Mr. Tom Hockin (London West):

Mr. Speaker, my question is addressed to the Minister of National Health and Welfare, and I address it to him urgently. I returned from my riding with countless requests from the medical community in London and elsewhere expressing concern about Medical Research Council funding. With rapidly approaching deadlines for research projects in the medical field, I must ask the Minister when he will give the House his response to the Medical Research Council's request that its funding be restored to at least last year's level.

Mr. Tom Hockin (London West):

Mr. Speaker, my question is directed to the Acting Minister of Justice. It does not refer to the State of California, but to the State of Michigan. What are the Minister of Justice and officials in the Department of Justice doing about a State of Michigan policy directive which prevents the transfer of mandatory life prisoners to serve their terms in their native lands?

This directive affects a former constituent of mine, Sandy Harrington, who appears to be prevented from serving his term in Canada by this directive. In my opinion this is a violation of the treaty between our two countries on this matter.

Mr. Tom Hockin (London West):

Mr. Speaker, 1 am pleased to participate in the debate on this piece of legislation. The Bill has been well explained by the Minister. The historical progress of the telecommunications industry and its effect on Bell Canada were well outlined in what he had to say. I do not want to repeat at any great length the points the Minister made, however I would like to give my perspective as a Member of Parliament who has in his riding a number of Bell employees and as someone who has taken a look at the difficulty in Canada of striking a balance between having highly competitive, strong international industries and protecting consumers.

In many ways this Bill is a litmus test of what a Government will do on matters of this sort. We want to encourage Canada to build large, effective and highly competitive industries in this modern age, especially in the telecommunications area where we are faced with fierce competition. At the same time, there are few utilities which are of more basic importance to average Canadians than telephone services. There are shut-ins who depend upon telephones. There are those living on limited incomes who, as one of their few luxuries, can afford telephones. They cannot afford expensive rates. We have the hotel industry and many others which depend upon reasonable telephone rates, not upon high or expensive charges. A balance always has to be struck between helping a major company and protecting consumers.

I trace the genesis of this Bill, to some degree, to the important sales of Bell Canada to Saudi Arabia some years ago. In the contract, billions of dollars worth of business was brought to Saudi Arabia through Bell Canada. The great expertise and experience of Canada in that field was used to assist that country. The contract was an extremely successful one for Bell Canada. It made the company more internationally important and competitive. It helped Canadians as well as Saudi Arabians. In the process of generating great revenues and indeed reasonable profits, Bell Canada found that the CRTC wanted to consider it as part of its ordinary revenue and to diminish somewhat its request for rate increases. I cannot go into the merits of the total request for rate increases which Bell made and the CRTC's injunctions to restrain its increases. However, what emerged in that instance was the fact that Bell Canada, to some degree, was being punished for reaching out and searching for an important international market. Somehow, if it made millions of dollars, it suddenly decreased its claim for a reasonable increase in telephone rates. The Canadian Government and the CRTC were faced with trying to strike the balance between encouraging Bell Canada to be internationally at the forefront of its industry and protecting Canadian consumers. I believe that particular market opportunity is what led to the reorganization of Bell Canada.

April 2, 1985

Bell Canada Act

What was the reorganization? It was complex but, as Mark Twain said, at the middle of anything that is complicated is something simple. The simple principle was that the regulated part of that telephone company should be continued to be regulated, but the entrepreneurial parts of Bell's various enterprises should be given some flexibility to compete internationally. I was disturbed when I heard the hon. member of the New Democratic Party speak on the Bill. He did not try to encourage that side of the operations of Bell. We want Bell to be a world-wide force in the telecommunications industry. We want to free it up to have the flexibility to do that. That is the aim of this Bill.

When Bell Canada Enterprises was allowed to turn itself inside out and become the holding company of Bell Canada, it was suggested that there should be a study of the powers of the CRTC. Those powers are outlined in the Bill before us today. Perhaps some changes could be made. Hopefully that will be looked at in committee. I support the Government in bringing this Bill before the house at this time. I support it in its attempt to strike a balance between international competitiveness and regulation in terms of protecting the consumer.

Mr. Hockin:

Mr. Speaker, I would be happy to respond to those points. First, Bell's opportunity to do well in that Saudi Arabian contract was based primarily on its expertise, not on the cash flow from subscribers. Its great expertise allowed it to produce the kind of services that the Saudi Arabian Government was looking for. In terms of cash flow from subscribers, there was very little cash outlet that was needed by Bell Canada in Saudi Arabia. Everything was put up front essentially by the Saudi Arabian Government. There was very little need for cash flow from subscribers. There was never a better deal. Perhaps he points to an unfortunate example in terms of arguing that subscribers' revenues are helping in this particular contract.

The Hon. Member does have a good point, however, that there is a balance to be struck regarding the fact that revenues

that flow from the regulated monopolistic Bell Canada operations do not help excessively the other parts of Bell enterprises. That is precisely the balance that this Bill is trying to strike.

Mr. Hockin:

Mr. Speaker, the Hon. Member for Winnipeg North (Mr. Orlikow) juxtaposes large corporate interests and the individual paying his telephone bill. I say that the whole issue should be put in a larger context. First, if you take a number of industries that depend enormously on long distance for their livelihood, especially a large service industry such as the hotel industry, if you are able to moderate their rates and make them more profitable, efficient and competitive, suddenly you will create jobs. Therefore, we have to look at the fact that if certain corporations are able to benefit and become more competitive, that can create jobs. That is part of the answer. The other part of the answer is the direct level of rates that will be in store for the local telephone calls. There is no evidence that the CRTC will allow unreasonable increases to take place. The CRTC will have a mandate under this Bill as it has always had to moderate those increases. I do not think we should be scared by the spectre of huge increases to which the Hon. Member for Winnipeg North referred.