Mr. Charlie Penson (Peace River, Ref.): Mr. Speaker, this seems to be a busy week for bills dealing with trade issues, unlike the normal situation where about one bill in trade comes forward per year. We happen to have had two this very week.
We are now debating Bill C-61 which implements Canada's free trade agreement with Israel. I have to admit to being a little surprised at seeing this bill because there certainly was not much fanfare heralding its arrival. The Minister for International Trade signed the free trade agreement with Israel in the dead of summer, on July 31, when most people are about as far removed from what is happening federally as they can get.
Other than a brief announcement, I do not recall any signs that the free trade agreement was in the works. I do not recall any news releases, any articles in the press or any calls for consultations with industry groups that might have wanted some input in the process.
Let me be clear that we are not opposed to this bill. We believe that each step made in the direction of trade liberalization is a good one. I am only surprised at the low key, behind closed doors way in which the deal was struck. There should have been more opportunity for input from industry groups.
We are in favour of trade liberalization. I understand the Liberals are now in favour of free trade as well. I compare them to a born again crusade; all of a sudden they have discovered the virtues of free trade and have embraced it with vigour. I do welcome that.
I recall in 1988 they were very much against free trade and campaigned against free trade in the 1993 election, but here we have the Liberals doing their famous flip-flop. They are becoming free traders with all the will and might they can muster. I do think we are going in the right direction and I am glad the Liberals finally saw the light.
One out of three jobs in Canada is created as a result of our exports. Thirty-seven per cent of our GDP is derived from trade. Growth in the economy has virtually only occurred in the area of exports in the last three years. The domestic side of our economy has been very flat and we do have to credit the growth in our exports as being one way we have been able to grow out of the recession we were in in the early 1990s. I think we are on the right track and I would like to see that continue.
As a matter of fact, I would like to see the next round of the World Trade Organization talks concentrate on further trade liberalization because Canada is in a good position to take advantage of that. We can compete with the best in the world but we have to have the trade rules that back us up and give us the clout in case we have trade harassment.
We have heard a lot about the proposal for the free trade agreement with Chile. There has been a lot of discussion about that agreement being closely patterned after the NAFTA agreement and the potential for that country to eventually enter NAFTA. I welcome that. There has also been talk about the eventual enlargement of NAFTA to join the Mercosur countries of the southern hemisphere to form a free trade area of the Americas. However, with Israel of course we did not hear a word until it happened.
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Officials of the Department of Foreign Affairs and International Trade were kind enough to give us a briefing last Tuesday regarding the free trade deal. They explained that this trade agreement is fairly simple. There is really no point in building an elaborate structure for dealing with a relatively small amount of trade.
Our trade with Israel is really a drop in the bucket when compared to our trade flows with other countries; nonetheless it is important. Exports to Israel totalled $216 million last year, while imports from Israel amounted to $240 million.
Although we are enjoying a big trade surplus now, essentially it is only with one country, the United States, which is of course our largest trading partner. It disturbs me that we continue to run trade deficits with almost all of our other trading partners. The amount we are talking about is almost the same amount as our trade with Cuba.
It is my understanding that the benefits in this agreement will also be extended to the Palestinians. Under normal circumstances trade flows freely between the West Bank, Gaza and Israel. Even with the present closure between Israel and the occupied territories, one would hope this trade agreement would be extended to the people living in the occupied territories as soon as possible.
I find this agreement interesting because it eliminates all tariffs on almost all industrial goods immediately upon implementation on January 1, 1997. Our free trade agreement with the United
States called for a fairly lengthy phase out period, 10 years on some goods. Fortunately we were going to be there by 1998. But with this agreement we are going to zero tariffs overnight, which is absolutely great.
There are only a couple of exceptions and I am not exactly sure why. Ladies swimsuits at the request of a Canadian swimsuit manufacturer and certain cotton fabrics at the request of Israeli manufacturers will have tariffs for another two and a half years. This will allow the affected companies to adjust to the competition over that period of time.
It is interesting to note that non-tariff barriers for the most part will not be allowed. This is following the lead that has been established at the World Trade Organization.
The agriculture sector, because of sensitivities from both sides, has been somewhat excluded from tariff elimination, although Canada has gained an increase in market access for certain commodities. These include grains, grain products, oilseeds, pulse crops, beef and various processed fish products. I have not had a chance to analyse what this might mean for farmers like myself who grow canola, but I think that any opportunity for access into these countries is a good one for us.
It disturbs me a little that Canada continues to protect our supply management industries with tariffs that are as high as 350 per cent. These tariffs are known around the world as Canada's dirty tariffs. We simply must get into the 21st century and realize that it is not in our best interest to continue to support these. A reasonable phase out time to allow for that to happen is acceptable. We have to start that process. I would like to see it done at the next round of the World Trade Organization talks.
Further trade liberalization is good for Canada. We have been one of the main proponents of trade liberalization. Yet right here at home we continue to restrict access to part of our economy. On the other side of the coin, the United States is using similar tactics to restrict access to Canadian supply management producers that compete head-on with the United States.
I understand that the impetus for concluding a trade agreement with Israel at this time is that our largest competitors in that country, the United States and Europe, have had free trade agreements in place for some time. This will put us on a level playing field.
The dispute settlement process in the agreement is fairly straightforward and it is binding. One of my colleagues who will speak later is quite interested in the whole dispute settlement process and will be examining that in some detail. He is concerned that dispute settlement procedures for international agreements are much better than the procedure we have for disputes between the provinces and Canada. It is very interesting that the Liberal government, once it realized the benefits of free trade, aggressively worked toward signing international agreements on trade.
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Where the government has fallen down is that it has not been able to put the same processes in place for trade between our provinces. That continues to cost Canadians somewhere in the area of $8 billion a year. The fact that we are not able to trade freely within our own country is a real contradiction. We have better trade agreements with our international partners than we have at home. My colleague from Vegreville will be speaking on this subject later today.
Another colleague who is a well respected economist in his own right will talk about bilateral agreements versus multilateral agreements. I know there is a bit of controversy among trade economists whether countries should enter into bilateral agreements. The argument has to do with efficiency and production. The concern is that the most efficient producer, given a situation in which all tariffs are equal, loses business when his competitor in another country moves to a zero tariff with a buyer. Trade is then diverted from the most efficient producer who, unfortunately, still has to add a tariff to his price. When he sells the product to a foreign country he becomes a less efficient producer.
The industrialized world is moving toward free trade with the World Trade Organization. The next round of trade talks will be held in 1998-99. The process is fairly slow, but we are getting there.
The last Uruguay round of the GATT declared there would be an average 36 per cent drop in tariffs over a six-year period. We are now halfway through that period. That is nothing compared to the 100 per cent drop in tariffs which has been achieved through the signing of the Canada-Israel free trade agreement.
Even though these bilateral deals may divert trade from efficient companies to less efficient ones, they also create new trade which did not exist previously.
I believe that bilateral deals are useful in trying out different rules and in testing different approaches. I suggest that the next bilateral agreement which Canada signs should try to up the ante beyond what we have been able to achieve at the World Trade Organization. We should try to get a proper definition for subsidies, countervail and some other things which were not achieved at the last round of World Trade Organization talks.
We in the Reform Party welcome the bill. We believe that trade liberalization is good for Canada. We are a trading country. We have a relatively small population. Only about 10 per cent of the GDP in the United States is derived from exports. In Canada, 37 per cent of our GDP is derived from exports. We need trade very badly. We need further trade liberalization in order for us to compete.
Canada should be a bit more proactive in the bilateral agreements and at the next round of the World Trade Organization talks. We could have used the opportunity with Israel to get an agreement on subsidies. That is what we should be looking at in our next move. Overall I support the bill. I am pleased that in just two
months manufactured goods will travel between our countries on a daily basis duty free.
The Acting Speaker (Mr. Kilger): We will now move to the next stage of debate where member's interventions will be limited to 20 minutes and subject to 10 minutes of questions or comments.
Mr. Joseph Volpe (Parliamentary Secretary to Minister of Health, Lib.): Mr. Speaker, I am delighted that my colleague opposite is in complete agreement with the initiative put forward by the Minister for International Trade. It shows great foresight.
I do not mean any disrespect by this, but the hon. member, who sits on the international trade committee, has for the last three years applauded all moves which liberalized trade and that increased Canadian business opportunities abroad. Generally speaking, he has been very supportive of the kinds of initiatives that the bill presents. He is unlike many of his Reform colleagues in that regard. We have actually seen eye to eye.
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[Translation]
I want to stress some aspects of the bilateral relationships between Canada and Israel and remind members here in the House of the speech the minister made last night.
For some time now, Canada and Israel have had an excellent relationship based on shared values and strong bilateral and social ties. Given the current critical situation, we are supporting the efforts made by Israel and its neighbours to achieve a legitimate, global and durable peace in the Middle East.
While Canada was negotiating NAFTA with the United States and Mexico, Israel was increasing its commercial ties by signing free trade agreements with the United States and, more recently, with the European Union, Turkey, the Czech Republic and Slovakia.
[English]
While that may have been a great idea for the Israelis, for the Europeans, for the Americans, it put us and our businesses at a slight disadvantage.
[Translation]
Trade between Canada and Israel was, however, stagnating. In November 1994, Prime Minister Jean Chrétien and the late Prime Minister of Israel, Yitzhak Rabin, decided to do something about it. The leaders announced the beginning of negotiations that would hopefully lead to a free trade agreement between their two countries.
Last January, Canada and Israel reached a tentative agreement that both governments kept trying to improve upon.
[English]
While it would be my intention to applaud not only the foresight of the Prime Minister in this case and the diligent work of the Minister for International Trade, I would be greatly remiss if I did not acknowledge the focus of the individuals involved in the genesis of this idea, the generation of energy that led to its fruition, if I did not also underline the democratic process that led to this deal.
As my colleagues on both sides of the opposition have indicated, this trade deal is one to be lauded, not so much for of its grandeur because it may have some limitations in relation to the kinds of business we do with the United States and other countries, but it is an important and crucial first step. Quite often many of us feel dwarfed by the magnitude of government and by what appears to be the inaccessibility of the decision making process.
If members will allow me a personal reflection, this trade deal was really born out of a desire of entrepreneurs in Canada who saw opportunities emerging in the Middle East, and Israel in particular. They noticed that, notwithstanding all the difficulties that the area was having, because of the enormous influx of immigrants into Israel and because of the initiatives of the Israeli government to reach out and make peace and at the same time establish economic ties with its partners, there was a mini-economic boom.
The Europeans were the first to notice this. Their companies, with the support of their governments, were able to develop a niche market that had started initially with the growth of tourism. It may come as a surprise to most members, but the tourism industry and related industries are at their most potent right in the Middle East, most particularly in and around Israel.
That boom in the tourism industry allowed for enormous demand, much more than the area could supply for such things as furniture, for example, or textiles and clothing but also in the petrochemical and chemical industries.
Our entrepreneurs in the Toronto-Montreal area found that, notwithstanding the competitiveness of their product and the quality of their materials they could not compete with the Europeans or the Americans because of the free trade agreements they had struck with Israel. They asked the then leader of our party, now the current Prime Minister of Canada, if he could address this at a public meeting. The soon to be Prime Minister was asked if he would address this vacuum in Canadian international trade policy. Notwithstanding the dangers that address might put the party in, he promised he would do it. This he did immediately on assuming the
mantle of Prime Minister. We have seen the results. After two years of negotiations we finally have a deal.
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As well, many of my constituents who were involved in the initial genesis, the push toward getting government foreign policy and international trade policy to respond to the interests of entrepreneurs in Canada, took every opportunity to remind me as their local member and other members from Toronto and Montreal that this treaty needed to be signed. Not only would it benefit Canadians economically, it would give us indirect access to the European Union. I know my colleague from the Reform Party would appreciate that.
It took a while for people to respond because obviously the details of such a deal had to be worked out. It is a credit to the people who were involved in this. I met them last July when the Minister for International Trade signed with his counterpart, Natan Sharansky in Toronto. Obviously there was some assiduous work to ensure that the deal would take place so that the new bilateral relations between Canada and Israel would work to the advantage of both parties.
Statistics were related by the Minister for International Trade yesterday and repeated by my colleagues from the Bloc and the Reform Party this morning. Trade has already picked up in some areas by as much as 37 per cent and in others by 49 per cent over last year. Such is the impact of the discussions of such a deal. We can anticipate that much more will happen as soon as the agreement has been inked. I am hoping that the House will approve this today following the debate.
In a crucial area like the Middle East, the presence of Canada whose reputation for altruism as seen through its peacekeeping efforts everywhere throughout the world would be a welcome addition. It has no interest except as one that would introduce expertise in the areas of the region that need it most. I pointed to petrochemical industries. The minister pointed to the electronic and agri-products industries.
When we speak of Israel we are speaking of relations with a country which is not much larger than Prince Edward Island and half of it is desert. Most people can develop policy by shouting from one city to another, in the same way that we shout at each other in the House. The place is intimate, the proximity of one market to another is such that most of us would not appreciate the impact for economic secrets.
However, the presence of Canada, not only as a peacekeeper but as a nation of entrepreneurs, that is willing and ready to provide not only its products but also its expertise will provide Canada, the Middle East and particularly Israel an opportunity to see how things can and should work.
Both opposition parties have indicated that they recognize the import of Canada's initiative of strongly promoting that such a deal also be made available to the Palestinians in the area. I think it is marvellous that the Israelis saw an opportunity for a lasting peace with a Canadian presence on an economic and political basis.
The bill is one that reflects not only what entrepreneurs wanted because it was generated in part by entrepreneurs who saw an opportunity and seized the chance to apprise their government of it and then follow it through together with the bureaucracies of both countries to ensure that legislation would come forward which would cement the ties both were willing to establish.
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We have already seen some of the product of that. We have seen some of the flower of that activity. I look forward to a greater, more blossoming economic activity and political participation on both sides.
Mr. Speaker, I thank you and colleagues for their attention. I thank them in particular for their support.
Mr. Jim Silye (Calgary Centre, Ref.): Mr. Speaker, there is no question that we support free trade and we support bilateral trade agreements that are negotiated by our representatives.
I find it interesting to listen to the hon. member from the government side using such flowing and glowing eloquent language when describing this trade deal, but I wonder about the hypocrisy from the other side.
When the Liberals were in opposition and when they had a leader by the name of John Turner, they ran a whole election campaign which caused me a lot of grief. I had to hold my nose while I voted for the Conservatives because I favoured free trade.
I did not want to vote them in for another session. I did not want them to be here for another four years because they were incompetent. They were running the government very poorly. They were overspending. They promised tax cuts and did they give us tax cuts? They gave us tax increases. They promised integrity in government and what did they give us? They gave us nine cabinet ministers who quit in the first four years.
In opposition they debated how free trade is not good and in the best interests of Canada, and how North American free trade is no good for Canada. We just have to go back into Hansard.
John Turner ran a campaign against Brian Mulroney on free trade. That was the issue and the people over there, many who were in that campaign, were against it. Now we have every one of them, including the Prime Minister, saying free trade is great, quote the trade statistics.
Thank goodness we have free trade because that is what is saving their butt in terms of jobs and job creation. The only reason our economy is growing is our trade agreements. That is what is making it grow. Domestic growth is nil. It is next to nothing. There are no jobs in Canada. There are 1.4 million people out of work.
Thank God the jobs that are being created, those 600,000 jobs they brag about, over half of them are probably due to the trade.
What I do not understand is the hypocrisy of politicians who say one thing in opposition and then when they get on the government side they flip-flop. I am not sure if this member has flip-flopped. I am not accusing this member of flip-flopping. I am sure based on his speech, I am positive based on his speech, that he believed in free trade when he was in opposition. He believed in free trade when John Turner was running against it. He believed in free trade all the way. I am sure he did because you cannot use language like that today, having argued against it yesterday.
The hon. member is anxious to get up and I will let him get up, but I want to make a serious comment. I want to repeat it so that everybody understands my point.
My point is why say that you are against something in opposition, then go over to the government and be in favour of it and in such a way that they always believed in it? It does not make sense to me. Thank goodness for the wonderful rebirth of the Liberal Party in terms of understanding the economy of the country and I compliment it for flip-flopping.
Mr. Volpe: Mr. Speaker, I am not accustomed to his phrase flip-flop. It is not part of the thesaurus that I read.
I thank my colleague for pointing out why Canadians decided very decisively in the last election that they could no longer brook the kinds of people that were administering, in fact misadministering, the country.
I am pleased that he realized that this government, this administration, my party, has taken all the appropriate steps to ensure that bad decisions were redimensioned, that adjustment programs were provided, that the direction required for trade deals be appropriately moved so that the benefits to Canada could accrue in an accumulative fashion.
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I am glad that he has noted that it has worked. He has pointed already to the impact of increased trade on the domestic economy. For that I thank him. He has pointed to the impact of this administration's approach to world trade, liberalized trade and its impact on the nation's finances. He has pointed to the importance of this kind of growth to the fiscal policies and to the impact on the interest rates which have accrued to Canadians, which is a very immediate and very profound financial impact. For all of these things I thank the member opposite.
I want to thank him as well for recognizing that the country is run by an administration that realizes the importance of a changing world, the dimensions of that kind of change, the impacts of implementations of measures to deal with those changes and to bring them to a point where Canadians are very much an integral part of a globalized economy, of a globalized political economy, one in which they can look forward to a future with prosperity and growth.
Mr. Charlie Penson (Peace River, Ref.): Mr. Speaker, I enjoyed the comments of the parliamentary secretary for health and his recognition that indeed the Liberal Party has finally decided that free trade is an attribute and one that has been very successful in transforming the Canadian economy into one of growth.
As my colleague from Calgary centre has just stated, the domestic economy has not recovered. There still is not the confidence there with consumers but on the trade side, on the export side we have been very aggressive. We have done a good job and there has been tremendous growth.
I know the Liberal Party has done a major conversion here and now they think that free trade is good. Canada generally has been a leader in trying to put together the trade deals that are necessary. As I said earlier, we can compete with anybody on a level playing field but we cannot compete with subsidies from other countries and high tariffs.
At the last round of the GATT talks which the Liberals took over at the very end, they favoured supply management, article XI, which would preserve border closures and stop any product from coming into the country in terms of supply managed farm products. Canada became isolated at those trade talks. We were the only country that finally took that view and continued to take that view although it was not one that was conducive to free trade and it still is not.
We have moved to tariffs now, 350 per cent tariff on butter. Surely for a country that espouses free trade, trade liberalization, and has since after the second world war, are we not in a real contradiction here that we want free trade in other countries, we want access to their markets, but we will not provide it for the supply managed farm industry here at home?
I would like the parliamentary secretary to comment on that question.
Mr. Volpe: Mr. Speaker, I compliment the hon. member from Peace River. He and I sat on the international trade committee and on the foreign affairs committee for about two years. He has been insistent and persistent in his approach in defending the interest he feels he was elected to defend. I say that with no disrespect. It is important that members keep their minds on the issues.
In the course of those debates in that committee he pointed to this issue on more than one occasion. In fact, he was part of a series of studies that the committees undertook and participated in to bring just such issues forward.
The question of adjustments is not one that is going to be answered immediately in one debate in the House, nor dare I say, as we both found, in one committee. He pointed to the fact that Canada found itself isolated but that is part of the negotiating process. We entered into GATT, we entered into the World Trade Organization precisely because we wanted to ensure that the world recognizes certain standards, certain rules for dealing, for trading. We had to defend our own interests until we can find an alternative way to defend those interests.
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In the context of those two organizations, we had to negotiate and we continue to negotiate for the interests of Canadians. I do not think we need to apologize for that, notwithstanding the philosophical positions other people have.
If farmers in Canada feel unhappy about the fact that we have defended their interests I would like them to say so. If what the member is saying, that defending our interests runs counter to the philosophical positions espoused by other countries and promoted by other countries to their own interest, that is a discussion that we can have a little later on. However, that is not what I am going to apologize for.
[Translation]
Mr. Stéphane Bergeron (Verchères, BQ): Mr. Speaker, I find the debate that has been going on between our colleagues for the last minutes interesting. It illustrates quite well what my colleague for Terrebonne referred to yesterday, that is, for almost the last three years now, we have been amazed to hear the Liberal government speak in favour of free trade in this House and on at forums around the world, since it was so opposed to the Free Trade Agreement with the United States and, later on, to the North American Free Trade Agreement. Thus, like our colleagues of the Reform Party, we are very happy to see this quite spectacular conversion on the part of our Liberal colleagues.
This being said, I am happy to rise today in this House to speak on Bill C-61, an Act to implement the Canada-Israel Free Trade Agreement.
I must say at the outset that, even though we are critical of the way in which the Liberal government singularly excluded the official opposition from the negotiations along with all the other players interested in expressing their points of view on this matter, the government can be assured of the support of the Bloc Quebecois because we are in favour of free trade and globalization of markets, which anyway reflect an irreversible trend in world trade.
After the United States and Mexico, here is a third state, which is a lot farther from our frontiers, that will in all likelihood, in January, 1997, enter the group of countries with which Canada will remove all trade barriers.
The Bloc Quebecois favours the establishment of closer ties between Israel and Canada. We think that Quebecers and Canadians can only win from such an agreement, since the free flow of goods and the increased competition promoted by free trade will give our respective peoples access to a larger range of products at better costs. For these reasons, the Bloc Quebecois is in favour of this free trade agreement, which, as I said, will allow Canadian businesses to increase their presence in Israel and eventually in other countries in the Near or the Middle East.
This free trade agreement with Israel is designed to eliminate practically all duties on products traded between the two countries. Israel, with a population of 6 million-which, by the way, is just a little smaller than the population of Quebec-will have closer ties to Canada since tariff barriers that have restricted the free movement of goods until now will soon be eliminated.
This bill, which is divided into three parts and includes 62 clauses, will provide, among other things, for the elimination of duties on all industrial products as of January 1, 1997, except for two products for which the elimination of duties will be done more gradually, namely women's bathing suits and certain cotton fabrics.
In addition to those two products, the agreement also provides for a reduction of duties on most agri-food products, except for dairy products as well as egg and poultry products, as agreed by both parties.
This agreement comes just at the right moment to promote trade between Canada and Israel. In 1995, bilateral trade between the two countries reached $450 million or so, a 37 per cent increase from the previous year. As for Canadian exports to Israel, they stood at $236 million in 1995, up practically 50 per cent from 1994.
Trade between Canada and Israel has been increasing constantly over the last few years.
This is why the time has come to eliminate the trade barriers between the two countries. As Quebec's Deputy Prime Minister was saying, in October 1995, in a letter to the federal Minister of International Trade, Quebec, and I quote: ``[-] has always been a strong defender of freer trade between countries-he was referring to the Free Trade Agreement, the North American Free Trade Agreement, the General Agreement on Tariffs and Trade and the World Trade Organization-and still supports freer trade as an instrument of growth''. The Bloc Quebecois is in complete agreement with this view.
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What is special about the State of Israel is that it is located in a geopolitical context completely different from ours. The history of the Jewish state has not been all peace and tranquillity, for most of the neighbouring Arab countries have been in an official state of war against it since its creation in 1948.
Certain events in the recent history of Israel are more significant than others. For example, the Six Day War that took place in 1967, culminating in Israel's victory over its neighbours, resulted in the occupation of territories that unfortunately has continued right up until the present.
The names of these territories continue to be well known to us today, because they are still at the centre of world news. Naturally, this presence only adds to tensions between Jews and Arabs, because even though Israel withdrew from the Sinai in 1982 and from the Gaza Strip in 1994, it still occupies East Jerusalem, the Golan Heights and the greater part of the West Bank.
However, in spite of the peace process set in motion in Madrid in 1991, followed by the signature of the 1994 accords between Israel and the Palestine Liberation Organization, better known as the PLO, the peace process still has a long way to go.
The tragic assassination of Prime Minister Yitzhak Rabin on November 5, 1995, dealt a disastrous blow to the peace process. This man, whose goal for many years had been to see the people of Israel finally able to live free of conflict, said in his last speech, just moments before being shot down by a young fanatic: ``I was a man of war, but today we have a chance at peace. I believe we must take this chance, so deep is our yearning for an end to the conflict''.
His assassination led to a deterioration in the situation. Last spring, the repeated suicide bombings by the Hezbollah prompted the Israeli army to carry out air raids and bombing attacks on southern Lebanon. These attacks left over 150 Lebanese dead, most of them civilians.
A few weeks ago, the decision by the new government of Benjamin Netanyahu to reopen the underground gallery leading to the site of the Al-Aqsar Mosque, the third most sacred Islamic religious site, led to riots in which some fifty Palestinians and some fifteen Israelis were killed. We sincerely hope that Prime Minister Netanyahu will re-examine his current hard line with respect to Palestinian autonomy.
It may be worthwhile to point out that the present Canadian government constantly maintains that human rights are promoted through trade links. Yet, the state of Israel has already signed a free trade agreement with the United States, in 1985, followed by a similar one with the European Union in 1988, and now with Canada. But have we seen any improvement in the situation? No.
We believe that the Israeli government ought now to be seeking solutions for reconciliation with the Palestinian authorities. After all, is politics not the art of compromise? Speaking of compromise, it would certainly be worth while to explore the possibility of expanding this free trade agreement to the Palestinians living in the occupied territories.
The first step would, of course, be to obtain the go-ahead from the Palestinian authorities, in order to have the assurance that their inclusion in an Israel-Canada treaty was indeed what they wanted. It is possible that, expansion of the agreement to include the Palestinians would result in increased employment in the occupied territories, which might eventually contribute to stabilizing the social climate.
The negotiations leading to the signature of this agreement were held throughout this entire troubled period. They began in November 1994, and ran until January 1996, and led to an agreement signed by the Minister of International Trade for Canada and the Israeli Minister of Trade and Industry, on July 31, 1996.
As the party forming the official opposition, we have difficulty accepting that virtually the entire process leading to this agreement was held in secret, with no public debate whatsoever. It is understandable that the negotiating process itself needs to be carried out behind closed doors, that is natural. We know that the negotiators are faced with a tough job and have to negotiate many pitfalls and obstacles, but we would appreciate progress reports on the negotiations.
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Now we are not asking for parliamentarians to be present at the negotiating table, but we do believe that in a democracy, it is important to avoid any systematic exclusion of those who represent the people.
Remember that the most important issue in the 1988 election was the free trade agreement between Canada and the United States, to which the Liberals were opposed. Many groups that knew they would be affected by the agreement could therefore take part in the debate.
It was by defending their points of view and by making representations to the political authorities, that stakeholders, company directors and spokespersons for community and environmental groups were able to influence the tenor of the clauses included in the agreement before it was signed.
During the negotiations leading up to the North American Free Trade Agreement, the unions took a position on labour-related issues and expressed their fears about NAFTA. Environmental groups also expressed their concerns about environmental issues. Although the results were not satisfactory to all stakeholders, the fact remains that before the agreement was signed in December 1992, there had been had a major debate in the public arena.
The treaty dealt with in the bill before the House today has now been signed. Negotiations have been finalized and nothing can be changed. Without repeated interventions by the official opposition, which managed to draw the government's attention to the problems that such an agreement would represent for the lingerie and bathing
suit industry in Quebec, decisions that would have had a disastrous impact on this sector might have been made.
In fact, this industry would have been in serious jeopardy, since the State of Israel imports its fabrics from the European Union duty free, which it gives it a competitive edge on Quebec and Canadian markets. If we had not raised this issue in the House in November 1995, it is not certain that the negotiators would have been aware of the problem. And perhaps hundreds of jobs would have been lost in the process, especially in Quebec.
Canada is now busy negotiating free trade treaties right and left. We approve of the opening up of this country to various markets, but it is absolutely necessary to review the process leading up to the signing of these agreements.
The bathing suit issue is only one example of the potentially negative consequences of an agreement negotiated without public consultation. Although the agreement with Israel has already been signed, there is still time to improve the process for future free trade agreements being considered by this government. We are thinking for instance of current negotiations taking place between Canada and Chile, which are to lead to the signing of an agreement on or about November 15 this year.
Officials at Foreign Affairs and International Trade have given us the assurance that information on these negotiations will be made available to us. We can only hope that the ministers responsible for Foreign Affairs and International Trade are prepared to give their approval for the release of such information.
It is imperative to prevent a recurrence of this kind of situation, so that the opposition can do its job properly. Such a cavalier attitude on the part of the government is troubling, especially because the government knew quite well it could count on the support of opposition parties. Why persist in infuriating opposition parties when we could have presented the picture of a solid consensus to our trading partners?
If the government really wants open and transparent debates, it should practice openness and transparency itself. Otherwise, we will have to conclude, as it is the case now, that it prefers secrecy and obscurity. I plan to demonstrate the extent of this government's pettiness and inordinate mysteriousness with the official opposition on this whole issue.
Last April 25, during a special session of the Standing Committee on Foreign Affairs and International Trade on Israeli bombardments in South Lebanon, I conveyed to department representatives my reservations concerning the negotiations on free trade with Israel when it was bombarding civilian populations and openly crossing the internationally recognized borders of another independent country.
One official of the department replied that negotiations were interrupted pending the election of a new government in Israel. That statement seemed confirmed later on by replies we received from the Office of the Minister of International Trade. In fact, in May and June, we called the office of the minister a few times to find out when the negotiations would end and when the agreement would be signed and we were always told that the agreement was to be signed only in January 1997.
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And yet, a few weeks ago-on September 19, to be exact-the Parliamentary Secretary to the Minister of Foreign Affairs informed the committee members that the agreement had been ready to be signed since March, and that the official signing, which was to have taken place during a visit of the Prime Minister of Israel in Canada, had been postponed because of the elections in Israel. This is what we are criticizing.
It would appear that the agreement with Chile will be much more exhaustive than the one before us today. The agreement with Chile is supposed to be modelled on NAFTA. Since it will be more encompassing, there are many issues which would have been interesting to raise with Chile prior to promoting the agreement. Cases in point are standards regarding the environment, labour in general and child labour, in particular. The agreement with Israel is limited to goods and, as such, does not include services or investments.
Last week, we met with Oxfam Canada representatives who told us how concerned they were with the lack of protection on social issues negotiations seem to be leading to.
According to this organization, the agreement, the content of which will be made public when it is signed, around November 15, will undoubtedly not contain stringent enough rules on the environment and labour.
Even though Chile is undergoing tremendous economic growth, too many of its citizens still live in poverty as a result of the polarization of wealth. Therefore, it would have been desirable, both for Chile's sake and Canada's, that these issues be looked at more carefully. This is why it would be important to know how the negotiations are going prior to the House being presented with a bill implementing the agreement.
At least Bill C-61 before us today has the merit of stimulating exports and levelling the playing field for our companies competing with American and European firms, which have benefited from preferential access to the Israeli market for some time now.
The Bloc Quebecois, therefore, will support this bill to implement a free trade agreement with Israel, while condemning the fact that the elected representatives in this House were kept in the dark with regard to the negotiations and the issues raised during the discussions. It is not by hiding each of the negotiating steps leading to the conclusion of such important treaties that we will be able to reasonably debate the themes and issues that will affect the daily lives of our fellow contrymen.
That is why, as I said earlier, the Departments of Foreign Affairs and International Trade should keep the members of this House informed of the status of negotiations, if we are to have an informed and responsible debate. Our position regarding Bill C-61, which goes in the same direction as the government's, shows once again how serious our party is when it comes to the interests of our constituents and their willingness to promote entrepreneurship.
In conclusion, let me quote a short excerpt from the dissenting opinion the Bloc Quebecois gave in November 1994, during the review of Canada's foreign policy: ``Quebecers are not protectionists. They have shown it by strongly supporting the free trade agreement, the North American free trade agreement and the Uruguay round of GATT talks. Must we remind the House that Quebec's determination was the spearhead of the free trade movement in the 1980s? Far from seeing Quebec's sovereignist movement as a withdrawal into itself in response to economic globalization, we perceive it as an openness to the world''.
[English]
Mr. John Bryden (Hamilton-Wentworth, Lib.): Mr. Speaker, I would like to thank my colleague for some excellent remarks.
I would like to draw his attention to something that was said by the minister in his speech yesterday. I quote from Hansard. The minister said in reference to the free trade agreement: ``Why Israel? Israel and Canada have long enjoyed close relations. Our relationship is rooted in common values and shared democratic beliefs, the belief in freedom and the dignity of the individual''.
Yet we have a new regime in Israel under Mr. Netanyahu which has taken a very hard line with respect to the peace process, a very hard line with respect to the Palestinians. We have seen an outburst of violence on the West Bank.
I would like to ask my colleague whether he thinks, in supporting Bill C-61 which in essence ratifies the free trade agreement, we also endorse the policies of Mr. Netanyahu with respect to the Palestinians on the West Bank.
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[Translation]
Mr. Bergeron: Mr. Speaker, I think my hon. colleague has just asked me a very important question. I touched on this matter in my speech.
Last spring, we in the Standing Committee on Foreign Affairs and International Trade had a special meeting on the Israeli bombing in southern Lebanon. We were concerned at the time about the Canadian government beginning or pursuing free trade negotiations with the state of Israel, which was then bombing civilian populations in southern Lebanon and openly violating the internationally recognized borders of another sovereign state, Lebanon. We asked officials in these departments if they intended to suspend negotiations. All they said was that negotiations were suspended anyway, since they were waiting for the results of the Israeli election.
We then found out that negotiations had not been suspended, that the agreement was in fact ready for signing as early as March. This shows the government's contempt, if I may use this word, for the members of this House and the committee, as we should never have been told negotiations had been suspended when the agreement was in fact ready to be signed.
We did express reservations about the signing of this free trade agreement with Israel, given the Israeli government's somewhat intransigent attitude toward the Arab populations both within and beyond its borders.
This is why we ask that this agreement be extended to the Palestinian populations of the occupied territories, in the hope that this will eventually improve their economic situation. We also want to improve the social climate in the Israeli occupied territories.
Mr. Jim Silye (Calgary Centre, Ref.): Mr. Speaker, I have a question for the Bloc member.
[English]
I have been dying to ask this member a question because I have a concern. This is a trade agreement and he knows full well that, as my colleague mentioned earlier, there is a protective tariff system in effect in this country, especially with subsidizing the dairy industry in Quebec.
We pay over and above the next lowest price we could get our dairy products for, 350 per cent supply management tariff. We subsidize that product in Quebec. It is a huge component of Quebec's economy.
The member was sent to this House by the people of his constituency to break this country up. The people in his riding say they want to go on their own and they want him to fight for that. They also say they will be better off once they leave and that they will not have to pay for this expensive overhead that Ottawa generates. They will be able to do it better themselves and economically they will be better off. The people his riding think they will be better off if they separate. A large component of their industry is the dairy industry which is subsidized by consumers across Canada, including Quebecers.
Does he believe that if Quebec separates we are going to continue to buy our product at a 350 per cent subsidized price from the province of Quebec, from the new country of Quebec or whatever it will be called?
I feel that the issue of trade, of economics and of separation can be reduced to a simple argument which may be a reality that might sink in to the people of his riding as to the cost of separation, to whether the burden of proof should be on the separatists to prove to the people of Quebec that they will be better off in trade after separation.
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The Liberal member earlier asked why Israel. I ask, after separation why Quebec? We can get our product from ourselves. We can be the dairy industry to the rest of Canada. We can get it from the United States. They will become a competitor. Competition creates the best marketplace. The competition will reduce the revenue to the people in Quebec and Quebecers will have to compete. They will no longer be subsidized. The reality is they will be worse off. Would the hon. member like to comment on that subsidy?
[Translation]
Mr. Bergeron: Mr. Speaker, I was wondering if the hon. member would finally give me the opportunity to answer the question which he has been dying to ask me for such a long time. Since he had several minutes to keep repeating his question, I hope you will give me a few minutes to keep repeating my answer.
First, I must point out that it is not proper to use the current debate on the free trade agreement between Canada and Israel to settle accounts relating to the constitutional issue. We will have ample opportunity, during other debates in this House and in other forums, to settle our accounts regarding the constitutional issue.
That being said, I am pleased to answer the hon. member's question. His question is not only inappropriate, it is also insidious and, in my opinion, it shows the member's lack of knowledge of the supply management system, in Canada and in Quebec, for agricultural products.
To be sure, Quebec's dairy industry is largely subsidized by the federal government, but the member should also know that the egg and poultry industries are also largely subsidized. And, while Quebec is a major producer of dairy products, it is not one of the major producers of eggs and poultry in Canada.
Therefore, should the supply management system be eliminated, Quebec would lose, but so would Ontario and other Canadian provinces.
Again, the member's question indicates a lack of knowledge of Canada's supply management system, but I will say no more.
[English]
Mr. Silye: Mr. Speaker, I would like to point out that I do not fail to grasp this issue. I do understand this issue. It is the consumers I am talking about, the people who buy the product. They are the losers right now and they would be the winners. I understand the system.
[Translation]
Mr. Bergeron: Mr. Speaker, I do not share this view, otherwise I would not have spent the last three years praising the virtues of sovereignty in this House. I feel that, in the middle and long term, Quebec would benefit from being a sovereign state, and that Canada and Quebec could mutually benefit from it.
Why continue to spend so much energy arguing on issues that divide us, instead of trying to work together, in a new partnership, on the issues that unite us? I put the question.
[English]
Mr. Keith Martin (Esquimalt-Juan de Fuca, Ref.): Mr. Speaker, it is a pleasure today to speak on Bill C-61, the Canada-Israeli free trade agreement.
We in the Reform Party approve of bilateral trade agreements on the basis that they will strengthen the existing World Trade Organization.
I know my colleague for Peace River has some very good ideas on this and he would certainly be happy to advise the government on various new initiatives it should undertake.
A larger issue with respect to the Middle East is the security issue that threatens trade agreements and threatens the security not only between Israel and Palestine but the regional security which exists there which will have a huge impact on world economy.
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Currently the peace process is in disarray. There is a possibility it will fall apart. The Israelis and the Palestinians are polarized. We have a very important window of opportunity to help build bridges between the two groups.
After Mr. Netanyahu was elected it seemed that the Likud Party was pulled away from the work which was done by Mr. Netanyahu's predecessor, Mr. Shimon Peres.
On the other side, it did not take much for Mr. Arafat and the Palestinian authority to pull away from the peace agreement.
Both groups have to realize that their fates are intimately entwined. History, geography and the future will not separate them.
The conditions in the Palestinian autonomous areas are absolutely appalling. It is no wonder that terrorism has stemmed from these areas. It reflects the sheer frustration, anxiety and fear of these people. For example, in the Gaza Strip unemployment is over 70 per cent. That breeds desperate people and desperate people often resort to violence.
I would humbly suggest that economics is partly responsible for this situation. We have an opportunity through the free trade agreement with Israel to place conditions on how the Israelis will engage with the Palestinians in Palestinian autonomous areas. It should not be done in a heavy handed way, but in a coercive way for the betterment of both groups. The outcome of that will be improved chances for peace for all people.
If we can do that we will cut the legs out from the radical elements of Hamas that are responsible for the bombings that took place in Tel Aviv. It will cut the legs out from grassroots support for Hezbollah. It will cut the grassroots support for the Islamic Jihad. The only way to do that is to offer the Palestinian people in the autonomous regions some element of economic emancipation. Hamas has received support by providing schools, medical care and economic opportunities for these desperate people who are crying for improvement in their appalling situation.
I would encourage the government to find ways to work with the Israeli and Palestinian authorities to improve their bilateral economic agreements.
I would also suggest that the closure of the West Bank and the Gaza Strip must end. It must end in conjunction with agreements from Mr. Arafat and the Palestinian authority that they will make swift, decisive and effective moves against terrorism in their areas. They cannot have it both ways. If the Palestinian authority is going to preach peace, it must act in a peaceful way. It will be painful, but it will have to act with its own people. Only by doing that will the Palestinians be able to achieve the respect and trust of the Likud Party and Mr. Netanyahu.
On the other hand, Mr. Netanyahu has to stop closing down the West Bank and the Gaza Strip so freely and, at times, unfairly. That polarizes the Palestinian people and grassroot support wanes.
We must also pursue avenues to improve the education system in the Palestinian autonomous areas, the economics and also the infrastructure development which will be required. In order to do this there has to be a radical shift. We cannot continue to have this polarization between both groups.
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A few of the key players are going to have to be brought to the table. A key in the Middle East peace process is Hafez al-Assad of Syria. One of the great failings is that Mr. Assad has not been brought to the table with Mr. Netanyahu or his predecessor and with the King of Jordan and hopefully Mr. Mubarak of Egypt.
If these people can be brought to the table face to face then we are going to see some action. Mr. Assad controls Syria. He also has a huge sway in what happens on the northern border of Israel with Hezbollah. Israel is only going to feel secure on her northern boundary if the activities of Hezbollah are removed and the key to that is Mr. Assad.
Mr. Assad's intermediaries are not going to call the shots. We are not going to get any significant advancement in the peace process without Mr. Assad himself sitting down face to face with Mr. Netanyahu, King Hussein of Jordan, Mr. Mubarak and of course Mr. Arafat.
Another aspect is Jerusalem, an extremely sore spot. It eludes me as to why this area, the seat of so many religions of the world, this exquisitely beautiful area which all of us in this House and billions of people around the world have such a connection to, is the seed of such rancour and animosity and the root provocation of so much killing. It is completely opposed-I do not care whether they are Muslims, Christians or Jews, that is not what Jerusalem has ever been about or should be about. It is not what Jerusalem stands for.
A possible solution, because the groups are actually polarizing quite dramatically with Jerusalem, is to put it under UN protection. If the groups are not willing to share in Jerusalem, as right now they are not prepared to do, then the United Nations has to try to get tacit support from them to make Jerusalem a protected zone for the world, for all religions and for all people who follow those religions and have a spiritual connection with that beautiful city.
My other point is on the whole aspect of the Palestinian autonomous areas and settlements. It is an absolute provocation for the Israeli government to continue to support settlements in the Palestinian autonomous areas. It is a slap in the face to the Palestinian authority and a slap in the face to the Palestinian people. It polarizes them dramatically and is only an act of provocation.
The first thing the Israelis ought to do, and Canada can take a coercive role in this, is to: one, stop immediately all new building of Israeli settlements in Palestinian autonomous regions; two, remove some of those settlements out of the Palestinian autonomous regions and there will be some kind of trust again from the Palestinian people. The Palestinian authority must also provide assurances to the Government of Israel that terrorist activities are going to cease and desist. They will not but they must at least take an active role with the Israeli defence forces to come down on these extreme groups that are causing havoc in the whole peace process.
Another factor which not many people are talking about and which in the long run overshadows much of what can take place in the Middle East is water. There is very little potable water left in the Middle East. Those water levels are going down dramatically. It may not sound like very much but if human beings cannot drink water, they will not live there. If there is no water, they cannot grow crops. If crops cannot be grown in these areas, there are not going to be settlements. This is a problem that affects not only Israel and
the Palestinian people but it also affects Jordan and to a lesser extent Syria.
Here is an opportunity for Canada to get groups of hydrologists together with other hydrology specialists in the world to help the Middle East try to maximize the water available and to improve the conservation and the development of the water tables that exist there. No matter what we do, if there is no water in the future, there simply is not going to be any people who wish to live there.
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I will close by saying that historically we have had two sides in the polarization. They have come together in a narrow window of opportunity and with great hope for the world in the peace process that took place in conjunction with the Americans.
Sadly, what has happened since the last election is that the two groups are polarizing. They must realize that their fates again are intimately entwined. Perhaps they cannot live together in the same country. I think that is probably what is going to happen, but at least let them live side by side in peace and then develop economic co-operation between both groups. If those economic bridges develop, then peace will develop and the decades of mistrust and hatred are going to peel away, albeit slowly.
There is a saying in the Middle East that peace is when a son buries his father and war is when a father buries his son. I hope for all the people of the Middle East that there will be far fewer fathers burying their sons. I also hope that Canada can take her role with the other members of the international community to develop in co-operation to bring peace to this much troubled area.
Mr. John Bryden (Hamilton-Wentworth, Lib.): Mr. Speaker, I thought the member wandered a little bit off the mark in the sense that the free trade agreement with Israel has already been signed. All that is left is for this Parliament to endorse that deal. It cannot be changed as it stands at the moment.
I am very proud of this country and especially this Parliament for the way in which we exchange very differing ideas in a spirit of tolerance of one another's views and a great respect for the dignity and rights of others, regardless that perhaps some of the members may even seek to break up the country. Yet, we respect the dignity of one another.
My problem is that there is a new regime in Israel that has set a new mark for Israel in terms of respect for human rights and human dignity by embarking on a hard line approach to the Palestinians. As the member has stated, it is a provocation and has led to deaths in the Middle East, mainly of Palestinians.
I would like to repeat a question for the member which I had put to the member for Verchères, who I did not feel answered it very directly. Does the member feel that if this Parliament endorses this free trade agreement, are we at the same time endorsing the hard line attitude of Mr. Netanyahu toward the Palestinians? Are we endorsing his view of human rights and respect for human dignity?
Mr. Martin (Esquimalt-Juan de Fuca): Mr. Speaker, I thank my hon. friend from the Liberal Party for his very astute question.
Although we support this bill, I believe there is an inherent danger in the bill's being perceived as an endorsement for Mr. Netanyahu and the Likud party's hard line approach with the Palestinian people. That is why it is imperative for us to make clarifications.
We should through this bill strongly support and coerce the Israeli government to engage in serious economic activities to improve the health and welfare of the people who exist in the Palestinian autonomous areas and in particular the terrible and profoundly disgusting conditions that exist in the Palestinian camps. If anyone were to visit them, they would be absolutely shocked. Therein lies the danger and the opportunity.
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That is why I would strongly encourage our government to make it very clear to the Government of Israel that we as a country do not support this hard line attitude; we do not support the prevention of Palestinians from moving into Israel from the West Bank and the Gaza Strip; and we do not support the continued atrocious and appalling conditions that exist in the Palestinian camps and in the Palestinian autonomous areas.
We strongly demand that, together with Mr. Arafat and the other Middle East leaders, Prime Minister Netanyahu engage in co-operative efforts to improve the economic situation that exists in these areas. Therein lies the hope for peace.
Mr. Leon E. Benoit (Vegreville, Ref.): Mr. Speaker, I am pleased to speak on Bill C-61, the bill which implements the Canada-Israel free trade agreement.
This agreement should benefit many Canadian businesses and many Canadians. It means job creation which must be a top priority for anybody in this House. This agreement applies especially to the areas of agriculture and grain products, high tech communications, natural resources and the manufacturing sector. It is important for Canada to promote more open and fair trade with all countries around the world. We would not find much argument in this House with regard to that statement.
My concern lies in the fact that it seems like too much of this government's energy on balance goes to seeking out trade with other countries and too little energy goes to seeking free trade within Canada.
Canada's international trade amounts to about $160 billion a year. It is a large part of the Canadian economy, so it is important. I want to make it clear that it is important to encourage free trade with other countries. Since the Canada-U.S. trade deals have been put in place, our trade surplus with the United States has increased dramatically. It has been good for Canadians. Deals like the Canada-Israeli agreement, though much smaller, are still important.
My concern is the lack of balance in the government's policy. While foreign trade amounts to about $160 billion a year, trade between provinces amounts to $146 billion a year. How often have we heard this government or the official opposition talk about the importance of removing the barriers to interprovincial trade? The balance is not there.
Our Prime Minister goes on world tours to places like China, Chile and so on. He makes a big show of signing contracts in other countries. When he does this it probably plays well to the folks back home. I acknowledge it is important for the Prime Minister to perform this function but again, where is the balance?
The Liberals in this government, in throne speeches, in budget speeches, in reports from committees-I could mention many different key documents which this government has presented in the House and outside of the House-have stated that it is a top priority to deal with the problem of internal trade barriers, barriers in trade between provinces.
Last year the finance committee released a prebudget report on interprovincial trade which stated: ``Trade in Canada must be placed on an equal footing with Canada-U.S. trade in terms of the free flow of goods and services''. I am sure the committee would have expanded this statement to include deals between Israel and Canada. Government members acknowledge that interprovincial trade should at least be placed on an equal footing with international trade. Unfortunately, their words do not coincide with their actions.
There was only one action the government did take. In 1994 it signed the agreement on internal trade. It was a start but many different sections of that agreement were to be completed later by set dates in the future. Not one of these targets has been met.
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While this government deals with agreements such as this to some extent, it has completely failed to do anything substantial to remove the barriers to interprovincial trade. Yet interprovincial trade amounts to almost as much as international trade. Where is the balance? It is important that that balance is restored.
The government, rather than follow the recommendations of its own throne speeches, its own budget speeches, has not treated with interprovincial trade with the kind of importance that it should have. As a result, some very unsettling situations are building in this country. We have, for example, the problem between Quebec and Newfoundland with the Churchill Falls hydro deal.
If the section on energy in the agreement on internal trade had been completed as was promised by the government, while it would not deal with the current Churchill Falls hydro contract, it certainly would allow the new lower Churchill Falls project, which is critical to the future development of Labrador and Newfoundland, to go through. I am not talking about renegotiating a current contract, I am talking about allowing the development of the lower Churchill Falls project, a brand new hydro contract, which would really help in the development of Newfoundland. It would provide much needed jobs not just from the development project itself but from the development of Voisey's Bay, for example, and other developments in Newfoundland down the road.
The neglect of this agreement has led to that kind of disaster. Quebecers are fair people. They are people of integrity. When they think of holding back Labrador and Newfoundland's development, the people of Quebec would not feel kindly about that. They want the best for Labrador and Newfoundland. That is just one of the areas that has been neglected. The balance is not there between internal trade and foreign trade.
Second is the dispute that has arisen between New Brunswick and British Columbia with the United Parcel Service workers moving to New Brunswick. If the agreement on internal trade had been completed on schedule and if the proper degree of importance had been placed on that deal, then this dispute would never have arisen.
If this dispute or another one had come up and a proper dispute settlement mechanism had been put in place then this dispute settlement mechanism could have dealt with this very serious problem, which actually threatens to take British Columbia out of the internal trade agreement altogether. That would be a very sad day for this country and for British Columbia.
The third major problem that has resulted from the lack of action on the part of the government in removing internal trade barriers is the dispute between Quebec and Ontario on moving labour and contracting back and forth between the two provinces. This dispute has been brewing and getting bigger and more threatening over the last few months. We saw sand, manure, other things dumped on bridges between Ontario and Quebec. Today, as I speak, a rally is being planned by the construction workers in Ottawa at the Delta Hotel-I am not sure about the location-and construction workers are not going to let this issue die. Ontario construction workers are concerned because while Quebec workers and contractors are allowed to freely come to Ontario, Ontario workers and contractors
are not allowed the same access to Quebec. I think it is very important for Quebecers to think about this situation.
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The government of Ontario is threatening very serious trade action which would restrict the movement of Quebec workers and contractors into the Ontario market. The Ontario legislature is seriously moving in the direction of putting up a wall so that trade will not go freely either way. That means Quebecers, many of whom are now working in Ontario, will be denied access to Ontario jobs.
Why has this very serious situation arisen? It is because of the lack of action on the part of the government to finish the agreement on internal trade and remove the barriers to interprovincial trade. There is no leadership from the government in this area.
What does this lack of leadership cost Canadians? According to the Fraser Institute and other think tanks, it costs Canadians between $6 billion and $10 billion a year in lost income. This is very serious. According to the Fraser Institute it costs the average Canadian family about $3,500 a year in lost income, all because the government has not put the priority on interprovincial trade that it has put on foreign trade.
Bills such as this one today are important. I acknowledge that. But why on earth not have a bill tomorrow which will deal with the barriers between provinces in a serious and substantial way? This is very important. It is so important that the Canadian Chamber of Commerce came out with a substantial report on this issue. It estimated that a 10 per cent increase in interprovincial trade would add 200,000 new jobs in Canada.
Instead of moving in that direction, within a couple of blocks of the House of Commons a rally is being planned by construction workers who are frustrated because the government has not taken the action it should have to remove barriers to free labour movement and to be able to conduct business openly and freely between provinces. This is a serious situation.
It really surprises me that the industry minister who is in charge of the agreement on internal trade has been completely silent while right in his own constituency in Ottawa, Ontario workers are being denied access to jobs across the river in Hull and Gatineau because of the barriers thrown up by Quebec. It is a sad situation.
There are Liberal members in the government who represent people in Hull and Gatineau. Why are they not speaking out on this issue? If they do not act very quickly and very soon, the Ontario government will close the border, build a wall and there will be no free movement of labour or business between Ontario and Quebec at all. It has come to the point where that decision could be made very soon. Where is the government in dealing with the problem right in its own backyard?
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The government should be ashamed. It has to focus on this. It has to look at the balance and the importance between interprovincial trade and international trade. It has to realize its importance to the Canadian economy are very similar, speak out on this issue, solve the problem that is being demonstrated very clearly right here in this city and finish the agreement on internal trade. It has to put in place a dispute settlement mechanism and at least give Canadians the same kind of freedom in doing business with another province as it has between Canada and other countries.
The sad reality for many business people in certain parts of the country is that they actually have easier and more open access to the United States than they do to other provinces. That is sad and action must be taken on this. It is very urgent right now because of the serious situations building across the country.
Pitting one province against another certainly does nothing to help national unity. Pitting Ontario against Quebec does nothing to help national unity. Pitting British Columbia against New Brunswick does nothing to help national unity. Pitting Quebec against Newfoundland and Labrador does nothing to help national unity.
Why has this issue of removing interprovincial trade barrier not been given the importance that it should be given? It is important to people in every single province in this country. It could mean a 10 per cent increase in interprovincial trade. According to the Canadian Chamber of Commerce it could mean 200,000 jobs or more, $3,500 added to each family household income, a $6 billion to $10 billion increase in income to Canadians. All of this could be achieved if the same importance were given to interprovincial trade as has been given to international trade and if these barriers are removed as quickly as possible.
I would like to more than encourage the government, I would like to push it, in particular the industry minister, to deal with the issue and allow the free movement of people, goods and services between provinces, and allow those 200,000 jobs to be added in Canada.
Mr. Paul Szabo (Mississauga South, Lib.): Mr. Speaker, I concur with the member that it is very important to deal with interprovincial trade matters. There are certainly some opportunities there but that is not the subject matter of the bill and it is not a bilateral agreement that we have with the provinces. We are talking here of a bilateral agreement and the speech was really not much
about the bill. If I may I would like to make a couple of comments about what bill this is and ask the member a question.
We are speaking on Bill C-61 put forward by the Minister for International Trade, an act to implement the Canada-Israel free trade agreement. In brief the main elements are: first, tariffs will be removed from industrial products of Canadian or Israeli origin beginning January 1, 1997; second, duty free access or low duties will be applied to a variety of agricultural and fisheries products exported to both countries; finally, to resolve any disputes under the agreement both countries have agreed to be governed by a binding dispute settlement process.
This bilateral trade agreement is extremely important to Canada. For many years Canada and Israel have had excellent relations based on shared values and strong political and social bonds. To give an idea of dimensions, in 1995 the two way trade exceeded $450 million, an increase of 37 per cent over 1994. Canadian exports totalled $216 million in 1995, up 49 per cent from 1994. In terms of the trade the other way, Canadian imports from Israel were worth $240.8 million in 1995, a 32 per cent increase on 1994. These are very significant.
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Earlier this day the member from Peace River gave a speech in which he developed a theme which has been coming along about how the government has been slow and why is this such a secretive process and how come this government has not made this an issue and why is it not in the forefront of what is going on.
The facts are that in November 1994 the leaders of Canada and Israel announced the opening of negotiations for this bilateral free trade agreement. On January 12, 1996 Canadian and Israeli officials reached a tentative agreement leading to the formal signing of a free trade agreement in Toronto, during the visit of the minister of industry and trade, of both the state of Israel and Canada.
The facts are that the government has proactively pursued bilateral trade agreements for the benefits of Canada. This government has done its job in this regard.
Does the hon. member not believe that if interprovincial trade within Canada is such an important issue that it would be more important for us now rather than to deal with partisan issues and to ignore the bill to move this bill forward quickly so this House would have more time to talk about further important initiatives? It is time to get the priorities straight. I ask the member, could he stop wasting the House's time and start dealing with the legislation before the House?
Mr. Benoit: Mr. Speaker, the member talked about the partisan use of time. If that was not just as partisan a statement as we could find, I would like to see the other one that comes close to matching it.
The day he calls the removal of interprovincial trade barriers a partisan issue it is a sad day in this House. It is an issue that affects
all Canadians. As I explained before, 200,000 jobs are lost because action has not been taken, six billion to ten billion dollars lost, $3,500 per family. In family week I would expect this member to acknowledge that and to accept that and to say yes, this is an important issue.
This agreement is an important agreement as well. We are supporting it. We are doing everything we can to push it along, so what he said is nonsense.
On the relative importance of this agreement, which involves $.5 billion in trade, to the agreement to internal trade, which involves $146 billion in trade, the comparison is pretty lopsided. The importance of removing the barriers through internal trade cannot be overstated. It is not a partisan issue. This member should not have presented it as that.
Mr. Szabo: Mr. Speaker, I want to challenge the member on his assertions. I did not comment or take away from the importance of interprovincial trade and trade barriers. It is not a bilateral situation, though. We have 10 provinces and 2 territories.
The member has twisted the facts. I reiterate my point to him. This bill before the House is a bilateral deal which is good for Canada. It provides a further model of how important bilateral agreements are and it will provide the basis for further trade opportunities for all Canadians.
I would again suggest to the member that the important thing to happen now is let us deal with this bill quickly so that we can have more time in this House to deal with very important matters like interprovincial trade agreements.
Mr. Benoit: Mr. Speaker, I am pleased that the hon. member did acknowledge the importance of removing these barriers to interprovincial trade. I just hope he can put some pressure on his industry minister and others in his government to deal with this issue.
The member said rightly that this is not a bilateral issue. In fact, interprovincial trade is a federal responsibility under sections 91, 92 and 121 of our Constitution. It is clearly the responsibility of the federal government to never allow interprovincial trade barriers to build in the first place and to remove them if they should.
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This obligation has been put aside by Liberal and Tory governments for over 125 years. We have all kinds of barriers to trade between provinces which are causing the problem that is developing in Ottawa and which are causing the problem between British Columbia and New Brunswick. These kinds of problems are threatening to tear our country apart.
If we are going to keep this country together we need economic harmony between the provinces. That can only come if the federal government stops neglecting its responsibility under the Canadian
Constitution. It must show leadership in this issue and remove barriers to interprovincial trade.
Mr. Charlie Penson (Peace River, Ref.): Mr. Speaker, I have a question for my colleague from Vegreville.
During his presentation there were comments from the Liberal side asking what his speech on internal trade barriers had to do with the Canada-Israeli free trade agreement. I suggest that it has everything to do with free trade agreements, bilateral and multilateral.
Our Standing Committee on Foreign Affairs and International Trade has done a study on why small and medium size businesses are not exporting. As a point of reference, about 100 companies in Canada are responsible for 80 per cent of our exports. It is a sad commentary that we are not allowing opportunities for small and medium size businesses to explore this very important growth area. One of the biggest reasons which those businesses give for not getting involved is they say they cannot build economies of scale in Canada because of the restrictive trade barriers within Canada. That is hurting their ability to get big enough to launch into the international trade area.
I would like to ask my colleague from Vegreville if he sees this as an important restriction on the ability of Canadian companies to get into the export market.
Mr. Benoit: Mr. Speaker, a very well known Canadian was asked a few weeks ago what was the single largest problem in dealing with international trade. This very prominent Canadian, the hon. member for Peace River who just asked the question, said that the single largest factor which is preventing Canadian business from doing business around the world is the lack of interprovincial free trade. The hon. member has already alluded to why that is.
Canadian companies, in some cases, need the ability to build. They have to get the economics of scale so they can compete on the world market. In many cases they cannot build when they are operating within one province. There are so many barriers to doing business in other provinces which prevent the growth that is needed in order for Canadian business people to succeed in international trade.
This is almost unbelievable. It has become so bad that I have had business people tell me it is easier for them to do business with some states in the United States than it is with other provinces. Some of them say: ``We are moving out. We do not want to move out. We love this country. But we are moving out of this country because if we do business in the United States then we have free access to all Canadian provinces and we do not have to jump through all the hoops which we would be required to if we were doing business with the provinces from within a Canadian province''. That is a sad commentary, but it is the truth.
Mr. Herb Grubel (Capilano-Howe Sound, Ref.): Mr. Speaker, I rise to support my colleagues and the government in passing this bill. I believe it will increase trade between the two countries and generally will serve the interests of both the people of Israel and the people of Canada.
However, I wish to deal with two objections which are normally raised whenever there are bilateral agreements between states or when there are agreements for regional free trade.
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The first of these objections is that it diverts resources away from the pursuit of overall free trade. This is true enough. No government has infinite availability of experts to engage in trade negotiations. It would in my judgment be the best of all possible worlds if all trade barriers between all countries were removed.
However, generally I believe that the two targets of pursuing both bilateral trade barrier reductions and universal reductions in trade are not mutually exclusive. Therefore, while I would in a perfect world rather have completely free trade, I am satisfied that the negotiations of the Israel-Canada free trade agreement have not slowed down progress on obtaining completely free trade throughout the world through negotiations at the World Trade Organization.
However, there is a very interesting and important other objection that is often raised to bilateral agreements. It arose in the post-war years when the club of Rome led to the integration of the European economies. It involved a very subtle but interesting counter intuitive argument.
If free trade is good then is it possible that free trade between just two countries or within a region might in fact be bad and reduce world output and welfare? This is a strange puzzle, one when it was first developed by Jacob Viner in the 1930s. It almost threatened to paralyze all economic research. Here we have a world full of regulations, tariffs, domestic regulations and taxes, all of which are distorting the free allocation and the efficient allocation of resources as they would be in a completely free economy. Yet people thought for a long time that if we could go slowly in the reduction of such barriers, one at a time, by ultimately moving toward a completely free economy we would therefore be on a progressive movement toward increasing the efficiency of allocation of resources and therefore living standards of people in the world.
However, as Viner pointed out, that is not necessarily so. This was his argument. He framed it in the context of trade between two European countries but I will do it for the case of Israel. Let us assume for a moment that right now the tariffs facing imports into Israel both from Morocco and from Canada are the same and as a result, because Morocco is the cheapest producer of this product, trade is now taking place from Morocco importing into Israel and Canada is left out. Let us now consider that when the tariff barrier on that product comes down only on trade between Canada and
Israel, it is possible that the imports from Morocco are replaced by imports from Canada into Israel.
By definition, if previously when they both faced the same tariff barriers, the production of that product in Morocco was the least cost production location, the one which served the world best because Israel got its product at the lowest price, therefore shifting the production to Canada would mean a loss in productive efficiency for the world. This is called trade diversion. It is a negative aspect of moving in this world the way Canada did with Israel by reducing trade barriers through bilateral agreement.
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Of course, there is another side to it. It can also be that the reduction in the tariff barrier means that now the production will be taking place between Israel and Canada, whereas before only Israel was producing the product. There were no imports at all.
To repeat, the alternative is the lowering of the tariff barrier and will result in the creation of trade between Canada and Israel, trade which previously did not exist. By definition again, the product that used to be produced at high cost behind the tariff barriers in Israel will now be produced at a much lower cost in Canada and shipped to Israel. That is what the free market says is done.
We face an empirical question: Are the benefits from trade creation greater or smaller than the benefits from trade diversion? It is not clear on purely logical grounds which of these effects will dominate.
We can see why in the presence of such a puzzle in the post war years economists were very upset. Logically, they could not say anything any more about the benefits of any form of deregulation, like the removal of tariff barriers, unless they had the empirical evidence on how much more trouble was created rather than the benefits that were created.
It turns out in an examination of the experience of the European Economic Community, trade creation by far outweighed trade diversion.
One of my students at Simon Fraser University wrote his doctoral dissertation on asking whether the Government of Pakistan had a net benefit from the greater growth that took place in Europe as a result of unification of the common market, the removal of tariff barriers between Germany and France and Italy, than it had because some of its exports to Germany were replaced by exports that previously were taken from France.
A careful study of trade patterns has shown that typically, trade creation outweighs trade diversion. I am personally convinced that
this will be the case with Israel as it has been in Europe and almost any other country that has been studied.
This effect is especially strong if at the same time the removal of the barriers takes place, trade is created and wealth increases. As countries get richer because of the more efficient allocation of resources, they will trade more. This dynamic effect, as it is called, of trade creation provides benefits that empirically have far outweighed the effects of trade diversion.
Nevertheless, in my own mind there remain some problems. I raised them with the people from the Department of Foreign Affairs when they briefed us on this bill. There have to be very tedious provisions for certification of the origin of goods that are being traded.
For example, since there is free trade between Israel and Canada but not between Pakistan and Canada, it is possible that Israel could lend itself simply to taking products produced in Pakistan that are transshipped through Israel and then, as a result of that, are moved into Canada without having to face trade restrictions that we as a country have imposed on Pakistan. Personally I think we are so rich that we should remove them all.
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We have to face the fact that in the wisdom of this House many years ago, some barriers were put up to trade with Pakistan. We must somehow ensure they are maintained and are not circumvented in a surreptitious way through the use of Israel as a base to ship. As a result, there needs to be a bureaucratic mechanism to assure Canada that all the products exported from Israel to Canada are Israeli products.
That sounds fairly easy but the question is: What if a shirt comes from Pakistan but it has no buttons and no buttonholes and an Israeli factory makes the buttonholes, attaches the buttons and packages the shirt? Is it now a Pakistani product, or is it an Israeli product? This is one of the issues. Strict rules have to be put in place, which are thought through, codified and enforced, as to what level of value added in a country makes it okay to call the shirt an Israeli product rather than a Pakistani product.
We can see how complex all of this is. Some products may be coming from Europe. Complicated products may contain not just Pakistani input but German input, and we have free trade with Germany. There are all of those issues. One of the fears of people who oppose bilateral free trade is that the amount of bureaucracy with enforcement mechanisms and dispute resolution mechanisms is very costly indeed.
What we really need is to remove these discriminatory tariffs as they now exist where we give concessions to Israel but not to
Pakistan. If we had given our benefit of free trade on these products to Pakistan as well, this problem never would have arisen.
After looking at the evidence on all of those matters, I have concerns over the growth of bureaucratic enforcement mechanisms throughout the world, as Canada has bilateral agreements not just with Israel but also with the European Community and Latin American countries such as Chile and with NAFTA. It is becoming a bureaucratic nightmare.
There are certain influential professions which have very good lobbyists that benefit from all of this. They are the lawyers. They are the organizations that certify this is the right kind of origin, that this is okay. They will completely oppose free trade and say to go ahead with bilateral free trade.
I will discount arguments of this sort and suggest that we should continue to push along with as many bilateral free trade agreements as we can obtain. When we are through and have a bilateral agreement with every country, maybe then the time will come to say: Why maintain anything at all? Let us move to total free trade. That is my hope and this agreement is a step in that direction.
Mr. Jim Silye (Calgary Centre, Ref.): Mr. Speaker, I would like to ask my colleague from Capilano-Howe Sound since he is an economist, what would some of the economic benefits be of applying the global model on free trade to interprovincial trade? In his speech, the hon. member for Vegreville mentioned protectionism from province to province, job creation and the value of eliminating barriers to interprovincial trade. Could the member enlighten me on this issue?
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Mr. Grubel: Mr. Speaker, this is an excellent question. It is absolutely ludicrous that it is advantageous for a Canadian producer to set up shop abroad in order to have more ready, cheaper access to the complete Canadian market than it is if the same producer were located in Ontario or British Columbia. It is a scandal. I do not see where it is in the interests of anyone in Canada to encourage companies to do that.
We must get together and realize that everyone is losing. If a company in Ontario which specializes in the production of a good and can produce it really cheaply and sell it at a low price to a government in Quebec, we are all better off when this takes place rather than when a producer in Quebec which produces at a much higher cost gets to supply the government with that product. Why? Because we know there are also producers of specialized products in Quebec that can produce more cheaply than anybody in Ontario. So when the Ontario government wishes to buy that product, it too will then be required to buy the cheapest, not just from the local producer in Ontario.
Both Ontario and Quebec residents would be better off because the products consumed by the government of those regions in most cases would get the product at a lower cost. The employment effects in one province would be matched by the employment effects in the other province.
Why this simple idea has not penetrated the minds of politicians in Canada is beyond me, even though I have sat here now for three years and talked to politicians.
The Deputy Speaker: The member has magical powers that only an economist has.
Mr. John Bryden (Hamilton-Wentworth, Lib.): Mr. Speaker, does the member for Capilano-Howe Sound think that another country's current track record on human rights violations should have any bearing on the timing of Canada's signing of a free trade agreement?
Mr. Grubel: Mr. Speaker, my training is in economics. I must say that many other arguments are always advanced on why the principle of free trade should be violated. It is not just human rights. There are all kinds of other considerations. We hear in this Chamber all the time that we must protect our culture. The list is very long. I have always been very, very skeptical of the merit of such arguments.
We heard this same government say that we should trade with Cuba because the only way to stop its dictator, its gross violator of human rights from carrying out his crimes is to open up the society through trade, increased exchanges.
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The Americans of course are criticized heavily for saying it has not worked and it will not work. The only thing that Castro will understand is if he gets hurt in the pocketbook. Who is right? I do not know. I have sat listening to American senators and congressmen for hours on either side making very telling arguments. And because of my difficulty of being able to make these judgments and quantify them, I would say let us go for free trade and let the chips fall on the other issues.
[Translation]
Mr. Pierre de Savoye (Portneuf, BQ): Mr. Speaker, it is always with great pleasure and interest that I listen to economic statements by my hon. colleague for Capilano-Howe Sound. A moment ago, I appreciated the way he explained that trade should be based on the most attractive price for the consumer. He said: ``If the price is lower in Quebec, the Ontario government should buy from Quebec, and vice versa''.
The question I want to ask him is: With the advent of a sovereign Quebec, would he maintain the same position?
[English]
Mr. Grubel: Mr. Speaker, I may not be right all the time but I am consistent. On issues like that I like to be consistent, of course.
In my own judgment the best thing that Quebec can do is move from its rather socialist current program to where the role of government in Quebec is much smaller. If I were asked I would say if Quebec tomorrow turned itself into the Hong Kong of North America, welfare would shoot up enormously.
Imagine having a much lower tax rate because your services are much smaller. Imagine having the lowest corporate tax rate in North America. You would have so much capital flowing in wanting to pay these low tax rates you would have higher revenue than you have at the current rate. On top of that you would have huge employment effects from all of them.
My problem is that I am not worried about Canada erecting trade barriers to Quebec if it chose to be stupid enough to choose sovereignty; what worries me is from the evidence that I have seen coming from the French tradition of dirigisme from the French tradition of big government, everything can be engineered to the perfect world.
I am not optimistic that Quebec will choose to move in the direction of being the Hong Kong of North America. I am worried that Quebec will choose to be more like the Albania of North America, and that saddens and worries me a great deal.
Mr. Jim Silye (Calgary Centre, Ref.): Mr. Speaker, coming from Calgary, I believe in a market driven economy. I believe in free enterprise. I believe in the law of supply and demand.
However, there are a lot of provinces in our confederation that appear to favour supply management and supply management tariffs. Would the member please outline for me what the argument is by these provinces that believe in supply management tariffs and supply management in protecting and preserving these rather than eliminating these. What is the argument in keeping it and is it hurting or helping Canadians?
The Deputy Speaker: The hon. member for Capilano-Howe Sound, briefly.
Mr. Grubel: I have only a minute?
The Deputy Speaker: The member is a good economist and I am sure he can do this in a minute and a half.
Mr. Grubel I have one choice. I can just refer my distinguished colleagues to a little booklet I have published on this subject which I was told has been used in undergraduate courses in this country. It has put me in a lot of trouble with those interest groups that believe that marketing boards are good for the consumer. That is, at any rate, their line.
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I just cannot believe that a system increases the value of farms and quotas to such an extent that it is now more costly to buy the right to sell milk at an inflated price than it costs to buy the land, the farm and the animals. There is something very wrong.
The Deputy Speaker: Is the House ready for the question?
Some hon. members: Question.
The Deputy Speaker: Is it the pleasure of the House to adopt the motion?
Some hon. members: Agreed.
An hon. member: On division.
(Motion agreed to, bill read the second time and referred to a committee.)
Motion No. 1 will be debated and voted on.
I will now put Motion No. 1 to the House.
Motion No. 1
That Bill C-5, in Clause 104, be amended by replacing lines 32 to 39 on page 62 with the following:
``104. Section 177 of the Act is repealed.''He said: Mr. Speaker, I am very pleased to speak today on this piece of legislation to amend the Bankruptcy and Insolvency Act, and specifically on the clause relating to student loans. In fact, this is why I decided to wear the crest of the university closest to my riding, the Université du Québec à Chicoutimi, which is located in the riding of my colleague from Chicoutimi.
When an individual declares bankruptcy, the court usually makes an order of discharge, which releases the individual from all claims or, in other words, from his or her debts. However, section 178, appendix I, provides for six claims that are not released from
by an order of discharge. The bankrupt is thus required to pay off his or her debts in spite of his or her bankruptcy.
Clause 105 of the bill adds a paragraph to section 178 of the Act that stipulates that any debt or obligation in respect of a loan made under a federal or provincial student loans act cannot be discharged if the bankruptcy occurred before the date on which the bankrupt ceased to be a student or within two years after the date on which the bankrupt ceased to be a student.
Everybody knows that it costs a lot of money to go to college or university. The costs are constantly going up, year after year. Students have to work and get a summer job. That is fine, except that some students have trouble making both ends meet, and, at times, this is almost impossible. They cannot repay their student loans, which may reach around $30,000, or even higher for the students who are from remote areas and have to move to Montreal, for instance, to study and have to pay for an apartment, over and above their tuition fees. All of this costs a lot of money.
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When there is no other way out, a student has the right, like any individual or small business in this country, to go bankrupt. However, this new bill says that they will no longer be able to do so.
Some people may say: ``Of course, students go to university, spend years studying and then, when the time comes to pay back their student loans, they can look at all their debts and decide to go bankrupt. And then, the government has to foot the bill''.
Of course, some may think that, but I have personally met with members of student associations from Quebec, who told me this is not so. Going bankrupt is not an option for them. You cannot think that you can snap your fingers and all your student loans will have disappeared. This is a very sensitive issue. Yes, there may have some abuse in some areas, like anywhere else, but I think this is a sensitive issue, because what we are talking about here is education and that, to me, is not an expense for our country, or should I say for both our countries, but rather an investment. But I do agree that it is expensive.
This bill raises some concerns. Could it lead some students to be afraid of attending post-secondary institutions? One has to wonder about that, especially since ten years ago students had the right to go bankrupt, that is obvious. But then, the situation back then was different. After graduating from university, it was much easier for students to find a job and therefore to repay their loans.
According to the government, there are much too many bankruptcies today. These are not voluntary; people have no choice. Most of the time, young people go bankrupt because they cannot make both ends meet. Thus, it is rather a pity to look at the situation this way.
Furthermore, we know there was some disagreement in the task force, in particular concerning the special immunity for student debts and its possible effect on access to higher education, as I mentioned earlier.
So, why am I against the government's proposal? Clearly, the government went along with the task force's proposal without asking itself what really was behind this change. For the government, mere fiscal considerations took precedence over the logic of the proposal.
Is education an expense or an investment? Sure, when we promise to cut the deficit, we have to make all kinds of cuts, I agree, but cutting funding for education may not necessarily have a negative impact now and allow us to boast, a couple of years from now, that we have reduced the deficit. However, I worry-and this is quite legitimate at my age-about possible negative effects in the long run, since education is a long term investment.
Moreover, I think this proposal is discriminatory. The government gives special treatment to student debts, which it does not do for other similar categories of debts owed to the government. Section 178 of the act lists other categories of debts that cannot be released by an order of discharge.
However, these other categories apply to people such as defrauders, convicted offenders who have to pay a fine, people who default on their alimony payments, people who obtained property under false pretences, and now the government is adding students to that list. Wow! This is putting students who, I think, are the future of our nation in the same boat with convicted offenders and people who default on their alimony payments.
The government is including students in the same category as these people who break the law and who do not respect court orders. Treating students like this is totally unacceptable and discriminatory.
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Moreover, this proposal was made without a careful study of the situation. All the government did was look at the figures and say: ``The student bankruptcy rate is increasing and it must be because of abuse. Therefore, we will take away their right to declare bankruptcy''. It did not take a close look at what is really going on and did not take the economic climate into account.
Some blamed students, saying that they party a lot, they travel, etc. Not all students do that. Yes, some students are well off, they use their parents' car to go to school and have no problem at all going to university. But what concerns me is those who are not in that situation and who will be affected by this bill. It is thought that there are abuses, so it is decided to cut assistance to students, but there has been no study or survey to look at what prompts students or graduates to declare bankruptcy.
Given the rate of unemployment and the economic difficulties facing young people, it is somewhat cynical to claim that students are deliberately declaring bankruptcy. Therefore, in the absence of a serious study of the reasons why students or those who have just completed their studies declare bankruptcy, it is completely irresponsible to introduce a discriminatory, unfair and inequitable measure on the mere strength of an increase in the number of bankruptcies among those with student loans.
Furthermore, this increase is probably due to the poor economic situation in which young people find themselves, to the high rate of unemployment they are experiencing and to increases in tuition fees that are not unrelated to federal government cuts. Members will recall the Axworthy reform. I took part in a march to protest these measures. All this is having the repercussions we see.
I could also speak about the last question I put to the Minister of Human Resources Development about the Young Canada Works Program. There were $60 million remaining and the government did not seem to know where, to spend them is not how I should put it, but to invest them. This is what makes me wonder today.
It is in light of these facts that we have moved the amendment to eliminate this paragraph. I hope that the government will not turn a deaf ear and that it will keep one foot in reality. We have been told that a university education is an investment in our future that will lead to a job. I would agree that that is still the case and I recommend it. But the good old days are gone, and now that the economic situation is worse, we are making it harder for students.
We will therefore vote against this bill, unless our amendment is carried.
[English]
Mr. Morris Bodnar (Parliamentary Secretary to Minister of Industry, Minister for the Atlantic Canada Opportunities Agency and Minister of Western Economic Diversification, Lib.): Mr. Speaker, the hon. member raised some interesting points on this motion. In particular, he spoke about the bankruptcy of students and the problems that arise in the student population. The government is well aware of the financing which students get during the time it takes them to get a university degree. Many times students spend large sums of money to get university degrees.
However, once a student gets the degree, that is not the time for the student to automatically declare bankruptcy to wipe out the loan. There is a grace period for the first six months after the student leaves university. No payment has to be made. After that first six months, if the student is not in a financial position to make payments and meets the criteria of the legislation, the student can get an extension of that grace period for another 18 months, making it a full two years that a student does not have to make payments on the student loan.
Statistics show that 70 per cent of students who go bankrupt do so during that first two-year period. They are going bankrupt during a period when there is no financial pressure on students to pay back. They have a six-month period of grace and they can get a further 18-month extension.
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The argument of the hon. member is quite fallacious. He is saying that students are having difficulties in the first two years after completing studies or leaving university. It is not a wilful abuse by the students. However one has to question declaring bankruptcy during a period of time when there is not a requirement for making payments. It is for that reason we have a two-year period that is required before a student can go through bankruptcy. That is why it has been structured as such in the legislation.
The hon. member stated that the government must remain connected to reality. That is exactly what we have done. The reality is that students should not be going through bankruptcy and declaring their student loans in a bankruptcy if there is no financial pressure on students to do this. There is no requirement for them to make the payments during the first two-year period. Their going through bankruptcy is really not reality. We are bringing this matter back into reality.
It is interesting to note that the opposition to this portion of the bill has not been raised by the students, it has been raised by the hon. member opposite. The students have not been opposed to the two-year period and have not raised opposition at the committee level to this requirement.
I believe many students realize that there is reality. Students realize they have obligations. Many of them who graduate from university have one of the finest assets that can be had. The asset is a degree. It is a ticket to other employment. Allowing them to automatically be able to wipe out such a debt when there is not pressure on them would be grossly unfair.
As well, the amendment would repeal section 177 of the act. It deals with fraudulent marriage contract settlements as being grounds where the court can refuse to discharge a bankrupt individual. Let me read a portion of section 177: ``If the debtor becomes bankrupt and it appears to the court that the settlement, et cetera, was made in order to defeat or delay his creditors, the court may refuse or suspend an order of discharge or grant an order subject to conditions in like manner as in cases where the bankrupt has been guilty of fraud''.
Surely the hon. member does not want this portion of the legislation to be wiped out. Surely the courts should be allowed, when there are such fraudulent actions, to be able to defeat such
individuals from trying to take this action and prevent them from defeating or delaying creditors who have legitimate claims.
The hon. member's motion would repeal this condition. It would be grossly unfair if a debtor could become bankrupt but has made a fraudulent arrangement in a marriage settlement just to defeat creditors. This is not what we want to see in bankruptcy legislation. This is not what we want to see in our laws.
This legislation will prevent that from happening. It will prevent fraudulent actions such as this. As well, the bankruptcy legislation will prevent students who are not under financial pressure from going into bankruptcy during the first two years.
I should not put it that broadly because students can go into bankruptcy within the first two years. They would just not be able to declare the student loan as part of the bankruptcy. They may have other debts, and that is fine. They can deal with those but not with the student loan itself.
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For the reasons I have indicated in dealing with the fraudulent marriage contract settlements and the provision in section 177 that would allow courts to not allow such settlements and for the reasons dealing with the student loans which I have indicated to the House, the government is opposed to this motion. It is the government position that this motion is fallacious and should not be passed.
Mr. Philip Mayfield (Cariboo-Chilcotin, Ref.): Mr. Speaker, I believe I am in need of a reality check here this morning.
The Bloc Quebecois brings in an amendment to deal with fraudulent use of marriage and then the first speech is on student loans and student bankruptcies. The amendment tabled dealing with the Bankruptcy and Insolvency Act, the Creditors Arrangement Act and the Income Tax Act, as the hon. parliamentary secretary mentioned, deals with the fraudulent representation of marriage. The amendment proposes that Bill C-5 repeal section 177 of the Bankruptcy and Insolvency Act.
Reform opposes this Bloc amendment. Before I discuss why we oppose it, I believe it is important for the House to understand the purpose of section 177 of the Bankruptcy and Insolvency Act. Section 177 sets out two situations that could result in a court refusing, suspending or granting a conditional discharge from bankruptcy.
These situations are: first, where the bankrupt made a settlement before or in consideration of marriage and at the time of making the settlement he or she was unable to pay all of his or her debts without the use of the property involved in the settlement; second, where the bankrupt made a covenant or a contract in consideration of marriage for the future settlement of property that would and should be available as security for creditors.
Where it appears to the court that this type of settlement, covenant or contract was made to defeat or delay creditors or was unjustifiable at the time it was made because of the poor financial state of the debtor, the court can refuse, suspend or order a conditional discharge.
This seems entirely appropriate to me. If section 177 is repealed, the door is left open for people to commit fraud, to play fast and loose with their creditors. In fact, are we not saying if section 177 is repealed that fraudulent behaviour is okay, that our society accepts this kind of behaviour.
I do not think anyone would agree that tolerating this kind of behaviour is a good idea. Fraud is a crime. I believe that the legislation should more and more point to the open and straightforward method of doing business that all people understand, appreciate and can live with.
Prevention of fraud can be insured through deterrence. Deterrence keeps this kind of activity from occurring when potential offenders, considering the consequences, decide that to honour their obligations is the best course of action to follow.
Section 177 of the Bankruptcy and Insolvency Act provides a deterrence against those who would unfairly short change their creditors under the circumstances outlined in this section of the act. People should not be using marriage as a means to avoid creditors. Section 177 is consistent with other sections of the Bankruptcy and Insolvency Act dealing with transactions that take place prior to bankruptcy.
For example, section 91(1) of the Bankruptcy and Insolvency Act provides that any settlement of property that takes place within a year before a bankruptcy is still open to the trustee. Section 91(2) provides that any settlement that takes place within five years before a bankruptcy is void if the trustee can prove that the settler required the property included in the settlement to pay his or her debts at the time of making that settlement.
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These measures along with section 177 are designed to deal with situations where debtors transfer property to defeat or delay or defraud their creditors.
If we eliminate section 177 of the BIA, what does it say about these other sections of the act as well? It really creates a double standard. It seems to me that what we are saying here is use marriage as a means to unfairly shelter assets from bankruptcy. But it cannot be done under the circumstances outlined in sections 91(1) or 91(2).
Section 177 is needed to safeguard against people using marriage inappropriately to commit fraud. It is also needed to protect
the standard that says no fraud under any circumstances will be tolerated. Section 177, however, does leave the court discretion. The courts may decide.
As members of the House and particularly of the Industry committee will know, I am one of the people who believe that our legislation should not always leave discretion to the minister, to the superintendent of bankruptcies. I would like to see these sections tightened up. But the committee of the House has decided against that. However, I am in favour of this discretionary aspect of section 177.
There are circumstances where the court may decide that what the debtor has done is entirely fair, but this discretion should be left with the courts and section 177 should remain.
The Deputy Speaker: Is the House ready for the question?
Some hon. members: Question.
The Deputy Speaker: Is it the pleasure of the House to adopt the motion?
Some hon. members: Agreed.
Some hon. members: No.
The Deputy Speaker: All those in favour of the motion will please say yea.
Some hon. members: Yea.
The Deputy Speaker: All those opposed will please say nay.
Some hon. members: Nay.
The Deputy Speaker: In my opinion the nays have it.
And more than five members having risen:
The Deputy Speaker: Call in the members.
Ms. Catterall: Mr. Speaker, I ask that the vote be deferred until Monday when the House returns at the end of Government Orders.
The Deputy Speaker: The vote is deferred until Monday when the House returns after the expiry of government business.
[Translation]
Mr. Laurin: Mr. Speaker, we agree, except that it cannot be deferred until two days later; I believe it needs to be quite simply deferred until the next sitting of the House.
[English]
The Deputy Speaker: If the member discusses this with his colleague, I am sure there will not be a problem.
[Translation]
It can be done promptly.
[English]
For the record, I believe it is agreeable to one and all that this matter be deferred until Monday, October 21, when the House resumes.
September 19, 1996-The Minister of Agriculture and Agri-Food-Second reading and reference to the Standing Committee on Agriculture and Agri-Food of Bill C-60, an act to establish the Canadian food inspection agency and to repeal and amend other acts as a consequence.Hon. Douglas Peters (for the Minister of Agriculture and Agri-Food, Lib.) moved:
That Bill C-60, an act to establish the Canadian food inspection agency and to repeal certain and amend other acts as a consequence, be referred forthwith to the Standing Committee on Agriculture and Agri-Food.(1305 )
Mr. Jerry Pickard (Parliamentary Secretary to Minister of Agriculture and Agri-Food, Lib.): Mr. Speaker, I am very pleased to speak on Bill C-60, the Canadian food inspection agency act.
The creation of this agency is a good example of the government's commitment to better service for Canadians, food safety and that quality remains a top priority for Canadians.
An integrated approach at the federal level, as provided by this new bill, will improve our overall efficiency and effectiveness. Canada enjoys the enviable international reputation for excellence in producing and supplying some of the safest and highest quality food products in the world. A major pillar of that reputation is our stringent world class inspection and quarantine service.
However, mounting pressures including increased imports, changing export markets, new technologies, higher rates of production and continuing fiscal restraints are demanding new ways of delivering food inspection and animal and plant health programs that are more efficient, more scientific and more internationally compatible.
Today one-quarter of Canada's food production goes for export while one-fifth of the food we eat is imported. As part of our responsibility for ensuring a safe food supply for Canadians, we are involved in more than 1,000 inspection and quarantine agreements worldwide.
Here in Canada an integral network of responsibilities has developed over the years covering food production, manufacturing, distribution, retail, import and export and involving industry at all levels and government.
At the federal level, three different departments have roles to play, Agriculture and Agri-Food Canada, Health Canada and
Fisheries and Oceans Canada. The introduction of this bill represents an innovative step forward by the Canadian government in its desire to get things right.
As the Minister of Finance announced in the 1996 budget, Bill C-60 proposes the creation of a Canadian food inspection agency to be responsible for delivering and enforcing all federally mandated inspection and quarantine services and animal and plant health programs.
The agency, which could be up and running by early 1997, will be a stand alone organization reporting to the Minister of Agriculture and Agri-Food. At the same time, responsibility for setting food safety standards and auditing the enforcement of food safety regulations will be consolidated and enhanced within Health Canada. This re-organization will have many benefits for all stakeholders in the food sector, consumers, industry and governments.
It will reduce overlap and duplication between the federal departments and set the stage for a more integrated Canadian food inspection and quarantine service. It will provide a single focal point for food inspection and quarantine services and help make the government more responsive to the needs of its clients. It will ensure the continued safety of Canada's food supply and help maintain our international reputation for safety and quality. It will facilitate the use of more efficient and up to date food inspection and quarantine technologies, and it will help lay the foundation for enhanced Canadian access to critical import international marketplace.
Federal food inspection services and animal and plant health programs currently involve over 5,000 people and cost more than $400 million a year. Consolidating these services in a single agency will allow us to achieve savings of $44 million annually and will make it easier for the industry, the provinces and the consumers to deal with the Government of Canada on food inspect and quarantine matters.
Let me underline that food safety will continue to be our top priority. In fact, the fundamental principle of this re-organization is that food safety cannot and will not be compromised. This means that Canadians will be assured of continuing high safety standards and stringent enforcement of our food safety regulations.
At the same time, the new agency will bring a more unified approach to enforcement of federal food inspection and quarantine regulations across this country. The agency will also help Canadian food firms implement a hazard analysis and a critical control point for the HACCP system.
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Canada is a world leader in the implementation of HACCP which is internationally recognized as the best system available to ensure the safety of food products. Our department has $11 million in adaptation funding to help small and medium size businesses adapt to the system.
By continuing under the new agency to move to more scientific and updated systems such as HACCP we will achieve greater assurance of food safety for Canadians and improve international market access for Canadian businesses. That market access is another very important benefit of the new agency.
With more liberal trading agreements such as NAFTA and the World Trade Organization as well as rapid population and income growth in developing regions like Asia Pacific, international trade in all food products is booming. The Canadian food inspection agency will ensure that exporters of different types of food products will be able to deal with one contact for inspection and quarantine services.
By moving forward with harmonization of international standards the agency will help improve the compatibility of food inspection and quarantine requirements and reduce the possibility of artificial trade barriers based on sanitary and phyto-sanitary measures, an increasing problem for Canadian exporters.
These changes in the federal food inspection and quarantine services are the result of two years of extensive consultations with industry and the provinces. Over 60,000 newsletters and fact sheets have been distributed to stakeholders around the country. The proposed agency has received widespread support from the private sector and provinces.
At our annual meeting in July, federal, provincial and territorial agriculture ministers not only offered unanimous support for the Canadian food inspection agency, they also endorsed further development of a more comprehensive Canadian food inspection system that would involve all levels of government and which would respect appropriate governmental jurisdictions.
A Canadian food inspection system implementation group of federal, provincial, territorial and municipal representatives is now working with the industry in a variety of other areas which include the national dairy code, a food retail established code, a meat, poultry and fish code, and a transportation practices protocol.
The drive toward a Canadian food inspection system, one of eight initiatives to improve and strengthen the efficiency of our Canadian federation, was highlighted by the first ministers last June as the leading example of how we are renewing the Canadian federation and improving the way that provinces and the Canadian government work together in the best interests of all citizens.
As we continue to move forward on the long overdue reorganization of Canada's food inspection and quarantine services, our challenge and our commitment is to ensure that Canada maintains
its high standards of food safety and quality while improving the efficiency and reducing the cost to the taxpayer.
I believe the creation of the Canadian food inspection agency will be a major step in that direction.
[Translation]
Mr. Jean-Guy Chrétien (Frontenac, BQ): Mr. Speaker, there are certain positive elements in Bill C-60, an act to establish the Canadian Food Inspection Agency and to repeal and amend other Acts as a consequence, which we are looking at this afternoon.
The idea of creating a national agency is a good one in itself. Reducing the duplication in services of the three departments, Agriculture and Agri-Food Canada, Health Canada and Fisheries and Oceans Canada will bring about savings.
We in the Bloc have long been calling for elimination of the duplication between the various departments. However, the Liberals' strategy of referring this bill to a committee before second reading prevents us from making any constructive amendments to Bill C-60 at this point.
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For instance, there seems to be some latent patronage with respect to the appointment of agency executives. Under clause 5, the president and the executive vice-president shall be appointed by the governor in council.
We all know what it means when someone is appointed by the governor in council. These are friends of the government, like former minister André Ouellet, for instance, and we can refer to him by name since he has left the House, who was appointed to an executive position with a fantastic salary. The process is not exactly transparent.
Appointments should be made in accordance with the rules of the House and should be examined before the Committee on Agriculture and Agri-Food. Staff should be hired on the basis of competence, not on a partisan basis. Just because someone is a card-carrying member of the Liberal Party does not mean he is competent. Of course, just because someone is a card-carrying member does not mean he is incompetent, but being a member of the party should not be a conditio sine qua non.
So the Bloc Quebecois cannot give its approval to what is, in fact, an opportunity for patronage, because it would also mean approving of government interference in areas under provincial jurisdiction.
Still on the subject of political appointments, we can read the following in clause 10 of Bill C-60:
10.(1) The Minister shall appoint an advisory board of not more than twelve members to hold office during pleasure for a term not exceeding three years.Again, this is unacceptable, for two reasons. First, here again it is the minister who appoints those who will sit on the advisory board. Second, this means that Quebec has no guarantees as to its representation on this board.
A little further we read in clauses 12 and 13:
12. The Agency is a separate employer under the Public Service Staff Relations Act.However, in clause 13, it says:
13.(1) The President has the authority to appoint the employees of the Agency.Now, the president is appointed on a partisan basis, and he is supposed to appoint the employees of the agency. We will have to see how these appointments are made and whether the process is politically proper.
In clause 16, we read that the agency may procure goods and services from outside the public service, including legal services.
Of course these bills are drafted by lawyers, and a good lawyer looks after his own. So the agency will be able to procure legal services as it sees fit.
In clauses 20 and 21 there are two more issues we could raise. First, if federal agreements are entered into, we must ensure that Quebec does not end up in a position where it indirectly subsidizes the food inspection services obtained from the federal government by a province or provinces.
If a service is provided to another province by the federal government, it will be necessary to ensure that the work done in this province is not done with federal money. Otherwise, Quebec taxpayers will be paying for services in other provinces.
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Two examples come to mind, including the RCMP. Everyone knows that, in Canada, two provinces-Quebec and Ontario-have their own police force: the OPP in Ontario and the SQ in Quebec, while the federal government, through the RCMP, provides police services to municipalities and also to other provinces. Well, do you know, dear colleagues, that Quebec foots part of the bill for the services rendered by the RCMP in the maritimes and in the western provinces? Ontario does also.
The federal government recovers only about 75 per cent of the real costs of the services provided, through the RCMP, to provinces and municipalities. The other 25 per cent are paid by all the provinces, including, of course, Quebec and Ontario. Since Quebec pays 24 per cent of federal taxes, it can be assumed that, we are subsidizing 24 per cent of that 25 per cent for RCMP services in provinces and territories other than Quebec and Ontario. This is an example of unfair treatment.
Similarly, Quebec, which harmonized its sales tax with the federal GST four years ago, must again pay 24 per cent of the $960 million which the federal government gave to the maritimes so they could harmonize their provincial sales tax with the GST, while we got nothing. We did not get a cent to harmonize our sales tax with the GST.
Those are two examples of unfair treatment. This agency should not be a further source of unfairness.
Secondly, care must be taken to ensure that clause 71 does not open the door to any other form of federal interference in areas under provincial jurisdiction. The Canadian Federation of Agriculture said, and I quote: ``Bill C-60 states that the compensation to be paid to cattle owners following the destruction of their animals or things under the Health of Animals Act must be taken from the Consolidated Revenue Fund''.
For example, if your herd is hit by brucellosis and a decision is made to destroy the whole herd, the Consolidated Revenue Fund must compensate the loss. The CFA goes even farther, considering that the cost incurred for cure, quarantine, cleaning and replacement of damaged or destroyed goods, restocking, etc., should be included and mentioned in the bill, and included in clause 71. Such a clause will guarantee that farmers will not be disadvantaged because they reported their cattle to be ill.
As agriculture critic, I worked with a farmer living near Rivière-du-Loup whose flock developed scrapie. The quarantine imposed was not 40 days, as most Canadians probably think, but five years. During this time, the farmer could not sell, kill, eat or make money in any way with his sheep. Most farmers must withdraw from business when confronted to that situation.
That is why the Bloc Quebecois will propose a series of amendments to Bill C-60 to try to improve it. We will also invite the government party to co-operate so this bill will benefit the general public.
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[English]
Mr. Jake E. Hoeppner (Lisgar-Marquette, Ref.): Mr. Speaker, it is a pleasure to make a few comments on this bill.
This is a bill which if passed will implement a food inspection agency that should be streamlined somewhat. What really scares me is that the agriculture minister is going to be in control of this agency. When I see that it has taken three years for the agriculture minister to decide that we are going to have a referendum on barley marketing and within those three years he still has not been able to come up with a proper question on what to ask farmers, I am just wondering how he is going to regulate this big agency and how cost effective it will be.
When the new agency comes into effect in 1997 it will become one of Ottawa's largest bureaucracies with 4,500 employees and a budget of $300 million. That is a lot of peanuts, $300 million for a regulatory body. When we look at deficit reduction and we look at the total debt in this country of $600 billion I guess it is the Liberals' idea that another $300 million is not that significant.
Federal officials contend that ending the interdepartmental overlap and duplication in such areas as enforcement, risk management, laboratory services, informatic systems and communications will save taxpayers $44 million annually starting in 1998-99. It always astounds me that whenever we see projections and they are somewhat down the road we can usually expect that somehow the manipulation of the system will be there so that they can come within that figure even when it means transferring costs to other agencies. However the detailed breakdown of this estimate has not yet been provided by the government. That is interesting.
Also, no decisions have been made on the staff reductions or details given on the new agency's surplus laboratories. There is a lot of money involved in those laboratories. What is going to happen to them is a big question. I hope the government finally realizes that if there is going to be disposable assets that it gets a fair market value for them.
Although the Reform Party supports consolidating and downsizing the operations of the federal government, we fear that this bill will accomplish little except to shuffle names and titles. Instead the government should be considering the advantages of privatizing a significant portion of Canada's food, plant and animal inspection services.
This is one of the big issues we have been debating for the last three years, harmonizing and privatizing. We know that each province has its own inspection services and there is always conflict between the two agencies. It is time we realized that harmonization has to happen or the conflict will increase and we will spend more dollars instead of less.
Only $40 million or 13.3 per cent of the agency's $300 million budget is currently cost recovered. The agency already plans to dramatically increase this amount to more than $70 million. We know who is going to bear these costs. It is going to be the taxpayer, the processor or the primary producer. It is tremendously important that we start downsizing and becoming more efficient and productive in these agencies as well as in our food processing and primary production.
Where the Reform Party supports user pay and cost recovery, the cost of the service must reflect the true costs of providing the service and not the added expense of maintaining the government bureaucracy. The bill should ensure that a greater priority is placed on cost avoidance and cost reduction. This is important as the agency created by this bill will be responsible for enforcing and administrating several federal statutes which regulate food, animal and plant health and related products. These include the Feed Act,
the Fertilizer Act, the Health of Animals Act, the Meat Inspection Act, the Plant Breeders Rights Act and the Seeds Act.
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This bill will also continue to centralize authority for food inspection in the hands of the federal government. The Reform Party believes the government should acknowledge that since the provinces already provide many of these same inspection services, the emphasis should be on decentralization and encouraging common inspection standards.
For these reasons the Reform Party opposes the bill.
Turning to the bill itself, we have specific concerns. Provisions in the bill seem to create an environment for empire building.
Clause 5 of the bill states that the governor in council shall appoint a president and an executive vice-president to the new agency. These individuals will be responsible for the day to day operations of the agency and will provide advice to the minister on matters relating to the mandate of the agency. There is no mention of the qualifications which will be required by these people. This type of situation opens itself up to pork barrel politics.
Clause 8 of the bill states that the president and the executive vice-president shall be paid such remuneration as is fixed by the governor in council. We do not even know the salary amounts for these two positions.
Clause 10 states that each member of the advisory board shall be paid such fees for his or her services as are fixed by the minister. Again, we cannot tell Canadian taxpayers how much they will be paying for these salaries.
This is a very good example of what we are experiencing with the Canadian Wheat Board. We have appointed commissioners who have received severance packages. We do not know what those severance packages are. There are positions which have pension plans and nobody really knows what the cost is. When I look at this regulatory agency which is being set up very much like the Canadian Wheat Board, I find it to be scary.
I know also that the Manitoba food inspection agency is always in conflict with the federal agency. It is costing us jobs. It is costing us exports. For example, there is a small sausage manufacturing plant in my constituency. The manufacturer is allowed to sell his product all across Manitoba; however, he cannot sell it to federal agencies, such as CN or the military. I do not know why it would pose a health risk to the federal agencies; Manitobans eat the sausage and it is delicious. I am told that we could save almost a dollar a kilogram if people in the federal agencies ate the Manitoba sausage instead of importing sausages from federal agencies in a different province.
If we want to become efficient and if we want to harmonize, we do not have to harmonize just with foreign countries, we have to harmonize within our own boundaries. We have to make sure it is cost effective and that the taxpayer as well as the primary producer gets the benefit. We should also give a break to the processors. They are the people who are creating the jobs. It is the small businessmen and the entrepreneurs who really make this industrial machine work.
[Translation]
Hon. Fernand Robichaud (Secretary of State (Agriculture and Agri-Food, Fisheries and Oceans), Lib.): Mr. Speaker, I am happy to rise today, on behalf of the Minister of Fisheries and Oceans, to speak to the motion requesting that Bill C-60, an act to establish the Canadian Food Inspection Agency, be referred to the Standing Committee on Agriculture and Agri-Food before second reading.
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This bill is the starting point of a very important journey. The plans for the trip began in March 1996, when we were preparing the budget speech; at that moment, our government stated for the first time its commitment to establish an agenda aimed at finding alternative solutions for the delivery of programmes, at finding the most efficient and least expensive way to carry out programs and provide services.
This journey is an important part of that agenda and it will lead us to the creation of a unique food inspection agency, gathering under one roof all the activities previously performed by three different federal departments. Our government knows some of the important port of calls where it will have to stop along the way.
[English]
The Canadian fishery is an important contributor to national import and export activities. In addition to considerable domestic consumption of Canadian fish and fish products, substantial markets exist for Canadian products abroad. Fully 84 per cent of fish and seafood caught by Canadians is destined for foreign markets.
Similarly, markets exist within Canada for fish species that are not indigenous to Canadian waters. Some 50 per cent of the fish and seafood consumed in Canada is imported. To support these high import and export figures and to promote confidence both at home and overseas in fish destined for human consumption, this government is committed to ensuring that fish inspection policies within this new agency retain the prominence and the high standards that they now have as part of fisheries and oceans.
In order for any food inspection service to meet the needs of its many client groups not the least of which are consumers, ensuring food safety for all Canadians must be the first priority. A new agency must uphold the excellent reputation of existing inspection
services to ensure the safety of products consumed by the Canadian public whether these products originate in Canada or elsewhere.
[Translation]
As we know, since at least 84 per cent of all fish caught in Canada is destined for foreign consumers, a new inspection agency will also have to improve and guarantee access to foreign markets for our products.
We must assure our foreign trading partners that Canadian sea products are of good quality and meet the requirements of strict regulations. That means we will have to keep up the excellent work that Fisheries and Oceans is doing now in the area of fish inspection.
Finally, to reach these goals in a period of budgetary cuts, we will, of course, have to maintain a certain form of cost recovery so that those benefitting from the inspection services will pay part of the costs.
The new single food inspection agency, which will become a reality if the bill is passed, stops in each one of these ports of call, that is to say that it takes into account all these needs while drawing on new approaches for the delivery of inspection services, many of them initiated by the Department of Fisheries and Oceans, and creating new opportunities for the future.
We all know that the Canadian fish inspection program is world renowned. We must keep this reputation, and we will, since the new agency will be operating from such a solid foundation.
The bill enshrines the quality management program and the new importer quality management program, which are based on the premise that food safety is the main concern.
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The new agency will rely on highly specialized fish inspectors, who are currently controlling the industry's quality management systems, ensuring their efficiency.
[English]
The new single food inspection agency will also be forward looking. It will create a food inspection regime that consolidates inspection activities at the federal level. It will enhance ease of access for products to foreign markets. It will facilitate greater collaboration between the various levels of government in Canada, providing the basis for equivalency of standards and programs. It will simultaneously reduce overlap and duplication while promoting a more efficient and effective service delivery system. This government is fully cognizant of the necessity of maintaining open and frequent dialogue with the new agency's many clients. This we will do.
As Canadians grow and their needs change, the government also evolves to continue to meet their needs. We are committed to doing things differently and the Canadian food inspection agency represents a significant step in this direction.
We all recognize that this is an opportunity whose time has come. As Secretary of State for Fisheries and Oceans as well as for Agriculture and Agri-Food, I remain certain that the fish inspection system will be enhanced within this new agency.
[Translation]
Our journey is starting now with the passing of this important bill establishing a canadian food inspection agency. I believe it will result in the setting up of a agency, which will see to the efficient and effective implementation of a world class food inspection program.
Mr. Réjean Lefebvre (Champlain, BQ): Mr. Speaker, I am pleased to rise and talk about Bill C-60, an Act to establish the Canadian Food Inspection Agency and to repeal and amend other Acts as a consequence.
The need for a federal food inspection agency comes from pressure exerted by municipal and provincial governments, the agricultural sector, fisheries and even consumers. The setting up of a single unit in the area of food inspection was therefore awaited anxiously.
Very often those who must deal with the federal system of food inspection do not know to which agency they should refer. Indeed, the present system of federal inspection is such that they must deal with several departments or agencies including Agriculture Canada, Fisheries and Oceans as well as Health Canada. These three departments account for more than $340 million annually in expenditures by the Consolidated Revenue Fund for food inspection.
The creation of a public agency responsible for all federal inspection services was announced in the 1996-97 Budget. This announcement has raised great expectations, and Bill C-60 should now answer them. Unfortunately, the Canadian Food Inspection Agency the federal government is proposing is rather disappointing if you consider its structure, its make up and its mandate.
According to senior officials responsible for setting up the project, the proposed agency is a model of originality. There is no similar agency in the world. However, originality is not necessarily what provinces, municipalities and the agricultural and fishery sectors hoped to get in answer to their requests. These people wanted an end to duplication and in particular they did not want to assume the cost of an agency whose efficiency has yet to be proven.
Bill C-60 says that the Canadian Food Inspection Agency is established ``in order to consolidate and enhance the efficiency and effectiveness of federal inspection services related to food and
animal and plant health and to increase collaboration with provincial governments in this area''. All this is hot air, good intentions and window dressing.
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In reality, the future agency will be a patronage haven created to reward the friends of the government of the day. The evidence is in clause 5 of the bill which provides that: ``The Governor in Council shall appoint a President and an Executive Vice-president of the Agency to hold office during pleasure for a term not exceeding five years, which term may be renewed for one or more further terms''. We see clearly this appointment procedure is designed to ensure the executive power's political loyalty to the government. This procedure is arbitrary, unfair and highly partisan. It calls into question the objectivity of decisions and actions that will be taken by the future federal food inspection agency. That is what must be expected from the agency.
That is not all. The agency will also have an advisory board of not more than twelve members who this time will be appointed by the minister responsible for the agency. This absolute discretionary power will probably be given to the Minister of Agriculture and Agri-Food, since it is he who gave us Bill C-60.
What we must understand in all this is that the choice of policies relating to the agency's mandate will thus be determined by the minister's friends. Once again, this appointment procedure is totally unacceptable. It does not respond in any way to the expectations of provincial and municipal governments and of the people in the farming sector and fisheries.
Furthermore, the membership of this famous advisory board does not provide any guarantee as to the representation of the farming and fisheries sectors on the committee, and even less about the involvement of the provinces and municipalities.
How will the agency be able, as is mentioned in Bill C-60, to pursue a greater degree of collaboration between federal and provincial departments in the area of federal food inspection if the provinces are not permanently represented on the agency? The provinces have their say in this future agency.
At this time, there is no guarantee that they will have a forum where they may heard, and most of all, there is no guarantee that they will be able to actively participate in decisions that will be taken. These decisions affect them directly and we should not ignore the total lack of judgment the government is showing in this issue.
When we look at the mission of the agency, it is not more reassuring. It says that the Minister of Health is responsible, among other things, for establishing policies and standards relating to the safety and the nutritional quality of food sold in Canada. This prerogative given to the Minister of Health allows him to interfere directly in fields of provincial jurisdiction by setting standards and regulations, which will be applied all across Canada. These powers belong rightfully to the provinces and not to the federal government. This situation must be strongly condemned.
Much was expected from the creation of the Canadian Food Inspection Agency. Once again, the federal government is disappointing us. What we are offered today is obviously, another example of patronage. Once again, the provinces are being pushed aside and, moreover, the government is making sure that it controls everything by exercising provincial powers.
Nobody in the agriculture and fishing sectors, including the provinces and the municipalities, was expecting such a disappointment. They expected at least to be true partners in the decision-making process. This is not the case. Bill C-60 introduced by the Minister of Agriculture has every possible flaw and we must scrap it.
[English]
Mrs. Marlene Cowling (Parliamentary Secretary to Minister of Natural Resources, Lib.): Mr. Speaker, as a lifelong farmer and a member of Parliament for Dauphin-Swan River, it is a pleasure to have this chance to speak on Bill C-60, the Canadian Food Inspection Agency Act.
Food inspection and quarantine services have always been a priority in Canada. Canada has one of the most effective food inspection and quarantine systems in the world. In fact, Canadian confidence in quality and safety-
The Deputy Speaker: I am sorry to interrupt the hon. member, but the Chair has made an error. It should not have been the parliamentary secretary who spoke but it should have been the member for Vegreville. Forgive me.
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Mr. Leon E. Benoit (Vegreville, Ref.): Mr. Speaker, I have a few comments on Bill C-60, the act that would put in place the Canadian Food Inspection Agency.
The stated purpose of this bill is to establish the Canadian Food Inspection Agency in order to consolidate and enhance the efficiency and effectiveness of the federal inspection services related to food, animal and plant health and to increase collaboration with provincial governments in this area.
Specifically, the bill sets out the new agency's framework in terms of responsibilities, accountability, organization, human and financial resources, powers and reporting. The bill also amends some of the enforcement provisions and penalties in federal statutes that the agency will enforce or administer in relation to food, plants and animal health.
When the new Canadian Food Inspection Agency begins operation in 1997 it will become one of Ottawa's largest bureaucratic entities with 4,500 civil servants and a budget of $300 million. Federal officials contend that ending interdepartmental overlap and duplication in such areas as enforcement, risk management,
laboratory services, informatic systems and communications will save taxpayers $44 million annually beginning in 1998-99.
However, a detailed breakdown of this estimate has not been provided by the government. No decision has been made on staff reductions or the new agency's surplus laboratories. We have a broad statement of cost, a broad statement of savings and no specifics whatsoever.
When we are working with legislation that creates a new bureaucracy of 4,500 employees with an estimated budget of $300 million we should have a lot more detail. I am not talking about minute detail, but about a statement that really explains how the money will be spent and how money will be saved. That has clearly not been offered in this legislation.
The government departmental estimates on cost are $300 million but we should know from history that departmental estimates are rarely accurate. It would be a rare occasion indeed. I have seen many new agencies created and I do not know if I have seen one that has come in on budget. I would feel much more comfortable that this agency would come in on budget if some information were given to show how the money would be spent.
I want to make it clear that the Reform Party supports the consolidation and downsizing of federal government operations but this bill will accomplish little except for the shuffling of names and titles. Instead, the government should be considering the advantages of privatizing a significant portion of Canada's food, plant and animal inspection services. The Reform Party has been calling for this since the day we came here.
We should consider how much of this service can be privatized so the service can be provided at a lower cost to the people who need the services. At the same time I acknowledge it is very important to ensure the services that are privatized can be done more efficiently, in a less expensive way and safely.
With a saving of $40 million or 13 per cent of the agency's $300 million budget, that 13 per cent is currently cost recovered. The concept of cost recovery that the Reform Party proposes, and that I personally heard being recommended by many processors, particularly processors of agricultural products, is quite different from what this government proposes.
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Reform proposes that cost recovery should reflect the lowest cost at which the service can be provided, whether it is in the hands of the private sector or the government. I believe that in some cases, the private sector can provide very high quality service for less money than government can. In other cases, it may be found that the department can provide the service at a lower cost. It is not clear which services could be provided better by the private sector or by the department. I do not know of any study or any work having been done on this.
The government's idea of cost recovery is totally different than the Reform idea. The Reform idea is cost recovery at the lowest price. If it can be done for less money with high quality then give it to that group or person to do.
The second major issue I would like to touch on in this legislation concerns the authority of the provincial governments versus the federal government. The federal government has decided that the way to end overlap between the federal and provincial governments is to centralize the complete service in the hands of the federal government. This is certainly in line with what Liberal governments have done over the years.
Liberal MPs have generally accepted that Canadians like big government. Along with big government comes high taxes. I contend that Canadians want a much smaller government, lower taxes, more take home pay and therefore a much better job situation in the country. There are two visions of Canada. There is the vision held by the Liberals and Conservatives which has been demonstrated over the years. They believe in big government, high taxes, low take home pay. Then there is the Reform vision which I believe is shared by many Canadians: a much smaller federal government with much lower taxes and higher take home pay, therefore, a better take home pay.
Unfortunately, with this legislation the government has chosen the large government, high tax route. The legislation will place a great burden on the taxpayer and on processors who are paying cost recovery.
The Speaker: My colleague, I see that you are right in the middle of your speech. Rather than cut you off in about a minute and a half, I thought I would let you take up right after question period. You will have a full three minutes then.
It being 2 p.m., we will now proceed to Statements by Members.