March 22, 1968

NDP

Stanley Howard Knowles (N.D.P. House Leader; Whip of the N.D.P.)

New Democratic Party

Mr. Knowles:

Is that item in the estimates for the current year or is it in the estimates for the coming year?

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LIB

Charles Mills (Bud) Drury (Minister of Industry; Minister of Defence Production)

Liberal

Mr. Drury:

It is in the estimates for the coming year.

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NDP

Murdo William Martin

New Democratic Party

Mr. Martin (Timmins):

Mr. Chairman, I wonder whether the minister could give the house any indication concerning just what the government has in mind in respect of paragraph (a) of item 30c, where it refers to "financing on reasonable terms". Could the minister inform the house what the government has in mind with regard to what constitutes reasonable terms?

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LIB

Charles Mills (Bud) Drury (Minister of Industry; Minister of Defence Production)

Liberal

Mr. Drury:

Mr. Chairman, this was described at some length during the sittings of the parliamentary committee which examined the Kennedy round arrangements. Generally speaking, however, it would be hoped that the normal commercial channels would be made use of. It would be only when a person would seek to take advantage of the

March 22, 1968

Supply-Industry

Kennedy round arrangements and had been unable for reasons of risk, lack of familiarity, or for some other reason to effectively make use of the normal commercial financing arrangements that he would have resort to the facilities of the board and an insured loan.

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NDP

William Arnold Peters

New Democratic Party

Mr. Peters:

Mr. Chairman, not long ago when he was in opposition, I believe the Prime Minister was one of those who objected violently to the implementation of statutory legislation by means of estimates. As I understand it we have not passed the adjustment assistance program and in fact have not completed any discussion of the Kennedy round in the legislative sense in respect of what our liability would be and what displacement would take place. Yet we are being asked by means of this statutory item to implement a program about which we have not had any previous knowledge.

I was particularly interested in the minister's reply when he said this supplementary estimate is related to another item of $10 million which appears in the projected estimates with which we are not yet concerned. Therefore I wonder why the Prime Minister has agreed to the implementation of this legislative process by estimates. Personally I am opposed to statutory items except on an emergency basis. If this is an emergency I should hope the minister would give the committee a much fuller report than he has given concerning what might be the implications. Without knowing what displacement is taking place because of the Kennedy round tariff agreement we now are being asked, I presume, to compensate companies which already have gone through the process of establishing what their losses may be and which have gone through the process of appeal to the financial institutions which would be in a position to make loans available to them.

As I read paragraph (a) we are now being asked to underwrite or provide for a loan in a situation where a loan would not otherwise be available. I presume this is similar to the situation in respect of programs where after a company has made application to two banks and has been turned down, a loan can be made through the fund. Since this item is asking for $1 obviously it is not really asking for the establishment of a fund but rather is asking for a statutory authority. Therefore I think these items should be noted very carefully. Certainly this is not the proper way to pass legislation. I believe the Prime Minister was one of those when in opposition who

were very much opposed to statutory items, because this would mean that parliament would not be allowed any opportunity to examine the legislation.

I can only guess, because it is not so stated, that if we pass this item we will be passing in some measure the adjustment assistance program. Personally I am of the opinion that this is not the way it should be passed. I believe we should have the full discussion which was promised in respect of the implications of the Kennedy round. This type of item is not one which allows the full discussion which I believe should take place.

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NDP

Colin Cameron

New Democratic Party

Mr. Cameron (Nanaimo-Cowichan-The Islands):

Mr. Chairman, I also have been much concerned about this item. I wonder whether the minister is in a position to give more particulars than those which are set out here. I presume this item has reference to section 7 of the Department of Industry Act although no mention is made of this in the item. Can the minister give us any information concerning the details of the adjustment assistance program which, as my colleague the hon. member for Timiskaming suggested, we are now being asked to legislate by means of this item?

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LIB

Charles Mills (Bud) Drury (Minister of Industry; Minister of Defence Production)

Liberal

Mr. Drury:

Mr. Chairman, I am sorry the hon. members apparently were unable to participate in the proceedings of the committee which studied the implications of the Kennedy round, and before which the measure proposed by the government was rather exhaustively examined. This resulted in a report which was made to the house on Friday, March 1. The report points out that the committee held 22 meetings and heard the following witnesses: the Minister of Finance, the Minister of Trade and Commerce, the Minister of Industry and the parliamentary secretary to the Minister of Manpower and Immigration.

[DOT] (11:50 a.m.)

In addition the committee also obtained information from the assistant deputy minister of finance, the director of tariffs and a member of the tariff division of the Department of Finance, the director of the machinery branch, the industrial policy adviser and chief of the commercial policy division of the Department of Industry, and for the Department of Trade and Commerce the assistant deputy minister of trade policy and director of the office of trade relations. Perhaps I should not go on reading the list of witnesses,

March 22, 1968

which runs on for another page. The report of the committee which was submitted to the house together with the proceedings of the committee would, I think, serve to inform the hon. member of some of the details he is seeking.

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NDP

Colin Cameron

New Democratic Party

Mr. Cameron (Nanaimo-Cowichan-The Islands):

Mr. Chairman, as a member of that committee I have no recollection of any details of this assistance program being presented to us. It seems to me the minister must have these details in his mind or somewhere in his department. Rather vague references were made during the hearings at which, as the minister has said, a great many witnesses appeared, to some consideration of compensation for those who might be adversely affected by the Kennedy round; but we have no details of it.

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LIB

Charles Mills (Bud) Drury (Minister of Industry; Minister of Defence Production)

Liberal

Mr. Drury:

Mr. Chairman, I am sure the committee would not want me to repeat the statement I made to the standing committee. It would seem to render really useless the work of committees if testimony is to be repeated in extenso in the house. If there are some particular aspects of particular items in relation to this program that hon. gentlemen feel at a loss about, and which were not adequately covered in the proceedings of the committee, I would be glad to answer questions on those particular matters. But I would hope not to waste the time of the house and of parliament by rehashing or repeating here what has been given in evidence and reported in the minutes of the committee.

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NDP

Colin Cameron

New Democratic Party

Mr. Cameron (Nanaimo-Cowichan-The Islands):

Then, Mr. Chairman, perhaps the minister could give us some specific information. Are interest rates set under this assistance program? Have they been set? What type of loans are to be guaranteed? What responsibility is the government taking with regard to the guaranteeing of these loans? We certainly heard nothing as to what interest rates are to be charged, and I wonder whether the minister can give us the details in this respect.

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LIB

Charles Mills (Bud) Drury (Minister of Industry; Minister of Defence Production)

Liberal

Mr. Drury:

In so far as the interest rates are concerned, they will be normal commercial rates. I think the hon. gentleman understands that the role of the government of Canada in this program is to act as insurer of loans which the banking community might feel, in light of their normal policy, involve too great a risk. To remove some of this risk the government will act as insurer with

Supply-Industry

respect to a major portion of the loan. But the rates of interest will be those normally chargeable by the institutions for commercial loans. No dollar limit has been set on the loan or the amount to be insured. The borrower will be charged a premium for the insurance, and it is expected that over the course of this program the premiums on the insurance will cover any losses that might be required to be made good under the insurance.

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NDP

Stanley Howard Knowles (N.D.P. House Leader; Whip of the N.D.P.)

New Democratic Party

Mr. Knowles:

Mr. Chairman, I should like to point out to the minister that he is really begging the question when he tells us these matters have been discussed in the committee and therefore that discussion should not be repeated on the floor of the house. I am inclined to agree with that statement as a matter of general practice, but it is still true that even if a committee has recommended something, it is up to parliament to do the actual legislating.

What rather startles us this morning is the shoehorn way in which we are being given this legislation. When I asked the minister whether this wording in the item now before us, vote 30c, is something new he said there is a similar item in next year's main estimates. When I look it up I find an item in next year's estimates, item L95, for $10 million which again refers to the adjustment assistance program.

So we have two references to the adjustment assistance program. There have been press releases about it, there has been talk about it; but until one of these items is passed it does not legally exist, unless the minister can show me some way in which it has been brought into being. I submit that his earlier answer is correct, and that we are doing it now. If we are being asked now to bring into effect an adjustment assistance program, I think we are entitled to some details about it or should know who is going to work out the details.

I also find it rather interesting when I look at the wording of the item now before us. The wording of vote 30c which is now before us is not the same as that of item L95 in the main estimates for next year. So not only is this item supplementary to something we have not yet passed, but that something we have not yet passed reads differently. Please, Mr. Minister, the shoehorn method does work, but let us have a little more candour about it.

March 22. 1968

Supp ly-I ndustry

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LIB

Charles Mills (Bud) Drury (Minister of Industry; Minister of Defence Production)

Liberal

Mr. Drury:

Mr. Chairman, when the hon. gentleman says "Let us have a little more candour" I would point out that a standing committee of the house has examined at considerable length the Kennedy round, its implications, the proposals under the general heading of the adjustment assistance program and the steps proposed by the government to deal with the program. The steps proposed involve a number of actions by more than one department comprising a program of the government. It is quite an extensive program.

Some of the elements of the program require legislative authority. In so far as my department is concerned there are two elements requiring legislative authority; one, the launching of an insured loans program to make available financial means to those who wish and are able to take advantage of the opportunities offered by the Kennedy round. We anticipate that another element will be required at a later date, although not nearly as early in the chain of events as the insured loans scheme; indeed, the insured loans scheme should be in operation now. That is why it is in the supplementary estimates.

[DOT] (12 noon)

The second element of the program is for a different purpose and a different set of circumstances, and that is the reason for the change in wording of the vote in the main estimates to which the hon. gentleman has just referred. It is designed to deal with hardship rather than the exploitation of opportunity. It is not expected that these cases of hardship will develop to the point where they can be adequately dealt with at an earlier date, and consequently the provision in the main estimates will meet the time frame.

In addition to that-and this was pointed out at the time as part of the problem of dealing with the change brought about by the Kennedy round-the Minister of Labour, in a different act and at a different time, has sought and obtained the approval of the house to the scaling upward of the unemployment insurance benefits. This is part of the program also, as was outlined to the committee. I am sure the hon. member for Winnipeg North Centre will not wish me to recite again in the house the detailed exposition which was given before the committee at a series of 22 meetings.

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NDP

Colin Cameron

New Democratic Party

Mr. Cameron (Nanaimo-Cowichan-The Islands):

I rise on a point of order, Mr. Chairman. I was present at every meeting of the

committee and I can say that no details were given to us at any time.

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LIB

Charles Mills (Bud) Drury (Minister of Industry; Minister of Defence Production)

Liberal

Mr. Drury:

Mr. Chairman, I do not want to get into a debate with the hon. gentleman, but I wonder what the committee which produced a report on the implications of the Kennedy round meant to do and what in fact it did in 22 meetings.

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NDP

Stanley Howard Knowles (N.D.P. House Leader; Whip of the N.D.P.)

New Democratic Party

Mr. Knowles:

Mr. Chairman, like the minister, I do not want to have to spin this out but I do think that in legislative terms this is a rather serious matter. As a result of our exchange this morning we have already dicovered that in addition to item 30c in the present supplementary estimates there is item L95 on page 597 of the estimate for next year.

I have been doing some further checking and I find that on page 257 of the estimates for next year there is another item under the Department of Industry for $1 million for grants to manufacturers in Canada who have applied for government insured or direct loans under the adjustment assistance program. Thus there are three different items in the estimates of this department, one in the present supplementary estimates and two in next year's main estimates, all referring to the adjustment assistance program. I think it is significant that in all cases the first letters of the words "adjustment assistance program" are printed in capital letters. This is a program of substance, not just one of words.

The minister says that the changes in the unemployment insurance rates and benefits were part of this program. I recollect quite well that when the government made its announcement about what it was going to do as a result of the Kennedy round it said it was going to work on two fronts. It was going to do something for industry and something for workers. May I point out to the minister that in the case of unemployment insurance benefits, in the case of what was done for workers, a regular statute was passed by the house amending the Unemployment Insurance Act. Nothing was said in that legislation to the effect that it was part of some nebulous adjustment assistance program. It stood on its own feet. This makes me believe that the adjustment assistance program is mainly under the purview of the Minister of Industry, although I gather from the discussions which may or may not have taken place in the committee that it does not yet exist in legislative terms. But once we have passed this item containing the words "adjustment assistance program" in capital letters we will

.March 22, 1968

have enacted it. Perhaps this is a good thing and the house wants to do it this way, but I still think that legislating in this way by these $1 items is a questionable procedure except in ad hoc emergencies or in special cases. I think under some conditions, perhaps involving a retired civil servant's pension, it might be appropriate, but a major program of adjustment assistance should be on a legislative par with the amendments to the Unemployment Insurance Act.

I am not examining the substance of the issue but, if I may go back to the phrase I used, I think this is a shoehorning method of getting on to the statute books something which until now is not there. There is no adjustment assistance program of legal effect on the statute books of Canada as of now. When we pass this $1 item and the estimate becomes part of the supplementary estimates and a supply bill is passed, then it becomes statutory and we will have the adjustment assistance program which may lead to a lot of things. Perhaps it is desirable, but I think the least the minister could do is to admit he is getting this piece of legislation through in the easiest possible way.

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NDP

John Gilbert

New Democratic Party

Mr. Gilbert:

Mr. Chairman, I am sure the minister does not want to mislead hon. members when he says the standing committee on finance, trade and economic affairs went into the full details of the adjustment assistance program. What actually happened was that prior to the first meeting the Prime Minister issued a statement setting forth the areas in which assistance would be given, and some of the witnesses before the committee were deliberately evasive with regard to the details. I am not complaining about that because they probably had not worked out the details at that time. However, the minister is not correct when he says that the committee went into it in detail. I do not think the minister's officials had worked out the details at that time.

I recall that three areas were discussed. The first was government insured loans, the second was direct loans, and the third was consultative services. It was only today that the minister said that this item referred directly to government insured loans and that the $10 million to which I referred last night is for direct assistance to companies which do not qualify for government assistance loans.

I ask the minister to give us some details with regard to the item for $10 million which is now in the main estimates because I would

Supply-Industry

like to know what type of loans will be offered, to whom, at what rates, for what length of time, and whether this sum will be considered as a direct contribution to business to take care of the effects of the Kennedy round or whether the government hopes to get back the moneys from these companies to which they are making loans. I should also like to know whether the $10 million includes the consultative services, which was the third area of help which the government intented to give. I am sure the minister has these details. They were not available at the time the witnesses appeared before the committee, and if the minister has them we would like to hear what they are.

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LIB

Charles Mills (Bud) Drury (Minister of Industry; Minister of Defence Production)

Liberal

Mr. Drury:

I do not want to take refuge in points of order but perhaps I should because, according to the press, there appears to be an attempt to prolong this debate. I think even the hon. member for Winnipeg North Centre will agree what we should not examine the details of items contained in the main estimates. We are now concerned with the supplementary estimates, and I have just been asked for details of vote L95 in the main estimates and for some details in relation to another item in the main estimates dealing with assistance, which incidentally is planned to be a payment of up to half the cost of consultative services for those who are unable to afford the full cost. There is an item provided which would allow money to be used for this purpose. I point out to the hon. member for Winnipeg North Centre that this is the normal way in which the department functions. There is a statute which lays out the objectives, duties and powers of the department and which enables the minister to execute these powers by way of parliamentary appropriation.

[DOT] (12:10 p.m.)

In the case of the item we are looking at now, the dollar item, that is all the expenditure it is contemplated will be required to carry through the program of insured loans.

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NDP
LIB

Charles Mills (Bud) Drury (Minister of Industry; Minister of Defence Production)

Liberal

Mr. Drury:

No, I hope that one dollar will be in excess of what the government will have to spend on this program of insured loans. This should commend itself to hon. gentlemen opposite. The program is good and fills what is clearly a need. It is designed to enable people to take advantage of opportunities that are being created and to provide a stimulus to the growth of our economy. I

March 22, 1968

Supply-Industry

suggest that placing the item in the supplementary estimates for passage now makes it effective immediately rather than waiting for the main estimates which would be subject to approval only at a later date. We are endeavouring to get on with the task that we have, that of seizing an opportunity and making the most of it.

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March 22, 1968