1973-11-05

ROUTINE PROCEEDINGS


Hon. Mitchell Sharp (Secretary of State for External Affairs):: Mr. Speaker, I would like to table the texts of the following documents: the United Nations Security Council Agreement of November 2 on the implementation of the second phase of Security Council resolution 340 of October 25, notes dated October 30 and November 4 from the permanent representative of Canada to the Secretary General of the United Nations and, finally, the note of October 30 from the Secretary General to Canada's permanent representative.


INDIAN AFFAIRS AND NORTHERN DEVELOPMENT
Mr. Judd Buchanan (London West) moved: that the sixth report of the Standing Committee on Indian Affairs and Northern Development, presented to the House on October 26, 1973, be concurred in.
He said: Mr. Speaker, there has been discussion with the various House leaders on this matter and I believe there is agreement that the report be concurred in without debate.


Some hon. Members:: Agreed.


Mr. Speaker:: Is it the pleasure of the House to adopt the said motion?


Some hon. Members:: Agreed.


[Stage Direction]
Motion agreed to.

Right Hon. J. G. Diefenbaker (Prince Albert):: Mr. Speaker, I rise under the provisions of Standing Order 43
to ask for unanimous consent of the House to raise a motion of urgent and pressing necessity. I move, seconded by the hon. member for Qu'Appelle-Moose Mountain (Mr. Hamilton):
That this House views with concern the indecorous haste exhibited by the Canadian government in its anxiety to secure consent of objecting nations within the United Nations to having Canadians in the peacekeeping force for service in the Middle East, whereby without regard to the magnificent record of Canadians in two world wars Canada's No. 1 combat alert unit is to be placed in a secondary position in the peacekeeping force being given a responsibility analogous to that of hewers of wood and drawers of water for other nationals in the said force.


Mr. Speaker:: Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


Mr. Speaker:: There is not unanimous consent.


Mr. Wagner:: Mr. Speaker, I rise on a point of order. I would like to ask the Secretary of State for External Affairs whether he is prepared to make a statement on motions relating to his discussions over the weekend in New York and Washington.


Mr. Speaker:: Order, please. That is hardly a point of order. Hon. members know that we would get into difficulty if on motions hon. members were to ask members of the government whether they propose to make statements. I appreciate the importance of the matter. Perhaps the minister might be allowed to reply. But I think the hon. member would agree that if the minister rose and made a statement that would answer the question. That is why, normally, this kind of question is not asked on motions.


NORTHERN AFFAIRS
Mr. Wally Firth (Northwest Territories):: Mr. Speaker, in view of reports of a serious conflict of interest with respect to the letting of contracts in connection with a government project in my constituency of the Northwest Territories, I ask leave, under the provisions of Standing Order 43, seconded by the hon. member for Skeena (Mr. Howard), to move as follows:
That the letting of contracts by Hire North, a Northwest Territories government project, be referred to the Standing Committee on Public Accounts for the purpose of determining whether tenders were called before such contracts were authorized, and

November 5, 1973
Local Initiatives Program
also for the purpose of determining whether the employee appointed to head Hire North has been involved in a conflict of interest.


Mr. Speaker:: Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


Mr. Speaker:: There is not unanimity.


SCREENING PROCEDURES FOR BLOOD IMPORTS FROM UNITED STATES-REQUEST FOR UNANIMOUS CONSENT TO MOVE MOTION
Mr. Dan McKenzie (Winnipeg South Centre):: Mr. Speaker, I rise under the provisions of Standing Order 43 to move a motion concerning a matter of urgent and pressing necessity, namely, that the import of blood from the United States carries with it toxic hepatitic bacteria that constitute a danger to the technicians who handle it for experimental use. I therefore move, seconded by the hon. member for Victoria (Mr. McKinnon):
That an inquiry be launched immediately for the adoption of more satisfactory screening procedures in importing batches of high risk blood specimens.


Mr. Speaker:: Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


Mr. Speaker:: There is not unanimity.


MANPOWER
Mr. Jack Marshall (Humber-St. George's-St. Barbe):: Mr. Speaker, I rise under the provisions of Standing Order 43 in that the allocation of funds under the Local Initiatives Program to regions of highest unemployment does not come close to meeting the objectives of the program and tends to destroy the initiative criteria. I therefore move, seconded by the hon. member for Gander-Twillin-gate (Mr. Lundrigan):
That the government immediately increase the funds under the LIP program to at least that amount allocated last year.


Mr. Speaker:: Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


EXTERNAL AFFAIRS
Mr. John Harney (Scarborough West):: Mr. Speaker, I rise under the provisions of Standing Order 43 to bring a matter of urgent and pressing necessity to the attention of the House and to seek unanimous consent to move a motion. In view of the fact the Canadian ambassador to Chile, in a dispatch to Ottawa, stated, "Reprisals and searches have created panic atmosphere affecting particularly expatriates including riff-raff of Latin American left to whom Allende gave asylum," thus betraying a bias that makes it impossible for him to carry out stated government policy on political refugees in Chile, I move, seconded by the hon. member for Yorkton-Melville (Mr. Ny strom):
That this House instruct the Secretary of State for External Affairs to recall the Canadian ambassador to Chile.


Mr. Speaker:: Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


Mr. Speaker:: There is not unanimity.


PENSIONS
Mr.   Terry@: Mr. Speaker, pursuant to Standing Order 43 I rise on a question of urgent and pressing necessity. In view of the fact the President of the Treasury Board has consistently refused to recommend that the Canadian Forces and RCMP pension plans be transferable to Air Canada's pension plan, and in view of the basic inequity thus caused, particularly to airline pilots who have served in the Armed Forces or the RCMP and who have taken positions with Air Canada, I move, seconded by the hon. member for Prince George-Peace River (Mr. Oberle):
That this House requests the President of the Treasury Board to correct this basic inequity by permitting the transfer of credits under the Armed Forces and RCMP pension plans to the Air Canada pension plan.


Mr. Speaker:: Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


Mr. Speaker:: There is not unanimity.	Mr. Speaker: There is not unanimity.

November 5, 1973


ABORTION
Mr. Otto Jelinek (High Park-Humber Valley):: Mr. Speaker, pursuant to the provisions of Standing Order 43 I rise to propose a motion on a matter of urgent and pressing necessity. In view of the representations made to most members of the House not only in person over the past few days but also by thousands of telegrams and letters, urging the House to examine the abortion laws now freely in existence in this country, and in view of the fact that this is a matter dealing with life itself I move, seconded by the hon. member for Hamilton Mountain (Mr. Beattie):
That the government be instructed to form forthwith a committee, comprised of members of this House, to thoroughly investigate this entire area affording such organizations as the Alliance for Life and others, in fact all segments of our society, the opportunity to express their views on a matter involving the very lives of thousands of unborn children.


Mr. Speaker:: Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


Mr. Speaker:: There is not. The motion cannot be put.


EXTERNAL AFFAIRS
Mr. Tom Cossitt (Leeds):: Mr. Speaker, I rise under the provisions of Standing Order 43 to seek unanimous consent to move a motion arising from the efforts of all those who assisted in obtaining the release of Ronald Patrick Lippert-the Department of External Affairs, the Canadian Embassy in Havana, private citizens throughout the country, and certain members of the news media. I would move, seconded by the hon. member for Parry Sound-Mus-koka (Mr. Darling):
That this House expresses its appreciation to all those whose efforts contributed and assisted in obtaining the release of Ronald Patrick Lippert.


Mr. Speaker:: Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


Mr. Speaker:: There is not unanimous consent.


COMBINES INVESTIGATION ACT
Hon. Herb Gray (Minister of Consumer and Corporate Affairs) moved: for leave to introduce Bill C-227, to amend the Combines Investigation Act and the Bank Act
Order Paper Questions
and to repeal an Act to amend an Act to amend the Combines Investigation Act and the Criminal Code.


[Stage Direction]
Motion agreed to, bill read the first time and ordered to be printed.

[Stage Direction]
(Questions answered orally are indicated by an asterisk.)
[ Text]
Mr. Forrestall: Will the government ensure that all submersible vessels for which it contracts or which it purchases have more than one escape capabilities?


Mr. John M. Reid (Parliamentary Secretary to President of the Privy Council):: In so far as the Department of National Defence is concerned, a multiple escape capability for all submersibles is a clearly recognized objective; however, the achievement of this objective is currently subject to the limitations of technology in this field. In so far as the Ministry of Transport is concerned, the question of escape capability will always be an important point of consideration in the contracting or purchase of submersibles.


Mr. Forrestall: 1.	What are the definitions of the jurisdictional purview of the government with respect to the control or operational supervision of submersible vessels?
2.	What is the statutory authority for such definition?


John Mercer Reid: I am informed by the Departments of National Defence and Transport as follows: 1 and
2.	The British North America Act, Article 91, Section 10, assigns the federal government jurisdiction over navigation and shipping. This jurisdiction is exercised through the Canada Shipping Act which is administered by the Ministry of Transport. Article 714 of the CSA stipulates that, except where specially provided, the act does not apply to ships belonging to Her Majesty. The government has authority to make regulations regarding the construction and equipment of all ships and for the inspection of non-passenger ships over 15 tons, gross tonnage, passenger ships over five tons, gross tonnage and ships carrying more than 12 passengers not in excess of five tons, gross tonnage. The National Defence Act states at Section 2 that "Her Majesty's Canadian Ship means any vessel of the Canadian Forces commissioned as a vessel of war." Under authority of the National Defence Act (Part 1, Section 18) the Chief of Defence Staff is responsible for "the control and administration of the Canadian Forces ..." Consequently, the National Defence Act provides the statutory

November 5, 1973
Order Paper Questions
authority to the Chief of Defence Staff to make regulations governing the control and operation of submersible vessels belonging to the Canadian Armed Forces


Mr. Cossitt: 1.	Are any brands of Canadian champagne available on (a) domestic flights (b) flights to the United States (c) overseas flights of Air Canada and (i) if so, what brands are available (ii) if not, for what reason?
2.	What effort has the Department of Transport made to urge Air Canada to make Canadian-produced wines available to the travelling public on its flights?


Hon. Jean Marchand (Minister of Transport):: The
management of Air Canada advises as follows: 1. A Canadian brand of champagne (Bright's) is available on domestic flights, but stocks are being depleted in light of a court decision in late 1972 forbidding Canadian wine producers from using the term champagne for their domestic sparkling wines.
2. The Ministry of Transport does not advise Air Canada on internal management matters of this nature. However we are informed that Canadian wines are carried on domestic flights. The guiding criterion for all cases is customer's preference, which is determined from time to time through passenger surveys and cabin crew reports.


Mr. Stevens: 1.	Has the government taken any steps to establish some form of regular parliamentary link with the European Parliament and, if so, have they been successful?
2.	Has the government pressed the European Community to establish European Community Information Offices in (a) Halifax (b) Ottawa (c) Toronto (d) Montreal (e) Vancouver?


Mitchell William Sharp: 1. Interparliamentary relations are not within the competence of the government but fall within the scope of the officers of parliament, specifically the Interparliamentary Research Centre. However, the Department of External Affairs assists the Interparliamentary Relations Centre in organizing visits to Canada of foreign parliamentarians (such as the visit to Canada of a group of members of the European Parliament later this month)* as well as visits abroad by Canadian parliamentarians.
2. It would not be appropriate for the Canadian government to solicit the European Economic Community to establish an information office in Canada. The Standing Committee of the Senate on Foreign Affairs and Defence has recommended to the government that the Community open an information office in Canada and the Department of External Affairs has passed this information on to the officers of the European Economic Community.


Mr. McKenzie: 1.	Has the government entered into negotiations with other nations and their major airlines regarding the utilization of the Winnipeg International Airport as either a stopover point or a major departure centre on the so-called "polar route" to Europe and, if so, where and on what date were such meetings held?
2.	Have any agreements been reached regarding the utilization of the Winnipeg Airport on the polar route?


Jean Marchand: The
Canadian Transport Commission advises as follows: 1. No. 2. No.


Mr. Bawden: 1.	What agency is responsible for operating DEW Line sites and stations in Canada?
2.	How many civilian personnel are employed at such DEW Line sites and stations and, of these, how many are Canadians?
3.	Does Canada Manpower provide all the hiring services for the above agency?


Hon. James Richardson (Minister of National Defence):: 1. DEW Line sites and stations in Canada are operated by RCA through Operation and Maintenance Service Incorporated (OMS) who have an office in Winnipeg. A Canadian Forces officer commands each of the main sites in Canada.
2.	As of August 31, 1973, 488 civilian personnel were employed on Canadian DEW Line sites and stations and of these, 478 were Canadian citizens.
3.	Canada Manpower is requested by the OMS Industrial Relations Office to provide personnel for each vacancy which occurs. Only when Canada Manpower cannot provide appropriate personnel in a reasonable period of time does OMS attempt to hire personnel by open advertising.


Mr. Forrestall: Is the Department of Transport currently undertaking a definitive study on a cost-benefit basis of using nuclear propulsion for ships and locomotives of all classes and, if so (a) what level of funding has been appropriated for such a study (b) what is the status of this study (c) on what date can the results be expected to be made public?


Jean Marchand: The
Ministry of Transport is not currently undertaking a definitive study on a cost-benefit basis of using nuclear propulsion for ships and locomotives of all classes. It is, however, the Ministry's intention to commission in the near future a study with respect to nuclear ship propulsion, specifically in connection with the polar icebreaker project, with regard to the possible application of this type of propulsion under present and envisaged future circumstances. Part of the study will involve a review of the findings of previous studies on nuclear ship propulsion carried out for the Ministry and the United States Coast Guard, (a) No specific funding has been appropriated for the new study at this time and funding will not be
November 5, 1973

requested until final estimates of the cost have been determined; (b) a draft request for a proposal for the study is in the final stage for circulation to competent consultants, a list of whom is now being considered; (c) the date upon which the results of the study can be expected to be made public is not known at the present time.


Mr. Forrestall: 1.	What specific features of the Accident and Defect Investigation Division of the Canadian Surface Transportation Administration exist to guarantee it the ability to make full, impartial and interference-free reports and investigations of those areas over which it has responsibility?
2.	Is the government satisfied that such procedures are sufficient to maintain the confidence of the public and the international community with respect to the impartiality and conflict-of-interest-free accident investigation and reporting?


Jean Marchand: 1. The
purpose of the Accident and Defect Investigation Division of the Canadian Surface Transportation Administration is to evaluate the effectiveness of motor vehicle safety standards, determine the need for new or improved standards, identify possible safety-related defects or deficiencies which may be present in vehicles operating on the road system and obtain information on accident causation and specific data for research purposes. In meeting the above objectives the Accident Investigation personnel involved in these investigations do not direct their efforts to the establishment of responsibility or the making of policy recommendations. The division is supported by nine university teams strategically placed across Canada. It has also complemented its investigations by contracting a technical portion of some investigations of a major nature to independent consultants.
2. Yes.


Mr. Forrestall: 1.	For what reason is the Accident and Defect Investigation Division of the Canadian Surface Transportation Administration not separated organizationally from all other agencies and branches of government?
2.	Would such separation assure the removal of even the appearance of the possibility of conflict of interest in its reporting and investigating of accidents that may involve criticism of regulatory agencies?


Jean Marchand: 1. The
purpose of the Accident and Defect Investigation program is not to determine responsibility for individual accidents nor to make administrative or policy recommendations for preventing similar occurrences in future. The provincial governments have established procedures for determining responsibility and causes of motor vehicle accidents. The objectives of the Accident Investigation program are to evaluate the effectiveness of safety standards and to determine the need for additional standards. In addition, the investigations are designed to identify any vehicle defects or deficiencies which may have contributed to the
Order Paper Questions
accident which may be present in other vehicles operating on the road system. The investigations also provide information on accident causation and specific data for research purposes. Therefore, separation of Accident and Defect Investigations from this branch would serve no useful purpose.
2. There is no evidence of conflicts of interest in our present Accident and Defect Investigation program. The program best serves its purposes of direct support of standard activities by remaining within the branch and not under an independent quasi-judicial body.


Mr. Stevens: To date, what is the total cost expended by the government to save the elm tree on Parliament Hill, which is near the statue of Sir John A. MacDonald, from dutch elm disease (a) what have been the results (b) is it planned to treat the tree further next year?


Hon. Ron Basford (Minister of State for Urban Affairs):: In so far as the National Capital Commission is concerned: The elm tree behind the statue of Sir John A. MacDonald is a mature tree approximately 90 years old. It contracted the Dutch Elm Disease in 1966. Since then it has been pruned and sprayed annually to remove the dead wood. Approximately one-third of the tree's crown has been removed. The slow progress of the disease is due to the maturity of the tree. Actual cost for the pruning and spraying of this tree for the past seven years is not available but it is estimated at $250. During 1973, as part of the experimental root injection program, this tree was treated at a cost of $200. (a) Results of treatment prior to 1973 have prolonged the life of the tree for several years. Results of the injection treatment this year will not be known until further analysis has been conducted; (b) pruning and spraying treatment will be continued. Further action to save the tree will be determined after the results of this summer's treatment are known.


Mr. Clark (Rocky Mountain): 1.	By province, how many buildings have been surveyed during the first phase of the Canadian Inventory of Historic Buildings?
2.	By province, how many interiors of selected historic buildings are scheduled to be surveyed and recorded in phase two of the program?


Hon. Jean Chretien (Minister of Indian Affairs and Northern Development):: 1. British Columbia, 8,017;
Alberta, 8,159; Saskatchewan, 6,731; Manitoba, 2,975; Ontario, 38,579; Quebec, 29,871; New Brunswick, 5,732; Nova Scotia, 7,978; Prince Edward Island, 1,954; Newfoundland, 1,617. These figures are approximate since not all of the data has been processed.
2. At the present time we plan to record between 6,000 and 12,000 building interiors in phase 2 of the CIHB program. This represents roughly 5 to 10 per cent of the structures recorded in phase 1. The final selection of buildings has not yet been made, so we cannot provide the breakdown requested.

November 5, 1973
Order Paper Questions


Mr. Reynolds: Is there a $90,000 difference for the construction of two identical buildings, one at the Montreal STOLport and the other at the Ottawa STOLport and, if so, for what reason?


Jean Marchand: Yes, conditions at the Montreal STOLport required the provision of suspended floor slabs and underfloor membranes, which resulted in higher costs for the superstructure.


Mr. Cossitt: 1.	Is Miss Monique Coupal employed by the government and (a) if so, in what capacity and at what annual salary (b) if not, on what date did she leave government service and for what reason?
2.	(a) What are all positions ever held at any time in the Public Service by Miss Monique Coupal (b) what were the periods of time involved (c) what was the annual salary in each case?


Right Hon. P. E. Trudeau (Prime Minister):: Yes. (a) Executive Assistant to the Principal Secretary to the Prime Minister; $22,000-$28,000; (b) Not applicable.
2. (a) Assistant Secretary and Legal Adviser-The Royal Commission on the Status of Women	(b) 01/09/67-14/12/70	(c) $18,867-$21,442Legislative Counsel-Office of the President of the Privy Council	22/02/71-18/09/71	$18,867-$21,442Secretary-C RTC	31/07/71-30/08/73	$19,400-$24,200Executive Assistant to the Principal Secretary to the Prime Minister	01/09/73-present	$22,000-$28,000


Mr. Howard: 1.	(a) What was the projections of costs on a year by year basis over the length of the development period for La Mauricie National Park in its original development plan (b) did these estimates include provision for inflation?
2.	What are the actual amounts which have been spent year by year on La Mauricie National Park?
3.	Have the estimates of the expenditures needed over the development period been revised and, if so, what are the revised figures?
4.	What priority was originally assigned to La Mauricie National Park, in terms of the length of the development period and the level of expenditures, vis-a-vis other parks in the national parks system?
5.	Has the priority changed and, if so, in what way?
6.	What criteria are employed in assigning priorities?


Joseph Jacques Jean Chrétien: 1. (a) The initial conceptual plan envisaged an estimated expenditure of $17 million by 1980; (b) The initial plan did not include a provision for

inflation but the most recent revised plan proposes an expenditure of $18.2 million by 1980 and is a projection based on 1973 dollar values.
2.	1970/71	1971/72	1972/73Capital	$ 203,800	$1,557,700	$2,907,500O and M	
63,300	234,800	283,600$ 267,100	$1,792,500	$3,191,100
The above totals include capital expenditures, opera-ting/maintenance costs and special labour intensive winter works programs.
3.	Answer contained in question 1 above.
4.	All new and developing parks receive equal priority within the National Parks System.
5.	The priority has not changed, but the road program in La Mauricie Park has been accelerated in order to meet the objectives envisaged in the 10-year plan for the park.
6.	All new parks brought into the parks system receive a high priority to meet our commitments to the provinces as delineated in the federal/provincial agreements pertaining to the handover of provincial lands to the Crown.


Mr. Mitges: How many subscribers of Hansard are there for the current session of the 29th Parliament and what is the number for the Province of Ontario?


Hon. John C. Munro (Minister of Labour):: Information Canada advises as follows; Subscribers in Canada, 8209; Subscribers in Ontario, 4266.


Mr. Yewchuk: 1.	For each year 1969 to 1972 and for the first six months of 1973, how many professional athletes (a) hockey players (b) football players (c) baseball players (d) others received benefits from the Unemployment Insurance Commission?
2.	For the same years, what was the total amount paid in benefits to each one of these professional groups of athletes?


Mr. Mark MacGuigan (Parliamentary Secretary to Minister of Manpower and Immigration):: The Unemployment Insurance Commission does not maintain statistics that would make this kind of information available.



QUESTIONS PASSED AS ORDERS FOR RETURNS


Mr. Marshall: Has any department carried out a study of the impact of U.S. DISC corporations on Canada's economy and (a) if so (i) which department(s) carried out the study or studies (ii) what were the terms of reference (iii) what were the conclusions reached (b) if not, for what reason?
November 5, 1973

Return tabled.



ST. LAWRENCE ISLANDS NATIONAL PARKS- GOVERNMENT-OWNED SNOWMOBILES

Mr. Cossitt: 1.	How many government-owned snowmobiles are maintained at St. Lawrence Islands National Parks?
2.	On what date, from whom and at what price was each purchased?
3.	Were tenders called on each purchase and (a) if not, for what reason (b) if so (i) was this by public advertisement or invited tender (ii) what tenders were received in each case?
4.	Who looks after maintenance of these snowmobiles and what was the total maintenance cost during the latest 12 months for which figures are available?
5.	Are any leased snowmobiles used by the government at this location and, if so, from whom and at what cost?
Return tabled.



ST. LAWRENCE ISLANDS NATIONAL PARKS- GOVERNMENT-OWNED BOATS

Mr. Cossitt: 1.	How many government-owned boats are maintained at St. Lawrence Islands National Parks?
2.	On what date, from whom and at what price was each purchased?
3.	Were tenders called on each purchase and (a) if not, for what reason (b) if so (i) was this by public advertisement or invited tender (ii) what tenders were received in each case?
4.	Who looks after maintenance of these boats and what was the total maintenance cost during the latest 12 months for which figures are available?
5.	Are any leased boats used by the government at this location and, if so, from whom and at what cost?
Return tabled.



ST. LAWRENCE NATIONAL PARKS-GOVERNMENT-OWNED VEHICLES

Mr. Cossitt: 1.	How many government-owned vehicles are maintained at St. Lawrence Islands National Parks?
2.	On what date, from whom and at what price was each purchased?
3.	Were tenders called on each purchase and (a) if not, for what reason (b) if so (i) was this by public advertisement or invited tender (ii) what tenders were received in each case?
4.	Who looks after maintenance of these vehicles and what was the total maintenance cost during the latest 12 months for which figures are available?
5.	Are any leased vehicles used by the government at this location and, if so, from whom and at what cost?
Return tabled.
Oil Supplies



MOTION TO ADJOURN UNDER S.O. 26   ENERGY OIL SUPPLIES FROM FOREIGN SOURCES

Mr. T. C. Douglas (Nanaimo-Cowichan-The Islands):: Mr. Speaker, I ask leave, seconded by the hon. member for Kootenay West (Mr. Harding), to move the adjournment of the House under Standing Order 26 for the purpose of discussing a specific and important matter requiring urgent consideration, namely, the steps the government proposes taking to meet the continuing interruption of oil supplies from foreign countries and, more particularly, what plans it has for (a) procuring alternative supplies to meet the needs of eastern Canada; (b) organizing public support for reducing the consumption of energy supplies this winter, and (c) instituting a system of oil rationing should this become necessary.


Mr. Speaker:: The hon. member for Nanaimo-Cowichan-The Islands has forwarded the notice required by section 2 of Standing Order 26. This has provided the Chair with an opportunity to give the matter the most serious consideration.
There can be little doubt that the proposed motion meets most of the criteria set out in paragraph 16 of Standing Order 26. The subject raised by the hon. member is, as specified in the Standing Order, a specific and important matter requiring urgent consideration. It is one which is of interest and concern to all members and one which hon. members would want to debate, I am sure, at a suitable and appropriate moment. The Chair is therefore sympathetic to the proposal of the hon. member that there be a special debate on this matter.
Of course, it might well be suggested that the debate proposed by the hon. Secretary of State for External Affairs, to which reference has been made from time to time during the last few days, might afford us an opportunity for the special debate now proposed by the hon. member for Nanaimo-Cowichan-The Islands. Hon. members will appreciate, also, that there can be only one debate about a certain subject under the terms of Standing Order 26 during the course of a session. Paragraph 16, subsection (d) reads:
. .. the motion must not revive discussion on a matter which has been discussed in the same session pursuant to the provisions of this Standing Order.
When we are dealing with a developing situation and one which may become of graver concern later, hon. members may well wonder whether the moment has yet come when the one and single emergency debate provided by the Standing Order ought to take place at this particular point in time. With this in mind, I suggest to hon. members that it might be wise if the Chair were allowed to postpone until later this afternoon the very important decision he has to make in response to the motion so as to consult in the meantime with House leaders. These consultations would be of great assistance to the Chair in determining whether the proposed debate should take place

November 5, 1973
Oral Questions
today, perhaps later this week, or at some time, in any event, by mutual agreement. I will therefore hold the matter in abeyance. Following discussions after the calling of orders of the day, a statement can be made from the Chair indicating the decision which has been reached.



ORAL QUESTION PERIOD


Hon. Robert L. Stanfield (Leader of the Opposition):: Mr. Speaker, I should like to divert a question to the Secretary of State for External Affairs about his visit to the United Nations and the documents he tabled today. Is the government of Canada now formally committed to sending a contingent, as originally proposed, to provide logistics support for the United Nations Emergency Force, or is the government simply committed to sending what is described, I think, as a small evaluation force to the area?


Mitchell William Sharp: Mr. Speaker, the situation, if I may describe it briefly, is this: The Secretary General asked Canada originally to supply the logistics component of the United Nations Emergency Force. It was because of some doubt whether this proposition was wholly acceptable to all members of the Security Council and the parties to the conflict that I went to New York on Friday to discuss with the Secretary General later developments. At that time, or shortly after I arrived, the Security Council held another meeting and put forward the-[DOT]


Robert Lorne Stanfield: I rise on a point of order, Mr. Speaker. With respect, it seems to me the minister is making the kind of statement that he ought to make on motions. We are very grateful for the information, but I suggest that we would be prepared to revert to motions so the minister can make the statement.


Mitchell William Sharp: Mr. Speaker, I do not think it would be wise at this time to make an extensive statement on the subject; I will be quite happy to answer the hon. gentleman's question more briefly. All we are committed to at the moment, although we have accepted the larger role, is to send an evaluation force to the Middle East in order to determine what our role should be.


Robert Lorne Stanfield: Mr. Speaker, can the Secretary of State for External Affairs explain, and I am not being facetious, what he means by saying that the government of Canada is committed to the larger role but the only thing it has agreed to do is to send a small evaluation team?


Mitchell William Sharp: Yes, Mr. Speaker. The House will recall that I said, in reply to a question, that until the situation is clarified we do not intend to send any other troops to the Middle East. All that we have agreed to send so far is a small evaluation team.


POSITION OF ARAB COUNTRIES ON SUPPLYING OF OIL TO CANADA
Robert Lorne Stanfield: Mr. Speaker, the Prime Minister indicated on Friday, I believe, that the Secretary of State for External Affairs would be consulting with the representatives of the Arab oil producing nations at the United Nations with regard to security of oil supplies for Canada. Can the minister advise the House whether, in his meetings with the representatives of the Arab states, he discussed any conditions and received any assurance with regard to an assured supply of petroleum to Canada from the Arab oil producing countries in the event of Canada participating in the United Nations Emergency Force?


Mitchell William Sharp: Mr. Speaker, I do not think there is any direct relationship between our participation in the United Nations Emergency Force and the attitude of the Arab oil states toward supplying oil to Canada. The discussions that I and our ambassadors have had directly with the representatives of the Arab countries indicate that Canada is not considered to be a country unfriendly to the Arab countries and we have no information that any boycott will be applied against us. As the hon. gentleman knows, the oil countries are reducing their production. It is very difficult for anyone to tell how that will affect deliveries to any country in the world.


OPPORTUNITY FOR DEBATE ON CANADIAN PARTICIPATION IN MIDDLE EAST PEACEKEEPING FORCE
Mr. Andrew Brewin (Greenwood):: Mr. Speaker, will the minister say whether the commitment he made last week that the approval of parliament will be sought with regard to sending a force in reply to the Secretary General's request still stands and when we may expect that debate?


Mitchell William Sharp: Mr. Speaker, the commitment still stands. I am ready to call the item immediately, but I believe it would be very much in the interests of the House before the resolution is called that the exact role that Canada will be called upon to play be decided. We now have to consider sharing the logistics component with at least one other country, namely, Poland. It is for this reason that the evaluation team is going to Cairo to try to determine how best to divide these responsibilities.


REASON FOR ALLOCATING AIRBORNE UNIT FOR POSSIBLE SERVICE IN MIDDLE EAST PEACEKEEPING FORCE
Hon. Marcel Lambert (Edmonton West):: Mr. Speaker, I have a supplementary question for either the Secretary of State for External Affairs or the Minister of National Defence. In view of the fact an evaluation team is now going to Cairo and there has been a review of the role Canada will play, why was it decided to choose the Canadian airborne regiment, Canada's combat alert unit, to fulfil this role which would normally be carried out by a supply unit?
November 5, 1973


James Armstrong Richardson: Mr. Speaker, there will be no decision about the use of the Canadian airborne regiment until the evaluation team has made its report to the Secretary General. As the hon. member knows, this regiment has been a standby regiment for peacekeeping for several years.


John George Diefenbaker: Not for the activity of being a hewer of wood.


Marcel Joseph Aimé Lambert: Will the minister advise why the unit at this stage of its combat readiness would be used not as a peacekeeping unit but as a supply unit under the logistic arrangements forecast by the Secretary of State for External Affairs? After all, the RCMP can look after a parking lot as well.


James Armstrong Richardson: Mr. Speaker, the Canadian airborne regiment is trained to play more than one role. Although it is a combat regiment, it is also trained in peacekeeping operations. It should be the wish of all of us that it play a role in peacekeeping, rather than in combat.


Mr. Speaker:: The Chair will recognize the hon. member for Saint John-Lancaster on a supplementary and then the hon. member for York South.


TIME OF DEBATE ON CANADIAN PARTICIPATION IN MIDDLE EAST PEACEKEEPING FORCE
Mr. Tom Bell (Saint John-Lancaster):: Mr. Speaker, my supplementary is for the Secretary of State for External Affairs. Does the sending of the evaluation team now mean the matter will not be referred to the House in the way indicated until the evaluation report is given to the House?


Mitchell William Sharp: Mr. Speaker, I would prefer that, but I would have no objection if the House insisted on having an earlier debate. I just suggest it would be a more valuable and productive debate if there could be a clarification of our role before that debate takes place.


Thomas Miller Bell: When is the report expected? This is all involved in the motion under Standing Order 26 which was just put forward.


An hon. Member:: They are all mixed up.


Mr. Speaker:: While the matter is being pondered, the Chair will recognize the hon. member for York South.


SUGGESTED MEETING OF FEDERAL AND PROVINCIAL FIRST MINISTERS ON POSSIBLE SHORTAGE OF OIL SUPPLIES -PRIME MINISTER S POSITION
Mr. David Lewis (York South):: Mr. Speaker, before asking my question may I say I cannot agree with the suggestion of the hon. member for Saint John-Lancaster
Oral Questions
that the motion under Standing Order 26 moved earlier has a connection with the matter he raised.
I want to pose a question to the Prime Minister. Has he received and, if so, has he had time to study a telegram from Premier Barrett of British Columbia urging an early meeting of the first ministers of Canada for the purpose of co-ordinating plans with respect to the shortage, or possible shortage, of oil supplies, as well as plans for conservation and distribution, so that there might be a co-ordinated Canadian energy policy in this perhaps critical period? If the right hon. gentleman has had time to study the telegram, does he intend to call such a meeting of first ministers?


Pierre Elliott Trudeau: I did, indeed, receive such a telegram and I am a little puzzled by it. The subject matter is certainly an urgent one and must be studied. However, I am not sure whether Premier Barrett is aware that such a conference has already been called at the ministerial level and that the Minister of Energy, Mines and Resources has set November 23 as the date. I have not communicated with Premier Barrett on this point, although I did have occasion to talk with him on other matters last week. But on this matter I am not clear whether he wants a meeting of first ministers to supersede this meeting at the ministerial level. If so, my advice would be that it would be preferable to stick to the initiative we have taken of calling a ministerial meeting on November 23 to do all the preliminary work and then, as soon as is necessary thereafter, to call a meeting of first ministers, as was our original plan.


OIL SUPPLIES-POSSIBILITY OF ESTABLISHMENT OF NATIONAL CORPORATION TO DEAL DIRECTLY WITH VENEZUELA
David Lewis: I would assume that Premier Barrett's suggestion arises from the attitude taken by the premier of the neighbouring province of Alberta. In any case, may I ask the Prime Minister the following question. It is true it has been asked of the Minister of Energy, Mines and Resources, but may I put it to him in this way. In view of reports that there may be some cutback in oil supplies from Venezuela, which could affect Canada, and in view of the attitude taken by the government of Venezuela that it cannot control the distribution of its oil supplies because they are mainly in the hands of Exxon, may I ask the Prime Minister whether the cabinet is coming to a conclusion, or how quickly it may come to a conclusion to set up a national petroleum corporation that would be able to deal directly with the government of Venezuela and ensure some security of oil supplies this winter?


Pierre Elliott Trudeau: I am
afraid that at this stage I am not able to agree with the assumption with which the hon. member prefaced his first question. I am not in a position to know what the Premier of Alberta will do but I am still operating on the assumption that the Alberta minister responsible for this particular area of policy will be at the meeting on November 23. If he is not, I do not think this should lead us to the conclusion that we cannot meet in the absence of the minister

Oral Questions
from Alberta. However, it would be much more desirable if the premier did have the minister there.
I am still puzzled about the intent of Premier Barrett's telegram. I hope he is aware that there is a meeting scheduled for November 23; at any rate, I will try to pursue the matter with him. I might add that the Minister of Energy, Mines and Resources is consulting with various provinces on both a bilateral and a multilateral basis, particularly at this time with the ministers and premiers of the eastern provinces.
As to the other question asked by the hon. member, I cannot add to what the Minister of Energy, Mines and Resources has said repeatedly. The subject of a national petroleum company is before the cabinet. It has not yet been decided in any final way. We shall let the House know of the government's decision in the usual manner.


EASTERN CANADA OIL SUPPLY SITUATION-SPECIFIC PLANS FOR EXTENSION OF PIPELINE TO MONTREAL
Mr. Jim Balfour (Regina East):: Mr. Speaker, my question is for the Minister of Energy, Mines and Resources. Having regard to the oil supply situation in eastern Canada, can the minister tell us what specific plans the government has formulated in connection with the Montreal pipeline project which go beyond the general commitment to the project embodied in the announcement of September 4, whether such specific plans were discussed with the premier of Quebec last week, and whether the National Energy Board has been asked to study the project and make a recommendation?


Hon. Donald S. Macdonald (Minister of Energy, Mines and Resources):: The board would deal with that matter in the form of an application, and no application has yet been made. There have been discussions both with Quebec at the official level and with the Interprovincial Pipeline Company with regard to the details of such a pipeline. I cannot say whether or not this matter was discussed last Friday, but it is receiving active attention from the federal agencies concerned as well as other interested parties.


James Balfour: In view of the minister's statement that such a pipeline could deliver 250,000 extra barrels of oil per day to Montreal without any major back-up construction to the wellhead being needed, can the hon. gentleman now be more specific and inform the House whether the government has undertaken any concrete action since September 4 which permitted him to make such a projection?


Donald Stovel Macdonald: Yes, Mr. Speaker. That judgment is based on information from Interprovincial Pipelines.


OIL SUPPLIES-REQUEST FOR EARLY DECISION ON WHETHER NATIONAL CORPORATION TO BE ESTABLISHED TO DEAL DIRECTLY WITH VENEZUELA
David Lewis: Mr. Speaker, I have a supplementary question for the Prime Minister. It seems obvious that it would take some time to set up a national petroleum company or corporation and that it may be

necessary to have such an agency in order to obtain sufficient oil supplies from Venezuela for use in eastern Canada this winter. May I ask the Prime Minister whether he and his colleagues can assure the House that they will come to a conclusion on this matter within the next few days in order that eastern Canada will not face a shortage of supplies because of the failure of the government to reach a decision to set up the necessary agency for that purpose?


Pierre Elliott Trudeau: I am
afraid I cannot agree with the hon. member's logic. As the minister has said a number of times in the House, the existence of such a company is not the only factor which would determine whether the supplies are sufficient or not. There are a number of other factors involved, including direct relations between the government and the governments of the oil-producing nations.


AGRICULTURE
Mr. C. A. Gauthier (Roberval):: Mr. Speaker, I should like to put a question to the Minister of Agriculture.
I should have asked this question last Friday to enable the minister to enlighten the House, but I did not have the opportunity to do so. Did the minister look through the 28th Report on the Farm Improvement Loans Act for the year 1972? If so, would he be willing to say whether the data included in this report date from 1914, as suggested by his parliamentary secretary last Thursday following my intervention?


Hon. E. F. Whelan (Minister of Agriculture):: Those were the figures we were given. If they were not accurate, I will check on them and see that they are rectified.


Charles-Arthur Gauthier: Mr. Speaker, I have a supplementary question.
Is the minister considering taking the necessary steps to better inform his parliamentary secretary?


OIL-MOBILIZATION OF TRUCKS AND RAILWAY TANK CARS TO MOVE FUEL TO DEFICIT AREAS IF REQUIRED
Hon. Alvin Hamilton (Qu'Appelle-Moose Mountain):: Mr. Speaker, my question is to the Minister of Energy, Mines and Resources. At the meeting with the provincial resources ministers on November 23, does the minister plan to put forward the work he has done on collecting or mobilizing trucks and railway tank cars to move fuel from surplus areas to deficit areas this winter?
November 5, 1973


Donald Stovel Macdonald: This question was not originally on the agenda but I would be quite prepared to brief them. We have responded favourably to the suggestion of the premier of Nova Scotia that there might be a meeting of the five eastern provinces on this question. I shall certainly be glad at the November 23 meeting to take the opportunity of giving full information on the present state of supply and any measures to be taken. I should explain that the November 23 meeting is also to prepare for a full scale energy conference for next year and also to deal with the second stage of our mining policy.


OIL SUPPLY-SUGGESTED PROVISION OF ACCELERATED COST WRITE-OFF TO THOSE WHO BUILD LOCAL STORAGE FACILITIES
Francis Alvin George Hamilton: Mr. Speaker, I have a supplementary question which I wish to address to the Minister of Finance. In view of the urgency of the situation we face this winter, would the minister consider, after consultations with his colleagues, announcing that he is prepared in his next budget to introduce a two-year rapid acceleration provision for all those who build storage facilities in local communities?


Hon. John N. Turner (Minister of Finance):: That is a representation that I will certainly consider, Mr. Speaker.


AVAILABILITY OF VENEZUELAN OIL FOR SALE TO POSSIBLE CANADIAN GOVERNMENT CORPORATION
Robert Lorne Stanfield: Mr. Speaker, my supplementary question is for the Minister of Energy, Mines and Resources. May I ask the minister whether there is to his knowledge oil available in Venezuela that the appropriate agency in Venezuela would be prepared to enter into a contract for sale thereof this winter to a government sponsored or government owned energy corporation in Canada?


Donald Stovel Macdonald: Mr. Speaker, the original discussion was with regard to availability of oil following the end of the concessions in Venezuela whenever that might be. Late last week, I think either on Friday or Saturday, there was an indication that Venezuela might be planning to take its royalty in kind, in which case the Venezuelan agency C.V.P. would have oil available. We are pursuing that particular information but at the moment I cannot indicate whether there is any possibility of a contract in the near future.


OIL-SUGGESTED INTERVENTION OF PRIME MINISTER OR ANOTHER MINISTER IN MEETINGS WITH ALBERTA
Mr. Joe Clark (Rocky Mountain):: Mr. Speaker, I have a supplementary question for the Prime Minister. Since the methods followed by the Minister of Energy, Mines and Resources in his dealings with the province of Alberta have led to confrontation on two consecutive occasions, will the Prime Minister advise whether the right hon. gentleman plans to intervene personally in this matter by
Oral Questions
meeting with the premier oi Alberta or using other means, or whether he intends to nominate the Minister of Finance or some other intermediary to help end this atmosphere of confrontation?


Pierre Elliott Trudeau: Mr. Speaker, I am always ready and delighted to meet with the premier of Alberta on any subject, but on this particular one I must assure the House that the entire government is behind the Minister of Energy, Mines and Resources-[DOT]


Some hon. Members:: Hear, hear!


Some hon. Members:: Oh, oh!


Mr. Hellyer:: They are all behind.


Pierre Elliott Trudeau: -comma-in support of a policy that is not unfair to the American people and which only has the effect of returning to the treasury, for the time being, a windfall profit that otherwise would have gone not to the people of Alberta but to the multinational corporations.


Some hon. Members:: Hear, hear!


OIL EXPORT TAX-REPRESENTATIONS TO ALBERTA MINISTERS VIS-A-VIS FEDERAL POLICY
[Stage Direction]
Mt. Joe Clark (Rocky Mountain): I am not quite sure, Mr. Speaker, what is meant by the reference to the American people, but I will let it pass as a fault of geography. May I direct my supplementary question to the Minister of Energy, Mines and Resources. May I ask the minister whether the representations made to ministers of the Alberta government a week ago tonight regarding the export tax differed appreciably from the position that the government announced Thursday night? If so, would the minister explain why the policy differed from the representations?
Donald Stovel Macdonald: Mr. Speaker, we presented to the Alberta ministers the options that the government faced, which basically were the options whether there should be a staged increase in price to February 1 west of the Ottawa Valley line or some variation of that. These options were presented to the ministers, but because they had refused to sanction any action under the price restraint program we arrived at no agreement.


OIL SUPPLIES-ESTIMATE OF POSSIBLE IMPORT SHORTFALL-POSSIBLE NATIONAL MARKETING MECHANISM
Thomas Clement (Tommy) Douglas: I have a supplementary question, Mr. Speaker, to the Minister of Energy, Mines and Resources. In view of the fact the Arab states, particularly Saudi Arabia, have announced a reduction in oil production of 25 per cent for November and an additional 5 per cent in the month of December, and in view of the constant danger that Venezuelan oil may be diverted to the United States, may I ask the minister whether his department has made any estimate of the parameters within which we can anticipate imported oil supplies this winter. Has the minister made any

November 5, 1973
Oral Questions
estimate of what the shortfall will be between the 900,000 barrels a day that we normally require and what we are likely to be getting?


Donald Stovel Macdonald: Not at the moment, Mr. Speaker. As the hon. gentleman knows, the meeting of the Arab states last weekend confirmed their policy that certain states would be embargoed and also confirmed certain policies regarding reduction in production. How that reduction will affect the supply to each of the recipient countries such as Canada is at the moment still to be determined.


Mr. Speaker:: The Chair will recognize the hon. member for Nanaimo-Cowichan-The Islands for a further supplementary, followed by the hon. member for Edmonton Centre, the hon. member for Calgary North and the hon. member for Calgary South.


Thomas Clement (Tommy) Douglas: In view of the minister's statement a few moments ago that the government is pursuing the possibility of dealing with the state oil trading company in Venezuela for any oil that government may take in kind, may I ask the minister what plans he has for marketing such oil in Canada? Does he intend to set up a national marketing mechanism to deal with that oil in order to see that it goes to the areas where it is most needed?


Donald Stovel Macdonald: Mr. Speaker, I do not think that in the short run a national marketing mechanism would be necessary in the sense that I think the government of Canada, through existing agencies, could undertake the responsibility of acquiring the oil and making it available to various refiners that might be short of feed stock. As for the long run, the best agency for doing this is all bound up, of course, in the decision whether or not we will have a national petroleum corporation.


OIL EXPORT TAX-POSITION OF MINISTER OF FINANCE-DISCUSSION BY PRIME MINISTER WITH PREMIER BARRETT
Mr. Steven E. Paproski (Edmonton Centre):: Mr. Speaker, I have a question for the Minister of Finance. Did the Minister of Finance promise at the meeting with Alberta officials that there would be prior consultation before he reversed his field on the export tax on oil?


John Napier Turner: Mr. Speaker, my intervention in the meeting with my colleague and the Alberta ministers was to examine the position of the export tax and particularly the situation of Syncrude.


Mr. Speaker:: Order. I will allow a supplementary to the hon. member for Edmonton Centre and then the Chair will recognize the hon. member for Calgary North.


Steve Eugene Paproski: Mr. Speaker, the Minister of Finance did not answer my question but I will direct my supplementary question to the Prime Minister. In his discussions with Premier Barrett last week did the Prime Minister discuss the Canadian export tax on oil and did the premier approve the measure?


Pierre Elliott Trudeau: That conversation was privileged, Mr. Speaker.


OIL-POSITION OF GOVERNMENT RESPECTING SYNCRUDE DEVELOPMENT-POSSIBLE TAX INCENTIVES
Mr. Eldon M. Woolliams (Calgary North):: Mr. Speaker, I should like to direct a question to the Minister of Energy, Mines and Resources. In view of the cabinet leak to the effect that the government intends to nationalize or is considering nationalizing one of the corporate parties to the Syncrude project, is the minister now in a position to encourage or to discourage the immediate development of the Syncrude project to assure supplies of crude petroleum for all Canadian needs now and in the future? That is the question today; we are talking about supply.


Donald Stovel Macdonald: Mr. Speaker, I should like to confirm a statement made outside the House, namely, that a Globe and Mail report of a proposal to acquire either Gulf or Shell is totally without foundation.


An hon. Member:: Oh yeah?


Donald Stovel Macdonald: Yes. With regard to the Syncrude position, I would point out that it is a rather fundamental matter of taxation policy whether a special change should be made in our taxation law affecting the Syncrude project, and this is a matter that the Department of Finance now has under study.


Eldon Mattison Woolliams: In light of the fact the Minister of Finance's department has this under study, what tax incentives will be given to this project to assure a supply of crude petroleum for Canada and at the same time encourage an immediate labour force of more than 10,000?


David Lewis: It's phony; there is no tax incentive.


Some hon. Members:: Oh, oh!


Mr. Speaker:: Order, please.


Pierre Elliott Trudeau: What is Lincoln telling you?


Mr. Speaker:: Order, please. There seems to be a private verbal confrontation at the other end of the chamber. If that is now completed, perhaps the minister might be allowed to reply to the hon. member's question.


John Napier Turner: Mr. Speaker, both the Minister of Energy, Mines and Resources and I said to the Alberta ministers that it was in the interests of this country that the Syncrude project go forward. The problem is not only how to reconcile the Syncrude project, or the agreement between the consortium and the province of Alberta, with the existing tax laws, but of developing and announcing guidelines for federal tax resources policy. To that effect we are reviewing our position and, indeed, in light of information supplied to the Alberta ministers they are also reviewing their position. I will be meeting with the Syncrude people later this month.
November 5, 1973


Mr. Speaker:: Order, please. I did recognize the hon. member for Calgary South a moment ago and I apologize to him. I will recognize the hon. member for Calgary North on a further supplementary question followed by the hon. member for Calgary South. I will then seek the co-operation of hon. members to try to limit the number of supplementary questions in order that we may have as many questioners as possible before the end of the question period.


Eldon Mattison Woolliams: Mr. Speaker, I will be very brief. I should like to ask the Minister of Finance whether he considers the surtax of $1.90 an incentive that will stimulate and motivate this project and put it on the map so it will go ahead?


OIL-EFFECT OF GOVERNMENT POLICIES ON EXPLORATION AND DEVELOPMENT WITHIN CANADA- TAR SANDS PROJECT
Mr. Peter C. Bawden (Calgary South):: Mr. Speaker, my question is directed to the Minister of Energy, Mines and Resources. In view of the fact the only secure source of oil supply for Canada must come from Canadian oil fields and that Canadian oil reserves at present are down to something in the order of a 12-year life, will the minister say why all of the government's recent policies have aggravated the Canadian energy supply problem and why no consideration has been given to security of future supply by way of stimulating the search for and development of energy reserves in Canada?


Donald Stovel Macdonald: Mr. Speaker, I will not accuse the hon. gentleman of a conflict of interest in the situation, but I would point out that in July and again in discussions the government has had with the governments of both Alberta and Saskatchewan we have pointed out that substantial funds can and will be made available for the purpose of developing non-conventional sources of oil particularly and, in addition, for the development of other sources of oil and natural gas, and it is our intention to have this development by and for Canadians.


Peter Colwell Bawden: Mr. Speaker, I have a supplementary question for the Minister of Energy, Mines and Resources. The minister has made some vague statements about the federal government trying to find ways of directing the $70 million a month that is being creamed from the western provinces into heavy oil development. In view of the fact the National Energy Board projects production from the Alberta tar sands in the amount of some 500,000 barrels a day by 1980, which is an almost impossible target date, will the minister promise that before the end of this year the matter will be concluded so that private enterprise can get on with this job?


Donald Stovel Macdonald: Mr. Speaker, I think it would be desirable to conclude it as soon as possible, and I look forward to early conversations with the government of Alberta in an attempt to nail this down.


Mr. Speaker:: Order, please. The hon. member wishes to ask another supplementary question and I will recognize him for that purpose, but I would seek the co-operation of
Oral Questions
hon. members in making progress. I will recognize the hon. member and then the hon. member for Northwest Territories.


Peter Colwell Bawden: Mr. Speaker, my supplementary to the minister is related to the policy he announced last week. Will he indicate whether it is correct that he was overruled on his proposal to the cabinet-


Some hon. Members:: Order!


Mr. Speaker:: Order, please.


Peter Colwell Bawden: -and that the cabinet-


Some hon. Members:: Order!


Mr. Speaker:: Order, please. I recognize the hon. member for Northwest Territories.


NORTHERN AFFAIRS
Walter (Wally) Firth: Mr. Speaker, in the absence of the Minister for Indian Affairs and Northern Development I should like to direct my question to the right hon. Prime Minister. Is the government aware that the person appointed to head Hire North last year awarded contracts of more than $250,000, without any tenders being called, some to firms in which he himself has an interest, and will the Prime Minister agree to move a motion to refer this matter to an appropriate House committee?


Pierre Elliott Trudeau: Mr. Speaker, I certainly did not understand the question. I was wondering whether the subject "he" to which the hon. member referred was myself or some other person. I am certainly anxious to look at the question when it appears in Hansard and answer it if possible or ask the hon. member to put it on the order paper.


Walter (Wally) Firth: Mr. Speaker, I should like to clarify my question to the right hon. Prime Minister. Is the government aware that the person appointed to head Hire North last year awarded contracts of more than $250,000, without any tenders being called, some to firms in which he, the project manager, has an interest, and will the Prime Minister agree to move a motion to refer this matter to an appropriate House Committee?


Pierre Elliott Trudeau: I thank the hon. member for having clarified the question so far as it concerns myself. I must confess that I am not aware of the answer nor, indeed, of the subject matter. I will take notice of the question and report to the hon. member at a later time.

November 5, 1973
Oral Questions ENERGY


OIL EXPORT TAX-NATURE OF PROJECTS IN WHICH REVENUE TO BE INVESTED
Mr. Gordon Ritchie (Dauphin):: Mr. Speaker, I have a question for the Minister of Energy, Mines and Resources. On Friday last the minister told the House that revenues from the oil export tax would, among other things, be invested in "other projects for the purpose of developing energy resources in Canada". Will he now tell the House whether these projects will be hydroelectric or nuclear? Just what did he have in mind?


Donald Stovel Macdonald: Mr. Speaker, primarily they would be in the hydrocarbon field, but the province of Saskatchewan has indicated a very keen interest in the development of its uranium prospects and may, indeed, elect to have funds applied in that area. We would be very interested in discussing that.


UNEMPLOYMENT INSURANCE COMMISSION
Mr. J. R. Ellis (Hastings):: Mr. Speaker, the heat has been on in respect of more than one subject this weekend. I should like to ask the Minister of Manpower and Immigration whether he will not reconsider his statement of last Thursday and ask for a public inquiry into the Unemployment Insurance Commission administration budget?


Hon. Robert K. Andras (Minister of Manpower and Immigration):: Mr. Speaker, as I indicated last Thursday, the administration budget of the Unemployment Insurance Commission was referred to the Estimates Committees earlier this year for study in detail. That administration budget as forecast then, will be met, and it will be reviewable when we go again before the standing committee of the House. Since I have great confidence in the chairman and the Unemployment Insurance Commission, I would not think it would be necessary to review that again except in the ordinary course of events.


EFFECT OF GOVERNMENT ANNOUNCEMENTS ON OIL SHARE TRADING-REQUEST FOR STUDY
Mr. Sinclair Stevens (York-Simcoe):: Mr. Speaker, my question is directed to the Minister of Consumer and Corporate Affairs. In view of the huge profits made in the trading of oil shares last week, in the neighbourhood of $1 million in Imperial Oil shares alone, and in view of the fact this is the third time in two months the government's handling of an energy announcement has caused erratic oil share trading on Canadian and United States markets, resulting in windfall profits to astute traders, has the minister requested that a study be made of the trading in such shares to determine whether this has been the result of leaks or illfounded statements from the government?


Herbert Eser (Herb) Gray: Mr. Speaker, so far this parliament has not given the government the authority to regulate securities; this is primarily a provincial matter. My own department is engaged in developing proposals for a federal role in the area, and I am glad to see what appears to be support from my hon. friend in this regard.


Sinclair McKnight Stevens: Mr. Speaker, my supplementary question is directed to the Minister of Energy, Mines and Resources. In view of the fact that past handling of energy announcements has created erratic price fluctuations, affording professional traders an opportunity to make fortunes in the trading of oil shares, will the minister assure the House that the manner in which future announcements are conducted will lend itself to more orderly marketing? Specifically, how will he correct such unfortunate mistakes in the handling of government announcements?


Donald Stovel Macdonald: Mr. Speaker, I cannot guarantee that the decisions of investors will be fully informed, but I would agree with the hon. gentleman that in general we should try to make announcements at least at a time when there is no trading on the market.


MANPOWER
Jack Marshall: Mr. Speaker, my question is for the Minister of Manpower and Immigration. In view of the fact that the number of applications coming in from communities in connection with the Local Initiatives Program and the fact that the allocation of funds which has been announced does not meet even a small portion of projects as well as the fact this will destroy initiative and destroy the objectives of the program, is the minister considering or willing to consider increasing the amount available under this program?


Robert Knight Andras: Mr. Speaker, I fail to understand why that particular aspect is destructive of initiative or the objectives or criteria of LIP. If any further funds are considered, an announcement will be made in the usual manner.


Jack Marshall: In view of the fact that advisory committees are having difficulties with the number of applications and they will have to turn down the greater portion of them, would the minister look at it from this light and consider increasing the funds?


Robert Knight Andras: I suppose this represents the outstanding success of the program generally.


Some hon. Members:: Hear, hear!


Robert Knight Andras: Incredible though it may be, each year that we have announced it and no matter how much money we
November 5, 1973

have allocated to it, we have only been able to handle one-third of the applications that have been submitted.


EXTERNAL AFFAIRS
Mr. Donald W. Munro (Esquimalt-Saanich):: Mr. Speaker, I should like to return to the matter of the evaluation team in the Middle East and ask the Secretary of State for External Affairs to tell the House whether the evaluation team, consisting of Canadian armed services personnel, has been charged with evaluating the entire logistical requirement of UNEF, that is, determining what will be required by both Canada and Poland, or just that part which Canada will be expected to play in logistics?


Mitchell William Sharp: Mr. Speaker, I am happy to have this question put to me because I think it requires clarification. Probably the most difficult and most important job facing the UN Emergency Force is the logistics arrangements, to get the men into the field, organize signals, airlifts and so on. We have been entrusted with the job of evaluating the whole process and therefore, while we hope that we will be joined by some colleagues from Poland, essentially the job will devolve upon Canadian shoulders. With all due deference to the right hon. member for Prince Albert, may I say that I think this is an important function.


Donald W. Munro: It is not clear whether Poland is to join in this evaluation process. I wonder if the minister would be able to tell the House what reaction Poland has to the assignment of Canadians to this role?


Mitchell William Sharp: As the hon. gentleman knows from his own experience, Canada is the most experienced and best equipped group in the world outside of the great powers to undertake this kind of job, and I think it is a great tribute to Canada that the Secretary General called upon us to fulfil this function.


Some hon. Members:: Oh, oh!


Some hon. Members:: Hear, hear!


John George Diefenbaker: A great tribute to Canada which the country does not want.


ECONOMIC COUNCIL OF CANADA
Paul Theodore Hellyer: Mr. Speaker, my question is directed to the Minister of Finance. Is the minister in a position to report on the case of Michael C. McCracken which I raised last Thursday, and can he at the same time advise the House whether Mr. McCracken has undertaken
Oral Questions
work in a consulting capacity for any other government department or departments?


John Napier Turner: Mr. Speaker, since the Economic Council of Canada reports to the Prime Minister, I have had discussions with him and understand that an inquiry has been undertaken by his office.


IMMIGRATION
[Stage Direction]
mr. McCracken-disclosure of connection with

Paul Theodore Hellyer: I have a supplementary question for the Minister of Manpower and Immigration of which I gave him notice. Can the minister advise the House whether or not Mr. McCracken's service with the United States army and the Central Intelligence Agency was shown on his application for landed immigrant status and, if so, was any effort made to determine if and when his connection with the CIA had been terminated?


Robert Knight Andras: Mr. Speaker, I appreciate the hon. member sending me notice of his question just before the question period. Traditionally, information contained on personal applications for landed immigrants for permanent residence in Canada is considered to be a matter of confidentiality. However, I can tell my hon. friend from my own information that, as is done in all cases of applications for landed immigrant status, a complete check was done on Mr. McCracken and he was found to meet all immigration requirements.


Mr. Speaker:: The Chair will recognize the hon. member for Gander-Twillingate who has a supplementary question, then the hon. member for Vancouver Kingsway, and then call orders of the day.


APPREHENSION OF ASIANS AT GANDER AIRPORT-POSSIBLE CONNECTION WITH MUNICH BASED OPERATION
Mr. John Lundrigan (Gander-Twillingate):: Mr. Speaker, my question is related to the one by the hon. member for Trinity to the Minister of Manpower and Immigration. Were a number of Asian persons designated as visitors to Canada apprehended at the Gander International Airport over the weekend and again today? Has an investigation taken place, and was there any connection between this particular apprehension and a Munich-based operation?


Robert Knight Andras: Mr. Speaker, I have no information whatsoever as to the latter part of the hon. member's comments. I can tell him that the six persons apprehended at Gander were deemed not to be bona fide non-immigrants. An inquiry was ordered and they were ordered deported on the basis that the evidence presented indicated they were not here genuinely as visitors.

November 5, 1973
Oral Questions


Mr. Speaker:: The hon. member for Vancouver
Kingsway.


Paul Theodore Hellyer: Mr. Speaker, I rise on a question of privilege.


Mr. Speaker:: I apologize to the hon. member for Vancouver Kingsway but the hon. member for Trinity is rising on a question of privilege.


Paul Theodore Hellyer: My question of privilege is this. Today we have had an assurance from the minister that Mr. McCracken's file was given the usual routine examination and that it was satisfactory in all respects. Yet some of us have been advised privately by a member of the minister's department that in fact information concerning Mr. McCracken's background was not shown on his application and that no attempt was made to have the RCMP do any kind of security screening whatsoever. In view of this, I feel the minister has misled us and I would appreciate it if he would make available Mr. McCracken's file to the appropriate parliamentary committee so that we can examine it and determine the facts.


Robert Knight Andras: Mr. Speaker, I indicated to the hon. member that my information was that Mr. McCracken's application had passed the test of immigration requirements. I have no reason to believe that this is not accurate information. Certainly, I will personally review the file. After reviewing it, if there is any discrepancy whatsoever I will be glad to respond to the hon. member.


Mrs. Grace  Maclrmis@Vancouver Kingsway: Mr. Speaker, my question is for the Minister of National Health and Welfare. Since he is not in the House today I would like to defer the question until tomorrow, but perhaps you would like to give my spot to the hon. member for Selkirk.


Mr. Speaker:: I would be delighted to recognize him but we have gone beyond the time allocated for oral questions. I will note those hon. members who did not have an opportunity to put their questions and supplementaries-


Some hon. Members:: Hear, hear!


Mr. Speaker:: -and see that they are given an opportunity for priority tomorrow, if that can be arranged. Orders of the day.


BUSINESS OF THE HOUSE
Mr. Knowles (Winnipeg North Centre):: Mr. Speaker, I rise on a point of order. Standing Order 2 (3) indicates certain days on which the House shall not meet. However, there seems to be some uncertainty as to whether the reference in that standing order to Remembrance Day applies this year in view of the fact that Remembrance Day falls on Sunday. There have been some discussions about this and I wonder whether, so that everyone will know where we stand, the government House leader could clear it up by seeking an appropriate House order.


Mr. MacEachen:: Mr. Speaker, if the Standing Order were to be observed, the House would normally sit on Monday, November 12. But because, in certain cases, hon. members may have made arrangements to be in their ridings and will be travelling to observe Remembrance Day, it would be agreeable to the government if the House order were adopted providing that the House will not sit on Monday, November 12.


Thomas Miller Bell: We agree to this suggestion, especially since it was one of our former members, the hon. member for Winnipeg South Centre, Mr. Gordon Churchill, who fought long and hard to ensure that Remembrance Day be included as one of our holidays.


Some hon. Members:: Hear, hear!
e (1510)


Mr. Speaker:: Hon. members have heard the suggestion made by the President of the Privy Council. Is this agreed and so ordered?


Some hon. Members:: Agreed.



GOVERNMENT ORDERS

[Stage Direction]
[ English]

[Stage Direction]
The House proceeded to the consideration of Bill C-132, to provide for the review and assessment of acquisitions of control of Canadian business enterprises by certain persons and of the establishment of new businesses in Canada by certain persons, as reported (with amendments) from the Standing Committee on Finance, Trade and Economic Affairs.
Mr. Speaker:: Order, please. As hon. members know, there are a great number of motions to be considered at this point, and in the hours and days ahead. Motion No. 1 is in the name of the hon. member for Yorkton-Melville (Mr. Nystrom). I will read that motion in a moment and express a few thoughts.
I might mention that procedurally speaking, from the point of view of the Chair in any event, there does not appear to be anything seriously wrong with motions Nos. 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12 and 13, but the Chair has some reservations in relation to motions Nos. 1 and 14.
Perhaps the Chair might read motion No. 1, and then seek the advice of hon. members as to whether it is procedurally acceptable. If the Chair can be convinced that there is no serious or insurmountable procedural difficulty the motion would then be formally put and debated by hon. members. The motion proposed by the Hon. member for Yorkton-Melville (Mr. Nystrom) reads as follows:
November 5, 1973

That Bill C-132, An Act to provide for the review and assessment of acquisitions of control of Canadian business enterprises by certain persons and of the establishment of new businesses in Canada by certain persons, be amended in Sub-clause 2(1) by changing the period at the end of line 9 at page 2 to a comma and by adding immediately thereafter the following words:
"and that it is also expedient to establish a means by which established firms that are foreign owned may have an increase in the value of their assets or sales provided they make available to the Canadian public that portion of their total equity which is proportionate to the said growth, such increases in assets or sales to be submitted to the Agency established under this Act at regular five-year intervals, for the preceding five-year period, the equity ratio to be based on average experience of the firm over the preceding twenty years or its time of incorporation in Canada, whichever is shorter, and the first option to purchase equity to be provided to the Canada Development Corporation."
As hon. members will appreciate, there is a suspicion that this is a new proposal. Clause 2 purports to set out the purposes of the bill. It is somewhat in the form of a preamble, and the hon. member for Yorkton-Melville proposes in this motion, by way of an amendment to the bill, an additional purpose, or suggests an additional purpose. This purpose, at least at first sight, appears to be quite beyond the other purposes and the general purport of the bill. This is why the Chair, reviewing the matter and studying this motion closely, has had some reservations, but I would be pleased to hear the views of hon. members in relation to the proposed motion.


Stanley Howard Knowles: Mr. Speaker, since you have just indicated that you are prepared to accept as procedurally admissible 12 out of the 14 amendments proposed at this stage, it is a bit hoggish for us to suggest that we want a bit more, but we do regard motion No. 1 as very important, and we hope that Your Honour will reconsider your position on it.
We were aware that you would probably suspect that this is the addition of something that is not in the bill, but it is our view that it is really one of those additions that simply make more clear what we think is implied in this kind of legislation. In other words, if we are going to have a Foreign Investment Review Act, surely there has to be some understanding as to what happens to kinds of corporations that would normally be dealt with under a grandfather clause. That is what the purpose of this motion is, namely, to make it clear how the legislation would apply to corporations that already have certain assets in the country.
We contend that it is not introducing something brand new, something that is not implied in the legislation, but rather that it seeks to clarify a point which is called for but which is not spelled out clearly anywhere in the bill itself.
We feel that with this kind of language in what Your Honour has called the preamble it will help to make the rest of the bill clear. Therefore, because in our view it is that kind of amendment, we hope that Your Honour will see fit to permit its introduction.


John Mercer Reid: Mr. Speaker, it seems to me that this amendment is definitely out of order on the basis of the citations available in Beauchesne and May. I should like to quote
Foreign Investment Act
citation 406(a) at page 285 of Beauchesne's Fourth Edition as follows:
Amendments are out of order if they are
(a) irrelevant to the bill, or beyond its scope, governed by or
dependent upon amendments already negatived;
Is this an amendment beyond the scope of the bill? I suggest that a close reading of clause 2(1) of the bill would indicate that this motion proposes a new purpose, so new in fact that there is no provision in the bill to make it effective even if accepted by Your Honour and the House of Commons. It is a new proposition; it is different, and it does violate the principle of the bill which was accepted on second reading and studied in committee.
Relevant quotations can be taken from May as well, but I think the point is crystal clear that this is a new principle which the hon. member is attempting to carry into the existing structure of the bill. It has no relevance to material already in the bill, and therefore should be ruled out of order on those grounds.


Thomas Miller Bell: Mr. Speaker, we do not take a hard position on this amendment. It is very innocuous, but we do express the hope that in some way Your Honour will find it possible to allow some latitude for general debate on the various amendments because this bill has been in committee a considerable length of time, and at some point hon. members will want to express their general views about the bill, which has been considerably changed in committee.


Stanley Howard Knowles: That can be done on third reading.


Mr. Nystrom:: Mr. Speaker, I am by no means an expert on the rules or procedure, but I do want to reply to a brief comment made by the parliamentary secretary. It has been said that the purpose of the legislation is to review new investment and expansion into other areas. This motion refers to expansion of existing business enterprises.
The parliamentary secretary made the point that even if this amendment were accepted and carried, the bill as it is now written does not contain any provision to carry out the intention of the amendment. I suggest he is wrong on that point because from the wording of the amendment it can be seen that we are talking about expansion in related areas, about an increase in the assets of firms about which we are concerned and which, under the terms of this amendment, would be submitted for the consideration of the agency established under this legislation. That agency would then apply the same rules as are applicable to other firms that come under the bill as presented by the Minister of Industry, Trade and Commerce (Mr. Gillespie). In other words, the same rules that are in Bill C-132 and that are applicable to the kinds of firms already mentioned in the bill would come into effect if our grandfather clause is very important if we are going to be serious about foreign ownership in Canada.


Mr. Speaker:: I thank hon. members for their guidance in relation to motion No. 1 standing in the name of the hon. member for Yorkton-Melville. I am afraid that hon. members, while they have sought to help the Chair, have not clearly resolved the difficulty for me. Referring to the first point made by the hon. member for Saint John-Lancaster

November 5, 1973
Foreign Investment Act
(Mr. Bell), I would think looking at motion No. 2 and those immediately following, these motions might allow some latitude in debate. I am sure the Chair would not want to limit hon. members too closely to the contents of the motion, particularly in view of the fact that motion No. 2 would provide an opportunity for some latitude in debate. I would find it very difficult procedurally to accept motion No. 1 standing in the name of the hon. member for Yorkton-Melville (Mr. Nystrom). It is, in my opinion outside the scope of the bill. Without quoting at length or quoting at all the citations I would refer hon. members to May's 18th edition, page 508, which suggests which matters are acceptable and which ones should be ruled out.
The point made by the hon. Parliamentary Secretary to the President of the Privy Council (Mr. Reid) is well taken when he refers to the fact that even if this clause were put to the House, debated and carried, it would be very difficult to reconcile it with the rest of the bill. There would be nothing that I could see, after studying the bill, that would actually give effect to this new purpose of the bill. There would then be required additional legislation or additional amendments. I suggest that, in itself, is an indication that the proposed motion is beyond the scope of the bill.
This being taken into account, and agreeing with hon. members that there should be no attempt to limit too strictly the scope of the debate when we reach the next motion, I would hope that hon. members would agree with the Chair that we would at this point put the second motion. My suggestion would also be that motions Nos. 2, 3, 4, 5 and 6 should be considered at the same time but disposed of separately. If hon. members agree, I believe they are essentially the same matter, so that we will put No. 2, and Nos. 2, 3, 4, 5 and 6 are before the House for debate; eventually, all motions would be disposed of separately by separate votes.
I would suggest to hon. members, and perhaps to House leaders and representatives of the parties that have moved motions which will call for votes, that it might be a little difficult, if the House is to divide on all such motions, to have them all at the same time. It would be better if these votes could be broken up into maybe two or three voting sessions rather than one lengthy voting session on all of the motions that come to the House for decision.
The hon. member for Central Nova (Mr. MacKay) moves motion No. 2 which reads as follows:
That Bill C-132, An act to provide for the review and assessment of acquisitions of control of Canadian business enterprises by certain persons and of the establishment of new businesses in Canada by certain persons, be amended in sub-clause 2(2) by striking out lines 38 to 44 at page 2 and lines 1 and 2 at page 3 and substituting the following:
"dustry or industries in Canada;
(e)	the compatibility of the acquisition or establishment with national industrial and economic policies; and
(f)	the compatibility of the acquisition or establishment with industrial and economic policies enunciated by the government or legislature of a province in which the enterprise is carried on or the new business is proposed to be carried on.".

I assume hon. members would not direct the Chair to put the other four motions to which I referred, that is No. 3 in the name of the hon. member for Crowfoot (Mr. Horner), No. 4 in the name of the hon. member for Yorkton-Melville (Mr. Nystrom) and Nos. 5 and 6 in the name of the hon. member for Central Nova (Mr. MacKay).


Stanley Howard Knowles: Mr. Speaker, on that point, we certainly do not expect you to put them if it means reading all these motions; that would be almost making a speech. However, since the debate is to range over motions Nos. 2, 3, 4, 5 and 6 I think that they should all be on the record at this point so that if anybody reads this Hansard he will know what the debate is all about. I suggest that they be put on the record as if Your Honour had put them.


Mr. Speaker:: Is this agreed?


Some hon. Members:: Agreed.
[Editor's Note: The motions referred to are as follows:]
No. 3.-That Bill C-132, An Act to provide for the review and assessment of acquisitions of control of Canadian business enterprises by certain persons and of the establishment of new businesses in Canada by certain persons, be amended in sub-paragraph 5(l)(c)(i) by deleting "$250,000" in line 21 at page 17 and substituting therefor:

No. 4.-That Bill C-132, An act to provide for the review and assessment of acquisitions of control of Canadian business enterprises by certain persons and of the establishment of new businesses in Canada by certain persons, be amended in sub-paragraph 5(1) (c) (ii) by deleting "$3,000,000" in line 27 at page 17 and substituting therefor:

No. 5.-That Bill C-132, An Act to provide for the review and assessment of acquisitions of control of Canadian business enterprises by certain persons and of the establishment of new businesses in Canada by certain persons, be amended by deleting Subclause 7(3), lines 23 to 28 at page 18, and substituting the following:
"(3) The minister shall make available to the agency the services of officers who are representative of each region of Canada, including such officers from within the department of the government of Canada over which he presides as he may designate for the purpose.
(4) In any case where a review or assessment of a proposed or actual investment is likely to affect significantly a province or provinces, a recommendation to the minister thereon shall be submitted by a panel of officers of whom a majority shall be representative of such province or provinces."
No. 6.-That Bill C-132, An act to provide for the review and assessment of acquisitions of control of Canadian business enterprises by certain persons and of the establishment of new businesses in Canada by certain persons, be amended in Clause 9 by deleting line 32 at page 20 and substituting the following:
"a copy of the notice shall be sent by the agency forthwith by registered mail to the province or provinces likely to be significantly affected by the proposed or actual investment of which the notice relates and".


Mr. Speaker:: The hon. member for Central Nova (Mr. MacKay).


Mr. Elmer M. MacKay (Central Nova):: Mr. Speaker, certainly, there can be no basic disagreement with the proposition that the government of Canada should be making an effort to minimize foreign domination of our economy. The issue of foreign control of Canada's econo-
November 5, 1973

my is one of the oldest and probably one of the most continuously discussed topics and has been, for the most part, ever since confederation. We are one of the few nations in our peer group of countries which has no policy in this regard.
In the last ten years, a succession of Liberal governments did little to attack the issue actively. In fact, they seemed curiously reluctant even to implement tax and fiscal policies which would allow Canadians to compete on equal terms in their own country with outside interests. To this very day, foreign interests can operate in Canada on more favourable terms than Canadians in some respects. Now, at last, this government has moved and has done so in its usual fashion, typical of its philosophy, that is negatively, excessively bureaucratic and poorly organized.
In our last parliament, an attempt to deal with foreign ownership died on the order paper and now, once more, parliament has the opportunity to come to grips with this issue which touches every Canadian in one way or another. It goes, almost without saying, that for a Confederation like ours, a nation with diverse needs and capabilities, massive in size and rich in geographic differences, a consensus for dealing with foreign investment policy is much more difficult to achieve than for countries with a more unitary outlook, different political system, compact area and advanced state of development. In short, before being excessively critical of this government's present efforts, I want to say in all fairness that I appreciate fully the difficulties inherent in this sort of legislation.
Most of the provinces of Canada have reason to be concerned about the effect of controls on foreign investments, which is one of the primary reasons for the various amendments standing in my name. These concerns, I think it is fair to say, are reflected more vigorously in the poorer provinces because the poorer a province is, paradoxically the more it has to lose by restraining foreign investment capital.
Let us not forget, also, that a major department of government was set up to deal with the problems of poor regions, namely, the Department of Regional Economic Expansion. Even leaving aside constitutional issues, which are also implicit in this type of legislation, the provincial governments are fearful of the practical consequences of having provincial economies and regional economic development impeded as a result of direction from Ottawa with regard to the investment potential in their provinces by potential investors from the world community. The more fortunate provinces in Canada, and the central region in particular, also have their own particular reasons for concern over foreign investment; but they can afford to be more statesmanlike about the issue since they already have built the sort of economic structure that is the envy of less fortunate provinces in Confederation.
Premier Hatfield of New Brunswick, appearing before the Standing Committee on Finance, Trade and Economic Affairs this summer, speaking on behalf of his government and as a spokesman for the Atlantic area, was very emphatic in his concerns. He said, in part, at that time, and I quote;
Foreign Investment Act
I have been talking interchangeably about New Brunswick and the maritime region in what I have said because the problems that one province has in this region are to be found in the other two.
In the light of this, I had discussions with my colleagues, Premier Campbell of Prince Edward Island and Premier Regan of Nova Scotia, at the time of the maritime premiers meeting in Fredericton last Thursday and Friday. They authorized me to say that they, too, shared my deep concern that this Foreign Investment Review Act would be detrimental to the expansion of industrial development in the whole maritime region.
I asked the premier at that time whether he subscribed to the necessity, to some degree at least, of regulating foreign investment in this country and he replied that he had not been convinced that the government of Canada did not have the power at the present time to control foreign investment if they chose to use it. "I suspect", he said, "what they might lack is policy development". By that I assume he meant a positive proposal of tax and fiscal incentives to promote positively Canadian expansion-and the capability of holding our own in relation to outsiders' interests.
Premier Hatfield also expressed concern that this type of legislation could become an obstacle to the progress of DREE policies and DREE purposes and would exacerbate the long delays in getting a decision from DREE. The former minister in charge of DREE is quoted in the recent past, in reply to a request that DREE grants be restricted to Canadian-owned corporations, as saying, "I do not want to make economic philosophy on the backs of underdeveloped regions". This is a clear indication that he, at least, was keenly aware of the relationship between development vis-a-vis the foreign investment issue.
A view expressed by a spokesman for the government of Ontario was as follows;
As an underlying theme to the Ontario position, we believe that the primary objective of the proposed review process should not be to restrict foreign investment per se, but to ensure that future investments by foreign corporations make an effective contribution to the achievement of national economic and social objectives.
The position taken by the government of the province of Saskatchewan is contrary to that expressed by Premier Hatfield and an excerpt from their presentation is as follows:
There seems to be a notion that one reason why foreign investment shouldn't be tampered with, is because it may retard efforts to promote regional development programmes. This is a myth. But even Prime Minister Trudeau was spreading this doctrine for a time.
The Saskatchewan government then goes on to say that it wishes to emphasize that it is not just a case of placing a restriction, or a controlling rein on foreign investment that is needed, but rather the development of a positive policy that can serve as a framework for future Canadian development. While I cannot agree with much of the position put forward by the government of Saskatchewan, I think this latter excerpt from their presentation is one that is reasonable and certainly is one with which all Canadians can identify.
The Atlantic Provinces Economic Council has been actively concerned with the issue of foreign ownership. They believe that the question of foreign investment
7522

November 5, 1973
Foreign Investment Act
cannot be regarded in isolation, and should not be looked at as a problem in itself but, rather, should be considered in the context of a new national policy, or as the former federal minister of industry, trade and commerce phrased it, of industrial strategy that takes into account the divergent needs of the various regions of Canada.
It is interesting to put on the record the results of a recent select survey, done by the Atlantic Provinces Economic Council which put the following proposition to its membership:
Indicate the importance which should be given by provincial development corporations, in assessing firms:
Ownership within Canada;
Ownership within the Atlantic provinces
Ownership within the province.
To summarize briefly, practically all who replied indicated either directly or by implication that Canadian ownership was important. I wish to indicate emphatically that the people of our underdeveloped regions are not concerned merely about the grave issue of foreign domination of our economy, important though that is. As well, they are concerned about their personal welfare. Their experience in dealing with the federal government has given rise to real concern with respect to the implementation of this type of legislation. They will be concerned unless they are given a maximum chance for input and a consultative function.
However, I want to say again, that this legislation, particularly if the government will be reasonable and consider amendments to modify its approach, is at least a beginning, and to that extent the government is to be commended. Let me quote an old Chinese proverb: "Longest journey begin with one small step"; and another, "A bad beginning sometimes makes a good ending."
There certainly is no doubt that there is a need for a new policy for national development of Canada. A proper policy would help to fill a vacuum which certainly now exists, and this government will have to take a great many positive approaches to stimulate Canadian development to supplement the rather negative, unimaginative and bureaucratic approach exemplified by this legislation.
The position assumed by the government of Quebec with reference to this legislation is interesting indeed. This province has always been very conscientious in protecting provincial prerogatives, while at the same time extremely sensitive in claiming its full rights under Canadian confederation. In the presentation from Quebec it was stated that, while it was not the intention to make the distribution of powers between the two levels of government in economic matters the sole criterion for evaluating Bill C-132, the government of Quebec nevertheless considered that this bill related, to a field of jurisdiction which largely entailed responsibilities which it had, in fact, assumed to date. "Is it not a fact," said the Quebec presentation, "that Quebec's power in the development of natural resources, regional development, transportation and communications, would be directly affected by the proposed legislation?" Quebec, therefore, considered it inopportune for the federal government to give itself jurisdiction by legislation governing foreign investment
as such, without formally acknowledging the need to secure the agreement of the provinces concerned.
But even disregarding this question of the timeliness of such federal intervention, the Quebec position went on, it remains that, to be acceptable to Quebec, any bill should explicitly recognize the regional economies and respect provincial jurisdictions. It is with such considerations in mind that some amendments standing in my name will be brought forward. Once more we see manifested the very justifiable concern for provincial consultation and input, as put forward by Quebec, which has always played an active role in this regard.
For example, within their own jurisdiction, consider if you will the concern manifested by provinces over the ownership of land by foreign interests. This is, of course, outside the purview of the legislation we are discussing today. But it is interesting to note that provinces in eastern Canada have already taken steps to control land use by outside interests and are concerned philosophically about this whole question.
For my part, Mr. Speaker, I would prefer to see foreign control of our economy regulated and controlled by a more positive approach. Instead of approaching this matter by the introduction of an act entitled "The Foreign Investment Review Act", the government, to my mind, should approach this matter by introducing legislation which might be called, instead, "The Canadian Development Incentive Act". This would be more in keeping with the aspirations of Canadians in the latter part of the twentieth century and would be better oriented towards world trade patterns. Rather than see us take a negative approach, I would prefer seeing us adopt selective tax policies to favour Canadians and Canadian companies. These would include a more flexible policy of tax credits and capital gains as well as other tax modifications, in order to give Canadians an advantage in their own land and not fetter them in competing with strangers in their midst.
It is shocking to see that, despite attempts to cure the inequities from which Canadians suffer, compared to foreigners, in doing business in their own country, this government refqses to press on with the removal of these paradoxes while''it the same time seeking to restrict foreign investment. Surely, one policy must complement the other. There is not much use in locking the door and leaving the window open, or vice versa. I. H. Asper, a noted tax authority as well as a power in the Liberal Party of this country-


An hon. Member:: Some power.


Elmer MacIntosh MacKay: An hon. member says, "Some power". Nevertheless, he is a prominent politician, and certainly, he is a very good tax consultant. He pointed out emphatically how a recent federal court decision exposes Canada's paradoxical tax policy towards its people. The effect of the decision was to give, under our existing tax law, much better treatment to associated companies whose only inter-corporate link is with a non-Canadian company, to which the Canadian tax act does not apply.
Mr. Asper comments as follows:
The law is now inequitable. If an American family business structured in this fashion pays approximately half the tax that would be paid by a Canadian family operation set up in the same

November 5, 1973

corporate manner, obviously a change is needed. That change should not take the form of wiping out the beneficial treatment for the United States citizens but rather by extending it to Canadian families.
The reason for proposing that solution to the inequity is that the present tax law already imposed unwarranted and harsh tax discrimination and disadvantages upon Canadian families who are in business together. And that is not in Canada's best longterm social and economic interest.
I think we all agree with that proposition.
Again, in the interests of fairness, I want to point out that some recent tax law changes have had the effect of fostering Canadian ownership. For example, tax legislation requiring that any Canadian-owned private corporation being taxed at the lower rate of 25% on the first $400,000 of profits must retroactively repay the federal government the benefits received from the use of the lower rate if it is subsequently sold to non-residents provides an example of what can be done.
In this regard, I commend the government for having taken that step.
Canada is now in a better position, as are Canadian financial institutions, to invest domestic capital to invest Canadian savings, in the development of our nation.
In the past, and to some extent at present, Canadians have been and are curiously reluctant to invest in the development of their country. To their everlasting and extreme discredit, a succession of Canadian governments have not been providing our people with the proper incentives for this kind of investment.
The position taken by the Toronto Stock Exchange on investment policies is a very sensible one. While furthering the principles implicit in lessening the effects on Canada's economy of foreign investment, the Toronto Stock Exchange makes the following points. They say that our existing financial institutions have emerged as a powerful instrument for collecting Canadian savings and, in recent years, Canadians have shown a willingness to invest in new Canadian issues. They go on to say:
We are confident that with the maturity of our financial institutions, the expanding savings base of Canadians and the increased maturity and liquidity of our capital markets, Canada has reached the threshold of where it can be more selective in the way in which non-resident capital has been permitted to come into our country. Canadians can be much more prudent about the price which they pay for non-resident capital. We do not rule out, however, the desirability of having non-resident capital flowing into our country provided it is on terms which are consistent with the objectives of Canada and its citizens.
This, Mr. Speaker, is the common theme advanced by people having many different ideas and basic philosophies on government and business. The common theme is that there must be an attitude fostered in this country by governments, business and the average Canadian that we, as Canadians, are entitled to the primary benefits of our initiative, our natural resources and our heritage. However, we can find a useful place in the development of our nation for foreign investment capital.
The Toronto Stock Exchange makes a very interesting and pertinent distinction between the types of foreign investment most common. They say it is of vital importance to establish a clear difference between portfolio investment and direct investment. True, portfolio investment is purely passive in relation to the question of
Foreign Investment Act
control and management. Direct investment is the use of shares for the purpose of control and active involvement in the management of the affairs of the corporation.
Certainly, it should become apparent that we should try as much as possible to reduce the equity investment in proportion to that of passive portfolio type investments when we are looking at the whole issue of the types of foreign investment that should be encouraged. Most of all, it must be apparent that at any time when a province suffers from the effects of Bill C-132 we, as Canadians, in other parts of the nation and the federal government in particular, through its jurisdictional capacity, must make available capital to replace the equivalent of that which has been lost by this policy of advancing a truly Canadian economy. It is not right to expect any one part of Canada to bear more than its fair burden in achieving this very laudable objective.
I have every hope that this government is politically aware, and has a sufficient amount of the milk of human kindness embodied in it for it, although I doubt that when I see how they have been dealing with some of our western provinces. However, I sincerely hope they will keep in mind the absolute necessity of making alternate sources of capital available, if it turns out that the sources of capital from abroad diminish to an alarming extent.
The first motion in my name, and those which will be discussed later, are designed to encourage more input and consultative procedures as far as the provinces are concerned, to deal with this type of legislation. Judging from what has happened in the past, and what is happening at the present time, it is obvious that the provinces have every right to be concerned about the way the central government has been dealing with their economic aspirations.
I will be very interested to hear the Minister of Regional Economic Expansion (Mr. Jamieson) speak in this debate. As the former Minister of Industry, Trade and Commerce mentioned, there is an obvious link between the attempts being made by this government to foster the economic advancement of the poorer regions of this country, in the process of which they spend hundreds of millions of dollars, and the other side of the coin, which is to try to promote the advancement of Canada's economy by placing greater control of it in the hands of Canadians. In doing so, the government would regulate the type of capital that is available for this purpose. The two policies must surely be considered together.
I trust the minister will be flexible in his approach and sympathetic toward the concerns manifested by the provinces. I hope he will not begrudge the provinces the opportunity to have more input, but will make it possible for them to exert greater influence in considering basic matters of policy, which ultimately remains in his hands. I trust the minister will immediately send to the provinces the applications referred to in this act, advising them of people who wish to come into this country to start a business, or who otherwise fall within the purview of this legislation. He should immediately let the provinces know about these so they will not hear about them later and, in a spirit of confrontation, wonder what was done before they were brought into the picture.
26635-45 .J

November 5, 1973
Foreign Investment Act
If the minister and the government follow this course, I am sure the legislation will be successful. He will then have the co-operation and understanding of all Canadians, something that is absolutely essential if this very important piece of legislation is to work.


Lorne Edmund Nystrom: Mr. Speaker, the debate at report stage at this time deals with the first six amendments, as announced by you a few minutes ago. Before I get into those amendments, I want to say by way of general comment, that our party supports the bill before us, Bill C-132. We do not say that with any great enthusiasm because we do not think the bill is strong enough. It should be a lot stronger.
There are two or three basic fallacies in the bill before us. One is that it is a very powerful piece of legislation. With regard to those things to which the screening agency applies, it could be very powerful. If the minister in charge and the chairman of that agency are concerned, it can be very effective with regard to takeovers. At the same time, if there is a minister who does not give a darn about foreign investments, there is no mandatory provision in the bill. Almost any takeover could occur.
This legislation can be very tough on one hand and very weak on the other. Frankly speaking, one reason I want to see the bill passed is that when there are foreign takeovers and new investment, we in this party can ask the minister whether it is of significant benefit to Canada. If not, we then have the minister and the government on the spot. This gives us a lever in our campaign with regard to the patriation of the economy in Canada.
The second shortcoming of the bill is that it pertains only to takeovers, new investment and the expansion of an existing firm into a non-related area. It says nothing about the expansion of an existing firm into a related area. The more I look at this, the more I am concerned. Initially, I thought the bill would cover perhaps two-thirds of foreign activity in our country. I no longer think this is so. My reading of the bill suggests that it will only cover 10 or 20 per cent of foreign activity in this country. In others words, between 80 and 90 per cent of foreign expansion will probably go unscreened, even though the legislation might be administered in a tough and competent manner.
The Gray Report contains, on page 478, a table showing the number of takeovers in 1968, which is described as a typical year. In that year, through takeovers, foreign ownership increased by $170 million. This represented 5 per cent of the total increase of foreign ownership in Canada in the year 1968-5 per cent of the over-all foreign expansion in the Canadian economy achieved through takeovers. Dealing with new investment in 1968, the same report stated that only $80 million was attributable to direct new investment from outside our borders. This figure represents roughly 2 V4 per cent of over-all foreign activity in this country. If we add the takeovers and the new investment, we find that in 1968 they amounted to only 7V4 per cent of total foreign activity, and this is in a supposedly normal year. But even if it were 15 or 20 per cent, a great deal of leeway is still being left to other types of foreign expansion.

The third area the minister wants to screen is that which concerns the expansion of existing firms into nonrelated activities. At first, this sounds a useful measure. It means, for example, that if INCO wants to move the hotel business as well as the nickel business, the project is automatically screened. But how many industries will, in fact, be covered? Take, for example, a company such as ITT. Someone unfamiliar with the operations of this telegraph and telephone corporation may say: If it expands into an unrelated area the proposal will automatically be screened. But my research shows that ITT controls 58 different companies in Canada.
So, what is an unrelated area? The bill defines a company by the products with which it is associated, but ITT is involved with hundreds, maybe thousands of products. So if it wishes to take over, for example, a toilet tissue firm, it could probably find a company within the ambit of its organization which is producing products sufficiently similar to enable it to expand into making toilet tissue without having to submit to screening under the legislation. If this is the case, how much of the total of foreign expansion does the bill actually cover? Take Imperial Oil, the giant of the oil industry in Canada. If it expands into an unrelated area, the proposal is automatically screened. But Imperial Oil is involved through its various subsidiai-ries in all kinds of industries in this country. For example, it owns a company called Polytwine which manufactures rope. So Imperial Oil could buy a rope company through this subsidiary without the necessity for screening because it would be an expansion into a related area. I should like the minister to comment on some of these points I am raising when he speaks later in the debate.
Take another example, the Gulf Oil Company. If Gulf wished to expand into the toothpaste business, my understanding is that it could do so without being screened because it has a subsidiary company currently engaged in this business and it could expand its activities through the use of that subsidiary. Take Bell Canada. Bell Canada controls Northern Electric and Northern Electric in turn controls Microsystems. If Bell Canada wished to expand in this latter field it could probably do so through its Microsystems subsidiary. All these corporations are integrated backward from the retail level to the raw materials level.
I am concerned that the bill before us would, apparently, result in the screening of only 10 per cent or 20 per cent of the foreign activity in our country. The corporations will be able to get around these provisions in all sorts of ways. This is why earlier today we sought to move what we call a grandfather clause which called for the screening of existing foreign ownership in Canada. We were very reasonable. We said that screening should be post facto-that where an existing company had expanded over a five-year period by, say, 20 per cent, it must make 20 per cent of its common shares available to the Canadian people, with the first option going to the Canadian Development Corporation. To my mind, this would be a significant move, because we would then be reaching existing firms which the bill before us does not reach at all.
Specifically, we are dealing with five or six amendments during the first part of the debate on the report stage. The first is the amendment by the hon. member for Central
November5, 1973

Nova (Mr. MacKay). Basically, he proposes to give the provinces more power and influence over decisions reached by the screening agency. There is considerable merit in this amendment but I believe the bill as currently worded gives sufficient power to the provinces. It already provides that the minister must take into consideration the economic situation of the various provinces, and this is probably as far as we need go toward meeting the object which the amendment seeks to achieve. One fear which arises in my mind is that if the provinces are given too much power, too great an input, the bill could be rendered totally useless.
For example, if the Province of Alberta were given too much influence over decision-making regarding foreign ownership of the oil industry, Ottawa would be hamstrung when it came to the making of decisions affecting the oil industry. Claims have been made by members of the Conservative party, particularly by those from Alberta, that if we were to restrict the inflow of capital into this country we would be restricting growth, and that this, in turn, would mean fewer jobs for Canadians. This assertion does not hold water, because there are more funds flowing out of Canada today than are flowing into the country in terms of investment. I should like to quote from a paper prepared by a well-known Canadian Mel Hurtig on this very topic. Page 38 of this paper reads, in part:
It is ironic that we should live in a nation which believes it must have foreign capital in order to survive, although during the entire decade of the 1960s foreign firms operating in Canada sent out of Canada in interest, dividends, royalty fees, management fees, etc. over $2 billion more than all the capital they imported.
Other reports state that of all the foreign activity in Canada, all the investment every year, only approximately 6 per cent involves new money coming in from outside; the other 94 per cent is provided from retained earnings, profits kept in Canada and funds borrowed from Canadian banks or financial institutions. So, I do not think much credence can be given to the assertion that Canada needs vast amounts of foreign capital. What is happening is that we are selling out our country and using our own money in the process.
There are a number of other interesting statistics which might well be borne in mind when considering whether foreign investment really helps this country. If we look at United States investments in countries around the globe in 1967 we find that the total figure involved was $19.4 billion. What did this mean to United States entrepreneurs? The inflow to the United States by way of dividends, royalties, management fees and so on amounted to $33.3 billion. In Latin America alone-an area that has been in the news often during the last couple of years-the Americans are by no means the generous, benevolent souls that some people try to make them out to be. They invested $1.7 billion between 1960 and 1967 and got a return on that investment of $8.8 billion. So you can see, Mr. Speaker, they are extracting more through their investments than they are actually putting into the country.
This is why I say that the time has now come-indeed, it has long since passed-when the argument that any tough laws are going to exclude necessary capital is no longer relevant. We do have investment money in this country.
Foreign Investment Act
We are a net exporter of capital. It is time we had stronger laws so that these Canadian funds are used to develop Canada. We need all kinds of legislative provisions to this end, certainly many more than are contained in the bill before us today. We need a stronger grandfather clause, a sector by sector approach, controls on banks and lending institutions, so that they do not use their money to finance foreign multinational corporations which control our economy and so Canadian funds are not invested abroad.
The third amendment is moved by the hon. member for Crowfoot (Mr. Horner), and our party is clearly opposed to it. What he seeks to do is to weaken the intent of the bill. The bill will automatically screen an acquisition if the gross assets of the company or corporation concerned are over $250,000 or if the gross revenues are over $3 million. The hon. member for Crowfoot wants to raise the minimum from $250,000 to $500,000, which would, in effect, exclude literally hundreds of transactions from the screening and review process conducted by the agency to be established.
The fourth amendment is in my own name, and it seeks to do the very opposite. We want to bring down the threshold rate from the $3 million gross revenue figure to $1.5 million. We are doing this for a number of reasons. First of all, it is often the small takeovers that are important in a foreign country assuming prominence in a domestic economy. Very often publishing agencies, consulting firms and some stock brokerage firms have very small assets, but their impact on the economy or on the culture of the country can be very significant. Take, for example, the case of an advertising firm. Perhaps an advertising firm will have quite small assets, but its gross revenue and its impact on the country may be very large. Unless the threshold rate is lowered, as we suggest, from $3 million to $1.5 million gross revenue, we will exclude from the screening process a lot of advertising firms, consulting agencies and so on. Foreign concerns often gain a lot of control in key sectors of the economy by gobbling up one small firm after another.
Then, amendment No. 5 is in the name of the hon. member for Central Nova (Mr. MacKay). Again, there are some proposals in the amendment that are creditable. I hope that when the Minister of Industry, Trade and Commerce (.Mr. Gillespie) appoints people to the screening agency he will make sure they reflect the opinions of all regions of the country. In view of the way the amendment is worded, I question what the hon. member means by "representative". Does he mean that the provinces will appoint someone or that the minister will choose someone from a certain region?
In any event, it is the second part of the fifth amendment to which I object. According to my reading of it, if a decision is to be made that affects a certain region, the people making the decision should comprise a majority of members from the region concerned. If this amendment is passed, a decision about the oil industry in Alberta would have to be made by a group the majority of whom came from Alberta. I think the amendment would weaken what the bill is supposed to be trying to do, which is to develop a national policy on foreign ownership in Canada. We do not want to balkanize this country by pitting one region

November 5, 1973
Foreign Investment Act
against another as each vies for foreign funds or fights over different policies.
Amendment No. 6, which is also in the name of the hon. member for Central Nova, seeks to provide information to the province when an acquisition is to be screened. I think that is reasonable and that our party may support it. I do not know why the minister cannot support it, and I think he should take another look at it. What the hon. member for Central Nova is trying to do is to ensure that provinces are notified when a particular acquisition is screened, which I think should be the case. The provinces should be provided with the maximum amount of information regarding the activities of the screening agency in their area; I think all hon. members would agree that is necessary.
With that, Mr. Speaker, I appeal to hon. members that we try to strengthen the bill as we go along, not weaken it. As I have said, we have enough foreign capital in this country to develop Canada; indeed, we are a net exporter of capital. As the former member for Duvernay often said in this House, through tax incentives to the mining industry and other industries we encourage the development of capital intensive industries to the detriment of processing and manufacturing in Canada. It is in processing and manufacturing industries that the jobs are found, not in the natural resource industries.
One good example of this is the mining industry, or in gas, oil or petroleum refining. Indeed, there are many examples in western Canada, such as in the food and agricultural products industry, where instead of processing products on the Prairies we ship them out to be processed elsewhere. The multinational corporations also have a tremendous impact on the economic policies of this country and of any other country in which they operate. In today's energy crisis we see a company like Standard Oil of New Jersey or Exxon making the decision as to where oil should be supplied, since they control the majority of the oil fields in Venezuela and certain other countries. We also see the huge multinationals making decisions that jeopardize jobs in various regions of this country.
For example, the hon. member for Nickel Belt (Mr. Rodriguez) has often spoken in this House of how decisions of the International Nickel Company affect the economy of his area. Quite often the company cuts back in its plant at Sudbury because it wants to divert funds and expertise to other parts of the world, such as Caledonia, Indonesia and Guatemala, as was the case recently. As a result a number of people were laid off in Sudbury, despite the fact that the International Nickel Company of Canada supplies about 55 per cent of the nickel exported to non-Communist countries and in 1970 made a net profit in Canada of $102 million. In other words, they used some of the profit made in Canada to expand elsewhere, to open new plants in other countries and exploit the people and resources of those countries.
We suggest it is about time we gained control of our economy and firm control of all industry in this country in the fields of natural resources, finance and others involved in the development of this nation. I suggest that we have

enough capital to do so. We are now exporting capital and we should stop our banks from selling us out. This can be done in the same way as it was done by Sweden and Mexico, through the adoption of foreign ownership laws. The United States was also for some time, dominated by other countries, but sometime ago their authorities there took steps to assure the control of their own economy, and today they dominate many other countries around the world.


Mr. John Rodriguez (Nickel Belt):: Mr. Speaker, this bill intrigues me. While I am not too enamoured with it, as I do not think it goes far enough or does enough to satisfy me personally, it did antagonize many Conservative members of the finance committee. I feel if it can antagonize such wealthy bluebloods it should have something for which I can find some support.
The hon. member for Central Nova (Mr. MacKay) suggested this bill would give the federal government the power to screen foreign investments, and as a result could be detrimental to the poorer regions of Canada. Indeed, I have travelled around Canada somewhat in the past 12 years. When I was in the eastern area recently, I found there was no screening of foreign investment and I did not note any improvement in the standard of living of those people there. Indeed, it might be said that most of those provinces have suffered from Conservative administrations during that period of time. I can argue very vociferously that any kind of foreign investment control or screening does not interfere in any way with investment. Let me make it clear before going any further that I do not necessarily accept the view that because one is a Canadian capitalist as opposed to a foreign capitalist he is more acceptable to me. I do not go along with that view.
Having set the record straight for what I am going to say from here on, let me point out that four countries in Latin America, Chile, Columbia, Ecuador and Peru, two years ago approved a common investment guide in respect of foreign capital and technology. This involved very stringent controls on foreign investment in these countries. The Council of the Americas, a very powerful business group, ranted and raved against these restrictions for the very same reasons pointed out by the hon. member for Central Nova, namely that these restrictions would be to the disadvantage of underdeveloped areas. In spite of all these arguments, the United States businessman is still seeking South American resources in a very forceful way, and is exploiting them at reduced profits. A foreign investment in these countries in the areas of mining, as well as oil exploration and extracting, cannot continue for a period exceeding 20 years, when foreign companies no longer own the resources and eventual control must pass to domestic companies.
The very problem we are faced with today in respect of energy has largely resulted because of the fact that the Government of Canada has never moved toward the takeover of our natural resources, or toward Canadian control over them. We have left, to the whim and fancy of foreign producers and international cartels, the job of providing our people with oil. In the field of manufacturing, these Latin American countries have also followed the policy that foreign control enterprises must permit at least 57 per cent capital participation by domestic investors, and until
November 5, 1973

that target is reached all foreign operation must be controlled by national agencies.
One of our problems is that investments taking place in Canada are largely being financed by multinational corporations over which governments have no control. We in Canada have had a difficult time in establishing some kind of control and, indeed, some kind of identity. There is little wonder that we are faced with the situation as it is today. This is a vast country with greatly varying regional differences. We have within our nation many distinct people, cultures and traditions. In our graceful growth from a child of the great British Empire, we have unintentionally become a handmaiden to multinational cartels.
The question facing us today is not necessarily to be posed in a positive manner, but perhaps in a very negative way. Do we, as a nation, still have enough independence to control the economic destiny of Canada? To answer such a question, we must look at several factors: the amount of our economy already owned by foreign investors, particularly those in the United States; what will be the needs of the United States in the future and, recognizing a crisis, will we as a nation be able to respond to that crisis and how will we respond?
Let us look, first of all, at how much of Canada we actually own and how much is owned by foreign interests. In 1948, about 42 per cent of all Canadian manufacturing was owned by non-residents. By 1968, that figure had increased to 58.1 per cent. More than three-quarters of that foreign control is held in the United States, and that proportion is increasing every year. Not coincidentally, the richest and fastest growing sectors of the Canadian economy are controlled by foreign investment, and again in most cases three quarters of that control rests in the hands of our neighbour to the south.
For instance, we own 94 per cent of agriculture, but 99 per cent of our booming petroleum and petroleum products industry is foreign controlled. Primary metals are 55 per cent foreign owned; mining is 67 per cent foreign owned; machinery 72 per cent, chemical products 82 per cent and the list goes on. Here in Canada foreign investment controls 58 per cent of our wholesale trade, 69 per cent of our retail trade, 57 per cent of our credit agencies, 60 per cent of our paper and allied industries, 81 per cent of our public utilities and 71 per cent of our investment companies. In those areas affecting our cultural life the figures are equally ominous, with 95 per cent of our book publishing being taken from Canadian control and 86 per cent of our national pastime, that is NHL hockey, no longer Canadian owned.
In 1968, non-resident corporations accounted for only 3 per cent of all Canadian firms in terms of numbers, but they controlled 27 per cent of all assets, made 35 per cent of all sales and cleared 41 per cent of all profits. I suggest this is because foreign ownership has a stranglehold on our most profitable and potential companies.
Ironically, we are in an extensive way financing our own takeover. As Professor Kari Levitt of McGill University in her book "Silent Surrender" pointed out:
The acquisition of control by U.S. companies over the commodity-producing sectors of the Canadian economy has largely been financed from corporate savings derived from the sale of Canadian resources, extracted and processed by Canadian labour, or from
Foreign Investment Act
the sale of products of branch-plant manufacturing businesses to Canadian consumers at tariff protected prices.
In other words, it is not United States money that is being used to expand our economy, it is Canadian money manipulated by the United States. I should like to give an explicit example of such manipulation, and this is by no means an isolated example. It is an example that is revealing of the kind of attitude and action which must be stopped if we are to ever regain our independence.
My story is about a fellow named John Shaheen who is a New York financier. He intended to operate in the eastern part of Canada, in the have-not area. Shaheen, a capitalist in the true sense of the word, developed certain friendships with others of his class, while in the process of building his own personal financial empire. One of those friends was the ex-premier of Newfoundland, Joey Smallwood. Smallwood approached Shaheen with a project to build a huge refinery and later a petrochemical complex at a little town in Newfoundland called Come-By-Chance. The refinery would cost at least $155 million to build, and $30 million of that was borrowed by the province of Newfoundland to lend to Shaheen. The other $125 million was to be put up by a group of British banks and secured by a first mortgage on the property. Shaheen, in the meantime, would put up $10 million and about $3 million in development costs. The federal government is to provide a wharf at a minimum cost of $16 million, to be paid for out of usage fees. Therefore, the province of Newfoundland, hardly a rich province to begin with, has put up more than double the expenditure of Shaheen. But will the refinery be owned by Newfoundland? No indeed. It will be built, managed and owned by a series of Crown corporations, which are in turn run by the Newfoundland Refining Company which is a wholly owned subsidiary of Shaheen Natural Resources.
After all the financial manipulations, Shaheen Natural Resources will have the option to purchase the Crown corporation that owns the refinery for a nominal fee of $1,800. Then, it must pay the province 5 per cent of the net profits until the original $10 million has been paid, after which the refinery will belong outright to the New York company. What is the risk? If the project fails, Shaheen will simply not exercise his option to purchase; if it succeeds, he will own, for a mere original investment of $30 million, a complex worth $155 million, paid for out of its own operating profits and made possible by the aid of our Canadian federal and provincial governments. The federal government would also allow the company to write off 100 per cent of the refinery costs as depreciation any time during the first eight years, or in effect would give them a five or six year tax holiday. That is the kind of socialism to which I am opposed. It is socialism for the elite, and free enterprise would be preferable for the workers.
I have said that such situations are not isolated, and indeed they are not. Who then is at fault? Should we blame John Shaheen, a publicly avowed American moneymaker for taking advantage of our gullibility, or should we lay the blame squarely on the shoulders of many of our politicians who, though never campaigning on the issue of Canadian ownership and protection, quietly and behind the scenes not only go along with the sell-out but in fact

November 5, 1973
Foreign Investment Act
assist in the financing of that sell-out? Thus far, the Canadian public has, by its silence, agreed to the wholesale take-over of our resources. In many cases, we were owned before we knew it, for the profit makers, Canadian, American or others, know no boundaries and recognize no imaginary lines on the map. They are multinational in scope.
It is interesting to note that the amendments that are before us deal with the matter of letting the provinces have some kind of veto power or they must agree to the take-over or agree to the reasoning process before such a process can apply. I think that certainly would be a backward step. We see, for example, that in many areas the provincial governments have refused to put forward any kind of decisive legislation in the area of foreign ownership. It seems to me that the responsibility is in the federal government's lap to give an example of the kind of legislation which would protect and bring back under the control of Canadian people their interests which are now controlled in the whole field by foreigners. If we cannot decide in this country how our resources are to be distributed, how they are to be used and conserved, it seems to me that we are doomed.
Indeed, just thinking about that brings back to my mind a verse from Julius Caesar, spoken by Brutus, which reads as follows:
There is a tide in the affairs of men
Which taken at the flood leads on to fortune;
Omitted, all the voyage of their life
Is bound in shallows and in miseries.
On such a full sea are we now afloat,
And we must take the current when it serves,
Or lose our ventures.
Indeed, while this bill will not ensure that we will not lose our ventures, I hope that it might be a foot in the door. I hope that one day when our party, the NDP, sits on the government benches over there we will get the kind of legislation that will not permit these foreign capitalists or Canadian capitalists to take advantage of Canadians.


Paul Theodore Hellyer: Mr. Speaker, there is no doubt that Bill C-132 is intended to do something about the growing problem of Canadian participation in the ownership and control of industrial and resource development. Unfortunately, it will fall far short of achieving that objective. Rather than addressing itself to the positive measures necessary to enable and encourage Canadians to participate more fully, it is largely negative in character. It is subject to many deficiencies and, in its present form, raises the spectre of continuing confrontation between federal and provincial administrations. Its potential can only be realized if it is accepted for what it is: a temporary dike to stem the tide of foreign take-overs in the short run in order to permit the permanent installations and power generating positive programs necessary to enable Canadians to play a more active, aggressive and effective role in their economy. We must not be complacent. Bill C-132, by giving the appearance that something is being done, must not provide a smokescreen for continued government inaction and inertia on the creative front.
The Standing Committee on Finance, Trade and Economic Affairs has subjected the bill to a minute scrutiny.

To assist it in its work, a number of representative Canadian individuals, corporations and organizations, including several provinces, presented their views. These were most helpful, and I would be negligent if I did not congratulate the witnesses who appeared before us for the high quality of their submissions and the extraordinary amount of thoughtful consideration that they had given to the subject matter and to the technicalities of the bill itself. I will make no attempt to enumerate all of the principal points raised or to comment on them individually. A few reservations were raised with sufficient regularity, however, that a brief discussion might be helpful.
A number of witnesses suggested that the bill provided too much discretionary governmental intrusion into economic processes in the private sector. It was argued that the interference was both unnecessary and detrimental. The extra governmental intrusion in business affairs is self-evident. The suggestion that no action was required, however, was not supported. No evidence was presented to the committee to show that the trend toward foreign take-overs and an increasing level of foreign domination of the Canadian economy would either be abated or reversed on the present basis. This was one of the inherent weaknesses in several submissions where the contention was made that either no problem exists or that to the extent that it exists, it will right itself automatically, and was not supported by factual or statistical evidence.
It was also suggested that the bill is so strongly biased against foreign investment that it would damage Canadian economic prospects. Quite obviously, the extent to which this is true will depend entirely on the willingness and ability of Canadians to fill any void that may be created. Large new capital investments are required in Canada on a scale well in excess of previous experience. To the extent that the necessary savings can be generated in Canada and then funnelled into the necessary development, no detrimental effect will occur. If we are unable to meet the challenge then, of course, our economic prospects will be affected. Interestingly enough, it is in many cases the individuals who are most concerned about the effects of the bill who should be giving the most leadership and taking the aggressive initiative necessary to prove that their fears were unfounded.
It was also suggested that the bill places a particularly onerous burden on small business whose resources are already strained to the limit in reporting to the government. We share this concern. The government can go a long way toward alleviating these fears by printing guidelines which would let small business know exactly where it stands and, to the maximum extent possible, exempt it from routine scrutiny except in those sectors of the economy where failure to do so would be detrimental to the public interest. If the government does not act in this area at the outset, all of the officers of the Industrial Bank and Development agency will wind up being clerks, couriers and corporate babysitters instead of entrepreneurial sparkplugs.
One of the most frequently heard suggestions was that the concept of "significant benefit" should be replaced by a test of "detriment" or "prejudice". A considerable
November 5, 1973

amount of discussion revolved around this point. Experience in other countries, including Australia, was cited. Theoretically the choice of words would make a substantial difference. In practice, however, I doubt very much that this would be the case. I still believe that the policy, personality and outlook of the government and its administrators will be far more important than the choice of words. Some of my friends would find significant benefit in almost any foreign investment. Others would find it difficult to believe that significant benefit to Canada could ever occur, and would so rule. I have no doubt that, in practice, the usual Canadian compromise will prevail. As the ultimate limitation on the interpretation of the act is political it would appear to us that the actual choice of words, in this instance, is not important enough to argue.
It was further suggested that the bill is negative and discriminatory, and that more could be achieved by providing positive incentives to Canadians to invest in Canadian enterprises than by placing obstacles in the path of foreign investment. Strictly speaking, Mr. Speaker, this is quite correct.
The bill is negative and discriminatory. More could be achieved by providing positive incentives to Canadians to invest in Canadian enterprises. But as I stated earlier, Mr. Speaker, until those positive measures are in situ, it may be expedient to have a temporary dike behind which the more positive and permanent structures can be built. The idea that the positive measures are in the long run far more important is enthusiastically and unreservedly supported. I will return to this subject in a few minutes and discuss some of the steps which, in our opinion, should be undertaken at once.
Finally, Mr. Speaker, we were told that the bill creates a new area of conflict between the provinces and the federal government. Beyond doubt this is the greatest weakness in the bill and one which must be corrected before it is read a third time.
The Premier of New Brunswick, speaking as a representative of the Atlantic area, was against the bill. He feared that the federal government would make decisions which would not reflect the best interests of the Atlantic provinces and take their needs and aspirations fully into account.
Officials speaking on behalf of the government of Quebec stated their grave reservations about federal intrusion into an area which they had considered primarily provincial in nature. They suggested that the federal government should not be able to veto development plans supported by the province.
The governments of Saskatchewan and Ontario both indicated their general support of the principle of Bill C-132, but expressed reservations about specific provisions. The province of Saskatchewan questioned the discretionary powers of the minister and was concerned that the recommendations will be arbitrary and judgmental. They also were anxious to know how the provinces would be involved in the process of assessment.
Ontario's reservations were similar. They felt that the federal government should provide the province in which the foreign investment is proposed with a copy of the notification and any additional information submitted by
Foreign Investment Act
the foreign investor, and that the province, in its turn, should have full opportunity to submit its views on proposed investments.
In our opinion these reservations are too serious to be ignored and must be taken into account. It is for this reason that my colleague, the hon. member for Central Nova (Mr. MacKay), has placed a number of amendments on the order paper. Motions Nos. 5 and 6 are of cardinal importance in that they are specifically designed to assist in meeting the objections and concerns of provincial governments.
No. 6 specifically requires that a copy of any notice in respect of an investment significantly affecting a province or provinces be sent forthwith, by registered mail, to the province or provinces. This would go a long way toward the avoidance of misunderstandings and confrontations based on lack of early communication. The provinces will know from the start what is being proposed, and will have time to prepare their submissions and do the investigation necessary to have a full and meaningful input.
The motion listed as No. 5 is the complementary amendment. It requires that the minister, in establishing a panel of officers to work with the Commissioner, will choose people from inside and outside his own department who are representative in every respect of all the regions of Canada. The Commissioner then, in any case where a province or provinces may be significantly affected, will draw from that pool of officers a panel where the majority of members will represent the region significantly affected.
This proposal falls far short of the provincial veto which has been suggested by some as being a prerequisite. While we have come to the conclusion that a provincial veto would make the entire bill inoperative, and therefore cannot be supported if the bill is to be of any significance whatsoever, the requirement to have recommendations to the minister made by people whose hearts and experience reflect the needs and aspirations of the region most directly affected, will guarantee that the feelings of all parts of Canada will be taken into account and not just the so-called Ottawa point of view.
The spokesman for the NDP indicated that this would be going too far in the direction of provincial participation and might lead to balkanization. I would think that that is not a correct interpretation. As a matter of fact, I am surprised that that hon. member did not insist that the recommendation reflect the point of view of the province or provinces concerned. He should realize that this is a recommendation to the minister and not a decision in itself. It is ultimately the minister who recommends to the Governor in Council, and the Governor in Council that takes the decision. If in some instances a recommendation made by a panel of officers representing a specific part of the country represents more the aspect and the points of view of that part of the country, there is no obligation on the minister to accept the recommendation. If he feels so strongly that the national interest is being prejudiced, he can override the recommendation because he has the ultimate responsibility. It seems fundamental that in this process of making recommendations to the minister, the provincial or regional point of view be pre-eminent. In the past this was the point of view that was often neglected.
7530

November 5, 1973
Foreign Investment Act
I cannot overstress the importance that is attached to these two amendments. Certainly, in the present context in Canada, they are absolutely essential. We have witnessed a growing tendency toward confrontation between Ottawa and the provinces. Recent examples involving the Minister of Energy, Mines and Resources (Mr. Macdonald), and his relationship with the province of Alberta in particular, underline the gravity of the situation. Federalism cannot survive this kind of unilateral back-of-the-hand approach on the part of the federal government. It is all the more annoying when it follows by only a few weeks a conference designed to convince the provinces, and the western provinces in particular, that Ottawa really cares about their views and wants to work with them in a co-operative and harmonious way. The provinces do not trust the federal government sufficiently to turn over to it, without reservation, so much arbitrary decision-making power. Those of us from all parts of Canada, but in particular representatives from the Atlantic provinces and the western provinces, have a solemn obligation to ensure that the provincial point of view is heard and that the provincial need is taken fully into account.
I should like to return now to the positive alternative which in the long run is far more significant in meeting the objective than the bill now before us. This was pointed out time and time again by witnesses giving evidence to the committee. It reflects the viewpoint not only of a number of business organizations, some energetic and imaginative individuals such as Messrs. Lee, Frank, Topping, Sinclair and others, but also that of the Canadian Labour Congress which decried the lack of an industrial strategy for Canada. The Minister of Industry, Trade and Commerce (Mr. Gillespie) may feel that a master blueprint is not the answer, but certainly he should be capable of giving us something more coherent and comprehensive than the ad hocery to which we have become accustomed. Of the seven or eight industries in which he claims we have industrial strategies, his contention is not supported by evidence in more than one or two cases.
The Progressive Conservative Party strongly believes that we must undertake a number of positive initiatives which will take full advantage of the Canadian potential, and give to Canadians individually the maximum range of choice as well as the maximum benefit from their efforts. I would like to repeat, briefly, the five steps that I outlined at the end of my speech on second reading of the bill.
First, Mr. Speaker, we have to get our economy much closer to its potential curve than has been the case in recent months and years. Admittedly, the growth rate this year has increased, but we are now informed that it is not sustainable and that next year we can anticipate a cutback. It is alarming to be told that we are at, or near, our potential yet we still have a ridiculously high level of unemployment in Canada. Rather than attack the root problem, the government is making excuses and trying to change the location of the goal post. Instead of analyzing the situation logically and trying to achieve a level of unemployment of between 3'A per cent and 4 per cent- which by any reasonable standard is still excessive-the government is trying to condition us to get used to levels in excess of 5 per cent. By repeating over and over again

that 5 per cent or above unemployment should be considered normal due to structural changes in our economy- whatever that might be-they expect us to believe it. Already they have had some success, and a number of professional economists and editorial writers have absorbed the new conventional wisdom as pronounced by the government and its apologists. This technique, which was so well perfected in another regime in the 1930's, should not go unchallenged. We can do better than that and if the present government is not capable of it, it should resign and let someone else with higher standards have a chance.
Of course, there are shortages of skills in some areas, Mr. Speaker. This is admitted. But there are also hundreds of thousands of people who are unemployed, and in most cases looking for work. The fact that for many of them the jobs being offered do not give sufficient incentive over and above unemployment insurance and welfare, has been verified many times. Even the Minister of National Health and Welfare (Mr. Lalonde) stated this well-known truth in one of his recent speeches. He did not take the next logical step which was to propose that something be done about it. This inertia has reached epidemic proportions amongst his cabinet colleagues.
Two things should be self-evident, Mr. Speaker, If we want to encourage people to leave the ranks of the unemployed and to enter the labour force, there must be an incentive for them to do so. Bluntly stated, that means they must be paid more, after deductions and fringe benefits, for working than they get for not working. Second, if demand is to be maintained at a high level so that jobs will be available for people wanting to work and for new entrants to the labour force, it is absolutely obvious that an incomes policy is necessary to stop the wage-price spiral on the more affluent side of our economy which is pushing costs and prices up well in excess of productivity.
The Canadian Manufacturers Association, in one of its sillier policy pronouncements, has just advised us that wage-price controls would treat the symptoms and not the major causes of inflation. What naivete! A recent settlement in the construction industry in Calgary provided for a 32 per cent increase in wages, including fringe benefits, over a two-year period. That, Mr. Speaker, is not a symptom of inflation but, along with rising government expenditures and taxes, is a major cause of inflation.
Economic policies devised to reach and maintain our productive potential are fundamental, Mr. Speaker. The additional output does not need to reflect extra tin cans and useless consumption but rather the potential for the solution of our real problems of poverty, slums, pollution control, urban transportation, housing and, in the context of our discussion today, the savings necessary to enable Canadians to participate more fully in the ownership and control of their own industrial resource assets.
Step number two, Mr. Speaker, would be the introduction of tax and other laws designed to encourage Canadians to save in support of Canadian entrepreneurship. We do not have to consume all of our extra production; we can convert an increasing proportion to capital in order to enable us to own a greater share of our productive capacity. Imaginative proposals are required and a number have been made, including one put forward by my leader during
November 5, 1973

the last election campaign. It is most important to small business and would enable friends, relatives, employees and others to participate and support our young and aggressive risktakers. Certainly, to maintain and encourage the development of pools of risk capital, a Progressive Conservative government would take a hard look at our tax laws. While the capital gains tax was long overdue, Mr. Speaker-


Mr. Speaker:: Order, please. I regret that I have to interrupt the hon. member, but the time allotted under the terms of the Standing Order appears to have expired. The hon. member can continue with the unanimous consent of the House.


Some hon. Members:: Agreed.


Paul Theodore Hellyer: Thank you, Mr. Speaker. While the capital gains tax was long overdue, the taxation of inflationary increments is confiscation rather than taxation and should not be allowed.
Arrangements should be worked out with the provinces whereby small and medium-sized family businesses could be continued without the necessity of crisis liquidation for purposes of death duties in respect of the shares of a principal shareholder. Many other changes in the tax law would be effected to give Canadians an equal or better opportunity to participate in their own industrial and resource development.
Step number 3 would be a massive increase in the extent of research and development undertaken in Canada. We must learn from our neighbours that modern technology requires massive public investment and cannot be left to chance or to the marketplace alone particularly when many of our industries are owned by foreigners. In 1967, only 18 per cent of research and development spending by Canadian firms was financed from public funds; in the United States, 53 per cent of research and development spending by private firms was government financed while comparable figures for the United Kingdom and France were 35 per cent and 42 per cent respectively.
The areas in which we could usefully increase our energies is legion. One of the most topical, however, is in the energy field. The technology associated with the extraction of oil from the tar sands in Saskatchewan, Alberta and the territories is in its infancy. Vast sums are required to improve techniques. It is not only essential that this money be spent, but also that the results be in the public domain so that Canada is not held at ransom by any single company or group of companies. The techniques for burning low grade coal without the present unacceptable levels of air pollution should be explored. A visit to Hong Kong a couple of years ago convinced me that their technology in this area was ahead of ours.
Then, there is the whole vast area of development of power sources other than the burning of fossil fuels. Much additional research needs to be done to capitalize on present achievement in the field of atomic power. We made an excellent start but now we are not pressing our advantage as vigorously as we should. Nor do we let the world know what we are doing. Comments by visiting
Foreign Investment Act
members of the European community last week showed an abysmal ignorance of the performance of heavy water moderated atomic reactors. Then, there remains the exploration of other power sources such as tidal, solar, fusion, etc. We have the brains and the incentive to explore the potential in all of these areas. But so far our most characteristic achievement is foot dragging. Few, if any, countries of the world could profit more by a deliberate, calculated program of pure and, equally important from the Canadian standpoint, applied research.
Step number 4 is the development of more flexible financial institutions. Significant progress has been made in recent years but much remains to be done. Not only do we have to encourage Canadians to save enough to meet their own capital requirements, we have to have the channels by which these savings can be directed to those opportunities and areas where they are needed. The reluctance of provincial governments in east and west to endorse this bill is proof positive that they are convinced that Canadian financial institutions are not yet organized in a way that meets their financial requirements. If Bill C-132 is to have any success at all we must have the capability to meet, internally, any capital need which would otherwise have been filled from outside Canada. Until that is the case, dissatisfaction and dissension will persist.
More flexibility is needed at the lower and upper ends of the scale in particular. Small entrepreneurs have great difficulty in obtaining the funds they need. The same is true of the giant ventures involving tens or hundreds of millions of dollars. A really adequate capital market must be able to meet both needs promptly and unequivocally.
Canada desperately needs a Renaissance of entrepreneurship in its business community. Without the vision and initiative that only gifted entrepreneurs can bring to a nation's economy, Canada will remain locked into the secondary roles offered by the head offices of large multinational enterprises. To respond to the entrepreneurial instinct latent in Canada will require a more sensitive and visionary approach by our financial institutions and, above all, a change in policy which will get the government off the backs of the entrepreneurs so that they can swim with their heads above water.
Step number 5, Mr. Speaker, is to combine all of this dynamism into a massive effort to increase Canadian exports. It is disturbing to note that last year we went into deficit with many areas of the world. This is not good enough. We can compete in world markets and we must be encouraged and assisted to do so. The objective would be a sufficient surplus on current account to provide the United States dollars necessary to acquire ownership of major multinational corporations with substantial assets and activities in Canada. Only with ownership and control of one of the major companies in each industry will we be able to provide Canadians with the total range of opportunities they seek and to which they should be entitled.


Mr. Gillespie:: We had the largest increase in 20 years, Paul.


Paul Theodore Hellyer: Within a decade, with proper management, we could acquire one of the giants in most areas of significant concern and potential benefit to Canada. Then, with
7532

November 5, 1973
Foreign Investment Act
reciprocal arrangements with our neighbours, we could enjoy the advantages of scale and the lower prices that come from international competition, while at the same time being the beneficiaries of the research, development, product development and market expansion that the big companies enjoy. Our scientists, engineers, technicians, market analysts, brokers, financiers, salesmen, advertisers and others would have full scope for the utilization of their talents, without having to move to another country.
This positive Progressive Conservative policy is far more important than the bill now before us. It is designed, not just to keep the situation from deteriorating further, but to do something about it and move in the direction of a real solution involving greater Canadian participation. Can we do it?


Mr. Baker:: Not with this government.


Paul Theodore Hellyer: The hon. member is absolutely right. We cannot do it with this government. All that is required, if we are to do it, is a government which believes in Canada and has a vision for the future of this great country-a Progressive Conservative government, led by the hon. member for Halifax (Mr. Stanfield).


Mr. Speaker:: Order, please. It is close to five o'clock. Earlier today a motion for the adjournment of the House under Standing Order 26 was proposed by the hon. member for Nanaimo-Cowichan-The Islands (Mr. Douglas). The Chair indicated at the time that consultations would take place with representatives of the different parties, or the House leaders. This consultation has taken place.
It has been agreed that the motion will be put this evening at eight o'clock, for debate in the course of the evening. There was also discussion at the time as to the possible limitation of the length of the debate and it was agreed, subject, of course, to the order of the House, that the debate might go on from eight o'clock until eleven o'clock this evening. As well, there would probably be an order providing for the suspension or cancellation of the adjournment proceedings.
It was also agreed, I gather, that the first spokesman on behalf of each party in the House is to be given 20 minutes in which to speak, and subsequent participants 15 minutes each. As I said, the motion shall be deemed to have been adopted at eleven o'clock this evening. The motion will be put at eight o'clock.
For the moment, I should like to inquire whether there is agreement from the House as to the time limits which were suggested a moment ago.


Thomas Miller Bell: Mr. Speaker, yes, we agree. Without prejudice to any time limitations in future debates, we agree to the time limitations to be imposed on this occasion, Mr. Speaker.


Stanley Howard Knowles: Yes, Your Honour, you have stated our agreement exactly.


Mr. Speaker:: Is this agreed?

[ Translation]


Mr. Boisvert:: We give our consent, Mr. Speaker. [English]


Some hon. Members:: Agreed.


Walter David Baker: Five o'clock.


Mr. Speaker:: It being five o'clock, the House will now proceed to the consideration of private members' business as listed on today's order paper, namely, notices of motions and public bills.


PRIVATE MEMBERS' MOTIONS
[Stage Direction]
[ English]

Mr. Bill Jarvis (Perth-Wilmot) moved:: That, in the opinion of this House, the government should consider the advisability of taking all necessary steps to reinstate passenger rail service in Southwestern Ontario adequate to the present and anticipated transportation needs of the public.
He said: Mr. Speaker, as you are aware, this subject has been discussed in this House on previous occasions. The subject matter of rail transportation, particularly service involving passenger transportation in southwestern Ontario, has been debated in this House for many years. I do not know the origins of the issue Your Honour, and I do not know whether the issue first arose because of partisan politics. Nevertheless, I know that in 1973 that issue has become one of equal importance to that of motherhood. Nobody seems to be against rail passenger service in southwestern Ontario; by the same token, nobody, unfortunately, is going to do anything about it.
Since 1968-indeed, before that date-all parties in this House, through their spokesmen, have expressed concern about this passenger service. Two years ago that concern turned to frustration when the recommendations of a standing committee of this House were rejected by the then minister of transport. Let me hasten to add that the recommendations of that standing committee were unanimous. There was no evidence of any partisanship in the report of that committee. I also wish to assure the House that that committee was one of the hardest working and most diligent of committees that this House has ever established. I attended a number of its meetings, although certainly not all. The hon. member who formerly represented my riding in the House has told me of the effort which the committee made in bringing forward that report. What has happened since that report came out has created frustration. For many, that feeling of frustration has turned to a feeling of hopelessness.
I am not the only one in this House who has talked about such feelings of hopelessness. Others have complained about the lack of service. In this regard, may I quote the words of no less a spokesman than the hon.
November 5, 1973

member for Bruce (Mr. Whicher) who, on October 22, when discussing the CNR financing bill, said, as recorded at page 7095 of Hansard:
I said I was frustrated because I have spoken on this subject on numerous occasions and have listened to others speak on it, but nothing has happened. I also have a feeling of hopelessness, because I am almost totally certain that no matter what the opposition has said in the past or this afternoon and no matter what I say, nothing will happen. The CNR will carry on in its own way, doing exactly as it sees fit. It will not pay one iota of attention to the wishes of the House of Commons. Certainly, this has happened in the past, as far as I can see. The fact is that out feelings, as voiced by the constructive criticism which has been given by members of this House, are shared, in my opinion, by the people of Canada. Those feelings the CNR has completed ignored over the years.
With respect, I suggest that the members of one side of this House are in the position to do something. Surely, I do not exaggerate when I say that the government has the right, the ability-to do something about this. Canadian National Railways may be a very important segment of the economy of Canada, but if they think they are bigger than the government of Canada or the Parliament of Canada, they have gone too far. I suggest respectfully, and I say this apologetically as I hope members of the opposition will appreciate the position I am in, that the government is obligated, not only to Parliament but to the people of Canada, to move into this field and, especially in extreme situations, to act.
My only comment on that particular part of the hon. member's speech is that I wish I had been the author of those words. Without reservation or qualification, I adopt everything that the hon. member for Bruce (Mr. Whicher) said on that occasion.
The various individuals, groups and organizations of the area affected must share this feeling of hopelessness and even helplessness. The case for restoration has been made forcefully over the past few years from all segments of society in the area affected, and by a standing committee of this House, unanimously, as well as individual members of all parties. The purpose of my motion, therefore, is not to plead the case for restoration of passenger rail service. In my opinion, the case has been made successfully. My sole purpose is to point out why this situation has been allowed to exist.
I suggest the finger of guilt can be pointed in many directions. May I mention just three groups, the first being the railways. The railways have been guilty of deliberately downgrading their service. As a result of that, they built up enough evidence of disuse to convince the Canadian Transport Commission to approve their application for the elimination of these passenger trains. Since then, in spite of the uproar, the railways have continued to downgrade services, not passenger services because there are none. They have continued to downgrade the railbed. They have ignored their responsibility to adjacent land owners. All of this can be documented. Indeed, such documentation has been sent to the Minister of Transport (Mr. Marchand).
One example I might give is an application for fence repair that was made on June 1 this year by 11 farmers in my constituency. After sending four letters to Mr. Benson of the CTC and correspondence to the railway concerned, I received correspondence confirming that the tender for fence repair has been let and that the fences would be
Rail Transport
repaired by the end of November. That is six months following the date of requisition. It may be of some comfort to the Minister of Transport to know he can get a fence repaired in six months, but I will point out to him that the climate in my area is of such a nature that we do not need many fences in the winter when our pastures are buried in the snow. We asked for the fence to be fixed in June. It will be fixed in November.
The second group to which I want to point the finger of guilt is the CTC. As hon. members can appreciate from the example I have given, I am not very enamoured with their responses to situations for which they have a responsibility. I feel they deliberately ignore their responsibility on occasion. Dealing with rail passenger service, I accuse them of a number of things. First, I believe they relied on bad evidence when they granted the discontinuance. Second, they allowed themselves to be completely misled by the railways in that particular hearing. Third, it appears they did not make a decision independently of railway pressure. Indeed, one is forced to the conclusion they are almost in collusion with the railway companies of this country. In any event, the most charitable thing that can be said about the CTC is that it has become a comfortable haven for the Hon. J. Edgar Benson.
The third person who must stand accused of this deplorable situation is the Minister of Transport. I examined very carefully the minister's answers to questions in this House since January on the subject of railway passenger service. The attitude exemplified in those answers simply defies logic. First, the minister defied the unanimous recommendation of a standing committee of this House. The great majority of the members of that committee are Liberals. I believe they are sincere, hard working members, as indeed are all members of that committee.
Second, his answers to the many questions in this House during question periods since January attempted to relate this issue to the rapid transit problems in and around the city of Toronto. May I hasten to say that I in no way minimize the problems of that large metropolitan area. I assume they are of a very severe and important nature to the hundreds of thousands of people who must rely on some form of transportation around the city of Toronto. I do not minimize the importance of that. I simply say that rail passenger service in southwestern Ontario, the area which I and members of adjacent constituencies represent, has nothing to do with the rapid transit system in and around the city of Toronto. The smokescreen drawn by the minister in reply to serious questions by many members of this House, not just the party I represent, does not do him or the government he represents justice. It is a great discredit to the people living in and about southwestern Ontario who have no means of public transportation.
Third, the only positive step, and I say this very charitably, is that a study has been ordered. This is not a study by his department or a standing committee of this House. It is not a bilevel or trilevel study. It is not a study whose participants received any local input. The study is by the CTC. I cannot think of anyone less equipped in view of the history of this issue to study passenger service in southwestern Ontario than the CTC which has made a bad decision. They have not done anything to correct it. I

November 5, 1973
Rail Transport
assume that through this study they are simply trying to hide that fact.
The Parliamentary Secretary to the Minister of Transport (Mr. Guay) is in the chamber. He will remember a group which came to Ottawa. Indeed, the parliamentary secretary was very gracious in receiving them. On that occasion, I suggested somewhat uncharitably that this was just more windowdressing. The parliamentary secretary took great umbrage when I made that suggestion. I do not think he realizes it was born from the frustration, helplessness and hopelessness of the people in my area and the area surrounding.
We heard, before someone managed to keep him quiet, a few words from a member of the CTC who sat in on that meeting. He told us that at that time the study was about two thirds completed. That was months ago and we did not hear anything more about it until last week when it was indicated we might get the results of this study next week or the week after.
My concern is this. Since we first heard about the birth of this study, it has been indicated that local people would be consulted. I presumed the local people would be people in my constituency or surrounding constituencies. This is a very elusive animal, the local people who are to be consulted. I cannot find one in my constituency. I have checked with almost every municipal official, elected or appointed, in my constituency. Not one has talked to the CTC. The CTC has never talked to them. I would hope that when this study is tabled, if it is ever tabled, there will be appended to it the names of those people who were consulted by the CTC in connection with it.
I am by nature an optimist, though at times it is very difficult to remain an optimist, especially when one is dealing with rail transportation in my area. Let me point out one thing-and I do so with considerable reluctance. From the birth of this issue to this very day there has never, to my knowledge, been inserted into the debate one iota of partisan politics. Everyone has been in favour of the improvements we are seeking-everyone, that is, except the railways, the CTC and the minister. The conclusion to which one is inevitably drawn is this: the attitude the minister continues to take, together with the discontinuance of the service, reflects the only way he knows of penalizing the people in this area who have failed to elect Liberal members since 1968, the only exception being the hon. member for Bruce (Mr. Whicher)-and it certainly is not his fault that geographically his constituency is isolated by water and by ridings represented by Tory or NDP members. I can well understand why he spoke with such vigor and dedication on October 27. It seems to me that the people who live in this area have been witnessing political patronage in reverse. It amounts to telling them: if you don't send Liberals to Ottawa you will not get passenger trains. It is incredible to me that in this area of non-partisanship the minister should take such an attitude. With reluctance, as I say, this is the only conclusion I can draw.


Mr. Joseph-Philippe Guay (Parliamentary Secretary to the Minister of Transport):: Mr. Speaker, this motion asks that the government consider the advisability of

taking all necessary steps to reinstate rail passenger service in southwestern Ontario adequate to the present and anticipated transportation needs of the public.
The government is in full accord with this motion. However, the motion is not really necessary, because the government is already studying the anticipated transportation needs of southwestern Ontario and is, in fact, considering the advisability of reinstating passenger rail service. Both the minister and the hon. member for Bruce (Mr. Whicher) have repeatedly expressed concern about this matter. As has been mentioned, the hon. member for Bruce has frequently made representations to the Minister of Transport (Mr. Marchand), to the CTC and to myself. I should like to say to the hon. member who has just resumed his seat the information given in our various discussions had nothing to do with politics; we spoke with simple sincerity because we are concerned about the people in his area just as we are concerned about people everywhere in Canada.


An hon. Member:: Like the devil, you are!


John Howard Lundrigan: Don't cry!


Joseph-Phillippe Guay: I am always pleased to hear comments from members of the Official Opposition. But some of them may have noted that their leader has just walked into the House. They do not realize that he came in to listen to me rather than listen to them.
I repeat, the government is very concerned that southwestern Ontario should get the best and most suitable surface transport systems. The immediate question is to determine how this objective can best be achieved. Both the Canadian Transport Commission and the Ontario government are currently in the midst of separate major studies to this end. It may be the case that reinstituting rail passenger service is part, or all, of the solution. It may not. We cannot at this stage prejudge the conclusions which will be reached as a result of these studies.
The Minister of Transport has not simply let this matter rest with the studies currently under way. On June 14 of this year, along with officials of the department, I met with a delegation from southwestern Ontario, as the hon. member for Perth-Wilmot (Mr. Jarvis) will recall, and listened to representations on this matter. The consensus of this meeting was that the next Ontario trilevel conference would offer the most appropriate opportunity for the discussion of this question, and that a solution could be found through the co-operation of the three levels of government concerned.
As to the background of this issue, I think it would be very useful if I were to put a few facts on the record. But before doing so, I assure the hon. member, as I have done on several occasions, that as soon as these reports are available, we shall actively pursue this matter. I am not being "political". I am just being sincere, and answering the question he has raised on various occasions. I should like to refer, also, to the Standing Committee which visited the hon. member's area. This visit was made possible because the hon. member for London East (Mr. Turner) voted against other members on our side, if you want to put it that way. He took this action because he felt there was a need to do so, and I compliment him. Had it not been
November 5, 1973

for the hon. member for London East, this visit by the committee would never have taken place.
Responsibility for providing travel facilities to the people of Canada is shared by all levels of government though, no doubt, the greatest over-all responsibility rests with the federal government. Historically, the railway system, from the date of its construction through to the 1940's, provided the principal means of intercity transportation in Canada. From the 'fifties onward, with the advent of improved facilities by road and air, the attention of the various levels of government was focussed on the creation of a first-class network of highway and air routes. The redirection of national transportation expenditures came in response to the public preference for the convenience and flexibility of the private automobile and the bus lines, when shorter distances were involved, and for the advantages of airspeed for longer trips. While the public in general benefitted from the changing pattern of passenger services, the impact on the rail passenger system was adverse, leading to a widespread decrease in patronage. Railway deficits increased in the light of competition with highway and air modes which received the major benefits of public financing.
The federal government, recognizing that provision for rail passengers now involved burdens which were not normally assumed by commercial firms, moved to relieve the rail carriers from the financial losses incurred in the operation of passenger trains. In 1967, the National Transportation Act established a mechanism whereby the government could order the continued operation of uneconomic passenger services if those services were judged to be in the public interest. Having done so, it would absorb the bulk of losses associated with each particular operation. The federal government ensured that the broad transportation needs of the public would be considered when a decision was made as to whether an uneconomic passenger service should be continued or not.
The act required the Transport Commission to fully evaluate all available and projected competing modes of travel in each case brought before it so that the need for passenger train service would be judged in the context of the total facilities available to those directly affected. As well, this process was initiated as part of the major aim of federal government policy to ensure that the best allocation of resources in the passenger field was accomplished.
In the case of train service abandonment, specifically in southwestern Ontario, it is useful to recall that all steps prescribed by the Canadian Transport Commission have been followed and there was no other recourse than to abandon this service after exhaustive hearings on the part of the commission.
In its capacity of rationalizing passenger services and protecting the public interest, the railway transport committee of the Canadian Transport Commission carried out a full investigation. No less than six days of public hearings in different cities were held at which no less than 70 government organizations and individuals attended. The purpose of these hearings was to examine the economic viability of, and the public need for, the railway passenger
Rail Transport
services in southwestern Ontario, commonly referred to as the Bruce peninsula services.
During that hearing it was shown in particular that the lines abandoned since then had incurred losses in the neighbourhood of $600,000 in 1968. It was also proven that alternative public transportation existed in the area and that extensive bus service was available. It was demonstrated that revenue increases between 2.4 to 7.8 times the actual 1968 revenues would have to be obtained to make the services profitable.


John Howard Lundrigan: A point of order, Mr. Speaker.


The Acting Speaker (Mr. Laniel):: Order, please. The hon. member for Gander-Twillingate is rising on a point of order.


John Howard Lundrigan: Mr. Speaker, I think I have a legitimate point of order when I suggest that it is perhaps wise for the members of the House to recall a fundamental rule of the House in order to preserve this chamber as a debating forum, the purpose for which it was intended. The hon. member is reading a statement prepared by officials of the department or some other section of the government. The hon. member for Fort William has a pile of papers on his desk as well, from which he is ready to read. Even if Your Honour does not accept my point of order, I suggest it is wise for members to remember this is a debating forum, not a place in which to read statements prepared by departmental officials.


The Acting Speaker (Mr. Laniel):: Order. The point raised by the hon. member is one that is raised on many occasions and I think is well taken. The Chair appreciates the hon. member's intervention, but I suggest the rules are not strictly applied. They do authorize hon. members to refer to notes, and in special cases, such as budgets or very important political matters, the Chair has a tendency to allow leeway. In view of all these variations in the application of the rules, it is not easy for the Chair to decide on a strict application of the rules. But I think the fact that, on occasion, members do suggest to the Chair that there should be a stricter application of the rules is helpful to the operation of the House.


Joseph-Phillippe Guay: It so happens, Mr. Speaker, that I did this research myself through our research bureau. Hon. members opposite also have a research bureau. In this instance, I would have accepted nothing less. I suggest the hon. member for Gander-Twillingate is prejudging the conclusion of my speech; I am more favourable to the motion than he thinks. I might also say that the other member who will speak on our side has no departmental notes, and I say that in all truthfulness because he would not accept them. So, the hon. member should not make statements that he cannot substantiate.


John Howard Lundrigan: Since you are a rookie, we will accept that.


Joseph-Phillippe Guay: The hon. member is known for making rash statements, but half the time he does not know what he is saying.


Walter David Baker: At least he does not read from a text.

November 5, 1973
Rail Transport


Joseph-Phillippe Guay: I should just like to mention a few other points, Mr. Speaker. If the service had been continued, with the taxpayers paying 80 per cent of the losses incurred by the railway companies, in 1968 the distribution of cost per passenger would have ranged from $2.06 for the passenger, $0.61 for the railway company and $2.44 for the taxpayer for the Canadian National Toronto-Palmerston service. The cost would have ranged from $3.36 for the passenger, $3.92 for the railway company and $15.69 for the taxpayer for the Canadian Pacific Toronto-Owen Sound service.
Other studies have been carried out as we are all aware. A lot of consideration has been given to the cost of improvements and so on. A good number of bus services require improvements in equipment, but their financial positions prevent them from taking action. It does appear that, in that particular district, public intercity transit is not well regarded. A possible answer to this may be the fact that the road network is good and that people prefer the automobile for travelling.
I should like to point out that further action will be taken by the Minister of Transport. In more recent months, as an indication of the very strong concern of the federal government for passenger services in southwestern Ontario, the Minister of Transport asked the president of the Canadian Transport Commission once again to carry out an investigation of the transportation needs of the residents of the area. This the CTC has undertaken and the minister is now awaiting a report on the situation in the area. The minister has already indicated in this House that he will discuss this report at a trilevel meeting with Ontario and the municipalities so that we can solve this problem.
It is useful at this time to recall that the government of Canada is spending tremendous amounts of money to ensure the mobility of the Canadian population, both for its leisure and business travel. It is the policy of this government to ensure adequacy of service to all the population of the country, and no less for people from southwestern Ontario.
Efforts are being exercised in connection with all modes of transport to ensure that Canada is benefiting from all technological advances. At the present time we are sponsoring additional car ferries; we are expanding our airports; we are creating new air services; we are participating in road improvement programs with the provinces; we are funding research in the railway passenger field, and so on. These are tangible efforts made by this government to get at the passenger service problem in Canada and in southwestern Ontario. Items such as increased fuel costs, scarce energy resources, and technological advances such as the LRC and turbo-trains may prove to be significant factors. The future of passenger trains in Canada may soon prove to be more interesting. It is in this context that the people of southwestern Ontario should await the result of the new study undertaken by the Canadian Transport Commission.


Mr. Terry Grier (Toronto-Lakeshore):: Mr. Speaker, I rise to intervene briefly in this debate to state once again the support of my party for the sentiments and opinion expressed in the motion of the hon. member for Perth-Wil-mot (Mr. Jarvis), which may I say were also ably

expressed not long ago in this House by the hon. member for Bruce (Mr. Whicher). I am not from southwestern Ontario, unless one feels that metropolitan Toronto falls within that category, but as a sometimes member of the committee on transportation who has received correspondence, particularly in the last few months, about this matter, I welcome the opportunity to say a word or two about it.
It has already been said that this passenger service was discontinued some three years ago, and that last year the standing committee of this House unanimously recommended reinstatement of that service. As has already been mentioned, despite that unanimous recommendation no action was taken by the railways, the Canadian Transport Commission or the government. I should have thought that in the political atmosphere of a year or so ago, a unanimous recommendation of the committee would have carried considerable weight. However, this idea of reinstatement of passenger service in southwestern Ontario seems to be an idea in danger of being smothered by too much agreement.
It is easy to say one is in favour, but it is more difficult to translate that statement into some kind of action. Despite all the protestations of the parliamentary secretary, all the studies that are going on, or may be going on again, the government in fact has not committed itself to the reinstatement of passenger service. It has committed itself to another study. I think that is the important distinction which will not be lost upon the residents of the area and ought not to be lost upon the members of this House.
The government, perhaps understandably, wishes to follow the advice of the transport commission in a matter of this kind. Having done that, I think it is not appropriate for the government to suggest that it agrees with this motion. An agreement by the government must be translated into action, and until such time as action to implement the sentiments of this motion is undertaken by the government, the government cannot be stated to be in agreement with it.
My concern about this issue is not only the concern of one who is interested in the field of transportation and who travels in, even if he does not live there, southwestern Ontario. Mine is also the concern of one who sees a progressive deterioration and abandonment of passenger service generally as a step in the wrong direction. Surely, in face of the looming problems of energy and the destruction of our environment, along with the need to service an increasingly large and mobile population, we must not discontinue passenger service or go along with the abandonment of rail services without counting the cost of alternatives.
It is easy to say it would have cost people two or three cents a year to subsidize the operation of certain lines, but what is it costing the people in terms of alternatives to which they must turn, in terms of alternatives which are not there, or in terms of the destruction of the environment which is a concomitant of increasing highway traffic and pollution arising from the use of buses and cars which in increasing numbers use our highways? The arithmetic
November 5, 1973

employed has been too simplistic, I suggest, in the calculation of passenger and freight rail services in this country. It has been too simplistic and has not counted the cost of alternatives, nor the cost to the future in terms of environmental considerations.
It is trite for me to say, but I think it is perhaps worth reminding ourselves, that this problem is not in any way limited to southwestern Ontario. It is national in scope and concerns western Canada perhaps more immediately and more obviously than other parts of the country. Whether it be commuter rail service or ordinary passenger service, whether it be rail service of any kind, the trend in recent years has been to discontinue and reduce it, or to allow the facilities which support such services to deteriorate so that the service in time becomes more expensive and the case for discontinuing it apparently stronger.
I said I would be brief, and I shall. I urge the government not merely to support the notion of another study-I may say, a study under the particular body which gave approval to the discontinuation in the first place, and therefore not likely to be very objective in its assessment-not merely to give lip service to another study, but to say precisely where it stands. I suggest that the notion of another study is probably made in an effort to buy time or as a delaying tactic.
There must be plenty of data before the government and the Ministry of Transport on the basis of which the government could come to a firm conclusion; and if there is not, I am sure hon. members from the area would be very glad to supply it. I am not impressed by the assurance of the parliamentary secretary. I do not believe the government supports the notion of continuing rail service in those areas. If it does, let it say so in plain, simple English or French.


John Howard Lundrigan: Mr. Speaker, I want to speak for just two or three minutes. I do not want to prevent my colleague, the hon. member for Fort William (Mr. McRae), putting his remarks on the record. I suspect he has documentation from departmental officials that might be of interest. I do not intend to be too hard on the hon. member for St. Boniface (Mr. Guay) who today performed the unusual role of attempting to present the prepared position of his government. I suggest that is understandable. He is beginning to sound as though he has made some growth in his party, particularly when he uses phrases such as "my government", "my policy", "my position", "our firm policy", etc. This is as bureaucratic and old-fashioned an approach as I have heard for some years, as long ago as the days when we had rail passenger service in Newfoundland in the form of old Bullet.


An hon. Member:: 1962.


John Howard Lundrigan: In any event, I do not want to criticize the hon. member too severely because his prospects for future prosperity in his party are looking brighter by the day with every intervention he makes from his seat.
Getting back to the issue, I support certain of the arguments put forward by the hon. member who immediately preceded me. He specifically referred to southwestern Ontario and the need for real effort to be made in that part of his province toward the continuation of some kind of
Rail Transport
rail passenger service. Of course, you could get hon. members from western Ontario and from the Prairies, as well as from other areas of the country where rail lines have been abandoned, to support that argument: this is also true of members from Prince Edward Island, Newfoundland and various regions of the province of Quebec.
If the government has done anything since 1968 when I first came here, it has taken an unwritten, unconfirmed and "under the table" pass at rural Canada. It has taken the position that rural Canada should be discouraged in all aspects and that there should be an undermining encouragement toward the urban drift which the world has witnessed in the last half-century. When saying that, I look across at the hon. member for Bruce (Mr. Whicher) to whom we refer sometimes, when we are kidding him, as the unofficial Tory member because he does represent a lot of conservative attitudes. He has made a strong effort, in terms of textbook arguments, against government policy harmful to rural Canada.
The point I want to touch upon relates to government policy in respect of transportation services. I think we must look at our over-all services, none of which can be related so closely to our economic structure as our transportation system. That is why when we talk about transportation we are not only talking about public services but very much about economic necessity.
A number of years ago the hon. member from my riding-it was called Bonavista-Twillingate in those days- was the Hon. Jack Pickersgill, a good friend of many members of the House of Commons. At that time he was attempting in his own way to create some kind of buffer for the government on matters of transportation. He was the architect and designer of the Canadian Transport Commission.
The commission is one of the most intriguing animals that ever existed in federal government. Today, if you approach Mr. Benson in the CTC, he says you have the wrong man and you must go to the Department of Transport which created the original legislation and has legislative responsibility for transportation. If you go to the Minister of Transport (Mr. Marchand), he will tell you frankly, candidly and openly that you have the wrong man, that you must go to the commission because they are a quasi-judicial body, a body which is above the law and they are not in any way subject to the will of parliament in the sense that we can point the finger at them and tell them what to do.
The transportation situation in Canada is criminal, because no one seems to have proper responsibility for it. In times when the Canadian Transport Commission did not exist, one could always go to the Minister of Transport with whatever problems one had or whatever applications came forward for the abandonment of a rail service. The minister had responsibility and he was held accountable to the Parliament of Canada and to the Canadian people. Today, one cannot approach him.
I remember when the hon. member for Burin-Burgeo (Mr. Jamieson) was in charge of transportation. He could squirm away from any transportation issue by saying that it came under the quasi-judicial jurisdiction of the CTC.

November 5, 1973
Rail Transport
This is where we find ourselves today. We have arrived at a point in Canadian parliamentary history where somebody will have to take a close look at whether there is a need to continue the CTC, with its present attitude. Someone will have to take a close look at where the responsibility for transportation matters lies.
I could tell stories for hours about all the problems we have encountered in our own little province in our efforts to work out solutions with this multiheaded animal, the Canadian Transport Commission. It is impossible to reach either the Minister of Transport or the CTC. There were two occasions when I served several small communities, in fact seven small islands off the main coast of Newfoundland. The CTC have the responsibility of providing some kind of transportation link between the islands and the mainland. This is contained in the Terms of Union which were signed back in 1949. A small boat operated between the Change Islands and the mainland. On one occasion they wanted some kind of landing facility so that when the boat went in to dock, there would be a small structure for unloading the one car which the ferry boat could take on a calm day; they wanted a small plank on which they could drive the car. The wharf is owned by an old friend of Jack Pickersgill.
This private wharf may be worth about $1,000. There is a private arrangement whereby the owner gets $1,000 a year to rent this wharf to the CTC. It is a neat little arrangement which Mr. Pickersgill made when he repreesented my riding. The people who use the ferry wanted this little plank on platform built which would cost a few hundred dollars. The government said it was the responsibility of the CTC, and the CTC said it was the responsibility of the Department of Public Works or the Department of Transport. Eight now there are 700 people being served by the ferry which has to wait for the water to rise or fall to land the one car which it carries. This is hard to believe.
On another occasion I was looking after the case of a similar operation serving 600 or 700 people on another island, actively employed, hardworking people none of whom were on welfare. Their wharf had deteriorated. Again it is a privately-owned wharf, rented to the CTC through the auspices of Jack Pickersgill. The wharf was in such need of repair that the ferry could not carry any trucks or cars. Normally the ferry can carry two cars or one truck loaded with freight or goods for the community. The island had to go for two months without produce. All that was required was a couple of thousand dollars to repair this private wharf by agreement with the CTC. We worked on this problem during the whole summer. I threatened to raise the matter in the House of Commons if we could not get some guarantee from the CTC that they would make the necessary changes. If they were not going to make them, I was going to challenge their decision on legal grounds or on a constitutional basis.
Those are two small examples of circumstances that do not affect the nation as a whole but are indicative of the thousands of transportation problems that are being swept under the carpet because of the inactivity of the CTC. I do not wish to point the finger at all the members of the CTC. I have dealt with some whose names are unsung but who are determined, honourable and distinguished servants of Canada. They are anxious to help solve some problems,

but they are being strangled by the political head which is at the top of the organization or by some direction from the government which does not permit them to make the right kind of decisions.
The simple fact of the matter is that under its present terms of reference the CTC can take no action in transportation except to eliminate services. There is a tremendous amount of indecision in the whole area of transportation. If I were a minister of the Crown responsible for transportation, I would look seriously at the need to restructure the CTC, to eliminate it or to give it new terms of reference and public responsibility. As a member of parliament and as a Canadian, I should like to make sure that the Minister of Transport is accountable for transportation problems in our country. I believe the hon. member who will follow me will take the same attitude.
We have certainly arrived at a situation where somebody must face the reality that exists in transportation. I do not want to criticize individual members of the commission, but there is something wrong in Canada when there is a continuous presentation of motions from individual members-and, God knows, western members have been active almost every day in trying to deal with transportation difficulties. Last week 74 of us members of parliament visited British Columbia. Almost incessantly the argument was thrown at us that the people over there are concerned about lack of direction in transportation. Briefs were presented to us and we heard arguments from all across the province regarding stagnation of the economy due to the downfall of the transportation system.
Without making any generalized comment which might be challenged by the hon. member for St. Boniface and of which he would like to accuse me, let me say that the quality of transportation is declining. Japan has come up with the monorail system which has revolutionized their transportation system. Great Britain, with its dense population and its difficulties in building good transportation systems, has been able to provide a transportation system which would put us to shame. Putting partisan politics aside, one wonders where we are going in Canada. There seems to be nobody with over-all responsibility for transportation. That is why I say it is time for us as members of parliament to introduce motions and bring forward recommendations to re-examine the role of the CTC. It is nothing but a buffer for the government and a body which enables the government to make unpopular decisions, a body which can take the blame and responsibility for them.


Mr. Paul E. McRae (Fort Williams):: Mr. Speaker, I rise to speak on the motion proposed by the hon. member for Perth-Wilmot (Mr. Jarvis) which asks that rail passenger service be reinstated in areas of southwestern Ontario from which it was removed during the past few years. However, before doing so I would like to speak on a point of personal privilege in reply to the earlier remarks of the hon. member for Gander-Twillingate (Mr. Lundrigan). No departmental officer, or anyone else for that matter, is ever going to put words into my mouth when it comes to speaking about railroad affairs. I come from a great community which is totally dependent on the railroad. I spent 30, 40 or 50 hours with railroaders during the last strike,
November 5, 1973

and I spent last Friday evening with railroaders. 1 remember the town of Rainy River when dieselization came in, and the tragedy it suffered, as well as many other areas. So nobody is going to tell me what to say about railroads.


John Howard Lundrigan: I didn't mean you.


Paul Edmund McRae: Mr. Speaker, when I have occupied as much time on the floor of this House as the hon. member I am sure I will not need notes.


John Howard Lundrigan: We accept you, but pros like Joe we don't.


Paul Edmund McRae: I am speaking about what is involved in this motion partly because I am a frequent visitor to the area concerned and am aware of the feelings of the people about the matter. However, I am also concerned about the discontinuance of passenger service in my own area and throughout the rest of Canada. This is something about which all Canadians must be concerned.
In many respects my views on this subject are not too different from those of the hon. member for Gander-Twil-lingate, but I would like to get to the root of the problem. I do not think the root of the problem is essentially the CTC, although it may be one of the offshoots of the root. I find it hard to believe that the railways of this country are really serious about their role, and especially do I say this about the CPR although it applies also to the CNR. Both railways lack an aggressive approach. Where are our railroads when there is a discussion of rapid transit systems? These are the companies which have the rights of way, the equipment, the money for development and apparently the technology. What sums of money have they put into research and development? Very little, Mr. Speaker.
Trains today are travelling at about the same speed as they were 50 years ago. Except for the diesel engine and a few improvements in bearing-lubricator techniques, nothing has been changed. One has only to look at the dates that rail cars were built, when a freight train is moving past, to realize how old is much of the equipment. A lot of it was built in 1929, 1932 or 1941. Where were the railroads when the controversy over the Pickering airport began? What other sections of industry would pass up the opportunity to suggest a rapid ground transportation system in this area as an alternative to the airport?
Where are the railroads in the present energy scene? We are told that fuel-wise, rail travel is by far the most efficient. In fact, the figures show that as opposed to air travel, per passenger mile we use about a quarter to one-sixth the fuel on a railroad as would be used on an airplane. Would fuel conservation not dictate that we have another good look at passenger rail transportation?
Where were the railroads when the possibility of a unit train system was discussed in lieu of an oil pipeline down the Mackenzie Valley? Only reluctantly and very lately has the CNR shown signs of interest in such a project. And what is $l!/2 million compared to $40 million to $50 million spent by the aggressive pipeline industry?
It is unfortunate, perhaps even disastrous, that in a nation which requires rail transportation so much we are dependent on railroads which, for various reasons, are not really interested in developing new business. It seems to
Rail Transport
me that the CPR would be glad to get out of the business and that the CNR is so used to playing second fiddle that it has never thought of an initiative of its own.
I believe that the National Transportation Act and the Railway Act must be seriously amended or, better still, completely revamped to provide the kind of thrust that we expect of our railroads. I would like to go into this question in detail if I had a much longer period of time, but this evening I shall make just one or two short comments.
I would like to see these acts amended in order to put control over the railroads back into the hands of parliament and of the government of Canada. I am not happy when I hear the minister reply to questions saying that he will ask the president of one or the other major railway company for co-operation. When the national interest beckons, as it does today in connection with grain movement from the west through Thunder Bay, the minister must have the power to command the railroads to meet the emergency.
It is my understanding that when the railways desire a change, and a change invariably means a change upward in freight rates, they merely have to inform the CTC, and so be it. I repeat that control, over the railroads must be given back to the Parliament of Canada. Another change has to do with rail passenger service. It is my understanding that when the railroads want to apply for a subsidy, they must apply for discontinuance of service. In order to achieve this, it is my experience that they deliberately downgrade the service and then, when the volume falls off, they ask for discontinuance.
Just recently the CPR laid off 22 ticket agents and operators in northwestern Ontario and Manitoba. As a matter of fact, the senior clerk in Thunder Bay was laid off on September 30, in contravention of Bill C-217, if not the letter then the spirit of section 16(3) (a), which calls for the arbitrator to give serious attention to adopting a job security plan based on the principle of attrition. Fewer tickets will be sold as a result of this action, and when the volume of usage falls off the railways are free to seek increased subsidies. This is a silly provision. I am in favour of subsidies, but subsidies for providing service. The act should reward the railroads for upgrading service, not for short-changing the public.
When a railroad ceases to operate a service in an area, something goes out of the area. It is time to reappraise the role of the railroads in Canada and to upgrade this role. At a time when fuel shortages dictate a more aggressive rail policy, it is time for the Parliament of Canada to lean heavily on the railroads to force them to play a more aggressive role in providing better service, including passenger service, to the people in southwestern and northwestern Ontario and in the rest of Canada.


Mr. Speaker:: Order, please. The hour allotted for the consideration of private members' business has now expired. May I remind hon. members that the 40 hours set aside under the terms of the Standing Orders for private members' business are now exhausted. This is being said in conformity with the disposition of paragraph 6 of Standing Order 15. There will be no private members' hour from 5 p.m. to 6 p.m. on Mondays and Tuesdays from now until the end of the current session.
At six o'clock the House took recess.

November 5, 1973
Oil and Gas AFTER RECESS
The House resumed at 8 p.m.


MOTION TO ADJOURN UNDER S.O. 26   ENERGY OIL SUPPLIES FROM FOREIGN SOURCES
The Acting Speaker (Mr. Laniel):: Order, please. Leave having been granted to the hon. member for Nanaimo-Cowichan-The Islands (Mr. Douglas) to move the adjournment of the House under Standing Order 26 for the purpose of discussing a specific and important matter requiring urgent consideration, namely, the steps the government proposes taking to meet the continuing interruption of oil supplies from foreign countries, and more particularly, what plans it has for (a) procuring alternative supplies to meet the needs of eastern Canada; (b) organizing public support for reducing the consumption of energy supplies this winter, and (c) instituting a system of oil rationing should this become necessary, the motion is therefore as follows:
That this House do now adjourn.


Thomas Clement (Tommy) Douglas: Mr. Speaker, the purpose of moving the adjournment of the House is to draw the attention of members of parliament and the Canadian people to the fact that we could face a very serious oil shortage in Canada this winter. I think the worst thing we can do to the Canadian people is to keep issuing Pollyanna statements that all is well when all is not well.
I do not think a series of soporific handouts to the Canadian people will go very well if later this winter we find ourselves in desperate straits for lack of adequate petroleum supplies. Therefore, my colleagues and I feel that this matter should be discussed in parliament in order to draw attention to the situation but, more importantly, in order to give the government an opportunity to tell parliament and the Canadian people what plans it has, and what steps it proposes to take, to deal with a serious crisis should it occur. It has been said that the art of governing is the art of foreseeing, and surely this parliament-and particularly this government-have a responsibility to foresee what eventuality is likely to arise, and to act accordingly.
The threat which faces us is the possibility of a very serious oil shortage this winter. This will affect mainly eastern Canada. As far as the area west of the Ottawa Valley is concerned, that region is supplied with crude oil from western Canada and there should be no serious problem. We produce some two million barrels a day, more than half of which is shipped to the midwestern United States. Also, the consumers west of the Ottawa Valley are protected by the price freeze which was announced by the Prime Minister (Mr. Trudeau) on September 4 and which is to continue until the end of January. The Minister of Energy, Mines and Resources (Mr. Macdonald) has said

that at that time they propose to fix the price on the basis of Montreal.
I want to say, Mr. Speaker, that if that happens I think the minister will be in trouble with the people of Canada; he will certainly be in trouble as far as this group is concerned. That is not our immediate problem. West of the Ottawa Valley I think there is no danger of an oil shortage, but eastern Canada depends almost entirely on overseas sources for its crude oil supplies. About 25 per cent of that oil comes from the Middle East, and at the present time the indications are that this may be curtailed.
The Arab states have been making various statements. Over the weekend the oil bulletins from Beirut named Canada as one of the countries which would be cut off. Some time today Saudi Arabia announced that Canada is not to be one of the countries against which a total embargo will be enforced, but the same statement pointed out that the Arab states, and Saudi Arabia in particular, proposes to cut their production by 25 per cent in the month of November and an additional 5 per cent in the month of December. If that applies to Canada, as one can only assume from the statement that it does, it will certainly mean a serious curtailment in our supplies from the Middle East.
Many people are under the impression that it is the Americans who are going to suffer most from an embargo, but it should be pointed out that the Americans only depend on the Middle East for 6 per cent of their oil requirements while eastern Canada depends upon the Middle East for 25 per cent of its requirements. Whatever action the Middle East countries take with respect to limiting their exports of oil to Canada, it will have a very serious impact upon supplies in eastern Canada.
Moreover, some of the Arab states have taken the position that any country which ships oil to the United States, a country on which they have placed an entire embargo, will itself be subject to the embargo. As over 50 per cent of our oil goes to the United States, we have no way of knowing what the attitude of the Arab states will be to Canada.
While most of our attention has been focused on the actions of the Arab nations we have overlooked another serious danger. Sixty per cent of our imported oil comes from Venezuela. That field, in the main, is controlled by Exxon. There is a danger that supplies of oil originally destined for Canada may be diverted to the United States if the Middle East nations place a total embargo upon that country.
I am not suggesting for a moment that Exxon would deliberately cut off Canada from supplies of Venezuelan oil. However, I am saying that if the United States were to be in desperate straits this winter, that country might apply pressure on Exxon and ask the company to meet the requirements of the United States first: quantities of oil destined for Canada could be diverted to the United States. None of us wants this to happen. All of us hope that there will not be any shortage of oil in eastern Canada this coming winter. But it would be a mistake if we were to live in a fool's paradise and assume that we will not face any crisis at all this winter. Our purpose in
November 5, 1973

moving the adjournment motion was this: we wanted to find out what are the government's plans and what action the government proposes to take.
It is useless, at this late date, belabouring the government because we may face an oil crisis this winter. I have done my fair share of that. I have pointed out that had the government entered into some long-term planning, and had it constructed the pipeline to Montreal, it might have averted much of the difficulty which we might face this coming winter. Scolding will not solve the problem. Finding fault with the government will not recover the years that the locusts have eaten. What we must do now is try to work together to meet a national crisis.
I think it would be far better if the government were to take the people of Canada into its confidence and tell them frankly what the situation is likely to be, how much oil we will be able to import, what are the parameters of the problem, what is the most oil we can expect to have and what is the least that we can expect. In that way we could make our plans on the basis that we may face a shortage and the government could say how it proposes to meet that situation if and when it arises. I think if the government and parliament are prepared to give leadership to the Canadian people, the Canadian people will respond, as they always have, to any challenge and they will meet the national crisis.
There are a number of things on which the government should speak out and with respect to which it can tell us its plans. This afternoon I asked the minister what is the anticipated shortfall between the 900,000 barrels a day we need in eastern Canada and the quantity that it is anticipated we shall be able to procure from oil producing countries. That ought to be known. I cannot believe that the department is not capable of making assessments as to how much oil we are likely to have. We know how much oil we will need. Further, I think the government ought to tell us, either tonight or as soon as possible, what are the alternate sources from which it hopes to secure oil.
Four oil companies are now moving some 53,000 barrels a day of western crude down the St. Lawrence Seaway. That will help. Has the government any plans for increasing the amount of oil which we can move down the St. Lawrence Seaway? Of course, that will be only a temporary measure until the freeze. What other measures has it in mind? If it is not too late, are steps being taken to give tax considerations to those who are willing to put up storage facilities, as was suggested this afternoon, in order that we may store a larger quantity of oil in the eastern areas?
Further, I think we should know the extent to which the government is actively pursuing the possibility of getting oil directly from the state-owned oil company of Venezuela. The minister himself pointed out that although Exxon will control the field until 1983, the Venezuelan government can take its royalties in kind. If in Canada we set up a national marketing mechanism it might be possible to get supplies of oil from the state-owned oil corporation of Venezuela. If we are to do that, we must move fast. Every industrial country in the world is looking for oil. We ought to know from the minister what success he is having in pursuing this matter.
Oil and Gas
We ought to know what attempts are being made to secure oil from African countries such as Libya and Nigeria. We get about 21 per cent of our oil from the latter country. These countries have been entering into bilateral arrangements with other countries such as Japan and West Germany. That is the policy they have been following. Has the government any hope of obtaining additional oil from those areas? It seems to me that the government should be looking into such matters, instead of just going from day to day in the hope that the problem will go away.
Second, I have suggested in the motion that we ought to begin appealing to the Canadian people to do whatever things that will help to reduce the consumption of oil, natural gas and other fossil fuels. The provincial governments, municipalities, public organizations of all kinds, service clubs, community organizations and many other groups would all rally behind an appeal if the government were prepared to spell out ways and means by which we could reduce the consumption of oil and natural gas this winter.
We also suggest in our motion that the government should tell us today, or fairly soon, what it proposes to do if the situation becomes so serious that there is insufficient oil to meet the normal demands of eastern Canada. None of us wants to see oil rationing, but if oil rationing becomes necessary we do not want to see oil rationed by the pocketbook: we do not want to see gasoline going only to people who can afford to pay $1 or $1.50 per gallon. If we do face such a serious situation in eastern Canada, then I submit supplies ought to be allocated on the basis of priorities so that we can meet the needs of those who require fuel. I am speaking of hospitals and other necessary institutions, of home heating fuel and of those groups which have a legitimate demand on this country's limited reserves.
I hope the government will be able to tell us tonight what steps it is energetically pursuing to meet a possible crisis. If the crisis does not arise and if there is no shortage this winter, all of us will be extremely happy.


Eldon Mattison Woolliams: I bet you will be disappointed.


Thomas Clement (Tommy) Douglas: If we plan for the worst and it does not happen, we will have lost nothing except a little thought and a few plans. However, if we fail to plan for the worst possible contingency, this country will be in serious trouble and the people of Canada will not forgive either the government or this parliament.
The government should tell us tonight what steps it is taking to carry on negotiations with the Arab states; what diplomatic activity is going on to ensure that if possible we will continue to get supplies from the Middle East; what steps it is taking with Exxon, or Exxon and the United States, to ensure that oil from Venezuela will not be diverted from Canada to meet American needs this winter; and what steps it is taking to enter into possible bilateral negotiations with Venezuela, Libya, Nigeria or any other country which has state-owned marketing organizations which are prepared to supply us with oil.
We in this party have been urging the minister for a long time to set up a national petroleum corporation for

November 5, 1973
Oil and Gas
the purpose of entering into these long-term arrangements and to ensure that oil is earmarked for the Canadian people and equitably distributed to all regions that need it.
I am not wedded to any name: if the minister does not want to call it a national petroleum corporation, he can call it any other name. He could call it "Macdonald's Somersault No. 7".


Donald Stovel Macdonald: Macdonald's hamburgers.


Thomas Clement (Tommy) Douglas: Call it whatever you like. The minister said the other day that a national petroleum corporation would not meet our immediate problems. I suggest that he is quite wrong. A national petroleum corporation that could now enter into negotiations with Venezuela and some of the African countries might be the solution to provide us with the extra half million barrels a day that we desperately need if there are not to be a great many hardships experienced in eastern Canada.
In his statement of last Thursday, the minister said, "Although it is recognized that security of supply for priority oil users must be protected, the government is reluctant to interfere at this stage with the normal marketing arrangements in the industry." The normal marketing arrangements in the industry must take second place to the needs of the people in eastern Canada. The minister and the government are eventually going to be compelled to set up a national petroleum corporation. If I may adopt the slogan which the government had some years ago for its winter works program: Why wait for spring, do it now.


Some hon. Members:: Hear, hear!


Francis Alvin George Hamilton: Mr. Speaker, the debate tonight is part of a recurring debate that has been going on in the House since May 28 and in the committee on energy, mines and resources since February. Most of us in this House who listened to the hon. member who introduced the motion for the subject under discussion can agree with almost everything he said, because at this particular time it is not a matter that can be dealt with satisfactorily by looking at it purely as an opportunity for partisan advantage.


Some hon. Members:: Hear, hear!


Francis Alvin George Hamilton: Last Thursday evening I said I was deeply disappointed at the evidence I saw in the September 4 statement by the Prime Minister (Mr. Trudeau), and the backing-off from that statement last Thursday is pure, unadulterated sham and humbug, trying to pretend to the consumers that he is their friend. It is obvious to even the smallest child who reads that the idea that Canada could turn back the tide, as King Canute tried to do, is silly and fraudulent.
Tonight the hon. member for Nanaimo-Cowichan-The Islands (Mr. Douglas) should be congratulated for bringing the debate back where it should be, namely, to thinking of the needs of the Canadian people. The subject of the debate tonight is the people of eastern Canada. I hope the hon. member for Nanaimo-Cowiehan-The Islands will forgive me, but I would like to add to that the people of British Columbia, because they will be suffering just as

much. Their supply situation is as dangerous as that of the people on the east coast, in particular the islanders.
Tonight we are asked to put our views forward about the procuring of alternative sources of oil for eastern Canada and, I hope, British Columbia. I know that under the tone of this debate I should not recall to the minister the many answers I heard him give in this House and in committee when I warned him and asked him to warn the people of Montreal and eastern Canada of their danger. The minister does not have to look up the dates; he must know them. Some of the dates are January 10, 1973; January 11, 1973; January 23, 1973; and March 7, 1973. I could list 20 different references.
The minister will remember my concern about going to Venezuela last spring, going to Nigeria and, if necessary, even to Libya. I recall in the May 28 debate, which I mentioned the other night, putting forward the fact that the Nigerian government, through its intercity sales organization, was offering anybody 100,000 barrels a day on a long-term contract. No action was taken.
Like the hon. member who introduced this motion, I believe it is too late for recrimination. I will simply leave it by reading one of my questions and the answer. This indicates the type of frustration some of us felt. On January 11, 1973, as recorded at page 168 of Hansard, I asked the minister the following question:
... has the minister reached the conclusion that it would be a wise policy to warn the people of Montreal and the marketing district of Montreal that if there is any cut-off in the Portland pipeline to help the Americans out of their emergency the people would have only about 60 days supply?
The minister replied:
We are confident that there will be adequate supplies not only in the Montreal refinery area but elsewhere in Canada for Canadian consumption.
I then asked the following question:
Has the minister seen fit to consult with the government of Quebec in order to arrange a rationing plan in case there is such an emergency?
The minister replied that rationing was one of the possibilities, but he did not see any particular danger. I do not want to pound home this fact. The reason I mention it is that I hope he will not take our advice believing in any sense that we are trying to scuttle him as a minister, or scuttle the government as a government. We simply want to let the people of Canada know that when there is a threat to the comfort or safety of citizens in any part of the country, we in this House pull together as Canadians.


Some hon. Members:: Hear, hear!


Francis Alvin George Hamilton: I gather from reading the press and listening to the electronic media that the minister has made an approach to Venezuela, admittedly four or five months late, and that the Venezuelan government has restated the position that it took five years ago, namely, that it has hydrocarbon products to sell to any country provided that country has established a government agency to act as purchaser. Because of its long experience of the actions of private
November 5, 1973

enterprise corporations which have sold most of its products in the past, it will only deal with a national entity.
That is how I understand the situation. I do not think there is any question in the mind of anyone that if this is the term and condition that Venezuela or any other country wants, we should set up some form of national energy commission to go there and buy the oil.


Some hon. Members:: Hear, hear!


Francis Alvin George Hamilton: I do not
care what the name of it is, as long as they are satisfied; and I gather from the Venezuelans that they do not care what it is called. They will sell to that entity what oil they have and it can then be made available to the distributive agencies in this country. The main thing I want to say to the minister is this: Do it now. Don't wait for next spring when the cries are being sent up from deficit areas remote from the main supply areas.
That is a simple request. I know that if the minister takes action along these lines, the NDP will support him. I know that every party in this House will support him on the ground that he is making sure we are provided with the oil necessary to meet our needs. Incidentally, on that point, hardly a day passes without news, through the grapevine which is used by those who sell oil around the world, of someone who has spot oil for sale. If the existing corporations prefer to use their own supply sources and are not interested in this spot oil, then maybe this new energy entity would be interested. But do not let these questions divide us. If the minister is having trouble with his colleagues, he has one responsibility to himself and to the people of this country-to resign and tell us why.


Some hon. Members:: Hear, hear!


Francis Alvin George Hamilton: I would think that from what has been said in the House tonight the Governor General would know there are enough people in this chamber to form a government to do the very thing I am talking about. Let it be clearly understood that when the people of this country are in danger of physical discomfort this winter-as they are in danger- we pull together.
The hon. member for Nanaimo-Cowichan-The Islands raised the question of how much we would be short, and whether we would be short. I do not think he would mind if I said to him that any person who assumes there will be no shortage does not know what he is talking about. There is bound to be a shortage. If 25 per cent of our oil comes from the Middle East, and if we can believe the Arab nations when they say they will cut back supplies by 25 per cent, we face the prospect of losing 50,000 barrels a day as a minimum-more if supplies are reduced by 30 per cent the next month.
I think we should go out and make sure the oil is available. The nations of the OECD made an agreement early last spring to share what oil was available. But we all noticed in February and March that four of the European countries concerned made a deal with Libya. We noticed, too, that the United States went to Venezuela five months ago. That is when we should have been there looking after the people of Canada. I am simply pointing
Oil and Gas
out that once the demand is ascertained, we can meet it if necessary; buy it from offshore sources if possible, and I believe there is a 9C per cent chance that we can. If we cannot, we can still meet it from western Canadian sources, provided we quit this abrasive, confrontation type of politics we have been witnessing.
Believe me, those of us who come from producing areas are not poor Canadians. If a price sacrifice is required from us, tell us what the terms are and we will meet the challenge. But treat us as human beings you can talk to and trust.


Some hon. Members:: Hear, hear!


Francis Alvin George Hamilton: I do not
want to press that point, because I hope the words which have been written and spoken in the last four or five days by many people will be forgotten as soon as possible and that as Canadians we can sit down together and get this show on the road again. But I do suggest to the minister that when he meets with his colleagues on November 23 he should tell them it must be assumed there will be a shortage in spite of all our efforts-and I do not say there will necessarily be a shortage if certain things are done. But he should be in a position to tell them that an inventory has been taken of all oil-carrying trucks in eastern Canada and in British Columbia, and of all the rail tank cars in Canada, and that plans have been worked out to spot them in the event of shortages this winter. Suppose a seven-day storm hits Nova Scotia, New Brunswick, Prince Edward Island, Newfoundland or any part of Quebec or Ontario. The people affected should know there is something ready to move in from another part of Canada to ensure they do not go cold in their homes.
I should like to say a few words about storage. I happen to know that in many parts of eastern Canada storage tanks which should be full are empty. I should like to see the government speaking to the provincial ministers who have the power to deal with this situation, ascertain where the empty storage exists and see that it is filled before the freeze hits us at Christmas time. I should like to see the Minister of Finance (Mr. Turner) stand up here tomorrow and promise an accelerated write-off, the same as was given to big business, to anyone who will undertake to put up increased storage facilities. After all, the hon. gentleman was quick enough to impose the export tax which directly affected Alberta revenues. If he did this, the extra storage would be put up and it would serve us well not only this winter but next winter too.
Now I should like to say a word about conservation. I have a file here, as thick as anyone would wish to read, setting out all the ways in which energy can be saved. As an example, despite all the innovation made available by the National Research Council, the insulation of our homes is extremely inefficient. We could save 20 per cent on the fuel bill of every home in this country. Likewise, large quantities of gasoline could be saved if we were to change our driving habits. Speeds over 50 miles an hour use up 20 per cent extra fuel. Let us ask the provinces to enforce a 50 miles an hour speed limit on our icy roads this winter. We could take similar steps. For example, last week the hon. member for Saint John-Lancaster (Mr. COMMONS DEBATES
November 5, 1973
Oil and Gas
Bell), I think it was, suggested we should turn off the lights in Ottawa government offices and set an example.
I should like to conclude by hoping that tonight's discussion will give the minister the incentive and the encouragement to stand up to his party. Let him tell them that he is the Minister of Energy, Mines and Resources; that he has an obligation to the people of Canada, and will not let them down. Let him accept some of these suggestions and for once do something.
For ten years questions have been asked on this side of the House about when we are going to have an energy policy. The government has been asked what is their oil policy, what is their gas policy, what is their policy on research into non-renewables and what is the possibility of research into renewables. But departmental officials take the flat stand, and the minister backs them up, that they are only concerned with those things that are nonrenewable. The Department of Energy, Mines and Resources has jurisdiction over all resources, not just non-renewables.
I know that not 50 years but seven years from now the source of alternative supply will be increasingly the renewable type of resource, at prices of around $4.50 a barrel for oil and 37 cents per thousand cubic feet of gas, prices that are much lower than today's. These renewable resources are available all around us, in the garbage of our cities, the animal waste of our farms, the sawdust and the bark of our forest industry products. These will provide us with renewable resources and with energy at cheaper prices.
However, nothing is being done along this line because of this worship of the fact that traditionally the department has only been responsible for non-renewable resources and its officials would not be caught dead dealing with such a thing as biomass, the Anglo-Saxon for which is "cow manure". I have known cases where civil servants have been asked to do this sort of work, but they say, "This sounds like agriculture so let's turn it over to that department". Then the Department of Agriculture replies, "This sounds like energy; let's turn it over to them". I have even known a case where the Minister of the Environment (Mr. Davis) has studied a certain proposal and said, "It sounds like agriculture to us" and around the circle we go again.
The minister and his colleagues were elected to make decisions and to give instructions occasionally. So for heaven's sake let them make decisions and take them, at least on such an important subject as this, out of the hands of civil servants who do not want to muddy their feet by raising such mundane subjects as garbage, animal waste and bark. These, Mr. Speaker, are some of our many renewable resources.
I think I have made my point. I hope that all members of my party feel the same way as I. When it comes to facing a challenge before our nation on any issue, I hope hon. members opposite will never find the Progressive Conservative Party lacking in positive proposals.

[ Translation]


Charles-Arthur Gauthier: Mr. Speaker, first of all I should like to congratulate the New Democratic Party representatives for having brought up this matter of extreme urgency, especially for the eastern provinces and in particular for the province of Quebec. I know that we shall probably not solve much tonight but at least, Mr. Speaker, we shall have had the satisfaction of hearing the minister, who certainly has something to say about the oil question, and this will probably reassure the population.
I assure you, Mr. Speaker, that the situation in Quebec is far from being reassuring. The election fever in Quebec is now over. As soon as it is, the prices of all types of products are increased, and we must think of the crises that always follow elections.
We are still influenced by the fact that for months the governments kept quiet, probably not to affect their electoral campaign; they have said nothing to the people who are really apprehensive at the thought of the coming winter.
I think that now is the time-and for that I wish to congratulate my hon. colleague from the New Democratic Party-to tell the population what could happen this winter. Will the minister call for fuel rationing? No one knows. But I am sure that the minister knows it more than we do. We have only the newspapers to keep informed, and we read again tonight that Japan wants to secure its supplies. I quote:
It is a well-known fact that some big countries embassies have often a plethora of personnel, which have been accused, more than once, of being pseudo-diplomats, responsible in fact of intelligence work, not to speak of spying.
Unafraid of accusations of this type, Tokyo has announced recently that it will appoint "oil attaches" to its embassies in important countries which are at the same time oil producers and consumers ''so as to be aware of what is going on ... of what is afoot on the oil front and thus better secure supplies to Japan in times of crisis." Their first appointments should be made shortly.
In another column headed "President Nixon and Energy", one can read and I quote:
President Nixon will announce this week new measures to deal with the shortage of energy in the United States which should be much more serious next winter than United States authorities were willing to admit up to now.
In another column the Netherlands, France, Italy and Greece are mentioned. It is an oil rush. And what is happening to us in Canada, one of the countries that will be running after supply? I think it is time for self-examination. However, I would not want to reject all the blame on the federal government. Today, people in Quebec as well as in the Maritimes ask: What is Ottawa going to do, what can it do? I think that by the same token that will be a good lesson to separatists and show them that they often need the central government because successive administrations in Quebec were somewhat at fault. When there was talk of a pipeline, they feared being fed and accommodated by the west. Today we are caught and unfortunately it is a bit late to wake up.
Quebec is ready now but the oil is not there, conflicts worsen and we are faced with a fait accompli. That is why we are still happy to be able to go to the central government so it will try and reassure somewhat the people on
November 5, 1973

the possibility of securing home heating oil for this winter.
If we cannot secure supply in the usual manner from Saudi Arabia or other countries we have other openings because I heard some reassuring words from the minister. Perhaps he knows other sources of supplies. We are happy that he can have such sources, and we hope he will find some.
I am pleased that this debate took place, not to put all the blame on the federal government, because in Quebec as elsewhere we have all something to be blamed for. We have yet to learn that to govern is to foresee and I hope that the minister will try to accommodate us to the best of his ability so that this winter the central government, together with the Quebec authorities, reach some decisions, not to put all their eggs in the same basket but to ensure a supply that will eliminate conflicts.
I think that it is our own country which can provide us with the best protection. In my view, there is nothing like doing your own thing and if all the eastern provinces, including Quebec, can draw from their own gas resources, they ought to stop counting on other sources in order to meet their daily requirements.


Donald Stovel Macdonald: Mr. Speaker, in speaking to the motion tonight I should like to follow the general framework put forward in the motion itself, speaking first of the question of supplies to meet the needs of eastern Canada; then I will talk about the potential of interruption and about the measures that have been and will be taken during the next 45 days to meet the demands of the eastern Canadian market.
Secondly, I would talk about the measures we would propose if in fact the threatened interruptions, and they are just threatened and not actual at the present time, become a fact. And, thirdly, I will talk about the system of rationing which would be contemplated if, indeed, interruption reaches a certain level and further rationing of supply does become essential.
I propose, then, to talk firstly of the question of interruption of overseas supply to eastern Canada. Probably the best starting point is the communique issued by the Organization of Arab Petroleum Exporting Countries, bearing Cairo dateline of November 4, 1973, which might be useful to have on the record. I quote;
The Arab oil ministers met at Kuwait for the second time on November 4 and 5, 1973, and studied the way their first decision was implemented and its result. They have made the decision including:
1.	The total reduction of production by every Arab state implementing the decision shall be 25 per cent of the production of the month of September including the quantities deducted as a result of cutting off oil supplies to the U.S. and the Dutch market. After that the reduction will continue in December by 5 per cent of November production. The reduction will not affect the share of which every friendly state has been importing Arab oil exporting countries during the first nine months of the current year.
2.	Algerian energy minister and the Saudi oil minister shall be sent to the Western capitals to explain the Arab viewpoint
Oil and Gas
regarding the oil decision made at the two meetings held by the
Arab oil minister.
To summarize the Arab oil position at the present time as disclosed to us by the diplomatic activity of Canadian representatives abroad and by the activities of my colleague, the Secretary of State for External Affairs (Mr. Sharp), the Arab countries have basically divided their oil customers into three lists: firstly, the friendly countries in which list they include the United Kingdom, France and certain other countries to whom, as the report indicates, there would be no cutback whatsoever in oil supplies base upon the first three months of the current year; secondly is the neutral list to which Canada has been assigned, countries which are not to be subject to curtailment as are the so-called unfriendly countries on the third list, such as the United States and The Netherlands.
Those on the neutral list will be entitled to an equitable division of the reduced production from the Arab oil areas. How much that reduced oil production will be depends on a number of variables which cannot be determined at the moment, including how large is the amount to be withdrawn from the United States and the Netherlands, how many more countries will be added to the friendly list and therefore will have first claim on the reduced production, and the number of neutral countries.
So at the moment of speaking, the actual amount of reduction cannot be known in the case of any particular country on that neutral list, except that we do know what the so-called unfriendly group of countries, the United States and The Netherlands, can count on for the time being until the disagreement between the Arab countries and Israel is resolved or until such period of time as the Arab states will be cutting off oil supplies to these two countries.
I suppose the first matter to be considered is that while it is difficult, on the basis of that information, to have a full reading of the amount to be affected, we do at least know some dimensions of the Arab oil supply and, therefore, what some dimensions of the 25 per cent cut for November will be. The announced original cutback of 25 per cent for November, to be followed by a further 5 per cent each month to be extended to the end of the current winter, represents on the average about 21 per cent of world exports of crude oil to consuming countries.
Considering our own crude oil and home heating supplies, that is, our home supplies in Canada as of October 1, we anticipate that the loss of home heating fuel in eastern Canada will be something just under 10 per cent of the estimated demand for home heating oil during that period. I think that even before the Arab-Israeli war one could fairly say there had been a breakdown in the private supply system which had hitherto been run by private organizations, that is, by the companies in eastern Canada. Indeed, the government was active during the summer to try to remove the deficiencies of this particular supply system.
I think it is fair to point out that the eastern Canadian market was partially supplied by overseas suppliers, the majority of supply came from refineries in eastern Canada which refined either west of the Ottawa Valley line in refinery centres such as Sarnia and Toronto with western Canadian crude, or east of the Ottawa Valley line refining

November 5, 1973
Oil and Gas
petroleum which came from overseas. There was, however, very substantial competition in respect of home heating fuel oil, and also in respect of gasoline and other refined products which came into the market from overseas, particularly in the form of gasoline east of the Ottawa Valley line, but in the form of home heating oil both east and west of the Ottawa Valley line.
In consequence, consumers east of the line had the advantage of prices being kept down by competition which for 10 or 12 years existed between independent distributors who were competing with their share of crude being imported, and domestic refineries which refined the product within this country. Because of this competition, however, because of the share of the market that the independents had, the refinery capacity never expanded to meet the full market demand. Of course, in the current year, when the international price of refined products went very much higher than the Canadian refined price, the independents found themselves in a financial squeeze which made it virtually prohibitive for them to buy the product abroad. What are the consequences of this policy?


Some hon. Members:: Question.


Donald Stovel Macdonald: Hon. members say "question". For 10 to 12 years the eastern consumer got a break in lower prices. In a speech made in Vancouver, the leader of the NDP (Mr. Lewis) suggested that if he had been in charge of the government, he would have established the pipeline to Montreal. The consequence would have been, if he was to assure a market such as there was in Toronto, that all through that 10 to 12-year period the consumers would have paid a higher price for the refined product.


David Lewis: Not necessarily.


Donald Stovel Macdonald: There was a period of time during which the consumer in eastern Canada got a break, and on the whole was happy to get the break.
I will just make one comment about what the hon. member for Qu'Appelle-Moose Mountain (Mr. Hamilton) had to say about the ten long years that he spent warning the government about the threatened interruption and danger to eastern Canada from the structure of the market, from the fact that the pipeline did not go to Montreal. I think it is fair to remind the House that the division of the market east and west of the Ottawa Valley line was introduced by the government of which that hon. gentleman was a member. Indeed, it was introduced by the hon. member for Prince Edward-Hastings (Mr. Hees) who was then minister of trade and commerce. So that whatever danger may exist now, existed in 1961 when that policy was introduced. Apparently the hon. gentleman was not concerned enough about the policy at the time he brought it in, but now he is.


Mr. Gillies:: That a specious reasoning; it is spurious.


Donald Stovel Macdonald: I do agree with the hon. gentleman that it is of no great avail to look back at past years. In his case he cannot afford to look back at past years because the structure of the market is one upon which he and his colleagues decided. As I have said, the

consequence of that market has been that for 10 to 12 years that eastern consumer got a break in lower prices, although the Ontario consumer paid higher prices in order to subsidize the Albertan industry and make its production possible. But with the drying up of the international supply, the eastern Canadian market has been left short of supply in the current year, and we expect that Canadian importers are making every effort to maintain their supplies of overseas oil.
In this connection the House will recall that in 1956, 1957 and 1967 our oil industry was highly successful in assuring a continuity of supply to eastern Canada. However, it must be recalled that the present crisis has more serious dimensions than the crises of past years which were largely crises of transportation rather than a physical curtailment of overseas oil. Efforts to maintain supply include at least one extraordinary purchase arrangement entered into at short notice and high cost.
The companies are, of course, well aware of the importance that the government attaches to their discharging their obligation to the community. Although the oil companies in eastern Canada have been operating essentially at capacity and at maximum middle-distillate yield since May of this year, nevertheless, they are now looking at what further steps might be taken to increase the yield of middle-distillates during the winter at the expense of heavy fuel oils. One of the ways of doing so would be to require the relaxation of certain of the regulations applicable here, and I have in mind in particular environmental regulations with regard to specifications for heavy fuel oil and home heating fuel.


Mr. Fraser:: That is a cheap way out.


Donald Stovel Macdonald: One of the principal ways of providing further supplies to the Canadian market is to try to arrange for the further movement of western Canadian crude oil to the Quebec market. Prior to the outbreak of hostilities in the Middle East, Canada was already experiencing the stringency of overseas crude oil supply in terms of very high marginal prices, if not in terms of physical shortage. As a consequence, shipments of western Canadian oil from Ontario to Quebec in September averaged 16,000 barrels a day, and in October they reached the level of about 36,000 barrels a day.
Our best estimate is that between 70,000 and 80,000 barrels a day of western oil is already scheduled to move through the Seaway in November to relieve the supply situation at Montreal, and the Ministry of Transport is chartering tanker space which could contribute another 10,000 barrels a day to this movement in November. At the same time, the proposal is to effectively bring the Ottawa Valley area of eastern Canada onto products supply from Ontario refineries, thus relieving a demand on the Montreal refining complex.
For this purpose it is proposed that a reversal be arranged in the operations of TransNorthern Pipeline and that option is being actively canvassed with the owners of TransNorthern and the co-operation of the National Energy Board. As a back-up to the Ontario supply, arrangements are also being made with prairie refineries. Some companies are already shipping heating oil by pipeline from the prairie refineries to Ontario as well as

catering for some demand in western Ontario, for example, in the Lake of the Woods area which is normally met from Sarnia and Toronto plants.
The hon. member for Qu'Appelle-Moose Mountain asked a question with regard to the availability of tank truck and tank car space. There is indeed a meeting of the transportation companies in the city tomorrow for the purpose of reporting to the government on their assessment of the availability of tank car facilities.
Finally, with regard to further possible movement of crude from Vancouver to eastern Canada, either through the Portland pipeline to Montreal or to the Atlantic area, it is dependent on tanker rates and the possibility exists of moving perhaps up to 50,000 barrels a day spare capacity in the TransMountain pipeline.
With regard to the contingency plans under way, the government has established with the industry, which has had the prime responsibility for the marketing system in Canada, a technical advisory committee on petroleum supply and demand. This committee groups the leading importers of crude oil and petroleum products in eastern Canada and will be meeting this week for the purpose of reporting again on the current status of inventories, on some possibilities within control for the purpose of shifting supplies to short areas from surplus areas, and for the purpose of participating with government in further contingency plans.
I think it is fair to observe at this point that all of these measures can be taken at this point without any damage being done to the current export trade which we have under way to U.S. markets. The crude oil deliveries to Quebec outlined previously can be made without impairing the predetermined volume of our exports to the United States. The Energy Board's established procedure is to take account of domestic needs, including Quebec requirements, prior to licensing monthly exports to the United States. At present this can be achieved without any interruption in that particular program.
Finally, in terms of the emergency situation where a special demand will be put on the western Canadian oil producing capacity, at present, as hon. members know, the industry is operating substantially at its economic capacity. Any significant increase in production, for instance to meet domestic requirements not specifically provided for on a monthly basis, and which could not be supplied out of inventory, would require emergency production measures in Alberta. These measures, involving relaxation of conservation practices such as gas flaring, would require the approval of the Alberta Energy Conservation Board.


Peter Colwell Bawden: You had better phone them.


Donald Stovel Macdonald: I would point out to the hon. member for Calgary South (Mr. Bawden) that up to the moment we have not had an interruption in supplies.
The additional production which would be forthcoming is of rather modest proportions, 50,000 to 100,000 barrels per day for a few months, versus the 100,000 to 150,000 barrels per day previously advised; but the figures are not insignificant and they would, of course, depend on the judgment of the Alberta board. If emergency production
Oil and Gas
capability were called upon immediately, there would be pipeline capacity to handle an additional 35,000 barrels per day into Ontario for eastward transportation by vessel.
In addition, the government has been authorized and is currently in the process of supplementing individual corporate purchases with purchases for government account, particularly for distillate heating oil supplies, to cover any interruption that might occur during the coming winter.
I have indicated a number of ways, both domestic and foreign, in which supplies of oil to the eastern Canadian market would be supplemented. Now I would like to make a brief reference to some of the means that could be used in order to control the demand curve, the way in which a voluntary emergency use restraint program would be introduced, one in fact that has been prepared; and, secondly, I wish to indicate plans that are being completed for a mandatory allocation program in case it is required.
First I wish to make reference to the voluntary emergency use restraint program which is available for implementation at such time as there is an interruption. Fuel oil requirements for the heating of federal buildings would be reduced by turning down the thermostats three degrees to five degrees and making certain adjustments in air-conditioning and ventilation equipment. Secondly, fuel oil requirements for the heating of commercial buildings would be reduced by these same measures. The government of Ontario has indicated its wish to co-operate in such a program, and the other provincial governments will be asked to co-operate in the same way.
Fuel oil requirements for homes would be reduced by turning down thermostats three degrees, with the temperature to be kept at the 70-degree level. Fourthly, fuel oil requirements for space heating in industrial buildings would be lowered by similar temperature and ventilation adjustments, but no restrictions are planned at the moment in fuel supply for the manufacturing processes.


An hon. Member:: Wear an extra sweater.


Mr. Deputy Speaker:: Order, please, it is becoming a little difficult for the Chair to hear the words of the minister.


Donald Stovel Macdonald: Thank you, Mr. Speaker. If there is full co-operation across Canada in this program, fuel oil requirements could be cut by about 10 per cent. This would be the result of the voluntary program.
The next stage in demand control would be emergency requirement measures to reduce demand by a mandatory allocation program. Should the oil supply fall below 10 per cent of demand, a mandatory allocation program would be introduced. Under this plan, wholesalers of petroleum products will cut back on their deliveries by a percentage equivalent to the supply shortfall. The more essential industries will continue to receive close to their requirements in order to avoid any restrictions on food supplies and other essential goods and services.
A mandatory program is now under preparation but it is not expected to be required. However, if it should be required it will be quickly implemented in order to ensure equity of energy supply throughout the country and the full protection of essential services.

November 5, 1973
Oil and Gas


Robert Lorne Stanfield: Is this based on consultation?


Donald Stovel Macdonald: Such a program would be employed up to the point at which the supply of oil fell 25 per cent below demand. Only then would it be necessary to institute a formal rationing program. The Leader of the Opposition (Mr. Stanfield) has said that basically this is unconstitutional.


Robert Lorne Stanfield: I did not, Mr. Speaker. I apologize for interrupting the minister. I asked if that is based on consultation.


Donald Stovel Macdonald: Oh, I see. I would point out to the Leader of the Opposition, who has had his mouth open through most of my speech rather than his ears, that we are talking about a program which we do not expect will come into existence but which has been a matter of discussion with, among others, the Alberta Energy Conservation Board.


Some hon. Members:: Hear, hear!


Donald Stovel Macdonald: I would think that, unlike the Leader of the Opposition-


Mr. Deputy Speaker:: Order, please. Is the Leader of the Opposition (Mr. Stanfield) rising on a point of order?


Robert Lorne Stanfield: No, Mr. Speaker, not on a point of order but just to ask if the minister would permit a question.


Donald Stovel Macdonald: I will be glad to have a question, but first I will complete my remarks. Before the interruption I was pointing out that such a program would be implemented up to the point at which the supply of oil fell 25 per cent below demand. Only then would it be necessary to institute a formal rationing program.
Within the federal government a special committee has been formed, representative of the relevant departments, for the purpose of planning and effecting such measures if they should be required, and the assistance of the industry has been enlisted through the technical liaison committee. All I can say, again, is that there have not been these interruptions yet, but if the Arab states continue to go forward with their intentions there will be at least some diversion of oil supplies from the Canadian market. On this basis, through the acquisition of supplies, is necessary for government account-and by saying so I do not absolve the industry from taking special measures to acquire supplies-and through transfers from western Canada, either through the Seaway or by tank trucks and tank cars to eastern Canada, and by efforts to restrict demand on unessential services, we would seek to provide for the contingency which we all anticipate this winter. In conclusion, we hope we will have the co-operation of hon. gentlemen on all sides of the House should this become necessary.


Robert Lorne Stanfield: Would the minister indicate what kind of consultative machinery has been established with regard to the hypothetical compulsory rationing system which will only come into effect if it is really necessary, not only with the Alberta people but with the people who may be affected by the rationing? What consultative machinery

has been set up, and has the Secretary of State for External Affairs (Mr. Sharp) been included in this-because at least he may be able to turn out the lights in his own office building even if he cannot do anything with regard to the Arab states?


Donald Stovel Macdonald: As I indicated in my remarks, which the hon. gentleman heard, we have already discussed these programs with the minister of energy for the province of Ontario and he has indicated the wish of his government to give support. We have discussed the matter with a number of provincial premiers, and I anticipate I will be meeting the Premier of New Brunswick during the current week and anticipate the possibility of meeting all five eastern premiers at a convenient date in the immediate future.
With regard to further supplies of oil for the eastern Canadian market, as I said, representatives of the Alberta board are participating in this particular committee. So that indeed there have been extensive consultations, and we would hope to have the co-operation of all provinces in putting the programs into effect.


Mr. Coates:: Mr. Speaker-


Mr. Deputy Speaker:: Order. The Chair finds itself in some difficulty. I gave the minister extra time because his speech did provoke numerous sallies, particularly between the front benches, which I thought were in the nature of interruptions. The minister has gone over his time, but if it is the wish of the House that members ask questions, I will recognize the hon. member for Cumberland-Colches-ter North (Mr. Coates), the hon. member for Nanaimo-Cowichan-The Islands (Mr. Douglas), the hon. member for Scarborough East (Mr. Stackhouse), and the hon. member for Prince George-Peace River (Mr. Oberle) on questions.


Some hon. Members:: Agreed.


An hon. Member:: No.


Mr. Deputy Speaker:: It is not agreed.


Donald Stovel Macdonald: Mr. Speaker, perhaps you could ask again whether the House would permit questions. If I understood correctly, you said it was not agreed.


Mr. Deputy Speaker:: Somebody on my right said no.


An hon. Member:: John Reid said no.


Donald Stovel Macdonald: I wonder, Mr. Speaker, if you would put the question again. I would be delighted to have questions.


Mr. Deputy Speaker:: Is it agreed?


Some hon. Members:: Agreed.


Mr. Deputy Speaker:: The hon. member for Cumberland-Colchester North (Mr. Coates).


Robert Carman Coates: Mr. Speaker, I wish to speak, not to ask a question of the minister.
November 5, 1973


Thomas Clement (Tommy) Douglas: I have a brief question for the minister, Mr. Speaker. He has dealt mainly with the possible curtailment of supplies of oil from the Middle East, upon which we have depended for about 25 per cent of our imports. He said nothing about security of supply from Venezuela, upon which we depend for about 60 per cent of our imports. Has the minister had any consultation with Exxon, or the government of Venezuela which would indicate that the amount of oil which we usually import from Venezuela will be available this coming winter?


Donald Stovel Macdonald: Mr. Speaker, I have discussed this question with the government of Venezuela. They expressed it as their position that all existing contracts should be honoured in their terms, which in specific terms means that the producing companies in that country would be expected to make the deliveries that they have contracted, wherever that may be, and particularly to Canada. From that government's standpoint it is their intention to see that their contracts are honoured.
It is difficult to nail down the question of whether there would be intervention of the companies, but-I have said it before and I will say it again-we would expect that the companies, Imperial, Shell Canada and Gulf would continue to honour their contracts and their obligations to the Canadian market. In the case of companies like Imperial and Texaco, they control the acquisition and overseas shipment of their particular supplies. They have made this point to us, and we intend to hold them to their obligations to meet the Canadian market.
One aspect has come up, although it has not been confirmed, and that is that Venezuela has in contemplation the possibility of taking their royalty in crude rather than in terms of cash payments. We have a mission in Venezuela which is active at the moment in pursuing that. At the moment we do not anticipate interruptions in our Venezuelan supply, although they will bear careful watching as time goes on.


Mr. Stackhouse:: In light of the minister's stress on the hypothetical nature of his rationing proposals, and in light of the rumours in Toronto at the weekend that arrangements for printing of ration coupons, and so on, have been made, would the minister inform the House if any such arrangements have been made?


Donald Stovel Macdonald: Mr. Speaker, I cannot specifically say if they have been made or not, as this falls within the responsibility of the Minister of Supply and Services (Mr. Goyer). However, I think it would be a wise precaution, in view of the fact that it would take some time to prepare this particular system, to take all steps to put it in place just as soon as it would be needed.


Mr. Oberle:: Mr. Speaker, in light of the export tax on crude oil to the United States, and in light of the drastic measures taken by Westcoast Transmission of British Columbia to curtail some of the commitments to the United States, what steps has the minister taken to assure supplies of home heating fuels to consumers in British Columbia this winter, in particular since they have just finished facing a crisis with natural gas?
Oil and Gas


Donald Stovel Macdonald: Mr. Speaker, the British Columbia market is one that will bear careful watching in this regard. We will look at the possibility of increasing the throughout of the Transmission pipeline in order to ensure additional supplies of home heating oil to British Columbia. We anticipate co-operation by both suppliers and users on that line, but there may be a need to supplement present supplies and this is one of the circumstances under consideration now.


Frank Oberle: Does the minister expect there to be a cut-off of supplies from offshore suppliers of that commodity?


Donald Stovel Macdonald: Of home heating oil?


Frank Oberle: Yes.


Donald Stovel Macdonald: I believe the inventories have been down, and very probably for the commercial reasons that they have been down in eastern Canada. In the case of the British Columbia market there is the advantage of a direct pipeline connection to refinery capacity and it is believed that arrangements to supply can be made, but it is a situation that bears careful watching.


John Howard Lundrigan: Mr. Speaker, the minister indicated that he has had some consultation with the Ontario government and plans next week to discuss the matter with the Premier of New Brunswick-


Donald Stovel Macdonald: This week.


John Howard Lundrigan: -this week, and some time in the future with the premiers of the other Atlantic provinces. Is he telling the House that he has not to date, bearing in mind the almost imminent problem facing the eastern part of Canada and the Atlantic provinces with respect to supply, apprised the other premiers of the circumstances with respect to supply, or even his officials? I hope he can say that his officials have made detailed indications to the Atlantic premiers on the matter of supply.


Donald Stovel Macdonald: Mr. Speaker, I would remind the hon. gentleman that there has been no supply interruption as yet. It seems appropriate, in anticipation of a decision by the Arab states, to have such a meeting. Initiative has been taken to see if we can arrange a meeting with either the premiers or the responsible ministers for the purpose of apprising them of the facts of the situation and of the kind of measures which we have in contemplation.


John Howard Lundrigan: Is the minister saying, for the public record, that he has not taken the premiers of the Atlantic provinces into his confidence? He has stood here tonight and told us about the possibility of rationing and about turning thermostats down. Is he saying that he has not told the men who are responsible for over two million Canadians that there will be a supply interruption or a rationing problem?


Donald Stovel Macdonald: As I said, Mr. Speaker, and I will repeat it again for the hon. member, the interruption is potential only. I think it is advisable that we should

November 5, 1973
Oil and Gas
have full discussions, however, and arrangements are now being made for that.


Mr. Deputy Speaker:: The hon. member for Vancouver South (Mr. Fraser), followed by the hon. member for Labelle (Mr. Dupras), followed by the hon. member for Wellington-Grey-Dufferin-Waterloo (Mr. Beatty).


Stanley Howard Knowles: I rise on a point of order, Mr. Speaker.


Mr. Deputy Speaker:: The hon. member for Winnipeg North Centre (Mr. Knowles) on a point of order.


Stanley Howard Knowles: Mr. Speaker, when we agreed some minutes ago to continue the minister's time for questions to be put to him, Your Honour had named about four questioners and we thought that we were agreeing to a limited question period. But if this goes on there will be no more speakers. We think there should be a cut-off fairly soon.


Mr. Deputy Speaker:: I will recognize four questioners, if I may: the hon. member for Vancouver South (Mr. Fraser), the hon. member for Labelle (Mr. Dupras), the hon. member for Wellington-Grey-Dufferin-Waterloo (Mr. Beatty), and the fourth as my eye chances.


John Allen Fraser: The minister spoke-


Mr. Fortin:: I rise on a point of order, Mr. Speaker.


Mr. Deputy Speaker:: The hon. member for Lotbiniere (Mr. Fortin) on a point of order.


André-Gilles Fortin: Mr. Speaker, on a point of order.


Mr. Deputy Speaker:: The hon. member for Lotbiniere is rising on a point of order.


André-Gilles Fortin: Mr. Speaker, I would like to know on what basis hon. members are allowed to ask their questions. How is it that not one member of my party was given the floor, yet I have been rising five or six times until now?


Mr. Deputy Speaker:: I shall do my best to recognize the hon. member, or one of his associates, as the fourth questioner. The hon. member for Vancouver South (Mr. Fraser).


John Allen Fraser: The minister spoke a moment ago of trying to find extra supplies of Canadian oil for the British Columbia market. In the event that supplies become short in British Columbia this winter, can the minister give us any assurance that the extra supply he contemplates will not be diverted to eastern Canada?


Donald Stovel Macdonald: Mr. Speaker, we see an obligation to look after the demands of all Canadians in this particular situation and to make an equitable distribution of excess production available for this purpose.


Mr. Dupras:: Mr. Speaker, can the minister tell us what will be the time-frame for the construction of the pipeline to Montreal?


Donald Stovel Macdonald: I would think, Mr. Speaker, that we are talking of an 18-month or two-year period, depending upon the decision. The decision is in process but, of course, an application to the National Energy Board for this will be required.


Mr. Beatty (Wellington-Grey-Dufferin-Waterloo):: Mr. Speaker, I have a short question for the minister. I wonder whether the minister or his officials have been able to work out, barring any unforeseen difficulties between now and next spring, what the cost per gallon of heating oil and gasoline will be next spring in Ontario?


Donald Stovel Macdonald: Mr. Speaker, I do not think I can do that. I think that any prediction one might have made up to this point would have been ruled out by the effect of international actions. As the hon. member knows, the government has frozen the price of these commodities in the west and in Ontario markets but is prepared, for the purpose of supply, to allow cost increases for home heating fuel oil in particular cases. The intention would be to carry that through to January.


Mr. Deputy Speaker:: The hon. member for Rimouski (Mr. Allard) is recognized for a question.
[ Translation]


Mr. Eudore Allard (Rimouski):: Mr. Speaker, my question is for the hon. Minister of Energy, Mines and Resources.
In the event of a sudden shortage of oil supplies from the Middle-East, can the hon. minister tell the House whether the CNR or CPR have an adequate number of tank cars to supply the eastern provinces, and particularly Quebec, with oil from Alberta? Do they have a sufficient number of tank cars to ensure adequate supplies or at least minimum supplies in the event of a sudden shortage of oil from the Middle East?


Donald Stovel Macdonald: Mr. Speaker, as I have just stated, officials of the railway companies and other carriers will meet tomorrow officials from my department and from the Department of Transport to discuss the possible use of means of transport such as those mentioned by the hon. member and to determine to what extent it is possible to supply the eastern Canadian market from western oil reserves. I cannot at this time tell exactly what the possibilities are but a meeting will be held tomorrow and after tomorrow I will have a better notion of the possibilities of this region.
[ English]


Mr. Deputy Speaker:: I apologize to the hon. member for Darmouth-Halifax East (Mr. Forrestall), the hon. member for Central Nova (Mr. MacKay) and to other hon. members who wished to ask questions. In the immortal words of Mr. Speaker, I hope they will be patient as they may be recognized when the next, perhaps more regular question period comes around. I now call on the hon. member for Cumberland-Colchester North (Mr. Coates).
November 5, 1973


Robert Carman Coates: Mr. Speaker, there has been a short interlude between the speech made by the Minister of Energy, Mines and Resources (Mr. Macdonald) and the beginning of my speech. Maybe, just maybe, we shall derive some benefit from that interlude, as questioners probably secured more information from the minister's answers than was contained in the minister's speech. Speaking as a member of long standing-


An hon. Member:: And good standing.


Robert Carman Coates: -and good standing, as an hon. member suggests, I am disappointed to note that the high level of debate initiated by the hon. member for Nanaimo-Cowi-chan-The Islands (Mr. Douglas), who was followed by the hon. member for Qu'appelle-Moose Mountain (Mr. Hamilton) and then by the spokesman for the Social Credit party, should have deteriorated into the usual nonsensical type of argument that was produced by the minister. Members of the other parties indicated that they were Canadians first and partisan second. They are anxious to find a solution for all Canada and want out of the mess that this government has got us into. They want to do something about it.


Some hon. Members:: Hear, hear!


Robert Carman Coates: Now, for the benefit of the minister, I want to talk about the Atlantic provinces.


An hon. Member:: He can't take it; he's leaving.


Robert Carman Coates: The minister is leaving his seat. As often happens with this government, when you talk about the Atlantic provinces the government seems to think that Canada stops at the borders of Quebec and New Brunswick. As Canadians in the Atlantic provinces, we have contributed more and received less than the people of any area of this nation. We have contributed more because we opted for Canada in 1867, and while we have watched others derive greater benefit, we have not given up on Canada. You do not hear cries about separatism from my area of Canada. However, Mr. Speaker, we feel that the government has thrown us to the wolves. It has shown unbelievable lack of foresight in making sure that we have a simple supply of sufficient fuel with which to protect ourselves and our families during the coming winter. No part of Canada faces harsher winters than the Atlantic provinces, and in no part of Canada are there fewer dollars to meet the escalating demands associated with the increasing prices of oil and gas.
One of the things my leader has offered Atlantic Canada and all Canada is the right to the benefits associated with our offshore oil and gas exploration. Yet what has this government given us? Its attitude with respect to our offshore resources has been arrogant and intransigent. Clearly, the government's attitude has affected materially the exploration for these resources. There has been no agreement. It was all right for some provinces to enlarge their territories by pushing north. The Maritimes cannot push their territory in any direction except to the sea. They are told that they cannot have their offshore resources and that they must be shared with the rest of the people of Canada. All too often the people of Atlantic
Oil and Gas
Canada feel government concern stops at the Quebec and New Brunswick border.
Again, during these days when we are debating this critical situation we hear statements concerning the expansion of the pipeline to Montreal. Mr. Speaker, we are part of Canada. If pipeline extensions are required for the protection of the public, those extensions are required for the Atlantic provinces. They should be to the Atlantic provinces. We must tear down the type of Berlin wall the government is trying to erect between Quebec and the Atlantic provinces. Indeed, Quebec has been willing and anxious to join with us in our efforts to secure justice with regard to offshore oil and gas. At the very least, the federal government should make an effort on our behalf, similar to the effort it is making with the province of Quebec, with respect to the development of our resources.
The hon. member for Qu'Appelle-Moose Mountain did not argue with the government. He tried to act as a good Canadian. He ignored the many areas in which he could have been terribly critical with regard to the government's lack of appreciation of problems that the country faces. In looking for a scapegoat, the Minister of Energy, Mines and Resources referred back to the Diefenbaker administration of 1961 and suggested that the blame for dividing eastern Canada from western Canada in the matter of oil use rests on that administration.
This government is like Rip van Winkle; it has slept and slept and slept. Suddenly it has now awakened to discover there is a crisis afoot because the situation today is not the same as it was in 1961. The hon. member for Qu'Appelle-Moose Mountain could have taken that and other situations where lack of foresight on the part of this government was glaringly obvious and raked them over the coals. That was not his objective. It was not his reason for speaking tonight. His reason was to try to find for Canadians the most realistic solution to the problems that face this country today. The Minister of Energy, Mines and Resources refused completely to accept that. All he wanted was to get into a fight with the opposition. At one point he said the Leader of the Opposition (Mr. Stanfield) sat there with his mouth open all through his speech. No wonder his mouth was open; he must have been aghast at what he was hearing from the minister.


Some hon. Members:: Hear, hear!


Robert Carman Coates: I feel certain that some Canadians who would not believe it before, can now appreciate why the Premier of Alberta and his government were shocked at the way this government has been acting with regard to the oil and gas crisis that now faces this country.
There are many other areas I would like to cover but I cannot do it in the 15 minutes available to me. However, I want to point out that this government should have been doing something that was initiated by the Diefenbaker government in 1958. That was the development of a national power grid. That concept was kicked off by the then prime minister, the right hon. member for Prince Albert (Mr. Diefenbaker), in 1958 during a speech in Kitimat. It was followed up by the hon. member for Qu'Appelle-Moose Mountain. When this government took

November 5, 1973
Oil and Gas
office in 1963, it laid it to rest. It has been buried ever since. That is a vital and important link in producing energy equality in this country today.
This government should have been moving forward with all the energy at its disposal toward harnessing the Bay of Fundy tides. Every member from the maritime provinces, regardless of political affiliation, agreed we should move forward with the development of power from the Fundy tides. What happened? It took over a year to convince the government it should re-examine the 1969 tidal power report which said that although the project was feasible, it was not possible because of the high interest rates.
Between 1969 and the spring of 1971, all members from the maritimes, regardless of party, had to fight with the government in order to get the report re-examined. Where is it now? It has been in the process of being re-examined for 2V4 years. We will soon have to set up another committee to find the re-examiners. It just goes on and on. That is a resource that would have made a tremendous difference to the energy supply of the Atlantic provinces.


Some hon. Members:: Hear, hear!


Robert Carman Coates: If it had been undertaken in 1969, we would be halfway toward the development of one of the great power potentials of this country. It ranks with the South Saskatchewan dam, the Columbia River system, the St. Lawrence Seaway and other great Canadian projects. It would have made a great difference in eliminating regional economic disparity in our area. It would have produced a resource the whole nation could have utilized, and it would have alleviated to a tremendous degree the problems we face today.
I could go on and on but I will just say this, if this government thinks it can solve the crisis we now face by fighting with the other parties in this House of Commons, it has to be out of its mind. The attitude of the Minister of Energy, Mines and Resources has to change drastically, especially if he is now going to meet with the premiers of the other provinces. Are we to get the same kind of reaction from the other premiers that he unfortunately got from the premier of Alberta? I hope not. I hope we do not get the kind of reaction that was indicated here tonight to the hon. member for Qu'Appelle-Moose Mountain and the hon. member for Nanaimo-Cowichan-The Islands for the type of realistic, sensible Canadian speeches they made with no indication of partisan politics associated with them.
This matter is too important to all the people of Canada to be putting up with partisan politics. The minister had better realize that fact and start meeting with all members of parliament on an equal footing, to try to collect from them the very best he can in order to solve the most serious crisis that has faced this country in a long, long time.


Some hon. Members:: Hear, hear!


David Lewis: Mr. Speaker, I fully agree with the last speaker about the need not to be too partisan. I cannot quite agree that he carried out his injunction in his own speech. I suggest the debate has

already proved valuable. We have had some information this evening in the spirit in which the last speaker suggested. I am not going to castigate the minister for not having all the necessary information at his fingertips.


An hon. Member:: Why not?


David Lewis: I do not think it is possible. I do not think it would be possible for any member of this House, except some irresponsible catcaller, to have immediately available all the information about the cutback from the Middle East, a possible cutback from Venezuela, what may be available from tankers moving oil from western Canada to eastern Canada, and all the rest. I do not think any reasonable person should ask for statistical data of that sort at this stage. However, I think it is important to have this debate and get from the government at least some indication as to what it is thinking and is preparing to do. What is even more important is to have the Canadian people, particularly in eastern Canada and British Columbia, and indeed throughout the country, alerted to the problems that may face them this winter.
The first point I would underline is there now appears to be agreement among three parties, the other party did not say anything about it, that we need to have some kind of national agency for direct purchase of oil that may be available from Nigeria, Libya or Venezuela, as well as oil that may be available elsewhere. It should be a direct agency of the Canadian government. I suggest that is one of the most certain ways of guaranteeing supply to eastern Canada.
The hon. member for Qu'Appelle-Moose Mountain (Mr. Hamilton) said that he is in favour of such an agency. I hope he was speaking for all his colleagues, including the 19 Conservative members from Alberta. I assume he spoke for all his colleagues. The idea of a national petroleum corporation would then receive the support of the Conservatives. We have proposed it for many months, so the government can rely on our support. Therefore, there is no reason whatever why the government should delay setting up this essential national agency to protect Canadians, east and west, against the failure of supply of oil products in this country.
Perhaps there were difficulties in cabinet about the idea of a national petroleum corporation. Of course, I do not know, but I would assume there have been some difficulties because the proposal was made by the minister's own department as long ago as last April. Otherwise I cannot for the life of me understand why there should have been this long delay, unless there was a difference of opinion. But the minister can now go back to cabinet and assure the other members of the government that this idea now has the full support of the opposition-


An hon. Member:: Oh, yeah!


David Lewis: Apparently not, because the hon. member for Edmonton Centre (Mr. Paproski) says, "Oh, yeah!" So there is not full support on the part of all members in this House.
November 5, 1973


Steve Eugene Paproski: On a question of privilege, Mr. Speaker, I did not say that, and I do not think these innuendoes should be made by the hon. member for York South (Mr. Lewis). What I said was that the government had no oil policy.


Mr. Alexander:: I heard that.


Steve Eugene Paproski: I do not appreciate what the hon. member for York South has said, and I think he should withdraw that statement.


David Lewis: I thought I heard the hon. member for Edmonton Centre make the kind of interjection which suggested he was not in agreement. I gather from his remarks on his question of privilege that he is in agreement with the hon. member for Qu'Appelle-Moose Mountain.


Steve Eugene Paproski: Again, I wish the hon. member would withdraw that statement.


Some hon. Members:: Oh, oh!


David Lewis: I am not quite sure which statement I am now being asked to withdraw.


Steve Eugene Paproski: Both.


David Lewis: Apparently I am to withdraw both. Well, I cannot. Either the hon. member is in agreement with his hon. friend from Qu'Appelle-Moose Mountain, or he is not. Assuming he is, the government knows that every member of this House is in agreement with the idea of a national petroleum corporation. If this particular gentleman is not in agreement, I still believe the majority of members in this House are in favour of such a necessary national agency to protect Canadians, and I urge the government to lose no time.
I was also disappointed that the minister should have said nothing about the extension of the pipeline. I agree with the hon. member for Cumberland-Colchester North (Mr. Coates) that the line ought not to stop in Montreal but that it should go further east. I do not take back what I said in Vancouver. I believe the division of Canada into two markets to protect the oil corporations of this country, introduced by a Tory government in 1961, may have given the people of eastern Canada a slight advantage in price for 10 or 12 years but it has now placed them in a position of danger, a position they would never have occupied had Canadian resources as well as offshore resources been available to them.
I do not accept the proposition that the extension of the pipeline would necessarily have meant large increases in the price to eastern Canadians because obviously what was needed, and has been discussed for years, is a reversible line through which western oil could flow to the east and offshore oil, as it is available, go in the other direction during certain periods, averaging the cost and offering the same price to all Canadians-and a lower price than the multinational corporations are presently imposing.
This is why we support the export tax. Members of the Conservative Party keep railing against the minister for having made Premier Lougheed mad at him. Well, if he did so on the issue of the export tax it is a good issue on
Oil and Gas
which to get him mad, in my submission. What would have been the situation had the export tax not been imposed? I made some calculations myself. It would have meant an extra amount of money, in terms of exports of about 1.2 million barrels a day, of around $57 million a month to the multinational corporations, of which the Alberta government-one talks about the Alberta people at the moment, so it is the Alberta government and people-would have got about $13 million.
So $44 million of the $57 million a month would have gone into the pockets, already well filled, of the multinational corporations. In the course of a year, the government of Alberta might have received about $150 million. But the multinational corporations would have got $533 million. Members of the House who are anxious to give this kind of money to the multinational corporations at the expense of the Canadian people are welcome to continue their catcalls and their defence of their corporate friends in the oil industry. My colleagues and I are glad that our proposal for an export tax has been accepted by the government.
I, personally, believe that the Alberta people should receive more than the Minister of Energy, Mines and Resources (Mr. Macdonald) has suggested. There is no reason why they should not get a very much larger part of the $1.90 export tax, the remainder being used in the way the government has indicated to help develop new sources of energy for the people of this country.
Let me conclude by saying this: I am convinced there is no reason for the problems which now face the people of Canada in the area of energy and petroleum resources. Our country has enough oil. Our country has enough natural gas. Our country has enough refining facilities or, if it has not, it should have. Our country has sufficient transportation facilities to meet the needs of all the people from our own Canadian resources, should there be difficulty in getting supplies from elsewhere, or, if it does not, it should have.


An hon. Member:: So move them out.


David Lewis: Whoever said that, God save this country and the people of this country if these people protecting the oil companies of western Canada were to get their hands on the levers of power at any time.


Some hon. Members:: Hear, hear!


David Lewis: The only reason our country is experiencing such major difficulty this winter is that our oil and petroleum resources have been sold out by consecutive federal and provincial governments, particularly the Social Credit and Tory governments of Alberta, to the multinational corporations without concern for the welfare and future of this country. I think that until through this parliament Canadians regain control of the natural resources of this country and take away the power that the multinational corporations now have, periodic crises are bound to continue in the future.
I warn that this winter is not the only winter of crisis in this area. As consumption and demand increases in this country and throughout the world, we will continue to
7554

November 5, 1973
Oil and Gas
have serious crises in the future, or will unless we take control of our natural resources for the benefit of Canadians instead of for the benefit of multinational corporations.


Paul Edmund McRae: Mr. Speaker, I was rather surprised at the remarks of the hon. member for Cumberland-Colchester North (Mr. Coates) who listened to the minister's speech and then said he had not heard what was said. I am surprised because the question was: What are we going to do in case of emergency? The minister clearly outlined, not in great deal but in generalities, the steps that would be taken and I should like to review those steps very briefly.
The minister indicated that with a 10 per cent cut in supplies, the government would take voluntary measures such as keeping down the use of fuel with the assistance of various agencies, private businesses, home dwellers, and so on. He went into some detail on that matter. He then talked about mandatory allotments in the event of a 25 per cent cut, with the government taking some very strong measures. With any loss of supply greater than that, he spoke of rationing. I thought the whole thing was very clear and I find it difficult to understand why the hon. member did not hear his remarks.
As a member who sat patiently all winter on the parliamentary committee on national resources and public works, I spent a great deal of time discussing the supply situation in the long term. If I recollect the various discussions that we had, it seemed to me there was an unbelievable equanimity on the Tory side in regard to this situation. I kept hearing phrases like "we have unlimited oil", "there is no shortage", "why do we want export quotas?", "all we need is more money for exploration".
Tonight I heard one or two other things as well. I must admit that during the debate on October 25. a week or so ago, I could not find anything put forward by the Tories in terms of policy; 1 heaad only negative suggestions. But I did hear two new things tonight, one in reference to a matter that had been referred to in the committee, alternate energy forms. I think the hon. member from Saskatchewan mentioned the biomass area. He has been very persistent in discussing alternate areas of supply. Certainly I think that is one that should be examined.
In addition, the hon. member mentioned a marketing board. Perhaps I did not hear him correctly, but as I understood what he said I did not hear him say that this party was in favour of the setting up of a Canadian petroleum corporation. Whether he did say so or not, I do not know; the hon. member for York South (Mr. Lewis) seemed to indicate that he thought he had. I think one of the problems we have is finding out how his party feels on this question. I did hear some very good comments about conservation, and again that is an area about which the hon. member from Saskatchewan is very much concerned.
I suggest the speeches made in the debate on energy on October 25 should be looked at very carefully. I think hon. members will find very few suggestions made by members on the opposition side I would like to ask them several questions. For example, what is their policy in regard to an all-Canadian pipeline? How do they feel about this? What is their policy in regard to a Canadian petroleum

corporation? I heard no answer to that question this evening, though I may have missed it. What is their policy on federal government involvement in development of the tar sands? I heard no discussion of that.
It is not my nature to be partisan, Mr. Speaker, so I will now deal with the issues that have been raised and continue in this vein. A question was asked during the question period today about raising more money for energy supply. I wondered all last winter whether there was money to develop additional petroleum supplies, particularly Alberta crude. I think there is a great deal of question about how much oil can be supplied from the western basin if additional money is found.
In this regard I should like to quote Professor Ken North, one of Canada's best known petroleum geologists, a man who is not employed by an oil company. According to Professor North, the CPA-that is, the Canadian Petroleum Association-forecast of reserves for the western Canadian basin is 45 billion barrels. He pointed out that 50 years of exploration, and almost 25 years since the discovery at Leduc, the combination of 250 drilling rigs, 100 to 150 seismic crews and the expenditure of more than $11 billion has discovered a little over a quarter of this quantity. All this money and time spent on discovering just over one-quarter of 45 billion barrels.
I should also like to quote the National Energy Board's review published in December of 1972, which was submitted to the committee in January, 1973. The review states:
The current remaining reserve level is about eight billion barrels with about five billion barrels having been produced. These 13 billion barrels are considered by many knowledgeable observers to be about 60 to 70 per cent of the ultimate crude reserves to be found and developed in this region outside of the frontier areas.
Whichever way one looks at it, it seems there is a total of between 15 billion to 20 billion barrels, of which we have used up six billion to seven billion barrels, leaving between nine and 12 billion barrels, a 15 years' supply at current production rates, ten years' supply if you have an exponential factor similar to past experience.
Our greatest concern in this area, aside from the situation we are facing this winter, has to be for the tar sands themselves. The tar sands are a massive oil reserve. There are some 65 billion barrels accessible through normal mining methods, and over 300 billion barrels which may become accessible by means not yet developed through in situ technology.
However, to get one billion barrels a day, which would be at least what we will need by 1980 as Alberta crude runs out. would require about $15 billion of investment, the removal of 200 million cubic yards of sand per day, the removal of oil from that sand and the involvement of a whole series of problems that are well explained and developed in a document the Alberta government drew up and which was finally dealt with by the Alberta legislature. Let me read just one passage from this document which was dealt with extensively in the last decade:
Unfortunately, however, most of the tar sands research appears to have been directed toward bituminum extraction processes, mining methods, or in situ experiments. We are not aware of any research with respect to tailings disposal, reclamation or revegetation. This apparent emphasis on winning the resource is again an
November 5, 1973

indication of the heavy influence of the conventional crude oil industry.
This is not a statement by the Committee for Independent Canada, or from Pollution Probe; it is a statement from a very serious, top-level group composing 41 people in the Alberta government and commissioned by the executive committee to put it together. There is a series of similar statements which refer to what happens to the water table when the oil is removed from the tar sands, and various conservation aspects which have not been developed. This is one important problem that has not yet been faced.
Like many members of my party, I maintain that there must be a much greater federal involvement in the tar sands development. I think this is absolutely essential, for several reasons, the first being that this is perhaps our greatest single resource and it must be developed by Canadians for Canadians. In this respect some suggest that in our industry we do not have Canadian people with the technology or ability to solve these problems. I suggest that is nonsense. This document points out that we have Canadians with the necessary skills. This potential should be developed by Canada, using Canadian technicians, and the only way to do this is through massive federal involvement.
In reference to a national petroleum corporation, I support the idea and I think this is something we are sorely in need of because of its importance. It is important for a number of reasons, one being that it will enable us to develop Canadian ownership in the industry. At the present time we own a very small portion of the industry, depending on the source one looks at, varying from one per cent to seven per cent.
The second important aspect of this whole situation is the monitoring feature. Such a monitoring feature would give the Canadian government the opportunity to see what is happening in the industry and to follow developments. This would also increase the use of our Canadian technicians, which is very important. I think it would also set the pace for Canadian development.
In relation to the acquisition of such a petroleum corporation, several approaches have been suggested. It has been suggested that the government should purchase the existing rights of one of our multinational corporations. This approach has advantages and disadvantages. I think its advantages are that such a corporation is in fact operating and holds leases and so on. One of the disadvantages is that the methods and practices used by the company are company methods and practices and it would be much more difficult for the government to obtain a change in direction. This is a decision that has to be made after viewing all the facts. I am of a mixed mind as to whether we should buy or set up our own corporation.


An hon. Member:: Where are you going to get the money?


Paul Edmund McRae: I think there are all kinds of ways of finding the money. One way would be to use a portion of the $1.90 export tax which is not going back to Alberta. One thing that rankles me a little bit is the attitude of members of the press who seem to have the feeling that all moves in this direction are the result of ideas from hon.
Oil and Gas
members in the party to my right on this side, and to the left in some senses.


An hon. Member:: It is your left-wing movement.


Paul Edmund McRae: I suggest that hon. members might look at the October 25 debate in order to see that four of the five members on this side who spoke referred to an involvement in the tar sands development; that three of the five were in favour of a national petroleum corporation, and that two were strongly interested in an all-Canadian pipeline, not one that commenced in Toronto or Sarnia but one that commenced in Manitoba using two links from the lakehead through Sault Ste. Marie.


An hon. Member:: Where are you going to get the oil at Sault Ste. Marie?


Paul Edmund McRae: I think the oil could be tapped in at Sault Ste. Marie and run back at a future time. I should like to deal with one or two other items, but I see that my time is running out. Let me mention one final point. I feel I should deal with, although I would like to deal with other conservation aspects. I refer to the $1.90 export tax which I think all Canadians must realize-


Mr. Speaker:: Order, please. I apologize to the hon. member for Fort William (Mr. McRae), but his time has expired. I should remind hon. members that we will soon be running out of time.


John Howard Lundrigan: Having made two speeches tonight, that should be plenty.


Peter Colwell Bawden: Mr. Speaker, if there is any redeeming feature of the crisis facing Canada today it is the impetus it may give this government to implement much needed decisions about energy. The most significant factor in recent times in this country has been the increasingly rapid removal of energy from the realm of economics, from common sense and into the political arena.


Some hon. Members:: Hear, hear!


Peter Colwell Bawden: Let me quote from the Toronto Star of several days ago:
While the gut issues of oil and gas prices could have been predicted several years ago, no one wanted to talk about them and there was little enthusiasm among government officials to come to grips with them then.
But now the cabinet is caught up in the frenzy of fast-changing developments and has to make crucial decisions that affect the consumer industry and public welfare.
It is ill-prepared to make these decisions, yet the world of energy is moving so fast it cannot put them off much longer.
I endorse those comments, Mr. Speaker. On the world energy scene today perhaps the focal and the crisis point is the Middle East. At the present time the Egyptian third army is encircled on the east bank of the Suez Canal. The disposition of this army and the events that take place in the next several weeks will be the biggest factors in energy supply decisions that must be taken in the coming months. Let us hope that this crisis and the difficulties will be settled. I suggest to you that if they are not settled; if the issue of prisoners being returned, and if the whole
26635-47}

November 5, 1973
Oil and Gas
matter surrounding the Suez Canal does not come to an amicable conclusion, the world this winter, Canada included, will face very cold times.
As for the time-frame, I suggest that even if the prisoner exchanges and the release of the Egyptian third army is accomplished in the near future, we will still face an ongoing crisis for many months. Surely it must be recognized that this problem, which has been a problem for the world for so many years, will not be settled in two months, three months, six months or indeed perhaps a year.
The Arab countries, starting off with a 5 per cent cut in the crude oil supply to the world, increased it to 10 per cent and subsequently named the United States and Holland as countries to which no oil would be shipped. They have some preferred countries on their list, such as Spain and Malaysia, but Canada is not one of them and I suggest that any plan for energy security in Canada in the months ahead must be made on the basis that further cuts can be expected very shortly in the supply of Middle East crude to this country. At present this represents over 30 per cent of our energy imports.
This brings me to the Canadian scene. We have seen in editorials and heard mentioned in the House on a number of occasions tonight comments regarding the security of supply mentioned in the resolution relating to the interruption of supply from foreign sources. I suggest the problem can only be solved by secure supplies which lie beneath the Canadian soil. In other words, what I am saying is that the foremost consideration in this entire problem is the development of secure reserves right here in Canada.
Over a period of many years this government has done much to discourage, and much to create disincentives for those who were willing to develop these reserves to give us the security which we required. I bring your attention first to the fact that it is recognized in this country that our greatest reserves of conventional oil and gas for the future lie in our offshore and frontier areas. In 1961 the hon. member for Qu'Appelle-Moose Mountain (Mr. Hamilton) and a Conservative government put forward regulations applying to all federal lands in offshore areas and the Northwest Territories, with the exception of Indian lands which were under separate jurisdiction. One portion of these regulations related to the mechanics of lease selection.
This land order was revoked on April 15, 1970, and has never been replaced with a new land order. Thus, at this time the industry has no knowledge of how the corridor lands will be treated. In Alberta, such corridor lands are sold back to industry on a competitive bid basis. Theoretically, the balance of the regulations are still in force. However, in early 1970 the government announced that they would be totally revised. This supposed revision has therefore been under way since that time. Meanwhile, the government has declared a moratorium on the issuance of any new permits or on the issuance of leases of old permits, even if those permits have expired. There has not been a federal land sale since late 1969.
I suggest to you, sir, that if this great source of future energy is to be available to Canadians, this government

had better get on with the job, and I challenge the minister to give us an answer to the question as to when we will see these regulations, because every time he is asked he says "soon".


Some hon. Members:: Hear, hear!


Peter Colwell Bawden: We have heard from the party to our left tonight something about multinational companies, big oil companies, and so forth. For many years that party and Canadians have been asking when they will have the opportunity to invest in Canadian resources on a footing that is equal to that of foreign investors.


Some hon. Members:: Hear, hear!


Peter Colwell Bawden: Again this government gives us no answers. The tar sands represent one of the greatest oil reserves in the world, approximately equal to the reserves of the Middle East. But what policies are we getting? Indecision, foot-dragging and vague statements, such as that from the hon. member on the other side when he said that the federal government should have an involvement in the tar sands, that they, should go ahead and develop these projects. I suggest that private enterprise and the oil industry which has done the research and is ready to go ahead with the projects should be given the clearance now. I suggest that in the absence of decisions and answers to industry, the first and very important project, the Syncrude project, will not get off the ground. As to Canadian participation, I suggest that a royalty representing 50 per cent of net profits and a great many other innovative features negotiated by the Alberta government gave Canadians a great stake in this resource.
I should like to touch upon a couple of other aspects. If we want reserves of all types of energy in this country, we will have to change the basic attitude of this government, which is one of confrontation. Not only are they engaging in confrontation with the provinces, they are engaging in a confrontation with industry. I suggest that this is getting worse by the week. A long-range energy policy in this country is a policy that lasts for seven days, and the minister must take full responsibility for that.
There is also the whole question of confidence. At present some $5 million a day is being invested in this country in the search for oil and gas. This search, I suggest, can and will only continue in an atmosphere of certainty where the rules are clear and are not changed in midstream.


Some hon. Members:: Hear, hear!


Peter Colwell Bawden: I suggest that the lack of confidence that is growing in this industry in fact exists with business all across Canada.
We have had some figures regarding price which concern us greatly. I should like to point out, however, a fact that the minister and I think most members of the House have commented upon; that is, that the price of energy in the future will go up. If we take today's price in Alberta of approximately $4 a barrel, and if we add 5 per cent a year for 25 years, we find that this works out to something like $16 a barrel. I am not sure where the price will go, but it
November 5, 1973

will certainly go up-and fast. This country will have to face the fact that $10 a barrel oil is just around the corner.
May I point out, however, that in 1961 when the consumer price index in Canada is related to natural gas and light Alberta crude and projected through to 1972, the consumer price index has gone from 100 to 139, the natural gas index had gone from 100 to 92, and the light Alberta crude index had gone from 100 to 119. In other words, the figures show a substantially smaller increase for oil and gas in this country than in the consumer price index since 1961.
With regard to oil security for eastern Canada, I would like to challenge the minister to answer the following charge. In June of 1969 the Independent Petroleum Association of Canada met with the Prime Minister (Mr. Trudeau) and his cabinet and set out in detail the problems of energy supply expected in the 1970s. At that time Ottawa was cheerfully subsidizing new eastern refineries to process overseas oil, mainly for American markets, and Alberta oilfields were producing at only half capacity. The Independent Petroleum Association urged corrective measures, including the extension of the Alberta Ontario pipeline to Montreal to give Quebec supply security.
The government refused to face up to the realities we could already foresee for the 1970s, flatly refused extension of the pipeline to Montreal, and told western Canada to peddle its oil surplus wherever it could, and that for eastern Canada the government policy was to supply the Montreal market with cheap foreign oil. Mr. Speaker, had that policy been implemented at that time we would not have the problem we have today, and the government must be reminded of it.
I would like to touch briefly on Canada's relations with the United States as a result of what has been done by the government in recent weeks and recent months. May I remind the government, and the minister in particular, that there was a supply crisis back in 1967 during the Middle East confrontation of that year. Canada and the United States co-operated in easing the crisis, with the United States delivering oil to ease the eastern Canadian pinch, and western Canada supplying more oil to American areas where transport facilities existed.
May I also remind the minister that in World War II when Canada had little developed oil, the United States saved this nation from desperate oil shortages. I would also like to point out that the province of Ontario at the present time is generating one-third of its electrical energy from coal imported from the United States.
The Interprovincial pipeline which crosses the American border to carry oil to eastern Canada, as well as the pipeline from Portland, Maine, which carries crude from foreign sources to Montreal, are subject to a presidential permit. In other words, with a single signature these pipelines could be cut off. I do not suggest that the government of the United States would be so foolish as to take that action. However, I do wish to remind the government that relations with the United States are important. These relations include energy, and Canada would be very vulnerable in the event that that country decided to take retaliatory action.
Oil and Gas
May I also say that trade is another very important matter, and if such retaliation is to be taken I believe it will be in the area of trade. Indeed the auto pact would be one of the very important matters to this country that would be threatened. May I also say that Canada has a surplus in trade in petroleum of approximately $1 billion a year. If I reflect on the recent trade figures, I would say this country, without the trade surplus resulting from oil and natural gas, would be in great difficulties.
In conclusion, I would say that the policy that this government is following is one of continued consultation-with the NDP. I have heard from speakers to my left that we must have a federal government oil company exploring for oil. I ask you, Mr. Speaker, how this party, with their disastrous experience in Saskatchewan, could suggest that such a company would be more efficiently run as a government enterprise than by free enterprise? I would also like to ask hon. members to my left, where would the government find the capital for such-


Mr. Deputy Speaker:: Order. I regret to interrupt the hon. member, but the time allotted to him has expired.


Mr. Barnett J. Danson (York North):: Mr. Speaker, when we began this debate hon. members wanted to know the plans of the minister to meet what might become a crisis situation. I think the minister has answered well. He has told us the plans as he foresees them for the present time. There are rather modest measures to achieve a 10 per cent reduction in the consumption of crude oil in this country. These are measures that all Canadians will support and, from what I have heard tonight, all parties here will support.
The only answer to the potential crisis part of the situation, as the hon. member for Calgary South (Mr. Bawden) said, is peace in the Middle East. But that will not resolve all our problems. We had a problem before the crisis in the Middle East erupted; now all parties realize how vulnerable we are in this country to external forces, particularly when our resources are not within our own control. We also thought that our resources were without limit. We failed to listen to the people who wrote "Limits to Growth." We did not want to believe that. Yet it is happening. Even the major petrochemical companies were caught off guard. I was speaking to the head of one of these companies, a multinational corporation, in New York the other day and he said even they had not foreseen it. This is quite incredible, but it is a fact. Now they find that their contracting sources of supply are not reliable.
This debate and this situation have brought us to a moment of truth in this country, regardless of the Middle East situation. It is now no longer just a group of nationalists, of academics, of some politicians and journalists, and of the almost lone voice of Walter Gordon over the years; it is now businessmen and farmers, barbers, butchers and housewives who are concerned, and I sense in this House and across the country a national consensus that we are not going to let this happen again and that we are going to use our resources for our own best purposes.
There may be some exceptions like the oil potentate from Edmonton, Sheik Peter El Acheed, but there is a determination to use our own resources not only to supply our requirements of crude and fuel oil, but also our

November 5, 1973
Oil and Gas
requirements for industry, particularly secondary industry. We have been talking tonight basically about crude, and I think that initially we must be thinking about heating oil and natural gas for heat, but there is no reason why we should be exporting the crude if we could be exporting the ethane, the ethylene and the polyethylene.
There are major secondary markets for synthetic fibres and plastics. These are out-reaching industries, oriented to future growth, and there is no reason why we cannot use our resources to upgrade our Canadian industry to a much more sophisticated form. If we are going to export, let us export the product much more downstream where there is more processing involved. In that way we should be able to establish an even more significant petrochemical industry in this country.
It occurs to me that while the mass of these resources is within the province of Alberta, right next door, in the conomic sense, is the so-called have-not province of Saskatchewan. It should not be any great trick, if agreement can be reached, to bring some of that industry into Saskatchewan at least commensurate with its own resources of oil and its share of the tar sands. If we are to keep this country together we will have to co-operate in this way, and that is something I believe the people of Alberta would accept just as people in other parts of Canada would accept it.
The extension of the pipeline, which has been mentioned a few times tonight, is something which is absolutely essential for security of supply. Not only would it give us security of supply but it would give us leverage in future bargaining. We can negotiate when we have an option. At the present time we do not have an option unless we adopt the stance that some people are suggesting, that if the Middle East cuts off oil we should cut off [DOT] grain. That kind of international blackmail is counterproductive.
I agree with the hon. member for Nanaimo-Cowichan-The Islands (Mr. Douglas), and with the honourable member for Qu'Appelle-Moose Mountain (Mr. Hamilton), that the people of the country will be behind any government which brings in such measures, even if necessarily they produce uncomfortable results in some respects. We have been loose with our reserves in the past. If it is necessary to cut down heat in our homes and offices and drive at 50 miles an hour, are we going to be mad if our lifeline is being cut off? We have been mad in the past not to consider these the important things.
This is not a time for hysteria; it is a time for determination and common sense. I am sure whatever arrangements the minister makes will be reasonable, because he is a reasonable man and will be backed not only by this House but by this country. We certainly have to back policies which will secure our resources. I am delighted to hear the response to the establishment of a state marketing board. We believe this is essential and something which we will accept. It is proper, correct and needed in this country at this time and in the future.
As far as a national petroleum corporation is concerned, I do not think there is consensus in this House, but I suggest there is consensus in the country. I am not sug-

gesting expropriation here. We have the tools already-there is the Canada Development Corporation, although perhaps it is not the right vehicle, and we have Panarctic Oil. We must go farther downstream, through, and if a company could be purchased on a fair and equitable basis I think we would be building a control mechanism into our marketing lifeline, and this is very important. I say this only if it is a fair purchase and not necessarily going for total ownership. I think it should be controlled, not unlike the Texasgulf deal.
It is essential to maintain the management, people who know what they are doing. I can think of many ways of trying to run an oil industry, but if with it you can get good and dedicated management such as we have in this country, then we should use it; but we must recognize that we do need people from outside this country too. We could use this resource to upgrade our own skills, use them were we have to and get the results we want for our own benefit.
Some people ask where the money is coming from. Well, the export tax is providing a substantial source of income. I suggest that the Athabasca tar sands, which are supplying 300 billion barrels per day-which I understand is roughly equivalent to the Middle East resources-and I believe there is the same amount not recoverable out there, should be developed to the hilt. Maybe we could take a lesson from the Japanese who are very sophisticated in this respect. I think it is possible to arrange a deal for non-equity financing that could be taken out in trade. These countries would be grateful for assured sources of supply, and that is something we should consider.
We must look at the alternatives, Mr. Speaker. Coal has gone out of style, although I think it is coming back fast because we have abundant resources in this country, in Alberta and British Columbia. We should be bullish with our nuclear policy. I hope the scientists will unlock the mysteries of solar energy and those of human and animal waste. These are the alternatives we have, and I think the people of this country have made up their minds that we are not going to be caught off base again, we are not going to be so vulnerable again and submit to the blackmail of oil politics. We have the resources and we use them for our enlightened self-interest.
I spoke to the Centre for InterAmerican Studies in New York last week and tried to explain the Canadian views on these resources as I saw them and as I am expressing them here tonight. Nobody thought this was silly. As a matter of fact, they thought we were silly for not doing it sooner. It simply requires the consensus that we have in this House and across the country. Mr. Speaker, I think with this spirit that I see exemplified here tonight we can go on to much bigger and much better things, and a richer life using our resources intelligently and controlling them in our own best interests; and I think in that we will have the support of all Canadians.


Mr. J. Robert Howie (York-Sunbury):: Mr. Speaker, there is great concern about the energy crisis in Canada and nowhere is this more evident than in eastern Canada. The irony of the Canadian energy crisis is that it does not stem solely from the problems of supply and demand. Canada has the unique distinction of being one of the only industrialized nations in the world which can claim to be
November 5, 1973

totally self-sufficient in terms of oil and gas. Although western Canada has enough oil reserves to supply eastern Canada, there is at this point no way to transport an adequate volume to the east. Therefore, eastern Canada must import most of its oil from elsewhere. Approximately 25 per cent of Canada's total oil imports which are directed primarily to eastern Canada come from Arab oil producers; about 60 per cent comes from Venezuela.
The restricted flow of Arabian oil and the sharp increase in price of both Arabian and Venezuelan oil raises serious questions about the increase in price of gasoline, home heating oil and oil products and the security of supply of these products. The 56 per cent increase in crude oil tax by the Venezuelan government, coupled with the increases in cost already announced by Arabian countries, causes widespread speculation that gas prices will go up. Some estimates indicate it could go to $1 per gallon by the end of tnis year. I hope this is unduly pessimistic.
Amid that speculation one fact comes home clearly: Canada has in the Athabasca tar sands in Alberta the largest single deposit of oil in the world. A crash program of scientific engineering and exploration as the means of realizing the immense potential of the tar sands by the most feasible economic method is a matter of urgent national necessity. If these can be developed, Canada will control half of the world supply. We have here a vast potential that has been untapped for decades.
Mr. Speaker, I shall resist the temptation to point to the obvious lack of planning and protection in our national energy "non-policies". Instead, let us be constructive, using the benefit of hindsight, and let us do it now. Another thing that can be done now to alleviate the price increase in motor fuels in Canada is to decrease the 12 per cent tax at the manufacturer's level which is passed on to the consumer. The minister should also act now to stockpile oil reserves for eastern Canada against heating fuel shortage in midwinter.
Another thing that the minister should reconsider is the Bay of Fundy tidal power study and the tremendous potential of the 4,000 megawatts of power that are untapped in the Bay of Fundy. He should look again at our underdeveloped coalfields. I need not remind the government that if the corridor road were built, a direct highway to central Canada would exist and oil transports could carry at least critical supplementary supplies to the Maritimes. I call on the government to expedite their contingency plan to protect Canadians living in eastern Canada from the effects of an oil shortage. I call on the government to expedite the development of the Athabasca tar sands and the vast power potential that exists in the tides of the Bay of Fundy.
In short, Mr. Speaker, I ask the government to give leadership.


Mr. Randolph Harding (Kootenay West):: Mr. Speaker, there are only a few minutes left in the debate so I will have to be brief. I feel that the key to any successful campaign to conserve gas and fuel oil in Canada has to obtain the full support of all Canadians in this impending crisis. They must be given all the facts of the situation. I have no doubt that they will respond in the manner in which Canadians have always met a national crisis.
Oil and Gas
How can full Canadian participation and support be achieved? The people must first be given the facts. Second, there is the need for some detailed organization which can quickly and effectively be set up with the co-operation of the provinces and municipalities throughout our nation. I feel that an immediate meeting of our provincial premiers and ministers is required. This could be followed by meetings in the provinces with municipal governments, which will put the program into effect and, to a large degree, police it. There is no time to lose. Action in this direction must be taken at once.
This crisis should teach us all the real need for energy conservation and the absolute necessity of doing something about it. There must be a public campaign for the conservation of our gas and oil supplies. Car pools can be set up. The one-man, one-car means of transportation should be discouraged. Public transportation should be used by more Canadians. With provincial co-operation, lower speed limits could be enforced. The field of rapid transport in our cities is a longer term proposition, but it should be pushed vigorously by all levels of government. There is also the need for public awareness. People ought to have their vehicles tuned more often in order to save fuel. Last, but not least, we must prepare for the rationing of gas and fuel, unpleasant as that may be.
Other hon. members have pointed out things which could be done, such as the lowering of thermostats, the improvement of home insulation, the wise use of humidifiers, etc. I will not repeat all that. I should like, however, to raise again several key points which have already been raised by other hon. members. First, there is need for a Canadian petroleum corporation. This is of prime importance, particularly in view of the need to secure reasonably safe offshore supplies of oil.
Venezuela has already suggested that we set up a national corporation to deal with its state-owned oil corporation. There is no time to lose, for every country in the world requiring oil will soon be hammering on Venezuela's door for her limited oil supplies. I understand that the minister has already talked with the government of that country. It has suggested that Canada should set up a national petroleum corporation in order to make an oil deal. The government of Venezuela is anxious to sell oil to us through a national corporation and we in Canada are missing the boat if we do not take this opportunity to enter the field and ensure at least a reasonably secure supply of offshore oil which is needed for our eastern markets.
Another point raised in the debate concerns the reversible pipeline from Sarnia to Montreal and Quebec City. My party has been urging the building of this pipeline for several years. Again, I urge the minister to get his department going on this project right away. Surveys must be made. We must make certain that never again will any part of our country be subjected to the possibility of oil shortages, especially as this country is the only industrial country in the world with sufficient supplies of oil for its needs. Actually, we are a net exporter of oil to the tune of some 300,000 barrels per day.
Another point raised by the hon. member for Calgary South (Mr. Bawden) concerned the development of the tar

November 5, 1973
Oil and Gas
sands of Alberta and Saskatchewan. I do not take the same position taken by the hon. member for Calgary South. I am convinced that the development of these oil sands, which form one of the greatest deposits of oil remaining in the world, must be carried out under public ownership. That is why my party welcomes the imposition of the $1.90 export tax on oil. The government imposed this tax on oil going to the United States from Canada. It ensures that Canadian oil will be sold for the same price on the Chicago market that other oil is now sold for. The hundreds of millions of dollars that will accrue to the government from this tax source will go back to the provinces to recompense them for any royalties they may lose, inasmuch as there was no increase in price at the wellhead, and the balance could go toward the public development of the tar sands.


Some hon. Members:: Hear, hear!


Randolph Harding: These tar sands should be developed under public ownership and with public support. That is what we of the NDP would like to see. We will press for that. We urge the government to adopt that type of policy and to ensure that multinational corporations do not dictate the oil policy of this country and do not dictate our policy with respect to oil reserves or the direction in which Canada must go in the future in the whole field of oil development.


Mr. Prud'homme:: The hon. member is a good listener.


Mr. Speaker:: Order, please. It being eleven o'clock, pursuant to the order made earlier this day the motion to adjourn the House is deemed to have been adopted. The House stands adjourned until two o'clock tomorrow.
At 11 p.m. the House adjourned, without question put, pursuant to special order made this day.

Tuesday, November 6, 1973