EVIDENCE

[Recorded by Electronic Apparatus]

Wednesday, February 5, 1997

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[English]

The Chairman: Ladies and gentlemen, we're now ready to resume our hearings of this subcommittee into the proposed regulations under the Firearms Act.

This afternoon we're going to have a round table of some very noted specialists. I'm very pleased to welcome each of you here.

We have this afternoon Mr. René Roberge, executive director of the Canadian Sporting Arms and Ammunition Association. We have as well Al Taylor, vice-president and general manager of Savage Arms Canada.

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Mr. René J.J. Roberge (Executive Director, Canadian Sporting Arms and Ammunition Association): Mr. Taylor is not here at the moment, Mr. Chairman. In the event that he's tied up - I know he was going to be here - I have a fax copy of his brief. I'm not sure whether Mr. Taylor distributed it to the committee or not, but if I may be allowed to read it on his behalf, I'd be pleased to do so.

The Chairman: We'll put Mr. Taylor's presentation at the end, and if he's not here at that time, perhaps, Mr. Roberge, you would be so kind as to read the presentation then.

Mr. Roberge: Fine. I appreciate that. Thank you.

The Chairman: As well, we have Robert J. Nicholls, president of R. Nicholls Distributors Incorporated.

Mr. Roberge: Mr. Nicholls is not here either.

The Chairman: All right.

Thanos Polyzos is vice-president of Para-Ordnance Manufacturing Incorporated. It's nice to welcome you back again. Thank you very much for coming.

Mr. Thanos Polyzos (Vice-President, Para-Ordnance Manufacturing Inc.): Thank you.

The Chairman: Normand Héroux is the director of administration de la prévention at SNC Industrial Technologies Inc. And we have Claude Daigneault, vice-president of national sales, and Denis Renaud, technologist. Welcome.

Thank you very much, gentlemen, for being here. Mr. Taylor's not here and neither are some of our members. Oh, I see Mr. de Savoye arriving, so we have a quorum. I'd like to begin.

We'll allow each of the witnesses to make a presentation, following which we would like to be able to ask questions, if we may. Who would like to begin? Are there any takers?

[Translation]

Mr. Claude Daigneault (Vice-President, National Sales, SNC Industrial Technologies Inc.): I will be making my presentation in English so that I can be as clear and as passionate as possible about the subject. Subsequently, I will be happy to answer questions you may have in whatever language you prefer.

[English]

First of all, let me tell you I'm proudly married to a wonderful lady and I have two beautiful children. Personally, I have no problem with the law as it is and its regulations, and I fully support the intent and the spirit of the law, which is to curtail violence in this country and protect the citizens of the country against violent behaviour of irrational individuals who have easy access to deadly firearms.

Having said that, let me present the position from our company's standpoint. I'm with SNC Industrial Technologies; it's a wholly owned subsidiary of SNC-Lavalin, the largest engineering firm in Canada. We're going to talk a little bit about the organization, the business history, the objective of our presentation, safety and security in our operation, the specific concerns we have and the proposed solutions, some recommendations, and then we're going to conclude and summarize our presentation.

The SNC-Lavalin Group has been in existence since 1911. It got into the business of munitions manufacturing in the early 1980s with the acquisition of IVI Industries in Valcartier, which was making small-calibre munitions. Then in 1986, through a competitive bid process, it acquired from the Government of Canada the Canadian arsenals, for a price of $92.5 million.

So it has a full range of manufacturing capabilities, but it doesn't deal with the public or commercially. It deals with the government, police forces, and other authorized paramilitary forces.

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SNC-Lavalin employs 6,000 people in Canada, and SNC Industrial Technologies Inc., its wholly owned subsidiary, is a very important asset of SNC-Lavalin; as a matter of fact, it is its most important asset. We have investments of $135 million, in fixed assets, cashflow requirements, inventories, and so forth, to enable us to operate.

SNC Industrial Technologies manufactures for both domestic and to a limited extent international markets. Obviously, we're subject to all the export permit requirements of External Affairs. It operates two manufacturing plants: one in Le Gardeur, the east end of Montreal; and the other in St-Augustin de Desmaures, near Quebec City. It employs over 700 people, of which 60 are working on R and D contracts from the Canadian and U.S. military. Its annual payroll is $40 million, and 80% of its production is for the Canadian market.

This is very important: Along with four other Canadian companies - namely, Expro, Diemaco, Ingersoll Machine Tool, and Bristol - its existence is protected for national security reasons by a permanent Order in Council adopted by Parliament in 1978. It's called the munitions supply program. Since 1986 and until 2006, it is by contract from the government the designated source of supply of over 100 products and services to the Canadian Forces. Its product range includes large munitions, medium- and small-calibre munitions, training ammunition for paramilitary forces, and ancillary products such as fragmentation vests, gas masks, ballistic blankets, and camouflage nets.

We do have samples of some of the munitions that we manufacture for the paramilitary market. Don't be afraid, it's nothing dangerous. We also have components of firearms we manufacture for training purposes, and I'll get into that right now.

Since 1990 we've been very active in developing and marketing a new training line of products for the police and other special forces, with the aim of reducing our dependency on the Government of Canada. More recently, we entered into a partnership with Bombardier, as well as with Shorts in Ireland and Frontec in Canada, to penetrate the niche of electronics simulation training. Some of you may know that the Department of National Defence is in the market right now for the purchase of 100 training simulators, to be installed across the country.

In order to be able to manufacture and deliver products meeting customer requirements, we need to be able to test them using the same weapons as those of our customer. In the case of our new training line of products, using sub-calibre training ammunition, we need to manufacture and supply a barrel conversion kit, which is required for safety reasons. It's a sub-calibre. Once they put the barrel in their guns, it can't shoot the real live ammunition. For electronic simulators, we need to convert regular weapons into laser target triggering weapons.

We also carry out R and D activities in the field of small-calibre ammunition, often on a contract basis for DND and other allied countries. Thus, we are required to possess and use a reference collection of firearms of different makes and calibres for such test-firing purposes.

In addition, we are often asked to conduct product demonstrations in support of international marketing efforts - for example, at trade fairs - and to do so we are required to provide and use our own firearms.

We are therefore also interested in changes to the current Canadian export laws, policies, and practices that would facilitate importation of prohibited and restricted firearms to maintain for industrial purposes an adequate reference collection for test-firing purposes, as well as to facilitate the temporary exportation and re-importation of such firearms to support international marketing efforts.

I would like now to state our objective. Our aim is present our concerns about the impact of some of the proposed regulations on our industry and to suggest specific solutions by government and by ourselves that would ensure compliance with the intent and the spirit of the law.

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From a safety and security standpoint, we have been in operation for over fifty years and have never had an incident resulting from the possession or use of weapons at our facility. We have a very elaborate safety and security system that meets the most stringent requirements of the local police, the Sûreté du Québec, the Royal Canadian Mounted Police, and the Department of National Defence.

We have on our site 24-hour, year-round site surveillance. We have vaults for storage of weapons; intrusion electronic detectors; firearms safety handling courses for anybody who touches our firearms; an ongoing control of weapons inventory; a psychometric test of users of weapons; background checks of users of weapons; remote surveillance by camera; a fenced-in property with access control; a global security concept approved by Sûreté du Québec, and a door-lock system with limited access.

We have summarized in the attached document, which I'll ask my colleague to convey to you, the concerns we have with six of the eleven proposed regulations and have included proposed solutions. Although changes to accommodate our unique operation can be made to the regulations, we feel they will complicate the text and confuse the average public. You will note that in some instances the regulations, as they exist, would impose significant paperwork and a financial burden on both our company and the government, thereby jeopardizing our competitiveness and hence our survival. Even more disturbing, they would force us to acquaint, familiarize, and equip with firearms acquisition permits many of our employees who would otherwise never have been interested in firearms.

I'd like now to ask Normand to go over the preoccupations and the solutions. He's going to do so in French.

[Translation]

Mr. Normand Héroux (Director, Prevention Administration, SNC Industrial Technologies Inc.): Mr. Chairman, neither the firearms legislation nor the regulations take into account training firearms or ammunition.

We would simply ask that you include in these regulations the concept of training ammunition and firearms arms by adding an industrial purpose to clause 21 in order to cover some of our activities such as the research, development, manufacture and testing of training ammunition as well as the modification, manufacture and testing of training firearms and parts with or without the emission of projectiles.

We believe that any person who handles a full firearm - I mean a fully assembled one - must have all of the required licences and have taken all of the required courses, particularly if he must take the firearms off the premises.

With respect to the Storage, Display and Transportation of Firearms and Other Weapons by Businesses Regulations, our primary concern relates to the clause which states that prohibited weapons must be stored in a vault or securely locked cabinet on premises equipped with an electronic burglar alarm system. We want you to know that we feel we are quite capable of designing our own security measures to ensure the safety of our employees and of the public and we can demonstrate this ability to you.

Furthermore, according to the regulations, the ammunition or devices such as conversion kits in our possession are considered prohibited weapons. However, according to one RCMP interpretation, FX cartridges are not considered to be traditional ammunition.

In our view, magazines of more than 10 cartridges that have been modified to shoot only FX cartridges should not be prohibited. The same is true of conversion kits measuring less than 105 mm in length manufactured and sold specifically to shoot FX cartridges. Storage safety measures should be discussed with the provincial controller based on the risk involved - I repeat, based on the risk involved.

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I will now move on to the Authorization to Export or Import Firearms Regulations. We often export and import arms to modify them with FX kits. We ask that we be allowed to continue this practice under the supervision of Foreign Affairs and Revenue Canada, Customs in order to avoid pointless additional bureaucracy.

Regarding the Firearms Fees Regulations, we have some concerns about firearms that we bring in from other countries and temporarily store on our premises. It is not our responsibility to pay registration fees for firearms that are on loan, supplied or transferred to us for testing or modification and that we must return to their owners.

In our opinion, the fees charged for each export authorization should be eliminated. We already obtain an authorization to export all of our products. To charge a fee to take prohibited firearms or parts or ammunition out of the country is not, in our opinion, in keeping with the spirit of the legislation. Indeed, the purpose of the legislation is to restrict firearms in Canada. Accordingly, we should be promoting their export.

We should be able to come to an agreement on which licences employees are truly required to have and it should be understood that we are taking steps and doing checks to ensure the safety of employees and of the public, given that we already work with products that we consider far more dangerous than the firearms and ammunition that the legislation is intended to control. At the outside, a maximum overall annual fee could be set for each individual business.

With respect to the Conditions of Transferring Firearms and other Weapons Regulations, we respectfully submit that at the present time, we regularly exchange firearms, many of which are prohibited, with military or police forces. Some loans are short term, while others are longer term. All of the paperwork that will be generated as a result of these regulations will make transactions like this highly impractical. In most cases, we won't even be able to provide the registration certificates, and here we're talking about prohibited firearms belonging to the armed forces.

The Canadian Armed Forces already have documents for transferring firearms. We are also required to obtain import and export permits for foreign weapons. Therefore, this legislation creates some duplication. As a business, we believe in keeping internal records to account for all incoming and outgoing firearms.

Finally, with respect to the Firearms Records Regulations, we are open to the idea of establishing a registry to keep track of all incoming and outgoing firearms. We would be happy to pass along information on such these transactions to you. The terms and conditions could be established by mutual agreement. Thank you.

[English]

Mr. Daigneault: I'd like now to go to the recommendations.

The objective of the legislation is to reduce violence in Canadian society and its impact on innocent people. The legislation and its regulations have to be simple, easily applicable, meet the intended purposes, and not hinder legitimate industrial purposes. Some of the proposed regulations would be very hard for us to live with. We recommend that legitimate industries be allowed to submit a self-regulating and controlled plan, dealing with the possession and use of firearms, firearms components, and munitions, to the minister through the provincial controller for approval and monitoring. The plan should contain details of controls with time schedules as to how the industry intends to meet the minimum acceptable criteria set by the minister to meet the letter, intent, and spirit of the law and its regulations.

Once approved, the implementation of the plan should be auditable and for a fixed period. We also recommend that there be a monetary package deal with a maximum limit for industries that require a large amount of permits or transactions.

Just as an aside, I thought it important to talk about a potential adverse reaction. The following is not intended to be a threat, but the reality is that if industry is so unhappy about the application of the law and its regulations, it will speak out. The danger is that ill-intended pressure groups may capitalize on this, use it, and embark on a campaign to defeat the legitimate purpose of the law and its regulations.

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In summary and conclusion, the Canadian government should, as in the past, be concerned about maintaining a minimal degree of self-sufficiency for the supply of munitions for the armed forces. SNC Industrial Technologies is the only government-designated munitions manufacturer in Canada. Its skills, expertise, and facilities are unique, and it has elaborate self-control measures in place to meet the intent and spirit of the law and its regulations. It is currently being challenged by diminishing Canadian requirements and is relying heavily on increased exports for its survival to police and paramilitary forces.

To do so, we must have the support of the appropriate government agencies to assist and facilitate our access to international markets. We want to maintain munitions self-sufficiency in Canada; keep the munitions industry and its 700 related jobs in Canada - 700 is only for us; be a successful international player within the limits of the export regulations; decrease our dependence on Canadian military requirements; continue to self-regulate our acquisition, use, and storage of firearms and munitions; and submit an auditable plan to the minister on a regular basis through the provincial controller. For this, we need the Canadian government's understanding and support.

Thank you very much.

[Translation]

The Chairman: Thank you, Mr. Daigneault. Are there any more presentations?

Mr. Roberge.

[English]

Mr. Roberge: Mr. Chairman, honourable members of the subcommittee, invited guests, please read into my heart and not into my typos.

The Canadian Supporting Arms and Ammunition Association, CSAAA as it is referred to sometimes, is an industry group that consists of importers, manufacturers, wholesales, sales agencies, and retailers of products related to the shooting sports in Canada, including hunting. Our members represent an industry that distributes a huge and varied range of products and services that provide millions of Canadians with a safe and rewarding activity.

We've opposed Bill C-68 since the beginning and our position has not changed. So with all due respect, Mr. Chairman, this is our last kick at the cat.

Certain sections of Bill C-68, such as the bureaucratic fee structures on businesses that are related or indirectly related to our sport, have and will have a negative impact on our industry. A general ``I don't care'' attitude has elevated from the Department of Justice in reaching gun control objectives that have never been outlined and substantiated reasonably and responsibly. The whole process has impeded our industry and our members, and if this bill passes it will affect the ability of our members to remain viable within our industry.

While we're in favour of any initiative to deal with and attack the problems associated with firearms related to violence, we are of the opinion that Bill C-68, in its present form, will do very little to address these problems. In fact, certain provisions of Bill C-68 will, we believe, create many more problems than it will deal with.

This government must recognize that we are not the architects of crime in this beautiful country of ours, but a mechanism to prevent and the very thing that does prevent increased crime. We deliver the controls that we impose on ourselves and the very aspirations that this government is trying to achieve.

We and you already have control. We are the most regulated industry in this country. Perhaps looking at other mechanisms might succeed in making heroes out of all of you.

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God knows, sir, we've learned that intense prohibition leads to increase in criminal activities. Prohibition on alcohol, and most recently the increased price on tobacco that resulted in blatant smuggling across the St. Lawrence River, showed the police powerless to enforce the law.

Recently it was announced by the police department that stolen firearms have increased from 6.3% to 16%. Intense legislation will do that. The more legislation, the more crime; and this ends up working against public safety.

In January 1991, Ontario Out of Doors magazine, a division of Maclean Hunter, conducted a survey covering the value of the hunting market in Canada, with its main focus on Ontario. The survey reported that there were 1.7 million active hunters in Canada, with a total of expenditures of approximately $1.1 billion.

Before legislation hit our industry, it was reported that over 730,000 people were interested in becoming active hunters. This information does not include the use of other products and services necessary to pursue the sport - items such as tourism, pick-up trucks, all-terrain vehicles, snowmobiles, hotels, motels, restaurants, camps, lodges, resorts. Jobs, jobs, jobs. Expenditures, including those on these items, certainly puts the number closer to $2 billion. In fact, I have a report from Environment Canada that reported in 1991 that it was closer to $6 billion. From our standpoint, we estimate our industry at $2 billion.

At about the same time, in 1993, the RCMP reported to the Solicitor General that a total of 7,500 businesses held a licence to sell firearms in Canada.

In the final step of these procedures, we are provided with a draft on firearms and requested to limit our brief to this draft. What's most important to our industry in the draft is the specific area dedicated to the regulatory impact analysis statement. I note the comments ``the statutory provisions to achieve the public safety objective of the act''.

In business, any objective that costs money to implement and does not substantiate itself with specific accomplishment is called ``blue skies''. In other words, in business this draft would be the laughing stock of the industry, which is precisely what Bill C-68 means in most parts. It's like going to the president of my company and saying ``I need $100 million to save lives'', and the president asks, ``Well, how many lives are you going to save?'' and you say ``We're not sure.'' That's what Bill C-68 represents to us.

Under small-business impact, your report indicates that in 1995 there were 6,378 firearm business permits issued. We note a drop of 1,122 businesses from 1991 already. And most recently the RCMP reported that in 1996 only 5,000 firearm business permits were issued. We now have a total drop of 2,500 businesses.

Canadian Tire - if they chose to close up shop in Canada today, it would be a disaster. They only have 400 stores. So I draw the comparison.

It's fair to point out that over half of our industry members have left in the last year. And yet ironically, this government continues to call for jobs. In fact, any resemblance of an industry left after this will be conducted directly from the United States, eliminating any middle control that this country had.

I'm now convinced, Mr. Chairman, that our industry and its members provided a legitimate movement of firearms through this country, and this government has successfully terminated it. Furthermore, I believe this government has shot itself in the foot.

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As for imports, Stats Canada now reports that firearm imports decreased by 30% between 1995 and 1996, an obvious signal of increased smuggling and increased stolen firearms - what we've been saying all along.

The draft goes on to say that extensive consultations were undertaken. I now can conclude without reservation that any witness to this consultation can only be termed as the three monkeys presentation: we have ears, but we don't hear; we have eyes, but we don't see; and we really hate to talk to you - a ``devil may care'' attitude.

None of our recommendations were ever considered or implemented. Actually we recognized early in the consultation that a hidden agenda existed, and unfortunately we were not privy to that information. What you have before you, sir, was outlined long before consultation procedures ever began.

A recent release by a well-known outdoor writer reports that gun control in Canada as such may have nothing to do with crime and public safety for this country, but may be merely a smokescreen employed by this government to implement a UN resolution introduced as far back as May 1995.

Why would members of the federal Department of Justice be involved in executing this resolution? Why not the Department of Defence? Did this government label the Canadian firearm community as bad people in order to successfully implement its own UN resolution? Is this a tactic fashionable in the Department of Justice?

We believe the regulations we have been asked to respond to are based on principles and not facts. To support this statement, I quote from under ``Anticipated Impact'':

Businesses whose activities involve firearms and regulated weapons will face some additional or enhanced requirements, but their current operations should not be unduly affected.

I must say these regulations appear to be based on ``Rock-onomics'', because - and I quote again - ``the precise number of the individuals and businesses affected is unknown''. So how can you state that businesses will not be duly affected if you have no idea how many there are?

On compliance, after this legislation has destroyed the industry, including the hunting and shooting sports market, what's left to comply? Will the criminals comply? Not likely. The police don't need to comply; they have their own regulations. And as far as the military is concerned, what more can I say?

In summary - and we repeat - provisions of Bill C-68 covering fee structures on businesses will mean serious damage to if not the complete removal of an industry. We are opposed to additional costs based on ``blue skies'' strategy.

We are convinced the Department of Justice financial framework, including the fee structure, is flawed and is based on assumptions that cannot be validated. The cost of registration of personal property will further reduce the number of existing and potential customers for our members. No one will be left to comply.

Previous firearms control legislation was not given adequate time to provide information for effective gun control. Handgun registration introduced in 1934 has been a complete failure, and that's been reported by the police. The smuggling of illegal firearms is not an industry-related problem, yet additional import-export regulations will penalize our members and increase unnecessary business costs.

We also believe this government is not being truthful with Canadians on gun control and is mounting another mistake that will haunt them when it comes time for the people of Canada to vote.

Lobbying is not our forte and certainly isn't mine. We were invited here - and we thank you - as witnesses, to speak. All of the shooting sports industry support trade as a major component of what this government describes as a gun lobby in Canada. In truth, our industry is comprised of predominantly small businesses, employing less than 20 employees, engaged in import and export. If our industry had a larger manufacturing base, no doubt this issue would have come and gone long ago.

Unlike some groups that are funded by government services and detached from success or failure, our motivation goes much deeper. If we fail to convince this government of its action - and I quote President Bush, ``read my lips'' - we are losing jobs as we speak.

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I am truly disturbed by this government's stubborn position, particularly when I hear of the much-touted Liberal platform.

However, what this country does have is a large constituent of firearms owners. They are the ones the government will have to face in the next election. That, Mr. Chairman, is our hidden agenda.

I've spoken about ``blue skies'', and now I'd like to relate some facts to you. This has occurred in the last year or so. Comparing 1995 to 1996, the proposed legislation has caused the sale of rifles and shotguns, which is predominantly our business, to drop 50%. The proposed legislation has caused the number of hunting licences sold in 1996, compared to 1995, to drop 40%.

How many times have we heard the coalition and this government say to us, ``We're not out to get the hunters''? Well, what is this showing you? What is the number of businesses selling hunting and shooting sports-related products that have folded or moved south from 1991 to 1996? It's 2,500. In the process of destroying an industry, did it occur to anyone to conduct an industry impact study? We're talking about what was a $2 billion industry, and today it's less than $1 billion. How many jobs have we lost? Over 10,000 and counting.

Has this government ever considered that if access to firearms has become so restricted, it will lead to an increase in gun smuggling? Was a study ever conducted to show that? We already know that stolen firearms are up to 16% from 6%, and we know smuggling is up 15%. What's causing this? Is there some kind of relationship there? We're concerned about the loss of lives as a result of increased smuggling of firearms and stolen firearms.

Also, as a result of increased costs, firearms owners will simply dump their guns. They're not going to spend any money registering an Enfield they've had for 50 years. They're just going to dump it, which is going to make the situation even more volatile. It's an exact contradiction to what the bill's purpose is all about. I say quo vadis.

I have included with my presentation an article written by Steve Cook; it's on global gun control and it provides information. If you question the research, he has the back-up documents and he'll be pleased to provide you with that information.

I believe Canada's role with the United Nations is admirable. I just wonder about the method. It leaves a lot to be desired. The firearm community shouldn't be paying for it; it's part of this whole cost.

The last article is in reference to the gun legislation that was introduced in Australia, which most of you know about. It's come to our attention that the Australian government will compensate the gun owners for the price or close to the price they paid for their firearms that have become outlawed. Manufacturers, importers, distributors, and retailers have to document their losses of profits that have been caused by the loss of business and will be compensated by the Australian government for same.

Furthermore, the Australian government will buy all guns in inventory that are in the trade channels - manufacturing, import, wholesale, retail - including all parts relating to the outlawed guns. That, in my opinion, is civilized legislation.

We are aware that at no time has compensation been offered to persons or businesses who suffered severe losses after the introduction of Bill C-17.

Our question to this panel, in addition to everything else, is under what law or regulation can the Canadian government deprive Canadian citizens of their private property as our counterparts in Australia do? We respectfully request an answer to this question.

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That, Mr. Chairman, concludes my presentation, except to note a letter written by the Ontario Federation of Anglers and Hunters, a federation with 90,000 subscribers. The president wrote a letter to Mr. Chrétien and Mr. Chrétien has not replied. It was sent on August 13 and he has not replied to it. Basically it outlines why the 2,000-page document was not provided when it was requested. I just wanted to make a note of that.

Thank you very much.

The Chairman: Thank you very much, Mr. Roberge.

Mr. Polyzos, please.

Mr. Polyzos: You caught me off guard, Mr. Chairman.

The Chairman: Take your time.

Mr. Polyzos: Mr. Chairman and hon. members of this committee, my name is Thanos Polyzos. I'm co-founder and vice-president of Para-Ordnance Manufacturing Incorporated.

Our company was established in 1985 and our products are handguns. We employ approximately 70 people out of our Ontario manufacturing facility and another 45 persons at our investment casting foundry in Quebec.

Permit me to proceed directly to those parts of the regulations before you that pose a special concern to us with regard to the continued viability of our corporation.

The first part of these regulations deals with firearms licences, and I would like to direct your attention to ``Prescribed Purposes'', section 21, which starts at page 8. Regretfully this section contains no provision to allow us to continue to manufacture existing products that have been or will be classified as prohibited devices or firearms, as defined in subsection 84(1) of part III of the act itself, and for which we do not have an export permit, as envisioned in paragraph 21(k) on page 9.

Our company develops, manufactures, and markets products of its own initiative. Therefore we do not produce to fill foreign orders for which we would have obtained an export permit prior to manufacture. Typically a good part of the orders we receive are filled from stock that is manufactured in advance on the basis of our sales projections for the coming months or year.

Without the addition of a regulation that would accommodate this type of operation, we could not continue to produce the high-capacity magazines for which our products were designed, nor would we be able to produce two models of pistols that have barrel lengths of less than 105 millimetres.

Under present legislation, by virtue of paragraph 95(3)(b) of the Criminal Code, our high-capacity magazines are exempt from the sanctions against their manufacture, possession, and export. When this exemption was drafted into what became the final version of Bill C-17 - I believe you were chairman of that committee at that time - it was thought quite reasonable, given that literally better than 99.9% of our products have continually been manufactured for export.

We firmly believe that the provision of such an exemption in these regulations for our high-capacity magazines, our pistols with barrels measuring less than 105 millimetres in length, as well as the barrels themselves would not be defeating the objects of this legislation, while permitting us to continue to operate in Canada.

I need to go off text for a second. I guess we've all had this nagging feeling that we may have omitted something, and I feel something was omitted from the text that was submitted to this committee.

The barrels themselves - only the barrels, without any other part of the gun attached to them, something identical to what was showed to you by Mr. Daigneault from SNC - would in themselves be a prohibited device. If we needed to have one heat-treated and we just sent it out for heat-treating, the heat-treater would have to undergo all the requirements of the regime as enacted.

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It would be an onerous burden to think that something as innocuous as a machined barrel - which Mr. Daigneault is kind enough to pick up and show this committee once again - all by itself would cause our operations to cease.

Permit me this detour, and I'll go back to the text.

At this juncture, we would also like to ask for some kind of provision within the ambit of the prescribed purposes section that would permit us to purchase an inventory hollow-point ammunition for testing with our pistols. This is needed because a good portion of those who use our pistols - namely, law enforcement and military personnel - do so with hollow-point ammunition. Function-testing our pistols with the same kind of ammunition is vital to the manufacture of a quality product.

Further, in the regulations on page 11, subparagraph 23(1)(d)(i) mandates the keeping of an inventory of non-operable components of firearms, which would include magazines and barrels. Again, this is a very onerous provision for a manufacturer like ourselves, with no provable benefit toward meeting the objectives of this legislation. If we include prohibited ammunition here, that would also prove unworkable.

Members of this committee, I ask you to please remember and understand that we do not deal with the public, and as such cannot pose the same kinds of safety or security concerns this portion of the regulations hopes to address.

The section on storage, display, and transportation starts at page 23. I'd like to direct your attention to paragraph 3(c) which mandates segregation of our different classes of products - non restricted, restricted, prohibited - with regard to storage.

Once again, this regulation seems to address concerns the legislators may have had with anyone who deals with the public. That is clearly not the case with our company. In our circumstances, this would only prove to be another onerous, unworkable provision, with no attendant benefit.

Mr. Daigneault also spoke of security measures at SNC, approved by several law enforcement agencies. We too have extensive security measures in place that have been inspected and approved by the law enforcement agencies empowered with licensing us on a yearly basis.

We believe that with regard to items in and of themselves, these provisions should not be applicable, at least to manufacturers like ourselves that don't deal with the public. There is no risk of anyone walking into our place from the street, and picking up what is now a prohibited device, a short barrel, because it's lying unattended on some kind of shelf. We have all our goods properly secured, if not segregated, as this particular set of regulations would envision.

I'd like to have you direct your attention to page 30 of the regulations. Section 12 of this same part of the regulations - meaning storage, display, and transportation - would make it impossible for us to ship a high-capacity magazine or a barrel shorter than 105 millimetres in length without taking the extreme security measures outlined therein. Under section 10, on page 28, we will be able to ship the prohibited operational handgun, with the barrel already installed, under the same conditions as we do at present.

The next part of these regulations I wish to address starts at page 39. It deals with the authorization to export or import. Specifically, on page 40, paragraphs 3(1)(j) and 3(1)(k) respectively deal with requirements to provide the name and licence number of the eventual carrier to be used for the export of goods, and information as to whether or not the goods being exported at present will ever be imported back into Canada.

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These pieces of information may not have been determined at the time of an application for an authorization, and their effect on a company's ability to export should be curtailed.

Let me turn to section 4 on the same page. The following observation may be due to the lack of a proper understanding of the objective here. We would be required to label our shipping containers, contrary to the provisions of the part on storage, display, and transportation.

I guess we could probably comply with either method, but some clarification may be required on this point. It may be that this committee has already dealt with this issue at another time during these hearings, and I would not wish to waste any more time on it.

On page 42, paragraph 7(1)(h) seems to impose an obligation to know when something controlled by this act may be shipped to us from abroad. Mr. Chairman and members of this committee, it is rather difficult to know when a back-ordered item might leave a supplier's warehouse, or, in our case, when some foreign customer decides, without instructions from us, to bypass our foreign warranty stations and send something back directly to the factory for inspection.

A point of some concern is raised in section 9 on page 43. This section contemplates the destruction of forfeited goods that were not caused to leave from a customs point, within the 10 days specified in subsection 47(4) of the act, after a failed attempt to properly import them. Allow me to point out that this may not be sufficient time to obtain recourse against a refusal to authorize the importation, and it would thus deprive those affected of due process.

Most disturbing are the fees contemplated for the issuance of export authorizations, as outlined in the last part of these regulations, inasmuch as it cannot be said that the objective is to provide for any measure of increased safety to the Canadian public.

It is rather astounding to me that whereas a great number of countries in this world are always attempting to bypass trade agreements - by subsidizing or otherwise aiding their exporters - and oftentimes are willing to enter into trade wars with one another, or litigate such issues before international trade tribunals, Canada would in fact consider penalizing its exporters of one particular commodity: firearms.

I respectfully submit that the demonization of our industry should stop at some point, and this tax on exports may be it.

I know that some will argue in favour of user fees. Let it be so for all exporters. Others will argue that as a direct result of this legislation, special handling is required for firearms, and this will justify the fees to be charged.

There are surely other commodities that are not subjected to fees, even though they require special attention or handling by agencies of the government, such as controlled substances and pharmaceuticals, chemicals and nuclear materials.

In our 12 years of operation, we have never had an incident that could have been averted if such measures for special handling of our exports by Canada Customs were in place. I personally do not know of any other manufacturer that may have had a different experience.

Our company and its employees would like to thank this committee for its time and attention to the issues we have raised here today. We would also like to state that we look forward to the necessary and warranted revisions and/or additions to these regulations, which will permit us to continue with our endeavours to keep on contributing to the Canadian economy, principally in Toronto and Montreal.

Thank you, Mr. Chairman and members of the committee.

The Chairman: Thank you very much, Mr. Polyzos.

We now thought we'd like to welcome Mr. Taylor. Welcome back, sir. We certainly would invite you now to make a presentation.

Mr. Alan Taylor (Vice-President and General Manager, Savage Arms Canada): My apologies for being late, but I was at the wrong committee room.

Mr. Chairman, honourable committee members, Savage Arms Canada manufactures .22 calibre rimfire rifles in Lakefield, Ontario, and has been in business since 1969. We produce 19 different models consisting of bolt-action repeaters, semi-autoloaders, magnums, smooth bores, heavy barrels, targets, biathlons, silhouette and youth models. Most of these models come in both right- and left-hand versions.

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In 1996 we exported 95% of our product. Our major markets are in the U.S.A., Europe, South and Central America. At present we have a staff of 49 employees, and this will be up to 65 by mid-May.

Let me address the issue of export-import fees. We're strongly opposed to any export or import fees. If we look at our forecast for 1997, this cost will be in excess of $15,000. At one point it was 240,000....

Since I gave this number to the gun control implementation committee, we have been told that one of our major customers, K Mart in the U.S.A., are now looking at eliminating their warehouse, and the supplier will be responsible for shipping to the individual stores. This would magnify the export fees, as K Mart has 2,300 stores in the U.S.A. If we ship in lots of five, it would increase our cost by 4%. At this time we enjoy a competitive edge over our U.S. competition, but with this added cost and a slight change in the Canadian dollar, we would lose that competitive edge. That would thus lead to a loss of jobs.

These extra costs will force the closure of our company, resulting in lost jobs. The government may be trying to issue a tax that will bring in thousands of dollars, but will lose millions of dollars in payroll and taxes in the Peterborough-Kawartha area. The small dealer and the individual will be penalized for sending their firearms out of the country, and bringing them back. If they purchased one firearm, it could increase their cost by 4% to 20%. The way I interpret the custom fees, someone who sends their firearm out of the country for repair would have to pay another $20 going, and $20 coming back.

The hunting and shooting industry is a legitimate business that is being taxed with an export tax when no other business in Canada has to pay these fees.

We have shown the implementation committee that we can report to them all exports, including serial numbers of firearms, on a regular and as-required basis. This can all be done electronically, and there would be no need for inspection at the border, which could create a nightmare for both Canadian Customs and trucking firms.

How can you give millions of dollars to some companies to promote exports, and then tax the firearms industry, the only industry in Canada you tax for exports? It's unbelievable.

I also have an attachment from the owner of our company. I will not read that; it's before you to read. It just basically says that if we're not competitive, they move out.

I'll also be very surprised if the Canadian government will be allowed to add an import tax on firearms because of NAFTA. I've talked to the U.S. NAFTA people, and they have concerns about it. They don't understand how you can do this. So somebody better be looking into this.

Let me turn to the licensing of carriers. The licensing of carriers is also a major concern in the firearms industry. The carrier is now going to have to be licensed to carry firearms. Our concern is the rules governing a carrier that has this licence; they must have to do something more, or there wouldn't be a reason to have a licence. No one has told us what this is, but if we have trouble with transportation, we shut down our industry.

There's been a minimum of 200 firearms shipped in Canada in 1996. This includes imports, exports, shipments from distributors to dealers, and shipments for repair.

Mr. Ramsay (Crowfoot): Your brief says 200,000.

Mr. Taylor: Okay, I'm sorry, what did I say? I'm sorry, that should be 200,000. I read poorly, too. Thank you.

The Chairman: Good point.

Mr. Taylor: I have contacted most of our distributors, and all our major dealers, and only two firearms have been missing or stolen in 1996. That's 0.001% of the total estimated shipments for 1996. I'm sure there have been a few more, but the percentage is extremely low.

It's hard to believe that by licensing carriers, one would see any change. Why should carriers in the firearms industry have to incur costs for a law that cannot make any significant change to the perceived problem?

Our Minister of Justice, Mr. Rock, has stated that the firearms industry and users will have to pay all costs of running this program. This would include Canada Customs, police registration offices throughout Canada, the building and staffing of the new firearms centre in New Brunswick, permit transportation, staffing fees in the provinces, and firearms dealer fees to handle the registration of new and transferred firearms.

Our Minister of Finance, Mr. Martin, states that unless Bill C-68 can pay for itself, it will not be implemented. Now there's a contradiction in terms, if I've ever saw one.

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Registration and possession acquisition certificates.... The government has admitted that it will lose money during the initial registration of the estimated eight million firearms and three million applications for a possession or a possession acquisition certificate.

Starting in 1998, the fee to register your firearms will be $10 and increased to $14, $16, and $18 in succeeding years. After that, for all new registrations it will be $25. At this point the implementation team has no idea what the true cost will be.

The cost of processing the FAC, now being replaced with a possession or possession acquisition certificate, has been estimated by the justice department to be $82. For those who do not wish to purchase any further firearms the price will be $10 in 1998, $45 in 1999, and $60 in the year 2000. For those wishing to purchase firearms, the cost will be $60. Again, the government will be losing.

Last year Henry Vanwyk, director of the firearms control task force, stated that the payback cycle was expected to be fifteen years. If one looks at firearms sales over the last five years, one has to question the government on how it will recoup the cost in fifteen years. From 1990 to 1995 the sales of firearms in Canada dropped from 230,983 units to 112,927 - a 51.1% drop. In 1996 through November, total imports and Savage Arms sales for 1996 were 76,419. That's another drop of 32.3%. The Canadian business of Savage Arms (Canada) dropped 56.2% in 1996.

Over the last three years most of the police forces and the RCMP have re-equipped their officers with new models, and that decreases public sales even further. The formula used for these calculations was to count the import numbers from firearms statistics put out by the research and statistics section of the Department of Justice, plus the sales of Savage Arms (Canada). The reason I use Savage Arms is that we are the only significant manufacturer of firearms that also sells its product in Canada in any volume.

The FACs granted in 1991 to 1995 were 199,000, 288,000, 35,000, 49,000, and 46,000, for a total of 619,000. That will increase when one has to get a possession certificate, but it's a long way from the three million that the government expects to get in registrations.

Now we have a new gun law that is going to cost the firearms industry, the hunters, target shooters, collectors, and general public more dollars - for what? The firearms industry and other concerned citizens have provided the Department of Justice with all types of evidence that violent crime has been dropping and that gun control, in any form, has not proved effective since the 1930s.

The government, on the other hand, has not provided any evidence that further gun control will make life safer for the Canadian citizen. I have to assume they do have statistics, because they entered into a contract with Plains Research in March of 1995 to study the effects of the 1977 and 1991 amendments to Canada's gun control laws on firearm deaths and other firearm incidences, the effects of the enhanced FAC application process, and the effects of the legislative changes on firearms used in criminal activity.

The Library of Parliament requested a copy of the final report related to this projection on December 6, 1995, and on December 14, 1995, submitted a formal request for a report under the Access to Information Act. Access was virtually denied, with only eight pages being released from the entire report of over 2,000 pages. The rationale listed for the denial of release was section 22 of the act, which allows for the head of a government institution to refuse to disclose information if the disclosure will prejudice research results.

This leads one to believe this Liberal government has something it doesn't want the other political parties or the general public to know. Mr. Rock has been quoted as saying he's not sure that his gun control bill will have any effect on violent crime with a firearm. I believe Mr. Rock knows this law will have no effect on crime, but it will take firearms out of the hands of the general public, which was his main goal in the first place.

We again ask our justice minister and the Liberal Party to scrap this bill and do something constructive with our judicial system in how criminals are sentenced and paroled. I do hope more is done about our concerns this time than was done in our last presentation to this committee.

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I thank you.

The Chairman: Thank you very much, Mr. Taylor.

I will now go to questions from members of our subcommittee, and we'll begin with Mr. de Savoye.

[Translation]

Mr. de Savoye (Portneuf): I want to thank Messrs Roberge, Polyzos, Taylor, Daigneault, Héroux and Renaud for sharing with us their concerns about the firearms regulations. I sensed from a few of the presentations that they have some serious concerns about the ability of the legislation to achieve its stated objectives.

I attended the vast majority of the hearings leading up to the passage of the legislation. At the outset, I was sceptical because it is in my nature to be critical and sceptical, but I must say that as the hearings progressed and as witnesses as competent in this area as yourselves expressed often vastly different viewpoints, a consensus of sorts emerged and I became convinced that the bill was well-founded and well-intentioned.

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However, because it is my job, I must ensure that the regulations that are adopted will not prevent individuals from practising their chosen sport or prevent industries from carrying out essential activities as efficiently and rigorously as possible.

Today, you have come to share your concerns with us. I greatly appreciated Mr. Daigneault's and Mr. Héroux's presentations in that they identified the activities of their company which do not appear to be covered by the regulations as drafted. Mr. Taylor, Mr. Polyzos and Mr. Roberge also raised similar points.

I understand that your companies have already adopted comprehensive security measures. You list the measures you have taken in your submission, Mr. Daigneault, namely:

[English]

24-hour, year-round, on-site surveillance vaults for storage of weapons. I hope the minister won't put that in the regulations for everyone.

[Translation]

You have brought in and perfected your safety practices over the years and it seems to me that it would be very difficult to have wall-to-wall regulations that could address all of these concerns. That's why I was particularly interested when you recommended, among other things, that businesses, and I quote:

[English]

be allowed to submit a self-regulating and control plan...to the minister through the provincial controller for approval and monitoring.

[Translation]

In my view, this is a highly constructive approach. Messrs. Taylor, Polyzos and Roberge, if the minister were to consider such an approach, would you be receptive to it?

[English]

Mr. Taylor: I was not here to hear what he had to say, so I can't really answer the question. I'm sorry.

Mr. de Savoye: Mr. Polyzos.

Mr. Polyzos: Yes, I would agree in principle. I think this is happening as we speak. Basically all our corporations are subject, as I said in my testimony, to the oversight and regulations of local enforcement, whether it be municipal or Ontario Provincial Police, as opposed to the Sûreté du Québec.

In fact, these people come in and make sure that what we have is adequate by today's standards. They make suggestions if they feel there are better ways of securing certain aspects of our business. One could say that what transpires in these meetings and their outcome is a plan that could be put to paper and submitted to the provincial authority, whoever it might be that is designated by the Attorney General of Canada to approve such plans. I would see no difficulty in that regard.

Mr. de Savoye: Mr. Roberge.

Mr. Roberge: I'd have to read it over and have my colleagues look at it before I could give an answer. We are regulated. I think we provide a service the government has nothing to do with. We regulate ourselves, not from government motivation but from fear. Our retailers protect themselves, as does our industry, for obvious reasons.

I think the regulations we place on ourselves are sometimes more stringent than those the government places on us. However, having said that, we abide by the laws, the rules, and the regulations the government passes down. Our argument right now is that we don't need additional regulations that really won't make any difference. I'd like to see them. I can't make any commitment to that at all.

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[Translation]

Mr. de Savoye: I wanted your opinion, not a commitment at this time.

Mr. Héroux, I'm curious. You referred to FX ammunition. What exactly is that?

Mr. Héroux: In fact, I have several boxes of this ammunition with me to show you, but I would prefer to let Mr. Renaud, a specialist in this field, explain to you just exactly what FX ammunition is.

Mr. Denis Renaud (Technologist, SNC Industrial Technologies Inc.): Specialist is a very big word. FX ammunition consists of plastic casings containing a coloured liquid. Development of the product was started several years ago, in 1990 in fact, at the request of police and armed forces.

At the time, response units had virtually no way of conducting realistic training exercises, that is force-on-force and person-to- person training. At the time, they asked us whether it would be possible to develop a cartridge to be used for this type of training.

Basically, we're talking about a paint ball. A paint-filled cartridge is used as ammunition in a conventional firearm. As Mr. Daigneault demonstrated earlier, the firearm barrel is converted to fire this type of ammunition. A firearm that has been converted for training purpose cannot fire live ammunition.

A number of safety measures are followed when a barrel is converted. An opening along the side of the barrel prevents the firearm from accidentally discharging when loaded with live ammunition. The pressure needed to drive a conventional projectile through a barrel would be greater than the pressure required to break the casing in order to discharge the projectile. This is a safety consideration. Basically, what we have is a prefragmented plastic casing. I can pass a few of them around, if you have no objections.

Mr. de Savoye: Are they dangerous?

Mr. Renaud: This is real ammunition, but it poses no danger whatsoever.

Mr. de Savoye: That's what I wanted to hear.

Mr. Renaud: There is absolutely no danger. If you look closely, you will see that this ammunition has a plastic casing. There is a plug on the bottom and a coloured liquid inside. If you look at the case, you will see that it is manufactured in two parts. The white part is made of white plastic, while the conventional case is made of brass. The brass case and white component, or sabot, are fired from recycled service weapons. That is the sole purpose of these cartridges. They are quite simply sophisticated paint balls for service weapons.

Mr. de Savoye: Therefore, if I understood you correctly, they are ammunition without really being ammunition. If a person is hit by this projectile, he will not be wounded. Is this type of ammunition dangerous?

Mr. Renaud: It can give a person a jolt. People need to wear some protective equipment because the face and eyes are highly sensitive areas. When a person wears appropriate equipment, there is practically no danger whatsoever.

Mr. de Savoye: What you're telling me then is that this is not a toy. It's a serious type of ammunition for which you have devised security measures so that police, paramilitary or military forces can use it for training purposes, but without placing their personnel in any danger.

Mr. Renaud: Precisely.

Mr. de Savoye: You're also saying that the firearms used with these cartridges cannot be reconverted and cannot fire regular ammunition.

Mr. Renaud: The firearms can be put back into service. In fact, what we do is sell the barrel as such, not the firearm. We only sell replacement barrels and only to recognized police and military forces. We do not sell them o the general public. We have always refused to do that, precisely because of the bad press that we could receive and also because of the responsibility associated with a product such as this. We have always limited ourselves to satisfying police and military requirements.

Mr. de Savoye: Do you keep a record of the arms you sell and the people you sell them to?

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Mr. Renaud: Currently, all of our order forms list the names of the people we sell to. Occasionally, we receive orders by fax, but on police force letterhead. We also need someone... We also sell through distributors on the U.S. and international networks.

Mr. Daigneault: He wants to know if we keep a record of the serial number.

Mr. Renaud: The serial number of the firearms?

Mr. Daigneault: No, of the barrels. Do we keep records of the barrels that we manufacture?

Mr. Renaud: We do, but it is impossible at this time to trace the owners. I'm sorry, but we can't trace the owner with the serial number at the present time.

Mr. de Savoye: Thank you.

The Chairman: Thank you, Mr. de Savoye.

[English]

Mr. Ramsay.

Mr. Ramsay: Thank you, Mr. Chairman. I'd like to thank our witnesses for their appearance and their testimony today.

I'm looking at the brief you presented, Mr. Daigneault, which you read into the record. On page 8 you state:

The following is not intended to be a threat. But reality is that if industry is so unhappy about the application of the law and its regulations, it will speak out. The danger is that the ill-intended pressure groups may capitalize on this, use it and embark on a campaign to defeat the legitimate purpose of the law and its regulations.

Do you see any ill-intended pressure groups here today?

Mr. Daigneault: Not to my knowledge.

Mr. Ramsay: Do you know of any you could tell the committee about?

Mr. Daigneault: No.

Mr. Ramsay: When the law first began, twenty years or so ago, it went after the machine-gun owners and the automatic firearm owners. The people who were firearm owners but didn't own those types of firearms weren't concerned. Then, of course, the laws kept encroaching. All of those long guns that significantly resembled a military firearm, including .22s, were banned. Now this bill is banning 58% of the legally acquired and lawfully held hand guns. They're standing at your door, and because they're standing at your door and the regulations in the bill itself will have a negative impact upon you economically, you're here.

When I read that, I wonder whether the groups that use firearms in a legal way are willing to sacrifice. It seems to me that is the intent, or at least that's my understanding of the statement you've made. I wanted to clear it up before I got into some of the other areas. Go ahead, if you wish to comment.

Mr. Daigneault: No, no, that's fine. If there's a need for a subcommittee to review the regulations, I figure that in a democratic country like Canada, the law and its regulations

[Translation]

do not sit too well with all Canadians.

[English]

In my mind, some people out there must have intentions that are not as legitimate as our intention in producing munitions or handling firearms. If those people did not exist, we probably wouldn't need a law or regulations like this. What I don't want to see is some of these groups, whoever they are, wherever they exist, embark on a campaign using some of the arguments we are using, which we feel are legitimate. That's the intention behind this.

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Mr. Ramsay: Okay. Obviously the government is regulating your business. They are regulating other businesses as well, through the bill and the regulations. They have moved into that area where over half of the handguns registered in this country are being prohibited, without statistical justification to do so.

Do you feel that if they're prepared to do that, they need any statistical justification to regulate your department or your business - as they are? And I would like to ask the more important question - more important to the committee, I think, and certainly to me: What economic impact will this have upon your industry, upon your business?

Mr. Daigneault: I haven't figured out the number of imports and exports multiplied by the amount that will be charged. I don't have those numbers with me.

But one very significant concern we have is that today there are an awful lot of our employees who are working with parts of weapons that will be considered prohibited, who would never have any interest in acquiring a weapon. If the regulation goes ahead the way it is, everybody in our company who will be in contact or will handle one of these prohibited parts - which in itself is just another metal part, to their mind - will have to go and follow courses to handle weapons, and be equipped with an acquisition permit.

Why would we give anyone the ability to understand how a weapon functions, and the ability to purchase a prohibited weapon, if they otherwise would never have been given that ability? We are forcing them to get interested in weapons and eventually possess one. I don't think this is the purpose of the law and the regulations.

Mr. Ramsay: Will this bill and the regulations passed as they are - and we've got more coming, because this doesn't deal with the registration portion of Bill C-68 - have a negative economic impact upon your business?

Mr. Daigneault: Yes.

Mr. Ramsay: Have you consulted with officials of the justice department and expressed that concern to them?

Mr. Daigneault: Recently, yes.

Mr. Ramsay: Was it before the regulations were tabled?

Mr. Daigneault: No.

Mr. Ramsay: You had no consultation with them before?

Mr. Daigneault: No.

Mr. Ramsay: Have you been assured by anyone in the department that your concerns would be looked at, and/or addressed?

Mr. Daigneault: Yes.

Mr. Ramsay: Would you share with the committee what you were told?

Mr. Daigneault: I'll ask Mr. Héroux to help, as I didn't actually spend the whole day with those people when they came to our facility, but Mr. Héroux did. I welcomed them, gave them an indication of what our company was, and then left them with the technically qualified people. Normand?

[Translation]

Mr. Héroux: We were given some information that could be of assistance to us. Some provisions of the legislation could ultimately help us. For example, section 97 allows the Minister to make some exemptions.

However, we have yet to know how these provisions will apply and which regulations will flow from this legislative provision. That's why we can't really go along with the minister...

If each person who accepts a temporary contract with the company and who is called upon to handle firearms parts like those shown to you today must take courses and obtain a permit, we don't see how we will be able to meet our contract deadlines.

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If we have to contact the Minister to request an exemption for the person in question, how much time will this take? We are unfamiliar with the process. Even though we were given some indication of how things would proceed, we feel that our hands are tied when it comes to complying with some very stringent provisions.

[English]

Mr. Ramsay: Okay, thank you.

The Chairman: Mr. Kirkby.

Mr. Kirkby (Prince Albert - Churchill River): I'd like to thank the witnesses for coming today and giving us their presentation.

Are your employees currently required to go through any kind of police screening or any kind of course before they're employed with you, other than just what your company does? Could you tell me what process you go through when you're hiring?

[Translation]

Mr. Héroux: First of all, we must comply with the provisions of the Explosives Act which stipulate that all employees who work with explosives or who control their handling in a factory must have an explosives permit. Some control is therefore assured by the provincial police force.

Moreover, people who work with firearms must take courses and undergo psychometric testing to determine if they pose any kind of threat. They are subsequently monitored in case they experience any special problems in their personal lives or in case someone feels that one of his colleagues is undergoing some problems. We even stepped in once to stop an employee from handling firearms in order to give him time to resolve some personal problems because in our opinion, he posed a potential danger to his colleagues.

[English]

Mr. Kirkby: Okay. Mr. Taylor and Mr. Polyzos - if you could answer the same question.

Mr. Taylor: When we hire an employee, they have to get an FAC, but the police will not do a study on us. We're not required under the regulations to have the police do a criminal check on our employees, but employees do have to get an FAC, and there is some checking done through that. They do start work at the plant before they get the FAC, though.

Mr. Kirkby: Okay. Mr. Polyzos.

Mr. Polyzos: Basically, being also in Toronto, our experience is not dissimilar to Mr. Taylor's. Those employees who handle completed firearms - people that will proof-test them before they leave the factory - all these people have basically FACs, and in many cases have more than that. They may have their own restricted weapons permits.

I think the problem being addressed here goes beyond these individuals we know to be assigned to handling completed firearms. Again we have the issue of the barrel, that little innocuous piece of metal that may, under these provisions, put us in jeopardy vis-à-vis the law and subject us to prosecution - for allowing my secretary, for instance, to handle something because she's in the plant and she's trying to find some pieces of paper that may have accompanied a shipment - something as simple as that. Of course it's not commonplace, but it is what it is, given the regulations as they are presented here.

Mr. Kirkby: Are any of you three gentlemen, in relation to your own companies, aware of any examples of employees either stealing firearms or explosives, or using them in the commission of a criminal offence, or anything of that nature? Mr. Daigneault?

Mr. Daigneault: I've been with the company since 1990, and my colleague here for over 13 years, and we've never had an incident either with explosives or firearms.

Mr. Taylor: We haven't either; we've never had any theft out of our plant or criminal problems with any of our employees.

Mr. Polyzos: Well I'll have to be the exception; there's one to every meeting. We have had an incident. However, I must impress upon you and the rest of the members of this committee that I don't think a firearms acquisition certificate would ever have made the difference.

.1710

A good analogy is security services that have vetted people for many years and have gone through security screenings; and yet we have people selling out foreign agents from the FBI, just to give a current example. Anything can happen in any given industry, if we call the security agencies an industry, where they have done much greater background checks.

Certainly we have taken measures since that time. We have metal detectors for exits from our plant to make sure we don't have a repetition, and we feel we have succeeded in stemming or putting an end to something like that ever happening again.

Mr. Kirkby: What happened, exactly?

Mr. Polyzos: An employee was able to smuggle out an unserialized frame, used it to complete a pistol, and used it in a crime.

Mr. Kirkby: Okay. Thank you very much.

Mr. Roberge, you've indicated that firearm sales are falling and there are fewer places to purchase firearms. You link that to legislation, and you were trying to say that is the sole cause of your dilemma. Are there not likely some other causes of this situation?

I can imagine some people hearing some of the things such as what you said today, saying the ultimate aim of the government is to confiscate all firearms. Why on earth would anybody go out and buy one, if you're saying that yourself? You've never heard that being said by the government. Why would anybody new want to go out and get a gun when you're saying the government's just going to take them away anyway? Why would they want to do that?

Mr. Roberge: Why would the government want to take your firearms away?

Mr. Kirkby: That's the point. They don't. So why are you saying it?

Mr. Roberge: Oh, I see. Okay. First of all, the businesses I'm referring to are those businesses that have a licence to sell firearms. In 1993 the RCMP issued a report to the Solicitor General that 7,500 licences had been issued to retailers to sell firearms. In 1996 there were 5,000 issued. I'm linking not just this legislation, but Bill C-17 and this proposed legislation as having scared away anyone who wants to be in the business of selling firearms.

Mr. Kirkby: You say it scares away people. But obviously what you're saying, though, is people are not going out and purchasing firearms because.... Don't you think your statements that ``The government's going to take your firearms away'' would have an impact on a new hunter if he's thinking, ``Gee, I'd like to start hunting and all the firearms groups across the country are saying the government's going to take the guns away.'' Why would he want to start? Isn't that rather sort of a silly thing for you to be saying if you want to perpetuate your sport?

Mr. Roberge: Absolutely not, because I believe this government's whole intention is to eventually be a firearm-free zone. Mr. Rock has made that statement. He believes -

Mr. Kirkby: No, he hasn't said that.

Mr. Roberge: No, he has.

Mr. Kirkby: No, he hasn't said -

Mr. Roberge: He made the statement that the only people who should have firearms in this country are police and military. He made that statement and then he backtracked. But he made that statement, and then he says ``Well, I was foolish. I really didn't mean...''. But he made that statement. It's been quoted. He was on television when he made it. So how can you back off from that?

Mr. Kirkby: He did not say that.

The Chairman: Mr. Taylor, did you want to say something?

.1715

Mr. Taylor: Well it was quoted in the paper as a quote. He did say -

Mr. Kirkby: Oh, I know; many things get sliced up and -

Mr. Taylor: But if you just take the world community -

Mr. Kirkby: What else of these.... I would like to -

The Chairman: Let him answer the question.

Mr. Kirkby: No, I would like to -

The Chairman: Let the witness answer the first one, then you can make your question.

Mr. Kirkby: Okay.

Mr. Taylor: If you just take the world community and what Europe is doing, there's a concerted effort within the governments of Europe, Canada, and Japan to eliminate guns. It's happening. We export all over the world and we see the regulations, we know the regulations, and it's coming. They're doing it very slowly. The Canadian government started it in 1979 and they're gradually tightening and tightening. This is the cause of the decrease in business.

Now you do have an aging society, to some degree, that did the hunting. Okay, so there's a slow decline, but not the decline that you've seen of 50%. That's due to gun control. You might have seen 3% or 4%, but not the 50% that we're seeing right now over the last five years.

The Chairman: Last question, Mr. Kirkby.

Mr. Kirkby: What I know, what I heard the minister say, and you must admit he has said it over and over and over, is that he wishes to protect the legitimate uses for firearms, hunting included. You cannot deny that he has made those statements over and over and over to firearms users and groups all across this country and on the national media.

But what I'm indicating is, if you're seeking to encourage your sport, ought you not - rather than taking an approach that ``the sky is falling and it's coming to an end'', which will discourage people from getting involved - to encourage people in a constructive and safe fashion to get involved with your sport?

Mr. Taylor: They're getting -

Mr. Kirkby: Wouldn't that be a -

Mr. Roberge: We have brochures that promote the safety of firearms with children. We have brochures that promote collecting. We have brochures that promote women in shooting sports. We do all that stuff, but our problem is working against the government because the government has made us bad people.

Mr. Kirkby: Well I don't feel like a bad person.

Mr. Roberge: Are you a firearm owner?

Mr. Kirkby: Yes.

Mr. Roberge: And you don't feel like a bad person?

Mr. Kirkby: No, I don't feel like a bad person.

Mr. Roberge: Well I need to speak to you...with someone who may not be in the same position as you are -

Mr. Kirkby: And I've used IVI shells. They're very good.

The Chairman: Mr. de Savoye, do you have any further questions?

[Translation]

Mr. de Savoye: Yes, Mr. Chairman.

The Chairman: You have five minutes.

Mr. de Savoye: Mr. Daigneault, I understood earlier that Mr. Héroux was assigned to spend one day with representatives from the Justice Department to help them appreciate the problems that you could encounter because of these regulations.

Did you manage to come to some kind of understanding with the Justice Department representatives? If not, do you think it is possible or likely that you will reach some kind of understanding, based on the conversations that you have had with these officials? In other words, are we heading in the right direction or are there serious problems present which would make your recommendation an alternative?

Mr. Daigneault: Let's just say that they listened carefully to what we had to say because it is difficult to oppose virtue when confronted with an industry like ours that works legitimately for governments.

I wouldn't want to be in their shoes because clearly, the legislation and the regulations were not drafted with the intention of preventing us from doing business. It was quite by accident, in my view, that some of these regulations happened to be drafted in such a way as to place a burden on our operations.

When we met with these officials, they told us, "Yes, we understand your problem. Now then, what are we going to do with our legislation?" In order to accommodate us, because it is logical to do so, these enactments may include provisions which have no bearing whatsoever on the ordinary citizen who should be the focus of the regulations. Will this complicate matters to the point where no one will be able to understand anything? I wouldn't want to be in their shoes.

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Already, we must comply with many regulations and we feel confined. We do not sell to the public. We are quite willing to tell you how we monitor and regulate our own operations - not how we plan to do so, but how we will continue to do so. Establish some minimum guidelines and we will comply with them, and even exceed them. There is no ill will whatsoever on our part. We merely want to continue doing legitimate business, in an unrestricted and straightforward manner. We have no desire to circumvent any regulations.

Can the department accommodate us with their enactments and deadlines? We only recently asked these officials to come and see us after having read the regulations. We had not been consulted at any time. I don't even know if they were aware of our existence. When we finally saw the regulations, we knew that we had to tell them that something wasn't quite right. I don't even know if they will be able to accommodate us or if they will have the time to do it. That is why we recommended what I believe is a very valid alternative approach.

Mr. de Savoye: Mr. Chairman,

[English]

we will meet with some officials from the justice department tomorrow. I would appreciate it if they could indicate to this committee how they feel about their visit to this SNC-Lavalin industry and whether they think they can include in the regulations a viable solution. I would like to know how they react to this proposal. Thank you, Mr. Chair.

[Translation]

Thank you, Mr. Daigneault.

[English]

The Chairman: Thank you very much, Mr. de Savoye.

Ms Whelan.

Ms Whelan (Essex - Windsor): Thank you, Mr. Chairman. I have a question, and I'm not sure whether Mr. Taylor or Mr. Polyzos would like to answer it.

You both make comments. It's more so in the letter signed by Mr. Coburn, attached to your brief, Mr. Taylor, about the exportation and the cost for exportation. I'm not sure I understand, but is it the fee per se that you're opposed to?

Mr. Taylor: It's a fee and it's cost. If we ship to an agent across the border one gun out of our factory, there's a $20 fee. If we sell 500 at a time, it's the same fee. But if you take that total fee and no other industry or business in Canada is charged an export fee, how can you charge us? What's the purpose behind it?

Ms Whelan: Just so you're aware, other businesses are being charged for export licences and export fees as we move towards cost recovery. Agriculture is one of them, and I know I'm getting a lot of complaints about that. I'm not sure whether you're aware of the direction the government is moving in with other industries.

Mr. Taylor: I'm not aware, no.

Ms Whelan: I understand what you're saying, though, on whether it's one or five hundred.

Mr. Taylor: How does a government give people money to help them export and turn around and take it away from others? I think it's very hard to justify that.

We're a very price-competitive company. We're on the low end of the line of a .22. Marlin is our main competition. We run about 8% below what business they do. If we lose 4% here and the dollar changes a little bit, Mr. Coburn moves his company south of the border. It's that simple. He's in business to make money. We are competitive now, extremely competitive. We have an excellent workforce, but it doesn't take much to change that balance.

Ms Whelan: You believe it would be 4%.

Mr. Taylor: Well, take a K Mart. We've got a potential order of 25,000 units for this year. If we have to ship to 2,300 stores, that export tax is going to go per order unless we set up a distribution system in the States to handle it. There's a cost to that, too. Either way it's a cost.

Ms Whelan: Okay. Did you want to add anything, Mr. Polyzos?

Mr. Polyzos: Perhaps I can add this. My company at least has been subject to application for and the issuance of export permits for all destinations outside Canada, with the exception of the United States.

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I think it's a common experience here that perhaps the shipments to the U.S. for all of us would be much more regular. While one might talk about another industry's larger shipments that might happen once every quarter, our shipments to the U.S. market are much more regular.

The fees are therefore compounded, and to an extent that puts us all at a competitive disadvantage. It also makes us feel somewhat awkward. Having given all our efforts to exporting and to creating export revenues for this country, only to be taxed just for the export - apart from our payroll taxes, our income taxes, and everything else - we cannot understand how it is that we can be expected to be on an even footing. I did make mention of all the things that usually happen with countries yelling foul for subsidies or other such export aids. We shouldn't be subjected to that.

Ms Whelan: Thank you.

The Chairman: Mr. Ramsay.

Mr. Ramsay: I want to touch on this business of the government taking firearms away from its citizens. Well, they've been doing that under Bill C-17 since we came to Ottawa in 1993. Orders in Council have come through under Bill C-17 that have prohibited firearms, and thousands of dollars worth of private property has been picked up by the government. They're doing it now. Bill C-68, as I said earlier, is prohibiting 58% of the handguns that have been legally obtained and lawfully held.

That process of narrowing it down is continuing. Military firearms have been banned. Certainly there is a narrowing of the types of firearms in the country, and will it continue? Well, in Bill C-68 there was section 117.15, which gives the Minister of Justice or the Governor in Council the power to prohibit any firearm that in his opinion is not reasonable for hunting and sporting purposes.

Along with some of our colleagues on the other side during that time, we were told this was a King Henry VIII clause, that this power could not be challenged either by the courts or by Parliament, and that it couldn't be scrutinized because the courts for one thing will never impose their opinion on the opinion of the Governor in Council. So we removed it. We removed it, but when it was brought back into the House at third reading, there it was again. And it's in the bill now.

So many people have said to us that if this is the last of the prohibition orders to limit the types of firearms in this country, how come it is still there? I asked the justice minister about that, and he gave me a reasonable response. He said there might be firearms coming into the country not covered by the regulations, he might have to move quickly, and so on. It raises a very real concern in the minds of many people.

All I can say is this. I and my party see no safety benefit to the bill, and we are opposing the bill. What they're doing is regulating organizations such as yours. I have a list of nine different organizations whose actions and use of firearms pose no threat to either public or individual safety and yet they are being regulated.

When we speak to those people who are proponents of the bill and ask them whether they would consider exemptions to organizations such as yours and the re-enactment groups that use the old flintlocks and black powder muskets, they're very reluctant.... In fact they have indicated no, that they would not support it, but they have said that if the committee wants to make the recommendation the committee can go ahead.

With the greatest respect, we have very good people on this committee, but what are we going to do? Make a recommendation to the justice department to no avail that most of these groups, including your own, have appealed to us and have shown that you're not at risk to public safety or individual safety, that you're well disciplined in the use and handling of your firearms? They're still going to impose this upon you, regardless of the economic consequences.

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We don't know how much it's going to cost to implement the bill. We've heard from the department that it's as high as $100 million. Others say it will be more than that. So we're not sure. Now we know there has not been, at least to our knowledge, an industry impact statement. We don't know how much it's going to cost to administer the bill, and we don't know the economic cost to the many and varied parts of the firearms industry. We have no idea what it's going to cost this country in jobs, economic stimulus, and so on. We have no idea.

We had in here the gun owners - the hunting groups, the outfitters, and the guides. We had people from Quebec just the other day, representing 1.2 million gun owners. They're telling us the same thing about the economic consequences. They're reasonably well disciplined and they're not a threat to society.

The Chairman: Excuse me, Mr. Ramsay. I'll have to cut you off. We're running short of time.

Mr. Ramsay: Okay.

The Chairman: Mr. Kirkby has about two questions.

Mr. Kirkby: I have just one, but there are no speeches.

I know Mr. Daigneault indicated that he hasn't been consulted on behalf of SNC-Lavalin. Is it not the case that Mr. Héroux was -

Mr. Daigneault: I stand to be corrected. Mr. Héroux just told me that through the Sûreté du Québec we were identified as a living concern last September. At that time the justice department called us in Ottawa. Mr. Héroux explained - they didn't know why he was coming here - his position at that time. They told us to submit it in writing, and we did. Time went on and on. Then we invited them to visit us. They came to visit us a couple of weeks ago.

Mr. Kirkby: Okay.

Mr. Daigneault: I stand to be corrected on that.

Mr. Kirkby: Thank you very much. Once again I just want to thank all the witnesses for coming today and sharing their opinions with us; it's been most helpful.

The Chairman: Thank you very much, Mr. Kirkby.

Gentlemen - Mr. Roberge, Mr. Polyzos, Mr. Taylor, Mr. Daigneault, Mr. Héroux, Mr. Renaud - it was a pleasure to have you here this afternoon.

In spite of what has been said, we honestly would not have brought you men here if we didn't sincerely want to hear your points of view and try to deal with them where we can. Our function, as has been said, is a recommendation function. We can implement that. Hopefully we can be quite persuasive if it's the wish of this subcommittee to make recommendations.

You've made your points extremely well. I think they've been well noted by members of the subcommittee. We thank you for that.

Hopefully you will reflect upon this experience as being worth while, Mr. Taylor. It may not have been the last time. Hopefully you'll have better memories of this one.

Thank you very much, gentlemen.

This meeting is adjourned.

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