Previous Sittings

Order Paper and Notice Paper

Previous Sittings

Journals of the Senate

Previous Sittings

Debates of the Senate (Hansard)

Debates of the Senate (Hansard)

Download as PDF

Debates of the Senate (Hansard)

1st Session, 36th Parliament,
Volume 137, Issue 42

Tuesday, February 24, 1998
The Honourable Gildas L. Molgat, Speaker

SENATORS' STATEMENTS
ROUTINE PROCEEDINGS
QUESTION PERIOD
ORDERS OF THE DAY

THE SENATE

Tuesday, February 24, 1998

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

Prayers.

SENATORS' STATEMENTS

Olympic Winter Games

Memories of 1998 Games at Nagano, Japan

Hon. B. Alasdair Graham (Leader of the Government): Honourable senators, as the Olympic flame burned out at Nagano, it felt great to be a Canadian.

Hon. Senators: Hear, hear!

Senator Graham: Nobody said it better than Thérèse Brisson, a fine Montreal-born stalwart for the silver-winning Canadian women's hockey team. She said:

I think what we'll take home from these games is how much that Maple Leaf is your passport to the world.

We all have magic memories of golden moments at Nagano. We have memories of speed skating medal hauls, and curlers who won gold. We have memories of blistering bobsleds, of rock 'n roll snowboarding, and lots of home-grown heroes. We have memories of young women flying to gold and skating to silver. We have memories of those who worked wonders on ice and snow. We have memories of daring and of triumph; of pain and elation. We have memories of the courage of a man called Elvis, and the pure grit of Susan Auch.

We have memories of the Great Gretzky, who is an inspiration to all young athletes of our time - a millionaire marching with young athletes who have barely a dime; a man who knew the impossible pain of losing, sometimes the worst feeling in the world, but a man who showed the same class in losing as he did in winning. They do not call him the Great One for nothing - a hockey legend living in the egalitarian golden glow of an Olympic village; living with the spirit of people who understood that what holds us together is much stronger than that which tears us apart.

We have memories of those wonderful Canadians who said goodbye to the winter games with a 9-by-18-metre flag smuggled, we are told, into the closing ceremonies; a flag loved and respected across the planet; a flag which is pure gold; a flag carried by our Canadian stars in Nagano, in a place where anyone wearing a Team Canada jacket was a legitimate hero.

These are athletes loved and envied by millions across the planet; athletes of the Maple Leaf; Canadians who understood, as they gazed into the looking-glass of world opinion, as they stared into the reflections of this nation in the world community, that Canada is a place of hope and promise for millions of people the world over, a place of dreams and images of a better world.

These athletes saw at first hand that the Maple Leaf is our passport to the world, that our strength comes from mutual respect and tolerance, and that we were seen in the looking-glass of world opinion as being a special place; a compassionate, free society; a vast federation which is a microcosm of a linked planet - a linked planet which came together in the snowy hills of Nagano under the umbrella of the Olympic Truce.

[Translation]

Honourable senators, today we celebrate the magical hours of the Winter Games and its victories. To the people of Nagano, who can now regain the tranquility of their city, we offer our thanks.

[English]

(1410)

None of us will forget the images of sumo wrestlers stomping to drive out demons as the games began, of the glorious Ode to Joy and mass choirs and choruses around the world, of starry-night closing ceremonies and flower-laden horses, of floodlights dimming and thousands of paper lanterns becoming a shimmering sea of light.

Most of all, honourable senators, there were the children: children scattering petals and singing in school choirs, huge numbers of children who turned out for every event, cheering and laughing, in the last games of an old millennium and a harbinger of the new. There, under the spirit of centuries past, gathered the children of a new Japan. They watched, laughed, and blew horns at the athletes. They learned about endurance, courage and pain, about the world's finest winter Olympians and the ancient spirit of man, about humility being part of the elation that comes with winning, about nobility and grace being part of the agony of losing.

As their voices sung out in the stadium of bobbing lights, it became clear that the real gold at Nagano was the promise of a better world and the children who will lead us into it.

Hon. Senators: Hear, hear!

International Rehabilitation Council for Torture Victims

Hon. A. Raynell Andreychuk: Honourable senators, I rise today to address the other side of humanity, the issue of victims of torture. The Minister of Foreign Affairs should be commended on Canada's contribution to the agreement to ban landmines and Canada's success in focusing world attention on civilian victims of war. However, the minister has only addressed one side of the civilian problem, the other being victims of torture: in many ways, the invisible side of wars.

Last November, Senator Angus hosted here in Ottawa a Danish delegation of the International Rehabilitation Council for Torture Victims. They met with a number of government departments and parliamentarians, of which I was one.

The IRCT is a multilateral organization involved in some 100 countries, and it receives its money from the United Nations Voluntary Fund for Victims of Torture. Canada is also the home to national organizations that are active in helping these victims. Canada was among the first countries in which such services were organized, initially in Toronto in 1983, but they now exist in 11 localities and in most provinces. Canada was instrumental in creating the United Nations Voluntary Fund for Victims of Torture in 1981, an accomplishment by a group with which I was privileged to serve in the late 1980s.

There is a growing need for international funding of activities to assist victims of torture. The Canadian contribution, however, has been marginal and comes nowhere close to matching contributions by a number of other countries that have provided funding, especially the United States.

Until recently, the United States' contribution was in the order of $100,000 U.S. annually. Lately, the United States significantly raised its annual contribution to $1.5 million U.S. and is expected to further raise this sum to $3 million for 1998. The annual Canadian contribution has been - I am embarrassed to say - about $18,000 U.S., matching the contributions of countries such as South Korea and South Africa, and not the contribution of smaller countries like Sweden which contributes $388,000 U.S.

In a letter to Senator Angus dated January 9, 1998, the Minister of Foreign Affairs stated the following:

To date, Canada has only made a token contribution to the UN Voluntary Fund for Victims of Torture. In spite of budget reductions and resource restraints the Department of Foreign Affairs and International Trade attaches priority to this fund and is actively seeking new resources. I have contacted my colleague, the Honourable Diane Marleau, Minister for International Cooperation and Minister responsible for La Francophonie, and have asked that the Canadian International Development Agency examine the possibility of contributing to this fund.

Honourable senators, the intention is there, the words are there, but the actions are not. Canada must make victims of torture a high priority if we are to regain our traditional high profile in human rights issues. Canada must make a more determined contribution to ease the plight of victims of government-sanctioned torture throughout the world, particularly in areas where Canada is already actively involved in promoting human rights.

The Hon. the Speaker: Honourable senator, I regret to interrupt you, but your three-minute period has expired. Is leave granted?

Hon. Senators: Agreed.

Senator Andreychuk: I ask all senators to help these victims by urging the government to significantly increase its funding, both multilaterally and bilaterally.

Olympic Winter Games

Conclusion of 1998 Games at Nagano-Congratulations to Canada's Athletes

Hon. Raymond J. Perrault: Honourable senators, I should like to thank the Leader of the Government in the Senate for his very eloquent remarks with respect to the Olympic games. As a former minister of sport, I listened very carefully to what he had to say.

There are many people to be thanked for these successes. It was not a major government apparatus that made all of this possible, but rather the mothers and fathers of Canada donating countless hours of volunteer work to get youngsters to swimming pools and to other athletic facilities. None of these successes would have been possible had it not been for this enormous volunteer effort which took place in all of Canada's provinces.

A chap said to me the other day, "Well, Ray, you know, this particular athlete only finished in sixth place." Sixth place out of the entire world! That is a magnificent success, not a failure. As to those who did not even get medals, what a contribution they have made to this country. The same applies to all those who did not make the team, who stayed behind in Canada, after thousands and thousands of hours of hard work and training during those early morning swim lessons.

The greatest Olympic standing in our history is a success due to the work of the mothers, fathers, coaches and volunteers of this country, who have served us superbly well.

The Rt. Hon. Brian Mulroney, P.C.

Tribute

Hon. Marjory LeBreton: Honourable senators, five years ago today Prime Minister Brian Mulroney announced he would be resigning as Prime Minister and Leader of the Progressive Conservative Party.

There is no doubt that he and the government he led greatly altered the course of Canada. Fundamental, radical changes took place during his stewardship. History will no doubt properly credit him and his government for their courage and foresight, initiatives such as the free trade agreement with the United States and NAFTA, abolishing the 13.5-per-cent manufacturers sales tax and introducing the 7-per-cent GST consumption tax to spur exports. Also, his government eliminated the Foreign Investment Review Agency, or FIRA, abolished the National Energy Program, privatized Crown corporations such as Teleglobe, Air Canada, Canadair, de Havilland, and began the process for Petro-Canada. As well, a revamped patent act was introduced to strengthen the pharmaceutical industry to attract new investment to Canada. These are but a few of the achievements.

On the fiscal side, the average rate of growth of program spending was cut by 70 per cent. Government spending on programs was reduced from $1.23 for every dollar in total revenues to $0.97 when he left in 1993. An operating deficit of $16 billion a year was transformed into a $6.6 billion surplus. As a percentage of GDP, the federal deficit was virtually cut in half, from 8.7 per cent in 1984 to 4.6 per cent in 1990-91. The worldwide recession took a serious toll on that number, but public finances were still left in a position significantly stronger than what Mr. Mulroney and his government found.

By the time he left office in June of 1993, employment in Canada was up 1.4 million jobs from the September 1984 level. The prime rate of 6 per cent was the lowest in 20 years, our inflation rate was 1.5 per cent, the lowest in 30 years, and the United Nations had just reported that, in terms of quality of life, Canada was the number one nation in the world. That was the Canada Brian Mulroney turned over to his successors almost five years ago.

(1420)

I wish to emphasize that these policies, whether free trade or fiscal management, were not an end in themselves; they were a means to an end, which is the achievement of greater opportunity, higher incomes and better living standards for all Canadians.

On this fifth anniversary of his announcement, coinciding as it does with the date of the 1998 Budget of Paul Martin, I wish to end my remarks by congratulating the present government for keeping all the aforementioned policies in place, the results of which I am sure we will hear about and witness later today.

The Hon. the Speaker: Honourable senators, I wish to inform the Senate that the 15-minute period allocated for Senators' Statements has expired. Is leave granted to continue?

Hon. Senators: Agreed.

[Translation]

The Late Kathleen Shannon

Tributes

Hon. Lucie Pépin: Honourable senators, it was with great regret and profound sorrow that we learned in January of the death of Kathleen Shannon from lung cancer. Ms Shannon, one of the first filmmakers of the National Film Board, founded the famous Studio D. Her friends and colleagues always considered her a visionary of courageous leadership, a filmmaker, a feminist of the first order and an individual who guided her contemporaries with a keen intellect and a deep and steadfast commitment to the role of women in society.

The press release issued by the National Film Board tells us the following:

Kathleen Shannon began her career as a filmmaker when she joined the NFB as a young woman in 1956. She worked as a sound editor, picture editor, director and producer. Her strong views on feminism were firmly in place long before the feminist movement made itself felt. In 1974, she established Studio D, the women's studio, with the mandate to make films by, for and about women. According to filmmaker Terre Nash (If You Love This Planet):
If the front door was closed to women filmmakers, she would let us in the back door. If the back door was closed, she would let us in through the windows.

[English]

Kathleen headed the ground-breaking studio for 12 years and oversaw the production of about 100 films, including Oscar winners I'll Find A Way, If You Love This Planet and Flamenco at 5:15. And Studio films permeated the hearts and minds of a broad spectrum of audiences to influence society on many levels. Titles such as Speaking our Peace on disarmament, Not a Love Story: A film About Pornography, To a Safer Place on child sexual abuse, Abortion: Stories from North and South on reproductive rights, and Behind the Veil - Nuns on women's history, ignited dialogue within the women's movement and well beyond.
Barbara James, Director General of the National Film Board's English Program, notes that Kathleen "had an enormous impact on the development of women's filmmaking, both inside and outside the NFB. She had an unshakable conviction in the uniqueness of women's experience and was determined to see that life experience reflected on the screen. The proof of her success is that many of the things she fought for are now accepted and self-evident."

[Translation]

The Canadian government awarded Kathleen Shannon the Order of Canada in 1986. To enable us to appreciate the ideological heritage left by this great filmmaker, director Gerry Rogers and producer Signe Johansson recently produced a film entitled Kathleen Shannon: On Film, Feminism & Other Dreams.

On behalf of all the women of Canada, I would like to thank her for her lasting gift to us and to pay tribute to her courage in drawing attention to the violence, injustice and inequality faced by women in this country. To her family and her friends we offer our sympathy and our profound appreciation.

[English]

Black History Month

Hon. Donald H. Oliver: Honourable senators, I rise to bring to the attention of honourable senators the observance of Black History Month in Canada during the month of February.

Black History Month began in 1926 in the United States when renowned black educator Carter G. Woodson proposed a Negro history week. He felt that mainstream history textbooks ignored the positive accomplishments of African Americans, and that the only way to celebrate this rich culture was to move outside the normal curriculum. This was achieved by holding special events to call attention to the history of the black people in the United States. In 1976, Black History Week was expanded to Black History Month.

Black History Month has been celebrated in Canada since 1970. Since its inception, Black History Month has provided our community with an annual opportunity to meet, reflect and share with each other a vision of the community. February was the time chosen to celebrate this period, as it included the birthdays of Fredrick Douglass, a slavery abolitionist and great orator, as well as Abraham Lincoln.

The Canadian black community has suffered from the same lack of recognition in school books, school curricula and anthologies, et cetera. The positive accomplishments of our community in Canada have received scant, if any, recognition. Names of outstanding individuals such as Thomas Peters, James Robinson Johnston, Anne Packwood, Richard Preston, Harry Gairey and Don Moore remain unknown, not only within the black community but to most Canadians.

This past month has been most rewarding. Notwithstanding the hectic travel schedule both within and without Canada of the Banking Committee, I was honoured to participate in a number of celebrations across Canada, including those held at Sackville High School and at Sir John A. Macdonald High School in Sackville, Nova Scotia. This was an opportunity to exchange ideas with the students, to learn first hand of the full impact that the twin evils of racism and bigotry have on individuals and communities. My message to the students was one of hope for a better world, a better Canada - one free of racism - as they begin their journey towards adulthood.

On Saturday last, I joined with Mayor Mary Pitt of Nepean for the official launch of Nepean's African History Week, the first time such an event has been held in that city. I addressed the assembly on the importance of the event in the African-Canadian population of the Ottawa-Carleton region. I stressed the importance that all Canadians must place on preserving Canada's humanitarian traditions. Today I fear that this reputation is in jeopardy, as politicians respond to media attacks on new immigrants and refugees with more and more restrictive regulations.

On Sunday in Montreal, I was the keynote speaker at celebrations hosted by the Centre for Research Action on Race Relations and the Congress of Black Women. I outlined the importance of protecting, preserving and promoting black history and culture, and I suggested that they use the Society for the Preservation of Black Culture in Nova Scotia as an example of what could be achieved in the Montreal area.

I also addressed the importance of understanding and responding to the poor results reported in the latest Report on Employment Equity in the Federal Public Service. I also reviewed the recently released recommendations to change the Immigration Act and how many sections impact negatively on the visible minority community in Canada.

On Monday of this week, I had the honour of addressing three classes of students at Outremont High School in Montreal to discuss the importance of black role models to both our community and all Canadians. The message I left with the students was that they are our hope for the future, that the task of achieving equality continues, and that while progress has been made, racism is far from beaten.

Next month, I have been asked to speak to students at Simon Fraser University on the black experience in Canada.

Today I encourage all Canadians to join with us in the celebration of Black History Month. Let knowledge and understanding triumph over ignorance and intolerance. Help us build bridges between our communities. This will surely make Canada a better place in which to live.

ROUTINE PROCEEDINGS

Business of the Senate

Adjournment

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

That when the Senate adjourns today, it do stand adjourned until tomorrow, Wednesday, February 25, 1998, at 1:30 p.m.

(1430)

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

Hon. Noël A. Kinsella (Acting Deputy Leader of the Opposition): Honourable senators, with respect to this type of notice of motion relating to the hour of sitting on Wednesday, would the government side be open to the suggestion that, at the beginning of the session tomorrow, there might be a house order to the effect that at 3:15 p.m., His Honour will rise, and it will be deemed that this motion is placed before us for consideration? In other words, at 3:15 p.m., His Honour will rise and say, "The motion to adjourn has been placed before us." Perhaps that would get us around the problem that we have been experiencing recently on Wednesdays.

Senator Carstairs: Honourable senators, certainly this side would be delighted if there was an order which would allow some rigour in terms of enforcing the ability to hold committee hearings at 3:15 p.m., as planned.

Hon. John B. Stewart: Honourable senators, perhaps Senator Kinsella would explain his suggestion.

The arrangement, as I understand it, is that we sit at 1:30 p.m. on Wednesdays in order to allow the committees to meet at 3:15 p.m.. In other words, the target for the chamber to rise is not 3:15 p.m. but three o'clock. Would my honourable friend be prepared to use three o'clock instead of 3:15 p.m. as his time specific?

Second, as I understand it, his proposal is that at a certain hour - and he mentioned 3:15 p.m. - the Speaker would put the adjournment question. Under those circumstances that would be a debatable motion. If so, we might then go on for an hour or an hour and a half - depending on what we could smuggle into that debate. That would not be an exempt, routine motion, as I understand it, but a debatable motion. It might not help us in the way that I think the honourable senator intends. Is that correct?

Senator Kinsella: I was trying to get around the problems we have been experiencing on Wednesdays. I have not researched this matter to the extent that I should have done concerning whether this particular technique would be appropriate. Therefore, I simply raise it as an indication of the goodwill on this side to achieve the objective that I think is a common objective. Perhaps we could reflect upon that, or perhaps identify some other technique.

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

Hon. Senators: Agreed.

Motion agreed to.

Depository Bills and Notes Bill

Report of Committee

Leave Having Been Given to Revert to Presentation of Reports from Standing or Special Committees:

Hon. Catherine S. Callbeck, for Hon. Michael Kirby, Chairman of the Standing Senate Committee on Banking, Trade and Commerce, presented the following report:

Tuesday, February 24, 1998

The Standing Senate Committee on Banking, Trade and Commerce has the honour to present its
SEVENTH REPORT
Your committee, to which was referred the Bill S-9, An Act respecting depository bills and depository notes and to amend the Financial Administration Act, has examined the said Bill in obedience to its Order of Reference dated Friday, December 12, 1997, and now reports the same with the following amendment:
Page 5, clause 17: replacing line 36 with the following:
"makes final and irrevocable payment of the amounts owing to the clearing house"
Respectfully submitted,

MICHAEL KIRBY
Chairman

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

On motion of Senator Callbeck, for Senator Kirby, report placed on the Orders of the Day for consideration at the next sitting of the Senate.

Canada Cooperatives Bill

Report of Committee

Hon. Catherine S. Callbeck, for Hon. Michael Kirby, Chairman of the Standing Senate Committee on Banking, Trade and Commerce, presented the following report:

Tuesday, February 24, 1997

The Standing Senate Committee on Banking, Trade and Commerce has the honour to present its
EIGHTH REPORT
Your committee, to which was referred the Bill C-5, An Act respecting cooperatives, has examined the said Bill in obedience to its Order of Reference dated Tuesday, December 16, 1997, and now reports the same without amendment.
Respectfully submitted,
MICHAEL KIRBY
Chairman

Hon. Noël A. Kinsella (Acting Deputy Leader of the Opposition): Honourable senators, it is my understanding that in the tabling of documents from committees, the presentation of the report is done by either the chairman of the committee or the deputy chairman. I may be wrong in this, but I saw the chairman of the committee, and I also know that the deputy chairman is in the Senate. Why is this report not being presented by either the chairman or the deputy chairman?

Senator Callbeck: Honourable senators, Senator Kirby could not be here, and so he asked me to table these reports this afternoon.

Senator Kinsella: Honourable senators, in the absence of the chairman, then automatically the deputy chairman of a standing Senate committee should be presenting its reports. I would not want what has happened today to become a precedent. However, we will accept the tabling of the report today, as it is here.

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

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

Pages Exchange Program with House of Commons

The Hon. the Speaker: Honourable senators, before I proceed to the next item on the Order Paper, I should like to introduce to you the Pages who are on the regular exchange program with us from the House of Commons.

With us today is Katherine Telford, who is in the Faculty of Social Sciences at the University of Ottawa. Her major is in political science. Katherine is from Toronto.

[Translation]

Honourable senators, also with us is Craig Rice of Maple Ridge, British Columbia, who is studying arts at the University of Ottawa.

I wish both of you welcome to the Senate on behalf of all honourable senators.

[English]

(1440)

QUESTION PERIOD

Health

Cuts to Spending on Medicare-Response of Minister to Criticism-Government Position

Hon. Donald H. Oliver: Honourable senators, on February 19, the Minister of Health was asked whether this Liberal government would stand up for medicare and ensure that no more deaths occurred as a result of emergency line-ups and cut-backs in hospitals, to which he responded:

If the hon. member would pay more attention to the facts than the characteristically empty rhetoric of the NDP, we would be a lot further ahead.

My question to the Leader of the Government in the Senate is: Will he indicate whether the honourable member is indicating that opposition to the health crisis in Canada is empty rhetoric?

Hon. B. Alasdair Graham (Leader of the Government): Honourable senators, I would never characterize anything as empty rhetoric unless perhaps I were on the hustings. I certainly would not do so in this chamber.

The fact of the matter is that there has been increased spending on health care in our home province of Nova Scotia, and as has been indicated by the premier, that will continue.

Senator Oliver: Does the Leader of the Government admit that as a result of this Liberal government's cuts to medical transfer payments, patients across the country are bearing the brunt of Ottawa's efforts to balance the budget?

Earlier today I received a phone call from a senior citizen in Nova Scotia complaining about being put out of hospitals because of lack of services. What is to be done?

Senator Graham: Honourable senators, the federal government and governments at all levels in all provinces are looking for a more efficient use of the tax dollar with respect to health care. I recognize the concerns. I do not think there is anything that is more important, certainly in the minds of Canadians, than a good, sound, health care delivery service that is open and fair to all.

Compensation Promised to Victims of Hepatitis C-Government Position

Hon. Norman K. Atkins: Honourable senators, my question is to the Leader of the Government in the Senate. Last week, on February 20, the Minister of Health was asked whether the federal government would act unilaterally to resolve the issue of compensation for sufferers of hepatitis C. In response to the question, the minister stated:

...no one would be happier than I with a compensation package for Hepatitis C victims who are after all bearing, notwithstanding their innocence, the consequences of this tragedy.

and:

...this government will not walk away from its responsibilities and at the end of the day will discharge those responsibilities.

At least 30,000 of our fellow Canadians are suffering from the effects of hepatitis C. Would the Leader of the Government in the Senate tell the Canadian public whether this government is ready yet to unilaterally provide compensation to these people?

Hon. B. Alasdair Graham (Leader of the Government): Honourable senators, as my honourable friend knows, meetings were held in the past ten days in Toronto between the federal Minister of Health and provincial ministers of health. That matter was one of the subjects of discussion. No final decision was made, although progress was reported and I understand that negotiations continue.

Senator Atkins: If the government is unwilling to act in a unilateral fashion at this time, would Senator Graham indicate when it will consider such action as a measure of responsibility to the Canadian public, and why it continues to stall in its resolution of this pressing issue?

Senator Graham: Honourable senators, I do not believe that I indicated that the government has ruled out acting unilaterally, but, as in all cases, it would certainly follow the negotiating route first, which, it is hoped, would be most successful for Canadians in every province.

Cut-backs in Transfer Payments to Provinces-Effect on Public-Government Position

Hon. Terry Stratton: Honourable senators, my question is to the Leader of the Government in the Senate. On February 17, the front page of The Winnipeg Sun carried the following captions:

Patients are being left in the hallways of many city emergency wards - some for up to a week.

Health-care cut-backs are being blamed for the crunch in available beds.

Hospitals often divert ambulances to other hospitals to deal with overcrowding.

One woman left in a hallway got an acute care bed only after suffering heart failure.

As a result of this government's severe and Draconian cut-backs to transfer payments to the provinces for health care, the Canadian public is suffering as never before. As health care spending cuts begin to take their true toll on the people of Canada, this federal government continues to tell the public that things are improving; "Don't worry, be happy."

This, honourable senators, is simply not the case. What is happening in Winnipeg is not an isolated incident. It is symptomatic of what is happening in hospital wards from St. John's to Victoria. People are suffering from a lack of federal funds to health care.

My question is: Would the Honourable Leader of the Government in the Senate indicate to Canadian taxpayers when his government will acknowledge its financial responsibility and end this crisis in health care?

Hon. B. Alasdair Graham (Leader of the Government): Honourable senators, I should hope that Senator Stratton will also address that question to the Government of Manitoba.

Some Hon. Senators: Hear, hear!

Senator Graham: My understanding is that the Government of Manitoba, to its credit, has a budget surplus and that it has chosen not to direct any of that surplus to the improvement of health care facilities in the province. Rather, it has put it away for its rainy day treasury board, which, in itself, is commendable. At the same time, I think we should look directly at where the responsibility lies, and that is with the Government of Manitoba.

Senator Stratton: Honourable senators, is this not called buck passing? Where does the buck stop? Is it not with the leader and his government? The honourable senator knows that is not true, and he should not sit there and say it is.

Senator Carstairs: It is true.

Senator Stratton: Can the leader tell me why, in spite of the new CHST flow of $12.5 billion, transfer payments to Manitoba for health, education and social assistance will fall by another $12 million over the next five years?

Senator Graham: That is exactly not true.

Senator Stratton: If the leader is saying no, could he at least tell me why, and give me the background on the "no"?

Will he answer the following question: As Leader of the Government in the Senate, who is from Nova Scotia and represents Nova Scotia in cabinet, would he explain why cash transfers to Nova Scotia for health, education and welfare will fall by a further $14 million over five years?

Senator Graham: My honourable friend knows that the cash flow for health has been raised to $12.5 billion, and that will mean an increase of several billion dollars to each of the provinces over the next several years.

Senator Stratton: I do not believe you.

Cut-backs in Transfer Payments to Provinces-Decrease in Quality of Screening Facilities for Breast Cancer-Government Position

Hon. Marjory LeBreton: Honourable senators, my question is for the Leader of the Government in the Senate. A Canadian Press story in The Toronto Star on February 23 reported a disturbing trend which is sweeping across the country: Women are cancelling their mammogram appointments. As a result of federal government cut-backs in transfer payments to the provinces, health care facilities have suffered tremendously. According to this report, half of the 338 clinics do not meet standards. The problem is that the survey did not specify which facilities were substandard. Women who called the Breast Cancer Society of Canada expressed fear and shock that these facilities are not regulated by national standards of quality.

My question is: Would the honourable Leader of the Government in the Senate indicate to Canadian women whether the Minister of Health will commit to establishing a set of national standards to ensure quality breast screening facilities all across Canada?

Hon. B. Alasdair Graham (Leader of the Government): Honourable senators, that is a very valid suggestion raised by the Honourable Senator LeBreton. I am pleased that the honourable senators opposite are raising so many health issues because they are important to all Canadians, and we should all be more cognizant of the need for the best possible health care delivery system in this country, and one that is fair and open on an equal basis to all Canadians.

(1450)

With respect to the cash flow, the Canada Health and Social Transfers to the provinces have gone from $11 billion to $12.5 billion.

Senator Lynch-Staunton: What were they three years ago?

Senator Graham: This means that close to $7 billion in additional money over six years goes to the provinces to fund health care, post-secondary education and social assistance.

Senator Lynch-Staunton: That is not what the provinces are saying.

Senator LeBreton: I hope that some of those funds go to address the very serious problem of breast cancer.

Cut-backs in Transfer Payments to Provinces-Assurance of Safety of Screening Facilities for Breast Cancer-Government Position

Hon. Margory LeBreton: As a supplementary question, when this survey was conducted, the government used survey codes to protect the clinics' confidentiality. Women across Canada, as well as the clinics involved, would like to be assured of the safety of their own various facilities. Will the minister ask his colleague in the other place to take steps to inform those facilities which were found to be below standard? Will he determine how to communicate this information to the clinics and to the women who would be in need of the services of these specific clinics?

Hon. B. Alasdair Graham (Leader of the Government): Honourable senators, the reduction in public sector health care expenditures is as a result of restructuring, as my honourable friends opposite know. This restructuring in the provincial health care programs is designed to improve the efficiency and effectiveness of Canadian health care programs.

I spoke about increasing the cash flow to $12.5 billion annually, starting in 1997-98. I should mention as well that the total CHST transfers, including cash and tax points, are now more than $25.2 billion a year, and will rise in 1998-99. As a result, we hope that a stable, predictable funding plan will result.

At the same time, I acknowledge the important points which have been raised by Senator LeBreton, and I certainly will bring them to the attention of those most responsible.

Energy

Implementation of Alternative Fuels Act-Request for Answers to Order Paper Questions

Hon. Colin Kenny: Honourable senators, I have a question for the Leader of the Government in the Senate. As many of you are aware, I have had a series of questions on the Order Paper since approximately May of 1997. They were placed on the Order Paper again after the Speech from the Throne. They are questions numbered 8, 16, 19, 23, 24, 27, 29, 30, 37, 43, 45, 51 and 53.

Senator Lynch-Staunton: I know the feeling.

Senator Kenny: I do not know how long it takes for the government to answer simple, straightforward questions. These are not difficult questions. These are not complicated questions. They have to do with a bill that originated in this house. They are simple questions, such as: Have your fleet managers ever driven an alternative fuel vehicle? Does your minister use an alternative fuel?

None of these are difficult questions. Yet the government seems to have extraordinary difficulty in providing answers. Could the Leader of the Government please tell me how many more months it will be before I receive answers to these 13 questions?

Hon. B. Alasdair Graham (Leader of the Government): Honourable senators, I am thankful for the reminder. We shall take action today. I am happy to report that we do have some answers today, which will be tabled by the Deputy Leader of the Government, to questions numbered 8, 29 and 30. It is to be hoped that we will report further progress as the week moves on.

Human Rights

Assistance for Victims of Torture-Possible Increase in Funding-Government Position

Hon. A. Raynell Andreychuk: Honourable senators, I direct my question to the Leader of the Government in the Senate. In connection with the subject-matter that I raised in my statement earlier, while Canada was instrumental in creating the United Nations Voluntary Fund for Victims of Torture in 1981, the Canadian contribution has been woefully low, and nowhere close to matching the growing needs of the international fund and its activities undertaken to assist victims of torture. However, other countries are now coming forward.

The Minister of Foreign Affairs appears to have recognized the need to attach a priority to the funding of assistance for victims of torture, and to be actively seeking new resources through the Minister of International Cooperation.

Will the Leader of the Government explain to members of this chamber why cabinet does not appear to have taken a decision on this matter, and why the Prime Minister has not been vocal on this important human rights issue?

Hon. B. Alasdair Graham (Leader of the Government: Honourable senators, I agree that this is an important human rights issue. The Minister of Foreign Affairs is an advocate for these very important causes. In fact, he himself has brought them forward on a number of occasions. He is very sensitive to the problems faced by those around the world who are less well-off, particularly those who are victims of torture and terror. I assure my honourable friend that I will bring her representations to the attention of my colleagues, and most especially the Prime Minister and the Minister of Foreign Affairs.

Senator Andreychuk: As a supplementary, the Human Rights Commission will soon be meeting. There is a growing unease in some sectors of Canada that the commission's work is not getting the high priority that it once did from both the cabinet and the Prime Minister.

Will the government undertake to make an announcement of increased funds and thereby show support to the valuable work that is being done in Geneva on behalf of victims of torture as a complement to our very valuable work in landmines?

Senator Graham: I believe that the Honourable Senator Andreychuk's representations are very timely. Certainly the report of the annual meeting of the Human Rights Commission will be taken very seriously. I will endeavour to bring her representations to the attention of those most responsible as forcefully as I possibly can.

Canadian Heritage

Possible Celebration for Olympic Athletes-Government Position

Hon. Gerry St. Germain: Honourable senators, although I missed Senators' Statements, I have a question for the Leader of the Government in the Senate relating to his very eloquent and appropriate statement about the performace of our athletes at the Olympic Winter Games in Japan.

Like Senator Perrault, I would pay tribute to those capable Canadians who did us so proud. While I do not wish to take away anything from those who won medals, I would make special mention of "the Great One" because he was there when the team suffered defeat. He was there proudly representing Canada, and he was part of the team.

Hon. Senators: Hear, hear!

Senator St. Germain: Because of the diversity of our great country and the huge expanse that we cover, I understand there might be difficulties, but is the government planning any celebratory event to bring together all of these athletes? That would allow all Canadians to capitalize on this particular great event and on the accomplishment of these great Canadians, and thus build unity in this great country.

Hon. B. Alasdair Graham (Leader of the Government: I must acknowledge that Senator St. Germain is a pretty good stickhandler himself for getting in his tribute to "the Great One."

It is to be hoped that the Government of Canada will act at the appropriate time in this matter. I do not know of any definitive event which is proposed. However, I suspect that our Olympians will be honoured at an appropriate time, and we will be able to see Wayne Gretzky among those who are honoured. Perhaps a good time would be when the New York Rangers are next in town to meet the Ottawa Senators.

(1500)

There were so many stars in Nagano who impressed all Canadians. There were incredible moments of pride in being Canadian, and pride in our athletes and in all the people associated with their hard work. As Senator Perrault appropriately reminded us, the parents of these athletes have sacrificed so much. It was heart-warming to see so many parents of the participants at the site, watching their children compete. Senator Callbeck spoke of Mr. MacEachern from Prince Edward Island and the wonderful, warm conversation that he had with his mother by way of satellite television from Nagano to Prince Edward Island. Those are the things that bring us closer together and make us so proud to be Canadian.

Hon. Senators: Hear, hear!

Iraq

Aversion of Crisis by Agreement with United Nations Secretary-General-Government Position

Hon. Marcel Prud'homme: Honourable senators, on Tuesday, February 17, the Honourable Senator Grafstein invited us to put forward our thoughts on Canadian policy on the crisis in Iraq. I will do so with great honour and pleasure in due time. However, I should first like to say that I am sure all members rejoice in the success, so far, of the mission of the Secretary-General of the United Nations, who succeeded in averting a terrible crisis in the Middle East.

I am sure honourable senators are listening silently, and that they do not disagree. I certainly do not hear any disagreement.

Some Hon. Senators: Hear, hear!

Senator Prud'homme: Since President Clinton called to ask Prime Minister Chrétien, on behalf of Canada, to join in the effort, my very simple follow-up question to that is: Did President Clinton have any consultation with the Canadian government in announcing that he would accept the Secretary-General's opinion that a deal was in the making?

Hon. B. Alasdair Graham (Leader of the Government): Honourable senators, I am aware that the Minister of Foreign Affairs, Mr. Axworthy, spoke to U.S. Secretary of State Albright yesterday, and he was to speak with the Foreign Ministers of the United Kingdom and of France. I do not know if those two conversations have taken place.

As honourable senators may be aware, the UN Security Council was briefed by Secretary-General Annan this morning. We are all aware of the deal which would ensure that UNSCOM has unrestricted and unlimited access to all sites in Iraq, including presidential sites. However, further deals must be clarified, and they will probably be forthcoming later this day.

Child Custody and Access

Senate Representation on Steering Committee of Special Joint Committee-Question to Joint Chairman

Hon. Anne C. Cools: Honourable senators, my question is for the Joint Chairman of the Special Joint Committee on Child Custody and Access. Senate representation and participation in the decision-making of joint parliamentary committees is a matter of abiding concern to the Senate and to senators. My question is as follows: How many persons sit on the steering committee of the joint parliamentary committee, and how many of those persons are senators?

Hon. Landon Pearson: Honourable senators, the steering committee, which was set up by the whole committee, was established to represent all parties and the Senate. Generally speaking, there are one or two senators on it. It depends on how the parties have chosen to represent themselves on the steering committee. That is the way in which it was set up. It is not the decision-making body of the committee. It is simply the group that comes together to bring forward ideas to the committee as a whole, on which seven senators and 16 members of Parliament sit.

Senator Cools: Honourable senators, I think the senator has misunderstood me. The question was: How many persons sit on the steering committee, and how many of those who sit on the steering committee are senators?

Senator Pearson: At the moment, most meetings of the steering committee consist of seven people, and most of the time there have been two senators present.

Senator Cools: Are the two senators, then, members of the committee?

Senator Pearson: Yes.

Senator Cools: My question is straightforward: How many people sit on the steering committee, and of the number who sit on the steering committee, how many are senators?

Senator Pearson: Each time the senators are there, they are members of the committee.

Senator Cools: Then is the steering committee not a fixed group? In other words, is the membership of the steering committee not a fixed number, so that if I were to go to the steering committee meeting tomorrow, I could become a member?

Senator Pearson: The membership of the steering committee was fixed by agreement of the whole committee at seven.

Senator Cools: And of that number, how many are senators?

Senator Pearson: Sometimes one and sometimes two.

Hiring of Researcher for Special Joint Committee-Request for Particulars of Qualifications-Question to Joint Chairman

Hon. Anne C. Cools: Honourable senators, it is quite extraordinary. Yesterday, at a committee meeting, the committee was informed that an additional researcher had already been hired at a pay rate of $550 per day for a term of 90 days. My further question to the Joint Chairman of that committee is: What was the selection process that was used to hire this person? How many candidates were considered for the position? Why was the curriculum vitae of this individual not circulated to committee members? Last but not least, what are the credentials and the qualifications of this individual?

Hon. Landon Pearson: Honourable senators, that is a fairly extensive question which I cannot answer at this time. I would need to write down the particulars of it. The joint chairmen were given authority by the committee as a whole to hire the necessary staff.

Delayed Answers to Oral Questions

Hon. Sharon Carstairs (Deputy Leader of the Government): Honourable senators, I have a response to a question raised in the Senate on February 10, 1998, by the Honourable Senator Marjory LeBreton, regarding the possible postponement of income tax deadline dates for victims of the ice storm, and I have a response to a question raised in the Senate on February 12, 1998, by the Honourable Senator Mira Spivak, regarding the razing of abandoned grain elevators on the Prairies.

Revenue Canada

Possible Postponement of Income Tax Deadline Dates for Victims of Ice Storm-Government Position

(Response to question raised by Hon. Marjory LeBreton on February 10, 1998)

The Government is very conscious of the numerous financial burdens the ice storm has created.

I would like to reaffirm the Government's commitment to assisting Canadians in areas most affected by the ice storm by advising that special consideration will be given to obligations resulting from quarterly and monthly instalments, GST and payroll remittances and other delays in meeting tax owing as a result of the ice storm.In fact, the Minister of National Revenue issued a news release to this effect on February 18, 1998. This News Release has been tabled in the Senate.
Although it has not been possible for the Department of National Revenue to stop the calculation of interest for clients in the most affected areas, the Minister has invited anyone who receives a statement or notice in the mail that includes an interest charge to contact their local Revenue Canada office, or the Department's toll-free ice storm information line. The Department is committed to reviewing each request and, where appropriate, making any necessary adjustments.
The Government is pleased to offer measures to help those most affected by the ice storm to get back on their feet.

Agriculture

Razing of Abandoned Grain Elevators on Prairies-Loss of Storage Capacity-Effect on Rural Municipalities-Government Position

(Response to question raised by Hon. Mira Spivak on February 12, 1998)

The federal government appreciates the frustration that many producers are feeling with respect to the consolidation of the grain handling system on the prairies. It is important to note, however, that the decision to build and/or consolidate the grain elevator system in Canada is not taken by any level of government but by the companies in question. Consolidation has been occurring in response to market demands to find more efficient and cost-effective means to move prairie grain to the customer. In addition to the larger high throughput elevators being built and planned by the various grain companies, producers have also been joining together to build their own high throughput facilities throughout Saskatchewan. However, expropriation of private property, as suggested by some, is most likely not the most effective way to deal with this issue.
This being said, one way to help address rural depopulation is to create an economic environment where value-added initiatives can be initiated which generates new employment for our young people. The economic impact of value-added facilities can offset the loss of the infrastructure in the grain handling system. A more efficient grain handling system is also an important component in providing farmers with the necessary resources to pursue value-added activities to strengthen our rural communities.
The federal government is aware of the social and economic concerns of rural Canadians and will continue to work with them and other rural stakeholders to address these concerns.

Answers to Order Paper Questions Tabled

Energy-Canada Ports Corporation-Conformity with Alternative Fuels Act

Hon. Sharon Carstairs (Deputy Leader of the Government) tabled the answer to Question No. 8 on the Order Paper-by Senator Kenny.

Energy-Marine Atlantic Inc-Conformity with Alternative Fuels Act

Hon. Sharon Carstairs (Deputy Leader of the Government) tabled the answer to Question No. 29 on the Order Paper-by Senator Kenny.

Energy-Montreal Port Corporation-Conformity with Alternative Fuels Act

Hon. Sharon Carstairs (Deputy Leader of the Government) tabled the answer to Question No. 30 on the Order Paper-by Senator Kenny.

Canada Pension Plan Investment Board Bill

Question of Privilege-Speaker's Ruling

The Hon. the Speaker: Honourable senators, before I call for Orders of the Day, I wish to proceed with a Speaker's ruling that has been in abeyance for some time. There are copies available. I would ask the Pages to distribute them to all honourable senators.

On Thursday, December 17, Senator Tkachuk and then Senator Kinsella claimed that a breach of privilege had occurred as a result of the premature release of certain information related to Bill C-2, an Act to establish the Canada Pension Plan Investment Board, while it was still before the Senate. As I indicated at the time, because both questions of privilege dealt with the same question, I decided to consider them together.

Speaking first, Senator Tkachuk said that the government had shown contempt for Parliament in general, and the Senate and its members in particular, by making available on its web site CPP premium deduction tables as recently as December 10, prior to the passage of Bill C-2. This occurred despite the fact that Senator Tkachuk had received a declaration from the government, in the form of a delayed response on December 4, that it did not intend to release such information until the Senate had completed its consideration of the bill.

[Translation]

Honourable senators, in making his case, Senator Tkachuk acknowledged the likelihood that the release of this material was inadvertent. Nonetheless, he argued that it constituted a serious question of privilege. He cited several parliamentary authorities and some rulings of the Speaker of the "other place" in justification of his position. At the core of Senator Tkachuk's argument is the claim that

...being deliberately misled by the Government of Canada in relation to a bill which we are in the process of debating is an interference with my parliamentary duties and fundamentally and detrimentally affects my rights and the rights of all senators to discharge our duties as members of the Senate.

Taking a similar position and quoting from like passages from relevant parliamentary sources and Speakers' decisions, Senator Kinsella claimed that by publishing the document before the enactment of Bill C-2, the government had pre-judged the work of the Senate and of its committees. In his view, this constituted a very serious contempt of the Senate and of the Parliament of Canada.

Following the statement of Senator Tkachuk, Senator Carstairs stated that neither the Department of Finance nor Revenue Canada had actually published or distributed, in printed form, the revised payroll deduction formulas. The senator noted, however, that the formulas had been available briefly on the Revenue Canada internet site. According to her, this was a mistake, and there was no intent to make it public. Revenue Canada, she said, had corrected the error and had apologized. As to some of the material which is still to be found on the site, Senator Carstairs explained that it now carries a disclaimer to the effect that the proposed changes will become law only if passed by Parliament. Senator Carstairs then tabled a letter from an official of Revenue Canada containing the text of the disclaimer.

[English]

(1510)

In a second intervention, following the statement of Senator Kinsella, Senator Carstairs added that the draft formulae were prepared under the authority of the Minister of National Revenue in preparation for the possible passage of Bill C-2. She reiterated her position that the hard copy distribution of the information would have been inappropriate before the bill was enacted. Senator Carstairs also accepted the position that the information should not have appeared on the Internet without the disclaimer which was subsequently attached.

At this point, Senator Taylor joined in with some comments. While recognizing that it is annoying to be taken for granted, he asked what genuine remedy might be available in this case. Citing article 47 of our rules, he suggested that it would be futile to raise this issue as a question of privilege unless the Senate has the power to provide a remedy. Reading some citations from Beauchesne, he then raised the notion of intent; that is, whether the actions of the government in this instance were deliberately untrue and improper.

[Translation]

The arguments then turned to the question of whether the material on the Internet site constituted a publication. Senator Tkachuk certainly thought it did. So did Senator Lynch-Staunton. As to the disclaimer, the Leader of the Opposition explained that it, and I quote:

...came in a hurry after they were found to be not only irregularly and prematurely published, but in contempt of Parliament.

This action, he maintained, affected the rights and privileges of all senators and members of the House. According to him, and I quote:

This information or any information should not appear and be distributed, even if it is regarded as instructions, before any bill is given Royal Assent.

[English]

I wish to thank all honourable senators for their participation in this debate. It certainly gave me much to think about during the adjournment.

First, I want to make it clear that even though notices of these questions of privilege were provided on December 11, and the arguments were not presented before December 17, the Senate did agree to postpone them for several days. Therefore, I will not be assessing the questions of privilege with respect to whether or not they were raised at the first opportunity, as is required under rule 43. I will take it as given that they were raised at the first opportunity.

As well, these questions of privilege are not affected in any way by the fact that Bill C-2 was passed by the Senate unamended on December 18, 1997 and enacted the same day. To my mind, these subsequent actions do not mitigate in any way the claims made by Senator Tkachuk and Senator Kinsella. In making my decision, I confined myself to the arguments that were presented and to the circumstances then prevailing with respect to the Senate's consideration of Bill C-2.

My role as Speaker is to determine whether there is sufficient evidence prima facie to permit a motion to be presented immediately for debate to refer the matter to the Standing Committee on Privileges, Standing Rules and Orders.

In this case, the action complained of - the premature release on the Internet site of CPP withholding tables - is in the nature of a contempt rather than any violation of parliamentary privilege such as freedom of speech or freedom from arrest or molestation. While contempt is not as precisely defined as privilege, it is a serious matter when it occurs because it can infringe the authority of Parliament or the rights of parliamentarians to carry out their duties. Certainly this is what is alleged in the complaint raised by Senator Tkachuk and Senator Kinsella.

[Translation]

With respect to the question whether these payroll deduction tables were a publication when they were available only on an Internet site, I think the answer is clear: It is a publication. Even though it was true that the material was not published in printed form, it is impossible to disregard the impact of computer technology which allows information to be available far and wide. There is no option but to accept the proposition that by putting the payroll deduction tables on a publicly accessible Internet site, they were to all intents and purposes published and distributed.

[English]

Of greater importance or significance than the matter of the publication of this information is the question that Senator Taylor raised with respect to intent. In order for the Speaker to rule that a prima facie case has been made in this particular instance, I need to be reasonably satisfied that there was a deliberate attempt on the part of Revenue Canada to show disrespect to Parliament and the Senate when this document was loaded on to the Internet. There must also be some evidence that this action was undertaken with the purpose of deceiving or misleading the Senate as it deliberated on Bill C-2. In addition, there must be some indication as to how this action interfered with the work of senators. On each of these points, I do not believe that a sufficient case has been made.

In presenting his arguments, Senator Tkachuk twice acknowledged that the premature release of the CPP premium declaration tables was probably inadvertent. More to the point, perhaps, Revenue Canada recognized its error and, based on the letter tabled by the Deputy Leader of the Government, took some steps to rectify it. In a letter stamped December 16, Mr. Burpee, an assistant deputy minister of Revenue Canada, explained why the tables were prepared in advance. He also noted that a "disclaimer" had subsequently been attached to the 1998 tables stating that the bill was currently before the Senate and will become law if it is passed. Such evidence does not suggest that there was any deliberate attempt on the part of the department to deceive Parliament or to prevent it from doing its work. Indeed, had the Senate decided to amend the bill in any relevant way, it would have been the task of Revenue Canada to adjust its tables as required.

That being said, I would remind honourable senators of the words spoken by Senator Carstairs, who told us that this episode was a mistake and that it should not have happened. It is a fact that laws cannot be enacted until they have passed both Houses. While departments of government have a legitimate duty to keep citizens informed about changes to the law, that duty should never conflict or appear to conflict with the pre-eminent constitutional responsibilities of Parliament. In seeking to advise our fellow citizens of proposals to amend the law, government officials should never forget this basic fact. It is all the more objectionable in this case because Revenue Canada had confirmed in writing that it would not make any information available until the bill had become law. While I am prepared to accept that no contempt appears to have been committed, I find the actions of the department inexcusable.

Nevertheless, based on the representations made to me on December 17, I do not find that a sufficient prima facie case has been made.

[Translation]

Hon. Marcel Prud'homme: Honourable senators, I would like to raise a point of order. I think this is the appropriate time.

The Hon. the Speaker: The Speaker's decisions may not be appealed.

Senator Prud'homme: No, I would never invoke a point of order regarding the Speaker's decision.

The Hon. the Speaker: You may appeal, but the decisions are not subject to discussion.

[English]

Senator Prud'homme: Honourable senators, this may be a very small point, but it is very important. Canadians hear repeatedly "members of the House of Commons" and "members of the Senate." Even in our deliberations today I heard someone say, "It was attended by members of Parliament and two or three senators." I have always objected to that. Parliament comprises the House of Commons and the Senate. We are all members of Parliament.

(1520)

The press keeps repeating what sometimes we ourselves say: That there are two groups to consider here, members of Parliament and senators.

I remember a travelling delegation composed of ten members of Parliament and three senators. That was not right. There should always be so many members from the House of Commons and so many members of the Senate. Otherwise we are shooting ourselves in the foot, because people will make the wrong interpretation of what Parliament is all about. I make that point so that we do not join that attendance club or the delegation club. I object. I am a member of Parliament, and I am proud to be in the Senate.

Hon. Senators: Hear, hear!

ORDERS OF THE DAY

Canadian Wheat Board Act

Bill to Amend-Second Reading-Debate Continued

On the Order:

Resuming debate on the motion of the Honourable Senator Taylor, seconded by the Honourable Senator Pépin, for the second reading of Bill C-4, to amend the Canadian Wheat Board Act and to make consequential amendments to other Acts.

Hon. Leonard J. Gustafson: Honourable senators, I am pleased to speak on this bill, not because there is so much controversy about it but because it is a very important bill in Western Canada, especially in the Prairie provinces and a small part of western Ontario.

As honourable senators know, agriculture has been a very important part of the strength of this country, and it is most important that we do not see the pillars of agriculture breaking down. It was Sir Leonard Tilley who said: "Destroy the farm, and grass will grow in the streets of every city in the nation." In the past few years, many important agricultural decisions have been made that are breaking down agriculture. There are many areas that require change.

I have not seen so much controversy over a bill as has been generated by this bill since the debate on the so-called "Crow rate." That was the longest debate in the House of Commons, with the exception of a fisheries debate in 1918.

Why all the controversy about this bill? First, we must look at what is happening in agriculture. I will give you a couple of examples. In 1972, a barrel of oil was worth $2; today, the price has gone up to $16, although that price has deflated somewhat in the past few months. In contrast, in 1972 a bushel of wheat was $2; today, a bushel of wheat is not even $3. If farmers were getting $16 a bushel, they could pay for their tractors at $200,000 a tractor; they could even pay for their combines at $200,000 a combine. Somehow, the ground has shifted.

The question is this: Where are we, as Canadians, responsible for what is happening to agriculture in this country?

I attended a very interesting, informal dinner with Alvin Hamilton, who has been a great supporter of agriculture for years. He had a guest with him at a round table in the Centre Block, a doctor from Austria. The question of subsidies arose. The doctor said, "You Americans" - he called us Americans - "do not understand food and hunger." He said, "I have seen hunger three times in my lifetime, and you take food for granted." Perhaps we are taking food for granted.

Looking at the international situation, we might ask ourselves: Do we, as a producing country, have a responsibility to the rest of the world? I happen to think we do. I follow very closely the work of the Canadian Food Grains Bank which does an excellent job of getting grain to countries in need around the world. It is a great program - one of the best. A farmer gives a bushel of wheat and the government meets it two to one. We have a responsibility to the farmers in those countries, and we have a responsibility to agriculture.

Why all the controversy? With respect to the Crow debate and the trade debate, the whole face of agriculture in Western Canada has changed. We are now talking about a third of the cost of a bushel of wheat to pay the freight rates to transport the bushel to Vancouver or Thunder Bay. That is a tremendous increase.

What is happening on the Prairies? The feed industry is changing. Provincial governments have major problems with roads, with highways, with transportation, and have not met those challenges.

Some senators will remember the name Charlie Mayer. I do not wish to be too political, but Charlie Mayer said it would take $7.6 billion to implement the transition in freight rates for the farmers and the municipalities. What did we get? We got $1.6 billion. This transition has created many problems and many frustrations. One of the reasons is that grain prices, particularly wheat prices, are low because of increased freight rates. Because of the freight rates, it was decided that we must feed more hogs, more chickens and more cattle on the Prairies.

You may be familiar with the situation in Brandon. Maple Leaf Foods is moving a plant to Brandon. I understand that within a few miles of Brandon are some 15 major hog productions. These are major changes - and quick changes.

Iowa beef producers bought out Lakeside. They were producing 40,000 head of cattle, and they are now feeding 80,000 head. Cattle are now coming into Canada from the U.S. to be fed in Lethbridge feedlots because of the feed situation and the changing rates. There is major change out there.

I could say more about the cost of production. I phoned Weyburn, Saskatchewan, on the weekend when I was home to get a hub for a disker. That repair cost me $400. I asked what it would cost if I got the hub and the axle, a small part. The axle is $812 and the hub is $400. It would take a 300-bushel truckload of wheat to buy a little hub for my disker. What do you do in that situation? You try to find one on an old machine somewhere, just to keep your machine going, because it makes no sense to give away a truckload of wheat for one little repair if you can possibly fix it some other way.

Why all the controversy about a bill like this? Well, a bill like this is very important.

(1530)

I wish to address some of the issues in the bill that are of great concern to farmers. First, it changes the Wheat Board from a Crown corporation to a corporation. I do not see any big problem with that. There is some importance in changing it to a corporation to deal with the international trading situation that we face, and possibly we can even gain better cooperation from our American neighbours in this situation.

Some groups are very much opposed to this change. They say, "You are breaking down the Canadian Wheat Board." People are on both sides of the fence with regard to this bill, and no one is supporting it wholeheartedly. Many are against it for different reasons - not only farmers but also organized farm groups. The coalition against Bill C-4, made up of 13 different groups, is very much opposed to the inclusion clause.

Exactly what is the inclusion clause? The inclusion clause would mean that the Canadian Wheat Board, given a vote by farmers, would have the right to include all other grains, except the ones that are now included, namely, wheat, barley and durum wheat. In recent years, farmers have been depending on specialty crops - in particular, oil-seeds such as canola, canary seed, flax, lentils, and other crops - because they have been good cash crops. Prices are good for these specialty crops. Today, canola is worth $9 a bushel. You can make it on $9 canola, but you cannot make it on $3 wheat.

Many of the farmers are nervous that somehow the Wheat Board may not be able to get the prices they have been getting from selling directly into the United States or to other companies that are exporting to Japan, or wherever. You can understand why there is that nervousness. I personally have some trouble with it. I think that inclusion clause is a serious matter.

Some will say that the inclusion balances things, that you have an exclusion clause and an inclusion clause, and you have a vote by the farmers. What about that vote? How is the question worded? Who gets to vote? Is it only those who have produced, for example, canola for the last five years, or does everyone get a vote?

The inclusion and exclusion clause has become a subject of great concern. This one issue is probably more cause for concern than any other problems people are having with the bill.

In fairness, at the last minute, the minister introduced an amendment that may give some clarification to this whole situation. That might be something that the Senate committee could consider. I would favour that, but some thought must be given to the inclusion factor.

Honourable senators, there is also the cash buy-back issue. I will try to explain it to you, but I am not sure I fully understand it. The Wheat Board can buy 25,000 bushels of grain from a farmer and sell it to a pasta plant that might be built, for example, in Crosby, North Dakota. Canadian farmers are looking at building one there and in Swift Current. They could do an individual buy-out. Many people are opposed to that. Why? They say that it breaks down the pooling and that it is just the beginning of dual marketing.

Again, we are facing a world that is changing. We have a global economy and that raises the whole question of other marketing boards. In Saskatchewan, for example, the chicken industry has less than 3 per cent of the quota for Canada. In fact, it is quite a bit less. We have all this feed because of freight rates. How do you feed it to chickens for which you have no quota nor access to a global market? It is impossible. There must be changes.

The Government of Saskatchewan is considering voting - and I got this right from the minister's office - on whether or not they would opt out. Apparently, any province can opt in or out of the marketing board. Saskatchewan might opt out in order to have more opportunity to access the global market. That makes sense. You cannot raise only the amount of chickens that the people of Saskatchewan can eat. There are only approximately 900,000 of us.

The point I am making is that it is a changing world out there and some changes must occur. In all fairness, I believe that the minister has tried to meet some of these concerns, but no one is happy with what is happening, whether they are on the left or on the right side of the issue. So much for the cash buy-back.

Many are concerned about the pools breaking down, particularly the advisory committee to the Canadian Wheat Board. They say that if you start to exempt some group or an amount of grain from the pooling, the system begins to break down. On the other hand, it is important that there be some flexibility. As I mentioned earlier, farmers in our area want to build a plant in Crosby, North Dakota so they can access that strong pasta market. I suppose that the Wheat Board looks at it and says, "We must have a way to make this work."

Let me give you an example of what happens in reality. We got hailed out on our farm, so we do not have any durum wheat for seed. I phoned the Canadian Wheat Board and asked them if I could buy seed from them, out of the elevator at Macoun or Estevan, and what the cost would be. We were looking at No. 2 durum with no protein. You do not need particularly high protein to get good germination. It was selling in the Pioneer elevator in Estevan for $4.71 a bushel. The Canadian Wheat Board wanted me to buy that back at $7.17 a bushel. On top of that, I would have to clean it, which costs 30 cents a bushel. I would have to clean 15 per cent of it, at least, to get clean seed. I might as well go to the certified seed people and give them $9 a bushel for seed. It works out to the same thing.

These are the types of problems we are facing. Farmers trying to set up processing in different areas face a real problem when it comes to buying back from the Canadian Wheat Board because they cannot even process their own crops. That raises the whole subject of a monopoly. Is the monopoly so powerful that it is preventing farmers from expanding their own operations in a reasonable or sensible way? What we need is a serious debate and to look at this bill in a way that will begin to solve some of these problems. This is complicated legislation. It is not easy to obtain agreement from farmers on issues such as these.

(1540)

Many farmers are concerned about the issue of the contingency fund as outlined in Bill C-4. I do not wish to shock senators, but in the past, if there were losses in sales, the government has made up the difference. If there were gains, hopefully farmers received some benefit. There is some discrepancy about how great the losses were. In the Prairies this winter, we have heard figures of up to $20 billion, but the figure of $6 billion has been thrown around. Interest has been paid also on the grain that farmers have sold, which has been an advantage to the farmer.

There is the question, if we build up a contingency fund of farmer's money, what will be the limitations? Is the government being let off the hook on this issue? There are questions surrounding that whole subject of the contingency fund, and rightly so. Is the government saying it wishes to be let off the hook? Some would say, yes. Others would say the government has a responsibility to agriculture and to maintaining a strong agricultural base.

Some people say that the role of the Auditor General should be amended in such a way that the Wheat Board operations could be audited yearly. The Auditor General has been calling for this change for years, and it has not happened. This subject is also ignored in the proposed legislation.

One other area that is of real concern to farmers is the board of directors. The bill indicates that there would be 15 people on the board of directors; ten would be elected farmers and four of them, including the chairperson, would be appointed by the minister. There is some concern about this composition.

The advisory board, in particular, and farm groups are asking for farmers to have the right to elect their own chairperson. On the other hand, if the government intends to continue to fund sales and so on, there should be some responsibility to the government. I can see both sides of the issue there.

Another concern relates to the powers of the board. What are the powers of the board? Some powers are laid out in the bill, and other areas relating to the powers of the board are unclear, especially those relating to who hires and fires the people in charge of handling international marketing for the Canadian Wheat Board.

Honourable senators, the steering committee has indicated that we wish to travel to hear from not only farm groups but individual farmers, particularly farmers from the Prairies. It has been suggested that the committee visit Winnipeg, Regina, Saskatoon and Edmonton or Red Deer. We need to hear from the farmers as to what their concerns are. This is an important bill. We must have a bill that will address the needs of farmers and the changing situation of the industry.

I did want to mention the issue of trade. About two months ago, President Clinton mentioned the fast track on trade. We brought to the committee some of our trade experts in order to better understand what this meant. Though we are still unclear about the facts, the President of the United States made some very strong statements about agriculture in Canada. Therefore, it is most important that this bill address the trade situation and its many facets.

Honourable senators, we have a good committee. I believe senators from both sides of the house have significant experience in agriculture. I hope that this bill can be improved with amendments in order that it may work to the benefit of all agriculture in Canada.

Hon. Herbert O. Sparrrow: Honourable senators, I have two questions. The Honourable Senator Gustafson mentioned the subject of buying and selling durum wheat. He indicated that a bushel was sold for $4 and some cents and resold at $7. The initial selling price was $4; is that correct? The wheat was being sold back at a price which, it was assumed, could be met. It was not really the 100-per-cent mark-up that the senator was speaking about; is that correct?

Senator Berntson: Plus elevator costs.

Senator Gustafson: That is right, Honourable Senator Sparrow.

Honourable senators would understand that an initial price and an interim price is paid to the farmer. Farmers might hope to receive $6. There are other handling charges that come off that figure that would make up for the price of $7.17.

Senator Sparrow: I thank the honourable senator for his assistance. I wish to make it clear that the Wheat Board was not charging undue mark-ups on the product. The producer would have shared in the $7 in the final payment received. That is what the honourable senator is telling me.

I am not trying to pin the senator down to specifics, as neither he nor I have had the opportunity to review or study the bill. However, under the subject of auditing, it was mentioned that the Wheat Board was being changed from a Crown corporation to a private corporation. Perhaps the honourable senator could explain this.

It is my understanding that as a Crown corporation, the Auditor General would and should have the power to audit the books of the Wheat Board. If the Wheat Board becomes a private corporation, the Auditor General would not have the power to audit. I understand that someone in the department, the minister or otherwise, stated that if the Wheat Board wants the Auditor General to audit their books, they can ask him. That is not the solution, of course. As a private corporation, would the Auditor General have the power to audit?

Senator Gustafson: My understanding is that the Auditor General would not have the power to audit unless an amendment was made to the legislation. I could be wrong.

Going back to the honourable senator's first question, we will not know precisely how much it cost until we get the final payment on durum wheat. There is probably a difference of $1.25 more a bushel that would be paid to buy seed back.

Senator Sparrow: That would be just the administration costs of handling, would it not? Therefore, this is not an unreasonable figure; is that correct?

(1550)

Senator Gustafson: I made an inquiry into Crosby, North Dakota, and the grain handling charges there. The charge at the elevator in Macoun, Saskatchewan, where I live, is 22 cents a bushel. That has nothing to do with the transportation. In Crosby, North Dakota, it is 7 cents a bushel; 22 cents compared to 7 cents.

Quite frankly, if anyone wins in this legislation, it will probably be the grain companies, in my opinion.

Senator Sparrow: What else is new?

Senator Gustafson: The honourable senator has answered his own question. Certainly, I think the grain companies are the big winners in this bill.

While I am on my feet, I wish to mention one other thing that is changing the whole grain industry. I recently attended the opening of a new plant. ConAgra has built an elevator at Corinne, Saskatchewan, that can load 45,000 bushels an hour. That is eight cars. That allows them to load a unit train of 100 cars in eight hours. One of the bins alone, and there are several of them, holds 45,000 bushels. ConAgra is building a plant like that in Yorkton, south of Regina, and another one in the northern area of Dafoe, somewhere around there.

I offer that in order to say this: The grain industry is changing and changing quickly. Grain transportation and freight rates will undergo change. This, in turn, will put a great deal of pressure on roads, and that must be dealt with one way or another.

Hon. Mira Spivak: Honourable senators, I am pleased to take part in the debate on Bill C-4. Coming from Manitoba, I am aware of just how important the Canadian Wheat Board has been and continues to be to Manitoba and across the Prairies. Grain farmers today are concerned about the Wheat Board in a way that they care about very few things beyond the farm gate. Few things have so much power to affect their livelihoods and, indirectly, the lives of hundreds of thousands of Western Canadians, except perhaps the weather and the railways.

Today, there are some 130,000 families in Western Canada who will be affected by what we do with this bill. There are some 2,000 agri-businesses, members of the Canadian Federation of Independent Business in Alberta, Saskatchewan, and Manitoba alone, who are most concerned about this legislation. There are more than 100,000 member owners of Prairie Pools Inc., Western Canada's largest grain handling company that owns elevators and terminals from Thunder Bay to Vancouver. Everyone wants to see that we get these reforms right, but there is still huge disagreement about what is right.

As both Senator Gustafson and Senator Taylor reminded us, by conducting $6 billion worth of business each year, the Canadian Wheat Board is one of Canada's foremost earners of foreign exchange. The Wheat Board is important to the Canadian economy and Canadians who live far from the prairie bread basket of the world. It is also important to the people of some 70 countries that rely on Canadian wheat and barley. We must keep all this in mind as we consider Bill C-4.

To most Western Canadians, the Wheat Board is a long-standing institution. The institution was created by Parliament in 1935 and, like any other institution, from time to time it must be reformed, in this case to serve today's farmers in today's market, not those that existed decades earlier. Senator Gustafson outlined that for us very clearly.

In its early years, the Wheat Board was a voluntary pooling agency for wheat. When the government closed the open-market trading in 1943, Canada was at war and facing wartime price controls. A few years later, the government extended the Wheat Board's authority to barley. From that time on, the strength-in-numbers approach to marketing that the Wheat Board epitomizes has been debated vigorously. The debate is not likely to end with this bill.

Wheat Board supporters cite good evidence that this strength-in-numbers approach collectively puts millions of dollars more into farmers' pockets than they could realize under an open market system. One long-term economic study - I think it is Kraft's study - estimates annual benefits ranging from $265 million to $800 million. That study, I believe, had complete access to all of the financial information of the Wheat Board.

In his book Merchants of Grain, Dan Morgan described the Canadian Wheat Board as the world's "most powerful and prestigious marketing board." From the detractors come accusations of high costs, too little accountability to farmers and the general argument, with which obviously I do not agree, that the Wheat Board's monopoly runs roughshod over the rights and freedoms of individual farmers. I guess unlike private corporations.

In the 1940s and the 1950s, there were thundering attacks on the board from American private grain companies. In the 1960s, some U.S. senators portrayed our wheat sales to the Soviet Union as an example of Canada consorting with the enemy and delivering direct blows to U.S. foreign policy.

For much of this decade, the attack on the board has come from a minority of the Canadian farmers who believe that they can do better without it, and from industry interests who want a North American open wheat market. Two years ago, at a convention of the National Wheat Growers, the U.S. industry announced its support for Canadian farmers who are trying to end the board's monopoly on wheat sales. They want our marketing system to more closely approximate theirs. It is a particularly American thing, they want the same thing in culture. Certainly, it is in the interests of large American food companies to gain direct access to Canadian wheat in expectation of reducing prices over the long haul.

Canadian groups, including the National Citizens Coalition, have leapt into the fray, supporting some 100 farmers across Western Canada who have been charged for hauling wheat to the U.S. without export permits. Just last week, in Winnipeg, a Manitoba Court of Queen's Bench judge handed down his decision in the case of one of them: a Saskatchewan farmer who was challenging the board's monopoly as unconstitutional. The court ruled that the act, which Bill C-4 would amend, falls within the federal government's constitutional powers to regulate trade and commerce. The Saskatchewan farmer, Dave Bryan, was fined $9,000 and given a two-year suspended sentence. Mr. Bryan has said he will appeal, and no doubt the case will make its way to the Supreme Court.

The point is that the operations of the Canadian Wheat Board are controversial. They have always been controversial and they will very likely always be controversial. So too are the amendments found in Bill C-4.

I wish to commend Senator Taylor for clearly setting out the main elements of reform that the government is proposing. I will not reiterate all of them. As he said, the government, in proposing to replace government-appointed commissioners with a 15-member board of directors, is trying to give grain producers a greater voice in the operations of the board. Ten of those directors will be elected by producers; five of those directors and the president-CEO of the board will be appointed by the government. Certainly this is a step towards a more democratic board with greater accountability to farmers. Whether this is the right formula, whether it goes far enough, whether the means by which it would be executed are the best means, these are legitimate areas of disagreement and I look forward to the committee's discussions on these areas.

(1600)

The board of directors will have access to all the Wheat Board's sales data and financial information, and it will be up to the directors to determine what information is released to permit book holders. This may be a step towards greater disclosure of the board's activities. That remains to be seen, and the point about the Auditor General and the sort of corporation that this is to be is an area that we should discuss very carefully in our committee's deliberations. However, we should note that the obligation to disclose commercially sensitive information places the Wheat Board at a disadvantage when it negotiates contracts with international buyers. One should note as well that there are other government operations, such as the Export Development Corporation - which is also an international trading agency - that are not subject to the Access to Information Act.

The board would also be given new flexibility tools: the ability to make cash purchases, as Senator Gustafson said, of wheat or barley, to adjust initial payments quickly, and to allow individual producers to cash out of a marketing pool early. To insure against losses from these decisions, the bill proposes that a contingency fund be established quite apart from the government's guarantees of initial payments, credit sales and general borrowing. Many are unhappy with that proposal. Producers know they already pay a steep price for the board's decisions and operations; more than $42 million, according to audited figures for the 1995-96 crop year. They do not need more check-offs. If the government adamantly refuses to support the contingency fund, they want a cap on the amount that can be taken from farmers to insure against bad decisions and losses.

The contingency fund remains controversial, as does the government's more limited guarantees, and I can understand why. It seems very strange that the federal government can provide billions in shaky loans to build a CANDU reactor in China, and nothing at all for a Wheat Board contingency fund.

Perhaps most controversial of all in these proposed reforms are the inclusion and exclusion clauses. On the one hand, some predict that the inclusion clause will permit a power grab. Marketing of canola, oats, flax, and rye could, in theory, come under monopoly control. One consequence of that could be a NAFTA Chapter 11 challenge by foreign investors. On the other hand, there is fear that the exclusion clause could lead to the slow dismantling of the board. The scenarios are both woolly and wild.

My own feeling on this issue is that I really do not know on which side to come down because we have not heard all the arguments, but I do know the organic growers of farm products are anxious to be included - and perhaps that is the one good thing about this particular proposal.

I am well aware that these proposed reforms are the result of almost three years of intense consultations and debate. The former Minister of Agriculture, Ralph Goodale, began the process in July, 1995, when he appointed the Western Grain Marketing Panel. Since then, public hearings have been held, the panel has released its report, and the government introduced Bill C-72, which was subjected to more public meetings by the Commons committee and amendment. Then we saw Bill C-4 and the hearings on it in the other place.

Many are looking to the Senate to amend this bill, and from entirely contradictory positions. The collective experience and wisdom in this chamber, particularly among my colleagues on the Agriculture Committee, should be applied to Bill C-4. We need to hear the arguments to ensure that there will be no unforeseen consequences of this bill, and to heed recommendations for its improvement. We need to do a thorough safety check before this bill is allowed on the road.

Frankly, given the immense importance of this legislation to the people of the Prairies, to the Canadian economy, and to those around the world who rely on our grains, we would be negligent if we did anything less.

On motion of Senator Berntson, debate adjourned.

Telecommunications Act
Teleglobe Canada Reorganization and Divestiture Act

Bill to Amend-Second Reading

On the Order:

Resuming debate on the motion of the Honourable Senator Poulin, seconded by the Honourable Senator Losier-Cool, for the second reading of Bill C-17, to amend the Telecommunications Act and the Teleglobe Canada Reorganization and Divestiture Act.

Hon. Donald H. Oliver: Honourable senators, the United Nations has declared on more than one occasion that Canada is the best country in the world in which to live. I will be proud when the declaration is that Canada is the best country in the world in which to do business.

Major hurdles to such a designation are excessive taxation and an overbearing regulatory burden that stifles competition and muffles the attainment of all the benefits flowing from an open and free market-place. In the financial services sector, for instance, there is no good reason to regulate banks from selling insurance in their branch offices, or insurance companies from taking deposits, and there are strong arguments to allow them to compete in the monopolistic auto leasing business so that they could help bring down these costs to consumers. Our ability to accumulate wealth is also seriously hampered by regulations restricting foreign investment, which only serves to raise the cost of capital.

The same is true for telecommunications. Canada has built one of the finest telecommunications networks in the world. We want to be the first in developing a digital economy, and we want to be a world leader in knowledge-based undertakings, but this industry is hamstrung by regulation.

The doctrine of forbearance - that is, forbearance from regulation - and opening the market-place to real competition should be the intrinsic design of all telecommunications legislation.

We have before us Bill C-17, an Act to amend the Telecommunications Act and the Teleglobe Canada Reorganization and Divestiture Act, the essence of which is designed to give the Canada Radio-television and Telecommunications Commission, or CRTC, the power to manage competition through a new, overpowering licensing regime. I submit that there is no evil to be slain, and if there were, there are ample safeguards in the Competition Act or in the CRTC's current regulatory tool kit, such as decisions, tariffs and orders.

Bill C-17 represents the Government of Canada's response to the Agreement on Basic Telecommunications, which was set up under the rubric of the General Agreement on Trade in Services, GATS, and was ratified by 69 countries of the World Trade Organization, WTO, in April of this year. For all intents and purposes, this agreement covers more than 90 per cent of the world's telecommunications market, estimated at $880 billion in 1996.

While Bill C-17 involves primarily powers conferred on the CRTC, it also embodies measures relating to the Government of Canada's decision to open local telephone markets to competition.

Needless to say, both the signing of the GATS and the decision to have the CRTC forbear some of its regulatory powers, which extends competition from the long-distance market to the local and international markets, are bold new steps - steps, I must emphasize, along a path that began with the previous government's decisions to open up to competition the local wired market from wireless operators and the long-distance market from facilities-based operators and resellers. As a result, today more than 6 million Canadians subscribe to wireless telephone services. Consumers also enjoy the choice between dozens of long distance companies, such as Sprint Canada, AT&T Canada, Fonorola, ACC and others, that have successfully carved out a market share approximating 40 per cent of the national long-distance market that was once entirely controlled by the Stentor companies.

Moreover, competition in the long-distance market has appeared much faster, and over a relatively broader clientele base, in Canada than in almost any other country in the world. In fact, this market share capture by competitors was achieved in just five years, twice as fast as it occurred in the United States.

All of these developments have, in part, become possible because of the revamping of the Railway Act and the introduction of the Telecommunications Act of 1993, which your committee on transport and communications studied, deliberated on and significantly modified at the Senate pre-study stage of that bill.

As chairman of the Senate committee at that time, I can assure you that all those drafting and influencing the contents of that act deliberately excluded the principle of licensing of international service providers and resellers. It was deemed simply unnecessary by both the House of Commons and the Senate committees - a common theme to which I will return.

(1610)

Bill C-17 contains 23 clauses consisting of five sections dealing with: one, a licensing regime for international service providers; two, liberalizing foreign ownership restrictions on submarine cable and satellite companies; three, telephone numbering administration by a third party; four, certification of telecommunications equipment; five, the removal of ownership restrictions on Teleglobe Canada Inc. to conform to all other telecommunications service providers operating in Canada.

Honourable senators, it is clauses 1, 3 and 7 that are troubling. These clauses would give the CRTC the authority to introduce a new licensing regime for international telecommunications service providers, including both vertically integrated infrastructure owners and resellers of these services. While the bill was significantly amended by the House of Commons Standing Committee on Industry to include only international service providers - initially the bill would have captured domestic service providers as well - the authority conferred to the CRTC remains too broad and too vague.

Industry Canada and the CRTC maintain that regulation by licensing is required to make sure that there is a level playing field among would-be international players. They argue that predatory pricing on the part of Canadian subsidiaries of foreign monopolies and the possibility of Canada-to-Canada bypass by way of the United States would pose problems.

Let us deal with the second assertion first. There are three possibilities here: First, the Canadian telecommunications infrastructure is more costly than the American infrastructure; second, it is equally costly or; third, it is less costly.

Bypassing the Canadian infrastructure only makes sense in the first case; it would be ludicrous to fear any possibility of Canada-to-Canada bypass in the second and third cases. Yet, Industry Canada and the CRTC know that the Stentor facilities are approximately 10 per cent more cost efficient than alternative American infrastructure. So Canada-to-Canada bypass is highly unlikely today, and would only be, at best, a remote possibility in the future - far too little an occurrence to worry about, and far too costly for government to monitor and enforce routing restrictions.

Of course, the best way for the government to eliminate the incentives for engaging in Canada-to-Canada bypass practices would be to enact legislation consistent with the provision of efficient telecommunications services, which means the adoption of the forbearance doctrine as established in the Telecommunications Act. Indeed, the contemplated licensing regime may, in fact, inhibit efficient international telecommunications as the uncertainty it imposes on potential investors may prove to be a significant barrier to entry. As a result, Bill C-17 makes Canada-to-Canada bypass far more likely, for it potentially neutralizes the disciplining effects of full and open competition.

As for predatory pricing problems that might arise in the future, it is also a remote possibility - a possibility that is becoming more remote all the time with the liberalization of international and domestic telecom markets across the world and the signing of the GATS. Put another way, there will simply be fewer and fewer foreign monopolies around to engage in predatory behaviour in the future, given the implementation of the GATS.

Indeed, the CRTC had to deal with one such case recently. Hong Kong Tel allegedly priced its services below Teleglobe prices in the B.C. market, targeting its ex-patriot clientele now living in the greater Vancouver area. In the end, the CRTC ordered BC Tel, the company leasing the Teleglobe line, to cut off Hong Kong Tel. I have with me today a copy of the decision of the CRTC. It is file number 96-2352 that so ordered such a disconnection. The point is that the CRTC already has the ability to stop predatory pricing.

The Government of Canada has other tools at its disposal for stopping this predatory practice. Predatory pricing is a criminal offence under the Competition Act. Other predatory activities are governed under the "Abuse of Dominance" provisions in the same act. These mechanisms have shown themselves to be adequate to govern the conduct of companies in unregulated markets. They are also all that is needed for Canada's international telecommunications market.

The Department of Industry and the CRTC point to other nations, like the United States and the European Community, that are implementing a licensing regime - if they have it, we should have it. But these countries do not have the existing regulatory framework to take care of these problems like Canada does, nor do they have telecommunications facilities that are as efficient as those in Canada. Their much larger market and relatively inefficient facilities make them ideal targets for predatory or bypass possibilities.

Furthermore, as Mr. Courtois of Bell Canada pointed out in his testimony at the House of Commons hearings:

...in the U.K., the licensing approach has created much delay and resulted in action because the licence conditions don't permit much flexibility. And in New Zealand's case, the licensing regime caused basic interconnection disputes to be considered in the courts - all the way up to the Judicial Committee of the Privy Council - for 10 years, only to result in the parties being sent back to the negotiating table.

Others, such as Call-Net Enterprises and AT&T Canada, argue that indirect regulation by way of the facility owners is inefficient, and that direct control over the alleged predator through licensing is preferable. Direct regulation offers the CRTC the possibility of intermediate types of solutions to these problems rather than being forced to adopt all-or-nothing propositions like cutting off Hong Kong Tel.

However, what is seldom told and often meant by these intermediate solutions is tariff regulation. In such a circumstance, the CRTC would have the power to set higher prices or tariff rates of any alleged offending party through the licence it holds. This power, I repeat, is contrary to the doctrine of forbearance - forbearance from regulation. It was contrary to the will of Parliament when, on the advice of both Houses of Parliament, it adopted Canada's Telecommunications Act. Indeed, I will quote from Mr. Nick Mulder of Stentor before the House of Commons committee reviewing Bill C-17. He said:

Although common across the globe, licensing has not to date been the Canadian way. Indeed, the original draft of the Telecommunications Act, as tabled in the House of Commons, envisaged a licensing regime. Wisely, in our view, these provisions were removed from the bill...the concept of licensing for international services has, since the successful WTO negotiations in Geneva, been considered desirable, though not in law essential, to bring the form of the Canadian regulatory regime into harmony with the majority of our major trading partners. The U.S., for example, licenses carriers for international services, though not for domestic services. However, it is, in our view, not essential to provide to the Telecommunications Act a complete overlay of licensing.

As the Canadian Bar Association also reminded the House of Commons committee studying the same bill:

The proposed licensing provisions originally introduced with Bill C-62 were removed... At that time...we did not consider it to be necessary and we were concerned it would impose an additional burden on everybody trying to do business in telecommunications in Canada. ... I am afraid we have the same concerns about the licensing provisions of Bill C-17 that is before you now. Licensing can be onerous and the introduction of this regime after the act has been in place for four years creates, in our view, a certain amount of uncertainty in the industry.

(1620)

What Bill C-17 proposes to do is to give the CRTC the power to manage competition through the licensing requirement. We cannot, therefore, expect open competition to rule in the international telecommunications markets, but managed competition. Managed competition is not open competition; they are fundamentally two different beasts.

Open competition promises efficient telecommunications services, better and more variety of services, commensurate prices and innovative technologies, products and services. Managed competition assures us of none of this.

As John Milton wrote in Tenure of Kings and Magistrates in 1649:

None can love freedom heartily, but good men; the rest love not freedom, but license.

What is the public policy justification for licensing international telecommunications providers? One can only come to the conclusion that there is none. International service providers are guaranteed "national treatment" and "most favoured nation," MFN, status under the GATS. That is enough for the market-place to naturally produce a so-called "level playing field." The Canadian Bar Association further submits:

While we recognize that a number of the provisions are required to give effect to Canada's specific commitments as part of the World Trade Organization's General Agreement on Trade in Services, we are concerned that a number of the provisions in the bill go beyond what is required. These provisions are open-ended and establish potentially onerous regulatory barriers and conditions...we question whether a licensing regime is truly required to give effect to the national treatment principle...

The level gridiron that I propose is not new. In fact, you observe its operation every day. It can be found in virtually all unregulated markets in the Canadian economy. This "level playing field" is premised on the concept of efficient provision of goods and services. Firm survival is, then, only assured when business plans are congruent with efficiency. Those firms that stray too far from this principle court corporate reorganization, bankruptcy and failure. Clearly, the margin of error is much tighter under an open competitive regime than that of managed competition through a licensing regime.

It is interesting to note that at the hearings held in the House of Commons Standing Committee on Industry, the sole telephone company proposing de novo entry into international telecommunications, GeoReach Telecommunications Inc., advocated absolutely no need for a licensing regime. Clearly, GeoReach has the most to lose from predatory pricing and yet it realizes and has criticized Bill C-17 as excessive and wasteful regulation, as follows:

GeoReach has not seen any evidence to suggest that the Commission's regulatory powers as they now exist are not sufficient for that purpose. For example, a number of Commission rulings that...impose various consumer and competitive safeguards on the incumbent service providers rely upon the enforcement provision currently enshrined in the Telecom Act. At the same time, the competitive marketplace continues to grow. In other words, the innovation, price reductions and consumer choice brought about by the introduction and subsequent evolution of competition under regulatory frameworks established by the Commission in various market segments to date is ample evidence of the sufficiency of the Commission's existing regulatory powers.

The incumbent telephone companies, on the other hand, seem to prefer the licensing option in the transition period from monopoly to competition, proposing a March 1, 2000 sunset clause. But this is better viewed as a compromise position. In any event, they, too, realize that licensing regimes tend to outlive their useful lives.

Bill C-17 raises other concerns as well. The bill pertains to basic telecommunications and provides a definition of a "telecommunications service provider," which includes services provided by exempt transmission apparatus. One would be quite correct to interpret the term "apparatus" to mean computers. Recognizing that the Telecommunications Act currently excludes computers from this definition, I must concur with the Canadian Association of Internet Providers, which maintains that there is the imminent danger of enormous regulatory expansion subtly hidden in Bill C-17.

The Internet and many computer-based communications networks must remain unregulated, for only the forbearance doctrine promises continuing communications innovation and improvements in Canada's equivalent to elsewhere in the world. A licensing regime can only mean retarded growth in computer network services in Canada relative to the rest of the world. This must not be allowed to happen.

In conclusion, Bill C-17 represents a huge detour along the liberalization path set out by Parliament when it adopted Canada's Telecommunications Act in response to the development and proliferation of digital transmissions technologies. The licensing of international telecommunications sought by the government represents excessive regulation. Indeed, regulation by licensing is best characterized as a solution looking for a problem.

Honourable senators, I hope that you will consider amendments to Bill C-17 that will remove the proposed licensing regime incorporated in clauses 1, 3 and 7 when the bill goes to committee. There, with detailed study of the subject-matter, one will immediately come to the conclusion that there is no public policy justification for the inclusion of a regulatory licensing regime in international telecommunications.

Honourable senators, our duty is clear. We must sever clauses 1, 3 and 7 from Bill C-17 so that the remainder of the bill can proceed quickly to Royal Assent.

Motion agreed to and bill read second time.

Referred to Committee

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

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

Aboriginal Governance

Consideration of Report of Aboriginal Peoples Committee Requesting Authorization to Travel and Engage Services-Debate Adjourned

The Senate proceeded to consideration of the second report of the Standing Senate Committee on Aboriginal Peoples (budget-study on Aboriginal governance), presented in the Senate on February 18, 1998.

Hon. Charlie Watt: Honourable senators, I move adoption of this report.

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

Hon. Noël A. Kinsella (Acting Deputy Leader of the Opposition): Honourable senators, could the honourable senator provide us with a brief outline of the objective for the study?

Senator Watt: Honourable senators, I will try to be helpful as to the magnitude of this study.

The Department of Indian Affairs has the responsibility for and acts as a trustee to aboriginal people. When I say "aboriginal people," I refer to status Indians who live on reserves. The minister has a responsibility to those people and for their lands.

When you take into account the other aboriginal peoples, namely, the Métis and the Inuit, they do not fall categorically under section 91.24 of the British North American Act.

(1630)

In 1982, during the period of the patriation of the Constitution, when Pierre Elliott Trudeau was still prime minister of this country, he provided some accommodation for aboriginal peoples - the Indians, the Inuit and the Métis. That accommodation was section 35 of the Constitution Act, 1982. Since then, there have not been many political processes in this respect, other than the Charlottetown accord and the Meech Lake accord when Brian Mulroney was the prime minister of this country.

The aboriginal people still feel that there is a chance to build an aboriginal society by putting together a government of their own. Under section 91.24 of the British North America Act, the Minister of Indian Affairs is entrusted with responsibility for aboriginal peoples. He can only deal with the concept of governance as an ethnic government. The public understands that that is a racist government because it will govern people who live inside the reserves.

In my personal experience at trying to arrive at a workable instrument, I have been involved in direct negotiations over the last 20 years with the Quebec government and the Government of Canada. Aboriginal governance attempts to take into account the elements that are not normally taken into account in public government - that is, the ethnic component.

Let me clarify that ethnic component.

We must explore the ethnic component in order to accommodate the aboriginal people to see whether they really need to have a third level of order. Senators are quite familiar with that topic. It has been discussed. Perhaps there is another way to come up with an instrument that would accommodate the needs of the aboriginal people, taking into account the ethnic component, subject by subject. I would like this committee to focus on that issue. We owe it to the aboriginal people, as well as the citizens of Canada. Once and for all, they have to know exactly what type of instrument is to be enacted by the government in due course. We do not know that yet. In that area, I am trying to provide some way of laying out the objectives of this committee.

The magnitude of the area on which we need to focus is great. For example, if there are to be relationships between aboriginal governments and municipalities coexisting within the same community, how will they function? Various sets of options need to be examined.

The other relationship to be expected is that of the regional government. As well, we must examine provincial jurisdiction under section 92. How will we deal with the overlap of two jurisdictions? How do we mesh the two jurisdictions? The other level is the national level. We are talking about a parliament within a Parliament.

My interpretation of the royal commission report is that there is much work to be done. This is the magnitude of the committee's responsibility, if it is approved by the committee.

Senator Kinsella: Honourable senators, if this budget is approved by the Senate today, does it cover work up until the end of this fiscal year, or is it envisaged to cover work after this fiscal year and into the next fiscal year? What period is the money for, and when will it be paid?

Senator Watt: The amount of the budget approved by the Internal Economy Committee is very limited. It covers the period of time up to the beginning of April or the end of March.

If you are asking me about the overall budget for the duration of the study - let us say, over 18 months - that would be in the neighbourhood of $1 million. If you break it down into one year, you are talking about an amount slightly higher than $600,000 dollars.

I looked at the amount of money spent by other committees. The committee that comes closest to this budget is the Transport Committee at around $400,000.

I know this amount is high. However, if we are serious about having input from the aboriginal network at the grass-roots level, we need resource people who will link the committee to the aboriginal organizations. For that reason, there is a need for three aboriginals to be hired - one Inuit, one Métis and one Indian. We also need a coordinator and an administrative assistant to the coordinator, because the work must be coordinated. That may be unusual in the Senate. You may think that perhaps those individuals should be supplied by the Department of Indian Affairs. I thought of that at the beginning of the discussion around this issue, but since the Senate has not spent very much money on aboriginals, I thought this was an opportunity to put forward these suggestions.

Over the last seven years, the Standing Senate Committee on Aboriginal Peoples has spent about $42,000.

(1640)

Senator Kinsella: Can the honourable senator help us understand the proposal presently before us? As reported in the Journals of the Senate of February 18, 1998, the total amount being sought is $27,200. That budget, under professional services, indicates an expense for a coordinator of special study, $7,000.

My question is: Has that coordinator been hired?

Senator Watt: Honourable senators, no one has been hired yet. I cannot hire people unless I have full approval from the committee.

Senator Kinsella: Given that we are five weeks from the end of the fiscal year, if this budget is approved today, is the $7,000 envisaged to be paid to the coordinator of special study from tomorrow until March 31?

Senator Watt: Honourable senators, I am not sure if I understood the question.

Senator Kinsella: We are being asked to approve $7,000, to be payable to a co-ordinator of special study at the rate of $350 times 20 days. My question is, given that we have only about 20 working days left, will that amount be used?

Senator Watt: We would have used it if we had moved rapidly in terms of getting some decisions made at the steering committee. Your answer would be that we might be short. If this money is not spent, it is not spent. We are also exhausting time right now, because the entire matter is still up for scrutiny by the committee.

Honourable senators, I am new at dealing with something like this but, over the years, I have noticed something which I find unusual. A motion is placed, an order of reference is put through, and then comes the budget. I have thought that was usual ever since I came to the Senate, and it was one of the first points I raised when I came here. I asked how we could approve a motion without knowing what it would cost. I think the rules in that area need to be changed. I did not think that I would become the victim of that while following Senate procedure.

Senator Kinsella: If the Senate approves this budget to complete this discrete study, is it your understanding and the understanding of your committee that in no way is the Senate committing itself to this longer study of over $1 million to which we alluded a few minutes ago? Is that clear in the honourable senator's mind? We are not buying into anything other than what is here.

Senator Watt: Honourable senators, I fully understand that. That is one of the reasons I must go back to the main committee tomorrow at 5:15. Why should I take on something that will be stopped before its finished? I might as well take this matter somewhere else. I may have to raise some money somewhere else if the Senate is not willing to pay for it. This is important. The Royal Commission report is far from implementation without a lot more work being put into it.

Senator Kinsella: Honourable senators, in light of what Senator Watt has told us, it seems to me that this is part of a longer study. If this committee is meeting tomorrow to revisit the larger question, perhaps the wisest thing for us to do is to stand this matter over until that meeting takes place.

On motion of Senator Kinsella, debate adjourned.

The Senate

Concerns of Albertans-Inquiry-Debate Continued

On the Order:

Resuming debate on the inquiry of the Honourable Senator Ghitter calling the attention of the Senate to the concerns expressed by Albertans with regard to the Senate as an institution: (a) its effectiveness, usefulness and viability; (b) alternative means by which to select members of the Senate; (c) the nature of its regional representation, particularly a desire to see equal numbers of Senators representing each province; (d) the length of term of office; (e) the role which a revised Senate might take at a national level; and (f) the powers which would be appropriate for it to exercise in harmony with the House of Commons.-(Honourable Senator Gigantès).

Hon. Richard J. Doyle: Honourable senators, on February 10, Senator Ron Ghitter announced his intention to pursue the oldest riddle in the Senate - whither the Senate itself? Long before the enactment of the instruments of Confederation, Sir John A. Macdonald and his merry men were debating the future of "second thoughting."

What a collection of molehills has emerged from formal studies of the place! Still, the halls have rung with the genuine concerns of many dedicated senators, from George Brown on one side arguing for Senate power, down to Grattan O'Leary on the other side with a ringing speech against suspensive vetoes and intrusions in provincial affairs. He saw no value in Croll-like investigations. "I think," he said, "it was Mr. Disraeli who said that royal commissions discovered what everybody already knew." Why should the Senate waste time?

(1650)

Rarely have we been reminded that if the Senate had not done some things right, it would not have survived for more than 130 years.

In my brief and haphazard experience of this place, I have come to believe that the Senate - God bless it - is, through good and bad experiences, reforming itself. If we do come to formal renovation of the upper chamber, the task will be made easier by the achievements and mistakes we have made in the last dozen or so years when we have been profiting from Lester Pearson's redefining of the age limits.

I shall now address the few important pluses and minuses in the manner in which the Senate has discharged its duties. First, a milestone, I am certain, and a mistake, I fear, was the Liberal Party's decision to abolish Senate pre-study of legislation while the legislation is still in the Commons. Legislative changes once made painlessly, informally and quickly, are now seen as rude amendments, challenges to a minister's wisdom and invasions of the turf of elected parliamentarians. To this day, the Senate limps where it could run in the improvement of bills that become laws.

Second, further attention must be given to Senate re-examination of the hostile demonstrations staged to publicize the fight against the Goods and Services Tax. I wrote the following for the January 1991 issue of The Idler Magazine:

The cost of Allan J. MacEachen's decision to risk the future of the Canadian Senate in an outrageous bid to restore the Liberals as the nation's natural governing party is still to be measured.

Today, historians writing from our universities and Op-Ed pages make the usual mentions of kazoos, whistle-blowing and filibusters to cover and obscure the ugliness of shouts of "despicable bastard," mock attacks on the Speaker, and fist-shaking threats described in contemporary accounts of the procedural battles and round-the-clock sittings that left the Senate in chaos from October 9 to December 14, 1990. Those who listened heard the last gasp of the old clubbers of the Canadian Senate. Those who watched the media had the embarrassment of listening to the Deputy Leader in the Senate name and praise eight lovely members of the Parliamentary Press Gallery for "reporting this history-in-the-making in a very conscientious way."

A package of rules that would prevent any repetition of the GST affair was completed in the shadow of a revolt by Senators Brenda Robertson, Normand Grimard and a committee of Tories - and witnessed by a single, silent Liberal who represented his boycotting colleagues. Significantly, no move to withdraw these new rules has been made in the six years following.

Third, no one should misread the anguish of Pearson airport, which could be the defining demonstration of the Senate's changing approach to the functioning of Parliament. No one has put the case for Pearson more dramatically than Senator Lynch-Staunton did in the Senate's Legal and Constitutional Affairs Committee on July 7, 1994:

Bill C-22, in its present form, is unacceptable, since it removes from those directly affected by it a fundamental right available to all Canadians, namely, an appeal to the rule of law. Anyone in Canada charged with an offence, whether criminal or civil, whether serial killer or embezzler, whether as a child molester or a traffic violator, is given his day in court.

Those affected by Bill C-22 have not been charged with anything. Not one. Not even the most avid supporter of Bill C-22 has referred either directly or indirectly to any illegality having been committed during the four years it took to put the Pearson agreements together. Yet, in this most unusual of bills, the government denies access to the courts, and with a few words not only cancels the agreements but denies that they ever existed!

One cannot repeat often enough that we do not seek compensation for anyone. We have no interest in claims whatever their nature. We do not even presume that the courts will rule in favour of the claimants. To be blunt, we are indifferent to the conclusion of any court action.

In March 1997, nearly three years after the fight began, The Globe and Mail editorialized:

The bill was not only an affront to the Constitution (as the Canadian Bar Association testified) it was an affront to natural justice, fairness and public intelligence.

(1700)

Undeterred, the editor of The Globe and Mail continues his campaign against power in the hands of the unelected. He has only recently switched to urging, and I quote:

...total abolition without prejudice to the Senate's re-invention.

He writes approvingly, and again I quote:

We now have a powerful new check on the power of the Commons in the form of the Supreme Court of Canada.

He does not acknowledge that, with the court, there remains the problem of their appointment. In other encyclicals, the editor would empower the 150 Companions of the Order of Canada - all appointed - to be the arbiters of high appointment, to be the people who choose the next Governor General, who would succeed the Queen.

The Senate soldiers on - serving the demand for public windows on national affairs, as it did on Newfoundland's Term 17, as a recognition of neglected minority and regional rights; in another sensible move, persuading the Minister of Finance to do his duty and appear before the Committee of the Whole to argue about changes to the financial structure of his proposed pension plan.

Thus, through recognition of errors and finding of alternatives, the Senate demonstrates its capacity to renew. It still has reforms to tackle. I would say it desperately needs appointments, or elections, that will better reflect the political thrust of the country; a further rewriting of the rules to make certain that committees maintain transparency of their work and respect the chamber's duty to approve or veto all committee initiatives. Make certain that all Senate committees, including the committee that governs internal economy and Senate operations, encourage the presence of the media in all but the very few exceptions set forth in the rule book.

Senator Ghitter's happy prospect is that the upper chamber will continue to change itself as his inquiry goes on. One thing is certain, it will soon have the report of the Standing Senate Committee on Legal and Constitutional Affairs and its study of Bill C-220. The examination is in its final stages and has presented a clear demonstration of the Commons' need for sober second thought. Remember, Bill C-220 is the bill intended to strip murderers of the profits they might make from their crimes; the Wappel bill, which it turns out is unconstitutional, a certain barrier for the Marshalls, the Milgaards and the Morins who seek to prove their innocence, and it will be the Senate's role to remind the public that the Wappel bill was passed in a unanimous vote, and not once but twice.

Hon. John B. Stewart: Honourable senators, I have a question for Senator Doyle, if I may.

Honourable senators, much of what Senator Doyle has said was a matter of opinion so I will not engage him on that. The first point he raised dealt with pre-study. If I heard him correctly, he said that the practice that is now followed, which is that we deal with bills after they have come here following third reading in the House of Commons, has the effect of posing a challenge to ministers when the bills in question are ministers' bills. The implication is that there has been a decrease in the number of amendments, that somehow or other we are cautious about offending the ministers, and consequently, do not amend their bills.

Has he made a study of the number of amendments that have been proposed to bills coming to this place from the other place, as his speech seemed to apply?

Senator Doyle: I am always happy to receive a question from Senator Stewart and, having heard out his question, I recognize why he is not opposed to opinion being expressed here. I have not made a neat study of the number of amendments because I have never found it useful to count the number of changes. One large change can change the entire thrust of a bill. Another amendment might not make even a difference of 50 cents by the time it is translated to public spending.

I know this much, sir, that since the day that Senator MacEachen made his speech, I have not been on a committee which has pre-studied a single item. I know that whatever number of items that might have been presented were not and that the thrust of the committees, of which I was a member, was either to try to hold up the bill or to simply make the faults that existed in the bill known to the assembled house.

Senator Stewart: I realize that the importance of amendment is not necessarily captured in the number of amendments, but I must say to Senator Doyle that participating in the work of the Standing Committee on Banking, Trade and Commerce, and Senator Oliver has been there, I have been very much impressed by the number of amendments that committee has offered to government bills and the readiness of ministers to see the point of those amendments.

(1710)

Perhaps some ministers are offended, and perhaps some members of the House of Commons are offended, but there seem to be others who are quite willing to accept well-reasoned proposals for amendments to their legislation.

Does Senator Doyle not think that the old practice of carrying amendments down the back corridor to the ministers, where senators sometimes would say - and one senator, I guess, was famous for this - "Unless you make this amendment in your bill, I can assure you, sir, that it will not go forward in our house" - is really a form of concealed legislation? In this day, when we want transparency, should we not be proposing amendments to bills openly and on the record, in the course of due process, rather than doing it in that earlier, behind-the-scenes method?

Senator Doyle: Honourable senators, I know there was some of the clandestine approach from time to time, but I can also remember a time when a minister, I believe it was Mr. Hockin, was speaking on a financial bill, and swiftly acknowledged at the outset, as they were sending it back to the Senate, that the amendments they had just made had been proposed in the Senate and had been well done. I practically fell off my stool. However, I know there was a general awareness throughout this place that, one way or another, you could deal with something that was not earth-shaking in legislation and get it done overnight, with an agreement that, yes, that change would be made, and it was made. It was not a "high noon" situation every time you tried to bring good sense to the matter of changing bills.

Senator Stewart: But surely you do not mean to imply that it is "high noon" now every time we propose an amendment?

Senator Doyle: I often find a great deal of hostility to changing anything in a bill that comes this way.

Hon. Marcel Prud'homme: Honourable senators, I have two questions for Senator Doyle: You said - and I fully agree - that the Senate should represent all the views that are debated throughout all the parts of Canada. Do you think, first, that the senators who have decided, for all kinds of reasons, to sit as independents have a role to play in the Senate? In my case, as you know, we cannot find a way, after five years, to put me on a committee, even after having chaired, as The Globe and Mail once said, the most difficult committees in the House of Commons for 15 or 20 years. Here I arrive, and we cannot seem to find a way to change the rules, and the rules are so simple. Is there a role for the independents?

Second, would you agree with a view of mine - and if not, I would like to debate it with you, because you are a man of reflection - that since the Prime Minister of Canada has always promoted women in the House of Commons, even though it is difficult to impose the choice candidates across the land, and since he has the option - a very famous phrase - should he not consider announcing that his project for the year 2000 and beyond would be to reach a goal of having 50/50 representation of men and women in the Senate? It is reachable. All it takes is a decision of the prime minister to recommend and to choose these senators from the fields wherein we have a necessity. I always said to every prime minister that they should try to choose, ahead of time, senators who have an expertise in certain domains where we have some colleagues who will soon be retiring. Take your case as an example. You are a top journalist.

Is it not time to reach 50/50?

Senator Doyle: Honourable senators, on the 50/50 aspect, I think that would probably be opposed by the women in the Senate, who I understand at the moment are working on 65/35 - 35 for the men.

On the status of the independent members, I have always thought the independent members were the most influential in the chamber. They were sought out, they were given trips, they were offered favours, if they would only vote with this side or that side on the next bill.

Senator Stewart: That was in former days.

Senator Doyle: Why you would give that up to be just a plain old senator, especially a male senator, I do not know.

Seriously, I think it is always wrong to set specific numbers or percentages. However, I was not jesting when I was talking about the pleasures of independent status.

Senator Prud'homme: There were independent senators before, and some even chaired committees. There was Senator Pitfield, who was a very able chairman. It is easy. You only need to add one member to a committee, as long as the government keeps its majority, and in the case of a tie the chairman votes. It adds only one more. There have been all these years of waiting. I was told, "If you vote with us, you can be on the committee." If I did that, though, I would no longer be an independent. However, the fact remains that the government has the right to expect a majority. It would be very easy. Where the rule now says 12, it could say 13. If you happen, once in a blue moon, to vote against the government, it would be 6 to 6, and the chairman draws the line, and all he needs to do is vote as the seventh member.

If we cannot find a solution for that impasse, how can we start talking about reform of the Senate? I am very patient, but someday I will stop all the work of the Senate to show that we can say no. I do not want to annoy all the senators just to show I am not happy - I am not unhappy - but it could be done. I think this problem could be solved. Everybody comes to me and says, "Yes, but it is the fault of the others," and the others say "It is the fault of the others." I do not want to have a clash with colleagues.

(1720)

Senator Doyle: I simply wish to remind Senator Prud'homme that I did say during my speech that I do believe it is time to go back at the rules, and to weigh them carefully. However, I am sure that there will still be some that will seem unfair.

As far as independent senators are concerned, we have several in our caucus whom we might recommend to you.

Hon. Herbert O. Sparrow: Honourable senators, I have a question for Senator Doyle. He is correct that in the Salter Hayden era a great number of pre-studies were done. I am not in favour of pre-studies, except in very special circumstances. When pre-studies were done, bills were passed within two or three days of coming to the Senate with the argument that they had been studied. We were always accused of "rubber-stamping" because the public did not realize that a pre-study had been done.

As Senator Stewart said, deals were made. The Senate as a whole really did not know the provisions of those bills, because the bills did not come before the entire Senate. The bills would be studied in committee and many times senators not on the committees studying them would not know what had happened, and suddenly the bill was passed. When the Senate votes on a bill, it is important that all senators are as aware as possible of the provisions of it. Of course, pre-study prohibited that in many instances.

The Senate committee learned nothing more than did the House of Commons committee studying the bill because the same day as witnesses appeared there, they appeared here. Neither committee learned the full story on an issue.

One other danger in pre-studies is powerful chairmen who can negotiate and make deals with various industries.

With that as background, does the honourable senator think there is some danger in having pre-studies, of being tarred with rubber-stamping, even more than we are presently?

Senator Doyle: If the Senate believes that there is a danger of that recurring, surely, when it formalizes its intent to return to that process it will institute safeguards.

When I came here, that was one of the things which was bragged about by the Liberals; that they had fathered this process, and that the Senate had been a terrible place before they had done so. Perhaps we would have to reshape parts of it; nothing is ever exactly the same as it was. However, surely we should not encourage ministers to come before us saying that they have presented a perfect bill. I have heard ministers say that in more than one instance, and in a way that I would say intimidated the chairman of the committee.

On motion of Senator Gigantès, debate adjourned.

[Translation]

Iraq

Canada's Policy in Current Crisis-Inquiry-Debate Continued

On the Order:

Resuming debate on the inquiry of the Honourable Senator Grafstein, calling the attention of the Senate to Canada's policy respecting the Iraq crisis (Honourable Senator Kinsella)

Hon. Noël A. Kinsella (Acting Deputy Leader of the Opposition): Honourable Senators, I would like to speak in this debate on the inquiry of Senator Grafstein calling the attention of the Senate to Canada's policy respecting the Iraq crisis.

Honourable senators, the countdown has stopped. The bombardment of Iraq has been put off by a few hours, a few weeks, a few months, a few years even, who knows? Today, the Secretary-General of the United Nations announced that an agreement was reached this weekend in the Security Council. We must thank him for his efforts.

In his speech last week, Senator Grafstein raised some significant and pertinent questions. It is true that the government of Canada's policy, as he said:

...seems more opaque than transparent.

Moreover, the speech by the Minister of Foreign Affairs in a special debate in the House of Commons struck me as far more an attack against the other MPs than a statement justifying Canada's position to all Canadians. This is unfortunate.

Under such circumstances, how can doubt not be cast on Canada's position? Has Prime Minister Chrétien made every effort on the diplomatic level, or did he just immediately answer yes when his friend, the President of the United States, called upon him?

Why did Prime Minister Chrétien not follow the example of the French President and actively support the efforts of Secretary General Kofi Annan? Why did he not play a leadership role, rather than let himself be pulled along by the Americans?

Honourable senators, as you know, the state of the Canadian Armed Forces and their readiness in the Iraq crisis were the subject of many questions by my colleagues on this side of the Senate.

Last week, we raised the following question: How could a vaccine that requires six weeks to act, according to the manufacturer, be effective when given barely two weeks ahead of time? The vaccine comes from the United States. Do we know it is effective? The government's responses contradict the information provided by the vaccine manufacturer. Why deny the evidence? Why hide the facts?

I realize the situation with Iraq is not simple; indeed not. There are always two sides to the coin. I will not hide from you the fact that I have no miracle solution to these problems. But have we examined the whole situation? A war with Iraq, certainly, but what will be the effect on the Middle East? What will be the effect on the Arab-Israeli peace process? We know that Islamic extremists have gained strength. They are operating on several fronts at once: the suffering of the Iraqi people, the frustrations of the Palestinians and the continuing presence of the Americans in the Gulf. One wrong move and the entire situation could go out of control.

According to the Minister of Foreign Affairs, who has taken to echoing the Americans, the United States may attack Iraq because Baghdad has not complied with the Resolution 687 conditions for a ceasefire. But many experts disagree.

One of them is Professor Weller of Cambridge University. In his view, attacking Iraq is justified only in the context of self-defence. Since Iraq has not initiated an armed attack or made any direct threat to attack, this weakens the argument for an attack based on the principle of self-defence without a mandate from the United Nations Security Council.

In addition, a seven-year-old resolution cannot be used to authorize military action, because Iraq has complied with several parts of this resolution. The professor reminds us that individual states, contrary to the Council, cannot simply declare that they have the right to use force in response to violations. Should there not be another vote of the Security Council before Iraq is bombarded?

Honourable senators, this impression of rushing into military action leaves me not knowing what to think. States that declare war against other states do not do so lightly. Military strategists set objectives, work out scenarios, and assess risks.

Does anyone in this chamber know the Canadian response to these questions, and for that matter, does anyone know the American responses?

The author Tom Clancy raised excellent points in an article in The New York Times reprinted in Le Monde. He said that it was sad to see how little interest there was in the methods and probable consequences of an attack against Iraq. A one-ton bomb would destroy everything for hundreds of metres and would not distinguish between men and women, children and the elderly. It will therefore understandably be essential to know what the target is and whether it is sufficiently important to justify the risk of killing or wounding everyone unfortunate enough to be in its path.

What, then, is the mission? If it is to suppress the weapons of mass destruction and the facilities where they are manufactured, then we need to know the locations. But do we? A strictly airborne war, no matter how much of a surgical strike it claims to be, has no chance whatsoever to destroy the stocks that are spread over a number of secret sites.

Who located the target of the strike? Who prepared us and the rest of the world for the unpleasant retaliations of an offensive, even a successful one? What is the probability of failure and what would its consequences be? When are we to declare a victory?

Have these questions been answered in sufficient detail to safeguard human lives? Bombing Iraq will not put an end to the problems of armament, particularly when intelligence seems to indicate that part of the arsenal is already in other countries like the Sudan and Libya, for example.

Saddam Hussein seems determined to use his own people as bomb shields, which makes the death of innocent civilians inevitable even in a legitimate attack. Who has given agreement for women and children to be killed?

Another point to which I want to draw your attention, honourable senators, is the condition of the Iraqi people. The United Nations imposed economic sanctions on Iraq in August 1991. In April 1995, United Nations resolution 986 allowed oil to be sold for food, but with restrictions. That resolution was implemented in May 1997. According to press reports, Kofi Annan will be asking the UN to allow an increase in Iraqi oil sales.

That is not surprising. Reports by a number of bodies linked to the United Nations have drawn a picture of the situation. Even the Secretary-General has reported to the Security Council on the situation on February 1. Here is what is known of the situation from a humanitarian point of view. Clearly, the economic sanctions are working very well. The situation is alarming as far as the children are concerned. Infant mortality is up from 25 in 1,000 births prior to the war, to 92 in 1,000 births in 1994.

On November 26, 1997, UNICEF declared that close to one million Iraqi children were suffering from malnutrition. The Secretary-General is asking that 1,500 community centres be created to provide care for children. He is also asking that extra food be supplied to a minimum of close to two million people, including children under the age of five suffering from chronic malnutrition, pregnant women, nursing mothers, people who have been displaced within the country, repatriated citizens and hospitalized patients.

I will not go on, but the deterioration in the water supply and treatment system has resulted in a terrifying situation.

In addition, it would take almost $870 million U.S. to address the immediate needs for restoring and maintaining the production, transportation, distribution and electrical infrastructure. The total cost of all projects required to resolve the operational problems of this sector exceeds $7 billion U.S.

It is true, honourable senators, that the suffering of the Iraqi people is the result not just of economic sanctions but of Saddam Hussein's policies as well. Once again, victims have been taken hostage.

Honourable senators, I am particularly concerned by the possibility that bombing the sites of the chemical and bacterial weapons contravenes the Geneva Convention. If we knew where the arms were stored and bombed these locations and chemical and bacterial agents were then released into the atmosphere killing people, would we not be guilty of breach of the Geneva Convention? This would apply particularly to the generals and colonels who enter the victims under the heading "collateral damage." I am not one of them. This is a serious matter that warrants serious consideration by the government.

Do not think I support Saddam Hussein. Not at all. He is wrong on several counts. It is not such a great idea to test chemical weapons on your own people. It is not such a great idea to let them die. It is neither an offence to national dignity nor humiliating to submit to UN inspections. All of the countries in the world that support disarmament agree to inspections and controls. The Americans have admitted that the UN control missions eliminated far more of the Iraqi military potential than did the 1991 war.

I doubt that the Government of Canada will respond to my questions any more than it will respond to the questions of our colleague Senator Grafstein. I will close by reading you a quote from last Monday's issue of the French newspaper Libération:

As well as apapearing unnecessary, the objectives of this war are vague and the means to achieving them inappropriate. In the case of doubt, it is better to leave well enough alone. This is not reason enough to forget that the non-proliferation of bacterial and other weapons of mass destruction, the poor man's atomic bombs, will remain a decisive issue in years to come. The end of the Cold War has given humanity the possibility of a future free from the threat of an ultimate apocalypse. This cannot be left in the hands of a few crazed megalomaniacs. The rather ridiculous quibbling over the inspection of the "presidential sites" conceals a vital issue: how to effectively express the international consensus against terrorism.

By taking a unilateral decision, the United States leaves itself open to the criticism that it is acting as both judge and jury. However, if the cogs of war jam up this time, the lesson will be at least twofold. Military force and its dissuasive effect may produce results in an area as crucial as the prohibition of the vectors of massive destruction. However, if the United States alone has the capability, the way it chooses to exercise it turns the rest of the world into a counterweight. This is a worthy subject for reflection in long periods of peace.

On motion of Senator Gigantès, debate adjourned.

[English]

Income Tax Act

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

On the Order:

Resuming debate on the motion of the Honourable Senator Meighen, seconded by the Honourable Senator Kirby:
That the Senate urges the Government, in the February 1998 Budget, to propose an amendment to the Income Tax Act that would increase to 30 per cent by increments of 2 per cent per year over a five-year period, the foreign property component of deferred income plans (pension plans, registered retirement savings plans and registered pension plans), as was done in the period between 1990 to 1995 when the foreign property limit of deferred income plans was increased from 10 per cent to 20 per cent, because:

(a) Canadians should be permitted to take advantage of potentially better investment returns in other markets, thereby increasing the value of their financial assets held for retirement, reducing the amount of income supplement that Canadians may need from government sources, and increasing government tax revenues from retirement income;
(b) Canadians should have more flexibility when investing their retirement savings, while reducing the risk of those investments through diversification;
(c) greater access to the world equity market would allow Canadians to participate in both higher growth economies and industry sectors;
(d) the current 20% limit has become artificial since both individuals with significant resources and pension plans with significant resources can by-pass the current limit through the use of, for example, strategic investment decisions and derivative products; and
(e) problems of liquidity for pension fund managers, who now find they must take substantial positions in a single company to meet the 80% Canadian holdings requirement, would be reduced. - (Honourable Senator Kirby).

Hon. Donald H. Oliver: Honourable senators, I am pleased to rise today in support of the motions sponsored by Senator Meighen and Senator Kirby urging the Senate to ask the government to propose an amendment to the Income Tax Act that would increase to 30 per cent, by increments of 2 per cent a year over 5 years, the foreign property component of the deferred income plans - that is to say pension plans, registered retirement savings plans and registered pension plans.

I am happy that Senator Gigantès is here today. I will attempt to answer some of the questions that he asked of Senator Meighen during his presentation.

I rise in support of this motion because I believe strongly in the importance of supporting initiatives designed to enhance the public policy debate to improve economic prospects for all Canadians.

In the past five years, most Canadians with net savings of more than $10,000 have them in RRSPs or registered pension plans. Any effort designed to enhance the net value of these plans for Canadians is, in my opinion at least, good public policy.

On December 17 last, Senator Meighen gave an excellent professional overview of the need to relax the foreign property rule in order to permit average Canadians every opportunity to increase the value of their retirements savings. I found both the motion and explanation compelling, and encourage all honourable senators to take the time to review the Debates of the Senate of that day.

There appears to be a national consensus among sophisticated investors and investment practitioners to increase the property limit to 30 per cent. Mr. Dale Richmond, President of the Ontario Municipal Employees Retirement Board, before the Banking Committee in its 1996 study of corporate governance, justified an increase on the following grounds:

...we must invest 80 per cent of our funds in the Canadian market and can only invest 20 per cent in the rest of the world. The Canadian market is only 3 per cent of the capitalized markets of the world and we have a fiduciary and trustee requirement to produce returns. However, we are limited to investing in a small part of the investible capital of the world. The foreign property rule really skews our investment process away from the objectives that we have mandated by trust and fiduciary law, and the statutory rules under which we operate, and it does it for reasons that are totally unrelated to the issues of prudence or safety in pension management.

I share his view. Some of my colleagues, however, raised some contrary arguments in this chamber, which I will attempt to address today. However, before addressing specific issues raised by my colleagues, I wish first to speak generally of the need to increase the foreign property rule from 20 to 30 per cent.

As all honourable senators know, Ernst & Young released a study last October on the impact of an increase in the foreign property rule on investors' returns. The study strongly concluded that, had the foreign property rule been increased to 30 per cent, ordinary Canadians would have realized higher returns, namely, another 1.6 per cent on their retirement savings. This is an important finding for the 5.2 million Canadians who contribute to RRSPs.

Some honourable senators may not be drastically moved by the thought of increased rates of return in the order of 1 or 2 per cent. A long-term 1 per cent increase in rates of return, however, increases a person's retirement savings upon retirement by about 20 per cent. In other words, if the foreign property rule had been increased to the level envisaged in this motion, the average portfolio of an individual's retirement savings could have been over 20 per cent greater today.

I hasten to add, however - and I want to make it clear - that this does not prove that history will be an adequate forecast of the future. If we believe that Canadians can realistically expect real rates of return in the range of only 4 to 6 per cent, the importance of ensuring Canadians are not restrained by unsound public policy is much greater.

Canadians are being asked to take increased responsibility for their own retirement planing. The reasons for this are obvious: demographic changes, economic changes, the size of the national debt, all resulting in pressure to reduce government spending and future fiscal obligations.

Placing more responsibility on retirement savings on individuals, while at the same time restricting their rate of return, runs counter to good sense and good public policy. It is for this reason that I support the motion before us and the reasons contained therein, with particular emphasis on permitting Canadians more flexibility when investing their retirement savings, while reducing the risk of those investments through greater diversification.

Clearly, honourable senators, the lack of knowledge among the majority of Canadians regarding treatment of their retirement savings should be of concern to all legislators.

(1750)

The lack of awareness specifically relating to the foreign restriction being discussed here can be summarized under four headings: lack of awareness regarding investment opportunity; lack of understanding about the long-term benefits of international diversification; perception that foreign investment is too risky; and lack of understanding of opportunities that lie in the global market-place.

Honourable senators, I will now focus on comments made by fellow senators in response to Senator Meighen's speech.

Turning to the argument put forward by Senator Gigantès, namely that any change envisioned here will only assist the more wealthy in this country, I wish to point out that this argument seems inherently wrong. It has become abundantly clear to me over the last week, as the Banking Committee undertook, at the request of the Minister of Finance, its study of the Canada Pension Plan Investment Board, that the foreign property rule will unduly restrain the returns of the investment fund. Because of the limits applied to benefits and contributions of the CPP, restrictions will disproportionately affect low- and middle-income Canadians.

The testimony heard by the Banking Committee can best be summarized by a witness the committee heard in Vancouver five days ago, who said:

Should the freedom from political interference include the freedom to invest without restrictions on foreign content....By having to forego the opportunities for portfolio diversification offered by foreign asset holdings, investors are forced to accept either a lower return with the same risk of return or higher risk with the same risk of return. It makes no sense to impose such costs on a huge investment owned by the broad Canadian public...such restrictions do nothing to lower domestic costs of capital or reduce the nation's net foreign indebtedness.

Several witnesses in Toronto, Calgary and Vancouver recommended strongly that the fund not be limited in its ability to invest in foreign assets.

Testimony relating to the Banking Committee's work has not been limited to witnesses. The media has also reported often on the need to increase the foreign property rule. As recently as last Friday, The Globe and Mail in its editorial reflected on the committee's work:

Plans to sterilize this market power by making domestic investment passive are ill-conceived and impossible to put into practice...according to experts, passive index investing is an impossibility for a fund of this size in the Canadian market. These problems would disappear if the absurd 80-per-cent rule were lifted.

Clearly, honourable senators, the CPP fund is all about the retirement of average Canadians. I do, however, wish to speak even more directly to the effect of the foreign property rule on main street Canadians.

The key finding of a recent Conference Board of Canada study entitled "Maximizing Choice - Economic Impacts of Increasing the Foreign Property Rule" was that funds subjected to the foreign property rule represent only 24 per cent of the total investment pool, which may disproportionately affect those average income Canadians whose major savings vehicles are RRSPs and pension funds.

Three points require emphasis.

First, it seems to me that as an individual's income increases, investments outside of registered plans increase and therefore are not constrained by this foreign restriction; second, half of the 5.2 million Canadians who contribute to RRSPs earn less than $40,000 per year; and, third, Canadians rely largely on investment managers to invest their retirement savings, all of whom support an increase in the foreign property rule as envisioned in the motion before us.

Honourable senators, over 8 million Canadians are either members of an employer pension plan or rely on RRSPs for much of their investment savings. For all these Canadians, the rate of return on their investments is directly or indirectly limited by the foreign property rule. Accordingly, the foreign property rule imposes a real monetary cost on Canadians - a cost that is not realized until such time as an individual retires and is likely not to be in a position to make up the shortfall.

Senator Gigantès maintained that the rule as stated by Senator Meighen be couched in plain language. Let me try putting it this way: By investing in foreign property, Canadians can participate in industries that are not readily available in Canada, such as certain areas of technology or health care. Canadians can also invest in cycles and in markets that may be at different stages in the investment cycle than in Canada, or that offer greater growth potential. All this points to the possibility of higher returns with greater diversification and therefore less risk for Canadians.

In short, Senator Gigantès, this motion is about real people - average Canadians who are concerned about providing for their own retirement and who largely are unaware that poor public policy is leading to lower returns and therefore lower levels of savings available upon retirement.

I wish to turn now to remarks by Senator Taylor and, to a lesser extent, Senator Gustafson. Specifically, Senator Taylor states that money in registered plans should stay in Canada and be spent in Canada or made available to Canadian capitalists, and so forth. These remarks may be properly categorized as reflecting economic nationalism. I hope Senator Taylor will not suggest that I, too, am a financial shark because I believe capital markets should be, and are by their nature, global. I preface my response by saying that if Canada is to prosper in the 21st century, it must learn to function in this new global world. For this reason, a consensus has developed among those knowledgeable about capital market issues that the foreign property rule is harmful and only distorts investments.

Let me respond to the economic nationalists from a public policy perspective, since the foreign property rule gives rise to two public policy issues. First, the onus is on the government and others who support such a restriction to prove that the restrictions on the earning potential of Canadians attempting to save for their retirement can be justified by the benefits that the foreign property rule generates for Canada as a whole. To date, we have seen no proof of this. Second, if there are such benefits, it should be shown that it is equitable that the restrictions apply only to Canadians using retirement savings vehicles and not to all Canadian investors.

More generally, the Conference Board of Canada found that raising the limit on the foreign property rule will not increase Canada's net international debt position, that presently it imposes a real cost on Canadians and creates an inefficiency in financial markets by restricting the free flow of capital.

Honourable senators, there is no evidence that interfering with normal market forces creates more economic activity or more permanent, high value-added jobs. It seems to me from the experience of Canada that the opposite is true. Canada's experiences in trying to increase R&D spending and venture capital for small- and medium-sized business, as Senator Taylor supports, have not been effective and have largely benefited only the intermediaries and not those targeted by such initiatives.

The original justification for the foreign property rule as stated by the Conference Board of Canada dates from a period when government was more closely involved in providing resources to selected sectors of the Canadian economy, and when there was concern about the ability of Canadian governments and corporations to secure sufficient access to sources of capital. Since then, however, an era of globalization has provided Canadian institutions with unlimited access to the world's capital markets. It is for this reason that governments are pursuing open market agendas through bilateral, regional and multilateral trade agreements instead of inward-looking, closed-door market agendas.

As honourable senators know, the North American Free Trade Agreement is the first trade agreement anywhere that has an entire chapter devoted to competition law. I suggest to senators here today that we will see this chapter expanded in the next round of negotiations. As the NAFTA is premised on the free flow of capital in the North American economies, and since this is seen as a desirable goal, the removal of the foreign property rule is a logical next step.

The Hon. the Speaker:I regret to interrupt the Honourable Senator Oliver, but it being six o'clock, is there an agreement that I not see the clock?

Hon. Senators: Agreed.

The Hon. the Speaker: Senator Oliver, I regret to also inform you that your 15-minute time period has expired.

Is leave granted to allow the honourable senator to continue?

Hon. Senators: Agreed.

(1800)

Senator Oliver: Honourable senators, before closing, I wish to address Senator Taylor's concern that the move to increase the foreign property rule is an orchestrated lobby on the part of investment advisors.

Honourable senators, those most concerned with the restrictions are those professionals who manage the bulk of retirement savings in Canada through pension and mutual funds. These are professionals who have a fiduciary responsibility to manage the future economic wealth of Canadians. Many of them believe that they cannot fulfil their fiduciary responsibilities to manage risks since they are increasingly being constrained by the foreign property rule, especially in light of Canada's capital markets becoming increasingly saturated.

I close, honourable senators, by saying that Senator Taylor's concerns about investing in risky individual stocks is not a reason to argue for maintaining the foreign property rule, rather an argument for increasing or even eliminating the restriction to permit greater diversification through global investing.

I encourage all honourable senators to support the motion.

On motion of Senator Gigantès, debate adjourned.

Legal and Constitutional Affairs

Committee Authorized to Meet During Sitting of the Senate

Hon. Lorna Milne, pursuant to notice of February 19, 1998, moved:

That the Standing Senate Committee on Legal and Constitutional Affairs have power to sit on 3:15 p.m. on Wednesday, February 25, 1998, even though the Senate may then be sitting, and that rule 95(4) be suspended in relation thereto.

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

Hon. John B. Stewart: Honourable senators, I would ask Senator Milne why she feels it desirable to have this resolution of the Senate. We have been over this ground again and again. We all know that there is an understanding that when we meet at 1:30 p.m. on Wednesdays, it is so the Senate can rise at about three o'clock in order to allow the committees to carry out their work for the rest of the afternoon, specifically to allow committees to meet at 3:15 p.m.

I think I understand why Senator Milne has proposed this motion. She does not believe that we will carry through on that understanding, and she has good reason to believe so. Again and again it has happened. I wonder if she is not, by proposing this motion, creating what in business circles they call a moral hazard. By carrying the motion, in a sense we subscribe to the known view of some senators that, even though we have met at 1:30, we should continue well beyond three o'clock.

Perhaps Senator Milne will undertake to dispel the fears that her motion has aroused.

Senator Milne: Honourable senators, I cannot dispel them; I can only acknowledge them. In fact, that is why I am on my feet and making this motion.

In anticipation of the goodwill that Senator Kinsella offered from the other side earlier this afternoon, and in the absence so far of a non-debatable method by which this house can count on rising every Wednesday at 3:00 p.m. or 3:15 p.m., I am placing this motion today. The Standing Senate Committee on Legal and Constitutional Affairs has witnesses from the Canadian Bar Association appearing before it tomorrow, at least one of whom, I have been given to believe, is unable to change further commitments. In view of the recent record of this house, I am asking that this motion be passed.

Hon. Colin Kenny: Honourable senators, I would normally support a motion of this nature, but I am concerned that we may take the excitement out of the place if we pass such a motion and provide for some certainty here. I wonder if Senator Milne would have any comment on that.

Senator Milne: I have no comment other than that this place provides quite enough excitement for my nerves already.

Motion agreed to.

The Senate adjourned until Wednesday, February 25, 1998, at 1:30 p.m.

Debates of the Senate (Hansard)

Debates of the Senate (Hansard)

1st Session, 36th Parliament,Volume 137, Issue 42

Tuesday, February 24, 1998 The Honourable Gildas L. Molgat, Speaker

THE SENATE

Tuesday, February 24, 1998

SENATORS' STATEMENTS

Olympic Winter Games

Memories of 1998 Games at Nagano, Japan

International Rehabilitation Council for Torture Victims

Olympic Winter Games

Conclusion of 1998 Games at Nagano-Congratulations to Canada's Athletes

The Late Kathleen Shannon

Black History Month

ROUTINE PROCEEDINGS

Business of the Senate

Depository Bills and Notes Bill

Report of Committee

Canada Cooperatives Bill

Report of Committee

Pages Exchange Program with House of Commons

QUESTION PERIOD

Cuts to Spending on Medicare-Response of Minister to Criticism-Government Position

Compensation Promised to Victims of Hepatitis C-Government Position

Cut-backs in Transfer Payments to Provinces-Effect on Public-Government Position

Cut-backs in Transfer Payments to Provinces-Decrease in Quality of Screening Facilities for Breast Cancer-Government Position

Cut-backs in Transfer Payments to Provinces-Assurance of Safety of Screening Facilities for Breast Cancer-Government Position

Implementation of Alternative Fuels Act-Request for Answers to Order Paper Questions

Human Rights

Assistance for Victims of Torture-Possible Increase in Funding-Government Position

Canadian Heritage

Possible Celebration for Olympic Athletes-Government Position

Aversion of Crisis by Agreement with United Nations Secretary-General-Government Position

Child Custody and Access

Senate Representation on Steering Committee of Special Joint Committee-Question to Joint Chairman

Hiring of Researcher for Special Joint Committee-Request for Particulars of Qualifications-Question to Joint Chairman

Delayed Answers to Oral Questions

Revenue Canada

Possible Postponement of Income Tax Deadline Dates for Victims of Ice Storm-Government Position

Razing of Abandoned Grain Elevators on Prairies-Loss of Storage Capacity-Effect on Rural Municipalities-Government Position

Answers to Order Paper Questions Tabled

Energy-Canada Ports Corporation-Conformity with Alternative Fuels Act

Energy-Marine Atlantic Inc-Conformity with Alternative Fuels Act

Energy-Montreal Port Corporation-Conformity with Alternative Fuels Act

Canada Pension Plan Investment Board Bill

Question of Privilege-Speaker's Ruling

ORDERS OF THE DAY

Canadian Wheat Board Act

Bill to Amend-Second Reading-Debate Continued

Telecommunications Act Teleglobe Canada Reorganization and Divestiture Act

Bill to Amend-Second Reading

Referred to Committee

Aboriginal Governance

Consideration of Report of Aboriginal Peoples Committee Requesting Authorization to Travel and Engage Services-Debate Adjourned

The Senate

Concerns of Albertans-Inquiry-Debate Continued

Canada's Policy in Current Crisis-Inquiry-Debate Continued

Income Tax Act

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

Legal and Constitutional Affairs

Committee Authorized to Meet During Sitting of the Senate

1st Session, 36th Parliament,
Volume 137, Issue 42

Tuesday, February 24, 1998
The Honourable Gildas L. Molgat, Speaker

Telecommunications Act
Teleglobe Canada Reorganization and Divestiture Act