House of Commons photoWon his last election, in 2004, with 48% of the vote.
Privilege December 3rd, 1998
Mr. Speaker, in summary, the point I am trying to make is that every minister ought to honour this House and give to this House information concerning a change of policy or a change in direction.
It is a major shift for the minister of public works to say that the parliamentary precinct will now have, as a co-ordinating body, a group of people from outside this parliament to advise the minister. He should have said that in this House. That is my point.
Privilege December 3rd, 1998
Mr. Speaker, I would like to rise on the same question of privilege that the hon. member opposite has raised.
It is in the context of what he said that I wish to address the House. In particular, it is the pattern that is being developed that I find a little disturbing.
It seems to me that there has been more than one breach of the privileges that ought to be observed for members of parliament. We are here to represent the people and to represent the best interests of the people, and also to be judicious in the way in which public funds are spent.
What the minister announced was in direct agreement with what the auditor general announced two days before. He asked that such an advisory board be established. That advisory board was suggested many years before. In 1992 a similar suggestion was made by the auditor general and nothing was done. To the extent that the minister is doing what the auditor general suggested should be done, that is fine. I do not disagree with that. But I do disagree with the fact that he took away the privilege of letting members know what the government is doing in this regard.
We are not dealing with a $100 million expenditure. According to the auditor general's figure, we are dealing with a number of $1.4 billion. Reparations to the parliamentary precinct were originally approved, if my memory is correct, at about $250 million.
To date, projects worth $423 million have been approved. Not all of that money has been spent, but the projects have been approved.
Recently the minister appeared before the committee and suggested that there would be considerable additional expenditures.
Now the auditor general has said, upon examining the issue, that it is going to be $1.4 billion. That is no small amount. That this group should now act as an advisory board I think is a good thing. However, the minister should have made the announcement here in this House. That is the issue.
A couple of days ago the House leader for the official opposition said that there are leaks happening in the committees. He does not like those leaks taking place and neither do I. I am sure, Mr. Speaker, that you do not like what is happening. In fact, you expressed yourself to that effect and I commend you for doing that.
Before that we had the Minister for International Trade announcing the creation of a Canada-China parliamentary association before parliament had even created it.
The government appointed Mr. Landry to the millennium scholarship foundation at a time when there was no legislation before the House to set up the foundation.
There was a similar case with the Canadian Wheat Board. Once again the government began implementing measures before the measures were approved by parliament.
I raise these issues because there is a pattern developing.
When this parliament began, the government set up a CPP board before the legislation authorizing this board was adopted by parliament.
The Speaker said on November 6, 1997 that “the dismissive view of the legislative process, repeated often enough, makes a mockery of our parliamentary conventions and practices”. That is the issue that I wish to address.
The sole source contracts that were addressed by the auditor general is another issue. There were $4.4 billion in sole source contracts and 85% of them—
Canada Post December 2nd, 1998
Mr. Speaker, the minister of public works last week assured the House that postal franchisees would not lose any money as result of their new deal with Canada Post. Yesterday Canada Post cut the commissions to the postal franchisees by more than 50%.
How does gouging over 50% of the commissions to postal franchisees live up to the promise that they would not lose any money?
Royal Canadian Mint Act November 30th, 1998
Mr. Speaker, I thank my colleague for entering into the debate in the direction that he went. I thought his arguments were rather lucid and very concise on the three points. I thought they were excellent.
I would like him to explain a bit further how he accounts for the potential shift in terms of administration in the mint today. I think he would agree that the mint administration today is exemplary. It has turned the mint around. It is now a profitable organization. It has good personnel relationships. It has a good operating plant. It is doing the job correctly.
With that kind of consistency and quality of management all the way we would not have to be too concerned about the policy, but the bill shifts the policy and gives all kinds of power to anyone.
The question becomes what sort of person will take over the management of the mint which is operating very successfully today. I have nothing but respect for the mint master, but the question is what happens if the mint master moves aside.
I wonder if the member could talk about that a little.
I would also like him to address the question of what happens if something goes awry and some of the things we have mentioned here today actually take place. How does one reverse legislation once it has gone to a point where this becomes a pattern, almost a culture that develops within a crown corporation? How does one change that culture once it is in place?
Royal Canadian Mint Act November 30th, 1998
Mr. Speaker, I was pleased with the hon. member's comments, particularly the rational way in which he analysed the bill.
How would he apply the general principle that government should do those things and only those things that the people cannot do as well or better themselves? This is a fundamental principle. The government should do things. I agree with the hon. member that there are things the government can do which the people cannot do for themselves or cannot do as well for themselves. Could he elaborate on that a little more?
Some of the crown corporations become an end unto themselves. They serve their own ends. They are no longer filling a gap or doing that which the people cannot do as well. They are taking jobs away from people.
It is this principle we have to look at, particularly with regard to proposed clause 2 of the Royal Canadian Mint Act which expands those powers to where the act says the mint can buy anything, do anything, and so on.
Royal Canadian Mint Act November 30th, 1998
Mr. Speaker, I would like to congratulate the hon. member who just entered the debate. I thought his analysis of the function of the mint was very interesting and very good.
However, could he address the question of whether he finds his support of the bill, generally, not to be inconsistent with his criticism of what the mint is doing?
Would he agree that clause 2 of the bill, which amends section 4 of the Royal Canadian Mint Act, expands rather dramatically the power of the mint? It allows precisely what he just said in his speech. He disagrees with what the mint is doing, mainly getting into the coin plating business. This bill allows that to happen and gives the powers to the mint to do precisely that.
While he may disagree with the mint doing that, the legislation being proposed permits the mint to do precisely what he says he does not want it to do.
That is exactly the point and why I object to that clause. The hon. member, on the one hand, says he disagrees with that; on the other hand, he supports the amendment. Could he clarify the apparent contradiction here?
Royal Canadian Mint Act November 30th, 1998
Mr. Speaker, I thank the hon. member for bringing some decorum back to the House.
The point we need to recognize is that there are some questions above those about goals, philosophy, focus and management style. There are other questions which need to be addressed.
Does the crown corporation complement or does it compete with the private sector?
Particularly significant in light of this question is the recent broadening of the scope of crown corporations to make them self-reliant. The only way to do that has been for crown corporations to go after profitable businesses in the private sector.
Let me give one good example, the Business Development Bank of Canada. It recently published an ad in the Globe and Mail which presents to the people of Canada a guaranteed GIC backed by securities on the Japanese stock market. The bank says that if the GIC is kept to maturity, seven years, the purchaser's capital will be guaranteed. Regardless of what happens to the market, there is a guarantee that the capital will be returned. In the meantime, the interest paid on the GIC will be directly related to the performance of the Japanese stock market.
What has the Business Development Bank of Canada got to do with this kind of thing? It is not a deposit taking institution. It was created to help small business people and, in particular, to develop the knowledge based sector.
Looking at the record of what the Business Development Bank has done in terms of supplying capital to small business and comparing that to what the chartered banks have done, we discover that in proportion to the amount of money it is lending out the Business Development Bank falls short. The chartered banks are actually doing a better job than the Business Development Bank.
It is a crown corporation. What is it doing? It is not meeting the objective for which it was originally set up. It is doing something else. It is getting into an area that is currently being served by other organizations in the private sector.
We need to ask a second question. Does the crown corporation move away from the high risk or low profit areas and enter into more profitable areas? I can talk about a couple of issues.
I want to refer particularly to the credit unions and the Farm Credit Corporation. When the credit unions appeared before the committee they said “Because the Farm Credit Corporation is under so much pressure to meet its own bottom line as an institution, it is going after that kind of business in the very markets in which we have always been doing that. That is a real difficulty for us. It is not that we will not sit down and work with them on this. However it is one thing to talk about partnering and another thing to get down to the nitty-gritty of what partnering means and what role each partner is to play”.
The credit unions, private organizations, are in direct competition with the Farm Credit Corporation, a crown corporation. They are essentially doing the same thing. FCC is now moving into an area that is not as risky and is not doing what it was originally set up to do.
There are all kinds of examples like that. We obviously do not have the time to get into that at this point. We need to carefully think through what the role of crown corporations really is.
I want to focus particularly on the final part of this paper. Two persons provided expert advice and this is to the credit of the parliamentary secretary.
Professor Trebilcock of the University of Toronto told the committee which deals directly with the question before us:
It is not sufficient in most policy contexts, including the one with which you are concerned, to identify simply a case for government intervention and then leap from the premise that some form of government intervention is required to the view that the form of the intervention should be through a crown owned enterprise. Governments have a vast array of policy instruments at their disposal. In every case, we must ask: Is this the appropriate choice of instrument to realize this particular policy objective?
In our 1982 study, we were particularly interested in this institutional boundary issue. Rather than using crown corporations, why does the government not increase its use of tax regulation or subsidization of private sector firms so as to align the conduct of these private sector enterprises with government public policy objectives? To put the question more bluntly: Is there ever a case for a crown corporation in any context? Conversely, could one not imagine governments achieving their policy objectives through appropriate choice of tax, subsidy or regulatory instruments directed at the private sector?
Then he went one step further. He said:
Whether there is a gap which should be filled, (and then what policy instrument is best adapted to filling it) to my mind should turn on serious evidence of market failure, e.g. monopoly, public goods/externalities, information failure, asking in every case (a) whether the government can do better than the private sector in resolving the demonstrated market failure and (b) what policy instrument is likely to do this at least cost and with fewest negative spillovers for other policy objectives. For example, is there insufficient competition among private sector financial institutions for SME business? Can a government agency better assess the prospects of a high technology enterprise than the private sector? Are there positive social or economic spillovers (externalities) from high technology activities that private sector agents cannot fully capture, leading to socially suboptimal levels of private investments in such activities? Can a government agency reduce the fixed transactions costs faced by private lenders in making small business loans?
Those are key questions from a key scholar in this particular area.
Then comes a practical application from Peter Kemball of Acorn Partners who said: “It is a very basic, philosophical problem, if you will, grounded in economics, and I just happen to have concluded, having watched things over the years, that while there are some very good things that have happened as a result of these organizations”—crown corporations—“those things could come about in other ways”.
He went on to say: “In fact, that is what the hon. Minister of Finance was saying in relation to a different environment. We do not need the public sector to make those things happen in a general policy sense. In the specific sense, yes, it is quite true that a particular deal may not have come together in the absence of such an organization. However, by and large, it is a policy failure. We do not have our overall rules right. That is why we now have these organizations”.
The committee recommended that certain public policies such as some aspects of the tax system, public programs such as the Small Business Loans Act and public institutions such as crown financial institutions be reviewed with an eye to changes which could be made to encourage the development of new initiatives in capital markets.
In conclusion, the important thing here is to recognize that the mint is a crown corporation and that there has not been an in-depth analysis of the need to change the act. There has not been a demonstrated need to increase the $50 million to $75 million in borrowing power. Why? Because at the moment it only has a $14 million loan outstanding, $9 million of which is long term and $5 million of which is short term borrowing.
Sure, it has an opening to borrow to quite a degree and it does need to borrow from time to time to meet its cashflow requirements. I agree with that and support it. However, that does not mean it can now borrow $25 million more, except for one thing, the mint is now moving directly into competition with institutions, organizations, private sector businesses like Westaim. Because of that, it has added an addition to the mint in Winnipeg at a cost of $30 million. Lo and behold, if we take the $14 million it has now and add the other $30 million to it, we are up to the ceiling. Now it needs $25 million more for cashflow.
I can understand that but this means that the mint has left its primary focus, that of minting coins, and gone into the manufacture and plating of coins which cuts directly into the business of a private enterprise in Fort Saskatchewan. Constituents object to that.
We expand the power. We have not even talked about how the mint's power has been expanded. By allowing it to have the powers of a natural person it is able to form subsidiaries and buy other businesses. It can do virtually anything it wants. That is fundamentally in error and not consistent with the purpose and role of a crown corporation which is to fill a gap that the private sector is not filling and to serve needs that are not being served in other ways.
That is why I am objecting. It has nothing to do with the administration of the mint or its functioning today.
Royal Canadian Mint Act November 30th, 1998
I am really pleased, Mr. Speaker, that the minister for trade has finally woken up and listened to what is going on on this side of the House. It is about time.
Royal Canadian Mint Act November 30th, 1998
Mr. Speaker, they sleep all the time. That is why they have not analysed this in any depth. They still do not know what this bill is about.
Royal Canadian Mint Act November 30th, 1998
I'm so glad. At least I am impressing somebody. The hon. parliamentary secretary should really be listening.