February 23, 1979

LIB

Barnett Jerome Danson (Minister of National Defence)

Liberal

Hon. Barney Danson (Minister of National Defence):

Mr. Speaker, I rise on a point of order. In answer to a question put by the hon. member for Pembina (Mr. Elzinga) the last time I was in the House, on February 21,1 gave an answer which was technically accurate but which might not have been precise. It related to free mailing privileges for the armed forces. The Canadian government and the Department of National Defence do not provide free mailing privileges, as I indicated. I understand however, that the United Nations Emergency Force in the Middle East has free mailing privileges provided by the United Nations for five letters per week of up to one ounce each. My answer might have been somewhat misleading in light of the hon. member's question as I read it in Hansard.

I will pursue the matter of other United Nations forces having the same privileges, but each force has its own rules of procedure.

Topic:   ORAL QUESTION PERIOD
Subtopic:   MR. DANSON-FREE MAILING PRIVILEGES FOR ARMED FORCES-CLARIFICATION OF ANSWER
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MR. BAKER (GRENVILLE-CARLETON)-REFERENCE OF ESTIMATES TO STANDING COMMITTEES

PC

Walter David Baker (Official Opposition House Leader; Progressive Conservative Party House Leader)

Progressive Conservative

Mr. Walter Baker (Grenville-Carleton):

Mr. Speaker, I rise on a point of order in which I think the Acting Prime Minister will be interested. There was some indication from the government House leader yesterday that the government would introduce a motion today to refer the estimates to the appropriate standing committees so that we could get to the discussion of them. It does seem an unusually long time to leave the estimates in limbo before referring them, but I do not see the motion on the order paper. Is a particular minister going to do that today?

Topic:   ORAL QUESTION PERIOD
Subtopic:   MR. BAKER (GRENVILLE-CARLETON)-REFERENCE OF ESTIMATES TO STANDING COMMITTEES
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?

Donald Stovel Macdonald

Miss MacDonald:

They cannot Find a minister today.

Topic:   ORAL QUESTION PERIOD
Subtopic:   MR. BAKER (GRENVILLE-CARLETON)-REFERENCE OF ESTIMATES TO STANDING COMMITTEES
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LIB

Donald Campbell Jamieson (Secretary of State for External Affairs)

Liberal

Hon. Donald C. Jamieson (Acting Prime Minister and Secretary of State for External Affairs):

Mr. Speaker, I understand that the Minister of Employment and Immigration (Mr. Cullen) has the matter in hand. I want to advise the opposition House leader that unfortunately at the last moment the Deputy Prime Minister (Mr. MacEachen) was taken ill with a relapse of his very bad bout of influenza and is not able to be in the House.

Topic:   ORAL QUESTION PERIOD
Subtopic:   MR. BAKER (GRENVILLE-CARLETON)-REFERENCE OF ESTIMATES TO STANDING COMMITTEES
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PRIVILEGE

PC

Benno Friesen

Progressive Conservative

Mr. Benno Friesen (Surrey-White Rock):

Mr. Speaker, I had given you notice earlier this morning that I wished to raise a question of privilege relative to the language used last night by the Parliamentary Secretary to the Minister of Industry Trade and Commerce (Mr. Loiselle). I see that he is not in his place so I should like to reserve that point until he is here.

February 23, 1979

Gold Coins

Topic:   ORAL QUESTION PERIOD
Subtopic:   PRIVILEGE
Sub-subtopic:   MR. FRIESEN-REMARKS OF PARLIAMENTARY SECRETARY TO MINISTER OF INDUSTRY, TRADE AND COMMERCE
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MR. FRIESEN-LETTER FROM MINISTER OF INDIAN AFFAIRS AND NORTHERN DEVELOPMENT RESPECTING FILM CREW

PC

Benno Friesen

Progressive Conservative

Mr. Benno Friesen (Surrey-White Rock):

The second point I would like to raise Mr. Speaker, is a question of privilege relative to the answer just given me by the Minister of Indian Affairs and Northern Development (Mr. Faulkner) that the letter he had written to me was already on my desk. I would point out there is no way that could be so because he did not know I had made that request. I suggest that the minister is misleading the House and 1 would leave it to him to decide whether it was deliberate or accidental. There was no way he could have known that I made a representation to a member of his caucus and so there was no way he could have written to me.

Topic:   ORAL QUESTION PERIOD
Subtopic:   MR. FRIESEN-LETTER FROM MINISTER OF INDIAN AFFAIRS AND NORTHERN DEVELOPMENT RESPECTING FILM CREW
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LIB

James Hugh Faulkner (Minister of Indian Affairs and Northern Development)

Liberal

Hon. Janies Hugh Faulkner (Minister of Indian Affairs and Northern Development):

Mr. Speaker, I hope I did not misunderstand the hon. member, but last week I signed a letter to him which dealt with a film crew going into a national park. I assumed that was the question he was raising-unless it had to do with another film crew and another national park. That letter was sent across to him last week, as my memory serves me, because I remember reading it carefully.

I can tell him now that the answer is negative. I am not entirely satisfied with the negative response and if he wants to pursue it with me later I will be pleased to do so, but I did send that letter last week.

Topic:   ORAL QUESTION PERIOD
Subtopic:   MR. FRIESEN-LETTER FROM MINISTER OF INDIAN AFFAIRS AND NORTHERN DEVELOPMENT RESPECTING FILM CREW
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ROUTINE PROCEEDINGS

ROYAL CANADIAN MINT

LIB

Pierre De Bané (Minister of Supply and Services)

Liberal

Hon. Pierre De Bane (Minister of Supply and Services):

Mr. Speaker, I am pleased to inform the House, on my behalf and on behalf of the President of the Board of Economic Development Ministers (Mr. Andras), of the government's decision to undertake a three-year program for the sale of gold bullion coins. This decision stems mainly if not exclusively from the request made to that effect by our Canadian gold mine operators. The gold mining industry, which is concentrated mainly in Ontario, Quebec and the Northwest Territories, employs 4,700 people. Canada, which is the third largest gold producer in the world, will thus be following in the footsteps of the two first producers, South Africa and the U.S.S.R., which are also selling gold bullion coins, and will be slightly ahead of the United States which will likely undertake a similar program next year.

To give an idea of the extent of this over a billion dollar program, at today's rate of exchange, need I only say that it will require, over the next three years, a total of five million

ounces of gold, equal to the amount of gold extracted from Canadian mines in the last three years. It is our hope that this program, a first in the history of the Royal Canadian Mint, will be an incentive to our industry, as it has been indicated to me. It is certainly my most heartfelt wish.

In other words, my dear colleagues, the government's sole interest in the sale of such gold bullion coins, is to help our gold mines. Accordingly, during this three-year trial period, the five million ounces of pure gold will be supplied exclusively by our Canadian gold mines or from government reserves. Also, to limit and even preclude any risk of deficit, the government has decided to give the Royal Canadian Mint total and exclusive responsibility over all aspects of this gold bullion coin program, both in Canada and abroad.

Topic:   ROUTINE PROCEEDINGS
Subtopic:   ROYAL CANADIAN MINT
Sub-subtopic:   ANNOUNCEMENT OF MINTING OF GOLD BULLION COIN
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PC

Henry Perrin Beatty

Progressive Conservative

Mr. Perrin Beatty (Wellington-Grey-Dufferin-Waterloo):

Mr. Speaker, at the outset of my brief remarks I want to thank the minister for his courtesy in making available to me and my colleague, the hon. member for York-Simcoe (Mr. Stevens), an advance copy of the text of his remarks and also a copy of the press release.

If I can be forgiven for digressing slightly, Mr. Speaker, I should like to say that both in question period today and in his general conduct since assuming this portfolio the minister has indicated a conscious desire-which is perhaps conspicuously in conflict with the attitude of a number of his colleagues-to share with parliament information about the activities of his department and to allow parliament an opportunity to have input into his department's activities. On behalf of my colleagues, I should like to indicate our appreciation of his willingness to give us that opportunity.

Topic:   ROUTINE PROCEEDINGS
Subtopic:   ROYAL CANADIAN MINT
Sub-subtopic:   ANNOUNCEMENT OF MINTING OF GOLD BULLION COIN
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?

Some hon. Members:

Hear, hear!

Topic:   ROUTINE PROCEEDINGS
Subtopic:   ROYAL CANADIAN MINT
Sub-subtopic:   ANNOUNCEMENT OF MINTING OF GOLD BULLION COIN
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PC

Henry Perrin Beatty

Progressive Conservative

Mr. Beatty:

The minister's statement and the press release contain the bare bones of the policy he has announced today. We will want more information about the specific policy, such as the timing of the introduction of the coins, the distribution system and various other mechanisms which will be put in place, but I want to indicate this party's general support for the policy.

Progressive Conservative members of the Standing Committee on Finance, Trade and Economic Affairs helped expedite passage of the legislation which set up the mechanism for the issuance of these gold coins. We also urged the government to expedite the sale of the coins, and if our advice had been followed they would be on sale now. Progressive Conservative members of the committee proposed amendments for greater controls on the program and for better reporting to parliament about the activities of the Mint in this regard.

In his statement the minister suggested that the sale of these coins will be a shot in the arm for the gold mining industry in Canada. On this side we sincerely hope that is the case, because at a time when one million Canadians are unemployed and the economy is sluggish we strongly support any action by this government to get the economy back on the rails.

February 23, 1979

It is clear from the experience of South Africa, with their equivalent of this coin, that the program can work well. Although we would want to follow the introduction of the coin and the marketing of it closely, in summary we think basically it is a good idea. We will be looking forward to receiving more information from the minister as to exactly what the government's activities will be in this area.

Topic:   ROUTINE PROCEEDINGS
Subtopic:   ROYAL CANADIAN MINT
Sub-subtopic:   ANNOUNCEMENT OF MINTING OF GOLD BULLION COIN
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NDP

William Arnold Peters

New Democratic Party

Mr. Arnold Peters (Timiskaming):

Mr. Speaker, I would like to congratulate the minister for making this information available to hon. members. I would also like to congratulate him on his manner of handling questions in the House. May I add that I have appreciated the work done by the minister's predecessor in this field, Mr. Goyer. I know that Mr. Goyer and the present Minister of Supply and Services (Mr. De Bane) have stood pretty well alone in their department by giving approval to this type of assistance to the gold mining industry. The department did not want to get involved in the area and its representatives said so at the committee hearings. They set up a number of roadblocks, but I am pleased to see that the government has decided to go ahead in any event.

As the minister has said, this is a billion dollar market. When the Americans put gold bullion on the market, hundreds of thousands of bids were made, far surpassing the amount of gold which was made available. The program has turned out to be a hedge against oil price inflation and inflation in general. It is also a hedge against bankruptcies in the business world and against bank bankruptcies, which are a fact of life in various countries around the world. For that reason gold bullion coins which are backed by the Mint, sold by the Mint and handled by the Mint will assure buyers around the world that they are getting exactly what they are paying for. This will enable buyers to trade these coins without any question as to value.

Some resentment was felt by people buying Kruger rands because of South Africa's policy. The Canadian coin overcomes one difficulty in that we are making it a coin of the realm. Certainly the $50 face value has no relationship to the purchase price because to buy this coin at today's market price cost Canadians $300. So it is not what you call a face value coin; it is a coin of the realm. The Kruger rand is not.

From the 23 lode mines in Canada in 1977 only about 1,717,000 ounces of gold were produced. To produce this gold the employment of about 5,000 miners in those 23 gold mines was needed. These mines produce an export value for Canada of about $239 million. If Canada enters this field where we are producing only 1.7 million ounces of gold per year, production must increase if we are to meet the requirements; otherwise, any shortfall will have to be made up from the reserves in our treasury.

I hope, along with other members of the House, that the government will assist the gold mining industry to find a ready market, a market that is available to the small producers as well as the large ones who do not have a marketing agency of their own. In effect the government through the Mint is going

Gold Coins

to act as the international agent for the distribution of much of our newly produced gold.

Along with other forms of assistance that the government can provide and is providing to places like Kirkland Lake, where a grant has been made available for surveys in the amount of $2.5. million, I hope that instead of only 5,000 miners in the gold mining industry next year, perhaps we will see 7,000 or 8,000. It seems to me that we will be producing more than the two million ounces which the minister has agreed to produce in the two years following this year.

Topic:   ROUTINE PROCEEDINGS
Subtopic:   ROYAL CANADIAN MINT
Sub-subtopic:   ANNOUNCEMENT OF MINTING OF GOLD BULLION COIN
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SC

Gérard Laprise

Social Credit

Mr. Gerard Laprise (Abitibi):

Mr. Speaker, first I would like to join with two of my colleagues in the opposition in thanking the hon. Minister of Supply and Services (Mr. De Bane) for providing us with a copy of his statement early enough for at least a cursory study of it. I would also like to congratulate him for the straightforward manner in which he attempted to give us the information we wanted. We have experienced it once again today, and it speaks well for him.

Mr. Speaker, that decision of the hon. minister to promote the production of gold bars is intended, according to what he said, to help gold mines in the Northwest Territories. Gold mines are mostly in Quebec and Ontario. I come from a gold producing area. Some produce gold mines only and others only marginally but they still produce some.

Now, I remember, Mr. Speaker, that no more than ten years ago when the price of gold was set at $35 an ounce, the government had to subsidize gold mines to enable them to produce and provide some jobs to miners and today, when the price of gold has risen to almost $246 an ounce, we have to help them in another way by producing gold ingots worth $50 and selling them to the public. Such system, Mr. Speaker, is no doubt better than direct subsidies, because it will enable those who want to make secure investments to buy those gold ingots which could hardly depreciate in view of the price at which they are marketed.

It remains, Mr. Speaker, that the production of a new gold coin in Canada is undertaken at a time where the government is experiencing some hardship. It has just been announced that the government has incurred a deficit of some $6 million for the production of the one cent copper coin. Now, Mr. Speaker, all kinds of devices have been used to try to make up that deficit. They thought they could reduce the size of the one cent coin, but they soon realized that there would be some problems with vending machines when that lighter one cent coin would be substituted for a dime. They also thought that a hole could be bored in the centre of that one cent coin. But since there were obviously so many holes in our monetary system they did not dare make fools of themselves with that method. The fact is that they have failed to find a solution and that our coin production shows a deficit. Mr. Speaker, I hope the production of that gold bullion coin which will sell for $50 will not show a deficit.

February 23, 1979

Gold Coins

The minister says that in order to avoid this, the government gave the Royal Mint the total and exclusive responsibility for every aspect of that program. If there is any risk of running into a deficit in this case, I do not think it could be avoided by giving such a responsibility to the Royal Mint. Well, I think, Mr. Speaker, that on the whole it is a good decision because it will first of all enable our gold mines to survive, and our miners to find stable and paying jobs, and also because it will make it possible for Canadians to invest money in that form of investment which seems fairly sound.

Topic:   ROUTINE PROCEEDINGS
Subtopic:   ROYAL CANADIAN MINT
Sub-subtopic:   ANNOUNCEMENT OF MINTING OF GOLD BULLION COIN
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PC

Henry Perrin Beatty

Progressive Conservative

Mr. Beatty:

Mr. Speaker, as I indicated to the minister in my brief remarks, the statement which was read by him today and the accompanying press release contained only the bare bones of the proposal being made by the government. I would like to ask him, specifically with regard to the distribution system that will be followed, what sort of marketing system will be used? Does the minister intend to have the Mint serve as a retailer of coins and sell directly to individuals or sell through wholesalers? If he intends to sell through wholesalers, what method will be used to select the wholesalers?

[ Translation]

Topic:   ROUTINE PROCEEDINGS
Subtopic:   ROYAL CANADIAN MINT
Sub-subtopic:   ANNOUNCEMENT OF MINTING OF GOLD BULLION COIN
Permalink
LIB

Pierre De Bané (Minister of Supply and Services)

Liberal

Mr. De Bane:

That, Mr. Speaker, is a very important and sensitive question. For the time being, I can tell the hon. member that it will be the responsibility of the board of directors of the Royal Mint. Since the government's decision has just been taken, the board of directors has not yet reached a final decision as to the course to be followed. However, according to my preliminary discussions with the president of the Royal Mint, it seems that the marketing methods used by South Africa, which, of course, is a much bigger producer than Canada, will be followed rather closely. South Africa issues some eight million gold coins every year. As for us, we will issue some two million.

Apparently, various aspects will have to be considered. Firstly, the dealer should already be in the gold business, he should be able not only to sell gold, but also to buy it back from investors wishing to sell it, and should meet other criteria which will be defined by the Royal Mint.

So, the various details pertaining to distribution have not yet been worked out by the Royal Canadian Mint whose responsibility it will be. What we know for sure is that huge amounts of money will be involved, over a billion dollars, and that profits will be almost non-existent for the Mint; in other words, on the one hand very little profit is expected, while on the other hand, the risk involved is pretty high. That is why the Royal Mint has agreed to implement this program provided it is given the sole responsibility for it, from A to Z. Let us not forget that the price of the coin will vary on a daily basis, depending on gold market prices. Already, in the two major nations involved in this field, the U.S.S.R. and South Africa, there is in operation a system of sales to the wholesalers, which

we cannot change, and which is based on the day to day price of gold plus three per cent.

Therefore, it is with that 3 per cent that the Royal Mint will have to defray all its costs and also the current price of gold plus 3 per cent charged to the wholesaler. So the Mint cannot afford to make any mistake, otherwise we would incur tremendous losses.

Topic:   ROUTINE PROCEEDINGS
Subtopic:   ROYAL CANADIAN MINT
Sub-subtopic:   ANNOUNCEMENT OF MINTING OF GOLD BULLION COIN
Permalink

February 23, 1979