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Debates of the Senate (Hansard)

1st Session, 36th Parliament,
Volume 137, Issue 146

Tuesday, June 8, 1999

The Honourable Gildas L. Molgat, Speaker

Visitors in the Gallery

ROUTINE PROCEEDINGS
ORDERS OF THE DAY

THE SENATE

Tuesday, June 8, 1999

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

Prayers.

Visitors in the Gallery

The Hon. the Speaker: Honourable senators, I should like to introduce to you a delegation in our centre gallery. It is a parliamentary delegation from Ireland, headed by Mr. Seamus Pattison, Speaker of the Irish House of Representatives. He is accompanied by a number of members of the House of Representatives, as well as by His Excellency Paul Dempsey, Ambassador of Ireland to Canada.

On behalf of all honourable senators, I wish you welcome to the Senate of Canada, and I wish you well on your visit to our country.

ROUTINE PROCEEDINGS

International Trade

Agreement Between Canada and the United States on Periodicals-Relevant Documents Tabled

On Tabling of Documents:

Hon. B. Alasdair Graham (Leader of the Government): Honourable senators, I have the honour to table, in both official languages, a copy of the signed agreement between Canada and the United States on periodicals, as well as a copy of the news release and the backgrounder.

Hon. Noël A. Kinsella (Deputy Leader of the Opposition): Good show! That gives us three hours to study it.

Business of the Senate

Adjournment

Hon. Sharon Carstairs (Deputy Leader of the Government): Honourable senators, before I make my motion, I want to indicate that we will also be sitting early on Thursday, at 1:30 p.m. This is due to the fact that we will be offering tributes to Senator Whelan on Thursday and, unfortunately, his sister has just died so he must leave early to attend her funeral. I will give notice regarding that matter tomorrow.

[Translation]

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, June 9, 1999. at 1:30 p.m.

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

Hon. Senators: Agreed.

Motion agreed to.

[English]

(1410)

Canada-Europe Parliamentary Association

Report on Council of Europe Preparatory Meetings at the European Bank for Reconstruction and Development Tabled

Hon. Lorna Milne: Honourable senators, I have the honour to table the report of the Canada-Europe Parliamentary Association which represented Canada at the Council of Europe Preparatory Meeting at the European Bank for Reconstruction and Development held on March 7 to 9, 1999, in London, England.

[Later]

Report of the Delegation on the Second Session of the Pariamentary Assembly of the Council of Europe Tabled

Hon. Lorna Milne: Honourable senators, pursuant to rule 23(6), I have the honour to table the report of the Canada-Europe Parliamentary Association delegation representing Canada at the Parliamentary Assembly of the Council of Europe, Second Session, held from April 26 to 30, 1999, in Strasbourg, France.

Banking, Trade and Commerce

Motion to Authorize Committee to Meet During Sitting of the Senate

Hon. Michael Kirby: Honourable senators, with leave I move:

That the Standing Senate Committee on Banking, Trade and Commerce have power to sit at 4 p.m. tomorrow, Wednesday, June 9, 1999, even though the Senate may then be sitting, and that rule 95(4) be suspended in relation thereto.

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

Hon. Senators: Agreed.

Motion agreed to.

Legal and Constitutional Affairs

Notice of Motion to Authorize Committee to Meet During Sitting of the Senate

Hon. Lorna Milne: Honourable senators, I give notice that on Thursday next, June 10, 1999, I will move:

That the Standing Senate Committee on Legal and Constitutional Affairs have power to sit while the Senate is sitting on Monday next, June 14, 1999, and that rule 95(4) be suspended in relation thereto.

Canada-Europe Parliamentary Association

Report of the Delegation on the Second Part of the 1999 Session of the Parliamentary Assembly of the Council of Europe-Notice of Inquiry

Hon. Lorna Milne: Honourable senators, I give the notice that on Thursday, June 10, 1999, I will call the attention of the Senate to the report of the Canada-Europe Parliamentary Association delegation to the second part of the 1999 session of the Parliamentary Assembly of the Council of Europe held April 26 to 30, 1999, in Strasbourg, France.

ORDERS OF THE DAY

Foreign Publishers Advertising Services Bill

Motion to Adopt Report of Committee- Motion in Amendment-Votes Deferred

On the Order:

Resuming debate on the motion of the Honourable Senator Carstairs, seconded by the Honourable Senator Callbeck, for the adoption of the twelfth report of the Standing Senate Committee on Transport and Communications (Bill C-55, respecting advertising services supplied by foreign periodical publishers, with amendments) presented in the Senate on May 31, 1999.

And on the motion in amendment of the Honourable Senator Kinsella, seconded by the Honourable Senator Lynch-Staunton, that the Report be not now adopted, but that it be referred back to the Standing Senate Committee on Transport and Communications to hear witnesses on the amendments proposed, as the amendments radically alter Bill C-55.

Hon. Mira Spivak: Honourable senators, in my view, Bill C-55 unamended was the correct response to the problem of keeping alive the Canadian magazine publishing industry. That view was supported during the course of our committee's deliberations not only by the magazine publishing industry, and until recently, by the Minister of Canadian Heritage, but by some prominent witnesses, including Mr. Gordon Ritchie, one of the negotiators of the Canada-U.S. Free Trade Agreement.

Mr. Ritchie, appearing before the Senate committee on April 22, summarized the situation neatly, as is his wont. Given the characteristics of the industry, he said, the fact that it sells advertising, not strictly magazines, that the editorial cost is up front, whether a publisher sells one copy or a million copies, that production costs are quite marginal, then if the Canadian market were an open one, the result would be that the market would be flooded with magazines directed at the bigger American market in terms of their content, including unadulterated American magazines and split-run magazines.

Since these magazines would offer themselves at marginal costs, in Mr. Ritchie's view - and at that time, a view shared by Senator Rompkey for one - that practice in economic terms would be dumping. In sum, he said a very good case could be made for Bill C-55.

The Minister of Canadian Heritage's choice of Bill C-55 was justified not only in her first appearance before the committee but in a letter to the Association of Canadian Advertisers on April 21, in which she states:

In the development of Bill C-55, the Government considered numerous possible approaches to address the potential impact of the entry of foreign publishers into the Canadian advertising services market. In the end, it was clear that the best solution was to address the issue at its heart by regulating foreign access to the advertising services market.

In speaking to alternative suggestions, in particular licensing arrangements between foreign and Canadian publishers, the minister wrote:

The goal of our cultural policy is to promote a distinctly Canadian magazine industry in which publications can respond to the interests of Canadian readers. An industry comprised solely of spin-offs of popular American magazines cannot accomplish this.

Referring to minimum Canadian content quota for all magazines as suggested by the advertisers, she wrote in that same letter:

The intent of our cultural policy is not to make all foreign magazines resemble Canadian magazines but to preserve a space for Canadian ideas alongside foreign ones.

In response to advertisers' suggestions that a direct subsidy to Canadian magazine publishers could be a trade-viable solution, the minister wrote:

If Canadians have fair access to Canadian advertising services revenues, they will be able to continue to produce quality Canadian content and would not require a government subsidy to do so.

Exactly. These are wonderful arguments supporting the original unamended version of Bill C-55.

By the way, Mr. Ritchie also stated in his testimony:

No amount of subsidy would make a magazine viable if you stripped out the advertising content.

I forgot to mention that Mr. Ritchie told us that he was also on the board of directors of Telemedia. Therefore, he knows something about the magazine industry.

Of course, the reason for amending Bill C-55 is fear, the fear of massive American retaliation and the fear that Bill C-55 would once again contravene World Trade Organization rules and Canada's international obligations. To go to the latter point first, the previous decision by the WTO on split-runs, as we heard over and over, did not bar Canada from protecting its cultural industries, nor from adopting alternative measures, but explicitly recognized Canada's right to do so.

The case for Bill C-55 not contravening either WTO or NAFTA rules can be summarized as follows. First, Americans did not pay for access to our advertising services market either under WTO or NAFTA. Second, Canada undertook no obligations with respect to advertising services under NAFTA. Third, under terms of NAFTA, the cultural exemption clause says that Canada may take up any measure to protect its cultural industries and, if these measures would otherwise offend against NAFTA, only then would the Americans have the right to seek authorization to retaliate with measures of equivalent commercial value.

In the opinion of expert witnesses, if the Americans do not have a right to access our advertising services market, they have no right of retaliation. Of course, under World Trade Organization rules, the U.S. must take the issue to the WTO. If those measures are found non-compliant and the WTO authorizes retaliation of what is determined to be commensurate value, then the U.S. would have the right of retaliation, but not of the magnitude threatened that would affect the lumber and steel industries. Of course, Canada's standing offer to take the issue ofBill C-55 to the WTO was not taken up by the Americans.

(1420)

With regard to the U.S. retaliatory measures, we were told by Mr. Ritchie that unless the U.S. took this whole issue through the prescribed process, as I have just mentioned, their action would be unilateral and illegal. Nor could the impact of the U.S. retaliation be remotely close to the $4-billion threat to lumber and steel that the U.S. has been talking about, but, rather, closer to the $400 million to $600 million of advertising sales in Canada, of which the split-run market represents about $150 million.

For those Canadians - and this includes all of us here, I am sure - who support Canada's basic policy goal now in force for over three decades which ensures that Canadians have substantial access to magazines that speak to them, it is a question of whether the recent amendments still enable us to meet that goal. The Canadian publishing industry - as indicated in press reports, since the majority on the committee refused to have publishers appear before the committee again - views these amendments with dismay.

"They are giving our lunch to the Americans, and they are preparing to give us welfare," says Jean Paré publisher of L'actualité. A "boot to the head for magazines," says the publisher of Outpost and The Traveller's Journal. François de Gaspé Beaubien of the Canadian Publishers Association believes this deal will put the magazine industry at serious risk by allowing U.S. magazines to scoop up an unacceptable percentage of the magazine advertising services market in Canada through unfairly discounted advertising pricings.

To take merely one example, by Heritage Canada's own calculations, each percentage point of access to split-run advertising in U.S. magazines is worth $30 million a year. Agreement to a ceiling of 18 per cent access, which is in the amended bill, means that the U.S. share of the Canadian advertising market could amount to $240 million more than the 10 per cent ceiling the department had originally said was the maximum the industry could afford.

Publishers say that 18 per cent of advertising space in a U.S. publication could represent the entire ad space in a competing Canadian magazine. There will be losses, it is recognized, particularly in Canadian publications focusing on women, news, and niches such as nature and outdoor activities. Women's magazines, the publishing industry says, are particularly vulnerable. Thirteen U.S. magazines sell a total of 19,000 pages of ads. Eighteen per cent of that total, which will now be open for purchase by Canadian advertisers in Canadian editions, would equal 3,400 pages, but the seven major Canadian women's publications sell only 4,800 pages, so 3,400 pages would be 63 per cent of the women's magazine market - very far from 18 per cent.

These calculations assume that U.S. publications would take all of the Canadian advertising directly away from Canadian publications. This would be easy for them to do because the U.S. publications would already have covered their costs by the time they produce a Canadian edition and could easily afford to slash their ad rates to attract Canadian customers.

Government officials, according to press reports, say they expect the magazine industry to lose out on a maximum of $98 million in annual revenues, a figure being used to calculate the amount of compensation the industry could need in response to these measures.

The Canadian Publishers Association estimates that the magazine industry could lose up to one-half of its advertising revenue simply because 18 per cent could represent the majority of Canadian advertising dollars currently spent in a Canadian magazine. In a recent, gleeful editorial, The Globe and Mail thought it could be as high as 70 per cent, calling it "effectively unlimited access." If so, allowing foreign split-run magazines almost free rein in Canada is not simply a Trojan horse to the magazine industry, as some have said; it is a Mack truck driven through.

Provisions in the present bill go beyond the initial debate about advertising in American split-run editions. For the first time, foreigners will be allowed to establish new magazines in Canada with substantial Canadian content and be treated equally under the tax law. The scope of foreign control of Canadian magazines is also greatly increased, and some form of compensation for all this will be established by the federal government. Some Canadian publishers now feel that all limits on foreign ownership should be removed so that their struggling magazines can have a chance to be sold.

Is this a win for cultural sovereignty? Is this a bold new era with Hearst Publications gearing up to give us Good Housekeeping/Bon Ménage and Cosmopolitan Eh? to compete with other Canadian/foreign spin-offs from Time Warner, People, Sports Illustrated, et cetera? Of course, we already have all these magazines, but now they will have Canadian advertising. Should we be surprised if the Americans return for more concessions in the future or extend their attack to other cultural sectors or, God forbid, banks, particularly with Canada's two national newspapers blissfully calling for bringing down the other "outmoded sectoral barriers in other areas of publishing, broadcasting, financial services, et cetera"? How about the cultural exemption clause which now only works if we are prepared to withstand massive retaliation - bullying, intimidation, threats - which pits different sectors of the economy against each other?

How will Canadian writers fare since, as we heard from June Callwood, most of them depend on magazine work to support them in their entire writing career? It is a vital part of their bread and butter which enables them to write wonderful novels.

In my view, the Minister of Canadian Heritage is an ardent nationalist and a tireless fighter in defence of Canadian values in the face of continuous pressure from a powerful neighbour. I am a great admirer of hers. However, calling a negotiated deal a win because the U.S. has recognized content requirements in a cultural field cannot hide the fact that Bill C-55 now renders the cultural exemption in NAFTA an empty vessel, leaves the magazine industry in mortal peril, and bodes ill for the future of Canadian cultural sovereignty. If this is what it takes to avoid a trade war, it is a heavy price to pay.

Donald MacDonald, one of the fathers of the Free Trade Agreement, was reported recently in the The Globe and Mail as having said that Canada should be protectionist when it comes to culture. "We've got to stand up for our country at some point on matters like this," he said, referring to Bill C-55. Honourable senators, George Grant's Lament for a Nation, prophetic years ago, has never been more apt than right now.

Hon. Fernand Roberge: Honourable senators, I rise this afternoon to take part in the debate on Bill C-55. The progression of this bill through Parliament has to be among the most confusing in recent history.

[Translation]

Today we have to examine the amendments that will make radical changes to this bill. This is an awkward situation for the Senate, but all the more so for the other House, which has sent us this bill in good faith. Something that is not easy for us, honourable senators, must be really difficult and complicated for the members of the other place. This bill, with the exception of one retroactive clause, affects only a few periodicals. It completely bans Canadian advertising in American publications destined for the Canadian market.

[English]

Through these amendments we have a bill that permits the carriage of this advertising at certain percentages without any requirement for Canadian content. In addition, any costs or losses to the Canadian magazine industry because of the Liberals' decision will be picked up by the people of Canada, in the form of either tax credits or direct subsidies. This bill permits that which was once prohibited, and requires the people of Canada to pay the costs associated with this reversal of government policy.

[Translation]

How much is it going to cost the Canadian taxpayers to enable the Chrétien government to save Ms Copps?

[English]

(1430)

Need I remind honourable senators of the cause of the by-election occasioned by the Minister of Heritage when the government had to concede that the GST was a program that they both supported and desired to keep in place, or the $28 million spent to settle the trade dispute with Ethyl Petroleum when the same minister, then as Minister of the Environment, prohibited trade in the fuel additive MMT?

[Translation]

The Chrétien government inherited trade relations with the United States and Mexico based on the free trade agreement with the United States and NAFTA, two agreements that the current government supports with enthusiasm. Unfortunately, this government does not know how to manage these agreements nor the trade disputes arising from them.

Its lack of knowledge in this area has cost Canadians dearly and will no doubt cost millions more if this bill is passed. It is difficult to analyse the substance of the amendments, because the committee was not able to call witnesses.

[English]

From a personal point of view, I was never totally convinced that we needed Bill C-55 in the first place, given the lack of interest of the American magazine industry in pursuing split-run editions and the new high-tech methods of gaining access to information through the Internet and other sources. I find it hard to believe that Bill C-55, even in its original form, would offer much protection to the Canadian magazine industry.

[Translation]

I read with interest the article in The Globe and Mail yesterday, which noted the popularity of Quebec magazines and the conclusion of the Patterson report, which was to the effect that the Quebec magazine industry and business magazines would not or would only barely be affected.

[English]

Other Canadian magazines may be forced to become more competitive. My view was that if the influx of split-run magazines became a problem, then the government should deal with the issue, but certainly not in the manner which is in front of us now. We have a situation where the government has reversed itself, allowed itself to cave in to the threats of trade retaliation, and put in place a regime which allows American access to Canadian advertising dollars. This, as far as I am concerned, represents the worst possible solution.

However, again, we have no evidence of the reaction of the advertisers, the publishers, and the legal experts as to whether this is a workable arrangement. We also know, given the timetable of the members in the other place, that they will not be able to hold hearings on this bill.

What are we to conclude? We can conclude that the Chrétien government is afraid of a public debate before Parliament on its new arrangement, and we can conclude that the Liberal government has introduced amendments to completely reverse the impact of the bill based on a treaty that we have never seen. Above all, we can conclude that the government does not know how to deal with international trade issues.

[Translation]

Hon. Jean-Claude Rivest: Honourable senators, we know that Minister Sheila Copps joined, internationally, with many countries in the European Economic community and specifically with Quebec, which, in cultural terms, defended to the end, in the context of international agreements, what was known as cultural exception. I was informed yesterday of the fact that, in Europe and singularly in Quebec, in all cultural communities, there was concern that the Government of Canada had given into American pressure in this area.

These communities still wonder about the consequences of this agreement for other cultural areas, about which Canada continues to say, even after this agreement, it wants to join with European countries defending the cultural exception against the American invasion. In particular, the Government of Canada had shown solidarity with Quebec cultural communities and the Government of Quebec in order to defend internationally Canada and Quebec's cultural specificities.

And now the Government of Canada, without advising anyone in Quebec or elsewhere in Canadian cultural communities and in particular its Common Market partners, gave into American pressure. Did the Government of Canada carefully measure the scope of this agreement it concluded with the U.S. government?

[English]

Hon. John Lynch-Staunton (Leader of the Opposition): Honourable senators, Bill C-55 with amendments is simply unacceptable, as it represents a callous abandonment of a periodicals policy which had its beginnings nearly 40 years ago and has been reconfirmed in one form or another by every government since - every government, that is, but the present one, which caved in to threats of trade sanctions, and illegal ones at that, according to government members and supporters.

Others have spoken here and elsewhere of recent events surrounding Bill C-55, particularly the government amendments. Their condemnation has been nearly unanimous, so I do not intend to dwell at length on this particular aspect of the debate. Another aspect of this bill merits greater attention than it has received, and that is how Parliament was used as a bargaining chip in the negotiations with the United States.

According to the transcript of the background briefing by American trade officials on May 26, discussions on the issue of Bill C-55 began in July 1998, as, to quote from the transcript of the background briefing:

...rumours of a spending submission to the Parliament surfaced.

The bill was given first reading in the House of Commons on October 8, when talks with the Americans were still going on and no doubt intensifying. Only the most naive had to believe that the bill would receive Royal Assent in its original form. Yet, the Minister of Canadian Heritage, wrapping herself in the flag, mused about how essential it was for Canadians to read stories by Canadians about Canadians. The fact that the official definition of "Canadian content" is completely foreign to her definition is of no significance. Bill C-55, she assured us, would take care of everything.

The House sent the bill to the Senate on March 16, and at second reading two days later, the Leader of the Government in the Senate insisted that there were no amendments planned, and none intended. Senator Bolduc asked if the government would resist pressures by Canadian industries threatened by illegal trade retaliations, whether the government would resist those pressures to abandon Bill C-55.

Senator Bolduc asked:

Is that the government's decision?

Senator Graham replied:

Honourable senators, I said no matter what pressures are applied. Is the opposition not listening?

He was asked:

The government will not give in?

Senator Graham replied:

I am the sponsor of the bill and, as far as I am concerned, the bill stands as it is.

Later in the same debate, the Leader of the Government said:

We see no reason why our American friends would not be happy with this legislation.

The charade continued before the Standing Senate Committee on Transport and Communications.

April 13, Minister of Canadian Heritage:

I am looking for quick and speedy passage of this bill, senator.

May 11, Minister of Canadian Heritage:

This is why I can assure you this morning that Bill C-55 is still the best proposal that we have for our Canadian magazines.

May 25, Minister for International Trade:

Let there be no doubt - this government stands behind Bill C-55 and we are determined to see it pass into law.

At every opportunity, opposition committee members, encouraged by the ministers' adamant support of Bill C-55, urged immediate clause-by-clause study of it, and each time the Liberal majority refused. Obviously, negotiations between the United States and Canadian officials were nearing a conclusion and the government was stalling progress of the bill in anticipation of the agreement.

This is what I mean when I maintain that Parliament - both Houses - was used as a bargaining chip, one ironically which in the end was never used as, to complete the metaphor, Canada threw in its hand and capitulated with the result now before us. Parliament was never let in on the progress of the discussions, even as it was debating proposed legislation which was the subject to those discussions. Such disdain for Parliament's role is but another manifestation of the government's complete lack of respect for it.

There is more, honourable senators. When the Minister of International Trade appeared before the committee on May 25, he said that an agreement had yet to be reached, but he expected one shortly. In fact, according to the Americans, and I quote again from the transcript:

...we finally reached agreement Monday during the holiday in Canada...

- which is the day before the minister's appearance. Perhaps the minister did not know, as a final agreement was decided through the intervention of the Prime Minister's office and our ambassador to the United States. Perhaps the minister did find out at the same time as the rest of us, the evening of his appearance. If so, it will certainly not be the first time that this Prime Minister's office has undermined and overruled a minister, another sad indication that the lack of respect for elected representatives excludes no one.

(1440)

Cabinet and caucus consensus has been abandoned. Power is well ensconced in the Langevin Block, while the role of the other place in the Centre Block is limited to providing a Canadian equivalent to the Jerry Springer Show called "Question Period."

While some members of the House of Commons get their jollies by heaping abuse on the Senate, their time would be better spent in reviewing how they have allowed the importance of their House to become as irrelevant as it is, and how insignificant has become their role in it.

Some Hon. Senators: Hear, hear!

Senator Lynch-Staunton: Senate reform certainly, but not without House of Commons reform at the same time!

Some Hon. Senators: Hear, hear!

Senator Lynch-Staunton: For without overall reform, Canadians' respect for its parliamentary institutions will continue to diminish and the entire parliamentary process will suffer even more as a result.

In my opening remarks, I indicated support for what Bill C-55 was intended to achieve, something which has been abandoned with the government amendments. That is not to say that this proposed legislation is not without weaknesses, some quite serious.

The government's imposition of time allocation, done to meet elected members' holiday travel plans, for it has yet to show any other reason for passage without significant debate in the other place, makes it useless to propose amendments as both time and votes are lacking to support them.

I will, however, give a brief summary on how Bill C-55 could have been improved before the government's amendments, while safeguarding the principle of the bill, no matter whose definition of principle one uses, including the Speaker's.

First, senior counsel to Canadian Heritage has confirmed that a conviction under Bill C-55 would constitute a criminal record. For the government to maintain that an advertisement sold illegally is a crime against society is perverse, to say the least. Such a provision should be removed from the bill.

Second, clause 15 of the bill says in part that:

...a foreign publisher who commits an act outside Canada that, if committed in Canada, would be an offence...is deemed to commit that act in Canada.

To say that this smacks of Helms-Burton is not an exaggeration. Canada objects strongly to the Helms-Burton act, as it imposes severe penalties on foreigners doing business in a foreign country, namely, Cuba. "What right do the Americans have in extending their law into a foreign jurisdiction?" Canada has asked repeatedly. Yet, in Bill C-55, this is exactly what the government is asking Parliament to do.

According to the Library of Parliament, to which I am most grateful for its excellent research on this matter, there is Canadian legislation which includes a provision that an act committed outside of Canada is deemed to have been committed in Canada. Let me quote the library:

...the vast majority of such provisions are found in the Criminal Code and deal with particularly odious offences which would be referred to as crimes against humanity, or with jurisdictional situations in which the "deeming" provision is required to allow for the prosecution of crimes which have an international flavour.

I believe that I am on safe ground in saying that the deeming provision has never been used in trade legislation and has no place in it. It should be removed from Bill C-55.

Third, the actual application of this bill rests not so much on the bill itself as on the regulations flowing from it. This is but another example of where Parliament is asked to pass a bill which is in the form of a statement of intent while those parts dealing with how it will be implemented will be written by unelected officials who may not always carry out the intent of Parliament. The least one should expect is that the regulations be tabled before coming into effect so that either or both Houses have a chance to examine and report upon them, if so inclined.

Finally, clause 22 states:

This Act comes into force on a day to be fixed by order of the Governor in Council.

This was introduced as a last-minute amendment at third reading in the House of Commons, as a not too subtle signal to the Americans that whatever happens in Parliament, the bill will become law when the government so chooses after a deal has been made, whatever Parliament's inclinations.

This sort of provision appears in other bills and again reflects a government's desire to arrogate to itself responsibilities that properly belong to Parliament. I would amend the clause to read:

...comes into force on a day to be fixed by Order of the Governor in Council, but no later than 60 calendar days after it has been given Royal Assent.

After reading the letters exchanged between the United States' representative and Canada's ambassador to the United States - and I thank Senator Kinsella for having found them for us in time rather than three hours before the vote, as the government leader did - I can understand why the government preferred not to discuss their content during committee hearings. This agreement is not in Canada's favour on at least three counts.

First, either party can at any time withdraw from the agreement, which then becomes null and void 90 days after such notification. To quote the agreement:

...the parties' respective rights and obligations will return to those that existed immediately prior to the entry into force of this agreement.

The agreement went into force on June 3. Bill C-55 has yet to be passed by Parliament. Therefore, this can be interpreted to mean that should the United States withdraw, it will no longer be subjected to Bill C-55, as Parliament will have decided it after the agreement went into effect. In other words, which has paramountcy, an agreement between two governments, or the law of the land? This is an issue we should have settled in committee before being asked to give approval to amendments which arise out of this agreement over which there is a great deal of controversy, which will increase as time goes on in terms of its interpretation.

Second, there is a fundamental disagreement between the two parties on the definition of "net benefit" pursuant to the Investment Canada Act. Canada insists that there be a "majority" of original editorial content to qualify. The United States claim that "substantial" is the operative word. There is no dispute on defining the word "majority," but what does "substantial" mean? It does not mean majority, on that we can agree.

Third, the United States' trade representative, in her letter to the Canadian ambassador, writes that in regard to Bill C-55:

...the United States will take no action under the World Trade Organization (WTO) agreements and the North American Free Trade Agreement (NAFTA)...

Under NAFTA, individuals and corporations have a right to file claims against a signatory as allowed in chapter 11 of the NAFTA. Am I right in saying that this right is maintained?

Not in the agreement, but flowing from it as a sop to the Minister of Canadian Heritage is the announcement by the Prime Minister that authority for review and approval of investments related to all cultural industries are transferred to the Minister of Canadian Heritage. Section 3 of the Investment Canada Act is quite clear that the Governor in Council designates only one minister for purposes of this act. The pertinent words are:

Minister means such member of the Queen's Privy Council as is designated by the Governor in Council as the Minister for the purposes of this act.

Other than being bad policy - meaning having more than one minister interpreting separately the same act to satisfy conflicting goals - I suggest that there is nothing in the regulation-making process of the act, which is section 35, which empowers a designation of more than one minister with authority for review and approval. To do so, other than by amendment, I suggest, would be ultra vires to the act.

As for public policy, how can a proper decision be taken when the review is done by two ministers separately on a company that is involved in both cultural and non-cultural activities? Just think of the chaos that would result from that.

In its indecent haste to get Bill C-55 through Parliament, no time is being allowed to examine this and other key concerns. This process reminds me too much, as it has reminded Senator Roberge, of the MMT debate. The government ignored warnings that the bill was in violation of the interprovincial trade agreement, which it was subsequently declared to be, ignored the advice of its own officials to satisfy a key industry employing thousands of people on the eve of the last election, and it eventually cost them and all of us $20 million.

What cost is attached to Bill C-55? In an attempt to mollify a furious Canadian magazine publishing industry, once the most enthusiastic Bill C-55 supporter, the Minister of Canadian Heritage has announced the creation of a magazine fund. During second reading in the house, last October, the minister pointed out that the bill contained neither taxes nor subsidies.

(1450)

On that point at least she is consistent, as the amendments themselves make no reference to a magazine fund. Nonetheless, the fund must be part of the debate, as it results from the government generously opening up a market, until now reserved exclusively for Canadians, and admitting that the resulting costs will be such that those affected will be compensated through government assistance.

Tax relief to Canadian domestic industry, whatever form it takes, is justified as a means to allow industry to better meet foreign competition. The magazine fund is being established to compensate a Canadian industry to meet a foreign competition which is being created by government. Can anything be more ludicrous, even scandalous? Is this to be Canada's new investment policy: Let foreign competition enter where it has never been allowed before, and use taxes to make up whatever financial losses to Canadians ensue? No wonder the government ignores calls to disclose how the magazine fund will be established, how it will be funded, who will qualify and, in particular, how much it is expected to cost in its first five years. I suspect that the government simply does not know and, perhaps, does not even wish to know.

As the Canadian magazine industry has been unusually quiet since the fund was announced, no doubt drooling over unexpected financial guarantees, why should the government not remain silent also? Certainly, in its view, Parliament's asking questions, especially relating to tax dollars, is simply impertinent. Adjournment of the house this week is its number one priority, and debate on bills is scheduled to meet this target.

The Senate's ability to have key issues raised and properly debated having been thwarted through the imposition of time allocation, I can only hope that there will be enough members in the other place - where this debate should have been initiated in any event - to raise them with the cabinet ministers directly concerned, including the Prime Minister. To let the bill go through with so many key questions unanswered, with so many varying interpretations of it and with its many flaws - not to mention the letters of agreement which the government has yet to explain, with one government claiming "substantial" as a key word, while the other claims "majority" - is simply asking for trouble in the long run.

This is not the way to handle legislation: Pass it blindly, worry about the fallout later. I would have thought that one MMT scandal would have been one too many. Now I fear we are being taken down the same road, and the ramifications may well be more devastating than those arising from the MMT fiasco.

I wish to end by reading a letter sent to the Prime Minister by Greg MacNeil, President and CEO of Multi-Vision Publishing Inc., a letter which, to my mind, better than anything I have read from a member of the magazine industry, expresses the dismay felt by the industry and the anxieties that have been created by the thought that Bill C-55, with amendments, may become law. To borrow from Senator Spivak, this letter is, indeed, another lament for a nation. The letter is dated May 27, 1999.

Dear Prime Minister:

Thank you for all the time and effort that has been invested on Bill C-55 and its related issues. In addition to all that you have already considered, I wanted to add a personal perspective.

Approximately four and a half years ago I left one of the best jobs in the Canadian publishing industry to start a new magazine company. Today we employ forty people directly and scores of others on a freelance basis. We publish several consumer magazines, including Elm Street and Owl Canadian Family, with total revenues of nearly $14 million.

Although we have published the above titles for only three years, we have invested millions of dollars in creating what are generally considered to be the highest quality magazines in their respective categories.

We would not have created our company or launched our magazines without the Canadian government's consistent and long-standing assurance that Canadian culture would be protected. While I can appreciate the political challenges of dealing with such a powerful neighbour as the United States, the elimination of a substantial Canadian content requirement followed by an advertising de minimis of twelve, fifteen and eighteen per cent can be viewed as nothing less, with all due respect, than a complete sell-out to American bully tactics.

I recently saw a television documentary about the Bismark. After its rudders had been irreparably damaged by a torpedo, sailors on the Bismark had to wait out the night for the impending battle at dawn. According to the few survivors, they all knew their fate.

Unfortunately, so do we. While we will fight with vigour until the end, it is disappointing beyond belief that we must fight a war that our government promised we would not have to fight and with an adversary that our own government is afraid to engage.

It is the first day of my life that I have been embarrassed to be a Canadian. And now, we will wait out the night.

Hon. B. Alasdair Graham (Leader of the Government): Honourable senators, a little over two months ago I rose in this chamber to sponsor Bill C-55, a bill to ensure that Canadian magazines, their writers, their editors, their photographers, to name but a few, can continue to tell us about Canada and about Canadians. However, when I spoke, we were all well aware that a dark shadow lay over the legislation. The United States, our most important trading partner, with $1.5 billion in trade crossing our borders every day, was threatening to launch a trade war if we proceeded with this bill.

The Americans threatened to target four important sectors of our economy that annually export primarily to the United States between $4 billion and $5 billion worth of products. Trade action against steel, lumber, plastics and apparel would have had a chilling effect on new export contracts and investments across Canada. In other words, the consequences of the United States' proposed actions were very serious.

At the same time, the issues at stake in Bill C-55 were also very serious. The United States has never really understood our concern about safeguarding Canadian culture. To them, culture is just another industry, and a big one at that. To us, it is a great deal more. Culture is about preserving our unique way of looking at the world in the face of a tidal wave of information from our giant neighbour to the south. We know that our opinions and ideas can hold their own on their merits, but first they must be heard. That is what Bill C-55 is all about.

Honourable senators, as amended by our committee, Bill C-55 helps us achieve two very important objectives: We have succeeded in averting a trade war, and we did so while preserving our ability to ensure that Canadian stories will be told well into the future. We have also crossed an important threshold in our trade relationship with the United States.

For the first time, the United States has accepted, in writing, that a government can use its laws to protect culture. They have accepted that we can control our advertising services market for purposes of cultural policy. They have accepted that we have a right to control new investment in the magazine publishing sector using a "net benefit to Canada" test. They have accepted that Canadian content is a legitimate part of this net benefit criterion. They have accepted that the Income Tax Act can continue to use the concept of Canadian content as a legitimate means of determining advertising deductibility.

These are important and historic steps, honourable senators. For the first time, the United States has recognized that the protection and promotion of Canadian content is a legitimate Canadian objective in our bilateral dealings.

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Concerns were raised during the second reading debate on Bill C-55 as to whether this bill, like other mechanisms used to restrict the access of split-run magazines to Canada, would be challenged by the United States. We can now assure this chamber that, under the terms of the agreement reached with the United States, Bill C-55 is secure from their challenge. The United States has given the Government of Canada written assurance that it will not take any trade action - either under the World Trade Organization trade agreements, NAFTA, or section 301 of the United States Trade Act - against the passage of Bill C-55.

Let me be perfectly clear, honourable senators, in saying that the government is convinced that what was agreed to is a good deal for Canadians and good for the future of Canadian culture.

During our second reading debate, Senator Spivak asked me about allegations that "Time Warner is not content with 98 per cent of the market; they want 100 per cent of the market. They are exercising their influence." Honourable senators, I am pleased to be able to report that they did not succeed in their efforts. American trade officials were indeed demanding unfettered access to Canadian advertising in magazines. They did not get that. Instead, the Government of Canada agreed to permit two controlled and limited forms of access to advertising services directed at the Canadian market.

First, there will be a de minimis exemption to the general prohibition in Bill C-55 which will allow up to 12 per cent of advertising in any American magazine to be directed at the Canadian market for the first 18 months after the act comes into force. For the next 18 months this will be raised to 15 per cent, and thereafter this will be raised to its final, maximum level of 18 per cent.

There will also be an exemption that will allow foreign publishers to have access to a greater percentage of the Canadian advertising services market, if they invest in Canada and if they create new businesses and produce a majority Canadian content publication. Acquisitions of Canadian magazines will, as in the past, not be permitted.

In order to allow the Canadian magazine publishers to adjust to the de minimis exemption, the Prime Minister has asked the Minister of Canadian Heritage to consult with the industry and recommend the best approach for a multimillion-dollar Canadian Magazine Fund. Those consultations are still taking place.

Did we get everything we wanted in these negotiations relations, honourable senators? The answer is no. It is no secret that we would have preferred a lower de minimis exemption, but the Americans wanted 100 per cent access. Ultimately, we agreed on a phased-in limit from 12 per cent to 18 per cent.

Senator Lynch-Staunton: You lost one nothing instead of ten nothing.

Senator Graham: I believe that, viewed as a whole, the agreement is balanced. It recognizes, finally, that there is nothing inconsistent or incompatible between a strong, open trade policy and an equally strong promotion of national culture. Not only did we achieve that recognition, we did so while simultaneously averting what could have been a crippling trade war.

Though Senator Poulin has already described the effect of the amendments being proposed to Bill C-55, I wish to take this opportunity to review them once again so that there is no misunderstanding about what is being done.

The first set of amendments adjusts the ownership requirements in clause 2 of the bill. With these changes, magazines with a majority Canadian ownership or a majority Canadian membership in the nature of directors and similar officers will be considered Canadian and therefore not subject to the proposed provisions of Bill C-55. Previously, 75 per cent of Canadian membership or ownership was required to escape the application of the legislation.

This change in definition of what constitutes a Canadian publisher makes it consistent with what is already in the Investment Canada Act. By lowering the threshold, the change should also attract foreign investment. It will lower the ownership constraints imposed on foreign interests wanting to invest in the Canadian magazine industry.

By any measure, this is a reasonable change. Traditionally when we have attempted to determine whether an entity was foreign controlled or foreign owned, the test or measurement was 50 per cent plus one. Hence, this change is consistent with the approach that we have taken in the past with other sectors of the economy. As I have said, it matches what is already contained in the Investment Canada Act.

The second amendment proposed a change to clause 20 of the bill. It really builds on the third amendment, which is the de minimis provision of 12 per cent, 15 per cent and 18 per cent, with which we are perhaps the most familiar. We know initially that a foreign publisher will be allowed up to 12 per cent of Canadian advertising, measured as a percentage of the total revenues of the magazine. This second amendment gives cabinet the power to make regulations to accurately determine the percentage of total revenues derived from advertisements directed at the Canadian market.

The method of measuring the percentage of revenues obtained from advertisements directed at the Canadian market was somewhat clarified in the recent exchange of letters between Canadian Ambassador Raymond Chrétien and U.S. Trade Representative Charlene Barshefsky. Both letters contained the following sentence:

The percentage of advertising space containing advertisements directed primarily at the Canadian market in the Canadian issue of the periodical will be deemed to represent the same percentage of advertising revenues earned in Canada by that issue of the periodical.

The rule of thumb, honourable senators, is to calculate the volume of all advertisements in the magazine and compare that to the percentages that are basically Canadian advertisements directed at the Canadian market. That percentage will be deemed to equal the percentage of total revenues that the U.S. publisher is receiving from those advertisements.

The third amendment is the de minimis exemption, which I have already mentioned and which for many is a key modification to this legislation.

(1510)

Without going into details on this provision, which are already very well known, I wish to remind honourable senators that without Bill C-55, foreign publishers could include in their publications unlimited Canadian ads and they could do so without having to produce a single line of Canadian content.

As we consider this legislation, we should keep in mind the stark reality of the alternative if it does not pass into law.

The fourth amendment incorporates into Bill C-55 an exemption clause allowing foreign investors complete access to the Canadian advertising market if they receive approval under the Investment Canada Act to establish and publish a magazine in Canada. Approval will only be obtained if it is determined that the investment offers a "net benefit" to Canada. What constitutes a "net benefit" is spelled out in some detail in a policy statement released late last week by the Department of Heritage. It is also the subject of discussion in the exchange of letters I have already referred to.

In her letter, U.S. Trade Representative Charlene Barshefsky acknowledges that, when reviewing an investment for "net benefit," there should be "a substantial level of original editorial content for the Canadian market contained in each title," and that the decision will also depend on undertakings by the foreign investor "to expand or establish a place of business in Canada" which would, in her words, "create an employment infrastructure by directly employing an editorial staff and support staff composed of people resident in Canada."

Net benefit could also include, according to Ms Barshefsky, support of the "infrastructure in the publishing sector by having their titles edited, typeset and printed in Canada." As a result of this change, the only way that a foreign publisher will be able to sell more than 18 per cent advertising aimed at the Canadian market is if it invests and creates a new business here, hires Canadians and produces magazines with substantial Canadian content.

The Government of Canada, in its policy paper, has already made it very clear that substantial Canadian content means majority Canadian content.

These are the amendments being made to Bill C-55 as a result of the agreement reached between Canada and the United States. The agreement was an honourable and positive conclusion to a very difficult problem. It has been seen as such by a great many people. In addition to numerous supportive newspaper editorials, there was a statement from Ron Atkey which I want to draw to the attention of my colleagues. Mr. Atkey, as many Senate colleagues would know, is a former Conservative cabinet minister and is now a lawyer with Osler, Hoskin & Harcourt specializing in international business transactions and international law Mr. Atkey states, as quoted in The Globe and Mail of May 27, 1999:

This is a significant achievement. The U.S. has never agreed in any cultural field to any new content requirements. It sets a precedent.

So let us take, honourable senators, some satisfaction in what we have accomplished instead of complaining that we did not achieve absolutely everything that we set out to do. The fact of the matter is the less-than-perfect Bill C-55, as amended, is legislation that is deserving of our support.

During the second reading debate, honourable colleagues opposite asked me to state clearly for the record the principle of Bill C-55. They wanted to know what was off the table in the discussions with the Americans. In response, I said:

The principles enunciated in this bill are to preserve Canadian culture and to give Canadian magazines, their writers and their editors a chance to ply their trade and tell us more about what being Canadian really means. That is the principle behind the bill.

Nothing in these amendments changes that principle. Throughout the negotiations with the Americans, our position was very clear: We were not prepared to make a deal at any price. We were not prepared to sacrifice culture for commercial considerations.

We believe very strongly that a country need not sell its cultural soul bilaterally in order to sell its products globally. Globalization and a strong national culture can coexist. Now, finally, in the negotiations around Bill C-55, the Americans have fully and finally understood and agreed.

I believe this is a good deal for Canada. We are standing up for Canada on every front. I believe that Bill C-55 as amended will enable us to continue to have strong eloquent voices speaking for and to Canadians about the issues of concern to us.

For these reasons, I invite honourable senators to join me in supporting this bill as amended.

Senator Lynch-Staunton: Honourable senators, would the minister entertain a question?

Senator Graham: Absolutely.

Senator Lynch-Staunton: My first question is this: The Canadian government believes that the definition of the word "substantial" means "majority." They have made that claim. Can the minister indicate to us that the Americans have agreed with that interpretation so that when the word is applied, it is applied on the same definition?

Senator Graham: That has been made perfectly clear by the Canadian representatives to the American government.

Senator Lynch-Staunton: The Canadian representatives tell us that "substantial" means "majority." Do the American negotiators agree with that interpretation? If so, where is that in writing, the same way as Canada has put it in writing?

Senator Graham: The American trade representative said "substantial." The Canadian representatives have stated, as I have said in my remarks, that "substantial" means "majority."

Senator Lynch-Staunton: Honourable senators, that is correct. Could the minister answer the question? We agreed that both letters use the word "substantial." Canadians say elsewhere that "substantial" means "majority." Where do the Americans say that "substantial" means "majority"?

Senator Graham: This has been a long and arduous negotiation, honourable senators. The Canadian authorities take the Americans, after this very difficult negotiation, at their word.

Senator Lynch-Staunton: The question is, where do the Americans say formally and officially that the word "substantial" is being interpreted by them the same way as it is being interpreted by Canada?

Senator Graham: I am trying to make it perfectly clear that the Canadian delegation made it clear to the American representatives that "substantial" means "majority."

Senator Lynch-Staunton: Where have the Americans made it clear to Canadians that they agree? The answer is there: Nowhere. This is where the whole deal will bog down.

Senator Graham: Obviously, they agreed. The Canadian representatives said "substantial" means "majority" and the Americans understood this when they signed the agreement.

Senator Lynch-Staunton: There is nothing in the agreement defining the word "substantial." That all came out after. We shall see in time.

(1520)

Because of what the U.S. trade representative says in the letter, the minister believes that there will be no challenge under NAFTA. Does that include the inability of a foreign corporation to launch a claim under Chapter XI of NAFTA?

Senator Graham: Yes.

Senator Lynch-Staunton: Could the Leader of the Government in the Senate show me where that exists in the letter? The interpretation given by outside experts is that when the trade representative talks about the United States, she talks about the United States government, and cannot commit citizens and corporations to that agreement.

Senator Graham: I have been assured by Canadian authorities that that is the case, honourable senators.

Senator Lynch-Staunton: There is always assurance by Canadian authorities, but it is the Americans who will challenge that interpretation. We are looking for American assurances equivalent to those being given by Canadian authorities to one another. We have received non-answers. However, I will try a third time. Three strikes and I will be out.

The agreement states that if a party, on its own, simply stating that it is being violated by the other party, without an appeal to challenge that claim, withdraws from the agreement, the agreement becomes null and void after 90 days and the rights and obligations of each signatory will revert to what they were at the time of signature, which in this case is June 3.

Bill C-55 has yet to be passed. Do the rights and obligations which exist prior to June 3 include rights and obligations under Bill C-55, which has yet to be passed?

Senator Graham: Yes.

Senator Lynch-Staunton: Can the minister explain how he can be so definite that the law of the land does not subject it to international agreements?

Senator Graham: Honourable senators, we shall see the conclusion of this debate later today when we vote. I want to assure all honourable senators that what I have said is exactly the case.

Senator Lynch-Staunton: Three strikes and I am out.

Hon. Noël A. Kinsella (Deputy Leader of the Opposition): Honourable senators, moving into the second inning, in his address the honourable senator stated that this agreement with the Americans was a great achievement in terms of the Americans now recognizing that Canada can protect its culture, or words to that effect. Can the minister elaborate on that and, in so doing, indicate which paragraph in the agreement such a recognition is agreed to or is asserted by the Americans?

Senator Graham: Honourable senators, we can protect our culture. The consequences of not passing Bill C-55 as amended would be very serious ramifications for trade between our countries, be it in the steel sector, the lumber sector, the plastics sector or the apparel sector. The terms of Bill C-55 and of the agreement signed between Canada and the United States preserve our culture by achieving the best possible deal.

Senator Kinsella: The honourable senator is unable to point to a specific paragraph in the treaty that speaks to this aspect. This is an interpretation.

On page 4 of the agreement, as contained in the letter over the signature of Ambassador Raymond Chrétien, the ultimate paragraph reads:

If either party considers that the other party is not in compliance with this Agreement, that party may withdraw from the Agreement by written notification to the other party. The Agreement shall become null and void 90 days after such notification and, at that time, the parties' respective rights and obligations will return to those that existed immediately prior to the entry into force of this Agreement.

If this agreement is to be taken as having come into force on June 3, 1999, when the letter was signed, would the honourable senator explain what is the status quo ante June 3, 1999? Is it Bill C-55 as a legislative proposal unamended, is it Bill C-55 as a legislative proposal with proposed amendments, or is it no Bill C-55?

Senator Graham: It would be the proposed legislation with amendments.

Senator Kinsella: Is the honourable senator telling us that if the Americans find fault with this agreement, in the status quo ante to which we will revert, we have given away 18 per cent of Canadian advertising to the Americans?

Senator Graham: When the Americans signed the agreement, they were already aware of the bill with its proposed amendments.

Senator Kinsella: If there is disagreement between Canada and the United States on the implementation of this treaty, the provision to which I have referred on the bottom of page 4 says that within 90 days of the United States telling us that they do not agree, be it on the issue that we have just discussed or on some other issue, we will return to the situation which existed prior to June 3. This treaty will be out the window. The Leader of the Government in the Senate has just told us that this agreement will be out the window but the Americans will have Bill C-55 as amended. They get 18 per cent for nothing.

Senator Spivak: Honourable senators, the goal of Canadian policy was to have Canadian magazines telling Canadian stories. The minister herself stated that we do not want foreign magazines to become Canadian; we want our own Canadian magazines. Given that Hearst and other publishers have already said they intend to come in here, would you consider the goal of protecting Canadian culture to be accomplished if the majority of magazines publishing Canadian content are foreign-owned? That could very well be the case. The magazine publishing industry says that up to 70 per cent of their industry might be demolished.

Senator Graham: Honourable senators, we are talking about net benefit to Canada. The consequences of a trade war would be very serious. The Government of Canada negotiated what it considered to be the best possible deal and arrangement for Canadian publishers.

I have outlined the conditions under which American-owned publications can enter the Canadian advertising market. I have also said that there will be a fund established to assist Canadian publishers, the amount of which is still being discussed and negotiated with the Canadian publishers.

Senator Spivak: With all due respect to the Leader of the Government, eminent witnesses and one of the fathers of the Free Trade Agreement, Donald MacDonald, pooh-poohed the amount of damage that could be inflicted in a so-called trade war. We have never heard figures relating to the threats.

(1530)

We do not know. We have heard that they cannot be anywhere near the sums that have been mentioned. Even one of the American trade officials said, "Well, we know how to get what we want now. All we have to do is threaten and bully, and we can get other sectors."

Leaving that aside, I have another question. There has also been a report in the press that the Americans feel that they ought to be treated just as every other company is treated here in Canada. Therefore, if Canadian publishers are to get a subsidy, then they are absolutely entitled to a subsidy.

Since the subsidy was not part of the legislation, as has been stated here many times, and is beyond the legislation, what legal basis do we have in Canada? Where is our legal protection for saying to the Americans, "You are not entitled to the subsidy"?

Senator Graham: When we talked about the subsidies, we talked about subsidies to Canadian publishers, not American publishers.

Senator Spivak: That may be true, and I understand what has been talked about. However, the Americans have now stated that if they come in here and they have majority ownership of a company and adhere to all the rules, they are then entitled to the same subsidy as the Canadians. I am asking you whether this is an accurate position or an inaccurate position. Where is the legal protection which would prevent Canadian taxpayers from subsidizing American companies to come here and take our Canadian culture from us? Where is that legal basis?

Senator Graham: Honourable senators, that protection will be provided in the arrangements that are to be made and the details will be made public when the fund is announced.

Senator Spivak: With all due respect, those details are concerning the Canadian government looking at what it might give to its Canadian publishers. That is not the question. The American companies have now said that if they are operating in Canada as a Canadian company, they are entitled to subsidies. Where is the legal defence against that? What piece of legislation or agreement will you use to say, "No, you cannot have that subsidy; it is just for the Canadians"?

Senator Graham: Honourable senators, as I have said on other occasions, and I repeat again today, the arrangements for subsidies to Canadian publishers do not constitute any part of Bill C-55 and will be dealt with separately.

[Translation]

Senator Rivest: Honourable senators, now that the Government of Canada has given in on the issue of magazines in the cultural sector, what arguments will it use to prevent the Americans from obtaining similar agreements in other sectors of cultural activity?

[English]

Senator Graham: Honourable senators, we have not given in. We have agreed to an arrangement that, as I have said, is less than perfect. It is not 100 per cent perfect. However, we have achieved an agreement with the Americans which has averted what could have been a very serious trade war in major sectors of our economy.

[Translation]

Senator Rivest: If the agreement is not 100 per cent perfect, what guarantees will those in the world of film, recording, theatre and all other avenues of cultural expression have that the Government of Canada will not sign, to their detriment, less than perfect agreements in the publishing sector? There are no guarantees. You have contradicted the Government of Canada's claims that its policy was to affirm Canada's cultural sovereignty vis-à-vis the United States. That is what you have done.

[English]

Senator Graham: Let me talk about the film industry. Major assistance is provided to the film industry by the Government of Canada. That industry is alive and well in various areas of the country, and certainly in Senator Rivest's province of Quebec. Senator Oliver would know that in the province of Nova Scotia we have five or six sound stages, whether they be in Shelburne, Halifax, Dartmouth or Sydney. Assistance is being provided to the film industry and to those segments of our culture which are most in need.

[Translation]

Senator Rivest: You quoted a former Progressive Conservative minister as saying that the agreement signed by the Government of Canada looked good. Were you congratulated by Canada's trade partners - in particular, France and Portugal, leaders in protecting special cultural identity - on the Canadian government's attitude? These governments stood shoulder to shoulder with Canada against the cultural invasion by the United States. Were you congratulated by the Common Market nations and other countries fighting to defend their cultural sovereignty, when Canada gave in?

[English]

Senator Graham: Honourable senators, I am sure that the congratulatory messages will be on the way as soon as Bill C-55 is passed into law.

You say a former Canadian minister said that there were difficulties. Let me quote again a former Conservative cabinet minister, Mr. Ron Atkey, who will be well known by most senators. Mr. Atkey, the former Conservative cabinet minister who now specializes in international business transactions and international law, says that "this is a significant achievement. The U.S. has never agreed in any cultural field to any new content requirements. It sets a precedent."

I apologize for repeating a quotation I used already in my remarks, but I thought it needed emphasis and underlining for my honourable friends opposite.

Senator Lynch-Staunton: Who was he representing before the committee? If we are to start a new inning, I will try again with a question and a comment.

I find this debate distressing, disturbing, and even distasteful. Arguments have been made today to support amendments which were rejected only three months ago when they were raised.

Senator Oliver: Exactly.

Senator Lynch-Staunton: I quote Debates of the Senate, March 18:

Hon. Roch Bolduc: Honourable senators, am I to take it that the government has made up its mind? Regardless of pressures by the steel, textile or some other industry, has the decision been made to go ahead with the bill? Is that the government's decision?

Senator Graham: Honourable senators, I said no matter what pressures are applied. Is the opposition not listening?

Senator Lynch-Staunton: The government will not give in?

Senator Graham: I am the sponsor of the bill and, as far as I am concerned, the bill stands as it is.

There we had a categorical confirmation that the Government of Canada would stand up against the threat of trade sanctions. To reconfirm that, Senator Graham later on said:

It is important for us to understand, as Canadians and as senators, that we must stand up for our country. We can only be bullied so far. Enough is enough! Let us get on with business and support this piece of legislation.

We agreed. We said we should go into a clause-by-clause discussion. If the issue here is a principle of Canadian culture and Canadian identity, we will set aside our disagreements on some of the actual wording because the principle is more important. Let us get on with the bill. The government representative here convinced us that no matter what the Americans said, no matter what bullying confronted us, we would not put up with it.

We are told today, less than three months later, that we would have been subjected to the most heinous trade war imaginable. Industries would have collapsed, and God knows what else. By ceding to that, we ceded to an illegal trade war. Senator Joyal told us that just yesterday, and other government spokesmen have told us repeatedly that trade sanctions of this nature are illegal under every international agreement we have signed, be it WTO or NAFTA. In effect, by caving in, we have caved in to the threat of an illegal action.

(1540)

What do you think the Americans are saying about us today?

Some Hon. Senators: Hear, hear!

Senator Graham: I find it rather ironic that my friends opposite are on that side of the debate. One would think that the champions of free trade would be on this side of the debate.

Senator Lynch-Staunton: It has nothing to do with free trade.

Senator Graham: We as a government listen to every segment of society. We as a government listen to industry, including the steel industry and the apparel industry. They warned us of a very serious trade war that could emerge between our two countries. We listened, we took action, and we made accommodations. That is why this Liberal government is so successful.

Senator Spivak: Honourable senators, I am afraid I did not put my earlier question properly. However, I have since received some advice from a former minister of trade.

The question I wish to ask is this: When a Canadian company is operating in Canada and produces a product, not a service, under NAFTA, they are entitled to the same treatment as Canadian companies. How then will you prevent those foreign companies who are coming in from receiving a subsidy when, under NAFTA, they are entitled to that same favourable treatment?

Senator Graham: The rules and regulations with respect to the "fund" are still being negotiated with the publishers.

I am glad that Senator Kelleher was able to provide the honourable senator with advice. He is a distinguished former minister of trade. Speaking of former ministers of trade, I only wish Senator Carney were here, because I am sure that if she were, she would be on our side of the question. It was rather shameful that Senator Carney was left out of those tenth anniversary celebrations or observances in Montreal last week.

Senator Spivak: Any agreement negotiated or in place between the Government of Canada and the magazine publishing industry is subject to NAFTA. Is that not the case with every industry? If the foreign publishers come to Canada and they are producing what is termed a Canadian product, they are then entitled to favourable treatment in the same way as Canadian companies.

What I would like from the Leader of the Opposition is an argument that refutes that view. I do not wish for this to happen, I believe that this will happen.

Senator Graham: I presume the honourable senator meant the Leader of the Government, not the Leader of the Opposition. However, perhaps he would like to take a crack at the question.

Honourable senators, I have been assured that we are in total compliance with the NAFTA.

Senator Lynch-Staunton: That is what you said about MMT.

Senator Kinsella: I wonder whether the minister could give us some clarity to the matter that was raised as a result of his address to us and the question of the Investment Canada Act?

My understanding of prime ministerial prerogative relating to the machinery of government does not give the Prime Minister the authority to expand a minister's mandate to areas of responsibility beyond a statutory provision.

A serious issue in this debate is the designation of the minister pursuant to the statute. The minister who is responsible pursuant to the Investment Canada Act is defined by statute.

In terms of the prerogative of the Prime Minister to appoint his ministry, how will the machinery of government deal with the problem of two ministers having responsibility when the act only provides for a single minister with responsibility?

Senator Graham: Senator Kinsella raises an interesting point. My understanding, honourable senators, is that there will only be one minister on this file.

Until now, the Minister of Canadian Heritage has been required to provide an assessment on the benefits of allowing foreign investment in cultural industries to the Minister of Industry. However, with this transfer of responsibility, that step will be removed.

I understand what the honourable senator is saying about governments. I also understand that the assignment of authority is perfectly within the authority of the Prime Minister.

The Investment Canada Act has always required that investments in cultural industries be compatible with national cultural policies. The Minister of Canadian Heritage has always been consulted on foreign investment cases involving cultural industries. The transfer of authority for review and approval of these investments will streamline the process for investors in the cultural sector.

Senator Lynch-Staunton: I have a supplementary question to that response, as I raised the matter. Whether or not we agree with the policy of splitting the responsibilities of one department between two ministers, under what authority can the Prime Minister take such action unilaterally?

My understanding of the act, and I quoted the appropriate section 3, is that there can only be one minister designated by the Governor in Council as a minister for the purposes of this act.

Since the regulatory powers of section 35 do not include an authority to shift responsibilities from the Department of Industry to any other department, under what authority can this be done other than through an amendment to the act?

Senator Graham: Honourable senators, the Prime Minister has announced that, while the Minister of Canadian Heritage hitherto would be providing an assessment or advice to the Minister of Industry, she will have the sole responsibility on matters of this kind.

Senator Lynch-Staunton: That is not the question. I know what the Prime Minister said.

I am asking under what authority can he transfer the decision-making process of Investment Canada on cultural industries to a minister who is not the Minister of Industry other than through an amendment to the act?

I am not questioning what the Prime Minister said. I want to know how his decision, whether or not one agrees with it, can be implemented?

Senator Graham: Honourable senators, the Prime Minister has the authority to make that decision.

Senator Lynch-Staunton: Can the minister explain to us what authority allows him to do that, to take an act passed by Parliament which says specifically that only one minister is in charge of that act, and then unilaterally say, "Well, for part of that act, I will pass those responsibilities on to another minister"? Where does a parliamentary approved act allow that?

Senator Graham: Honourable senators, it will be only one minister, the Minister of Canadian Heritage.

Senator Lynch-Staunton: No, it will be two ministers sharing the responsibilities of one act, when the act specifies that only one minister is responsible for the entire act.

Minister Copps is now involved in a consulting process, which is fine. I would hope that any decision taken by Investment Canada pursuant to this act is a result of consultation by all ministers and others directly involved with whatever industry is being reviewed. However, we are going one step further. We are going beyond the consulting process and shifting the decision-making process out of the hands of Industry Canada into the hands of the Department of Canadian Heritage. I maintain that a unilateral action of that nature cannot be undertaken. That can only be done by an amendment to the act.

Senator Graham: Honourable senators, that is Senator Lynch-Staunton's opinion. I am sure the Prime Minister has consulted with the appropriate authorities, and that is his decision. There will be one minister responsible for this particular aspect of the legislation, and it will be the Minister of Canadian Heritage.

Senator Lynch-Staunton: Since the Prime Minister already dismisses whatever Parliament wants anyway, I am not surprised to hear that.

Has the decision already been taken? If so, in what form? Can we see the document confirming that decision?

Senator Graham: I would be happy to provide the document. I do not have it with me at the present time. I certainly shall provide it in due course.

Senator Kinsella: Not only are the provisions of the Investment Canada Act brought into play here, but provisions of the Financial Administration Act also come into play. What will be the application of the Financial Administration Act to the role to be played by the Minister of Canadian Heritage? How will the function that is to be exercised by the Minister of Canadian Heritage be financed? How will the Financial Administration Act and funds be assigned for that discrete activity?

Senator Graham: I am sure that it will be done under the budgetary provisions of the Department of Canadian Heritage.

Senator Kinsella: Does the minister not think that the committee or the Senate ought to have had the opportunity to delve into the unfolding? These are technical questions. Usually, technical questions are delved into in committee. These are the problems that we get into when we rush a piece of legislation, in the way that this one is being rushed.

Senator Graham: Honourable senators, Senator Kinsella and other honourable senators who attended the meetings had every opportunity to consult on those questions with both the Minister for International Trade and the Minister of Canadian Heritage, as well as their officials.

Senator Lynch-Staunton: They stonewalled as much as you did.

Senator Kinsella: I find it somewhat disconcerting that the principle of the rule of law, whether applied in domestic legislation or in terms of international law, is getting such short shrift in this matter. The testimony that we have had - indeed, including the testimony from a minister of the Crown - was to the effect that pursuant to international law, to wit, the trade agreements and the WTO, what the Americans were threatening was illegal.

Senator Lynch-Staunton: Right.

Senator Kinsella: Canada seems to be saying, "The rule of law does not matter. It is the schoolyard bully who gets his way. It is might that makes right, not the rule of law." I hope - and I would like very much for the minister to set the record clear - that we are not giving in, and that we will stick up for what we most respect, namely, the rule of law, even when we are dealing with hegemonies like the United States of America.

Senator Graham: Honourable senators, the United States has given the Government of Canada written assurance that it will not take any trade action against Bill C-55 under the World Trade Organization agreements, NAFTA, or section 301 of the United States Trade Act.

Senator Kinsella: A long-standing position of the Government of Canada has been that Canadian advertisements will not be available to American publications.

Senator Lynch-Staunton: It is a 40-year-old policy.

Senator Kinsella: This amendment will now give them 18 per cent of the pie. The reason you have given them 18 per cent of the pie is that they have threatened illegal trade actions against Canada, which was nothing but a bluff. You fell for it.

Senator Lynch-Staunton: Silence is golden.

Hon. Fernand Robichaud (Acting Speaker): If no other honourable senator wishes to participate in the debate, then this matter will be voted upon at 4:15 p.m. as per the arrangement which has been made, and we will proceed to other business.

[Translation]

Criminal Code Corrections and Conditional Release Act

Bill to Amend-First Reading

The Hon. the Acting Speaker informed the Senate that a message had been received from the House of Commons with Bill C-251, to amend the Criminal Code and the Corrections and Conditional Release Act.

Bill read first time.

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

On motion of Senator Cools, bill placed on the Orders of the Day for second reading on Thursday, June 10, 1999.

Criminal Records Act

Bill to Amend-Second Reading

On the Order;

Resuming the debate on the motion of the Honourable Senator Fraser, seconded by the Honourable Senator Ruck, for the second reading of Bill C-69, to amend the Criminal Records Act and to amend another Act in consequence.

Hon. Pierre Claude Nolin: Honourable senators, by virtue of sections 5, 6 and 7 of the Criminal Records Act, a pardon allows persons found guilty of a criminal offence, who have served their sentence and proven that they have become law-abiding citizens, to have their records sealed. This helps facilitate the social reintegration of offenders.

Under the Criminal Records Act, the National Parole Board has the power to deliver, grant, refuse or revoke a pardon relating to an offence against a federal law or its regulations. In addition, the Canadian Human Rights Act forbids any discrimination toward persons who have been pardoned by the Solicitor General of Canada. It is important to specify that pardon does not erase the existence of the sentence, and that it can be revoked automatically if the individual is subsequently convicted of a criminal act.

The amendments the government proposes to the Criminal Records Act via Bill C-69 are aimed at enhancing the safety of the Canadian public. They are aimed particularly at preventing sex offenders from holding positions of trust involving children and other vulnerable groups. Bill C-69, therefore, provides the following: imposition of a one-year waiting period after a request for pardon has been turned down; automatic revocation of a pardon upon subsequent conviction for a mixed offence, that is one liable to either summary conviction or indictment. There is also a provision enabling notations to be made in the automated criminal conviction records retrieval system of the records of pardoned persons in order to allow the disclosure of these records when individuals are screened for positions of trust with children or other vulnerable groups.

Section 5 of the Criminal Records Act currently provides the effects of granting pardon, such as the sealing of a delinquent's criminal record. Section 6(2) provides that the records of an individual who has received a pardon that are in the custody of the Commissioner of the Royal Canadian Mounted Police, a department or a federal agency, must be filed separately from other records pertaining to criminal matters. In addition, they may not be disclosed, their existence revealed or the sentence revealed without the prior authorization of the Solicitor General of Canada.

Clause 6 of Bill C-69 proposes an additional provision concerning the particular case of records of pardoned sexual offenders. The new section 6.3 of the Criminal Records Act provides that the Commissioner of the RCMP may include in the automated criminal conviction records retrieval system maintained by the RCMP a notation informing the police doing research for screening purposes that an individual has a sealed record for an offence of a sexual nature in respect of which a pardon has been granted or issued.

(1600)

It is important to note that this recommendation was unanimously approved by the federal, provincial and territorial ministers of justice at their October 1998 meeting in Regina.

Thus, all organizations providing services for children and wanting to hire volunteers or an employee may now find out whether an applicant has been pardoned for a sexual offence. Under subsection 6.3(2), this verification may be done only on two conditions: first, if the job would put the candidate in a position of authority or trust relative to children or vulnerable persons; and second, if the applicant has consented in writing to the verification.

If the verification indicates that the person has been sentenced for a sexual offence, the RCMP or police conducting the verification may ask the Commissioner of the RCMP to provide the Solicitor General with any record of a conviction of that applicant. Under new subsection 6.3(5) the Solicitor General may decide on the relevance of disclosing the content of the record. Should he authorize its disclosure, the RCMP or police must then disclose the information to the organization requesting it.

According to new subsection 6.3(7), however, an organization that acquires information under this section shall not use it except in relation to the assessment of the application.

Honourable senators, I am fully in agreement with the objectives and principles of Bill C-69. Clearly, our children and other vulnerable members of our society will be better protected by these new measures.

The aspect of Bill C-69 that addresses the flagging of the criminal conviction records of a person convicted of a sex offence and the release of his record is similar to Bill C-284, which is still under study in the other place by the Standing Committee on Justice and Human Rights. The underlying policy shared by Bill C-284 and Bill C-69 has been strongly supported by victim defence groups.

On the other hand, certain associations, such as the Elizabeth Fry Society and the Criminal Lawyers' Association, might have some reservations on the policy on which Bill C-69 is based.

What concerns them is that these bills might jeopardize the integrity of the pardon system and its role in the rehabilitation and reintegration of offenders. According to them, it has not been proven to their satisfaction that the present legislation offers insufficient protection to society, and that anything needs changing. The Criminal Lawyers' Association has recommended that, if these measures were adopted, they ought to at least include a provision that the individual involved must consent to disclosure, as is the case in Bill C-69.

Other groups, such as the John Howard Society, the Saint Leonard Society and Volunteer Canada, shared this concern when Bill C-284 was being looked at as far as the integrity and value of pardons and their role in rehabilitation are concerned. The John Howard and Elizabeth Fry societies feared that reliance on access to pardon files might lead to a false sense of security, by making secondary other key considerations for selecting people for positions of trust with children or other vulnerable groups. The comments of these three organizations suggest that they prefer Bill C-69 over Bill C-284, however. Bill C-69's preservation of ministerial discretion in connection with disclosure of records, and the requirement of the pardoned individual's consent for disclosure seem to be the main reasons for this preference.

There is no doubt, honourable senators, that the Standing Senate Committee on Legal and Constitutional Affairs will have to consider these matters.

In closing, I would like to take a look at the issue of the regulations with respect to enforcement of the proposed new section 6.3 concerning notations in the criminal record.

Clause 8 of the bill would amend section 9.1 of the Criminal Records Act so that the new provision with respect to making notations in the records of individuals who have received pardons following a conviction for a sexual offence is properly enforced. Thus, the government will be able to make regulations: listing offences covered by the term "sexual"; respecting the making of notations in respect of criminal records and records of conviction and the verification of such records; defining the expressions "children" and "vulnerable persons"; and, respecting the consent given by applicants under the new section 6.3 to the verification of records and the disclosure of information contained in them to requesting organizations, and prescribing the factors that the Solicitor General must have regard to in considering whether or not to authorize a disclosure of the record of a person who has received a pardon.

I understood from Senator Fraser's speech that the regulatory authority defined in this clause of Bill C-69 was a matter of government policy. Several questions come to mind.

First of all, why would the list of offences in the clause be listed, amended, extended or shortened by the Governor in Council?

It seems to me, honourable senators, that we should be able to draw up such a list. I fail to see why responsibility for amending the list of offences covered in the bill would fall to the Governor in Council.

Second, why let the Governor in Council define the words children and vulnerable persons? It seems to me that we could define that here. I leave to the Governor in Council the regulations concerning the applicant consent process. There is nothing of substance in the regulations. The Governor in Council is told to have the mechanism for the granting, disclosure of the individual's consent in place. No substantive rights are created with the regulations. Why is the Governor in Council being given the power to oversee and define the ministerial authorization process. It seems to me there is almost a conflict of interest. Parliament should oversee this discretionary power. Why leave it up to the Governor in Council to describe how this discretionary power will be exercised? Why could this discretionary power only be subject to a regulatory decision?

Honourable senators, I have set out my concerns with respect to this bill. I support its philosophy and objectives. We are asking Parliament to authorize excessive regulatory power. Unfortunately, it is the fate of many bills. I am not pointing the finger at one government or another; it is a disease, a cancer. We often consider bills on the run. We put a few questions to officials and to ministers and we are satisfied with the responses. Thank God that recently we have decided to include in our bills clauses providing for review after proclamation, because we have realized that there is too much regulatory power. Without wanting to limit it, after sufficient time has passed, we could look at how the Governor in Council or the minister responsible for the law have behaved or whether the law has achieved its objectives.

Therefore, honourable senators, I recommend that you support second reading, and I trust that we shall be able to fully examine this bill in committee.

Motion agreed to and bill read second time.

Referred to committee

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

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

[English]

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Budget Implementation Bill, 1999

Third Reading-Motion in Amendment- Debate Suspended

On the Order:

On the motion of the Honourable Senator Moore, seconded by the Honourable Senator Kroft, for the third reading of Bill C-71, to implement certain provisions of the budget tabled in Parliament on February 16, 1999;

And on the motion in amendment of the Honourable Senator Bolduc, seconded by the Honourable Senator Beaudoin, that the bill be not now read a third time but that it be amended:

(a) on pages 10 to 12, by deleting Part 3; and

(b) by renumbering Parts 4 to 9 and clauses 20 to 50 and any cross-references thereto accordingly.

Hon. Wilfred P. Moore: Honourable senators, we cannot agree with the motion proposed by the honourable senator to amend the bill for the following reasons: Part 3 of this omnibus budget bill contains an essential provision for the extension of binding arbitration for another two years, until June 2001. Let me remind the honourable senator that this bill is important from two perspectives.

First and foremost, this provision is consistent with the fiscally responsible approach to our labour relations. We must continue to be concerned that binding decisions by third parties could jeopardize the government's control of its fiscal priorities. Managing payroll costs for the public service remains a fundamental and ongoing concern. This government has made considerable fiscal gains, and we must remain vigilant if we are to respond to the priorities of all Canadians.

This is one reason why we are proposing that the suspension of binding arbitration be extended throughout the next round of collective bargaining. However, this reason does not stand alone.

The second rationale is that this provision is being proposed as we introduce several important initiatives over the next few years aimed at reforming the way we manage human resources in the public service of Canada. One of these important initiatives is the introduction of a new gender-neutral job classification plan. It is called the Universal Classification Standard or UCS.

I agree with the honourable senator that streamlining our public service job classification structure is necessary and long overdue. That is why, when we do it, we wish to do it right the first time. We should like to do it through negotiations with our unions and in a fiscally responsible manner. This is why the government must continue to manage the agenda. It is not desirable to leave all or any of this to a binding third party.

In order to implement UCS, we will need to negotiate, with our unions, new rates of pay and conditions for converting to the new plan. The critical challenge will be to align pay with work of common value. This is not a simple challenge. It will require the government and the unions to negotiate in good faith. It will require that these two parties take a committed approach to the negotiations.

During the collective bargaining process, every effort is made by the parties to reach a negotiated settlement. When required, the employer or the union can seek the help of a third party, such as fact finders, conciliators and conciliation boards, to assist them in resolving outstanding issues.

I should like to point out that, since we returned to the negotiating table in 1997, this government has successfully negotiated, sometimes with the help of conciliators, collective agreements for over 97 per cent of its unionized employees. This includes agreements for essential occupational groups, such as healthcare workers and for groups where the market-place is highly competitive, such as our computer systems workers. In fact, we reached a second negotiated settlement just this past month with these critical computer specialists. These results, through negotiated settlements, are a significant achievement, and it was accomplished in the absence of binding arbitration.

[Translation]

The Hon. the Acting Speaker: Honourable senators, I must interrupt Honourable Senator Moore and suspend the sitting as agreed to yesterday on the motion of the Honourable Senator Carstairs, seconded by the Honourable Senator Kinsella, in order to proceed with the vote on Bill C-55.

Debate suspended.

[English]

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Foreign Publishers Advertising Services Bill

Report of Committee Adopted

On the Order:

On the motion of the Honourable Senator Carstairs, seconded by the Honourable Senator Callbeck, for the adoption of the twelfth report of the Standing Senate Committee on Transport and Communications (Bill C-55, respecting advertising services supplied by foreign periodical publishers, with amendments) presented in the Senate on May 31, 1999.

The Hon. the Speaker: Honourable senators, the first vote is on the motion in amendment.

Motion in amendment negatived on the following division:

YEAS

THE HONOURABLE SENATORS

Andreychuk
Angus
Balfour
Beaudoin
Bolduc
Buchanan
Cochrane
Cohen
Comeau
DeWare
Di Nino
Doody
Eyton
Forrestall
Ghitter
Grimard
Gustafson
Johnson
Kelleher
Kelly
Keon
Kinsella
Lavoie-Roux
LeBreton
Lynch-Staunton
Meighen
Murray
Nolin
Oliver
Rivest
Roberge
Robertson
Rossiter
Simard
Spivak
Stratton
Tkachuk-37

NAYS

THE HONOURABLE SENATORS

Adams
Austin
Bryden
Butts
Callbeck
Carstairs
Chalifoux
Cook
Cools
Corbin
De Bané
Fairbairn
Ferretti Barth
Fitzpatrick
Fraser
Gill
Grafstein
Graham
Hays
Hervieux-Payette
Joyal
Kenny
Kirby
Kroft
Lawson
Lewis
Losier-Cool
Maheu
Mahovlich
Maloney
Mercier
Milne
Moore
Pearson
Perrault
Pitfield
Poulin
Poy
Robichaud
(L'Acadie-Acadia )
Robichaud
(Saint-Louis-de-Kent)
Ruck
Sparrow
Stewart
Stollery
Taylor
Watt
Whelan
Wilson-48

ABSENTIONS

THE HONOURABLE SENATORS

Nil

The Hon. the Speaker: Honourable senators, we are now back to the main motion.

Is it your pleasure, honourable senators, to adopt the motion?

Some Hon. Senators: Yes.

Some Hon. Senators: No.

The Hon. the Speaker: Will those honourable senators in favour of the motion please say "yea"?

Some Hon. Senators: Yea.

The Hon. the Speaker: Will those honourable senators opposed to the motion please say "nay"?

Some Hon. Senators: Nay.

The Hon. the Speaker: In my opinion, the "yeas" have it.

Hon. Noël A. Kinsella (Deputy Leader of the Opposition): On division.

Motion agreed to and report adopted, on division.

Third Reading

Hon. B. Alasdair Graham (Leader of the Government): Honourable senators, I move the third reading of Bill C-55.

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

Some Hon. Senators: Yes.

Some Hon. Senators: No.

The Hon. the Speaker: Will those honourable senators in favour of the motion please say "yea"?

Some Hon. Senators: Yea.

The Hon. the Speaker: Will those honourable senators opposed to the motion please say "nay"?

Some Hon. Senators: Nay.

The Hon. the Speaker: In my opinion, the "yeas" have it.

Hon. Noël A. Kinsella (Deputy Leader of the Opposition): On division.

Motion agreed to and bill read third time and passed, on division.

Budget Implementation Bill, 1999

Third Reading-Motion in Amendment- Debate Continued

On the Order:

Resuming debate on the motion of the Honourable Senator Moore, seconded by the Honourable Senator Kroft, for the third reading of Bill C-71, to implement certain provisions of the budget tabled in Parliament on February 16, 1999;

And on the motion in amendment of the Honourable Senator Bolduc, seconded by the Honourable Senator Beaudoin, that the Bill be not now read a third time but that it be amended:

(a) on pages 10 to 12, by deleting Part 3; and

(b) by renumbering Parts 4 to 9 and clauses 20 to 50 and any cross-references thereto accordingly.

Hon. Wilfred P. Moore: Honourable senators, I will continue my remarks with respect to the proposed amendment to Bill C-71. As I was saying, these results through negotiated settlements are a significant achievement, and it was done in the absence of binding arbitration.

As we modernize the Public Service of Canada, the government must continue to balance the needs and priorities of Canadians, as well as those of the employees who serve them. By extending the suspension of binding arbitration, we will ensure that this balance is maintained. The ultimate goal of this government is to provide Canadians with responsive service at a reasonable cost.

Hon. James F. Kelleher: Honourable senators, I am pleased to rise today to speak to Bill C-71, a bill that implements minor and selective tax reductions for Canadians. As all honourable senators well know, minor tax reductions will not bring about an improvement in our poor productivity record, according to the Industry Minister, and I quote:

Over the last 25 years, Canada has had the lowest rate of productivity growth in the G-7.

It is for this reason that I will speak for about five minutes on Canada's productivity problem and the need to address productivity decisively through tax reductions and expanded trade.

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Honourable senators, many Canadians and parliamentarians are struggling with conflicting information on whether or not Canada has a productivity problem. The answer is, yes, Canada does have a productivity problem. The conflicting information is best addressed in a recent report of the World Bank:

On the productive wealth of industrialized countries, countries such as Australia and Canada, with thinly populated economies, are leaders in total terms but only 20 per cent of that wealth is accounted for in human skills. This is in stark contrast to Japan with 80 per cent and the United States with 60 per cent.

Honourable senators, herein lies the problem. Canada, with its commodity-based economy and thin population, has a high level of productivity relative to other countries, but when one looks closely at growth areas of the future, the new economy, Canada is at a clear disadvantage. We do not possess the deep reserves of technological skills necessary for the economy of tomorrow and are still too dependent on commodities.

As Governor Thiessen said in a 1998 speech entitled, "The Future Performance of the Canadian Economy":

So how has Canada fared in the productivity department since the 1950s and 1960s? Not all that well I am afraid. After a relatively strong showing from the end of the Second World War to the early 1970s, our productivity performance became rather lacklustre. Productivity growth is estimated to have slowed from an average of 2 per cent in the 1950s and 1960s to less than 1 per cent in the 1980s and 1990s.

Honourable senators, the answer to Canada's productivity problem can only be addressed by further liberalizing trade, reducing regulation, and reducing taxation which will ensure entrepreneurs stay or come to Canada so as to bring technological innovation.

Clearly even my Liberal colleagues have come to realize the free trade agreement and NAFTA began the important process of industrial transformation. As former prime minister Brian Mulroney said this past weekend when speaking at a free trade conference:

...free trade sparked an explosion of trade, created jobs and attracted investment.

As we in this chamber know, investment is crucial to addressing the issue of our productivity gap relative to that of the U.S., especially as it relates to the new economy because of the need to transfer technological know-how. Canada must therefore continue to follow the trade policies of the late 1980s and early 1990s. Open borders, however, will not in themselves bring about investment in technology and therefore productivity, if we continue to be a heavily regulated and taxed economy.

On the issue of regulation, the 4 per cent first quarter surge in U.S. productivity may be explained in part by deregulation occurring in the telecommunications sector. In Canada, we have not seen the extent of deregulation in that sector as witnessed in the U.S. and, accordingly, our productivity continues to sag.

Senator Meighen said it best in his capital gains speech of yesterday when he spoke of highly skilled Canadian entrepreneurs at the helm of some of the largest technological companies in the U.S. The loss of talent, especially the talent relating to the telecommunications sector, should give all of us in this chamber reason for concern.

Senator Oliver: Hear, hear!

Senator Kelleher: Honourable senators, taxes must fall. The falling Canadian standard of living, despite booming exports to the U.S., should be a wake-up call to all Canadians that our personal, corporate and capital tax rates must fall.

The chairman of the Finance Committee of the other place recognized the relationship between taxes and productivity when he said that the Liberal government must aggressively cut taxes to increase productivity and raise Canadian living standards. He further added that the government should focus on policies that would spur economic growth, including tax reduction, privatization and deregulation. Well said. I suggest he will not be casting his leadership vote for Finance Minister Paul Martin.

In closing, honourable senators, I wish I could report that the government appears to be listening to Canadians but, according to a Globe and Mail article of May 10, this does not appear to be the case:

The Liberal government appears increasingly adrift and divided on the key economic issue of the day: The proper balance between tax cuts and spending to boost Canadian's living standards...

Key Liberal strategists believe Canadians are not mounting a tax revolt across the country, but rather suffer from a tax weariness that can be assuaged with steady...reductions year by year.

Honourable senators, the Liberals are correct that Canadians are tax-weary but are wrong that a tax revolt is not underway. One only needs to get out of Ottawa to hear the loud and persistent anger of Canadians regarding our high level of taxation.

It is not the nature of Canadians to lash out at those in power. Rather, we do something that is far more dangerous for the future of Canada. We seek better economic opportunities elsewhere, in the U.S. for now, later in Latin America and perhaps in Asia. This is a revolt of the worst kind, honourable senators.

In closing, the government will likely have a surplus of $7 billion this year and $10 billion next year. Honourable senators, the federal government has options to cut personal, corporate and capital taxes across the board. Failure to cut taxes will mean a continuing drain of our much-needed entrepreneurs and an economy that is not becoming more productive or more innovative.

[Translation]

Hon. Jean-Claude Rivest: Honourable senators, I wish to bring to your attention the considerable difficulties being experienced in the field of post-secondary education and the inability the Government of Canada found itself in at the time of the last budget to act on the numerous representations made to it by the governments of the provinces.

Hon. Fernand Robichaud (Acting Speaker): Honourable senators, it is hard to hear the speaker. I would like a little more decorum so that Senator Rivest may be heard.

Senator Rivest: I was saying that the government has been unable to meet the expectations and urgent demands being made by all Canadians with respect to the underfunding of post-secondary education in Canada.

As honourable senators know, Bill C-71 calls for substantial increases to transfer payments, primarily for health. Bill C-71 calls for this amount to be raised to $13.5 billion for fiscal year 2000-201, to $14.5 the following year, and $15 billion the year after that.

The federal government plans to increase payments to the provinces under the Canada social transfer by more than $11.5 billion over the next five years. In 1999-2000 alone, the provinces received over $3 billion in transfers on condition that these funds be used solely in the health sector as agreed by the first ministers.

In other words, the effort to catch up, after the Government of Canada's cut-backs in the health sector, gives all provinces and all stakeholders a certain flexibility in the health sector.

However, when it comes to post-secondary education, the government has unfortunately decided to do nothing. As senators know, the needs in this sector of activities, with its great importance for the economic development of Canada, remain completely unmet.

Despite the serious crises in Canadian colleges and universities, the government has still not committed to restoring education transfers to the 1993 level. In fact, since that date, the federal government has cut provincial transfer payments for postsecondary education by over $3 billion. The consequences of these cuts are not visible today and will probably not make the headlines. Because they affect all young people in Canada, the ground we have been losing for close to two years in this sector may well have catastrophic consequences for the country as a whole.

The government's only post-secondary education measure is the very controversial bill to create the Millennium Scholarship Foundation. This organization, officially independent of the government, has been given a $2.5-billion budget.

Its role is to provide scholarships of $3,000 each to 100,000 students over a period of ten years.

There was a lot of criticism when the creation of this Foundation was announced. The main criticism in most provinces was that this help for students clashed, but not with the same severity as in Quebec, however, with other problems in the area of education. It was a poor choice of priorities imposed unilaterally by the federal government allegedly because the Right Honourable Jean Chrétien, Prime Minister of Canada, wanted to build a monument to himself by making a gift to the nation. So he chose artificially and arbitrarily. So we have the Millennium Scholarship Fund to commemorate the member for Shawinigan's time in politics.

Honourable senators, he no doubt deserves our tributes, but not from public funds and not through a bill, which may have some interest, but which is very marginal compared with the real priorities in the field of education.

I would do well to point out the main arguments this bill has elicited. Many members of this house and the House of Commons have pointed to the pathetic and random nature of such an initiative. As we have already said, the Government of Quebec has, for a number of years, had a plan for helping students with post-secondary education, which works very well and meets the students' needs.

To this, the federal government arbitrarily grafted an initiative. No way has yet been found to harmonize the two initiatives so different are the approaches of Quebec City and Ottawa.

I would refer you to the initiative by the Liberal member for Verdun, Mr. Henri-François Vautrin, who proposed, in order to resolve the dispute between Quebec City and Ottawa on this issue of the millennium scholarships, that, in the interest of Quebec students, the National Assembly ask the federal government and the Government of Quebec to resume negotiations on the scholarships in order to reach an agreement that would honour the following principle: the share going annually to Quebec students would be determined according to a formula based on demographic criteria. Quebec would select students to receive scholarships and then transfer the list to the Foundation. The foundation would then send, in accordance with the terms agreed on with the Government of Quebec, the scholarships to the recipients.

After this resolution was passed by the National Assembly, there was a sort of confusion, a sort of pathetic dance by the Quebec Minister of Education and the Minister of Human Resources Development in Ottawa. One did not want to speak to the other, the other referred the first to the Millennium Scholarships Foundation, as if the Government of Quebec or any province could negotiate with a third level of government in an area of jurisdiction set aside exclusively for provincial legislatures, in this case, the Quebec National Assembly.

It was a sort of fruitless fantasy of the part of the Government of Canada, the effect of which was to politicize federal-provincial relations and to give the government of the Parti Québécois another opportunity to expound its sovereignist theory to the detriment of the Canadian political option.

This bill was very badly designed and served no purpose. There was no request from Quebec for such a bill. It was unilaterally imposed and, even today, the two ministers have yet to reach an agreement within the time-frame imposed so that Quebec students may benefit from this assistance, since the money is there. They do not seem to be able to manage it.

Again, on the weekend, Mr. Pettigrew, the Minister of Human Resources Development, said they were on verge of reaching an agreement. That was denied by Quebec City. There is a whole criss-cross of politicking between the two levels of government that has led absolutely nowhere, either for the students or for the world of education.

Honourable senators, the dramatic part is that the Government of Canada is, in the coming years, pouring hundreds of millions of dollars into education. The basic problem with the government's initiative is that it is completely outside the Canadian constitutional order. Education is a provincial matter. If federal government has money, it should, as it was the case in the past, transfer it to the provinces so that they may look after their jurisdiction.

I shall speak specifically of the educational community and the educational needs in Quebec. Let us look at the here and now. The Canadian government should hand this money over to the provinces, Quebec in particular, for educational purposes.

The western premiers got together a few weeks ago and demanded that the Government of Canada respect the Canadian Constitution. They also called upon the Government of Canada to step up federal funding to education.

The premiers made a commitment, one to which Quebec could subscribe. Quebec will use these funds as it sees fit for education, which is under its jurisdiction. The premiers are prepared to commit similarly in writing for the health field, to state: "Yes, these funds are freely given, and they will be devoted to education as is done with health."

Honourable senators, we need to familiarize ourselves with the reality of education in Quebec. What is Quebec talking about in the educational field? What are its priorities as far as requirements are concerned? First of all, there is the whole question of teachers and wage parity.

Late last week, the Fédération des commissions scolaires du Québec held its convention and sent a clear message to the Quebec Minister of Education: "We have responsibilities and we exercise those responsibilities. Give us more money, and we will make it possible for the entire educational field in Quebec to move forward."

If there is money available, let the Government of Canada give it to the Government of Quebec, which will in turn pass it on to the school boards. This would have been a far wiser and more self-respecting initiative for the educational field than this sort of artificial initiative of the millennium scholarships, which we in Quebec did not need.

There are urgent needs with respect to teachers, with respect to replacements for those leaving the profession. Pay equity is a major issue that will cost the government hundreds of millions of dollars. There are problems with respect to school funding, as well as underfunding in the area of job training.

Honourable senators, anyone who gives the slightest bit of thought to the educational sector and its needs cannot fail to be critical of the fact that the money the Canadian government has spent on the millennium scholarships belongs not to the Canadian government but to all taxpayers, including the portion paid by Quebec's taxpayers obviously. By investing it in millennium scholarships in a unilateral move that defies reason and is completely risky, the Canadian government made a bad decision.

Honourable senators, this is regrettable. This is not how the Canadian federal system is supposed to work.

On motion of Senator Oliver, debate adjourned.

[English]

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Canadian Environmental Protection Bill, 1998

Second Reading

On the Order:

Resuming debate on the motion of the Honourable Senator Butts, seconded by the Honourable Senator Milne, for the second reading of Bill C-32, respecting pollution prevention and the protection of the environment and human health in order to contribute to sustainable development.

Hon. Mira Spivak: Honourable senators, our country needs strong legislation to prevent the pollution that is damaging the health of Canadians and fouling our environment. We can measure the need - and not just in smog alerts like the one issued recently for Southern Ontario. For the first time, we can measure it in rates of asthma among children, in cancer rates among people who live near toxic waste, and in birth abnormalities and declining sperm counts. As the House of Commons Environment and Sustainable Development Committee reminded us four years ago in its excellent report about the kind of legislation we need, the Canadian Environmental Protection Act is about our health.

In speaking to Bill C-32, I would like first to raise just a few of the facts about our environmental ill-health that have come to light in recent months. Statistics Canada told us that deaths among children due to asthma are increasing and that asthma rates have quadrupled in the last 20 years. At the Eco-Summit on Parliament Hill a few weeks ago, a medical doctor told us he was stunned to learn that, after years of making progress, air quality in Ontario is now growing worse for ground-level ozone and other ingredients of smog. A British Columbia doctor who treats patients for respiratory problems called air pollution a present and immediate danger. He said bluntly:

The only people who refuse to admit it are those who profit from it, or those who are beholden to those who profit from it, or those who haven't looked at the scientific evidence.

Last month, some two dozen families were evacuated from their homes near the Sydney tar ponds. For years, they had lived near 700,000 tonnes of toxic sludge. This spring, an orange goo again seeped into their basements and into neighbourhood yards. Last year, the federal government tested and hauled away soil from the neighbourhood. The tests showed that arsenic contamination was 18 times greater than the regulated level. Locally, cancer rates are 45 per cent higher than the Nova Scotia average.

Last week, the Minister of the Environment announced that governments would spend $62 million on a preliminary clean-up of this site - the site that three years ago her predecessor described as "Canada's national shame." The preliminary clean-up will cost the federal government $37.9 million.

We can act to prevent pollution, or we can wait until pollution compromises our health, and then we can spend literally scores of millions of dollars to begin to address the problem, not counting the health care costs, the costs of lost productivity, or the costs of disrupting families that may never be accurately tallied.

Last month, too, the Dene First Nation asked for federal help to clean up 260,000 tonnes of arsenic trioxide stored underground at the contaminated Giant Mine in Yellowknife. Here, too, cancer rates are abnormally high among 1,145 members of two Dene communities.

Meanwhile, a plastics firm in Edmonton emitted a black cloud over its neighbours - the eighth pollution incident at the plant in five months. Neighbours say many people are suffering from bronchitis or allergy problems.

A report from the David Suzuki Foundation found that 1,900 Montrealers are dying prematurely every year from air pollution.

Researchers at the University of Buffalo found that women who eat Lake Ontario fish have up to 30 per cent higher levels of PCBs in their breast milk than women who do not eat the fish. Six years ago, a task force to the International Joint Commission reported similar findings. It also reported the effects on children who were exposed to these toxic substances in the womb. Their birth weights were lower, their heads were smaller and, by age four, they showed signs of retarded growth and poorer short-term memory.

Every one of the situations I have described is intolerable, especially to the people who are paying the price of pollution with poor health and shortened lives. It is no exaggeration to say that thousands of Canadians know personally what pollution does to their families.

A recent poll for Quebec's Manufacturers and Exporters Association showed concern for the environment again at the top of the list, ahead of employment. Canadians do not need to be convinced. They need us to wake up. They need us to listen, and they need us to act.

The government is fond of saying that Canada is the best place in the world to live, and it is, but here is what some are saying about our record on pollution prevention:

A recent study in the British Journal of Political Science ranked Canada third from the bottom among 17 industrial countries on pollution control. Only Spain and Ireland have worse records in reducing emissions of common pollutants.

Our own Environment Commissioner pointed out that we have 23,000 chemicals in use in Canada, but have reached firm conclusions on the effects of just 31 of them. We have regulated none of the substances that for years have been on the priority list for control measures. By the year 2000, only 69 will have been assessed for their toxic effects. Of 22 industrial countries, only Canada and the Slovak republic do not collect data on pesticide sales. We are just beginning to give thought to a method of collecting information.

Last month, the head of New York State's energy committee, the state attorney-general, the state branch of the American Lung Association and nine U.S. groups sent letters to the Ontario premier. They complained that Ontario's feeble smog regulations and lax enforcement are contributing to their air pollution and health problems. For two years running, Ontario has placed third, just behind Texas and Louisiana, in the annual ranking of North America's worst polluting states and provinces.

Put bluntly, this is the situation with which we must deal. The question is: Can Bill C-32 do the job? Is it much better, or just marginally better, than the act we now have in place, or is it, in fact, worse? Is the fine rhetoric in the bill's preamble followed up with strong and effective measures that empower the government to prevent pollution? Frankly, I am not convinced that it is, although there are some good new provisions in the bill. The new enforcement provisions; the new, albeit limited, powers for citizens to call for investigations or take polluters to court if the government fails to act are welcome improvements. So, too, are the new time limitations imposed on the government to at least take a cursory look at the 23,000 substances in use in Canada. However, I share the concern of some who have followed this legislation for more than a decade and are concerned that Bill C-32 could make matters worse.

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In mid-May, soon after the government introduced its latest amendments at report stage in the Commons, Paul Muldoon, Executive Director of the Canadian Environmental Law Association, was interviewed on CBC's This Morning. He said that the existing CEPA gives the Minister of the Environment the authority to do the right thing. He went on to say:

This bill complicates her life, complicates the bureaucrats life to such a degree that I think it hinders the kind of things that we have to do to protect the environment from dangerous toxic substances.

To decide whether that accurately sums up the situation, the Standing Senate Committee on Energy, the Environment and Natural Resources must take a very thorough look at the bill.

At this point, it is helpful to remember the history of this legislation. The original bill was introduced and passed in 1988. It required a mandatory five-year Parliamentary review. We are already late in making the changes that the review should have prompted.

Looking back, we can agree that the original act was a good first step. Knowing what we know now, we can agree it needs improvement. A dozen years ago, we did not have the scientific knowledge that we have today about persistent toxic substances that build up in the food chain. A dozen years ago, we were only beginning to see the effects of gender-bending chemicals on wildlife. We did not face the great unknowns about the products of biotechnology and their potential to proliferate in the environment, nor did we face questions about their safety in foods.

We certainly did not imagine that 11 years down the road, only 31 of 23,000 chemicals in use in this country would be assessed for toxicity. That has been one of the acts major shortcomings.

This bill promises to complete part of the task within seven years of the bills passage. That first step is to determine which of those 23,000 chemicals require a full assessment. Officials will be required to determine whether the substances are persistent in the environment, whether they build up through the natural food chain, whether there is a likelihood that people and wildlife will be exposed to them and whether they may be toxic. That is it, that is all that is required of the government within the first seven years. It is a fallacy to suggest that all 23,000 chemicals will be fully assessed for toxicity. The painstaking work of assessment for CEPA toxicity will only be done on the short list of those 23,000 chemicals and likely will not be done expeditiously.

The bill also imposes time lines after the Ministers of Health and the Environment have decided that any particular substance is toxic and the question of listing it goes to cabinet. That is another good feature of the bill introduced by the Commons Environment Committee. It is better than the regulatory limbo that has existed under the current act. However, the process created in Bill C-32 will not be speedy. We should not be mistaken about that fact that the initial look at 23,000 substances does the job. It does nothing but classify those substances. It does nothing to curb them.

In its report four years ago, the House of Commons committee proposed a number of other remedies to the weaknesses in the current act. The government did accept some of the committees good ideas. It accepted, for example, the suggestion that industries are required to develop pollution prevention plans for some substances, plans which the committee said would allow industry to exercise more initiative and reduce costs. It accepted the idea that citizens have the right to press the government to act, by demanding and getting investigations. It accepted the idea that there are some man-made toxic substances that require special treatment.

These chemicals persist in the environment for many decades and bioaccumulate. They begin as infinitesimal amounts from countless, far-off sources and come together in plants and animal fat to the point that they are dangerous to anyone who eats meat or fish. We are seeing that now in the Arctic as well as Great Lakes fish. Another participant at the eco-summit pointed out that concentrations of toxic substances in the staple foods of people in Arctic communities are approaching dangerous levels.

The government accepted some good principles and then it lost its resolve to do much of anything about them.

Honourable senators will remember that Bill C-74 died on the Order Paper. This bill, when it came before the House of Commons Environment Committee, more than a year ago, was a ghost of a bill in comparison to the committees recommendations in "Its About Our Health."

The weakness of the bill had nothing to do with any restraint on the federal government's constitutional power to act. The Supreme Court made a strong ruling in that regard after Hydro Quebec and several provinces attempted to gut the existing CEPA. Many who listened to the government lawyers arguments frankly wondered whether the government wanted to win. Still, the courts ruling two years ago was, and is, very significant. In its majority decision, the court said:

...pollution is an evil that Parliament can legitimately seek to suppress. Indeed...it is a public purpose of superordinate importance, it constitutes one of the major challenges of our time. It would be surprising indeed if Parliament could not exercise its plenary power over criminal law to protect this interest and to suppress the evils associated with it by appropriate penal prohibitions.

The federal government shares with the provinces a duty to prevent pollution. However, when push comes to shove, as it did two years ago, the federal government has the authority to act.

As soon as the government received that clear message they brought in the harmonization accord, which is entrenched in Bill C-32. I want to return to the accord in a few moments. Suffice it to say, it is another example of the current government's lack of political will to protect the environment through national standards, through enforcement or through legislation.

The present bill was referred to the House of Commons committee some 14 months ago, on April 28, 1998. The committee held almost 60 days of hearings, 37 of which were in clause-by-clause debate over more than 400 amendments. Some very dedicated committee members on the government side and from opposition benches spent 93 hours alone on that job, making compromises, trying to return balance to a bill that would satisfy most people.

During the course of that debate, the Department of the Environment went so far as to construct a spreadsheet ranking industry's opposition to changes proposed by other witnesses or by committee members with the help of parliamentary staff. As far as we know, there was no departmental spreadsheet ranking environmental groups' concerns about industry proposals. It was quite clear that the government wanted a business-as-usual approach. To improve the bill, some government back-benchers and the chairman had to vote with opposition members.

It is quite unusual for a former federal environment minister, a former provincial environment minister and a former parliamentary secretary of the environment to the minister, all government members, to feel compelled to vote against a bill.

No sooner was the bill out of committee than the Friday group, a consortium of industry representatives, led by the Canadian Chemical Producers' Association began one of the most irresponsible, fear-mongering campaigns seen in years. Among other things, members of that group suggested that unless Bill C-32 was changed at report stage, it would shut down wood-burning stoves or municipal waste incinerators in Newfoundland's fishing villages.

Let me tell you one of the things a strong CEPA could and should do. It could and should identify dioxins, along with PCBs, as persistent pollutants that we need to eliminate. Under the existing CEPA, we have greatly reduced emissions of dioxins and furans in pulp mill effluent and put a stop to new uses of PCBs. The Chemical Producers' Association is quite correct that wood-burning stoves and municipal waste incinerators are sources of dioxins. If we never set the goal of eliminating them, and move step by step towards it, what will be the result?

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I can tell honourable senators exactly what that business-as-usual approach would mean in the Hamilton area. Last month, the Hamilton-Wentworth regional council voted to save slightly more than one-tenth of one per cent of its municipal waste budget by increasing the amount of garbage burned in its incinerator. The expected result is a 50 per cent increase in dioxin emissions from the aging plant, making it the country's largest municipal source of dioxins.

A study reported in the U.S. Journal of the National Cancer Institute in the same month found that workers exposed to dioxins have a 60 per cent greater risk of dying of cancer than the general population. These bioaccumulative chemicals have also been linked to genetic abnormalities and reproductive disorders.

Despite what the Friday groups says, no minister in his or her right mind would target wood-burning stoves before addressing the major sources. As for garbage burning in Newfoundland outports, in what are essentially screened open pits, much of the problem can be corrected simply by sorting out the plastics before the garbage is burned.

When the former government got tough on dioxins and furans in pulp mill effluent, it heard the same industry's cries about exorbitant costs and the need to preserve international competitiveness. The government gave the industry enough time to adapt. The goals were exceeded and new technology was developed. Some of the newest mills now put no effluent into rivers and streams. As a result, they have attracted customers from Europe precisely because they are not polluting. Those who read the Harvard Business Review and Michael Porter, the great guru of comparative advantage upon whom business often calls, will know that he advocates that being green is being competitive, which is a good measure to cut the bottom line.

The current government, it seems, has no memory. Instead, it is listening to fear-mongering. Its amendments at report stage weakened the bill. Let me cite one example. Another item high on the Friday group's wish list of changes were amendments that altered who would decide that pollution prevention plans be ordered when pollution damaged international waters or crossed borders and contributed to air pollution. The Friday group issued the hyperbole that unless changes were made, "...all Canadian businesses that emit something that contributes to some pollution in the U.S. will have to go through the paper burden of preparing pollution prevention plans." It wanted cabinet to have the say on whether the Minister of the Environment could require pollution prevention plans for international air and water pollution.

The Friday group's choice of words is revealing. They say that pollution prevention plans are only paper-burden. The industry missive did not talk about acting on them.

It is important to remember that we are not talking about banning substances, or the full weight of regulatory action. We are talking about that intermediate step between doing nothing and the heavy hand of regulation. We are talking about requiring companies to draw up plans to prevent pollution. The situation would apply to substances covered by international agreements that cabinet had already approved. Yet, the Friday group wanted a further check on the powers of the Minister of the Environment by giving cabinet colleagues the final say on whether any order for a plan should be issued. Thus, the government introduced the amendment which is now part of the bill.

If a camel is a horse designed by a committee, then Bill C-32 is a camel with its humps removed and little capacity to store water. I do not think that is what we want to ride into the next century.

I have gone into some detail on what happened with this bill before it reached us because I believe it is germane to how we deal with it. I now want to address some of the important things this bill would do, and some of the things it would not do.

First, it would mean that CEPA is no longer the chief federal law on new toxic substances or products of biotechnology entering Canada. Its role would be that of a residual statute. It would apply only if another statute did not have "equivalent" regulation. It would not be up to the Minister of the Environment or the Minister of Health to decide whether another regulation did the job properly. It would be up to cabinet.

The Environment Commissioner's recent report is very telling in this regard. He found that budget cuts and departmental in-fighting have paralysed the government's capacity to manage pesticides and other toxins. Pesticides are not regulated by CEPA, which is a problem. The Environment Commissioner cited instances in which departments could not agree on whether substances were toxic, or even how to interpret statutes. In one case, departments contradicted one another at an international conference. Surely we do not want to compound the potential for disagreement and delay by giving more powers to other ministers and other statutes. Surely, when it is a matter of protecting health and preventing pollution, the decision to regulate should rest with the Ministers of Health and the Environment. It should not be up to the so-called industry departments of natural resources, agriculture, or industry, trade and foreign affairs.

Second, as I mentioned earlier, Bill C-32 enshrines the Harmonization Accord without specifically mentioning it. CEPA regulations would not apply wherever provinces or territories have "equivalent" regulations. Harmonization is a disaster on two scores. We know already that some provinces, notably Ontario, are not enforcing their existing regulations. Last year in that province - which is the province in Canada with the worst air - air pollution violations almost doubled to more than 3,000. Only two charges were laid. The companies not in compliance with regulations included Ontario Hydro and the National Research Council of Canada.

Part of the reason for this lax enforcement is very simple. Since 1995, the Ontario environment ministry staff has been reduced by almost 40 per cent. Just as important is a very recent Federal Court ruling on the accord. The court was asked to rule on whether the government had unlawfully ceded power to the provinces in January 1998. Federal Court Judge Barbara Reed found that the accord was so devoid of factual content that it was impossible to decide what it meant. She found that some of the provisions of the accord were inconsistent with each other. She found that the pollution standards agreement, in particular, suffers from its inchoate nature. Judge Reed said that Canadians should know what the accord means in practice, but that is not possible. She also said that the answers must await more factual content, something which I find most troubling.

How can we, in all conscience, enshrine in law an agreement so devoid of content that a court cannot determine what it means? What sort of shell game are we being asked to make part of the statutes of Canada?

Third, there is the matter of virtual elimination. The concept is not new, although the words may have that high-tech ring. Essentially, it means doing all we can to rid our environment of the worst chemical nasties - those that persist, build up in the food chain, and are toxic. Some, although not all of them, also disrupt the endocrine systems of people and species in the wild. Among them, dioxins, DDT, PCBs, lead and mercury are known to be gender benders.

Nine years ago, the International Joint Commission reminded both Canada and the U.S. that they had agreed to virtually eliminate all persistent toxic substances. We agreed under the Great Lakes Water Quality Agreement. In its eighth biennial report released three years ago, the IJC had this to say about virtual elimination:

There are various interpretations of virtual elimination and zero discharge. Virtual elimination is not a technical measure but a broad policy goal. The goal will not be reached until all releases of persistent toxic chemicals due to human activity are stopped. Zero discharge does not mean simply less than detectable. It does not mean the use of controls based on best available technology, or best management practices that continue to allow some release of persistent toxic substances, even though these may be important steps in reaching the goal. Zero discharge means no discharge or nil input of persistent toxic substances resulting from human activity. It is a reasonable and achievable expectation for a virtual elimination strategy. The question is no longer whether there should be virtual elimination and zero discharge, but when and how these goals can be achieved.

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According to Bill C-32, apparently, it will not be soon and probably it will not be ever. The version we have before us would make the steps towards virtual elimination synonymous with the end-point. It is a significant aspect of the bill on which the industry went ballistic. Industry has known for almost a decade that we are party to an international agreement that requires that we enact laws that stop putting these persistent poisons into the environment. When push came to shove, government retreated.

Then there is the matter of endocrine disrupters - those gender-bending chemicals that mimic estrogens and have demonstrably reduced the size of male genitalia, lowered sperm counts, and caused gross birth abnormalities among wildlife in the Great Lakes region and elsewhere. Scientists have been documenting the effects for years. Scientists also tell us that sperm counts in the human species are declining.

Several years ago, a scientist testifying on the subject before the U.S. Senate committee said rather dramatically: "Senator, you are likely half the man your father was." We can laugh, but we cannot escape the fact that more couples are turning to fertility clinics. The waiting lists are growing.

Six years ago, a task force to the IJC documented the studies that showed mammals experienced decreased fertility, feminization, and their immune system response was compromised by these endocrine disrupters. It is sheer arrogance to believe that people are not affected, too. More positively, a British research group has recently published its findings that it has a cheap and easy way to remove estrogen-mimicking substances from water.

What has been the government's and industry's response to any proposal to include gender-bending chemicals in CEPA? It wants to limit the government's role to information gathering, and it is bickering about the definition of these compounds.

Finally, there is the question of how Bill C-32 deals with the rights of aboriginal peoples. The bill is sprinkled with references to participation by aboriginal governments - and in some instances to aboriginal people in several clauses - in establishing a new national advisory committee or in administration agreements. The act clearly defines aboriginal governments and aboriginal land, but it does not define aboriginal people, perhaps quite deliberately.

I have a letter from a lawyer who is highly respected in this area, and I should like to share a portion of it with you. In the opinion of this lawyer, while Bill C-32 may not be unconstitutional, it continues the mistaken view of government policy that there are only two major groups of aboriginal people in Canada - Indians and Inuit. It is silent on the Métis. She notes that in 1982 the rules of the game were supposed to change. The Constitution was amended to state that Canada's aboriginal peoples include the Métis. We heard something about this in the Forestry Committee. After 1990 and the Sparrow decision of the Supreme Court, governments began to recognize Indian rights as legal obligations, not just moral and political obligations, but for the Métis, nothing has changed at all. Nothing has changed despite the Delgamuukw decision affirming the government's fiduciary obligation to consult and in some cases obtain the consent of the aboriginal people concerned before their interests are affected by governmental action.

The new measure in Bill C-32 perhaps could be challenged under section 15 of the Charter, if it were not for the fact that Bill C-32 has a very narrow definition of aboriginal government and aboriginal land, and in that way applies to a portion of the aboriginal peoples of Canada. To quote the lawyer who wrote to me:

The government appears to be quite even-handed in its non-inclusion of any meaningful role of most of the Aboriginal peoples of Canada in this bill.

I think this is a matter the Senate can and should address.

Honourable senators, I am well aware of the information the government is issuing that claims this bill will strengthen the current act. Some of what it tells you is correct, but the bill falls so short of what is needed that a former federal environment minister, a former Quebec environment minister and a former parliamentary secretary could not endorse it. They voted against the eleventh-hour government amendments to weaken the bill.

In the end, the same very knowledgeable members of the other place could not in all conscience agree that a few weeks of powerful industry lobbying should undo many months of committee deliberation.

Here is what news reports quoted the former environment minister as saying. My guess is that this is Charles Caccia, but I do not know.

This is still a far cry from the Red Book promise. This bill could have been a reasonably good one if improvements made in committee had not been dismantled, if business interests had not been put ahead of public health, and if the official opposition had performed an effective role, which it didn't.

Honourable senators, if ever there was a bill that required sober second review by the Senate, this is it. For centuries, the warning signs that toxic substances were damaging health and shortening lives have come from workers who were daily exposed to them. Today, the asthma rates and the effects of persistent pollutants on four-year-old children tell us something different is happening. It is not just the industrial workers who are "the canaries in the mine shaft." Increasingly, it is our children who are giving us the warning that we are poisoning the air, soil, water and sources of food. Before we approve this legislation, we must be very certain that Bill C-32 is the best that we can do for them. Whatever the merits of this bill, it is absolutely necessary that the Senate committee take the time to examine it and see how we can approve it.

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

Motion agreed to and bill read second time.

Referred to Committee

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

On motion of Senator Butts, bill referred to the Standing Senate Committee on Energy, the Environment and Natural Resources.

Criminal Code

Bill to Amend-Second Reading

On the Order:

Resuming debate on the motion of the Honourable Senator Carstairs, seconded by the Honourable Senator Maloney, for the second reading of Bill C-79, to amend the Criminal Code (victims of crime) and another Act in consequence.

Hon. Marjory LeBreton: Honourable senators, I am very pleased to be speaking to you today about Bill C-79, to amend the Criminal Code for the benefit of victims of crime. The measures proposed by this legislation are very positive. The issue of victims' rights is most deserving of growing public interest, and it is about time. We are fortunate to be living in a society that takes a progressive view of matters that affect our criminal justice system, and the importance of this bill calls for us to take a non-partisan approach in our examination of it.

As many of you may know, the subject of victims' rights and related issues is one in which I have long held an interest. After I was summoned to the Senate in 1993, I decided to further inform myself of the impact, short-term and long-term, on victims of criminal acts.

In August 1994, I attended a CAVEAT conference in Hamilton, Ontario, organized by Priscilla de Villiers. I sat through the sessions, listening to people who had been faced with the horrific reality of a violent criminal act. I was overcome with sadness when person after person told their stories - the lack of support, the frustration with the courts, and the feeling that the perpetrator enjoyed more rights than the direct victim or victims and the other victims left behind to deal with the consequences of these tragedies. As I sat there, I could not imagine how they managed to cope. Little did I know that I and members of my own family would be in the same situation a short year and a half later.

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I would ask honourable senators to think about victims' rights, and if they have not been through this sort of situation themselves, to try to imagine what they would do. Think of the obstacles that the victims must overcome as they seek justice in the courts. We must recognize that, as parliamentarians, there is much more we can do to respond to their needs. The enactment of this bill comes just in time, and indeed is very important to the victims of crime who wish to have a say about how we can protect them and guarantee their safety.

In June of 1998, after several years of waiting and a number of false starts, the House of Commons Standing Committee on Justice and Human Rights responded to the request made by the Minister of Justice and initiated consultations, the ultimate aim of which was to respond to victims' needs. On October 26, 1998, after five months of consultations, the committee's report, entitled "Victims' Rights - A Voice, not a Veto," was tabled in Parliament. It contained 17 recommendations which addressed a variety of topics, including funding for victim assistance programs, the creation of a federal Office for Victims of Crime, which I will return to later, and amendments to the Criminal Code, the Young Offenders Act, and the Corrections Conditional Release Act, to ensure that the courts respond to the needs of victims. The report received the support of all political parties in the House of Commons.

In December, the federal Minister of Justice tabled her response to the committee's report. In it, she outlined the strategies that the federal government intended to follow in the months to come. She accepted the recommendation for the creation of a Strategic Centre for Victims of Crime to oversee and ensure in future that all political and legislative initiatives of the federal government take into account the views of victims of crimes. It will be responsible for coordinating and enhancing federal initiatives relating to victims and will become a centre of expertise as new issues and trends emerge relating to rights, laws and services that affect victims across Canada.

However, the minister did not respond to recommendation number 2 in the report, which calls for the creation of a federal Office for Victims of Crime within the Department of Justice with the mandate to provide information, advice and services directly to victims. The proposed model for this Office for Victims of Crime was based on the Office of the Federal Corrections Investigator, whose responsibility it is to respond to requests and needs of inmates serving their sentences in federal penitentiaries.

The reason given for not addressing the recommended Office for Victims of Crime was that to do so might infringe on provincial jurisdiction. It is true that a number of provinces have appointed a director of victims' services, and in other provinces, such as British Columbia and my own province of Ontario, a separate division has been created within the Ministry of the Attorney General with the necessary resources and staff. My own provincial MPP, John Baird, played an integral role in this important initiative in Ontario, and I applaud him and the Ontario government for showing leadership on this issue.

Other provinces also have separate victim services sections. Quebec, in particular, was opposed to the creation of this office, claiming a duplication of resources in terms of services to victims which would infringe on jurisdictional authority. The Bloc Québécois here in Parliament also questioned the creation of the Strategic Centre for Victims of Crime, saying that since Quebec had established its own victims of crime assistance office, this would infringe on its jurisdiction.

Honourable senators, the principles and provisions of federal statutes obviously must not interfere with the division of powers, but the creation of a centre of this nature can be done without infringing on provincial jurisdiction, and in so doing we will provide all the provinces and territories with ongoing, up-to-date information, allowing them to stay current with what is taking place across the country.

From a moral standpoint, the situation faced by victims surely goes beyond questions of the divisions of powers and partisan politics. Cooperation between the federal government and the provinces, within their respective jurisdictions, must be achieved for the benefit of victims of crime. The federal government has the responsibility to ensure that action is taken, and that the provinces have the financial resources to implement the new provisions of Bill C-79 and the statement of principles.

Let us not forget for one moment that this bill is intended to respond to victims' expectations and needs, victims having too often been shunted aside at trial for procedural reasons. The members of the Legal and Constitutional Affairs Committee must seek assurances from the minister that the provinces will have the support and resources needed to implement Bill C-79.

Honourable senators, Bill C-79 does respond to seven of the 17 recommendations in the committee report, primarily those aimed at amending the Criminal Code so that it will better meet the needs of victims in criminal proceedings in the courts, something that can be psychologically very difficult for many victims and, by extension, their families and close friends. Even the principles in the bill respecting the youth criminal justice system, which we shall soon be examining, recognize the important role that victims have to play in the youth justice system, and victims' needs for information regarding judicial process.

Honourable senators, the bill contains the following provisions: The preamble to the bill states the federal government's commitment to responding to the concerns and needs of the victims, and it recognizes that the cooperation of victims is essential to the investigation and prosecution of offences. In addition, it supports the principle that victims of crime should be treated with courtesy, compassion and respect by the justice system. It recognizes that, while the Crown is responsible for the prosecution of offences, the views and concerns of victims should be considered in accordance with the prevailing criminal law, particularly with respect to decisions that may have an impact on their safety, security or privacy. It also states that it wishes to encourage and facilitate the provision of information to victims regarding the criminal justice system and their role in it.

Bill C-79 includes a provision for definition of the word "victim," which includes the victim of an alleged criminal offence, to be added to the Criminal Code. There are those who would have preferred that expression to be defined in accordance with the definition of "victim" in section 722 of the Criminal Code, which applies solely to the right of a victim to make a statement at a hearing on the sentencing of an accused. It defines a victim as a person who has suffered physical or emotional loss as a result of the commission of an offence. The members of the Standing Senate Committee on Legal and Constitutional Affairs will also have to consider the fact that there are two definitions of "victim."

Bill C-79 also offers protection for young people aged 18 years and under who have been victims of sexual assault or violent crimes by imposing restrictions on cross-examinations conducted by accused persons representing themselves. An accused will no longer be able to cross-examine at the preliminary inquiry or trial if the victim or witness is under the age of 18. The judge will now need to appoint a lawyer who will conduct the cross-examination.

The bill also provides that the court will have to protect the identity of victims of sexual assault or any other crime that the accused has committed against them. In addition to sexual offences, this prohibition will also extend to offences committed by persons in positions of authority over children. It will also cover cases where two or more offences have been committed and are being dealt with in the same proceeding.

The report of the Standing Committee on Justice and Human Rights of the other House pointed out that there were flaws in the Criminal Code as regards the provisions that allow police officers or other judicial officers to release a suspect or an accused while awaiting the accused's first appearance before the court, or while awaiting trial. The amendments proposed in Bill C-79 will mean that a judicial officer, a peace officer, a judge or a justice of the peace must have regard to the safety of the victims or of the witnesses to the offence in making any decision regarding releasing a suspect on bail. The bill also provides that, when an accused is released while awaiting trial, the judge must take into consideration any evidence relating to the need to protect the victim's safety and security. On this point, it provides that the judge must consider making it a condition of release that the accused be ordered not to communicate, directly or indirectly, with the victim or witnesses, and imposing any other condition necessary to ensure their safety and security.

The proposed changes will mean that greater consideration will be given to the special concerns of the victim or witnesses, and those concerns will be given greater prominence in decisions regarding what special conditions will be placed on release on bail, particularly with respect to offences regarding possession of firearms and criminal harassment.

As honourable senators know, the victim impact statement is a written statement prepared by the victim which is considered by the court at the time the offender is sentenced. It allows victims to participate in the proceedings by describing the impact of the crime on their lives and the lives of their family members. The effect of this important amendment is that victims will be allowed to read their statements at the time of sentencing if they so desire. This is a major event because, at present, the judge is required to take the written statement into consideration but it is at the judge's discretion as to whether to permit the victim to read it. This created a situation of disparity and inequality from jurisdiction to jurisdiction, much to the extreme distress of many of those who were denied the opportunity to have their say in court.

(1750)

With these changes, the judge will be required to ask the victim, before passing sentence, whether the victim has been advised of the opportunity to make a statement. The court may also grant adjournments to permit victims to prepare statements or to present further evidence regarding the impact of the crime committed. The court will also be able to specify that information provided by victims is allowed to be presented orally or in writing at the hearings to determine parole eligibility dates for accused persons sentenced to life imprisonment with no eligibility for parole for 15 years. At present the Criminal Code stipulates that any information provided by the victim must be taken into consideration but, in fact, it must be pointed out that in practice many victims have been discouraged from presenting oral statements.

Honourable senators, I believe it is appropriate to proudly say, in a non-partisan way, that a number of the measures contained in Bill C-79 were enacted by the previous government. I would cite but a few examples: First, in 1988, Bill C-89 was enacted by Parliament for the purpose of ensuring that the needs of victims of crime were taken into consideration during the trial and in sentencing. One of the things it did was to provide for a "victim fine" surcharge to be imposed on a convicted offender. That measure was instituted to enable the provinces to use the money to provide programs, services and assistance to the victims of crime in provinces and territories. It also authorized the use of victim impact statements which were to be taken into consideration at the time of sentencing.

Second, the government made a fund available to the provinces to assist in developing programs and services for victims. That fund could also be used to train employees of the courts about victims' rights, or to establish information programs for members of volunteer organizations working with victims. I, myself, personally benefited from such an agency working in the courts here in Ottawa.

As well, I was proud to have played a role in the development of our election platform in the 1997 general election when we proposed a bill be drafted to create a victims' charter of rights which guarantees victims the right to better information and greater participation in court proceedings.

As I said at the beginning, I wish to refer back to the creation of an office for victims of crime. As many of you know, honourable senators, I am on the National Board of MADD Canada, Mothers Against Drunk Driving. MADD would ask that the following be considered when developing the roles and responsibilities of the new Victims' Policy Centre. I would ask that these be taken into account when this bill is before committee, and that the committee seek the following assurances of the minister:

First, in establishing the office, victims need more than a reference-and-resource centre. The office must be a victim's point of entry into the federal government, which provides an individual with teeth to cut through the bureaucratic mazes and processes.

Second, the office should act as a vigilant watchdog of government activities to advocate victims' rights throughout government processes. It should be established as a source of information for government departments and agencies on the rights of victims of crime.

Finally, the office must act as a liaison between government and victims' advocacy stakeholders. The office should facilitate an annual round table on the rights of victims of crime at which formal dialogues with national stakeholders and advocates could be established and maintained.

Honourable senators, as I said earlier, the tragic events that victims are forced to endure leave them with deep, psychological scars that will stay with them forever, after any physical injuries have healed.

As well we must not lose sight of the fact that these sad events not only affect the lives of the victims. They also impact on victims' families and friends, the people who often support them throughout the court proceedings; proceedings which, most of the time, are very hard on them. For the victim, these people are often the only people they can truly trust.

Unfortunately, in recent years, victims of crime and the associations that advocate for them have lost confidence in the ability of our judicial system to genuinely pay attention to their experiences. The result has been that a growing number of victims do not file charges against the people who have assaulted them. Victims of crimes may be reluctant to pour out their hearts, fearing that the courts will probably not listen to what they have to say.

Too often, especially to victims, our justice system seems to be concerned solely with the rights of the accused person. The preamble to Bill C-79 seems to be intended to restore a balance between the rights of the accused and the rights of the victims. Let us hope that the courts will pay attention to that new balance.

The last thing I want to say is that a tragic event of being a victim of crime can also affect an entire community, a community that may fear for its safety. Accordingly, honourable senators, the concept of who is a victim is much broader than we might think at first glance.

In closing, I believe this bill is definitely a step in the right direction towards helping victims of crime to obtain justice and to move on from the unfortunate experiences that they have had forced upon them.

In my own case, I and my family did have the opportunity to read our victim impact statements. I cannot imagine what it would be like to be denied that right or, worse, to be subject to cross-examination. That has happened across this country in different jurisdictions.

I believe this bill will allow other victims to be accorded the same rights. I can attest that having your say in court goes a long way in helping victims of crime work their way through unspeakable tragedies.

The Hon. the Speaker: If no other senator wishes to speak, I will put the motion.

Is it your pleasure, honourable senators, to adopt the motion?

Hon. Senators: Agreed.

Motion agreed to and bill read second time.

Referred to Committee

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

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

Business of the Senate

Hon. Sharon Carstairs (Deputy Leader of the Government): Honourable senators, before I begin my remarks on the next item of business, I think it is agreed on both sides that we will not see the clock at six o'clock?

Hon. Noël A. Kinsella (Deputy Leader of the Opposition): That is agreed.

The Hon. the Speaker: Is it agreed, honourable senators, that we shall not see the clock at six o'clock?

Hon. Senators: Agreed.

Criminal Code

Bill to Amend-Second Reading-Debate Continued

On the Order:

Resuming debate on the motion of the Honourable Senator Lavoie-Roux, seconded by the Honourable Senator Butts, for the second reading of Bill S-29, to amend the Criminal Code (Protection of Patients and Health Care Providers).-(Honourable Senator Carstairs)

Hon. Sharon Carstairs (Deputy Leader of the Government): Honourable senators:

Whereas the Special Senate Committee on Euthanasia and Assisted Suicide, appointed on February 23, 1994, addressed in its proceedings the medical practices of the withholding and withdrawal of life-sustaining treatment and the provision of treatment to alleviate suffering that might result in the shortening of life;

And Whereas, in its report entitled "Of Life and Death," dated June 6, 1995, the committee recognized the existence of uncertainty within the medical profession and public of Canada regarding the legal consequences of these medical practices;

And Whereas the committee unanimously recommended that the Criminal Code be amended to allow health care providers to carry out these medical practices in certain cases without the fear of incurring criminal liability;

Now, Therefore, Her Majesty, by and with the advice and consent of the Senate and the House of Commons of Canada, enacts as follows...

This, honourable senators, was the preamble to the former Bill S-13, to amend the Criminal Code (protection of health care providers).

I introduced that bill during the last Parliament. The bill was intended to clarify the Criminal Code with respect to withholding and withdrawing of life-sustaining medical treatment and the provision of treatment to alleviate pain. Regrettably, in my view, it died on the Order Paper. Fortunately, with her Bill S-29, Senator Lavoie-Roux has revived that debate in this chamber. I am pleased to take part in that debate.

However, honourable senators, one of the changes I would like to see made to this bill in committee would be the reintroduction of the preamble. I know it is not generally considered good legal practice, if you will, to have preambles to bills. We have just seen, and Senator LeBreton referred to it, that there is a preamble to Bill C-79, the victims' bill, and the reasons were outlined as to why that preamble was included.

(1800)

I would like to see the preamble back in this bill for two reasons: The Special Senate Committee study on Euthanasia and Assisted Suicide is, I believe, one of the best pieces of work that we have done in this chamber, and I would like this chamber to be accorded recognition for it. Putting the preamble back in the bill is one means by which we could gain that recognition.

I also want the preamble there because, although the preamble it is not an integral part of the bill, it would alert those looking at the bill to review the Senate study, and that might help them form their judgment on this legislation. I hope that when the committee is studying this bill, they will make that change.

As Senator Lavoie-Roux stated in her remarks, this legislation is long overdue. This committee report has been around for four years. To this time, the government has chosen not to respond. We should all congratulate Senator Lavoie-Roux for bringing it once again to our attention.

However, I do have some concerns about the legislation, and I wish to address them tonight. The definition of "health care provider" in clause 2 of the bill is designed to set the parameters of who will be covered by this Criminal Code defence. A health care provider is defined as:

(a) a medical practitioner duly qualified under the laws of a province...

(b) or nurse or other health care professional who, acting under the supervision and on the instructions of a medical practitioner...or

- a medical practitioner, nurse or health care professional. In effect, a person caring for their spouse at home would be, in my view, covered by the bill provided they acted on the instructions of a nurse or other health care professional, who themselves are acting on the instructions of a medical practitioner.

In this way, it seems to me that the bill provides for a two-tier system of responsibility. I am concerned that this would lead to a very confused situation. How is the caregiver supposed to know whether the nurse instructing him or her was acting on the instructions of a doctor? Furthermore, the bill does not define "health care professional." Presumably, an orderly is a health care professional. This bill would protect a person acting on the advice of an orderly who was acting on the advice of a doctor. I am not sure that is exactly what Senator Lavoie-Roux intended by this provision and it is one I should like the committee to look at in detail. In my view, it would be preferable to provide the defence to any person who was acting on the advice of a medical practitioner. Perhaps the committee would consider an amendment to the bill to clarify this definition.

Clause 2 goes on to define "life-sustaining treatment" as:

...any medical or surgical practice or procedure intended to sustain, restore or supplant a vital function in order to postpone death.

The definition of "life-sustaining treatment" in this bill does not specifically include artificial hydration and nutrition. Members of the special committee will remember that this was an issue of considerable debate during our deliberations. In the end, the committee recommended that it should be considered treatment, and that the withholding and withdrawal of it is as acceptable as the withholding and withdrawal of artificial respiration, blood transfusions, or CPR.

However, some witnesses, such as Canadian Nurses for Life, held the view that there is a difference between these two types of actions. They said that withholding or withdrawing life support is ethically acceptable but, in their view, this did not include artificial hydration and nutrition.

For greater certainty, I would support an amendment to Bill S-29 to include artificial hydration and nutrition explicitly in the definition of life-sustaining treatment. This would be in line with the special committee's recommendation in "Of Life and Death," the report of the committee.

Honourable senators, the Criminal Code does not prohibit palliative care, even if it hastens the death of the patient, so long as that care is carried out in accordance with generally accepted medical practice. However, many health care providers are hesitant to provide adequate palliation and pain control because they fear criminal liability where the treatment shortens the life of the patient. This is the basis for the committee's recommendation that the Criminal Code be clarified in this respect.

Senator Lavoie-Roux has attempted to clarify it by adding a new section 45.3 to the Criminal Code. In my view, this new section, as drafted, will actually make it more difficult for patients to get adequate palliation and pain control. Section 45.3 would provide a defence from prosecution for a health care provider who administered medication to alleviate the pain or other symptoms of serious physical distress of a person if the person has given free and informed consent, if the primary intent is to alleviate pain, and if the health care provider acts in accordance with the relevant standards and guidelines established under the new section 45.5.

I was surprised to note that Bill S-29 makes no reference to pain control which may shorten life, which is the real issue before us requiring clarification. I urge the committee to study whether, by excluding a direct reference, the law is unnecessarily ambiguous.

Honourable senators, we must achieve a balance when we put in place safeguards for patients: too few, and we have not done our job to ensure that patients are receiving adequate palliative care; too many, and we are also jeopardizing adequate palliative care. If we make the process too cumbersome, or too ambiguous, we will have achieved nothing. Medical practitioners would still be reluctant to give adequate pain control which may shorten life for fear of prosecution. Surely avoiding this is the purpose of the legislation.

Bill S-29 requires consent in the presence of a witness before pain control can be administered. Of course I support the right of a person to be consulted about his or her medical care. However, I am concerned about the instances where patients cannot communicate their wishes.

Dr. James Gordon, a neurologist who appeared before the special committee, outlined cases such as "locked-in syndrome" where a patient is able to comprehend but unable to communicate except by eye movement or, in some cases, not at all, and cases where a patient does not speak any language known in the country and has lost the power of speech. I hope the committee will invite medical practitioners to address the question of whether this section will be too onerous.

Bill S-29 uses the term "free and informed consent." However, it does not include a definition. The courts have not defined the term "free and informed consent," although they have defined the term "competent." My concern, again, is that this section must use the appropriate language in order to make the bill effective.

The proposed section 45.4 of the Criminal Code sets out the alternative process for getting consent if the patient is unable to give it. The difficulty here is that the bill does not mention the family of the patient. Instead, it refers to tribunals and the courts. Furthermore, it points to the laws of the province, which differ widely, if they exist at all.

Finally, honourable senators, the bill provides for guidelines to be established which must be followed for the withholding and withdrawing of life sustaining treatment and for the alleviation of pain in order for the Criminal Code defence to apply. Guidelines are a good thing. In fact, the special committee recommended them.

Let me draw your attention for a moment to the areas in which the Minister of Health must make regulations according to the proposed section 45.5 in Bill S-29. The minister is to make regulations for identifying the circumstances in which medical and surgical practices and procedures constitute life-sustaining medical treatment, and for determining which medical and surgical practices and procedures involve the withholding or withdrawal of life-sustaining medical treatment. At present, these determinations are made by medical health practitioners.

How can the minister of health, in consultation with the provinces, make these regulations? Is he or she competent to do so?

The minister is to make regulations for determining reasonable dose limits for medication and for determining the circumstances in which it is ethical to exceed dose limits.

Honourable senators, how is it possible for the Minister of Health to set dose limits? Doctors themselves cannot set these limits. In fact, the amount of pain control medication a person can take is affected by a host of factors and is apparently unique to the individual, according to the evidence that the special committee heard. However, more important, the bill provides that the Minister of Health may adopt different regulations in each province. This raises an important constitutional argument. A Criminal Code defence should not be illusory.

I remind honourable senators of the Morgentaler decision. One of the reasons the abortion law was struck down was that the Criminal Code defence was not evenly applied across the country. In this case, the procedure differed from hospital committee to hospital committee. By allowing for different regulations in each province, we allow for a different federal criminal law in each province.

Honourable senators, let me be perfectly clear: The principle set forth in this bill is one that I strongly support. However, as the expression goes, the devil is in the details.

Senator Lavoie-Roux has indicated she is open to change. That is why I have been so forthcoming with the changes that I think need to be made to this piece of legislation.

Honourable senators, this bill seeks to amend the Criminal Code. In her closing remarks last week, Senator DeWare indicated that she would want this bill to go to the Standing Senate Committee on Social Affairs, Science and Technology. Honourable senators, I must say in the strongest terms that because this bill is an amendment to the Criminal Code of Canada, I am not able to support a recommendation that this bill go to the Social Affairs Committee. This bill must go to the Senate Standing Senate Committee on Legal and Constitutional Affairs after second reading. I hope it will go there very soon, and I hope that the committee will give it a thorough and complete study.

On motion of Senator Cools, debate adjourned.

International Search or Seizure Bill

Second Reading

On the Order:

Resuming debate on the motion of the Honourable Senator Beaudoin, seconded by the Honourable Senator Bolduc, for the second reading of Bill S-24, to provide for judicial preauthorization of requests to be made to a foreign or international authority or organization for a search or seizure outside Canada.-(Honourable Senator Carstairs)

Hon. Sharon Carstairs (Deputy Leader of the Government): Honourable senators, Senator Beaudoin's bill, to provide for judicial preauthorization of requests to be made to a foreign or international authority or organization for a search or seizure outside Canada is a most interesting piece of potential legislation.

Senator Grafstein indicated that he had some serious concerns about Bill S-24. He indicated that he believed that the bill did not meet the actual objectives set forth by Senator Beaudoin. However, it is the view on this side that this bill should go to committee and that it should receive the kind of study that Senator Grafstein raised in his speech, as well as to hear clearly from the sponsor of the bill, Senator Beaudoin, as to why he believes Senator Grafstein's arguments are not valid and that this bill does meet the objective as he has set it forth.

Honourable senators, there will be no further speakers from this side. If Senator Beaudoin wishes to conclude the debate, we would be pleased to have him do that today and then refer this bill to committee.

[Translation]

Hon. Gérald-A. Beaudoin: Honourable senators, I had occasion, in my speech on the substance of Bill S-24, to give the reasons why it would be advisable to pass this bill.

The bill is based on the dissenting opinion of two judges of the Supreme Court of Canada in the Schreiber affair. If a request to carry out a search or seizure is made within Canada, by a Canadian authority, a mandate is required. I believe that the same principle should apply in similar circumstances if the search or seizure is made outside Canada.

In other words, the purpose of this bill is to provide for judicial preauthorization of requests to be made to a foreign or international authority or organization for a search or seizure outside Canada, by the Attorney General of Canada or by a province.

[English]

As stated in Bill S-24, clause 3, before making a request to a foreign or international authority or organization for a search or seizure outside Canada for the purpose of the investigation of an offence, a competent authority shall apply to a judge or justice for an order authorizing the request. "Competent authority" means the Attorney General of Canada, the attorney general of a province, or any person or authority with responsibility in Canada for the investigation or prosecution of offences.

That is all I shall say, honourable senators, on Bill S-24.

Motion agreed to and bill read second time.

Referred to Committee

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

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

[Translation]

Shipbuilding Industry

Lack of Government Support-Inquiry

On the Order:

Resuming the debate on the inquiry of the Honourable J. Michael Forrestall calling the attention of the Senate to the federal government's lack of a national shipbuilding policy to support this industry with a view towards maintaining and advancing the degree of excellence and the technologies for which Canadians are historically renowned and in jeopardy of losing.-(Honourable Senator Bolduc)

Hon. Fernand Roberge: Honourable senators, I rise to speak today in support of my colleague Senator Forrestall, who called the attention of the members of this Chamber to the federal government's lack of a national shipbuilding policy to support this industry with a view towards maintaining and advancing the degree of excellence and the technologies for which Canadians are historically renowned and in jeopardy of losing.

This is no exaggeration. On the contrary, in recent years shipbuilding in Canada has been going through an unprecedented crisis. In 1990, it employed 12,000 people in the various shipyards across the country, and more than 12,000 others in related trades, for a grand total of 24,000. Six years later, in 1996, this industry employed no more than 5,400.

Despite claims to the contrary, this is not an industry concentrated solely in the maritime provinces. Shipyards are also found in Quebec, Ontario and British Columbia. This is, therefore, an important industry, since it is in seven of the provinces.

In the mid-1980s there were four shipyards in operation in Quebec alone: Longueuil, Sorel, Lévis and Les Méchins in the Lower St. Lawrence. After the industry itself decided to undertake a process of rationalization of its activities in order to ensure its long-term survival, the facilities at Longueuil and Sorel were closed down. Despite this, the situation has deteriorated in recent years, instead of improving.

The shipyard of the Groupe maritime Verreault, located in Les Méchins on the Lower St. Lawrence and headed by the very dynamic Denise Verreault, is in dire straits.

Although, since 1989, this businesswoman has managed to create more than 500 jobs in a region hard hit by unemployment, it is increasingly difficult to get contracts. Ms Verreault is so concerned about the future of the shipbuilding industry in Canada that, in recent years, she has been travelling around Canada from coast to coast in an effort to convince politicians and Canadians of the urgency of establishing a national policy in this area, if we do not want to see this industry disappear. It should be noted that the situation is identical in shipyards in New Brunswick, Nova Scotia, Ontario and British Columbia.

In 1997, the Canadian Shipbuilders Association, which represents all of the country's shipbuilders, tabled a white paper asking the government to quickly develop a new policy on shipbuilding. The officials of this association were categorical: our shipyards are no longer competitive compared to those in Europe, the United States and Asia, countries largely subsidizing shipbuilding and providing tax advantages to shipbuilders and shipowners, which are much more interesting than those available in Canada.

In 1996, there were 2,589 ships being built in the world, and yet Canadian workers were inactive. The measures put in place by the federal government simply failed to ensure the maintenance, in the medium term, of a viable and prosperous shipbuilding industry in Canada.

Honourable senators, the heads of this important industry are not the only ones to put pressure on federal government to adopt a modern shipbuilding policy. In August 1997, at their annual meeting at St. Andrews, New Brunswick, the provincial premiers, aware of the value of the shipbuilding industry for Canada's economy, called on the federal government to review its shipbuilding policy in order to find appropriate ways of helping the industry meet the challenges being set internationally. This stand followed the publication of the Canadian Shipbuilders Association's white paper.

At the moment, the three unions representing workers in shipbuilding and the Canadian Auto Workers are organizing a national campaign to put pressure on the federal government, and the Minister of Industry, in particular, in order to convince it to develop a global policy on shipbuilding.

On May 3, the members of my party in the other House moved a motion similar to the one by my colleague requesting that the government develop a new national policy to revive the Canadian shipbuilding industry. The text of this motion was word for word that of the motion passed in 1993 by Liberal Party delegates at a convention to develop their electoral platform for the general election to be held that same year.

In 1998, these same party members decided at their biannual convention that the motion would become an integral part of government policy. Needless to say that the Liberal wing in the Maritimes also studied this question at length and contacted a number of representatives of shipyards in the Atlantic provinces.

Following the debate on this motion, the four opposition parties in the other place decided to join together to force the government to pass the private member's bill, Bill C-493, of the Bloc member for Lévis, Antoine Dubé. Among other things, he proposed tax exemptions for shipbuilding in Canada and refundable tax credits for the conversion and repair of ships. The bill was in keeping with the requests by the Canadian Shipbuilders Association and our party's position on the matter.

As we can see, honourable senators, it is clear there is a consensus among the people from the shipbuilding industry, the provincial premiers, the unions, the opposition members and Liberal Party delegates that this industry is going through a major crisis and can no longer compete with its foreign competitors, despite our excellent worldwide reputation in shipbuilding and in high tech. Everyone now wants the federal government to develop a real policy on shipbuilding.

The Minister of Industry does not seem to be disposed to respond to this request. This is nothing new, because the attitude of the minister in this matter tends to be similar to the one that holds that this industry is outdated and will disappear in Canada and that it is therefore useless to do everything in our power to save it. Whereas, in a report published in late 1993, early 1994, a group of consultants questioned MIL-Davie's ability to survive in a highly competitive world market, the minister said, on December 7, 1994, in The Ottawa Citizen, and I quote:

I do not think this relevant to what I am doing [...] It does not fit in with my ideas.

This says a lot about what he thinks of this industry.

During the debate on May 3 in the other place, the minister did not seem very optimistic about the future of this country's shipyards. He said that Canada had a comprehensive shipbuilding policy and listed the various programs and measures targeting this industry. He also praised the $198-million relief fund set aside by the Progressive Conservative government between 1986 and 1993, when the industry decided to rationalize. According to the minister, these measures are sufficient to ensure the industry's competitiveness.

Again according to the minister, tax relief and guaranteed loans for ship builders and owners will not necessarily improve the industry's competitiveness, because other factors, such as labour costs, must be taken into account. However, in a interview with L'actualité in January 1996, the president of the Groupe maritime Verreault said:

...that a Korean welder earns $60,000 U.S. a year and that the success of shipbuilding in Denmark, Korea and Japan is based on intelligent fiscal policies, not low wages.

It therefore seems clear that the problem of the shipbuilding industry can be attributed not just to a piecemeal policy ill-adapted to new world realities, but also to a minister who is trying to reduce the importance of this industry in the Canadian economy. It is somewhat unusual to see a politician who seems to be able to afford to sacrifice thousands of well-paid jobs and thus deprive our economy of more than $625 million annually. It is important that the minister and senators be reminded that the shipping industry in Canada, which includes shipbuilding, employs over 40,000 people and generates over $2 billion a year.

That is why, honourable senators, it is important to act right away. The measures proposed by Senator Forrestall are also based on the demands of the Canadian Shipbuilding Association. These are, in short: exclusion of new construction ships built in Canadian shipyards from the present Revenue Canada leasing regulations; provision of an improved export financing and loan guarantee program similar to the Title XI program in the U.S.; provision of a refundable tax credit to Canadian shipowners and shipbuilders; and finally, modification of NAFTA or signature of a bilateral agreement with the U.S. in order to eliminate the provisions of the Jones Act which markedly disadvantage Canadian shipbuilders over their American counterparts.

In closing, to all those who are going to say that funding all of these measures would be too expensive, my response is that income and other tax revenue of all kinds generated by this sector of activity are surely going to disappear because in the medium term there will be nothing more built in our shipyards. I would emphasize for the last time that these measures are the object of a broad consensus in our country. They therefore deserve careful examination.

[English]

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Hon. P. Derek Lewis (Acting Speaker): If no other senator wishes to speak on this inquiry, it will be considered debated.

Income Tax Act

Increase in Foreign Property Component of Deferred Income Plans-Motion Proposing an Amendment Adopted

On the Order:

Resuming debate on the motion as modified of the Honourable Senator Meighen, seconded by the Honourable Senator Kirby:

That the Senate urges the Government to propose an amendment to the Income Tax Act that would increase to 30 per cent, by increments of 2 per cent per year over a five-year period, the foreign property component of deferred income plans (pension plans, registered retirement savings plans and registered pension plans), as was done in the period between 1990 to 1995 when the foreign property limit of deferred income plans was increased from 10 per cent to 20 per cent, because:

(a) Canadians should be permitted to take advantage of potentially better investment returns in other markets, thereby increasing the value of their financial assets held for retirement, reducing the amount of income supplement that Canadians may need from government sources, and increasing government tax revenues from retirement income;

(b) Canadians should have more flexibility when investing their retirement savings, while reducing the risk of those investments through diversification;

(c) greater access to the world equity market would allow Canadians to participate in both higher growth economies and industry sectors;

(d) the current 20 per cent limit has become artificial since both individuals with significant resources and pension plans with significant resources can by-pass the current limit through the use of, for example, strategic investment decisions and derivative products; and

(e) problems of liquidity for pension fund managers, who now find they must take substantial positions in a single company to meet the 80 per cent Canadian holdings requirement, would be reduced.- (Honourable Senator Lynch-Staunton)

Hon. Michael A. Meighen: Honourable senators -

The Hon. the Acting Speaker: I must inform the Senate that, if the Honourable Senator Meighen speaks now, his speech will have the effect of closing the debate on this motion.

Senator Meighen: Honourable senators, I am pleased to speak today to close the debate on this motion which I moved and which was seconded by Senator Kirby.

This motion urges the government to increase by 2 per cent per year over a five-year period the foreign property component of pension plans, registered retirement savings plans and registered pension plans from 20 per cent to 30 per cent.

Since members of this place have been debating this motion since December of 1997, there is little I can add today. Accordingly, I will limit my remarks to a very few minutes.

I am pleased to see that this motion restating recent findings of both the House Finance Committee and the Senate Banking Committee will, I believe, receive bipartisan support.

[Translation]

Honourable senators are aware that eight million Canadians, over half of whom have an annual income under $40,000, depend on these plans as their primary means of planning for their retirement. By supporting this motion, we are saying that the ceiling on foreign investments should be raised in order to allow Canadians to diversify their holdings so as to maximize their investments, with a view to secure financial planning for their retirement.

Honourable senators, this does not mean that foreign markets are superior to Canadian markets. Rather, we are saying that we favour a choice, that we accept the fact that these markets fluctuate and that, while some markets are doing well, others are rather weak.

Any effort to improve the net worth of these retirement plans is good public interest policy. And this is all the more true because, with each new budget and the pressure from the government to lower expenses and future fiscal obligations, Canadians are being called upon to assume greater responsibility for planning their retirement. This pressure flows from anticipated demographic and economic changes, as well as from the size of the national debt.

[English]

Therefore, placing more responsibility for retirement savings on individuals while at the same time restricting their rate of return runs counter to good sense and, indeed, good public policy. This is not to place blame, however, as the foreign property limit dates back to the 1950s, an era much different from today. Moreover, I would remind honourable senators that the limit has already been increased from 10 per cent to 20 per cent between 1990 and 1995.

One cannot open the financial press these days without seeing a report or commentary arguing in favour of increasing the 20 per cent limit. The reason is that the globalization of markets is causing Canadians to seek safety in diversification and wealth creation through greater investment opportunities. The problem today is simple - the current foreign holding limit of 20 per cent is lower than the natural level of foreign holdings, namely, 30 per cent. In other words, in the absence of a limit, experience has shown that the level of foreign holdings in other countries tends to settle at approximately 30 per cent.

Honourable senators will recall that the Minister of Finance, Mr. Martin, has stated that it is not a question of "if" but a question of "when" the limit will be raised. Our colleague Senator Kirby said recently that the proposed change in the foreign content rule from 20 per cent to 30 per cent is clearly a policy whose time has come.

There is a consensus in Canada today on increasing the foreign property component of deferred income plans. Today's bipartisan approval, if that is what this motion receives, will clearly place members of the Senate on the side of average-income Canadians. I ask all honourable senators to support this motion urging the government to increase the foreign property limit from 20 per cent to 30 per cent over a five-year period.

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

Hon. Sharon Carstairs (Deputy Leader of the Government): On division.

Motion agreed to, on division.

National Defence

Debate Respecting Posting of Troops Outside Canada-Inquiry

On the Order:

Resuming debate on the inquiry of the Honourable Senator Forrestall calling the attention of the Senate to the matter of public debate respecting the posting of CAF members to Kosovo.-(Honourable Senator Carstairs)

Hon. J. Michael Forrestall: Honourable senators -

The Hon. the Acting Speaker: I must inform the Senate that, if the Honourable Senator Forrestall speaks now, his speech will have the effect of closing the debate on this inquiry.

Hon. Sharon Carstairs (Deputy Leader of the Government): Honourable senators, I do not wish to prevent the senator from speaking. However, he may wish this debate to continue, and I do not necessarily want it to be withdrawn from the Order Paper. Through a lack of observation on my part, I did not realize that this item had reached the fifteenth day. If Senator Forrestall wishes to close the debate today, then I am more than prepared, of course, to hear him speak. However, if he wishes the debate to continue, then my contribution would continue the inquiry.

Senator Forrestall: Honourable senators, I appreciate the generous offer made by the Deputy Leader of the Government. The inquiry has been on the Order Paper for some time and the apparent lack of interest, in particular from the other side, led me to believe earlier today when I was giving it some thought that, perhaps, I should close the debate on my inquiry. In the fall when we return, perhaps for a new session of Parliament and when we know what we are doing in Kosovo, I will simply reintroduce it.

I am quite prepared today to bring it to an end, unless some other honourable senator wishes to participate.

Honourable senators, as I have just suggested, this is probably the last time this spring that we will speak to the inquiry on Kosovo. It is a shame that we have not had more participation from the other side, other than the intervention of Senator Grafstein. However, I am not surprised there has been little participation in this debate. It must be difficult to speak about a bombing campaign in which one does not believe, especially for those senators opposite who joined the Liberal Party of Canada under the leadership of the Right Honourable Lester Pearson who believed in peacekeeping, international law and the United Nations.

Few senators and few Canadians outside these walls, if any, doubted the necessity of stopping Slobodan Milosevic. That he now faces the international court in The Hague is a consequence that is long overdue.

There has always been the nagging question of how to do it. NATO decided to bomb Yugoslavia to end the tragedy in Kosovo. Time will tell whether it was the right decision. I hope and pray along with many others that it was.

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NATO's choice not to seek a United Nations Security Council blessing and supporting resolution will always cast doubt about Clinton, Albright or Axworthy's "soft war." By conventional international law, NATO has violated the United Nations charter and launched a war over how a sovereign government deals with its own people. I am not an expert in this realm, but I have always believed that the means never justifies the end. The end never justifies the means either, for that matter.

Today there are legal scholars who would differ with convention and say that it was right, and that humanitarian international law allows such interventions. The genocide convention calls upon signatories to act, and they will be right, but they fail to remember that the United Nations Security Council, warts and all, still is the authorizing body of military action. If NATO is attacked, then it can defend itself, but NATO in this case was not attacked, and a shadow has been cast - a dark shadow on NATO's previously high moral ground.

Leaving international law and moving into the realm of strategy, I have to ask myself, what has NATO accomplished? Maybe air power alone can win wars; maybe not. We have halted ethnic cleansing now that there are almost a million Kosovars living in refugee camps outside of the country and another 800,000 living in the hills under desperate conditions. Air power alone has not prevented this tragedy.

Maybe we will see the end of Milosevic and his group of henchmen; maybe not. He has survived this long, and only time will tell if he sees the inside of a jail cell. If he goes, just who will follow him, and how do you end hundreds of years of hate and bloodletting? That I do not know.

Will the Yugoslavs keep the bargain they have struck? Will the KLA lay down their arms, return to Kosovo and patiently wait for independence? Will the refugees, whose very sense of trust in all but God has been eroded, want to return?

Who will rebuild the country? Who will rebuild Yugoslavia? Those of you who have been there know the devastation and have seen the ruin. Have we weakened Yugoslavia to the point that a new set of dominoes is preparing to fall? What of the West's relationship with Russia and China?

I am certain the soft power wonder boy of human security is attempting to find some manner of comfort in all of this, and his selective memory that forgets his own past history prior to the end of the Gulf War may succeed in letting him off the hook once again.

Honourable senators, I hope that Canadians will not forget. Someone said the only country whose very democracy was in question over Kosovo was ours, right here in Canada. We have seen the government use "take note" debates on peacekeeping to later justify a phased air campaign. It was not a humanitarian exercise. There were no bags of wheat with a maple leaf stamped on the side attached to Canadian SMART weapons.

We have seen ministers hide behind low-level officials in committee, or not show up at all. We have seen a Prime Minister who talks to the press, but who does not make statements to Parliament about the conduct of the war. Indeed, we have seen committees of elected parliamentarians and senators literally having to beg for briefings on the war.

No one questions the legal right of the Crown to make peace and make war, but parliamentary democracy is based upon the principles of consultation and the ability of the opposition to question the government and expect honest answers.

I wish to thank the Leader of the Government for answering when he could, as he has done much better than his colleagues in the other place - the minister of soft power and war and his honourable friend the Minister of National Defence.

My friends, the democracy in danger has come to us here. An outsider looking in must wonder what our committees do, as this government has so emasculated the committee process that I am left with questions about its very future.

The government might want to look back at the Gulf War and how, for example, my party consulted with parliamentarians. I recall, and I am sure many of you do, that Prime Minister Brian Mulroney in 1991 made the leader of the New Democratic Party a Privy Councillor so that she could be fully briefed on the war. I also recall how ministers met two or three times a week with committees for briefings. Lastly, I recall how we obtained with our allies a UN mandate to go to war with Iraq, rather than wait for the shooting and bombings to go on for months. The very people who wailed so loudly in 1990 and 1991 spent their time in 1999 justifying their view of law, the world and the war, and hiding from Parliament.

I wish now to turn to the Canadian Armed Forces. I want to say thank you to our men and women of the Canadians Armed Forces for their bravery and dedication to duty.

This is a government that, to some major degree, has shown a complete disdain for the Canadian Armed Forces. Death by a thousand cuts may not have been their deliberate plan, but it surely has been the effect.

This is the government that, with great fanfare, brought forth the plan for a UN rapid reaction force, while it ignored its own capability. To get 800 soldiers to Europe, some choppers and a few vehicles, from warning order to operational capacity, takes about two months.

The only asset we really have for rapid reaction is our navy, and it is stuck with a single Sea King over in the vicinity, which does not fly because they are understandably a little reluctant to put it to too much work.

The air force, too, lacks in-air refuelling to get our CF-18s overseas, so they wait in line for someone else's tanker, and pop up and down across the country and around the world, trying to get to where they are going.

Whenever the government is asked about a gap in capability, they say we have allies who will step in to do all of these things for us - only for Canadians to discover was that, in war, our allies look after themselves and their own assets first, and if there is time left over, or assets, then we might benefit from them.

The army had the Canadian Airborne Regiment, but instead of imposing discipline and showing leadership, this government disbanded the army's only rapid reaction element, with the exception of the Joint Task Force 2 that never leaves the country, should we believe the minister of the Crown, while the National Post on Saturday before last suggests otherwise.

It is not a surprise that the Minister of National Defence does not know what is happening within his department. He also does not know what is happening overseas among his principal allies, to whom he supposedly talks regularly.

William Cohen, the Secretary of Defense, is going to a meeting in Europe with his United Kingdom, German, French and Italian colleagues about a ground invasion of Kosovo. He does not speak to his closest ally and neighbour, Mr. Eggleton, and invite him along for those discussions. Inasmuch as we will be integrated with the British, we have reconnaissance capability and, as such, we will be in front of those who are in front.

The day the question was raised here in the chamber, the government leader said Canada's government views its exclusion from such meetings to discuss a ground invasion using, among others, Canada's soldiers to invade Kosovo as "unacceptable."

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The next day, the minister responsible says he does not know who was at the meeting, or what was discussed, or what would be its impact on Canadian troops. A day later, he has a better story. It was an EU meeting, it was bilateral, and it was minor. Honourable senators, I have a bridge to sell you: Secretaries of Defense fly every day for meetings on ground invasions of European states; it is commonplace. As a point to whoever comes up with these lines, "bilateral" usually implies something occurring between two states, not among five, or six, or seven - but who is counting or paying attention to the facts anyway?

As the Minister of National Defence does not seem to be able to count or get his facts straight most of the time, it is time to express a few points of concern prior to the deployments and enforcement operation of our ground forces.

Honourable senators, whether the ground force is expanded by government or not, our recce units, as I have suggested, will be the very first to cross into Kosovo. That line is most likely to be wired, booby-trapped, or mined, so the minister or someone ought to keep their eye on the ball.

The rules of engagement must be crystal clear, and it is important that this chamber, this Parliament, understand those rules of engagement. We must be clear about this government's position, and that of the United States and others with respect to disarming the KLA. It is not clear. Indeed, in the last two days it has become very unclear.

Canada, according to its white paper, is supposed to be able to deploy three battle groups of 1,300 soldiers, or a brigade group, for a total of approximately 4,000 troops - the first battle group in three weeks, the brigade by 90 days. So far, we have failed miserably on both counts. We are hard-pressed at the moment to deploy a battle group to Bosnia, and a less-than-battalion group to Kosovo, for a total of 2,100 soldiers, and it takes almost two months to do that.

The government will probably be able to find more soldiers, but they have not trained for the mission, have likely not trained together, certainly have not trained on the equipment or have old, substandard equipment. I suggest that the minister be prepared for questions.

If, as The Globe and Mail suggests, the government intends to deploy Leopard 1 main battle tanks, he had better be prepared for questions, because they are underarmoured and undergunned.

There will be trouble with the Serbs, the Kosovars, the KLA, and the Serb paramilitaries, and the government had better have some answers.

Last but not least, this crisis should prove to all, including Mr. Eggleton and his colleague, the Minister for Soft Power, that crises can come overnight. When they come, countries need well-equipped, professional armed forces prepared to fight and win wars or the peace. Chapter VII missions are now the rule, and Pearsonian peacekeeping, if I heard our Foreign Affairs Committee testimony right, is largely dead.

I say to the government: Get on with the implementation of the 1994 white paper before the Prime Minister, who offers our troops around the world like a parent offering candy to children, finds that the cupboard is bare and he and Canadians are embarrassed, if not endangered, by this government's lackadaisical approach to Canada's military security.

Hon. Noël A. Kinsella (Deputy Leader of the Opposition): Honourable senators, I wonder whether Senator Forrestall would take a question.

Senator Forrestall: Certainly.

Senator Kinsella: It relates to the rapid response unit experience yesterday. When our troops were lined up and ready to fly to Thessalonika, the airplane that was chartered was broken down in New York. Does the honourable senator have any information as to our ability to deliver our troops, the few that we have, under those kinds of conditions?

Senator Forrestall: Honourable senators, yes, that was somewhat embarrassing, somewhat unfortunate. In a newspaper that I read this morning, someone made the suggestion that it would be better to send them by slow boat by way of China, which I did not find funny. Pathetically, it might have some ring of truth. We have no airlift capacity to move our own troops.

When ACE was viable and, I thought, a strong commitment that kept Canada and Canadians attached to Europe, we had the means of doing it. In days not so long ago, we maintained a list of vessels that could be commandeered, no matter what pursuit they were involved in, and brought to places of disembarkation to get rid of cargoes they might have on board and then to load troops, supplies, tanks, helicopters, whatever, with minimal decisions or delays. We could put the troops I was speaking about earlier in Northern Europe in 21 days. Now we cannot get to Kosovo in two months. That must be a deterioration. How we will correct it, I do not know. We cannot even refuel our aircraft in the air; we must rely on others, so we cannot rely on airlifts.

The answer, of course, is a return to the white paper of 1994, to pick up the points that were made and get on with bringing the Canadian Armed Forces up to a level so that they can sustain the commitments we have given to them.

The Hon. the Acting Speaker: If no other honourable senator wishes to speak, this matter is considered debated.

Child Custody and Access

Government Response to Special Joint Committee Report-Inquiry-Debate Adjourned

Hon. Landon Pearson rose pursuant to notice of May 11, 1999:

That she will call the attention of the Senate to the Government response to the Report of the Special Joint Committee on Child Custody and Access entitled: "For the Sake of the Children."

She said: Honourable senators, I rise today to expand on the comments I made on the day the government tabled its response to the report of the Special Joint Committee on Child Custody and Access. At that time, I expressed some satisfaction that, on the whole, it appeared that the government had listened to, and had actually heard, the message that we delivered in "For the Sake of the Children." I was not mistaken.

Since then, I have had discussions with the Minister of Justice and others, and have been generally convinced that the government is indeed determined to move ahead with its strategy to implement most of our recommended reforms, at least those that fall within federal jurisdiction, although perhaps not in exactly the way we requested nor in as short a time as some of us might have liked.

However, I am not in such a hurry. I would like us to take all the time we need to get it right, knowing that the government has made such a firm commitment to changing the Divorce Act in the direction we have recommended, and that everyone involved in the process of family separation is already operating in the shadow of that knowledge.

Let me give honourable senators a brief outline of the government's proposed strategy:

First, the government has established four framework principles. The first one is the importance of the child's perspective; the second is the need for governments to work together; the third is a holistic approach; and the fourth is that one size does not fit all.

Within this framework, the government strategy will have six elements. The first element focuses on the child: on the child's best interests, on parental responsibilities with respect to the child, on parenting plans, and on the voice of the child.

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The second element is maintaining meaningful relationships, which deals with the aspects of continuing the involvement of both parents, no presumptions, new terminology, enforcement, parental child abduction - which caused us much concern - and recognizing the importance of grandparents.

The third element of the strategy will be devoted to managing conflict, that is, putting measures in place that will encourage cooperative parental agreements, developing a better understanding of and responding to high conflict, concerns about adequate parenting, and false allegations of violence - the entire body of high conflict that we encountered so often.

The fourth element will be enhanced financial responsibility, that is, considering the issues of financial responsibility and how it is shared.

The fifth element is the need for collaboration and partnership, not only among different levels of jurisdiction but also between the various individuals and groups involved in the process.

The sixth element is building a better understanding, which illustrates the importance of research.

Honourable senators, a parliamentary committee is a valuable instrument for laying out issues in a way that reflects public attitudes and the experience of individual citizens. However, committees, at least the ones on which I have sat, simply do not have the resources to commission all the research necessary to ensure that the intention of our reforms will be fully respected as they are implemented.

During our hearings, we uncovered many problems, but we simply could not uncover all the ways these problems could be resolved, nor were we able to ensure that all the legal and other professionals involved in the divorce and post-divorce process, let alone parents and other family members, were fully prepared to abide by our recommended legislative changes in the spirit in which we hope they will be designed.

Australia is a case in point. The Australia Family Law Reform Act, which came into force on June 11, 1996, with objectives similar to those contained in our report, has not yet succeeded in either reducing litigation or improving the quantity and quality of contacts between children and what is still known in Canada as the non-custodial parent. This has been documented by a very interesting report entitled "The Family Law Reform Act: Can Changing Legislation Change Culture, Legal Practice and Community Expectations?"

As a result, the Chief Justice of the Family Court of Australia, the Honourable Alastair Nicholson, who shared a panel with me last Wednesday at the meeting of the Association of Family and Conciliation Courts in Vancouver, warned me that we must take our time and ensure that all people and systems concerned are adequately prepared to work in the same direction.

This warning was echoed by Dr. Janet Walker, the commissioned researcher reporting to the Government of the United Kingdom on the new British Divorce Act, which was passed in 1996, but which has yet to come into force.

Certain American jurisdictions have also been having problems improving outcomes for children by well-intentioned reforms and are putting them on hold or even reversing them. This has been the case with joint custody presumptions and joint parenting plans.

All this tells me is that we need to move with extreme caution in this complex and difficult area. I am convinced that most of our committee's recommendations are sound but, for the sake of the children, we should take the necessary time to ensure that the provinces and territories are moving in step with the federal government on these family law reforms. I understand that a paper is being prepared for the next meeting of the federal-provincial-territorial committee on family law in October that will detail the changes that will be necessary in the provinces to ensure that all jurisdictions are on the same wavelength, but setting those changes in motion will take time.

We need time to learn more about how to involve children effectively in the divorce process. There is solid research being done in that area, particularly in the United States, but we should have a number of models in hand if we are to be successful in giving children a voice.

We also need time to gain more experience with the Unified Family Court to see if it is as positive a move as our recommendation would suggest. I believe it is, but another year of observation of the new courts that are opening only this September will be very useful in determining whether we wish to expand them.

Furthermore, if our recommendation that parenting orders be in the form of parenting plans is to be effective, we need time to run a pilot project. That may be possible next year. We also need time to understand the components of the parenting after-education programs that are essential for them to be successful, especially if they are to reach rural areas. Health Canada will be evaluating five existing models starting this year.

There are any number of other areas that need further investigation, such as mediation, but it is vital that we have a better understanding of the implications of domestic violence, including false allegations of abuse, for the proper implementation of the shared parenting concept. This will also take time.

We will never know enough to be sure that all children are protected, but the more we know, the more responsible to them we will be.

Finally, it only makes sense to me that we wait for the review of the child support guidelines before we reform the whole Divorce Act. Although examining the guidelines was not part of our mandate, we heard so much about them that we know that some changes at least will be necessary; changes that can be associated with our committee's support for the need for parents to share their financial resources with their children.

The report of the Special Joint Committee on Child Custody and Access reflects a vast amount of personal pain and a large amount of public concern. I believe the government recognizes this and has made a major commitment to reforming the divorce culture so that children are better served. The government strategy is well designed and, God willing, will be well executed but, for the sake of the children, we must be sure we know what works and what does not. There is already a growing crowd of judges, lawyers, mental health professionals and family members moving in the same direction, but we need to add to it. When the crowd is large enough, the legislation will work, and the children will come out winners.

On motion of Senator DeWare, for Senator Cohen, debate adjourned.

Revenue Canada

Abusive and Illegal Tax Collection Tactics- Inquiry-Debate Adjourned

Hon. Donald H. Oliver rose pursuant to notice of June 3, 1999:

That he will call the attention of the Senate to methods by which taxpayers in Canada may be better protected from abusive and illegal collection tactics utilized by Revenue Canada, its agents and employees, by reviewing the results of a similar study of the IRS.

He said: Honourable senators, we have spent many weeks in both committee and this chamber debating Bill C-43, the government's bill which establishes the new Revenue Canada agency. We have spent a good deal of time trying to find ways to better protect those employees who will be transferred to work for this agency. Senator Bolduc made some persuasive remarks about ensuring the merit principle prevails.

During that debate, we did not address in any detail the issue of taxpayer protection from abuse at the hands of this new body. I believe it appropriate now, as this body will soon be sustained, that this chamber have a full debate on methods by which taxpayers can assert their rights and be protected from overzealous tax collectors. Every week, senators and members of the other place receive communication in the form of e-mails, letters, faxes, and phone calls from Canadians, particularly from the small-business community, who are under siege by tax collection agencies.

It is unsatisfactory in the extreme for us as legislators to attempt to resolve these complaints one at a time. There must be a better way, a more consistent way, to address these alleged abuses. For some time now I have watched our neighbours to the south deal with the subject, and I believe that we can learn from their experiences.

In the early part of this decade, a number of illegal actions by the Internal Revenue Service of the United State came to light. In response to these complaints, the National Commission on Restructuring the Internal Revenue Service was established to review the practices of the IRS and to make recommendations for modernizing and improving its efficiency and taxpayer services. The report of this commission was issued on June 25, 1997, entitled "A Vision for a New IRS." That report contained recommendations relating to the executive branch governance and management of the IRS.

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As well, recommendations were also made for congressional oversight, personal flexibility, customer service and compliance, technology modernization, electronic filing, tax law simplification, taxpayer rights and financial accountability. To put it more simply, the entire agency had to be revamped.

Both Houses took up the subject of this report. The House of Representatives initiated a bill entitled "The Internal Revenue Service Restructuring and Reform Act of 1998." The Senate Committee on Finance, under the able chairmanship of Will V. Roth, Jr., began hearings of its own in 1997 on the practices and procedures of the Internal Revenue Service.

I know Senator Roth, and I have had an opportunity to speak to him about his inquiry. The hearings in September 1997 and May 1998 uncovered startling problems of a government agency taking the law into its own hands, engaging in deliberate, illegal acts and the use of scare tactics, all in the name of doing its job regardless of whether there was any basis for using anything other than normal procedures. The stories told to the Senate Committee on Finance were heart-rending as well as terrifying.

My concern is, based on representations from small and medium-sized business enterprises, that similar abuses exist in Canada such as issuing third party demands without justification but simply to embarrass businessmen with their customers.

My research in the United States has uncovered many of these stories. The IRS has been known to seize the assets of both husband and wife when the debt belonged to only one of them, and then refusing to release the lien against the innocent spouse's assets when notified that she was not in any way a party to the debt. I read about outright lies being used to gain access to confidential files held by taxpayers' lawyers, assets which amounted to much more than the debt seized and sold, with no money going back to the taxpayer. These and other stories may seem scandalous, but as members of Parliament who are looked to in times of need, we know all too well that these stories likely exist in Canada as well. I do not wish to belabour the point of abuse, but I would be pleased to share my research with honourable senators. Everything I did collect is available on the Internet.

Rather than dwell on the stories of abuse, I wish to turn to what was done in the United States. The Commissioner of the IRS appeared at the hearings of the Senate Committee on Finance held in May of 1998. He indicated to the committee the work he was doing to reform the IRS. In what I believe was a novel solution to the issues raised by the taxpayers at the Senate hearings, both the Senate committee and the commissioner agreed that these individual matters should be referred directly to the IRS for resolution.

As chairman, Senator Roth explained at the beginning of the May hearings:

Last Friday, when Commissioner Rossotti and I met, we agreed that the course of IRS reform would best be served by focusing on solutions and not adjudications of the specific problems we've heard during the course of our oversight.

Today we will focus on solutions to the serious concerns our oversight has raised, rather than address specific cases.

This meant that those who had raised personal problems with IRS tactics would have them addressed by the commissioner reviewing their cases internally with the agency, thus leaving the Senate committee free to look at how systemic problems could be resolved.

Again, as Senator Roth said during the proceedings of his committee:

Oversight is a painful process. It means focusing on the things that are wrong. It means seeing things you wouldn't wish to see and hearing things you'd prefer not to hear. But once that process is under way, real change becomes possible.

As a result of these hearings and the work of the Commissioner of the IRS, Charles Rossotti, a report was released validating the concerns raised by the Senate committee which also contained a commitment to reform the service.

Second, the Senate committee drafted and proposed a bill, eventually passed in both houses, which received executive approval. This bill, entitled "The IRS restructuring and Reform Bill," provides both the IRS oversight mechanisms and taxpayer protection.

Chairman Roth described it as:

...replete with strong, vital measures that will protect taxpayers and employees. It will give taxpayers more rights. It will require a 30-day notice before assets can be seized. It will protect innocent spouses. It will provide for stringent and continued oversight of the IRS.

The reform bill was built on three principles: first, increasing oversight of the agency to prevent abuse; second, holding IRS employees accountable for their actions and rewarding employees who treat taxpayers fairly; and, third, ensuring that taxpayers are treated with fairness by creating a whole new arsenal of taxpayer protections.

A Taxpayers Advocates office was created, which is independent of the agency to ensure that they represent the interests of the taxpayer. The abusive conduct of IRS employees was dealt with by this statute, holding them accountable for their actions by requiring the IRS to terminate employees who commit perjury, falsify documents or violate the rules to retaliate against a taxpayer. As well, due process is ensured in collection activity.

Honourable senators, I have spent this time on a recently enacted United States statute because I believe it addresses some of the abuses that have been brought to my attention as existing here in Canada. I urge other honourable senators to take part in this inquiry. I would hope that, after we explore the issues surrounding tax collection in Canada, perhaps we could develop a reference of this matter to either the National Finance Committee or the Banking Committee to conduct a thorough study in this area. After such a study, I am hopeful that we could fashion our own legislation which would be protective of the rights of taxpayers.

I wish to thank honourable senators for allowing me this opportunity to begin debate on this inquiry today.

On motion of Senator DeWare, for Senator Bolduc, debate adjourned.

Children of Divorce

Motion of Affirmation and Resolution in Support of Entitlements-Debate Adjourned

Hon. Anne C. Cools, pursuant to notice of June 1, 1999, moved:

That the Senate of Canada uphold its unique, historical, constitutional and parliamentary interest and role in divorce and in granting bills of divorce, as demonstrated by the Senate's former Standing Committee on Divorce, and that the Senate continue to assert its special role and interest in the condition of the children of divorce;

That the Senate upholds that the Senate has vigorously renewed this interest by its actions upholding the entitlements of children of divorce to the financial support of both parents according to respective abilities, and by the Senate's actions to amend Bill C-41, an Act to Amend the Divorce Act and other related Acts, amended by the Senate on February 13, 1997, concurred in by the House of Commons on February 14, with Royal Assent on February 19, 1997;

That the Senate upholds that a corollary to the Senate's passage of Bill C-41 in February 1997 was the will, agreement, and intention to constitute a joint committee of the Senate with the House of Commons to examine the previously unstudied and neglected question of the condition and functioning of children, within the hitherto established regime of custody and access in divorce;

That the Senate affirms that this Special Joint Parliamentary Committee of the Senate and House of Commons was constituted by a joint resolution, moved in the Senate on October 9,1997 and adopted in the Senate on October 28, 1997, and moved in the House of Commons on November 5, 1997 and adopted in the House of Commons on November 18, 1997;

That the Senate affirms that this Special Joint Parliamentary Senate-Commons Committee on Child Custody and Access in divorce traveled across Canada, held numerous sittings, heard testimony from over 520 witnesses and reported to the Senate on December 9, 1998 and to the House of Commons on December 10, 1998 by its Report, For the Sake of the Children;

That the Senate affirms that this Special Joint Parliamentary Senate-Commons Committee concluded that upon divorce, the children of divorce and their parents are entitled to a close and continuous relationship with one another, and, consequently, recommended that the Divorce Act be amended by Parliament to express this joint nature of parenting by inserting the legal concept "shared parenting" in the Divorce Act, and also by including in the Divorce Act's definition of the "best interests of the child", the importance of the meaningful involvement of both parents in the lives of the children of divorce;

That the Senate affirms that on May 10, 1999, six months after the Committee's Report to both Houses of Parliament, more than two years after the passage of Bill C-41 in February 1997, the Minister of Justice, Anne McLellan, gave her ministerial response to the Committee's conclusions and recommendations in her paper entitled Government of Canada's Response to the Report of the Special Joint Committee on Child Custody and Access: Strategy for Reform; having fully accepted the Committee's major recommendations, and having accepted that the divorce law regime currently in force is wanting and needing correction, she then proposed a three-year delay to May 1, 2002 for her legislative action to correct the obviously wanting divorce law regime;

That the Senate asserts that the recommendations of a committee of Parliament, the Highest Court of the Land, the Grand Inquest of the Nation, is the highest recommendation of the land, and that such advice and counsel of Parliament is the most complete, representative, constitutional, and the most efficient form of advice a government can heed; and that the Senate asserts that the responsible Minister and the Ministry owe a moral, a political, and a constitutional duty to Parliament to accept and follow the advice of Parliament;

That the Senate asserts that the Parliament of Canada, by its own study, examination, and conclusions, is now seized of the knowledge, that the divorce law regime currently in force in Canada is defective, insufficient, and even harmful, to the needs of children of divorce, their parents, and their families; and that the Senate being seized of this knowledge of the inadequate state of the divorce law regime, has a moral imperative and a bounden parliamentary duty to correct the situation forthwith, because possessing the knowledge of the children's plight and ongoing damage to them, Parliament's continued inaction and neglect is unconscionable;

That the Senate upholds the enormous public support of the people of Canada for the entitlements of the children of divorce to meaningful involvement with both their parents and families, and that the Senate further upholds all the children, their parents, and their families afflicted by the current divorce law regime; and

That the Senate of Canada, by virtue of the doctrine of the parens patriae, and the Senate's duty as stewards of the children of divorce, resolves to defend and protect the children of divorce; and that the Senate resolves to vindicate the needs and entitlements of the children of divorce to the emotional and financial support of both parents; and that "for the sake of the children" and in the "best interests of the child," the Senate resolves that the responsible Minister, Minister of Justice Anne McLellan, should cause a new divorce act to be introduced in the Senate or in the House of Commons, to implement, without delay, these recommendations of the Special Joint Committee on Child Custody and Access.

She said: Honourable senators, on the question of divorce, the role of senators in the past and the present is legend. In February 1997, on Bill C-41, to amend the Divorce Act and other related acts, the Senate reaffirmed its protection of children.

I am indebted to the Conservative senators, particularly Senator Duncan Jessiman, for this assertion of the Senate's peculiar constitutional role to uphold, protect and represent the children of divorce. I applaud our now retired Senator Jessiman.

Honourable senators, it had been the Liberal Minister of Justice, the late Mark MacGuigan, in Prime Minister Pierre Trudeau's government, who first proposed the term, "the best interests of the child," for the Divorce Act. On January 19, 1984, in the House of Commons, Minister MacGuigan introduced Bill C-10, to amend the Divorce Act. It later died on the Order Paper when Parliament dissolved, in July. Bill C-10's clause 10 proposed to add to the Divorce Act, in section 12, a new section 12.l (3), headed "Principles respecting children," that would have read, in part:

12.l (3) In the exercise of jurisdiction under sections 10 to 12 in respect of children, it is the duty of the court to take account of the best interests of the children as its paramount consideration and to give effect consistent therewith to the following principles; namely,

(a) the spouses have a financial obligation to maintain the children of the marriage, which obligation shall, in so far as is practicable, be apportioned between the spouses according to their relative abilities to contribute to its performance, taking into account the means and needs of the spouses and children;...

(1920)

Minister MacGuigan had anticipated that the courts and legal practitioners would apply "the best interests of the child" to mean the child's entitlement to a full relationship with both parents. Prime Minister Brian Mulroney's new Conservative government's Throne Speech of November 1984 pledged a new divorce regime. Minister of Justice John Crosbie redrafted Bill C-10 extensively and, in 1985, he introduced his own divorce bill, Bill C-47, entitled: "An Act respecting Divorce and Corollary Relief," and also Bill C-46 and Bill C-48, the passage of which in 1986 all created the current divorce law regime. Minister Crosbie retained the phrase "the best interests of the child" in Bill C-47. However, his concept was not exactly as Minister MacGuigan had intended.

From then till now, the development of family and divorce law took some strange turns, such that "the best interests of the child" became the best interests of custodial parents, mostly mothers, and non-custodial parents, access parents, mostly fathers, became visitors and observers in their children's lives.

In his 1995 article "The Best Interests of the Child," about this and the Supreme Court of Canada's 1993 judgement in Young v. Young, Queen's University Law Professor Nicholas Bala wrote, at page 455:

Justice L'Heureux-Dubé ... wrote a lengthy dissenting judgment in which she emphasized that the best interests of the child are served by protecting the position of the custodial parent...

About Justice L'Heureux-Dubé, he added, at page 461:

...she offers an explicitly feminist analysis...

About her judgement in Young v. Young, he stated, at page 462:

In regard to parental rights after separation, she argues strongly in favour of a legal regime that supports the decision-making authority of the custodial parent. "The role of the access parent is `that of a very interested observer, giving love and support to the child in the background.'"

In the 1995 Supreme Court judgement in Gordon v. Goertz, Madame Justice L'Heureux-Dubé reiterated, at paragraph 110:

Important as contact with the non-custodial parent may be, it should be noted that not all experts agree on the weight to be given to such contact in assessing the best interests of children.

Honourable Senators, Ontario Court General Division Justice Robert Blair, in his 1991 judgement in Oldfield v. Oldfield, is especially enlightening. About Mr. Oldfield's relationship with their children, Justice Blair said, at paragraph 5:

That this is a loving and caring relationship is apparent.

That is, the relationship with the father.

About Mrs. Oldfield, unhappily living in North America and wishing to move to France with their children for her prospect of marriage to a boyfriend, Justice Blair said, at paragraph 6:

Is it "in the best interest of the children" to make an order which effectively defeats this prospect and leaves them in the daily care of a mother who loves them dearly but who is shackled by her discontent?

Justice Blair permitted Mrs. Oldfield's move to France for this marriage. Mrs. Oldfield and the children did move to France, but that marriage never ensued. Mr. Oldfield's high child support payments then financed the children's trips to Canada for his access to them.

Honourable senators, the term "best interest of the child" went astray from the late Mark MacGuigan's intentions. It became an opportunity for shutting fathers out of their children's lives, for dispossessing children of their parents, and parents of their children.

Honourable senators, now to the Senate's encounter with Bill C-41 in February 1997. The then Liberal Minister of Justice Allan Rock's Bill C-41 was introduced in the Senate, having sailed through the House of Commons unquestioned. It proposed to repeal sections 15.(8) and l7.(8) of the Divorce Act, the provisions which had imposed the joint financial support obligation to their children on both parents, and also enabled the Federal Child Support Guidelines. The Senate amended Bill C-41 by reinstating that clause founding the Federal Child Support Guidelines, regulations on this joint and shared financial duty of parents. That clause, now section 26.l(2) of the Divorce Act, reads:

The guidelines shall be based on the principle that spouses have a joint financial obligation to maintain the children of the marriage in accordance with their relative abilities to contribute to the performance of that obligation.

Honourable senators, the public support for these Senate actions was unprecedented. As a corollary to Bill C-41's passage, the Senate obtained agreement to a joint parliamentary committee on the neglected issue of child custody and access in divorce. I agreed to a joint committee, rather than a Senate committee, because I, as did Senator Jessiman, believed that a joint committee would be the best vehicle to bring forward concerns and opinions, because it would include two of the three estates of Parliament, the Senate and the Commons. Knowing that, by the sheer number of political parties' members on it, a joint committee would be more cumbersome than a Senate committee, we believed that a joint committee's study and recommendations would be a certain, efficient, and direct route to the government's inclination and mind because Parliament is the highest court of the land, and a concerned minister would welcome its opinion and feel responsible to it.

Honourable senators, Recommendation No. 5, the shared parenting legal concept, the most significant recommendation of the Special Joint Committee's report "For the Sake of the Children," states, at page 27:

This Committee recommends that the terms "custody and access" no longer be used in the Divorce Act and instead that the meaning of both terms be incorporated and received in the new term "shared parenting", which shall be taken to include all the meanings, rights, obligations, and common-law and statutory interpretations embodied previously in the terms "custody and access."

About this, Liberal Minister of Justice Anne McLellan, in her May 1999 response entitled "Government of Canada's Response to the Report of the Special Joint Committee on Child Custody and Access: Strategy for Reform," stated, at page 12:

This recommendation is important, and further consideration of this proposal will be a high priority for the Government.

I repeat, a "high priority." She continued:

We share the Committee's concern that the current terms in the Divorce Act have the potential to escalate conflict between divorcing parents. In particular, we agree with the Committee's conclusion that there is a need to rectify the unfairness and inequality that has come to be associated with the term "sole custody." In some cases, this term is being interpreted as vesting the custodial parent with exclusive rights over the children and relegating the non-custodial parent to the status of "visitor." This situation needs to be changed.

Honourable senators, the terms "visitor" and "observer" entered the divorce lexicon after Justice L'Heureux-Dubé used the term "observer" in Young v. Young. The minister clearly accepts the major recommendations and principles of the committee's report. She clearly accepts the need for correction to the current divorce law regime. The minister, to her credit, has received the public call for change. The problem is her time-frame.

Honourable senators, I have studied the incalculable pain and suffering of thousands of children, mothers, fathers, grandparents, and other family members. Disturbed by the disinclination of Parliament and the courts to vindicate the emotional needs of children for both parents, for both mothers and fathers, I have been shocked by this collective recklessness with children's lives. For years, I have been inspired and deluged by thousands of letters and requests as burdened and anguished Canadian families appealed for my help, all questioning how governments of their beloved country can allow these injustices to continue.

I have studied this issue, its injustice, and its consequences for the children of divorce and their families. I have studied the legal documents of hundreds of fathers falsely accused during divorce and custody proceedings by mothers of sexually abusing their children. This phenomenon is a heart of darkness. Such false accusations are soul-destroying to those afflicted fathers and families.

On such false allegations, I welcome Professor Nicholas Bala's and John Schuman's recently released study "Allegations of Sexual Abuse When Parents Have Separated." I feel vindicated. I note that in their study they cite many cases and judgements that I have brought to the attention of the Senate and that I have quoted, including the cases of Reverend Dorian Baxter v. the Children's Aid Society of Durham Region, Barbosa v. Dadd, the Law Society of Upper Canada v. Carole Curtis, Metzner v. Metzner, Plesh v. Plesh , and others. These false accusations are a strategy to obtain sole custody and to defeat the other parent legally, emotionally, and financially. It is a potent and destructive use of legal process by one parent to dispossess the other parent of a parental relationship with their children.

Honourable senators, the other issues include parental alienation, grandparent alienation, and access denial. Governments have prescribed hefty penalties for non-custodial parents, fathers mostly, who lose their jobs and are unable to pay child support, including passport denial. Some even wish to create new criminal offences. Yet, about custodial parents, usually mothers who deny access to non-custodial parents, usually fathers, there is only silence and a systemic complicity.

On custody, children, and the courts' disinclination to enforce its orders, Lord Hartley Shawcross, in his famous 1959 work "Contempt of Court," wrote, at page 35:

The Court of Appeal pointed out in Gordon v. Gordon the unsatisfactory state of the law in which the unfortunate infant might not gain the protection intended by the court, owing to a lack of effective action to enforce the order of the court.

I repeat, these unfortunate children are denied the court's protection.

It is scandalous that parents, mostly fathers, must spend inordinate amounts - hundreds of thousands of dollars - to maintain contact with their children. I repeat, the disinclination of Parliament and the courts to vindicate the needs of children of divorce is an injustice. However, the Senate upholds the needs of the children of divorce and urges the minister to act.

Honourable senators, a full six months after the special joint committee's December 1998 report to Parliament, Minister McLellan has set a three-year time-frame to May 1, 2002. That is three and one-half years from the committee's report. The minister states that this May 1, 2002 date will coincide with the five-year review of the child support guidelines, regulations created by Bill C-41, the very bill that the Senate amended and passed reluctantly in February 1997, whilst informing the government of its very deep flaws.

The minister will have asked for five years to correct a regime that the Senate has clearly told her was defective and harmful to children of divorce. We told her then that the divorce law regime was defective. A joint parliamentary committee has told her. The public has told her. Further, May 1, 2002 is beyond this government's term of office, and beyond this minister's watch.

Newspaper editorials have been unanimous in their condemnation of the minister's proposed delay. Their editorial headlines are instructive, and some read as follows. The headline in the May 12 issue of The Globe and Mail read, "Who is acting for the children? The Justice Minister is curiously reluctant to amend the Divorce Act." The headline in the May 12 issue of The Gazette of Montreal read, "The courage to act." The headline in the May 12 issue of The Toronto Star was, "Disappointing delay." The headline in The Vancouver Sun of the same date was, "Legislative dodging hurts the children of divorce." The May 13 edition of the National Post read, "Fathers under fire."

These editorials, a plethora of other media comment, and the public in general, all disapprove of Minister McLellan's proposed delays. These commentaries are instructive and insightful of some current ministers' attitudes to ministerial responsibility and to Parliament. Consequently, many ponder the diminishing notion of a minister as a servant of Parliament and a minister as responsible to Parliament.

I hope that the minister's proposed delay is intended to keep us in suspense, and that, in its Throne Speech at the start of the expected new session of Parliament this fall, the government - my government - will reveal its plan for a new Divorce Act, upholding fairness, balance, and equilibrium, and upholding the entitlements of children of divorce to the love and support of both parents, both mothers and fathers. To uphold the entitlement of children of divorce to the emotional and financial support of both parents is a duty imposed on the Minister of Justice, the cabinet, the Senate and Parliament, by virtue of Her Majesty's Royal Prerogative, the parens patriae.

Honourable senators, to do less is unacceptable, even irresponsible and immoral. To know of the injustice of the divorce law regime currently in force and not to act forthwith to correct it is unconscionable. Further, such inaction is inconsistent with every principle on which we found government, and violates all that we consider to be just, honourable, and true. It violates every ethic of social and moral justice.

Honourable senators, we urge the minister to bring in a new Divorce Act, to honour the children of divorce, their families, and the people of Canada.

I urge all honourable senators to support this motion.

On motion of Senator DeWare, debate adjourned.

Legal and Constitutional Affairs

Committee Authorized to Meet During Sittings of the Senate

Hon. Lorna Milne, pursuant to notice of June 3, 1999, moved:

That the Standing Senate Committee on Legal and Constitutional Affairs have power to sit at 3:30 p.m. on Wednesday, June 9, 1999, and at 3:30 p.m. on Wednesday, June 16, 1999, even though the Senate may then be sitting, and that rule 95(4) be suspended in relation thereto.

Motion agreed to.

The Senate adjourned until Wednesday, June 9, 1999 at 1:30 p.m.

Debates of the Senate (Hansard)

Debates of the Senate (Hansard)

1st Session, 36th Parliament, Volume 137, Issue 146

Tuesday, June 8, 1999

The Honourable Gildas L. Molgat, Speaker

Table of Contents

Visitors in the Gallery

ROUTINE PROCEEDINGS

International Trade

Agreement Between Canada and the United States on Periodicals-Relevant Documents Tabled

Business of the Senate

Adjournment

Canada-Europe Parliamentary Association

Report on Council of Europe Preparatory Meetings at the European Bank for Reconstruction and Development Tabled

Report of the Delegation on the Second Session of the Pariamentary Assembly of the Council of Europe Tabled

Banking, Trade and Commerce

Motion to Authorize Committee to Meet During Sitting of the Senate

Legal and Constitutional Affairs

Notice of Motion to Authorize Committee to Meet During Sitting of the Senate

Canada-Europe Parliamentary Association

Report of the Delegation on the Second Part of the 1999 Session of the Parliamentary Assembly of the Council of Europe-Notice of Inquiry

ORDERS OF THE DAY

Foreign Publishers Advertising Services Bill

Motion to Adopt Report of Committee- Motion in Amendment-Votes Deferred

Criminal Code Corrections and Conditional Release Act

Bill to Amend-First Reading

Criminal Records Act

Bill to Amend-Second Reading

Referred to committee

Budget Implementation Bill, 1999

Third Reading-Motion in Amendment- Debate Suspended

Foreign Publishers Advertising Services Bill

Report of Committee Adopted

Third Reading

Budget Implementation Bill, 1999

Third Reading-Motion in Amendment- Debate Continued

Canadian Environmental Protection Bill, 1998

Second Reading

Referred to Committee

Criminal Code

Bill to Amend-Second Reading

Referred to Committee

Business of the Senate

Criminal Code

Bill to Amend-Second Reading-Debate Continued

International Search or Seizure Bill

Second Reading

Referred to Committee

Shipbuilding Industry

Lack of Government Support-Inquiry

Income Tax Act

Increase in Foreign Property Component of Deferred Income Plans-Motion Proposing an Amendment Adopted

National Defence

Debate Respecting Posting of Troops Outside Canada-Inquiry

Child Custody and Access

Government Response to Special Joint Committee Report-Inquiry-Debate Adjourned

Revenue Canada

Abusive and Illegal Tax Collection Tactics- Inquiry-Debate Adjourned

Children of Divorce

Motion of Affirmation and Resolution in Support of Entitlements-Debate Adjourned

Legal and Constitutional Affairs

Committee Authorized to Meet During Sittings of the Senate

1st Session, 36th Parliament,
Volume 137, Issue 146