1973-10-25

BROADCASTING


Mr. James A. McGrath (St. John's East):: Mr. Speaker, I rise on a point of order. I hope, Sir, that as the custodian of our ancient rights and privileges in this House you will hear my point of order. It concerns yesterday's Votes and Proceedings which record your ruling on the petition presented by me under Standing Order 67. The rationale of that ruling was that the petition concerned a matter over which parliament by statute had delegated control to the Canadian Radio-Television Commission. Various precedents were cited in support. However, in determining whether this House has divested itself of control it is the appropriate statute to which one must refer. The precedents are an aid in the interpretation of the statute. Parliament never gave up control of the CRTC. Section 32 of the Broadcasting Act provides:
All expenditures for the purposes of this part-
That is the part that constitutes the CRTC and sets out its jurisdiction.
-shall be paid for out of moneys appropriated by parliament therefor.
I make this point of order in recognition of your ruling and the observation that the right of the people to petition "is a very ancient and historical right" which should not be-and here I quote Shakespeare-"cabined, cribbed or confined" in any way by precedents decided on particulars.



ROUTINE PROCEEDINGS


Mr. Stanley Knowles (Winnipeg North Centre):: Mr. Speaker, I rise on a point of order to indicate certain agreements that have been arrived at by all parties. Apparently I was trying to demonstrate the universality of agreement by rising to speak from a seat other than my own.
Today, Sir, is an opposition day, with the motion being moved today by the hon. member for Nanaimo-Cowichan-The Islands (Mr. Douglas). I think you will find there is agreement that the time limits on speeches today be as
follows: 30 minutes for the mover of the motion, as provided in the Standing Order; 30 minutes for the minister responding; and 20 minutes for the lead-off speaker of each of the other two parties; but 15 minutes for all other speakers today.
There is another matter on which we have reached agreement. Shall I deal with that while I am on my feet?


Some hon. Members:: Agreed.


Stanley Howard Knowles: Mr. Speaker, the other matter on which we have reached agreement has to do with any division that may be called tomorrow related to the business that the President of the Privy Council (Mr. MacEachen) will be announcing. Perhaps we could deal with both these matters now.


Hon. Allan J. MacEachen (President of the Privy Council):: Mr. Speaker, on the point of order, I understand we have agreed that any division that might arise tomorrow on any items before the House will be dealt with later at a time to be agreed upon after discussions among the House leaders. Tomorrow we would begin with the CNR financing bill, then the Canada Pension Plan Bill No. 1, followed by the National Parks Act bill. On Monday we would begin with the Canada Pension Plan Bill No. 2 and probably follow that with the report stage of the foreign investment bill.


Mr. Walter Baker (Grenville-Carleton):: Mr. Speaker, on behalf of the official opposition may I say that we concur in the arrangements that have been discussed and agreed upon in the usual way.


Mr. Speaker:: Is this agreed and so ordered?


Some hon. Members:: Agreed.


NATIONAL DEFENCE
Mr. Frank Howard (Skeena):: Mr. Speaker, I rise pursuant to Standing Order 43 on a question of urgent and pressing necessity to seek leave to move a motion. The question of urgent and pressing necessity concerns the intensified feelings on the part of residents of the Queen Charlotte Islands, in my riding, about the nature and purpose of visits there by Canadian Armed Forces personnel aboard military aircraft from the air force base at Comox. I would therefore like to move, seconded by the hon. member for Comox-Alberni (Mr. Barnett), the following motion:

October 25, 1973
National Defence
That there be presented to this House for referral to the Standing Committee on External Affairs and National Defence the information from all flight plans of aircraft operated by the Department of National Defence which departed from the Canadian Forces Base at Comox, B.C. and which landed at Sandspit, B.C. or at any other location on the Queen Charlotte Islands from August 1, 1973 to today except such information as may be classified as being of a security nature.


Mr. Speaker:: Is there unanimous consent for the motion proposed by the hon. member for Skeena?


Some hon. Members:: Agreed.


Some hon. Members:: No.


Mr. Speaker:: There is not unanimity.


TRANSPORT
Mr. Charles E. Haliburton (South Western Nova):: Mr. Speaker, I rise to ask the unanimous consent of the House, pursuant to Standing Order 43, to present a motion of urgent and pressing necessity. It relates to the curtailment of ferry service in the Bay of Fundy scheduled to become effective next Sunday. In view of the serious cutback, in view of the large investment the Canadian government has in the service which will thereby be wasted, and in view of the substantial loss of jobs and economic opportunities in southwestern Nova Scotia, I move, seconded by the hon. member for Halton (Mr. O'Connor):
First, that the Ministry of Transport be instructed by this House to underwrite all legitimate losses suffered by CPR after October 28 in relation to the operation of the Digby to Saint John ferry, Princess of Acadia, operating on a twice daily schedule.
Second, that the Ministry of Transport be instructed to enter into negotiations with CPR to either provide a subsidy which will ensure the continued operation of the ferry or alternatively to purchase the ferry and include it in the operations of the recently commenced, or announced, Atlantic ferry administration.


Mr. Speaker:: Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


Mr. Speaker:: There is not unanimous consent and the motion cannot be put.


NATIONAL DEFENCE
Frank Howard: Mr. Speaker, I rise on the same basis and for the same reasons as I rose previously to seek leave to move an additional motion under Standing Order 43, seconded by the hon. member for Comox-Alberni (Mr. Barnett). I would move:

That there be presented to this House for referral to the Standing Committee on External Affairs and National Defence the names of, the rank held by, and the purpose and duration of the visit of all Armed Forces personnel who flew from the Canadian Forces Base at Comox, B.C. to Sandspit, B.C. or anywhere else on the Queen Charlotte Islands aboard aircraft operated by the Department of National Defence from August 1, 1973 to today, except to the extent that the said purpose may be classified as being of a security nature.


Mr. Speaker:: Is there unanimous consent.


Some hon. Members:: Agreed.


Some hon. Members:: No.


Mr. Speaker:: There is not unanimous consent and the motion cannot be put.



ORAL QUESTION PERIOD

[Stage Direction]
[ English]

Hon. Robert L. Stanfield (Leader of the Opposition):: Mr. Speaker, I wish to direct a question to the Secretary of State for External Affairs. Does the government support the eight-nation resolution, with the proposed amendments, to establish an emergency United Nations force to guarantee maintenance of the ceasefire in the Middle East? If so, does the government of Canada believe the resolution provides a satisfactory basis for immediate Canadian participation if this is requested?


Hon. Mitchell Sharp (Secretary of State for External Affairs):: Mr. Speaker, as the Leader of the Opposition knows, Canada is not a member of the Security Council. Therefore we have not been required to take a position on this particular proposal put forward by the non-aligned members of the Security Council. In general, as I stated in the House during the special debate, we believe it may be very useful to have an emergency force in operation in the area during the period when negotiations are going on. At that time I indicated that, provided we could play a useful role and were under United Nations auspices, we would be ready to participate. We have not yet been asked to participate. Indeed, the proposal to which the hon. gentleman referred has not yet received the support of the Security Council.


ARAB-ISRAELI WAR-DEPLOYMENT OF CEASEFIRE OBSERVERS-PRESENT SITUATION
Robert Lorne Stanfield: Can the minister confirm whether the United Nations military observers have yet been fully deployed on both fronts? If so, has the government any new information as to the military situation at this time, particularly with regard to the ceasefire?
October 25, 1973


Mitchell William Sharp: Mr. Speaker, UNTSO, the United Nations supervisory organization is redeploying its members on both the Syrian and Egyptian fronts. We have personnel who are involved. I understand the Secretary General is considering enlarging the organization, the numbers. We have not yet had a request to provide additional membership but we would certainly be prepared to do so. Indeed, we have men standing ready who could take on these responsibilities if they were requested to do so.


ARAB-ISRAELI WAR-CEASEFIRE-UNITED STATES MILITARY ALERT-POSSIBLE UNILATERAL DISPATCH OF TROOPS TO AREA BY RUSSIA
Robert Lorne Stanfield: Mr. Speaker, I have one further supplementary related to the state of military alert adopted by the President of the United States. Is the Canadian government in possession of any evidence that the Soviet Union is preparing unilaterally to send forces to the area for peacekeeping or other reasons? If so, what position has the Secretary of State for External Affairs expressed to the Soviet Union on behalf of the government of Canada with respect to any such development?


Mitchell William Sharp: Mr. Speaker, it is my understanding that the forces of the United States are on a general alert. This does not affect us. We have not been requested to do so. I understand that the Egyptian government proposed that forces of the Soviet Union and the United States might form a peacekeeping mission in the area. The Secretary of State of the United States is opposed to this idea. Indeed, I gather that in a broadcast just a few moments ago he proposed that any peacekeeping force not include permanent members of the Security Council.


Robert Lorne Stanfield: With all respect to the Secretary of State for External Affairs, he did not answer my question. I am sure he would wish to do so. Has the government of Canada any information in its possession that the U.S.S.R. is preparing unilaterally to send forces to the area?


Mitchell William Sharp: I cannot answer that question. I have no direct evidence. All I know is that it is, I think, in light of this likelihood that Dr. Kissinger has expressed his very strong opposition to any such movement on the part of the Soviet Union. The United States has said it is not prepared to participate along with the Soviet Union in any such activity. It is for this reason, I gather, that the forces of the United States have been placed on a general alert.


ARAB-ISRAELI WAR-PROPOSED WITHDRAWAL TO LINES OCCUPIED AT TIME OF SECURITY COUNCIL RESOLUTION OF OCTOBER 22-CANADIAN POSITION
Mr. Andrew Brewin (Greenwood):: In the resolution presented by the non-aligned members of the Security Council there was, I understand, in addition to the matters mentioned by the Leader of the Opposition, a proposal that both sides be called upon to withdraw to the lines occupied at the time of the first Security Council resolu-
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tion last Monday. I should like to ask the Secretary of State for External Affairs whether Canada would also support that particular part of the resolution.


Mitchell William Sharp: The House may recall that I welcomed the resolution of the Security Council of that day, and by implication, therefore, I would support maintenance of the position as it existed on the day the ceasefire was approved by the Security Council.


ARAB-ISRAELI WAR-WILLINGNESS OF CANADA TO SUPPLY TROOPS FOR PEACE ENFORCEMENT-RUSSIAN POSITION RESPECTING RESOLUTION NO. 242
Right Hon. J. G. Diefenbaker (Prince Albert):: Mr. Speaker, I think the questions raised by the Leader of the Opposition and the answers given by the minister require clarification. Is Canada prepared to supply troops for peace enforcement in the Middle East rather than peacekeeping units? I mention this because that seems to be the distinction in what has been advanced by the U.S.S.R., which at the moment has not been accepted by the United States.


Mitchell William Sharp: There are various forms of activity, as the right hon. gentleman knows, which, generally, have been divided into two kinds of activity, one of them observers such as we had in Viet Nam and the other, peacekeeping forces which stand between the combatants such as we have in Cyprus. Whether there are distinctions within the peacekeeping function as to the amount of armament and the degree to which they would resist is a question that has not yet been settled. Therefore I could not give a clear answer unless I had a much better idea of the exact functions that would be performed by a peacekeeping force in the Middle East.


John George Diefenbaker: I should like to know from the minister whether Canada is prepared to supply troops for peace enforcement. That requires armed forces. That is question No. 1. Second, arising out of the question asked by the hon. member for Greenwood, what attitude does the U.S.S.R. take as a basis upon which an armistice or a ceasefire would be determined in connection with the implementation of Security Council resolution No. 242 of 1967 which provides, among other things, for Israel's withdrawal from occupied Arab territories in return for Arab acceptance of secure and recognized borders for Israel. That particular portion of the 1967 security declaration was accepted the other day in the Security Council. I ask the minister this: does not the U.S.S.R. take the stand that this means that, before there can be any basis for a ceasefire or an end of the hostilities, Israel must withdraw from all of the areas occupied since the six-day war?


Mitchell William Sharp: Mr. Speaker, one of the points that I made very clearly in my speech in the special debate the other day-


John George Diefenbaker: No, it was not clear at all.


Mitchell William Sharp: -was that we accept resolution 242 in its entirety, that we resist any efforts to interpret it, that we

October 25, 1973
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believe it does provide a framework for settlement and therefore we do not accept any particular interpretation such as the one put on it by the Soviet Union. We believe it was very carefully drafted and that any attempts to interpret it publicly and to get acceptance of a particular interpretation is only going to interfere with prospects for peace. So I must make that very general answer to the right hon. gentleman.
As to the first part of the question, it is interesting in this connection that some time ago Canada presented to the United Nations a draft plan for peacekeeping activities which represents the Canadian point of view. It is the kind of force in which we would be prepared to participate. If I am asked a hypothetical question whether we would agree to participate in a plan for peace enforcement, as the right hon. gentleman has mentioned, then I must ask him to define his terms a little more carefully.


John George Diefenbaker: I have a further supplementary question.


Mr. Speaker:: Order, please. The Chair will recognize the right hon. gentleman for a supplementary. A number of other members are also seeking to ask supplementaries. They will be recognized and the order will be the hon. member for Selkirk, the hon. member for North York and the hon. member for St. Paul's.


John George Diefenbaker: Mr. Speaker, the U.S.S.R. has always taken the stand that Security Council resolution 242 of 1967 requires the entire evacuation by Israel of the areas occupied since the 1967 war. When Mr. Kosygin was here a communique was issued by the minister and Mr. Kosygin which stated that Canada and the U.S.S.R. are in agreement as to the meaning of resolution 242. I would ask the minister what that meant. The U.S.S.R. says it means get out, but is Canada now saying that when it agreed with Kosygin it really did not mean to agree?


Mitchell William Sharp: Mr. Speaker, I do not accept the reading that the right hon. gentleman has put upon the communique issued by Mr. Kosygin and the Prime Minister. Canada's position is very clear on this question. It is that Israel should withdraw to secure and recognized borders, which I understand is also the position taken by the right hon. gentleman.


Mr. Speaker:: The hon. member for Selkirk.


John George Diefenbaker: I do not want words that I did not say placed in my mouth.


Mr. Speaker:: Order, please.


John George Diefenbaker: I ask the minister what he meant by saying that Kosygin and he had agreed.


Mr. Speaker:: Order, please. The Chair has recognized the hon. member for Selkirk.


ARAB-ISRAELI WAR-U.S. CONTINENTAL AIR DEFENCE COMMAND ALERT-STATE OF READINESS OF CANADIAN COMPONENT IN NORAD
Mr. Doug Rowland (Selkirk):: Mr. Speaker, my supplementary question is addressed to the Minister of National Defence. In view of the fact the Continental Air Defence Command, which is the United States component in NORAD, has been placed on alert, or at least an increased state of readiness, I should like to ask the minister whether this has in any way affected the state of readiness of the Canadian component in the NORAD forces.


Hon. James Richardson (Minister of National Defence):: Mr. Speaker, the Canadian Armed Forces are always alert.


Some hon. Members:: Oh, oh!


Some hon. Members:: Hear, hear!


James Armstrong Richardson: To answer the hon. member's specific question, it has not been necessary in these circumstances for the Canadian component of NORAD to move to an increased level of alertness.


ARAB-ISRAELI WAR-POSSIBLE LANDING OF TROOPS BY RUSSIA IN MIDDLE EAST-CANADIAN POSITION
Douglas Charles Rowland: Mr. Speaker, may I put a further supplementary question to the Secretary of State for External Affairs. Is the Canadian government directly seeking assurances from the Soviet Union to the effect that it will not act unilaterally in the Middle East by landing troops there? Is it seeking that assurance actively?


Mitchell William Sharp: Mr. Speaker, these developments have arisen only within the last few hours, but I can assure the hon. gentleman that this is the attitude of the Canadian government which will be conveyed to the Soviet Union.


ARAB-ISRAELI WAR-NECESSITY OF ISRAEL WITHDRAWING TO PREVIOUS BORDERS BEFORE PEACE TALKS
Mr. Barnett J. Danson (York North):: Mr. Speaker, I have a supplementary question to the Secretary of State for External Affairs following the response given the hon. member for Greenwood. I should like to ask the minister whether, in referring to Canada supporting the position that Israel withdraw to previous borders, he meant that to be as a precondition to peace talks or as a consequence of peace talks?


Mitchell William Sharp: Mr. Speaker, it has been the position of the Canadian government that Resolution 242 is a package and all parts must be observed and must be part of a simultaneous implementation.


Barnett Jerome Danson: Mr. Speaker, I was thinking of the present situation where the borders have certainly changed since Resolution 242 was passed by the United Nations. I refer to the existing situation and the ceasefire. Prior to peace
October 25, 1973

talks is it necessary for Israel to withdraw to the previous borders, or will peace talks take place before this withdrawal occurs?


Mitchell William Sharp: Mr. Speaker, if peace is going to be effective in the Middle East the two parties must first agree to be in negotiations, and it will be for them to decide the conditions, not for us.


Francis Andrew Brewin: On a point of order


Mr. Speaker:: Order, please. I will recognize the hon. member for Greenwood on a point of order, but I remind hon. members that we are still on the first subject. I appreciate that it is very important, but after the point of order and a question by the hon. member for St. Paul's perhaps we should attempt to move to the second subject.


Francis Andrew Brewin: Mr. Speaker, my point of order is that I think the hon. member for York North has unwittingly misunderstood or misstated the question I asked. I was not referring to withdrawal to the boundaries before Resolution 242; I was referring to withdrawal to the ceasefire line at the time the ceasefire was decreed last Monday. That is all I was referring to.


ARAB-ISRAELI WAR-DISCUSSION BY MINISTER AND ARAB AMBASSADORS OF ADHERENCE TO CEASEFIRE AND SOVIET TROOP BUILD-UP
Mr. Ron Atkey (St.Paul's):: Mr. Speaker, I have a question for the Secretary of State for External Affairs. In his discussions with Arab ambassadors today concerning delivery of mideast oil to Canada, did he have occasion to raise the question of securing adherence to the terms of the ceasefire in the Middle East, set last Monday, and did he express concern about the unwarranted build-up of Soviet troops in the area apparently in support of some of the Arab states?


Mitchell William Sharp: No, Mr. Speaker. The subject of my discussions this morning, as I said to the House yesterday, was the refusal of the State of Abu Dhabi to load a freighter with oil destined to the Portland-Montreal pipeline. It took us long enough to discuss that question and we did not have an opportunity to pursue the other subject. In any event, that would be a subject which would more properly be raised by our ambassadors in the countries to which we are accredited.


SECURITY OF OIL SUPPLY FROM MIDDLE EAST-RESULT OF DISCUSSIONS WITH ARAB AMBASSADORS
Mr. Lome Nystrom (Yorkton-Melville):: Mr. Speaker, my question is directed to the Secretary of State for External Affairs. Can he tell the House the results of the meeting he held this morning with the Arab ambassadors, can he now guarantee security of supply of oil to the Canadian consumer, and did he assure the Arab ambassadors that any oil destined to multinational corporations in Canada would not be diverted to American refineries?
Hon. Mitchell Sharp (Secretary of State for External
Affairs): Mr. Speaker, in my discussions with the Arab
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ambassadors this morning I emphasized the point that Canada in its commercial dealings had never allowed politics to have an effect upon the destination of our commodities, nor upon the way in which we give aid to countries. I emphasized that we have always kept politics outside and we hoped the Arab countries would do likewise in their relations with us.


Lorne Edmund Nystrom: With deference, Mr. Speaker, I do not think the Secretary of State for External Affairs answered my question. My question was specifically whether he was able to get a guarantee from the Arab states that there would be security of oil supplies to this country, and whether he assured them that if they sent oil to American-based multinational corporations in Canada that oil would not be diverted to American ports?


Mitchell William Sharp: Mr. Speaker, I do not like to paraphrase what was said to me as I would not in any way want to be incorrect. I think it is fair to say that the Arab ambassadors were not aware of the reasons which motivated Abu Dhabi to refuse to load a tanker with oil for Canada. Therefore it was impossible for me to pursue the matter any further. What I wanted them to convey to their governments was the very serious concern Canada would have about relations between Canada and the Arab countries if they took the position of supporting any of the Arab states in cutting off oil to Canada.


Robert Lorne Stanfield: have a supplementary question, Mr. Speaker. Yesterday the Secretary of State for External Affairs indicated in response to a question by me that it was the State of Saudi Arabia which had prohibited the shipment. Was this an error on his part, and can he tell us whether he is taking any measures at all to ascertain whether the State of Saudi Arabia, which is the leading producer among the mid-eastern Arab states, is cutting off or refusing shipments of oil to Canada?


Mitchell William Sharp: Mr. Speaker, I apologize to the House for having passed on information that we had received from the Petrofina Company. Their information was that the ship had been loading in Saudi Arabia. That was not so; it was loading in the State of Abu Dhabi. I do not believe that is a matter of any significance in so far as the action itself is concerned. We are just as concerned about the action of any Arab country in cutting off oil shipments to Canada. We are making representations in all Arab countries, not only those that supply oil but others, so as to make it clear that Canada is very interested in continuing the ordinary commercial and other relations with the Arab countries and that it would be quite inexplicable to Canada for them to take action of this kind against us.


Mr. Speaker:: Order, please. The Chair will recognize the hon. Leader of the Opposition, attempt to have a few questions from other hon. members on different subjects and perhaps return after five or ten minutes to this important matter.


Robert Lorne Stanfield: Mr. Speaker, in reference to the veto or prohibition against the shipment, was this not directed to Aramco which is the producing company in question, and
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has the Secretary of State for External Affairs or anyone on behalf of the government attempted to ascertain from the producing company the particular significance of this move that was made with regard to Canada?


Hon. Donald S. Macdonald (Minister of Energy, Mines and Resources):: Mr. Speaker, it was not Aramco that was involved which, as the hon. gentleman knows, is a producer in Saudi Arabia but rather Shell International in respect of its production in Abu Dhabi. We have pressed through Petrofina to find out whether in fact this represents a conscious decision by Abu Dhabi not to ship to Canada or they do not understand that in shipping to Portland, Maine, the oil then moves in bond by pipeline from there to Canada. At the moment I do not have any further information on that.


Robert Lorne Stanfield: What about instructions to Aramco?


Donald Stovel Macdonald: Mr. Speaker, as far as I am
advised at the moment by Canadian firms which receive oil from Aramco, they have not had shipments interrupted.


Robert Lorne Stanfield: Do they have instructions?


Donald Stovel Macdonald: Pardon?


Mr. Speaker:: Order, please.


PROPOSED OIL PIPELINE EXTENSION TO MONTREAL- EFFECT ON EXPORTS TO UNITED STATES
Mr. Jim Balfour (Regina East):: Mr. Speaker, my question is directed to the Minister of Energy, Mines and Resources and is in connection with the possible extension of the oil pipeline to Montreal. In view of Governor Love's statement yesterday that the United States would probably allow looping of the United States part of the line provided no cutback of oil supplies to the United States midwest resulted, will the minister tell the House how he would plan to serve the Montreal market through the pipeline extension without reducing exports to the United States?


Donald Stovel Macdonald: Mr. Speaker, my understanding is that in terms of pipeline construction this depends very much on the level we intend to put into Montreal. My understanding from Interprovincial is that 250,000 barrels a day would not require substantial construction west of Sarnia, although an amount over that would, of course, require such construction. Basically we would take the position, as indeed the United States takes, that we should move to a position of self-sufficiency to the degree that we can. Of course, we would have the priority that Canadian oil would be used to meet Canadian requirements.


OIL-SUGGESTION THAT PIPELINE EXTENSION TO MONTREAL BE THROUGH NORTHERN ONTARIO
Mr.   J.-J. Blais@Nipissing: Mr. Speaker, my question is also directed to the Minister of Energy, Mines and Resources. In view of the statement he has just made and in view of the growing national concern about security of supplies for eastern Canadian markets and the government's recognition of the necessity of building an oil pipeline to the Montreal refineries, would the minister assure the House that full consideration will be given to the building of the pipeline from Sault Ste. Marie through northern Ontario in lieu of a line from Sarnia to Montreal?


Donald Stovel Macdonald: We certainly would give that consideration, Mr. Speaker. The concern, of course, would be whether the increased financial cost involved in an extension from Sault Ste. Marie would be warranted by the additional security that might be obtained.


Mr. Blais:: Can the minister advise the House when the study relating to costs will be available to the House so that future discussion can be had on that particular subject.


Donald Stovel Macdonald: Mr. Speaker, I would hope to be able to report more fully in connection with the pipeline at an early date. I cannot give a precise date.


THE CANADIAN ECONOMY
Hon. Paul Hellyer (Trinity):: Mr. Speaker, my question is for ihe Minister of Finance. When the Minister of Finance states, as he did last night in London, that the problem of unemployment grows in large measure from the strength of the economy rather than its weakness, does he mean to suggest to parliament and the people of Canada that in future unemployment rate increases should be read as a measure of the health of the economy-


Mr. Speaker:: Order, please.


Paul Theodore Hellyer: -and the government's satisfaction with the results of its own policies?


Mr. Speaker:: Order, please. The hon. member for Trinity knows he cannot ask a question in those terms relating to a statement made outside the House.


PUBLIC SERVICE
Paul Theodore Hellyer: Mr. Speaker, I should like to ask the Minister of Finance whether, when he asks for

restraint by business and labour in granting wage increases he sees as an example of that restraint the current policy of Treasury Board against adequate wage increases for the CR group in the civil service?


Hon. John N. Turner (Minister of Finance):: Mr. Speaker, I think the President of the Treasury Board and I see eye to eye on the problem.


Paul Theodore Hellyer: I have a supplementary, Mr. Speaker.


Mr. Speaker:: The Chair will recognize the hon. member for Trinity on a supplementary, followed by the hon. member for Portneuf.


Paul Theodore Hellyer: Can the minister give the House the name of one deputy minister who on merit is entitled to an increase of $10,000 when the government refuses to give these clerks-


Mr. Speaker:: Order, please.

[ Translation]


SOCIAL SECURITY
Mr. Roland Godin (Portneuf):: Mr. Speaker, I should like to ask a question of the hon. Minister of National Health and Welfare.
In view of the fact that National Health and Welfare technicians are preparing the documentation on the payment of old age pensions from the age of 63, can the hon. minister tell us when he intends making a statement on this subject?


Hon. Marc Lalonde (Minister of National Health and Welfare):: Mr. Speaker, I believe that the facts upon which the hon. member's question is based are unfounded. Consequently, his conclusion does not apply.


OIL-INQUIRY AS TO DIVERSION OF SHIPS DESTINED TO CANADA FROM MIDDLE EAST TO UNITED STATES
Lorne Edmund Nystrom: Mr. Speaker, I should like to direct my question to the Minister of Energy, Mines and Resources. I think he is coming back from behind the curtain, Mr. Speaker, if he can find his way in. He is hunting for tankers. Other than the shipment of oil referred to yesterday from Abu Dhabi, can the minister say categorically if he knows of any other ships of any other company or country that have been diverted to United States refineries which were originally destined to refineries in eastern Canada?


Donald Stovel Macdonald: Mr. Speaker, I know of none other. I checked again after the question the hon. gentleman asked yesterday and I again received the insistence of the two
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companies he mentioned that they control their own ordering and shipping and that there has been no diversion from supplies intended for Canada and they are not missing any cargoes.


Lorne Edmund Nystrom: A supplementary.


Mr. Speaker:: The hon. member for Yorkton-Melville has had a question and I do not know how many supplemen-taries. I lost track of them a while ago. Perhaps the Chair might be allowed to recognize some other hon. members. The hon. member for Palliser.


THE CANADIAN ECONOMY
Mr. Stan Schumacher (Palliser):: Mr. Speaker, my question is for the Minister of Finance. As the Governor of the Bank of Canada finds great difficulty in reconciling the unemployment statistics with the level of the indices indicating business activity, I should like to ask the minister whether he has any reason to doubt the validity of the indices that measure employment and business activity in Canada?


John Napier Turner: Mr. Speaker, the governor was not doubting the statistics. He was suggesting it was difficult to reconcile them with some of the evidence in the country. I said to the hon. gentleman's leader a day or so ago that I was awaiting with great interest the report of the Economic Council of Canada on the meaning of statistics as they affect the labour force.


AGRICULTURE
Mr. Jack Murta (Lisgar):: Mr. Speaker, I wish to direct a question to the Minister of Agriculture. Because of the tremendous demand that greater quantities of food be produced for the coming year and since there seems to be little doubt that we are headed for what could be called a major fertilizer crisis not only in Canada but also in the United States-


Some hon. Members:: Oh, oh!


Jack Burnett Murta: -I suggest this is a very serious matter and ask the Minister of Agriculture what the government is doing at this time to ensure that Canadian farmers will have an adequate supply of fertilizer?


Hon. E. F. Whelan (Minister of Agriculture):: Mr. Speaker, first of all, if we could can the bio-mass material in this House we would probably have an ample supply. I just want to say that we have met this morning with the Canadian Fertilizer Manufacturer's Association and with some of the independent fertilizer producers in Canada
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and are meeting again later this afternoon with another group. I can say, from the meetings we have had so far, I do not think we will have any crisis. The farmers are using far more fertilizer than they ever have. We have asked the companies to produce more and they are doing that. The farmers used 50 per cent more last year in western Canada because I asked them to do so. They are going to do that and we are going to see they have the supplies of fertilizer they need.


Jack Burnett Murta: Mr. Speaker, that was the most ridiculous political answer I have ever heard to a question. In view of the fact that major grain companies that handle and in some cases produce fertilizer are going to experience shortages without a doubt this year, what does the government intend to do about these shortages in the future? Does it intend only to hold discussions and talk and not really meet the problem?


Eugene Whelan: Mr. Speaker, some companies have already shown us their production figures for this coming year. They have been increased from 500,000 to 650,000 tons in one plant alone in western Canada and it is cutting off export of 100,000 tons. So in that plant alone this represents over 200,000 extra tons for the farmers in western Canada. We are prepared to take action to make sure that the fertilizer stays in Canada for the use of the Canadian farmers to make them as productive as possible. We have taken action in regard to other products to make sure-I refer to protein for one-that they stay in Canada to make our people productive so they do not have to compete in an unfair manner with other countries which might otherwise get our product.


Some hon. Members:: Hear, hear!


Mr. Speaker:: I will allow the hon. member for Lisgar to ask a further supplementary, after which I will recognize the hon. member for New Westminster.


Jack Burnett Murta: Mr. Speaker, I want to ask one last supplementary. Instead of giving short speeches such as the minister has now given, what specifically is he going to do since he has said that the government will do something if such a situation occurs? What specifically is going to happen?


Eugene Whelan: Mr. Speaker, we have to get all the facts. I have just outlined some of them. Hon. members may want me to outline them all at this time but I know that you, Sir, would not allow me to do that. I have confidence in the ability of the fertilizer producers to look after the needs of our people. If they do not and they want to continue exports, we can, of course, stop them. There is no doubt about that. As the hon. member knows, we are huge exporters of nitrogen and potash, and we import phosphate. Surely we can make a deal to get the best possible advantage for our manufacturers. This is what the manufacturers have been telling me this morning and will probably do so again this afternoon.


Mr. Whittaker:: On a point of order, Mr. Speaker, I do not think that the Minister of Agriculture is fully

informed. I have evidence that there is a shortage of fertilizer in British Columbia-


Mr. Speaker:: Order, please. The hon. member will appreciate that is hardly a point of order. There are only five minutes left before the end of the question period and I think we should try to move to the next subject.


ADMINISTRATION OF JUSTICE
Mr. Stuart Leggatt (New Westminster):: Mr. Speaker, I wish to direct a question to the Minister of Justice. In view of the peculiar conditions which were imposed on bail in the case of Dr. Henry Morgentaler of Montreal, namely, that the bail provisions not only deny him the freedom to discuss his case publicly, which is usual, but also deny him the right to make any public appearances whatsoever or to discuss anything whatsoever, is the minister considering changes in the Bail Reform Act so that the fundamental right of freedom of speech can be protected for persons, presumed to be innocent until proven otherwise?


Hon. Otto E. Liang (Minister of Justice):: Mr. Speaker, I would hesitate to comment on a particular existing case. A great deal of discretion in our judicial process is inevitably left to the judiciary, and I think that that is as it should be. We are, of course, looking at other matters in relation to the Bail Reform Act, and so did the Commissioners on Uniformity. We will be bringing proposals before the House before too long.


PUBLIC SERVICE
Mr. Don Blenkarn (Peel South):: Mr. Speaker, I wish to direct a question to the Minister of Finance supplementary to that asked by the hon. member for Trinity. Is it the government's view that it will help restrain inflation by offering people in the junior levels of the civil service, nurses in particular, wage increases that are significantly less than the rate of inflation?


John Napier Turner: Mr. Speaker, not accepting the premise of the hon. member's question I have difficulty in forming an answer.


Donald Alex Blenkarn: Mr. Speaker, there has been a suggestion of a 20 per cent increase in pay for deputy ministers, and this minister says that he does not accept that as a fact. Will he answer this question: Is the government trying to restrain inflation by reducing the pay of junior civil servants?


John Napier Turner: The answer is a categorical no, and the hon. gentleman knows it.
October 25, 1973


Mr. Allan Lawrence (Northumberland-Durham):: Mr. Speaker, would the Minister of Finance confirm or deny that the pension payable to his deputy minister will be more than his annual salary today as minister?


Some hon. Members:: Oh, oh!


Mr. Speaker:: Order, please.


Mr. Lambert (Edmonton West):: That is correct.


Mr. Speaker:: Order. The hon. member knows he cannot ask a question like this.


Allan Frederick Lawrence: May I rephrase-


Mr. Speaker:: Order, please. The hon. member for Vancouver South.


Allan Frederick Lawrence: May I redirect the question-


Mr. Speaker:: Order. If the hon. member for Vancouver South will bear with me for a second, the hon. member for Northumberland-Durham wishes to ask a related question. Will the hon. member for Northumberland-Durham resume his seat. Hon. members know that it is entirely out of order to ask what is the amount of salary paid to an individual or whether one salary is higher than another. That is obviously not a question that can be asked at this time. It can be placed on the order paper or, if there is urgency, raised at the time of adjournment.


Allan Frederick Lawrence: Mr. Speaker, we have difficulty in getting questions answered when we put them on the order paper. That is why we have to use the oral question period.


Mr. Speaker:: Order. The Chair will recognize the hon. member for Vancouver South and will then have to call orders of the day.


NATIONAL DEFENCE
Mr. John A. Fraser (Vancouver South):: Mr. Speaker, I wish to direct a question to the Minister of National Defence. In view of the fact that Squadron 442, which is based at Comox, is responsible for search and rescue operations over 690,000 square miles of British Columbia and the Yukon, and since that squadron is unable to meet normal operational tasks because of worn-out aircraft and lack of parts, can the minister advise what immediate steps will be taken to correct this situation?


James Armstrong Richardson: Mr. Speaker, I do not accept the premise of the question.


John Allen Fraser: Mr. Speaker, it has been reported by Jes Odham in the Vancouver Sun-


Some hon. Members:: Oh, oh!
Oral Questions


John Allen Fraser: This is a very serious matter because it affects the lives and safety of people who are lost.


Some hon. Members:: Hear, hear!


John Allen Fraser: With regard to the search for pilot Neil Carey, which started on September 18, it was not until September 28, ten days later, that the squadron was able to put all of its aircraft into the air. Will the minister either replace these worn-out aircraft or increase the number available, and when will this be done?


James Armstrong Richardson: Mr. Speaker, the search and rescue capability of the Canadian Armed Forces has an excellent record on the west coast, as elsewhere, in the number of discoveries that have been made of lost planes. In the new modernization and renewal program that I have announced there are funds for new equipment which will be going into search and rescue, as well as into other areas.


John Allen Fraser: Mr. Speaker, I have one other supplementary question. At the present time, given the fact that we cannot get replacement parts for these aircraft because they are all stored in Toronto, causing long delays that keep these aircraft out of the air, will the minister reconsider the information he has been giving, come back to the House in a few days and say what he is going to do about the situation?


Mr. Speaker:: The hon. member for Yukon has a supplementary and also, I believe, the hon. member for Vancouver Kingsway.


INVESTIGATION INTO LOSS OF TRACKER AIRCRAFT IN SEARCH
Mr. Erik Nielsen (Yukon):: Mr. Speaker, I wish to direct a supplementary question to the Minister of National Defence. Have the armed forces yet concluded their investigation, which I assume they made, into the loss of a Tracker aircraft in the search just referred to, which resulted in the loss of four members of the forces, and, if concluded, are the results going to be made public or made available to members of this House?


James Armstrong Richardson: Mr. Speaker, I will make inquiries concerning the result of that particular investigation.


James Aloysius McGrath: Mr. Speaker-


Mr. Speaker:: Order, please. Again there are a number of supplementaries. The Chair has said it will first recognize the hon. member for Vancouver Kingsway.


ABORTION
Mrs. Grace Maclnnis (Vancouver Kingsway):: Mr. Speaker, my question is supplementary to that asked by

October 25, 1973
Oral Questions
the hon. member for New Westminster and is directed to the Minister of National Health and Welfare.


Some hon. Members:: Oh, oh!


Winona Grace MacInnis: In view of the extreme shortage of facilities for legal abortions in various parts of Canada-


Some hon. Members:: Oh, oh!


Mr. Speaker:: Order, please. Hon. members are protesting that the question being asked by the hon. member is not supplementary. I am quite willing to hear the hon. lady ask her supplementary. I think hon. members should be prepared to allow her to ask her supplementary, although it is not relevant to the question asked by the hon. member for Vancouver South. If there are supple-mentaries to the previous question, other hon. members will be recognized.


Winona Grace MacInnis: In view of the extreme shortage of facilities for legal abortions in various parts of Canada, as emphasized by the case of Dr. Henry Morgentaler, would the minister make representations to the provincial departments of health, and through them to the hospital boards of the provinces, to set up adequate numbers of abortion committees and other necessary facilities.


Marc Lalonde: Mr. Speaker, I do not believe that the case of Dr. Morgentaler supports the point of view expressed by the hon. lady.


NATIONAL DEFENCE
Mr. Thomas S. Barnett (Comox-Alberni):: Mr. Speaker, I would like to address a question to the Minister of National Defence supplementary to that asked by the hon. member for Vancouver South. Will he provide the crews to make the rescue planes he now has fully operational before he gets around to providing new equipment instead of having them, as at present, on a five-day week and a standby weekend?


James Armstrong Richardson: I will give consideration to that, Mr. Speaker.


Mr. Speaker:: Order, please. We have reached the end of the question period. The Chair, with the consent of the House, allowed a supplementary. The minister may, if he wishes, reply to the question of the hon. member for Comox-Alberni. If not, the hon. member for St. John's East will be recognized on a last supplementary, after which we will call orders of the day.


James Armstrong Richardson: Mr. Speaker, I indicated that I would look into the matter raised by the hon. member.


SUGGESTED TRANSFER OF TRACKER AIR SQUADRON FROM NOVA SCOTIA TO NEWFOUNDLAND
James Aloysius McGrath: Mr. Speaker, my question is in the interests of saving life, not destroying life. I should like to ask the minister if it is the intention of the government to place the Tracker squadron now in Nova Scotia in eastern Newfoundland, which would add 1,000 miles to its capability and hence provide that part of eastern Canada with search aircraft capability?


James Armstrong Richardson: Mr. Speaker, I have indicated on earlier occasions that it was not practical for us to do that.


Mr. Speaker:: Orders of the day.


BUSINESS OF THE HOUSE
Walter David Baker: Mr. Speaker, a few moments ago we dealt with the business of the House for the balance of this week. I wonder if I could ask the government House leader his intention with respect to the business of the House next week and perhaps beyond, as far as he can see.


Allan Joseph MacEachen: Mr. Speaker, on Monday it is the intention to call the Canada Pension Plan Bill No. 2; following that the report stage of the Foreign Review Investment Act, so I would think that would take us well into next week.


Robert Lorne Stanfield: Well into Tuesday.


Walter David Baker: One further matter, Mr. Speaker. Could the government House leader inform the House when he intends to bring in the supplementary estimates for consideration.


Allan Joseph MacEachen: Mr. Speaker, the President of the Treasury Board advised me that the target to date is a week from next Wednesday.



GOVERNMENT ORDERS


Mr. T. C. Douglas (Nanaimo-Cowichan-The Islands) moved:: That this House expresses the opinion that the government should give consideration to the taking of immediate steps to ensure that available petroleum supplies are used to ensure a continuity of supply at fair and just prices to all Canadian consumers and as a preliminary step to this end should implement the following measures:
October 25, 1973

1.	The setting up of a publicly-owned National Petroleum Corporation to enter into bi-lateral arrangements with oil-producing states and to supervise the marketing of oil in Canada.
2.	The extension of the oil pipeline to eastern Canada and the bringing of the inter-provincial pipeline under federal government ownership.
3- The ensuring of future oil supplies by entering into negotiations with the provinces concerned for the development of the oil sands by a joint federal-provincial Crown corporation.
He said: Mr. Speaker, in presenting this motion for the consideration of the House, I think it is a most opportune time to discuss the oil situation in Canada because at this moment we face some very serious problems. For years voices have been raised in this country warning of an impending oil shortage. Very few have listened and nobody has acted. Successive federal governments have refused to face up to the consequences of an archaic oil policy and more recently, no policy at all.
There is no reason why Canadians should be unable to secure adequate supplies, particularly at fair and just prices. Canada is a net exporter of oil. We are one of the few countries in the world which produces more oil than it consumes. Why then should the people of Quebec and the Atlantic provinces face the possibility of oil shortages this winter? The unpalatable fact is, Mr. Speaker, that we do not have a national policy in Canada; we have a Standard Oil policy in Canada.
In 1961, the government of that day established the Borden line running through the Ottawa Valley. West of that line was designated as the exclusive market for western Canadian crude and east of the line was to be served by offshore oil, mainly from Venezuela. It is noteworthy, Mr. Speaker, that Standard Oil is the major operator in western Canada and also in Venezuela; Canada has been parcelled into two captive markets. At the present time Canada is exporting western crude to the United States midwest at a rate of 1.2 million barrels of oil per day and importing offshore oil to an amount of about 800,000 barrels per day. This leaves eastern Canada completely at the mercy of oil importers, both with reference to security of supply and to price.
We have been told frequently that the government has a contingency plan in the event that offshore oil is cut off. Such a plan did operate in 1956 and 1967 during the Arab-Israeli conflicts through a swapping arrangement by which Canadian oil exports to the United States midwest and to the Rocky Mountain regions were increased in exchange for increased U.S. oil supplies being shipped to eastern Canada. Mr. Speaker, that plan worked because the United States had spare production capacity but that is no longer the case. The Minister of Energy, Mines and Resources (Mr. Macdonald) has been telling us for months that the government has a contingency plan to meet the possibility of offshore oil being unavailable. Today when he speaks I hope that he will tell the House of Commons what that contingency plan is, and how he proposed to meet the present situation in eastern Canada.
We have to face the fact that the amount of oil and gasoline the people of eastern Canada will be able to consume, and the price they will be required to pay is not in the hands of the government but is in the control of the major oil companies. The production, refining and distribution of petroleum in Canada is in the hands of foreign
Oil
controlled multinational corporations. Some 91 per cent of our production and 99 per cent of our refining capacity is in the hands of this gigantic octopus, which is not concerned either with security of supply or with fairness of price. Their concern is making money. If that means leaving Canadians short of their requirements or compelling them to pay exorbitant prices, so be it.
We saw that this last winter when oil shortages in the United States pushed up prices to the point where it was more profitable to export Canadian oil to the United States, even if Canadians were going short. Only when the minister summoned up enough courage to impose export controls, first on oil and then on gasoline, were Canadians west of the Ottawa Valley given some security of supply. But this did not stop the increase in the price of oil which has gone up some 37 per cent, an increase of 95 cents per barrel in less than a year.
On September 4, this faint-hearted government finally acted, not to cut back the unjustified price increase but merely to hold the line. Now, we are witnessing the major oil companies playing the same game in eastern Canada. For years we have had the bland assurance that if we shipped our western crude to the United States we need have no fear about security of supply in Quebec and the Atlantic provinces. The NDP has always contended that in an emergency, the U.S. based oil companies would ensure supplies for the United States at Canada's expense. At present there is said to be a gap of 100,000 barrels per day between eastern Canada's need and the quantity of oil being imported. Some western crude has been diverted to eastern Canada by four companies, which have shipped the oil down through the seaway. When the freeze up comes this will no longer be possible. The quantity that can be moved by road and rail is insufficient to prevent hardship.
The inquiries made by the Minister of Energy, Mines and Resources regarding the diversion of offshore oil intended for Canada to the United States have, in my opinion, been superficial and the replies we have received would not deceive anyone less naive than the minister. Yesterday the minister said, as recorded at page 7182 of Hansard:
... I have had replies from Canadian refiners, particularly the two refiners mentioned by the hon. member for Yorkton-Melville . . .
It is significant that he made no reference to the marketing branches of the parent companies. Apparently he did not ask them whether there had been any diversion. It is significant that no reference has been made to the shipping register. Therefore, we do not know whether or not ships which were destined for Canada, ships carrying oil to Canadian ports, were diverted and, if so, by whose orders?
The minister said today that he knows of no ships having been diverted. The oil industry seems to think that ships have been diverted; otherwise, how does one explain the shortage which is being experienced in eastern Canada? A report from Calgary, which appeared in the Globe and Mail on October 23, gives the views of persons in the oil industry. I shall quote from that report, as follows:

October 25, 1973
Oil
The recent diversion of several ocean-going tankers loaded with oil destined for Canada to U.S. ports is said to have contributed to the present shortage of crude oil in Quebec and Eastern Canada.
Industry sources suggest that diversion of tankers from their original Canadian destinations to U.S. ports began as a ploy in the final week of September to circumvent the Arab restrictions on the direct flow of oil to the United States.
The tankers are either owned or leased by the same international oil companies that operate within Canada and overseas and which are mostly headquartered in the United States.
According to information in Calgary, the tankers destined to Canadian ports have 'not been hijacked' but merely ordered to change directions 'under the complex and global marketing and supply patterns of major companies.'
If one wants to know who really decides where oil will go, one ought to read the next paragraph in the article, which says:
An industry expert with the Canadian subsidiary of an international oil company who asked that he not be named said that there was 'nothing sinister' in diverting Canadian-bound tankers to the United States and added that most U.S. planners believe that Canada 'could get by' with the remaining oil imports.
We have come to a pretty pass when United States planners decide whether or not we can get by, and whether or not oil destined for Canada can be diverted to some other port.


Some hon. Members:: Hear, hear!


Thomas Clement (Tommy) Douglas: This country desperately needs an oil policy as part of an over-all energy policy. Most of the government's views, as contained in the energy report tabled a few weeks ago, have already been repudiated by the government or overtaken by the rush of events. In this debate it is not possible to cover the whole field of oil policy. Nevertheless, some decisions ought to be taken without delay if our present situation is not to deteriorate into a Canadian oil crisis by the end of this decade.
My colleagues and I have put forward three proposals that should be acted upon immediately. The first is:
The setting up of a publicly-owned National Petroleum Corporation to enter into bilateral arrangements with oil-producing states and to supervise the marketing of oil in Canada.
Many nations are seeking to bypass the oil cartel. They want to deal directly with governments. Japan and West Germany have both entered into bilateral trade arrangements with oil producing countries. Exporting countries represented by OPEC have also rebelled against exploitation by multinational companies and have publicly indicated their desire for bilateral agreements. This is true of countries like Libya, Nigeria and also Venezuela. The minister himself said, after returning from a visit to Venezuela, that the government of Venezuela would like to deal with a national petroleum corporation. As recorded on page 7183 of Hansard, the minister said:
It is not so much the ingress of the commodity into Canada as its egress from the supplying states that is the problem.
Of course that is the problem. The best way to resolve it is by following the example of other countries which have entered into state trading agreements with oil producing countries. That way we can be assured of continuity of supply.
A national petroleum corporation would also ensure continuity of supply and stability of price in this country.

That is what consumers of Canada have the right to expect. They do not want to be at the mercy of foreign-owned corporations which are responsible to nothing except the balance sheet. Such a petroleum corporation would also be able to allocate oil supplies, so as to ensure that every region of Canada has its needs met. As well, it would be able to encourage the processing of more of our oil in Canada and the development of a petro-chemical industry in Canada, an industry which we have the capacity to develop.
The second proposal which we are putting forward in a motion is as follows:
The extension of the oil pipeline to Eastern Canada and the bringing of the Inter-Provincial pipeline under Federal Government ownership.
I, for one, have been arguing in this House for ten years now in support of the advisability of extending that pipeline to Montreal. The present minister and his predecessors had given us a variety of reasons to show why this could not be done. There have been arguments about economic viability, which the independent petroleum producers of Canada completely demolished in their brief. We were then told that there would be enough oil in the Atlantic provinces to meet the needs of eastern Canada. That hope, of course, has turned out to be unfounded.
On September 4 the Prime Minister (Mr. Trudeau) announced a policy for the extension of the pipeline to Montreal, something that should have been agreed on at least ten years ago. We have no right to leave large sections of our population at the mercy of the world's oil producing companies, especially when we have adequate supplies in Canada to meet our needs. The building of that pipeline should be begun just as quickly as the government can make the necessary arrangements. I believe that public opinion in Quebec and the Atlantic provinces will support the government in this regard.
Further, we think that such a pipeline ought to be publicly owned, because pipelines will be the future means of transporting many commodities. They are too important to be left in the hands of oil companies which have no responsibility whatsoever for ensuring proper distribution and providing adequate supplies.


Some hon. Members:: Hear, hear!


Thomas Clement (Tommy) Douglas: We believe that such a pipeline ought to be reversible so that when offshore oil is cheaper, it can be used and moved further west, thereby conserving our own oil which is rapidly running out. If we are in danger with regard to price or supply from oil producing countries, western Canadian crude could flow into the Quebec and Atlantic provinces when it is needed. As a matter of fact, I agree with the hon. member for Nipissing (Mr. Blais) who was pressing this afternoon for extending this pipeline through Canada rather than leaving ourselves completely at the mercy of another country by having it pass through the United States, with all the complications that may arise if we decided to loop that line at any time.
The third proposal we have put forward is the ensuring of future supplies by entering into negotiations with the provinces concerned for the development of the oil sands
October 25, 1973

by a joint federal-provincial Crown corporation. While it is true that Canada can meet its oil needs for the present, our supplies of conventional crude have a life index of only 10 to 12 years. There are some authorities who would set the figure much lower than that. By the end of this decade, our oil production will have peaked and we will be required to look at other sources of energy.
We are fortunate in having one of the largest potential sources of oil in the world in the oil sands of Alberta and Saskatchewan. The potential is many times the quantity of potential crude we had at the turn of a century and, if properly developed, could meet our needs for many decades. We are not talking about a small quantity of oil. The estimated potential is some 300 billion barrels. When we consider our present conventional supply is about 10 billion barrels, we will be aware of the fact that the oil sands in Alberta and Saskatchewan could be a life saver for Canada, if properly developed and the production made available to our people. If we have learned anything from the past, it is not to allow such a vital resource to fall into the clutches of the major oil companies.


Some hon. Members:: Hear, hear!


Thomas Clement (Tommy) Douglas: We must not repeat the mistakes of the past, the mistakes we made when we allowed 91 per cent of our oil production to fall into the hands of foreign controlled companies. If we are to develop these oil sands for the benefit of the people of Canada, it should be under public ownership and it should be through a federal-provincial Crown corporation.


Some hon. Members:: Hear, hear!


Thomas Clement (Tommy) Douglas: If we are going to develop the oil sands through a joint federal-provincial Crown corporation, it should be for the purpose of making sure that the oil from those sands will be available to the Canadian people, not only today, but tomorrow and for generations yet to come.
The oil companies which make up the consortium that is seeking to build the Syncrude plant are talking about approaching the federal government. They want to be exempted from price controls, export controls and export tax. What does this mean? It means only one thing. The three major companies involved in that proposed development have in mind the development of the oil sands for the purpose of shipping oil to the United States where they can get a much better price than they can get in Canada. I will fight to the death against any move to turn this tremendous deposit over to companies which want to take this oil, as they have taken so much of our other oil, out of Canada for the purpose of making a profit by selling the birthright of the Canadian people wherever they can make a fast buck out of it.


Some hon. Members:: Hear, hear!


Thomas Clement (Tommy) Douglas: I believe the federal government should open negotiations with the provinces of Alberta and Saskatchewan with regard to the immediate development of these oil sands. The federal government is levying an export tax of 40 cents per barrel on all oil shipped out of this country. I support that move. I think it was a good one. However, I believe that 40 cents a barrel should be returned to the provinces which produce the oil.
Oil


Some hon. Members:: Hear, hear!


Thomas Clement (Tommy) Douglas: I believe the federal government should negotiate with the provinces to see if they would be prepared to use that money as their equity share in a joint corporation to develop the oil sands. That would enable these two governments to put in $180 million a year. I think the federal government ought to match that.
In a way, the federal government owes these two provinces that amount as a result of fixing the price in Canada on September 4. I supported that move and still do. However, these provinces did lose some money on the royalty they would have collected if the domestic price would have kept pace with the export price. I am not suggesting that the federal government can rectify that, but in view of the fact they have not put a price ceiling on any goods other than oil, Alberta and Saskatchewan have a just complaint.
In my opinion, the federal government should, as a quid pro quo, say quite properly to the oil producing provinces, we are prepared to put in another $180 million along with returning the export tax to them. That would total $360 million a year. It would supply the equity capital plus what loan capital could be floated on the market to begin building plants for the extraction of oil from the oil sands in Alberta and Saskatchewan.
I am sure hon. members realize the seriousness of the situation. By the year 1980, we will be in trouble with regard to our oil supplies. As far as Canadian crude is concerned, it will not cut off instantly. It will begin to phase out. We will probably pass our peak by 1977 or 1978. By the end of this decade, we will be facing a very serious situation. If we do not do something about it now, we will probably panic at that time and unnecessarily spend huge sums of money on a crash program which could be avoided by starting now.
It is estimated we will have to build a plant approximately every 18 months in order to have sufficient capacity to produce oil from the oil sands by the time our normal conventional crude has run out. That means we have to start soon.
I hope the minister will tell us today whether he is interested in opening negotiations with the provinces of Alberta and Saskatchewan. No one is going to tell me we cannot raise the money to develop the oil sands. If the federal and provincial governments will put in the equity capital and offer participation by the Canadian public, I am sure thousands of Canadians would invest in the development of it. For the past few years the government has been talking about a $6 billion pipe line to bring Prudhoe Bay oil down to the United States, a project which will do no good at all for Canada but which will be a convenience to the United States. No one can tell me that the government and the people of Canada cannot find sufficient money to develop these oil sands so that when our children and their children face the prospect of being without oil, the oil sands will have come into production and will meet their needs not only in this century but for several decades into the next century.

Oil
I believe this is one of the most important decisions facing the people of this country. We must not wait until the crisis is upon us. We must begin to plan now so that when our conventional sources of supply dry up, plants in the oil sands will be ready to go on stream. I need not remind hon. members that ours is a technological society. It is true there could be some reduction in our consumption of oil. We might be able to persuade people to drive smaller cars and insulate their homes better so that they would use less gasoline and home heating fuel. The fact remains that our transportation system, much of our industry and practically all of our agriculture production are dependent upon adequate supplies of oil at reasonable prices.
I wonder whether hon. members have ever considered that if we had to go back to the horse to produce the food the people of Canada need, 40 per cent of our population would be needed on the land instead of 10 per cent as at present. We could not feed ourselves if we lacked oil for tractors, combines and other farm equipment. We can no longer leave our future development in the hands of foreign oil companies. Parliament, this parliament, must take the initiative in pressing for a workable oil policy to meet Canada's needs before it is too late.


Donald Stovel Macdonald: Would the hon. gentleman permit a question?


Thomas Clement (Tommy) Douglas: Yes, of course.


Donald Stovel Macdonald: I am trying to clarify the hon. gentleman's position on the disposition of the export tax. Do I understand him to say that if the royalty which the provinces would have received from the increased price was made good to the provinces he would still insist that the additional amount which would have accrued to the company benefit should be given back to the province as well?


Thomas Clement (Tommy) Douglas: I am not suggesting the federal government should pay the province the amount the provinces would have collected in royalties from an increased price in the domestic field. I sought to make two points. First, the federal government should return the 40 cents a barrel to the provinces but I would make it conditional that they be prepared to use that money for the development of the oil sands. Second, in view of the fact that these provinces are not getting a royalty on domestic oil they would have received had the federal government not, quite properly, applied a price freeze, I think the government has some moral obligation to put a considerable amount of federal funds into the development of the oil sands.


Mr. Speaker:: I am sorry I must interrupt the hon. member who is replying to the minister's question, but his time has expired.


James Balfour: It is not possible Mr. Speaker, to read the motion put before this House by the hon. member for Nanaimo-Cowichan-The Islands (Mr. Douglas) without reaching the inescapable conclusion that the New Democratic Party has once again sacrificed the public interest to party survival, and sought to conceal

that betrayal of the public interest with a mask of compassion.


Some hon. Members:: Oh!


James Balfour: Mr. Speaker, the opening paragraph appears to deal with the current urgent crisis in oil supplies, a crisis which threatens Canadians in the immediate winter months ahead with difficulties in connection with transportation, heating, industrial unemployment and rising prices. The motion urges the government to take immediate steps to solve these difficulties. Mr. Speaker, what "immediate steps" is the House to ask the government to take?
As a preliminary step to the "immediate steps", the government is asked to set up a national corporation to contract with oil-producing states and, once the oil is obtained, to supervise the marketing of the oil. Parliament has set up a number of national corporations. We might estimate that such a corporation, once constituted by parliament, will take a couple of years to negotiate and contract at the international level.
As another preliminary step, Mr. Speaker, the House is asked to authorize the government to extend the oil pipeline to eastern Canada and to bring such a pipeline under federal ownership. It is common knowledge that construction of such an extension will take at least until 1976.
Then, as the final preliminary step, we are to ask the government to ensure future oil supplies by negotiating with the concerned provinces for the development of the oil sands by another Crown corporation. Even the NDP draftsman boggled at describing this project in any other time context but "the future"; yet he managed to include it as a "preliminary step" to be taken before any "immediate steps".
These "preliminary steps" that are to be taken before any "immediate steps", are long-term projects, Mr. Speaker. They are, whatever their merits, simply not relevant to ensuring that there is continuity of supply to Canadians at fair and just prices this month, in November and December of this year, and in the winter and spring months of 1974. Canada, eastern Canada in particular is facing a crisis in the energy field. Contrary to the view put forward by many, however, I suggest that this crisis is not one of an inadequate supply of energy fuels in Canada but, rather, an organizational crisis caused by failure to arrange for adequate supplies of energy to be at the appropriate place in terms of consumer demand at the appropriate time. It is, in other words, a crisis created by the lack of a coherent energy policy on the part of the federal government, concerning which much has already been said. A great deal more will be said, I am sure, in the weeks and months ahead.
If Canadians now and throughout the winter months become caught in a situation of inadequate supplies of energy fuels, blame for the situation must rest squarely on the shoulders of the present government because of its failure to undertake meaningful consultation on energy matters with the producing provinces, with the industry itself and with the foreign crude oil suppliers as well as its heavy-handed approach to policy implementation and the complete lack of a national energy policy consistent with the conditions prevailing at the present time.
October 25, 1973

Instead, we are presented with a policy-making process which can only be described as ad hocery with the government appearing to lurch from energy crisis to energy crisis and, in the process, antagonizing the western provinces, the petroleum industry and our American customers to the south. Eventually, I predict this antagonism will be shared by the eastern Canadian consumer if he finds during the winter months ahead that he is short of fuel for his home and gasoline for his automobile. I repeat, Mr. Speaker, that the main victim of the current energy crisis in Canada is the Canadian consumer.
The current energy crisis has a national character. In the Maritimes, failure to protect sources of supply has left the provinces at the mercy of middle east oil cut-offs and tanker diversions to other destinations. Dependence in these provinces on offshore oil supplies may leave maritime consumers at the mercy of the OPEC countries. In Quebec and Ontario, consumers may have insufficient oil this winter. As much of this oil comes from the Caribbean area, and as much of these supplies may be diverted to the United States to meet shortages there, the industry is now scrambling to implement emergency plans to prevent possible shortages this winter. But can the federal government assure the consumers of Quebec and Ontario that there will be no shortages during the winter months? In Quebec and Ontario, as elsewhere in the country, the price of gasoline, home heating oil and other oils has been rising rapidly. What measures does the federal government propose to protect the consumer from unreasonable price increases for his fuel supplies?
In western Canada, the federal government's mixture of arrogance and complacency has created resentments and antagonisms that will long endure. Imposition of the export tax without prior consultation with the producing provinces, and without a clear-cut commitment to these provinces that the revenue so generated by their oil would be returned to them in total, has further weakened the cause of federalism in Canada and will not soon be forgiven or forgotten by the provinces concerned.
In its approach to formulating national energy policies, this government is once again resorting to techniques developed and discredited during its first term of office. A flattering name for its participatory democracy. In practice, however, it amounts to leadership from the rear. Its loose-jointed experiments in policy formulation in parliament are largely responsible for this government's unimposing legislative record. But here we go again in a matter of vital national concern, a national energy policy for which the government has repeatedly stated it gave high priority.
In December 1972, the Minister of Energy, Mines and Resources announced that the government expected to have a national energy policy ready to present to parliament in June. There was no policy in June, or in July, or August, or September, or October. Instead, there have been a series of ad hoc policy decisions implemented in a heavy handed manner and of questionable utility. Canada has a pressing need to establish clear national policies on energy matters to ensure that Canadians get the clean energy they must have at the best possible price with the
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least possible disruption of the rest of the economy and with a minimum impact of the environment.
I suggest, Mr. Speaker, that the time is long overdue for this government to define clearly and precisely for the Canadian people energy policies at the national level which, in turn, must be based on broad national objectives. I further suggest that the most important such broad national objectives would include the basic need to maintain a secure supply of energy for the Canadian people, to be available to it at competitive prices; the need to safeguard our national security; the need to ensure that any export of energy supplies be on terms that produce a net benefit to our nation; the need to maintain a vigorous and healthy energy industry; the need to align energy policy goals with other national objectives, including environmental protection, control of our own economy and the protection of the rights of our native people; and finally, the need to maintain a flexible energy policy posture so as to be capable of responding to changing world conditions.
I submit that Canada is not experiencing an energy crisis in terms of a long-term capability to meet our supply requirements. However, by its inertia, by its lack of a comprehensive policy, the government is in grave danger of creating such a crisis. Unless the current uncertainty affecting the future operations of the industry in our frontier areas is resolved so that exploration and development may proceed in an orderly and economic manner, future shortages may very well result; and therein lies our greatest danger.


Donald Stovel Macdonald: Mr. Speaker, in the motion that the hon. gentleman has brought forward today he has included several concepts that have been very much under discussion, either because they have already been canvassed frequently over the years-such as the Montreal pipeline extension-or because they were canvassed very extensively in the energy analysis or in other public statements that I have made. I find in the three different points that he makes, some points to agree with, some points which have already been stated and which he knows go in the government's direction, but there are other viewpoints that I do not share.
Basically, the three questions that he raises are all related to the substantial issues that are facing us at the present time, and which have faced us particularly during these past several weeks as a result of pressure from the external changes in energy supply and the fact that that supply of oil that North America has in relative terms has been declining, with increasing dependence being placed on overseas supplies, supplies which as I say have already been put under pressure by reason of political events in the Middle East.
The hon. member for Nanaimo-Cowichan-The Islands (Mr. Douglas) reviewed the historical events by which we got to this point. However, he very carefully left out, in the course of his analysis, what was really the substantial and the critical factor involved in the energy policy which was enunciated in 1961, and which until recently we have been following, namely that western Canadian oil-that is, Alberta and Saskatchewan oil-was at a substantial price disadvantage and was substantially more expensive than oil that was available elsewhere throughout the

October 25, 1973
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world. Overseas oil was available at the beginning of that particular decade at relatively low cost and, contrary to what the hon. gentleman said, it was available till toward the very end of the decade at even lower cost.
Let me say on behalf of the policy that was enunciated by the hon. member for Prince Edward-Hastings (Mr. Hees) and carried forward by subsequent governments that, on the whole, it made basic sense to put Canada in the position where we could buy cheaply for our market and sell abroad at higher prices. I think the policy at that time was good from the standpoint of Canadian consumers. Perhaps the only group of Canadian consumers who suffered from the policy was those that I represent in central Ontario. But from the standpoint of Canadian consumers east of the Ottawa Valley line, they were at a distinct price advantage in terms of cheaper off-shore oil; and from the standpoint of the producers in western Canada, the policy provided them with a protected market, which in the years of over-supply during the late 1950's and early 1960's had proved to be a substantial depressant on the growth of that industry. The industry has grown and prospered because of that policy, and on the whole I think it was a sound one.
The two principal external events which brought about a change in this policy, events which have accelerated in the last several years, were firstly the very substantial shift in North American demand, and principally United States demand, which theretofore was very substantially self-sufficient in oil; secondly, the combined action by the governments of the member states of the OPEC countries in getting together to agree to force up the international price of oil.
The hon. gentleman has referred to the fact that there were high profits made. I do not think there is any doubt that this has been a very profitable industry for the investors and companies involved. But the problems which the Canadian consumers have in the eastern Canadian market today, and indeed throughout the whole Canadian market, I think it is fair to say are not the result of company action but rather the result of foreign government action. I made a careful note of his reference to the OPEC action, and in terms of international relations I think it has been a very legitimate action.
The hon. member referred to the efforts of the OPEC countries to rebel against the low prices that had been forced upon the producers in those countries by the actions of the international oil companies. On the one hand, it may be commendable that this group of member states, most of them in the third world, should be able to recoup a better return for their resources; after all, this is what we in Canada say. On the other hand, it is fair to remember that the other side of the coin is that we, as Canadians, are going to wind up paying more money for our oil supplies. Judging by the motion that has been put forward by the hon. member, I take it that neither he nor his party is proposing that we should totally eliminate foreign oil from the Canadian market but should indeed remain dependent, to some degree at least, on supplies of foreign oil.
The fact of the matter is that for a period of time-and I think here of the OPEC action in combination with a price increase-there has been general collective action toward
[Mr. Macdonald (Rosedale).j
greater state involvement which has been taken in different ways, depending on the country concerned. For example, the action in Iran, with its history of struggle in the oil industry, has been different from the action taken in Venezuela. However, a precise trend leading to greater state involvement on the producing side has been taking place. There is, therefore, concern on the consuming side, in this case Canada, as to whether the structure of our market should be left to the internationals and their affiliates in the producing and consuming countries, or whether state action should now be taken.
As the House knows, I had an opportunity of reviewing this question in the very recent past with the minister concerned in Venezuela who indicated frankly it was their intention not to wait until concessions expired there in 1983, but to seek action and agreement with the companies requiring closer control of Venezuelan oil companies or producers in order that the public interest in Venezuela would control production. Venezuela made it clear to me that, in terms of security of supply agreements-and I will just interpolate here, whatever one might plan with regard to the Montreal refining market, it would appear that the effects of geography and economics would indicate some dependency in some parts of the eastern Canadian market on overseas supplies-in future planning for the Canadian petroleum market some portion of the petroleum will continue to come from overseas. It would be desirable if possible, as the hon. gentleman said, to try to establish that supply in terms of long-term contracts.
Indeed, Venezuelans indicated they would be prepared or interested in negotiating a long-term contract, but indicated that the primary vehicle for this purpose should be a national government entity rather than an affiliate or affiliates of various corporations in Canada. It is for that reason that this is one concept the government will have to take into account in its current consideration of policy to establish a national petroleum corporation in this country.
The term "national petroleum corporation" has become something of a pressman's cliche, being passed on from newspaper editorial to newspaper editorial without any real evidence in my opinion that the authors of the articles approving the concept have really thought about what substantive questions a national petroleum corporation would solve that other policy measures or private organizations in the market could not solve.
I should like to take a minute to comment on at least two areas which may be relevant in Canadian terms, and may be a cause for consideration in this country. The first possible role for a national petroleum corporation is again what I have just referred to, that is a vehicle for acquiring a government-to-government agreement to ensure the long-term supply for the Canadian market. I am quite confident that no OPEC country is going to tie its hands in respect of price. We in Canada in our export policy have at no time been prepared to tie our hands in respect of the price of export oil, and we cannot expect that they would do so abroad. I think we should be entitled to assure ourselves of whatever the reasonable international price may be as determined from time to time by comparison

with competitive conditions, and we should at least be assured of supply. A national petroleum corporation, as I have said, could be a vehicle for an agreement of that kind.
The second of the ways in which a national petroleum corporation could be of value, and potentially could be of direct assistance in executing Canadian oil policy, would be in respect of the collection of economic rent which in future in the petroleum industry will arise very substantially from lands both in the high Arctic and offshore which fall under the jurisdiction of the government of Canada. In effect, an international petroleum corporation would be taking a role on the production side and possibly through the industry would be involved directly in the exploration and development field, or by taking the government of Canada benefits arising from oil and gas land regulations as they may be from time to time, and by taking these assets of the oil in kind, be itself a producer, or acquire the commodity for sale on the Canadian market.
The hon. gentleman made reference to this concept not being without precedent in Canada. Indeed, it has been one that has been experienced in Canada in the petroleum industry. Of course, the most outstanding and successful example in the recent past has been that in regard to Panarctic Oils. In the more distant past, we have had the experience of Eldorado and Atomic Energy of Canada, both in the energy area although in respect of nuclear power.
So, the concept of a national corporation for the purpose of collecting economic rent is one that is neither novel to us nor one we should disregard as a possible means of making sure that as these non-renewable resources are developed a very substantial portion of the benefits should remain in Canada, either indirectly through the economic activity they create or directly through the payment of economic rent to the Canadian public interest for the benefit of Canadians.
There is a third role here, and this is where I think there may be some relevance to the third part of the hon. member's motion, and that is with regard to the role of the government of Canada in relation to the development of our oil sands. If I may say so, I was a little surprised to hear from a former premier of Saskatchewan a full reference to oil sands, some of which are in northern Saskatchewan, but principally in Alberta, but no reference to the heavy oil in the Lloydminster field. Whether we talk about Cold Lake or Lloydminster, we also have some very substantial deposits of petroleum in both Alberta and Saskatchewan which, if the technological problems of lifting the heavy oil can be solved, will along with the oil sands provide a very substantial reserve for the future in Canada.
In both these areas, I think it is perfectly evident that a great deal of expenditure is required in terms of research and development of the resource. In the case of the Athabasca oil sands, while a great deal is known by individual lessees about individual properties, I think I am correct in saying there is not very substantial knowledge about the full dimensions of the deposit, about its qualitative differences from level to level, about the impact of certain kinds of in situ recovery processes, or whether if the right kind of process is not used you might make it
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more difficult rather than less difficult to get the oil out. Above all, of course, not much is known about the most efficient in situ method to get to the oil resources.
Certainly, a critical fact with regard to the oil sands, it seems to me, is not with regard to the 65 billion barrels which the energy analysis estimated was accessible through the customary open-pit mining techniques, but rather how we get at the 250 or more billion barrels of oil which at the present time are not regarded as recoverable by conventional techniques and in respect of which an in situ technique will have to be developed.
I agree with the hon. gentleman that there will have to be substantial public expenditures involved. Indeed, the government has already declared itself on this point at the Western Opportunities Conference, when it indicated at that time its willingness to enter into research and development programs in conjunction with western provinces for the purpose of not only developing and determining the limits and best means of reaching these various western deposits, but also for bringing them into development.
That proposal was not confined only to petroleum of the various non-conventional kinds to which I have referred, but referred as well to the possible development of the coal resources in that particular area. I think a lot of public money will have to go into this, and one of the least advantageous ways as far as I am concerned would be research and development grants made available to the existing petroleum corporations. I think if public funds are to be expended for the purpose of developing the technology to deal with this unique Canadian resource, we should be thinking in the same terms we thought of in respect of Eldorado and Atomic Energy of Canada Limited. So far as the federal government is concerned, the know-how, the patents and the other information developed from this should be held in a public form in a public corporation, and this should be carried out, because of the jurisdictional division, in conjunction with a similar corporation on the provincial side.
So, this represents a further very important area of endeavour in the development of additional Canadian petroleum resources at a time when we have identified, as detailed in some length through the energy analysis, conventional Canadian resources which are accessible by present gathering systems, and at a time when we are moving into the non-conventional resources in order to ensure a substantial supply of petroleum products for the future.
The hon. gentleman referred to the question of the export tax, a question which we will have occasion to debate in this House when, in due course, the ways and means motion comes up for consideration. In connection with the export tax and division of the proceeds, this is a question on which I hope to have further discussion next Monday in conjunction with my colleague the Minister of Finance (Mr. Turner) with the Alberta ministers who are coming down to talk about this and the Syncrude project. It seems to me-this is the position I have taken and I think the hon. gentleman disagrees although I am not sure I quite understood his answer-that in effect the provinces should be made good on the royalties that they

October 25, 1973
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would have obtained, not so much if the export tax had not been put on but if we had not put a domestic freeze on the price.
In other words it was not the export tax that has deprived the provinces of revenue; it is the fact that we have put a freeze on the price whether for export or for sale to the Canadian market. So I would agree that if 40 cents a barrel appears to be the differential in any particular month, it is not unreasonable for the provinces to expect that the royalties they might have received would be returned to them. I am not sure I would quite agree with the hon. gentleman that they should receive the additional funds, which in effect once the provincial royalty is paid would have gone into the company account, would have been exigible for federal income tax or available for company use, either in that province or more probably as has been the experience in the last year or so for diversion outside the province, and even outside Canada for engaging in other exploration activities.
I am not all together sure that it necessarily follows that, too, should be paid directly into the provincial account. I do think there is a nexus here between the windfall, if you like, or a fund both for the province and for the federal government, and the subject I was previously discussing, namely the very heavy expenditures in a research program. As I have indicated already to the Alberta ministers, we would see substantial sums of money being placed to back up that undertaking we made at the Western Economic Opportunities Conference for the purpose of developing these resources in western Canada, and developing them of course for the benefit of western Canadians but also for the benefit of all Canadians.


Robert Lorne Stanfield: With a tax on their produce.


Donald Stovel Macdonald: The hon. gentleman says "with a tax on their produce". There is a tax on the produce of all Canadians.


Robert Lorne Stanfield: Not like this.


Donald Stovel Macdonald: It seems to me that if the province has chosen to pick a particular level of royalty as being the best and equitable return to that province from the resource, then we should take their word for it. The additional revenue, of course, is one that the province itself could not have raised by any form of export or removal tax. To that extent, it is a revenue in the public area that they would not have obtained by any tax method.
Several other questions are raised by the motion of the hon. gentleman which it seems to me were not very fully dealt with in his remarks. In particular it is not clear to me, to pick up the last part of the first sentence, how the national petroleum corporation would supervise the marketing of oil in Canada. Certainly, the experience with national corporations in other parts of the world has been that on the whole, at least down at the refining and retail marketing level, a national corporation instead of being a fully competitive entity has almost provided a price umbrella under which the internationals have been able to compete without any difficulty at all.
[Mi. Macdonald (Rosedale).j
I think the real question to be decided in our mind is whether we need to put the national corporation to work at all the levels of the highly vertically integrated industry, or whether there are some levels particularly at the production and wholesale supply end in which a national corporation could operate most effectively. It was not clear to me from what the hon. gentleman said, given the relative shortage of these large sums of capital in Canada, what particular advantage would accrue from nationalizing the pipelines in Canada. It is difficult to pick a type of company which is more subject to regulation in this country than a pipeline company is in relation to other elements of public policy by the setting of the tariff and by the other controls established through the province, if it is under the jurisdiction of a province, or a national pipeline corporation where the jurisdiction is established through a regulatory tribunal.
The pipeline does not ensure the supply. The supply comes from the production which is held elsewhere. Pipelines really only perform a service in relation to the supply. If private capital is prepared to be placed in that particular area on the whole, given only a limited pool of public capital, I would rather put it in the area where the big public gain is to be made in terms of the return from the resource with necessarily the lower return which may be safer but which is available in terms of a pipeline owned by a pipeline corporation.
In summary, Mr. Speaker, we are in a position where, with rapidly accelerating events in the energy scene, particularly in the petroleum industry, we are at the moment in the process of changing from the oil structure we had known before, not only nationally but internationally. We have come to a situation where the major international corporations play the dominant role in seeking and developing the resources, and then later marketing them and controlling the price.
From the situation of control of companies which first brought OPEC into existence, we have moved into a situation where the companies are increasingly losing their power to control the situation and must increasingly go to government in order to get the support to carry on their operation. Whatever the political philosophy, whether one likes it or not, the fact of the matter is that the producing countries are moving into a situation where they are placing government more directly into the action and, ultimately, I think there is a trend toward closer govern-ment-to-government involvement. In that sense, a national entity under the Government of Canada can have increased leverage in dealing with this situation. It is the possible role of such a national entity in our over-all petroleum policy that is being given consideration by the government at this time.
If I could, just for a moment, I should like to make some reference to the security of supply question. This is a question that is of particular concern at the moment. The security of supply question has been a continuing concern ever since the commencement of our national oil policy, given the fact that some portion at least of the oil supply was coming from an area of the world with a certain political instability. There were interruptions in the supply to the Canadian market in the past in 1956 and 1967. In both cases, they were not prolonged interruptions
October 25, 1973

and were ones in which the United States and western hemisphere sources were able to make good to the other oil users with not too much disadvantage by increasing production and increasing overseas shipments. The difference between those two crises and the present one is that the United States has now lost its capacity to pick up the slack.
The problem which is a matter of grave concern for us in eastern Canada is, of course, of monumental proportions to a country like Japan which has no indigenous supplies. From the standpoint of the Canadian government, we have followed a series of actions in attempting to handle the situation. The obvious and first starting point was to know whether an agreement could be achieved with the government of the United States in terms of assuring supply to eastern Canada, either from United States sources or from sources controlled by the United States government in the event of interruption. The obvious quid pro quo in this situation was that we have a very substantial delivery of oil into the United States market which at the present time is 1.2 million barrels a day, and the undertaking would be to assure that supply to the United States if they could supply a comparable assurance to us in Eastern Canada. In fact, it was not possible to get an American assurance in that regard. The best they could do was to assure their best efforts in the event of interruption, recognizing on the one hand that they would have intense political difficulties in certain parts of the United States if they had to divert oil from oil short parts of that country to Canada in order to honour such an agreement.
At the same time as those discussions were under way there were discussions within the framework of the Organization for Economic Co-operation and Development. Those discussions broke down essentially because of the different positions of a number of the principal states involved, and Japan, being the most exposed, was the one most concerned about the slow development there.
As a result, the various countries went abroad on a bilateral basis to see if they could secure their supplies. It was on that basis that I indicated my intention, and later followed up the indication, to go to Venezuela to see under what circumstances that supply could be assured to Canada. While the indication there at the present time was that they did not expect to see a reduction in the supplies coming to the Canadian market, in the longer run a government arrangement would be necessary, of the kind I referred to earlier in my speech today. We have at the present time, in relation to security of supply, stocks of petroleum products which vary according to the nature of those products. In crude and certain other products we have about 45 days supply, and with regard to heating oil up over 100 days supply.
The capacity of the Canadian system, the Canadian productive system, to meet the requirements of eastern Canada is limited to a degree by the productive capacity in Alberta, but the greater limitation is the fact that there is not an effective delivery system from the end of the line in Sarnia to Montreal. It was really to overcome that security risk that the government undertook the decision in principle in favour of the Montreal pipeline, provided satisfactory arrangements could be worked out, among other things
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with the province of Quebec, to make certain that the province's plan for petroleum industry development would not be deflected by a pipeline. I am confident that in the aftermath of current events some of the reluctance on the part of Quebec to enter into that system will be overcome, and that we will see an extension of a pipeline of that kind. As I indicated earlier today, in answer to a question, that will be one of the priorities in ensuring supplies to the Canadian market.
The government entered into discussions with the eastern Canadian producers and importers, commencing as early as June last, to deal with heating oil supplies because of the general international shortage of this refined product, and but for the potential interruption in supplies from the Middle East there was a general feeling in the industry that heating oil requirements could be adequately covered by the supplies that would be made available through the winter. This will bear careful attention and examination as time goes on, and indeed the National Energy Board is monitoring certain of the markets on virtually day to day basis, and on a basis of several times a week in other cases. The critical period is within the next 45 days, when the navigation season is open, and one of the questions we have to meet is to make sure the product is moved to the right place to be available in time for winter supplies.
I am obliged to the hon. member for Nanaimo-Cowi-chan-The Islands for creating this occasion today to talk about some of these matters, allowing me to give the government's views on these various issues. I will listen with interest to some of the other contributions made to this debate.


Some hon. Members:: Hear, hear!


Robert Lorne Stanfield: Mr. Speaker, would the minister permit a question?


Donald Stovel Macdonald: Absolutely.


Robert Lorne Stanfield: It is on the subject of the immediate supply problem. I am not sure that the minister understood my question during the question period. Has his department or the National Energy Board been informed, not necessarily directly by the producing company in Saudi Arabia, either directly or indirectly, that that company has been instructed by the government of Saudi Arabia to ban shipments of oil to Canada?


Donald Stovel Macdonald: Mr. Speaker, we were given advice that ARAMCO had received instructions of this kind from the Saudi Arabia government. We have also had conflicting-


Robert Lorne Stanfield: You were given that information?


Donald Stovel Macdonald: We received information that that kind of instruction had been given. We also received conflicting information as to whether or not this would be the case, as to whether or not the government of Saudi Arabia would distinguish Canada from the United States in terms of its embargoes. Very naturally, the Canadian purchasing companies that purchase oil from ARAMCO are pursuing this question. The government of Canada will be pursuing it also. At the moment, I do not

October 25, 1973
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think it can be confirmed that there will be an interruption in supply from Saudi Arabia.
May I just say that it is my earnest hope that there will not be any such interruption and that, as the Secretary of State for External Affairs (Mr. Sharp) said, Saudi Arabia will see that Canada has attempted to play a balanced role in this issue, and that neither the interests of Saudi Arabia nor of Canada would be served by that kind of interruption.


Robert Lorne Stanfield: Mr. Speaker, I, of course, share the minister's hope, but in the interests of informing the Canadian people on an important subject, may I again ask has it not been indicated to the government that such instructions were given by the government of Saudi Arabia to the producing company, although the minister is seeking clarification? I do not think we should keep information from the Canadian people.


Donald Stovel Macdonald: I think I am correct in saying that the information which came to me from one source was that this has happened. Another source says that this is not necessarily so. We intend to have the matter clarified.


Thomas Clement (Tommy) Douglas: May I ask the minister a further question?


The Acting Speaker (Mr. Laniel):: If we are to pursue the questioning of the minister, we should at this time get unanimous consent because, while he was answering the previous questions his time expired. Does the House give unanimous consent to allow the minister to answer a few more questions?


Some hon. Members:: Agreed.


Thomas Clement (Tommy) Douglas: Last Thursday the minister said that he was making inquiries as to whether or not the 5 per cent reduction per month proposed by the Arab states was applicable to Canada. Has he been able to secure any information on whether that reduction is applicable to Canada? Secondly, has he received any indication that the action by Saudi Arabia or Abu Dhabi is due to the fact that there has been a report of a diversion of oil, destined for Canada, to U.S. ports, and that therefore any shipment to Canada is suspect as being a smokescreen for shipping oil to the United States?


Donald Stovel Macdonald: It is not clear to me, although the question has been pursued, whether or not this reduction will be applied to Canada. So far as we know, and this comes from the Canadian companies which themselves are in the direct role of purchasing and shipping, delivering to Canadian sites, supplies have not been interrupted. There is the instance I gave of Petrofina for which, I gather, the parent company buys and ships. In the case of Petrofina, a cargo invoiced for Canada through Portland was interrupted. We are seeking to clarify this situation with Abu Dhabi, as to whether they would recognize that that oil passing in bond through Portland would be regarded not as a U.S. invoice but as a Canadian one, and would therefore be exempt from that standpoint.
I would repeat something I said previously in comments to the Leader of the Opposition (Mr. Stanfield) about the Arab governments, that in their actions they would, I

hope, regard Canada as a country that tried to play a constructive and fair role in the crisis.
With regard to the internationals, I consider it would be an act of the grossest stupidity on their part to take action which would prejudice supplies of oil to Canada. They will have problems enough in supplying the American market, and it would be folly to go out of their way to put Canada in jeopardy. I think I might adopt what someone has said that such action would not be a crime but worse than a crime. It would be a gross blunder. I hope we have made that message very clear to the companies operating in Canada, and we hope it is understood by them.


Some hon. Members:: Hear, hear!


Mr. Charles-Eugene Dionne (Kamouraska):: Mr. Speaker, I find of great actuality the debate brought about by this motion. Explanations were given which satisfy Canadians more or less as there is increased fear of a shortage of resources. It is a very serious question that must be examined carefully if we want to make sure that Canada has sufficient oil supplies.
This situation has many causes that can be discussed this afternoon. There have been many suggestions from both sides, but I cannot say that I necessarily agree with what has been said up to now on methods of operation. First of all, we must make an evaluation of our natural resources, which is not difficult. We can see that Canada has oil wells that can supply its population and enable it to withstand difficult periods like this one.
I hope-at least I wish-that there will be some regulation for the benefit of the Canadian population.
I suggest, Mr. Speaker, that the development of oil and gas deposits must secure sufficient revenues to industry to offset unprofitable expenses and cover all production costs, including depreciation, working expenses, overhead expenses, transportation costs and sufficient returns on invested capital. Revenues exceeding this amount are defined as being an "economic profit" and can be returned either to industry, or to the owner, that is usually the state, in some cases, of course.
In Canada, there are mostly private businesses; this practice should be perpetuated. Canada could take advantage of economic profit in two different ways: direct taxation by the state, in the form of royalties, various duties, entry fees or a discount to energy consumers, through a price reduction.
Both systems have some disadvantages. The first one, related to royalties, only applies at the production stage, except for possible returns from transportation, refining and marketing. Besides, consumers do not realize right away the advantages. To be 100 per cent efficient and to prevent misuse or a waste of energy, controls exercised over oil and gas prices should not only apply to wellhead production but as well, in a selective way, to a whole range of refined oil products.
The present system of collection of the economic profit at federal level is not flexible enough to be efficient in many situations of variable costs. While including provi-
October 25, 1973

sions that provide for the reduction of royalties to encourage the development of small or medium deposits that have a low capacity at the wellhead, it allows industry to get an overly high profit in case of an important discovery and a particularly profitable operation.
It is not very useful or significant to compare fiscal and financial conditions in effect in Canada-duties and royalties-with those of other countries. Operating costs and market conditions vary a lot with countries and Canada must set financial conditions reflecting the very great differences between our resource capital and our degree of current expansion.
A revision of the present way of collecting economic profit in Canada is necessary if this country is to take fullest benefit from its natural resources. I think that the increase in oil marketing was highest at the tax level. Federal and provincial taxes on gas increased by 6.6 cents a gallon from 14.5 to 21.1 cents. In view of that, would companies be justified in increasing their prices, or should governments reduce their taxes on gas or oil?
We shall see later that oil companies do not seem to be justified in raising their prices because they make ever-increasing profits as a result of higher production.
Furthermore, governments do not seem to be ready to reduce their taxes on gas because they represent a good source of revenue and allow them to redistribute incomes from natural resources and, finally, can either discourage gas consumption which would result in less pollution or allow governments to further tax gas consumers, provincial and national highway users.
The reaching of an overall agreement should be considered so a true policy of oil marketing in Canada can be arrived at. I think we can do it. There is talk about a pipeline, about different organizations. However, if one considers oil-producing countries, Arab countries, for example, one finds in the first place that those countries incurred income losses as a result of the devaluation of the dollar. The same old dollar problem again. They want to be compensated and demand higher sale prices. As they have almost cornered the market, it is rather difficult for them to refuse to pay, unless they have other oil supply sources.
For example, let us consider the situation in the United States. They need oil imports. If supplies become more difficult to obtain, due to the requirements of Arab leaders who would like to see Washington let Israel down, there will be a shortage of oil in the United States unless they find other supply sources or develop other forms of energy.
The Canadian traveller in the United States was aware last summer of the real or artificial scarcity of oil. It seems, however, that the scarcity was indeed in the first place to get consumers to accept price increases for natural gas, gas and heating oil. As their known oil stocks can only last some ten years at the present rate of consumption, the United States must import. They are turning towards Venezuela and Canada.
Venezuela is not a safe source because of the political situation in South America, while Canada, if it wants to export its surpluses to the U.S., must rely on supplies from the Middle East to meet requirements in Quebec and in the Maritimes.
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The situation is becoming complicated. Western oil companies want to export more to the United States because of the overproduction. Canada would like to get reserves but it would have to renegotiate the Canada-United States Automotive Products Agreement of 1965. The solution regarding the price we will have to pay for our gasoline probably lies around these two problems. Should we increase our exports, prices will have a tendency to rise. However, as we depend on the Middle East for supplies in eastern Canada, we should also expect a price increase. A trans-Canadian pipeline which would carry oil from the west to the Maritimes could ensure the independence of Canada regarding oil but we will have to pay the price.
So the members of Parliament are faced with a monetary problem. Yet we have all the necessary resources for providing adequate supplies for the Canadian people. Paradoxically, we are crippled by a price problem. We have the natural resources, but the members of this House are reluctant to find the means to develop them.
What would be the role of the government in the construction of a pipeline? Of course, this subject can be debated for three months before a final agreement is reached.
How do we finance the construction of a pipeline? Would we use the Bank of Canada or foreign capital? This question would result in another lengthy debate. Yet the natural resources are abundant in Canada. If the Canadian people had a monetary system suited to their needs, they would not be concerned about the oil supply.
All those questions need to be answered before we decide on a real oil policy. I do not intend to dwell on this subject, but in ending I would like to go back to a particular aspect which strikes anyone who has considered Canada's position as regards oil supply, well development and transport organization.
I wish hon. members would become aware of their responsibilities regarding the supply of oil, a product that is essential for driving and heating purposes. Members of Parliament should therefore resolve once and for all to use the famous Bank of Canada to develop our natural resources for the benefit of Canadians.


Mr. Cyril Symes (Sault Ste. Marie):: October 25, 1973
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events instead of planning ahead and acting on the basis of that planning. We need careful planning and management with respect to our petroleum resources.
I listened with interest to the comments of the spokesman of the Conservative Party-


An hon. Member:: One of them.


Reginald Cyril Symes: Yes, one of the spokesmen. He criticized our proposals in the motion as being long-term proposals which would take some years to implement. I waited to hear some immediate counterproposals put forward by his party, but none were forthcoming.
I listened with interest also to the comments of the Minister of Energy, Mines and Resources (Mr. Macdonald). I feel, rather optimistically, that he may consider the contribution of my party as being worthwhile and accept our policy proposals concerning the national petroleum corporation, the extension of the pipeline to eastern Canada and the joint federal-provincial development of the oil sands. Spokesmen for the NDP will elaborate on these suggestions. I will deal with the extension of the pipeline.
We must examine the situation in Canada today if we are to see how past policies have brought us to the edge of the present crisis. Canada's energy demands have doubled during the past 12 years and are expected to increase at a faster rate in future. At present rates of consumption, our known reserves of oil will be depleted in 15 years. Some industry experts and reports now say that we will not be able to meet domestic demand seven years from now unless we develop the oil sands of Alberta and Saskatchewan. Thus, there is a problem concerning supply.
There are also difficulties concerning price. The market price is not controlled. As world oil prices have gone up, the multinational oil companies have used that upward price movement as an excuse to increase western Canadian oil prices. The price of Canadian crude has jumped by 40 per cent at the well head. This increase has been reflected in price increases of gasoline and heating fuels. Gasoline prices have risen by 10 per cent. Northern Ontario has been especially hard hit by these increases, as gasoline prices in my part of the country even before these increases, were higher than in the southern parts of the province. The price of heating oil and natural gas has also risen and the average householder can expect to pay about $70 more for heating this year than last year. We can only anticipate further price hikes.
As a result of the lack of a national energy policy, the consumer is suffering. Not only are the commodities mentioned affected; food prices also will be affected. They will go up because, as fuel costs to the farmer go up, food prices which reflect those costs will go up. The price of manufactured goods will increase, because industry must pay higher prices for fuel.
Inevitably, of course, the profits of the oil companies are going up. In 1972, the oil companies increased their profits by 20.4 per cent over 1971. For the first quarter of this year, those profits rose by 31.7 per cent over profits for the same quarter one year earlier.
We also face a predicament regarding supply, in the sense that Canada, a resource-rich country, must import 50 
per cent of the oil used to meet domestic requirements. Why, Mr. Speaker? The reason lies in the government's past policy of drawing a line through the Ottawa Valley. Under that policy, western Canadian oil could not be transshipped to eastern Canada, and eastern Canada had to rely on oil imports to meet its needs. As the minister said, this policy worked to our advantage in the past in that the imported oil was cheaper than domestic oil. However, the government's lack of foresight is catching up with us. Not only are we facing the prospect of increased prices; we are facing the problem of lack of security of supply for eastern Canada.
The whole of eastern Canada depends on the Arab states for about 25 per cent of its oil imports and on Venezuela for about 50 per cent of its imports. Now, as a result of the situation in the Middle East, Arab states are threatening to cut back their supplies of oil to Canada, their reason being based on reports that American oil companies are diverting oil tankers bound for Canada to U.S. ports. There is the prospect of fuel rationing in eastern Canada.
Canadian consumers are without protection in the face of rising prices of oil on world markets. The consumers of eastern Canada are without protection, as they depend on imported oil, it being impossible at present to ship to that area sufficient quantities of western Canadian oil. We cannot allow this situation to continue. If we reduce exports to the United States to earlier levels and, more importantly, extend the oil pipeline to Montreal, we shall be able to meet Canadian domestic requirements. Incidentally, that has been the long standing policy of the NDP.
This fall, the NDP exerted pressure on the government and on September 4 the Prime Minister (Mr. Trudeau) announced that the oil policy concerning the Ottawa Valley line would be lifted and that the government would consider extending the pipeline from western Canada, which now dips down through the United States and re-enters Canada at Sarnia, to Montreal. The government is now negotiating with Quebec.
We still have no definite commitment on the extension of this line. During the minister's remarks this afternoon, I waited for some kind of commitment. We still have not got it. The oil companies are now desperately trying to bring some western Canadian oil to the eastern markets by the St. Lawrence Seaway. The problem is that it will freeze over. In addition, there is only a limited number of tankers available to carry that fuel. Meanwhile, eastern Canada remains dependent on foreign supplies. It is faced with cutbacks, rationing and price increases.
Obviously, we need a pipeline through eastern Canada. What would be the effects of such a pipeline? First, it would guarantee security of supply for western Canadian oil, and future oil from the tar sands could be transported to eastern Canada. We want to see a pipeline that is reversible. In other words, if for some reason world crude became less expensive, or if there were an oil find off the coast of Nova Scotia, that oil could be shipped to western Canada. In effect, there would be competition. I know the word "competition" is loathesome to the oil companies, but the consumers would benefit from this reversible pipeline. Canadians could purchase whichever fuel was cheaper.
October 25, 1973

The third thing I would like to see in addition to the extension to the pipeline from Sarnia to Montreal would be a Canadian route through northern Ontario. That is the only way we can really have guaranteed security of supply. If we get into a nasty situation with the United States involving some kind of trade war with regard to oil, the United States could impose a throughput tax on oil which traversed pipelines through their territory. Canadians could end up paying more for western crude. If we had a Canadian route, we would avoid that predicament.
We would like to see all interprovincial pipelines brought under federal ownership. The minister said this would be expensive. Because of existing regulations, he could not see the advantage of such a move. Obviously, pipelines are going to be essential to a whole national energy policy, where they go and how they are looped. The question of pipelines involves the whole problem of transporting goods in the future. All existing pipelines should be under government control so that the government can plan with assurance for the supply of various regions of Canada in such a way that the national energy policy will work to the advantage of Canadians. Only with an extension of a pipeline, and future Canadian route, can we guarantee security of supply at a fair price through the concept of a reversible flow.
The hon. member for Nanaimo-Cowichan-The Islands (Mr. Douglas) outlined in some detail our porposal for a national petroleum company. I have examined some of the reasons we feel there is a need for an extension of the pipeline. Others will be developing the theme of the Athabasca tar sands.
Canadian oil resources should belong to Canadians and be used in the best interest of Canadians. Today, 91 per cent of our oil or gas wells are foreign-owned as well as 99 per cent of our petroleum refineries. As long as we allow the multinational oil industries to have a free hand in decision making and the control of marketing, they will exploit Canadian oil for their use and maximize their profits to the detriment of the Canadian consumer. It is time we as a nation regained control over what is rightly ours. We can only do this by implementing a national energy policy along the lines outlined by my party.


Hon. Alvin Hamilton (Qu'Appelle-Moose Mountain):: Mr. Speaker, my opening phrase must be that I am deeply disappointed with the developments of the past three or four months. I think the reasons will become apparent as I say what I have to say.
In the debate on a similar motion by the New Democratic Party on May 29, I stated that in view of the great danger to Canada in the present situation and also the great opportunity, all parties should approach this question of an energy policy in a non-partisan way. With the efforts made in the standing committee, and with the rational type of debate that took place on May 29, the Canadian people had a right to expect that this attitude would continue.
In spite of the great opportunity that exists in Canada in this situation and, at the same time, the danger, I am deeply disappointed when I see this posing of politicians, pretending they are the friend of the consumer when everything they are doing is going to cause higher prices
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for the consumer. They pretend they are the great champion of the Canadian people against the great corporations. In these statements and in this attitude, I do not see any sincere effort to take advantage of the present opportunity that this world situation gives this country. Therefore, I begin my remarks with this feeling of pessimism and disappointment.
I took the minister at his word last spring when he assured us in committee, and in this House, there would be discussions with the provinces, industry and members of all parties to try to arrive at a type of national energy policy with both immediate and long-term implications, one that would help all Canadians achieve what is our manifest duty to achieve. I took the minister at his word. However, suddenly last month we had a rash of decision making. These decisions turned out to be gaffs, awkward movements. I suddenly realized there was no intention to carry out what I thought was a pledge to consult with this House, industry and certainly the provinces that own the resources, before embarking on actions or measures that may cause great harm. These actions may not only cause great harm to the consumer who has to pay for these amateur actions but, as the Leader of the Opposition (Mr. Stanfield) stated, to this very important and precious federal system that we have.
My remarks today are made against a background of feeling. I do not think I am harming anyone in Canada when I recall that this opportunity to Canada in the energy context really became clear to us when, in 1952, in a report to the United States president of that day, the Paley Commission told the American people they were running short of strategic resources, oil, gas, minerals. This report recommended that private industry in the United States should go about the world seeking access to these resources, supplies of which were likely to be severely restricted in the 'seventies and 'eighties.
The United States legislature passed taxation laws which gave incentives to United States investors to go into Brazil, into Africa and into Canada. These investors had a double advantage over Canadians because Canadian tax law was imposed on the premise that there should be a penalty imposed against Canadians investing in their own country. United States tax law provided there should be incentives and inducements for Americans to invest in Canada. Our provinces played their sad role. They set up laws and regulations which, in effect, killed the golden goose by taking all the money they could get quickly. The companies which had established themselves were only able to keep going because of circumstances which made it possible to pay these charges levied by the provinces. There is no one else to blame for the fact that a great bulk of our oil, and other natural resource industries in Canada, is owned by outsiders-no one but the provincial governments and the federal government. We could not have done a better job if we had tried to do it systematically.
So when this Paley Report came out, men of my generation who had travelled this country in the old fashion by canoe and on foot, did our level best to get Canadians to realize that there was a great opportunity open to them, even though the provinces had sold us out because of their ignorance as to the way in which our resources should be

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handled. Our position was that nobody was going to take our territories, and the land beneath the seas adjacent to our coasts, away from us.
I do not think members of my own party will mind if I recall that in 1957, within days of my becoming a minister on August 22, an order in council was passed which did away with the old oil and gas regulations and advised that new ones would be introduced giving Canadians facilities to own and develop their own resources. The first action of the new parliament in 1957, was to set up the Borden energy commission. In 1958, the Roads to Resources program was introduced-and well I remember sitting on the other side of this chamber and listening to the scoffing on this side. Roads from nowhere to nowhere, they said. There followed the doubling of the hydrographic service to measure the depth of the seas around our coast, and the establishment of the Institute of Oceanography in Halifax to chart ocean currents. Nations attending the Law of the Sea Conference in Geneva in 1958 heard the Canadian proposal that the land at the bottom of the sea should belong to the country beside that sea. This proposal was unanimously accepted and, today, half the bottom of the Atlantic, the Arctic and the Pacific off our coasts belongs to this nation.
In 1959, we set up the National Energy Board to control the export of gas, oil and electric power, and to control the building of pipelines because we felt that the best opportunity for Canadians to exercise any control over these natural resources was in the pipeline field. In 1961, we set up a national oil policy in response to the unilateral action taken by the United States in implementing policies placing impractical quotas on Canadian oil entering their country. We knew, from long observation of the way in which the oil business was conducted in the world, that the United States government had no more power over the international oil companies than did any other government. We knew enough about the working of the system to be able to say: We expect a barrel of oil to go out of this country for every barrel of oil that comes in. The international oil companies met this demand, so there was stability. A word in passing: Even though the oil business of the world, since the 'twenties, has been run by the seven big international companies, it was in their private interests to ensure that the policy was one of plentiful supply at minimum prices.
If hon. members will examine the wholesale price of gasoline in Montreal or Toronto they will find it has not varied in 50 years more than 2 cents, one way or the other. Not only did the companies benefit as a result of this worldwide policy, but every consumer who drove a car or heated a home benefited. All this has changed. National aspirations have emerged, and become stronger. The Arab people, the Nigerians, the Venezuelans, who now realize they have been robbed blind with regard to the price of oil for 50 years are setting up controls, and in a few years those controls will become more stringent and will present more problems for the oil companies who have run the business for the last 50 years.
What I have said indicates that a long time ago some of us were thinking in terms of policies which would give Canadians a chance to benefit from the resources which exist in this country. Go back and examine the records

this spring. When the House met in January, who was it asked in this House about the security of the Montreal-Portland pipeline? Who was it asked about the possibility of emergency rationing and related planning should a war break out between the Arabs and Israelis? Who was it asked in this chamber about the extension of the pipeline to Montreal-reversible, because I know of the possibility of oil being developed off the east coast? It was not my friends in the New Democratic Party. That was not a favourite issue at that time; they did not get on to it until later.
I am not saying all this with any intention of trying to prove that I am smarter than anybody else. I am saying it simply with a feeling of sadness, because there was no corresponding activity on the part of the government. We were told there was an agreement with OECD on sharing oil reserves around the Atlantic area. We were told there would be consultation with the United States. Now, we are told there has been failure in both these directions. I asked in committee that the minister go to Venezuela because the Venezuelans had made it clear in 1968, in a public statement to the whole world, that they would not deal with private companies but only on the basis of government to government. I asked the minister to contact the Nigerians who have set up a national oil company and who are selling oil around the world.
On May 29 in this chamber I told the government that Nigeria was offering 100,000 barrels a day on a definite contract. There were no Canadian takers. Then, all of a sudden rush action is taken this fall. It was brought on by some exterior force which I can only surmise. This exterior force I expect was someone picking up a phone somewhere and saying "Give me all the proposals you have so that we can put on a big show in the House of Commons that we have a policy to meet inflation". In addition to things like indexing of fixed pensions, we had the proposal of a Montreal pipeline and a two-price system by using an export tax. All of these proposals were worked out in an afternoon. Certainly, they were not thought out and the provinces were not consulted. Any person who knows the first ABC's of the oil industry would know that an export tax is designed to destroy.
In the debate last May 28, I took no exception on behalf of my party to the concept of a two-price system. I have known for years and years that under the pricing system of the oil companies Canadians have always had a differential applied against them ranging from 25 cents a barrel to $1.25 a barrel. Why did the minister bring in an export tax of 40 cents? Because it happened to be the approximate differential on the day he announced his policy. During most of our oil buying history-and we are an importer of energy in this country-we have had a differential applied against us.


Mr. Deputy Speaker:: Order. I am sorry to interrupt the hon. member but the time allotted to him under arrangements made earlier for this debate has expired.


Some hon. Members:: Continue.


Mr. Deputy Speaker:: The hon. member may continue if he has unanimous consent.
October 25, 1973

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Donald Stovel Macdonald: Not for too long, though.


Some hon. Members:: Agreed.


Francis Alvin George Hamilton: I thank the House for its courtesy and I will not abuse it by continuing with all of the remarks I intended to make. I will wind up by saying that I still believe that, in spite of the awkwardness of the situation and the reasons given by the minister in the last month to six weeks, the situation is not fatal but can be restored. I know the minister does not really want to attack our federal system, but when you put an export tax on the products of one province, then to be fair it should be placed on the products of every province. The minister does not intend to put an export tax on the lumber of B.C., the potash of Saskatchewan or the steel of Ontario.
I am simply saying that this was a crash program, dangerous and not thought out, which will raise prices. The record will show that last week I asked him whether, when he met with oil industry representatives, he suggested to them the technique of the differential, and the minister said no. Let us not close the door on any of the proposals that any party makes. Let us look at them. On future occasions I hope to be able to speak in a more positive manner of the great opportunity that the energy situation in the world gives to this nation. All of the things that Canadians ever dreamed about are possible if we realize that the key to them is the use and control of our energy resources, along with the other things that we have.
I will not abuse the courtesy of the House further. I ask the members of this House, and I hope all Canadians, to rally round, to take counsel with each other, consult their provinces, business and other parties, and see whether we can come up with a policy that will take full advantage of this great opportunity.



PROCEEDINGS ON ADJOURNMENT MOTION


Mr. Deputy Speaker:: Before recognizing the next participant it is my duty, pursuant to Standing Order 40, to inform the House that the questions to be raised tonight at the time of adjournment are as follows: the hon. member for Humber-St. George's-St. Barbe (Mr. Marshall), Veterans Affairs-Request that pay award to nurses be reviewed; the hon. member for Scarborough West (Mr. Harney), External Affairs-Chile-Possible extension of credit to military government-Alleged denial to Allende government; the hon. member for Edmonton-Strathcona (Mr. Roche), Urban Affairs-Position of minister at trilevel conference on possibility of municipalities receiving share of federal revenues.
The hon. member for Nipissing.


BUSINESS OF SUPPLY
[Stage Direction]
The House resumed consideration of the motion of Mr. Douglas:
This House expresses the opinion that the government should give consideration to the taking of immediate steps to ensure that available petroleum supplies are used to ensure a continuity of supply at fair and just prices to all Canadian consumers and as a preliminary step to this end should implement the following measures:
1.	The setting up of a publicly-owned National Petroleum Corporation to enter into bi-lateral arrangements with oil-producing states and to supervise the marketing of oil in Canada.
2.	The extension of the oil pipeline to eastern Canada and the bringing of the Inter-Provincial pipeline under Federal Government ownership.
3.	The ensuring of future oil supplies by entering into negotiations with the provinces concerned for the development of the oil sands by a joint federal-provincial Crown corporation.
Mr.   J.-J. Blais@Nipissing: Mr. Speaker, I hasten at this point to take issue with some of the comments made by the hon. member for Qu'Appelle-Moose Mountain (Mr. Hamilton). I have the greatest respect for the hon. member and his opinions, but on two or three occasions when the hon. member has risen to speak in this House on matters that he deems of national importance he has chastized members who have spoken before him and regretted that partisan views were being taken by members of the various parties in this House. He indicates that the issue is one of national importance which should not be considered on partisan grounds. He then proceeds to use some very partisan arguments in attempting to put his own views across.


Mr. Paproski:: The truth hurts, doesn't it?


Jean-Jacques Blais: A review of the content of his speeches will show that it is political, of the most partisan nature. If I can review the speech given by the hon. member at this time, he chastizes the government for not presenting a policy.


Mr. Stevens:: And rightly so.


Jean-Jacques Blais: Then, he indicates that he has no solutions to the problems but hopes solutions can be arrived at with proper consultations between the federal government and the provinces. However, he fails to indicate that in June of this year a report was presented to the House by this government called "An Energy Policy for Canada, Phase I", which report invited contributions from the provinces and opposition parties on the basis of the information transmitted in that particular document.
What has the hon. member for Qu'Appelle-Moose Mountain done since June? What have the opposition parties done since June?


Walter David Baker: What has the government done since June?

October 25, 1973
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Jean-Jacques Blais: It has done exactly what it said it would do. The government has been forced into a position, as a result of the absence of constructive contributions from opposition parties, or from the party bearing the same political label as the official opposition in the province of Alberta, and from other provinces.


Walter David Baker: Pure sophistry.


Jean-Jacques Blais: I take strong exception to posturing. The hon. member accuses other members of posturing, yet his own speech was an untenable posture. He indicated that the government had advised the House that there were fixed agreements between OECD and the United States. There never was any such statement. There was an indication that there was an attempt made to enter into arrangements with the United States regarding security of supply for the eastern provinces, but there was no indication that there were any fixed agreements.
Surely, the hon. member recognizes that, given the fluid situation faced today by the oil producing and oil consuming countries in the world resulting from the international situation, it was impossible to arrive at any fixed agreements. With the OECD facing the same problem of security of supply and hastening exploration in the North Sea, how could we have any fixed agreements with OECD for security of supply in Canada? In view of international instability, how could we have encouraged those countries to enter into any fixed agreements with Canada?
Then, the hon. member contradicts himself by stating that he does not agree with the policies being argued and presented in this House. On the other hand, he states he agrees with the Arab oil producing countries and their recognition that they have been robbed for all these years. I suggest to you what we are trying to do now is prevent Canadian non-renewable resources from being stolen from under our noses. That is the whole thrust of this particular debate, and that is the direction in which I should like to move.
Indeed, this is a serious and important question, and in that I agree with the hon. member. I may indicate to you that I am not in complete agreement with hon. members of my own party in this regard. I would indicate that the policy I should like to espouse is one which is not posturing, but one which contemplates a long-term benefit for Canada and, contrary to what some of the older members on the benches opposite think, I plan to be around for a long time. I intend that my children be here after me for a considerable time, too.
When we are dealing with non-renewable resources, these policies being debated now will have long-term effects on the availability of these resources. The motion presented by the NDP speaks of primary steps. I suggest to you that we are not dealing with the steps enumerated in the motion as being primary steps but as fundamental and ones which essentially concern principles that are being presented. I do not agree with the formulation of the ideas presented. I agree fundamentally, however, with the principles I intend to describe, and which I think fit in with the ideas that have been advanced.

In the first paragraph of the motion, the NDP indicates it would like to set up a publicly-owned national petroleum corporation. I agree with that principle. However, I suggest that I am not speaking of a national petroleum company which would displace all the present exploiters of petroleum in Canada in the fields of extraction, refining or retailing. What I am speaking of is that sort of a national petroleum corporation described in a document which evidently the members of the opposition have not read entitled "An Energy Policy for Canada". Perhaps I may refer to that document, and I note that none of the previous speakers for the NDP have done so. At page 186, where arguments in favour of a national petroleum corporation are set out, there are 10 factors listed which are deemed advantageous in the establishment of such a corporation.


An hon. Member:: Are they for or against?


Jean-Jacques Blais: I suggest to the hon. member that those arguments against are not as sound as these 10 arguments in favour. There are three I would like to emphasize specifically.


Steve Eugene Paproski: You are going to be the next leader of the NDP, you are doing such a good job.


Jean-Jacques Blais: I can tell that the riding of the hon. member for Edmonton Centre (Mr. Paproski) is indeed a weighty one.


Steve Eugene Paproski: It sure is.


Jean-Jacques Blais: National energy policy, which evidently the hon. member for Edmonton Centre has not contemplated, would indicate substantial advantages in the establishment of a national petroleum company. First of all, and I think this is the most important, we find in paragraph 2 the following:
There is a need to increase the level of knowledge of all phases of the operations of the petroleum industry.
I am sure there is no one who will deny that fact, Mr. Speaker. The paragraph then continues as follows:
While Canadian-controlled companies in the private sector are active in some spheres of petroleum industry operations, only a few foreign-controlled fully integrated companies have the broad knowledge and experience associated with the total spectrum of the petroleum industry.
We need more information. I am concerned about security of supply, and I am concerned that in the event that foreign interests and foreign technology are removed from Canada for any cause, Canadians would have at least a six-month time lapse before they could operate these particular refineries and extracting plants on a reasonable and profitable basis.
The second point is cited in paragraph 3 which states that a national petroleum company:
. .. could play some role in determining the criteria on which the government might base its policies regarding economic rent collection.
That is what we have been talking about, economic rent. After the payments and all expenditures for extraction, refining and retailing the petroleum products, how much is left over for distribution for the Canadian public good?
October 25, 1973

That is the important question, and how do we determine this question of economic rent?
The minister has imposed a 40-cent surcharge on exports. This is a flexible amount and may be increased depending on the circumstances. This represents an economic rent, an amount which ought not to fall into the pockets of the exporters because that would not be justified. This is an amount owing to the Canadian people, those people to whom the resource belongs, and some would say Alberta.


Steve Eugene Paproski: That's right.


Jean-Jacques Blais: Others would say it was the Canadian federation that brought about the exploitation and development of this resource in Alberta and, therefore, there has to be some sort of a division of return.
The question of economic rent is something which has to be determined, and can only be determined once the information is available to the Canadian people and the Canadian government. This could be achieved through a national petroleum company. I would suggest to those hon. members who have paid some attention to my remarks that they now turn their attention to a national energy policy for Canada.
Before my time expires, I want to launch into an item dealt with by the hon. member for Sault Ste. Marie (Mr. Symes), however lightly. I suggest it was brought to his attention during the question period this afternoon by my question to the Minister of Energy, Mines and Resources (Mr. Macdonald). I refer to the question of a pipeline from Sault Ste. Marie to Montreal. I espouse the view that, indeed there has to be security of supply. The first criterion is that Canadians should control the transportation of this essential resource. As it is now, the oil is piped from Gretna, Manitoba, through the United States, a friendly territory I will agree, up to Sarnia. A total of 974 miles of this line is or could be directly under United States control at any time.
I suppose in opposition to my suggestion that the line should be built from Sault Ste. Marie it might be argued that we would still have that line going from Gretna to Sault Ste. Marie. I agree, but we would then be that much closer to the Manitoba border, and we need that pipeline not tomorrow but right now. There should be steps taken at this time to build that line from Sault Ste. Marie. Having built that line there should be some plan so the line could then be extended from Sault Ste. Marie to Gretna via the north shore of Lake Superior. That is the point I want to put forward.
The essential question involves security of supply. I must admit that I am parochial in my interest as this would develop that area of Ontario in greatest need of development, namely the area north of Lake Nipissing. It was initially developed by that other Canadian transportation system, the CPR, and I need not remind those historians among the members of this House of the effect this particular development had on the development of Canada as a whole. I suggest to the hon. member for Sault Ste. Marie that perhaps his constituents would still be travelling in canoes in that fair city were it not for the CPR. I am sure he would agree with me.
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The third point that was brought to my attention in the motion relates to the development of the Athabasca tar sands. That particular subject will be discussed by a member of our party this evening, and I shall not belabour the point save to indicate that I agree there ought to be government control over that resource. I am not as idealistic or as dreamy as are members to the extreme left, members of the NDP. I do not believe, in the present situation, that you can have a joint federal-provincial Crown corporation. There are obvious reasons for this. One has merely to read the recent editions of newspapers to understand the difficulties that arise when one starts to try to develop national resources within one province by giving the responsibility for such development to the federal Crown. However, I suggest there are reasons that the control and development of that particular resource should be in the hands of the province of Alberta, because basically we are speaking of the province of Alberta.


Mr. Deputy Speaker:: I regret to interrupt the hon. member, but the time allotted to him by the special order made earlier today has run out. Is it agreed that the hon. member may continue his remarks?


Some hon. Members:: Agreed.


Jean-Jacques Blais: Thank you, Mr. Speaker. I also thank the hon. member for Edmonton Centre (Mr. Paproski) whose voice boomed over all. The point I should like to make in respect of the Athabasca tar sands, first of all, concerns the size of this resource. We are dealing with an area of 11,000 square miles and an amount of 625 billion barrels in reserve. The immensity of the investment needed for the development of this resource requires that there be some sort of collection agency. That collection agency could be either the multinational corporations, which could use their collateral to raise and deliver the capital, or it could be the provincial government which could use its facilities in order to develop this resource.
The second point is that we are dealing with a labour intensive investment for the plant structure in respect of the oil sands. We are dealing with a matter of one million barrels per diem, and we are dealing with the cost of a plant projected to 1980. We are talking about an amount of $8 billion. Surely, this is an immense amount of capital. If we tolerate the control of that capital in the hands of foreign-owned companies we would be in a serious situation. The technology necessary for the exploitation of the tar sands is in its infancy. It is in the beginning of its development and it is essential as the technology develops that it be under Canadian control and Canadian jurisdiction. The technology is as essential in respect of the exploitation of those reserves as is the capital.
My last point is that there is no problem about selling the reserves. There is an adequate demand. There is no question about having to spend money in research and exploration. The availability is there. Therefore, all that is necessary is the raising of the required capital. Then, it would simply be a matter of developing the technology and establishing the plant structure necessary to develop those reserves. Mr. Speaker, I thank you for the opportuni-

October 25, 1973
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ty to speak during this most important debate and I thank hon. members for their attention.


Sinclair McKnight Stevens: Mr. Speaker, in rising to speak on this motion immediately after the hon. member for Nipissing (Mr. Blais), I should like to point out that he, like myself, represents a riding in the province of Ontario. I find it interesting that a member supporting the government would be so defensive of the government in connection with the debate today because we must bear in mind that in Ontario we presently rely on sources beyond our borders for some 80 per cent of the energy we use. There is little reason to anticipate that with the growing energy demand we will succeed in significantly altering that dependency. That is why I think it is particularly important that the members of this House from the province of Ontario take an active and almost desperate attitude concerning the lack of a national oil policy in this country.
I refer to the province of Ontario because it is my native province. I would point out, however, that there are many provinces in this country in a like position. I would also point out that although this government has been in power for ten years, and that the present Minister of Energy, Mines and Resources (Mr. Macdonald) has been in office almost two years, we find that the national government is still grappling with ten significant crisis decisions.
I refer, first, to the question of a two-price oil and gas proposal with relation to taxation. I refer, second, to the suggestion mentioned in this motion of the establishment of a national petroleum corporation. I refer next to the negotiations, which the minister referred to earlier today, in an effort to secure a supply on a long-range basis from the government of Venezuela. I would emphasize, as the minister pointed out, that this was a last ditch attempt to negotiate that contract after, as he points out, the government had tried to make an agreement with the United States which failed after discussions with the OECD countries broke down.
Fourth, I would point out we have a crisis situation and that measures should be taken to prevent a fuel shortage this winter in this part of Canada, and certainly in the eastern provinces, and perhaps in the long run to prevent an undue escalation of price to the consumers of fuel. Fifth, what really will be the long-range government policy be in respect of oil and gas exploration in the north in this country? Sixth, how and when will Canadian fuel be made available to Quebec and the Maritimes? On that particular point it was only last February, when the minister appeared before the energy committee of this House, that he said the government certainly at that time had no intention of changing the Ottawa Valley concept or to build a pipeline through to Montreal.
We might ask what happened so suddenly to change the minister's attitude, because today we find, as we have for the last few days, that the minister has suggested indeed they may build an extra pipeline from Sarnia to Montreal to help relieve the imminent crisis in that city. On that subject, however, I would point out the inconsistency between what the Minister of Energy, Mines and Resources told us today and the testimony of the National Energy Board before our committee. The National Energy Board indicated that in fact there was no extra capacity

available in our pipeline system to Chicago unless exports to the United States were cut back; whereas the minister, if I understood him correctly today, estimated a 250,000-barrel per day capacity in that line if it could be linked through to Montreal. I want to emphasize that the question of security of supply for eastern Canada is not a new problem. It is one that has been before the government for many years. It is the government's indecision that is making it a crisis today.
Seventh, when is the government going to give clarification as to who actually owns the resources in the areas adjacent to our maritime provinces and Newfoundland? Eighth, when will we have a clear position from the government with respect to development of our Mackenzie Valley pipeline system for oil and/or gas? Ninth, when will we have a plan for the conservation of energy or the development of alternate energy sources? Tenth, when will the haphazard and late reaction to the problem of oil spillage, both in British Columbia and on the Maritimes coast, be dealt with in a proper way by the government?
Those are ten problems that the government should have solved before this debate became necessary today. Having summarized those ten points, I must indicate that I am indeed disappointed by the tone of the NDP motion which is before us. When I heard initially that they intended to have an energy debate, I assumed the NDP would not use it simply as a starting-off point to mention various socialistic principles that they like to talk about and to belabour their much belaboured point about multinational corporations.
Read their motion, Mr. Speaker, bearing in mind that the crisis we have is not a crisis in the distant future: it is a crisis that may hit us in November, December, January, February or March. Their suggestion is that we set up a publicly-owned, national petroleum corporation which would, as has been indicated by my colleague from Regina, take about two years to set up. They suggest that there be an extension of the oil pipeline to eastern Canada, which it is generally accepted would be a 1976 project. Then they go on to more distant oil suggestions.
In short, the NDP motion is only a gesture, as the minister, perhaps inadvertently, indicated during his speech when he thanked the mover of the motion for giving him a platform to be able in some way to try to defend his very indecisive national position with respect to fuel. Let us be specific. If the NDP contingent in this House seriously wanted to challenge the government on this subject, it had every right to request a confidence vote. Let members of this House stand up and be counted as to whether they feel the government any longer deserves the confidence of the House.
On the question of energy alone, I would say that the government has demonstrated that it no longer has the right nor the will to govern. In short, this is a government that had the presumption to hold itself out to the people of Canada as a unifying force within the nation. I suggest that instead of being a unifying force, the government has introduced an atmosphere of distrust and uncertainty across Canada, an atmosphere of uncertainty and distrust between the federal level, with regard to the oil and gas
October 25, 1973

industry, and several provincial governments, including Ontario, Alberta, Quebec and British Columbia.
It is a strange thing that those provinces have brought in their own provincial fuel policies. It is a strange thing that those provinces, meeting in Charlottetown, unanimously endorsed the holding of a federal-provincial energy conference in order to have provincial participation in working out a national energy policy. But in spite of all that, the government to date has not moved to take a constructive step to solve the problems that are before the nation.
It is true, as has been pointed out, that we are a self-sufficient country with respect to oil and fuel-indeed, one of the few in the world. But we must not forget that we have only about 1.4 per cent of the total world-proven resources of oil. In short, Mr. Speaker, we must be sensible in our national oil activities. I suggest this means that the government must do something in addition to bringing in what the hon. member for Nipissing referred to as an energy policy for Canada, phase one. I sat through the presentation of that phase one. I know the government thought it had 18 months in which to have it talked about, to throw the ball around to everybody, hoping that somebody would come up with a satisfactory answer. The ugly fact is that time has caught up with the government and its ineptitude is now being demonstrated hourly to the voters of the nation.
In this connection I refer simply to this week's Hansard where some very interesting illustrations of indecision by front bench members of the government can be found. I refer to the issue for October 22. This is only the first of eight clear examples of total indecision and uncertainty by the government. I refer to a question asked on that date of the Minister of Energy, Mines and Resources by the leader of the NDP (Mr. Lewis), who said:
Last Friday after he . . .
Meaning the minister.
. .. had met with representatives of the oil industry he announced, according to press reports, that the government would probably agree to an increase in the prices of gasoline and home heating oil in Quebec and the Atlantic provinces and that it might have to consider similar increases for the part of Canada west of the Ottawa valley now served by oil from Canadian sources. May I ask the minister whether he has made such a decision and, if so, what the increase will be?
The short answer by the minister was:
No, sir. No such decision has been made yet.
He went on to point out that the increase in the price of crude oil, so far as the Arab states are concerned, is 70 per cent. Later, my colleague from Vancouver South (Mr. Fraser) pressed the Secretary of State for External Affairs (Mr. Sharp) on the present position of the government concerning the proposal to give the Americans an alternative oil supply to Cherry Point so that the tanker route might be discontinued. The Secretary of State for External Affairs replied:
. . . we have been reviewing our oil policies. We have not made a decision yet on this question.
Later, my colleague from Malpeque (Mr. MacLean) asked the Minister of Regional Economic Expansion (Mr. Jamieson) what the government was doing to assist in the conversion of thermal-powered generating stations in the
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Maritimes to the use of coal. The minister's bright reply was:
We have been discussing .. . the whole question of energy-
On the same date, the hon. member for Saint John-Lan-caster (Mr. Bell) put this question:
... can we expect that the government will be accelerating its program of nuclear plants and, in particular, will the first decision, the one in which New Brunswick is interested ...
The Minister of Energy, Mines and Resources replied:
... I hope that the question of a heavy water plant can be decided by the government before the end of this month.
Mr. Speaker, I would emphasize that this government has been in power for ten years, but still has not made up its mind. On the following day, October 23, my colleague the hon. member for Calgary North (Mr. Woolliams) asked what the government's tax position was with reference to the Syncrude proposal in the province of Alberta. He directed the question to either the Minister of Finance (Mr. Turner) or the Minister of National Revenue (Mr. Stanbury). This was the answer:
My colleague, the Minister of National Revenue says that he replies "no" to that question.
The government still did not know what their answer should be to Syncrude's request with respect to taxation. On the following day, the hon. member for Yorkton-Mel-ville (Mr. Nystrom) asked the Minister of Energy, Mines and Resources-


Mr. Speaker:: Order, please. I must interrupt the hon. member and inform him that his time has expired. He may continue, of course, with the unanimous consent of the House.


Some hon. Members:: Agreed.


Mr. Speaker:: I remind the House that the hon. member for Yorkton-Melville (Mr. Nystrom) will be called next. If he wishes to finish by six o'clock he should be given an opportunity to begin in about one minute.


Sinclair McKnight Stevens: Thank you, Mr. Speaker. I was saying that on that day the hon. member for Yorkton-Melville put the question to the Minister of Energy, Mines and Resources which I quote in part as follows:
... he is considering introducing legislation to establish a publicly-owned petroleum corporation ...
The minister replied:
That is a question under consideration .. .
Mr. Speaker, I have two similar references and I am simply trying to demonstrate that this government is literally lurching from crisis to crisis. The government is in a total state of disarray and disorganization concerning a proper oil policy for Canada. I am particularly disappointed because I feel that we in Ontario have more to lose through the government's ineptitude than possibly any other part of this nation.


Lorne Edmund Nystrom: Mr. Speaker, I think the concluding words of the hon. member for York-Simcoe (Mr. Stevens) about the great mishandling of this crisis by the government is a good place for me to start, particularly in view of the comments made by the Secre-
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tary of State for External Affairs (Mr. Sharp) this afternoon about the meetings he had with representatives of the Arab states earlier today.
I asked the minister in the House if he could inform us whether he had arranged with the Arab states for security of supply for the eastern market and whether he could guarantee that any oil that came from the Arab states would not be diverted to American ports or refineries. The minister could not give us this assurance. But a few minutes later the Leader of the Opposition (Mr. Stanfield) referred to a report from ARAM CO which suggested that Saudi Arabia was cutting off supplies to Canada. The Minister of Energy, Mines and Resources said that he was trying to confirm that rumour.
What did the Secretary of State for External Affairs discuss with the Arab ambassadors when he met them this morning? Did he not discuss security of supply? Did he not discuss whether Saudi Arabia would be guaranteeing the supply of oil to the Canadian market?


Mitchell William Sharp: Mr. Speaker, is the hon. gentleman asking me to answer the question, or is he just talking?


Mr. Speaker:: Order, please. The hon. member for York-ton-Melville has the floor, and unless he advises the Chair that his speech is completed, the Chair cannot recognize the Secretary of State for External Affairs.


Lorne Edmund Nystrom: Mr. Speaker, I should like the minister to participate in this debate. We will be back at eight o'clock tonight, and I am sure the minister will be participating then because this is an important question of national concern. If we have a crisis, we must move western oil to the eastern market-and that means higher prices. The Secretary of State for External Affairs and the Minister of Energy, Mines and Resources could not even guarantee that the 5 per cent cut-back announced by the Arabs with regard to some countries would not affect Canada. The government do not seem to know what is happening. Despite the fact that they met with the Arab ambassadors this morning, we still do not have any guarantee. The minister did not tell us what happened about the security of supply from Saudi Arabia, and now there is a rumour that Saudi Arabia might be cutting us off.
I think the Minister of Energy, Mines and Resources should go to Saudi Arabia or Kuwait either tonight or tomorrow morning and seek assurances that there will be security of supply for eastern Canadian refineries. He should not just rely on hearsay, or react to a situation when he is notified by certain companies or some members of this House about activities in the oil business. While the Secretary of State for External Affairs is in the House I want to say a word about the type of representation that we have in the Arab states. I did some research this morning and found there are in this country only three or four ambassadors from the Arab states. We do not have representation in many of the Arab states either, so perhaps we are not getting the type of information we should. Perhaps there is some mistrust here.


Mitchell William Sharp: I do not think that is so, and I do not think it should be on the record.


Lorne Edmund Nystrom: The question is very, very serious. Because of the situation in the Middle East, this government must act, and act now, to guarantee security of supply. I have said in the House before, Mr. Speaker, that the information I have from various oil companies leads me to believe that some tankers have been diverted. I have information from the Texaco oil company in New York. According to my information, a confidential memorandum was sent from Texaco, New York, to Texaco, Toronto, which discussed the possibility of making greater use of their supplies in Canada because there might be some change in supplies to them from abroad. Exxon has also sent a similar memorandum to their Toronto office, according to my source, telling their company there that they should make greater use of the reserves we have here because there might be some interference from abroad.
I am told that at least six tankers have been diverted since the last week of September which were carrying 3'A million barrels of oil to American refineries from the Middle East and Venezuela. Imperial Oil company, according to my source of information, has purchased some oil from Venezuela on Canadian bookings and diverted it to the United States. The minister should be investigating this matter. I appreciated it this afternoon when the minister said that if this type of practice is being carried on by the multinational corporations, it should be stopped because it will jeopardize security of supply for Canadian customers.
I wish the minister would investigate the situation, Mr. Speaker. All he has done is send telegrams to Canadian subsidiaries of the multinational corporations. He has contacted the refineries, and so on, and naturally they are all saying they are not guilty. It is like asking Spiro Agnew if he is guilty of income tax evasion. What kind of answer are you going to get? These are American subsidiaries, not Canadian companies. They are owned and controlled by their parent companies and are not responsible for the arrangements for getting crude oil to their markets. In the case of Imperial Oil, it is done by Exxon, the parent company; and it is the parent company-the minister knows this-which makes the decision to divert oil from a Canadian destination to a destination in the United States.


Donald Stovel Macdonald: That is not true.


Lorne Edmund Nystrom: The minister should not just ask the Canadian subsidiaries but parent companies which are based in the United States. Why does he not check with the harbours people to ascertain whether ships destined for Canada have failed to show up in this country? Why does he not check with the Arab states to ascertain whether cargoes which might have been sent to Canada have gone astray and have been shipped elsewhere? I am asking these questions because they are of concern to my party. The minister's attitude makes no sense to me.
There are indications that there is now a shortage of fuel in eastern Canada. The hon. member for Nanaimo-Cowichan-The Islands (Mr. Douglas) said this afternoon that there is a shortfall in supplies of oil of 100,000 barrels per day. The reason for that shortage could lie in the fact that multinational corporations have been diverting crude
October 25, 1973

oil from Canadian ports to refineries in the United States. That development does not surprise me at all. The multinational corporations involved are more or less sovereign states in their own right and are merely shifting their product from one destination to another.
You can compare this situation to that of a farmer who is combining grain on the Prairies and hauling his grain by truck to a bin, then suddenly halfway across the field he changes his mind and instead of delivering to one grain bin he diverts it to another. The companies are merely shifting their product from one destination to another. The oil companies control the oilfields; they use or lease their own tankers; they deliver oil to their own refineries and sell the finished product through their own retail outlets. Their operations are vertically integrated. That being so, one would expect them to shift their product to where demand is greatest and prices are highest.
Yesterday I spoke to one of the leading petroleum people in British Columbia. He said he did not know whether companies were diverting shipments but said his experience with the industry would lead him to believe that if he were in charge, oil shipments would probably be diverted because, after all, an oil company aims to maximize its profits. He said this is probably happening because it would be the natural course for a multinational oil corporation to follow. I ask the minister to investigate thoroughly the reports that a number of us have brought forward concerning tankers being diverted from Canadian to United States destinations.
Until we can prove this is not happening, the Arab states may be nervous about supplying us. They have cut off deliveries to the United States as a result of conditions in the Middle East. If they think that oil carried by tankers owned or leased by American-based multinationals may end up being diverted to the United States instead of being unloaded in Canada, they may want to cut back our supplies as well as those of the United States. If that happens, what will the minister do this coming winter?
Let us look at the security of our supplies from Venezuela. The Venezuelan oilfields are under the control, basically, of the same multinational corporations which control Middle East supplies. If there is a real pinch in the United States, it is possible and probable that large companies such as Exxon may consider seriously diverting more of their product to United States refineries instead of transporting it to Canada.
That is the background against which we are debating this question. The problem we face concerns security of supply of oil, and if ultimately there are difficulties in this regard, the Canadian consumer will pay. My party is making a couple of positive and direct suggestions in this regard. We think we ought to establish a national petroleum company which ought to be publicly-owned and would deal directly with oil-producing areas such as Venezuela and the Middle East states. In that way we would not need to deal with any intermediary such as the multinational corporation which has its head offices in the United States. I think Venezuela is interested in dealing directly with oil importing countries. It would be to our advantage if such an arrangement could be made. By that means we could control the importation of crude oil and, similarly, the amount of oil being exported from Canada.
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The hon. member for Nanaimo-Cowichan-The Islands pointed out that there is enough oil in Canada to supply the needs of Canadian consumers. Although we currently export about 1.2 million barrels per day, we import about
800.000	barrels, a large proportion of that oil being Venezuelan. Clearly, we have a balance in our favour of some
400.000	barrels per day. We are currently more than selfsufficient. The difficulty at present stems from the fact that our eastern provinces rely on oil imports, basically from the Middle East and Venezuela. What will happen if that oil supply cannot be secured? What will happen this winter if we must begin transporting huge quantities of western oil to the eastern market? We do not have a pipeline, and we cannot build one immediately. For that reason I suggest we should begin building such a pipeline immediately in order to supply the eastern market in the future. What will happen in the meantime if the security of our oil supply from the Arab states cannot be guaranteed? That, really, is the picture which is unfolding.
In the one or two minutes remaining, may I say that so long as we leave the matter of oil supplies and prices in the hands of the private multinational corporations, the consumers of this country will not profit; we shall face problems associated with high prices and supply. Let me put on record statistics showing the tremendous profits and power of companies such as Imperial Oil. For example, statistics show that the gross income of Standard Oil of New Jersey roughly equals that of the government of Canada. That gives one some idea of the tremendous power and wealth of the company. That is only one of such companies. As well, Imperial Oil made profits in Canada between 1963 and 1972, after taxes, of some $1,010 million. If you add to that figure deferred taxes, which are really an interest-free loan, you will find that the company's profits between 1963 and 1972 were $1,134 million.
In conclusion, I say it is about time the Canadian government, on behalf of the people, took control of the gas and oil industries in this country and regulated the importation of oil, the future developments which must take place in co-operation with the provinces, as well as pricing and export policies. Only the federal government can act in these fields. It is up to it to act. I think the minister should begin doing this right away.


Mr. Speaker:: Order, please. It being six o'clock, I do now leave the chair.
At six o'clock the House took recess.


[Stage Direction]
AFTER RECESS

The House resumed at 8 p.m.
Mr. Paul S. McRae (Fort William):: Mr. Speaker, I find it very easy to support the intent of this motion and a good deal of the detail contained therein.


Some hon. Members:: Hear, hear!


Paul Edmund McRae: In only one or two minor ways would I like to see the motion amended. My real concern, however, is that in some respects it does not go far enough, particular-
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ly in the matter of an oil pipeline. Later in my remarks I will be more specific about this proposal. Canada is in many ways the most fortunate country on the face of the earth, yet it is perhaps one of the most fragile. We are a country of diversity, of peoples with different points of view and of geography with extreme variances. We are so diverse that we seem to be always going in different directions.
There is one common element which, when called upon, will always, I believe, pull us together and in a crisis will always see us through. That common element-is our love for Canada-Canada, that magnificent, fragile flower, that land that makes us perhaps the most fortunate people on the face of the earth. When Canadians are threatened, when our security is questioned, we are as one. I believe that in the growing energy problem and in the degree of our indebtedness to foreign powers, compounded by the sudden threat of the Arab nations to withhold oil supplies to the area of the country east of the Ottawa valley, we are threatened, our security is questioned, and we will react as one.
I said earlier, Mr. Speaker, that we are in many ways the most fortunate power on the face of the earth. What other country, for example, has reached our degree of industrialization and has adequate proven and potential energy reserves? I contend that no other country on the face of this earth is in such a fortunate position. Yet it would be very easy for us to squander these resources. It would be very easy, for short-term gains, to give or sell these resources to a foreign power or powers and then find ourselves in short supply in the not too distant future.
I believe that as Canadians who are concerned, not just for our own generation but for our children and our children's children, we must take positive action to ensure two things. First, we must insist on the security of supply of our energy resources. Second, we must see to it that these resources are developed by Canadians for Canadians. Anything less would be to sell ourselves short and to deny future generations of Canadians the opportunities for full participation in the magnificence and largesse of Canada.
I will dwell shortly on the notion of security of supply and, specifically, the supply situation itself. However, I would first like to make a few remarks about our energy policy. For reference purposes I will refer to phase I of "An Energy Policy for Canada", volumes I and II-a very comprehensive document. This document has been criticized, and the government with it, for not adopting an immediate energy policy. If the critics would look carefully at this document they would see it embraces most, and perhaps all, of the elements of a complete policy and is most useful when we are faced with sudden changes in the energy scene such as those caused by the Arab-Israeli war.
The real merit of the document, I feel, is that it gives us a basis for debate and consideration of all the elements involved in an energy policy in a rapidly changing world. We are encouraged to look at the whole notion of growth and whether there are limits to growth. I happen to be one who is very concerned about these limits to growth. I think that increasingly we shall have to consider this

question. The document deals with Canadian resources, present and potential, and with the whole question of Canadian ownership. It talks about foreign investment and the amount of foreign investment.
I think we have strange notions about the amount of foreign investment which any country should accept. If $40 billion, $50 billion or $60 billion are to come into Canada over the next 10 or 15 years, we could be in very serious trouble, both because of the effect on the Canadian dollar and because we might not be able to sell other goods should the country to whom we would normally be selling these goods expend most of its foreign exchange in buying energy. This would present a new problem, one which we have not yet considered.
This document deals, also, with the argument about public versus private ownership in the resource sector, and with the debate about industrial strategy, including research development by Canadians. These issues are well documented. Finally, we are encouraged to consider the effects of our energy policy on the environment, both physical and human. In this debate, we must consider, for instance, whether the environmental and social diseconomies involved would make James Bay or South Indian Lake viable projects. I believe that they are not, that they will most certainly lead to disaster, environmental and social. We are encouraged to look at the same effects in connection with nuclear power plants and various pipeline projects. Only when all these and other considerations have been reviewed and debated can we begin to adopt a really comprehensive series of policies. The debate today will bring us, I hope, closer to that set of comprehensive policies.
Now to the supply side of our problem. Since the motion deals with petroleum, I shall confine my remarks to this area. However, I would remind all hon. members that ultimately the debate concerning supply must take into consideration the various alternate energy forms and their intermodal aspects. Our most immediate concern must be for the major current supply-Alberta crude and the future of this commodity in our economy. We are told-I refer here to page 87 of volume 1 of the document to which I have referred-that the proven reserves of conventional crude amount to 9.7 billion barrels, of which over 99 per cent are to be found in western Canada, exclusive of the Territories. Of the potential reserves we might expect to recover, only 5 billion barrels out of a possible 83 billion will come from western Canada. When I use the term "western Canada", I principally mean Alberta but I am also including Saskatchewan and British Columbia. Thus, the western Canada supply, both proven and potential, consists of less than 15 billion barrels-less now, since these figures were arrived at in December of 1972.
I had the opportunity last winter to comment on the remarkable equanimity displayed by the three to five opposition members from the province of Albera on the National Resources and Public Works Committee on the subject of this potential supply. We are told that at current rates of production Alberta crude will last not more than 15 years or, in accordance with the present exponential growth rate, perhaps less than ten years. How, last winter, could these members have been so sanguine about the bleak future?
October 25, 1973

I visited Alberta on three occasions last summer and early this fall. I detected in the earlier visits a sense of well-being in relation to this matter. However, during my visit last weekend I was startled to hear expressions of concern such as I had not heard before. The people of Alberta are beginning to realize that they have been deceived, that their economic security depends upon, virtually, a single industry-in an industrial sense-in addition to agriculture and ranching, and that this security is in danger. The government of Canada and the government of Alberta must immediately address themselves to the fact that the industry surrounding the production of Alberta crude could be wiped out in little more than ten years.
It was, I suspect, the debate surrounding the tar sands project which sparked the present concern about the short term of Alberta crude. It was only when Mr. Lougheed struck out in his efforts to justify the immediate letting of some spicy contracts that he admitted the short duration of conventional oil and used this fact as justification for rushing headlong into the tar sands approach.
I believe that eventually we shall need the tar sands, that eventually they will become Canada's greatest single energy source. I do not, however, believe there is any real need to launch into this project without a great deal of care and concern. I do not believe there is any need to let ourselves panic into giving these resources away to the lowest bidder. I said "lowest bidder" because I believe that eventually the people of Canada will have to make a much higher bid for these resources if they are disposed of now.
There is in existence a very fine document labelled "confidential" but which has nevertheless been given fairly wide circulation. It was prepared for the executive council of the cabinet of Alberta by a large group of top civil servants. It is entitled "Fort McMurray Athabasca tar sands development strategy." Let me read just one or two choice extracts from this document, which I consider to be a very fine document. There are many other extracts I could read expressing similar views.
Alberta is not under any pressure to develop synthetic crude oil from the bituminous tar sands for the purpose of meeting either Albertan or Canadian petroleum requirements. The pressure to develop synthetic crude from the tar sands emanates from markets external to Canada.
Here is a further quotation:
The tar sands offers a unique opportunity to change the historical trend of ever-increasing foreign control of non-renewable resource development in Canada. Here is a reserve of the greatest magnitude which does not require highly speculative investment to find and prove.
That is not a document of the Committee for an Independent Canada; it is a document of the Alberta government. Another statement talks about research into the extraction process, mining methods and experiments in situ. It reads:
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 indication of the heavy influence of the conventional crude oil industry.
There is a whole series of statements of this kind in the document. What has Mr. Lougheed done with this excellent document containing advice from a committee of 41 top government employees from every department of gov-
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ernment, including the Research Council of Alberta, the Alberta Housing Corporation and the Energy Resources Conservation Board? He has completely ignored this exhaustive report and based his policy on odds and sods, including a report from a New York consulting firm. What, Mr. Speaker, must be done with these reserves? I believe the resolution before us today holds the real answer and is entirely consistent with the report of the Alberta government.
I believe the Government of Canada must acquire an interest in the tar sands along with the government of Alberta.


Some hon. Members:: Hear, hear!


Paul Edmund McRae: I do not exclude the private sector. As a matter of fact, I would welcome it provided it had a very high component of Canadian ownership. How would the Canadian government go about acquiring, say, a 50 per cent share of this invaluable resource? Once again, I think the document to which I have already referred points to the answer to such a question. It uses the phrase "for Albertans and for Canadians."
Mr. Speaker, there are no finer nor more devoted Canadians than in the province of Alberta, and it is their generosity and national spirit which will prevail in this issue. But there must be a quid pro quo. We cannot ask this single component in Canadian society to do all the giving. That quid pro quo cannot take the form just of cash. It must offer more than that. It must include real concern and real support for Alberta in facing the problem of conversion from a one-industry to a multi-industry base. It must include a transportation system and policy which will tend to reduce the industrial inequities that exist in the country. At a time when the mayor of the city of Toronto is saying we should move growth out of Toronto, it must include policies which will redistribute growth throughout Canada and bring diversification to Alberta. There may be a quarrel at present between the Premier of the province of Alberta and the federal government. There is no quarrel, however, between Albertans and other Canadians where the future well-being of Canada is concerned.
Time does not permit detailed analysis of ownership in the petroleum industry. It is sufficient to say that percentages of from 75 to 90 per cent are certainly reliable figures. As a self-respecting nation, this kind of ratio cannot continue, especially in an area so vital as natural resources. The place to start is with the 300 billion or more barrels of crude potentially recoverable from the tar sands, our most valuable energy resource. Similarly, time does not permit a detailed discussion regarding the establishment of a national petroleum corporation. Suffice it to say that I firmly support this proposition, although I am not sure I agree with the functions as set out in the motion. I would propose, for instance, that a petroleum marketing board, or even a marketing board covering all energy sources, should be established separate from a Canadian petroleum corporation. One of the roles of the corporation would be to monitor other members of the same sector. I believe it should also have a pace-setting role.
I have never felt easy about the way the pipelines were constructed in the fifties and sixties. I have always felt

October 25, 1973
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that the oil line which went through Duluth should have gone through the lakehead. I expressed my extreme dissatisfaction that the second gas pipeline should have been constructed from Emerson through Minnesota and Wisconsin to Sarnia. I did so at the time the line was built. I feel that if members of the opposition party had supported these elements in the government who favoured the northern route, instead of maintaining their chastity on this issue, this gas line would have been an all-Canadian project. I was convinced then, and I am even more convinced now, that this was the proper course to take. However, we now have the benefit of hindsight and a new problem has arisen.
I should like to conclude my remarks with the plea that we give serious consideration to extending the pipeline, not just from Toronto or from Sault Ste. Marie to Montreal but that we build an all-Canadian pipeline extending from Manitoba to Thunder Bay, Sault Ste. Marie, Sudbury, North Bay, Ottawa and Montreal. As the building of a railway was the act that built the nation, so the building of an all-Canadian pipeline will be the act that will revive the spirit of a nation, Canada, because it will be the symbol that our resources are to be developed for this and future generations of Canadians.


Mr. Harvie Andre (Calgary Centre):: Mr. Speaker, the hon. member for Fort William (Mr. McRae) has about as much knowledge of Alberta as the Liberals in Alberta, and this probably explains why there were 19 Conservative members elected in the province in the last election.
As for the motion introduced by the hon. member for Nanaimo-Cowichan-The Islands (Mr. Douglas), I think it was dealt with quite effectively by my colleague, the hon. member for Regina East (Mr. Balfour). The NDP stated that immediate steps are required to change Canada's energy policy and proposed three steps which, at the earliest, will only take effect in two or three years. The effect that they will have in that time will only exacerbate any difficulties that we might be having at this stage.
With regard to the energy situation in Canada today, a lot of people would like to term it an energy crisis. Far from it. In fact, Dr. George Govier, chairman of the Energy Resources Conservation Board of Alberta, one of Canada's most knowledgeable individuals in the oil industry who certainly knows more about the industry than any spokesman I have heard on the other side of the House, termed today's situation as Canada's energy opportunity. In a paper delivered to the Canadian Institute of Mining and Metallurgy, he outlined the opportunities available to Canada in this situation. As the hon. member for Fort William mentioned, we are the only western industrialized member nation of OECD that is self-sufficient in energy, and barring any further mistakes by this government we will be self-sufficient for the next 600 years or so. He then adds a caveat in these words:
I hope we will not see the development of irrational restraints on trade in energy resources. I believe Canada can benefit from imports where these are logical and there is no question that we may benefit from the export of energy resources surplus to our own requirements. We must, however, make sure that we only export resources surplus to our own needs and that the maximum practical processing be done in Canada before they are exported.

That is good advice and I wish the government would follow it. Looking at the history of the oil industry, during the 1950s in Alberta there was a good deal of exploration and drilling for oil without markets. By the end of the 1950s most wells in Alberta were prorated near shut-down, producing at a fraction of their capacity. Fortunately, in 1961 the Diefenbaker government introduced a very progressive national oil policy under which the area west of the Ottawa River would be reserved for Canadian crude oil production, giving a tremendous spurt to the industry and resulting in its healthy state today.
However, during the decade from 1961 to 1971 repeated delegations from Alberta, from the industry, from government, from groups like the Independent Petroleum Association of Canada, the Canada Petroleum Association, and others, visited Ottawa and Quebec City requesting that a pipeline be built to Montreal so that western crude could supply this market as well. But they were told no, that although offshore sources were insecure, they were cheaper. Cheaper by two cents a gallon, but nevertheless cheaper. Therefore, this pipeline would not be built. We do not take much consolation from saying, "We told you so," but we are now in this situation today with the possibility, though I hope not much of a possibility, that some areas of Canada this winter will have difficulty finding heating fuel.
Do we have a policy now that will correct this situation? Do we have a policy that will prevent this situation developing in the future? Do we have a policy that will take advantage of the opportunities being presented to Canada as a result of this situation to which my colleague, the hon. member for Qu'Appelle-Moose Mountain (Mr. Hamilton), alluded earlier today? I am afraid we do not. I am afraid we have no policy. We have no policy to Canadianize the oil industry.
The Minister of Energy, Mines and Resources (Mr. Macdonald), in answer to repeated questions, stated last fall that the policy would come in the winter. Then he stated it would come in late winter, then it was early spring, then it was late spring. Finally in July, Brinks trucks and all, came forward this energy policy for Canada document, volume I. It is an analysis, not a policy. However, let us give credit where credit is due: it is a well written document and contains a lot of very useful and good information as well as good advice. There is one piece of advice in particular that I would bring to the attention of the minister. It is on page 9, and reads as follows:
Federal and provincial responsibilities and interests in the energy field are intimately interrelated. No national policy can be contemplated without the fullest of intergovernmental consultations and consensus.
That was good advice in July. But on the Labour Day weekend, after labouring all weekend trying to find something to say on September 4 to demonstrate this government's apparent interest and concern about inflation, the government came forward with a freeze on the price of crude oil, applauded by the NDP.


John Napier Turner: That is your policy.


Harvie Andre: That was their policy.


John Napier Turner: It is your policy too.
October 25, 1973


Harvie Andre: However, it was apparent that the government did not look at its own legislation, the National Energy Board Act, section 83(b) of which provides that the board will not allow exports unless the price of the energy exported is just and reasonable in relation to the public interest. Therefore, the National Energy Board was not able to allow the nominations for October. This meant the government was forced to bring in a 40 cents surtax, again after the greatest of discussion-if I am correct, I think about ten minutes' worth. To this the premier of Alberta was forced to respond:
This appears to be the most discriminatory action taken by a federal government against a particular province in the entire history of confederation.
This is the sort of National unity that this party of national unity, this party which thinks it is the only party for all of Canada, is promoting, to the applause of the NDP which thought this move was getting at the big, multinational corporations. In point of fact, the companies which were hurt the most by this move, the companies most affected by it, were the small Canadian independents who at long last were starting, in spite of the regressive taxation policies of this government, to become a significant element in Canada's oil industry.


Mr. Foster:: Are you part of the Calgary oil lobby?


Harvie Andre: The Minister of Finance said that this is our policy.


John Napier Turner: Talk about a freeze! We are listening to a frozen line.


Harvie Andre: Is the government concerned about inflation? During the last year the price of lumber has gone up by over 100 per cent. I have a letter from a Calgarian, an ordinary working citizen, not a member of the oil industry, who points out that in 1923 a gallon of gas cost 40 cents. At that time he built a house with lumber costing $26 per thousand board feet. It now costs $260 per thousand board feet. The cost has gone up ten times per thousand board feet. Has the government done anything in this regard? The ordinary workingman spends a far larger percentage of his income on housing than for gasoline for his car, but the government is not interested in that. Perhaps there are a lot of lumberjacks and lumber companies in the constituency of the hon. member for Nanaimo-Cowichan-The Islands (Mr. Douglas): that may be one of the reasons for this mood.
We did not see such a freeze in respect of other commodities. We did not see the type of freeze for which this party has been calling. We just saw the wrong type of freeze which was bound to create problems. Again referring to the minister's own document, at page 67 it is clearly indicated in the second paragraph that it is assumed throughout the document that the price of crude oil will reflect world prices because the market price will dictate to a considerable degree the quantity of new energy sources that can be developed in Canada. It states specifically:
As later chapters will show if Canadian prices are held down the
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resources available are reduced and, at the same time, a greater domestic demand than projected may develop.
This is the government's own document. It contains good advice, and hon. members should read it. In addition to this short-term consumer protection we have the question of our long-term interest. The hon. member for Fort William (Mr. McRae) is correct in saying that today there are proven conventional resources which will last for approximately 15 years. If the policies of this government continue, we have the guarantee that in 15 years we will run out of our proven conventional resources. If, in fact, this government adopts progressive policies that take advantage of the opportunities available to us, developing the non-conventional resources off the east coast of the Maritimes, in the Northwesi Territories and in the Arctic island, and more importantly the tar sands, I am sure we will avoid becoming a have-not country like so many others in the world so far as energy is concerned.
The NDP, evidently with the approval of the government, feels there should be a Crown corporation to develop the tar sands. Obviously, members of that party know nothing of the risks involved and nothing of the agreement worked out between Premier Lougheed and the Syncrude group. Under that agreement, 50 per cent of the profits would return to the province of Alberta. Under that agreement, the Alberta energy company, owned 50 per cent by the government of Alberta and 50 per cent by the people of Alberta, will own 80 per cent of the pipeline connecting this plant to Edmonton. I do not know of a pipeline that has ever lost money. Pipelines represent great investments. Under this agreement, the Alberta energy company would own 50 per cent of the power plant associated with this company, and this energy company would have the option to purchase 20 per cent of the tar sands plant if they prove to be economically viable. In other words, with no risk and very little money invested the government and people of Alberta will get upward of 56 per cent of the profits from this company.
The hon. member for Nipissing (Mr. Blais) said there was no risk associated with the tar sands plant, and evidently NDP members agree. They obviously know nothing of the Great Canadian Oil Sands plant which has yet to make a profit.


An hon. Member:: You seem to know everything.


Harvie Andre: I am a chemical engineer and I think I know a little bit more about this subject than you do. The risks are enormous. A deal where you can get 56 per cent of the profits and take no risk is a sweet deal to me. More important than ownership is having these tar sands developed, the effect this will have on Canadian northern areas in the so-called mid-Canada corridor and the effect, as well, on western Canada. Of importance also is the effect this will have on diversification and carrying forward the promise of regional economic expansion. That makes this project, and subsequent tar sands projects, enormously important.
I plead with the minister to enter into negotiations at the earliest possible moment with the Premier of Alberta and the Syncrude group in order to clear up the obvious uncertainties that exist. The minister indicated to the House that the Syncrude principals were satisfied and

October 25, 1973
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that the tax dollars were adequate to allow this group to carry on with this particular project. But the president of the company immediately issued a press release stating that no such agreement had been reached and that the discussions which had taken place had not been at all satisfactory.


An hon. Member:: The consumers will bring Lougheed around.


Donald Stovel Macdonald: Mr. Speaker, I rise on a question of privilege. At no time did I make that suggestion. I said there was agreement not with the president of Syncrude but with his principals only; but this was not on the subject of taxation but, rather, on the subject of pricing.


Harvie Andre: In answer to a question asked by the Leader of the Opposition (Mr. Stanfield), the Minister of Energy, Mines and Resources (Mr. Macdonald) indicated he had been able to satisfy the principals, yet the president of Syncrude said he was not satisfied. This project is still in jeopardy if that statement by the president of Syncrude is accurate. This matter is far too important to Canada to be playing around with. Let us settle it.


Donald Stovel Macdonald: Are you talking about taxation, or pricing?


Harvie Andre: I am talking about the questions that remain in the air. In terms of prices the minister indicated last Friday that he would let the western crude of Syncrude float on the Montreal market; but the question of taxation has not been satisfactorily concluded, according to the president of Syncrude. He has indicated they will not be able to go ahead unless this point is cleared up. In the interest of Canada I plead with the minister to straighten it out in order that we may carry on with this very important project, important not only to Alberta but to the future of Canada.


Mr. Max Saltsman (Waterloo-Cambridge):: Mr. Speaker-


An hon. Member:: Are you a chemical engineer, Max?


Max Saltsman: There seems to be some question about my credentials when speaking on the subject of oil. All I can say is that although I do not come from Calgary Centre as does the hon. member who preceded me, and I am not a chemical engineer, one can be born on top of an oil well and still know nothing about oil. I do not know whether the hon. member was born on top of one or just played with it when he was a kid, but it seems to me that the logic of the hon. member for Calgary Centre (Mr. Andre) leaves a lot to be desired. On one hand he tells us what a good idea the national oil policy was in 1961, and then turns around and condemns the government for not having built a pipeline to Montreal since that time.
Let me point out that one of the central features to that national oil policy was that a pipeline would not be built to Montreal. I do not see how the hon. member can praise two objectives which are contradictory to each other. This national oil policy was put forward as an alternative to a pipeline to Montreal. In fact, it was never a real policy; it

was really the result of asking the oil companies what they could do for us and turning over the organization of the industry to them. They organized and have done a great job, and we are paying present-day prices as a result of that great job. The hon. member for Calgary Centre referred to prorated oil sales from Alberta. I suggest there was probably no greater criminal expenditure of capital in this country than that for the development of the oil industry in Alberta. You do not have to be born on top of an oil well to realize that.
The west has a legitimate grievance. I, for one, am not going to suggest that Alberta does not have things to grieve about, that Saskatchewan does not have things to grieve about or that other western provinces do not have grievances. However, it is often forgotten that Ontario, which gets its brains beaten out all the time by the west, has some pretty substantial grievances as well. From the 1961 national oil policy onward, the oil policy was based on providing Alberta with the opportunity of getting this oil out of the ground at a time when the United States would not take it, and when it was arranged to end the pipeline at the Ottawa valley and that west of the Borden line people would have to pay higher prices.
From 1961 until very recently, consumers in the province of Ontario have paid five cents more a gallon for gasoline than was necessary, because of the national oil policy. This represents $lVi billion a year in the form of a subsidy to the province of Alberta. That is in fact what the national energy policy was. It was a subsidy from the province of Ontario to the province of Alberta. Let us not forget that. I do not begrudge it. Alberta was entitled to that consideration. That was one of the principal industries which she had to develop around, and she was entitled to consideration from Ontario. After all, she put up with tariffs for a long time, so why should not Ontario put up with somewhat higher prices as well? I cannot quarrel with that. However, I am suggesting to Alberta members that they should not forget this.
Now that they are in the driver's seat and the shoe is on the other foot, it is as though they say that Ontario has always gouged them, that they have got nothing out of it and that Ontario does not give a damn. That just is not true. That kind of talk is destructive of national unity in this country. So they should just watch the stones when they are throwing them around.


An hon. Member:: What about tariffs?


Max Saltsman: I mentioned tariffs. I said you have legitimate grievances. I do not deny that. All we want the horsemen from Alberta to do is not forget that Ontario is part of Canada also. Ontario has not been without some sympathy for the west and some understanding of its problems. So let us not start acting as if we are in countries which are foreign to each other and as if Alberta can do exactly what it pleases without any regard for what goes on in the rest of Canada. Some members of this House may speak that way, but I refuse to believe that really expresses the sentiments of the people of Alberta. I have spoken to too many people from Alberta who share my feelings about belonging to a national entity and who
October 25, 1973

are willing to share with the rest of Canada just as other Canadians are willing to share with them.
One starts off with a kind of organization of his speech only to find it must be put aside because someone has made statements prior to one's intervention which must be dealt with. It seems to me that the Liberal government, in spite of itself, is stumbling into semblances of a national energy policy-and we will help them. We do not mind at all if they pick up an item from us, or if a Liberal member supports our resolution, because what we suggest would work for the advantage of the country as a whole. Many things contribute to the establishment of a national energy policy. I say "national energy policy" because this goes beyond oil, gas and electricity. Forms of energy are largely interchangeable.
The Middle East crisis has forced us to go to Venezuela, which has always dealt fairly with us, to see what kind of arrangement can be made. I think arrangements can be made with Venezuela. The story is that Venezuela wants to deal directly with the Canadian government and bypass the multinational oil companies. It is difficult for them, because the multinationals in fact market the oil from Venezuela. It is difficult for them because we cannot provide any shipping for them.
But knowing that this is what the Venezuelan government has in mind, the Canadian government should move immediately to open negotiations with them. I would like to suggest that we already in fact possess an instrument for doing that. We do not have to set up a new corporation, although I think in the long run it probably would be necessary: we should use the Canadian Commercial Corporation, which does over a quarter of a million dollars' worth of business a year in buying and selling on behalf of the government of Canada, using people from various government departments. This corporation could be used immediately. I see in its brochure that it has purchased shipping interests in the amount of $124 million. It is already engaged in the business of hiring ships and arranging for shipping and transportation of goods. I think this corporation should be used immediately and that we should tell the Venezuelan government we are prepared to make a government to government agreement with them.
Under no circumstances should the tar sands of Canada be allowed to fall under private ownership. We have been strangled in this country by private ownership. It is a great little gag which the people going into the tar sands development are using. You know the kind of logic we hear from the people in the oil industry. We had a sample of it just prior to my speaking this evening. When you go to them and mention all the money they are making, and suggest they are not paying any taxes, they say they have not made any money. They say the amount of revenue they have received to this point is exactly equal to the expenditures they have laid out, and that their books do not show them as having made any money-except for one thing: they forget to tell us what they have in reserve in the ground, which is already paid for.
The reserves in the ground represent something in the neighbourhood of ten billion barrels. At roughly $5 a barrel, which the market price will soon be, that is not bad. It represents $50 billion worth in the ground, free for
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profit in the future except for one thing: they are just liable to have to pay some tax on it. If they get into the Syncrude operation, if they get into the tar sands, and start giving us the mumbo-jumbo about how much money they have sunk into it and how much money they have lost in these various installations, and start taking their depreciation and then take their depletion allowance because they are investing in exploration, then they do not have to pay tax.
So far as I am concerned and so far as my party is concerned, rather than giving the oil companies handouts to exploit us we should do our own exploiting. It is our money they are using, and it is our money they have been using largely up until now. They buy the expertise, and we can buy it too. There are many people who know how to build these plants, and they will work for the government just as well as for the oil companies. It is essential that the government start making some decisions along these lines. For instance, we must have a decision from Venezuela and know where we stand with that country in terms of security of supply.
It is becoming obvious that we must build a pipeline. I agree with the hon. member for Fort William (Mr. McRae) that it should be an all-Canadian route, and I believe C. D. Howe would applaud that. In order to build a pipeline to Montreal we must have some idea of the amount of offshore crude we can expect to come in at that point. Until we have some long-term assurance from governments, we do not know what size that pipeline should be and we do not know whether it should be a reversible pipeline or should go straight through. Therefore, it is essential that the government move rapidly on this question.
I think the government must go further and bring in controls on energy expenditures. This country has seen an example of the most wasteful use of capital that is imaginable. That must be prevented in the future. The projection into the seventies indicates that we will need something like $60 billion to meet our energy requirements. If we become involved in a wasteful process in respect of private enterprise as experienced in the thirties, forties and fifties, there will not be enough money around to meet our requirements.
I think any sizeable expenditure on energy operations should go through a national planning board and that the federal government should have a say in how this money is used. If there should be an expenditure of $2 billion or $3 billion in one part of the country, it is not only that part of the country which is affected: the supply situation of other industries is affected, the dollar situation is affected and other borrowers are affected. It is the federal government that must take the lead and do the planning; we cannot leave it to the generals in private industry. I hope the government's reply to the province of Alberta will be, "Thank you very much for your letter regarding your request that we release you from taxation on the development of the tar sands. We appreciate your desire to do that, but the answer is no."


Some hon. Members:: Hear, hear!
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October 25, 1973
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Max Saltsman: There have been enough giveaways from this country without that. Those tar sands can be developed by a partnership between the provincial and the federal government, without gigantic giveaways and tax shelters granted to the oil industry. On item (c), where he requests that the federal government should not regulate, directly or indirectly, the price of synthetic crude, the answer should be that that is something which lies within the sovereign power of Canada, not of a province. The Canadian consumers are entitled to ask the Government of Canada to protect them from those who would gouge them because the market is riding high.


Mr. Judd Buchanan (London West):: Mr. Speaker, I am grateful for the opportunity to speak on the subject of energy resources this evening. My comments will be a pot-pourri dealing with the reaction of the Alberta government to the export tax, the proposed pipeline to Montreal, the development of the tar sands and the unique position of Canada with respect to energy resources.
After the anouncement was made concerning the export tax, all of us heard vigorous and violent reaction from the Premier of Alberta, part of it relating to consultation and part relating to the substance of what had happened. As to the consultation aspect, I do not intend to comment. I was not involved and am not aware of exactly what transpired. As to the substance, Mr. Speaker, I would suggest to all Canadians, and to the citizens of Alberta in particular, that they take with a grain of salt the vigorous reaction of the premier. When the export taxes were announced, Premier Lougheed said:
I don't feel we can be bound by the 1972 statement on oil royalties (that there would ne no change for five years) because of the federal government's statement on an export tax.
The situation in 1972 was that the Premier of Alberta had in fact given an undertaking to the oil companies, when the royalties were established, that they would not be changed during the ensuing five years. Thus, the province of Alberta, as the situation evolved, was locked into an extremely unattractive, extremely costly and bad situation for its own citizens. I suggest that instead of making unkind remarks about the Minister of Energy, Mines and Resources (Mr. Macdonald), the Premier of Alberta should be offering up a little prayer of thanks for that minister, on a regular basis, for having got him off the hook in what was an extremely costly and disadvantageous arrangement for Albertans.
In effect, Alberta was locked into a situation which over the next few years would have cost its citizens hundreds of millions of dollars. But the Premier of Alberta, because he was taken off the hook by the Minister of Energy, Mines and Resources, was able to say, "I am no longer locked in. I can now change the lousy arrangement that I made one year ago and use a posted wellhead price to determine the figure on which I am going to base my royalties." There is nothing strange about this, Mr. Speaker. The Venezuelans have been using that system for the past ten years and the Premier of Alberta intends to start using it next year.
It is interesting to look at some of the arithmetic. The price of oil has gone up 90 cents a barrel over the last ten months. On average, the province of Alberta realizes 18 cents per barrel in royalties on that increase-roughly 20

per cent. On some oil production it realizes 18 per cent and on others 22 per cent; but 20 per cent is a good average. As the world price increased rapidly, providing tremendous windfall gains to the oil companies in Alberta, it is easy to see why Alberta would want to get a more significant slice of the pie for its citizens. In that situation, and being able to get out of the locked-in system, thanks to the Minister of Energy, Mines and Resources, the province could arbitrarily set the posted wellhead price and assume an increase of $2 per barrel, rather than 90 cents, and base its royalties on that figure. By doing that the province would realize 40 cents a barrel in royalties, 22 cents more than would have been realized under the locked-in system during the previous period.


Erik Nielsen: By George, we have another gas expert!


J. Judd Buchanan: We grow in the trees out there.


Erik Nielsen: I think you are out of your tree.


J. Judd Buchanan: On the Alberta production of 1.8 million barrels a day, that works out roughly to $400,000 more per day that Alberta could be collecting; and now, thanks to the action of the federal government, it feels free to do that. That is what Alberta is going to start doing on the 1st of January. I am not condemning it. I think it is a wise move. I think it is a fine thing for the citizens of Alberta to be getting a significant part of those windfalls basically resulting from the actions of Mr. Gaddafi and King Feisal in the Middle East. That is what will happen when they start to use a posted wellhead price rather than the actual wellhead price that must be used now. The citizens of Alberta in particular will be the direct beneficiaries, and they and the citizens of Canada at large should take the objections of the Premier of Alberta with a grain of salt. I think he is extremely grateful for getting off the hook. Now he is able to break that commitment.
There are a couple of other aspects of this question that are rather interesting. An Albertan economist, Professor T. L. Powrie of the University of Alberta, has made certain calculations based on last year's production of oil. He estimates that the savings, as a result of the export tax, in lower prices to Canadian consumers will be $21.4 million for the citizens of Alberta, $32.8 million for the citizens of the balance of western Canada, and for the citizens of Ontario the savings will work out to roughly $55 million. The theme has been played by the Premier that the export tax is for the advantage of Ontario. From Professor Powrie's calculations it is interesting to see that the savings are split right down the middle, with $55 million for citizens of western Canada and $55 million for citizens of Ontario.
Professor Powrie also estimates that the export tax causes a net loss to Alberta of $22.8 million because of the $44.2 million loss of royalties, which is partly compensated for by a saving of $21.4 million to Alberta consumers. This net loss is equal to about 16 per cent of the proceeds of the federal export tax. If Alberta is paid over 16 per cent of the revenue from the export tax, it will share in the net gain to the over-all national income. He goes on to say that Alberta might as well try for 81 per cent, that figure being its percentage of total Canadian production.
October 25, 1973

I would like to move on and point out that Canada is unique in the world among the developed nations, with the exception of the U.S.S.R., in that we will be self-sufficient in energy-oil, gas, uranium, hydro and coal-for a very lengthy time into the future. This is a fact of which Canadians should not be oblivious. We should be aware of the benefits that can accrue to us as a direct result of the fact that we are in a position to power our industries, our manufacturing operations and our transportation with lower cost fuel. That is a significant factor that can go a long way to offsetting the disadvantages of our large land area and relatively small population.


Robert Lorne Stanfield: And a lousy government!


J. Judd Buchanan: In the area of manufacturing we are at a disadvantage compared to a great many of the countries with which we must compete and our uniquely advantageous position regarding energy should not be ignored.
To digress for a moment, Mr. Speaker, and to consider other resources, in the area of minerals I believe we should be looking very seriously at the benefits of stabilized costs to our manufacturing and processing industries based on our actual production costs rather than international costs caused by the various commodity shortages throughout the world. This would help us build a more economic industrial and manufacturing base and offset the disadvantages of a smaller market and higher transportation costs caused by the size of the country.
One of my colleagues made reference to the proposed development of the Athabasca tar sands. A report has been prepared by the civil service of the province of Alberta, I believe by some departmental people and by some who worked for agencies and boards. It is entitled "Fort McMurray-Athabasca tar sands development strategy" and was prepared in Edmonton in August of 1972. It is interesting to read some of the excerpts and then endeavour to square the advice given to the province with the action it has in fact taken. The report reads:
Alberta is not under any pressure to develop synthetic crude oil from the bituminous tar sands for the purpose of meeting either Albertan or Canadian petroleum requirements. The pressure to develop synthetic crude from the tar sands emanates from markets external to Canada.
If my memory is correct, Mr. Speaker, Alberta's production is somewhere around 1,800,000 barrels of which 1,200,000 or 1,250,000 are for export. The report continues:
It is also a basic premise that the demand for the synthetic crude oil will be sufficient to enable Alberta to control the basic terms and conditions for development.
The basic feature of the development-should be-deliberate policy decisions by Albertans-to ensure that the development complements and supplements the over-all development requirements of Albertans and Canadians. The policy decisions should be guided primarily by the perceived benefits that will accrue to Albertans and Canadians.
This is the recurring theme-that we should be concerned with what is of benefit particularly to the province of Alberta and more generally to the citizens of Canada. To continue:
Only after Albertan and Canadian policy parameters have been fulfilled should foreign constraints become operative. In short, Canadian policy parameters should take precedence over all other
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factors. Foreign energy demands should not be the only force influencing development.
Axiomatic-is the desire that the envolvement of this "tar sand technology" should be led by Canadian technologists; that is, developed, shaped and influenced by Canadians for the benefit of Canadians.
The tar sands offers a unique opportunity to change the historical trend of ever increasing foreign control of non-renewable resource development in Canada. Here is a reserve of the greatest magnitude...
This is in contradiction to the comment made a few moments ago by the hon. member for Calgary Centre (Mr. Andre).
. .. which does not require highly speculative investment to find and prove.
The essential characteristic of our suggestions is their proCanadian and pro-Albertan flavour. The basic premise that the demand for synthetic crude oil is from markets external to Canada, combined with the assumption that substantial net benefits will be derived only if the development is firmly controlled in a manner which complements and supplements the development requirements of Alberta and Canada, leads to the adoption of a pro-Canadian and pro-Albertan policy position.
The attitude and expectations of the multi-national corporations will be the same in the development of the tar sands as has persisted in the conventional crude oil industry . . . Traditionally their concerns have been to win the resource and transport it to the market in its crude state. Technologically there is no reason . . .
I think Albertans feel very strongly about this, Mr. Speaker.
. . . why the synthetic crude oil could not be upgraded for various energy forms or used as feedstock in the petro-chemical cycle, although this is not usually done in Alberta. The reason why this has not been done is that it is contrary to the corporate policy which does not consider questions such as Canadian economic sovereignty.
Massive capital injections into the Fort McMurray region at the rate .. . estimated as the requirement of the American crude deficiency ... would result... in . . . the dislocation and instability caused to the Canadian and especially Alberta economy and labour force (which) would be directly contradictory to the economic objective.
Later, the report reads:
Alberta must stand firm in the conviction that the tar sands make up approximately one third of the known world petroleum reserves . . . Alberta should be able to utilize the tar sands as a lever in the socio-economic development of the province. Nuclear energy, geothermal energy, or the Colorado oil shales as a substitute for petroleum products will not be competitive economically or technologically with the tar sands for some time.
I could go on, Mr. Speaker, but basically the point that we as Canadians should be aware of and should give considerable thought to is that at various stages-


Mr. Deputy Speaker:: Order, please. I regret to interrupt the hon. member, but the time allotted to him by the order made earlier today has expired. He may, of course, continue with the unanimous consent of the House.


Some hon. Members:: Agreed.


Stanley Howard Knowles: Two minutes.


Mr. Deputy Speaker:: Is this agreed?


Some hon. Members:: Agreed.


J. Judd Buchanan: I was going to say that Canadians at various times in history have decided that for their own
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October 25, 1973
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national interest and well-being it is important to control and own certain of our national industries or operations. We decided it was in our interest to control and own the communications media, the transportation industry and the financial industry. I think that at this juncture in our history we should be looking very seriously at taking control of and owning our energy resources. I suggest that at this point we should not be using energy as a commodity for export but, instead, we should be using it as a catalyst for our industrial development.


Some hon. Members:: Hear, hear!


Charles E. Haliburton: Mr. Speaker, the preceding speaker, the hon. member for London West (Mr. Buchanan) had me literally holding my breath as he told us of the benefits Canadians have received from the action taken by this government in their oil policy. As he worked his way from west to east, reciting the benefits province by province, I was waiting until he got to the Maritimes so that he could tell me what benefits we have received from the government's oil policy or any other policy. To my disappointment, he only came as far as Ontario and announced that eastern Canada had received benefits. I think he was referring to Ontario then; he did not get far north and he did not get far east.
I am a newcomer to this House, Mr. Speaker, but since my arrival I have noticed that the hon. gentleman sponsoring this resolution has been seeking to have enunciated the government's policy on energy. What has happened in the time that I have been here-a year now? The minister has issued a green paper or a white paper-a conversation piece. It has been very helpful in discussing some of the problems facing the Canadian oil industry and Canadians in general, with respect to energy, but the next stage of the procedure is unknown. The National Energy Board has initiated a review of export policies and they hope to be in a position to make some recommendations to the government some time in the next year.
I suggest, Mr. Speaker, through you to other members, that the export policies of this country involve the whole gamut of oil policy and energy policy generally. But it is late in the day, tragically late for British Columbia which is in an uncomfortable position. It is uncomfortably late for the rest of us, too. Where was the government's policy last year and the year before that? British Columbia is facing a crisis. What the policy of the government is in view of that crisis, we do not know. We face tight supply situations across this country with respect to gasoline and other fuels. What is the policy of the government in view of that situation? Again, we do not know.
The war in the Middle East has brought about unusual shortages which perhaps could not have been anticipated. Apparently the Department of External Affairs still does not know who to blame for the interruption in our oil supplies from the Middle East. No doubt we have come to an end in this country of the era of cheap oil and gas. Certainly the time of cheap hydro in this country has passed. We must plan how we are to use our resources, and plan very carefully. In view of the current energy crisis

the world will need to come to terms with the idea that supplies from traditional sources of hydrocarbon fuels are limited. On this continent and in this country we use far more than our share of the world's reserves of energy. We cannot always expect to bring supplies of energy in from underdeveloped countries as many of those countries are developing and their consumption of traditional energy fuels will increase.
We must plan to meet higher costs. Further, we must plan to use our energy resources efficiently and not waste them. In this country almost as much energy is wasted as is utilized. Let me illustrate what I mean. The President of the United States has asked the people to turn down their thermostats. If Canadians were to turn down their thermostats a bit, they would make a worth-while contribution to the cause of energy conservation. We could design cars which use less gasoline and thus help to conserve our energy sources. As well, the government could insist on installing switching apparatus in government buildings which would turn the lights off at the appropriate time. It costs more to install such gear, but the saving in energy would be useful.
I wish to refer to a newspaper article. The report in my hand says that a University of Toronto professor has predicted substantial changes in Canadian life styles as the cost of energy rises in the next 20 to 30 years. He says we are likely to see smaller cities and a check on urban sprawl, that there could be a demand for more efficient appliances, and that "Energy such as oil, gas and electricity will continue to be used for the same purposes but people will adopt attitudes and substitutes that use less or little energy." Those words deserve consideration.
Speaking as a maritimer-and those to my left, as well as those across the floor, have advocated this-I say that big pipelines are not the panacea for my area. I suggest the only hope for the maritime provinces lies in cheaper oil from our traditional bffshore supplies or, possibly, in our own oilfields. The construction of mammoth pipelines across the country is not likely to help us much.
What has the lack of policy on the part of government in this field meant? It has meant, first, that a crisis has come about in British Columbia. Tight supply conditions are forecast for other parts of the country as well. Further, it has meant that there is no integrated oil supply system in Canada. If one part of the country runs out of oil or gas, as has happened in British Columbia, there is no way to replace that fuel. Substitutes are not available. We cannot make available other types of energy to meet the shortage.
Another result has been the distinct loss of confidence on the part of the industry. Speaking as an easterner, some of the niceties of the industry may escape me but one thing is apparent. Although I can speak with better authority about our electricity system than about oil, it is apparent that very substantial lead times are needed to get pipelines approved, built and operating. Similarly, a great deal of lead time is needed to develop oilfields, that is, oil wells, and the proving of new reserves. There has been a lag in exploration and development because of the uncertainty existing in the industry. Although Canada has vast potential reserves, we still do not know their extent. Discoveries of energy are being slowed down because of the uncertainty on the part of the oil industry.
October 25, 1973

I suggest the motion outlines the government's responsibility clearly in that part which says that it must "ensure a continuity of supply at fair and just prices to all Canadian consumers". How can one say that the government is fulfilling its responsibilities in view of the crisis in the British Columbia supply situation? Speaking as a layman and as an eastener, I was shocked to learn that there was an inadequate scheduling of fuel deliveries to British Columbia and that as a consequence fuel supplies in B.C. are tight.
In view of our winters and the dependence of our industries on regular oil supplies, that situation is intolerable. The daily volume of supplies delivered to British Columbia is, if I understand correctly, very close to the total capacity of the pipeline. If the velocity of the fuel going through the pipeline is cut, if water enters the pipeline or if there is some disruption in flow, great difficulties are the result. There is no reserve capacity in the pipeline which might be used to rectify any breach. Alternative sources of supply are not available in an emergency. That situation is totally intolerable.
What can the government do? First, it can encourage, by taxation measures and other means, oil and gas-producing companies to provide for reserves at the wellhead over and above expected demand. More should be available at the wellhead than is necessary to meet contracts. Companies should be encouraged to build facilities which will beef up pipeline capacity and pipelines should not operate at maximum capacity all the time. Obviously, this will cost money. The extra cost would be included in the increased price of gas and oil which is supplied through any particular system.
The government, as well, could insist on the establishment of some sort of grid system similar to electrical grids which could be used to transport oil and gas. The volume to be moved perhaps would not meet the total requirements of any particular market in the country but might meet, say, 20 per cent of total requirements. If there were a shortage on the east coast or on the west coast we should have the capability of supplying limited amounts of gas or oil via an alternate route, via the grid system. The cost of this could be borne by the general revenues of the companies and perhaps by the government. Certainly the government has a role to play in this field. Perhaps it could look at this idea. It is intolerable that our natural gas and oil supply systems are entities unto themselves which are closed off from the rest of the country.
In addition to providing for alternative means of supply, we should provide some storage capacity. That brings me to my next recommendation. I suggest that the government should take it upon itself to provide storage facilities for fuel at strategic points throughout the country. As an easterner, I perhaps know a little more about fish than I know about gas. I submit that the salt mines of Nova Scotia could be used as storage areas for vast quantities of gas and oil. In the event of an emergency, these reserves could be put back into production. They could replace offshore resources the supply of which is temporarily interrupted, or oil coming from other areas. Reserves like that would be useful in meeting an emergency. Just imagine the situation of this country if, in time of war, Trans-
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Canada Pipelines happened to be put out of commission for any length of time.
This government has not seen fit to provide any sort of reserve: there is no cushion whatever. We should have a substantial cushion. This could be provided by a storage system. We do not anticipate that oil and gas companies could sustain the cost of additional inventories, having once produced the oil and gas. However, this would be in the national interest and something the government could afford to do.
In conclusion, I want to paraphrase something said this afternoon by the hon. member for Nanaimo-Cowichan-The Islands (Mr. Douglas). He said we can no longer leave our future in the hands of foreign oil companies. I suggest we can no longer leave our future in the hands of a government that has no oil policy.


Thomas Speakman Barnett: Mr. Speaker, if one puts together the interesting and thoughtful speeches made by the hon. member for South Western Nova (Mr. Haliburton) and the hon. member for London West (Mr. Buchanan), one would see there is slowly but surely emerging in this House some degree of consensus that Canada, in relation to energy supplies and resources, should move in the direction that those in my party have been asking for over quite a period of time. Certainly one or two of us at least recall the kind of crescendo our advocacy of that kind of approach reached during what is often referred to as the pipeline debate of 1957.


Stanley Howard Knowles: 1956.


Thomas Speakman Barnett: I am being corrected by the hon. member for Winnipeg North Centre (Mr. Knowles). I was thinking of the aftermath in 1957. At this stage of the debate it is temping to follow through with the sort of observations that have been made by other speakers, but I wish to take a few minutes to draw to the attention of the House somewhat different considerations.
All members realize that, complex though the consideration of an oil policy may be in the energy policy as a whole, it cannot be considered in a vacuum. The main thrust of the debate has centred around the resolution introduced by the hon. member for Nanaimo-Cowichan-The Islands (Mr. Douglas) which calls for government action to provide a continuity of petroleum supplies at fair and just prices to all Canadian consumers. It goes on to make three specific suggestions as to how we might move in that direction. I am sure all my colleagues would agree that, while that is an important objective we must move toward and is very important and necessary to our economy, the matter of continuity of petroleum supplies at reasonable prices to Canadian consumers, both domestic and industrial, is not of itself the whole concern when discussing the question of petroleum.
We want fair prices, but we do not want to move to have continuity of supply at any price. When talking about importing oil or moving it from coast to coast we must not do so in terms of such urgency that we forget all other considerations. When thinking of the world situation and obtaining part of our supply by transportation across the

October 25, 1973
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oceans because of what appears to be an emergency at the moment, we should not agree that this is necessary at the price of turning the oceans of the world into deserts.
The hon. member for Nanaimo-Cowichan-The Islands stated it would be very difficult to grow grain across the prairie provinces if we had to use horse power as did the pioneer farmers. I suggest it would be even more disastrous if there were to be a film of oil out of the Alberta oilfields covering the plains of the Prairies to a depth of one-quarter or one-eighth of an inch. We would no longer be regarded in any part of the world as being the breadbasket for the production of wheat and other grains.
In our desire to secure supplies of oil from Venezuela, the Middle East or anywhere else, it is equally important that we consider the possible exploitation of oil that may exist in our offshore banks. We must not do this at the expense of eliminating the potential productive resources of the oceans of the world, their resources of oxygen and other requisites for our existence as human beings on this planet. In light of recent claims of a world shortage, which have perhaps been accentuated by the disturbances in the Middle East-which we hope will not continue much further into the future-I have been fearful about being stampeded into throwing to the winds what has become a genuine and growing concern for environmental matters, particularly with regard to the oceans of the world.
Prior to events in the Middle East, many Canadians were extremely suspicious that much of the so-called oil shortage may have been artificially created by the multinational oil firms. This immediately brings to mind, especially to those of us from British Columbia, actions being taken by oil interests in the United States with regard to the development and transportation of Alaskan oil to the southern states. Those suspicions are not without some foundation. The Middle East situation has certainly revealed that many nations are really vulnerable. The one that is cited most frequently and in this context is Japan. Nevertheless, such nations as the United States and Canada should not cast aside the concern that certain multinational corporations are going to attempt to take advantage of current prices to stampede us into throwing aside what should be our legitimate concern in the field of protecting the environment.
I read a recent report in the New York Times arising out of the International Marine Consultation Organization meetings which have been going on in London. It stated that every year several million tons of oil are dumped into the oceans of the world. This is largely due to the fact that shipping companies interchange oil tanks for ballast, and so on. This is a contributor to the shortage. I do not profess to be an expert, but according to that article much of the oil that is being dumped could be salvaged and utilized to help meet the current oil crisis if the so-called shipping states, their lines and the interests that operate under their flags were not so careless and unconcerned about the wasteful practices in the shipping field that have been followed helter-skelter for many years.
All the reports coming out of that conference are discouraging. I recently spent a week at the United Nations, and my main interest was following the proceedings in

connection with the planning for the Law of the Sea conference. Many of the coastal states and developing nations with which we normally align ourselves are concerned that there should be a sensible law of the sea, one which would introduce a new world order. Unfortunately, the so-called shipping states were still maintaining an inflexible position and insisting that no progress ought to be made to bring in new shipping practices, particularly those which might extend to the transport of oil by tanker.
We should not lose sight of these considerations when we discuss our own immediate energy requirements and what can best be done to ensure a continuous supply of oil to the various regions of Canada. They are very much to the fore in the province in which I reside, principally because of the dangers inherent in the proposed tanker route from Alaska to the refinery complex at Cherry Point. When we asked the Secretary of State for External Affairs (Mr. Sharp) the other day when Canada intended to get its teeth into this matter, we were expressing a legitimate concern. It is a concern which is still genuinely felt in British Columbia even though there may be preoccupation at the moment with the oil export situation and the possible shortage of fuel.
I am sure the Secretary of State for External Affairs understood that my hon. friend from New Westminster (Mr. Leggatt) was not thinking in terms of a shooting war with the United States in a literal sense. But we do have a feeling that the hon. gentleman, as our spokesman in dealing with the other nations of the world, has soft-pedalled the issue a good deal. We recognize that it has been a fast-changing situation. Though we did put forward some half-hearted proposals about moving oil through Canada, they were rejected by the United States and it does appear now that a pipeline will be built across Alaska. The other day we were told by the Minister of Energy, Mines and Resources (Mr. Macdonald) that the United States did not react to a proposal that we offset the supply to the Cherry Point refinery from Canadian sources against a withdrawal of the idea of moving supplies in by tanker. And so it goes!
In the few minutes left to me I shall try to recognize my responsibility by suggesting to the Secretary of State for External Affairs the kind of "bullets" he might use. One proposal which has been put forward by members of my party is that a pollution control zone be established. This is one of the subjects to be considered by the conference on the Law of the Sea; it may or may not be written into an international code when the conference completes its discussion.
The other day I heard Canada's representative talking about the theory that international law is sometimes made by what he called state practice. This is, in effect, what we have been doing. We suggest to the government that one of our strongest weapons in dealing with the United States would be to take the same action off the Atlantic and Pacific coasts as we have taken off the Arctic where the exercise has been largely academic. We might not be able to enforce it but, as I have said before, at least we could enforce it with respect to any ships using a Canadian port. We could say; "Unless you comply with certain standards, you do not come in." If we were to take action of this kind, the United States would know we meant business and I
October 25, 1973

think they would be shamed into observing the appropriate standards in waters close to our coast.
Second, I believe, it would be a strong point in our favour if we were to take strict action in respect of tanker ports on our own eastern seaboard. There are certain very questionable projects under development there at the present time; no proper environmental assessment has been made in connection with the proposed tanker landings in the gulf or in the lower St. Lawrence. We must attend to matters of this kind if we wish to convince the United States that Canada means what it says when we express concern about the tanker route into Cherry Point.
There is a third consideration which relates particularly to the situation in the Strait of Juan de Fuca, Puget Sound and Georgia Strait. As far as I know, the suggestion I am putting forward now is being made for the first time. It is that we should say to the United States "If you insist on moving Alaskan oil to a refinery-


Mr. Deputy Speaker:: Order, please. I regret to interrupt the hon. member, but the time allotted to him under the special order made earlier today has expired. I would ask the House to give unanimous consent so that he may continue, but I would point out that two hon. members, the hon. member for Labelle (Mr. Dupras) and the hon. member for Red Deer (Mr. Towers) have indicated to the Chair that they wish to make a contribution to the debate.


Stanley Howard Knowles: Two minutes.


Mr. Deputy Speaker:: Is it agreed that the hon. member have further time in which to continue his remarks?


An hon. Member:: Five minutes.


Thomas Speakman Barnett: I will try to be brief. My hon. friend from Winnipeg North Centre (Mr. Knowles) says he will time me. I was about to say that the government might suggest to the United States that they look into the possibility of establishing a tanker port at the entrance to the Strait of Juan de Fuca between Port Angeles and Cape Flattery. There is a shipping terminal of sorts already. I believe an examination would show that if this were done, the environmental risks would be infinitely less than if tankers were moved through the inner waters, in which case, as oceanographers have well established, virtually all the pollution which might result from any spill would flow into Canadian waters. Perhaps I could find an opportunity of expanding on this subject at some future time.
When we talk about fighting the United States we are saying, basically, that Canada should take constructive and positive action to prove that we are not prepared to shut up until they are prepared to follow the example and the lead we have given.
[ Translation]


Mr. Maurice Dupras (Labelle):: Mr. Speaker, I wanted to take advantage of the consideration of the motion moved by the hon. member for Nanai'mo-Cowichan-The Islands (Mr. Douglas) who proposes an exchange of views on the crisis now experienced throughout the world concerning the supply of oil and, not unlike my colleague, the hon.
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member for Fort William (Mr. McRae), I regret that this motion-an excellent one-does not have greater scope.
I would have liked to see a supplementary measure included in it, one which would have, for instance, advocated establishing a research program to save the oil that we use now and also to develop new techniques for the recovery of oil from the tar sands of Athabasca Mr. Speaker, we might say that the energy crisis affects almost all industrialized nations. Because, as Canadians, we have been told every Saturday night over a great many years to put a tiger in our tank, we are somewhat under the impression that our natural resources in Canada are inexhaustible and, as the hon. member for Comox-Alberni (Mr. Barnett) stated a moment ago, we are inclined to take them for granted and believe that we shall forever be able to obtain these commodities easily and cheaply.
We have indeed the reputation of being the granary of the world and we certainly fulfil this function well. We have accepted the responsibilities which this function imparts; thus, we are under the obligation to keep important supplies of wheat and grain in order to live up to our reputation as the granary of the world.
Nevertheless, we realize that those great resources, those non-renewable natural resources can run out and we have a rather hard proof of that to accept in the new policy adopted by OPEC oil-producing member countries as well as the conflict in the Middle East that is partly responsible for the difficulties we know.
It was said this afternoon that Canada lacked an energy policy and that this government or others before are partly to blame if we are now faced with such a situation. I say that as early as 1961 our country adopted an energy policy that ensured at least that western production would be sold on an interesting market in western United States and the east, that, is east of the Borden line, would be supplied by the Middle East as well as Venezuela.
There is no doubt, Mr. Speaker, that it was a policy that suited us because, as was indicated by the Minister of Energy, Mines and Resources (M. Macdonald) this afternoon, we get top price for our oil from the United States, and we had a more viable market east of the Borden line which was more economical than bringing in western oil. On the other hand, as I indicated earlier, there were changes because of that new policy on the part of OPEC member countries as well as the conflict going on in the Middle East.
Surely there will be ways of levelling out those difficulties that we will meet and there is already talk about eventually rationing oil and gas although Canada produces enough petroleum and oil to meet domestic needs.
Before I enter the core of the subject I want to discuss, Mr. Speaker, I would like to talk about the production in the different provinces. Of course, the biggest producers of that natural resource is Alberta. I hope people of Alberta will not be offended when I talk about our natural resources; I think they accept the fact that those resources belong to the whole nation. Alberta produces 1,493,000 barrels of oil a day; Saskatchewan, 239,000; British Columbia, 61,000; Manitoba, 14,000; the Northwest Territories, 3,200, and eastern Canada, that is the region east of

October 25, 1973
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the Borden line, which includes the province of Quebec and the Atlantic provinces, 2,223.
What I want to point out, Mr. Speaker, is the lack of oil products in eastern Canada. As you know, there will soon be a provincial election in the province of Quebec, which I represent and from which I come, and a political party which is as marginal as they come has chosen for its mission to separate Quebec from the rest of the Confederation. I would like to draw your attention to the vulnerability of Quebec if one day-and I wish that this will not happen-it opted for separation. I would like my compatriots to be conscious of this danger and of the difficulties which Quebec would have to obtain supplies, particularly oil, especially in view of the climate which we have in Quebec, as in the rest of eastern Canada.
At this time, the province of Quebec needs at least
500,000	barrels of oil a day. These 500,000 barrels come from the Middle East and 25 per cent come from Venezuela.
What would happen if the province were isolated as a few of my compatriots wish and had to negotiate agreements with Middle East countries or Venezuela without the support of the natural resources which we have in Canada and which can be useful in such negotiations. Mr. Speaker, there is only one point that has me worried when I see the irresponsibility of those who want to lead the people of the province of Quebec down this dead-end avenue which would be a policy of independence. This will not happen fortunately, and we have found means to solve difficulties brought about by an oil shortage.
The minister told me this afternoon that during November, 10 per cent of supplies to the province of Quebec will be assured by tankers on the St. Lawrence Seaway.
I think, Mr. Speaker, that I do not have to insist further on the problems facing the government of a poor country with six million people, an island in an industrial sea, if it were told: Now that you have taken the chance and went the way of separation, find your own oil and leave us in peace. I think that our population is sensible enough not to fall for it. I will not press the point, Mr. Speaker, but I wish to bring out the stupidity-and I restrain myself with difficulty-the stupidity, as I was saying, of some of my fellow countrymen who discuss the chances of survival of a country with six million people that must, for example, import 80 per cent of its food and 100 percent of its fuel oil.
These are some of the points that I wanted to emphasize during the few minutes I have contributed to this debate which has enabled us to study the motion presented by my good friend, the hon. member for Nanaimo-Cowichan-The Islands, and which it gives me pleasure to support.


Mr. Gordon Towers (Red Deer):: Mr. Speaker, I am indeed honoured to have the opportunity of closing this debate, a debate of fundamental importance to all Canadians. There have been charges made today and politics has been played, but the time has now come when Canada can no longer afford to have politics involved in an issue as

vitally important to Canadians as the issue before us at this time.
A minister of this government has fouled up Albertans twice within the last three or four months. I suggest you will find no better Canadians in Canada than you will find in Alberta, but they will not be fouled up continuously. As soon as the Minister of Energy, Mines and Resources (Mr. Macdonald) and this federal government recognize this fact, the better off Canada and Canadians will be.
A series of meetings are scheduled to commence at the beginning of next week at which provincial representatives will meet with the minister. This minister should realize that the Premier of Alberta is an ex football player. He has the ball, he is running and he does not intend to lose it. This does not mean he will not play ball with the federal government if it will play ball with him.


An hon. Member:: He has been playing without his helmet for too long.


Thomas Gordon Towers: In spite of all the charges made here today, there has been no recognition of the fact that the government of the province of Alberta has increased royalties from the base of 16 per cent when it took office to 22 per cent at the present time. These royalties will continue to increase, and this is one of the things this government must recognize. The government of Alberta has a responsibility to the people living there, and it will look after its residents. The federal government had better realize that fact. I encourage the minister to be honest and straightforward. When we are talking about Syncrude we are talking about 4 per cent of the potential of the Athabasca oil sands.
When the hon. member for Nanaimo-Cowichan-The Islands (Mr. Douglas) was premier of the province of Saskatchewan, he had an opportunity to do something about the development of these resources. Successive NDP governments have had the same opportunity, but little have they done. Now when there is a movement taking place which will be of importance to Canada, everybody is crying "foul". I suggest that the smartest thing this government of Canada could do at the moment is allow Syncrude to go ahead in developing this 4 per cent potential of the Athabasca oil sands, allowing the industry to do something to counteract the effects of Mid-East oil cutbacks.
It has been suggested that present Alberta oil reserves will be depleted in a number of years. I suggest this is true unless new development takes place. We must recognize this fact and develop the alternatives. If we are left to the discretion of Mid-East countries, I say "God help us all" because we will certainly be paying much more for the oil used in this great dominion. That is why it is so fundamental for the minister at the present time to make no further mistakes when engaged in discussions with members of the Alberta government.
Syncrude is not to be a foreign company. Some 98 per cent of the personnel of Syncrude will be Canadian. The president and the vice-president of the organization are Canadians. One vital fact-this is something that the NDP have forgotten-is the technology required to develop this potential resource. We now have to go to England and
October 25, 1973

Germany in order to obtain the expertise to carry forward the Syncrude project with the maximum benefit to Canadians. We must be very careful and use a great deal of discretion in developing this industry in Alberta.
There is no reason in the world for the hon. member for Waterloo-Cambridge (Mr. Saltsman) to suggest that Albertans are against Ontario or any other province in this great Dominion of Canada. They are good and compassionate people, but they certainly will not be shoved around. I entreat the minister to use every means at his disposal to deal in a compatible way with members of the Alberta government when he meets with them in the forthcoming week, in order that Canada and Canadians will be the benefactors.


Mr. Speaker:: 

[Stage Direction]
A motion to adjourn the House under Standing Order 40 deemed to have been moved.

Mr. Jack Marshall (Humber-St. George's-St. Barbe):: Mr. Speaker, in looking across the chamber I miss the Minister of Veterans Affairs (Mr. MacDonald). However, I rise to express dissatisfaction with the answers I received from him on questioning him in the House this week about the serious problem which has arisen as the result of the slowdown by nurses in federal employ during their protest against a recent arbitration award.
My question had to do with the specific problems of nurses in veterans affairs' hospitals across the country and the fact that this particularly dedicated group, as are their colleagues in the over-all federal employ, is receiving less pay than their provincial counterparts. As a matter of fact, the variation in pay runs from around $500 in some provinces to over $1,400 in others.
I do not want to be presumptuous by varying from the particular question I am debating tonight, but the protest does take in a wide range of federal nurse employees. I was really surprised when, on questioning the minister as to the effects of the slowdown on the care of veterans, he replied that from information he had received the patients were receiving good care, morale is good and the nurses are doing a good job. I agree with some parts of that statement. Of course the nurses are doing a good job, and will continue to be so because of the needs of veterans, particularly those under chronic and domiciliary care. But when he says that morale is high, he is not aware of the facts-although he should be.
Surely the minister gets more representation than members of parliament, certainly more than opposition mem-
Adjournment Debate
bers. Surely that section of his department which has responsibility for treatment services must keep him advised of what is going on in veterans' hospitals. I know for a fact that the minister is dedicated to the cause of veterans, but he is being less than sincere when he tries to tell this House that morale is high in veterans' hospitals.
I suggest this problem will get worse and worse and that if his government insists on discriminating against various regions of the country and against federal employees in respect of federal pay, the morale will get so bad it will be impossible to recruit new staff. Surely this government, which pledges equality for all Canadians wherever they may live, should realize that nurses in every province are doing the same type of work and should be considered equal. Surely, too, the patients in hospitals are as sick in one part of the country as they are in another, and deserve equal professional nursing care.
Evidently the minister is not being told the facts, as there is no doubt he is telling the story which he is being told by his department, unless the fact is that he is not being told the facts as they exist. If this is the case, I suggest to the minister that he should call in some groups of nurses similar to the group with which I met just a few hours ago. I further suggest that he get his officials from treatment services, who sit as advisers on the Treasury Board committee on pay matters, to get off their butts and visit the veterans' hospitals and talk to the nurses about their problems.
Is he not aware of the fact that in one province, Nova Scotia, one of the poorest provinces, the discrepancy in pay is over $500, and that that province is paying its provincial nurses more than their federal counterparts? Is he not aware, Mr. Speaker, either that the treatment requirement per 50 patients is one head nurse, four regular nurses, three registered nursing assistants and six orderlies per shift, and in at least two of the hospitals from which I have had representation the same shift for 50 patients is being handled by one regular nurse, one assistant and one orderly? Does this fact and the overburden when three do the work of 18 and have to care for 50 patients not prove that morale must be low? I have two examples to prove that morale must be low. The first is a telegram from the nursing subgroup, Victoria veterans hospital, to the nursing group of the professional institute. It reads:
Unanimous decision by nursing subgroup Victoria veterans hospital that we ask immediate 10 per cent cost of living bonus for years 1972, 1973 and 1974. We strongly urge that all groups support this decision please reply.
Next I should like to quote a couple of paragraphs of a representation sent to the Minister of National Defence (Mr. Richardson) from the provincial staff nurses' council. This points out the situation. It reads as follows:
The arbitration award will only serve to perpetuate and worsen the present problems encountered at Deer Lodge regarding maintaining a safe level of professional nursing care. Only the new graduates or the nurse who has worked at Deer Lodge for one year will receive a salary that compares favourably with that which can be earned elsewhere.
The problem is the application of the salary scale as much, if not more than, the actual amount of the salary. The hospital cannot now attract experienced registered nurses because of salary rates

October 25, 1973
Adjournment Debate
that are well below that paid by other hospitals in the same city. The registered nurses with anything less than six years of previous experience will be starting at an annual rate of $7,303 at Deer Lodge. At other city hospitals a nurse with one year's experience starts at $7,500; with two or two and one-half year's experience at $7,800; with three or four year's experience at $8,100. Many hospitals also grant additional increments on the basis of performance. Deer Lodge does not.
The few new graduates that are attracted at Deer Lodge do not remain long because of the lack of experienced nurses making it necessary for these nurses to have to assume too great a responsibility too soon.
Nurses actually lose money by remaining at Deer Lodge. The amount of annual increments is less than $20 per month-so much below what other hospitals pay that nurses are not inclined to remain long at Deer Lodge.
I think the matter may be summed up in this way. In the motto of that particular nursing group it is said that to care for nurses is to care for patients. I ask the minister, or whoever replies, not to say that morale is high. He should not mislead the House. I respectfully request a proper answer to this problem.


Mr. Mark MacGuigan (Parliamentary Secretary to Minister of Manpower and Immigration):: Mr. Speaker, under the terms of the Staff Relations Act under which the nurses bargain for their terms and conditions of employment, they have a right to choose which method of dispute settlement they wish to use from either of two alternatives: first, conciliation or, second, binding arbitration. In this instance the nursing group chose binding arbitration.
The arbitration award was rendered by the arbitration tribunal under the chairmanship of Justice Rene Lippe on October 16. It was apparent that the award of the tribunal was not satisfactory to the nurses, many of whom refused to come to work on October 22 through October 25. The largest number of nurses who withdrew their services was 219, on October 24, but the majority have returned to work and as of today only 24 are still absent. We can assure the House that no major inconvenience has been experienced by the patients under the care of the federal nurses.
The officers of Treasury Board are already making arrangements for the nurses to receive the retroactive pay cheques, and we hope that these will be issued shortly.


EXTERNAL AFFAIRS-CHILE-POSSIBLE EXTENSION OF CREDIT TO MILITARY GOVERNMENT-ALLEGED DENIAL TO ALLENDE GOVERNMENT
Mr. John Harney (Scarborough West):: Mr. Speaker, a few days ago in this House I rose to ask a question of the Secretary of State for External Affairs (Mr. Sharp) with regard to Canada's credits to Chile. I asked what had affected Canada's policy, with the result that it had effectively cut off credits to Chile. I was answered with the very short, terse and rather testy reply to the effect that Canada had not cut off its loans to Chile but had approved as late as April, 1973, a $5 million loan for the purchase of aircraft and telecommunications equipment. My further question was to the effect that the House would appreciate having a very thorough accounting of Canada's performance in terms of credits to Chile over the past three years. I rise tonight to pursue this question and to give an
(Mr. Marshall.]
indication of what kind of accounting the House should have.
We all know the extremely tragic events that occurred in that country in September of this year. Many Canadians, many of whom do not support the socialist conviction, felt very bitter about those events because the duly elected democratic government of Chile was overthrown in a bloody coup. Of course, we in Canada can take some satisfaction that we were not involved in any way, and I am suggesting that we did nothing to bring the coup about. But sometimes in international events it is not simply what we do but what we fail to do that counts.
If we go back over the record of Canada's loans to Chile in the 1960s we find a very good performance indeed. Through the Export Development Corporation, Canada advanced some $24.6 million, a not inconsiderable sum. And through the Canadian International Development Agency, Canada advanced loans, here through the agency of the Bank for International Development, amounting to $8.6 million. These loans date back to 1968.
But in the 1970s our performance was minimal. For example, the only new CIDA money was an agreement to advance some $87,000 in 1972. It is important to realize that Chile's performance in repaying these loans had been excellent over the years. We had lent them, through the EDC, some $24.6 million and they returned $12.3 million over the years, an excellent performance by any standard and a performance which should have assured us of Chile's continuing intention to honour its obligations.
At the end of the 1960s and the beginning of the seventies we found our loan pattern shifting to other countries that we perhaps considered safer bets. As our performance vis-a-vis Chile went down practically to zero, we began to lend substantial sums of money to such countries as Brazil, countries which have governments that, without doing injustice to the term, are right-wing.
It is fine to be told in this House that we did advance a loan in 1973 of $5'million, but the fact is that this loan has not been made. What happened in April, 1973, was that the board of the development corporation approved continuing negotiations on that loan. That loan has never been signed. But it is not what happened then that is so important as what failed to happen before that. In effect, in the year 1972 Canada participated in the international credit squeeze on Chile. There is no doubt that there was an international credit squeeze. Let me read for a few moments from a speech made by Dr. Allende to the United Nations on December 4, 1972. He said:
It should be stressed that in the years immediately preceding nationalization the large copper companies initiated expansion plans. However, those plans-which were unsuccessful for the most part-were not financed from their own resources, despite their huge profits, but by means of external credits. In accordance with legislative provisions, Chile has had to take over responsibility for those debts, which amount to the enormous sum of more than $727 million. We have begun to pay those debts, including one which one of those enterprises had contracted with Kennecott, its own parent company in the United States.
The international community turned on Chile, Mr. Speaker, and we went along with them. We put our credits to Chile under review. That is to say, we forwarded no
October 25, 1973

new credits-and Chile absolutely needed these to survive. It is not good enough to say that we did not do anything; it was the very fact that we did not do anything which hurt the economy of Chile. Of course, the EDC took part through its own chief officer in the Canadian delegation that went to the Paris Club meeting in the fall of 1972 at which time the credits to Chile were reviewed and Canada agreed to roll back some of these credits.
In concluding, Mr. Speaker, I would like to know, as well, what Canada's role was in the Latin American Development Bank and the World Bank during that period.


Mark R. MacGuigan: Mr. Speaker, I am pleased to have the opportunity of setting the record straight on the Export Development Corporation in Chile, especially in view of the unworthy suggestion made by the hon. member for Scarborough West (Mr. Harney) that Canada participated in the international credit squeeze on Chile. Just as the Export Development Corporation has performed its function of facilitating trade with capitalist countries and with eastern European countries and China, it continued to do so in Chile. The only change in pattern which occurred, arose because the election of the Allende party in Chile and the subsequent election of the late Dr. Allende as president in 1970, coincided with grave domestic and external financial problems for that country.
Hon. members will appreciate that EDC is not a giveaway corporation. It exists to facilitate trade-and trade means getting paid on the due date. Bad debts and slow payments do not help the balance of trade. Nevertheless, during this period of difficulty for Chile, applications for insurance were reviewed on a case by case basis. Where there was a reasonable prospect of payment, the EDC insured. Such prospects existed for sales made on shortterm credit, that is, credit up to 180 days. The case by case review of applications for support for sales to that country resulted in continued approvals of insurance for such supplier credits.
In the Paris Club talks for rescheduling of Chilean debts, the EDC and Canada played a leading role in helping to solve Chile's problems. It promoted the 1972 rescheduling of 70 per cent of the debt. In its financing to buyers of capital goods normally sold on credit terms longer than five years, EDC took advantage of the trade opportunity. It approved on April 11, 1973, the $5 million loan to which the Secretary of State for External Affairs (Mr. Sharp) alluded in the House. In July, 1973, it agreed to guarantee a $2 million loan to Chile proposed by a consortium of Canadian banks. This was at a time when only one or two other countries in the world were prepared to grant credits to Chile.
Negotiations to settle with the Allende government the details of the loan, such as agreement on the documents, continued through the months that followed. These arrangements were largely complete when the coup of September, 1973, occurred. During the uncertain days that followed, EDC had no one to deal with. When the junta was recognized and when it expressed itself as bound by existing and future debt obligations, the case by case review policy for insurance approvals was resumed by
Adjournment Debate
EDC. Presumably, the junta will soon ask to have the Allende government's loan arrangements implemented.


URBAN AFFAIRS-POSITION OF MINISTER AT TRILEVEL CONFERENCE ON POSSIBILITY OF MUNICIPALITIES RECEIVING SHARE OF FEDERAL REVENUES
Mr. Douglas Roche (Edmonton-Strathcona):: Mr. Speaker, I wish to thank the Minister of State for Urban Affairs (Mr. Basford) for making it possible for parliamentary observers to attend the national trilevel intergovernmental meeting this week in Edmonton. I ask the government to maintain the principle of having parliamentary observers at all important meetings which are not strictly closed.
The Edmonton conference dealt with the super problem of urbanization and how to manage our urban growth. The rate of urbanization is nothing short of phenomenal. Before the end of this century, 94 per cent of Canadians will be urbanized and three-quarters will live in 12 major centres. The special problems of urbanization-public assistance, transportation, environmental management, leisure, recreation and housing-interact on one another and demand more money which municipalities have no way of raising.
Municipalities are becoming more and more dependent upon provincial and federal government grants. The quality of life issues are faced most directly by the municipalities because the problems are right on their doorstep. Yet the municipalities have little or no influence on provincial or federal decision-making. Complexity and fragmentation of government has resulted as we live within the confines of a constitution written at a time when the social problems of urbanization were never dreamed of. The joint Senate-Commons Committee on the Constitution found a possible solution to meet the municipalities' demands for restructuring of revenue-generating capacity. Recommendation No. 67 of the joint committee's report reads:
In the light of the injustice done municipalities by their having to rely on the property tax for the bulk of their revenue, there should be a sharing of tax fields between governments that would allow municipalities direct access to other sources or revenue.
The key to the trilevel conference in Edmonton was the attempt by the 4,500 municipalities represented to have a task force set up that would consolidate all information about public finance and "develop feasible options for implementation of the concept of local revenue-sharing in Canada." That proposal was strongly supported by the governments of Ontario and Alberta. But it was blocked by the intransigence of the Minister of State for Urban Affairs who was clearly expressing the refusal of the federal government to even study this difficult and crucial question. The minister even threatened the municipalities that if they persisted with their request for a task force to study tax-sharing, it would wreck the trilevel process. Because trilevel meetings are still in their early stages, and because such hope is held out for them as a way to clear a path for modern, urbanized society through the jungle of government in this country, the municipalities accepted a compromise.

October 25, 1973
Adjournment Debate
This compromise was foisted on them by the minister who proposed a task force to study public finance, period. If ever there was a "big daddy" slapping down an adolescent son, it was the Minister of State for Urban Affairs. He gave the municipalities a lecture about how generous the federal government is in grants for land assembly, sewage treatment and rail relocation. But this was a diversionary tactic because he refused to consider the possibility that the municipalities know best their own needs and should have a way of meeting those needs without having to come to Ottawa with their hand out.
The municipalities, Mr. Speaker, are not proposing higher taxes for Canadians. What they are proposing is better value from the tax revenues now available. The urban governments want to share in the management of growth in Canada. All they can do now is react to and cope with problems. The federal government maintains that its programs should have a higher priority than local needs. Is this actually justified in the national interest?
Last Sunday I went through the new Mill Woods development in Edmonton, a typical example of urbanized Canada. I saw the need for physical and social services. The school board has a sign warning prospective home buyers that no school will be built in the foreseeable future. Are the hundreds of millions of dollars Ottawa spends on unemployment insurance, Information Canada, LIP and OFY projects really more necessary in the national interest than better services in Mill Woods? These are the problems the federal government will not even study, and in this refusal shows its continuing arrogance.
By 1976, Mr. Speaker, government at all levels will be spending more than 50 per cent of the gross national product. This is too much government. They must get together to manage growth. Mayor Ivor Dent of Edmonton has expressed the reason cogently in these words:
Senior levels of government must accept the principle that funds can be transferred unconditionally to municipalities and in so doing they can transfer responsibility as well and make municipalities accountable to the people of this nation for its use. The time for revenue sharing is now. Municipalities must be given a greater share in the resources of this nation by way of an allocation of the personal and corporate income tax. It is only reasonable that municipalities should share in a revenue directly related to the economic growth of Canada and one that properly reflects the taxpayers' "ability to pay."
The federal government used the tri-level meeting as a showcase for announcements of new programs. It did the same thing at the Western Economic Opportunities conference in Calgary last July. It is time Ottawa started cooperating with the rest of the country, instead of dominating it. A study of tax-sharing would at least be a start.


Mark R. MacGuigan: Mr. Speaker, the Edmonton tri-level conference, on the recommendation of the co-chairmen, reached a consensus in favour of the following proposal, on the understanding that delegations would submit it to their governments for consideration and report back to the co-chairmen by December 31 of this year. The proposal of the co-chairmen was to appoint an independent task force under their direction to carry out an in-depth analysis of the present state of public finance in Canada, with special reference to local government finance.
Its primary focus is to include, first, the development of a common data base with respect to the comparative revenue and expenditure flows at each level of government and recent and emerging trends, including such geographic and functional breakdowns as are found to be relevant and necessary for the analysis; secondly, detailed fiscal relationships, interdependencies and financial flows between the three levels of government; and finally, specific revenue and expenditure data for selected units of local government as are considered relevant and necessary in each province. The task force will report to the 1974 tri-level conference.
The Minister of State for Urban Affairs (Mr. Basford), who I think it is fair to say was interested in making progress and preserving the tri-level process rather than in long and frustrating debate, took a position of leadership, and was instrumental in the development of a consensus position which will allow for a sensible solution to the matter.
I was pleased to note that the hon. member for Edmon-ton-Strathcona (Mr. Roche) referred to the report of the Special Joint Committee on the Constitution of Canada. As the former joint chairman' of that committee, I was pleased he referred to our recommendation No. 67. He might also have referred to our discussion on page 59 in which we said that on balance we did not favour the approach of a specific and guaranteed percentage of income tax.
What the committee actually had in mind was that the provinces should declare themselves willing to allocate on a more or less permanent basis to their municipalities a specified share of tax, especially the income tax. In other words, the federal government would pay to the municipalities directly but only on the agreement of the province that part of its share should be so allocated.
Motion agreed to and the House adjourned at 10.24 p.m.

Friday, October 26, 1973