Loyola Hearn

[Payment Clearing and Settlement Act, April 19th, 2002]

Madam Speaker, I rise on behalf of our party to also support the amendments to Bill S-40. We think it is a very good move.

It is a bit ironic, perhaps, that here we see government making some very solid, positive moves that would help Canadian companies, whereas just today, and it is an issue I will raise later because it may not entirely be relevant, we see the situation where a government department, in calling tenders for supplies, eliminates small Canadian business, small local competition, and really passes tenders into the hands of large American based companies. There are many areas where we have to scrutinize what we are doing to make sure that perhaps we do as we are doing here, which is to bring in proper legislation and take proper procedures to protect our own companies so we can be competitive in the overall marketplace.

Increasingly Canadian companies are going to the United States markets to meet their funding needs. Our largest companies trade more shares on the United States exchanges than on the Toronto Stock Exchange. The past three years have seen net portfolio investment go from an inflow of $14 billion per year to an alarming outflow of $30 billion per year. This is extremely serious. During that period of time, foreign purchases of Canadian companies have outweighed Canadian acquisitions of foreign companies by more than $75 billion. As these companies come under foreign ownership, their financing activities move out of the country.

In addition, the present circumstances make it very difficult to nurture new companies because they do not have access to adequate capital. Furthermore, they are unable to attract attention in the United States marketplace or even meet the higher U.S. listing requirements.

Bill S-40 is one of the initiatives that would reverse this trend. It is a step toward addressing the declining competitiveness of the Canadian economy and the declining liquidity of the Canadian capital markets.

The globalization of financial markets in recent years has permitted investors to move their investments rapidly away from riskier markets to others where the legislative framework is friendlier and less risky. In the United States, bankruptcy and insolvency legislation generally exempts securities clearing organizations from court ordered stays and allows them to net the obligations of members and to realize on their members' collateral. Thus, some trades that could and should occur in Canada, particularly in derivatives, are being handled in the United States because of the risk issue on the Canadian exchanges and the lack of protection in our bankruptcy and insolvency legislation. In particular, the Bourse de Montreal, Canada's major derivatives exchange, is at a marked disadvantage compared to exchanges such as the Chicago Board of Exchange.

The securities and derivatives industry is very significant for our Canadian economy. Strong and competitive Canadian financial markets are the key to the overall growth and prosperity of the nation. However, it is difficult to attract large international dealers if Canadian clearing houses face higher costs as a result of their inability to enforce their netting and collateral agreements with their members or because they present greater risks to the participants in the event of the insolvency of one or more members.

Clearing houses for Canadian securities and structured products such as derivatives and options must be able to clear transactions in a timely manner, but under existing law in Canada they cannot clear transactions when either the buyer or the seller becomes insolvent. The various Canadian laws that currently govern bankruptcy and insolvency, namely the Bankruptcy and Insolvency Act, the Companies' Creditors Arrangement Act and the Winding-up and Restructuring Act, do not offer Canadian clearing houses the same protection that is offered in the laws of other G-7 countries.

This is of great concern to the four exchanges in Canada that trade in securities and structure products, namely the TSE, the Toronto Stock Exchange, the Bourse de Montréal, the Canadian Venture Exchange in Calgary and the Winnipeg Commodity Exchange. This is also of great concern to the three clearing houses that clear the trades of the four exchanges, namely the Canadian Derivatives Clearing Corporation, the Canadian Depository for Securities and the WCE Clearing Corporation.

The Bourse de Montréal, on behalf of the Canadian Derivatives Clearing Corporation and the two remaining clearing houses, have all asked that the Payment Clearing and Settlement Act be amended to cover securities and derivatives clearing houses.

Bill S-40 is designed to provide clearing houses with the legal protection they need in the event one of the trading parties becomes insolvent or bankrupt.

The amendments in Bill S-40 would expand the scope of Canada's Payment Clearing and Settlement Act by providing protection for the netting agreements for our securities and derivatives clearing houses. They would also provide protection for the collateral posted by the members of the clearing houses.

Passing the bill will encourage both domestic and foreign investments in Canadian companies. That is what we want. We do not want to see this business going to the United States. We should not only hold our own here in Canada, but we should entice foreign investment here as well. We can only do that if we are competitive.

Should Canada fail to adapt its financial legislation to international norms, there is a clear danger that a significant number of Canadian businesses will move to foreign markets.

Bill S-40 will ensure that the Canadian market enjoys the same protection that is provided in the other G-7 countries. It will enhance our competitive position by enabling clearing houses to lower their costs by reducing the settlement risks caused by poor bankruptcy protection. Thus it will allow our financial markets and institutions to grow their business in Canada and reclaim certain specialized financial business that has moved to foreign markets. It may also attract new investors from the United States and other foreign countries.

It should be noted that the amendments to the bill follow up on the November 2001 recommendations made by the Bank of International Settlements and the International Organization of Securities Commissions.

One of the central recommendations was that the transactions involving the clearing houses have a well-founded legal basis so that their rules and procedures could be enforced with a high degree of certainty. This includes the enforceability of transactions, netting arrangements and liquidation of assets pledged or transferred as collateral.

Bill S-40 will help more of our financial markets to become more competitive. However more work needs to be done.

Tax reform is crucial. Despite federal and provincial tax cuts, Canadian taxes are still higher than in the United States, and the United States rates are scheduled to decline even more over the next four years.

A modern regulatory structure that will work in a fast paced marketplace is also necessary. We must eliminate rules that are duplicative, contradictory or not in the public's interest. Financing in Canada is more expensive and complicated than it should be. Each new regulatory policy should undergo a rigorous cost benefit analysis and be implemented in a way that minimizes cost and excessive red tape. How often have we heard that?

A single and national governing body must also be created to oversee Canada's financial markets. The multiple Canadian regulatory authorities have created a fragmented and decentralized system.

In conclusion, securities and derivatives clearing houses are crucial to the efficient operation of our financial markets. Bill S-40 will allow them to reduce costs, because of better bankruptcy protection legislation and thus become more internationally competitive. The bill, in conjunction with tax reform, reducing the regulatory burden, and consolidating the many financial market regulatory authorities will help restore Canada's competitiveness.

After all that is what collectively we should all be doing; ensuring that we are a major player in the financial markets in the world. We can be. We have everything here that would draw investment. The only thing we need is the will to ensure that investors feel comfortable, get a fair deal and we can compete with other countries around the world.

[The Environment, April 19th, 2002]

Mr. Speaker, my question is for the Minister of the Environment.

The minister is undoubtedly aware of the shrimp trawler which recently sank while being towed to port in Newfoundland. This vessel contains a huge amount of fuel which is now seeping to the surface.

As this trawler sank on prolific crab fishing grounds and is only a few miles away from a bird sanctuary which has, at this time, breeding time, over one million sea birds, what steps is the minister taking to avert an ecological disaster around the cliffs affected?

[Fisheries, April 18th, 2002]

Mr. Speaker, let me thank the parliamentary secretary for her reply. I am pleased with some of the actions the department has taken. I do know that the present minister takes this issue seriously.

However, if I were a real estate salesman, I would make a fortune selling oceanfront property in Saskatchewan to the government opposite because it claims there is no problem. Show it a manifest and there is no problem. Absolutely everything checked out with the Otto because somebody flashed the manifest.

During this past week a boat came in to Bay Roberts and flashed the manifest. However, when the manifest was scrutinized and one looked beyond it, one could see all kinds of abuse taking place in the fishing area.

The government is not doing everything it can. It only moved on the Olga because we brought it to its attention. We embarrassed it into making a move. With the Otto , again someone looked at the manifest.

Taking a licence from one boat will not control overfishing. Canada has to exert its influence over the nose and tail and the Flemish cap. How can we do that? We can do it by custodial management, extending jurisdiction or at least by using our position as the adjacent state that we are. Under the law of the sea we have both the right and the duty to exert our influence over conservation and control of the environment. The government has to do more. If it does not, it is the people of Atlantic Canada who will pay the price.

[Fisheries, April 18th, 2002]

Mr. Speaker, a couple of weeks ago I raised a question about overfishing and it has been followed up on several occasions since then. We drew to the attention of the House and the minister the fact that we have a severe problem, which has existed for years, but, with the exception of an intervention every now and then by the government, very little has been done. However an awareness has been created.

Let me thank the member, who I perhaps insulted a few moments ago, the chair of the fisheries committee, for his tremendous work in helping to educate the House, the members of his committee and, I would say, a lot of Canadians generally about the pillage that has taken place off the east coast of Newfoundland.

The member not only held hearings on the issue of overfishing, he also agreed to bring his committee to the province of Newfoundland and Labrador where we heard from everyone involved in the industry, from the towns that have been affected as a result of the destruction of our resource and also from interested parties. It was an education.

The members of the committee came back and, without exception, stood and spoke strongly on this issue during the debate that we had here in the House.

However, during that time a Russian vessel called the Olga came into St. John's and, by accident, someone--not the department because when I raised the issue with the minister he admitted that he did not know about it--discovered that the boat contained 49 tonnes of large, breathing codfish, a species that is under moratorium, a species we are not allowed to catch, a species that has been wiped out over the years by seal herds, by foreign overfishing and undoubtedly by our own interventions into the harvesting of the resource, but for whatever reasons a resource that has led, by its demise, to the closure of several fish plants and the displacement of several workers throughout the province of Newfoundland and Labrador and Canada generally.

I asked the minister what he was going to do about the contents of the boat. I asked him further about a sister ship which, on the same day, was supposed to land in St. John's and transfer its catch, as these boats do, back to the home country. When the word got out that cod had been discovered on boat number one, boat number two suddenly discovered it had a leak in the steering tube and headed off for Iceland. Undoubtedly that boat also contained product which it was not supposed to have.

I asked the minister if he would stop the boat and check it out to see if that was the case. I did not receive an answer to that question at all and I did not get much of an answer to what would be done with the first one.

Perhaps the parliamentary secretary, or whoever will answer, will educate me as to what the government has done so I can go home tonight feeling great about the interventions.

[Inter-American Convention to Prevent and Punish Torture, April 18th, 2002]

The member from Prince Edward Island knows all about bull but I will not get into that right now.

We must show leadership. We have to show leadership. How can we do it? In this case, if we believe in something then let us not be afraid to show it.

[Inter-American Convention to Prevent and Punish Torture, April 18th, 2002]

Mr. Speaker, I am delighted to stand and support the motion put forth by the member for Rosemont--Petite-Patrie.

I am extremely confused. I listened to the parliamentary secretary and I thought she made a tremendous argument for Canada's signing of the convention. It is amazing to hear both speakers from the other side talk very strongly about the importance of recognizing the fact that we must oppose torture and that Canada is extremely supportive of the convention, but yet we refuse to sign.

The convention itself was created at the 15th regular session of the general assembly of the Organization of American States. The spirit of the OAS convention to prevent and punish torture reinforces the charter of the United Nations and the universal declaration of human rights. The convention reaffirms that all acts of torture or any cruel, inhuman or degrading treatment or punishment constitute an offence against human dignity and a denial of the principles set forth in the charter of the OAS and the charter of the UN. Members opposite state that they are very supportive of all of these declarations.

As I get to see more of Canada's involvement in different conventions and international organizations, I wonder if we do not have a bunch of bureaucrats who travel the world, sit in on all these conventions and then come back and spend their time trying to tell us why we cannot be active participants within the different regimes. We heard this from foreign affairs and international trade officials in relation to our involvement in taking jurisdiction over the nose and tail of the Grand Banks. Now we hear about this wonderful convention that we support so heavily, but if we believe in it, why can we not sign on the dotted line?

I know what answer we will hear. We will hear that current Canadian criminal law accounts for the American convention to prevent and punish torture and therefore ratification may be considered redundant. Certainly, yes, if we agree with everything and protection is already in our laws, why should we sign on? The question is, why should we not? What difference does it make? If we are supportive of an international agreement, surely by being a signatory and showing some leadership within the organization and having some control and a say in events, we could have a lot more impact in handling this extremely important issue throughout the world.

Just last year in a country across the ocean a young lady was sentenced to be caned. This became an international issue. In fact, of all the issues I have faced since my involvement in politics at either level, I have never had as much correspondence as I had on this one. It created such an awareness among people. People realized that in this world of ours, where most of us live in peace and harmony, people are tortured and are punished cruelly and inhumanly. All of us in the House objected to that caning.

However, we have to put our money where our mouths are. Here we agree with the convention, but yet we are coming up with all kinds of excuses not to be a signatory. In this day and age, dealing with torture is extremely important. We are living in a changing world. The world today is not the world that you and I grew up in, Mr. Speaker. It is not even the world that the member for Rosemont--Petite-Patrie grew up in. The world is changing.

We see and hear daily reports of torture, of inhumane punishment and of bullying, which certainly is a form of mental torture. How do we deal with that? We deal with that by, as the old saying goes, taking the bull by the tail, and, in a case like this, by showing some leadership, by standing up--

[Species at Risk Act, April 18th, 2002]

Mr. Speaker, listening to the parliamentary secretary talk about the bill it would seem everyone in the House is saying what a wonderful piece of legislation it is. It could be if the government listened to the recommendations made by a number of members on both sides of the House, in committee and otherwise. The basis of the bill is good but a number of the clauses are not.

There are two ways of looking at the issue. First, we could look at the bill itself with its strengths and weaknesses. Second, we could look at what a piece of legislation like it is supposed to do. In looking at the second part we should question how well the government would look after species at risk. Would it only panic when a species was in such a state that recovery was impossible? What would the government do to identify species that were potentially at risk to make sure they did not reach the critical stage?

I will look at the issue both ways, starting with a look at the bill itself. There are a few clauses in Bill C-5 that cause tremendous concern. First, there is concern about the government's commitment to look after species on land the government controls. The government's commitment in this regard is weak and not clear at all. However that is the typical commitment of the present government.

Second, the people who own land on which we find species determined to be at risk have a lot of concerns about this piece of legislation. There is absolutely nothing in it to guarantee they would be compensated for any portions of their land. In some areas significant portions of their land could be designated as habitat for certain species.

Let us imagine we have a nice piece of farmland anywhere in the country on which we have nice ponds where we like to walk, swim or boat. Let us imagine a nice country cottage overlooking a lake with lawns and pasture land. We get a knock on the door and a guy says the words we always fear: “I am from the government and I am here to help”. He tells us we have a beautiful piece of land and there is a valuable resource on it: a species at risk. We say that is wonderful. Then the government official proceeds to tell us that because it is a species at risk and the habitat cannot be disturbed we can no longer control our own piece of property.

Unless we get clear and distinct definitions as to what compensation would be available for land declared an area of protected habitat, it would be foolish for anyone in the House to support such a piece of legislation. It would leave constituents across the country holding the bag. It would allow the government to take credit for protecting species when doing so at someone else's expense.

There are several other problems in the bill including the review process. However I will come to the other side of the issue: What would the government do to protect species that were potentially at risk?

I am glad to see we are joined by the Minister of Fisheries and Oceans. He knows better than anyone in the House that in the waters over which he has jurisdiction, and perhaps in waters slightly outside his jurisdiction, there are species that are certainly at risk. One of the ones we have not yet talked about a lot is the Atlantic salmon.

In his own province of Nova Scotia and certainly in Newfoundland and Labrador and other areas there are many groups and agencies very concerned about the environment and the fisheries, They are concerned about the potential this fisheries provides for the economy of the region, both in commercial fisheries and recreational fisheries, and in keeping the species alive as a basis of sustainable development.

One of the things each group mentioned as we talked to them about the future of the stocks, particularly Atlantic salmon, is the effect of the growing seal herds on species of fish, whether they be trout or salmon. We ran across this as the fisheries committee visited Nova Scotia and we have seen it in Newfoundland and Labrador in relation to not only salmon but cod stocks as well.

The seal herds have multiplied tremendously and are certainly not at risk. However the species upon which they feed are at risk. If six or seven million seals eat one pound of fish a day, that is 365 days multiplied by one, multiplied by six or seven million. Imagine the amount of fish being eaten. Multiply that by 40 and the amount is horrendous. We cannot have sustainable development of our cod and salmon stocks or other fish in the ocean unless we control other species that are growing above and beyond the accepted norm.

Seals are now seen around river mouths where they have never been seen before and eating salmon going up the river to spawn and smaller salmon coming down. In the spring and through the summer there are numerous seals in these regions. That is providing a major concern and certainly one the minister will have to deal with.

The FRCC in its report released a couple of days ago talked about the cod stocks in the gulf. This affects the member's province and my province as well. The seal herd was again highlighted as a problem.

I am sure others will pick up the challenge of informing the government to change the legislation to ensure it is acceptable for the majority of people in the country.

[Fisheries and Oceans, April 17th, 2002]

Mr. Speaker, the minister as well as I know all of this has been a complete and total flop. When the Minister for International Trade dropped the ball on the softwood lumber file, the Prime Minister stepped in.

Will the Prime Minister now step into this very important issue and exert his power to convince international countries to live by the rules or else declare custodial management over the total continental shelf?

[Fisheries and Oceans, April 17th, 2002]

Mr. Speaker, the Department of Fisheries and Oceans has only one surveillance vessel to cover the nose and tail of the Grand Banks and the Flemish Cap. No wonder so many abuses are taking place.

In light of the fact that $100 million is being wasted on Challengers we do not need, has the Minister of Fisheries and Oceans requested some of that money for new surveillance vessels that are really needed?

[Copyright Act, April 16th, 2002]

Mr. Speaker, I intend to speak briefly on this matter. The comments made by the previous speaker are very appropriate, particularly when they are coming from somebody who is directly involved in the issue, who is aware of it, who undoubtedly has been the beneficiary of royalties at times and who perhaps has been questioned many more times about whether she really got her share of royalties. I also happened to have some of my works recorded and I am aware of some of the problems.

Section 30.8 of the Copyright Act deals with ephemeral recordings made for broadcast purposes and when it is not an infringement of copyright to produce them. Subsection 30.8(8) deals with the application of this section and states:

This section does not apply where a licence is available from a collective society to make the fixation or reproduction of the performer's performance, work or sound recording.

Section 30.9 deals with the use of pre-recording for broadcast, again when it is not an infringement of copyright to produce. Subsection 30.9(6) deals with application and states:

This section does not apply if a licence is available from a collective society to reproduce the sound recording, performer's performance or work.

Therefore, removing these two sections would remove the copyright protection inherent in licensing regimes that the exceptions in subsections 30.8(8) and 30.9(6) give and would remove the compensation to copyright holders for these recordings.

Many of our artists throughout this great country of ours try to make a living producing their works. Their only hope of gaining benefits from this work is in the royalties that they are paid. If a large broadcasting company is given free rein to pay for a licence to make a recording but is then allowed to re-record and ship to all affiliates, the material could be used, but the producer of the work, the artist or the writer, would only receive royalty on one piece of material or for having it used once. That is extremely unfair and that is something that many are concerned about.

The proposer of the motion, the member for Kootenay--Columbia, in January actually asked the minister with respect to the Copyright Act if subsections 30.8(8) and 30.9(6) allow for royalties to be collected upon transfer of medium, and if not, why not?

The minister responded, and it is very difficult to understand sometimes what is really being said, that subsections 30.8(8) and 30.9(6):

provide that where a collective society can issue a licence to broadcasters for the purpose of reproductions of sound recordings, such as transfer of media, royalties are paid pursuant to the licence.

One of the concerns from the broadcasters' point of view is that if they are to pay royalties by using the material, that is fair ball, but if they have to pay royalties by transfer of recording, whether it be from tape to the different types of digital media that are used, then if they have to pay royalties each time transfers are made it is very unfair to the producers.

It is a complicated issue. The position of the Canadian Musical Reproduction Rights Agency is that such a recording exemption, removing the two sections in question, will allow broadcasters to cut overhead and staff because they can reduce work by just copying the material and sending it out to the various networks instead of each network having to use the material and produce it for its own purposes. The artists and copyright holders in this case would not be compensated. We also argue that since this practice has value for the broadcasters it requires compensation for the creators also.

During the 2000 federal election our party mentioned that we would introduce new copyright legislation which would serve both the creators of content and the broadcasters and publishers. The former speaker made a very interesting point in relation to this. If the charges become excessive, even though the artist, the original creator, will benefit more it might be a detriment for the use of that material. If the amount a broadcaster or agency that plays or uses material coming from a creator has to pay to exercise the right to use that material is excessive, then of course they will refrain from using it, from playing it on the radio or whatever. The loser in this case is the creator. The former speaker's comment was not exactly that half a loaf is better than none, but that a reasonable charge would make it beneficial for everybody. I think that is what we have to keep in mind when we talk about increasing rates.

The current government has neglected key areas of concern, including the management of the impact of digital media and the Internet on intellectual property rights. Therein are the causes of some of the problems we face. It is important that we ensure that copyright holders are fairly compensated for their work. The provisions in the Copyright Act allow for collective agencies, such as the Canadian Musical Reproduction Rights Agency, to collect on behalf of artists, songwriters and composers. It is only reasonable that broadcasters should pay a reasonable fee as compensation for use of an artist's work, but there has to be a happy medium, as I mentioned. We have to be very careful with what we do here because sometimes, as the old saying goes, we can throw out the baby with the bathwater.