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Debates of the Senate (Hansard)

2nd Session, 35th Parliament,
Volume 135, Issue 73

Tuesday, February 18, 1997
The Honourable Gildas L. Molgat, Speaker


Tuesday, February 18, 1997

The Senate met at 2:00 p.m., the Speaker in the Chair.





Hon. B. Alasdair Graham (Deputy Leader of the Government) with leave of the Senate and not withstanding rule 58(1)(h), moved:

That when the Senate adjourns today, it do stand adjourned until tomorrow, February 19, 1997, at 1:30 p.m.

The Hon. the Speaker: Honourable senators, is leave granted?

Hon. Senators: Agreed.

Motion agreed to.


Legal and Constitutional Affairs

Committee Authorized to Meet During Sitting of the Senate

Hon. Sharon Carstairs, Chair of the Standing Senate Committee on Legal and Constitutional Affairs, with leave of the Senate and notwithstanding rule 58(1)(a), moved:

That the Standing Senate Committee on Legal and Constitutional Affairs have power to sit at 4 p.m., tomorrow February 19, 1997, even though the Senate may then be sitting, and that rule 95(4) be suspended in relation thereto.

The Hon. the Speaker: Is leave granted, honourable senators?

Hon. Senators: Agreed.

Motion agreed to.



Intergovernmental Affairs

Changes to Section 93 of Constitution Requested by Province of Quebec-Guarantees of Linguistic and Educational Rights for Anglophone Minority-Government Position

Hon. John Lynch-Staunton (Leader of the Opposition): Honourable senators, in a long interview in The Gazette dated February 18, 1997, the Minister of Intergovernmental Affairs appears to have answered - in part, anyway - a question which I asked the Leader of Government in the Senate some short while ago:

He said anglophones need guarantees that their right to run their own school boards will be protected. But those guarantees need not be written in the constitution, he said. "I never talked about constitutional guarantees..."

The only interpretation that I believe can be given to this statement - which I assume is government policy - is that the Liberal government is ready to substitute linguistic schools for confessional schools without a constitutional amendment which would provide the same guarantees to the proposed system that are afforded to the current one.

My question is a simple one, requiring a "yes" or "no" answer, I would think: Is this an accurate interpretation of Mr. Dion's remarks or not?

Hon. Joyce Fairbairn (Leader of the Government): Honourable senators, I have been attempting to obtain a full answer to my honourable friend's question -

Senator Lynch-Staunton: Read The Gazette.

Senator Fairbairn: It has been made clear consistently by the government that it is up to the Government of Quebec to build a consensus on any proposal they are putting forward within the Province of Quebec. That consensus, of course, includes anglophones within Quebec. Until that situation resolves itself, the federal government is watching the process, but will not be engaged in it until -

Senator Lynch-Staunton: I am talking about 800,000 anglophones. That is all. It is extraordinary. You said that you were watching the situation.

Senator Fairbairn: I said the federal government has indicated that, before any change can take place, there must be a substantial and broad consensus within the Province of Quebec, including within the anglophone community of Quebec, or the plan is not acceptable.

Senator Lynch-Staunton: That is not my question. My question is: Will the Government of Canada, whatever consensus may or may not be brought to the table, insist that it will not move on removing confessional schools and substituting non-confessional schools so long as the guarantees given confessional schools are not extended to the new system? That is the question. As a basic condition before approving any change, will the Government of Canada attach the extension of current guarantees to the new system, whatever consensus may be reached?

Senator Doody: Like they did in Newfoundland.


Senator Fairbairn: Honourable senators, in response to my honourable friend, I must confess that I have not had the opportunity to read the Montreal Gazette today. I will undertake to speak to my colleague and read the article. Then I will endeavour to obtain an answer for my honourable friend.

Senator Lynch-Staunton: I hope the Leader of the Government in the Senate will appreciate that this should not be the decision of one minister, but that this should be government policy.

In any event, Daniel Johnson, the leader of the Liberal Party in Quebec, calls the Quebec government's plan "a recipe for disaster." Mr. Johnson, in referring to the Quebec government, says this about the proposal:

They want to destroy Canada. They want to show the process with the other Canadians doesn't work, so they picked the road that is likely to fail. I will not vote for failure. I will not vote for a process that is doomed from the beginning.

The Liberal Party of Quebec is the only province-wide federalist party in that province and one which Mr. Dion, in today's Gazette, publicly urges all eligible residents of Quebec to vote for.

Is it not in the interests of all Canadians for this Liberal government to pay heed to Mr. Johnson and his colleagues and to tell Mr. Dion to stop his academic musings which confuse more than clarify, and to instruct him that, only after guarantees equivalent to those presently in place are pledged by the Quebec government, will any amendment to section 93 be considered.

Senator Fairbairn: Honourable senators, in response to Senator Lynch-Staunton's request, I shall seek clarification from Mr. Dion.

Senator Simard: From the government.

Senator Fairbairn: On the question of Mr. Johnson's comments, clearly, the position of the official opposition in the National Assembly of Quebec indicates that no consensus has been reached on the Quebec government's amendment process. That is precisely what the government, through Mr. Dion, have been indicating - that they will be expecting any further activity to take place only through the kind of consensus which is not evident at the moment and which, according to Mr. Johnson, does not exist.



Changes to Section 93 of Constitution Requested by Province of Quebec-Application of Precedent Established in Newfoundland-Government Position

Hon. Marcel Prud'homme: Honourable senators, we cannot have a double standard. When we debated in the House the constitutional amendments in Newfoundland, members who voted in favour of the proposal repeatedly pointed to the huge consensus: How can you oppose the views of a province where a referendum has been held and where the government passed the motion unanimously? Two debates were held in the House. First, a vote was held, and second, it was unanimous.

Does Mr. Dion intend to proceed differently because the Province of Quebec is involved this time? Does he intend, on an issue as important as this, to apply the same logic applied by the Liberal majority in the debate on constitutional change respecting the guarantees that part of the population of Newfoundland thought it had, and realized too late it no longer did?


Hon. Joyce Fairbairn (Leader of the Government): Honourable senators, as I indicated to Senator Lynch-Staunton, the government has consistently said in reference to section 93 that it is up to the Government of Quebec to demonstrate a clear consensus, and that includes a clear consensus within the anglophone population as well. As of today, reading Mr. Johnson's statements and the statements of others, that consensus does not exist.


Senator Prud'homme: Honourable senators, in the same vein, my classic education, in philosophy, was in Sept-Îles. I was not a great student in some subjects. They said I was fairly good in logic, though. You say, there has to be a consensus. This is where I will distance myself somewhat from Senator Lynch-Staunton's remarks. There has to be a consensus in the anglophone community as well. I see a double standard in this case. In Newfoundland, no consensus was reached among the Catholics and the Pentecostalists. However, we decided to take away the rights we thought these people could have in Newfoundland.

I am sorry that the Government of Quebec, after embarrassing itself linguistically, wants to drag us all into the issue of religion. If there are things that should not be touched, it is language and religion. And here is Quebec trying to draw us into both debates. That is their problem. We will talk about this later.

I do hope, however, that Mr. Dion will be clear and consistent and apply the same ideology he wanted us to apply in the constitutional amendments in Newfoundland. Otherwise, I think we are ready to consider these questions. Some people in Quebec seem to have more power than others and seem to be able to rattle Mr. Dion. He has no need to kowtow to either side in Quebec. His job is to ensure consistency in this country.

I hope you will tell him to apply the same consistency to his public statements. You saw what happened in Newfoundland. Let us follow the same approach.


Senator Fairbairn: Honourable senators, I agree entirely that Mr. Dion is seeking a national coherence every day that he serves in the position in which he serves.

I would point out to Senator Prud'homme that we are in a situation on this particular issue where even the National Assembly of Quebec has not had an opportunity to consider this issue, much less has there been any indication of consensus on the issue within the province.

The federal government has been clear that it is not engaged in that issue within Quebec. It is the Government of Quebec that is putting forward a proposal. Clearly, there is a great deal of emotion and contrary opinions being expressed in the early days of this discussion. It will be some time before the consensus will be reached, if at all. However, the National Assembly of Quebec has not yet been seized of this issue.



Alleged Misuse of funds by Minister-Description of Services Provided-Government Position

Hon. Orville H. Phillips: Honourable senators, my question is for the Leader of the Government in the Senate. I should like to read a description of the services provided to the Minister of Justice by Earnscliffe communications for $160,000 as I believe they took place. The description is as follows:

The preparation of materials for formal news conference...detailed preparation for media activities... such as interviews on national television programming, et cetera...

Would the honourable minister say that this is an accurate description of the services provided to the Minister of Justice?


Hon. Joyce Fairbairn (Leader of the Government): The Minister of Justice, as he indicated in the House of Commons, explained the services that were provided for him.

I should tell Senator Phillips that the company charged with providing these services over a vast number of legislative matters in which the Minister of Justice has been involved was hired through a competitive bid process, and then its contract was extended. The minister himself has set out what the firm did for him.

Honourable senators, this was a proper contract. Guidelines that would apply to any minister of the Crown were observed. There is nothing untoward about the contract, and the use to which it was put by the minister.

My honourable friend obviously disagrees with the necessity for such a contract, or the necessity for the expenditure. That is a question of disagreement; it is not a question of fault.

Senator Phillips: Honourable senators, I notice that the minister very carefully avoided my description of the services provided. I take it, therefore, that she has no complaint about my description of the services provided.

I should like to point out to the Honourable Leader of the Government in the Senate that I read to her an excerpt from the testimony given at the Special Senate Committee on the Pearson Airport Agreements. As honourable senators know, the government described the activities of the same consultants performing the same services as "immoral and unethical." They even called them "a big rip-off."

Senator Gigantès: They were hired by the government.

Senator Phillips: I should like to ask the honourable minister why the Minister of Justice requires all of these services, which were considered a rip-off for everyone else? Is the Minister of Justice that much less able than the ordinary person that he must have such services? Has he considered supplying a "rip-off" for anyone else?

Senator Fairbairn: Honourable senators, I will carefully read the quotation that my honourable friend gave earlier and consider it. I simply repeat that the Minister of Justice has taken responsibility for the hiring of this assistance.

Senator Doody: He needs all the help he can get.

Senator Fairbairn: My honourable friend is using words to describe it. I will read my honourable friend's list of qualifications for this activity, and perhaps we can have another exchange.

Senator Phillips: On the same subject of the minister receiving preferential treatment, in the settlement of the Airbus affair, if the honourable minister will recall, yesterday's Hansard indicates that some of the $160,000 went to the Airbus affair. Why, then, was the Minister of Justice entitled to these communications experts when they were denied to the former Prime Minister? Here again, I think it shows the weakness of the present Minister of Justice in comparison to the former Prime Minister.

Senator Fairbairn: Honourable senators, I will not comment on the settlement in that case, which is being arbitrated by Mr. Gold. I simply indicate to my honourable friend that the Minister of Justice received advice under the terms of a contract that covered a wide range of activities in which he was engaged, and responsibilities that he had. I do not believe that a minister needs to apologize for seeking advice.

Senator Doody: Or for spending the taxpayers' money.

Senator Phillips: Does the honourable minister employ the same consulting firm?

Senator Fairbairn: Honourable senators, I have a terrific, multi-talented group of people working with me in my office, whom I appreciate a great deal. They provide for me all the help I require.

Hon. Gerry St. Germain: Honourable senators, by way of a supplementary question, does the minister recall Mr. Rock, or possibly Mr. Young, speaking of the rip-off, and unethical and immoral expenditures related to the Pearson airport agreements, as was pointed out so adeptly by the Honourable Senator Phillips? Does she not agree that, in a time of higher taxes, lost benefits and cutbacks of transfer payments to provinces, taxpayers are fed up with these horrendous bills that are coming through for spin doctors? Does she not agree that, in light of clawbacks on the pensions of elderly Canadians, among others, perhaps we should reassess this type of practice? If the Leader of the Government in the Senate can get along without spin doctors, why can the rest of the ministers not get along without spin doctors?

Senator Fairbairn: In answer to my honourable friend's question, perhaps I should hire someone to enable me to give a spin on the variety of subjects he propels in my direction.

Honourable senators, I am doing my best with what I have. I do not use - and would not use - the kinds of adjectives that my honourable friend or Senator Phillips is using to describe a minister of the Crown, in pursuit of his or her legislative responsibilities, being able to explain those activities to the satisfaction and for the benefit of the Canadian people. I do not subscribe to the language used by my honourable friend.



Minister's Remarks on Contents of Tobacco Products-Use of Public Relations Consultants-Government Position

Hon. David Tkachuk: Honourable senators, I noted with interest the previous question asked about the contract with Earnscliffe Communications. I note that Minister Dingwall is trying, quite unsuccessfully, to extricate himself from the consequences of speaking when he should not. It seems that the minister is attempting to avoid a lawsuit being levelled at the government for some remarks that he made, inaccurately describing a tobacco product as containing glass. He is now in the midst of drafting an apology to the company in question.

This is more a suggestion than a question, but perhaps some of the other immoral rip-off firms that the government could use would be the Capital Hill Group, or GPC, which were both criticized in the Nixon report as being firms that had done something wrong by working in a communication vein for the Pearson Development Corporation. I should like to also ask whether Capital Hill Group and GPC are presently being employed by other departments in the government?

Hon. Joyce Fairbairn (Leader of the Government): Obviously, senator, I cannot answer that question. However, I will pass the question along. I simply do not know. A vast variety of groups in Ottawa provide assistance. I am not aware of which ones are being employed by my colleagues, if any.



Answer to Order Paper Question Tabled

Proportion of Alternative Fuel vehicles operated by Department of the Environment

Hon. B. Alasdair Graham (Deputy Leader of the Government) tabled the answer to Question No. 50 on the Order Paper-by Senator Kenny.



Bell Canada Act

Bill to Amend-Third Reading

Hon. Peter Bosa moved third reading of Bill C-57, to amend the Bell Canada Act.

Motion agreed to and bill read third time and passed.


Excise Tax Act
Federal-Provincial Fiscal Arrangements Act
Income Tax Act
Debt Servicing and Reduction Account Act

Bill to Amend-Second Reading-Debate Continued

On the Order:

Resuming debate on the motion of the Honourable Senator Kirby, seconded by the Honourable Senator Moore, for the second reading of Bill C-70, to amend the Excise Tax Act, the Federal-Provincial Fiscal Arrangements Act, the Income Tax Act, the Debt Servicing and Reduction Account Act and related Acts.

Hon. John Lynch-Staunton (Leader of the Opposition): Honourable senators, it was not my intention to participate in this debate. However, I was provoked by some remarks made by Senator Kirby last evening. I will take only a few minutes to put the facts on the record.

In an effort to rally support for Bill C-70, which he introduced last evening, Senator Kirby, to my great astonishment, interpreted remarks which I made in this chamber on May 9, 1996, as an endorsement of the Liberal government's proposed harmonized sales tax. The words he quoted are the following:

Honourable senators, once again the Liberal government has not only adopted a Conservative policy...

While the words are accurate, the interpretation given to them is, I am afraid, deliberately misleading and absolutely false. I know that I am not the only one who cannot accept that such blatant distortions should be allowed to occur.

I shall read the full quotation from Question Period as reported on page 301 of Debates of the Senate of May 9, 1996.

Honourable senators, once again the Liberal government has not only adopted a Conservative policy which, like so many others, its supporters maligned during the election campaign of 1993 - I speak, of course, of the goods and services tax - but it has augmented it by more than doubling the GST...

My remark was a preamble to a question to the Leader of Government. It could not be clearer that I was pointing out that the Conservative policy to which I was alluding was the GST itself. Nowhere in my remarks does the word "harmonization" appear. To suggest otherwise is to get the debate on Bill C-70 off to a very poor start, to say the least.

I was tempted to raise a question of privilege over this because the deliberate, gross distortion of the meaning of anyone's remarks cannot be taken lightly. However, in the interest of saving time, I make this correction during this debate. I trust that adding the correction to the debate will eliminate any confusion over the meaning of my remarks, and I look forward to Senator Kirby's recognition of my clarification when he closes debate at the end of the second reading debate on Bill C-70.

Hon. John Buchanan: Honourable senators, I have been asked to allow Senator Kirby to answer some questions put to him yesterday evening. After he does so, I will have some remarks in response to his answers.

The Hon. the Speaker: Is leave granted for the Honourable Senator Kirby to proceed to answer questions now? This is not the normal procedure.

Hon. Senators: Agreed.

Hon. Noël A. Kinsella: It should be clearly understood that Senator Kirby's remarks will not conclude the debate.

The Hon. the Speaker: Honourable senators, is leave given to allow Senator Kirby to answer questions put to him yesterday evening?

Hon. Senators: Agreed.

Hon. Michael Kirby: Honourable senators, Senator St. Germain asked a question of me last night and I agreed to get back to him with the specific numerical value. He asked what the total amount of the transition assistance package to the provinces under the HST would be if all provinces participated. He raised that question in the context of the fact that the assistance going to the three Atlantic provinces which are now participating in the HST is approximately $700 million.

If all the remaining provinces of Canada participated in the HST, the total amount of assistance would be between $1.5 billion and $1.6 billion. Since $700 million of that amount is being paid to three provinces, 45 to 46 per cent of the total assistance is being paid to the three participating provinces. Therefore, 54 to 55 per cent would be paid out if all other provinces decided to participate in the program.

In my speech last night I quoted from a public opinion poll. Senator MacDonald asked me for the exact reference to the poll. I am prepared to go further than that; I am prepared to table the document on which I based the facts in my speech. The document is entitled "A Public Opinion Survey of Atlantic Consumer Response to Harmonized Sales Tax Proposals." As I indicated last night, the survey was done in the last week of January. I am happy to table this with the clerk.

The Hon. the Speaker: Is leave granted for Honourable Senator Kirby to table this material?

Hon. Senators: Agreed.

Senator Buchanan: Honourable senators, I have followed the debate and negotiations leading to the HST - or the BST - for many years. In fact, eight years ago, when the provinces were first asked to blend or harmonize provincial sales taxes with the GST, and I was premier of Nova Scotia at the time, their answer to the former federal Conservative government was "no." The reasons for not agreeing to a blended tax at that time are as valid today as they were then.

Last fall when the initial agreement was signed, it appeared, at first blush, that this may not be a bad arrangement for our three Atlantic provinces. After all, when you have a reduction from approximately 18.7 per cent in Nova Scotia and New Brunswick, and from over 19 per cent in Newfoundland, to 15 per cent, simple arithmetic indicates that it is not a bad arrangement.


The problem, of course, was that, when we first heard about the deal made by the three premiers, very few of the details were made known. I suppose it is understandable that the people in our three provinces would say immediately, as they did at that time, "This does not sound like a bad deal." In fact, I commented to myself, "This may not be so bad." Of course, no details were known at the time. It was not known how it was to be implemented or what the parameters would be. Therefore, total judgment on the deal had to be set aside until we learned more about it.

Prince Edward Island was wise enough not to enter into the deal. In fact, I have a document in my hand which indicates why Prince Edward Island refused to do so. It must be remembered that at that time the government of Prince Edward Island was Liberal. The committee, established in Prince Edward Island to engage in a detailed inspection of what this new BST or HST was all about, determined that it was not good for Prince Edward Island. After considering the matter, the committee came to the conclusion that the Province of Prince Edward Island should not harmonize its sales tax with the federal GST. The committee believed that the sales tax harmonization proposal would not be beneficial to the province and its people. As well, the committee concluded that harmonization would result in diminished provincial control over a major revenue raising measure.

The committee also recognized that non-harmonization could have, potentially, a negative impact on some sectors of the island economy. Down the road, the government may need to make adjustments. Therefore, the committee recommended that the Government of Prince Edward Island not enter into the sales tax harmonization agreement as proposed by the Government of Canada.

After the election, the new government, led by Premier Pat Binns, concurred in that recommendation. In fact, as I recall, the Legislative Assembly of Prince Edward Island concurred unanimously with the recommendation. The new government concluded that Prince Edward Island would not join with the other provinces in the Atlantic area to harmonize its sales tax with the GST, a profound and wise decision.

We must look now at why this happened. Why did these three provinces, without knowing all the details, enter into this arrangement? If we look at the debates in the Nova Scotia legislature at the time, we will see that, back in November and December, the Government of Nova Scotia did not have all the details concerning the arrangement. In answer to questions from members of the opposition, ministers replied, "We do not have those details yet. However, we are working with Ottawa to obtain them. When we get them, we will be able to discuss them." It is ridiculous for a government to sign an agreement when it has not received all the details. How can the people at home understand such an agreement when members of the government do not understand it? What happened?

When representatives of the three governments were here in Ottawa, they were given approximately $1 billion to compensate them for projected losses as a result of entering into this deal. The interesting thing about that is that the money was given to the three provinces in advance. Each of the provinces received a proportionate share of the $1 billion for the year 1997-98. Why is that? That money is to be taken out of the 1996-97 budget. However, it was paid to the provinces in advance for their projected losses.

First, no one was sure how much those projected losses would be. The losses were to begin accumulating on April 1, 1997, but the money was paid in advance. The Auditor General called it an accounting trick, which is exactly what it was. While I would not use the word "bribe" to describe it, some honourable senators may think that that is just what it was. The provinces were told, "Sign this document and we will give you $200 million immediately. We will follow that up in a year's time with another few hundred million dollars. At the end of the fourth year, we will make the final payment." That is a compelling argument for governments who do not know the details of a deal to which they are agreeing. I believe that is what happened.

The good thing is that the provinces have been able to put that money in the bank or invest it. They will get interest on that money, until they spend it. However, I do not believe that Premier Savage and the other premiers were aware of what would happen when the details were released.

I believe there is no question but that they knew the base would be widened. The provincial sales tax in Nova Scotia has a narrow base compared with that of the GST. In October of last year, without knowing the full details, they probably thought they would be able to exempt certain commodities and services from the base of the GST. They found out that that certainly was not to be the case.

Premier Savage came back to Nova Scotia saying, "This deal will be good for Nova Scotia because we will be able to reduce our overall taxes on sales by about 4 per cent. In addition, we will be able to create some 3,000 to 4,000 new jobs in Nova Scotia." The reason he gave for that projection was that a reduction in prices as a result of savings to the wholesalers, retailers and manufacturers in Nova Scotia would be passed on to consumers. Therefore, more consumers would buy goods and, as a result, create 3,000 to 4,000 more jobs.

That was easy to say. However, as we all know, it does not happen that way. Nor will it happen that way. Since then, Premier Savage has reduced his figure from 3,000 to 4,000 jobs to 3,000 jobs. We are all smart enough to understand that that will not happen in any of the provinces. In fact, with regard to the great savings mentioned back in October and November of 1996, savings that would be passed on to consumers, we now know that there will be no reductions in cost to retailers. In fact, the cost to implement the HST for all businesses in the three Atlantic provinces will be in excess of $100 million.


Therefore, when you consider it all in all, what at first blush seemed not to be a bad deal certainly has turned out to be no blush at all. It is a deal that is bad for Nova Scotia; it is a deal that is bad for New Brunswick and for Newfoundland. I will speak mostly about Nova Scotia because other speakers will be talking about the other two provinces.

It is very difficult to know where to start in a situation such as this. The bill itself is so convoluted; it is so misunderstood; it is so difficult to follow. I will pass on to you something interesting about the bill itself. One of the members of the Nova Scotia legislature gave me this information to indicate how badly misunderstood is this bill. Ministers of the Crown in Nova Scotia cannot even understand it themselves.

Senator Kinsella: Sounds like Ottawa.

Senator Buchanan: It is like Ottawa - the same political party in government. Listen to how convoluted and silly this bill really is. Lawyers will be making a great deal of money out of giving interpretations of this bill if it is passed in this chamber.

Finance Minister Bill Gillis is a nice man, a really good fellow. He was elected to the legislature of Nova Scotia in 1970. I had been there for four years at that point. I got to know Bill very well. Bill Gillis, a former geology professor, speculated that Brent Taylor had run out of decent arguments after he - Brent Taylor - had been questioning him.

In another gem, Kings North Tory George Archibald challenged Gillis to explain subsection 252.1(7) of the 354-page federal BST bill. It reads:

For the purpose of determining, in accordance with the formula set out in Paragraph 5(a), the amount of a rebate payable under Section 2 to a consumer of a tour package that includes short-term accommodation where a registrant makes a supply to the consumer of a particular tour package that includes short-term accommodation that is made available to the consumer for any night, any other short-term accommodation that is included in another tour package supplied by the registrant to the consumer and made available to the consumer for the same night is deemed to be included in the particular package and is not any other tour package.

Minister Gillis decided not to try to decipher the rambling subclause and simply said he would need to have details of it, and would then obtain an interpretation. No wonder! Who would understand that kind of rambling clause in the act itself?

Senator Stewart: Written by a lawyer?

Senator Buchanan: No doubt it was written by a lawyer, but that is the kind of situation we have with this bill which is now before the Senate.

It is very difficult to know exactly where to start with a bill like this, but let us try. There is no doubt in my mind nor, I think, in the minds of every reasonable person in this Senate, that the HST was put together in a very weak attempt to gloss over the Liberal promise of scrapping the GST. We could get into a debate about that, but I think we have enough quotable quotes from many senators who were in opposition at the time that the GST would be scrapped as soon as the Liberals formed the government. This, then, is their attempt to do just that: to harmonize the taxes throughout this country, and then say that the GST is gone.

Most of the provinces in Canada decided against participating in that movement. They decided that they would have nothing to do with this Liberal nonsense to get rid of the GST - but we did. In our three provinces, we agreed that we would do it. No other provinces in Canada agreed to do this but our three Atlantic provinces. The three provinces, without even checking anything, decided to go along with this federal charade.

What is hatching with this BST or HST tax? The base has been widened in Nova Scotia from the original PST base. I know something about that. We always attempted - as did previous Liberal governments of Nova Scotia - to ensure that our base would not attack the low-income and low-middle-income people. Here I am talking about one of the necessities of life - electricity. Some in this house, including my honourable friend Senator Kirby, knows that electricity has always been a problem in Nova Scotia. What happens with electricity? My goodness. Just a few months ago electricity rates on Nova Scotia power bills went up by 3 per cent. Now there will be a total 8-per-cent increase on power bills. In Nova Scotia, in order for power bills to be increased by the power corporation, the matter has to go before the Public Utilities Board. I will tell you right now that the Public Utilities Board in Nova Scotia would not grant another increase in electricity rates.

The substance of this bill causes an increase in such rates, but the increase does not need to be sanctioned by the Public Utilities Board; just by the Liberal majority in the House of Commons and in the legislature. They passed this measure without reference to the Public Utilities Board. Therefore, as of April 1, every Nova Scotian will be paying 8 per cent more on their electricity bills; on a necessity of life.

Some homes in Nova Scotia are heated by electricity, and some are heated by fuel oil. One might say that it is good that only the homes heated by electricity will have an increase in their power bills, because most of the homes are heated by fuel oil. Fuel oil is not included in the provincial tax base - but it is included in the GST base. Therefore, as of April 1, the price of another necessity of life will be increased by 8 per cent. Senior citizens, low- and middle-income earners, everyone, will pay an additional 8 per cent for fuel oil.

Most people today have a car. It is almost a necessity of life today to have a car. After April 1, everyone in New Brunswick, Nova Scotia and Newfoundland, when they drive up to the pump to fill their tank, will pay an increase in the cost of every litre of gas at the pump. Why? Because of the "Hated Sales Tax" - I mean the harmonized sales tax. It is hated, there is no question about that.

This tax grab will even hit postage stamps. Someone told me the other day that he intends to have a friend in Prince Edward Island buy him a whole year's supply of stamps, because the postage stamps in Nova Scotia will increase in price, but not in Prince Edward Island. Pat Binns, and Catherine Callbeck before him, were not too stupid when they decided, "No way."


I want to tell you that there are many people in New Brunswick and Nova Scotia who will hop-scotch right over to Prince Edward Island. They will be buying over there. They do not have to pay the HST over there.

As for getting a hair cut - and I still have enough on the sides which grows pretty fast - I will have to pay more for that or revert to being a "long-hair" as I was back in the 1970s when Senator Kirby was in the premier's office. I remember campaigning in the Annapolis Valley for a Tory candidate in the 1971 by-election. Fred Chisolm, our candidate and I went from door to door. Back then I had sideburns of some length and hair that came to the back of the collar. A gentleman came to the door and Fred said, "Hello, I am here with the leader of our party, John Buchanan, campaigning for the by-election." He looked at me and asked, "What is your name?" I said, "Buchanan, sir, I am the Leader of the Opposition." He said, "I am not going to vote for any long-hair who comes to my door." The side burns went up the next day.

Senator Bosa: Did you go back?

Senator Buchanan: I told him I would get it cut, and he voted for Freddie Chisolm.

The cost of children's clothing will increase in Nova Scotia, as will the price of other clothing. In fact, the cost of necessities of life will be increased in our provinces because of the HST.

It is interesting to note that while the Premier of Nova Scotia was talking about all the cost savings which will result from the HST, his own finance department came out with a document, which they probably wished they had been able to hide, that indicated the cost to consumers as a result of the HST would be $84 million.

Honourable senators, you and I know that when government departments state that there will be an additional cost of $84 million to the consumer, you can bet your britches it will be over $100 million. The cost to the ordinary consumers of Nova Scotia has gone up by approximately $100 million.

The premier, of course, has said that the overall cost will be reduced substantially because of the reduction in the cost of other goods. The other goods he is talking about are big-ticket items such as cars, stereos, even sports cars, and other items that ordinary people may buy every four or five years. Some of those big-ticket items, say, a refrigerator-freezer combination, may be purchased every 20 years. Even then, many people cannot afford them. The premier has said that sales of these big-ticket items will reduce the $100-million loss. As reasonable people, we know that that will just not happen. The $100-million figure that departmental officials say will be the loss to Nova Scotia consumers is the correct figure.

On the subject of jobs, Premier Savage and the federal government say that as a result of the tax credits and the rebates, many new jobs will be created in our provinces. The jobs they are talking about are jobs in the service and retail sectors. Let us look at what the retail sector has to say about this. An editorial from the Halifax Chronicle-Herald reads as follows:

Requiring inclusion of the BST in prices has been a bomb with both big and small retailers. The small guys are appalled by the cost of re-stickering all sorts of items manufactured with pre-tax prices affixed. The big chains say a country divided into tax-in and tax-out price regions is two countries for them: they would have to spend $100 million to set up separate channels for accounting, advertising, inventory and distribution because the basic reference point for every item in today's computerized retail systems is price.

For a small market like Nova Scotia, New Brunswick, and Newfoundland (just eight per cent of Canadian retail), spending all this loot just to display prices differently than elsewhere makes no sense (and only in Canada would we call this harmonizing).

Three out of ten provinces have agreed and we call it harmonizing. The editorial further reads:

The four governments which hatched BST say a final price on stickers is what consumers want and are ready to pay a bit more to get.

Who told them that? It goes on to state:

Retailers say $100 million is not exactly a hit, and is really the cost of a fig leaf to cover the Chrétien government's broken promise to replace the GST.

Honourable senators, those are not my words; they are the words of an editorial writer with the Halifax Chronicle-Herald, the largest newspaper in Atlantic Canada.

The following paragraph reads:

With a posse of angry retailers bearing down on his hearings, finance committee chairman Jim Peterson hinted Thursday that more flexibility on tax-in pricing was possible.

Well, we know what they did. They insisted on stickers being put on items. A fellow from Home Hardware told me the other day that he was informed that he must put the sticker price on everything in his store, whether tax-in or tax-out. He told me that he has, in one bin area, about 2,000 items all requiring a sticker. He was then informed that the government had decided that perhaps they were asking too much of retailers, so they had requested that stickers be put on each bin so that consumers would know what the tax-in, and tax-out was, and, on questionable items, the suggestion was to make available a conversion chart to consumers. I am sure you can envision people going into stores, and asking what "tax-in" and "tax-out" means. In response, the clerk will hand them a conversion chart. I am sure that honourable senators will agree that conversion charts are not the simplest documents in the world to understand.

That is what the federal government said would provide more flexibility. What it has done, of course, is cause more confusion than if they had left the damn thing alone.

The Halifax Chronicle-Herald editorial further states:

Nova Scotia's folksy finance minister, Bill Gillis, got more to the heart of the whole problem in announcing the concessions to retailers Friday: "We didn`t want to make things stupid."

That is an actual quote from the statement of the finance minister of Nova Scotia.

The editorial goes on:

Unfortunately, the BST-gang hasn't passed The Stupid Test yet. As Peter Woolford, vice-president of still-unhappy Retail Council of Canada, said Friday, the proposed changes could leave consumers more confused than ever because of all the conflicting ways stores will have to show prices.

Honourable senators may be interested to know that a substantial fine can be levied against anyone who does not adhere to this mandatory tax-in pricing.

For example, the mandatory tax-in price will be affixed to some items; in other cases, there will be a tax-out price on the item, but a tax-in price on the shelf or bin where the customer finds it. Cards, magazines and seed packages will have the usual printed-at-the-factory tax-out price. The item may come from a factory somewhere here in central Canada or elsewhere. It must be near a sign containing a conversion chart showing the tax-in price and tax-out price.

A consumer in a store may walk by an area where there are tax-out pricing stickers. In so doing, he could knock it to the floor. Somebody else may come by, not see it and accidentally push it under a table or a showcase. When the snoop from the federal government comes in to do the check, he will say to the retailer, "You do not have the sticker price up there or on the bin here, so we are taking you to court, and you will be fined $5,000." I am not making this up. That is how silly these situations can get. If you buy a party invitation that looks like a card, you may have to bring along a Halifax lawyer to determine whether the tax is in, out, or beyond human understanding.


Here is something else akin to the Quebec sign law: Tax-in prices must be equal to or greater than tax-out prices. No one will know the details. If you make up a card 8 inches by 6 inches saying "tax-in, this bin," and another one 10 inches by 10 inches saying "tax-out, prices," QED, the fellow from the federal Department of Finance, will say: "Ha, I just measured. This one is smaller than this one. Therefore, you will be charged, and you will have to pay $5,000."

The Halifax Chronicle-Herald further states that we face "raising the spectre of the Revenooers policing the malls of the region with measuring tapes."

The editorial goes on to state:

As Mr. Woolford says, "These are rules no store has ever used because no customer has ever asked for them." Even the grace period has its problems; it discourages stores to be the first on their block to comply. Mr. Woolford says stores which voluntarily tried tax-in pricing with GST - because people said they liked it - lost market share because people also thought their prices looked higher.

So the BST-Four -

Referring to the federal government and the three provinces.

- deserve some marks for trying to make a dumb idea work better. Unhappily, though, it still looks like the result will be the Bedlam Sales Tax.

One could say what the first interpretive words of the BST were. I think you all know what those are.

Here we have this silly situation where in three provinces we have the tax-in, tax-out. We have rebate situations that are not available in the rest of Canada. We have companies advertising throughout Canada that have to change their advertising systems to comply with the BST or HST laws in our three provinces, in all costing about $100 million.

Some senators may say that the Retail Council of Canada only represents the big national chains. Wrong. They do represent the national chains, but keep in mind that they also represent many retailers that are not totally national. Keep in mind that thousands of people in our provinces are employed with Sears, the Bay, Eaton's and Winners. If you look at the shopping centres in Nova Scotia, New Brunswick and Newfoundland, about 60 per cent of all the retail stores in our malls are franchises or chain stores of a national group. What does the Retail Council of Canada say? It will cost $100 million to change computerization to ensure that they do not get in trouble with the law and the tax-in, tax-out pricing. Well, they have to keep it in the other provinces as it is today. They do not need all the stickers that are asked for.

Honourable senators, one of two things will happen. Either that $100 million will be absorbed by consumers, or they will systematically begin to close stores down. They have estimated, and this is public knowledge, that up to 6,000 jobs could be lost as a result of this ridiculous and stupid HST, as The Chronicle-Herald calls it - 6,000 jobs in provinces where at the present time we have high unemployment. Premier Savage talks about 3,000 jobs, but he cannot even prove where the jobs will be. He just says, "Well, they will be here and we will get them." I will tell you, honourable senators, in our provinces there will be job losses as a result of the HST.

What else will occur as a result of the HST? We have talked about jobs. We have talked about the essentials of life. Let us look at some other areas.

I have an interesting document from the Maritime Life Assurance Company. You may ask what Maritime Life has to do with this. Their president, Bill Black, has already said that he agrees with harmonization. However, he does not agree with the way harmonization is being put together in our three provinces. In fact, the Retail Council of Canada, to be fair to them, agrees with harmonization, but they do not agree with, as Elsie Wayne called it, the "patchwork quilt" kind of harmonization that we are seeing.

Maritime Life and Assumption Life in New Brunswick will be hurt badly by this measure. A significant percentage of Assumption Life's mutual fund management occurs in New Brunswick. In fact, Maritime Life has said, in a document published by its law department, the following:

Maritime Life currently manages 22 segregated funds which are deemed to be residents of Nova Scotia. Under the proposed Bill C-70, only segregated fund trusts held in a harmonized province will pay the additional 8 per cent tax on the investment administration fee charged by the issuer. This would occur even if all of the segregated fund investors are residents of non-harmonized provinces. Therefore, investors will be less likely to purchase segregated fund products from Maritime Life or Assumption Life. This will place us at a distinct competitive disadvantage relative to other companies operating in Canada.

Maritime Life starts off by saying that the company is in favour of proposed tax integration country-wide. However, their concerns are as follows:

On full harmonization, Maritime Life and Assumption Life will be consumers of the 15 per cent harmonized sales tax (HST) in most business operations. We will therefore pay the tax on purchases, but because life insurance and annuity premiums are considered to be financial instruments, we will not charge the tax on most of our sales. A significant exception to this exists with respect to our segregated fund business.

Harmonization will significantly increase our tax burden with the full impact arising when a national harmonized tax is implemented. We accept this increase in tax because we believe the benefits of one integrated tax system to other sectors exceed the cost to ours. However, we do not agree with the treatment of the segregated fund business under a partially integrated sales tax system.

Keep in mind, to be fair to them, they agree to harmonization country-wide but disagree with it being a partially integrated sales tax system.

Maritime Life and Assumption Life, as national companies with headquarters in the Atlantic Provinces, feel it is important that we are not placed at a competitive disadvantage after harmonization simply because of our location. We, and many other companies based in Atlantic Canada, operate in every province and must be able to compete equally with companies situated in other provinces. We will not be able to do this in the segregated fund business after harmonization.

The document goes on. I will table it.

Senator Bosa: Do they give an example?

Senator Buchanan: Lots of examples. If I am doing business with Maritime Life in Halifax and investing in one of their segregated funds, I would pay the tax, the additional 8 per cent, in Nova Scotia. Why should Maritime Life subject its customers in Halifax to the 8 per cent tax when they can do the business in Ontario and not have to pay the 8 per cent tax? Assumption Life will lose business in New Brunswick because their customers will conduct their business in Ontario or Alberta. In fact, I am told by the people at Maritime Life that, already, they have had people say to them, "We will do our business in Alberta."


What will happen as a result? There will be lost revenues to Nova Scotia and New Brunswick, and the possible loss of jobs to Ontario and other provinces in the west. Why did our premiers not think of this when they agreed to this deal? They were caught by the dollar bills that were given to them last October. They did not know the details then.

One of the other problems with the HST involves senior citizens. This is a group which, for the most part at the present time, is struggling. People say that the BST will be of great help to seniors, that they will save 4 per cent on their goods and services. That is nonsense. How many of our senior citizens living in Nova Scotia will buy a new car every year or every two years? Very few. How many of our senior citizens who live in apartments will be buying refrigerators, freezers, washers or dryers? Very few. How many of our senior citizens will be buying any of these big-ticket items? Very few.

Owen Carrigan, a noted Nova Scotian who is president of a homeowners group, said that the only people who spoke in favour of the blended sales tax at an all-party committee meeting held on the matter were Liberal MLAs. That is interesting - a one-day hearing on a tax matter that will probably be the biggest tax matter to come before our provinces in years. The committee did not go to Cape Breton, Antigonish or down into the Annapolis Valley. They went nowhere but the red room in Province House, where the hearings were held.

However, there were 40 presenters who attended, including seniors, artisans, veterans, labour leaders and doctors. Are honourable senators interested as to why doctors were there? I will tell you why. It is because the doctors will be charged the 8 per cent, which they cannot pass on because it will be in violation of the Canada Health Act. It will not be paid by any rebate system because doctors are not eligible under a rebate system. They will have to eat the 8 per cent. They have said that, as far as they are concerned, there will be more doctors leaving Nova Scotia as a result of this HST. Some members of this place might say, "Well, they are high paid anyway." Why not tell them that when you have a stomach ache, or when you have to go to the doctor for a more serious problem for yourself, your children or your spouse? Doctors will be affected by this measure.

The Hon. the Speaker: I regret to interrupt the honourable senator, but his allotted time of 45 minutes has expired.

Senator Buchanan: Your Honour, I seek leave of the house to continue my remarks.

The Hon. the Speaker: Is leave granted, honourable senators?

Hon. Senators: Agreed.

Senator Buchanan: Retailers, postal workers, home builders and municipal politicians were also in attendance at the committee meeting to which I referred earlier.

At present in Nova Scotia, the 11-per-cent provincial sales tax is not applied to goods and services purchased by our municipalities. However, the GST base includes purchases made by municipalities, with a small rebate. With the 8-per-cent provincial sales tax blended or harmonized with the GST, our municipalities will be paying 15 per cent on all their purchases. However, they will receive a small GST rebate. This measure will cost municipalities in Nova Scotia approximately $15 million a year. Who will pick up the tab? Senators Moore, Graham, Kirby, myself and anyone else who pays municipal taxes in Nova Scotia.

Walter Fitzgerald, the mayor of one of the largest municipalities in Canada, has said that municipalities will have to do one of three things: First, they can get the provinces to rebate this money, something which the provinces have said they will not do; second, they can increase municipal taxation, which they do not want to do; third, they can cut services to homeowners, which they do not want to do.

Why do they have to do anything? Because of the HST. I doubt very much if the provinces of Nova Scotia and New Brunswick thought about that one when they decided to implement the HST. They probably said, "That involves the municipalities. When they increase taxes, they will get blamed for it, not us." The citizens of Nova Scotia will not be fooled by that one. They already know that the HST is causing the increase in municipal taxes and the cutbacks in services.

About 25 senior citizens packed the legislative hearing and applauded loudly when Owen Carrigan told the committee that the new tax is "neither good policy nor good politics." He asked the committee to recommend that the BST not be applied to "big-ticket, bread-and-butter items." He is talking about big-ticket items which make up the necessities of life, including heating fuel and electricity. He said that many seniors cannot afford such price hikes. He said, "Seniors have already been hit with higher costs for drugs because of changes to Pharmacare..." He pointed out that last year electricity went up by 8.9 per cent. He told the committee that homeowners also face an increase in property taxes because the municipalities will pass on the extra taxes they will have to pay under the new law.


It is not revenue neutral. It is not a real decrease. It amounts to a significant increase in the cost of living, and that will hurt the economy.

A law student, a father of four, reminded the committee of the anniversary of the Boston Tea Party, a tax revolt which helped spark the American Revolution. The Americans were not taxed nearly to the extent we are today. As a result of the HST, our tax burden will be even greater. What concerned him most was the unhealthy shift towards consumer-based taxes away from income taxes because it hurts the most needy at a time when we should not be doing that.

This Senate, as I understand it, was included in the Constitution of Canada in approximately 1868 because it would represent an institution in the constitutional life of this country to protect the regions of Canada, particularly the small regions of Canada. Honourable senators, that is why I am here: to protect the small regions of Canada. How much smaller can you get than three provinces with a total population of 2 million people, when all of Canada has a population of 30 million people? We must protect these small provinces from what is happening with this HST.

In all good conscience, I hope we will agree to travel to New Brunswick, Nova Scotia and Newfoundland so that the people affected will be able to have their say. They could not afford to come here to Ottawa unless they were paid travelling expenses. Even then, retailers told me they could not come to Ottawa because they would lose so much time in their retail stores and so much business. They fully expected that their political leaders in this country would come to the three provinces affected. Ontario is not affected by this, but hearings were held here. I see Senator Kirby nodding his head in agreement. I am glad to see that. He is a true Nova Scotian.

As well, I hope that, in all conscience, when honourable senators are asked to vote on this bill they will remember the reason they are here: to protect the weaker and smaller regions of Canada. That is what this bill is all about.

I urge honourable senators to vote against this piece of legislation which will hurt the low-income and middle-income people of Nova Scotia. We will lose thousands of jobs in our provinces.

On motion of Senator Kinsella, debate adjourned.


Canadian Food Inspection Agency Bill

Second Reading

On the Order:

Resuming debate on the motion of the Honourable Senator Taylor, seconded by the Honourable Senator Anderson, for the second reading of Bill C-60, to establish the Canadian Food Inspection Agency and to repeal and amend other Acts as a consequence.

Hon. Eileen Rossiter: Honourable senators, I rise today to speak on second reading of Bill C-60, to establish the Canadian Food Inspection Agency and to repeal and amend other acts as a consequence.

The principle of this bill is to consolidate various food inspection agencies in the interests of cost rationalization and service improvement. At the present time, food inspection and animal and plant health services carried out under the Departments of Agriculture and Agri-food and Fisheries and Oceans cover meat and fish inspection, plant and animal health, food labelling, and plant breeders' rights.

The process of eliminating wasteful duplication has been underway in government for some time, and it is surprising that it has taken so long for the federal government to provide Parliament with a bill to enact this intention. While the bill was first introduced in September of 1996, it has taken what some might consider an inordinate amount of time to get to this stage. I am under the impression that the new Canada Food Inspection Agency is nearing operational status without the benefit of legislation to give such an endeavour its legal effect. I am told that the transfer of staff is already underway in the expectation that the bill in its current format is a fait accompli.

The federal government claims it will save $44 million a year by eliminating overlap and consolidating staff, laboratory facilities, and other costs associated with providing Canadian consumers and foreign markets with the highest quality product. Mind you, there remains a great deal of duplication with the provinces, and Ottawa should work closely with interested provincial agencies to improve the system further.

I am under the impression that Ontario's Ministry of Agriculture has undertaken a similar process and is doing a fine job in this regard. Ontario is home to nearly 80 per cent of Canada's food industry, so it is important that they be consulted extensively. Prince Edward Island is home to a smaller proportion of Canada's food market but has, as all senators will know, the finest produce available anywhere. We should be consulted as well.

The CFIA, the Canadian Food Inspection Agency, will have a vast array of new powers, including a budget of approximately $330 million and a staff of approximately 4,500.

The minister shall appoint an advisory board of up to 12 members and shall fix the fees each member is to be paid for his or her services. It is important that these individuals be knowledgeable and/or experienced in matters pertaining to the agri-food industry. There should also be representation from consumer groups among the 12 members of the advisory board.

This is the first piece of legislation using the principle of alternative service delivery, or ASD. The Professional Institute of the Public Service of Canada has expressed its concerns about the labour relations impact of Bill C-60 at hearings in the other place in November of 1996, and I trust that, when this bill goes to committee, we will hear those concerns expressed at that the time as well.

Honourable senators, I trust that we will hear further comments on this bill when it goes to committee.

Motion agreed to and bill read second time.


Referred to Committee

The Hon. the Speaker: When shall this bill be read the third time?

On motion of Senator Taylor, bill referred to the Standing Senate Committee on Agriculture and Forestry.


First Nations Government Bill

Second Reading

On the Order:

Resuming debate on the motion of the Honourable Senator Tkachuk, seconded by the Honourable Senator Twinn, for the second reading of Bill S-12, providing for self-government by the first nations of Canada.- (Honourable Senator Hébert).

Hon. Landon Pearson: Honourable senators, I rise today to participate in the second reading of Bill S-12, to provide for self-government by the First Nations of Canada.

However, before I begin, I take this opportunity to offer the congratulations of this chamber to our colleague Senator Charlie Watt who has recently been honoured by a 1997 Aboriginal Achievement Award for Community Development.

Hon. Senators: Hear, hear!


Senator Pearson: With this award, the aboriginal community recognizes the success of Senator Watt's leadership in the Inuit struggle against the James Bay project that resulted in a comprehensive land claims agreement that, according to the citation, changed forever the dynamics between aboriginal and non-aboriginal governments in Canada.

This is only one of Senator Watt's achievements on behalf of his people. He was also a leading advocate in promoting the recognition and protection of aboriginal rights in the patriation of the Canadian Constitution. Those of us who work with him in the Senate know how well he continues to advocate on behalf of his people.

Congratulations, Senator Watt.

I would now like to return to Bill S-12. Let me start by also commending my colleagues opposite for their efforts in promoting the implementation of aboriginal self-government in Canada.

Bill S-12 clearly reflects a desire to advance the interests, authority and autonomy of the First Nations as a whole, including Métis and Inuit. I am sure I speak on behalf of other members of the Standing Senate Committee on Aboriginal Peoples in saying that we welcome the opportunity presented by Bill S-12 to discuss these issues, especially in the new context created by the release of the report of the Royal Commission on Aboriginal Peoples.

However, it is no longer the subject-matter of the bill we will be discussing in committee but the bill itself. I perceive certain difficulties with this bill as it stands with respect to jurisdictional and constitutional issues. These must be dealt with before the legislation can move to the other place. Let me explain.

As you are aware, the federal government is already working to create a new partnership with aboriginal peoples in Canada, a partnership based on trust, mutual respect and participation in the decision-making process. A year and a half ago, in August, 1995, the government launched a policy approach to negotiating self-government arrangements, the fundamental premise of which is that the inherent right to self-government is an existing aboriginal right under section 35 of the Constitution Act, 1982.

As I read the public mood - and this is supported by polls - most Canadians mindful of historical wrongs and current difficulties are in favour of increasing the autonomy of aboriginal peoples. At the same time, they want that autonomy to be achieved in a reasonable manner that respects all citizens, aboriginal and non-aboriginal alike.

Once they are reached, agreements on self-government must have sufficient legal protection. For this reason, under the inherent right policy, the federal government is prepared, where all parties agree, to protect the rights negotiated in self-government agreements as section 35 rights. This will provide constitutional protection to self-government rights when negotiated in a credible and legitimate process.

In parentheses, I should like to think that the negotiation process itself would be able to add to the promotion of creative and effective long-term governance.

Turning now to my specific questions about the jurisdictional and constitutional issues raised by Bill S-12, first, I fear that many Canadians would find neither acceptable nor reasonable the proposal in Bill S-12 that First Nations law-making powers be paramount over those of the federal and provincial governments in certain strategic areas. It is clear aboriginal governments must have significant law-making powers. Otherwise, self-government would have no meaning at all. However, an act that appears to give First Nation laws blanket paramountcy over federal legislation in areas of national importance, such as peace, order, and good government - which in the Constitution is a residual federal power - or the environment, health or transportation, and to do so without negotiation, makes me uneasy.

As I understand it, this does not mean that the Government of Canada is unwilling to negotiate the paramountcy of aboriginal laws on certain matters internal to the community and integral to its distinct culture or essential to its operation as a government, but it would be a failure of federal responsibility for all Canadians if a federal statute led to the automatic displacement of federal and provincial laws in certain fields.

For those of us who share this great land with the peoples of the First Nations, there is a natural expectation that certain federal laws will continue to apply to aboriginal peoples or will coexist alongside valid aboriginal laws as self-government agreements are reached. Conflict and protracted litigation will only be avoided by ensuring that all citizens, aboriginal and non-aboriginal, know what laws apply to them.

I also see a risk that Bill S-12, as it currently stands, could damage federal-provincial relations. Many of the law-making powers proposed in the bill are powers held by the provinces under section 92 of the Constitution Act, 1867. Clearly, these powers cannot be addressed in a federal statute without any discussion with the provinces. We do not want to end up with new jurisdictional conflicts or challenges. This is not in anyone's interest.

Honourable senators, the deeper I look into matters concerning aboriginal peoples in Canada, the clearer it is to me that every effort must be made to consult with as many aboriginal peoples as possible before implementing policies and programs that affect them. So far, I have not seen much to suggest that the First Nations as a whole has been widely consulted on what is proposed in Bill S-12 or that the proposed legislation has the support of national aboriginal groups across the country.

Bill S-12 is presented as enabling legislation that can serve as a basis for self-government by all First Nations in Canada. The application of this legislation is unclear for it does not limit itself to bands as defined under the Indian Act. It also includes any recognized community of indigenous people with a treaty or an agreement with the Crown. What exactly does this mean? As parliamentarians, we must ensure that there is reasonably broad-based support for this legislation at the national level and at the community level before proceeding any further. The federal government has made a commitment to recognize the inherent right to self-government of all aboriginal peoples. Does this bill address each one of them?

The nature of self-government may well differ among groups. Negotiated agreements should reflect the different realities that exist across the country. Of course, I am far from expert in these matters, and perhaps there will be satisfactory answers to these questions in committee. However, I have another concern.

As I see it, this legislation leaves no room for negotiation. It is sweeping, comprehensive and all-encompassing. Bill S-12 would enable any recognized First Nation community in Canada to declare itself as self-governing without any further dialogue, consultation, or negotiation with other orders of government. I think this goes beyond the bounds of what most Canadians would consider reasonable or responsible, and is inconsistent with the government's approach to recognize the inherent right as is set out in the federal policy.

Honourable senators, the government's inherent right policy came into being less than a year and a half ago and already there are about 80 different sets of negotiations representing about half the First Nations and Inuit across the country. These discussions have confirmed the federal view that negotiation is the most effective way to reach agreement on how to implement aboriginal self-government.

Furthermore, there appears to be a growing consensus that in order to be truly effective, self-government processes must be flexible and regionally- or provincially-based. This suggests that negotiations should involve the provincial and territorial governments, at least where their jurisdiction may be affected.

In my view, negotiation, though often tiresome and lengthy, is better than litigation or protracted conflict which might be the unfortunate, unintended result of Bill S-12. I have always believed that negotiation is the only way to ensure partnerships and clear relationships. It seems to me that only through negotiation can we tailor self-government arrangements to meet the unique historical, social, cultural, economic and political circumstances of diverse First Nation, Inuit and Métis groups.

In implementing the inherent right, the government would like to use - and has been using, I might add - existing tripartite processes to the greatest extent possible. This could involve negotiating self-government arrangements as part of a comprehensive claim as in the case of the Nisga'a in British Columbia, or building on the special relationship established by existing treaties.

At the same time, the government is pursuing certain negotiations at the local level and, on a sectoral basis, concerning education, for example, or child and family services.

Honourable senators, as you are aware, the Royal Commission on Aboriginal Peoples tabled its final report in November 1996. The commission's report makes numerous recommendations regarding self-government which have far-reaching implications not only for the Government of Canada but also for provinces, aboriginal peoples, and all Canadians. The federal government has promised that this important document will not be shelved but will be given serious consideration, for it shares the commission's concern to promote aboriginal self-reliance and respect. For this reason, I believe Bill S-12 will have to be examined in the light of the commission's report so that, through discussion, negotiation and understanding, we will achieve self-government agreements that satisfy the aspirations of aboriginal peoples and achieve harmony with the jurisdiction of the federal and other governments.

In conclusion, I look forward to studying Bill S-12 in committee. I know that I have a great deal to learn about the complex and vital issue of aboriginal self-government before I can understand what is the most reasonable and practical way to make it a reality in this country.


Hon. Walter P. Twinn: Honourable senators, I rise to add my contribution to the eloquent and insightful speech delivered by my colleague the Honourable Senator Tkachuk on Tuesday last, February 4, 1997. One might indeed appreciate that there is so much detail, given the number of years spent working on this bill.

I should like very much to comment on some of the things that the Honourable Senator Pearson spoke of this afternoon. I suggest that perhaps she could have consulted the Department of Indian Affairs; that would probably have been very helpful. The same could be said for the minister, the Honourable Ron Irwin, that he might or might not have assisted. I do not know what happened. However, I should like to add some points, if I may.

First, on promises, this government has promised the aboriginal peoples of Canada self-government. The Red Book states that:

The role of a Liberal government will be to provide aboriginal people with the necessary tools to become self-sufficient and self-governing.

It goes on to state that:

A Liberal government will act on the premise that the inherent right of self-government is an existing aboriginal and treaty right.

At a meeting of the Aboriginal Affairs and Northern Development Committee on March 16, 1994, The Minister of Indian and Northern Development stated that:

First, on inherent rights, we are proceeding on the premise that the inherent right of self-government is an existing aboriginal treaty right within section 35 of the Constitution. We are committed to moving expeditiously in partnership, to make aboriginal self-government a practical reality.

On Januarty 26, 1994, in the other place, the Honourable Prime Minister Jean Chrétien stated that:

I think that it would be very prudent to have a system of Indian self-government, after several years, at which point we would know exactly how it operates, and that it is working well. If we had to entrench it in the Constitution at that time, we could do so.

On March 14, 1994, he stated that:

What are the goals of the government? They are not very complicated.

I was minister of Indian Affairs and Northern Development for more than six years. I know that we need a different regime where we can delegate to aboriginal peoples the authority to make their own decisions. I have said time and again that we have made many mistakes. Perhaps the time has come to let them make some mistakes themselves by giving them the authority to decide issues locally regarding education, welfare, housing, economic development and not have them wait for instructions from bureaucrats in Ottawa.

The foregoing are only a few of the many times that this government has promised action on self-government. Yet this government has not done anything to advance aboriginal self-government outside of land claim settlements, other than to scrap the old self-government program and start a new one. Their "inherent rights" program is destined to spend millions and take years of study. It is likely that this process, like the one before, will do nothing but stall self-government.

The government will not look at Bill S-12. This bill was presented to the minister, Ron Irwin. He would not discuss it; he just ignored it. I will not even try to tell you what happened at that meeting today. Is it this government's true policy to make self-government a practical reality? Or is their real policy to continue studying the issue forever, in the hope that they will never have to deal with it?

Bill S-12 is a practical solution. Bill S-12 makes self-government a practical reality. It did not, and will not, cost millions of dollars to create or study, and it ends the delay. It may even prevent some of the tension, hostility and stand-offs that we have recently experienced.

Bill S-12 is based on an agreement with the department. That bill was developed by the Lesser Slave Lake Indian Regional Council with the help of Senate drafting staff. Bill S-12 was based on an agreement for self-government which was made with the Department of Indian Affairs by Sawridge, one of the member bands of the regional council. We had signed off agreements for self-government with the Department of Indian Affairs after negotiations with Revenue Canada, the Ministry of Justice, the Ministry of Health, the Ministry of the Environment, Indian Oil and Gas and the Province of Alberta. They have been negotiated and signed off. Government drafters were working on this bill when the Liberal government was elected. This government terminated that program.

Bill S-12 is also based on existing laws. This bill is also based in part on the Indian Act, the Sechelt Self-Government Act, the Cree-Naskapi Act and the Yukon Self-Government Act, and other acts of municipal governments. Unlike those acts, which apply only to one band or a small group of bands, this bill could be universal. Any band that wants to opt into this form of self-government may do so. That being said, this bill does not preclude the government from recognizing other forms of self-government, either as universal options or as a band-specific act. This bill creates an option which was initiated by Indians for Indians.

Bill S-12 is democratic. This form of self-government is democratically based. The people in the community must vote in favour of self-government or it does not happen. Bill S-12 is land-based, which is very important. This form of self-government is based on existing territory, reserve lands, and only applies to territory which has already been recognized as Indian lands. We are not creating new territory and we are not encroaching on provincial territory.

Bill S-12 can save the government millions of dollars. For each band that opts into Bill S-12, the government is spared both the internal and external costs of negotiating, drafting and passing a self-government bill. As bands opt into self-government, the need to have a Department of Indian Affairs is reduced. The government can cut back on its bureaucracy. This can also save the government millions of dollars.


Honourable senators, Bill S-12 meets the objective of self-government. It promotes self-sufficiency and allows bands to control their own land, resources and destiny without the expensive and needless intervention of bureaucrats and without amending the Constitution.

Bill S-12 protects rights, and fits within Canada's existing legal structure. This bill protects existing third party rights and is consistent with the Charter of Rights and Freedoms, the Constitution of Canada and the treaties. The bill also provides for political and financial accountability. It ensures that there are checks and balances. The bill also respects parliamentary sovereignty on matters of national concern.

Honourable senators, Bill S-12 is neutral on status, membership and revenue. Contrary to what the minister and others have said, this bill does not affect Indian status or membership. These issues are far too controversial, and we recognize that these issues would mire this bill if they were mentioned. We left the status quo untouched. The bill is also revenue neutral, as all Senate bills must be. This will calm any fears that self-government will cost money. Quite the contrary; I believe it will save money.

Bill S-12 does not give anything to reservation communities which in law they do not already possess. It is trite law that Indian bands hold Indian title in their reservation lands. It is trite law that Indian land held under federal protection is for the exclusive use, benefit, enjoyment and occupation of those particular Indian bands to whom it belongs. It is trite law that the Indian Acts have always recognized Indian groups and their native title. Despite certain flaws, including flawed administration - or I could use a stronger word for the administration - the Indian Act gave effect to the rights of indigenous peoples and the treaties between them and the Crown.

Let me talk about a flaw. Back when the Honourable Jean Chrétien was Minister of Indian Affairs, he interpreted an act that allowed my band and myself to advance economically, which we would not have been able to do if he had ruled the other way. Despite doing so, two ministries or bureaucracies now interpret the act whichever way they please. Who is it for? Sometimes it is a referendum. Sometimes it is a straight band council resolution. However, who is their friend? This must be cleared up, honourable senators.

Why not pass Bill S-12? With all of the benefits of Bill S-12, I cannot understand why the government has not shown the initiative and introduced it themselves. Indian legislation cannot legally be changed unilaterally against the interests of reservation communities. According to the Supreme Court of Canada, native title flows from one fact and one fact alone: When the Europeans arrived in North America, aboriginal peoples were already here, living in communities on the land and participating in distinctive cultures as they had done for centuries.

Honourable senators, perhaps partisan politics is behind this failure. If this is the case, it is shameful that the government would throw away this opportunity to fulfil its promises in an effective and efficient manner. By introducing this bill in the Red Chamber, we are encouraging the government to rise above politics and realize how practical and complete Bill S-12 really is.

In conclusion, honourable senators, I wish to add that Bill S-12 also fulfils the recommendation of the Royal Commission on Aboriginal Peoples that the federal government introduce legislation in Parliament which recognizes and affirms the lands, rights and jurisdiction of the treaty First Nations.

Honourable senators, with leave of the Senate, I ask that six pages of Volume 2 of the report of the Royal Commission on Aboriginal Peoples be presented as an appendix to the Debates of the Senate of this day. Page 150, section 2.2.8, is especially relevant as Bill S-12 would, in fact, implement this particular recommendation.

Honourable senators, our people have waited a long time. We hope and pray that you consider this bill and pass it. Study it carefully. It has not been studied by the minister or by many people. It had been signed off. The Department of Indian Affairs had signed off all of these agreements. There were extensive negotiations. Nothing was hidden; there was no hidden agenda. This bill, honourable senators, is very legal.

The Hon. the Speaker: Honourable senators, there is a request from the Honourable Senator Twinn that certain documents be appended to the debates of this day. Is there leave that that be done?

Hon. Senators: Agreed.

(For text of document see Appendix, p. 1589.)

The Hon. the Speaker: I would therefore ask the Honourable Senator Twinn to please table the documents.

Is leave granted for the tabling of documents?

Hon. Senators: Agreed.

Hon. Charlie Watt: Honourable senators, I am pleased to rise today to participate in the second reading debate on Bill S-12, the proposed First Nations Government Act.

The Honourable Senator Twinn pointed out that self-government is very important to the aboriginal people. Indeed, it is.

Honourable senators, in 1990, I introduced Bill S-18, an act to Further the Aspirations of the Aboriginal People of Canada. That bill was ruled out of order by the Speaker on the basis that two of its clauses imposed new statutory duties on a minister of the Crown and hence on a government department. As such, the bill infringed upon the financial initiative of the Crown. Bill S-18 was determined by the Speaker to be a money bill and lacked Royal Recommendation.

Similar points of order were raised with respect to Bill S-12 in this chamber on November 27, 1996. The Speaker delivered an extensive and well-researched ruling on Tuesday, February 4, 1997, in which he reviewed the argument presented by senators and the authorities on the subject of money bills in the Senate. The Speaker concluded that the bill was properly tabled before the Senate, as he was unable to find any provision in Bill S-12 that clearly appropriates money from the Consolidated Revenue Fund.


In the course of his ruling, His Honour the Speaker made reference to the 1991 ruling in which Bill S-18 was ruled out of order. He noted that in the earlier ruling reliance was placed on statutes and practices of the British House of Commons, which have been adopted by the Canadian House of Commons to a certain extent. He noted, however, that the Senate and the House of Commons have not always agreed when it comes to money bills. He also noted that a 1918 Senate committee report had rejected the idea that the British practice with respect to money bills was any part of the Constitution of Canada, and had stated that claims by the House of Commons to the broader powers and privileges of the British House of Commons were unwarranted.

I do not want to be taken in any way to be questioning or challenging the ruling of the Speaker regarding Bill S-12. Indeed, I support the ruling and I think that it was an important contribution to an extremely difficult issue.

The question of the Senate's rights and powers with respect to financial legislation has long been a concern of this chamber. Various committee reports and Speakers' rulings over the years have attempted to clarify exactly what the Senate can and cannot do in respect of money bills, and when a Royal Recommendation is required. The Ross report of 1918 and the work of the Standing Senate Committee on National Finance in 1989-90 highlighted some of the difficulties in this area. The whole issue remains murky, however, and full of pitfalls for senators who wish to introduce legislation.

Obviously, Bill S-12 was drafted carefully. The drafters had the benefit of the 1991 ruling on Bill S-18 and other Speakers' rulings, and managed to avoid procedural problems. There are obvious differences between Bill S-12 and Bill S-18. Nevertheless, there is a need for greater clarity and for more consistency in how the Senate applies and asserts its rights and powers. The use of inappropriate British precedents and Canadian rules must be avoided in the future, and a clearer idea developed of how to approach important legislation that is presented for examination by the Senate of Canada. There needs to be greater guidance for senators so that they can anticipate the ruling of the Senate in matters of so-called money bills. This is an extremely important issue, going as it does to the very role and power of the Senate. Therefore, I encourage the committee which will study Bill S-12 to look into the matter.

Hon. Anne C. Cools: Honourable senators, I rise to lend my support to Bill S-12. I remind senators that second reading is the stage in the proceedings when we adjudicate the principles of a bill.

I laud Senators Tkachuk and Twinn for bringing this initiative forward, and I congratulate them for their efforts.

I note that Senator Twinn himself is an Indian and a chief at that. Senator Twinn's father and grandfather before him were also Indian chiefs. Therefore, the honourable senator has much credibility in speaking for Indian and native people in this country. Senator Twinn had told a committee of this place that his grandfather had signed a treaty in or about 1890.

This particular discussion we are having today on native self-government in Canada is historic. It is the first such debate in this chamber and, I believe, in Parliament. To that extent, I welcome and laud it.

As one who was born and raised in a colony and whose family was deeply involved in bringing self-government to the land of my birth, I understand very deeply the aspirations of all peoples to self-determination. Many senators may not know this, but my family was deeply involved in bringing universal suffrage to Barbados, where I was born.

I have listened attentively to Senators Pearson, Watt and Twinn. Senator Twinn's speeches are always notable. I encourage him to speak more often.

In support of those senators who are concerned about committee consultations, I recommend, and I hope that the committee will take my recommendation, that our committee travel the width of this country and consult with all concerned, native and non-native alike, government officials and non-government people alike. To that extent, I add my support to this initiative and wish it well in the rough and tumble that it will have to endure in the next little while.

Hon. David Tkachuk: Honourable senators -

The Hon. the Speaker: I wish to inform the Senate that if the Honourable Senator Tkachuk speaks now, his speech will have the effect of closing debate on second reading of this bill.

Senator Tkachuk: Honourable senators, first, I should like to thank Senators Pearson, Twinn, Watt and Cools for their words on Bill S-12. I know that in committee much interesting, technical and important discussion will take place. When I introduced Bill S-12, I said that the Senate is where it should be considered.

I should like to respond to some of the issues raised by Senator Pearson with regard to provincial jurisdiction and federal powers contained within Bill S-12. I will not go on at any great length. However, I should like to explain that federal laws which apply within Bill S-12 are laws that are already in the Indian Act or have already been negotiated between the Government of Canada and certain bands. With regard to provincial areas of jurisdiction, such as wills, estates, education and health, they are already in the Indian Act. Therefore, the federal powers apply to and within that area of jurisdiction.

The intent of the bill covers general application of provincial powers and provincial legislation. In addition to all the technical areas where there are some problems, the application of provincial laws is also explicitly provided for by the bill in circumstances where a province has a territorial link with the band or First Nation. The relevant measure in that regard is subclause 14(1). Laws under general application of the provinces having a territorial link with the First Nation apply to citizens of the First Nation as well. There are certain specific areas, such as the environment, which are not in the Indian Act but where minimum standards - that is, the provincial laws - will apply to the Indian band. These will involve jurisdictional and constitutional issues, which I look forward to discussing.


If the committee agrees, I hope that we will travel to some of the First Nations which have already made self-government agreements with the Government of Canada to determine how they are progressing and how their governments work. Much of the work done on Bill S-12 was lifted from self-government agreements that presently exist between those First Nations and the Government of Canada.

Honourable senators, this is an enabling bill. It only applies to an Indian band which wishes to take certain measures to fall under this bill. They would be required to pass a constitution, and they would be required to undertake negotiations. There is a list of items in the front of the bill with which the Indian band would be required to comply. For example, they would have to consult with their people and hold a vote before anything can happen. The bill applies only when the Indian band wishes it to apply, much like a municipality would undertake certain provisions under the Municipal Act to become a city, town, village, or hamlet.

I thank senators for participating in the debate. I thank especially Senator Twinn. It has been interesting working with him over the last several years. I never thought we would get this far but we have, and I am glad.

Motion agreed to and bill read second time.


Referred to Committee

The Hon. the Speaker: Honourable senators, when shall this bill be read the third time?

On motion of Senator Tkachuk, bill referred to the Standing Senate Committee on Aboriginal Affairs.


Private Bill

An Act to Incorporate the Bishop of the Arctic of the Church of England in Canada-Bill to Amend-Second Reading

On the Order:

Resuming debate on the motion of the Honourable Senator Meighen, seconded by the Honourable Senator Keon, for the second reading of Bill S-15, to amend an Act to incorporate the Bishop of the Arctic of the Church of England in Canada.-(Honourable Senator Adams).

Hon. Wilfred P. Moore: Honourable senators, I have been asked to speak on this matter in place of Senator Adams.

In reply to the introductory remarks of Senator Meighen, I can confirm that the Anglican Diocese of the Arctic has served in both the Northwest Territories and Nunavik Arctic Quebec for many decades. The current Bishop of the Arctic, Christopher Williams, began his Arctic missionary work in Salluit in 1961. He was one of the pioneers of the church and has served throughout the Arctic. He speaks Inuktituut fluently and has been prominent in the ongoing translation of the Scriptures.

The Diocese of the Arctic serves not only the Inuit people of Nunavik but also the Cree people of Arctic Quebec. Bishop Caleb Lawrence of the Diocese of Moosonee was for many years the Anglican Rector in Great Whale River, now Wapamagousti or Kuujjuarapik. The Anglican Diocese of the Arctic has served the Cree people of Arctic Quebec in their own language as it has served the Inuit in theirs.

The Anglican Church in Nunavik is particularly strong. Its mission continues to be evangelical. All but one of the parishes are lead by aboriginal clergy, catechists and lay readers.

This summer, during the election for Bishop Suffragan, there were three candidates. All were Inuit. Two, the Reverend Benjamin Arreak and the Reverend Aipilee Napartuk, are rectors of parishes in Nunavik.

The Anglican Diocese of the Arctic is one of the oldest and most respected institutions serving the people of Arctic Canada. By making the amendment which they have requested to their act of incorporation, I hope we can assist them to continue to do the good work that the early missionaries have begun, and Arctic peoples are continuing to do.

Honourable senators, this side of the house supports the private bill sponsored by my honourable friend Senator Meighen.

Motion agreed to and bill read second time.


Referred to Committee

The Hon. the Speaker: Honourable senators, when shall this bill be read the third time?

On motion of Senator Kinsella, bill referred to the Standing Senate Committee on Legal and Constitutional Affairs.


Banking, Trade and Commerce

Harmonized Sales Tax Legislation-Committee Authorized to Travel, and to Permit Electronic Coverage of Proceedings

Hon. John Lynch-Staunton (Leader of the Opposition), pursuant to notice of February 13, 1997, moved:

That, when seized with Bill C-70, to amend the Excise Tax Act, the Federal-Provincial Fiscal Arrangements Act, the Income Tax Act, the Debt Servicing and Reduction Account Act and related Acts, the Standing Senate Committee on Banking, Trade and Commerce be instructed to hold hearings in Nova Scotia, New Brunswick and Newfoundland; and

That the Committee authorize television and radio broadcasting of all of its proceedings.

He said: Honourable senators, I am quite prepared to argue the merits of this motion. However, since I put it on the Order Paper on Thursday, I have had the opportunity to talk to some members of the committee and to the leadership across the aisle. I understand that its merits have been considered and have found some support.

Before I say any more, perhaps the Deputy Leader of the Government would bring us up to date on his position, and the position of those he represents on that side with regard to this motion.

Hon. B. Alasdair Graham (Deputy Leader of the Government): Honourable senators, with respect to the motion of the Leader of the Opposition in relation to Bill C-70, there have been discussions with the leadership on both sides. It has been agreed that the Standing Senate Committee on Banking, Trade and Commerce will hold hearings here in Ottawa as well as in the provinces of Nova Scotia, New Brunswick and Newfoundland. It has also been agreed that the committee will have all of its proceedings available for broadcast, both on radio and television. The steering committee is holding discussions and meetings are being held with officials who arrange for committee meetings and the appearance of appropriate witnesses. It is hoped that Senator Kirby will be able to give us a report as to those arrangements when the Senate resumes tomorrow afternoon.

Senator Lynch-Staunton: Honourable senators, that is excellent. I thank the Deputy Leader for his support.

Motion agreed to.

The Senate adjourned until Wednesday, February 19, 1997, at 1:30 p.m.