Mr. Scott (Hamilton-Wentworth):

Madam Speaker, I am wondering when 1 may receive a reply to question No. 4,229 which was placed on the Order Paper a good six weeks ago at the invitation and urging of the Minister of Consumer and Corporate Affairs. He could not answer my question in the House and suggested 1 place it on the Order Paper. It is not a terribly difficult or complex question to answer, but it is very timely in view of the number of young people looking for summer employment. The question deals directly with the criteria this government used to man the Metric Commission information kiosks, and I would appreciate an answer as soon as possible.

Mr. Smith:

Madam Speaker, I do not know the answer offhand but I will be pleased to look into this matter on the hon. member's behalf.

Mr. Young:

Madam Speaker, can the parliamentary secretary indicate when we can expect an answer to question No. 4,165 concerning a number of related questions with respect to the Main Square apartment buildings in the city of Toronto?

Mr. Smith:

Madam Speaker, I am not aware of what stage the answer to that question is at the moment, but I will be happy to look into it on behalf of the hon. member.

Madam Speaker:

The questions enumerated by the parliamentary secretary have been answered. Shall the remaining questions be allowed to stand?

Agreed.

Mr. David Smith (Parliamentary Secretary to President of the Privy Council):

Madam Speaker, I ask that all notices of motions for the production of papers be allowed to stand.

Madam Speaker:

Shall all notices of motions for the production of papers be allowed to stand?

Agreed.

May 19, 1982

Hon. Ron Huntington (Capilano):

Madam Speaker, I am not necessarily very pleased to take part in the debate on this particular amendment. 1 want to draw hon. members' attention to the trend of "government out of control" which is of increasing concern not just to those of us who have worked through three Parliaments on the Public Accounts Committee, but also to the public and the taxpayers. By debating Bill C-102, an act which gives the Minister of Energy, Mines and Resources (Mr. Lalonde) the power to put in place Crown corporations subject to the approval of cabinet, we are accelerating that trend and are creating a subgovernment which is not subject to public scrutiny.

The arguments of PetroCan were that the people and government of this country needed a window on the energy industry, particularly oil and gas; but just as soon as the window is created we find it being painted black inside and out. Crown corporations are becoming a subgovernment which this House of Commons cannot get a handle on; they are in no way, shape or form accountable to us in this House. This bill only confuses the issue as to whether Crown corporations incorporated under Bill C-102 will come under the Financial Administration Act or the Canada Business Corporations Act. This definitely leaves those of us with some knowledge in this area totally confused, and I understand it leaves the legal profession and experts outside of this House totally confused as well. It is a grey area and will take a long time to sort out.

Before 1 speak exactly to the narrow limits of the amendment put forward by my colleague and benchmate, the hon. member for Wellington-Dufferin-Simcoe (Mr. Beatty), I would like to bring to the House's attention the fact that in the Thirtieth Parliament members on all sides worked for hours and hours, weeks and weeks through four sessions trying to get control of this whole subject of Crown corporations. I remember the day when one of the senior Treasury Board officials was asked how many Crown corporations there were and he did not have the answer. It later came out that there were 478 known Crown corporations.

The committee then started to work on this issue, and officials from the Treasury Board diligently attended every single one of those meetings and subsequently came up with a blue book which was the forerunner to a Crown corporations act. The Public Accounts Committee of the Thirtieth Parliament submitted a very detailed and studied report on this issue

Energy, Mines and Resources

where it said Crown corporations must be brought under either the Financial Administration Act or a Crown corporations act so that Canadian taxpayers could see just how this subgovernment was developing.

[DOT] (UOO)

Of the Crown corporations, either wholly owned, partially owned or subsidiaries of subsidiaries of Crown corporations, there are some 50 that have been given agency of Her Majesty status. What this amendment tries to do is remove from the powers given to the minister of energy agency status that, in our opinion, is totally unnecessary and extremely dangerous in light of the lack of accountability this House and the committees of this House have over the Crown corporation subgovernment.

Agency status was drafted as a chapter in a blue book on Crown corporations. For some reason or other known only in the Privy Council office, it was not included in the text of this book. I assume that kind of knowledge was not to be broadly spread to Members of Parliament or the public at large.

Agency of Her Majesty status is indeed a unique and powerful privilege that I do not believe this House should be conferring on any one minister. Everything the minister of energy has to do in terms of incorporation of Crown corporations can be done under the present structure of going to cabinet and incorporating through governor in council order. But what is happening here is that we are giving the minister the right to confer unbelievable powers on this string of companies that he is creating as he takes control over the whole national energy structure in this country; state control, I might say, Mr. Speaker.

Agency of Her Majesty status exists probably in 50 corporations. We heard that wonderful speech from the hon. member for Regina West (Mr. Benjamin) last night. I would urge everyone to read it. That speech illustrated how shallow our knowledge is in this important area of government business. There are about 50 Crown corporations that have been given the gift of agency of Her Majesty status. Some of the powers that are automatically conferred by that status are immunity from taxation by provinces, and immunity from the law. The law as it applies to other businesses incorporated under the Canada Business Corporations Act does not apply to the gift the Minister of Energy is giving in Bill C-102 to these Crown corporations, the need for which the minister has not yet defined.

The minister is seeking and getting this power which will give these special corporations immunity from provincial legislation and provincial taxation. Not only that, but these corporations get immunity from federal legislation federal laws. They get very special status. These Crown corporations that are given this status, which my colleague is trying to have removed from this bill in the subamendment to which I am speaking, also allows these corporations the special privilege and right to borrow money from any sector at the cost of the

May 19, 1982

Energy, Mines and Resources

government. There is an automatic government guarantee conferred by giving agency of Her Majesty status. It is questionable.

We already know from the Supreme Court of Ontario ruling which my colleague put on the record last night that the competition act and actions that are unlawful for everybody else in the private sector in Canada will now be lawful for administrators or corporations that are conferred this agency of Her Majesty status in this bill. We as Members of Parliament really do not fully understand the breadth nor the complicated nature of the power being conferred by Bill C-102. It will empower the Minister of Energy to put Crown corporations in place as his need so arises in the marketplace.

In committee the minister told us that rather than use Petro-Canada for these purposes he thought there would probably be more control and it would be safer if special corporations were put in place. Yet my colleague the hon. member for Welling-ton-Dufferin-Simcoe pointed out that the powers needed were absolutely unnecessary, that they existed, and the agency status of Her Majesty carries a potential for abuse that we in this House do not understand. I join with him in a plea to members opposite and to members in the NDP ranks that we strike from the bill lines 11 to lines 14 found on page 2 because everything the government needs is in place now. Surely we do not have to confer this special status on corporations, the need for which has not yet been defined by the minister.

Having said that, I am very sorry the President of the Treasury Board (Mr. Johnston) is not with us today. He was here last night. He has been very diligent in his duties as a member of the Standing Committee on Public Accounts. He sat through all the hearings and studies on the need for a Crown corporations act in Canada. This was before we started expanding this subgovernment which is now out of control and is not accountable, in spite of what anyone else wants to say in this House, to the committees and the systems under which we operate.

The President of the Treasury Board wrote a book when he was in the private sector called "Fiscalamity". We have read the book. His sincerity and the depth of his concern is known to us all. Having worked as a colleague with him on the Standing Committee on Public Accounts, I know how able and sincere his concerns are. But why, now that he is President of the Treasury Board, is legislation like this coming in that flies in the face of the work of the Lambert Royal Commission on Financial Management and Accountability, and which flies in the face of years of work on the part of the Treasury Board in that department's blue book calling for Crown corporations? Why does it fly in the face of a very good report submitted in the Thirtieth Parliament by the Standing Committee on Public Accounts which laid out major recommendations and conclusions on this subject matter?

What do we have to do in the way of an appeal to the government on behalf of the taxpayers of Canada, an appeal on the part of people who are now becoming genuinely concerned that their freedom is being threatened because the

parliamentary system is not working, the bureaucracy and the subgovernment of Crown corporations are in a runaway condition, able to call on the Consolidated Revenue Fund when they fail and they have agency of Her Majesty status?

We are also dealing with the fact that the boards of directors and their powers in the special Crown corporations are not the same and are not subject to the same laws as are businesses incorporated under the Canada Business Corporations Act. This gets back to Professor Florie's warning in 1979 to us in Toronto, which is that government controls the private sector but no one controls the public sector.

My plea and cry in this House to members on the government benches is: "Please wake up and understand the seriousness of what we are doing when we allow Crown corporations to be put in place at the whim of a minister with agency of Her Majesty status." That is a power the minister does not need.

If you had been attending the special committee hearings on Bill C-102, Mr. Speaker, you would have found that the second reading speech of the minister in this House, he had to admit, was somewhat misleading. He mentioned that we needed competition, that this was a way of providing competition in the marketplace and that these Crown corporations were necessary.

What concerns me is that we have moved way beyond the fifty-fifty mix of private-public involvement in the marketplace. These Crown corporations, particularly with the status which we are asking to be removed from the bill, are outside the laws that apply to everyone else. Also, their directors are not accountable as are directors in the private sector.

In committee the minister assured us that the chief executive officers of the new Crown corporations would be appointed from their boards of directors. One just has to look at the incestuous relationships which are now developing within the Crown corporations sector, within the public sector or this subgovernment that is outside the purview of and accountability to the House. Accountability could only come if this major piece of work on the part of the Treasury Board had been implemented in the Crown corporations act. That act has been drafted and is ready to be tabled, but we have not seen it.

I pleaded with the Minister of Energy, Mines and Resources not to come in with a bill like Bill C-102. He had all the power he needed in the present processes to do what he wanted, but he said: "That takes time and there is not time fcr what I want to do." the powers in Bill C-102, particularly the status we are trying to remove with the amendment to which I am speaking, are far broader than anything that minister or any future minister needs to act on behalf of Canadians.

I believe hon. members of the New Democratic Party and all speakers on this side have said that Bill C-102 is very, very bad. The bill itself should be withdrawn, instead of our being required to struggle with the powers being given to the minister in the bill.

May 19, 1982

I want to re-emphasize that we are mixing apples and oranges here. The bill talks about the Canada Business Corporations Act. If there is to be any accountability to Parliament, it should come under the Financial Administration Act. The experts cannot tell us how it sorts out. One can listen to a lawyer in committee give a fuzzy answer. When one takes the answer to be analysed by outside lawyers, they say that the entire area is in confusion. The bill is giving unbelievable powers which do not exist anywhere in the private sector to Crown corporations that are shells and phantoms. If there is an area of concern in my gut, it is that Crown corporations do not have the sense of behaviour which is required of the private sector, be it their boards of directors, chief executives or otherwise.

Committees of the House have worked for years on the poor behaviour of Crown corporations and their officers. For example, Polysar was using dummy invoices to transfer profits made onshore to offshore corporations in order to avoid tax in Canada. Also Radio Engineering Products, a Crown corporation which was put in place with Crown money, transferred its assets out of the country so that the government could not seize them. They have the slickest legal minds in the world working in these areas. All we have to do is review the behavioural problems in AECL, particularly in its international dealings, none of which has been properly accounted; commissions being paid to people offshore; and joint contracting deals made with other countries, for example, the Argentina Candu reactor. All these behavioural problems exist when people are not accountable through a system of disclosure.

Hon. members on both sides of the House, Liberal and Conservative, have worked on this question for years. The Auditor General has written reports that the system has been out of control since 1974. With all the warnings of the Auditor General, with all the work of the office of the Comptroller General and the Treasury Board, we have not heard one word about the Crown corporations act, a magnificent piece of work on the part of Treasury Board. We have not heard one word on the reports of the Standing Committee on Public Accounts on the entire matter of bringing accountability to the government and to the House for this whole level of subgovernment.

There are various examples of runaway behavioural problems because these corporations are not accountable. There is no window on their operations. After all these years of work, one really wonders if this place is worth the time, sweat and energy one puts into it, because bureaucracy and that government will do what they want-to hell with accountability. 1 have just about had it, with all the work which people like myself, the hon. member for Vancouver Quadra (Mr. Clarke), the President of the Treasury Board, one of the Acting Speakers and hon. members on both sides of the House, have done. We have worked our hearts out to bring this issue to account. Then we see Bill C-102 brought in by the Minister of Energy, Mines and Resources which thumbs its nose at those of us who are trying to represent our constituents and the people of Canada in general in an area of accountability. There is something tragic about the entire bill.

Energy, Mines and Resources

All I am doing is speaking to you, Mr. Speaker, or to anyone on the government side who is listening. No minister should have the powers which are conferred in this bill. No corporation, if we do not know the purpose of its formation, should be given agency of Her Majesty's status. This is really the last straw. Anger is starting to build in the country. The government should wake up to the fact that what we want through Part III of the estimates is some decent, honest disclosure; that is what is needed. This bill flies in the face of years of work by hon. members on both sides of the House. It flies in the face of totally apolitical work and dedicated, sincere energy and effort to try to make the system accountable to Canadian taxpayers.

Also there is taxation without representation in the energy package. In the total package of these bills unbelievable powers are being given to a minister of the state. This would not be half bad, but an essential element of Parliament which we inherited from the mother of Parliaments is ministerial responsibility. Obviously from the examples we have had in this session, ministerial responsibiity no longer aplies in this Parliament.

This form of government cannot stick together. It will not work. It will cause anger and frustration. I am awaiting the point of outrage when the people at large really understand how out of control is the entire system. To pour my heart out into this stuff is almost the most thankless thing I have ever experienced in my life. The problem with the Crown corporation issue, which will be aggravated and developed further with Bill C-102, particularly with agency of Her Majesty status therein, is the fact that there is no review. There is no one to question the mandate, or the manner in which the Crown corporation is serving its mandate and its objectives.

We have a comptroller generals act and an Auditor General Act which contain a value for money concept that is the most advanced in the world. It is not that we want supply to return to where the opposition can hold it up by endless debate and impede the government in forward progress, but there is only one alternative to returning to what was pre-1971-an honest, well organized system of information which provides a window, a view and a degree of accountability on how well the mandates and the objectives of Crown corporations are being served by their managers. All too often we find the incestuous relationships of boards of directors being comprised of former public servants or public servants moving out of the department which created the beast into a position as chief executive officer or on the board of directors. How can a board of directors discharge or question a chief executive officer who has been appointed by cabinet or by the Prime Mimster (Mr. Trudeau)? We should just think about that. They cannot and they will not.

This whole subgovernment concept, which is further aggravated with the presentation of Bill C-102 and this agency of Her Majesty's status, flies in the face of everything. I plead with members opposite to talk with the minister and allow this amendment, which removes lines 11 to 14 on page 2 from the bill, to pass and to let those people in the Crown corporations create their entities and shells through the normal channels which are available to them and in place right now. Let these

May 19, 1982

Energy, Mines and Resources

bills provide for some accountability under the Financial Administration Act. Let us stop giving these Crown corporations an automatic and direct guarantee to call on the Consolidated Revenue Fund to rectify their mistakes.

Under this bill the minister can create corporations which will be able to take billions of dollars in the form of government guarantees. For example, I understand that just this fiscal year closing, 1981, there is over $58 billion in known guarantees on contingent liabilities that are not in the public accounts of Canada. If we allow this type of legislation to go through, that situation will be aggravated to the point of national bankruptcy, and I believe that this is what we are really dealing with today. If we are going to allow a bill such as this to be passed, let us make sure that Members of Parliament have the proper tools to have an overview on the bill and access to the disclosure of the needed information to examine the mandate and efficiency with which managers and the boards of directors are serving their objectives. There must be some control over Crown corporations and, above all, there must be accountability.

The need for this accountability in Canada and within the governmental system has arrived. The clock is ticking away in the final hours because I believe that the taxpayers of Canada are close to the point where they will no longer tolerate intervention and interference by the state over the entire marketplace. The Crown corporations of this country are too interrelated, cross-subsidized and have too much communication between their directors to allow any company in the private sector to survive. 1 do not want to see a fifty-fifty balance of private and public corporations in the marketplace because 1 believe that would mean too many Crown corporations. The difference between private and public corporations is that a private corporation cannot survive without a bottom line.

It is interesting to see the advantage that Crown corporations have over major private corporations. For example, 1 was talking to two employees of Canadian Pacific Airlines. They were telling me that the problem they have competing with the very-well-run national airline, Air Canada, is that Air Canada had its debt cancelled and is therefore operating with an unnatural administrative burden. The private sector corporation, which comes under the taxpaying sector under acceptable accountability, just cannot compete with the lighter burden of the Crown corporation.

What is at stake is freedom in the marketplace. As we move from concentration on ownership in the private sector to allow even more concentration on allowing the state sector to have control over our lives, we lose freedom of choice. When we lose that, we have lost our freedom. All through the ages history has told us that when this happens, power over the people is the objective. I want to see this system survive and I want to see Crown corporations and the public services accountable to the institutions. I believe there should be parliamentary reform which will deliver that accountability.

I urge members on the government side to vote for this amendment and strike from Bill C-102 the phrase, "agency of Her Majesty status". Because that in itself has serious implications. I would also urge those members to develop legal answers which would clear up the confusion which exists between the relationship of a corporation under the Canada Business Corporations Act and one accountable through the Financial Administration Act.

In order to have any kind of accountability, any corporations which are created by the minister should come under the Financial Administration Act. The Canada Business Corporations Act content of Bill C-102 confuses the issue and 1 suppose it is there deliberately to confuse the issue so that we cannot make inquiries within the time frame and workload that we have as Members of Parliament in this place.

The issue which is raised by this amendment which was introduced by the hon. member from Wellington-Dufferin-Simcoe is one of the most serious we have had. The minister does not really need these powers provided to him under this bill and I am surprised that we did not catch his ear after all the pleas we made to him in committee about this. If the intent of this bill is that which we were told in committee, the minister does not need the broader powers he is seeking through this legislation. It is a bad bill, the minister does not need it and I would like to see it withdrawn. All the powers he needs are in place today. In my opinion, agency status is an offence to the President of the Treasury Board, who is a former chairman of the Standing Committee on Public Accounts and a member who has worked hard on this issue for years.

1 plead with hon. members to let us bring ourselves back to the point where we have some accountability to the people. Let us not create a subgovernment that not even we can examine and review. I plead with hon. members opposite to support this amendment so that the bill will at least be 50 per cent improved. It is quite hard to improve compost and rot so perhaps we can empty the bin and get rid of the bill altogether.

I close by saying that Crown corporations do not need these powers and should not be allowed to have their mistakes and debts automatically guaranteed by the Government of Canada. I do not believe that these corporations should be exempt from both provincial and federal laws. Crown corporations should be subject to the same law that private corporations work under. The issue we are concerned about is the authority of the cabinet to set up Crown corporations. We are concerned about the whole subgovernment that is outside the reviewing and accountability process that is being called for by the Standing Committee on Public Accounts, by the Auditor General and which the office of the Comptroller General has been attempting to initiate.

I repeat once again that we in the House have no opportunity to examine the mandates given these Crown corporations or to examine the efficiency with which their mandates and objectives are served. There is no control over boards of directors as there is in private sector corporations. If the state is going to be involved in the marketplace, I must ask what is wrong with making Crown corporations subject to the same

May 19, 1982

laws as the private sector. Why do we need to give an unnatural advantage to Crown corporations in financing and provide them with a legal umbrella and isolation? Why cannot the laws pertaining to cartels, competition, intervention, and all other laws which apply to the private sector not apply to the public sector?

I urge hon. members of the Elouse to support this important amendment, because I do not believe that any one minister should be given this type of power.

Mr. Ian Waddell (Vancouver-Kingsway):

Mr. Speaker, 1 rise to speak briefly on this amendment which was introduced by the hon. member for Wellington-Dufferin-Simcoe (Mr. Beatty). At page 17576 of Hansard for May 18, the hon. member had this to say:

How many instances do we need before members of the House, and particularly members of the NDP, are prepared to show respect for taxpayers' money, money which is coerced from their constituents?

The members of the Conservative Party do not help their case when they try to amend this bill, which I agree is a bad bill because of the way it deals with the set-up of Crown corporations, by going on a right-wing tirade, as the hon. member for Regina West (Mr. Benjamin) pointed out in his speech last night, against the whole principle of Crown corporations. That is the inarticulated major premise of many of their speeches. Nor do they help their position by saying we in this party are prepared to throw taxpayers' money around.

I do not say the hon. member who spoke last was particularly saying this, but I draw his attention to an example in our home province of British Columbia. A Social Credit provincial government, really a conservative provincial government, took all the resources of public Crown corporations that had been set up under the previous NDP government, such as BCRIC, the British Columbia Resource Investment Corporation. Its shares sold at $6 and eventually went up to $8. Now they are down to a little over $3 a share and the shares have gone into fewer and fewer hands.

We have a situation where the government took a public resource which belonged to all the people, "BCRICed" it, and put it into this corporation whose shares have done nothing but go down. It has been poorly managed since they have been there. Who is giving away public money? I just point that out. Otherwise I agree with some of the remarks made by the hon. member for Wellington-Dufferin-Simcoe.

Let me state again briefly the problem that we on this side have with this bill. We have no objection to the government setting up Crown corporations, but we do not see why it cannot come in and set up a Crown corporation by an act of Parliament. Surely that is the proper way to do it. Then after we had debated it, the Crown corporation could be properly set up.

Members opposite have said we cannot do that because it takes too long to go through Parliament. The answer is not to go around Parliament or continue the practice of orders in

Energy, Mines and Resources

council setting up corporations and do all of the lawmaking outside Parliament. The logical answer is to reform Parliament. You do not say that we do not have to reform Parliament and therefore you will continue with this kind of lawmaking. The logical way is to reform Parliament and then do the proper kind of law-making.

The other day I pointed out that if the government had not made an order in council amendment without parliamentary scrutiny of the Alaska pipeline act, 1978, it would not be in the exposed position it is in today over the pre-build of that pipeline. We could have had a full debate in the House and then sent the bill to committee to be looked at. Maybe it would not have made what in retrospoect turned out to be an unwise decision.

Our position is that if you want to set up a Crown corporation, which we are not philosophically opposed to-unlike many of my friends to the right-such as in the energy field, there is a proper way of doing it. There may be room for an expanded alternate energy corporation, a conservation program, a neighbourhood energy corporation or an Inuit energy corporation to share in the Beaufort Sea resources in partnership with other Crown corporations. There are all sorts of possibilities. However, it must not be done by a quick order in council by whoever happens to be the energy minister on a particular day and gets support from a couple of cabinet colleagues.

I was only half jokingly referring to the minister when he said he was a socialist and that these are socialist policies. I said they were Stalinist policies, not socialist. Socialist policies would have a lot of reference to the proper working of a parliamentary institution because that is the way to go. I just wanted to clarify that.

I want to reiterate some of the remarks made by the hon. member for Regina West, who said that we would support this amendment, not because we are philosophically opposed to Crown corporations but because we want to make the whole process better. Ultimately, we think the Crown corporations would be better constructed and would work. Unlike some of my friends to the right, we want Crown corporations to work.

The Acting Speaker (Mr. Blaker):

Is the House ready for the question?

Question.

The Acting Speaker (Mr. Blaker):

Is it the pleasure of the House to adopt the motion?

Agreed.

No.

The Acting Speaker (Mr. Blaker):

All those in favour will please say yea.