Mr. Pepin:

It means those that are involved in that takeover, of course.

Mr. Lambert (Edmonton West):

The provinces?

Mr. Pepin:

Of course. But they are not necessarily parties to that takeover. They can very well be interested in those takeovers. But I am trying to sum up the debate now, so that I will not have to repeat it.

I would also like to know how, according to the amendment moved by the hon. member for Fundy-Royal, it will be possible to determine the provinces-

"-likely to be significantly affected"

Mr. Lambert (Edmonton West):

Which states quite clearly what is going to be determined-

"significant benefit to Canada"

Mr. Pepin:

But I mean that in many cases, a province may quite well claim to be-

"significantly affected"

-even if its interest is rather marginal. Then a conflict may exist.

What is even more important is that situations may arise where the interest of a province or of a group of provinces will obviously be poles apart from that of another province or group of provinces. Then the mendatory formal consultation process might very well amount to a federal-provincial conference without a very clear decision being reached at the end of the debate.

Anyway, I wanted these arguments to be on record. I also wished to point out the dangers of this formal consultation as implied, a few moments ago, by the hon. member, that is to determine when a consultation is valid and when it is not. To force the central government to consult with the provinces or vice versa amounts to virtually including as a prerquisite for a marriage contract that love should exist. All this is somewhat redundant.

At all events, I wanted to prove that if this consultation were mandatory, it might create real problems.

As for the second part of the amendment moved by the hon. member for Fundy-Royal, it reads as follows:

-the effect of the acquisition on the industrial and economic policies of each such province.

This wording-if I may be a bit harsh-is defective since the problem is not to know, what might be the effect of this acquisition on the industrial and economic policy of the province, but whether this acquisition is compatible with the industrial and economic policy of the province or provinces involved.

I simply point this out to show that the wording of this amendment is somewhat defective, at least in my opinion.

Mr. Lambert (Edmonton West):

Yes.

Mr. Pepin:

I hesitate because I thought the hon. member for Edmonton-West, who is very keen on such shades of meaning, would be pleased and would appreciate and admire others when they seek to follow his good example.

Mr. Speaker, in any event, even there, there are some hazards. Why? Because the wording of the amendment of the hon. member for Fundy-Royal would require the federal government to implement those provincial industrial and economic policies with regard to certain takeovers. Therefore, one could very well say: You have a very poor knowledge of our policies! Why don't you mind your own business?

Mr. Lambert (Edmonton West):

What are you going to do now?

Mr. Pepin:

Mr. Speaker, all this shows that the problem is much more complex than would appear at first sight. My remarks were intended to show that considerable difficulties do exist.

However, I do not see, quite frankly, how we could ignore economic and industrial policies in the provinces affected by a takeover, especially in the very province where it happens. And this simply because the purchaser, the one who takes control, first of all will have clearly to understand and afterwards take into account the provincial policies in the industrial and economic fields.

The problem in such acquisitions of control is not one of impact on the economic policy, but rather of consistency between the takeover and the economic and industrial policies in the province or the provinces involved.

Mr. Speaker, all I want to say concerning compatibility is that those responsible for administering Bill C-201 will necessarily have to take it into consideration, "compatibility" and "taking into consideration" being the two key words.

Mr. Speaker, I think that one could very well assume that. One can also say so. I have handed to my two hon. friends copy of a possible amendment. If they are interested and wish to support it, I am ready to introduce it, by unanimous consent of the House. As a sixth factor or, still better, as a complement to the fifth factor, that is compatibility of the acquisition with the industrial and economic policy of the federal government, one could add the following:

(e) the compatibility of the acquisition with national industrial and economic policies, taking into consideration industrial and economic policies of any province likely to be significantly affected by the acquisition.

July 4, 1972

There it is. If my hon. friends are in favour of this amendment, I am ready to move it since it represents the situation which will in fact exist when the bill C-201 becomes law.

Mr. Speaker, the hon. member for Edmonton West asked who will administer the Act? He is also concerned as to whether we will have enough expertise to overcome the complexity of situations that will have to be faced. I think the answer is yes. There are in the department people who are competent enough, I would even say quite competent, and of course, we will call upon all the other departments. The consultation process will also give us access to the provincial expertise and if we should need more than that, we will call upon the hon. member for Edmonton West to enlighten us on some particularly difficult aspects of this legislation. Of course, I am saying this with a smile, Mr. Speaker. The department and the minister are aware that the legislation will be difficult to administer and they will use "all the government's lights" and even those of private enterprise in order to clarify the many mysteries to which the hon. member for Edmonton West referred.

The hon. member for Edmonton West was also wondering with whom we would consult at the provincial level, when the need for consultation arises.

In my opinion, the answer is very simple. It will be up to a province to decide which one of its ministers will deal with the federal minister and his officials. I think it is customary for provincial premiers to write to the Prime Minister, as it happens frequently enough, as follows: My Minister of Federal and Provincial Affairs will consult with the responsible federal minister, or conversely, the Prime Minister of Canada indicates which of his ministers will participate in some federal-provincial negotiations. I do not expect difficulties to arise but, as a matter of principle, such talks should be held between the Ministers of Industry, Trade and Commerce on both the federal and provincial levels, except when a province objects to it and prefers to deal through its Minister of Federal and Provincial Affairs which is a department already existing in some provinces.

Mr. Speaker, I have attempted to show why the federal government could not commit itself to compulsory consultation through an understood or expressed right of veto. However, I have tried to indicate that informal consultations on takeovers, as well as generally on the whole of economic problems, are a foremost concern for the federal Minister of Industry, Trade and Commerce. I have proposed an amendment which could make matters a little more formal if hon. members so desire.

Mr. Robert McCleave (Halifax-East Hants):

Mr. Speaker, the minister has made a suggestion on how some of the objectives contained in the two amendments before us could be achieved. In a moment I will give what I believe will be the answer to the Official Opposition to his suggestion, but first I wish to emphasize that the hon. member for Fundy-Royal (Mr. Fairweather) was on the right track when he suggested, in his amendment, the setting up of a process of consultation.

Foreign Takeovers Review Act

These days all provinces have a pretty heavy stake in industrial development. I know that the provinces in Atlantic Canada certainly do. We are all hungry for capital, for business, for the creation of jobs, and we set no national or parochial limits on where we may go to obtain the necessary funds. So, it is a matter of serious consequence to us whether any of the help that is given to industries which may come to our provinces will clash with some national policy administered by a government that may or may not be friendly to the interests of our regions.

The hon. member for Fundy-Royal and the hon. member for Waterloo (Mr. Saltsman) have made valid points in the suggestions they put forward. The question really boils down to whether there should or should not be consultation when the minister and his department administer this legislation. While he has rejected the process of consultation, the minister at least has shown some spirit of co-operation in his proposed amendment. Perhaps I should read the English version because when it was read in French by the minister the interpretation did not come through quite as we envisaged it. The English version would be to strike out lines 25 to 27 on page 2 and substitute the following:

(e) the compatability of the acquisition with national industrial and economic policies, taking into consideration industrial and economic policies of any province likely to be significantly affected by the acquisition.

At least there would be a direction to the minister and his officials. If they exercised this function in a mean way rather than a generous way, or in a way that was not within the spirit of the proper operation of the legislation, they could be held to some kind of account, either in Parliament or in a parliamentary committee, and eventually the country would judge them for being cavalier or contemptuous with respect to the position of any province. This amendment provides a bridge toward the position staked out by the hon. member for Fundy-Royal and the hon. member for Waterloo. It does not go all the way. But around here, no matter how hard we grumble, we are conditioned to accepting the proferred half-loaf, and so on behalf of myself and my colleagues I say that we would be prepared to see the withdrawal of the two other amendments and acceptance of the one suggested by the minister.

Mr. John Burton (Regina East):

Mr. Speaker, I think it is useful that the hon. member for Fundy-Royal (Mr. Fair-weather) and the hon. member for Waterloo (Mr. Saltsman) presented their motions for our consideration. The government's record in dealing with the provinces on the question of foreign ownership has been most inadequate. I want to make it clear that I disagree very strongly with the stance taken by some provincial governments on this matter. As the minister knows, some provinces have protested that the legislation now before us is inadequate, while other provinces do not want to do anything that would scare off foreign capital. Indeed, I am sure that some provinces would prefer to take a more reasonable stance within the framework of developing a better Canada. The fact that they feel forced into taking such a stance reflects the bankruptcy of the federal government's policy when dealing with such things as establish-

July 4, 1972

Foreign Takeovers Review Act

ing an adequate Canada Development Corporation, an adequate regional development policy and in terms of developing alternate sources of capital for investment purposes in Canada.

Dealing with the amendments now before us, I agree with the contention which has already been made that we cannot simply ignore the role of the provinces in developing a national policy for a sound and strong Canadian economy controlled by Canadians. If we are to achieve this, we must take the interests of the provinces into account and this means regional interests. We must also take into account the powers that the provinces hold in a number of fields, the concerns that they have and the stresses and strains that are imposed upon them.

When the government announced its policy last May, after a long gestation period, there was no mention of the role of the provinces or how they would be involved with the federal government in carrying forward this policy. The position was the same when the legislation was introduced, and even when it came forward for second reading, but the Prime Minister (Mr. Trudeau) said that after all the provinces could introduce their own legislation. Mr. Speaker, how can a province introduce adequate legislation to cover the problems that we must be concerned with in the field of foreign ownership and foreign control, including takeovers, unless it has some sort of framework within which to establish that legislation? The Prime Minister's statement, which he made on several occasions, is meaningless unless we have federal initiatives in this field. We have heard nothing about a joint federal provincial conference to study takeovers or the broader framework that we have here, and nothing about an effort to orchestrate a policy across Canada. I acknowledge the difficulties of producing a consistent and coherent policy across Canada.

Finally, it would appear that the government felt it had to respond to some of the pressures placed upon it or upon the Minister of National Revenue (Mr. Gray). He was sent on a mission across Canada to consult with the provinces about a month and a half after the legislation was introduced. He was to explain it to the provinces to try to clear up some of their concerns. When the Finance Committee was considering this bill, it was suggested that the Minister of National Revenue might be called so that the committee could learn what he found out in his consultations with the provinces. The government members of that committee did everything they could to prevent this but nevertheless, on June 19, the minister appeared and presented an interesting rationalization of the limited action being taken by the government. This must have been difficult when one considers the total study for which he was responsible. However, he made a brief opening statement to the committee urging support for the bill, but made not a single reference to the fact he had been holding consultations with provincial governments about it. Of course, it did not take committee members long to put questions to the minister about these consultations. His reply was that his discussions with his provincial counterparts and provincial premiers were on a government to government basis and therefore considered to be confidential. This is ridiculous, Mr. Speaker.

The minister later stated that at no time had it been indicated to him that he was expected to say anything about his trip across Canada to consult with the provinces. He said that he had received an oral communication from the chairman of the committee asking him to appear, but there was no formal request to talk about any particular aspect of the bill. This is pretty far fetched when it was obvious that it had been made clear in committee why we wanted the minister to attend. I suggest that the minister's attitude is hurting federal-provincial relations which are difficult enough. The minister indicated that he would be consulting with the provinces whenever possible, but he did not want to be tied to an obligation to consult with them.

I was very interested in the proposed amendment which was placed before the House by the minister a few minutes ago. I believe I can say on behalf of my colleagues that this is an improvement in the particular clause to which it refers. When assessing a proposed acquisition, in addition to taking into account the compatibility with national and industrial economic policy, this amendment requires the minister to take into consideration the industrial and economic policies of provinces likely to be significantly affected by the acquisition. I think we recognize, in this way, some of the regional characteristics of Canada and some of the regional considerations which the minister, quite legitimately, must take into account. I must say in all honesty that this amendment will not make a fundamental difference to the legislation before us and will not result in any basic change in our stand on the legislation. This, still, will be a most inadequate piece of legislation. It will still be totally inadequate although, in terms of defining the types of factors the minister has in mind, and I am referring to one of five points, the minister has made an improvement in that particular wording.

I prefer the wording the minister proposed to the wording proposed by the hon. member for Fundy-Royal (Mr. Fairweather) in Motion No. 4, as originally placed on the order paper. Although we might be sympathetic towards the amendment that was proposed by the hon. member for Fundy-Royal, that particular wording tended to place some degree of paramountcy on the views of the province of provinces concerned instead of taking national factors into account and giving them paramountcy. Really, I prefer the minister's wording to that originally proposed by the hon. member for Fundy-Royal.

May I raise another point? By proposing this amendment, the minister has committed himself to consultation with the provinces. I do not see how he can say, in future, that he has taken into consideration the industrial and economic policies of any province affected by a proposed acquisition unless he has carried on a process of consultation with that province. Actually, I suggest that he has committed himself to that course of action. If that is so, I put it to the minister that, although there may be some technical considerations involving the amendment moved by my colleague, the hon. member for Waterloo (Mr. Salts-man) which have not yet been taken into account, why could he not remove any doubts about the matter by accepting our motion No. 18. Perhaps, if the minister has

July 4, 1972

some improved wording in mind and wants to make some changes, why could he not do that? Why can he not accept the principle embodied in motion no. 18 and include it in the legislation?

The principle of the amendment is that the minister will consult the provinces when he is carrying out any sort of meaningful review of a proposed acquisition. Why could the minister not accept this principle instead of rejecting it out of hand? I suggest it would be an improvement. I want to co-operate with the minister. I always want to help him, as he knows. I suggest it would be helpful to the legislation the minister is interested in if he were to accept motion no. 18, or the principle of it, because that acceptance would remove one of the emotional roadblocks that may be encountered from time to time in connection with the administration of this legislation.

Then, there is something to be said for the amendment the minister has proposed. In dealing with this entire question, it is vitally important for us to give adequate consideration to the role that is to be played by the provinces. We must consider the concerns, interests and powers of the provinces in dealing with the economy of our country. Neither the federal government alone nor the provincial governments by themselves can find adequate solutions for our national economic difficulties. More and more we shall need joint federal and provincial planning for our economy. The efforts of the provinces and of the federal government will need to be orchestrated, so to speak, with the federal government playing, quite rightly, the central role. Often the federal authority must play the role of initiator. If the federal government is to take account of the concerns and aspirations of the entire country it must, in any action, take into account the legitimate regional concerns of the various parts of Canada. With that in mind I hope the minister will, in addition to responding as he has to the motion that is now being considered, respond favourably to the other amendment proposed by my colleague for Waterloo.

Hon. Hugh John Flemming (Carleton-Charlotte):

Mr. Speaker, I wish to make some observations in connection with the motions presently before the House. I think every member of this House must pay a great deal of attention to the provisions embodied in Bill C-201, since it affects the interaction between the federal authority and the various provincial governments in a most important area. So, in making some observations relative to these proposed amendments I am conscious that there are many avenues of consideration in connection with this subject matter which affects the unity of Canada. We must keep in mind that we live in a large country. The distance from sea to sea is in the neighbourhood of 4,000 miles. I do not know how far it is from the forty-ninth parallel to the Arctic Circle; certainly, it is a great distance. In a country with an area of nearly 3.5 million square miles, with various regions which produce such varieties of goods, products of the soil, products of the sea and products of the forest, it is most difficult to produce legislation that can be uniformly applied.

The present minister, or any other minister, must administer such legislation in the general public interest and bear in mind, at the same time, that there is great variation between the different parts of Canada. Since

Foreign Takeovers Review Act

Canada is such a vast country, we must show a great deal of sympathy for the minister. The minister in turn, I am sure, listens sympathetically when we bring before him the various views held by the various regions of the country from which we come and for which we are responsible. It is difficult to enact a statute which will have uniform application across the country. I acknowledge that. It is difficult for the interests of all to be considered. In the final analysis, any decision of this sort must combine, in fairness, the interests of the regions with the national interest. When you try to combine the interests of all the regions of this country, you are apt to run into difficulties. That is what we are discussing in this House at present.

The hon. member for Edmonton West (Mr. Lambert) suggested, and I agree with him to a great extent, that the government is trying to make slaves of people for the benefit of a collective body known as the government. It is saying to the people concerned, "You must prove, to the satisfaction of a group we will select, that what you contemplate doing is definitely in the public interest." The hon. member for Edmonton West suggests that the people concerned ought to say to the government, "This is what we propose to do," and it is up to the government to show that the takeover is not desirable. I think I have interpreted correctly the remarks of the hon. member for Edmonton West. That, substantially, is his proposal, and that was his criticism. He argued that the individual should not be required to prove his case, but that the government should show beyond a reasonable doubt that the proposed takeover is detrimental to the general public interest.

The minister is arguing with a certain amount of conviction that the federal government cannot possibly commit itself to a policy of this sort, a policy which allows anything approaching veto power to anyone. I am not arguing strongly that this is a wrong opinion. I have always been impressed by the general idea that you make a great country if you create within that country an atmosphere of opportunity so that an individual may be able to use the talents he possesses for the benefit of the whole body, the whole system, the whole country. If you set up an atmosphere in which an individual can do things for himself and make a contribution to the country-and I see many such people within the range of my voice-then I consider that the whole collective body will benefit, because those same individuals, working for themselves and doing things for themselves, will, of necessity, contribute to the good of the country as a whole.

The minister said this afternoon informally, that he agrees with the very thing which the amendment put forward by my hon. friend from Fundy-Royal proposes, though he had certain reservations reflecting his own opinion and taking into account administrative considerations. He agrees there was an informal understanding in the committee along the very lines of this amendment. He might well consider a move which would put into appropriate language the informal understanding which was concluded. Since the minister has already agreed to do so, I suppose those words taken from notes I had prepared, will do no particular good at this point. On the other hand, they will do no particular harm either. This is exactly

July 4, 1972

Foreign Takeovers Review Act

what he has done, and he has done it without any consultation with me, I will tell you, Mr. Speaker. This only serves to prove that great minds run in the same channel.

Hear, hear!

Mr. Flemming:

My opinion of the effect of this legislation on my native province is well known. I am afraid it will establish a barrier against the in-flow of capital into my province. I have expressed this view in committee and I have expressed it privately to the minister. In our part of the world we need such an in-flow of capital. New Brunswick is neighbour to the State of Maine and the New England States of the United States. They buy our goods, our livestock, our forest products, our products of the sea, things which are surplus to our own requirements. The New England states are closer to us than the markets of central Canada. I am not going to argue about what took place 105 years ago. No one knows what would have happened had those two provinces in the centre not united with the two important ones in the east to make up Canada. But we started a course of sending our goods east and west rather than north and south. In a way, perhaps, we were working against geography and the trade pattern which existed at that time, because my native province was trading very freely with the United States during that period. The province was very prosperous as, indeed, were all the Atlantic provinces.

The point to which I should like to draw the minister's attention is this. I understand the difficulties which are bound to arise in the course of the administration of this bill. I believe I am conscious of the minister's determination, and I have no reason to say I am not conscious of the government's determination, and I have no reason to say I am not conscious of the government's determination, to do some screening for the benefit of the country at large. In the event that certain propositions are likely to be definitely detrimental to Canada's interest, I would be the last person to say that action should not be taken. At the same time, I trust the minister is concerned to assure that takeovers whose effect would be desirable are not prevented simply because someone may say that such and such a company or corporation would then be owned by an outside interest. I do not intend to go into that subject, either, this afternoon. I would merely point out that the bill emphasizes the word "control" rather than "ownership". I have always believed that the really important aspect is management, the manner in which management performs relative to the community in which the business is located and to the country of which it is a part.

It is only a few weeks ago that I stood in this House and told the story of the success of an enterprise in my province which grew from a very modest beginning with the help of the government of which I was a member. Its bonds were guaranteed by that government. Today it has plants in England and in Australia; it has grown to be a tremendous international food processing company. I refer to McCain's Foods. The assistance which the government gave to that company to enable it to expand has been well justified because it has contributed to the development of the part of New Brunswick in which its major operations are centred. No unemployment problem arises there; men and women know they can always get a job at McCains. There are 1,600 people working in the province

and another 3,000 on the payrolls in connection with various activities which are not confined to Canada. Some of these activities are in Australia, others in Britain, but there has been a continual story of progress and success.

I pointed out to the House that this company produced to the government figures showing the amount of French fried potatoes being imported into Canada. It then told the government they could be manufactured in Canada and there was a market for them. As a result, we guaranteed their bonds and it never cost them a cent. My point is that had it not been for the great market to the south of this country, this company would never have existed.

I am not one who is fearful about who owns a business; what I am concerned about is who manages the business, that the business obeys the laws of the country, that it pays the prevailing wage rates, and that it contributes to the community. As for the matter of ownership, it seems to me that only in the most drastic situation should you interfere with the flow of capital coming into this country. I am not arguing that it should not be interfered with, but from the point of view of the national interest it would be well carefully to examine the situation. This is what the minister says his staff is going to do. The hon. member for Halifax-East Hants (Mr. McCleave), speaking on behalf of our party, has accepted the minister's suggestion concerning an acceptable amendment and I do not propose to differ. Naturally, I also accept the suggestion. The fact that the minister understands the views of opposition parties and is prepared to recognize those views should gratify All members of the House since it indicates that at least one occupant of the front benches is prepared'to listen to us, that our words are not falling on deaf ears. Some members of this House do not speak very often because they feel that no one pays any attention to them. Today, there has been a change in the situation; the minister is paying attention and is going to accept an amendment, and to me this is very stimulating.

At the disposal of the minister are the collective views, knowledge and experience of all 264 members of this House. As I say, he has recognized those qualities and is going to accept an amendment. I have had enough experience to know how difficult it is for ministers of the Crown to accept amendments put forward by the opposition, since the government seems to think that the opposition are going to crow about it until they are blue in the face. In this particular case, I am glad the minister has been big enough to take note of the representations that have been made. I am convinced they will be of benefit to the country, and I hope they will make his duties of administration a little less difficult.

Before concluding, Mr. Speaker, I may say I sincerely believe in consultation. I started out by saying that it was difficult to pass statutes of uniform application that are still fair. According to the minister there are going to be informal consultations, and the provinces will be consulted. Their views will be considered and so will certain other matters that affect them as well as the central government. In view of that, it seems to me we might hope that Bill C-201 will be of benefit to this great country of Canada. I see you are about to stop me, Mr. Speaker, so I

July 4, 1972

will conclude by saying that I appreciate the interest the House has shown in what I have had to say.

The Acting Speaker (Mr. Boulanger):

Is the House ready for the question?

Mr. Lambert (Edmonton West):

A point of order, Mr. Speaker. As I indicated at the beginning of my remarks, my colleague from Fundy-Royal (Mr. Fairweather) is necessarily away this afternoon but we received word that he will be back here during the supper hour. Rather than moving that the House agree to a withdrawal of his motion, since we are agreed on the minister's proposal, I wonder whether we might defer the motion so that the hon. member can withdraw it. I think he will agree to do this, but I would not want to do it on his behalf. We do not want to dispose of his motion at the present time if he is going to withdraw it. I am merely asking that we defer the matter until his return at eight o'clock, when I think it will be very satisfactorily resolved and we can then take action on the minister's amendment.

Mr. Saltsman:

On the same point of order, Mr. Speaker, I agree that the hon. member who moved the amendment on behalf of the Conservative party should have the opportunity of withdrawing it if he so chooses. Since my amendment is grouped with his, I should like to indicate that I am quite prepared to withdraw my amendment in favour of the one proposed by the minister. I think his proposition is a reasonable one as far as the bill goes and I would be quite prepared to have mine deferred as well.

The Acting Speaker (Mr. Boulanger):

Do I correctly understand that the House is agreeable to letting motions Nos. 4 and 18 stand until eight o'clock tonight?

Mr. Lambert (Edmonton West):

Mr. Speaker, I suggest we adjourn debate on this particular motion till the hon. member is here and can withdraw his own amendment. It is only for that purpose that we defer it, not for the purpose of further debating it.

The Acting Speaker (Mr. Boulanger):

Perhaps I did not use the proper wording but may I say that we shall suspend the consideration of motions Nos. 4 and 18 until eight o'clock. I think that is roughly what I said previously. Is that agreed?