Loyola Hearn

[Question No. 142, May 21st, 2002]

Concerning the overfishing by Faroe Island vessels and the closure of Canadian ports: ( a ) what diplomatic representations have been made by Canadian officials in Denmark since January 1, 2001; ( b ) how many have been at the ambassadorial level; and ( c ) what are the dates and nature of each intervention?

[Question No. 141, May 21st, 2002]

Concerning the overfishing by Estonian vessels and the closure of Canadian ports: ( a ) what diplomatic representations have been made by Canadian officials in Estonia since January 1, 2001; ( b ) how many have been at the ambassadorial level; and ( c ) what are the dates and nature of each intervention?

[Transportation, May 1st, 2002]

Mr. Speaker, the present government has completely ignored the transportation needs of many rural parts of the country.

The costs of travel to Newfoundland and Labrador are prohibitive to most. This has a major effect on the central Newfoundland area and on Gander in particular, where there is now only one Air Canada flight in and out each day.

This makes it almost impossible for businesses who depend on the movement of goods and services to compete on a level playing field. Tourists and the travelling public are being hit. The net result is having a negative effect on the economy. This area and other areas of rural Canada deserve better.

The government says these problems are at arm's length, out of its reach, and so will the Gander--Grand Falls seat be on election day.

[An act to amend the Criminal Code (cruelty to animals and firearms) and the Firearms Act, April 22nd, 2002]

Madam Speaker, I do not want to be argumentative because this issue is above and beyond partisan politics, but when the hon. member talked about Canada presenting information at NAFO, yes, we did and it thumbed its nose at us. It rejected the recommendations made by Canada.

He talked about observer reports. The observers are placed on the boat by the country of ownership. They report to their own countries. We get copies of the reports, late most of the time, when they are filed if at all. Two of the abuses are late filings and no reports being filed. Those are serious matters. They are not independent observers. They are dependent on the country for which they fish.

The surveillance part is right on in relation to aerial surveillance but it only covers part of the fishing ground. There is absolutely no surveillance in the northern sector of the waters. Yes, there are some good things happening but we are only scratching the surface. We have to build on it.

In relation to citations and boardings, we do not know if any occur because fisheries will not release the information to anybody. What is so secretive? If we are doing a good job, we should tell people but we have to build on--

[An act to amend the Criminal Code (cruelty to animals and firearms) and the Firearms Act, April 22nd, 2002]

Madam Speaker, again it is no surprise that the issue is the overfishing on the nose and tail of the Grand Banks and the Flemish cap. Unfortunately it will not matter what I say at this stage because the parliamentary secretary will stand and read a prepared text. Whatever avenue I take, I will get the same answer, which is unfortunate.

As times change and the more information we get on this issue, not only the hon. House but people across the country are starting to realize that there is a province called Newfoundland and Labrador. One of the major industries in that province is the fishery. Over the last 10 years, the province has been practically devastated because of abuses to that very resource that has kept the province alive since John Cabot rediscovered it in 1497.

Blatant abuses regularly occur on the nose and tail of the Grand Banks and on the Flemish cap. For those who do not know what I am talking about when I talk about the nose and tail and the Flemish cap, off the coast of Newfoundland and Labrador we have a continental shelf. When the limit was increased to 200 miles, unfortunately some of the continental shelf extended beyond that 200 mile limit.

We have two projections referred to as the nose and the tail of the Grand Bank area, right in the heart of the most lucrative fishing grounds in the world. Slightly outside of that area there is a shelf known as the Flemish cap, also a prolific fishing area. It used to be a great cod fishing area and in recent years has become a tremendous fishing ground for shrimp. Shrimp did not exist there some years ago. However some people think that because of increased activity in the north, the shrimp has been driven by way of ocean currents to the Flemish cap.

Blatant abuses are taking place and we are doing very little about it. We are letting NAFO, the regulatory body, the North Atlantic Fisheries Organization, administer the area. It is not doing a good job. We pay 50% of the cost of NAFO. We are the main beneficiaries of the resource but apparently we have absolutely no say. NAFO has no teeth.

When we found some vessels to be erring in their ways, we could not do a thing with them. We had to send them home hoping the ownership countries would administer some form of punishment. Sometimes they do, sometimes they do not.

Our own surveillance, which was the issue I used, is very slight. We have one patrol vessel. We have great aerial surveillance with provincial airlines, which are state of the art, but they only cover certain areas at certain times. It is on the fishing grounds that we need actual on the ground surveillance where we can board vessels and issue citations. We do not know what is happening because the Department of Fisheries and Oceans will not release that kind of information. We do know that one boat is sometimes in the area and that that is the only protection we have.

[Canada Customs and Revenue Agency, April 22nd, 2002]

Mr. Speaker, the Canada Customs and Revenue Agency recently issued a request for a proposal for the procurement of office supplies for all of its locations across the country. In short, CCRA is seeking to establish a procurement agreement with a single supplier. This practically eliminates small, local businesses in local communities around the country and guarantees business to those with U.S. parent companies.

How can the minister justify this in light of the fact that the department decentralized in the first place to assist the local economy?

[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.