1956-05-17

PRIVATE BILLS


Mr. W. J. Henderson (Kingston):: Mr. Speaker, I should like to move, seconded by the hon. member for Niagara Falls (Mr. Houck):
That the petition of Niagara Lower Arch Bridge Company Limited for a private bill, presented on May 14, 1956, together with the clerk of petitions' report thereon of May 15, 1956, be referred to the standing committee on standing orders for such recommendations as may be deemed advisable.


[Stage Direction]
Motion agreed to.


[Stage Direction]
On the orders of the day:
Mr. R. R. Knight (Saskatoon):: I should like to direct a question to the Minister of National Defence. In view of the recent consideration which he has given to the matter, is the minister now prepared to state if the Department of National Defence is prepared to share part of the responsibility with respect to drainage of the slough known as Hudson Bay slough which borders on national defence property at the airport north of Saskatoon?


Hon. R. O. Campney (Minister of National Defence):: Mr. Speaker, I thank the hon. member for giving me notice of his intention to ask this question. I visited Saskatoon recently and this matter was brought to my attention. Since my return to Ottawa I have been looking into the background of the situation. As a result I am satisfied-and this was the point at issue-that the presence of our airport at Saskatoon has added somewhat to the drainage problem that existed there, and I am making certain suggestions to the mayor of Saskatoon with a view to meeting the situation.



CREAT LAKES SEAMEN'S STRIKE


[Stage Direction]
On the orders of the day:
Mr. H. R. Argue (Assiniboia):: I should like to direct a question to the Minister of Trade
and Commerce arising out of the great lakes shipping strike. Can the minister say generally what quantities of feed grains are now available in eastern Canada and whether adequate rail shipments can be secured in order that eastern farmers may be assured continuing supplies of western feed grains?


Right Hon. C. D. Howe (Minister of Trade and Commerce):: Of course I have not the quantities at hand, but to the best of my knowledge there is no shortage of feed grains at the moment. Movement from Fort William and Port Arthur is continuing. A certain amount of grain is shipped down the lakes each day and I think that will continue to be the case. As far as rail movement east from the lakehead is concerned, small quantities of grain are being shipped every day and the quantities could be stepped up very readily. Movement east of Port Arthur is not being taxed to capacity, and I see no reason at all to suppose that there will be any difficulty about either domestic supplies or supplies for export during the next two or three weeks.



BRIDGES


[Stage Direction]
On the orders of the day:
Mr. F. E. Lennard (Wenfworih):: I should like to direct a question to the Minister of Public Works. What arrangements have been made to maintain the immediate highway approaches to the federal vehicle bridge, and the bridge itself, over the Burlington channel to help maintain this secondary highway after the completion of the new Burlington channel bridge by the provincial government of Ontario?


Hon. Robert H. Winters (Minister of Public Works):: I think the hon. member is aware that the government has been maintaining the bridge. One side of the bascule bridge was destroyed some time ago and was replaced by a permanent structure which has been maintained by the federal government. Regarding the federal government's present attitude with respect to the permanent nature of the structure, I think a reference to the correspondence tabled in the house exchanged between the Ontario government and ourselves will indicate our views on that point.
4018	HOUSE OF
Inquiries of the Ministry HOUSE OF COMMONS



REFERENCE TO LANGUAGE USED IN DEBATE OF MAY 15

[Stage Direction]
On the orders of the day:
Mr. Gordon Churchill (Winnipeg South Centre):: I should like to direct a question to the Minister of Trade and Commerce and ask him if he intends at this stage in our proceedings to make any comment with regard to his obnoxious language as recorded on page 3939 of Hansard, and I should like to ask him whether his reference to a "louse" was to himself or to me.


Mr. Pickersgill:: Just a trained seal.


Clarence Decatur Howe: There was a good deal of offensive language at that time. I take deep offence at this reference to myself and I am far from satisfied with the correction, which is equally offensive. The remark I made at the time was a first reaction to the hon. member's remarks and expresses in somewhat unparliamentary language the feeling I had about the situation.


Mr. Drew:: Mr. Speaker, with this precedent now before us, perhaps it will be permissible as well as appropriate to describe this government as lousy.


Mr. Speaker:: Order.



LABOUR CONDITIONS


[Stage Direction]
On the orders of the day:
Mrs. Ellen L. Fairclough (Hamilton West):: Mr. Speaker, I should like to address a question to the Minister of Labour. Can the minister give this house any information on the progress being made in the settlement of the dispute between the seafarers' international union and the steamship owners?


Hon. Milton F. Gregg (Minister of Labour):: Nothing in addition to what I gave yesterday, Mr. Speaker, except to say that the negotiations are still moving forward with good hopes.



FREIGHT RATES


[Stage Direction]
On the orders of the day:
Mr. W. M. Howe (Wellinglon-Huron):: should like to address a question to the Minister of Agriculture. Will the government give immediate consideration to the necessity of raising the present $4.50 freight rate subsidy on feed grains to the original


$6 rate? Owing to the extremely late spring and the tie-up of shipping on the great lakes the eastern Canadian farmer finds himself faced with the necessity of buying additional feed which has become costly and scarce.


Right Hon. J. G. Gardiner (Minister of Agriculture):: Mr. Speaker, the government a year ago gave full consideration to the freight rates assistance which is given on the shipment of feed grain from the prairies to other parts of Canada and equalized them as among the different sections of Canada to the point where we think they may be justified.



WATER RESOURCES


Mr. W. B. Nesbitt (Oxford):: I should like to address a question to the Minister of Northern Affairs and National Resources. Has the government as yet reached any decision with respect to an appropriation in the supplementary estimates for the upper Thames valley authority?


Hon. Jean Lesage (Minister of Northern Affairs and National Resources):: No, Mr. Speaker.



NORTHERN ONTARIO PIPE LINE CORPORATION


[Stage Direction]
On the order:
Second reading of Bill No. 298, an act to establish the Northern Ontario Pipe Line Crown Corporation.-The Minister of Trade and Commerce.
Mr. Stanley Knowles (Winnipeg North Centre):: Mr. Speaker, I rise on a point of order. My point of order relates to the form of the bill, second reading of which has now been called. In the first place I would direct Your Honour's attention to page 357 of Beauchesne's third edition where there are given a number of rules of the House of Commons having to do with bills.


Mr. Speaker:: Order. May I immediately inform the hon. member that at one time I went into what he calls the rules of the House of Commons pertaining to the preparation of bills. This is a report from a committee of this house at one time but the report was never concurred in by the house. It may serve as a guidance to draftsmen but it is not binding on the house.


Stanley Howard Knowles: All right, Mr. Speaker. I will not press that aspect of my point of order.


Mr. MacDougall:: Quote from the Simpsons-Sears catalogue.


Stanley Howard Knowles: So that those who read the record will know what you and I were talking about, Mr. Speaker, may I point out that rule No. 4 to which I referred calls for bills to be accompanied by explanatory notes opposite each clause of the bill. The bill before us has no such explanatory notes on any of the right-hand pages explaining any of the clauses of this bill.
The other aspect of this bill, as to its form, which I submit makes it impossible for us to proceed with it at this time, is that in the bill there is a reference to an agreement; yet the bill does not contain as a schedule thereto the agreement referred to in the bill.
I point out for Your Honour's consideration that the wording in this bill is quite different from that in some other bills in which it is said that the government may enter into an agreement. Rather, the wording here implies the existence of an agreement. I remind Your Honour that there are any number of statutes on our books, such as the Canada Shipping Act; the Great Lakes Fisheries Convention Act; the Bretton Woods Agreements Act; the Terms of Union with Newfoundland (Approval) Act, and a number of others I have listed, such as acts regarding income tax agreements with certain countries, in which parliament was called upon to deal with agreements that had been made by the government with another body or another jurisdiction. In each of those cases the agreement that had been made was made a schedule to the act so that parliament was brought into the picture.
In this case, though the agreement has been tabled and is known as sessional paper No. 174-P of the House of Commons, and though there has been plenty of reference to an agreement, and though some of us have copies of it and know what is in it, this agreement is not made a schedule to the bill. The bill makes reference to some of the conditions that would have to obtain in an agreement between the government and Trans-Canada, but the conditions set out in the bill that that agreement would have to meet are very few. I want to stick directly to the point of order, but just as an example may I point out that there is nothing in the bill that says the agreement must have in it a date by which the western leg of the pipe line is to be completed; there is nothing in the bill which says that the agreement must have in it a date by which the shortterm loan is to be repaid.


Mr. Speaker:: Could the hon. member tell me how these so-called omissions make it impossible at this moment for the house to consider second reading?
Northern Ontario Pipe Line Corporation


Stanley Howard Knowles: Because, Mr. Speaker, it is a well established principle of our parliamentary institutions that parliament, indeed the House of Commons in particular, has complete control over the expenditure of money. If we are going to be asked to consider a bill which gives the government the power to make an agreement, the terms of which are not included in the bill, we are thereby giving the government power that properly belongs to the House of Commons.
In that connection, I remind Your Honour of some very important quotations that have been read to this house before by none other than the late William Lyon Mackenzie King. May I refer you in particular to page 159, volume 3 of Redlich, one of the authorities with which Your Honour is quite familiar. He says this:
At first glance there does not appear to be much to learn from tracing the history of the forms of financial procedure. The motive power in financial development is not to be found in procedure, but in the growth of constitutional principles, in the acquisition by parliament of the sole right to grant taxes and in the further evolution of the predominance of the commons as the true representatives of the nation.
Later on the same page he says, and I ask that you take particular note of these words:
Soon after the great change made at the end of the 17th century, political experience showed that a second principle must be established before the foundations of parliamentary government could be regarded as secure. It was necessary to gain for the commons full and unrestricted control over the destination of the money spent, to enable parliament to check its application and to see that expenditure corresponded to the grants made.
Similarly Mr. King on one occasion made reference to Durell's volume entitled, "Parliamentary Grants". In fact I note that certain passages on page 3 of this volume are marked with a pencil and for all I know they may be Mr. King's pencil marks.
It is one of the old standing principles of our constitution that the House of Commons should control the finances of the country. In other words, the cardinal principle on which the whole of our financial system is based is that of parliamentary control, and by this is understood not the control of parliament in its constitutional sense as composed of sovereign, lords, and commons, but control by the commons alone.


Mr. Speaker:: I indicate immediately that no one can contradict those basic principles; but how does the hon. member relate those principles to the bill and the second reading of it?


Stanley Howard Knowles: Thank you for that question, Mr. Speaker. In my thinking the relationship is very direct. We have been given the right to look at an agreement made between the government and Trans-Canada but, as a parliament, this bill does not involve us in
4020	HOUSE OF
Northern Ontario Pipe Line Corporation that agreement. In other words, after the passing of this bill the government can amend that agreement or make some other kind of agreement which would not have to provide for the repayment of the money or that the company be regarded as in default in the event of failure to achieve construction by a certain date. Therefore, because the agreement is not annexed to this bill as a schedule, because parliament is not made a party to this agreement, we cannot be sure that it will not be altered, amended or substituted, as has already happened in relation to this company.
In other words, Mr. Speaker, we are being asked to part with our control over the ultimate destination of this money; we are being asked to part with control over the guarantee of repayment; we are being asked to part with control over the terms and conditions under which the company would be regarded as succeeding or defaulting. And it is because we are being asked to part with that control that I submit that by this bill in its imperfect form we are being called upon to violate some of these basic principles to which I have already referred.
I would point out, Mr. Speaker, that though the bill itself does provide certain conditions that must obtain in the agreement, those conditions are far less than are contained in the existing agreement that is circulating amongst us; but we as a parliament are not a party to the agreement circulating amongst us and we will not be a party to it unless it is included in the bill as a schedule thereto.
I submit, Mr. Speaker, that in view of all the changes, the extensions and so on that have happened in the past, we have the right to feel that unless parliament itself is involved in this agreement, unless we are a party to it, unless it is in the bill, we have no guarantee that the agreement will not be changed by the two parties to it, and I feel that under the basic principle of the right of parliament to maintain control over the voting of money, over the destination of that money, we have the right to have before us a bill which is more than something pretty close to a blank cheque; we have the right to have before us a bill which includes in it as a schedule something that we vote on or in other words the very agreement that is going to be implemented so far as this whole proposition is concerned.
I am not denying the bona fides of the parties that made the agreement that is before us as sessional paper 174-P. The important point is, so long as it is only a two-party agreement those two parties can change it. What we need, if parliament is to be asked to vote for this, is a three-party arrangement. We have to be in on it, too. I submit 

that for reference to be made to this agreement, for it to be tabled, for it to be discussed by the minister who is sponsoring the bill and yet to keep it apart from the bill so that the government and Trans-Canada can amend it or change it as they wish to is being unfair to parliament and to that extent I suggest this bill is imperfect in its form; that it violates the basic principles of parliamentary control over the expenditure of money and that Your Honour should not allow the minister to proceed with it at this time. Indeed, under the provisions of citation 634 of Beauchesne's third edition, I suggest it is quite clear what Your Honour should do. Citation 634 reads:
If the Speaker finds that the bill is in blank or in an imperfect shape, he will decline to put the question and will return the bill to the member who must take another opportunity of bringing it up in conformity with the rules.
Because of the extent to which this bill is blank in that it does not have the agreement attached to it as a schedule, and because of the imperfection in that it violates the principle of parliamentary control over expenditure, I submit that Your Honour should return the bill to the hon. member who is seeking to move it and ask him to correct these imperfections.


Mr. McCullough (Moose Mountain):: Mr. Speaker, I rise on a point of order.


Mr. Speaker:: There is a point of order before the house now. The hon. member cannot rise on a point of order when there is one point of order already before the house.
The hon. member for Winnipeg North Centre has indicated that the bill has no marginal notes and no explanatory notes. The explanatory notes are not a part of the bill nor are the marginal notes. The bill has no marginal notes and no explanatory notes and they are not a part of the bill. The bill consists of the various clauses that are there. In order to judge whether a bill is in blank or in an imperfect shape, it had to have blanks when it was introduced and given first reading. There were seven consecutive sections.
The hon. member should perhaps remember that when the motion is made for first reading, the motion in fact has become so purely formal that we do not ask that the bill be now read a first time and be printed but in fact that is being ordered by the house to satisfy the requirements of standing order 74 which says:
All bills shall be printed before the second reading in the English and French languages.

Standing order 72 applies to the introduction and prior to first reading. It says:
No bill may be introduced either in blank or in an imperfect shape.
Therefore at that moment the hon. member cannot raise that point of order because he does not have a copy of the bill. The bill has not been printed. It is my duty, however, to satisfy myself. My satisfaction must be made on a very summary basis because hon. members cannot expect the Speaker to study every bill in an effort to find out whether or not something has been omitted. Hon. members have taken care of that situation themselves by insisting in their procedure that after second reading all bills be referred or committed either to one of their standing committees or to the committee of the whole and even if a bill goes to a standing committee it must be committed to the committee of the whole.
In the committee of the whole proper amendments may be moved, new clauses may be inserted and schedules may be inserted and that is the manner in which it is being done. To raise a point of order and say the second reading of this bill cannot be put because there is an omission in it is not correct. I think the hon. member will admit his point as to explanatory notes is not a good one and I do not think he would insist on that point.


Stanley Howard Knowles: Mr. Speaker-


Some hon. Members:: Sit down.


Stanley Howard Knowles: Mr. Speaker, in order to clear the ground for the more important objection, I will withdraw the first objection. But I press the second one.


Mr. Speaker:: The hon. member's main objection is this. It is his contention that, because this bill refers to an agreement and the terms of the agreement not being a part of the bill and not being printed in extenso in the bill, the control of the house over the expenditures which may be involved therein is being denied. That is the way I would summarize the point the hon. member has made.
Control of parliament over expenditures is exercised through the financial initiative of the crown. The crown must recommend any expenditures which have to be passed through the house. The way the crown signifies its recommendation is through the Speaker now announcing that a royal recommendation has been given to a resolution that outlines the expenditures involved. When we are not dealing with a money bill, the case does not obtain. In this instance we are dealing with a money bill. The
Northern Ontario Pipe Line Corporation exigencies of the control of the house over expenditures have been met, in my view, by the fact that a resolution has preceded this bill, a resolution which was accompanied by the royal recommendation. These are the requirements of the British North America Act. These are the requirements of standing order 61.
We have done exactly what must be done in relation both to the section of the British North Amercia Act and to standing order 61. We have gone into committee of the whole. We have examined the resolution, which does not contain any details of the various sections of the bill but just gives an outline of the exependitures contemplated later in the bill. At this moment the bill has received its first reading, and it was ordered to be printed. Now it is up for second reading. If the hon. member's point was right, a new resolution would have to be introduced, because that is the only way to correct something missing in a bill in which the financial initiative of the Crown is involved. If that is not the point, then it can be corrected by the proper amendments being moved when the bill is in committee of the whole being studied, clause by clause.


Mr. M. J. Coldwell (Roselown-Biggar):: May I just say one word in support of my hon. friend? As far as the amendment of the bill in committee is concerned, that is problematical because often amendments moved in committee are rejected by the committee and therefore are not reported to the house.


Mr. Speaker:: May I just say to the hon. member that surely he cannot expect the Speaker to rule on the probability that amendments may not be adopted.


Major James William Coldwell: I did not ask you to rule on that. I simply made the remark, which I think is perfectly correct, in regard to what happens in this house. This particular bill refers to an agreement-an agreement, moreover, made with the approval of the government of Canada before or after the coming into effect of this particular measure. We have no knowledge of that agreement other than that it was tabled and circulated through the house by request of members. This agreement is one of the most important agreements coming before the house in my time. In my opinion, as the hon. member for Winnipeg North Centre has said, this house should not only be apprized of what is in this particular agreement but this house should approve of the agreement when this bill is before the house on the second reading. We should be given that chance on the second reading.

Northern Ontario Pipe Line Corporation
SI submit that the bill was imperfect in the sense in which the rules require and that this bill should not be allowed by Your Honour to be proceeded with this afternoon. It is defective in a number of particulars. I,am not going into them now. If we proceed, I, shall go into them a little later on. But I think it is perfectly obvious that the main point of my hon. friend's objection is that the bill is imperfect because the House of Commons will not be giving by legislation approval of this very important agreement, which to my mind is fundamental to the whole discussion at the present time.


Mr. Speaker:: I just want to say that, notwithstanding whatever sympathy I may have with the points that have been brought up, I cannot accept them as being a valid point of order at this stage in order to prevent the second reading being proposed by the Chair.
We are not dealing with the details of the bjll at this moment. The second reading of the bill, according to citation 656 from Beau-chesne's third edition, is that stage when it i^ proper to enter into a discussion and propose a motion relative to the principle of the measure.
It is precisely because there may be some imperfections in the bill that may be corrected after debate and motions proposed for the purposes of amending, which means either deleting or adding that the bill must go into committee of the whole. Sections cannot be referred to during the debate on the second reading. Therefore I must put the motion.


Stanley Howard Knowles: Mr. Speaker, are you ruling that this bill is in order?


Mr. Speaker:: I am ruling it is in order now to put the motion for second reading of the bill.


Stanley Howard Knowles: Then, sir, I appeal your ruling to the house.


Mr. Speaker:: Those in favour of sustaining the Speaker's ruling will please say yea.


Some hon. Members:: Yea.


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


Some hon. Members:: Nay.


Mr. Speaker:: In my opinion the yeas have it.
And more than five members having risen:


Mr. Speaker:: Call in the members.


Mr. Mclvor:: More obstruction.
Mr. Speaker put the question as follows:
Ml. Knowles raised a point of order as I was proposing the question on the second reading of

this bill, intituled an act to establish the Northern Ontario Pipe Line Crown Corporation, to the effect that the provisions of this bill violated the principle of parliamentary control over finances since the agreement referred to in the bill was not being submitted to the house. I ruled that since the requirements of the British North America Act and of standing order 61 in respect of financial measures had been met. and since further it was customary not to include agreements in bills providing for the carrying into effect of these agreements-and I would refer hon. members to chapter 71 of the statutes of 1947, an act to provide for carrying into effect treaties of peace between Canada, Italy, Roumania, Hungary and Finland, in which none of the agreements were inserted in the bill-it was in order to proceed with the motion for the second reading of the bill.	.


Mr. Speaker:: I declare the ruling sustained.


Mr. Fulton:: Mr. Speaker, I rise on a question of privilege.


Mr. Stuart (Charlotte):: We expected that.


Edmund Davie Fulton: During the discussion of the point of order just raised I sent to the table for a copy of Beauchesne's third edition.


Andrew Wesley Stuart: Why don't you get Bourinot?
17, 1956	4023
Northern Ontario Pipe Line Corporation


Edmund Davie Fulton: When the volume arrived-and I now have it in my hand-I found in it a document which I hold up so you can see it. This document in the book coming from the table contains, in handwriting in pencil, the following words:
That Mr. Fulton, member for Kamloops, be suspended from the service of the house for-
Then there is a blank and some dots in pencil, then underneath:
-the remainder of the present sitting.


Mr. McCann:: Pretty weak.


Edmund Davie Fulton: Mr. Speaker, I do not know whether I should take this as a reminder or a threat or whether I should take it that the government feels that it is not going to get the measure through the house without such threats. But I want to assure them that-


Mr. Speaker:: Order.


Edmund Davie Fulton: -they will not work.


Mr. Harris:: Mr. Speaker,-


An hon. Member:: Did the Minister of Finance write the note?


Walter Edward Harris: -I think that privately I would say that I did not, but publicly I wish to say that it is not a document in the possession of the house and therefore could not be a matter for comment. May I just add that any suggestion that the government might be considering that this action would be an advantage is not well founded. I assure you, Mr. Speaker, that I am delighted to have the hon. member here because he helps us on many occasions.


Clarence Decatur Howe: the second reading of Bill No. 298, to establish the Northern Ontario Pipe Line Crown Corporation.
He said: Mr. Speaker, on earlier occasions-


Mr. Barnett:: Mr. Speaker,-


Mr. Speaker:: I see that the hon. member for Comox-Alberni is also on his feet. Is it either a question of privilege or a point of order to which he wishes to speak?


Thomas Speakman Barnett: A question of privilege, Mr. Speaker. Just when the hon. member for Kamloops (Mr. Fulton) rose in his place I was rising simply to say that I was paired with the hon. member for Waterloo South (Mr. White). Had I voted I would have voted against the ruling.


Clarence Decatur Howe: Mr. Speaker, I have spoken on the matter referred to in the bill on two earlier occasions and on those occasions I have discussed the subject matter of the bill. On this occasion I should like to
4024	HOUSE OF
Northern Ontario Pipe Line Corporation speak first about the nature of the project of which this is a part. The project is far larger than the building of a pipe line from the Alberta-Saskatchewan border down to the vicinity of Montreal. The cost of the pipe line itself with its appurtenances is some $375 million which is of course a sizeable amount. But incidental to the building of the pipe line and the operation of the pipe line, a much larger expenditure is involved. It approximates $1 billion. The pipe line itself, of course, is not usable unless branch distribution systems are provided in the cities and towns along the way.
A great number of these cities and towns have already taken out franchises for gas distribution within the community and are only waiting to have the supply of gas definitely fixed before proceeding with their local development. In the province of Alberta a great number of gas wells must be drilled to make deliverable the gas that has been proven there, and also chemical plants must be built to remove the sulphur, butane and other liquids to make the gas suitable for the pipe line. It is a project that should appeal, I think, to the Canadian people, a project extending across five provinces and a project which means the replacement of great quantities of fuel presently imported from the United States with lower cost fuel produced within Canada.
The production of gas in Alberta goes back a good many years. I lived in Alberta for quite a period more than 40 years ago. The house which I occupied was equipped to use natural gas for heating and all other purposes. At that time gas had been brought into Calgary from the vicinity of Medicine Hat and the cost of heating in Calgary had been greatly reduced as a result of that service. Later on gas was brought into the city of Edmonton by a group headed by Mr. Ray Milner, whom I knew very well in Dalhousie. I was on the staff and he was a student. He was able to get financial help from the United States and, over the years, has built up a distribution system within the city of Edmonton.
However, the major discoveries of gas have occurred in recent years as part of the development of the petroleum industry. The natural resources of Alberta, of course, belong to the province, but licences have been issued to private industry to develop certain areas and the gas that has been developed and proven up is the property of those licensees of the Alberta government. Who are the principal holders of gas in that province? The largest is Canadian Gulf. Canadian Gulf is the owner of about one-third of all the proven gas supplies. The


second largest holder is the Hudson Bay Oil and Gas Company, which is working in co-operation with the Hudson's Bay Company in developing the mineral rights that are controlled by the Hudson's Bay Company. The third largest is the Standard Oil of California and the fourth largest is the Canadian Delhi Company.
It is interesting to note that the largest holder of gas in Alberta, the second largest holder of gas in Alberta and the fourth largest holder of gas in Alberta are the principal sponsors of the project that we are discussing today. It has been suggested in this house that these men who control Trans-Canada Pipe Lines Limited have been offering gas for export at less than the most favourable prices available. It seems rather extraordinary to me, and I think it will seem extraordinary to every hon. member in this house, if these companies have been offering gas, which they own, for export at a price lower than that obtainable from other sources.
These men have become interested in the pipe line so that they may obtain an outlet for the gas they own and for other gas available within Alberta. This has been the reason for their sponsorship of the project. The group that is sponsoring the program have bought shares to a value in excess of $15 million, and bought them for cash. They bought them at a price of $8 per share. This is one project in Canada in which there is not a single share that has not been bought at $8 or, if bought recently, $8 plus interest from the time the group was formed.
These men have been undertaking the work that is necessary before a project of this kind can move. They have been making the surveys of potential markets. They have retained consulting engineers who have prepared the engineering for the project. Earlier the group provided funds to build a gas line from the Niagara river to Toronto in order that a start could be made upon conversion to natural gas in the Toronto area and in order to develop additional markets there. They have acquired rights of way, and particularly the right of way across western Canada from Calgary to the Manitoba border. They have been working for the greater part of two years doing the necessary preliminary work for the building of the pipe line which we are discussing today. What has the government done to help? Absolutely nothing in a financial way. Not one cent of government money has played any part in the development up to the present time. What is the government's interest in the project?
Well, it seems to me a very definite interest in the project arises out of the government

policy affecting energy produced in Canada. This policy was announced some five years ago in the House of Commons, and was that the policy in connection with natural gas would be parallel with the policy on energy in the form of electricity, namely that energy in the form of gas must be made available to Canadian consumers and that only quantities of gas that are clearly in excess of the present or future needs of Canadian consumers could be permitted to move outside Canada. Having announced that policy the government, in my opinion, has some responsibility for seeing that the means of moving gas to markets available in Canada should be provided. Certainly, we had an interest in that project and we have taken an interest, not a financial interest but we have moved to the extent that we could to encourage the planning of this pipe line.
Early in the history of this scheme a proposal was made, not by the present group but by another-the hon. member for Calgary South will remember-that instead of moving gas from Alberta to these markets by a pipe line, we should allow gas to be exported south from Calgary and recovered in the vicinity of Toronto on an exchange basis. The government was unable to consider that proposal. Then a proposal was received that instead of an all-Canadian pipe line the sponsors be permitted to follow the route of the oil pipe line from Alberta; that is, a route down through the United States. There again the government rejected that proposal and said that gas must be brought to eastern Canada by an all-Canadian pipe line. That position was rather resented in Alberta. The hon. member for Calgary South (Mr. Nickle) has spoken about it in the House of Commons. It is claimed that we are putting an improper tax on the owners of the gas and making the project of supplying that gas to Canadians in eastern Canada uneconomical.
I went to Calgary at the invitation of the petroleum institute and addressed its members there at a dinner meeting. I was warned beforehand that I must submit myself to questioning after the meeting was over. I went there for the purpose of explaining why it is in the national interest that eastern Canada be served with Alberta natural gas through an all-Canadian pipe line. I had the honour of having my friend, the hon. member for Calgary South, sit beside me on that occasion. Whether I was able to convince him that evening, or whether he has seen the light since, I am not sure. But I think perhaps at some stage we have made progress in a meeting of minds on the proper method for distributing western 67509-255i
Northern Ontario Pipe Line Corporation Canadian gas. I explained the need for an all-Canadian line. I admitted that it would be more costly than alternative plans, but I said the added cost is one of the penalties we must accept for Canadian nationhood. I remember my words. I said: "There is a price on Canadian nationhood. If we always looked for the cheapest way of doing things here in Canada there might have been another state in the United States but there very likely would have been no Canada. From confederation the people of Canada have been very jealous about accepting any monetary advantage that would in any way jeopardize the control by Canada over her own resources."
It was that line that I pursued in my discussion before the petroleum institute. I must say that that position seemed to be accepted by the industry that was gathered there on that occasion; for, following the meeting, there did not seem to be any subject about which they wished to question me; at least, no questions were asked. Since then the government's requirement for an allCanadian pipe line has been accepted as a national necessity by the industry.
Then, naturally, I have followed the efforts of the sponsors of the pipe line to finance their project. I have discussed the problems with the sponsors themselves, with their bankers and with others who have attempted to assist in carrying out the project. I may say that Premier Frost over several years has been just as interested as I have been to bring about the delivery of gas into his province, and on two or three occasions I have met him, together with representatives of the pipe line company, in an effort to assist the project.
A study of the financial situation indicated that to finance the whole line across Canada, the type of line that we feel is needed for the purpose, would not be possible unless some means could be found to bridge the first three, four or five years of build-up in eastern Canada. Eastern Canada, which has never used natural gas, which in the main had no facilities for using it, presented a problem where time would probably be required before we had a financeable project to place before the banks. Well, how could the government assist in that situation? It was found that by removing the financing of the northern Ontario section, as covered by a section in the bill before us, the remainder could be financed from the inception, and given three, four or five years, the project would be in an earning position that would enable it to buy the government section. An arrangement was worked out by which the government could not possibly fail to recover
4026	HOUSE OF
Northern Ontario Pipe Line Corporation its investment over a period, which would provide for the building by the government and the use by the company of the northern Ontario section, which would result in an easing of the financial burden in the early years to be recouped when the earning period began. That provision is contained in the bill.
The government of Ontario indicated not only an interest but a real financial interest in that section of the work. It is estimated to cost $118 million. The proposal was that the province of Ontario would share one-third of the cost up to $35 million and that the federal government would provide the remainder of the money required to build the section of the line from the Manitoba border to Kapuskasing. Then the company undertook to finance the line. Part of the revenue on which we had been counting at all stages was revenue derived from the export of 200 million cubic feet of gas which was found to be in excess of present and future Canadian requirements. The company dealt with interested parties in that connection. They first had a contract for a smaller amount with the Northern Natural Gas Company which supplies the Minneapolis and northern Wisconsin area. That contract called for a rate of 29 cents, which was satisfactory to the sponsors of Trans-Canada.
Northern Natural made an application to the federal power commission and immediately ran into a storm of protests from their customers in the area, on the grounds that the offered price was too high and that the offer would involve higher rates to the present customers of Northern Natural Gas. The protests of the customers were effective with the federal power commission and the result was that the hearing on that application adjourned sine die. The contract with Natural Gas had a clause permitting either side to cancel unless the contract was implemented within a certain short period, I think it was one year. The time had elapsed. The Trans-Canada sponsors were unable to obtain a renewal of the contract. It was said that a lower price would be required, but Northern Natural have never named that lower price that they would require, and since no progress could be made with Northern Natural, Trans-Canada, to leave itself free to deal with others, cancelled the contract under the terms thereof. Then we had representations from a group including Northern Natural, People's Gas and American Pipelines Company. It was represented that this group would be able to make a proposal that would be attractive for the export of gas. The group met with me. I told them I had nothing to do with making a contract for the gas, that 

they should prepare their proposal and submit it to the sponsors of the Trans-Canada company. Later on I received a letter from them in general terms. I wrote back and said I hoped they would be successful in reaching an agreement with Trans-Canada.


Mr. Macdonnell:: A confidential letter?


Clarence Decatur Howe: Can we not proceed without jests for a few minutes? My hon. friend is very humorous but this may not be the moment for it.


Mr. Fleming:: It depends on who is doing it, eh?


Clarence Decatur Howe: That letter has been tabled, incidentally. Mr. Merriam of the group went to Calgary and met with the sponsors of Trans-Canada. It was reported to me that he had no firm proposal to make. Shortly after that a proposal was received from Tennessee Gas Transmission. That proposal was a firm proposal. It had several advantages other than the sale of gas. True, the price was lower than in the contract it superseded. The price was 25J cents per thousand cubic feet. The load factor was 95 per cent and the proposal contained an escalation clause which provided for an increasing price year by year during the term of the contract, which proposals by the other group did not contain.
In any event the sponsors decided the Tennessee proposal to be the most favourable received and a contract was signed with that company. Application was made before the federal power commission by Tennessee to implement the contract and the hearing on that application has been proceeding now for some seven or eight months.
The application has probably met with the most violent opposition in the history of the federal power commission. The results of the hearing are still unknown and that fact has seriously interfered with the financing of the pipe line. Had the application been approved, the line would have been financed and under way long before this.
Hon. members complain that we have been late in bringing down this bill. The reason we have been late is that we were hoping a compromise would be arrived at which would permit an early decision by the F.P.C. In that we were disappointed. We also hoped that temporary financing could be arranged which would make government assistance in the western section unnecessary. In that we were disappointed. After we decided that direct government action was necessary if we were to get a program under way this year it took some time to work out the details of the program as represented by the

bill before you and the agreement that has been tabled with the bill. So much for the position today.
The question has been asked: "Who was pressing for action?" Well, I think I can throw some light on that subject. We have received several letters. The letters I will read have all been tabled and are available to hon. members.
The first letter I will read is dated April 24, 1956, from Premier Manning of Alberta, addressed to the Prime Minister (Mr. St. Laurent):
My dear Prime Minister:
Passing through Ottawa today, I had hoped to have an opportunity to discuss with you the serious situation developing as a result of the prolonged delay in getting the trans-Canada pipe line project under way. This was not possible due to your engagement in Toronto, and as previous commitments prevent me staying over until tomorrow, I had a brief discussion with your colleague, the Right Hon. Mr. Howe, and am writing this letter to outline some of the thoughts I had hoped to discuss with you personally.
My colleagues and I have become increasingly concerned over the serious threat to the whole national gas development and gas utilization program occasioned by the repeated frustrations and delays that have attended the proposed trans-Canada pipe line project. For the following reasons, in our opinion the situation has reached the point where any further delay in commencing at least the western section of the line may well prove disastrous to the entire project.


Donald Methuen Fleming: What is the date of that
. letter?


Clarence Decatur Howe: April 24, 1956.
1.	If the project is delayed another year, all present permits, both federal and provincial, and all contracts entered into by the company will lapse by default. It will be extremely difficult to grant further indefinite extensions of the government permits, and almost impossible for the company to retain existing contracts with gas producers.
2.	Trans-Canada Pipe Lines and the Alberta Trunk Line Company have made arrangements for the large dimension pipe necessary for the project if it proceeds this year. If it is delayed another year this pipe, in all probability, will be allocated to some other project. If this happens it will be extremely difficult, if not impossible, for the company to make firm arrangements for the delivery of the necessary pipe in time to commence construction in 1957.
3.	Another year's delay in providing a market for Alberta gas will have a retarding effect on the development of both the oil and gas resources of the province. Millions of dollars of investment capital already are immobilized in gas wells which are capped because no export market is available. A program involving over $100 million of new development for gathering lines, processing plants and auxiliary industries which large scale export of gas will make possible is being held in abeyance, and each further delay is undermining confidence in the future prospects to a degree that is damaging to both the provincial and the national interests.
4.	Public acceptance of the present national gas policy which dictates that Canadian consumers be given first priority in the use of Canadian gas
Northern Ontario Pipe Line Corporation is being weakened by the prolonged delay in getting western gas to eastern consumers. A policy impossible of practical application in a reasonable period of time cannot indefinitely command public endorsation and support. Over two years have lapsed since the present trans-Canada project was formulated as a vehicle to implement national policy with respect to natural gas. To date western producers have not been able to sell one cubic foot of gas for delivery to eastern consumers. Living with this situation every day, we are very conscious of the extent to which the uncertainty created by repeated delays is undermining the confidence of investors and producers, and of the public generally.
For these reasons we believe it is of the utmost importance that at least the western section of the proposed line oe constructed this year. In fairness to the Trans-Canada Pipe Line Company, I believe it rightly can be said they have complied with every condition and requirement of the national gas policy laid down by your government. They have encountered temporary difficulty in financing their part of the project only because of the delay before the federal power commission at Washington, which is something entirely beyond their control.
Under these circumstances, we feel your government would be fully justified in taking whatever steps are necessary and in your judgment proper to ensure the immediate start of the Trans-Canada project within the framework of the national policy that precludes consideration of other markets until eastern Canada is served.
I respectfully submit these observations for your consideration, with the sincere hope that you will be able to make an early announcement that construction of the line will commence this spring.
Yours very sincerely,
Ernest C. Manning,
Premier of Alberta.


An hon. Member:: What does the opposition say about that?


Donald Methuen Fleming: When you give us a chance we will have plenty to say.


Clarence Decatur Howe: Then a letter from the Premier of Manitoba dated May 15, 1956: Dear Mr. Prime Minister:
I am writing you concerning the discussions taking place regarding the transmission of natural gas from Alberta to Manitoba and eastern Canada.
As I have indicated to you on previous occasions, the availability of natural gas in Manitoba at minimum economic rates can have an important influence on the economy of this province. There are now a number of important developments in Manitoba which are being held up pending tl>* arrival of natural gas.
At this time I would like to reaffirm Manitoba's interest in this matter and to stress once again that it is imperative that construction of the pipeline between Alberta and Winnipeg be completed this year. For this reason I trust that whatever solution is agreed upon will assure the arrival of natural gas in Manitoba in 1956.
Yours sincerely,
Douglas Campbell.
Then a letter from Mr. Porter, which I received this morning, dated at Queen's Park, Toronto, May 14, 1956. I may say that this was written in reply to a letter of mine asking whether the province wished to extend the
4028	HOUSE OF
Northern Ontario Pipe Line Corporation arrangement for building the northern Ontario section of the pipeline.


Donald Methuen Fleming: Is the minister going to read his letter to Mr. Porter?


Clarence Decatur Howe: I have it here. I can read it if you wish. It is a rather long letter.


Donald Methuen Fleming: Should it not be on the
record?


Clarence Decatur Howe: It is tabled.
Jear Mr. Howe:
I beg to acknowledge your letter of May 11, in which you outline the present status of the project for trans-Canada gas pipeline, and the financial arrangements recently concluded between your government and Trans-Canada Pipe Lines Limited in order that construction of the western section will commence this year.
As we have frequently stated, a trans-Canada pipeline is, of course, a federal responsibility. A provincial government is in no position, constitutionally, to assume any responsibility for decisions as to the construction or the financing of a national undertaking that crosses the boundaries of several provinces. We have, however, from the outset concurred in the policy of a line that would be built entirely within the boundaries of Canada, within Canadian jurisdiction. As a provincial government we are particularly interested in the potential benefits for northern Ontario that would undoubtedly follow the building of a gas pipeline through that portion of the province. Generally, in view of our rapid industrial expansion, coupled with the fact that our hydro-electric power resources are now approaching their maximum limits of development, the necessity of new sources of fuel for our industries and our domestic consumers is becoming increasingly urgent. We agree with you that further delays in the construction of this project would have very adverse consequences. Time has become of the essence. Every day's delay invites the most serious consequences to the development of Ontario, and to the national economy. In these circumstances, it would appear essential that the western section of the line be completed during the year 1956. To accomplish this, we understand that actual construction must be commenced not later than July 1. We understand from your letter that your financial arrangements with Trans-Canada Pipe Lines Limited are designed to accomplish this purpose.
You will recall that our agreement with your government, as set out in the correspondence of November, 1955, provided for the incorporation of a crown corporation to build the northern Ontario section of the trans-Canada line. The conditions upon which we agreed to lend money to such a corporation, to the limit of $35 million, were as follows:
1.	That our investment would be returned to us out of rentals based upon the through-put of gas, with interest at the going rate, so that eventually this investment would involve no cost to the taxpayers of Ontario.
2.	That we should not be called upon to advance money under commitment until you were able to assure us that all other portions of the entire trans-Canada line from Alberta to Quebec would be completed and operated.
3.	That by reason of the terms of the agreement between your government and Trans-Canada Pipe Lines Limited, our commitment would terminate


if the company were unable by May 1, 1956, to show financial ability to carry out their entire undertaking.
In any matter of such complexity and magnitude, we recognize that it may become necessary to consider changes in arrangements from time to time. At the last session of the legislature an act was passed, by the unanimous recorded vote of the house, giving authority to enter into such arrangements. The act allows for certain flexibility so as to meet changing situations as they may arise. Section 1 of the act is 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 pipeline 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 million, 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."
Upon condition that the construction of the western section begins not later than July 1, 1956. we are willing to concur in the extension of time that you request. Subject to this change, we shall continue our commitment to participate in the financing of the northern Ontario section.
Yours sincerely,
Dana Porter.


An hon. Member:: Frost on the Drew line.


An hon. Member:: He did not suggest closure, did he?


Clarence Decatur Howe: It has been suggested, although by far the greater part of the capital provided by the sponsors is being provided by Canadian companies, that because those Canadian companies are financed with capital from the United States in whole or in part there is no Canadian control of the pipeline project. I do not know whether or not the 83 * 4 per cent that was suggested as United States capital will be altered by the fact that the British-American Oil Company, a very old Canadian company, is in the process of acquiring all the Canadian interests in Gulf, but I suggest it would make a difference. The purchase has been made of Gulf property by the British-American Oil Company.


An hon. Member:: They are owned 60 per cent by another company.


Clarence Decatur Howe: Yes, just as Standard Oil owns 70 per cent of Imperial Oil. However, a good deal has been said in this debate about the Canadian Pacific Railway. Does anyone doubt that the Canadian Pacific Railway is under Canadian control? It is not controlled through stock ownership. I believe that Canadians own about 11 per cent of the stock of the Canadian Pacific Railway at this time, and I doubt that the Canadian holding has ever been higher than 15 per cent, and certainly never as high as 20 per cent. Canadian control in that instance does not depend

on stock ownership. It depends upon the fact that the railway is located in Canada, subject to Canadian law, subject to regulation by the Board of Transport Commissioners for Canada.


Mr. Ellis:: Page the city of Winnipeg.


Clarence Decatur Howe: Well, you live in Regina. We will let Winnipeg look after itself. The situation is exactly the same with the pipeline project. Who will control the pipe line? The pipe line will be controlled in Canada. Why? Because it is located in Canada, because it is subject to Canadian laws, because it is subject to regulation by the provincial authorities of Canada and over-all regulation by the board of transport commissioners. The reason I asked for the provision in the agreement giving Canadians the opportunity to buy shares in the company was not to assure control of the company in that way for Canada. I pointed out at the time that ownership of 51 per cent of the shares even though it existed, did not carry a guarantee it would always exist, and did not in itself mean actual control of the pipe line. Control of the pipe line we have because of the fact that the pipe line is wholly built in Canadian territory and is subject to Canadian laws and regulation by the provinces and the board of transport commissioners. Therefore let us not worry too much about Canadian control.
It is unfortunate that the pipe-line discussion has come up in the midst of this wave of anti-Americanism on the part of the official opposition.


George Alexander Drew: Oh, nonsense!


Donald Methuen Fleming: That is a complete distortion.


Clarence Decatur Howe: Anti-American sentiment has been expressed.


George Alexander Drew: The usual disregard for facts.


Clarence Decatur Howe: What was the United States ambassador complaining about?


Donald Methuen Fleming: Did you write the speech for him? You spent the previous week with him.


Mr. Bell:: How about the speech last night by the Secretary of State for External Affairs?


Mr. Pearson:: Why don't you read it?


Clarence Decatur Howe: This idea that businessmen who have made large investments in Canada to develop Canada's natural resources by arrangement with the provincial governments of Canada should be called Texas buccaneers and similar names is all very well if the official opposition thinks that is the right thing to do and wishes to continue that name calling in this parliament.
Northern Ontario Pipe Line Corporation


George Alexander Drew: Mr. Speaker, on a question of privilege, at no time has the official opposition used the expression "Texas buccaneers". It is customary for the Minister of Trade and Commerce (Mr. Howe) to make statements of this kind. On no single occasion has such a term been used.


Clarence Decatur Howe: We will check Hansard and And out.


Donald Methuen Fleming: Why did you not check it before you started?


Clarence Decatur Howe: It was the leader of the C.C.F. party. I will withdraw and say the leader of the C.C.F. party, but certainly I have heard a good many remarks from the official opposition not complimentary to American participation in the pipe line. The remarks have extended to myself. Snide remarks have been made in this debate referring to me as a second class citizen for the reason that I was born in the United States. I have lived in Canada for 48 years, I have been a citizen of Canada for 42 years, and I think my record in Canada will stand up with anyone else's.


Some hon. Members:: Hear, hear.


George Alexander Drew: Mr. Speaker-


An hon. Member:: Sit down before you fall down.


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


An hon. Member:: Again?


George Alexander Drew: -I would point out that where the minister attributes statements of that kind, which have certainly not been made by the official opposition-


Mr. Speaker:: Order.


George Alexander Drew: -he should identify those statements.


Mr. Speaker:: Order. May I point out to hon. members that a member who is speaking is entitled to make his speech without being interrupted. May I point out further-


An hon. Member:: If he is inaccurate?


Mr. Speaker:: Would hon. members please be good enough to let the Speaker make his point. I do not think that the house is gaining anything in decorum by interjecting remarks when the Speaker is trying to make a point relating to order. I must say that recently in reading the blues containing what I have said I have found that in almost every sentence I have uttered there is an interjection by someone. I say that the member who has the floor is entitled to make his speech without interruption. If he says something which is not accurate, which is different from what
4030	HOUSE OF
Northern Ontario Pipe Line Corporation is claimed to be the fact by another hon. member and another hon. member is misrepresented, that hon. member does not have the right to stand up immediately and interrupt the member who has the floor. He must first make sure that the member who has the floor will permit him to make a correction. If not, he has the right to make the correction at the end of the hon. member's speech. Let us have that well understood. As long as there is consent on the part of the member who has the floor the other hon. member may do so immediately. If not, he has the right to do so at the end of the speech. That is standing order 37, paragraph 1.


Clarence Decatur Howe: Mr. Speaker, I want to apologize to you. I withdrew my remark about "Texas buccaneers" too soon. I have a clipping here-"Texas buccaneers won't control gas line, Diefenbaker."


Some hon. Members:: Hear, hear.


Clarence Decatur Howe: I have stated the urgency of the situation as expressed by three provincial premiers. Incidentally, one was a Social Credit premier, the second was a Liberal premier and the third a Conservative premier. Therefore it is not a political issue in the provinces. They have expressed the urgent need as seen by the responsible governments of those provinces.
Obviously the opposition takes the view that there is no urgency, no need to get on with the project at all. So far there has been much more debate on points of order than there has been discussion of the merits of the project. On motions to adjourn alone I think that more time has been consumed than has been consumed by Liberal speakers since the debate began. I do not know what hon. members expect the government to do when faced with obstruction of the type we have had.


Some hon. Members:: Oh, oh.


Clarence Decatur Howe: What we have done is apply the rules of the house that were established to protect-


Donald Methuen Fleming: Something Mackenzie King refused ever to do and which he denounced.


Clarence Decatur Howe: -both majorities and minorities. Hon. members opposite are fond of quoting the mother of parliaments. What does the mother of parliaments do? Every debate in the British parliament is limited from the time that the debate is moved. If it cannot be done by agreement it is done by closure, and for debates where agreement could not be arranged it has been necessary to exercise closure an average of 21 times a year in the past five years.


Donald Methuen Fleming: Mr. King said it had never been done in the British parliament on a money bill. You know he said that in 1932.


Clarence Decatur Howe: Some say that it has not been the practice in Canada. Why? Because it is only in the last two years that the government has been faced with filibusters openly declared.


Donald Methuen Fleming: You did not like last year, did you?


Clarence Decatur Howe: When the hon. member for Prince Albert (Mr. Diefenbaker) gets out on the stump he is free with his remarks. I read a statement he made to the effect that this would be a filibuster in perpetuity.


Mr. Diefenbaker:: Mr. Speaker-[DOT]


Some hon. Members:: Sit down.


Mr. Speaker:: Order. The minister is not resuming his seat. Once the minister concludes his remarks the hon. member can put the matter-


John George Diefenbaker: I simply rise on a question of privilege.


Mr. Speaker:: All right, the hon. member rises on a question of privilege, but I want to point out to him-


John George Diefenbaker: I say that statement is not true.


Mr. Speaker:: Order. If the hon. member raises a question of privilege and it turns out that his question of privilege is a fraudulent one-


Donald Methuen Fleming: Mr. Speaker!


Mr. Speaker:: The expression is being used regularly in the United Kingdom House of Commons.* I have not the reference here with me but for the edification of the hon. member I will bring it to the house. Sir Winston Churchill himself used it. He rose and said: "Mr. Speaker, have these fraudulent points of order and fraudulent questions of privilege not become a scandal in this house?"
The point I simply want to make is this. The hon. member who has the floor is entitled to make his speech without interruption except, of course, these quick interjections which go on the record. But when a member stands up and wants to take the floor away from the one who has the floor, it is either on a point of order or on a proper question of privilege but never to make a correction or to debate an argument or a point advanced by the member who has the floor. He has a right to do that at the end of the member's speech.
(For references see page 4032.)


Clarence Decatur Howe: Then we had the threat made in this debate that the C.C.F. would use every legal method under the rules for obstructing debate.


Major James William Coldwell: Not obstructing.


Clarence Decatur Howe: They have done it to date. I will give them full marks.


Major James William Coldwell: Not for obstruction; to ensure proper discussion under the rules.


Clarence Decatur Howe: You can use your words; I will use mine.


Mr. Rowe:: No one would want to use the ones you use.


Clarence Decatur Howe: I do not know that I need to speak any further at this time. I may have an opportunity to do so in committee or at some later stage. However, I want to say that I am proud of the fact that I am on the constructive side of this argument.


Donald Methuen Fleming: It does not matter to you whether you destroy parliament in the process.


Clarence Decatur Howe: By inclination and by training I am a builder, and I am happy in the fact that I am a member of a government that is a building government. This government is always ready when it sees a great national need or a great national urgency to move in to do its share in meeting the situation-


Donald Methuen Fleming: And parliament be hanged in the process!


Clarence Decatur Howe: -as it has done on this occasion. We know of the urgency and the need for action. Perhaps hon. members opposite will tell us the need for delay through obstruction. Personally I should like to know what it is and who are the sponsors of this obstruction and delay with which we are being faced.


Donald Methuen Fleming: The people of Canada from whom you have no mandate to do what you are doing. Just give them a chance.


Clarence Decatur Howe: We will in due course. We have given them several chances in my time.


Donald Methuen Fleming: You have no mandate for this at all. If you think you can get one, go to the people.


John George Diefenbaker: Mr. Speaker, the other day I was not privileged to be present-


Clarence Decatur Howe: You were speaking, though.
17, 1956	4031
Northern Ontario Pipe Line Corporation


John George Diefenbaker: What was that wise observation?


Clarence Decatur Howe: I said that you were speaking.


John George Diefenbaker: I was removed for a few hours from the conflicts of political life, and I missed the performance in this house the other day.


John Whitney Pickersgill: Of the Leader of the Opposition (Mr. Drew).


John George Diefenbaker: If my friend the Minister of Citizenship and Immigration (Mr. Pickersgill) would just contain himself for a few moments, I should be obliged to him. After all, I am going to ask him after a while whether, in virtue of his peculiarly favourable position, he has been able to communicate with his former leader in an extraterrestrial sphere and to secure his opinion on the attitude of this government in the application of closure the other day.


Stanley Howard Knowles: It is on the pages of Hansard of 1932.


Mr. Speaker:: Order.


John George Diefenbaker: We want to get it right
up to the minute.


Mr. Garson:: Let us keep to attacks on the living.


Donald Methuen Fleming: Then you cannot talk about this government because it is dead.


Mr. Speaker:: Order.


John George Diefenbaker: I read the arguments that were advanced the other day on behalf of the application of closure. I never believed that it would be brought in under the circumstances under which it was brought in. The Prime Minister (Mr. St. Laurent) is one man in this house who I never believed would tarnish his record by the application of closure in the way in which it was effected, not for the purpose of interfering with unnecessary debate but rather designed to secure silence-


Walter Edward Harris: Nonsense.


John George Diefenbaker: -and to use parliament as an institution in which the government may produce what it will, is able to propound any proposition it likes and, because of its majority here to know that, regardless of whether or not there is any support for it, the majority will carry it through. Through you, Mr. Speaker, I ask the Prime Minister this question: Why is it that you have not risen in your place as leader of this house, whose responsibility it is to explain when the rights of parliament are being filched away in this manner? Why

Northern Ontario Pipe Line Corporation j did you not rise? I say to him: I nevej-believed that you were indeed the captive c|f the Minister of Trade and Commerce (Ms. Howe) who recently said in effect, "After all, rules never concern me very much". When I listened a moment ago to the lesson read by the Minister of Trade and Commerce-


An hon. Member:: It was not read.


John George Diefenbaker: -on Canadian investment and the lack of danger in Canada from an uncontrolled investment from another country-


An hon. Member:: What about the C.P.R.?


John George Diefenbaker: -I wondered whether or not he had read those words of Mr. Lapalme, the leader of the Liberal party in the province of Quebec, who today goes up and down the province of Quebec arguing that to too great an extent the resources of Quebec are being shipped out of that province. Here are his exact words:
I am not opposed to the investment of American capital ... In fact, I am in favour of foreign investment. But first we must be sure that the interests of the province are protected . . . The riches of the province are being carried away in boats flying the Stars and Stripes.
Mr. Speaker, as to these proponents of closure, what attitude do they take? They have one type of speech in parliament and then those three musketeers-the three ministers of this cabinet-go down to the province of Quebec and, chameleon-like, change their attitude as they campaign in a provincial election. I need not say who the three are. The Minister of Northern Affairs and National Resources (Mr. Lesage) leads them. The Minister of Transport (Mr. Marler) and the Minister of Veterans Affairs (Mr. Lapointe) follow. These are the ministers of the government-


An hon. Member:: You missed one.


John George Diefenbaker: -who speak with one voice here and another voice there.


Some hon. Members:: No.


John George Diefenbaker: I ask the Prime Minister this question: Will you explain that capacity for double talk? I commence with that.


Stuart Sinclair Garson: What has this to do with the pipe line?


William Earl Rowe: It seems to have something to do with you.


John Whitney Pickersgill: Talk to the hon. member for Three Rivers (Mr. Balcer).


John George Diefenbaker: 
William Earl Rowe: A month from the time it was introduced.


John George Diefenbaker: And after some 10 days of debate. Why did they adopt this measure in anticipation? The Minister of Trade and Commerce (Mr. Howe) said that I had made some statement. The statement I made was this. We in the opposition would see to it that this indeed would be no skirmish if the rights of parliament were in any way to be interfered with. They are afraid of the truth, afraid of an election.


Some hon. Members:: Oh, oh.


John George Diefenbaker: 
Some hon. Members:: Hear, hear.


John George Diefenbaker: What is the record of this company, Trans-Canada Pipe Lines Limited? For five long years we have been waiting for action. Throughout that entire period this company has played a monopoly game without chance. Its attitude has been one of artful juggling. It has changed its front from year to year. From year to year this cobweb of colourful finance has been spun.
They started with the idea that they could finance themselves. They said they needed no government help. They secured an incorporation on that basis, and having designedly made the allegation that under no circumstances would they ask for assistance, they began that tortuous course they have followed ever since. First they said, "We will ship directly to the Ontario and Quebec markets and provide the necessary pipe line." Their next attitude was, "We will change that; we need United States markets and we will build a spur line to the United States boundary and that spur line will supply the great needs of the middle west."
They were able to contact in the United States three companies named by the Minister of Trade and Commerce who were prepared to pay a real price, a price far in excess of what is to be paid today by the
4034	HOUSE OF
Northern Ontario Pipe Line Corporation Western Pipe Lines company. Today the Minister of Trade and Commerce says the reason this was not gone ahead with was that there were complaints from the consumers. Nothing of the kind. That statement is unjustified, for after a lapse of a few months and consideration being given by the federal power commission, suddenly the whole matter was dropped by Trans-Canada Pipe Lines.
Their next proposition was that they would have to get some assistance in order to bridge northern Ontario. No; I am ahead of myself. As a matter of fact it is difficult to follow this company in the labyrinth of financial manipulation, and one is apt to forget the changes of front that have been made. First they asked for a guarantee of assistance from the industrial development bank, and that was denied. Then they came along with a new proposition, a complete change of front. They said they would need assistance by way of the creation of a crown corporation to bridge that area of northern Ontario which would be unprofitable.
So the changes have gone on. Throughout that entire period, whatever change of front this favoured corporation has made, how often it has altered its course, it has still been able to command the benediction of the Minister of Trade and Commerce, and today he is joined with the amens of every member of the cabinet. Why? Why does this corporation enjoy such a peculiarly favoured position in the heart of this government? Why are competing corporations given no opportunity even to submit a proposition? Those are questions on which we require information; those are questions on which we have a right to obtain information.
Let us follow the course of the Minister of Trade and Commerce. In March, 1953, he said this was economically feasible to build. He was the man who was able to secure the merger of Trans-Canada and Western Pipe Lines. He said, "There is no danger at all; there is no reason for delay. In March of 1953 he said, at page 2929 of Hansard:
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.
A little later on in that speech he said:
This government has 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 then this master of optimism said this on December 1, 1954: "I believe that the construction of Trans-Canada will begin in 1955; that the building of the pipe line
rMr. Diefenbaker.l

from Alberta to Winnipeg and south to Emerson will be completed in that year and the complete line will be built to Montreal in 1956."
What was the justification for that optimistic attitude? Why the continuing enlargement of the period within which this favoured pet of the government is prepared to extend and extend again the time of completion? I ask, why this change of front? Why has the government-and I ask the Prime Minister to give an answer on behalf of this government-displayed such solicitude, such a keen feeling of regard for this corporation? Why has the permission to extend been granted over and over again? Why, after the delay of five long years, this unusual rush for action in 1956? Why? This is a question that has never been answered.
A while ago the Minister of Trade and Commerce described the men who are connected with this company, the founders, as it were; the Clint Murchisons of Texas. While Clint Murchison has not the controlling interest today, he is the owner of Canadian Delhi and, through that company, he will own over 25 per cent of all the stock of Trans-Canada Pipe Lines. According to the records today, of the 1,928,183 shares Mr. Murchison, as the head and owner of Canadian Delhi, will have 497,000 shares. It is true, as I said a moment ago, that he is no longer on the executive of Trans-Canada Pipe Lines.
Who is this man Murchison, this builder, this man who is so interested in Canada? His biographical sketch was written in 1954. It is a revealing one. It begins by saying: "According to affectionate legend, he has found and has been able to add $1 and $1 and get $11 million." That was two years ago, before he improved on that previous record. It says in his biographical sketch:
He possesses the popular Texas ambition of buying the rest of the United States.
That was two years ago. While the biography was being written, and since it has been written he raised his sights. It goes on to say, and this is a great description of this man, this beneficiary of Canada:
| His companies are as varied as a pirate's I treasure.
That is an appropriate description. The mention of pirates does not require too much amplification. It adds:
\ He juggles multi-million deals with the unconcern of a racetrack teller counting $2 bills.
| Then it quotes him as saying, following the success that he has had over the years:
Cash makes a man careless.
Well, that is one part of the biography that certainly is not lived up to unless the

Northern Ontario Pipe Line Corporation
cash comes from the Canadian government. The record year by year is one of deceptive "Cash makes a man careless." It goes on to finance, false promises and unjustified hopes, say that his life is given to spinning new The Toronto Daily Star of May 14, 1954, said:, companies. Then it states:	N. E. Tanner-
He expects no trouble in having Trans-Canada i	-he is now president 
Pipe Lines built by 1955.	>
He still has 25 per cent. Here is a revealing statement, sir. He is asking how he does his financing and this is his secret of finance: He has a system of "financin' by finaglin'."
Mr. Speaker, this is the man who more than anyone else conceived this plan for Canada's gas. This is the man, along with those who are now connected with him, to whom this country is asked through the medium of closure to turn over monopoly control of one of Canada's great and exhaustible resources. Yes, this is the man who was accepted at face value by this government through the years, and who even today is in a position where by virtue of the stock percentage he controls he would be able to go a long way to control the company.
Now, sir, I am going to read for a moment something of the record week by week and almost day by day of the announcement of this company since 1951. On February 22, 1951, the Toronto Star said:
J. R. Tolmie, counsel for T.C.P.L. outlined plans for a 2,200 mile pipe line from Alberta to Montreal. The company plans to spend $250 million on the project. Mr. Schultz said that the initial outlay would be subsidized by United States capital. It was planned to split the Canadian firm from the United States company as soon as possible, and Canadians would be given an opportunity to buy stock.
Then on January 2, 1952, again from the Toronto Daily Star:
A spokesman for Mr. Schultz denied a statement by Hon. W. S. Gemmell, Ontario provincial minister of mines-
And said-
. . . that his company were satisfied, that if they could only get permission to carry the gas out of Alberta it would not need any government capital investment.
A little later on, on April 3, 1954 the Toronto Daily Star said:
Trans-Canada Pipe Lines expects to build the proposed pipe line from Alberta to Ontario and Quebec, without direct government help, vice president Frank Schultz said today. His firm would not contemplate getting less consideration than the Interprovincial Oil Lines in regards to sales tax and other concessions. His firm expects a pretty rough time at the start, but it expects to walk on its own feet. He said that signed contracts with distributing firms were expected to provide enough guarantee to make bonds acceptable to insurance companies, and the company did not need a government guarantee for its bonds.
-said that construction of the pipe line will start early next year. Gas is to start moving no later than December 31, 1955. He expects it to be feeding Winnipeg by late 1955, Toronto and Montreal to be hooked up by 1956.
' Then on June 15,	1954, the following
appeared in the Toronto Daily Star:
Nathan Tanner, president of Trans-Canada Pipe Lines, said . . . construction is due to start July 1st this year. He said that some pipe had already arrived. He stated that now the transport board in Ottawa had assured his company that they would get the necessary authority for the Trans-Canada line, plans are under way to get construction started in the spring of next year. He said that the financial success of the whole Trans-Canada project would not be affected if his company was unable to get the necessary permit from the United States federal power commission in Washington to sell gas in Minneapolis and St. Paul.
Surely, sir, the ramifications inherent in statements like that are not a foundation upon which to build faith in a company with a record as uncertain as has been the record of this^ company.
Then on June 18, 1954, it is reported in the Toronto Globe and Mail:
J. Ross Tolmie, counsel for Trans-Canada Pipe Lines, said that it wanted to make a start next spring on the first leg of the line from the Alberta-Saskatchewan border to Winnipeg, and then south 60 miles to the American border. He asked for interlocking permit similar to that granted the company by the Alberta Natural Gas and Petroleum board.
On July 29, 1954, the Toronto Daily Star reported:
Mr. Tanner announced that newly formed company Bechtel, Mannix and Hester will be in charge of design, engineering and construction of the pipe line. Granting of the permit by the transport board was all the company had been waiting on to go ahead with the Alberta-Montreal line. The contract with Bechtel, Mannix and Hester calls for the completion of the project by the end of 1956. The company will be selling gas in Saskatchewan, as far east as Winnipeg, and to the Minnesota area by next fall-
That is the fall of 1954.
-and Toronto and Montreal a year later.
And so on, page after page of statements, promises and things hoped for, whose only purpose could have been to delude;, yet all through this picture this government, having been deceived over and over again, still continued to give its benediction and continued to deny alternative companies the opportunity to have their plans made known to parliament.

Northern Ontario Pipe Line Corporation
On August 10, 1954, the Toronto Daily Star reports Mr. Tanner as saying:
The construction of the pipe line will start next spring It will be completed to Winnipeg and Emerson for exporting to Minnesota by November 1955 and to Toronto and Montreal the following fall.
Then on September 23, 1954, the Toronto Daily Star reported:
Trans-Canada Pipe Lines has concluded an agreement for the sale of gas from pipe line to Northern Natural Gas Company, a distributor servicing the Minneapolis and St. Paul area of Minnesota, it was stated by N. Tanner. The company had agreed to sell and Northern to buy 100 million cubic feet of gas daily, starting fall of 1955. The following year, the agreement calls for stepping up delivery to Northern to a rate of 150 million cubic feet daily.
Then on October 22, 1954, the Toronto Star reported:
Mr. Tanner assured Transport Minister Howe-*
That is the way the description appears in the paper; there is a mistake in the portfolio.
-that plans for financing gas line $300 million will be completed by December 31 deadline drawn up by transport commissioners. He assured the minister that financing plans were proceeding satisfactorily. Surveys were being completed in the west to determine the completion of the line. The pipe line will get under way next spring as planned.
What manner of foolish deception is this? Has this company in the last few weeks sprouted the wings of determination that -will result in the early completion of this line when for five long years it has followed .a course of continuing to issue optimistic .statements which it must have known there was no hope of achieving?
The Toronto Daily Star of November 9, 1954 reports Mr. Tanner as saying:
. . . the proposed pipe line was a sound project, and construction would start in spring of 1955. Gas producers, pipe lines and municipal distributors were all going to have to take a little less in the first year of operation of the pipe line. Both Canadian and Alberta governments were encouraging the company to get on the job.
And so on since. Everywhere, day by day through 1955, statements were issued that everything was being done. On April 18, 1955, in the Toronto Daily Star:
Trans-Canada plans to build a 370-mile pipe line (24" diameter), from Toronto to Montreal this year, at a cost of approximately $29 million. This company had not abandoned plans to extend into Ottawa this fall, but this might depend on whether the market could be built up sufficiently beforehand.
On June 9, 1955 in the Toronto Daily Star:
A natural gas pipe line from Toronto to Montreal may be built this year, said A. P. Craig, vice president in charge of sales Trans-Canada Pipe Lines said today.

All those statements indicate the labyrinth of financial twisting and turning which has characterized this company. Now, in 1956, the government finally, says that something must be done, and it is going to advance up to 90 per cent of the necessary money to construct the first portion of the pipe line. The company is required to repay, as provided for in the agreement, within a period of some nine months.
This brings me to the point raised today by the hon. member for Winnipeg North Centre. There is something very strange about this bill. Whilst one cannot refer to clauses in particular, nonetheless a reading indicates that this bill is to be implemented by agreements already completed or which will be signed after the bill is passed by parliament.
What does that mean? Here is another example of a loophole whereby this company will be able, because the actual agreement is not incorporated as an appendix, to evade its responsibilities with the assistance and connivance of the government. A new agreement can be entered into, other terms can be substituted, alterations can be made, and regardless of any term in that bill as to the date of completion, the changes that can be made will enable this government to grant to its favourite an extension over and above the period fixed in the bill. That clause clearly indicates that future agreements can be made; and if they can be made, it means that parliament is asked to accept and ratify in anticipation any changed agreements that are made at any time between the government and this company.
There has been a change recently. Mr. Gardiner Symonds has come into the picture. I am not going into particulars with regard to this gentleman, except to say that he too has a biography that is set out in detail in Business Week. It indicates that this man has indeed been a tremendous success in bringing together various pipe-line companies in the United States, and also in establishing and building new ones. In 1954 his company marketed 6 per cent of all the natural gas marketed in the United States, and that amount has been increased in 1955.
It is interesting to know, as far as Mr. Symonds is concerned, the man who is to be the guardian of Canadian interests, that he has already made a deal in anticipation with Trans-Canada Pipe Lines, a company of which he will be one of the major shareholders, whereby Mr. Symonds' companies in the United States will benefit to the extent of $2 million a year for 25 years. Already he has made that arrangement. Already the price that is to be paid by Midwestern Pipe

Lines company in the United States is so much lower than that offered by Natural Gas and the other two companies associated with it that Mr. Symonds will reap a profit on the basis of the anticipated supplies of this pipe line of approximately $20,000 every day in the year.
That is the kind of thing that demands to be looked into. That is thejrind of thing .that demands invesfigafion, examination and consideration by parliament. That is the kind of thing that this government is trying to avoid and tried to avoid in the resolution stage, when it would be possible to ask ques tions, by the application of closure, thereby denying that investigation in which parliament has the responsibility to engage when so vast an undertaking as described by the Minister of Trade and Commerce is being foisted upon this house and the legislation forced through by that dangerous medium of the closure.
Northern Ontario Pipe Line Corporation McMahon plan was. He was in Ottawa early in April. Parliament is denied the existence of the letters, but oh, not Mr. Gardiner Symonds, described as the supersalesman of this generation. During the period of his visit he made a speech at a luncheon meeting of the Canadian Club of Montreal, and in the Montreal Star I find a report of what he had to say. First of all he dealt generally with the plan and how beneficial it would be to Canada. Then there is the following in Ifhe report:
Symonds also noted that the Canadian em would be able to take advantage of the age facilities for gas available to Tennessee in the United States-
It is the Tennessee Corporation in the United States, of which he is the head.
-and which were superior to storage available in Ontario. Commenting on reports that a rival gtoup was putting in a bid to build the trans-Canada pipe line, Mr. Symonds said, "I don't think it is serious."
Yes, it is interesting to know this. We in parliament tried for days and days to find out any alternative plan. We tried to find out the McMahon plan, which was referred to in the press. We endeavoured to secure information in that regard, but strangely enough we could not do so. I am not going to read the record, but it is a record of recklessly false statements made by the government in denying the existence of these letters. Parliament was treated as a pawn to be ridiculed by the government. We asked for production. "There are no documents," was the answer. If the Minister of Trade and Commerce had desired to rely upon the confidentiality of those letters, he would have said, "They are personal and confidential." But nothing of the sort. He said, "There are none."
Then you ask us why we on this side of the house view with some concern and suspicion the amazing solicitude of this government for this chosen instrument which for five years has fooled this government and the Canadian people. Parliament could not see the documents. These documents were personal and confidential. Apparently the delusion that was perpetrated on this house by that denial of the existence of those documents was removed only when it transpired that there were two other copies, the existence of which caused such terrible annoyance to the Minister of Trade and Commerce. Then, in his annoyance that there were other copies, he revealed the existence of these copies after a communication by telephone, at the suggestion of the opposition that Mr. McMahon might consider the removal of the veto of confidentiality.
But what about Mr. Symonds? He knew what was in those letters. He knew what the
Well, it was serious enough for Mr. McMahon to visit Ottawa on two occasions. It was serious enough for him to set out his plan in detail. It was serious enough for him to point out in the correspondence with the Minister of Trade and Commerce that the Trans-Canada Pipe Lines plan would be ineffectual and inoperative and that it could not be implemented.
Strangely enough the Prime Minister never heard of the McMahon plan. I believe him, as all of us will believe him; but is that not a terrible commentary on the fact that this government has one minister who carries around in his pocket an alternative plan for this magnificent development, as it was described today, this development that according to the minister even exceeds the St. Lawrence waterway? With McMahon having submitted a plan, having pointed out the shortcomings, the impossibility of Trans-Canada Pipe Lines ever doing what it had promised, surely further proof was not necessary after five long years of changing course, of crab-like advance. Then Mr. Symonds went on to say:
The announced competition came from Frank McMahon, an Alberta multimillionaire oil and gas promoter. Mr. Symonds said he had looked over the facts and figures presented by the McMahon group and could not see how they could be taken seriously.
Who showed them to him? Was he shown them when he visited Ottawa?


Clarence Decatur Howe: No, sir.


John George Diefenbaker: Was he given a peek? That is the kind of thing we want to know. That is what closure was designed to preclude and prevent. Yes; hide the documents; deny their existence, then plaintively appear in the

Northern Ontario Pipe Line Corporation House of Commons when you find they have become publicized, because there were two other copies, and in indignation describe how unfair it was that they became public property. We want to know how Mr. Gardiner Symonds found out about this. You can be sure McMahon did not show it to him, because he was a competitor. Who did? He knew when he spoke in Montreal on the 10th day of April what the McMahon plan was. He knew, the man who is going to make these millions I mentioned a while ago, the man whose plan will not assure to the producers of Alberta the same high return that would have been assured had Northern Natural Gas and the other companies been given an opportunity to carry out the plan they offered and the arrangements they produced.
Mention was made by the minister of the Northern Natural Gas Company of Omaha and these other companies. I asked for the production of documents, and certain documents were produced. It is very strange to read these documents. These companies are the major companies in the middle west. They are not in the position of raiders of a territory already allocated to them in Minnesota and adjacent states. They are there. The great fight today before the federal power commission is with the Gardiner Symonds' company, Midwestern, which is the raider interfering with and overrunning the area which these three companies and others are serving. They already had the marketing potentialities. They were there. They offered to take tremendous amounts of gas.
A reading of the documents indicates that some unusual things took place which suddenly altered the course. The minister says today that he was approached by them and that he said, "Of course I have nothing to do with this", and asked them to get in touch with the representatives of Trans-Canada. This is very interesting. Read the letters. On July 21, 1955, there is a letter from Northern Natural Gas Company, John F. Merriam, president, to Right Hon. C. D. Howe, which letter reads:
Attached is a conformed copy of a letter proposal which has been today mailed to Trans-Canada Pipe Lines Limited by Northern Natural Gas Company, People's Gas, Light and Coke Company and American Natural Gas Company. It is the hope of the three companies that the proposal will be helpful in providing a solution to the natural gas export- problem. We will be glad to discuss this with you further, or with anyone you would designate, if it would be of assistance.
Yours very truly,
John Merriam.
To that letter the minister replied as follows:
Dear Mr. Merriam:
Thanks for yours of July 21 sending me a copy of your letter to Trans-Canada Pipe Lines Limited. 
I had a talk with Mr. Tanner and some of his associates this morning and understand that he will have a discussion with you shortly. I am hopeful that a program can be worked with you and your group that will make it unnecessary to deal with others proposing to serve your territory. I will let you know if there would be any purpose in your group coming to Ottawa for further discussions.
Yours sincerely,
C. D. Howe.
That is quite a different matter from the coloured description given by the minister today. A plan was set. out in detail whereby the three undersigned companies would organize and own a new company which would propose to receive natural gas from Trans-Canada at the United States-Canadian border south of Winnipeg in the fall of 1956 in such authorized quantities as were available. The three companies would propose to absorb in their three billion cubic feet per day pipe-line systems such volumes of natural gas delivered to them as were not required for delivery in eastern Canada, in the Windsor-Sarnia area. They proposed to spend $30 million to build a 400-mile connecting pipe line from the Winnipeg border to the one billion cubic feet per day pipe-line system of Northern Natural Gas in the Minneapolis area.


Clarence Decatur Howe: Does it say what price they were going to pay?


John George Diefenbaker: The price was set out
earlier in detail. I do not have it here but I think it was 29 cents per thousand cubic feet.


Clarence Decatur Howe: That was formally withdrawn.


John George Diefenbaker: That is the figure I have in my mind, and I am not usually mistaken about numbers.


Some hon. Members:: Oh, oh.


John George Diefenbaker: That is a great deal higher than is being offered today by the Midwestern company that has no sales area under its jurisdiction. That is a raiding corporation. If the federal power commission of the United States follows its judgments given in the past, it will deny to any other company the right to come in there because the system in effect in the United States, as recognized by the supreme court of the United States, is that it is in the best interests in public utilities, so long as the public interest is protected by powers such as the transport commission, that no area should find itself competed for when those occupying and serving that area are rendering reasonable service and are not mulcting the consumers.


Mr. Nickle:: Would the hon. member permit a question?


Some hon. Members:: Oh, oh.


Mr. Deputy Speaker:: Order.


John George Diefenbaker: Mr. Speaker, my hon. friend has already received the commendation of the Minister of Trade and Commerce and I do not want to interfere with that favourable relationship. I would suggest that any information he has to convey personally or by questions be conveyed to the minister and not to me.


An hon. Member:: The gag.


Mr. Deputy Speaker:: Order. The hon.
member who has the floor cannot, of course, be interrupted without his consent.


John George Diefenbaker: This letter concludes in this way:
We wish to repeat that our three, companies are the only ones who can either build a major pipe line all the way from the Winnipeg border to eastern Canada for maximum volumes, or build piecemeal in smaller steps to handle minimum volumes.
No one else can do this.
We are prepared to extend to you and the Canadian authorities the full co-operation of our companies in working out the program of handling the gas supply question in the best possible manner for the public interest of our two countries.
What I have quoted to you is from letters tabled in this house which indicate that at least an offer was made that caused the minister to say, "I hope you people can come to an arrangement". Then in order to show on what affable terms things were conducted I read you first the telegram from Mr. Tanner to John Merriam, president of Northern Natural Gas Company and dated August 8, 1955:
Am unable to advise more definitely at this time. Use your best judgment regarding proposed study.
Eldon.
That telegram is signed "Eldon", a fact which indicates a fairly friendly relationship at that time. Then the Minister of Trade and Commerce said, "I hope you people get together". In his letter he said he hoped they would get together and that "a program can be worked out that will make it unnecessary to deal with others proposing to serve your territory". Then on August 15 we have the following wire:


Mr. John Merriam:: Further to my wire to you August 8, Trans-Canada has executed a contract which meets its requirements.
N. E. Tanner.
That telegram is signed "N. E. Tanner". What happened between those dates? What
17, 1956	4039
Northern Ontario Pipe Line Corporation things transpired? What changed the "Eldon" relationship to a business relationship? Why the alteration in course? The minister tried to give an explanation today to the effect that they could not get together or something of the sort. Actually, it is interesting that it was at this point that this master salesman Symonds entered the picture.
Those are things we want to find out about. Those are questions that must be asked. If we ask them of the government and if we get the kind of answers that we received in reference to the McMahon letters, the replies will not be as valuable as the facts might warrant. Yes; what about Mr. McMahon? He made an offer. He set it out in detail. He showed what he would do. That statement is contained in his letter of April 24, 1956, to the Minister of Trade and Commerce, detailing every possible eventuality, giving the particulars that only a definite offer would possibly include. It was naturally marked "private and confidential". It is to be communicated to the government. The letter is addressed to the Minister of Trade and Commerce.


Clarence Decatur Howe: It is addressed "Dear C.D.".


William Earl Rowe: What a darling he is!


John George Diefenbaker: Yes; "Dear C.D." That is where the mistake was made. The letter is addressed to the Minister of Trade and Commerce-"Dear C.D."-setting the matter out in detail. He did not want the plan he was offering made public to every possible competitor in this country. He was offering this to the government, the only instrument of government that he could communicate with. Yet the Prime Minister does not hear anything about it. There are pages of plans-


William Earl Rowe: All confidential.


John George Diefenbaker: -submissions, and detailed criticism of Trans-Canada; but none of that letter ever came to the attention of the man who is Prime Minister who, after all, in his being represents the government of Canada. Private and confidential? Can you not see the minister going down side streets with the document hidden in his pocket marked "private and confidential", supersecret? With a document like that, I wonder he did not have a bodyguard protecting the revelation. My, what solicitude! We were told by the minister, "I never got a letter; there is no document." He knew "What I am carrying in my pocket, as I deny in the house, is just about twelve pages of plans and schemes and offers and quotations." Yet he says, "I have no document".

Northern Ontario Pipe Line Corporation
Mr. Speaker, we want to break through that wall of secrecy that the Minister of Trade and Commerce has built not only around himself and parliament but around his colleagues in the cabinet. I shall just read a few lines in the letter-there is a long letter of April 4-which starts off in this way:
I appreciated the opportunity of seeing you on March 27 in Ottawa to discuss an alternate proposal to supply Alberta natural gas to eastern Canada. Confirming my representations to you at that time, I am prepared to undertake a Canadian-owned, privately financed project to construct an economically feasible gas pipe line from Alberta to Montreal if Trans-Canada is not immediately able to present a suitable proposal and some plan to break the present deadlock which is preventing the construction of the eastern Canadian pipe line.
What more do you want? "This is my proposal", he says. How else do you submit a proposal before it is actually translated into the formality of a legal document? Then he goes on to say this:
The closest and most logical market for surplus Canadian gas is in the existing pipe-line companies and distributors in the great plains-mid-west area of the United States. The three companies which presently serve this area, the American Natural Gas Company, People's Gas Light and Coke Company, and Northern Natural Gas Company, are prepared to purchase from a truly Canadian pipe line 400,000 mcf per day of gas at Emerson, Manitoba, under a 25-year contract to supplement their own supplies of gas. With this sale an allCanadian pipe line project is economically feasible on a sound business basis without government financing or debt guarantee.
Had not McMahon proven that before? Had he not proven his capacity? He had already done that in another company.
Then it goes on to say:
With this sale an all-Canadian pipe-line project is economically feasible on a sound business basis without government financing or debt guarantee. These companies want no stock-interest in the Canadian pipe line company and in fact they desire that international dealings be on an arms-length basis.
Then he says:
It is further evident that Trans-Canada is controlled by United States financial interests and that it is influenced and dominated by Tennessee Gas Transmission Company. The plan proposed by Trans-Canada strongly favours Tennessee Gas Transmission Company to the detriment of Canada.
Was it because these letters contained that damning indictment that they were hidden? Is that the reason? After all, McMahon had established his right to know. He says:
I am firmly of the opinion that the Trans-Canada proposal to receive governmental subsidy through the crown corporation "bridge" and to sell gas for underground storage in the United States rather than to use southern Ontario underground storage to the fullest extent is not in the best interests of Canada.

Mr. Speaker, when you are asking as to what is in the best interests of Canada, don't you believe that a Canadian could possibly give you as good advice as those from the Tennessee corporation in the United States?
With this in mind, I am enclosing a second memorandum which outlines the basic fault of the Trans-Canada plan.
The Prime Minister was never allowed even a peek at it, yet the cabinet had to decide which was the best. Apparently they had no benefit of any criticism of the plan that was submitted to the cabinet, although the responsible minister had the document in his pocket. It does look strange. It does ask for the opening of the gate just a little bit. It does demand that the searchlight of investigation be permitted to light up these darkened places. Never before has a pocket been such a dark place.
He goes on to say:
The three customer companies in the United States are strong organizations and are prepared to employ all of their resources to effect my alternate proposal. I am assured that necessary authorizations can be obtained in the United States in sufficient time to make possible an adequate supply of natural gas in Saskatchewan, Manitoba eastern Ontario and Quebec by the fall of 1957 and the completion of the entire pipe-line project by the fall of 1958.
Then he sets out a memorandum for the Alberta to Montreal pipe line. He says:
I will finance and construct an economically feasible pipe line from Alberta to Montreal and complete the same by 1958 without federal or provincial ownership or debt guarantee.
The other day the Prime Minister ridiculed the fact that he had offered to put up $500,000 as a bond to carry out that promise. Mr. Speaker, that was $500,000 more than this favoured Trans-Canada company has ever offered to put up or has put up.
As soon as Alberta and Canadian federal authorizations are obtained, and while authorizations in the United States are being obtained, I will place sufficient equity money and arrange for interim loans to permit the construction of the 34-inch pipe line from the closest gas fields in Alberta to Winnipeg to supply gas to Saskatchewan and Manitoba by late 1956 or early 1957.
What about the minister's bogey today that unless we accepted this plan we would not get gas into Winnipeg? On the one hand there is a company that has carried out its promises, McMahon, and on the other hand there is this Trans-Canada Pipe Line company that over the years has carried out no promise except to promise to do something at an unknown date in the future, whenever it gets assistance from the government.

Then, the Minister of Trade and Commerce says, what does it matter after all where the money comes from? What did Mr. McMahon say?
We have oil and gas production and properties valued far in excess of $100 million considering only contracted production income, and we are in a position to put up $40 million to $45 million into equity and arrange interim loans to provide the some $80 million required for the construction of the pipe line to Winnipeg as the first phase of the complete project to Montreal.
What is wrong with that? I ask the Prime Minister, why do you evade McMahon and his plan as if he were the plague? Is there something wrong? Was there something untouchable about him? He says:
The project will be Canadian controlled with not less than 70 per cent of the equity owned by Canadian companies and individuals.
That was an alternative not placed before the Prime Minister. I continue to quote:
The capital cost of the project will be financed without government ownership or debt guarantee.
I ask the Prime Minister, when he speaks, to say whether he would have done what he has done if that same document had been brought to his attention and McMahon had shown his financial responsibility. Why come to parliament and ask us again to bail out this company? This reminds me so much of the ne'er do well nephew who over and over again is bailed out by the doting uncle. He says:
The pipe line will sell, under long-term firm contracts at Emerson, Manitoba to American Natural Gas Company, People's Gas, Light and Coke Company and Northern Natural Gas Company, a volume of 400,000 cubic feet per day.


Some hon. Members:: 400 million.


John George Diefenbaker: These large figures are a bit disturbing, but what is a million anyhow?
These companies are in a position to pay the best price for surplus Canadian gas to supplement their supplies.
The pipe lines of these United States customer companies are already or are easily interconnected, so that only minor additional facilities are required, making it possible for them to pay a higher price at the border than any other company.
Would the Prime Minister not have given consideration to the McMahon plan if he had known that this company, already established and not dependent upon the illusory possibility of confirmation of plans by the federal power commission, was prepared to pay more than any of .these other companies? Surely, Mr. Speaker, this document that remained ensconced in the bosom of the Minister of Trade and Commerce, if it had ever been revealed to the light of day would at least have been an argument to be considered by the cabinet. But no; the Prime Minister honestly told parliament, "I never saw it".
Northern Ontario Pipe Line Corporation
Now we come to the last part of this momentous document, the memorandum re basic faults of the Trans-Canada plan:
An all-Canadian pipe line can be built from Alberta to eastern Canada on a sound business basis without government financing or debt guarantee provided that the pipe-line company is constituted to further the interests of Canada and sell surplus gas in sufficient volume at an economic price to the existing pipe lines which now serve the great plains-midwest area of the United States.
The right hon. gentleman says that we are anti-American. We are not; we are proCanadian. That is the difference. We think it is pro-Canadian to get the largest possible price from an available market rather than turn over this natural resource to the vagaries of decisions by a foreign board. Sir, Trans-Canada as constituted at the present time is controlled by United States financial interests-this is what this memorandum says-and is dominated by Tennessee Gas Transmission Company, so the principal interest behind Canada's pipe line is dealing with itself as the principal purchaser in the United States. I continue:
Trans-Canada, so influenced and dominated, proposes an uneconomic plan to favour Tennessee Gas to the detriment of Canada and at the same time requests the governments of Canada and Ontario to subsidize the $122 million pipe line "bridge" across northern Ontario in order to make it possible to put the proposal into effect.
Has there ever been an indictment of the plans of any company to equal that, Mr. Speaker? It is detrimental to Canada and detrimental to the producers in Alberta, since the price they will receive will be less because these companies that are to be preferred in the United States, the dominated puppets of Gardiner Symonds, are dealing with themselves. Now we begin to understand why it was, as I mentioned earlier, that he stood to make $20,000 a day for his parent company.
Here is his position. He has a dominating influence in Trans-Canada, the vender that is supposed to get the best price, and dominating interests in three western pipe-line companies that are trying to get gas at the lowest possible price. In the clash of interests like that I ask the Prime Minister who would win?


Mr. Hodgson:: Heads I win, tails you lose.


John George Diefenbaker: It says this:
The Trans-Canada plan contemplates the sale of gas to Tennessee Gas Transmission Company and a subsidiary at Emerson, Manitoba, and Niagara Falls, Ontario. Gas sold at Emerson would be used by the Tennessee Company in the great plains-midwest area of the United States to invade the duly franchised market areas of the present pipeline companies and the utilities which they serve.
The existing pipe-line companies and utilities in the great plains-midwest area of the United States are the logical markets for Canadian gas and are best able to pay a fair price and purchase
4042	HOUSE OF
Northern Ontario Pipe Line Corporation large volumes for their present markets. Instead of selling gas in this market to the existing companies, Trans-Canada proposes to sell its gas to a company which cannot pay a fair price because it does not control the market and must construct millions of dollars of duplicating facilities to market Canadian gas and an unnecessary pipe line link to its system in Tennessee merely to comply with the policy of the United States requiring the use of Canadian gas only as a supplemental supply.
Surely that is reasonable. In 1951 the United States supreme court decided that no pipe-line company should be granted the right to invade an area already occupied. Weeks, months have gone by as the 120 interveners have appeared before the federal power commission in Washington to oppose the application of Midwestern Pipe Line Transmission Company. Suppose the federal power commission decided in their favour- and there is no record of a similar decision having been made to permit invasion and raiding. There is an appeal to the United States supreme court which in 1951, in the Pan Handle case, decided that there could be no invasion.
This memorandum goes on to say:
The Trans-Canada project requires that the federal power commission of the United States authorize the sale of Canadian gas at Emerson and Niagara and approve the construction of facilities in the United States required to transport the gas to market. It is highly questionable whether this necessary authorization for the sale at Emerson can ever be obtained because the Tennessee Company is seeking to raid the market that is now being served by Northern Natural Gas Company, American Natural Gas Company and the People's Gas, Light and Coke Company. These three companies, with combined assets of over $1-5 billion provide over 3 billion cubic feet per day of gas service to 15 million people in the great plains-midwest area.
Finally, and I think there is so much truth in this-it is page 3 of the secret report-
The best market for Canadian gas in the United States as well as the most logical one is the existing pipe-line companies and distributing utilities in the great plains-midwest area.
A Canadian-controlled company interested primarily in the marketing of gas in Canada can readily negotiate a satisfactory arm's-length arrangement with these companies which will make possible the construction and operation of an allCanadian pipe line from Alberta to eastern Canada on a sound business basis without government financing or debt guarantee.
I ask you, sir, at the expense of reiteration, why was that hidden from the government?
Now, sir, I wish to move to a conclusion, and to say this. Here is the situation. In the shadows is Murchison, a man whose sights at one time were levelled high enough that he believed the day would come when he would dominate all of the United States for Texas. Now he raises his sights just a little. He has a 25 per cent interest; and this group
[Mr. Diefenbaker.j

of financial wizards whose financial manipulations in the last few years should have denied them any credibility-I refer to those who introduced this at the beginning, the Murchisons and those allied with them- come along and say, "Now, we are in a position where we cannot finance." These mendicants come to parliament and say, "You give us the money and we will build as far as Winnipeg."
Mr. Speaker, who would not build as far as Winnipeg with the government supplying everything? We have not had this answered, though. In view of that particular portion of the bill before this house which allows for further agreements, what are we going to do if they default?


Donald Methuen Fleming: There will be more extensions.


John George Diefenbaker: Will there be more
extensions? Will this benevolent organization once more be a beneficiary of government solicitude? Surely there is reality in this.
In the United States, Midwestern has little chance of getting within months, even within the next couple of years, the permission of the federal power commission. What are you going to have? You will have the construction that McMahon would have done without this government's guarantee. You would have had the completion of that portion of the pipe line by the end of 1956. You would have had the premier of Manitoba getting what he asked for and what the legislature of Manitoba has asked for, and not all this pussyfooting by this government and none of this dawdling on the part of Trans-Canada.
The minister says, "Oh, I have a provision that 51 per cent will be controlled by Canada." He had better read some of the evidence that some of the boys are giving down in Washington today. Charles S. Coates, a United States citizen, executive vice president and general manager of Trans-Canada Pipe Lines Limited, gave evidence there on February 29, 1956. We have this agreement of February 8, 1956, this massive agreement between Trans-Canada Pipe Lines, Tennessee Gas, Canadian Gulf, Hudson Bay Oil and so on, and it says this:
It contains this paragraph:
Trans-Canada declares and agrees that its arrangements for the financing of the costs of construction of the west-east natural gas transmission line proposed to be built by Trans-Canada will include a public offering in Canada of common shares of Trans-Canada's presently unissued capital stock in an amount not less than 51 per cent of the total number of common shares of Trans-Canada to be outstanding after such offering has been

made including the shares covered by such offering, and that it is Trans-Canada's intention to effect a wide distribution of such shares throughout Canada.
Well now, how do they do that? The Prime Minister having been a great corporation lawyer, I would like his explanation as to how they are going to succeed in that and what control they will have over these shares if they are purchased by dupes or by decoys. Let us hear how Mr. Coates debunked the whole thing. He was asked:
Is there any agreement or understanding other than an actual allotment under which Tennessee would have the right to purchase additional shares' of common stock of Trans-Canada?
Hon. members know that today Tennessee with its subordinates controls over 50 per cent. Mr. Coates replied:
Yes, Tennessee and all stockholders. As our money needs arise, the stockholders are obligated to furnish the money that we need to operate with, and to do what work it is necessary for us to do prior to public financing, and they will pay in their money at $8 a share and take shares of stock on a pro-rata basis for what they now own.
Does that not let the cat out of the bag?


Clarence Decatur Howe: What was the last?


John George Diefenbaker: That is the evidence of Mr. Coates.


Clarence Decatur Howe: Read it again.


Donald Methuen Fleming: Pay attention.


John George Diefenbaker: That evidence was given on February 29, 1955. The minister asked me to read it again. Well, if the minister had been listening instead of reading a paper or pretending to read a paper he would have heard it. Now he can look at Hansard.


Clarence Decatur Howe: I would rather read the paper.


William Earl Rowe: He says he would rather read the paper.


John George Diefenbaker: That rather reveals the minister's contemptuous attitude. I have heard him read lectures to members on the other side of the house. Yes, that is such a revealing answer as to the extent to which the minister, in his omnipotence and his belief in his infallibility, looks upon the House of Commons as a place to debate; but as far as he is concerned the plan is a secret in his pocket. The secret is in his soul. Never in all history was such a monumentally important document concealed for so long from a cabinet which should have had it, and from a parliament which deserves to have it.
I say, sir, there are many questions that have to be answered. There is much information that deserves to be secured. The minister mentioned in a glib way that after all, what
Northern Ontario Pipe Line Corporation did it matter who owned the shares. What does it matter? Well, I simply ask him this, if it is not in the nature of a declaration of independence-the expression he used the other day-what would happen in the United States Senate and House of Representatives if the position were reversed and a situation such as was envisaged in an editorial in the Toronto Telegram were to be placed before that body? This was a very short editorial which appeared on May 12, 1956, and it is sound, analytical sense couched in lissom language:
Should the pipe line situation be reversed, a Canadian company might make the following firm, definite, and unconditional offer to President Eisenhower:
The Canadian all-American pipe line company will build a pipe line from Old Faithful in Yellowstone national park to pipe hot water to every bathroom and kitchen in the United States of America, providing it gets Canada's okay to pipe the surplus over there.
All-American is confident it can finance the whole project, providing the United States government puts up the money.
The All-American Pipe Line Company is allAmerican, providing 83 per cent control by Canadians.
All-American is dedicated to the development of a great all-American resource in the national interest, providing it can be sold cheaper to Canadian users than to Americans.
All-American will be happy to retain ownership and to operate the pipe line, providing it is profitable.
All-American will unconditionally hand the pipe line over to the United States government, lock, stock and barrel, on demand, providing it loses money.
All-American is confident that the American taxpayer will be glad to accept these terms, providing he is crazy.


William Earl Rowe: The hon. member for Halifax (Mr. Dickey) should get in on that one.


John George Diefenbaker: Mr. Speaker, I think that editorial pretty well analyses the whole situation. I have placed but a few general matters before the house, and other hon. members will fill in the details. How are we going to get this information? Will we get it in committee of the whole? Well, if the information we might get there is as reliable as the information we got regarding the letters that were in the minister's pocket, the information we receive will not be too helpful.


Donald Methuen Fleming: It will be worthless.


John George Diefenbaker: Will we get only that
which the government in a spirit of benevolence will vouchsafe to the opposition? After all, the steamroller has to roll. Why? Well, Mr. Speaker, I ask the Prime Minister that question. What is there to hide? What is there to conceal? What other documents are there in whose pockets? What happened in July of 1955, when there was that great somersault in connection with the plans of
4044	HOUSE OF
Northern Ontario Pipe Line Corporation Northern Natural and the other companies and the offer to buy Canadian gas at about 5 cents a thousand cubic feet more than the price that is to be offered by the Gardiner Symonds company?
What happened then? Why did McMahon withdraw his offer? We might ask the minister in committee what happened during the course of that telephone conversation, but he keeps no records.


Donald Methuen Fleming: His memory is not too good.


John George Diefenbaker: I think McMahon would recall the circumstances as to what happened that day if he were given a chance to speak.


An hon. Member:: Six o'clock.


John George Diefenbaker: If closure were removed from McMahon's lips by letting him come before a committee of parliament we would have the answer. Let us ask him a few questions. Let us ask Gardiner Symonds what enabled him to say in Montreal on April 10 that McMahon's plan was no good, that there was nothing to it.


Clarence Decatur Howe: You had it at
that time.


John George Diefenbaker: That statement, Mr. Speaker, is as false as the statement the minister made when he denied the existence of those letters.


Clarence Decatur Howe: Mr. Speaker-


John George Diefenbaker: I am going to sit down.


Mr. Speaker:: It is now past six o'clock. May I revert to an expression I used earlier and which caused some surprise, at least to the hon. member for Eglinton (Mr. Fleming).


John George Diefenbaker: Mr. Speaker, I call it six o'clock.


Mr. Speaker:: I will accept the motion later on. I want to make a point because I think it is important. The Minister of Trade and Commerce was speaking, and at one point the hon. member for Prince Albert rose in order to correct the statement that was being made by the Minister of Trade and Commerce. I said, "If the hon. member raises a question of privilege, and it turns out that his question of privilege is a fraudulent one-". At that moment, the hon. member for Eglinton exclaimed, "Mr. Speaker," indicating his surprise, and I went forward and said that the term had been used in the United Kingdom.


Edmund Davie Fulton: Will you let us use some of the other terms that have been used there?


Mr. Speaker:: Perhaps the hon. member was not here when I said earlier that when I am trying to make a point, hon. members should hear me in silence, as I try to do
fMr. Diefenbaker.]

when they make their points. I should like to refer to United Kingdom parliamentary debates, volume 503, July 1, 1952, columns 275, 276 and 277, where Sir Winston Churchill said:
I am bound to say, if I may make a diversion, that I do not think there is any practice of the house which is more a subject of abuse than this raising of points of order of an unreal or even fraudulent character.
Later in the discussion the deputy speaker said:
I am in absolute agreement with the first comment. The points of order raised at the moment can certainly be described as fraudulent in my opinion.
Later he explained what he meant by that. The deputy speaker said:
The word "fraudulent" was not used in that context at all.
Meaning that there was no reflection on the Chair. He explained further:
The word "fraudulent", as I understand it. was used against points of order which hon. members raise, when the minister or the hon. member who is speaking refuses to give way, and think that the only way they can get their word in is by raising a point of order. It happens time and again and, in my opinion they are fraudulent points of order. I hope they will be stopped.
On June 18, 1952, Sir Winston Churchill rose and said (volume 502, column 1198):
Is not this abuse of the phrase "On a point of order" becoming a scandal in this house?
It may be that a point of order or question of privilege used in that way should not be called fraudulent, but I may say that I took the example in the United Kingdom Hansard.
Would the hon. member for Prince Albert send me his motion? I think hon. members will bear with me so that I may propose it from the chair. Does the hon. member for Prince Albert wish to send it to the Chair now?


John George Diefenbaker: Shall I read it now, sir? I call it six o'clock.
At six o'clock the house took recess.


[Stage Direction]
AFTER RECESS

The house resumed at eight o'clock.
John George Diefenbaker: Mr. Speaker, I was about to conclude when the recess took place at six o'clock. There are two or three other references I should like to make. One is that in addition to hearing from Mr. McMahon and from the representatives of the three companies in Minnesota who deliberated with the representatives of Trans-Canada, I think we should also hear from

Gairdner and Company to ascertain something about their representations.
In addition, it would be of interest to know the answer to the question to which the Department of Trade and Commerce was unable to give an answer on March 15. I had asked what was the parent company or corporation of each of these companies, Hudson Bay Oil and Gas Company Limited, Canadian Gulf Oil Company, Canadian Delhi Oil Limited, Tennessee Gas Transmission Company and the Western Pipe Lines group. Then I asked a further question, which was in these words:
What proportion of shares In each of said companies is held by a non-Canadian parent company and what proportion by the Canadian public?
In reply the Department of Trade and Commerce gave the following answer:
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.
Information should also be available to enable us to consider the meaning of section 7, subsection 1 of the bill, for the purpose of ascertaining whether or not any agreements between Her Majesty and Trans-Canada, made after the coming into force of the act, could alter, change, deviate or in any way derogate from the terms of the agreement which for some reason is not attached as a schedule to the bill or as part of the bill.
At the same time, as I have already stated, we could hear the evidence of Gardiner Symonds and also that of Mr. Tanner or other officers of Trans-Canada to ascertain the reasons for the repeated changes in front and the revolving alternatives that Trans-Canada has offered for so long. Consideration could also be given to the most peculiar anomaly of all, namely that if Montreal is served the Canadian people will find themselves in the position that through one form of subsidy the government of Canada will persist in putting gas into Montreal there to compete with Nova Scotia coal, which also receives a direct subsidy from the Canadian people.
Finally, very full consideration should be given to the Midwestern plan to ascertain whether or not this company can, within an assignable time in the future, develop or secure a market, what are the possibilities generally with respect to the rendering of a decision in that litigation of unpredictable length now in the course of proceeding before the federal power commission, and also to ascertain how much time will elapse before the hearing of evidence and submission of argument by counsel representing some 118 competing and opposing interests are even completed.
Northern Ontario Pipe Line Corporation
All these matters demand the setting up of a committee to ascertain these facts, and in order that this may be done, and to find out the peregrinations of the missing McMahon submissions and the reasons why they were maintained in such concealment and in cold storage for so long, I move, seconded by the Leader of the Opposition (Mr. Drew):
That Bill No. 298 be not now read the second time, but that the subject matter thereof be referred to the standing committee on railways, canals and telegraph lines.


Major James William Coldwell: Mr. Speaker, this afternoon the Minister of Trade and Commerce made a remark that the project of the building of a trans-Canada pipe line should be one which should appeal to all the people of Canada, and I want to say that I am in accord with that statement.
There are certain provisos that I would make. First of all, of course, it should be shown that the pipe line would be economically sound from the point of view of Canada.
I believe that can be done. Then, too, there is a vast quantity of gas in the province of Alberta which should not be allowed to go to waste and which should be utilized as speedily as possible. I think all Canadians would agree with that, because while that gas is in the province of Alberta it is indeed a resource that in reality belongs to all the people of Canada and should be utilized for the benefit of Canada.
One of the objections I have to the proposal now before us is that the success of the trans-Canada line from the point of view of the present project and company depends so largely on a decision of the federal power commission of the United States. I do not think that is a very dignified position for the country to be in, and I believe we should consider the alternatives to this plan. In my opinion there is only one alternative, and that alternative is that we shall build and operate the pipe line as a public utility. I do not say that the line should be built by the federal parliament of Canada alone if the provinces wish to co-operate in the building of the line.
If on the other hand a better plan would be to build the pipe line wholly under the jurisdiction of this federal parliament of Canada, then the provinces could take the gas from the line and distribute that gas in their own provinces under their own plans. The provinces that today have power commissions could distribute the gas through their own power commissions. If any one of them wished to distribute through a private enterprise organization, that would be the decision of the province concerned. But to my mind it would be an economically sounder
4046	HOUSE OF
Northern Ontario Pipe Line Corporation proposition in every respect for the government of Canada, which can raise the finances much more cheaply than can a private company, to undertake this plan and do it by itself.
The bill before us falls into two parts. The first part of the bill deals with the setting up of the crown company. I want to say immediately that when we are undertaking a major project of this description, I think a crown company is the proper way in which to do it, a crown company that can be brought before the appropriate parliamentary committee and questioned on its operations, but that operates independently of day to day interference and control of the House of Commons.
As I have said, the bill falls into two parts. It sets up for the purposes of the act a corporation to be called the Northern Ontario Pipe Line Crown Corporation. Then it provides for the officers of that corporation. We know that the corporation will be the agent of Her Majesty in right of Canada. That is all to the good. Then I think the bill is spoiled by saying that this crown corporation is authorized and expected to do certain things for the company to be known as Trans-Canada Pipe Lines Limited, a private corporation which, as has been so often demonstrated already in this debate, is under the financial control of powerful United States gas and oil companies, and the majority control of which is held in the United States.
I recollect over the years the manner in which we have been told from time to time- and I remember statements by Mr. Mackenzie King, of course in another connection, for example in connection with the setting up of the Bank of Canada-that those who controlled the financial affairs of the country in reality controlled the country. Although the Minister of Trade and Commerce this afternoon tried to tell us something different, I am still of the opinion that the real control of any corporation or any organization lies in those who are in control of the finances of the corporation.
So then we have the two parts of this bill. First there is the principle of the bill setting up this crown corporation and giving it certain obligations and certain powers. Then there is part II of the bill which deals with the building of the western section of the pipe line from the Alberta-Saskatchewan border to Winnipeg or a point in the vicinity of Winnipeg; and in the building of that part of the line we have undertaken an obligation, according to the bill, to finance that section to the extent of 90 per cent, not to exceed $80 million, and the company itself-so the Minister of Trade and Commerce told us the


other day-would have an investment of some $15 million initially.
Hence in reality what we are doing is handing over to this new corporation-which as I say is an American corporation-some $80 million to build that part of the pipe line. It may be said, of course, that the company will be obligated to pay 5 per cent interest, but the interest rate is not the real factor. The real factor is the amount of money we are putting into this project, namely $80 million. The bill also provides that the crown corporation shall be able to expend, lend or otherwise dispose of some $130 million altogether.
When you look at these provisions you see what we are doing for this company. While we with the province of Ontario are obligated to build the bridge across northern Ontario and with them are going to appropriate $118 million for that purpose, there is still left the gap between the city of Winnipeg or a point in the vicinity of Winnipeg and the Ontario-Manitoba border. We do not know how that is going to be financed. If the company cannot finance the first leg-which is an easy leg and which should be a productive leg

from the Saskatchewan-Alberta border to Winnipeg, how is it going to finance the more difficult piece of territory from Winnipeg to the Ontario border?
I am not so much interested in an argument as between the companies that were involved in the discussions which led up to the trans-Canada pipe line. For example, I do not think the record of Mr. McMahon, who has been talked about this afternoon, is one which recommends him to the attention of this House of Commons or this parliament. From what we know of his operations in Canada and elsewhere I think there is little to choose between Mr. McMahon and some of the other people whom we at times have referred to as economic buccaneers. I cannot see anything to choose between them. If Canada is going to be skinned, I would just as soon be skinned by an American as by a Canadian financial man.
I therefore do not think it is worth while to enter into a discussion of the relative merits of Mr. McMahon, Mr. Murchison or any of these other gentlemen. However, I want to say this to the government. I cannot understand part II of the bill. I cannot understand why part II of the bill refers to an unidentified agreement. I cannot understand why part II of the bill states:
Pursuant to an agreement in that behalf made, with the approval of the governor in council, before or after the coming into force of this act, between Her Majesty and Trans-Canada . . .
And so on. I cannot understand why this is spoken .of as an agreement. Any agreement that has been made between the government

of Canada and Trans-Canada Pipe Lines Limited should be identified, at the very least. Of course I think my friend the hon. member for Winnipeg North Centre was perfectly right this afternoon when he argued that the agreement should form an integral part of this bill and be appended to it.
I know there are hon. gentlemen sitting opposite and in the cabinet who have had long experience in public life in this country and two of whom have headed the governments of their respective provinces. I doubt very much whether either of them, in conducting the affairs of their respective provinces at that time, and in making an agreement similar to this with a private company and bringing in a bill, would not have appended the agreement to the bill so the legislature-and as we are now, this parliament-would have the right not only to discuss the agreement but to decide upon it and have a firm understanding of it.
As a matter of fact, when we look into this particular section of the bill what do we find? We find certain deficiencies in it. In this bill no date is named for the completion of the western section that we are financing, and no date is set for the repayment of the loan of some $80 million which we are making. Why are these two important details not included in the bill itself, as well as in the agreement which should be attached to the bill? As a matter of fact I think one could argue from the wording of this section of the bill that the governor in council might have the power to vary this agreement, to enter into an agreement with the other party to extend the time, or to extend the payments, or to do other things which we do not expect will be done and which certainly should not be done without the consent of this parliament. So I say, then, that part II of the bill now before us is deficient.
I would say to the government that when this bill goes into committee I think the government should move to have any agreement which has been signed made an appendix to the act which this bill will become when it is passed. I think that would be wise. It may be said, of course, that the government has no intention of varying the agreement, and no intention of varying the two important features to which I have just referred, namely the date of the completion of the western part of the line and the date of repayment of the loan. I know the government itself may feel this is unlikely, but supposing something happened and we had a general election and a new government in power.


Some hon. Members:: Hear, hear.


Major James William Coldwell: Well, wait a moment. Supposing that was the government of my hon. friends who sometimes say they are going
Northern Ontario Pipe Line Corporation to sweep the country at the next election, the Social Credit party.


Mr. Blackmore:: All would be well, then.


Major James William Coldwell: All would be well then? I was going to say, then Canada would be sold down the river. I say while I think there is no likelihood of that, nonetheless this parliament has an obligation to safeguard the country against anything happening which might be injurious to this country. Consequently we should insist, and I think the government would be wise to agree, on having this agreement which we have before us tonight taken from the table of the house and made a part of the bill.
The hon. member for Winnipeg North Centre indicated this afternoon, looking over the legislation of the past, that when agreements were brought in under a bill of this description those agreements have been made appendices to the legislation. I say that should be done. I think, too, this house should insist on that because in reality by leaving those things out we are giving to the government what the Liberal party in 1932 objected to very strenuously, something in the nature of a blank cheque. We have not filled in these two details, and these two details are important in any cheque or in any note, the date of repayment and the fulfilment of other obligations that may be inserted in the note. I think we should insist that this should be done.
Then the principle of the bill setting up the crown company, if it were of a different character and without these other details in it, would I think be generally satisfactory. As the matter now stands it is a most unsatisfactory proposal, and as I have sometimes described it, it is outrageous. May I say to the government that what is even more outrageous is the fact that steps have been taken to preclude any detailed discussion of the bill, and particularly of the resolution which introduced the bill.
This afternoon the minister said there was obstruction. Well, the resolution was introduced one afternoon and the Minister of Trade and Commerce immediately gave notice of closure, before there was any indication in the house of obstruction.


Clarence Decatur Howe: There were five divisions.


Major James William Coldwell: Perhaps there were five divisions during the afternoon. I am not sure whether they were all before the introduction of the resolution.


Hazen Robert Argue: Now he does not want us to vote.



Northern Ontario Pipe Line Corporation


Major James William Coldwell: As a matter of fact, Mr. Speaker, those motions that were moved were not motions of obstruction, because they were as much within the rules of the house as was the closure motion moved by the minister. Moreover, that motion was agreed upon by the cabinet and by the minister long before what he calls the obstruction motions were ever moved.


Clarence Decatur Howe: That is not true.


Major James William Coldwell: Does the hon. gentleman mean to tell me that closure was not agreed upon before the minister moved it?


Clarence Decatur Howe: The hon. member asks me a question. It was agreed closure would be applied if necessary, but it was agreed that if there were no evidence of obstruction it would not be applied at that time.


Major James William Coldwell: I noticed the tail of the minister's sentence, "at that time". I want to say this to my hon. friends of both the Liberal and Conservative parties. I find it very difficult to understand why they are so opposed to this project being undertaken as a public utility. As a matter of fact both parties have supported the setting up of public corporations to operate public utilities. I do a good deal of reading of biography. I am rather fond of it. Some time ago I was reading the biography of Adam Beck, so I took it up again since this debate began. As a matter of fact I find that the Conservative premier of Ontario said this as long ago as 1906, when the Ontario hydro-electric was being proposed:
The water power at Niagara should be as free as the air, and more than that, X say on behalf of the government that the water powers all over the country shall not in future be made the sport and prey of capitalists and shall not be treated as anything else but a valuable asset of the people of Ontario, whose trustees the government of this people are.
That was said 50 years ago, and there was very bitter opposition to the setting up of Ontario hydro. Many of the arguments that are being used today against the establishment of a pipe line of this description under public ownership were being said then. Premier Whitney had powerful support, of course, from certain newspapers and particularly the Toronto Telegram under the editorship of John Robinson. Incidentally I believe his daughter wields the pen today from the galleries of this House of Commons, and does it very effectively in the same cause.
A little later, in 1910, the same premier said this:
We have been attacked, vilified and slandered.

I am thinking of some other governments that have set up public corporations to try to protect the people of the province from exploitation.
Large sums of money have been expended in creating and fomenting prejudices and ill feeling against us. And still larger sums have been expended in conducting a campaign against us outside of Ontario. Our opponents left nothing undone that could be done, and men and influences, from the humblest man in the land up to the prime minister of Great Britain, were approached in the endeavour to destroy our power legislation, and render it impossible for this wonderful new force to be used and enjoyed by the people except on terms laid down by individuals.


John George Diefenbaker: That is Sir James
Whitney.


Major James William Coldwell: Yes. And that is exactly the position we are in today. Why should those great resources of all the people of Canada-true, they are located in Alberta- not be used and enjoyed by the people except on terms laid down by individuals; and those individuals, incidentally, beyond the borders and the jurisdiction of our own country?
I remember, of course, when it was first suggested that a plan might be adopted which would have government representation on the directorate of a new company to bring those resources to eastern Canada, and the president of the Gulf Oil Company, an American, said he would have nothing to do with a project in which governments had any control. He would have nothing to do with the use of his resources, as he put it- the resources of the people of Canada which had been alienated to him by a provincial government in this country-in a project in which governments had any control.
As for the Liberals, well, many and many a time I have heard over the years Liberals supporting the public ownership of certain utilities. In 1911 when the hydro-electric had become something of a success, Mr. N. W. Rowell, the new leader of the Liberal party, said this:
We believe in and will support public ownership and operation of public utilities and especially the utilization of water powers throughout the province for the generation and distribution of electricity; also the acquisition and operation of telephone lines.


Mr. Carrick:: Will the hon. member permit a question? I am wondering whether he has seen the report of Mr. Glassco of the Clarkson company, who was asked to investigate the feasibility of public ownership in this case, and the difficulties that he pointed out would exist?


Edmund Davie Fulton: That is not Walter Gordon's partner, is it?


Major James William Coldwell: Just a moment. I read it; I read the entire report, and Mr. Glassco said

"that public ownership was feasible; that it was economically sound. Then he went on to say that he did not think in these circumstances it was advisable. That is what he said. I think I have quoted him accurately; hut he gave the view that it was economically sound on the basis of his knowledge of economics and as an accountant. The latter point was simply this. He gave his opinion as an individual and outside his particular job. I know my hon. friend is one of the spokesmen for the gas companies in this house.
I know that. I am not going to argue with him.


Donald D. Carrick: Mr. Speaker,-


Some hon. Members:: Sit down.


Donald D. Carrick: I am rising on a question of privilege.


Mr. Speaker:: Order. The hon. member for Rosetown-Biggar has the floor, and if the hon. member wishes to correct something the hon. member for Rosetown-Biggar has said, the hon. member who wishes to do so must first make sure that he has consent. If the hon. member for Rosetown-Biggar does not wish to give consent the hon. member has the right to make a correction once the hon. member for Rosetown-Biggar has concluded his speech.


Donald D. Carrick: Am I not permitted to rise on a question of privilege at this time?


Some hon. Members:: Sit down.


Mr. Speaker:: If it is a question of privilege I will hear the hon. member.


Donald D. Carrick: On a question of privilege, I am objecting to the hon. member asserting that I am the spokesman for an oil company.


Mr. Speaker:: Order. I have heard that much, and this is what I am trying to indicate to all hon. members. Too many of these questions of privilege are being raised for the purpose of correcting statements made by hon. members in debate. As I said earlier, an hon. member has the right to make a correction at the end of another hon. member's speech, but he cannot do so under the disguise of a question of privilege unless he has consent.


Edmund Davie Fulton: Hear, hear.


Major James William Coldwell: Mr. Speaker, my remark was based entirely upon the-


Donald D. Carrick: Will the hon. member give me consent?


Major James William Coldwell: I think, Mr. Speaker, if the hon. gentleman-


Alfred Claude Ellis: Who wrote his speech for him?
1956	4049
Northern Ontario Pipe Line Corporation Mr. Coldwell: If the hon. gentleman will just wait until I finish I will satisfy him. What I was about to say was that I had read his speeches in the house and that was the conclusion I had come to. If I am wrong in my conclusion, then the hon. gentleman has the right to say so.


Hazen Robert Argue: He can make another speech.


Major James William Coldwell: As I say, I want to see Alberta gas used, but I want to see the project completed under a proper agreement, under a proper act of this parliament with no alienation of our resources and our rights to any corporation, particularly not to a group of corporations over whom we have very little control because they control the finances of the organization.
The agreement which is not attached, but which has been circulated and therefore is worthy of notice at the present time, has some very interesting features. I look at section 6 on page 3, which reads as follows:
Trans-Canada shall be in default hereunder subject to any delay as may be occasioned by force majeure defined to mean acts of God.
Then they go on to spell out almost every conceivable thing that may happen in this country to justify the delay and therefore the extension of the agreement. I do not think I have ever seen as many interferences specified as I see in this agreement. What are they?
Strikes, lockouts or other labour or Industrial disturbances, civil disturbances, arrests and restraints from rulers and people, interruptions by government or court orders, future valid orders of any regulatory body having jurisdiction, acts of the public enemy, wars, riots, sabotage, blockades, embargoes, insurrections, failure or inability to secure materials or labour by reason of priority or similar regulations or orders of the government, epidemics, landslides, lightning, earthquakes, fires, storms, floods, washouts or explosions, provided that such event shall be beyond the reasonable control of the party concerned and not due to its fault or negligence,-


William Earl Rowe: Is closure there?


Stanley Howard Knowles: Everything but a general election.


Clarence Decatur Howe: Finish the paragraph.


Major James William Coldwell: Yes, I will finish it.
-but not to include any orders, rulings, or actions, or absence thereof, by the federal power commission of the United States of America-


Clarence Decatur Howe: Go on.


Major James William Coldwell: All right.
-the Board of Transport Commissioners for Canada, or the petroleum and natural gas conservation board of Alberta or tribunals having similar jurisdiction.

Northern Ontario Pipe Line Corporation
The federal power commission is excluded, and why would it not be excluded when it is the great uncertainty in connection with this whole project?
One other thing I want to ask is this. How do we know that this company has the necessary pipe to do this job? We have seen no evidence of it at any time in this house. Last Friday my colleague the hon. member for Winnipeg North Centre asked for a copy of Trans-Canada's option on pipe. The minister said he would table it. Again on Tuesday the same question was asked and the same answer was given; and today, just before I came into the house this evening, it was asked for, and still it is not available. We have no evidence-


Edmund Davie Fulton: I wonder why.


Major James William Coldwell: -that the Trans-Canada Pipe Lines company has any option on the pipe which I believe is owned by one or more of the American corporations who are interested in this particular project.
Therefore, you see, while we adequately protect the company by enumerating all the possible things that may happen to prevent the company carrying out its obligation by the 1st or 2nd of April, we have no assurance that the company can carry out the obligation of providing the pipe, and that is not included in this particular bill nor have we seen any evidence of it.


Mr. Enfield:: Would the hon. member permit a question?


Mr. Regier:: Mr. Tanner has only two shares.


Frank A. Enfield: Have you read section 14, clause (b)?


Major James William Coldwell: This is the agreement; I am talking about the bill. As far as the bill is concerned and as far as this house is concerned we have no assurance; and this agreement is not a part of the bill. We have no assurance whatsoever.


Frank A. Enfield: You were using the agreement to back up your former argument.


Major James William Coldwell: There are other features of this bill which I could discuss at some length, but I do not propose to do so. One other thing I want to say is this. When this matter was brought before the appropriate committee of this house some time ago all kind of assurances were given by the officers of the company that this would be an allCanadian project and would be financed by Canadians in the usual way. From time to time they have gone before the government
rMr. Coldwell.]
and asked for a variation of the contract. I want to say to you, Mr. Speaker, I think this house is justified in using every means within its power to-


An hon. Member:: Obstruct?


Major James William Coldwell: -to find out everything in connection with this deal. I am therefore in accord with the amendment that has been moved by the hon. member for Prince Albert and I shall vote for it.
But I think when we send the subject matter to the committee we should do more than that. We should consider what is the only alternative as I have already stated it. We should have a thorough investigation into the economic feasibility of the whole plan, if you will, and particularly of public ownership; for I am convinced that in the capitalization of the line, capital can be obtained by parliament or the national government of Canada at a rate of interest far less than it can be obtained by any private corporation, and that the costs of financing and raising funds by the private corporation will probably be twice the cost of raising finances by the government of Canada.
And so, Mr. Speaker, I move, seconded by my friend the hon. member for Winnipeg North Centre:
That the amendment be amended by changing the period at the end thereof to a comma, and by adding thereafter the following words:
"so that consideration might be given to the advisability of recommending the construction and operating of a trans-Canada natural gas pipe line under public ownership."
I want to leave it at that tonight, Mr. Speaker, having placed on record what I believe to be the only feasible alternative. I think we can at least say that we have been consistently advocating this particular kind of plan to bring gas from western Canada across the country to eastern Canada from the very outset.


Donald D. Carrick: Mr. Speaker, may I now rise on a question of privilege? The hon. member for Rosetown-Biggar (Mr. Coldwell) in the course of his speech said that I was a spokesman for the oil company.


Alfred Claude Ellis: The whole government is.


An hon. Member:: Quiet, fog-horn.


Donald D. Carrick: I want to assure the house I am not the spokesman for any oil companies and I have no connection, financially or in any other .way, with any oil companies.


Major James William Coldwell: I did not suggest that.


An hon. Member:: Yes, you did.


Donald D. Carrick: In the speech I delivered in connection with the speech from the throne

I was simply stating what was my own honest opinion of what course was best for Canada in connection with the matter under consideration in this bill.


Alfred Claude Ellis: Who wrote the speech for you?


An hon. Member:: Who wrote yours?


Donald D. Carrick: I wish to assure the hon. member that the speech was entirely my own. I hope to have the opportunity of speaking in this debate later.


Stanley Howard Knowles: Provided the government does not put on closure.


John Horne Blackmore: Mr. Speaker, the position of the Social Crediters in this debate is clear and unequivocal. We want the pipe line built at the earliest possible moment-


Alfred Claude Ellis: For the benefit of United Stages
companies.


An hon. Member:: Oh, dry up, you!


An hon. Member:: Pipe down, fog-horn.


John Horne Blackmore: -and in order that the pipe line should be built at the earliest possible moment we want this bill put through the house at the earliest possible moment.
There are two reasons for our taking this attitude. In the first place, Alberta as a whole and as part of the Dominion of Canada needs to have this pipe line built; consequently the bill must be put through as quickly as possible. In the second place, Ontario and Quebec need this pipe line built at the earliest possible moment; first, in order to enable them to have adequate fuel as a source of energy in time of peace and second, in order to have a fuel supply secured in case of war.


An hon. Member:: Which war?


John Horne Blackmore: Let us examine the situation in which Ontario and Quebec would find themselves in case we became involved in war, a war in which guided missiles would be predominant as a weapon. How long would it take before we would have our hydro installations in danger of being blown up? What would that do to the economy of Ontario and Quebec? Then again, how would it be possible for us to have a normal supply of coal coming in from the United States, up from Nova Scotia or down from Alberta, when it is possible to blow every train off the track and sink every ship? I think it is time every hon. member faced up to that problem.
In Ontario and Quebec we use a great deal of fuel oil which comes in from the United States. In the event the United States became heavily involved in war and needed
17. 1956	4051
Northern Ontario Pipe Line Corporation fuel supplies for war operations, does any hon. member suppose she would not divert much of that fuel oil from Ontario and Quebec? I ask you to consider what effect that would have on every household in Ontario and Quebec and every industry in those provinces, including the war industries.
In the face of that fact, which I think should be obvious to a 14-year-old child, I find it utterly impossible to conceive how any hon. member who looks upon himself as being as responsible-as do the Conservatives and members of the C.C.F., every one of whom is grown up and over 30 years of age- is able to justify himself in doing everything in his power to block this bill and consequently to block the construction of the pipe line as long as possible.
I should like to ask one more question. What do you suppose at the present time would be the major objective of Bulganin of Russia in respect of this bill? He would want to delay the passing of the bill as long as possible, and consequently the construction of the pipe line, for the reasons I have already indicated concerning Ontario and Quebec in time of war.


An hon. Member:: A good idea-


John Horne Blackmore: The trouble with these people is that they have men's voices but children's brains. I would like to turn my attention to some of the observations made by some of the hon. members who have thus far spoken. Let me take the case of the hon. member for Prince Albert. The hon. member spent a good deal of time in his speech saying outrageous things that could not possibly be supported by the facts, things which he believed would get into the press and create confusion throughout the land. For example, he spoke of this whole Trans-Canada Pipe Lines proposal as a nefarious scheme. Just weigh the word "nefarious".


Alfred Claude Ellis: A good word.


John Horne Blackmore: What an outrageous thing to say. The hon. member could not support that statement with one iota of argument or evidence. Yet he can say this and get publicity all over the country and be believed by many admirers who will never be able to examine the facts of the situation, who will rely on the hon. member for Prince Albert and so be deceived. Next he spoke of the Trans-Canada Pipe Lines company as being "the pampered pet", and he made that remark notwithstanding the fact that the Minister of Trade and Commerce said distinctly that it was not at all the government's pet or instrument. It was not chosen as the instrument in any way by the federal government. It was chosen by Alberta.
4052	HOUSE OF
Northern Ontario Pipe Line Corporation


Stanley Howard Knowles: $80 million.


John Horne Blackmore: I have an idea a good many hon. members do not pay attention to what other hon. members say. All they can think of is their own particular line of nonsense. He spoke of this pipe line company as being "a favoured corporation". What I said regarding the other matter is just as true concerning this one. As evidence that the Minister of Trade and Commerce was correct when he said that the government of Canada has not chosen the Trans-Canada Pipe Lines company at all, may I read from a document which was placed on the record by the Minister of Trade and Commerce this afternoon, namely a letter written by Premier E. C. Manning of the province of Alberta, no longer ago than April 24, 1956. On page 2 of that letter we read the following words:
In fairness to the Trans-Canada Pipe Line company, I believe it rightly can be said they have complied with every condition and requirement of the national gas policy laid down by your government.
In other words, the Dominion of Canada has laid down the policy, and the Trans-Canada Pipe Lines company has complied with every detail. It is not true that the Trans-Canada Pipe Lines company is in any way a favourite or pet of the government of Canada. It is simply the instrument chosen by the Alberta government, and it has done everything it possibly could to comply with the request of the dominion government.
They have encountered temporary difficulty in financing their part of the project-
Note those words and, incidentally, hit yourselves on the heads so you can get this:
They have encountered temporary difficulty in financing their part of the project only because of the delay before the federal power commission at Washington, which is something entirely beyond their control.
That ought to settle the matter once and for all. You will remember that I asked you a few minutes ago what you would think would be Bulganin's attitude toward this bill. It is easy to find members who are riding along with Bulganin's policy.
Now we shall go on to other remarks made by the hon. member for Prince Albert. He made many grossly offensive and misleading remarks of many kinds in addition to the ones to which I have already referred. He described this scheme as "a raid". Let me recall to hon. members in the house that it has been laid down that all the money that is being advanced by the dominion government is only being loaned, and it is loaned at an interest rate of 5 per cent, a right good interest rate on an amount of money as large as that. Yet the hon. member for Prince
rMr. Blackmore.]

Albert, considering himself a responsible and capable man, makes an outrageous remark of that kind. Besides that, it is agreed and stipulated that the money must be paid back within nine months. Whoever called a loan like that a raid, except the C.C.F.'ers and the Conservatives?


Alfred Claude Ellis: What about that free money yon speak of?


John Horne Blackmore: As a guarantee that the money will be repaid, every single asset of the company is mortgaged in order to cover that loan.


An hon. Member:: There are no assets.


John Horne Blackmore: What foolishness! Men's voices and children's brains! The hon. member for Prince Albert mentioned "alternative proposals". What does he think? There was a good deal of questioning about the Frank McMahon proposals. The general idea obtaining in the minds of my Conservative friends seems to have been that notwithstanding the fact that this Trans-Canada Pipe Lines company has a contract with the federal government and has kept every single item in that contract, yet the federal government should with impunity break the contract just because a fly-by-night like McMahon comes forward with a proposal.
I should like to ask the hon. member for Prince Albert, a great lawyer, whether he would like to defend the government against a suit for damages, which Trans-Canada Pipe Lines could easily bring against the dominion government for that breach of contract. For members of parliament like the Conservatives, who pride themselves on being people of responsibility, to advocate by implication the dishonouring of a contract when one party to the contract has honoured its side in every single respect is something beyond the comprehension of anybody who is still sane. To back up what has been said, you will remember that the Minister of Trade and Commerce had said specifically that the Trans-Canada Pipe Lines company "is not in default". I propose to read the words, and I hope, this time they are read, that somehow or other they will get into the minds of C.C.F. and Conservative members, who need so much to have these things in their minds.
Then the hon. member for Rosetown-Biggar made a remark to the effect that the government was handing over a great quantity of money, but in reality the "handing over" is the lending of that money at 5 per cent interest on the most perfect security that could possibly be obtained to back up a loan.


Erhart Regier: Where is the security?


John Horne Blackmore: He said the government was going to be "skinned." I maintain that in the light of the facts remarks of that sort are simply a disgrace to the members who make them.


Erhart Regier: Where is the security?


John Horne Blackmore: They are utterly irresponsible, utterly misleading and completely out of place.


Erhart Regier: Where is the security?


John Horne Blackmore: I should like to-


Alfred Claude Ellis: Who wrote that speech? The Minister of Trade and Commerce?


John Horne Blackmore: I wish to read three or four short excerpts from speeches by the Minister of Trade and Commerce. On May 8, as recorded on page 3664 of Hansard, he used these words:
I emphasize that the approach came from the government, not Trans-Canada.
In other words this Trans-Canada company is not the "pet" of the government.
I emphasize that the approach came from the government, not Trans-Canada. Trans-Canada was not in default.
I hope the members of the C.C.F. party can read English well enough to know what that means.


Alfred Claude Ellis: What have they done in the last five years?


John Horne Blackmore: That is perfectly clear. I wish to read another passage found on page 3862 of Hansard of May 14, which shows that Trans-Canada Pipe Lines Limited is the only instrument available. It is not that the government has any particular tenderness for this company. The fact is that the company is the only instrument available. Let me read the minister's words.
There is in Canada only one agency which can be placed in a position to build the western part of the pipe line this year. That is Trans-Canada Pipe Lines Limited. Some sections of the press, and some hon. members, are in the habit of referring to Trans-Canada as the government's "chosen instrument". The government has no chosen instrument. Trans-Canada is the only usable instrument available.
Once more, those words are just as plain as the English language can possibly make them. Once more, I should like to read an excerpt to show that Trans-Canada is not responsible for the present inability to finance. Ordinarily when reference has been made to the inability of the company to finance we have had an outburst from the C.C.F. resembling the "yakking" of a lot of jackals; no sense
1956	4053
Northern Ontario Pipe Line Corporation whatsoever, just crazy noise. On page 3862 of Hansard, column 2, we find these words of the minister:
Financing by normal methods cannot be arranged in the absence of validation by the federal power commission of Trans-Canada's contract with Tennessee.


An hon. Member:: Who said so?


John Horne Blackmore: That is just as plain as words can make it and those are the words of the responsible minister, the Minister of Trade and Commerce-


Alfred Claude Ellis: Responsible?


John Horne Blackmore: -a man who knows more than 70 men like the hon. member.


An hon. Member:: Attaboy, John.


Alfred Claude Ellis: Cross the floor, John.


John Horne Blackmore: Those are the words of the Minister of Trade and Commerce, who knows all there is to be known about the trans-Canada pipe line, yet we have these people questioning his word! It is simply an amazing thing. On the same page and in the same column I read these words:
Therefore the only practical arrangement is to finance a start by Trans-Canada this year.
But when we finance the start the hon. member for Rosetown-Biggar says we are being skinned.


Alfred Claude Ellis: Who is putting up the money?


John Horne Blackmore: Now, can you get sense out of that?


Stanley Howard Knowles: They are getting dollars.


John Horne Blackmore: The hon. member for
Prince Albert said some things to which I have already referred.


An hon. Member:: How much will the "Socreds" get out of it?


John Horne Blackmore: I wish to spend a minute or two more on Trans-Canada Pipe Lines. In the first place, let us take the president of the company. Let us give him a little bit of attention.


Some hon. Members:: Oh, oh.


John Horne Blackmore: Once more the jackal chorus is going; just jackals, that is all! Hon. N. E. Tanner was minister of lands and mines in Alberta commencing in January, 1937.


An hon. Member:: He went to his reward.


John Horne Blackmore: He served as minister until September, 1952. He resigned his position in 1952 and asked his constituents-I went around with him to every meeting-in the constituency of Cardston to release him from further service as their M.L.A. He covered the whole constituency speaking in support
4054	HOUSE OF
Northern Ontario Pipe Line Corporation of E. W. Hinman, who has since become provincial treasurer of Alberta. He stated frankly why it was that he desired to withdraw from serving the people. He said that he had served them for 17 years, and he felt that the time had come when he should be able to engage to some extent in private affairs of his own in order to build up some sort of competency for himself and his family.


Alfred Claude Ellis: How many shares of Trans-Canada has he?


John Horne Blackmore: He established a company in Calgary called Merrill Petroleums. That company under the management of Hon. N. E. Tanner have been a surprising success. They are very effective as a business organization in every possible way.
According to Premier Manning's letter of April 24, 1956, Hon. N. E. Tanner apparently did not take over the presidency of Trans-Canada until about two years after he withdrew from the government of Alberta. He was occupied earlier with his own company, Merrill Petroleums. From page 1 of Premier Manning's letter of April 24, 1956, I read the following:
. Over two years have lapsed since the present Trans-Canada project was formulated as a vehicle to implement national policy with respect to natural gas.
Yet we have the hon. member for Prince Albert trying to give the picture that this company had been going on for years in a tortuous manner, and trying to indicate that the company had been poorly managed and was dishonest. These words from the pen of Premier Manning himself ought to settle the matter once and for all-


Some hon. Members:: Oh, oh.


John Horne Blackmore: -and will for all honourable men.


Alfred Claude Ellis: How many shares did Mr. Tanner have in Trans-Canada?


John Horne Blackmore: What difference does that make-


Alfred Claude Ellis: Two shares.


John Horne Blackmore: -except to jackals?


Alfred Claude Ellis: 


Mr. Wylie:: How many shares have you?


John Horne Blackmore: Our C.C.F. friends are certainly worrying about the people of Alberta. The people of Alberta have slapped them in the face and kicked them time after time after time, yet they think they must be the little white-winged saviours of the people of
[Mr. Blackmore.!

Alberta, just as if the people of Alberta did not know something about these matters themselves.
In order to give some idea of just how badly Alberta is injured by the private enterprise we have there, which has done so much in the development of our industry and of course has aroused the greenest envy on the part of the C.C.F. people, may I tell the story, as far as I have the opportunity to tell it in the time at my disposal, of one of the gas reservoirs in the province of Alberta. This one is in the riding of the hon. member for Macleod (Mr. Hansell) about 25 miles from where I live, and is near the town of Pincher Creek. It is called the Pincher Creek wet gas field. In order to tell the story properly I should like to lead up to the discovery of the project by telling something about the history of the gas and oil industry in southern Alberta, as the Minister of Trade and Commerce did this afternoon.
From Peace river to the border and from the Rocky mountains to Saskatchewan, Alberta is already dotted with scores of gas fields and single well gas discoveries. For those who have never seen one of these fields, may I try to give some sort of idea of the kind of deposit these fields are in and the kind of job a company has to do in order to discover gas. What is a gas and oil field deposit like? It is like an unopened oyster shell lying on its side and buried in the ground. That is a fairly good picture of what a gas field is as nature left it. There is a large stone-like structure around the oval space and the oil body lies in the bottom of the oval much as soup will lie in the bottom of a soup tureen, lying on the floor of the oval chamber, so to speak. In above the gasoline and oil, between the surface of the gasoline and oil and the ceiling or roof of the rounded stone structure, gas has collected down through the ages; and because of the way in which it collects it comes to exert an enormous pressure on the surface of the oil which lies at the bottom of the oval structure. The gas presses on the oil. As soon as the drill goes down and pierces through the upper shell, we will say of the oyster, and goes down far enough, then the pressure of the gas on the oil surface forces the oil up through the pipe and out where people can get at it.
Now we come particularly to the wet gas field of Pincher Creek. This wet gas field- and I am thinking now in terms of the oyster shell-is seven miles long and about three miles wide at its widest place. The porous Madison limestone reservoir is buried two and a half miles deep-two and a half miles deep is the oyster shell-in the foothills of the Rocky mountains about 15 miles north

of the Canadian and American border between Pincher Creek and Waterton Lakes national park. The ridge containing the reservoir- the ridge itself-lies buried more than one and a half miles below the surface of the great Pacific ocean that rolls its way 500 miles west beyond the Rocky mountains. Just think of the task involved, first of all in finding where that oil deposit lay and second, in getting down to the oil deposit and bringing the oil up.
The pool contains about 2,400 billion cubic feet of raw wet gas-just think how much that is-a mixture of natural gas, gasoline, condensate and light crude oil, sulphur, propane, butane and ethane. The difference between wet gas and dry gas is that wet gas contains all these substances which I have mentioned, while dry gas contains none of them but is practically ready to be used as gas immediately.
The worth of the whole mass of content of this field is more than half a billion dollars. Of this, 2,400 billion cubic feet of raw wet gas, 37j per cent or 1,920 billion cubic feet, worth $211 million itself, would be dry gas. The other 62-| per cent of the value could not be recovered until the 1,920 million cubic feet of dry gas was disposed of, or marketed which means that even after the company gets down and finds the gasoline and finds the gas it is unable to use that gasoline and the contents of the gas until it can sell the dry gas after they remove the other substances from the wet gas.
Now hon. members can see how difficult a position the company is placed in unless it can first of all find a market for the dry gas. They cannot take up any of the contents of that great body of value until they can get a market for the dry gas. But the Conservative and C.C.F. members of this house are doing everything in their power to prevent them from selling their gas so they can take out the sulphur, butane, propane and all the other substances in that gas, and the whole quantity must lie there as an absolutely dead asset.
They are brilliant Canadians, these C.C.F.'ers, and these Conservatives, in trying to block the development of great values of that kind. Their only excuse is that they just do not know what they are doing. If they knew one-fiftieth of what they think they know, they would be brilliant; I think they would all be in universities. Unless and until Alberta and Canada are able to market the dry gas from the Pincher Creek wet gas field there will be in that field frozen assets of Canada-belonging to Nova Scotia and Newfoundland just as much as to Alberta,
17, 1956	4055
Northern Ontario Pipe Line Corporation but equally useless to Nova Scotia, Newfoundland, British Columbia as to Alberta-until the field can be developed. That is what we are struggling about now, to be able to develop the field.
In the field there are the following; sulphur, some 7,400,000 long tons, estimated to be worth $163 million; condensate and light crude oil, 38,400,000 barrels worth $126 million; natural gasoline, some 9,800,000 barrels worth $24,700,000; propane, some 12,700,000 barrels worth $21,300,000-I hope the C.C.F. can understand what dollars mean-butane, some 10,400,000 barrels worth $16,300,000; the total value of these frozen assets being $351,300,000. All of this the noble Conservatives and the equally noble C.C.F.'ers are trying to prevent from being realized. Is it not a brilliant record? Yet they call themselves Canadians, they call themselves intelligent, and they consider themselves to be responsible.
That is the gift which the great Creator prepared for North America in the district between Pincher Creek and Waterton Lakes park. If it had not been for this private enterprise which the C.C.F. seem so much to abhor, that gas would have remained in that field for perhaps another thousand years, because there is only one kind of organization that has the money to make it able to dare risk the cost of discovering a field like that. The only kind of concern that has that money is really a giant, and the only place you find such giants is in the United States.
Let us see who it was that found this great deposit. From the time away back in the 1890's when two old-timers, Lafayette French and Kootenay Brown traded some Indians a horse for a certain slough from the surface of which neighbouring Indians had long been skimming a brown oily liquid with a vile smell and certain useful properties-from those days on-the idea lingered that oil could be found in southwestern Alberta; but it was only the idea. I can remember distinctly how they used to talk about it when I was a small boy.
In 1901-we are now tracing the development of this story up to where we have this wonderful field now all ready to be used- French and Brown showed three Calgary pioneers, namely A. P. Patrick, John Line-ham and George Leeson, their slough and gave them the idea of oil. We were getting a little nearer. The Rocky Mountain Development Company was formed. A forest of tents sprang up around the slough, drilling started, the first Alberta oil boom got under way and suddenly collapsed.
4056	HOUSE OF
Northern Ontario Pipe Line Corporation
Why? Largely because there was not a company strong enough to carry on. Between 1901 and 1920 at least a dozen wells were drilled in the Cameron brook area- Cameron brook is a brook in the Water ton Lakes park not far from this field-near where Lafayette and Kootenay got their idea. Through the years within a 25-mile radius of the present Pincher Creek wet gas field some 27 wells were drilled with big and small companies, Canadian and American, participating in the costly and lengthy hunt. But they had not yet found the oil.
In 1941-we are coming up to the great outburst which resulted in the discovery of oil and gas in a big way in Alberta-the Canadian Gulf Oil Company, a unit of the big Gulf Oil Corporation of Pittsburgh, decided to embark upon an Alberta program. One of the things at stake in this great debate now is this. Are great companies like the Gulf company of the United States to be discouraged into thinking that no matter how much money they spend in developing great projects like this, there will be simpletons in the Canadian House of Commons who will block every effort to enable them to market their goods or are we going to act in such a way as to give them confidence?
Let us go on with the story. First, Gulf Oil had one of its geologists start a preliminary reconnaissance. In 1942 Gulf Oil set its scientists to work with seismographs and gravity meters in a hunt for structures and information, following clues over 9,000 square miles in southwestern Alberta. By 1946 they had poured over $4 million into the hunt but had not probed into the earth except with shotholes of seismograph crews and shallow structure test bore holes. The company scientists, even after this high cost search, were not at all sure of success. The best prospect they had located was a deeply buried anticlinal structure or ridge south of Pincher Creek and not far from the shallow drilling of nearly half a century before. We are taking steps to show how much we need the great, powerful concerns of the United States to discover our oil.
Gulf Oil had to consider whether or not to take a very risky gamble and drill to test whether gas or oil lay below the Madison limestone formation, which is the productive core of the Turner valley field 100 miles to the north. This core would have to be reached and pierced. They knew that the Madison limestone could be anywhere from 11,000 to 14,500 feet underground. The cost of the necessary deep drill tests might be $1 million. The odds were at least 10 to 1 that the Madison might not be productive when it was penetrated, and all that money might be spent in vain.
'Mr. Blackmore.]

Gulf decided to take the gamble and in January 1947, a few weeks before Imperial Oil discovered the Leduc field, Gulf announced that it would drill its Pincher Creek No. 1 wildcat. Gulf Oil gathered itself for the challenging effort. It contracted for one of the most powerful drilling rigs then in existence, capable of cutting a hole 15,000 feet deep through hard rock, at a price of nearly $1 million. All this goes to show how helpless we would be in getting this development if we did not have powerful concerns ready to take the risk.


Alfred Claude Ellis: Why does not the government do it?


John Horne Blackmore: Why does not the hon. member show a little common sense instead of talking so much talk?
On April 23, 1947, Gulf began to drill and the battle was on. Eight months went by, months of unremitting strain for all concerned. Then the crew reached the Madison limestone at a depth of 11,700 feet, over two miles into the foothills of the rockies. Fifty-five feet into the Madison they bored and they struck porous lime, the container for oil, gas or water. If it was water, then of course all their efforts would have been in vain. They drilled 45 feet farther and halted at 11,800 feet, having set a North American record for an open hole.
The danger to the well was extreme. The pressure on a nine inch diameter hole at over two miles of depth is tremendous. Surface casing extended from the top to a point 440 feet down, but below that were 11,360 feet of hole unprotected except for the mud coating left by the drilling mud which was kept continuously circulating through the drill pipe to bring rock cuttings to the surface. In order to protect the well a seven inch casing was run and cemented to 11,755 feet.
Then on December 28, 1947, a drill stem test was run to determine the contents of the porous rock. The drill stem test proved that the field was under enormous and very dangerous pressure; second, that there was a highly gratifying deposit of wet gas. This was only the beginning, Mr. Speaker, of the tremendous story of the discovery of gas in Alberta.
Let me ask hon. members of the Conservative party at least, who do make a pretense at having sense; why run the chance of discouraging companies who would come into Alberta and Canada to find field after field like this, greatly to the blessing of the whole Dominion of Canada and perhaps the means of saving us in case of a war? Can you afford to take the chance of delaying this bill, delaying construction of this pipe

line and perhaps destroying this company, thus rendering almost impossible the buildup of another company, with great loss to this nation?
Now, Mr. Speaker, I think for the time being I shall defer the remainder of this story and tell it at some future time.


James Garfield Gardiner: Mr. Speaker, in rising-


Stanley Howard Knowles: Now we will hear about the Saskatchewan dam.


James Garfield Gardiner: 
Stanley Howard Knowles: Publicly owned.


James Garfield Gardiner: Yes; I am coming to that in a minute. Then again we have had activities connecting the southern areas with the northern areas, and many of those activities have been carried on by provincial governments in different parts of the Dominion of Canada.
Now we come to another method of transporting what used to be freight, what we used to carry on cars, in so far as oil was concerned on railway cars of a type built for the purpose. Oil today is largely being transported by pipe lines. And now that we have gas in quantities which can be transferred from one end of the country to the other, that again is being made possible through the construction of pipe lines, so this question of putting in the first transcontinental pipe line, you might say, although it does not quite extend from one coast to the other, is naturally a very important issue in this house at the present time.
Someone said something about government ownership. I am not going to go into the details with regard to why it is difficult to apply government ownership to this project. That was very successfully done by the minister who has charge of the bill and also by the leader of the Social Credit party when they spoke on the resolution. Therefore I do not think it is necessary to put anything further on the record in that regard; but something said by the hon. member for Rosetown-Biggar stirred certain memories, and I should like to refer to them in relation to government ownership of utilities, and do it in just a few words.
The hon. member said in this house, Mr. Speaker, that there were two members of the government who had been leaders of governments in the provinces; that both of them had had something to do with the setting up of publicly-owned utilities, and he thought we should have known better than to have allowed a bill to be brought down of the kind that was brought down here. The best claim he could make for that statement was that the agreement was not attached to the bill. Well, the bill keeps on referring
4058	HOUSE OF
Northern Ontario Pipe Line Corporation to the agreement, and I suppose it would be a little more easily found if it were attached to the end of the bill, but I do not think it would make any particular difference either to the legality of the bill or to its effectiveness in making a project of this kind possible.
I had the privilege of either sitting behind or sitting in the government of all the premiers of Saskatchewan, or sitting in opposition to them, except the present one; and I sat with the present premier in this house. Therefore I know a little about the activities of those times. The first public ownership scheme in the province of Saskatchewan was the telephone system, which was set up in 1906, the year after the province was formed. We have had government-owned, controlled and operated telephones practically all through the history of the province, set up under the Liberal government of Hon. Walter Scott.
Then sometime later, while I myself was premier of the province, I had the privilege of setting up the power commission in the province of Saskatchewan that established government ownership, operation and control of power in that province. And now my friends come along and say that the Liberal members of this house, the Liberal members in Saskatchewan and Liberals in general, have been very critical of their activities in setting up organizations there which are under the same .kind of control and operation.
Well, I am sure my hon. friends will agree with me when I say that practically all the profits they have ever made under government ownership and government control- socialization, so to speak-have been made from the telephones and the power commission set up by the Liberals while they were in power. They have tried out the boxes; they have tried out the fish; they have tried out the timber; they have tried out a great many other things, and now they finally have made up their minds that even they are convinced that is not the proper way in which to set up organizations to deal with the resources of the province.
I hold in my hand the prospectus of the Saskatchewan Cement Corporation Limited, the submission which they have made to the public in order to sell shares. Let me read this one sentence from it. This will sound good to you when I read it:
The company's bankers have agreed to purchase $5,500,000 guaranteed first mortgage 5) per cent 10 year serial bonds at 99-25, subject to the same being guaranteed by the provincial treasurer of the province of Saskatchewan.
Well, my hon. friends, having tried the application of public ownership and control to making boots, to making blankets, to making a lot of other things, and having cast


them all into the discard, have now come back to following exactly the same plan of organization that has been followed in order to set up part, and only part, of this particular pipe line. Therefore I call their attention to the fact that they themselves have done all the answering that needs to be done; they themselves have given every answer.


Alfred Claude Ellis: You yourself have sabotaged it.


Clarence Decatur Howe: You can't take it.


James Garfield Gardiner: The night before last I attempted to ask a question of the leader of your group. He refused me the right; therefore I think I have a perfect right to go on with my speech.
This afternoon when there was some comment made by the leader of the C.C.F. party to the Minister of Trade and Commerce, in the midst of that discussion the minister called attention to the fact that certain things had been said and afterwards the minister himself produced proof of what he had been saying. I hold in my hand the statement made by the hon. member for Eglinton of the official opposition. At page 3935 of Hansard of May 15, 1956, he is reported as having said:
The Minister of Trade and Commerce concluded his words on May 8 with this sentence:
"The action proposed today is another declaration of independence by Canada ..."
That is an interesting expression.
May I say we have been listening here for some days to speeches being made and terms being applied to members on both sides of the house, and I would just like to submit my opinion with regard to what really does give a person the right to rise in his place on the floor of this house and raise a question of privilege. I am quite certain that when the leader of the C.C.F. party said to my friend back here that he was representing certain corporations in this house, if there is no privilege in connection with that then there is no privilege in connection with anything.
That was a real question of privilege. No hon. member has the right to come to this house to represent here any particular corporations, or any particular individuals for that matter. He represents a constituency, and on being elected he comes here to speak for all the people in the Dominion of Canada on these different issues. If he is accused in this house by another member of being here to represent some particular corporation or industry then, of course, he has the right of privilege to bring it up, and such statements ought to be withdrawn. But I think this one

with regard to the Minister of Trade and Commerce caps them all:
The Minister of Trade and Commerce is confused, you see, as to what country he is supposed to be serving.
Now, what is that based on? That is based on the fact that the Minister of Trade and Commerce was born in the United States. He goes on to emphasize it. Well, I would like to suggest to this house that at least 25 per cent, and probably more, of all Canadians we have in this country were born in some other country and came here. I would also like to suggest that statements of this kind do no credit to this house, and certainly do no credit to those who send members here who make that kind of statement. There are a lot of people in Canada who will remember statements of that kind and see to it that some of those who make them do not come back again.


Alfred Claude Ellis: Call an election now.


James Garfield Gardiner: There is one thing, however, the people will always remember regardless of what party they belong to, what country they were born in or what part of Canada they live in. They will all remember that the Minister of Trade and Commerce has performed a greater service for this country than anyone else in his time. Not only that, even taking into consideration what has to do with the placing of a measure like this before the house, they will remember he has done at least as great a service in that regard as he has done in a great many other instances since he has been in this house. Why do I say that?


Miss Aitken:: Yes, why?


James Garfield Gardiner: All the discussions which have taken place here relate back to one or two questions. They say, "Just why did not the Minister of Trade and Commerce bring to council and start a detailed discussion on the terms of the McMahon proposal?" Well, if any minister who already knew the opinion of the government on the main issues raised by a proposal of that kind were to carry all such proposals to the government, he would not be in the government very long. There is only one man in this house whom I can see before me who ever served in a federal, non-Liberal government in Canada.


An hon. Member:: For six weeks.


James Garfield Gardiner: Anyone who has ever served in a federal government knows that every minister receives proposals every day, sometimes marked confidential and sometimes not marked confidential, which he does not take to council. If that were not the case we would get no business done at all.
17, 1956	4059
Northern Ontario Pipe Line Corporation
What is the position in connection with this particular project? Well, in the first place there are two points of importance. The first is that this line must be kept on the Canadian side of the border for certain reasons, and anyone in this house can easily determine what are those reasons. The second point is that in so far as the gas is needed in this country it must be kept on this side of the line.
If anyone wishes to determine why certain steps were taken about which questions were raised this afternoon all they need do is refer back to those two facts, both of which were basic in Sir John A.'s beliefs. After all, as was stated a few moments ago, gas was discovered in Alberta some time ago in considerable quantities. The government of Alberta quite properly said in the beginning they wanted to make absolutely certain there was going to be sufficient gas reserved within the boundaries of Alberta in order to make it possible to develop industry there and maintain it to the extent which is necessary. After further development, and after examining the available supply, they could confidently say some 500 million cubic feet per day could be exported from Alberta. That matter was, of course, discussed by the federal government, and it was discussed in relation to a pipe line.
It was suggested by some people that we build a pipe line down to Winnipeg and from there to the south, making no provision whatever for the building of a line beyond Winnipeg to the central part of Canada, and merely to allow a company to continue selling gas in the United States until they made enough money to build the line through the northern part of Ontario and on into the eastern part of Canada. Questions like that were discussed by the government, and the government came to the conclusion that this kind of thing could not be allowed to happen.
Why? In the first place, if you allowed that gas to go down across the line at Emerson into the United States and on down to Minneapolis and Chicago-it was even suggested that we try to push it around to Detroit and into eastern Canada-you would establish there private interests which would be interested in the retention of the gas in that section of the country, interests which you could not discard in future without causing a great deal of trouble with the country to the south. The government naturally decided that any system that was set up had to be on a basis which would keep a certain amount of gas for this country. The figure struck was 300 million cubic feet per day which could be used in this country and therefore had to be retained here for our use.

Northern Ontario Pipe Line Corporation
Of course a question arises as to what is going to happen in the future. That will depend on the further production of gas and its distribution. Before they can get any increase of gas across the border they must get a permit from this government in order to take it across. In other words it has been made absolutely certain that any gas which is required in this country is going to be kept on this side of the line and used here. Many people say it has something to do with the cost. That reminds me of some things which took place in my own province. Great boasts have been made about the fact that gas is to be taken into two of our cities under a government-owned and controlled system.


Alfred Claude Ellis: Are you opposed to that?


James Garfield Gardiner: I am just going to tell you something you will be opposed to before you pay for it very long. That gas is costing 83 cents in Regina and 83 cents in Saskatoon.


Alfred Claude Ellis: There is no gas in Regina yet.


James Garfield Gardiner: -and 84 cents in Prince Albert, and under this plan gas is going to be sold in Winnipeg for 30 cents. I am sure you will be saying a great deal about that if you decide to reside permanently in Regina. That is something that is happening under government ownership and control, and about which our friends do not tell us the whole story.
Provision is being made under this system to keep gas on this side of the line, and to build only an arm of the line to take out whatever surplus gas there is, which we are sure we can allow to go into the United States without interfering with conditions here and without creating vested interests on the other side of the line which we cannot maintain. All that is protected by this scheme.
Let me ask you this question. When Mr. McMahon came along and offered to do this job and said he could finance it, what were the conditions in the offer? He could finance it if we would allow him to ship 400 million cubic feet of gas per day into the United States for 25 years. That would cut us down to a supply of 100 million cubic feet per day, one-third of what we require in this country. Once having established that situation on the other side of the line, how could the government or anyone else change it?
Talk about placing control on the south side of the line. If you want to establish control over anything on this side of the line just make it possible to ship it down there and establish vested interests on the other side of the line; then try to take it away and you will find out whether or not you are under the
!Mr. Gardiner.]
United States control. It is a matter of keeping the gas here. We must not create vested interests we cannot continue to supply.
It makes no difference where the Minister of Trade and Commerce had that proposal; whether he had it in his inside coat pocket as my friend the hon. member for Prince Albert would lead us to believe, whether he put it in the safe or, for that matter, whether he put it in the fire. The minister knew when he read that proposal the government of Canada would not accept it.


Some hon. Members:: Oh, oh.


James Garfield Gardiner: All these principles I am mentioning were discussed in the cabinet, no matter what proposal they applied to. They have been discussed over and over again. The one reason this company we are talking about now, that we are assisting somewhat to finance the building of part of the line-


Some hon. Members:: Somewhat!


Mr. Hees:: Somewhat? Oh, brother!


James Garfield Gardiner: Even this particular organization knew what the situation was in that regard, because they wanted to do that at an earlier stage, ship the gas to the United States, sell it as fast as possible, get the finances on account of it and then build the central section. They learned from the government long ago that was not permitted, and it is not permitted now. So the gas is being kept to the extent that we need it on this side of the line.
This particular bill proposes to assist financially on two different sections of the line that is to be built. The first is a government-owned project, as my hon. friends of the C.C.F. say it ought to be.


Alfred Claude Ellis: The whole project ought to be.


James Garfield Gardiner: Are they going to vote the bill down because that is in it? Well, that is in it. It provides that the government of Canada and the government of Ontario, working hand in hand, one being Liberal and the other Conservative, are prepared to build that line across northern Ontario. If that line were not built across northern Ontario the only objective there would be in building the line from Alberta to Winnipeg, beyond providing Winnipeg with gas, would be to build a line to Emerson and on into the United States. So this bill provides for the setting up of the northern Ontario section, financed by the two governments.
Then it provides for the setting up of the next section west, the one from the Alberta boundary down to Winnipeg. In spite of what my hon. friends say, there is provision for the carrying on of the line until it connects with

the northern Ontario section. That connection will make a line from Alberta to the eastern section of Canada, where the greater part of the gas will be required in this country. The suggestion is made that we should not have agreed to loan some $80 million to Trans-Canada Pipe Lines so that it will be able to go ahead and build this year with that financial assistance. I understand they are putting some $15 million-odd into it themselves, and that the government is loaning them some $80 million, which the government gets back next March.


Donald Methuen Fleming: Maybe.


James Garfield Gardiner: My hon. friend says "maybe." That is true of every kind of loan, even the one he borrowed from somebody. There is always a provision under those circumstances under which somebody can come and even take the bed out from under you, if necessary, in order to make you pay it back. There is the same kind of provision in this bill and in this agreement whereby the government, if not paid by next March, then will be compelled, in meeting the situation that has been presented to this house-probably not compelled in the sense that some might use the term, but they would be compelled-in playing fair with the people of this country, to take that line over and see that it is built and kept on this side of the line to deliver gas to eastern Canada.
Having kept it on this side of the line and having seen to it that the gas is put into it, they must see to it that there is law provided in order to control the situation which exists and thus keep the entire control in Canada under the agreements that are talked about.
I wonder sometimes what our friends have in mind when they are talking about them. I was not here yesterday; I was around at some other places. I met three or four people who insisted on talking about this matter to me. After a while I discovered that one of them was an ex-American. He is a Canadian now, a very effective worker in business. The other two happened to be born Canadians, and they all seemed to have much the same opinion. That opinion did not agree with mine in every particular, but I have no hesitation in saying here that I attempted to convince all three of them that they were a little wrong and that the situation could be much better than they thought it was.
I simply recite that in order to say that people are getting opinions, as we discuss this in the house, from what they read in the newspapers; and they recite those opinions. But
Northern Ontario Pipe Line Corporation after they have recited them they say, "We are not sure whether or not we are right. We want to find out." Here is the statement given to this house by the minister on May 14, 1956, as recorded on page 3864 of Hansard:
I repeat that the pipe line will be built wholly within Canadian territory.
That is No. 1. This is No. 2:
It cannot be built without a permit from the board of transport commissioners.
No. 3:
Not a cubic foot of gas can be exported to the United States without a permit from the Canadian government.
No. 4:
Prices to United States customers, by the terms of the export licence itself, cannot be more advantageous to the buyer than those offered to Canadian customers. The entire project is subject to Canadian law. Parliament can at any time legislate whatever further regulations are considered to be in the national interest. In other words, an all-Canadian pipe line, whoever may own it, is completely under Canadian control.
That is the situation until March of next year. If under those conditions the whole project can be financed in such a way as to make it possible for this money to be returned to the people of Canada, then of course Canada is not subsidizing anybody. It is doing what my hon. friend from Greenwood has done for so long as I have known him, and I have known him for quite a while. He has been managing a company that has just bqen doing this kind of thing with the Canadian people. It has loaned them money. It has made them pay interest for the use of the money and then, if they could not pay the interest, sometimes-and very seldom, in the experience I have had with them over many years-they go out and take the man's property. They only did that when it was an absolute necessity, and often in order to carry out something the man wanted to do himself.
With all the experience of these hon. members, more particularly in the official opposition, I find it difficult to understand their attitude. I do not wonder very much that some C.C.F.'ers like the hon. member for Regina City shake their heads. I doubt very much if he ever gave a loan or got one. He cannot be expected to do anything else but shake his head. It is a terrible thing for him for anybody to lend anybody money; and it is a terrible thing when they try to collect it again. However, provision is made in this legislation so that if the company has not paid back the money, then the government can step in; and no one should be better pleased about that than our friends of the
4062	HOUSE OF
Northern Ontario Pipe Line Corporation C.C.F. party, because that is what they would like to see happen now. Provision is in here that it may be done.


Mr. Speaker:: Does the Minister of Agriculture adjourn the debate or has he concluded his speech?


James Garfield Gardiner: No, I think I shall have ten minutes tomorrow.

On motion of Mr. Gardiner the debate was adjourned.



BUSINESS OF THE HOUSE

Walter Edward Harris: Mr. Speaker, we shall continue with this debate tomorrow.


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