John Manley

[Publishing Industry, March 9th, 1994]

Mr. Speaker, again I am delighted the Bloc Quebecois is so interested in protecting Canadian cultural sovereignty. That is good news for Canada.

I might inform the member it is unnecessary for me to give the direction she is asking because the transaction as an indirect acquisition of these Canadian companies is reviewable by Investment Canada as a matter of law.

[Publishing Industry, March 9th, 1994]

Mr. Speaker, it is important to add some clarification to this issue since the Leader of the Opposition who we all know has great interest in Canadian culture seems to be implying that Canadian interests were somehow ignored in this.

I want to make it clear as the minister responsible for Investment Canada there were a number of implications to this complete transaction which should be well understood.

What was reviewed by Investment Canada was an indirect acquisition of an already foreign owned company, Maxwell Macmillan Canada, which was in receivership. Part of that transaction when approved by Investment Canada obtained from Prentice-Hall certain valuable undertakings with respect to the Canadian publishing industry, which I think are a net gain for Canada.

In the context of those undertakings for example we have commitments to ensure a strong development program for new and upgraded Canadian material for educational programs. We have ensured that primary distributors for imported consumer book lines which were valued at approximately $4 million in 1993 will be Canadian controlled publishers and agents. We

have ensured support to the Canadian publishing industry infrastructure by maintaining an integrated warehousing system. There are other undertakings that were obtained in the context of this transaction.

Simultaneously, as the minister has said, CDIC did dispose of its interest in Ginn as part of a verbal commitment made by the previous government. That commitment was one which we found in our review was not going to be met by any potential Canadian purchaser.

In the context of obtaining very significant commitments as part of the acquisition we feel it was a net benefit to Canada.

[Governor General, February 24th, 1994]

Just ask General Renfrew.

[The Budget, February 24th, 1994]

Madam Speaker, I appreciate that question as well. I must say that what I find confusing about the position that the Official Opposition, the Bloc Quebecois, has been taking, and I heard part of its leader's speech, seemed to be that it was very dissatisfied with the fact that the deficit was too high.

Yesterday in the House of Commons we heard its members raising question after question about the changes to the unemployment insurance regime which is effecting a reduction in the deficit and a reduction in payroll taxes. They send us very contradictory messages and it is impossible to understand how their ultimate political objectives which they proclaim on a regular basis of separatism are going to do anything but add to the burden of costs on the people of Canada and the people of Quebec.

With respect to the Reform Party, the comment is correct. The view has been consistently presented. I do not agree with some of the views that have been put forward by the Reform Party, particularly with respect to what it has said about eliminating all assistance to business.

For example, in the areas of concern to me, science and technology, it is the scientific research and development tax credit which gives about a $1 billion a year assistance to advanced technology companies in Canada which has made Canada a desired location for much of the R and D facilities that are here now.

In my speech I talked about how we do not have enough. If I had time I could list examples of companies that have chosen to locate facilities in Canada, high paying, high value added jobs, because of that assistance. It is provided by other countries. That

kind of work is footloose. It can be here, it can be in the U.S., it can be in Europe, or it can be in Asia.

If we are going to secure those kinds of jobs, unfortunately or fortunately, depending on how one looks at it, we have to be prepared to create a tax and economic environment which is as favourable to those efforts as is offered by our competitors.

Further, I would like to say that there are ways we can make more progress on reducing the deficit. Let me give one example. The elimination of internal trade barriers within Canada could generate as much as a 1 per cent increase in our GDP, a product of $6 billion to $7 billion a year. Why is it that so many provinces are still not willing to come to the table and say they will do it by June 30?

We have signals of goodwill. We signed an agreement last month but there is a lot of work to do. I hope that we will see all of the provinces and the federal government sign such an agreement.

We have to come to grips with areas of duplication between levels of government. That effort is being spearheaded by the Prime Minister and the Minister of Intergovernmental Affairs. That will enable us to deliver government services more efficiently and help us make more progress on the deficit in years to come.

[The Budget, February 24th, 1994]

Madam Speaker, in my speech, I tried to explain what is not so hard to understand. I think that the key to deficit reduction is economic growth. Throughout the years under the previous government, we have learned that the Conservatives always thought that, by cutting expenditures and increasing taxes they could lower the deficit. It did not work.

This year, we have a dreadful $40 billion deficit. If we want to tackle this problem, we will have to reduce government spending. That we have already acknowledged. But we must also limit tax increases. That is why the Minister of Finance stated that the deficit reduction measures announced in the budget will result in a cut of $5 in government expenditures for every one dollar raised in revenues. That is totally unlike the old tactics used by the Conservatives. We have also implemented an economic growth policy. We are prepared to invest in the new economy. We are prepared to help Canadian small businesses have access to international markets for their goods and services. That is the key to the problem.

I would just like to say a couple of words in English. If we are going to solve the problem of the deficit over the long term there is only one realistic solution and that is to achieve substantial, sustainable economic growth. That is the plan of this budget.

That is a diversion from the budgets of the previous government which relied entirely on a false hope that getting some of the macroeconomic fundamentals right was going to allow for economic growth as the grass grows in springtime. It simply did not work. We are going out into the fields, we are ploughing them, fertilizing them, we are trying to encourage economic growth. That is going to be the key to reducing the deficit in the future.

[The Budget, February 24th, 1994]

I thank the member for his question because I think it is important for us to understand how economic growth is generated in the country. I think what is fundamental in the favourable comments that he made on the subject of some of the investments that we want to make with respect to the electronic highway, with respect to diffusion of technology, technology partnerships which get new inventions out into the marketplace, and what is very important about spending in some of those areas is that it is seen as an investment in growth for the future.

An analysis came out a week or so ago, produced by Statistics Canada, analysing what has made for success, made for growing small and medium sized firms in Canada. One point is that they have been prepared to invest in research. They are also good at applying new technologies.

We have to understand when we spend whether we are consuming or whether we are investing.

With respect to the infrastructure program, there are really two things that I would like to say in response to the member's question. First of all it was made an important point of the design of criteria for the program that the definition be broad enough to include expenditures that related to, for example, electronic highways, to things that would improve innovation that would allow investment in technology.

I am absolutely delighted that the Regional Municipality of Ottawa-Carleton, part of which I represent, has chosen to use some of its funds under the national infrastructure program to expand the communications network by investing in electronic highway capability for this region. I think that is exceptionally far-sighted on the part of local government and I applaud them for it.

It must also be understood that the traditional infrastructure programs are also investments in economic growth in the future. True, they do provide short-term jobs, but just as at one time in our history it was the canals and at another time it was the railroads, currently in many areas it is the highways that are generating economic growth, highways, airports, means of transportation and communication. These are vital to economic growth in many parts of the country.

Every government at every level needs to look at, and these issues are difficult because of the financial limitations on government, its expenditures very carefully to ensure that its expenditures represent investments in productivity gains for the future, not simply spending for current consumption. The emphasis has to be on building for the future so that we can afford our current level of consumption.

[The Budget, February 24th, 1994]

Mr. Speaker, I would like to remind the Bloc that the current Prime Minister did accept questions in the question period after speeches when he was Leader of the Opposition, not necessarily on every occasion, but he certainly did it. Perhaps the current Leader of

the Opposition does not like to be reminded of his past as a member of the previous government.

I have participated in a lot of budget debates and a lot of borrowing authority debates over the last five years, always of course from the other side of the House. The task of criticizing the budget when I was in opposition was always made easier by the fact that the previous government always failed to meet the budget targets it set. Every year it gave us more and more rhetoric about the deficit. It proposed more cuts and tax increases every year. Yet it seemed to auger deeper into the ground, so much so that this year we face a deficit of $45 billion.

The fundamental problem which the previous government failed to address was the need to take seriously its responsibility for the transformation of the Canadian economy into one premised on the need for growth based on knowledge, skills, innovation and the use of technology.

We live in a new global market. Rapid structural changes are taking place in our traditional industries and these changes, combined with globalization, have generated confusion and uncertainty among Canadians.

We have reason to be hopeful. The new economy offers boundless opportunity for the innovative, the inventive and the courageous. This budget is about seizing the opportunities of the new economy. It is an agenda for economic growth. It is an agenda to put Canada back to work. It builds on our strengths, faces our weaknesses head on and points us to new horizons.

A basic vision for the Canadian economy was at the core of our red book in the election campaign and survives intact in the budget. The vision is one of a Canada successful in making adjustments to the new economy, a Canada in which our traditional sources of wealth creation are enhanced by the application of new technology and by adherence to the principles of sustainable development, a Canada in which small business is able to prosper in an environment in which governments believe that to succeed is good and to succeed requires the co-operation and support of public policy.

The fundamental problem that faces Canadians today is that we as a society cannot finance our consumption at current levels. Measures in the budget reduced the amount that the federal public sector is consuming by a significant degree. However, we still face the reality that the only way our standard of living can be maintained and our expectations of government services can be realized is if we move forward with a plan to revitalize the wealth creation capacity of our economy.

The notion that government does not have a role to play in enabling a nation's economy to succeed is a view that I believe was held by our predecessors, including the current Leader of the Official Opposition. This view has been widely discredited by the successful new economies that are emerging rapidly as our chief competitors in the international marketplace.

The world is moving from a commodity and assembly line economy to a knowledge based economy in which innovations in products and processes are the result of scientific research and development.

Knowledge and skills, rather than location and natural resources, are now the basis for the competitive edge in agriculture and mining, as well in electronic data processing.

Public policies can have a bearing on knowledge and skills. The government can promote the creation and improvement of those.

At the same time as barriers to trade are falling, new roles for government in determining a nation's economic success are being defined. Governments too have to be innovative and strategic in the use of their own limited resources and strategic as well in the direction sought for the economy of the nation.

Our strategy recognizes the rapid change occurring in the world today. Our strategy recognizes that for Canadian firms the key competitors are not across the street. They are on the other side of the world. Our strategy recognizes that our most important resource is people: their skills, their knowledge, their desire to succeed.

In this strategy individuals need to prepare themselves for a future that will likely include career changes and the acquisition of new skills and knowledge throughout their working lives. In this strategy companies must recognize the importance of continual upgrading of their products and the need to develop new markets in Canada and abroad. To do so they need to continually invest in their people and they must not delay in acquiring and using new technology, new processes, new ways of solving old problems. In this strategy governments must create the supportive environment that encourages individuals and companies to innovate, to upgrade, to expand and to create jobs.

What will this require of government? First, we have to get the economic framework right. The Minister of Finance has set out a tough but realistic plan for reducing the deficit to 3 per cent of GDP over three years.

We put in place a clear and stable monetary policy until the end of the decade. We signed two major trade agreements, NAFTA and GATT, which increase and ensure access to world markets for Canada. We are also negotiating a comprehensive agreement to eliminate internal obstacles to domestic trade in a key sector by June 30 of this year.

Second we have to get Canada's business framework right. By that I mean we need a regulatory and tax environment that enables Canadian firms to succeed rather than hindering their success. We need competition and consumer protection laws that enhance the proper functioning of the marketplace while enabling Canadian businesses to achieve the critical mass necessary to take on the world.

We must try to attain excellence in education and training, and also eliminate barriers and obstacles to personal initiative.

Third, we must change the culture and attitudes of employers and employees alike to the adoption of new technologies.

Advances in science and technology are driving productivity improvements everywhere in the world. In the 1990s no country can insulate itself from new developments. We must organize ourselves to keep up with cutting edge technology and where possible move ahead. This is the essence of creating well paying jobs and growth in this decade.

The opening of markets around the world creates new opportunities for Canadian business. In Latin America and southeast Asia national economies are growing at a double digit pace. Yet almost 80 per cent of the Canada's trade continues to be with one nation, the United States. Despite the abundant opportunities abroad, as recently as 1990 only 100 firms accounted for 60 per cent of our exports. Only 7.6 per cent of Canadian firms are engaged in export trade. This is simply not good enough for a country as dependent on trade as we are to sustain our standard of living.

In a knowledge based world economy, technology and people define the difference between a firm in Singapore and one in Montreal. Yet less than one-half of 1 per cent of Canadian companies do research and development on their own. Not enough of our R and D winds up in products and services to create jobs at home. Canadian companies, particularly small businesses, have not integrated leading technologies as rapidly as their competitors abroad.

The message is clear. The number of businesses doing research and development and investing in state of the art technologies must increase dramatically.

The questions we have to answer are these: How are we going to make more than one in ten Canadian companies into exporters? How are we going to dramatically improve the number of Canadian companies that perform research and development? How are we going to match our global competitors in the use of new manufacturing and processing technologies?

To succeed, we must have an economy based on innovation. We must rely on the strengths of small businesses which offer the best opportunities for growth and job creation. We must help small businesses where needed, that is with training, exports, high technology and financing.

As part of the budget the Minister of Finance and I have tabled an action agenda to help small businesses grow and to continue to generate jobs for Canadians. It is a small business agenda that is willing to help firms to take risks and to innovate. It is the small business that has the greatest potential for dynamic growth and job creation.

At the top of our growth agenda is the vital consultative process that has been launched with the small business discussion paper. This consultation demonstrates that we are ready to listen and ready to act. The need to review our approach to science and technology to better support a knowledge based economy is also at the top of our growth agenda.

As part of the budget, we announced a comprehensive re-evaluation of science and technology policy that will begin with the release of a discussion paper this spring. This process will build on budget initiatives to set a long-term course for science and technology policy focused on our greatest opportunity, the transfusion of R and D and technology into high value added products and services.

A key feature of the knowledge based economy is the speed with which information is transferred. Economic success comes from freer, easier flows and exchanges of information. In this rapidly changing environment, the prospect of linking Canadians to a high speed interactive multimedia network, a virtual information highway becomes critical to building our new economy.

Canada is a leader in telecommunications and we can rely on that strength. Investments, mostly from the private sector, are enormous. I will work in co-operation with industry and the

users of the information highway to ensure that governments play an active and creative role.

An economic growth strategy is not a one budget issue. It is at the heart of the government's mission. I have reviewed today how we will elaborate on our growth agenda in coming months, particularly in the areas of small business, science and technology and the information highway. However this debate is also about what the government is doing to fulfil the immediate promises of the red book.

The answer is simple. We mean what we said. Capital is the catalyst that turns ideas into new products and services. The Canada investment fund will help provide that patient capital. We will contribute $100 million to the fund over four years and we will seek additional funds in the private sector. The fund will be operating before the start of the next fiscal year.

We are working with the Canadian Bankers' Association on projects to improve financing for small business. These include the development of a banking code of conduct to clarify the relationship between borrower and lender and the search for new and better ways of providing regular and trade financing to knowledge based businesses.

We will work with the industrial sector to create networks that will help small businesses to form groups to do together what they cannot do alone.

Our competitors, particularly in Europe, recognize that networks are essential if small businesses are to compete internationally and gain competitive advantages of scale, scope and speed.

Networks are particularly effective in innovation. They help small businesses develop new products and services, to put new and emerging technologies to work for them and to focus on marketing and exporting.

We will improve the diffusion of innovation and the building of an innovation culture in business by committing $15 million this year for the creation of the Canadian technology network. The network will provide small businesses with the latest information on new technology, new management techniques and new market developments.

We want to set up an engineering and science program to help small businesses hire engineers, scientists, technicians or industrial designers. We will co-operate with the provinces and industry to develop this program and co-ordinate its implementation by 1995.

To help turn research excellence into new products, growing industries and jobs, we are committing to start-up funding this year of $10 million for a national technology partnerships program. This program will promote the growth of technology partnerships and help small businesses turn research into new products, new services and new jobs.

There is a great domestic and export growth potential for the environmental technology sector, particularly for small businesses. This sector is poised for growth and Canadians can benefit immeasurably from the jobs and exports created by environmental technologies.

The Minister of the Environment and I are reviewing Canada's approach to the environmental technology sectors. When that review is complete we will table detailed plans for this strategic sector.

The budget allocation of $800 million over 10 years for a new long-term space plan is proof of the government's commitment to Canada's continued role as a space-faring nation. The new space plan will be within our financial means and will build on our strengths in earth observation, remote sensing and satellite communications.

A stable base for our research infrastructure is a vital part of improving our innovation capability. The National Research Council of Canada plays a key role in giving effect to the federal government's science and technology policies. This year we will provide the National Research Council with new resources to carry out its mandate.

It is important that we be able to promote and preserve our skills in the university research sector. University research and development are high priorities. This is why we continue this year to ensure the financing of the various granting agencies. Starting in 1995-96, we will give them an annual increase of about 1.5 per cent.

A significant part of Canada's academic research capability is the networks of centres of excellence program.

We are making sure that there is enough funding to support the second phase of the program. In this second phase we will give greater weight to the economic and commercial potential of the networks to support our growth agenda based on innovation.

As Canadians we have been through a lot in this last decade. Many of our fellow citizens approach the future with more anxiety than hope. Our mission as a government is to offer hope. But if hope is to be meaningful, it must be realistic. So we have put forth in this budget a plan for the revitalization of the

Canadian economy, a plan which I believe addresses the challenges and recognizes the opportunities that await Canada.

This House was once told, and I quote: "The times in which we are living call for initiative and resourcefulness on the part of industry. We must be constantly alive to the changes taking place in the world today and quick to seize every opportunity that will build up our economy. It cannot be done overnight but I am confident that with the co-operation of industry and of government we can build toward a better Canada and a better world".

Canadians heeded my predecessor, C. D. Howe, when he spoke those words in this place in 1948. Canadians showed initiative and resourcefulness. They worked together, they seized opportunity, and they launched Canada into a period of unparalleled vigorous growth and helped build a better world.

We still have that initiative, that resourcefulness, that sense of shared opportunity. I am confident that we can harness it again to create a period of growth as we move into the next century that will match our great post-war expansion.

I look forward to the co-operation of all Canadians and all members of this House in working toward that goal.

[Book Publishing, February 22nd, 1994]

Mr. Speaker, on behalf of the minister responsible for CDIC, let me indicate to the member that the government shares his concern.

However, the obligation that CDIC had to sell 51 per cent of its interest in Ginn was one which had been made previously. Although a number of discussions have been held with potential Canadian purchasers, none of those discussions developed into a substantial indication of interest to the extent that an offer was made that was acceptable to CDIC.

In the circumstances, the decision was taken to realize on CDIC's investment in Ginn in accordance with the previously made commitment by the previous government.

[Lobbyists, February 22nd, 1994]

Mr. Speaker, I can assure the hon. member that we will soon be tabling draft legislation respecting lobbyists and I hope that we can count on his support so as to give some weight to the process of regulating lobbying activities.

[Aerospace Industry, February 18th, 1994]

Mr. Speaker, first of all let me say that we agree that the strength and the health of the Canadian aerospace industry are of vital importance. This is a niche in which Canada has been very successful. In terms of sales, our aerospace industry is fifth in the world.

I am very well aware, as the member has made me aware, of the fact that there are a number of companies that are very important in the aerospace sector in the Winnipeg region. Bristol Aerospace is expected to win a very large contract very shortly from the U.S. government. Boeing expects to play an important role in the 737-X program.

The fundamental means of providing support to the aerospace industry, apart from the general policy framework that we have, is the defence industry's productivity program. That will be the cornerstone as promised in the red book of our defence conversion initiatives. We expect that we can continue to use that program as a very vital tool-most of its contributions are repayable-to ensure that the Canadian aerospace industry in Winnipeg and in the rest of Canada continues to be very competitive in the world.