February 27, 1978

PC

John Allen Fraser

Progressive Conservative

Mr. John A. Fraser (Vancouver South):

Mr. Speaker, on February 9 in this House, as recorded in Hansard at page 2696, I asked the Minister of Industry, Trade and Commerce (Mr. Horner) certain questions respecting the difficulties faced by Canadian importers of footwear, especially those who are importing products that cannot be obtained in Canada. This is because either the fashion or the price cannot be obtained here and there is not much possibility that Canadian manufacturers can realistically make any attempt to supply

that market. I cited an article from the Vancouver paper the Province dated January 30, 1978 under the heading "B.C, shoe industry gets the boot". I quoted at that time some parts of the article but there are other parts I was unable to quote during the question period and which deserve to be put on the record. I quote:

Another segment of the industry hard hit will be the stores specializing in imports. As it looks now, they'll lose one-third of their business with no respite.

"They'll have to ask Ottawa whether the government thinks they should be allowed to exist," said veteran Vancouver shoe retailer Ernie Freedman. Meanwhile, he, like all retailers, must juggle with the confusion created by the fact orders for spring merchandise, placed last fall before quotas were imposed, may have eaten up the quota of the entire year.

Now, faced with buying for fall, the stores find their imports limited and availability of domestic supplies uncertain.

The fact of the matter is that the majority of people in the retail shoe business are not objecting to some import quotas if the result of those quotas is to protect Canadian industry. The growing suspicion is that the quotas are affecting those products which the Canadian manufacturers cannot supply. The result of this is higher prices. The allegation is that the Canadian manufacturers are increasing their prices on general footwear.

On February 23 I asked the Minister of Industry, Trade and Commerce a question on a related subject, that of textiles. I asked the minister if he could tell this House whether there was a market building up for the sale and purchase of quotas in textiles. Today I asked the Prime Minister (Mr. Trudeau) the same question, and I also extended it to the problem of shoe quotas. I ask the question over and over again because I am receiving representations that this is exactly what is going on. Since the small operator cannot obtain the quotas he or she need, it is seems to me a travesty that other quotas which obviously are in excess of what is needed are being sold for profit within the domestic Canadian market. I refer specifically to an advertisement which appeared in the Vancouver Sun on February 4, 1978 for jeans. It says:

Jean or Pant Quota

Willing to purchase available quotas for spring and fall 1978.

Any quantity up to 100,000 pairs. Apply in confidence to-

Then it gives a box number. It is time that the government came clean with the House of Commons and with importers as to its motives, especially with respect to textiles or footwear which cannot be obtained in Canada and which the Canadian manufacturer cannot produce.

I have received innumerable complaints. I have received pleas from importers who, without some redress, are going to go broke. I have consistently received complaints that the machinery set up by the government is not competent to deal with the applications and is being handled in such a way that it is not attuned to market problems, especially in British Columbia.

February 27, 1978

I see my time is up and I will conclude on that note.

Topic:   PROCEEDINGS ON ADJOURNMENT MOTION
Subtopic:   TRADE-TEXTILES-PURCHASE AND SALE OF IMPORT QUOTAS
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LIB

Maurice James Harquail (Parliamentary Secretary to the Minister of State for Urban Affairs)

Liberal

Mr. Maurice Harquail (Parliamentary Secretary to Minister of State for Urban Affairs):

Mr. Speaker, the hon. member for Vancouver South (Mr. Fraser) has been very busy. He has two questions tonight, one dealing with imported shoes and the other with import quotas.

Let me deal with imported shoes first. In response to this allegation I wish to state that the figure of 11 million pairs is inaccurate. The correct figure is 7.5 million pairs. In 1976 imports amounted to 40 million pairs of leather and vinyl footwear, an increase of 46 per cent over 1975. Government action has limited such imports to 32.5 million pairs, a cutback of 7.5 million pairs or a reduction of less than 19 per cent. While 1977 data are not available, it appears that imports will reach the 1976 level. This cutback of 7.5 million pairs represents 16 per cent of the 1976 Canadian production of 45.8 million pairs. Therefore, the replacement of 7.5 million pairs of imports would require not the alleged 50 per cent increase in domestic output but 16 per cent, which I am confident the Canadian industry is capable of producing.

To turn now to the textile question, under the Export and Import Permits Act, transfer of an import permit is prohibited as well as the transfer of quota allocated as a condition to the issuance of such a permit. In several instances the Department of Industry, Trade and Commerce has been asked to authorize the transfer of quota from one company to another as a result of the business changing hands or of a change in the structure of a particular business. All such requests for transfer of quota have been refused by officials in the department.

The department has also been apprised of several instances where possibilities of buying or selling import quotas were offered in newspapers. All cases brought to the attention of the departmental officials have been investigated. To date the results of two of these investigations have been received. It has been established that certain people were using the words "Quota for sale" or "Quota wanted" when they were in fact referring to goods already imported under the authority of an import permit issued under the Export and Import Permits Act after a valid quota had been obtained. The reason for using the word "quota" is simply that those goods had been imported as a result of allocation of quota. So far, none of the investigations have established that quota were in fact being bought and sold in Canada.

Perhaps I could make one last point with respect to imported shoes. Imports of 32.5 million pairs of leather and vinyl footwear permitted by the cabinet decision are considerably higher than imports in any year except 1976 and 1977. If to this we add approximately 15 million pairs of rubber, canvas and other types of footwear exempted from the quota, plus the capabilities of the Canadian footwear manufacturing industry, I am confident that retailers and consumers will have a very wide selection in terms of price, fashion, quality and function.

Adjournment Debate

Topic:   PROCEEDINGS ON ADJOURNMENT MOTION
Subtopic:   TRADE-TEXTILES-PURCHASE AND SALE OF IMPORT QUOTAS
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TOURISM-PROBLEMS IDENTIFIED AT INDUSTRY CONFERENCE-GOVERNMENT ACTION TO SOLVE

PC

A. Daniel McKenzie

Progressive Conservative

Mr. Dan McKenzie (Winnipeg South Centre):

Mr. Speaker, Canada registered a record fourth quarter tourism deficit of $340 million compared with a shortfall a year earlier of $293 million, Statistics Canada has reported. The tourism deficit for 1977 was also a record, totalling $1.66 billion compared with a 1976 gap of $1.19 billion.

Canadian visits to the United States are on the increase. Statistics Canada has reported that Canadians made 37.9 million visits to the U.S. during 1977, an increase of 5.5 per cent over the total for 1976. The number of trips to Canada by U.S. residents fell by 1.4 per cent from the 1976 total to 31.8 million in 1977. Similarly, the number of trips to Canada by foreign visitors from all other countries, at 1.4 million, was down 9.7 per cent from 1976. From these figures hon. members can see the dangerous trend which is developing in Canada with regard to tourism.

The statement made by the Minister of Industry, Trade an Commerce (Mr. Horner) with respect to alleviating the current $2 billion tourism deficit amounts only to window dressing. Tonight I am calling for the implementation of the following measures immediately.

I propose a reduction in sales taxes on promotional literature to the United States, and income tax reduction for Canadians who travel within Canada, reduced federal sales taxes, and, most important, that federal and provincial governments agree on a promotional package instead of each presenting a different picture of Canada as is the current concept. This does not mean that the provinces should abandon the practice of advertising individually but rather should adopt a more national promotional picture.

The federal government is spending $ 1.5 million to promote Canadian vacation packages at rock bottom prices. This great promotion is to start next month. However, many are not new, and many do not offer particularly low prices. An Ottawa travel agent says it is a lot of window dressing for a project which is basically unchanged. Also, much of what they are offering travel agents sold independently last summer. The packaging makes it easier to sell the product, an agent said, but that is all that is different. The price is not really different. The massive promotional approach to Canadian tourism is. One can see this is a lot of window dressing and not concrete proposals.

The Canadian tourism industry and the Canadian government office of tourism held a conference recently. The highlight was 13 problem areas facing the tourism industry in Canada. Referring to marketing, they stated, I quote:

Canada's visibility in the U.S. market was about 75 per cent this year because of frozen marketing budgets. Canada's visibility will be reduced to 60 per cent next year if CGOT marketing budgets do not increase ... It was suggested that more work should be done in the "V.F.R." (visiting friends and relatives) category. It is not known what motivates these people to come nor has it been fully determined exactly how many dollars were spent in areas other than accommodation.

80031 -66^2

February 27, 1978

Adjournment Debate

There was a new report entitled "International Tourism Development Forecasts to 1985" produced by the Economist Intelligence Unit Limited in London, England. It shed some new light in this area. They stated:

The image of Canada in the U.S. is that Canadians are anti-American. Another problem in Canada is poor attitude of people who service the general public.

The document further states:

Lengthy discussions centered around the unfavourable image of Canada as a friendly tourist destination. This image problem is seen on two levels: first, some Americans view Canada (the government not the people) as being anti-American due to certain of its policies; second, some tourists feel friendly toward Canada as a country and even toward individual Canadians; however, having experienced unpleasant situations in previous travels, they have spread the word that Canada is not a friendly vacation spot.

Not only is this government driving out investment but it is scaring off tourists. No wonder we are heading for a $2 billion deficit. A recent editorial pointed out that the tourist program is mainly fanfare. I quote from that article:

With considerable fanfare, federal Industry Minister Jack Horner and his provincial counterparts have unveiled a national plan to promote tourism in Canada. Some specific deals are included for the benefit of consumers, but the main emphasis seems to be upon another massive publicity campaign by the government on behalf of domestic tourism.

Massive publicity campaigns alone are not the answer. The document prepared by the tourism industry and the government department also points out that transportation constraints are one of the main problems in Canada. It points out, and I quote:

There was great concern regarding travel costs caused by restrictive regulations governing various forms of transportation. The airline representatives strongly opposed the M.O.T. policy of "user pays"; the high cost of renting counter space at airport terminals is a contributor to higher costs, ultimately passed on to the air traveller. Fuel costs and labour costs were also cited as significant contributors to the high fares that must be set.

They claim that most of the tourists arriving in Canada from the United States on packaged tours come by motor coach. Regulations covering the use of coaches in Canada are deterring tour operators from sending their clientele to Canada. What is the government going to do about these transportation policies?

Topic:   PROCEEDINGS ON ADJOURNMENT MOTION
Subtopic:   TOURISM-PROBLEMS IDENTIFIED AT INDUSTRY CONFERENCE-GOVERNMENT ACTION TO SOLVE
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LIB

Maurice James Harquail (Parliamentary Secretary to the Minister of State for Urban Affairs)

Liberal

Mr. Maurice Harquail (Parliamentary Secretary to Minister of State for Urban Affairs):

Mr. Speaker, 1 suppose if there were an award or trophy for someone who is the champion at spreading negative trends of gloom and doom, the hon. member for Winnipeg South Centre (Mr. McKenzie) would probably be right up there as a contender for that award.

Let me state the government's position. The Minister of Industry, Trade and Commerce (Mr. Horner) and the government have been concerned for some time with certain negative trends in Canada's tourism industry. Tourism is very important to Canada, as attested by the $9.2 billion in tourism related receipts in 1976, about 5 per cent of our gross national product, by the $7.3 billion expenditure of Canadians travelling in Canada and the $1.93 billion expenditure by visitors from the United States and other countries abroad. Over

800,000 jobs are involved, directly and indirectly, widely dispersed across Canada.

The problem is reflected by recent changes in the international balance of payments on travel account. Over the last three years alone, 1973 through 1976, the negative balance on travel account has quadrupled, reaching $1.2 billion, and is now responsible for 20.5 per cent of the shortfall of $5.8 billion for all service transactions. In 1977 so far the negative trend continues.

The factors largely contributing to the increasing negative tourism balance are, first, a decline in the numbers of United States visitors, about 6 per cent in 1976 and somewhat less in 1977; and, second, big increases in Canadians travelling outside of Canada, up from 8 per cent to 10 per cent in 1976.

Because tourism is such big business for Canada and so important to the thousands of businesses across Canada servicing it, the minister, and before him the Minister of Finance (Mr. Chretien), have been looking into the causes of these trends and seeking ways of reversing them.

Some of the actions taken are these. Over a year ago, in co-operation with the Travel Industry Association of Canada, the Canadian government office of tourism convened a workshop on "price competitiveness" problems. The CGOT has been working even more intensively in co-operative travel promotion with provinces and the industry. The minister discussed these problems with provincial ministers responsible for tourism in November, 1976, and September just past, in Yellowknife. In March this past year the Minister of Finance called together some 13 leaders of the industry to discuss the situation, and since has been gratified to receive from them very detailed recommendations which provide very helpful information which is being considered. Also, the minister has taken account of resolutions passed by TIAC at their annual conference in Edmonton last May.

The minister has directed that the most intense co-operative effort be carried on with the provinces and industry to find answers to these problems. One result expected is that, overall, 1978 Canadian tourism promotion programs will have much increased impact. As well, several special study projects are in process, the results of which the minister expects to be considering over the next two months and should lead to further actions to support this important industry.

Topic:   PROCEEDINGS ON ADJOURNMENT MOTION
Subtopic:   TOURISM-PROBLEMS IDENTIFIED AT INDUSTRY CONFERENCE-GOVERNMENT ACTION TO SOLVE
Permalink
PC

A. Daniel McKenzie

Progressive Conservative

Mr. McKenzie:

Too little, too late.

Topic:   PROCEEDINGS ON ADJOURNMENT MOTION
Subtopic:   TOURISM-PROBLEMS IDENTIFIED AT INDUSTRY CONFERENCE-GOVERNMENT ACTION TO SOLVE
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HOUSING-RRAP-CHANGES IN REGULATIONS UNDER PROGRAM

NDP

Andrew Hogan

New Democratic Party

Mr. Andy Hogan (Cape Breton-East Richmond):

Mr. Speaker, on January 27 I asked the Minister of State for Urban Affairs (Mr. Ouellet) some questions on the changing regulations for the residential rehabilitation assistance program for 1978. I was especially concerned about rumours that repairs to basements of old houses of low-income people were not going to be included in the residential rehabilitation assistance program of the federal government in 1978. The minister

February 27, 1978

in answering me said that the issue is under study, but that "this point should remain included". I took it for granted that he was talking about the question of basements and house siding in the federal rehabilitation program.

Through correspondence with the minister and his predecessor I had suggested that a ten-year program of rehabilitation of miners' homes be carried out in the whole of the mining areas of Cape Breton which are now occupied by pensioned senior citizens, widows and others on low income. I pointed out that a great deal of this housing, formerly built by the private companies who controlled the coal fields in Cape Breton, was 70 or 80 years old. The miners in the past and the present occupants have done their best to keep these homes as neat and tidy as possible inside, but because of the age of these homes the sills, poor roofs and lack of foundations are beginning to take a toll.

With the introduction of the residential rehabilitation assistance program a few years ago some desperately needed help was given. The trouble is that the national legislation provided that the municipalities in urban areas had to set up neighbourhood improvement projects before RRAP money would be expended by the federal government. I suggest that in the case of mining towns such as those in Cape Breton this was putting the cart before the horse, that really what was needed was a more substantial ongoing housing repair program to be followed later on by neighbourhood improvements such as recreational fields and other amenities. In most of the mining areas sewer and water were already normal services for years.

Glace Bay is a town with a population of approximately

23,000 people. Last year it received RRAP funding of $453,000. The number of applicants looking for housing repairs was 755 without any advertising of this program. It must be kept in mind that this is just in the NIP areas which were designated by the town council and co-ordinator. The number of applicants approved was 99. The average loan was $4,564 with $3,500 forgiveable. The average income of successful applicants was $4,000.

New Waterford is a town in my constituency of approximately 10,000 people. It received an allocation of $437,000, again without advertising. There were 631 applicants. Of these applicants, 70 were approved. Their average income was $5,320.

Aside from the criticism noted above, my major criticism of this program was that at this rate of repairing the homes we were going to run into a situation where many of them could never be rehabilitated because the structures would be so far gone with respect to deterioration. The result would be a clamour for more public housing. The government of Nova Scotia had already placed a moratorium on family public housing in the province.

I attempted to get the Cape Breton Development Corporation and the Central Mortgage and Housing Corporation involved in setting up a special rehabilitation agency so as to get more homes in these areas repaired more quickly, efficient-

Adjournment Debate

ly and effectively. I estimated that it would cost from approximately $7,500 to $8,000 to do the job on one side of the duplexes, which are the typical type of housing we are talking about. In his answer to me, the minister indicated that another federal government program called the emergency repair program might be more applicable to our part of the country. He noted that the federal government had just given a special grant of $100,000 to the citizens service league of Glace Bay for emergency repairs. Also he indicated that more would follow.

I was happy about this, but I was not satisfied that the minister had grasped the difference between emergency repair programs, which had been used by the province of Nova Scotia within the last year, and full rehabilitation of these old homes, which would be a long term investment by governments to make these homes livable well into the future. I was attempting to press the point that we really needed a small or medium sized rehabilitation industry or agency to go beyond the work of the emergency repair programs, as well as to offset the slowness and other disadvantages in the NIP-RRAP programs as applied in present and former mining areas of Cape Breton.

Lask week I was notified by CMHC to attend a meeting at the Holiday Inn in Sydney. It began at ten o'clock on February 21 and lasted until 5.30 p.m. It continued the next day from nine to twelve o'clock. The main speaker at that meeting was a Mrs. Pat Gish, the director of the Eastern Kentucky Housing Development Corporation of Kentucky, U.S.A. During that day and a half, delegates went into the mining areas and saw the situation at first hand for themselves. Present at the meeting were five representatives of CMHC, two representatives of the Nova Scotia Housing Commission, one representative of the Cape Breton Development Corporation, myself, and a few other invited people from the area who were working in the housing field.

The conclusion of the meeting was that there was a general need for a special rehabilitation industry or agency to do the required job. CMHC and the Cape Breton Development Corporation could well have a special role in setting up the agency so as to ensure the cash flow status of small contractors in the area. Also they could play a part in setting up additional administrative training programs, possibly in conjunction with Canada Manpower and industrial training programs. The objective was to set up a housing rehabilitation industry with a view to fixing up most of these homes in a substantial way over a 10 or 12 year period, thus providing a small but important industry in an area of high unemployment.

CMHC delegates said they would be meeting internally on the matter and would be getting together with Devco with a view to trying to bring this new agency into reality. The two representatives of the Nova Scotia Housing Commission said that the commission was prepared to do anything it could to help expedite the setting up of such a program. I expect that such a housing rehabilitation industry will become a reality in Cape Breton this year.

February 27, 1978

Adjournment Debate

Topic:   PROCEEDINGS ON ADJOURNMENT MOTION
Subtopic:   HOUSING-RRAP-CHANGES IN REGULATIONS UNDER PROGRAM
Permalink
LIB

Maurice James Harquail (Parliamentary Secretary to the Minister of State for Urban Affairs)

Liberal

Mr. Maurice Harquaii (Parliamentary Secretary to Minister of State for Urban Affairs):

Mr. Speaker, I am sure that the hon. member for Cape Breton-East Richmond (Mr. Hogan), because of his interest in the subject and his experience in that area, would want to point out publicly the most positive thrust that has been made evident, especially in the Cape Breton area, in terms of assistance in housing programs. I would enjoin the hon. member to give credit where credit is due in terms of the amount of money and effort expended in that area by the federal government.

I have been advised by officials of CMHC that, under the residential rehabilitation assistance program, repairs to the basic components, basements and house sidings are not excluded. The changed regulations to which the hon. member refers are the standards for the rehabilitation of residential buildings. These standards were modified in 1977 and, following consultation with numerous municipalities across Canada, became effective after January 1, 1978.

These two repair items remain within these standards. Specifically, a section concerning structural repairs entitled "Foundations" reads as follows:

Foundations shall be restored to ensure that they reasonably support the loads imposed.

I emphasize "shall" because not only is this item included, but any repairs to foundations which may be required are mandatory. The following standard, however, has made extensive upgrading ineligible:

A mud sill foundation may be replaced by a pier or perimeter type foundation. No further upgrading of the foundation is eligible, for example-changing a crawl space foundation to a conventional full basement.

The rationale for this restriction, which is one of the most significant changes from the previous standards, is that urban RRAP is a rehabilitation program, not a modernization program. Where a basement did not exist previously, one cannot be provided under this program.

With respect to house siding, I wish to quote as follows from a section in the standards concerning exterior walls and roofs:

All exterior walls and roofs shall have an acceptable cladding or covering to prevent the entry of moisture into the structure and provide reasonable durability. Exterior cladding shall not be replaced except where restoration or repair is not justifiable in terms of cost. All exterior material subject to deterioration in its unprotected state should be painted or otherwise suitably treated.

Again, emphasis is placed on the mandatory nature of repairs which may be required to the house siding. The guideline within the standard, however, warns against the replacement of siding solely for aesthetic reasons or for ease of maintenance.

I wish to repeat what the minister said at that time, namely that we have to ensure that the money involved in this program is used in the best possible way to improve the living conditions of low income people, which is why the two points mentioned by the hon. member concerning basements and house siding are not only applicable but emphasized when rehabilitating housing.

With reference to the emergency repair program, I have been advised by Central Mortgage and Housing Corporation that a grant was provided to the citizens services league of Glace Bay in the amount of $148,213 covering the period July 5, 1977 to December 31, 1978. The grant was increased from $48,213 to $148,213, but it should be noted that the period covered is 18 months rather than the usual six months.

If further funds are required by the CSL, a special submission will have to be prepared and forwarded for consideration. It should be pointed out, however, that the emergency repair program RNH budget for 1978 is currently fully allocated to other applicants.

With the introduction of residential rehabilitation in rural areas in 1974, the emergency repair program is gradually being phased out. The total budget was $3 million in 1975, $2 million in each of 1977 and 1978, and it is anticipated that it will be $1 million in 1979.

Topic:   PROCEEDINGS ON ADJOURNMENT MOTION
Subtopic:   HOUSING-RRAP-CHANGES IN REGULATIONS UNDER PROGRAM
Permalink
LIB

Gérald Laniel (Deputy Speaker and Chair of Committees of the Whole of the House of Commons)

Liberal

Mr. Deputy Speaker:

Order, please. The motion to adjourn the House is now deemed to have been adopted. Accordingly, this House stands adjourned until tomorrow at 2 p.m.

Motion agreed to and the House adjourned at 10:30 p.m.

Tuesday, February 28, 1978

Topic:   PROCEEDINGS ON ADJOURNMENT MOTION
Subtopic:   HOUSING-RRAP-CHANGES IN REGULATIONS UNDER PROGRAM
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February 27, 1978