1974-04-08

ROUTINE PROCEEDINGS


[Stage Direction]
First report of Standing Committee on Health, Welfare and Social Affairs, in both official languages-Mr. Isabelle.
[Editor's Note: For text of above report, see today's Votes and Proceedings.]

Mr. John Reynolds (Burnaby-Richmond-Delta):: Mr. Speaker, I rise under the provisions of Standing Order 43 on a matter of urgent and pressing necessity, namely, that the closing of all airports in British Columbia due to the strike by the firefighters is having serious ramifications for the economic and transport sectors of Canada. I therefore move, seconded by the hon. member for Prince George-Peace River (Mr. Oberle):
That the House instruct the Minister of Transport or the President of Treasury Board or their senior officials to travel to Vancouver to meet with the firefighters with a view to settling their grievances.


Mr. Speaker:: The hon. member's motion is proposed under the terms of Standing Order 43 and requires the unanimous consent of the House. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


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


BRITISH COLUMBIA-DISRUPTION OF SERVICE BY AIRPORT FIREFIGHTERS' STRIKE-REQUEST FOR UNANIMOUS CONSENT TO MOVE MOTION
Mr. F. Oberle (Prince George-Peace River):: Mr. Speaker, my motion is similar to that moved by my hon. friend. It touches a matter of urgent and pressing necessity. I will try a somewhat different approach. Since aircraft service to central and northern British Columbia has become a
lifeline indispensable to health and social services, industry and commerce, and since this service has been totally disrupted by an illegal strike of emergency service employees at all airports in British Columbia, I move, seconded by the hon. member for Burnaby-Richmond-Delta (Mr. Reynolds):
That the government take the necessary steps to utilize manpower and, if necessary, equipment maintained by the Armed Forces to firstly allow for time for immediate and meaningful negotiations and to immediately restore services.


Mr. Speaker:: Again, this motion is proposed under the terms of Standing Order 43. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


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


AGRICULTURE
Mr. Adrien Lambert (Bellechasse):: Mr. Speaker, under Standing Order 43, I ask the unanimous consent of the House to raise a matter of urgent and pressing necessity.
I move, seconded by the hon. member for Drummond (Mr. Boisvert):
That this House study without delay the financial difficulties experienced by eastern pork producers as a result of profit losses because of lower pork prices and the constant increase in the cost of feed, and that immediate solutions be found that this group of producers be better protected.


Mr. Speaker:: The House has heard the motion of the hon. member. Under Standing Order 43, this motion requires unanimous consent of the House. Is there unanimous consent?


Some hon. Members:: Yes.


Some hon. Members:: No.


Mr. Speaker:: There is not unanimous consent; therefore, the motion cannot be put.

April 8, 1974
Industrial Research and Development


REGIONAL DEVELOPMENT INCENTIVES ACT
Mr. Bill Knight (Assiniboia) moved: for leave to introduce Bill C-274, to amend the Regional Development Incentives Act.


Some hon. Members:: Explain.


William George Knight: Mr. Speaker, the purpose of this bill is to ensure that applicants for federal grants under the Regional Development Incentives Act use accurate information and data which are subject to public scrutiny. This arises out of the fact that several grants, for example, in the Lanark region, have been misused in the past.


Mr. Speaker:: Order, please.


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

William George Knight: for leave to introduce Bill C-275, to amend the Regional Development Incentives Act.


Some hon. Members:: Explain.


William George Knight: Mr. Speaker, the purpose of this bill is to ensure that the effectiveness of disbursements from the public purse is properly evaluated, and that improvements in the grants system can be made promptly on the basis of such evaluation.


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

William George Knight: for leave to introduce Bill C-276, to amend the Industrial Research and Development Incentives Act.


Mr. Speaker:: Does the hon. member wish to explain the bill?


William George Knight: Yes, Mr. Speaker. I apologize for taking the time of the House, but in view of the importance of the bill I do wish to explain it. The purpose of the bill is to require the Minister of Industry, Trade and Commerce (Mr. Gillespie) to make monthly reports on the operation of the Industrial Research and Development Incentives Act, indicating the names of the companies and the amounts of the grants, in the same way that the Minister of Regional Economic Expansion (Mr. Jamieson) is supposed to make

reports under section 16 of the Regional Development Incentives Act.


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

Hon. Alastair Gillespie (Minister of Industry, Trade and Commerce) moved: for leave to introduce Bill C-20, to incorporate the Federal Business Development Bank.


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

[Stage Direction]
On the Order: Government Notices of Motions April 5, 1974-The President of the Privy Council:
That the Green Paper entitled "Members of Parliament and Conflict of Interest" be referred to the Standing Committee on Justice and Legal Affairs.
Mr. Speaker:: The notice of motion is transferred to and ordered for consideration under government orders at the next sitting of the House, pursuant to the provisions of Standing Order 21(2).


QUESTIONS ON THE ORDER PAPER
[Stage Direction]
(Questions answered orally are indicated by an asterisk.)
Mr. Baker: 1.	How many officers or employees of Public Service unions have taken or are taking language training at the Public Service Commission Language Training Centre?
2.	What priority are they given?
3.	What is the cost involved and who is paying for the training?
4.	What are the names of the individuals and, if they are on leave of absence from the Public Service, on what date did each one commence leave?


Hon. James Hugh Faulkner (Secretary of State):: I am informed by the Public Service Commission as follows: 1. Nine.
2.	Not applicable.

3.	The union representatives were fitted into existing courses without charge.
4.	Public Service Alliance Officers:
Presently on course:
Previously on course:
Name
William E. Brassington Kenneth R. Fraser Andrew I. Stewart
Albert H. Bond *T. J. Dooling C. A. Edwards *Lloyd A. Fucile **T. F. Gough *"Roy S. West
On leave from
January 30, 1967 April 3, 1962 April 1, 1967
June 19, 1956 October 1, 1962 1945
February,1973 to
December, 1973
* Took language training while in department. ** Retired August 1970.
***Has since resigned from Public Service.


Mr. Cossitt: 1.	What are the names and addresses of all advertising agencies used by the Department of Manpower and Immigration since the present Minister assumed his portfolio?
2.	(a) What are the amounts of all advertising contracts given such agencies during this period of time, what are the dates such contracts were awarded and in each case, were tenders or competitive presentations of any kind requested and, if not, who authorized in each case the expenditure of public funds without such tenders or competitive presentations (b) in each case, what was the general subject matter of the advertising contract?
3.	What are the names and addresses of all advertising agencies used by the Department of Manpower and Immigration during the term of the Minister's immediate predecessor and if any of these agencies has not been used since then, for what reason and on whose decision were changes made?


Hon. Robert K. Andras (Minister of Manpower and Immigration):: 1. Vickers & Benson Ltd., 980 Yonge Street, Toronto, Ontario, M4W 2J8.
2.	(a) Vickers & Benson, $270,785.42-Jan. 11, 1973; Vickers & Benson, $1,038,110.41-Aug. 2, 1973; Vickers & Benson, $426,677.05-Sept. 12, 1973. Tenders or competitive presentations were not requested. Authorization for these expenditures without tender or competitive presentations was given by Treasury Board on recommendation of the Department, (b) Summer Student Employment Program, Immigration Adjustment of Status Program, Local Initiatives Program.
3.	(a) Vickers & Benson Ltd., 980 Yonge Street, Toronto, Ontario, (b) Gordon Hill Advertising, 1470 Place du Canada, Montreal, P.Q. (c) Omnicom Advertising Agency, 1110 Sherbrooke W., Montreal, P.Q. The minister decided not to use two of the advertising agencies mentioned above in order to reduce the amount of time required by departmental officials in briefing the different agencies on current activities and new policies of the department.
Order Paper Questions


Mr. Hees: Does the statement of the Minister of National Defence to the Association of Canadian Defence Associations, reported in Newspapers on January 18, 1974 to the effect that there will be an increase in pay for the Reserves, mean that there will be an increase in the establishments for units or the total pay available to units so as to provide (a) more pay for fewer soldiers (b) more pay for the same number of soldiers (c) more pay for more soldiers?


Hon. James Richardson (Minister of National Defence):: The announced increase in pay is an increase in the rate of pay for reservists individually, and bears no relationship to the current or future size of the reserve forces.


Mr. Gleave: 1.	How many rail cars of a type used for carrying grain have been scrapped by the Canadian Pacific Railway during (a) the past 12 months (b) the previous 12 months?
2.	How many rail cars capable of being repaired to carry grain have been scrapped by the Canadian Pacific Railway during (a) the past 12 months (b) the previous 12 months?


Mr. Joseph-Philippe Guay (Parliamentary Secretary to Minister of Transport):: The Canadian Transport Commission advises as follows: 1. (a) For the calendar year 1973, 1253 cars, (b) For the calendar year 1972, 1228 cars.
2.	(a) and (b) In the Judgment of the railway, none. The practice of the railway is to inspect the condition of every car, and the decision to scrap a car is taken on the basis of the economic feasibility of repairing it.


Mr. Stevens: Docs the government have a strategy to deal with widespread commodity and materials shortages within Canada which threaten the nation's growth potential for 1974 and, if so, what is the strategy?


Mr. John M. Reid (Parliamentary Secretary to President of the Privy Council):: In so far as the Department of Energy, Mines and Resources is concerned: Canada moves into the year 1974 after a year of extraordinary high real growth. The world economy, including Canada, has enjoyed three decades of extremely rapid growth by historical standards. Both in a short and rather longerterm sense it is not, therefore, surprising that evidence of specific commodity and material shortages would form a part of the problem of economic management. The tightness of world supply of some commodities and materials has, of course, been exacerbated by the recent major disruptions in petroleum supply. It is anticipated that both material and demand shortages outside of Canada will have a larger influence on Canadian real growth in 1974 than any internal shortages. The government is, however, examining intensively the possibility of strategic shortages particularly in the context of staging major Canadian capital developments over the next decade in a manner which will lead to sustainable growth and minimal dislocation. In so far as the Department of Industry, Trade and Commerce is concerned: Officials of the Department of Industry, Trade

April 8, 1974
Order Paper Questions
and Commerce are fully aware of current and developing situations to do with widespread commodity and materials shortages within Canada. These situations are examined and reviewed regularly on a commodity basis, and options are considered at a time when shortages or future shortages become apparent. The specific action depends on the nature of the commodity and the related industry characteristics. The government is prepared to take whatever steps are required to ensure that Canadians do not suffer unduly as a result of material shortages. In so far as the Department of Agriculture is concerned: The government strategy with respect to ensuring adequate commodity and material supplies was outlined in the throne speech.


Mr. Gauthier (Ottawa-Vanier): L What is the annual budget of the Canadian Film Development Corporation?
2.	What part of the budget comes from federal subsidies?
3.	Do contracts between the Canadian Film Development Corporation and distributing companies include certain clauses to guarantee the distribution of films financed entirely or in part by the Corporation to minority official language groups which, through provincial cultural bodies or local film clubs, would want to rent films from the distributing agency and (a) if so, what clauses apply between the Canadian Film Development Corporation, France Films and Cinepix of Toronto for the film "Kamouraska" (b) if not, does the Corporation intend to provide clauses in its contracts to guarantee to minority official language groups their right to obtain, in the language of their choice, films financed by the Corporation at reasonable prices and, if not, for what reason?


James Hugh Faulkner: I am
informed by the Canadian Film Development Corporation as follows: 1. The 1973-74 budget of the corporation is $3.9 million (including administration) representing its share of a total feature film budget of $9.75 million.
2.	$3.3 million derives from an appropriation authorized under section 18 (1) of the CFDC Act. $600,000 comes from returns on the corporation's investments and loans.
3.	No. Contracts now existing between the producers assisted by the corporation and Canadian distributors stipulate that the distributors must use their best efforts to distribute the films as widely as possible and under the best possible terms to maximize the revenues for the CFDC and other investors. Provincial cultural bodies and local film clubs have access through such distributors to all CFDC-financed films, (a) See above, (b) No. The corporation is of the opinion that under existing arrangements distributors can and do provide films partially financed by the corporation to minority official language groups, without undue delay and on the best possible terms.


Mr. Reynolds: 1.	What was the cost of the new reservations computer installed by Air Canada?
2.	Do companies other than Air Canada use the computer and, if so, which ones?


Joseph-Phillippe Guay: The management of Air Canada advises as follows: 1. In 1973 Air Canada spent approximately $1.1 million on new computer equipment for its ReserVec II reservations system. Of this amount, $1 million was for capital expenditures for new mass storage and high speed storage units; $100,000 represented the rental of a third UNIVAC 1108 processor.
2.	Other companies using Air Canada's ReserVec II system as of March 1, 1974 were Pacific Western Airlines and Air Jamaica.
3.	Average use is as follows: (a) Air Canada, 90, 94 percent; (b) Others, 10, 6 percent; (c) None.


Mr. Nystrom: 1.	For the fiscal years 1971-72 and 1972-73 what amount of the total expenditures for the Department of Industry, Trade and Commerce were spent (a) outside of Canada (b) within Canada (c) in each of the 10 provinces, the Yukon and Northwest Territories?
2.	(a) What was the total number of employees in the Department of Industry, Trade and Commerce as of March 31, 1973 (b) how many of those employees would be considered employees of the headquarters and are employed on the (i) Quebec side of the national capital (ii) Ontario side of the national capital (c) how many employees does the Department have in each of the 10 provinces, the Yukon and Northwest Territories?


Mr. Raynald Guay (Parliamentary Secretary to Minister of Industry, Trade and Commerce):: (In Thousands of Dollars)
1971/72	1972/73
Total expenditures outside Canada	178	142Total expenditures within Canada Total expenditures by Province:	235,692	285,253Newfoundland	-	1,319Nova Scotia	2,248	4,407New Brunswick	2,524	4,920Prince Edward Island	371	188Quebec	33,324	42,248Ontario	42,496	53,340Manitoba	5,345	1,963Saskatchewan	32	79Alberta	1,839	1,329British Columbia	5,205	9,072Yukon and Northwest Territories	63	80*Other	142,245	166,308
*Other-No provincial breakdown
2. (a) 2,513 (includes Locally-Engaged abroad), (b) (i) None, (ii) 2,058. (c) As of January 1974, the department had the following number of employees in each of the provinces and territories, exclusive of the National Capital Region: Alberta, 10; British Columbia, 10; Manitoba, 10; New Brunswick, 5; Newfoundland, 2; Northwest Territories, 0; Nova Scotia, 6; Ontario, 13; Prince Edward Island, 0; Quebec, 10; Saskatchewan, 6; Yukon Territory, 0.
April 8, 1974


Mr. Herbert: How much was paid by the newspaper Le Jour to CBC for publicity?


James Hugh Faulkner: I am
informed by the Canadian Broadcasting Corporation as follows: The CBC considered the arrival on the competitive Montreal newspaper scene of a new daily newspaper as an event of legitimate public interest. The significance of Le Jour and its administration and style were such that its inauguration received extensive coverage and comment not only by other Montreal newspapers and broadcasting stations but also on programs of the English and French radio and television stations of the Canadian Broadcasting Corporation in Montreal. Payment to the CBC by a newspaper or any individuals, groups of individuals, companies or organizations in connection with the discussion of, or reference to them, in the CBC's programs in contrary to the established policies of the CBC and was, therefore, not involved in the case of the newspaper Le Jour.


Mr. Herbert: Was Pierre Brisson paid by CBC for the interview he granted to the said Corporation?


James Hugh Faulkner: I am
informed by the Canadian Broadcasting Corporation as follows: Pierre Brisson received a fee from the CBC for the interview he granted to the said corporation.


Mr. Haliburton: 1.	Who hauls away the paper waste from Parliament Hill?
2.	What is the cost of removal?
3.	How many tons of paper are involved (a) per month (b) per year?
4.	Is paper waste separated from other garbage?
5.	Is such waste (a) recycled (b) incinerated (c) used as land fill?
6.	What was the volume of waste removed from Parliament Hill in (a) 1965 (b) 1967 (c) 1969 (d) 1971 (e) 1973?
7.	If it is incinerated, what is the cost of incineration?


Hon. Jean-Eudes Dube (Minister of Public Works):: 1.
Tri-Cil Waste Management Limited (City of Ottawa Garbage Contractor).
2.	Approximately $609 per month. During 1973 a total of 370,370 cubic feet of waste was removed at a cost of $7,306.
3.	Paper is not weighed.
4.	No.
5. (c) Used as land fill.	
6.	
Garbage	Waste Tater
(a) 1965, 66,612 cubic feet	Disposed by C.A.D.C.
(b) 1967, 101,192 cubic feet	Disposed by C.A.D.C.
(c) 1969, 111,754 cubic feet	Disposed by C.A.D.C.
(d) 1971, 110,292 cubic feet	Disposed by C.A.D.C.
(e) 1973, 370,370 cubic feet	Included in garbage
Order Paper Questions 7. The waste is not incinerated.


Mr. Stollery: 1.	For the years 1971, 1972 and 1973, how many Public Service positions that were advertised in newspapers by the Public Service Commission were subsequently filled from within the ranks of the Public Service?
2.	What was the total cost of advertising positions by the Public Service Commission in Canadian newspapers for each of these years?


James Hugh Faulkner: I am informed by the Public Service Commission as follows: 1. During 1971, 1972 and 1973 the Public Service Commission made the following appointments:
1971	1972	1973To the Public Service	7,226	7,992	8,650From within the Public Service	10,100	11,920	13,800
Departments made the following appointments under delegated authority:
To the Public Service	20,480	30,576	30,329From within the Public Service 28,869	37,996	45,736
The computerized and manual report systems of the Public Service Commission are not programmed in such a way as to permit us to say how many of the appointments from within the Public Service were related to vacancies originally advertised in open competitions or how many of the appointments to the Public Service resulted from advertising.
2. 1971-72, $306,172.89; 1972-73, $739,585.92; 1973-74 (To January 31/74), $627,069.23. The figures include costs of advertising in newspapers and periodicals, some of which would lead to appointments by departments, under delegated staffing activity.


Mr. Harney: For each year 1969 to 1973 (a) what was the number of applications for permits for export to Cuba (b) what was the number of permits granted under the Export and Import Permits Act?


Raynald Joseph Albert Guay: The answers to the above-noted questions are contained in the following table.
Export Permit	Export	Export Permit Applications withdrawn at Request of Applicant or on basis	Export PermitApplications	Permits	of no permit	ApplicationsYear	Received	Issued	required	Refused1969	85	71	7	71970	169	137	27	51971	127	103	13	111972	113	94	15	41973	81	40	34	7Totals:	575	445	96	34
Order Paper Questions


Mr. Diefenbaker: For what reason must permission from the Musicians' Union be secured for the RCMP Band as was stated to be the case when the Band appeared over CBC on January 10, 1974?


James Hugh Faulkner: I am informed by the Canadian Broadcasting Corporation as follows: For many years, the CBC has recognized the American Federation of Musicians as the exclusive bargaining agent for musicians appearing on its radio and television programs. The RCMP Band, and military type bands, in the course of regular duties, may be broadcast on radio or television without any need for permission from the Musicians' Union. On the CBC English television network program of January 10, 1974, however, the members of the RCMP Band performed in a capacity similar to that of musicians in an orchestra working as the featured musical performers in a television entertainment program.


Mr. Howie: From March 31, 1973 to March 31, 1974, how much money was paid by the government for the protection of New Brunswick forests by aerial spraying to prevent and control the effects of spruce budworm and other insects and is the government continuing this programme beyond March 31,1974?


Mr. William Rompkey (Parliamentary Secretary to Minister of the Environment):: The cost of the federal share of the spruce budworm control operation in New Brunswick in 1973-74 was $631,200. In 1974-75 the government will again share in the cost of control operations in New Brunswick to the extent that funds are available within a limited budget.


Mr. Diefenbaker: 1.	How many applications from veterans for pensions and allowances await decision by the Pension Commission?
2.	In how many of these cases has there been a delay of (a) six months (b) 12 months (c) 18 months in processing the applications and making a decision?
3.	How many (a) World War I veterans (b) World War II veterans have made their first application for pensions during the past year?


Mr. Maurice Foster (Parliamentary Secretary to President of the Privy Council):: Mr. Speaker, the answer is as follows: 1. As of 24 February 1974, there were 7,360 applications for pension awaiting decision by the Canadian Pension Commission.
2.	Statistics on outstanding claims are not available for the precise period indicated in the question; however, following are figures for closely related periods as of February 24, 1974: Applications five months or more old, 7,360; Applications twelve months or more old, 5,006; Applications eighteen months or more old, 243.
3.	Most World War I veterans and many World War II veterans for whom decisions on pension application are pending first made unsuccessful applications and exhausted their appeal rights many years ago and before the Pension Act was amended in 1971. With the amendments of 1971, all veterans, regardless of their period of service, were granted the right to make new applications based on the amended legislation and many have exercised this right. In addition there have been a considerable number of applications from veterans with disabilities that manifested or worsened during recent years and which they consider are attributable to their war service.
The total number of applications received in 1973, including first time and repeat applications was 8,731. This includes applications relating to World War I, World War II, Regular Force, Special Force and other service. The Commission does not record the period of service as a statistic at the time of receipt of applications.


Mr. Howie: On March 1,1974, how many veterans were known to be waiting for a Board hearing in respect to their disability pensions, pension increases or adjustments and, of these, how many were from New Brunswick?


Hon. Daniel J. MacDonald (Minister of Veterans Affairs):: As of March 1, 1974, there were 2,973 applications (including 193 from New Brunswick) for an Entitlement Board or a hearing as to quantum of pension, which had not yet been considered. Of this number, 1,542 (including 77 from New Brunswick) are in the course of having a Statement of Case prepared in the manner and form required by the Pension Act for an Entitlement Board, or are being prepared for a hearing as to quantum. A Statement of Case or other necessary documentation has been prepared for each of the remaining 1,431 applications and referred to the applicant, usually through his advocate, to determine if he is satisfied with the Statement of Case or other documentation and to certify that he is ready to proceed with the hearing. Of this number 534 cases (including 22 from New Brunswick) have been certified by the applicants and are ready for hearing and 897 (including 94 from New Brunswick) are awaiting certification of readiness to proceed.


Mr. Munro (Esquimalt-Saanich): 1.	Has the contract been awarded to construct the new fence at William Head Penitentiary to convert that institution from a minimum to a maximum security institution?
2.	Was it awarded through open competition and, if not (a) for what reason (b) if so (i) in what journals was the competition advertised (ii) how many bids were received?
3.	Was the bid accepted the lowest bid offered and, if not, for what reason?
[Mr. Guay (St. Boniface).)

4.	(a) To what company was the contract awarded (b) what was the amount of the contract?
5.	What elements, beyond the 1,500 feet of fencing on the land perimeter, are included in the contract?
6.	What provisions are made for security on the sea perimeter?
7.	Were the estimates submitted by all bidders verified by the Public Works Quantity Surveyor?
8.	(a) Does the contract include enlarging the parking lot and whose area is being reduced by the new fencing (b) what plans are there for enlarging the parking lot and the garden area?


Hon.. Jean.-Eudes Dube (Minister of Public Works):: 1.
Yes, a contract was awarded for a standard fence to parallel existing so that the institution can be used for medium security inmates.
2.	(a) Award was made as a result of selected invitation method in order to meet an urgent need to provide more secure accommodation as established by T.B. Minute No. 723554. (b) (i) There was no advertising in journals, (ii) One bid was received (five invited to tender).
3.	The only bid offered was accepted.
4.	(a) The contract was awarded to K.C. Johnson Ltd., Victoria, British Columbia (b) The amount of the contract was $115,826.
5.	The elements are: Fence length about 1,000 feet, about 40 feet of sea wall, land levelling and grading (rock blasting) for fence construction.
6.	For further security on the sea ends of the fence and land connection, raised guard posts are slated to be contracted soon to overlook the ends of the fence. Elsewhere, vehicle and foot patrols will guard the sea perimeter of the peninsula.
7.	The bid was in line with Public Works estimate.
8.	(a) The contract does not include enlarging of the parking lot which is being reduced because of the land need for the fence, (b) The institution, with its own labour force, will enlarge the parking lot and garden.


Mr. Rose: 1.	Where and for how long was the Liberian Registered Vessel Mesis out of service before it was charted to haul grain?
2.	Who chartered the vessel, for what destination and at what price?
3.	What was the usual cargo of the Mesis before it was chartered for grain?
4.	Who paid for the cleanup and grain refit of the Mesis?
5.	What was the contract cost of cleanup and repair?
6.	What is the usual contract price of vessel for equivalent cargo?
7.	Was the Mesis the vessel required to post a $50,000 bond as a result of a bunker oil spill at Vancouver's Lynn Terminals, February 14, 1974?
8.	What was the reason for the Mesis being at Lynn Terminals, a lumber terminal, when its cargo is expected to be grain, and for how long is it expected to remain at Lynn?
9.	What are the daily docking charges at Lynn Terminals?


Joseph-Phillippe Guay: 1. S.T.S. Mesis was out of service from January 18, 1974, until March 6, 1974. The vessel arrived at Vancouver at 15:30 on January 30, 1974 and commenced loading grain at 08:20 on March 6, 1974.
Order Paper Questions
2.	The S.T.S. Mesis is owned by Transports Intermares Armadora S.A. of Liberia and is on a time charter to Embiricos Shipping Agency Ltd. of London England. The vessel was chartered by the Bangladesh Shipping Corporation on January 18, 1974, through their agents, R.G. Shaw Ltd., London England from Embiricos Shipping Agency Ltd. to carry 33,000 metric tons of grain, 5 percent up or down, purchased by the Bangladesh Government from the Canadian Wheat Board, at a charter rate of U.S. $34 per metric ton, for discharge in Chittagong and/or Chandler.
3.	Normal cargo is bulk heavy oil.
4.	All costs paid by Embiricos Shipping Agency Ltd., London, England.
5.	Canadian agents, Empire Shipping Ltd., are unaware of the contract cost because the contract was handled directly by Embiricos Shipping Agency Ltd.
6.	The usual contract price of cleanup and repair varies according to the degree of sediment, scale and general condition of the compartments. The price usually ranges from $10,000. to $15,000. but has been known to go as high as $125,000.
7.	S.T.S. Mesis was charged in court on March 19, 1974, and posted two bonds, $25,000. for the criminal charge and $11,000. for the civil charge.
8.	The vessel was moored at the lay by berth for cleaning tanks and fitting for the carriage of grain. Vessel commenced loading grain at 08:20 on March 6, 1974, and sailed at 14:00 on March 19, 1974.
9.	The maximum daily docking charge is 60 cents per foot per 24-hour day.


Mr. Boisvert: How many miles of track do the railway companies own in (a) Canada (b) the Province of Quebec?


Joseph-Phillippe Guay: (a) 44,025; (b) 5,324.


Mr. Stackhouse: 1.	How many landed immigrants were admitted to Canada in each year 1973,1972 and 1971?
2.	What was the breakdown by origin of country for each such year?


Mr. Mark MacGuigan (Parliamentary Secretary to Minister of Manpower and Immigration):: 1 and 2. The information requested is contained in "Immigration Statistics" which is published annually and available from Information Canada or the Department of Manpower and Immigration. It is also published on a quarterly basis and available from the Department of Manpower and Immigration.

April 8, 1974
Order Paper Questions


Mr. Dick (Supplementary): 1.	What percentage of the veterans receiving a disability pension have been getting more than 48 per cent?
2.	How many of that percentage have been called in by the Canadian Pension Commission and had their pension reviewed and increased?


Daniel Joseph MacDonald: 1.	19.69 per cent.
2.	Statistics on the numbers of veterans called in for pension medical examinations are not kept in accordance with the percentage of disability pensions awarded to the veterans concerned.


Mr. Howie: To what extent will the government's participation in spraying to control and eradicate the spruce budworm in New Brunswick forests be limited in terms of (a) financial contribution (b) area being sprayed (c) field operations during the spraying season?


Bill Rompkey: (a) The Department of the Environment appropriation in Main Estimates 1974-75, to meet costs for the federal share of funding forest pest control operations in Canada, is $2.6 million (Vote 30). Both Quebec and New Brunswick have applied for financial assistance in 1974. (b) The area treated will be independent of the level of federal financial assistance. It is a provincial decision, (c) The Maritimes Forest Research Centre of the Department of the Environment will, as in past years, carry out pre-control and post-control surveys and provide technical and advisory services during the spraying season.


Mr. Cossitt: 1.	For what reason did it take a period of 50 days from September 11, 1973 to October 31, 1973 for the Secretary of State to reply to Question No. 2,671 of the First Session of the 29th Parliament that it was not possible to answer questions as to the total amount of OFY funds allocated in 1972-73 to constituencies represented in the House of Commons by (a) Members of the Liberal Party (b) Members of the Progressive Conservative Party?
2.	If a record of OFY funds is not kept according to electoral districts, how was it possible for the Secretary of State to send Members of Parliament representing specific electoral districts copies of all OFY applications received for each individual electoral district?
3.	What was the total amount of funds allocated in 1972-73 to constituencies represented in the House of Commons by (a) Members of the Liberal Party (b) Members of the Progressive Conservative Party?
4.	What is the name of each Cabinet Minister, the name of the constituency he represents and the total of OFY funds allocated to each such constituency for 1972-73?


James Hugh Faulkner: 1.
During the period involved, officials of the Secretary of State Department undertook a Study to examine ways and means of providing the information requested. The findings of the study were that a new computerized structure

would be required to provide information by constituency, and that an inordinate amount of time and expense would be involved in establishing such a structure. For managerial, technical and administrative reasons, the Opportunities for Youth Program and records were built on a regional and subregional basis which did not take into account and did not generally correspond to the actual limits of federal or provincial constituencies. The five regions were Atlantic, Quebec, Ontario, the Prairies and Northwest Territories, and British Columbia and the Yukon.
2.	At the urging of a number of Members of Parliament who had indicated a desire to be consulted on submissions from their own constituencies, the office of the Secretary of State at the beginning of the 1973 program undertook to sort the applications as best it could by federal constituencies. The consultation of April, 1973 did not represent an allocation by constituency, but rather a consultation process by which the Secretary of State gathered information prior to making decisions on projects. In view of the fact that the youth applying for projects were not restricted to being from or operating within one constituency, in multiple-riding urban areas more than one constituency was affected by some proposals. Hence, in many cases, more than one Member of Parliament was consulted. This exercise, arising out of the constituency demand, was not reflected in OFY selection records which are classified by region and subregion. This explains why the 600-page report listing Opportunities for Youth projects for 1973 is classified by provinces, municipalities and localities and in alphabetical order. This document enables a reader who is familiar with the limits of a given constituency to establish a list of those projects which were carried out within that constituency.
3 and 4. It is not possible to answer these questions, since the allocation of the funds of the OFY program was done within a framework of regions and subregions, and not within the framework of electoral constituencies.



QUESTION PASSED AS ORDER FOR RETURN


Mr. Nystrom: 1.	What was the total amount of money spent in each of the fiscal years 1972-73 and 1973-74 to date by the Department of National Defence on contracts to outside persons and organizations for research, development and other consulting services?
2.	What are the names and addresses of these outside persons and organizations and what amounts of money were involved in each contract?
3.	What was the purpose of each contract and title of each report submitted?
Return tabled.
April 8, 1974



ORAL QUESTION PERIOD


John Douglas Reynolds: Mr. Speaker, my question is for the Minister of Transport. In view of the fact that the strike by firefighters is still continuing at Vancouver airport and that his regional officials have had very little success in solving the dispute, will the minister personally go to Vancouver and talk to the people on strike to see if he can end it?


Hon. Jean Marchand (Minister of Transport):: Mr. Speaker, two minutes ago I was told of the arrival in Vancouver of two senior officials of the department who flew there to try to settle the conflict as soon as possible.


John Douglas Reynolds: Mr. Speaker, my supplementary question is directed to the same minister. Just two minutes ago I was talking with the strikers in British Columbia who informed me that unless either the Minister of Transport or the President of the Treasury Board is willing to go to Vancouver they are not willing to talk to the minister's officials. It is time the minister did his job and went there and talked to these people.


Frank Oberle: Mr. Speaker, I should like to ask the minister a question on the same matter. Since negotiations with the firefighters in British Columbia are six months behind and since this serious strike also affects the lives and safety of every person outside the city of Vancouver, is the minister prepared to do something today by going there and settling this strike or, if not, employing the armed services to provide emergency protection to the air carriers?


Jean Marchand: Mr. Speaker, anybody can play politics with anything, but I tell you this situation in Vancouver is very serious. I have here copies of wires from the union asking their men to go back to work. Possibly you represent them better than their union, but I do not believe it.


Frank Oberle: Mr. Speaker, I should like to direct a supplementary to the minister, who is a renowned labour leader. Why can he not settle a strike involving 100 people in British Columbia and what is he doing about the prospective strike of air traffic controllers? Has he got that under control as well?


Jean Marchand: Mr. Speaker, if the hon. member had been here a little longer he would know there is something in government called the Department of Labour. A report will be made to the Department of Labour and after that I will be informed and we will see what we can do.


Mr. Speaker:: Order, please. A number of members are seeking supplementaries of the minister. The Chair will
Oral Questions
recognize the hon. member for Oshawa-Whitby to complete the first round of questioning and then return to this important matter starting with the hon. member for Vancouver South. As I indicated, I will recognize the hon. member for Oshawa-Whitby in an attempt to complete the first round of questioning.


CANADA-UNITED STATES-CANADIAN DEFICIT IN AUTO PARTS-MONITORING OF COMPANIES' PURCHASING PATTERNS
Mr. Edward Broadbent (Oshawa-Whitby):: Mr. Speaker, I should like to direct a question to the Minister of Industry, Trade and Commerce. In view of the fact there was a deficit of over $1 billion in trade in automotive parts between Canada and the United States last year as a result of something like a 20 per cent increase in the purchase of parts by Canadian assembly plants in the United States, can the minister inform the House whether or nor the government is monitoring the purchasing patterns of General Motors, Ford and Chrysler, particularly under the auspices of the DISC'S which have they set up?


Alastair William Gillespie: Mr. Speaker, I cannot give a specific answer to the question of the DISC'S to which the hon. member has referred, but we are certainly monitoring the over-all situation so far as parts imports and parts exports are concerned. More than that, we are trying to develop new markets for Canadian parts manufacturers. There have been missions recently to three major trading areas of the world. On the last trip to Mexico I took representatives of the Canadian automobile parts manufacturers with me.


John Edward Broadbent: In view of the fact that, whatever increased sales we may expect to get in other countries, the fact remains that the United States market is of overriding importance, can the minister inform the House whether or not he has attempted and, if so whether he has made any progress in this regard, to seek assurance from the assembly plant operators in Canada that they will purchase more parts for their assembling of automobiles from Canadian parts producers?


Alastair William Gillespie: Mr. Speaker, I think the assembly operators are interested in purchasing just as many parts as they can. This is largely conditioned, as the hon. member knows, by the state of the United States market at the present time.


INDUSTRY
[Stage Direction]
MANUFACTURE BY GENERAL MOTORS OF NEW VEHICLE AT STE. THfiR^SE IN PLACE OF VEGA-ASSURANCE THAT NUMBER EMPLOYED WILL NOT BE REDUCED
John Edward Broadbent: I have a further supplementary, Mr. Speaker. Considering the fact

Oral Questions
that General Motors Corporation has decided to transfer its production of the small Vega from Ste. Therese, Quebec, to the United States and to replace it with a new vehicle, the sales potential of which is unknown, would the minister inform the House whether he has obtained assurance from that company that the numbers employed at Ste. Therese will not be below what they are at the present time?


Alastair William Gillespie: Mr. Speaker, I have spoken with the president of General Motors of Canada with respect to this particular item. He has assured me that the automobile that will go into the Ste. Therese plant will be a comparable vehicle in terms of a small car with a very comparable potential. He has gone further and said that he sees no reason to expect any reduction in employment.


INCOME TAX
Mr. Jean-Marie Boisvert (Drummond):: Mr. Speaker, I wish to direct my question to the Minister of Finance.
In 1973, the government granted an interest free loan of $774 million to Canadian corporations in allowing them to defer their fiscal payments. Can the minister tell whether he intends to give to low-income taxpayers that same privilege through which multimillionnaire corporations use tax moneys without paying any interest?


Hon. John N. Turner (Minister of Finance):: Mr. Speaker, I do not share the opinions expressed in the article the hon. member quoted. In any case, one must take into account jobs created not only in Quebec but also in the whole of Canada through grants or rather tax reductions granted to these corporations.


Jean-Marie Boisvert: Mr. Speaker, may I ask a supplementary?
Could the minister tell whether he considers it normal that low-income taxpayers should be penalized when they do not pay their taxes before April 30 whereas corporations that make millions of dollars of benefits can defer their tax payments and thus use government money without paying interest?


Mr. Speaker:: I think this is more of an argument than a supplementary question.


AIR TRANSPORT
Mr. John A. Fraser (Vancouver South):: Mr. Speaker, I have a supplementary question for the Minister of Transport. In view of the minister's invitation to the opposition on Friday to settle the strike, would the minister consider a special arbitrator or arbitrators and include my col-

league, the hon. member for Burnaby-Richmond-Delta, who obviously is well informed.


Some hon. Members:: Oh, oh!


John Allen Fraser: No one from British Columbia is trying to exploit the situation, as the minister suggested on Friday.


Jean Marchand: Mr. Speaker, I think we should look at the situation as it is. I think there are some very important values at stake in Vancouver. I know that the alliance has taken a very serious stand concerning these firefighters. This is not a normal dispute but we are trying to solve the problem by normal means. I do not see what would be achieved by forming a committee of the House.


John Allen Fraser: Mr. Speaker, would the minister tell the House why he rejects an independent arbitrator as a means to bringing the union, the firefighters involved and the government together so that negotiations can continue, particularly as the minister said, that the circumstances are special?


Jean Marchand: Mr. Speaker, for a reason which is very simple. We have a certain number of laws in this country which regulate labour relations between employees and employers. You have the Public Service Alliance of Canada which is certified to represent this group, and Treasury Board is negotiating with the certified agent. Treasury Board cannot negotiate with anybody else because this is an exclusive bargaining right.


PUBLIC SERVICE
Mr. Elmer M. MacKay (Central Nova):: Mr. Speaker, I have a supplementary question for the President of the Treasury Board. In view of the current serious problems involving the firemen at Vancouver airport and similar problems in the recent past with regard to nurses and dockyard workers under federal jurisdiction, will the President of the Treasury Board now concede that his concept regarding regional pay differentials for Treasury Board employees is inequitable and unworkable and contributes to labour problems-


Mr. Speaker:: Order, please. I am sure the hon. member will appreciate that is debate rather than a question.


Elmer MacIntosh MacKay: May I rephrase my supplementary question, Mr. Speaker?


Mr. Speaker:: The first question was hardly a supplementary. Perhaps the hon. member has a supplementary question to ask now.


Elmer MacIntosh MacKay: Perhaps I can rephrase the question. Since the policies of the President of the Treasury Board appear to some of us to be inconsistent in that many employees under Treasury Board jurisdiction do not receive equal pay for equal work across the nation and, on the other
April 8, 1974

hand, as in the case of the Vancouver firefighters, they do not receive comparable pay to that in the private sector, when do the minister and the government intend to phase out this particular approach which appears to be causing difficulties?


Hon. C. M. Drury (President of the Treasury Board):: the hon. gentleman will discuss the matter with his colleague from Vancouver, the one thing he will see is that the issue here is a conflict between a resolution of the Public Service Alliance convention calling for national pay rates and the refusal of the local in Vancouver to accept that resolution. The problem is to reconcile the quite natural demands of the Vancouver firefighters for some comparability of pay with people in Vancouver rather than with some national average.


AIR TRANSPORT
Mr. Mark Rose (Fraser Valley West):: Mr. Speaker, I wish to direct a question to the President of the Treasury Board. I appreciate that the union has asked the men to return to work, but what I would like to ask him is whether there are discussions going on today in Ottawa with his department, and what is the nature of these discussions, so far as he can tell the House, between Treasury Board and the union affected with a view to settling this crippling work stoppage?


Charles Mills (Bud) Drury: The answer is yes, Mr. Speaker. The Department of Transport, as the Minister of Transport has indicated, has sent a special team to Vancouver to talk directly to the departmental employees. In the meantime, urgent discussions are continuing at the national level here in Ottawa between the bargaining agent and Treasury Board.


OVERSHOOTING OF HALIFAX AIRPORT RUNWAY BY AIR CANADA DC-8-SUGGESTED INDEPENDENT BODY TO INVESTIGATE ALL TRANSPORTATION ACCIDENTS
Mr. J. M. Forrestall (Dartmouth-Halifax East):: Mr. Speaker, I have a question related in a sense to airports to direct to the Minister of Transport. It arises out of concern about public safety. What can he tell the House today about the regrettable incident involving a DC-8 overshooting a runway at Halifax? Has an investigation been launched and, if so, will the details be made public?


Jean Marchand: Mr. Speaker, there is no doubt that it was a regrettable incident. A team of inquiry from my department is in Halifax right now trying to find out exactly what happened.


J. Michael Forrestall: Mr. Speaker, my supplementary question goes from the specific to the general. In light of the current circumstances that surround transportation accidents in Canada, the growing number of such accidents,
Oral Questions
their relevance to the general public and their direct relevance to the travelling public, does the minister not think it is time to remove from the jurisdiction of the Department of Transport responsibility for the investigation of accidents affecting all modes of transport and establish an independent body so that the general public will not be confused by the apparent conflicts of interest?


Jean Marchand: Mr. Speaker, when I spoke in the House a few weeks ago I think I mentioned that I would favour an independent board in such cases, and that whenever a new policy was introduced this would be part of it.


ESTIMATED SHORTFALL IN WHEAT EXPORTS BECAUSE OF TRANSPORTATION DIFFICULTIES
Mr. Gordon Ritchie (Dauphin):: Mr. Speaker, I wish to direct a question to the minister in charge of the Canadian Wheat Board. Has the minister made any estimate of the shortfall in wheat exports that the present transportation difficulties will cause by the end of the crop year and, if so, what is that figure?


Hon. Otto E. Lang (Minister of Justice):: Mr. Speaker, there is no specific figure available because of the speculative features that are involved in any such calculations. The Wheat Board certainly would have liked to make additional sales in certain circumstances and will still want to do so if the special measures now being taken allow more grain to be moved to export position than had earlier been anticipated.


William Gordon Ritchie: In view of the special arrangements, is the Wheat Board considering paying farmers for trucking wheat from branch lines at present inoperative to main line points that are open?


Otto Emil Lang: I know that this is a matter they have at least been examining, but to this point they certainly have not made a decision to do that.


IMMIGRATION
Mr. Andrew Brewin (Greenwood):: Mr. Speaker, I wish to direct a question to the Minister of Manpower and Immigration. Did the minister receive a deputation of leading churchmen last week who pointed out that there was a continuing emergency in the Chilean refugee situation, particularly in Peru and Argentina, and urging procedural reforms in handling these cases? If so, what was his response to the representations of the delegation?


Robert Knight Andras: Mr. Speaker, that is correct. I met with a delegation from the Canadian Council of Churches, along with my colleague, the Solicitor General. We discussed the

April 8, 1974
Oral Questions
whole range of the matter of the Chilean movement. They made certain valuable and constructive suggestions to us, based on their information, which we have passed along to our people, particularly with regard to procedures in Peru and Argentina.


Francis Andrew Brewin: Has the minister made or is he contemplating making any changes to deal with the problem that exists in the new humanitarian spirit which he has announced guides the government in this field?


Robert Knight Andras: Mr. Speaker, as I indicated to the delegation, the situation in Chile itself seems to have changed, and we have reduced the number of people we had temporarily sent there. But it is an ongoing operation, both to deal with normal applications from Chile in the normal manner and to be prepared to handle, with special consideration, any remaining refugee cases that are brought to light.


INDUSTRY
Mr. Jack Cullen (Sarnia-Liambton):: Mr. Speaker, I wish to direct a question to the Minister of Industry, Trade and Commerce. Was he made aware of the welcome announcement today that a $250 million world scale plant to produce feedstock for the petrochemical industry will be constructed in Sarnia-Lambton?


Alastair William Gillespie: Mr. Speaker, I have been made aware of a favourable decision-[DOT]


Some hon. Members:: Oh, oh!


Alastair William Gillespie: -on a project which has been championed by the hon. member for Sarnia-Lambton-


Some hon. Members:: Hear, hear!


Alastair William Gillespie: [DOT]-which has been assisted by the corporate tax cuts-


Some hon. Members:: Oh, oh!


Some hon. Members:: Hear, hear!


Mr. Speaker:: Order, please. I am wondering whether the minister wishes to return to motions for the purpose of making a statement.


BUSINESS OF THE HOUSE
Hon. Robert L. Stanfield (Leader of the Opposition):: Mr. Speaker, I wish to direct a question to the government House leader. Would the hon. gentleman be prepared to

designate one of the sitting days of the week beginning April 22 as an opposition day?


Hon. Allan J. MacEachen (President of the Privy Council):: Mr. Speaker, I am not prepared to do that. I would be happy to consult with my colleagues, but in the normal course the designation of opposition days is a matter for decision-


Mr. Hees:: Between you and Stanley Knowles.


Some hon. Members:: Oh, oh!


Allan Joseph MacEachen: -by the government because such days come under the business of supply. So the answer is that I am not prepared at the moment to designate any day.


REQUEST THAT PUBLIC ACCOUNTS COMMITTEE MEET BEFORE EASTER RECESS TO ARRANGE TIMETABLE
Mr. Thomas M. Bell (Saint John-Lancaster):: Mr. Speaker, I wish to direct a supplementary question to the government House leader on the matter of unfinished business before the Easter recess. Would he check into the possibility of the Public Accounts Committee having a meeting before Easter so it could arrange its timetable? I understand that the Auditor General worked hard to get his report going and everybody is anxious to get started, but the nod has not come from somebody.


Allan Joseph MacEachen: As I understand it, Mr. Speaker, a reference has been given by the House to the Standing Committee on Public Accounts at the request of the Chairman, and if a nod is required from me I will be glad to give it now.


PROSPECTIVE LEGISLATION RESPECTING WORLD FOOTBALL
Right Hon. J. G. Diefenbaker (Prince Albert):: Mr. Speaker, my question is directed to the Acting Prime Minister. It has to do with the bill in connection with barring the World Football League from Canada. When that bill comes before the House, is it the intention of the government to permit a free vote in order to calm and quieten Liberal members from Toronto and elsewhere who are very frightened by its terms?


Hon. Mitchell Sharp (Acting Prime Minister):: Mr. Speaker, I do not know what decision will be made by the various parties as to whether the whips will be off, but I do not think this is a matter that goes to the roots of our policy.


John George Diefenbaker: It is a matter that goes to the roots of the survival of some of the seats of Liberals. Was the minister speaking for the government at Osgoode Hall Law School in Toronto a couple of days ago when he said that the federal government may permit a free vote?
April 8, 1974

Asked if party discipline would be enforced when the matter came to a vote, he said, "I wouldn't think so". Was that expressing government policy or just his own personal fears?


Mitchell William Sharp: Mr. Speaker, may I first thank the right hon. gentleman for his solicitude on behalf of our party. It is rather rare to hear it expressed. I did not make any such statement, Mr. Speaker. I was asked whether there would be a free vote and I said that there will be a government bill which I will support and I did not know whether the whips would be on.


John George Diefenbaker: That is a revised version.


PURCHASE PRICE OF ADDITIONAL HOPPER CARS TO FACILITATE MOVEMENT-POSSIBILITY OF RAILWAYS SHARING COST
Mr. Gordon Towers (Red Deer):: Mr. Speaker, my question is for the minister in charge of the Canadian Wheat Board. Can the minister tell the House the total purchase price of the 4,000 hopper cars and will the CPR and the CNR be requested to assume a portion of the cost?


Otto Emil Lang: Mr. Speaker, the government has made the decision to purchase these cars but the tender call has not yet been made. Therefore there is no confirmed purchase price at this point. The order will be placed by the government.


Thomas Gordon Towers: Would the minister not consider it to be in the best interests of the Canadian people to ask both these corporations to assume the cost and the administration of this project?


Mr. Speaker:: Order, please. It seems to me that is a representation. The hon. member for Moose Jaw.


PURCHASE OF ADDITIONAL HOPPER CARS TO FACILITATE MOVEMENT-ADEQUACY OF RAIL BEDS
Mr. Doug Neil (Moose Jaw):: Mr. Speaker, I have a supplementary question for the Minister of Transport. Is the minister aware of reports about the 4,000 boxcars recently ordered by the federal government being too heavy for the rail beds and that they could thus cause further deterioration of railway equipment? If so, will he guarantee to the House that the 4,000 boxcars are the correct size and weight for the rail beds?


Jean Marchand: Mr. Speaker, I presume that if some hopper cars are built they will be built according to the capacity of the rails, and if the rails have to be upgraded they will be upgraded.


AGREEMENT WITH RAILWAYS ON MAINTENANCE OF HOPPER CARS ALREADY IN USE
William George Knight: Mr. Speaker, my supplementary question is for the minister in charge of the
Oral Questions
Canadian Wheat Board. I may add that the Minister of Transport will have a lot of investing to do if he is to upgrade all lines in western Canada in view of how they have been allowed to run down. In view of the fact the government is calling for tenders for the building of another 4,000 hopper cars, can the minister inform the House whether the railways have yet come to an agreement on paying for maintenance of the first 2,000 cars the government purchased?


Otto Emil Lang: Mr. Speaker, the agreement between the Canadian Wheat Board, which is trustee for the government for these cars, and the railways is a completed agreement and is available to members. When we announced the decision to order these additional 4,000 cars in accordance with the request from the Canadian Wheat Board and many other organizations like the Saskatchewan Wheat Pool, we did so knowing exactly how many miles of track can handle 263,000 pound loaded hopper cars and knowing we would want to continue putting pressure on the railways to add more miles of trackage in that category by the time the hopper cars are available.


Mr. Speaker:: Order, please. A number of members are seeking supplementaries and we will be running short of time. Perhaps the Chair might recognize the hon. member for Assiniboia, the hon. member for Mackenzie, the hon. member for Saskatoon-Biggar and then try to go to the next question.


ACTION TO MAKE USE OF BOXCARS AT PRESENT INOPERATIVE ON BRANCH LINES
William George Knight: In view of the fact the minister, in announcing the 4,000 hopper cars, said there would be a closing of branch lines throughout western Canada, and at least 70 per cent of these lines are in Saskatchewan, and in view of the fact they involve in the neighbourhood of 1,000 elevator delivery points, can the minister inform the House what action the government is going to take to have the railways bring into operation all the boxcars which are now on those branch lines, some of which could be in operation with some effort on the part of the railways?


Otto Emil Lang: Mr. Speaker, the announcement of the purchase of the hopper cars was not in any way related to any announcement about elevators being temporarily closed. Canadian National Railways did indicate that some of its branch lines would not be opened for a certain period of time because of the snow conditions. I think that may involve as many as 500 elevators. I certainly agree with the wisdom of the thought that you do not send more locomotives into snowbanks after cars when they are badly needed to move grain that is available on the main lines and get it to Vancouver where ships are waiting. That is the essence of the position at the moment. It is true you get a faster turnaround of rail equipment by using these main lines. Accordingly, the Canadian Wheat Board is giving additional delivery opportunities to all farmers whose elevators are temporarily closed so they can deliver their grain, road conditions permitting, to lines that are presently open.
Oral Questions TRANSPORT

April 8, 1974


INTENTION OF RAILWAYS TO ABANDON CERTAIN BRANCH LINES
Mr. S. J. Korchinski (Mackenzie):: Mr. Speaker, my question is for the Minister of Transport. Several years ago the railways presented the country with a list of lines that they intended to abandon. The government at that time stepped in and guaranteed that these lines would be operated until January 1, 1975. Has the minister authorized these lines to be abandoned at this time or are the railways proceeding on their own initiative?


Jean Marchand: No, Mr. Speaker. The only policy at this time is that all these branch lines are frozen. We do not know exactly what is going to happen in the future.


Stanley James Korchinski: In view of the fact that some of these lines are operational and rail liners are going through on these lines, why is it that boxcars are left sitting on sidings and carloads of fertilizer, lumber and oil are not brought in by rail but by truck transport?


Jean Marchand: Mr. Speaker, I think we will have a perfect opportunity on Wednesday next, when I will meet in a national conference the railways, the shippers, all those who are users of railways and the truckers, to get to know exactly what is happening and to ask the railways what we want to ask them. We have invited the chairman of the Standing Committee on Transport and Communications and he will surely attend the meeting.


REQUEST THAT CONTROL OF RAILWAY AND AIR TRANSPORT, HARBOURS BOARD AND MARITIME COMMISSION BE RETURNED TO DEPARTMENT
George Harris Hees: Mr. Speaker, my question is for the Minister of Transport. As the minister has clearly indicated in recent speeches that much of the difficulty in transportation matters today is caused by lack of control over these matters by the government, is the minister giving consideration to bringing back into his department the Board of Transport Commissioners, the Air Transport Board, the National Harbours Board and the Canadian Maritime Commission, and by so doing once again give the government the control it needs over these important matters, thereby greatly improving transportation of Canadian goods?


Jean Marchand: Mr. Speaker, I thank the hon. gentleman for the question. I think I have already partly answered it by saying that I hope shortly to be in a position to produce a policy paper for the cabinet on the revisions I think should be made in the department. At that time I will be happy to discuss it with members of the House.


Mr. Speaker:: Order, please. The Chair will recognize a further supplementary to the previous question. I recognize the hon. member for Yorkton-Melville for a supplementary, then the hon. member for Champlain and the hon. member for Hamilton Mountain.


POSSIBLE APPOINTMENT OF BOXCAR CONTROLLER TO FACILITATE MOVEMENT
Mr. Lome Nystrom (Yorkton-Melville):: Mr. Speaker, my supplementary is to the Minister of Transport. Some time ago the minister referred to the appointment of a boxcar controller to allocate boxcars. When is he going to act upon his own suggestion and make the appointment?


Jean Marchand: Mr. Speaker, I mentioned to the House that we would try to monitor the distribution of boxcars in Canada. A man has been hired and will be presented at the meeting on Wednesday.


NATIONAL REVENUE
Mr. Rene Matte (Champlain):: Mr. Speaker, I should like to put a question to the Minister of National Revenue or the Minister of Finance.
Can he say whether what happened in Quebec-seven oil companies not paying any tax in that province-also happened at the federal level or did any Canadian oil company have no federal tax to pay during the last financial year?


Mr. Speaker:: I feel that such a general question could be placed on the order paper. It is so general that I wonder if the minister would be ready to answer. It should be placed on the order paper. If there is some urgency, I will be pleased to grant priority to this question on the adjournment motion.

[DOT] (M50)


MANPOWER
Mr. Tom Cossitt (Leeds):: Mr. Speaker, my question is for the Minister of Manpower and Immigration. Is it a fact that a number of applications for Opportunities for Youth grants were actually rejected by the minister's department before he went through the motion a week ago of asking members of parliament for their recommendations on applications received this year?


Robert Knight Andras: No, Mr. Speaker, not to my knowledge, unless there was the odd application that was obviously in the wrong form or something like that. I will look into the matter, but to my knowledge this is not so.
April 8, 1974


Thomas Charles Cossitt: Mr. Speaker, in view of the possibility of an imminent federal election-


Some hon. Members:: Oh, oh!


Thomas Charles Cossitt: -will the minister assure the House that in selecting or passing on applications this year it will be done on the basis supposedly laid down and not with any political considerations in mind?


Mr. Speaker:: Order, please. That is a representation. The hon. member has to assume his representation will be taken into account.


THE CANADIAN ECONOMY
Mr. Duncan M. Beattie (Hamilton Mountain):: Mr. Speaker, I wish to direct a question to the Minister of Finance. In light of the fact the Steel Company of Canada, the largest steel producer in Canada, recently announced wage increases due its employees August 1, 1974, and an additional cost of living allowance of 15 cents an hour will be paid from August 1, 1974, in order to relieve the effects of inflation on the living standards of its employees, does the minister have any further measures to sustain the average weekly earnings of workers which have been seriously eroded by inflation?


John Napier Turner: Mr. Speaker, I have no comment to make on the action of the Steel Company of Canada.


Duncan M. Beattie: Maybe the minister will have some comment on my supplementary. In addition to the Stelco raise, the second largest steel company in the country, Dominion Foundries and Steel Company, also found it necessary to increase wages. What further evidence does this government need that its inflationary policies are not working, and what steps is the minister taking to keep real wages in line with inflation?


Mr. Speaker:: Order, please. I am sure the hon. member will agree his question is hardly in order when it contains argument. Perhaps the second part of the question might be in order and the minister might be prepared to reply to it on motions.


NATIONAL DEFENCE
Mr. Jack Marshall (Humber-St. George's-Ste. Barbe):: Mr. Speaker, my question is to the Minister of National Defence. At a conference of the Army Cadet League of Canada on the weekend, great concern was expressed about the lack of government action in amending the National Defence Act to permit the recruiting of females.
Oral Questions
Will the minister indicate what progress is being made in this regard?


James Armstrong Richardson: Mr. Speaker, I intend to recommend to the House a number of amendments to the National Defence Act. One amendment which I will recommend will allow the cadet corps to be open equally to girls as well as boys.


AGRICULTURE
Mr. A. P. Gleave (Saskatoon-Biggar):: Mr. Speaker, I wish to direct a question to the Minister of Agriculture. In view of the fact the government of British Columbia has announced a subsidy payment of $4.50 per hundredweight to hog producers in that province and that previously Saskatchewan and Alberta announced subsidy payments, can the minister advise if it is the intention of the federal government to institute an adequate support price for hogs, or is it its intention to abdicate entirely its responsibility with regard to supporting the hog industry in Canada?


Hon. E. F. Whelan (Minister of Agriculture):: Mr. Speaker, the first national approach to hog production and the problems the producers are having with the low prices of pork products will be tomorrow when I meet the national pork producers organization in my office.


Alfred Pullen Gleave: Since the market price of fat cattle has fallen by an amount greater than the five cents a pound subsidy now being paid, is it the intention of the government to bring in a price support program for beef cattle that will have some relationship to the cost of production?


Eugene Whelan: Mr. Speaker, at the present time there are many people in the beef production industry in Canada who are telling us we should withdraw the program we have at the present time. This is a very disorganized group of people, probably the most disorganized group of producers in Canada. They have many different opinions about what should be done with regard to the beef industry. Therefore it is very difficult to solve the problem.


ENVIRONMENTAL AFFAIRS
Mr. Otto Jelinek (High Park-Humber Valley):: Mr. Speaker, in the absence of the Minister of the Environment I will direct my question to the Acting Prime Minister. In view of the fact the International Joint Commission announced last week that it is unable to stop any future flooding of the Great Lakes, as well as the unfortunate fact that the United States in admittedly falling sadly behind schedule in its clean-up campaign, what action

April 8, 1974
Oral Questions
does the government intend to take regarding this very serious matter?


Mitchell William Sharp: Mr. Speaker, the hon. member has raised two separate questions. The first deals with flooding on the Great Lakes. Both sides in the International Joint Commission had to recognize that it is very difficult to do much about excessive rainfalls. The water all has to pass through the St. Lawrence. Therefore it is impossible to deal with that problem except by regulating the level of the water in the various lakes. With regard to the second question, I was talking today to the chairman of the Canadian section of the International Joint Commission who gave me an account of the talks. While the Canadian government is not altogether satisfied with the progress being made by the United States in cleaning up the Great Lakes, at least progress is being made and there is good will on both sides.


Otto John Jelinek: My supplementary is to the Acting Prime Minister. On October 17, 1973, I asked the Minister of the Environment if adequate staffing and funding would immediately be provided for the proposed cleanup and control of flood levels of the Great Lakes, to which he gave this House his assurance. According to spokesmen in two different International Joint Commission offices in Ontario, this has not been the case. I therefore ask whether the government is still planning to take immediate action, as promised by the minister, or if in fact it is thinking of nullifying the Great Lakes water quality agreement?


Mitchell William Sharp: Mr. Speaker, as far as I understand the situation, Canada is fully up to date in carrying out the agreement with the United States. The United States is having some difficulty in funding its operation. I do not think it is lack of staff on the part of Canada that is causing any of these difficulties.


COMMEMORATION
Mr. Heath Macquarrie (Hillsborough):: Mr. Speaker, in the absence of the Secretary of State I will direct my question to the acting minister. Considering that this year, 1974, marks the centenary of the birth of three outstanding statesmen and leaders of three historic parties, Right Hon. Mackenzie King, Right Hon. Arthur Meighen and Reverend J. S. Woodsworth, can the acting minister advise if the government has in mind any commemorative events honouring the careers of these distinguished Canadians who brought honour and distinction to this House and much greatness and credit to this country?


Mr. Speaker:: I have the impression this question might have been placed on the order paper, but perhaps the minister might reply briefly.


PENITENTIARIES
Mr. Allan Lawrence (Northumberland-Durharn):: Mr. Speaker, in view of the hide and cover attitude of the government regarding Ontario grand juries, as expressed last week, may I ask the Solicitor General if he has issued instructions or if there is a government policy which would prevent individual members of parliament on their own initiative from entering into and inspecting federal government institutions?


Hon. Warren Allmand (Solicitor General):: No, Mr. Speaker. It is the policy of the penitentiary service and my department to permit entry of members of parliament during regular periods. However, when there are disturbances we have to regulate this because we cannot have an extremely large number of people, whether it be press or members of parliament. But in usual periods of time we permit members of parliament at any time.


SUBMISSION OF BILL C-18 TO PROVINCIAL GOVERNMENTS FOR APPROVAL
Mr. Eldon M. Woolliams (Calgary North):: Mr. Speaker, I wish to ask the Minister of Energy, Mines and Resources a question that may help us in the debate on Bill C-18 which is to commence today. Was this bill presented to the provincial premiers and governments for their approval? This bill, of course, arises from the agreement between the federal and provincial governments. Has the federal government received the total approval of the ten provincial governments with regard to all the terms and conditions?


Hon. Donald S. Macdonald (Minister of Energy, Mines and Resources):: As the hon. member knows, Mr. Speaker, the general principles involved in the bill were the subject of an agreement between the first ministers on March 27. As the hon. member also knows, it is not in accordance with the practice of the House to circulate a bill outside the Privy Council before it receives first reading in the House.


Eldon Mattison Woolliams: I have one supplementary question arising from the fact that this bill is the result of an agreement between the federal government and the provincial governments concerning the export tax and setting the price of crude petroleum and its by-products. Am I to understand from the minister's answer that neither he nor the government have made any attempt to obtain from the provinces an acknowledgment that the bill embodies the terms and conditions of the agreement made at that time?


Donald Stovel Macdonald: The terms and conditions reached as a result of that conference have been incorporated in this bill. The bill is a public document for the first ministers examination and as far as I know no exception has been taken to its terms.


AGRICULTURE
Mr. Arnold Peters (Timiskaming):: Mr. Speaker, I should like to address a question to the Minister of Agriculture. In view of the fact that no premiums are being paid to farmers selling at community sales, would the department give consideration to the stabilization board supplying and attaching tags to slaughter cattle for sale so that the rebate can be paid to the farmer rather than the money all going to the packing plants?


Eugene Whelan: I think we have given consideration to just about every means of making sure that these premiums are paid to those who are entitled to them, that is, to the producers of the beef. We shall certainly look into the hon. member's suggestion although I am sure it has been considered. It is very difficult to administer because many of these commodities change hands as many as ten times before they actually get to the packing firm.


CONSUMER AFFAIRS
Mr. Stan Darling (Parry Sound-Muskoka):: Mr. Speaker, I have a question for the Minister of Finance concerning the increase in the price of oil by-products as a result of the increase in the wellhead price of oil. For example, the price of asphalt has risen by almost 100 per cent. Would the minister tell us whether he took this into account at the time the wellhead price of oil was increased?


John Napier Turner: Without accepting the full implications of the preamble, may I say we also took account of the fact that the price in Canada is about $4 below the world price.
Yukon and Northwest Territories
but would follow the pattern set by what is generally known in this country as the private sector.
It is plain, and it is on the record of this House, that there is a differential of at least $3,000 in Vancouver between what the firefighters at the airport are receiving and what firefighters in the private sector are receiving, so I believe it is incumbent upon the minister to set the record straight and tell us whether or not he intends to follow the principle he stated in the House.


Mr. Speaker:: That is hardly a point of order. Perhaps the hon. member will have an opportunity on another occasion to become involved in a debate with the minister on this matter.



GOVERNMENT ORDERS


[Stage Direction]
The House proceeded to the consideration of a ways and means motion concerning the Customs Tariff.
John Napier Turner: That a ways and means motion laid upon the table Friday, March 1, 1974, concerning the Customs Tariff be concurred in.


[Stage Direction]
Motion agreed to.

John Napier Turner: that Bill C-21, to amend the Customs Tariff be read the first time and ordered to be printed.


[Stage Direction]
Motion agreed to.
Stan Darling: In view of the fact that the price of asphalt has doubled in the last few months and is expected to increase still further, would the minister consider reducing the 12 per cent federal sales tax on asphalt to ease the burden on builders and other users of asphalt such as municipalities and provincial governments?


Mr. Speaker:: That, of course, is a representation for consideration by the minister. Orders of the day.


Elmer MacIntosh MacKay: I rise on a point of order, Mr. Speaker. I shall be brief. I would not want to try to sneak an argumentative point past Your Honour. But it relates to a statement made by the President of the Treasury Board on March 25, reported at page 852 of Hansard. It is also relevant to what was said today with respect to the situation at Vancouver. On March 25 the President of the Treasury Board said:
In the case of regional pay policy, the government for years has taken the position that it would not be a leader in matters of pay and salary


YUKON, NORTHWEST TERRITORIES AND CANADA ELECTIONS ACT AMENDMENTS RESPECTING COUNCILS AND ELECTORAL BOUNDARIES
[Stage Direction]
The House proceeded to the consideration of Bill C-9, to amend the Yukon Act, the Northwest Territories Act and the Canada Elections Act, as reported (without amendment) from the Standing Committee on Indian Affairs and Northern Development.
Mr. Len Marchand (Parliamentary Secretary to Minister of Indian Affairs and Northern Development) moved:: That Bill C-9 be amended
(a) by deleting "9.2" in Clause 1 in line 14 on page 1 and substituting therefor "9.1"
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(b) by deleting Clause 2 on pages 1 and 2 and substituting the
following therefor:
2. The said Act is further amended by adding thereto, immediately
after Section 9 thereof, the following section:
"9.1 The Commissioner in Council may make ordinances to increase or decrease the number of members of the Council, but the number of members shall not be fewer than 12 or greater than 20."


[Stage Direction]
Motion agreed to.
Hon. Jean Chretien (Minister of Indian Affairs and Northern Development) moved:: That Bill C-9, "An Act to amend the Yukon Act, the Northwest Territories Act and the Canada Elections Act," as amended, be concurred in.


[Stage Direction]
Motion agreed to.
Joseph Jacques Jean Chrétien: that the bill be read the third time and do pass.
Motion agreed to and bill read the third time and passed.


PETROLEUM ADMINISTRATION ACT
Donald Stovel Macdonald: that Bill C-18, to impose a charge on the export of crude oil and certain petroleum products, to provide compensation for certain oil import costs and to regulate the price of Canadian crude oil in interprovincial and export trade be read the second time and referred to the Committee of the Whole.
He said: Mr. Speaker, this bill to enact the Petroleum Administration Act provides legislative support for three major themes of government petroleum policy as set forth in the Prime Minister's statement of last December 6 and as put before the first ministers' conference on energy in late January. The agreement which was reached among first ministers on Wednesday, March 27, represented the achievement of a broad consensus among the provinces and the federal government that these themes represent three essential constituents of a national oil policy.
Government policy has developed in response to the major disruptions of world oil markets over the past several months. These disruptions took the form of both temporary restrictions in world supplies of crude oil, and perhaps more importantly in a massive upward movement of world oil prices as producing countries began to exercise monopoly control over world prices.
In response to these forces, government policy has been to articulate three principles: First, that the price of Canadian crude oil should move upward to encourage exploration and development in Canada and thereby ensure further availability of our own resources, which will necessarily be more costly because they are both physically and technically less accessible, and also to ensure a continuing capacity for self-sufficiency. There is no reason why Canadian crude oil must move to interna-

tional levels which no longer represent any fundamental reconciliation of supply and demand in world markets. Second, the approximate one-half of Canadian crude oil production that is exported should be sold at a fair and reasonable opportunity price in United States markets, that is, at a price consistent with the price which the U.S. is paying for other imported oil. Third, the proceeds from the sale of oil in the U.S. at a price higher than the domestic Canadian price should be employed to reduce the exposure of consumers in eastern Canada who would have otherwise had to pay full international prices for oil and oil products. We have described this third principle as embracing a single basic crude oil price to all Canadians except for transportation differentials.
These three themes or principles which, as I have said, have the support of all of the provinces are embodied in this legislation, for which we seek the approval of this House. Part I of this act deals with petroleum export charges, Parts II and III with domestic oil price restraint and Part IV with petroleum import cost compensation.
I believe that by this time the House understands well, Mr. Speaker, the background to the development of this policy. The nationwide address by the Prime Minister (Mr. Trudeau) on December 6, the statement by my colleague the Minister of Finance (Mr. Turner) to this House in moving second reading of the Export Tax Act in early January, and the analysis and statements put before first ministers at the energy conference in late January, are all important and comprehensive expressions of both government policy and the reasons for it. If I may say so, Mr. Speaker, while we would make no particular claim for prescience with respect to the rapidly altering world oil scene over the past few months, the record will show that we have been entirely consistent in our view of the policies which Canada would have to adopt in adjusting to these developments.
I would like to review very briefly the major events in this development commencing with September 4 last year. On September 4 the Prime Minister called upon the oil industry, among others, to support a program of voluntary price restraint. This request was part of a general antiinflationary program and was addressed to the oil industry, where crude oil prices had increased by some 95 cents over the previous nine-month period.
It is fair to say that 95 cents looked at the time as a very significant price advance, particularly since world and Canadian crude oil prices prior to these advances had remained relatively stable for more than a decade. Ninety-five cents was, of course, a very modest herald of what was to come. It did nonetheless represent an increase of crude oil price of almost one-third and brought the average price of crude oil and equivalents in western Canada to approximately $3.80 to $3.85 at the wellhead or $4 at Edmonton.
The government's request to the oil industry on September 4 of last year was voluntarily to maintain this average price of crude oil in western Canada and hence the prices of products produced from this crude oil. At that time the government acknowledged that for those refiners dependent on imported oil no such over-all restraint would be
April 8, 1974

possible, and that they would be allowed to pass on documented and approved crude cost increases in the form of higher prices.
When the freeze was instituted, product prices immediately east of the Ottawa Valley line were one cent and two cents lower than those in the west. Eastern gasoline and heating oil prices were permitted to rise by an average of two cents on November 1 and an additional average of five cents on December 1 for which the major tax increases of October 16 in the Middle East and November 1 in Venezuela were principally responsible. These product price movements led to a five cent to six cent differential which has existed in markets served by imported oil since December 1 and will continue to exist until approximately May 15. I will return at a future stage to the events that will occur on or about that date.
Having frozen domestic crude oil prices at $4 at Edmonton, the government was next advised by the National Energy Board in mid-September that continuing increases in international oil prices implied that sales of Canadian crude oil on a $4 basis in United States markets would no longer be just and reasonable nor in the Canadian interest. Rather than permit the industry in Canada to attempt to manage a two-price system from which the benefits would flow exclusively to the industry, the government's immediate response was to give notice that it would seek the approval of this House to levy an export tax equal to the difference between the value of Canadian crude oil delivered in the United States and the average price of all imported oil prevailing in these markets. The export tax, the manner of its imposition and the disposition of its proceeds are now, I am sure, sufficiently well understood, at least as that regime has operated until March 31 of this year, that I need not dwell on it further for the moment.
Nor will I dwell at any length on other developments through this period except to note that government thinking and policy took two broad directions as a result of the exposure of one-half of our country to the increasing difficulties of international oil supply and pricing. The first of these directions was to carry on a very intensive and searching review of Canadian policy with respect to all energy sources. This review led to a series of federal positions which were laid before the first ministers' conference on energy and which have resulted in a continuing and fruitful interchange with provincial authorities in the development of major initiatives in nuclear energy, coal and hydro-electric development and transmission. The second direction was to focus on Canada's oil and gas systems which led, through extensive federal-provincial consultation and the first ministers' conference on energy in January, to the final agreement reached by the first ministers on March 27.
I have already described the origins of the export tax. The imposition of an additional $4 in tax by OPEC countries on January 1, 1974 led quickly to the major decision not to pursue international prices as the pricing norm for Canada. This in turn led to the recognition that, if eastern Canada were to be cushioned from these international prices, then a cost compensation program would be necessary. Finally, the combination of an independent Canadian price and a willingness to pay cost compensation demanded the establishment of a one-price policy country-
Petroleum Administration Act
wide and the eventual elimination of the price differentials that had come to exist between eastern and western Canada.
The most essential element in the establishment of these policies was to settle upon a rational crude oil pricing policy for Canada that would be equitable to both producing and consuming interests and, in the longer term, in the best interest of Canadians. The federal government's central position has been that this price must be such as to ensure the development of Canada's further potential resources, whether in tar sands or frontier areas. We have recognized that the notion of a price which would continue to encourage these developments was conceptually clear but that such a price was and is in fact determined by a host of interdependent factors, many and perhaps most of which are difficult to assess with precision.
We recognized from the outset that reasonable men would differ in their estimate of this price and that a consensus about it would only emerge from an intensive process of analysis and discussion. We recognized, of course, also that the level of this price had major implications for producing provinces and their right to a return from this depleting resource to ensure their continuing development and prosperity. At the same time a very substantive upward movement in price would represent a very major transfer of income from consumers of Canadian oil. We have always been mindful as well of the consequences for the Canadian economy of a sharp advance in the price of crude oil and the structural readjustments and inflationary problems it would pose.
In retrospect, while the differences that have emerged in this consultative process have occasionally seemed sharp and irreconcilable, I would like to join with the Prime Minister in asserting that federalism triumphed in reaching a solution to a problem which was at its heart a matter of relative equities and sharing within our country.


An hon. Member:: Thank God for Alberta.


Donald Stovel Macdonald: Thank God for Alberta, sir, and for the other nine provinces. My presentation to the first ministers' conference in January and the table of a possible distribution of costs and benefits which I presented at that time have in fact set the pattern within which this solution was reached. That pattern assures a restrained price to consumers, an increase in return to producing provinces, a limitation on increase in general equalization payments which would otherwise have fallen on the general taxpayer, and a specialized kind of equalization; that is, the oil-cost cushion for the benefit of eastern Ontario, Quebec and the Atlantic provinces.
Let me now move to the agreements which were reached among the first ministers on March 27 and, in the process, I hope, clear up any misunderstandings which may yet remain in respect of the policy which will be followed in this country over the next 12 to 15-month period.
In a matter as technically complex as oil which flows from many origins and in many qualities it is always risky to speak of averages. Averages may be struck at various times and various places and produce very different results. In continuously speaking of the frozen price of
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April 8, 1974
Petroleum Administration Act
western crude as having an average value of $4 we have always tried to be clear that this average was struck with regard to oil at Edmonton. Embraced within this definition of oil is conventional crude, synthetic crude oil and two naptha-like liquids called condensate and pentanes plus which are most frequently blended in the crude stream which flows from Edmonton.
We have always tried also to be clear that this average if struck at the well-head broadly defined and not at Edmonton would approximate $3.85. The difference between these two figures represents the average gathering charges to move oil from its source to its major gathering points.
The Prime Minister (Mr. Trudeau) in his statement to the press on the evening of March 27, and in his statement to this House on March 28, made it quite clear that the agreement specified a $6.50 average well-head price. A further explanation of the details to the House generally was interrupted by hon. members, but the Prime Minister explained these to the Leader of the Opposition (Mr. Stanfield).
On March 28 Premier Lougheed announced his understanding of a $6.50 well-head price as involving an increase of $2.70, apparently basing his calculations on conventional crude prices alone. I regret that there was no consultation with us because quite frankly our own estimate of the amount needed to be added on to achieve a $6.50 average well-head price was $2.65. We recognize that a precise measure of this average is difficult to arrive at for the reasons I have already mentioned, though we would have liked an opportunity to consult further with Alberta officials in order to remove all misunderstanding. We have, however, acknowledged in this House that the difference between $2.70 and $2.65 arises from a misunderstanding, but it is not a point fundamental to the major policy understanding accepted by the premiers on March 27 last and, therefore, not an issue which we wish to press further at this time.
In summary then, all western crude and equivalent prices rose by $2.70 on April 1, leading to an average price of $6.70 based on Edmonton and $7.20 delivered in Toronto. Given our intention to zone the major markets in Toronto and Montreal for crude pricing purposes when the Sarnia-Montreal pipeline is in place, we are also employing $7.20 as the basic price in Montreal on which cost compensation will be paid. As the House is aware, I have asked the industry to refrain from passing on these higher crude ' costs in higher product prices until a substantial proportion of their lower cost inventories have been worked off. In 45 days, however, product prices may be expected to rise by approximately eight cents west of the old Ottawa Valley line and three cents east of that line to establish approximate product price equality in Montreal and Toronto on that date.
First ministers also agreed that the federal government should receive all of the proceeds from export charges on oil in order to permit it to provide the substantial amount of cost compensation which will be required in eastern Canada to maintain the one-price concept. In committee, I shall provide this House with estimates of the sums involved.
I would note at this time that the petroleum export charge section of the legislation before us today proposes

the levy of an export charge on both the broad definition of crude oil as defined under the Export Tax Act and on oil products to be specified by regulation. The absence of a charge on products has meant that exports in that form have not borne their share of taxation. Now that an agreement has been reached for 12 to 15 months and the major principles of a national oil policy have been laid in place it is important to move to close this possible loophole of tax avoidance.
Finally, I should like to give the House notice that I shall be moving in committee to amend the $4.20 export charge for April to read $4. The $4.20 recorded in the legislation was arrived at when we were basing our calculations on the averaged price for oil at Edmonton. These calculations will now be made on an averaged well-head price which does not include transportation charges for delivery to Edmonton.
Part II of this act entitled "Domestic Oil Price Restraint" legislates a federal authority over crude oil pricing in interprovincial and export trade and provides the mechanism by which the agreement reached with the provinces can be ratified by the federal government.
Part III of the act, which we do not intend to proclaim at this time, provides a solely federal mechanism for maintaining control of crude prices in interprovincial and export trade should it at some time be required. This could happen if challenges to provincial legislation by private litigants, like those now in the courts, are successful or in other ways such as the failure of agreement on prices in the future. In these or similar eventualities it will be essential to have a federal mechanism which can take the place of provisions under Part II.
Parts IV and V set forth the terms, conditions and measures by which the Energy Supplies Allocation Board will act as the government's agent in administering the import cost compensation program. As the House is aware, shipments of crude oil eligible for compensation into early March have been covered by supplementary vote in the fiscal year 1973-74 and the program is being administered by my department. The legislation before the House today provides a transitional mechanism to permit the Energy Supplies Allocation Board to assume obligations arising out of the first quarter but not covered by the supplementary vote.
The governor in council will this week approve regulations with regard to the earlier period which will limit the amount of compensation that will be paid for identifiable increases in post-government taxes, increased bunker costs of transport and a provision for retroactive increases in cost which may occur as a result of increasing host government ownership of the producing companies.
It is the government's intention, as will be clear from the legislation, to embody this same set of principles in providing compensation after April 1. I would remind the House that at the present time the federal government has no power, nor does it intend to seek power, to control product prices down to the retail level. Several provinces have already acted to cushion the effect on consumers at the retail level. Nonetheless, extensive monitoring and auditing provisions are provided under this legislation to ensure that refiners who receive compensation are follow-
April 8, 1974

ing wholesale pricing practices which are consistent with this compensation.
I would only conclude by saying that this is a very important piece of legislation in the evolution of national oil policy. It provides the legislative support which will be required to maintain these national policies, national policies which as I have said have received the concurrence of all the provinces and, I believe, of the Canadian people generally.


Mr. G. W. Baldwin (Peace River):: Mr. Speaker, I join with the minister at the outset of my remarks in saying how glad we were to see the first ministers arrive at some form of consensus. That does not mean necessarily that we approve of everything in that consensus. I believe this is one of the few occasions when the first ministers did get together and work out a form of agreement, but what bludgeons, what blackmail, what advantages, what favours or what anaesthetics were administered during that meeting I do not know. At least it was a meeting which resulted in some decisions being arrived at, and I am glad for that reason.
I want to say through you, Mr. Speaker, to members of this House that it is our view, and certainly it is mine, that merely because the provincial and federal governments arrived at a decision is no reason that this House, this parliament and certainly not this party should rubber-stamp and accept without challenge, without examination and without the closest possible legal study, the results which were arrived at. We must ensure that the results which were in fact arrived at at that meeting are implemented in this legislation.
The minister quite glibly told us that everything in this bill is the result of the federal-provincial conference. We are not so sure about that. My friend, the hon. member for Calgary North (Mr. Woolliams) asked a very searching question today. As I think was his duty, not knowing what the answer would be, he asked the minister whether there had been discussions with the provinces following the first ministers' conference and whether this bill in fact represents the views they have considering what should be in the bill as a result of their discussions. The minister did not answer that question. He could not answer it. In fact he said that they decided in cabinet what would be done, implemented it in legislative form, brought it down and gave it first reading. Now, it is up to the provinces to look at it and decide. As a result, it will be our intention to make very certain during the committee meetings before this bill receives final approval, and certainly before it receives third reading, that there is ample opportunity for the provincial representatives and others to examine the legislation to make certain it in fact contains the arrangement arrived at at this first minister's conference.


Donald Stovel Macdonald: Mr. Speaker, I wonder whether I could ask the hon. member a question? Is he suggesting, as the hon. member for Calgary North suggested, that we ought to have departed from the long standing practice in this House and shown the bill to the governments outside the House before we gave it first reading.
Petroleum Administration Act


Gerald William Baldwin: My hon. friend has been around here long enough to know that I, and the members of this party, have too great a regard for the rules and traditions of this House to do anything like that, although it might appeal to him and his friends.
I am suggesting that before this bill was brought in for second reading and debate it was the minister's duty to have been in touch with the provincial representatives to ascertain their opinion. He could have told them that this is the bill and before it was brought in for debate he wished to know whether or not they were satisfied that this, in fact, represents in its context the terms of the agreement made. The minister already has indicated that he intends to bring in one amendment at the committee stage. It would have been quite simple for him to have said that he had been in touch with representatives of the provinces of Manitoba, Ontario, Quebec and Prince Edward Island and so on and they had given him their opinions about the bill. Perhaps he might have been told that in respect of certain aspects of the legislation there was a variance between what the bill says and what the agreement was, so he might have said it was his intention, having studied it and discussed it with his colleagues, to move certain amendments. That is, I suggest, what the minister should have done.
This is the situation and the minister can drag all the red herrings he wants to into it.


Donald Stovel Macdonald: Will you answer the question now, please.


Gerald William Baldwin: I have answered the question. The minister knows the answer as well as I do. He has been afraid to submit the bill to the provinces to secure their reaction to it before he brought it in for second reading. I want to serve notice on the minister now that it will be a different ball game than it was last winter when he piloted through the House the bill dealing with energy allocation. At that time the minister introduced at the committee stage a very pernicious document which we did not accept then but which, having expressed our disapproval, we did not challenge as we should have to the point of not letting the bill go through the committee. What was employed at that time was the doctrine I call the Macdonald doctrine in respect of committee hearings. Witnesses who appear before any committee who are related to the department and who are, in any sense, advisory to the minister can give only such evidence as may be approved by the minister. They must be under the minister's control while giving evidence.


Donald Stovel Macdonald: What about ministerial responsibility?


Gerald William Baldwin: In the case of this minister, it is ministerial irresponsibility. He is the most irresponsible minister in this government and that is saying a good deal. I say through you, Mr. Speaker, that this minister will not get away with that. It is our intention, because of the nuances contained in this bill and the measures proposed in it, to make sure at the committee stage that it receives a most thorough and searching scrutiny. This is our duty. This is the reason we are here. All the thumping and screaming by the minister will not deter us one iota from responding

April 8, 1974
Petroleum Administration Act
to our duty. We will ensure that this bill receives this kind of scrutiny. It will be our intention to make sure that witnesses are called who are essential and that when the departmental witnesses are called for the purpose of finding out facts about the bill they will not hide behind the apron of the minister.
Now, I should like to come back to the point I was making when I was so rudely interrupted by the minister.
I was dealing with the question of the federal-provincial conference. I think such conferences are good. They are a vital part of our life. However, I think this House, this Parliament, has a responsibility not to be a rubber-stamp for the decisions of 11 heads of state who gather together like sultans and emperors to decide the destiny of Canada.
I appreciate their coming together. I think this is an essential part of the process of government in this country. We must remember, however, that some of these 11 leaders have either just come out of elections or are headed into elections. Since this federal provincial first minister's conference was held there has been one election.


Donald Stovel Macdonald: A successful one.


Gerald William Baldwin: Yes. It was a successful election for Mr. Regan and I congratulate him. He was a very distinguished member of this House. Unlike some of the rubber stamps sitting opposite, he was not afraid to get up and challenge the Liberal government when he believed it was wrong. I am sorry that some of the backbenchers of the Liberal Party do not take the lead of the Premier of Nova Scotia, since they know that the government is often wrong.
The point is that one government has had an election and another government plans to hold an election on the 29th of this month. The federal government stands across the way shivering, shaking and trembling in the fear that it will be forced into an election before too long by some unnamed parties in this House which I will not mention at this time. There is nothing wrong with this, but we must remember that when the leaders or the 11 heads of government get together to consider what they propose to do they take into consideration in their calculations what the benefits are to their governments in the prosecution of an election. I think for that and other reasons it is incumbent upon this House, despite the fact that there has been the seal of approval placed upon the agreement, not necessarily upon this bill, to ascertain that the bill does in fact conform with what was agreed upon and then even if it does to consider whether it is good for all parts of Canada. That is our duty and I do not intend to be intimidated by the minister from the exercise of that duty and responsibility.
Let us make a quick analysis of the bill, because I do not think I need to take too long to deal with it. Unlike other bills, it is divided into five parts instead of three. The first part, as the minister told us, deals with the question of the tax or charge. He calls it a petroleum export charge. I do not think the name matters a great deal; it smells just as sweet by any name. Then, parts II and III complement each other and deal with price fixing mechanisms for

petroleum and petroleum products in Canada. Part IV deals with the compensation to importers to provide some cushion for consumers in eastern Canada as a result of the high prices which they have had to pay for oil coming in from overseas. Part V, of course, is a procedural section.
I want to say that when you look at all the clauses in the bill you find that some very far-reaching powers and authorities are granted in it to the federal government, powers which I do not think have ever been granted in peacetime to a federal government. I went through the bill and I found that it contains 66 clauses of which two or three are purely functional but 22 give complete discretion to either the government, the governor in council, boards or the minister. In other words, more than one third of the clauses vest in the government substantial uncontrolled discretionary powers. In addition to that, there are four regulation granting clauses which in 24 instances grant the power to the governor in council to act by regulation and order in council. This indicates the very substantial extent to which we are being asked in the bill to trust this government with its sorry and chequered history of starts and stops, reverses, mistakes and errors with regard to the whole problem of petroleum products going years back from the time when this government was asked by members of this party and members of the NDP to look to the future and build a pipeline from western Canada to Montreal. This plea was rejected with laughter and scorn by the Liberal government right up to the most recent mess, the great mystery about the Roumanian oil which has yet to be solved in the House in which the Minister of Supply and Services (Mr. Goyer)-otherwise known as the minister of everything else-and the Minister of Energy, Mines and Resources (Mr. Macdonald) got this country into a pretty sorry pickle as a result of which we will lose some $30 million. $40 million or $50 million dollars.
This is the government which is asking us to calmly and confidently vest in it all these extraordinary powers which are contained and itemized in this bill. This is the government which, in the words of the minister a few minutes ago, had such great prescience in anticipating all the problems with regard to the oil and petroleum industry. What a farce, what a sham for this minister to have the unmitigated gall to rise in the House and say that he and the government have been able to anticipate the twistings, turnings and problems with regard to the petroleum industry in Canada. I think it is shameful for the minister to take that position. As a matter of fact, although I do not have much time, I will go through some of the items because I suspect that the minister would appropriate to himself this degree of perfection in connection with his dealings with petroleum products.
I find the following item in the Toronto Star of May 7 of 1973; "Prime Minister says Ottawa should not control our energy prices". Only a year ago this great Prime Minister (Mr. Trudeau) of this great government had the supernatural powers to anticipate what will happen!
I find here another interesting item in the Globe and Mail of November 5, 1973 which reads: "Macdonald denies urging cabinet to buy oil firm". We know all of the comings, goings and leakings which went on at that time about the government wanting to buy one of the great multinational oil firms, taking it over and operating it.
April 8, 1974

First it was so, then it was not so, and then a statement was issued on Saturday which read as follows:
In a statement issued on Saturday, Mr. Macdonald described as "entirely erroneous" a Globe and Mail report that the cabinet had rejected his proposal to buy either Shell Canada Limited or Gulf Oil Canada Limited. He said no such proposal was placed before cabinet.
There is a different story behind that, I believe.
Then, we have the following item: "Secret cabinet order waters down plans for energy policy". That was the leaked cabinet order by which we learned the Minister of Energy, Mines and Resources ascertained that his proposals had been watered down by the federal cabinet and that what he had proposed was not going to be brought about at all.
Then, he was over in Venezuela, and here I have the March 9, 1974 issue of the Winnipeg Free Press in which the following item appears: "Is Ottawa about to copy the Corporacion Venezolana de Petroleo ..." Perhaps the minister will correct my Spanish. I hope he is better in Spanish than he is on petroleum. It goes on to read:
Energy Minister Donald S. Macdonald, here last October on a whirlwind visit, says definitely no.
They are not going to have a petroleum corporation, he said.
The cabinet discussed the idea before the energy crisis took hold, says our energy minister, and before the Canadian government started to worry about supplies of Venezuelan crude oil going to eastern Canada.
Then we had the great Kafuffle. When the minister comes to the committee, we will let him give evidence. In the light of his record, we will ask him to take an oath before he gives evidence so we will have him tied to the oath in any event.


Donald Stovel Macdonald: More falsehoods from Baldwin.


Gerald William Baldwin: I do not know what newspaper the following item is from. I believe it is from the Gazette, and it reads: "Macdonald may be exaggerating to get government projects across".


Donald Stovel Macdonald: You wrote it out yourself.


Gerald William Baldwin: This must be more than his usual type of exaggeration. The item reads:
Energy Minister Donald Macdonald's sudden focus on Arab threats to eastern Canada's oil supplies may constitute an exaggeration aimed at promoting some of the federal government's favourite petroleum plans.
Perhaps, we should call him the Minister of Energy, Mines, Resources and Exaggeration. The article goes on to read:
The speech, filled with references to "potential crisis" and "possible dangers", had the effect of suggesting two federal government proposals-the removal of the Borden Energy line and formation of a national petroleum corporation may be necessary to avert threats to and preserve Canadian oil imports.
The minister has been the busiest little talking minister except for the Minister of Agriculture (Mr. Whelan).
Then, we had the great situation about a crisis in eastern Canada, about the short fall in oil coming into the country. The minister pounced on the force majeur clause.
Petroleum Administration Act
He blamed the multinational corporations, and said they were using force majeur. Mr. Speaker, what was it we were looking at then-a 200,000 barrels a day short fall or a
300,000	barrels a day short fall? Of course the minister had not taken the Shaheen refinery into consideration. He was simply interested in generating a head of steam, in making exaggerations and providing distortions so that he could get away with his legislation. That is what he was saying on November 23, 1973, but suddenly he was faced with a telegram sent by J. A. Armstrong, President of Imperial Oil, as follows:
We are disturbed by the implications of your statements in the House of Commons on force majeur as reported in the news media.
Imperial has had no cut-back in its deliveries of crude oil from Venezuelan suppliers nor have we been advised of any cut-back.
Force majeur is a standard clause in supply contracts within Canada and abroad.
In the case of our supply contracts for Venezuelan crude oil we are not aware of any occurrences which would justify a cut-back or re-allocation of our supplies.
Of course, Mr. Armstrong was a witness who appeared before the committee. He praised the bill which the government introduced. He was the government's white haired boy because he and the government got on well at that time-I may say he and some other members-with regard to the deletion of the combines investigation clauses which were then an issue. But then Mr. Armstrong completely cut the feet from under the minister with regard to his statements on force majeur.
I have dozens and dozens of these little billet-doux, Mr. Speaker, but I am not going to take up the time of the House reading them. The fact remains that we in this party on this side of the House are justified, by the track record of the government, in saying that the government is not entitled to be trusted. It must make out a very strong case in order to receive the powers which it is seeking. Its track record of indiscretion, distortion and deception is so substantial that we have come to the stage where we cannot take for granted any statements made by this minister with regard to petroleum problems.
All that will enter into our calculations when we consider what our actions will be with regard to this bill. Now, having disposed of the minister-


Some hon. Members:: Oh, oh!


Gerald William Baldwin: -I would now like to deal with some aspects of the legislation. Members on the other side may applaud, but I consider those factors to be a vital and integral part of this legislation. Whenever I look at this legislation and see that the minister will have the power to do this and the discretion to do that, and I see the minister in effect sitting in the centre of the bill, with his record for false dealing, his incapacity and inability to deal with what happened, the deceptions he has practiced, albeit quite involuntary, more from ignorance than anything else, I say that we cannot separate this minister from this bill in our approach to it, nor do we intend to do so.


An hon. Member:: He should resign.

April 8, 1974
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Gerald William Baldwin: I do not think the minister should resign. I think he should be compelled to live with the mess he is creating. I think that would serve him right.


Donald Stovel Macdonald: And your colleagues are compelled to live with you.


Gerald William Baldwin: Mr. Speaker, I may have to ask you to protect me from the minister's remarks.


Donald Stovel Macdonald: Tell us why you were fired from your job.


Gerald William Baldwin: I would have preferred if the minister had introduced Parts I and IV of the bill dealing with the imposition of the charge and compensation payments. So far as we are concerned they could be passed fairly rapidly, submitted to committee of the whole, and completed. They have been the subject of practice and precedent. If my recollection is correct the minister and the government have engaged in the imposition of the charge for four months without benefit of legislation, and for several months the government has paid the subsidy without benefit of legislation. With some scrutiny, some changes and some recommendations, Parts I and IV might have gone through rapidly if they had been separated from the rest of the legislation. However, the government has not seen fit to do so. That is its practice, and of course it has that right. But the other parts of the bill warrant far more detailed study in the House and, so far as we in this party are concerned, we will see they get that.
Now, dealing with Part I, this export tax or charge is a comparatively recent phenomenon, at least to the large extent to which it is being engaged in presently by this country and other countries. We are not going to challenge it. We are not going to vote against it. However, I think I would be wrong if I did not call attention to some of the potential dangers regarding a charge of this kind, and if I did not speak about the entire philosophy of the export tax, its morality, and its being a double edged sword. Where does it stop?
All over the world we hear talk of other countries, producing commodities which are in short supply, feeling free to engage in a form of international arrangement, such as the OPEC countries have, denying the world a full, assured supply of those commodities. The Arab OPEC countries were the first to raise this question. Maybe they had a point. I could understand them when they said that all the civilized countries of the world were gripped in inflation, and they would meet that inflation by imposing higher charges for petroleum products from their countries, petroleum which was in decreasing supply and which cannot be self-perpetuating. The Arab countries said to the western world, "Search yourselves. Find ways and means of dealing with inflation. Then, we will give some thought to reducing the cost of our petroleum products." I think that needed to be said, but we have to be aware of the effect on international inflation.
The Prime Minister (Mr. Trudeau) and the Minister of Finance (Mr. Turner) shrug their shoulders and say, "We cannot deal with inflation in Canada. It is worldwide in scope." That may be true enough in part, but there are substantial elements of it within Canadian control, just as

there are substantial elements within the control of OPEC countries and within the control of other countries.
If all the countries of the world took the same position as the Prime Minister and the Minister of Finance and said, "This is worldwide. We cannot touch it," that would constitute a very serious admission that inflation lies entirely outside the control of mankind. I do not think that is right. I think man has the capacity and ability on a co-operative basis, both nationally and internationally, to deal with the problem of inflation. I am not going to take exception to what is being done here, but I do say that at the time of passage of this particular part of the bill we should give serious concern to what could happen to the world with a series of export charges levied by producing countries, the combined effect of which could be felt not only in Canada directly but in an indirect way through the cost of the products which ultimately come to this country.
Mr. Speaker, I like to think that neither I nor my party have any quarrel with the principle that sudden, unexpected and unusual, windfall profits which accrue to companies should be shared by society. However, that statement has to be taken in conjunction with our belief in free, private initiative and enterprise as the best way to develop this country. We believe that such charges must take into calculation the need to provide for continuation of these companies in business and to provide them with adequate funds to carry on exploration, development, refining and marketing of their product. It then becomes a question of sharing those windfall profits but to the extent that they constitute an unearned increment, then I think the state is entitled to share in them. For that reason this party will not challenge this aspect of the legislation. The whole question of unearned income has not been given enough thought in this regard or in regard to a number of other things.
We are in a desperate position in this country with regard to the sale of land because we have allowed such sales without taking into account that there are substantial unearned increments involved which should belong to the state. But certainly you must give, and in doing so it must be contemporaneous with giving to the private sector, the tools and weapons to do the work that they can do better than the public or government. I refer to the things which attract them and, in this particular aspect context, I refer to the exploration, the development, refining and marketing of petroleum products. We have no objection to that. We are concerned to some extent with the way the clauses are drawn which give effect to that proposal.
Part of the clauses I refer to give very wide and vast powers of discretion to the government in dealing with exemption from this charge. For example, clause 11 in Part I provides that the Governor in Council can, on being advised by the board that it is in the public interest to do so, either generally or in respect of a single transaction, exempt any exportation of oil from the charge imposed thereon in respect of any month. Now, by Part I, after the month of April has elapsed, we are giving to the government the power to impose a charge of up to $8 per barrel, solely within the discretion of the government flowing
April 8, 1974

from rudimentary and wide terms of reference. At the same time we are giving the government the power to exempt imposition of that export charge.
I recognize that it is neither possible, feasible nor wise, to bring back legislation of this kind and have it dealt with two or three times per year, but I am going to suggest that when we are forced to give that kind of discretionary power to a government, including the right to give exemptions, there should be an accounting to this House. It is not good enough that once a year the minister brings in a report which may come 1 lA years after the event. I would like to think that during the committee hearing our party would propose an amendment whereby the boards involved in this legislation, and the minister, will be required to account to a committee of this House charged with a special responsibility with regard to legislation of this kind. This would permit the people of Canada, acting through members of this House, by a committee, to examine, for example, why charges have been fixed at a certain rate; and, if the government sees fit to give exemption of one company or one type of petroleum product for a substantial sum, why this was done. I am not saying that the government would act illegally or unwisely but I suggest that it is a far, far better thing for a government to know that it will be subject to close and searching examination by a committee of this House from time to time as to the use of the uncontrolled, discretionary powers of this House.
The same generally applies to Part IV of this bill, the import cost compensation. This is a discretionary amount and is covered in clauses 51, 52 and 53. Clause 51 says that the import cost compensation may be paid to an eligible importer. He is defined as a person who at a certain stage has voluntarily maintained a level of prices for petroleum products obtained from imported petroleum at the level suggested in prescribed manner, and so on. Clause 54 goes on to say that there may be special cases where in the discretion of the board which has been indicated to the government of Canada that:
... the board may, if it is of the opinion, that it is in the public interest to do so, recommend to the government of Canada that an additional amount of compensation be authorized for the importer in respect of that petroleum.
There may be some cases where that is justified, but I would think that where you give to any government the power to impose a tax at a fixed rate, but a flexible tax, at its discretion, a tax which may vary from month to month and at the same time give to that government the right to exempt certain people from the effect of that tax, then the House should retain some form of supervision over what is done.
Let me deal briefly with Parts II and III of the bill, Mr. Speaker. Those are the parts which constitute the price fixing mechanism. The government and the minister may call it what they want, but there is no doubt that this is a mechanism for fixing prices in Canada with regard to petroleum products. It is set out quite clearly in clause 20 as follows:
The purpose of this part is to provide legislative authority for measures that will, so far as may be practicable, enable the government of Canada
(a) to achieve a uniform price,-
Petroleum, Administration Act
That is a laudable objective. I am not quarrelling with it and I am not going to challenge it on a constitutional ground but I point out to the minister, to the government and to members of this House that there are very grave doubts about how far a federal government may go in establishing, through these means, a price fixing mechanism in this country. This House is not the forum for dealing with constitutional cases and I do not want to do so, but it is possible that those aspects of the bill may be challenged at some time. It seems to me, however, and this is purely a private opinion, that there were other mechanisms which might have been adopted.
Price fixing lies exclusively within provincial jurisdiction. Just thinking out loud, for the life of me I cannot see why the consuming provinces do not take upon themselves the responsibility of establishing a price which they consider to be, in effect, the price fixed by the agreement. The agreement was made; they arrived at a price. Say the $6.70 which the minister referred to was a reasonable price, now the minister and the government have seen fit to introduce federal legislation of some doubtful constitutional character. I think there were other means by which it could have been done. Certainly, the province could have done it and it could not have been challenged. It is certainly in the interests of the consuming provinces to implement the federal-provincial agreement in a legislative form or, if they desire, in another form. There are suggestions in this bill. Clauses 21 and 22 state an agreement can be arrived at between the federal and provincial governments. It goes on to state that agreement will be implemented.
It is well-known constitutional law that one government cannot delegate authority to another government. That was held in one case in particular dealing with a marketing board in Prince Edward Island. Dickens said the law is an ass. Probably it is at times. However, the Supreme Court went on to say you can delegate to a Crown corporation or an emanation of the government. If the federal government and the provincial governments arrived at a reasonable arrangement which they found acceptable, if they arrived at a mechanism whereby they did not see fit to consider the establishment of a Crown corporation, an emanation or a board, it would have the right to receive from both federal and provincial authorities the jurisdiction it requires to exercise this price fixing mechanism. I point that out as I go through and look at these sections.
There is someone else complaining about the government.


An hon. Member:: They are complaining about your speech.


Gerald William Baldwin: Even the young ones know enough to cry about this minister.


Mr. Lefebvre:: You either put them to sleep or make them cry.


Gerald William Baldwin: Unless the Prime Minister acquires enough courage overseas to send us about other business when he comes back, I suggest that during the Easter
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recess hon. members look at clauses 22, 23, 36, 37, 39, 40, 41 and 42.
In interpreting legislation, you take the whole context of the bill to see exactly what it is designed to do. If I were asked to argue this in a constitutional court, it would be my opinion that there would be grave reasons to believe that the act would fall short of being what it ought to be constitutionally. However, we are not going to challenge it on that ground. This is not the place or the time. We will look at it in committee. We will ask that witnesses be brought before the committee. We hope there will be witnesses from the Department of Justice. We hope there will be representatives from the provinces as well as other people who are involved in this. The consumers are vitally interested and the taxpayers are interested.
This bill deserves the most searching and closest scrutiny before being passed. It is our intention to ensure that before the legislation gets through the committee, it will have that kind of study. We feel we will not have discharged our duty if we do not make sure we take the lead in that regard.


Some hon. Members:: Hear, hear!


Mr. T. C. Douglas (Nanaimo-Cowichan-The Islands):: Mr. Speaker, this measure, Bill C-18, is very complex. As hon. members have stated, it consists of five parts. Part I deals with the imposition of the export charge. Part II gives statutory expression to the agreement which was reached at the first ministers conference on Wednesday, March 27.
Part III is to be the sword of Damocles which will hang over the heads of the oil-producing provinces. If they do not reach a voluntary agreement by June 30, 1975, Part III can be proclaimed and the federal government will have the power to set the price for oil. I think that ultimately the federal government must have such power. Whether passing such a provision now is going to create the most friendly atmosphere in which negotiations can be carried on, I very much doubt.
Part IV provides for compensation to the companies for oil imported into eastern Canada. Part V is merely a general section dealing with inspection and penalties for non-compliance. Actually, Part I of this bill is a tax act. The other parts have to do with price fixing and a basis for payments of compensation.
I hope that the minister and the House will give some thought whether or not the whole bill should be treated as a tax bill. If I understood the speaker correctly when he was proposing the bill, he said it would go to committee of the whole. This will preclude the calling of witnesses. It will preclude a detailed examination by a committee which will have more time than the committee of the whole. Therefore, I hope the government and the House will give consideration to sending this bill to the Standing Committee on National Resources and Public Works.
One can only examine this bill if one does so within the framework of a national oil policy. We have been waiting for a long time for a statement from the government on a national oil policy. We have been promised it for a long time. Last June we finally got the first volume of a national policy. It was an analysis, not containing recom-

mendations with respect to an oil policy. We have had great difficulty knowing what is the government's oil policy.
I want to make clear that as far as the New Democratic Party is concerned, we have stated in this House and have presented resolutions to the House setting forth what we think ought to be the major planks in a national oil policy.
As early as January 9, 1973, we were pressing the government for export controls on crude oil. On Monday, May 28,1 introduced a motion on behalf of the New Democratic Party. In that motion and the debate that followed, we asked the government to place export controls on crude oil and petroleum products. We asked for the establishment of a two-price system for crude oil and petroleum products. We asked for an export tax which would take into the public treasury of the federal and provincial governments the difference between the domestic price and the export price. We called for the removal of the Borden Line through the Ottawa Valley.
On October 25, another allotted day, I moved on behalf of this party a resolution calling for a national petroleum company that would be the sole purchaser of both domestically produced oil and imported oil. We pressed for the extension of the oil pipeline to eastern Canada and the bringing of the Interprovincial Pipeline under federal ownership. We also pressed the federal government to enter into negotiations with the government of oil producing provinces with a view to developing, if agreeable, the oil sands under a joint federal-provincial Crown corporation.
The first thing I want to say about this bill is that it is a very firm commitment to a two-price system for oil. While one may disagree with some of the methods proposed- and I certainly disagree with some of the means by which the government proposes to implement this agreement-I think the government is to be commended for taking these steps, which began on November 4, 1973 to implement a two-price system in Canada.
This raises the whole question as to why a two-price system is not to be applied to other Canadian resource materials whose prices are also being escalated by world demand. I think most people in western Canada support the principle of a two-price system. But surely they have some justification when they complain that the only two commodities which are subject to a two-price system are oil and wheat, the two commodities upon which they depend for a very large part of their income.


Donald Stovel Macdonald: Copper.


Thomas Clement (Tommy) Douglas: The minister says, copper. Yes, I think there is some restriction applied to copper but as I recollect there is no export tax to take up the price differential, so it does not help very much.
We have talked a great deal in this House about inflation. Inflation is undoubtedly a major problem affecting every country in the world. No nation has been able to develop an antibiotic which will cure this contagious infection but some nations have been able to cushion the shock of rising prices better than others. We all recognize
April 8, 1974

we cannot control the prices of goods imported into this country, goods we do not produce here-citrus fruits, bauxite, coffee, natural rubber and so on. But we can protect Canadian consumers against the escalating prices of materials produced in this country, particularly those goods in respect of which world demand is pushing prices far beyond a reasonable return to those who produce them.
One of the reasons I differ from hon. members of the Progressive Conservative Party when they talk about a price freeze across the board, is this: if you freeze the price of lumber the main result will be that Canadians will not get any lumber, because if the world price is higher than the price you have fixed the lumber will go out of the country. If we intend to grapple with inflation in this country we should be prepared to treat a number of other commodities in the same way as we propose to treat oil under the legislation before us, that is to impose export controls, fix a domestic price, sell at the world price and pick up for the public treasury the differential between the two prices.
The second matter I wish to discuss arising from this legislation is the pricing policy established in parts of II and III of the bill. The position of the New Democratic Party has been that there is absolutely no justification for giving the oil companies returns higher than those they are now receiving. Prior to the price freeze on September 4 last, the oil companies had already increased their price by approximately one dollar a barrel. This brought them additional revenue amounting to more than $700 million a year. That they are not suffering is shown by the fact that in 1973 they increased their profits by approximately 46 per cent as compared with 1972. One company, for instance, Shell Oil, increased its profits by 58 per cent. Throughout this discussion the NDP has emphasized that the only justification for increasing oil prices is the need to provide funds to federal and provincial governments to enable them to develop new sources of oil so as to ensure adequate supplies when our present proven reserves are exhausted. We believe consumers would not mind being called upon to pay a little more for gasoline and home heating oil if by doing so they could be assured of future supplies at reasonable prices, and knowing they would not be left at the tender mercies of the oil exporting countries and the multinational corporations. But there is nothing in the legislation before us to ensure that the additional funds being received from Canadians will be used for the development of our resources by Canadians, for Canadians.
Reading some newspaper editorials one gathers the impression that the increase of $2.50 a barrel proposed as a result of the first ministers conference constitutes a rip-off on the part of the oil producing provinces. Let me point out that the oil producing provinces will be no better off under the pricing system proposed in this bill than they were under the voluntary agreement which expired on March 31. For instance, Saskatchewan was getting $5 a barrel. In addition, the province was receiving 50 per cent of the export tax, which worked out at approximately $1.60 averaged over their entire production. This gave the province $6.60 a barrel. Now, they are to get $6.50 a barrel. The government of Saskatchewan has set up a petroleum company which purchases the oil from the producers. It is going to pay the oil companies $3.38 a barrel. The differ-
Petroleum Administration Act
ence between that amount and the $6.50 will go into the treasury to give the government the necessary capital for the development of oil supplies which have not yet been fully exploited, and for exploration to discover new sources.
The Province of Alberta was getting $4 a barrel for its oil. It received $1.60 as its share of the export tax, which brought the price up to $5.60. It would now get $6.50. But the Province of Alberta is sharing the $2.50 increase with the oil companies, the government taking 65 per cent and the oil companies 35 per cent. In other words, the oil companies will get 88 cents and the government of Alberta will get $1.62. This will mean an increase in revenue for the oil companies in Alberta of approximately $525 million a year, not counting some of the additional concessions which the minister now appears to be giving them.
On March 27, announcing that this agreement had been reached, the Prime Minister (Mr. Trudeau) said: "This is a great day for Canadian federalism". I suggest it was a great day for the multinational oil companies. They are going to do very well out of this agreement.
Today the Minister of Energy, Mines and Resources said that there has been a good deal of confusion as to what the price would be under this agreement. I do not know anybody who has been more confused than the minister. When the minister and the Prime Minister (Mr. Trudeau) met the press at a press conference on March 27, the following question by the press, which I take from the transcript, was asked:
-what does this mean in terms of domestic price increases for home heating oil and also for gasoline at the gas station?
The minister replied:
-basically in terms of feedstock, we're talking 7 cents west of the Ottawa Valley line and I would think the price should probably remain flat in Montreal and in the east.
It did not remain flat for very long, Mr. Speaker. The next day the minister announced that the price increase would be seven cents per gallon west of the Ottawa Valley and three cents a gallon east of the Ottawa Valley. At the same time the minister sent out a Telex to the oil industry in which he told them that the government was prepared to allow them to raise their retail prices to cover any increased cost of refining, etc.


Donald Stovel Macdonald: Wholesale prices.


Thomas Clement (Tommy) Douglas: I am sorry, wholesale prices, which of course would be reflected in the retail prices. The oil companies then began talking about increasing their price by two cents a gallon for gasoline and home heating oil, despite the fact that the minister said that the estimate of his department was that all the increase that would be warranted would be one-half cent per gallon.
On being questioned in the House the minister went on to say that the government did not propose to scrutinize these price increases in advance but would require the oil companies to justify them. I ask you, Mr. Speaker, what that means. If the oil companies decide that their increased costs warrant an increase of two cents per gallon for gasoline and home heating oil and the minister asks
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them to justify it, they are very good at justifying increases. They can confuse the minister and the National Energy Board, and they have done so many times. But even if it is found that the increase was not justified, and if after long examination they are told that that two cents per gallon was too much, what good does this do the consumer who has already paid the increase in the price of gasoline and home heating oil?
To make the picture even more confused, the Department of Energy, Mines and Resources admits that it omitted in its calculations to include non-conventional oil and the gathering charges that must be added. Already Alberta is selling its oil at $6.70 basis Edmonton. This means that the price in Vancouver, in Toronto and Montreal will be approximately $7.20, not the $7 that the minister was talking about on March 28. In other words, when the present feedstocks are exhausted, the consumers of this country are going to experience an increase in the price of gasoline and home heating fuel of anywhere from 10 cents to 12 cents a gallon west of the Ottawa Valley and five cents to seven cents a gallon east of the Ottawa Valley.
One of the strange things about this pricing mechanism is that we are being asked to approve it although there is no written agreement. Clause 21 of the bill makes reference to an agreement, but goes on to provide that the agreement need not be expressed in any formal document, that the agreement can be contained in reciprocal orders in council. We can discuss this matter later, but I want to point out now that neither this House nor any committee of this House should be asked to pass legislation giving authority to the government to impose a price mechanism on the basis of an agreement that we have not seen and of reciprocal orders in council that have not been tabled. This I hope the minister will do before this bill is dealt with any further.
The fact is that the oil provinces have not gained by this increase of $2.50 per barrel. As I have said, the province of Saskatchewan will be getting slightly less than it was getting before. I believe the government could have kept the price of gasoline and home heating fuels down for the consumers of Canada by giving to the producing provinces a lower price and part of the revenue received from the export charge. The government could quite easily set the price at $5 per barrel, which would have meant an increase of only three cents a gallon for gasoline and home heating fuel, and given the provinces a share of the export tax. Of course, had the government done this it would have meant less revenue for the federal government and a good deal less revenue for the multinational oil companies that control over 90 per cent of the oil business in this country.
The third matter I want to turn to is Part IV of the bill which provides for payments to the oil industry to compensate them for the cost of oil imported into eastern Canada. The New Democratic Party has all along favoured an equalized price across Canada, plus transportation costs, but I must say I have very serious reservations about the manner in which the government is seeking to do this. I do not believe that the burden for equalizing prices should be placed entirely upon the oil consumers, especially where the price of oil enters into the cost of production of farmers, fishermen, the trucking industry and many other groups.

This tax to compensate the oil companies bears no relationship whatsoever to ability to pay. The mere fact that farmers consume per capita more petroleum products than any other group in the country, that fishermen have to buy large quantities of oil, that men in my constituency have to drive 50 to 60 miles to logging camps and sawmills every day, that dock workers have to buy gasoline to enable them to move from port to port, has no relationship to the ability of these workers to pay. The burden of financing compensation in order to have an equalized price across Canada should not fall on any single class of person or on any specific region of Canada but ought to be spread across all of Canada and based upon the ability to pay. The purpose of this provision is to enable the government to pay the oil companies for imported oil which, of course, will be much more expensive than the $6.50 price being fixed by this legislation. The minister says it will cost $1.4 billion.
It is interesting to see how the oil companies are to be compensated. They are to be compensated first of all for increased costs attributable to increased taxes or royalties imposed by producing oil countries. Secondly, they are to be compensated for increased costs attributable to increased participation costs imposed by producing countries and, finally, they are to be compensated for increased tanker costs.
What this parliament is being asked to do is undertake to pay the oil industry for increased costs that are completely beyond Canadian control and, even more seriously, completely beyond our ability to inspect, the books of the foreign companies, to find out whether these costs are genuine or fictitious. This legislation could be an open invitation to oil producing countries to raise their royalties and impose participation costs. Many of the oil companies own their own tankers, and this could be an invitation to raise, on their books at least, the transportation costs. In my opinion this provision could prove to be the greatest rip-off since the CPR went on government welfare. When I consider the business acumen which has been displayed by the Gold Dust twins in negotiating the purchase of home heating oil I shudder to think of the fleecing which the Canadian taxpayer could receive from an industry that is already bloated with the profits it has made out of this so-called oil crisis.
The NDP has constantly advocated the setting up of a national petroleum company to be the sole purchaser of both domestic and imported oil. We have urged the government to enter into bilateral agreements with oil producing countries so as to avoid the kind of rip-off which all too apparently could be possible under this legislation.
The government is being compelled to raise the price of oil for all Canadian consumers so as to compensate the oil companies for standardizing prices in eastern Canada. The consumers of this country are being asked to pay for the mistakes of succeeding governments in following a policy for years of exporting half of our oil to the United States and leaving eastern Canada without an assured supply of oil, completely at the tender mercies of the oil producing countries and the multinational oil corporations. The chickens have come home to roost and it is the Canadian consumer who is now going to be asked to feed them.
April 8, 1974

In conclusion, let me say that there is nothing in this legislation which will prepare Canada for the real oil crisis that we will face within the next decade. We are dealing with a diminishing asset whose life index is only
10	or 12 years. We want to know in this setup as envisaged in Bill C-18 what role there is for the national petroleum company the Prime Minister (Mr. Trudeau) announced on December 6 last. Will it have any role in marketing? Will it have any role in developing south of the 60th parallel, or is it to be restricted to birddogging for the multi-national
011	companies by using tax dollars for research and for exploration, turning its findings over to the oil industry? From the minister's explanation so far one gathers that the national petroleum company, if it sees the light of day, will be largely peripheral and will have no really effective role to play in the oil policy this government is evolving on a hit-and-miss basis.
What is the government's policy for developing the oil sands and heavy oil in western Canada? The amount of money being made available to the oil producing provinces under this legislation will not enable those provinces to develop those oil sands. How do we propose to develop them? Is it proposed that we develop them in the same way we developed the conventional oil fields, allowing the multi-national companies to come in and take the oil so that we lose control of it, or has the government some other plan in mind? I am told that last fall Mr. Herman Kahn of the Hudson Institute had at least one or two meetings with government to sell his idea of borrowing $20 billion in foreign capital to build 10 plants in the Athabasca oil sands, and to pay back that $20 billion, plus interest, I assume, in oil. This means that we are proposing out of the Athabasca oil sands to earmark between $20 billion and $30 billion worth of oil to foreign countries without any regard to our own needs or the future needs of our children.


Mr. Caouette (Temiscamingue):: Right on.


Thomas Clement (Tommy) Douglas: At first, of course, we did not take this very seriously because one is used to the Minister of Supply and Services (Mr. Goyer) having more enthusiasm than he can properly manage, but when the Prime Minister stands up and says he has authorized the minister of odds and ends to investigate and look into this proposal, then I become very much concerned. In the meantime, the Minister of Energy, Mines and Resources (Mr. Macdonald), who knows more about the subject than either the Prime Minister or the Minister of Supply and Services, sits back in embarrassed silence.


Mr. Knowles (Winnipeg North Centre):: Take a bow.


Thomas Clement (Tommy) Douglas: I want to express my concern and the concern of this party for the future oil development of this country. At the same time the government is being inexplicably silent about the development of the oil sands, who is going to develop them, under whose auspices and under what control, it is speaking out most forthrightly about building the Mackenzie gas pipeline.
The minister says we have not made up their minds and it will depend on the report of the National Energy Board, but the fact remains that two emanations of the Crown, the Canadian National Railway system and the Canada
Petroleum Administration Act
Development Corporation are financially involved. Are they financially involved unless there is already some commitment within the government, and what is this commitment; to build a pipeline that will cost $5.7 billion, and probably more, in order to take Alaskan and Canadian gas to the United States, not because we need gas at the present time. If that is not a continental energy policy, then it is suspiciously like one, and I think this House and this country should be warned that we are the trustees of the vast petroleum and gas resources of this country which have been entrusted to our care. The average citizen has no power to control what can be done with their resources. Parliament can give them away. Parliament and legislatures have given them away in the past. If we serve posterity by following the kind of policies now being proposed, in respect of oil and gas, then we will deserve the condemnation of generations yet to come.


René Matte: When dealing with this bill, Mr. Speaker, we must take into account a number of factors and make a number of reserves. Actually, this bill must be seen from a definite point of view, for without the so-called energy crisis, repeat, the so-called energy crisis, this bill would not be before us today.
As it has been demonstrated that this energy crisis was no crisis at all, we are justified in asking whether the government is not rushing us a little into drafting control acts, for this is a factor which must be taken into account. It is always dangerous to increase government control over the activities of a country, whether these activities are being carried out on the economic, financial, industrial or merely human level, and we must always proceed with care.
We understand that the government has a role to play and that it should play it. We understand quite well the good intentions of the government and the minister in particular with respect to this bill. However, the goal to reach for is a single price across Canada. Various pieces of legislation are brought in to do that. One should wonder if that equality in prices is nothing more than a pretence to do something else.
In all that business of the energy crisis, the oil crisis in particular, it seems we can now conclude that the great benefiters, if not the only ones, are multinational oil companies that managed to increase their prices in an entirely artificial way-and I stress, Mr. Speaker, in an entirely artificial way. It is a well known fact that the situation created by Arab countries in particular was entirely fabricated. That could only be temporary because sooner or later those countries would be interested in selling their oil. For some of those countries that natural resource is their single and only source of income.
In view of the situation a bill of this kind must be considered in a critical, and also positive, way. Mr. Speaker, I would like the minister to know exactly where we stand so that if he has any amendments to bring in he can do it himself so as to make things easier. I have learned since I have been a member of this House of Commons that it is very difficult to introduce amendments to a bill

April 8, 1974
Newfoundland Ferry Service
and that it would seem that it should come from the minister himself.
So I hope those remarks will help improve this bill so there can be no adverse effects for Canada as a whole.
Mr. Speaker, the division of this bill in four parts calls for a lot of consideration, of course, and it is warranted.
However, before examining each part of Bill C-18 and before drawing my own conclusions, Mr. Speaker, I would like to call it five o'clock.



PROCEEDINGS ON ADJOURNMENT MOTION


Mr. Deputy Speaker:: 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 Burnaby-Richmond-Delta (Mr. Reynolds)-Air Transport-Strike by firefighters at Vancouver airport-Request that minister intervene; the hon. member for Selkirk (Mr. Rowland)-Finance-Result of court action against person discounting government cheques-Possible amendment of Small Loans Act; the hon. member for Calgary Centre (Mr. Andre)-Energy Heating oil purchased by government from Roumania- Reason for purchase.
It being five o'clock the House will now proceed to the consideration of private members' business as listed on today's order paper, namely, Notices of Motions and Public Bills. Is there agreement concerning the notice of motion to be dealt with?


Thomas Lefebvre: Notice of Motion No. 4, Mr. Speaker.



PRIVATE MEMBERS' MOTIONS


Mr. Walter C. Carter (St. John's West) moved:: That, in the opinion of this House, the government should consider the advisability of reducing the present passenger-car fare and freight rate structure of the North Sydney, Nova Scotia, to Port-aux-Basques and Argentia, Newfoundland ferry service to better conform with the cost of travelling a comparable distance on the Trans-Canada highway system as a more economic link between the province and the mainland of Canada.
He said: Mr. Speaker, I am very happy to be given the opportunity to present this motion. Indeed, I might say that the subject matter of the motion is by no means new to this chamber nor was it new to the last Parliament. On

November 1, 1968 during my maiden speech in the House of Commons, I requested that the government consider the advisability of reducing the present passenger car fare and freight rate structure of the North Sydney-Port-aux-Basques-Argentia ferry service to better conform with the cost of travelling a comparable distance on the trans-Canada highway system.
Today, almost six years later, I am still doing the same thing. Needless to say, Sir, it becomes extremely frustrating to speak about the same problem time and time again, make the same request year after year and have governments treat the problem with their usual complete lack of interest and total indifference. The province of Newfoundland, with the exception of Labrador, is an island province. The ferry service to which I have referred is the only link it has with the mainland of Canada except, of course, by two airline services operating in and out of the province. I think Your Honour will appreciate the importance of my motion in that it stands to reason the 90 miles of water separating this province from the rest of Canada is to us what the trans-Canada highway system is to people living in the other nine provinces. I contend that, for purposes of a passenger-car and freight rate structure, we should not be treated any differently from the other provinces.
In 1949, Newfoundland elected to become a province of Canada. In so doing we brought to this country a wealth of people and a wealth of resources. As a result of our union, Canada became one of the largest land masses in the world joined from sea to sea. Ironically enough, our geographic position, the fact that we enabled Canada to round out confederation and to become a nation stretching from one sea to another, has been the greatest contributing factor in our ability, or perhaps I should say in our inability, to achieve our full potential and to make confederation really meaningful to a large segment of our population.
As part of the terms of union between our two countries, it was agreed that Canada would take over certain services and from that date relieve the province of Newfoundland of the cost incurred in respect of these services, including the then Newfoundland railway which of course included the coastal fleet and other marine services in the province. Twenty years later, in 1969 or 1970, we saw the Canadian government abolish our rail passenger service and commence its deliberate plan to downgrade and, I suspect, eventually phase out altogether certain other marine services, including the coastal fleet. Of course, this was done by the Canadian National Railways with the concurrence of the Canadian Transport Commission and that of the federal government. Having said that, the question arises: How long can we expect to have a ferry service? That question is not as far fetched as it might sound, because who would have thought, back in 1949 including the people who negotiated our terms of union that 20 years from that date the Canadian government and CNR would abandon our rail passenger service? Could any of us in those days have imagined that one day our coastal fleet would be reduced to a mere fraction of what it was at the time of union?
I will not repeat the story of the rail passenger service in our province, which has been abandoned. We have men-
April 8, 1974

tioned this on numerous occasions. My colleagues from Newfoundland and I have brought this matter to the attention of the House and of the government, but unfortunately our pleas have fallen on deaf ears. Suffice it to say that the service was abandoned with the full knowledge of the CNR and the concurrence of the federal government and its agency the Canadian Transport Commission. We might ask ourselves what changes are contemplated by the new organization which was recently established to administer the ferry service in eastern Canada. Will they follow the example of Canadian National Railways and be more concerned with balance-sheets, profit, losses and subsidies than they will with providing this essential service to our people?
I know that we will hear from members on the other side about the substantial subsidies that are granted by the Canadian government for the operation of the ferry service. We will be told by some hon. members opposite that services costing "X" numbers of dollars have been subsidized every year to the tune of so many millions of dollars. Surely that cannot be the criterion used by this government for the provision of an essential and fundamental public service to our province. I do not think that the government should be any more concerned with the cost of subsidizing that service than with the cost of constructing or maintaining a comparable stretch of the Trans-Canada Highway in the determination of the value of that highway to any of the other nine provinces.
It is my contention-and I am sure it is shared by most reasonable Canadians-that the government of Canada has a serious moral and legal obligation to provide the people of Newfoundland with a modern and equitable transportation service. It has an obligation to ensure that the people in our province are not unduly penalized because we happen to be an island, as indeed we are at present. In 1949, when Canada and Newfoundland agreed to the terms of union, Newfoundland was separated by 90 miles of water from the mainland of Canada. Today we are still separated by the same 90 miles, and surely the Fathers of Confederation, the people who negotiated our terms, must have accepted at the time the proposition that by virtue of the fact that we were joining Canada and becoming a province of Canada, we should be treated equitably and equally with respect to transportation having regard to the 90 miles of water separating our province from the mainland.
I refuse to accept the proposition that it should cost a family of five or six travelling from Newfoundland to the Canadian mainland, or from the Canadian mainland to Newfoundland, any more than it would cost a family of the same size to travel the same distance between any other two provinces by way of surface transportation. If confederation is to be meaningful to our people and to, for example, the people of Prince Edward Island, I do not see why it should cost people travelling between the island provinces and the mainland any more than it would cost an upper Canadian to travel from Ottawa to Montreal by way of surface transportation.
The intent of my motion is to ask the government to consider the advisability of reducing the passenger car fare and freight rate structure to bring it in line with the cost of travelling to any other resident of any province of
Newfoundland Ferry Service
Canada over a stretch of 90 miles between his province and any other in this country. The Minister of Transport (Mr. Marchand) has already admitted to the country that our transportation system is in a deplorable situation. Our only hope is that it does not become more chaotic and that the minister and his officials face up to the fact that CNR cannot be expected to become a profit-making, self-sustaining operation having regard to its present policy and the service that it is presently offering the travelling public of this country.
It is rather significant and timely that this motion should be debated in the House at this particular time, it being the twenty-fifth anniversary, the silver anniversary, of our becoming a part of Canada. Of course, as part of this celebration thousands of exNewfoundlanders and fellow Canadians will travel from cities in Canada to visit that newest province in the present year.
I think it is important that something be done as quickly as possible to bring in a rate structure for passenger cars and freight on these ferry services that will be comparable to the cost of travelling on any 90 miles of the Trans-Canada Highway. It is also important in that the economy of our province relies to a large extent on the tourist industry and its potential development. As a province that in many respects is unique and has managed to maintain its uniqueness, we have a tremendous tourist potential. By maintaining our individuality we can offer to the Canadian and American tourist something that cannot be found anywhere else on this continent.
Newfoundland can boast of being one of the oldest territories to be settled on the North American continent, and fragments of the early settlements are still in existence. We continue to enjoy a quality of life that has long been forgotten on this continent. We have managed to maintain the advantages of a quiet life, yet not primitive; of a happy people, yet not pretentious; of a scenery that is beautiful and natural, and not marred by industrial development.
In Newfoundland we recognize one very important point, and I have no hesitation in putting it forward here. It is that one day tourism will be our biggest and most profitable industry, provided of course the government recognizes that fact and is willing to co-operate with our province by formulating a more equitable policy with respect to our transportation needs. The progress we can achieve with respect to tourism will be determined to a large extent by the consideration and by the justice that we receive from the government of Canada.
I could go on for hours to talk about the high cost of living in the province, the high cost of shelter and the high cost of many other things attributed to a large extent to the high cost of transportation. But I am afraid there is nothing I could say that has not already been said in this chamber by colleagues over the past few years. In closing, Mr. Speaker, through you I suggest to the government that one of the most tangible efforts it could make, in its acknowledgement and appreciation of our twenty-fifth anniversary in confederation, would be to come up with a more equitable and more just transportation policy with respect to our province, and indeed with respect to the

April 8, 1974
Newfoundland Ferry Service
other Atlantic provinces as well. I am sure that one of my colleagues from P.E.I. will want to comment on ferry service with respect to his island province, so I will not encroach more on the time of the House except to request again, respectfully, that my motion be given serious and sympathetic consideration.


Heath Nelson Macquarrie: Mr. Speaker, now that I have been categorized in the press as an old war-horse I can admit that I have heard many private member's motions and bills but I have never heard one that strikes me more as being possessed of sincerity, conciseness and thorough going reasonableness as that which has been presented by my colleague from St. John's West (Mr. Carter). He has been, since I have known him, a most diligent, thoughtful, persistent and persuasive representative of his people, and in my opinion he has spoken eloquently for them on a most, if not the most, important problem facing them on this very timely occasion of their silver jubilee as a part of this great dominion. It is a timely, thoughtful and most appealing subject and one which the authorities, at the moment vested with the governance of this country will neglect at their peril.
The hon. member was also correct when he said, about this province, as could have been said about mine a century ago, that in the days of our greater prosperity it was to our comparative advantage to be on and by the sea. In those days the Atlantic was a corridor of commerce. But now, as decade has followed decade, it has become disadvantageous for us to be in that once favoured location. We have seen the fulcrum of economic power move ever westward and, to use a polite word, we find ourselves on the unfortunate end of too many things such as transportation, price, the market, and so on. My hon. friend from Norfolk wants me to bring in a cow analogy; I would rather not do that because I want to retain the pristine purity of my remarks. But I have a fellow feeling for what the hon. gentleman has said. He has put his finger on the issue.
Why should the people of the two island provinces pay an exorbitant price to move to the other eight provinces of the dominion? Mr. Speaker, do you pay $9 to go from Manitoba to Saskatchewan? Is there a toll of $5 to cross a bridge here in Ottawa and go from Ontario to Quebec? Why, because God made us islands-and beautiful islands at that-should we have to pay every time we move to or from our island homes that are a part of confederation? It is a notorious injustice, and because we have had it so long is no reason why we should be expected to grow accustomed to it.
We live in an age when we talk about separatism in one part of the country and alienation in another, but because we in the Atlantic region have had our grievances for a century should not suggest that their very longevity detracts from their appeal, because certainly it does not. I think before any government of Canada can even conceive that it has made any kind of step to bringing about equality in this country it must make a major assault on the transportation inequities which face eastern Canada. For too long we have been out on the end. For too long we have paid dearly, partly not only in terms of remoteness from the major markets but also because of the very

matters which the hon. member for St. John's West has mentioned.
It was interesting that the hon. member mentioned the railway. The railway has diminished its function in his province and in mine, certainly, more than in any of the other provinces in the dominion. But when there is a rail strike, which two provinces suffer most because other means of road transportation cannot function? That is the irony we went through last summer in both our provinces. It caused cruel and shameful harm.
Newfoundland and Prince Edward Island have much in common. I was once intrigued by the suggestion of former premier Smallwood that he was not interested in maritime union at all, but he might think of union between P.E.I. and Newfoundland. I never was an advocate of maritime union because I have not been convinced of its advantages, but a union of Newfoundland and the Turks and Caicos Islands and other islands down in the Caribbean would give us a country that stretched from the Bahamas up to the top of Labrador, and that would appeal to me. It might give us some new dimensions, new visions, new perspectives and a new province too, but that is the kind of province I would like to see.
I notice that in the council of maritime premiers we have one of the fastest growing bureaucracies. I have been in Ottawa for 17 years so I know something about bureaucracies, but I think the council of maritime premiers is the largest empire without territory which the world has even seen, with the possible exception of the dying days of the Holy Roman Empire. Rather than considering questions of what we do organizationally and administratively to regroup and reconsolidate, we should apply ourselves in the way that my colleague has applied himself this afternoon, to a practical problem. I want to join him by supporting his contention that we must abolish this hardship upon the people of the island provinces. We must move away from the infliction upon them of a grievous toll as they move about this country. What was confederation all about, if it was not to provide a domain in which all citizens might move freely from one part to another?
The injustices outlined by the hon. member seem to me to indicate an infraction, an infringement and indeed a mockery of confederation. I will join him in not resting content until injustice is abolished and inequity corrected. I commend him for the vigour of his presentation and the authenticity of the argument he brought for a great province and a great cause, one which I support 100 per cent.


Joseph-Phillippe Guay: Mr. Speaker, it is my responsibility to participate in debate on the motion of the hon. member for St. John's West (Mr. Carter). I believe, in all sincerity, that the spirit of festivity and joy that is characteristic of Newfoundlanders as they celebrate their twenty-fifth anniversary as members of confederation may very well account for the over-exuberance which gave rise to the motion before us. Certainly, were it not for the good will and amity that is prevailing between Newfoundland and the other nine provinces on this happy occasion, I would be tempted to term this motion as going a bit too far.

I am glad, and prepared, to address myself to the motion seeking reduced passenger car fares and freight rates on the North Sydney to Port aux Basques and Argentia route. On April 1, 1949, Canada undertook to provide a freight and passenger steamship service between North Sydney and Port aux Basques, and Argentia was added in 1964. Since 1949 there have been only two marginal increases affecting passenger fares and freight rates, while revenue has dipped to less than 20 per cent of operating costs.
I believe that this motion would benefit from a closer examination of the facts. Mention was made of the Trans-Canada Highway. Annual operating costs in the order of $35 million, as opposed to freight and passenger revenue totalling little more than $7 million, do not to me constitute an exactly inequitable arrangement. And these figures, Mr. Speaker, do not reflect the sizeable capital investments made during the last quarter century. They total close to $220 million and are projected to rise even further over the next decade. With deficits far outstripping revenue and capital costs burgeoning, I find it difficult to comprehend the rationale behind the hon. member's motion.
I am one who, along with the federal government, strongly supports the concept of stronger ties and communications between Newfoundland and the mainland. Newfoundlanders have had to apply more careful planning and economic utilization of their resources in order to strive for a quality of life that compares favourably with the rest of Canada. It is much to their credit that-I am pleased to note-Newfoundlanders have succeeded to a stunning degree, in bending their environment and resources to their will. After all, who has not heard of the gigantic Churchill Falls hydro-electric project? Who is not aware of the massive iron ore operations at Wabush and elsewhere? Who does not know that the tremendous timber stands at eastern Labrador have enabled Corner Brook to produce newsprint that is sold on six continents? And, finally, what could be a more strategically apt and economically vital achievement than the development of an oil refinery 'at Come-By-Chance?
But, I must now return to the specific matter at hand. One has only to examine the Ministry of Transport's user-cost or beneficiary pay concept for it to become readily apparent that the ferry services from Nova Scotia to Newfoundland are run at great cost to the federal taxpayer and to the great benefit of its users. Newfoundland is the unquestioned beneficiary of this service. The user-pay concept of the Ministry of Transport does not apply nearly as severely as it does, for example, to air operators and travellers using ministry-owned facilities. The federal government does not intend to introduce a user-pay system which will finance all of its services in full. On the contrary, even now this concept is not applied universally across Canada. However, I do not think the federal government is being in the slightest bit unreasonable or insensitive to the needs of its people when it expects users to pay a reasonable share for the use of the extensive and valuable facilities and services provided. And in the case of the ferry services to Newfoundland, I do not think one can reach any other conclusion but that the user-pay concept is applied with kid gloves and tender loving care.
Newfoundland Ferry Service
I am not aware that the present passenger fare and freight rate structures pertaining to the Nova Scotia-New-foundland runs are acting as any sort of deterrent to the flow of goods and people along this route. On the contrary, my information indicates that the addition of vessels during peak periods coupled with plans for further supplements in the near future reflect the steadily growing use of this ferry service. Newfoundland, much to its credit, is increasing substantially in popularity with tourists who are spending more money and longer vacations there. This year, with the commemoration of its 25th birthday, promises to activate a tourist invasion of truly awesome proportions.
A 15 per cent annual growth in passenger-related vehicle movement should, to my mind, Mr. Speaker, raise the question of whether the ferry service capacity is sufficient rather than whether the time has arrived for the service to reduce fares and freight rates. I am sure the hon. member who proposed this motion is aware of the difficulties encountered in deploying vessels on a ferry service that carries 55 per cent of its passenger traffic during July and August. There is great expense involved in operating vessels at capacity levels of 10 per cent during the off season.
It would appear, once again, that the problems to be addressed by this House and my hon. friend would include the rationalization of vessel deployment to obtain maximum utility and maximum economy without sacrificing the quality of service for passengers. In addition, terminal capacity at North Sydney and Port aux Basques will shortly require expansion and, as I already mentioned, additional vessels are being planned for introduction to meet future passenger needs. All such improvements will involve large capital expenditures and I, for one, am in favour of upgrading this ferry service as the need arises. Such steps will further consolidate, both symbolically and tangibly, the historic links which have bound Newfoundland and the rest of Canada together on a steadily strengthening basis since 1949.
Turning to the movement of Gulf freight, this has been so heavy that rail car ferry charters have had to be extended and, if present growth rates continue, further ferry acquisitions and major shore facility extensions will have to take place for this service alone. In 1972, freight movement accounted for 78 per cent of the Gulf deficit at an average cost of $27 per ton to the federal taxpayer. This freight movement is, barring an upset in economic growth prognostications, likely to incur an even higher subsidization of goods by the taxpayer.
This situation does not strike me as being one calling for a reduction in freight rates. On the contrary. I would think that shippers are being provided with an economical conveyer of goods the like of which they would not have even if presented with the choice of competitive, free enterprise services. Private enterprise, the impetus that has made Canada forge ahead economically in such impressive fashion over the years, still forms the basis by which we stimulate growth and progress in this area. However, in the case of the ferry services in question, were it not for government intervention in providing a cheap, yet efficient, transportation service from Newfoundland to the mainland, the economic fortunes of our tenth province

April 8, 1974
Newfoundland Ferry Service
would not seem nearly as bright. Nevertheless, it would be foolhardy for me to suggest that all is well with our ferry services. Like all other operations, they suffer from inadequacies and imperfections.
The major problem, to which I alluded a few moments ago, lies in the allocation of ferry vessels where they will serve most effectively. Study and research with respect to improving the performance and seaworthiness of ferry vessels under all conditions is being conducted on a continuing basis. Service reliability under all conditions is another major consideration when planning the construction of new vessels, and the ultimate goal is to find a happy mean between an extravagant service and a hopelessly inadequate one.
With respect to the ferry service in Newfoundland, I do not imply it is an extravagant one. Far from it. It is the very lifeline which nurtures her relationship with the mainland and I would be rigidly opposed to any attempt to undermine or erode this vital connection. However, the question at issue today involves the reduction of passenger fares and freight rates. I do not believe such a move would benefit Newfoundland or its inhabitants to any significant degree.
With accelerating fuel, labour and maintenance costs, coupled with the need for heavy capital expenditures, it has been eminently generous of the federal government not to have passed on these added expenses to the users of the ferry service. Any proposed reduction simply does not make economic sense and belittles the appreciable contribution already made by the federal government in promoting economic expansion and tourist traffic to Newfoundland. This is another aspect we do not often talk about although it is related to the problem in question.
While disagreeing with the motion before this House today, I am equally in concord with Newfoundland's goals as a province. As I salute her past achievements, I wish her well in her future endeavours.


Jack Marshall: Mr. Speaker, I will only be a few minutes. I wish to support my colleague's motion. I might say that all wise men think alike. My motion, No. 5, will be called in the very near future. It relates to considering the advisability of introducing legislation implementing the government's constitutional responsibility in providing a link between Nova Scotia and Newfoundland.
I was interested in the comments of the hon. member for St. Boniface (Mr. Guay). I was surprised he did not go overboard for this motion. I remember a transport committee visit that he and I made to my district. Everyone treated him so well that I felt he would come back and run in my district.


Joseph-Phillippe Guay: I helped you out, just the same.


Jack Marshall: I am disappointed he is not supporting the motion, particularly for the reasons he gave. No motion is more worthy of recognition and being passed by the House than the one of the hon. member for St. John's West (Mr. Carter). In describing user service the hon. member for St. Boniface used the words "tender loving care". This is analogous to the manner in which the

Department of Transport treats our province. The only thing tender loving care reminds me of is a hairspray. That is probably the way they are going to overcome our transportation difficulties.
The main problem in Newfoundland is isolation. This dictates that we must have special status in the consideration of our over-all transportation policy. One need only be reminded of the difficulties that we experienced last summer. This problem was alluded to by the hon. member for Hillsborough (Mr. Macquarrie). Because of the CN strike, hundreds of thousands of tourists from the United States, indeed from all over North America, were stranded in Newfoundland for days, and sometimes weeks. This caused great incovenience to these people as well as to Newfoundlanders stranded on the Nova Scotia side because they could not get back to their families and their work. The situation reached almost emergency proportions. Fortunately, the strike was settled when it was, because it had reached the point where it was becoming an emergency from a medical and survival standpoint. This in itself should make the government realize that some form of communication must be ensured between these two provinces. I hope the government will soon realize this and begin to act. The government must support some kind of communication which would solidify both provinces.
Mention was made of the relationship between Nova Scotia and Newfoundland and their relationship to the Trans-Canada Highway. The Trans-Canada Highway, which was built with such great fanfare by the federal government, was built on a deal to take away rail passenger service. However, even at this moment the Trans-Canada Highway is not up to standard. The government should realize its responsibility and take a look at the Trans-Canada Highway in Newfoundland. Millions of dollars need to be spent to provide proper passageway; there should be a proper road for the buses. The Trans-Canada Highway must be brought up to standard. As the hon. member for St. John's West stated, the Trans-Canada Highway must be considered a link between Nova Scotia and Newfoundland and should be completed in our province. On April 22, hopefully my motion will be called. At that time I will elaborate on many other points of interest and concern to Newfoundlanders. We need a decent transportation policy and base in order to develop our many resources.
The hon. member for St. Boniface mentioned the cost to the government. I should like to remind him that the passenger rail service cost the federal government some $900,000. But immediately after that decision was taken, an order was issued by the Canadian Transport Commission to the effect that should the CN decide to abandon any other railway passenger services, it could be required to continue to operate them, in which case it would receive an 80 per cent subsidy. A few days ago I happened to come across the latest report issued by the CTC. It showed that subsidies amounting to $126 million were paid last year in respect of such passenger operations. And the figure will probably be higher in the years to come.
I should also like to remind hon. members that there is another isolated region only 10 or 11 miles from the north-
April 8, 1974

ern part of Newfoundland. Only that distance separates the island from the great mass of Labrador, whose inhabitants are completely isolated during the winter months and who have become familiar with living in conditions where they are shut off from goods and services. I hope the parliamentary secretary will remind the Minister of Transport (Mr. Marchand) of my bill to establish a crossing between northern Newfoundland and Labrador. This would do wonders to encourage the development of the vast resources in that wonderful region.
In order that the motion may proceed to a vote, I end my remarks by expressing once again my support for the proposition advanced by my hon. friend from St. John's West.


Mr.   Chas. L. Caccia@Davenport: Mr. Speaker, it might appear out of place for a Toronto member to take part in a debate on the motion put forward by the hon. member for St. John's West (Mr. Carter). However, there are in Toronto a large number of fine people from Newfoundland who have settled in the city and contributed to the lifestyle of our metropolis. They are highly respected there and well known for their fine wit and sense of humour. Over the years they have established a high reputation not only for themselves but also for Newfoundland as a province.
Then again, we also have a ferry boat service. It connects, on a year-round basis, one island, which is constantly populated, with the mainland and it serves a second island, or set of islands during the summertime when extensive use is made of them for recreational purposes. We are therefore familiar with the question of ferry boat routes and the cost of transporting people by water, though I admit the circumstances are totally different from those in respect of which the hon. member for St. John's West spoke this afternoon with great sincerity.
What I find surprising is this. Only two weeks ago the hon. member for Mississauga (Mr. Blenkarn), also a member of the Conservative Party, condemned the CN on a number of grounds. He said, as reported in Hansard at page 753:
One of the major problems the country faces is this: we are stuck with a national railroad which is improperly and ineptly managed. It is not managed as a business; it is managed in a political fashion, and therein lies the problem.
So we find a member from a wealthy urban community condemning the CN for not doing things in a businesslike manner. Now, two weeks later, we find an hon. member from the same party asking the government to behave in the directly opposite manner. The hon. member for Mississauga favours a businesslike approach; the hon. member for St. John's West is in favour of an approach which does not consider the balance-sheet. I must say my heart is with the hon. member for St. John's West for a number of reasons, though I doubt whether the time allotted is sufficient for me to explain them.
But here we are up against one of the typical contradictions which arise within the Conservative Party, not only on the issue of transportation but on oil policy, bilingualism, consumer affairs, agricultural policy, and so on. One member of the party says one thing, but a few days or weeks later another member proposes exactly the opposite. We suspect that they speak to each other in caucus once a week in an attempt to resolve these differences in
Newfoundland Ferry Service
outlook. Nevertheless, they find they cannot stick together. So much for the consistency of the Progressive Conservative Party-more conservative than progressive, perhaps.
I see the hon. member for Trinity (Mr. Hellyer) leaving the chamber. Perhaps the situation has become intolerable for him even though it is only a short time since he crossed the floor.


Stanley Howard Knowles: You have made him lose his balance.


Mr. Hellyer:: At least we are not a bunch of sheep like you are over there. We think for ourselves.


Mr. Caccia:: I am glad the hon. member has changed his mind and decided to stay with us.


Paul Theodore Hellyer: I am overwhelmed, Mr. Speaker.


Charles L. Caccia: The hon. member for St. John's West has made a good point. It is one which raises the question of the kind of policy we should follow in Canada in the field of public transportation. It is easy to make speeches about running a transportation company in a businesslike manner, but how is this to be done in a vast, thinly populated country such as ours without raising freight rates to a point at which only a limited section of the population could afford to pay them? Freight rates would need to be subsidized until the population was large enough to allow the subsidy to be discontinued. In the meantime, we need to consider something broader than the balance-sheet alone.
At the same time, the hon. member for St. John's West would be the first to press the Minister of Transport (Mr. Marchand) to see that the facilities and equipment of the vessels used on this type of service are not only modernized and kept up to date but are adequate to meet the needs of the public. This cannot be done by reducing tariffs and rates. A balance must be struck whereby some financial reserves are accumulated to improve facilities and equipment. Also, decent wages and salaries must be paid to the captains and crews of the vessels as well as the technicians employed in this kind of service, and must be similar to other salary levels in the country.
Reduced transportation rates will not bring this about. The only way to reduce rates without reducing revenue is through higher taxes, and then the question remains as to who is to pay these higher taxes. Perhaps the wish to keep the country together and to facilitate movement of people from one province to another is so strong that no one would object to this, but it sees to me it would at least be reasonable for any member requesting a reduction in rates to put the whole picture before the House and to discuss the consequences of such a measure. Then we would discuss the total scene, rather than just discuss the question of reducing rates in terms of accusing the government of total indifference.
However, I think the hon. member for St. John's West has made a good case in the sense that there is merit in providing a transportation service for all Canadians regardless of income, therefore permitting the exchange of

April 8, 1974
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individuals from one province to another. People living on an island are at a certain disadvantage as a result of geography. On the other hand, there are advantages to living on an island and they are not to be underestimated. The fact that a body of water has to be crossed usually tends to screen the island from visitors, and in this sense the island is not swamped by waves of thousands of tourists. I would not be at all surprised if the reason that Newfoundland has been able to retain its character and quality about which we hear and read so much these days is that it has been isolated from the mainland because it is an island. Probably the same concept applies to the beauty of P.E.I. Islands seem to be immune from industrial development and the pollution that arises therefrom because of the fact that they are removed from the mainstream of economic life.
I have tried, Mr. Speaker, in the very short time available to put forward a few thoughts. The motion of the hon. member for St. John's West raises a much broader question, one which was the subject of debate only ten days or two weeks ago on a motion introduced by the New Democratic Party. Much was said by others more competent than I about this subject on the occasion of that debate, and I encourage members interested in the subject to examine what was said as reported in Hansard.


Stanley Howard Knowles: Mr. Speaker, I had a few things I wanted to say in the course of this debate, but I am afraid I shall have to disappoint the House because I should like to see the motion come to a vote. Therefore, I rise simply to say that I support it.


Mark R. MacGuigan: Mr. Speaker, the Parliamentary Secretary to the Minister of Transport (Mr. Guay) has assured us that the federal government is paying close attention to the Newfoundland ferry service to ensure that an uninterrupted and efficient service is maintained year round. As part of its ongoing program to upgrade and expand all ferry facilities on this service, Newfoundlanders in particular will be pleased to learn that a new rail car ferry costing about $14 million is scheduled for completion in late 1975. The vessel, a 7,000-plus ton twin-screw rail carrier capable of doing 17 knots, is designed to accommodate 34 rail cars on five tracks with stern loading.
Its secondary function is the carriage of highway trucks and trailers on containers between the terminals of Sydney and Port aux Basques. The vessel is, however, also suitable for certain other docks and sundry highway slips. The vessel, which will be capable of carrying rail cars weighing a total of 2,200 tons, is intended for year-round operation in the service across Cabot Strait and will be suitable in all respects for operation in the sea, wind, temperature and ice conditions encountered in that area.
A reliable and speedy gulf freight service is essential for the day-to-day exchange of vital commodities between Newfoundland and the mainland. The provision of yet another rail car ferry on this run is an example of the federal government's long-range planning and foresight in anticipating Newfoundland's present and future needs. I feel confident that with the addition of a new rail car ferry, coupled with the expansion of terminal facilities,

Newfoundlanders will be satisfied with the calibre of service and fairness of freight rates that characterize the transportation mode bearing the brunt of commerce between the island and Nova Scotia. I think we cannot help but be impressed by the manner in which this operation is managed by the federal government and by the dedication of the crews and shore personnel who labour year-round under harsh weather conditions to maintain this vital link that keeps Canada united and whole.


Mr. Speaker:: Order, please. The hour appointed for the consideration of private members' business has now expired. It being six o'clock, I do now leave the chair. The House will resume at 8 p.m.
At six o'clock the House took recess.


[Stage Direction]
AFTER RECESS

The House resumed at 8 p.m.


[Stage Direction]
The House resumed consideration of the motion of Mr. Macdonald (Rosedale): That Bill C-18, to impose a charge on the export of crude oil and certain petroleum products, to provide compensation for certain oil import costs and to regulate the price of Canadian crude oil in interprovincial and export trade be read the second time and referred to the Committee of the Whole.
René Matte: Mr. Speaker, I had come to my remarks on each part of this bill. Part I, dealing with exportation, would call for the return to the principle that it is always rather odd to speak of exporting natural resources such as petroleum when our country is forced to import it.
It would undoubtedly had been more logical and appropriate to adopt measures avoiding such a nonsensical situation where an oil exporting country finds itself at the mercy of foreign producers and has to suffer the repercussions of particular political events happening far from here, while we are oil producers ourselves.
However, this situation is the result of various circumstances and it should be corrected without delay.
Subject to the requirement that we should satisfy our particular needs inasmuch as it is physically possible, which should be done, it follows that when we are required to export, it is normal that we levy charges on our exports and at maximum prices. I think it is perfectly appropriate for our country to obtain the highest possible return on its natural resources when they are exported.
April 8, 1974

We agree on this principle of charges on each exported oil barrel, at the highest level.
With regards to Canadian oil prices restraint, we should ideally aim for price uniformity throughout Canada. But, as I already pointed out, the restriction imposed on transportation could result in quite tremendous cost differentials which could perhaps nullify that nice effort to ensure equality in prices across the country. If for each barrel of oil moved from one area of Canada to another the price turns out to be exorbitant that will result in people in some areas of this country having to pay an equally exorbitant price.
I think the minister and the government have not been specific enough on the line of action they would follow and it is only once we get that information that we will be able to judge whether oil is sold at an equal price in Canada. Price fixing based on foreign oil is as far as domestic consumption in Canada is concerned, somewhat arbitrary. Mr. Speaker, if we are fortunate enough to have natural resources as important as oil it seems to me that Canadians should really benefit from it, that is to say that for consumer needs the cost to the consumer should be in relation to how easy it is to obtain that product.
If in an entirely arbitrary way a price is fixed in relation to overseas I find that some details are missing in that respect and the line of reasoning followed lacks basis. I understand that that must have been related to the fact that we are also at the mercy of oil imports which would explain the price based on foreign oil but in principle if we get down to the root of the problem the fact still remains that we are faced with a situation where we can obtain a product at a given price but we are selling it back to the Canadian consumer at a much higher price simply because it also costs more abroad. I think that principle is wrong and I feel that that policy should have been based on an even lower price for the consumer of this country even if, as a consequence of that, we must increase the price of foreign-sold oil either through charges or otherwise, particularly since, Mr. Speaker, we are not sure whether the situation will always remain the same and that it will not be possible at a given time, for example, for eastern Canada, to buy oil at a lower price. How can one foresee that this bill might not handicap the commerce the Canadian consumer might benefit from, and the eastern consumer in particular?
So, to my mind, we should aim for the minimum price for Canadian consumers and the maximum price for foreign consumers at which to sell our oil according to international schedules. Mr. Speaker, when we come to Part III of this bill, which deals with additional domestic oil price restraint, we feel even more apprehensive because, through this additional control, federal authority in this regard could become absolute, and control in as important a field as that of oil could, at some point or other, deprive the provinces of the autonomy they have always cherished.
We therefore have reservations about an additional control at the hands of the federal government in this field. Moreover, in view of the extra controls this bill is designed to implement, wholesome competition is threat-
Petroleum Administration Act
ened. We wonder at times to what extent this control, these set prices will be depended upon, and to what extent profits will be neglected, as well as consideration of the fact that prices must be proportionate to production costs, to what extent due consideration will be given the fact that fixed prices are not much higher than production costs. Those dangers warrant mentioning.
Part IV, which deals with petroleum import cost compensation, is the one, Mr. Speaker, which to my mind contains the most contentious elements, for the simple reason that controlling the cost of foreign oil is most difficult to begin with. Just ask the Minister of Supply and Services (Mr. Goyer) when he had to buy heating oil what results he obtained and why he had to pay black market prices to avoid possible shortages.
It is therefore extremely difficult to achieve reasonable control over foreign oil prices, all the more so as a Canadian importer is faced with the fact that he is simply refunded the differential between the foreign oil price and the price set in Canada. We might be in a situation where the importer is not in the least interested in obtaining better prices or where at a given moment, he might be able to make profits.
In my opinion, this compensation for offshore oil price is not clear enough and may be dangerous, especially since certain details are not clear. For instance, subclause 51 (c) on page 21 states that will be considered as importers and entitled to compensation those importing petroleum into Canada to be purchased by other persons for the purpose of having it processed in Canada. If you read carefully this clause you may conclude that someday we will only have oil transiting through Canada to be processed here and exported abroad.
Controlling this will be an extremely difficult task and we wonder to what extent this control will be adequate. In brief, we would have preferred that the government did not have to introduce such a legislation. However, we understand the situation which existed and which is likely to exist again in the future and which could lead to many problems.
Therefore we understand the intentions, but we are afraid that the situation might get worse if we rely on those good intentions, since such pricing would not enable us anymore to think that we will be able at a given time to have a supply of heating oil at a very low price. We can no longer hope that the consumer will be able to get gasoline or other by-products of oil at a real low price.
That is why we are wondering whether this bill does not merely confirm the final victory of multinational oil companies, that will have won all along the line by causing prices to rise to the level they wished, in the case of a product that only comes from the soil after all and the real cost of production of which we are not so sure.
Considering the skyrocketing price paid by oil consumers during the last few months and the fact that on the other hand, the Quebec Minister of Finance says that seven oil companies have not paid a single cent in tax, we are asking ourselves questions. And in such circumstances, our fears are justified. That is why we suggest that the minister and the government should take into serious consideration every clause of this legislation so

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that this measure will not be the ratification of the inflationary price rise of a Canadian product that the consumer could get at a much lower price and that we accept to sell at an exorbitant price.
Mr. Speaker, I believe that if our foremost concern consisted in providing for the needs of the Canadian citizens instead of making profits, I am sure we would not be discussing now price rise and inflation in this regard but that we would think about something like this: We have oil, we are going to do everything in order that the Canadian consumer may at least buy it at the lowest price possible. I think this bill does not take that into account. On the contrary, it confirms a fact that results from world events that have nothing to do with us. With a good administration, Canada would never have known any oil crisis. Hence, it is arbitrary to determine prices; if there is a price increase, it is because of a lack of foresight and of adequate organization.
I am still deeply convinced that a country having ress-ources like oil can make it available to all citizens. So, if we decide arbitrarily on prices just to please oil companies, it is unfair to the Canadian consumer, and I think we should first consider essentially human factors in order to provide an adequate legislation.


Mr. Jim Balfour (Regina East):: Mr. Speaker, in rising to offer a few remarks on the bill before the House today I wish to make clear that the principle of the bill as expressed by the minister earlier is not in dispute. However, I feel bound to say that a clause by clause examination of the bill before us raises some questions with respect to the implementation process of the March 27 agreement, questions which I have no doubt will also be raised in the minds of provincial political leaders of the various provinces, and particularly the provinces of Alberta and Saskatchewan.
In preparing for this debate I reread the Prime Minister's statement delivered in the House of Commons last March 28, and I must state that the contrast between the tone of the remarks of the Prime Minister (Mr. Trudeau) on that occasion and the tone and contents of Bill C-18 are startling, to say the least. I refer specifically to clause 36(1) of the bill before us which reads as follows:
Where no agreement is entered into pursuant to section 21 with the government of a producer-province, or any such agreement is terminated by the declaration of the parties, or, in the opinion of the governor in council, is not effective or is not capable of being effective, the governor in council may, by regulation, establish maximum prices for the various qualities and kinds of crude oil to which this part applies that are produced, extracted or recovered in that province (hereinafter in this part called the "exporting province").
Clause 36 of this bill is offensive in that it confronts our producing provinces of Alberta and Saskatchewan once again with an ultimatum: either fall in line or we will legislate an agreement.
This bill goes far beyond the agreement and understanding reached between the first ministers on March 27 as explained by the Prime Minister. Under this legislation, the government seeks powers to establish oil prices within provinces under certain conditions. The March 27 agreement is to terminate in 15 months, yet this bill is open-

ended with respect to the term of its powers and provisions. Its penal provisions can only be described as draconian in their nature, and I refer you specifically to clauses 27 to 40 inclusive.
27.	A person who
(a) knowingly makes any false entry or statement in any record, book of account or other document required by this part or any regulations thereunder ...
is guilty of an offence and is liable on summary conviction to a fine not exceeding ten thousand dollars or to imprisonment for a term not exceeding one year or both.
28.	(1) Every person who contravenes any of the provisions of sections 23 to 26 is guilty of an offence and is liable
(a) on summary conviction, to a fine not exceeding twenty thousand dollars or to imprisonment for a term not exceeding six months or both; or
(d) on conviction upon indictment, to imprisonment for a term not exceeding two years.
It is language of the sort contained in the clauses referred to which raises legitimate concerns in Canada's energy industry, concerns of the kind that could create for Canada energy shortages in the future where none now exist. Unless the government sheds its conspiracy theories and punitive mood it will damage not only the companies but the country. The whole federal government's performance dating back to last September in connection with energy matters raises substantial questions of competence, questions which can only give rise to profound uneasiness in the minds of all Canadians at the sweeping, far-reaching powers of control over the energy industry and the reduction in the provincial governments' ability to control the development and sales on a long-term basis of their natural resources.
Our Canadian energy industry which formerly exhibited strength and confidence is now wracked by uncertainties as to future government policy, uncertainty with respect to future prices, with respect to land leasing regulations, additional forms of taxation, and the formation of a national petroleum company and its possible role. These uncertainties and others constitute a major disincentive to Canada's petroleum industry and, if allowed to continue, will result in further loss of investor confidence which has already been badly shaken by recent events.
Under these circumstances, the ability of the industry to attract new venture capital to sustain Canadian resource exploration and development will be severely impaired and could even result in a flight of capital from Canada to areas offering a more stable economic environment, notably the United States.
Ultimately, of course, a long-term energy supply crisis could unnecessarily develop in Canada. Currently, Canada is in the very enviable position of producing more oil than it consumes. As a result of the national oil policy established in 1961, markets west of the Ottawa Valley have been reserved for western Canada crude, and western Canadian production in excess of domestic needs found an originally reluctant but now ready market in the United States. These markets, both domestic and in the United States* were a major factor in the development of the petroleum industry of western Canada and the level of domestic proven reserves we enjoy today.
However, Canada will become a net importer of oil at the end of this decade if new Canadian reserves are not

discovered and developed. Simplistically stated, Canada is at the stage in which the United States was in the mid 1960s in that we are already eating into the lead time required to discover, develop and bring new supplies to market.
In western Canada it probably takes five to seven years to do the necessary geological, geophysical and drilling work required to develop a specific producing area and start selling oil and gas. In the frontier areas the lead time is even longer. Gas was discovered at Sable Island in 1967 and some millions of dollars, 66 wells and six years later, the first gas is still a considerable period away from being produced and sold. Gas was found at Drake Point in the Arctic in July, 1969, and it is unlikely that any gas will be marketed from that area until the 1980s.
The long-term nature of such investment requires a careful evaluation of the political climate, favourable or unfavourable. The industry needs relatively stable political conditions and cannot operate satisfactorily on a stop and start basis. It is important to remember that it is only within the past 20 years that Canada has become a significant producer of crude oil. At the time of the Leduc discovery in 1947, Canadian production was no more than eight million barrels per year-about what we now consume in a week. It tends to be forgotten, in the light of recent events, that until very recently there was considered to be in North America an overabundance of natural gas.
Under these circumstances, natural gas prices in both Canada and the United States were kept distressingly low when compared with the cost of alternative, less attractive fuels. The direct result of this mistaken policy is the serious shortage of natural gas, particularly in the United States, prevalent today. For the balance of the 1970s it is estimated that the Canadian energy industry will require $30 billion of development capital. This new capital will have to be raised in competition with worldwide industry requirements, estimated at $500 billion during the same period.
The task of developing new energy resources deserves, and should be granted, the highest priority by the federal government and appropriate policies and regulations put in place to ensure that the necessary capital will be available and the necessary exploration and development work is carried on as expeditiously and rationally as possible. Piecemeal policies have no place in this context, and co-operation rather than confrontation is required. Other areas of the world are already competing for development dollars at this time and there is evidence that Canadian technical expertise and personnel are being lured away by more attractive offers in the United States and elsewhere.
The petroleum industry in Canada must be encouraged to press forward with the task of finding, developing, processing and bringing petroleum products to consumers. Policy-makers must provide a suitable operating environment within which the industry can perform its function. Parts of the bill before us are counterproductive in this respect and deserve review and revision by the minister proposing their passage.
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Lorne Edmund Nystrom: Mr. Speaker, Bill C-18 puts into effect the agreement reached, after many weeks and months of negotiation, between the federal government and the provinces and establishes many important precedents in Canada. It establishes one oil price right across the country. It establishes a two-price system for Canadian oil, namely, a domestic price that is much lower than the international price and it also maintains the export tax on Canadian oil sold to the United States. It further recognizes the fact that oil and the other natural resources of this country come under provincial jurisdiction and law. That is a most important fact which all of us must recognize in a debate of this sort.
There are a couple of things that concern me as a member who comes from one of the oil producing provinces, Saskatchewan, as I look at this bill and rise to participate in debate on it. The first thing I notice is that the agreement reached between the consuming and producing provinces will give the people of Saskatchewan actually less per barrel of oil than they were receiving under the voluntary agreement which expired in March. They will now receive $6.50 per barrel under this agreement which we are now legislating, but under the voluntary arrangement they were receiving $6.60 per barrel, made up of an outright sum of $5 per barrel for oil sold in the province, plus 50 per cent of the export tax, which on the production of oil in Saskatchewan worked out at about $1.60 per barrel, making a total of $6.60. So as a result of the agreement reached in Ottawa, the actual direct revenue to the people of Saskatchewan will be a lesser sum of money than they were receiving before those negotiations concluded.
Secondly, Mr. Speaker, as a member from a producing province I am also concerned that the producing provinces are not getting a share of the export tax. Our party made it clear right from the outset, through the hon. member for Nanaimo-Cowichan-The Islands (Mr. Douglas) and through our leader, that the producing provinces deserved a share of the export tax. It seems to me particularly unfair that the export tax should be used to subsidize the consumers in eastern Ontario, the four Atlantic provinces and Quebec, because when this is done it is using funds that should at least in part go to the producing provinces.
What I am really saying is that I agree with the fact that we are subsidizing the eastern market because of the international situation, but I am arguing that the subsidy should be paid on the basis of equality and equity right across the country, without being taken solely from the revenues due the two producing provinces. An appropriate analogy might be if we were to lower the price of automobiles in Canada and if we were to accomplish this by subsidizing buyers with money taken from Ontario because that is where the automobiles are produced, or if we were to do the same kind of thing with farm machinery and take the subsidy from Ontario provincial resources because that is where it is produced.
It seems to me that this is all part of the built-in tradition that goes against equity in this country in terms of distribution of wealth and income. And if it were not for certain other developments I would have a difficult time being convinced that this is the right direction in which to proceed. However, it is my understanding that in

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the case of Saskatchewan the federal government is willing to look at some significant trade-offs, or what might be called quid pro quo, with respect to things that would lead to greater industrialization of our province, such as a major steel industry.
The Minister of Transport (Mr. Marchand) has suggested that we should take a look at the freight rate system and correct some of the inequities in it. The Minister of Agriculture (Mr. Whelan) is talking about stabilizing the income of farmers in Saskatchewan, and indeed of farmers all over Canada. If some of these things are coming, then perhaps the deal that is before us from the point of view of my province will be good, that is, if we have these particular trade-offs. If our oil is sold across the country at lower than world prices, that will be all right with us if we can purchase other commodities coming into our province at lower than the world price, and if our oil is used to help build an industrial base in Saskatchewan giving us equality with other parts of Canada. That is a very important factor in this debate and one that should be recognized by all members regardless of the regions they represent.
I suggest that the province of Saskatchewan is a totally different case from the province of Alberta. In effect, here we are dealing with apples and oranges, with two radically different situations. Saskatchewan is basically a have-not province and Alberta is a have province. Alberta has vast quantities of oil, not only in conventional sources but in the tar sands. Saskatchewan has only about 80 million to 85 million barrels trapped under its land and will run out of oil in nine to ten years. That is something that must be clearly understood when we are talking about this bill. Saskatchewan is essentially an agricultural province, and if we do not expand our industrial base, after the oil has gone what will we have left?
At present we have 4 per cent of the nation's population, and our provincial population has been falling for a number of years. In 1968, Saskatchewan had 962,000 people; in 1973, it had only 906,000-a drastic drop. If the same proportionate drop took place in Ontario over the same period, it now would have a population of six million instead of eight million. In effect, it would eliminate the city of Toronto. Just imagine the effect that would have on Ontario. The same thing applies to provincial income. We depend so much on the agricultural industry and on funds derived from natural resources. In Saskatchewan the fluctuation of income can be as great as 40 per cent from one year to another. Compare that with Ontario, or with the nation as a whole, where income fluctuation has never been over 10 per cent from one year to another.
Why does this happen in Saskatchewan? There is a very obvious reason. The rural parts of the country, and Saskatchewan is perhaps the most rural of all, do not have an integrated economy. They do not have an industrialized, developed economy. This is because of the old national policies which we have pursued for so many years, directed developing the industrial parts of the country, particularly the golden horseshoe in southern Ontario.
These have been policies that have been based on tariffs and on a railway system designed to take raw materials from the hinterland to the industrial heartland. As a result, we find an area like Saskatchewan is supplying new materials and foodstuffs in an unprocessed state to

factories in eastern Ontario, or indeed to places like Vancouver, where the raw materials are processed and manufactured and where, of course, there are the jobs that go with the processing and manufacturing.
Commodities and items such as livestock, rapeseed and natural mineral resources are shipped from the prairies at a rate lower than the equivalent weight of finished goods. There is therefore an incentive to ship goods from the prairies, and thus an incentive to export jobs as well, which means that the people leave the rural areas. All this will have to change, and a start could be made with the oil policy in this country which could expand into a new national policy, one that would treat all commodities the same and remove inequities in the freight rates system and develop the economy in a rational way. There should be equity of conditions. That could be done if we set our minds to it.
This bill concerns me on other grounds as well, and I hope this House will look at them. One concern is that under the bill, multinational oil companies will have another windfall or another rip-off in terms of profits. We all know the figures for the last year and we all know that the oil companies are going to be big winners. In Alberta the provincial government has decided to split the extra revenue 65 per cent for the province and 35 per cent for the oil companies. This means that the $2.50 will be split 88 cents for the oil companies and $1.62 for the people of Alberta, giving the oil companies in the province additional revenue of some $528 million per year. Actually, it will probably be higher because of some additional things that have developed during the last few days. This is of great concern to me and I think we should look at this part of the bill.
Another thing that concerns me is the way the government is going to subsidize the oil companies in eastern Ontario, Quebec and the four Atlantic provinces. They will subsidize them, trusting their accounting system and their judgment on how much the oil is going to cost when they purchase it offshore. I suggest we are going about this the wrong way. We should, instead, establish a national petroleum corporation or marketing board that would purchase all offshore oil and sell it to the people in the east. That would be easier and less bureaucratic than the system we are getting into.
How do we know how much Exxon is going to pay for oil in Abu Dhabi, Saudi Arabia or some other states in the Middle East? How do we know how much of the price paid for oil in Canada is real and how much artificial? How much of it will be theirs, because they are handling it with other subsidiaries? How much can they obtain, because it is in the hands of parent companies in the United States? How much information can we really get? Mr. Speaker, these are questions that I ask and that our party wants answered before the bill passes.
I also wonder about the fact that the bill is to be administered by an allocation board. Why is that? When the allocation act passed it was my understanding that the only time this board would be operational, except for a small staff, would be if the government or parliament declared an energy emergency. Why will this legislation

not be administered by the National Energy Board or the Department of Energy, Mines and Resources, instead of building another bureaucracy to do it? These are a few of the questions that I ask, Mr. Speaker, a few of the questions that I want answered and which I believe that the people of Canada want answered before we pass this legislation.
Clause 54 of the bill, on page 24, deals with special cases. An importer may ask for more funds than are provided under the bill if he meets irregular or abnormal circumstances. I wonder how that provision will be interpreted and whether it might not open the door to companies to make higher profits. I have serious questions about that part of the legislation.
As we debate this bill I think we should see it as a step toward a new national policy in this country. I do not know why we do not have two-price systems in other commodities. As a Saskatchewanite, I sometimes wonder why it is that two of the three commodities for which we have a two-price system are produced in Saskatchewan- oil and wheat. We do not have a two-price system for commodities such as iron, lumber and nickel. It seems to me that we should have a two-price system for them and charge a lower domestic price than the world price. We should have an export tax, for example, on commodities and channel the funds back to the provinces and Ottawa for further development of the resources and basic commodities of the country. We should be pursuing such a policy. This would help fight inflation and help the economy. I do not know why we are not doing it. I suggest we should be moving in this direction.
Mr. Speaker, when we discuss gas and oil we should be considering public ownership. We should be treating these as public utilities, owned and controlled by the people as hydroelectricity is in most parts of the country. We should examine the example of Saskatchewan where all the money gained from oil is going back for exploration and development of the gas and oil industry in the province, under public ownership and control. That should be done at the national level, with agreements between the provinces and the federal government.
When I hear the Minister of Supply and Services (Mr. Goyer) speak about the development of the tar sands, I am terrified. He has been going around the country talking about bringing in billions of dollars of capital from Japan, Europe and the United States, developing the tar sands and using the revenue from the sale of oil to repay the debts accumulated in building tar sands plants. Who is calling the shots here, Mr. Speaker? That plan was devised by Herman Kahn at the Hudson Institute. It strikes me as strange that the Minister of Supply and Services would be peddling Herman Kahn's ideas. It strikes me as strange that he should have made representations to cabinet on two occasions last fall about the development of the tar sands.
It strikes me as strange, Mr. Speaker, because I suggest there are certain connections between the Hudson Institute and the Liberal Party. The Hudson Institute has opened an office in Montreal, Hudson Institute (Canada), which is headed by one, Claude Frenette. He is no stranger to the Liberal Party. He is very close to certain cabinet ministers, such as the Minister of Supply and Services. He
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was also a vice-president of Power Corporation. I wonder about his connection with Power Corporation and the talk about Power Corporation going into the oil business.
These are questions that I throw out. Who is calling the shots? Who is advising on a national oil policy for Canada and a national resources policy? Is it actually the government of this country, or is it the multinational corporations or some of the big business concerns in this country and abroad? Mr. Speaker, these are a few of the questions that I raise about the bill before us, and I think they should be answered before the legislation passes this House.


Mr. Harvie Andre (Calgary Centre):: Mr. Speaker, I rise to participate in this debate almost with a sigh of relief, relief that the question of crude oil pricing in Canada is finally approaching the point of solution. We in the House of Commons, and indeed all Canadians, will be able to get back to what are more important questions over the long run, namely, taking advantage of the tremendous opportunity Canada has with regard to energy. I say "almost a sigh of relief" because it would have been a genuine sigh of relief had the minister and this government restricted themselves to bringing in a bill which had the purpose of implementing and giving legislative back-up to the agreement reached between the first ministers at the long lunch at 24 Sussex Drive.
It is a relief for me, this House of Commons and, I am sure, all Canadians to hopefully be seeing the end of an incredible history of vacillating policy commitments, contradictions and inconsistencies. Commitments were made one day and broken the next. This goes back over a considerable length of time. Indeed, two years ago the minister first promised he would be generating an energy policy that would be coming out that winter.
The question of pricing in particular became an issue on September 4 last. We left for the summer recess in July, only to be called back in August because of a railway strike. While we were on recess, the leader of the New Democratic Party was travelling around the country saying that he had just about had it with this government and he did not know how much longer he could support them. I notice he has been saying the same thing during the past couple of days.
We came back to this House and legislated the railroaders back to work. The government felt compelled to make some statement on inflation. The cost of living was going up at that time at what we thought was an astronomical rate of 8 per cent. We know now that was almost low compared to what the government managed to achieve this year. In any event, the government felt compelled to make a statement. The cabinet met through Labour Day weekend. On September 4, at 2 p.m., we came into the House to hear a statement by the Prime Minister (Mr. Trudeau). We had to adjourn for two hours because the statement had not yet been typed.
We came back to the House two hours later and were informed there was a freeze on the price of western Canadian crude oil. As a sop, if you like, to western Canada, the province of Alberta in particular, the government also said it was going to build a pipeline to Montreal

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in accordance with the wishes that had been expressed over the previous eight or nine years. It was nine days later that the government realized it could not make this freeze work, as a result of section 83 of the National Energy Board Act which required the National Energy Board to restrict any exports of Canadian crude oil at less than market value.
The government then quickly invented an export tax and put it in place. At that time it was 40 cents. That was on September 13. This gave rise to all of the history with which we are now only too familiar, the understandable cries of concern from the producing provinces and a great deal of concern by those on this side of the House about the direction the government was taking. There was then the Middle East war, the Arab embargo, all the resulting moves by OPEC nations, and so on. No one could have foreseen this. Whether the OPEC nations took advantage of a situation, or only obtained their just due, I think there can be arguments on both sides.
What is appalling, totally unacceptable and disgusting is the claim by the Prime Minister, the Minister of Energy, Mines and Resources (Mr. Macdonald) and this government that this price freeze and the export tax was a demonstration of their tremendous foresight and, indeed, without this export tax and price freeze they would have been unable to implement the pricing policy that appears in this bill. That is a bunch of nonsense. That move on their part caused nothing but ill-will. It will take a great number of years before that is cleansed from our society. Regrettably I make that statement.
I have no interest in maintaining the animosity which might exist between certain people in western Canada and eastern Canada. It is very unfortunate for this nation that it exists, but if there is fault it should not be placed with the manufacturers or the displayers of bumper stickers. It should be placed where it belongs, with the Minister of Energy, Mines and Resources.
I will cite a further example, if any further proof is needed of this government's deceitfulness. Although the government claims it had a tremendous amount of foresight in its moves of September 4 and 13, we need only look at the Toronto Star which,was quoted this afternoon by the hon. member for Peace River (Mr. Baldwin). The Prime Minister is quoted as saying he did not feel the federal government had any right to interfere in the energy pricing policy. In terms of an oil pipeline to Montreal, we need not look any further than page 14 of the energy analysis which the government tabled at the end of June last, in which it is stated:
To date, the security threat has not appeared serious enough to justify the very costly arrangements of supplying the region east of the Ottawa Valley with western Canadian crude oil.
It is a sad history of inconsistencies, broken promises, vacillations and incompetence. I could think of a few other words but they might not be parliamentary. As the Middle East war produced its supposed embargo and actions by the OPEC nations, we saw really incredible behaviour by this government. They behaved very much like the character in a children's story about the sky falling in. I think the name of the character is Chicken-licken who said, "The sky is falling in, the sky is falling in." The government were literally running around in circles saying, "The

sky is falling in." They said, "We won't have any oil this year. We will be short of oil. People will freeze in the dark." The Turkey-lurkeys said, "Yes, indeed the sky is falling in. We had better do something." In the case of the children's story, it was Chicken-licken, Foxy-loxy and Turkey-lurkey. Indeed, it was Foxy-loxy who convinced them the sky was falling in in the first place.
Foxy-loxy in this case is the Minister of Energy, Mines and Resources who, for his own purposes, convinced some people that indeed we were in a terribly perilous situation with regard to energy, we would have terrible shortfalls and we must act to implement everything he suggested. Unfortunately, Chicken-licken and Turkey-lurkey were not eaten, as they were in the story. I suggest that is only right, because poor Foxy-loxy would have had indigestion.
It cost the people of Canada at least $15 million because of some asinine heating oil purchases by the Minister of Supply and Services (Mr. Goyer). The story unfolded as the result of persistent questioning from this side of the House. In terms of the government's purchase of heating oil last winter, it is absolutely unbelievable. They paid an average of 79 cents per gallon for heating oil which is now being offered for sale at 25 cents a gallon in Montreal, and there are no takers. It is incredible. Indeed, the amount of money that that oil deal cost was far in excess of the cost of the Bonaventure. In terms of the Bonaventure, we at least had the Auditor General look into it. It is about time the President of the Treasury Board (Mr. Drury) asked the Auditor General to look into this heating purchase, because there are still many unanswered questions. Another incredible aspect of this story was illustrated on December 6 when the Prime Minister (Mr. Trudeau) was making his statement indicating that the freeze would not end on January 31. Incidentally, the Minister of Energy, Mines and Resources had promised just the night before that it would. Nevertheless, the Prime Minister used this opportunity to expound upon all of the new national oil policy initiatives the government was taking, among which was a decision to establish a national petroleum company. The Prime Minister said, and I quote from Hansard:
Finally, the company will assist in assuring reliable and adequate imports of oil to meet present and foreseeable new needs for foreign oil.
The government has found in recent weeks that it can play an important role in purchasing petroleum and petroleum products. It proposes to exercise this role through the company.
Well, if it is the wish, and if it is the will, and if the Chicken-lickens and the Turkey-lurkeys Liberals and NDPs force a national petroleum company on this unfortunate country, at least let us hope that those individuals who were working for Supply and Services in connection with this heating oil purchase are not hired by the company to act as its agents. Because if we lose $15 million every time the company makes a purchase in the market we will soon find it is costing us a very substantial percentage of the federal tax revenue.
During this period, during this frantic "the sky is falling in period," when everybody, or at least everybody on the Liberal side and in the NDP corner of the House, was convinced that disaster had struck, the Minister of
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Energy, Mines and Resources used the crisis atmosphere first to get cabinet approval of his national petroleum company, second to expand the responsibilities of his department and agencies accountable to his department, and third to introduce the energy supplies emergency bill and get it through the House.
In that situation this party made every possible effort to determine the facts in terms of Canada's shortfall in energy reserves this winter. We made every possible effort to see that expert witnesses were brought before the committee in order truly to determine Canada's position. At every step our moves were obstructed by the government and by the NDP. They said, "How could you be so irresponsible? Don't you know there is going to be a tremendous oil shortage this winter? If you are going to be responsible, pass this act immediately so that the government can set up its emergency energy allocation board and allocate the available supplies."
Well, Mr. Speaker, I am sorry to say that indeed we did back down from some of these demands and we did give approval to the bill, with some important changes. We did manage to get a degree of parliamentary control, but with the passage of that bill one of its provisions was the creation of another empire for the Minister of Energy, Mines and Ressources to administer, namely, the energy allocation board. This energy allocation board was supposed, according to that bill, to be responsible for implementing and allocating energy supplies within the country should we be faced with a situation of shortage. Indeed, we were faced with a shortage, and its most knowledgeable people stated there was no reason for us ever to be faced with a shortage since we were self-sufficient and all that was needed was a reasonable amount of good planning. This board really did not have a job. I see that as a result of part III of this bill the energy allocation board now has a job. I suppose I am happy to see it; I hate to see underemployed civil servants.
Mr. Speaker, I have omitted a considerable amount of detail in this sad story of the government's performance in the energy sector over this last year and a half, actually since the last election. It truly is a sad story and I sincerely hope, for the benefit of all Canadians, that the bill marks the end of that sort of behaviour; that from now on we shall see responsible, consistent behaviour from whoever is minister of energy, mines and resources and it will be in accordance with the type of advice which is offered in this book. It is incredible to me that the government would offer this energy analysis for consideration at the end of June last year, a booklet which contained so much excellent advice, and then proceed totally to ignore it and to confuse, distort and disrupt the situation to an unbelievable extent.
In particular, I wonder why the minister will not, in spite of our representations, follow his own advice, namely, that given on page 9 of this energy analysis that no national policy can be contemplated without the fullest intergovernmental consultation and consensus. That is excellent advice, yet we have an admission from the minister that this bill, implementing a very important agreement in terms of price, has never been submitted to the provinces; that the provinces have never been asked to respond. The minister told us this is an important part of
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national energy policy. He stated today that there has to be the fullest consultation between governments before a national oil policy can be implemented, and it puzzles me that the minister will not take his own advice.
Parts I and IV of the bill implement the agreement reached between the first ministers at their luncheon recently and we have no general disagreement with this aspect of the bill. Part I provides for the export tax, legalizing the tax which has been in existence since September 13. We think it is about time it was legalized. Part IV provides a subsidy so that Canadians east of the Ottawa Valley will pay the same price for petroleum products as those in the area west of the Ottawa Valley. This has been the policy of the Conservative Party, one price across Canada, since well before the government even thought of it, so we can hardly object to that provision.
However, we do object to some of the aspects of part IV because it seems as though the government has looked at four or five different ways of doing things and has chosen the most difficult and the most complicated to administer. As to parts II and III, let me say that if we seek a uniform price less than the world market price, all that is required is an export tax. A uniform price existed in Canada prior to any export tax at all. It was based roughly on the Chicago price as being the main market area, and that was pretty well uniform all over Canada served by western Canadian crude. It is clear that if you put an export tax on crude destined for the Chicago market, it will lower the price of western Canadian crude. The same conditions which resulted in uniformity of price before will still apply and we would have a uniform price system. That is all that is necessary.
In part II of the bill the government has gone far beyond this. It is proposing a complicated set of regulations in clauses 22 and 23. Why it has taken this route and imposed this unnecessary complication raises very serious questions in my mind. Quite frankly, I can be forgiven if I suggest that perhaps this provision is directed at the provincial marketing boards. It may be there is another motive behind this move by the Minister of Energy, Mines and Resources. Rather than seeking to achieve uniform price as he claims, perhaps he is seeking to outlaw or to disqualify the operations of any provincial marketing boards that exist in Saskatchewan and Alberta. If that is the case, I think this is a very devious way of going about it. It may be a valid thing to do, but surely if the government is going to stick to its commitment to consult, this step should be taken after consultation and with the consent of the provinces, not as a result of a unilateral proposal that is snuck into a bill in which it does not belong.
These kind of ad hoc addenda to legislation to achieve some other purpose are becoming a habit with this government, not a habit which we should condone. Certainly this party will want to have a good look at this particular aspect. We are not going to be bullied into passing these parts of the bill in the same way as we were bullied into passing the energy supplies emergency bill last Christmas. The fact of the matter is that the sky is not falling in and we do have time to consider, to consult, to call witnesses

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and to make sure that we pass good legislation. This is our responsibility to the people of Canada.
As for part III, this section of the bill raises very great concerns. It appears to be, to all intents and purposes, a club to hold over the producing provinces so the federal government can say, "Unless you reach agreement with us, we shall impose our agreement. Furthermore, we shall impose it without consultation and without the approval of parliament; we will do it on the word of the minister alone". As my colleague for Peace River stated this afternoon, this is a part of the bill that we cannot swallow. As my colleague also indicated, before we can take the word of the minister as to a commitment, we want to make sure it is given under oath.
Clause 34, which provides that part III shall come into force on a day to be fixed by proclamation, should be amended. The act should come into force only after approval by the House of Commons. Then we will have had an opportunity to be sure that the proper consultation between the federal government and the provinces has occurred. We would then know that if an agreement had been reached it was not because the minister or the federal government in general had used this club to which I have referred.
Part III is very similar to the other parts in that it contains a great deal of detail and unnecessary law in terms of implementing a uniform price across Canada. We do not feel that this is the desirable way of approaching the matter. It is quite unnecessary to be so complicated. We suspect the minister has other motives in mind.
Part IV of the bill implements the program to subsidize imported oil coming into eastern Canada, so that the price Canadians in that part of Canada pay for their oil is the same as the price Canadians in other parts of Canada pay. As I have indicated, it is obvious that the government has selected the most complicated subsidy program imaginable. The government is going to subsidize on a separate basis literally every single boatload of oil imported into Canada. The government must have chosen to do things in this way because the energy allocation board has built up such a staff that it needs a complicated method like this to keep the staff busy; I can think of no other reason.
Surely if we can have one uniform export tax we can have one uniform import subsidy; the same basic principles apply and it would be much easier to implement. Customs and excise officials could keep track of the amount of oil imported, and companies could apply for their subsidy in the same way as they pay their import duties. Administration would be dramatically simplified and the powers that the government asks for in part V would not be necessary. Therefore, I seriously question why the government has taken this unnecessarily complicated way of subsidizing the importation of crude oil into the region east of the Ottawa Valley.
There is also no provision in the bill to cover the situation we witnessed this winter where Canadian crude was shipped from the port of Vancouver through the Panama Canal to the eastern part of the country, thus decreasing our reliance on Middle Eastern crude which was under embargo, and possibly helping us avoid a shortfall this winter. Under the proposed subsidy program it would be impossible for a company to do this again, because clearly

it would have to pay all the transportation costs out of its own pocket. The company would be better off bidding for some of the high-priced Middle East oil at $30 or $40 a barrel. It would not matter how much it bid for it, because it would get a subsidy from the Canadian government.
This brings me finally to why I contend the subsidization program is wrong in principle. It gives companies no incentive to shop around. As I say, it does not matter what they pay for oil, because they are going to get a subsidy. If a company has an option on some oil, then regardless whether the oil is $40 a barrel or $50 a barrel, the government will pay a subsidy which will bring the price down to $6.50 a barrel. Therefore, I contend the program is wrong and should be thoroughly examined.
To me, part V is the most incredible part of the bill. The powers granted to enter premises and seize records and information go beyond the bounds of common decency. I know we tend to worry about the privacy of the individual and not about the privacy of corporations, agencies and so on, but I think it is about time we did give them a little consideration. Yet under this legislation the federal government could walk into the premises of the Energy Resources Conservation Board of Alberta and seize all their records. They could walk into the premises of the Department of Energy, Mines and Resources in the province of Saskatchewan and seize all their records. I contend it is absurd to give the federal government this sort of power.


Gerald William Baldwin: Perhaps they think that is the only way the minister can get intelligent information.


Harvie Andre: As my colleague from Peace River says, it is probably the only way the minister can get information about what is going on. It is regrettable that we have a continuation of this ad hockery by this government in its approach to things such as energy policy. Had they stuck to part I and part IV we might have passed this bill by Wednesday. I am sure we could have had it passed by Wednesday-but no, they had to put in this other nonsense.


Some hon. Members:: Oh, oh!


Harvie Andre: You guys haven't even read the bill; what are you talking about?


Gerald William Baldwin: Ask Goyer what it all means.


Harvie Andre: Yes, ask Goyer. This is indeed regrettable, because it is about time the energies of this House, of this government and of this country were directed to the more positive aspects of the Canadian energy situation. Canada should be in an enviable position compared to the rest of the world, and I suggest that after the next election it will be in that position.


Some hon. Members:: Hear, hear!


Harvie Andre: We have the potential. We have a great racehorse under us, but unfortunately we have a 250-pound minister on top. We have a tremendous opportunity in Canada, being the only nation that is self-sufficient in
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energy. Our crude is selling for $4 less than anywhere else in the world. This should give our industry a competitive advantage vis-a-vis the rest of the world, an advantage we have never had. It is a source of sorrow to me that we continue to have fumbling and incompetence on the part of this government when in fact we should be charging ahead and taking advantage of the opportunities available to us.
There are many other aspects of this pricing agreement which I might have gone into, including some of the points referred to by the hon. member for Yorkton-Melville (Mr. Nystrom) regarding the so-called quid pro quo promised both producing provinces at current production rates if we exhaust this resource in 12 or 13 years. Clearly, that means a responsible government has to look at two things, diversification of our economy during this period of time in order that we will not fall into serious economic straits when that time comes and, secondly, at ways to ensure that an aggressive and active exploration program is maintained.
In both these provinces the potential exists for further discovery. If we as a nation are to remain self-sufficient, we must discover these extra supplies of oil. The government would be irresponsible not to progressively pursue a policy that will result in such exploration and, hopefully, discovery. By a responsible government I mean a government that will ensure that those knowledgeable in the area have the opportunity. It is totally irresponsible to suggest on the one hand that Mr. Macdonald's national petroleum company is to discover all the conventional crude oil available, and on the other that Mr. Goyer's tar sands plan will discover the unconventional supplies. I see you getting ready to rise, Mr. Speaker, so I will close on that point.


William Gordon Ritchie: Mr. Speaker, in dealing with this bill we are being asked to give parliamentary approval to a major decision, I think one of the most major decisions that has been taken in the life of this country and one that could well set a pattern for the future of the nation. I think the best that can be said is that it is a solution, but it certainly poses the significant question: Is it the best solution at the moment, and what will it lead us to?
It is significant, it seems to me, in that it confiscates the natural resources of some provinces for a time, to be used in the so-called national interest. This is something that rarely has been done in our country, but there have been occasions in the past. There have been occasions during which prices paid to producers for very valuable commodities have been deliberately made significantly lower than the market value. One such occasion was in respect of the price of wheat during the Second World War when Canada sold wheat to our allies at prices far below world prices. Memories of this action in respect of wheat are particularly vivid among the western agricultural community, and there is no doubt that considerable western alienation or skepticism about central Canada arose as a result of the pricing of that wheat so low on the markets of the world.
By adopting a mechanism for pricing crude oil in Canada at prices much below the world level, which might seem like a very good idea for the moment, we may well be
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opening a Pandora's box of trouble in the long run by exposing our trade in the markets of the world to considerable retaliatory action. No one will dispute the fact that a sudden rise in the price of crude oil could create great hardships to home owners and other users of our oil, and this is of particular importance in view of the cold Canadian winters. A cushioning mechanism is needed to avoid undue exploitation and hardship, and fortunately we are able to do this because of the situation. It is no secret that other forms of energy, even those controlled by government agencies, are to increase in cost rapidly within the next few years. Mr. Schreyer, Premier of Manitoba, has announced that Manitoba Hydro will experience a 14 per cent increase over the next three years, bringing the increase to well over 50 per cent. At the present time Manitoba enjoys one of the lowest hydro rates in Canada, indeed on this continent.
Just a year ago, at the time of the Manitoba election compaign, the premier accused some members of the opposition of misrepresenting the cost of hydro development in that province when they suggested it would require $171 million in respect of the so-called Winnipeg control, yet now the chairman of Manitoba Hydro has said the same thing will be worth $233 million. The same thing is true in respect of the Nelson River project. The cost of installation was said to be $1 billion, but the latest estimates are in the neighbourhood of $4 billion. Just as with private corporations, government corporations are finding it impossible to hold the price line.
By reaching in and setting the price of products, the federal government has effectively taken away from the provinces the control of their own natural resources. By setting a two-price system we are inviting the same thing to occur in respect of other commodities as that which occurred in respect of wheat; and this has already occurred to some extent with lumber, pulpwoood, plywood, paper, products of the auto industry and many other products controlled by government.
I suggest that we have been perhaps unduly concerned about oil because it has been so cheap that we have come to rely on it in the western world perhaps to an abnormal extent. I suggest that control of oil prices would not have come about except that the producing provinces happen to be in western Canada. Had oil producers been in Ontario and Quebec it is obvious that a much different approach would have been taken to the problem. Oil prices would in all likelihood have been allowed to increase, with perhaps a subsidy to help those unduly affected.
So far as confederation is concerned, the westerner believes that to a certain extent his resources are being used for the good of Canada generally without any equivalent care being taken to compensate him for this. We can expect to see increasing disregard for provincial rights by this government as time goes on. Enormous bureaucratic control will have to be employed in order to exercise jurisdiction over this commodity. This will certainly decrease private initiative and investment in respect of oil activity in the oilfields.
The way the so-called $6.50 a barrel was arrived at is interesting. The ten provincial premiers and the Prime

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Minister (Mr. Trudeau) sat down and decided what a barrel of oil should cost. Why is the same thing not done in respect of the price of eggs, beef or other commodities? It is obvious that not much thought was given to the continuation of supplies of oil, oil exploration and the oil industry. It is difficult to see how exploration can continue with the price of oil at $4 a barrel while it is necessary to compete for exploration money with other parts of the world where the price of oil is much greater.
Even if we say the government can enter the exploration field, this requires dollars which then would not be available for other purposes. This method of dealing with the problem leaves much to be desired. It seems logical that if the price at the wellhead is to be increased, the money could go to the oil companies directly and that the tax structure, including an excess profits tax if necessary, should be employed to make sure that undue profiteering will not take place. In this way legitimate exploration and development would be rewarded.
What has happened is that the three provinces, British Columbia, Alberta and Saskatchewan can add an extra $1.7 billion revenue from their producing wells. Some of this money may be allocated to the oil companies to encourage them to increase their exploration and developmental activity. However, there is no compulsion on them to do so. Saskatchewan apparently intends to give nothing, and presumably intends to carry on its own exploration. It seems at this time that the plans of the provinces are hazy. It is almost certain that most of the revenue accruing to these two provinces will have to be used in the service industries to service the people in the normal way.
At the same time, Quebec and the Atlantic provinces will receive large sums of money and tax equalization grants from Ottawa while being insulated against realistic prices of oil. It has been calculated that over $100 million of additional equalization payments will be forthcoming from Ottawa and that most of it will go to Quebec and the Atlantic provinces. In respect of the provinces which list their new-found wells in their capital accounts, this will mean that they will not be calculated as part of Ottawa's national tax equalization formula.
The end result is that Manitoba and Ontario will pay extra for oil but will receive no offsetting compensation from Ottawa. Alberta, British Columbia and Saskatchewan will receive tremendous windfalls, although their motorists will have to pay extra for gasoline. Quebec and the Alberta region, although having to pay extra for gasoline, will receive handsome equalization payments from Ottawa. So Ontario and Manitoba will not benefit to the same extent. Some people might ask why Ontario needs this benefit since it is so rich in any event.
In relation to the export tax and our trading stance with the rest of the world, there are some very interesting developments. We can almost certainly expect retaliation for our actions. I would think this export tax would be considered by the rest of our trading partners as a nontariff barrier. We will not be able to protest if extra tariffs should be placed on bauxite, orange juice and many other tropical items we are unable to produce in our country.
This whole bill, although relatively simple, brings forward some interesting discussion about Canada's role, particularly as a trading nation. We are a trading nation.

We have always relied to a great extent on the export of energy to help our foreign exchange position. We have imported low-cost oil in eastern Canada and we have imported coal into Ontario. At the same time, we have exported surplus energy to the United States midwest. We have exported electricity at a variety of border locations in Manitoba. For instance, Manitoba has a very good arrangement with its United States counterpart. It exports electricity during the summer in order to keep the Americans cool during their hot weather period, while during the winter the electricity is retained for the heating of homes. I think this is a very good arrangement.
One might ask what would happen if the United States decided not to export coal to Canada? In certain circumstances they would certainly be justified in doing so, and this would create many problems for our country. The world's low-cost energy has been held in the hands of a few nations. We must decide whether we want to concentrate on our own security or maintain our position as a trading area. It seems that for many years we pressured the United States to allow us to export oil, yet now many Canadians are saying we should not do this. One could hardly blame the United States for attaching little validity to what we said many years ago.
We should not disrupt international trade agreements so long as we do not endanger our current security. It has been recognized that trade in energy is only part of our total trading pattern but that any withdrawal from this area would create many problems for us. Another important area about which we must think is the way in which we use our energy resources and whether or not we develop them for our own purposes. There are conservationists who say that we should not develop any energy sources because this leads to pollution, and so on. Unfortunately, however, no matter how good this philosophy might sound, we cannot follow it. It is generally considered that we must maximize our wealth in order to give our people a better standard of living.
There are those who say we should import no energy into Canada and should not export energy in any form. The example I gave in respect of electricity and the arrangement between Manitoba and its counterpart in the United States is not very compatible with such a view. We must recognize that there are some problems involved in adopting such a stance. There is the matter of the scale of economics involved in bringing into supply the energy we shall need for our own use. This may well be too large a problem for our relatively small domestic market to sustain. We could incur substantial economic penalties. One example might be the Mackenzie Valley. It is obvious that the Mackenzie Valley gas pipeline can only be tapped in the immediate future if the Americans are involved. Then, again, we wish at present to export both resources and technology in many areas. We want to export uranium, Uranium, Candu technology and nuclear-generated electricity all fall into this category.
It seems to me that we also must realize that national interest must be put above regional interests, and this poses a real problem. It is obviously very difficult to reconcile the national interest with regional interests. The province of Saskatchewan, which for many years was a

have-not province, having suddenly become the owner of a scarce resource found that it could not capitalize from it as it should in a purely economic way. There must be recognition of the fact that provincial rights regarding the ownership of resources should not be changed unilaterally by the federal government. If this bill is to change the right of the provinces to their resources, the provinces will find that they will lose in importance to their own people, that they will be diminished and eventually will become not much more than city governments.
We must also accept the fact that our economic growth must be maintained. The important question that this bill tackles is who should exercise control over the development of resources and how the benefits flowing from them should be distributed. In other words, how should our energy resources be used to maximize our financial potential: should they be used to subsidize the manufacturing industry in its various forms? I think this is the central question and one that is causing those who live in the remote parts of the country serious thought with regard to the government's thrust.
There are those who suggest that manufacturing activity has been hampered in Canada for many years, that it has been insignificant and inefficient. I think it is fair to say that without the great wealth which our energy and natural resources have brought us, the manufacturing industry could not have provided Canada with the high level of income that it enjoys. Wealth distribution is necessary. Also, it must be remembered that the province of Saskatchewan has been prevented from reaping the benefits of its resources. Finally, we must ask ourselves whether we want to have a market economy in control of our petroleum resources. I think this is probably the key to the problem. Traditionally, Canada has had a market economy in the oil industry. Personally, I have had to make the decision whether to use electricity, gas or oil. I chose heating oil because it afforded greater flexibility and was the best choice for my purpose. But will the price of $6.50 set by the government be enough?
We must remember that when the economics of oil are considered, $200 or $300 spent in the Middle East will produce one barrel of oil a day. In the North Sea, $25 spent will produce a barrel of oil a day, whereas we require $10,000 to produce a barrel of oil if the tar sands are exploited. In the United States, new oil brings upward of $10 a day. It attracts Canadian companies and Canadian money, mainly the independents which are considered to be our particular contribution to the oil industry, Will the price of $6.50 for oil bring them back? The fact that oil reserves are being reduced by half a billion barrels a year-that is, the traditional, conventional oil wells-and that we have not had a strike in many years must not be forgotten.
Oil drilling statistics indicate that Saskatchewan, Alberta and British Columbia have reduced their oil drilling activities so far this year. Obviously, this will pose a significant problem. There is no point in saying that we have found a solution in setting the price of oil at $6.50 a barrel. So long as the Americans will pay $4 for it, or so long as the Arabs hold it up, the fact is that this will be a continuing problem. Will the entry of the government into the market enhance activity within the oil producing
Petroleum Administration Act
sector of our economy and provide us with the required amounts of oil for the future?


Mr. Stan Schellenberger (Wetaskiwin):: Mr. Speaker, it is not long ago that I rose to speak on an oil bill. At that time it was the oil allocation bill and I rose to speak on it because the government was asking for extraordinary powers to deal with a so-called crisis which I felt was a transportation crisis rather than one of supply.
Today we look at Bill C-18 which is to impose an export tax on crude oil and provide subsidy funds to the non-producing areas. Again I see that the government is asking for extraordinary powers which I do not think we should grant them. Already the government possesses many of these powers under the National Energy Board Act and other existing legislation. However, as the hon. member for Calgary Centre (Mr. Andre) said, the government is like a fox in the crowd, trying to sneak in some powers which perhaps were not considered at the provincial-federal conference which was held recently.
As we have said before, we would not have too much objection to passing parts I and IV of the bill, as the hon. member explained when speaking about the history of the export tax and its necessity after the price freeze on oil. But why do we need to grant the government powers under parts II and III?
I would like to take this opportunity to congratulate the Prime Minister (Mr. Trudeau) for being able to get the ten provinces together and come up with some agreement. Before I go on to a close scrutiny of the clauses in the bill, I would like to speak about a group of people who are caught in the middle. They do not have much to do with the producing provinces or with the federal government so far as the export tax or the subsidy is concerned. These are our Indian or native people.
On numerous occasions I have spoken to the Minister of Energy, Mines and Resources (Mr. Macdonald) and to the Minister of Indian Affairs and Northern development (Mr. Chretien) respecting the return of the export tax to the Indian people. But before continuing, Mr. Speaker, may I say that I was quite concerned just a few weeks ago when it came to my attention that even if the price of oil were to increase to $6.50 a barrel, the royalty rate to Indian people on their reserves was set at $4 a barrel, and there would have to be substantial changes made in the schedules to the legislation so that they could collect increased royalties and so that the oil companies would not receive the additonal $2.50 per barrel. I commend both ministers for having regulations changed whereby the Indian people could increase their royalty rates above those established under the schedules to take advantage of the increase in price from $4 to $6.50.
So far as the export tax is concerned, I find that although the federal government has been collecting this money it has not allowed the Indian people to take any advantage from it. From October, 1973, until April 1, 1974, a large amount of this money has accumulated in the federal treasury and has not been redistributed to the Indian bands. Perhaps there are some reasons for this. There may be problems involved in giving the total of this

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Petroleum Administration Act
amount of money back to the Indian bands, or even half, according to the precedent set under the previous arrangement whereby Saskatchewan and Alberta got half.
It is something the federal government should look into because future development of oil reserves in the tar sands will not do the Indian people as much good as such development will do for all the rest of Canada. Perhaps we should look at this money as an investment in the ability of these people to look after their own affairs, and in turn to invest it in opportunities for their future. Perhaps they would be able to set up certain industries with it, buy machinery, set up agricultural feed lots, or invest in the lumber and mineral industries. I call on the minister to make an announcement respecting the return of the export tax to the native people as soon as possible, because they could take better advantage of it in late spring and during the summer to build houses or to make investments in their own industries.
Part I of the bill deals with the export tax. I must echo the words of some other hon. members who have said they feel this export tax is setting a dangerous precedent. I have some concern that we may face reciprocal action by other nations in the future, particularly the United States. We have already seen that the example of the OPEC nations in setting the price of international oil is being followed in other areas. Take the case of fishmeal in South America. Some of the nations there have taken a good look at the OPEC pricing of oil and have set higher prices for their fishmeal, even though the price at which this product was previously being sold to Canada gave everybody a reasonable profit. We also find that bauxite from Trinidad and South America is demanding a much higher price in recent days.
What will happen to the world situation if countries start hoarding resources which are not in plentiful supply? How will the third world nations afford those resources and meet the wishes of their peoples to reach the standards of living enjoyed by Canada, the United States, Europe and, more recently, by Japan and a number of other countries? As I say, I am quite concerned about the precedent we are setting in taking advantage of other countries.
Premier Lougheed is a good Canadian who, with his government, has done everything possible during the past year to get oil from Alberta to eastern Canada, shipping it across the mountains and through the Panama Canal. In a recent speech immediately after the conference in Ottawa he said he was pleased with the negotiated price. Perhaps I might outline some of the things he said. I quote:
I would now like to outline the reasons why we concluded that an average price of $6.50 per barrel is in the public interest of Alberta at this time:
The price is approximately the same as the average United States domestic crude oil price which is a matter of significance in terms of continued exploratory drilling for conventional crude oil in Alberta and Canada.
The point has been made many times that we have perhaps only ten to 15 years' supply of conventional oil in Canada, and the industry will require at least ten years' lead time to enable the tar sands to make up the difference in future demand, or perhaps to find more conventional oil in Alberta and Saskatchewan, offshore or perhaps in the Arctic. Adequate incentives must be available to the oil

companies so that they will continue to explore for oil here rather than going to other countries such as the United States or to the North Sea oil fields. Premier Lougheed also said:
Such a price at this time in our view provides adequate encouragement for continued interest in future oil sands projects and should permit the Great Canadian Oil Sands plant to start to make up for previous losses. Syncrude did not anticipate last August that such a price would be realized until 1984.
The instability of the OPEC pricing structure is well known, and a higher price until the world pricing situation has stabilized is considered ill-advised for now. United States energy chief, William Simon, predicted earlier this week that world market pressures would force down the price of oil.
I have heard the question asked by eastern Canadians: What is Alberta going to do with all the money it will receive from increased royalties on the oil it is producing? I think Albertans should make it clear that they are not going to stand forever for the export of their raw materials and resources to other parts of Canada, or to other parts of the world, to be manufactured there and then shipped back to Alberta, with Albertans having to pay the transportation for their return. In Alberta we want to provide industry for the people who are coming there. I see you looking at the clock, Mr. Speaker, so perhaps I might continue another day.


Mr. Speaker:: I apologize profusely to the hon. member, but I have to remind him that it is ten o'clock.



PROCEEDINGS ON ADJOURNMENT MOTION

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

John Douglas Reynolds: Tonight, Mr. Speaker, I want to talk a little about the situation in British Columbia where we have a strike not only at Vancouver international airport but at all the airports in the province, a strike that I think could have been avoided if the Minister of Transport (Mr. Marchand) and the President of the Treasury Board (Mr. Drury) had taken a little more care in dealing with people in that area. I would like to read a telegram sent to these ministers a number of days before the strike took place. It reads:
Owing to the deterioration of labour morale in the federal civil service of western Canada and possibly all of Canada, and after eight years of fruitless bargaining, we find ourselves in a position where we, the airport firefighters of western Canada, must withdraw our services for an indefinite period to study our worsening plight. At present we are over $4,000 per year behind our local counterparts. There have been abnormally large staff resignations in western Canada. One airport in British Columbia plans mass resignation if immediate action by Treasury Board is not taken to guarantee federal government fire-fighters parity with outside counterparts. If the trickle of resignations of the present is not sandbagged, the floods of tomorrow will destory the very foundations of all the civil service. Treasury Board must be made
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aware of the dangerous trend. There must be an immediate reversal of their inhuman, indifferent, and unfair bargaining philosophy.
Fire Fighter Action Committee 658 Miller Road Richmond, B.C.
I am happy to see the President of the Treasury Board here tonight, Mr. Speaker. Five days before the strike took place, his office was called and asked if he would go out and talk to these men because they were concerned about what was happening; the regional bargainers had not been able to settle the problems. That phone call from the firefighting committee has not been answered yet. I should like to refer to page 852 of Hansard of March 25, 1974, and quote the President of the Treasury Board on the subject of regional pay policy which the firefighters are seeking. He said:
In the case of regional pay policy, the government for years has taken the position that it will not be a leader in matters of pay and salary but will follow the pattern set by what is generally known in this country as the private sector. Given the choice of trying to equate the pay of the public service to that of the private sector on a national level or on a regional level, the government must, for common sense reasons, use a regional basis.
I would say to the President of the Treasury Board that that is exactly what the firefighters at Vancouver are looking for. I have been talking to them on a regular basis since before the strike began, and I know they have tried very hard to contact the President of the Treasury Board and the Minister of Transport to ask them to come to British Columbia so they can explain their problems. This morning I telephoned the office of the Minister of Transport to say that I had a proposal from the firefighters on strike that I thought could end it tomorrow. The strikers were asking that the bargaining be done in Vancouver, not with the union in Ottawa which they do not think is doing a good job for them. They were asking for reassurance that the government is willing to talk wage parity with the municipalities in British Columbia and that the talks be based on settling the problems on a regional basis.
I told the minister's executive assistant that these people would be available to discuss this proposal before the House sat today. The members of the union had asked me to attend the meeting because I am the member of parliament for the area which has the largest airport in British Columbia, Vancouver international airport. I have yet to receive a call from the minister's office. In the House this afternoon the minister rose and said, "I was told a couple of minutes ago that my people have landed in Vancouver-"


Joseph-Phillippe Guay: Which minister?


John Douglas Reynolds: The Minister of Transport. I can just about quote him verbatim. He said, "A couple of minutes ago my people landed in Vancouver to talk to the strikers". At a quarter to ten tonight, Ottawa time, I spoke to the strikers and they told me they have yet to hear from the people who landed there this afternoon. The conduct of the minister and of the government in ignoring these people in Vancouver leaves a lot to be desired. If they do not get this problem settled we could have strikes all across the country, which will mean a lot of difficulty for
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many people. I had a telephone call from a man who came back from Mexico last night. He complained that he went through four Customs' stops. First they were checked in Mexico, then in Seattle, which passed them to Blaine, then the Canadian Customs checked them, and again at Vancouver international airport. This creates great inconvenience for the people of British Columbia.
Mr. Speaker, I do not think this government or the minister concerned are making a sincere effort. It is time the ministers went out there to talk to the people, because it is obvious that this dispute cannot be settled at the regional level. The Minister of Transport and the President of the Treasury Board are the gentlemen who have to settle the strike; it is part of their job. They must find out what the real problems are in British Columbia. We hear of western alienation, and this is one of the reasons. Ministers send other people out instead of going themselves to settle the problem. What else can one say but that the ministers should get out there and settle the strike? I know we will now hear from the government about all the work they have done. They have not done a damn thing, because airplanes still are not landing in Vancouver.


Joseph-Phillippe Guay: Mr. Speaker, the last few words of the hon. member for Burnaby-Richmond-Delta (Mr. Reynolds) are normal for members of the opposition. They draw conclusions before they even hear an answer. The hon. member made reference to a parliamentary secretary. I want to make it clear that he did not speak to me today. He might have spoken to another parliamentary secretary, but certainly not to me.
With regard to the hon. member's question, the Ministry of Transport firefighters in Vancouver and at other airports in British Columbia walked off the job at 8 a.m. on Friday, April 5. Prior to this walk-out we had engaged in numerous discussions with the leaders of the firefighters in Vancouver in an effort to dissuade them from this course of action. These employees are represented by the Public Service Alliance of Canada which was certified under the Public Service Staff Relations Act on August 2, 1967 as their bargaining agent.
The collective agreement governing their terms and conditions of employment, including rates of pay, expired March 31, 1974. Bargaining for a new collective agreement with Treasury Board began February 20 and several negotiating sessions have taken place since then. The members of this group have selected compulsory arbitration as the method to settle the dispute if they are unable to reach agreement in direct negotiations.
The heart of the current problem is that the employees in B.C., especially in Vancouver, are seeking what is known as regional rates of pay and the bargaining agent, through its convention, has a policy of national rates of pay. Therefore, as you can appreciate, it is not a dispute with the Ministry of Transport but, rather, a difference of opinion between some members of the bargaining unit and the organization that represents them. The Ministry of Transport is caught in the middle.
In collective bargaining for most parts of the public service, Treasury Board acts as the employer, and negotiations for the firefighters in the public service are between
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Treasury Board and the Public Service Alliance of Canada. Those who are familiar with labour legislation will realize that an employer must deal with the certified bargaining agent and he cannot make separate arrangements with parts of the bargaining unit. In fact, most labour legislation contains specific prohibitions in respect of such action. In the Public Service Staff Relations Act, section 8, subsection (1) reads as follows:
No person who is employed in a managerial or confidential capacity, whether or not he is acting on behalf of the employer, shall participate in or interfere with the formation or administration of an employee organization or the representation of employees by such an organization.
We have attempted to convince the employees concerned that the only lawful course of action must be through their bargaining agent and we are prohibited by law passed by this parliament from pursuing any other course in this regard. We have attempted, and are continuing efforts to persuade employees that this is the proper way to deal with their problems and are doing everything within our power to facilitate such action.


FINANCE-RESULT OF COURT ACTION AGAINST PERSON DISCOUNTING GOVERNMENT CHEQUES-POSSIBLE AMENDMENT OF SMALL LOANS ACT
Mr. Doug Rowland (Selkirk):: Mr. Speaker, for three years now I have been raising in this House the question of government action to control the practice of discounting operations on government cheques. On March 19 I asked the following question of the Minister of Consumer and Corporate Affairs (Mr. Gray):
Is the government contemplating amendments to the Small Loans Act which would bring within its ambit this kind of transaction which is essentially a lending operation?
The minister replied:
Yes, Mr. Speaker, this is being examined.
After three years, the government is still studying the question. At least when I raised the question initially with the minister responsible for the Unemployment Insurance Commission, three years ago, the hon. member for Verdun (Mr. Mackasey), I got some action. There were some changes in UIC regulations which prevented the assignment of unemployment insurance cheques to discounters which diminished, if it did not eliminate, the practice of discounting unemployment insurance cheques. Beyond that, the Superintendent of Insurance carried out an investigation to see if the practice of discounting government cheques was in violation of federal statutes, and a discounter was taken to court. The discounter won the case, as I was informed on March 19 by the Minister of Justice (Mr. Lang), a fact which suggests to me that legislation is required. If the government was serious about dealing with the problem, it would have had legislation prepared to handle the problem in the eventuality that the court ruled against the Crown's case.
Discounting is the practice of providing someone with a sum of money on the basis of their having proof that they are entitled to receive a like or greater sum, and assigning that entitlement to the person providing the immediate cash. Thus, a correctly completed income tax form indicating a rebate due can, if the right to the receipt of the

rebate cheque is assigned, provide the means of obtaining immediate cash. In the types of operation I wish to stop, the amount of cash received is usually 30 to 40 per cent less than the actual amount of the rebate. If computed as interest on an annual basis, that 30 to 40 per cent discount represents usurious interest rates amounting to 1,000 per cent or more when one considers that the lender of the money has only to wait a few days, or up to a couple of months at most, to be reimbursed.
The difficulty in controlling the situation is evident when one attempts to define what this practice of discounting actually involves. If it is, in effect, a lending operation then the powers the federal government possesses under section 91 of the BNA Act to control banking, bills of exchange and interest rates would come into play. Thus, the logical step would seem to be that of amending the Small Loans Act to bring the practice of discounting government cheques of less than a certain amount under its provisions, thereby restricting the effective interest rate charged to a maximum of 2 per cent per month. This is what my bill, C-257, now on the order paper for the second parliament and the third straight session attempts to do.
If, on the other hand, the evidence of entitlement to receive money in the future from the government can be considered to be a piece of personal property liable to sale, then regulation of the amount of discount to be allowed might well fall under section 92 of the British North America Act which lays down the right of a province to deal with contract law.
The area may be regarded as an obscure one and thus best dealt with by means of federal and provincial action. I fail to see why the federal government should fear to take the lead. There is a problem, as the figures show. In 1972, the number of rebates discounted in British Columbia amounted 5,273; in Alberta, 6,391; in Saskatchewan, 2,406; in Manitoba, 1,269; in Ontario, 543; in Quebec, 477; and in Nova Scotia, 93. Thus, more than 14,000 income tax refunds were discounted by sharp operators posing as tax preparers. The total value of the refunds claimed amounted to some $3.2 million. How much will it be in 1973 and in 1974?
The effect of federal inertia has been to force British Columbia to take unilateral action to deal with the situation by using its licensing power to force loan sharks out of business. Persons seeking a licence to prepare income tax returns who also engage in discounting might not get a licence. Manitoba, I understand, is contemplating similar steps. No one, I believe, would consider such legislation to be good legislation. It is arbitrary, it sets no standards and thus it is open to abuse. But it sets no standards and thus it is open to abuse. But in the absence of federal action, indeed, in the light of federal recommendations that this is the action which provinces concerned about the problem should take, there is little else a province can do.
It would seem to me that the federal government should immediately introduce legislation bringing the practice in this country under the Small Loans Act and that it should immediately seek concurrent legislation from the provinces validating the right of the federal government to
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take such action in this specific case. Only in this way can we finally rid this country of a despicable practice in a manner which is completely in accordance with the concepts of due process and equality under the law.


Mr. Pierre De Bane (Parliamentary Secretary to Minister of Consumer and Corporate Affairs):: Mr. Speaker, in my view the hon. member greatly underestimates the legal problems and constitutional complexities underlying the very real problem to which be referred.
I completely agree with him on the fact that there are some absolutely unforgivable abuses, and he gave us a few cases, but I must tell him that so far, in view of the few cases of jurisprudence, the courts have considered that discounting of a government cheque was not a loan but essentially a transfer of credit and, in that respect, I think the hon. member will agree with me that provincial jurisdiction is much more real than federal jurisdiction. In my view, the government of the province that he represents so well in the House could do more since transfer of debt comes first under provincial jurisdiction.
In any event, I want to assure him, even if he is listening with some skepticism, that all federal government departments involved in this matter-National Revenue, Consumer and Corporate Affairs, Justice and Finance- are now working on a solution to this problem without infringing the Canadian constitution. Then, how can this cheque discounting problem which he is referring to and which has lead to absolutely regrettable abuses, not to mention usurious rates, be brought under federal jurisdiction? I want the hon. member to know that it is not a very simple matter, but I agree with him that we absolutely must put a stop to such abuses.
Another related problem must be taken into consideration; we should not tend to restrict unduly the freedom of the Canadian people.
In certain cases, some of them may discount their cheque for reasons which are their own, and I do not think the philosophy of our government system allows the administration to decide for its citizens what is good for them; this, of course, is true within certain limits, which presumes equality between lendee and lender, an equality which is often lacking, I must agree with the hon. member.
I should, however, like to thank him for having raised this problem and to assure him that the Departments of Justice, Finance, Consumer and Corporate Affairs and National Revenue are working towards finding a solution within the framework of the Canadian constitution.


ENERGY-HEATING OIL PURCHASED BY GOVERNMENT FROM ROUMANIA-REASON FOR PURCHASE
Harvie Andre: Mr. Speaker, the gradual unfolding of the story of the government's handling of the heating oil purchased last winter has produced an incredibly sorry picture of incompetence, bungling, and indeed suspicions of serious conflict of interest.
Last winter after the Middle East war and the Arab oil embargo came into effect there was, naturally, quite a bit of concern about the security of supply of oil to the
Adjournment Debate
eastern part of Canada which relies on imported oil. The government was obviously confused and uncertain, to put it mildly. It appointed a group called the technical advisory committee on petroleum supplies, consisting of representatives from industry and several government departments. Based supposedly on the recommendation of this committee, the government decided that there would be a shortfall in supply this winter of between 75,000 and
200,000	barrels of oil a day. Although questioned extensively, the government steadfastly refused to provide proof, or even knowledgeable evidence, that this was a reasonable estimate of the shortfall.
To my knowledge, only one company, namely Imperial Oil, which incidentally does not rely on Middle East crude, publicly suggested that this estimate was valid. Many other companies indicated they would look after their own customers and would do so without government assistance. Of course, we later learned that the government had not taken into account the supplies that would be available from the Newfoundland refinery at Come-By-Chance, sometimes known as the Shaheen refinery, supplies from which would have been available by the end of December last.
We now know that on November 9, 1973, the Department of Supply and Services contracted with Canadian Fuel Marketers-incidentally, a member of this technical advisory committee-to purchase 20,000 metric tons of oil from Roumania and 40,000 metric tons from Shell International Curacao refinery in the Caribbean at a price to be arranged. It is interesting to note that on November 15, 1973, my colleague, the hon. member for Calgary South (Mr. Bawden), asked the Minister of Supply and Services (Mr. Goyer) with what company he had arranged this contract. His exact words were, as reported at page 7819 of Hansard:
Mr. Speaker, may I ask if the minister is in a position to say to whom he has given this blank cheque?
I doubt that my friend the hon. member for Calgary South realized just how prophetic that question was, because last week in the miscellaneous estimates committee the minister finally acknowledged that the average delivered price paid for 26 million gallons of oil purchased was an astronomical 79 cents per gallon. The price paid for the Roumanian portion was an unbelievable 99 Vi cents per gallon. Asked why he had made such a terrible deal for the Roumanian oil, the Minister of Supply and Services said it was part of the deal which enabled the government to purchase cheaper, but still tremendously overpriced, Caribbean oil. Yet in committee officials of the Department of Energy, Mines and Resources, upon whose advice the Minister of Supply and Services claimed he relied, stated that the Roumanian deal was quite separate and was undertaken on its merits.
Which story is true, Mr. Speaker? If the true story is that of the Minister of Supply and Services, then why would Canadian Fuel Marketers, a company owned by Shell International, insist that Canada buy oil from the Roumanian State Oil Company with no apparent profit motive on their part? If officials of the Energy, Mines and Resources Department are right, then why did the govern-
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ment buy such incredibly expensive oil, evidently the highest priced heating oil sold this winter or sold ever, for that matter?
These questions need answering, Mr. Speaker. This oil cost the Canadian taxpayers $20.5 million and has a current commercial value of less than one-third that amount. In other words, this deal has cost us more than did the outfitting of the Bonaventure, that other example of government bungling and incompetence. The time has come for the President of the Treasury Board (Mr. Drury) to have the Auditor General conduct a full-scale investigation into this blatant misuse of public funds.
There are a number of questions that need answering, including the question of possible conflict of interest, the question of proper or improper business practices of the Department of Supply and Services, and the question of the competence of the Department of Energy, Mines and Resources which evidently supplied the background information.


Donald Stovel Macdonald: Mr. Speaker, as a result of the hon. member for Calgary Centre (Mr. Andre) ranting away in his rather ugly manner about this question for the last ten days or so there are several conclusions to be drawn. The first is that while members of this House, the hon. member for Qu'Appelle-Moose Mountain (Mr. Hamilton) and the hon. member for Nanaimo-Cowichan-The Islands (Mr. Douglas), were saying on November 5 that they were concerned about the situation in respect of oil in eastern Canada, and that this government should go out and purchase oil on the market to cover the shortfall that was evidently going to occur, the hon. member for Calgary Centre would have opposed that at the time.
At the same time, he would have said we should not have exercised the contracts on behalf of the eastern Canadian consumer of heating oil and would oppose that as well. That kind of improvidence, that kind of heartlessness and that kind of narrow parochialism which has always distinguished the hon. member for Calgary Centre in this House is the kind of attitude that I suppose more than any other will damage the relations between one group of Canadians and another. I regret that this kind of ugly attitude is represented in this House. We have to put
up with that member with patience, but I must say with regret.
What is the fact of the matter? The fact of the matter is that a substantial portion of the heating oil used in eastern Canada for many years has come from imported products. With international markets tightening up, it was important that the Canadian consumer should be protected in this way. Because of the dramatic increase in the international price due to the shortfall on the international market and the embargo, importers were not in a position to import this oil; therefore the government moved in to protect the eastern Canadian consumer by taking an assignment of the contract so as to open up, in the first place, the Roumanian market for the purpose of access and also to pick up existing contracts from the Caribbean.
The hon. member says the government was uncertain as to the amount of this shortfall. Of course the government was uncertain, as was every intelligent person. Could any intelligent person predict that we would have a cold or an average winter this year, or a milder winter as it turned out to be? Could any intelligent person at that time predict whether the Arab embargo would continue in the way it did, or that production would be reduced progressively by 5 per cent a month? Of course not.
It is all very well to have such magnificent hindsight and talk as the hon. member has, now that we have come successfully through the winter and that eastern Canada did not suffer from the shortfall. Now we have a series of false allegations being made by the hon. member for Calgary Centre and by the hon. member for Regina East (Mr. Balfour). We have had allegations that the oil was not up to snuff, that there was a conflict of interest and that it cost too much because it was paid for at market price on the international market.
I would have to say that the important thing from the standpoint of the government is not to take chances with the people as the hon. member for Calgary South and the hon. member for Calgary Centre are prepared to do. A responsible government will protect the Canadian people against the very worst possible anticipated risks. It is in that framework that we acted to protect the people. I would far sooner have prepared for the worst, and have the best, than to have acted as the hon. member for Calgary Centre suggests, to have hoped for the best and wound up with the worst.
Motion agreed to and the House adjourned at 10.29 p.m.

Tuesday, April 9, 1974