Yves Rocheleau

[Budget Implementation Act, 1995, June 5th, 1995]

Mr. Speaker, I am very happy to speak on Bill C-76, an act to implement various provisions of the last budget tabled by the Minister of Finance. The main purpose of this bill, as everyone knows, is to create the Canada social transfer which will have many repercussions.

The new Canada social transfer will, first of all, lead to cuts in the federal transfers to provinces in the upcoming years. As we mentioned over and over again in order to show how serious the situation is, we can expect during the next three years $3 billion in cuts in all of Canada, including $2.5 billion in cuts in Quebec alone.

Let me digress here. It is hard to talk about figures and statistics when we know that behind these figures are the harsh realities of life some people have to face. For example, in the province of Quebec, some hospitals will have to be closed, even though an increasingly significant portion of the Quebec population is having some serious problems, especially in Montreal where there is talk of a broken Quebec, and where life for some of our fellow Quebecers will only get tougher.

I am both somewhat surprised and disappointed to have so little time to address this issue, because I would have had a lot to say. I would like to respond to a statement made last week by our colleague from Edmonton Southwest who, in response to the debate initiated by the Bloc Quebecois on the rationale for Bills C-76, C-46, C-88 and C-91, referred to the Bloc members' behaviour as tribalism. I find it most deplorable.

By acting this way, we are assuming our responsibilities as the official opposition, and the Reform Party should, but does not, do the same at least to protect Canadian provinces against this unprecedented attack by the federal government which quietly forges ahead, bit by bit, to build tomorrow's Canada.

We are talking about it not only because Quebec is affected, but because if the answer to the referendum happens to be no, which would be most unfortunate, all Quebecers would wake up the next day as part of a new Canada that would have been built behind their backs. It is the very notion of a distinct nation that is at stake, the survival of the Quebec people, but it is tomorrow's Canada that is being built here, piece by piece, by people like the whip who refuse to admit what is really going on.

[Supply, June 1st, 1995]

Madam Speaker, I would like to ask my colleague, who is undoubtedly an honourable man, as a Canadian citizen elected by his constituents, whether, when he considers the demands of the people of Quebec as embodied by their government, he feels that these are the demands of a distinct society within the Canadian federation or that these are merely the vengeful demands of a province that refuses to conform, and above all, to be treated like the other provinces?

I would be interested to hear what the hon. member has to say about Quebec's historic claims as opposed to the other concept that includes all that, where our aim, at least within the framework of Canadian Confederation, is to be a distinct society in Canada.

[Supply, June 1st, 1995]

Madam Speaker, I found my Liberal colleague opposite quite eloquent, in his own way. He has aptly illustrated the ambiguity and the depth of the government's strategy, which is to hide its real motives.

This is non-transparency incarnate, since it is saying one thing and doing another. It claims that this beautiful and supposedly united country is in the process of decentralizing, while in reality, what is really happening, to use the term used by the opposition and several columnists, is that the federal government is offloading under the pretext of decentralizing. It is decentralizing the fight against the deficit by foisting unprecedented cuts on the provinces.

This is obvious in Quebec. There is nothing surprising about the unfortunate closure of a certain number of hospitals when one considers that the government of Quebec has had to deal with over one billion in cuts per year, cuts made almost on the quiet, without any opportunity for discussion. Fourteen billion dollars in cuts over 12 years and now the federal government wants to sell us a form of decentralization! And these cuts are paired with the introduction of national standards. Next, it will boast that it is helping to fund such and such programs. This is downright indecent. It should at least have the guts to call a spade a spade.

I would like to ask the hon. member to once again explain how his government can justify this way of operating. It would be so simple to just respect section 93 of this country's constitution, which says that social matters, including education, fall under provincial jurisdiction, and to just divvy up the appropriate tax

points to the provinces and stay out of other people's business, which would be the constitutional way of operating.

[Supply, June 1st, 1995]

Madam Speaker, I thank the hon. member for Brome-Missisquoi for his very thoughtful question. Sure, we do not want to deprive our constituents of the moneys they have already paid to the government and that are redistributed in the normal way. When one claims to want to develop the economy, as the federal government is doing, it is perfectly normal that from time to time it takes tax moneys paid by Quebec taxpayers to redistribute them in Quebec.

There is nothing new here, there is no gift in there, contrary to what is hinted at in such a question, as if that money was paid out of generosity. However, I am not sure, and there lies the danger, that these 40 projects are being developed in harmony with the efforts being made at the same time by the Quebec government. That is not obvious at all. On the contrary, one is left with the impression that there is competition, duplication and overlapping of energies.

I would like to take the opportunity provided by my colleague's question to talk about the Federal Business Development Bank and the change in policy it is setting for itself or that is being imposed on it by the minister. We seriously wonder how, despite all its claims, the new Business Development Bank of Canada will be able to meet the need it met successfully up till now for very small businesses, because 52 per cent of the loans made by the FBDB were loans of $100,000 or less, which suited the needs of very small businesses. Given the new aspirations of the Business Development Bank of Canada, it is not that obvious that the needs that were met up till now will be met in the future. This is not very reassuring, and therefore leads us to question the validity of this new mandate.

[Supply, June 1st, 1995]

Madam Speaker, I would like to thank my colleague, the hon. member for Kamouraska-Rivière-du-Loup, for his question. I commend his intuition. Indeed, when the Standing Committee on Industry started looking into the matter, the problem was centered on the issue of funding of small and medium size enterprises. Members of Parliament from Ontario made legitimate representations, considering the slump caused by the lack of credit, although this was never proven.

But things went differently afterwards, when the purpose of the Federal Business Development Bank was radically changed. Previously, the bank's primary purpose and almost only concern was assisting small and medium size enterprises, but that is now becoming somewhat secondary.

I will read the first lines of clause 4 which deals with that purpose:

"The purpose of the Bank is to support Canadian entrepreneurship-"

That is what subclause 4(1) says. Subclause 4(2) says:

"In carrying out its activities, the Bank must give particular consideration to the needs of small and medium sized-enterprises."

So, we see that what was previously a fundamental concern for small and medium size enterprises is becoming somewhat secondary. The bank will deal as it can with small and medium size enterprises having primarily established entrepreneurship development programs, as I was saying earlier, which do not qualify or have not been defined. Anything is possible with the private funds that the bank will have in the future.

I would like to give more information on the two distinguished Liberals that I was telling you about. They are the hon. senator Rivest and Mr. Forget. They said on an open line show on the CBC, which is as credible as these two gentlemen: "Mr. Rivest having revealed that the Minister of Intergovernmental Affairs and President of the Privy Council is preparing a major administrative and tax reform for Canada". This is Mr. Rivest speaking, a very good Liberal.

"Mr. Forget went on to say that he feared a no vote on the referendum-this is very important for Quebecers-would lead to a loss of control by the government of Quebec on subsequent events". That is, after the referendum. "This situation would create opportunities for initiatives, whether under the constitution or not, but which could, at any rate, considerably change the rules. It seems to me that, for now, the threat to Quebec lies

much more in this restructuring of the government-a vital issue-than in some constitutional matter".

I conclude with these comments, which confirm our apprehensions. Here, in this Parliament, as well as in the Langevin building, very important events are occurring, but they are not being publicized. A country is being built and changed without any debate. I think it is outrageous.

[Supply, June 1st, 1995]

Madam Speaker, it is a pleasure to take part in the debate on this opposition day, a debate that concerns the following motion:

That this House condemn the government's legislative agenda, which makes clear its intention to usurp provincial jurisdictions and construct an entirely centralized state, as can be seen from Bills C-76, C-88, C-46 and C-91, all designed to take substantial powers away from Quebec and transfer them to the federal government.

I also welcome this opportunity to take part in this debate because as the industry critic, I was involved in the drafting of this motion. In fact, we have four bills, three introduced directly by the Minister of Industry, that have certain implications which are very disturbing, both for Quebec and the other provinces. I hope that my colleagues, especially those in the Reform Party, will realize that what is happening here in Ottawa not only violates the legitimate aspirations of the people of Quebec but

also the legitimate aspirations of Canadian provinces that support decentralized government.

What makes this so disturbing is that this government acts so discreetly it is almost self-effacing. No fuss, no boasting, but meanwhile, it is carefully and almost secretly centralizing the powers of the Canadian federation here in Ottawa as no other government has done before in this country's history.

I will try to explain this process, starting with Bill C-46, which comes first both numerically and chronologically and which last fall, took a number of departments, including Communications, Consumer and Corporate Affairs, and amalgamated these to establish the Department of Industry, as it is known today. So far, so good, except that the Federal Office of Regional Development (Quebec) was maintained. When I say maintained, we should realize that for some time there were rumours that the office would be dropped.

In view of the deplorable and indeed disastrous state of Canada's public finances, the federal government, as you know, had to take a long, hard look at the situation and, in the process, it seems the very existence of the Federal Office of Regional Development (Quebec) was called into question because it could no longer provide financial assistance for small businesses. At the time, it had found its niche helping high tech companies but, because of budgetary cutbacks, all this had to be shelved so that the continued existence of FORD was in doubt. However, instead of getting rid of FORD, the government maintained this empty shell, which has now become a kind of conveyor belt, a Trojan horse, the federal government's favourite mechanism for getting involved in regional development in Quebec.

The mission of FORD is being changed. It will serve as a consultant to small and mid size high tech businesses, primarily in the area of exports. This is all very well, except it is already the case in Quebec. And the networking-and since you were at the Standing Committee on Industry recently, you know what I am talking about-that FORD can do as part of its activities, the Quebec Department of Industry and Commerce is already doing it. We have already dealt with this concern on the part of high tech business and high tech exporting businesses. This ground has already been covered. Instead of abolishing the Federal Office of Regional Development, it is being kept alive by further duplicating mechanisms that already exist in Quebec in the area of regional development.

Except that it is becoming the preferred vehicle, making agreements, as we will see, with the Federal Business Development Bank. This will enable the federal government to slip in and meddle even more blithely than before in the operations and the management of regional development. It will do so while ignoring the presence of the Quebec government and the regional development apparatus it already has and the equality of the Quebec government in the relationship. The federal government must remember that if it is going to intervene as a government, it must be to provide support and not to compete with the provinces. This is what we see in Bill C-46 with FORD remaining as we know it today in terms of SMB adviser-resource persons.

I move on now to Bill C-76. Briefly, because the main theme must always be taken into account, what is new about Bill C-76, which is the bill to implement the budget the Minister of Finance tabled a while back, is that it establishes a completely new concept, that of the Canada social transfer, which is the budget for social and welfare programs. A new concept is therefore in use, doubtless to assist in the advancement of the science known as the Canada social transfer.

According to Bill C-76 implementing the budget, the federal government will, over the next three years, reduce by $7 billion the public funds it gives to the provinces, which means a $2.5 billion cut for the Quebec government.

Not only are the cuts in question huge, the federal government, instead of being apologetic about it and paving the way for a true decentralization of powers following its financial withdrawal, is interfering more and more in the management of health, welfare and social programs and more recently, in post-secondary education. Also it announced that it will set national standards to which provinces will have to conform to avoid being further penalized.

It is a new way of interfering into areas of provincial jurisdiction. Section 93 of the Canadian constitution provides for a distribution of powers and areas of jurisdiction. The areas just mentioned-health, post-secondary education, social programs and welfare-are all within provincial jurisdiction. These areas, which affect Quebecers every day, are crucial to Quebec's distinct society in the Canadian federation. They are existential.

The federal government has no right to set national standards for Quebec. Furthermore, under clause 37 of Bill C-76, the federal government demands that its financial assistance be visible, which means that, from now on, the forms used by citizens must reflect the fact that the federal government contributed to such and such a program.

Not only is it withdrawing, not only is it cutting, not only is it setting standards, but now it boasts about it and demands to be praised by the provinces so that citizens realize that the federal government doles out presents. This is the underlying philosophy: to show that it is giving presents to the provinces, as if it were not with the taxes paid by Canadians and Quebecers, and this is the normal state of affairs. As unconstitutional as these measures may be, it is normal for the Canadian government to be

redistributing money. Still, one should keep in mind that these measures are indeed unconstitutional.

The position of the official opposition is clear in this regard: it demands that the federal government withdraw from provincial areas of jurisdiction without any ifs, ands or buts. In other words, within the Canadian confederation, the official opposition demands that the constitution be abided by, and that the withdrawal of the federal government from social programs, health care, and education be offset by the transfer of tax points so that taxpayers do not end up paying more. It would balance out. The federal government would lose one or two per cent in taxes to the current province of Quebec, and thus the tax burden of citizens would not get heavier.

Therefore, we see that, with this second piece of legislation, Bill C-76, aimed at implementing the budget, the federal government keeps on attacking, and even intensifies its attacks against the provinces, especially Quebec, by setting national standards in the areas of health care, post-secondary education, social programs and welfare.

I now come to Bill C-88. Bill C-88 deals with internal trade in Canada. It is a matter which was the subject of an interprovincial agreement signed last year, on July 1st, by the provinces, the federal government, the Yukon and the Northwest Territories, and which is to come into force on July 1st, 1995. There is, in this agreement, a certain legal vagueness due to the wording of article 1710-which is at the heart of the agreement and could become the stumbling block-providing for mechanisms to settle possible disputes between two provinces, or between the federal government and one of the signatories; the least that can be said about these mechanisms is that they are somewhat lacking in clarity.

The reason is that the signatories agreed that any dispute settlement mechanism would be based on the good faith of the parties and would not, in any case, be of a legal nature. There was, on April 10 of this year, less than two months ago, a federal-provincial conference of provincial, territorial and federal ministers, in Calgary, where, we are told, nothing was said about the fact that there were new texts and new ways of doing things in the areas of dispute settlement mechanisms.

Yet, two or three weeks ago, the federal government came up, without any warning, without debate, with Bill C-88 where, in clause 9, it imposes or rather assumes powers it never mentioned to the parties and for which it was not mandated by said parties.

I will read clause 9, which will create quite a conflict because the federal government really assumes powers although, in the spirit of the agreement, it is solely one partner, equal to the other signatories. This question is extremely important and was called by the Premier of Quebec a "trade war measure". He did not mince his words. Given the credibility of the Premier of Quebec in this area, we can see the importance of what I talking about.

Clause 9, which is the main element of Bill C-88, reads as follows:

For the purpose of suspending benefits or imposing retaliatory measures of equivalent effect against a province pursuant to Article 1710 of the Agreement, the Governor in Council may, by order, do any one or more of the following:

(a) suspend rights or privileges granted by the Government of Canada to the province under the Agreement or any federal law;

(b) modify or suspend the application of any federal law with respect to the province;

(c) extend the application of any federal law to the province; and

(d) take any other measure-and this is important-that the Governor in Council considers necessary-what it means is to bring the province in step.

In subclause 9(2), they even make the following precision, and I quote: "In this section, federal law" means the whole or any portion of any Act of Parliament or any regulation order or other instrument issued, made or established in the exercise of a power conferred by or under an Act of Parliament".

Before the parties gave any kind of authorization, before any discussion or joint action, without any mandate, the Government of Canada, a legitimately elected government, unilaterally, arbitrarily and arrogantly decided to add a provision whereby it granted itself the authority to set any stubborn province right.

Just think what that could mean in the case of Quebec. Personally, that is one thing I hope Quebecers will seriously think about during the upcoming great consultation. This is the type of Canada we will have in the future where there will be only one real government, Madam Speaker, and it will be this government, arrogant, arbitrary, cut off from the people and ignorant of regional interests; the so-called provincial governments will become mere regional governments. Imagine what irreparable damage will be done to Quebec where we firmly believe to be, where we claim to be a distinct society within Canada with different habits, thinking patterns and background.

That clause, as others is typical of this government's way of doing things, in Ottawa, capital of Canada, a country soon to be centralized, unitarian, accepting no debate or consultation and no social debate, a debate which the Canadian population should demand, especially westerners. Without any social debate as we have in Quebec, a clause like this one could have serious consequences. The intent of that clause would certainly have a catastrophic impact on Quebec.

I am coming now to Bill C-91 which deals with the Federal Business Development Bank that will soon become the Business Development Bank of Canada. There again there was no consultation and no joint action. This showed a certain disregard for the industry committee of which I am vice-chair and which never made such recommendations, on the contrary. If there were a recommendation from the parliamentary secretary, it was basically to reduce the importance of the bank, to make it the bank of Canadian small businesses. It was to scale it down. But now, we are going to the other extreme, Madam Speaker, with the Business Development Bank of Canada, to which the minister gives a new mandate; it will no longer be a last resort for small business but rather intervene in programs supporting Canadian entrepreneurship.

Those words, which are neither defined nor specified in the legislation, will allow the federal bank, pursuant to clause 21, to intervene not only in federal organizations, but also in provincial ones and in regional organizations created by the Quebec government. That is still basically a way of interfering in the daily lives of the people in this country, and of the people of Quebec, without any mandate to do so.

For those who do not believe what we are saying, I refer to the March 30 article in which two well-known Liberals talk about the future of Canada.

[Agreement On Internal Trade Implementation Act, May 29th, 1995]

Mr. Speaker, I am very pleased to participate in the debate on this very important bill, which has almost gone unnoticed and has the potential to alter the very basis of internal trade in Canada. That is why I welcome this opportunity to speak on Bill C-88, an act to implement the Agreement on Internal Trade.

We will recall that this agreement is the fruit of very difficult, very strenuous negotiations that went on from 1987 to July 1994, less than a year ago, when 11 governments, together with the governments of the Yukon and the Northwest Territories, finally came to an agreement. The purpose of the agreement was obviously to enter into some kind of domestic free trade agreement for Canada.

This agreement affects 11 main fields of economic activity, which I shall list for the sake of clarity. These fields of activity are as follows: government procurement, investments, work

force mobility, consumer standards, agri-food production, alcoholic beverages, natural resources processing, communications, transportation, energy and environmental protection.

At this stage, I want to tell this House that the Bloc Quebecois, as the official opposition, is for internal trade and, in that sense, supports the bill. On the other hand, the Bloc Quebecois flatly rejects the role, powers and importance the federal government gives itself in this bill. And this is what we will be illustrating.

We disagree with this bill in three regards: first, the context in which this bill was introduced; second, the actual wording of clause 9, which is the main clause in Bill C-88; and third, the rationale behind clause 9.

First, with respect to the context in which Bill C-88 was presented, it is very shocking as it exemplifies this government's logic, its habit of making decisions without prior consultation with the provinces, preferring to do things on the sly, while at the same time having no mandate to do so. We learned from a reliable source that, at the last meeting of the federal and provincial ministers responsible for internal trade in Canada, which was held on April 10, 1995 in Calgary, the federal government never stated its intention and never received from the parties the mandate to do what is being proposed today.

Second point with respect to the context, although the parties agreed that the dispute settlement mechanism, which is often the stumbling block in this type of agreement, should be based on the good faith of the parties and not on judicial procedures, that is what the federal government chose to do, again without consulting anyone. It chose the judicial route through clause 9, to which I will come back in a moment.

Finally, still as regards the context, this bill shows how the federal government sees its role in internal trade and gives itself the power to interfere in interprovincial disputes, although this power is not granted anywhere in the agreement.

I now come to clause 9 which, as I said earlier, is the cornerstone of this bill. I will read it to you because it is worth reading. I can assure you that this clause will soon change the way this country is run. Through clause 9, the federal government gives itself the following powers:

9.(1) For the purpose of suspending benefits or imposing retaliatory measures of equivalent effect against a province pursuant to Article 1710 of the Agreement, the Governor in Council may, by order, do any one or more of the following: a ) suspend rights or privileges granted by the government of Canada to the province under the Agreement or any federal law; b ) modify or suspend the application of any federal law with respect to the province; c ) extend the application of any federal law to the province; and; d ) take any other measure that the Governor in Council considers necessary.

(2) In this section, "federal law" means the whole or any portion of any Act of Parliament or any regulation, order or other instrument issued, made or established in the exercise of a power conferred by or under an Act of Parliament.

Two phrases are worthy of note: "by order" and "pursuant to Article 1710 of the Agreement". I will look at this clause more closely with the emphasis on the words "by order".

Therefore, the governor in council may, "by order", suspend benefits or impose retaliatory measures of equivalent effect against a province. "By order" means that, without consultation, debate, or resolution of the House of Commons, the rights or privileges granted by the Government of Canada to said province at fault may be suspended under the agreement or a federal law.

The governor in council may, "by order", modify or suspend the application of any federal law with respect to the province. The governor in council may, "by order", extend the application of any federal law to the province. And, as if this were not enough, the federal government may, again without any mandate, "by order", take any other measure considered necessary.

This is why Premier Parizeau referred to this as a trade war measure. This is quite a statement, considering it comes from the Premier of Quebec.

There is also the reference "pursuant to Article 1710". Let me read you quickly the provision which, I feel, is the most important one of the 13 paragraphs of Article 1710.

Paragraph 7 reads:

In considering what benefits to suspend, or retaliatory measures to impose, the complaining Party shall: a ) suspend benefits or impose measures in the same sector as the measure found to be in violation of the Agreement; and b ) only if such suspension or imposition would be impracticable or ineffective, suspend benefits or impose retaliatory measures in other sectors covered by the Agreement.

We are referring to Article 1710 which implies that, if there is a problem with manpower mobility, and if it is not possible to impose a similar retaliatory measure against the province at fault, it is implied that retaliatory measures could be taken regarding natural resources, communications or investment, for example. This is what is provided.

It must be pointed out that this whole agreement, and particularly Article 1710, is very vague as regards the role of the federal government. Can the government intervene in a dispute between two provinces, once it is determined which province is at fault? This is not at all clear in the agreement as it is worded.

Given our Canadian history, we know how much the federal government resents any vacuum.

Now, we are faced with a legal vacuum. We know how much the federal government abhors a vacuum. Given the way it has used its spending and residual powers in the past, we can count on the federal government to take full advantage of vague wording in the bill. As a matter of fact, it just took the necessary means to be able to interfere freely to have unruly provinces toe the line.

Reactions have been quite interesting. The Minister of Industry, who is the minister responsible under the act, said that the official opposition's reaction is paranoid and that our remarks are weird. However, Manon Cornellier, who has been following this issue for years, questioned two officials of the internal trade secretariat, Mr. Lecherson and Mr. Knox, hours after the tabling of the bill.

Mr. Lecherson is a senior strategy advisor. When asked about the scope of the bill and its compliance with the intent of the agreement and the scope of the bill, he said: "As a matter of fact, the bill goes further than the agreement itself". Mr. Knox, who is the executive director of the secretariat, said: "In theory, the government could take retaliatory measures deemed appropriate in any sector, but that is very unlikely. They would be basically economic measures".

Now, we are dealing here strictly with economic issues. These remarks suggest that the federal government would even target social programs in order to make an unruly province, Quebec for example, toe the line. That door has been opened, and that is why it seems legitimate to impute motives. Given the lack of openness of this government, we are justified in imputing motives.

There was an official reaction, and I want to quote paragraphs 3 and 4 of a letter Daniel Paillé, the Quebec Minister of Industry, Commerce, Science and Technology, sent to his Canadian counterpart, on May 10, 1995: "The government of Quebec thinks it is unacceptable, pursuant to a Canada-wide agreement where the federal government enters into a partnership with the other parties to an agreement and where the scope of action given to the various partners is well defined by chapter 17 of the agreement, that the federal government found it important to give itself such extended powers as those mentioned in clause 9 of the implementing bill. Therefore, the government of Quebec is opposed to this provision, which gives the federal government very extended powers that go beyond what is needed to implement the retaliatory measures provided for in chapter 17 of the agreement".

I think that is quite clear. We have to imagine what all this would mean in the normal course of events. Although a number of examples were given earlier, we could give some more in order to really show all the significance of the issue being underhandedly addressed here. For example, any province at fault could be denied federal subsidies. If Quebec, for instance, were to be found at fault in some hypothetical situation, Hydro Quebec could be prevented from selling its electricity to another province.

Natural gas shipments to a province at fault could be banned. This is a very serious issue. In terms of work force mobility, it could mean that workers from one province could be prevented from working in another province recognized as the party at fault in a dispute between these two provinces. These are powers the federal government is assuming, because nowhere in the agreement is it mentioned that Ottawa has to introduce such a bill.

This may not have been the government's intention, but if this bill is adopted in its present form, the federal government will be able to take such measures under clause 9, and that is what makes the situation so serious. Finally, we have reservations regarding the origin of clause 9. I was shocked when it was first drawn to my attention.

In fact, clause 9 is essentially identical to section 21 of NAFTA except for certain references to the fact that the latter is an international agreement. What the government did in clause 9 is to replace the word "country" that is found in section 21 by the word "province". As far as I am concerned, there is no better example of a lazy or careless government.

It seems too easy to copy almost word for word such an important document because the problems are different and the relationships that exist between sovereign countries are not similar to the ones that can exist between a central government and its provincial counterparts. I find it rather astounding that the government would take the liberty of just changing the word "country" for the word "province" while taking the opportunity to give itself enormous powers.

Perhaps there are visionaries in the Langevin Block-which is not impossible-who saw that there will soon be a need for an international treaty between the Government of Canada and the Government of Quebec and who thought that it would be better to save some time, money and energy and recognize immediately, in a rather subtle way, that Quebec would be party to an international agreement because the day is coming when Quebecers will have to deal officially at the international level with Canada as well as with the United States and other countries. This goes with the Bloc Quebecois's recent suggestion that there must be an economic association, that the closest ties must be maintained and that we must be good neighbours.

In closing, I think that clause 9 must be amended so as to reflect the spirit of the agreement and to limit the federal

government's intervention as an injured party, otherwise Bill C-88 is likely to create problems instead of solving them.

[Regional Development, May 29th, 1995]

Mr. Speaker, my supplementary is for the Prime Minister.

By refusing to renew the federal-provincial agreement on regional development, Ottawa rejected any form of dialogue with the Quebec government.

Will the Prime Minister recognize that the federal government is laying the foundations of another confrontation with Quebec by allowing the new Business Development Bank of Canada to sign agreements directly with organizations which come under Quebec's jurisdiction, and also by keeping the province from playing any role in the process?

[Regional Development, May 29th, 1995]

Mr. Speaker, my question is for the Prime Minister.

With its bill redefining the mandate of the Federal Business Development Bank, the federal government is once again going over the head of the provinces by assuming the right to sign agreements directly with organizations which come under the exclusive jurisdiction of the provinces.

How can the Prime Minister justify this new federal interference in regional development through the signing of agreements with organizations which come directly under Quebec's jurisdiction? Is this another example of what the Prime Minister calls flexible federalism?

[Business Development Bank Of Canada Act, May 29th, 1995]

Mr. Speaker, I am very pleased to speak on Bill C-91, an act to continue the Federal Business Development Bank under the name Business Development Bank of Canada. I want to draw your attention immediately to the fact that the legislation proposes to continue the Federal Business Development Bank. However, after my comments, you will see that this is hardly the case.

We oppose this bill. As the critic for industry, I oppose this bill for three main reasons, but also for another reason which my colleagues will tell you more about and which concerns regional development. The three main reasons we oppose this legislation are the name change from Federal Business Development Bank to Business Development Bank of Canada, the change in the status or purpose of the new Business Development Bank of Canada, compared to that of the original Federal Business Development Bank and, finally, the issue of the new so-called hybrid capital instruments, which we will discuss in greater detail.

I will first deal with the name change from Federal Business Development Bank to Business Development Bank of Canada. The issue was discussed by members of the Standing Committee on Industry, after the parliamentary secretary made that proposal somewhat unexpectedly. The committee did not reject the suggestion for reasons of courtesy and also to avoid any conflict. However, even Liberal members seemed uncomfortable with the idea. The proposal made by the parliamentary secretary sought to change the name Federal Business Development Bank to Canadian Bank for Small Businesses.

Again, committee members accepted that proposal out of respect for the parliamentary secretary. If you read the report tabled by the committee, you will not see any mention of that proposal. That recommendation was made out of the blue, and everyone felt that the name Canadian Bank for Small Businesses was too restrictive. The fact is that the Federal Business Development Bank is involved in the financing of more than just small businesses. Consequently, the proposed name was too restrictive and should have been rejected, but was accepted out of courtesy.

Now we find ourselves at the other end of the spectrum with the name Business Development Bank of Canada. Please note that the French name of the new bank makes no reference to "business". So what we have with this bill is a switch from small businesses alone to the development of the whole of Canada. And this is just as extreme. I do not think that Canada's development is related to a bank, nor is that of Quebec. All this is to say that the original name, Federal Business Development Bank, is well-known and respected in Canada and Quebec, and we do not see why it should be changed. Such a change would

result in a waste of money and energy, given the costs generated in terms of paper burden, logos, etc. Again, this change would result in useless spending and a waste of energy.

The name Business Development Bank of Canada is no better than that of Canadian Bank for Small Businesses.

The second point that deserves criticism, and a fundamental one, is the change of mandate implied by the so-called maintenance of the Federal Bank, which is becoming the Business Development Bank of Canada. This is being done without debate or consultation. It has come out of nowhere and is not based on any mandate. Nobody asked the federal government to change the name of the Federal Business Development Bank. This is done in a routine manner, on the sly, by administrative means, the way this government likes to do things; and that may be the Canada of the future, where things will be done in a routine manner, on the sly. They have come up with this proposal that has nothing to do with what the proceedings of the Standing Committee on Industry, of which I am the vice-chairman, led us to expect. There was no recommendation to that effect.

Previously, the Federal Business Development Bank had a very specific mandate as the last resort for small and medium size businesses. Its primary concern was the development of small and medium size businesses, as stated in section 20(1)(b) which specified that the borrowing legal entity could get a loan if: "credit or other financial resources are not otherwise available to that person on reasonable terms and conditions".

That is what led the Federal Bank to be described as a last resort bank. After one or two refusals at the hands of lending institutions, the borrower, provided it had a good record, could get a loan from the FBDB, once those conditions were met.

At that time, the federal bank was concerned only with economic development through the assistance provided to small and medium size businesses. As we can see in subclause 4(2) of the Business Development Bank of Canada Act, the purpose of the bank will now be to support Canadian entrepreneurship. In carrying out its activities, the bank must give particular consideration to the needs of small businesses.

What is being proposed is a far cry from the last resort bank totally dedicated to small businesses development in Canada. As we will see later on with my colleagues, the scope of the bank's activities is being extended. Clauses 20 and 21 of the bill allow outright interference in everything related to development in Canada, at the expense of provincial governments, and more particularly the Quebec government, by promoting regional development in Quebec's stead by way of unconstitutional or virtually unconstitutional dealings, with Quebec parties.

We already know the Canadian government will try to entice Quebec institutions and companies by telling them: if you want our money, you should ask an equal amount from the Quebec government; if it refuses, that will put an end to our involvement. We can see through that kind of trickery, specially on the eve of the referendum.

If Quebecers vote no at the next referendum, it is that kind of centralist instrument that will be used in the Canada of the future.

With Bill C-91, the bank will not be a last resort bank but a complementary lender to other traditional banks on the market. It will be empowered to make agreements with any organization to become its agent in order to provide services, programs, and financing. It will also be allowed to set up lending consortiums. This is a far cry from the development of small businesses. Those lending consortiums could include both private and public partners.

We think that the complementary role of the Business Development Bank of Canada should be limited to filling the gaps on the market and thus improving the situation. We should specify that its primary role and mandate is to meet the needs of small business, as is said in the act.

Before I conclude, I would like to touch briefly on the new so-called hybrid capital instruments. That means that the federal bank will be able to tap private capital instead of relying solely on government funds, as it has up to now.

Nowhere is it mentioned that, in order to attract private capital, there will be a fixed rate of return. So, the new bank may have to focus on profit maximization in order to provide the most interesting rates of return possible. This will mean a complete turnaround for the new bank, since the old one had fixed rates and could focus solely on economic development.

I want to draw the attention of members to clause 36 that provides for the confidentiality of the information held by the bank. It says that the bank has to protect the information it gathers.

Members have to remember that the committee recommended that information be systematically gathered from all financial institutions in Canada under the direction of the Bank of Canada, Statistics Canada and the Superintendent of Financial Institutions. This bill will hopefully include a provision in order for the new bank to co-operate in inquiries supported by Parliament.

By the way, I see that the Bankers' Association is against the bill, which is a good indication that the government has some very concrete plans in mind. We all know that the Liberal government and the bankers usually agree, but not this time. Why? Probably because the government has some other motives that are political and not economic, especially where the province of Quebec is concerned, in order first to influence the referendum and then to be the only one in charge of economic development in Canada, hence building a centralized and increasingly unitary state.

These are some of the reasons why we will vote against this bill.