May 22, 1984

GOVERNMENT ORDERS

FINANCIAL ADMINISTRATION ACT


The House resumed from Monday, May 14, consideration of the motion of Mr. Ouellet (for Mr. Gray) that Bill C-24, an Act to amend the Financial Administration Act in relation to Crown corporations and to amend other Acts in consequence thereof, be now read a second time and referred to the Standing Committee on Miscellaneous Estimates; and on the amendment of Mr. Crosbie (p. 3688).


PC

Dave Nickerson

Progressive Conservative

Mr. Dave Nickerson (Western Arctic):

Mr. Speaker, if I recall correctly, I have already had approximately two minutes to deal with the motion of the Hon. Member for St. John's West (Mr. Crosbie).

The House of Commons finds itself in something of a predicament today. The House has already voiced its opinion on the closure motion which was introduced by the Government, and debate has been curtailed on the matter. Today the Bill is to be given second reading and referred to the appropriate committee. However, the motion which we are presently debating is that the Bill be not now read a second time but that that occur some six months hence. What happens this afternoon when the vote is taken? There is a possibility that the motion introduced by the Hon. Member for St. John's West might be carried. Where will that put us if the House expresses its opinion in two conflicting ways? I would imagine, however, that that is unlikely to occur because the Government will undoubtedly use its majority to rush this matter through and to foist it on the Canadian public.

It is evident that the Bill is flawed. Members on this side have spoken at considerable length and have demonstrated the areas in which the Bill is flawed. For example, it does not prevent the proliferation of Crown corporations. In fact, if anything, it makes it easier for the Government to establish yet more Crown corporations.

There will be a time limit imposed on parliamentary debate when new Crown corporations are brought into being, unlike the debate on Petro-Canada and Canagrex, which went on for

a considerable length of time because these were matters of great public importance. By and large, the public of Canada was of a contrary opinion to that of the Government and did not really want these things to happen. The Opposition was then able to do its job and debate these issues in earnest and at length. This will now no longer be possible. There will be a short time limit for debate on further Crown corporations, and that is, Sir, only if the Government does not want to go the Order in Council route, which it can do under this new legislation, or if it wants to create a new Crown corporation as a subsidiary of an existing one.

The legislation does not deal completely with the question of accountability. Most of the parliamentary review of the operation of Crown corporations will be, to all intents and purposes, after the fact. Although the Government is obliged to present to parliamentary committees its plans for the future, I would imagine that those plans would not be detailed and the Government would still engage in the same jiggery-pokery with Crown corporations as it did in the past. If it so wishes, it could instruct Crown corporations to do certain things-for example, Petro-Canada to take over Petrofina-and it can do that at the drop of a hat without bringing those plans before Parliament in advance for public scrutiny.

There is no real parliamentary surveillance of the operations or the plans of Crown corporations. There is no parliamentary surveillance which makes any kind of reasonable sense. Therefore, it is my intention to vote this evening in favour of the motion introduced by the Hon. Member for St. John's West which, if carried, would enable us to devote a further six months to the study of this important subject. It would give us time to go back to the public and to seek further expert input.

In all likelihood, in six months time we will have a new government if the election has been held by that time. In all likelihood it will be a Progressive Conservative Government, and our stand on Crown corporations has been made fully known. It was the Conservative Government under the leadership of the Right Hon. Member for Yellowhead (Mr. Clark) which introduced in the first place in 1979 a much more comprehensive Bill to deal fully with the Crown corporation problem. Even if an election has not been held by that time, and even if the Liberal Party as an interim measure still forms the Government of the day, it would likely be a different Government with perhaps a slightly different outlook from that which it has today. Therefore, in all likelihood, even with that possibility, the legislation which it might wish to bring forward dealing with Crown corporations would be superior to that with which we are faced today.

The problem with the present Government is that it cannot really open the doors and let the sunshine in. Its closet, Sir, is

May 22, 1984

Financial Administration Act

clogged up with the skeletons of the past. It is not really possible for the present Government to open up the window on Crown corporations, because if it were to do that, it would bring to light all the ways in which it has manipulated Crown corporations in the past and all the secrets it wants to see remain hidden.

I would suspect that if there were this public scrutiny, the resultant legislation might wish to incorporate within itself the provision for privatization of Crown corporations. There is a growing trend toward privatization. More and more Canadians are realizing that there are many things which the private sector can do better than can the governmental sector. The problem is that there is no fixed set of rules for the privatization of Crown corporations. The Minister of Transport (Mr. Axworthy) is to be complimented on his action in undertaking to privatize the Northern Canada Transportation Company. However, we do not know how he is going to do that. There are still some reservations on the part of members of the public, certainly members of the Opposition, as to whether he might give this to some of his political friends in some way or another. Therefore, any Crown corporation legislation should incorporate rules and guidelines for their privatization.

I want to say something about Bill C-25, the next Bill we will probably have to deal with. It will follow as a natural corollary to this Bill, and I think both C-24 and C-25 should be dealt with together over this six-month period advocated by the Hon. Member for St. John's West. If that were to take place, the whole question of Crown corporations could be dealt with in a much more businesslike way in order to achieve a much greater degree of parliamentary accountability than that proposed by the Government at the present time.

Topic:   GOVERNMENT ORDERS
Subtopic:   FINANCIAL ADMINISTRATION ACT
Sub-subtopic:   MEASURE TO AMEND
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PC

Michael Holcombe Wilson

Progressive Conservative

Hon. Michael Wilson (Etobicoke Centre):

Mr. Speaker, I am pleased to be able to participate in the debate on Bill C-24 and on the motion by the Hon. Member for St. John's West (Mr. Crosbie) to put off consideration of this Bill for some period of time. The Hon. Member has made a very logical request of the House. This Bill must be given consideration as part of an over-all package forming the order of business which the Government puts before the House. Bill C-24 is only part of the Government's over-all policy towards Crown corporations. Bill C-25 relates to companies such as de Havilland and Canadair, the mixed enterprises, so to speak. There are some very major omissions in this particular Bill which we hope will be taken up in Bill C-25, but we will not know that for sure until we get it into committee. 1 believe it is important that we look at these two Bills side by side.

There is another factor as well, Mr. Speaker, that of the position of Crown corporations under the competition Bill which is before us but is not yet into committee. The position the Government takes as it relates to Crown corporations under that particular legislation is also an important part of the package. As you can see, there is a very clear logic behind the motion of the Hon. Member for St. John's West.

Over and above that, I want to say as strongly as I can that this closure motion on the part of the Government is wrong because the Bill, as it has been presented, does not address the problems of Crown corporations as they appear to us in this House or as they appear to Canadians on a regular basis when they read about them. People are aware of this subculture of government consisting of Crown corporations. Some 265,000 people work for Crown corporations with some $65 billion in assets under their control. However, if you ask any Canadian if they could tell you what we have in mind, if they believe the bureaucracy and government spending is out of control, that the Government has lost control of the enterprises it is responsible for, the first thing that will come to their mind invariably is that Crown corporations have been allowed to proliferate. There has been no degree of financial or operating control. That is the point the average Canadian focuses on, that we must get better control of Crown corporations.

This point has not been addressed nearly as extensively as we had hoped it would be in this particular piece of legislation. That is why closure is wrong here. That is why it is important for the Government to take this Bill back and address the key problems of accountability and lack of responsibility which have been apparent over the past few years and have resulted in billions of dollars being lost at a time when we have huge government deficits. In essence, Mr. Speaker, huge amounts of money are being stolen from the next generation by this generation.

There are too many gaps in the Bill. It is a flawed piece of legislation. That is why we say it should be taken back to the drawing board. It is inadequate to address the problem. We need something which is more realistic and more akin to the legislation which the Clark Government introduced in 1979.

I would like to discuss briefly some of the aspects of the Bill which do not address the problem. Let us look at the Bill itself. It is enabling legislation. It is a blank cheque. There are no regulations. I do not believe that we, as Members of Parliament, should be asked to consider this Bill until those regulations are in place because of the importance to the legislation and to the operations of government which those regulations represent.

In the summer of 1981 we were considering Bill C-48, the Canada Oil and Gas Act. At that time we asked for the regulations. There was a tremendous amount of ministerial discretion within that Bill. The Bill was riddled with opportunities for the Minister to apply his own thinking rather than the policy of Parliament. Time and again we have seen how that Minister and the subsequent Minister have distorted the intentions of Bill C-48, as set out at the committee stage, through their actions under the vast amount of ministerial discretion provided in that Bill. That is what is missing from our consideration and that is another reason why we should be postponing consideration of the Bill. Too much is left to the Minister's or to Cabinet's discretion and there is not enough

May 22, 1984

opportunity for Parliament itself to put its stamp on the operations of these Crown corporations.

The role of the board of directors has been totally taken over by Cabinet. Normally the board of directors is asked to appoint the chief executive officer. That appointment is now made by the Cabinet. Normally the board of directors sets policies related to financing. That is now the role of the Minister of Finance (Mr. Lalonde). Normally the board of directors sets the policies on the operations of the Crown corporation. The problem here, Mr. Speaker, is that there is not a sufficient degree of direction provided for within the Bill to give the particular Ministers the direction which they should follow in providing direction to these Crown corporations.

I would like to speak on the subject of financing. The Minister of Finance is given a great deal of discretion with regard to the financing of Crown corporations. He decides whether a Crown corporation can raise $1 million or $100 million. On this side of the House we have asked the Government to provide us with an over-all limitation of government financing once a year. It is in place for the Government itself but not for the hidden government, the Crown corporations. Because of the freedoms and total authority that the Government has today, we believe it is important to have blanket authority over Crown corporations' direct borrowing and Crown corporations' guarantees, including guarantees of governments as well as guarantees under various programs. This Bill does not provide for that. This protection for which we have asked has not been provided by two consecutive Ministers of Finance.

Another aspect to this legislation is that we have seen over the years Crown corporations and their subsidiaries being created without any degree of parliamentary control. While this Bill proposes to give some control, it does not do so with respect to subsidiaries. The Government does not want Parliament to have that sort of control but wants to limit it to the Crown corporations themselves.

The limited role of Parliament to initiate a reasonable degree of debate and understanding for the creation of new Crown corporations has meant the total loss of control. Clause 155 of the Bill allows for only 30 days of committee time for the consideration of new corporations and only seven hours of parliamentary debate. Any Crown corporation that exists today, such as Air Canada, Petro-Canada, CBC, Canadair and de Havilland, could have been created with that type of control. In fact, that did not even take place with CDIC. The Government simply created that corporation by Order in Council and did not even consider putting it before Parliament. I believe that corporation has been in existence for over a year and a half and we will finally see passage of legislation in that respect. That is an example of the power of Parliament. We were not able to do anything about that particular corporation.

Financial Administration Act

I have just touched on a number of issues. I know my colleagues will be dealing with other aspects of the Bill. The simple point is that this legislation should not go ahead. There are very logical reasons why it should be considered as a package with other Bills that are on the Order Paper. That is why we believe Members of Parliament should vote against this Bill and in favour of the motion by the Member for St. John's West.

Topic:   GOVERNMENT ORDERS
Subtopic:   FINANCIAL ADMINISTRATION ACT
Sub-subtopic:   MEASURE TO AMEND
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NDP

Nelson Andrew Riis

New Democratic Party

Mr. Nelson A. Riis (Kamloops-Shuswap):

Mr. Speaker, I am pleased to have the opportunity to say a few words about Bill C-24. It is in the same spirit, although perhaps for some different reasons, that I want to echo the comments that were already made today. That is, it is important for Members of Parliament to oppose the legislation contained in Bill C-24.

I want to begin my comments by suggesting that I believe the Canadian economy is one that reflects the status of being a mixed economy. I believe Canadians generally appreciate the fact that there is a role for the private and public sector to play. I suspect that most countries of the world, particularly those that are progressive, reflect that type of mixed economy.

I think it is fair to say that Crown corporations are as Canadian as the beaver or the game of hockey. They have always been here and I suspect that they will continue to play a major role in the development of the Canadian economy of the future. I do not believe many serious economists would indicate anything to the contrary. We have seen the value of Crown corporations and we have seen Crown corporations that work extremely well. There have been Crown corporations that have been developing and leading the way in technological change. Research and development through to production, in a number of instances, have been led by Crown corporations both at the provincial and federal levels.

I have made those positive remarks about Crown corporations so that our position that we are not opposed to Bill C-24 because we are against the principle of Crown corporations is clearly understood. Quite the contrary, we believe there is an appropriate role for Crown corporations to play. However, we are particularly concerned about the lack of accountability in the present system and in the system as proposed in Bill C-24. When one looks at the root of many of the difficulties facing Canada today, accountability is part of that problem, whether it concerns the public sector or the private sector.

Let me talk for a moment about accountability with respect to the private sector. For the past four and a half years while 1 have been a Member of Parliament we have on many occasions passed legislation that gives incentives to corporations to do certain things. There have been all kinds of incentives. I suppose the most obvious one, the grandest one of them all and the one at which other countries might be laughing, is the PIP grant system. Here was an incentive, if you like, to oil companies operating in Canada to encourage them to explore in our frontier areas, offshore and in the far north.

May 22, 1984

Financial Administration Act

My family comes from Norway. Off the coast of Norway today is the same kind of activity that we have. Oil companies explore for gas and oil in a similar milieu to what we find off our East Coast. Norway has a different system from what we have. Norway does not have PIP grants. Just by way of background, Mr. Speaker, our PIP grants provide up to 80 per cent financing by the taxpayers of Canada. As a matter of fact, Sir, if you take advantage of some of the other tax incentives you could have about 95 per cent of the total exploration and development costs of these wells paid by the taxpayers of Canada.

Topic:   GOVERNMENT ORDERS
Subtopic:   FINANCIAL ADMINISTRATION ACT
Sub-subtopic:   MEASURE TO AMEND
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PC

Benno Friesen (Progressive Conservative Party Caucus Chair)

Progressive Conservative

Mr. Friesen:

Most of them dry.

Topic:   GOVERNMENT ORDERS
Subtopic:   FINANCIAL ADMINISTRATION ACT
Sub-subtopic:   MEASURE TO AMEND
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NDP

Nelson Andrew Riis

New Democratic Party

Mr. Riis:

As one my colleagues has indicated, most of them end up being dry. However, that is the name of the game. But 95 per cent of the cost of drilling a $200 million well is borne by the taxpayers of Canada. If oil or natural gas is found, then Canadian taxpayers, for that 95 per cent investment, receive 25 per cent of the action, so to speak. Think of it for a moment in terms of the concept of accountability. We put up 95 per cent of the cost of developing a new oil rig, and if the oil companies are successful we, the taxpayers, receive 25 per cent of the action.

I mentioned Norway, Mr. Speaker, because the Norwegians are in a similar situation. They have a different approach. They say to the oil companies: "Come and explore in our offshore areas". The oil companies ask: "How much are we going to get from you? What is the enticement? What kind of incentive or bribe do we get to develop the offshore?" The answer is none-zero. No money. The Norwegians will not invest any money in exploration, but the oil companies are welcome to explore. They do.

All of the major oil companies around the world involved in exploration are involved in drilling off the coast of Norway. If they find oil or natural gas, they take about 80 per cent for no investment at all but just for the privilege of having oil companies find oil, develop it, and they get 20 per cent of the total action. They are all in there, Mr. Speaker; they all think it is a fine deal-Mobil Oil, Shell, Imperial Oil and so on. Can you imagine what they must think in the board rooms when they talk about Canada providing 95 per cent of the investment capital for 25 per cent of the action on a successful development?

When it comes to accountability, Members of Parliament have a responsibility. I do not think PIP grants reflect much accountability when we ask small businessmen, men and women, to provide the taxes that are required to keep our economy going and to keep our society and its social programs in place, while we throw away billions of dollars to one particular group. That is not being very accountable to those who have elected us to represent their best interests and have asked us to collect taxes fairly and to invest the money wisely. It is a very sad comment on the accountability that we are seeing reflected here as Members of the House of Commons.

When we talk about accountability, we can talk about the accountability which must be improved as it touches the private sector, particularly through our taxation system and all of the incentives that we give to the corporate sector and to Crown corporations. Our concern within the New Democratic Party is that Bill C-24 does not provide the accountability required. As a step in the right direction, however, I want to say that my colleague, the Hon. Member for Prince Albert (Mr. Hovdebo), who served on the agriculture committee, suggested when Canagrex was being debated that we needed to have a clause in the Canagrex Bill that provided the opportunity for the Auditor General to carry out a comprehensive audit on Canagrex whenever he deemed it to be appropriate.

That is the kind of accountability we would like to see in Bill C-24. We would like to see the Auditor General given the opportunity, as he or she sees fit, to carry out a comprehensive audit to ensure the taxpayers are getting a good return on their investment. We led the way on the Canagrex Bill to ensure that accountability was placed on that Crown corporation. It is the same type of accountability we would like to see now incorporated into Bill C-24.

We are concerned about the lack of a window into the subsidiaries of the Crown corporations, clearly absent from Bill C-24. We are also concerned about those Crown corporations that are non-commercial. I am thinking of the Canada Council, perhaps the CBC and the National Film Board. These are non-commercial ventures and Crown corporations. We are concerned that if they are to be incorporated somehow into the terms of reference of Bill C-24, that kind of government involvement in the Canada Council would be inappropriate for the cultural community of Canada. It would be inappropriate for the Government to be so closely involved with the cultural community and cultural developments of our nation.

We are opposed to Bill C-24 in its present form. We are especially concerned about the lack of accountability built into this Bill when it comes to Crown corporations.

Topic:   GOVERNMENT ORDERS
Subtopic:   FINANCIAL ADMINISTRATION ACT
Sub-subtopic:   MEASURE TO AMEND
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PC

Benno Friesen (Progressive Conservative Party Caucus Chair)

Progressive Conservative

Mr. Benno Friesen (Surrey-White Rock-North Delta):

Mr. Speaker, it is somewhat of a pleasure again to speak on this measure. Bill C-24 would institutionalize the proliferation of Crown corporations in Canada.

In beginning my remarks, I think it is important to have some historical perspective about Crown corporations. The Canadian experience has been that Crown corporations have played a very important role in our development. With the kind of geography we share in our land with something like 4,000 miles of border, six different time zones, a sparse population in many regions, and because of the different problems we have, Crown corporations have been created over the years. I think all of us would concede that without the construction of the CNR and the CPR as binding forces for our country, Canada could not have developed over the years as it has. Something like 50 years ago we had the formation of the CBC, the National Film Board, and some of the cultural agencies which helped to launch industries in Canada at a time when the private sector was not in a position to cover that

May 22, 1984

great geographic expanse nor was the population large enough to provide the kind of marketplace necessary for it to function. Because of our historical experience, the concept of Crown corporations finds easy acceptance among the Canadian people. All of us would admit that Crown corporations have played a very formative and important role in the development of Canada.

Now we move to a new phase. One of the watersheds of the new phase was the year-end interview of the Prime Minister (Mr. Trudeau) in 1975. Speaking to one of our newsmen, he said that the marketplace was just not functioning properly and, therefore, the Government would have to intervene and get more active in the marketplace.

I think many Canadians have concluded that many government programs have been designed to make certain that the market-place was not functioning properly and that it would not be able to function. Canadians have also concluded that many of the regulations which have been put in place and a number of the Crown corporations which have been instituted over the years were there for no other reason but to ensure that the marketplace would not and could not function properly; then the Government would have a reason to move in and to substantiate the remarks of the Prime Minister in December, 1975, when he said that the marketplace was not functioning properly.

I am not perpetuating simple, idle gossip. I would like to refer to the example of the insulation business. All of us understand that the insulation business, glass wool and rockwool, is a fairly prosperous and thriving business in Canada. There are many good companies providing healthy competition in the marketplace. All of them are doing good work. Perhaps they need some supervision, but they are doing good work. However, several years ago Petro-Canada, that new national institute, began to proliferate and formed a new company called "Canertech". It is a wholly-owned subsidiary of Petro-Canada. It began its own life cycle and began to spawn its own companies. It purchased a substantial interest in a company known as Pacific Enercon, a company that was begun by an American, a Californian. It was a multi-million dollar business, but it was losing money and was apparently about to go bankrupt. That is just the kind of company Canertech was looking for, so it invested something like $4 million in this losing company. Then it began operations in the rock-wool insulation business but it is still losing money.

Now we have a situation where Pacific Enercon with tax dollars is injecting a new player into the marketplace. The insulation business was doing all right before, and now Pacific Enercon, with our tax dollars, can compete unfairly in the marketplace and ensure with our subsidies that it can create havoc for the other insulation companies. Government corporations have now entered into a new era. They are there to compete unfairly with healthy companies and with that competition try to ensure that healthy companies, which under

Financial Administration Act

normal circumstances would do all right, fail and then that segment of the marketplace is left for them.

Bill C-24 is no ordinary housekeeping Bill to tidy up interrelationships among Crown corporations. It is a Bill to ensure that unfair competition will be a permanent factor within the marketplace. This will come about as a result of several key measures in the Bill. The first is that Cabinet can issue directives to any parent Crown corporations. Clause 154 enables Cabinet to issue directives to Crown corporations and to alter the working arrangements within them. According to this clause directives can be issued and, while they are tabled in the House of Commons 15 days after the beginning of the next sitting, they do not have to be tabled if the Minister feels that it would be detrimental to the commercial interests of a Crown corporation. There we have the institutionalizing of unfair competition.

If the Government believes in Crown corporations, it should let them compete on a fair basis. If it is to be fair, it must be fair for all players. However, a provision in the Bill allows the Minister to withhold vital information on how a Crown corporation is functioning.

Second, Cabinet can review all parent Crown corporation by-laws with power to change those by-laws. Third, Clause 127 allows Crown corporations to indemnify their representatives against civil, criminal or administrative action. That is about as ominous a provision as there could be. In effect, it says that Crown corporations under these provisions will be able to do things which if not illegal are certainly unethical, and that if they are taken to court, tax dollars could be used to pay court costs so that they can defend themselves.

We have that kind of attitude already in the fact that Crown corporations are a law unto themselves. I wrote a letter to Canertech several months ago. I received this reply: "I am not in a position to discuss the company's current financial situation". Here we have a Crown corporation operating with tax dollars as though it is a private enterprise, but saying that it is not accountable to a Member of Parliament and will not divulge its financial information.

These are some matters which seriously infringe upon the rights of the market-place. I contend that they are designed to ensure that the market-place cannot function and the Government has an excuse to move in.

Topic:   GOVERNMENT ORDERS
Subtopic:   FINANCIAL ADMINISTRATION ACT
Sub-subtopic:   MEASURE TO AMEND
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PC

Henry Perrin Beatty

Progressive Conservative

Hon. Perrin Beatty (Wellington-Dufferin-Simcoe):

Mr. Speaker, certainly it should be evident to every Member of Parliament that there is a need for Crown corporations legislation to ensure some element of accountability and control over the number of Crown corporations we have today.

In recent days the Government released a booklet prepared by the Treasury Board of Canada Secretariat entitled Crown Corporations and Other Canadian Government Corporate Interests. It is dated March, 1984 and it is interesting in that the Government attempts to catalogue the number of Crown corporations in which it has an involvement, either through direct ownership or through joint ownership or other investment. The booklet lists the number of Crown corporations,

May 22, 1984

Financial Administration Act

which it defines as corporations wholly owned by the federal Government. We find that between December, 1982 and March, 1984 the number of corporations wholly owned by the Government of Canada increased from 186 to 195.

I would be prepared to bet that very few Members of the House of Commons could name the nine new Crown corporations if they were asked. Indeed, very few Member of Parliament or very few Canadians could list more than a couple of dozen of the 195 Crown corporations which are in existence at the present time.

In a situation where the Government allows Crown corporations to proliferate with virtually no control, where Members of Parliament are unaware of the existence of many of these Crown corporations, and where we have example after example of extremely poor management, cost overruns and cases where Crown corporations have to return to the public treasury to ask Canadian taxpayers to bail them out, there is something very seriously wrong. One need look no further than at the front page of the business section of today's edition of The Toronto Star where one will find the headline "Will Ottawa bail out ailing nuclear firm?" In part the article reads:

Taxpayers may have to cough up millions to revive Candu reactor and its industry.

It refers to Atomic Energy of Canada Limited, another federal Crown corporation which is set to lose literally hundreds of millions of dollars by the time it is through. There is no doubt as to the need for comprehensive legislation to deal with the whole issue of Crown corporations.

The issue before the House today, as the Government tries to cut off debate on this Crown corporations legislation, is whether the Bill does what it is supposed to do. Does it increase parliamentary control? Does it improve management? Does it allow boards of directors of Crown corporations to perform their function?

The answer to those questions is that the Bill does not do what it is alleged to do. For example, in the area of creation, the President of the Treasury Board (Mr. Gray) leaves the impression with Members of Parliament and with the public that this Bill will plug Parliament back in and ensure that it is consulted before the creation of a Crown corporation. Of course, if a corporation were subsidiary, Parliament would have no role to play.

[DOT] (U50)

We will find in the future that there will likely never again be a special Act of incorporation such as there was for Petro-Canada, Air Canada or the CBC which allowed Parliament to debate the essence of a corporation and to set its structure and spell out its mandate. Instead, these companies will be incorporated under the Canada Business Corporations Act and there will be a limited debate in Parliament of seven hours in the House of Commons and seven hours in the Senate, with a brief committee study. Obviously, Mr. Speaker, that undermines Parliament's role rather than strengthens it.

Indeed, Mr. Speaker, even that limited procedure for parliamentary control is a bit of a sham because the Government

leaves the impression that there would at least be the element of control when creating new parent companies of Parliament being able to look at an Order in Council and debate it in the House for at least seven hours. In fact, there is nothing in this Bill that binds the Crown to that. In fact, the Bill does not change the status quo. A Cabinet Minister of the Government will be able to incorporate new Crown corporations and do so without one minute's parliamentary debate or parliamentary approval.

Dr. Ed Clark, the man in the Treasury Board secretariat who is responsible for Crown corporations policy, told the Canadian Institute of Chartered Accountants that the Department had in fact received a legal opinion from the Department of Justice which indicated that this Bill was binding on the Crown. In fact, that was totally false. The Government has received no such opinion. If indeed the Government claims that it has received such an opinion, let Dr. Clark or the President of the Treasury Board produce that opinion. Indeed, Mr. Speaker, since that time, Dr. Clark has communicated with the President of the Treasury Board and has denied that he ever made the statement that others witnessed him making, and has indeed confessed that there is no such opinion from the Department of Justice which indicates that this Bill is binding on the Crown.

If the President of the Treasury Board wishes to check the veracity of Dr. Clark's assertion that he in fact never made a comment claiming that there was such a legal opinion, let him ask other people who were at the meeting. They would be prepared to give their point of view and I think it would be a useful test of Dr. Clark's reliability.

Since that time, the Treasury Board has attempted to obtain legal opinions indicating that this would be binding on the Crown and it found that just the opposite was the case. In fact, that provision in this Bill is not binding on the Crown and even the limited procedures for parliamentary control do not apply over the incorporation of new Crown corporations. Business could continue to be done as usual. When we have that sort of sham, an attempt to subvert parliamentary control in the name of promoting parliamentary control, you can see, Mr. Speaker, why we oppose this Bill so strongly.

What about the function of management, Mr. Speaker? What we saw in the cases of Canadair and de Havilland were massive cost overruns, massive public subsidies and a complete failure on the part of the board of directors to do its work. One of the things the Government says it wants to do is beef up the role of boards of directors, yet it would do just the opposite. Cabinet would have the right to choose the chief executive officer and the auditor. Cabinet would even have the right not only to set their salaries but also to write by-laws for Crown corporations. What would be the function of boards of directors in the future other than to collect per diems and create a resting place for defeated Liberal candidates? Surely, Mr. Speaker, if we are serious about promoting parliamentary control and improved management of Crown corporations, then we are entitled to much better legislation than this.

May 22, 1984

In addition, Mr. Speaker, this Bill is about to be forced into committee. Government Members say that there has been enough parliamentary debate. Are they prepared to allow the public to appear in committee? The word that is being put out by the Treasury Board at the present time is that the Government intends, after it forces this Bill through the House, to prevent any outside witnesses from coming before the committee.

Members of this side of the House believe that the Canadian Institute of Chartered Accountants, the Canadian Chamber of Commerce, the Business Council on National Issues, the Consumers' Association of Canada and others not only have a right but perhaps a responsibility to appear before the committee and state their views. Yet what the Government wants is not only to gag Parliament but to gag the private sector as well and to prevent Canadians from presenting their points of view on this particular issue.

It looks like the Government is planning to spend one day in committee to discuss a Bill of this nature and scope. If anything ever pointed out how grievously flawed this Bill is and how little interest the Government has in allowing some parliamentary control over Crown corporations, it is the Government's attitude toward this Bill, the surreptitious nature of what it is trying to do behind the veil that it is putting in front of Parliament and its attempt to gag Parliament and block participation by the public in discussion of this Bill. Those things certainly indicate what the Government's attitude is toward control over Crown corporations.

At the end of this day, Mr. Speaker, when we are forced to vote on this Bill, Hon. Members on this side will oppose the Bill and will oppose it as strongly as we can. It is a bad Bill and a dangerous measure. The methods that have been used by the Government to force this Bill through the House and to prevent public and parliamentary debate on the legislation speak volumes about the Government's attitude. That should give every Canadian who believes that it is time to bring about some parliamentary control over Crown corporations and to ensure that the public's tax dollars are properly respected some cause for concern. At the end of this day, we will be voting to oppose this Bill and will be going to committee with the demand that private individuals and organizations from the private sector be permitted an opportunity to speak on this Bill, so that the Government will not simply be able to ram this Bill into law without proper scrutiny.

Topic:   GOVERNMENT ORDERS
Subtopic:   FINANCIAL ADMINISTRATION ACT
Sub-subtopic:   MEASURE TO AMEND
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PC

Geoffrey Douglas Scott

Progressive Conservative

Mr. Geoff Scott (Hamilton-Wentworth):

Mr. Speaker, it is with mixed feelings that I rise to speak to the subject matter of Bill C-24 today. The bad news, of course, is that I must speak | under the circumstance of time allocation or, in not so diplomatic language, closure.

The Government is a past master at limiting debate on legislation it wants to push through the House no matter what the costs, or consequences to either the Canadian public or Parliament. I am given to understand that the Right Hon. Prime Minister (Mr. Trudeau) wants this Bill pushed through the House before he retires in June. That is the reason for time allocation, Mr. Speaker. I suppose that after 16 years of

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having Crown corporations multiplying like rabbits with many of them running amok without proper controls on their activities, the Prime Minister wishes to be noted in the history books as the one who sought to control the financial morass that he and his various Cabinets helped create.

It is with pleasure, however, that I rise to support the motion standing in the name of my colleague, the Hon. Member for St. John's West (Mr. Crosbie), which would provide that the Bill not be read a second time now but in six months hence; in effect, a six months' hoist. I support that recommendation for two very important reasons. The first is that the Bill as drafted is badly flawed. My colleagues from the Progressive Conservative Party have been pointing that out during the whole of second reading and there is no time for me to reiterate these concerns except to note that they are legitimate and very serious concerns that must be addressed by the Government before it tries to ram this legislation through the House.

Rising at this time, Mr. Speaker, also allows me to put clearly on the record my Party's views concerning the Canada Council and its relationship to Bill C-24, I have been supporting the six months' hoist of the present Bill because the Bill violates an important and long-standing principle which up until now all Parties in this House stood for and supported, the principle of having an arm's length relationship between the government of the day and its cultural agencies. This Bill violates that principle of independence from government, Mr. Speaker, by bringing the Canada Council under the authority of the Financial Administration Act. This is unprecedented and, in my opinion, insupportable.

The arm's length principle is based upon the belief that we should ensure that our cultural and artistic life be separate and distinct from our political life and that it should be free from political interference and control. The Massey Commission accepted this principle and recommended that the Canada Council be based upon the example of the Arts Council of Great Britain which has the state as patron but has an arm's length relationship with the government. The support and funding it receives is based upon artistic purposes and not political ones. This Bill blurs and distorts that principle.

It must be asked why it is necessary to introduce the Canada Council to a new structure for scrutiny and then spell out restrictions on interference. Clause 99(7) deals with this, Mr. Speaker. The question is why? I am sure we can all debate the reasons. The Canada Council itself understands the serious consequences of its being added to the FAA schedule and that is why it is speaking out so strongly against this Bill. It remembers only too well what happened in 1978 when the government of the day reduced the grant to the art bank by $800,000.

The then Secretary of State who is now the Minister of Employment and Immigration (Mr. Roberts) was outraged that the Canada Council should assert its independence of what he felt its priorities should be. The Canada Council was doing what it had the right and legislative provision to do. It was acting independently of the Government in the manner in which it was set up to act.

May 22, 1984

Financial Administration Act

The Canada Council itself, in summarizing its concerns about Bill C-24, said this:

It is difficult to predict how the powers in the Bill would be used, but the following are controls which are possible under the provisions of the Bill:

Within the broad definition of the arts in the Canada Council Act, the government could determine which art forms the Council will and will not support.

The government could control the allocation of the Council's budget to particular disciplines, to theatre as opposed to visual arts, music as opposed to literature, et cetera. It could specify what types of artistic activity in each art form will be funded and in what amounts.

The Liberal Government has been treating the Canada Council in a way that we find unacceptable. The report of the Federal Cultural Policy Review Committee-the Applebaum-Hebert Committee-stated:

Public policy should facilitate self-expression, not control or organize it.

The Applebaum-Hebert report studied this issue and judged its importance to be so fundamental to its purpose that it set out as its first recommendation the unique and sensitive nature of the cultural agencies. The first recommendation read:

The status of federal cultural agencies should be defined in a new Cultural Agencies Act, in recognition of the fact that government activity in culture and the arts is subject to special considerations requiring a distinctive measure of autonomy. The provisions of this statute should prevail wherever they may conflict with those of the Financial Administration Act or the proposed Government Organization Act.

The Applebaum-Hebert report went on to state the opinion that, due to the sensitive functions of the cultural agencies, they should also be exempt from political direction in the form of ministerial directives of either a general or a specific nature.

It should be pointed out that the Liberal Government has rejected these ideas. It did not even consider how to deal with the cultural agencies except through the blanket legislation which was drafted to ensure accountability of Crown corporations such as de Havilland, Canadair, AECL and the Canada Sports Pool Corporation. The Government simply added the Canada Council to the list as if it was in the same category. It is not.

The Canada Council is presently accountable to Parliament. It provides detailed reports on how and why its funds are disbursed to the cultural and artistic community. Its representatives are available to come before committees of the House to give explanations for their judgments and expenditures and to defend them. Under Section 22 of the Canada Council Act, the Auditor General has the authority to audit the accounts and financial transactions of the Council. This Government is not interested in accountability. It is interested in politicizing the process of the distribution of cultural funds to a greater extent, in the same way as it has politicized the funds provided to assist those Canadians who are unemployed. The Government will politicize anything it can get its hands on. To give it the legislative approval to do so would be foolhardy and wrong. The arts community recognizes this and has voiced its disapproval.

If the Government is truly interested in not controlling the funds allocated to cultural agencies and the political abuse which is attached to that, then let it introduce a Cultural Agencies Act, as was recommended by Applebaum-Hebert, which will set out procedures and guidelines for these sensitive agencies. Let the Government recognize, in proper statute, the rights and independence of all the agencies so that they cannot be tampered with in the way this Bill enables the Government to do so.

At the very least, I hope the Government will seriously consider the advisability of amending the schedule to delete reference to the Canada Council. As it stands now, Bill C-24 is inappropriate for the Canada Council. It should be amended to ensure that the independence of the Council and the arm's length principle which is so fundamental to our democracy are not compromised or infringed upon. The Canada Council should not be covered by Bill C-24.

In conclusion, I would like to refer to a commentary which was given on CBC-FM radio by my friend, Sarah Jennings, in which she pointed out:

-the Tories are generally in support of the objectives of this Bill in terms of the larger issue, which is financial accountability for these federal Crown agencies.

She indicated that the Bill must come to grips with the cultural issue. She continued:

-they're trying to pull their cultural policy together, and honestly I don't think they've even addressed themselves to the issue.

As far as Bill C-24 and the Canada Council are concerned, we most certainly are addressing ourselves to this issue.

Topic:   GOVERNMENT ORDERS
Subtopic:   FINANCIAL ADMINISTRATION ACT
Sub-subtopic:   MEASURE TO AMEND
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PC

Robert Lorne McCuish

Progressive Conservative

Mr. Lome McCuish (Prince George-Bulkley Valley):

Mr. Speaker, it is a privilege to speak on Bill C-24 and on the suggested amendment by my colleague, the Hon. Member for St. John's West (Mr. Crosbie), that it be hoisted for a six-month period.

Bill C-24 purports to be a Bill which will enhance the control of government and Parliament over Crown corporations. Certainly, that in itself is laudable, given the proliferation and the record of Crown corporations to date. It is obvious that control mechanisms are sorely needed. However, the legislation which has been presented to the House does not represent an improvement to an entirely offensive situation. What we have before us is a toothless piece of legislation which will do little to bring Crown corporations under parliamentary scrutiny and control.

Given the scandalous performance of Crown corporations, it is difficult to understand why this Government does not want to make Crown corporations accountable. It is obvious that they need assistance. The de Havilland and Canadair Fiascos are typical examples of why Parliament should be able to scrutinize this whimsical abuse of the public purse. When the money of the people who elected us to serve them is given to well-paid executives in the form of bonuses, something has gone awry, especially when the bonuses are given to executives of a company which has suffered catastrophic losses-losses to the taxpayers of Canada.

May 22, 1984

There are other not so well-known examples of financial surrealism. In my Province of British Columbia, forestry is the largest economic activity. It generates more direct and indirect government revenue and employment than any other sector of that economy. The wealth comes from the forests of British Columbia, which are 95 per cent owned by British Columbians. At the present time, the forestry industry in British Columbia is in a mild recovery stage.

It is not with little dismay that we find the Export Development Corporation financing forest development projects in Mexico, Peru and Poland. These developments will compete with the forest product exports of British Columbia. At a time when the British Columbia forest industry is experiencing a fragile recovery, a Crown corporation gives it a competitive slap. The money used for development in Mexico, Peru and Poland is sorely needed by the Canadian forest industry to give it the competitive edge it needs in international markets.

The list of Crown corporation shortcomings is frightfully long. I refer to these examples in order to demonstrate the necessity of accountability. Supposedly, the Government which has brought forward Bill C-24 understands the need for ministerial responsibility, control of proliferation and accountability-

In a brochure entitled New Legislative Proposals for the Control and Accountability of Crown Corporations, the Government reveals that new measures are needed to strengthen the control and accountability of Crown corporations. How does the Government think this can be achieved? It can be achieved by clarifying the roles and responsibilities of Parliament, government, boards of directors and managers of Crown corporations. The Government then decides that by amending the Financial Administration Act it can strengthen the controls and accountability of Crown corporations. Thus we are presented with Bill C-24.

On March 15, the President of the Treasury Board (Mr. Gray) said that Bill C-24 would "clarify the roles and responsibilities of Parliament". When we examine the nuts and bolts of the legislation we find that the role of Parliament is indeed clarified. The role of Parliament is to be as insufficient as it always was. Parliament will have no control whatsoever over the creation of subsidies by Crown corporations. Naturally, this is exactly the area in which we have witnessed the greatest proliferation of Crown corporations.

Bill C-24 also allows a Minister to create a Crown corporation if he or she already has the power to do so through an existing Act of Parliament. There are several instances in which this can be done. The Minister of Energy, Mines and Resources (Mr. Chretien) could incorporate new parent Crown corporations through the existing Department of Energy, Mines and Resources Act or through the existing Atomic Energy Control Act. The Minister would not even have to come near Parliament if he desired to establish a new Crown corporation.

Financial Administration Act

We have as well the situation where a Minister might table a special Act in Parliament in order to incorporate a Crown corporation. What a startling occurrence this would be. Parliament would actually be consulted. However, review would be limited to 30 days in committee and seven hours of debate in the House. Closure of this nature, Mr. Speaker, is tantamount to criminal. What starts as a good idea ends up being a cruel joke. Is the Government seriously going to allow only seven hours of debate on matters of such import to the people of Canada? Obviously the Government intends to treat Parliament's role as it always has-as a charade.

Another area which the Government has not come to grips with is ministerial accountability. Bill C-24 gives authority to Cabinet or to the Treasury Board. Here we have groups of Ministers who are supposed to be accountable. We will not have accountability until an individual Minister is given responsibility. It is a fact that we will not have accountability while authority rests with groups rather than with individuals. If we need proof of this, all we have to do is look at Canadair or de Havilland. When the chips were down no one was accountable.

Bill C-24, an Act to amend the Financial Administration Act, has many more flaws than those which I have touched upon. For instance, there is an insufficient role for the boards of directors. Essentially boards will be advisory councils without the hands-on authority which is needed in the leadership of Crown corporations. To make Crown corporations efficient there has to be an onus of responsibility placed on the board of directors. Responsibility has not been the forte of this Government and Bill C-24 certainly symbolizes that fact. This Bill is supposed to correct many of the shortcomings in the relationship between Parliament and Crown corporations, but it does not. It makes a mockery of what Parliament is supposed to be. We are not dealing with a matter which has many possible directions; we are dealing with a matter which has only the right direction. Bill C-24 demonstrates that again the Government is lost.

This Bill should be hoisted for six months so that a responsible government can introduce legislation which will give Canadians confidence in how the public purse is used.

Topic:   GOVERNMENT ORDERS
Subtopic:   FINANCIAL ADMINISTRATION ACT
Sub-subtopic:   MEASURE TO AMEND
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PC

John Patrick (Pat) Nowlan

Progressive Conservative

Mr. Pat Nowlan (Annapolis Valley-Hants):

Mr. Speaker, I also want to join in the debate on Bill C-24. Quite frankly, I cannot think of another Bill which demonstrates more clearly the difference between a government which has been in power too long and a Party in opposition which wants to change that government. Perhaps, Mr. Speaker, if we in the Opposition had been in power 20, 30 or 40 years, with a few brief "hiccups" in history when there was a change-and in the words of Mr. Pickersgill many years ago, the Tories are like the measles; everyone has to get them every so often, but when you have recovered, put the Liberals back in power-perhaps our criticisms of the serious implications of Bill C-24 would not be as strong.

Quite frankly, Mr. Speaker, if anyone has a disease, it is the Government across the way, and it is a lot more serious than measles. It is called "Crown corporationitis". If there is one

May 22, 1984

Financial Administration Act

thing at all which is perhaps the hallmark of a government which has been in power too long, it is when it believes that Crown corporations which are not accountable to the Parliament of Canada are the way to run the country.

You have sat in that Chair, Mr. Speaker, as well as other chairs in this House, and graced them with your wisdom. You have seen, as I have, how this Government has delved into the pockets of the taxpayer without accountability as to why it did so. If you wanted to be objective, Mr. Speaker-and I do not want necessarily to be objective-on that one test alone, you would agree that Crown corporationitis is a disease which Canadians have to cut out and cast out whenever they have the chance.

It was not so long ago, Mr. Speaker, that the Prime Minister of the day on wage and income policy said to the Canadian public: "You cannot go for the Tories because 'zap' your wages are frozen, there is a hole in your pocketbook and you are going to be out on the street". Well, Mr. Speaker, Bill C-24, together with the sad record of this Government and its Crown corporations, be it de Havilland, Canadair or Air Canada, with some of its problems of political appointees in top posts, is where the taxpayers are really getting zapped. There has been $1.4 billion spent by Canadair alone without any accountability to this Parliament. It has the largest single business defalcation and deficit spending in the history of Canada.

When we in this Party talk about Bill C-24-and quite frankly, the Government thinks we have talked a little too long on the implications of this Bill-in effect, Mr. Speaker, we are talking about a parallel government. That is what Bill C-24 is; it is a government of Crown corporations. In 1962 there were 28 Crown corporations responsible for approximately $8.4 billion. In 1984 the number had grown to over 300 Crown corporations of different types of class and category. I appreciate they are not directly owned; there are joint ventures. However, there are over 315 Crown corporations now responsible for $67 billion. Just in terms of the size of the employees involved, Mr. Speaker, when I say it is a "parallel government", they now total over 260,000 as compared to the Public Service in federal Government departments which has a total of 239,000 employees, separate and apart from the Armed Services where there are another 84,000.

Bill C-24, the Crown corporations Bill, is supposed to do so much in bringing Crown corporations within the realm of Parliament. My colleague, the Hon. Member for Wellington-Dufferin-Simcoe (Mr. Beatty), addressed this subject in his speech. As well, my colleague, the Hon. Member for Calgary South (Mr. Thomson), in his penetrating address made to this House, admittedly a few "moons" ago-but there has, Mr. Speaker, been other business which has engaged Parliament- analyzed the principles of this Bill. Any Hon. Member, be it on the Government side or the Opposition side, who read the speech made by the Hon. Member for Calgary South would not be in favour of having this Bill go forward without serious substantive amendments, and we have not had any indication from the Government that there are going to be any serious

substantive amendments when we get into committee. That is why Hon. Members of Her Majesty's Loyal Opposition, aided and abetted from time to time by Hon. Members to the left, are speaking out on this Bill, because it is like speaking on the whole government process.

I am not going to get into the details of the lack of accountability and the fact that the Government has not learned anything from the Lambert report or the reports of the Auditor General which say, among other things, that Crown corporations must be accountable. There is a cogent paragraph in the Auditor General's report of 1982 which I quote:

It may be helpful in visualizing the scale of the problem to think of the whole group as an enormous iceberg floating lazily in the foggy Atlantic; silent, majestic, awesome. The public tends to see only the upper portions ... the giants like CNR, Petro-Can, CBC .. . The great bulk of the iceberg below the surface is less spectacular, less likely to attract public interest, less likely to receive the attention of Parliament, yet costly to taxpayers.

As has been said here earlier this morning, Mr. Speaker, I defy almost any Hon. Member of Parliament to name 50 of the Crown corporations, let alone attempt to name the 315; and I will not even mention the Crown corporations which were created just this year, all by Cabinet fiat. Bill C-24, Mr. Speaker, which was supposed to introduce accountability to this parallel government, which spends more money and employs more people than the regular departments of government, does not introduce that accountability. It is a charade, a mockery of the word.

I am not going to go into all the arguments which have been made earlier. I just want to review one very specific matter in the limited time allotted to me because we are under closure and we know the guillotine will fall later this afternoon. If there was any reason why Members should participate vigorously in this debate, it is the perennial one, the one which applied under the old legislation and which is continued under Bill C-24. We as Members of Parliament do not know what the top executives of Crown corporations are paid as the supposed representatives of the people. We all know what a Member of Parliament gets paid. Goodness gracious, the third item on the CBC News the other day was that some Members of Parliament did not pay their bills in the parliamentary restaurant. You can go to a first, second, third or fourth class restaurant and use some type of credit card. They were blowing up tankers in the Strait of Hormuz, there were massacres somewhere else, and the third item of business on the CBC was that credit privileges were curtailed for Members of Parliament because they were too chintzy to pay or the Sergeant-at-Arms or the Speaker had lost control. I am not going to dignify that matter by debating it here and, in effect, insulting Members of Parliament, but I can tell you that while driving through my beautiful riding there were other items more important.

At least the public know that we get paid a certain amount and we get a certain allowance, but do I know what Michael Warren gets as President of Canada Post? Do I know what my illustrious friend, the chameleon of the political walk, the Hon.

May 22, 1984

Jack Horner as he was then called, retiree Chairman of the CN, do I know what he got? Do I know what Joel Bell gets as President of CDIC?

In conclusion, Mr. Speaker, since you have given me the finger salute made famous by the Prime Minister (Mr. Trudeau) in Salmon Arm, although you did it just to give me a warning, I would like to read into the record a report from the Ottawa Citizen dated November 21, 1983, referring to about 40 senior executives of Crown corporations and other cabinet appointees who can be paid a maximum of $227,900 a year. That is almost as much as the Prime Minister receives, almost four times as much as an MP. It says:

The figure, released publicly for what appears to be the first time, is much higher than previously thought and surprised the chairman of the Commons public accounts committee, charged with monitoring government spending-

This was a 264-page report dated June 30 and tabled quietly in the House of Commons. It refers to "non-classified positions". I have named some of them, such as Joel Bell, President of CDIC, Claude Taylor, President of Air Canada, Bill Hopper, Chairman of Petro-Canada, Pierre Juneau, President of the CBC, and Michael Warren, President of Canada Post. There are many others. The article goes on:

Others in the special category include CBC executive vice-president W. T. Armstrong, Canadian Egg Marketing Agency chairman Harold Crossman, Canada Museums Construction Corp. chairman Jean Sutherland Boggs and president Hector McIntyre.

All of these people can get between $63,000 and $227,900 a year when we thought they were in the $100,000 to $125,000 range. Yet not one of them has to answer a question when they appear before a Commons committee. Until we start getting into those basics, let alone the fundamentals of the Bill, then I say Members of Parliament should talk for many moons before this Bill passes.

Topic:   GOVERNMENT ORDERS
Subtopic:   FINANCIAL ADMINISTRATION ACT
Sub-subtopic:   MEASURE TO AMEND
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LIB

Harold Thomas Herbert (Deputy Chair of Committees of the Whole)

Liberal

The Acting Speaker (Mr. Herbert):

Order, please. I think it will be just as well if I put on the record, in view of the remark of the last speaker, that the Chair is trying to be helpful to Members in indicating how much time remains in their speeches.

Topic:   GOVERNMENT ORDERS
Subtopic:   FINANCIAL ADMINISTRATION ACT
Sub-subtopic:   MEASURE TO AMEND
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PC

Thomas Edward Siddon

Progressive Conservative

Mr. Thomas Siddon (Richmond-South Delta):

Mr. Speaker, it is indeed unfortunate that we have to consume the valuable time of this House to debate a motion the Government has introduced to prevent further debate on a much more important item of business. That is, Mr. Speaker, Bill C-24, the Government's half-hearted and dim-witted attempt to deal with the problem which has caused irreparable damage to our country over at least the past decade. That problem arises from this Government's use of Crown corporations as an excuse for its inability to deal with the affairs of the day in an open and straightforward way in the forum of the House of Commons where all the people of Canada can be witness.

Look back to the time when VIA Rail was created, Mr. Speaker. This was done through a $1 vote in this House. It was an estimate provision and therefore we could not debate all of the elements of the proposed new passenger rail service. VIA Rail resulted from an amalgamation of equipment owned by

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CN and CP and other regional railways. It was to create a national passenger rail system and it has lost money every year since. This was not necessarily because VIA Rail was a bad idea, but because there was no opportunity for us to determine the extent to which VIA Rail would be free to raise money in the financial markets or the degree of public subsidy it could expect in the interest of providing services designated as a public convenience and necessity. Instead, the Government arbitrarily decided to create a passenger rail corporation without five minutes' worth of reference to the duly elected representatives of the people in this House of Commons. There was no undertaking to ensure that top level expertise would be placed on the board of that corporation, people with experience which would make them proficient in the management and conduct of this rail system.

When we look at the record of many of our other Crown corporations, Mr. Speaker, we see a similar kind of history. People have been brought in for political and other reasons as chairman of a board of directors. In the private sector a board of directors is a group of people who are accountable to their shareholders. But under the Liberals a board of directors is merely a place to retire worn-out Liberals who in many cases could never get themselves elected to any office, and some who were elected but defeated and had to have a place of rest. They were put in charge of pulling the levers of power of corporations managing millions of taxpayers' dollars without reference to this Parliament.

When do we have an opportunity to debate the necessity of an annual subsidy to the CBC or other major Crown corporations? For example, Canada Post receives a subsidy which may never ever be recovered. When do Members of Parliament have an opportunity to debate the distinction between Crown corporations which serves some national purpose, some political need, as opposed to those which are competing openly with the private sector with the benefit of government financial support and no accountability to Parliament or the laws which govern their private sector counterparts? Why is it that Crown corporations are immune from the obligation to pay property taxes, for example? Why is it that Crown corporations are immune from the requirement to pay income taxes, as do the companies with which they compete?

All of these questions, Mr. Speaker, ought to be thoroughly examined in the House of Commons. I, for one, find it reprehensible, as do my colleagues, that the Government would bring in a motion to suspend debate at the second reading stage with the expectation that the Government also intends to foreclose the appearance and presentation of different perspectives at the committee stage while limiting the amount of time that the standing committee will be allowed to review this Bill.

I would like to remind Hon. Members of 1980 when the Government introduced and passed the new Canada Post Corporation Act. This was an exceptional case where a new Crown corporation was created with a reasonable amount of

May 22, 1984

Financial Administration Act

debate in Parliament. However, in hindsight it is not even clear that the recommendations which came from the Opposition side, the amendments which were proposed and largely ignored by the Government, would have made any difference. The Government was eliminating the title of Postmaster General to avoid the need for a responsible Minister to stand in the House and take it on the nose for all of the problems that the Canadian people were and still are experiencing with the Canadian postal service. I know that the appointed President of the Canada Post Corporation has been doing his best to sort out the mess at Canada Post. I do not believe that he has been using Parliament, the members of a standing committee or the House of Commons to assist in rectifying this difficulty.

The seriousness of the problem is outlined in a recent newspaper article which compares the Canada Post Corporation with the United States postal service which operates as a branch of the Internal Revenue Service in the U.S. In order to get the Post Office out of the hair of the politicians, the Government created a Crown corporation. These are the consequences. The deficit for the 1983 fiscal year was still $440 million. Productivity was up somewhat, but the cost of mailing a letter was to remain at 32 cents at least for the coming year. That sounds reassuring until we compare that with the situation in the United States, where, with no public funding and a 20-cent postage stamp, the American post office recorded its second consecutive year in the black with a surplus of $616 million and a productivity level 44 per cent higher than its Canadian counterpart. The U.S. postal service pays wages which, when adjusted for the differential values of the Canadian and U.S. dollars, are still 10 per cent higher than wages paid to postal staff in Canada.

Our colleagues on the Government benches tend to believe that they and their political appointees can run business better than the private sector. Why is it, then, that in the U.S. the citizen pays 20 cents to mail a letter and in Canada we pay 32 cents and absorb a deficit of close to $.5 billion annually?

The reason really has to do with the fundamental questions which are before the House at this time. They ought to be debated at much greater length than we are presently being given the opportunity to do. It really has to do with the illusion of change which the Government is trying to create by bringing a number of Bills through Parliament in a hurry before it goes out with a final gasp to meet the Canadian people and argue that it deserves another chance. It is a ruse to put this Bill before the House at the present time and then to limit debate when the Government has had 10 years to deal with this question. It is merely trying to create an illusion in the eyes of the Canadian people. As the Government has done in every previous election it has won, through sleight-of-hand and some misrepresentation it has suggested to the Canadian people that everything will be better in the future if it is re-elected.

I think the Canadian people are much brighter this time as they contemplate the position in which they will place their x on the ballot in the next election. They are going to realize that it is the same tired old Government playing the same old

tricks on the Canadian people as an excuse for its inability to bring expertise and proficiency into the management of our national affairs, to deal with the tremendous wastage and incompetence of the management structures of many of our Crown corporations, and to face the question of sunset comprehensive auditing and other matters in a more serious and responsible way. I trust the Government will hear these words and allow this debate to continue, rather than putting the garrotte on us once again as it has done so often in this present session of Parliament.

Topic:   GOVERNMENT ORDERS
Subtopic:   FINANCIAL ADMINISTRATION ACT
Sub-subtopic:   MEASURE TO AMEND
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PC

Ronald Alexander Stewart

Progressive Conservative

Mr. Ron Stewart (Simcoe South):

Mr. Speaker, I welcome this opportunity to participate again in the debate on Bill C-24, an Act which allegedly would make Crown corporations accountable to Parliament. However, in the true Liberal tradition, there are escape clauses which take the teeth out of the Bill. The Government would not even accede to a six-month hoist for a meaningful discussion period to enable meaningful amendments to be brought forward.

I admit that Parliament will get a say in the creation of new parent Crown corporations, but of course the Cabinet will regulate the proliferation of Crown subsidiaries. Rather, the Cabinet will be empowered to do so. However, past experience has shown that we can expect little in the way of restraint when it comes to new opportunities to intervene in the free marketplace with yet another arm of the octopus which has become known as the Trudeau Government. The result is bankrupt Crown corporations. That is really what they are; they are propped up by government financing. In reality they are Crown corpses. The Canada Development Investment Corporation is proof enough of that.

The Auditor General calls them sub-governments. In reality they are sub-governments, sub-human Crown corpses. With a federal election looming, we can expect many more subsidiaries to be created in order to provide refuge for Liberals who are running scared and looking for that refuge. In fact, the process is already under way.

The number of Crown corporations has increased from 307 in 1981 to 336 at the present time. While the number of parent corporations has decreased from 76 to 67, the number of subsidiaries has gone up from 110 to 128. Where is the accountability? Other corporate investments have also increased, from 94 in 1981 to 112 today. The CDIC now has 88,000 employees and has a finger in everything from aircraft production to farm machinery to office technology to energy. And most of these Crown corporations are not working properly. This Bill will do absolutely nothing to control the proliferation of the kind demonstrated by the CDIC.

Of course, this is consistent with the Liberal approach to governing. Where a problem exists, they throw taxpayers' money at it. Where a problem does not exist, they create one by setting up a Crown corporation and funnelling our money into it. We end up with the same negative results and some more Crown corpses. These government creations are not accountable to Parliament now, and they will not be if this Bill ever becomes law. We intend to see that it does not, at least not in its present form. Now we have closure looming over us

May 22, 1984

which limits debate to seven hours. That is some accountability! Where is the accountability of Canadair, de Havilland and Canada Post? Again, Mr. Speaker, these are Crown corpses.

The need for true accountability to this institution, which is not provided by this Bill, has been mentioned repeatedly by my colleagues throughout this debate and it cannot be stressed enough. Nowhere is the need more evident than in another Bill which is currently before the House. Bill C-32, to establish a peace institute, is an attempt to create a further Crown corporation which will be under the control of Cabinet. Cabinet will have the power to appoint directors and members, to set their fees, to decide where the institute will be located and to dictate what kind of research shall be carried out. Parliament will not have a say in these decisions. Of course, this is all in the spirit of the true Liberal tradition.

Bill C-32 is not off to a good start. Clause 4(c) states that the institute's purpose is to "encourage public discussion of international peace and security issues". The most important debate should take place right here, yet the Government is anxious to push the Bill through. Why the rush? Let me pledge here and now my personal and my Party's total support to peace. Who in their right mind would oppose peace? However, what we do oppose is an attempt to increase Cabinet control over yet another Crown corporation. Both Bill C-24 and C-32 do exactly that.

How can we trust a Cabinet that includes the likes of the Minister of Agriculture (Mr. Whelan)? In a recent interview with the "Trudeau Star" he said that "I am probably responsible for more free trade than anybody". This is the same Minister that brought us Canagrex, a Crown corporation that was set up to bring about state control of the agricultural industry and to buy and sell on the open market. It can be the owner of property, a right that is denied us in the Constitution. He added that he would like to see all the big Crown corporations run in the same way as Canagrex. Heaven help the farmers! Heaven help the rest of the economy, and with the latest Crown corporation, heaven help peace.

Let me illustrate for a moment the Liberal Government's commitment to accountability in Parliament. If ever a Member could rise in his place in righteous indignation, this is the time. Again the Government has stifled debate by the use of closure on something as important as Crown corporations. Billions of taxpayers' money has gone down the drain as a result of that lack of accountability.

From 1980 to the middle of last year, the Government has used or threatened closure and time allocation 22 times. This is totally in keeping with a government that rules by Order in Council, and as mentioned by one of my colleagues, rules by fiat. Between 1969 and 1982, the Prime Minister's Government passed 39,048 Orders in Council, an average of 3,245 a year. Some accountability! In the years 1977, 1978, 1980 and 1981, there were 15,002 Orders in Council passed, an average of 3,750 a year. The Bill before us today will uphold that tradition, the corroding of free speech.

Financial Administration Act

With increased accountability to Parliament, we would perhaps see less of the types of activities pointed out last week by my colleague, the Hon. Member for Pembina (Mr. Elzinga). According to documents in his possession, Mr. Hopper of Petro-Canada and James Scurr, a senior vice-president, purchased used furniture and appliances from the Crown corporation at bargain basement prices. With increased accountability we would not see executives who mismanage ailing aircraft companies receiving substantial bonuses while two million Canadians are looking for work. Do we even know how much they are paid? As pointed out by my colleague, the Hon. Member for Annapolis Valley-Hants (Mr. Nowlan), we have no idea how much they make, except too much. Nor would we have an individual who has never been able to get elected placed in charge of a multi-billion dollar empire of state-owned companies. He is the person whose name is synonymous with a pint-sized automobile.

According to an article in The Citizen on May 18, Elizabeth Charlebois, head of the International Development Research Centre, forged her documents and will not even be fired, just asked to let go. Now they will not divulge her salary, according to Mr. Head, another Trudeau protege. They are concerned about whether she will receive her severance pay, not about what happened to Canada and what is happening to CDIC.

I have many more comments to make about the closure aspect of this Bill and about Crown corporations in general. However, let me say in conclusion that I urge all Members to defeat this closure motion and the Crown corporations Bill. Let us restore accountability to this institution.

Topic:   GOVERNMENT ORDERS
Subtopic:   FINANCIAL ADMINISTRATION ACT
Sub-subtopic:   MEASURE TO AMEND
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PC

Gary Michael Gurbin

Progressive Conservative

Mr. G. M. Gurbin (Bruce-Grey):

Mr. Speaker, I wish to spend a few moments talking about four or five Crown corporations. Historically, Crown corporations have contributed a great deal to Canada and will continue to do so in the future.

Let me deal with Air Canada first. When I was preparing to come to work this morning I was reminded of the seat sale which Air Canada had last fall. Its seat sale provided many low prices which gave some Canadians the opportunity to travel at less cost. However, this year it has a $19 billion deficit which will somehow have to be made up. Inevitably the responsibility for that deficit falls on the taxpayer. As one late Member of Parliament said, Mr. Speaker, there is only one taxpayer, you and I.

The current debt faced by Air Canada as a result of management programs that were made in direct competition with other private enterprise airlines is now the responsibility of the taxpayer. It now appears that those management decisions to provide low-cost air fares is very questionable in terms of the net effect on the numbers travelling on the airline and the effect on other competitors in the air passenger travel service.

The second corporation I would like to mention is Petro-Canada. Petro-Canada has had many significant achievements in the energy sector since it became a Crown corporation. I do not want to talk about the obvious difficulties it has experienced with respect to gas stations or about its acquisi-

May 22, 1984

Financial Administration Act

tion, but about the purchasing power of the federal Government.

It is clear that there is an expansion and almost an explosion of activities in terms of purchasing power at the federal Government level. People on the streets of Canada today want access to the purchases made by the Government. For instance, all federal Government employees have a Petro-Canada credit card. This means that federal Government employees who have that Petro-Canada card do not use other gas stations. The Government is using its economic force to support a Crown corporation to the disadvantage of a whole section of Canadian private enterprise represented by other gas station owners. We are not only talking about oil companies but individual gas station owners. It is another example of how a Crown corporation can have a direct impact on the livelihood and opportunities of other Canadians.

The Farm Credit Corporation involves a unique situation. Obviously, the Farm Credit Corporation, which may provide up to 47 per cent of the long-term lending in agriculture in 1985, is an institution which has served a very important role in the Canadian agricultural economy. Currently, its interest rates are approximately 14.625 per cent to 15 per cent, depending on the length of the mortgage. The point I am making is not that there is a problem with the Farm Credit Corporation in itself or that the institution should not exist, but that there should be some responsibilities on the part of the Minister if the institution is offering to lend money at that rate. That responsibility does not seem to exist now.

The Minister of Agriculture (Mr. Whelan) is saying during the leadership campaign that there should be a cap of 12 per cent on interest rates. I do not disagree with him on that. I think the cap should be a hell of a lot lower than that. The Minister is saying that and he is supposed to be responsible for the Farm Credit Corporation, but he is hiding behind some kind of nebulous legislative difficulty in terms of not taking responsibility for what the agricultural lending rates really are. If you stop to think about it, Mr. Speaker, there is a gap in the accountability, the control, or something. It is either that or someone is not telling the truth.

Fourth is AECL. It has been very clear for a number of years that AECL is a Crown corporation that has had major problems. Initially AECL was asked to do something for which it was never designed: AECL was asked to market the Candu reactor. Apart from the very obvious difficulties we really have no sales right now that are doing us any good. There are two sales in process: one in Rumania and there is one potential sale in Turkey. The bottom line of these sales has yet to be seen. These sales will probably create more problems than they will solve. Quite simply, we do not need Rumanian tractors and shoes nor do we need a lot of the things which the contratrade agreements will give us. On the other hand, if we do end up selling a reactor to Turkey, it means we have lost the control of our technology, and I do not know where that

leaves the future for all of the Candu industries that depend on sales of reactors.

AECL has had a lot of difficulties. It was directed to do something for which it was not necessarily organized or intended. AECL has terrific credibility. It has many good people who can do things technically, who can do and did do the research and development on the Candu system. We have known for several years, if not longer, that the Candu system is not at this stage being developed throughout the world in a way which means giving continued solid employment opportunities for engineers and others who are working at AECL. We have not had or been given any other direction to AECL. There has been no sensitivity to what opportunities might exist for AECL or in some way to divert the excellence in engineering expertise into something that would be productive for Canada.

I see you are indicating that I have perhaps two minutes left, Mr. Speaker.

There were several other examples, Canada Post being one of them, that I would like to have touched upon. Canada Post intends to use its offices for a merchandising option involving another private enterprise which would disadvantage other similar private enterprises throughout Canada.

All of these are examples which show us the impact that Crown corporations are having in business activities throughout Canada and on our lives. It is a growing problem. It is a problem without adequate control. It does not have by anyone's standards adequate accountability. There is not the direct responsibility needed to hold Crown corporations to political accountability when we get into the upcoming election campaign. We want a Bill to accomplish that, but we do not have embodied in this Bill adequate controls to establish that responsibility.

In addition to that we have a time limitation on our debate. At the very least I would ask the Government, as this Bill goes from the Flouse under the limitation of debate motion, to allow an adequate opportunity in committee for interested public parties to participate so as to make sure their views are known, and so that additions and deletions can be made appropriately.

Topic:   GOVERNMENT ORDERS
Subtopic:   FINANCIAL ADMINISTRATION ACT
Sub-subtopic:   MEASURE TO AMEND
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PC

Ramon John Hnatyshyn (Official Opposition House Leader; Progressive Conservative Party House Leader)

Progressive Conservative

Hon. Ray Hnatyshyn (Saskatoon West):

Mr. Speaker, it is just before the luncheon break but I did want to participate because I have such an interested group on the Government side who I am sure will listen with some interest to my speech. I hope Members on the other side will accept the advice that I give them because my remarks and advice are meant in the interests of making this place work.

I know we are not allowed to comment on the absence or presence of Members in the House itself, but I think it is appropriate for us to mention that on this last day of debate on second reading of Bill C-24, an Act which deals with Crown corporations, it is significant that not one Member of the Government has had the courage to stand in his or her place to defend the invocation of closure on a Bill of such importance and significance to the people of Canada. Members of the Government have been timorous. They sit in their seats. They

May 22, 1984

have not participated in this debate at all because there is no answer to the allegation made against the Government. The Government has used ham-handed and unnecessary devices to thwart free and democratic debate on the floor of the House of Commons.

Why is it that the Liberals are not prepared to defend the action taken on this debate, Mr. Speaker? They know there is no answer to the millions of Canadians who wonder how it can happen that two corporations wasted $5 billion of taxpayers' money. Canadair and de Havilland, between the two of them, have caused the taxpayers to lose $5 billion. People want to know why Members of Parliament are not debating the issue of Crown corporation accountability. It is a serious and important current issue which should be debated on the floor of the House of Commons. The Liberals, while they are in the process of a leadership review, do not want the people of Canada reminded that where Crown corporations are concerned the Government has been derelict in its duty. They do not want Canadians to know that the proposals the Government is bringing forward will not solve the underlying problems we have in terms of accountability. That is the reason, Mr. Speaker. It is not a question that somehow the Government wants the business of the House to go on. Liberals are afraid politically to have this matter debated publicly. Liberals do not want us to deal with Crown corporations seriatim, saying: "Here are the problems that have arisen; here is the amount of money that has been lost to the Canadian taxpayer . The Liberals do not want to hear alternatives or suggestions from the Opposition. We have made real and substantive proposals with respect to improvement of the accountability of Crown corporations.

I simply want to tell you what this Bill is all about, Mr. Speaker. One section tells it all. The Liberals say this Bill deals with the whole concept of accountability. Let me tell you how far that accountability goes. In this legislation there is provision to prevent Members of Parliament from investigating and looking at reports on the activities of Crown corporations.

Let us take a look at Clause 2.2(3) of Bill C-24 proposed by this Government. It reads:

If a committee of a House of Parliament-

Whatever that is.

to which an order is referred pursuant to subsection (2) produces a report on the order, no motion for concurrence in the report may be moved in that House.

That is contrary to basic and fundamental principles of democracy. The Liberals are intruding on the procedures of this House of Commons which would allow Members to debate reports coming from committee stage. This is unprecedented. It is unheard of. This has never been proposed in legislation in this country before. We have the Government invoking its own form of gag of Members of the House of Commons by legislation. The Government wants us to pass this Bill on the nod without further discussion.

I will be back after lunch, Mr. Speaker.

Topic:   GOVERNMENT ORDERS
Subtopic:   FINANCIAL ADMINISTRATION ACT
Sub-subtopic:   MEASURE TO AMEND
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LIB

Harold Thomas Herbert (Deputy Chair of Committees of the Whole)

Liberal

The Acting Speaker (Mr. Herbert):

Order. It being one o'clock, I do now leave the chair until two o'clock this afternoon.

At 1 p.m. the House took recess.

Topic:   GOVERNMENT ORDERS
Subtopic:   FINANCIAL ADMINISTRATION ACT
Sub-subtopic:   MEASURE TO AMEND
Permalink

AFTER RECESS The House resumed at 2 p.m.


May 22, 1984