House of Commons photoWon his last election, in 2004, with 48% of the vote.
Government Spending December 5th, 1994
Mr. Speaker, that is exactly the answer I expected the minister to give.
I think it is about time that we get down to some specifics rather than these generalizations. It has been very clear that Canadian business has said the best way for government to create a competitive environment is to reduce taxes. Yet there is no such statement in the industrial strategy.
Why will the minister not make a definitive commitment to reducing taxes?
Government Spending December 5th, 1994
Mr. Speaker, my question is for the Minister of Industry. It appears the industry strategy seems to be one of shuffling money around, not reduction in spending. Yet this morning the Minister of Industry stated on "Canada A.M." that his departmental budget would be reduced by as much as 50 per cent by the end of the third year. That is two years from now or less than that.
Can the minister tell us specifically what will be cut?
Income Tax Act December 1st, 1994
Mr. Speaker, I really enjoyed the reference to balancing the budget, being fiscally responsible and making sure that expenses are under control. Those are the absolutely right things that one should be saying. We have been saying them over here.
I failed to discover in the remarks made just a moment ago exactly how this would be done by actually making a promise to people that says we would reduce the deficit to 3 per cent of GDP. This really does not ever get to the point of reducing the deficit to zero.
We need a particular sort of plan. In my opinion it is not good enough to say that it will be reduced to 3 per cent of GDP. That means a deficit in perpetuity. Or is there something I missed in the speech that shows us clearly that there will be a reduction of the deficit to zero at some time?
Income Tax Act December 1st, 1994
No, no. That is the addition.
Income Tax Act December 1st, 1994
It is 110 pages.
Income Tax Act December 1st, 1994
Mind boggling.
Department Of Industry Act December 1st, 1994
Madam Speaker, I think we would all honour the intention of the amendment being proposed by the Bloc. I have addressed the idea of having openness. Making sure there is a certain element of knowledge that is open and fair to everybody who wishes to have that information about fees and things of that sort is very laudable. I certainly commend that.
I do agree with the hon. parliamentary secretary to the minister that the government saw the error of its original proposal in the bill as it was originally written, bringing to the committee a whole series of amendments that I think does meet the intent of the Bloc member's comments.
There is another principle that needs to be observed. There has to be a certain freedom to do the things that are right by government. There has to be an openness. The accountability of government has to be observed.
The amendments that were proposed and accepted in committee that are now in the report of the bill that will be voted on at third reading will meet not only the intent but also the detail of the member's suggestion.
Therefore I would respectfully suggest that we all support the amendments that come out of the committee and that we defeat this amendment.
Department Of Industry Act December 1st, 1994
We are against your pork barrelling. That is what we are against.
Department Of Industry Act December 1st, 1994
moved:
Motion No. 9
That Bill C-46 be amended by deleting Clause 14.
As with respect to our amendments to clauses 8, 9 and 10, we wish to address the amendment to clause 14 with the same kind of principles we used to evaluate and analyse the others.
In particular, we want to suggest to the House again that it is the obligation of government and it is and should be the intent of legislation to provide checks and balances to ensure openness, integrity and honesty in the performance of the duties and responsibilities incumbent upon government.
Second, the marketplace should determine winners and losers, not the government or intervention by government or its ministers in that marketplace.
Finally, the role of government is to provide a level playing field so that competition can be equal, fair and on a level playing ground so that the refereeing of the game of business is in fact conducted in a manner that provides success for as many as possible.
The results of the application of these principles is confidence for business and government and it certainly enhances the international competitiveness and the ability to provide for changes in the new economy that is coming.
I wish now to address the particular amendment to clause 14 which really is to eliminate and delete from the bill the total clause. There are a number of reasons we would like to propose that clause 14 be deleted from the bill.
Clause 14 gives to the minister a tremendous range of powers. May I just quote briefly from the provisions of the bill. The bill suggests that the minister under this act may:
(a) make loans to any person;
(b) guarantee the repayment of, or provide loan insurance or credit insurance in respect of, any financial obligation undertaken by any person; and
(c) make grants and contributions to any person.
The broad range of power given to the minister under this section is such that it makes it possible for that minister to intervene directly in the marketplace on behalf of or against any business or individual or group of persons, organizations or associations.
We believe that that provision is most objectionable and must not be allowed to stand. It allows the minister or through the minister under certain conditions that follow in the other sections the cabinet to pick winners and losers in the economy.
The authority violates a fundamental principle of openness, honesty and integrity. As we know, and history has shown over and over again, power tends to corrupt and absolute power tends to corrupt absolutely.
The provisions of this act are such in this clause that the minister can without reference to anyone do the kinds of things we talked about: make loans, give grants and things of this sort.
The government's role is to regulate the marketplace so that it is level but not to intervene and choose winners and losers by that intervention. If business is to succeed then it must be allowed to do so without having competitors gaining unfair advantage as a result of government intervention of one kind or another, particularly when it has to do with monetary assistance in particular areas.
If a business or a business sector is going to fail, it should do so because it lacked the competence or for some other reason it did not succeed. The government assistance should not be used to prop up a business that cannot survive in its own right. If the only way a business can survive is by government intervention and by shoring it up then indeed that business is of questionable integrity and questionable work in the economy.
I would like to refer particularly to what can happen when government intervention of this kind takes place. I refer here to the 1993 Auditor General's report with regard to the then Department of Science, Industry and Technology now known as the Department of Industry.
There we have a very interesting situation. In 1985, the cabinet authorized the Minister of Finance to provide an equity injection into the Federal Business Development Bank to enable that bank to purchase a $69 million special issue of preferred shares.
Subsequently, that was increased to $79 million, only $10 million more. The investment of the company was made pursuant to a directive of the governor in council and executed by the Minister of Regional Industrial Expansion, then Industry, Science and Technology and currently Industry. It was done under this clause and a subsequent clause in section 14.
On October 26, 1986, the government signed a share subscription agreement with a company for a two stage $260 million plant modernization project.
The information provided to cabinet for its approval on October 7, 1986, identified a specific Russian technology for the project. This technology was described as the newest and best available in the world. The company decided to switch from the Russian technology to new German technology which it purchased in September 1986.
Cabinet was not informed of the major change in this project. What was the result of all of these kinds of changes? The company's new plant using the German technology attempted startup in December 1989 and suspended operation in March 1990.
In December 1992, two years later, the company advised the Department of Industry that it could not complete stage one before December 31, 1992, for reasons beyond its reasonable control thereby suspending its obligation under the agreement.
In 1990 the department estimated that the Federal Business Development Bank was unlikely to recover its investment or earn any dividends. To date, the bank has received no dividends. In fact the Federal Business Development Bank wrote that particular investment down to zero. The agreement, however, remains in force until the year 2006.
The company's audited statement of total capital expenditures for the project at May 31, 1990 indicated that the company had incurred costs of $161 million. With $134 million that came from the federal government and some from the British Columbia government, the company was out of pocket $27 million and then only because of cost overruns. Had these cost overruns not occurred, the company's share in the project at that point would have been zero.
That is not the way to use taxpayers' money. The emphasis on it being best left to the private entrepreneur is the principle the government should observe and not use tax dollars to do these kinds of things. This clause of the bill should be deleted.
Many of the clauses are unclear. They are intrusionary. They are elitist. They allow the government and the minister in particular unlimited opportunities to interfere in the free market, and the cabinet as well under another section. In my remarks today I have shown that the legislation needs clarification. There are things that should be deleted from it. There are powers that should be circumscribed; the minister and the cabinet should not have these powers. They unbalance the very fundamentals of our economy and can strangle our treasury, as was already indicated in the Auditor General's report.
We should get to the point where the government does not take winners and losers but in fact develops a level playing field. The Department of Industry can be the department to bring about a strong engine that will drive the economy and bring about a balanced budget. That is what the department should do. However the way to do that is not by intervening directly in the marketplace through particular regional development programs or by providing loans, grants and subsidies to industries. The minister has the right to do this for any particular person and is not obligated to require that certain conditions be met for those loans.
At this point the legislation, the way it is being proposed, needs to be amended as we have suggested.
Department Of Industry Act December 1st, 1994
Madam Speaker, I will address very briefly the particular motion that was just presented. I will put my interventions primarily in terms of our reasons for presenting the motions we wish the bill be amended to meet. I would like to focus and couch my remarks in terms of three principles.
First, there ought to be within legislation checks and balances to ensure openness, honesty and integrity on the part of government and on the part of the ministers who bring about the implementation of government policies.
Second, it is the marketplace that should determine winners and losers in business, not government.
Third, the government's role is to provide a level playing field so that competition can be equal, that there be fair administration and that the refereeing be done in such a way that the conduct of manufacturing, trade and commerce is in fact fair and equitable.
The result of these kinds of principles would be to develop confidence in business and government and of course in oneself. It would enhance international competitiveness for the nation and for individual businesses. Another consequence is the ability to meet the challenge of a new economy which is so necessary.
The Department of Industry is a major and very important department in this government. It has a wide ranging impact on the economy of this country and indeed on the jobs and on the welfare of many Canadians at all age levels. It is important that we recognize the significance of this department.
This legislation enshrines and should enshrine in this department as much scrutiny as possible so that we can determine precisely what is or is not meant in the particular clauses. This is why I wish to address these particular motions whereby we want to bring about certain amendments.
I wish to start with the amendment to clause 8(a). Our amendment proposes that clause 8(a) be deleted. Now clause 8(a) reads that the minister shall: "promote economic development in areas of Ontario and Quebec where low incomes and slow economic growth are prevalent or where opportunities for productive employment are inadequate".
The reason we would like to see that stricken from the clause is that in principle we object to the idea of regional development for a minister who has responsibility for all of Canada. There is a conflict of interest here in principle to begin with. One should not prefer one region of the country over another. Certainly that is implicit in this kind of provision.
Regional programs have proven to be preferential and the way in which certain pork barrelling projects have been created, many of them questionable and sometimes with disastrous results. The government being engaged in these types of things separates regions in one area of the country from another. That in itself is disunifying. It divides the country rather than brings it together, which is what we want to do. I personally and the Reform Party want to bring about equality rather than divisiveness. In order to accomplish that the provision in the act found in clause 8(a) needs to be taken away.
With respect to clause 9, our proposal is to delete the clause completely. That of course is the administrative, or if you like, the empowerment section which gives the minister the way in which he or she would implement the provisions found in clause 8(a). By eliminating that clause the minister would not have the authority to go into regional development specifically in Ontario and Quebec.
Our amendment with respect to clause 10 is simply an administrative one. If we eliminate clause 8(a) and we eliminate clause 9, then of course we have to make the consequential change in clause 10.
There is a confusion in the provisions of clauses 8(b) and 8(c). Upon initial reading it would appear that they would apply to clause 8(a) in terms of Ontario and Quebec. But upon a more detailed reading and in an in depth situation they could be
interpreted as applying to all of Canada. In that case the situation is such that the minister may now have full responsibility for the economic development in areas where there is low income or where jobs are not plentiful. He can then intervene in the particular business promotion in any area of Quebec.
Because of its lack of clarity it is suggested that this be rewritten in such a way that misinterpretation cannot take place. If clause 8(a) is deleted then the clarification becomes unnecessary because it is then obvious.
To conclude my remarks on these motions, this section on regional development does not uphold the three principles which I mentioned earlier. It does not inspire Canadians to feel that their government is open, honest and possessed of great amounts of integrity. It does not provide for a level playing field in the marketplace and it does not provide for a clearly refereed game.
It does not allow the marketplace to determine the outcome. In other words, it gives to the government and to the minister, in particular, the power to intervene and to determine who wins and who loses. Because these principles are not observed we must recognize that we should go ahead with these. I hope that all colleagues will recognize that certain changes to the act must be made.
I would like to add a brief word about the Bloc's amendment. If clauses 8(b) and 8(c) are interpreted to give to the minister the wide-ranging powers for all of Canada, to accept an amendment such as was proposed by the Bloc a moment ago would give to the lieutenant-governor in council in Quebec the right to approve or disapprove economic development in the rest of Canada which, as far as I am concerned, warrants only one word to describe it, and that is ridiculous.
We have to be very careful that we not divide the country. We have enough stress already and to do something like this adds to that stress. If there is one thing we want to do it is to build a strong Canada that is competitive in the world, a Canada that provides for the innovation of people, that provides for a level playing field, that allows the creativity of entrepreneurs and creators at all levels to succeed, and to do so in fair competition with other individuals across Canada. No one province, no one individual should have the authority to decide who wins, who loses, other than on a fair playing field where the referee is honest, has integrity, is open and where the things that matter come to the fore.
Therefore, I urge that the Bloc's amendments be defeated and that the Reform Party's amendments be supported.