1956-03-15

PRIVILEGE


Mr. E. D. Fulton (Kamloops):: Yesterday, I asked the Minister of Citizenship and Immigration a question which is reported on page 2125 of Hansard as follows:
May I ask the Minister of Citizenship and Immigration a question arising out of the answer he gave to a starred question a few minutes ago? Has the minister just recently issued instructions for the removal of this lady from Canada-where I might say she is now legally married and a resident-under section 7 of the Immigration Act. which would have the effect of circumventing the decision of the court?
To which the minister replied:
The answer, sir, is no. If the hon. gentleman has any information about the alleged marriage of the woman in question I would be glad to have it.
To which I suggested he refer to the departmental counsel. Sir, the minister said no, he had not issued instructions. I hold in my hand a copy of a letter which reproduces a letter from the legal adviser to the Department of Citizenship and Immigration, dated March 8, which reads in part as follows. After advising the solicitor of the lady in question of certain developments in the case, it contains this paragraph:
The minister has now directed that action be taken for Miss Spalding's removal under the provisions of subsections (4) and (5) of section 7 of the Immigration Act.
So that, sir, the information contained in a letter from the departmental legal counsel to the effect that the minister has issued those instructions is directly at variance with the answer given by the minister yesterday when I asked him whether he had issued those instructions, and he said the answer was no.
My question of privilege is this, sir: In view of the fact that we in this house are required to rely upon statements of ministers made with respect to matters under their jurisdiction, this house is entitled to an explanation as to whether the minister was in possession of the facts or not; and if so, why he gave the answer that he did. If he was not in possession of the facts, how is it that action is being taken by his department 67509-136i
under his name, or under an order of the minister without his knowledge?


Mr. Speaker:: I will allow the minister to answer the question, but before he does may I be allowed to inform the hon. member for Kamloops that his point is not one of privilege.


Some hon. Members:: It is.


Mr. Speaker:: No, it is not. It is one which may be further clarified before the orders of the day, but if the hon. member looks at citation 307 he will find that it reads as follows:
A minister may decline to answer a question without stating the reason for his refusal, and insistence on an answer is out of order, no debate being allowed. A refusal to answer cannot be raised as a question of privilege, nor is it regular to comment upon such refusal. A member can put a question, but has no right to insist upon an answer.
Further to that I will comment that both here and in the United Kingdom a minister is at liberty to answer what he pleases and to refuse to answer if he pleases, and the matter can be pursued in a different way in a debate which may arise later, perhaps on the estimates of the department of the minister, but not as a question of privilege.
I will further refer the hon. member to citation 137 of Beauchesne which says:
When the orders of the day are called-
-not at the opening of the sittings, as the hon. member does now, but-
When the orders of the day are called by the Speaker and before they are read by the clerk assistant, it is the practice sanctioned by usage but not by any positive rule for members to make personal explanations or ask questions of the government-
And I pass over a few lines-
... in respect to delay in obtaining returns or to the incompleteness of certain returns brought down under the order of the house.
I would say that complaint about the incompleteness or inexactitude of an answer could be dealt with when the orders of the day are called but not as a distinct question of privilege. The question raised today is in the same class as that which was raised yesterday by the hon. member for Eglinton (Mr. Fleming) and I think we must make a distinction here that instead of rising on a distinct question of privilege for the purpose the hon. member has put forward, it should be done when the orders of the day are called.

Immigration


Hon. J. W. Picltersgill (Minister of Citizenship and Immigration):: I feel there
can be no question whatsoever, Mr. Speaker, that I have a question of privilege. The hon. member has suggested that the answer I gave yesterday to his question was not accurate and I should like to explain to the house precisely what did happen in this case.
At the time the reasons for judgment were given in the Brent case I consulted the legal adviser of the department and, after consultation with him, came to the conclusion that there would be no point whatsoever in proceeding with the appeal to the Supreme Court in the Spalding case. I asked at that time, "What should be done next?" because die decision of the court of appeal of British Columbia quashed an order for deportation but left this woman in the country without any status of any kind either as a visitor or as an immigrant. That situation could not be allowed to continue indefinitely.
As hon. members know, unlike the hon. member who asked the question, I am not a member of the learned profession of which he is a member and I have to get legal advice. After some consideration of possible courses, I suggested to the legal adviser tha! we give consideration to the possibility ot the minister acting under section 7 of the Immigration Act. If the hon. gentleman will look at section 7 he will see that it would be impossible for anyone to act under that section except the minister himself so there would be no possibility of anyone else in the department doing anything unless the minister
acted.
In order to make a complete disclosure I have to say this, and I am sorry to have to do so, but it appears that the legal adviser, being very busy, asked one of the junior officers in his office to advise the agent of the crown in Vancouver. Somehow or other a misunderstanding arose about this matter and this junior officer wrote a letter saying that the minister had directed that action should be taken, when all the minister had done was to direct that consideration be given to the possibility of action under this section. And that, sir, is the whole and complete story.


Mr. Speaker:: In order to complete the
point I was trying to make a moment ago, I would also refer hon. members to citations 191 and 192 of Beauchesne's third edition, and especially to citation 192, which says in the third paragraph:
A dispute arising between two honourable members as to allegations of facts hardly fulfils the conditions of a privilege question-


Edmund Davie Fulton: Mr. Speaker, on the point of order which you yourself have raised-not to IMr. Speaker.]
pursue the question of privilege to which the hon. minister has now replied, but surely on the point of order-I raised it as a question of privilege, not because I was complaining that I had not received an answer, which I know is not a question of privilege under the rules, or because the answer was not complete, which is similarly not a question of privilege, but because the answer conveyed to the house information which according to the letter I now have in my hand is completely at variance with the facts which are within the knowledge of the minister. The minister has now explained that the letter from his departmental legal adviser does not correctly convey the decision which he had reached, so I think my question of privilege has been met.
But because the point of order is important, I submit that to raise a question of privilege as to the complete inaccuracy and misleading effect of an answer is valid. It is a question of privilege as distinct from raising a complaint that an answer had not been given or was not complete and I would hope that you would appreciate that distinction. I raise the point of order now only because it seems to me important not to let the matter pass by.


Mr. Speaker:: I was seized of the point
raised by the hon. member in which he complained, not of having an incomplete answer but of having what he considered to be a wrong answer. Is not that the point?


Edmund Davie Fulton: The answer was directly at variance with the facts-


Mr. Speaker:: I perceive that the-


Edmund Davie Fulton: -on a subject peculiarly within the knowledge of the minister. We are told that the house has to rely upon ministerial statements and therefore it seems to me that it is a matter of privilege affecting the rights of hon. members of the house when such an answer is given under the circumstances which appear here.


Mr. Speaker:: That is exactly the point. The hon. member contends that the reply given by the minister is at variance with the facts as he knows them and he immediately rose on a question of privilege and asked for an explanation. But that is not the type of question of privilege which is allowed at this moment at the beginning of the session immediately after prayers. I referred the hon. member to citations 191 and 192. The third paragraph of citation 192 reads:
A dispute arising between two honourable members as to allegations of facts hardly fulfils the conditions of a privilege question-
I think that hits the point raised by the hon. member right on the head.

On the orders of the day:


John Whitney Pickersgill: Mr. Speaker, I think I am in order at this time to point out that yesterday the hon. member for Kamloops (Mr. Fulton) asserted that if I wanted to find out about the alleged marriage of this Spalding woman I might ask the departmental counsel. I have asked the departmental counsel and he has never heard about any such marriage.


Edmund Davie Fulton: Mr. Speaker, the minister
raises a question of privilege but I hope he has the information that his department retained counsel in Vancouver who lost the case in the supreme court and in the appeal court. They have been in touch with the solicitors for this lady and, as I am informed, are in possession of the facts. It was in that sense that I referred to the departmental counsel, the same counsel who wrote the letters to which I referred earlier today.


John Whitney Pickersgill: May I say, also on a question of privilege, that if the lady's solicitors did not provide material information to the department that was of interest to her case, I think perhaps she ought to get some new solicitors.


Mr. Fleming:: Or the government should get a new minister.


Mr. Speaker:: Order. May I rise on a question of privilege? I think that hon. members should remind themselves that a question of privilege is one that ought rarely to come up in parliament. It is depreciating what is meant by a question of privilege if, under the guise of a question of privilege, there occurs a debate at this juncture of our proceedings. I think that hon. members could pursue the point when the estimates of the Department of Citizenship and Immigration are before the house.


Edmund Davie Fulton: Is a slur, not only on the name of the lady but on her solicitors, to be allowed *-an entirely unwarranted slur? I submit that that sort of thing should not be allowed to happen. When the minister is guilty of that soft of conduct, it calls for a reply under the rules. The fact of the matter is that the marriage took place after the application was made-


Mr. Speaker:: Does the hon. member contend that if a member, using his immunity in debate in this house, makes a slur on a company or person outside, someone must give him the rebuttal? If we were to have a question of privilege accepted for that purpose, we would have many in this house.
Inquiries of the Ministry


Edmund Davie Fulton: I suggest to you, sir, that the minister should not abuse his immunity.


An hon. Member:: Sit down.



COMMITTEE ON ESTIMATES


[Stage Direction]
Mr. W. A. Tucker (Rosthern) presented the first report of the special committee on estimates, and moved that the report be concurred in.
Motion agreed to.


[Stage Direction]
On the orders of the day:
Hon. Milton F. Gregg (Minister of Labour):: A few days ago I stated in this house that I had asked the unemployment insurance commission to look into complaints concerning the referral of Quebec and New Brunswick bushworkers to employment in logging camps. This survey has now been carried out, and I have received a statement from the unemployment insurance commission, which I should like to summarize as follows.
Under the Unemployment Insurance Act the commission has an obligation to refer workers to suitable employment when such is available and, when no suitable employment is available, to pay benefits to those workers who are eligible. It also has an obligation to find suitable workers for employers.
The commission's offices in the provinces of Quebec and New Brunswick received orders for a substantial number of bushworkers and had a considerable number of unplaced applicants on their files who were qualified to fill the orders. Accordingly, these jobs were offered to those applicants. Where the employment was considered as appearing to be suitable, and when it was refused by an applicant who was a claimant, benefit was suspended pending decision by an insurance officer.
Adjudication by insurance officers is being made and suitability of the employment determined on the following bases:
(1)	The rate of wages offered must be that prevailing in the area in which the employment is to be performed and not less than that offered by good employers in that area.
(2)	When a job away from home is.offered to a bushworker who is a claimant, the minimum duration of the employment must

Inquiries of the Ministry be such as would enable him to earn at least ten times the amount of transportation expenses involved.
The pattern of employment followed by these persons is such that they habitually work away from home in the lumbering and logging industry. This is taken into consideration by the insurance officer, as also is the length of time he has been unemployed, special domestic circumstances, and the opportunities for employment in his home area.
Although the rates of pay offered would appear to conform to the requirements I have mentioned, nevertheless all of the suspensions of benefit already imposed will be reviewed in the light of these principles and, if the employment is found to be unsuitable, benefit will be restored in full.

On the orders of the day:


Mr. T. S. Barnett (Comox-Alberni):: I
should like to direct a question to the Minister of Labour in connection with the statement he has just made. What steps does the unemployment insurance commission take to ensure that the employment offered is going to be ten times the amount of the fare, if I heard the minister correctly, and what jurisdiction has the commission to see that that condition is carried out?


Milton Fowler Gregg: The unemployment insurance commission has complete and full jurisdiction over the local employment offices. Moreover, if a claimant is not satisfied with an insurance officer's decision he may appeal to a board of referees which is a body independent of the commission and comprising a chairman, a representative of labour and a representative of employers. Should the claimant still be dissatisfied he may, under certain circumstances, appeal further to the umpire who is the final authority under the Unemployment Insurance Act.


Mr. Balcer:: I should like to ask the minister a question. Have any refunds been made to any of these claimants since the question was brought up in the house?


Milton Fowler Gregg: I covered that in my statement. If these principles that I have mentioned have not been fulfilled, then payments of benefit will be made in full.


Léon Balcer: Can the minister tell us if any actual refunds were made? The minister says this is going to be the policy, but have any refunds been made?


Milton Fowler Gregg: I cannot say at the moment whether or not they have been made.


Mrs. Fairclough:: Did the minister's statement assert that the rate of wages paid was that prevailing in the locality of employment or that prevailing in the locality in which the man was domiciled and was registered with the unemployment insurance commission?


Milton Fowler Gregg: Perhaps I had better read that again so there will be no mistake. That was No. 1 of the two points. The rate of wages offered must be that prevailing in the area in which the employment is to be performed and not less than that offered by good employers in that area.



REPORTED TIE-UP IN CAMPBELLTON AND EDMUNDSTON OFFICES

[Stage Direction]
On the orders of the day:
Mr. J. C. Van Horne (Resiigouche-Madawaska):: Will the Minister of Labour please inform the house why information is not available to show how many of the 7,106 cases referred to the Moncton regional office by the Campbellton and Edmundston offices were delayed for more than two weeks?


Milton Fowler Gregg: Mr. Speaker, I will read my hon. friend's question and if possible bring forward a reply.



CANADIAN BROADCASTING CORPORATION


[Stage Direction]
On the orders of the day:
Mr. G. T. Purdy (Colchester-Hanls):: Mr. Speaker, I have a question of privilege. At confederation Hants county, Nova Scotia, now part of Colchester-Hants, was a separate constituency. The first member elected was Joseph Howe. On Wednesday, March 21, at eight p.m., and again on the 28th at the same hour, the C.B.C. will carry over its trans-Canada network a two-hour program-


Mr. Speaker:: Order.


Gordon Timlin Purdy: -on the life and times of this great Nova Scotian.


Mr. Speaker:: This is not a question of privilege.



FINANCE


[Stage Direction]
On the orders of the day:
Mr. L. E. Cardiff (Huron):: I should like to direct a question to the Minister of Finance

or the Minister of Agriculture. Is any consideration being given to the removal of the sales tax on semen which is extensively used by farmers and breeding associations for the improvement of stock?


Hon. W. E. Harris (Minister of Finance):: Mr. Speaker, may I say with all respect that this is the type of question the Minister of Finance would prefer not to answer until after the budget.


EXTERNAL AFFAIRS
[Stage Direction]
On the orders of the day:
Mr. H. A. Hosking (Wellington South):: wish to address a question to the Secretary of State for External Affairs. As a result of reports that have appeared in the press stating that a certain brewery owned by Canadian capital is not being permitted to operate in four separate states of the United States, has the minister made representations to the United States government complaining about this practice? Would he tell the house whether it is the nature of the industry that makes it objectionable or whether it is because it is a Canadian-owned company?


Hon. L. B. Pearson (Secretary of State for External Affairs):: The hon. member was good enough to give me notice of his question before I came into the house. I can say to him and to the house that information was received some days ago that efforts were being made in certain states of the United States to enact legislation which would discriminate against and, indeed, would put out of business, if the legislation were in operation, brewing companies in which the controlling interest was held by persons not citizens of the United States of America. In this case, in effect, that meant Canadians.
As soon as we heard of this proposed action on the part of certain legislatures in the United States we conveyed our concern to the United States government over the undesirable consequences that would follow legislation of this kind if it were put into effect. That concern, Mr. Speaker, is based wholly on the principle involved and not merely on the situation of any particular industry. The United States authorities have already informed us that they share this concern and I understand they have been in touch with the states involved. It is therefore hoped that no further and formal action on our part will be required.
Inquiries of the Ministry


[Stage Direction]
On the orders of the day:
Mr. W. B. Nesbifi (Oxford):: I should like to address a question to the Secretary of State for External Affairs. In view of the report on the Canadian Broadcasting Corporation news this morning that the government of the United States has invited Prime Minister Nehru of India to visit that country, does the government of Canada also intend to invite Prime Minister Nehru to visit Canada at the same time?


Lester Bowles Pearson: At the request of the Prime Minister (Mr. St. Laurent) some time ago when I was in New Delhi I conveyed to Mr. Nehru a very warm invitation on behalf of the government for the Prime Minister of India to include Canada in any visit he would be making to the United States. Mr. Nehru at that time said he hoped to visit Canada before long but he was unable to give us any definite reply at that time.



MEETING OF PRIME MINISTER WITH PRESIDENT


[Stage Direction]
On the orders of the day:
Mr. Stanley Knowles (Winnipeg Norlh Centre):: Mr. Speaker, may I direct a question to the Prime Minister. Is the Prime Minister now in a position to tell the house what subjects will be discussed when he and President Cortines meet with President Eisenhower at White Sulphur Springs on March 26?
Right Hon. L. S. St. Laurent (Prime
Minister): No, Mr. Speaker, I am not in a position to do that. I have been informed by the Department of the Secretary of State that there would be no predetermined agenda for our meeting.


Stanley Howard Knowles: May I ask a supplementary question? Can the Prime Minister say whether any of his cabinet colleagues will accompany him on this trip?


Mr. St. Laurent (Quebec East):: The Secretary of State for External Affairs will be with me on that occasion.



PRAIRIE FARM ASSISTANCE


[Stage Direction]
On the orders of the day:
Mr. William Bryce (Selkirk):: Mr. Speaker, I should like to direct a question to the Minister of Agriculture. Can the minister inform the house when he expects to bring

Inquiries of the Ministry before the house the amendments to the Prairie Farm Assistance Act and what they will cover?


Right Hon. J. G. Gardiner (Minister of Agriculture):: Mr. Speaker, hon. members will recall that we made rather material amendments to the Prairie Farm Assistance Act last session. When we were preparing legislation for this session or the items upon which legislation might be required, we were having considerable difficulty in the administration of the amendments which were made last year. We therefore made provision for the possibility of bringing in amending legislation. However, I am now informed that, with greater experience in the administration, the difficulties have become less and less, and I am not sure that it will be necessary to bring down legislation.



THAMES RIVER


[Stage Direction]
On the orders of the day:
Wallace Bickford (Wally) Nesbitt: I should like to address a question to the Minister of Northern Affairs and National Resources. Because of the recent severe flooding in the area of the Thames river in southern Ontario, would the minister consider including in his supplementary estimates a provision for the federal government's share of the amount required to complete the works projected for flood control and water conservation of the upper Thames river conservation authority?


Hon. Jean Lesage (Minisfer of Northern Affairs and National Resources):: The
matter is still under consideration, Mr. Speaker.
.	TRADE



CANADA-UNITED STATES  SUGGESTED DEVALUA- TION OF CANADIAN DOLLAR

[Stage Direction]
On the orders of the day:
Mr. W. Ross Thatcher (Moose Jaw-Lake Centre):: Mr. Speaker, I should like to direct a question to the Minister of Finance. I apologize for not having given him notice. In view of our increasing trade deficit with the United States, has the government given any consideration recently to the advisability, or otherwise, of devaluating the Canadian dollar in an effort to alleviate the situation?


Walter Edward Harris: Quite obviously, Mr. Speaker, if any such action were contemplated I would not announce it until such action were taken. But


I think, sir, we ought to believe that at all times the government is giving careful consideration to any action that would be of assistance in maintaining good trade relations and good balance of payments.
My recollection is that the balance of gold and dollars now in our hands is not any more than slightly different from what it has been for some time; therefore, I do not share the apparent alarm of my hon. friend.


Mr. Macdonnell:: Mr. Speaker, may I ask a supplementary question? Is the implication of the minister's answer just given that the government is fixing the value of the Canadian dollar from day to day on the market?


Walter Edward Harris: I do not know what implication may be read into the question, Mr. Speaker, but no implication can be taken from my statement.



CITIZENSHIP AND IMMIGRATION


[Stage Direction]
On the orders of the day:
Mr. J. E. Brown (Branfford):: Mr. Speaker, I should like to address a question to the Minister of Citizenship and Immigration. Would the minister care to comment on a question raised in the legislature of Ontario regarding the education of Indians being assumed by the province, and the answer given there by the minister of education?


John Whitney Pickersgill: Mr. Speaker, I
noticed the report that a question had been asked or raised in the Ontario legislature by Mr. Nixon, and the reply by the minister of education. The implication of the reply was that Ontario might be prepared to take over the education of Indians in that province on the basis of reimbursement by the federal authorities. Because that is precisely in line with the policy we have been working toward in the Indian affairs branch for some considerable time, I did get the authority of my colleagues today to send the following telegram to the minister of education of Ontario, and perhaps I might be permitted to read it.


Mr. Speaker:: The minister in reply said the implication of the statement was so and so, but we do not know what the. statement was. He is about to read a telegram' which is in direct relation to the statement. I think in fairness we ought to have first the statement made.


John Whitney Pickersgill: I was attempting to avoid repetition. If I read the telegram it will be seen that the statement is in it. The telegram reads:
Hon. W. J. Dunlop, M.L.A.,
Minister of Education,
Toronto, Ontario
I have seen the report of the statement you made in the legislature yesterday to the effect that the provincial government would be ready to assume responsibility for the education of Indians on the basis of reimbursement by the federal government. I am authorized by my colleagues to communicate with you with the view to discussing this suggestion at an early date. Could you let me know if you would be prepared to discuss it and what might be a convenient date.
The telegram is signed by me.


Edmund Davie Fulton: May I ask the minister a supplementary question? Would the implementation of such a proposal, if agreement were to be arrived at, necessitate an amendment to the Indian Act?


John Whitney Pickersgill: No, sir, I understand not. [Later:]
On the orders of the day:


Mr. H. A. Bryson (Humboldl-Melforl):: Mr. Speaker, I would like to direct a supplementary question to the Minister of Citizenship and Immigration arising out of his answer to the question asked by the hon. member for Brantford (Mr. Brown). I take it that the same offer would apply to any other province that so requested?


John Whitney Pickersgill: Mr. Speaker, I do not think there is any question of any offer. I am sure the government would be prepared to enter into discussion with the government of any province which wished to consider taking over the education of Indians on some reasonable basis conforming to the Indian Act and the rights of Indians under the act.



ADMINISTRATION OF JUSTICE


[Stage Direction]
On the orders of the day:
Mr. J. G. Diefenbaker (Prince Albert):: Mr. Speaker, I should like to address a question to the Prime Minister in the form of an appeal in connection with the Williams case to which reference was made yesterday. Would the Prime Minister, in his capacity as Prime Minister, be prepared to look into that case in order to assure that if an injustice has been done-and that seems apparent- equity should not be denied because of the decision of the-	.


Mr. Speaker:: Would the hon. member for Prince Albert contend that his question is
Inquiries of the Ministry one which is trying to get information? He is asking the Prime Minister to take a certain action; he is not asking for information.


John George Diefenbaker: Mr. Speaker, I cannot ask for information without putting it before the Prime Minister. I cannot ask a hypothetical question about a non-existent state of affairs.


Mr. Speaker:: I quite realize that the hon. member cannot ask the Prime Minister to take a certain action unless he tells him what action he would like him to take. That is not the purpose of a question before the orders of the day. The hon. member for Comox-Alberni.


John George Diefenbaker: The purpose of the question is to ask the Prime Minister whether he will look into the case.


Mr. Speaker:: This can be dealt with later on when the estimates of the Department of Justice are before the committee.


John George Diefenbaker: The man is in jail for 28 years.


Mr. Speaker:: The hon. member for Comox-Alberni.


John George Diefenbaker: On a question of privilege-and there have been several today- does Your Honour rule that a member of this house, on a matter concerning justice and equity, shall not be permitted to ask the attitude of the Prime Minister? That is all I want to know.


Mr. Speaker:: I am not here to decide questions of equity; I am here to decide questions of order. May I make a request of hon. members, and my request applies to members of all parties. Whenever I intervene on a point of order would hon. members please refrain from applauding whether what I say pleases them or not?
The matter was raised in the first place by a starred question put on the order paper by the hon. member for Kamloops-it is the Clifford Williams case, is it not?


Edmund Davie Fulton: That is right.


John George Diefenbaker: That is what we are talking about.


Mr. Speaker:: It appears at pages 2120 and 2121 of Hansard. The Minister of Justice answered at considerable length the question put by the hon. member for Kamloops. Later on, before the orders of the day were called, questions were asked on the very same subject with the intention of clarifying the answer. Replies were given by the Minister of Justice, and the question the hon. member is asking today was asked of the Minister of Justice yesterday.

Inquiries of the Ministry


John George Diefenbaker: Oh, no.


Mr. Speaker:: The hon. member says no. They even went so far as to ask him whether the government would be prepared to do the same thing in this case as was done in the Coffin case. Today the hon. member comes back to the same point and asks the Prime Minister whether he will look into this case again and take the action which he himself suggests now. The purpose of a question is to ask for information and not to give some. The hon. member is asking whether the Prime Minister will look into this case and take action, and then he goes on to suggest the action.


John George Diefenbaker: No.


Mr. Speaker:: Yes. Of course, we are in this position at the moment. Whenever a dispute arises between an hon. member and the Speaker we do not have a copy of Hansard until the next day. Would the hon. member be good enough to wait until tomorrow in order to check Hansard, and then we can pursue the point? If he is right, I will allow him to do whatever he wishes within the rules, and if I am wrong I shall gladly apologize, and we can carry on from there.



BRITISH COLUMBIA


[Stage Direction]
On the orders of the day:
Thomas Speakman Barnett: Mr. Speaker, I have a question for the Minister of Finance. I have not given him notice either, but I hope he will find it a little easier than some of the other questions that were asked recently.
Has the minister given consideration to the minting of a special commemorative silver dollar in connection with the 1958 centenary celebration in the province of British Columbia?


Walter Edward Harris: Mr. Speaker, representations have been made by various organizations in British Columbia, and by my colleagues the Minister of National Defence and the Minister of Fisheries, and other members on this side of the house, asking for the striking of a commemorative silver dollar with respect to the occasion on which gold was found in British Columbia, I think, in 1858. Consideration has been given to the representations but no decision has been reached yet by the government.


Mr. Roland Michener (St. Paul's):: Mr. Speaker, I should like to direct a question to the Minister of Finance supplementary to

the silver dollar question. Would the minister take into consideration the advisability of striking a gold coin as being more appropriate to celebrate the discovery of gold 100 years ago?


Mr. Martin:: That is the $64 question.



HEALTH INSURANCE


[Stage Direction]
On the orders of the day:
Mr. F. G. J. Hahn (New Westminster):: Mr. Speaker, I would like to direct a question to the Prime Minister. Is it the intention of the government to continue its determined stand that no national health program will be put into effect until such time as six provinces, representing over one-half of Canada's population, have approved the agreement, or would it consider modification of this plan to set it in operation upon the approval of any one province?


Louis Stephen St-Laurent: No, Mr. Speaker. The policy that was expressed to the conference with provincial ministers was that if and when a majority of the provinces, representing a majority of the population of Canada, wished to put into effect some scheme of hospital and diagnostic services insurance the federal government would be prepared to extend technical and financial assistance in implementing the policy.



HEALTH AND WELFARE


[Stage Direction]
On the orders of the day:
Paul Joseph James Martin: Mr. Speaker, the hon. member for Selkirk (Mr. Bryce) asked me a question three days ago with regard to the decision to transfer the services of the director of the hospital at Norway House. I have already discussed this matter with the hon. gentleman and in addition I would say that his services are needed at another hospital.



NORTHERN ONTARIO PIPE LINE CORPORATION


Right Hon. C. D. Howe (Minister of Trade and Commerce) moved: that the house go into committee to consider the following resolution:
That it is expedient to introduce a measure to provide for the constitution of the corporation to

be known as the Northern Ontario Pipe Line Crown Corporation for the purposes, inter alia, of constructing, maintaining and operating a natural gas pipe line between the Ontario-Manitoba border and Kapuskasing, Ontario and of leasing, with an option to purchase, the said natural gas pipe line to the Trans-Canada Pipe Lines Limited and carrying out such leases, including the disposal by the corporation of the said pipe line in connection with such purchase option;
To provide also that the corporation may do such things as are conducive to the attainment of these purposes, that it may borrow money, the aggregate of the amounts borrowed by the corporation and outstanding at any time and the aggregate of the amounts loaned by the Minister of Finance and outstanding at any time not to exceed one hundred and thirty million dollars;
To provide further for the appointment and remuneration of directors, officers and employees incidental to the administration of the act.


Mr. Speaker:: Is it the pleasure of the house to adopt the motion? Those in favour of the motion will please say yea.


Some hon. Members:: Yea.


Mr. Speaker:: Those opposed will please say nay.


Some hon. Members:: Nay.


Mr. Speaker:: In my opinion the yeas have it. Call in the members.


Clarence Decatur Howe: Mr. Chairman, this bill provides tor the formation of a crown corporation to build the northern Ontario section of an all-Canadian natural gas pipe line. Its purpose is to hasten the day when Alberta will have an adequate outlet for its surplus gas, and the day when the cities, towns and industries of Saskatchewan, Manitoba, Ontario and Quebec within economic range will have access to this highly efficient fuel.
Many hon. members may hold the view that this pipe-line project involves only the procuring and laying in place of a large diameter pipe extending from a point in Alberta to a point near Montreal. Such a project is in itself no small undertaking, since it involves an estimated cost of $375 million. However, this is but part of the pipe-line project. In the province of Alberta, gas wells must be drilled to reservoirs of gas already proven in order to make that gas deliverable; chemical plants must be built to remove from the gas sulphur and wet components, such as butane and propane, for gas entering the pipe line must be dry gas; gathering lines must be laid in Alberta to collect the gas from the various fields and convey it to the western end of the trans-Canada pipe. Premier Manning has estimated that expenditures in Alberta, necessary to initiate the pipe-line project, will total $250 million. These are problems for private enterprise and for the provincial government of Alberta, for which this parliament need take no responsibility.
Then, customers for the gas must be found, which involves expensive distribution systems in a large number of cities, and a sales program to induce private domestic users and private industries to change over to natural gas. The build-up of customer loads must inevitably involve a considerable time element, which is being shortened by a temporary purchase of gas from the United States, that is enabling load building to begin without delay. Involved in the customer build-up is the manufacture and sale of apparatus for using gas. Altogether, this is a project involving expenditures in Canada totalling over one billion dollars.
Some hon. members may say that if the main pipe were to be built, the producers would eventually develop their properties and connect them to the pipe line. The same hon. members may say that the consumer load will eventually grow to a level that will make the
(Mr. Speaker.)

pipe-line operation cover current expenses. However, the fact remains that until a certain quantity of deliverable gas can be assured and until the required quantity of consumption can be guaranteed it is impossible to finance the main pipe in a manner satisfactory either to private enterprise or to this parliament.
Hon. members may question why it is desirable to market certain quantities of gas from the pipe line into the United States. The reasons are twofold: first, that markets are required for more Alberta gas than eastern Canada is ever likely to consume, and second, there is available in the United States an immediate consumer load. Sales to the United States would therefore encourage exploration and development in Alberta and spread the cost of the transmission system over a larger volume of gas. Apart from these two considerations, United States markets are not essential to the project. I would, however, point out that when Premier Manning first brought the project to our Prime Minister he made it a condition that a market in the United States be arranged, in addition to markets in eastern Canada. Producers in Alberta desire to have this additional market as a means of taking care of the growth of the gas industry in Alberta, and this government can have no objection to a limited market in that country for gas in excess of the foreseeable needs of Canada.
Hon. members will recall that in 1951 parliament enacted the original statute incorporating Trans-Canada Pipe Lines Limited. The original sponsors of this project believed that a pipe line designed to serve the Canadian market only was economically feasible and the statute of incorporation restricted the company to activity within Canada. Through the merger of the original Trans-Canada Pipe Lines Limited with Western Pipe Lines Limited in early 1954, the plan was broadened to include a substantial export of gas at Emerson, Manitoba, which was possible under the Western Pipe Lines charter. Such export has been approved by this government with the proviso that Ontario and Quebec must be served as nearly as possible concurrently with any such export, and the company proceeded to try to arrange gas purchase and sales contracts and financing for its construction program on this basis.
In early 1955 Trans-Canada advised the government that, due to the lack of progress in obtaining gas purchase and sales contracts in Canada, construction of the first stage of the line in 1955 could not be financed unless a temporary guarantee of annual debt service on the first mortgage bonds could be arranged. The assistance requested was a deficiency

agreement under which the government would undertake to meet any payments due on the first mortgage bonds that the company was unable to provide out of its depreciation and earnings.
After negotiations with the government of Canada and the industrial development bank, the company announced on March 17,
1955,	that it had been unable to negotiate a type of financial assistance which did not result in an agency of the government of Canada being in a position to control the company, and that such an arrangement made it impossible for the company to purchase its gas requirements.
Following these negotiations Trans-Canada applied to the natural gas conservation board of Alberta and to the Board of Transport Commissioners for Canada for extensions of the permits from each body until April 30,
1956.	Both extensions were granted.
Over the following months the company worked out a series of arrangements with Tennessee Gas Transmission Company which provide for the export of 200 million cubic feet of gas daily at Emerson for 25 years, the export of a further 100 million cubic feet daily near Niagara Falls, reducible to no export at Trans-Canada's option, and the import near Niagara Falls of up to 90 million cubic feet daily for the period until Alberta gas is available in central Canada. These arrangements, which are of course subject to the approval of the United States federal power commission, at once greatly improve the market position for Trans-Canada from the outset, and permit a more rapid build-up of the central Canadian market than might otherwise be possible. The company has also pressed forward with other sales contracts, notably for the Montreal and Toronto areas but also in the other areas within reach of the proposed pipe line.
Recently Trans-Canada has completed gas purchase contracts with the Canadian Gulf Oil Company and other suppliers for approximately the full amount of the 4-35 trillion cubic feet presently authorized for removal by Trans-Canada from Alberta.
On February 15 Trans-Canada announced that two of western Canada's largest oil and gas producing companies had bought substantial sponsoring interests in Trans-Canada. These companies, Canadian Gulf Oil and Hudson's Bay Oil and Gas, have increased their holdings to 17 per cent each of the founders' shares of the company. Tennessee Gas Transmission Company, which came into the project last November, now also holds 17 per cent of the founders' shares. To make these arrangements possible, the original sponsors, Canadian Delhi Oil Limited and the Western Pipe
Northern Ontario Pipe Line Corporation Lines group, have each reduced their share holdings to 24J per cent of the total outstanding. Representatives of Tennessee, Canadian Gulf and Hudson's Bay were at the same time added to the board of directors and the management committee of Trans-Canada.
For the purpose of overcoming the difficulties of establishing this longest pipe line in the world, this new management group is a very strong one indeed. The Canadian Delhi group, which first envisaged the all-Canadian line as a practicable project, has been a leading company in proving up the necessary gas reserves. The Western Pipe Lines group brings to the project experience in the development under Canadian conditions of gas utilities and related enterprises. Canadian Gulf and Hudson's Bay bring to it a continentwide experience in the development of petroleum resources. Tennessee, one of the largest gas transmission organizations in the world, brings resources of personnel, experience and financial strength which are almost unparallelled in this industry.
These sponsors are further strengthened by a board of directors widely representative of Canadian experience in development ventures. Of the 18 directors 11 are Canadians. Their names will be known to most hon. members: Hon. Edouard Asselin, Q.C., Montreal; E. W. Bickle, Toronto; Hon. G. Peter Campbell, Toronto; J. K. McCausland, Toronto; M. A. MacPherson, Q.C., Regina; H. R. Milner, Q.C., Edmonton; A. Deane Nesbitt, Montreal; Gordon P. Osier, Winnipeg; N. E. Tanner, Calgary; Jules R. Timmins, Montreal; J. Ross Tolmie, Q.C., Ottawa. The president is Mr. Tanner, whom of course you know as a former minister of mines in the government of Alberta; Ray Milner is a vice-president and Deane Nesbitt is secretary-treasurer.
The strength of this management group is self-evident. What apparently is not evident, to judge by press comment, is that control of the company is open to Canadians. I wish to put an end to misunderstanding on this point.
I have been in pretty close touch with those who have sponsored this project for the last six years. They have never had any reason to expect any sympathy from this government unless they were prepared to meet the national policy of serving the Canadian market first and unless they were prepared to share ownership and management with Canadians. From the outset the sponsors of Trans-Canada have agreed with that point of view. All the present participants have reconfirmed, in the shareholders' agreement dated February 13 which I tabled on February 20, their agreement that at the time of public financing, the Canadian public will be offered not

Northern Ontario Pipe Line Corporation less than 51 per cent of the total number of voting shares to be outstanding after public financing.
The group of sponsoring companies I have described has, under this latest agreement, rights to something less than two million common shares. It is to this total that the percentage distribution I have given applies. When public financing is undertaken, two things will follow from this agreement. First, under option arrangements which form part of the agreement, Canadian Delhi and the western group can increase their holdings from 24J per cent each to 27J per cent each of the founders' shares, while Tennessee, Canadian Gulf and Hudson's Bay reduce their holdings of such shares from 17 per cent to 15 per cent each. Second, an additional issue of something over four million shares is to be sold on the open market, under conditions which will make available to Canadians not less than 51 per cent of the total of about six million common shares.
This offer has, to my surprise, been met with criticism, even derision, on the ground that it provides no guarantee that Canadians will buy the stock. Of course there is no such guarantee. Short of public ownership which, for reasons I shall discuss later, appears to be a second best approach to this matter, I know of no means by which control by Canadians could be guaranteed.
We have always welcomed United States capital to share in the development of the resources of this country. It may be, as some of our leading bankers have suggested in recent weeks, that Canadians shy away from venturing their own capital in the development of their own resources. One can think of cases in which, having supplied a large share of the initial capital for a resource development project, Canadians have sold their equities at the first opportunity of profit, with the result that those equities have moved into the hands of United States citizens.
If there is some uneasiness in this country about the extent and nature of United States investment in Canada, this is the wrong place to focus it. Trans-Canada is no doubt imperfect, as are we all, but its willingness to share its venture with Canadians is not in question. Considering that the inspiration has come, and much of the technical knowledge and skill must come, and much of the loan capital probably will come from the United States, the extent of participation to be offered to Canadians requires no apology from Trans-Canada. Rather it offers to other industries which have equally strong connections beyond our borders, and which for

some reason have not been subjected to this same criticism, a model which they might well study.
I return now to the position of the government in relation to the pipe-line project. Most of the pipe-line construction proposals put forward from time to time were based on the premise that the natural market for Alberta gas is in the nearby United States. The requirement that Canadian markets so far as possible be first provided for is a requirement of national policy. If any disability were placed upon the development of the gas industry by this national policy, it would be proper that this disability be if possible counterbalanced. The developments which I have outlined made it clear that private enterprise alone faced serious difficulty in financing a pipe line stretching across the sparsely populated areas of northern Ontario, a line from which relatively low returns on investment must be expected during the period of building up the central Canadian market. Some kind and degree of public intervention appeared necessary and proper.
Once again, as in the days of railway building, the difficult and sparsely populated preCambrian shield appeared to present an almost insuperable barrier to economic transportation between western and central Canada. Once again, this special problem of Canadian geography has called forth a unique solution. The government is convinced that the solution now offered has a better chance of working than has any alternative solution that has yet been suggested.
First, let me comment on these other proposed solutions. The one about which I have heard most is generally called the exchange plan. Its essential argument is that Canadian gas should flow into United States markets where it can best compete, and Canadian markets be served by United States gas. This has the attraction of appearing to be the most economical arrangement. What it lacks is precisely one fundamental point on which Canadian gas policy must be based. Gas and electricity, unlike oil, are committed permanently, once they are committed at all. No Canadian government can properly commit gas to export until Canadian requirements are provided for. No government of the United States can properly commit United States gas to a Canadian market until the needs of United States citizens within economic range of that gas have been provided for. So long as Canada remains a sovereign nation, these are the facts of life for every energy resource of which a continuous supply is essential to the nation's well-being.
Our friends to the south are no more anxious to infringe on our sovereignty than



IS, 1956

[Stage Direction]
we are to infringe upon any aspect of their sovereignty, even for an apparent economic advantage. This is a further weakness in the so-called exchange plan. Its proponents seem to take it for granted that our good friends to the south would enter readily upon such a plan, which in the nature of gas transportation would have to be firmly committed on both sides for at least 20 years. All the evidence suggests that the responsible United States authorities feel as we do, that dependence upon foreign supplies can be accepted only cautiously and to a limited extent, and that commitments of gas to foreign markets can be entered into only in so far as the gas is clearly surplus to domestic requirements. In these circumstances, to assume that an unlimited gas market is available in the United States to Canadian producers, or that if it exists it can be made available more quickly than a comparable Canadian market, is no better than wishful thinking.
Public ownership of the whole all-Canadian line was, of course, advocated by some, and still is. 1 am not opposed to public ownership as a matter of principle. Neither is this government. There are circumstances in which public ownership is right and proper. But this government does not believe-as do some of our socialist friends-that public ownership is, as a general rule, preferable to private enterprise.
As far as a transcontinental gas pipe line is concerned, I believe that the arguments are all in favour of private ownership. Gas is only one among several competing fuels and sources of energy. It is not a monopoly. Nor do I think that it would be in the public interest for any government to subsidize the transmission of gas, providing unfair competition to coal and oil producers.
To me, therefore, public ownership of the all-Canadian line is definitely a second best. It is a second best rendered even less attractive by the difficulty which would be faced by any government operating a gas transmission and sales system: the difficulty of arbitrating between the competing claims of the producer for maximum field price and the consumer for minimum retail price. These are the reasons why the government has sought some reasonable proposal to lay before parliament which would bring about the early building of a privately operated and privately owned transcontinental gas transmission system, and which would contain the necessary safeguards to the public interest and the public treasury.
Such a reasonable proposal has now been brought forward by Trans-Canada Pipe Lines Limited. This government is sufficiently impressed by its merits and prospects of
Northern Ontario Pipe Line Corporation success that it is prepared, subject to the approval of parliament, to enter into the construction and temporary ownership of a portion of the proposed pipe line.
This government and the government of Ontario have kept in close touch about developments respecting gas for several years. When Trans-Canada brought forward the proposal which has resulted in this legislation being placed before you, we proposed to the government of Ontario that the two governments join in carrying the proposal forward.
At the opening of this session of parliament I tabled a copy of the agreement between the government of Canada and Trans-Canada Pipe Lines Limited dated November 21, 1955, and of the concurrent exchange of letters between the governments of Canada and Ontario. These documents embody the arrangements that the government is now seeking to implement by the present bill.
As hon. members are no doubt aware, the Ontario government has already placed before the legislature of Ontario the bill to enable it to participate. This bill is entitled:
An act to facilitate the introduction into Ontario of natural gas from Alberta by means of an all-Canada pipe line.
The bill is a short one. It reads:
Whereas the transportation of natural gas from Alberta to central Canada is a vital necessity to supplement the energy resources available for the continued industrial growth of Ontario;
And whereas the carriage of such gas through a pipe line situated entirely within the jurisdiction of Canada and running across northern Ontario is in the public interest of Ontario;
Therefore, Her Majesty, by and with the advice and consent of the legislative assembly of the province of Ontario, enacts as follows:
1.	For the purpose of implementing the arrangements made or to be made between the government of Canada and the government of Ontario to facilitate the construction of a connecting link through northern Ontario of a pipe line to transport natural gas from Alberta into central Ontario, the treasurer of Ontario is hereby authorized to loan from time to time out of the consolidated revenue fund any sum of money, but not more than $35,000,000, to a corporation constituted or to be constituted on behalf of Her Majesty in right of Canada and having as a purpose the construction aforesaid.
2.	This act comes into force on the day it receives royal assent.
3.	This act may be cited as the northern Ontario pipe line act, 1956.
Those of you who have read the statements of Mr. Frost and Mr. Porter in presenting this bill will know that the government of Ontario has studied this matter independently, and with the benefit of disinterested professional advice. They will know that the government of Ontario has considered the same alternative courses of action that occurred to us, and has rejected them for substantially the
2168	HOUSE OF
Northern Ontario Pipe Line Corporation same reasons. They will know, and this I draw to the particular attention of all hon. members, that the legislature of Ontario approved this bill, not merely by a majority, but unanimously.
In the agreement between this government and Trans-Canada, the government undertook to recommend to parliament the formation of a crown company to build and own a 675 mile section of the all-Canadian line between the Manitoba-Ontario boundary and Kapuskasing. The legislation now before you carries out that undertaking. The northern Ontario section, when built, will be leased to Trans-Canada for a maximum term of 25 years.
Under the terms of the lease, Trans-Canada will pay all operating and maintenance expenses, including repairs, replacement, insurance, damage claims, and so forth, of the northern Ontario section, plus rental payments on a monthly and annual basis.
Trans-Canada will undertake to purchase the northern Ontario section as soon as it can arrange the necessary finances. The agreement gives a strong incentive to Trans-Canada to do so in a relatively short time.
The crown corporation undertakes to make additions of integral parts of the northern Ontario section, such as increased compression facilities to meet additional gas requirements, but is not required to build any additional pipe line or any sales laterals. The northern Ontario section will be designed for an initial capacity of 300 million cubic feet of gas per day and an ultimate capacity of 530 million cubic feet per day without looping.
The rental formula included in the agreement between the Canadian government and the Trans-Canada is designed to achieve the following results:
(1)	to enable the crown corporation to recover not less than its full costs and investment during the term of the lease;
(2)	to enable Trans-Canada to defer part of its rental payments on the northern Ontario section during the market buildup period in eastern Canada;
(3)	to give the crown corporation a claim on net earnings of Trans-Canada if required to meet operating expenses, interest cost, and accumulated amortization, of the northern Ontario section;
(4)	to give Trans-Canada a strong incentive to exercise its option to purchase the northern Ontario section within a relatively short period;
(5)	to give the crown corporation a profit over and above expenses, interest costs, and amortization in the event that gas demand increases as expected and Trans-Canada does not exercise its option to purchase.
[Stage Direction]

The rental payment to be made by Trans-Canada is in two parts. First is a monthly transportation charge on gas transmitted by the northern Ontario section. This transportation charge will be an amount which, if the line were operating at two-thirds of initial capacity, would return the crown corporation 4J per cent per annum on its initial investment.
Once established, the throughput charge will remain fixed during the term of the lease regardless of subsequent increases in capacity. Since increases in capacity up to the physical maximum of 530 million cubic feet daily can be achieved by additional investments, small in relation to the initial investment, the throughput charge will result in returns substantially higher than 4£ per cent on invested capital, as the market for gas in eastern Canada expands.
From the outset, operating costs and interest charges will probably be covered by the basic rental, but there may be deficiencies in the revenue available for amortization in the early years of market buildup. To make up any deficiencies, the agreement provides that, commencing in the fourth year of the lease, and to the extent that the net revenues are available from the whole Trans-Canada operation, Trans-Canada will pay an additional annual rental of up to 1 per cent of the original cost of the northern Ontario section until total rental payments from the beginning of the lease equal 7 per cent per annum of the total capital cost plus interest at 3| per cent per annum compounded annually on any deficiencies below 7 per cent carried forward.
The Chairman:: Order. I am extremely sorry to interrupt the minister, but I am obliged to advise him that his time has expired.


Some hon. Members:: Let him go on.


William Alfred Robinson: Has the minister unanimous consent to continue?


Some hon. Members:: Agreed.


Clarence Decatur Howe: I must say I always thought a minister on introducing a bill was given sufficient time to make a statement.


Edmund Davie Fulton: Your party insisted on putting in the rule.


Clarence Decatur Howe: I was never very strong on rules.


Stanley Howard Knowles: How well we know that!


Mr. Rowe:: We have observed that already.


Clarence Decatur Howe: This average return of 7 per cent is the amount necessary

to cover the crown corporation's operating and interest cost, and amortization of its investment in about 21 years.
Trans-Canada undertakes to purchase the northern Ontario section as soon as it can arrange the necessary finances, and has an option to purchase the section at any time, provided the crown corporation has received an annual return of 3-J per cent on its capital during the term of the lease. The purchase price is to be the total capital cost to the crown corporation, minus credits to depreciation arising from rental payments, but the purchase price is not to be less than the higher of either (a) total capital cost less amortization at 3i per cent per annum plus interest thereon compounded at 3J per cent annually; or (b) 70 per cent of the original capital cost. The rental payments described previously will result, as throughput grows, in payments which in due course will total more than interest plus the amortization at 3i per cent to be credited to Trans-Canada in the purchase price. Any such excess payments will represent a profit to the crown corporation or an accelerated amortization of its assets. Apart from the undertaking to purchase, it will in these circumstances become in the interest of Trans-Canada to purchase the northern Ontario section, since it cannot otherwise receive any benefit from these excess payments. The 70 per cent floor will give a further incentive to Trans-Canada to purchase the northern Ontario section.
This, in the government's opinion, is a prudent arrangement. It bridges the gap in distance and time that has been at the root of one of the main difficulties in getting an all-Canadian gas pipe line financed and launched. It does so in a way that enables the governments concerned to recover all their investment plus interest without imposing any unnecessary charges that would' reduce the return to the producer or raise the price to the consumer. It enables governments to avoid the problems inherent in ownership and operation of a pipe line, and offers the prospect of getting governments completely out of the business at any early stage.
In a sense the arrangement benefits the Trans-Canada Pipe Line Company. This is inescapable. But it does so only to the extent that it enables construction to get under way earlier than would otherwise have been the case. Once the pipe line is operating and the eastern Canadian market has been built up to the initial capacity of the eastern part of the line, the Trans-Canada Company must take over the northern Ontario section at a price which returns full cost and interest to
15, 1956	2169
Northern Ontario Pipe Line Corporation the government, or pay the government a profit. There is no element of subsidy or hand-out to the private company.
It might be asked: Why doesn't the government just wait until private enterprise can build the whole line without any intervention by government? This was one of the alternatives. But the governments of Canada and Ontario believe that there is general support throughout the country and in this house for limited and prudent intervention by government if, as a result, the construction of this all-Canadian pipe line can be speeded up.
Under its contract with the government, Trans-Canada has until May 1 next to demonstrate to the satisfaction of government that it has arranged for finances and commitments to carry through its entire construction program. That date was of course related to the time limits of the permits held by Trans-Canada at the time the agreement was completed from the petroleum and natural gas conservation board of Alberta and the Board of Transport Commissioners for Canada. At that date also many of Trans-Canada's supply and sales contracts are to be reviewed. It is therefore an appropriate time for government to examine Trans-Canada's situation afresh.
It has now become clearly improbable that Trans-Canada will be able to complete its financing arrangements by May 1. Officers of the company expect, however, to arrange and carry out a substantial amount of construction this year under interim financing. I am hopeful that they will be successful in this. Their prospects in this regard will become clear by May 1.
Hon. members will have noted from the press that on February 24 the Alberta petroleum and natural gas conservation board granted an extension of the various dates on which its permit to Trans-Canada is conditioned. The date for completion of finances is extended from April 30, 1956, to November 1, 1956. The time limit for commencement of construction is extended from June 30, 1956, to June 30, 1957. The limit for commencing removal of gas from Alberta is extended from December 31, 1956, to December 31, 1957.
If the board of transport commissioners should also see fit to extend the time limits on its permit to Trans-Canada-a matter which is entirely the board's affair-then this government would feel justified in considering favourably a request by Trans-Canada for an appropriate amendment of the time limit on its agreement with Trans-Canada. Any such extension would depend upon the progress Trans-Canada could demonstrate towards construction and firm financing of the proposed system.
2170	HOUSE OF
Northern Ontario Pipe Line Corporation Naturally neither this government nor the government of Ontario would be prepared to enable the proposed crown corporation to proceed with any actual construction of the northern Ontario section until the requisite financing for the balance of the Trans-Canada system was assured and its construction program established.
I turn now to the bill itself. It is intended to enable the government to carry out the agreement with Trans-Canada Pipe Lines Limited dated November 21, 1955, and the agreement with the government of Ontario set forth in the exchange of letters between Mr. Porter and myself dated November 21 and 22, 1955. There is no exact precedent for such a crown corporation financed jointly by this government and the government of a province, and it has proven difficult if not impossible to set forth in legislation the respective responsibilities and prerogatives of the respective governments. I wish therefore to state clearly at the outset that, although the language of the bill is more general than the language of the agreements, the purpose of the legislation is to enable the intent and purpose of these specific agreements to be carried out.
As an example, the bill provides for the establishment of a corporation consisting of a president and four other directors to be appointed by the governor in council upon the recommendation of the minister. The agreement with Ontario provides that the government of Canada would be entitled to nominate one more director than the government of Ontario and also, from among these, to appoint the chairman or president. What would happen in fact is that the Minister of Trade and Commerce would recommend to ;he governor in council the appointment of five directors, of whom two would have been nominated by the government of Ontario.
Similarly, the borrowing powers of the corporation have been phrased broadly, but '.he intent is to enable the corporation to borrow not only from Her Majesty in right of Canada but also from Ontario in accordance with the agreement with Ontario.
Aside from this one feature of being phrased broadly enough to encompass joint action with a province, and aside of course from the fact that it establishes the first crown corporation to construct and own a pipe line, the bill follows familiar paths and breaks no new ground. It makes the usual provisions for by-laws and related procedural matters for staff, including staff borrowed from the civil service, for the legal position of the corporation as an agent of Her Majesty and for payments in lieu of local taxes. Its powers are
rMr. Howe (Port Arthur).]

the normal general powers of a company, together with those specific powers required to enable it to construct, lease, and sell the northern Ontario section, which is defined in the schedule to the bill. It is brought under the Pipe Lines Act, as if it were a private pipe line company, with the exception of two sections which would have imposed upon the corporation certain procedures which would have consumed time without conferring any benefit upon the public or the interested parties.
As regards financing, the borrowing powers are, as I have said, a little unusual in one necessary respect. The ceiling on the amount the corporation is authorized to borrow is established to cover the presently estimated cost of the initial pipe line facilities, together with an amount to permit an increase of compression facilities in case these should be required early in the corporation's operations, making allowance for some increase in cost in case the present estimates prove low in relation to costs prevailing at the time of construction. The corporation is brought under those parts of the Financial Administration Act which are appropriate to such a corporation; it must submit an annual budget and its accounts are subject to audit by the Auditor General.
In short, the bill proceeds by tested methods, drawn largely from existing legislation and we believe wholly reconciled with existing legislation, to achieve a somewhat unusual purpose, the joint participation by this government and that of Ontario in the construction and temporary ownership of a vital section of a natural gas pipe line system. What we are here proposing meets the requirements of our established policy. It is a vital link in a plan which would give central Canada the benefit of a secure source of additional energy, and would give Alberta gas producers the benefits both of the central Canadian market and of a market for surplus gas in the United States. We believe this temporary help to private enterprise will benefit both producers and consumers, and will contribute to the continued increase of Canadian productivity. In particular it will make a new and needed fuel source available to a vast area in northern Ontario which could not otherwise have enjoyed its benefits.
Let us not forget that this natural gas transportation and distribution system is by far the largest ever undertaken as a single project anywhere in the world. It is to be expected that time will be consumed and problems will be encountered in bringing the project to completion. Already a great deal of effort and large sums of money have been devoted to it. Passage of this bill will speed up final

arrangements. My own estimate of the time element is that Alberta gas will be delivered in Montreal not later than the autumn of 1958. I believe that this is a conservative estimate of the construction period, having regard to all possible delays.


Mr. Drew:: Mr. Chairman, we supported the motion that the Speaker leave the chair, not because we approve of the motion now before the committee but because we wanted an opportunity before this committee to indicate why we think this resolution should be opposed.


Some hon. Members:: Oh, oh.


George Alexander Drew: In view of the comments from hon. members to my left I would point out that nothing is gained by the silly gesture they made this afternoon. After all, we have had very important debates here before-


Mr. Coldwell:: I rise on a point of order; I do not think that any action which is proper under the rules of this house should be described by another member of the house as a silly gesture.


Stanley Howard Knowles: Furthermore, it is out of order to reflect on a vote which has already been taken.


George Alexander Drew: We have had important debates before and we will have other important debates.


Major James William Coldwell: May I ask the chairman for his ruling?


George Alexander Drew: Mr. Chairman, I am quite ready to withdraw the word "silly" and say wholly ineffective.


Major James William Coldwell: That is a matter of opinion.


George Alexander Drew: The procedure is one which permits us to place before this committee the reasons which we hope will commend themselves to hon. members to our left as well as to others, more than my comment just did. May I say that the reason I made the comment was the derisive laughter which came from that source which I think was out of keeping with the procedure of this house just as much as any suggestion as to the intervention that was made by way of motion.
I hope that we shall discuss this as one of the most important issues that has come before this house. I trust that as a result of the discussion which will take place here we may conceivably have some reconsideration of the government's position.
There has been no reason at any time for any uncertainty as to the position of the Conservative party in regard to a measure of this kind. In this house and outside of the house we have been repeating over and
Northern Ontario Pipe Line Corporation over again that Canadians should recognize the unique opportunity that presents itself to us at this time to make use of the vast resources that have become available to us. We have emphasized the fact that it is the duty of Canadians to develop those resources for the benefit of Canadians themselves. We deferred comment in regard to this particular matter because we had expected that there would be some statement by the government in regard to the new agreement in view of the fact that it is perfectly obvious that the agreement which is now tabled in relation to the crown corporation that is projected cannot possibly be fulfilled and carried out. That has been made clear this afternoon by the minister. It is unfortunate that at this stage we are asked to discuss a subject when the nature of the agreement, in so far as the time factors are concerned and the way in which financing will be carried out, is left entirely uncertain.
The remarks of the right hon. minister have dealt generally with the question of the pipe line and its purpose. He has indicated that the purpose of this motion and the measure that would follow, if it is adopted, is to hasten the day when Alberta will have an outlet for its natural gas. This proposal would do the very opposite. This proposal is going to delay the delivery of gas by adopting a method that makes us dependent upon the whims of the federal power commission in Washington.
This government has placed itself in the humiliating and improper position where it is bound to wait until an agency of the government of the United States reaches a decision. We pride ourselves on our sovereignty and yet this sovereign parliament is asked to accept a proposal which does not leave us in the position where we can say when this will go ahead. We believe that the time has come to assert without any reservation that we want an all-Canadian pipe line under Canadian control which can be proceeded with right away to deliver Alberta gas to Ontario and Quebec and wherever else in the east it may be available.
What is now proposed will not achieve that result. What is now proposed makes this government dependent upon the decision of the federal power commission in Washington. That is not a position which this government now or at any other time should be prepared to accept.
The minister referred to hon. members possibly questioning why it is necessary to market gas in the United States. He said that there is in the United States an immediate customer load. There will not be a customer load unless and until the federal
2172	HOUSE OF
Northern Ontario Pipe Line Corporation power commission say that gas can be delivered. Estimates are given by those close to the federal power commission in Washington which are very definite, that it will be a long time before that permission is granted. In fact, this has shaped up into one of the biggest fights between conflicting interests in the United States that has occurred in years, and we are left by this proposal in a helpless position, unable to guide the course of events. If the sale of gas in the United States is necessary, then why put ourselves in this position? Why not deal with that as one problem and deal with the supply of gas into Canada as another?
The minister in his remarks repeated a statement to which reference has been made on other occasions. He said that control of this company is open to Canadians. That statement is a shallow pretence. That statement has no meaning and is not borne out by the facts. That statement, no matter what the intention may be, will have the effect of deceiving people unless it is pointed out that the very opposite is the situation. The minister repeated today that there is an agreement that the Canadian public will be offered 51 per cent of the voting stock. That is not so. He said on earlier occasions that Canadians would be offered 51 per cent of the voting stock. That is not so. What is provided in the agreement is that there will be an offering in Canada of 51 per cent of the ;otal amount that will be outstanding, including what is now issued.


William Earl Rowe: Quite a difference.


George Alexander Drew: That is a single issue. It does not mean at all 51 per cent of the control. It means simply that, in order to comply with that provision in the agreement, it is only necessary for the company to take the amount now issued, which is just under two million shares, and then issue an amount which would bear the relationship of 51 per cent to 49 per cent, which would be an amount slightly over two million shares, and they would have complied with the provision in the agreement.


Clarence Decatur Howe: That is not true.


George Alexander Drew: That is true, and section 6 of that agreement makes that clear. The minister is in the habit of making such inaccurate statements that this is not surprising coming from the same minister. That is, however, the correct interpretation of that section, no matter what was intended-


Clarence Decatur Howe: You think.


George Alexander Drew: If the minister will just forbear; after having made so many inaccurate remarks here, he might remain silent for a while and listen to a discussion of this subject. I repeat that this agreement does not assure any opportunity to Canadians to have control, and there is not the slightest chance in this world that these powerful United States interests who have control today are going to let that control pass out of their hands; none whatever. This venture is controlled by powerful United States interests, and they will hold that control-we cannot blame them for doing so-if they are permitted to proceed with an arrangement of this kind. But do not let the minister pretend to the Canadian public that he has any undertaking of any kind. He has no undertaking at all, that is, if he was correct in his answer in this house a few days ago when I asked him if there was an undertaking, and he said there was not. All that exists is an agreement between the parties interested. Section 6 of that agreement to which I have referred contains the reference to 51 per cent, but this is not 51 per cent of the voting control.	.
I am just dealing now with statements made by the minister which have some relation to the motion before us. The minister said, and these are the words he used:
If there is some uneasiness in this country about the extent and nature of United States investment in Canada, this is the wrong place to focus it.
This is the place to focus our concern about United States control of our great resources. This is the opportunity right now-


William Earl Rowe: And the only one.


George Alexander Drew: -and the only opportunity we have to express that concern. It is appropriate that we should express it, particularly in view of the fact that the minister held directly opposite views, until last year at any rate. We do not know when his opinion changed.
He spoke about the fact that there had not been criticism in other cases where there was control by United States financial interests of certain developments. Well, there is no public money being put up in those cases to assist them in their finance. There is, for instance, the case of the Westcoast Transmission Company, which is to carry gas from the Peace river through the mountains to the Pacific coast and to that part of the United States. They are doing that by private financing. Does the minister suggest that the Rocky mountains constitute an easy and populous area between the Peace river and the Pacific coast? I am inclined to think that the Rocky mountains are a more formidable barrier than the section of northern Ontario through

which this pipe line is to pass. It is not passing through a populous area where there will be many offshoots along the line. That company is financing that privately. For that very reason the considerations in that case are very different from the considerations that we should bear in mind in discussing the subject now before us.
The minister has said that it has now become improbable that financial arrangements can be carried out by May 1. That, of course, is perfectly obvious and is recognized. The result is that we are being asked to give this minister another blank cheque-


An hon. Member:: Hear, hear.


George Alexander Drew: I hear one of the hon. members opposite say "Hear, hear". The hon. members opposite are quite ready to give a blank cheque to a minister who has shown how improper it is to give him uncontrolled powers.


An hon. Member:: They do what they are told.


George Alexander Drew: They, of course, have been told by the same minister at a meeting here in Ottawa that it is appropriate for them to follow instructions whenever they are given. They have been told it is proper to toe the party line, and I regret that there is some indication they are going to follow those instructions on this occasion.


Stanley Howard Knowles: And now they must toe the party pipe line.


George Alexander Drew: It is perfectly clear that, when the government talks about hastening this development, it has no idea when it can go ahead. We want action, and we want to make it perfectly clear what is before this house. This is one of the most remarkable proposals ever made to the Canadian House of Commons. We are asked to declare by this motion:
That it is expedient to introduce a measure to provide for the constitution of the corporation to be known as the Northern Ontario Pipe Line Crown Corporation . . .
It is then proposed in the resolution that this crown corporation be set up for the purposes of:
. . . constructing, maintaining and operating a natural gas pipe line between the Ontario-Manitoba border and Kapuskasing . . .
It is further to have the power to lease this pipe line to Trans-Canada Pipe Lines Limited, with an option to purchase. All this means in simple terms-and I address these remarks particularly to the members opposite-that we are being asked to set up a crown corporation which will use public funds to assist
15, 1956	2173
Northern Ontario Pipe Line Corporation financial interests in the United States in establishing effective control over one of our major resources. I doubt if there is any precedent for such a proposal. Can anyone recall any case where any other government actually put up money to help financial interests control their own resources in this way?
I ask hon. members opposite if any one of them thinks that the congress of the United States would for a moment give serious consideration to a proposal that they use money of the American taxpayers to complete financial arrangements for some Canadian company to take control over resources of the United States. There is not an hon. member of this house who does not know that they would be laughed out of congress if they made any such suggestion. I submit, Mr. Chairman, that a proposal of this kind should be laughed out of the house. Unless any hon. member is prepared to say that he thinks the government of the United States would do this in the case of a Canadian company, then let him examine his conscience before he is prepared to say that it is expedient that we should do this here.


John Whitney Pickersgill: What about the Grand Trunk Western?


An hon. Member:: What about the Alaska highway?


George Alexander Drew: Let us keep in mind exactly what is before us and certainly not pay any attention to the interpolations that have just been made.


An hon. Member:: You asked a question.


George Alexander Drew: This is a project to assure government ownership of part and only part of the gas pipe line. When the minister talks about preferring this to government ownership he seems to forget that he is asking us to approve of government ownership. That is what this motion is, but it is government ownership of a hybrid form and with a strange purpose.
All Canadians want this pipe line built. I am not in any doubt about that. Alberta has natural gas to sell, vast quantities of it, and Ontario and Quebec want that gas. A line should have been built long ago and would have been built if it had not been for the fumbling, bumbling and confusion of this government. This company was incorporated by a bill in this house in 1951, five years ago. Hon. members who were here at that time will remember the impatience of the minister when there-was some delay in passing the bill. The government wanted action right away. Their chosen instrument must be assisted and allowed to go ahead five years
2174	HOUSE OF
Northern Ontario Pipe Line Corporation ago and yet they do not even know now when the proposal they have put before us could be completed.
If there has been any delay it has been the delay of this government in failing to deal with a proposal that was before the house five years ago. We want to see this Canadian gas moving and we want to see it moving at prices that will be fair to the producer in Alberta and fair to the consumer in Ontario and Quebec. It is particularly important that gas be made available to communities in northern Ontario, that great central arch which joins eastern and western Canada. It is not merely a part of Ontario. It is the central area of this continent and that area does need this natural gas.
It does not follow, however, that this is the plan which should be adopted to fulfil that purpose. In fact, and I should like hon. members opposite to bear this in mind particularly, the government disliked this plan very much only eight months ago. They said so. Let me read what the Prime Minister said on July 8 last year, as found at page 5862 of Hansard. This is what the Prime Minister said:
There are three alternatives that are being carefully investigated and about which, of course, the commitments of many different interests are required. There is one that we prefer to the other two. There is a third that we do not like as well even as the second. The officials of the Canadian company are endeavouring to get the commitments that would provide for the implementing of No. 1. They are also ascertaining whether, in the event that is not possible, they could get the commitments that would be necessary for the implementation of No. 2. That is the situation. I hope we shall not have to fall back on No. 3.
The government, Mr. Chairman, is falling back on No. 3. I hope the Prime Minister will explain to us at the earliest possible opportunity exactly why the government is falling back on a plan which he disliked eight months ago. I think we should know from the Prime Minister what the other plans were and why they could not be carried out. We have not yet had that explained. We have sought over and over again to obtain information in the house in regard to what the government was doing. We have not been able to obtain information from the Minister of Trade and Commerce at any time. In fact, it was only a few days after the Prime Minister's statement that the Minister of Trade and Commerce left the impression that he did not know about any such three plans. The Prime Minister's statement was made on July 8. On July 14 of last year, as recorded at page 6156 of Hansard, the Minister of Trade and Commerce said:
Mr. Chairman, I am unable to throw any light on the pipe line situation other than to say that 

every possibility is being studied, and studied intensively. I hope a solution can be announced before long, but I cannot announce it today. My hon. friend has the advantage of me if he knows what propositions one, two and three are; I do not.
That was six days after the Prime Minister had said: We have three propositions; we like the first best, we like the second not quite so well and we do not like the third. Yet the Minister of Trade and Commerce, who sits beside him in cabinet as well as in the house, had not even heard about it or at least he said so. Does any hon. member of this house wonder why we accept every statement from the Minister of Trade and Commerce with a very large grain of salt? In view of the fact that we have not been able to get the information from the Minister of Trade and Commerce as to what the three plans were and what happened to the first two plans, we have a right to know from the Prime Minister why he is now supporting the third plan which he did not like eight months ago and told us so. We certainly should have that information. It cannot be because the minister had not heard of the other two that the government is falling back on the third plan which the Prime Minister hoped they would not be called upon to do.
It is generally stated that plan No. 1 called for the guaranteeing of bonds, and plan No. 2 called for advances by the industrial development bank. Those two proposals fell through. The house will wait with interest to find out what the reasons were. If there were no other ground, Mr. Chairman, for opposing this motion that the government commit public funds for this purpose, there would be the strongest reasons for opposing it when we have no evidence before us that the pipe line cannot be financed privately. On the contrary, the basis upon which Trans-Canada was given permission to proceed was that it could finance an all-Canadian pipe line. Trans-Canada did not get permission to proceed because the board of transport commissioners, the government or anyone else liked the colour of their eyes or the way they looked when they appeared. They got that permission because they gave an undertaking that they could finance an all-Canadian line without any subsidiary lines. That was the basis. That was asserted at the time of incorporation. It was asserted on many different occasions after that.
If the members of this house are to act with some measure of responsibility in regard to this motion, then surely they must review the facts which lead us up to this present situation. Let us recall what the sponsor of the bill of incorporation said when it was presented to the House of Commons. I refer to the bill of incorporation of Trans-Canada

Pipe Lines Limited. The hon. member for Vegreville, who introduced the measure, as reported at page 736 of Hansard for February 27, 1951, just over five years ago, said this:
. . . it is an all-Canadian route and, with the total volume of gas consumed in Canada, complete control will be ensured in this country.
That was the basis upon which that bill was voted on in this house in February of 1951. Then the bill went before the standing committee on railways, canals and telegraph lines. Mr. Frank A. Schultz, representing the company, appeared before that committee on March 6, 1951. At page 10 of the minutes and proceedings of that committee for that day we find the following words of Mr. Schultz:
The second consideration was that it should be an all-Canadian project, that it would be Canadian gas transported over an all-Canadian line, and that 100 per cent of the consumption would be in Canadian cities.
Those are not the words of any hon. member on this side of the house. Those are the words of the man who was asking for approval of their application. That statement was clear enough. That statement was the basis upon which they asked for consideration. It was to be an all-Canadian project carrying Canadian gas over an all-Canadian line with 100 per cent of the gas consumed in Canadian cities.
Then later in the same day Mr. Schultz said this, as appears in the same report:
You may be interested to know about the marketing situation. We are satisfied at this stage that adequate markets exist in the eastern part of Canada to consume all the gas that we can produce and move through this line.
Mr. Chairman, if that statement was made in good faith, what has happened in the meantime? One thing that has happened in the meantime is that Ontario has enormously expanded her industrial production, as has the province of Quebec. The population of Ontario and Quebec has grown at a tremendous rate. The market is very much greater now than it was at the time this statement was made as the basis upon which they sought consideration.
On the same day that Mr. Schultz made that statement, the counsel for the company said this to the committee, and I quote his words from the report:
... it is inconceivable that a company that has gone to the lengths this company has, both in telling parliament and in telling the public, and in spending money in the investigations it has made of markets across the country, and on engaging engineers to survey routes, would with a straight face go to the transport board and say: 'Notwithstanding all we have said, we now want to apply for a route different than we said we were going to apply for'.
Northern Ontario Pipe Line Corporation
Mr. Chairman, is the company coming with a straight face and now saying it cannot finance an all-Canadian pipe line when the opportunities for financing are far greater than they were five years ago? I want to read the next words used by the counsel, and I quote from the report:
Even if they did that, the transport board, I think, would refuse the application because the company would have showed bad faith.
Those are the words of their counsel, not ours; if the company changed from the assertion they made at that time, they would have showed bad faith. That assertion was used to assist the company in obtaining consideration for the application it was making. What of the situation where the company obtained its permission almost entirely on the ground that it could build an all-Canadian pipe line and finance that whole line to supply gas to eastern Canada? If it was not good faith, in the words of the counsel for the company, to change the route, it was certainly not good faith to change their position with regard to financing.
Just when did the company come to the conclusion that it could not finance this northern Ontario pipe line? We have not been told. It was not in the mind of Mr. Clint W. Murchison, the moving spirit behind this company in its early stages, when he wrote a letter addressed to the Minister of Trade and Commerce on March 7 of last year. This is what Mr. Murchison, who has been shown such great consideration by the Minister of Trade and Commerce at all stages in these proceedings, said in the letter he wrote to the minister on March 7 of last year:
We first came into western Canada about five years ago, and at that time we heard of pipe lines to Chicago, Minneapolis and other points south of the Canadian border. We immediately conceived the idea of an all-Canadian pipe line, knowing in the beginning that anyone would take the routes into Minneapolis and Chicago as being much more remunerative and easier to finance, but feeling that the Canadian citizens were of such patriotism that they wanted a fuel system within the confines of their own boundaries to the extent that they would not be subjected to the vicissitudes of American politics. We frankly gave no serious thought to anything but the Trans-Canada Pipe Line and tossed the other routes out as impractical in so far as it concerned the people of eastern Canada.
Mr. Murchison then went on to explain certain other details of what had taken place and he said this. I am quoting from that same letter:
To this end Trans-Canada Pipe Lines has asked the industrial development bank to commit for $70 million of securities. We are willing for them to couch their terms so stringently that if we are not able to repay them for all the moneys they have advanced by the next five years, we will allow them to foreclose their position and take us out of the picture altogether.

Northern Ontario Pipe Line Corporation
That was the confident statement of Mr. Murchison on March 7 of last year. When did he change his mind? We have not been told. When did he change his mind? We should know, because he was the moving spirit in the days when this company was given permission to proceed.
Nor was it only Trans-Canada Pipe Lines Limited that was so definite about what could be done. On March 13, 1953, as recorded at page 2929 of Hansard, the Minister of Trade and Commerce said this:
Therefore the policy that has governed the export of electrical energy since 1907 must apply, within reason, to the export of natural gas. Canada has consistently refused to authorize firm contracts for the export of electrical energy, and this in spite of great pressure at times from producers of electrical energy. That consistent policy has paid large dividends to the Canadian economy, in that our sources of electrical energy have been preserved to our own economy.
Therefore the policy of the government of Canada is to refuse permits for moving natural gas by pipe line across an international boundary until such time as we are convinced that there can be no economic use, present or future, for that natural gas within Canada.
That same day, as reported at page 2930 of Hansard, the Minister of Trade and Commerce told the members of the House of Commons that the government had, and I quote his words:-
. . . reason to believe that it is economically feasible to build a gas pipe line from southern Alberta to Toronto and Montreal, serving the intervening Canadian cities, and government policy will require that Canadian gas be used in Canada accordingly.
Now, Mr. Chairman, it was upon that basis, and upon the confident expression of the minister that this was an economic possibility, that this whole matter proceeded. Early in 1954 the picture changed. Western Pipe Lines were seeking permission to carry gas south through Manitoba to the Min-neapolis-St. Paul market. The Minister of Trade and Commerce at that time performed a shot-gun marriage and those two companies were brought together, the minister officiating at this strange ceremony. The result of this alliance was that Trans-Canada was no longer an all-Canadian line, but a line which divided in Manitoba and would carry gas east in one pipe line and south into the United States by another.
There was no suggestion at that time that Trans-Canada Pipe Lines, in its expanded form, could not finance the whole operation privately. In fact, having regard to what we are told about the value of the market in the United States, it should have been that much easier to finance the Canadian part of the line. On the contrary, they submitted evidence to the board of transport commissioners which convinced that very

responsible body that Trans-Canada Pipe Lines could finance it. In a judgment dated July 24, 1954, Mr. Justice Kearney said, as reported at page 190:
While bearing in mind that we are dealing with estimates, nevertheless, the board is convinced that such estimates have made reasonable allowance for foreseeable contingencies and have been prepared by skilled and reliable estimators.	[DOT]
Mr. Justice Kearney referred to evidence submitted to the board that the line was economically feasible and could be successfully financed. It was upon this, and other similar evidence, that the chief commissioner and other members of the board agreed that the permit could be granted. In 1954 Mr. Shultz again appeared before the House of Commons committee on railways, canals and telegraph lines. As quoted at page 45 of their report, in 1954 these were his words:
Our experts have never claimed that we needed any help in doing this job.
The Minister of Trade and Commerce assured the nation that this line could be financed privately, and he so assured this nation a year ago now, because he wrote a letter on March 8, 1955, in which these words appear. The letter was tabled in this house in answer to an order for return. I quote the words of the minister:
All studies indicate that the line is capable of being financed privately and it has been decided to defer construction for one year and let matters take their normal course.
When did this picture change, Mr. Chairman? When did the minister decide that the normal course could not be followed? When did this whole proposal suddenly take on new form? It did not take on new form because the financial situation was more difficult. We have been told over and over again of our improving national income; we have been told of booming business in the areas to which this pipe line was to go. If the minister was so confident on March 8 of last year that this could be financed privately, why does he now come before us and leave the impression that it cannot? What evidence have we that this line cannot be fully financed privately, as the Minister of Trade and Commerce thought it could less than a year ago? There is no evidence; none at all. The evidence is all to the contrary. Nor has any evidence to that effect been given to the board of transport commissioners.
The company have appeared before the board of transport commissioners on different occasions. They appeared there on July 24, 1954, and again on April 28, 1955, on September 21, 1955, and on September 15,
MARCH IS, 1956	2177
1955. On no single occasion did they make the statement that this could not be financed privately.
At the beginning of this session I asked that this whole question be submitted to a committee, as it had been in 1951. On January 12 I asked that it go before a committee. I asked again, on January 13. I pointed out that it would be helpful if we could obtain the facts in regard to this case, facts which are not yet available to us. It was refused. Had that request been granted we would now have information upon which we could act. As it is, the only definite statements we have are the statements of the sponsor of the bill in 1951, the statements made before the standing committee on railways, canals and telegraph lines in 1951 and in 1954, and the statements in the judgment of the board of transport commissioners in July, 1954, indicating their belief that this could be financed privately.
All the evidence before us is that this can be financed privately. We believe it can be. We believe this can be financed privately if there was ever any good faith at all in the statements of those who appeared in support of the application of this company. This company now has financial interests behind it far greater than those who supported it at the time the application was made. This company has financial interests behind it far greater than those who were behind it last March, when the Minister of Trade and Commerce was so confident that it could be financed privately. The present distribution of the ownership of this enterprise shows also that the control is in the hands of financial interests in the United States; that it is definitely under the control of these immensely powerful financial interests: Canadian Gulf, Hudson Bay Oil and Gas and Tennessee Gas Transmission, controlled in the United States, which have been added to the original applicants. The distribution of ownership at present is as follows: Canadian Delhi, which is Mr. Murchison's company, 24J per cent; Western Pipe Lines, 24J per cent; Canadian Gulf, 17 per cent; Hudson Bay Oil and Gas, 17 per cent; Tennessee Gas Transmission, 17 per cent.
When we are left with the impression that this financial venture is so large that the government must step in, just let us see what some of these financial interests are like. Tennessee Gas Transmission alone has assets in the neighbourhood of $870 million.


William Earl Rowe: They could build it themselves.


George Alexander Drew: They could build it themselves. They would not have any difficulty whatever in putting up the entire equity
Northern Ontario Pipe Line Corporation to carry out this venture. They are doing it all the time in the United States. Those big organizations over there have built networks of pipe lines that look like the veins in the human body when you look at a map showing pipe lines in the United States. They could have undertaken this if there was the slightest suggestion of good faith in the assertion of the original applicants that they believed they could finance this project. There can be no question but that the combined financial interests represented by these five organizations could finance this whole venture today.
On the grounds of the evidence before us, Mr. Chairman, I submit that every hon. member who accepts any measure of responsibility should declare that it is not expedient that public money be put into a crown corporation to assist those financial interests in the United States to obtain control over these great Canadian resources. That is what we are being asked to do by this motion. We are not being asked to deal with any aspect of the bill that will come before us. We are being asked to declare that it is expedient that this be done. I suggest, Mr. Chairman, that all the evidence that has been furnished demonstrates that it is not expedient, but that it is most improper.
If these people cannot finance this venture, then they are in default. If they cannot finance the venture, then they have lost the right they obtained on the basis of that claim. If they cannot finance it, then some other arrangement should be made. If they cannot finance it, then this government long ago should have entered into negotiations which would have sought to provide Canadian control and Canadian financing of this great venture.
In any event this whole question should have been submitted at the beginning of this session to a select committee or to the standing committee on railways, canals and telegraph lines, so we could obtain the facts and find out how a pipe line can be built to carry gas from Alberta to eastern Canada with the greatest possible speed. That is what we want. It was not done at that time.
I hope, Mr. Chairman, that the government will reconsider its position. I hope that it will postpone the debate on this motion and refer this matter now to the committee. Nothing is going to be delayed by so doing. The government has assured delay by the proposal it has entered into. It has granted delay after delay since 1951, and now it has assured delay by making us dependent upon the decision of the federal power commission in Washington.
2178	HOUSE OF
Northern Ontario Pipe Line Corporation
At this time I urgently place my first proposition before the government and particularly before the Prime Minister, who told this house last year that he did not like this third method. My earnest request to the government and to the Prime Minister is that they expedite this matter by referring it to a committee where we can get the evidence and learn what the facts are, and then from that evidence we can find out how Alberta gas can best be brought as quickly as possible to the east for delivery in Ontario, Quebec and the intervening markets across the country. All the evidence that has been furnished and all the evidence on record denies the right of this government to declare that it is expedient to adopt this course. I suggest that hon. members would be acting in an utterly irresponsible manner if, in the face of this evidence which is a matter of record, they declared it was expedient that we proceed in this manner.
However, Mr. Chairman, this matter goes far beyond the question of whether there is evidence that the project cannot be financed. Are we in any event going to approve of the plan that is now before us? We are asked to give our support to a proposal which places the handling of Canadian gas under the control of powerful United States interests, where it will remain. We are being asked to help with public money to place control in the hands of United States financial interests whose main concern is the delivery of gas to the United States. That is the market in which they are interested. The Canadian market is only a secondary consideration to them. It is true that they want Canadian gas and as much of it as they can get, but they are not showing nearly the same interest in developing the Canadian market.
The things we have been speaking of must of necessity be done by some other agreement than that which is now before us. We should not be asked to give this minister or this government a blank cheque. We should consider the situation only when we know we are going to have a definite agreement before us. We know now that the agreement we will be called upon to consider is not a real agreement at all. It makes a farce of these proceedings. That is all the more reason the government should withdraw this motion, let it stand and refer the whole matter to a committee.
What of the declared policy of the government in regard to the control of our natural resources? Do not let the government try to ask us to interpret its policy. It has already stated its policy. It has declared the similarity between natural gas and electricity. In view of the fact that the government itself


has declared that we must conserve those resources and that as far as possible the same principles should apply to gas that apply in the case of electricity, then we might ask when did the government change its mind.
We have a right to know that. We have a right to ask that question before a committee which will ascertain all the facts. We know perfectly well that on a number of occasions this government has refused the export of electricity although there might have been an immediate profit gained by the export of that electricity to markets in the United States. We know that this government has refused to permit water to flow from Canada into the United States for the purpose of producing electricity there. The government has drawn a similarity between electricity and gas. Let the government follow that policy or, if it declares it does not intend to, then the government should let us know when it changed that policy and what the present policy is.
Certainly nothing that has happened would explain the situation which the government presents to us. It was suggested today that this is not a monopoly. This method will provide a real and complete monopoly over one of our economic lifelines. This would be set up under the control of United States interests with the assistance of large sums of Canadian taxpayers' money.
We come now to the next stage. Because of its interest in the 675 miles of government-owned pipe line from Manitoba to Kapuska-sing, this government would be bound to assure that it was a monopoly. There could be no doubt about it. The government, by its course, is assuring that it is creating a monopoly, and it is placing that monopoly in hands outside of Canada. It is assuring a long-term monopoly. If it is sound to follow this course, I hope we will then have an explanation from the Prime Minister as to why the government did not follow one of the two other courses which the government said it preferred. The Prime Minister has told us that either of the other courses would have been better than this. If the reports we receive are correct I am sure that most hon. members, including most hon. members opposite, will agree in their own minds that that is true.
The government recognizes that Canadians are concerned about the matter of control. The government has left no doubt in our minds that it recognizes that the people of Canada are greatly concerned. That is why the government keeps talking about this 51 per cent interest. The reason the Minister of Trade and Commerce raised that myth about the 51 per cent interest being assured

to Canadians is that he and the government recognize that the people of Canada are concerned about where the control of this company lies. It is just one of those changes in wording which shows how difficult it sometimes is to follow the statements of the Minister of Trade and Commerce.
Speaking to the Canadian club in Toronto on January 30, 1956, the Minister of Trade and Commerce used these words, and I quote from the text of the speech handed out from his office:
Trans-Canada Pipe Lines have, in addition, undertaken that when public financing takes place, at least 51 per cent of the total issue of voting stock will be offered to Canadians.
There is no agreement of any kind which suggests any such thing. The government could not make it enforceable if it wanted to. In any event the government has no undertaking; at least that is what the Minister of Trade and Commerce has told us.


William Earl Rowe: It is a political hope.


George Alexander Drew: This is nothing more than an attempt to beguile the Canadian people into believing that their concern is without ground. The government knows that the people want something done, and it wishes to create the impression that it is taking steps to do it. Surely, Mr. Chairman, we are not going to be called upon to wait until the federal power commission in the United States makes up its mind. Surely we are not going to change our whole course and go in for public ownership without an explanation as to why this government has abandoned private ownership. Do not let the government tell us that this is not public ownership. It is just as much public ownership for 675 miles as it is for the whole line.
The Minister of Trade and Commerce referred to the desires of the socialists in this case.


Clarence Decatur Howe: I was including you.


George Alexander Drew: I should think that is the kind of remark we would expect from the Minister of Trade and Commerce. If in this particular case the Minister of Trade and Commerce is seeking to demonstrate that there is socialism in public ownership, then this government has declared for socialism because it is asking us now to approve of a publicly owned pipe line which would extend 675 miles from Manitoba to Kapuskasing.
I do not agree at all that this is socialism. I do not agree that public ownership under appropriate conditions is socialism. It would be rather difficult for me to contend that it was in view of my fairly extended association with the largest example of public
Northern Ontario Pipe Line Corporation ownership in Canada, the Hydro Electric Power Commission of the province of Ontario.
We believe this can be done by private enterprise as was recommended. We believe it is the duty of the government to promote that opportunity. We believe the government should now take steps to reorganize Trans-Canada Pipe Lines. We believe there should be an all-Canadian line which would be entirely independent of any decision made at Washington. We believe that Trans-Canada Pipe Lines as an all-Canadian pipe line should be called upon to carry out its promises made to this parliament in 1951, 1953, 1954 and again in 1955. Furthermore we believe that this company can do it on the basis of the present financial interests, but we do demand that this government assures Canadian control of that enterprise.
The Minister of Trade and Commerce talks about Canadians being reluctant to invest, but it is no wonder they are reluctant to invest when they are denied control as is being denied in so many cases. The Minister of Trade and Commerce has read to us the list of directors of this company. They are all highly respected Canadian businessmen, they are men who would make admirable directors of an all-Canadian company operating within Canada. I would hope it would be possible for them to operate an all-Canadian company, Canadian-financed, in ways this government has already considered, in ways the Prime Minister referred to only eight months ago as being the ways in which he preferred that this should be done.
The Minister of Trade and Commerce spent some time speaking about the position of Ontario. It is well known that Ontario made another recommendation to this government. It is well known that Ontario prefers another method. It is well known that Ontario only adopted the course they have adopted because they want gas in Ontario. They have no control over this. Any talk of this being a joint crown corporation is nonsense. It is a crown corporation set up by this government. There is no legal structure under which a joint crown corporation can be set up. That is eyewash, that is an attempt to deceive the people of this country. It is a crown company set up by this government. They decided, and then they told the Ontario government what they were going to do. The recommendations of that government were not regarded. The Prime Minister knows perfectly well that this is not the course that was recommended by the government of Ontario. The premier of Ontario made that
2180	HOUSE OF
Northern Ontario Pipe Line Corporation perfectly clear when this subject was under debate in the Ontario legislature only a short time ago.
This proposal is bad in every respect. It is a bad compromise between public ownership and private ownership. It is neither flesh nor fowl nor good red herring. It is public ownership without any assurance that it will ever be private ownership unless it suits the people who are favoured. It could be a segment all by itself, and for that reason we have to consider the stage beyond. It is a segment of this great financial empire that has been conceived by Mr. Clint Murchison, who expressed such confidence only a year ago in his letter to the Minister of Trade and Commerce.
This segment might be left as an ineffective unit in the pipe-line system. What would the government do then? Would they leave it idle? They could not; no government could. Therefore if it comes to the stage where this government forces through an unnecessary venture of this kind, then there is only one thing to do and that is build the whole pipe line and not just part of it, and have control over the whole line. I repeat, though, that I do not believe that is necessary.


Stanley Howard Knowles: That is where you are wrong.


George Alexander Drew: I know I am not wrong. I believe this can be financed. I repeat that if this cannot be financed in this prosperous country with the amount of money that is being earned in this country today, then the statements which the minister put before this house misrepresented the facts to the house, and the statements upon which this company got permission to proceed were gross misrepresentations of their expectations. I hope we do not have to come to any such conclusion.
The Canadian government must accept full responsibility for the situation with which we are confronted. This is not the first time the Canadian government has been called upon to consider the problems of that northern stretch. The Minister of Trade and Commerce referred to the problems created by the northern Ontario arch which joins eastern and western Canada. That problem was faced by a Conservative government many years ago when this country had a small population and very limited financial resources.
There is a very real parallel between the construction of the Canadian Pacific Railway and the construction of a carrier of this type through that same area and across Canada. They did not have any financial group of this kind, but they insisted that it be Canadian controlled. They refused to go to
(Mr. Drew.]

Chicago for their finances at that time. As early as 1871, when applications were being made to build the Canadian Pacific Railway, Sir John Macdonald wrote these words:
You may depend upon It, we will see that Canadian interests are fully protected and that no American ring will be allowed to get control over it.
He stuck by that principle and today we know the result. It made Canada one nation. Two courses were open. The Liberals of those days talked about the insanity of nationalism, they talked about the fact that there should not be nationalism that sought to have Canadian control of this kind; nevertheless the government insisted upon it. There is not an hon. member here who can have any doubt that under the immense economic pressures that would have been exerted by the colossus to the south it would have been doubtful whether western Canada could have remained an economic part of Canada as a whole if Sir John Macdonald had not had the courage he showed at that time. Commercial union was being proposed by Liberal members of parliament of those days, members of the then opposition. In spite of the opposition of Liberal members at that time steps were taken that made this country one nation.
I would remind hon. members, and also recall to the Prime Minister, that it was not necessary to have a publicly owned segment of the Canadian Pacific Railway. The government did get behind the railway. The government did show its confidence in the railway at a very difficult time. But times are not nearly so difficult now. A country with a $26 billion annual income is in a much better position to take the steps that are necessary to assure this as an all-Canadian development today.
Two courses are open to this government. One is to take full advantage of the Canadian market and follow a method that will carry out the original intention of this government. The other is to let the sale of gas be dictated by United States interests, who will in turn tell us what we can do. Make no mistake about it; in a very real measure we are being called upon to sell our birthright by this proposal. It is perfectly clear that Canadian enterprises are going to pay more for tlie gas than their corresponding competitors in the United States. The agreements already filed in Washington in support of the application for the right to export Canadian gas show perfectly clearly that prices there will be well below prices available to Canadian competitors in the same field. That is something that certainly should be borne in mind.
When the Minister of Trade and Commerce tells us about the arrangements that have

been made and says that we are being asked only to approve of a method that will avoid public ownership, let us remember that that is not the proposal. It is to put up Canadian money to assure the financing of this operation in the hands of foreign interests. Then let us see what happens, as disclosed by the applications at Washington. It is shown that of the 200 million cubic feet a day that they propose to export at Emerson, 152 million cubic feet will be taken up by three companies or will be alternated in supply for other gas used by those companies.
These are the three companies, and they are extremely interesting companies in view of the broad situation that has developed. The first is United States Steel in Chicago. Its contract is filed, showing it will take 70 million cubic feet a day. The second is Inland Steel at Chicago, which will take 45 million cubic feet a day. The third is Iron Ranges Natural Gas of Minnesota, which supplies iron developments in the Mesabi area and whose contract is for 37 million cubic feet a day. This makes a total of 152 million cubic feet.
Do not let anyone suggest that this is not the use that is to be made of this gas, because those contracts are filed in support of this application for export. Whether those contracts would be filled directly by Canadian gas or whether there would be an alternation through the use of Canadian gas is unimportant. What is going to happen if that gas goes there? Let us see what an interesting thing this is.
What an interesting combination of events. We have seen what comes from the west. Let us look to the east. Canada is spending large sums of money in building the St. Lawrence seaway. A few days ago the president of the Canadian seaway authority, Hon. Lionel Chevrier, explained that the reason we now have the seaway is that the United States wants iron ore. He explained that the main cargo shipments through the seaway will be iron ore. This is very interesting. This great seaway that we are helping to build is going to carry iron ore through the lakes to mills where it will be processed with Canadian gas.


Edmund Davie Fulton: Where is the iron ore coming from?


George Alexander Drew: The iron ore will be carried to United States companies, which in turn will be using Canadian gas at less than the price for which our steel companies can get gas.


William Earl Rowe: Canadian ore, too.


George Alexander Drew: Of course, that is Canadian ore from eastern Canada that I am speaking
Northern Ontario Pipe Line Corporation about. It may be easier to export natural gas, but we should make sure that we have our own supply of natural gas in the future. We should remember that gas pipe lines in the United States are hardly able to keep pace with demand there. Even our enormous resources will not keep up with our demand if we get too deeply involved in that network in the United States, which is now being pressed forward at such a rate. New discoveries, in fact, are not keeping pace with demand in some areas; some contracts are actually in default because of the shortage of gas in some parts of the United States today.
Past history shows that once United States interests get control of these resources, they will protect their own consumers. That is their legitimate right. I suggest we make sure, as representatives of the people of Canada, that we protect our own consumers by the course we follow in the House of Commons. There may be difficulties, as I have said before and as the Minister of Trade and Commerce has emphasized. However, those difficulties are insignificant when compared with the difficulties faced by Sir John A. Macdonald and Sir George Etienne Cartier as they stood shoulder to shoulder at the time they brought this country together by means of another common carrier.
Had Canadians not been prepared to make great efforts and to make equally great sacrifices in the early days of Canada, we would not have survived as a nation. There can be no doubt about that fact. Today the demand is just as great, because we are at an hour of decision in this country. We have to decide not only a policy for this particular pipe line but we have to decide whether or not the time has come to follow a definite plan of conserving and developing Canadian resources for the advantage of Canadians here in Canada. Contrary to what the Minister of Trade and Commerce has said, this is the occasion to focus attention on our resources. This is the only place to do so, and this is an opportunity to declare our economic independence of the United States. This is the time to plan to make full use of the resources that God has given us.
The day may seem long past when there was any uncertainty about Canada's future as a sovereign nation, but the principle is the same. No matter how friendly any other nation may be, I submit that it is our duty as the representatives of the people of Canada to follow a course that will assure Canada's economic, as well as political, independence. That cause is not served by the resolution now presented to us.
I submit that it is not expedient that we support this plan to assist in the handing over
2182	HOUSE OF
Northern Ontario Pipe Line Corporation of these resources. I urge the government once again to refer this matter to the appropriate standing committee of this house, or to a select committee. Let us get at the facts. Let us also find out when the government's position changed. Let us find out when there was any change in the position of the company. We have no evidence from them that there has been any change.
Let it also be declared by the government what steps they will take to proceed with an all-Canadian pipe line without delay, to bring natural gas from Alberta to the markets of eastern Canada. When the Minister of Trade and Commerce speaks about the desirability of markets in the United States, may I emphasize the fact that we have at no time suggested there should be no export. What we do say is, let us end this humiliating position where the government is dependent upon the whims of the commission in Washington. Let this government decide on the development of an all-Canadian line. It will then be in a position to lead from strength and not from weakness. If the United States is ready to accept gas from Canada, then let that gas be exported under proper terms of conservation and proper terms of control. Let us not await their desires. Let us act as Canadians on this occasion in dealing with our own resources.
When it is suggested that this is such a vast enterprise, have Canadians forgotten that we have already built many pipe lines? We have constructed in Canada many oil and gas pipe lines since the war. In fact, in the last eight years alone $600 million has been spent on oil and gas pipe lines in Canada, and on the lines in the United States which are tied in with these pipe lines another $200 million. The whole of that $800 million has been private investment. Why should we be so alarmed, why should we be so concerned about this prospect now before us?
I should like to emphasize one point. There is a distinction between the handling of electricity and the handling of gas. You can go and measure with the greatest accuracy the potential power of a great waterfall. You harness that waterfall, tie it into the transmission line and the water continues to flow. Gas is not the same. It is a wasting asset. In order to keep up a gas supply, new wells must be discovered, new fields must be found. The evidence is very strong to support the belief that private initiative and the enterprise of individuals are needed to go and find these new sources of gas. Therefore I would hope that we would be able to keep this as a privately financed enterprise with the sources being found in the way they are now.


I would also point out that we would be getting involved in a system that presents many difficulties if it should be found necessary to enter into a publicly owned system, because many of the collecting points would be drawing gas from privately owned fields. It will be almost impossible to divide the interests in that way. Therefore it seems obvious that private enterprise, in developing sources of supply and arranging contracts for distribution, is desirable.
Before I close I want to put certain suggestions before the house and for the consideration of the government, in the hope that they may be prepared to listen to the words of the Prime Minister when he told the house last year that he did not like this method. First, refer the whole question immediately to a committee of this house to obtain the facts and make appropriate recommendations. Second, insist upon the reorganization of Trans-Canada Pipe Lines as an all-Canadian company which can proceed immediately and under Canadian control. Third, if Trans-Canada cannot carry out its undertaking, then open the whole matter and permit new interests to make their proposals for an allCanadian line, Canadian controlled. Fourth, if it can be shown, and I doubt that it is so, that part of the pipe line must be built as the government asserts on this occasion, then instead of building a part which could become an orphan under certain circumstances in the future, let them build the whole pipe line and lease it for operation under Canadian control.
By one of these methods, Mr. Chairman, Canada's main gas pipe line can be returned to the control of Canadians as it should be. This is our chance here in the House of Commons to mark a turning point in the greater control by Canadians of their own resources. Let this be a declaration not only in relation to natural gas but in relation to our great resources generally, not in any spirit of selfishness, not in any narrow approach but rather with the idea that as trustees for future generations of Canadians, along with any export that may be carried out under wise and appropriate conservation and control, our main purpose will be the future welfare of Canadians themselves.
We have been asserting this proposition for a long time. I find it difficult to understand how there could have been any doubt about that position. But, Mr. Chairman, on this occasion the greatest responsibility is on the opposite side of the house.


An hon. Member:: I will take it.


George Alexander Drew: I hear one hon. member amongst the Liberals to my right saying "I will take it." I hope that for once we will see some

of the Liberal members of the house stating in the house the beliefs they state outside. I hope that for once they will not follow the instructions of the Minister of Trade and Commerce that they must toe the party line.
I hope that for once, on a great issue of this kind, a voice will be raised from the other side which is consistent with the point of view being expressed across Canada at this time.


Some hon. Members:: Oh, oh.


George Alexander Drew: Instead of the kind of laughter that I hear from some of the vacuous faces at which I am called upon to gaze at this time [DOT] may I suggest-


Mr. McCann:: Look in the mirror.


An hon. Member:: Look at your own people.


George Alexander Drew: Oh, Mr. Chairman, that certainly is fully in order and perfectly accurate.


An hon. Member:: Just keep on talking. We are here.


George Alexander Drew: Mr. Chairman, instead of interpolations of the kind we have just heard I would have hoped that we might have heard one of the Liberals opposite speaking up for Canada.


Major James William Coldwell: Mr. Chairman, this afternoon the Leader of the Opposition has covered a great deal of ground. Indeed, he covered a great deal of the ground that, if I had had the time this afternoon, I would have covered myself, because I believe with him that this is one of the most important matters to come before the house since I have been a member of it. I believe this problem must be faced by parliament, and that this proposal to hand over one of the greatest of our Canadian resources to United States interests is against the future welfare of Canada.
This afternoon the Minister of Trade and Commerce said that this was an all-Canadian national gas pipe line. Well, earlier this afternoon the Leader of the Opposition put on the record the companies that are behind this proposition. We have only to look at them to see the giant United States interests that are behind this particular proposal, Tennessee Gas Transmission Company, Gulf Oil Company through Canadian Gulf, Continental Oil Company through Hudson's Bay Oil and Gas Company.
The only surprise I had was when we rose and asked for a recorded vote on the resolution then before us, and the official opposition voted with the government. Time and again this afternoon the Leader of the Opposition in his remarks stated that it was not expedient to do this thing. Yet what did they vote for? "That it is expedient to introduce
15, 1956	2183
Northern Ontario Pipe Line Corporation a measure to provide for the constitution of the corporation", etc. That is why we opposed it.


George Alexander Drew: Mr. Chairman, on a question of privilege-


Major James William Coldwell: No, no.


George Alexander Drew: Let me make the record clear.


Some hon. Members:: Order.


George Alexander Drew: I want to make the record clear.


Some hon. Members:: Sit down.


George Alexander Drew: We voted for the motion that the Speaker leave the chair.


William Alfred Robinson: Order.


Major James William Coldwell: Mr. Chairman, when the Leader of the Opposition was speaking-and he was good enough to withdraw the remark-he characterized what we did this afternoon as silly. I want to say that, as I listened to his subsequent remarks this afternoon, while I am not going to apply the same term-


William Earl Rowe: You could not do so.


Major James William Coldwell: -it certainly flitted through my mind on many occasions during that address. However, be that as it may, I am in agreement with him in the criticism he has made of these proposals. Like him, I look back on our history in this country and I realize how, through the years since confederation, the people of this country have struggled for their independence, political, social and to a degree economic. I believe the people of Canada are with us when we say that we oppose this proposal. I believe that opinion is shared by people from one end of this country to the other.
I want to say this to the minister, to the opposition and to the members of the house generally. This afternoon we are not approaching this problem from any doctrinaire position. We approach it rather in the tradition of men and women of Canada who have safeguarded the interests of this country in the past. We have before us today a proposition not for supplying natural gas to Canadian homes and industry, but a proposition which will send the bulk of the gas to the United States via Emerson and transport the rest through a spur line to eastern Canada; via a spur line, let it be said, which Canada and Ontario are to build with public funds for a company under foreign domination.
Like the Leader of the Opposition, I recall the words of Sir John A. Macdonald. He quoted them this afternoon. I am not going to quote them again, although I intended to do so. However, I am going to quote another

Northern Ontario Pipe Line Corporation statement of Sir John A. Macdonald which he did not quote and which I think this house should bear in mind in discussing this problem. At the conclusion of his remarkable speech when he was urging the building of a Canadian transcontinental railway he said this, as reported at page 494 of volume 1 of the debates of 1880-81:
I can trust to the intelligence of this house, and the patriotism of this country, I can trust not only to the patriotism but to the common sense of this country to carry out an arrangement which will give us all we want, which will satisfy all the loyal, legitimate aspirations, which will give us a great, an united, a rich, an improving, a developing Canada, instead of making us tributary to American laws, to American "gas companies," to American bondage, to American tolls, to American freights, to all the little tricks and big tricks that American "gas companies" are addicted to . . .
I have changed two words. In two places I have changed "railways" to "gas companies". Otherwise that is the verbatim statement of Sir John A. Macdonald in this house in discussing the building of the Canadian Pacific Railway.
I say that no one reading the history of our country can fail to appreciate the many times and ways in which the independence of this country has been jeopardized. I say to my hon friends from the province of Quebec that every time the economic independence of this country is jeopardized or handed over to foreign domination, to that extent the political and cultural independence of this country is jeopardized.
I say that to them particularly for this reason. Looking back over our history, I believe they have been in the forefront in maintaining Canadian integrity and Canadian independence. One of the reasons I am opposed to this measure is that I believe the domination of our economic life by these foreign corporations is threatening the independence of this country, and that this is almost an immeasurable step in that direction, a step which this country will regret in the days to come. In so many ways we are dominated, through the radio, magazines, television, our defence arrangements made necessary by the international situation, perhaps; nonetheless our independence is gradually being whittled away.
I say that in this proposal there is a new danger, a new threat to our economic welfare, our independence and our development. I ask this house where among us today are the patriotic instincts that caused the fathers of confederation and the people who lived before us to build this country the hard way, ff you will, but until quite recently successfully as an independent, sovereign nation?
Mr. Chairman, I believe it is six o'clock.
At six o'clock the committee took recess.


[Stage Direction]
AFTER RECESS

The committee resumed at eight o'clock.
Major James William Coldwell: Mr. Chairman, in his remarks this afternoon the Minister of Trade and Commerce made a statement which I found very interesting and new. That was that the premier of Alberta would only agree to the export of gas to eastern Canada provided that gas was also exported to the United States. I did not know that proviso had been made by the premier of Alberta, but it seems to me that is selling Canada's birthright for a mess of pottage.


Mr. Hansell:: I doubt whether he said that.


Major James William Coldwell: I was very surprised that that should have been included because, after all, the provincial governments hold the resources of the provinces in trust not only for the people of their own provinces but for the people of all Canada.
Now may I also, say something about the remark the minister made this afternoon regarding the attitude of Ontario. In an order for return, which was tabled a few days ago on my motion, I find the revised report to Premier Frost from Mr. Grant Glassco, of the firm of Clarkson and Gordon, which indicated very clearly, and I quote the exact words-
That an all government-owned pipe line would be economically feasible even though no sales were made in the United States.
That, of course, is an opinion which should receive the careful consideration of the house, since it confirms the position we have taken from the outset and intend to take throughout this debate. It is true that Mr. Glassco's report does outline some difficulties which, in his opinion, might be inherent in government ownership of a pipe line, particularly the length of time required for the several governments interested in the project to reach agreement on the terms of a joint government undertaking.
This afternoon the Leader of the Opposition said that' Premier Frost and his government had preferred another plan, and I believe that plan was indeed a plan of public ownership, a project directly undertaken by the Dominion of Canada and the provinces together.
Mr. Glassco further recommended that before advancing any money we should be satisfied that conclusive proof is available that the company is able to carry out its commitments. What we are doing is in effect considering the advancing of money in the form of a spur line across northern Ontario, and we have no assurance that the company will be able to carry out its commitments, since the carrying out of those commitments depends in large

measure upon the attitude of a foreign commission, namely the federal power commission of the United States.
It has been obvious for some time that the company would be unable to carry out its commitments before May 1, 1956, and that was confirmed by the minister this afternoon. I agree with the Leader of the Opposition that we are placed in a most undignified position when we have to depend on the result of an application before a commission in another country in order to get approval for this line.
I think this should be noted, that in the Ontario legislature the approval of the province's bill was secured because the bill was couched, as Mr. Porter said, in flexible terms. This afternoon the minister drew the attention of the committee to the fact-and it is a fact-that the bill was carried unanimously. "Flexible terms", said Mr. Porter. If I may again quote indirectly from the Hansard of the province of Ontario, this is what he said:
If for any reason the present plan does not go through in its present form, or it fails entirely, the bill will permit the government to consider alternatives and advance moneys within the stated limits to further any other arrangement that may be adopted.
Because of that undertaking the bill did go through unanimously. I .certainly would advise hon. members to read the debate in the Ontario house, and particularly Mr. Porter's speech on February 21 last, because I think it would be interesting and instructive.
Apparently the Progressive Conservative party in this house is not now in favour of a publicly-owned project. I noted, however, that in his introduction of the bill relating to the Trans-Canada gas project in the legislature of Ontario, Mr. Porter made very clear that the decision was entirely a federal decision. Ontario went along with it because it was a federal decision and responsibility. Again he used these words:
This government is not opposed to public ownership where it may be suitably applied. I think our record substantiates that statement. Our view toward public ownership is not a doctrinaire attitude.
And I may say, Mr. Chairman, that neither is my view a doctrinaire attitude in the sense in which that word is sometimes used.
It has been rather interesting and somewhat surprising to me of late that the Progressive Conservative party is so determinedly opposed to public ownership, and indeed has been opposed to crown corporations established by this country. I would remind them that this is in complete disagreement with the attitude of the leaders of their party in former days. When the building of a new transcontinental railway was under discussion in the House of Commons on April 5, 1904, across very much the same territory as it is 67509-138
15, 1956	2185
Northern Ontario Pipe Line Corporation proposed to build the gas spur line by the two governments concerned, Sir Robert Borden said of that project:
I say that the government itself should build this road; it should build it promptly.
And in the very first clause of the amendment to be made in connection with the proposal of the government of the day he placed his party on record. His amendment first outlined, of course, the aims of the new transcontinental railway, and then he said:
In order to accomplish these results the following objects and considerations should be kept constantly in view;
(a) To develop and extend the government system of railways, and to free the management thereof from party political control or interference.
In other words he wanted to see that line, which eventually did come to us, publicly-owned. Because of the circumstances in later years, this part of the line which was really the national transcontinental throughout was incorporated into the Canadian National Railway system. I say that in these words Sir Robert Borden placed the party on record in favour of a crown company to build and operate the proposed transcontinental railway.
May I remind hon. members of the Progressive Conservative party that when radio broadcasting was under discussion in the House of Commons on May 18, 1932, the former leader of the Conservative party, the late Right Hon. R. B. Bennett, who was then the prime minister of Canada, said this at page 3035 of Hansard:
No other scheme than that of public ownership can ensure to the people of this country, without regard to class or place, equal enjoyment of the benefits and pleasures of radio broadcasting.
Then he went on to use words that are directly applicable to the present project. He said:
Private ownership must necessarily discriminate between densely and sparsely populated areas. This is not a correctible fault in private ownership; it is an inescapable and inherent demerit of that system. It does not seem right that in Canada the towns should be preferred to the countryside or the prosperous communities to those less fortunate. In fact, if no other course were possible, it might be fair to suggest that it should be the other way about. Happily, however, under this system, there is no need for discrimination; all may be served alike.
This is truly an irrefutable argument for the public ownership of a project of this description; because of necessity the private corporation will serve the profitable areas first, and will in all probability neglect the smaller areas in between those larger centres and more profitable areas. I say that what we need is a gas pipe-line system that will do justice to those who live in rural areas as well as those who live in cities.
2186	HOUSE OF
Northern Ontario Pipe Line Corporation I know city people expect that they may be able to get gas at a lower rate than people in the adjacent rural areas. Only under a publicly-owned system can you do justice to the people in the smaller communities. If I may quote further from Mr. Bennett on the next page of Hansard:
I believe that there is no government in Canada that does not regret today that it has parted with some of these natural resources for considerations wholly inadequate and on terms that do not reflect the principle under which the crown holds the natural resources in trust for all the people.
The crown holds the natural resources in trust for all the people, not for a few people, not for powerful corporations that may make agreements with governments that pass away. They should be held in trust for the people of Canada, and we should not betray that trust. This is precisely the position we now take in regard to this great project. We are determined that as far as we can secure it, no government in Canada shall have need to regret in future years that it parted with those great resources on terms that do not reflect the principle under which the crown holds the resources in trust for all the people.
The Leader of the Opposition discussed the attitude of the house in 1951 when Bill No. 75, I think it was, was introduced by the hon. member for Vegreville. This was a bill to incorporate Trans-Canada Pipe Lines Limited and the mover, I believe in good faith, gave certain assurances to the house at that time. He said that it would follow an all-Canadian route. He outlined the cities that would be served both in the west and in Ontario. He assured the house that it was proposed to serve the communities along the Canadian National route from Coteau Junction to greater Montreal and ultimately along the north shore of the St. Lawrence as far as Quebec city. He went on to say that there was no need to discuss the federal act which assures control over the exportation of electricity and fluids. He said, if I may quote his own words:
It is my opinion that this act-
He was referring to the Electricity and Fluids Exportation Act.
-would have no application because all consumers will be in Canada and no gas will be exported out of Canada.
The effect which these assurances had on the house, which had been concerned about numerous proposals for pipe lines in or through the United States, was indicated very clearly by the hon. member for Vancouver -Quadra, of the Progressive Conservative party, who is here tonight, when he said at page 736 of Hansard of February 27, 1951:
In view of the fact that the pipe line is to serve Canada first, and in fact in this case it will serve Canada only, I for one am very glad to support it.
[Mr. Coldwell.l

He had been opposing other pipe-line proposals. The hon. member for Winnipeg North Centre, speaking on our behalf said, as reported at page 737 of the same issue of Hansard:
Mr. Speaker, the assurance that has been given by the hon. member for Vegreville (Mr. Decore) that the route followed by the pipe line to be built by the company covered by this bill will be an all-Canadian route makes it clear that there will not be an extended debate on this bill ....
He added, however:
. . . there are some of us in this house who regret that the government is not going into the construction of pipe lines for the distribution of gas and oil on a public ownership basis. When I say "some of us" I am happy to include the hon. member for Comox-Alberni (Mr. Gibson).
At that time he sat as an independent Liberal in this house.
While he does not belong to this socialist group, nevertheless he has taken the same position on former occasions.
Other hon. members of the house spoke along the same lines in support of the bill, because we understood it to be an allCanadian pipe-line project entirely in Canada and under the control of Canadians. I bring this to the attention of the house, because at that time the principle of the bill was clearly believed to be that of an all-Canadian project with an assurance that the gas available would be utilized at all points across Canada including Montreal and the city of Quebec.
As the Leader of the Opposition noted this afternoon, when the bill was in committee Mr. Frank A. Schultz, vice president of the parent company, reiterated this assurance before the House of Commons committee on railways, canals and telegraph lines. On March 6, 1951, at page 10 of the minutes of proceedings and evidence of that committee, he said:
The second consideration was that it should be an all-Canadian project, that it would be Canadian gas transported over an all-Canadian line, and that 100 per cent of the consumption would be in Canadian cities.
We now have before us a proposition which is largely dependent on the verdict of the federal power commission of the United States of America, which is in effect a line to Emerson, with a spur line across northern Ontario to serve eastern Canada and having a smaller volume than the line which will go to the border of the United States.
When the bill came back to the house on March 9, 1951, there was a short debate because hon. members had heard witnesses testify with all confidence before the committee that the pipe line would be constructed as an all-Canadian project serving Canadian cities and with no export of gas to the United States, at least until Canada's own cities,

communities and needs had been fully served. No mention was made at that time of any need of financial aid from the government of Canada.
Today we have a resolution before us which differs in its entirety from the original considerations upon which parliament approved the Trans-Canada pipe-line proposal on March 9, 1951. Today the company demands substantial public funds and the export of gas for United States companies at which I believe, when investigated, will prove to be distress prices. Contrary to the expert opinions supporting the company's proposals in 1951, we are told that the project cannot be undertaken unless substantial quantities of natural gas are exported to the United States and unless the Canadian and Ontario governments finance the 675 miles of the spur line, for such it is, across northern Ontario.
I say to hon. members of this house that we should not approve this proposal at this time, that the government should reconsider the proposition in its entirety and should build this line as a public utility. The provinces should distribute the gas throughout the provinces by any means they might suggest. I take it that most of them would do so through a public corporation, just as is done with electric power in the provinces of Ontario, Manitoba, Saskatchewan and Quebec to a large extent at the present time.
We want to see a public utility. If the federal government does not feel inclined to undertake it by itself, then let it do what was suggested by the premier of Ontario on one occasion. That is to say, let a joint undertaking be established between the governments which are interested in this project, including the federal government. Let us not think it would be wise or sound to allow this to slip through our hands today and fall under the control of these powerful interests which have been under fire in the United States for years, and one of whose latest attempts was vetoed by the President of the United States in recent weeks.
I believe we have no right as a parliament to alienate this great resource to the control of a corporation over which we have no real control. The minister said this afternoon that 51 per cent of the stock would be sold in Canada. We have no guarantee that Canadians would own it, and he admitted this today. We have no guarantee that the Canadian people will own that stock. When it is placed on the market it might be bought by anyone. In any event the real control, the real power, is in the hands of these three great United States gas and oil companies
Northern Ontario Pipe Line Corporation which somehow or other have persuaded our government to bring into this house what I believe to be an improvident deal.
Last year we had before the external affairs committee and before parliament a suggestion from the province of British Columbia for the alienation of a great water resource, the Kaiser deal, which proposal was turned down because it was believed to be improvident and that the government of British Columbia was making a deal not in the best interests of all Canada. If that was true of the Kaiser project on the Columbia river, and I believe it was, it is equally true in connection with this great resource which can be used in another country to a large extent to process the raw materials which I think we are sending there in too great quantities at the present time.


Ernest George Hansell: Mr. Chairman, while I am going to be somewhat critical of government policy in respect to this bill and related matters, I want to state at the outset that we in this corner of the house will support the resolution. We may be critical of some parts of the bill, but I cannot say in what way until the bill comes down.
I listened with interest to the policy speeches by the representatives of the other two opposition groups who have preceded me. When the Leader of the Opposition spoke this afternoon I picked up my pen to take some notes, thus indicating that I intended to comment upon what he was saying, perhaps at times critically and at other times in commendation. However, I found that I could not quite focus my attention in order to make my criticisms or commendations logical in form, because it seemed to me that the Leader of the Opposition, like a jack rabbit, jumped from one corner to the other and I could not quite keep up with him. I felt that I wanted to sing that old familiar chorus, "Around and around and around she goes, and where she stops nobody knows."
However, I do want to say that with respect to his view and that of the leader of the C.C.F. party as to foreign investment, I find myself in at least some agreement with them in their criticism of government policy. Before entering into that, if I might refer to my scratched notes, I do not think we should let go by the statement made by the leader of the C.C.F., when referring to what the right hon. Minister of Trade and Commerce said this afternoon, that Mr. Manning indicated that they would not agree to the setting up of an all-Canadian pipe line except with a proviso. The leader of the C.C.F. seemed to seize upon that. He said he was quite surprised that any proviso should have been insisted upon by the premier of the
2188	HOUSE OF
Northern Ontario Pipe Line Corporation province of Alberta, because to him that was surely selling out Canada to some other country.
If you took that statement alone it might be damaging, but you cannot do that because no premier of any province is going to make a proviso without some explanation. The Minister of Trade and Commerce did not give it; the leader of the C.C.F. did not give it, for perhaps the good reason that he did not know what conditions might be involved in that proviso, and I cannot give it because I do not know. I do not believe that statement should be left hanging in the air. If Mr. Manning did make any proviso at all I am quite confident that he had some reason for doing so, and it was not that he intended to sell out Canada to any other country. I say to you that Mr. Manning ranks at the top as a loyal Canadian, loyal to Canadians and to Canadian interests.
In respect to foreign investment, I think we will all admit that one of the best things that could happen would be to have the money invested in this all-Canadian pipe line be in the form of Canadian capital. I think we all agree with that; but if we cannot get Canadian capital to construct and develop this pipe line there is only one reason why. I lay the blame for that at the door of the present government of Canada, which has pursued a financial policy which does not encourage Canadians to invest their money in ventures of which they cannot altogether see the result.
I picked up the Financial Post for March 17, and on the front page I find this headline, "Dependence on U.S. Goes on Growing." I did not have time to read the whole article as I picked up the paper only a few minutes ago, but in the second section I find this headline, "How We Are Paying for Our Prosperity." Then there was this subheading spread across a couple of columns, "We Are Selling Off Assets to Foreign Investors." If that is so then it must be because the government have pursued certain financial policies which have not encouraged large scale investment of Canadian capital.
When the royal commission on Canada's economic prospects was sitting in Alberta the government of Alberta presented a brief. After Mr. Manning had presented this brief on behalf of the province a question arose as to the amount of United States capital that had come into Alberta to develop the oil and gas industry. The total was an astounding amount. I must trust to my memory for this and also to newspaper reports, because we have not had the printed evidence as yet. Mr. Manning said the same thing I am saying now, that the reason United States capital came into this country to help


develop the oil and gas resources of Alberta was that the financial policies of this government did not encourage enough large scale capital investment of Canadian funds.
A recent copy of the proceedings of the committee on railways, canals and telegraph lines contains an astonishing piece of evidence. This was not in connection with a pipe line, it was in connection with another bill then before the committee under which a Quebec concern wishes to build a railroad in that province. They had wanted to get money from various investment sources to build the railroad, and during the course of the proceedings the hon. member for Edmonton East asked the witness this question:
How do you intend to finance your line? Can you tell us?
I shall read only part of the answer, breaking in at the middle:
I regret to say that Canadian insurance companies were offered the first "crack" at it but unfortunately we only had four who would participate. They felt that the development of the north country was not properly justified so the bulk of our money came from American insurance companies. Canadian companies were offered the first chance. That was a blow to me. I am a Canadian.
Listen to that. Are we going to sit here and say that United States insurance companies and Americans generally are more willing to gamble on the future of Canada than Canadian investors? Something must be wrong, and I will say that one thing that is wrong is the taxation policies that are imposed upon companies by this present government. Further on in this evidence before the standing committee on railways, canals and telegraph lines the following questions were asked by the hon. member for Lambton West:
Q. To what extent did the Canadian insurance companies participate?
A. $2 million.
Q. Out of how much?
A. Out of $145 million.
Now just imagine that. Who is to blame for this picture? The only answer I can give to that is the financial policies of the present government. But let us not let it rest at that. Let us ask this question. What would happen to the development of industry and our natural resources in Canada if it were not for United States capital coming in here to develop them? My hon. friend from New Westminster has said that this government does not accept Social Credit methods, because we have been urging for 20 years that they accept them. If they did, perhaps there would be more Canadian capital to be invested in the future of Canada. United States capital has come in to this country and has taken a chance on the future development of this country. We talk about a pipe line. What is the use of having a pipe line if there is

no gas to put in at one end and come out at the other? The investment of United States capital in Canada has been very largely responsible for the development of the gas and oil industry in Canada. Furthermore, I think the same thing can be said of the oil and gas development, as far as it has gone, in the province of Saskatchewan.


An hon. Member:: The provincial Saskatchewan government-


Ernest George Hansell: That is true. My friend admits that it is true.


Major James William Coldwell: I shall give the reason, if you like.


Ernest George Hansell: I know the reason. It is because you cannot get the capital in Canada. Another reason is that the Saskatchewan government, though a socialist government, will not socialize the oil and petroleum industry. Of course they will not do that. Why? Because they know that private capital is the one source that will develop that industry; because they believe there is a future in Canada and, I will say, a future in the oil and petroleum industry of the province of Saskatchewan. I am not blaming the premier of Saskatchewan for taking the tack he has taken. I believe he has taken the right step in that respect.
Let private industry develop our natural resources. There is no reason why private industry should not also be allowed to develop the transmission system for carrying these natural resources throughout Canada. I am quite certain of this. We can talk all we like about United States capital coming into Canada, but you cannot have it both ways. Do we believe Canadian capital should be invested abroad? I am quite certain people would not say negatively that we should not invest Canadian capital abroad. What is sauce for the goose is sauce for the gander. You cannot have it both ways.
Furthermore, I am quite certain that the province of Saskatchewan would not place any embargo on the capital investment of United States dollars for the development of their natural resources in that province. We must be consistent all the way. Otherwise our gas and oil industry would not have been developed to what it is today, a real going concern. Wherever I go in Canada I begin talking in a sort of exalted fashion about our Social Credit government in Alberta, and what do I hear? "It is not the Social Credit government; you see, they have so much money out there."


An hon. Member:: So much oil.


Ernest George Hansell: Sure we do.


Mr. Ellis:: Who put the oil in the ground?
2189
Northern Ontario Pipe Line Corporation


Ernest George Hansell: This is what I am trying to tell you. What makes the province wealthy? It is because United States capital has come in there to develop it. The picture would have been a much rosier one if the financial policies of this government had been of such a nature that that wealth could have been the result of the investment of Canadian capital. I shall go so far with my hon. friend from Rosetown-Biggar and the Leader of the Opposition.
There is another matter to which I should like to refer. We deplore perhaps the fact that 51 per cent of the shares are going to be offered to Canadian investors and that 49 per cent of the shares will perhaps go to the United States. That really is no criterion at all, because there is no way of controlling the shares after they are sold on the market. You could sell the whole of them to Canadian investors if Canadian investors would take them. The next day or a few days after, or at some subsequent time, United States interests could buy those shares, because we have enough freedom in Canada to permit a person to sell his shares to whomsoever he wishes. So that is no particular criterion.
Those are my criticisms. Now I do want to lay down something of the policy of this group in respect to the present measure.
Providence was very kind to the province of Alberta. She placed vast stores of natural gas beneath Alberta soil in widely scattered fields. The presence of these stores of gaseous fuel has been known for many years, and for quite a long time a number of Alberta cities and towns have been making use of natural gas for domestic and industrial purposes.
The city of Medicine Hat, for instance, was one of the earliest users of the gas supplies to be found at rather shallow depths right within the limits of the city itself. Many industries were built as a result of this, because all those industries had to do was dig a pothole and the gas would come forth almost from the surface of the earth and supply those industries with light, heat and power.
I recall that in the early days in my own constituency-I happen to have the Turner valley oil fields in my territory-what was known as the discovery weE blew its top and, in order to get the gasoline from that well, they had to shoot huge flares into the river. It was astounding; it was staggering. People came from all over to see that gas being burned in the air, biUions and billions of cubic feet of it. They used to caU it hell's half acre. The flares used to go up day and night, 24 hours of the day. Why, at midnight the skies would be just like sunset
2190	HOUSE OF
Northern Ontario Pipe Line Corporation from the reflection of these flares. What was it? Gas burning and going to waste in the air; that is what it was.
I tell you it was cruel to think that our natural resources should be wasted like that. Why, there was enough gas going to waste in those days to have provided power and heat for all the cities of Canada for generations to come-yes, sir; just in a few years. It was only after the adoption and implementation of very wise policies of development and conservation by the present government of Alberta-


Mr. Blackmore:: Social Credit.


Ernest George Hansell: -that systematic exploration took place which led to the discovery of huge reserves of natural gas in practically all parts of the province. These reserves have grown with the development of the whole industry until they are far and away beyond the present and future needs of the people of Alberta, perhaps for 50 to 75 years to come. The best scientific brains that have been applied to the problem say that if wise policies governing marketing, conservation and further exploration and development are continued it would not be unreasonable to expect the reserves to increase by a trillion feet a year for the next 10 years.
However, if this addition to the now known gas reserves is to take place, a satisfactory market for gas surplus to the needs of the people and industry in Alberta must be found. When I say a satisfactory market, I mean one that will return to the producer at the wellhead a price sufficiently attractive to stimulate continued exploration and development. I am sure hon. members realize that oil and gas exploration is a costly business as Well as a risky one, and unless expected returns for the risk and the work are fair then further exploration and development will not take place and Canada will be the poorer as a result.
Another point that should be kept in mind as we approach consideration of this measure, which will provide authority for the government of Canada and the government of Ontario to build a pipe line from the Manitoba border to Kapuskasing, Ontario, a line to be leased to Trans-Canada Pipe Lines, is that in Alberta natural gas is often the lifting power by which crude oil is brought to the surface. Consequently, as oil is produced gas is brought with it from the depths. Some of that gas can be turned into the pipe lines of the province to supply domestic and industrial needs in the towns and cities, or some of it can be pumped back into the earth in what is known as repressuring to bring


further supplies of oil to the surface. Repressuring of many fields has been going on in Alberta for many years. However, not all of the gas which is surplus to the needs of the Alberta people can be used for repressuring. Therefore it is urgently important that the proper market be found for it.
The Social Credit government of Alberta realized five or six years ago that export markets would have to be found for the surplus gas of this province if colossal waste were to be avoided. That same government set up the Alberta petroleum and natural gas conservation board and charged it with the responsibility of applying strict conservation methods so as to reduce gas wastage to the absolute minimum. Any student of the situation knows that the board and its methods have been eminently successful; but in the process oil production has been severely restricted compared with what it could be if a satisfactory market were available for the gas produced in bringing oil to the surface.
We all know that Canada is not yet selfsufficient in oil. We are dependent upon foreign countries, mainly the United States, for a large part of what we use in Canada. To buy those needed imports requires precious foreign exchange that is often in short supply. Our trade deficits with the United States are getting larger year by year. Everything ought to be done to bring Canada as soon as possible to a position of selfsufficiency in oil production. Experts say that is possible within a few years. I say it is highly desirable and urgently necessary if we are to achieve national security and the maximum of strength in times of international strife and dislocation.
But, Mr. Chairman, if we are to become self-sufficient in the world we must get good markets for our natural gas, and that without delay. Already there has been too much delay. It is obvious to us at least that precious time has been frittered away by useless bickering for political advantage. What is desperately needed now is action and wisdom, and a sincere desire by all parties to get down to brass tacks in the matter of finding and applying the very best way of providing a market for our surplus natural gas, one that will best serve the people of Canada as a whole and at the same time return to the producers a fair price for their labours and the risks involved in finding and developing the gas resources.
Now, what is our Social Credit position on this resolution? We think no time should be lost in getting before the house the bill which the resolution precedes. No useful purpose

can possibly be served by prolonging debate at this stage, especially academic or politically slanted debate. On the contrary, extensive debate could only result in unduly prolonging the gas waste which is now going on incidental to oil production, a waste calculated to be in the neighbourhood of a billion cubic feet per week. Some of that, of course, cannot be avoided. Much of it could be if we had a pipe line to carry the gas to an export market either in other parts of Canada or in the United States. We in this corner would not like to have on our shoulders the responsibility for causing valuable fuel to be burned in the air as flares because there was no place to put it to good use. I want hon. members to realize that this is one of the important things at stake at the present time.
We in this group, I might say particularly we who represent Alberta constituencies but we as a whole, would like to have seen Canadian and northwestern United States markets made available for our surplus gas. That, together with Montana territory and adjacent places, because these places are immediately to the south of us, and the midwestern United States, are the natural geographical market for Alberta gas. However, this government decreed that there would be no export permits granted until the eastern Canadian needs were first served.
The government of Alberta and the Social Credit group in the house have always supported a Canada first policy. We think that is wise; we think it is only right. In fact, I i'nigh' say that Mr. IManning of Alberta issued a statement some time before this government made its natural gas policy public, in which he declared that any gas exported from the province of Alberta should first go to serve the people in other parts of Canada if they want it and if it is economically feasible to get it to them.


William Alfred Robinson: Order. I am sorry to
interrupt the hon. member, but I am obliged to advise him that his time has expired.


Ernest George Hansell: Mr. Chairman, I wonder if I might-


Some hon. Members:: Carry on.


William Alfred Robinson: Has the hon. member
unanimous consent to proceed?


Some hon. Members:: Agreed.


Ernest George Hansell: Thank you, Mr. Chairman and gentlemen. When the present government declared its policy, we were ready to go beyond regional desires and look at the whole problem of gas export from the broader national point of view. I refer to the export of gas from Alberta. It should be pointed 67509-139i
Northern Ontario Pipe Line Corporation out that when this federal government declared there would be no export permits issued until eastern Canadian markets were first served, it severely complicated the financing of a pipe line from western Canada. The most careful and detailed studies of the whole situation had convinced most economic investigators that no pipe line could pay off unless the visible eastern Canadian market could be supplemented by substantial markets in the United States, especially during the first seven to ten years of the life of the pipe line.
In a sense it can be said that the government ignored the economics of the pipe line in order to give priority to the Canada first policy. It is therefore true to say that the whole of the present situation arises out of this Liberal government's policy. The government having created the difficulties, we think it is the responsibility of this present government to provide some help to the constructing company in order to ensure successful financing of the huge undertaking. It would be most unfair and unjust to make the producers of natural gas pay the cost of the government's economic blunder. We believe that the bill which will follow this resolution will provide the necessary assistance to ensure successful financing of the pipe line.
We support the Canada first policy, although our producers could have found a much more lucrative market in the United States. We are ready to accept this government's natural gas policy although not without criticism. At the same time, however, we are earnestly seeking a way to get fair returns for our gas producers in the provinces. We are convinced that the government's policy can be successful for all concerned only if the eastern Canadian market supplied by an all-Canadian pipe line is supplemented by some markets in the United States served by the same pipe line. Otherwise it would appear that there is bound to be a big loss on the all-Canadian line, and either the producers or the people of Canada generally may be called upon to foot the bill.
I have only one short paragraph left to conclude my speech. Before reading it might I say that under some circumstances, perhaps we would not be altogether unfavourably disposed to the all-Canadian pipe line being under some government supervision-a crown company or something of that kind-if private enterprise failed to accomplish it. In that respect I should like to read from our national manifesto just one paragraph of a section which we have captioned "Public Utilities and Monopolies":
The Social Credit association of Canada believes:
1. The government should be prepared to establish a public utility only where individual enterprise has
2192	HOUSE OF
Northern Ontario Pipe Line Corporation failed to provide, or from the circumstances cannot provide, adequate services at reasonable cost, the utility or service to remain a government enterprise only until the changed situation warrants private development.
What does that mean? It means simply this. As a Social Credit principle we believe in individual enterprise. We believe in private enterprise. We believe in the private enterprise system. But if in the national interest private enterprise cannot do the job, we believe there can be some reason for a government-owned pipe line until such time as private enterprise can take over.
In conclusion, Mr. Chairman, may I say that I think I will let the matter rest at that point for the present. We may have something further to say at a later stage. I suppose that some of my colleagues will want to enter into the debate, perhaps at the moment. We will support the resolution in the hope that it will facilitate getting the bill before the house.
I believe the minister should send the bill to the appropriate committee-and no doubt he will do so-where witnesses of one kind and another can be brought to give evidence in respect of finance, Canadian investment or foreign investment, costs, procedures and what not. I believe the government should send the bill to the committee where a complete investigation can be made of it, so that interested parties can come and lay their case before the committee. Those in the opposition as well as on the government side will have their chance there to question those witnesses. I hope the minister will give us the assurance that the bill will be sent to the appropriate committee.
In the meantime I would appeal to all hon. members not to delay the passing of this resolution. If anything is to be done by way of starting the construction of a trans-Canada pipe line this year, a bill providing some assistance to the building company will have to be through this parliament within the next few weeks.


Major James William Coldwell: Mr. Chairman, I rise on a point of order. It is extremely awkward for a member to rise and object to an extension of time, but there are some of us in this house who keep our eye on the clock and try to end at the appropriate moment. In fairness, I think the rules should be enforced. I am not criticizing my hon. friend. He asked for the extra time. It was given to him. That is all right. But if we are going to have rules in this house, I think they should be enforced. Because we do not like to deny a colleague the opportunity of extending his remarks for another ten minutes, those who try to keep within the limit are in reality discriminated against.
[Mr. Hansell.l

I suggest, Mr. Chairman, that you do not ask whether the house will give permission. The situation was different with the minister this afternoon. If I may just intrude for one moment, may I say that I think it is an extremely anomalous position in connection with this rule that the minister introducing some measure in the committee is limited to 30 minutes, whereas the Leader of the Opposition-and I am not making any criticism of him-has unlimited time. The rest of us are limited to 30 minutes. I think the rule needs changing in respect of the minister introducing a resolution. However, I believe that the chair should not ask the house for an extension of time.


Ernest George Hansell: Mr. Chairman-


Major James William Coldwell: I am not critical of you.


William Alfred Robinson: Order. I am somewhat
glad that the hon. member for Rosetown-Biggar raised this point of order, in view of remarks which several hon. members made to me following my action this afternoon in interrupting the Minister of Trade and Commerce at the expiration of 30 minutes and, at the same time, allowing the Leader of the Opposition unlimited time. It became apparent to me that some hon. members did not apprehend the change which had taken place in the rules by which the members of the house and myself are bound. The present rule in committee is the following, standing order 59, paragraph 3:
No member, except the Prime Minister and the Leader of the Opposition, shall speak for more than 30 minutes at a time in any committee of the whole house.
By unanimous consent the Minister of Trade and Commerce was extended permission to exceed that time this afternoon. The Leader of the Opposition, by right, exceeded 30 minutes this afternoon. This evening the hon. member for Macleod was interrupted by myself at the exact expiration of 30 minutes. Some hon. members then said, as I thought I heard, "Let him go on", and in accordance with past custom, I then asked hon. members if the hon. member for Macleod had unanimous consent, and I understood that that consent was freely granted. I hope these few remarks will clear up that situation.
I again draw the attention of hon. members, as the hon. member for Rosetown-Biggar has done, to the provisions of the new rule as set forth in standing order 59, paragraph 3.


Ernest George Hansell: May I offer one comment only. Since we do not debate the resolution when the Speaker is in the chair, perhaps some leeway could be given to leaders of the other groups.


Major James William Coldwell: No.


Ernest George Hansell: The hon. member for Rose-town-Biggar says he does not think so. I will remind him, and I do not think I am wrong, that he took as much time as I did.


Alfred Claude Ellis: Absolutely not.


Major James William Coldwell: I was one minute under my time. I took 29 minutes.


Ernest George Hansell: I think my hon. friend was through at twenty-nine minutes past six and he started at-


Major James William Coldwell: Twenty minutes past eight.


Mr. Green:: Mr. Chairman, taking part again in a first class pipe-line debate brings back many happy memories of the filibusters of a few years ago. I am sure it would be much more exciting if we had the former member for Fraser Valley, Mr. George Cruickshank, here to participate.
As hon. members know, the main objective :>f our filibustering at that time was to sell the idea to the house and to the Canadian people that there should be a Canada first policy adopted in regard to these pipe lines, both for oil and natural gas. I suggest that the public have now been sold, but I am not so sure that the Minister of Trade and Commerce and his colleagues have yet seen the light; hence the need for further debate on this particular measure.
This resolution stage with the house in committee is the time to consider the government's general proposal and to have a clarification of that proposal by way of question and answer. I point out, Mr. Chairman, that this particular measure before us tonight is important, far-reaching and very unusual. It calls for an exceptionally thorough examination.
The proposal in brief is to set up a crown company, to be known as Northern Ontario Pipe Line Crown Corporation, whose duties are listed as being to construct, maintain and operate a natural gas pipe line from the Manitoba boundary to Kapuskasing in the province of Ontario, a distance of 675 miles. This pipe line is to be of 30-inch diameter; it is to cost approximately $117,633,000, and there is power to borrow given to the corporation up to a total of $130 million. In addition, power is given to this crown corporation to lease the line for 25 years to one certain company, Trans-Canada Pipe Lines Limited, who plan to build from Alberta to Winnipeg a pipe line 34 inches in diameter; and from Winnipeg to Emerson on the United States boundary a pipe line again of 34 inches which, I point out, is 4 inches larger than the pipe line to eastern Canada. They also propose to build a pipe
Northern Ontario Pipe Line Corporation line from Winnipeg to connect with the government line at the Manitoba boundary, and then from the end of the government line to the vicinity of Toronto, and a smaller line 20 inches in diameter from Toronto to Montreal. The cost to this private company is supposed to be approximately $257,367,000, making the total cost for the whole pipe line, government owned and privately owned, $375 million.
I point out that the government is building the most expensive and the least remunerative portion of that line. One of the significant features of the resolution is that the crown corporation can lease only to Trans-Canada. That means that Trans-Canada is in a very preferred position. I suggest it can properly be described as the chosen instrument of the government in this development.
The first question I would like to place before the minister for answer when he replies is why general power is not being taken to lease rather than the power to lease to one company only. If the general power were taken, then an agreement could be made with any other group, and it may very well be that in the final analysis Trans-Canada Pipe Lines Limited will not be able to complete their part of this pipe line.
The next feature to which I wish to refer this evening is the agreement between the government and its chosen instrument, dated November 21, 1955. Under that agreement there is an obligation on the government to build the 675 miles of pipe line, but only if and when the company proves financial ability to construct its portion of the line. That is contained in paragraph 3 of the agreement, which reads:
If evidence satisfactory to the government of Canada is presented by Trans-Canada before May 1, 1956 that it has arranged for financing of all the costs and commitments in connection with the said program of construction, the government of Canada will cause the said crown corporation to acquire the said right of way and construct-
-this 675-mile pipe line. After listening to the minister's speech this afternoon I take it that this provision still stands, in other words that the company must prove financial ability. It is understood-it has been understood throughout-that this financial ability hinges on a permit from the federal power commission of the United States to import 200 million cubic feet per day at Emerson-


Clarence Decatur Howe: That is not true.


Howard Charles Green: -and to export at Niagara 90 million cubic feet per day. The minister says that is not true. I have here a copy of the

Northern Ontario Pipe Line Corporation minister's letter to the company dated September 28, 1955. The last paragraph of that letter reads as follows:
For the Emerson export, Tennessee must obtain an import permit from the United States government. When this has been issued, action will be taken by the Canadian government under the Exportation of Power and Fluids and Importation of Gas Act to authorize the export at Emerson, Manitoba of 200,000 mcf of gas daily for a period of twenty-five years from the date of the first delivery of gas.
That would appear to indicate that the company cannot get their permit for export from the minister until they have received a permit from the federal power commission.


Clarence Decatur Howe: That is right.


Howard Charles Green: I have here reported statements of Mr. Tanner, the president of the company, to the effect that the financing of the company depended on this permit from the federal power commission.


Clarence Decatur Howe: Read one or two
of those statements.


Howard Charles Green: I have here a press report of February 25, 1956, quoting Mr. Tanner.
Mr. Tanner said there was no possibility of getting FPC approval of the application before April 30, the date the company was to satisfy the conservation board of its ability to finance the project.
The following words are in quotations:
"If we can get FPC approval of the application, that's all we need to complete our finances".
I also have a report of the speech made by the minister himself in Toronto, as reported in the Globe and Mail of January 31, 1956. The statements are'not in quotation marks and may not have been taken word for word from the thinister's -speech:
Financing Of Trans-Canada's portion of the allCanadian line hinges on success of the application-
That is the application before the federal power commission.


Clarence Decatur Howe: My hon. friend has a copy of my speech. Did he find that in it?	,	.


Howard Charles Green: I did not claim that; I am merely saying it is in this report.


Clarence Decatur Howe: That was not in
the speech. What difference does it make what is in the report?


Howard Charles Green: 1 am obviously going to be limited to 30 minutes and I do not want all these interruptions. Let me get on with my remarks. The report continues:
-and the agreement of the Canadian and Ontario governments to build the northwestern Ontario section stipulates that Trans-Canada must arrange finances for its entire construction program by May. 1.	,.
In any event it is perfectly obvious that there is to be no federal power commission permit granted by May 1. Today the minister intimated that he would now give an extension of time to this company. He did not say how long the extension would be, but he indicated he would give an extension of time beyond May 1. He did not say whether the federal government proposed to start with the 675-mile portion of the pipe line right away without waiting for Trans-Canada to show financial ability.
I think that is one point the minister should clear up. He should also make clear whether this company can finance without obtaining a permit from the federal power commission. No indication has yet been given that the company can do so. If it can not, and if the minister is going to start out with the line regardless of whether or not the company proves financial ability, that will be in effect putting up the taxpayers' money in partnership with Trans-Canada in a gamble that the federal power commission will issue a permit. I point out that if that gamble is lost Trans-Canada is unlikely to take over that 675-mile portion from the crown corporation, and probably the taxpayers will have to put up more money because the government will have been committed and will have to bail Trans-Canada out of trouble.
I point out, too, that basing the plan on a permit from the federal power commission is extremely dangerous and risky, for we know there has been strong opposition before that commission. We read that there has never been a more bitterly contested application before the federal power commission. There is bound to be a long delay. We on the west coast know that because Westcoast Transmission Limited had a delay of several years. Also the federal- power commission will in effect have, a veto down through the years. Despite the fact that the commission may grant a permit, United States law is such that they could interfere at any time in the future.
I would like to repeat the words spoken by my leader this afternoon that there should be no depending on the federal power commission which is a board in a foreign country set up to protect the interests of that country. The minister himself indicated what should be the proper attitude of the house toward the board when two days ago, in reply to a question referring to the proceedings before the federal power commission, he said, as reported at page 2073 of Hansard of March 13:
I would not care to comment upon judicial proceedings in another country.


Clarence Decatur Howe: Then why do you
do it?
(Mr. Green.]


Howard Charles Green: That is just how much we should depend on permits granted by the federal power commission. Canada is not so small and weak that she must put herself in that position. Also I suggest that going to the United States, hat in hand, as it is in this case-


Clarence Decatur Howe: We do not go to
the United States. The government of Canada has no application before the United States.


Howard Charles Green: Trans-Canada Pipe Lines has.


Clarence Decatur Howe: No, it has not.


Howard Charles Green: Mr. Chairman, I must ask you to ask the minister to keep still while I am speaking.


Clarence Decatur Howe: I am spoiling his speech.


Howard Charles Green: Canada is going to the United States hat in hand. Canada has been put in a poor bargaining position in this matter. The matter should have been handled in such a way that the United States would come to us for our surplus gas. When Canada gets in that position, then she will be able to sell her gas and sell it at a proper price.
What is the plan of action if the federal power commission does not grant the permit, or if the Trans-Canada plans fail? The minister made no announcement about that this afternoon, and the house is entitled to know what alternative plans there are. The minister was asked about it in Toronto at the time he made the famous speech I referred to a few moments ago.


Clarence Decatur Howe: Why don't you read from the speech?


Howard Charles Green: Oh, it isn't worth reading.


Clarence Decatur Howe: The hon. member likes to read the Globe and Mail.


Mrs. Shipley:: The hon. member appears to have studied it.


Howard Charles Green: The report says:
The provincial government is aware, however, that Trans-Canada might not be able to carry through its part.
The minister adopted this as his own explanation.
In this event new ways of attaining the same end will have to be investigated.
Well, it is long past the time when new plans should have been investigated and this house should have been told about them today, instead of being left completely in the dark.
The minister said this afternoon that this is a great new Canadian scheme. Actually it is only part of a much larger scheme designed
Northern Ontario Pipe Line Corporation primarily for the United States by Tennessee Gas. Piping gas to eastern Ontario is a side line. Originally Trans-Canada Pipe Lines Limited did have an all-Canadian policy, and as has been explained earlier they had no intention of building any side lines to the United States. Then this enforced amalgamation by the minister occurred between Trans-Canada Pipe Lines and Western Pipe Lines, and after that had been done the plan in reality was still a Canada first plan, although provision was made for a similar pipe line leading off to the United States to pipe 150 million cubic feet a day.
Now, of course, the figure for Tennessee Transmission is 200 million cubic feet a day with a possible additional 200 million cubic feet. The price was to be 34 cents at 100 per cent load factor at the United States boundary, and that price should be borne in mind.


Clarence Decatur Howe: Nonsense.


Howard Charles Green: Last year other variations were mentioned, but a few weeks ago this drastic change was announced. We now have a Tennessee Gas Transmission plan. It is no longer a Trans-Canada plan or a Canada first plan. We now have a Tennessee Gas plan. That company got in.to the picture back in 1955. Now Gulf Oil, which raised so much trouble last year with the minister, which vetoed one of his plans, are in the picture, as are Continental Oil. Those three large United States companies now control Trans-Canada.
The minister has said that shares are to be offered to the Canadian public. He might have gone on to point out that even though several thousand individual Canadian shareholders bought up to 51 per cent of the shares,-which is most unlikely, there would be no possible chance that they could overrule these three great United States companies-the Delhi company is also a United States company-working together as a closely knit unit. It is absolutely fantastic to suggest that private Canadian shareholders would have the slightest chance of controlling the company. Control rests with these United States companies and it is going to remain there unless the government makes some change in its policy.
Gas entering the United States at Emerson will be carried by a 34-inch line, larger than the line to the east.


Clarence Decatur Howe: That is not true; my hon. friend makes fantastic statements.


Howard Charles Green: The price is to be approximately 25 cents, whereas earlier it was to be 34 cents. These three United States companies
2196	HOUSE OF
Northern Ontario Pipe Line Corporation are not in Trans-Canada Pipe Lines for their health; they are not in it for the benefit of Canada; their major interests are in the United States. They have not the same incentive that a Canadian group would have to develop and expand in Canada, and they are being relieved of the real pioneering job in this development, the construction of the worst part of the line through northern Ontario.
There is grave danger that the plan will mean that Canadian gas will be sold at such a price in the United States as to enable United States users to undercut Canadians. I would point out that the St. Lawrence seaway will be completed shortly, and Toronto will be in direct competition with Chicago in many fields. Is Chicago to have the benefit of Canadian gas being sent to the United States at lower prices than it can be obtained for in Toronto?
It is bad enough without the government being involved. We had an example in the west when permission was given to pipe gas down into Montana to the Anaconda copper mining company. Mr. Wilson, the then United States secretary of defence, put on the pressure to have this permission granted in a hurry. A bill incorporating the company was rushed through this house and provision was made for the United States to get this gas. Then the federal power commission would not let it come in until over a year had passed, but eventually this smelter was able to get its gas at about one-third what it had been paying for fuel before. That company is in direct competition with the smelter at Trail whose production of lead and zinc is subject to a tariff when entering the United States. The Anaconda people are trying to get that tariff increased even more. This situation is much worse with the government financing this scheme.
In conclusion, Mr. Chairman-


An hon. Member:: You have nine minutes. Mr. Green: Apparently I have gone too fast. It is a terrible mistake to waste time like that.
The government's proposal is just one more step forward toward an integrated North American economy sought by many of our Liberal friends, particularly by the Minister of Trade and Commerce. The minister is a great advocate of an integrated North American economy. I sometimes wonder whether he knows that there is such a thing as a boundary line between Canada and the United States.
This is only one example. We had the same thing with iron. We were told in a committee the other day that this year IMr. Green.]

between 8 and 9 million tons of iron ore were to be dug out of the mines in northern Quebec and Labrador to be shipped to the United States without being processed in any way, and the total production is to be something like 12 million tons.


Jean Lesage: You had better complain to your friend Mr. Duplessis.


Howard Charles Green: We will deal with the minister at a later stage.


Jean Lesage: I am dealing with you now.


Howard Charles Green: There was just one more example, iron ore being shipped down to the United States and then brought back to Canada in finished form after it had been processed by United States industry and United States workmen. It is the same with our trade under the Minister of Trade and Commerce. Last year 60 per cent of Canadian exports went to the United States, while 73 per cent of our imports came from the United States. The end result of an integrated North American economy policy might very well be to make Canada economically a vassal state.
Conservatives believe that the nation must be controlled in Canada by Canadians. We do not believe that the destiny of this nation should be decided in head offices in New York, Cleveland, Texas and California, yet under this plan being brought forward today by the Minister of Trade and Commerce the biggest step that has ever been taken is being taken in that very direction.


Mr. Zaplitny:: Mr. Chairman, as the leader of our party stated in his address this afternoon, we consider this debate to be one of the most important during the present session of parliament. The resolution introduced by the right hon. Minister of Trade and Commerce and now before the committee purports to be for the purpose of assisting in the bringing of gas to eastern Canada. What we have heard this afternoon so far makes one wonder just what effect it is going to have.
I have seen where some United States publications have referred to the Minister of Trade and Commerce as America's gift to Canada. When we consider what they are getting under this legislation I am inclined to think that it is the better deal. After what we have heard this afternoon it is quite clear that if this legislation goes through it will have the effect of setting up a monopoly for the transportation of gas which will not even be owned by the Canadian people. It would be bad enough for the government to be assisting private monopoly in this country under any circumstances, but when the

government is taking steps to assist in the setting up of a privately owned monopoly which is going to be controlled by finances outside the country it is that much worse.
I am glad that at least the leader of this party has set before this committee and this country a constructive and clear-cut proposal as an alternative to what the government is proposing. I have no desire to get into any dispute with the Leader of the Opposition about his remarks this afternoon. They were very lengthy remarks, which of course was quite proper when he was discussing the longest pipe line in the world, but I must confess that when he was through I was not quite sure what his party was proposing as an alternative to what is now before the committee. He did review two or three different projects or plans which he thought might be considered, and he did say that under certain circumstances, if I interpreted his remarks correctly, as a sort of last resort he might be inclined to agree with the proposition of a publicly owned pipe line across Canada. But certainly he surrounded it with enough qualifications and escape clauses so that at the present moment it is hard to visualize exactly what he would propose.
The closest I could come to it would be something like this, that if this pipe line, this gas monopoly, were owned by private concerns in Canada exclusively or to a greater extent than by United States interests, then he would have no objection to it. Of course that makes the situation rather clear-cut as far as we are concerned, because I shall admit that if we have a choice as between a Canadian owned monopoly and a United States owned or controlled monopoly, we would be inclined to accept the Canadian because we are Canadians. Certainly, however, if we have to choose between a private monopoly and a publicly owned utility, we will go for the publicly owned utility. 1 shall give my reasons for that in a moment.
I have said that this legislation sets up a monopoly. The Minister of Trade and Commerce, in introducing the resolution today, went to some pains to point out that there is an undertaking-so far as I can see it is only a verbal undertaking, and certainly it is not part of the agreement that is attached to this legislation-that this company is going to offer 51 per cent of its outstanding stock to the Canadian public, and by that means tried to leave the impression that this would assure Canadian control of this company. I think the Leader of the Opposition demolished that argument rather effectively, in his speech today.
I might add that there is no guarantee whatsoever that even if there were 51 per
Northern Ontario Pipe Line Corporation cent of the outstanding stock of this company offered to the Canadian public, it would be in fact owned by the Canadian public. In the first place, if it were offered as a public issue there would be nothing to prevent United States capital from coming across the line and buying up the stock, or using Canadian subsidiaries or stooges to buy it up on behalf of United States interests. Eventually, so long as the issue of stock remains in private hands, there is absolutely no guarantee whatever, and there cannot be any guarantee, that the ownership of the pipe line will remain in Canadian hands. On that we can be perfectly clear.
We can ensure that this public utility, which in fact is going to be a monopoly, can be retained in Canadian ownership only if it remains in public ownership in the right of Canada. That is why we are particularly concerned that the government should give consideration, even at this late date, to building the pipe line as a public utility to be built either by the federal government or in co-operation with the provinces.
My own view is that we would have an ideal situation for the future if the federal government were to finance, build and own the trunk pipe line from the Alberta gas fields to eastern Canada and if the provincial governments concerned were to undertake to build lateral lines north and south in order to serve the various communities within the province, as a public undertaking. That would give an opportunity to the municipalities, the cities and towns within the provinces, to set up publicly owned utilities on a municipal basis to serve their local needs, and to be the distributors.
In that way we would have an integrated publicly owned utility which would be able to protect the public interests at every step. As it stands now, the proposed legislation favours the private interests. It fails to protect the public interest. It fails to protect the interests of the provinces and municipalities through which it will pass, and can only result in providing an advantage to United States industry over Canadian industry.
There is another reason why we believe that a publicly owned utility in this field would be in the best interests of the future of Canada. It has been mentioned in this debate that natural gas, although it is a very important source of fuel and power, is only one of the sources of fuel and power in this country. There are also oil and coal, and there will be in the future atomic energy and perhaps new forms of energy about which at the present time we do not even know. In those circumstances, surely it would be wise to have some sort of national fuel policy, some sort of integrated planning, in order that all these various forms of energy,
2198	HOUSE OF
Northern Ontario Pipe Line Corporation fuel and power could be used to the best advantage in every part of the country.
Fears have been expressed from time to time on this subject. I remember that on many occasions the hon. member for Cape Breton South has pleaded in this house for a national fuel policy because of the fact that, when different forms of fuel and energy come into competition with one another, it can only result in inefficiency and confusion so far as the fuel policy in this country is concerned. With a publicly owned utility on the basis I have described, with the trunk line owned by the federal government and provincial lateral lines and municipal distribution systems, it would be possible to set up a national fuel policy that would result in the best possible utilization, in the most efficient manner and in the best public interest, of all the various fuels that we have in this country. Unless that is done, unless some intelligent planning and foresight is forthcoming at this time, then I predict that we are going to head into the most chaotic condition possible with regard to the various fuels in this country.
In introducing his legislation today the minister gave some of the facts with regard to the agreement that has been drawn up between Trans-Canada Pipe Lines and the federal government, with the co-operation of the Ontario government. The impression might be left that the proposals upon which the agreement is based were proposals made by the company, which the government accepted because it felt that was the only way out. As a matter of fact they appear to be a set of proposals based on the proposals of the minister himself, which I refer to in a letter dated August 30, 1955, from the executive vice president of Trans-Canada Pipe Lines, Mr. Charles S. Coates, to the minister. I shall read the first paragraph of the letter. It says:
Dear Sir:
On August 2, 1955. you spoke to Trans-Canada Pipe Lines Limited on behalf of the government of Canada and after consultation with the province of Ontario to the effect that, in the interest of an early completion of the all-Canadian pipe line, 'the two governments concerned would be vitally interested in receiving from us a proposal, the essence of which would provide that-
Then it goes on to set out in about 11 paragraphs what would be contained in those proposals' as suggested by the minister. I find a very strong similarity, almost an identity, between those 11 paragraphs and the final agreement as it was signed between the company and the government, which means that actually the government went out of its way to approach a private company to offer an agreement that, whichever way you look


at it, can only be described as being favourable to the company, with all the risk being taken by the government.
The situation is simply this. As between the government and Trans-Canada Pipe Lines, it is a case of heads you win, and tails I lose. What does the agreement provide for? It provides that the company shall take a lease on this section to be built by the crown company for a period not exceeding 25 years, and pay for it as they use it. There is no guarantee whatever that the government is going to receive anything more than they put into the construction of the pipe line. In other words there is no guarantee of a profit or a surplus to the government. There is no undertaking in the agreement under which Trans-Canada Pipe Lines must buy this pipe line at a particular time. Section 7 of the agreement, which is the clause referring to the purchase of the pipe line, is in these terms:
It is understood and agreed by the parties hereto that Trans-Canada shall purchase the northern Ontario section from the crown corporation as soon as it can arrange the necessary finances.
I should like hon. members to note the last few words, "as soon as it can arrange the necessary finances." That leaves it wide open as far as the company are concerned. It does not commit them to anything. If the pipe line turns out to be an unprofitable undertaking the company can simply say that they have not been able to arrange the necessary finances. They have been quite successful in getting away with that claim for the last four or five years, and they could certainly make that claim again. They have no commitment whatever. On the other hand, the next sentence reads:
Trans-Canada may elect to purchase the northern Ontario section from the crown corporation at any time during the term of the lease by giving written notice to the crown corporation at least three, months prior to the date when the sale is to be completed.
Here is the next sentence:
The crown corporation will, following receipt of such notice, sell to Trans-Canada all facilities and assets comprised in the northern Ontario section of pipe line . . .
Then follow various details and terms upon which the sale will be made. That means that while the company makes no commitment to buy the pipe line should it turn out to be unprofitable the government, on the other hand, has a firm commitment to sell on the basis of three months' notice at any time. At any time, in the first year, second year or third year, whenever the company feels like it, it can purchase this section of the line in Ontario on three

months' notice and the crown company will sell to Trans-Canada Pipe Lines.
That is the most astonishing kind of deal. Here we have the government of Canada tying the hands of the crown corporation even before it has been formed, even before the legislation has been passed to bring about its formation, and saying in an agreement with a private company that the private company can serve three months' notice on the crown corporation and say that it is going to buy this section of the line and the crown corporation has nothing to say about it. Apparently the parliament of Canada will have nothing to say about it. Neither will the government of the day, unless they want to go to court and repudiate their agreement. That is tying the hands of the government of Canada, the parliament of Canada and the crown corporation set up by the parliament of Canada in advance in the interests of a private company.
That in itself would be enough to condemn this kind of legislation, because I feel that if the public treasury is being asked to advance moneys to construct a section of the pipe line, and if parliament is being asked to set up a crown corporation to own that part of the pipe line, then certainly the government has no business entering into an agreement and making a commitment with a private company whereby on 90 days' notice it can buy out the assets of the crown corporation, while on the other hand, if the pipe line is not to the liking of the company it is under no obligation whatever to buy it at any particular time. That is why I say that this is a case of heads they win and tails we lose.
There is another reason why I feel disquieted about this type of legislation and agreement, and the effect they will have on the municipalities. Several times in the debate this afternoon mention was made of the difficulties that Trans-Canada Pipe Lines seem to have had and apparently are still having with respect to raising sufficient private capital to build the pipe line. It would appear that because of that fact they, had to approach the government to ask for public moneys to help them build' the line. When this matter was being kicked around in the newspapers last year I took the trouble to write a few letters to the heads of some of the municipalities in my province. As a matter of fact I also wrote to the provincial leaders of the various parties in my province with respect to the question and asked what their views were on it. I will not have time to go through all the correspondence, but I have one letter to which I wish to refer because I think it sets out rather clearly what the danger is.
I mentioned that the company claims it is having difficulty finding sufficient private
15. 1956	2199
Northern Ontario Pipe Line Corporation capital to build the pipe line. I have a letter here from the mayor of the city of Portage la Prairie, Manitoba, dated March 7, 1955, in reply to a letter of mine setting out the proposal as it then was with respect to Trans-Canada Pipe Lines and asking how in his opinion this would affect the cities and towns in our province on a municipal level. He gave me some interesting information which I think the committee would like to hear. After referring to the way in which Trans-Canada Pipe Lines was set up he went on to say:
A large proportion of the stock of this company is either owned or controlled by Osier, Hammond and Nanton.
This afternoon the minister named Mr. Osier as one of the directors of the company. Osier, Hammond and Nanton are a well known financial firm in the city of Winnipeg. The letter goes on:
Recently this same firm has made application for the incorporation of a gas distributing holding company under the name of Inter City Gas and so far as I know they have a Manitoba charter or they have at least applied for same. The general idea is that this holding company would back or underwrite local distributors in such places as Neepawa, Brandon, Portage, etc., who in turn would form a company to be known as the Portage Gas Distribution Company or the Neepawa Gas Distributing Company. The parent organization. Inter City Gas, would hold stock in each of the local distribution companies. This appears to be leading into a type of monopoly by a financial concern.
In consultation with Osier, Hammond, and Nanton through their own Mr. Osier we have been informed that there is no lack of funds for these local projects estimated to cost in Portage, for example, $7E0,QG0.
Then he goes on to say:
I have begun-to wonder just why there is such an abundance of, money for the local projects and such a scarcity for the trans-Canada pipe line.
What does that indicate?-It indicates that tl?e same financial interest which has a substantial holding in Trans-Canada Pipe Lines, instead of putting it's capital into the building of the main pipe line, is prepared to put a large amount of capital into a holding company in Winnipeg for the purpose of acquiring an interest in the various local distribution companies throughout the province of Manitoba. In other words, instead of using their capital, their financial structure and strength to build the proposed trans-Canada pipe line, which they claim they are having so much difficulty financing, they are already going out and making sure they will have tied up not only the main pipe line but the distribution system within the province of Manitoba. They are already in the process of forming a local monopoly before they have even completed their national monopoly.
2200	HOUSE OF
Northern Ontario Pipe Line Corporation
It only goes to indicate that there is not a lack of funds as such for the construction of the pipe line itself, but that these companies who are interested in tying up the distribution of gas entirely are prepared to use the funds they have in order to go into the local cities, towns and communities to be served by the pipe line and make sure they have every city and town completely tied up through a system of subsidiaries or holding companies in order that they will have complete control of the distribution system.
That is a direct threat to the municipalities and to the provinces, because they go out to these various cities and towns, through their dummy companies, and offer them long-term contracts. They ask for franchises which in some cases might mean 20, 30 or even 50 years. They tie them up on a certain basis. They own the trans-Canada pipe line. They own the lateral lines. They own the local distribution systems through their dummy companies and they have then a complete stranglehold, a complete monopoly, on a public utility from the gas fields right to the kitchen range.
Is that the kind of thing that should have the assistance of this parliament, which is supposed to be here to guard the public interest and to see to it that the consumer of Canada gets a fair break with respect to the distribution of gas? Is that the kind of thing that this parliament should be assisting in promoting? It would be bad enough if this company were going out and doing this thing on its own hook, on its own capital, through its own financial structure. But it is twice as bad to have the Minister of Trade and Commerce get to his feet in this house and say that the public treasury of Canada is going to kick in anywhere up to $130 million in order to assist this monopoly to get a stranglehold upon the distribution of natural gas right across the four provinces that it is going to traverse.
That is the kind of thing the people of Canada should know about. They should realize that the public purse is being asked to aid and abet the setting up of a public monopoly not only in the transportation of gas from the Alberta gas fields to eastern Canada but also, through the interaction of these various financial interests that are part and parcel of Trans-Canada Pipe Lines Limited, assist them to obtain a monopolistic position in relation to the consumers in the various cities and towns in the prairie provinces. Of course the same thing would hold true in the province of Ontario. That is the

serious thing we are opposing in this parliament. That is the reason we feel this legislation should be opposed and stopped, if it is at all possible.
The other day I asked a question of the Minister of Trade and Commerce with respect to the control of prices. I based my question on a statement that had been made by the attorney general of the province of Ontario to the effect that the province has no authority to control the price of gas except that which goes to the consumer; that so far as gas from the pipe line to the utility is concerned, it comes under federal control. On March 12 last I addressed a question to the Minister of Trade and Commerce. I will not bother reading the question or the whole answer. I shall just read the paragraph which has to do with the price. As reported at page 2019 of Hansard he said this:
I notice in the press that the chairman of the board of transport commissioners was reported to have said that the board has no authority to regulate the price of gas in the pipe line even though the pipe line is interprovincial in character.
If what the minister says in that answer is correct, we have this situation. Neither the federal government, apparently, nor the provincial government have any power at the present time to regulate the price of gas from the pipe line to the distributors. That leaves the distributors-and of course, as a consequence, the consumers-completely at the mercy of this pipe-line monopoly. We are therefore opposing this legislation, because we feel that it is aiding and abetting the setting up of a gas monopoly in this country. We feel that it is a sort of trans-Canada give away. If this company requires a coat of arms, Mr. Chairman, to use as a trademark, I suggest it should give consideration to an octopus on a maple leaf shield with a background of stars and stripes.


William Alfred Robinson: Shall the resolution carry?


Mr. Johnston (Bow River):: Mr. Chairman, may we call it ten o'clock?


Some hon. Members:: No.


William Alfred Robinson: Has the hon, member unanimous consent to call it ten o'clock?


Some hon. Members:: Agreed.
Progress reported.



BUSINESS OF THE HOUSE

Walter Edward Harris: Tomorrow we shall take the estimates of the Department of Transport.
I understand that Monday is private members' day.


[Stage Direction]
At ten o'clock the house adjourned, without question put, pursuant to standing order.

[Stage Direction]
The following answers, deposited with the Clerk of the house, are printed in the official report of debates pursuant to standing order 39:

Mr. Diefenbaker: 1.	What companies or groups hold substantial sponsoring interests in Trans-Canada Pipe Lines Limited?
2.	What are the respective interests in Trans-Canada Pipe Lines Limited held by (a) Hudson Bay Oil & Gas Company Limited; (b) Canadian Gulf Oil Company; (c) Canadian Delhi Oil Limited; (d) Tennessee Gas Transmission Company; (e) the Western Pipe Lines group?
3.	What is the parent company or corporation of each of said companies?
4.	Who are the member companies or individuals in said group?
5.	What proportion of shares in each of said companies is held by a non-Canadian parent company, and what proportion by the Canadian public?
Answer by: Mr. Howe (Pori Arthur):
The answers to questions 1, 2 and 4 are contained in the agreements among the sponsors of Trans-Canada Pipe Lines Limited, which were tabled on February 20.	*
Questions 3 and 5 relate to the distribution of the shares of the various participating companies. Information relating to these matters is not available from government records.


POST OFFICES, MONTREAL  BURGLARY ALARM AUTHORIZATION
Mr. Hamilton (Notre Dame de Grace): 1.	Has the federal government requested and received authorization from the police department of the city of Montreal for the installation in 10 postal stations in that city of burglar alarms which will be linked directly to the nearest police station?
2.	If so, on what date was the request made, and on what date was the authorization received?
Answer by: Mr. Lapointe:
1 and 2. On December 27, 1955, the federal government requested authorization from the police department to connect a certain number of burglar alarms from postal stations directly to the nearest police station. On January 30, 1956, the requested authority was received.


IMPORTS OF U.S. AUTOMOBILES
Mr. Noseworihy: 1.	What is the total number and value of United States automobiles imported into Canada for the years, 1950 to 1955, inclusive?
2.	By what firms were such automobiles manufactured, how many and of what value by each firm?
Questions
3.	What makes and how many of each make of car were imported?
4.	What series and how many of each series of each make were imported during the above period?
5.	What makes and series of cars imported were also manufactured in Canada during the above years?
Answer by: Mr. Howe (Pori Arthur):
1.	The total number and value of passenger automobiles (statistical classifications 5642, 5643 and 5644) imported into Canada from the United States during the years 1950 to 1955 were as follows:
Year	No.	Value1950	
3,154	$ 6,038,4821951	
14,050	29,142,6231952	
13,828	27,409,1231953	
23,501	47,754,9411954	
17,954	39,098,8371955	
27,392	58,886,5872,	3, 4 and 5. Section 15 of the Statistics Act precludes the disclosure of information relating to private business.


NATIONAL REVENUE SURVEY
Mr. Knowles: 1.	Has the Department of National Revenue made any survey or any investigation to determine to what extent taxpayers in Canada realize a monetary gain as a result of purchasing shares of various companies at a price below that prevailing on the stock market?
2.	If not, will the department make such an investigation or survey?
3.	Are such gains taxable?
Answer by: Mr. McCann:
1.	No.
2.	Such a survey is not presently being contemplated by the department.
3.	The purchase of shares at a price below fair market value may give rise to taxable income under certain circumstances, e.g. where the purchaser is in the business of buying and selling shares or where he is a shareholder or employee of the vendor. Employees receiving benefits of this nature are entitled to special treatment under section 85A of the Income Tax Act.


DUMPING DUTIES
Mr. Lennard: 1.	What was the total amount applied as dumping duties on goods entering Canada, during the calendar year of 1955?
2.	How much of this amount was applied against textile products: (a) hosiery and half hose; (b) underwear; (c) outerwear?
Answer by: Mr. McCann:
1.	$1,180,513.
2.	No records are kept of the amount of dumping duties collected by commodity.

Questions


POST OFFICE REVENUE
Mr. Rea: What revenue was obtained by the post office for householder mail (a) for the three years prior to April 2, 1951; (b) for the three years subsequent to April 2, 1951?
Answer by: Mr. Lapointe:
(a)	1948-49, $950,413.91; 1949-50, $1,310,924.98; 1950-51, $1,615,472.39.
(b)	1951-52, $2,027,903.55; 1952-53, $2,143,751.78; 1953-54, $2,576,259.24.



END OF VOLUME II


[Stage Direction]
EDMOND CLOUTIER, C.M.G., O.A., D.S.P. queen's PRINTER AND CONTROLLER OF STATIONERY OTTAWA, 1956
[Stage Direction]

Monday, February 13, 1956