June 5, 1972

PROPOSED MACKENZIE VALLEY PIPELINE AND HIGHWAY-PLANS TO TRAIN NATIVE PEOPLE FOR JOBS

NDP

Roderick J. (Rod) Thomson

New Democratic Party

Mr. Rod Thomson (Battleiord-Kindersley):

Mr. Speaker, my question is for the Minister of Indian Affairs and Northern Development. In view of the possible construction of a Mackenzie highway as envisaged by the Prime Minister, and the large number of skilled workmen which would be required on such a project, and similar projects such as the proposed Mackenzie Valley pipeline, may I ask whether the minister has any definite plans to train native people so that they can find employment in connection with these undertakings?

Topic:   NORTHERN AFFAIRS
Subtopic:   PROPOSED MACKENZIE VALLEY PIPELINE AND HIGHWAY-PLANS TO TRAIN NATIVE PEOPLE FOR JOBS
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IND

Lucien Lamoureux (Speaker of the House of Commons)

Independent

Mr. Speaker:

Order, please. I would think this question is so general in nature that the minister should indicate whether he wishes to make a statement on motions. He should not make the statement at this time.

Topic:   NORTHERN AFFAIRS
Subtopic:   PROPOSED MACKENZIE VALLEY PIPELINE AND HIGHWAY-PLANS TO TRAIN NATIVE PEOPLE FOR JOBS
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LIB

Joseph Jacques Jean Chrétien (Minister of Indian Affairs and Northern Development)

Liberal

Hon. lean Chretien (Minister of Indian Affairs and Northern Development):

My answer is yes, Mr. Speaker.

Topic:   NORTHERN AFFAIRS
Subtopic:   PROPOSED MACKENZIE VALLEY PIPELINE AND HIGHWAY-PLANS TO TRAIN NATIVE PEOPLE FOR JOBS
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GOVERNMENT ORDERS

FOREIGN TAKEOVERS REVIEW ACT


The House resumed, from Wednesday, May 31, consideration of the motion of Mr. Pepin that Bill C-201, to provide for the review and assessment of acquisitions of control of Canadian business enterprises by certain persons, be read the second time and referred to the Standing Committee on Finance and Economic Affairs.


LIB

Eric William Kierans

Liberal

Hon. Eric Kierans (Duvernay):

Mr. Speaker, I am glad to have the opportunity to say a few words in this debate on Bill C-201.

I might start off on an informal note by relating an experience I had three weeks ago today at New York University when I was one of a group of 25 economists discussing the rising tide of nationalism throughout the world and the growing opposition to the activities and expansion of multinational corporations. I think we saw some of the results of this opposition in two countries just last week in the shape of expropriations and takeovers in Syria and Iraq. Included in the group were senior representatives of two of the largest multinational corporations, IBM and Standard Oil of New Jersey, neither of whom had found anything in our legislation to disturb them. They said we had adopted in Canada a very moderate and liberal policy which did, indeed, surprise them. But what surprised me most was that many economists there, Japanese, European, Latin American and Indian, did not really want to discuss the Canadian case. The Canadian case, to most of them, was not one which would provide them with indications of what they themselves could do by way of policy to prevent the growth of foreign investment on such a scale in their own countries. To them, the experience in Canada, where United States manufacturing and resource development activities have taken over to such an enormous extent, is, indeed, a horrible example, but what they were really concerned about finding was some hint of a policy which might prevent such a situation ever arising in their own countries. In other words, we are a special case.

I might say I agree with those who have expressed the view that the bill before us does nothing, really, to come to grips with the overwhelming problem which faces Canada. The reason for this, to a large extent, is that it attempts to provide solutions to a general, or national problem, by the taking of ad hoc decisions. In other words, each particular takeover is to be examined on its own merits, and if it is found to be in the general Canadian interest it will be approved, otherwise it will not be approved. But I submit to Your Honour that there is no takeover which could not, in a sense, be proven to be an advantage in particular situations. However, this is not where the problem lies. It matters not in whose riding this takes place. On examining a takeover, one looks at the reasons for the takeover. Let us say one finds on the side of the seller, or the Canadian, that he is a man who has grown old and tired, having developed his business. There is no continuity of management. He is responsible for an operation that employs 50 or 160 people, but his sons are not interested in entering the business. Therefore, he has to look around for management.

If it is not accepted that there should be this kind of takeover or sale of assets, then this whole enterprise is going to place in jeopardy the livelihood, the salaries and wages, of the existing employees of the firm. I do not think there is any member of this House who, if he were to act on behalf of such a buyer, could fail to prove that the buyer of such an enterprise could provide more research and development, as well as more capital, than existing entrepreneurs. By providing more employment and more products, he could prove that that particular takeover would be in the interests of that particular locality or region. As I say, that is not the problem that is facing Canada. Our problem is related to what I suppose could be called, not only in the discipline of economics but in

June 5, 1972

other disciplines as well, the fallacy of composition. In other words, you cannot extend from the examination of a particular case a generalization to arrive at a general or national policy.

Let me give the House a simple example. A wheat farmer in the west could decide of his own accord to double the acreage he sows, in which case obviously he would reap tremendous advantages. On the other hand, if all wheat farmers in the west decided at the same time to double their acreage, the disadvantages, the catastrophes and the chaos could be monumental to the industry as a whole. This is what we face in this particular situation. It is not merely a given takeover that is at stake here, but rather the volume and amount of the takeovers that are taking place and indeed are a fact of life in this country that we call Canada.

Let me give the House another example. None of the problems that the United States has had with its balance of payments recently can be attributed to the developing nations. Indeed, the developing nations of this world have helped and saved the United States from having a very much worse balance of payments problem. In each of the last three years the United States drained from its operations in the developing nations in the world more than $4 billion a year. Approximately one-third of this $4 billion was accounted for in an export surplus that the United States had with the developing nations. The other two-thirds was the return on capital, royalty fees, research fees, management fees, and profits pulled out of the developing nations and back into the United States.

Again let me give an example. In the year 1971 United States oil companies invested in Libya $1.8 billion. The profits of those companies amounted approximately to $1.6 billion. What they withdrew was $1.5 billion.

In the over-all structure of relations between the United States and the developing countries, the following summary can be made. Their balance of payments improved initially on merchandise trade and current account by $4 billion. But obviously, the developing countries needed the money to pay for the deficit in their current account so there had to be a capital outflow. What was the composition of that capital outflow from the United States to the developing nations? The United States-and we are just as guilty of this sort of thing-declare that they want to help the developing nations of the world in their current accounts, and they pull out $4 billion. Then, these nations say that somehow this has to be equalized because they have to pay their bills. Therefore the United States replies that it will give them grants in aid totalling approximately half that amount, which is $2 billion. We all know that these grants in aid are tied. What is exported is really equipment and also technology, though technology that is suitable in the United States may not necessarily be suitable in each of the recipient underdeveloped nations. The other $2 billion, to equalize accounts from the point of view of the developing nations of the world, is an increasing outflow of private investment from the United States.

Now, Mr. Speaker, what does this investment do? It can only do one thing: it searches out the ownership of, and title and proprietary rights to, even more resources than the United States already has in each developing country. As a result, the problem accelerates. We can all see that

Foreign Takeovers Review Act

there is a political limit to this which will very shortly be reached in most countries and has already been reached in others-long ago in Cuba, and now in Chile, Peru and the Middle East. So I say that the problem for Canada is not that we should be worrying about a particular takeover, but rather the whole problem of the amount of takeovers and the amount of foreign investment that we have permitted in this country, indeed, that we have encouraged and are still encouraging.

The fallacy of composition is, perhaps, a simple error in logic. Sometimes it can be called sophistry and sometimes deception, though certainly there is no implication of deception here or intention to delude people. However, the problem cannot be solved on this basis. What it demands is an over-all attack on the entire problem of just what Canada's economic objectives are, and how we can best attain them. It is also an examination of the results of a continuation down this particular road and whether it is going to lead us, as indeed it already has to a very great extent, to the position where we can only pay our deficit on merchandise trade and capital account by selling off more and more of our own property. As I say, there is a limit, and in the case of Canada I am sure we will be smart enough to reverse this pattern, even though for most other countries it would already have been well past the point of return.

I ask, is there a policy that we can develop, an over-all policy rather than a policy directed to the examination of a particular merger or takeover between two particular firms? I say that there is such a policy, an over-all policy that demands the integration of all our policies. It demands the integration of our fiscal policy, our monetary policy, our commercial trade policy, our exchange rate policy. We should find this policy and seek the solution to reversing this kind of trend, though not without putting some burdens, stresses and strains on the economy.

I do not think anyone can rightfully claim that this bill comes even close to approaching the real problem. It comes close to discouraging new foreign investment, but it does not discourage new investment of its own accord. Any firm not presently in Canada can invest, which is what the United States wanted to be made quite clear. They said it was fine, that they would not have to buy anyone out, but that they could start up all the subsidiaries they wanted. In fact, the United States goes even further and, by giving all sorts of grants, encourages companies to enter Canada and provide further competition to a manufacturing industry that is already far too heavily concentrated.

With regard to existing investment in Canada, we have already taken other measures to permit expansion at a faster rate than hitherto. There is already more than sufficient foreign investment here in Canada for them in their own innerdynamic way to progress far more rapidly than the gross national product does. In other words, by the proportion by which they do expand more rapidly than the economy as a whole expands, they will acquire increasing control. Some of these measures have even been sanctified in the most recent budget in the granting of two-year writeoffs to firms. The firms who are getting the best of such a thing are the large firms.

June 5, 1972

Foreign Takeovers Review Act

In the population of firms in Canada we may say we control 50 per cent of manufacturing, but the 50 per cent we control are the small and medium-size firms. The 50 per cent controlled largely by foreign capital are part of the largest sector, and these are the firms that can invest $10 million or $20 million and can writeoff such expenditures from capital equipment rather than the profits they make on the Canadian consumer market. In other words, we are digging the pit deeper and nothing in this legislation is in any way going to reverse that.

What we have to come to grips with, and this was quite clear at New York University, is the fact that there are a great many people in this world, including those in Japan and the Common Market, and obviously in the United States, who are convinced that the only way in which a nation can obtain growth is by the use and encouragement of multi-national corporations. They recognize there is growing resentment around the world to activities of such giants. Who do they blame? They blame the people who feel insecure and disturbed because of this.

We hear from distinguished economists such as Charles P. Kindleberger of MIT who says:

International firms stimulate the development of international policies. They leave less room for the independent, idiosyncratic, law-unto-itself national state.

That is what this House is all about.

Raymond Vernon, the distinguished Harvard professor, states:

The basic asymmetry between multinational enterprises and national governments may be tolerable up to a point, but beyond that point there is a need to re-establish balance through accountability to a governing body multinational in scope.

This is what this bill talks about, multinational enterprise being a firm which operates in one country and wants to cross over into your country. Here we have a law for corporations that permits such institutions to live in perpetuity. No one of us here is immortal, and even this institution reviews itself, perhaps for the better, every four years. Every institution we can think of is accountable in some way to somebody except that institution called a corporation, and because a corporation has conquered time, the institution of corporation now wants to conquer space. It wants to be able to go anywhere. It is a kind of pantheism. When it tries to go forward it runs up against a resistance of bodies exactly of the kind we have here in this House today.

Let me get a little closer to the problem. George Ball, a name we know well, in an article referring to the importance of being stateless, that is an international corporation being stateless and subject to nobody, not even its own government, says:

An international companies' act, as I see it, has intrinsic merits. It offers the best means I can think of to preserve the great potential of the world corporation for expanding.

What is he trying to say here? I suggest he is referring to an attempt to create a supranational authority, with a charter that would be granted by the United Nations, which would be above the activities of the different national assemblies across the world. This search for a supranational state is a logical development we are pres-

ently going through. This is an attempt to place what we could call a cosmocorp, whether it is a multi-flag, multibranch, multiinternational or multinational authority, beyond the reach of politics, making it above politics, or making it apolitical.

I will admit that corporate planners may be able to do things better. There is no doubt that they have accumulated in their hands greater resources; capital, technology and even management skills, and they can apply this to given operations, but they cannot decide for a people how their nation's resources should be allocated. That is what a House like this is all about. It is politics that defines what the inhabitants of a state think are the problems that should be solved rather than the multinational corporations, no matter what their claims are to a superior technical nature.

I agree with a free flow of international capital. As an economist I agree with this just as I agree with free trade of goods and products. What is also being advocated today with the free flow of international capital is the idea of a free flow of ownership and property rights. This is a completely different thing.

The United States was built on a free flow of international capital, mainly from the United Kingdom, but there were no property rights involved. This capital was in the form of loans, debentures and bonds to enable the United States to get going, but the ownership, control and equity in the future growth of the United States remained in American hands. This is the kind of consideration we have to give to an over-all strategy in order to come to grips with the problems facing this country.

I have my grave doubts, too, about a great deal of the claims made for this sort of institution. The bulk of investment funds does not come from capital markets, it comes from the consumer; the dollar that you and I pay for whatever product we buy. Some 80 per cent of new capital expenditures are financed by profits retained out of that dollar bill. They are financed by depreciation allowances, accelerated investment allowances, double depreciation and depletion in the case of mineral resources. These are the things that enable corporations to accumulate the money they invest tomorrow.

The actual investment of these funds is determined not so much by what the consumer wants or what the consumer needs, it is determined more with an accent on the growth that the corporation direction wants or for which it is searching. These are the funds that count. It is not the salaries and wages corporations pay in a certain locality or riding that are important. They are important in a limited way, and deadly important to the people who are employed, but the people who are so employed could also be employed by a wise and expansionary government policy doing things that are perhaps more satisfactory to the consumer. The money that is paid the employee is not nearly as important as the money that is retained. These are charges against the dollar for distribution, for royalty fees, for management fees and for research and development, all paid for by the consumer. The profits are made and used to reinvest for research and development, technology, plants and equipment for tomorrow. If you cede this for the whole future direction you give up not only ownership rights to your economy today, you give up

June 5, 1972

ownership rights and the right to direct your economy tor all time.

There is undeniably a tremendous hostility because of the very magnitude of the problem. It will accelerate during the next three, four or five years because at the present time what is worrying the multinational corporations of the world and the three big trading blocs is that an overwhelming proportion of these are owned and controlled in the United States. The Japanese have the funds and the will to acquire their share. They will go searching out. The Europeans will need their share. In this flow of buying out the resources and markets of the world, there will inevitably be a counter reaction of tremendous hostility and resentment. I only hope that when this resentment comes we will have the grace to say it was our fault, mea culpa, mea culpa, mea maxima culpa, and that when finally it becomes a political realization we will say it is something we ourselves should have and could have foreseen and can hardly blame the dependent nations for engaging in it.

I do not want to go any further into the operations of the multinational corporations. I suspect greatly that the claims that are made about the benefits of their technology to countries such as Canada are exaggerated and that if we had a positive economic policy of our own we could easily equal the so-called advantages and expand well beyond them because it is not technical efficiency which counts. It is the relationship of the efficiency to the supply and factors of production of the economy of a country such as Canada. If we rely on the promises of technology we must remember that our problems are much more. The promises of technology really demand tremendous capital and capital is not in surplus in Canada. Normally when you make an economic decision you make it to use to the utmost the factors that are in surplus, as in our case labour and employment, and to husband your resources in the area of capital. You can have a perfectly rational technology and efficiency which on purely technical grounds seems to be superior. If it employs more of the factor that is absent in the economy and less of the factor that is plentiful in the economy then it is not a rational economic decision.

They sell production techniques, but these techniques which they export to Canada and across the world are the production techniques they developed for their own domestic market. That they could be equally suitable to countries all over the world is somewhat doubtful. There is no reason to believe they are. In fact, the introduction of technologies that are superior to the state of the art in many countries creates great strains and stresses which have a distinct impact on the social, cultural and political fabric of each of these countries. As I have suggested we need an over-all attack on the problem. Because the problem is so serious, and so large a part of the population of this country is aware of it and has as they say a gut feeling that something is wrong, I think we need the co-operation perhaps of all parties in developing it. I must simply say that I do not expect that kind of policy to come from what we euphemistically call an establishment here in Canada. I do not expect it. I do not blame the cabinet for this kind

Foreign Takeovers Review Act

of a bill. It is the kind of bill which could be promoted only by the people who are here in the civil service.

You know, Galbraith yesterday talked about the structure in the United States and the symbiosis, as he said, of bureaucrats and the great corporations and the social establishment. Symbiosis I suspect is a good word for shacking up or living together. We have the same situation here. It is understandable. You do not find many deputy ministers talking individually with farmers or small businessmen who have gone bankrupt, had tax problems and perhaps had something to say about the kind of policies which led to this. Or you do not find them talking to small entrepreneurs who are successful. The conjunction here, the meeting of the minds here in Ottawa, is between the bureaucrats in the large corporations and in our very large federal departments. It is understandable. They belong to the same jet set. I do not mean the watering holes of the world but rather the same international conferences in the Genevas, the Tokyos, the Parises or the Washingtons. They meet on the same plane and attend these same conferences and meetings.

As I say, they do not see any representative of the real guts or the vast majority of the people who make this economy go. The president and the vice-president of a corporation and a deputy minister have roughly the same standards of living and the same salaries. They have roughly the same size of organization and the same number of employees. They have a billion dollar budget in each case and perhaps more in some cases, but the relationships and comparisons are reasonably of the same order. They have the same motivation. Their 22,000 employees they would like to see grow to 25,000 tomorrow. That would be a significant indication of their importance. Applied to the private sector they are judged now not by the old classic definition of how well they can handle the assets entrusted to them or the profits made but more on the growth of their assets and the growth of the number of employees. This largely applies to departments. They have the same kind of motivation. They also have the same kind of utter confidence in themselves that they know what is good for people. So you find them not really considering the problems of small business or service industries today but how can they goose the economy with some physical leap forward into technology.

Technology for what? To produce things people do not want. It may be the moon, supersonic aircraft or technology to provide services the people do not want. They have the same priorities for destroyers, CF-5's or hydrofoils. Now, the current one going on is that somehow there is a technology of STOL aircraft which might place Canada in the forefront. The large corporations and bureaucrats get their heads together and talk about sums of $200 million to invest in this project. I do not know why people want to go from Montreal to Ottawa in 48 minutes instead of two hours. I do not see how many people, less than one per cent of the population, would ever take advantage of such a service. However, I can see how the people of Canada would pay out $200 million to provide such things as more clothes, better houses, transportation, food, and the things we need in so many areas of our population.

June 5, 1972

Foreign Takeovers Review Act

But I think the greatest bond of sympathy that I can find between the two groups, a bond of sympathy that does not and cannot exist between the average Canadian entrepreneur or farmer and a civil servant, is that they are not operating with their own money. The ordinary farmer and the middle sized manufacturer is operating with his own money, and right off the bat there is a distinction between him and the civil servant. But there is no distinction between the civil servant at the highest level and the bureaucrat of a large corporation; neither of them is making these decisions for our benefit and neither of them is handling his own money. The vice president of a multinational corporation or his board of directors are not operating with their own funds; they are operating with the funds of the shareholders about whom they could not care less because what they are maximizing is their own expansion, growth, prestige and status, and all that they want to do is to give as little to the people who actually own the company as they possibly can to keep them satisfied. Nor is the civil servant operating with his own money. He is operating with the taxpayers' money. So all of his dreams and visions will not cost him a nickel. There is lots more where that came from.

This kind of bill came out of that kind of environment. It did not come from the cabinet or from the members of the caucus who have a political sensitivity to the problem as it actually is and to the depth, width and breadth of the solutions that are actually needed.

I am sorry to say that I would vote for the bill because it is a small step forward, and something is better than nothing, but I will vote for it on that basis only. But after a long period of gestation, far more than the normal nine months, I would like to say that if this is all that the government can bring forward as a response to the kind of problems and to the depth of the problems that foreign ownership represents for the Canadian people, the government would have been better off not to have brought it forward at all.

Topic:   GOVERNMENT ORDERS
Subtopic:   FOREIGN TAKEOVERS REVIEW ACT
Sub-subtopic:   MEASURE TO PROVIDE FOR CONTROL OF FOREIGN OWNERSHIP OF CANADIAN COMPANIES
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NDP

Max Saltsman

New Democratic Party

Mr. Max Saltsman (Waterloo):

Mr. Speaker, it is always a great pleasure to follow the hon. member for Duvernay (Mr. Kierans). Just before I came into the House the usual conversation took place behind the curtains when some government members, in an attempt to find out how long the debate was likely to last, asked me, "How many speakers do you have?" I said that we had three speakers, four if you count Eric Kierans. I am delighted with the position that the hon. member for Duvernay has taken because in some ways he reflects what has happened to a lot of us. I can remember the time when the hon. member for Duvernay was less concerned about the flow of foreign currency, and in some cases took very strong exception to extreme nationalist tendencies. This has also been the case so far as I am concerned on a number of matters.

We are being pressured at the moment to get this bill through the House. The government obviously wants it as some kind of a showpiece. Why they would think it a showpiece is beyond me, but they seem to feel that it is of some benefit to them to get this measure through. I presume that in their view it is of some benefit to the country to get the bill through. There is some suggestion that the

Finance Committee deal with this bill rapidly and bring it back to the House in time to have it passed by the end of June. I think it would be a terrible mistake to rush this bill through the committee and through the House, since it is of so little value. By getting the bill through we may be doing ourselves a terrible disservice in the sense that we will be undercutting the kind of sentiment which exists in Canada to really do something significant about the matter of foreign ownership.

A number of Liberal party supporters are obviously feeling embarrassed about the position in which they find themselves. I am thinking, for instance, of the hon. member for St. Paul's (Mr. Wahn) and the Liberal members who signed the telegram of the Committee for an Independent Canada. They obviously do not see much value in this bill, yet at the same time they are saying it is better than nothing. Even if it is only a small step forward, they feel the bill should go through. I would like to suggest to you that it is not better than nothing, it is worse than nothing simply because it is an attempt to diffuse this whole issue of foreign ownership in Canada with a bill that will not accomplish anything at all.

If we are going to deal only with the question of takeovers, we must ask ourselves what the urgency is. First of all, there is not a great deal left to take over if we start from that premise, and second, since the takeover aspect represents a relatively small proportion of the increases in foreign ownership year by year, I do not see that the Department of Industry, Trade and Commerce, which is going to have the responsibility for screening the foreign takeovers, will turn anyone down in view of the criteria which have been established. I doubt whether any takeover of any industry in Canada could not be made to fit inside the boundaries of those criteria. In fact, if this bill were legislation today, there would be very little difference in the rate of takeovers that would occur in Canada.

So what is the urgency in passing this bill? If we take a look at the key sectors, we find that most of them, such as newspapers, television, banks, transportation, uranium, power and pipelines are now controlled. There can be no takeovers in these areas without the government's approval. On occasions, when there was an uproar and sufficient concern in the country, the government has stepped in without legislation. They did this in the case of Home Oil, in the case of uranium, in the case of Denison, and in the case of the Mercantile Bank. There was no legislation for the government to use. Where was their authority? Apparently they must have had some authority, unless they were acting illegally, because they moved in and definitely stopped foreign takeovers.

The truth of the matter is that the government now possesses all the power that is required to prevent takeovers in Canada if they chose to exercise that power, but in most cases they simply do not choose to exercise it. What we are being asked to do is take the government off the hook and establish criteria which are so wide that virtually any takeover can be accommodated within the criteria. Then, the government can say that the government has passed legislation and everybody fits the criteria. This reminds me of their good behaviour pamphlet which they sent around to foreign owners of industry, telling them that they should be good boys. I have heard

June 5, 1972

minister after minister rise and say that there was nothing to worry about because they had all agreed to the good behaviour guidelines that we laid down. Of course, this good behaviour did the government a lot of good. These companies applied for DISC and did not even bother to tell the government what they were doing. I suspect that this takeover legislation will serve as nothing more than camouflage to get the government off the hook about doing something about foreign ownership. Frankly, I would prefer to have no legislation at all, rather than this timid, insipid legislation that will do no good. I would prefer to keep the government on the hook, to keep them under pressure and to keep them responsive to the Canadian people. A great deal more would be accomplished in this way.

Everyone faces a dilemma with regard to the foreign ownership issue. People in my party face a dilemma. I do not suggest for a moment that there is total agreement within my party as to how we should proceed and how far we should proceed. There are differences. But there is one thing on which my party is united. There are no more facetious comments, as there have been in the past from the other side of the House, about the waffle movement and about what we are doing with regard to this. There is one thing on which we are all united. All of us are determined that this country is going to remain independent. While we may not all agree on the exact techniques to accomplish these things-that is an on-going debate-in this party, unlike the other parties, there is an absolute determination to do something about foreign ownership and Canadian independence. I cannot say that about the Liberal and Conservative parties.

There is a kind of tragic dilemma that faces many Liberals. I am sure that all of us in this House come to know each other, regardless of the parties to which we belong, and we develop a fair amount of respect for each other despite our political differences. Mr. Speaker, it is tragic to see what is happening to the good Liberals, to those who want to be Canadian nationalists. They want to stay inside the Liberal party. They think that by staying in the party they can exert pressure from within, that they can change the party's course on foreign ownership and strike a blow for Canadian nationalists. But the fact is that all those well intentioned Liberals have failed.

I do not want to talk about my friends in the Conservative party. When it comes to the question of foreign ownership the differences in that party are so deep that nothing seems to emerge upon which we can comment.

Topic:   GOVERNMENT ORDERS
Subtopic:   FOREIGN TAKEOVERS REVIEW ACT
Sub-subtopic:   MEASURE TO PROVIDE FOR CONTROL OF FOREIGN OWNERSHIP OF CANADIAN COMPANIES
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PC

Walter Gilbert Dinsdale

Progressive Conservative

Mr. Dinsdale:

Worry about your own differences.

Topic:   GOVERNMENT ORDERS
Subtopic:   FOREIGN TAKEOVERS REVIEW ACT
Sub-subtopic:   MEASURE TO PROVIDE FOR CONTROL OF FOREIGN OWNERSHIP OF CANADIAN COMPANIES
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NDP

Max Saltsman

New Democratic Party

Mr. Saltsman:

I have explained our differences, and I have been frank about them. You should be frank about your differences in the Conservative party.

Here I can think of my friends in the Committee for an Independent Canada, who sent a telegram to all of us asking us to support a position on Canadian independence, and to take a strong position on foreign ownership. I think of their desperate attempts to justify their political affiliations, at least those who are not in the New Democratic Party, and to reconcile them with their sense of

Foreign Takeovers Review Act

Canadian independence and their concern about the future. I think of candidates like Mel Hurtig and other fine people, trying to walk the line, saying, "We can do it within the Liberal party." The question is: can they? I don't think they can. Here I also think of newspapers like the Toronto Star. No one can say the Toronto Star has not fought as hard as a newspaper can for Canadian independence. But still it supports the Liberal party. When it comes to a question of the fortunes of the Liberal party they forget about Canadian nationalists. Other issues become more important to them. All of their prestige, and all of the words of the best editorial writers they can command then say, "It's again time to vote Liberal."

I can also think of my friend, Eddie Goodman, the former chairman of the Conservative party, trying to do the same thing within the framework of the Committee for an Independent Canada. These are people whose loyalty to their parties is so great-I am not critical of them for that because my loyalty to my party is deep-that it poses a dilemma for them. How do you reconcile your desire for Canadian independence with on-going loyalty to your own party? These people are still waiting for change to be made from within. Apparently all the people I have mentioned have indicated that they are not prepared to change their political affiliations. They have said that they are going to work from within their parties. But can they bring about this change? Can they, in fact, accomplish this? I do not think they can.

The reason is that the Liberals, for one, are immobilized by their own outdated ideology of free enterprise. They will not intervene in the economy. If they will not intervene in the economy, then the cause of Canadian independence is hopeless.

I was quite interested in the references that the hon. member for Duvernay made to the other measures that are necessary-how it is necessary to relate fiscal and monetary policies, and how it is necessary to have some kind of an industrial strategy if we are going to deal with foreign ownership. I concur in those statements because while foreign ownership is a problem it is not the only problem in the management of the economy. Unless the whole problem of foreign ownership is put in the context of what we as a nation desire, what social purposes we have, what kind of society we want to be, what our objectives are, how we are going to relate to all industry and not just to foreign industry, what sort of things we are going to emphasize and concentrate on, and how we will relate our monetary and fiscal policies to these objectives, then we cannot deal with foreign ownership.

We cannot bring in related legislation on takeovers. To what are you going to relate it? Will you bring in legislation limiting the ownership? How does that tie in with your plans? Which industry do you say is not desirable, and which is? How does it tie in with your plans? When you have no plans you have no datum. You cannot make decisions of this type. This is one of the reasons I and many other people continue to support my party. We at least realize that without some degree of planning in our society we cannot do anything about foreign ownership. This is the critical point about the entire debate on the foreign ownership issue. Unless the nationalists are prepared to take this position, then their nationalism will go

June 5, 1972

Foreign Takeovers Review Act

down the drain. They will not succeed. This is the dilemma.

The Liberal does not want to take this position very often. He believes in the market economy. He believes in keeping his hands off things. He wants them to run their normal course without government interference. He does not want to take the hard measures that are necessary. These will be difficult measures to take. Those in charge will have to speak with the provinces. Many differences must be reconciled. Planning is not an easy matter. This is not the kind of planning you impose on people from the top down. That kind of planning is neither acceptable nor workable. You must sit down and discuss these matters with all the people involved.

There are some provinces that do not feel the same way about foreign ownership, that think the more foreign ownership they can attract the better it will be. Can you blame a province with a relatively low level of industrial development for saying, "Look, we are not concerned about the ownership. We know it has certain effects on the national economy, but 20 per cent of our people are unemployed. Anyone who wants to come in here and put up a factory is welcome." This is a serious problem, but it is not an insoluble one if you are prepared to do some planning about your economy, and if you can say, "There are ways we can help."

There is another difficulty, Mr. Speaker. Very often questionnaires are sent out ask people if they are upset about foreign ownership. Almost invariably something like 80 per cent to 90 per cent reply that we have too much foreign ownership and that we must do something about it. But when you ask the critical question, "Are you willing to pay a price to do away with foreign ownership"? the percentage drops enormously. If the question is coupled with some antagonism toward the United States, then the percentage goes way down. That is a characteristic mark of this country. If we are going to take action along these lines, then it is the responsibility of the national government to persuade the people of Canada that we can do something about foreign ownership without being enemies of the United States, and without any substantial reduction in our standard of living, or in providing employment. In fact, quite the contrary, Mr. Speaker, because by taking action in some areas of foreign ownership we can increase the prosperity of Canada. I will come to that argument a little later on.

We have been brainwashed by the myth of the superiority of the international corporation. The American businessman has been told this over and over again by people in the highest places. No less a person than a former prime minister of Canada, bolstered by all the business leaders, high civil servants, and the cabinet ministers who listen to them, has been taken in by this myth. The public have been brainwashed into believing that there is some superior business technology that we would lose if we took action against foreign ownership. I do not think that is really true. Foreign ownership of enterprises in Canada makes us poorer, rather than richer. I was interested to read the remarks of the hon. member for Grenville-Carle-ton (Mr. Blair) as recorded in part at page 2654 of Hansard for May 29. He said:

There is much evidence to show that whether or not enterprises have been owned in Canada is irrelevant to their performance in the interests of Canada.

His authorities were Professor Safarian and Professor Watkins. I know the hon. member and know him to be very careful when quoting. Yet, he was not very careful in his research. I think both Professors Safarian and Watkins dealt with aspects of performance of American as against Canadian companies. I do not think they dealt with the efficiency of corporations. Researches I have asked the Library of Parliament staff to undertake establish clearly, I think, the inefficiency of foreign controlled manufacturing industries which have set up in Canada, as compared with the efficiency of companies, private or public, that have remained Canadian. The preliminary evidence, I do not say it is conclusive, tends to rebut the claim, heard often, that ownership makes no difference to performance or that American-owned companies are superior to Canadian. The most efficient manufacturing companies in Canada, by and large, are those which have remained under Canadian ownership, and the most inefficient are those which come under foreign control and are broken up into branch plant operations. This is not because the Canadian entrepreneur is more talented at organizing than his American counterpart; this has come about because the pattern of foreign ownership in Canada has proven ineffective and inefficient and is not suited to the Canadian market. American companies have tried to create in this country a replica of the United States market, a market almost 11 times our size. If you make a suit that is 11 sizes too big for a man, you can hardly expect him to look good in it or walk well in it. Many sectors of the Canadian economy are poorer, as a result of being foreign owned, than they otherwise might be. I will not deal with the outflow of funds. That question was excellently dealt with by the hon. member for Duvernay (Mr. Kierans).

Having said all these things about foreign ownership, I return to my earlier theme. We need to consider the whole business of ownership in some kind of national, planned context. I am not in favour of the outright prohibition of foreign ownership; nor am I necessarily in favour of licensing arrangements, which are more and more entered into. Sometimes a foreign corporation, instead of establishing a branch plant in Canada, will licence a Canadian manufacturer to produce a commodity in this country. I have seen some licensing agreements; some are worse for this country than the presence of the foreign corporation. For instance, they sometimes insist that the product shall be sold only in the Canadian market, at a price considerably higher than that charged in other countries. In many ways such agreements limit Canadian manufacturers and impose conditions which are little short of slavery. What is worse, since the conditions are invisible, the people of the country are unaware of the difficulties that may be created by such licensing arrangements. Perhaps some licensing is good. Really, I am suggesting that our difficulty is not with foreign ownership alone.

If we pass this legislation and attempt to prohibit takeovers, how can we deal with a company that says, "If you will not let me take over a corporation, I will start a new company." Nothing prevents the setting up of a new cor-

June 5, 1972

poration. What will happen if the new corporation is to do business in an already overcrowded field? What would happen, for instance, if a tire manufacturer were to establish himself in this way? At present, virtually every United States tire manufacturer operates in this country, as well as one from France. The tire manufacturing field is already overcrowded. Permitting industries to be established in an already overcrowded field and thereby permitting an even greater fragmentation of such industries would work a disservice to the Canadian economy. It would not be a benefit.

Also, a company could say, "Fine; although we are not allowed to take over a company, we will set up in competition to it and drive it out of business." That company may have a thousand times the assets of its competitor; it could lower the price of a commodity and drive its competitor out of business. Actually, big, foreign corporations have available so many options that the takeover route is sometimes the kindest of all and may be preferred to driving another company out of business. How will the government decide, when faced with such situations, if foreign corporations are or are not to be allowed to operate in this country? I do not think the government will be able to decide in these matters. I think it will rubberstamp every request for a takeover that comes before it.

In opening the debate for my party, my leader made an interesting suggestion that has been made by others. He suggested that we ought to use the money in our foreign exchange reserve fund to buy back some Canadian companies. This would accomplish a number of things. There is approximately $5 billion in the fund. It is a source of embarrassment to us. If we took that $5 billion and went to the New York Stock Exchange, say, and began buying shares in some American corporations or repatriating foreign obligations, we should obtain a number of benefits. First, we would rid ourselves of that embarrassing fund of money that is not doing us any good. I am, of course, talking about our foreign exchange reserves. If we were to participate in this kind of "buy back", we should lower the value of the Canadian dollar and stimulate manufacturing in this country. Of course, no doubt some hon. members think that this is such an unusual scheme that it has not been tried. Well, let me say Japan is carrying on a somewhat similar policy. Japan is in a position similar to Canada's, in that Japanese currency is appreciating rapidly. This has resulted in unemployment and in pressures being exerted in that society. That country also has some foreign debt. It is taking money that has been built up in its foreign exchange reserves and is repatriating that foreign debt. I think we can do much the same. Let us use imagination and exercise courage.

It is important to plan because, today, ownership is not as important as it once was-at least, it is not all that important. Whether companies are foreign-owned, domestically owned, publicly owned or privately owned, power in a democratic country, as people become more involved in the political process and understand better what is happening in politics, rests more with the people. It is the government of Canada, by and large, that possesses overwhelming power, not General Motors. We have recently witnessed confrontation between the public power and private power. We must not be confused merely because the government has backed down. Sometimes, it chooses

Foreign Takeovers Review Act

to back down. When the government does not choose to back down in a confrontation with the private sector, the government, exercising the power of the people through representatives elected to Parliament, wins. We have seen this often. More important than legislation such as we are now discussing is the willingness of the government to act when the clear necessity arises to act within the context of an over-all plan.

Some foreign ownership, I think, may be advantageous for us. I think of some areas in which foreign ownership is helpful. To the extent that it is helpful for this nation, I say, why should it not be permitted here. On the other hand, much foreign ownership is not of advantage to Canada. You know, the old idea "The more foreign ownership, the better" has caused us lots of trouble. We can no longer make that assumption. What we have to do from here on is ask foreign ownership to make its case because a case has not been made with the philosophy of the more foreign ownership the better. This is creating a lot of difficulties for this country.

We should be prepared to look at foreign ownership, but first it has to make its case, not just on a takeover because that does not relate to anything. It has to make its case in terms of its expansion from the use of internal funds and with regard to whether it is going to open a new factory. We have never before asked that that be done. We have not created a framework whereby we can judge the case it is trying to make or created a mechanism whereby we can tell what benefit to Canada their operations will be.

We all know that no country is completely free. As much as I would like to see it completely free, with no strings attached, just as I as an individual would like to be completely free with no strings attached, there is not this kind of complete freedom for anyone or any country. We want a world where we are interrelated, have some concern for each other and want to help each other. There is going to be some interdependence. The crucial question is not whether we are totally free, but the extent to which in this kind of interlocking world we can preserve the maximum freedom to pursue our own objectives. That is becoming more and more difficult with the high degree of foreign ownership in this country.

This government does not seem to have the foggiest notion about how to proceed with the problem of foreign ownership. On one hand, they bring in this legislation which states that any company with assets in excess of $250,000 under takeover threat is going to be examined. How do you determine that? There are many ways this can be hidden from the government if a company so chooses. The corporations Act does not call for the disclosure at the $250,000 level. It must be in the millions before disclosure is required. The Canada Development Corporation cannot step in and take such action. It cannot purchase anything unless the assets are in excess of $1 million.

We had the Unemployment Assistance Act. When the government of the United States imposed a 10 per cent surtax, instead of taking other action that was open to it, this government, in a panic, said "Don't worry about it. If you lose any benefit, we will give you a benefit. We will up

June 5, 1972

Foreign Takeovers Review Act the ante." With the reduction of the corporate tax to 40 per cent, this has now been put into permanent legislation. That was an attempt to outbribe the Americans under the DISC program. I do not think we can operate in this way. There is no indication whether or not we want all these companies, whether they are worth bribing or of what value they are to us. It has come to the point where the government is making such substantial bribes that we wonder whether the whole thing is worth it. We do the same under DREE. There is increasing evidence that these companies would have located without the bribes.

There is no real science policy. I notice that the Minister of State for Science and Technology (Mr. Gillespie) is in the chamber. I have been looking to him for great things. To date, all I have been getting has been nice speeches crossing my desk, but no science policy. We were hopeful that once a member of the cabinet was designated to be responsible for science, we would hear something. If something is going on, we are not hearing about it. I suspect there is still no policy and that we are still passing out money in the vain hope that perhaps some of it will do some good.

The government is either walking or running around, depending on their energy on any given day, in a grand flap. They do not seem to know where they are going or what they are doing. The air force used to call it "situation snafu". That means it is all "fuddleduddled". I remember what "snafu" means.

Topic:   GOVERNMENT ORDERS
Subtopic:   FOREIGN TAKEOVERS REVIEW ACT
Sub-subtopic:   MEASURE TO PROVIDE FOR CONTROL OF FOREIGN OWNERSHIP OF CANADIAN COMPANIES
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PC

Robert Jardine McCleave

Progressive Conservative

Mr. McCleave:

Fouled up is what you mean.

Topic:   GOVERNMENT ORDERS
Subtopic:   FOREIGN TAKEOVERS REVIEW ACT
Sub-subtopic:   MEASURE TO PROVIDE FOR CONTROL OF FOREIGN OWNERSHIP OF CANADIAN COMPANIES
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NDP

Max Saltsman

New Democratic Party

Mr. Saltsman:

They are more careful of their language in the air force than in the House of Commons, which is saying something.

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Subtopic:   FOREIGN TAKEOVERS REVIEW ACT
Sub-subtopic:   MEASURE TO PROVIDE FOR CONTROL OF FOREIGN OWNERSHIP OF CANADIAN COMPANIES
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PC

Walter Gilbert Dinsdale

Progressive Conservative

Mr. Dinsdale:

The gentlemen of the air force.

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Subtopic:   FOREIGN TAKEOVERS REVIEW ACT
Sub-subtopic:   MEASURE TO PROVIDE FOR CONTROL OF FOREIGN OWNERSHIP OF CANADIAN COMPANIES
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NDP

Max Saltsman

New Democratic Party

Mr. Saltsman:

It is for many of these reasons that I feel the legislation is unsatisfactory and should not be passed. Therefore, I wish to move the following amendment, seconded by the hon. member for Regina East (Mr. Burton):

That Bill C-201 be not now read a second time, but that it be resolved that in the opinion of this House the government should give consideration to the introduction of a measure providing for an independent review body answerable to Parliament with power to limit and control new foreign investment in Canada and the expansion of foreign-owned corporations already established in this country, as well as the take-over of existing Canadian corporations.

Topic:   GOVERNMENT ORDERS
Subtopic:   FOREIGN TAKEOVERS REVIEW ACT
Sub-subtopic:   MEASURE TO PROVIDE FOR CONTROL OF FOREIGN OWNERSHIP OF CANADIAN COMPANIES
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?

Some hon. Members:

Hear, hear!

Topic:   GOVERNMENT ORDERS
Subtopic:   FOREIGN TAKEOVERS REVIEW ACT
Sub-subtopic:   MEASURE TO PROVIDE FOR CONTROL OF FOREIGN OWNERSHIP OF CANADIAN COMPANIES
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LIB

Russell Clayton Honey (Deputy Speaker and Chair of Committees of the Whole of the House of Commons)

Liberal

Mr. Deputy Speaker:

Order, please. The Chair would like assistance on the procedural acceptability of the amendment moved by the hon. member for Waterloo (Mr. Saltsman). Hon. members may argue that it is declaratory of a principle in opposition to the principle of the bill but even if that is the case, and I do not admit it to be at this point, it does seem to me that the proposed amendment goes considerably beyond the scope of the bill which we are now considering. It deals with the expansion, for example, of foreign-owned corporations already established in this country. I cite that only as an example that comes to mind from taking a quick look at the proposed

amendment. I would be very pleased to have the assistance of hon. members.

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Subtopic:   FOREIGN TAKEOVERS REVIEW ACT
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LIB

James Alexander Jerome (Parliamentary Secretary to the President of the Privy Council)

Liberal

Mr. Jerome:

Mr. Speaker, as might befit the occasion, the amendment is an ingenious attempt at orderliness, but I submit that it is procedurally unacceptable for two or three reasons. First, if the amendment is accepted, it would raise a most obvious difficulty in that it proposes the establishment of an independent review body which is answerable to Parliament. This body would have the power to limit and control, not only the subject matter that is envisaged in the bill, but a wide range of subject matters.

I think it is accepted as a matter of course that if such a body is to have any function and power, it would have to be supported by a staff and secretariat in order to be competent and operate as would be envisaged by the motion. The body would have to be staffed by talented, capable economists and experienced persons who would command a substantial salary and require staff to support them. Obviously, there would be a considerable expense to the public treasury which is not envisaged in the recommendation from his Excellency. It cannot be seriously argued that if such a body were set up it would not create, or require, that sort of expenditure; the hon. member would not suggest that it would act on a voluntary basis and that its support staff would do the same. So, there is a fundamental difficulty.

In addition, I would submit two further considerations. First, the question immediately arises whether the amendment is really opposed to the principle of the bill, as an amendment on second reading must be. I am sure the hon. member and his colleagues do, in fact, accept the principle that control should be exercised over takeovers by foreign investors of undertakings in Canada. So what they are really saying is that they agree with the basic principle of the bill calling for control, but require, or suggest, that control be exercised by a different body in a different way and that it be exercised over a wider range of transactions than presently contemplated. In short, they are saying that the principle of the bill is acceptable but that its provisions do not go far enough.

The precedents are so clear as to scarcely need citation. In this situation, amendments of the kind the hon. member has in mind are not in order, for the obvious reason that if the principle of a bill is accepted, specific proposals can be examined in detail during the clause by clause study in committee at which time amendments can be put forward. In addition, amendments of this sort can be introduced at the report stage to flesh out the skeleton of ideas now before us-amendments to clauses or the addition of further clauses to the bill to accomplish the objective the hon. member wishes to pursue. In other words, an attempt is being made here to propose amendments to the bill by the device, not of moving such amendments now, which would be clearly out of order, but by seeking to amend the motion for second reading and thus having the government consider the introduction of a totally different kind of measure. The device of referring this back to the government is, therefore, a means of getting around difficulties which would arise in making

June 5, 1972

specific amendments to the bill itself; it is an attempt to do indirectly what cannot be done directly.

I submit, therefore, that the proposed amendment is clearly out of order. It is obviously irregular to go into the merits of the provisions of a bill at this stage, yet this is what the amendment would envisage. A third difficulty is that it goes totally beyond the scope of the bill itself. It goes beyond the scope of the recommendation, as I have said. For all these reasons, I submit that the amendment is out of order.

Topic:   GOVERNMENT ORDERS
Subtopic:   FOREIGN TAKEOVERS REVIEW ACT
Sub-subtopic:   MEASURE TO PROVIDE FOR CONTROL OF FOREIGN OWNERSHIP OF CANADIAN COMPANIES
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NDP

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

New Democratic Party

Mr. Knowles (Winnipeg North Centre):

Mr. Speaker, may I say, first of all, that some of the arguments used by the Parliamentary Secretary to the President of the Privy Council may have merit. There is one he used, however, which can surely be disposed of quickly. In his opening remarks, he suggested that the amendment would involve the expenditure of money and was out of order on that ground. I would draw to his attention, and to yours, Mr. Speaker, that the whole of the amendment is governed by the phrase "in the opinion of this House the government should give consideration to the introduction of a measure-". It is an understanding as old as this Parliament, Mr. Speaker, that when a member asks the government to give consideration to something, it is not an instruction. Therefore, acceptance by the Chair of this amendment, or its passing, would not be an instruction calling for the expenditure of money; it would only be an expression of opinion that consideration be given to the proposal set out in the resolution. I put it to you, therefore, that the argument that the amendment proposed by my hon. friend is one involving the expenditure of money does not carry any weight at all.

The parliamentary secretary had a good deal to say about the fact that because the amendment suggests things which go beyond the present bill it should not be put forward now. He invited us to wait until we get into committee, or to the report stage, or to third reading. I suggest to him, since he is fast becoming No. 1 or No. 2 in the procedural efforts from that side of the House, that if we sought to do these things at the committee stage or the report stage he would be the first to get up and say we could not do them because they went beyond the provisions of the bill.

I have dealt with these matters first because I do not believe them to be serious, as is the basic point which arises with increasing frequency as we try to move reasoned amendments. Although there are a hundred years of precedents in this area, it strikes me we have developed some restrictive jurisprudence in the last few years. For example, it now seems to be established by the Chair that the mover of a reasoned amendment must not only be in direct opposition to the bill, but that he must be opposed to the principle of that bill. If that is his position, the mover of such an amendment is then entitled under the terms of Citation 382 of Beauchesne, Fourth Edition, to move an amendment setting out the reasons he is opposed to the principle of the bill and suggesting other ways of dealing with the matter. My hon. friend, the member for Waterloo (Mr. Saltsman) has made it clear that he is opposed to this bill. He even went so far as to say that it is not a case of its being better than nothing-it is worse than nothing.

Foreign Takeovers Review Act

However, I am prepared to admit to Your Honour that you sometimes say it is not enough for us to express opposition to the bill; we must be opposed to its principle. Well, one of the things which is sometimes a little difficult to sort out is the principle of a bill. What is the principle of the bill before us? One might easily say that it does not have any, but that is hardly a procedural point. The principle of this bill is the provision of an arrangement under which a Minister of the Crown may review takeovers of Canadian companies already established in Canada. That is all it does. We are opposed to that principle. We think that in its place Parliament has the right to ask the government to bring in a bill to provide for foreign investment, foreign takeovers, and the extension of foreign ownership or foreign influence in Canada, to be reviewed by an independent body-not just by a minister-that is answerable to Parliament.

It is because we think that that alternative, while it is in the field of foreign investment and foreign ownership, is so distinctly opposed to the principle of this bill that we contend it is the type of reasoned amendment that Your Honour ought to consider very seriously, even in the light of the dicta that have been laid down by the Chair in recent weeks. There is no question about our stand on the bill. We think it is worthless and we intend to vote against it. We think that, in principle, it is wrong to handle this matter by putting this namby-pamby power in the hands of a minister. We think it is wrong in principle to confine activities under legislation of this kind to one area only.

Having stated our opposition to the principle of the bill and to what it tries to do, we have proposed, as we think is our right under citation 382, an alternative; and our motion asks the House to call upon the government to give consideration to that alternative. Therefore, Mr. Speaker, because this is an alternative and is presented by members who want to see this bill proceed no further; we contend that the amendment meets the terms of a reasoned amendment and should be put to the House.

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Subtopic:   FOREIGN TAKEOVERS REVIEW ACT
Sub-subtopic:   MEASURE TO PROVIDE FOR CONTROL OF FOREIGN OWNERSHIP OF CANADIAN COMPANIES
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LIB

Russell Clayton Honey (Deputy Speaker and Chair of Committees of the Whole of the House of Commons)

Liberal

Mr. Deputy Speaker:

If there are no other members who would like to assist the Chair on the procedural argument, I should like to thank the hon. parliamentary secretary and the hon. member for Winnipeg North Centre for their assistance on the question whether or not this is a reasoned amendment which the Chair should accept as such. When the amendment was proposed by the hon. member for Waterloo (Mr. Saltsman) I indicated that I had some doubt whether it was in fact a reasoned amendment as defined by the authorities which bind the Chair. Despite the very lucid and helpful arguments of the hon. member for Winnipeg North Centre, I must tell the House that he has been unable to convince me that this amendment does meet the tests required to make a reasoned amendment acceptable to the Chair.

I think there is no disagreement on the authorities; the parliamentary secretary dealt fully with them. The hon. member for Winnipeg North Centre stated-and I agree with this-that a reasoned amendment must be declaratory of a proposition that opposes the principle of the bill before the House for second reading. This, of course, is very well established in May, in Beauchesne and in the precedents which the Chair must follow.

June 5, 1972

Foreign Takeovers Review Act

I should like to deal with this matter firstly on the basis of whether or not the proposed amendment is in opposition to the principle of the bill. With respect, I do not find that it is. The title of the bill is "An act to provide for the review and assessment of acquisitions of control of Canadian business enterprises by certain persons". I think I would fairly describe the proposed amendment and the argument of the hon. member for Winnipeg North Centre if I were to say that he is proposing another way, an enlarged or different way, in which to achieve the same objective and also to do other things. If this is the case-and I believe it is-I do not think he is opposing the principle of the bill but is suggesting another way in which the objective of the bill might be obtained. On that basis, I would have to say that I cannot accept the proposed amendment.

The parliamentary secretary raised two more points. I agree with his first point that the proposed amendment does seem to go beyond the scope of the bill. It not only suggests an alternate way of dealing with the matter with which the bill attempts to deal; it also suggests that the independent review body would deal with other matters as well. I mentioned before the expansion of foreign owned corporations already existing in this country which is referred to in the proposed amendment. It would seem to me that that provision goes beyond the scope of the bill before the House.

If I may deal with the third point for the record, it was argued by the parliamentary secretary that this proposition would involve the expenditure of funds. I would agree with the hon. member for Winnipeg North Centre on this point. The amendment is merely asking the government to give consideration to such expenditure, and that is all. However, that is not the point on which my decision turns and I refer to it only because both hon. members who argued the case referred to it.

For the two reasons I have mentioned, I very much regret that I cannot accept the proposed amendment as a reasoned amendment that comes within the rules.

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Subtopic:   FOREIGN TAKEOVERS REVIEW ACT
Sub-subtopic:   MEASURE TO PROVIDE FOR CONTROL OF FOREIGN OWNERSHIP OF CANADIAN COMPANIES
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June 5, 1972