1959-05-22

[Stage Direction]
On the orders of the day:
Hon. Paul Marlin (Essex Easl):: Mr. Speaker, I should like to ask the Prime Minister whether, in view of continuing developments of international concern in the Middle East, the government has given or is giving consideration to the establishment of a diplomatic mission in Iraq, supplementing changes that have been made in our missions in other Middle East countries. This question is based on a suggestion I made during the course of the last international affairs debate in this house. I would be grateful to the Prime Minister for an expression of intention.


Right Hon. J. G. Diefenbaker (Prime Minister):: Mr. Speaker, the government is fully conscious of the importance of Iraq in the Middle Eastern scene and is keeping the question of representation constantly under consideration and close review. Regard, of course, must always be had to the priorities which must be established as between this crucial area and other countries and regions which are of importance to Canada and in which we are still unrepresented. However, I know the hon. member has referred to this matter on another occasion, and I recall that the hon. member for Saskatoon has also interested himself in it. Certainly representation in Baghdad is one of those things that are before the department, and has to be decided in the light of future circumstances as well as priorities.


COLOMBO PLAN-INQUIRY AS TO NAMING OF CO-OPERATIVE EXPERT
[Stage Direction]
On the orders of the day:
Mr. Hazen Argue (Assiniboia):: I should
like to direct a question to the Prime Minister based on a press statement attributed to Mr. Ralph S. Staples, president of the cooperative union of Canada, to the effect that Canada's 20-month delay in naming a cooperative expert under the Colombo plan is hampering co-operative development in India. Can the Prime Minister explain the
delay in this appointment and will the appointment be made immediately since, according to Mr. Staples, a co-operative expert is available?


John George Diefenbaker: This matter comes under the Department of Trade and Commerce.


Hon. Gordon Churchill (Minister of Trade and Commerce):: I shall take the question as notice in order to read the article and see what the actual plan is, in order to ascertain whether the article is accurate in its statements.



AIRPORTS


[Stage Direction]
On the orders of the day:
Mr. Erhart Regier (Burnaby-Coquitlam):: Mr. Speaker, I should like to direct a question to the Minister of Transport. Is the minister in a position to report on what progress is being made by the government toward the purchase and/or development of the airport at Dawson Creek?


Hon. George H. Hees (Minister of Transport):: I wish to thank the hon. member for giving me notice of his intention to ask this question. The hon. member for Cariboo has been almost constantly in touch with me about this matter, and I know he will be interested in my answer. On December 10, 1958 I wrote to the mayor of Dawson Creek to explain the basis of government assistance toward capital airport field improvements as well as the possible extent of assistance in respect of the Dawson Creek airport. In my letter I pointed out the specific information we must receive from the city before seeking a parliamentary appropriation. To date I have not received a reply.


Erhart Regier: I understood that negotiations were under way as a result of the city having offered the airport to the government. Is that information right?


George Harris Hees: All I can say is what I have said. We are waiting for the information we have asked from the mayor. When we receive it we wyill be able to proceed.

Inquiries of the Ministry BUSINESS OF THE HOUSE



SEED GRAIN


[Stage Direction]
On the orders of the day:
Mr. W. H. A. Thomas (Middlesex West):: Mr. Speaker, I should like to direct a question to the Minister of Agriculture. Can the minister inform the house when the new legislation concerning seed grain is likely to be introduced?


Hon. D. S. Harkness (Minister of Agriculture):: Mr. Speaker, I cannot say definitely, of course, when it will be introduced. We certainly intend to introduce it, and that will be done as soon as the order paper is cleared of some of the other important matters now found thereon.


Mr. Mcllrailh:: Put it on the order paper so we can see it.



CANADIAN BROADCASTING CORPORATION


[Stage Direction]
On the orders of the day:
Mr. Frank Howard (Skeena):: I should like to direct a question to the Minister of National Revenue; I hope notification was received by him in sufficient time. Can the minister, as the person who reports to parliament for the C.B.C., give the house any indication of the steps which the C.B.C. has taken or intends to take as a result of the protest of the city of Prince Rupert regarding a documentary telecast of that city which the C.B.C. undertook recently?


Hon. George C. Nowlan (Minister of National Revenue):: Mr. Speaker, the hon. member did send notice this morning and as a result I telephoned the C.B.C. and asked for a report in writing on the matter, which report I have just received. I am advised by the C.B.C. that there has been an exchange of correspondence on this matter between the mayor of Prince Rupert and the acting president of the corporation as well as between the corporation's head office and the British Columbia regional office.
The telecast in question was not intended to be an over-all documentary on the city of Prince Rupert but rather a look at one incident which took place in that city, plus contributing factors to the incident. The C.B.C. advises that it plans to film additional and broader program material on Prince Rupert during the coming months.
(Mr. Hees.]


Frank Howard: Can the minister indicate whether the C.B.C. in its correspondence has offered an apology to the city for this telecast?


George Clyde Nowlan: I have no further information on the matter than that given to me in writing by the C.B.C.



HOUSING


[Stage Direction]
On the orders of the day:
Paul Joseph James Martin: May I ask
the Leader of the Opposition-


Some hon. Members:: Oh, oh.


Paul Joseph James Martin: I am so used to receiving wise direction from the Leader of the Opposition that I confused him this morning with the leader of the house. The Leader of the Opposition asked the Minister of Public Works yesterday whether or not it was true that evictions of certain tenants of Central Mortgage and Housing Corporation homes in Sarnia were taking place. The Minister of Public Works promised an answer today. Is he in a position to answer?


Hon. Howard C. Green (Minister of Public Works):: Yes, I was just proposing to answer that question. There have been no eviction notices whatever given in Sarnia. Certain notices to terminate tenancies have been given, which of course, as the hon. member knows, is quite a different thing. Central Mortgage and Housing Corporation is prepared to deal with individual cases on the merits of each case, and where there is difficulty I believe some arrangement can be made with the union for a guarantee of the rent in such case. Negotiations have been under way and are continuing in an effort to work out the problem.


Hazen Robert Argue: May I ask
a supplementary question. Did I understand the minister to say that Central Mortgage and Housing Corporation is prepared to accept the undertaking of the union that it will guarantee the rent after the strike is over?


Howard Charles Green: In individual cases, where there are problems in connection with the payment of rent, it has been the practice to make arrangements with the union. I believe that can be done in Sarnia. I am not referring to an over-all, blanket guarantee of all rentals.


Hazen Robert Argue: Would this arrangement also be applied to the tenancy cases, to the people who are renting?


Howard Charles Green: I am only speaking of the rental cases. There are no arrears of payments under mortgages.



POLYMER CORPORATION


[Stage Direction]
On the orders of the day:
Mr. J. W. Murphy (Lambton West):: should like to ask the Minister of Labour if he can bring the house up to date on the Polymer strike.


Hon. Michael Starr (Minister of Labour):: Mr. Speaker, meetings have been held in Toronto between the company and the union with Mr. Taylor as mediator. The latest report, as of last night, indicates that progress is being made. The talks will adjourn to Sarnia, where they will continue on Monday.



INDUSTRY


[Stage Direction]
On the orders of the day:
Hon. Paul Hellyer (Trinity):: I should like to direct a question to the Minister of Trade and Commerce. Would the minister care to comment on a newspaper report to the effect that the Ford Motor Company of Dearborn, Michigan, is preparing a $150 million bid to increase the extent of its ownership of the Ford Motor Company of Canada?


Gordon Minto Churchill: 1 have no comment to make, Mr. Speaker.



AGRICULTURE


[Stage Direction]
On the orders of the day:
Mr. E. W. Brunsden (Medicine Hat):: I should like to direct a question to the Minister of Agriculture. Having in mind the tremendous help to the Canadian sheep industry resulting from the support price on wool last year, is the minister prepared to say now whether or not that policy will be continued for the 1959 wool clip?


Douglas Scott Harkness: In reply to the hon. member's question I am happy to announce that wool will be supported this year on approximately the same price basis as last year. Price support for the 1958 clip was calculated on the basis of 60 cents per pound for western range choice, half-blood staple, f.o.b. Toronto. The support price for the 1959 wool clip will be
Inquiries of the Ministry 60 cents per pound for the average wholesale price of western range choice, half-blood staple, and eastern domestic, quarter-blood staple combined. The prescribed price will be approximately 110.5 per cent of the 10-year average of the two grades, basis f.o.b. Toronto, which is a slightly higher percentage than for the 1958 clip, for which the prescribed price was 110 per cent of the base price.
The support price for the 1958 clip resulted in a payment by the stabilization board of 28 cents per pound on all eligible graded wool. The payments have not been entirely completed, but will amount to more than $1.5 million. The relatively high prescribed price of 110.5 per cent of the 10-year average for wool is considered necessary and justified, and is designed to arrest the decline in and provide some incentive for the Canadian sheep industry.



UNEMPLOYMENT ASSISTANCE


[Stage Direction]
On the orders of the day:
Mr. Augusiin Brassard (Lapointe):: Mr. Speaker, I should like to direct a question to the Minister of National Health and Welfare, but in view of his absence may I direct it to the Prime Minister. My question arises out of a statement which was made yesterday by Mr. D. A. Hanson, retiring president of the Montreal council of social agencies. Speaking about unemployed people in Quebec he said last night that this is a "disgraceful situation in a rich country". My question is this. Will the government initiate some discussion with the provincial government with a view to trying to pursuade them to accept unemployment assistance from the federal government?


John George Diefenbaker: Mr. Speaker, such a question should be directed to the appropriate government. I saw the article in question. I would say to the hon. gentleman that if he would apply some of his own advice to that provincial government, he himself being a member from the province of Quebec, no doubt it would receive some consideration.



INQUIRIES FOR RETURNS

[Stage Direction]
On the orders of the day:
Hon. J. W. Pickersgill (Bonavisfa-Twil-lingate):: Mr. Speaker, I should like to ask the Minister of Finance how soon he hopes to be in a position to table the return to a question that was passed as an order for return some time ago, asking for federal payments to certain provinces.

Inquiries of the Ministry
Hon. Donald M. Fleming (Minister of
Finance): That is not a return of the Department of Finance, Mr. Speaker. That was a return that was ordered by the house and consequently, in the ordinary course, will be tabled by the Secretary of State.


John Whitney Pickersgill: Then, Mr. Speaker, I should be delighted to address the same question to the Secretary of State.


An hon. Member:: As soon as possible.


John Whitney Pickersgill: I wonder whether the Secretary of State is going to reply to the question.


Hon. Henri Courtemanche (Secreiary of State):: Mr. Speaker, I will inquire from my department and will let the hon. member know.


John Whitney Pickersgill: Mr. Speaker, I wonder if I could ask the Prime Minister, while I am asking for returns, how soon he hopes to be in a position to table the other return about Newfoundland with respect to term 29?


Right Hon.   J.@: As a matter of fact, Mr. Speaker, I thought that had been done. There were two returns to be brought down. They are ready. One was brought down but apparently the other one was not.


John Whitney Pickersgill: Perhaps I could ask the Minister of Justice when he hopes to be in a position to table the return in response to a motion that was passed concerning his department.


Hon. E. D. Fulton (Minister of Justice):: As
soon as possible, Mr. Speaker.



SHIPPING


[Stage Direction]
On the orders of the day:
Mr. C. W. Carter (Burin-Burgeo):: Mr. Speaker, may I direct a question to the Minister of Transport. I regret not having been able to give the minister notice, but if he requires notice perhaps he could answer on Monday. Have the contracts yet been awarded for the construction of the two coastal vessels for the C.N.R. service in Newfoundland?


George Harris Hees: I shall be glad to check into that matter, Mr. Speaker.


Chesley William Carter: I have a supplementary question. At the same time would the minister inform the house what firms, if any, have succeeded in getting the contracts, and what the contract price was for each ship?


Mr. Fleming (Eglinton):: Order paper.


George Harris Hees: I would think that question would be more appropriately an order paper question.



NATIONAL ENERGY BOARD


Gordon Minto Churchill: the second reading of Bill No. C-49, to provide for the establishment of a national energy board.
He said: In the discussion on the resolution prior to the introduction of Bill C-49, all who spoke appeared to be agreed upon the fundamental purpose of the measure, which is to establish a national energy board with a view to assuring to the people of Canada the best use of the energy resources of this country. Now that hon. members have the bill before them and as the discussion develops, I hope they will agree that the principles underlying the bill and the means by which we seek to apply those principles are also generally acceptable. Although the bill comprises 101 sections, it is very largely based on the relevant sections of the Pipe Lines Act and on the Exportation of Power and Fluids and Importation of Gas Act. What is new is important but not extensive.
It is now my intention to explain the main functions of the board as set forth in the bill and as contemplated by the government; to compare some aspects of the bill with relevant recommendations in the first report of the royal commission on energy, and to draw the attention of the house to certain limitations upon the powers of the board.
I would first point out that the bill will provide simpler machinery for dealing with matters relating to oil and gas and the pipe lines to transport them than has existed in the past, and also simpler than that contemplated by the royal commission on energy. In the past the board of transport commissioners has had certain responsibilities in respect of the construction and operation of pipe lines as set forth in the Pipe Lines Act, while the Minister of Trade and Commerce has had certain responsibilities under the Exportation of Power and Fluids and the Importation of Gas Act.
Procedures under the two acts have been separate and not entirely parallel. In the case of gas exports involving pipe line construction, applicants have had to satisfy two different agencies. The effect of the Borden commission's recommendation would have been to require applicants seeking permission to build pipe lines coming under the jurisdiction of parliament to satisfy two different

bodies, the national energy board and the board of transport commissioners. The bill now before you will replace the Pipe Lines Act and the Exportation of Power and Fluids and the Importation of Gas Act. It will concentrate within the single agency of the national energy board the functions formerly carried out by the board of transport commissioners and those carried out by the Minister of Trade and Commerce in respect to import and export licences for gas and export licences for electrical power. As in the case of the Pipe Lines Act, certain sections of the Railway Act will be incorporated in this bill by reference.
So much jurisprudence has grown up concerning these sections and so many rights have been created through their application that it would have been a most complex and time-consuming task, delaying the presentation of this legislation, to restate them afresh with any confidence that the results would be satisfactory and that existing rights would be protected. Notwithstanding this qualification, I suggest that this bill should commend itself to the house on the ground that it will simplify what has been a complicated and confusing statutory situation and streamline the procedures which must be followed by companies wishing to construct pipe lines.
Turning now to the functions which the bill will establish for the national energy board, I would first direct attention to the board's advisory responsibilities. They are the functions by which the board will be kept informed of changing circumstances and requirements and will thus be enabled to give expert advice to the government. The need for a central body charged with responsibility for research and comparative study of the various forms and sources of energy has long been apparent. Some useful work has been done in the past, both by ad hoc bodies such as the Gordon commission and the Borden commission and, in various special fields, on a more continuing basis by various departments and agencies. However, most energy sources are to some degree and in some circumstances interchangeable, and in some fuel applications there is intense competition.
The balance between the various energy sources has changed very markedly over recent years, and we may expect it will continue to change in the future. Such changes have important implications for national policy, and it is therefore highly desirable that a continuing and consistent study of energy matters be carried forward by a competent body.
In framing the advisory functions of the board we have had in mind, among other
National Energy Board things, certain recommendations of the Borden commission, in particular recommendation 20. Since the language of that recommendation appeared open to the interpretation of requiring intrusion upon matters which are under the jurisdiction of the provinces, it is made clear that the responsibilities of the board for making continuing studies and for making recommendations to the minister are to be limited to those matters over which parliament has jurisdiction.
Also, whereas the intent of recommendation 20(b) was apparently that the national energy board should assist other agencies-and this is of course a laudable objective-it was considered by the government to be undesirable to allow the board on its own initiative to proffer advice and recommendations to any minister or any federal agency, since the indiscriminate use of such authority could give rise to confusion and uncertainty in the formulation of government policy. The bill therefore requires that requests for assistance from the board be channelled through the Minister of Trade and Commerce.
Under the advisory functions provision has been made in general terms for arrangements such as those specified in recommendation 29 of the Borden commission:
That, if possible, reciprocal arrangements be made with the United States of America for a commissioner of the federal power commission of that country to sit as an ad hoc observer, but without vote, when the national energy board is considering any application for a licence for the export of natural gas from Canada to the United States or for the import of natural gas into Canada; and for a member of the national energy board to sit as an ad hoc observer, but without vote, when the federal power commission is considering the correlative application for the licence to import from or export to Canada such natural gas.
The objective which the Borden commission appears to have had in mind was the desirable one of establishing liaison with the federal power commission in order to avoid the misunderstandings and deadlocks which might all too easily arise in the matter of the export and import of natural gas. We desire that a basis of effective co-operation in satisfying our respective national interests be established with the federal power commission, but the arrangements suggested by the Borden commission raise questions for both countries which may have implications not fully foreseen by the commission. Both the federal power act and the natural gas act might have to be amended by congress to enable the federal power commission to participate in such arrangements.
The federal power commission is, we understand, required to conduct its deliberations, as contrasted with its hearings, in private without any interested party being present.
3924	HOUSE OF
National Energy Board From another viewpoint, it would be embarrassing for either government to have the regulatory agency of the other government make a decision adverse to its interests when a member of its own regulatory body had participated in the events leading up to such a decision. For these reasons the bill will give the board a general power to recommend the establishment of co-operative relationships with other agencies. Under this power a satisfactory relationship will, we are sure, be worked out and be given appropriate recognition by such action of the two parent governments as may be necessary. The best solution will have to be found in the light of experience and the possibilities that exist for such co-operation.
Perhaps this would be an appropriate point to mention that the government has not accepted the Borden commission's recommendation 28, "that a member of the national energy board be appointed in due time to the Canadian section of the international joint commission." The recommendation appears to be inconsistent with the principle that a quasi-judicial body such as the latter should not have as a member representative of a party which may be directly interested in proceedings before it. Presumably such a member would be expected to disqualify himself in international joint commission cases in which the national energy board had such an interest, a step which would make the dual membership arrangement sterile.
To revert to the research and advisory functions of the board as set forth in the bill, hon. members will have noted that the board will be expected to avoid unnecessary duplication of existing research facilities and sources of information within the government of Canada. Conversely, where such information is not readily available from these or other sources of information, the board will be enabled to secure any information it needs by exercising the powers of commissioners under part I of the Inquiries Act. The relevant paragraph of the Inquiries Act is section 4, which reads:
The commissioners have the power of summoning before them any witnesses, and of requiring them to give evidence on oath, or on solemn affirmation if they are persons entitled to affirm in civil matters, and orally or in writing, and to produce such documents and things as the commissioners deem requisite to the full investigation of the matters into which they are appointed to examine.
This power should, in the view of the government, be given the board to enable it to fill certain gaps in the information available to it through other channels. For instance, section 15 of the Statistics Act prohibits the release by the dominion bureau of statistics of figures relating to individual companies, with the exception of carriers and public


utilities. It will be recalled that the Borden commission in support of its recommendation 19, that the importation into Canada of crude oil and petroleum products be made subject to licence granted by the national energy board, argued that such licensing was required-
-to provide the government of Canada, through the national energy board, with basic information respecting the origins, cost, transportation charges and laid-down cost in Canada of crude oil and petroleum products-
Licensing appears to be an inappropriate method for obtaining the desired information. The preferable method of ensuring that necessary information can be obtained is through the powers conferred by the Inquiries Act. The exercise of these powers is restricted to the advisory functions of the board.
The next broad function of the board would be the exercise of control over the construction and operation of pipe lines for the transmission of hydrocarbons and the issuance of certificates of convenience and necessity to authorize the construction and operation of such pipe lines. This part of the bill is drawn very substantially from the present Pipe Lines Act. The national energy board would, however, replace the board of transport commissioners as the responsible agency.
It is here that one of the important differences exists between this bill and the recommendations of the Borden report. Recommendation 15 of that report was, in essence, that anyone wishing to build an oil or gas pipe line subject to the jurisdiction of the parliament of Canada must obtain a certificate from the national energy board; recommendation 32 was that no application for leave to construct a pipe line should be entertained by the board of transport commissioners unless the applicant had such a certificate from the national energy board. The board of transport commissioners would also regulate oil and gas pipe line transmission rates.
The Borden commission did not believe that any purpose would be served by transferring these functions to the national energy board. Transfer of the board of transport commissioners' functions would, in the view of the commission, not only mean an unjustified duplication of administrative machinery and personnel but would ignore the whole of the experience in this type of work now embodied in the board of transport commissioners. In the commission's opinion, as expressed in the report-
-the problem involved in assessing Canada's energy resources and needs and in relating these and the implications of other energy studies-

Which the commission has recommended should be carried out by the national energy board:
*-to the issuance or withholding of licences or certificates of public convenience are distinct from the regulatory function which the commission has recommended should be carried out by the board of transport commissioners with respect to oil and gas pipe line companies.
In practice any duplication of administrative machinery and personnel would be more apparent than real. The personnel of the board of transport commissioners and its staff who are familiar with the oil and gas industry are not as numerous as the commission may have thought. The board of transport commissioners has had one engineer employed full time on pipe line work, one engineer part time and one stenographer. Changes have recently occurred in the board itself due to resignations and retirements. Consequently in transferring these functions to the energy board there would seem to be little danger either of duplicating personnel or of losing valuable experience.
On the other hand, to ask two boards to deal with somewhat different but closely related aspects of pipe line matters would certainly invite duplication and confusion, both within the government service and among applicants who would have to appear before both boards, and who would find difficulty in satisfying either board in the absence of decision by the other. We do not wish to add to the administrative burden on industry in submitting applications.
Under the present bill, therefore, the board of transport commissioners will have no power over pipe lines, except in so far as its permission is required for the crossing of railways by pipe lines. The energy board will issue certificates of public convenience and necessity which at the same time will be "leave to construct" orders, in the sense in which that term has been used by the board of transport commissioners. The energy board will also issue "leave to open" orders. That is, it will discharge the functions now held by the board of transport commissioners as regards the public safety aspect of pipe line regulations. It will also regulate the transmission charges of both oil and gas pipe lines, a function in which the board of transport commissioners has had no experience but which the Borden commission recommended it should assume.
Although it was not so recommended by the Borden commission, all certificates issued by the energy board will be subject to the approval of the governor in council, as will any regulations made by the board governing their issuance. New major pipe line projects appear likely to raise questions of national
National Energy Board policy so important that decision on them should be reviewed in this way.
It will be noted that certificates are to be issued only for pipe lines transmitting hydrocarbons. The by-products of the processing of gas, mentioned in recommendation 15 of the Borden report, will consequently remain unregulated as regards transmission by pipe lines unless they fall within the definition of hydrocarbons. Sulphur, the chief by-product, which is not a hydrocarbon, is neither a form nor a source of energy, and consequently lies outside the area of reference of this legislation.
In addition to certificates of public convenience and necessity, the Borden commission suggested that licences also be required. Recommendation 16 reads as follows:
That the national energy board be authorized to require any company engaged in the transmission across provincial boundaries by pipe line of crude oil and petroleum products and natural gas and byproducts thereof, to obtain a licence from such board.
Recommendation 20(f)(ii) suggested that the board should have authority to grant, revoke or suspend such licences, upon such terms and subject to such conditions, if any, that the board might decide. Recommendation 21(c) suggested that among the factors to be considered in issuing such licences should be: (i) the direction of movement and destination of the contents of the pipe line; and, (ii) the volume proposed to be transmitted. The licensing of interprovincial oil or gas movements was included since, in the commission's view, and again I quote the commission's words-
"*-control of such matters as the volume so transmitted. the direction of flow and the destination of the oil and gas within Canada is essential to ensure that the public interest can be protected in the effective use of these resources".
Licensing would not be on an annual basis, but the original licence would be re-examined whenever changes in the operation of a line were to be made with regard to direction of flow or substantial increases in volume.
None of these recommendations has been implemented in this bill. The view has been taken that the direction of movement, as well as the initial and ultimate capacity of any such pipe line, would have been specified in the application for a certificate of public convenience and necessity. Any change of direction, or capacity beyond the specified limits, would require application for a further certificate, so for these reasons a licence would be superfluous.
An extension of a pipe line would also require an application for an additional certificate. A change in the proportion of throughput delivered to various destinations along
3926	HOUSE OF
National Energy Board the certificated route would in most circumstances result from normal business considerations, and would hardly require a licence for any reason of public policy. There is intense competition among the various fuels and energy sources; therefore there is a strong impetus for a pipe line company to maximize its volume and minimize its unit costs in all markets in which it can compete.
Service to new markets by construction of new sales laterals would involve either (1) construction of laterals contemplated in the original application and therefore covered by the original certificate; (2) construction of long new laterals not contemplated in the original application and therefore requiring a new certificate; (3) construction of short laterals coming within an exemption procedure provided in the bill; or, (4) extension of service by direction of the board, also as provided in the bill. None of these cases would appear to require a licence, as distinct from the required certificate.
Finally, the volume to be transmitted would either be within the capacity originally certificated, within which range business conditions and decisions would appear to be the effective determinants, rather than the licensing procedure; or major increases in volume would require major looping, which would require a further certificate.
There is an historical justification for export licences, in that electricity and gas exports have been dealt with under earlier legislation in order to ensure that these energy forms are not alienated unless they are clearly surplus to present and foreseeable Canadian requirements. An export licence is also required to satisfy the requirements of the federal power commission as to the availability of gas to fill export contracts. However, the considerations affecting the public interest in the operation of pipe lines within Canada are different; non-discrimination, non-exploitation of quasi-monopoly positions, avoidance of unnecessary and uneconomic duplication of facilities, economic access to energy resources, and the public safety are the kinds of consideration that underlie control of domestic pipe lines. These considerations are taken into account and dealt with in the bill without introducing a separate licensing procedure.
There is provision in the bill to ensure that a certificate may be suspended or revoked if its terms and conditions are violated or if the operation of the pipe line is conducted in a manner not in compliance with the act, the regulations thereunder, or any lawful order of the board. Finally, the bill provides that a pipe line company may not, without leave of the board, sell, lease, amalgamate or abandon its facilities; a certificate and the


privileges and immunities provided by it, would be transferable only by leave of the board.
The experience of the federal power commission in the United States is that it is unnecessary to issue an operating licence as well as a certificate of public convenience and necessity. In fact the order of the federal power commission approving an application is itself regarded as the certificate of convenience and necessity and is the only authority a pipe line company requires to construct, maintain and operate the facilities specified. There is a separate requirement of a presidential permit to export or import gas, comparable to the proposal in this bill that there continue to be in Canada a separate procedure and licence required in respect of export and import of gas.
In our view no useful purpose will be served by requiring a pipe line company to obtain a licence to operate in addition to a certificate of public convenience and necessity, leave to open and any export or import permit required. To set up two requirements instead of one would tend to add to administrative work without serving any useful purpose. It would seem more or less immaterial whether the basic permission is described as a certificate of public convenience and necessity or as a licence for which the basic consideration would be the public convenience and necessity. By whatever name, one permission should suffice for the purpose specified.
In addition to the certificate procedure for pipe lines which I have been discussing, the bill provides a parallel, though more briefly outlined, set of arrangements for international electrical power lines. Power export licences have been issued in the past under the Exportation of Power and Fluids and Importations of Gas Act. The construction of facilities to export power was subject to the same licensing arrangement. What is here intended is to improve the consistency of the statutory requirements by applying the certificate procedure to the construction of the physical facilities to export power, in parallel with the procedure applied to the construction of pipe lines for the export of gas. The export of power will require a licence as before, but it is now to be issued through the same agency and under the same statute that will govern pipe line construction. It is not intended to impose any regulation upon the construction of interprovincial power lines, since most large systems are either provincially owned or under close provincial control and are merely interconnected one with the other.
I come now, Mr. Speaker, to the very important question of the criteria which the bill

will require the board to apply in dealing with applications for certificates of public convenience and necessity for pipe lines and international power lines. In considering what should be specified the government was mindful on the one hand of the possibility that a detailed list of criteria might result in some danger of restrictive interpretation by the courts if they were to take the view that what is not specified may not be taken into account; on the other hand, a too general description might afford insufficient guidance to the board.
The bill will enable the board to consider all such matters as appear to it to be relevant to the question of public convenience and necessity, while at the same time suggesting to the board that it may take into account certain more particular considerations. In wording these considerations we had regard to section 12 (3) of the Pipe Lines Act, recommendation 21 of the Borden report, section 15 (3) of the Aeronautics Act and a set of 24 points which the board of transport commissioners has embodied in a memorandum for its own guidance and for the guidance of applicants in leave to construct proceedings before it.
The part of the bill which has to do with traffic, tolls and tariffs lies at the heart of the legislation and is perhaps the most important single new feature. The Pipe Lines Act provided for the control of the traffic, tolls and tariffs of oil pipe line companies once such companies had been declared by the board of transport commissioners to be common carriers. However, although the major oil pipe lines have in fact acted as common carriers they were never declared by the board to be such, and accordingly their traffic, tolls and tariffs have never been controlled. The charges of gas transmission pipe lines have not been subject to any control.
Gas prices at the point of production are regarded by the provinces of origin as being under their jurisdiction, and gas prices to the ultimate consumer are controlled by the province in which consumption takes place. The government of Canada has had the power to exercise control over the price of gas being exported under the Exportation of Power and Fluids and Importation of Gas Act. It has long been felt by many people, including the members of this government, that the gap in regulation of the price of gas between the point of first sale and the point of sale to distributors in the area of consumption was a gap which in the public interest should be closed.
The case for regulation of gas transmission charges is fairly straightforward. The commodity which gas transmission companies provide is in competition with other energy
National Energy Board sources, so they are not so clearly in the position of a monoplistic public utility as are, for example, water services. However, few if any of their customers can turn to another source of gas, and if they do turn to another energy source they incur the expense of installing different equipment. The gas transmission companies are therefore in a partial monopoly position, and the public interest requires that they should demonstrate that their rates are not such as to constitute exploitation of that quasi-monopoly position.
At the same time, since they must compete at the point of origin for supplies of gas and compete at the point of sale with other fuels and energy sources, there is a substantial element of risk for gas transmission companies. For this reason they must not be prevented by regulatory action from earning a return sufficient to attract capital, nor must management be deprived of the normal incentive to improve efficiency.
We hold the same view about oil pipe line operations. Here there is the added factor that it is more feasible for the pipe line customers to obtain their oil from other sources. Also, the competition between oil and other fuels is perhaps more intense than the competition faced by gas, and the results of oil pipe line operations are accordingly more subject to fluctuation. Some oil producers can find an outlet to market through only one pipe line, and some refineries are similarly dependent on one pipe line. Oil pipe lines therefore have some of the characteristics of monopoly, and the argument for some regulation in the public interest therefore applies.
Neither in the case of oil pipe lines nor in the case of gas pipe lines will the public gain anything if regulation is so restrictive as to put the pipe lines out of business, or discourage their normal development, or impede the building of new pipe lines to serve new or expanding markets, or restrict the essential work of exploration and discovery of further reserves of oil and gas. Our objective, therefore, is to find the means and level of regulation that will adequately protect the public interest, and particularly the interest of the consumer, while maintaining healthy conditions for the pipe line industry, the oil and gas producing industries and the industries distributing oil products and gas for consumption.
The bill does not specify a formula which the board is to apply in examining and, if need be, in setting tolls and tariffs. On the contrary, we are convinced that it would be an error to crystallize in statutory form a single formula to apply to all the companies in either the oil pipe line or gas pipe line industries. Certainly no single formula would

National Energy Board apply to the two industries, where the nature of business and the inherent risks are so different. The circumstances of individual companies differ widely one from another, and the circumstances of the industries as a whole change so substantially over time that any single rigid formula would be found inappropriate almost before it could be applied.
What is needed here is flexibility combined with an understanding of the industries involved and of the public interests affected. We hope to provide this through a board of competent men, served by well trained and experienced staff, appreciative of the public interest and of the needs and problems of the industries concerned.
This board will, I am sure, in due course draw up and publish a set of rules which will provide a firm framework for rates. It would, however, be unfair to the proposed board, to the industries and to the public to establish at the outset some untested statutory formula which would bind the hands of the board for the future.
This explains why there is not in the bill any reference to the shareholders' equity formula proposed by the Borden commission in its recommendation 12. In fairness to the Borden commission I should like to draw attention at this juncture to a paragraph in its report which has perhaps been overlooked by some of those who have criticized that recommendation. I quote from the report, page 41:
We have carefully considered whether the proposed legislation should fix the rate of return to be allowed on the shareholders' equity and whether this rate might be different in the case of oil or gas pipe lines or, alternatively, whether these matters should be left to the discretion of the Board of Transport Commissioners for Canada. We have concluded that it is preferable to allow the board to exercise its discretion in this regard, recognizing that in so doing it will strive to exercise its powers in a fair manner and authorize rates, and thus a level of earnings, having regard to the circumstances of each case, sufficient to attract the necessary capital. The flexibility which will obtain under such a plan is, in our view, particularly desirable.
Gas transmission pipe line companies buy gas outright at the point of production or processing and sell it outright to their customers. In this they are unlike the oil pipe line companies which in general carry oil owned by either producers or purchasers for a toll which is part of a published tariff. It is not the practice in peacetime to control prices of commodities in internal trade, but it is normal to control transportation or transmission charges, as in the case of railway freight rates. The bill therefore provides for treating as a toll a certain proportion of the difference

between the price paid by the transmission company for the gas and the price charged by the company to its customers. The fixing of this proportion is to be left to the board.
I wish to turn now to the question of exports and imports. The provisions of the bill in this regard will replace the corresponding provisions of the Exportation of Power and Fluids and Importation of Gas Act, and differ from the latter in several important respects. First, export and import licensing will in future be administered by the national energy board rather than being dealt with by the Minister of Trade and Commerce. Second, the statutory provision for the imposition of export duties on electric power laid down in section 4 of the existing act has been omitted from this bill and taken up instead in the Excise Tax Act. Third, the export of oil is no longer to be licensed unless a proclamation to that effect is issued by the governor in council. The licensing of oil imports, which is not regulated under present legislation, may similarly be instituted by proclamation.
It will be noted that the term "fluids" dating back to the original act in 1907, has been omitted from this bill to be replaced by gas and, by proclamation, hydrocarbons which include gas and oil. "Fluids" were defined as gas, oil, water or any other fluids whether liquid or gaseous, that originate or are produced or recovered in Canada. While the export of fluids was defined as their transmission through pipe lines and other like contrivances, the power to license exports of water was not called into use until 1955, when it was used in reference to a power project on the Arrow lakes on the grounds that the weir involved was a "like contrivance". The passing of the International Rivers Improvement Act later that year, however, obviated the need for further control of this sort. Two other fluids, salt in solution and wood pulp in aqueous suspension, were also caught by this definition and brought under licence. Since the intent of this bill is to deal with energy matters and not the incidental use of water as a transporting agent for non-energy commodities, only the export and import of gas, and by proclamation oil, and the export of electric power will be controlled by the proposed legislation.
Perhaps the most important difference is that export and import licences will in future be issued only after public hearing. It has long been a just cause of public complaint that the existing procedure provided no means by which interested parties could appear, be heard, and examine applicants for an export licence, and that the Minister of Trade and Commerce has been under no obligation to state what considerations he had before him

in approving or denying a licence. The public hearing process, which in the bill is provided for in that part which deals with the organization of the board, will at once afford better protection to the public interest in these important decisions, and a more satisfactory way of dealing with applications from the point of view of the government and of the various parties concerned.
It is intended that the governor in council's approval of export and import licences, and of their cancellation or suspension, will be required. This will be expressed in the regulations. One such regulation will be that no licence for the export of gas or power or the import of gas will be valid without the approval of the governor in council. The reason for this approach is that in the event it is decided to put into effect the proposed permissive power to license imports and exports of oil, it would be undesirable to make every licence for every import of oil affected dependent upon approval of the governor in council.
The term of export licences is not to exceed 25 years. This upper limit is regarded as the term likely to be required to enable financing of gas export pipe lines. It is intended to continue the policy of limiting electric power export licences to one year, unless exceptional circumstances justify a longer term.
Before issuing an export licence for gas or electric power, the board would have to be satisfied on the reasonableness of the price to be obtained. The attempt to reconcile exports and domestic price which was expressed in regulation 9 under the Exportation of Power and Fluids and Importation of Gas Act has proved inadequate, since the conditions specified were found never to exist. As in the case of rate regulation, it was the conclusion of the government that any rigid statutory formula would probably be more harmful than helpful. The price and other considerations which the board is to apply to export applications are therefore expressed broadly. The principles will be that quantities to be exported should not exceed the surplus remaining of proven and potential reserves after allowance for reasonably foreseeable Canadian requirements, and that the export price should be just and reasonable in relation to the public interest.
The matter of import and export restrictions with regard to oil requires some particular attention. The measure now before us provides that the application of that part of the bill dealing with exports and imports may, by proclamation of the governor in council, be extended to oil.
National Energy Board
I shall first deal briefly with exports of oil. Under the Exportation of Power and Fluids and Importation of Gas Act, exports of oil require a licence, which in the case of oil pipe lines has been freely granted on an annual basis. So far as I can determine, the licensing requirement was applied by an analogy with the reasons for regulating exports of power and gas. The analogy is not valid, because oil, unlike power and gas, is a commodity moving fairly freely in world trade, moving from a variety of sources to a given market or from a given source to a variety of markets, and moving by various means of transport, of which pipe lines and water-borne tankers are the most economical.
Gas and power, by contrast, move by fixed channels under long term contracts at the source and long term contracts in the area of consumption, so that once committed to a market they cannot be withdrawn without hardship. A gas export service once established must continue for a substantial period to enable the enterprise to attract capital in the first place, and to permit amortization of the necessary investment. Interruption of such export service is apt to be a source of international friction. Hence there is a clear case for being cautious about permitting exports of any power or gas which we are likely to require ourselves, but with respect to oil these conditions do not apply.
As in the case of other important products moving in trade, our interest and the interest of the industry is to sell oil where we can, either within or outside of Canada. Therefore we feel there is no requirement of national policy to be served at present by licensing exports of oil. On the contrary, we have only recently been successful in obtaining exemption from the restrictions imposed by the United States on oil imports, and it would ill accord with the treatment we are now receiving from the United States to establish new restrictions on the export of oil.
The case with respect to licensing of imports of oil is different and more complicated. I do not propose to argue that case fully today. It would be premature to do so until the second report of the Borden commission in respect of this matter has been received and considered.
There are, however, certain obvious considerations to be kept in mind. I referred a moment ago to the recently announced exemption by the United States from its import controls of crude oil, unfinished oils and petroleum products moving into the United States by pipe line, rail or motor carrier. Canada is the principal beneficiary of this arrangement, which will improve our exports of crude oil and will also restore the less

National Energy Board important but still significant export trade we have been building up in refined products and in liquefied petroleum gases. In the light of this favourable outcome of our negotiations with the United States, it would seem unwise at the present moment to take any action by way of import controls which might give rise to misunderstanding and possibly call the present arrangement into question.
Some persons have recently been inclined to minimize the importance of these United States exemptions. Actually the prospects for increasing our exports of oil are very encouraging. In the Puget sound market, where there are three large refineries which are logical customers for Canadian oil moving through the Trans Mountain pipe line, the July purchases nominated by General Petroleums will, I understand, rise from 15,000 barrels per day to 27,000 barrels per day; those of Shell from 12,000 to 20,000 barrels per day, and those of the Texas Company from nothing to 8,000 barrels per day, a total increase from 27,000 barrels to 55,000 barrels per day or an almost immediate doubling of our sales in this natural export market for Canadian oil.
There are many other considerations important to this question of imported oil, and particularly its relevance to our general commercial policy and trade relations with other countries. The government has been weighing these considerations, and will continue to do so.
Last Monday evening the hon. member for Ottawa West (Mr. Mcllraith) referred to certain doubts he had about the proposal to give the governor in council power to impose by proclamation licensing requirements on the imports and exports of oil. His reservations were on two scores. The first-and these are his words which are to be found at page 3783 of Hansard-was this:
-that this is a matter of such importance and of such a nature that it should be dealt with by parliament and not be taken to the governor in council by way of arbitrary authority.
His second point-and again I quote his own words-was this:
-so long as that power is contained in the legislation, then we are going to have a situation where a threat is going to be hanging over the heads of the industry at large that the board will interfere by way of regulation, and that is damaging because of recommendation 19 of the Borden commission report.
I would assure the hon. member and the house that these points have indeed been taken into account by the government in preparing the bill, and that only after careful thought have we come to the conclusion that in the present circumstances the merits of

the course we propose must outweigh the disadvantages to which he has referred.
He is quite right in thinking that some uncertainty will remain but it is not, however, the threat of frivolous or unnecessary government intervention. It is the threat that the present world-wide conditions of surplus supply which exist in the oil industry will result in so great a decline in world prices, and such great pressure of supplies of oil offered at distress prices, that normal marketing arrangements may be overwhelmed. If this were to happen, very serious injury could be caused to the oil producing and processing industries in this country.
It is against this contingency that we consider it necessary to take the power under discussion. If the need arose it would in all probability arise quickly, and would require quick action to avert serious disruption. For this reason it is proposed to make the power applicable by proclamation.


George James McIlraith: Would the minister permit a question just at this point for purposes of clarification?


Gordon Minto Churchill: Yes.


George James McIlraith: In dealing with the point I raised at the resolution stage, would he comment on the (bl part of recommendation 19 of the Borden commission report, in relation to the point with which he is now dealing?


Gordon Minto Churchill: In view of the length of the (b) part of recommendation 19, after the hon. member has had an opportunity of contributing to the discussion and when we reach the conclusion of the debate I might comment on that point and others that he may raise.
I should now like to deal with the limitations upon the authority of the board. The bill does not give the board any power to regulate coal, atomic energy or uranium, or matters having to do with electrical power except for export of such power. Neither does the bill propose any alteration of the arrangements under which our negotiations with the United States for a mutually satisfactory program of development of the Columbia river basin are being conducted, though I am sure those who are now involved in those negotiations on the Canadian side will look to the board when it is established for co-operation and assistance. While the board's advisory functions require that it be free to study any aspect of energy, we do not believe it would be profitable under present circumstances to disrupt the existing agencies involved in these related fields.

Great care has been taken to ensure that in its vital actions, particularly as to certificates of public convenience and necessity, import and export licences, and the establishment of regulations, the board must have the approval of the governor in council. This is intended to ensure that the decisions of the board which affect the national interest are consistent with general government policy. At the same time we have sought to assure the security of tenure and independence of the board and its staff. This balance between independence and responsibility to parliament is always somewhat difficult to achieve; we believe that here we have proposed a satisfactory equilibrium.
While we have sought to arrange that the findings of the board shall be final, as should be the factual findings of any expert board, we have been careful to preserve the right of the citizen to appeal to the highest courts of the land on matters of law and jurisdiction. Also, I would emphasize again that we have sought with great care to avoid any interference with the proper jurisdiction of the provinces.
Throughout this statement I have indicated our desire to strike a balance in discharging our responsibilities between, on the one hand, the public interest in the sound development and use for the benefit of the people of Canada of our vast and vital energy resources and, on the other hand, the essential requirement that enterprise be left free to make its own decisions so far as may be consistent with that public interest. The functions performed by the energy and related industries are of great importance to the well-being of our country, and we do not wish to hamper or impair the ability of these industries to perform their services. Hence we have drafted a bill which is general rather than particular in respect of formulae to be applied in regulation, because only through stating our intentions in somewhat general terms can we preserve that flexibility which we feel is essential.
Finally, may I point out that we have attempted to arrange that the transition from the present situation to that envisaged under the bill can be accomplished without delay, disruption of activity, or duplication of effort. We have sought to provide that the existing rights of companies which will be under the jurisdiction of the board will be fully protected in so far as is consistent with such new functions as rate regulation. We have provided for time within which such companies can accommodate themselves to the new statute, and have sought to avoid placing a sudden and difficult burden of requirements upon them. We have provided 66968-9-250
National Energy Board that matters now before the board of transport commissioners under the Pipe Lines Act, and matters now before the Minister of Trade and Commerce under the Exportation of Power and Fluids and Importation of Gas Act, shall be transferred to a similar position before the new board without loss of status or repetition of effort.
The house will decide the nature and extent of the debate on this major issue which is of such importance for Canada's future. I hope that full discussion will result in complete clarification of a subject that is not devoid of complications. At the committee stage there will be an opportunity of considering the details. The general principles I have attempted to set out today. This bill, if enacted, will set the pattern for the development and use, in the national interest, of the great resources of energy which are the endowment of our country.


Mr. Armand Dumas (Villeneuve):: Mr. Speaker, the minister has placed some interesting information on the record. We are grateful to him for having done so. The large amount of information he has decided to place on the record is a good indication of how important this proposed legislation is.
(Translation):
Mr. Speaker, after reading or hearing the remarks made in the house last Monday by the minister, when he had the responsibility of moving that legislation be introduced to establish a national energy board, one might have wondered whether the government intended to incorporate in such legislation a large proportion, if not all, of the main recommendations found in the interim report submitted by the Borden commission on energy. Indeed, the minister himself, in the debate on the resolution, after briefly commending the commission for the conscientious discharge of its heavy responsibilities, made this specific statement:
Many of its recommendations are to be implemented as will be clear when the bill is before the house.
Well, Mr. Speaker, we have gained a quite different impression now that we had a chance to take a good look at the contents of the bill. We now feel that the government has been prompted by many other authors than those of the preliminary Borden report.
Everything in this bill which might be considered consistent and sound has been borrowed from the pipe lines act, from the Exportation of Power and Fluids and Importation

National Energy Board of Gas Act, from the Railway Act, and, I would even say, from various recommendations made late in 1957 in the final report prepared by the Gordon commission on Canada's economic prospects.
Mr. Speaker, all essential parts of the bill are borrowed from the various acts just mentioned and from recommendations which are exactly similar to those of the Gordon commission. The non-essential parts, those that are contentious or even prejudicial to our industry or to the public interest are the government's own ideas or have been suggested by the Borden commission report.
I shall come back to this point a little later in my remarks, and we also shall have the opportunity of emphasizing what I just said when the house sits in committee on the various sections of the bill.
Mr. Speaker, in a detailed study of power prospects in Canada, prepared and edited at the urgent request of the Gordon commission by Mr. John Davis, who is an expert in this field, we find abundant information on this country's hydraulic resources, on coal, oil, natural gas, nuclear energy, as well as on tidal and solar energy.
For the first time in Canada, a complete study of mutual relations between the various power industries has been made in the said document by that great expert, Mr. Davis. That study enables us to form some estimation of the rate of growth of Canada's power requirements in the next 20 or 30 years, and of the changes that will occur in the consumption of the various forms of energy and in the relative contribution of various power resources to satisfy the needs of the country. I might add that if this government had really sought to be consistent and had tried to act as promptly as had been implied, it would have gone ahead, on the basis of this survey, and would immediately have established a national energy board, in the fall of 1957 or early in 1958.
The Davis study is divided in three parts:
(a)	Energy consumption and economic growth;
(b)	The energy supplying industries;
(c)	Energy and Canada's economic prospects.
In part (a), or first part, in chapter 2 dealing with energy consumption and economic expansion, we read the following on page 19:
Canada's industrial expansion in the 20th century can be interpreted not only in monetary terms hut

also by listing the ever increasing quantities of energy being put to use on the nation's farms, in its mines, stores, and factories, and in its homes. With the labour force today only little more than twice as large as that of 50 years ago but with better equipment, improved techniques, and-more significant still-with the help of about five times as much energy, the Canadian economy is turning out about six times as many goods and services as it was producing in 1900.
Scarcely a field of endeavour but has benefited in one way or another from the increased availability of fuel and power. Today a farmer with power-driven equipment can harvest 30 acres of wheat for every acre he could have reaped a century ago, using hand tools.
Each paper mill operator is turning out ten times as much newsprint as his forebears did around the turn of the century. To raise a ton of ore, the average miner took about two hours as recently as 1930, less than 50 minutes in 1955. Distance has become less of a handicap. On the railways, the latest diesel electric locomotive is capable of doing five times as much work as its steam driven counterpart at the end of world war II.
The report goes on to explain the great advantages of certain power resources we have here in Canada.
In part (b) of the Davis study dealing with energy supplying industries, the author has compiled a great variety of information on each of those industries.
In regard to the oil industry, for instance, Mr. Davis first makes an historical summary; he gives an outline of the world situation, deals with the prospects of Canadian oil and concludes by outlining a long-term program.
In the case of the natural gas industry, after outlining its background and dealing with prospective markets for Canadian gas, Mr. Davis explains the supply and demand pattern and gives details on its financing and development.
Canada is exceptionally well endowed with water power resources. Being both large and conveniently located they have played a major role in its economic development. Among other things they have helped to make up for a lack of mineral fuels in central Canada. They have made possible the processing of forest, mineral and other primary products on a scale unmatched anywhere else in the world. And, by making low-cost electrical energy available to the nation's homes, farms, stores, offices and factories, they have contributed in innumerable ways to the exceptionally high standard of living which Canadians now enjoy.
A little further on, the report says:
Thanks to a favourable climate and to the right kind of topography, to widespread precipitation, extensive drainage basins and readily harnessed water power sites, Canada has made tremendous strides in this important energy field. With the exception of the United States, this country has installed more hydro capacity than any other nation in the world. While Norway's per capita installation still tops the list at 1.6 horsepower, Canada is second with 1.1 horsepower, followed in order by Switzerland and Sweden.
There again, the report gives very instructive and important information. Later on,

on page 201, Mr. Davis concludes that part of his report by saying:
Whatever happens, Canada's power industry will continue to grow both in extent and complexity. Accelerating as it does, it will help through its very momentum, to carry along with it the rest of the Canadian economy. Thus, in innumerable and in unforeseen ways it will continue to do what it has done so well before-that is to stimulate industrial development in those resources and allied fields where Canadians as a people possess their greatest natural advantage.
Those, sir, are the few paragraphs which I wanted to quote from the Davis study. Considered as a whole, that study is a precious source of statistical information of all kinds and there is no doubt that the government might well have sought inspiration from it and from the final report of the Gordon commission on Canada's economic prospects before submitting some legislation which would have met the demands of industry while ensuring the Canadian people of the best possible use of this country's power resources.
The final report of the Gordon commission was submitted in November 1957-a very significant date to keep in mind. Giving an overall picture of our power needs and resources the commission sums up the position as follows, as appears on page 143 of the report:
Issues of this kind, in our opinion, should be examined within a context broad enough to include all forms of energy and all the energy industries. In this chapter, we have tried to suggest that, although there are a number of separate energy industries, the interrelations between them are close and complex. Each of the various energy resources has its own peculiar advantages which make it better suited than others for some purposes. Wood needs no processing before it can be burned as a fuel and is found almost everywhere, except on the prairies, so that it will still be used for heating in some outlying districts, although Canada's total consumption of fuel wood will continue to decline. Coal has both a high heat content and valuable metallurgical properties, and there are large reserves of it. It will continue to be essential in steel making and, after the passage of time, may begin to recapture some of the volume markets that it is now in the process of losing.
That is what we hope, Mr. Speaker.
Petroleum products provide the most practical form of power for cars and trucks, and highway traffic will continue to depend on it almost exclusively. Natural gas is a particularly clean and convenient fuel and its special properties will always ensure for it many premium markets. Water power can be harnessed with a very high degree of thermal efficiency and electricity can be produced from it without exhausting any natural resources.
In its final report on Canada's economic prospects-a report which has been available to the government since the fall of 1957-the Gordon commission dealt at length with the vastness and significance of our power resources and having examined prospects for 66968-9-250i
National Energy Board their exportation advocated the creation of a national energy board.
Mr. Speaker, I should now like to quote out of this report a few paragraphs bearing particularly on natural gas, which I think are worthy of special attention. This is from page 133:
Wide availability of natural gas will obviously affect the consumption of other fuels and the prospects of the industries that exist to provide them. The area of competition with oil will be fairly wide, although the largest single market for petroleum products-in transportation-will be immune, since natural gas cannot readily be used to drive automobiles, aircraft, ships or locomotives. On the other hand, some of the natural gas liquids (i.e., propane, the butanes and natural gasoline) which are stripped from natural gas in the cleaning process, are well suited to drive internal combustion engines and may capture at least a fraction of the present market for refined gasoline and diesel oil. Heavy residual oils used as industrial fuel will also be displaced in some instances by natural gas.
Farther down, the report says this:
The effect of this competition, however, may be reflected less in the output of Canadian refineries than in the volume of imported petroleum products, since the severity of the Canadian winter has made it necessary to import large quantities of fuel oil during the season of peak demand. The Canadian oil industry will also, of course, have the consolation of drawing additional revenues from the sale of the natural gas it will continue to have as a byproduct from its field operations.
There ends the quotation with regard to natural gas. Farther on in the same chapter, on page 134, the commission deals with the importance of reserves and of export markets.
I quote from the beginning of the paragraph:
In spite of the very rapid growth that we anticipate over the next two or three decades in Canadian consumption of natural gas, reserves are likely to grow even more rapidly and make possible substantially larger exports to the United States than are now being contracted for. The growth of reserves will be a function of the demand not only for natural gas but for crude oil as well; it will also be affected by the government policies pursued in both Canada and the United States; so that any estimate must be subject to a wide margin of error. It would seem plausible, however, to expect reserves of natural gas to increase over the period from 21 trillion cubic meet in 1955 to perhaps 100 trillion cubic meet in 1980. If that estimate is not too wide of the mark and if Canadian consumption runs at about the rate we have forecast, the amount available for export twenty-five years from now might be one trillion cubic feet annually or about half the amount likely to be marketed in Canada.
Those figures, Mr. Speaker, are very important. They show the wisdom of doing whatever is necessary to develop, if possible, the part which is now considered as a surplus.
1 now come to the proposal made at page 146 of the report, where the commission urges the establishment of a national energy board. Here is the recommendation of the

National Energy Board Gordon commission on this matter, and I would like to quote directly from page 146 of the final report, issued in November 1957:
We assume that in connection with these intergovernment negotiations, the appropriate Canadian authorities are considering our long-term interests in the whole field of energy. These include not only the question of exporting electricity for periods long enough to permit the financing of new installations, but also our interests in export markets for oil, both crude and refined products, and for gas and its by-products.
And now, here is the essence of the Gordon commission recommendations:
In order that a sound and comprehensive policy may be worked out with regard to development, exports, imports and consumption of all forms of energy in Canada, we propose that a national energy authority be established which would be responsible for:
(a)	advising the federal government and. upon request, any provincial government on all matters connected with the long-term requirements for energy in its various forms and in different parts of Canada; methods of promoting the best uses of energy sources from a long-term point of view; export policy, including such questions as the further refining of oil and gas in Canada and the disposal of by-products; coal subsidies, etc.
(b)	approving, or recommending for approval, all contracts or proposals respecting the export of oil, gas and electric power by pipeline or transmission wire, including, where necessary or desirable, the holding of public hearings in connection therewith.
If this proposal is accepted,-
I repeat what I said Monday last.
__the organization of the Dominion Coal Board
should be merged with that of the proposed national energy authority. It is perhaps unnecessary to add that the proposed new body would not interfere with the rights of the provinces respecting control over natural resources.
Then, here-
(Text):


Mr. Morris:: Will the hon. member permit a question which is intended only for clarification; it is not antagonistic. After reading these extracts from the final report of the Gordon commission, is the hon. member in a position to say whether his party favours the inclusion of coal in this energy bill, as was recommended in the extracts he just quoted, or does he favour the retention, as we do, of the dominion coal board?


Armand Dumas: I said that on Monday, definitely. For the time being we do not agree that the coal board should be integrated with the national energy board. I said that very clearly on Monday. I shall say something more about this question later in my remarks.
(Translation):
Mr. Speaker, I had expected an altogether different question from the hon. member for

Halifax (Mr. Morris). At all events, I shall be in a position, at the end of my remarks, to say or rather to repeat what I said Monday in the house about the Liberal party's policy with regard to Canada's energy resources.
(Text):
During the 1957 election campaign, Mr. Speaker-and this has been mentioned very often in this chamber-the Prime Minister promised the Canadian people quick and bold action on this matter. The Conservative party was going to encourage through specific measures, a greater degree of Canadian ownership in this field and the further processing in Canada of raw materials and by-products through the more efficient development and use of our sources of energy.
I would like to quote from the remarks made by the Prime Minister in Toronto on February 4, 1957, at the annual dinner of the Toronto board of trade. Of course that was some time before the election of 1957. However, this is what the Prime Minister said:
There is a need now for the setting up of a Canadian national energy board, with its membership composed of technical personnel, who might be selected by the president of the national research council of business organizations, of the dominion and provincial governments, to the end that the most effective use of the energy resources of Canada, in the interests of the public welfare, may be assured. We have vast resources of gas and oil and coal and uranium. I believe the time has come to set up such a board, whose duty it would be to advise and to recommend proposals regarding these resources, so that they may be safeguarded from prejudicial action now, ill-timed action to the detriment of this and future generations.
What was the situation in this respect after the general election and during the fall session of 1957? Did the government take action at that time, as was urgently required by our industry and as had been promised-that is the point-to Canadians? No, Mr. Speaker; it merely submitted the recommendation of the Gordon commission to another royal commission created for that purpose.
What did we on this side of the house have to say then about the creation of the Borden commission? Here is, for instance, what Hon. Jean Lesage, the former minister of northern affairs and national resources, had to say on November 13, 1957, at page 1082 of Hansard:
In the field of energy, here, again, we have heard no policy announced by this government. We all know that the Gordon commission devoted a good deal of attention to this problem and will in its

final report make specific recommendations which were anticipated in its preliminary report. Before knowing what will be the final recommendations of the Gordon commission in this respect, the government appoints a royal commission whose main purpose is to make an inquiry on the recommendations of another commission before these recommendations are presented in final form. This is what can be called quick action, but what about the wisdom of the action. Of course, everybody knows why this royal commission on energy was appointed; everyone in Canada knows that it is to hide the fact that the Conservative party wants to continue the pipe line policy initiated by the past Liberal government.
Mr. Lesage continued:
That is why the royal commission on energy has been appointed. The Conservatives strongly criticized this policy of the past Liberal government and of course they do not dare admit publicly now the fact that they endorse the policy. What they wish to do is hide that policy of theirs behind a royal commission. They do not have the courage to admit they will have to follow our policy in this matter. They intend to escape their responsibility by appointing a royal commission.
What did we on this side of the house have to say about the creation of that royal commission? We said what Mr. Lesage said in the remarks 1 have just quoted.
In the fall of 1957, therefore, we on this side of the house contended that the appointment of the Borden commission was a means of shelving problems and a mere delaying tactic to enable the government to postpone taking a definite stand and specific action before the forthcoming election of 1958, That delaying tactic has worked. After a year of inquiry the Borden commission presented its first report in October, 1958. That report contained final recommendations only in so far as natural gas is concerned. We all recall also how widely that report and some of its sections in particular were criticized when the report was made public.
Then more delays were experienced. It was only on April 23, six months after the government had received the report, that a resolution appeared on the order paper. But again nothing happened. It was only after another month that the government decided at last to proceed with the resolution. The bill was made available to us for study only on Tuesday evening. Finally, after all these delays and hesitation and confusion, the government discovered that this was a most urgent matter and that the house should proceed with the consideration of the 101 provisions of the bill without any adequate time to study them carefully.
Of course, Mr. Speaker, I must say here that we are grateful to the Prime Minister for agreeing on Wednesday to postpone second reading of the bill until today.
National Energy Board During the intervening hours we have had some time to study the bill, and for this reason we think this was a good move on the part of the Prime Minister, because it will accelerate debate at this stage.
We think this is an important piece of legislation. It is a long and complex bill which could have deep, long term implications on the future economic development of Canada. For this reason and also because of the long delays in bringing the legislation before the house, for which the government must assume full responsibility, we on this side of the house want to make clear that we are far from being satisfied about the haste shown by the government on this occasion. We claim that not enough time has been provided to hon. members for full consideration and study of the bill. We also believe that those individuals and groups more immediately concerned with this matter will not be able to analyse the legislation and make their views known in so short a period of time.
In the little time I have had to study the bill, however, I have been able to discover that this legislation is almost a complete repudiation of the Borden report. I am quite sure that no other royal commission has been more completely ignored and by-passed. This shows very clearly how right we were in the fall of 1957 when we claimed that the setting up of the royal commission was merely a delaying tactic used by the government to postpone action until after the 1958 election.
The bill we are now considering is not only a repudiation of the recommendations of the Borden commission but is also a repudiation of the definite promises and commitments made by the Conservative party to the Canadian people before the 1957 election. Most of the provisions of the bill are not new, as we intend to show at the committee stage when we will be able to consider the bill in detail. A great number of its sections have been taken without any change or without any substantial modification from the Pipe Lines Act and from the Exportation of Power and Fluids and Importation of Gas Act, as I mentioned at the beginning of my remarks in French.
The bill also contains a few new provisions which we think are clearly undesirable. It gives unnecessarily wide powers to the governor in council. This is surprising from a government which when in opposition was so critical of government by order in council. I should like at this stage to

National Energy Board give just a few illustrations of this undesirable feature of the bill. I am not going to quote the section, Mr. Speaker, because I know I am not permitted to do so at this stage of the bill, but I should like to point out that clause 87 says the governor in council may by proclamation extend to oil the provisions of the bill dealing with the export and import of gas.
Surely this is a most unacceptable procedure. With that provision the government is proposing to by-pass not only the Borden commission but also parliament. As we all know, the Borden commission has not yet made its final recommendations with respect to oil exports and imports. In spite of this the government is asking parliament to enact legislative provisions with respect to oil. Even if the government has already decided to ignore the recommendations the commission may make with regard to this matter, it might at least have waited to see the report before taking action. I do not think we should have that clause in the bill.
The Borden commission has now been placed by the government in an impossible and intolerable position. As far as we on this side of the house are concerned, we want to see what the Borden commission has to say on this subject before deciding what should be our attitude on this clause of the bill.
At one o'clock the house took recess.


[Stage Direction]
AFTER RECESS

The house resumed at 2.30 p.m.
Armand Dumas: Mr. Speaker, just before the house rose at one o'clock I was commenting on clause 87 of the bill, and I was telling the house that the Borden commission had been placed in an impossible and untenable position by the government. This is not the whole story, however, Mr. Speaker. According to this bill, the legislative provisions with respect to oil, after having been approved by parliament, will be implemented only if and when the government so wishes. This, Mr. Speaker, is legislation by cabinet and we certainly cannot accept such a procedure. We maintain that if and when the government feels legislative action is necessary with respect to oil it should then, but only then, ask parliament to take such action. The government is certainly not entitled at this stage to seek these wide powers when it does not even know how it will use them in the future.
Another illustration of government by order in council is provided by clause 85,

paragraph 2, which enables the government to exempt any person, any product, any transaction and any area from the legislative provisions and regulations regarding export and import of power or hydrocarbons. This is another example of the wide, arbitrary power that the government is seeking in this bill. Parliament is asked to enact legislation and, at the same time, to authorize the government to exempt from the legislation all the possible cases which could be covered by it. We certainly cannot accept provisions which give such wide powers to the government.
Our attitude toward this bill is clear and simple. We approve its principle, which is to set up a national energy board. As a matter of fact, we have been in favour of such a board since January, 1958, at least. I should like, at this stage, to quote from the resolution approved by the Liberal party at the last convention in Ottawa, in January 1958 and which I quoted on Monday evening, May 18, 1959, as reported at page 3773 of Hansard for that date,
We of the Liberal party advocate the integrated development in co-operation with the provinces of petroleum, natural gas, hydroelectric power, coal and all other energy sources across the whole of Canada to meet the needs of industrial and population growth. We advocate the establishment of a national energy authority to advise the government as to the long term requirements of energy in Canada, including the best methods of providing efficient long term uses in Canada and for export.
Therefore, in 1958 we were on record as favouring such a board, and this is long before the government decided to introduce the present bill. However, we do not want another board which will more or less duplicate what has already been done by other existing government agencies, and thus create further administrative delays and confusion. From this point of view, we feel that the functions of the board have not been clearly defined in relation to the responsibilities of existing agencies.
It is true that this morning the Minister of Trade and Commerce (Mr. Churchill) gave some information to the house on this subject. However, I should like to outline a few of the problems we will have on our hands if this division of responsibility is not made absolutely clear. The Minister of Trade and Commerce has failed, in that way, to tell us what will happen to the present agencies established under statutes of this parliament and operating within the field of energy. He said this morning that these agencies would continue to work, but we should have had more information regarding this problem. This question, of such fundamental importance, was almost ignored. Will these present agencies, and their functions, be integrated within

the framework established for the new national energy board? The minister should be more definite about that. Will certain parts of present agencies be brought under the aegis of the new authority, or will complete existing agencies be incorporated? Parliament should have such information.
It may be that all present agencies will be maintained-we were not given this understanding this morning-without any changes in their functions. If that is the arrangement contemplated, we are entitled to ask how the new board will discharge the duties assigned to it in the bill and still avoid extensive and inefficient duplication with existing machinery of government?
There is still another alternative about which we must ask, and that is whether it is proposed to wind up or liquidate some of the existing agencies operating in the field of energy. This is a matter of fundamental importance-


Mr. Lambert:: Which ones?


Armand Dumas: This is what we want to know; this is a matter of fundamental importance and for that reason we intend to press the minister for precise answers to each of these questions as they apply to each existing agency.
I want to list now the present agencies and governmental machinery operating in the field of energy. They are: the dominion coal board; the atomic energy control board; the international joint commission; the water resources branch of the Department of Northern Affairs and National Resources; the interdepartmental committee on energy. These are the main agencies and machinery. There may be others, but these are the ones which occur to me at the present time.
Before I deal with each of these more specifically, I wish to refer to a paragraph of the minister's statement at the resolution stage. A reading of this statement will illustrate the broad functions of the board in the field, and how any diligent exercise of such functions is bound to lead to duplication with the work of existing bodies. The paragraph reads, as recorded at page 3767 of Hansard:
The board would exercise certain broad advisory functions ranging over the whole field of energy and sources of energy in so far as the parliament of Canada has jurisdiction over such matters.
Clause 22 of the bill, which I am prevented from quoting in full at this stage of the debate, confirms the interpretation I attach to the minister's statement, though the words used therein are "shall study and keep under review", and so on.
How will the dominion coal board be related to the energy board? The coal board
National Energy Board operates under a separate statute, namely the Dominion Coal Board Act, and sections of the act, especially sections 6 and 7, seem to overlap directly the provisions of the bill now under consideration. Section 6 of the coal board act reads as follows:
6. The board shall study, review and recommend to the minister from time to time such policies and measures as it considers necessary respecting the production, importation, distribution and use of coal in Canada.
This is the statute of 1947, chapter 57. Then section 7 deals with research and investigation. I wish to quote clauses (d) and (f) in this connection. Clause (d) reads as follows:
(d) the position of coal in relation to other forms of fuel or energy available for use in Canada;
Clause (f) reads as follows:
(f) the co-ordination of the activities of government departments relating to coal;
My question now is this. How will the authority granted by parliament to the dominion coal board be affected by the authority of the new board? Coal is a source of energy; yet the new board deals with all sources of energy without exception.
I now turn to the atomic energy control board. This body operates under a statute, namely the Atomic Energy Control Act. Its functions are carefully described in a brochure published by the authority of the Secretary of State of Canada (Mr. Courte-manche) and entitled "Organization of the Government of Canada". As I read the functions of the atomic energy control board, I suggest to hon. members that they reflect on the obvious overlap with the new board. This is what we read in this little brochure published under government authority:
The primary function of the board, as stated in the preamble to the act, is to make provision for the control and supervision of the development, application and use of atomic energy, and to enable Canada to participate effectively in measures of international control of atomic energy that may hereafter be agreed upon. The act, accordingly, provides for control by the board of materials, equipment and information related to atomic energy and for the making of regulations for these purposes. The act also authorizes the board to establish scholarships and grants in aid relating to atomic energy research.
Surely the role of atomic energy in the future energy supplies of Canada is of crucial importance. That energy source is under a board of its own. Can the new board successfully operate without concerning itself with atomic energy? If it does concern itself with that source of energy, how will it fit in, and relate its activities to the present atomic energy control board?
The same questions can be asked about the international joint commission. Its functions are described in the volume to which I have referred already as follows at page 160:

National Energy Board
The commission deals with matters arising mainly out of the use of lakes and rivers in the border areas along the boundary between the United States and Canada.
We all realize, Mr. Speaker, that in the recent past the international joint commission and its Canadian section have been occupying much of their time with the development of power from the harnessing of international waters. Yet the new board will have the authority to deal with agencies outside Canada in respect of energy matters. It would be interesting, I am sure, for the house to know in what way the new energy board will function in relation to the international joint commission.
The dominion coal board, the atomic energy control board and the international joint commission operate under sanctions granted by this parliament. But there has been operating in this field the water resources branch of the Department of Northern Affairs and National Resources and an interdepartmental committee on energy. The work of the water resources branch of the Department of Northern Affairs and National Resources could hardly be more similar to the functions of the energy board. We want to know whether it is proposed to close out this branch, or whether it will continue along its present path which will of necessity involve duplication with the board.
The scope of the work of this branch and the extent to which its functions coincide with those of the new board can be readily seen in the report of the department for the fiscal year 1957-58, especially at page 44. 1 believe, Mr. Speaker, it is worth quoting two of these paragraphs:
The branch-
That is the water resources branch of the Department of Northern Affairs and National Resources.
-continues to provide technical advice to the Department of External Affairs and to the Canadian section of the international joint commission in their considerations and studies of international waterway problems which have arisen on various rivers across Canada. Among the most important studies of this nature undertaken by the branch are those of the Columbia and Fraser rivers. These two river systems comprise the bulk of the drainage for the whole of southern British Columbia, and their topography has permitted consideration of their interconnection by diversion from the Columbia river to the Fraser river system. Various possibilities for separate or combined development of these two major river systems are being given careful scrutiny.
Further in the report we read this:
The Yukon river has been the subject of previous study to determine the possibilities of diversion of its upper reaches into the Taku river system for power production in northwestern British Columbia. Since the Yukon river with its tributaries constitutes the bulk of the drainage system

of the Yukon territory and hence is a federal responsibility, the branch continued its power resources reconnaissance survey, initiated in 1956. When this work has been completed, it will be possible to provide a reliable estimate of the power potential of the Yukon river system which might be developed within the Yukon territory.
Presumably, Mr. Speaker, the setting up of energy board will mean winding up the work of the interdepartmental committee on energy. I think we might take that for granted.


Gordon Minto Churchill: Do not be too sure that you can take that for granted.


Armand Dumas: I do not suppose the minister will have, in addition to the energy board, another interdepartmental committee. He may keep the agencies that we already have but I suppose that he proposes to wind up this committee. The existence of the committee was referred to by Mr. C. D. Howe, as reported at page 1538 of Hansard of 1955 as follows:
We have today an interdepartmental committee on energy. Any matter having to do with energy is referred to that committee. It is not a committee established by act of parliament; it is simply a committee of civil servants who have duties relating to the field of energy. The Department of Trade and Commerce have to do with the exporting of energy, all energy, and the Department of Trade and Commerce are privileged to bring this committee together, to bring the experts together to discuss any problem of export of energy with which the department is confronted.
From his later remarks, it appeared that Mr. John Davis, of the Department of Trade and Commerce, Mr. Hume, of the Department of Mines and Technical Surveys, and representatives of the Department of Finance, the dominion coal board, the Department of Northern Affairs and National Resources, the Department of Labour and-the then minister also thought-the international joint commission made up the interdepartmental committee.
Now I believe I have said enough to indicate the importance of knowing what will happen to existing bodies and agencies, and how they will be integrated within or related to the new board. We want precise answers from the minister. We intend to press until we receive such answers. We will be studying the bill in committee, and I hope that our criticism of the different sections of the bill will be constructive. We hope also that the government will do what it has to do to try to improve the said proposed legislation.
Although a great number of the provisions of this bill are not new, it is now proposed to create new procedures and a new administrative set-up to study, control and regulate a very important sector of the Canadian economy and of our international trade. Viewed in that perspective, this bill could

have, and undoubtedly will have, far-reaching implications on Canada's future. Will those consequences be favourable or unfavourable? I think at this stage that very few members in this house would be in a position to answer that question with any degree of certainty. That is why we hope the government will agree to send this bill, after second reading, to a standing committee of the house which would be in a position to give to those individuals and groups interested in this matter an opportunity to be heard. We think that this is a most reasonable request.
After all, this is a most important and complex matter. Very few persons have had an opportunity to express their views on this subject in the short time since the bill has been made public. It may be, although it is not at all certain, that such a procedure would involve a delay of a few days to secure the approval of the bill; but this should not cause any great inconvenience. Our objective in making that suggestion is not obstruction. Mr. Speaker, I can assure you, and I can assure the minister, that we wish to cooperate. We wish to do our best to work with the government and make this legislation what it should be. We merely want to be sure that the bill which will be enacted will be a good piece of legislation and will serve the best interests of our country.
The government recently decided on its own initiative to refer the unemployment insurance bill to the standing committee on industrial relations. I do not see how the government could now refuse to use the same procedure with respect to this bill which is much more complex and which could have far more important implications on the future of our country. I am quite sure that hon. members would welcome the advice which could be secured through the committee from the great Canadian experts in the field of energy. We are not pressing the matter, but I hope that the minister will give consideration to this request, and I repeat that in this matter we want to work with the government and make this piece of legislation something of which we will be proud.


Hazen Robert Argue: Mr. Speaker, the question of control of transportation rates and prices of energy in this country is a most important one. As a matter of fact, to a very large extent the future industrial life of Canada as well as the prosperity of Canadians generally depend upon the availability of cheap energy sources. It has become clear in very recent years that Canada has large supplies of natural gas and petroleum. We are an industrial nation, and we in the C.C.F. believe it is within the capabilities of the Canadian nation to develop our energy 66968-9-251
National Energy Board resources at low cost, and be able to provide this energy to Canadian industry and consumers.
It is on that basis that we approach the subject and the bill now under discussion. Mr. Speaker, this whole field was the subject of a very important inquiry by the Borden royal commission on energy. This inquiry took some considerable time. It cost the taxpayers of this country a great deal of money, and an exhaustive study has been made. As a matter of fact, in a return brought down in this house on February 25, it was shown that the cost of this royal commission has amounted to $317,124.52. It is therefore correct to say that the Canadian nation has invested a large sum of money in the inquiry that was made, and the recommendations that have been presented to parliament should be given every consideration.
Mr. Speaker, as I read this report and its recommendations, I think that some of the most important recommendations are contained in the list of recommendations and the suggested amendments to the Pipe Lines Act. Recommendation No. 11, paragraph (c) reads as follows:
It shall be mandatory for the board of transport commissioners for Canada to regulate the prices or rates of gas pipe line companies subject to the jurisdiction of the parliament of Canada, and, in so doing, to require, if necessary, any such gas pipe line company to renegotiate the terms of any existing contracts for the sale or delivery of gas for distribution or consumption within Canada;
Paragraph (d) reads as follows:
It shall be mandatory for the board of transport commissioners for Canada periodically, and at least once in every 24-month period during the early years of regulation, to review and, if deemed necessary, to adjust the prices, tolls, rates and tariffs of pipe line companies regulated by it;
This report refers to the board of transport commissioners. We do not quarrel with the fact that the government has decided to give these powers now held by the board of transport commissioners in this connection to the energy board. We feel that the recommendations apply equally to the powers that will be held by the energy board as they should apply to the powers now held by the board of transport commissioners.
Recommendation No. 12 reads as follows:
That the prices, tolls, rates or tariffs of a company owning or operating an oil or gas pipe line, as regulated by the board of transport commissioners for Canada, should be just and reasonable, non-discriminatory and calculated to yield a fair rate of return on the shareholders' equity, after making due allowance for reasonable and proper operating expenses, depreciation, interest, income and other taxes.
Mr. Speaker, the recommendations contained herein are very clear. They ask that power be exercised by a board to regulate the prices or rates of gas pipe line companies

National Energy Board subject to the jurisdiction of the parliament of Canada and in bringing about these rates to require, if necessary, any gas pipe line company to renegotiate the terms of any existing contracts for the sale or delivery of gas or its distribution or consumption within Canada. The purpose of this section is to remove any injustice that presently is contained in the rates charged for gas in terms of distribution or consumption.
It is further recommended that at least every 24 months it shall be mandatory for the board to review and, if deemed necessary, to adjust the prices, tolls, rates and tariffs of pipe line companies regulated by it. These recommendations are that the board have wide powers and that the board must use those powers to set tolls and to regulate the prices of gas and oil.
The other recommendation to which I have referred was to the effect that the prices, tolls, rates or tariffs of the companies owning and operating an oil or gas pipe line shall be so regulated and calculated as to yield a fair rate of return on the shareholders' equity after having made due allowance for reasonable and proper operating expenses, depreciation, interest, income and other taxes. This is a most important recommendation. The whole purpose behind this recommendation is to remove from the calculations of cost the fabulous profits that have been made by investors and the controllers of gas and oil pipe lines in this country. This recommendation says that anyone who has invested money in these companies should receive a fair return on his equity. The purpose is to provide that Canadian industries and consumers will not be saddled with the high rates for energy that are necessary to pay large returns on the highly speculative and bloated profits and income that accrue to the controllers of the gas and oil industry.
These are the central recommendations and these are the recommendations the government has avoided. It is true that by this bill the government is setting up a board but the board is free to do almost anything it likes and indeed it is free to fold its arms if it so wishes and do almost nothing.
Clause 53 of this bill reads as follows:
The board may disallow any tariff or any portion thereof that it considers to be contrary to any of the provisions of this act or to any order of the board, and may require a company, within a prescribed time, to substitute a tariff satisfactory to the board in lieu thereof, or may prescribe other tariffs in lieu of the tariff or portion thereof so disallowed.
The board has full discretion to sit on its hands indefinitely and let the speculators and buccaneers continue to make large and

bloated profits from Canadian industry and consumers. That is the attitude of the government. The policy of the government has been to forget all of its statements in the past and to forget its well-known position that Canadian interests should be protected and Canadian energy resources should be developed by Canadian capital in the interests of Canadians. The government has forsaken that position and introduced this anaemic bill to set up a board the powers of which are not well defined and by this means to allow the exploitation of Canadian energy resources in the future and to allow them to remain in the hands of outside interests and overnight buccaneers and to remove these resources from direct and precise control by a board operating in the interests of this nation.
The royal commission on energy was instructed to inquire into this whole general field to see to what extent speculative and exorbitant profits had been made in this industry in the past. The commission has done a most thorough job in this regard. It inquired into the whole operation of Trans-Canada Pipe Lines Limited. I am convinced from reading the report that it was precisely because of the huge profits that had been made by a few people on almost negligible investments that the royal commission recommended that the people of Canada should not have to pay rates for gas and oil that provide fabulous returns on such investments.
We have heard a lot about Texas buccaneers from hon. gentlemen opposite in times gone by. This commission inquired into the extent to which Trans-Canada Pipe Lines Limited is controlled by outside sources. On page 74 of the report it is stated that as of June 1, 1958 the company that held the second largest number of shares in Trans-Canada Pipe Lines Limited was Canadian Delhi Oil Limited, Calgary, Alberta which had 542,885 shares. Looking further into the affairs of Canadian Delhi Oil Limited the commission at page 77 of the report had this to say:
The commission has been advised that Mrs. Betty Lee Moor MacGuire, who was the registered owner at the date above referred to of 238,984 common shares of Canadian Delhi Oil Ltd., is a daughter of Mr. Lee Moor, an associate of Clinton W. Murchison of Dallas, Texas; that the partnership of Richardson & Bass, shown as the registered owner of 132,010 common shares, includes as a partner Mr. S. W. Richardson, a Texas independent oil operator, who is likewise shown as being the registered owner in his own name of 35,762 common shares of Canadian Delhi Oil Ltd. and that Clinton W. Murchison, Jr., and John Dabney Murchison, of Dallas, Texas, shown as the registered owners of 275,512 and 229,325 common shares respectively of Canadian Delhi Oil Ltd., are sons of Clinton W. Murchison, Sr., of Dallas, Texas.
Here is concrete evidence of the activities of Texas buccaneers to which the Prime

Minister (Mr. Diefenbaker) made reference in this house a few years ago. This is evidence of the extent to which Trans-Canada Pipe Lines Limited is controlled by people living in the United States.
With respect to profits that have been made on certain transactions the commission at pages 82 and 83 of its report had this to say:
Public financing of Trans-Canada was announced in February, 1957. The prospectus of the company is dated February 13, 1957. On February 1, 1957, Mr. Tanner exercised his option with respect to
15.000	shares and on February 6, 1957, with respect to 40,000 shares. As at June 1, 1958, Mr. Tanner held 30,800 of these shares, having transferred
15.000	shares principally to members of his family and 200 shares to the National Trust Company Limited, under a trust agreement, and having sold 9,000 shares for an aggregate price of approximately $263,400. As at the same time, there remained, 5,000 shares with respect to which Mr. Tanner was entitled to exercise his option before March 9, 1959.
Mr. Tanner under his agreement was obligated to pay to Trans-Canada for the 55,000 shares the sum of $440,000. At the middle of September,
1958,	common shares of Trans-Canada were traded on the Toronto stock exchange at approximately $34.50 per share. Had Mr. Tanner retained these optioned shares and sold them at that time and at that price he would have made an apparent capital gain of approximately $1,457,500. This calculation does not take into account the 10,000 shares optioned to him by Canadian Delhi Oil Limited and the western group at $1 per share, which as previously stated he transferred to Mrs. Tanner. In addition, as noted above, Mr. Tanner still has the right, exercisable before March 9,
1959,	to purchase an additional 5,000 shares of Trans-Canada at $8 per share.
Here is a man, Mr. Speaker who according to the royal commission on energy, a commission which cost the Canadian taxpayer over $300,000, who by way of an option and by no risk investment himself, stood to make in September of 1958, with shares at the price of $34.50, a capital gain of $1,457,500. This is the nefarious deal to which the Conservative members used to refer. This is the great betrayal under which one man has made $1,457,500 at the expense of the Canadian nation.
This deal was made, prior to this government coming into office, but what has been the attitude of this government? To set up a royal commission, yes, and a royal commission which brought in a report and said in effect that gas rates should not be set and oil rates should not be set at prices to give this man a $1,457,500 capital gain, but only a return on the equity that he has in the company. This, Mr. Speaker, is the recommendation of the commission and this is the recommendation that this government has refused to follow.
It was not only Mr. Tanner who made a fabulous profit. There was Mr. Charles S.
66968-9-251J
National Energy Board Coates, of Houston, Texas, who himself had a very large option and has made very fabulous profits. The royal commission at page 85 had this to say:
As previously mentioned, public financing of Trans-Canada was announced in February, 1957, and the prospectus with respect to such financing is dated February 13, 1957. On February 11, 1957, Mr. Coates exercised his option in full. As at February 19, 1958, Mr. Coates still held 40,000 of these shares, having sold 10,000 shares in the fall of 1957 for an aggregate price of approximately $280,000. Accordingly, if one takes the price at which common shares of Trans-Canada were traded on the Toronto stock exchange in the middle of September, 1958, i.e. approximately $34.50 per share, and had Mr. Coates retained these 50.000 optioned shares and sold them at that time and at that price, he would have made an apparent capital gain of approximately $1,325,000.
This is another example of the fabulous profits that have been made at the expense of the Canadian nation because of the former government's pipe line action with regard to Trans-Canada pipe line. These are examples of fabulous profits that have been made by certain people connected with Trans-Canada Pipe Lines Limited. Look into any major gas company, look into any gas pipe line company in Canada, look into the financial picture of any major oil pipe line in Canada, and you are almost certain to find a duplication of the same kind of fabulous profits.
An inquiry was made into profits that resulted from the operation of the Northern Ontario Natural Gas Company. In the Globe and Mail of Friday, February 13, one finds the report that Mr. Farris purchased 37,500 shares for $300. He sold 22,500 of these shares for $318,300. He retained 15,000 shares, and at the price of approximately $14 per share at which shares are being traded today, this Mr. Farris, on an investment of $300, has a capital gain of $528,000. These are the very kind of fabulous actions that this government is protecting by this legislation in the rates which can be charged which will give a return on these fabulous amounts. Mr. Clark, another investor in the same company, purchased 58,549 shares for $9,072.50. He sold 30,149 shares for $146,215. He retained 28,400 shares, and on the basis of today's trading price this man, on a purchase investment of $9,072.50, is in a position to make $543,000. Mr. Newell, the third person mentioned, purchased 29,334 shares for $10,160. He sold 22,850 shares for $234,125. He still holds 6,548 shares. Mr. Newell, on an investment of just over $10,000, stands to gain $326,000.
I submit, Mr. Speaker, this kind of fabulous profits, based not on risk investment but on mere token investment, based mainly on the control and the acquisition and ownership of large numbers of shares, is a disgrace to this

National Energy Board nation and to this parliament. Because of these fabulous profits, because a few people have control of those great energy resources, the Canadian people have looked to this government to take action to restore the natural resources to the people of this country. This has not been done. As a matter of fact, effective steps to restore control over final charges are not being undertaken by this measure.
In recent elections the government made very strong statements to the people of Canada as to how it would develop resources in the interests of the Canadian people. In a pamphlet published by Progressive Conservative party national headquarters, 141 Laurier avenue west, Ottawa, Ontario prior to the 1957 election this was stated on page six:
Canadian subsidiaries of foreign concerns should be required to provide a substantial interest in their equity stock to Canadian investors.
There is no such reference in this bill. On page seven of the same pamphlet I find these words:
In his opening campaign speech on April 25 John Diefenbaker emphatically stated: "In common with all Canadians, and I underline what I am about to say, we welcome foreign investment. We do not want to see it discouraged. But, I say this-as Canadians a sense of national destiny for Canada calls for that investment being directed to the maximum benefit for Canada. I go farther than that-I quote the words of the Financial Post, which I have referred to, when it said this"-


Mr. Speaker:: Before the hon. member goes further with that, would he think that this debate, which is undoubtedly a broad one, deals with foreign investment? It seems to me that it deals with investment in oil, gas and energy companies but it deals with that not as foreign and domestic but as investment. I just wonder whether there are not some limits to the scope of what is relevant in this debate.


Hazen Robert Argue: I would refer you, Mr. Speaker, to the debate on the trans-Canada pipe line. That was legislation that affected only Canadian pipe lines. Yet a large part of the debate ranged around whether or not the people investing in and controlling that company were in fact Canadians. When we are considering a bill which contains power to control gas prices in this country I think whether the bill is effective depends to some extent on whether the great gas and oil companies that this legislation seeks to control are dominated by outside capital. If we were dealing purely with domestic investors we might have one attitude toward the bill but because we are dealing in fact with an industry which to a very substantial extent is controlled outside this country we have a different attitude to the measure. I feel that
[Mr. Argued
it is exceedingly pertinent to the whole question of the government's energy policy whether or not the companies that may be controlled are themselves owned by and in the control of outside interests.


Mr. Speaker:: I think the hon. member has a point with respect to existing companies but what I was endeavouring to find an answer to was whether the general policy of foreign investment was involved in this debate. It seemed to me that the quotations he was using were directed toward foreign investment generally. If he wishes to talk about foreign investment in the existing companies which will come under the control of this legislation that may be all right.


Hazen Robert Argue: If you will recall, just a moment before I had quoted from the royal commission report as to the fabulous profits made by Mr. Coates of Houston, Texas.


Mr. Speaker:: I made no objection to that. I was simply trying to keep the member away from a general discussion of foreign investment in Canada.


Hazen Robert Argue: After having referred to
Mr. Coates, after having referred to the royal commission's statement about these people, most of whom are Texans, who control Canadian Delhi Oil Company, I then came to the statement of the Prime Minister as to how this type of foreign investment and control was detrimental to the very existence of this nation. I intend to keep my remarks related to the gas and oil pipe line business but I also have referred to the way these pipe lines are controlled in large measure outside this country. The statement of the Financial Post, and it is a short one, which the Prime Minister quoted was as follows:
How long, with the growing dominance of foreign owned enterprises, Canada can continue a separate existence is the problem before Canada today.


Mr. Speaker:: In my view that general field is too broad a field for this debate and I think the hon. member should keep his remark related to the oil and gas industry.


Hazen Robert Argue: I am dealing with the oil and gas business and the way it is dominated and controlled outside this country and the fact that it is necessary for the government to take action to control the Texas buccaneers. The people and corporations who were once referred to as the pampered pets of the Right Hon. C. D. Howe and who are the pampered pets of this government today, these Texas buccaneers, must be smiling. They must have very broad smiles on their faces because I am sure that when this government took office there was some concern that the party now in power meant to do exactly what it

said it would do, restore control of these companies to Canadians and take action to see that Canadian resources are developed and used by Canadians in the interests of this country.
The government went so far as to appoint a royal commission on which more than $300,000 was spent. It brought in specific recommendations as to how gas and oil going through pipe lines should be controlled but the government has decided to set aside its main recommendations.
The Liberal party appears to be taking a very active part in this debate and I am certain we are going to have many speeches from members of the Liberal party before the debate is over. But I wonder where their basic quarrel is with the government. After all, they are the people who brought into existence the very pipe lines, the very companies, that required a royal commission to look into their operations. Has the Liberal party any fundamental quarrel with what is being done now? I do not think so. The hon. member for Villeneuve (Mr. Dumas), speaking for the Liberal party at the resolution stage, had this to say as found on page 3772 of Hansard.
If It is the intention of the government to follow the recommendation of the Borden commission in this respect, that is, establishing a base rate in this way, it will merely tie the hands of any board which will have to enforce the law, and at the same time it will discourage investment in Canada at a time when investment ought to be encouraged and not scared away by restrictive provisions.
The attitude of the Liberal party is, bring in more Texas buccaneers, bring in more Americans to control industries in this country and once control is obtained by them then bring in an anaemic bill which does not have the teeth in it recommended by Mr. Henry Borden, chairman, and the other members of the royal commission. The spokesman for the official opposition went on to quote Mr. Ely, the president of the investment dealers' association of Canada, in these words:
There is no doubt that the report has been a great blow to the confidence of foreign investors in Canada. Its recommendations, if implemented, will certainly impair our ability to import from abroad the large amounts of capital we require.
There is the stand of the Liberal party in opposition to the recommendations of the royal commission. In this debate, the Liberal party and Conservative party are in substantially the same position. They are prepared to see the Texas buccaneers, the pampered pets of the Right Hon. C. D. Howe, who have today become the dear dollies of the Prime Minister, continue to make out of almost zero investment-sometimes $8 and at other times no risk at all-fabulous profits ranging anywhere from one-third of a million
National Energy Board dollars up to one and a half million dollars. The people of Canada, by this legislation, are being asked to pay returns on gas and oil that will provide substantial profits to these buccaneers, not on the basis of the money they risked but on the basis of the fabulous, exorbitant and unwarranted profits that have been theirs.
The members of the Liberal party and the members of the Conservative party can smile broadly this afternoon, but what is happening under the action that has been taken is that the cost of energy required for the survival and expansion of Canadian industry, both domestic and export industries, is being increased unduly. Canada's ability to compete in the export markets is being damaged by this government. The government's attitude is, we welcome capital to make speculative profits; we are prepared to allow high prices to be charged for gas in order to pay fabulous returns on these speculative investments even though the result is high cost industry in Canada and damage to Canadian export markets.
This capitalist system, Mr. Speaker, as managed or mismanaged by the Liberals and as managed or mismanaged by this government, has shown itself not to be a free enterprise system in which the ordinary Canadian has a chance to invest and make a good return, but has shown itself to be a system which breeds, by way of clique and special privilege, millionaires and which makes multimillionaires out of existing millionaires. It is doing great damage to Canadian industry by increasing energy costs and making it more and more difficult for Canada to maintain its trade position in the world today.
I have great respect this afternoon, Mr. Speaker, for the position taken by the Conservative party in 1956. I wish I could say I had the same respect for the position that they are taking today.


Mr. H. J. Robichaud (Gloucester):: In introducing the resolution which preceded this bill on Monday last, a measure to provide for the establishment of a national energy board, and in the course of his statement in moving second reading of the bill this morning, the remarks of the Minister of Trade and Commerce (Mr. Churchill) indicate that this bill offers very little new in so far as legislation is concerned. In fact, this morning the minister clearly stated that this new bill was based mainly on the principles of the Pipe Lines Act and also on the exportation of gas act. In other words, Mr. Speaker, it took a royal commission and a great deal of expense to the taxpayers of this country, plus almost two years, for the government

National Energy Board to decide to replace existing legislation which adds very little new except the name of a new board to be known as the national energy board. This board will have little additional power and limited scope, and at this early date we are not in a position to determine fully the importance of its contents after having had only a few hours to examine the bill.
The minister further stated this morning that in preparing this bill the government had in mind certain recommendations of the Borden commission. Well I intend to show, in the course of my remarks, how little attention the government has paid to the Borden commission recommendations. The minister also referred this morning to the final report of the Borden commission. I hope that before this debate is concluded the minister will tell the house when we may expect to receive the second or final report of the Borden commission. It may be that as a result of the very poor reception the preliminary report has received in the country, and the very little attention which has been given to it by the government, the final report of the commission may be some time in the future.
The minister also stated in the course of his remarks this morning that the present bill contains no provision to regulate coal, uranium and certain other sources of energy, and that the government had decided not to disrupt agencies involved in these commodities. I shall have occasion, in the course of my remarks, to deal briefly with this point. The minister stated, too, that this major issue if of very great importance to Canada's future and it should receive consideration by this house. I wonder why, if the issue is of such major importance, it was thrown at us by the government for discussion in second reading within a few hours after the bill was introduced.
In introducing this bill, the Minister of Trade and Commerce insisted that this was in fulfilment of an objective held by the Conservative party over the years. He then quoted a statement made in this house on February 25, 1955, by the hon. member for Vancouver Quadra, now the Minister of Public Works (Mr. Green) in which he expressed the need for an over-all energy policy. He quoted the minister as saying, let us get away from dealing with the problem piecemeal, with the different departments concerned. The Minister of Trade and Commerce then went on to quote the preamble of order in council P.C. 1957/1386 passed on October 15, 1957, setting up the royal commission on energy. This order in council referred to the different sources of energy in the form of gas, oil, coal, water and uranium within
[Mr. Robichaud.l
Canada's boundaries, and referred also to the increasing need of energy for the growing industrial requirements of Canada which renders it of the greatest importance to assure the most effective use of these resources in the public interest.
The royal commission appointed by this order in council was instructed, by its terms of reference, to inquire into and make recommendations in connection with certain matters referred to in detail by the minister in introducing the resolution preceding this bill. I do not intend at this stage to go into the details of the terms of reference of the commission known as the Borden commission, as the minister himself has spent some time in reviewing the content of the order in council instructing the commissioners to proceed with the study of Canada's energy problem. To my astonishment, however-and this notwithstanding the broad recommendations of the commission-I find that the study of the Borden commission to date has been rather curtailed and limited to certain aspects of the energy problems in this country quite far apart from the terms referred to in relation to the export of energy and sources of energy.
The first report made public in October, 1958 says little if anything about the use of coal for the production of energy; and even to this date, almost two years after being introduced, the commission has not yet seen fit to hold meetings in the Atlantic provinces. Is it because the coal problems of Cape Breton and Nova Scotia and of the Minto coal fields in New Brunswick are not important enough to warrant the investigation and study allotted to other sources of energy, or is it because the chairman of the said commission is so disappointed and upset by the public reaction to his preliminary report-or, I could add, to the government's reaction to his first report- that he feels reluctant to proceed further with the assignment of inquiring into and making further recommendations concerning the problems of such other related matters having to do with sources of energy not covered in this first and preliminary report.
The bill presently under discussion is nothing else but a mere repudiation by the government of the Borden commission's recommendation as contained in its first report. My colleague, the hon. member for Villeneuve (Mr. Dumas), referred this morning to an address given at an annual dinner of the board of trade in Toronto on February 4, 1957 and quoted remarks made by the Prime Minister (Mr. Diefenbaker) on that occasion with regard to his party's policy on the setting up of a Canadian national energy board. If we look at these

remarks made by the Prime Minister, we may ask ourselves who will select the membership of the board to be appointed following the approval of the present bill? Will it be the president of the national research council or some business organizations? Would it be through the recommendation of interested provincial governments? Or will it be a board appointed to serve the best interests of the present government?
The Prime Minister has mentioned our vast resources of gas, oil, coal and uranium. Is the board to be set up for the purpose of advising and recommending proposals with regard to our resources or would it be limited to the issuing of export permits and other minor matters relating to the operations of pipe lines or other means of energy distribution? Is it only a board to replace other existing government agencies such as the board of transport commissioners under the Pipe Lines Act and those parts of the Railway Act incorporated in the same act?
In introducing his bill, the minister has referred to the Exportation of Power and Fluids and Importation of Gas Act and also to the Pipe Lines Act of 1949 which we understand will be incorporated in the present bill. Referring to the development of sources of energy, the minister has indicated that the increasing demands for electrical power have stimulated the use of most of the readily available sources of hydroelectric power. He even mentioned the fact that thermal power units based on the utilization of coal are being constructed in increasing number. The fact remains, however, that thermal power units based on the utilization of coal are becoming more and more a question mark in the development of electrical energy. It is my feeling that proposed power plants originally intended to use coal as a generating source are contemplating shifting to other sources of generating fuel.
It seems a pity that even eight months after the publication of the first report of the Borden commission-notwithstanding statements made to the contrary even in this house by the Prime Minister himself-it appears that coal has been removed from the context of studies which Canadians have every right to expect would cover all forms of energy. The problems affecting the coal mines of Nova Scotia may not be superficially connected with the studies of the Borden commission; but no one can deny that one of Canada's basic industries is left out or even singled out as if it was not of sufficient importance to the national economy to share in what was supposed to be an important and complete study on Canada's energy.
National Energy Board
Without suggesting that the existing dominion coal board should be interfered with- and I want to be clear on this point-we of the official opposition feel that the coal problem should have played a more prominent part in the study of the Borden commission. Notwithstanding statements of assurance made to the contrary by government members, we fear that our Canadian coal industry is threatened by the wide-spread expansion of natural gas and fuel oil. This is our reason for insisting that every means possible should be taken to include coal within the sphere of a royal commission set up to clarify our energy problems.
When one peruses attentively the bill presently under study and compares it with the recommendations contained in the first report of the Borden commission, he cannot help wondering why the present government had to go into the expenditure of $200,000 or $300,000 before introducing this piecemeal legislation. Here is a government whose policy has always been'

that is, if it ever had a policy at all to rely on-to maintain complete freedom and competition of trade. Today this same government is asking us to approve a measure which will regulate the importation or exportation of electric power and gas and also the importation of gas. Furthermore, this same measure will introduce a rate regulation system which sets the tolls on natural gas and this at the board's discretion subject to cabinet approval. What kind of a deal will be offered to investors when the new rates are set up? The provisions of the present bill appear to be putting the whole regulation system on a flexible basis, but no assurance whatsoever is given as to the government's attitude towards a fair treatment of investors as well as of consumers and producers.
The first report of the commission has met with severe criticism from the Canadian petroleum association. This complex document of the Borden commission, which appeared more concerned with criticism of the previous administration than with offering constructive measures which could provide greater knowledge and broader control of our energy resources, does not agree with the views of the oil and petroleum industry in Canada. In its policy statement presented to the Prime Minister on December 15, 1958 the association expressed its views in the following terms as found in the introduction on the first page of this brief:
The interim report of the Borden commission is a lengthy and complex document. Following study of this report we wish to present a reasoned and reasonable view of constructive measures that may be taken to provide Canada with greater knowledge of and broader control over its energy resources,

National Energy Board without wastefully Inhibiting development of these resources, and at the same time:
(1)	Preserve competitive free enterprise in our country;
(2)	Adhere to the principle of honouring contracts;
(3)	Maintain sound climate for investment still needed in vast amounts to turn Canada's "potential" into "reality".
The commission's report points up the complex problems created by the growing importance of oil and gas to the economy of Canada and the resulting need for adequate machinery to deal with national energy policies and regulation of interprovincial gas pipe lines. We take issue, however, with certain specific features of the commission's recommendations and offer our suggestions in the hope that the objectives of the federal government can be attained without excessive regulation of private industry or confusion and duplication between various levels and branches of government.
It is most important, Mr. Speaker, that government-imposed regulations be drafted so as not to interfere with competitive free enterprise in our country. The objective of the federal government in dealing with energy policy and regulations can be attained without interference with private industry, as suggested in this brief, and without creating confusion and duplication between various levels and branches of government. Excessive regulations and controls will result in confusion not only with investors but with producers alike. It could bar and exclude incentive and competition within the industry, thus resulting in higher costs of production passed along to consumers. The present bill might relieve somehow the apprehensions created by the publication of the first report of the Borden commission.
I have here before me the list of recommendations included in chapter 1 of the report of the commission on the export of natural gas and crude oil. How many of the said recommendations are implemented in the present bill? When we look at the first recommendation having to do with the export from Canada of natural gas which may from time to time be surplus to the reasonably foreseeable requirements of Canada permitted under licence, we find that this recommendation is included in the bill.
The second recommendation, part of which has to do with the terms and conditions of the contract under which the export is proposed to be made and the contemplated arrangements with respect to the disposal of by-products and avoidance of waste, we find is excluded from the present bill.
The third recommendation that an export permit may be granted for a period of not more than 25 years from its date is included in the bill and was referred to by the minister this morning.

The fourth recommendation that section No. 9 of regulations respecting the exportation of power and fluids and the importation of gas made and established by order in council P.C. 1955/907, in so far as it applies to natural gas, be rescinded, has not been considered by the government in preparing the present bill.
Recommendation 6, which asks that the return on the shareholders' investment in Westcoast Transmission Company Limited permitted by the board of transport commissioners shall not result in Canadian consumers of natural gas contributing more than their fair, reasonable and proportionate share of the total return, has been ignored in the present bill.
Recommendation 7, which again has to do with the Westcoast Transmission Company Limited, is not yet at least included in the present bill. The same applies to recommendation No. 9, that any application which Trans-Canada Pipe Lines Limited may make in the future for a licence with respect to such export be considered on its merits.
In section B having to do with crude oil, recommendation No. 10 reads:
That, having regard to the present proven reserves of crude oil in Canada and to trends in the discovery and growth of reserves, the export from Canada of crude oil be permitted under annual licence.
There is no mention of this recommendation made in the present bill.
The same will apply to recommendation No. 11, which recommends that it shall be mandatory for the board of transport commissioners for Canada to exercise the powers conferred upon it under part II of the Pipe Lines Act, etc. The same also applies to recommendation No. 12, that the prices, tolls, rates or tariffs of a company owning or operating an oil or gas pipe line, as regulated by the board of transport commissioners for Canada, should be just and reasonable, nondiscriminatory and calculated to yield a fair rate of return on the shareholders' equity, after making due allowance for reasonable and proper operating expenses, depreciation, interest, income and other taxes. Again this recommendation is completely excluded from the present bill. The same also applies to recommendation No. 13, which reads:
That legislation be enacted by the parliament of Canada to enable the government of Canada to exercise effective control over the export from and the import into Canada and the movement across provincial boundaries of all energy and sources of energy.
Recommendation No. 14 that a national energy board be established is being taken care of in the present bill. The same would apply to part of recommendation No. 15, that

the national energy board be authorized to require that anyone wishing to construct an oil or gas pipe line or one intended for the transportation of petroleum products or byproducts of the processing of gas, subject to the jurisdiction of the parliament of Canada, obtain a certificate of public convenience from such board. It appears that this recommendation, at least in part, replaces some of the powers of the board of transport commissioners.
Recommendation No. 16, that the national energy board be authorized to require any company engaged in the transmission across provincial boundaries by pipe line of crude oil and petroleum products and natural gas and by-products thereof to obtain a licence from such board, is included in the present bill.
Recommendation No. 17, which recommends that from time to time other forms of energy or sources of energy be brought under the authority of the national energy board for such purposes as may be specified by the governor in council, I have not been able yet to find in the present bill in the little time I have had to examine the bill. The same will apply to recommendation No. 18, which reads:
That such divisions or branches of the various departments of the government of Canada now concerned with oil and natural gas and related matters and whose responsibilities would properly come within the jurisdiction of the national energy board be transferred to its jurisdiction.
Recommendation No. 19, which has to do with the importation into Canada of crude oil and petroleum products being made subject to licence granted by the national energy board is, according to my understanding, subject to the decision of the governor in council. Recommendation 20 provides that the national energy board has certain authorities and authorizes it to give advice and make recommendations with reference to any matter relating to energy or sources of energy to any minister or to any board or agency constituted under the authority of an act of the parliament of Canada. This is partially covered in the present bill with the exception of the portion that provides that such advice be given at the request of the minister to any board or agency constituted under the authority of the legislature of any province.
Also not implemented was the portion of that recommendation which provides that the board shall compile, study and review the statistics and estimates of the quantity, quality, location and availability of the various forms of energy and sources of energy in Canada so that the board may maintain an up-to-date inventory of Canada's energy resources. Another portion of
National Energy Board that recommendation not implemented or covered in this bill is the one directing the board to co-operate with and assist any board, agency or other authority, constituted under the provisions of any act of the parliament of Canada or of the legislature of any province, having jurisdiction relating to energy and sources of energy, in establishing standards of measurements and methods of assessing and estimating supplies of energy and their sources. The balance of this recommendation concerning the granting of licences has been covered by this bill.
Recommendation 21 is covered by the bill with the exception of subsection (a) (ii) which reads:
The advisability of encouraging the development in Canada of processing industries relating to energy and sources of energy as distinct from the export of unprocessed natural resources.
It is not too clear whether this would come within the purview of Bill No. C-49.
Recommendations 22, 23, 24 and 25 which have to do with the hearings of the board are included in the bill as is recommendation 26 relating to the submission of an annual report of the board.
Recommendation 28 relating to the appointment of a member of the board to the Canadian section of the international joint commission has not been implemented nor has recommendation 29 to which reference was made this morning by the minister and which provides that if possible reciprocal arrangements be made with the United States federal power commission to have a member of that body sit as an ad hoc observer but without vote when the national energy board is considering applications for the export of national gas from Canada to the United States or for the import of natural gas into Canada.
Recommendation 30 refers to enabling legislation and is covered by this bill. Recommendation 31 relates the coming into force of the enabling legislation and has been included in the bill. Recommendation 32 is only partly covered by the bill and recommendation 33, which provides that the board of transport commissioners exercise regulatory jurisdiction as recommended by the commission in its report, has not been included. Recommendation 34 to the effect that no special measures need be taken in relation to Trans-Canada Pipe Lines Limited in order to safeguard the interests of Canadian producers or consumers of gas has been covered by the bill.
By going through the 34 recommendations listed in the report we find that 23 have been included and 11 have been completely ignored. Out of those 32 that are listed in the present bill most represent provisions

National Energy Board already included in existing measures that are being repealed and replaced by the present legislation.
The Canadian petroleum association in its brief to the Prime Minister recommended that a national energy board could best serve the national interests if limited to fact finding and advisory responsibilities. The Borden commission also recommended that the energy board should have authority to compile, study and review the statistics and estimates of the quantity, quality, location and availability of the various forms of energy and sources of energy in Canada so that the board may maintain an up-to-date inventory of Canada's energy resources. Nowhere in the present bill do we have the implementation of such a recommendation.
Before concluding my remarks I wish to place on the record the conclusions of the Canadian petroleum association brief presented to the Prime Minister which will be found on the last page of this document. This reads as follows:
1.	That many recommendations of the Borden commission as stated in its interim report would, if implemented, result in excessive regulation damaging to the best interests of Canada.
2.	That there should be a division of energy authority as between policy making, advisory and regulatory functions.
3.	That the government should not relegate policy making to any board.
4.	That an energy board can best serve the national interest if limited to fact finding and advisory responsibilities.
5.	That regulatory powers should continue to be administered by the board of transport commissioners supplemented by the addition of an oil and gas division.
6.	That it is vital to the national interest that greater utilization of western Canada's surplus gas reserves should not be delayed and that the existing board of transport commissioners be used to expedite action at the federal level in current gas export applications.
7.	That elimination of "leverage" on pipe line shares would hinder the financing of new pipe lines in Canada, would reduce opportunity for public investment in pipe lines and would inevitably increase the cost of oil and gas to consumers.
8.	That all private business is based on sanctity of contract and no changes in government policy should be made that would fail to uphold that principle.
It is doubtful, Mr. Speaker, if the new board will meet the wishes of the industry concerned. A substantial amount of the taxpayers' money has been spent without achieving the results and accomplishments expected. Before introducing the present bill to establish the energy board the government would have been well advised to give further consideration to recommendation 18 of the commission's report which reads as follows:
That such divisions or branches of the various departments of the government of Canada now concerned with oil and natural gas and related matters and whose responsibilities would properly come

within the jurisdiction of the national energy board be transferred to its jurisdiction.
In other words our energy problems are so vital to Canada's economy that every division or branch of the various departments of the government of Canada now related to oil, gas, coal, uranium or other sources of energy, could properly come, not only within the jurisdiction of the national energy board but perhaps under the jurisdiction of a separate department of the government.
While the present bill calls for a board to consist of five members, a government whose charges of waste and extravagance were so frequent in the past could well give consideration to limiting the members of the board to three as suggested in the Borden report. In fact, the limited coverage of the present bill is an indication that the responsibilities involved could well have been taken care of by a board composed of three members instead of five as suggested in the bill.
Why has this bill, an entirely new piece of legislation, been thrown at us on 48 hours notice? We are being called upon to discuss a bill of 101 clauses, an entirely new bill, which was given first reading on Tuesday of this week and which the leader of this house was insisting that we should discuss on second reading no fewer than two days later. Now that we have been given an extra 24 hours to examine this empty piece of legislation, we are asking ourselves why such a rush on the part of the government? Now that they have waited two years before introducing this measure, why all at once this anxiety to see it through? Why, in fact, has it been introduced before the final report of the Borden commission is made public? Is it because the government is afraid to face the unpopular repercussion which has resulted from the preliminary report? Is it because the government is more anxious to legislate by cabinet decisions than by approval of parliament? We recall, Mr. Speaker, the attitude of the members of the present government when they were sitting in opposition in 1955 and were criticizing the government because the minister of defence production was asking for certain powers which he may have to use only in an emergency. We well remember the objections which were raised at that time.
My time is limited, but before resuming my seat I would suggest that this bill be sent to a special committee of the house where representatives of the industry concerned could make representations and where the bill could be given the proper study it deserves.


Mr, Harold E. Winch (Vancouver East):: Mr. Speaker, it is with regret that I have to state on rising to speak on Bill No. C-49, to provide

for the establishment of a national energy board, that I am bitterly disappointed in the bill as proposed at the present time. We in this parliamentary group have for years been expressing the need in every session for both the establishment of a national energy board and, perhaps of even more importance, a national energy policy. I can well recall when a number of the present members of the government were sitting on this side of the house to our right on those occasions, and the remarks that they had to make in support not only of a national energy board but of the establishment of a real national energy policy. Naive as I am, after all those years, I did have the thought that perhaps in this respect at least they were sincere and that when, after two years consideration in the seats of government, and after receiving the reports of a royal commission, they had reached the time of introducing a bill, it would really be a worth-while bill.
As I said, Mr. Speaker, I feel bitterly disappointed. In the first place, the provisions of Bill No. C-49, although it does establish a national energy board, do not contain the authority either for a fact-finding body or the administration of a national energy policy.
I say, Mr. Speaker, that the introduction of this bill, saying it is the national energy board, is a sham and a shibboleth on the members of this house and the people of this country because a national energy board should be exactly what the term implies, namely one that deals with energy in this country.
We fully realize that there are conflicts in jurisdiction. There is the jurisdiction which is strictly federal; there is the jurisdiction which is provincial; there is the jurisdiction which is interprovincial, and there is the jurisdiction which is international. Surely it should have been possible for the government to draft an act which would give full power, within the jurisdiction of the parliament of Canada, to this board, and to have given also the board at least a consultative and advisory capacity which would try to work things out on an interprovincial as well as an international basis.
I do not think the government is trying to fool us-it cannot fool itself either-but you cannot have a national energy policy that does not take in every province and everything of an energy-producing nature in this country. If you are going to have a national energy policy you cannot consider electrical power on a provincial basis. There has to be a plan on what is known as the grid basis, as they have in the United Kingdom, a complete tie-in and control on a grid basis; that is, a tie-in of power inter-provincially and nationally. In so doing, there
National Energy Board is then the question as to whether the power should be hydro, thermal, coal or nuclear. I cannot conceive of that kind of plan being evolved except under-I will use the word "direction"-at least the consultative and advisory direction of the federal government, because power is of such an integrated nature and the developments of science are proceeding so rapidly that the best interests of the country can be served only by at least a federal body which recognizes the well-being of all Canada in so far as power is concerned, whether it be coal, thermal, nuclear, hydro, gas or oil. The fact that that principle is not recognized in this bill is, I say, a betrayal of Canada, because we are now at a time when decisions have to be made and if not definitely undertaken at least studied, and some central body should have the authority and direction to work on this most important subject.
I am most bitterly disappointed that the government has been so derelict in its understanding of the problem of the need of power that something of this nature and direction is not included in any way whatsoever in this bill. No authority whatsoever, as far as I can read the bill-and I have read it three times now-is included to enable this board when established to be able to proceed.
I am not going to speak at all, as the previous speaker did, on the Borden report itself, but I do think that note should be made as to who was the chairman of that commission. If my information is correct, and I think it is because I got it from the Financial Post directory, Mr. Borden is president of the Brazilian Traction, Light and Power Company Limited, which company I understand also has certain dealings in gas in Brazil; chairman of the Canadian board of the Norwich Union Life Insurance Company and the Norwich Union Fire Insurance Society Limited; a director of the Bell Telephone Company of Canada, the Canadian Bank of Commerce, Canadian Fund Incorporated, Investment Fund Limited, International Business Machines Company Limited, National Trust Company and Massey Harris-Ferguson. He is a man who, I presume, has vast experience as a financial and industrial baron and as chairman of this royal commission he was actually investigating the operations of the financial and industrial barons of Canada.
I am going to say, because I think it is correct and therefore should be said, that with his knowledge and experience with respect to industry and finance and examining the operations of industry and finance in Canada he brought in his recommendations as a royal commissioner having in mind what

National Energy Board is in the best interests of Canada. It is rather amazing that a man of his experience and background, having examined the operations of his colleagues in Canada, should feel that in the interests of Canada certain things should be done to protect the Canadian people and yet in the vast majority of cases the government has not seen fit to follow the findings and recommendations of his report.
As I said, I am not going to speak on the actual report itself about which a great deal has already been said. What I want to do in the time I have available is to take the bill and draw what I think are very pertinent facts to the attention of the members of the house. We are discussing the principle of the bill so may I refer first of all to the explanatory note respecting the bill. I want to place particular emphasis on the explanatory note, especially the first half of it. This is what it says:
The purpose of this bill is to establish a national energy board which shall,-
I emphasize the word "shall".
-in order to assure to the people of Canada the best use of energy resources in this country, regulate in the public interest the construction and operation of oil and gas pipe lines subject to the jurisdiction of the parliament of Canada, the tolls charged for transmission by such pipe lines, the export and import of gas. the export of electric power and the construction of those lines over which such power is exported.
I think it is to be expected that the principle of the bill would be explained in that first explanatory note, and it definitely states that the principle is to establish a national energy board which shall assure to the people of Canada in their best interests, in the public interest, certain policies, which shall establish certain regulations and shall establish certain tolls and tariffs. Having regard to the principle of the bill I say that the explanatory note as to the principle underlying the bill is not correct in that nowhere in the bill can you find that the board to be established under this legislation shall have the power as a board to implement in the public interest what the explanatory note says is the purpose of the bill.
I think that any constitutional lawyer or lawyer skilled in interpretation will agree that the two most important words in any statute of a legislature or of the House of Commons are the words "may" and "shall". I cannot remember very many acts that have come to my attention that have had so many "mays" and "shalls". But remembering what is supposed to be the principle of the bill and the powers of the board I draw to your attention, Mr. Speaker, and to that of members of the house where the word "shall" appears and where the word "may" appears. "Shall" is mandatory; "may" is permissive.

In a few sections of the bill "shall" is used a great deal. We find that there shall be a board consisting of five members. We find that the commissioners shall live in Ottawa or within 25 miles thereof. We find that the chairman, vice-chairman, and the other three members shall be paid certain remuneration. We find that the head office shall be in Ottawa. We find that there shall be a secretary appointed by the governor in council and that he shall live in Ottawa or within 25 miles thereof. There are some very definite "shalls".
When we go beyond the provisions respecting appointment of the members of the board, their salaries, where they shall live and the staff of the board and come to the powers of administration of the board it is truly remarkable how the word "shall" disappears and is replaced by the word "may". In section after section we find that, so far as policy and administrative powers are concerned, the board is not a policy making or administrative board at all. It is a political stooge of the government in power. If those hon. members who are now giving vent to sarcastic laughter have read the provisions of the bill they will know that the wording is "may", subject, almost without exception, to approval of the governor in council. I have to speak on the principle of the bill and I shall speak on the principle of "may" and "shall".
When we come to the real purpose and principle of the bill, the powers and the policies of the board, we find that on page six of the bill there is provision as to orders and decisions of the proposed board and that any decision or order of the national energy board may, for the purpose of enforcing thereof, be made a rule, order or decree of the exchequer court or of any superior court of any province. An order, decree or decision of the board is only permissive from the point of view of enforcement thereof by the exchequer court or any other court. Having made a decision, order or decree we find that under the principle of the section the board may review, rescind, change, alter or vary any order or decision. But that is subject to-the governor in council. We find, as we go through the bill that the same thing applies to almost all the regulations and administrative powers of this new, proposed board.
When it comes to what I presume is the major principle in the bill, that is the power of issuance of certificates for pipe lines and international power lines, we find that the bill does not say the board shall be able to issue a certificate for a pipe line or international power line. No, it says the board may, subject to the approval of the governor

in council, issue a certificate for a pipe line or international power line. Not only has the board not the power within itself to deal with the purposes for which we understood this bill would be introduced, but under the provisions of this bill they cannot even revoke or suspend any licence which they grant with the permission of the governor in council except with the approval of the governor in council. They cannot issue a licence without approval, and they cannot revoke or suspend a licence without approval.
I say that this principle of "may" makes the board subject at all times to the governor in council and makes it a political stooge and not a policy making or administrative board. We heard much from the minister when he spoke on this bill, and we read about the principle underlying this bill as contained in the explanatory note which I read a few minutes ago, indicating that the board shall have the power to make orders with respect to traffic, tolls and tariffs. But what does the bill say? The bill says that the board may make orders with respect to matters relating to tolls, traffic and tariffs.
If the government is sincere in the purpose for which this bill is introduced, will they kindly explain why, in connection with a major purpose which is tolls on gas and oil, the bill merely says in clause 50 that the board may do this. Why is everything subject to the governor in council and political expediency control? I do not think any of us in this group or amongst the general public expected that kind of bill to be introduced by this government. This principle goes all the way through the bill, that the board may make orders with respect to traffic, tolls and tariffs, but under governor-in-council control.
Once again I might say, as I did a few minutes ago, when it comes to the issuance of certificates for oil pipe lines, if this board wants to disallow or reconsider the issuance of a certificate it is a question of "may", not a question of "shall". This board does not have very definite administrative powers. So, we go all the way through this bill to the section dealing with the transmission of oil and the principle in this bill is that if the board has something important to do in connection with the transmission of oil, the board may, if it considers it necessary or desirable to do so in the public interest, require a company to do so and so. If the board finds, in the words of the bill, it is necessary or desirable to do something in the public interest, then why should the bill say that the board may take certain action? Surely, it should be that the board shall, in the public interest, exercise its power.
National Energy Board
As it is in connection with the transmission of oil, so is it in connection with the transmission of gas. Once again we find that if the board finds action necessary or desirable in the public interest it may take certain action. Surely, if honesty, sincerity and integrity mean anything to this government, then if it is in the public interest and if it is advisable for the board to do something the bill should provide that it shall be done, not that it may be done. All the way through, in section after section, when we come to the powers of the board under this bill there is no provision that they shall do things in the public interest; it says they may do something in the public interest. Whether or not the board may do something in the public interest is not determined by the board, but by the governor in council. I do not believe I have ever read a bill drafted in the way this one is.
If you want to go through the bill clause by clause until you come to the provision for the transmission of gas in clause 61 you will find that when it comes to the equalization of the differential between costs, if the board finds it a right thing to do, then they may take certain action. It is not that they shall, but that they may. Mr. Speaker, I say that in legal terminology the words that mean so much are "shall" and "may". The proof of the sincerity of the government moving a bill of this nature is also found in the terms "shall" and "may". A reading of this bill now before us shows that in small things like the salary of the members, how many members there can be and how long they can continue to hold office, the word "shall" is used. These are very important provisions, I realize, and the government must have given a great deal of thought to them. However, when it comes to the major provisions of the bill concerning the powers of the board itself, it is always "may" and almost without exception, subject to the governor in council.
As I said at the outset, I find myself very keenly disappointed in this bill. We had looked forward to a real bill establishing a national energy board that would have authority, that would have the powers of administration and investigation, that would have everything permissible which would enable them to do a task which is a basic requirement and an immediate necessity for Canada, that is develop a real national energy policy covering every province of our nation and all the resources which are capable of the production of energy. This bill represents a start. All I can say is it ought to be able at least to crawl if it cannot walk or run. We hope that before this bill passes, with the knowledge of modern science, the

National Energy Board knowledge of modern medicine, the knowledge of the new economists, that somehow or other the minister who introduced this bill will give it a hypodermic and bring it to life.


Mr. J. H. Horner (Acadia):: Mr. Speaker, it may be a surprise to some of the members of this house to hear me speak on gas and oil. However, I should like to inform the house at the outset that gas, particularly dry gas, is of great interest in my constituency. Throughout the past half dozen years there have been established throughout the eastern part of Alberta numbers of settlements which have sprung up primarily owing to the gas industry. In some places there is a considerable amount of oil. I therefore feel that I should perhaps say something in this debate.
I noticed that the hon. member for Gloucester (Mr. Robichaud) asked the question, "Why spring this on us in 48 hours?" I am certain that the people in my constituency and the people in Alberta generally would not think that this government has sprung this on anybody in 48 hours. The Borden commission sat and looked into the gas industry and studied it. It was announced in the speech from the throne that an energy board would be set up. I cannot see where the hon. member gets the idea that only 48 hours' notice was given. It appears to me that he had at least four months' notice.
Then the hon. member goes on and wants to refer this matter to a committee. He refers to the recommendation in the first report of the Borden commission. I am certain a great deal of study has been given to this matter. By sending it to a committee there would just be a great deal of repetition of what has gone on before.
When the Borden royal commission was set up it was instructed to look into the policies that would best serve the national interest in relation to the export of energy and sources of energy in Canada, the problems involved, and the extent of the authority that might be best conferred on a national energy board. In brief, that was what the commission was to study. It was also pointed out that the Borden report contained 34 recommendations. Some hon. members who have already spoken have said that the Borden report was not considered. As was pointed out, 23 of the recommendations were accepted.
In setting up the Borden commission this government was not necessarily saying that it would accept every recommendation which the commission brought forward. I think they have given a great deal of study to this matter. I commend the Minister of Trade

and Commerce (Mr. Churchill) for the great amount of work he has put into this bill and the considerable amount of work that went into the drafting of it. I certainly think that the recommendations in the Borden report are evident in the drafting of this bill.
First of all, the Alberta conservation board have said they have a surplus of gas. Then the energy board will have to study the matter and see whether Canada has a surplus. In the report I think it is suggested that it has a surplus. I hope that in the near future we can export that gas. However, as was pointed out by the Minister of Trade and Commerce, before any gas can be exported, the federal power commission of the United States will have to consider the question of whether they want to import gas. As the minister pointed out on May 18, a great deal of work has been done with the federal power commission in the United States in trying to bring about a flexible arrangement and one mutually satisfactory to the two parties. I sincerely believe that things will work out and that we shall export gas in the near future.
There are some who believe that the energy board, when it is set up, should control the exact profits of the industry. To anybody who believes that such a board should control the exact profits of an industry in which so much risk is involved, may I say that such a procedure might prove to be detrimental to the rest of Canada. It might have the general effect of slowing up the development of that natural resource which is the source of so much wealth and with which this country is so abundantly endowed. I would say that a great deal of consideration and study should be given to the matter before any thought was given to controlling the exact profits a company might make. Anyone who has had any experience with wells or has watched a number of wells being sunk in Alberta will know that there is a great deal of risk and a great deal of expense in connection with the drilling of wells and the finding of dry holes.
I see no objection to setting up the tolls on the gas lines. I think it is a good step. I do not think this procedure will in any way hinder the development of this industry. This government has provided for the setting up of an energy board. I think it is a good step. The board should consider the protection of Canadian interests. I am not a lawyer, but on looking over section 44 of the act, in connection with certificates of public convenience and necessity in the construction and operation of pipe lines, I find the following:
44. The board may, subject to the approval of the governor in council, issue a certificate in respect of a pipe line or an international power line if

the board is satisfied that the line is and will be required by the present and future public convenience and necessity, and, in considering an application for a certificate, the board shall take into account-
It then goes on to list five things which it shall take into account. One of them which has been evident in today's debate is found in paragraph (d) which reads as follows:
(d) the financial responsibility and financial structure of the applicant, the methods of financing the line and the extent to which Canadians will have an opportunity of participating in the financing, engineering and construction of the line;
I think this legislation sets out clearly that the interests of the Canadian people will be protected before any certificates are granted to any pipe line, and that they will certainly take a close look at the financial structure of those pipe lines. I may be wrong, but in section 47 the bill goes on to provide as follows:
47.(1) Subject to subsection (2), the board may by order, with the approval of the governor in council, revoke or suspend a certificate if, in the opinion of the board, the person to whom it was issued has violated or failed to comply with any term or condition thereof.
I think it is set out clearly that we shall have a certain amount of control over the financing, that there will be regard for Canadians and that there will be an opportunity for Canadians to participate in the financing of a given pipe line.
In the province of Alberta a surplus of gas has been declared. Right now the industry is waiting to see whether gas can be exported to the United States. As I said before, the federal power commission of the United States must first grant permission before any gas can come into the United States. As a resident of Alberta and of my own constituency I know that this could well mean a great deal more activity, a great deal more employment and a great deal more development in Alberta. I hope that in the near future we shall export gas.


Augustin Brassard: Mr. Speaker, one of the first questions which comes to the mind of any member of this house who is interested in the subject of energy is this: Why has it taken the government so long to introduce the legislation now under consideration? Those who have followed the matter recall all too vividly the words of the present Prime Minister (Mr. Diefenbaker) when he spoke in Toronto on February 4, 1957. Here is what he said when speaking to the annual dinner of the Toronto board of trade:
There is a need now for the setting up of a Canadian national energy board.
National Energy Board
Then I shall skip a few words referring to the composition of the board and again quote the Prime Minister:
-to the end that the most effective use of the energy resources of Canada in the interests of the public welfare may be assured. We have vast resources of gas and oil and coal and uranium. I believe that the time has come to set up such a board whose duty it would be to advise and recommend proposals regarding these resources so that they may be safeguarded from prejudicial action now, ill-timed action to the detriment of this and future generations.
I want, Mr. Speaker, to draw attention to the Prime Minister's use of the word "now" for the setting up of a national energy board, and his further expression that the time has come to set up such a board. That was a call for immediate action. Four days after he had spoken in Toronto the Prime Minister, then leader of the opposition, spoke in the House of Commons, and again expressed the view that there was a need for the setting up of a Canadian energy board. In this regard I would like to quote from Hansard for February 11, 1957, page 1159. This is what the Prime Minister had to say at that time:
In order to meet the industrial demands of Canada's future there is a need, as is set forth in the Gordon commission report, for the setting up of a Canadian energy board with a membership composed of technical personnel which might be selected by the ministers of the departments particularly interested and also by the president of the national research council. Upon that committee as well there should be representatives of industry and of the dominion and provincial governments to the end that the most effective use of the energy resources of Canada in the interests of public welfare may be assured.
So it is perfectly clear that at that time, in February, 1957 the present Prime Minister believed in and actively advocated immediate action to set up an energy board. In the circumstances it was not unreasonable, when parliament met in October, 1957, that hon. members fully expected that at the opening of parliament the speech from the throne would forecast legislation to implement the policy advocated by the Prime Minister and to establish a special board to deal with energy in all its forms. However, the speech from the throne made no mention of legislation to create such a board despite the statement of the Prime Minister in February of 1957 both in and outside the House of Commons that the time had come to set up an energy board.
But on the following day, October 15, 1957 the Prime Minister announced the setting up, not of an energy board but of a royal commission to inquire into the policies which would best serve the national interests in relation to the export of energy and sources of energy in Canada. This commission, the Borden commission as it is popularly called,

Private Bills
was also directed to make recommendations as to the extent of authority which might best be conferred on a national energy board. The terms of this commission will be found in Hansard of October 15, 1957. To say the least, Mr. Speaker, this was a strange way of making progress. The Prime Minister had advocated the immediate setting up of the board in February, 1957, but by October of that year it seemed necessary to ask the Borden commission to recommend the policies with regard to energy that would best serve the national interest and also to tell the government what powers and authority ought to be conferred upon that board.
It can justly be observed, I think, that the national energy board was put into a deep freeze, and though many observers understood that the unfreezing process would last until the election was over, not even the most cynical of these observers believed that it would take 19 months to unfreeze the board and bring it to life by formal legislation. It was not only the formation of the proposed board that was frozen over that long period. During that whole time the country, the members of this house, the public, the oil industry and investors generally, remained in complete ignorance of the policies which this government intended to follow as to the export of natural gas and energy in other forms, and indeed with respect to all forms of energy.
I have read with care what the minister said last Monday when he opened the debate on the resolution introducing the bill, and I find even yet no positive statements as to government policy on this very important aspect of the development of our natural resources. I find it even harder to understand that the minister, who spoke this morning, was not more precise in his words about the policies of the government than he was in his introductory speech when the resolution was before the house. Mr. Speaker, as we know, parliament was dissolved in February, 1958, and not unnaturally the subject of natural gas cropped up in the election.
May I call it five o'clock, Mr. Speaker?


Mr. Speaker:: It being five o'clock the house will now proceed to the consideration of private and public bills, the former having precedence, pursuant to section 3 of standing order 15.



PRIVATE BILLS


[Stage Direction]
The house in committee on Bill No. S-17, to incorporate Export Finance Corporation of Canada Limited-Mr. Muir (Lisgar)-Mr. Rea in the chair.

On clause 1-Incorporation.
Mr. Muir (Lisgar):: Mr. Chairman, in my remarks on second reading of this bill I endeavoured to set out in some detail the purposes in setting up this Export Finance Corporation. Today, however, I should like to discuss briefly the importance to Canada's export business of the credit facilities that will be offered by this proposed corporation.
Under present circumstances Canada is at a very serious disadvantage in a highly competitive export market in that many of her products have to be sold for cash. In many instances the sale of Canadian goods is limited to the amount of exchange available or to the credit offered by foreign lending agencies. In other words, we have been losing prospective customers because of our inability to provide the necessary long range credit.
The Export Credit Insurance Corporation which is a crown company will insure sales of Canadian exporters to the extent of 85 per cent of the value of such exports. It does not, however, make loans to exporters nor do we have any such lending facilities in Canada at the present time. The chartered banks are not generally interested in long term loans of this nature and the proposed export finance corporation will complement rather than compete with the chartered banks.
The Toronto Globe and Mail, commenting editorially on Canada's export position in the May 21 issue, had this to say:
Two recent developments may help the situation. The throne speech which opened the present session of parliament revealed that amendments will be made to the Export Credit Insurance Act which will "increase the range and effectiveness of the guarantees provided for financing exports".
The second development is the formation of the Export Finance Corporation of Canada, a private company whose bill of incorporation is now well on its way through parliament. The company would have a lending capacity of $500 million to expedite foreign trade, and would accept payment in several currencies.
The new company should be given every encouragement. Whether it alone will be able to meet the demand for credit remains to be seen. If it does not, there is no reason why the government cannot establish its own credit agency. The United States, in addition to the government institutions, has about 35 private firms in the export credit business, so public and private agencies can work together in this field.
The important thing is to establish credit facilities now, before it is too late.
The United States, in addition to the export-import bank, a government agency, has some 35 private firms in the export credit business, and other exporting countries have similar lending agencies. In order to put Canada on a competitive basis in her foreign trade it is necessary that we should have

facilities such as are offered by the proposed Export Finance Corporation for extending long term credit for our exporters of manufactured and farm products. To be in the position to trade for less cash on the line, and more extended credit it should not be necessary that sales of our manufactured and primary products should depend on credit supplied by foreign lenders.
The banking and commerce committee was told that the sale of $28 million worth of Canadian wheat to Poland was financed by lenders in West Germany. With private Canadian capital willing to provide these funds, through the lending facilities of this proposed corporation, it would seem rather ridiculous to leave the extension of our export trade to the whims of foreign capital.
I did not intend to go into too much detail at this stage but one hon. gentleman opposite who was not present at the second reading stage of this bill asked me to refer to it in detail. I shall briefly set out the purposes of the bill and outline the type of service this corporation will provide.
In the first place it will provide credit assistance to Canadian exporters. This means the discounting of foreign trade papers received by Canadian exporters as a result of sales abroad. Such financing could be with or without export credit insurance and with or without recourse against the exporter as the case may be. Transactions which are eligible for export insurance could be negotiated with a minimum of formality and with speed. It is expected that this type of business will amount to 10 or 15 per cent of the total business transacted by the corporation. This estimate is arrived at on the basis of United States statistics and the experience in other countries.
There will also be credit assistance to foreign buyers of Canadian goods and services. This means the discounting of foreign commercial paper usually guaranteed as to the availability of the exchange and otherwise by the national bank of the exporter or supported by other forms of guarantees. Business of this type would constitute roughly 50 per cent of the financing activities of the corporation.
Commercial trade paper issued in accordance with the regulations in the respective countries and receiving the appropriate guarantee is a comparatively safe form of investment. For the most part commercial banks establish credits and make loans on the credit of the borrower. The corporation would depend mainly on collateral for its security. Thus a Canadian exporter with a capital of, say, $10,000 might negotiate an export order for $200,000 through the proposed corporation.
Private Bills
There would be participating financing. That means a transaction in which the corporation would participate with others such as Canadian and foreign banks, for example. The corporation would engage in project financing. Financing of this type would assist a Canadian manufacturer who might wish to establish a branch factory in a foreigB country. The financing would be substantially limited to machinery and equipment and to goods and engineering services exported from Canada in connection with a project abroad.
In some cases exporters may sell provided they are willing to accept part or full payment in foreign currency. Such foreign currencies are usually convertible into dollars. The corporation in appropriate cases will guarantee dollars to the Canadian exporter where a foreign currency is stipulated in the payment terms. The major exporting countries of the world have facilities for financing exports on a long term basis in the categories indicated and such facilities do not yet exist to any degree in Canada.
It is characteristic of all commercial banks throughout the country that they do not engage in long term financing of the type envisaged by the proposed corporation. On the other hand private banks and syndicates of individual companies and special corporations constituted in the respective countries provide such facilities on a large scale. As I said before, the services of the proposed corporation will complement but will not compete with services provided by chartered banks. The corporation cannot successfully exist without assistance from the chartered banks in Canada.
This bill has had a thorough review, first in the committee on banking and commerce of the other place and then in the committee on banking and commerce of this house. In supporting this bill I am convinced it will serve a useful purpose in the pattern of our export trade.


George James McIlraith: Mr. Chairman, those persons in Canada concerned with our foreign trade will, I am sure, welcome this private bill and its passage by the Canadian parliament. It is perhaps rather elementary to stress the importance of our foreign trade in our economy and perhaps it is not proper to discuss in detail at the committee stage of a private bill the problems that beset our export trade. But it seems to me that our foreign trade today is in considerable jeopardy and beset with more than the usual problems which confront it, not only because of the organization of trade blocs in the world and the difficulties of exchange but also because of some internal matters within Canada.

Private Bills
Of course, one of those internal matters within Canada is the high cost of our exports, the high cost of the products that our exporters have to export. This is something that perhaps could better be discussed on the trade and commerce estimates. Perhaps it is not appropriate to discuss it here other than mentioning it.
But we have two other problems constantly confronting our exporters. One is the handicap in Canada of easily accessible information on the subject of shipping; that is from Canadian firms doing business in Canada. It is quite true that the information can be obtained, but we simply have not an abundance of Canadian firms in that kind of business with all the information readily available for any type of shipment and any type of shipper in any part of the country.
The other difficulty is a comparatively new one. It is the matter of giving the required credit which competition between exporters from the different countries require if we are to get the sale and this bill sets up a private corporation which can do much to meet that need. Many orders are now being lost to Canadian exporters, not because at the price, not because of shipping difficulties, not because of quality but because the Canadian producer or manufacturer is simply not able to grant the term of credit required to obtain the order. He cannot do this because he requires his own money to operate his own business and he can find no way of discounting his commercial paper. It is quite true that the banks do meet part of this need but they are necessarily and properly limited in the field in which they can operate, particularly in the short term requirements of bank lending.
It is also quite true that some finance companies have done a little to help in this area through indirect methods, but there is no Canadian corporation directly engaged in this business. So far as I am aware, this '.s the first Canadian corporation to come into this business. I think I am correct in that. I am sure that all members would, therefore, wish it well and recognize the need that it will meet.
This whole question of discounting paper for exporters is one that is very much a problem today in the export business, and this bill will undoubtedly go far to meet that need. I am quite sure that hon. members would welcome other corporations to come forward and carry on this enterprise. When I say that, I am not in any way detracting from my wishes for success of this corporation; but the field is so wide and there is such need in this field that it is to be hoped

that not only will the business of this corporation expand rapidly but that others will come into the field.
As I work out the amount that this corporation will be able to do in this field I see that its capital setup is of the order of $50 million. I would take it that their lending capacity would probably, in the natural course of events, be about $400 million. Now, in terms of our export trade that is not a very big item. There is room for others and there is plenty of room for expansion of this corporation.
To me, it is a rather shocking thing that many of our export orders today are financed through other companies not operating either in the importing country or in the exporting country but in completely unrelated countries, and that volume of business is lost to our country as a whole. In addition to losing that business we have undoubtedly lost-and I am aware of no way of getting statistical information on this-a great number of orders because the financing of the transaction could not be arranged. It is something outside the field of the exporters' own activities to have export financing information pertaining to all countries in all continents of the world, and yet it is a very necessary service and one that can best be provided by experts, specialists, in that field.
Holding the very strong views that I do about the importance of our foreign trade, and appreciating the problems that beset it, and particularly this one of financing exports, I welcome this legislation and wish the corporation well. I am not well informed on the personnel of the incorporators. I have not too much information, but I understand they are quite reputable financial people of high calibre.
There was a little confusion in the committee about where the Export Credits Insurance Corporation fitted into this. It is unfortunate that there is some similarity in the names, but the Export Credits Insurance Corporation is in another field altogether. It is a crown corporation which was set up, as hon. members well know, at the end of the war to insure the risk of sales to countries that had been devastated during the war in an effort to help Canadian exporters retain markets that had been lost through the ravages of war. But the two corporations are fully complementary, one to the other. They in no way conflict. I can see no point of conflict between the two corporations. It is in some respects unfortunate that the names are so similar, particularly since one is a crown corporation and the other is a private corporation; but bearing in mind the fact that this corporation is to operate in

foreign countries and therefore has to translate its name into many foreign languages, I see no way of overcoming that slight difficulty in the choosing of names, and I see no objection to it.


Mr. Herridge:: Mr. Chairman, according to the bill the objects of the corporation shall be:
To finance and facilitate exports and imports and the exchange of goods and services between Canada and any nation of the commonwealth of nations or other nations, and between agencies or residents of Canada and such nations, or agencies or residents thereof.
I am sure no one can disagree with the purposes of this bill and the objects of the corporation, particularly in view of the fact that I read an item in the Toronto Star of May 20 of this year entitled:
"Should Be Ashamed"
West Germans Finance Our Wheat Exports
A Montreal trust company executive said yesterday a $28 million sale of Canadian wheat to Poland is being financed by West Germany because appropriate credit facilities are not available in Canada.
"We ought to be ashamed of ourselves," the commons banking and commerce committee was told by Stanley Stanger of the Guardian Trust Company of Montreal.
I quite agree with that gentleman's comment. We certainly ought to be ashamed of ourselves when we find such a situation. In the first place, Mr. Chairman, I must say that we in this group regret that the government has not taken the initiative in this matter by introducing a bill to establish a government corporation to meet the need for export credits. However, this bill has been introduced by persons who recognize the need for this type of assistance to exporters and in all fairness I cannot but congratulate them on their initiative, incentive and enterprise in their effort to do what they can in this respect to meet the need. As the former speaker mentioned, I think it will require a great deal more than this bill to meet the need of Canadian exporters at this time.
During recent years, particularly during the last two years, there has been increased recognition of the fact that there must be an extension of facilities for the provision of credit to exporters from Canada. That was brought home to me very strongly during the last week when we heard representations, briefs and evidence from persons representing various sections of the pulp and paper and lumber industries of Canada. While, as the hon. member for Ottawa West said, this is not the occasion on a private bill to deal at length with Canada's trade situation and the serious position of many exporters, I think it is worth while to quote a paragraph or two from some of these briefs to indicate the situation of the exporters of our primary
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products at this time, particularly the pulp and paper people and the lumber industry.
We heard a most interesting brief from the Canadian lumbermen's association. Witnesses on behalf of this company outlined the situation of the industry because of loss of markets, declining markets overseas and competition from other countries and the need for credits to assist certain sections of the industry. I quote from page four of the brief:
It would be possible to expand on the difficulties with which the timber industries ol Canada are continually faced. Suffice it to say that any realistic investigation will quickly convince the investigator that conditions are becoming ever more difficult and that aid in rectifying present unsatisfactory conditions is urgently needed.
Then we heard another very interesting brief from the woodlands section of the Canadian pulp and paper association which dealt with the same question. They all emphasized the difficulties of their industries in maintaining markets abroad, and on page two of their brief they bring that to the attention of the committee in this way:
Our share of the world's markets declined substantially in the recent period of world pulp and paper expansion. Here again, the facts can be seen in reports of the dominion bureau of statistics, and we would be glad to make them available to you.
Then they go on to say:
We believe it should be a matter of great concern to the government of Canada that these trends be halted, as otherwise there will be serious inevitable losses to our future economy.
Then there was a brief in which I was particularly interested which was submitted by the forest industry associations of British Columbia. It is interesting to me that adversity always drives people together. I believe this is the first time in the history of Canada that all sections of the pulp and paper and lumber industries of British Columbia have presented, as it were, a united brief to the government of Canada or to a committee of this house. The persons who presented this brief, which is an excellent one covering very fully the problems of all the lumber industries in British Columbia, dealt at length with the problems of overseas markets, increasing competition and lack of export credits. I quote briefly from page 31 of the brief:
In the field of pulp and paper our main concern is the decline of Canada's relative position in this important activity. It is substantial enough to give cause for alarm. We have lost over one million tons annual production not only to our chief competitor but also our chief market. We earnestly suggest that it would be in the interest of the national economy if all aspects of this decline were examined by the government and the feasibility of aggressive tax incentive policies was fully and carefully examined, as a method of overcoming some of the physical disadvantages that presently beset us.

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Later we heard from a most interesting gentleman. I had never had the pleasure of meeting him before and I must say it was most refreshing to listen to his frank comments. In my opinion it is most refreshing to hear people say exactly what they think about certain questions even when you do not always agree with them. I enjoyed his testimony very much indeed. This gentleman dealt particularly with Canada's overseas trade position and emphasized the need for export credit. You must remember that the pulp and paper and lumber industries of Canada represent somewhere between 8,000 and 9,000 units but of these 8,000 to 9,000 units there are about 200 major concerns and the remainder are what we would term small industrial enterprises, which shows the large contribution they are making to the economy of the country. This gentleman dealt, with some heat on occasion, I admit, with our trade policies, our trade situation and the need for export credits and government action in this direction.
As I said previously, this bill is an attempt on the part of certain persons with initiative and enterprise to do something at least in a partial way to meet this growing need, and on that account we in this group support the bill. But the need is so great, as the member for Ottawa West mentioned, and the matter is of such urgency and importance that we believe it cannot be met in full and satisfactorily without action on the part of the government. Therefore we look forward to the introduction soon by the government of a measure that will provide for the establishment of a national corporation or agency that will satisfactorily meet the needs of our exporters and to that extent assist in the development of our overseas trade which is so important to Canada as a whole and so important to those persons who depend upon our export industries for their livelihood and welfare.


Mr. Broome:: Mr. Chairman, I was very interested in the remarks of the previous speakers, particularly those of the hon. member for Lisgar when he went into some of the background of the bill. This may not be too pertinent at the committee stage but it is more or less essential because unfortunately the minutes, testimony and findings of the banking and commerce committees of the house and of the other place which considered the bill have not been published. As a result, this is the only record there will be for succeeding parliaments to look back on.
It is well that all phases and aspects of this particular bill be considered, although you can see there is general agreement on all sides of the house that this measure will be of advantage to this country, and it has the endorsement of all parties. It is true that the

hon. member for Vancouver East and his colleague, the hon. member for Kootenay West, deplored the fact that it is not a government agency that is carrying out this purpose, but rather a private agency. A reading of the testimony given in the other place indicates that this corporation is backed by all the chartered banks of Canada, who are subscribers to it and who will bring their business knowledge and know-how to the operation of this corporation.
It is indicated also that this corporation will have behind it the facilities, and indirect aid, of one of the best banking systems in the world today. It is quite true, also, that a crown corporation could have been formed to assist in this particular manner, but this procedure is against the policy of Canada because it would set up further competition with private enterprise. A crown corporation, if formed, would probably receive many applications for development financing which would require the export of capital for labour and materials for development projects abroad. This is not the function of this corporation. The function of this corporation is to provide capital for lending to legitimate exporters. This capital would provide a revolving fund, as the hon. member for Ottawa West has said, of $50 million, and would most likely result in an effective fund of some $400 million. According to the witnesses, it is not $400 million but it will give an effective fund of some $500 million. It may well be that this fund will prove to be insufficient, but if it is I am sure the corporation will come back and request the right to have additional capital subscribed.
It has been pointed out that this corporation will be complementary to the Export Credits Insurance Corporation. It has been pointed out also, however, that the loans insured by the export credits insurance agency or corporation represent only 10 per cent to 15 per cent of the total business which will be done by the Export Finance Corporation. Over 50 per cent of the business will be done in the form of contracts which are outside of the present range of the Export Credits Insurance Corporation, although it may well be that as changes are made in that act some of these trading transactions will be brought within the ambit of the Export Credits Insurance Corporation.
Internationally Canada is recognized as an island of freedom in a sea of trade control. Other than our commonwealth tariff agreements we shun all bilateral and regional trading and payments arrangements. Canada's foreign trade is in the hands of independent traders and companies, free from restrictive government controls. On the other hand, a very large number of countries in the world

today negotiate exportable surpluses against required imports. These negotiations may be in the form of bilateral trade agreements, as the hon. member for Ottawa West has pointed out; they may be in the form of regional payments agreements, or they may be even special financial arrangements, as for example those of the United States through the United States export-import bank.
The problem with which our exporters have been faced is how to get around this dilemma without seriously compromising our economic principles of freedom of international trade and trade payments. This is a principle that we do not want to compromise because it is that principle of freedom of trade, freedom within the nation, that has led Canada, with its rather small population, to the position of the fourth trading nation in the world today. It is estimated that one out of five Canadians is dependent for his living upon export trade. The problem is, therefore, how to keep the advantages we now have and yet to leave our position on the fringe of this ring of countries which follow this method of negotiated trade agreements and enter into that circle in at least a limited form. If we do this, we will then have the best of both arrangements.
As I said before, all our chartered banks are shareholders in this corporation, so we will have immediately within this corporation the know-how of effective leadership to make the corporation a functioning entity almost right away. This is better than a government scheme because it is more flexible, more able to change with changing conditions than a government institution. The capital and borrowing power of the corporation will have one, and only one, objective and that is the promotion of export trade. There will be no special considerations in regard to the transactions the corporation undertakes. The only consideration will be, what is the risk and how best to meet it in all prudence to protect themselves, and what is a fair profit for the risk that they undertake.
The corporation will work in the closest cooperation with the Department of Trade and Commerce, of course, through commercial councillors of the department, through Canadian ambassadors and through liaison with the government within Canada. This corporation, without being tied by government policy and by government restrictions, will, I am sure, have the backing of the government in any way that they may require it. Examples have been cited of the opportunities which Canada has lost because we have lacked facilities such as these. One witness,
Private Bills
Mr. Hurter, of an internationally known engineering firm, president of Stadler, Hurter & Company and Stadler Hurter International Limited, of Montreal, gave other examples. As I said before, the minutes of the committee were not printed, but I should like to put some of these examples on the record.
He pointed out that a project for Egypt calling for approximately $10 million of machinery and certain services was not bid upon by Canada because of the credit terms required. The contract was awarded to Krupp of Essen, Germany, based on 5J years credit at 5| per cent interest. It was noted that Krupp would furnish only three items of equipment to an approximate value of $90,000, and the remainder would be subcontracted to other firms. Mr. Hurter said all of this equipment could have been purchased in Canada.
The second project was in Brazil, and although he does not mention the company I think it is a Canadian owned company which would naturally want to buy in Canada. The company could not do so because of the credit requirements. The value of this order would have been approximately $12 million, and 85 per cent of all machinery and equipment was purchased in Italy. Only approximately $50,000 worth was purchased in Canada, and strictly on a cash basis against shipping documents.
Again, Mr. Hurter pointed out that on a visit to Chile he was asked if he could obtain all the equipment and machinery and services as listed in the feasibility report prepared by his office on credit terms from Canada or any other country. Chile would raise the balance of the capital for the purchase of land, construction costs, railroad facilities, labour cost for installation of equipment. The value of this contract, according to Mr. Hurter, would be around $17 million. Credit was required which could not be secured in Canada. He goes on to point out that these same conditions prevailed in Mexico.
Incidentally, this corporation would undoubtedly be dealing with foreign government agencies which in effect are extensions of foreign governments. In effect, through the powers which they are asking for, they can even lend money to foreign governments in the way of financing Canadian exports.
With regard to this particular project in Mexico, the Canadian firms were able to manufacture the equipment required. They supplied bids. But because again of credit the orders went to other countries. Mr. Hurter went on to point out several other examples.
I know that last year when I was in Rio de Janeiro representing this house at the interparliamentary union, commercial coun-

Private Bills
sellors at our embassy pointed out several cases of very large orders which might have come to Canada if the requirements of the Brazilian government could be met. Brazil is on strictly a bilateral trade agreement, using barter deals. There was no way in which we could take advantage of the offerings. There was a question of railroad equipment, rolling stock, steel rails and so on. There was also the question of Canadair selling certain planes, and sending parts for a certain number more of this particular type of aircraft and eventually the project was to manufacture the last 57 in Brazil. I believe that particular project is still open. But the whole point was this. How could it be financed? Therefore, Mr. Chairman, I think that in this proposed bill to set up this company, we have a means by which we can take advantage of those deals which will be of advantage to this country.
Incidentally I may say that there will be many projects which this corporation will turn down because they would not be good business deals. But since it is their object to do as much business as they can, to make a fair profit and actually to give a service to our exporters-a service which they do not have at this time-I believe that it is perhaps the best method which could be evolved to take care of the conditions which prevail in certain nations in the world today whose markets we cannot now enter.
We have noticed that there has been a freeing of trade. There has been a reduction in currency restrictions. All of that is of help to us in our regular methods of having no restrictions on trade or payments. But there will still be a large number of countries, for a good many years yet, whose markets we shall be able to enter only by extensive credits and perhaps by negotiations of a nature which are not usual and normal in our regular trade channels.


Mr. McCleave:: Mr. Chairman, perhaps I could take a few minutes of the time of the committee, following the remarkably interesting speeches of the other members who have preceded me in the debate this afternoon on Bill No. S-17, coming as I do from a port which literally and actually relies on the export and import trade.
The first thing I should like to say in speaking on clause 1, on which I understand the discussion may be in very general terms, is that I welcome the fact that private interests have combined together to such public advantage. I think that too often we in parliament are expected to solve almost any problem under the sun within the confines of these walls without giving consideration to the fact that outside of this place

flows the great stream of commerce and that there live men and women who can be somewhat remote from the perhaps pedestrian and bureaucratic ways in which government is run.
It is for that reason that I welcome the fact that Mr. Clement Tremblay, Mr. Thomas Edwin Hays and Mr. Stanley Stanger and apparently a great number of other people have been interested enough to combine together to incorporate the Export Finance Corporation of Canada Ltd. If it were not for people of this ilk, Mr. Chairman, I believe we would have reached the positive state a long time ago and that 1984 would not only be in front of us but would be here right now and would be here to stay. If we can interest more people in doing this sort of thing for the public weal, we are indeed performing a service for Canada.
On this general theme, may I say this. I had occasion to do some study a while back on the psychiatric make-up of the members of parliament. I thought that perhaps too many of us manifested a rather grave Caesar complex in which we felt that any problem in the world could be brought before us and could be solved within this chamber. I am glad to note that hon. members from all parties have in fact supported the Export Finance Corporation of Canada, Ltd. which is purely a private enterprise undertaking. I welcome the fact that even with the reservation noted by the hon. member for Kootenay West, all of us seem to be bent on taking the same road.
The objects of the corporation are set forth clearly in clause 5. I welcome again the suggestion that this corporation shall help to finance and facilitate exports and imports and the exchange of goods and services between Canada and, first of all, the nations of the commonwealth and, second, other nations. It seems to me that the people behind this corporation have shown great statesmanship, having regard to the purposes for which this corporation was formed.


[Stage Direction]
Clause agreed to.
Clauses 2 to 9 inclusive agreed to.
Preamble agreed to.
Title agreed to.
Bill reported, read the third time and passed.
Mr. Speaker:: There are a number of
divorce bills standing on the order paper for second reading. Is it the pleasure of the house to take them in one motion?


Some hon. Members:: Agreed.



SECOND READINGS-SENATE BILLS

Robert Jardine McCleave: that the following bills be read the second time:
Bill SD-247, for the relief of Oscar Roy.- Mr. McCleave.
Bill SD-248, for the relief of Rosy Fish Tatelman.-Mr. McCleave.
Bill SD-249, for the relief of John Andrew Buzzell.-Mr. McCleave.
Bill SD-250, for the relief of Barbara Lucy Bain Forbes Logan.-Mr. McCleave.
Bill SD-251, for the relief of Ghitta Caiser-man Pinsky.-Mr. McCleave.
Bill SD-252, for the relief of Florida Seyer Girard.-Mr. McCleave.
Bill SD-253, for the relief of Maria Adriana Sluis Metcalfe.-Mr. McCleave.
Bill SD-254, for the relief of Irene Kramer Segal.-Mr. McCleave.
Bill SD-255, for the relief of Lois Genevieve Good Mulcahy.-Mr. McCleave.
Bill SD-256, for the relief of Frances Lerner Rotman.-Mr. McCleave.
Bill SD-257, for the relief of Mose Takacs. -Mr. McCleave.
Bill SD-258, for the relief of Catherine Mary Rita Durning Dossett.-Mr. McCleave.
Bill SD-259, for the relief of Dorothy Elizabeth Fremantle Fleming.-Mr. McCleave.
Bill SD-260, for the relief of Donald Edward Cook.-Mr. McCleave.
Bill SD-261, for the relief of Maria Car-mella Gentile Hammill.-Mr. McCleave.
Bill SD-262, for the relief of Ivy Mildred Patch MacDonald.-Mr. McCleave.
Bill SD-263, for the relief of Mary Friend Bond.-Mr. McCleave.
Bill	SD-264,	for	the	relief	of	Eleanor
Patricia Henderson Cosh.-Mr. McCleave.
Bill	SD-265,	for	the	relief	of	Patricia
McDonald Bouthillette.-Mr. McCleave.
Bill SD-266, for the relief of Louis Marcel Blondin.-Mr. McCleave.
Bill SD-267, for the relief of Janet Marianne Louise Kippen	Coulombe.-Mr. McCleave.
Bill	SD-268,	for	the	relief	of	Demetra
Paul Garini Liogas.-Mr. McCleave.
Bill SD-269, for the relief of Paul Alexander Cross.-Mr. McCleave.
Bill	SD-270,	for	the	relief	of Elisabeth
Marguerite Le Febvre	Walker.-Mr. McCleave.
Bill SD-271, for the relief of Joseph Roger Wilfrid Girard Frigon.-Mr. McCleave.
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Bill SD-272, for the relief of Jean Paul Frechette.-Mr. McCleave.
Bill SD-273, for the relief of Ben Plotkin. -Mr. McCleave.
Bill SD-274, for the relief of Tibor Matthias Miletics.-Mr. McCleave.
He said: Mr. Speaker, perhaps before these bills get second reading a few words would be in order. The number of divorce bills before us this afternoon and the number which have been previously given second reading but have not yet gone through all of the processes of the House of Commons bring the total number which have been considered by the house to 274. It may be of interest to the house in considering its work before the wind-up of the session, which we all devoutly hope is not too far away, if I say that I am informed by the committee of the other place that they plan to cease the hearing of these cases some time around June 10 or June 15. I realize I am not in order at all when I make that particular statement, Mr. Speaker, but nonetheless it will undoubtedly be of interest to the house and I am sure that no one will quarrel with me or anybody else in the hope that we may so arrange our affairs that we can get through our work by July 1.
With reference to the cases which are before us this afternoon, they are no worse, and perhaps some of them are somewhat better, than the type of case we have considered earlier in this particular session.
Did the hon. member for Ottawa West (Mr. Mcllraith) wish to ask a question?


George James McIlraith: No, I am sorry, I have no question to ask.


Robert Jardine McCleave: Apparently there are some other interests in the House of Commons this afternoon, Mr. Speaker. I do apologize for interrupting the private conversation between members of the opposition and members of the treasury benches.
There is one contested case before us this afternoon. Oddly enough, of all the cases before us this afternoon and the cases which have been considered before, not one involves husbands who are domiciled in the province of Newfoundland. I think that is a significant thought in itself. Over past years I have noticed that Newfoundland cases tend to run to about 2 per cent of the total which are considered by parliament. This year, or at least in the first 274 cases this year, there have been no cases which can properly be called Newfoundland cases. In other words, the cases which have come before us for consideration are from the province of

Private Bills
Quebec. So it is today that there are no Newfoundland cases among those we are considering.
As a sign of modem times in the automotive age, it may be noted with interest, if nothing else, that one of the cases involves a divorce on wheels: the offence complained of occurred in a motor car. I believe I mentioned earlier that another divorce bill, Bill No. SD-248, was a contested case. Apart from that, Mr. Speaker, there is nothing particularly interesting about the cases before us this afternoon.


Ernest James Broome: May I ask the hon. gentleman a question. Has the hon. member any idea how many more cases will be coming before the private bills committee, or is that question out of order?


Mr. Speaker:: That is a hypothetical and speculative question. Is the house ready for the question?


Robert Jardine McCleave: that the bills be read the second time.
Motion agreed to and bills read the second time.


Mr. Speaker:: Pursuant to standing order 105, the said bills stand referred to the standing committee on miscellaneous private bills.
Mr. Pallet!: Mr. Speaker, as it is now three minutes to six, it seems we cannot give a very full discussion to any other private
bill, and with the permission of the house I would ask to call it six o'clock.


Mr. Speaker:: Is it the pleasure of the house that we now call it six o'clock?


Some hon. Members:: Agreed.



BUSINESS OF THE HOUSE

George James McIlraith: Would the hon. house leader indicate the business for Monday and as far as possible into next week as he can?


Howard Charles Green: Mr. Speaker, we intend to go ahead with the debate on the national energy bill. Then we will take the items I mentioned last night: the Federal-Provincial Tax-Sharing Arrangements Act, the C.N.R. resolution and the bill amending the Bretton Woods Agreements Act. Members might also be prepared to give approval to the convention on the nationality of married women. The first item on today's order paper concerns amendments made by the Senate to the act providing for the appointment of parliamentary secretaries. The government is accepting the amendments and we will be bringing that matter on for consideration as well.


George James McIlraith: Will the business be taken in the order indicated by the minister?


Howard Charles Green: I am afraid I cannot be certain of that, Mr. Speaker. We will try to keep to that order.


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