Pierre Paquette

[Budget Surpluses, November 5th, 2002]

Mr. Speaker, looking over the finance minister's forecast, one realizes that not only is he using the same strategy as his predecessor, but he is also finding new ways to better hide surpluses, by establishing a new “economic prudence” reserve.

Will the Minister of Finance explain to us in simple terms what the difference is between a contingency reserve and an economic prudence reserve?

[Father Lindsay, October 29th, 2002]

Mr. Speaker, the entire Lanaudière region will be watching full of pride on Friday, when Father Lindsay receives the Ramon John Hnatyshyn Award for Voluntarism in the Performing Arts, during the ceremony for Governor General's Performing Arts Awards.

Appointed head of the Jeunesses musicales de Joliette in 1957, a founder of the Festival-Concours de musique de Lanaudière in 1961, he founded the Lanaudière musical camp six years later. That same year, he created the Centre culturel de Joliette, which won the ADISQ award that year for broadcasting. In 1978, he founded the famous Festival d'été de Lanaudière, of which he is artistic director.

For almost half a century, a great many young and not so young people from Lanaudière and Quebec have become hooked on classical music, thanks to him.

Father Lindsay, the musical and artistic communities of Lanaudière and all of Quebec congratulate you, and thank you.

[Canada Pension Plan, October 22nd, 2002]

Mr. Speaker, I thank the hon. member for his question. First of all, I thought it was important to give some background, since this episode goes back to the early 1980s, and to deal more particularly with Mr. Parizeau's position, which still seems strikingly relevant today.

As a matter of fact, I think that the investment board will be a powerful instrument for the development of the regions in Canada, just as the caisse has been for the regions in Quebec. We should not forget that, obviously, the caisse's mandate is to make sure the savings of Quebec's workers are well managed and to maximize returns.

But it is also concerned with economic development, and it wants to make sure that projects that are structuring, innovative, and generate jobs but need a little financial help see the light of day. Mr. Parizeau was talking about risk capital, a concept that was not very common back in 1982.

This was the case for Quebec. It is still the case now. Certainly, variations in the stock market affect both the return of the caisse and the return of mutual funds in general. It manages well despite all, in the medium and long term, relatively better than these funds. However, we must remember one thing, and this should be a lesson for this board that is being put in place; the management of the caisse is independent of political authorities.

Of course, it is an institution that is part of Quebec's development, that has responsibilities toward the development of the Quebec economy, and this is quite understandable. It would be pointless for the caisse to get huge returns while impoverishing workers who are also contributing. This difficult balance is the responsibility of the caisse's managers.

I will add one last thing. Partners from the labour market also sit on the board of the caisse. This is also a lesson for the investment board. There are representatives of the Confédération des syndicats nationaux, the Fédération des travailleurs et des travailleuses du Québec, and of the Conseil du patronat. All these members of the board reflect Quebec's realities and are thus looking for a balance between the return on the savings put into the caisse and the return on investments made by the Caisse itself.

[Canada Pension Plan, October 22nd, 2002]

Mr. Speaker, as I was mentioning, this bill seems to complete the transfers that have already been made for the Canada Pension Plan assets. Therefore, we are most happy to support this bill, but this allows me to come back to a less happy page from Canada's parliamentary history, when the Senate was considering Bill S-31, in 1982.

The purpose of that bill was to regulate the activities of the Caisse de dépôt et placement. This allows me, as I mentioned, to come back to this part of our history. I consulted a fairly recent book, written by Pierre Duschene. It is a biography of Jacques Parizeau, in which the events surrounding Bill S-31 are related.

Allow me to read an extract from the book.

In March 1982, the Caisse de dépôt et placement increased its holdings in shares of Canadian Pacific. The Quebec institution came within a few decimal points of the 10% mark in controlling shares. It posed a dangerous threat of breaking the ceiling set for Paul Desmarais, who is, as everyone knows, the president of Power Corporation, by the company's board of directors. CP panicked and sounded the alarm. The Anglo-Saxon establishment mobilized and readied to launch an offensive against the caisse. The president of CP first obtained the support of the following companies: Bell Canada, Steelco, the Bank of Montreal, the Royal Bank, Dominion Textile, Nova, Inco, Hiram Walker, Consumers and still others. Then, he called on Pierre Elliott Trudeau, the Prime Minister of Canada, and asked him to stop the Caisse de dépôt et placement. At the same time, the president of the Toronto Stock Exchange met with directors of three other Canadian stock exchanges, Vancouver, Montreal and Calgary, to prevent francophone shareholders from gaining control of CP. “I took this initiative because it seemed clear to me that what was happening here, what Paul Desmarais was doing, and the position of the Caisse de dépôt—”

Obviously, this is the president of the Toronto Stock Exchange talking.

—it was clear that this would become a cause of concern.

The wall erected around CP transformed it into an impregnable fortress. The English speaking establishment formed an alliance and then attacked, using the Parliament of Canada. In the night of November 2, 1982, the government of Pierre Elliott Trudeau introduced a bill in the Senate, Bill S-31, the Corporate Shareholding Limitation Act, which was specifically aimed at the Caisse de dépôt et placement du Québec, although not mentioning it by name. Bill S-31 made it impossible for any crown corporation to own more than 10% of the shares of any company involved in interprovincial transport.

Thus the caisse's hands were tied, and it could not purchase the CP shares.

In the eyes of Jacques Parizeau, the finance minister of the day under René Lévesque, this was an incredibly crude manoeuvre. At the behest of CP and Ian Sinclair, its chairman of the board, the federal government tabled a bill in the Senate.

And we must not forget that Ian Sinclair was Pierre Elliott Trudeau's father-in-law—

These are Jacques Parizeau's words here.

—a man who was the incarnation of the old guard of the corporate world.

This is still Jacques Parizeau speaking. Reading on:

The very evening that the bill was tabled, Jocelyne Ouellet, the woman in charge of the Quebec bureau in Ottawa, was informed. Jacques Parizeau rallied his troops. Jean Campeau, then president of the Caisse de dépôt et placement, was on side, and the caisse, which had 9.97% of the CP shares, set up a defence strategy in conjunction with the finance minister. Despite the Conseil du patronat's support of Bill S-31, the influential Montreal chamber of commerce adopted a position clearly opposed to this federal initiative. Its director, André Vallerand, and its chairman of the board, Serge Saucier, set out to defend the Caisse. Serge Saucier recalls “the corporate world rallying round in defence of a body that was becoming a major force for the Quebec economy”.

This is perhaps the most tangible sign that can be found in the contemporary history of Quebec of a body that did something for Quebec, for its economic development, so much so that people came to its defence, saying “Listen, we have something that works well. Hands off. Leave it to run itself”.

The fight to sway public opinion had begun.

André Ouellet, the current president and chief executive officer of Canada Post, who was then the federal Minister of Consumer and Corporate Affairs, inflamed the situation once again by declaring before the Senate Committee on Bill S-31 that the fund was practising indirect socialism. For the first time, he recognized publicly that the Caisse de dépôt et placement du Québec was the main target of Bill S-31. This bill was swiftly denounced by the francophone media as a scheme by the English-speaking business establishment to defend its turf against francophone investors. For its part, the Liberal Party of Canada felt increasingly isolated.

This would be neither the first nor the last time. It also says:

Other federal parties opposed the bill. Senators who were studying the bill were informed that Jacques Parizeau would come to Ottawa to criticize the legislation before them. Since the birth of Canadian Confederation, more than 100 years ago, it could not be remembered when a provincial finance minister had ever taken such a step. On the morning of November 25, 1982, the day Jacques Parizeau was to come before the Senate, Parliament Hill was in turmoil.

If you will allow me, I would like to read the presentation of Mr. Parizeau on Bill S-31. It was delivered on December 7, 1982. I will read the comments of Mr. Jacques Parizeau, the then Finance Minister, on Bill S-31. He said:

Bill S-31 does not impact only Québécair. It affects numerous operations of the government and its crown corporations. For instance, the transport minister has already referred to the participation of the Government of Quebec in Sonamar and Les Entreprises Bussières. This bill may also have an impact on the SGF, the SDI and even SOQUIP. However, the Caisse de dépôt et placement du Québec is obviously the main target of this bill. First and foremost, this legislation aims at preventing the Caisse de dépôt et placement du Québec from acquiring acquiring major holdings, first in Canadian Pacific and eventually in numerous other companies. More specifically, this bill protects the traditional Canadian establishment against intrusions by the CDPQ and it even succeeds in providing this establishment with the means necessary to disqualify bona fide investments now being made by the Caisse de dépôt and inflict potentially significant losses on the Caisse de dépôt and pensioners in Quebec.

Of course, the Caisse de dépôt administers the Régie des rentes du Québec.

This bill introduced in such a hurry really seems to protect the management of Canadian Pacific. The Caisse de dépôt had acquired very close to 10% of the shares of that company, and as soon as that threshold was exceeded, the agreement between Canadian Pacific and Power Corporation, controlled by Paul Desmarais, under which the limit imposed on Power for the shares of Canadian Pacific was set at 15%, was changed.

Of course, the federal government had to see that Canadian Pacific would not experience the suspicious fate of being threatened in its traditional control.

The act has of course much broader consequences than just trying to create an impossible situation at Quebecair and to consolidate Canadian Pacific's management.

Any company that would want to avoid the Caisse de dépôt—or the SGF for example—taking a significant share of its capital stock could, to protect itself, try to buy an interprovincial or international transportation company, no matter how small, or create one.

By contrast, when the Caisse de dépôt wants to associate itself with a private group by holding more than 10% of the shares, that group will have to first pledge that it will not invest in transportation, for an indefinite period. In any case, the shares that the caisse could, from now on, acquire in the targeted companies, cannot be voting shares, even though the caisse were to hold less than 10%.

This voting right that can be enjoyed by any shareholder, including foreign investors, is removed in the case of any provincial Crown corporation.

Clearly, Bill S-31 is likely to significantly hinder the operations of the Caisse de dépôt. This is not only about control operations, but about the development of businesses. Some businesses that are experiencing major growth could count on an increasingly important influx of venture capital from the Caisse de dépôt, up to the 30% stock limit provided under the act. This influx of venture capital is now seriously impeded. We are thinking, for example, of the new container company Sofati, which was just created in Montreal--

—incidentally it is doing very well—

--and whose successes are already remarkable. The bill restricts investment opportunities for the Caisse de dépôt in this type of businesses. At the same time, foreign competing corporations are allowed to control such businesses, as mentioned in November 6 edition of the daily The Gazette, which announced that the Compagnie Maritime Belge had acquired 50% of the stocks in Dart Containerline, a Montreal company.

The same influx of venture capital is also jeopardized in the case of Sonamar or any other business in which the SGF, for example, could take an interest.

No doubt the federal government will allow for exceptions, if it sees fit to do so. But it will then be the one that will decide the major operations of the Quebec government, of the Caisse de dépôt and of other Crown corporations, and if it reserves the right to allow for exceptions, it will also have the right to rescind them.

It is only by investing abroad in a significant proportion that the Caisse de dépôt can continue to fulfill its role of good manager and avoid the kind of trusteeship the federal government wants to impose on it. The diversification of investments in various activity sectors is a basic condition to the sound management of funds. The bill significantly changes the investment of Quebeckers' savings as we have known it and practised it for over 15 years. At the same time, it diminishes the performance and the return of the Caisse de dépôt, which has succeeded in getting a higher return than the Canada pension plan, ever since it was created.

And he went on:

We were already familiar with FIRA, the foreign investment screening agency, and all the problems it caused to foreign investment. A few weeks after the government announced its intention to relax its regulations with regard to FIRA—even though it has not yet followed through on that—it decided, through Bill S-31, to more or less extend the FIRA policy to provincial government corporations, particularly to the caisse. This is exactly what it is: Bill S-31 creates a control mechanism similar to FIRA, except that instead of being applied to foreigners, it is being applied to the provinces, particularly to the Caisse de dépôt, which will not even be treated as well as a foreign investor, since it will not be able to vote with any new share it acquired in the targeted sectors. Bill S-31 is another FIRA, but this time it is directed against us.

Canadian Pacific is the bigges corporation in Canada. The Caisse de dépôt is the largest portfolio in Canada. Canadian Pacific is the most fundamental expression of the traditional establishment. The Caisse de dépôt, in cooperation with a large number of Quebec business people, supports business shares in the best interests of its depositors and of Quebec as a whole.

I want to read to you a last paragraph of this presentation by Mr. Parizeau.

Instead of choosing the development of Quebec, the participation of Quebeckers in large corporations through their savings and support for Quebec business leaders, the federal government preferred to protect its establishment and to take away the freedom of government institutional investors and provincial government corporations. It is difficult to imagine what kind of intellectual gymnastics can bring one to conclude that a profitable investment (because the Caisse de dépôt does not subsidize, it invests) that is beneficial to Quebec can be regarded as disadvantageous to Canada's economy. Unless, of course, what is beneficial to the establishment is equated to what is beneficial to the economy.

Under these circumstances, we have no other choice but to call on the government to withdraw this bill immediately.

That is what the finance minister of the day had to say when Bill S-31 was introduced in the Senate in November. As I mentioned, Mr. Parizeau made this presentation in early December.

In the end, the Senate committee rejected Bill S-31. One could have expected that following the debate—in the end, senators seemed to acknowledge the discriminatory nature of the bill—that would have been the end of it all. Unfortunately, and we hear less about this development, on November 3, 1983—one year later—the federal government, through the Minister of Consumer and Corporate Affairs at the time, came back and introduced a new, reworked version of Bill S-31, in the hopes, once again, of stopping the Quebec institution known as the Caisse de dépôt et placement from purchasing shares in different Canadian companies that were controlled by the Toronto establishment that Mr. Parizeau was referring to.

This time, it was the chair of the board of the Chamber of Commerce of Montreal, Serge Saucier, who led the fight in this second battle against the newly minted version of Bill S-31, and who rallied not all, but a large number of Quebec's French-speaking business people. At the time, this business community was just beginning to operate.

For example, Mr. Parizeau set up the stock savings plan, which allowed a number of companies to develop, because they were able to gain access to capital that they were never able to access before.

So, Mr. Saucier successfully mobilized the French-speaking business community at the time and, on November 23, 1983, La Presse published the list of 21 business leaders under the headline “St. James Street Calls for Withdrawal of Bill S-31”.

When Jacques Parizeau read this headline, he was understandably very pleased because, to him, this was proof that St. James Street, now Saint-Jacques Street, was now French. During the fall 1983 parliamentary session, the bill was finally and definitely scrapped.

This page in parliamentary history shows that, in the past—and in the present as well, sometimes—the federal government has been extremely petty in its dealings with Quebec's institutions.

I view, to some extent, Bill C-3 now before us as Quebec's revenge in terms of initiatives taken by the Government of Quebec through its successive finance ministers. It was true under Jean Lesage's Liberals, under the Union Nationale with Daniel Johnson, and then under Robert Bourassa and René Lévesque.

There is a degree of revenge for these political figures who, in their days, took initiatives that benefited Quebec and now enable Canada to draw inspiration from Quebec's experience to establish an institution that will foster economic development in Canada.

Of course, we are not taking the reductionist vision Pierre Elliott Trudeau may have had at the time, thinking that what is good for Quebec is bad for Canada. Let us hope that, this time, what is good for Canada will also be good for Quebec, even though Quebec's pensions are not administered by the board.

Again, this is some kind of revenge against history, and we hope that, as I indicated, this board will not only foster the economic development of Canada and Quebec, but also ensure workers in Canada a decent pension.

In this context, we have no problem supporting the bill.

[Canada Pension Plan, October 22nd, 2002]

Mr. Speaker, it is a pleasure to rise to speak on Bill C-3. This bill to amend the Canada Pension Plan and the Canada Pension Plan Investment Board Act establishes the Canada Pension Plan Investment Board. This board will be an investment corporation similar to the Caisse de dépôt et placement, which has been operating in Quebec since the mid-1960s.

The mandate of the board will be to invest funds received from the Canada Pension Plan so as to generate maximum return. The income derived from investment will enable the plan to pay pensions to Canadian workers.

As I indicated, this bill is warranted as it permits the transfer of all funds from the pension plan to the board. As I said, in this instance, the federal government keeps modeling its board on the Caisse de dépôt et placement, Quebec's success story.

This also provides me with an opportunity to address a bleaker moment in Canadian parliamentary history, namely the introduction in the Senate of Bill S-31 seeking to—

[Nuclear Safety and Control Act, October 22nd, 2002]

Mr. Speaker, I congratulate the hon. member for Terrebonne on her speech. Mine will, of course, be along the same lines as hers. I shall, however, try to bring in some new elements in order to enable this assembly to be in a position to make an informed decision.

Bill C-4 may seem somewhat innocuous, given the relatively few changes it makes, but when placed in a historical context, looking into both the past and the future, it can be seen that its scope is far greater than it may seem.

It has already been said, but I think it bears repeating, that the purpose of the bill is to amend the Nuclear Safety and Control Act to vary the classes of persons that the Canadian Nuclear Safety Commission may order to take measures to reduce the levels of contamination of a place.

As it stands, the Nuclear Safety and Control Act states that the Canadian Nuclear Safety Commission:

--may order that the owner or occupant of, or any other person with a right to or interest in, the affected land or place take the prescribed measures to reduce the level of contamination.

It can be seen that the terminology used here, that is “or any other person with a right to or interest in, the affected land or place” is far broader than what the new formulation proposes, which is simply:

--any other person who has the management and control of, the affected land or place take the prescribed measures to reduce the level of contamination.

Obviously, reference has been made to the banks in the debate, but there are many other funding bodies that might be affected by this amendment, might be relieved of responsibility for their investments. We are not talking of just any investment. It is not an investment in seal-packed potatoes or some kind of sweet snack, it is an investment in an extremely controversial industry. It is the nuclear industry.

Looking at our society here in the year 2002, it is somewhat of an anachronism to be amending existing legislation, although it has been around for some time, at the very moment that it is generally agreed that there is no future in developing the nuclear industry.

Why then relieve lenders of responsibility when they have until now been responsible for their investments in the nuclear industry—a very particular industry—at the very moment that it is generally agreed that nuclear industry is an energy source that is uncertain, to say the least?

Like the New Democratic Party, the Bloc Quebecois is also calling on this House to act responsibly by not amending this legislation at this time. The amendment put forward by my colleague from Jonquière is to that effect. It seems to me that it would make sense to adopt the amendment, so that the matter can be examined further.

We must bear in mind that the legislation, in fact these energy options, date back to the early and late 1970s. In the early 1970s, in 1973-74, there was a first oil crisis. This crisis caused the first major global crisis since World War II. I clearly recall reading about it in December 1974, in Le Monde diplomatique , which I read at the time. We experienced a crisis, the first major one since the Great Depression of the 1930s.

This had an incredible impact on the collective psyche, particularly in the western world, which had enjoyed phenomenal growth since 1945. The skyrocketing oil prices were immediately linked to very serious financial and structural problems. It will go down in anecdotal history, for instance, that the then Minister of Finance, John Turner, ran his first deficit in 1975, following the recession caused by this oil shock.

Unemployment grew substantially, and continued to grow until the mid-1990s. So, the danger of this oil shock was linked to a more serious danger, namely global economic instability.

The situation quickly got back to normal following the 1974-75 recession. However, we were hit by another oil shock in 1979, with the revolution in Iran.

The shah was overthrown and Ayatollah Khomeini became the leader of the Islamic revolution in Iran. There was another jump in oil prices, which reached $42 a barrel.

At the time, I was at the Université de Montréal and I was studying this issue. In fact, my masters thesis was on the cost of energy resources. I can unequivocally state that all the forecasts made by experts, both in Quebec and around the world, including in the rest of Canada, were to the effect that, by the year 2000, the price of oil would be around $90 a barrel.

We therefore turned to alternate sources of energy. For example, in Canada, the Alberta tar sands were developed to ensure that our country would be self-sufficient from an energy point of view. This initiative proved extremely costly for Quebec. All over the world, people looked at new sources of energy, and particularly nuclear energy. This did not occur exclusively in Canada.

In Quebec, we had the great debate on the vast hydroelectric projects around James Bay. These projects were initiated by Robert Bourassa, following the initial work done by René Lévesque as minister of natural resources, in the early or mid-sixties. So, it is in this context that nuclear energy became an option. This context no longer exists.

A barrel of oil currently costs around $23. Instead of being at $90, as was anticipated 25 years ago, the price of a barrel of oil has gone down significantly. Why? Because during the 1970s and 1980s, huge efforts were made in almost all western countries to conserve energy. Our cars now use less gas than they used to. We now have much more energy efficient systems. Our homes are better protected from the cold.

The result of this is that demand for energy resources has dropped worldwide, in spite of the tremendous economic growth experienced after the crisis of the early 1980s. We now find ourselves in a situation where nuclear fission has been ruled out not only from an environmental and safety point of view, but also from an economic point of view.

It seems to me that Bill C-4 is sending out a very wrong message to the population and to industry in general in Canada and in Quebec, but also to the entire international community. As we are debating ratification of the Kyoto accord, the Canadian government is proposing to this Parliament that we relieve financial backers of their responsibility as far as nuclear development is concerned. This is totally contrary to common sense.

I would also remind hon. members that these choices were made, as I have already pointed out, in the wake of recessions, first of all the recession of 1974-75 and then particularly the major one of 1981-82. It must be kept in mind that the latter was far more serious than the one in 1974-75, and was in part a result of the rapid rise in prices due to the Iranian revolution. It created an awareness of the fact that the model of development on which we had based economic development ever since World War II was in crisis. It was a major crisis, but not strictly caused by oil prices. On the contrary, it was caused by a general dysfunction, that is successive government deficits, very heavy inflation, disputes between businesses and workers on how the gain in productivity would be shared. It is, therefore, a far more complex matter and has taken just about 15 years to get over.

Remember that throughout the 1980s, the unemployment rate was extremely high, not just in Canada and Quebec, but all over the western world. For the most part, the situation has improved since 1995. Quebec, like Canada, is experiencing considerable growth. Parliament must not therefore pass legislation that is not only a step backwards, but that is no longer relevant in terms of the economy, the environment or safety.

For this reason, we propose looking into developing other sources of energy that are much more promising both in the short term and the long term. For example, setting up certain types of wind energy would create considerable employment.

We must remember that the government, as I just explained, has spent tremendous amounts of money, not only on nuclear energy, but more importantly on the oil industry. Every Quebecker has paid $27,000 out of his or her own pocket to develop the oil industry in western Canada. I would not want the House to make a decision today that would lead to the same type of problem.

Given the context, I think we must adopt an approach with vision, we must learn from past mistakes, and look to the future. In the context of the debate on the ratification of the Kyoto protocol, we must pursue the only position that is consistent: maintaining the legislation as is, and putting off the debate until after the debate on the ratification of the Kyoto protocol is over.

[Taxation, October 22nd, 2002]

Mr. Speaker, how does the Minister of Finance explain this different treatment for the various provinces when it was his government's mistake? The government is the one responsible for the problem.

[Taxation, October 22nd, 2002]

Mr. Speaker, the federal government's mismanagement in the matter of the mistake at the Canada Customs and Revenue Agency will cost Quebec nearly $500 million this year, and in excess of $2 billion over the next decade. While Ontario will refund only part of the overpayment over a 10-year period starting only in 2005, Quebec must pay back immediately.

Is the Minister of Finance prepared to reconsider his decision in this matter, and does he intend to show Quebec the same flexibility he showed Ontario regarding the overpayment refund?

[Quebec's Delegations Abroad, October 11th, 2002]

Mr. Speaker, does the Prime Minister realize that by being the only one to deny the existence of a fiscal imbalance and the usefulness of Quebec's delegations abroad, he is showing that he is not only isolated, but that he is also totally disconnected from the reality of modern-day Quebec?

[Quebec's Delegations Abroad, October 11th, 2002]

Mr. Speaker, business people expressed their support for the comments made by the Minister for International Trade on the importance to exporters of Quebec's delegations . The CEO of the Manufacturiers et exportateurs du Québec, Paul-Arthur Huot, said:

From a business point of view, having eyes and ears on a permanent basis abroad, having people in direct daily contact with the local market, gives us information on these markets that we could not otherwise have.

Are the simplistic statements of the Prime Minister on Quebec's delegations not another expression of his desire to impede Quebec's economic and cultural development in the world?