The Hon. the Speaker pro tempore: Honourable senators, I wish to draw your attention to the presence in the gallery of Julie Jo and Hope Caldi. They are students at the University of Toronto, here at the invitation of Senator Martin today as part of the University of Toronto's Women in House program.

On behalf of all honourable senators, I welcome you to the Senate of Canada.

Hon. Senators: Hear, hear!

[Translation]

The Hon. the Speaker pro tempore: Honourable senators, I wish to draw your attention to the presence in the gallery of Christophe Blanquie, a special emissary from the Senate of France, who is here to look at and learn about how we use stenotypists and our transcription and editing methods.

On behalf of all senators, I welcome you to the Senate of Canada.

Some Hon. Senators: Hear, hear!

[English]

SENATORS' STATEMENTS

Convention on International Trade in Endangered Species of Wild Fauna and Flora

Hon. Michael L. MacDonald: Honourable senators, the Convention on International Trade and Endangered Species of Wild Fauna and Flora, CITES, was finalized on March 3, 1973. This year marks its fortieth anniversary. To commemorate the occasion, March 3 was designated by the General Assembly of the United Nations to be the first World Wildlife Day. In its resolution, the General Assembly reaffirmed the intrinsic value of wildlife and its various contributions, including ecological, genetic, social, economic, scientific, educational, cultural, recreational and aesthetic, to sustainable development and human well-being, and recognized the important role of CITES in ensuring that international trade does not threaten species' survival.

Raising awareness of the urgent need to step up and fight against wildlife crime, which has wide-ranging economic, environmental and social impacts, has never been more urgent. The illegal international trade in endangered species continues to plague all of us, threatening the survival of some of Earth's most magnificent animal species. Thousands of endangered elephants and rhinos are slaughtered for their ivory every year, and, similarly, threatened top predators, such as the big cats, are mindlessly killed for their body parts.

Canada is one of 170 countries that are signatories to CITES, and Canada has shown leadership in the area of enforcement through our involvement with INTERPOL, where we chair the Wildlife Crime Working Group. Canada also recently announced $2 million in emergency funding to fight poaching and trafficking in Eastern Africa.

This is commendable and should be acknowledged, but Canada has wildlife challenges of its own. It is important that we set a good example here at home to ensure that our words have credibility in all parts of the globe. In short, we must practise what we preach.

Last month, Nova Scotians discovered that the Port of Halifax received 10 containers of fin whale meat originating in Iceland. It was shipped by rail to Vancouver, destined for markets in Japan. The fin whale is a magnificent cetacean, second in size only to the blue whale. It is also an endangered species. The fin whale is also listed as a special concern on the federal Species at Risk Act. Although there is a moratorium on the killing of these animals, Iceland and Japan refuse to honour it. Both of these countries are using Canada as a conduit for the trade of this endangered animal. Environment Canada said, with respect to the shipment, that they had to allow it to proceed since Iceland and Japan do not agree to the listing of the fin whale under the convention. It also said that the convention provides an exemption for shipments of endangered species in transit to a country so long as the shipment remains in Customs' control.

The ship that dropped off the containers in Halifax was destined for the United States, but American law would not allow for the transport of fin whale meat. So Canada was used to do the dirty work. Regardless of whether Canada complies with the rules, the government should adopt stricter measures to ensure it doesn't happen again. Canada's membership in CITES does not prevent it from adopting firmer regulations or taking stricter domestic measures, including the complete prohibition of the transport of these types of species. Canadians do not want our country being used as a conduit for the flesh of endangered animals. I strongly urge the Government of Canada to do a complete review of the situation so that our country can make the regulatory and legal changes necessary to avoid any future involvement in this odious commercial activity.

Paralympic Winter Games 2014

Prince Edward Island Athletes

Hon. Catherine S. Callbeck: Honourable senators, I'd like to offer my best wishes to all Canadian athletes who will be competing in the upcoming Paralympic Winter Games in Russia March 7 to 16. I'm particularly proud that two Prince Edward Islanders are making the trip to compete with their fellow Canadians.

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Billy Bridges, who was born in Summerside, has been a member of the National Paralympic Sledge Hockey Team since the age of 14. In fact, he was the youngest player in Canadian sledge hockey history. Over the last 15 years, he has won three world championship gold medals and three world sledge hockey challenge gold medals. He has also competed in three previous Paralympic Winter Games, winning a gold medal as part of Canada's team in Turin in 2006.

Mark Arendz, a native of Hartsville, is a member of the Canadian Para-Nordic Team competing in both the para-Nordic skiing and biathlon. This will be the second time he will have participated in the Paralympic Games, having competed in Vancouver in 2010. Mark has been called a consistent threat on the World Cup tour. Right now he is the reigning World Cup biathlon champion, as well as the world champion in the 7.5 kilometre biathlon sprint.

I'd also like to mention Ryan McKenna from my community of Central Bedeque. This third-year journalism student at Ryerson University has been hired by the International Paralympic Committee to write articles for its website about sledge hockey. He, too, will be in Russia, writing recaps of games and previews of the next day's events. I wish him good luck in this exciting assignment.

Honourable senators, Canadians are rightfully proud of the athletes who represent us so well on the world stage. They are shining examples of the results of hard work and determination. Please join with me in wishing Billy, Mark and all the Paralympians the best of luck in the Winter Games in the next two weeks.

Ocean Ranger Disaster

Thirty-second Anniversary

Hon. Norman E. Doyle: Honourable senators, I had intended to make a statement on February 15, which was the anniversary of the sinking of the Ocean Ranger. However, it was break week, which made it impossible to do so, but I do think it's important to remember this terrible tragedy which continues to be marked in my home province of Newfoundland and Labrador on February 15 each year.

Honourable senators, 32 years ago on February 15, 1982, tragedy struck on the Grand Banks of Newfoundland. The oil drilling rig Ocean Ranger, with 84 people aboard, went down in heavy seas in the early morning hours of that fateful day. As dawn broke on February 15, it became clear that not only had the Ocean Ranger gone down with all 84 of its crew but 56 of them, from Newfoundland and Labrador, were lost as well. "Loss to the sea" has been a familiar refrain in my province since it was first settled by Europeans hundreds of years ago, but this was the first major tragedy involving workers in our then fledgling offshore oil industry.

The Ocean Ranger was cutting-edge technology for its day and was generally considered to be unsinkable. The Government of Canada eventually set up a royal commission to look into the disaster and, as the evidence and testimony later revealed, the Ocean Ranger was a tragedy just waiting to happen.

As a result of the Ocean Ranger Royal Commission, many improvements have been made to offshore oil industry safety. However, some 27 years later, a Cougar helicopter en route to our producing offshore oil fields lost oil pressure in its main gearbox and crashed into the Atlantic, taking the lives of all but one of the 18 people on board. Despite all the improvements in technology, the North Atlantic is still a very difficult and dangerous work environment, and hardly a year ever passes without the loss of life in our marine environment.

Honourable senators, I'm sure you will join with me in expressing our sincere condolences to the surviving family members of the Ocean Ranger disaster and to the countless other families who, over the centuries, have felt the sting of loss from the sea.

His Highness Prince Karim Aga Khan

Address to Parliament

Hon. Mobina S. B. Jaffer: Honourable senators, on Thursday, February 27, we welcomed His Highness Prince Karim Aga Khan to the Parliament of Canada, where he delivered a historic address to the joint session of Parliament, making him the third non-sitting head of state and the first faith leader to be afforded this honour.

As a proud Ismaili Muslim, this was a particularly special day for me and for my community. His Highness's visit was not only a reflection of the strong relationship shared between the Government of Canada and the Ismaili Imamat, but also a reminder of the importance we must all place on values such as pluralism, diversity, inclusiveness and tolerance, which truly define us as Canadians.

As members of Parliament, senators, distinguished guests and thousands of others watching at home listened intently, our hearts filled with pride as we heard His Highness speak of Canada in such high regard. In his address he stated:

The sad fact behind so much instability in our world today is that governments seem to be inadequate to these challenges. A much happier fact is that in the global effort to change this picture, Canada is an exemplary leader.

Honourable senators, although I'm very proud to be the only Canadian Ismaili parliamentarian and to call myself a Canadian, and I will always be eternally grateful to have been welcomed to Canada some 40 years ago, when my own country of Uganda had abandoned me, I believe that there is still a great deal of work that needs to be done for Canada to truly live up to His Highness's vision.

As I'm sure you are aware, there are many places in the world that are currently facing political hardship and which desperately require our assistance. I believe that the way we, as a country, respond to the current crisis in the Ukraine, as well as the crisis in Syria, will act as an opportunity for Canada to further promote values of tolerance, justice, pluralism and mutual respect, which, as His Highness pointed out, are inherently a part of the Canadian identity.

Honourable senators, I would like to conclude my statement by borrowing from His Highness's wise words which continue to guide me in my work:

As you build your lives for yourselves and others, you will come to rest upon certain principles. Central to my life has been a verse in the Holy Quran, which addresses itself to the whole of humanity.

It says, "O mankind, fear your Lord, who created you of a single soul, and from it created its mate, and from the pair of them scattered abroad many men and women." I know of no more beautiful expression about the unity of our human race, born indeed from a single soul.

Australia-Canada Economic Leadership Forum 2014

Hon. Douglas Black: Honourable senators, last week I was pleased to participate in the 2014 Australia-Canada Economic Leadership Forum, held in Melbourne, Australia. I rise today to congratulate the organizers of this event for their important contribution to developing a relationship between our two countries. Thousands of kilometres may separate Canada and Australia, but no two countries are more alike in terms of culture, values and institutions. I would like to briefly share some of the highlights of the week's events.

Australia's Prime Minister, the Honourable Tony Abbott, opened the conference with a focused and very frank keynote address. Other leading Australian politicians and policy-makers were active participants as well, including the Minister of Foreign Affairs, the Minister of Finance and the Governor of the Reserve Bank of Australia. Canada was also well represented by our Minister of Foreign Affairs, our Minister of Finance and our Governor of the Bank of Canada. Both delegations were complemented by high-level participants from business, academia and the cultural sector.

Matters discussed included the state of the global economy, the importance of arts and culture in nation building, and the very complicated issues involved in marketing natural resources to Asia. These are issues of tremendous importance to both countries and, of course, to my province of Alberta.

Other important topics covered included a discussion of strategic and military issues, infrastructure development, and how we can help our youth to become more Asia-literate so they can be better equipped to engage with this globally important region.

We, as senators, have the privilege and the responsibility to contribute to dialogues such as these. Doing so enhances our understanding of Canada's interests in the world and allows us to be more effective in our Senate work.

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Denny Morrison

Congratulations on Olympic Silver and Bronze Medals

Hon. Richard Neufeld: Honourable senators, I rise today to congratulate Denny Morrison of Fort St. John, British Columbia, on his strong showing at the Sochi Olympics. This accomplished speed skater won Canada's first long-track medal of the games when he won silver in the men's 1,000-metre event. He followed that with a bronze-medal performance in the 1,500 metres.

Denny returned to Canada tied with Gaétan Boucher as the country's most decorated male speed skater.

Honourable senators, the people of my community have followed Denny's speed skating career from the beginning and have watched his success with great interest and pride. In the 2010 Vancouver games, Denny finished thirteenth in the 1,000 metres, and it was thrilling to see him finish in Sochi just four one-hundredths of a second shy of a gold medal.

We could not be happier to see this remarkable athlete win his individual Olympic medals.

Honourable senators, his 1,000-metre win is all the more special because Denny was not originally scheduled to race in this event. Unfortunately, a fall during the Canadian qualifications in December prevented him from making the roster for that distance in Sochi. However, just one day before the Olympic event, his teammate Gilmore Junio gave Denny his spot because he felt he was the team's best skater.

Some Hon. Senators: Hear, hear.

Senator Neufeld: When Junio announced that he was stepping aside so his teammate could compete, he explained:

How Denny is skating now, I believe it's in the best interest of the team if he races.

I commend Gilmore Junio for sacrificing his position for the greater good of his team. In my opinion, his words and actions embodied the true spirit of the Olympics and set an important example for all Canadians, especially our children and future Olympians.

Honourable senators, I congratulate Denny Morrison, Gilmore Junio and all of Canada's Olympians on their hard work and achievements at the Sochi Games.

ROUTINE PROCEEDINGS

The Senate

Rules of the Senate of Canada—February 2014 Version Tabled

The Hon. the Speaker pro tempore: Honourable senators, I have the honour to table a revised version of the September 2012 Rules of the Senate, updated to take account of the changes adopted on February 12, 2014.

[Translation]

Canadian Human Rights Commission

2013 Annual Report Tabled

The Hon. the Speaker pro tempore: Honourable senators, I have the honour to table, in both official languages, pursuant to section 61 of the Canadian Human Rights Act and section 32 of the Employment Equity Act, the 2013 annual report of the Canadian Human Rights Commission.

[English]

The Estimates, 2014-15

Parts I and II Tabled

Hon. Yonah Martin (Deputy Leader of the Government): Honourable senators, I have the honour to table, in both official languages, Parts I and II of the 2014-15 Estimates for the fiscal year ending March 31, 2015.

Criminal Code

Bill to Amend—Third Report of Legal and Constitutional Affairs Committee Presented

Hon. Bob Runciman, Chair of the Standing Senate Committee on Legal and Constitutional Affairs, presented the following report:

Tuesday, March 4, 2014

The Standing Senate Committee on Legal and Constitutional Affairs has the honour to present its

THIRD REPORT

Your committee, to which was referred Bill C-217, An Act to amend the Criminal Code (mischief relating to war memorials), has, in obedience to the order of reference of Tuesday, February 4, 2014, examined the said Bill and now reports the same without amendment.

Respectfully submitted,

BOB RUNCIMAN
Chair

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

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

[Translation]

The Estimates, 2014-15

Notice of Motion to Authorize the Joint Committee on the Library of Parliament to Study Vote 1 of the Main Estimates

Hon. Yonah Martin (Deputy Leader of the Government): Honourable senators, I give notice that, at the next sitting of the Senate, I will move:

That the Standing Joint Committee on the Library of Parliament be authorized to examine and report upon the expenditures set out in Library of Parliament Vote 1 of the Main Estimates for the fiscal year ending March 31, 2015; and

That a message be sent to the House of Commons to acquaint that House accordingly.

[English]

Notice of Motion to Authorize National Finance Committee to Study Main Estimates and Meet During Sitting of the Senate

Hon. Yonah Martin (Deputy Leader of the Government): Honourable senators, I give notice that, at the next sitting of the Senate, I will move:

That the Standing Senate Committee on National Finance be authorized to examine and report upon the expenditures set out in the Main Estimates for the fiscal year ending March 31, 2015, with the exception of Library of Parliament Vote 1; and

That, for the purpose of this study, the committee have the power to sit, Thursday, March 6, 2014 at 2 p.m. even though the Senate may then be sitting, and that rule 12-18(1) be suspended in relation thereto.

QUESTION PERIOD

International Trade

Canada-Europe Comprehensive Economic and Trade Agreement—Copyright Protection

Hon. James S. Cowan (Leader of the Opposition): My question, of course, is for the Leader of the Government in the Senate. As he will know, as part of our new approach to our work in the Senate, we've invited Canadians to submit questions that they would like to have answered by the government. I can say that the response has been immediate and encouraging. It shows that it's not only parliamentarians who are looking for more information about the government but that ordinary Canadians are looking for that as well.

The question that I want to pose to you today, sir, is provided by Sterling Mancuso of Newmarket, Ontario. His question is this:

The proposed Canada-European Union free trade agreement is attempting to covertly and radically alter Canada's copyright laws. Under the proposed agreement, Canada would have to extend copyright protection by a further 20 years, to life of the author plus 70 years, up from the current 50 years, which is already ridiculously long. The treaty would also allow corporations to force Canadians to disclose their private actions on the Internet, under the guise of copyright protection. Can the Leader of the Government in the Senate explain why the Conservative Government is willing to give up Canadians' right to a free Internet?

[Translation]

Hon. Claude Carignan (Leader of the Government): Obviously, the decision to broadcast debates on the Internet will make it possible for this person and all Canadians to listen to the answers that are given and to the debates here in the Senate.

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As I have already said with respect to specific aspects of the free trade agreement, we will have an opportunity once the document is finalized and translated into 28 languages to get specific details from the text. This agreement is historic and extremely important. It will create thousands of jobs for Canadians and will give Canadian businesses access to half a billion new clients. It will also open new markets across Europe to Canadian exporters, and produce major spinoffs, jobs and opportunities for all Canadians. This agreement is expected to create close to 80,000 new jobs and increase the annual income of the average Canadian household by $1,000.

The agreement is expected to eliminate 98 per cent of all European Union tariffs the day it comes into effect and result in higher profits and more opportunities for Canadian businesses of all sizes.

The main issues that were raised after the draft agreement was signed were its effects on agriculture, supply management and cheese, in particular. Our government has always protected the Canadian system when it comes to supply management, cheese and other issues that directly affect Canadians. We will continue to do so.

We will do whatever it takes to protect and promote the Canadian system with respect to supply management and Canadian interests as a whole.

[English]

Senator Cowan: Well, I'm sure Mr. Mancuso will be interested to read your recitation of the talking points, but I will remind Senator Carignan of the question Mr. Mancuso has submitted, and I will repeat it, because the answer you gave had nothing to do with the question that he asked. His question was about copyright protection, and he points out that the agreement — and I agree that the detail may not be all worked out, but the announcements which the government made with such great fanfare made it very clear that the copyright protection would be extended from its present life of the author plus 50 years to life of the author plus 70 years. He's concerned about that.

He's also concerned about provisions in the Canada-EU treaty that would allow corporations to force Canadians to disclose their private actions on the Internet.

Those are the two questions he has asked. I'm sure he will be interested in the other points you raise, but would you care to provide answers to those two specific questions so he will have answers to those, and not just answers to the issues you've chosen?

[Translation]

Senator Carignan: I understood the question. There was no need for you to repeat it. I made it clear in my answer that the final texts are being drafted. Twenty-eight languages have to be taken into account before we get a legal draft. I would encourage you and everyone else who is wondering about specific aspects of the agreement to wait until we have a legal draft of the texts in all 28 languages. After that, we can discuss specific elements and the specific impacts of such a technical issue.

[English]

Elections Canada

Voter Participation Rates

Hon. Art Eggleton: Honourable senators, I am pleased to ask a question that comes from Jordan Hill of Dundas, Ontario, to the government leader in the Senate. He says the following:

The number of voters in Canada is in long term decline. Since the demographic who vote with the most regularity are aging, Canada can expect voter turnout to continue its decline. Why are young people disinclined to vote? What is being done about increasing the likelihood of voting? Have voting incentives been considered? Has lowering the voting age been considered? Has internet voting been considered?

[Translation]

Hon. Claude Carignan (Leader of the Government): The elections bill introduced by Minister Poilievre provides for a major overhaul. The bill is currently being examined by the House of Commons. Various measures are being taken to make voting more accessible. The government also took into account 38 recommendations made by the Chief Electoral Officer and incorporated them into this election reform. Many of the measures proposed in this bill are designed to make voting more accessible and increase voter turnout.

I therefore invite people to take a look at the bill and share their comments with us if they think of any other measures that could be taken to improve the election process. The bill is currently being examined by the House of Commons and will then be sent to the Senate. Canadians' suggestions on how to make voting more accessible are always welcome.

[English]

Senator Eggleton: Well, I think that bill is arguable in terms of whether it's actually going to make it easier for anybody to vote or not. There are a lot of organizations in this country who think it will be in the opposite direction, but we'll examine that when it gets here.

Certainly your words will go back to Mr. Hill in terms of your response, but I wonder if you have anything specific about any of the points he raises, such as lowering the voting age and Internet voting. What is being done particularly to encourage more young people to vote?

[Translation]

Senator Carignan: If you had the opportunity to examine the bill, you would know that it does not include measures to lower the voting age. There are other ways of encouraging young people to vote.

I invite Canadians to take a look at this bill, which is available online, and to send us their comments and suggestions if they think there are ways in which it could be improved.

[English]

Foreign Affairs

Russia—Actions in Ukraine

Hon. Hugh Segal: My question is to the Leader of the Government in the Senate. In view of the aggressive stance being taken by Russia with respect to Ukraine and the angst now being expressed by Eastern European NATO members about the safety of their borders in view of this Russian aggression, would the government leader undertake to encourage the government on whose cabinet committee he sits to (a) increase the complement of Canada's Armed Forces, and especially our special forces and military intelligence; (b) speed up procurement of ships and aircraft vital to Canada's global responsibilities; and (c) set aside any procurement hypothecation or delay announced by the Minister of Finance in his recent budget?

[Translation]

Hon. Claude Carignan (Leader of the Government): Thank you, Senator Segal, for your question about this serious issue in Ukraine, which is currently affecting the governments that are seeking recognition for Ukraine and democracy throughout the world. As you know, we join our allies in condemning in the strongest possible terms President Putin's military intervention in Ukraine. This intervention is a clear violation of international law. It is a clear violation of Ukraine's sovereignty and territorial integrity. Russia is clearly violating international law. To respond to your question more specifically, as we explained in Economic Action Plan 2012, Canadian Forces regular and reserve force strength will be maintained at 68,000 and 27,000 respectively, over the medium term.

(1440)

As for your second point, I want to point out that we recently announced the new Canadian Defence Procurement Strategy, which will provide our men and women in uniform with the equipment they need at the best possible price for the taxpayer, while maximizing the spinoffs for the economy and industries across Canada. The policy or strategy will also streamline the defence procurement process while promoting economic growth and long-term prosperity in Canada.

We are pleased that our strategy received the support of the Canadian Association of Defence and Security Industries and the Aerospace Industries Association of Canada.

As for your last point on procurement spending, as you know, since the Department of National Defence was unable to spend the money this year, Economic Action Plan 2014 will ensure that these funds remain available to the Canadian Armed Forces over the coming years.

Need I remind you, as I like to remind our Liberal colleagues across the way from time to time, that after a decade of darkness, we have made our men and women in uniform a priority by increasing the National Defence budget by 27 per cent since 2006? We have made the largest investment of the century in the Canadian Armed Forces. As Senator Segal knows, our government remains committed to providing the women and men of the Canadian Army with the support, equipment and training they need to fulfill their mandate.

[English]

Senator Segal: I have a supplementary question. I thank the Leader of the Government for that clear and precise reflection of some of the compelling facts about procurement in the past.

As he will know and colleagues will remember, we began the campaign in support of NATO in Afghanistan with one mix of equipment and skill sets. We had to augment that and make changes to that to ensure that our position in the theatre was sustainable in terms of the best interests of the men and women in uniform.

Can he share with us whether he is prepared to raise the issue of contingent planning in the event that NATO decides that a line does have to be drawn and that we are drawn away from the notion of avoiding military engagement — which all Canadians want to avoid for as long as possible — so that there is contingent planning going on so we know exactly where we have to go, what we have to procure and what we have to engage should the present circumstance in theatre require a joint NATO response, under which we would have our own obligations to discharge?

[Translation]

Senator Carignan: Regarding the response and the actions currently being considered in this matter, as you know, the Prime Minister remains in close communication with his allied counterparts and has held emergency meetings, including here in Canada. Canada is actively involved in the efforts of various multilateral institutions to coordinate the international response. Canadian officials have asked the Russian ambassador to clearly convey our message to Russia, and are reviewing all of our bilateral interactions. We are therefore reviewing all of our ties with Russia in order to provide an appropriate response to that country's illegal intervention.

[English]

Senator Segal: Could the government leader assure us that contingency plans are in place in the event we have to expand our capacity? If he is unable to assure us for reasons of national security, could he at least as a member of various cabinet committees assure himself that contingency plans are, in fact, in place in the event of a change in circumstance?

[Translation]

Senator Carignan: Clearly, before such decisions are made, all cabinet members must ensure that the decisions being taken are responsible and that they can and should be enforced. I also understand that the Honourable Senator Segal has forwarded his ideas to Minister Nicholson in that regard.

National Defence

Budget Deficit—Procurement

Hon. Roméo Antonius Dallaire: One of these days you will get tired of recounting the history of past decades and you will recognize that you have been in power for at least eight years.

Early on, you were meeting the needs of the Armed Forces because we were at war. Not doing so would have been truly irresponsible. Since that time, all procurement has stopped.

The Leader of the Government even has the audacity to say that National Defence has not spent its budget and is currently absorbing these cuts. However, that department was not able to spend its budget because the bureaucratic system that the government has put in place makes it impossible for any spending to be approved appropriately and in a timely manner.

Nevertheless, I want to get back to Senator Segal's question. Is it possible that the government is looking at the future of the procurement program and considering reducing the size of the Canadian Armed Forces or the number of members in order to pay for equipment that will probably take decades to arrive?

Hon. Claude Carignan (Leader of the Government): I will repeat what I told Senator Segal, word for word. As we explained in Economic Action Plan 2012, Canadian Forces regular and reserve force strength will be maintained at 68,000 and 27,000 respectively, over the medium term.

Senator Dallaire: This is 2014, so 2012 is ancient history. In preparation for the upcoming budget cuts, is National Defence considering the option of cutting Canadian Armed Forces personnel in order to pay for equipment they will not see for decades?

Senator Carignan: I miss the beginning of Question Period, when I had questions that came from the public. Once again, we plan on maintaining regular and reserve force strength at 68,000 and 27,000 members respectively, over the medium term.

[English]

Employment and Social Development

Federal Student Work Experience Program

Hon. Catherine S. Callbeck: My question is for the Leader of the Government in the Senate.

Many young people are not working. It's their generation that has borne the brunt of the most recent recession. The unemployment rate of young people is at a staggering 13.9 per cent. Given that information, I was really surprised to learn that under the Federal Student Work Experience Program the number of students in that program has dropped dramatically. In fact, it's gone from 8,305 students in 2011-12 down to 5,835 students in 2012-13. That's a drop of roughly 30 per cent. For many young people, this program opened the door for a job with the federal public service.

My question is this: Why, at a time when the Public Service Commission of Canada admits that it needs to renew itself, is this government eliminating so many opportunities for the next generation to enter the public service?

[Translation]

Hon. Claude Carignan (Leader of the Government): As you know, Economic Action Plan 2014 provides for key investments to ensure that today's youth have the skills they need to be employed, and this includes employment in the public service.

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We implemented the Canada Apprentice Loan, which gives apprentices registered in Red Seal trades access to interest-free loans. That is a total of more than $100 million a year.

We are investing $40 million in internships for young Canadians by creating some 3,000 internships for post-secondary graduates in high-demand fields and by investing $15 million to support internships in small, and medium-sized businesses.

We are also supporting young entrepreneurs by investing an additional $40 million to give them access to mentoring, financial support, professional advice and the space they need so that they can get their ideas off the ground and start a business.

Since 2006, we have helped 2.1 million young Canadians get the training they need or find a job. As you know, the Government of Canada is committed to hiring students and offering workplace internships for youth, and that commitment is continuing.

[English]

Senator Callbeck: I have a supplementary question. With all due respect, I'm asking about students who are hired into federal government positions. The program I mentioned, the Federal Student Work Experience Program, has been cut by 30 per cent. Co-op positions with the federal government have dropped from 4,520 in 2011-12 to 3,408. That's a drop of over 1,100 positions.

It's not surprising that the Public Service Commission of Canada pointed out at the Finance Committee that fewer graduates entered the public service in 2012-13, and there are also fewer employees 35 years old and younger. Well, it's very simple. Their opportunities are being greatly reduced. At the same time, the public service continues to age. We need young Canadians to continue to flow into the public service. Will this government reverse the trend and start hiring more young people?

Some Hon. Senators: Hear, hear.

[Translation]

Senator Carignan: Senator Callbeck, as I explained, we are investing more than $100 million a year in various programs that help young people find work in high-demand fields. This involves the private sector and small, and medium-sized businesses. The Canadian government will continue to hire student interns based on their expertise and the needs of the public service.

Infrastructure, Communities and Intergovernmental Affairs

Champlain Bridge

Hon. Jean-Claude Rivest: Honourable senators, it is difficult to understand why the government is stubbornly refusing to give up on its plan to charge tolls on the Champlain Bridge.

Yesterday, in Montreal, representatives of the Government of Quebec and all municipalities in the Montreal area, including the Mayor of Montreal, held a meeting and once again reiterated the staunch opposition of all Montrealers and Quebecers to the federal government's proposal to make the Champlain Bridge a toll bridge.

I would remind senators that the Montreal metropolitan community, which comprises all the mayors of the suburban municipalities — including the excellent mayor of the city of Saint-Eustache, Pierre Charron — supports all the Montreal area mayors, so we might think that Senator Carignan is probably the only resident of Saint-Eustache to be in favour of a toll for the Champlain Bridge at this time. I am not sure whether this is an act of courage or blindness.

There used to be a toll on the Champlain Bridge. In 1990, the Canadian government decided to abolish it in order to support the development of Montreal and Montreal's South Shore.

My question for the Leader of the Government is quite simple. Why are the Canadian government's reasons for abolishing the toll no longer valid today, even though Montrealers and Quebecers believe that imposing a toll on the Champlain Bridge makes no sense from an economic or social standpoint?

I would like to remind the Leader of the Government that Montreal is an island and that there are other ways onto the Island of Montreal, which then should also charge a toll.

Why is the government intent on making this decision, which goes against the interests of Montrealers?

Hon. Claude Carignan (Leader of the Government): Senator Rivest, I completely disagree with you that this decision goes against the interests of Montrealers. I believe that it is in the interest of Montrealers to have a bridge as quickly as possible, at the lowest possible cost.

You reminded everyone of my roots in Saint-Eustache. I also sat on the board of directors of the Montreal metropolitan community, and the mayor at the time wanted to have a toll on all the bridges.

You see, decisions about whether or not to charge tolls change at the whim of the mayor and with the political climate. With respect to the Champlain Bridge, specifically, and its reconstruction, we remain committed to having a new bridge in place by 2018, and we have always been clear: no toll, no bridge.

We announced the plan for the new bridge in January. This plan will allow us to move forward as quickly as possible to have it completed by 2018. Given that the safety of the people who use the bridge is paramount, we are making major renovations to ensure the sturdiness of the current bridge until the new bridge is ready. We have allocated over $380 million for maintenance, for example.

As for the numbers and the business plan, of course we are not sharing financial information at this time in order to protect the integrity of the tendering process. That is one the demands of the mayors you mentioned regarding the business plan, in particular.

I can assure you that the priority of the people of the Montreal metropolitan community, including the people of Saint-Eustache, is to ensure that they feel safe travelling across the bridge and that the bridge holds up.

Some Hon. Senators: Hear, hear!

[English]

ORDERS OF THE DAY

Sioux Valley Dakota Nation Governance Bill

Third Reading

Hon. Nancy Greene Raine moved third reading of Bill C-16, An Act to give effect to the Governance Agreement with Sioux Valley Dakota Nation and to make consequential amendments to other Acts.

She said: Honourable senators, the time has come for us to show our support for a First Nation ready to take the historic step to self-government. We can do so by endorsing Bill C-16, the Sioux Valley Dakota Nation Governance Act, and passing it swiftly into law. Bill C-16 will enshrine as law the self-government agreement negotiated in good faith by representatives of Sioux Valley Dakota Nation and the Government of Canada.

It will establish a new modern and respectful relationship that will pave the way for growth and economic development. Should the proposed legislation become law, the Sioux Valley Dakota Nation Oyate government will gain much greater autonomy and free itself from the paternalistic and, quite frankly, archaic restraints currently in place under the Indian Act.

Under this legislation, the First Nation will be authorized to enact and enforce laws in a broad range of areas. Sioux Valley Dakota Nation laws will operate concurrently with laws that are made by the federal government and the Manitoba provincial government providing for a comprehensive legal structure that is defined by their tripartite agreement. With the new authority, Sioux Valley Dakota Nation will be better able to meet the needs of its members and plan for the community's bright and prosperous future.

The governance agreement at the core of Bill C-16 sets out more than 50 areas where Sioux Valley Dakota Nation will have jurisdiction — that is, 50 areas where the First Nation stands to gain autonomy and self-sufficiency by stepping out from under ministerial control.

(1500)

However, the First Nation would not be required to exercise its jurisdiction over all of these areas immediately. Instead, Sioux Valley Dakota Nation can choose to "draw down" jurisdictions that are available to it when it feels ready to do so. When it does exercise its authority in a new area of jurisdiction, the corresponding Indian Act provisions will cease to apply on its lands. This provision will allow for a smooth transition of power to ensure that there will be no gaps in the legal structure.

Honourable senators, let me be clear. The governance agreement between Canada and Sioux Valley Dakota Nation is not a land claim or a treaty. Neither is Bill C-16. No new reserve land will be provided to the First Nation through this process, nor will the agreement alter or recognize any constitutionally protected rights that Sioux Valley Dakota Nation might have to lands or natural resources.

This process is about putting in place new arrangements to modernize and renew Sioux Valley Dakota Nation's relationship with Canada and Manitoba and to give the First Nation greater control over its own affairs and the tools for greater self-sufficiency and prosperity.

Honourable senators, Sioux Valley Dakota Nation recognizes that economic and social development depend on a number of factors. For smaller communities, such as Sioux Valley Dakota Nation, finding and securing the right partnerships is an absolute must. By collaborating with partners, communities can access the expertise and experience — and, in some cases, the funding — that they need to achieve their goals. Partners can help start or expand businesses, design and deliver programs and develop infrastructure projects.

Both the Sioux Valley Dakota Nation and our government view this governance agreement as a tool that will enable Sioux Valley Dakota Nation to take advantage of business opportunities as they arise.

To quote Chief Tacan:

— our Dakota young people want the opportunity for local employment, supported by education, training and health so they are equipped to contribute to their community. The Self-government Agreements with Canada and the Province position Sioux Valley Dakota Nation to raise the standards in these areas and other jurisdictions.

The link between self-government and increased prosperity is well established. For example, following the finalization of its self-government agreement, Sechelt First Nation of British Columbia has moved into a broad range of economic activities, including forestry, tourism and, most recently, hydroelectricity. Sechelt has also developed and leased tracts of reserve lands to non-member residents. Partnerships with outside groups play a large role in many of these ventures. It is my sincere belief that the passage of Bill C-16 will place Sioux Valley Dakota Nation in a similar position — that is, ready to capitalize on its potential for economic growth and development.

Studies completed by several authoritative groups, including the World Bank and Harvard University, document the links between self-government arrangements, increased investor confidence, new economic partnerships and improved living conditions. Studies conducted by Aboriginal Affairs and Northern Development Canada found that self-governing communities experience increases in employment levels that average well over 13 per cent.

Keen to forge similar links and achieve similar results, Sioux Valley Dakota Nation entered into self-government negotiations with the Government of Canada more than 20 years ago. The Province of Manitoba joined the negotiations a year later, in 1992, and since then it's been a long, complicated and ultimately fruitful journey.

In 2001, the First Nation concluded a comprehensive agreement-in-principle with Canada and a corresponding tripartite agreement-in-principle with both Canada and Manitoba. Over the following 10 years, all parties worked together to finalize the details.

In 2012, Sioux Valley Dakota Nation developed and ratified an internal constitution that includes strong provisions for democratic accountability.

Members of the community voted to approve the negotiated self-government arrangements in October 2012, and all parties then signed the agreements this past summer. Sioux Valley Dakota Nation has concluded a final agreement that is both far-reaching and holistic. It is clear that all parties involved have worked hard to put the pieces of this agreement in place. Now, the final step is up to us.

Honourable senators, the benefits of self-government agreements extend well beyond individual First Nations. In fact, they ripple across the country and touch the lives of all Canadians. Confident, self-sufficient Aboriginal communities make Canada a better place in every way: economically, socially and culturally. Giving effect to the agreement with Sioux Valley Dakota Nation by passing the legislation now before us would represent a significant accomplishment for this country.

This will be the twentieth such agreement in Canada's history and the first involving a Prairie community. Giving effect to the agreement would show that partnership and dialogue produce positive, tangible results.

To end on another quote from Chief Tacan:

By working to maintain the current pace of progress leading to positive change and through good relations with both Canada and the Province, our self-government can lead to a better future for both Sioux Valley Dakota Nation and the region of southwestern Manitoba.

I encourage all senators to join me in supporting Bill C-16 and making this vision a reality.

The Hon. the Speaker pro tempore: Continuing debate.

[Translation]

Hon. Joan Fraser (Deputy Leader of the Opposition): Honourable senators, I am not speaking to this bill as the critic. Our esteemed colleague Senator Dyck, is our critic. However, as she could not be here today, she asked me to read you a few words that she wrote down.

[English]

This is Senator Dyck speaking:

Honourable senators, I wish to speak today at third reading on Bill C-16, the Sioux Valley Dakota Nation Governance Act. I wish to make some general remarks on this bill.

I would first like to thank the members of the Standing Senate Committee on Aboriginal Peoples and the witnesses from the Sioux Valley Dakota Nation and the Department of Aboriginal Affairs for allowing us to conduct a thorough and quite expansive discussion on the implications of this bill before us, as well as the larger area of legislative options available to First Nations as they move away from the Indian Act.

Bill C-16 is a piece of legislation that gives effect to the governance agreement that has been negotiated. As this is a stand-alone self-government agreement, absent in dealing with the issues of land and Aboriginal rights, there are no section 35 constitutional protections.

What is important to point out is that these section 35 questions can be addressed in subsequent negotiations between the Sioux Valley Dakota Nation and the governments of Canada and Manitoba. How this agreement fits into the larger concept of self-government was succinctly stated by my colleague Senator Sibbeston at committee.

I quote:

The difference is that the agreement and this bill can be amended by Parliament. In this case, Parliament is supreme in terms of changing it.

But in a different one, where section 35 is involved, where the agreement is protected and recognized under section 35 of the Constitution, Parliament is not supreme. Section 35 of the Constitution is supreme and would protect the agreement, so there's a difference. It's not as weighty or enforceable as a treaty or a modern land claim that has the protection of section 35. There's a real difference, and this is lighter, in a sense.

My honourable colleague's interventions put this bill rightly in the continuum of First Nation governance. While it moves away from the Indian Act, this bill has not fully reached treaty status or a comprehensive land claim. As witnesses for the Sioux Valley Dakota Nation told the committee, at this moment, this is the option that Sioux Valley Dakota Nation chose to pursue. It is also reassuring that they are pursuing negotiations with the Government of Canada to address their other outstanding issues dealing with section 35 rights. We wish them well in their ongoing negotiations with the Government of Canada.

One of the concerns I had was that this bill would become the only legislative option for First Nations to move out from under the Indian Act. I didn't want to see a situation down the road where First Nations had their hands tied, going forward with negotiations with the Government of Canada, especially when dealing with coming to resolution on section 35 rights.

(1510)

I was assured by the officials from Aboriginal Affairs and Northern Development and Justice Canada that this was not the case.

I would like to read into the record the remarks of Mr. Lee Webber, lead counsel from Aboriginal Affairs and Northern Development Canada and Justice Canada. He stated:

The senators generally might find it useful to refer to the Government of Canada's inherent right policy. That is the policy pursuant to which Canada engaged in these negotiations, or at least most of the years of these negotiations. That is the policy that governs the Government of Canada's participation in self-government negotiations at multiple tables.

In that policy, it is very clearly spelled out that a range of possible mechanisms can be adopted by the parties at negotiation tables as they see fit. They can treaty protect an agreement. They can create a contract. They can have legislation. There is this menu of possibilities, and it is in the policy explicitly that essentially there's no one-size-fits-all approach.

Senator Dyck continues:

I am glad that these comments were stated by officials of the Government of Canada in the context of this bill. This is an important point for both the Sioux Valley Dakota Nation and other First Nations looking at their options in moving away from the Indian Act.

I would like to congratulate Chief Vincent Tacan and the people of the Sioux Valley Dakota Nation for their perseverance and hard work through a 16-year process.

Hon. Nick G. Sibbeston: Honourable senators, I'm pleased to speak briefly about Bill C-16 and lend my support to it and the people of Sioux Valley Dakota Nation, who through this bill will realize their goals.

In 1995, the federal government adopted a policy on the inherent right to self-government for Aboriginal people. This policy recognizes that self-government is one of the rights recognized under section 35 of the Constitution. At the same time, the policy recognizes that self-government could be provided in a number of ways. It could be in the form of a modern treaty, such as that which established the Tlicho government in the Northwest Territories, which we had the opportunity to deal with a number of years ago. Such treaties are constitutionally recognized and protected, but Bill C-16 does not deal with treaty making. This bill does not have the distinction and weight of a modern treaty recognized under section 35. It is simply a negotiated agreement between a First Nation, Canada and Manitoba.

The agreement allows a First Nation to take on responsibility for making laws and administering their affairs that are now covered by the Indian Act and carried out by the Department of Aboriginal Affairs. This bill will provide for the Sioux Nation to have jurisdiction in approximately 50 areas that are now contained in the Indian Act. The agreement provides for a gradual process wherein it will take on responsibilities as it deems fit.

The Manitoba government will also pass corresponding legislation to give effect to the agreement to cover the areas that affect provincial jurisdiction.

This approach of dealing with self-government is similar to that which established the Sechelt and the Westbank First Nations in B.C., so it is not an absolutely new approach, but it is new for the Prairie provinces and is seen to be a significant advancement for the Sioux Valley Dakota Nation. It may serve as a model for other First Nations in the Prairie provinces.

Bill C-16 represents a first step towards full self-government, and in time it may well continue to attain full self-government and have it enshrined in another act that will have the force and rights under section 35.

The process began in 1991 and is finally complete here today as it passes the Senate and eventually gets Royal Assent.

I want to commend Chief Tacan for his leadership and all those who have been involved through the years, all the people who have been involved to this date in advancing the cause of the people. It is truly encouraging to see First Nations come out from under the aegis of the Indian Act and be free to govern themselves. This bill could well have been, and maybe should have been, called the "set my people free bill," because it really does that. It sets the Aboriginal people free from the aegis of the Indian Act and the federal minister responsible for that department.

I commend this bill to you and hope that everybody will support it.

Hon. Charlie Watt:

[Editor's Note: Senator Watt spoke in Inuktitut.]

I'll quickly translate what I just said in Inuktitut. Regarding what I have heard from the presenter of this bill, Senator Raine, I can only say that I hope this will be carried out according to the way it has been spelled out.

Honourable senators, I rise today to speak at third reading on Bill C-16, the Sioux Valley Dakota Nation governance act.

This process has not been an easy one. As Chief Tacan said, his people were successful farmers originally, going back to the 1800s. But they were disturbed by the system, with departmental policies limiting their ability to do what they felt they needed to do to improve their own situation.

Unfortunately, their experience is not an isolated case. It is not acceptable. This is why we've placed section 35 rights in the highest order of the Constitution Act, 1982, to protect existing rights and future rights to be acquired.

As my colleague Senator Nick Sibbeston pointed out, what has been negotiated here could still be altered by Parliament. Because this bill does not involve section 35, it does not have the supreme protection of the Constitution in the same way. It is not as strong as a treaty or a modern land claim, which have the section 35 protection. That difference must be acknowledged, that this bill is not as enforceable as one that explicitly refers to section 35.

While this process has been under way for many years, more time to consider its implications for today and down the road would have been useful.

I know the Sioux Valley Dakota Nation sees the need to depart from the Indian Act and whatever else might be needed to be full-fledged Canadians, to have access to the same benefits and opportunities as ordinary, non-Aboriginal Canadians.

I want to be sure we are not setting a precedent for the other First Nations. In other words, this is not necessarily the model that would fit all. The Department of Justice told us at the committee that the Government of Canada's inherent rights policy lays out a range of possible mechanisms for future self-government negotiations. So this bill does not have any binding impact on other possible agreements.

I also want to note that this involves the Province of Manitoba. This spring, it is expected that a tripartite agreement connected to this bill will be signed in the Manitoba legislature, but during the transitional process while the province is in negotiations, it is necessary to consider that general laws of application under provincial section 88 of the Indian Act will still apply until the effective date of the bilateral and tripartite agreements related to this bill.

(1520)

I would like to raise those points on Bill C-16 to acknowledge that this legislation is stand-alone and does not specifically refer to section 35 rights, nor should it be considered to be precedent-setting.

Honourable senators, I congratulate the hard work and perseverance that have been put into this piece of legislation.

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

Hon. Senators: Question.

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

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

[Translation]

Statutory Instruments Act
Statutory Instruments Regulations

Bill to Amend—Second Reading—Debate Continued

On the Order:

Resuming debate on the motion of the Honourable Senator Frum, seconded by the Honourable Senator Demers, for the second reading of Bill S-2, An Act to amend the Statutory Instruments Act and to make consequential amendments to the Statutory Instruments Regulations.

Hon. Céline Hervieux-Payette: Honourable senators, I am pleased to share with you my thoughts on Bill S-2, An Act to amend the Statutory Instruments Act and to make consequential amendments to the Statutory Instruments Regulations, and some of the discussion surrounding this bill.

Under the guise of regulatory efficiency, the government is amending its regulatory legislation to supposedly streamline the public administration; however, these amendments seem to better serve the interests of government rather than making the regulations more transparent and more accessible to Canadian taxpayers.

The basic principle of the legislation passed by Canadian Parliament, in both chambers — the House of Commons and the Senate — and confirmed by Royal Assent by the Governor General of Canada, which is explained in greater detail in the regulations that will later be approved by the joint committee of the House and Senate, stems from the Constitution Act of Canada, a document that enshrines and protects the rule of law.

The Privy Council Office guide book states that "...the terms of the law must be knowable, not secret. If a regulation is not published, people cannot be presumed to have had any way of finding out what their rights and responsibilities were under it."

Although the government did not publish its regulations in the Canada Gazette, the regulations are not automatically rendered invalid. However, no one can be sentenced for violating unpublished regulations. In other words, compliance with the law is not sufficient to enable the government to impose sanctions on taxpayers under regulations that were not published in the Canada Gazette. The regulations in question must be published if they are to be enforced.

Bill S-2's process for incorporation by reference in regulations is made even more difficult because of the rule about publishing a regulation, in accordance with the legislation, sanctioned by the Joint Committee on Scrutiny of Regulations. Bill S-2 contains two types of incorporation by reference in regulations. The first is closed incorporation.

This type of reference is specific and cannot be amended if the regulation remains unchanged. It is set out in the enabling legislation. Without prejudice, the reference in question must be accessible to taxpayers, and the minister responsible may not use the reference to get around the requirement to amend the regulations. It would be too tempting to use this method to get around using the formal process of legal examination, registration and publication in the Canada Gazette.

Making a reference to an official document is useful for both the taxpayer and the government, since as we know, data from Statistics Canada rely on the integrity of the system. We must also remember that everything must be in accordance with the enabling legislation. Although this reference has advantages for both parties, we must remember that it is up to the department responsible for making it accessible to all taxpayers, even if publication in the Canada Gazette is not mandatory, as with the regulation in question. This means that each minister or department has the latitude to interpret this and publish.

There is no general registry the taxpayer can currently consult to find the latest version of a regulation that was the subject of a closed incorporation. There is a real risk of inconsistency and especially lack of accessibility as a result of the number of government departments and agencies that are governed by laws and regulations.

According to section 18.1 of Bill S-2, the second method of incorporation by reference in regulations is dynamic, ambulatory or open. That method has even more disadvantages for Canadian taxpayers. The incorporated document may exist in only one official language, which is often the case with national and international technical standards.

Second, the material incorporated by reference might be bilingual, but it might not be free. However, by law, legislation and regulations must be free. Third, the material incorporated by reference may be subject to copyright, which considerably limits taxpayers' access and forces them to pay copyright fees.

In addition, the lack of a uniform publication system for all government departments and agencies makes it far more difficult, and often impossible, to access texts that have been amended to include material incorporated by reference. In such cases, taxpayers who are unable to access the document will have to challenge the application of a regulation before the courts. That means that their rights are greatly diminished by a massive government machine that is only serving its own interests by cutting corners and not meeting the obligations that would apply if it had to amend regulations without subdelegation.

The Scrutiny of Regulations Committee has always had serious reservations about this type of subdelegation. It flies in the face of the fundamental principle of giving taxpayers access to legislation, as it creates many barriers to that access. In my opinion, the enabling legislation should always make it clear that there is a reference to technical standards set by independent expert organizations and that these standards could be later amended to reflect new scientific realities.

When the federal government wants to avoid duplication or inconsistencies, it can refer to provincial or territorial regulations. When a project is affected by legislation at both levels of government, incorporation by reference in regulations can make it easier to carry out the projet, particularly from an environmental standpoint.

Some Commonwealth countries like New Zealand, Australia and Canada — including the Province of Ontario — have made it a general rule to include incorporation by reference in enabling legislation and have put the emphasis on easy accessibility at little to no cost.

This method of open regulation, without reference to enabling legislation, poses real risks when it comes to technical or scientific standards. We must not forget that taxpayers do not have an established consultation mechanism at their disposal. What is more, there is no official central registry that would allow all government agencies to keep the information up to date as texts are amended.

Honourable senators, we know that there are some 3,000 regulations representing slightly more than 30,000 pages, and 450 statutes that cover 13,000 pages, not including the number of directives. You understand that Bill S-2 confirms the current government's approach, which, in my opinion, defies the rule of law for the sake of being expeditious.

What is more, the current government wants to confirm some 170 orders of reference retroactively. This is a far cry from this government's mantra of transparency, confirming that this method, which has been in effect since 2006, was not valid. Finally, what is even more worrisome in this obscure process of open incorporation by reference in regulations is the possible negative influence that all kinds of lobbies might have.

Whether we are talking about food inspection and the amounts of products that are harmful to health, such as the salt and sugar content in prepared foods, studies show that the amounts that are acceptable today make no sense when it comes to public health. Whether we are talking about the toxic emissions from certain dangerous products or technical standards that are less costly to the transportation industry, all this incorporation by reference in regulations will not be automatically published, will not be easily accessible and will not be subject to discussion.

(1530)

It seems to me that this government's ideology can be summed up by the precept that good government is no government. Still, the primary goal of laws passed in Parliament and of regulation is to ensure a balance among the forces in play and to protect the public from being taken advantage of by big corporations and from the vast administrative apparatus of government organizations.

As a member of the Standing Joint Committee on the Scrutiny of Regulations, I would like to remind members of this chamber that the ability of parliamentarians in both houses to carry out an objective review ended the moment the Harper government won a majority. You don't need to be a rocket scientist to see that the executive is constantly telling our Conservative colleagues what to do. Having been a member or the chair of the committee since 1995, I can say that the contribution of MPs and senators is regularly impeded during the scrutiny of regulations.

Even if all we want to do is point out to a minister that a regulation has flaws, we are forced to take a vote. Before the Harper government, the committee was open, transparent and not subject to outside influences. It operated by consensus. What can I say about material incorporated by reference that will never be vetted by MPs or the Senate? That's why I can't recommend that senators of any stripe vote in favour of Bill S-2. Doing so would give an entity as powerful as the government freedom to use subdelegation with no guarantee of fairness and respect for the legal principle of delegatus non potest delegare. I would add that even with the precaution of enabling legislation, respect for the law begins with accessibility and parliamentary oversight, which Bill S-2 bypasses. Thank you.

The Hon. the Speaker pro tempore: Are Senators ready for the question?

Hon. Senators: Question.

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

Some Hon. Senators: Yes.

Some Hon. Senators: No.

(Motion agreed to and bill read second time on division.)

Referred to Committee

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

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

[English]

Bill to Amend—Allotment of Time—Motion Withdrawn

On Government Business, Motions, Item No. 20, by the Honourable Senator Martin:

That, pursuant to rule 7-2, not more than a further six hours of debate be allocated for consideration at second reading stage of Bill S-2, An Act to amend the Statutory Instruments Act and to make consequential amendments to the Statutory Instruments Regulations.

Hon. Yonah Martin (Deputy Leader of the Government): Honourable senators, pursuant to rule 5-10(2), I withdraw this Notice of Motion.

(Motion withdrawn.)

Financial Administration Act

Bill to Amend—Second Reading—Debate Continued

On the Order:

Resuming debate on the motion of the Honourable Senator Moore, seconded by the Honourable Senator Day, for the second reading of Bill S-204, An Act to amend the Financial Administration Act (borrowing of money).

Hon. Wilfred P. Moore: Honourable senators, this bill, of which I am the sponsor, stands in the name of Senator Marshall. I have an agreement with the Deputy Leader of the Government in the Senate that upon completion of second reading, Bill S-204 would be referred to the Standing Senate Committee on National Finance. I would like to know if that will happen.

Hon. Elizabeth Marshall: I took the adjournment of the debate last week, and I have started to prepare my speaking notes. However, I don't have the notes finalized today, so I'm not ready to speak.

Senator Fraser: We had a deal.

Senator Moore: The government spoke at second reading last week, which was a bit of a breach because it was to be done when I was here. I had that arrangement with the deputy leader, that when the bill receives second reading, it is to be referred to the Standing Senate Committee on National Finance. I want to know if the bill will be referred today.

Hon. Yonah Martin (Deputy Leader of the Government): Senator Moore, I know what discussion we had, and I regret to say that today we will not refer the bill to committee, as Senator Marshall explained.

Senator Mercer: Your word is not worth anything. Shame on you!

The Hon. the Speaker pro tempore: I remind colleagues that we cannot debate as there is a motion before the house to adjourn the debate. I will allow a few questions for explanation but definitely no debate. Senator Moore has a question for Senator Martin.

Senator Moore: Yes. I would like to know if Bill S-204 will be referred to committee this week, pursuant to our agreement.

Senator Martin: Senator Moore, I cannot say that it will be referred, but I will have a conversation with the deputy leader opposite. I regret to say that it is not being referred today and that I cannot give you that commitment at this time.

Senator Cordy: Shame, shame!

The Hon. the Speaker pro tempore: It is moved by the Honourable Senator Marshall, seconded by the Honourable Senator Martin, that debate be adjourned to the next sitting of the Senate. Is it your pleasure, honourable senators, to adopt the motion?

Some Hon. Senators: No.

Some Hon. Senators: Yes.

And two honourable senators having risen:

[Translation]

The Hon. the Speaker pro tempore: The standing vote will take place in exactly one hour, at 4:35 p.m.

[English]

(1630)

Motion agreed to on the following division:

YEAS
THE HONOURABLE SENATORS

Andreychuk	McInnis
Ataullahjan	McIntyre
Batters	Mockler
Bellemare	Neufeld
Beyak	Ngo
Black	Ogilvie
Boisvenu	Oh
Buth	Patterson
Carignan	Plett
Champagne	Poirier
Dagenais	Raine
Doyle	Rivard
Eaton	Runciman
Enverga	Segal
Fortin-Duplessis	Seidman
Gerstein	Seth
Greene	Smith (Saurel)
Housakos	Stewart Olsen
Johnson	Tannas
Lang	Tkachuk
LeBreton	Unger
MacDonald	Verner
Maltais	Wallace
Manning	Wells
Marshall	White—51
Martin

NAYS
THE HONOURABLE SENATORS

Callbeck	Jaffer
Chaput	Joyal
Charette-Poulin	Lovelace Nicholas
Cordy	Mercer
Cowan	Merchant
Dallaire	Mitchell
Dawson	Munson
Day	Ringuette
Downe	Robichaud
Eggleton	Sibbeston
Fraser	Smith (Cobourg)
Hervieux-Payette	Watt—25
Hubley

ABSTENTIONS
THE HONOURABLE SENATORS

Cools

Moore—2

(1640)

Senator Moore: Your Honour, I would like to say a few words as to why I decided to abstain. I want to have the opportunity to speak to what's happening here.

I've been in this chamber since 1996, and this institution runs on honour. "Honour" is before each of our titles. That's our name; that's how this place is run. It means you keep your word. I have done that since I have been here. Any time I've entered into an arrangement with anybody on the other side or with colleagues on this side, I've kept my word. You don't decide to keep your word one day and then say, "No, I'm not going to do it," the next day. You do it every day. That's the bedrock of this institution, Your Honour.

This little incident here today is the canary in the mine. I want you to really think about what has happened here. It's absolutely wrong. I discussed this arrangement with Senator Martin. She said, "I'll have to check with someone and get back to you." I said, "Fine, ma'am. Go do that." Senator Martin did that and came back and said, "We have a deal." The deal was that, upon Senator Hervieux-Payette making her speech on Bill S-2, my bill, Bill S-204, would be referred to the Standing Senate Committee on National Finance.

That hasn't happened. And I wanted it to happen this week. That was the deal. I'm hoping, Your Honour, that it will happen this week. That was the arrangement, and I hope that people's word will be kept. Otherwise, I don't know how we can carry on in the future if we can't make arrangements to mutual satisfaction and move on to other issues.

[Translation]

Royal Assent

The Hon. the Speaker pro tempore informed the Senate that the following communication had been received:

RIDEAU HALL

March 4, 2014

Mr. Speaker,

I have the honour to inform you that Mr. Stephen Wallace, Secretary to the Governor General, in his capacity as Deputy of the Governor General, signified royal assent by written declaration to the bill listed in the Schedule to this letter on the 4th day of March, 2014, at 3:59 p.m.

Yours sincerely,

Patricia Jaton
Deputy Secretary

The Honourable
The Speaker of the Senate
Ottawa

Bill Assented to Tuesday, March 4, 2014:

An Act to give effect to the Governance Agreement with Sioux Valley Dakota Nation and to make consequential amendments to other Acts. (Bill C-16, Chapter 1, 2014)

[English]

Payment Card Networks Act

Bill to Amend—Second Reading—Debate Continued

On the Order:

Resuming debate on the motion of the Honourable Senator Ringuette, seconded by the Honourable Senator Smith, P.C. (Cobourg), for the second reading of Bill S-202, An Act to amend the Payment Card Networks Act (credit card acceptance fees).

Hon. Yonah Martin (Deputy Leader of the Government): Honourable senators, I'm not the critic of this bill but I see that it is at day 15, so I ask that it be reset, and we will move to designate a critic for this bill. We don't have the critic at this time.

[Translation]

Hon. Pierrette Ringuette: I have several questions. First of all, who will be the critic?

(1650)

[English]

Senator Martin: I don't have a critic at this time, but I will look at this and have a discussion with Senator Fraser.

Senator Ringuette: Now please just call the question. If you want to call the question, call the question, leader. Call it.

Senator Carignan: If you are ready.

Senator Ringuette: This bill was tabled for the fifth time last October. After I talked, Senator Maltais took the adjournment for 15 sitting days. When his fifteenth day was up, he was not present. Senator Martin said that she would take the adjournment and reset the clock for another 15 days.

So the question is this: Do you or do you not have a viable critic for this bill, or can you not handle it?

Senator Tkachuk: We don't have a critic. We answered your question.

Senator Martin: Right. I don't have a critic at this time, but I'll have a conversation with Senator Maltais. At this time, I don't have the name of the critic.

[Translation]

The Hon. the Speaker pro tempore: Senator Ringuette, I have an adjournment motion here. I gave you two questions, you got two answers, so unless the next question is meant to clarify one of the answers you received, we cannot have a debate on the question to be put. A simple little question.

Senator Ringuette: Mr. Speaker, I understand that you are enforcing the rules, except that, as in the previous case, some senators in this chamber have no regard for the fact that other senators have good intentions.

The Hon. the Speaker pro tempore: Senator Ringuette, I don't want to get into a debate. I understand that you don't want to debate with me, but I cannot allow you to debate with Senator Martin.

I have no problem if you want to clarify an answer. You had two questions, and I understand that you do not have a third. I will put the motion to adjourn.

[English]

It is moved by the Honourable Senator Martin, seconded by the Honourable Senator Marshall, that further debate be adjourned until the next sitting of the Senate.

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

Some Hon. Senators: Agreed.

Some Hon. Senators: On division.

(On motion of Senator Marshall, debate adjourned, on division.)

Pope John Paul II Day Bill

Second Reading—Order Stands

On the Order:

Resuming debate on the motion of the Honourable Senator Fortin-Duplessis, seconded by the Honourable Senator Poirier, for the second reading of Bill C-266, An Act to establish Pope John Paul II Day.

Hon. Terry M. Mercer: Honourable senators, I had hoped to speak on this bill. It has been on the Order Paper for some time and has been reset at least once. I would like to know when we will get to it, because I am preparing a speech.

The Hon. the Speaker pro tempore: I presume you are asking a question of Senator Martin.

Hon. Yonah Martin (Deputy Leader of the Government): It's standing in my name, but I don't wish to speak to it. I was going to see if we could move it to committee by calling the question on the second reading. No? Okay.

Senator Cowan: Maybe today wouldn't be a good day for that.

An Hon. Senator: Oh, oh!

Senator Mercer: As I indicated, Your Honour, I did want to speak on this bill, and I'm preparing some notes. I am not prepared to speak now. I would like it adjourned in my name, if we could.

The Hon. the Speaker pro tempore: The bill is already adjourned in the name of Senator Martin. Senator Martin may agree to let you speak at the next sitting of the Senate.

An Hon. Senator: Oh, oh!

The Hon. the Speaker pro tempore: Order, please!

That will be the proper way to do it. The bill has been stood. If you want to speak at the next sitting, why not speak to Senator Martin. I am sure she will gladly give you the floor to speak.

(Order stands.)

[Translation]

Criminal Code
National Defence Act

Bill to Amend—Second Reading—Debate Continued

On the Order:

Resuming debate on the motion of the Honourable Senator Plett, seconded by the Honourable Senator Marshall, for the second reading of Bill C-394, An Act to amend the Criminal Code and the National Defence Act (criminal organization recruitment).

Hon. Roméo Antonius Dallaire: Honourable senators, this motion is very important to communities across our country, and particularly to diaspora communities. I plan on speaking tomorrow.

(On motion of Senator Dallaire, debate adjourned.)

Transport and Communications

Committee Authorized to Request a Government Response to the Eighth Report of the Committee Tabled during the First Session of the Forty-First Parliament

Hon. Dennis Dawson, pursuant to notice of February 11, 2014, moved:

That, pursuant to rule 12-24(1), the Senate request a complete and detailed response from the Government to the Eighth Report of the Standing Senate Committee on Transport and Communications entitled: One Size Doesn't Fit All: The Future Growth and Competitiveness of Canadian Air Travel, tabled in the Senate on April 17, 2013, during the First Session of the Forty-first Parliament, and adopted on May 7, 2013, with the Minister of Transport being identified as the minister responsible for responding to the report.

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

Hon. Senators: Agreed.

(Motion agreed to.)

(1700)

[English]

The Senate

Motion to Call Upon Members of the House of Commons to Invite the Auditor General to Conduct a Comprehensive Audit of Expenses—Debate

Hon. Percy E. Downe, pursuant to notice of February 25, 2014, moved:

That the Senate call upon the Members of the House of Commons of the Parliament of Canada to join the Senate in its efforts to increase transparency by acknowledging the longstanding request of current and former Auditors General of Canada to examine the accounts of both Houses of Parliament, and thereby inviting the Auditor General of Canada to conduct a comprehensive audit of House of Commons expenses, including Members' expenses, and

That the audits of the House of Commons and the Senate be conducted concurrently, and the results for both Chambers of Parliament be published at the same time.

The Hon. the Speaker pro tempore: On debate, Senator Downe.

Point of Order

Hon. David Tkachuk: Point of order, Mr. Speaker.

I'd like to raise a point of order relating to Senator Downe's motion. It is relatively a rare occurrence that the Senate attempt to instruct the House of Commons on how it should conduct its own business. Autonomy is integral to the proper function of both chambers. There have been times in the history of Parliament when one chamber has attempted to direct the other and in these cases, however, the house or Senate leadership has determined that each chamber remains the master of its own domain.

For example, there is the ruling by Senator Speaker Daniel Hays on June 19, 2003, on a question of privilege regarding the then Privacy Commissioner George Radwanski. Senator Lowell Murray raised a question of privilege urging the House of Commons to resolve the issue of Commissioner Radwanski's status as an officer of Parliament. In his ruling, Senator Hays stated:

As a Senate and as senators, we might dispute what has occurred in the other place, but . . . both Houses are fully independent and autonomous. Each are entitled to the protection of privilege and each have the right to conduct their proceedings as they see fit. I do not see how the Senate can invoke privilege in this case to challenge what was done in the other place.

In 2008, the House of Commons sent a message to the Senate requesting that the upper chamber expedite Bill C-2, the Tackling Violent Crime Act. Ultimately, the message from the House of Commons was not binding on senators or the activities of the Senate. Even though the House of Commons encouraged the Senate to act in a certain fashion on legislation, the Senate still retained full power and responsibility over its decisions.

In the house today, they denied unanimous consent to a motion by one of its own members, very similar to the one to call in the Auditor General, and so I think that Senator Downe's motion is moot, as it should be, honourable colleagues.

Much of the current debate surrounding the role of the Senate has focused on the need for maintaining the independence of our parliamentary chambers and, as senators, we recognize the need for public accountability and transparency. This chamber has elected to invite the Auditor General to conduct an audit of Senate expenses. At some point, the House of Commons may wish to do something similar. In any case, honourable senators, that decision rests with the house and not us. I think to do otherwise would create a precedent which would threaten the independence we treasure in our bicameral system.

Hon. Percy E. Downe: Mr. Speaker, that's a very interesting point of order. Unfortunately, it has nothing to do with my motion. You read out my motion. We're not giving any instructions at all.

The Hon. the Speaker pro tempore: We are on the point of order. I'm ready to listen to all the arguments. It is an important question that is in front of us and I think we have to go thoroughly on that point of order, and I will appreciate all the arguments presented to me.

Hon. A. Raynell Andreychuk: Much as I am sympathetic to the content of the motion that Senator Downe is proposing, my background leads me to believe that we should not be commenting, or instructing, or advising, or pleading with the house to take action. I think that may be one step too far.

I think what I would suggest to the Speaker is that we look at a ruling also, in addition to the one that my colleague has quoted, and that was on May 13, 2008, when the Honourable Noël Kinsella ruled, in a debate that had to do with a motion of Senator Moore, seconded by Senator Day, on the second reading of Bill C-253.

I'll just refer you to that judgment of the Honourable Noël Kinsella. He pointed out in one phrase of this ruling:

As honourable senators know, each House is master of its own procedure, within the bounds of the Constitution and the law. Just as honourable senators would object to the other place examining Senate procedures, it is inappropriate for the Senate to question those of the Commons. As noted in Beauchesne's, sixth edition, at citation 4, one of most important privileges is the right for each chamber ". . . to regulate . . ." its own ". . . internal proceedings . . . or more specifically, to establish binding rules of procedure." This point has been made at different times in Speakers' rulings here in this place. In fact, reference was made to some of these rulings in debate on the point of order.

I say that each one of these that is raised is not quite the same, but I think we have consciously said that we will not comment as to how they internally regulate themselves. Certainly, whether they are audited internally, externally, or in any other manner I think is for the house to determine. While I believe their statements about this place have been inappropriate recently, I would wish that they would respect these kinds of rulings in the other place, but the fact that they do not is not an invitation for us to interfere in their deliberations about their matters. I just put that in for further consideration.

Senator Downe: Again, these points of order are very interesting, but they do not pertain to this motion. You read it out. You read it on the record. Their comments are very interesting if my motion was speaking about what they're talking about. It is not, so I call upon you to allow the debate to continue.

Hon. Joan Fraser (Deputy Leader of the Opposition): Colleagues who have listened to me run on at length over the years will know that I yield to no one in my defence of the independence of the two chambers, but I think this motion has been very carefully worded to avoid interfering with the independence of the two chambers.

This motion calls upon; it invites. It does not instruct. It does not wave any kind of lever as blackmail. It is very similar in nature to motions that we pass quite routinely, where we call upon the House of Commons to join us in expressing opinions about various developments, frequently in foreign affairs. We call upon the House of Commons to join us in expressing congratulations to, for example, Her Majesty on certain auspicious occasions, and so does this.

What it offers is an opportunity — a wholly proper opportunity, Your Honour — for senators to rise and speak about the need for transparency in Parliament, in all of Parliament. I can hardly think of a more appropriate topic, one more within the spirit and tradition of the Senate. However, Your Honour, I would like to do some detailed research. As you said, this is an extremely important question. The question of the relations between the two chambers goes to the very heart of what Parliament is all about.

I have not had time, not having had warning this was coming, to consult the authorities. Unless Your Honour is prepared to rule that the debate on the substance of the motion continue now, which would be my preference, I will move the adjournment of the debate on the point of order.

The Hon. the Speaker pro tempore: There's a second question, a sub-question that is raised now. I will want to hear comments on whether I can accept a motion to adjourn.

Senator Carignan: No.

The Hon. the Speaker pro tempore: Wait. Let me phrase the question properly. I want to make sure, because there is a sub-question here.

The adjournment of debate on the point of order, that's the sub-question. Let's open the discussion only on that. I'm ready to hear arguments on that.

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I hear Senator Cools. Probably there are other colleagues. Senator Cools, you have a point to make.

Hon. Anne C. Cools: Honourable senators, this has taken me by surprise. I was going to suggest to the house, to senators, that because of the importance of the subject matter and its enormous complexity, and also because other senators, not present, might be very willing and interested in taking part, we could engage in a process that we have engaged in before, which is to put over the debate. We have precedents where we have allowed the debate to be adjourned, or held over, on points of order and questions of privilege. That has happened before in the Senate.

I think we should put a request first to say that we should go down that route of holding or suspending the debate. This is a very large issue. We must not forget as well that it also brings to mind many other important issues. To begin with, as I have said on the floor of this house on several occasions, there is no power in the Auditor General Act to audit either the Senate or the House of Commons or their members. And no resolution of either house can overcome that abuse of power.

Honourable senators, in addition, we are very well aware that the Auditor General is also an office-holder by letters patent issued by Her Majesty. I would not like to see that office pulled into this debate, particularly because of the sensitive business that is audit.

Colleagues, I would love the opportunity to be able to look at the subject matter a little bit more closely, and I would ask senators to adjourn or hold over the debate and let it continue tomorrow, when I will have had an opportunity to wrap my mind around this and to look at some authorities.

Your Honour, Senator Nolin, we have done this before. A good point of order deserves very profound and deep study. I would like an opportunity to give it some study.

Honourable senators, I think, in all fairness, other senators should be allowed a moment to study the matter.

The Hon. the Speaker pro tempore: Senator Andreychuk, I must tell you that I'm inclined to agree with Senator Cools, but I'm ready to hear a contrary argument. I think it's a fundamental question that we've been asked by Senator Downe's motion and by the point of order raised by Senator Tkachuk. We will have to go thoroughly to the bottom of that question. It's not going to be superficial. It needs to be a thorough examination of the question. I'm inclined to agree to let senators look into all their books and go to their literature and come back to the chamber.

I'm ready to hear a contrary argument.

Senator Andreychuk: I was going to stand up initially to say that perhaps the motion is attempting to do indirectly what it shouldn't be doing directly, and I will save that argument.

Senator Nolin, you have entered the debate in indicating that you wanted to hear more. I think that it is here a point of order, not a point of privilege. Therefore, I would believe that you could rule on the issue. But I hear that you are not satisfied in your investigation, and I think while it may be new and innovative to do so, this chamber should allow you as much time as you deem necessary to make the appropriate decision. I'm yielding to your indecision at this point as perhaps the fair one to deal with this important point.

The Hon. the Speaker pro tempore: Are there any other arguments? Senator Mercer.

Hon. Terry M. Mercer: Yes, Your Honour. I appreciate your concern and your leadership on this, but I would urge you to rule against the point of order.

It's very clear in Senator Downe's motion that the House of Commons is being asked to join the Senate in its efforts to increase transparency by acknowledging, et cetera, et cetera. No direction is given to the House of Commons. We've sat around here for the last year and heard the members of the other place demanding that we do this and demanding that we do that, and we did not respond directly to any of those demands, as they may not respond to our passing this motion. It's important that we have this discussion, and I think it's very clear that this is not a direction. This chamber has no authority to give direction to the other place, nor do they have authority to give direction to us. I think we should allow the debate to continue and hear Senator Downe's speech. I'm very much looking forward to what he has to say.

The Hon. the Speaker pro tempore: Colleagues, I don't want to argue on the question itself that is raised by Senator Tkachuk, but just by reading two words, "call upon" and "invite," that needs to be properly reflected on. Let's be creative now. Instead of accepting a motion to adjourn the debate, I will suspend the discussion on it. Honourable senators will go back to their libraries and look at their books, and we will reopen the discussion on that at the next sitting, or whenever someone is ready to take the floor and to reopen the discussion on that suspended discussion. Is it agreeable to everybody?

Hon. Senators: Agreed.

Motion to Strike Special Committee on Equalization and Fiscal Federalism—Debate Adjourned

Hon. James S. Cowan (Leader of the Opposition), pursuant to notice of February 26, 2014, moved:

That a Special Committee on Equalization and Fiscal Federalism be appointed to consider whether the current formulae for equalization and other related federal transfers affect the ability of Canadians living in all regions of the country to access a basic standard of public services without facing significantly different levels of taxation.

That the committee be composed of nine members, to be nominated by the Committee of Selection and that four members constitute a quorum;

That, the committee have power to send for persons, papers and records; to examine witnesses; and to publish such papers and evidence from day to day as may be ordered by the committee;

That, notwithstanding rule 12-18(2)(b)(i), the committee have power to sit from Monday to Friday, even though the Senate may then be adjourned for a period exceeding one week; and

That the committee be empowered to report from time to time and to submit its final report no later than March 31, 2015.

He said: Colleagues, as you know from my statement in this chamber last week, the purpose of this motion is to launch a national conversation on equalization and our fiscal federalism. I know this won't be easy. Just say the word "equalization," and most Canadians tune out. The word conjures up complex formulas and obscure concepts like fiscal capacity caps and 10-province standards. Hardly the stuff of everyday talk for Canadians around their morning coffee pot.

Those are the technical details that mask the real issue. Equalization, in fact, is all about what kind of nation we are and what kind of nation we are building for the future. And that is something that concerns every Canadian.

Former Prime Minister Joe Clark in his recent book named equalization along with pensions and medicare as programs that, in his words, "confirmed that we are a society as well as a geography."

Why? Because the whole principle and purpose of equalization is to say that being a Canadian means that wherever you live across this great country, there are certain basic standards you can expect — that is part of what we stand for as a nation, part of what being Canadian is all about.

As the 2006 expert panel put it:

... it means that if people live in Newfoundland and Labrador or British Columbia, Montreal or Medicine Hat, their children should have reasonably similar opportunities to get a good education. They should have access to reasonably comparable health care, social services, and justice systems. And people in one part of the country shouldn't pay substantially higher taxes to support those services compared with their fellow Canadians in other parts of the country.

I think that many Canadians have lost sight of this. It's not surprising given the loaded words that have come to be injected into the equalization debate, words like "have" versus "have-not" provinces, and "handouts" and "dependency." Language matters, colleagues; it shapes and defines the ideas it expresses. So instead of presenting equalization as a program critical to nation-building and national unity, the language used at times can suggest the program does the exact opposite, pitting province against province, region against region.

In fact, equalization payments are not made by "rich" provinces to "poor" provinces. They are made by the Government of Canada from revenues collected by that government from all Canadian taxpayers. That makes sense. It is, as I have said, a Canadian principle of what we stand for as a nation — part of what we have agreed it means to be a Canadian.

(1720)

It is easy to lose sight of that principle when looking at a program with as bland and technical a name as "equalization." I appreciate that. Some might say it's very Canadian of us, to give a program as vital to our national identity such an unassuming, modest name. Certainly "equalization" does not begin to convey its role in our federation, historically and continuing today. "Equality of Canadians" might be more accurate, or "Canadian Fairness, from Coast to Coast to Coast."

Every single Canadian province has received equalization at one time or another in our history. Indeed, while some commentators rightly point out that similar transfers have been part of our federation since Confederation, the equalization program per se began in response to the near bankruptcy of the three Prairie provinces following the Great Depression — yes, equalization was created in part to help Alberta, then in desperate straits. It was an idea of the landmark Rowell-Sirois Royal Commission, whose report in 1940 recommended the institution of what it called "National Adjustment Grants." These were described by the commission as follows:

They are designed to make it possible for every province to provide for its people services of average Canadian standards and they will thus alleviate distress and shameful conditions which now weaken national unity and handicap many Canadians. They are the concrete expression of the Commission's conception of a federal system which will both preserve a healthy local autonomy and build a stronger and more united nation.

It was born from the brutal experiences of so many Canadians during the Great Depression.

That was more than 70 years ago. Since then, equalization became such a vital part of our national fabric that Canadians decided to entrench it in the Constitution in 1982.

Section 36 is the relevant section. The first subsection, 36(1), says in relevant part that:

... Parliament and the legislatures, together with the government of Canada and the provincial governments, are committed to

... providing essential public services of reasonable quality to all Canadians.

This is a powerful statement of national principle, colleagues.

Subsection (2) then addresses equalization specifically. It states:

Parliament and the government of Canada are committed to the principle of making equalization payments to ensure that provincial governments have sufficient revenues to provide reasonably comparable levels of public services at reasonably comparable levels of taxation.

Notice, colleagues, that subsection (1) is a statement of principle by all governments, federal and provincial. Subsection (2) is a commitment by the government and Parliament of Canada. So it is not a question of so-called "have" provinces giving some form of welfare to so-called "have-not" provinces. Frankly, that is insulting. Equalization is a Canadian program, funded by Canadians as Canadians, to ensure that all Canadians have access to "reasonably comparable levels of public services at reasonably comparable levels of taxation."

Is this a principle Canadians still believe in? That is a serious debate we can have. For my part, I can state without equivocation that yes, I do believe in this principle. I don't believe that Canada is about firewalls protecting gated communities. I don't believe it is right as a nation to accept wildly different standards of public services across the country. I believe Canadians would be very disappointed — and rightly so — if we became a nation divided that way.

I think most Canadians understand that a patchwork of better and lesser regions does not build a strong, resilient nation, and that a region that is "up" today may well find itself facing harder times tomorrow. As I said, every province has received equalization at one time or another in our collective history. There is no province that has been exempt. I mentioned Alberta earlier, and how in fact the equalization program developed largely in response to the needs of that province and the other Prairie provinces during the Great Depression. Well, Alberta continued receiving equalization payments even after the discovery of oil in that province — indeed, for seven years after.

Let's be clear: Equalization is not, and never was, about reducing individuals' income inequality between regions or reducing regional economic disparities. It's not about economic development. It is about fiscal disparities, to make sure all provinces across the country have enough revenue to provide Canadians everywhere with reasonably comparable levels of provincial services at reasonably comparable levels of taxation. It is about making sure that people are not forced to leave a province because of exorbitant taxes levied to provide that basic level of service — and it is about making sure that Canadian families and businesses are not forced to reject a province they otherwise want to live or set up business in because of substandard economic and social conditions.

So why is this an issue now? Because, since coming to power, the current government has made certain changes to equalization and the other federal-provincial transfers that many believe affect this principle — that, in fact, the impact of these changes is that Canadians living in different parts of the country will not be able to access reasonably comparable levels of public services at reasonably comparable levels of taxation. This is something that deserves public debate — a serious, national conversation. Yet so far — undoubtedly because of the complexity of the issues and the technical jargon associated with them, and perhaps also some lack of political courage to tackle such a controversial issue — we have not had that discussion.

I believe the Senate has an obligation to encourage that debate. It is difficult to imagine a subject that more directly relates to the future of the regions that we are here to represent. And we are all well positioned to launch that conversation. The Senate has a long history of taking on public policy issues that are both complex and that, for one or another reason, the other place is not addressing. Equalization and the future of our fiscal federation certainly satisfy these criteria.

I believe it would be useful for everyone if I placed on the record a brief outline of the programs, with a focus on the recent changes. Colleagues, I promise there will be no graphs and no mathematical formulas. I invite you to join me in pledging to try to keep this discussion a jargon-free zone. I realize the economic terms that are used have precise meanings that are useful to those who use them, but they are not necessary to this debate, and in fact stop many from participating in the debate. So while I recognize that we may lose some nuance, I would hope that we can restrain ourselves to using our two official languages only, and set aside that other language, "Econo-speak."

One final caveat: This is indeed a very complicated issue. I have tried to present the issues as accurately as possible, but I make no claim to being an expert. I welcome corrections and clarifications.

There are three major federal transfer programs that together create what we call our "fiscal federalism": the equalization program itself; the Canada Health Transfer, or CHT, as it is known; and the Canada Social Transfer, or CST. Let me begin with equalization.

Equalization was designed from the beginning to look at a province's ability to raise revenues — its so-called "fiscal capacity" — compared to the ability of other provinces. The decision to focus on provinces' fiscal capacity was a rejection of the approach taken elsewhere, such as Australia, which was to look at both a province's ability to generate revenue and its spending needs. The concern was that a needs-based approach would lead to federal intrusion into areas of provincial responsibility.

Originally, provinces would receive equalization payments if the revenue they could generate from three taxes set at a certain tax rate was less than what the two richest provinces at the time could generate at those same tax rates. If you are interested, the three provincial taxes used were income tax, corporate tax and succession duties — the three taxes that applied in all provinces.

Over time, the formula became more and more complicated as more provincial revenue sources were added. Among the early changes were the inclusion of things like revenues from provincial sales tax, motor vehicle fuel tax, alcoholic beverage revenues, and, most significantly, royalties from natural resources, notably oil. As will become clear, energy revenues have been, and continue to be, the most complicating and also controversial parts of this program. Over the years, solutions varied from including 100 per cent of energy revenues and tax bases in the formula, to including certain energy revenues, to including 50 per cent of all non-renewable resource revenues. Throughout the years, what revenue sources to include has been one major issue.

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Another issue has been which provinces to include as the "standard" to which each province would be compared. Originally, as I said a moment ago, the comparison was to the two most revenue-rich provinces. This quickly changed five years after the program began with the introduction of the so-called "10-province standard." That is, equalization was then based on the average per capita revenue of all 10 provinces. Now, this change negatively impacted the four Atlantic provinces. Recognizing this, the federal government increased certain grants — special adjustment grants — to these provinces.

This was more or less the state of affairs that continued until 1982. The problem faced in 1982 was very simple: Alberta's oil revenues were driving up the 10-province standard and making the program very expensive for the federal government. A decision was therefore made to exclude the richest province, Alberta, and also the four poorest provinces, then the four Atlantic provinces, from the formula. The result was the so-called "five-province standard."

Colleagues, in the interest of time I will not detail the various proposals and changes that were made in the intervening years, but having I hope set out the basic structure I will now jump to the major changes that were made to the equalization program in recent years.

In 2007, the Harper government moved to an equalization program that returned to the 10-province standard but included only 50 per cent of natural resource revenues. At the same time, it introduced a fiscal capacity cap. Colleagues, this gets complicated, but it is important. This cap was designed to make sure that after equalization, the fiscal capacity of a province receiving equalization did not exceed that of a province that didn't receive equalization. For purposes of calculating the fiscal capacity cap, 100 per cent of a province's natural resource revenues were included, as well as offshore accord revenues, something that was relevant to my province of Nova Scotia and to Newfoundland and Labrador.

In 2009, two more important changes were introduced. First, the government redefined the "fiscal capacity cap." Instead of being equal to the fiscal capacity of the lowest non-recipient province, it was defined as the average fiscal capacity of the equalization-receiving provinces. You can appreciate what a significant change that was. Looking back over the history of the program, it has gone from being a measure against the revenue-generating capacity of the two richest provinces to being limited by the average fiscal capacity of the equalization-receiving provinces.

The second change made in 2009 was no less significant in its impact. The government introduced a ceiling, limiting growth in the equalization program to the three-year average growth in GDP. This second cap, distinct from the fiscal capacity cap, is set to remain in place until 2018-19.

The Council of the Federation, which of course is made up of all 13 provinces and territories, has said about these changes:

As a result of these changes, the current Equalization Program no longer brings the revenue-raising capacity of Equalization-receiving provinces up to the national average standard established by the 2007 Program. Total funding provided within a fixed enveloped program does not adequately respond to the overall level of fiscal disparities among provinces. An increase in entitlements for one receiving province leads to lower entitlements for the other receiving provinces.

To be clear, colleagues: According to the provinces, the equalization program no longer fulfills the purpose for which it was intended.

The Council of the Federation continued:

The working group estimates that between 2009/10 and 2013/14, total Equalization entitlements will be a cumulative $17.8 billion less than they would have been under an "unconstrained" program. For this year, 2012/13, total Equalization entitlements have been reduced from $18.6 billion to $15.4 billion due to these changes.

In other words, the cap really means a $17.8-billion gap across the nation.

Honourable senators, equalization was first envisioned as a nation-building program. Instead, today the fixed-pool approach pits Canadians against each other because no province can gain in entitlements without other jurisdictions losing.

The highly respected Atlantic Provinces Economic Council recently issued a report called The Importance of Federal Transfers to Atlantic Canada. They estimated that the new rule limiting a province's fiscal capacity to that of the average of all equalization-receiving provinces — that rule alone cost my province of Nova Scotia $227 million in equalization payments in 2012-13 — is about 18 per cent of its actual equalization payments or almost 20 per cent, one-fifth. That is a very significant reduction in revenue and therefore a very significant impact on the ability of my province to provide for Nova Scotian families.

Over the last five years, the fiscal capacity cap and the GDP cap cost Nova Scotia $1.7 billion. That is more than Nova Scotia received in equalization last year. In other words, Nova Scotia has lost more than a year of payments in just five years. This loss was mitigated by other payments, the Total Transfer Protection provision, and the Cumulative Best-Of Guarantee payments that arose out of the offshore oil accords. But the Best-Of Guarantee payments will expire and the government suddenly announced two months ago that it will not renew the Total Transfer Protection. So those mitigating payments will not be there moving forward.

APEC reported that "equalization payments in the current program are insufficient to bring all equalization-receiving provinces up to the national average per capita fiscal capacity."

And the result, colleagues? Instead of equalization having "equalized" or smoothed out inequalities in provincial fiscal capacity across Canada, we now face very large disparities amongst the provinces. In 2012-13, Nova Scotia's equalization payments brought it up to 93 per cent of the national average per capita fiscal capacity. This may be contrasted to Alberta, whose per capita fiscal capacity was 51 per cent higher than the national average. There is a disparity of almost 60 percentage points in the ability of these provinces to provide for Canadians — and that is after equalization. Is this the vision that Canadians have for our country, ever greater disparity between regions and between Canadians?

The Canada Health Transfer and the Canada Social Transfer have also seen very significant changes. The CST is the federal transfer that provides post-secondary education funding — and I think all of us in this chamber agree that post-secondary education is becoming ever-more critical as we seek to position young Canadians to meet the challenges of the 21st century.

The CHT is the federal contribution to Canadians' health care. Just as health care costs are the single largest item in provincial budgets, so the CHT is the largest federal transfer payment. In 2014-15, the CHT totalled $32 billion for the 10 provinces.

Until the recent changes, both the CST and the CHT consisted of a cash transfer, a tax point transfer and what was called "associated equalization." I will explain.

The tax point transfer dates back to 1977, when the federal government agreed to transfer tax room from its federal income taxes over to the provinces to help them fund health care and post-secondary education. The value of a tax point, of course, is different from province to province because different provinces have different levels of economic activity. So a tax point in a more prosperous province will be worth significantly more than one in a less prosperous province. Accordingly, the federal government quite sensibly agreed to "equalize" the value of these tax points by province, on an on-going basis. This has been known as "associated equalization."

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In 2007, the federal government announced that both the CST and the CHT would move to so-called equal per capita funding. There would be no more associated equalization; and the cash transfer would be made on an equal per capita basis. This came into effect in 2007-08 for the CST; it will come into effect this year, 2014-15, for the CHT.

To give you an idea of the magnitude of this change, it was estimated that if the change to equal per capita CHT cash had been implemented in 2011-12, Alberta's cash transfers would have increased by $850 million, while every other province would have seen a decline in its share. Newfoundland and Labrador's cash transfer would have been reduced by $55 million. The three Maritime provinces would have seen a combined reduction of $42 million. So these are the kinds of changes we will be seeing in the years ahead as the per capita CHT rule kicks in. It is true that total CHT payments increase annually with the escalator and that the actual cash payments received by the Atlantic provinces will increase, but those increases will not be as much as they would have been without this change — and not as much as the provinces need.

Let me read an excerpt from the APEC report:

While equal per capita cash sounds fair in principle, it does not recognize differences in the per capita cost of providing health care, which may be larger in a province with a more widely dispersed population. Similarly, the per capita demand for health care may vary with demographic characteristics. As annual health care costs increase with age, a province such as Nova Scotia which has a higher percentage of seniors will tend to have above average per capita health care costs. Finally, more prosperous provinces have a greater capacity to raise revenues to fund public services.

This last point, of course, is what the former "associated equalization" was specifically designed to both recognize and counter-balance. That is now gone. There is in effect a double strike for provinces like my home province of Nova Scotia and for the Canadians who live there.

That is not the only change. In 2017-18, the government will shift the growth rate of the total CHT cash transfer from the current 6 per cent escalator to one based on a three-year moving average of nominal GDP growth, with a guaranteed annual minimum increase of 3 per cent. This new formula was unilaterally imposed by the Harper government with no consultation with the provinces.

Our Parliamentary Budget Office looked at the numbers. They concluded that under this formula, CHT will grow by only 3.9 per cent per year on average over the period 2017-18 to 2024-25. Colleagues, that is more than 2 percentage points below the current escalation — and we all know the pressures on our health care system under the current funding structure, which of course are expected to grow, not diminish, given the health care needs of our aging population. Indeed, the PBO estimates that health care spending will grow by 5.1 per cent per year between 2017-18 and 2024-25 — more than one percentage point higher than the anticipated annual increase in CHT payments.

The Council of the Federation estimated that the escalator change alone will reduce total CHT payments by $25 billion over the next 10 years. APEC calculated that for my region, the Atlantic provinces, the total impact of the two changes — the change to per capita funding and the reduced escalator — will result in $2.5 billion in lost health care funding over the next decade.

To put this in perspective, provincial health care spending in the Atlantic provinces grew at an average rate of 7 per cent annually between 2007-08 and 2011-12. As APEC observed, that is well above the 4.7 per cent annual increase in the region's CHT payments.

Let me read to you again from the APEC report:

Although the CHT currently accounts for about 20 per cent of health care spending in the Atlantic region, the slower growth rate in the CHT will force the Atlantic provinces to make some difficult choices. These include diverting an even greater share of their current revenues from other programs into health care; reducing health care services; or finding other ways to curtail increases in their health care costs. While the growth in Atlantic health care spending has fallen to an average growth rate of 0.9 per cent in the last two fiscal years, it is not clear that such restraint can be maintained indefinitely. Finding innovative ways to improve efficiency and boost productivity will be important, but in the context of a rapidly aging population, and with wages the largest single expense in the health care system, such measures may do little to restrain the growing demand for health care and the ever-rising cost to provide it.

Colleagues, Minister Flaherty told Canadians in the recent budget speech:

... our Government remains committed to balancing the budget in 2015.

But I must be clear. We did not do this on the backs of ordinary Canadians or Canadians in need.... We did not cut the programs Canadians rely on. We did not cut transfers to our provinces and territories — money they use for things like education and health care.

Colleagues, take a look at the numbers. Read the analyses from respected individuals and organizations. It is difficult to agree with Minister Flaherty. I believe Canadians will find it difficult to agree with him as to the impact that these changes have made.

I have focused my examples on the impact on my home province of Nova Scotia, but others are equally concerned. Premier Robert Ghiz of Prince Edward Island has spoken about the impact on P.E.I. of the changes to equalization. He called it "a double whammy against a province like mine."

Ontario will lose $641 million because of the sudden cancellation of the Total Transfer Protection payments, something of grave concern to that province. Premier Kathleen Wynne was recently interviewed by Evan Solomon of CBC's The House. Speaking of the cancellation of these payments, she said:

I just don't think it's right. I think it's not fair. And, in the case of $641 million, had the federal government followed the pattern of the last few years with other provinces, they would have flowed that $641 million. And remember, we are net contributors to Confederation.

In 2012, Manitoba's then-Finance Minister Stan Struthers commented as follows on the Harper government's move to per capita funding for the CHT while capping equalization payments:

Every province contributes to the federal government's pot of money for transfer payments, and every province, including Alberta, receives money from the transfer payments pot of money. Every one of us. And every one of us at one time or another collected equalization money, including Alberta. So we all pay in and we all — every province — receive money from transfer payments. So when you cap one side and leave the other side to rise through per capita, that... is an upside-down transfer of funds within our Confederation.

Joe Ruggeri, who held the Vaughan Chair in Regional Economics and was Director of the Policy Studies Centre at the University of New Brunswick, wrote a paper in 2007 on the impact of Budget 2007 on federal transfer payments. He entitled it, Them That Has, Gets. It was published by the Caledon Institute.

That institute published another paper more recently, in October 2012, by Michael Mendelson, entitled, Is Canada (still) a fiscal union? His conclusion:

Canada is no longer a practising fiscal union, at least in respect of using fiscal federalism to mitigate fiscal imbalance.

He traced the problems back to the late 1990s, when, in his words, "equity fell off a cliff and has not bounced back."

Mendelson believes the problem relates to the imbalance in our fiscal federalism caused by natural resource revenues. He is not alone. In the 2012 interview with Frances Russell of the Winnipeg Free Press, Manitoba's then-Finance Minister Struthers also pointed out that the purpose of Canada's constitutionally entrenched equalization program is to ensure that all Canadians, wherever they live, can count on comparable public services at comparable tax rates.

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But the changes presented by the Harper government, Minister Struthers said:

... really turns that upside down. It really puts a lot of pressure on provinces like Manitoba to be able to offer our citizens health services and the rest without going through the roof on the taxes side simply because we don't live in a province that's rich in oil and gas and potash.

All the provinces that lack non-renewable resources are going to be hurt... Meanwhile, the three resource-rich provinces whose economies are booming — two of whom, Alberta and Saskatchewan, hovered at or near bankruptcy during the Great Depression of the 1930s and had to be bailed out by Ottawa — will be better off.

Colleagues, we all know that Prime Minister Harper and his government are laser-focused on developing the resource economy of this country. However, as natural resources assume an ever larger part of our national economy, the implications cannot be ignored.

Similarly, it is simply wrong to reduce Canada Health Transfer payments while ignoring the impact of these reductions and ignoring the fact that provinces have aging populations whose demands on the health care system will increase, not diminish in the years to come.

As a nation, we have an obligation to consider and address these questions together. I have been troubled to see the federal government refuse to discuss these matters with its constitutional partners, the provinces — the parties directly impacted by these decisions. Instead, the federal government chose to make decisions behind closed doors and then unilaterally imposed them on the provinces, with no opportunity for the provinces to explain the impact these decisions will actually have on Canadians. For a program that is all about strengthening national cohesion, that's a very strange way to proceed. Instead of cooperative federalism, I fear we now have confrontational federalism.

Equalization and the other federal transfers are a crucial part of our national fabric. At the national level, equalization has strengthened and unified Canada economically. Canadians can pursue educational and business opportunities across the country without having to accept inferior public services or pay oppressive taxes. Equalization has meant that provinces can compete for workers on a level playing field without worrying that they will lose much-needed labour because of the attraction of better public services provided elsewhere. Ontario students can study at Nova Scotia's top-rated universities and receive the same quality of public services as at home. Young New Brunswickers can fill labour shortages in Alberta without leaving their aging parents to depend on a system stripped of their tax dollars. In short, every province can fairly compete for innovators, investors and workers without cutting public services or hiking taxes. In this way, equalization has encouraged interprovincial mobility with carrots rather than sticks, with rewards rather than risks. In today's dynamic economy, this mobility enhances fair competition and national prosperity. We all win.

Colleagues, Canadians are more than competitors in a supply and demand marketplace. We are more than consumers, more than taxpayers. We are citizens living together in a nation built on certain principles and shared values, one of which is that all Canadians, wherever they live and whatever the current ebb and flow of regional economic prosperity, have access to a basic standard of quality public services. End of story. That, fundamentally, is why we have constitutionalized the principle of equalization in the Canadian social contract. That's why the future of the equalization program must consist of better honouring the principles that underscore and that gave birth to equalization.

Colleagues, equalization has been a vital part of our past, building Canada to be the nation it is.

As a senator from Atlantic Canada, I know very concretely the crucial role equalization plays in the lives of Canadians of my region. As a student of history, knowing that prosperity is rarely a constant and that regions that are prosperous today may be less so tomorrow, I believe that there will be a place for equalization in our future. Different regions play different roles at different times, colleagues. At Confederation, my region, the Maritimes, was an economic powerhouse. It was strong in the resource sector, yes, but we also had a dynamic and growing financial sector. The Bank of Nova Scotia and the Royal Bank were first established there, along with major insurance companies. We had strong steel, iron and textile sectors, as well as shipbuilding. And, in 1890, 24 per cent of Canada's manufacturing businesses were in the Maritimes.

Some say we sacrificed our regional interests to build a stronger nation. Instead of selling our products and resources to the northeastern states, we shipped them across Canada for use here. The Canadian economy grew and strengthened — and Maritimers have been proud to know that they — we — are Atlantic Canadians. That's what being part of a nation is all about. Certainly, it is what being Canadian has been and is all about.

Colleagues, I look forward to this debate and to hearing contributions from senators from all regions, wherever they sit in this chamber. I chose my words carefully in these remarks. This is not and should not be a partisan debate. It's a discussion about how we represent the people of our regions today and looking to the future. It's about what sort of Canada we envision for our children and grandchildren.

I hope this is the first of many debates in this chamber, taking on important public policy issues that directly impact the regions we represent — and doing so with respect for each other's views and ideas. All of us here share a deep commitment to our provinces and to Canada. We have an opportunity, colleagues. Sitting in this place, we are uniquely positioned to give voice to the people of our regions, and to take on important issues — like equalization — that are not being debated elsewhere.

My motion asks that we establish a special committee on equalization and fiscal federalism, so that we can take a serious look at the state of our fiscal union, at the ability of our provinces to provide for all Canadians, from coast to coast to coast, so that we can engage with experts, provincial leaders and Canadians on this critically important aspect of our Confederation.

As I said at the beginning of these remarks, equalization is all about the kind of nation we are and what kind of nation we're building for the future, and that is not something that should ever be decided behind closed doors.

(On motion of Senator Martin, debate adjourned.)

Energy, the Environment and Natural Resources

Committee Authorized to Study Non-Renewable and Renewable Energy Development in Northern Territories

Hon. Richard Neufeld, for Senator Mitchell, pursuant to notice of February 27, 2014, moved:

That the Standing Senate Committee on Energy, the Environment and Natural Resources be authorized to examine and report on non-renewable and renewable energy development including energy storage, distribution, transmission, consumption and other emerging technologies in Canada's three northern territories. In particular, the committee shall be authorized to:

Identify energy challenges facing northern territories including the state of existing energy services and infrastructure assets as well as related economic, social, geographic and environmental challenges;

Identify existing federal and territorial programs and measures aimed at improving energy use and supply in the north;

Examine ways of enhancing and diversifying energy production for domestic needs and export markets; and

Examine ways of improving the affordability, availability, reliability and efficiency of energy use for industries, businesses, governments, and residents in the north.

That the committee submit its final report no later than December 31, 2014 and that the committee retain all powers necessary to publicize its findings until 180 days after the tabling of the final report.

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An Hon. Senator: Question.

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

Hon. Senators: Question.

Hon. Joan Fraser (Deputy Leader of the Opposition): I have a question for Senator Neufeld, Your Honour.

Briefly, sir, could you give us some indication of what the work plan would be here, how elaborate the work will be and whether travel is involved?

Senator Neufeld: Yes, travel will be involved to the three northern territories, — that is, Yukon, Northwest Territories and Nunavut, — mainly to the capitals but to some other regions of the North to actually review the things that the Speaker just read out.

We need to present this to the Internal Economy Committee by March 7, which is coming fairly quickly, so that, if possible, we can get approval for those costs. We're working on that as we speak.

[Translation]

The Hon. the Speaker pro tempore: Honourable senators, before we continue debate, it being six o'clock, I am obliged by rule 3-3(1) to leave the chair until eight o'clock unless honourable senators agree not to see the clock.

Is it your pleasure, honourable senators, not to see the clock?

Hon. Senators: Agreed.

The Hon. the Speaker pro tempore: Agreed.

Do you have any more questions, Senator Fraser?

Senator Fraser: No, thank you, Mr. Speaker. I have a better understanding of what the motion is about.

(Motion agreed to.)

[English]

Ineffectiveness of Non-Refundable Tax Credits for Low-Income Families

Inquiry—Debate Adjourned

Hon. Catherine S. Callbeck rose pursuant to notice of December 4, 2013:

That she will call the attention of the Senate to the ineffectiveness of non-refundable tax credits for low-income families.

She said: Honourable senators, this item stands at day 14. Since I'm not prepared to speak today, I'd like to reset the clock.

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

(On motion of Senator Callbeck, debate adjourned.)

Hydrocarbon Transportation

Inquiry—Debate Adjourned

Hon. Richard Neufeld rose pursuant to notice of February 11, 2014:

That he will call the attention of the Senate to the safety of hydrocarbon transportation in Canada, and in particular, to the twelfth report of the Standing Senate Committee on Energy, the Environment and Natural Resources entitled: Moving Energy Safely: A Study of the Safe Transport of Hydrocarbons by Pipelines, Tankers and Railcars in Canada, deposited with the Clerk of the Senate on August 22^nd, 2013, during the First Session of the Forty-first Parliament.

He said: Honourable senators, I rise today to call the attention of this chamber to the safety of hydrocarbon transportation in Canada and, in particular, to the twelfth report of the Standing Senate Committee on Energy, the Environment and Natural Resources, entitled Moving Energy Safely: A Study of the Safe Transport of Hydrocarbons by Pipelines, Tankers and Railcars in Canada. This report was deposited with the Clerk of the Senate on August 22, 2013, during the First Session of the Forty-first Parliament.

In the course of the nine-month study, the committee held 18 hearings in Ottawa and heard from over 50 witnesses. We met with a range of stakeholders and organizations, and conducted site visits in Calgary, Sarnia, Hamilton, Saint John, Point Tupper, Halifax, Dartmouth, Vancouver, Blaine and Seattle, Washington, and Valdez and Anchorage, Alaska.

With so much attention on high-profile oil and gas projects, including potentially huge nation-building projects in my home province of British Columbia, we knew our study was timely. In fact, we set a very ambitious completion date for ourselves.

We knew, for example, that our report had to be released before the final report by the Joint Review Panel on the Enbridge Northern Gateway Project and the government's subsequent decision on the project. Of course, the Joint Review Panel has issued its final report now and has recommended that the pipeline be approved with 209 conditions, because Canadians will be better off with this project than without it.

The committee also knew that when the government announced measures toward the creation of a world-class tanker safety system in March 2013, including a review by the Tanker Safety Expert Panel, we wanted our report — and the work of our committee — to prove of value to their process.

However, honourable senators, what we did not anticipate was the terrible tragedy in Lac-Mégantic, Quebec, on July 6, 2013. This horrific accident claimed 47 lives and left a community in ruins.

It also thrust the issue of hydrocarbon transportation into the spotlight in a way that we never imagined. I can tell you that our committee members had many thoughtful discussions as we grappled with how to reconcile what we learned over the course of the study with that devastating event.

From the report, I'm going to read a couple of recommendations in regard to rail safety that we made, understanding that there were still lots of investigations going on with what happened in Lac-Mégantic. I read verbatim:

10. That the federal government initiate a major arm's-length review of the country's railway regulatory framework, standards and industry practices to meaningfully advance the safe transportation of dangerous goods by rail in Canada....

13. That Transport Canada apply appropriate minimum liability coverage thresholds to ensure rail companies have the financial capacity to cover damages caused by a major incident.

I am proud to say that those things are being discussed and worked on as we speak. Another recommendation states:

11. That Transport Canada review, in cooperation with the United States Department of Transportation, the use of CTC-111A and DOT-111 tank cars and consider accelerating the transition to the revised standard.

In fact, that was supported just recently, in mid-February, by Hunter Harrison, the current CEO of Canadian Pacific and previous CEO of Canadian National, when he said that thousands of older-model tank cars currently hauling crude oil on North American railways must be retrofitted or retired immediately. That's a strong statement from someone who is in charge of that large company.

At the end of the day, I'm confident that our report provided both a valuable overview and clear recommendations that have made a meaningful contribution to the public discourse. I would like to thank the deputy chair, Senator Grant Mitchell, and all committee members for their hard work and commitment to meeting our deadlines during the summer break.

The reality is, honourable senators, that we are dependent on oil and gas and the many products and comforts that we derive from these resources: energy to fuel our vehicles and heat our homes, but also daily staples like shampoo, soap, clothing, toys, and even aspirins and vitamin capsules.

Let us also remember that the energy sector is an important economic generator in this country. According to Natural Resources Canada, in 2012, energy industries accounted for $155 billion — over 9 per cent of total Canadian gross domestic product. In fact, it ranks in the top three sectors, behind manufacturing, real estate, and rental and leasing.

It might also interest honourable senators to know that there are 369 oil and gas companies listed on the Toronto Stock Exchange and the TSX Venture Exchange, with a total market capitalization of $376 billion. In 2013, the equity capital raised by these companies was $5.2 billion, and $204 billion in oil and gas company stocks was traded.

The industry's impact on employment is also significant, with more than 335,000 direct jobs, including 3,800 self-employed positions. Additionally, there are another 161,000 indirect jobs in the electric power and oil and gas engineering construction industries.

Globally, Canada is also an important player, ranking fifth in the world in crude oil production. In 2012, we produced 3.3 million barrels per day; of these, we exported 2.3 million. Virtually all of our crude oil — 99 per cent — is exported to the United States.

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In light of the increase in oil and gas production in recent years and the expected future growth, our transportation needs across all modes are great. The committee learned, for example, that Canadian National Railway and Canadian Pacific expected to move 140,000 carloads of crude oil in 2013, a dramatic increase from 500 carloads in 2009. In my view, the point underscored the importance of ensuring — as our transportation systems expand to meet the demands of growing production — that regulations are carefully designed so as to protect the public, workers and the environment.

Currently, our maximum pipeline capacity out of western Canada is 3.5 million barrels per day. Production is expected to grow in the years ahead. To meet this expected demand, several large pipelines are being proposed: TransCanada Keystone XL Pipeline with a capacity for 830 barrels per day; the Enbridge Northern Gateway Pipeline with a capacity of 525,000 barrels per day; and Kinder Morgan Trans Mountain Pipeline, which is seeking to increase its capacity from 300,000 to 890,000 barrels per day to U.S. and overseas markets.

It was in this context that your committee undertook its study. From the outset, the committee decided that the purpose of this study was not to rank the modes nor to determine if there was a safest way to transport product. Rather, we were committed to examining the current state of emergency and spill prevention, preparedness, safety, and response programs for rail, pipelines and tankers.

Overall, the committee found that, for the most part, hydrocarbons are moved safely in Canada. In 2012, 1.2 billion barrels of crude were moved on Canada's federally regulated pipeline system; that is, on those pipelines that cross a provincial or international border. According to the data on this system, from 2000 to 2011, 99.9996 per cent of crude and petroleum products were moved without a spill.

The data on the rail system prior to the Lac-Mégantic accident are similarly impressive: 99.9 per cent of the millions of carloads of dangerous goods that are moved each year are delivered without incident. In fact, the committee learned that from 2003 to 2012, train accidents in Canada had actually declined by 25 per cent and main track derailments decreased by 60 per cent. More specifically, in terms of the number of accidents involving dangerous goods, there was a 48 per cent decline over the same period.

It's important to note that, on the tanker side, there have been no major spills in Canada for decades. The only major tanker spill in Canada happened off the coast of Nova Scotia in 1988 when an explosion aboard the Odyssey resulted in a spill of 132,000 tonnes of crude oil.

In global terms, the most recent major spill took place in South Korea in 2007. That event occurred when the tanker Hebei Spirit was hit by a barge while anchored and leaked 11,000 tonnes of crude oil. Overall, international statistics show that 19 of the world's 20 largest oil spills took place before the year 2000.

The reality is that the last two decades have seen an increase in seaborne oil trade; yet, despite this, there has been a significant decrease in the number of tanker spills.

To investigate this issue further, the committee travelled to Alaska to meet with officials and see first-hand the lessons learned from the Exxon Valdez disaster. Honourable senators will recall the grounding of the Exxon Valdez in March 1989 when 44,000 tonnes of oil — about one fifth of its cargo — was released off the coast of Alaska.

This event had a profound impact on the shipping industry worldwide and led to many positive improvements in tanker safety. In fact, U.S. officials told the committee that the volume of spills over the past decade could be measured in teaspoons.

In this country, a review following that disaster resulted in a significant revamping of the marine spill prevention, preparedness and response approach used in Canada. Under MARPOL, the International Convention for the Prevention of Pollution from Ships, and the Canada Shipping Act, 2001, large crude oil tankers operating in Canadian waters are required to be double-hulled. This has been the requirement for large tankers — for example, those over 5,000 deadweight tonnes — since 2010. Starting in 2015, all smaller tankers will also be required to have double hulls.

Over the course of the committee's study, a range of testimony revealed two key concepts that are fundamental to achieving the results in safety outcomes. It seemed to us that witness after witness emphasized the importance of building social licence and creating a culture of safety. "Social licence" can be defined as "the broad approval by society for a given activity or project."

Brenda Kenny, President and CEO of the Canadian Energy Pipeline Association, suggested that in this day and age it is not enough to obtain a regulatory licence or permit in order to proceed with energy projects. Rather, there must be:

... an understanding that public safety is much more than an engineering challenge; it also involves creating an overall sense of security and confidence in the operation of facilities and the institutions that regulate them.

This means that in order to earn the social licence to build and operate energy systems, you need a robust safety system with a clear focus on the environment, transparency, early consultation and continued community engagement. This can also mean going beyond regulated requirements in order to address community concerns.

Of course, all of this is about building trust with stakeholders. As Al Ritchie, Vice-President of Operations for Spectra Energy Transmission West, explained to the committee:

... to ensure we have that trust, we work hard to be transparent, to explain to the communities what we are doing and why we are doing it.

Regulators also play an important role in building public trust. Today, perhaps more than ever, the National Energy Board and Transport Canada are well known and visible to the public. They have a valuable role to play, especially in communicating clearly with the public in a transparent and efficient way. Indeed, it is the view of the committee that the information on the types of products released and the reasons for the incident should be made publicly available in a timely and accessible manner.

Transportation operations, including equipment and assets, are subject to regulatory requirements. All companies also have safety policies and procedures in place to prevent accidents; this includes everything from safety protocols, personal safety equipment, inspection and monitoring programs, to equipment standards, training, supervision and so on.

While regulations are a very important component, they are only one part of the safety equation. The committee learned that it is also vitally important to analyze and understand the nature of accidents. Ultimately, it is this information and understanding that enables transportation systems to develop effective measures to address weaknesses and reduce accidents.

Honourable senators, this is where safety culture comes into play. "Safety culture" refers to the shared values and beliefs that interact with an organization's structures and management systems to produce certain behaviours. Throughout the study, I was pleased to find many witnesses emphasize the importance of fostering a strong safety culture. Witnesses told us that one of the guiding principles was that every worker clearly understands that safety is the top priority and that safety is embedded in the approach to all activities; it is not a separate consideration.

We were told by senior executives that organizations investigate all lapses and encourage employees to report errors. We were even told that employees were empowered to immediately stop an operation if they perceived any threat to safety.

The Hon. the Speaker pro tempore: Honourable senator, do you need more time to finish your remarks?

Senator Neufeld: Five minutes.

The Hon. the Speaker pro tempore: Do honourable senators agree?

Hon. Senators: Agreed.

The Hon. the Speaker pro tempore: Let's take it five minutes by five minutes.

Senator Neufeld: Thank you, Your Honour.

It was especially impressive to stand on the floor of control rooms at various sites and have front-line workers tell us the same and share their stories with us. It was clear to us that, although a culture of safety may start at the top of an organization, its strength lies at the lower and middle levels.

Ultimately, honourable senators, the committee produced a concise 45-page report that was both timely and well-received. We offered 13 strong recommendations that addressed issues across all three modes, with implications for regulators, industry, government departments and agencies. I would like to take a moment to highlight some of the committee's accomplishments in this regard.

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Our press conference was carried live on national news stations and was widely reported in national and local print and, of course, online media. In fact, our report was even picked up internationally and appeared, for example, on foxnews.com.

I'm also aware that the report was well-received by industry. I have been told that a top executive at British Petroleum insisted that it be distributed across the company and be required reading.

The Canadian Energy Pipeline Association supported, in principle, the committee's call for improved public access to oil spill information. They also cited the importance of increased public transparency through industry-wide performance tracking and reporting.

The National Energy Board, the federal regulator for pipelines, also commented in the media that it agreed with our recommendations and pointed out that it is developing a "safety culture framework."

More recently, the committee's work was acknowledged and supported in the report of the Tanker Safety Expert Panel. In their report, A Review of Canada's Ship-Source Oil Spill Preparedness and Response Regime — Setting the Course for the Future, they write:

Furthermore, we support the recommendations made by the Standing Senate Committee on Energy, the Environment and Natural Resources in its report... to enhance transparency in the Regime by making information on spills available to the public.

Honourable senators, no activity is risk free, but while there is risk in everything, we are empowered to make informed, intelligent choices that mitigate those risks.

In the case of the transportation of hydrocarbons, we need to ensure and trust that our transportation systems, and the institutions that regulate them, are focused on keeping the public safe and the environment free from harm.

Personally, I have great confidence in the systems we have in place in Canada, and frankly, what we learned during this study only strengthened this. However, as many witnesses emphasized to us, there is no room for complacency. We must continue to strive to find new ways, as technology improves, to refine existing processes and training.

As we were told throughout the study, there must be an atmosphere of continuous learning and understanding about why accidents occur. Above all, organizations must have a preoccupation with failure — both understanding it and how to prevent it.

Honourable senators, I am pleased to see that government officials, regulators and industry players at every level are seized with this preoccupation. With these systems in place, the health and safety of Canadians and our environment are in good hands.

(On motion of Senator Seidman, debate adjourned.)

(The Senate adjourned until Wednesday, March 5, 2014, at 1:30 p.m.)

Debates of the Senate (Hansard)

2nd Session, 41st Parliament, Volume 149, Issue 40

Tuesday, March 4, 2014 The Honourable Pierre Claude Nolin, Speaker pro tempore

THE SENATE

Tuesday, March 4, 2014

2nd Session, 41st Parliament,
Volume 149, Issue 40

Tuesday, March 4, 2014
The Honourable Pierre Claude Nolin, Speaker pro tempore