Werner Schmidt

[Petitions, October 28th, 1998]

Mr. Speaker, the second petition asks that the Government of Canada amend section 7 of the Canadian Charter of Rights and Freedoms to (a) recognize the fundamental rights of individuals to pursue family life free from undue interference of the state and (b) to recognize the fundamental right, responsibility and liberty of parents to direct the upbringing of their children, and that we urge the legislative assemblies of the provinces to do likewise.

[Petitions, October 28th, 1998]

Mr. Speaker, I have two petitions that I would like to present to the House. The first petition asks the government to bring in legislation in accordance with the provisions of the Referendum Act, 1992, which would require a binding national referendum to be held at the time of the next election to ask voters whether or not they are in favour of government funding for medically unnecessary abortions.

[Apec Inquiry, October 23rd, 1998]

Mr. Speaker, the Deputy Prime Minister has charged some people here as being pretzel-like. I will tell this House where the pretzel is. The pretzel is over on that side where truth and integrity have been put into jeopardy. We now have the commissioner saying “Look, I have to be investigated because I deny that I ever said anything wrong”. Canadians are waiting for truth and justice to take place.

When will the Deputy Prime Minister appoint an independent judicial inquiry to look into things, get the truth on the table, establish integrity and get fairness and justice into this inquiry?

[Royal Canadian Mint Act, October 23rd, 1998]

Madam Speaker, it is an honour to rise to debate this bill. The hon. minister alluded to the pride that Canadians have in the various minted coins we use and in those coins that are collected by investors and coin collectors. We are all proud of the Canadian coins.

I will address certain aspects of the bill. I will first look at the object of the Canadian mint. Then I will look at the present legislation and the provisions that currently exist for the operation of the mint. Then I will compare those provisions with what the bill is proposing to change.

I draw the attention of the House, for review purposes, to the object of the mint. According to the act that established the Royal Canadian Mint, the object of the mint is “to mint coins in anticipation of profit and other related activities”. The act goes on to detail rather specifically exactly what the mint is to do. Its legislative powers are as indicated in the object.

It continues:

In order to carry out this mandate, the Mint may exercise any or all of the following powers:—

We need to look specifically at these powers because they are quite different when the proposed legislative changes are taken into consideration.

They are:

To produce and arrange for the production and the supply of coins of the currency of Canada; to produce coins of the currency of countries other than Canada; to melt, assay and refine gold, silver and other precious metals; to buy and sell gold, silver and other metals; to assay, refine, store and otherwise deal with gold, silver and other metals for the account of Her Majesty and others; to prepare and store shipments of coin, gold, silver and other metals and to move such shipments to or from the Mint; to make medals, plaques and other devices; to borrow or lease precious metals that it requires for the purpose of its operations; to acquire, hold and alienate real property or any interest therein; to make grants in lieu of taxes to any municipality in Canada in amounts not exceeding the taxes that might be levied by that municipality in respect of real property under the administration and control of the Mint if the Mint were not an agent of Her Majesty; and to do all other things that are incidental or conducive to the attainment of the objects and the exercise of the power of the Mint.

That is a pretty comprehensive list. The mint has in its corporate plan 1996-2000 indicated rather clearly how it has translated those particular powers into its operation. I would like to read into the record exactly what the mint has said in that report:

Canada's national mint, the Royal Canadian Mint, is one of the world's foremost producers of circulation, collector and bullion investment coinage. It is one of the largest gold refiners in the world. The mint is highly respected, in Canada and internationally, for the high quality and variety of its products and services. Its numismatic and precious metal investment coins, all promoting Canada, are sold in over 60,000 retail outlets worldwide.

Some might wonder what this numismatic business is. Numismatic has to do with coins and with people who collect coins or who invest in coins. It has to do with precious metals that are not in general circulation but that are there for a very special commemorative purpose or some other reason. They are made of special metals and have a value.

The report goes on:

The Royal Canadian Mint is designated a Schedule III-II crown corporation under the Financial Administration Act. The mint reports to parliament through the Minister of Public Works and Government Services.

The mint manufactures all of the circulation coinage used in Canada and manages the supporting distribution systems for the Minister of Finance. It also carries out research on coinage demand.

I draw attention to that sentence because what has happened here is going to come up a little later in my speech.

Furthermore, the mint develops proposals to introduce high quality, less costly metals or metal alloys in Canadian coinage in order to reduce costs and improve seigniorage for the Government.

This has to do with the circulation of coins that actually have an intrinsic value lower than their face value, the penny for example. We go on to the nickel, the dime and so on.

The mint is also concerned about the security of supply and price competitiveness of coinage metals used in Canadian coinage.

In recent years the mint's commercial activities have been impacted by intensive international competition, changing investment markets, economic slowdowns and recessions. After consistently producing profits annually from the time of its incorporation in 1969, the mint experienced an operating loss of $3.475 million in 1994

The minister told us that in the last year it had a profit. That is good.

In order to address this situation they produced this plan, the turnaround plan. That plan is now operating and, according to the minister's numbers, apparently is working all right.

That is a very interesting development. We now look into exactly what has happened in that turnaround plan and what the government is proposing to do in introducing this new legislation.

The minister told us the purpose of the legislation and as far as the statement went, it was accurate and complete. I think we need to commend the minister for some of the aspects of that statement.

I would now like to read the summary contained in the bill itself:

This enactment amends the Royal Canadian Mint Act to update the terminology for coins in order to reflect the markets served rather than the metals of which the coins are composed.

The amendments simplify the process for issuing coins by giving additional powers to the mint and to the Minister of Public Works and Government Services.

This is the core of this bill. The mint is given the capacity of a natural person and the power to incorporate subsidiaries and to acquire and dispose of interests in other entities. Other amendments of an administrative nature are also enacted.

It is that central part that we want to draw some attention to right now. As the mint has gone along and looked at the existing legislation, its current interpretation and application of that legislation, it has issued a mission statement.

That mission statement has three parts. First, to provide quality coinage at a reasonable cost to enable the Government of Canada to meet the needs of Canadians.

Second, to manufacture and market on a worldwide basis high quality collector circulation coinage and precious metal investment products and market refinery services.

It is pretty clear that in the coinage part of this operation we are not in a growth industry. It is a mature stable industry. That comment will become a little clearer as to its significance as we move along into examining this bill.

I would now like to look at the provisions of the new bill and read into the record the new powers that are being given to the mint under this act. We are dealing here with section 4(1). Remember what we said the powers of the mint were before. Here are the new powers:

In carrying out its objects, the mint has the rights, powers and privileges and the capacity of a natural person and may in particular

(a) procure the incorporation, dissolution or amalgamation of subsidiaries and acquire or dispose of any shares in them;

(b) acquire and dispose of any interest in any entity by any means; and

(c) generally do all the things that are incidental or conducive to the exercise of its powers with respect to

(i) coins of the currency of Canada,

(ii) coins of the currency of countries other than Canada,

(iii) gold, silver and other metals and,

(iv) medals, plaques, tokens and other objects made or partially made of metal.

I do not think it takes a rocket scientist to understand that the powers of the mint have now been expanded very dramatically. We need to ask ourselves questions such as what are these activities that are incidental t, or that are conducive to the mint's carrying out its activities.

One thing is very clear already. The mint is in the refining business. It is my understanding that the Canadian mint refines more gold than any other refinery in Canada. It is clearly in the business of refining gold.

We need to ask ourselves is it also in the business then of buying and selling metals. Clearly it is. The act is very clear that it may buy and sell metals. But very closely allied to this is the full commodities market. The futures market is a very volatile market. There are people in the business who tend to hedge their positions in order to protect certain prices.

But it also means that the mint has the power, according to this act, to get not only into the business of hedging itself against future price fluctuations but to actually get into the act of participation in that market. Can it now buy or sell futures contracts, for example, not necessarily only to look after its own interests but also to actually declare a profit in simply buying and selling contracts on the futures market?

I do not believe that is the intention but the point is the act allows this kind of activity on the part of the mint. I think that is far too much power because whose money is at risk here? Ultimately it is our money that is at risk.

Let me indicate how significant the hedging program can be. Canada's largest gold producer is Barrick, a Toronto based corporation. This is a report in the Globe and Mail October 22. There is a lot of information in here but I will read just one paragraph:

As a result of its gold hedging program, Barrick was able to sell its gold during the third quarter at an average of $400 an ounce, compared with the market price of $290 an ounce. During the third quarter of 1997, Barrick sold its gold for $420 an ounce, compared with the market price of $324 an ounce.

Barrick has sold forward 10.4 million ounces of gold at an average price of $400 an ounce.

There is a good example of what the mining corporations are doing in the marketplace and what the hedging program has to do with the futures commodities market. While there are some very positive things for the investors in a company like Barrick there are also advantages to the mint's buying gold on the futures market at a lower price and to guarantee a particular price in the future. There is a speculative element in here as well.

Will the mint be circumscribed in its activities so it does not get into this speculative market?

Why is this significant? It is significant because of the subsequent amendment that happens later in the act. The subsequent amendment is section 20(1):

The mint may, for the attainment of its objects, borrow money from the consolidated revenue fund or any other source, but the total amount outstanding at any time may not exceed 75 million dollars or such greater amount as may be specified in an appropriation act.

We have to be thankful I guess for small mercies. At least it is limited to $75 million. It was $50 million. It has now increased by $25 million which really means that the public treasury of Canada can be attached to the tune of $75 million. That is our money. That is taxpayer money.

When that is allowed to take place and if the mint can borrow money to get into the buying and selling of precious metals, and it clearly says it may, and if it gets into the futures market it can get into some serious trouble. I would hope the management will not ever do that but the point is the act does not protect the Canadian public from that activity and I think it should do so. It is our money at risk.

It can be argued that it has been able to do that in the past. There is some indication that the mint has borrowed money in the past. The most recent expansion of the stamping plant being added to the mint in Winnipeg is being done with financing to the tune of about $30 million outside of the Canadian consolidated treasury. While that may be true, and I think it is true because there is an indication that it is so, the fact remains the mint has an indebtedness of $30 million. If it will need more money it can go to the consolidated treasury fund for whatever money it needs up to $75 million given the new provisions of the act.

Could the mint get into the mining business itself, in other words buy mining stock? Somebody would say that is a stretch. It is in one sense with the operation of the mint but go back to the powers of the mint and it has all the powers of a natural person.

The interesting thing is that it may acquire and dispose of any interest in any entity by any means, any means as broad as the imagination. One has to be really careful about looking at that and asking what it can get involved in.

I hope that is not the intent. I am sure it is not but nevertheless I think we have to write the act in such a way that there are protections against that kind of thing.

I want to go to the heart of the issue which really has to do with the business of the powers there. I just read a few of them and I want to ask the people of Canada should the Government of Canada be in direct competition or get into an area that private enterprise has demonstrated it can do. There is no doubt that the Canadian mint has to have the exclusive authority to stamp the actual coin with the currency in circulation. It must have that because that is the government's control of the currency operating in Canada. But that has nothing to say with the production of the plating of coins or of stamping coins in the first place. We have at least one corporation in Canada that has been doing this for a lot longer than the mint.

Should the government own a corporation that can be in direct competition with private enterprise? I am unalterably opposed to anything that the government does that the people can do as well or better. There is clear evidence that they can do so. What is some of the evidence?

First, right now before the courts of Canada there is a suit charging the mint with infringing on the patents that are held by the corporation we mentioned, Westaim. That suit is currently alive and unfortunately I am unable to go into the details of the suit. The fact remains there is a patent that is being infringed upon, at least that is what the contest is, by the mint which is owned by private enterprise.

If we look at that sort of suit that is going on in the courts, we look at the balance of powers that exist in this court case now. All the power of the government and all the resources of the government are now pitted against one little corporation. It is not fair. It is an unbalanced situation. Why should government or a corporation of the government ever get into the position of stealing something from another company that is protected by a patent, by the legislation that the government itself has.

Canada can be proud of the number of innovative ideas that have come from scientists. The National Research Council for example has all kinds of patents which have developed and have advanced the technology and have advanced the science of the world. We can be proud of those kinds of things.

Now one of these companies has developed one of those patents and lo and behold one of the crown corporations says “That is mine now”. It is not fair. It should not happen. We will go no further on this but it is very important that we recognize these things.

The second issue is whether there is a need for more coin stamping capacity in Canada. As I stand here today there is reason to believe with considerable confidence that there is right now a 30% overcapacity in the generation of coins to be engraved officially by governments. That includes the current demand of the Eurocoin.

When the Eurocoin demand comes out, and we know what the problem is, that causes an upward spike in the demand. When that disappears that overcapacity will increase beyond the 30% that exists at the present time. Yet the mint is expanding in a market that is adequately served at the present time. Why? The argument is that it is a business decision.

It may be a business decision but it looks to me that it is a lousy business decision because something is going to happen. Either the mint is going to have trouble or this other company is going to be in trouble or they are both going to be in trouble.

We cannot expect a company to succeed and profit when in fact there is an overcapacity. Somewhere along the line there has to be a balance between the supply and the demand that is out there. In fact we get to the point where we ask ourselves, who is in charge here? Is the minister in charge? Is the government in charge? Or is it the mint that is in charge?

Who made the decision to build this plant and add to the capacity of the mint in Winnipeg? Was that done by the minister? Was it done by the government? Was it done by the finance minister? Or was it done by the bureaucrats at the mint? We do not know. It is not clear at this point. These are the kinds of questions that must be answered before we agree to this particular change in the legislation.

It is clear that as the powers of the mint are expanded, and I have just indicated how much they are being expanded, that the mint can indeed thumb its nose so to speak at the government or at the minister and say “This is what we are going to do because we have the powers of a natural person”.

We need to go beyond this. We need to ask ourselves how successful crown corporations have been.

We cannot help but look at Petrofina and now Petro-Canada and the cost that was to the taxpayer and how efficiently that was run. Canadian National Railways became a private corporation recently. It is now starting to make money. It did not before. It was a drain on the public treasury. Canada Post has had a lot of difficulty in its labour relations which still are not completely settled. I have to commend the minister on what is happening now with the dispute with the franchises and Canada Post. There is progress being made, but it is not complete.

We really have to ask ourselves what is the best relationship. We need to move ahead with positive aggression. We need to move ahead with balance and we need to move ahead with fairness.

There are specific concerns in this bill which I have illustrated.

In conclusion I would simply remind members that the powers granted to the mint are too broad. The exposure to risk by the expanded powers to the Canadian taxpayer and to the Canadian treasury should be circumscribed at least. It is to $75 million but it is too high. The government should never do things that individuals can do as well or better themselves. The people can do it and we should not be in that kind of business to provide competition for them.

The bill needs to be amended. There are some housekeeping elements in the bill that the minister has alluded to which I think we need to support. In fact they need to go ahead. However, there are other aspects of the bill that should be looked at very seriously and amended to come into focus so we can have strong private enterprise in the country and at the same time within a framework that is clearly guided by government principles and rules which make it possible for private enterprise to be strong, profitable and which reward innovation and entrepreneurship.

[Petitions, October 21st, 1998]

The next petition, Mr. Speaker, is signed by hundreds of petitioners and it asks that the government change the Young Offenders Act to reflect the concerns of the citizens of Canada by lowering the age limit and transfer those accused of crimes of violence to adult court and publishing the identity of violent crime offenders. I am pleased and honoured to support both these petitions.

[Petitions, October 21st, 1998]

Mr. Speaker, according to Standing Order 36 I would like to present two petitions. The first one asks the government to support Bill C-225, an act to amend the marriage and interpretation acts so as to define in statute that a marriage can only be entered into between a single male and a single female.

[Royal Canadian Mounted Police, October 21st, 1998]

Mr. Speaker, last Wednesday I rode along with an RCMP officer of the Kelowna detachment. First there was a security alarm at the superstore. Next he investigated a complaint from a woman who was being harassed by her ex-boyfriend. Then there was a domestic dispute. “Oh no, but let's go”, the officer said.

With gentle language yet firm authority and command of the situation the officers—we had backup—separated the disputing parties and restored peace at least for that night.

Next we picked up a man who was off his medication. Earlier that night he had tried to enter a stranger's house. We took him to the hospital.

We investigated a break and enter.

This was but a small sample of what our police officers do every night. Our streets are safe because of the dedication and actions of these men and women.

It is too bad that the government has cut funding for the RCMP. Instead the government is wasting money on a useless gun registration program.

[Personal Information Protection And Electronic Documents Act, October 19th, 1998]

Mr. Speaker, I rise to discuss Bill C-54, which I believe goes in the right direction. Some very good points have been made in the bill. The minister's statements of a moment ago illustrate the significance of electronic commerce in Canada and virtually the entire world. We need to recognize and accept that, and I think we all do.

The problem I see with this bill has to do with what is really being done here. It is not as if electronic commerce developed yesterday. It has been with us for quite some time. It has existed for at least 13 years in terms of doing business, in terms of consumer shopping, and we have had ATMs for a number of years. It is almost as if suddenly something has happened, that it is recent and has happened just now, but it has not happened just now.

We need to recognize that this is really a catch-up system, and for that I want to commend the government. This bill will make it possible to use some of the modern technology, to do some of the filing that needs to be done electronically and to get information and things of that sort.

Perhaps there are some people who wonder: What is this electronic commerce anyway? What are we really talking about?

We are talking about the business of making transactions via telecommunications systems using computer technologies. It is almost as if computer technologies and telecommunications are separate. I do not think one could exist without the other. The telecommunications industry depends upon computers and computers depend upon the telecommunications industry. The two are very much involved.

How big is electronic commerce? It is big. The minister just indicated to us some of the dimensions of the electronic commerce industry and we know they are true. It looks like there will be not only a tenfold increase, but a manifold increase. Nobody knows exactly how fast this electronic commerce area is going to grow.

Why is this an issue today?

First of all, we have many laws in Canada covering paper transactions and paper commerce. Paper transactions are founded on the notion and the awareness of boundaries: provincial, federal and international. Laws and taxes are applied within these boundaries and there are agreements as to which law or tax has precedence in cross-boundary transactions.

However, traditional boundaries do not exist on the Internet. Therefore, legal rules and consumer protocols become unclear, especially when the consumer is not even aware that they have crossed a traditional border in making a transaction.

Which law or tax then applies? Can the same law be applied to the electronic world as is applied to the paper world? This is a fundamental question because it raises the kinds of principles which ought to govern legislation with regard to electronic commerce.

This bill is not complete and I think the minister would agree that it is not complete. It is be a good beginning, but it is only a beginning.

We have to be very careful that in this beginning we do not chart a course that ends up with errors of some kind. We have to be very careful that we choose the right course at the beginning.

We use electronic commerce to transfer funds in banking, to pay our bills and to access automatic teller machines. We use it in the operation and in the guidance of trucks, ships, planes; vehicles which are in the air, on land and at sea.

The global positioning system, for example, is strictly an electronic mechanism. Satellites such as RADARSAT make a very significant contribution to electronic commerce. What does it do? It provides information, for example, about what is happening to the ice caps. It also inventories and gives information almost immediately about the moisture conditions in various parts of the world.

What are some of the issues involved? The minister said that one of the big issues is privacy. Yes, privacy is a major issue, but I would like to raise another issue before I speak about privacy, and that is the integrity of the information.

Integrity means that we can have trust and confidence in the information that is made available to us by electronic means. For example, can we be assured that what we think is happening is actually happening? Is the money being transferred from my bank account to somebody else's bank account as it ought to be? Is my account being credited or debited as it ought to be? Will the person receive exactly what it is they thought they were buying via the Internet or the telephone?

Verifying signatures is a very significant issue as well.

The public information cryptography issue is involved. The business of recognizing the public key infrastructure on cryptography is something that this bill wants to control. We need to ask ourselves the question: To what degree can or ought the government be able to control the various encryption methods and systems?

Earlier this year there was a discussion regarding the type of policy the government should pursue with regard to encryption. There was a lot of resistance to this particular issue. A policy statement was finally drafted. I believe there are some good aspects to this particular policy. However, I would like to ask whether the provisions in the legislation before us are consistent with the provisions of the policy on encryption.

For example, one of the elements in this encryption policy states that Canadians are free to develop, import and use whatever cryptography products they wish.

The government will not implement mandatory key recovery requirements or licensing regimes. The government encourages industry to establish responsible practices, such as key recovery techniques for stored data. The government will act as a model user of cryptography through practices of the Government of Canada public key infrastructure program.

The policy indicates that Canada will take into consideration the export practices of other countries and the availability of comparable products when rendering export permit decisions. The export permit application process will be made more transparent and procedures will be streamlined to ensure the least regulatory intervention necessary.

If the issue is to ensure that the integrity of information from one business to another business is indeed safe, secure and private, that is one thing. However, if the issue is government intervention and the ability to intervene, to read, to uncover and to break through the encryption that is used by businesses to do their business, then all privacy will be destroyed.

I think the policy suggests that the government will not do that. However, the issue is that it is not protected in this particular legislation. This legislation does not say that the government may not or the government shall not get into the encryption systems that various industries may use in doing their business.

I would like to deal with encryption a bit further. Someone may ask: What is encryption? It is actually a code. Someone who does not know the code cannot uncover the message. We must ensure that a message which is designed to reach a particular destination only reaches that destination.

We know that the Internet is accessible by many. That message, once it is put on the Internet, can be retrieved by virtually anyone unless it is encrypted. The person who receives the message must either decipher what the encryption is or have the key that gets them into the message immediately. There are many people who are pretty sharp at discovering encryption systems.

We need to accept that the new laser technology and the application of the laser technology is one that we need to look at carefully. There are experts in this field who say that if one human being has created a code another human being can decrypt that code. Dr. Paul Corkum of the National Research Council makes the statement that unbreakable codes for secure information transfer can be based on the basic structure of light.

When we enter the field of laser technology we are dealing with a complicated issue. Nevertheless, Dr. Corkum makes the unequivocal statement that unbreakable codes for secure information transfer can be based on the basic structure of light.

Nowhere in this legislation is there reference to unbreakable codes or the use of encryption codes being limited to business, government or anything of the kind.

If we are to have privacy we must be absolutely sure that if someone wishes to encrypt a message the message can be encrypted to the degree that no one else can understand it except those for whom the message was destined in the first place.

We need to recognize not only the need for privacy but another area in the legislation which has to do with privacy. It has nothing to do with encryption but it has something to do with the provision of privacy of information. I refer to the beginning of the bill. In division 1, which is headed “Protection of personal information”, subclause 5(2) says:

The word “should” when used in Schedule 1, indicates a recommendations and does not impose an obligation.

“Should” is a guidance and not an obligation. Let us go to schedule 1 and have a look at what is there. In section 4.2.3 it states:

identified purposes should be specified at or before the time of collection to the individual from whom the personal information is collected—

The purpose should be stated. It continues:

Depending upon the way in which the information is collected, this is can be done orally or in writing. An application form, for example, may give notice of the purposes.

This is a possibility. It should be there, but it is not a requirement that it be there. However, the next section, which is section 4.2.4, states:

When personal information that has been collected is to be used for a purpose not previously identified, the new purpose shall be identified prior to use.

Is that not an interesting contradiction or at least an implication of confusion? In the first instance it is not obligatory that the purpose be stated, but if it is stated and it is changed then there is a requirement that the individual be notified. If we wanted to protect ourselves and wanted to be flexible, we would simply never state the purpose. Then we could do whatever we wanted because section 4.2.4 would not apply.

There are some interesting questions about what is being done and being proposed in the legislation. As the committee deals with it, I hope it will be in some detail and that some of the weaknesses will perhaps be rectified.

We need to look as well at the conflict of interest issue. In the bill there is no statement about the use of private information in a conflict of interest situation. I refer particularly to the application forms currently in vogue and used by certain banking institutions in Canada.

Until very recently an application form to do business, for example with the security branch of a bank, contained the name. Underneath there was very tiny print stating: I hereby allow or give permission to this bank to use the information given for trading securities to be used in other parts of its operation.

We know that banks today own trust companies and insurance companies. Some of them are health insurance companies and life insurance companies. They have investment dealers and clearly they have the banking institution. Is it not interesting that a bank which collects information to trade securities may use it in other parts of its operation?

Let us suppose one has a loan in the particular bank and an insurance problem. Is it not interesting that individuals may suffer ill health which as a consequence, at least in the mind of the bank, places in jeopardy their ability to repay the loan?

Information was collected for the purpose of doing trading only in a particular bank. Yet the bank is now able, through its insurance branch, to transfer the information. That insurance branch may and will, if it owns an insurance company, have transactions with other insurance companies and may trade information. The potential for a conflict of interest is very real.

It is interesting that although one has given voluntary permission to the bank to use this information and suddenly withdraws that permission, the bank reserves the right, in very tiny print, to close one's account with 30 days notice.

There are some very interesting issues. Compliance is granted by giving permission, but it is used in a way that was never intended, or the customer never believed it would be used in such a way. The action is unilateral on the part of the financial institution to close the account if the individual suddenly chooses to withdraw access to the information for a purpose other than the one for which it was intended originally.

I now wish to move to the interdependence between electronic commerce and traditional or other commerce. Electronic commerce cannot exist without a traditional infrastructure for moving things and people. For example, a service may be ordered through the Internet but the product or service must be delivered. A contract must ultimately be signed and become operational. Funds must actually be moved from one state to the other.

It is not just the ability of being able to do electronic commerce. There is an interdependence between electronic commerce and regular or traditional kinds of commerce. This requires an infrastructure that is ready and able to meet the requirements, one of which is speed.

Time delivery is all very well if it is in a beautiful computer and it has to be deliver, for example, on September 30 of a particular year at one o'clock. However, if the truck does not get there it does not help. There is no relationship. If the relationship is not there and it is not working, there are backlogs and queues and things break down.

We need to recognize that there needs to be a back-up for intercommunication. We need to trace the trail. If something goes wrong we need to know where it went wrong, why it went wrong, who is responsible and how can it be fixed. It involves all kinds of aspects. It involves many people and things. We need to know where are the airplanes, the satellites and the rockets on land. Will it be done by foot, by truck, by rail or by any other method? The situation on the sea is similar.

It is not just the business of controlling electronic commerce. It is also the matter of developing adequate human resources. The number one requirement in the whole business of electronic commerce is the ability of personnel. Ultimately people will make the system go. They need the ability to use electronic commerce information.

They must know how it works. They must understand how it works. Then they must expect to be able to apply it. There must also be confidence and faith in the integrity of the information. All else depends on it. Because it is so fast and because it allows transborder transactions very easily, errors are multiplied and magnified if they occur.

There also must be integration. We need to recognize the interconnection of nations, the interconnection of industries and the interconnection of people. There will be a tremendous requirement in the ability of management to integrate what appears to be separate and disparate parts into a corresponding and working whole.

It really does something to me when I hear our Prime Minister answer the question about how far the dollar has to sink before we become alarmed. The minister has often talked about the issue. The Prime Minister, the senior minister in the country, is the one who should know. He is the one who is asked this question because it is fundamental to our economy, to electronic commerce and to any other commerce. He answers that the problem is market decisions. He answers that either it is floating currency or monetary policy under Canadian law like in most of the countries managed by the Bank of Canada. According to him it is the way the system operates. It is never the Prime Minister; it is the Governor of the Bank of Canada who makes these daily decisions.

The Canadian economy is functioning very well. We reduced the deficit from $42 billion to a surplus that was billions of dollars for the first three months. In spite of strikes at GM, in construction and in the paper industry in Quebec, unemployment did not go up. It remained at 8.4%. We have around 1% inflation.

A few weeks ago there was a report for the first time in a long time that activity in Canada had been higher than in the United States. It is a very positive sign. The monetary policy of the Canadian government is made by the governor of the bank under the Bank of Canada Act.

We need to do better. What can we as parliamentarians learn from the complications of electronic commerce and from the need to protect the privacy of individuals and to do business successfully and well? We need to learn about a couple of issues. We need to recognize that our ability to do things has been magnified manifold. That means the responsibility of doing it right is greater than it has ever been. We also need to recognize that one error can cause many other errors and have a far broader impact than was the case before.

Above all we need to recognize the need for integrity and leadership in the country. We need to know more. The bill is not sufficient. It is a good beginning but is not a leadership document. If anything it is a document that catches up to where industry has been for the last 10 years. We need leadership. We need to understand the significance of what we are doing. We need to be confident. We need to have an attitude of co-operation, humility and self-control. We need to recognize, as never before, the absolute necessity and the centrality of integrity, truth and honesty in whatever we do.

It is not good enough for the Prime Minister to try to explain the value of the Canadian dollar and its fluctuations the way he does. It is not good enough for the Minister of Finance to say we have a surplus while recognizing full well that the surplus is built on sand. In fact it is not even good sand. It is shifting sand because it is built on the revenues collected for the EI program rather than on the management of the finances of the country.

We need to tell the truth. The Prime Minister, the Minister of Finance and the rest of the ministers need to tell the story the way it really is. If they do not it will not be long, particularly with the transfers across borders, with e-commerce and any other mechanisms available to us, that the truth will be known. Where is the confidence going to come from when in fact we recognize that the Minister of Finance has not told us the truth?

Where is the confidence when we recognize that we do not have a balanced budget, that it is a concoction of numbers which makes it look as if it is balanced but is not really balanced? This is dangerous. If there ever was a time for us to learn from a bill, it is this one which is at the cutting edge. It does not provide leadership but it is at the cutting edge, and for that I commend the minister.

We need to recognize, however, that within this lies the seed of our undoing if we do not recognize the need for integrity of information, integrity of communication of the people of Canada and integrity within the civil service of Canada so that the ministerial position, the government's position and the position of the bureaucrats are identical, and that government can be there with integrity so that we can depend on what it tells the people and base our future direction on that. That is what we need to learn from legislation like this.

[Apec Summit, October 8th, 1998]

Will the Deputy Prime Minister now prove that statement and fire the solicitor general?

[Apec Summit, October 8th, 1998]

Mr. Speaker, in his idealistic youth as Prime Minister, the Prime Minister said: “Integrity and honesty are the cornerstones of this government”. That was 1996—