John Godfrey

[Excise Tax Act, October 31st, 1995]

Mr. Speaker, I will address some of the arguments put to us this afternoon by members of the Reform Party.

I will limit my remarks essentially to four arguments. The first made by the member for Medicine Hat is an economic argument about market choice. It is an interesting theory about the ability of consumers to know their own needs best. It is a very alluring theory but there are flaws with that theory which I hope to point out.

The second argument is that of the member for Edmonton Strathcona on the apparently arbitrary nature of Bill C-103 with regard to its targeting Sports Illustrated and its split run and the timing of the proposal.

The third argument deals with the whole notion of state sanctioned cultural protection, alluded to by the members for Edmonton Strathcona and Peace River. The final argument deals with the whole notion of whether we can compete without this kind of government subsidy, an argument made by the member for Peace River. Let us review those arguments in order.

How does the world actually work? The world actually works in economic theory and in economic practice in two different ways. We have what could be described by any economist as imperfect market conditions in many of our relationships with the United States.

This is particularly true when, because of the market size and dominance in the cultural industries, there is a virtual monopoly condition which unless counterbalanced would essentially wipe out Canadian culture. It is true not only of magazine publishing but equally of broadcasting, movie distribution, popular music and many other cultural areas.

Our experience in this country is a sad one, going back to the days of radio in the 1920s and 1930s when we discovered there was simply no place for a Canadian voice unless we created it, unless we legislated some protection, some place for Canadian voices to be heard, which led to the creation of the Canadian Broadcasting Corporation.

We noted in a later era that in popular music Canadian voices could not be heard unless there was some place they would be protected initially so they could form a critical mass and then become competitive. We have noted in film distribution that there is still no place for Canadian voices because of the enormous market power of the American distribution systems. We have noted it in magazine distribution where we saw from 1961 a market share of 25 per cent of publications available in this country declining to 21 per cent. With the introduction of various measures designed to prevent this kind of dumping Canadian magazines started to increase in their number and in their proportion of the marketplace.

In other words, we are talking about public policy that actually has a track record of working; public policy that has worked in broadcasting with the Canadian Broadcasting Corporation, public policy that has created a vibrant successful popular music business which can now compete successfully in the United States, and public policy that has supported a vibrant Canadian magazine industry. Public policy works.

The argument has been put on the second point that this is grossly unfair to Sports Illustrated , a magazine that deliberately tried to violate the spirit of the law against this kind of dumping by trying a technological device not available at the time of Time magazine or Reader's Digest when we had to deal with this problem previously. It was a deliberately provocative act which demanded a deliberate, measured and firm response, which is what this is about. The spirit of the law is quite clear and it has been violated by Sports Illustrated .

The third argument has to do with the notion of state sponsored cultural protection. It is very interesting that we are not the only country to try to protect our cultural industries. It is also clear the United States does exactly the same thing. It is not possible for a foreigner to own a television station in the United States. The foreigner has to change nationality. We might argue that is a form of cultural protection. The Americans put it in a different way. They see that as a matter of national security so if ever they had to clear the air waves, a station would not be owned by some nefarious Canadian who would stop them. It is a form of cultural protection under the guise of national security.

The Americans do all sorts of things in this area. They do not allow foreigners to own significant amounts of the merchant marine because it might be required for national security. Surely if we chose to do so in this country we could simply redefine what we are on about here as our form of national security, our national cultural security. We also have something at stake here but we do not fight so much with arms as we do with our culture.

I think that, for all Canadians in whatever cultural or social group, our culture is nonetheless worth fighting for, since this culture, whether expressed in French or in English, represents us.

I think that we will also benefit from the European model, which reflects similar concerns with respect to culture. Our French counterparts have done the exact same thing, taking action for instance against the distribution of American movies and television programs. The problem is the same, it has to do with who they are.

That is what this is all about and why we are entering into a kind of alliance with the French and the Europeans on culture, in spite of American provocation if I may say so.

The Americans look upon us as a kind of Trojan horse. And if they cannot prevent us from taking such action, they will not be able to do so, even with the Europeans.

I suppose the argument, particularly by the member for Peace River, is whether we can compete without a government subsidy. The answer to that is quite clear. We cannot compete in an unfair market in which superior economic power is evidenced by dumping. The product coming across the border in the form of the split run by Sports Illustrated has been légèrement canadianisé. It is not a true Canadian product. It violates all of the agreements we put in place when we dealt with Reader's Digest and Time magazine. It was designed to do that deliberately. We have to take deliberate action against it.

As for being a subsidy, it is not a subsidy. It is simply a provision of the Income Tax Act which does not allow them to have favoured treatment because they have come up with a clever technological trick.

For all these reasons I reject the arguments of the members of the Reform Party and urge the House to support this measure.

[Committees Of The House, October 24th, 1995]

Mr. Speaker, I have the honour to present the ninth report of the Standing Committee on Industry entitled "Performance Benchmarks for Small Business Financing by Banks: A Progress Report".

I am particularly pleased to draw the attention of the House to the fact that this report is supported by members of all three political parties on the committee.

The report follows up on the committee's second report to the House "Taking Care of Small Business". It sets out a framework for banks to report their small business loan statistics to the industry committee on a quarterly basis. This data will allow the committee to track the performance of the banks in their relationship with small and medium size businesses and to select specific benchmarking issues for future investigations.

The committee will hold meetings with the banks to discuss this report and related matters during the week of November 6.

[Committees Of The House, October 4th, 1995]

Mr. Speaker, I have the honour to present the eighth report of the Standing Committee on Industry.

The report relates to the Canadian Tourism Commission and follows on discussions the committee held with commission officials in March of this year.

The Canadian Tourism Commission was created by order in council in January 1995 and has recently submitted to the industry committee its charter and 1995-96 business plan.

The committee intends to continue monitoring the commission's progress over the coming months.

[Committees Of The House, June 21st, 1995]

Mr. Speaker, I have the honour to present the third report of the Standing Committee on Canadian Heritage, on the future of the Canadian Broadcasting Corporation in the multi-channel universe.

Pursuant to Standing Order 109, the committee requests that the government table a comprehensive response thereto within 150 days.

I also have the privilege to present the fourth report of the Standing Committee on Canadian Heritage on the government's proposed orders issuing directions to the CRTC respecting direct-to-home satellite distribution and pay-per-view programming undertakings.

[Petitions, June 14th, 1995]

Mr. Speaker, I have the honour to present two petitions, both asking Parliament to act quickly to amend the Canadian Human Rights Act to prevent discrimination on the basis of sexual orientation and they have my full support.

[Rwanda, April 24th, 1995]

Mr. Speaker, following on the remarks of the previous member, like all Canadians I am sure that all members of the House join me in their condemnation of the continuing atrocities in Rwanda. This weekend we learned of yet another attack on innocent civilians and the death of several thousand Rwandan citizens.

There comes a time when the long accepted international principle of the absolute right of national sovereignty to take priority over all other rights must be put aside in the name of international human rights and common decency.

I suggest that the citizens of Rwanda, like those of Somalia or the former Yugoslavia possess inalienable rights of freedom and life. Quite clearly these rights no longer exist. The Rwandan government must be held accountable for the actions of its army and justice must be served.

I believe that Canadians have a role to play in achieving peace in this region. We have been and continue to be a world leader in the fight for peace. There is no place in this world for mass murder and ethnic cleansing. The voice of peace and freedom must be heard.

[Budget Implementation Act, 1995, April 6th, 1995]

Mr. Speaker, this debate is about the implementation of the federal budget. However I would like to take advantage of the occasion to pick up on a point made by the hon. member in the closing passage of his speech and look beyond the budget to examine the whole question of Canada's national debt; that constantly growing monster which requires $44 billion annually simply to feed. As the finance minister stated in the budget, service charges on the

debt will eventually reach $50 billion before the ratio of debt to gross domestic product starts to improve.

This is a good time, as everyone knows, to talk about the debt because officials from the Department of Finance have been meeting with Moody's, the bond rating agency in New York, to discuss a possible downgrading in Canada's rating. If the talks go badly and if Moody's ultimately downgrades our credit worthiness, the cost of borrowing money to service the debt will be even higher.

As has often been pointed out, the Liberal red book is silent on two questions: when will we eliminate the deficit and how will we then deal with the accumulated stock of Canada's debt?

A constituent of Don Valley West, financial analyst Ross Healy of Strategic Analysis Corporation in Toronto, has proposed a radical, elegant solution to Canada's debt problem called the Phoenix Rising Solution. At the heart of his proposal is an approach which is often used in corporate restructuring, cleaning up the balance sheet by converting excessive debt to equity. In this regard the Phoenix solution is conventional and even commonplace in the private sector, but for government the solution is unique, daring in the proposed scale of the financial offering and radical in its drastic alteration of government finances.

What is proposed is, in Healy's words:

-an equity underwriting of up to $780 billion which will be used to pay down the indebtedness of the federal and provincial governments. The equity' used is a 30 year stream of tax revenuesbundled up' such that there is sufficient present value to replace the indebtedness of the government. The new instrument we shall call the Canadian Phoenix Trust. Shares in the Canadian Phoenix Trust will be exchanged for current government indebtedness on a dollar for dollar basis. It is therefore a replacement of the existing debt with equity, as no `new' capital is required for its success.

Here are the details of the proposal. The federal and provincial governments sell the rights to a future stream of tax revenue to a tax free trust, the stream being large enough to create a present value of up to $780 billion, the total of all direct government federal and provincial indebtedness. Units of the trust would be swapped for existing debt obligations.

Using a 3.5 per cent nominal growth rate in gross domestic product and a 4.5 per cent tax free discount rate, it would require about 4.2 per cent of gross domestic product annually over 30 years to service and retire the $780 billion of equity so created. The moneys would come from existing tax revenues.

The cost of servicing current and provincial debts is about $60 billion annually and rising. As a result there would be an immediate saving of roughly 50 per cent in debt service costs. The moneys paid not only cover service costs but also amortize the full amount of the debt.

Like a mortgage, the blended annual payments of dividends and principal are paid every year, and trust income is a flat 4.2 per cent of Canadian gross domestic product for 30 years, the annual amounts growing in direct relation to the growth of GDP.

Two questions arise immediately. If such a scheme worked, what would be its advantage? Of course, most importantly, would such a scheme work?

First the advantages. Economists have calculated that the current high levels of Canadian government indebtedness constitute an enormous drag on the Canadian economy by crowding out private sector borrowers. These economists estimate Canada's gross domestic product would be between $110 billion and $140 billion greater per year without the debt.

Eliminating government debt would permanently lower Canada's interest rates, thereby improving the climate for innovation, investment and long-term growth.

With the government reducing costs of servicing the debt by 50 per cent, coupled with the existing budgetary measures proposed in February, Canada's federal deficit would be eliminated in two years, not simply reduced to 3 per cent of gross domestic product. The combination of stronger economic growth and future budgetary surpluses would allow governments to lower tax rates, thereby encouraging even stronger economic growth. The Phoenix solution would create a virtuous economic circle indeed.

The biggest question, of course, is can such a scheme work? More precisely, will investors buy? Why would investors swap their holdings of government bonds for Phoenix Trust units on a sufficient scale to make it worthwhile? In the words of Ross Healy and his associate, Enrico Sgromo: "Investors will swap if they feel that the Phoenix Trust units represent a good investment and the current Government of Canada bonds represent increasing risk because of the financial crises that the government finds itself in". Well, given the last and recent gloomy conversations with Moody's, at least the latter half of this proposition seems reasonable.

The major attraction for foreign investors in the short term is the very positive impact on the Canadian dollar, which would gain value immediately. Over the long term the participation in a growing economy with low interest rates would offer both foreign and Canadian investors the opportunity for major capital gains. The beauty of the Phoenix solution is that the better Canada does economically, the better investors do financially. When we succeed, they succeed.

I have only sketched the outline of a concept that has been more fully elaborated elsewhere. My purpose is to test a new idea and ask for constructive responses from my parliamentary colleagues and indeed from citizens who may be watching this program.

I do not claim that the Phoenix solution is perfect, only that it is better than all other solutions I have heard proposed to date for solving our debt crisis.

In the end it will be up to members of the international investment community to decide whether they are interested in exploring a new investment vehicle. Over the years that financial community has shown a remarkable capacity for innovation, sometimes to their cost, as Barings Bank recently discovered. But I suspect that the prospect of charging even a modest commission on the conversion of $780 billion from debt to equity might intrigue even the most jaded spirits on Bay Street and on Wall Street.

[Government Organization Act (Federal Agencies), February 7th, 1995]

Mr. Speaker, I am very pleased to address the matter of the second reading of an omnibus bill concerning the elimination and streamlining of federal agencies.

In July of last year the Minister for Public Service Renewal announced the decision to eliminate 21 agencies, boards and advisory bodies and 275 governor in council and ministerial appointments.

The bill before members today is part of that initiative to eliminate and streamline 15 agencies and 150 governor in council appointments.

The July announcement represents a partnership initiative among federal ministers involving the ministers of finance, fisheries and oceans, government services, health, industry, national defence, national revenue and public works.

As we headed into the last election the Liberal Party of Canada recognized that one simple question stood out in the minds of Canadians: What kind of a country do we want for ourselves and for our children?

Among the qualities we identified, we recognize that we want a country whose governments are efficient, innovative and co-operative, not only with each other but with other sectors as well.

The red book states that as a government we have premised our agenda on an integrated and coherent approach to economic, social, environmental and foreign policy. As a government we want to explore innovative and creative solutions to old problems, looking at them from a new perspective. And as a government we know that it is necessary to tend to one's own housekeeping.

We have therefore chosen a plan of action that will help us streamline government activities, make government less cumbersome and therefore develop better government and to adapt the structure of government to provide improved services to the public. To do this, we have to determine whether specific government programs, agencies, boards and advisory bodies actually deliver results over time.

The omnibus bill which is before the House for second reading today is an important and progressive part of that process. Our aim is to establish better, more efficient and more effective government. The passage of this bill will bring us closer to that goal.

Today's climate is one of change. Canada as a nation, the federal department, the agencies and crown corporations for the

Department of Canadian Heritage and the myriad components of government cannot escape this one inevitability, change. Three factors contribute to this atmosphere of change.

First, fiscal restraint is forcing us to rethink the way that governments do business. The reduction of the deficit is in the interest of all Canadians and constitutes a priority of our government.

Second, the global village of which Marshall McLuhan wrote so prophetically in 1962 has become a reality. In particular, the globalization of world markets creates a new context for business and trade, a context which is increasingly important to Canada which is becoming more and more dependent on exports. This context demands that the machinery of government be up to date, finely honed and highly effective, capable of responding to an international economic environment in which transactions take place instantaneously.

Finally, the relentless evolution of new technologies impels us to revisit the means by which we distribute products and services among the population. Canada, which has repeatedly overcome challenges of geography and climate, particularly today, is no stranger to revolutions in communications.

The red book has articulated our commitment to simplify public sector structures and streamline operations wherever possible to respond to today's changing environment. We also want to encourage creativity and innovation in meeting challenges, not as problems but as opportunities.

Toward these ends, my colleague the minister has undertaken this exercise which promises to bring efficiency gains. It is an exercise that will maximize the opportunity for the good governance of the work that agencies, boards and advisory boards do.

Our goal is clear: to modernize the machinery of state with a view to rendering government more efficient and more responsive to the needs of the citizens which it serves.

The Department of Canadian Heritage along with the agencies and crown corporations of the Canadian heritage portfolio participated in this renewal exercise. As a result it was a very collaborative, open process. There was a collegial tone to the consultations with full agreement achieved so that the boards could continue their work efficiently, effectively and with smaller numbers.

A November 26 article in the Montreal Gazette asked the following question: When governments are strapped for cash can they afford to support culture? I can assure this House that culture is one of our strongest allies in building a stronger and more unified nation.

As the red book states, culture is the very essence of national identity, the bedrock of national sovereignty and national pride. At a time when globalization and the information and communications revolutions are erasing national borders, Canada needs more than ever to commit itself to cultural development.

The government's intention has not been to weaken Canada's national cultural institutions but to streamline them and to make them more effective and efficient. I support the July initiative to eliminate and streamline agencies in an equitable fashion and support the continued development of culture in Canada.

The government's initiative to eliminate and streamline agencies underscores the reality that better more effective government does not necessarily mean more government, or that this concept is incompatible with the need to work with less. We can work with less without affecting quality. Canadians have proved that throughout our history.

Our intention is clear: to modernize the machinery of government. That means reducing the parts to streamline our activities where applicable and thereby optimize the success of board appointments. This provides some assurance to Canadians by placing the onus on governments to make good appointments, appointments that are necessary and that are made on the basis of competence.

As a result in the area of Canadian heritage I support such measures as reducing the size of the Canada Council, as well as the boards of the Canadian Broadcasting Corporation, the federal museums and the National Film Board to name a few. Together these reductions will account for 85 government in council positions and 10 ministerial appointments.

This process of streamlining will not adversely affect the development, support of, or dissemination of Canadian cultural expression. Culture is not simply an expression of the artistically inclined or spiritual abstract. Culture infuses every dimension of society. There is an inextricable connection between the cultural sector and its contribution to the economy.

I am among those who cannot imagine a society, a viable and vibrant society, without culture. Our challenge goes beyond that of mere economic stability. Our challenge is to protect the sector whose role and vocation is to give a sense of what it is to be Canadian, to be a witness to our collective consciousness. In fact, I am among those who believe that as a society it will be our culture that will affirm our position and strength in the community of nations in today's global village.

It is incumbent upon us therefore to go forward to maintain the gains that we have made as a nation. We must adapt to the new realities that confront and challenge us and move forward on a solid foundation of effective and responsive government.

This is our most profound challenge. I believe that our government is helping to position Canada and Canadians not just to meet that challenge but to surpass it.

[Department Of Canadian Heritage Act, December 14th, 1994]

Mr. Speaker, I am rising to discuss Motion No. 5, which deals with national parks. According to the amendment the effect would be to drop all references in the legislation to national parks, historic canals and national marine areas.

I suppose the question arises: Why should we include national parks under Canadian heritage? For those of us who have been interested in the park system it is interesting to note that over the years national parks have been located in different ministries.

The first place they were to be found after their creation in the 1880s was in what might be described as the predecessor to the Ministry of Natural Resources. This indicates that parks in those days were seen to have not only a natural component but also an economic component. They were seen as part of Canada's natural resources.

A subsequent reorganization of government meant that parks found themselves suddenly with Indian Affairs and Northern Development. This new vision of parks suggested that they were to be seen somehow as up there, out there, out of sight, out of mind to some degree. That was because they were in remote places often in the north, often in places where the aboriginal populations could be found. Of course that ignored the reality that there were parks close to centres of habitation, such as the Rocky Mountain parks.

After that the parks structures found themselves in the Minister of the Environment which seemed to make sense. The theme there was one of protection rather than human use. It put the stress on not interfering with the parks which took away the notion of an economic connection with parks.

Now finally with Canadian heritage the circle is to some extent complete. This latest reorganization of government recognizes that parks have different characteristics all of which have to be recognized. They are natural preserves and need protection, but they are also cultural sites. They are also economic sites for activity, for tourism for example.

By putting them into a new ministry this bill tries to recognize the complex way in which we now look at parks. In this bill we recognize that history, culture and nature are intertwined in some fundamental way. This is simply to pick up on what is happening internationally under conventions such as that of UNESCO concerning the protection of the world cultural and natural heritage. In UNESCO's eyes cultural and natural heritage are inevitably linked and so they are in ours.

Parks are also a crucial element of our national identity. They go with the vision that Canadians have of themselves wherever they live, of being in some close harmony with nature, some respect of nature and some awe of nature. It was Margaret Atwood who once described the common theme of Canadian literature, si c'était en anglais ou en français, as survival in the face of nature, survival in the face of difficult forces.

Those who are concerned that by having parks taken away from the Department of the Environment should rest assured that the environmental concerns will not be diminished by having them in Canadian heritage. They will continue to be respected. It will continue to be the case in our international agreements, such as under UNESCO that parks will be fully protected.

The reason that parks are being put in Canadian heritage is to respect their role as part of our system of values, part of our history, part of our culture, part of what it is to be a Canadian.

As I mentioned earlier, there is an appropriate return to where we first saw parks because there are economic reasons as well to link together national parks and national historic sites. That is because tourism of all sorts is of continuing and indeed growing importance for this government. As members of this House will recall, we have a major $7 billion tourist deficit and parks have their role to play in correcting that, as do national historic sites.

These are terrific assets, our parks and historic sites. It makes sense for them to be kept together. We think that indeed for those who worry about the environment having parks located in the Department of Canadian Heritage simply means there is one more environmental voice at the cabinet table.

It is also the case that it is a commitment of this government to complete the national parks system, that system which was so much expanded in the 1970s by our present Prime Minister. To this we are adding a new kind of park under water parks, the national marine conservation areas which this amendment would have us locate in some other place. These are the parks of the future; these are the parks which respect our complex marine life. They too belong in the same package with the national parks and national historic sites.

Finally, it seems to us that having subjected the national parks system to so many reorganizations and having had it put in so many different places over time that Parks Canada has done well in the new Department of Canadian Heritage. It has found a new place to call home. It would be both counterproductive and extraordinarily disruptive to move it yet again after a mere year and a half.

For those reasons we are opposed to this amendment. We think that national parks and indeed canals and national marine conservation areas belong properly with the Department of Canadian Heritage.

[Committees Of The House, December 13th, 1994]

Madam Speaker, I have the honour to present the second report of the Standing Committee on Canadian Heritage on Bill C-53.