July 4, 1972 (28th Parliament, 4th Session)


Marcel Joseph Aimé Lambert

Progressive Conservative

Hon. Marcel Lambert (Edmonton West):

Mr. Speaker, it is unfortunate that my colleague, the hon. member for Fundy-Royal (Mr. Fairweather) who proposed this motion is absent today. He is a member of the board of governors of the University of New Brunswick, and the board is

meeting today to choose a new president. Obviously he finds his presence is required in Fredericton rather than here today.
This is a debate that was unannounced beforehand and which in any event seems to be serving a rather ulterior purpose for the government. Ostensibly we are being held here to deal with the dock strike in Montreal, but instead-and despite vehement protestations to the contrary-the government is carrying on with its normal legislative program and we do not know when we are going to deal with the dock strike. So much for the credibility of the government in setting down a motion in the name of the Prime Minister (Mr. Trudeau) and the right hon. gentleman's statements on television and to private members, that this House was going to complete its deliberations on Friday. We understand the seriousness of the labour problems in Montreal, but I want the minister to tell the house straightforwardly how long this pretext that we are here to deal with the dock strike is going to continue and whether we are going to deal with this and other legislation purely on an ad hoc basis?
This situation typifies the government's mishandling of the business so far. There was no question of there being ample time to consider this legislation prior to June 30 so that we might accept it. In the first place, it is badly drafted legislation which embraces, in many instances, utterly false concepts. It is then presented to us almost on the eve of the close of the session, the government having full knowledge of the number of supply or allotted days that had to be called in June. Although there was nothing the government could do about that rule, it blithely put forward this legislation which involves a most important principle, namely, whether the government of Canada can unilaterally set itself up as an economic czar, or create the office of an economic czar through the Minister of Industry, Trade and Commerce (Mr. Pepin), with regard to the development of industry and growth of business across the country involving a very limited degree of foreign ownership, as outlined in the bill.
The amendments to clause 2 of the bill, and the amendment that has been put forward by the hon. member for Fundy-Royal, crystallize the fundamental question underlying this bill, which is how much unilateral authority the government believes it has in relation to the economic development of this country. This amendment provides that there must be some degree of consultation with the provinces. My colleague questioned the minister about this as will be seen by reading page 24:13 of volume 24 of the proceedings of the Standing Committee on Finance, Trade and Economic Affairs on June 20. The minister gave a reply that can be contrasted with that of his colleague the Minister of National Revenue (Mr. Gray), who had consulted the provinces. To the surprise of every member of the committee, the latter minister refused to give any indication of the attitude of the provinces, except to say in a general way that some were in agreement and some were not. The minister wasted the time of the committee during one evening's session, and it is no wonder that my colleague for Fundy-Royal quit the meeting. It was a disgusting performance and an effrontery to the committee that the minister spoke in this manner.
Foreign Takeovers Review Act
His colleague, the Minister of Industry, Trade and Commerce, I will say, was much more forthcoming, though he did not indicate that a particular province made any particular point. I think he should have done so, since I read in a daily newspaper in my home city of Edmonton that the government of Alberta had taken the stand that it wanted full consultation. I agree with that stand. There is no way the government of Canada can declare that, by virtue of section 91 of the British North America Act, it has jurisdiction to move into this area unilaterally. One can only move in unilaterally in the same way that one can try to butt down a brick wall with one's head. The brick wall is not knocked over; the only thing that suffers is the head. This is what the federal government is trying to do in this case.
The minister has indicated that his officials will consult with the provinces, but I should like to know what sort of mechanism there is for this. We have the minister's word that there will be consultation, but if this minister is moved to some other portfolio, some other minister in the future may say that he could not care less about consultation, that there does not have to be any consultation with the provinces. Perhaps some form letter is to be sent out to a provincial authority, to some as yet undefined ministry. The minister has not indicated with whom or with what department of the provincial government there will be consultation. Is it to be a secretary-treasurer, a minister of mines and minerals, or will it be through a minister of intergovernmental affairs? We have no indication with whom the consultations will take place. If the minister will forgive my saying so, I think he is doing some wishful thinking in this regard. He is really grasping at straws. Why is it necessary that there should be this consultation? Unless the minister has indicated something that is not factual, the registrar's bureau of which he speaks, and which the deputy minister indicated would be manned by about 28 people, does not contain one-tenth of the people with the expertise required to deal with the problems that exist in the provinces.
I have taken pains to point out my grave doubts as to whether the government of Canada has the constitutional right to deal with a company or a business interest, and this could be an individual, that is in the hands of a provincially incorporated company or a foreign company registered under the foreign companies provisions of the provincial act under which the business is conducted entirely within the province in question. The same holds true in respect of a business organization which may be a partnership and is taken over by foreign interest. There is no way that can be touched.
If this measure were the result of a substantial degree of agreement with the provinces beforehand, then I think one could say that the worrisome problems of takeovers might be dealt with in an efficacious manner. I share with the minister his concern about takeovers which are the result of a U.S. conglomerate acquiring the assets, or a portion of them, of any corporation which involves Canadian companies. I have been concerned about this for years, and long before this minister came into the House. I have been concerned about estate taxes and the fire sales of Canadian businesses to interests abroad,

July 4, 1972
Foreign Takeovers Review Act
because we have forced these businesses to be the sacrificial lambs of some governmental greed for revenue. One might have been able to rationalize this problem in respect of succession duties with the provinces. We know that the province of Alberta has said it will not impose succession duties in order to have an advantage over other provinces. British Columbia has moved in that direction and Quebec has said it is hopeful it can move that way. The same is true of Ontario.
What a mish-mash; what a jungle, and just after a commission has considered the problem of taxation for years and recommended that there be some rationalization of our taxation system this government makes changes in the estate and income tax provisions. It has been like a kid with a big spanner let loose on some delicate machinery. It tinkers here and smashes there, but the net result is bad. Now, we can see the fruits of the government's lack of consultation and its unilateral action. I know the temptation is great to move into this provincial field. Provincial governments are elected by the same people who elect the representatives in this House, and to whom this government is responsible. One would think this government was responsible to itself only and did not have to answer to the Canadian people. This government seems to think it can fly in the face of provincial governments which represent the same citizens.
As I said on a previous occasion, does this government think that provincial representatives are from outer Slo-bovia? This government seems to act that way, but I suggest to the minister he will have to indicate how he can act with expertise, without consultation, in dealing with the disposition of oil lands, leases and interests in the production of oil and gas. Where does the minister expect to find the expertise to deal with the disposition of timber interests in British Columbia or in Ontario? How does he intend to deal with potash in Saskatchewan? These are matters in respect of which there will be very serious questions asked, and I am not satisfied that the proper answers are forthcoming. The Atlantic provinces' interests are entirely different from those in the province of Alberta. We have heard the representations from those provinces loud and clear, yet I suggest these matters will be resolved by some economic Czar here in Ottawa. I make that suggestion because a provision has been included that a transaction will have to be of significant benefit to Canada. Who will make that decision except the minister? He will make a recommendation to his Cabinet colleagues who will pass an order in council in respect of these transactions.
I have not spoken yet about the administrative side of the fantastic bottleneck this legislation may create. We are not dealing with some 150 actual takeovers, we are dealing with hundreds and hundreds of transactions. If that is not so then the minister's advisers have been hiding their heads in the sand, or are lost on a cloud in cuckoo land. This measure will involve hundreds of transactions; as a matter of fact, even thousands. Some may argue that the transactions may be rebuttable, but that means the individual firm must undertake the burden of proof. There is always uncertainty, but I should have thought the government would accept the amendment from the committee in my name which was suggested by a number of public real estate companies in Canada. The burden

should not be upon those conducting the transaction to show there is significant benefit to Canada, the burden should be on the government to show there is a significant negative effect rather than a benefit. Why should the people have to prove this to the government? Why is the onus on the individual?
The philosophy of this administration militates against the individual and benefits the God-Almighty state. We are mere numbers. We are now regimented more and more. The burden of proof shall be on those in business who are carrying out these transactions. It will be up to them to prove that the transaction is of significant benefit to Canada. Even in the case of a neutral transaction, an exchange of portfolio investments, the burden of proof is still there and is mandatory. Who among the advisers shall be qualified to advise the minister? Is this another area in which special representations will have to be made? If Bill C-259, shall we say, created a lifetime pension scheme for tax lawyers and tax accountants, this bill will be manna from Heaven for corporation lawyers as they beat their way to Ottawa on so many transactions which may be the subject of careful scrutiny and study by the Minister.
Then, what about the, shall we say, indefinite pressure which could be brought to bear concerning this or that transaction and whether or not it is of significant benefit to Canada. Such a judgment would depend upon who saw whom or who had what for breakfast. The decision would come down in that way. In my estimation, the burden must be on the Crown if it is to administer the legislation this way. The burden should be on the Crown to prove the disadvantage of the transaction and to negative the transaction.
I see you are becoming anxious about my time, Mr. Speaker. I wish to finish by saying the amendment put forward by my colleague from Fundy-Royal points out one of the fundamental difficulties in respect of this bill which has not been resolved. If this provision is not incorporated in the bill, more and more trouble will be created with the provinces and goodness gracious, I say on behalf of the Canadian people that there has been enough trouble between the provincial and federal governments involving well meaning but bull-headed people.

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