Chamber of Commerce of Metropolitan Montreal luncheon

I am pleased to be here to speak about what we can do together and what we must do together to get Montreal back on its feet. When I speak about "we", I mean the government of Canada, the government of Quebec, the government of the city of Montreal, the private sector, the people of the rest of Quebec, and the people of the rest of Canada.

We all have particular roles to play and we have to work together, cooperatively, without fighting. And as governments, we have to put aside partisan considerations and make decisions in the best interests of the people we serve.

Historically, Montreal is Canada's first city. For a long time it was our largest city. Its economy, its financial services, its manufacturing industries formed the locomotive for the Quebec economy and for that of all Canada.

Montreal has always been a symbol of Canada at home and abroad. Its two languages, its many cultures, all working and living together, have been a symbol of hope, of what we can be together.

Today, however, Montreal is in trouble. There is too much unemployment, too much poverty. When Montreal is in trouble, the Province of Quebec is in trouble and so is all of Canada.

Whether we are from Shawinigan or Chicoutimi, Halifax or Vancouver, we are all part of the same family. This is a time for all of us wherever we live in Canada to say "we are all Montrealers".

We all have an obligation to work hard together so Montreal regains its dynamism and becomes a centre of technology and growth. It will not be easy, it will require an exceptional effort.

Personally, let me tell you I am an optimist. Montreal has so much going for it. With hard work and a spirit of cooperation, we can get Montreal back on its feet. We can succeed. We have no choice. We must succeed.

Let me begin with what the federal government is doing to create an investment climate that will produce jobs, economic growth and a dynamic economy focused on the knowledge-based and high-technology industries of the 21st century.

When we took office 3 years ago this week, the financial health of our country was deteriorating rapidly. We knew that if we didn't act to restore fiscal health, literally nothing else that we might do to boost jobs or maintain social programs would work.

We knew that a necessary condition for restoring the government's fiscal health was to create a climate conducive to lowering interest rates, and that the only way for the government to do that was to restore market confidence in the way we manage our business. We knew that we had to be bold, we had to make difficult decisions. And we did.

The year before we took office, on a borrowing requirements basis, Canada had the worst record of any G-7 country, except for Italy. In 1997, we will have the best fiscal health of any G-7 country. We have got our fiscal house in order. As a government, we have got our spending under control. We have not raised personal taxes. And we have preserved our social safety net.

By 1998-99, the federal government will not be borrowing any new money in the markets. New borrowing requirements will be eliminated. They will be zero.

The OECD measures deficits on a national accounts or borrowing requirements basis. By this measurement -- the same measurement as is used in the United States, France, Germany, Great Britain, Italy -- our budget in 1998-99 will be balanced.

What does it mean for investors that we have got our fiscal house in order? What does it mean for Montrealers? Interest rates are lower today in Canada than they have been for almost 40 years. Short-term interest rates have come down by 4.75 points since early last year. In early 1995, Canadian rates were almost 2.5 points above American rates. Today they are 1.75 points below US rates. Canadian rates are lower today than US rates up to a term of 5 years. And yesterday, for the first time in over a decade, ten-year Canadian rates fell below the US rates. And at 5.25%, the prime rate was three points below the US rate.

This means that somebody taking a 5-year mortgage of $100,000 at today's rate of 7.40% will pay, on average over the five years, almost $7,000 less per year in interest costs than somebody who took a similar mortgage six years ago when the 5-year mortgage rate stood at 14.25%.

Getting our fiscal house in order means that the provinces save interest charges on their debt.

Quebec alone saved $625 million in interest payments between January 1995 and June 1996 because Canada got its fiscal house in order. This is money that can now be spent on health and education and other essential services.

By getting Canada's fiscal house in order, we have created an investment climate with low interest rates and low inflation. This should now give investors the confidence that they need to create jobs and get a good return for their money.

We must all begin to take advantage of the success of our government's fiscal policy. And I am confident that as a country, as a province, and as a city that we will.

Getting Canada's fiscal house in order is one very important concrete contribution the federal government has made to the investment climate for Montreal. And I want to take this opportunity to thank two of my Quebec ministers without whom this would simply not have been possible.

Paul Martin -- and hardly a day goes by without someone in Canada or abroad telling me that it was my lucky day when I named him Finance Minister -- and Marcel Massé, who headed the Program Review, to help the government establish its priorities while getting costs under control.

What better demonstration of the positive influence in Ottawa of strong Quebecers. What better demonstration of the role Quebecers can play in the development of all of Canada.

Getting our fiscal house in order is an essential prerequisite to helping the economy of Montreal get back on its feet, but it is not enough in itself. Sorting out responsibilities between various levels of government is an essential part of a framework that supports the creation of jobs and growth. Here too we have taken steps where Montreal can reap the dividends.

My government decided, for example, that essential economic instruments for the City of Montreal such as its airports and its port should be managed locally. We took the appropriate steps to transfer decision-making responsibility from Ottawa to locally run airport and port authorities. I believe that this transfer of responsibilities, which we have done across Canada in the case of airports and ports, can be very beneficial to the economic development of Montreal.

Nothing is more important in a modern economy than a well-trained labour force. There has been a consensus in this Province that because of its close link to education, jurisdiction over manpower training should be with the government of Quebec. We therefore decided earlier this year to offer to the government of Quebec and other provincial governments to turn over federal responsibility for manpower training.

I hope that Mr. Pettigrew will soon be able to complete an agreement with the government of Quebec. Efficient training programs will then create the type of workforce that can allow Montreal to compete for and attract the knowledge-based industries of the future.

But the role of government in promoting job creation and economic growth must go well beyond simply creating a climate for the private sector to invest. At a time of globalization, instantaneous capital flows, high speed communications, and rapid technological change, government has a responsibility to help citizens adjust to the challenges of a modern economy.

Our government has established a partnership with the private sector and the provinces which enables us as a country of 30 million people to compete internationally as Team Canada.

I do not have to insist on the advantages for Montreal of being part of a Pacific country. You know them. You know the success of the Team Canada missions of the last two years. You know that it has meant and will mean many thousands of new jobs in this city.

I am pleased that Premier Bouchard is giving serious consideration to being a participant in the next Team Canada mission this coming January to Thailand, Korea and the Philippines. That would be good news for Montreal.

Next month I will represent Canada at the APEC Conference in Manila. Following the Conference, I will go to Shanghai to sign a final contract for the construction of two Canadian nuclear reactors in China.

This contract for Atomic Energy of Canada Limited results from our Team Canada trade mission in China two years ago. It will bring a lot of new business and new jobs everywhere in Canada. In Quebec it will mean about $275 million in new business and many new jobs, mainly in the high tech sector. That is part of what Team Canada is all about.

Government also has a responsibility to make key investments which spur growth and job creation. It is striking when we look at the key strengths of the Montreal economy what a determining role the federal government has played -- aerospace, biotechnology, pharmaceuticals, telecommunications and other emerging technologies.

The federal government has helped make these Montreal-based industries globally competitive through a variety of instruments including the Research and Development Tax Credit and the Export Development Corporation. More important, the federal government must and will help these industries expand in Montreal tomorrow. The government of Canada is determined to help prepare these Montreal-based industries to grow and expand in the international market place of the 21st century.

Let me give a concrete example. As a result of one of our Red Book commitments, we have created a new program called Technology Partnerships Canada. It targets three growth sectors -- aerospace and defence, enabling technologies and environmental technologies. It has a private sector board to advise on market technology, trends and opportunities. In appropriate cases, the federal government will share risks and make repayable contributions to lever private sector research and development investment.

Yesterday we announced federal contributions under this program to Bombardier. The federal government will help finance the design and manufacture of Bombardier's 70-seat Regional Jet. By so doing, we are contributing to the maintenance and creation of hundreds of direct jobs in Montreal, plus many indirect jobs for suppliers. We are not only helping to expand Montreal's primary role in the Canadian aerospace industry, we are ensuring that Canada maintains and expands its leading role in the international aerospace industry.

Technology Partnerships Canada will support investment in research and development all over Canada and will help our country develop an advanced economy for the 21st century. I am confident that in the very near future more Montreal-based companies will be able to take advantage of Technology Partnerships Canada to announce new investments and to create new jobs.

What we are doing as a government is targeting our investments so that we can help Montreal become a leader in the emerging technologies of tomorrow. Just a few weeks ago, my Industry Minister, John Manley, announced a joint federal/private sector investment of $20 million to expand the Institute of Research in Biotechnology. You know the importance of this Institute for Montreal.

You all know how important small- and medium-sized business is for job creation. The government of Canada knows it too. That is why we are contributing to the Montreal Enterprise and Innovation Centre. Through its support services the Centre fosters the growth of new small businesses.

We know that Montreal has what it takes. The government of Canada is prepared to do its part in a variety of ways. I know that Mayor Bourque has many ideas for the development of his city. The government of Canada will do what we can to help.

I want today to appeal to potential investors whether they are in Montreal, in the Province of Quebec or in the rest of Canada to join with us in working to get Montreal back on its feet and get ready for the 21st century.

I have talked about what the federal government has been able to do in terms of creating a proper climate for investment, and what we can do in terms of our own programs and what we can do in partnership with the private sector. But even that is not enough.

We must work with the government of Quebec; and the government of Quebec must work with us. And while it is true that we may sometimes disagree, we also have proved that we can work together.

Premier Bouchard and I have met and spoken several times about what we can do together for the economy of Montreal.

In recent months our two governments have been able to work together to create jobs in Montreal. Through the Canada-Quebec Auxiliary Agreement on Industrial Development, we have helped companies such as, for example, Bell Helicopter, Ericsson, Saturn Solutions and others.

Next week Premier Bouchard will chair an economic summit. It is very important for Montreal and for the Province of Quebec that it achieve tangible concrete results. I wish the participants well.

I have spoken about what the federal government is doing to help Montreal get back on its feet. But whatever governments do, whatever the private sector and individuals do, there remains one element which continues to undermine the investment climate here in Montreal. It is something I would rather not have to talk about; but I know it preoccupies all of you.

There is no use putting our heads in the sand. We all know that the threat of another referendum on separation soon after the next provincial election is not conducive to maintaining or attracting investment to Montreal today. And of course, this situation also creates tensions within our community.

We need stability in our personal lives. We also need stability in our professional and business lives. In a society as privileged as ours, no one should have to live with a sword of Damocles constantly hanging over their heads. We need governments to work together on solving real problems of real people.

Just think of what we could do addressing together the real concerns of the people if we took all the talent, the knowledge and the energy that is now directed on both sides towards preparing a referendum within the next three or four years and redirected those resources towards common objectives: how to get more people back to work, how to train people for the information revolution, how to help our exporters penetrate international markets, how to manage health care, how to coordinate medical research, how to better ensure that children will be debt-free in the future, how to reduce child poverty.

With high office come high responsibilities. That's true for me, for Mayor Bourque and for Premier Bouchard. I am ready to do my part and so is my government. But we all know that more than that is needed. We have a common responsibility to get Montreal back on its feet.

It is our duty to give priority to the problems of a city which has 675 thousand people living in poverty -- twice as many as in all of Atlantic Canada; a city where one unemployed Canadian out of seven lives. We cannot resolve those problems overnight, it takes time. Therefore it is our responsibility and duty as political leaders to put aside anything that is profoundly divisive to focus all our energies on what we have a moral duty to do together. We must end uncertainty and restore hope and confidence. We owe that to our fellow citizens.

We saw last summer during the horrible floods in the Saguenay how people from all across Canada pitched in to help. We saw that when a member of the large Canadian family was in trouble, the whole family rallied around and helped out. We saw how the federal government, the government of Quebec and municipal authorities could work together. We must now apply that same great spirit of Canadian solidarity to get Montreal back on its feet and ready for the next century.

We have a duty and a responsibility to seize the opportunity. With so much going for us, we must succeed.