase tourism not only there but in my riding, as well as supporting the development the member talked about. Put on top of this a new change, climate change, which adds a dramatic and huge cost to the Northwest Territories government because the ice roads that used to be used and the ice bridges that they need to do development are melting earlier, are less reliable, so they have to come up with solutions for that. It is causing mines to flood and building foundations to shift, and roads and sewers are all affected as the permafrost melts. There is a huge cost for adaptations.

The reason I was so disappointed in the government's speech was that it asked why now, when there are ongoing discussions on these issues with the GNWT. Perhaps if it were another government we would not go ahead with this. We might wait for that. We will leave it up to the member. I am recommending we go to committee to hear the witnesses at this point. We are in support of it going to committee. We might not go ahead if we thought those things were going to be successful and guaranteed, just because a government member said the Conservatives were dealing with it, but it does not follow what has happened in the past.

The Prime Minister promised he would never tax income trusts. What happened? They were taxed. He promised three armed icebreakers for the north. Where are they? He promised on national TV a port for Iqaluit. Where is it? If we could believe the government's word on these things in the north, then that would be a fine process. Hopefully the Conservatives do come up with something so that this bill is not necessary, but my understanding is that this will be another way for the member to ensure this needed change gets done.

The parliamentary secretary talked about resource revenues dramatically changing so that this would not work. He should perhaps try giving more of those resource revenues to the Government of the Northwest Territories because if it were getting them then it would have a dramatic effect, but it is not getting those resource revenues.

The member said it would treat the three territories differently. If we did not allow the three territories to be treated differently, we would not have a devolution agreement in the Yukon, which makes it virtually most of the powers of a province, totally different from the other two territories. My understanding from talking to those governments is they actually have different levels of borrowing powers at the moment. So that is a totally uninformed suggestion.

With regard to the conditions that the parliamentary secretary suggested that the Conservatives needed to know to set these limits, imagine telling the government of Quebec that it would have to give us this and this and we will tell it how much it can borrow. That is ridiculously paternalistic. The current government has the largest debt and deficit in the history of Canada. It is far more than the borrowing that is asked for by this responsible Government of the Northwest Territories. It is not an unreasonable quest to send the bill to committee.

I was going to be totally positive in this speech until I heard the ridiculous comments by the government. We should stop being paternalistic. There are 13 jurisdictions in Canada that have responsible government. They should be provided with the tools they need to deal with that. If they use this debt level, which is a very low, modest level, they have to pay it back. It does not cost the Government of Canada anything. I am all in favour and supportive of treating the people in the three territories as the responsible governments they have shown they can be and that they deserve to have.

[Marc Lemay, Bloc, Abitibi—Témiscamingue, QC]

Mr. Speaker, I am not sure if you remember, but I believe you were chair of the Standing Committee on Aboriginal Affairs and Northern Development when we first started talking about a study on the economic development of the north and on the constraints and difficulties that entails. We are just finalizing that study, which began almost two years ago. Like the hon. member for Yukon, I admit I was extremely surprised at the reaction of the Parliamentary Secretary to the Minister of Finance to the request from the New Democratic member for Western Arctic, a request that seemed perfectly legitimate to us.

The advantage of private members' bills is that they require us to do some research, to analyze and try to understand the problem. There is a difference between a government bill and a private members' bill. A private members' bill is introduced to solve a problem to the satisfaction of the party concerned.

In the Bloc Québécois, when we read Bill C-530 for the first time, we wondered what it was all about. We did not know this problem existed. We now realize that one of the main challenges involved in the economic development of the north is the fact that the inhabitants of that region are not autonomous. They cannot develop and have a vision for the future without the government's permission.

It is pure paternalism. Have we had gone back to the days of colonialism? The state steps in and tells the people how to develop the region. It says it cannot lend them a lot of money and that it will wait and see. If we want these territories, Yukon, the Northwest Territories and Nunavut, to take control of their own destiny, then we have to at least give them the chance to develop. One way to do so is to increase their borrowing capacity.

Let us draw a parallel. We have a credit card that we pay off on time every month. The bank or financial institution that issued the card writes to us after six months to say that, because the balance has always been paid, our credit will be increased. It is done automatically.

In a modern society, companies write to us to increase our lines of credit. That is usually what happens. Not only do the Northwest Territories pay their debts, but they also even have a small surplus at the end of the year. In the 2010-11 budget, their projected surplus is $35 million. Their projected income is $1.357 billion and their projected expenditures are $1.293 billion. If that is not an administration that respects itself, takes responsibility and looks after its own development, then I do not know what is.

In short, the Bloc Québécois will vote in favour of sending this bill to committee to be studied.

I would very much like the Parliamentary Secretary to the Minister of Finance to come to the committee to repeat what he said today. I do not think he would dare do so. It is not possible. It is paternalism in the extreme. How can—I was going to say nation, and I will say it—a nation, a territory like the Northwest Territories develop? They have mines. I looked into that because that forces us to work. We have worked. We have done our homework. They have not done their homework. It is clear that the parliamentary secretary has not done his homework.

We just have to look at the expansion plans for the Taltson hydro project. A power plant like that produces electricity. Of course to build it, money must be borrowed. We thought about our own dams in James Bay, in Quebec. We borrowed money to build them, but we have since seen a return on our investment. The Taltson power plant was explained to us. It is a run-of-the-river hydroelectric plant. It uses water that flows through the river. This hydro development on the Taltson River could replace 114 million litres of diesel and 320 kilotonnes of greenhouse gas emissions. Now I understand why the Conservatives oppose the bill. They might no longer be able to sell their oil in the north. If that is why, they should say so. Imagine that. When we hear things like that and read things like that, it does not make sense.

The purpose of the bill is to promote the economic development of Canada's north. The Northwest Territories want development. They want to stop having to come to Ottawa to beg the government, under section 20, for the opportunity to borrow a little more. They will be able to pay it back, but they have to ask permission from their grandfather, their big brother, their great-uncle or someone in Ottawa. I hope this government will understand. That is not the way to develop these lands.

If we want Yukon to address this issue, we need to do exactly what the member for Yukon said in the House. If the Northwest Territories want to develop, they need to do something about it. We will answer questions. We will go to committee. We will bring witnesses forward. We understand that anything can happen, but we cannot refuse and say that we do not want to hear anything about it from the outset. I think that this is an interesting bill. It allows us to put a finger on one of the major problems of economic development in the North. One of the problems that has been mentioned by nearly everyone in the North, including people in the Northwest Territories, is that no one is capable of long-term planning. This bill, if it is passed, will allow them to develop.

We have studied this bill. We said it today and we will say it again. We hope that this bill will go to committee. With all due respect for my colleagues in the governing party, I hope that they will not come before the Standing Committee on Aboriginal Affairs and Northern Development with the same opinion that the Parliamentary Secretary to the Minister of Finance expressed today because they will find their hour before the committee to be very long.

That is why we will make sure this bill is studied in committee.

[Jim Maloway, NDP, Elmwood—Transcona, MB]

Mr. Speaker, I congratulate the hon. member for Western Arctic for his work on Bill C-530. He is also an extremely hard-working and determined member of Parliament and the citizens of Western Arctic are getting extremely good value re-electing him time after time as their member of Parliament.

I was very surprised by the speech of the government member. He is normally a very restrained and thoughtful speaker but today he is out of character. It demonstrates that the government has run up the white flag on this bill. I think it can see that the three opposition parties will be voting together and will have sufficient votes to send it to committee and well it should be because it is a very well constructed and very good bill.

The parliamentary secretary fails to understand his role and the government's role in Parliament. The fact is that the Canadian government or any government for that matter in the parliamentary system survives at the pleasure of Parliament. The parliamentary secretary has one vote in the House as the member for Western Arctic does. This Parliament is a sovereign body. The parliamentary secretary has no right to berate any member of the House for simply doing his or her job. That is what the member was doing.

I was very impressed with the speech by the member for Yukon. He rightly came to the defence of the member to put the government in its place and make the government understand what its role really is.

The member for Yukon pointed out that there is a devolution agreement already in place for Yukon. It separates it from the other territories to a certain degree because there is a different level of authority between one territory and another.

Another issue that we need to deal with is that we are at second reading of the bill. Second reading of any bill is to deal with the principle of the bill. We are not supposed to be spending our time in our speeches going through the minutia of the bill and discussing it clause by clause and point by point. The whole reason for second reading debate is whether or not members agree or disagree with the principle behind the bill.

That is why I argue many times in my own caucus that on second reading if we agree with the principle then we should be supporting the bill. I think, by and large, more often than not we should be voting together in Parliament to support bills at second reading if we agree with the principle.

What the government has done tonight is to simply to say that it does not even agree with the principle. We just had the Prime Minister a few months ago go up to the Arctic and talk about Arctic sovereignty and how we need to spend gazillions of dollars there to keep the Russians at bay and all the other enemies that he sees out there at bay because we want to be able to extend our arguments for sovereignty over minerals and oil exploration as far north as we can.

That is what the bill would do. The bill would facilitate our goal of extending our sovereignty in this country. That is another reason that I am very surprised and disappointed at the parliamentary secretary's response to the bill. The bill does not ask for a lot. It asks that a territory to be able to extend its borrowing capacity.

I want to reference something the member pointed out in his speech, which is that on March 26, Moody's Investors Services gave the Northwest Territories a AA1 rating, which is the second highest rating and places the Northwest Territories in line for credit risk with most of the provinces. This is the second year in a row that Moody's has issued the Northwest Territories such a high rating.

I know how important Moody's Investors Services and all these rating agencies are. These are world-class rating agencies. They rate securities, bonds and governments.

I was a member of the legislature in Manitoba for 23 years and before that I worked as an executive assistant to a minister in the Ed Schreyer government, which was elected first in 1969. Finance ministers of all provinces care a lot about Moody's and the other financial houses in terms of their ratings. They routinely get on a plane two or three times a year and go cap in hand to New York to be interviewed by representatives of these investment houses in order to get that all important good credit rating. They know that if their credit rating slips, the borrowing costs will be a lot more and it could mean a lot of money. This is very good news that the Northwest Territories has the capacity to get a credit rating like this.

The other issue concerns what it is borrowing. Is the federal government somehow lending the money, putting up the money and guaranteeing the money? The member has explained how the territory has always paid its bills and operates very fiscally responsibly. We would wish that the government would do the same.

There is another issue that the territories might look at, if this bill is successful. I think it will be successful with the Bloc, the Liberals and the NDP voting for it. It is just a matter of time before we actually get this bill passed. However, there are a lot of creative financing possibilities and opportunities that jurisdictions and provinces can take upon themselves. I will give an example.

Twenty years ago, in 1986 in Manitoba, the government looked at selling bonds. Some of our backbench MLAs, one of them in particular, one of my former colleagues, suggested in the caucus that we sell Manitoba government bonds, that we sell Manitoba Hydro bonds. Guess what? Two years later, Manitoba Hydro was issuing its own bonds to citizens of Manitoba.

Does that not make a lot more sense than borrowing money in New York or on the foreign market, or perhaps even with a foreign exchange and other currencies? We have all been burned on currency exchanges over the years by borrowing in Swiss francs, Dutch guilders or German marks. What we did, which is what other provinces have done, was take out the bond right in Manitoba. We had Manitobans buying our bonds and keeping the money in the province. The interest on the bonds was staying in the province.

I know, for example, that Air North airlines in the member for Yukon's riding is a big success story. It has its headquarters, its commissary and its flight crews in Whitehorse. It is a real asset to that community. Even its financing is very positive, as far as I am concerned, because it sells shares to people in Yukon.

When I was up there last year, I talked to a person who worked as a server in the local hotel. She is thrilled with Air North because she bought $5,000 worth of shares, she gets one or two free flights a year, and she gets a return on her investment. That is the type of local investment that we want to encourage within our local jurisdictions, and that can be done. It is not the Conservative approach that everything needs to be done through Goldman Sachs and other financial houses on the advice of these houses on foreign markets.

The member who is on the finance committee may laugh about that, but there are many ways to raise funds. We are saying that if we give people a local stake in their enterprises, we will see a much more solid enterprise in the long term.

I have not even begun to go through the notes that I have with respect to this debate. The parliamentary secretary got me to respond the way I did. I really did not expect that kind of attitude from the government. As the member for the Bloc said, I sure hope the government does not have that attitude when the three opposition parties pass this bill on to committee where it belongs.

[The Acting Speaker, Conservative, Barry Devolin]

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.

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

[Carole Lavallée, Bloc, Saint-Bruno—Saint-Hubert, QC]

Mr. Speaker, thank you for allowing me to come back with a new question for the Minister of Canadian Heritage and Official Languages.

On June 4, I asked a question about Bill C-32, introduced by the Minister of Industry on June 2. He answered my question himself. However, I was not at all satisfied with the answer, which made no sense. I will repeat my question and someone on the other side of the House will certainly be able to answer it. Here it is:

...there is no monetary compensation for artists in this bill. [In Bill C-32, there is no monetary compensation and previous levies have been taken out.] Sales of music CDs are in free fall and artists' revenues are slowly drying up. However, the appetite for music has not wavered [people have not stopped listening, and neither have I] and makers of MP3 players are still raking in huge profits. ADISQ, UDA [l'Union des artistes], the Canadian Private Copying Collective and even the Union des consommateurs are calling for a levy on digital music players [l'Union des consommateurs is an influential group].

Why is the government denying creators their fair remuneration?

Why has Bill C-32 eliminated all sources of compensation?

There are none left. The private copying levy—I will come back to that in a moment—amounts to $180 billion paid to artists throughout Canada and Quebec over the past 15 years.

The Minister of Industry replied:

We want to help artists, but we also want to help consumers.

This bill is about copyright and the Minister of Industry replies that he wants to help consumers. After that, we saw him go off in all directions to help consumers. The Union des consommateurs does not support Bill C-32, but does support the private copying levy.

I would like to take a moment to explain what that kind of system involves. Artists receive levies from the sale of blank cassettes and CDs. Private copy levies are already in the act. Every time consumers buy a blank cassette or CD, they pay 29¢ to a collective society that redistributes the money to artists according to a complex but fair formula. Artists receive their fair share, which enables them to keep creating. Many artists go for months without earning any income because they are busy creating.

The Union des consommateurs agrees with the system and, in its September 2009 brief, suggested the following:

We therefore suggest extending Part VIII of the Copyright Act [the part that modernizes private copying] to devices such as digital audio recorders, digital video recorders including Tivo and other decoders with integrated hard drives, telephones with digital-capable memories, and DVDs.

That text appears on page 21 of the Union des consommateurs September 2009 brief.

[Dean Del Mastro, Conservative, Parliamentary Secretary to the Minister of Canadian Heritage]

Mr. Speaker, I will say at the outset that I look forward to the member's support for Bill C-32. As somebody who wants to see the arts, culture and creative sector in Canada succeed, she knows that we need to modernize Canada's Copyright Act. I hope the member is going to support Bill C-32, a balanced modernization of the Copyright Act.

With respect to the copying levy, as she puts it, I think my party has taken a position that is very principled, one that suggests we are going to stand up for Canadian consumers. I know the Bloc does not understand what I am saying on this, so I am going to try to speak to it in a manner whereby it is well understood.

Thirty years ago when the transition was first made from vinyl records to cassette tapes, people often made copies on cassette tapes. Cassette tapes could be used for one thing and one thing only: audio recording. There was a system put in place whereby people who made copies of audio recordings paid a small fee, a tax, on the cassette tapes and that fee went to a collective. Many people did not even know they were paying it. I have a problem with that because most people did not know they were paying this tax to begin with, but it did go to a collective.

As technology improved, people could write onto CDs. CDs, unlike cassette tapes, could also be used with computers, for storage of information, quite a bit more storage actually, and they could also be used to store photos. The connection between audio recordings and CDs started to get stretched, but there was a levy, or a tax, placed on blank CDs for all Canadians. People did not pay it in the United States or in a lot of competing jurisdictions, but Canadians were forced to pay it here. A lot of Canadians did not know that.

The device I have on my hip is a telephone, but I can surf the Internet, send emails and take pictures and video with it. Unfortunately, perhaps I could also copy a song onto it. What the Bloc and the NDP propose is that we put an additional tax on devices like this, even Canadian-made devices like the one I am proud to own, which is made by a company in Waterloo. That does not make any sense. Nobody agrees that this makes any sense.

I suggest that I accompany the member to her riding and ask her constituents these simple questions: Are they prepared to pay more money for their iPod, laptop, cell phone or home computer? Are they prepared to pay more money which will go to a collective, which will come up with a formula to redistribute money? Or would they rather have a system that works, a market-based system? That is what Bill C-32 does. It re-establishes the market.

The member was in committee when she heard representatives of the Canadian recording industry say, “You want to give us pennies when what we really need is a market system that works, one that allows us to get paid for the music and albums we are producing”. That is what Bill C-32 delivers and the member should support it.