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Debates of the Senate (Hansard)

Debates of the Senate (Hansard)

1st Session, 36th Parliament,
Volume 137, Issue 98

Tuesday, December 1, 1998
The Honourable Gildas L. Molgat, Speaker


Tuesday, December 1, 1998

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



Veterans Affairs

Appropriate Marking of Graves of Black Veterans of World War I

Hon. Calvin Woodrow Ruck: Honourable senators, a few weeks ago, as some of you may recall, I spoke to the Prime Minister with respect to the fact that a number of black veterans of World War I are lying in unmarked graves. The Prime Minister immediately notified the Minister of Veterans Affairs. I have heard recently from the Director of Veterans Affairs in Halifax that they have located the graves.

Initially they ran into a problem because I had identified the area as a black section or coloured section. Some years ago, my wife and I buried my brother-in-law. When we went to the undertaker's parlour, he called Camp Hill Cemetery and said - and I will never forget his words - "Open a grave in the black section" or "the coloured section." I am not sure what term they were using in those days. We were known as "coloured" and now we hear the word "black" used most of the time. Anyway, we did not offer any objection. We wanted to bury our brother-in-law in a grave and we did not have a lot of money. He had been unemployed for a number of years and had no insurance, so we had to come to some agreement. Therefore, I did not make an issue over the term "coloured" or "black." It was the first we knew that there was such a thing as a black or coloured section in Camp Hill Cemetery, one of the main cemeteries in the City of Halifax. He was buried there.

Subsequently, I became involved with the history of the Black Battalion and I read that some black veterans of that battalion were buried in unmarked graves. I went to the cemetery myself and I saw the graves there. I did not pursue the matter at that time but we are now living in an age where people are people, to be judged by their nature, not by the colour of their skin.

The Prime Minister notified the Minister of Veterans Affairs, who made contact with me, and efforts are being made to locate the graves. They have already located three. I am sure there are many more. The department is trying to contact next of kin to find out what type of marker they want on the graves. At the present time, those graves are marked by flat white stones, so that anyone going through the graveyard would have no indication whatsoever that anyone is buried there. One hopes that this matter will be rectified and those veterans of World War I who served and fought so that we may survive as a country will get the honour they deserve, a marker that can be seen without groping in the grass.

Federal-Provincial Relations

Declaration of Provincial Premiers on Social Union

Hon. Lowell Murray: Honourable senators, during the Quebec election - and, indeed, during the counting of votes last night - there was frequent reference to the Canadian Social Union and, in particular, to the declaration of the premiers on the Canadian Social Union, made at their annual meeting in Saskatoon in August. Some of the politicians, aided by journalists, English and French, concentrated exclusively on two sentences in the premiers' declaration, namely, those dealing with the question of opting out with full compensation. That is an important paragraph. Those two sentences are very important, but they are not the whole declaration. If the negotiation proceeds as it should, it will be on the basis of the entire declaration of the premiers.


With a view to completing the record, I take the liberty of reading the premiers' declaration in its entirety. It consists of two pages, and reads: "Saskatoon, August 6, 1998." I ask honourable senators to pay close attention to some of the other things that are said in this declaration, in addition to the statements about the right to opt out. The declaration states:

Premiers discussed the status of negotiations on a Framework Agreement for the social union. They noted that both orders of government are involved in Canada's social union and emphasized that a stronger partnership between the two orders of government is needed to secure Canada's social programs in the future.

Premiers strongly believe that a Framework Agreement for the Social Union will provide all Canadians with a better opportunity to participate fully in our economic and social life. It is about governments working together, within their constitutional responsibilities, to ensure strong and sustainable health, education and social services for Canadians. It is not about more power for one order of government or another.

Premiers expressed their unanimous support for the provincial/territorial consensus negotiating position developed by participating Ministers.

Premiers welcomed the Prime Minister's recent public commitment to concluding negotiations on an Agreement. They recognized that the recent federal proposals on the Framework Agreement, although not a complete response to the provincial/territorial consensus negotiating position paper, permits the negotiations to proceed.

Premiers agreed that through negotiations they could accommodate many of the objectives of the federal proposals. The challenge now is for the federal government to work with the provinces/territories to resolve outstanding issues.

Premiers noted that the areas of common ground between the federal and provincial/territorial positions represent progress in the negotiations but stressed that collaborative arrangements on federal spending in areas of provincial/territorial jurisdiction, and a fair dispute resolution process are essential to a balanced and fair partnership. Premiers stressed that negotiations should now proceed with a view to concluding a draft Agreement by the end of the year.

Premiers noted that the federal proposals contain provisions for opting out. Premiers emphasized that the flexibility afforded to provinces/territories through the ability to opt out of any new or modified Canada-wide social program in areas of provincial/territorial jurisdiction with full compensation, provided that the province/territory carries on a program or initiative that addresses the priority areas of the Canada-wide program, is an essential dimension of the provincial/territorial consensus negotiating position.

Premiers also agreed that new mechanisms to prevent and resolve disputes are an essential element of their negotiating position. Premiers emphasized that disputes between governments undermine Canada's social union and that new cooperative mechanisms that both prevent disputes, and resolve them fairly when they arise, would strengthen Canadian's confidence in the ability of their governments to work together on their behalf.

Premiers emphasized that Canada's Social Union, and the programs that Canadians value most, particularly health care, must be supported by renewed fiscal arrangements that balance provincial/territorial program responsibilities with revenues.

Premiers concluded their discussions on the Framework Agreement negotiations by reiterating the negotiating ground rule that no element of the Framework Agreement is agreed to until everything is agreed to, and directed the Provincial Co-Chair of the negotiations, the Honourable Bernhard Wiens to set a date with the federal Co-Chair, the Honourable Anne McLellan, for a negotiating of Ministers as soon as possible.

Honourable senators, let the negotiations begin! Let those negotiations go forward on the basis of the entire document that was issued by the 10 premiers in Saskatoon last August.



Reflections on Sovereignty and Globalization of the Economy

Hon. Roch Bolduc: Honourable senators, Bernard Landry, the Quebec Minister of Finance, recently said that the global economy makes sovereignty more necessary and urgent than ever. Since this is a major argument of the PQ, you will allow me, following yesterday's election, to express a few thoughts on this issue.

Mr. Landry says that sovereignty is necessary in the context of globalization, because Quebecers will then control a state that will work in their interest. First, I note the minister's faith in the state and in its interventions. In other words, state intervention is good for the people because it protects them against the forces of the global economy. According to Minister Landry, it is even one of the driving forces of economic growth. Some of our socio-economic leaders are saying, like the minister, that the public sector is actually the leader of economic development. This is quite something! Economics clearly show that the growth of the public sector hinders economic prosperity. These analyses were conducted in Western Europe, in Canada and in the United States.

Over the past few decades, this interventionist attitude, which is similar to the one that has prevailed in France for a long time, seems to have taken hold in Quebec, following the apparent success of the "Quebec model," which values state capitalism as if public investment in business Crown corporations was the reason for Quebec's prosperity. This is reminiscent of the post-war debates in England. Could it be that, in this world of instant communication, we, in 1998, are suffering the effects of a 50-year cultural gap?

But where is this prosperity of ours? It is rather relative, since we are lagging behind the rest of Canada in all important economic indicators: growth rate, population, employment, investments. The only area in which we are leading in North America is taxes. It is high time to remind ourselves that our growth will not be the result of government intervention, but of the sum and quality of efforts of individuals who are competent, innovative and productive. It will reflect the extent to which we integrate competitively into the world economy via the free trade we will develop. This economic advancement will be the essential condition for advancement of our French culture. Those who believe that language or legislative barriers protect us from changes in the world are not living in the real world.

Any attempt to use the state for protection is condemned to failure, since we do not control the fluctuations of the world economy. We must adapt with intelligence and ingenuity, following the example of some of our manufacturers and exporters of goods and services.

These current attempts at state intervention through regulations and higher taxes do us economic harm and are impoverishing us. Compare Montreal and Atlanta, for instance. Wealth cannot be manufactured by governments, and jobs even less so. Governments can, however, do considerable harm through fiscal constraints and tightened regulations. Before interfering in something they know nothing about or have a superficial, that is a poor, understanding of, governments would do well to learn to manage their hospital and school systems with some degree of efficiency and compassion.

We must dispense with this siege mentality - which the West Island anglos feel they share as far as we are concerned - because it isolates us from the rest of the world by continually stressing our differences from other Canadians, as the brains trust that screens the information available though the media does regularly.

It would seem to be high time for this monopolization process by a little clique of people involved in the information process, the state-owned television stations in particular, to be stopped before we are forced to see it as an indicator that the unofficial censorship of the 1950s is on its way back.

We were a far cry last night from the landslide predicted in the early days of the campaign by the pollsters and bandied about afterward by the media. I hope that these people in public radio and television news will apply more vigour to their analyses in the future, meet the standard of ethics that justifies the existence of their services and stop playing the part of failed politicians.

In closing, I would like to congratulate Mr. Charest, who, despite the pollsters, most of the journalists and the Ross Perot of Quebec politics, garnered more votes than the Parti Québécois.

World AIDS Awareness Day

Hon. Thérèse Lavoie-Roux: Honourable senators, I am delighted in a way by the outcome of yesterday's election.

Honourable senators, December 1 has been World AIDS Awareness Day since 1988. This day is set aside to consolidate the worldwide effort in the fight against AIDS, to encourage the public to support programs preventing the transmission of the infection and to make HIV and AIDS better understood.

This year's theme for World AIDS Day is youth. UNAIDS, the association of organizations sponsoring the activity, chose this as the theme because of the devastating effect of HIV on young people. Every day, 7,000 young people become infected with HIV. More than half the new cases of infection occur in young people between the ages of 10 and 24. The rate continues to increase in this population considered to be at high risk.

In Canada, those infected are younger and younger. Between 1975 and 1984, the average age of infection was 29; according to Statistics Canada, it is now 24. Numbers continue to grow among young women and young homosexuals. Those in the field believe the young to be particularly vulnerable to AIDS because they are experimenting with sex, alcohol and drugs. Poverty is also a risk factor. Studies show that HIV, like most diseases, is more common in economically disadvantaged groups.


Honourable senators, you are undoubtedly aware of recent Canadian reports which indicate a drastic decline in AIDS cases and AIDS-related deaths. Indeed, we take heart in such good news. Health Canada has received 60 reports of AIDS deaths in the first six months of this year, whereas there were nearly 1,400 deaths annually between 1993 and 1995. New drug therapies are responsible for both the reduction in deaths and the delayed progression of HIV to AIDS. People are surviving longer and longer with AIDS.

Despite this most encouraging trend, HIV continues to spread in Canada. Each year, it is estimated that as many as 5,000 Canadians are contracting the virus. As well as youth, high-risk groups include women, who comprise 19 per cent of all new cases; aboriginals - 17 per cent of all new cases; injection drug users, over 33 per cent of all new cases, and young gay men. The once-held stigma of "gay man's disease" no longer applies to HIV/AIDS.

It is frightening, honourable senators, that as many as 40 per cent of these 5,000 people living with HIV are not even aware that they are infected and are carriers. This points to a potential increased risk of HIV transmission in our country.


Health Canada is putting up a Canada-wide fight as part of the national HIV-AIDS strategy and developing initiatives in the areas of research, treatment, support, education and community involvement. The government realizes how important this fight is not only to save lives but also to conserve our resources. By intensifying its prevention efforts, Canada will save $4 billion over the next five years. Treatment for those infected has cost $36 billion to date.

Honourable senators, the thought that a totally preventable infectious disease like AIDS continues to be transmitted in Canada and around the world troubles me greatly. What a waste of human lives, and so little action on the part of all the governments and individuals who should be dedicated to the cause of prevention.

Since the beginning of the pandemic, 11.7 million people have died from AIDS. We must also think of the six million people - almost one million of them infants - who will contract the virus this year. Every five seconds, another person is infected. Yet, for a relatively small amount of money, HIV infection is almost 100 per cent avoidable, particularly in developing countries where morbidity and mortality are increasing dramatically and where 94 per cent of a population of 22 million has HIV or AIDS. AIDS is a health problem, of course, but one with political and human rights overtones.

Our duty as parliamentarians is to work actively to combat this scourge. We know that AIDS can be prevented. We know that prevention programs work. We know that the secret is to take action in the community itself, and that a coordinated approach and dedicated funds are essential for education, treatment and research.


Honourable senators, let us wear our red ribbons in observance of World AIDS Day, and in commemoration of people who have died of AIDS and people who are infected with HIV. In the words of the slogan of this year's AIDS awareness campaign, "We are all affected" in one way or another.

The Hon. the Speaker: Honourable senators, the time for Senators' Statements has expired.

Hon. David Tkachuk: Perhaps I could have leave to present another statement.

The Hon. the Speaker: Honourable senators, every one of the three-minute statements ran well over three minutes. We are now five minutes beyond the time allotted for the statement period. I do not make the rules. I am only here to see to it that they are followed.


Canada Pension Plan Investment Board

Examination of Governance Provisions-Report of Banking, Trade and Commerce Committee-Government Response Tabled

On Tabling of Documents:

Hon. B. Alasdair Graham (Leader of the Government): Honourable senators, pursuant to the order of this house made June 18, 1998, I am pleased to table the government's response to the eleventh report of the Standing Senate Committee on Banking, Trade and Commerce.

National Parks Act

Bill to Amend-Report of Committee

Hon. Ron Ghitter, Chair of the Standing Senate Committee on Energy, the Environment and Natural Resources, presented the following report:

Tuesday, December 1, 1998

The Standing Senate Committee on Energy, the Environment and Natural Resources has the honour to present its


Your committee, to which was referred the Bill C-38, An Act to amend the National Parks Act (creation of Tuktut Nogait National Park), has, in obedience to the Order of Reference of Wednesday, June 17, 1998, examined the said bill and now reports the same without amendment.

Respectfully submitted,


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

On motion of Senator Carstairs, bill placed on the Orders of the Day for third reading at the next sitting of the Senate.

Asia-Pacific Region

Report of Foreign Affairs Committee on Study Tabled

Hon. John B. Stewart: Honourable senators, I have the honour to table the eighth report of the Standing Senate Committee on Foreign Affairs entitled: "Crisis in Asia: Implications for the Region, Canada and the World."


Business of the Senate


Hon. Sharon Carstairs (Deputy Leader of the Government): Honourable senators, with leave of the Senate and notwithstanding rule 58(1)(h), I move:

That when the Senate adjourns today, it do stand adjourned until tomorrow, Wednesday, December 2, 1998, at 1:30 p.m.

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

Hon. senators: Agreed.


Hon. Lowell Murray: Honourable senators, may I ask the Deputy Leader what is on the agenda for tomorrow in this chamber? May we expect to rise before 3:30 p.m.?

Senator Carstairs: Honourable senators, and particularly Senator Murray, we have been very successful recently in rising at or before 3:30, and I see no reason to doubt that we will have the same kind of success tomorrow.

Motion agreed to.

Corruption of Foreign Public Officials Bill

First Reading

Hon. Sharon Carstairs (Deputy Leader of the Government) presented Bill S-21, respecting the corruption of foreign public officials and the implementation of the Convention on Combating Bribery of Foreign Public Officials in International Business Transactions, and to make related amendments to other Acts.

Bill read first time.

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

On motion of Senator Carstairs, bill be placed on the Orders of the Day for second reading on Thursday next, December 3, 1998.


Preclearance Bill

First Reading

Hon. Sharon Carstairs (Deputy Leader of the Government) presented Bill S-22, authorizing the United States to preclear travellers and goods in Canada for entry into the United States for the purposes of customs, immigration, public health, food inspection and plant and animal health.

Bill read first time.

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

On motion of Senator Carstairs, bill placed on Orders of the Day for second reading on Thursday, December 3, 1998.

Asia-Pacific Parliamentary Forum

Sixth General Assembly of Conference on Environment and Development Held in Guilin, China-Report Tabled

Hon. Dan Hays: Honourable senators, I have the honour to table, in both official languages, the report of the Asia-Pacific Parliamentary Forum relating to the Sixth General Assembly of the Asia-Pacific Parliamentarians Conference on Environment and Development which was held in Guilin, China, October 14 to 18, 1998.

Security and Intelligence

Special Senate Committee Authorized to Further Extend Date of Final Report

Hon. William M. Kelly: Honourable senators, with leave of the Senate and notwithstanding rule 58(1)(a), I move:

That notwithstanding the Order of Reference adopted by the Senate on November 19, 1998, the Special Committee of the Senate on Security and Intelligence be empowered to present its final report no later than Friday, January 15, 1999.

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

Hon. Senators: Agreed.

The Hon. the Speaker: Is it your pleasure, honourable senators, to adopt the motion?

Hon. Marcel Prud'homme: Honourable senators, if the Senate is not sitting, I believe there is a provision in our rules which provides that the report be tabled with the Clerk of the Senate.

Senator Kelly: Honourable senators, it is my understanding that if the Senate is not sitting, the report is deposited with the Clerk of the Senate and it becomes a public document.

The Hon. the Speaker: Honourable senators, is it your pleasure to adopt the motion?

Hon. Senators: Agreed.

Motion agreed to.

Asia-Pacific Region

Report of Foreign Affairs Committee on Study-Notice of Inquiry

Hon. John B. Stewart: Honourable senators, on Wednesday, December 2, 1998, I will draw the attention of the Senate to the eighth report of the Standing Senate Committee on Foreign Affairs entitled, "Crisis in Asia: Implications for the Region, Canada and the World."

If honourable senators will permit, I wish to make a suggestion.

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

Hon. Senators: Agreed.

Senator Stewart: Honourable senators, I do not know how long our sitting will continue this afternoon. It may be that we will finish quite early. If so, I would like to have this inquiry start today.

I know that there is a great deal of other business to be dealt with before the Christmas adjournment, and that we should not lose any time. I could start the inquiry today and finish what I wish to say. That would leave the floor open for Senator Andreychuk, or any other senator who wishes to speak, to do so when next the inquiry is called.

The Hon. the Speaker: Is it agreed, honourable senators?

Hon. Senators: Agreed.

Canada-Europe Parliamentary Association

Council of Europe Parliamentary Assembly Held in Strasbourg, France-Notice of Inquiry

Hon. Lorna Milne: Honourable senators, on Thursday, December 3, I will call the attention of the Senate to the journey of the Canada-Europe Parliamentary Association delegation to the Council of Europe Parliamentary Assembly in Strasbourg, France.


Results of First Hemp Crop-Notice of Inquiry

Hon. Lorna Milne: Honourable senators, on Thursday, December 3, I will report to the Senate on the state of this year's fibre hemp crop.


National Defence

Grounding of Remainder of Labrador Helicopter Fleet-Government Position

Hon. J. Michael Forrestall: Honourable senators, my question is directed to the Leader of the Government in the Senate. On October 2, Labrador Helicopter 305 crashed, as we all know, tragically taking the lives of all six crew members on board.

On November 13, a Labrador helicopter made an emergency landing because a sealant around its de-icing system was about to catch fire.

On November 20, both Labradors at Greenwood were unavailable for a rescue. Helicopter 304 was unserviceable and Helicopter 303 was on a training flight.

On November 26, Labrador 310 caught fire and suffered damage on the ground at Greenwood.

On November 27, Labrador 304 set down in Fredericton with engine problems.

My question is simple: Sea Kings are now available. When will the government show some leadership and ground the Labrador helicopters?

Hon. B. Alasdair Graham (Leader of the Government): Honourable senators, I am very conscious of the concerns expressed by Senator Forrestall. I speak to the Minister of National Defence on a regular basis on this very important matter. He continues to assure me, and he has the assurance of the Chief of the Defence Staff, that unsafe aircraft will not be allowed to fly.

Senator Forrestall: Honourable senators, no one will die until God wants them to die.

Implementation of Sea King Helicopter Program-Government Position

Hon. J. Michael Forrestall: Honourable senators, the Minister of National Defence suggested yesterday at a conference on the Revolution in Military Affairs, the RMA conference, that the Sea King replacement would have to wait. If the government does not move soon to initiate the Maritime Helicopter Program, we may soon be in the same position with the Sea King fleet as we are now with the Labrador fleet.

When will the government take the step of initiating the Maritime Helicopter Program?

Hon. B. Alasdair Graham (Leader of the Government): Honourable senators, as I have indicated to my honourable colleague on several occasions, that is a matter of urgent and pressing importance to the government. It is a matter which I regularly bring to the attention of not only the Minister of National Defence but also other colleagues who are most directly concerned.

Senator Forrestall: Honourable senators, perhaps Senator Graham could find out for me, or perhaps he is in a position to tell us today, whether Minister Eggleton's remarks to the effect that the Sea King program would have to wait constitute a change of policy on the part of the government. If so, when does it propose to have this policy discussed publicly, and in what forum?

Senator Graham: Honourable senators, there are several matters which the government is considering. Indeed, there are several options under consideration which include not only the equipment but also the welfare and the living standards of our Armed Forces personnel. All of these matters are being taken into consideration at the present time.

Senator Forrestall: Honourable senators, am I to gather from what the minister has told us that it is now government policy that the Sea King program will have to wait, that there will not be even a call for the start of the program?

Senator Graham: Honourable senators, I am not aware that anything has been put off indefinitely. However, I shall consult with the Minister of National Defence and determine what his answer is to that question.


Solicitor General

Treatment of Protestors at APEC Conference by RCMP-Possibility of Appearance of Potential Witnesses before Senate-Government Position

Hon. Pat Carney: Honourable senators, my question is addressed to the Leader of the Government in the Senate. As honourable senators are aware, the Public Complaints Commission has adjourned indefinitely, leaving no forum in which to hear the officials from the Prime Minister's Office explain their involvement in the pepper-spraying of students at UBC before and during the APEC conference last year. We also have been advised that Staff Sergeant Stewart is impatient to tell his story.

I note that, in the last couple of weeks, the Leader of the Government in the Senate has repeatedly stated that officials have volunteered to appear before the commission, and specifically Mr. Pelletier, the Chief of Staff to the Prime Minister, and Mr. Carle, his former director of operations, to answer questions about their involvement.

Could you tell us whether these officers would be willing to appear before the Senate in order to have their views made public and to subject themselves to public scrutiny?

Hon. B. Alasdair Graham (Leader of the Government): Honourable senators, that is an interesting proposition.

The RCMP Public Complaints Commission was established to do the specific work that we have been discussing over the past several weeks. I suggest to the Honourable Senator Carney that we wait for the decision of the Federal Court, which I hope will be expedited, and then allow the Public Complaints Commission to get on with its work.

Senator Carney: Honourable senators, as we are well aware, the date for publication of that decision of the Federal Court is unknown. It has been suggested that the Public Complaints Commission could be stood over for as long as six months. In fact, so far, that commission has sat for a total of 10 days. Senator Graham has repeatedly told this house that testimony from the aforementioned officials would be a positive move. He has said that several times in responses to questions.

Again, I ask him if he would ascertain, if he does not presently know, whether these officials, who are so willing to have their views placed in the public record, would be available to appear before the Senate to have their views made public?

Senator Graham: Honourable senators, I do not know which mechanism the Honourable Senator Carney would want to use. There are various approaches that could be taken. However, I wish to emphasize that the Public Complaints Commission was established to do this very job. Why would we want to circumvent such an important body which, as I have said before, is recognized nationally and internationally for its work?

Senator Carney has expressed a valid concern with respect to delays that may occur as a result of the hearing by the Federal Court. In that respect, Justice Nadon, who is hearing this particular case, has indicated that he would speak to the Chief Justice with a view to having someone appointed to manage the matter in an expeditious manner. Justice Nadon said:

I know it was reported to the media that I had said that it would take six months. Hopefully we can do better, but as you know, it depends partly on you, on how fast you can proceed and whether we can make a judge available as early as possible. Hopefully we can. If we can do it by January the 1st, I'd be the first one to be happy. But we'll see.

Honourable senators, I have confidence in the Federal Court; I have confidence in the Public Complaints Commission, and I am confident that those are the appropriate bodies before which this matter should proceed.

Treatment of Protestors at APEC Conference by RCMP-Possible Inquiry by Senate Committee-Government Position

Hon. Noël A. Kinsella (Acting Deputy Leader of the Opposition): Honourable senators, if the Leader of the Government in the Senate is expressing the government's view that they want light shown on this matter, that they want the truth to come forward, that they want Canadians to know what the role of Mr. Pelletier and Mr. Carle of the Prime Minister's Office has been in this regard, then this novel suggestion should appeal. I might point out that it is not an overly novel idea. In the past, other commissions have been set up, or studies done, or inquiries conducted by the Senate, or fora provided by the Senate, for the purpose of gathering testimony on issues of national interest. If there ever was an issue of pressing national interest, namely the rights of Canadians, that cries out for truth and light, it is this issue.

Why does the Leader of the Government in the Senate feel that Mr. Pelletier and Mr. Carle testifying before a Senate body would in any way obviate their testimony being given should the hearings of the RCMP Public Complaints Commission in this matter ever be continued?

Hon. B. Alasdair Graham (Leader of the Government): Honourable senators, I suppose the British Columbia legislature, or a body from the other place, or for that matter any legislature or any body could ask those individuals to appear to testify on a matter which is already before the Public Complaints Commission. However, there are certain aspects of the case that are already being considered by the Federal Court. Surely we should allow those bodies which have been appointed specifically to do that kind of work to proceed with their function?

Senator Kinsella: Honourable senators, this story is very much de tenebris, the story of the depths, the story of darkness. Canadians have now come to realize that this is a front, for which the PMO even placed the former Solicitor General on the firing lines, namely, attempting to use the RCMP Public Complaints Commission, established under the RCMP Act, as a commission of inquiry that could conduct an investigation into the conduct of employees in the Prime Minister's Office. The Leader of the Government knows very well, or ought to know, that section 45.35 of the said Royal Canadian Mounted Police Act limits the inquiry of the said Public Complaints Commission to inquiry into the conduct of employees under the RCMP Act. The last time we looked, Mr. Pelletier was not employed under the RCMP Act, although he might act as if he were.

Senator Graham: Honourable senators, when this particular commission was established to inquire into the APEC matters, the mandate was outlined by Shirley Heafey, the Chair. In paragraph 3 of the mandate, Ms Heafey said:

Take notice that, in respect of these complaints, I have decided, in the public interest, to institute a hearing pursuant to sub-section 45.43(1) of the Act, commencing April 14, 1998, to inquire into all matters touching upon these complaints, to hear all evidence relevant thereto, to ensure a full and fair hearing in respect of these complaints and to report at the conclusion of the hearings such findings of fact and recommendations as are warranted, and, without limiting the generality of the foregoing, to inquire into and report on...

Honourable senators, that section does not exclude the people to whom we have been referring, namely the Chief of Staff, Mr. Pelletier, and the former director of operations, Mr. Carle. I believe that they would add a great deal to the hearings, and it would be most appropriate since they have volunteered to appear before the Public Complaints Commission to shed light on any involvement that there may have been from the Prime Minister's Office, and to answer any allegations on the part of lawyers representing any or all of the complainants or the defendants.

Canadian Heritage

Treatment of Mandate of Multiculturalism Program-Government Position

Hon. Donald H. Oliver: Honourable senators, the Auditor General notes that, since 1997, this government has revised its objectives and eliminated substantial funding for the multiculturalism program in Canada.

Due to lack of leadership from Canadian Heritage, the Auditor General notes that performance expectations of the program are hazy and overlap other departmental jurisdictions. When the Auditor General looked at applications for funding, a wide range of assessment practices were found.

In chapter 22.54 he notes:

In about 30 per cent of the files we audited, we could not assure ourselves that departmental officials had exercised due diligence in assessing the project.

Other criticisms of Canadian Heritage noted that there was a slow transition to project specific funding and that monitoring of project performance could be improved.

Can the Leader of the Government in the Senate explain why Canadian Heritage's policies and treatment of the multicultural program has been so marked by such ambiguous monitoring practices?

Hon. B. Alasdair Graham (Leader of the Government): Honourable senators, I am sure that Canadian Heritage would take into account all of the recommendations that have been made by the Auditor General. Indeed, I am one of those who believes that the Auditor General performs a very useful function for Parliament and for Canadians. I am certain that the matters which he has noted and which have been referred to by Senator Oliver will be taken into consideration. Should there be things which must be corrected, indeed they will be corrected as quickly as possible.

Senator Oliver: Can the minister explain how the government intends to clarify the program's mandate without watering down its independence and ability to apply to the program for funding without fear of undue departmental direction?

Senator Graham: Honourable senators, I hope that mandate will never be watered down, and I would urge as much of the minister.

Treasury Board

Report of Auditor General on Year 2000 Problem-Government Position

Hon. Terry Stratton: Honourable senators, my question is directed to the Leader of the Government in the Senate and it is with regard to the year 2000 bug, or the Y2K problem as it is more commonly known.

The Auditor General reports that many essential government services are still exposed to the year 2000 threat. Particularly as of this past summer, three key services were at risk: food safety, law enforcement and the delivery of income security systems.

The Auditor General noted:

With 18 months left, we are very concerned that some essential government services may be interrupted.

Can the Leader of the Government assure the Senate that there will be no interruptions? Can he assure Mrs. Smith in Winnipeg that her pension cheque will not be delayed? Can he assure Mr. Tremblay in Alma that his veteran's benefits will not be delayed? Can he assure the Sullivan family in St. John's that computer glitches will not result in the early release of violent offenders?

Hon. B. Alasdair Graham (Leader of the Government): Honourable senators, I cannot personally guarantee to deliver the cheque to Mrs. Smith or to remedy whatever problem Mr. Tremblay or the Sullivan family might have. I am in the process now of examining the Auditor General's report and it may be that Senator Stratton has had a better opportunity to look at the various chapters with which he has dealt and expressed some concern.

With respect to the Y2K problem, I would wish to enquire as to whether or not the Auditor General's examination was done several months ago, and whether there has been any improvement since that time. We are talking about the year 2000. My information is that, at the time of the examination, the Auditor General may have found that preparedness was at the level of 43 per cent. Since that time, however, over the past five months it may have improved to 75 per cent. I hope we will be at 100 per cent by the time the year 2000 arrives.

Hiring of Consultants to Solve Year 2000 Problem-Assurance of Systems Security-Government Position

Hon. Terry Stratton: Honourable senators, we have listened to Treasury Board officials talking about Y2K, and they have set aside $100 million to hire independent consultants to assist in ensuring that all our systems would stand up. To date, they have spent in the neighbourhood of $104 million and the clock is still running. That amounts to a great number of hours by independent consultants. Of course the concern is, given that vast number of consultants looking after all the problems concerning the Y2K, all operating within departments on a rather independent basis, how to pull everything together to ensure that there is not a severe problem coming down the track that we have not foreseen.

For example, the question was asked: When it comes to all these consultants, what is to prevent a consultant from putting a bug in the system? We could receive no assurance whatsoever that that would not or could not occur. It is a real concern that that kind of question could not be answered because it then leads to other questions as to the real potential for problems occurring in our systems.

Hon. B. Alasdair Graham (Leader of the Government): Honourable senators, I wish to assure the honourable senator that, to my knowledge, the Auditor General did not find any fraud in this whole process but, rather, administrative difficulties. He noted that the current rules governing contracting are sound and that introducing new controls would not be a solution. However, he has alerted the government to problems in several areas.

The President of the Treasury Board is the minister ultimately responsible for rectifying these problems. I spoke to him about the situation as recently as this morning. He assures me that not only has great progress been made but that he is confident that all our objectives will be met by the year 2000.

United Nations

Implementation of Recommendations and Responses to Questions by Committee on Economic, Social and Cultural Rights-Government Position

Hon. Noël A. Kinsella (Acting Deputy Leader of the Opposition): Honourable senators, last week in Geneva, Canada was embarrassed by the examination of the country's third report submitted pursuant to the reporting obligation under the International Covenant on Economic, Social and Cultural Rights. News reports from Geneva pointed out that even the delegation, led by the Canadian ambassador for disarmament, Mr. Mark Moher, were as cooperative as witnesses from underdeveloped countries who are trying to escape the criticism of poor performance in meeting obligations in the area of economic, social and cultural rights.

Does the Government of Canada intend to take steps to improve that record? In particular, would the honourable senator, as the minister in this chamber, be prepared to speak to the Minister of Justice, who has painted herself in the position of opposing the adoption of Bill S-11 - a bill that was passed unanimously by this house - to at least prevent discrimination against the poor in Canada, even though we are being judged to be not doing very well in eradicating poverty?

Hon. B. Alasdair Graham (Leader of the Government): Honourable senators, I am very conscious of the progress of Senator Cohen's Bill S-11 and I am monitoring it very carefully.

The Canadian government presented its third report on the implementation of the recommendations of the Economic, Social and Cultural Rights Committee, as well as written answers to a lengthy list of supplementary questions. I believe it is factual to state that the Canadian delegation cooperated fully with the committee, answering questions in a transparent, frank and open manner. Where delegation members were not able to respond to specific questions, they deferred to the responsible federal department or provincial government for responses and relayed them back to the committee.

I wish to assure all honourable senators that Canada is firmly committed to fulfilling its undertakings. We recognize that many complex challenges remain and there is much to achieve. We continue to strive progressively to achieve the full realization of the rights which are recognized in the covenant.


Comprehensive Nuclear Test-Ban Treaty Implementation Bill

Message from Commons

The Hon. the Speaker, informed the Senate that a message had been received from the House of Commons returning Bill C-52, to implement the Comprehensive Nuclear Test-Ban Treaty, and acquainting the Senate that they have agreed to the amendments made by the Senate to this bill without further amendment.


Income Tax Conventions Implementation Bill, 1998

Message from Commons

The Hon. the Speaker informed the Senate that a message had been received from the House of Commons returning Bill S-16, to implement an agreement between Canada and the Socialist Republic of Vietnam, an agreement between Canada and the Republic of Croatia and a convention between Canada and the Republic of Chile, for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income, and acquainting the Senate that they had passed the bill without amendment.


Pages Exchange Program with House of Commons

The Hon. the Speaker: Honourable senators, I would like to introduce to you the Page who is here with us on the exchange program from the House of Commons. Andrea Dingwall is from Waterloo, Ontario. Andrea is enrolled in the Faculty of Administration at the University of Ottawa and is majoring in commerce.

Welcome to the Senate.

Hon. Senators: Hear, hear!


Business of the Senate

Point of Order

Hon. Marcel Prud'homme: Honourable senators, section 22(6) of the Rules of the Senate addresses statements by senators. Today, Your Honour rightly reminded us that honourable senators have only three minutes for a statement. It would be advisable if you were to remind us of that from time to time. I am not laying any blame on anyone.

I would like to speak about the re-election of Mayor Bourque. Unfortunately, I am not as quick on my feet as usual. I would like to speak about yesterday's election -


- the meaning of the election yesterday, but I was not fast enough. I also wanted especially to congratulate Vancouver which has been chosen to bid for the Olympics in the year 2010. It is a good sign that I, as a person from the province of Quebec, can say that I am very happy and I rejoice with the people of Vancouver for getting the right to bid for the games in the year 2010.

Having made my three points, I just wish that the leadership would get together to re-emphasize rule 22(6) of the Rules of the Senate concerning Senators' Statements, which should be three minutes. I am not hitting at any one of my colleagues because I, myself, have gone over once in a while. Perhaps the Rules Committee may decide that Senators' Statements are such an interesting part of our deliberations that, instead of having just 15 minutes, we could go up to 20 minutes. However, that will not work either if one senator takes up 10 minutes of it.

Once in a while it would be good to remind ourselves of rule 22(6) which states that there is a three-minute limit unless leave is otherwise granted. It is very difficult, even unkind, to say no to one colleague's request for a prolonged statement and to say yes to another one. If we do not discipline ourselves, there will be much frustration.

I ask the Rules Committee to look into the possibility of five more minutes for statements, if possible. If it is not possible, we should be more careful the next time to say yes to everyone.

I know I have done it myself, and when I see the Speaker move, I know it is time to sit down. Before His Honour starts moving, then, I will sit down, having made my point of order.

The Hon. the Speaker: Does any other honourable senator wish to speak on the point of order?

If not, you have heard the comments of Honourable Senator Prud'homme. I would like to remind honourable senators that the rule is indeed three minutes and the total time allowed is 15 minutes. However, rule 22(8) states that there is the possibility for an extension. The request must come from a whip, who must approach the Speaker. It cannot be done by a senator.



National Defence Act

Bill to Amend-Third Reading

On the Order:

Resuming debate on the motion of the Honourable Senator Carstairs, seconded by the Honourable Senator Maloney, for the third reading of Bill C-25, an act to amend the National Defence Act and to make consequential amendments to other Acts, as amended.

Hon. Pierre Claude Nolin: Honourable senators, last week I asked that debate on third reading be deferred so that I could do a bit more reading up on this important bill. It is important to explain the bill's contents to our colleagues who are not members of the Standing Committee on Legal and Constitutional Affairs.

The purpose of this bill is a major reform of military criminal justice. The committee members reached the conclusion that this bill must be passed, but with certain amendments. The report presented last week by our colleague Senator Milne indicates our consent to pass the bill, along with certain concerns, some of them serious, which arose as we studied the bill, along with an amendment we proposed which stipulates that this new piece of legislation be re-examined by an independent group five years after coming into effect. This re-examination would be covered in a report tabled before both Houses of Parliament.

Now, coming to the topic I wish to address, I was involved in the adoption of the report. I examined some of the testimony given when I was not in attendance.

I was particularly troubled by the testimony of a member of the military who had acted as a military judge on two occasions. The mentality, the attitude of this particular military judge led me to wonder: Are they all like this?

I will read you a passage from the testimony of Colonel Bruno Champagne, who was a military judge on two occasions, from 1987 to 1991 and from 1994 to 1995.

He was answering a question from Senator Beaudoin on the way to achieve the institutional autonomy needed by a Canadian court.

Here is his answer:


There are different ways of achieving institutional independence. We are suggesting -

"We" being the department.

- that we are achieving it by term appointment.


Honourable senators, the department is proposing the appointment of military judges for a period of five years, with the option of renewal. You will agree with me that this is exceptional in Canada. The appointment of federally appointed judges is generally to the age of retirement, unless the judge himself decides to resign, which is always possible.

In the case of the National Defence Act, we understood the importance of applying civilian rules and adapting them to military life. We tried to understand that. We agreed with that in committee, until I read this testimony.



The aspect of a military career has an importance for everyone in uniform. On day one when you enrol in the Canadian Forces, even when you enrol as a military lawyer, you do not expect to become a military judge. What you see ahead of you is a career. Career progression goes with planning. People do not progress so much by fitting into positions or appointments but by being promoted.

This will explain, perhaps, where we are today. In the past, there was a perception, and perhaps a reality, that by being appointed a military judge, you would not progress in your career. Why did that perception and that reality exist? It is because, as we went along and as cases were developing in respect of institutional independence, we made changes to make the judges more independent. We said that the judges would not be evaluated in respect of their performance. To meet the criteria of financial independence, we set up a formula to guarantee that their pay would not be affected by or related to their decisions.

One of the concepts in career progression is not having performance evaluations like anyone else in the Canadian Forces. Your file will never go before what we call a promotion board. Basically, that is a board composed of officers trying to determine who is number one at the various ranks.

Normally, with attrition, the people at the top are the people being promoted. Military judges never make it on to that list. Now the term will be fixed unless the individual requests his appointment to be terminated, which is highly unlikely. At the end of the term, if the individual does not want to carry on as a military judge for personal reasons or for career reasons, and if he wants to come back into the mainstream to complete a full career, he will be permitted to do so. That is consistent with the progression of any other military career in the Canadian Armed Forces.


Honourable senators, when I read this testimony, I was shaken. The Canadian Charter of Rights and Freedoms also applies to individuals charged under the system of military justice. I would just remind you of subsection 11(d) of the Charter, and I quote:

11. Any person charged with an offence has the right:

(d) to be presumed innocent until proven guilty according to law in a fair and public hearing by an independent and impartial tribunal;

I submit to you - and no Canadian court would contradict me on this - that what I have just read applies to military courts. When a military judge is more concerned about his career and his advancement, we have a big problem. I asked myself whether the amendment proposed in our report would correct this situation.

I concluded that it can. I will therefore not move an amendment today. However, I wanted to remind honourable senators that it is important that we ask ourselves this kind of question. We must recognize that Bill C-25 is a huge departure from the existing system.

Right now, judges are appointed to trials on an ad hoc basis. In 1992, the Supreme Court ruled that our court martial system was contrary to the provisions of the Constitution, including the provision I just read. Bill C-25 would resolve part of the problem. If it does not, in five years we will have an opportunity to review what we will be passing a few minutes from now and to amend it accordingly.

Why did I conclude that our amendment would resolve the problem? I read the Supreme Court decisions in the well-known case ruling that our court martial system was inconsistent with Charter provisions. I am referring to R. v. Généreux, handed down in 1992. I quote:

...for determining whether a decision-maker is biased. The question is whether an informed and reasonable person would perceive the tribunal as independent.

What is meant by an informed and reasonable person? After hearing the testimony about what goes on in Canada's military, would I be such a person? It is about the importance of maintaining the provisions of the Charter and the Constitution and reconciling them with the need to maintain discipline within the Armed Forces?

I concluded that that was what was meant by an informed and reasonable person, and that the courts would perhaps reach the same conclusion.

If I am mistaken, you can be sure that defence lawyers, whether paid by the Department of Defence, because that will be one of the new procedures, or by the accused himself, if he elects not to be defended by a lawyer supplied by the department, will be free to advance the provisions of section 11(d) of the Canadian Charter of Rights and Freedoms and Bill C-25's failure to respect those provisions.

Honourable senators, I will conclude by urging you to support this bill and the amendments that we tabled last week. In five years at the most, we will have ample opportunity to review the report of an independent committee which - as we all hope - will have had an opportunity to look at the consequences and the implementation of the bill on which we will be voting today.


The Hon. the Speaker: If no other honourable senator wishes to speak, we will proceed with the third reading motion.

It was moved by the Honourable Senator Rompkey, seconded by the Honourable Senator Fairbairn, that this bill, as amended, be read the third time now. Is it your pleasure, honourable senators, to adopt the motion?

Motion agreed to and bill, as amended, read third time and passed.

Canada Small Business Financing Bill

Second Reading-Debate Adjourned

Hon. Ross Fitzpatrick moved second reading of Bill C-53, to increase the availability of financing for the establishment, expansion, modernization and improvement of small businesses.

He said: Honourable senators, I am pleased to introduce Bill C-53, the Canada Small Business Financing Act. This bill is a result of extensive discussion and analysis, including the following: Industry Canada's year-long, comprehensive program and policy review of the existing Small Business Loans Act; thorough consultations with both private and public sector stakeholders; consideration of the Auditor General's recommendations; the cross-Canada hearings of the Standing Senate Committee on Banking, Trade and Commerce; and the review and amendments by the House of Commons Standing Committee on Industry.


Our aim is a streamlined program that responds to the needs of small and medium-sized businesses. It provides stability for a vital sector of our economy, stronger accountability to Parliament, and two innovative pilot projects that were included in the Senate committee's recommendations.

The proposed act contains no changes to the major program parameters. The new provisions it contains are aimed at ensuring the long-term life, financial viability, effectiveness and accountability of the program.

There are more than 2.5 million small businesses in Canada, including self-employed individuals. They account for 99 per cent of all Canadian businesses. Together, they have generated 70 to 80 per cent of all new jobs in Canada over the last three years. Businesses with 100 employees or less account for 50 per cent of all private sector employment and 43 per cent of private sector output. It is a sector of the economy that continues to grow. Growth in the small business debt financing market outpaced that of the total business market, increasing by 20 per cent between 1994 and 1996.

Despite the increase in available capital and the increase in lending, access to credit continues to be identified by entrepreneurs as a significant barrier to the growth of small business. This is precisely why we are asking the Senate to approve the Canada Small Business Financing Act.

Honourable senators, let me outline some of the key provisions contained in this bill.

Loans may be made by approved lenders for terms up to 10 years; businesses will be able to borrow up to $250,000; lenders must pay a one-time, up-front 2 per cent registration fee which can be charged to borrowers; and, in addition, lenders may pay an annual administration fee of 1.25 per cent.

The bill also authorizes Industry Canada to conduct audits to ensure compliance with the act and its regulations and, instead of the current sunset clause, every five years the department will conduct a comprehensive review of the program, using an evaluation framework and performance measurements. The resulting report on the program's performance effectiveness, financial viability and progress towards cost recovery will be tabled in Parliament and referred to committees for consideration.

As a means of maintaining and ensuring cost recovery, the Governor in Council will have the power, through regulation, to restrict eligibility criteria for access to program loans.

The Crown's contingent liability is capped at $1.5 billion over five years. This means that, regardless of the dollar value of the loan made under the act, taxpayers will never have to cover more than $1.5 billion dollars in losses over that period.

In response to recommendations from the Standing Senate Committee on Banking, Trade and Commerce, the bill proposes creating two financially self-sufficient pilot projects: one for capital leasing and the other to extend lending to the voluntary sector.

Allow me to briefly explain the rationale and thinking behind these provisions. Provisions for a 10-year loan term and $250,000 maximum ceiling were both widely supported by stakeholders during our consultations. Similarly, registration and administration fees were seen to be fair, given the program's movement towards cost recovery. The audit requirement responds to a recommendation from the Auditor General. The sunset clause that calls for the program to come to an end after five years created anxiety for both lenders and borrowers. It has also led to situations where Parliament has been asked to provide legislative authority while facing a tight deadline.

Under the new provisions, Parliament will continue to exercise its control over costs of the program and to exercise its right to review the program's effectiveness every five years.

There are new regulatory powers that allow for access to the program to be restricted, should the goal of cost recovery be threatened. The bill makes it clear that this power is restrictive only. Furthermore, parliamentarians will receive notice of changes in regulations. Should a future administration wish to expand the program it would need to seek parliamentary approval.

Earlier this year, Parliament set the program's total lending ceiling at $15 billion. Traditionally, the lending ceiling has been used to control the size of the program. This has led to confusion and to the mistaken belief that taxpayers are lending the entire $15 billion. This is not the case. Lenders are lending money they raise themselves.

To make government's and the taxpayers' liability absolutely clear, we are introducing the contingent liability of $1.5 billion. Program costs never come close to that contingent liability and these costs will now be offset by revenues. I should also like to point out that this contingent liability allows the program to continue guaranteeing lending of approximately $2 billion per year, which is the current yearly average.

Honourable senators, I should now like to comment on the two innovative, new pilot projects that will be made possible by the bill.

Capital leasing is a rapidly growing form of small and medium-sized business financing. Some honourable senators and the leasing industry have pressed for its inclusion under the program. That is why authority to design a capital leasing pilot program is included in the bill. It would test the need to fill an apparent but as yet unproven gap.

The voluntary sector continues to play an increasingly important role in Canada. Consistent with the government's commitments, Industry Canada consulted members of the voluntary sector to determine whether the program under the proposed act should be extended to this sector. Some indicated that extending the act would make a real difference to a voluntary group's ability to serve their community. The proposed pilot would test this view and it, too, would be designed to be self-sufficient.

The government did not accept the suggestion that the proposed act be used to provide access to working capital. Stakeholders said that they did not see the program as an appropriate way to meet their working capital needs. In any case, the program already facilitates access to working capital indirectly because of the 90 per cent financing rate in fixed assets. This leaves a greater proportion of equity available to finance working capital.

I should like to draw your attention, honourable senators, to a commitment made by the Minister of Industry concerning the pilot projects. He has undertaken to call on the advice of honourable senators - through the Standing Senate Committee on Banking, Trade and Commerce - when the regulations and parameters of the two pilot projects are being drafted. I believe the input of committee members will be most important in devising sound pilot projects.

Honourable senators, I am grateful - and the government is grateful - to the Standing Senate Committee on Banking, Trade and Commerce for its excellent work on Bill C-53. Its cross-Canada hearings in July, followed by its September report, have been most helpful in improving the legislation and regulations, and a detailed response to each recommendation will be forthcoming during the committee stage.

While it has not been possible to incorporate every suggestion and recommendation of the committee in the proposed act, the conscientious and thoughtful work carried out by committee members has been very beneficial.

Honourable senators, we are all aware that the legislative and regulative process is evolving. Bill C-53 is one of the first to have the proposed legislation and regulations before a committee at the same time. Committee members requested this specifically, given that more of the details of the administration of the program are now to be found in the regulations.

One consequence of the current March 31, 1999, program sunset date can be seen in the time available for the development of the regulations. Honourable senators should know that 1,500 delivery partners have requested three months to train their staff at 13,000 points of service before the new program provided in this act opens for business on April 1, 1999. This requirement, necessary for smooth transition to the new program, has compressed the time available for development of legislative and regulatory proposals.

One result of this time constraint has been the tabling of the consultations draft of the regulations in the committee at the same time as they were sent to stakeholders for comment. While this process has led to some misunderstanding by stakeholders, which Industry Canada has worked to resolve, this legislative initiative reflects a new way of drafting legislation.


Under Bill C-53, every proposed regulation must be laid before both Houses of Parliament before it is made. Regulations must also be referred to the appropriate committee of each house.

The intent of these provisions is to impose an obligation on the government to notify Parliament of changes to regulations. Furthermore, this will make absolutely sure that they are brought to the attention of the appropriate committees. If they chose to do so, committees would then have an opportunity to schedule time to study the proposed amendments and provide comments.

Although this notice requirement would not delay the making and coming into force of the regulations in accordance with the established regulatory process, where the proposed regulations are prepublished in the Canada Gazette, the committee's comments, as well as those of other interested stakeholders made during the pre-publication period, would be taken into consideration.

Again, honourable senators, I trust you will see in these provisions a positive sign of parliamentary accountability and of the committee system.

To conclude, honourable senators, may I remind you of the critical importance of this bill. Created in 1961, the program has an overall record of great success. Its results demonstrate the need to make it a stable, long-term instrument of our economic policy. Last year it provided access to nearly $2 billion in financing. This means that close to 30,000 firms across the country in all regions got necessary financing that they might not have had access to otherwise. Some 9,000 of these firms were in rural communities. The majority of loans, averaging nearly $68,000, went to firms less than three years old.

The success rate of the program is high. Defaults have fluctuated periodically, and we anticipate a rise for a period, but the fact is that the loss rate on loans has been an average of only 5.6 per cent over the 37-year life of the program. Private-sector forecasts suggest that the current fee structure is expected to offset the claims costs on the programs made since 1995.

The Canada Small Business Financing Act, which the Senate is being asked to approve, does not in any way represent a subsidy to small business, to banks or to other lenders. The program shares the risk of lending among borrowers, lenders and taxpayers. Loan losses now guaranteed under the program are expected to be cost-recovered.

Bill C-53 will continue to offer a way for government, financial institutions and small-business borrowers to share the risks of fixed-asset-based lending to smaller, younger firms. In providing this risk pooling, the proposed Canada Small Business Financing Act will support one of the most dynamic growth sectors in the Canadian economy. For all of these reasons, I urge all honourable senators to support its passage as soon as possible.

On motion of Senator Tkachuk, debate adjourned.

Royal Assent Bill

Consideration of Report of Committee-Motion in Amendment-Speaker's Ruling

On the Order:

Resuming debate on the motion of the Honourable Senator Milne, seconded by the Honourable Senator Bryden, for the adoption of the Twelfth Report of the Standing Senate Committee on Legal and Constitutional Affairs (Bill S-15, respecting the declaration of royal assent by the Governor General in the Queen's name to bills passed by the Houses of Parliament, with amendments) presented in the Senate on June 18, 1998,

And on the motion in amendment of the Honourable Senator Grafstein, seconded by the Honourable Senator Pépin, that the Report be not now adopted, but that it be referred back to the Standing Senate Committee on Legal and Constitutional Affairs for further consideration. -(Honourable Senator Kinsella).

Hon. Noël A. Kinsella (Acting Deputy Leader of the Opposition): Honourable senators, this item stands in my name, and I would ask leave to yield to Senator Grafstein.

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

Hon. Senators: Agreed.

Hon. Jerahmiel S. Grafstein: Honourable senators, I revisit this bill with some trepidation. Senators will recall that the Leader of the Opposition in the Senate introduced this bill last spring as a private member's bill to curtail the current practice of public Royal Assent - in effect, to change Royal Assent into a sort of e-mail. All agree that the public practice of Royal Assent has suffered erosion, as I noted when I spoke on this issue last. However, we should commend the Leader of the Opposition in the Senate for at least bringing this matter to our attention.

Still, as I mentioned before, the Right Honourable John Diefenbaker may have glanced down from his perch on high and may not be kindly disposed to his fellow party cohorts. As I told the committee and I repeated in this chamber, it is passing strange for us on this side to recall the ghost of John Diefenbaker, but in the Senate, as we know, all things are possible.

I find it even more interesting that in my youth I held a different view. In my dotage, I have come to more fully understand the essence and the intangibles of the Crown as a constitutional symbol, especially when the Crown might act as mortar to keep the country unified. More important, the Crown is an indispensable, if opaque, element in our constitutional practice. We all know the ignorance of our youth on our constitutional processes. We have simply too few constitutional practices that can educate the country on the role of the Crown, as represented by the Governor General, the role of the Senate, and the role of the other house, all acting together within Parliament.

By this bill, honourable senators, the Leader of the Opposition in the Senate seeks to eliminate the public practice of Royal Assent whereby the Governor General attends in the Senate before the Speakers and a quorum of both Houses of Parliament to formally assent to bills which have been passed by both houses. Senators should recall that it is this act of Royal Assent, and this act only, that transforms ideas into laws, awaiting only the timing of implementation by Royal Proclamation at the call of the government.

I need not remind honourable senators that the Governor General, as Her Majesty's representative, as the representative of the Queen in Canada and the constitutional head of state, has only three constitutional duties: to open Parliament via a Speech from the Throne; to issue writs to dissolve Parliament; and to proclaim our laws by giving Royal Assent to bills passed by both Houses of Parliament.

What is the litany of objections to this current practice? Let me formulate that litany fairly, if I can.

We are told that it may be inconvenient to His Excellency the Governor General, due to the episodic scheduling of Royal Assents here in the Senate that tend to conflict with his other, more pressing public duties. Thus, we have been honoured by the attendance of surrogates - the chief justice and other justices of the Supreme Court - to grant assent in this place. However, we are informed that the participation of justices in Royal Assent may interfere with their rather onerous judicial duties.

We are also told it may be inconvenient to obtain the small quorum of members required from the other house. We are told that the scheduling sometimes interferes with the Prime Minister's always overloaded public duties.

Of course, we are told that the bureaucracy would prefer efficiency over ceremony and efficacy over inconvenience. Even some senators would prefer to cleanse the Senate of what they consider to be this rather inefficient symbolic relic.

Having in mind this exhaustive list of concerns, I have considered a number of amendments that might ameliorate the bill and maintain efficiency, while dissolving these concerns, better organize our Senate work and still render unto the Canadian public a visible constitutional practice that could educate our youth and our public on the nature of our constitutional triarchy - the Governor General and the two Houses of Parliament - that goes to the very heart of our responsible government.

Accordingly, honourable senators, I propose that this bill be referred back to the Standing Senate Committee on Legal and Constitutional Affairs where I would be pleased to present detailed amendments which may meet all the concerns raised and still sustain, as a teaching consequence and teaching sequence, the high visibility of the Governor General while practising the ancient principle of transforming ideas into the laws of the land.

Many times, honourable senators, I have been asked: Just what does the Senate do? What do senators do? I hope fewer but better publicized Royal Assents will provide at least one educated answer to that larger question. I would ask honourable senators to support my proposal to refer the report of Bill C-15 back to committee for further consideration.

The Hon. the Speaker: If no other honourable senator wishes to speak, I will proceed to read the amendment.


Point of Order

Hon. John Lynch-Staunton (Leader of the Opposition): Honourable senators, as the sponsor of the bill, I wish to say a few words. I am a little surprised at the turn of events. The purpose of bringing this bill forward was simply to provide an alternative to the present Royal Assent procedure.

What has happened is that the bill has gone through lengthy debate here and before the Legal and Constitutional Affairs Committee, which recommended two or three amendments. Others have come into the debate. I feel that the bill is not going anywhere.

Therefore, I think the best thing to do now is, with leave, withdraw the bill. As sponsor of the bill, I do not know if I am entitled to do that. I would re-introduce it at another time, taking into consideration all the representations that have been made.

I intended this to be a non-partisan effort, but it has got a bit out of hand. I do not know whether it is appropriate, or if it is the right time, but if, as the sponsor of the bill, I still have some control over it, I would like to see it dropped from the Order Paper.

Hon. Jerahmiel S. Grafstein: Honourable senators, I hope that the Leader of the Opposition will not take my comments or my work on this as being in any way partisan. I am talking about the institution of the Senate. In his absence, I commended the honourable senator for bringing this matter forward which has provided us the opportunity to look at it in some detail.

The committee dealt with the bill in one or two sessions. Because of the urgency of other matters, we did not have time to give it some further consideration or to look at the historical underpinnings of Royal Assent. The summer allowed us all, including myself, to take a look at those historic assumptions. With the leader's consent, I would prefer to refer this matter back to the committee briefly so that it may hear my proposals, and perhaps after that the committee will come to a quick conclusion.

It is certainly not my intention to suffocate this bill. However, I think it is an important matter. It is a symbolic matter. Many senators who were not apprised of the matter will be more fully educated on it if we have an opportunity to bring back at least an amended report.

The Hon. the Speaker: Honourable senators, Honourable Senator Lynch-Staunton has indicated that he is prepared to withdraw his bill, which presents some problems from a technical standpoint.

The bill is not really before us at the moment. What we have before us is the report of the committee. I will have to look at this matter to see how Senator Lynch-Staunton's request can be accomplished, if it can be accomplished at all at this point.

Therefore, I propose to take the matter under advisement.

Hon. Eymard G. Corbin: Honourable senators, I wanted to propose the adjournment of the debate. However, since there is a matter before the Chair, I will suspend my request.

The Hon. the Speaker: If the Senate is disposed after my comments, I can adjourn the debate. That will give us time to have a look at the precedents.

Hon. Noël A. Kinsella (Acting Deputy Leader of the Opposition): Honourable senators, this is an interesting procedural point. I hope His Honour will reflect upon it and come back to this house with his view so that we may learn something. It is rather novel.

The Hon. the Speaker: Honourable senators, I will take the matter under advisement and we will weave our way through the complicated process.


Official Languages

Progressive Deterioration of French Services Available to Francophones Outside of Quebec-Inquiry-Debate Continued

On the Order:

Resuming debate on the Inquiry by the Hon. Senator Simard, calling the attention of the Senate to the current situation with regard to the application of the Official Languages Act, its progressive deterioration, the abdication of responsibility by a succession of governments over the past 10 years and the loss of access to services in French for francophones outside Quebec.-(Honourable Senator Losier-Cool).

Hon. Rose-Marie Losier-Cool: Honourable senators, my speech today on the Canadian francophonie stems from the debate initiated by Senator Jean-Maurice Simard and Senator Gerald Comeau. I thank them for their comments on this issue. I wish to enlist your cooperation in finding all possible means to promote the development and expansion of Canada's francophone and Acadian communities.

Since November 2, 3 and 4, a number of senators, members of Parliament and ministers from all political parties have had an opportunity to confer with officials from the Fédération des communautés francophones et acadienne, and various other associations across the country. These people were conducting a two-tier awareness campaign among Canadian parliamentarians.

First, they wanted their organizations and the situation of minority francophones and Acadians to be better known. Second, they were trying to enlist the support of Canadian parliamentarians in their efforts to obtain funds that are essential to their survival and their development.

I had an opportunity to talk with a number of officials representing associations of francophones in Canada. I previously had the pleasure of getting to know several of them through my numerous trips to the various francophone and Acadian communities across the country.

At their request, the Joint Committee on Official Languages heard a number of witnesses representing the Fédération des communautés francophones et acadienne at its November 4 meeting. As can no doubt be verified by the honourable senators who sit on this committee, these witnesses did not hesitate to apprise us of the crisis many francophone and Acadian communities across the country are going through.

At information sessions, association leaders, volunteers and the young people trying to take over all complained about being spread thin. Their message was very clear: Additional funding is urgently required. The underfunding experienced as a result of the massive cuts in recent budgets is having an increasingly noticeable impact. The lack of financial and human resources has reached a critical level where they can no longer function. Volunteer work is jeopardized, and we all know how essential it is to our communities. This lack of resources is forcing volunteer organizations to concentrate on fundraising instead of developing and implementing a plan for living in French. In the 1993-94 budget, the funding earmarked for the organizations and institutions of official language communities under Heritage Canada's official languages assistance programs was $25.6 million. But since the 1996-97 budget, this amount has been cut and remains unchanged at $21.8 million.

Despite the difficulties encountered by various francophone and Acadian communities, I must speak to you of the success of the francophone community of Newfoundland and Labrador after the first year of existence of their francophone school board. In June 1997, the provincial government of Newfoundland and Labrador amended the Newfoundland School Act to create the Conseil scolaire provincial francophone de Terre-Neuve et du Labrador. A federal-provincial wage administration agreement was then signed, which finally gave the francophones of Newfoundland and Labrador the necessary tools to administer their own schools. The fledgling Conseil scolaire francophone provincial held its first regular meeting in January 1998. On July 1, 1998, it assumed full administrative control over schools and staff under its jurisdiction. This past September 12, its first ever annual meeting was held at Grand'Terre.

I am proud of the francophones of Newfoundland and Labrador, and of the provincial and federal governments for their teamwork in collaboration with all the stakeholders involved in the successful creation of this school board.

I would like to go on now to another example of the struggles experienced by francophone minorities. At its November 4 meeting, the joint committee on official languages heard evidence from the Association des juristes d'expression française de l'Ontario. They came to share with us their dissatisfaction with the provisions of the Contravention Act and regulations, as well as the agreements under section 65.3.


Following first reading on January 20, 1997, Bill 108, concerning proceedings pertaining to certain provincial infractions, reducing duplication and simplifying administration, this association of francophone jurists called for a legislative provision guaranteeing the maintenance of all language rights. The association submitted a memorandum to this effect on May 1, 1997 to the standing committee on government affairs of the Ontario legislature. I quote the memorandum:

It was not easy to amend the legislation. Why indeed would the Ontario legislator provide the legislative guarantee the federal legislator did not consider appropriate to grant?

After more than a year of discussions, the association of francophone jurists agreed to a compromise: the bill was changed to indicate that, in the event of failure to honour an agreement between a municipality and the Attorney General, the effect of which would be to detract from the defendant's right to a fair hearing, the proceeding would be annulled.

Honourable senators, this complaint by the association of francophone jurists concerns constitutional language rights directly. As Senator Beaudoin put it so well at the committee meeting - and I support his statement - language rights guaranteed by the federal government cannot be threatened when the very law was developed and enacted by the Department of Justice of Canada. The association recommended to the Joint Standing Committee on Official Languages that the Contraventions Act be amended to include a guarantee of language rights in cases where provinces or their municipalities take on proceedings against federal contraventions.

On another point, at the start of the new year, the Standing Committee on Official Languages will have the opportunity to hear the task force on the effects of government changes on official languages, chaired by Yvon Fontaine, which was set up by the President of the Treasury Board, the Honourable Marcel Massé. The task force was set up following discoveries in the study by the Commissioner of Official Languages on the effects of administrative decentralization, privatization, restructuring and federal cuts on Canada's official languages program. Its mandate is to look at the effect on the official languages of the changes that have occurred in government in recent years, and to propose to the President of the Treasury Board any appropriate improvement measure, as early as the fall of 1998. This deadline has now been pushed back to January 1999.

This working group is made up of eight members from academia, the private sector and the two linguistic communities representing all the regions of the country. Their interest in the rights of official language minority communities is well known.

The Standing Committee on Official Languages is anxiously awaiting the tabling of that report, in early 1999.

Honourable senators, Canada is like a puzzle: all the pieces must be there to make it complete. Without unconditional support for francophone and Acadian communities, our country's national unity, in which we all firmly believe, is threatened, because without the presence of these communities, and without their enormous contribution, we are incomplete.

French is the language spoken by over seven million Canadians. These are Canadians living in every province and every territory who want their rights to be protected and promoted all across the land. Everyone, including the federal government, has a duty to ensure these rights are protected. Our country's cultural, economic and social ties depend on it. It is a matter of national unity.

In so doing, we are showing the rest of the world the specific traits of the Canadian reality. These traits give all Canadian francophones and francophiles a window on the world, as well as an opportunity to reach out to a large number of countries on every continent.

Hon. Gerald J. Comeau: You spoke primarily about the Province of Ontario. I do not know, however, whether you are aware that, in Nova Scotia right now, parents of Acadians are taking their fight against the province and the Acadian provincial school board to the Supreme Court. From what we can understand, the province has refused to hear the arguments in French. In other words, the parents association has to get all the documents, most of which are in French, translated into English, because the province is insisting on an English-speaking lawyer. The association must also pay court interpretation costs. Could we have your comments with respect to Nova Scotia's position on this very important issue? Is this the message we want to send our Acadian parents?

Senator Losier-Cool: I am aware of all that is going on in Nova Scotia. As you know, the Government of Nova Scotia has appointed a minister for Acadian affairs, who was contacted in an effort to find a solution. The same thing is going on in Prince Edward Island. This is another example of the struggles facing francophones who, when they are exhausted, must take their case to the Supreme Court. This should not happen.

I do not wish to engage in partisan politics. That is not my interest. I am interested in defending Canadians in a minority situation. If, in order to secure their rights under the Official Languages Act, they are constantly obliged to turn to the Supreme Court, it is not surprising that they are exhausted.

Senator Comeau: I agree with you that this should not be a partisan debate. It is too important an issue. However, the minister for Acadian affairs should assume his responsibilities. We should not have to tell him what they are and alert his premier, who is perhaps unaware of the importance of this issue. Perhaps you and I will have to remind the minister of his responsibilities. Would you agree to work with me on this?

Senator Losier-Cool: I was about to suggest that you do it since this is your province, but I will gladly help you raise the Prime Minister's awareness.

Hon. Noël A. Kinsella (Acting Deputy Leader of the Opposition): Honourable senators, Senator Losier-Cool indicated by how much the funding for Heritage Canada's official languages program was cut back. I remember her mentioning that the funding for this specific program was cut by approximately 40 per cent. The honourable senator quoted some figures, and I would appreciate it if she could run them by me again.

Senator Losier-Cool: It may not be quite 40 per cent, but this funding was reduced from $28 million to $21 million. Francophone organizations are asking, through this awareness campaign, that funding be restored to its $28 million level.

The Hon. the Speaker: Honourable senators, the time allotted for comments and questions has run out. Is leave granted to continue the debate?

Some Hon. Senators: Yes.

Senator Kinsella: One of the objectives of Heritage Canada's official languages program was to support community groups, and one way of achieving this objective is by providing assistance to language minority groups in developing new generations of leaders.

According to the groups we met in Parliament two or three weeks ago, this quest for new generations of young leaders is one of the elements of the crisis the French-speaking community outside Quebec is going through.

Could you comment on the value of government assistance programs for the development of new leaders in the French-speaking community? I was under the impression this was one of the problems raised by the group.

Senator Losier-Cool: Their association's administration funds were cut, and as a result of these cuts they no longer had the means or structure required to implement these projects.

Following the establishment by the Honourable Marcel Massé of the task force whose report is to be tabled in January 1999, we must help resolve this issue so that programs can be launched that comply with section 7 of the Official Languages Act.

The government is responsible for promoting - this does not mean merely tolerating or understanding - francophone communities. The associations base their demand for program funding on this provision of the act.

On motion of Senator Beaudoin, debate adjourned.


Family Violence

Inquiry-Debate Adjourned

Hon. Sharon Carstairs (Deputy Leader of the Government) rose pursuant to notice of November 25, 1998:

That she will call the attention of the Senate to the magnitude of family violence in our society and, in particular, the need for collaborative efforts to seek solutions to the various aspects of this form of violence.

She said: Honourable senators, at the end of the 20th century, we live in a society that is increasingly concerned with issues of violence. More than ever before, the media has been able to bring home to us just how vulnerable we are to terrorism, gang violence, and blatant acts of physical mischief. I think we all feel that, in some way, at a whim, we can experience violence; that it can step out and touch us.

Regrettably, we are most vulnerable in the one place we should be safe in our homes and in our relationships. Family violence is a form of mental or physical abuse that occurs between two intimate people, two people who are in a relationship based on trust and familiarity. It could happen to anyone, and unfortunately it could come from anywhere.

When we talk about relationships of trust and familiarity we are referring to spousal abuse, child abuse, and elder abuse. The abuse can take several forms. It can be mental, sexual, physical, or even a combination of all.

I do not think many Canadians realize how broad and how subtle certain forms of abuse can be. By using their position of trust, abusers can easily intimidate those who are close to them but weaker than them by shouting, by ordering, by using abusive language or coercive behaviour.

Domestic abuse may be termed broadly as unreasonably forcing someone to do something that they cannot be expected to do, or that they do not wish to do. In all cases, the perpetrator of the abuse uses this position of trust and/or authority, not only to commit their acts of indecency and violence but also to justify them.

Family violence is not something that happens only in bad families or in economically disadvantaged families. It is not something that happens in a certain class of people, in a certain race, or in a certain education bracket. It is commonly believed that abusers are poor, or alcoholic, or suffering from mental illness. One stereotype is that all abusers are men. This is a misrepresentation of reality.

Although according to most studies the majority of abusers are, regrettably, male, it would be folly to say that all abusers are men. Women too are involved in family violence. Although it has long been believed that women did not partake in some forms of abuse, such as sexual abuse, new studies are showing that women too are perpetrators of sexual and physical violence against children, the elderly, and against adult men and women.

It should be noted that abusive attitudes vary between the sexes. Among men, the violent tendencies are more openly physical, and manifested in brute violence and forcefulness. In women it is quite different. The abuse aims often at mental decapitation, and is much more subtle in its forms.

Honourable senators, it is extremely difficult to determine just who the typical abuser is because so many cases go unreported, and also because all of the evidence points to the diverse backgrounds of abusers, irrespective of gender, age, race or profession. The only point of similarity we can find among abusers in the area of family violence is that they are known to their victims. Rather than making this easier for the researcher, this often only adds complicated methodological problems. It is this very intimacy that exists between the abuser and the abused that contributes to the covering up of the issue. Hence, so many cases go unreported.


The most easily recognized form of domestic abuse is spousal abuse. The scars of spousal abuse are far deeper and more damaging than what is most evidently visible to society at large. It is a taxing form of civil violence as it disrupts the very foundation of the family unit. The home, generally considered a place of peaceful rest, becomes a war zone, tension dripping on every action. In intimate relationships between people living with each other, the trust element is undermined by such violence in the very circumstance in which it is perhaps most important. Emotional or economic dependency also makes it difficult for the abused individual to leave the relationship. These problems have been discussed now for some time, but honourable senators, we still have not found many solutions.

Increasingly, we are becoming aware of the problems children face, not only in situations of spousal abuse, as studies show that children are also victims in spousal abuse, but also in cases of child abuse. Children are easily the victims of domestic violence, even if their involvement is relegated to being witnesses.

The emotional damage of such frightening circumstances can cause a young mind significant trauma. This is compounded when children are also victims of child abuse. Abuse of children can take many different forms and can be quite subtle, from sexual abuse, to physical abuse, to neglect.

Children are easy prey for sexual predators who can easily manipulate their position of authority. Think for a moment, honourable senators, of when you were a child. When we had problems, we would turn to our parents. However, what if the parents are the very ones perpetrating the abuse? Where then can a child go for help?

Nonetheless, most abuse against children comes at the hands of a relative, a close friend or someone with a close family connection. As a child, then, how are you supposed to react? These are adult authority figures. Their actions, therefore, weigh heavily upon the child. Ashamed, guilty, the child may decide not to talk about their abuse, or they may not be able to understand that it is abuse. This is what leads to so many cases going unnoticed.

Child abuse may take other forms. It may be harassment about the child's weight or appearance. This harassment can lead to important emotional scars later in life. Such harassment illustrates the subtlety that child abuse takes. Children who are harassed about their appearance will often display the same kinds of character disorder as children who have suffered from sexual assault. Both will suffer significant problems of self-esteem that can lead to problems in interaction with others in society.

Spousal and child abuse have to some extent been recognized in our society, largely misunderstood, but nonetheless recognized.

I would briefly address another type of abuse which is just as important but which is beginning to receive just a bit of attention, elder abuse. Many people do not realize how prevalent this has become in our aging society. It may vary from actual sexual or physical abuse to more subtle versions of emotional and mental abuse. Again, under-reporting of these cases appears to be systemic. Who can the elders of society turn to when these events occur? Often, these acts occur at the hands of the caregivers upon whom the elderly depend. Additionally, our stereotypes about the elderly as being old and unproductive members of society have contributed to the inadequate response and facilities available for survivors of elder abuse. Much work remains to be done in this field.

Family violence, honourable senators, has a significant social cost. Family violence and abuse are now recognized as the major cause of criminality by the National Crime Prevention Council which estimates costs of $46.3 billion per year in Canada.

In 1995, the Centre for Research on Violence Against Women and Children prepared a paper entitled: "Selected Estimates of the Costs of Violence Against Women." They found that violence against women and children alone cost over $4 billion to society per year.

The total costs are broken down into four policy related fields: First, the costs of social services and education are $2.4 billion. Second, $872 million is spent on criminal justice matters. Third, $577 million is spent on labour, employment expenses and missed work days. Finally, the cost of health and medical service is in the neighbourhood of $408 million.

Not only were these costs incurred by the individual, but the vast majority of these costs were picked up by the government. Honourable senators, 87.5 per cent of the $4.2 billion was paid for by the government from moneys collected through public taxation.

Honourable senators, these costs are dwarfed by the costs paid by the victims of violence. The trauma of having to deal with such a personal violation can be an energy-consuming and painful activity. Children remain emotionally scarred for life and their ability to achieve their potential is reduced. This is certainly not the case with all children, but from my own experience with sexual assault, I can tell you that I would have appreciated not having to tackle that hurdle in order to attain the position I now hold.

For some, this hurdle could simply be insurmountable or may block certain options. The cost of lost opportunities and underproductivity in the work force caused by family violence are impossible to quantify.

Honourable senators, the effects of family violence and violence against women are felt at all levels of society. Services exist to help perpetrators and victims of violence. Legislation and public policy is constantly evolving to respond to problems of violence. However, these are, in my view, band-aid solutions.

On December 6, we will mark the ninth anniversary of the mass murder of 14 women at the École Polytechnique, in Montreal. Following the massacre in 1992, the previous federal government, through its family violence initiative, announced the creation of five research centres, each a partnership between communities, governments and universities with a mandate for research, communication and education on family violence and violence against women.

Honourable senators, it was a remarkable achievement. The centres were located in Fredericton, New Brunswick; Montreal, Quebec; London, Ontario; Vancouver, British Columbia and Winnipeg, Manitoba. Each was given funding grants for a five-year term with the understanding that they would then become self-financing.

The Manitoba Research Centre on Family Violence and Violence Against Women was one of the original five federally funded centres. The Manitoba centre has been doing collaborative research through an equal partnership with service providers, academia and policy-makers since its establishment.

Since 1992, the centre has conducted 30 action research projects on prevention, reduction and crisis management of violence involving teens, children, families, seniors, aboriginal people, various ethnic groups, prisoners, Canadian military members, employees in the workplace and mentally challenged adults.

The centre has sought to inform public policy and identify best practices for community service providers. Let me highlight one of its more successful projects.

The Manitoba research centre has been involved in a seven-year evaluation of the specialized criminal court in Winnipeg designed to handle family violence cases. The principal investigator with the centre works closely with the court implementation committee, a committee of the Manitoba Department of Justice which is chaired by the chief judge of the provincial court.

To date, this research project has been used to support the growth of the specialized Crown attorney's unit from 3 to 11 prosecutors; to reallocate correctional services staff duties to provide for province-wide programming for convicted spouse abuse offenders; to develop a specialized unit within corrections to ensure all offenders receive treatment during the duration of their sentence; and the centre also recommends the Department of Justice initiative to provide women at risk with direct-dial mobile phones to police to provide security in pre-trial and stalking situations.

Honourable senators, this is just one example of one research centre and the very fine work it is doing in this country. It provides a valuable service to its community, and to policy-makers, one that we need for more than the five years which came to an end in December of 1997.

The Muriel McQueen Fergusson Foundation in New Brunswick was the first to tackle the problem of its continued existence as a research centre.


The foundation launched a successful endowment campaign to endow the Muriel McQueen Fergusson Centre for Family Violence Research. In 1996, I was approached by the Manitoba Research Centre about seeking long-term funding for that centre.

The Hon. the Speaker: I regret to have to interrupt the honourable senator, but the 15-minute period for debate has expired.

Senator Carstairs: May I have leave to continue?

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

Hon. Senators: Agreed.

Senator Carstairs: After consultation, what resulted was the expansion of the mandate of the Manitoba Research Centre to all three prairie provinces and the establishment of the Prairie Action Foundation to raise funds for the long-term endowment of the new research network.

The prairie-wide network, now called RESOLVE, Research and Education for Solutions to Violence and Abuse, remains located at the University of Manitoba in Winnipeg. Its mandate is to seek and support solutions to keep every individual safe from family violence and abuse through research, public education and training. However, this centre will now conduct research, not just in the Province of Manitoba but in the Province of Saskatchewan and in the Province of Alberta; all senior universities have joined in making RESOLVE a prairie-based initiative.

Honourable senators, on Friday of this week I will be pleased to announce the launch of this foundation, and I want all honourable senators to know that the support from governments and the corporate community is such that we will be able to announce that over $1.2 million has been raised.

Hon. Senators: Hear, hear!.

Senator Carstairs: We must break the culture of silence that surrounds this issue in our schools, in our workplaces and in our society. It is not a thing to be ashamed of, to have been abused; it is a thing to be reckoned with. By breaking the silence, more of these cases will receive justice, and society can be more fully appreciative of the importance of tackling the matter more aggressively.

In speaking of my own sexual abuse, I am most gratified when a young man or a young woman who has been in the audience when I spoke of it has come up to me and said that by talking about it I have made them feel normal.

Honourable senators, we need to make the hurting stop.

Hon. Mira Spivak: Honourable senators, I cannot do anything but heartily applaud Senator Carstairs for initiating this inquiry. I do not intend to speak at length since hers was a full explanation.

I know that, as Manitobans, Senator Carstairs and I recognize the enormous need to draw attention to the systemic problems of family violence and violence against women in our own province and throughout the country. Every year some 5,000 Manitobans are charged with assaulting a family member. Those are cases that come to the attention of the police. There is every reason to believe that they are the tip of the iceberg.

Violence takes many forms, as we have heard: sexual abuse, neglect and severe verbal aggression. It is bad enough that almost one-third of all Canadian women will know physical or sexual violence at some point in their lives. When other forms of violence are factored in, our self-image as a non-violent nation is severely bruised.

Senator Carstairs spoke of a national survey which indicates that 40 per cent of our elderly living in their own homes or with relatives suffer abuse or neglect, and more than 225,000 Canadian children experience some form of abuse every year. The Native Women's Association of Canada says it is the exception, not the rule, to know of an aboriginal woman who has escaped family violence. These are horrendous figures, and these wake-up calls to adjust our assumptions of what really takes place in Canadian homes have been issued this decade.

Canadians began to tally the violence after an unforgettable tragedy nine years ago, and I refer of course to the slaughter of 14 young women at the École Polytechnique in Montreal on December 6, 1989. The National Day of Remembrance, and Action on Violence Against Women, ensures that the loss of these young lives and the loss endured by these families is indelibly imprinted on the Canadian conscience. I have spoken many times, as have other people here in the chamber, as we mark that tragedy every year; that sad event in Canada that will not be forgotten, and has motivated many people to action.

In its wake, violence prevention programs were launched in schools. The London Family Court Clinic placed manuals and videos in the hands of thousands of school boards several years ago. In its wake we have seen good gun control law. We have seen special training for doctors and judges. We have seen training for police who are summoned to domestic disturbances.

Still we see the statistics mount. I believe that tells us two things: First, obviously we do not yet have all the answers on violence prevention. Six years ago, the federal government created a network of research centres in Canada and, as Senator Carstairs mentioned, one of those five centres, RESOLVE, Research and Education for Solutions to Violence and Abuse, is in Manitoba. Last year its federal funding ran out. Two years ago, Senator Carstairs began looking for ways to secure the long-term survival of the research centre in Manitoba and to extend its work to the three prairie provinces. Through her efforts, and with the help of others, the Prairie Action Foundation was formed. Its goal is to raise $5 million over five years: $2 million for charities that work in the field, and $3 million to give RESOLVE stable funding. I cannot think of a more worthy endeavour that we should support.

As just one example of matters that research still needs to address, there were the findings of researchers at McMaster University that were broadcast on CBC radio. Their research involved assigning the students to find good examples of sensitivity training for police who respond to calls of domestic violence. The students found a contradiction between what police learned in their training and what they seemed to see when they went into homes. They seemed to see mutual combat. If police are rejecting the training they receive, researchers must determine why. They also must know how to offer training that will be helpful.

The second thing we should take away, after acknowledging that the tide of violence has not ebbed, is that there are probably no quick-fix solutions. Nine years have passed since Canadians were jump-started into action. We know that we are dealing with systemic problems passed down through generations. A generation or more of hard work will be needed to make a difference.

For that reason especially, I am pleased to take part just briefly in this inquiry. It is only through constant, steady reminders that we will keep sight of the need to prevent violence. It is only through repeated reminders such as this one that front-line workers and researchers will continue to get support, and it is only through their efforts to change values and teach non-violent ways to resolve conflicts that the sons and daughters of the generation who witnessed the Montreal massacre can have hope that it will never happen again.

I hope that this issue will be discussed very thoroughly here. The Senate has looked before at this issue but perhaps there are other ways of contemplating it in some depth and, again, I thank Senator Carstairs for raising this issue for us today.

Hon. Brenda M. Robertson: Honourable senators, in moving the adjournment of the debate, I should advise Senator Carstairs that I will be speaking to this inquiry during the first week that we are back after the break. If any other senators wish to speak to it in the interval, I will gladly cede the floor to them.

On motion of Senator Robertson, debate adjourned.



Motion to Congratulate the Government of Ontario on Recompensing Victims of Hepatitis C in Blood System-Debate Adjourned

Hon. John Lynch-Staunton(Leader of the Opposition), pursuant to notice of November 26, 1998, moved:

That the Senate congratulate the Government of Ontario for providing financial assistance to all those who contracted Hepatitis C, regardless of when the infection occurred.

He said: Honourable senators, the motion speaks for itself. It is consistent with the unanimous motion made here on June 18 requesting federal, provincial and territorial governments to devise a compensation program which would cover all victims who have incurred hepatitis C through tainted blood or tainted blood products, no matter when it happened.

The Government of Canada and most of the provinces agreed to a program of compensation limited to those who incurred hepatitis C between January 1986 and July 1990.

I tried to bring this matter back last month but a point of order was raised. Now, the subject matter can be discussed through this motion. Canada's largest province has found a way to compensate victims outside of the years for which the joint program has already been agreed. The Province of Quebec, shortly after Ontario made its announcement in May, said that it, too, would be devising a program along similar lines.

By congratulating the government, we are, as I say, being consistent with the stand we took in June. We are, at the same time, reaffirming that position. It is to be hoped that other governments will take notice and follow Ontario's example.

Honourable senators, I have no objection to the debate being adjourned but I will insist on a vote being taken before we adjourn for Christmas.

On motion of Senator Carstairs, debate adjourned.


Committee Authorized to Examine Estimates of Department of Fisheries and Oceans and Other Related Matters

Hon. Gerald J. Comeau, pursuant to notice of November 26, 1998, moved:

That the Standing Senate Committee on Fisheries be authorized to examine and report upon the Estimates of the Department of Fisheries and Oceans for the fiscal year ending March 31, 1998 (Parts I and II, tabled in the Senate on March 17, 1998; Report on Priorities and Planning and Departmental Performance Report, tabled in the Senate on November 3, 1998), and other matters relating to the fishing industry; and

That the Committee be empowered to permit coverage by electronic media of its public proceedings with the least possible disruption of its hearings.

Motion agreed to.


International Position in Communications

Transport and Communications Committee Authorized to Extend Date of Final Report

Hon. Lise Bacon, pursuant to notice of November 26, 1998, moved:

That, notwithstanding the Order of the Senate adopted on October 29, 1997, the Standing Senate Committee on Transport and Communications, which was authorized to examine and report upon Canada's international competitive position in communications generally, including a review of the economic, social and cultural importance of communications for Canada, be empowered to present its final report no later than March 31, 1999 and that the Committee retain all powers necessary to publicize the finding of the Committee contained in the final report until April 9, 1999.

Motion agreed to.


Transportation Safety and Security

Special Senate Committee Authorized to Hold In Camera Meetings

Hon. J. Michael Forrestall, pursuant to notice of November 26, 1998, moved:

That, notwithstanding rule 92 which requires that all Committee meetings are to be public, the Special Committee of the Senate on Transportation Safety and Security be empowered to hold occasional meetings in camera for the purpose of hearing witnesses and gathering specialized or sensitive information.

Motion agreed to.

Asia-Pacific Region

Report of Foreign Affairs Committee on Study-Inquiry-Debate Adjourned

Leave having been given to revert to Inquiries:

Hon. John B. Stewart rose pursuant to notice of earlier this day:

That he will draw the attention of the Senate to the eighth report of the Standing Senate Committee on Foreign Affairs entitled, "Crisis in Asia: Implications for the Region, Canada and the World."

He said: I want to thank honourable senators for allowing me to begin this inquiry this afternoon. I thought that by starting today, we could expedite our business on this item and thus make room for other items which I understand will be before the Senate before the Christmas adjournment.

I am not speaking now as chair of the committee. These are personal observations. The report speaks clearly for itself, but I want to call the attention of honourable senators to the report and to its importance. I thought perhaps the best way to do that, instead of leading the house chapter by chapter through the report, would be to say a few things on my own.

My first point is the importance to Canada of our trade with Japan. At page 45 of the report is a table showing the levels of Canadian merchandise exports to selected APEC markets. For almost 25 years, Japan has been Canada's second-largest trading partner. In fact, the value of Canada's 1996 exports to Japan was greater than the combined value of Canada's exports to its next seven largest trading partners in the region. It accounted for almost one-half of all our exports to Asia.

This trade has been very important. The size of our trade with Japan has been somewhat overshadowed by the great increase in the volume of our exports to the United States. Nevertheless, the exports to Japan have been of great value to Canadians.

There has been a downward turn in the Asian economy. The committee attempts at pages 57 through 63 to mention some of the consequences for Canada of that downturn. The consequences are not only Canada-wide but they are also specific to certain regions. British Columbia has been very hard hit by the turndown in economic activity in Japan and other parts of Asia.

Then, we see that there has been an impact upon Canadian agriculture. Perhaps it is not curious at all. Think of the pork industry which is seriously affected, from Alberta to Prince Edward Island, apparently.

One of my favourite examples takes place within view of my home in Nova Scotia and that is the bluefin tuna industry. The price has plummeted. This was an essential commodity for people in Japan, but they no longer seem to require it in such great quantities and at such high prices.


There are also indirect consequences. We are exporting goods to the United States that, in turn, are input for products which the United States exports to Asia. As that export from the United States goes down, so too do some of our exports to the United States.

I mention these because they are hitting us - Canadian farmers, people who work in the forests, people who work in the coal industry, the gas industry, you name it. Almost all are in one way or another being hit somewhat by what has been happening in Asia.

Having said that about trade to excite your interest, let me come to another point, and that is the influence of the Asian crisis on the Canadian dollar. The purchase price parity of the Canadian dollar vis-à-vis the U.S. dollar is approximately 82 cents. That is to say, if you take $82 U.S. and buy a basket of goods, that same basket could be bought in Canada for $100 Canadian. That is the spread in terms of price purchase parity.

However, look at the spread in what you must pay for a U.S. dollar in the currency markets. The Canadian dollar there is only worth 65 or 66 cents U.S. To a great extent, this is due to the fact that we are, and to an even greater extent are regarded as, a commodity exporter. It is also due to the flight to the U.S. dollar provoked by what has happened in Asia.

This issue has two sides. We can argue that, as a result of a relatively inexpensive Canadian dollar, our exports to the United States have remained high and that the low dollar has had an anti-inflationary affect. However, there may be another side to the coin. Because the Canadian dollar is cheap, our goods are cheap in markets such as the U.S. where we send over 80 per cent of our exports. Moreover, Canadian producers are not challenged to increase productivity in the way they would be if our dollar were somewhat higher.

Another thing that is happening - and we do not seem to be able to get good information on this - is that because the Canadian dollar is inexpensive, it is possible for nationals of countries with stronger currencies to come into Canada and buy up assets in various forms. You can argue that this is a phase of the market and that the Canadian dollar undoubtedly will go up and all that. However, in the meantime, valuable assets, be they shorefront properties or even factories, are being bought up by persons from other countries, and they will stay bought up even after the Canadian dollar has recovered. That is a permanent effect of what well may be argued is a temporary situation for the Canadian dollar.

I asked the Governor of the Bank of Canada about this issue on November 19 before the Standing Senate Committee on Banking, Trade and Commerce. He said that he could tell the volume of foreign currency coming into Canada but did not have statistics as to where that money was actually being invested. I think that is a consideration we ought not to ignore.

Honourable senators, you will notice that the report spends a great deal of time on the IMF. The IMF tends to attract a fair amount of criticism these days. Why was it that we were so surprised by what has happened in Asia? The Foreign Affairs Committee brought in an interim report in June of 1997, and we were smiling from cover to cover. Then, lo and behold, the dark clouds moved in. We were surprised.

When the Banking Committee was over in London last February I asked a banker why there was so much surprise and why had the IMF not given greater signals? He said, "Signals? There were lots of signals, but nobody paid much attention to them. Just take The Economist as an example." I did. When I got back, I had the titles of articles published in The Economist from March 9, 1996 to August 24, 1996 compiled. Let me give you a few of the titles. This is 1996, not 1997: "Japanese Banks, A Risky Game," May 18, 1996; "Japanese Banks Awful," August 31, 1996; "Japanese Banks, Good Money After Bad," November 9, 1996; "Japanese Banks Wobbly," and August 10, 1996, "South East Asian Economies, States of Denial."

Those are only a few of a total of 19 stories on the unhealthy state of affairs in Asia in The Economist in 1996. The truth of the matter is that we ought not to have been surprised. That banker in London told me that the market is not very concerned with the fundamentals. Your financial adviser says, "This is where all the smart money is going. Do you want to be an exception?" Of course the answer is "no," so fundamentals get pushed aside.

With regard to international trade, Adam Smith wrote that it was not a matter for domestic governments, it was a matter for providence. Well, I do not believe that the international money market is God's vicar.

Another point to which insufficient attention has been paid by many people is the security question. What are the implications of rapid, short-term capital flows for security? Just think of it. The money comes in. What happens? The domestic economy in Indonesia or wherever is boosted. It has had a strong intravenous injection. As a result, expectations are elevated among the people. Then something happens to draw the money out, and what is the result? There is economic deprivation, there is social unrest, and there may be intrastate and international strife.

I asked Mr. James Boutilier, when he was before the committee on May 6, 1998, about the causes of international strife. I mentioned some of the standard causes: empire building, imitating ancient Rome, for example, and two or three others. Then I mentioned domestic problems within one or more of the countries. I asked Mr. Boutilier, who is with the Canadian Armed Forces, which of these is most dangerous and where he thought an explosion in Asia might have its origins. Is it empire building in the old Roman manner, et cetera? He said, without any hesitation, that the great problem is domestic social and political unrest caused by economic difficulties.


When we talk about money going into these places following the guidance of the market, we should be very careful to take into account the implications for those societies of the sudden withdrawal of that money and the implications of that withdrawal on our own security, as well as the security of our neighbours. I do not think that we have done that adequately.

I now come to my last point.

We had testimony in the committee from Dr. Martin Rudner as to the problems in the Asian area. At the top of page 86 in the report he is quoted as follows:

In each of these cases, we have soft states. Economic and social development occurred at a very impressive rate in very impressive ways throughout Southeast and East Asia. What lagged behind was the state... The problem is one of state building.

I think he is right on. Often, we tend to say, "Adopt democracy and all your problems will disappear." Democracy has become a kind of panacea for all ills. I think this is misleading. It is very well and good to talk about the importance of liberty, liberty, liberty, but let us remember that liberty is often impossible without adequate authority. We see that every time we drive on a major highway. If there are no rules and no authority to enforce those rules, we will soon all be dead - singing about liberty, no doubt. My analogy carries over, I submit, into international politics.

What is needed is strong, good government - not weak, good government but strong, good government. I would refer to some Western European history, and specifically the situation that prevailed in France starting about 1775 or 1780. The French were in the midst of a fiscal crisis, the revenue far below the expenditures. Louis XVI was no despot and he tried, with good advisers, to deal with the prevailing fiscal crisis. However, the nobles - that is, the elite of the day - would have nothing to do with fiscal reform because it would mean they would be subject to higher taxes. They dug in and, for 10 years, the tussle continued. Eventually, seeing that he had to settle the financial crisis one way or another, he called a meeting of the Estates General which had not met since 1614. Lo and behold, the third estate said, "No. We are sick and tired of all this." One step after another led to the French Revolution and 25 years of war. The problem was not that Louis XVI was a strong despot; the problem was that he was not strong enough to deal with the second estate, the noble elite.

To a great extent, that is the problem in Asia. If stronger governments were in power in Asian countries, they would be able to regulate the major financial institutions, that is, the big banks and the big corporate enterprises. They would be able to resist the pressures of the Asian nobles of modern times. If those countries had strong governments, they would be able to enforce the rule of law.

It is all well and good to have the representatives of the governments of those countries sign declarations of human rights, and so on, but when they return to their homes they are simply too weak to enforce those declarations.

We mislead ourselves badly if we think that by muttering or chanting the word "democracy," we will solve these problems. We need stronger governments to do what is needed to put a sounder, stable base under the rule of law, under human rights, and under the regulation of financial institutions. Without that, we can preach all we like, but the situation will not improve.

I beg your indulgence, honourable senators, to revert for one moment to my role as chair of this committee. I would draw your attention to a paragraph at the end of the foreword wherein I record the committee's appreciation for the cooperation of the witnesses to whom we turned for assistance. We also mention our gratitude to the clerk of the committee, Mr. Pelletier, and to Josée Thérien, who formatted the text of our report. The expertise and dedication of Mr. Peter Berg, our chief researcher, facilitated our work greatly. In the early stages of our hearings we were fortunate to have the assistance of Mr. Anthony Chapman. Ms Colleen Hoey, an intern from the Norman Paterson School of International Affairs at Carleton University, did a lot of work on the regional security and human rights chapters of the report, for which work we are most grateful.

I am thankful for the cooperation of all committee members. It was a good experience and I hope that you will read the report carefully, honourable senators, and conclude that we did a fairly good job.

Hon. A. Raynell Andreychuk: Honourable senators, I should like to pose a question to the Honourable Senator Stewart.

The committee expressed the hope that this report would lead to a rousing debate which would afford us an opportunity to highlight some of the differences of opinion which were expressed as we prepared our report.

I agreed with Senator Stewart's analogy between the King of France and the leaders of several of the Asian-Pacific countries. However, I was unclear as to whether he was expressing the opinion that that king and those leaders were defenceless because the elites were so strong.

Would Senator Stewart not agree that in our analysis of the Asia-Pacific region, the evidence suggested that the strength of those leaders is not lacking? The problem is that they do not wish to put aside their self-interest. In other words, if they were to question the elites of the day, they might no longer be leaders. Therefore, they have not, in a timely fashion, dealt with certain issues which could have led to a better society for fear of losing their cronyism with the banks and their ability to further their financial positions and to continue to retain power.

Senator Stewart: Honourable senators, the Honourable Senator Andreychuk makes a good point. The analogy I drew to the French situation before the revolution may have been somewhat misleading. I say that because I do not think there is any question but that the King of France was trying to do the right thing and had some good advisers. He was not involved in cronyism, for example.

What Senator Andreychuk is implying by her question is: Do you not think that the situation in some of these Asian countries is actually worse than it was in France before the Revolution? My answer would have to be "Yes."

Hon. John G. Bryden: Honourable senators, would the Honourable Senator Stewart allow me to make a comment and ask a question?

Senator Stewart: Of course, honourable senator.

Senator Bryden: The comment and the question is apropos to the honourable senator's comments about the speculative investment of capital in foreign countries and then its withdrawal because a better opportunity presents itself somewhere else. I would also refer to the warnings that were cited in The Economist, to which no one paid any attention.


It brought to mind a quotation I would like to read from not the most recent issue of Maclean's magazine, but the one before that. It is entitled "The Rothschild file." Sir Evelyn de Rothschild was interviewed by Maclean's. Apropos what is happening in the banking industry as it relates to what Senator Stewart said, Mr. Rothschild said:

There are certainly good companies in the world and bankers should adjudicate them on their merits, give them credit and support them and cut out this speculation on highflyers. They shouldn't just, across the board, penalize people and say we're not going to lend any more because we've been bitten by loans that were not very good. They've got to go back to being proper bankers. You all realize why they did this lending: because their return on capital in their normal course of business wasn't good enough, so they got opportunistic and greedy...

Generally speaking, the return on capital of some banks has been diminishing. So they thought, well, let's go into this game of investment banking because it's much more remunerative than commercial lending. And then they discovered that they should get into derivatives, and then they discovered that they should go into hedge funds. But they didn't really understand some of the things they were in and their record isn't all that good.

We're in a completely new age of finance and none of us quite understands what's going to happen. The reason this has happened is because of electronics. The whole world has been turned upside down by electronics, certainly the financial world. Let me give you an example: the Cayman Islands. It has, I think, 400 banks and you get all these people offshore paying no taxes, getting lines of credit - billions of dollars - and speculating against some poor country. Is it responsible? How do you deal with it? Why can they do it? Because of electronic systems. These computer systems now are dealing in trillions and trillions of dollars. It's a gambling casino. Stock markets are becoming casinos. People are gambling on what will happen today and tomorrow.

Then he is asked the question:

Do there need to be more international regulations?

He states:

Absolutely, but no one knows how to do it...You can be clobbered by a 16-year-old in a garage moving $5 billion from one account to another. There is a changing world out there.

Senator Stewart, my question is: Is this not the type of warning coming from The Economist that was ignored in 1996, warnings that will probably be ignored as we debate bank mergers and where banks should be going?

Senator Stewart: Honourable senators, I sat on the Standing Senate Committee on Banking, Trade and Commerce to acquire a little elementary knowledge about that field. I learned very quickly that in Canada we pay great attention to the regulation of our financial institutions by the Office of the Superintendent of Financial Institutions. Even in Canada, we are still uneasy about the effectiveness of that regulation.

If in a relatively small and stable country such as Canada we have as great a concern for regulation, how much more should it be in the case of Thailand or Indonesia, where some of our institutions, mutual funds and the like, are putting our money? I think the answer is obvious. The problem is how to achieve a kind of international regulatory regime.

We have a chapter in our report entitled, "IMF Involvement in Asia: An institution in need of major reform or a stablizing force?" We discuss what might be done to improve the efficacy of the IMF. Their problem has two aspects, preventing the crisis in the first place; and, second, if the crisis does take place, what ought to be done in the way of remedial action?

I am not prepared to rely on the money market. I do not think that is the answer. It is true that it is very difficult to devise regulatory authority, particularly when dealing with sovereign states. If we are to continue to engage in this kind of financial activity, we must try to regulate capital flows much more effectively than we have in the past.

I realize that I did not deal with the merger question, but the Banking Committee has not yet reported on that.

Hon. Terry Stratton: Honourable senators, the honourable senator referred to The Economist and how accurate the magazine was in 1996 in talking about the problems in Japan. My bigger worry is that The Economist in the past year has been talking about the bubble economy in the United States. They have talked about that for quite some time. They are preaching or predicting gloom and doom, and should that occur, it will have a multiplier effect on what has already occurred in Asia.

I surely hope that the honourable senators is not forecasting or predicting that the bubble economy in the U.S. will carry through and fail. Nevertheless, has the honourable senator considered that aspect? Should that economy burst its bubble, as has been forecasted by The Economist for the last year, the multiplier effect or domino effect could lead to far greater unrest, civil and otherwise.

Senator Stewart: Honourable senators, I raised this very question with the Governor of the Bank of Canada on November 19 of this year. He was predicating much of his optimistic forecast with regard to Canada on continued prosperity in the United States.

I do not expect any central banker to speak bluntly on these questions. One of their first obligations is to be optimistic. Let me, however, refer to another source. The name may be familiar to the honourable senator. I will quote a sentence or two from Mr. Thomas d'Aquino speaking in Beijing on November 20, 1998. He stated:

The countries of the European Union, until recently seemingly in a state of denial about the impact of the Asian financial contagion, have now accepted that they are not immune. Growth prospects throughout Europe are being revised downward just as member governments nervously prepare for the introduction of the euro.

Then he goes on in the next paragraph, speaking, I think, directly to you, senator.

And what about the United States? Can the world count on the resilience of this economic superpower to hold global recession at bay? The United States has its own problems. Growth is slowing and so is corporate investment as earnings begin to weaken. More ominous, the household savings rate of Americans has entered negative territory for the first time in 60 years. Companies too are overextended...

One of the reasons for the negative rate of personal savings is the stock market. The hot money fled to the United States. Where does one park that money? Well, one parks it in good shares on Wall Street. Those shares go up. Some Americans feel very rich, and they are spending. Because they are rich on Wall Street, they think they are genuinely rich and they stop saving. The Economist argues that that bubble certainly will burst.

When I asked Governor Thiessen about that, he gave me the answer I expected. "No, I think The Economist is quite wrong," he said. We will see, honourable senators.

On motion of Senator Andreychuk, debate adjourned.

The Senate

The Hon. the Speaker: Honourable senators, before I call for the adjournment motion, I wish to remind you that tonight is the Christmas celebration for senators and staff. It will begin in the Railway Committee Room this year because of the problems we had last year in the foyer. Tables will be in the foyer, and there will be singing in the Speaker's chambers as usual. I hope to see all of you and all staff at 5:30 p.m.

The Senate adjourned until Wednesday, December 2, 1998, at 1:30 p.m.

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