Mr. Derek Lee (Scarborough-Rouge River):

Madam Speaker, as I commence my remarks here tonight in what I believe is a truly historical evening, I want to extend to the Speaker of the House and the Clerk of the House my appreciation for their courtesy and efforts to assist in the settlement of new Members of Parliament in what has been a relatively short period of time. As important, I want to thank the constituents of Scarborough-Rouge River for their electoral support that permits me to speak to the House tonight.

The riding of Scarborough-Rouge River is a constituency of urban Canadian multiculturalism. It is a riding where, thanks to the laws and institutions created by our people in this Parliament, the mix and interplay of culture are laying the groundwork of cultural understanding and tolerance which we hope will serve our nation in the decades to come.

My riding is one part of the country where we see at work the great Liberal principles of opportunity, tolerance, and reform. These principles are minimum government contributions to our society under what I could call the social contract that we have entered into in the Canadian parliamentary democracy. Opportunity is what trade agreements are all about. Liberals in the western world are no strangers to the concept of free trade. Liberals have been free traders for 200 years. North America was built on the principles of classic Liberalism.

In speaking of the subjects of opportunity and trade, I want to note sadly the death this week of Mr. Arthur G. Simpson, a man who manifested in my riding the opportunities present in our country with or without trade agreements. Through his company, A.G. Simpson

Canada-U.S. Free Trade Agreement

Ltd., Mr. Simpson operated five automobile parts manufacturing plants in Scarborough, Oshawa, Cambridge, Oakville, and Windsor. He employed more than 1,700 people. His success and that of his workers is testament to the opportunities present in our country. Mr. Simpson was an industrial builder who needed no lessons in how to think smart, manufacture, and export. He will be missed.

Economists generally accept the theory that if barriers to trade are lowered trade will increase. If trade increases then enhanced economic activity and related economic growth will occur. These principles are contained in every basic economics text.

Let us look at exactly how much trade liberalization is contained in the Canada-U.S. Free Trade Agreement for Canadian exports. First, there are the two general types of barriers to trade. There are tariff barriers and non-tariff barriers. The principal non-tariff barriers are anti-dumping duties, "buy American" legislation, countervail duties, and regulatory barriers.

These types of tariff barriers were initially described as the chief motivating reason for entering into negotiations for a trade agreement with the United States in the first place. Exporting to the United States was beginning to become a minefield of non-tariff trade barriers. Under the proposed trade agreement they still are.

Our softwood lumber export position is deteriorating because of non-tariff barriers. Even though the Hon. Minister for International Trade (Mr. Crosbie) vaunts in glowing terms the prospects that this trade agreement will bring about, it does precious little to remove nontariff trade barriers. Not the countervail, not the antidumping, not the regulatory framework; only U.S. federal purchasing regulations will be changed but not the state or municipal.

The Government's negotiating team brought back the equivalent of a consolation prize. The Government claims it has created a non-binding dispute settlement mechanism. I submit that this consolation prize is a lifeless, toothless dead fish. The Hon. Minister for International Trade will know what that is all about.

With respect to actual trade barriers, how much trade liberalization did we achieve in this area? Only one-fifth of our current U.S. trade is now subject to tariffs. While I would not underestimate the significance of this portion of our trade, the actual measure of tariff relief was small. The actual bottom line total of trade liberalization was as follows: tariff reductions to zero for only one-fifth of our U.S. exports, no relief from anti-

December 23, 1988

Canada-U.S. Free Trade Agreement

dumping or countervail or the regulatory NTBs, and only a partial rollback of pervasive U.S. buy America legislation.

The Government has presented this to the country, saying that these benefits constitute opportunity; and more than that, an economic blueprint for the future.

The Government states that out of these marginal trade gains will come the so-called winners and the prosperity promised by it. We shall see.

Let's look at the price we had to pay to get these so-called winners. We have given up all our tariffs, tariffs which have protected Canadian industry for decades. This is the so-called "cold shower" of competition envisaged by the pundits.

Out of this cold shower will appear our losers- industries and firms which are important, and even fundamental, to Canadian communities but which will fail to survive and, by their failure, throw thousands of Canadians out of work. We have given up our right to control for Canadians our energy sector. In this vital area of our economy, an area where already we are dominated by and subjected to a high degree of nonCanadian control, decisions on who, where, and when we develop our resources will, without question, and in total deference to corporate America, be made in the boardrooms of Dallas, New York, Chicago, and Los Angeles.

However, the boardroom table in Calgary, in Montreal, in Toronto will sit empty, with only a vase of wilted flowers, a two-week old copy of the Wall Street Journal, and perhaps a fax machine for communicating with head office.

Shame on the Parliament or the legislature that abandons the worker, his spouse, and his children in Lloydminster or in Campbellton to the unrestrained business decision of a person or group outside Canada, someone who knows nothing about that man, his family, his city, his pride, or his dreams, and who has absolutely no interest in the regional and national goals of this country.

That is abdication of our responsibility as legislators, and that is what this Government is doing under the guise of the Free Trade Agreement. Not only do we give up control of the boardroom, we have agreed to pool our energy with that of the U.S.A. We have had to give up our right to decide for Canadians how and when energy resources are exploited and marketed. Washington will

now help us decide, and Washington has a guaranteed share.

We have given up our right to control our capital markets for Canadians. Now decisions on credit worthiness, commercial viability and discount rates will be taken in New York and handed down to the suitcase banker. Decisions on how and when capital is invested, and even how the non-bank savings of Canadians are reinvested, have now, by this agreement, been effectively exported to wherever the Lear jet has been parked. Canadians resent this Government permitting this fundamental tool of nation-building to be tossed into the tool box of corporate America.

In one of the more cruel ironies of this agreement our negotiators set out to claim some form of exemption for our cultural industries. Well, they got an exemption in Article 2005, but there was a price tag, a price tag defined as "measures of equivalent commercial effect".

This means that if an American enterprise is prejudiced or harmed by cultural initiatives or our Government, that enterprise will have to be compensated.

The net result is that, where our cultural initiatives stray from the American commercial norm and it costs an American money, we must compensate that American; in effect, pay a royalty.

The Canadian people, Mr. Speaker, will never pay a royalty to Americans to enable us to foster our cultural initiatives. I call this price tag the Jack Valenti royalty.

As one example of the many giveaways in this trade agreement we have agreed, in a related cultural industry provision, to remove from our Income Tax Act the provision which has influenced Canadian advertisers to place their buys with Canadian magazines and publications printed in Canada.

This provision has sustained and given new life to the Canadian periodical publishing industry, and this new life is now to be placed in jeopardy.

And what about the losers, Mr. Speaker? They are there, too. All sides of this House recognize that there will be losers under this deal. Entrepreneurs will lose their businesses; workers will lose their jobs in bankruptcies; workers will lose their jobs in branch plants when those plants close following head office decisions south of the border, decisions made because the protective tariff is gone and the fact that just one extended production run in Cairo, Illinois, or Columbia, South Carolina will produce all that is required to serve the whole of the North American market.

December 23, 1988

The one thing that the working men and women in Canada will agree on is this: if this Government is going to commit this country to an economic course paid for with the jobs of our workers, then this Government had better have the programs to assist in the adaptation and retraining of those workers, or it won't be the Government for long.

One very interesting element of this trade negotiation with the United States has been the need to look closely again at the unique relationship between our two countries, a relationship that has preoccupied Canadians for two centuries, primarily because of our relative closeness geographically and culturally.

It is, I think, because we are so close to the United States of America, because we cast a shadow on each other along the border, that we have difficulty measuring our relationship objectively. It is that confusion over our relationship which hinders our ability to address this trade agreement objectively.

It is precisely because we are so close to each other that we resist being drawn closer together under this trade agreement. This is not anti-American. This is healthy Canadian self-interest. The closer our two countries get, the more we sweat. Under this agreement we will pull our country closer to the precipice, and all on the promise of a few dollars more, a few jobs more.

I am saddened to hear some Hon. Members on the other side of this place describe this agreement as the key to prosperity or the ticket to the future, without realizing how close we are to abandoning our tools of nation-building.

If we are to maintain and improve our society and increase our prosperity, it will occur because Canadians work hard for it and not because we deal or barter for it.

My conclusion, Mr. Speaker, is in reaching this agreement we have given up far more in the bargain than we have obtained. If this trade agreement was just the mutual elimination of tariffs, which it could have been, we could freely address the future proudly as a nation. But such is not the case. This agreement is much, much more. It is that way because the Americans bargained for those other things, and we gave them away.

If we are to have this agreement, then we will not abandon our workers, we will not pay royalties to exercise our cultural sovereignty, we will not neglect rural and agricultural Canada and native Canadians, we will not permit erosion of needed social programs, and

Canada-U.S. Free Trade Agreement

we will never abandon or sell our independence to continue to build this country and provide its citizens with the opportunities essential for their future.

I know that if this legislation is made law, all Members on both sides of the House will address the 10 years of transition to full implementation with those objectives in mind.

Hear, hear!

Mr. Jean-Pierre Hogue (Outremont):

It is as the first representative of the Progressive Conservative Party ever to sit in the House of Commons as a Member for Outremont in this century that I humbly rise again today. On this occasion, I wish to address my first remarks to those men and women whom I have the honour to represent in the House. I wish to thank the individuals who, through the exercize of their democratic rights, gave me a majority during the recent election campaign.

They represented every walk of life and reflected the exceptional diversity of Canadians and Quebecers which we can find everywhere in our great country. My Outremont constituents have nothing in common with the nincompoops our honourable friends opposite like to describe. On the contrary, they are quite vibrant. They can breath, think, they are intelligent, they can assess, weigh, and they have needs which they try to satisfy either individually or collectively.

As I said, the men and women in my Outremont riding resemble those you can meet in all the other provinces of Canada. They know what is good for them. They can put things into perspective. They are tolerant. That is why when the chips were down, in the evening of November 21, they chose Mr. Mulroney and the Progressive Conservative Party. Like the rest of Canada, they gave the country more representatives from our party than did the other two parties together. People have decided and they gave the Government a clear mandate to govern. They elected a leader they could trust. They rejected all the candidates who did not know where to stand or who, for lack of a definite program, were involved in a witch hunt.

I want to thank them also for electing a majority government, thereby clearly expressing their support for the agreement we are debating today.

December 23, 1988

Canada-U.S. Free Trade Agreement

The election of a Progressive Conservative Member in the Outremont riding was not an accident of history which brought yours truly to the forefront. In fact it reflects a new orientation, a new trust and consensus which have their roots among the very diverse groups which live in that riding.

I have been able to witness that beyond the deep-rooted prejudices fed by many generations of a so-called elite, my Outremont riding is undoubtedly the most representative of our Canadian mosaic.

The Quebec men and women who live there represent the two founding nations of our country, together with representatives of about twenty ethnic groups who speak some forty languages and dialects, in addition to one or the other of our official languages. These cultural communities were particularly sensitive to what was at stake during the election campaign and they listened with their ears and hearts to the debate during these seven dramatic weeks.

My Outremont constituents expressed what a majority of Canadians from every corner of our great country wanted. These Quebec men and women expressed their confidence in the future of our country and favoured a still greater opening to the rest of the world. I should like to repeat part of what I said the first time in the House, and I quote: "My colleague from Vancouver Centre (Ms. Campbell) quoted our Prime Minister (Mr. Mulroney) who said on a number of occasions that wealth is created by the citizens rather than by the Government". It could reasonably be said also that it is not the economy which governs the men and women of a country, but that it is they who govern the economy.

Our colleague the Hon. Member for Langelier (Mr. Loiselle) spoke in a manner which is to the credit of the Progressive Conservative Party, its leader and members. We can bear witness, through the manner in which all Quebeckers participated in the national debate on the most significant issue of the recent election campaign, that Quebec fully shares this confidence in our capacity to meet head on the new challenges brought about by the globalisation of trade.

Quebeckers in large numbers joined their voices with those of millions of Canadians who feel that free trade is an expression of national affirmation based on openness as opposed to withdrawal, on self-confidence as opposed to cold panic in the face of new horizons.

Unlike the people in other parts of Canada, they were not afraid of jeopardizing their national identity. They had the opportunity earlier in this decade to reassert

their identity. To Quebecers, the enhancement of our trade relations with our southern neighbours in no way means a harmful loss of national identity.

The debate in Quebec did not amount to an identity crisis as it did in the rest of the country. I have said it before, the people of Quebec went through that earlier, during the independence debate. Nowadays, they do not fear an American invasion. Their identity is not centered on the risk of losing their language or their political status within Confederation. The issues about the French language, Meech Lake, Bill 101, or the sign language are not based on hostility, fear, withdrawal or weakness ... as some people would like to think.

Nor are they based on a bellicose attitude, or a superiority complex, or aggressiveness against the other founding nation.

I think, Mr. Speaker, that the battle of the Plains of Abraham is over, and has been over for some time. Some people may still be a little sensitive. Some people may still feel a little frustrated, but, on November 21, the people in Quebec wholeheartedly approved free trade and its impact. That was not the action of an impulsive and nevrotic people.

On November 21, Quebec was not boasting. Quebec does not go around bragging and boasting. What is happening today in Quebec cannot be qualified as unrestrained emotivity or bragging. Quebec has not responded to meaningless slogans, such as the "c'est clair et net" message of the Liberal Party. Quebec has not responded to the theoretical and harmful social democracy of the NDP. Quebec responded to the Right Honorable Prime Minister (Mr. Mulroney), who urges us to work hard, harder and hardest.

Allow me to digress a bit, Mr. Speaker, by saying that this same Quebec is defining itself with respect to signage. It still thinks Quebec. It still thinks Canada. It is not hostile, aggressive, ungrateful or hateful. It does not want to be insolent. It is what it is, not more, but not less. It is different. It is more and more conscious and more and more certain of its individual and collective future.

In 1984, it voted for Mr. Mulroney and it wasn't a fad. It was a clear choice. Quebec had had enough of the Liberal government's haughtiness, intolerance, pedantry, theatrics and arrogance. It had attained a maturity which gave it enough self-confidence, autonomy and flexibility to be able to say no to separation, no to this mockery of a constitution, no to schizophrenic dreams. It said yes to Mr. Mulroney just as it said yes to Mr. December 23, 1988

Bourassa, who was once contemptuously called a "hot-dog eater".

In 1988, once again and this time more loudly, Quebec said yes to the Progressive Conservative Party and to Mr. Mulroney because Quebec is not arrogant and because it recognized our party's sincerity, simplicity and sense of values.

Today the people of Quebec have confidence in their ability to compete culturally and economically with the best in the world.

The wrenching doubts of our anglophone compatriots are due to the fact that they have steadfastly rejected all liberalization of the ties which link us to our mighty neighbour to the south. On three occasions in the past 100 years, Canadians were consulted on the possibility of free trade with the United States of America. And twice, in 1891 and in 1911, they rejected such a proposal. No truck or trade with the Yankees, as they used to say!

On those occasions, Quebec expressed its agreement with the rest of the country and defeated one of its greatest Prime Ministers, Sir Wilfrid Laurier. Note that since 1911, no federal political party or leader has had the courage or ambition to return to the question of free trade between the two countries. And for a good reason. However, Mr. Speaker, on September 26, 1985, the Prime Minister, the Right Hon. Brian Mulroney, rose in this House to make the following announcement: Mr. Speaker, I rise to inform the House (and the country) that I have today spoken to the President of the United States to express Canada's interests in pursuing a new trade agreement between our two countries. We seek to negotiate the broadest possible package of mutually beneficial reductions in tariff and non-tariff barriers between our two countries.

Two years later, after difficult negotiations between the representatives of our two countries, a free trade agreement liberalizing the sectors that were not yet subject to a treaty was presented in this House. All of Canada then had a trade treaty that sheltered our leading industrial sectors from American protectionism and gave us wider access to the market considered to be the world's most important. With such an accord, it became possible to steer and guide discussions between the two countries and to limit unilateral actions that are harmful to our industries.

Canada-U.S. Free Trade Agreement

What the people on this side of the House spelled for Canada was a map of our future commercial relations with our neighbours to the south. In terms of Canadian nationalism, this treaty has been arrived at because of the political will of our Prime Minister (Mr. Mulroney) to forge ahead and build an even stronger nation.

The response of Canadians has been termed an act of faith. It is more than that. I see the results of the November 21 election as a reaction to common sense and of common sense. As a nation we cannot withdraw from international trade. We depend on it in a large measure and continue to do so in an increasingly competitive world.

Those who work against the Free Trade Agreement seem to have failed to read the consensus among Canadians. Their fears were immediately related to their own sectoral or personal concerns.

Mr. Speaker, the opponents of free trade as it is expressed in this historic agreement have tried everything to spread fear and to trouble our fellow citizens. We witnessed what was really like a hostage-taking when we heard that the most vulnerable citizens were threatened with losing their pensions, their unemployment insurance or their medicare.

What low-mindedness, what panic they showed by such actions, Mr. Speaker. It does not take much to see in such speeches repeated ad nauseam during the election campaign contempt for the voters' intelligence. We saw a determined, often dishonest attempt to shake the nation's self-confidence.

In this House are many Opposition Members who even today raise the spectre of our country being absorbed politically, of the progressive dismantling of our social programs, and what else besides! If they have not yet understood or accepted the Canadian people's verdict, let them at least, Mr. Speaker, refrain from subjecting us to their senseless idle talk and nonsense! They tried to make the Government take the blame for their lack of programs and alternatives. It did not work.

Their hysterical scare tactics have not passed the test of reality and they are now starting all over again as if Canadians, who have the last word, had not realized what they were up to. I have no intention, Mr. Speaker, to deprive the Hon. Members of the right to express their opinion. However, I wish they would stick to

December 23, 1988

Canada-U.S. Free Trade Agreement

constructive criticism of the Bill under consideration. Otherwise, they would have to bear the weight of a totally unacceptable rejection of Canadian public opinion.

To the new generations of Canadians, the rearguard fight led by the Hon. Members opposite will make them look like people from another century. We specifically want to give our future leaders a legacy of confidence in the future and openness to the world.

Those who don't think our culture can resist the American giant simply don't recognize the cultural vitality of this country with two flourishing languages and cultures that extend well beyond our borders.

It is easy to attack the winner and talk of arrogance, but by making such a judgement, we say that the people have elected candidates who are not up to the task. It is insulting to all voters.

At the economic level, we find the same vitality and influence beyond our borders. Isolation, introspection and an underdog mentality have long been the norm in this country. Either after Quebec went through that stage of its cultural and social development despite the demographic reality or, more recently, through the national position taken on the Free Trade Agreement, Canada has changed.

The change was for the better. Canadians are preoccupied with real issues: quality of life, conservation, environmental upgrading, preventive health care for our elderly, technological change for our industries. Canadians of all origins want to move forward, to grow as individuals. They want closer ties with each other. They demand a healthier financial situation and a stronger economy for the benefit of all those who are a part of it.

Whatever preoccupations associated with the introduction of any treaty of this nature can be overcome. There is an implementation period for the agreement, there is a tribunal to ensure continuity in the exchange of views and to provide a forum for dispute arbitration. These features ensure that the gradual implementation of this treaty will have no dramatic or unilateral impact on the Canadian economy or one sector in particular.

Those who voted for us showed their support for the new economic opportunities which are now within our reach. And they did not do so with their eyes closed. Canadians realize in fact that adjustments will be required and that interim measures will change present habits and certainties. Change means adaptation. It will be the role of Government to manage this process of

change and the task force headed by Jean de Grandpre has the mandate to outline appropriate measures and to identify priority sectors needing assistance in the months and years to come.

Mr. Speaker, I would like to stress that in polarizing Canadians on this issue, the debate has provided an opportunity for Canada to cross a hurdle and take a great step forward as a nation. The notion of belonging to a vigourous and sovereign nation, one open to its own people and to the world, is one that can and must be nurtured.

And finally, I would remind those who see this period of history as critical that the Chinese symbol for crisis is made up of two characters, one of which stands for "danger", the other for "opportunity". We are free to believe that the present debate endangers our country, or that it offers the best opportunity to make another step forward in our natioin-building process.

The people from Outremont who elected me to this Chamber realized they were offered an opportunity to go ahead and find a new prosperity. The act of faith the people from Outremont made was an act of faith in themselves, in their capacities and their desire to move forward. In that, Mr. Speaker, they resemble the rest of the Canadians composing our national mosaic. In that, Mr. Speaker, they expect from their elected Members that we quickly bring into effect the wishes they have expressed.

What is at stake in this debate goes beyond the jobs to be created, maintained or replaced, the new markets that will open up for us to take advantage of, and even the positive trade balance that will follow.

For the third time in this century, Canadians were invited to express their views on their trade relationship with the United States and, for the first time, they chose to embrace the future without loosing sight of the reality. They thus indicated which road to follow, an historical road that we now have to explore, lay out and open up. In the same way that the transcontinental railroad was, section by section, conceived as a unification symbol of our Canadian nation, this agreement can be used to help Canadians reach together new feats.

In conclusion, Mr. Speaker, I wish to remind Hon. Members the well known words written by Calixa Lavallee:

Car ton bras sait porter I'epee, II sait porter la foi, Ton histoire est une epopee, Des plus brillants exploits ...

December 23, 1988

1 am convinced that with the Free Trade Agreement, our epic is unfolding and the most brilliant feats are still to come for of all Canadians to see.

Mr. Reginald Belair (Cochrane-Superior):

Mr. Speaker, thank you for giving me the opportunity to speak on this historic Bill C-2 on behalf of my constituents in Cochrane-Superior, whom I thank for giving me their confidence on November 21.

Need I point out that this northern land is very welcoming; it is an ideal place to relax, to fish, to hunt, to go cross-country skiing or ice-fishing, etc. It has wide open spaces that ease the mind and challenge us to get to know nature better.

This great huge riding stretches from Hudson's Bay to the north shore of Lake Superior. Combined with the Kenora-Rainy River riding, they are more than half of Ontario. Indeed, we are on the map.

Before getting into the subject, let me just say that I would have preferred the witnessing of an agreement on the curbing of acid rain with its devastating effects on our forests and lakes. Some 14,000 lakes are already polluted in Canada.

There was some hope that the Prime Minister (Mr. Mulroney) and President Reagan would have struck a deal at the Shamrock Summit in Quebec. It flickered out when Reagan flashed the Free Trade Agreement in front of the Prime Minister's eyes. We all know that afterwards the environment was no longer a priority.

President-elect George Bush allotted a mere 10-second clip on the environment issue in 15 months of campaigning. There are some reasons to be alarmed because with the implementation of the Free Trade Agreement we stand to lose a lot of ground on this issue. With the Americans having unlimited access to our natural resources, and considering their low standard on the environment, one can seriously doubt the condition in which they would leave our land once they have exploited its richness.

The natives are also seriously concerned about the possible disruption of their hunting, trapping and fishing grounds. Like any other group of Canadians, they should have a say about the economic development of their regions as much as they have a right to control their own destiny.

Canada-U.S. Free Trade Agreement [Translation]

The Mulroney-Reagan agreement, Mr. Speaker, refers many times to harmonizing the two nations. What does this mean? There is a significant imbalance between our two countries today. Canada has a just, humane, compassionate society. American society concentrates on profits, leaving aside the welfare of working men and women when it comes to wages and fringe benefits.

And what about the impact of the agreement on social programs? Let us just say that the Prime Minister told the Financial Times that unemployment insurance and social programs might be renegotiated in the coming years.

Which country do you think will adjust to the other, Mr. Speaker? Because the Americans are extremely rich in capital, since they have ten times the population we do, it is easy to see that we will end up subject to their influence and submitting to their demands. We will suffer this harmful influence because might will make right. It will be the law of the jungle.

Mr. Speaker, rest assured that I and all my colleagues in the Liberal Party will be extremely vigilant; we will speak up vigorously every time our Canadian workers are affected by job losses due to free trade. We will see to it that the benefits they have acquired over the last 40 years will be protected, in order to preserve and maintain family well-being.

It must be borne in mind, Mr. Speaker, that 40 per cent of our workers are unionized and the benefits and protection they have acquired since the 1930s must not be eroded over the coming years. We must keep in mind that nine American states have no minimum wage law and that twelve states have a minimum wage of three dollars an hour or less.

It is also easy to conclude that fringe benefits are not a priority for their political and economic leaders.

Regional development is also a great concern of mine. The DRIE program is now considered by the United States to be a subsidization program and, therefore, existing industries which wish to adjust to increasing competition are not eligible for government help.

In relation to the forestry industry, when one compounds such an action with the 15 per cent export tax on softwood lumber, sawmills across Canada find it extremely hard to remain competitive. Their profits are greatly reduced because of a substantial increase in

December 23, 1988

Canada-US. Free Trade Agreement

stumpage fees and therefore the incentive, the motivation to contribute to Canada's economy is not as ardent. They question their future and, by extension, the workers do as well.

Since the Memorandum of Understanding was signed on December 30, 1986, four sawmills have closed in my riding.

What is the Government prepared to do to compensate for these losses? Is it prepared at least to screen American investment in Canada? Has it set up a mechanism where undue, unwanted and unwarranted competition would be controlled? Has the Government thought of negotiating with the Americans a system whereby the latter would have to re-invest some of their profits in Canada?

To summarize, we should not let the Americans muscle their way into Canada and do as they please. They should respect the fact that Canada is huge geographically, and since jobs are concentrated in the larger urban centres, rural areas do indeed depend on regional development incentives in order to remain competitive, and in the end, to survive. Survival can be achieved in other ways than open frontier economic policies with the United States, therefore limiting our exporting capacity to one country only. One should learn from one's past. The Government should expand its exporting markets to the European Economic Community, to China, to Hong Kong, to the Middle East and to the Soviet Union.

Let us not permit history to repeat itself negatively. Canadians know better. I hope the Minister for International Trade (Mr. Crosbie) will at least consider selling Canadian products elsewhere than the United States.

Hon. Members opposite say that it would be advantageous to limit exports to the American market only. We are already doing 80 per cent of our trade with the United States. Is it worth unleashing American corporations, allowing them to take over our industries, for the remaining 20 per cent?

Out of respect for ourselves, let us keep Canada Canadian. Let us be the masters of our own destiny. Let us diversify our trading partners in order to ensure that American countervailing action not be undertaken. Let us us not give them the opportunity to do so. Let us not adhere so blindly to the North American economic constitution.

I could not conclude my remarks, Mr. Speaker, without referring to the omnibus bill regarding the entry of foreign products in the United States and to the fact that Canada is not exempt from it. How can we consider free trade with the Americans when this protectionist bill aims at controlling foreign competition with American industries and small businesses! The Secretary of State, Mr. Schultz, admitted, during his visit to Canada last spring, that it would be ridiculous to talk about free trade if Canada is not exempt from it. And what are we to think of the record speed with which the American Congress passed its bill on free trade with Canada. We must infer that the Americans firmly believe that the agreement is largely favourable to their interests. Americans never lose out when they do business with a foreign country.

All in all, conscious as I am of the impact this agreement will have on our society and bearing in mind the uncertainties which Canadians will be facing, it is my duty and my moral responsibility to vote against this bill in accordance with the mandate given to me by the people of Cochrane-Superior on November 21 last.

To my constituents, and to the staff and Members of the House of Commons, a Merry Christmas and a Happy New Year.

Mr. Geoff Scott (Hamilton-Wentworth):

Mr. Speaker, the hour is late, the Chamber is understandably sparse, it is nearing Christmas Eve, and Mr. Speaker is beginning his traditional reception de Noel. I am honoured to draw a speaking slot of 9.55 p.m. Eastern Time, 11.25 p.m. in Newfoundland, to address the subject we have been debating for weeks, indeed for many months, the Canada-U.S. Free Trade Agreement.

My position reminds me of a story that the great former Prime Minister John G. Diefenbaker used to tell as only the Chief could tell it. Long ago, there was a similar marathon debate. Practically everybody in the House had spoken on the same subject and it fell to one rookie MP to bring up the rear. Well, this Hon. Member had made the mistake of giving the text of his remarks to the press in advance, so he had to forge ahead.

I will let the former Right Hon. Member for Prince Albert tell about this MP's maiden address. He went into the history of his riding dating back to biblical times. He even referred to the paternity of the dogs of his constituents. By now the sounds of tinkling glasses and the singing of carols were heard coming from the

December 23, 1988

corridor of the Speaker's chair. Hon. Members began leaving the Chamber by twos, and then by fours, and then in droves, until there was one lone MP sitting across the aisle.

The new MP on his feet kept talking, fixing his gaze on the lone MP, and when he finished his speech, he crossed the floor, and with tears in his eyes shook the man's hand and said, "I want to thank you for your presence. It gave me that something, that inspiration to carry on. Your attention made it possible. Thank you from the bottom of my heart". The man said, "Don't thank me, I'm the last speaker!"

Oh, oh!

Mr. Scott (Hamilton-Wentworth):

I dedicate that story to my predecessor and friend, Father Sean O'Sullivan, whom we all wish Godspeed during these difficult days at this time of year.

Hear, hear!

Mr. Scott (Hamilton-Wentworth):

I want to thank the people of Hamilton-Wentworth for electing me for the fifth time. Without their trust and their confidence in me, I would not be here.

I also want to say congratulations to you, Mr. Speaker. You too have the confidence of this whole House of Commons, of Members from all sides of the House, in the position that you occupy, and you are doing a fine job, Sir.

Let me, in the spirit of Christmas and ecumenism, say congratulations to all the new Members on all sides of the House for the excellence of their maiden speeches. At least the parliamentary television groupies across the country can testify that there is a lot of talent in this Thirty-fourth Parliament, and for some of us who have been observing and participating in this place for several years, it is good to hear strongly and freshly held and expressed views in this Chamber.

I am proud of my Leader, the Right Hon. Prime Minister (Mr. Mulroney), for achieving history with this Free Trade Agreement. I am proud of his great salesman for the Free Trade Agreement, the Minister for International Trade (Mr. Crosbie). I am also proud to say a few words during this debate on behalf of the city that I represent and love, Hamilton.

We in Hamilton are especially proud of the fact that we are Canada's fifth largest city and we are famous for the industry that stands to benefit most heartily from

Canada-U.S. Free Trade Agreement

the Free Trade Agreement. We make steel, very good steel.

This Free Trade Agreement that the House of Commons will pass a little more than two hours from now signals the beginning of a shiny new era for Canada's steel industry. Perhaps that is why we have not heard during these long hours of debate a whole lot of mention by the opposition Members of the quality steel and quality people we have in Canada. That is why we never hear about the security of Hamilton's 23,000 jobs which are directly related to the making of steel, or of the tens of thousands more indirect jobs and spinoff products that benefit from the steel industry. I am not surprised. This is one of the innumerable and irrefutable good features of the Free Trade Agreement.

We in Hamilton and in Sault Ste. Marie are producing the world's finest steel. Nowhere will you find a more classic example of an industry where we not only can compete with the best in the world but we already produce the best in the world. Now we will have a market to prove it. Of course, the opponents to the Free Trade Agreement do not like to point this out, but this Free Trade Agreement will be as strong for the Canadian economy as the strength of steel itself.

Let me just turn to an article by Ken Romain of The Globe and Mail. He put it as succinctly as anyone could:

Because of the strength of the Canadian economy and persisting demand, the companies are operating at near capacity. The market is tight and orders from customers are on an allocation basis. The steel makers are squeezing every last pound of steel they can from their plants.

Mr. Romain goes on to quote William Wallace, executive vice-president and chief operating officer of Dofasco:

In our view if you look at our business and that of our customers, it is a really good picture. We have got customers doing a lot of really good and gutsy things.

But we have to develop and maintain the capability that keeps us in business with them and to provide value, quality and price in the product. We see the whole thing as a process of globalization.

We have got to be good enough at what we are doing and our customers have got to be good enough at what they are doing with the product that we sell them to be able to withstand the South Koreans, the Japanese, and the West Germans and the French, who also use excellent products, and are turning it into good automobiles, for example.

Going on in this article we find:

December 23, 1988

Canada-U.S. Free Trade Agreement

Stelco, the country's largest integrated steel producer, has called a halt to its major spending. In the past seven years, it has invested $1 billion in new plant and equipment.

Chairman and chief executive John Allan has said the major portion of the company's program is now completed.

Last year, it began operating two continuous casting units, which cost $350 million, at its Hilton works in Hamilton.

All of this heavy capital spending by the industry was planned well in advance of the negotiations for a Free Trade Agreement between Canada and the United States, and without any reference to what might happen after it is ratified by both countries. Under the Agreement, steel tariffs will be eliminated over the next 10 years.

The industry fully supports the pact. "We see it as part of globalization that is taking place and driving us in the direction that we are going". Bill Wallace said, "We ultimately have to be world competitive and that includes our relationships with the United States".

The Canadian steel industry does not have the capacity to make a major export drive into the United States under free trade because all of its planning in the past has been based on meeting the demands of the Canadian market. Mr. Allan told Stelco's recent annual meeting that the Canada-U.S. Agreement prevents either country from imposing import quotas on the other.

He said that the fortunes of steel companies are directly tied with those of their customers. Many of those stand to gain from the Agreement.

For example, the energy industry which buys steel pipe, gets a secure market in the United States. Steel customers in the manufacturing sector will also gain from the new U.S.-Canada relationship under free trade.

"Steel makers, therefore, stand to benefit not only from their own direct participation in the U.S. market, but also from that of their customers' participation," Mr. Allan said.

You can see, Mr. Speaker, that the steel industry is looking at a glittering market and very much welcomes the opportunity to remove the present barriers to trade. Although Canada is the only country which was exempted from the U.S. voluntary export quotas on steel, we did agree to limit our share to 3.5 per cent of the American market. The American steel industry has continued to complain about Canadian competition, although our actual share of that market has ranged from 3.0 per cent to 3.3 per cent, while the U.S. share of our steel market has risen from 4.5 per cent in 1986 to 7.5 per cent in the last quarter of 1987.

Now American firms have modernized and become more competitive in the export market in the face of stiff competition from the highly efficient and technologically advanced Koreans and Japanese.

The binding dispute settlement mechanism has also been hailed by the industry. It has been the target of a

number of U.S. trade actions. Increased economic activity under the Free Trade Agreement is expected to increase demand for primary iron, steel and aluminum products, for example, steel piping and tubing for the petroleum industry. The Free Trade Agreement will also reduce input equipment costs.

Currently the U.S. Department of Commerce is engaged in an anti-dumping and countervailing investigation against steel rail exports from Algoma and Sydney Steel on behalf of Bethlehem Steel of Pennsylvania. In fact, Algoma and Sysco's rail exports have been declining. Here is what the executive vice president of Stelco, Mr. John Hood, has to say about the Free Trade Agreement and steel.

If we fear our ability to compete against a nation with a broadly comparable cost structure to our own, how in the world do we expect to compete against such low-cost producers such as Brazil, South Korea, Taiwan and Singapore?

I think that goes to prove that when we are talking about the free trade arrangement between Canada and the United States it is that, it is an economic trading arrangement. It cannot just be Canada and the U.S. alone. We do have to live within a market, a world market, and the steel industry is a classic example of how an industry can thrive and survive in a world market.

Here is what Daniel Romanko, managing director, of the Canadian Steel Producers Association, has to say:

Under the Agreement, the steel industry can continue to expand its markets both in Canada and internationally, secure in the knowledge that access to its largest export market, the United States, will be less vulnerable.

Here is what Mr. Milton Harris had to say:

After four intensive years of experience fighting off protectionist forces in the American steel industry, I was appalled to watch a TV replay of John Turner figuratively tearing up the Agreement.

That was Milton Harris, President of Harris Steel and a former Chairman of the Liberal Party National Executive Finance Committee.

Here is a quote that I draw to the attention of my friends to the left:

If there were no deal, 1 believe the U.S. would tighten the screws on us. When there's a glimmer of light, we have to grab on to it. We have a lot at stake.

That was said by Dennis Abernot, President, Local 2251, United Steelworkers of America, Algoma Steel, Sault Ste. Marie.

December 23, 1988

Here is what Mr. Robert Varah of Dofasco had to say. He dismisses the Right Hon. Leader of the Opposition's (Mr. Turner) sectoral approach to the whole free trade proposition:

There aren't enough sectors on which you can have a balance. So you have to go with the broad approach.

Clearly the sectoral approach will not work in this industry.

I have saved one of the best for the last. This comes right from the heart of the Niagara Peninsula, deep in the heart of Welland, Ontario, from Atlas Specialty Steel, Canada's largest manufacturer of stainless steel. The article reads:

Atlas Specialty Steel, Canada's largest manufacturer of stainless steel, believes so strongly in the free trade deal that it has invested $10 million in each of the past two years to make itself more globally competitive.

Incidentally, this is an article from The Toronto Star. The heading is Steelmaker Sees Free Trade Opening Huge Markets. That is The Toronto Star. The article is buried. You would never hear about it from the Hon. Member from Welland (Mr. Parent). I am just quoting for the record.

Bruce Hamilton, general manager of the Niagara Peninsula plant, Atlas Specialty Steel, says:

And that's just the beginning-"I'm talking about that rate every year-

Meaning $10 million in each of the past two years:

I'm talking about that rate every year-

He says removing trade barriers between Canada and the U.S. will open huge new markets for Atlas, a Rio Algom subsidiary with 1,500 employees in Welland.

"Those (investment) rates are here to preserve and maintain this operation as a viable specialty steel mill in North America. We have the capability, certainly, of hiring more people but I think the main thing we're trying to do is maintain the jobs for the people that we've got."

That is a good place to start. The point is that it is happening. Those jobs are locked in, secure, and if anything they will be increased under this agreement. The article further states:

Without trade, the Canadian economy will wither. It's an economic truism perfectly mirrored by Atlas Steel.

"We have to be an internationally competitive mill. If we're not that, we're dead."

That statement was made by Bruce Hamilton.

Canada-U.S. Free Trade Agreement

Canada faces a clear choice in the free trade debate. Either we accept the challenge to compete, or we retreat like a third place athlete to defeat by default. That does not describe the Canadians I know. It does not describe any of the Canadians sitting in this Chamber who were out to win on November 21.

The type of negativism that we have been hearing from our friends in the Liberal and New Democratic Parties is beyond me when they went out and fought like hell to get their seats in the House of Commons. They made it. They were winners. They are Canadians. Canadians are winners. We can compete. That is why we have to pass the free trade Bill into law by tonight and get Royal Assent by January 1, 1989. We have to do that, and we have to win for our children, their children, and the future of this great country.

In closing, let me wish you, Mr. Speaker, a Merry Christmas, Joyeux Noel. I also say that to my parents in Vancouver, and special holiday wishes to all the good people of Hamilton-Wentworth.

Mr. Speaker:

The Hon. Member for Windsor-Lake St. Clair.

Howie, Howie!

Mr. Howard McCurdy (Windsor-Lake St. Clair):

Mr. Speaker, I should tell my colleagues on the government benches that I am seldom called Howie, except by my most intimate friends, and only in the most intimate circumstances.

Oh, oh!

Mr. McCurdy:

First, I wish to express my appreciation to the voters in my riding of Windsor-Lake St. Clair for having extended me the opportunity to sit in the House once more and represent them.

The fact that I was elected to the House in the riding of Windsor

Lake St. Clair reflects the fact that in Windsor approximately 80 per cent of the voters voted against the Conservatives. Although it cannot be argued, and I quite gladly admit this, not all people who voted against the Conservatives were necessarily expressing themselves specifically against the trade deal, nor would I submit the argument that all of those who voted for New Democrats or Liberals were voting against the deal. But in Windsor those who voted 80 per cent against the Conservatives most certainly were voting against the trade deal. There is a reason for that.

December 23, 1988

Canada-U.S. Free Trade Agreement

In Windsor we have a much more intimate relationship, and I would say a deeper understanding, of the character of American society than do many other Canadians. That is not to imply a fundamental anti-Americanism, as I am sure you have heard me say before. Most of us in Windsor have American relatives and are engaged in constant commerce between Windsor and Detroit. We like Americans. However, we do not want to be American. We know that their society is quite different from ours. It is a society that we do not want to see replicated in Canada.

It is not only a question of experiencing those differences. We have felt the impact of the subsidiary syndrome in Canada. We have had an intimation of what will happen in this country insofar as it concerns those subsidiary plants that are owned by American multinationals. Nobody in Windsor doubts that efficiency and rationalization will mean a loss of Canadian jobs. There is no doubt about that.

I know there will be a Member on the other side, in typical ignorance not having read anything, and most particularly not having read the trade deal, who will say once more that the Auto Pact was a nice example, a prototype of this trade deal, and we ought to appreciate that what we are doing here is expanding the benefits of that type of relationship with the United States to the rest of Canada. Ignorance cannot be penetrated on that side of the House to convince those Members that the Auto Pact had within it guarantees that ensured Canadian jobs.

Insofar as it relates to something I am going to say later, there was one aspect of the Auto Pact that has not yet been sufficiently attended to in our debate. While it is true that the Auto Pact did ensure some measure of job production in Canada and a rationalization of the industry that assured production in Canada, one of the unremarked features of the Auto Pact was the loss to Canada of engineering, designing, and management. In other words, it was fine for Canadians to work on the factory floor, but not to work in the laboratories, design rooms, and offices of the Big Three. That is very important in respect of this trade deal.

I think that it is necessary to call attention to the fact that when the Government talks about competitiveness it has disregarded the importance of science and technology, and the impact of the trade deal on our ability to compete to the extent that we are able to develop the resources of development for us that will permit us to compete, not only with the United States, but with the whole world.

Let me return to the notion in Windsor, shared by many Canadians, that the inevitable result of this deal will be that Canada will become much more like the United States. Even Simon Reisman had the good sense, in one rare moment, to recognize that fact. He said that it was inevitable that a country with the population of Canada, very much smaller than the population of the United States, would inevitably become more like the United States. The implications of that are very significant.

Most Canadians have a notion of our country that it is in many respects superior to the United States. It is much more civilized and much more humane. All one has to do is live in Windsor and look across at Detroit and see the poverty and the manner in which the poor are treated, to understand that Canada is a much more humane and civilized country, and we want to keep it that way.

We do not believe that we have to sacrifice those characteristics in order to prosper. Indeed, we think that we have an experiment going in this country that would demonstrate that prosperity and social justice could go together, make us successful in the world, and make us just as able to compete as anybody else without doing it on the backs of those who are poor, deprived or oppressed.

Not long ago I had occasion to discuss the trade deal before an audience celebrating the annual meeting of the North American Black Museum in Amherstburg. I have to tell you, Mr. Speaker, that I was surprised at the passion of reaction to the notion of the trade deal. Those of us who came to Canada from the United States to escape slavery do not want to see that society replicated here. There is serious potential for harm to minority groups, because the minorities in this country who have not yet achieved equality will not achieve it in a society whose primary imperative is market forces.

It is not only New Democrats who have called attention to the inevitability of Canada becoming more like the U.S., and the consequences which flow therefrom. Tom Stanfield expressed it in appropriate terms when he said: "It is the cost of government, the cost of energy, the cost of human resources that will allow us to compete or not to compete, and therefore we will slowly adopt the American way, with very few modifications. Why is it that manufacturing is largely located in the southern United States, rather than in the northern

December 23, 1988

which is more comparable to Canada, when it comes to cost structures and a way of life?"

That comment is a very interesting one. It calls attention to a very interesting fact. Those who say to Albertans or to Maritimers that they will be enriched by this deal have not looked at Wyoming, or North Dakota, or South Dakota, or Maine-all of which have suffered as a result of U.S. industry fleeing to the south and to Mexico. U.S. industry is cutting back on its cost of production at the expense of the citizens of the northern states.

Let me cite one other view of the consequences of the inevitable homogenization of Canada and the U.S. I quote the words of Mickey Cohen, as reported in the Financial Times of November 28, 1988. He had the following to say: "I guess I would have to go after regional development and universality. I would cut out most of the industrial support and the individual industrial programs, particularly the ones geared to the regions. I would go after universality and cut unemployment insurance. I would raise the taxes as well, and I might skew the tax system back towards investment. I think we have to tax more and spend less."

That comment implies the inevitable evolution that will take place. But what has not been recognized is that it is the deliberate intent of this Government and its cohorts in the multinationals to make Canada more like the U.S. It is no accident. And the clues were there when, early in the life of this Government, it began to attack the social programs in this country. It attacked the indexation of old age pensions. It attacked the indexation of family allowances. It then proceeded to eliminate the National Energy Program and FIRA, putting Canada up for sale. Mr. Speaker, who can forget this Government's action with respect to the drug patent legislation?

Well, we were begging for an opportunity to get into this deal at that stage of the game. We wanted to show Mr. Reagan just how committed we were to giving the country away and becoming more like the United States. But that wasn't good enough. And so, Mr. Speaker, what we have is a Government that is absolutely committed to the notion that this country should have its society, its politics, its economy determined exclusively by market forces. It is no accident. This Government wants Canada to become more like the U.S., and that is why we are struggling against this agreement.

It is quite obvious, Mr. Speaker, that this Government has a mandate. And while we have had promises from

Canada-U.S. Free Trade Agreement

the Prime Minister (Mr. Mulroney) that the fears that many Canadians have about the need for adjustment programs, and so forth, that the concerns that Canadians have about the threats to regional development programs and the like, will be taken care of by this Government, will be addressed by this Government, one has to bear in mind that guarantees were given that social programs would not be affected, that workers who were displaced would be treated well, to use the kind of phraseology that the Prime Minister is accustomed to using.

And when we engage in this debate-not to defeat the free trade deal, because we know we cannot do that, but to get the Prime Minister to fulfil his promises-we get instead, as my House Leader put it, jackboot democracy. 1 would refer to it as puerile pettiness, to the extent that my colleague from Essex-Windsor, notwithstanding that it had been intimated by the Minister of State for International Trade (Mr. McDermid) that he would be given extended time, was not given the opportunity to complete his remarks.

I have never seen such niggardly behaviour in this place in my life, and that coming at the Christmas season. This Government should be ashamed of its behaviour.

We do not apologize for trying to get this Government to fulfil the promises that the Prime Minister made during the election campaign at least to address the fears that Canadians have in the face of the inevitability of this deal.

But, I digress from the focus of what I want to say.

One of the core claims of this Government is that it is trying to give Canada the opportunity to compete internationally and to do so effectively.

I will not digress again into the question of access to American markets and whether we really have that, or whether the disputes settlement mechanism will work or not. But let's consider the elements of competitiveness in the modern world economy.

It surely cannot be a part of increased competitiveness for a country that spends more money on its energy than any other country in the world, both for industrial purposes and domestic purposes, to give it away, in effect, when in fact our energy resources could be a comparative advantage.

Clearly there is something else afoot among those who suggest that we are going to be more competitive if we say that some of the comparative advantages we have

December 23, 1988

Canada-U.S. Free Trade Agreement

will not be comparative advantages, as energy resources otherwise might be.

It is clear to anybody who wants to examine the elements of competitiveness in this the tail end of the 20th century that the very core of competitiveness is the ability to produce new technology and new knowledge; that the core of economic survival for industrial nations such as Canada is research and development.

And yet, Mr. Speaker, this country has a pitiful record in respect of research and development. Only one-half as much of our Gross National Product is spent on research and development as is spent by the other industrial nations against which we must compete. And one of the reasons for this is that so much of our industry is American owned. In fact, if one looks at those industries that are Canadian owned and their commitment to research, it can be seen that they commit the same proportion of their sales to research investment as characterizes the other industrial nations, and our real problem is our foreign ownership.

One of the elements of the trade deal that has not been discussed in any great detail is in fact the ownership or investment rules. In respect of this signal fact, every single company in Canada worth less than $150 million is open to acquisition by Americans without any review at all. None. No conditions with respect to performance; no conditions with respect to employment; and no condition that would say that, once acquired by the Americans, a company even has to stay in Canada.

And what characterizes those industries? What characterizes those industries is the fact that almost every single new net job produced in Canada in the last 10 years has been produced by companies worth less than $150 million. Most important, virtually all Canadian research and development was done in companies worth less than $150 million. We have put up for sale the very core of our competitiveness, assuming we understand that research and development is important to our future competitiveness. Certainly that is clear.

How do you stimulate research and development? You do it by subsidies, at least in part. You do it by grants to industry, at least in part. You do it by procurement. We face five to seven years in negotiations on subsidies and you know damn well that the result is not going to permit the Canadian Government to invest specifically in Canadian industry to stimulate research and development. That is going to be unacceptable. You

cannot count on it. Yet half of all research in the U.S. is paid for by the American Government.

Some $65 billion a year is spent by the American Government on research, and two-thirds of that is for defence. In other words, the Americans have an area of subsidization for research that is not accessible to Canadian industry. And I am not even going to talk about the subsidies at the state or city level that will never be attacked. I am talking about a heavy duty investment in research by the American Government that we will not be able to duplicate and which is closed off to us.

We say we are going to make Canada more competitive in the American market. Nonsense. We put up our research and development intensive industries for sale. We are in a deal in which the Americans can subsidize their research in ways in which we cannot.

Furthermore, we have procurement rules. Oh, we have a nice level playing field in the procurement rules. Procurement is one of the most powerful methods of stimulating research and development. Do you know that our $150 million or less industry is where one would expect to have research taking place, yet they are wounded by this agreement. Do you know that the Americans have protected their small business by a set-aside rule? There is a whole gob of contracts that the American Government puts out that will not be accessible to our industry because it is closed off to favour their industry. We will not even talk about the minority set-asides. So procurement is unlikely to be the weapon it ought to be in stimulating research and development in Canada. The importance of this aspect of this deal is such that I am tempted to ask you for extra time.

Hear, hear!

Mr. McCurdy:

However, I know the Government would not tolerate that because of course it does not want to penetrate the cloud of ignorance which has propelled speeches from Members opposite so far.

Let me say in closing that I know you enjoyed this, Mr. Speaker. I wish you a Merry Christmas and a Happy New Year and I look forward to seeing you again next year.

Mr. Pat Sobeski (Cambridge):

Mr. Speaker, I want to thank you for the privilege of addressing this House. As this is the first time I have spoken in the House of Commons I must first thank the voters of my riding who elected me to continue the tradition of strong federal representation for Cambridge. As many in this Chamber

December 23, 1988

know, Chris Speyer served this riding and this country as a skilled legislator. I am honoured to be the beneficiary of the contribution he made to my riding. He has established an excellent standard for me to duplicate.

The riding of Cambridge encompasses a number of communities: the City of Cambridge, comprised of the former Cities of Galt, Preston and Hespeler; the Township of North Dumphries and the addition, as a result of redistribution, of the south ward of the City of Kitchener. The riding is a combination of urban and rural, and a reflection of the nation as a whole.

This riding has benefited for the last four years because of the economically sensible policies of this Government. The voters of this area remember five years ago under the previous Liberal Government when the unemployment rate was in the 17 per cent range. Over the four years of Conservative Government the unemployment rate in the riding fell to 2.9 per cent or, to put it another way, 97.1 per cent of the working population was employed.

The workers of this region recall that, at the start of the first mandate of the Conservative Government, it established a long-term plan and agenda for economic renewal, and it is clear from the confidence expressed by Canadians that that plan is working. I am proud to represent a Government which created the economic environment that delivered jobs for the riding.

With this record of accomplishment in this riding, a riding which was experiencing one of the fastest growth rates in Canada, why would the voters elect a supporter of the Free Trade Agreement? If there was any riding that wanted to maintain the status quo, it should have been the Cambridge riding.

However, the voters listened during the three years of this debate and on November 21, when they were asked to decide, they decided on me and a second majority mandate for this Government.

Let me review for the House a few facts that convinced the voters of my riding to get on with the job of building a stronger Canada. The Macdonald Commission informed the Canadian people that we do not have unrestricted access to a market of 100 million people as do members of the European Economic Community, Japan, and the U.S. As well, the U.S. has a wide range of non-tariff barriers and regulatory procedures which prevent Canadian firms from having secure access to the U.S.

Canada-U.S. Free Trade Agreement

We have witnessed the growth of U.S. protectionism with over 800 protectionist measures on the books that would have had a negative impact on plants, which means a loss of jobs. However, the workers of this riding knew that even if the riding of Cambridge was doing well, tearing up the Free Trade Agreement would not continue this golden status quo.

The strongest U.S. opponents of free trade are the United Auto Workers and the politicians from the auto producing States who want a much more aggressive negotiation on the Auto Pact to Canada's disadvantage. If we tear up the Free Trade Agreement we expose the Auto Pact by itself to a fresh and dangerous challenge. The Auto Pact has enriched and strengthened my riding and the citizens want to continue to build on free trade, not only in Waterloo region but in the rest of this nation.

Hon. Members opposite are also aware that any arrangement entered into with the U.S. must be compatible with GATT and acceptable to our trading partners. The only arrangement acceptable is a free trade area under Article 24. The Opposition has suggested it would attempt to negotiate a series of trade agreement with the Americans which are limited in scope to specific industrial sectors, the so-called sectoral approach. However, this approach was tried by the Liberals earlier in this decade and it did not work.

Members of the Opposition say that the Free Trade Agreement is no big deal as only 20 per cent of our exports still face U.S. tariffs. The critical point is that those remaining tariffs are primarily on manufactured and processed goods. The tariff structure makes it cheap to export raw materials and expensive to export finished or processed products made from those raw materials. Eliminating remaining tariffs gets rid of this disincentive to do more with our resources in Canada. As the President of the Canadian Federation of Labour said, or put it simply: "More pre-export processing means more jobs".

Members of the Opposition have made claims that companies will locate down to the southern States where there are no minimum wages laws. If that were the case, then why would the automobile industry invest so heavily in Ontario in the last few years? Why would Honda locate in Alliston? Why did Toyota pick Cambridge? Why did GM-Suzuki pick Ingersoll?

The answer is, first, that the Canadian labour force is well educated and capable of operating the sophisticated equipment of modern industry. Second, in the Province

December 23, 1988

Canada-U.S. Free Trade Agreement

of Ontario and in the communities of Alliston, in Waterloo Region and Oxford County, there exists a tremendous work ethic. When education is combined with work ethic one gets greater productivity. We recognize it. The workers recognize it. More important, industry recognizes it, too.

The companies are willing to pay higher wages here because of the greater productivity of Canadian workers, and that makes it a good investment for these companies. Canadian workers should be congratulated for the well-earned reputation they have achieved in the international community.

I suggest that where wages are low productivity is low. I suggest that where wages are low quality is low. In other words, one gets what one pays for.

I want to say a few words about Canada's aerospace industry that stands as a concrete example that free trade can and does benefit Canadian companies and Canadian workers. The aerospace industry is one of the only Canadian industrial sectors to have firsthand experience with and to operate a multinational free trade agreement.

The Civil Aircraft Agreement is a multinational trade agreement signed by the participating countries of the GATT which came into effect January 1, 1980, and virtually eliminated all tariff duties on commercial aviation products, including aircraft components and parts.

What have been the results between 1980 and 1987? The aerospace industry has greatly benefited under this agreement, allowing the Canadian aerospace industry to add more than 14,000 new jobs-a 30 per cent increase since 1980. In comparison, the remainder of the Canadian economy added new jobs in those seven years at the rate of 11.5 per cent.

The Canadian aerospace industry is proof that international agreements, whose purpose is to encourage export trade, can and do work. Canadian companies and their employees can and do win.

I would now like to be more specific as I review a few companies in the riding of Cambridge.

Com-Dev Limited is part of that aerospace industry that exports most of its products to the United States. The company predicts the current work force of 260, composed of young men and women from our universities and community colleges, will double over the next five years.

Com-Dev Limited is a Canadian company that sells a high tech product to the United States, Europe and Japan. This Cambridge industry is a study of excellence that is another example proving Canada can compete with the best in the world.

The textile industry also has a presence in Cambridge. Let us look at Tiger Brand, a successful Canadian company. Tiger Brand is an example of the kind of restructured and modernized garment plant that will succeed under free trade. As the president of that firm indicated:

The Free Trade Agreement is just a simple transaction between

two countries. It will help this company to employ more people by

expanding our share of the U.S. market. The fact is that there is not

a single 'modern' sewing machine collecting dust in Canada.

This company does not make the $1.50 T-shirts. It wants no part of that market. Let the developing countries manufacture that product.

Tiger Brand markets a high quality, colourful, fashion-oriented sportswear that is aggressively sold in the competitive North American market-place. This is a progressive company, willing to move with the times. Yet, at the same time, it has established a child care centre to assist the employees working there.

Another firm, Allen-Bradley, a major player in the industrial electrical field, supports the Free Trade Agreement because it will protect and expand its access to the large U.S. market. In fact, the president of the firm has indicated that: "When duties are removed from our medium-voltage products, we will be in an even better position to compete in the United States. By increasing our exports, we will be creating many more jobs for our area. Our Canadian employees can compete with American employees in any state, now and in the future."

Allen-Bradley is also committed to the long-term development of business in Canada with its employees. During the past two years it has spent $14 million to improve its facilities and equipment. In 1989, it plans to spend at least $7.4 million on new capital projects.

I might add that Allen-Bradley's record of community involvement is a model of good corporate citizenship.

Canadian General-Tower Limited is a medium-sized vinyl manufacturing Canadian company located in Cambridge, Oakville and Etobicoke that ships 50 per cent of everything it makes to the United States. According to its Chairman, the prospects of free trade have enabled the firm to increase its factory capacities

December 23, 1988

substantially and that means prosperity for the community, not only in taxes paid but, more important, in the jobs that will be sustained and created.

He continues:

The Canadian market is simply not big enough. Worse, without free trade, U.S. protectionist policies will limit and erode Canada's export potential. An alternative for our firm may be to service the American market from plants located in the U.S. And that loss would invariably be deeply felt by those local retailers who currently serve our 1,000 employees.

As these examples illustrate, the Free Trade Agreement will continue to bring more and better jobs to the residents of Kitchener and Cambridge.

In June of this year Prime Minister Thatcher spoke to Parliament. I want to remind Hon. Members of some of her comments. She said:

Britain has learned that it is not Government which creates wealth, but people, provided Government has policies which encourage them to do so.

We have also got away from the debilitating concept of the all powerful State, which takes too much from you to do too much for you, constantly substituting the politician's view of what the people should have, for the people's own view of what they want.

Later in the same address she said:

Protectionism is not the lifebelt which keeps an economy afloat. It is a millstone that drags you down and penalizes consumer and workforce alike. Subsidize the inefficient and soon that is all you have; you lose the competitive edge to export abroad and keep prices down at home.

In my riding of Cambridge local industries and companies have continually emphasized the need for improved productivity, with dedicated and innovative people, the superior application of technology and the new opportunities offered by the Free Trade Agreement. I am confident that the future of the riding of Cambridge is strength and growth, within a truly independent Canada.

Hear, hear!

Mr. Jim Karygiannis (Scarborough-Agincourt):

Mr. Speaker, it is an honour to stand to speak for the first time in this House on behalf of my constituents of Scarborough-Agincourt. I want to thank them for giving me the opportunity to come here.

Last weekend when I was in my constituency the people I met were continually asking about the free trade deal. One business man I know, a man who is a well known Conservative supporter, wanted to know what the fuss was all about, why didn't we Liberals just let the Bill pass and get it over with.

Canada-U.S. Free Trade Agreement

I am sure that many of my colleagues across the floor are wondering the same. I asked the man: "Would you sell or buy a house of any kind, or any kind of property without first studying the terms of the contract and discussing it with your family? Would you venture into a major business deal with another company without first making sure that all the cards were on the table and that credit was good at the bank and that all your business partners knew what was going on? That is what we are doing." There was no argument.

I explained that as an informed businessman he may have a good idea of how the present free trade pact might affect his business. What about those Canadians who have very little or no working understanding of international trade and business? Do they have any less right to know or feel assured? What about the small local storeowners or textile factory workers who work long hours just to make ends meet, who cannot afford to pay a mortgage and may never own their own homes? What has the Government said to them, either to inform or assure them that they will benefit from free trade, other than there would be some fall-out from the gains made by multinational corporations which will be the real beneficiaries of the deal?

Again there was no argument because this gentleman knew, as we all know, that the Conservatives nearly lost the election because they arrogantly and mistakenly thought that the less the public knew about free trade the better. They wanted to believe that it was a non issue.

Before the beginning of the election campaign, I believe that 99 per cent of Canadians knew nothing about the GATT negotiations, much less their connection with free trade.

I told this man that the track record of the Government is that it has never said once, from beginning to end, what its real intentions in proposing this Bill have been. It has never come clean with the public or the House, to spell out in simple terms who will really benefit and who will really lose once the trade Bill becomes law.

Many are bewildered that our Prime Minister (Mr. Mulroney) now hails this deal as Canada's salvation when, prior to 1984, he insisted that he did not even want to hear mention of a free trade pact since it meant the loss of Canadian sovereignty.

December 23, 1988

Canada-U.S. Free Trade Agreement

Why does a loss of Canadian sovereignty no longer concern the Government? Did the Prime Minister have to go along with free trade to obtain a membership in the exclusive trading club known as G-7? Perhaps the Prime Minister was told in no uncertain times that the Auto Pact would be cancelled and a new arrangement renegotiated under GATT unless he played ball with the U.S.

What will be the impact on national markets all over the world when one of the world's richest resource nations, Canada, becomes intimately linked with the world's largest debtor nation? It is absolutely incredible. It is outrageous. Where and when has the Government, either in the House, on the campaign trail, or in any of its publications ever addressed these issues or attempted to satisfy these kinds of questions with a reasonable response?

It falls upon us, because of the unwillingness of the Government to provide the public with any sort of useful information, to make sure that all the questions are raised and every answer checked so that every opposition Member is satisfied that a reasonable accounting can be given on the issue of free trade to the people of their own constituencies who are now purposely being kept ignorant by the Government.

We have the right to ask and a right to know, but most of all we have a responsibility to the Canadian public to inform them fully of every possible consequence to their future which will result from this Bill.

Our Party has said that we would not impede the passage of a free trade Bill and we will of course hold true to our word. However, the election of the Government was hardly an overwhelming endorsement of free trade.

A better measure of the Canadian feeling on this issue was taken by pollsters immediately following the national debate among the three Party Leaders. At that time, the big corporations spent millions of dollars in advertising, buying the election for the Government.

Why was this done? Were the millions spent because free trade would benefit the average Canadian? Even the most naive would not believe that big business suddenly developed this touching concern for the little guy.

Why did most of the big business community so strongly support the Free Trade Agreement? In the past few years we have seen a number of Canadian corporations transferring their operations to the United States,

or buying on a large scale existing U.S. business enterprises. None did so because they would have access to a larger market, they did it because there are fewer effective government interventionist policies in the United States, that bastion of free enterprise where what is good for General Motors is good for the U.S.A., as a former U.S. Cabinet Secretary put it.

Yet these corporations, which one former Party Leader called corporate welfare bums, are usually in the front line at the trough petitioning the Government for special favours and hand-outs.

The concern of my constituents is over what protection the Government will afford its citizens when corporations in Canada insist they cannot compete with U.S. firms as long as they are forced to contribute to the social programs which constitute the safety net that provides a decent minimum standard of living for so many of our citizens.

Are our social services, pensions, tax system, health insurance and other programs to be changed more like those in the United States where the gap between the rich and the poor is steadily growing? For example, in Canada, over 80 per cent of unemployed workers receive unemployment insurance benefits of 60 per cent of their weekly wage for up to one year. In the United States, only one-quarter of the unemployed receive unemployment insurance benefits, getting less than 40 per cent of their weekly wage for only six months.

In Canada we have universal medicare. In the United States, 36 million people, one-third of them children, have no form of medical insurance.

Welfare assistance is readily available for all Canadians but only one-third of poor American families receive any public assistance. It is no wonder there is such a high crime rate in the United States.

Yet the Americans claim that our social programs are unfair subsidies and want compensation for profits lost to American companies if and when Canadians create new social programs like dental care or public automobile insurance.

That is blackmail, extortion and robbery.

My Scarborough-Agincourt constituents have other concerns. They want progressively higher standards in the areas of environment protection, occupational health and safety, consumer protection and minimum wages.

With respect to minimum wages, several of the states have no minimum at all and most others have pegged

December 23, 1988

minimum wages well below Canadian levels. Surely if free trade is going to make Canada a wealthier nation we should be able to afford higher standards.

Surely no one is going to be so bold as to suggest that in order to keep in world markets we must poison our environment, maim and injure our workers and consumers, and pay poverty wages to our workers.

These are legitimate concerns not only of my constituents but of most Canadians.

When Canadians were concerned that our precious water resources were being jeopardized by the Free Trade Agreement, the Government reluctantly reacted by amending the agreement. Surely since the concerns I have raised on behalf of Canadians are serious and the Government claims the agreement will not have these impacts, then the Government should be prepared to accept amendments which will reassure Canadians that their concerns and reservations on this Free Trade Agreement have been addressed.

Any attempt by the Government to limit legitimate debate and proposal of amendments will be a betrayal of the trust of citizens who have been lured into voting for the Government by the massive big business propaganda barrage.

Hear, hear!

[ Translation]