John Maloney

[Violence Against Women, December 6th, 1995]

Mr. Speaker, today we mark December 6 as Canada's national day of remembrance and action on violence against women.

Today we remember, we mourn and we act. We remember the 14 students who tragically lost their lives at École Polytechnique in a senseless act of violence against women. We mourn the loss of 14 of our best and brightest young women and what could have been.

We vow to act with resolve to eliminate abuse against women everywhere. On average, a woman is killed every six days in Canada, often in a home and by someone she knows. The weapon of choice is generally a gun. These are startling, sobering facts, but true.

The government is responding with initiatives, including tougher firearms control, elimination of the extreme drunkenness defence, more effective peace bonds and much more. However, eradication of violence against women requires the full participation of all members of society: government, media, business, communities, individuals and families.

I encourage everyone to join in the partnership to eliminate violence against women. Just do it.

[Income Tax Act, December 5th, 1995]

Madam Speaker, I wish to rise today in the House to speak on Motion No. 497. I would like to congratulate my hon. colleague from Bramalea-Gore-Malton for his hard work in getting this motion to the floor of the House of Commons.

Motion No. 497 reads:

That, in the opinion of this House, the government should amend the Income Tax Act to eliminate the payment of personal income tax on interest from personal savings accounts when the amount of interest is $1,000 or less.

Federal taxes on foreign and domestic income received by Canadians and Canadian income received by non-residents are imposed under one statute, the Income Tax Act. The net income or profit received by Canadians is defined by that act.

Personal income taxes are imposed by both the federal and provincial governments. The federal government has agreements with all provinces except Quebec to collect personal income taxes on their behalf.

The federal government defines taxable income in the Income Tax Act and levies its personal income tax according to the rate schedule in the act. The agreeing provinces then levy their personal income taxes as a percentage of the basic federal tax.

In the last decade, the number of taxpayers has jumped from 10.4 million to 13.7 million. In 1988 there was a sharp drop in taxpayers due to the first year of the tax reform. Under it, a significant number of low-income taxpayers were granted tax relief. Another decline in the number of taxpayers took place in 1991 and was caused by the recession of the early 1990s.

Between 1974 and 1988 the first $1,000 of interest income was exempt. The exemption was introduced in 1974 as a way of counteracting the impact of inflation on the taxation of interest. It was also argued that the exemption reduced some tax evasion, as

those with small amounts of bank interest no longer had incentive to ignore the interest they received when filing their tax return.

Several arguments can be made in support of my hon. colleague's motion. The exemption of the first $1,000 of interest income would promote savings. This is very important for those with relatively modest incomes. Often an investment in a savings account is one of the few investment opportunities readily available to a good number of people.

Under the existing system, by imposing tax on interest earned some consumers are more apt to choose to spend their income in the year it is earned because the interest earned on their already taxed income will be taxed should they save. "Spend it. We are only going to be taxed on it", they cry. This commonly held view dictates against the merits of saving money.

With the proposed motion there would be little distortion between present and future consumption. While there is some controversy about the magnitude of the change on savings resulting from income tax on interest, the general view is that it is a negative effect.

Some of us ask what are the consequences of reducing savings. It is generally felt that a reduction in savings will normally lead to a reduction in capital accumulation and in the long run to a reduction in output per capita.

In light of shrinking government budgets and the upcoming review of our role in the provision of pension income, we have and continue to encourage Canadians to invest in their retirement. There are deductions for RRSP contributions, but why is there no provision for savings account or Canada savings bond interest?

I realize that RRSP interest is taxed upon withdrawal, albeit generally at a reduced rate. There are real limitations in the deferral of taxation and these implications translate into economic choices.

Another argument in support of the motion is that it will help Canada's senior citizens. After the $1,000 tax exemption was eliminated in 1988 there were some very convincing statements in favour of keeping the exemption, especially as it related to senior citizens.

In the 1980s over 80 per cent of our taxpayers over the age of 65 claimed this exemption. It was said that the elimination would have a disproportionate effect on senior citizens. Almost half the current generation of Canadian seniors, about 50 per cent, live at or below the poverty line. A small percentage, 5 per cent only, across Canada enjoy incomes of $40,000 or more. The remaining 45 per cent had hoped during pre-retirement years to invest in something that would act as a supplement to their pension cheques. This 45 per cent of Canadian senior citizens over the age of 65 would benefit by the restoration of the $1,000 investment income deduction.

A third argument is that the exemption would compensate for falling interest rates. Although economic activity may in general be stimulated by falling interest rates, those whose incomes depend on interest bearing assets are being hurt by falling rates. Seniors have been hit hard in recent years by such falling interest rates.

While there are benefits for seniors and an encouragement of savings I also have some serious concerns about the motion. The proposal to exempt the interest on savings accounts runs counter to current trends toward increasing tax revenue. If all bank interest were tax exempt, the lost tax revenues would certainly be significant.

In the mid-1980s the $1,000 exemption cost the federal government about $900 million in loss tax revenue. In 1992, for example, tax filers declared over $18 billion in bank interest. This figure would be much higher if the exclusion were only for interest earned at financial institutions, as investors would adjust their portfolios to take advantage of the tax break.

Recently Revenue Canada instituted reporting changes for financial institutions. Beginning with the 1995 tax year, these institutions will be required to issue T5s for interest income at $50, down from the current $100 limit.

This new measure is meant to limit tax evasion. Some taxpayers with interest below $100 have simply ignored that income for tax purposes, forgetting or ignoring that every interest dollar earned is to be included as income. However the new change seems to indicate the government considers bank interest an important source of tax revenue.

Revenue is obviously an important component of our deficit reduction policy and reducing revenue runs counter to this necessary policy.

Another concern I have with the motion is the difference in treatment of earned income and non-earned income. Those who work for minimum wage are taxed on the first dollar they earn. Those who earn income from interest revenue are treated equitably under the existing system. I understand that invested money was once income and was likely taxed at the time it was earned, but the interest too is income. Allowing exemptions for interest income will disproportionately benefit seniors. How can we balance this against earned income so that it is socially equitable?

I will also address a comment by my colleague from Rimouski. The bill indicates interest earned on savings accounts. This would include all savings accounts and it would be an accumulative effect. It would be the total of the interest that would be considered an income. We could not spread our savings over five, six or ten

different accounts. The exemption would apply to the full income no matter where it was.

While I have some serious concerns about the bill, I generally speak in support of it because the investment income exemption is one of the few tax initiatives that would reach out and touch most Canadian citizens, including my constituents of Erie, rather than just a select group of investors.

Taxpayers are crying out for tax relief and tax reductions, and understandably so. This initiative could be a possible means of partially satisfying these demands.

[Balkans, December 4th, 1995]

Madam Speaker, peacekeeping is one of the strongest and most enduring traditions of Canada's foreign and defence policy. Canada is justifiably proud of its distinctive record in preserving world peace and fostering global security. In fact we are the only country that can claim to have participated in almost every peacekeeping mission organized under auspices of the United Nations.

Canada's peacekeeping commitments command the respect and admiration of the world community, a commitment that we parliamentarians are examining once again under the issue of a renewed participation in the peacekeeping force in Bosnia, as we should and as is our responsibility.

Canada has taken a leading role in the efforts to bring about a peaceful end to the conflict in the Balkans. Canada was among the first countries to call for a concerted international action and Canadian forces have served with distinction since 1991. Let us not ignore that their participation was done at considerable cost to Canada. Indeed, 10 Canadians were killed on this assignment. Let us examine this request for a further commitment very carefully.

Incredibly, the warring factions in Bosnia made a peace agreement a few short weeks ago. Requests for assistance to provide a stable forum for this peace initiative to mature and grow have been made. Our values of peace, freedom and democracy and our aversion to intolerance, terrorism and destruction cry out for our participation. Canadians do not simply stand for these ideals; they act on them and sacrifice for them.

Fifty years have elapsed since the end of the second world war, the war to end all wars. What have we learned? I wonder.

Over the last four years unthinkable horrors we thought were banished forever have been seared into our minds once again: the degradation of skeletal prisoners caged behind barbed wire fences; senseless murders of defenceless women and children; cowardly killings of men and boys in mass graves; ethnic cleansing; sickening destruction and obliteration of homes, of neighbourhoods, of entire communities where playgrounds and marketplaces became war zones; endless lines of refugees stumbling in misery and despair. The picture is not pleasant.

Our veterans of two world wars fought and too many gave their lives to guard against such atrocities. Can we now do nothing less?

The Muslims, Croats and Serbs have miraculously hammered out a peace settlement to put down their arms, to seek out a prosecute war criminals, to protect human rights, to build for the future peace and democracy.

They have asked for assistance, for our confidence and support to implement the Dayton peace agreement. Should we participate

in peacekeeping forces that will facilitate their efforts? The only conceivable response is yes.

Canada was a founding member of and a continuing major contributor to NATO. When a situation becomes difficult Canadians do not renege on their responsibilities. Canadians do not turn their backs on their allies. Canadians stand up and are counted.

Canadian forces are familiar with the geographical terrain of Bosnia. They know the people, their culture and their differences. Canadian forces are well trained and competent. They are not only well suited, they are ideally suited for this deployment.

It is also interesting to note that to date 19 non-NATO countries including Russia have also indicated a willingness to participate. These countries share our goals. We must also share their burden. These countries realize that peace and stability in Europe are essential for world security.

Bosnia lies nestled in the middle of a diverse European continent, in close proximity to some of the fragile democracies of the former iron curtain countries. Stability must come to this region to ensure the flames of war and all the devastation they bring do not lick beyond the Bosnian border. Let us not forget the spark from the Balkans that ignited the first world war. Let us not forget this lesson from history. We have seen Europe in flames. Never again.

The stability provided by the NATO presence will allow civilian agencies from around the world to commence programs of humanitarian relief and reconstruction, to provide food, shelter, clothing and medicine, to reconstruct roads, schools and hospitals, to reunite families, to heal the wounds of war, to allow the people of Bosnia to pull themselves from the past and to build for a future in peace.

There will be considerable cost and expenses associated with this military exercise; this in an era of necessary fiscal restraint and deficit reduction. Responsible Canadians are prepared to pay this price. They are aware of the quarter of a million men, women and children who have been shelled, shot and tortured to death and the campaigns of rape and ethnic cleansing. They are well aware of the price of failure of this peace accord.

Let there be no mistake, deployment of Canadian troops is not without risk and may very well involve casualties. Every effort will be made to minimize such risks but we must be prepared nonetheless.

One of the most difficult decisions the government has been called on to make is to place the volunteer men and women of our armed forces in situations of potential danger in far off lands when the values of our nation require it.

I urge the government to join this partnership of peace. Let us stand and be counted in this period of crisis once again. Let us stand for peace and freedom. Very simply, it is the right thing to do.

[The Environment, November 27th, 1995]

Mr. Speaker, A. K. Wigg Elementary School of Fonthill in my riding of Erie took the first place award out of approximately 80 entrants in the Niagara Environmental Technology Exposition.

The parents, students, staff and members of the community have embarked on a unique environmental project to transform the school property of six acres into an environmentally friendly green space.

The environmental nature area will include trails, wildlife, habitat facilities including a butterfly garden, plantings of Carolinian forest trees and shrubs, as well as woodland wildflowers and ground cover, thereby returning the area to its natural habitat.

The outdoor educational classroom and amphitheatre will have weather station features, compass, sundial, sculptures of cloud formations and windmills. Environmental education will be taught from the natural habitat right outside the classroom window.

I know, Mr. Speaker, you will appreciate A. K. Wigg's plan for enhancing the environment, increasing environmental stewardship, augmenting environmental education and positively involving the community in an excellent project. It is innovative and demonstrates the proactive approach that all Canadians should take to the environment.

[Bank Act, November 27th, 1995]

Mr. Speaker, I have a few remarks to wind up my address to the House.

Bill C-100 takes important steps to ensure that Canada's financial institutions enjoy effective, independent corporate government yet allows OSFI to intervene in the composition of senior management and boards when the institution is experiencing financial difficulty. Clearly it is often when institutions encounter financial trouble that management and boards need to be carefully scrutinized.

The current minimum one-third of unaffiliated or independent directors sitting on the board of a financial institution will no longer be permitted to hold a seat on the board of their unregulated parent. This will help ensure that there are directors of institutions who will focus on the institutions' interests alone. This measure will be particularly important for ensuring independence and objectivity in the management of institutions in trouble.

For institutions that are in trouble, the legislation will empower the superintendent to veto the appointment of directors and senior officers of that institution. This is a very limited provision as it applies only at the appointment stage and only when the institution is in financial trouble.

Incidentally, a similar authority exists in the United States. It is an important power since the institution in trouble needs to rely on its board to make important decisions about the future of the company.

My remarks so far have focused on the measures to give OSFI further power to enhance the quality of corporate governance. It is also important to note that this legislation recognizes that effective corporate governance is not just one-sided.

We should appreciate that Bill C-100 includes measures that will help boards perform the all important function of overseeing management. An example is the guidelines for supervisory interventions that are being set out. These guidelines identify four stages of increasing intervention available to the superintendent, culminating in the power to close an institution.

By knowing what stage their company is in and the penalties involved, directors will have both a tracking measure and a set-up to guide their dealings with management.

As well, the legislation includes providing the Canadian Deposit Insurance Corporation, CDIC, with the authority to apply varying deposit insurance premiums based on risk factors. This too will act as a source of information for directors who will be free to inquire why their institution may be paying more than the base rate.

I have covered a fair amount of ground. I will close by putting the legislation into context as I see it.

Bill C-100 is being put forward for the continuing success of a supervisory and regulatory system which must evolve with market trends and respond to current experience both here and in the rest of the world. The thrust of the legislation clearly is safety and soundness. These improvements in safety and soundness build on the recent Canadian experience with financial institutions that have failed.

By giving our approval to Bill C-100, we will be honouring a responsibility to help maintain what is truly a world class financial system. This is a goal we can all support irrespective of partisan politics. I urge all members of the House of Commons to support Bill C-100.

[Bank Act, November 24th, 1995]

Mr. Speaker, I welcome the opportunity to add my voice to those of my hon. colleagues in the government in support of Bill C-100.

The government has taken the position that the state and its officials should not try to do what others can do better. This is particularly true when it comes to the world of business and when it comes to making sure that we do not stand in the way of private sector dynamism. Furthermore, never in Canada's history has it been so important to control the cost of government. Our fiscal situation demands it and so do Canadians, who are suffering from tax fatigue.

I raise these points because they represent important underpinnings for some of the measures before us: specifically, the actions that Bill C-100 will implement regarding corporate governance.

Underlying the changes to the governance framework is a very basic assumption. The simple fact is, no system can forestall any financial institution failure unless it is given the authority and resources to oversee all management decisions and unless institutions are severely restricted in the loans and investments they can make. However the price of such a failure safe system, even if it did work which I doubt, would be to strip that industry from contributing to the dynamism, growth and evolution of our economy.

This is where the issue of cost also raises its head. To try and implement greater micro-management of the financial sector will

require a veritable army of additional auditors and regulators. This is the approach used in the United States. However, at a time when governments must downsize, I do not see this as an option anyone here wishes to embrace.

The alternative is to take a governance oriented regulatory approach by putting greater onus for the well-being of financial institutions on the management and the board of directors of financial institutions. This is an approach employed by the United Kingdom regulators.

Whether either approach could be characterized as a more efficient system of governance is difficult. Each system functions at opposite ends of the spectrum and it would be difficult to advocate that one approach was somehow foolproof in preventing failure, or better than the other, given the global environment in which institutions must operate.

As the Secretary of State for International Financial Institutions has argued so well, and I concur, our supervisory and regulatory systems cannot be positioned as a mechanism or regime dedicated to preventing an institutional failure. If we tried to do that, we would limit the potential well-being of the financial sector and its ability to serve the economy and Canadians. Rather, any specific supervisory approach should be built around the fiscal, business and economic environments. It is important that the regulatory tools be responsive to changes in these environments.

The changes in Bill C-100 to the governance for financial institutions strike a balance. They are not intrusive. Rather they clearly recognize that the role of the Office of the Superintendent of Financial Institutions is not, and cannot be, to micro-manage financial institutions. They give OSFI due authority but not excessive authority to intervene in the governance of financial institutions but only when circumstances warrant.

I should also highlight that the changes in Bill C-100 build on and enhance changes introduced in the wide ranging reform of financial statutes of 1992. It was during the 1992 reforms when the statutes were revised to require that no more than two-thirds of the directors could be affiliated with a financial institution. In other words, at least one-third of the directors would have no relationship with the company and as a result, would not in any way be beholden to management.

The 1992 reforms also implemented the requirement that important board committees, such as the audit committee, be comprised of a majority of unaffiliated directors. These were valid and valuable changes, but they left some unfinished business that Bill C-100 will complete. They enhance the balance which would place onus on management and directors for their own governance and yet allow the regulator to intervene where circumstances warrant.

[Lincoln And Welland Regiment, November 24th, 1995]

Mr. Speaker, I am sure you will be pleased that a clerical oversight that deprived the Lincoln and Welland Regiment of two World War II battle honours has finally been corrected.

Regrettably, the regiment failed to receive honours for the unit's final two battles when scrolls were presented to Canadian military units in 1951. The oversight was recently detected, and scrolls citing exceptional conduct and courage at the Battle of Kusten Canal in April 1945 and the Battle of Bad Zwisehenahn in May 1945 were presented at a reunion for veterans.

Seventy-two men of the regiment died and approximately a hundred more were wounded in these two campaigns. These two scrolls recognizing the regiment's efforts in these two very intense battles during the closing days of the war are proudly placed on the armoury wall beside 16 others.

Peace and freedom were purchased for us with the sweat, toil, tears and blood of those like the Lincoln and Welland Regiment who walked the road before us. My congratulations go out to the Lincoln and Welland Regiment for this well deserved honour. My sincere appreciation goes out to veterans everywhere.

[Take Our Kids To Work Day, November 8th, 1995]

Mr. Speaker, I would like to announce the addition of a high powered office consultant to my constituency staff for one day, Mr. Travis Dolinski, who is participating in the program called Take Our Kids to Work.

Today in Ontario over 153,000 grade nine students are at work with a parent, guardian, relative, friend or volunteer host. They are all experiencing possibly for the first time the challenges of the workplace. They will spend a day on farms, in hospitals, factories, offices, retail stores and many other places of work.

Often students do not fully understand the links between education and work and how important successful work is to their future. Through this exposure they will see the value of a good education in our rapidly changing workplace. They will begin to think about the choices they will have to make and the paths they must follow

to meet their career goals. They will also better appreciate what their parents do to provide them with the necessities of life.

With the co-operation of Erie riding's business and industry, our youth will have an informative, fascinating and stimulating experience. I encourage my colleagues to support this program or similar ones in their ridings.

[Quebec Referendum, November 2nd, 1995]

Mr. Speaker, Canada has once again shown world leadership. We have conducted a civilized debate on the most serious subject a nation can face: its own existence.

Where other countries have resorted to armed violence and devastation to impose change, we have conducted a spirited but peaceful campaign with the ultimate decision being made at the ballot box. Let us all accept the decision made by the people of Quebec with tolerance, openness and mutual respect. Let us promptly respond to the need for change to our Confederation fairly and equitably for all provinces and territories.

Let us work out our differences in the spirit of co-operation and reasonable compromise. That is our trademark; that is the Canadian way. Let us enter a new chapter of our illustrious history and again face the world with confidence and pride. O Canada, we all truly stand on guard for thee.

[Agreement On Internal Trade Implementation Act, November 2nd, 1995]

Madam Speaker, I am pleased to have the opportunity this morning to speak to Bill C-88, an act to implement the agreement on internal trade.

The piece of legislation is historic. With it we will be implementing within the federal jurisdiction the obligations of the federal government under the first comprehensive domestic trade agreement in Canada since the British North America Act, 1867.

In the 128 years since 1867 the Canadian economy has grown and evolved in ways never imagined by the Fathers of Confederation. The federal government still has under section 91(a) of the Constitution responsibility for trade and commerce and specifically interprovincial trade.

Since 1867 the world has changed significantly. The provinces have assumed prominent roles as influencers of economic growth and the regulation of trade and commerce within their respective territories. As a result, trading arrangements and regulations have developed in an ad hoc way often in response to a particular regional need.

Many of those measures have, often unwittingly, created barriers to trade as the impact on the free flow of goods, services, people and capital within Canada. Such barriers can lead to the inefficient use of resources and limit the ability of industry to take advantage of the economies of scale and to maintain competitive market positions. The result has often been to reduce the competitiveness of Canadian business and to adversely affect the Canadian economy.

There have been many examples of such impediments: different professional and occupational standards in different jurisdictions which limit labour and mobility between provinces; selective listing policies by some provincial liquor boards that discriminate against products from outside their provinces; different transportation regulations, safety codes, inspection arrangements and vehicle standards in each province which make it difficult for truckers to cross provincial boundaries; government procurement polices that give preference to local companies; provincial incentive programs for industry development; and construction procedures that differ from jurisdiction to jurisdiction. These are some of the more

common examples of barriers and impediments to interprovincial trade and commerce as exist in Canada.

A recognition that the patchwork of regulations, standards and other barriers to interprovincial trade which have grown around us was an unacceptable feature of the domestic market in Canada. It led governments to agree to negotiate the agreement on internal trade. Growing concern and evidence that these barriers to trade seriously affected our ability to remain competitive in the international trading environment fuelled the urgency of establishing a new trade regime in Canada: one based on more interprovincial trade; one that would not impede the movement of people and investment within the country; and one that would allow for co-operative approaches to the resolution of domestic trade disputes.

Bill C-88 represents the federal government playing its part in doing just that. This bill establishes the framework that will allow us to continue to work to create a trading regime that will remove barriers to interprovincial trade in goods and services; that will reduce impediments to the movement of workers and investment capital between provinces; and that will provide a forum for the resolution of individual trade disputes without resorting to the courts.

The process leading up to this bill has been a long one. It has involved many people and considered many issues and perspectives. In addition to the federal, provincial and territorial governments at both the ministerial and official levels, representatives of the private sector have been actively involved in the process.

Representatives of the private sector and of business interests in particular, have kept the pressure on us at all levels of government to deal with the problems of interprovincial trade barriers and the consequential economic costs to Canada. The Canadian Manufacturers Association has estimated that barriers to trade in our domestic market cost the Canadian economy over $7 billion annually in job and income loss.

There has been a long and thorough process under way to identify problem areas and to develop practical, workable solutions. A key characteristic of the process has been the spirit of co-operation which all the parties involved have demonstrated. In fact, the agreement on internal free trade is an outstanding example of what can be accomplished within a co-operative framework in Canada.

It is also important to note that political parties of all stripes and all regional perspectives have been part of the process.

One fundamental point agreed on by all the parties in the negotiation process is a recognition that a more open trading environment will be good for Canada.

While the process was of long duration, it was characterized by co-operation and a sense of shared mission. The agreement represents a major step toward our shared objective of improving the domestic trading environment and to eliminating barriers to trade, investment and labour mobility in Canada.

The agreement on internal trade provides for the following: a rules based system for trade within Canada; a dispute settlement mechanism to resolve issues on internal trade matters; a standstill on new barriers; commitments to future negotiations to broaden and deepen the agreement; a code of conduct to prevent destructive competition from investment; increased labour mobility; and a commitment to reconcile standards related measures. These are significant achievements.

A key part of this agreement, indeed a key part of any trade agreement, is in how it resolves disputes. This agreement represents a unique solution to our unique Canadian circumstances. It has a made in Canada solution and it provides the basis for promoting compliance through consultation and co-operation rather than by resorting to more formal court based procedures. It is built on rules that draw on established concepts in the international trading environment, but has been refined for use in a Canadian context.

In the international trading environment there are several examples of accords and agreements which set out rules for trading between nations. There are many, many different models for settling disputes and achieving compliance. Well known examples include the General Agreement on Tariffs and Trade, commonly known as GATT, and now the new World Trade Organization, the WTO, the European Union and the North American Free Trade Agreement.

There have been suggestions that we in Canada should just use one or another of these models in the Canadian situation. These suggestions overlook the important issue of the sovereignty of the parties to an agreement, as well as the degree of political control that the parties themselves are willing to give up to a compliance mechanism.

In the case of the European Union for example, the central authority is supreme over that of the individual member countries. The European Union accord is a comprehensive agreement which gives the central governing authority the overriding power to propose and enact legislation that applies to all parties. That system is based on a legislative and judicial framework, so that a business firm or an individual who feels aggrieved by an action under the law of a particular nation can bring the case to the European Union council as the supreme authority.

Thus the parties to the European Union agreement have relinquished their sovereign authority in particular areas of trade law, competition policy and government support for industry and have agreed to accept a formal dispute settlement mechanism with the power to enforce decisions. If we applied this model to Canada, it would mean that the federal government would exercise authority over all the other jurisdictions. I wonder if those who recommend the European model are aware of that.

The General Agreement on Tariffs and Trade, GATT, offers a different model. Under GATT, member nations do not relinquish sovereign authority and disputes are brought forward by a sovereign government representing its national interest. Disputes are referred to an ad hoc panel that can recommend that a trade policy or course of action be changed, but the recommendation cannot be enforced in law. Thus parties to GATT retain their sovereign right to enact and enforce laws within their own country, but do not have recourse to an enforcement mechanism to change non-compliant behaviour outside their own boundaries.

The North American Free Trade Agreement is closer to the GATT model in that sovereignty remains within the national government of each state and disputes are brought forward by governments to the NAFTA commission, which is made up of the responsible ministers of each country who will set up a panel to consider specific disputes.

Whereas parties to the NAFTA retain sovereign authority with respect to enacting and enforcing national legislation, they have agreed to accept the authority of the NAFTA commission to administer retaliatory measures on behalf of aggrieved parties as enforceable sanctions. Thus, under NAFTA, parties remain sovereign states but have effectively ceded some of their sovereignty.

While all of these models have useful elements, none was applicable to the Canadian situation.

The internal trade agreement created a committee on internal trade to oversee its implementation and continuing operation. All governments who are party to the agreement, that is the federal, provincial and territorial governments, are members of the committee.

The committee will be supported by a secretariat which is to provide administrative and operational services. Part of the mandate of the committee is to assist in the resolution of disputes arising out of interpretations and applications of the agreement.

The working philosophy of the committee and of the agreement is to use consultation and conciliation in dispute resolution. Disputing parties will be encouraged to make every attempt through co-operation, consultations and other forms of dispute resolution to arrive at a solution.

I would suggest that Bill C-88 should be supported by all members of this House. It is a progressive measure, a progressive law. It will be good for the country. It will be good for the constituents of Erie riding which I represent.