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Debates of the Senate (Hansard)

2nd Session, 40th Parliament,
Volume 146, Issue 35

Wednesday, May 13, 2009
The Honourable Noël A. Kinsella, Speaker



THE SENATE

Wednesday, May 13, 2009

The Senate met at 1:30 p.m., the Speaker in the chair.

Prayers.

SENATORS' STATEMENTS

National Nursing Week

Hon. Wilbert J. Keon: Honourable senators, National Nursing Week is May 11 to 17. This year's theme is "Nursing: You Can't Live Without It!" The theme calls on Canadians to show appreciation for the vital role nursing plays in the health system and in their own lives. From birth to death, Canadians are affected by nursing.

Canada's 270,000 nurses not only influence patient outcomes, but have an impact on the health care system as a whole. The Canadian Nurses Association is the national professional voice for registered nurses and has been at the forefront of efforts to improve the quality and accessibility of health care for Canadians.

Earlier this year, the CNA released a report showing how nurses are helping to reduce wait times across the country. They are doing this by reducing the time patients spend in hospital, introducing programs that expedite treatments like chemotherapy and creating more efficient health care teams. Nurses are being creative and implementing solutions to address issues affecting the health care system. All of this work results in better health care for Canadians and a better health care system.

This week, the CNA will be releasing an important report on the state of nursing human resources in Canada. The report represents a picture of the number of nurses required to meet the health care needs of Canadians over the next 15 years. It also presents five policy scenarios that could effectively close the gap between the number of nurses we have and the number we need.

Also this week, the Canadian Nurses Foundation, which supports world-class Canadian health care by raising funds to advance nursing scholarships and research, will launch Nursing 4.0, a fundraising campaign to provide more nursing scholarships at all levels, certification awards and dollars for nursing research in Canada.

Canadians' health care needs are growing. National Nursing Week is an opportunity to reflect on the important role of nurses in helping to meet these needs and to recognize the work nurses are doing across the country.

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This includes the important contribution of one of our very own, Senator Lucie Pépin, who represents the senatorial district Shawinigan in the region of Quebec. Among her many nursing achievements is her work in the field of obstetrics and gynecology. A pioneer in birth planning in Canada, Senator Pépin helped to establish Quebec's first outpatient birth planning clinic in 1966.

National Nursing Week is an opportunity to profile the importance and effect of nurses on the lives of Canadians. As reflected in this year's theme, Canadians truly cannot live without nursing.

[Translation]

Hon. Lucie Pépin: Honourable senators, I am always proud to mark National Nursing Week, a week that celebrates my profession.

"Nursing: You Can't Live Without It!" is the theme of this year's week, and truer words were never spoken. Nurses are a vital part of our health care system. They play an essential role in patient management and advocate for patients' needs and rights.

By listening and sharing their knowledge, nurses help patients understand and accept illnesses and go through treatment. The contribution nurses make goes beyond clinical practice. They initiate informative, preventive and educational actions. They are active in educational institutions, where they give training and direct research. They serve in the Canadian Armed Forces, sometimes in the world's hottest spots. Nurses work with the public authorities to prepare our communities for the possibility of epidemics or disasters.

I would like to take this opportunity to again express my full support and my great admiration for Canada's nurses, who are always on the front lines. A nurse does not give up easily, but our health care system is fraught with challenges that complicate nurses' working lives. Staff shortages and deteriorating working conditions make it difficult for nurses to do their jobs safely. The solution to this problem is to pay nurses better and give them greater job security, but above all, to give them an appropriate work environment. This is how we can retain our current nursing staff and make it easier to recruit new nurses. Progress has been made in recruitment, but there is a serious shortage of nurses across the country.

As I said yesterday, if significant steps are not taken now, Canada will have a shortage of 60,000 nurses in 10 years. While it is true that the nursing shortage is a global problem, some countries such as ours have more pressing needs. The Canadian Nurses Association is constantly sounding the alarm. We need to be more attentive to these warnings and give more thought to the realistic solutions that this association has been proposing for a number of years.

Honourable senators, for the greater good of our health care system, I invite you to support nurses, who only want to do their job properly.

[English]

National Police Week

Hon. Catherine S. Callbeck: Honourable senators, this is National Police Week, and I would like to acknowledge the Canadian police officers across the country who ensure our public safety and security with such commitment and dedication.

Recently, I met with representatives of the Canadian Police Association. One of their concerns was the implementation of a public safety occupation compensation benefit, which would be, in their words, "an appropriate way for the nation to recognize the sacrifice made by a public safety officer and to address the financial security of the officer's family."

This type of benefit is not new. Since 1976, the Public Safety Officer Benefit in the United States has been available to the families of public safety officers who are killed or disabled in the course of their duties.

The typical death benefit for the family of a Canadian officer killed in the line of duty is two years' salary. Beyond that, they are required to take out private life insurance — life insurance for brave men and women who put their lives on the line for the rest of us. Police officers chase and catch violent criminals. They take terrible risks for the benefit of their fellow citizens. They save lives. Sometimes, they make the ultimate sacrifice while performing their duty.

Honourable senators, none of us need reminding that police work is a dangerous profession. Studies on public safety occupations show that police officers suffer the highest rate of job-related illness and injury of any occupation, the result of the countless dangers they encounter every day while they protect the lives and property of Canadians. Officers are aware of those risks but they admirably still choose to stand up for us all.

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Honourable senators, please join with me in paying tribute to Canada's police forces, all the dedicated men and women across the country who contribute so much to keep us and our communities safe. I also urge the federal government to give serious consideration to the implementation of a national public safety occupation compensation benefit; it would be a most fitting tribute to the officers who give their lives while protecting Canadians.

Sri Lanka

Hon. Mobina S.B. Jaffer: Honourable senators, thousands of Canadian Tamils came to our parliamentary doorstep asking the government to stop the killing of their family members in Sri Lanka. After 26 years of bloodshed, the Sri Lankan civil war is coming to a bloody end. In this war, thousands of Tamil civilians were caught in the crossfire between two opponents who refuse to give an inch.

Honourable senators, these civilians did not choose this war and have no control over the Tamil Tigers who presume to act in their interests. They are victims who have suffered a long time without intervention from the international community. The fundamental freedoms that Canadian Tamils have exercised, specifically the freedom of peaceful assembly and the freedom of thought, belief, opinion and expression, are what makes Canada a human rights leader.

No parliamentarian accepts any association with a terrorist organization, but we do have a responsibility to hear the voices of Canadian citizens. In this instance, the voices are those of Canadian Tamils.

In 2004, as your Canadian envoy for United Nations Security Council Resolution 1325, I worked with Canadian Sri Lankan women across the country in partnership with the South Asia Partnership Canada, the Forum of Federations and the Canadian Committee on Women, Peace and Security as well as the Canadian government. The result was a report entitled Ripples Across the Ocean. I also attended, on your behalf, discussions in Colombo, Sri Lanka, with the Sri Lankan foreign minister.

UN Security Council Resolution 1325 reaffirms the important role of women in the prevention and resolution of conflicts, peace negotiations, peacekeeping and humanitarian response while stressing the importance of their equal participation in all efforts for the maintenance and promotion of peace and security.

We know, honourable senators, that women and children account for the vast majority of those adversely affected by armed conflict. During our consultations in 2004, women's voices were strong and the participants came from diverse, professional, religious and cultural backgrounds. The resulting report was full of promise and suggested ways the Canadian government and the Canadian Sri Lankan women's community can work together to help empower women in Sri Lanka.

One suggestion included in the report was that Canadian women use their experience and influence in Canadian civil society to educate and empower their counterparts in Sri Lanka on issues of governance and peace process. It also included the development of grassroots programs dealing with gender issues, such as physical and sexual violence as well as the economic marginalization of women. The report advocated for the formation of community links to establish healing and wellness programming, and to set up community structures benefiting women and children affected by war.

Honourable senators, it was an enriching experience to have an opportunity to meet with a united Canadian Sri Lankan women's community. We had hoped the consultations would be a first step toward healing, and that they would help the Canadian government understand Sri Lankan culture as well as the importance of forming meaningful partnerships with Sri Lankan women.

Today, thousands of people are being mutilated or killed, and Canada should take steps to stop the slaughter. Canadian citizens have come to the doors of Parliament looking for help for their families. We must act. The report sets out what we can do.

I ask honourable senators to reflect on how we would feel if one of our family members were in peril. Canadian Sri Lankans are part of our Canadian family and we need to work with fellow Canadians to stop this violence.

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Canada's Sports Hall of Fame

Hon. J. Trevor Eyton: Honourable senators, Canada's Sports Hall of Fame recognizes and honours Canada's sports heroes. It is the hall's mission to inspire Canadian identity and national pride by telling the compelling stories that make up Canada's sports history.

In October 2008, following a nationwide request for proposals, Canada's Sports Hall of Fame announced that it would be relocating to Calgary, Alberta. At one time, the hall was expected to be located in Ottawa, our national capital. That effort was abruptly terminated by a previous government after the hall had invested some $2 million in planning, including engineering and architectural work.

The new hall will consist of some 40,000 square feet in Canada Olympic Park, complementing the new Athletic and Ice Complex. The hall is expected to open its doors in February 2011 — debt free and self-sustaining.

The total project cost to develop the hall and museum is some $50 million. The hall anticipates it will make up the entire financing package with funding from the federal government, the Province of Alberta, the City of Calgary and with the financial support of individuals and businesses nationwide, which will include an endowment fund. Organizers look forward to welcoming visitors to the new hall and museum in February 2011.

In the meantime, the hall continues with its many activities, including the recent announcement of the members of the Class of 2009 to be inducted into the hall at a gala ceremony in Toronto on November 3 this year. The inductees comprise a veteran of five Olympic Games, a pair of hockey greats, the all-time leading money winner in standardbred racing, a national collegiate basketball coaching icon and two legends from the Edmonton Eskimos professional football dynasty.

The inductees are kayaker Caroline Brunet, who won 10 world championship gold medals; John Campbell, who is widely recognized as standardbred racing's all-time greatest driver, with career winnings of more than $200 million and 42 Breeders Crown victories; Mark Messier and Angela James, who are two legendary leaders representing hockey — Messier as the linchpin of the Edmonton Oilers NHL dominance in the 1980s and the captain of the New York Rangers' first Stanley Cup win in 1993-94, and James, a player and pioneer in the development of the women's game and a member of gold medal world championship teams in 1990, 1992, 1994 and 1997; quarterback Warren Moon, who joined the Edmonton Eskimos in 1978, where he played for six seasons, leading them to five consecutive Grey Cup championships from 1978 through 1982; Hugh Campbell, who played for three years with the Saskatchewan Rough Riders and later became general manager of the Eskimos and a force in CFL development; and Ken Shields, who has more coaching victories than any man in the history of Canadian inter-university sport, making him a four-time winner as Coach of the Year and a member of the Order of Canada in 1988.

All seven are very special Canadians who serve as an inspiration to us all.


[Translation]

ROUTINE PROCEEDINGS

Study on Issues Related to Mandate

Sixth Report of Energy, the Environment and Natural Resources Committee Tabled

Hon. W. David Angus: Honourable senators, I have the honour to table, in both official languages, the sixth report of the Standing Senate Committee on Energy, the Environment and Natural Resources, entitled With Respect, Canada's North.

(On motion of Senator Angus, report placed on the Orders of the Day for consideration at the next sitting of the Senate.)

The Estimates, 2009-10

Parliament Vote 10—Second Report of Standing Joint Committee on the Library of Parliament Presented

Hon. Sharon Carstairs, joint chair of the Standing Joint Committee on the Library of Parliament, presented the following report:

Wednesday, May 13, 2009

The Standing Joint Committee on the Library of Parliament has the honour to present its

SECOND REPORT

In accordance with its Order of Reference of Tuesday, March 3, 2009, your Committee has considered Vote 10 under PARLIAMENT in the Main Estimates for the fiscal year ending March 31, 2010, and reports the same, less the amount granted in Interim Supply.

Respectfully submitted,

SHARON CARSTAIRS
Joint Chair

The Hon. the Speaker: Honourable senators, when shall this report be taken into consideration?

(On motion of Senator Carstairs, report placed on the Orders of the Day for consideration at the next sitting of the Senate.)

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[English]

Rules, Procedures and the Rights of Parliament

Fourth Report of Committee Presented

Hon. Donald H. Oliver: Honourable senators, I have the honour to present the fourth report of the Standing Senate Committee on Rules, Procedures and Rights of Parliament which deals with a reference from the Senate on April 21, 2009.

(For text of report, see today's Journals of the Senate, p. 691.)

The Hon. the Speaker: Honourable senators, when shall this report be taken into consideration?

(On motion of Senator Oliver, report placed on the Orders of the Day for consideration at the next sitting of the Senate.)

Canadian NATO Parliamentary Association

Meetings of Standing Committee and Secretaries of Delegation, The Hague, Netherlands, March 28-30, 2008—Report Tabled

Hon. Jane Cordy: Honourable senators, I have the honour to table, in both official languages, the report of the Canadian parliamentary delegation of the Canadian NATO Parliamentary Association to the Meetings of the Standing Committee and the Secretaries of Delegation, held in The Hague, Netherlands, from March 28 to 30, 2008.

Meetings of Standing Committee and Secretaries of Delegation, Vilnius, Lithuania, April 4-6, 2009—Report Tabled

Hon. Jane Cordy: Honourable senators, I have the honour to table, in both official languages, the report of the Canadian parliamentary delegation of the Canadian NATO Parliamentary Association to the Meetings of the Standing Committee and the Secretaries of Delegation, held in Vilnius, Lithuania, from April 4 to 6, 2009.

Canada Elections Act
Parliament of Canada Act

Allotment of Time for Debate—Notice of Motion

Hon. Wilfred P. Moore: Honourable senators, I give notice that, at the next sitting of the Senate, I will move:

That it be an Order of the Senate that on the first sitting day following the adoption of this motion, at 3 p.m., the Speaker shall interrupt any proceedings then underway; and all questions necessary to dispose of third reading of Bill S-224, An Act to amend the Canada Elections Act and the Parliament of Canada Act (vacancies) shall be put forthwith without further adjournment, debate or amendment; and that any vote to dispose of Bill S-224 shall not be deferred; and

That, if a standing vote is requested, the bells to call in the Senators be sounded for fifteen minutes, after which the Senate shall proceed to take each vote successively as required without the further ringing of the bells.

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Fisheries Act

Cessation of Commercial Seal Hunt—Presentation of Petition

Hon. Mac Harb: Honourable senators, I have the honour to present a petition signed by residents of Ontario calling on the government to amend the Fisheries Act to end the commercial seal hunt.


QUESTION PERIOD

Justice

Violence Against Aboriginal Women and Children

Hon. Lillian Eva Dyck: Honourable senators, my question is for the Leader of the Government in the Senate. As honourable senators may imagine, I wish to address the issue of missing and murdered Aboriginal women and children. I suspect that everyone in the Senate chamber who has been watching the news recognizes this picture of Victoria Stafford, a young child who went missing about one month ago on April 8. She is a Caucasian girl. We have all seen the picture on television.

The Hon. the Speaker: I regret to interrupt the honourable senator, but props are not permitted in the chamber.

Senator Dyck: Honourable senators, I was trying to put a human face to the issue.

I doubt that anyone has heard of or remembers Tamra Keepness, who went missing five years ago when she was only 5 years old. Coldly, it is still called a "cold case." As I have said in the chamber in the past, the issue of murdered and missing Aboriginal women and children has not captured the hearts, spirits and minds of mainstream Canada.

This issue has come to my attention again because three young women have gone missing in Manitoba over the last three years. My questions are: When will this stop? What will the government do to protect Aboriginal women and children? What will the government do to stop Aboriginal women from going missing and being murdered?

Hon. Marjory LeBreton (Leader of the Government and Minister of State (Seniors)): Honourable senators, Senator Dyck has raised this serious matter before. All honourable senators are horrified by the level of violence and tragic loss of family members in Aboriginal communities and the severe impact that it has on their communities.

The honourable senator asked when this will stop. I wish I had an easy answer for her. There is no easy answer to such a question. I have to believe that the government, including the Minister of Indian Affairs and Northern Development, the Minister of Justice, the Minister of Health and all those who work directly with our Aboriginal communities, are doing and will do everything humanly possible to increase the level of support for our Aboriginal communities and to treat crimes against Aboriginal Canadians in the same way. We have to believe that a crime is still a crime and that it makes no difference to policing officials because a victim is still a victim.

I am able to offer only assurances on behalf of the government that matters such as those raised by Senator Dyck are treated seriously. If the honourable senator or anyone else has information or a way to offer assistance as to what more can be done, I would be happy to communicate that to my colleagues in government.

Senator Dyck: On a supplementary, I am gratified to hear that the government considers it a serious issue. The government held a forum in Ottawa on March 27 and 28, 2006, which brought together the territorial, provincial and federal ministers on the status of women. Can the honourable leader tell the house what action has occurred following the recommendations of that forum? What has the government done in that respect?

Senator LeBreton: Honourable senators, I am not aware of a follow-up action, although I am sure it has been considerable. I will take Senator Dyck's question as notice and refer it to my honourable colleague Helena Guergis, Minister of State for the Status of Women. As well, I will apprise my other cabinet colleagues of the seriousness of this issue.

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Senator Dyck: Similarly, there was a "Walk for Justice" that originated in Victoria. Aboriginal women walked across Canada from Victoria, B.C. to Ottawa in September 2008. They presented a petition to a member of the government, who promised they would provide a response with regard to their request for justice on this issue. To my knowledge, that member of the government has not responded. I want to know who received the petition and what the government intends to do with respect to the request from this group?

Senator LeBreton: Honourable senators, I remember the walk because I could not imagine walking that distance. I will ascertain exactly who, on behalf of the government, received this petition and what, if anything, has been done upon its receipt.

Senator Dyck: In October 2008, Amnesty International, with respect to the UN Convention on the Elimination of All Forms of Discrimination against Women, recommended the federal government in Canada lead a coordinated effort to address violence against indigenous women in Canada. What has the government done to address this particular recommendation?

Senator LeBreton: Honourable senators, on the issue of violence against women, in September, the ministers responsible for the justice portfolios discussed the whole issue of violence against women, missing persons and missing Aboriginal women. A working group of senior criminal justice officials was established to review the criminal justice system to improve the system to respond to cases involving killers who target vulnerable women. I believe the intention of this working group was to report this spring. I appreciate the honourable senator bringing this issue to my attention because their intention was to report about it now, so I will find out if and when we can expect to receive it.

Senator Dyck: Honourable senators, the most important people to consider are the families of the women and children who have gone missing or have been murdered. What will this government do to help support those families as they go through the process? Will the government provide resources to them to put up posters and to support them while they go through the court system, when they must face daily the people who are charged with the murder of their loved ones? What resources have been provided to those families?

Senator LeBreton: Honourable senators, one initiative, I believe, was called "Sisters in Spirit." That initiative was undertaken by the Department of Indian and Northern Affairs and Minister Chuck Strahl. I speak from memory here, but I think Sisters in Spirit was an organization set up in cooperation and collaboration with the Native Women's Association. I remember talking about the organization and hearing about it. I do not have at my fingertips the mandate or what the Sisters in Spirit and the Department of Indian Affairs are doing under this particular program, but I will be happy to find out.

Public Safety

Sensitivity Training for Members of the Royal Canadian Mounted Police

Hon. Gerry St. Germain: Honourable senators, I believe this issue transcends all politics. In my province of British Columbia, we are dealing with an issue that is horrific. In the case of the murders that took place in Port Coquitlam, where I was a member of Parliament years back, a man has been charged and convicted. The majority of these women were Aboriginal women.

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There have been multiple murders of Aboriginal women on the highway between Terrace and Prince George. I am certain if these women were non-Aboriginal, things would have been done differently, and that is by all governments, whether it be the NDP, Liberals or Conservatives in B.C. or right across this country.

We have established special squads for terrorism, gangs and so forth. This situation demands a special squad of some form or another because women are continuing to be murdered. There are murders of this type in Edmonton, Saskatchewan and Manitoba, and I am appalled that we, as a society, have stood back and allowed this situation to deteriorate to this level.

The present government is making an attempt with their law and order legislation; but having said that, my question is for the Leader of the Government in the Senate. What sensitivity training is there at the federal police level, because that is the level that often deals with these issues, to give these matters the same importance it would give another case?

I can think of various murders that have taken place, and the level of importance in regard to these murders does not appear to be at the same level as murders of non-Aboriginal women or people in general.

Can the Leader of the Government in the Senate answer as to whether there is sensitivity training within the police system?

Hon. Marjory LeBreton (Leader of the Government and Minister of State (Seniors)): I believe there is training, although I will confirm the degree and the depth of the training.

The Minister of Indian Affairs and Northern Development, your fellow British Columbian, the Honourable Chuck Strahl, is a tremendous advocate in this area. I have heard him speak to this subject many times. He is concerned. He works with native women's organizations and programs such as the Sisters in Spirit I mentioned a few moments ago.

As the honourable senator knows, and as I responded in answer to previous questions, Minister Strahl and his department are funding the construction of five new women's shelters for First Nations communities in British Columbia, Alberta, Manitoba, Ontario and Quebec. The Department of Indian and Northern Affairs have partnered with Canada Mortgage and Housing Corporation and are working with First Nations on these projects and on the actual physical construction. They were scheduled to begin work this spring and I hope that work has started. I have every reason to believe it has but I will update myself on that matter.

Hon. Sharon Carstairs: Honourable senators, my supplementary question is to Leader of the Government in the Senate. The honourable minister, in response to a variety of questions, has indicated that there is a concern by the Minister of State with responsibility for the Status of Women and the Minister of Indian Affairs and Northern Development.

However, almost all these murders have occurred in Western Canada, and in every Western province it is the RCMP — who report indirectly to the Minister of Public Safety — who police these areas.

Can the leader tell the house today what kind of task force is in place within the RCMP to investigate these murders — because often they are going undetected — and to provide appropriate supports for women in communities so that justice can be served?

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Senator LeBreton: As I indicated in my answer to Senator St. Germain, I believe that the RCMP has special training in this area. I am not cognizant of the full extent of the training. As I mentioned in my answers a few moments ago, the government is working with Aboriginal women.

I am well aware that the vast majority of these horrendous crimes are committed in the Western provinces, although there are many examples in Ontario, Quebec and Atlantic Canada as well.

I will make inquiries of the Honourable Peter Van Loan, the Minister of Public Safety, and report to honourable senators on the activities that the RCMP is undertaking to combat this very serious problem.

The Cabinet

Investigation into Violence Against Aboriginal Women and Children

Hon. Mobina S.B. Jaffer: Honourable senators, my question is to Leader of the Government in the Senate. I detected from the way she answered the foregoing questions that she certainly understands this issue, feels compassionate and wants to do something about this issue.

In light of the responses the leader has given this chamber, would she recommend to cabinet that there be an investigation or inquiry as to why there has been little to no investigation on the disappearance of these women? How can it be that so many women have disappeared or been killed without a resulting investigation? Will the Leader of the Government in the Senate recommend an investigation?

Hon. Marjory LeBreton (Leader of the Government and Minister of State (Seniors)): Honourable senators, I do not think any of us can say that there has been no investigation on these matters. I cannot believe that would be the case.

This is a serious issue and it disproportionately affects Aboriginal women, children and their families. I am equally confident that we live in a society with a police force that treats these crimes seriously. I would be surprised to find that is not the case. In any event, I will ask for explicit details on the stages of investigation of these various cases. As the honourable senator knows, and as we all acknowledge, there are many of them.

Public Safety

Community, Contract and Aboriginal Police Services

Hon. Colin Kenny: Honourable senators, the Leader of the Government may have forgotten, but there is a significant group within the RCMP called CCAPS, the Community, Contract and Aboriginal Police Services. CCAPS is a small but very active group made up principally of very skilled Aboriginal officers.

If the leader could focus her inquiries there and report back to the house, it would be most helpful.

Hon. Marjory LeBreton (Leader of the Government and Minister of State (Seniors)): I thank Senator Kenny for that comment. I am aware of the group to which the honourable senator refers. I am certain that when the various departments of government craft a response to these questions, their work will be factored into the answer. I appreciate the honourable senator's question.

Finance

Taxation

Hon. Percy Mockler: Honourable senators, recent comments by the Leader of the Opposition in the other place have caused alarm for many Canadians and New Brunswickers. At a time of global economic difficulty, Mr. Ignatieff has mused publicly about raising taxes.

Some Hon. Senators: Oh, oh!

Senator Mockler: Yes, you can laugh, honourable senators. In fact, his statement was quite clear: "We will have to raise taxes."

Some Hon. Senators: Oh, oh!

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Senator Mockler: Honourable senators, this shows just how out of touch the Liberals and their leader are with ordinary Canadians and New Brunswickers.

My question, honourable senators, is for the Leader of the Government in the Senate. Can the minister elaborate on — honourable senators can laugh — what measures the government has taken to reduce, not increase, the tax burden of Canadians and New Brunswickers?

Senator Comeau: Finally, a good question!

Hon. Marjory LeBreton (Leader of the Government and Minister of State (Seniors)): That is an excellent question, well put and easily understood. Not only did the Leader of the Opposition say he would have to raise taxes, but he said last December that he would also consider raising the GST back to its former level.

Senator Cowan: What did Mr. Mulroney say about the GST?

Senator LeBreton: Mr. Mulroney actually said it was Mike Wilson's idea.

Since we are talking about the GST, during the 1993 election campaign, the Liberals ran on the platform that they would "axe the tax." There was a huge demonstration here in the Senate.

In any event, the honourable senator has asked a serious question and I am happy to provide a serious answer.

Unlike the tax-and-spend opposition, we do not believe Canadians should have to pay more taxes. Since coming to office, we have cut taxes in every way government collects them — personal, consumption, business, excise and more.

Tax Freedom Day, which is the day everyone knows on which Canadians stop paying the government and start paying themselves, is now almost two weeks earlier than under the Liberals because of our actions.

In order to help reduce the tax burdens of Canadians and their families, we have already reduced the GST from 7 to 6 to 5 per cent and cut the lowest income tax rate. We have moved almost 950,000 low income Canadians completely from the tax rolls. Many seniors and people in more remote areas are affected by these measures. We have introduced important tax credits, such as the Working Income Tax Benefit, known as WITB. We have delivered real tax relief to senior couples through pension income splitting, and we are reducing taxes on savings with the landmark Tax-Free Savings Account, which came into effect January 1 and which has been a huge success. It is accessed by many Canadians, seniors and younger.

As part of Canada's Economic Action Plan, we are leaving more money in Canadians' pockets to stimulate our economy and give business more freedom to create jobs and make further investments.

Thank you for the question, Senator Mockler.

Prime Minister's Office

Appointments Process

Hon. Robert W. Peterson: Honourable senators, my question is to the Leader of the Government in the Senate. Yesterday, in response to a question from Senator Mitchell, she replied that her government "does not make appointments unless individuals are qualified, and the appointees come from all walks of life and all political parties." It is my understanding that an estimated 1,000 appointments have been made to date. Were all these appointments vetted through the appointments commissioner to provide transparency and due process?

Hon. Marjory LeBreton (Leader of the Government and Minister of State (Seniors)): Honourable senators, we had attempted to establish an appointments commissioner in the last Parliament, which was defeated by the opposition in committee. In our election platform last fall, we again promised to establish this position.

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I wish to assure honourable senators that there is an appointments oversight body made up of three public servants under the jurisdiction of the Director of Appointments, who is located in the Prime Minister's Office. A considerable amount of work has been done in vetting appointments. For instance, all appointments to the National Parole Board, to various immigration and refugee boards, and to various quasi-judicial bodies are now put to a rigorous test that must be passed to be considered. That vetting has cleaned up the appointments process considerably both from the past government, and, I dare say, from the government before that as well, when I was in charge of appointments.

Honourable senators, the appointments regime that operates under the current government has made massive and marked improvements over the appointments processes in the past, even the one for which I was responsible at that time.

We are confident in both the qualifications and the quality of the various people who are appointed by the government to various positions. Each of them is qualified for the positions to which they have been appointed. In all cases, we seek out the best people and we do not judge them by their political affiliation. In fact, many appointees of our government have political affiliations other than affiliations with this government. Furthermore, some appointees have no political affiliation at all.

Senator Peterson: In both 2006 and 2008, the leader's government made campaign promises that it would appoint an appointments commissioner. When does the leader's government intend to appoint this commissioner?

Senator LeBreton: We made the appointment in the last Parliament, only to have the whole process overturned by the combined opposition in the other place.

Some Hon. Senators: Shame.

Senator LeBreton: We then made the same commitment in the campaign last fall and the government fully intends to live up to this commitment. We are in the process of establishing this particular body. Suffice it to say that there are three qualified public servants who assist the appointments secretary in the Prime Minister's Office to vet possible candidates and to ensure that all appointees of this government are qualified for the positions to which they are being appointed.

Senator Peterson: Is the leader saying that the last person who was put forward, who was rejected, was the only person capable of performing this function in Canada? I find that claim to be appalling.

Senator LeBreton: I did not say that at all, honourable senators. I said that we lived up to our promise. We advanced the process and the efforts of the combined opposition in the last Parliament, and "the coalition," as my colleague, Senator Manning, referred to it, thwarted our efforts. That is why, in the last election platform, we recommitted ourselves to this position. We will honour and live up to that commitment.

Finance

Venture Capital System

Hon. Art Eggleton: Honourable senators, I want the kind of positive response that Senator Mockler received.

An Hon. Senator: Way to go, Senator Mockler!

Some Hon. Senators: Hear, hear!

Senator Eggleton: I am sure the leader will give me an equally nice response to my question.

According to a recent report by Canada's Venture Capital and Private Equity Association, the venture capital system in Canada is severely challenged. Between 2003 and the first three quarters of 2008, venture capital investment as a percentage of gross domestic product plummeted in Canada while investment rose sharply in the United States. This situation is nothing new. As the Standing Senate Committee on Social Affairs, Science and Technology pointed out in last year's report, entitled Mobilizing Technology to Canada's Advantage:

Canada's deficit in available venture capital funds compared with our competitors, particularly the United States, results in many small companies either failing, or being sold to foreign investors.

That report was supported by both sides of this chamber.

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Venture capital is very important to the Canadian economy. It infuses much-needed private capital into early-stage, high-potential companies in the knowledge economy. That leads to new products and new jobs.

Will the government take action and work with firms to increase the availability of venture capital for Canadian entrepreneurs?

Hon. Marjory LeBreton (Leader of the Government and Minister of State (Seniors)): I thank the honourable senator for the question. I will be responding on the area of innovation in the context of science and technology when I speak to Senator Cowan's inquiry later this afternoon.

It is important for our industries and innovators to have the support of the government. Our government has put considerable sums of money into the areas of science and technology, research, productivity and innovation. I will be addressing the subject later today.


ORDERS OF THE DAY

Transportation of Dangerous Goods Act, 1992

Bill to Amend—Third Reading

Hon. John D. Wallace moved third reading of Bill C-9, An Act to amend the Transportation of Dangerous Goods Act, 1992, as amended.

He said: Honourable senators, I am pleased to address the Senate today at third reading of Bill C-9, An Act to amend the Transportation of Dangerous Goods Act, 1992, as amended. I would like to thank members for their swift consideration of this important bill in committee and here in the chamber.

As we heard from the minister and parliamentary secretary at committee last Wednesday, the changes to this bill will give the government and the RCMP the tools they need to protect public safety during the transportation of dangerous goods.

In Canada, we have over 30 million shipments of dangerous goods every year. These shipments are essential to our economy, our quality of life and our health. Incidents such as the terrorist attacks of September 11, 2001 and the chlorine accident in Mississauga in 1979 have changed the way we see these threats.

We brought forward these amendments to the Transportation of Dangerous Goods Act to update our current regime regulating the transportation of these goods. This will help us respond to the lessons learned over the last decade, while also helping us to meet today's realities and tomorrow's challenges.

This amended legislation will enhance our current security prevention program and use existing industry capacity, through the Emergency Response Assistance Plans program, to respond to an accident or incident.

The amendments to the act will give Canada the enabling authorities to allow us to meet our international obligations and lead in the development of new dangerous goods regulations for Canada. It will make Canada a leader on the world stage.

Stakeholders have commented on the importance of this bill and the impact it has on the planning of major events, such as the upcoming Vancouver 2010 Winter Olympics and the G8 meeting.

Bill C-9 bill will provide the emergency regulations and security response capability required should there be an identified terrorist threat or a terrorist incident during such a major event.

With the passage of Bill C-9, as amended, Canadians will enjoy enhanced public safety with the addition of a world-class security prevention and response program.

Bill C-9 is a very important and timely piece of legislation that will prepare Canada for the next decade of growth in the transportation of dangerous goods. It will also be extremely important for the promotion and enhancement of public safety during the transportation of dangerous goods.

I encourage all senators to vote to pass this bill, as amended, so that Canadians have the safety and the security protection they deserve.

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

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

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Arctic Waters Pollution Prevention Act

Bill to Amend—Second Reading

On the Order

Resuming debate on the motion of the Honourable Senator Lang, seconded by the Honourable Senator Tkachuk, for the second reading of Bill C-3, An Act to amend the Arctic Waters Pollution Prevention

The Hon. the Speaker: Are honourable senators ready for the question?

Hon. Senators: Question.

The Hon. the Speaker: It was moved by the Honourable Senator Lang, seconded by the Honourable Senator Tkachuk, that Bill C-3, An Act to amend the Arctic Waters Pollution Prevention Act, be read the second time.

Hon. Hector Daniel Lang: Honourable senators —

The Hon. the Speaker: The honourable senator is entitled to speak, but I must advise the house that if he speaks, it has the effect of closing the debate at second reading.

Senator Lang: Honourable senators, I rise to respond to the comments made by my colleague Senator Rompkey. I want to begin by saying that I appreciate the words he spoke the other day in respect of this bill, which is very historic and symbolic as far as Canada is concerned in our part of the world.

In years past, Senator Rompkey and I had a government-to-government relationship, with him representing the Government of Canada and myself the Government of Yukon. As I look back on those years, I appreciate that every time Senator Rompkey brought an issue to the table, it was substantive and showed a clear understanding of rural Canada. From our part of the world, we very much appreciated the time and effort Senator Rompkey put in when he was part of the cabinet of Canada.

Honourable senators, Senator Rompkey raised a couple of points in debate, and there are a number of items that I think should be put on the record to show what Canada is doing in the North, for the North and on behalf of the North. I would like to go through a number of major projects and programs that are under way, which started about a year ago, and further programs announced in Budget 2009, which was passed by this house.

I refer to Senator Rompkey's own report, the report on the Canadian Coast Guard that was tabled a number of days ago. Seven hundred and twenty million dollars has been allocated for a new Canadian Coast Guard icebreaker — a substantial and major commitment for Canadian taxpayers — that will help police the North and fulfill the obligations that we are undertaking through legislation that is before the house.

I want to point out another issue that I think is very important. Twenty million dollars' worth of funding was put forward in Budget 2008 to carry out comprehensive mapping of Canada's seabed. Further to that, the Prime Minister, in August of that year, made a commitment of $100 million for five years to map the northern geological reserves. This is key in developing the economy of the North. That information will put us in a position of self-sufficiency so that we can promote and attract investment to the various regions of Canada's North.

Senator Rompkey also referred to the question of wharves and those types of developments in the North. I point out to him that $8 million has been put forward in Pangnirtung.

Another crucial area is the question of whether the people who live in the North are being consulted or put in charge of taking care of the North. My understanding is that the Canadian Rangers will be expanded by about 900 members in the forthcoming years, which is substantive as far as the North is concerned. In conjunction with that development, I believe that 110 environmental officers are being trained in Algonquin Park this year to help accommodate and meet our present environmental obligations and responsibilities, as well as what we will be taking on as a result of the measures contained in this bill.

I want to say to the good senator that I think we are moving past symbolism to the point that we are actually doing something. Commitments are being made, for which the government should receive some credit. That is not to say that more cannot be done, but at the same time, as we move ahead and continue to develop, and as we experience climate change in the Yukon, the Northwest Territories and other parts of the North, the reality is that this area will become a much more open waterway. We will have that much more responsibility to take on as time passes.

Honourable senators, it was my impression that Bill C-3 would be referred to the Standing Senate Committee on Energy, the Environment and Natural Resources. My understanding is that there has been agreement on both sides of the chamber that the bill will go to the Standing Senate Committee on Transport and Communications. I want to express my disappointment to some degree because I was hoping to have the bill come to the committee of which I am a member. I am sure the senator from the Northwest Territories shares that thought as well. However, hopefully I can attend some of those committee meetings.

I would like to move that Bill C-3, An Act to amend the Arctic Waters Pollution Prevention Act, be referred to the Standing Senate Committee on Transport and Communications for further consideration.

The Hon. the Speaker: Honourable senators, the speech by Senator Lang has closed debate, unless there are questions or comments on what he had to say.

I will put the question. It was moved by the Honourable Senator Lang, seconded by the Honourable Senator Tkachuk, that Bill C-3, An Act to amend the Arctic Waters Pollution Prevention Act, be read the second time. Is it your pleasure, honourable senators, to adopt the motion?

(Motion agreed to and bill read second time.)

Referred to Committee

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

(On motion of Senator Lang, bill referred to the Standing Senate Committee on Transport and Communications.)

[Translation]

The Senate

Motion to Resolve into Committee of the Whole to Hear Representatives of Aboriginal Community Adopted

Hon. Gerald J. Comeau (Deputy Leader of the Government) pursuant to notice of May 12, 2009, moved:

That at 3 o'clock p.m. on Tuesday, June 2, 2009, the Senate resolve itself into a Committee of the Whole in order to hear from the President of the Inuit Tapiriit Kanatami, for the purpose of reporting on progress made on commitments endorsed by parliamentarians of both Chambers during the year following the Government's apology to former students of Indian Residential Schools.

He said: Honourable senators, June 11 will be the anniversary of the apology to aboriginal peoples for the treatment they received in residential schools in the early 20th century. One year ago, we welcomed four groups to the Senate in Committee of the Whole. This year, we have chosen to invite them for a second meeting to determine what has happened over the past year.

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Unfortunately, Mary Simon, a member of the Inuit group representing Northern women, has an engagement that week and is not available on the date we had chosen. In order to have good representation from this group, we suggest inviting them on June 2. For that reason we are requesting that we meet in Committee of the Whole on June 2.

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

[English]

Scientific Research

Inquiry—Debate Continued

Leave having been given to proceed to Other Business, Other, Inquiry No. 10:

On the Order:

Resuming debate on the inquiry of the Honourable Senator Cowan calling the attention of the Senate to the critical importance of scientific research to the future of Canada and to the well-being of Canadians.

Hon. Marjory LeBreton (Leader of the Government and Minister of State (Seniors)): Honourable senators, it is my great pleasure to rise today to speak directly to the false charge by the opposition and some in the media that the government's support for science, technology and innovation has been diminished.

After the Honourable Senator Cowan rose and spoke about this issue on March 31, I thought it important to respond to what is, at best, a selective reading of the government's actions on this important file and, at worst, an outright distortion of the facts.

Honourable senators, let me state, without equivocation, that the government values and supports technology, and that we are not engaging in some Orwellian conspiracy to direct the content of scientific research. Contrary to what the Leader of the Opposition has suggested, we are not attempting to muzzle scientists. Honourable senators, the opposite has been occurring. Scientists have praised this government's actions and spending announcements.

For example, in response to the government's Economic Action Plan, Genome Canada's board of directors issued the following statement:

Genome Canada is pleased with the federal government's 2009 budget in which millions will be invested in research infrastructure over the next two years. This is good news for the scientific community across the country that needs to be at the cutting-edge of research infrastructure and new technologies in order to maintain Canada's competitiveness at the national and international level.

Honourable senators, this funding will fully fund all of Genome Canada's existing projects, including current projects like the Autism Genome Project to identify genes that are susceptible to autism, or the Designing Oilseeds for Tomorrow's Markets project that aims to use genomic technologies to develop canola with desired seed coat characteristics and decreased levels of anti-nutritional factors. It is anticipated that the results of this research will enhance the overall usefulness of canola seed, leading to improved meal for new food and feed applications and increased seed oil content.

This research will further enhance a $2.5 billion-a-year industry. What about forestry, where the Arborea II: Genomics for Molecular Breeding of Softwood Trees project aims to identify specific genes associated with growth and wood quality in species of softwood? This project will develop tools and protocols, making it possible to select well-adapted, high-performance spruce trees with high-quality wood. This project, in turn, will enhance and promote the competitiveness of Canada's forest industry.

Indeed, honourable senators, contrary to the doom and gloom espoused by my honourable colleague opposite, there is a great deal of real and meaningful research taking place in Canada. It is important to set the record straight, not only for the sake of the government and the public, but for the sake of our excellent researchers and scientists who must have been baffled and astonished to hear the Leader of the Opposition suggest that Canada is becoming a scientific and technological wasteland on the watch of the current government. Not only is this suggestion false, but it is highly irresponsible talk from a person who holds a leadership position in the Liberal opposition party.

For the sake of researchers and scientists, but also for the sake of a corrected record, I want to address my honourable colleague's remarks, in case Canadians start listening and believing the Liberal spin and think Canada's science and research community is on its way back to the Middle Ages.

The first distortion from my honourable colleague opposite regarding our government's science policy is the termination of the office of the National Science Advisor. While it is a fact that the government accepted the resignation of this one person, what he failed to mention is that, as part of the government's Science and Technology Strategy released in May 2007, the government appointed a national Science, Technology and Innovation Council with a mandate to advise the government on science policy and report on the state of science and technology in Canada.

This council membership is made up of 17 prestigious scientists, researchers, business leaders and senior officials in Canada's bureaucracy. For example, the chair of the council is Dr. Howard Alper, a respected member of Canada's science community, both internationally and domestically.

He is a distinguished university professor at the University of Ottawa, where his research spans organic and inorganic chemistry, with potential applications in the pharmaceutical, petrochemical and commodity chemical industries. Major awards to Dr. Alper include the Alcan Award for Inorganic Chemistry, 1986, the Bader Award for Organic Chemistry, 1990, and the Steacie Award for Chemistry, 1993. The Chemical Institute of Canada has presented Dr. Alper with the Catalysis Award, 1984, the Montreal Medal, 2003, and the CIC Medal, 1997, its highest honour. He also received the Urgel Archambault Prize, ACFAS, in physical sciences and engineering.

In 2000, the Governor General of Canada presented Dr. Alper with the first Gerhard Herzberg Canada Gold Medal in Science and Engineering, the most prestigious award in Canada for science and engineering. Dr. Alper is an Officer of the Order of Canada, and he has 500 publications and 37 patents.

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I could go on for some time listing the extensive qualifications of the other members of the Science, Technology and Innovation Council, but instead I will name each member of the council, without going into great detail with their biographies. It is important to put these people's names on the record to see the type of people who are assisting Dr. Alper on this council.

Dr. Francesco Bellini is the Chairman, President and CEO of Neurochem, an industry leader in the development of therapeutic drugs for the central nervous system.

Mr. Eric Bergeron has 18 years of global international management experience in high-tech industries, including business development, sales, technology and finance. He is the founder of Optosecurity Inc., a venture-funded company that develops breakthrough security products for the transportation and critical infrastructure markets.

Mr. Richard Dicerni, who is well known to most of us, is the Deputy Minister of Industry Canada in the Canadian bureaucracy.

Mr. David B. Fissel has his M.Sc. in physical oceanography from the University of British Columbia, and he worked as a research oceanographer at the Institute of Ocean Sciences of the Department of Fisheries and Oceans.

Mr. Peter MacKinnon is President of the University of Saskatchewan.

Dr. Terence Matthews, who is particularly known to many people around Ottawa, is the non-executive chairman on a number of technology companies, including Mitel Corporation, of which he was a founder, March Networks Corporation, DragonWave Corporation, Newport Networks and Solace Systems.

Marie-Lucie Morin is the National Security Advisor to the Prime Minister and Associate Secretary to the Cabinet, a position she was named to in the fall of 2008. Prior to that, she had been an Associate Deputy Minister at Foreign Affairs.

Dr. Heather Munroe-Blum is the Principal and Vice-Chancellor of McGill University, and she is a member of McGill's Faculty of Medicine and a professor in the Department of Epidemiology and Biostatistics.

Mr. David O'Brien is Chairman of the Board of EnCana and Chairman of the Board of the Royal Bank of Canada.

Mr. J. Robert S. Prichard is President and Chief Executive Officer of Torstar Corporation. Torstar, as we know, is a leading Canadian media company. Mr. Prichard is also President Emeritus of the University of Toronto, where he previously served as Dean of Law and a professor specializing in law and economics.

Mr. Morris Rosenberg, as is well know to us, is the Deputy Minister of Health in the Canadian government.

Dr. Guy Rouleau, MD, PhD, FRCP, OQ, is the Canada Research Chair in Genetics of the Nervous System, and is a professor in the Department of Medicine at the University of Montreal.

Dr. W.A. (Sam) Shaw is President and CEO of the Northern Alberta Institute of Technology, one of Canada's leading technical institutes.

Dr. Molly Shoichet holds an NSERC Canada Research Chair in Tissue Engineering and is a professor of chemical engineering and applied chemistry, chemistry and biomaterials and biomedical engineering at the University of Toronto.

Dr. Mihaela Ulieru holds the NSERC Canada Research Chair in Adaptive Information Infrastructures for the e-Society at the University of New Brunswick, where she founded and directs the Adaptive Risk Management Lab, an international leading centre for research and innovation in the design of holistic security ecosystems and resilient information infrastructures that link crucial infrastructures.

Dr. Harvey Weingarten is President and Vice-Chancellor of the University of Calgary. A distinguished scholar and researcher in the fields of psychology and medicine, Dr. Weingarten came to the University of Calgary from McMaster University, where he served as Provost and Vice-President, Academic, from 1996 to 2001.

Finally, Mr. Rob Wildeboer, 47, resides in Milton, Ontario and is Executive Chairman and co-founder of Martinrea International Inc, a leading Canadian auto parts supplier specializing in automotive fluid systems and metal forming products, with leading edge expertise in hydroforming, hot stamping, stamping, laser trimming and welding.

Honourable senators, the point is obvious. Where the previous government had one science adviser, we created a Science Technology and Innovation Council consisting of 17 members to advise the government on matters of science and technology policy, and we are listening.

In September 2008, the Minister of Industry announced that he was accepting the recommendations of the council on sub-priorities within four research policy areas announced in the Government of Canada's 2007 Science and Technology Strategy. These include research into environmental science and technology, including water safety and health; and cleaner methods of extracting hydrocarbon fuels and reducing consumption of these fuels. Other sub-priorities include energy production in the oil sands, Arctic resource production and climate change monitoring, wireless networks and services, and telecommunications equipment.

The truth is that while the honourable senator opposite accuses us of cutting, we are in fact consulting, listening, expanding and implementing. I will get to the money later, Senator Carstairs.

The honourable senator continues his remarks by referring to an Ottawa Citizen article from February 1, 2008, which he cites as evidence that the government is sidelining scientists. The truth is that he totally misrepresented the content of the article; such is the depth of research for his speech. Had he read the entire article, he would have found evidence of no such thing.

Indeed, Mr. Gregory Jack, who was cited in the article as being acting director of Environment Canada's ministerial and executive services, pointed out that scientists and "subject matter experts" will still be made available to speak to the media "on complex and technical issues."

He went on to say that the policy is meant to bring Environment Canada in line with other federal departments and added, "there is no change in the access in terms of scientists" being able to talk.

My honourable colleague then continues his remarks by discussing how Mr. Martin and Mr. Chrétien transformed Canada into a science superpower. Indeed, based on his comments, one might have been led to believe that Mr. Chrétien and Mr. Martin induced a scientific renaissance in Canada. However, like most Liberal mythology, there is a considerable bit of revisionism at work here.

Let us begin generally and work down to the specifics of the former Liberal government's science and technology policy.

Senator Comeau: What science and technology policy?

Senator LeBreton: Under Finance Minister Martin, the Liberals cut funding for post-secondary education. Between 1994-95 and 1998-99, the Liberal government cut the annual Canada Health and Social Transfer entitlements to the provinces by $25 billion. Under the Liberals, tuition fees in many provinces more than doubled. Despite their repeated announcements on the importance of education, Liberals instead starved the post-secondary education system of much-needed resources.

The Liberal research and development policies were not much better. The 1993 Red Book, remember that? That was the one where they promised to "axe the tax." The 1993 Red Book promised to double research and development spending in Canada.

Senator Comeau: Get rid of free trade.

Senator LeBreton: As a matter of fact, research and development funding was actually cut. What, you might ask, was the defence for these cuts? The claim was that since they were cutting research and development proportionately less than other areas, they were actually showing support for research and development.

Senator Tkachuk: Liberal logic.

Senator LeBreton: That is creative accounting, if I ever saw it. The 1995 Budget cut funding for Canada's granting councils by $77 million over three years and, at the same time, the National Research Council budget was also cut by $76 million over three years. Under the previous government, Canada's productivity growth lagged behind the United States. Since 1993, output per hour worked in manufacturing has risen twice as fast in the United States as in Canada. According to the rankings compiled by the Conference Board of Canada, in 2004, Canada ranked eleventh on research and development spending, well below the then government's stated target of fifth place. The honourable senator at least recognized this dismal record in his remarks, and even attempts to pre-empt such criticism.

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The honourable senator then asks: What is our vision for Canada in the 21st century? Allow me to outline how the government is supporting science and technology in Canada.

The honourable senator points out the three granting research councils — Canadian Institutes of Health Research, Natural Sciences and Research Council and Social Sciences and Humanities Research Council — are victims of cuts. Nothing could be further from the truth. The government has provided significant new funding to the granting councils for their core programming in each of the last three budgets. Taken together, these investments have boosted core funding for the granting councils by $205 million per year, an ongoing permanent increase in their budgets.

The granting councils will also receive an additional $87.5 million to expand temporarily the Canada Graduate Scholarships Program. This money will provide enough funding for an additional 500 doctoral scholarships and 1,000 masters scholarships in each of the next two years.

The Leader of the Opposition also quotes the Association of Universities and Colleges of Canada. Allow me also to quote the AUCC. On the recent budget, the AUCC had this to say about our government's commitment to universities and scientific research.

The Association of Universities and Colleges of Canada welcomes the new investment in Canada's university infrastructure and the Canada Foundation for Innovation funding announced in today's federal budget. These investments will boost universities' role in the effort to stimulate the economy in these difficult economic times.

AUCC is pleased to see the investment of $2 billion targeted for critical infrastructure at postsecondary education institutions aimed at supporting repairs and maintenance as well as accelerated construction on university and college campuses. This will create jobs immediately in communities across the country as well as ensuring that the Canadian economy is equipped to compete internationally when we emerge from this difficult economic period. Renewed campus infrastructure will enhance the quality of teaching and research at Canadian universities.

AUCC goes on to say:

AUCC is pleased to see the federal government's continued commitment to the people and knowledge priorities as outlined in Advantage Canada and the S & T strategy with funding for infrastructure that focuses on increasing productivity and competitiveness through the immediate commitment in 2009-10 of $150 million to the existing Canada Foundation for Innovation competitions as well as $600 million for future competitions.

The additional $87.5 million short-term funds for Canada Graduate Scholarships and $3.5 million internships in science and business are significant contributions to maintaining Canadian universities' ability to produce highly qualified talent. These funds will provide an additional 1,000 master's scholarships, 500 doctoral scholarships and 600 internships.

Senator Comeau: How is that for a quote? They are in stunned silence right now.

Senator LeBreton: The honourable senator opposite also brings up the Polar Environment Atmospheric Research Laboratory, PEARL.

However, when he said this, I was curious as to why he would, since the previous government had let the lab shut down in 2004. For a brief period of time, they had planned "bulldoze it." Mr. Drummond, the scientist in charge at PEARL was able to restore funding only to the lab and save it by cobbling together funding from various other sources.

Senator Comeau: Now we have the rest of the story.

Senator LeBreton: The honourable senator insinuates that scientists will leave Canada for opportunities elsewhere. Allow me to allay his concerns. The AUCC in a press release entitled, "Federal budget announces important investments in developing and attracting talent," had this to say about Budget 2008:

AUCC welcomes the recognition in tonight's federal budget of the vital importance of investing in education and skills of Canadians to ensure this country's prosperity and quality of life.

In particular, AUCC is pleased to see the creation of new Canada Graduate Scholarships for top Canadian and international doctoral students and a new Canada Student Grant Program that will provide targeted grants to increase accessibility to postsecondary education for students from low and middle income families.

I and my colleagues are particularly proud of this policy because it makes education accessible to many more Canadians than in the past.

Senator Comeau: You have to stop; the Liberals cannot take it anymore.

Senator LeBreton: In addition to the measures announced in Budget 2008, this government established the Canada Excellence Research Chairs program aimed at enabling Canadian universities to recruit, retain and equip the brightest and most promising researchers the world has to offer.

This government's record on science and technology clearly indicates that the government has sustained a worldwide leading commitment to basic and applied research in all domains. Saying otherwise or spinning outright falsehoods does not change the undeniable facts. Canada is an international leader in post-secondary research. In terms of research and development expenditures as a percentage of GDP in the higher education sector, we rank first in G7 countries, and second after Sweden among the 30 countries that make up the Organisation for Economic Co-operation and Development.

Canada is number one in the G7 for supporting basic discovery-oriented research at universities. However, where we need to improve — and there is no doubt about it — it was referenced by Senator Eggleton in his question — we need to improve in moving innovations from the lab to the marketplace where Canadians can benefit from them. Our science and technology strategy and our investments support both.

This performance has been boosted by the government's substantial science and technology investments in the past three budgets, resulting in a total of $2.2 billion of new investment.

Canada's Economic Action Plan, or Budget 2009, builds on this strong base, providing $5.1 billion in new science and technology investments — one of the most substantial budget investments in science and technology in Canadian history. Budget 2009 included new funding to support business innovation, research infrastructure in universities and increases the number of graduate scholarships.

These new investments announced in Canada's Economic Action Plan includes up to $2 billion in funding to support deferred maintenance, repair and expansion projects at post-secondary institutions. This measure will provide an economic boost in the short term, but it will also enhance the research capacity and provide a better educational experience for the highly skilled workers of tomorrow.

Honourable senators, it is crystal clear that this government has a vision for science and technology. We have made other substantial investments like the further $750 million investment in the Canada Foundation for Innovation, CFI, to sustain its ability to support the modernization of research infrastructure at Canadian post-secondary institutions across Canada. This funding builds on an additional investment of $510 million in Budget 2007 to support the CFI's research infrastructure activities. There is $50 million for the Institute of Quantum Computing located at the University of Waterloo. This funding will allow this truly world-class research facility here in Canada to be at the forefront of knowledge in this critical emerging technology area. Also, $80 million over two years is provided to FPInnovations, a not-for-profit research institute that focuses on the development of emerging and breakthrough technologies in forestry.

Honourable senators, I conclude my remarks by addressing the concerns of the honourable senator who has suggested that this government's science and technology strategy does not strike a balance between infrastructure investments and operational funding.

The federal granting councils, which provide operating funding for research and development, have not had their budgets cut. The opposite is the case. For example, the Natural Sciences and Engineering Research Council received $862.2 million in 2005-06, the last budget of the previous government. In 2009-10, the Natural Sciences and Engineering Research Council will receive over $1 billion. The same is true for other granting councils. The Social Sciences and Humanities Research Council received $573.3 million in 2005-06 and will receive $689.5 million in 2009-10. The same is true for the Canadian Institutes of Health Research, which received $776.8 million in 2005-2006. In 2009-10, they will receive $992.4 million.

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It is clearly evident that this Conservative government is on the right track. It is providing increased funding for research through the granting councils. It is an indisputable fact that we are providing significantly more than the previous government provided. We have heard from the Leader of the Opposition, and he has suggested that we are not providing adequate funding for the granting councils and for research funding. He must really stop relying on the Globe and Mail for his biased research.

Honourable senators, take the example of the Natural Sciences and Engineering Research Council. What is more adequate: $862.2 million under the previous government or $1 billion from this government? We have the balance right and we are on the right track to fostering innovation and research in Canada.

Honourable senators, new spending on science and technology in the Economic Action Plan totals $5.1 billion. It is clear that the government is committed to science, technology and innovation. Where my honourable colleague spreads false doom and gloom, the government of which I am proud to be a part, under the leadership of Prime Minister Harper, sees potential and opportunity for Canada's scientists. Indeed, our economy and our future depend on it.

A final word about our modern state of the art facility — the microbiology lab in Winnipeg, which is playing a leading role, if not the leading role, in testing and identifying the H1N1 flu virus and in providing assistance to the world, most particularly Mexico and the United States, so much so that the World Health Organization singled out Canada's contribution to this serious health issue.

Not a word of praise for this outstanding example of Canadian scientific and medical research, and not a word, I dare say, to remind honourable senators, in particular, and Canadians, in general, that were it not for the efforts of a previous Conservative government and a cabinet minister from Winnipeg and a former Minister of Health, this lab would not be the world class facility that it is today. It would not even exist.

Honourable senators, the record is clear. This government's contribution to science and technology is real in every respect — in commitment and support and, most importantly, in funding.

Hon. James S. Cowan (Leader of the Opposition): Would the Leader of the Government in the Senate entertain a question?

I thank her for her contribution to the debate. It is an important topic, and I am glad she shares my enthusiasm for science and technology and its importance to Canada's place in the world and to our economy.

Although the honourable senator and I might disagree on the interpretation of what has been said by scientists in Canada on the record of this government, I am certain that she would agree with me that there is some difference of opinion amongst persons in Canada who have commented on these issues. I hope that the honourable senator will join with me in support of an amendment that I propose to make to Senator Callbeck's reference to the Standing Senate Committee on Social Affairs, Science and Technology on post-secondary education. The committee then could have another look at the issue of science and technology funding, in particular the point that the honourable senator properly makes about the commercialization of research, which is an important aspect. Would the honourable senator care to comment?

Senator LeBreton: I thank the honourable senator. I will not commit to supporting an amendment at this time, but I would be happy to entertain the idea. The honourable senator is right in saying that no matter the topic, there will always be supporters and non-supporters.

Yesterday, in the infamous Globe and Mail, there was a straight-up-reporting article on McGill professors winning three of the five Killam prizes. It also mentioned the other individuals, each of whom had received a $100,000 award. The Killam prizes are awarded each year by the Canada Council for the Arts. The other winners were biologist John Smol of Queen's University and legal theorist Ernest Weinrib of the University of Toronto. The article reads:

Prof. Smol said this year's prizes underline the importance of funding basic research that doesn't have an immediately obvious industrial application, something that governments can lose sight of when they are too heavily involved in choosing which research gets funded.

"When you're in the environmental field, industry is in no great rush to support a lot of this work, to be perfectly blunt. So you're really dependent on public money to do it," he said.

Dr. Habashi said he and his colleagues often field offers to go to U.S. universities that offer higher salaries, but he prefers the stable research environment in Canada.

He said the research infrastructure has improved immeasurably thanks to the funding of the Canada Foundation for Innovation and the Canada Research Chairs, which have not only kept researchers in Canada but attracted them from around the world.

I could not have said I better myself.

Hon. Sharon Carstairs: I would like to ask the Leader of the Government in the Senate a question with respect to her remarks. I am delighted that she has recognized the superiority of the lab in Winnipeg. Why is it impossible to get the funding to expand that disease lab, which has been needed for some time?

Senator LeBreton: Senator Carstairs, an additional $5.1 billion was announced by the government in the budget, so I am quite certain that the various world-class research facilities in Canada are making applications or have made applications. The budget was passed as recently as the beginning of April, so I would say, stay tuned.

Senator Carstairs: The government has indicated that they want those shovel-ready projects; and here is a shovel-ready project. It could have been announced within days of the budget passing.

Senator LeBreton: I am informed by my colleague, who is from the city of Winnipeg, that there is some doubt about that, although that does not in any way detract from the importance of such world-class facilities being fully supported. I am very happy that it was a Conservative government that saw the wisdom of it. I am certain that it will be continued to be supported by the present government.

Hon. Art Eggleton: Honourable senators, if there are no more questions, I am prepared to speak to this inquiry. I am sorry that the Leader of the Government in the Senate has been so defensive about this matter. This side has not been crying doom and gloom. When the Standing Senate Committee on Social Affairs, Science and Technology came out with its report one year ago on the government's new policy on science, it was not critical at all. The report said that it was a good, basic policy.

What we said then and what we are saying today is that there are gaps. Not everything has been addressed. It is not a question of throwing more money at more things; it is a question of finding the right balance and dealing with these gaps to ensure that we move forward with the best possible science and technology policy.

(1520)

It is important, particularly at this time of tremendous competitiveness, when we see the United States putting some $10 billion into health research alone. We will have a great deal of competition in terms of keeping the scientists we have attracted to this country and the ones who were educated in this country. It is important for our future prosperity and economy that we look at what these gaps are and the challenges we face.

The minister says there were some four priority areas in the science report. There were, but while those are all fine and good, we should not ignore other areas. The humanities are not mentioned as one of those priorities. There is not the kind of emphasis on all the areas that need attention. There is the problem of basic research.

We need more money to be invested in applied science, science that will lead to products that will ultimately help new businesses create new jobs. We also must remember that basic research is vital to bringing us to that point in time.

There are basic research projects in this country's past that would not qualify under the four priority areas today. For example, the Canadarm program or the chemistry research by John Polanyi, who won a Nobel Prize, would not qualify. Let us not forget the needs in terms of basic research.

Key to basic research is the work of the three granting councils. Although the leader is not listening, I would tell the honourable senator that we can extrapolate over a number of years and show that the government has invested more money, the $862 million to $1 billion. Our government before that was building up the funds as well, and the numbers go up with inflation.

The fact is that in the current year there will be an administrative cut of $149 million, which appears to be part of an across-the-board measure applied here as well. It may not be extremely damaging to the bottom line of these granting councils, considering the previous years' increases, but it sends the wrong message at the wrong time. It creates a chill in the science community by suggesting we are slowing down and cutting back at a time when, in the United States, they are adding significantly more dollars into research as part of their stimulus endeavour.

Other areas and gaps need attention, such as the Scientific Research and Experimental Development tax deduction program, where people involved in this program have come forward and said reforms and changes are needed in these areas. The tax needs to be refundable because many of these new programs and projects do not make money; they lose money. Researchers need to be able to continue to develop other kinds of products, many of which will succeed. Improvements are needed to the tax credit scheme.

The government should be given credit for the money that it has invested in the infrastructure program for science as part of the stimulus, but it still needs to pay more attention to the operating funds, the funds necessary for scientists to carry out the programs in these facilities. There is no point in upgrading all these facilities if they are not pumping money into the operating costs for the scientists to use them to develop the kind of research that will to lead to new products for our economy.

It is unfortunate that this information is looked upon as an attack by us or as a preaching of doom and gloom. Instead, we are saying the government has done some things that are going in the right direction, but there are gaps. There needs to be improvement. Do not let down your guard. Address these gaps because it is vital to address them, in terms of our economic future and our quality of life in this country; that we keep apace in terms of research and development.

Some Hon. Senators: Hear, hear!

(On motion of Senator Day, debate adjourned.)

Study on Provisions and Operations of the National Defence Act

Notice of Motion to Request Government Response to Fifth Report of Legal and Constitutional Affairs Committee

Leave having been given to revert to Notices of Motions:

Hon. Joan Fraser: Honourable senators, I give notice that, two days hence, I will move:

That, pursuant to Rule 131(2), the Senate request a complete and detailed response from the government to the fifth report of the Standing Senate Committee on Legal and Constitutional Affairs entitled Equal Justice: Reforming Canada's System of Courts Martial, tabled in the Senate on May 5, 2009 and adopted on May 12, 2009, with the Minister of National Defence being identified as minister responsible for responding to the report.

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Organization for Security and Co-operation in Europe Parliamentary Assembly

Motion to Support Resolution on Mediterranean Free Trade Area—Debate Continued

On the Order:

Resuming debate on the motion of the Honourable Senator Grafstein, seconded by the Honourable Senator Baker, P.C.:

That the Senate endorse the following Resolution, adopted by the OSCE Parliamentary Assembly at its 17th Annual Session, held at Astana, Kazakhstan, from June 29 to July 3, 2008:

RESOLUTION ON A MEDITERRANEAN FREE TRADE AREA

1. Reiterating the fundamental importance of the economic and environmental aspects of the OSCE concept of security,

2. Recognizing that without economic growth there can be no peace or stability,

3. Recalling the importance that the OSCE Parliamentary Assembly accords to the development of international trade, as underlined by the Assembly's fifth economic conference on the theme of Strengthening Stability and Co-operation through International Trade, which was held in Andorra, in May 2007,

4. Maintaining that creating a free trade area will, inter alia, contribute significantly to the efforts to achieve peace,

5. Recalling that the European Union itself was made possible by the establishment of free-trade areas, first the European Coal and Steel Community in 1951 and then the European Economic Community in 1957,

6. Recalling the Helsinki Final Act of 1975, in which OSCE participating States expressed their intention "to encourage with the non-participating Mediterranean States the development of mutually beneficial co-operation in the various fields of economic activity" and to "contribute to a diversified development of the economies of the non-participating Mediterranean countries",

7. Recalling the Helsinki Final Act, in which OSCE participating States recognized "the importance of bilateral and multilateral intergovernmental and other agreements for the long-term development of trade" and undertook "to reduce or progressively eliminate all kinds of obstacles to the development of trade",

8. Celebrating the decision made at the OSCE Summit in Budapest in 1994 to create a Contact Group with Mediterranean Partners for Cooperation,

9. Expressing support for the Barcelona Declaration of 1995 regarding the establishment of a free trade area between the members of the European Union and all Mediterranean states by 2010,

10. Saluting the American Middle East Free Trade Area Initiative (MEFTA) launched in 2003,

11. Concerned by the slow pace of economic development in the Middle East, especially in the agriculture sector and the knowledge-based economy, where two-thirds of the population is under the age of 35,

12. Considering the obstacles to economic growth posed by agricultural trade and tariff barriers, as discussed at the OSCE Parliamentary Assembly meeting in Rhodes in 2004,

13. Considering the lack of direct foreign investment in Middle Eastern Arab countries and the concentration of such investment in a small number of these countries,

14. Noting that despite the efforts made in the Middle East to stimulate free trade, economic growth in Mediterranean countries is markedly stronger in the Israel-Europe-North America axis than among countries in the region, and

15. Encouraged by the increased literacy rate and the increased participation of women in the domestic economies of countries in the Mediterranean basin,

The OSCE Parliamentary Assembly:

16. Recommends the creation of a Mediterranean Economic Commission whose objective would be to quickly reduce trade barriers and facilitate the transition to a knowledge-based economy in countries in the region;

17. Recommends the creation of a Mediterranean Agricultural Marketing Board whose objective would be to create jobs in the agriculture sector for young people in the region;

18. Invites OSCE participating countries and partner states for co-operation to intensify their efforts under the Barcelona Process and to more fully benefit from the MEFTA Initiative in order to expedite the establishment of a free-trade area among all Mediterranean countries.

Hon. Jerahmiel S. Grafstein: Honourable senators, this is the fourteenth day that this resolution has been on the Order Paper. I intend to speak more extensively on it in the future.

I would like to put on the record that Senator Di Nino and I co-hosted a subsequent meeting of the OSCE Parliamentary Assembly in Toronto. This subject matter was included in that event. A subsequent meeting is being held some time this summer. When that happens, I will bring the Senate up to date so that we can have a fulsome debate on this subject matter.

(On motion of Senator Grafstein, debate adjourned.)

[Translation]

Social Affairs, Science and Technology

Motion to Authorize Committee to Study Implementation of Guaranteed Annual Income System—Debate Continued

On the Order:

Resuming debate on the motion of the Honourable Senator Segal, seconded by the Honourable Senator Oliver:

That the Standing Senate Committee on Social Affairs, Science and Technology be authorized to examine and report on the implementation of a guaranteed annual income system, including the negative income tax model, as a qualitative improvement in income security, with a view to reducing the number of Canadians now living under the poverty line;

That the Committee consider the best possible design of a negative income tax;

That the Committee submit its final report no later than December 31, 2009; and

That the Committee retain all powers necessary to publicize its findings until 90 days after the tabling of the final report.—(Honourable Senator Eaton)

Hon. Gerald J. Comeau (Deputy Leader of the Government): Honourable senators, this being this motion's fourteenth day on the Order Paper, I would like to take the adjournment in my name. I know that Senator Eaton is busy preparing her speaking notes for this motion.

(On motion of Senator Comeau, debate adjourned.)

[English]

Declaration on Strengthening the Financial System Adopted by the G20

Inquiry—Debate Adjourned

Hon. Jerahmiel S. Grafstein rose pursuant to notice of April 29, 2009:

That he will call the attention of the Senate to the following Declaration on Strengthening the Financial System, adopted by the G20 on April 2, 2009, at the London Summit.

DECLARATION ON STRENGTHENING THE FINANCIAL SYSTEM-LONDON SUMMIT, 2 APRIL 2009

We, the Leaders of the G20, have taken, and will continue to take, action to strengthen regulation and supervision in line with the commitments we made in Washington to reform the regulation of the financial sector. Our principles are strengthening transparency and accountability, enhancing sound regulation, promoting integrity in financial markets and reinforcing international cooperation. The material in this declaration expands and provides further detail on the commitments in our statement. We published today a full progress report against each of the 47 actions set out in the Washington Action Plan. In particular, we have agreed to the following major reforms.

Financial Stability Board

We have agreed that the Financial Stability Forum should be expanded, given a broadened mandate to promote financial stability, and re-established with a stronger institutional basis and enhanced capacity as the Financial Stability Board (FSB). The FSB will:

  • assess vulnerabilities affecting the financial system, identify and oversee action needed to address them;
     
  • promote co-ordination and information exchange among authorities responsible for financial stability;
     
  • monitor and advise on market developments and their implications for regulatory policy;
     
  • advise on and monitor best practice in meeting regulatory standards;
     
  • undertake joint strategic reviews of the policy development work of the international Standard Setting Bodies to ensure their work is timely, coordinated, focused on priorities, and addressing gaps;
     
  • set guidelines for, and support the establishment, functioning of, and participation in, supervisory colleges, including through ongoing identification of the most systemically important cross-border firms;
     
  • support contingency planning for cross-border crisis management, particularly with respect to systemically important firms; and
     
  • collaborate with the IMF to conduct Early Warning Exercises to identify and report to the IMFC and the G20 Finance Ministers and Central Bank Governors on the build up of macroeconomic and financial risks and the actions needed to address them.

Members of the FSB commit to pursue the maintenance of financial stability, enhance the openness and transparency of the financial sector, and implement international financial standards (including the 12 key International Standards and Codes), and agree to undergo periodic peer reviews, using among other evidence IMF/ World Bank public Financial Sector Assessment Program reports. The FSB will elaborate and report on these commitments and the evaluation process.

We welcome the FSB's and IMF's commitment to intensify their collaboration, each complementing the other's role and mandate.

International cooperation

To strengthen international cooperation we have agreed:

  • to establish the remaining supervisory colleges for significant cross-border firms by June 2009, building on the 28 already in place;
     
  • to implement the FSF principles for cross-border crisis management immediately, and that home authorities of each major international financial institution should ensure that the group of authorities with a common interest in that financial institution meet at least annually;
     
  • to support continued efforts by the IMF, FSB, World Bank, and BCBS to develop an international framework for cross-border bank resolution arrangements;
     
  • the importance of further work and international cooperation on the subject of exit strategies;
     
  • that the IMF and FSB should together launch an Early Warning Exercise at the 2009 Spring Meetings.

Prudential regulation

We have agreed to strengthen international frameworks for prudential regulation:

  • until recovery is assured the international standard for the minimum level of capital should remained unchanged;
     
  • where appropriate, capital buffers above the required minima should be allowed to decline to facilitate lending in deteriorating economic conditions;
     
  • once recovery is assured, prudential regulatory standards should be strengthened. Buffers above regulatory minima should be increased and the quality of capital should be enhanced. Guidelines for harmonisation of the definition of capital should be produced by end 2009. The BCBS should review minimum levels of capital and develop recommendations in 2010;
     
  • the FSB, BCBS, and CGFS, working with accounting standard setters, should take forward, with a deadline of end 2009, implementation of the recommendations published today to mitigate procyclicality, including a requirement for banks to build buffers of resources in good times that they can draw down when conditions deteriorate;
     
  • risk-based capital requirements should be supplemented with a simple, transparent, non-risk based measure which is internationally comparable, properly takes into account off-balance sheet exposures, and can help contain the build-up of leverage in the banking system;
     
  • the BCBS and authorities should take forward work on improving incentives for risk management of securitisation, including considering due diligence and quantitative retention requirements, by 2010;
     
  • all G20 countries should progressively adopt the Basel II capital framework; and
     
  • the BCBS and national authorities should develop and agree by 2010 a global framework for promoting stronger liquidity buffers at financial institutions, including cross-border institutions.

The scope of regulation

We have agreed that all systemically important financial institutions, markets, and instruments should be subject to an appropriate degree of regulation and oversight. In particular:

  • we will amend our regulatory systems to ensure authorities are able to identify and take account of macro-prudential risks across the financial system including in the case of regulated banks, shadow banks, and private pools of capital to limit the build up of systemic risk. We call on the FSB to work with the BIS and international standard setters to develop macro-prudential tools and provide a report by autumn 2009;
     
  • large and complex financial institutions require particularly careful oversight given their systemic importance;
     
  • we will ensure that our national regulators possess the powers for gathering relevant information on all material financial institutions, markets, and instruments in order to assess the potential for their failure or severe stress to contribute to systemic risk. This will be done in close coordination at international level in order to achieve as much consistency as possible across jurisdictions;
     
  • in order to prevent regulatory arbitrage, the IMF and the FSB will produce guidelines for national authorities to assess whether a financial institution, market, or an instrument is systemically important by the next meeting of our Finance Ministers and Central Bank Governors. These guidelines should focus on what institutions do rather than their legal form;
     
  • hedge funds or their managers will be registered and will be required to disclose appropriate information on an ongoing basis to supervisors or regulators, including on their leverage, necessary for assessment of the systemic risks that they pose individually or collectively. Where appropriate, registration should be subject to a minimum size. They will be subject to oversight to ensure that they have adequate risk management. We ask the FSB to develop mechanisms for cooperation and information sharing between relevant authorities in order to ensure that effective oversight is maintained where a fund is located in a different jurisdiction from the manager. We will, cooperating through the FSB, develop measures that implement these principles by the end of 2009. We call on the FSB to report to the next meeting of our Finance Ministers and Central Bank Governors;
     
  • supervisors should require that institutions which have hedge funds as their counterparties have effective risk management. This should include mechanisms to monitor the funds' leverage and set limits for single counterparty exposures;
     
  • we will promote the standardisation and resilience of credit derivatives markets, in particular through the establishment of central clearing counterparties subject to effective regulation and supervision. We call on the industry to develop an action plan on standardisation by autumn 2009; and
     
  • we will each review and adapt the boundaries of the regulatory framework regularly to keep pace with developments in the financial system and promote good practices and consistent approaches at the international level.

Compensation

We have endorsed the principles on pay and compensation in significant financial institutions developed by the FSF to ensure compensation structures are consistent with firms' long-term goals and prudent risk taking. We have agreed that our national supervisors should ensure significant progress in the implementation of these principles by the 2009 remuneration round. The BCBS should integrate these principles into their risk management guidance by autumn 2009. The principles, which have today been published, require:

  • firms' boards of directors to play an active role in the design, operation, and evaluation of compensation schemes;
     
  • compensation arrangements, including bonuses, to properly reflect risk and the timing and composition of payments to be sensitive to the time horizon of risks. Payments should not be finalised over short periods where risks are realised over long periods; and
     
  • firms to publicly disclose clear, comprehensive, and timely information about compensation. Stakeholders, including shareholders, should be adequately informed on a timely basis on compensation policies to exercise effective monitoring.

Supervisors will assess firms' compensation policies as part of their overall assessment of their soundness. Where necessary they will intervene with responses that can include increased capital requirements.

Tax havens and non-cooperative jurisdictions

It is essential to protect public finances and international standards against the risks posed by non-cooperative jurisdictions. We call on all jurisdictions to adhere to the international standards in the prudential, tax, and AML/ CFT areas. To this end, we call on the appropriate bodies to conduct and strengthen objective peer reviews, based on existing processes, including through the FSAP process.

We call on countries to adopt the international standard for information exchange endorsed by the G20 in 2004 and reflected in the UN Model Tax Convention. We note that the OECD has today published a list of countries assessed by the Global Forum against the international standard for exchange of information. We welcome the new commitments made by a number of jurisdictions and encourage them to proceed swiftly with implementation.

We stand ready to take agreed action against those jurisdictions which do not meet international standards in relation to tax transparency. To this end we have agreed to develop a toolbox of effective counter measures for countries to consider, such as:

  • increased disclosure requirements on the part of taxpayers and financial institutions to report transactions involving non-cooperative jurisdictions;
     
  • withholding taxes in respect of a wide variety of payments;
     
  • denying deductions in respect of expense payments to payees resident in a non-cooperative jurisdiction;
     
  • reviewing tax treaty policy;
     
  • asking international institutions and regional development banks to review their investment policies; and,
     
  • giving extra weight to the principles of tax transparency and information exchange when designing bilateral aid programs.

We also agreed that consideration should be given to further options relating to financial relations with these jurisdictions.

We are committed to developing proposals, by end 2009, to make it easier for developing countries to secure the benefits of a new cooperative tax environment.

We are also committed to strengthened adherence to international prudential regulatory and supervisory standards. The IMF and the FSB in cooperation with international standard-setters will provide an assessment of implementation by relevant jurisdictions, building on existing FSAPs where they exist. We call on the FSB to develop a toolbox of measures to promote adherence to prudential standards and cooperation with jurisdictions.

We agreed that the FATF should revise and reinvigorate the review process for assessing compliance by jurisdictions with AML/CFT standards, using agreed evaluation reports where available.

We call upon the FSB and the FATF to report to the next G20 Finance Ministers and Central Bank Governors' meeting on adoption and implementation by countries.

Accounting standards

We have agreed that the accounting standard setters should improve standards for the valuation of financial instruments based on their liquidity and investors' holding horizons, while reaffirming the framework of fair value accounting.

We also welcome the FSF recommendations on procyclicality that address accounting issues. We have agreed that accounting standard setters should take action by the end of 2009 to:

  • reduce the complexity of accounting standards for financial instruments;
     
  • strengthen accounting recognition of loan-loss provisions by incorporating a broader range of credit information;
     
  • improve accounting standards for provisioning, off-balance sheet exposures and valuation uncertainty;
     
  • achieve clarity and consistency in the application of valuation standards internationally, working with supervisors;
     
  • make significant progress towards a single set of high quality global accounting standards; and,
     
  • within the framework of the independent accounting standard setting process, improve involvement of stakeholders, including prudential regulators and emerging markets, through the IASB's constitutional review.

Credit Rating Agencies

We have agreed on more effective oversight of the activities of Credit Rating Agencies, as they are essential market participants. In particular, we have agreed that:

  • all Credit Rating Agencies whose ratings are used for regulatory purposes should be subject to a regulatory oversight regime that includes registration. The regulatory oversight regime should be established by end 2009 and should be consistent with the IOSCO Code of Conduct Fundamentals. IOSCO should coordinate full compliance;
     
  • national authorities will enforce compliance and require changes to a rating agency's practices and procedures for managing conflicts of interest and assuring the transparency and quality of the rating process. In particular, Credit Rating Agencies should differentiate ratings for structured products and provide full disclosure of their ratings track record and the information and assumptions that underpin the ratings process. The oversight framework should be consistent across jurisdictions with appropriate sharing of information between national authorities, including through IOSCO; and,
     
  • the Basel Committee should take forward its review on the role of external ratings in prudential regulation and determine whether there are any adverse incentives that need to be addressed.

Next Steps

We instruct our Finance Ministers to complete the implementation of these decisions and the attached action plan. We have asked the FSB and the IMF to monitor progress, working with the FATF and the Global Forum, and to provide a report to the next meeting of our Finance Ministers and Central Bank Governors.

He said: Honourable senators, I intend to take a moment or two to update you on this subject matter.

Next week, the OSCE Parliamentary Assembly is sponsoring a conference in Dublin on the world financial crisis. I have the privilege of being one of the keynote speakers and also chairing one of the sessions. We have been organizing this event for some time. I would hope to address that subject matter and this subject matter on my return in the weeks ahead.

(On motion of Senator Grafstein, debate adjourned.)

(The Senate adjourned until Thursday, May 14, 2009, at 1:30 p.m.)