1967-10-16

Mr. R. J. Orange (Northwest Territories) moved: the first reading of Bill No. C-162, to amend the Migratory Birds Convention Act.
He said: Mr. Speaker, the purpose of this bill is to remove the prohibition which now prevents the Indian and Eskimo people of Canada from shooting migratory birds for food. It is submitted that the Indian and Eskimo people must be provided with an opportunity to maintain their ways and their culture. Similarly there must be safeguards for their particular status in Canada, which includes historically the right to hunt with impunity. The purpose of this bill therefore is to preserve for them their heritage as envisaged by earlier treaties and agreements.
Motion agreed to and bill read the first time.


EXTERNAL AFFAIRS
[Stage Direction]
On the order:	Government notices of
motion:
October 13-The Secretary of State for External Affairs-the following proposed motion:-That the report of the Department of External Affairs tabled on March 21, 1967, be referred to the standing committee on external affairs.
Hon. R. A. Bell (Carleton):: Mr. Speaker, my understanding, last Friday, was that by unanimous consent this motion would be presented this day and adopted without debate.
Hon. Paul Marlin (Secrelary of Slate for
External Affairs): That would be very acceptable.


Mr. Speaker:: Is the minister prepared to make the motion now?


Mr.   Marlin@Essex East: That the report of the Department of External Affairs tabled on March 21, 1967, be referred to the standing committee on external affairs.


[Stage Direction]
Motion agreed to.

[Stage Direction]
(Questions answered orally are indicated by an asterisk.)

Mr. Simpson: 1.	How many centenarians were presented with scrolls or plaques in respect to Canada's centennial year?
2.	How many were so presented in each province?
3.	As a result of these presentations, who was found to be the oldest person in Canada?


Hon. Judy V. LaMarsh (Secrelary of Slate):: I am informed by the centennial commission as follows: 1. 618. An additional 37 were submitted to members of parliament for family presentation as the persons concerned had died after January 1, 1967.
2.	Newfoundland, 9; P.E.I., 10; Nova Scotia, 47; New Brunswick, 24; Quebec, 97; Ontario, 241; Manitoba, 37; Saskatchewan, 37; Alberta, 42; British Columbia 74; total, 618.
3.	Mrs. Catherine Moreside, North Milton, Prince Edward Island. Born-January 22, 1859-Age 108 years.


VISITORS TO CENTENNIAL CARAVANS IN QUEBEC
Mr. Isabelle: By September 15, 1967, how many visitors had viewed the centennial caravans that travelled across the province of Quebec?


Julia Verlyn (Judy) LaMarsh: I am informed by the centennial commission as follows:
Caravans 2 and 3 recorded 1,906,952 viewers in the province of Quebec to September 15, 1967.
These were the first caravans in Canada to exceed one million visitors.


NAVIGATION STUDIES, SASKATCHEWAN RIVER
Mr. Slefanson: 1.	Has the federal government carried out surveys of the Saskatchewan river to determine if navigation is feasible and, if so, when were these surveys conducted and by whom?

October 16, 1967
Questions
2.	It surveys were conducted, were these carried out in detail, giving estimated cost of project, depth of channel, type of equipment required, type of freight available and estimated freight rates, and what were the figures and reports for each of these items?
3.	Are there comprehensive reports available covering the findings and recommendations for these surveys?


Hon. G. J. Mcllraiih (Minister of Public Works):: 1. Yes. See the answer to question 1693 in Hansard for August 29, 1966, at page 7751.
2.	The review carried out in 1961 by the Department of Public Works was in sufficient detail to show that capital and operational costs would be many times any potential benefits foreseen from the proposal.
3.	No.


DELEGATION OF POWER BY PUBLIC SERVICE COMMISSION
Mr. Bell (Carleton): 1.	Has the Public Service Commission delegated to any deputy head the authority to perform any of the powers, functions or duties of the commission?
2.	If so (a) to what deputy heads (b) in respect of what positions (c) what terms and conditions were attached to each such delegation (d) what appointments have been made pursuant to such delegations?
3.	Have one or more persons under the jurisdiction of any deputy head been authorized by the commission to exercise and perform any of the powers, functions or duties that a deputy head has been authorized by the commission to exercise and perform?
4.	If so (a) what deputy head has jurisdiction (b) what is the name and position or title of each such person so authorized (c) what appointments have been made pursuant to such sub-delegation?


Julia Verlyn (Judy) LaMarsh: I am informed by the Public Service Commission as follows: 1. No delegation of authority to deputy heads has been made to date by the Public Service Commission under section 6 of the Public Service Employment Act.
2, 3, and 4. Not applicable.
Governors as follows: 1 and 2. Four licensee companies do not comply with section 14 (1) of the Broadcasting Act and they have been exempted from the operation of section 14 of the Broadcasting Act by order in council. These companies are:
Date of
Name	order in council
Canadian Marconi Company August 18, 1959 Western Ontario Broadcasting Company Limited February 16,1961 Central Ontario Television Limited	October 17,1963
Television de Quebec (Canada) Limitee	February	18, 1965


CENTENNIAL CO-ORDINATOR, PRINCE EDWARD ISLAND
Mr. McQuaid: 1.	Was a centennial co-ordinator appointed for the province of Prince Edward Island?
2.	If so (a) who was the appointee (b) what is his annual salary (c) are travelling expenses payable in addition to salary (d) what is the total amount of travelling expenses paid to date?


Julia Verlyn (Judy) LaMarsh: I am informed by the centennial commission as follows: 1. Yes.
2. (a) Mr. G. A. (Addie) McDonald, 40 Brighton Road, Charlottetown, P.E.I., was appointed as regional officer, Prince Edward Island, (b) His annual salary is $10,168. (c) Travelling expenses are in addition to annual salary and are in accordance with government travel regulations, (d) The total amount of travelling expenses to date is $1,897.18.


C.B.C. COVERAGE OF PROGRESSIVE CONSERVATIVE CONVENTION
Mr. Irvine: 1.	What was the total number of C.B.C. personnel detailed to cover the recent Progressive Conservative convention in Toronto?
2.	What was the total cost of this public information service?


BROADCASTING STATIONS OPERATING UNDER SECTION 14 (1) OF ACT
[Stage Direction]
Question No. 397
Mr. Gregoire:: 1.	Are any radio and television stations operated in Canada in accordance with the provisions of section 14 (1) of the Broadcasting Act?
2.	If so (a) which stations are they (b) what orders in council have been made concerning these stations and when were they issued?


Julia Verlyn (Judy) LaMarsh: I am informed by the Board of Broadcast


Mr. Albert Bechard (Parliamentary Secretary to Secretary of State):: Mr. Speaker, I am informed by the C.B.C. as follows: 1. The total number of C.B.C. personnel detailed to cover the recent Progressive Conservative convention in Toronto was 183. This was for the coverage of the news events on all four networks, English and French, radio and television.
2. The total direct cost of this combined four network coverage was approximately $46,600.
October 16, 1967


DAMASCUS STEEL PRODUCTS-REQUEST FOR INQUIRY
Mr. Caouelle: 1.	Has the Registrar General received a petition from shareholders of Damascus Steel Products Ltd. accusing the Manitoba development fund of fraudulent transactions and, if so, has he ordered an inquiry.
2.	Has the minister received the report of the supei'intendent of bankruptcy?


Hon. John N. Turner (Registrar General):: 1. Yes. There was no investigation, however, by the superintendent of bankruptcy because Damascus Steel Products Ltd. is not in bankruptcy.
2. The report of the superintendent of bankruptcy was to the effect that Damascus Steel Products Ltd. was not in bankruptcy and the petition made by the shareholders of Damascus Steel Products Ltd. was referred back to the Department of Justice to whom the request had originally been made.


QUEBEC SUBSIDIARY OF POLYMER CORPORATION
Mr. Caouelle: Does Polymer Corporation intend to establish in Quebec a subsidiary or production division to promote the economic development of Quebec?


Hon. C. M. Drury (Minister of Industry):: In so far as Polymer Corporation is concerned: The corporation does not have any current plans to establish a subsidiary or production division in Quebec.


CANADIAN FILM DEVELOPMENT FUND
Mr. Brand: 1.	Has the government received any applications for moneys available under the Canadian film development fund?
2.	Have any projects been approved and, if so, what are they and how many have been approved?
3.	If no money has been distributed, for what reason?


Julia Verlyn (Judy) LaMarsh: 1. No.
2.	No.
3.	Moneys can only be made available from the Canadian film development fund by authority of the corporation which is provided for in the legislation. The corporation is not yet set up and operating.
Questions


PRINCE EDWARD ISLAND CAUSEWAY
Mr. Macquarrie: 1.	When did Colonel Edward Churchill commence his duties in connection with the Northumberland crossing project?
2.	Has a new design for the crossing been approved by the government?
3.	When is it expected that tenders will be called for any portions of the project other than the approach highways in New Brunswick and Prince Edward Island?


George James McIlraith: 1. Colonel Churchill began research on the Northumberland strait crossing project early in June while concluding his duties with Expo '67; however, the formal appointment with the project is as of August 1, 1967.
2.	No.
3.	Pending completion of the review and study now being carried out it is impossible to give the date when tenders will be called for portions of the project other than the approach highways and necessary highway interchanges.


ARMED FORCES PERSONNEL
Mr. Dinsdale: 1.	What has been the total number of military personnel in Canada's armed forces each year since 1963?
2.	What has been the total number of civilian personnel employed by Canada's armed forces each year since 1963?


Hon. Leo Cadieux (Minister of National Defence):: As at March 31
1963	(1)	123,694	(2)* 48,5901964	120,781	47,6901965	114,164	44,5621966	107,467	44,4921967	105,584	43,187rhese	figures	include	Defence Research
Board and casual employees.


HIGHWAY CONSTRUCTION, CARIBOU ISLAND, N.S.
Mr. MacEwan: 1.	What work will be carried out as a result of the following tender call by the Department of Public Works-"Tender for highway construction. Caribou Island, Pictou county, N.S."?
2.	What are the names of the various tenderers and the amounts of the tenders?
3.	To whom will the contract be awarded?
Hon. G. J. Mcllraith (Minister of Public
Works): 1. The construction of .80 of a mile
October 16, 1967

Closing oj Nova Scotia Steel Plant of access road to the Caribou island light station, consisting of grading, the placing of culverts and the application of the base course.
2.	Colin R. MacDonald, Antigonish, N.S., $13,447; Alvin MacCabe, WestviUe, N.S., $18,843.16; R. A. Douglas Ltd., New Glasgow, N.S., $18,956; Northern Construction Ltd., Pictou, N.S., $19,644.24; M. & M. Construction, Stel-larton, N.S., $20,352.03; Tidewater Construction, New Glasgow, N.S., $22,486.
3.	The tenders are still under evaluation.


INDUSTRY
Mr. Donald Maclnnis (Cape Breton South):: Mr. Speaker, I ask leave, under the provisions of standing order 26, to move the adjournment of the house for the purpose of discussing a definite matter of urgent public importance, namely;
The national emergency created by the announced intention of Dominion Steel and Coal Corporation to commence, in the immediate future, steps leading to the closure of its steel mill at Sydney, Nova Scotia by April 30 next; the said emergency arising not only with respect to the future of some 10,000 people, being the employees and their families immediately affected, but also with respect to the survival of the entire industrial community of Cape Breton consisting of some 105,000 people, and to the economic disaster threatened to the whole Atlantic region, as well as with respect to the urgent need for the government of Canada, in co-operation with the government of Nova Scotia and the local governments concerned to work out solutions to protect the interests of these peoples and areas mentioned.
The said motion if allowed will be seconded by the hon. member for Cape Breton North and Victoria (Mr. Muir).


Mr. Speaker:: Order, please. Perhaps I should bring to the attention of hon. members the fact that earlier today the hon. member for Cape Breton South very kindly gave me notice of his intention to move this motion. I should add that the member for Winnipeg North Centre (Mr. Knowles) gave me similar notice. This gave me an opportunity to study the matter. After much thought and consideration I am strongly inclined to the view that this is the type of matter which falls within the purview of standing order 26. Unless there are objections from the house at this time I am prepared to put the motion and allow the hon. member for Cape Breton South and other hon. members to take part in the

discussion on the hon. member's motion. Is that agreed?


Some hon. Members:: Agreed.


Mr. Speaker:: Mr. Maclnnis (Cape Breton South), seconded by Mr. Muir (Cape Breton North and Victoria), moves that this house do now adjourn.


Malcolm MacInnis: Mr. Speaker, may I first express my appreciation to you, to all hon. members of the house and to the government especially for the deep concern shown over this problem which has arisen practically overnight in Cape Breton.
To fully understand the impact of the announcement made on Friday by Dosco in respect of the operation of the Sydney steel plant one would necessarily have to understand the geography and make-up of that particular area of the country. The city of Sydney itself is entirely dependent on this steel operation. Sydney might be referred to as a one industry town. The announcement by Dosco, coming at this time, is a blow which that community, the surrounding communities and in fact the province of Nova Scotia cannot withstand. Such an announcement by Dosco is in effect undermining efforts made in this house recently by hon. members when the government saw fit to set up the Cape Breton Development Corporation. At that time we were dealing with a subsidiary of Dosco, and it was found necessary to take action in order to preserve the coal mines until alternative work could be provided for the men employed in that industry.
The efforts made in establishing that crown corporation were severely undermined by the announced intention of Dosco to withdraw from the steel business. I would say here and now that a blow such as this certainly undermines all the efforts that have been made in the past by members of this house and by the federal government in establishing other agencies to uplift the economy of that part of the country, and indeed the economy of the whole country. I would again refer in this connection to the Cape Breton Development Corporation. I would also refer to ARDA, the Atlantic Development Board, and at the provincial level Nova Scotia Industrial Estates Limited. All these agencies have been struggling to uplift the economy of the area in order that we may reach the level of prosperity enjoyed in other parts of Canada. A blow such as the one with which we are faced nullifies all the efforts that may be or may have been made by these agencies. Each and every member of this house has taken part in
October 16. 1967

one way or another in bringing about these agencies in order to arrive at the solutions desired by the people of Cape Breton in particular and the people of Nova Scotia in general.
With respect to Dosco, I want all hon. members to fully understand that the steel operation is separate and apart from the coal operation. I think we have dealt fairly conclusively with the problems faced by this subsidiary of Dosco. We dealt with them fairly conclusively when the Cape Breton Development Corporation was set up. During the whole of the time the economy of Cape Breton was discussed, the Sydney steel plant came in for considerable discussion.
Dosco has announced its intention of establishing a fully integrated steel mill at Con-trecoeur, Quebec. This, of course, has always been a source of concern to the people of Cape Breton. We have always been assured by Dosco that this was going to provide the lifeblood of the Sydney plant, that the Sydney plant would supply the basic steel needed and that it would survive despite all the drawbacks with which it seemed to be faced. In all probability we did not look to further developments with any great anticipation, but we were assured by Dosco time and time again that basic steel would continue to be produced at Sydney. Now Dosco has come forward with its announced intention to close the plant on April 30 next, despite the fact that as early as last spring the company saw fit to sign an agreement with the Nova Scotia government under which it would borrow $4 million and would spend $4 million over the next four years to update its equipment at Sydney.
[DOT] (2:50 p.m.)
As a result of Dosco's decision to close the plant, cutbacks will have to be made within the next few weeks and certainly within the next month or so. This reminds me of the considerable amount of discussion which took place last summer on the drastic cutbacks in the work force at Sydney. At that time Dosco held out hopes that this was only a temporary condition, and that things would pick up. I remember reading with some delight -but now when I look back on it I am quite shocked-the announcements Dosco made every time they found it necessary to call 20 or 30 men back to work. They took advantage of this and gave it every bit of favourable publicity they could, thereby raising the hopes of the Sydney steelworkers that the situation would improve once again.
Closing of Nova Scotia Steel Plant
I am quite sure both the hon. member for Cape Breton North and Victoria (Mr. Muir) and the Minister of National Health and Welfare (Mr. MacEachen) were equally delighted at the announcements that the Sydney plant was taking back 30 steelworkers one week and 20 workers the next week and so forth, and that the work force which was laid off early in the summer was being rehired. Now they have dropped this bomb despite, as I said, the fact that they recently signed an agreement with the Nova Scotia government to spend over $4 million in the next four years. In addition the company saw fit to take part in and pay part of the cost of a recent study, the findings of which they concurred in, to enable this operation to continue.
One of the reasons Dosco gave for closing the plant is high freight rates. Let me point out that during the discussions which no doubt will follow Dosco's decision, the federal government will take a close look at the freight rate structure and will adopt any reasonable measures to alleviate the situation which has now developed. Dosco has also referred to the cost of importing European steel. I might say that this is a poor foundation on which to base its decision to close down the operation at Sydney which will affect over 100,000 people to whom Dosco is morally obligated. Yet the company considers the fact that today it can buy European steel for less is a good and sound foundation for the decision it has reached. European steel may be cheaper today, but what about tomorrow or next month? Can Dosco make such a decision based on the present price of European steel? I do not think it can, yet this is the argument the company puts forward as a reason for its decision. The present cost of European steel is not only a source of annoyance to the people of Sydney but also to the people of the United States. I have here a copy of a recent article referring to this very matter of the price of imported steel. It indicates that there is at present before the United States congress a bill to provide protection against this type of import, which is fast gaining popularity among the representatives of the United States government. For the benefit of the house I should like to read part of this article which appeared in the Financial Times:
The U.S. steel lobby has succeeded in convincing a large group of usually free trade minded senators to sponsor and support new legislation aimed at retaliation against foreign countries which discriminate against U.S. steel exports.
The bill, expected to be introduced in the Senate within the next few days, already has the support of 20 per cent of the upper house, and is given "an

October 16, 1967
Closing of Nova Scotia Steel Plant even chance" for passage. Protectionist measures generally find this level of initial support only in the more conservative House of Representatives. The Senate traditionally backs measures aimed at promoting freer international trade.
The bill would give the president 180 days to negotiate bilateral and multilateral international agreements under which other countries would "voluntarily" restrict steel exports to the U.S. to levels no higher than their average share of the U.S. market during the 1964-1966 period. The bill, in effect, would freeze total U.S. steel imports to about 9.5 per cent of total American steel consumption.
If the U.S. failed to negotiate such "voluntary" agreements within the 180 day period, automatic, congressionally imposed quotas would freeze imports at 7 per cent of the 1964-1986 consumption level.
The bill is aimed at halting the growing inroads of imported steel in the U.S. Imports, which accounted for 4.7 per cent of U.S. steel consumption in 1961, accounted for 10.9 per cent of all steel sold in the U.S. last year, and the level had climbed to 11.5 per cent through the first eight months of 1967. Meanwhile, U.S. steel exports have dropped more than 15.4 per cent over the same period. American steel exports in 1966 came to $537 million, compared with total steel imports of $1.2 billion.
The U.S. steel industry contends that non-tariff discrimination is the basis for the domestic industry's inability to compete in foreign markets. A flat 6 per cent to 7 per cent duty is imposed on all steel imports into the U.S. The duty is levied on the wholesale value of the steel at the point of shipment and is not levied on the freight and insurance costs, which can add as much as 13 per cent to the value of the landed steel.
The article indicates the protectionist measures taken by all governments throughout the world, including West Germany, Italy and Britain, in order to protect their steel industries.
This afternoon it is not my intention to criticize the company policy which led to this announcement. It is my hope that members of this house, in the light of what they have done in the past by way of establishing different government agencies to assist the economies of different regions in this country, will see fit to apply their energies to finding a solution to this problem. When I refer to all members applying their energies to this problem, I am quite sure I am speaking fairly and honestly, because I believe all members in all parties are vitally concerned with this particular problem. Unless something is done to find a fair solution, then the efforts of members in the past in setting up these other agencies will have been wasted.
It would have been an ideal situation if these other agencies such as ARDA, the Atlantic Development Corporation, the Nova Scotia Industrial Estates and other agencies could have provided 3,000 jobs in industrial

Cape Breton. This would equal the number of jobs that Dosco say they are going to eliminate. In other words the efforts that have been made here in the past, as well as those made by the Nova Scotia government, will mean nothing whatever if the announced intention of Dosco is allowed to be carried on without definite action on the part of federal, provincial and municipal governments to offset the effects of this shocking move.
[DOT] (3:00 p.m.)
It bears repeating that through the last number of years Dosco have consistently implied that operations at the Sydney steel plant would continue. I submit that this latest event is an indication that Dosco was not bargaining in good faith when they recently made an agreement with the Nova Scotia government and supported the recommendations of the study that was made. If such is the case, there is no doubt that this question will be given a thorough airing during the next few weeks at a follow-up meeting of the municipal, provincial and federal governments.
What I am trying to impress on the house, Mr. Speaker, is the need for a discussion of the question to be undertaken immediately. Six months is a very short time in the life of a city, and the Sydney steel plant operation is the lifeblood of the area. Within the very near future, and by that I mean during the next week or so, men in the area will begin to suffer as Dosco starts to make cut-backs. The company cannot be expected to carry on at its present level of production until April 30 next and then just cut it off completely. Steel workers in Sydney over the next few weeks, and possibly even over the next few days, will be faced with lay-off notices. Therefore it is imperative that governments at all three levels get together as quickly as possible and arrive at some decision which will avoid this drastic cut in operations.
I notice with some degree of resentment that the Hawker Siddeley group in London are not participating in any further meetings, and will not in fact make any statement about this decision; they are leaving this to their Montreal office. I cannot believe that Canadians involved in an operation like this made this decision, Mr. Speaker. These are the men who have been negotiating-we hope in good faith-over a period of years. They have been making statements about the continued life of this operation at Sydney. Therefore I cannot believe that the decision to cut off that steel operation has been made by the gentlemen in Montreal. I cannot help but think that they have been directed by
October 16, 1967

their parent body, the Hawker Siddeley people; and this group having so directed the people in Montreal, they now sit back and refuse to comment or take part in public meetings in order to fully discuss the matter. The president and the others involved at Montreal have, I think, been placed in an impossible situation here because the parent company having made this decision, they are the ones who will have to live with it. I am sure these people participated in good faith in the negotiations that have taken place, but they are now saddled with a decision which has been made elsewhere and, as I say, with which they will have to live.
I also feel sorry, Mr. Speaker, for the local management. It is not often that I stand in this house and say I feel sorry in any way for management, but I do know the local manager at the Sydney steel plant, and as late as this summer he had reason to be enthusiastic about the prospects of the Sydney steel operation. He was visited at that time by one of the directors of Hawker Siddeley in England, who was quite surprised and elated by what he found at Dosco. This director from England had no idea that they had such an establishment, and he held out great hopes for the plant. Naturally the local manager of the plant was somewhat enthusiastic about this, and he no doubt passed on this feeling to other people in the community. Now this man along with the steel workers under him are faced with this decision, which is going to mean the elimination of this industry.
Once again, Mr. Speaker, may I impress upon each and every member of the house what this closure will mean to the people of Sydney. There are 3,000 workers involved. As I have said, Sydney is a one industry town. It is also the commercial centre of Cape Breton island. Without the steel operation at Sydney the residents of the city and those in the surrounding areas will be faced with the insurmountable task of maintaining the services and upholding the economy of the community. This is a great blow to Sydney, and the only comparison I can think of would be if the seat of government were relocated elsewhere than in Ottawa. In essence, Mr. Speaker, this is what the steel plant closure means to Sydney. Perhaps hon. members can also relate this situation to the largest employer in their own home ridings deciding suddenly to pull out.
The decision to close the plant is a blow which not only affects the steel workers and their families but affects each and every man, woman and child in the area, those in the
Closing of Nova Scotia Steel Plant surrounding towns, the island of Cape Breton and in eastern Nova Scotia. It is therefore my hope that every member of this house, as has been the case previously in regard to other agencies that have been set up, will lend his energy and co-operation to this government in trying to arrive at a solution to the problems facing the municipalities and the province of Nova Scotia, a solution which is desired by all.
May I again express my thanks to you, sir, and to the government for considering this matter an emergency, one which I am quite sure everybody at all levels will do their utmost to solve.


Mr. David Orlikow (Winnipeg North):: Mr. Speaker, in participating in this debate may I say I rise primarily because the leader of our party, who so often in the past has spoken on this question, as he did when we were discussing the legislation establishing the Cape Breton Development Corporation a few months ago, is unable to be here, weather conditions having delayed the arrival of the plane in which he was travelling to Ottawa.
I join with the hon. member who opened the debate for the official opposition in expressing the shock and dismay of, I am sure, every member in this house at the tremendous blow that has befallen the island of Cape Breton and, indeed, the whole of the province of Nova Scotia as a result of the announcement by the chairman of the Hawker Siddeley company that the steel mills at Sydney will be closed in April of next year.
This is the kind of announcement, Mr. Speaker, which in earlier years people in the South American countries were accustomed to hearing from absentee landlords, and which led to revolutions in those countries. It is the kind of announcement which people in our kind of economy have come to expect that business should have learned not to make. Nobody questions the difficult situation in which the company finds itself, Mr. Speaker, but the fact is that this company has discussed its coal operations and its steel operations with the government for months, indeed for years. As the premier of Nova Scotia said the other day, it is only a few months ago that this company received, through the Atlantic Development Board and the province of Nova Scotia, a loan of some $4 million to improve its dockage facilities so that operations at the Sydney steel mill might be more efficient and able to meet competition. The
3120	COMMONS
Closing of Nova Scotia Steel Plant company, in following that kind of arrangement which means the virtual economic strangulation of a whole community, will have to explain its actions first to the people of Sydney and then to the people of all Canada.
[DOT] (3:10 p.m.)
Yet we should not be surprised by what has happened. Hon. members may remember that in June of this year when we were discussing the establishment of the Cape Breton Development Corporation the Minister of Energy, Mines and Resources, in introducing the bill, said as reported on page 1553 of Hansard for June 15:
The coal problem in Cape Breton is essentially a social problem. It is because of its concern for the welfare of individuals and collectivities, and not for the welfare of companies, that the government intends to subsidize the regional economy so that it may evolve from a state of subjection to a declining natural resource toward a more wholesome economics situation.
Speaking for our party our deputy leader, the hon. member for York South (Mr. Lewis) suggested that the government had dealt with only half the problem. He said the development corporation, in addition to the responsibility for managing the Cape Breton coal industry, ought to take over management of the steel industry of that area. Our leader, in that debate, predicted that if that were not done, parliament would be dealing with another proposal for steel, similar to the one then before it, within ten years. He was a poor prophet. The period that has elapsed is not ten years; it is only four months.
In that debate we suggested that a solution to the problems of Cape Breton were to be found through a publicly owned corporation which would manage the coal and steel industries, and the resources, of the area. Now we are faced with the company's disastrous announcement.
What was the reaction of the government to our initial proposal? Reacting sharply to the proposal of the hon. member for York South the Minister of National Health and Welfare, as reported on page 1578 of Hansard for June 15, said this:
-there Is no likelihood that a take-over of the steel industry by a public corporation would command much support at the present time.
Is the minister prepared to repeat in the house today that a publicly owned corporation would command little support? Without a publicly owned corporation the problems of the area will remain without solution. Here we have a company which has demonstrated

DEBATES	October 16, 1967
that it is not prepared to take the drastic steps necessary to modernize its plant; it is not prepared to take that action which will assure the steel workers of Cape Breton that they will have jobs in the years ahead.
What is the alternative to a publicly owned corporation? Here we have a company which has made hundreds of millions of dollars in the 50-odd years that it has operated in Nova Scotia. The public of Canada has probably paid something like $200 million in the way of subventions to keep it going. Here is a company which, only a few months after announcing that it would modernize its facilities, suddenly says that in the next five or six months 3,000 people or more will be thrown out of work. If ever there was an example of corporate irresponsibility greater than that we have now witnessed, I should like to see it. In our time we have never seen that kind of cold blooded economic murder perpetrated by any company in this country.
In June, after saying that only a publicly owned corporation to embrace the steel industry of Cape Breton would provide long range solutions, we moved an amendment in which we spelled out the expanded powers required of such a development corporation. Our amendment would have empowered the corporation, should the economic welfare of the region require it, to enter fields of activity other than coal. What did the Minister of National Health and Welfare do? He argued that our amendment was wrong in principle and out of order; that the corporation would not be given the authority we suggested it ought to have, that it did not need it and did not want it.
The spokesman of the official opposition impressed me. He said that laying off more than 3,000 workers in the Sydney steel mills, apart from the immediate effect on the individual worker, will make it difficult for the city to maintain essential municipal services. But while that spokesman urged the government to give serious and sympathetic consideration to the problems of the area, I was struck by his failure to make one concrete suggestion about what ought to be done.
Our party thinks two steps ought to be taken, and they ought to be taken together. First, the steel industry of Cape Breton must be taken over by the government, I suggest by the federal and provincial governments in co-operation. The industry must be run by a publicly owned corporation. I know that some members in this house are not enthusiastic about public ownership and will only agree to
October 16, 1967

it when there is no alternative. Here, I suggest, there is no alternative. The company which is at present operating in Sydney has demonstrated over the years that it has no will to turn the industry into a viable, living, efficient operation able to meet the needs of the market and provide jobs for the steel workers of Sydney.
As I said, earlier, the first step must be to set up a publicly owned corporation. The second step-and had this suggestion been followed some years ago there might be no need for the government to take steps that some outside our group are not enthusiastic about-is to bring about a positive and rapid modernization of the steel facilities at Sydney. Without that, Mr. Speaker, this plant cannot continue. It cannot exist otherwise without large scale and permanent subsidies, which I am sure none of us would want.
[DOT] (3:20 p.m.)
The need for modernization and diversification is not something new. The government of Canada, the government of Nova Scotia and the owners of the industry have been aware of this need. Representatives of the steelworkers union have for a long time advocated modernization and diversification. In 1966 a brief prepared by Harry J. Waisglass, research director of the United Steelworkers of America, and by Father Andrew Hogan, assistant professor in the department of social sciences at St. Francis Xavier University, was presented to the Atlantic Development Board. It included extracts from a brief presented in 1951 by the president of the local union of the steel workers in Sydney, in which he said:
It is our contention that if Nova Scotia is going to develop as a part of Canada, the rated capacity of the Sydney steel plant must be greatly increased and the products diversified.
That did not take place. From 1944 to 1964 the increase in steel production at the Dosco operation was only 33 per cent compared with an increase for Canada as a whole of 170 per cent. During that period employment at the Sydney operation declined from more than
5,000	hourly rated workers to some 3,200; and not only did the number of workers decline but the wages of the Sydney workers dropped, until now they are virtually the lowest paid steel workers in Canada or the United States.
Over the past few years Canada has become a net exporter of steel, but Nova Scotia failed to participate in the production growth of other Canadian rolling mills. In contrast with expansion by the rest of the industry, the Sydney mill has been in a state
Closing of Nova Scotia Steel Plant of virtual stagnation, and now the company has announced that it will be closed up almost completely. I suggest to you, Mr. Speaker, that no government in Canada can permit this economic murder to go unchallenged. I do not care which government is involved; neither the Liberal federal government nor the Conservative provincial government can allow a group of company officials to write off, with the stroke of a pen, 3,000 steel workers and almost 10,000 coal miners.
A number of concrete proposals were made in the brief to which I have referred, prepared by Mr. Waisglass and Father Hogan. They suggested with respect to the Sydney plant:
At comparatively low capital cost, by making the necessary modifications and alterations to its rail mill and by the purchase of rolls, it can obtain production capacity for small and medium sized structurals in popular demand.
They also suggested:
The competitive position of the Sydney steel works on a diversified product range, including plate and rolled structurals, can be strengthened considerably by the removal of the U.S. tariffs on Canadian steel.
Some of us question some of the details, but we have had a pretty satisfactory experience as a result of the United States-Canada auto parts agreement. I can see no reason why before this, and even at this late date, the federal government could not discuss with the United States government the possibility of tariff revisions and even the wiping out of tariffs in the steel industry, something which would open up the New England markets to the Sydney steel mill. If that were done it would immediately change the competitive position of the Sydney plant. It would give it an opportunity to bid for markets in an area close at hand, rather than in the areas of central Canada where, because of shipping costs, it cannot compete with Algoma. Mr. Waisglass and Father Hogan said in support of this idea:
We recommend that the Atlantic Development Board promote collaboration between the Nova Scotia government and the dominion government in the conduct of studies on the feasibility of free trade arrangements between the U.S. and Canada in the steel industry.
They pointed out that:
Nova Scotia's steel industry has been excluded by high transportation costs from the Canadian markets in which steel consumption and production growth are concentrated, and by tariffs from its natural geographical markets.

October 16, 1967
Closing of Nova Scotia Steel Plant
They also suggested:
Furthermore, It is urged that the A.D.B. join with the government of Nova Scotia in requesting the Economic Council of Canada to prepare a plan for the long term growth of the Canadian primary iron and steel industry, which would indicate the nature and extent of regional participation in such growth-
All parties in this house have expressed themselves as supporting the idea of regional development. As I have said on many other occasions, I do not believe that what we want in this country is a wealthy Toronto and a wealthy Montreal with the residents of all other areas being second class citizens. I believe citizens in all parts of Canada have a right to a decent living. In concrete terms this means that an industry such as the steel industry on Cape Breton must be given the opportunity to produce, must be given the opportunity to employ its workers at decent wages.
In closing, Mr. Speaker, I repeat that the government of Canada cannot permit the arrogant announcement by the owners of Dosco to go unchallenged. The government of Canada, in co-operation with the government of Nova Scotia, the municipalities and the steelworkers union, must come up with a plan which will ensure the continuation of the plant on an efficient basis to meet the needs of the area and the needs of the people. This, as I say, will mean two major decisions on the part of the governments involved. The first is a decision to move immediately toward rapid modernization of the plant so it can compete efficiently with other steel producers. The second decision is that this can be done only by a publicly owned corporation.
In the light of the week end announcement by the owners of Dosco I very much want to hear from the Minister of National Health and Welfare, the main government spokesman when the legislation establishing the Cape Breton Development Corporation was being discussed. On that occasion he quickly and definitely rejected our proposal to establish a publicly owned corporation. I await with a great deal of interest his alternative to our very clear and specific proposal, which we think is the only method to solve the problem of the Sydney steel mill. The people of the country are also waiting to hear from that minister.


Hon. Jean-Luc Pepin (Minister of Energy, Mines and Resources):: Mr. Speaker, the immediate events leading to today's debate are now well known. It would be wrong to say that the difficulties of the steel industry in

Cape Breton were unknown to governments, federal and provincial, but the sudden announcement by Hawker Siddeley and Dosco has come as a surprise to everybody, including Mr. Stanfield, the new leader of the Conservative party, formerly the premier of the province of Nova Scotia.
[DOT] (3:30 p.m.)
These gentlemen-the president of Hawker Siddeley of London, the president of Hawker Siddeley of Canada and the president of Dosco-came to see a group of ministers last Thursday, not to discuss the decision but to inform them of the decision which had been reached by the company. The cabinet met the same day and dealt with this matter. There was a cabinet committee meeting on Friday and our communique of Friday night, signed by a group of ministers, suggested to the government of Nova Scotia that a meeting of people representing the local interests, the two governments, and the company, take place. At this meeting the company would have been asked to provide certain information and would have been asked to make its intentions better known with regard to the future of the plant, the future of the workers and the future of the local communities. So far as I know, representatives of the industry, ed by the government of Nova Scotia, has been refused by the company. Tomorrow night's meeting at Sydney will not include, so far as I know, representatives of the industry.
The position of the government is, first, that we deplore of course the manner in which the announcement was made, especially in view of what had been said in the house on June 27 by the Minister of Industry (Mr. Drury). This is found on page 2020 of Hansard for June 27. The Minister of Industry said then:
The company reports that it has been rationalizing its operations in order to improve its ability to meet increased competition from Canadian and other producers, and this also has affected the situation.
Furthermore, faced with increasing competition and declining prices in its main marketing areas the company says it has taken steps to improve the productivity of its operations at Sydney which have resulted in some curtailment of the numbers employed.
This statement certainly did not permit one to forecast a decision as sudden as that which was announced last Friday. I might also bring in as proof a report of the voluntary planning board of the province of Nova Scotia written in association with officials of the province of Nova Scotia, Dosco and the Atlantic Development Board, which was tabled in the
October 16, 1967

house, I am told, some 10 or 12 days ago by the Prime Minister (Mr. Pearson). It is not an optimistic report but there are paragraphs which could lead a reader to believe there was still hope for this industry, at least in the internal Canadian market.


Richard Albert Bell: Would the minister indicate on what day that report was tabled?


Jean-Luc Pepin: I thought it had been tabled but I am now informed it was not. It is, however, a public document and I will endeavour to find a copy for my hon. friend if he so wishes.


Richard Albert Bell: I am very interested in it. The minister said it had been tabled in the house.


Jean-Luc Pepin: I thought it had been tabled. I regret having said so.
Second, the government intends to hold the company responsible not only for its legal obligations, which of course the company accepts-and the legal obligation is limited-but also for some moral responsibility to the labour force and the communities of Sydney and the surrounding area. It is too easy for a company to live in and on a community and then say with only a day or two days' notice, "We are leaving. Catch." I believe that a company like this has some responsibility. We intend to remind the company of that fact.
In respect of the problem itself we intend to find out what are the facts which led to this decision. We also intend to take all reasonable steps to help individuals, of course, and the province which has the main responsibility in this matter. In so saying I am not trying to pass the buck. I am just stating the fact that this is a problem of one industry; it is not a problem involving the whole Canadian industry. In the last few days, as a matter of fact, and rightly so, the provincial authorities have indicated clearly that they are considering the problem in this way. As I have said, the meeting tomorrow night has been called by the government of Nova Scotia. We intend to be present and take part in a most constructive fashion.
Finally, it is too early to say what will be done by the central government to help in this very serious matter. I think it would be unwise, before the meetings to which I have referred take place, to state our plans. I should like to say only that we will be and are exploring all rational avenues in an effort to help.
The speaker who preceded me, the hon. member for Winnipeg North (Mr. Orlikow),
Closing of Nova Scotia Steel Plant had an instant solution to this problem-instant nationalization. One must find out, first, what could be accomplished by nationalization. It would be necessary to know first whether nationalization would solve the problem and what nationalization of that one plant would lead us to. If we were to automatically nationalize mines which have exhausted their ore or if we were to get into the habit of nationalizing individual plants which get into great difficulties, the government would have a full time job on its hands. There are plants such as textile plants in the ridings of many hon. members, there are also gold mines in northern Quebec and northern Ontario, which probably would be asking the next day for a similar advantage if nationalization can be considered so automatically to be an advantage.
The problems of Cape Breton are deep ones. The economic base itself of Cape Breton has been eroding away for a good number of years. This means essentially the coal and steel industries. The job now is to find an alternative economic base. Everyone will agree that this is not an easy task, but my belief is that it is not an impossible one.
I should like to use the next few minutes to give a report on some constructive moves taking place in Cape Breton now, mainly pertaining to the Cape Breton Development Corporation for which I am responsible to parliament.

You will recall Mr. Speaker, that a few days ago, the Prime Minister announced the appointment of Mr. Robinson Ord, vice president of Chemcell, to head the Cape Breton Development Corporation. The appointment of Mr. Ord was greeted with great satisfaction by the provincial government, by the labour unions in the area, by the local and national press. I have no intention of reading all the reports to you. But, generally speaking, they are most favourable. For instance, the Chronicle-Herald on September 16 wrote:

The article in the Chronicle-Herald of September 16, 1967 says in respect of Mr. Ord:
His acceptance of the position indicates an admirable courage, for no one doubts that it will be difficult and often frustrating-
Mr. Ord's background in the chemical industry is in line with some of the hopes of the planners, who see a considerable development of that industry in Cape Breton. More, his experience in other places, and in endeavours largely unfamiliar here, should bring a new and helpful perspective to the campaign to diversify the island's economy.
October 16, 1967

Closing of Nova Scotia Steel Plant

Perhaps I should say a little more about this subject. I think everyone will agree that there are in Cape Breton two main areas for future potential development, the Point Edward industrial park near Sydney and the Strait of Canso area. Having regard to the first, I want to emphasize what the hon. member for Cape Breton South (Mr. Mac-Innis) said about the tremendous amount of work which is being done in this area at this time. I have an up to date report from the Atlantic Development Board on that matter.
The number of studies which have been made is considerable, and while I agree that studies do not solve problems they have a tendency to help in finding solutions. Studies have been made of industrial park needs, of industrial opportunities, and of the layout and design for the Point Edward industrial park. There have also been studies of local government in industrial Cape Breton, of the availability of fresh water for fish plants, of the Cape Breton Island tourist industry, of fisheries resources and of industrial feasibility in several small industries.
From this limited list I think one must realize that the background of information on Cape Breton is getting better. It is my belief that everyone will benefit from the increased background information but specially the Cape Breton Development Corporation.
On the subject of realizations, may I say that people may not at this time have complete enough information on what is taking place in that area. I have a list of the various things which have been accomplished. In respect of basic services for the Point Edward industrial park a bulk handling facility, representing a cost of $950,000 is to be completed early in 1968. There is also a water-for-existing-industries-project, an expenditure of 270,000, which was completed in April of this
October 16, 1967

year. There is a recirculation of water project for the Pyromineral company at a cost of $150,000 to be completed next year. There is a sewage treatment plant at a cost of $400,000 to be completed next year. Dredging of the port has been completed at a cost of $162,000. A temporary wharf at a cost of $70,000 was completed last year as well as additional services for the park at a cost of $1,400,000. One could go on listing these things which have been done or are in progress to improve the facilities of the Point Edward industrial park.
I could also list a number of things done by other federal departments, particularly by the area development agency of the Department of Industry. Out of the 101 projects in Nova Scotia now approved eight are in Cape Breton. They have an estimated expenditure of $134 million, which represents either directly or indirectly 1,200 jobs. Out of 11 new projects coming up for approval five are for Cape Breton and represent a capital expenditure of $70 million, $10 million of which will come from ADA. This will mean 2,000 more jobs either directly or indirectly. One can readily see that what has been done in Cape Breton, at Point Edward in particular, represents an important step in the right direction.
I could also point out the industrial development taking place there and the federal contribution to that development. I could talk, for example, about the heavy water plants at Glace Bay and at Port Hawkesbury made possible by Atomic Energy of Canada's purchases.
Perhaps I should mention the fact that the FRED program in Nova Scotia is coming along nicely. Everyone realizes that the local problem is wider than even Cape Breton itself. Hon. members know that the FRED program under ARDA will bring in not only the four counties of Cape Breton Island but also the five mainland counties of Cumberland, Antigonish, Pictou, Guysborough and Colchester.
At the moment the government of Nova Scotia is establishing an organization within the cabinet of that province which will make effective provincial participation possible. The provincial response to the request for the appointment of a senior cabinet committee headed by the premier himself has been satisfactory.
Let me say a final word or two about the Strait of Canso area. I was there recently and was impressed by the quality of the location for industrial development and also by the facilities offered by that port for these great new ships of the future in the 200,000 ton to

Closing of Nova Scotia Steel Plant
300,000	ton category. Those of you who have been there recently know that there is already on location a gypsum shipping operation, a pulp and paper plant and a tank farm for the operations of the British American Oil Company. Canadian General Electric is constructing a heavy water plant and there is also at this time a thermal power station being built. C.I.L. is planning a chemical plant and Nova Scotia Pulp Limited proposes to expand its present establishment. British American Oil also has a big new project to establish a refinery in the area which will be the cornerstone of what everyone hopes will become an important petrochemical complex. This project is presently the object of a three-corner negotiation involving B.A., the Nova Scotia government, the federal government and the Cape Breton Development Corporation.
I understand as well as everyone the potential and tragic results to the area of the announcement last Friday. I sympathize, as everybody does, with the situation in which these steel workers are being placed. For my part, and on behalf of the government, I can only say that we will approach this problem with the fullest co-operation with the people involved and the provincial government of Nova Scotia.
c (3:50 p.m.)
The purpose of the second part of my intervention was to say that a change in the economic base of Cape Breton is possible in time. There are two focal centres of present and future development, namely, Point Edward, the former naval base, and the Strait of Canso. In my view these two locations must be fully utilized. Federal and provincial contributions must be made in order to attract industry into these areas. As far as I am concerned, with the instrument of the Cape Breton Development Corporation I can assure the house that everything will be done to achieve this objective. It does not take anything away from the drama of the situation we are studying but it brings a ray of hope into a pretty sad picture.


Mr. Pugh:: Mr. Speaker, I wonder whether the minister would accept a question at this time. Reference was made to the meeting with Dosco last Thursday. Was it suggested by the government that Dosco should withhold its announcement? Also, did the government intimate that there was or could be a possibility of setting up government centres of some type to study modernization, do research and the like?
October 16, 1967

Closing of Nova Scotia Steel Plant


Jean-Luc Pepin: These were confidential conversations, Mr. Speaker. However, I said in my speech that this was not a debating session. We were informed of what was going to take place; arrangements had been made to that effect.


Mr. Real Caouette (Villeneuve):: Mr. Speaker, I listened very carefully to the motion for adjournment made by the hon. member for Capre Breton South (Mr. Maclnnis) as well as to his reasons therefore.
As a matter of fact, this motion for adjournment is made as a result of economic conditions which do not look promising for Nova Scotia and especially for the Cape Breton area. It is once again an economic situation which calls for this adjournment.
We could have made a motion for adjournment about the gold mines in north-western Quebec which are in the same situation. We could have made a motion for adjournment to assist agriculture because it is in a bad way in many areas of Canada. We could have done the same thing in connection with other areas, even though the Minister of Energy, Mines and Resources (Mr. Pepin) tells us that it is not the general economy which is in a sad plight, but only one sector of it.
If to the steel industry one adds the gold mines, agriculture, and the uranium mines, areas which were all in a deplorable state not so long ago, one must conclude that our economy is very sick indeed. And the reason for that is very simple, it is because we are not masters of our economy. Our economy is under foreign control and we are at the mercy of foreigners.
Dosco, in Cape Breton, wants to sell its primary production and the only buyer, it seems, is our neighbour to the south who sets the price. It does not buy at the price set by Dosco, it sets the price for Dosco, Dosco pays salaries and operation costs and as it operates at a loss, of course, the government must subsidize it. And the hon. member for Winnipeg North (Mr. Orlikow) said a little earlier that the federal government had undoubtedly paid over $200 million in subsidies. The hon. member for Winnipeg North seemed to insinuate that those $200 million had been paid to the company to enable it to make a profit. But the opposite is happening. Being short of subsidies, the company can not maintain its operations. It will have to close down next April, and throw out about 3,000 workers.
Mr. Speaker, as long as we will not manage our own affairs and will not decide, here in Canada, to demand prices based on the cost price, we will not get rid of subsidies. The government grants subsidies to gold mining exactly for the same reason, that is because the United States, and not the Canadian government fix the price at $35 per ounce. Our Canadian government is like a puppet controlled by the United States. Up until now, this has been the only role played by the Canadian government.
[DOT] (4:00 p.m.)
It is impossible to make a decision. We ask the minister: Does the government intend to raise the price of gold? No, the United States object to that. The situation is the same with regard to steel. It is impossible to obtain the price needed for normal operations. Therefore the plant closes down and Canadians lose their jobs. This situation exists in many sectors.
The hon. member for Winnipeg North (Mr. Orlikow) suggests nationalization, that the government buy Dosco or other companies operating in Cape Breton, modernize the plants and improve production. But modernisation and automation, Mr. Speaker, will likewise produce lay-offs. And if we increase the production of these mines, steel plants or iron works, if we sell to the United States at a loss, we will still have to grant subsidies. We will still be struggling with, on the one hand, subsidies covered by the taxes paid by the people and, on the other hand, the transfer of manpower.
Just imagine how much work will befall upon the Minister of Manpower and Immigration (Mr. Marchand) in Canada, what with all those problems: to relocate Cape Breton people to Mattagami, north of Amos, or to Thompson, in northern Manitoba. We do not know where to send these people anymore, because of the lack of new secondary industries. This problem does not arise only in Nova Scotia. We heard talk, especially this past week-end, about the need for secondary industries in the province of Quebec. There are even some who envoked the need of a special status in order to secure secondary industries.
We have the same problems as Nova Scotia. This is an economic problem, which is common to all provinces.
And why is Sidbec, another steel company, but in Quebec this time, not in operation? Why? Because of a lack of technicians, of engineers, of goodwill, of human capital No.

Ociober 16, 1967	COMMONS
Because of a lack of opportunities. No. Because American interests have decided that Sidbec will not start its operations. And Sidbec is waiting. Millions were invested in it, but it remains idle, in spite of the fact that the provincial government is directly involved as well as individuals. Everybody wants to see the development of a primary steel processing industry which would put out the primary production which, at present, is wholly sold to the United States.
Whose secondary industries process our steel and send it back to us after making a profit, at our expense, naturally. That is the situation, and nothing else.
And what if the Minister of Energy, Mines and Resources were to tell us that a paper mill or an industrial park is being built or that another tourist organization is being developed, which the Cape Breton Development Corporation can help by every possible means? Yes, but how, by what means? By means of subsidies? And that, to promote primary production, everything else being left under the control of Americans. That is the problem, Mr. Speaker. I have nothing against Americans, but it seems to me that the government should argue with them and tell them: Listen, we are quite willing to let you have raw materials, primary products, but let us at least partly process those goods. When it is a question of manufacturing freezers, cars, of finishing a product made of steel, everything is controlled, everything is made in the United States. Nothing is made in Canada.
When we have an opportunity to develop or to continue developing our production, it seems that at that moment the government withdraws and forgets its responsibilities. It does no more than agree to an emergency debate which will not solve the problem of Cape Breton. Note that there is no legislation, there is nothing before the house.
We are discussing a situation in fact. Something that exists. Dosco will close its doors in April just as in our own area, gold mines will close their doors and have been closing them for a few years with the result that manpower must be transferred, moved here and there and, meanwhile, the economy of Canada is going to pot. Why? Because no solution is being suggested. The solution of the hon. member for Winnipeg North (Mr. Orlikow) is nationalization. What would it bring? Absolutely nothing. We have seen plenty of government ownership and nationalization.
DEBATES	3127
Closing of Nova Scotia Steel Plant
This morning, I was reading in a bulletin that Czechoslovakia where everything has been socialized and nationalized is forced today to revert to private enterprise in order to stimulate production because it was realized that nationalization was a complete flop for the development of the country. So much for Czechoslovakia. Others are in the same situation. In Canada, nationalization would settle nothing.
Instead of a private company, we would have a gang of bureaucrats, probably five times as many, to replace the present management of Dosco. This would be more expensive, this would produce nothing extra, and the bill would be paid once more by the Canadian people.
Mr. Speaker, that is not a solution. The solution is to produce in Canada all we can and to finish our primary products, i.e., to create secondary industries.
As was the case with Sidbec in Quebec, such industries can be started What is lacking? Money. There lies the problem, and nowhere else. What does Dosco lack to maintain its operations? Profits, in other words, money
The government cannot do more, because it has no more money because its income derives from a tax system restricting its activities and operations to promote the economic development of the country.
If the government took its responsibilities- I see the Minister of Manpower and Immigration (Mr. Marchand) and I know that he understands quite well my point of view-if the government used the credit of the Bank of Canada to develop our industry, it would not deprive the United States, it would not harm anyone, we would not be hearing about the closing of Dosco nor of the gold mines and it would enable us to create secondary industries.
But no one wants to resort to the services of the Bank of Canada. They would rather accuse the active members of the Ralliement Creditiste of lacking in objectivity and insight. However, if the present system is examined, what are the solutions?
We have just heard the Minister of Energy, Mines and Resources. Did he offer a solution? Absolutely not.
Later on, we shall hear probably the Minister of National Health and Welfare (Mr. MacEachen), a native of that part of Cape Breton. Has he a solution to offer? He has none. He will probably suggest social welfare
October 16, 1967

Closing of Nova Scotia Steel Plant assistance when the mine and the steel industry, are putting people out of work, and also rising taxation for those who work to pay for social welfare.
[DOT] (4:10 p.m.)
We are on a merry-go-round due to an absurd system. And to think that such a system has the blessings of the mass media throughout Canada.
The solution which is no solution, the good intentions of the minister, are praised. Ever since I was a youth, I have heard everyone's good intentions being praised but the results have always been the same. We go about, here and there, but we always face the same problem. Whether it be in one sector or another, of the Canadian economy, there is but one, and always the same problem: the problem of finance. That is the situation. But no one wants to tackle it, to look at it squarely; no one wants to face his responsibilities. No, people would rather call the Creditistes Utopians, and say that they do not know what they want.
On the contrary, Mr. Speaker, we want the monetary system to serve the economic needs of Canada. When the monetary system serves the physical possibilities of all the provinces, then we will no longer witness such situations as that which now confronts the people of Cape Breton, and the people in my area. When we do, there will be no repetition of the situation which prevailed at Elliott Lake in the riding of the right hon. Prime Minister of Canada, where people who worked there for 10, 12 and 15 years, who bought nice little homes through the Central Mortgage and Housing Corporation and, who after paying 12 or 13 years on their homes, after investing their savings in those houses, had to pull up stakes, abandon their homes, losing the money they had invested in them, and go to work elsewhere.


Mr. Gauthier:: To follow occupational training courses.


David Réal Caouette: Yes, and follow occupational training. Today, the Elliott Lake mines are operating again because we are exporting uranium, but the problem was ticklish, and hundreds and hundreds of Canadians lost all their savings there.
The same thing will happen at Cape Breton, the same thing happens in other industries. At home in my area in the gold mines, it is a problem and we are told that the situation is only local and temporary and that it will improve. Some improvement!

When I hear the hon. member for Cape Breton South give the background of the situation, I feel that he is right. But he has no solution to offer. The hon. member for Winnipeg North speaks of the situation: the poor workers of Cape Breton employed by Dosco will lose their jobs in April 1968 it will be a horrible calamity, almost a national catastrophe. Let us nationalize.
Mr. Speaker, we are against nationalization, because it will cost more to the Canadian people than the subsidies we are paying. And it prevents development of personal initiative.
I think the first resource to develop here is precisely personal initiative. The government should do everything in its power to help the development of personal initiative to enable it to be carried through instead of stopping before reaching its objective because American financiers call a stop. Let us stop being slaves to high finance and let us act positively to become masters in our own house, and to make our own decisions instead of always holding the special telephone line between Ottawa and Washington to ask permission to maintain Dosco and the gold mines, or to fix in our country the price for gold, steel, wood, farm products and wheat.
Mr. Speaker, I think it is time that we should face our responsibilities and stop putting poultices on a wooden leg to cure the evil to put an end to what goes wrong. A poultice on a wooden leg can help for some time, that is, so long as people are unconscious, careless or stupid. However, one of these days we shall have to take extreme measures to solve our serious problems. One of these extreme measures is to give our nation a monetary system which will enable it to develop and to expand so that we can say: we are the masters in our country, Canada, and we shall expand according to our own aspirations.


Mr. Howard Johnston (Okanagan-Revel-stoke):: Mr. Speaker, a few months ago when we were debating the bill to set up the Cape Breton Development Corporation, I am sure most members of the house felt this matter would not be back with us so soon. One must regret the announcement made by the Hawker Siddeley Company which can be used, as it has been used so devastatingly, against private enterprise. One would expect such action possibly from a British based company, knowing the economic or uneconomic basis of a socialized steel industry and
October 16, 1967	COMMONS
having had the experience of seeing the steel industry of that country nationalized, denationalized and nationalized again. It is not surprising either that this solution should come readily to the minds of some members of this chamber.
We know also that the steel industry is one of those industries like the aircraft industry in that it is a status symbol for the developing nations of the world. We know that a tremendous amount of the steel production in foreign countries has nothing whatever to do with economics but has everything to do with local feelings of nationalism and with assistance from the developed countries around the world. It is quite possible that through some of our aid programs we have been the authors of the distress the Canadian steel industry now faces.
The success of the Cape Breton Development Corporation requires the closest cooperation between private industry and government. I am afraid that this has not been accomplished in the months since the legislation was passed. Certainly we hope that provincial negotiations will come about and that the federal government will lend all the assistance it can. Co-operation with private industry must not be ruled out. It is, I suppose, a commentary on the way steel industries around the world have fallen victim to nationalization that any possibility of interesting private capital in the steel industry of this nation is remote. It would be worth the government's time, however, to pursue the question of the participation of private enterprise in the maritime and Canadian economies because it will be a sadder day still if all industrial decisions in this country cease to be based on economics and become entirely political.


Mr. Robert Muir (Cape Breton North and Victoria):: Closing of Nova Scotia Steel Plant these holdings in Canada. After this group had secured Dosco the then premier of Nova Scotia, the present leader of the Conservative party, said to the Dosco and Hawker Sid-deley group:
You have stated your confidence in this area and your intention to develop Dosco as a maritime enterprise. We accept your assurances and we look forward to a happy association which will be beneficial to us and profitable to you. You realize.
I am sure, that Dosco is not just an industry in the ordinary sense; it is the staff of life for many communities in Nova Scotia. It is something much more than just a matter of dollars and cents. I am sure that in assuming control of Dosco you have accepted in full the major responsibilities that go with that control.
The premier of that day along with many of us, Mr. Speaker, had, I guess, to be shown the truth. This group has shown that it did not come into Canada to expand, that it did not come into Canada to improve the industry, to modernize, to diversify, to find markets or to do anything that would be for the welfare of Canada or the employees of this industry. If I am wrong I hope I shall be corrected but the evidence, gentlemen, is there. We have seen no evidence that they have been remotely interested in expanding any of their operations in Canada.
People in governmental circles have been greatly fooled by this corporation, and in saying that I do not reflect on the members of any government involved. We in Canada, I think, are used to taking people at their word. In this instance their words were not worth anything.
In the Cape Breton Post for May 27 last the Minister of National Health and Welfare (Mr. MacEachen) was quoted, in reference to the $4 million granted by the Atlantic Development Board and the province of Nova Scotia to improve dock handling facilities at Dosco, as saying:
"The new and improved facilities should significantly reduce handling costs and improve the competitive position of the Sydney steel industry," he said.
"And with this government assistance, it is expected that additional company capital will be freed to completely modernize the Sydney steel plant itself and bring its operating costs closer to those of other Canadian steel companies."
Mr. MacEachen said that in terms of employment he is "extremely optimistic" that these developments will be beneficial over the long term.
I have no doubt that the Minister of National Health and Welfare made that statement in good faith. But he, along with so many of us, is misinformed and misled by this corporation. Just a few years ago, in 1962, members of parliament of all parties
[Mr. Muir (Cape Breton North and Victoria).!

and senators of all parties were invited to the Chateau Laurier by Mr. T. J. Emmert, the man who made this shocking announcement a few days ago. He wanted to get to know the members of the government and members of parliament. He had glowing words for what was going to take place in the future under Hawker Siddeley. Perhaps we are all from Missouri, Mr. Speaker, but we found this difficult to believe.
In any event, following this introduction he wrote me a letter which I should like to place on record. I assume that all members of this house and senators received a similar letter. It is dated March 16, 1962 and reads:
It was most kind of you to take a few hours out of your busy life to join me at dinner on Wednesday evening in Ottawa.
I thoroughly enjoyed the opportunity to exchange views on activities in the Atlantic provinces. We all have a common aim-the progress and development of that worthy part of Canada. You have my assurance I will be "pulling my weight" at all times.
We must arrange to meet again in the near future. In the meantime I want you to know how much I appreciated the occasion.
That letter was signed by Mr. T. J. Emmert. Down through the years, Mr. Speaker, we have seen nothing but doubledealing on the part of this corporation. I could refer to other glowing statements, references to making Sydney the Pittsburgh of Canada and that they were going to do this and do that. Someone or other was always making some sort of statement. Then the other day this gentleman took off for Britain in a great hurry, I understand, not even having time to meet with either the federal or provincial cabinets.
I think it is time that governments in Canada, regardless of political stripe and be they provincial or federal, inform these people without hesitation and in no uncertain terms just how they feel. It has been proven in the past that these people hold a gun to the head of the government regardless of which government is in office at the time.
[DOT] (4:30 p.m.)
For some time I have been trying to tell the house of the seriousness of the steel problem. The hon. member for Cape Breton South (Mr. Maclnnis) also drew attention to the area's difficulties by the questions he asked of the Minister of Industry. The Minister of Energy, Mines and Resources referred to the statement by the Minister of Industry on June 27, when replying to questions I had asked in the house about recommendations with respect to setting up a royal commission
October 16, 1967	COMMONS
to look into steel operations in Sydney. At that time the Minister of Industry said that because of the complexity of the problem the responsible authorities would be able to examine the entire question in a more informed way if a thorough study of the steel industry in Cape Breton were available. We saw no royal commission; we say only a voluntary study which was carried out under the aegis of the economic planning board of Nova Scotia, representatives of the Atlantic Development Board, the Department of Industry, and Dosco. The report this group brought in was that apparently a good longterm future for basic steel existed. I do not know what the period was. I presume these people are experts in their fields. They said there was hope for basic steel production at Sydney.
I do not think that anyone in the government, in the opposition, in the province or among its municipalities ever thought that matters would come to this pass. We are used to being treated roughly by this corporation; yet I doubt if anyone thought that it would say, "Gentlemen, in five and a half months we shall throw more than 3,000 people out on the street and we are not interested in doing anything about it."
The minister spoke about moral and social responsibilities. We all feel the same way, and I shall refer to this subject later. A royal commission was not appointed and I think it should have been. The government should have taken serious and drastic action. Now that the blow has fallen I hope the government will do something other than offering us a repeated litany of studies, studies and more studies. Studies are important and I am pleased to see them initiated. Yet the Minister of Energy, Mines and Resources said that he had not had a debate at the recent meeting. He was informed of the corporation's intended action. This is what one might expect of Hawker Siddeley.
The minister deplored the announcement. We all deplore it. He feels that the company has a moral obligation to the people of the Cape Breton area. In a jocular fashion he referred to instant nationalization which had been proposed by the hon. member for Winnipeg North. The question must now be asked, what can be done to assist those of the Cape Breton area?
I believe in free enterprise, my party believes in free enterprise. Only a few months ago, during the debate on the Cape Breton Development Corporation, I spoke of the problems in the field of steel. Though I was in 27053-1981
DEBATES	3131
Closing of Nova Scotia Steel Plant favour of free enterprise I also supported the concept that the corporation should take over the responsibilities in regard to steel at Sydney.


Mr. Herridge:: The hon. member is in favour of our policies.


Robert Muir: The hon. member for Kootenay West has said that I am in favour of their policies. Possibly he was not present during the previous debate.


An hon. Member:: He did not hear it all.


Robert Muir: I suggested previously that I was in favour of placing steel under the Cape Breton Development Corporation.
When unique situations arise they need unique solutions. Drastic problems require drastic solutions. I know that the step we propose is a drastic one for the government to take. On other occasions several hon. members have said that it would be shocking to bring legislation similar to that which established the Cape Breton Development Corporation before the house. Yet that bill is now on the statute books of Canada. The coal industry is covered. A small amendment to the legislation is all that is needed to include steel. I do not say that steel ought to be included forever and a day. Perhaps at some time the steel facilities might be sold to private interests. If closure of the plant comes we must, I suggest, have some years to adjust.
As Canadians, have we not a right to expect some level of government to expropriate the holdings of Dosco?


An hon. Member:: Confiscate them.


Robert Muir: One of my colleagues says that the holdings ought to be confiscated. In view of the drastic situation perhaps the government might have a right to do something like that. The company could then go to court for its settlement. That is how the people of this country feel; that is how the people of Nova Scotia, of the Atlantic provinces generally and of all Canada, I am sure, feel. Can this company come into this country, do almost anything it likes and get away with it? In the last few days Mr. Ian MacKeigan of the Atlantic Development Board and Mr. Robertson Ord of the Cape Breton Development Corporation have said that they are shocked by what has happened. They have gone on
3132	COMMONS
Closing of Nova Scotia Steel Plant record as saying that something must be done. What that something is I am not prepared to say.
I am not an expert in steel, I am not an expert in economics. Possibly, having been unemployed, I could call myself an expert in how it feels to be unemployed. It does not feel good, nor is it good to be unemployed. Yet several thousand people are to be unemployed if something is not done.
To get back to a possible solution, and this is only a possible solution, I have reason to believe, on good information, that the interdepartmental committee which the government set up prior to the Cape Breton Development Corporation legislation recommended to the government that steel should be included inasmuch as within a period of years steel would have to be included in any event in the Cape Breton area. The government rejected that.
[DOT] (4:40 p.m.)
The hon. member for St. John's East (Mr. O'Keefe) has had a taste of what this corporation can do. It moved out of Bell Island lock stock and barrel and left about 1,000 people unemployed. How long are we to allow a corporation of this type to carry on in this manner?
We were told that its new operation at Contrecoeur would complement Sydney. We opposed the corporation when it decided to establish at Contrecoeur but its spokesmen said, "No, gentlemen, have no fear. This will complement Sydney. We will get all our basic steel from the plant at Sydney."
When the corporation decided to invest money at Contrecoeur, as a last-ditch effort the Nova Scotia government in 1963 asked Dosco to reconsider its decision to establish in Quebec and instead expand its Sydney operations. To make the request attractive the Nova Scotia government threw out a strong hint that if its wishes were acceded to it would build a new rod and bar mill with its money. Dosco refused the request. The reason chairman T. J. Emmert gave was that the company could not afford to have its hands tied by politics since a new government might alter the situation.
Time and time again governments at both levels have tried to co-operate with this corporation. The hon. member for Villeneuve (Mr. Caouette) has suggested that there should be no nationalization. I fully agree, if he has another solution. Maybe I understood him incorrectly in the translation, but I think

DEBATES	October 16, 1367
he also said there should be no welfare payments made to those affected because taxes would go up. I wonder just what he does suggest as a solution. I am sure each of us would like to have an answer to the problem.
I do not think the hon. member for Villeneuve ever heard the hon. members from Cape Breton Island-the Minister of National Health and Welfare (Mr. MacEachen), the hon. member for Cape Breton South (Mr. Maclnnis) and myself-oppose the pouring of millions of dollars into the province of Quebec for Expo, money which I say was well spent. Quebec is part of Canada too, and I would just like to say that we on Cape Breton Island feel we are also part of Canada. We feel we are part of this great nation of ours, and at no time did we protest millions of dollars going into the province of Quebec for Expo. Expo has been a wonderful thing, a tremendous thing which has made us all proud to be Canadians. I think the hon. member for Villeneuve should reconsider some of the statements he has made.
It is a time for action by governments. I do not know what the action should be. Someone may say, "Sit down if you don't know," but all I am trying to do is impress the importance of action on the government.
The Minister of Energy, Mines and Resources (Mr. Pepin) went on to speak of many different projects that have been initiated by the provincial government, by the federal government and by both governments in cooperation with each other. They are all good and we hope they come to fruition. The industrial park at Point Edward is in my constituency and I look forward to these developments. However, I am sure the minister will agree that such projects are slow to develop and some of them do not require a large work force.
At the Point Edward industrial site there are fewer people employed now than when it was a naval base operated by the Department of National Defence. The naval base employed about 700 people, but for reasons known to itself the government closed the base. Seven hundred jobs were lost. Many of the workers had been employed there for 15 to 20 years. Even now I receive letters from a number of those people who have not been able to obtain alternative employment.
I am trying to point out the importance of employment in Cape Breton Island, Nova Scotia, Newfoundland, Prince Edward Island and New Brunswick, as compared with the cities of Montreal, Toronto, Calgary or
October 16, 1967

Vancouver. If job closures occur in those cities affecting 200, 300, 500 or 600 people, for example, there is an opportunity for them to enter some other type of employment. Regrettably such opportunities are rare in the Atlantic provinces. In the Sydney area and in Cape Breton the opportunities are nil.
I should like to read into the record a telegram which reached my office this morning:
An emergency meeting ol Sydney Deanery priests today expressed commendation of your stand taken regarding Hawker Siddeley and the Sydney crisis. Never before has so much attention been concentrated on our problems with the establishment of the Atlantic Development Board, Industrial Estates Limited, Cape Breton crown corporation. ARDA, etc. These agencies must be given sufficient time to attract new industries and create new job opportunities. Closing of the steel plant in six months is absurd. Every effort must be made to continue operations of the steel industry while an all-out effort is made to build a new economic base for Cape Breton.
Very Rev. E. J. Nash, Dean.
Gentlemen, we require time. Time is the important factor. We cannot allow this steel plant to close in less than six months when all these people will be thrown on the street in such a callous manner.
Someone may say, as the hon. member for Villeneuve rather suggested, "We pour money into certain areas. Why should we not do the same in other areas"? Over the years I have been in this house money has been put into many different industries in western Canada, central Canada and other areas. We are all Canadians and I do not think any hon. member who seriously thinks about the matter will strenuously object to moneys being granted by government, of whatever stripe, to certain areas in order to assist those who are in need and in distress. On this topic I would like to read into the record a portion of an editorial which appears today on the front page of the Halifax Chronicle-Herald. It reads as follows:
Ottawa in recent years, even with equalization grants to the smaller provinces being in effect, has poured more than $8 billion into various programs in other parts of this country, and outside, plus some substantial grants to the Maritimes. But only $254 million has been given in assistance to the Cape Breton coal and steel industries, and that stretched out over a period of 38 years.
People of Nova Scotia will have to conclude that their region is little more than a special protected preserve for Quebec and Ontario interests who exert the most influence in the construction of our national tariff and freight rate structure.
If closure takes place, it is largely the consequence of federal economic, tariff, transportation and freight rates policy and there is little, if anything, the Nova Scotia government can do in this
313$
Closing of Nova Scotia Steel Plant regard, let alone retrieve this possible economic disaster of monumental proportions.
The question that Nova Scotians must ask themselves, and the federal government also, is, are we Canadians deserving of the same treatment as other regions of this great and wealthy country?
[DOT] (4:50 p.m.)
As the hon. member for Pictou (Mr. MacEwan) probably will tell you-he has spoken many times in this house regarding the employment situation in his own area -the Trenton steel plant, which has also been operated by Hawker Siddeley, employs about 1,300 people. Then there are the Halifax shipyards where I believe there are approximately 1,100 employees. I wonder on what morning the people in these and other areas will wake up to find that Hawker Siddeley has again delivered an ultimatum to the federal and provincial governments. This is cause for serious concern on the part of all governments and all of us as to what direction we should follow.
Since this development occurred people from all walks of life and from all political parties have issued statements. All the statements have been moderate. No one has tried to make a partisan political issue out of this most serious and tragic situation except, I am forced to say, the leader of the Liberal party in Nova Scotia who previously sat in this house with us. He very viciously issued a partisan political statement to the press and radio condemning the former premier of Nova Scotia and almost anyone who was connected with him. By doing so I am sure he is also condemning the Minister of National Health and Welfare (Mr. MacEachen) who is from our own province, who I am quite sure has tried to do anything he could to assist the industry and who I assume, and I believe I am right, also did not know of the developments which were to take place. I think it is regrettable that a man who aspires to be the premier of a province of this country should stoop as low as Mr. Regan has in this very sad situation.
I have mentioned the matter of freight rates, or if I have not I intend to do so because freight rates have a great part to play in the transportation of steel from Sydney to the markets. Freight rates definitely come under the jurisdiction of the federal government. Then there is another matter in which the federal government must be interested. I refer to the Kennedy round. What effect will that have on steel? Are we to have steel brought into this country as a result of the Kennedy round negotiations
October 16, 1967

Closing of Nova Scotia Steel Plant which will undersell steel produced in this country? What will happen to STELCO, Algo-ma and the others? Mind you, there are many good points about the Kennedy round negotiations, but this is something which I believe the government should think about a little.
During the course of this debate I hope that the Prime Minister (Mr. Pearson) or the Minister of Industry (Mr. Drury), whose relationship with Dosco is quite close, will at the first opportunity undertake to provide a full and detailed statement with regard to the closing of the Dosco steel mill in Sydney. I hope they will do so in as complete a manner as possible, although they probably do not have too much information. A very few days ago I asked the Minister of Industry what was going be done by the government with reference to the steel industry at Sydney. At that time he advised that he was meeting with the company in a few days. Surely the meeting about which he spoke must have been a shocking surprise when he was advised by this corporation of its intended action.
Although I believe I know the answer, I am wondering whether any indication was given when the arrangement was made between the Atlantic Development Board and the government of Nova Scotia that there would be such a thing as the closure of operations at Sydney. I doubt very much that there was.
During the period when there have been problems in respect of steel, which goes back quite a few months, we on this side of the house have questioned the Prime Minister, the Minister of Industry and the Minister of Trade and Commerce (Mr. Winters) with regard to exports. We have asked the Minister of Trade and Commerce what efforts were being made by his department to assist us in selling our steel in overseas markets. Such questions have been posed by the hon. member for Pictou, the hon. member for Cape Breton South and others. There were requests for royal commissions and for information. Did that gentleman try to obtain some information from Dosco concerning what the future might hold? If so, his efforts were to no avail.
Now that we have arrived at this situation I hope that the government will do anything and everything possible. I realize that this matter covers a wide scope. I am sure our colleague from Cape Breton, the Minister of National Health and Welfare, will continue to

do his utmost in an effort to resolve this problem. Time is what we require. If a number of years were involved it would be bad enough, but five and a half months does not give enough time to any government or to anyone else to try to resolve such a serious problem.
In conclusion I should like to place on the record an editorial which appeared on the front page of the Cape Breton Post of Saturday, October 14. I wish to do so in order to give members of the house an idea of how the people in this area feel. I have no doubt that this editorial indicates how the people of Cape Breton and elsewhere in Nova Scotia feel. As I have already indicated, a further editorial appeared in todays' issue of the Halifax paper. The heading of the editorial in the Cape Breton Post reads: "10 Years Of neglect; Hawker Siddeley-A Farcical Operation."


The Acting Speaker (Mr. Rinfret):: Order, please. I regret to interrupt the hon. gentleman but the time allotted for his speech has expired.


An hon. Member:: Carry on.


The Acting Speaker (Mr. Rinfret):: Does the hon. member have the unanimous consent of the house to continue his speech?


Some hon. Members:: Agreed.


Robert Muir: I wish to express my thanks to you, Mr. Speaker, and to the members of the house for allowing me additional time. I shall not abuse the privilege after I have placed this editorial on the record. It reads:
Sydney steelworkers stand today as the victims of the biggest doublecross in Cape Breton's industrial history. The engineers: Hawker Siddeley of Canada and England. In less than six months, if they have their way, the Sydney steel plant will go out of existence. In ten years, since Hawker Siddeley bought the steel plant for a song, this company has wrought the destruction of the only basic steel industry in eastern Canada. The warning signs, it must be admitted, appeared some years ago, despite assurances from Hawker Siddeley that the Sydney steel plant's future was assured for at least 15 to 20 years. The processing of Sydney basic steel at Contrecoeur-which should have been built in Sydney in the first place instead of Quebec- would continue for a long period. This has continued for less than three years in fact. Suddenly Hawker Siddeley has discovered that prohibitive costs will force this company to abandon this operation. Hawker Siddeley must have known this all along, yet they were quite willing to borrow $4 million from the provincial government-
October 16, 1967


Hon. Jean Marchand (Minister of Manpower and Immigration):: Mr. Speaker, I feel that those who have already taken part in the debate have given a pretty clear idea of the scope of the problem we are discussing this afternoon.
Of course, the situation in Sydney is quite unusual, in that it involves the sudden collapse of the entire economy of a city, of a community. As the hon. member for Cape Breton North and Victoria (Mr. Muir) said earlier, without some government intervention, one fails to see how the people can remain hopeful.
Now, Mr. Speaker, even though the case of Sydney presents some particular tragic aspects, the fact remains that such situations are becoming more frequent in Canada. At present, Sydney is involved; at one time, it was Bell Island in Newfoundland. Other such cases occurred in Manitoba and every day, we learn that large establishments are closing down, undergoing some changes, being transferred or disappearing. It seems that the very essence of our modern economy tends to bring about tremendous changes.
For Sydney, it is probably more tragic as it was for Bell Island. In the case of Bell Island, there was only one industry from which the whole community drew its income and, at a moment's notice, we learned that the business was shutting down, that the people were out of work and that the only source of income for the community had dried up.
Obviously, I do not think that anybody in this house can find a magic solution to any problems which might occur in this field. But what strikes me especially, in the case of Sydney, is the fact that the officials of the company behave as if thousands of people were not really involved and that after concluding what they call their profitable operations, all they had to do was simply to close down the place and say: "Goodbye, gentlemen, we are not making money any more in Sydney. It is not an economic operation."
We know fully well that there is not one single business in Canada which does not benefit, in its establishment, in its operations,
October 16, 1967

Closing of Nova Scotia Steel Plant from the human contribution of the workers, first, of the cities and towns where it is established, in short, which does not benefit from the social and economic sub-structure of our society. Such is the case for Sydney; the company took advantage of all those benefits and now all we get is a few months' notice.
We are quite aware that cities such as Montreal and Toronto may easily absorb, relatively speaking, 300, 400 or even a few thousand people, but we also know that, in the case of Sydney, this is not possible. When the steel-works are closed down, this community will be faced with an insoluble problem, and we shall also be faced with an extremely difficult problem.
There will be dismissals, lay-offs brought about by technological changes, or simply by an industry closing down. I cannot get it into my head that a company which knows, not just a month or two, but often several years in advance, that it will have to close down or to alter its operations, thus seriously affecting a great many people, should consider that its responsibilities are over just by giving notice of its intentions a few months in advance.
Since this sort of thing happens more and more often, Mr. Speaker, I wonder-I am merely asking myself a question, but very seriously-whether, since it seems that some companies are not willing to consider this human aspect of their activities, we should not force them to do so through legislation. Otherwise, we will be faced with this sort of problem every day, people will be affected because they were only given a few months' notice. At present there is the case of Sydney, but there may be others. At any given moment, a company may start a business in the far North, for example, get families to move there because it needs them, and then one day decide that this particular undertaking is no longer economic and say to its employees: beginning today, we are pulling out; you are on your own.
Therefore, I think it would be childish for the House of Commons to believe that we can prevent such things from happening or such closings. They are unavoidable; and will likely become more and more so.
But I think that we should anticipate, either by legislation or otherwise, in what conditions this should come about, so that human beings are not made the victims of decisions taken behind closed doors by a company's board of directors.


Robert Muir: Mr. Speaker, would the minister permit a question on that point? He mentioned Bell Island. Would he advise the house how much notice Hawker Siddeley gave the employees, the municipal authorities or anyone else of their intention to close the operations at Bell Island?


Jean Marchand: I cannot answer that question offhand, Mr. Speaker, but I shall try to find out the length of the notice given.


An hon. Member:: It was two weeks.


Jean Marchand: I am told it was two weeks. Well, that is not an improvement.

October 16, 1967



So, Mr. Speaker, I know that on Bell Island our programs have helped to relocate people. They have helped them through an extremely difficult period. I hope we do not have to resort to them at Sydney. But I will simply say to the house that if we have to, everything is ready to help the workers who will be affected.
At the present time, we have 1,840 available places for occupational training, which were negotiated with the Nova Scotia government. Obviously, if we add to this the 3,000 workers from the steel mills, we shall have to negotiate another agreement and we believe that we can help a lot and improve this situation still more because in that area of the country, there are facilities to give more occupational training and to increase the number of students.
But all this is like a little balm on a wound. I do not consider that an ideal solution and I should not like to take the hon. members' minds off the basic problem raised by the closing down of this company in the circumstances we all know. I can only assure the house that we are ready to put all our programs at the disposal of the Dosco workers at Sydney.
I conclude this brief intervention because the Minister of National Health and Welfare (Mr. MacEachen) will certainly deal with the matter in a more elaborate way. I only ask the hon. members to remember these two points:
First, do we have a satisfactory plan in case the closing down of a business destroys the whole economy of a community? What means do we have with which to correct a situation such as the one in Sydney which is of a special type?
Second, in the case of technological changes which affect workers and of the closing down of a business, what notice should the employers give to prepare the community and to allow us to take steps to help the people?
Naturally, we cannot hope for an ideal society in which no changes would occur. A fully developing economy inevitably brings about changes, and these should not be rejected. But we must find the means to help the victims of these decisions made by boards of directors.
Mr. Speaker, in this particular case, I find it absolutely immoral on the part of a company to refuse to meet the duly appointed representatives of the governments and the workers to discuss their problem.
Closing of Nova Scotia Steel Plant
I must admit that on hearing of the negative answer of the company, I shuddered as I did a few years ago when I was working with labour unions. In any event, it means that all is not lost, that there is still some hope.
We will therefore do what we can in the department, in the hope that on a more general plan, we can find an adequate solution for the people of Sydney.


Robert Muir: Mr. Speaker, would the minister accept another question, please? I have listened very intently to his remarks. It would appear from the minister's statement that he accepts as a fait accompli the ultimatum that the plant will be closed. I may have misunderstood the minister, but will he not continue to do what he can in his position as minister with his colleagues in the cabinet to keep the plant open for at least a period of years until we are able to provide alternative employment?


Jean Marchand: Mr. Speaker, I do not think we have the authority to make the company change its mind. A company can close its plant whenever it feels it should. Of course, we can decide to reopen it, but we cannot prevent the company closing it. I do not know under what authority we can do that.


Mr. H. Russell MacEwan (Pictou):: Mr. Speaker, in a short period of time I just wish to endorse the suggestions and submissions made by my colleagues, the hon. member for Cape Breton South (Mr. Maclnnis) and the hon. member for Cape Breton North and Victoria (Mr. Muir), on this very important matter. I listened very intently to what the two members on the treasury benches who spoke had to say. I made notes on the remarks of all the speakers who preceded me. I believe that some of the suggestions and submissions they made are most interesting and should be taken into account at this time.
As has been pointed out by the hon. member for Cape Breton South, the Sydney steel plant is the only basic steel plant in the Atlantic area. It is important not only to the Sydney area but to other areas of the province of Nova Scotia and undoubtedly to other areas in the Atlantic provinces. As the hon. member for Cape Breton North and Victoria suggested, there are in my constituency the Trenton plants which are owned by the company that owns the Sydney steel plant. There are several industries operated by the
October 16, 1967

Closing of Nova Scotia Steel Plant Hawker Siddeley group, including the Eastern car company, the Trenton steel works and Trenton Industries Limited.
[DOT] (5:20 p.m.)
I suggest that the company which would be most affected by the proposed closure would be the Trenton steel works where axles are made for railway cars. This is the only company in Canada which makes axles, and the ingots and billets are taken from Sydney to the Trenton steel works. There one of the largest hammers in Canada and indeed in North America pounds these ingots and billets which are then sent on for finishing. The closure would be important to many employees in my area working in the axle-hammer department and the axle-finishing department, and in the marine forging and marine finishing departments which carry out heavy forging of products such as propellor shafts for ships in this country. Undoubtedly the people in my constituency as well as the people of the Cape Breton area and indeed in the whole of the Atlantic region are most apprehensive about this proposed closure.
The hon. members for Cape Breton South and Cape Breton North and Victoria have always been in the forefront in bringing forward suggestions of importance to their area. They have been most vociferous, and properly so, in speaking for their constituents ever since they came to the house. It has indeed been a pleasure to be associated with these two members who have done so much for their constituencies. It was suggested by these gentlemen that since Hawker Siddeley is a British Company it should take some responsibility for the proposed policy of Dosco. I think the Globe and Mail of this morning contained a very good article with reference to this matter. When the present chairman of the Hawker Siddeley group, Sir Harold Hall, came to Canada in the last few days he was asked whether as head of the Dosco parent company he could explain why the steel operation was being closed. He said:
This is happening in Canada, not England. I am afraid I must refer you again to Montreal.
I suggest that if a company, regardless of where it comes from, buys a Canadian company and establishes a policy of employment, or in this case a policy of unemployment, then it must be ready to stand behind such a policy and be responsible to the Canadian government and to the people in the areas where the industry is located. The senior Canadian officials of the company obviously had to abide by what was dictated by the

directors of the parent company. If such was the case, then let the officials of the parent company come here and speak out and bear the responsibility for what they have done. Let them come to a meeting. I think the Minister of National Health and Welfare (Mr. MacEachen) as well as the officials of the government of Nova Scotia would be very happy to meet the officials of the company, not only those in Canada but those of the Hawker Siddeley group in England, and I hope this will be done.
As has been said, Cape Bretoners and people generally in the Atlantic area have been apprehensive about what would happen under Hawker Siddeley. I remember that in 1957 there was much apprehension both in my area and in Cape Breton. I remember that municipal officials met with many people in Sydney as well as in my area and repeated what the company had said before the board of trade in Sydney as to what they could do for the area. I am afraid this is not what happened. The article in the Globe and Mail contains the following statement:
Cape Bretoners have feared mill abandonment for decades, particularly in recent years as they have watched Dosco close mine after mine in Cape Breton, pull out of coal mining in Cumberland county on the Nova Scotia mainland, and abandon all but one mine in Pictou county. It closed its limestone quarrying operations and iron ore mining in Newfoundland while opening a new steel fabricating plant in Quebec. The Hawker Siddeley group took control of Dosco in 1957.
What I cannot understand, along with the former and present premiers of Nova Scotia as well as many other people including the federal authorities, is the reason for this rapid change. It has been said many times by Dosco that the Quebec mill at Contrecoeur would be a boost for Sydney and would provide a new market for basic steel. The present premier of Nova Scotia has stated that this proposed closure is an incredible change of attitude.
I listened with interest to what the Minister of Energy, Mines and Resources (Mr. Pepin) has to say, particularly with regard to the joint report of the voluntary economic planning board of Nova Scotia, the Atlantic Development Board and Dosco as well as some federal officials. I have not read the report but I would like to. The minister said that some parts of the report lead one to believe that the industry still has a chance This is what I cannot understand. It seems very strange that immediately after this report was tabled this company should have come to the federal officials and to the Nova
October 16, 1967	COMMONS
Scotia government and said "We are closing this plant". I know that as soon as this report was made the voluntary economic planning board of Nova Scotia set up a committee headed by Rev. J. H. MacNeil of the extension department of St. Francis Xavier university to study the report fully. I think there is still time for it to be studied.
As suggested by the hon. member for Cape Breton North and Victoria, interim steps should be taken. I am not sure, however, whether this should involve taking Hawker Siddeley into the Cape Breton Development Corporation. I think this should be looked into and the report should be studied very closely to find out whether anything can be done to keep this plant open.
I note that in the press release the present chairman of Dosco, Mr. Emmert, stated that the steel mill at Sydney has become outdated by reason of technological developments. As has been suggested by the hon. member for Cape Breton North and Victoria, some questions should be asked such as what was done to keep the plant at Sydney updated and to make it competitive. Surely there must have been reasons other than location which must have made this plant non-competitive in the basic steel industry of the area and indeed of Canada. I think many questions should be asked of these officials and I suggest that pressure should be applied to bring about a meeting with the officials of Dosco to find the answers to these questions.
I was interested in the suggestions put forward by the Minister of Manpower and Immigration (Mr. Marchand). He asked several very interesting questions such as how much notice should be given by a company in such a situation and whether legislation should not be drafted to ensure that companies cannot carry out proposed closures of plants as is being attempted in this case. He asked: How can we remedy the situation? This is the type of question which should be posed. I am reminded of the situation in the Bell Island area and I know what the hon. member for St. John's East (Mr. O'Keefe) went through at that time.
I believe that what is happening now in Sydney is a test case which must be watched very closely and which may set a pattern for other closures throughout the country. I do not have the statistics with me but the Sydney plant, with its employees and its ancillary services, has a great bearing on the economy of the province. A comparison could be drawn, for instance, with areas such as
27053-199J
DEBATES	3139
Closing of Nova Scotia Steel Plant Ottawa if the civil service were to be removed from this capital city.
I think the hon. member for Cape Breton South put forward the case very well. The hon. member for Cape Breton North and Victoria suggested that perhaps on an interim basis the powers of the Cape Breton Development Corporation should be extended to enable it to assist the Sydney steel plant. I believe this possibility should be considered. I think that employment in that area is of great importance.
[DOT] (5:30 p.m.)
I submit, Mr. Speaker, that no useful purpose will be served by standing here and criticizing people. I feel there should be a meeting between the federal government, the provincial government, the various agencies involved and the people of Dosco or Hawker Siddeley as soon as possible to look into this important matter. I know, as the Minister of Energy, Mines and Resources has pointed out, that attempts have been made to aid the Cape Breton area. I am thinking of other things that have been started which he mentioned, such as the ARDA study of the nine northern counties. I believe this study should be accelerated and a plan implemented. Not long ago I asked the Minister of Forestry and Rural Development (Mr. Sauve) about this program and he said it was being studied closely by the officials of the government of Nova Scotia and his own department. I hope a plan will be accelerated.
In so far as the coal mining industry of Cape Breton is concerned, the government set up the Cape Breton Development Corporation which will supervise the phasing out of this industry over a number of years. At least in that case some warning was given of the proposed action. In this case there has been practically no warning and the action should not be permitted.
As I have said, I believe a meeting should be held and a number of questions should be asked the representatives of this company. They must be reminded, as the Minister of Energy, Mines and Resources stated, that they not only have a legal but a moral obligation to the area. We should ascertain what the legal obligations are because we know what the moral obligations are. The matter is important not only to the province of Nova Scotia but to the whole Atlantic area. This company is one of the large companies in Canada. I hope such a meeting will be held
October IB, 1987

Closing of Nova Scotia Steel Plant within the next few days and that the company will send representatives to such a meeting.
As I pointed out earlier, assistance from ARDA, the area development agency, the Atlantic Development Board, and various agencies such as Nova Scotia's Industrial Estates is good. They have done a lot and I hope will do much more. The steel industry has a high labour content. It is most important not only to secure new industries but to retain present ones. I repeat, therefore, that I hope such a meeting will be held as a result of which many questions will be answered and the law laid down to this corporation.


Mr. J. B. Siewari (Parliamentary Secretary to Minister of Public Works):: Mr. Speaker,
there is no doubt whatever in my mind, after listening to those who have spoken already, that the House of Commons will want the government of Canada to be as helpful as possible and proper to the government of Nova Scotia and to all others immediately challenged by the decision announced by Dosco last Friday. In any examination of what will have to be done in these circumstances, the point of departure must be the report issued in September, 1967, as the result of a study of the Sydney steel industry by the voluntary economic planning board of the government of Nova Scotia. I should like, therefore, to put before hon. members the basic observations in that report.
Evidently the question raised was Whether or not diversification of the steel-making operations at Sydney would be warranted. In no place in the report is it stated that this is the question on which the focus is concentrated, but I think if one reads the report carefully it will be clear that this was the topic to which those making the study were directing their attention chiefly. The answer to that question was in the negative.
However, the report is based on the assumption that the present operations at Sydney are economically sound, and it was made as late as September, 1967. It was prepared with the co-operation of high officials of Dosco who made available information which, because it concerns the company's competitive position, was not made public. In other words, this is a report prepared with the co-operation of Dosco and issued with the approval of Dosco. On pages 21 and 22 of the report we find the very question that is before this house this afternoon. I quote:
What, then, are the future prospects for steel making at Sydney? The mill has a continuing but

irregular demand for rails, which cannot be expected to increase but which may continue to provide a useful source of sales. In addition the Atlantic provinces provide a small but growing source of demand for such rolled products as concrete reinforcing bars and small structurals which Sydney can provide. Thirdly, there is an existing captive demand for billets and ingots from Dosco's mills in Quebec. While a general slackness in business has recently reduced this demand, it should revive with improved business conditions and expand considerably as the flat rolling mills are brought fully into commercial operation. Sydney can be expected to continue to supple ingots and billets to Contrecoeur for many years provided it is economic to do so. More specifically it will continue at long as the current production costs plus freight are less than the variable and fixed costs including capital charges of new steel-making facilities at Contrecoeur.
It is quite clear that the basic assumption is that the basic operations at Sydney are at the moment economically viable. Despite that assumption, I think we have to recognize that the analysis of steel making at Sydney was sombre and depressing.
What the report states in this connection is that whereas 50 years ago the proximity of a steel mill to coal and iron ore was the basic consideration in determining whether or not a mill in a particular location was economically sound, this is no longer the case. The reason for this is that new technology has reduced the amount of coal that is necessary to produce a ton of finished steel, and the discovery of high-grade ores along with techniques for refining low-grade ores has made it economically possible to bring the ores to mills situated far away from the source of these ores. Moreover, the importance of scrap in the steel-making process has tended to act as a magnet to draw steel production toward centres of population.
Of course, when you take into consideration two additional factors I think you see how serious was the problem that concerned the voluntary economic planning board. One is that the coal in the Cape Breton mines came to be of increasingly little value for steel processing because of its high sulphur content. Then the discovery of iron ore bodies elsewhere tended to make reliance on Wabana unnecessary and, indeed, put Bell Island out of business. The report says that the logical location for steel production today is not where the raw materials are but close to markets.
Now, unfortunately, markets in the Atlantic region are small. The report says that in 1966 Nova Scotia had about 10.2 per cent of Canada's steel production capacity but that the steel products made at Sydney and consumed in the Atlantic region amounted to
October 16. 1967

only about 1.8 per cent of Canadian production. The report points out also that today the most successful steel-making operations are those which are able to sell a large part of their product within approximately 200 miles of their plants. In other words, the steel-making operation at Sydney was not in a very competitive position except in so far as rails and ingots and billets were concerned. In so far as its other products were concerned, it was likely to be what they call a residual producer for the rest of Canada. When the company exported to other countries it would find itself competing, not with the domestic steel-makers of those countries, but rather with other countries in which production costs were relatively low.
[DOT] (5:40 p.m.)
It is for this reason, Mr. Speaker, that the report comes to the conclusion that steelmaking in Sydney would go on based chiefly on production of rails, ingots and billets for use by Dosco and possibly by Siderurgie de Quebec at their flat rolling mills in the St. Lawrence valley, in addition, of course, to supplying the relatively small market in the Atlantic provinces.
Evidently, Mr. Speaker, since the time Dosco participated in the preparation of this report they have come to the conclusion that this basic operation is beyond their capacity, that even these limited objects are beyond the capacity of the owners of Dosco. When I say they have come to the conclusion that these objects are beyond their capacity, what I mean is that they have come to the conclusion it is not profitable for them to continue .production at Sydney, that they can take their capital and their managerial skills and employ them more profitably elsewhere. But this does not necessarily mean that they cannot make money at Sydney.
There are certain questions, Mr. Speaker, that I think we all ought to consider seriously when we look at the problem created by the announcement of Dosco. First, there is the intimation by Dosco that they will incur losses. In this connection I think that a meeting between company officials and provincial and federal government representatives would be most useful.
I should like to refer to the press release put out last Friday by Dosco. On page 2 of the press release appears the following:
Mr. Eramert's statement continued, "We are keenly aware of the impact our decision will have on the mill's employees, the Sydney community and the province of Nova Scotia and deeply regret that no other course is available within the corporation's abilities. Neither Dosco, nor Hawker Sid-
Closing of Nova Scotia Steel Plant
deley (Canada) Ltd., which owns 77 per cent of the corporation, can continue to obsorb losses of the magnitude now being incurred." Dosco has reported losses, before income tax adjustments, of $4.3 million in 1986 and $6.4 million in the first six months of 1967.
Does that mean, Mr. Speaker, as one might think on superficial consideration, that Dosco is losing all this money in steel-making at Sydney and on the crude steel from Sydney that is used at Contrecoeur? Does it mean that the whole Dosco enterprise is losing a considerable sum of money? Are we being told that the Dosco operation generally is inefficient, and that because of this general inefficiency the company is now unable to continue at what it may regard as its least profitable base, namely Sydney? These questions have to be answered because they bear directly upon what ought to be done by the province of Nova Scotia, and anyone who wishes to be associated with the province of Nova Scotia in this, in facing up to the social problem created by the Dosco announcement.
I think that if the representatives of Dosco and Hawker Siddeley (Canada) Ltd. are not prepared to come to a public meeting and explain frankly what they mean-to put the residual heirs, if I may use that word in this context, into the economic picture in regard to their Sydney operation-it would be quite within the rules of propriety for the assembly in Halifax to summon before it the representatives of the corporation to explain precisely what these statements that have been put out mean.
I agree entirely with the hon. member for Pictou (Mr. MacEwan). I think there will have to be a public examination of at least the basic facts. It may be necessary also to ask the company to give information privately that would be helpful to those who are going to take up the problem from which Dosco appears determined to flee.
That is one question, Mr. Speaker, and a second question concerns the continued operation of the plant. I think it would be ridiculous to suggest that this operation can be closed out in six or seven months. This is an utterly ludicrous proposal. I am sure that everyone who has any obligation in this matter will see to it that the communities concerned simply do not have to deal with the kind of dislocations that would inevitably be entailed within this short period of time. It is utterly unthinkable that almost the entire industrial base of a city of considerable size should be closed down almost as if it had been hit by enemy attack.
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Closing of Nova Scotia Steel Plant
I am not in a position, because I do not have the economic tacts, to say whether or not this plant ought to be continued in operation over many years, but I think it is appropriate for the layman to say that it is ridiculous to suggest that within half a year, and starting immediately, you can cut off the economic foundations of an entire community. The plant simply has to stay open; it is as plain and obvious, I think, as that.
Connected with the question whether or not the plant should stay open is a third question. I think that the speeches which have been made here this afternoon reveal that there is very little confidence among the members of this house, at least among those who have spoken, in Dosco. The arrangements for the future ownership and management of the plant are not a question that I think I ought to prejudge. That is largely a question to be answered by the members of the Nova Scotia assembly.
[DOT] (5:50 p.m.)
It is now clear that the financial assistance that may be necessary to keep the plant open ought not to be placed largely under the unguided control of Dosco. I do not want to prejudge the question of provincial nationalization of the company, but it well may be that the assembly can find that it has no real alternative. Nationalization would create great problems-let there be no doubt about that-particularly when one came to market the product, unless one could make an agreement with Dosco to use the Sydney production at its Contrecoeur flat rolling mills. Yet the problem of the Sydney community simply cannot be pushed aside because of the difficulties that would attend provincial nationalization.
The hon. member for Cape Breton North and Victoria referred to the matter of transportation. The report on Sydney steel-making makes one realize that in the view of those who wrote the report the costs of transportation are most important. I am not at all satisfied that we ought not to take a much closer look at this aspect of the problem to see if something can be done in this area to render more viable the operation at Sydney.
Another point that ought to be emphasized is the question of pushing ahead as rapidly as possible at the Strait of Canso. The Minister of Energy, Mines and Resources referred to this development as one of the new foundations for the society of modern Nova Scotia. I think he is correct. But you know, Mr. 
DEBATES	October 16, 1967
Speaker, there is a remarkable contrast between the way a private company can close down a business and the way government departments go about opening up an area. Private companies seem to snap their fingers, make their decisions and close plants within weeks. It seems to take months or years to get anything as attractive as the economic development of the Strait of Canso area well under way. There should be, I think, a good deal of co-operation between the government of Canada and the government of the province of Nova Scotia in the Strait area immediately, particularly if it is clear that in the long run the steel-making operation cannot be continued.
I wish to put one final point before the house, Mr. Speaker. When I spoke in the house on October 3, 1967, about the housing question I said that there comes a point at which the savings made by concentrating industry are outbalanced by the costs of concentration. That point, I think, ought to be borne in mind by governments as they look at the questions posed by the Dosco announcement concerning steel-making at its Sydney plant. It is easy to say, "All right, Dosco has made its decision. It has decided that for it this is not the most profitable way to invest its resources. That is the economic decision and that is the decision that should prevail." But, I ask you, sir, how many indirect subsidies will go to steel-making elsewhere, whether at the managerial or employee level? In the long run, what is the most economical approach for the Canadian taxpayer? Which bill will be bigger for the Canadian taxpayer? Meeting the costs of making life tolerable in great metropolitan conglomerations or making it possible for steel-making to continue in Sydney, thereby making possible the continuation of that city?
I do not think the answer to that question is obvious at all. Those who rely simply on allegedly economic arguments when dealing with such questions often deceive themselves and thereby penalize the Canadian taxpayer.


Mr. MacLean (Queens):: Hear, hear.


John B. Stewart: In other words, I suggest that we in this house ought not to prejudge the question of the long-term operation of the Sydney plant. Neither ought we to prejudge the question of the organization of management and ownership, because those questions legitmately belong elsewhere. I am saying to this house that we must be prepared as a national body to make available to the province all the assistance that we properly can,
Ociober 16, 1967

and in doing so we must not be guided by the specious notion that simply because a company decides it can invest its resources elsewhere more profitably, it is not wise, in the national interest, to make possible the continuation of an operation where over the years that operation has maintained a satisfactory society for those who have lived in it.


Mr. Knowles:: May I call it six o'clock?


Mr. Speaker:: It being six o'clock, is it the wish of the house to suspend private members' hour?


Some hon. Members:: Agreed.


PROCEEDINGS ON ADJOURNMENT MOTION
Mr. Speaker:: On the understanding that this evening there may be adjournment proceedings, depending on whether the motion before the house carries or is withdrawn, the following questions will be considered at ten o'clock: the hon. member for Sherbrooke (Mr. Allard), Television-inquiry as to agreement between C.B.C. and Quebec government for educational broadcasts; the hon. member for Kootenay West (Mr. Herridge), Health and Welfare-resolution from British Columbia respecting tobacco advertising; the hon. member for New Westminster (Mr. Mather), Canadian confederation-suggested survey to ascertain Quebec opinion.
At six o'clock the house took recess.


[Stage Direction]
AFTER RECESS

The house resumed at 8 p.m.


[Stage Direction]
The house resumed discussion of the motion of Mr. Maclnnis (Cape Breton South).
Stanley Howard Knowles: Mr. Speaker, like other hon. members who have spoken today I welcome your decision to grant an adjournment debate on the important question placed before you in the motion presented by the hon. member for Cape Breton South (Mr. Maclnnis). As Your Honour indicated this afternoon, I too sent you a notice of motion on the same subject, so
Closing of Nova Scotia Steel Plant that had the hon. member for Cape Breton South not moved his, you would have had a motion before you in terms which I might be permitted to place on the record, namely, that there be an adjournment of the house under standing order 26-
-for the purpose of discussing a definite matter of urgent public importance, namely the recent announcement that the steel plant of the Dominion Steel and Coal Corporation at Sydney, Nova Scotia, is to be closed in 1968, and the need for an immediate statement by the government as to the steps it will take to make sure that this mortal blow to the people and the economy of Cape Breton Island does not take place.
I thought I would like to read that motion, not only to place on the record the terms in which we would have presented it, but to emphasize the fact that we feel, as I now sense all members of the house do, that this would be a mortal blow to the people of eastern Nova Scotia, if the basic steel industry were shut down on Cape Breton Island. We feel it is not only important that parliament be allowed to discuss this matter today, but even more important that the government take action, and take action soon.
I must say that I was quite disappointed in the approach to this problem taken this afternoon by the Minister of Energy, Mines and Resources (Mr. Pepin), but before I comment on what he said today I should like to draw attention to something else that I think calls for an explanation. He told us or shall I say he confirmed in the house this afternoon what we read in the press over the week end, namely that the Hawker Siddeley people met with certain members of the government, including himself, last Thursday to inform them of the intended action of Dosco at Sydney. It was made quite clear this afternoon that the Minister of Energy, Mines and Resources knew on Thursday last that the steel mill at Sydney was to be closed in April, 1968. Yet on Friday last, as recorded in Hansard at page 3064, the hon. member for Cape Breton South put this question to the Minister of Energy, Mines and Resources:
Could the minister indicate when he expects that the board of the Cape Breton Development Corporation will be appointed, and when they will begin their work?
Let me now read the answer and the rest of the exchange.


Jean-Luc Pepin: Some time next week, Mr. Speaker.


Malcolm MacInnis: A supplementary question, Mr. Speaker. Is the minister aware of any conditions that may be developing which will worsen the task of this board?
Oclober 16, 1967

Closing of Nova Scotia Steel Plant


Jean-Luc Pepin: I am sorry, Mr. Speaker; I did not get the question.


Malcolm MacInnis: Is the minister aware of any conditions that are developing which may worsen the task with which this board is faced?


Jean-Luc Pepin: No, Mr. Speaker.


Mr. Bell (Carlelon):: Shame.


Stanley Howard Knowles: I find it hard to understand that the Minister of Energy, Mines and Resources could know on Thursday that the Dosco steel mill was to be closed in April next, yet on Friday could say to this house that he knew of nothing that was going to worsen the problem faced by the Cape Breton Development Corporation. I suggest to you, Mr. Speaker, that he knew not only something had taken place which would worsen the problem but he knew of something which would make it practically impossible for the corporation to function at all, under the terms of the legislation given to it by the parliament of Canada.
However, Mr. Speaker, the main response of the minister this afternoon, apart from his interesting account of things that have been done in recent years in the Cape Breton area, was to write off quickly the only positive suggestion made, namely the suggestion of my colleague from Winnipeg North (Mr. Orlikow) which was a repetition of the proposal we made last June and earlier, that the entire Dosco operation should be nationalized. The minister was ready with a quick answer. He said that the hon. member for Winnipeg North was ready with an answer-instant nationalization; and the minister's comment was supposed to get rid of the hon. member's suggestion.
I suggest, Mr. Speaker, that the saddest thing that took place this afternoon was the way in which the minister made an instant rejection of the only positive suggestion that has been made for coping with this problem. He stood in his place and told us that there are certain difficulties in connection with nationalization. Of course there are. The difficulties he recited, however, were mainly with regard to the question concerning what would happen if the government were to nationalize part of an industry; that is, where would it stand with regard to the other part of that industry or with regard to other industries in Canada?
[DOT] (8:10 p.m.)
Does the minister not know that in Canada today we own publicly the Canadian National Railways but that we do not own all

the railways in Canada? Does he not know that we own publicly Air Canada but that we do not have a complete monopoly over the air industry in this country? Does he not know that we the people of Canada own the Canadian Broadcasting Corporation but that we do not own C.T.V.? Does he not know that we own publicly the Polymer Corporation but that that has not put the other rubber companies out of business? Does he not know that we the people of Canada own the government printing bureau which turns out some of the finest printing done in North America but that this has not put the other printing companies in Canada out of business? Does he not know that the telephone industry in this country is partly publicly and partly privately owned?
I suggest it was sheer nonsense for the minister to negate the suggestion that we could nationalize part of an industry. The government of Canada and the governments of the various provinces are engaged in all kinds of businesses and services. Surely the minister, from his academic experience if from no other, knows that around the world where developing countries are trying to cope with their problems, particularly in areas where things are difficult economically, public ownership, nationalization and socialization are the answers people have to resort to. I believe that rather than cavalierly dismiss the suggestion from this corner as being instant nationalization and something which could not be considered, the government ought to take it into consideration.
I thought the hon. member for Antigo-nish-Guysborough (Mr. Stewart) was a little embarrassed by the quick and ready way in which his ministerial colleague dismissed nationalization. Therefore he filled in a bit by suggesting that maybe provincial nationalization might be considered. Does he not realize, when we are talking about nationalization at this point, that the Cape Breton Development Corporation has been set up and that it is a federally incorporated crown company which already has been given power by parliament to nationalize and take over the coal operation? Does it not seem the part of logic and common sense that if we are to have nationalization in the same area, in another operation of the same company, that it would be far better for it to be nationalization at the federal rather than at the provincial level? However, I do not wish to be too hard on my friend from Antigonish-Guysborough, because he at least made up for the way in which the
October 16, 1967

Minister of Energy, Mines and Resources dismissed the whole question of nationalization.
Does the hon. member wish to ask a question?


John B. Stewart: Mr. Speaker, I should like to ask the hon. member a double barrelled question. First, in view of the illustrations he gave, does he not recognize that there is a difference between nationalization of an industry such as steel making, producing for the general market, and the nationalization of a utility which, by definition, has a fixed clientele? Second, I should like to ask him whether he wishes us to consider steel making in the island of Cape Breton on a par with the peculiar situation in respect of coal mining in that island, which of course, had to be assisted in respect of transportation and which in the past was a part of a great national industry, but is now the remnant of a great national industry, a condition which does not exist in respect of steel making?


Stanley Howard Knowles: Mr. Speaker, I welcome the two questions. The hon. member seems to think that public ownership thus far is only in the field of utilities and never in the field of services or materials. I suggest that the Polymer Corporation which is in the business of producing rubber, Atomic Energy of Canada Limited and the printing bureau are providing not just services but actual goods. I suggest there are many examples of public ownership in fields other than so-called utilities such as light, power and so on. As a matter of fact I think it is a pretxy thin line to draw, so far as the railways are concerned, as to whether this is purely a utility or a service.
The other question the hon. member asked me is one I particularly welcome. He wishes to know whether I should not distinguish between the coal operation and the steel operation in Cape Breton Island. The main point I wish to make, and the main point we in this group have been trying to make for a long period, is that one must look at the problem in Cape Breton Island in its entirety. To put it in the simplest and most understandable terms, I think there should be a T.V.A. type project instituted in Cape Breton Island. We think it is tragic and indeed a crime that there are still in Canada as many depressed areas as there are. I believe it would be a crime if we were to sit idly by and let another such area develop in Cape Breton Island. If the government were to step in with a T.V.A. type plan, the whole of Cape Breton Island could be made a model community. We
Closing of Nova Scotia Steel Plant think the government should try to do a full dress job in Cape Breton Island.


John B. Stewart: Does the hon. gentleman include my constituency and the constituencies west of mine in this Tennessee valley type of arrangement? Will all Nova Scotia be nationalized? Where will the line be drawn?


An hon. Member:: It is all integrated.


Stanley Howard Knowles: Closing of Nova Scotia Steel Plant Dosco not being concerned about its steel workers, and that in any case it was a long range problem. He made it very clear that as far as he was concerned, under the interpretation of the present legislation for the Cape Breton Development Corporation, the government did not have wide enough authority to cope with all the problems of the steel workers.
It was precisely because this was made clear to us, and that this legislation was then concerned about coal but apparently not about steel, that we in this party made the speeches we made at that time and moved an amendment to enlarge that bill. Some very significant if not prophetic words were uttered by the leader of this party, the hon. member for Burnaby-Coquitlam (Mr. Douglas), on June 15 as recorded at page 1582 of Hansard. Let me quote some of his words:
The minister said a few moments ago that to include the steel industry in this development corporation would not gain widespread support. I do not know on what the minister bases that statement. If there is one thing the government ought to learn, it is that the art of governing is the art of foreseeing. It is not a matter of waiting until the government is pressed into doing something. It is a matter of the government seeing the signs that are all about it that the steel industry in Cape Breton island is in trouble. The government should not wait until the steel mill is closed, but should do something about it now.
That was our plea in June, a plea we made not only in speeches by the hon. member for Burnaby-Coquitlam and the hon. member for York South (Mr. Lewis), but one that we put to the house in the form of an amendment moved by the hon. member for York South to clause 23 in an endeavour to get the rights of the corporation enlarged so it could go into the other industry rather than just coal, namely steel.
When that amendment was moved on June 27, as recorded at page 2308 of Hansard, the Minister of National Health and Welfare immediately rose on a point of order. I have reread his statement on the point of order and there is no doubt that it was a point of order speech. However it also reflected his belief that this was the kind of thing that should not be done, that steel should not at this point be brought under the aegis of the Cape Breton Development Corporation.
After a procedural debate which took up five or six pages in Hansard the chairman of the committee of the whole rules that the amendment was in order and a vote was taken. This was one of those votes that do not require ringing of the bells, so only those

members present voted. The motion was defeated 61 to 27, and if I recall corretly, some of those who voted with us for public ownership in this field were the members from Cape Breton to my right. However, as the hon. member for Cape Breton North and Victoria (Mr. Muir) said today, even private enterprisers believe there comes a time when public ownership is desirable.
It can be said, and I know it will be said, that in the house today on this issue all of us have reflected our points of view. The hon. member for Villeneuve (Mr. Caouette) spoke mainly about what the Bank of Canada might do. The hon. member for Okanagan-Revelstoke (Mr. Johnston) put in his pitch that this debate should not be used to pillory private enterprise. We are arguing for public ownership and members on the government side are arguing against it.


An hon. Member:: They are arguing against doing anything.


Stanley Howard Knowles: Some are arguing against doing anything and this happens, but we do reflect our points of view and that is why we are here in party groups. However, on this particular issue it has become clear that unless we do go in for an extensive practice of public ownership or national ownership for Cape Breton Island, the island is going to become not the place of natural beauty it has been but a depressed area so far as the people who live there are concerned.
I was also concerned and disappointed with the statement made today by the Minister of Manpower and Immigration (Mr. Marchand). He started out fine, and I thought our friend had turned into a trade unionist again, when he referred to social responsibility on the part of big corporations, and when he told us how immoral it was for big corporations not to take into consideration the rights of those people who work for them. That part of his speech was excellent and deserved the applause it received. But I could not help wondering what the government of which he is a member has done about the Freedman report which deals with this matter. The government has had that report for some time.
After the minister had completed this nice little lecture, with which we all agreed, he had a little salve for certain wounds, and was happy to announce that his department would do its best to come forward with alternative arrangements for those who would be put out of work. The hon. member for Cape Breton North and Victoria then asked whether there was to be a revival of the recommendation of
October 16, 1967	COMMONS
the Gordon report that these people be assisted to move out of Nova Scotia. The hon. member for Antigonish-Guysborough (Mr. Stewart) again attempted to correct the mistake of his minister by saying that he felt there were arguments for doing something else than concentrating people in a few big cities. There is a great deal being said these days about national unity. I do not intend to move into a discussion of the aspect of that problem which is uppermost in our minds these days, but surely one of the things we must accomplish if we are really going to have national unity is equal economic conditions and equal economic opportunities across this country. It is not good enough to give short notice to the workers of Air Canada at Winnipeg that they are going to be out of jobs, and not good enough to give even shorter notice to this larger number of workers in Cape Breton that their jobs are disappearing, and that they will have no opportunity to maintain any kind of decent life in that beautiful Cape Breton Island.
Let me say again that we are all obliged to you, Mr. Speaker, for your decision to permit a discussion of this matter today on the motion moved by the hon. member for Cape Breton South (Mr. Maclnnis). As one with ancestral roots in Nova Scotia I know something of the untoward economic conditions of that province and what they have done to people in the past. I do not think these things should be repeated. Indeed, we should go further than just stemming the tide of difficulties there. We should seize this opportunity to make the social and economic life of Cape Breton Island that of a model community. This could be done if we just stop worrying about cliches and doctrinaire positions. I hope the seriousness of this crisis will challenge the government of this country to deal with it as it ought to be dealt with, for the sake of the people of Cape Breton Island and for the sake of the good name of Canada.


Mr. J. M. Forrestall (Halifax):: Mr. Speaker, let me join with previous speakers during the discussion this afternoon and evening in expressing appreciation to yourself and to hon. members on the benches opposite for allowing the opportunity to discuss at least among ourselves the very serious situation which has now developed in Cape Breton and indeed in the province of Nova Scotia. This is not a problem that finds its beginning and end in the city of Sydney and its immediate environs and neighbouring areas. This difficulty is shared by those on the mainland, in the
DEBATES	3147
Closing of Nova Scotia Steel Plant Trenton industrial complex, and those in the heart of the province right down to an area of which I happen to be one of the representatives, the port of Halifax.
[DOT] (8:30 p.m.)
Many observations made this afternoon are very pertinent. I hope that many of the suggestions will be helpful to the minister from Nova Scotia in his discussions next week with representatives of community and industry in their searching, through discussion, to arrive at a resolution of this problem. It is indeed a very serious problem. I believe we all realize this, and that a solution must soon be found. We have had today an opportunity to consider the seriousness of the problem. We have had an opportunity to consider some of the suggestions that have been made. It has been suggested that nationalization is a solution to the problem. The question is, federally or provincially, who can afford to do this?
In the final analysis, having made the decision in this respect, will it guarantee economic feasibility? The industry must find markets for its products. I believe this is a very pertinent question to which the Minister of National Health and Welfare (Mr. MacEachen) and his colleagues must address themselves next week. Hawker Siddeley, in the field of primary production and manufacturing, is the 31st largest corporate entity in the world, outside the United States of America. The sales of this company were last year in excess of $1 billion. These sales were directly attributable to production. We are not dealing with a small, corporate entity. This is one of the largest companies operating in Europe today. If it is to maintain its growth and development, it must continue to be very ruthless. We are not dealing with a company that is flush with funds and can easily raise new capital. Indeed, we must bear in mind the words of Sir Roy Dobson in this context, that as far as the interests of this corporation in Canada are concerned, the company has to be self capitalizing.
It does not take too much depth of knowledge to look at the financial situation of such companies in Canada and their position and be at once a little alarmed. I suggest to the minister from Nova Scotia that his duties are now indeed very serious. This minister now has an opportunity, as he has not had for many years, to show that the present government is capable of responsible leadership. The government can show this leadership in the manner in which they approach the problem.
October 16, 1967

Closing of Nova Scotia Steel Plant They can show leadership by the degree to which they keep in the forefront of their minds the very serious situation which would exist in Trenton and the city of Halifax if Dosco continues to find it too difficult to operate in Sydney.
Myself, the citizens of Nova Scotia, the premier of that province, and Dr. MacKeough, who is the chairman of the special committee studying this subject, would be very pleased if the government would clarify the many questions which are in the minds of all people in the Atlantic community. These questions resolve themselves into whether or not there is a viable market for the production of the plant. If necessary, government at one level or another should take steps to see that the industry continues. This can only be done if it is shown that there is a market for the production of this plant.
[DOT] (8:40 p.m.)
If this cannot be done, heaven only knows what the answer is. I do not pretend to know. But I do know that if this attitude, which already has been called deplorable-and indeed is-is allowed to continue and go outside the present context so as to embrace the Trenton plant, the Halifax shipyards and the Dartmouth marine slip, it will be a blow to Halifax from which I doubt it will be able to recover in the immediate future.
The port of Halifax is handicapped by an indecisive attitude on the part of this government, which has a fear of or inability to define its policy. This is perhaps the best opportunity of hon. members from Nova Scotia to show concern for the problem and leadership in its solution. Halifax has seen a very serious decline of port activity. We have suffered the very recent deleterious impact of the so-called l.c.l. freight rates. These are just two of the serious problems that affect my area.
These problems are related to the decision of Hawker Siddeley to cease its operations in six months time. The over-all impact of this decision has already been placed clearly on the record. Hon. members have referred to the number of people who will be directly or indirectly adversely involved. People are people. They are human beings entitled to some respect for their human dignity and individuality. The Minister of Manpower and Immigration (Mr. Marchand) this afternoon spoke in glowing terms of a concern for a situation which appears to be developing in Canada. It is the tendency of large corporate
(Mr. Forrestall.l
entities in this country to make decisions such as this. The minister referred to the Bell Island situation and what is taking place in regard to manpower.
Nobody of course disagrees with what the minister said. He did seem to show a little more concern than has been evidenced by the actions of Dosco or its parent company Hawker Siddeley. This is fine. However, it pays only lip service to a situation we would all like to see exist but which in fact does not exist. The fact is that a different situation exists.
I would caution the minister during his deliberations and talks in the next few days that he should not approach the resolution of the problem at the expense of any other viable economic activity in the Atlantic provinces, but that he should find an answer which works for the betterment of all Nova Scotians, and not simply the resolution of the problem that is facing the people on Cape Breton right now. I am sure the minister will do this, and so will those who will be his colleagues in the resolution of the problem and on whose shoulders a very basic responsibility lies, namely the officials in the provincial government of Nova Scotia. I am sure that together they will find an answer to this problem.
I wish now to go back very briefly to the events of the last week end. At a meeting of mayors and other civic leaders in the Atlantic area held in Moncton at the invitation of Mayor Jones it was said that the whole matter of economic activity in the Atlantic provinces is in serious need of responsible leadership. We have had shotgun approaches to all of our problems in the last five or six years. There has been a great lack of intelligent and meaningful study of what our problems are and how they can be overcome.
The recommendations of the second, third and indeed what appears to be the fourth annual report . of the Economic Council of Canada continue to be largely ignored,-so much so in fact that the mayors of our various cities directly involved in the economy of the Atlantic area, in a communique issued over the week end, have seen fit to criticize severely the present government for its lack of effective action in areas such as transportation, port development, and the inter and in-tra regional movement of freight. Perhaps it goes without saying that we in Ottawa must come to some early conclusion-as to just what it is that we intend to do about regional disparity.
October 16, 1967

We have gone on for many years hoping that time will resolve the problems of the Atlantic area, but there has been no evidence in the last two or three years that we are any closer to even describing the types of problems that are facing us. We are just now seeing the manifestations of one of the great ones in the decision taken by Dosco to close its operation. We must very shortly move to much more meaningful long term answers. If we do not, then I am afraid that the next 100 years will be no better for the Atlantic provinces than the first 100 years.
If the governement opposite has any doubts as to the seriousness of this, I would ask them simply to read tomorrow the words of the hon. members for Cape Breton South (Mr. Maclnnis) and Cape Breton North and Victoria (Mr. Muir). What they and other speakers had to say today with regard to the economic and social situation which will be brought about if this plant is not sustained are thoughts that came straight from their hearts, and that were born out of an experience and an awareness of the role which the steel community has played in Sydney. On my part they are voiced because I am aware of the role which Dosco plays in the port of Halifax. I am aware of the fact that if Dosco can so easily withdraw from Sydney it could very easily withdraw from the port of Halifax the only major ship repair facility that we have.
The other indicators of lack of government planning were dealt with very extensively last spring. These involve the attitudes of the government with regard to defence spending. In one sense the attitude of Hawker Siddeley and Dosco toward Sydney is no different from the attitude that is creeping in with regard to our armed forces and our national defence posture. I am not saying whether or not the government is right in its national defence posture. What I am saying is that this need-to-know philosophy, this built-in fear of telling people what must be done, must come to an end. People cannot operate in a vacuum. Industry cannot plan and the supporting services cannot orient themselves if they do not know what is to happen. The best agency to tell them is the government, and it must accept this responsibility. I do not charge the government with anything in particular right now because I think the news has been to them as much of a surprise as it has to everyone else. But I do say to them that if they are to be charged with anything they should be charged with not having known that this was to take place. There were many

Closing of Nova Scotia Steel Plant indicators. The government has been questioned in this house for the last 18 months by the Cape Breton members, but when the news came it came as a great shock. I think the government was remiss in that respect.
So as not to take up any more time of the house, Mr. Speaker, let me close by making one observation, namely that if closure of the mine does in fact take place, it must largely be the consequence of the federal economic, tariff, transportation, and freight rate policies, and other activities.
I suspect that right now there is very little that the province of Nova Scotia can do to overcome the economic problem that has been created, except to provide leadership. I do not know what role it can play in terms of dollars and cents but I do know it will have to be limited. Unless the matter is properly resolved, perhaps in the final analysis we must ask the following question, as did the Chronicle-Herald of today's date in the lead editorial:
The question that Nova Scotians must ask themselves, and the federal government also, is, are we Canadians deserving of the same treatment as other regions of this great and wealthy country?
I suggest that the onus of answering that question to the satisfaction not only of the people in Sydney but of the entire Atlantic community lies largely in the hands of the committee of the cabinet which has been established to look into this problem, in the degree to which it will co-operate with the corresponding group set up by Hon. G. I. Smith in the government of Nova Scotia, and the degree to which it co-operates with the communities in Cape Breton which are directly involved, and with the company itself.
[DOT] (8:50 p.m.)
An answer must be found, Mr. Speaker. I feel it would be safe to say that the majority of Nova Scotians have been saying some silent prayers the last few nights. I will say one or two for them, too, in the hope that an answer can be found to this dilemma that is facing us now.


Mr. H. A. Olson (Medicine Hai):: At the
outset, Mr. Speaker, I should like to commend you for the decision you made earlier today allowing the motion to adjourn the house-


Mr. Speaker:: Order. May I bring to the attention of the house the fact that it is not in order for hon. members to commend the Speaker for a decision.
October 16, 1967

Closing of Nova Scotia Steel Plant


Mr, Olson:: Then, perhaps I may be permitted to say that I think the kind of situation that arose last week end is the kind of situation that ought to be debated in this house under standing order 26. I want to say that this debate so far has assumed an air of unreality, because while hon. members in all parties have expressed deep concern about this serious problem in Cape Breton, thus far I have been unable to detect any suggested solution whatever, except from the members of the New Democratic party who always have the instant solution: nationalize. You just take over the industry and let the government run it.


Mr. Douglas:: That is what you did with coal.


Horace Andrew (Bud) Olson: I wonder if hon. members opposite are prepared now to withdraw the amendments they moved to the budget debate. For example, the Conservatives moved an amendment criticizing the government for its refusal to reduce taxation and for recklessly increasing expenditures. Then the N.D.P. moved a subamendment aimed at reducing income taxes. Now they come along with a suggestion to increase expenditures, and that is the only solution that has been advanced for dealing with this serious matter.
Now, Mr. Speaker, I suggest to you that the only constructive suggestions that have been made so far were made by the Minister of Manpower and Immigration (Mr. Marchand) and the Minister of Energy, Mines and Resources (Mr. Pepin). They stated very clearly that the government is prepared to co-operate with the government of Nova Scotia in the same manner as the federal government has co-operated with provincial governments whenever a disaster has arisen. This course has been suggested and I am sure it will be followed. In spite of all the time that has been spent on this debate today, not one positive, constructive suggestion has come from the opposition to resolve this problem, except to nationalize this industry.
I do not want to speak too long, but I think the members of the government have already indicated a deep concern with this problem. First of all, they have been concerned about the manner in which the situation arose. There was a sudden announcement by the company that they were going to withdraw from this operation on Cape Breton Island. There has been concern, too, about the result of that decision. Certainly, Mr. Speaker, so far as I am concerned this situation falls into

the category of a disaster for that part of Canada.
Perhaps it is too early to find a completely satisfactory solution to the problem, but I certainly hope hon. members opposite will at least attempt to suggest some solution rather than simply wave their arms and say it is a terrible thing, and that the government needs to do something.


Robert Muir: Your halo is blinding you.


Horace Andrew (Bud) Olson: The hon. gentleman has already told us the members of the government have said they are ready to listen to any proposal put forward. This is the normal way of dealing with a situation.


Howard Russell MacEwan: Say something or sit down. You have not said anything yet.


Mr. Speaker:: Order, please.


Horace Andrew (Bud) Olson: I suppose hon. members opposite are smarting a little bit because there was absolutely nothing in their speeches to suggest a solution. I suppose it will be a little difficult for them to justify this fact to their constituents in eastern Canada, when these speeches are examined.


Howard Russell MacEwan: Wait until the next election and you try to justify your position.


Horace Andrew (Bud) Olson: I cannot hear all these interjections, but I hope the government will bear in mind that this instant solution suggested by the N.D.P., to nationalize-


Robert Muir: You have better men than this over there.


Mr. Speaker:: Order, please. The hon. member has the floor and he should be given an opportunity to make a speech.


An hon. Member:: That is all he has.


Horace Andrew (Bud) Olson: Thank you, sir. I simply want to say that I hope the government of Canada will look very carefully at this type of instant solution that has been proposed by the N.D.P. This type of solution has not been satisfactory over the long term in the past.


Mr. Winch:: Let us hear your percolated solution, then.


Horace Andrew (Bud) Olson: We have seen the results, for example, of the C.C.F. action in Saskatchewan over the years. I believe it is quite clear the buoyancy of the economy in that province really only started to show up after there was
October 16, 1967

a change of government and a change in some of these policies. In addition to that we have the experience of the United Kingdom with this kind of action in respect of the steel industry, and a whole lot of other industries. The results are clear for everyone to see. There has not been a long term, satisfactory solution to this kind of problem.


Thomas Clement (Tommy) Douglas: May I ask the hon. member a question?


Thomas Miller Bell: You will get a silly answer, anyhow.


Thomas Clement (Tommy) Douglas: May I ask the hon. member if he is suggesting the Cape Breton Development Corporation, which the government asked this parliament to set up to nationalize the coal mines of Cape Breton, is going to be a complete failure and he opposes it?


Horace Andrew (Bud) Olson: No, Mr. Speaker, I was just about to come to that point. There is a very significant difference between the effect of that legislation and the situation with which we are faced as a result of Dosco's decision over the week end. A significant difference is that the steel industry on Cape Breton Island is only one segment of the whole steel producing industry in Canada; that is one thing. The second thing that is involved here is the fact the coal industry on Cape Breton is an industry that has been heavily subsidized by the federal government over a long period of time. What is more, the expenditure that is going into the corporation to take over the operations of the coal industry in that area is designed to do more than simply nationalize it. There are certain conditions laid down about renovating all the equipment in the mines, and federal money is to be used during the transitional period to re-establish and maintain that portion of it that can be economically viable, and to phase out gradually that portion of it that will not be economically viable.
This, Mr. Speaker, is a far different thing from simply saying the federal government should rush in and nationalize this particular steel plant, or to suggest that is a long term solution to the problem we are facing. In closing, Mr. Speaker, I simply want to say that I think all Canadians would be prepared to support some kind of program of assistance to solve the problem, even over a reasonably long period of time. That is a far different kind of program from simply rushing in and nationalizing the company.
Closing of Nova Scotia Steel Plant
[DOT] (9:00 p.m.)
There are only a few minutes left in this debate, Mr. Speaker, so I hope that the members fo the opposition will come up with something constructive,-because thus far we have not heard anything that could be construed as a solution to the problem.


Hon. George Hees (Northumberland):: Mr. Speaker, I rise to take part in this debate but for a very short period of time because several members on this side of the house have important things to say in relation to this most important situation. Therefore I want to give them the chance to speak, and I know they will speak very ably, as have hon. members who have already spoken, not only on this side of the house but on all sides.
I wish to state to the house that all members of this party support 100 per cent the points of view that were put forward so well this afternoon by the hon. members for Cape Breton South (Mr. Maclnnis), Cape Breton North and Victoria (Mr. Muir), Pictou (Mr. MacEwan) and others who have spoken. We are solidly behind them and regard the situation as extremely important and serious.
One thing which I think came out very clearly this afternoon from the evidence that has been put forward by the members who spoke on this side, is that any company which is the main employer of labour in a given area has a very direct responsibility to that area and to the people who live and work there. A company which does have this responsibility simply cannot act in the cavalier fashion that this company has acted in giving the kind of notice it has given and in refusing to discuss this situation with representatives of the government and labour organizations who wish to talk the matter over with them. Obviously this is a company that does not care one hoot for the welfare of the people in this area.
The Hawker Siddeley group that controls the Dosco operation has acted in this way as though they were a company in Britain operating 100 years ago and dealing with a situation in the colonies. This, I remind the chairman of the corporation and his board of directors, is 1967, not 1867. I say to them that if he and his directors are chafing under a Labour government in England today, to a large extent it is because they have displayed similar attitudes in their own country to that which they have displayed in this particular instance.
Obviously, Mr. Speaker, we in this parliament cannot allow this company to close down its operation. We simply cannot allow
Ociober 18, 1967

this, nothing particularly unusual. This is just plain, ordinary business technique, the sort that European countries use to a large degree in helping their corporations obtain business. The government can extend that sort of help to keep this plant in operation. The employers down there can continue to employ the people of Cape Breton. That is the least that we in parliament can do for those who live down there; that is the least we can do for the entire industry and that is what the government must do without delay. I commend this course of action to them.


Charles Mills (Bud) Drury: May I ask the hon. member a question? Is he not aware that Export Credits Insurance Corporation in the past few years has been pursuing just that policy of extending long range credits?


George Harris Hees: Yes, of course, I am aware of that. We started it. The government found that what we started worked so well that they continued it. One must give this government credit for some things; they realize that a great many of our techniques, when we were in government, were successful, and they adopted them. I say that anything that has succeeded should be continued.
I say to the minister in all honesty, and not for political reasons-


Some hon. Members:: Oh, oh.


George Harris Hees: I say this because, unlike the
Liberal party which is laughing and cheering on the government side, when I make a positive suggestion, I mean what I say. The hon. member for Medicine Hat (Mr. Olson) said that we had no positive suggestion; well, I have made one. I have said that by getting them business, the Dosco plant will be helped to stay in operation; that will enable the people of Cape Breton to continue being employed.
I say to this government, get off your seats, get operating, and let us see some action.


Mr. Lloyd R. Crouse (Queens-Lunenburg):: It is not my intention to speak at great length
on the motion presently before the house; but, speaking as a Nova Scotian and a Canadian, I wish to endorse the remarks of my colleagues with regard to the serious economic stituation faced by many Nova Scotians as a result of the announcement by the management of Dosco that they will cease production on April 30, 1968. This announcement shocked and numbed all Nova Scotians; its effect has spread like an earthquake across the industrial part of Canada. This in
Closing of Nova Scotia Steel Plant fact is not a provincial problem; it is a national problem.
For more than 60 years coal and steel have been the twin economic backbones of industrial Cape Breton, an area peopled by hardy descendants and settlers from Ireland and Scotland. The steel mill was built in the year 1900. If Dosco succeeds in abandoning the mill, which is the smallest of our four basic steel plants and if the coal mines are closed on schedule, the entire way of life in Cape Breton, in our province-in fact, throughout Canada-will be drastically altered within the next 18 months.
Ever since the closing announcement, interested Canadians have all been asking the same question: What will happen to the more than 2,600 steel men who will be thrown out of work next April? Unemployment is already quite high in this part of Nova Scotia; only a year ago approximately 3,700 men were employed when two blast furnaces were in operation. Now only one is in operation. With the phasing out of the coal mining operation a feeling of gloom pervades the entire area. The steel men I have mentioned are directly affected; yet, literally thousands of others will be indirectly affected when and if Dosco should carry out its plan.
The manner of the announcement caused consternation to government leaders at federal and provincial levels. According to reports, Premier G.I. Smith of Nova Scotia has said that Dosco lacked a sense of corporate responsibility to its employees and the community; the Minister of National Health and Welfare (Mr. MacEachen) is reported to be deeply shocked, as well he might be.
The question arises: Can we as a nation afford to let an industry of such great importance to Nova Scotia and Canada die of economic strangulation? I do not believe we can. I believe it is the responsibility of the federal and provincial authorities to put their heads together in the hope of finding a solution to the problem.
I should like to know what has happened to the Hawker Siddeley management within the past month; is that industry drastically affected by changes in the Kennedy round talks at Geneva? Have they been reading the Financial Post of October 7 which shows how the inflation virus spreads. Sixteen causes are listed and I think I ought to read some of them into the record. Here is one:
The persistent rise in living costs has left the Canadian dollar of 1925 worth barely 50c today. The current erosion in Canada and the U.S. is the fastest since Korea.
October 16, 1967

Closing of Nova Scotia Steel Plant
Here is another:
Sales taxes have inflated the cost of building materials and construction wage rates are up sharply. But reflecting urban population pressures, the fastest rise is in land prices.
Here is yet another:
The heaviest pressure now on consumer prices comes from services-largely because labor costs are rising and services depend on substantial quantities of labor.
And here is another
But manufacturing wage rates in both Canada and the U.S. are now rising more rapidly than a few years ago. And the advance in Canada is currently twice as fast as it is in the U.S.
Here is another:
Higher wage rates are putting large new pressures on industry selling prices because they are coming at a point when productivity gains are considerably smaller than they were.
And here is another:
With more industries hiking prices, the main index of wholesale prices is rising. The specially steep climb in Canada suggests a less competitive position for Canadian-made goods.
Is this the reason for the company's action? Here is yet another:
Canada's money supply is being expanded at a rapid clip to help finance heavy government borrowing and to prod the economy into creating new jobs for a fast-growing work force.
I say to the government that it is high time they stopped thinking of ways of spending money without getting any return; it is high time they thought of getting some value for the money we have. That is what we need, some purchasing power in our dollar, instead of the excessive spending that everybody is worried about and the extravagance and waste indulged in by this government.
Finally I shall read this from the same copy of the Financial Post:
The impact of fast-escalating spending by all governments in Canada is inflating demand for money, goods, services and will continue to do so until spending programs are cut back.
Did the management read these items? Is what I have read that which influenced them to reach their decision? Did they realize that their future under this administration is not as good as it might be? I should like to know what happened.
Their action in announcing the closing of the steel mill is a complete reversal of the statement made earlier in co-operation with the Nova Scotia Voluntary Economic Planning Board and the Atlantic Development Board. At that time they were in complete agreement with the release of a report which

stated that the future of the Sydney mills as a supplier of ingots and rails was assured, under existing conditions.
I must submit that the report does not paint a rosy future for the Cape Breton steel men; nevertheless, it should be of considerable assistance to the Cape Breton Development Corporation in determining the priorities for the economic development of the Cape Breton area.
In a speech this afternoon the hon. member for Antigonish-Guysborough (Mr. Stewart) put on record some of the conclusions of the voluntary planning board of the province of Nova Scotia. At the risk of repeating what he said I wish to read some of the conclusions of that body. They are as follows:
Sydney does not possess actual or potential production cost advantages in relation to other actual or potential competitive sites in Canada or abroad.
Successful steelmaking throughout the world today depends upon a mill having a local or natural market area of sufficient size to absorb fixed costs, i.e., that portion of costs which does not vary with production volume.
o (9:20 p.m.)
Sydney's natural market is the Atlantic region, and the region's steel consumption is much too small to absorb Sydney's fixed costs. About 85 per cent of Sydney's production must be sold in areas beyond the Atlantic region. The attendant freight costs place Sydney in a position of disadvantage vis-a-vis other factors.
Import competition is severe in most product lines in the eastern part of Canada where Dosco seeks its major sales volume.
In finished rolled-steel products (excluding rails) Sydney is in the position of a residual supplier to Canadian customers beyond the Atlantic region.
In export markets, including the U.S. and Britain, Sydney is in competition with third country exporters rather than with the local producers.
World export prices are depressed to levels which generally do not cover the fixed and variable production costs of exporters.
Export sales in new product lines could be generated, but not in sufficient volume at prices adequate to justify the installation of new facilities at Sydney.
There is a statement that bears thorough study. Who knows what volume could be accomplished in the next year or two?
The future role of Sydney is expected to be primarily that of a supplier of ingots and billets to Quebec mills for rolling and as a manufacturer of rails.
The establishment of Dosco's rolling mills at
Contrecoeur provides Sydney with its best assurance of continued operation, and prospects for some expansion of primary-steel production.
The prospects for rapidly expanding steel demand in the Atlantic region to provide Sydney with a sounder economic base can be regarded with only limited optimism.
October 16, 1967

Because the present plans of Sidbec (the Quebec government-sponsored steel project) are unknown, the implications for Sydney of a Sidbec plant are entirely a matter of speculation. Some form of co-operation between Dosco and Sidbec cannot be ruled out, and might be beneficial to both companies and both provinces.
This is the report of the Nova Scotia Voluntary Economic Planning Board, and it is the report that was agreed to by Dosco. Is it any wonder that Dosco's announcement has virtually shocked everyone in Nova Scotia and throughout Canada?
Mr. Emmert, chairman and president of Dosco, said his decision to close the plant was forced because of non-competitive production costs at Sydney, together with shipping costs between the mill and major market areas in Canada. He said the company has become increasingly aware that its Sydney works has an abnormally high cost of production due to its age and attendant maintenance and manning costs. He also said steel capacity throughout the world has eroded prices in the already depressed market served by Dosco steel, and this factor in turn has prevented wage increases from being sufficiently recovered through increased production or selling prices.
Now, Mr. Speaker, Mr. Emmert is not alone in facing this problem of rising costs and heavy competition. The United States has a similar problem, and it is interesting to note the action that has been proposed in that country to support its steel industry. According to the Financial Times of Canada of October 16, today's date, the United States steel lobby has succeeded in convincing a large group of usually free trade minded senators to sponsor and support new legislation aimed at retaliating against foreign countries which discriminate against United States steel exports. The proposed bill would give the President of the United States 180 days in which to negotiate bilateral or multilateral international agreements under which other countries would voluntarily restrict their steel exports to the United States to levels no higher than their average share of the United States market during the 1964-66 period. In effect the bill would freeze total United States steel imports at about 9.5 per cent of total American steel consumption. The reason for this action is set out in the Financial Times as follows:
The United States steel industry contends that non-tariff discrimination is the basis for the domestic industry's inability to compete in foreign markets. A flat 6 per cent to 7 per cent duty is imposed on all steel imports into the United States. The duty is levied on the wholesale value of the
Closing of Nova Scotia Steel Plant steel at the point of shipment and is not levied on the freight and insurance costs, which can add as much as 13 per cent to the value of the landed steel.
By comparison, Belgium levies, over and above its normal duties, a tax ranging from 7 per cent to 19 per cent on the duty-paid value of imported steel. France imposes a 25 per cent sales tax and a 0.2 per cent custom stamp tax over and above normal duties. West Germany imposes a turnover equalization tax of 7.5 per cent to 9.5 per cent and Italy imposes a 4 per cent sales tax and a compensatory import tax of 4.8 per cent to 6.5 per cent.
Japan, 40 per cent of whose exports go to the United States, has a system of import licences and currency controls that virtually excludes United States steel from its markets.
The bill to be introduced this week is aimed at retaliating against countries that have imposed such barriers.
Here is an interesting point.
Canadian steel shipments to the United States last year totalled $104 million, or less than 10 per cent of total United States steel imports.'At the same time, United States steel exports to Canada totalled $196 million, or more than one third of total United States steel exports.
In other words, Mr. Speaker, we bought some $92 million more worth of steel from the United States than we were able to sell to that country.
In my opinion, this action that has been taken by Dosco will make Sydney a disaster area. Disaster conditions require drastic action. Nova Scotians were told when the St. Lawrence seaway was built that it would be helpful to their economy. We heard speakers from the Liberal party, now in power, who travelled through Atlantic Canada and made this claim. I am not being critical of them for making those statements at that time, but I ask the government to re-examine its proposals of that date.
In his brief speech a few moments ago the hon. member for Medicine .Hat (Mr. Olson) asked us for suggestions. I say to the government, re-examine your proposals made at the time when you proposed the establishment of the seaway; see if there is something you overlooked to lower our costs for waterborne steel to the central markets of Canada. This was one of the items stressed by the voluntary planning board, and again I quote it:
Import competition is severe in most product lines in the eastern part of Canada where Dosco seeks its major sales volume.
I have no doubt that this is true. If this is
so, then it is the responsibility of government to see if we cannot use this waterway from the Atlantic provinces to central markets to lower costs and keep the mill open in the city of Sydney.
October 16, 1967

Closing of Nova Scotia Steel Plant
1 would also urge the government to examine the possible application o 1 tariffs to protect our steel industry, as other countries are doing or, alternatively, to discuss with other countries the elimination of their tariffs. Surely a small country like Canada with 20 million people should have its steel exports in balance with the United States.
If no agreement on tariffs can be reached we may well be required to give consideration to legislation similar to that which is being proposed in the United States. I say this, Mr. Speaker, because we hear a lot today about social security in Canada. I am in favour of social security, but in my opinion the best social security we can give any man is the assurance of a good job with a good future. This is what we want in Canada today. This is the kind of social security we need.
The step that was proposed last week in Sydney can hardly be justified no matter how we look at it, but anything we can do at the federal level to help alleviate the misery and suffering can be justified. There will be misery and suffering in Cape Breton if the mill closes next April. This is a matter that cannot be passed over lightly. It is a problem that should receive the immediate attention of the best brains in our federal and provincial governments if our dream of a developing Canada, as publicized during our centennial celebrations, is not to die with the closing of Expo.
[DOT] (9:30 p.m.)


Hon. A. J. MacEachen (Minister of National Health and Welfare):: Mr. Speaker, I have listened with a great deal of interest and more than ordinary concern to the debate that was precipitated this afternoon by the motion of the member for Cape Breton South (Mr. Maclnnis). I appreciate the motivation behind the motion. I believe the seriousness of the situation has been supported by the unanimity with which the house agreed to this emergency debate.
I rise with a heavy heart really to participate in this debate in this closing moment, because I realize, as do other hon. members, the impact that this decision if implemented will have on the immediate employees at the steel plant at Sydney, and also upon the general economy of Nova Scotia as a whole. The impact of this decision if implemented will be very great and very brutal. Unless the impact can be averted or unless some solutions are found to cushion its effect, in my judgment the sudden discharge of 3,000 men onto the

labour market in Cape Breton at the end of April or May would lead to a near collapse of the industrial economy of that area.
When we set up the Cape Breton Development Corporation we were aware that the closure of the Cape Breton coal mines and the sudden cessation of mining operations would not be bearable by the economy. We realized that if these collieries closed suddenly and
6,000	or 7,000 men were discharged into the labour market there would be no real foundation for the economic existence of that area. While the numbers involved in this particular field are not as great as the coal industry, the impact upon the economy will be very great, very sharp and very unfortunate.
This debate has produced no immediate solution to the problem, because I think most of us are still somewhat bewildered by the suddenness of the decision and still somewhat incapable of relating the decision to recent events and recent impressions we have received. For example, it was only in the spring of this year that an agreement involving the provincial government, the federal govern-nent and Dosco was reached to provide for almost $6 million in Sydney for the provision of docking facilities or bulk handling facilities. There was an understanding in the agreement that this amount of money which was being made available by federal and provincial funds would be matched by an equivalent investment in the industry by the corporation over a period of time. Certainly one had some indication that an agreement of that kind was not to be the messenger of an immediate decision to close out an industry or a plant.


Thomas Clement (Tommy) Douglas: Mr. Speaker, may I ask the minister whether it was spelled out in the agreement that Dosco was to match this amount and whether any penalty was involved in the event of their not matching.


Allan Joseph MacEachen: Yes, the agreement is explicit on that point. If there should be any doubt as to the carrying out of this undertaking, there is a provision in the agreement that the arbitration will be conducted by the chief justice of the province of Nova Scotia. Just recently, as has been pointed out by the hon. member for Antigonish-Guysborough (Mr. Stewart) and others, a steel making study was produced under the joint auspices of the Atlantic Development Board, the Nova Scotia Voluntary Planning Council, which is an agency of the provincial government, and the Dosco corporation. Since I have taken on
October 16, 1967

the responsibility for the Atlantic Development Board I have given my consent to the release of that study. It was concurred in, not two years ago, or a year ago, or a few months ago, but quite recently, by the highest officers in the Dosco corporation. While none of us would argue that this steel making study gave any strong basis for optimism or a strong basis to believe that the steel industry in Sydney would be a growing industry or an increasing user of labour, or indeed that it did not have very important difficulties, nevertheless one of the conclusions on the positive side was that for an indefinite period at least this plant could look forward to being the basic supplier of ingots and billets to the Quebec mills.
It is no wonder that most of us who were keeping abreast of developments were shocked and stunned at the decision that was conveyed to the government of Canada last Thursday morning by the chairman of Hawker Siddeley in Britain, the chairman in Canada and the president of Dosco. The reasons which have been given by the responsible officers may be very strong and convincing reasons to persons who are responsible for administering assets on behalf of shareholders, but it seems to me the method by which this decision was carried out is as brutal in a sense as the impact of the decision itself, because no effort was made to lay before the governments the problems which affected this industry, and there was no effort to explain to the employees and their families the difficulties involved in operating this plant. Who, after all, were more entitled to such explanations than these employees in a civilized community. No effort was made to consult with them or present to them any method or assistance by which what would be a calamity to the community could be averted.
I find even more objectionable the fact that the corporation up to the present time has refused, since it has taken this decision, to meet in an acceptable form the representatives of the two governments, the union leaders and the community leaders to explain the reasons for this decision or to outline, as I think they ought to, the method by which they intend to discharge their responsibilities relative to the work force and to the community.
Following the decision announced to us in Ottawa on Thursday we had a number of meetings and concluded that the most important first step would be to convene a meeting
Closing of Nova Scotia Steel Plant of this kind at Sydney at which the representatives of the corporation would explain their position. That is a very vital and important thing to have done, e (9:40 p.m.)
Acting on behalf of the government of Canada I sent a telegram to the premier of Nova Scotia suggesting such a meeting and, because the meeting would likely be held in Nova Scotia and because of the vital interest to that province, I suggested that he convene the meeting. The premier of Nova Scotia thought this was a reasonable request and concurred in it, but we propose to have a meeting tomorrow night in Sydney. However, so far as I know, there has been no indication yet that the representatives of this organization will be present. I understand that Sir Harold Hall, the chairman of the Hawker Siddeley group, flew to Britain shortly after the decision was announced. I am quite satisfied that this was not a Canadian decision, but that the decision was made in London and that the people of Nova Scotia have not had the opportunity of even hearing or seeing the person who is in a position to exercise such an economic force on their lives. It is my hope that the corporation in this period of great difficulty will at an early date attend discussions with all of us in respect of what can be done to avert this calamity.
The ideal solution is to find some way to keep this plant in operation, but that requires first of all, it seems to me, the co-operation of the corporations involved. Hon. members have suggested that the steel plant in Sydney become a public plant, and that it be operated by the federal government. Let me assure you, Mr. Speaker, that when I present my reaction to this proposal, it is not based on any ideological or basic principle in opposition to the public authority undertaking something of this kind. However, bearing in mind that the Sydney steel plant is one part of a growing and competitive industry in Canada, it would present difficulties if a national government selected a single plant to be operated and supported with public funds in competition with other plants involved in the same industry in other parts of Canada.


Mr. Fulton:: Would the minister permit a question? In light of the implication of one passage of the speech by the hon. member for Antigonish-Guysborough (Mr. Stewart), would he not admit that this proposal for nationalization presents even greater problems for a provincial government?
October 16, 1967

Closing of Nova Scotia Steel Plant


Allan Joseph MacEachen: Before any of us advocate the nationalization of this plant at the federal or provincial level, we ought to have some appreciation of the cost both to a provincial or federal government. At the present time I am not in a position to estimate the economic cost or the possible benefits of such a step. I do believe that aside from the question of finances, the constitutional or jurisdictional case is stronger for a provincial authority to undertake this job than for the federal authority. We have situations in various provinces where local development, local industry and local support is given to plants in those provinces which are in competition with other plants involved in the same industry in other parts of Canada. This problem is a bit more difficult for a national government. We will undoubtedly be hearing more about this proposal in the future.


George Harris Hees: Would the minister permit a question? If the provincial government decides to go ahead with a nationalization program of this kind, will the federal government be willing to give assistance on a proportionate basis having in mind the difference in size of the governments?


Allan Joseph MacEachen: That is a very important question. All I can say is that if the provincial government made a proposal and came to the federal government for help it would be considered with all possible care. That is about as far as we can go at this time.


Thomas Clement (Tommy) Douglas: On this question of constitutionality, which I think involves an interesting point, what possible constitutional difference could there be between the federal government setting up a crown corporation jointly with the province of Nova Scotia to operate certain selected coal mines, and the setting up of a corporation to operate what is really a concomitant of the coal and steel industry, with the possibility always of further co-operation with Industrial Estates and the Atlantic Development Corporation in setting up secondary fabricating industries to work with this Cape Breton Development Corporation?


Allan Joseph MacEachen: Having regard to the coal producing industry in Cape Breton intended for public ownership, this will not be in competition with any other Canadian coal producer. I believe that is the difference.


Thomas Miller Bell: The constitutional aspect is not involved.


Allan Joseph MacEachen: This is an economic argument. The hon. member for Carleton (Mr. Bell) talks about the constitutional aspect, and perhaps he is right on that point, but I believe there is quite a difference between the coal industry, which is not competing with any other coal producer in Canada, and the steel plant in Sydney which would be competing very strongly and directly in those markets with other Canadian steel producers. That is the big difference.


Thomas Clement (Tommy) Douglas: The minister has referred to Cape Breton coal producers not competing with other Canadian coal producers, but will they not be in competition with other fuel producers?


Allan Joseph MacEachen: I do not think that is the same thing, but I suppose there are other aspects and that in logic you could take the argument a long way. There is quite a difference in respect of these points and for that reason I think we ought not say immediately that this is the place we ought to exercise the authority of the federal parliament.


Richard Albert Bell: Speak on economics and leave the constitution to experts.


Allan Joseph MacEachen: I accept that advice from the hon. member, and I am glad he brought me back to the straight and narrow at the right moment. I thank him for doing so.
Hon. members have talked about the Cape Breton Development Corporation and what it will and can do. The president of that corporation has now been appointed and I understand that my colleague will be recommending the appointment of additional directors very soon. The corporation has the authority by law and will be in the position very soon to determine what it is going to do in relation to the Cape Breton steel problem. This corporation has very wide powers, powers wide enough to achieve the objective recommended by members of the N.D.P., if the directors desire to do so.
[DOT] (9:50 p.m.)
Here again I must not tread on the sacred soil of the hon. member for Carleton. I merely say that I believe it does have that authority if it wishes to exercise it. But the corporation would then have to determine, in taking over the steel industry, what the cost to the corporation would be; and what the burden would be on the corporation in operating and modernizing the mines and taking on the big job involved in making this a viable industry in the Cape Breton area. I think it is too early at
October 16, 1967	COMMONS
this moment to determine whether this would be a good thing tor the corporation to do, but at any rate this decision has been assigned to the corporation by parliament.


Malcolm MacInnis: You
just jumped on Pepin's toes.


Thomas Clement (Tommy) Douglas: Mr. Speaker, would the minister permit a question? Do I understand him to say that in his opinion the Cape Breton Development Corporation has the authority to step into the situation in the steel industry, if that seems advisable, and if the government is agreeable-because the government would have to increase the corporations capitalization? Do I understand the minister to say that? I understood him on June 27 to express the opinion that the corporation does not have this authority.


Allan Joseph MacEachen: Mr. Speaker, I think that on June 27 we opposed an amendment that would obligate the corporation to operate the steel plant.


Thomas Clement (Tommy) Douglas: It was permissive.


Allan Joseph MacEachen: It was permissive, then. However, I understand that the corporation has the authority to acquire shares if it so wishes. It seems to me that it has the legal power to do anything that is required in the steel industry, if it so desires. But I am quite satisfied that, apart from whether the directors of the corporation do decide to take up the views proposed by the hon. member for Winnipeg North (Mr. Orlikow) and the hon. member for Winnipeg North Centre (Mr. Knowles), this problem will undoubtedly be one of the first major tasks for the corporation to consider. I hope it will be able to do something very quickly about putting some light into the dark corners that seem to surround this particular problem.
I do not wish to continue any further, Mr. Speaker. I have spoken much longer than I intended. I merely wanted to say-


Robert Muir: Mr. Speaker, would the minister accept a question? Would he not agree that during the debate on the Cape Breton Development Corporation and prior thereto, in answer to questions the minister himself and the minister of mines stated that the legislation was quite broad enough to allow the corporation to assist in the development of the steel industry?
DEBATES	3159
Closing of Nova Scotia Steel Plant


Allan Joseph MacEachen: I do not think there is any doubt about that, Mr. Speaker. The corporation has very wide powers. I think all of us felt when we read the steel study to which I referred earlier that maybe the Cape Breton Development Corporation could do something which would enable this industry to become more efficient. In my opinion they are now faced with a more difficult problem, in that the mill is destined for closure. We are having, I hope tomorrow evening, a meeting with the premier and members of the government of the province of Nova Scotia. Whatever responsibility other governments must take, I think the provincial government has a very-great interest and responsibility in this matter. It seems to me it would be premature for the federal government to declare any policy on this important matter without having had an opportunity to discuss the question with the premier of Nova Scotia and the members of his government, to hear the views of the community representatives and the labour leaders. This is what we propose to do in the meeting tomorrow evening.


J. Michael Forrestall: Mr. Speaker, may I ask the minister a question?


Mr. Speaker:: Order. Would the minister allow a question from the hon. member for Halifax (Mr. Forrestall)?


Allan Joseph MacEachen: Yes, Mr. Speaker.


J. Michael Forrestall: I could ask the minister this question tomorrow night, because he indicated when he concluded his remarks that there would be a meeting tomorrow evening. However, would the minister indicate now whether there will be anything in the discussions with the Dosco people with regard to Trenton and the shipyard complex in the cities of Halifax and Dartmouth?


Allan Joseph MacEachen: I am not in a position to comment on that matter, Mr. Speaker. This is one of the reasons why I think it would be helpful to have further discussions with Dosco.


Mr. MacDonald (Prince):: Mr. Speaker, my question is directed to the meeting tomorrow night. I think it is incredible that in the meeting concerned with this catastrophic situation the minister or the government have not discovered why the people of Dosco and others involved will not be present. Why are they not meeting with representatives of the government of Nova Scotia on this problem?
October 16, 1967
3160	COMMONS
Proceedings on Adjournment Motion


Allan Joseph MacEachen: Mr. Speaker, my latest information is that representatives of the corporation will not be present, but I hope that information will prove to be incorrect. I hope that the expressions of opinion made in this parliament today will be of some assistance in bringing everybody to that meeting.


Some hon. Members:: Hear, hear.


Mr. Speaker:: It being ten o'clock, is it the desire of the hon. member for Cape Breton South (Mr. Maclnnis) to withdraw his motion, in view of the fact that there is about one minute left before ten o'clock. This would allow the adjournment proceedings to take place after ten o'clock.


Malcolm MacInnis: Mr. Speaker, I was looking to the minister to carry on until ten o'clock, when proceeding to the adjournment debate would be automatic. However, I should like to take this opportunity to thank sincerely all hon. members who have taken part in this debate relating to the problems faced by Cape Breton. I express my appreciation to the house and withdraw the motion, so that the order of business of the house may go forward.
Order discharged and motion withdrawn.



BUSINESS OF THE HOUSE

Mr. Fulion:: Mr. Speaker, could the house leader indicate the business for tomorrow? Will the business be what was announced last week, or will it be postponed for one day?


Allan Joseph MacEachen: Mr. Speaker, I hope we will be able to do as we proposed. To begin with, we shall deal with the Broadcasting Act resolution.


James Ross Fulton: Not the post office?


Allan Joseph MacEachen: Not the post office. On Wednesday we will begin with Bill No. C-161, second reading of the bill concerning the department of corporate and consumer affairs. On Thursday we will continue the debate on second reading of the Emergency Gold Mining Assistance Act. On Friday, regardless of the progress we have made on these two bills, we should like to deal with the resolution concerning the Industrial Development Bank.



PROCEEDINGS ON ADJOURNMENT MOTION

[Stage Direction]
A motion to adjourn the house under provisional standing order 39A deemed to have been moved.

Herbert Wilfred Herridge: Mr. Speaker, a most unusual resolution adopted by the delegates at the union of British Columbia municipalities was brought to my attention. I think it is the first occasion that a convention of municipalities for any province has taken the time to deal with this subject and to have considerable debate on the resolution in question. I obtained a copy of the Trail Times of September 23, and I read from it as follows:
[DOT] (10:00 p.m.)
Municipal Delegates Veto All Cigarette Advertising.
Prince George (CP)-Municipal leaders called Friday for restrictions on tobacco advertising.
Delegates to the Union of B.C. Municipalities convention overruled their resolutions committee which said the Port Alberni proposal was not a matter for local governments.
"We must be a responsible body," said Dr. R. M. Heffelfinger, a Port Alberni alderman. "It is a matter for our concern and we should endorse the resolution." Mayor Les Hammer of Port Alberni argued that it is a municipal matter because medical evidence stressed the health hazard of smoking.
The city's resolution said:
"It is morally and ethically wrong to deliberately advertise products which are of no benefit whatever and are actually very injurious to young people and society generally."
Seek Laws.
It proposed that the U.B.C.M. call on senior governments to introduce legislation to "eliminate, modify or deglamorize all forms of tobacco advertising."
This resolution was the cause of a very interesting debate and, as I said before, it was the first occasion at which a convention of municipalities in any province has dealt with this type of resolution. I think it is based on the fact that the delegates at the convention were aware of the circumstances that they were criticizing so far as the advertising is concerned. That is why they supported the resolution.
Since the convention there has been a quite general interest in this matter throughout British Columbia and in the riding which I have the honour to represent. The matter has been discussed by other groups and there is general support for the action taken by the union of British Columbia municipalities convention.
It was on that account that I rose on October 2 to ask the following question:
Mr. Speaker, I wish to address a question to the Minister of National Health and Welfare, based
October 16, 1967	COMMONS
on a resolution passed by the union of British Columbia municipalities at their annual convention recently held in Prince Rupert. The resolution was to the effect that the U.B.C.M. called on all senior governments to introduce legislation to eliminate, modify or deglamorize all forms of tobacco advertising.
Has the minister received a copy of this resolution and, if so, can he inform the house of his response to same.
Then, Mr. Speaker, you said:
Order, I am sure the hon. member will agree with me that the question could easily be placed on the order paper. That is the suggestion X take the liberty of making to him.
I asked lor an opportunity to deal with the matter briefly after ten o'clock because of the number of persons who are interested in knowing the reaction of the federal minister to this proposal. I presume that this resolution has been sent by the secretary of the
DEBATES	3161
Proceedings on Adjournment Motion organization to the appropriate provincial minister and to the Minister of National Health and Welfare, (Mr. MacEachen), in view of the fact that today is October 16 and the meeting occurred on September 22. I should like to hear from the parliamentary secretary, and I apologize to her for delaying her beauty sleep by keeping her here after ten o'clock.


Mrs. Margaret Rideout (Parliamentary-Secretary to Minister of National Health and Welfare):: I must assure the hon. member that he is certainly not delaying my beauty sleep. All I can say to him, however, is that no resolution has been received by the minister and therefore there are no further comments that I can make at this time.
Motion agreed to and the house adjourned at 10.05 p.m.
3163

Tuesday, October 17, 1967