1974-01-04

ROUTINE PROCEEDINGS


Hon. Alastair Gillespie (Minister of Industry, Trade and Commerce):: Mr. Speaker, pursuant to Standing Order 41(2) I wish to table in both official languages copies of two reports, the Textile and Clothing Board report respecting cotton yarns and the Textile and Clothing Board report respecting men's and boys' shirts.


Mr. Howard:: Mr. Speaker, I rise on a point of order relating to the procedure under motions and the responses or lack of them of the Minister of Transport yesterday in the House about the movement of crude oil from the port of Vancouver to the east coast. In response to one question yesterday the minister said that perhaps we could find another opportunity to discuss this, and so on. It would seem to me, because of the confusion that exists respecting government policy and who is right-


Mr. Speaker:: Order, please. Is the hon. member rising on a point of order or is he rising to propose a motion? I think he should indicate to the Chair under what Standing Order he is now seeking the floor.


Frank Howard: I am sorry, Mr. Speaker. At the outset I did say I was rising on a point of order with regard to the procedure under motions. I do not want to move a motion. My point of order is the obvious disdain of the Minister of Transport (Mr. Marchand) for the House in refusing to state clearly here and to the people of Canada, particularly in Vancouver, what is happening with regard to the authority of his department over ships moving crude oil out of Vancouver and the potential danger that arises therefrom. That is the point of order.


Mr. Speaker:: That is hardly a point of order. It may be a point of disorder. I am not sure how to qualify it, but I would doubt that we should have a debate at this time on the point raised by the hon. member.


UNEMPLOYMENT INSURANCE
Mr. Ken Hurlburt (Lethbridge):: Mr. Speaker, I rise under the provisions of Standing Order 43 on a matter of urgent and pressing necessity, namely, the widespread resentment of the majority of Canadians about the unemployment insurance rip-off whereby unemployment insurance benefits induce people not to search for work opportunities. I move, seconded by the hon. member for Moose Jaw (Mr. Neil):
That this matter be referred to the Standing Committee on Manpower and Immigration in order to consider the feasibility of a work incentive, such as an increase in the personal exemptions of $100 per month for every month a person is employed in excess of six months during the year.


Mr. Speaker:: Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


Mr. Speaker:: There is not unanimous consent.


TRANSPORT
Mr. Eudore Allard (Rimouski):: Mr. Speaker, pursuant to Standing Order 43, I seek the unanimous consent of the House to move a motion concerning a matter of urgent and pressing necessity.
The number of railway accidents throughout Canada having considerably increased, I move, seconded by the hon. member for Portneuf (Mr. Godin):
That the House take this opportunity to appoint a royal commission on the administration of railways throughout Canada and suggest means to urgently remedy the consequences of this deplorable deterioration in this service of prime necessity and national interest.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.

January 4, 1974
Oral Questions


Mr. Speaker:: There is no unanimous consent; therefore, the motion cannot be put.



CLASS ACTIONS BILL


Mr. Stuart Leggatt (New Westminster) moved: for leave to introduce Bill C-247, respecting class actions.


Mr. Speaker:: Is it the pleasure of the House that the hon. member shall have leave to introduce the said bill?


Some hon. Members:: Explain.


Stuart Malcolm Leggatt: Mr. Speaker, the purpose of this bill is to provide a right of action to any class or group of consumers who may have suffered loss as a result of offences under either federal or provincial consumer protection laws or breaches of contract and where it is impractical for an individual lawsuit to be undertaken because of the nature and size of the loss. A further purpose is to provide to groups of consumers and others the legal and financial stature to stand on an equal footing with business, government or other large institutions.


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


Mr. James Gillies (Don Valley):: Mr. Speaker, in the absence of the Minister of Finance I will direct my question to the right hon. Prime Minister. Can the Prime Minister tell us, given the fact his government believes that nothing can be done about the root causes of inflation in Canada because it all comes from abroad, whether the government supported the move by the commercial banks of Canada to raise the lending rate to domestic borrowers to one of the highest rates we have had in Canadian history?


Right Hon. P. E. Trudeau (Prime Minister):: Without entirely accepting the premise of the hon. member's question, because there are certain efforts that the Minister of Finance and other ministers are making on the international level-


Mr. Baldwin:: Hardly noticeable.


Pierre Elliott Trudeau: Hardly noticeable to the hon. member for Peace River who is asleep most of the time.


Some hon. Members:: Oh, oh!


Mr. Hees:: You can see it is Friday morning-he's edgy.


Gerald William Baldwin: The Prime Minister must have been wakened for the two o'clock feeding.


Pierre Elliott Trudeau: I see the House is not in a serious mood today, Mr. Speaker.


James McPhail Gillies: Mr. Speaker, I am not sure I really received an answer to my question but I will put my supplementary question. Now that the Minister of Finance is here, I can direct my question to him. Given the fact that the government has taken the position that Canada can do nothing about the root causes of inflation because apparently it all comes from abroad in their estimation, does the Minister of Finance support the policy of the Canadian commercial banks in raising the domestic lending rate to borrowers to the high level that they have in the past month or two when borrowing is done by domestic borrowers?


Hon. John N. Turner (Minister of Finance):: Mr. Speaker, the prime rate was raised by the banks in response to tremendous pressure on the short-term money market both in Canada and the United States as a result of great strength in the expansion of the economy.


James McPhail Gillies: Then the question I would like to ask the minister is this: why did the Bank of Canada not raise the prime rate if this is the reason the commercial banks thought this should be done?


John Napier Turner: Because, Mr. Speaker, in the judgment of the Governor of the Bank of Canada that was not the move to take.


James McPhail Gillies: How is it possible for the minister to take the position that it is appropriate for the commercial banks to raise the cost of borrowing money to domestic borrowers in Canada if at the same time it is not the policy of the Bank of Canada to raise its rate to the commercial banks?


Some hon. Members:: Hear, hear!


Mr. Speaker:: Order, please. I might suggest to the hon. member that this is argument. I am sure he will disagree with me, but I still have to make that suggestion to him.


DOMESTIC CRUDE Oil_PRICE MECHANISM FOLLOWING


LIFTING OF FREEZE AT END OF WINTER-SUGGESTED DEFERMENT OF EXPORT CHARGE LEGISLATION
Mr. T. C. Douglas (Nanaimo-Cowichan-The Islands):: Mr. Speaker, may I direct a question to the Minister of Finance arising out of the statement by the Prime Minister last December to the effect that the freeze on the price of domestic crude would be lifted at the end of the winter season. May I ask him what price mechanism the government has in mind, on what basis the price of domestic

January 4, 1974

crude will be allowed to rise and, in particular, what is the minimum differential that will be maintained between the price of Canadian oil sold to Canadian consumers and the world price?


John Napier Turner: Mr. Speaker, in my statement yesterday I suggested to the House that the movement of the price of petroleum in the Canadian market, the revenues to be derived from any increase in price, and the burdens that might be incurred as a result of the movement of that price were issues that had to be discussed by the first ministers three weeks from now in Ottawa, and subsequently by the ministers of finance, since the international price structure as it bore upon Canada radically affected the whole fiscal relationship between the federal government and the provinces.


Thomas Clement (Tommy) Douglas: If it is the minister's opinion that the whole question of the price structure is not going to be determined until after the first ministers meeting at the end of this month, would it not be advisable to leave the matter of the legislation dealing with the export charge until after that date and in the meantime deal only with the export tax on which we have some specific information?


John Napier Turner: Mr. Speaker, I would offer to the hon. gentleman's perception two responses to that question. The first is that the federal government and parliament should be in a position to deal with the matter in the event that we are unable to achieve some sort of satisfactory arrangement in the short term with the provinces. The second is that parliament should put the government in a position where it can deal now with an intensely flexible international situation, which is why the export charge technique is to be used after February 1.


Mr. Speaker:: I will recognize the hon. member for Nanaimo-Cowichan-The Islands in just a moment for a supplementary, but I would hope we would not anticipate too much the debate that will take place following the question period. It seems to me that we are now bringing into the question period the debate that is to take place later today. In any event, the hon. member will be recognized for a supplementary.


Thomas Clement (Tommy) Douglas: While recognizing that the federal government needs certain authority to go to the conference, may I ask the minister if he in turn thinks parliament should be asked to clothe the government with certain powers without any clear understanding or undertaking from the government as to how those powers are to be used?


John Napier Turner: Mr. Speaker, I think the situation that parliament finds itself in is, first, that it has to be able to deal with the situation after February 1 in as flexible a manner as possible in order not to preclude whatever arrangement is made by the federal government with the provinces; second, that the government is in a position where it can set forth the general principles of the fiscal arrangements, as I tried to do yesterday, and yet leave the conference in the position three weeks from now where there is genuine consultation and genuine negotiations.
Oral Questions


Some hon. Members:: Oh, oh!


John Napier Turner: In other words, if the government were to take the type of fixed position that the hon. member suggests, it would really be precluding a negotiating role for the government at that conference.


OIL-SUGGESTED CONTINUATION OF EXPORT TAX TECHNIQUE DURING FEBRUARY AND MARCH IN LIEU OF IMPOSING EXPORT CHARGE
Hon. Robert L. Stanfield (Leader of the Opposition):: Mr. Speaker, I have a supplementary question for the minister. Would the government find it satisfactory to have authority to continue the existing kind of export tax for, say, the months of February and March with a view to coming back to parliament following the first ministers' conference and then presenting to parliament its full package and in the meantime, during those two months, having the authority to impose an export tax at an appropriate level as has been done over the past four months?


John Napier Turner: Mr. Speaker, we have considered the approach that the hon. gentleman suggested yesterday. Perhaps a lot of these questions should be threshed out in the committee stage, but I think we would prefer to be in a position-


An hon. Member:: Of course you would.


An hon. Member:: You would like a big stick.


John Napier Turner: -and I think the country should be in a position where it has an instrument flexible enough to deal with an unpredictable international situation and flexible enough also to deal in a meaningful consultative way with the provinces.


Mr. Speaker:: Order, please. The Chair will recognize the hon. Leader of the Opposition for a supplementary, but again I take the liberty of reminding hon. members that we are to be considering this matter later today on second reading and in committee. I would hope that some of these questions could be asked then.


George Harris Hees: Except that you cannot get an answer then.


Robert Lorne Stanfield: Mr. Speaker, I do not know whether this bill will reach the committee stage today, but I should like to ask the Minister of Finance whether the suggestion I made in my previous question would not in fact put the government in a position during the next month or two where it could respond adequately to any change in the international situation?


John Napier Turner: Mr. Speaker, I do not think it gives the country the flexibility it needs to meet both the international and the federal-provincial situation.


Mr. Bell:: We want Macdonald back! He was not that bad!


George Harris Hees: John, you make Thumper look good!

January 4, 1974
Oral Questions


Gerald William Baldwin: We would even be better with Benson!


An hon. Member:: And look what happened to Benson!


INQUIRY WHETHER PROVINCES ARE SEEKING FEDERAL GRANTS IF SALES TAX ON PETROLEUM PRODUCTS ABOLISHED
Mr. Leonel Beaudoin (Richmond):: Mr. Speaker, I should like to ask a question of the right hon. Prime Minister.
Could he tell the House whether in the correspondence exchanged between his department or the government and the provinces preparatory to the federal-provincial conference on energy, the provinces are saying that they are seeking federal grants to compensate for the loss of revenues if the federal government decided to abolish the sales tax on petroleum products?


Pierre Elliott Trudeau: No, Mr. Speaker. In this correspondence, the provinces did not go into those details. Until now, the correspondence has mostly been based on the agendas in very general terms. However, I should point out to the hon. member that I and the Minister of Energy, Mines and Resources have suggested that the provinces should remember that the equalization formula gave them and will continue to give them very considerable funds. We hope that they will indeed consider the possibility of using these funds for reducing taxes on energy and gas.


ROYAL CANADIAN MOUNTED POLICE
Right Hon. J. G. Diefenbaker (Prince Albert):: Mr. Speaker, I preface my question to the Solicitor General by the question I asked yesterday, as found on page 9004 of Hansard:
. . . my question is for the Solicitor General. I should like to ask the minister whether action is now being taken or is contemplated to change the uniforms and insignia of the Royal Canadian Mounted Police?
The answer given by the minister was:
... no action has been taken to change the insignia or uniforms of the Royal Canadian Mounted Police.
Knowing the minister, I know he was completely truthful and did not have any information along those lines concerning the RCMP, of which he is the responsible political head. I therefore ask whether he will table, first, the administrative bulletin issued in the year 1973 by the commissioner of police-I will not go into detail at the moment-and, second, the latest administrative bulletin, No. 54. I do not have the number of the first one. In bulletin No. 54 members of the force are advised that the gold crown on sergeants', sergeant-majors' and staff sergeants' uniforms is no longer available, that the red serge suit-


Mr. Speaker:: Order, please. I wonder if it is necessary for the right hon. gentleman to read the whole document.

Perhaps he might consider that the question has been asked and allow the minister to reply.


John George Diefenbaker: Mr. Speaker, I apologize. I felt that full information might be helpful to the minister. I ask whether he will table these two administrative bulletins. They will be of information to himself as well as to the House and country.


Hon. Warren Allmand (Solicitor General):: Mr. Speaker, I will be pleased to check into those bulletins and table them if it is appropriate to do so. I might say that I did check into this matter after the right hon. gentleman's question yesterday. I spoke with the commissioner's office. He told me that there was no plan to change the insignia or the uniform. But I will check these bulletins and report back to the House.


Some hon. Members:: Hear, hear!


John George Diefenbaker: Mr. Speaker, the ministerial applause indicates that the ignorance has a larger area than that of the minister. I ask him to get in touch with the commissioner. These administrative orders have been sent out. One was sent out several months ago and the other recently. Changes have been made.


William Warren Allmand: Mr. Speaker, I know that there was a change made, not with respect to the style of the uniform or the colour of the uniform but merely with respect to summer wear.


John George Diefenbaker: No, no. This is all year round.


William Warren Allmand: Mr. Speaker, I have already checked with the commissioner's office but I will do it again. I should like to provide the House with the fullest information.


COMBINES
Mr. Allan Lawrence (Northumberland-Durham):: Mr. Speaker, my question is for the Minister of Consumer and Corporate Affairs. Can the minister tell us whether he has yet received the report respecting the investigation into collusion by price fixing in the oil industry in Canada, for which we have been asking for several months?


Hon. Herb Gray (Minister of Consumer and Corporate Affairs):: Mr. Speaker, this inquiry is under way through the combines branch of the department. The result of the inquiry would be either its termination because there was no evidence on which charges could be laid under the act, or action by the Attorney General through charges being laid in the courts. I am not in a position to make an announcement at this time.


Allan Frederick Lawrence: In view of the fact that in the United States an investigation into exactly the same matter and involving exactly the same companies started after the investigation began in Canada and the United States gov-
January 4, 1974

ernment has now started prosecution in the courts against these same companies, can the minister possibly explain to us why there has been delay in regard to this matter in reporting to him and to the government of this country?


Herbert Eser (Herb) Gray: Mr. Speaker, if I am not mistaken, the action by the United States authorities in their courts came after an investigation lasting at least two years. Our investigation began about last February. I know that the director and his staff want to complete their work as expeditiously as possible, but it involves questioning large numbers of people and examining large quantities of documents. I am sure my hon. friend would not want this work to be done in a way which would not enable it to be carried through to a favourable conclusion in the interests of the public.
 * *


TRANSPORT
Mr. John Harney (Scarborough West):: Mr. Speaker, my question is for the Minister of Transport. In view of the fact that studies of the rail corridor through eastern Ontario indicate that rapid transit could be developed on the CNR right of way at a cost far below that for subway or expressway development, and given the fact that present statutes and policies give a very low order of priority to the use of rights of way for urban transportation, is the minister reviewing these policies and statutes with a view to giving due weight to the commuter needs of urban populations?


Hon. Jean Marchand (Minister of Transport):: Yes, we are, Mr. Speaker, with the government of Ontario and in conjunction with the Minister of State for Urban Affairs.


John Paul Harney: In view of the fact the minister's department will soon be getting involved in establishing rail commuter service north of Toronto, will the minister indicate to the House whether his department is moving toward a national urban transport policy with all the planning and consultation that entails or intervening in urban transit problems on an ad hoc basis?


Jean Marchand: I think we are doing both, Mr. Speaker.


Some hon. Members:: Hear, hear!


OIL-REVISION OF ESTIMATED SHORTFALL IN LIGHT OF PRODUCTION BY COME-BY-CHANCE REFINERY
Mr. Gordon Ritchie (Dauphin):: Mr. Speaker, I have a question for the Minister of Energy, Mines and Resources. As the Come-By-Chance refinery is now producing 84,000 barrels a day and large volumes of oil are coming to
Oral Questions
eastern Canada from British Columbia, has the government revised its projected shortfall of 200,000 barrels per day this winter and, if so, can the minister give us the new figure?


Hon. Donald S. Macdonald (Minister of Energy, Mines and Resources):: Mr. Speaker, my information is that the Come-By-Chance refinery is not expected to be in a position to ship before next week. The information I have at the moment is that the basic figures have not been altered, but they obviously will be if Come-By-Chance comes into effect more quickly.


ALLEGED LACK OF ADEQUATE AMBULANCE SERVICES- GOVERNMENT ACTION
Mr. Heward Grafftey (Brome-Missisquoi):: Mr. Speaker, I have an urgent question for the Minister of National Health and Welfare. Is the minister in receipt of a document prepared by provincial officials in the health care delivery field which describes emergency ambulance services in Canada as being in a very bad state? This being the case, does the document recommend uniform national standards for ambulance design and equipment, emergency communications, the training of emergency personnel and that the federal government should accept a provincial ambulance service system as an insured service under the Hospital Insurance and Diagnostic Services Act? If so-


An hon. Member:: Order!


Mr. Speaker:: Order, please. Perhaps the hon. member might allow the minister to reply to the first part of the question and then he can ask a supplementary.


William Heward Grafftey: Mr. Speaker, I have not-


Some hon. Members:: Oh, oh!


An hon. Member:: Sit down.


William Heward Grafftey: Mr. Speaker, I am not blowing this up. I simply wish to say that many members in this House have constituents who wait over an hour for ambulance services. Questions like this deserve a little bit of attention and respect. This being the case, can we expect immediate action on the part of the federal authorities?


An hon. Member:: Sit down.


William Heward Grafftey: What's the use, Mr. Speaker?


Mr. Speaker:: Order, please. The hon. member has asked a question. Perhaps the minister might be allowed to reply. The hon. member will have the right to ask a supplementary.


William Heward Grafftey: I appeal to you, Mr. Speaker. The conventional wisdom is that people get to me when I blow my top on things like this. I think it is very poor manners when people are interrupted while asking questions such as this one. I ask Your Honour to protect our rights in this

January 4, 1974
Oral Questions
regard. I now put the question to the minister. Can we expect reasonable action from the federal government within a very short time?


Hon. Marc Lalonde (Minister of National Health and Welfare):: Mr. Speaker, I have not received any document such as mentioned in the hon. member's question. A federal-provincial ad hoc committee of members of the professions concerned studied this situation and reported to the conference of deputy ministers of health. This report has not yet reached the ministerial level, but it will be presented for consideration at the conference of health ministers to be held in mid-February.


FEED GRAIN-MEASURES TO COPE WITH SHORTAGE IN QUEBEC
Mr. Adrien Lambert (Bellechasse):: Mr. Speaker, since the Minister of Agriculture is not present I direct my question to the right hon. Prime Minister.
In view of the great difficulties facing Quebec millers concerning supplies of feed grains and particularly oatmeals, a situation that may well cause a major reduction in food production and thus bring about considerable price increases, can the Prime Minister say what short term action the government intends to take to solve what seems to be a very serious problem?


Pierre Elliott Trudeau: Mr. Speaker, the Minister of Agriculture is already dealing with the problem. Even now, he is visiting one of the provinces concerned to discuss government matters. I shall be pleased to convey the question of the hon. member to the minister to find out whether or not he can make a statement on the matter.


Léonel Beaudoin: Mr. Speaker, I should like to put a supplementary to the Minister of Transport.
As it is now very difficult if not impossible for farmers to buy a carload of western grain because of the lack of railroad transportation, does the minister or the department intend to take steps to improve the situation?


Jean Marchand: Mr. Speaker, in the last month or so the shortage of cars has been brought up repeatedly in the House. The railway companies and the Department of Transport are jointly making efforts to remedy the situation.


Léonel Beaudoin: Mr. Speaker, I have a supplementary.


Mr. Speaker:: I shall allow the hon. member to put his supplementary but I remind hon. members that there are only a few minutes left in the question period. I hope there will be as few supplementaries as possible so that a greater number of hon. members can put questions. The hon. member for Richmond.


Léonel Beaudoin: Mr. Speaker, according to the minister's answer, there is obviously a shortage of cars at this time. Could he tell us whether the Department of Finance or

his own department will suggest to the government to give assistance to the trucking industry in order that these producers may secure grain?


Jean Marchand: Mr. Speaker, this is an entirely new matter. It involves the whole issue of grants and I cannot merely answer yes or no. As for the cars themselves, new ones are being manufactured and we expect to meet our responsibilities in the moving of grain.


MANPOWER
Mr. Robert Muir (Cape Breton-The Sydneys):: Mr. Speaker, my question is for the Minister of Manpower and Immigration. In light of the fact that LIP project 3B-1314 dealing with native off-reserve housing has been granted on a constituency basis in Nova Scotia when according to all the band chiefs in the province it seems unworkable and impractical on this basis, will the minister have another look at this project to ascertain if the funds can be directed to the Union of Nova Scotia Indians for administration, as requested by the band chiefs?


Hon. Robert K. Andras (Minister oi Manpower and Immigration):: Mr. Speaker, I will look into this and advise the hon. member what might or might not be done.


POSSIBILITY OF ADJUSTING WHEAT PRICES TO ARAB STATES OR CURBING ALLOCATIONS IN LIGHT OF THEIR OIL POLICY
Mr. Otto lelinek (High Park-Humber Valley):: Mr. Speaker, my question is directed to the Prime Minister. In view of the recent $90 million wheat sale to Algeria, which is in addition to an earlier sale of $75 million, will the Prime Minister advise the House if the government is contemplating adjusting wheat prices or curbing wheat allocations or, indeed, attempting to negotiate with the Arab states in light of the Arab states oil policy toward Canada and the free world?


Pierre Elliott Trudeau: Mr. Speaker, I will be pleased to take note of the question on behalf of the minister responsible for the Canadian Wheat Board.


COMMUNICATIONS
Mr.   Chas. L. Caccia@Davenport: Mr. Speaker, this question is addressed to the Minister of Communications.
January 4, 1974

In view of the impending removal of WNED-TV, a commercial free Buffalo public station broadcasted in Toronto on channel 17, what is the policy of the government with regard to cable companies in Toronto that have applied for augmented channel capacity?
[ Translation]


Hon. GArard Pelletier (Minister of Communications):: Mr. Speaker, I am afraid the question has been prompted by, I must say, totally incorrect press releases from a certain Toronto daily.
So far most households, that is 280,000 households out of 336,000, have had access to channel 17 and they will retain access to it. The problem lies with a very large cable company that has not yet submitted the technical briefs without which it cannot obtain the necessary licences. But all cable companies have known for three years about the coming change and therefore had ample time to make representations to the department and the CRTC.


AIRPORTS
[Stage Direction]
Hon. ]. A. MacLsan (Malpsqus): Mr. Speaker, I should like to address a brief question to the Minister of Transport. Will he personally look into the situation at the Charlottetown Airport which has been closed for the last two days, preventing hundreds of people from leaving Prince Edward Island by air, with a view to ensuring that either the efficiency of the maintenance operations is increased or that the facilities required to keep the main runway serviceable are provided?
Jean Marchand: This is a very important question. There is no doubt we are doing all we can to restore the service while at the same time maintaining the necessary security.


AIR TRANSPORT
Mr. Les Benjamin (Regina-Lake Centre):: Mr. Speaker, may I direct a question to the Minister of Transport. In view of the statement made yesterday by the President of the Canadian Air Transport Association that it would cost 50 cents per passenger to cover the expense of collecting the proposed airport head tax, may I ask the minister what estimate he and his department have made as to the cost of collecting this head tax?
Oral Questions


Jean Marchand: The tax
amounts to $2.80 a head. I think you would have to multiply that figure by the number of passengers carried.


Some hon. Members:: Oh, oh!


Leslie Gordon Benjamin: Perhaps I ought to put my question again. I think the minister did not understand what I asked him. If the President of the Air Transport Association is correct, or nearly correct, when he says it would cost 50 cents per person to collect $2.80 in tax, this would represent about 20 per cent of the tax itself. In these circumstances, would the government consider withdrawing this inefficient manner of raising desired revenues and use some other method, specifically that of raising the user charges imposed on airlines?


Mr. Marchand (Langeller):: The hon. member will excuse me; I did not understand the first question very well. We do know the cost of collection. I can check the figures and make them known to the hon. member, but I do not have them in my head right now. It is not our intention to suppress this tax. We hope we shall find ways and means to apply it very soon. We believe this tax should be paid by users of airports.


Mr. Hsllysr:: Raise the taxes and suppress the people. [Translation]


PROPOSED PASSENGER HEAD TAX-SUGGESTED PERCENTAGE CHARGE ON SHORT FLIGHTS
Mr. Donald W. Munro (Esquimalt-Saanich):: Mr. Speaker, I should also like to put a supplementary question to the Minister of Transport as a result of the one I asked yesterday.
Can he explain why it would be so difficult to adjust the simultaneous levy of a fixed charge and a percentage charge? I feel that it is a matter of elementary mathematics, because the charge-


Mr. Speaker:: Order. The hon. member has asked a question. He cannot, however, submit an argument in support of his question. He could now allow the minister to answer his question.


Jean Marchand: Mr. Speaker, it is not merely a matter of elementary mathematics. We have to choose between a percentage charge levied on the amount of the ticket, that is the longer the journey, the higher the charge or a fixed amount which means that the price of long flight tickets would not considerably increase. Now what position should be taken if the hon. member finds it is merely a matter of mathematics? I would like him to send me some explanations which could perhaps be useful to me.

January 4, 1974
Oral Questions


POST OFFICE
Hon. W. G. Dlnsdale (Brandon-Souris):: Mr. Speaker, my question is for the Postmaster General. Now that the Letter Carriers' Union has publicly declared its support, through its president, Roger Decarie, for the return of six day a week mail delivery, when will the hon. gentleman be announcing the restoration of this service?


Hon. Andre Ouellet (Postmaster General):: Mr. Speaker, I have often stated that this matter was being considered and that, so far, there is not enough evidence to justify the reinstatement of such a six-day service in our urban centres. The hon. member knows very well, I am sure, that such a service does exist in many parts of Canada, but not in the large cities, because it has indeed been proven to be unnecessary.


Walter Gilbert Dinsdale: In view of the confusion during the recent holiday period because of the lack of a six-day service and the statement by Mr. Decarie that he wants this service restored so that the Post Office may get back into the business of postal service, would the hon. gentleman not reconsider this matter in order that the morale of the employees of the Post Office Department can be improved by restoration of pride in service?


André Ouellet: Mr. Speaker, I think that the only confusion existing is in the hon. member's mind. He is perfectly aware that there is no six-day service in large cities since 80 per cent of the largest mail users are large companies which in any case are closed on Saturdays.


INQUIRY AS TO SPECIAL ALLOCATION OF BUNKER FUEL FOR MOVEMENT OF BRITISH COLUMBIA FOREST PRODUCTS
Mr. Frank Hamilton (Swift Current-Maple Creek):: Mr. Speaker, I have a question for the Minister of Energy, Mines and Resources. Has the National Energy Board made a special allocation of bunker fuel to look after the forest products industry at Canada's Pacific seaboard?


Donald Stovel Macdonald: If the hon. gentleman is talking about export, I would have to inquire. If he is talking about use within Canada, the board does not make allocations for use within Canada.


SUGGESTED USE OF COMMERCIAL AIRCRAFT BY PRIME MINISTER
George Harris Hees: I have a question for the Prime Minister, Mr. Speaker. As Presi-

dent Nixon has recently demonstrated that heads of state can travel by commercial aircraft without any loss of security, is it the intention of the right hon. gentleman in the near future, and while the energy situation remains uncertain, to use this means of transportation with a view to setting an example in energy conservation?


Pierre Elliott Trudeau: Yes, Mr. Speaker. I am not sure in what direction the example would flow, because I have travelled commercially many times. The essence of the operation, however, is to do it at a time when a flight is not scheduled and not known in advance. Otherwise, as I explained the other day, it might cause considerable inconvenience to the travelling public. However, as everyone knows, the press is always anxious to know when I am travelling and the news generally gets out in advance.


George Harris Hees: Since the press is not more interested in knowing when the Prime Minister is travelling than it is in knowing when the President of the United States is travelling, will he advise the House whether he is planning to make a trip by commercial aircraft within the next three or four weeks?


SHIPPING
Mr. Thomas S. Barnett (Comox-Alberni):: Mr. Speaker, I have a question for the Minister of Transport related to questions which were asked yesterday about tankers carrying crude oil from Canada's west coast to Canada's east coast. When does the minister intend to fulfil the commitment he made to the Standing Committee on External Affairs on December 3 in response to questions I asked about laying on the table of the House the complete specifications in respect of each and every ship leaving Canada's west coast carrying crude oil to Canada's east coast?


Jean Marchand: Mr. Speaker, if my memory serves me well, I think this list was tabled in the committee itself so the hon. gentleman has access to all the names and specifications of the ships.


Thomas Speakman Barnett: In view of the fact the committee met on December 3 and it is my understanding there have been cargoes continuing to depart from the Pacific coast bound for eastern Canada, will the minister table in the House the specifications in respect of every cargo ship which has left subsequent to that date, particularly in view of the fact the committee is not in continuous session?


Jean Marchand: With pleasure, Mr. Speaker.
January 4, 1974


FUNDY TIDES-AVAILABILITY OF REPORT OF REVIEW COMMITTEE IN TIME FOR FIRST MINISTERS' CONFERENCE
Mr. Robert C. Coates (Cumberland-Colchester North):: Mr. Speaker, I have a question for the Minister of Energy, Mines and Resources. The minister informed me in December that the review committee report on the 1969 Fundy tidal power report would probably be ready some time in January. Can he now indicate whether this report will be available in time for the first ministers' conference in order that all ministers, including the Prime Minister, will have an opportunity to examine the possibilities and potential of energy from the tides?


Donald Stovel Macdonald: Mr. Speaker, I will make an inquiry on that point.


AIR CANADA
Mr. Duncan M. Beattie (Hamilton Mountain):: Mr. Speaker, my question is for the Minister of Transport. On June 21, 1973, a DC-8 exploded at Toronto International Airport and the minister stated an immediate inquiry would be held and the results would be tabled in the House. Will the minister tell us now the reason for the delay in tabling this report?


Jean Marchand: Mr. Speaker, it is for the simple reason that I have not yet received the final report. They are still trying to find out the cause of the explosion.


TRANSPORT
Mr. J. R. Ellis (Hastings):: Mr. Speaker, my question is also directed to the Minister of Transport. Yesterday the minister indicated he had not read the report of the Canadian Transport Commission. In view of the fact there have been two further derailments in the eastern provinces, I wonder whether the minister would be prepared to direct the report to the attention of the Standing Committee on Transport and Communications?


Jean Marchand: There is no objection to that, Mr. Speaker. We have the report. It has been forwarded to the railway companies and the department. I think there is a series of good recommendations in it, but we should not wait until the committee sits in order to correct what has to be corrected.
Oral Questions


Mr. Speaker:: The Chair will recognize one or two supplementary questions at this point and then call orders of the day.


SAFETY OF RAILWAY OPERATIONS-ACTION TO OVERCOME DEFICIENCIES IN ORDER TO ENSURE MAXIMUM PERFORMANCE
Mr. Don Mazankowski (Vegreville):: Mr. Speaker, I have a supplementary question to the one posed by the hon. member for Hastings. Having regard to the recommendations made by the Railway Transport Committee, which included, among others, a reduction in carloadings to 70 tons or 80 tons and a reduction in speed, the effect of which will reduce the capacity and efficiency of the railways' operations in Canada, which in turn will add to the backlog in the movement of commodities and goods, is the government considering any immediate action jointly with the railways to overcome these deficiencies and upgrade standards in order that the maximum performance can be obtained by the railways?


Jean Marchand: Mr. Speaker, I think the hon. gentleman has raised one of the most important questions relating to this report, because in the manner it has been made it means capacity will be decreased which will have an impact on the movement of goods. These are the things we are going to study and we will let the House know what our decision is.


SUGGESTED INDEPENDENT COMMISSION TO INVESTIGATE ALL TRANSPORTATION ACCIDENTS
Mr. J. M. Forrestall (Dartmouth-Halifax East):: Mr. Speaker, I wonder if I might ask the Minister of Transport whether in fact he does not now believe that investigations of air, rail and other transportation accidents might be much more expeditiously handled were we to have in Canada an independent commission for accident investigation?


Jean Marchand: Mr. Speaker, I think that is surely an idea that should be looked into very seriously.


Mr. Speaker:: Orders of the day.


ROYAL CANADIAN MOUNTED POLICE
William Warren Allmand: Mr. Speaker, I rise on a point of order. Since the beginning of the question period my office has been in touch with the RCMP and I have an additional answer to the question posed by the hon. member for Prince Albert. I have been told there have been absolutely no changes in the insignia or crest, as of the beginning of the question period.


Some hon. Members:: Oh, oh!


William Warren Allmand: I have also been told that administrative bulletin No. 54, referred to by the right hon. member,

January 4, 1974
Beef Surtax
deals with postal codes and makes no mention of dress. Administrative bulletin No. 78 dealt with summer dress, to which I referred in the House.


John Napier Turner: Mr. Speaker, on a point of order, I apologize to the House for arriving late after the time for motions had passed.


Thomas Miller Bell: We know you have problems; it's all right.


John Napier Turner: I wonder whether, with unanimous consent of the House, I could revert to motions to make an announcement on the beef surtax.


Mr. Speaker:: Is it agreed?


Some hon. Members:: Agreed.



ROUTINE PROCEEDINGS


John Napier Turner: Mr. Speaker, I wish to announce arrangements for terminating the surtax on beef and cattle by February 10. The tax will be phased out in three equal instalments starting January 14.
The surtax was imposed November 3 under Section 8 of the Customs Tariff because unusually large imports of cattle and beef were threatening the stability of the market and endangering the future production of beef cattle in Canada.
The temporary surtax was three cents per pound on imports of live cattle and six cents per pound on beef. Effective midnight January 13 the surtax on live cattle will be reduced to two cents per pound and the surtax on imports of beef to four cents per pound. A further reduction, to take place at midnight January 27, will reduce the surtax to one cent per pound on live cattle and to two cents per pound on beef. The surtax will no longer apply as of midnight February 10.
In announcing the imposition of the surtax on November 3,1 said the tax was intended to deal with a temporary situation resulting from the marketing of large numbers of American cattle which had been held back from the market during the U.S. price freeze that ended early in September. The government at that time undertook to review the need for the surtax within 30 days. On November 30 the government said it had been decided to continue the surtax, subject to continuing review.


Mr. H. W. Danforth (Kent-Essex):: Mr. Speaker, I should first like to thank the minister for his usual courtesy in furnishing the opposition with a copy of his statement before the House met. I should also like to commend the minister on behalf of the opposition for the imposition of the surcharge at the request of the beef industry. We were worried about the fact that there appeared to be some

delay, but we do appreciate the magnitude of the problems involved in the imposition of the tax.
In dealing with the minister's announcement this morning I can only reflect the concern of the beef industry of Canada over the actions of the government. It will be recalled that within a period of just seven months the government completely removed the tax on live and dressed beef coming into this country, restored the tax, by the surcharge doubled the tax and now, Mr. Speaker, by this action it is phasing out the surtax and restoring the position that prevailed before this action began in the first place. I think you can appreciate the concern and the chaos this has caused the beef industry in Canada.
We appreciate very much that the minister did accept the advice of the cattle industry and, knowing full well that this surtax could only be on a temporary basis, we appreciate the fact that the government has decided to eliminate it by phases rather than by abrupt termination.
There are two concerns of the cattle industry I should like to bring to the attention of the government. The first relates to the fact that the minister has in effect telegraphed when the reductions will take place. What this proposal does in effect is, to allow the purchasers of the beef products in Canada to hold off their buying until the elapsing of these various dates, thus enabling them to make an additional profit of up to $1 per hundred on domestic beef products and $2 a hundred on imports.
The other concern of the cattlemen, which is of a most serious nature, involves their hope the government is not completely committed to the reductions on January 27 and February 10, because although the cattle market appears to be in a stable condition now that stability is precarious and could be upset very easily. It is hoped that the government will keep the matter under very serious review, so that if stability does not continue the actions planned for January 27 and February 10 could be rescinded or altered until another look is taken at the situation.
We hope this proposal will create stability in the beef market because it is of the utmost importance to the consumers of this country. There must be a continuity in respect of high quality beef at a reasonable price. The fact still remains that, under present conditions of high input costs, in many instances the profit margin is minimal or non-existent. For that reason we must make sure that this industry remains on a stable footing in order that in the months ahead Canadians can have an ample supply of this very important food.


Mr. A. P. Gleave (Saskatoon-Biggar):: Mr. Speaker, in general I welcome the fact that the government will again be attempting to follow the policy we have followed for a number of years in relation to the United States and Canadian markets in order to attain a balanced market for beef and other meat products. In this way the consumer will get the benefit of the large production which is possible on this continent. I would hope this practice would be encouraged. I think the brinkmanship policy practised in the past few months by the implementation of embargoes and the changing of tariffs, to which the previous speaker referred, was a bad policy. To shift back
January 4, 1974

to the practical working policy we had before is a good move. We do not know what the effect will be of phasing out the surtax over this length of time in terms of prices and advantages to packers or producers. Certainly, it does give some advantage to some of the processors.
I point out to the government that it has made no move yet toward a real support policy for hogs and beef. This is essential and would be more effective than trying to manipulate the tariff. The Minister of Finance (Mr. Turner) in a speech in Ontario recently, announced there would be a stabilization policy. I thought for a while he had put on the hat of the Minister of Agriculture because he said we should have support prices for hogs, cattle and so on, but he does not mention that in this statement. If we are to have adequate supplies of beef and increasing production, which should be our objective as a nation, then some moves will have to be made in that direction. Until now it has been left to provinces such as Saskatchewan to guarantee a floor price for hogs, for example, and this may be an area which is being overlooked.
The other point I should like to make concerns the relationship of feed supply to beef and hog production. During the question period today, the hon. member for Bellechasse (Mr. Lambert), for instance, pointed out the lack of feed supplies in Eastern Canada and the instability of the market. This is one area in which the government is falling down badly. The lack of policies on the pricing and transportation of feed grains is a serious matter. The interests of neither the seller nor the buyer are being served. The facts can be documented to prove what I say. I trust the government will take note of these important areas as well as juggling tariffs.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed, from Thursday, January 3, consideration of the motion of Mr. Turner (Ottawa-Carleton) that Bill C-245, to impose a charge on the export of crude oil from Canada, to impose an oil export tax under the Excise Tax Act and to allocate certain of the revenues derived from the oil export tax, be read a second time and referred to the Committee of the Whole.
Mr. Fred McCain (Carleton-Charlotte):: Mr. Speaker, it is just a year ago today that this session began. It is just a year ago today that a great many members of this House had the privilege of assuming a seat in Canada's House of Commons for the first time. It is a privilege for which I am sure each member is grateful to his constituency. It is to be hoped that each has served his constituency well. It is regrettable, however, that during that year we have had the misfortune to observe a government in operation which has exploited its opportunities for evasion.
Oil Export Tax
The government has exploited the rules of the House and has used this method to continue the secrecy surrounding of its behaviour. It has continued to keep the people of Canada in ignorance wherever possible. It has used the committee system of this House as a means for introducing ministerial statements, statements of policy and long drawn out statements by representatives of the departments. I think this has been done intentionally in order to make it utterly impossible for a committee of this House to function effectively and obtain the information necessary for an intelligent decision to be made in respect of the committee's report. There has been a deplorable neglect by the government of recognition of the democratic privileges on which the work of this House has so long been based. I am deeply disappointed when I hear such answers as we received this morning from the Prime Minister (Mr. Trudeau) when he said he would refer the matter to the minister concerned and gave no assurance that an answer would be forthcoming.
I was again deeply concerned to hear the typical reply of the Minister of Transport (Mr. Marchand) this morning when he suggested to this House that a matter was not anybody's business except his own, that he would let us know what he wanted us to know and no more, and that he would conduct himself in the way he felt was best for Canada, regardless of what anyone else thought. There has been a direct challenge to the democratic system. This has been a shortsighted systematic operation. There has not been any long-range policy. The government has operated on a short-term basis in respect of a problem which is publicly known because it has been written up in the newspapers. It has not been guided by a policy involving long-range foresight and long-range planning. The government has not taken the action necessary to ensure that the nation will have the social and economic policy which Canada deserves. This is a tired, drained out, incompetent cabinet which has led this country nowhere.
I submit to you, Sir, that this government does not have the respect the government should have and does not have the support of the voters of Canada. It has been demonstrated beyond any doubt that Canada needs a fresh and creative group, with imagination and capability for planning, which is not present in the structure of the government today. It is time that we had forthright, courageous leadership which will not be influenced by a Prime Minister who accepts only the advice of those on his political left who espouse ideas which seem to please him much more than the realities of Canada's economy. The indications are that there is a tryst or perhaps even a conspiracy between the Prime Minister and those who are practising socialists in the House, to take Canada along a collision course with the economic reality at a time when others who have learned lessons about the necessity for the exploitation of the best brains in their country have been going in the opposite direction.
At a time when the economic climate for the development of the resources has improved in other nations, we have been discussing in the House the fearsome subject of profits as if that were a dirty word. We have been discussing it in a way which has accused the industry and the private citizen who was seeking to make a living of being

January 4, 1974
Oil Export Tax
capitalist oriented and not interested in the development of their own country. This is a charge without foundation in fact. It is indeed detrimental to the best interests of our country at a very serious time.
The legislation which has been introduced in respect of the energy requirements of Canada is typical. We have brought in a patchwork regulatory type of legislation which has provided no incentive for anyone to go out to work. It has provided no means whereby the resources of knowledge, technical skill and private and public capability could be encouraged to go forward and seek the solution which must be found if Canada is to remain economically viable.
The only suggestions that have been made by this government in the last year in respect of the economic ills which we have suffered is that the taxpayer will have to help bear the burden, and the government will be given a further opportunity to interfere with the rights and privileges of citizens and other governments in such a fashion that their authority and privileges are restricted. They have exhibited no understanding of the value of national or international goodwill, but rather have been obsessed with the idea of the divine right to rule which is so typical of the present Prime Minister and the cabinet which has continued to advise and support him on this course. There has been a continuing concentration of power in the hands of the central government to the detriment of the provinces, and I abhor this. There has been a total lack of understanding of Canada as it should be.
This is reason enough in itself for the public to reject this government. This government has assumed the position that it is responsible to nobody, and as it has taken on new authority through its authoritative legislation, it has mocked the people of Canada, the democratic structure, and the members of this House in a merciless fashion.
The provinces have little left to deal with when they meet the federal government at the first ministers conference. Yet, the government of Canada has in its hands all the strength it needs to say to the provinces: If you do not like this, this is what we will do anyway. It is not an opportunity for real and proper negotiations. The government of Canada thinks it is now able to confront the provinces and it does not have to have, in the words of the Minister of Finance (Mr. Turner), real and proper negotiations any longer.
I think that one of the typical examples of the unpardonable, incredible and long-term bungling that this government has practised in its last year is the haggling over the method of the development of the tar sands. If Canada were ever in a position where initiative and action were required, it is certainly in the development of the tar sands for the provision of additional fuel for this country. If by any chance all the accusations which the government has made in respect of profits were true, I submit to you, Mr. Speaker, and to this nation, that the government has the instrument in its own hands whereby it can correct any improper profit, and that instrument is taxation.
It is high time that the government took a look at the capabilities of this country in all respects. It should not get itself and the citizens of this country into an improper, uncomfortable and unnecessary position by bringing in

short-term, prejudicial legislation based upon the absolute need of power and the support of the socialists in this House. The governing party today is not interested in Canada. Rather, it is interested in power alone and it has demonstrated this to the public on innumerable occasions, thus creating the basis for its own defeat.


Mr. Max Saltsman (Waterloo-Cambridge):: Mr. Speaker, I think it is important that the particular bill before us be passed in its entirety before the federal-provincial conference. The provinces have been setting out their positions, particularly the oil producing provinces, and they have a very strong position. We have been reminded on many occasions that in fact the resources are the property of the province, although the movement of those resources is another matter. But the fact that the ownership of those resources under the British North America Act is a provincial right means that the provinces enter the negotiations from a very strong position.
I realize that this debate is creating difficulties for all the members of parliament because all of us here, while the federal interest is uppermost in our minds, cannot help but be somewhat influenced by the provinces from which we come. When there is a federal-provincial confrontation, obviously members, with the best of intentions of fulfilling their duties, find themselves in an awkward position. I have not been adverse to criticizing the members from Alberta in the Conservative party for their position regarding the oil resources.


Mr. Horner (Crowfoot):: Try Saskatchewan.


Max Saltsman: I want to say that I will not be any less critical of my own colleagues from the province of Saskatchewan if they take a similar position.


Gerald William Baldwin: How about British Columbia?


Mr. Stackhouse:: Give us a sample.


Max Saltsman: I want to say this, Mr. Speaker. If at any time Quebec had ever behaved in the way that some of our western provinces are behaving, there would have been such an uproar in this House and across the nation as would have been difficult to put down. In the worst of times, Quebec has always been the bad boy in confederation, and it has been at Quebec that the finger has always been pointed. But in my recollection, Quebec has never taken the kind of adamant position against the federal government that is now being taken by the western provinces. Their claims for special recognition and certain rights have always been tempered to some extend, and I must say they have always been far more tempered than the voices of the western provinces. For years it has been the west that has had grievances against Quebec. What does Quebec want? Why is Quebec always making difficulties? Now, we have to ask members from the west the same kind of question.
It may be that some of my friends and colleagues in the House will say that I am not really advocating a federalist position, that after all I am from Ontario and that the remarks I have made about those from Alberta and Saskatchewan probably apply equally well to myself or that I am setting out what might be an Ontario position. It may
January 4, 1974

be so. None of us know for certain to what extent we represent the mood of our province and that of the nation. But I do honestly feel that I am trying to put forward what I think is a federalist position. The west has had its grievances against Ontario. On many occasions when I have spoken in this House I have enumerated them. I think those grievances should be recognized, and some sort of political settlement reached on them. But I also want to say that those grievances have been exaggerated beyond proportion. Too often overlooked is the fact that Ontario has accommodated itself to the needs of confederation, to the need to share the wealth of our society as much as it can.
For a long time when wheat was a glut on the international market Ontario was prepared to buy wheat under a two-price system, under that strange situation in which one of the greatest wheat producing nations of the world was paying more for its own wheat than foreign countries to which it was selling wheat. I know that people in the west have remarkable abilities, but one of their faculties which seems to be under developed is that of memory. We did, in fact, have a two-price system, and we were prepared to pay more for wheat in Canada than we received for it on foreign markets.
Now, when we hear talk about transportation it is as though we never had an accommodation on freight rates, as if there were no subsidization of freight rates, even though there has been massive and intensive subsidization of transportation both in eastern and western Canada. Indeed, the thing has become so mixed up now that no one really knows what true transportation rates are, because one kind of subsidization or correction has been put on top of another, obscuring the real rates.
For a long time now we have had a system of equalization grants by which we try to match the increases and benefits received by one province through federal grants to the poorer provinces. In fact, there has been a very substantial matching of grants, and I will return to this a little further on in my speech. In some cases it has amounted to about one-third of the increase in revenues to a province, which means that as the incomes of the "have" provinces rose this put a burden on the federal government which had to make an equalization payment amounting to one-third of the increases gained by the "have" provinces.
We in Ontario have also played our role in oil, which is the principal subject under discussion today. Again there is a very convenient lapse of memory with respect to the fact that the country west of the Ottawa valley line, the Borden line, for years has been paying substantially higher prices for oil than it might have paid had it got its oil on the world market at the lowest possible price. For 11 or 12 years Ontario and the rest of western Canada, including the consumers in Manitoba, Saskatchewan, Alberta and British Columbia, said it was right that they should be prepared to pay higher prices for oil in order to stimulate exploration and development in the west. Even in retrospect, Mr. Speaker, that was a good policy. Not only was it proper for Ontario and the other provinces to do that, but now we are thankful that that kind of subsidization took place because now we have the stimulation of
Oil Export Tax
the gas and oil industry in the west that might not have taken place had there not been a protected market for that oil and gas.
I am not saying this to register a complaint, but merely to put on the record the fact that in many instances a group of provinces, or in some cases one province, has been willing to pay higher prices in order to help out other provinces. This whole confederation of ours is based on trying to diminish to some extent human selfishness, whether it occurs at the personal level, at the provincial level, or at the national level. Here I am talking in a way that goes beyond my responsibilities as a member of parliament. All my life I have been a Democratic socialist. I am a democratic socialist today. As a socialist, it is my view that there should be sharing, whether that sharing is between individuals, or between provinces, or between countries. That sharing must exist. For me to stand up in a political forum and to argue that any one individual, any one province, or for that matter any one country in the world has an absolute right to do with his or its resources and wealth as he or it pleases, to the detriment of everyone else, would be wrong for me as a democratic socialist, just as it would be wrong for me in the Canadian context to argue this as a member of this House.
It does not make much difference, I presume, to the people who are suffering, to the people who have to pay higher prices, to the people who have to adapt themselves to differences and changes, if the people who are extracting those higher prices are the ordinary citizens of a province or, let us say, the ordinary citizens of Saudi Arabia. Perhaps it makes a difference in that the higher price goes to the people of a country rather than to a multinational corporation, but in the final analysis it does not make all that much difference, because the higher price is being extracted from the consumer. As I say, people in Canada who have to pay higher prices to heat their homes, and who have to reduce their standards of living in order to heat their homes, are not going to worry whether the higher prices go to multinational corporations or to the provincial treasuries of Saskatchewan and Alberta. In either case the higher prices will hurt, although maybe not as much in the latter case. This is really the point at issue here. After so many years of being milked by foreign-owned multinational corporations, and having finally decided to take a stand against them and not let all the windfall profits got to those corporations, are we in this parliament now going to say that it is all right for somebody else to come along and become the exploiter of all the rest of us?
That is certainly not the kind of position I am prepared to take. In a federal system, and speaking as a democratic socialist, I say that the struggle must be one to diminish human selfishness, and to increase co-operation through increased sharing and increased equality of position. In order to do that it is necessary to make sure that those who possess power in some way restrain that power, and do not extract everything they might wish to extract from an opportunist situation. That is the position I must take, and I hope it is the position taken by my party.
Up until this point, I have tended to agree very much with the position outlined by the Minister of Finance (Mr. Turner) when he spoke in the House yesterday. I am sorry

January 4, 1974
Oil Export Tax
that he has had to leave the House for a moment because now I have something critical to say of the minister and of his government. We could have saved ourselves a great deal of our present trouble had the government taken the advice of the NDP a number of years ago. And it was not the advice only of the NDP. I am sure it was also the advice of the hon. member for Don Valley (Mr. Gilles), who at that time was a very distinguished and renowned Canadian academic.
The advice given was that we accept some of the arguments on resource development put forward by the Carter Royal Commission on Taxation. But instead the federal government rejected that advice. I must admit that most of the pressure for rejection came from the multinational corporations, aided and abetted by the province of Alberta, when they insisted that higher taxes should not be imposed upon resource industries, and upon the oil industry in particular. I think it would be worthwhile to recall that Carter advocated that the resource industries should be taxed roughly on the same basis as any other industry. There was no reason for them to be let off the hook. In fact, had that been done there would be no need for this export tax because the extra profits that would have accrued to those companies would have been paid, at least 50 per cent, to the federal treasury.
When we talk about profits, the federal share would have been $21 billion because the extra profits are in the area of $5 billion without export tax. We could have saved ourselves this confrontation with the provinces if we had done the decent thing, but instead we let the resource industries off the hook. We distorted and continued that mish-mash of a tax system we had at that point and now we are suffering for it. Instead of being on the way to resolving our problems, we now have the political confrontation between the federal and provincial governments which may have to be resolved on the basis of the Carter suggestions.
I think the argument advanced by Premier Blakeney of Saskatchewan is an excellent one when he says that the federal government, in the legislation under discussion today, is proposing to deal primarily with the oil industry. Now, when you deal with the oil industry primarily, you are affecting two provinces in particular, Saskatchewan and, more heavily, Alberta. If we are to have a resource policy in this country I think, as Premier Blakeney has said, that it is not fair to deal with one resource only. After all, Ontario gets a lot of its resource income-not as much as it should-from nickel, copper and zinc. British Columbia gets a lot of its resource income from wood and the associated lumber industry. It is not just the price of oil that is rising but all other commodities as well. Why single out oil? If we do not single it out and impose this export tax, these phenomenal windfall gains are going to accrue to very particular groups of people. If the policy of the federal government is to make any sense, we should tackle all resources and not say to one province that it is its resources alone that are to be dealt with. In this sense there is a real grievance against the federal government which would not exist had we accepted the proposals of the Carter commission which proposed to deal with all

resource industries. We did not accept them, however, and now we have a problem.
Prices are always a difficult problem. I know that there are people who are looking for simple solutions and there are various directions in which we can move, but I should like to state some of my personal views. Let us look at the question of subsidization. At the moment there is the idea that the domestic price should be frozen and quite frankly, Mr. Speaker, had the government not moved to maintain the freeze I think we would be facing an election today. I think it is important at this stage, when we are groping for an energy policy and groping for a resource policy, that there should be some interim measures. I see the bill before us as an interim measure, not as a permanent measure. We have to some extent protected the domestic price, and I believe there would have been chaos had we not; at the same time, we have assured that the proper rents are being extracted from our exports.
On the question of subsidization, Mr. Speaker, I do not think we can continue our present policy indefinitely, nor do I think we should dismiss the possibility of a two price system for lumber, oil and gas as an alternative. That is one of the choices we can make, although there may be some difficulty about it. We will, of course, have to accept the idea that prices must reach certain competitive levels. There is some argument for maintaining prices through an allocation system, and for seeing that the savings go to the less advantaged people in our society. For example, when we control the price of gasoline, who are the chief beneficiaries? Admittedly some poor people are helped but the chief beneficiary is the man who drives the Cadillac. The savings in food prices should be passed along as well. On the surface it is very appealing to say that we should control the price of milk but we find that it is not so much the poor people who consume milk; indeed, the bulk of it is consumed by people who are not poor. And so it goes down the line, Mr. Speaker.
It seems to me that if windfall gains and special profits accrue to special groups of people, then those profits should be taxed away and the benefits of those price increases should accrue to all the people of Canada. If we were able to do that in the case of oil, we should do it with everything. Let us assume that a 50 per cent tax rate on the $5 million would give us $2i billion; just imagine what the federal government could do with that. It could reduce taxation or if it did not choose to do that, there are lots of social problems that cry out for intervention. It is not the taxes which are our chief problem; there are the poor in our society who need to be assisted. We could calculate what the average increase in the cost of fuel is for the ordinary person and if it is $100, he could be given a $100 tax credit or could be given a tax credit for food. If he was not in a taxable income bracket, he could be given a demigrant. The procedure would be close to the heart of my colleague, the hon. member for Winnipeg North Centre (Mr. Knowles).
In a selective way, we could determine the priorities of our society instead of letting the haphazard incidence of prices in the marketplace determine who gets the windfall and who does not. There are many things that we could do, but we need a proper tax system and we do not have it. My colleagues and I have argued for this year after
January 4, 1974

year. Many of the problems we are facing today would not exist if we had moved in the direction of an equitable tax system. We do not have it now and the chances are that we will not get it for a while, so we have emergency measures such as those before us. For this reason I am prepared to support these measures, not because I think this is the proper way to solve problems-and I am sure the minister would agree that it is not-but until we can find the proper way we must have some instrument to deal with a situation which is in danger of getting out of control.
Let us now examine where the benefits will go. In order to talk about that, we have to talk about the system of royalty payments. It seems to me that one of the first things we should do is disallow royalty payments as deductible items for federal tax purposes. At the moment, royalty payments are treated as an expense. The companies are permitted to deduct these royalty payments from income before they pay federal taxation. That means you give the provinces the right to pre-empt all federal taxes if they choose to do so, simply by determining what the profitability of the company would be. On that basis the province could institute what I call a royalty tax, which would be an equivalent amount, and therefore there could be no taxes payable by those companies to the federal government.
Royalty payments, I think, up to a point are legitimate payments and, up to a certain point, it is legitimate to consider them as a deductible expense. After all, a number of considerations are involved. I am suggesting, however, that these considerations have now, to some extent, disappeared because of the astronomical increase in price. In the normal course of pricing, royalty payments could be considered as legitimate. I have been a supporter of royalty payments as deductible items until the present. Now, we face a different situation.
It could be argued, as the province of Manitoba did during the hearings on the white paper on taxation, that if the federal government were to make available depletion allowances, or limit depletion allowances, that those depletion allowances should not be for the benefit of the company. It was argued that the province, not the company, would lose as a result of the depletion of the resource. The future prospects of the province are being reduced and therefore the province, not the company, should be entitled to the depletion allowance. I think that is a sound argument. To the extent that depletion allowances are permitted, the provinces ought to be compensated, not the companies.
Because the federal government could not see this point, the provinces had to use the much more clumsy instrument of royalty payments in order to make sure that the interests of their people were looked after. The provinces can argue that royalties are used to pay social costs. I am speaking of the building of highways, and the establishment of a transport system, for taking care of the needs of resource industries. Unfortunately, resource industries cause serious social dislocations and disruptions. Therefore, royalty payments are part compensation for the people in the province. In that way, the people are reimbursed to some extent for the pieces they must pick
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up after the mine closes, or after the operation moves to some more lucrative field if certain taxes are imposed. This is like paying for municipal services. Nobody will argue that the tax a company pays for municipal purposes should be disallowed. Some will argue that some degree of royalty payment is legitimate and that companies are entitled to deduct part of those payments for income tax purposes. But we have gone beyond that point.
Speaking on second reading, the Minister of Finance said that the tax limit must be increased, because no one dreamed six months ago that the price of oil would go as high as it has gone. I submit that, in view of the astronomical increase in price, royalty payments in future should not be permitted to be deductible items, to the extent that these were so considered in the past. The question of royalties must now be dealt with.
The question of royalty payments must be considered along with the question of depletion, payment for services and compensation. Royalty payments are now a means of appropriating all economic rents with regard to resources to the location or province in which these resources are to be found. In other words, the fortuitous circumstance of the phenomenal price rise has meant that this economic rent has been appropriated totally to the area in which the resource is found, and the federal government has been pre-empted from any attempt to tax. This might be a great system, but it is hardly one which I, and, I hope, other hon. members of the federal Parliament, can condone. Someone once said that he had not been elected to preside over the dissolution of a certain political entity. We are not here to preside over the dissolution of the federal tax system merely because prices have been rising around the world. For that reason, I want to examine the export tax.
So long as the export tax was around the $2 level, I fully supported the position that the entire amount generated by the tax should be rebated, in one form or another, to the producing province. That position did not seem to be unfair or harmful to the federal interest. I felt that that kind of money should be repaid to the provinces, particularly as at least 50 per cent of that money was to be reinvested in those provinces. I fully support the position of the hon. member for Nanaimo-Cowichan-The Islands (Mr. Douglas). It would be better if we could invest directly in those oil resources, instead of trying to determine how much money the companies need as stimulation for activity, how much money they are making, and so on. Instead of speaking of money transfers, I suggest that we should be speaking of public involvement in future development of energy resources in Canada. I think generations following us will be grateful if we take that position, just as people are now grateful for some of the decisions that were made in the past regarding public utilities. However, that is not the issue at the moment.
It looks as if the increase in the tax will be to $6.50. That $6.50 is calculated after allowing for some $4 odd to the oil companies. That $4 figure also includes substantial royalty payments and substantial profits for the corporations. In other words, if neither the provinces nor the oil companies get any more than the $4, they will still be doing rather well, although I think the provinces ought to be

January 4, 1974
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doing somewhat better at the $4 level. Certainly, the companies can make fabulous profits at the $4 level. Just imagine how much they would make at the $10.50 level. So, when we are talking about the $6.50 export tax, we are talking of found money, of pure, unadulterated profits, if profit can be unadulterated.
At the 50 per cent tax level, the federal government would get $2.5 billion per year and the provincial governments would get $2.5 billion per year. That is a lot of money. I do not see why the oil companies should get more than they are making at the $4 level. Of course, the question of the tar sands has arisen. We are told that it will cost more to produce oil made from the tar sands. Nobody is sure how much should be charged; some say that the price ought to be about $6 per barrel. If the government adopted the kind of tax system we advocate, it would not have to worry about needing to reduce the export tax or treating the tar sands oil differently from conventional crude oil. The companies would be taxed according to their profits. The price system would make sure that everyone is treated with the same degree of equity. The companies would receive sufficient stimulation, although speaking personally I would stimulate them right out of business because we would do the developing ourselves. As there may be some difficulty implementing that program for a little while, we must take the second best choice, which is the existing taxation system.
Under our system everybody, the federal government, the provinces, and the people of Canada, would have the advantage of an ample tax base. As I said, $2.5 billion would accrue to the provinces. If prices were to rise, additional phenomenal amounts of money would be at the disposal of the provinces. The arrangement would be equitable, and I think the provinces would be satisfied with their position. I realize that provincial premiers want to continue being provincial premiers and, without being cynical about it, that is their responsibility. I do not fault a provincial premier or member for saying "This is our resource. We have had a lot of grievances and now we are in the driver's seat so it is our right to squeeze." Human society being what it is, maybe to expect too much altruism is not a basis for policy.
For example, I would like to see Canada say at this particular point we are not going to charge the United States the same as the Arabs are charging. I may be accused of being too altruistic. I have made some pretty harsh statements about the United States. However, for us to condemn the Arab nations, the OPEC countries, for unconscionable price increases and then say we are going to adopt that price for the United States leaves a lot to be desired. Maybe Canadians will say I am being too noble, too generous, or that we cannot go all the way. I would like to see my country at least make a gesture and say we will charge 10 or 15 per cent below the price charged by the OPEC countries instead of adopting a parallel course.
The Americans are having the hell squeezed out of them. I do not feel right about saying they are our friends and we will give them some oil, but under the same conditions. I would feel more comfortable if we were to say to the Americans we cannot supply them with oil

because we do not have it, but as long as we can supply it we will not take their last drop of blood. I am not particularly proud of that policy being pursued by Canada. I certainly would not argue if the Canadian government would forgo some of those rents in return for a gesture of friendship and an indication that one country does not have the absolute right to squeeze the hell out of another, even though it is in a position to do that.
The other point I want to make before concluding is that if all the revenues go to the provinces, every taxpayer in Canada will not only pay higher prices for fuel but will have to pay higher taxes because the revenues are going to the provinces. In many ways we would be better off to have the money go to the multinational corporations. It would cost less. We could at least tax them and get some of the revenue back. However, if it goes to the provinces, the federal government, under an equalization formula, is committed to paying one third of every dollar to the poorer provinces. For argument's sake, if the revenue of one province increased by $3 billion, and that could easily happen in Alberta, the federal government must then tax the rest of the Canadian people $1 billion in order to make up the equalization payments and abide by its commitment under the equalization formula. They are going to get squeezed in both directions. That would be an intolerable position, a position with which no government would be able to live.
The representatives of the federal government should go to the conference with some understanding of the real grievances of the western provinces. There should be a real desire to find an accommodation for them. They should also ensure that federal prerogatives, rights and the whole purpose of federalism are not bartered away.


Some hon. Members:: Hear, hear!


James McPhail Gillies: Mr. Speaker, I wonder if I might call it one o'clock.


Some hon. Members:: Agreed.


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


[Stage Direction]
AFTER RECESS
[Stage Direction]

The House resumed at 2 p.m.
James McPhail Gillies: Mr. Speaker, this debate on Bill C-245 might well be one of the most important discussions on the development of the Canadian economy to be heard in the House of Commons for many years. I should like to congratulate the hon. member for Waterloo-Cambridge (Mr. Saltsman) on the analysis he gave this morning. While I do not agree with a good deal of what he said, I do agree strongly with the remark he made at the opening of his speech, that he was not speaking as a member from Ontario particularly, but as a
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member of the federal House of Commons on a matter of great concern to all Canadians. I was a little surprised that, having made such a statement, he should have gone on to make less than complimentary remarks about people from other provinces. Nevertheless, I think it important to remember that we are not here today debating provincial rights or similar issues, but the evolution of a policy which will be fair and appropriate for all Canadians.
It seems to me that in his speech yesterday the Minister of Finance (Mr. Turner) did succeed in stating the problem. The situation is now clearly defined. The position, as put forward by the Leader of the Opposition (Mr. Stanfield), is that we in this party support the proposition that the export tax should continue through a further two months; we would do everything necessary in the House of Commons to make this possible, so that the government would not be left without the capacity to deal with any situation which might arise in the course of the next quarter of the year.
It is an entirely different proposition, however, to ask parliament to give permanent sanction to a proposal which would change dramatically the whole budgetary procedure upon which this House has operated in the past, especially in the absence of further information as to what is involved. The Minister of Finance has been placing great emphasis lately upon the uncertainty in the economy. I agree with him that there is uncertainty, and it seems to me this is one of the major reasons the government should not be pushing, now, for the permanency of any proposal, but should be supporting flexibility.
My heart was warmed yesterday when the Minister of Finance intimated, during an answer given in the question period, that he would have something to say about the Canadian economy in the course of the debate. Indeed, in the opening part of his address he said he would talk about the Canadian economy. He did remark that we probably are facing the most unique situation we have faced in the recent history of the economic development of Canada, and that the policies we are going to follow now, or that may be followed now, will have deep ramifications for the development of the nation.
I was very disappointed that beyond those opening remarks, and that genuflection toward the economic situation, he did not say much more about it; he did not give us much more of the government's thinking on what is going to happen to the economy as a whole. I agree with him that we are possibly at a watershed in terms of economic development in Canada. What we do here in the next few days may have a great impact on the way this nation develops in the future and I am sorry he didn't say more. About his thinking on the economic issues. There is no question, now that the energy crisis has evolved, that there is a whole new pattern of economic forces operating in the world, forces we have a great responsibility to deal with in an effective and responsible fashion. The minister mentioned only one but I should like to mention four.
The first thing that has happened as a consequence of the oil crisis, as it is now known, has been a major change in the international balance of payments of a great many
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countries. I do not need to review or recite again the difficulties which are going to be experienced and are being experienced by the European Common Market countries, by Japan and by the United States. The increase in the price of energy and in the price of petroleum products from OPEC countries is bound to have an enormous impact, either directly or indirectly, on the balance of payments positions of these countries. But the problem for these nations is nothing compared to the difficulties which are coming about for some of the less developed countries. It is hard to keep up to date with the statistics because prices change so rapidly, but some of the prices now being quoted could result in taking the entire surplus balance of trade of some countries, simply to pay for energy imports.
Associated with the balance of payments difficulties is the fact that the OPEC countries are going to have enormous surplus reserves. What are they going to do with them, where are they going to put them and what will happen to them? Those are questions about which every nation is enormously concerned. Moreover, what happens to the exchange rates if in fact the United States buys energy in the future at the high prices now being set in world markets. The net result will be that the value of the United States dollar will decline dramatically in world markets and there will be surpluses of United States dollars floating all over the world.
If that happens the price of U.S. goods sold outside the U.S. will be cheap compared to the prices of goods from other countries. Will countries be willing to have the United States flood the world with low priced goods and services because of the oil problem? Not likely! The possibility of increases in tariffs along with other measures designed to impede world trade will be great and cannot be under-estimated. The other possible impact of such an international monetary situation, could be, if we have that sort of devaluation, enormous inflation. People keep wondering why there is so much inflation in Canada and in the United States; certainly one of the reasons has been the devaluation which has taken place in our currency in foreign markets. This condition could be exacerbated if the international situation with respect to balance of payments deteriorates.
I am slightly distressed at the position Canada is taking in this matter-one of wait and see. During periods of uncertainty, it is important to watch how a situation is developing, how it is going and how it is moving, but Canada has a long, important and significant tradition as being a leader in the development of ideas for dealing with international monetary situations. I am sure the Minister of Finance will recall that when the Breton Woods Agreement was established it was often known as the "ABC" agreement; The American, British and Canadian agreement. Canada, for a long time, certainly after World War II, was a leader in developing ideas as to how to deal with international problems.
One of the reasons we in this party were very disappointed that before the Canadian delegation went to Nairobi last spring we were unable to get a statement in the House of Commons as to Canada's position, was that we were therefore unable to debate international monetary matters in the House. We felt it was important for

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Canada to take some relatively positive position at those meetings, and that a debate would clarify Canada's official view. One of the ideas evolving in our party, as the members of the economic caucus of the Conservative party will confirm, was that perhaps Canada could put forward at Nairobi some ideas about an international bank for energy, and this of course was long before the crisis arose. I am not suggesting we had the foresight to see the difficulty, but indeed it would have been raised in this House at that time.
I would hope that we will, before any positive positions are taken by the Canadian government with respect to monetary reform, have the opportunity for some serious debate and discussion in the House about the Canadian position. I would hope that Canada can again emerge as a leader, not a follower, in devising policies for dealing with the international monetary situation which has developed because of the energy situation. It is not satisfactory to always take the position that we have to stand and wait. We should be providing leadership in this important field.
In addition to the problems in the international monetary field resulting from changes in balance of payments positions the energy change has enormous implications for the Canadian economy because of our trading pattern. The three areas of the world which are most affected by the energy crisis are the United States, Japan and the European Common Market countries, and they are the three areas with which Canada does most of its trading. We hear over and over again that 25 per cent of our gross national product is generated by international trade. It is inconceivable to me how anybody could believe, given the changes which appear to be taking place in the world, that changes in our trading partners economies will not have some impact on the Canadian economy. What the precise dimensions of the change will be, is hard to calculate. On the other hand, I am impressed by the fact that the responsible ministers of practically every country in the world involved in industrial activity of any dimension, the United States, Japan and the United Kingdom for example are able to make some forecasts as to what they think the impact of the crisis will be on their economies.
There is little doubt that in Canada at the present time the degree of uncertainty in the business community is probably as high as it has ever been. I would submit to you that the reason it is so is not only a result of the changing positions that have been taken by the government in respect of energy policy, but perhaps equally so because the government has not put forth in any detailed fashion what it thinks is going to happen to the Canadian economy.
With great respect, I suggest that when the Minister of Finance talks about psyching our way into a recession we cannot take him very seriously. How can anyone believe we are going to psyche our way into a recession when in fact there is an energy crisis all over the world? How can anyone talk about psyching our way into difficulties when Britain is now operating on a two-day week? Those are facts, and what Canadians want to know is what do these facts imply for the Canadian economy in the future? Surely, with the body of experts we have in the Bank of Canada, the Department of Industry, Trade and Com-

merce and the Department of Finance the Canadian public has a right to know precisely how the government assesses the economic outlook.
There seems to be a view, held by this government that it is wrong, unfortunate, dangerous, or something of the sort, to tell the Canadian people precisely what the government thinks is happening. On the contrary it would be very sanguine and helpful to the Canadian people to know what is happening. It is unfair to believe that informed Canadians are not concerned about the effect of the energy crisis on Canada. It is important for the government to make clear what it thinks this impact will be. It is bound to be important.
The third effect, so far as economic conditions are concerned, of the change in the energy situation is the adjustment in the competitive advantages among trading nations around the world. There is no question that the change in energy supplies and energy prices could have influence in the long run as considerable as the invention of the steam engine had in Great Britain at the start of the 19th century.
The question is what position will Canada play in the changing world. Do we believe that we should use this new condition as a foundation upon which to build an industrial strategy in Canada? Does it provide an opportunity for new types of economic policy? Are we in Canada, in the broadest sense of the word, to use the energy advantage we have to develop an industrial strategy to take advantage of the energy resources we have by pricing them so that there will be a comparative advantage for us in industrial production? I was somewhat concerned with the remark of the Minister of Finance that when Canada goes to GATT again we must go with the hope of greater co-operation with other countries and for an extension of multilateral agreements.
No one is opposed to the expansion of world trade. The greater amount we can have the better. But, surely it is time to examine what we are looking for. Trade for trade's sake indeed may not be the position we should be taking in the Canadian economy at the present time. Consider the realities of the present situation. It is quite clear that not only in respect of oil but in respect of sugar, coffee and other products international commodity agreements are breaking down. Is it time for the Canadian government to look at the question of whether or not it should be striving for some type of different approach to trade, some sort of bilateral approach to trade. For example, should we be making arrangements with Brazil to make sure that we can trade our products for an assured and significant supply of coffee? Is the GATT approach, which was started after 1946, now outmoded with the changes that are taking place around the world? With the present world demand for resources is the kind of approach we have taken with considerable success in the last decade still correct? I note that a former Minister of Industry, Trade and Commerce said recently that the only processing we do with our raw materials on their way to Japan is kiss them goodbye.
Well, that might be the proper policy, but with the shift in the world that is going on the time has arrived to
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examine our resources and to evolve a system of trade policies that are appropriate to the times. To go to GATT with the same set of policies as we did in previous years seems to me to be throwing away an opportunity to reassess the direction in which the economy should move.
Finally, the fourth great impact on economic activity because of the energy changes is that we must determine a resource policy for Canada. I am impressed by the arguments made yesterday by the Minister of Finance, in relation to oil, as to what an important commodity it is, how it plays such an enormous role in the economy and that it therefore deserves special attention. But time surely has come to look at all our resources in the broadest sense and to decide what our resource policy in broad terms will be.
I agree with the minister that the energy situation is a unique one. Obviously, the change in the price of energy was brought about by the monopoly position by the OPEC countries. Under the circumstances any responsible government has a duty to protect its citizens and consumers from those particular circumstances, and of course we have supported that position right along. But it is not satisfactory for the government to deal with similar instances which may arise in such an ad hoc way. What we must do is evolve a resource policy that will involve all the resources of Canada.
The point I am making is that we are dealing with an issue which is much more profound than the import tax. The real issue with which the Canadian Parliament and the Canadian government will have to deal in the course of the next year or so is how the Canadian economy is to be modified and how will it be changed as a consequence of the energy crisis that has hit the world. We must deal with the problem and decide what in the long run we can and must do as Canadians to deal with the changing situation before us.
Given that premise and that foundation it is improper for parliament to tie itself to a position before it knows more about the problems which are developing. For example, we know little about the critical question of what price Canadians will have to pay for petroleum products in the period ahead of us. Until the government can give some idea of what the pricing policy will be it is wrong for parliament to lock itself into the situation we are being asked to accept at the present time. What is the price of oil to be for Canadians? The policy of this party is clear. We believe in one price across Canada allowing for deviations because of transportation costs and so on. I assume that position has been accepted now by the government because clearly differentiation in prices between the Atlantic provinces and Quebec and other parts of Canada is something this nation could not stand at present imported oil prices.
We are delighted that the government has accepted our position. But what level will that price be and how will it be set. What could the price be? It could be the international price. When the Minister of Finance says he is tracking international prices I do not know what that means. Presumably he means Canadian prices would follow an international price. Whether or not you agree with that position depends upon the position you take
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with respect to pricing resources as a foundation for an industrial strategy.
The second possible price would be, say, a price that permits a reasonable rate of return on investment for people who are operating in the oil industry. This might be the policy that the government will follow. Perhaps they could tell us if that is the direction in which they will go? The third possibility which the government might take is to adopt a price system that would be one price for oil and another price for new oil. The fourth possibility is for the government to establish a price that is equivalent to a price for alternative energy sources such as hydroelectricity or nuclear energy. The fact is that we do not know and it is improper to ask parliament to accept the present proposal without knowing what the pricing policy will be.
Certainly, to go into a meeting with the first ministers of the provinces of this country with the current excise tax proposal makes it almost impossible to go into that conference with a fair and open bargaining position. Members of the government and the ministers involved must want-and I am sure they do want-that conference to be an outstanding success because no one benefits in this country from a fragmentation or fractionalization among various areas.
The minister is concerned about the revenues that are being raised, the impact upon federal-provincial fiscal relationships, and properly so. All of us are concerned that it will be worked out properly. I am sure that every member of parliament wants the consultative process to be back in operation in an effective and meaningful sense. In a debate of this magnitude it makes no sense to refer back to the unfortunate circumstances of the past. What we really care about is how the problem will be solved in the future for the wellbeing of all Canadians. So, surely the federal government wants to go into the conference with the provinces believing that both are coming together to try to solve this most difficult problem in an open and effective fashion.
If the conference starts with this bill enacted it may be difficult for the provincial premiers to believe that the federal government is dealing in an open and straightforward fashion. Therefore, I would urge as strongly as I can, given the situation that is developing around the world because of the energy crisis, given the fact that we know the change in the energy situation in the world is creating a whole new foundation for the development of economic policy, given the fact that we do not know what the OPEC countries will do in the next few months, and given the fact that we really have to work this problem out as Canadians together, to find an adequate solution to help all Canadians, that this parliament accept the proposal of the Leader of the Opposition (Mr. Stanfield) that we have an extension of the export tax to the end of March so that the windfall gains will go in the appropriate direction, and that we wait until after the provincial conference before proceeding with the latter part of this bill.


Some hon. Members:: Hear, hear!

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John (Jack) Henry Horner: Mr. Speaker, in rising to take part in this debate on Bill C-245 I should like to point out that we have heard a number of terms used, such as "export tax", "export charge", regarding the exports of a resource industry. The minister has stated in his speech that this bill is of great significance to Canada. We have heard much said about windfall profits, who gets them and where they are going. Yes, the bill is of great significance to all Canadians. It is a tax on a resource. A member of the NDP wondered out loud in his speech as to why there should be a tax on only this resource. Why should there not be one on other resources as well. Is oil the only product of which we are short? We are short of steel, we are short of many things. We are exporting many other commodities as well. Perhaps, we should tax some of these other exports.


An hon. Member:: Hear, hear!


John (Jack) Henry Horner: I hear a member of the NDP
saying "hear, hear" to that idea. I think the government should make its position clear. Is this only the beginning of a new system whereby the federal government will raise money for its lavish ideas so as to gather more votes? Is this the beginning of a new turn that the government has taken? Will they be taxing oil as a resource, and what other resource will follow? Will they tax other manufactured goods? After all, steel is made from a raw resource manufactured in Canada. Perhaps we should tax steel as well as oil. Perhaps we should tax lumber of which we are exporting much. The exports of B.C. lumber went up 24 per cent this year, and the prices of building goods have gone up in Canada. Perhaps the government has that at the back of its mind as it spends money lavishly to gather votes.
These are the questions that the government should attempt to answer. They should pledge, before this bill is passed, that this is the one and only tax and that it will only be applied for a time. The bill does not specify that. It provides that the tax will end at the end of January and then- it will be called an export charge. As one of the newsmen interviewing the Prime Minister (Mr. Trudeau) said the other day, it is all salami anyway, and the Prime Minister agreed. It is a tax, a charge, call it what you like; it is an export levy. The bill suggests that it will commence on the first of February, but no one knows when it will end. These things should be ironed out. Is this the only tax, and will it be applied temporarily?
With regard to the matter of where the windfall gains should go, and whether Canada has adopted the best policy, let me quote from an editorial in yesterday's Toronto Star which outlined some of these problems:
Energy Minister Donald Macdonald says the price of Canadian oil will have at least to double when the freeze comes off next spring, and may have to become only marginally less than the world price, now about $10.50 a barrel.
Are we to believe that the tax is coming off on January 1, and the charge will come off in the spring, as the Prime Minister said in his speech to the House last month? On the strength of this editorial, one might believe that the Minister of Energy, Mines and Resources (Mr. Macdonald) believes that the tax will come off completely in the spring. The minister has not said that in his speech. I hope 
he makes his position abundantly clear because we have heard so many conflicting statements on the subject. The Prime Minister says one thing, the Minister of Energy, Mines and Resources says another, and now the Minister of Finance (Mr. Turner) is in the game. He, too, has his own ideas about these windfall profits about which everyone is talking and about what would be the best oil policy for Canada. Certainly, we need further explanations. This editorial continues:
Second, the oil producing provinces are entitled to some increased return from their natural resource.
Even the Toronto Star admits that the oil producing provinces are entitled to some increase. We, from the oil producing provinces, would like a clear definition of the word "some". How big is "some" and how soon is it? The editorial goes on to state the following:
As we have lately discovered, oil and natural gas have been underpriced in past years in terms of their true energy value.
That is a pretty good admission and we believe that the government is now realizing the true value of energy and that "some" is substantial. The editorial goes on to read:
But third, the only long-term justification for price increases beyond covering higher production costs, if any, and giving Alberta and Saskatchewan a fair return, is to provide funds for exploration and development of new energy reserves.
I will deal with that a little later, but first I want to emphasize that even the editorial in the Star admits there is some justification for price increases, and one reason they give is the higher production costs. The Star believes inflation will affect everybody, but not the cost of finding oil. As I say, they disregard the higher production costs, but they do say there is justification to provide funds for exploration and development of new energy reserves. That is a very significant point.
In his speech the Minister of Finance (Mr. Turner) outlined three points that were similar to the points made by the Toronto Star. He said there were three important points and they were interrelated. According to him half of the total energy produced in Canada comes from oil, and that a sudden jump in price can cause grave disruption to our economy. If we are to believe the Minister of Energy, Mines and Resources (Mr. Macdonald) that $10.50 per barrel will be the price in spring, then there will certainly be a sudden jump. Of course, we hope that in spring the heating season will have passed.
The second point made by the Minister of Finance was that the competitive forces of supply and demand have not been responsible for the increase in price. That is a debatable point, and I will deal with it later. Then, he went on to say that 2 million barrels per day are produced in Alberta, and that if we increased the price of that oil by $6 or $7 a barrel this would involve a great deal of money. That is certainly an understatement for the Minister of Finance to make, because it does involve a great deal of money.
When talking about oil we should remember that about 80 per cent of the world's reserves are in the Middle East and north African area. Of the Arab petroleum exporting countries, Saudi Arabia, Kuwait and Libya produce about 30 per cent of total world production, and hold
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about 50 per cent of the free world's reserves. Recently Venezuela increased the price of its oil to $13.80 per barrel, and the Persian Gulf states increased their oil to $11.65 per barrel.
We must develop alternate sources of energy. What is the United States doing? First of all, it has a two-price system. Even before this crisis came along the United States allowed a 23 per cent increase in the price of oil now in reserve, with no limitation on the price of any new oil that is found. In other words, it is giving quite an incentive to oil companies to find new sources of oil. In essence, the United States is allowing the companies to charge the world price for the new oil that they find. Naturally, in consequence the international oil companies will have a tendency to explore for new oil reserves in the United States. Some 20 per cent to 25 per cent of the oil now used in the United States is new oil, for which the higher world prices are allowed. That is a huge amount of oil, so the incentive must be paying off. When you average the price for new oil and old oil in the United States it comes to about $7.50 per barrel.
What are we doing in Canada? Are we doing anything similar to that? We can say that we have outlined a determined policy to invest $40 million in a national petroleum company. That is a great incentive! That will bring security to the people of Canada, particularly to those who live in the five eastern provinces. Of course, I am speaking facetiously because the people there know that Shell Oil spent $125 million exploring for oil in Quebec and off the Atlantic coast without finding any appreciable amount. There is some talk that this $40 million will be spent on research. I would point out that Syncrude (Canada), which has not really gone into production yet, has already spent $90 million on research, and purchased a lot of its research for a cash price from Great Canadian Oil Sands. Yet here is this great, bold government trying to win the confidence of the five eastern provinces by saying it will establish a national oil company and spend $40 million on research.
How lucky and how fortunate are we? I notice that a meeting will be held next month between Canada and the United States to discuss this whole energy question. According to another report in yesterday's Toronto Star, our oil policy has tabbed us in the United States as being the Arabs of North America. The report reads:
The Canadian Embassy has published a four-page report outlining Canada's oil export policy in a bid to dispell a tendency here to call Canadians "North American Arabs."
The embassy says many in the United States misunderstand Canada's aims . . .
A Canadian embassy official said yesterday that the proposed export levy "raised a number of questions and some explanation had to be made that Canada was not engaged in flagrant profiteering."
The embassy publication says the purpose of the proposed increase is "to help forestall an increase in prices charged to Canadian consumers . . .
The report went on: "At that same time, we were also anxious to ensure that the return on Canadian oil in your market was not significantly less than that being received for oil imports from other countries . . ."
Even they recognize that there is going to be an increase some time, but they are not sure when. The significant
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thing is that the Canadian embassy was instructed to do this.
The Canadian government must also realize that if we impose an export tax on our trading partner, the United States, it can retaliate. Two-thirds of the energy produced in Ontario is produced with American coal. I do not suggest that the United States place an export levy on that coal, but it could if we play around with this concept of profiteering at the expense of our neighbour. I noticed that last month the Prime Minister made the statement that in the long run we must allow the price of domestic crude oil to rise high enough to ensure development of the Alberta oil sands and of other Canadian resources, but not one bit higher than that. That is in line with the statement in the Toronto Star. And he said there would have to be some further exploration.
It is interesting to note that the president of Imperial Oil of Canada appeared before the National Resources and Public Works committee on December 20 last. It is the largest international oil producing company operating in Canada, and he is a man fully knowledgeable of the oil industry. In response to a number of questions asked by committee members he very clearly stated that Imperial brings all its oil up from Venezuela, and he did not expect any cut back in supply. I questioned him, as reported at page 43 of the committee proceedings, about the building of the pipeline to Montreal. Imperial is the owner of a one third share in the Interprovincial pipeline system in Canada. I asked were they going to build a pipeline that could supply the Montreal market, and he replied that in no way could they do that. They would build a pipeline to put only 200,000 barrels a day into Montreal. I asked if they would still leave Montreal open to international prices, and he replied that they had to because they did not have enough oil in Canada.
I want to read what he said about that very point because it emphasizes the need for exploration and development. He said:
I thought I had described the situation, Mr. Horner, that if we tried to supply Quebec and the Maritimes with the pipeline extension that would be required, if you went to that degree, then you would probably be looking at five or six years of supply, availability and proven reserves to date.
We have five or six years' supply of available resources to date if we supply Montreal and the Maritimes from the traditional reserves which are 85 per cent in Alberta! Five or six years' supply, Mr. Speaker; I cannot emphasize that enough. Anybody knows, for example, that the tar sands contain huge reserves, but the technology to extract the oil has yet to be developed. Only one-fifth of the land mass involved has less than 100 feet of coverage. He says that we have only five or six years supply for all of Canada if we do not make further discoveries! He goes on:
We would not have sufficient lead time either to bring in the Arctic discoveries or the Tar Sands. We would not have enough development in the Tar Sands to do no more than-
Then, he continues:
Therefore, you are going to run out of crude. You are going to cut off your traditional suppliers-
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We do not have great reserves and whether windfalls go to international oil companies or not, they have to go to somebody to develop those reserves. Syncrude hopes to go on production by 1978, but they will be lucky if they are in production by 1980, and they are only going to produce 125,000 barrels per day. We need ten more Syncrude plants in the tar sands if we are to have enough for all of Canada. At page 45 of the committee report Mr. Armstrong emphasized again that if a pipeline were to be built to supply Montreal, another 200,000 barrels per day would have to be put through. That is the amount that western Canada could supply in view of the known reserves there. If the NDP, which is apparently running the government, believes that a national oil company is the answer-and that is one way in which we can prohibit the windfalls going to what we might call the wrong people-then we have to get into the business and get the national oil company producing oil.
In a recent column in the Toronto Star, Jack McArthur suggests that the government would have to pay about $2.5 billion to buy 51 per cent of the common stock of Imperial Oil at recent market prices. Referring to the government he said:
That would make you the leader in Canada but far from completely dominant.
He is quite correct and this is the choice that the government has to make. If they want to guarantee ample supplies of oil to all Canadians, they will have to get into development and that development will have to be speeded up. We have five or six years' supply for all of Canada.
Now, how do you speed up development? You entice and encourage somebody to do the development. But how do you entice and encourage them if you limit them to a price of $3.83 per barrel? It is commonly called $4 a barrel but $3.83 is what the companies in Alberta are getting today. How do you speed development at that price, particularly when development money will flow in the United States and when new oil is found there, the market price will be charged.
The Minister of Finance stated that the competitive forces of supply and demand are not responsible for the increase. At the time I said that point was debatable because, in a way, supply and demand are responsible for the increase. I have before me a pamphlet produced by the Petroleum Society of CIM dated September 30, 1970, the first page of which reads:
On Wednesday, September 23, 1970, Dr. Wilson Laird, Director of the Office of Oil and Gas, U.S. Department of the Interior, testified before a U.S. Senate Sub-Committee on the "current status of the American oil supply situation". In an abstract he said that the spare productive capacity for oil in the southern 48 states and in Venezuela is now almost fully being utilized.
In 1970 it was recognized that the oil in 48 states and Venezuela was being fully utilized! The paper continued: Texas and Louisiana cannot raise production very much further and in fact, all ". . . the lower 48 states are approximately at their maximum production capacity at this time." He noted also very clearly that Venezuela the biggest overseas supplier of eastern U.S. and eastern Canada is producing almost at its maximum potential.
That was a statement made in 1970 by a man with full knowledge of the oil industry, and who was responsible to the United States government, when he testified before a
(Mr. Horner (Crowfoot).]
U.S. Senate subcommittee. He pointed out that we will have to rely on some other sources if our consumption of oil increases. So supply and demand have played a part, Mr. Speaker. As early as 1969 and 1970 we should have expected that oil prices would increase.
Then what about the Arab situation? In a speech which I made in this House some time ago, I said that an oil expert had told me that in the North American market, oil consumption has increased by about 6 per cent per year for several years; that European and Japanese consumption has increased at a rate of about 12 per cent per year; and that to meet these increases the Arab countries would have to increase their production by at least 30 per cent per year. No matter who owned the oil, anybody increasing the production of a non-renewable resource by 30 per cent per year would start to wonder whether it would not run out some time. They have a legitimate right to increase their price somewhat, not as much as they have but as they have said, there are bigger fish in the water than higher oil prices and they are after the bigger fish. But, Mr. Speaker, they also cut back production by seven million barrels per day. Since they produce about 30 per cent of the oil in the world, this naturally creates a shortage. Therefore there is a tendency to say that supply and demand have had some effect on oil prices because of the Arab cutback. Whether that cutback was necessary is another question.
The question now comes up "What does the west want?". A socialist member from the golden triangle of Ontario said this afternoon that for years he had heard the expression "What does Quebec want?". Now, he is wondering "What does the west want?" That made people ponder. Richard Gwyn, a columnist for the Ottawa Journal interviewed Premier Lougheed of Alberta and Premier Blakeney of Saskatchewan and in an article on December 22, 1973, had this to say:
The affluence of Alberta is almost overpowering. New office blocks and apartment buildings tower upwards in Calgary and Edmonton. There is no sales tax, and home owners get a tax rebate.
The article continues:
"All of this comes from a depleting resource," says Lougheed. "The revenues won't last long. We have to use them to build a post-oil Alberta:	petrochemical industries, steel, forestry
products."
Blakeney says the same thing, only more cautiously.
That is to be expected from a Socialist, I suppose. That is what Alberta and Saskatchewan seek and will get. According to Gwyn's column, that industry must come from somewhere. He goes on to say:
Ontario is going to be the loser. Both premiers believe that in the energy debate, Ontario has been hiding behind Ottawa's skirts.
I am not saying that is not right. Alberta and the west want more industry, more development and more people. We do not want to see only central Canada continuing to grow: I do not think it is wise to expect that. The federation of provinces, working under a federal system of government, want to divide up the spoils. The provinces are asking Alberta to do that. We are supposed to divide up our resources, not to be too greedy and to hand out our oil. Alberta says, "Fine; we will do that." But it says to the
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rest of the country, "You do the same; you give us some of your industry. Move your industry and your people out here. We do not want to see Canada grow and become industrialized at the expense of our non-renewable resources."
To my mind that is an important point. In some ways underdeveloped nations and countries in the Middle east are saying the same thing. They are saying, "If you want our oil, we will sell it. But your manufactured goods are too expensive; we cannot afford them. We need manufacturing industries and we want more industrialization." That position is understandable.
If this country's industrial policy is to be based on our energy resources, it is clear that there must be development in my part of Canada. It is not good enough for the Minister of Regional Economic Expansion (Mr. Jamieson) to say that we will give money to the unemployed, or that we will spend money creating jobs in areas of unemployment. That is not what Premier Lougheed of Alberta is saying. He wants Canada to be built up where the resources are. Our work force in Canada is mobile. Alberta welcomes people from all over Canada. The province is saying, "Do not expect us to supply you with our nonrenewable resources at a low price which does not encourage the further development of those resources." There has been much talk of windfall profits. I suppose the oil companies are making windfall profits. What are they doing with the money? Last year, 70 per cent of the profit made by the oil companies was plowed back into the development of more oil in Canada, not necessarily in Alberta alone. Shell spent $125 million in exploration off the east coast and did not make a significant find. Huge expenditures are involved in the development of oil and gas resources and in bringing them to market. Panarctic has spent $45 million of the federal government's money in finding and developing natural gas, and much more must be spent in taking the gas to market: the linking of the market with the gas wells will entail a very large expenditure.
What does this bill do? It provides for the imposition of an export tax. At the end of four months, that is, at the end of January, that tax will have brought in about $145 million. The government says that 50 per cent of the proceeds of the tax will go back to the provinces. You could dig up all kinds of quotations from Hansard to show that the Minister of Energy, Mines and Resources (Mr. Macdonald) has suggested that the other 50 per cent will be spent in the provinces in the development of resources, so that politicians who follow him can stand up and say, "We still have reserves for five or six years". Perhaps that will be said five or six years from now, although I hope development will keep ahead of our rate of consumption. However, this bill does not say that. The other 50 per cent will go to federal government coffers to help bail out the Minister of Finance (Mr. Turner) with respect to equalization payments.


Mr. Alexander:: That is not what Macdonald said.


John (Jack) Henry Horner: That is not what the minister said, quite right. Just over a month ago the Prime Minister (Mr. Trudeau) said in this House that this money will go back to the provinces. He said in the question period
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that it will go back to the provinces for developing more energy supplies. He has not said that recently; he has said we can do a number of things, equalize the price or things of that sort. He did not say how we would spend the other 50 per cent.


Lincoln MacCauley Alexander: There is confusion over there.


John (Jack) Henry Horner: There certainly is. The bill does not say where the money from the export tax is to go. It does not guarantee the provinces 50 per cent. It merely says that 50 per cent of the tax goes to the province; it does not say that 50 per cent of the capital charge must go to the province. There is a difference.


Robert Lorne Stanfield: The bill says that 50 per cent may be paid.


John (Jack) Henry Horner: As the Leader of the Opposition (Mr. Stanfield) says, the bill only says that 50 per cent may be paid to the province. I think the minister owes this House a clear explanation. Is this to be the first and only export charge to be levied on the export of our resources? Is the provincial government to get 50 per cent of the present tax, or 50 per cent of the charge?
If the charge increases to $10 per month, the government will gain $300 million per month, of which the provincial share would be $150 million. Oil companies, whether provincially, internationally or Canadian-owned! must have adequate returns which will encourage them to find more oil. They will not be so encouraged if the price is held to $3.83. A wise and resourceful premier would hold off the discovery of any more oil until the price went higher and we could market our non-renewable resources at fair and equitable prices. That means, as the Toronto Star said, prices higher than are being charged today.
The Prime Minister said that oil prices must rise if we are to ensure the development of our oil sands. It is no secret in Alberta that the agreement reached with Syncrude outlines a schedule under which oil prices between 1978 and 2000 A.D. will rise to nearly $15 per barrel in order to provide 7 per cent return on capital.


Robert Lorne Stanfield: That will not apply right away.


John (Jack) Henry Horner: That will not be right away. It is conceivable that in the 22 years between 1978 and 2000 A.D. the price could go to higher than $20 per barrel, especially if present inflation rates continue under this government.


Robert Lorne Stanfield: They will not be here that long.


John (Jack) Henry Horner: No, they will not be here that long. Even the Prime Minister admits that there must be some increase in the price of our oil or our resources will not be developed. The independent petroleum producers of Alberta have told us that it costs over $14 per barrel to find the oil which must be found to replace the oil we are now using. Today it costs $14 to find a barrel of oil. This gives some idea that we can expect further development at $3.83 a barrel.
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It should be clear to all Canadians that oil security means national security. The minister and the government owe it to all Canadians, whether they be in the five eastern or the five western provinces, to encourage further finds and development of our resources so we can have the oil security and national security which we need. We will not encourage further development with a national oil company which is only being allotted $40 million. In an article in yesterday's Toronto Star headed "Ottawa thinks small in oil big league", Mr. McArthur said-and I do not like the expression-it is just petty cash and peanuts. If the Minister of Finance and his cohorts think that socialism is the answer and a national oil company would do a better job than private enterprise, they should buy 51 per cent of the stock of Imperial Oil. According to Mr. McArthur this would cost $2.5 billion. For Shell Canada the figure would be $600 million and for Gulf Canada it would be $750 million. Mr. McArthur had all the prices in yesterday's Toronto Star.
Get in the business, boys, but let's find further reserves. We cannot expect Canadians in any part of this country to be secure with a five or six-year supply of oil. According to Mr. Armstrong, the president of Imperial Oil, that is all we have. It should be pointed out that since World War II there have been eight periods in the free world when there has been what might be called a shortfall of oil supply. In every other year the American supply of oil has taken up the slack. In essence, the American supply has bailed out the western world on every other occasion. Today that supply is completely used up; they are short 8 or 9 per cent of their requirements, which is not very much-but they used to export. As recently as seven or eight years ago they did not even want to accept Alberta's oil.
We must realize that this oil tax concept, oil charge concept or oil export charge concept is of very short range. The best thing that could happen to Canadians today would be to have an election and get this government out of office, because these short-term policies with which they are trying to obtain votes are endangering the long-term security of every Canadian whether he lives in Alberta, the Maritimes, Newfoundland, Quebec or Ontario.


Some hon. Members:: Hear, hear!


John (Jack) Henry Horner: These short-term policies are endangering the security of this nation. As I said, oil security means national security. We must have further development to give us oil security. This proposed measure will not do that. The minister should explain that this measure will only be in effect until spring, at which time Alberta will be quite willing to phase in as gently as possible an increase in oil prices for the poor people of central Canada, Ontario in particular. Certainly it must be phased in if we want to create the oil security which will give us national security.


Mr. Deputy Speaker:: Order, please. I should advise the House that if the Minister of Finance (Mr. Turner) speaks now he will close the debate on second reading.


John Napier Turner: Mr. Speaker,
I want to deal briefly with two or three points that have been raised in the debate during the past day and a half. The first point was raised by the Leader of the Opposition (Mr. Stanfield) and the hon. member for Nanaimo-Cowi-chan-The Islands (Mr. Douglas). It concerns the destination of the 50 per cent of the apportionment that under the bill will go to the federal government during the first four months of the export tax.
The House will recall the bill provides that in the months of October, November and December, 1973, and January, 1974, the proceeds of the export tax are apportioned 50-50 between the producing provinces, on the ratio of their production, and the federal government. The amount of money we estimate to be dealing with in the four months is $152 million, which is very close to the figure put forward by the hon. member for Crowfoot (Mr. Horner). Under the bill, $76 million will go to the provinces. As a result of the transfer of that money, those revenues will qualify under the Federal-Provincial Fiscal Arrangements Act as shared revenues and the bill to the Canadian taxpayer under the heading of equalization will be in the nature of $25 million. That is an account that will have to be taken into consideration.
I want to give the undertaking that regarding the $76 million which will go to the federal government, that money will be spent on and invested in research, resources and development industries in western Canada within the range of commitments given at the western economic opportunities conference.


An hon. Member:: Exploration?


John Napier Turner: Including exploration.


Robert Lorne Stanfield: The minister is withholding the amount he estimates will be required through equalization payments.


John Napier Turner: No, Mr. Speaker. I recognize that in terms of the commitment given by my colleague, the equalization payment for those four months is something the federal taxpayer will have to bear. I might deal with that at a later stage.
What I am saying now about the 50-50 apportionment under this bill applies only to the months of October, November, December and January. That was the limit of the commitment of the Minister of Energy, Mines and Resources (Mr. Macdonald). The Prime Minister (Mr. Trudeau) said in his statement in the House, that the sharing of revenues after January 31 will depend upon what arrangements we can make with the provinces at the forthcoming conference.


John (Jack) Henry Horner: It will not be less than 50 per cent?


John Napier Turner: That is a question to be negotiated. I would not want to prejudice either the federal or provincial position on that subject.


John (Jack) Henry Horner: You can start from that base.


John Napier Turner: I never neglect the words of the hon. member for Crowfoot. This afternoon I

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did not know whether or not he was bearing a message to this House and the government; but I will read his words very carefully.
I now wish to deal with the second subject. The Leader of the Opposition expressed concern about the export charge part of the bill. I heard his tentative suggestion again this morning in the question period. It is important to note that the sharing of the proceeds of the revenue after January 31 has been left open for negotiation at the conference. This is a matter for the two levels of government. It does not directly affect producers, exporters or consumers, but the situation as between governments on the one hand and exporters on the other obviously has to be clarified as soon as possible, whatever the split may be. If an agreement is reached at the conference which is inconsistent with the bill, and other mechanisms are decided on, it is obvious the government will seek to amend the oil export charge act at the next session of parliament accordingly.
I have been asked by the hon. member for Crowfoot, by the hon. member for Waterloo-Cambridge (Mr. Saltsman) and others what the eventual price will be. The Prime Minister set out the principles in his speech to the House setting forth the national oil policy. I declared it again yesterday in general terms. I urge the Leader of the Opposition and the hon. member for Nanaimo-Cowichan-The Islands to read the principles upon consideration of which I think the price ought to be based. But in the final analysis price will represent the source of the revenues which have to be shared as against the burdens which must also be shared in this country through taxation or whatever mechanism may be used.
Today we face a situation-I am speaking of the fiscal relationship between the federal government and the provinces-in which, because of international price distortions imposed by a quasi-monopolistic situation, new benefits and new burdens are experienced in various parts of the country. It is incumbent upon us to achieve some sort of solution whereby a fair return is given to the companies concerned and due recognition is given to the fact that the resources of the provinces are being depleted.
In addition, the federal government must be left in a position where it can equalize the benefits and equalize cost factors affecting consumers, including industrial users, across the country while taking into consideration also the additional equalization burden which falls upon the Canadian taxpayer as a result of additional, uncontemplated revenues going to the producing provinces. These, as the hon. member for Waterloo-Cambridge said this morning, represent about one-third of a dollar for every dollar of revenue going, say, to the province of Alberta. In other words, for every dollar of additional revenue, under the equalization formula the federal taxpayer has a commitment under the fiscal arrangements legislation to distribute 33 cents to the seven provinces receiving equalization payments.
All this has to be worked into an equation which is fair as far as the sharing of benefits is concerned and fair as far as the sharing of costs is concerned. The federal
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taxpayer must not find himself in the position of picking up the tab for the whole exercise. This being the case, the matter becomes one for negotiation between the federal government and the provinces, taking into consideration, obviously, the position of the companies as well.


Robert Lorne Stanfield: You can always come back to parliament.


John Napier Turner: Yes, but I cannot give a commitment as to price to this parliament and yet enable my colleagues, the Prime Minister and the Minister of Energy, Mines and Resources, to attend this conference in a bona fide, meaningful way. I must have a flexible tax mechanism enabling us to enter this conference free and willing to deal with the producing provinces which own the Crown lands in a way that makes sense.


Lincoln MacCauley Alexander: All you need is a proposal, not a bill.


John Napier Turner: Well, the federal government must be able to rely on a mechanism which at least places it in a bargaining position equivalent to that enjoyed by the provincial governments.


Lincoln MacCauley Alexander: You are moving unilaterally.


John Napier Turner: No. The final question put to me, or implied during the debate was whether the government was taking the taxing power away from the elected representatives of the people, here in parliament assembled, and delegating it to some other body, in this case the National Energy Board. Again it must be borne in mind that the situation is volatile and unpredictable. The government must be allowed a reasonable degree of flexibility to deal with the situation. The maximum figure presently allowed in the bill is $4, which I suggest is unrealistic and should be replaced by a figure of $10 which would carry us through in the immediate future.
The figure of $10 would establish the outside parameter of the charge, thus protecting the traditional rights of parliament. The government is not asking for a blank cheque, but for a maximum amount beyond which it cannot go. There are precedents for granting authority of this sort and when we get to clause by clause examination of the bill I shall be glad to cite them. But the actual amount of the export charge after January would be set monthly, not by some advisory committee drawn from the private sector, as one or two members have suggested, but by the governor in council, the cabinet, which is the body made up of elected representatives of the people reporting directly to parliament, subject to a maximum amount, whatever it is, set by the representatives of the people. The governor in council will act on the advice of the National Energy Board which is an independent agency possessing the most expert knowledge in this area.
These are the points I wanted to deal with at the present stage. Obviously, when we get into committee further consultations and discussions as to how to resolve this matter will be necessary. But if I may say so, I believe this has been a damned good debate.


Robert Lorne Stanfield: I rise on a point of order, Mr. Speaker. I wish to say that I expect the bill will go through second reading without difficulty. But it is not to be taken by the Minister of Finance that there is any agreement on our

January 4, 1974
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part to the proposal he is making to bring the $4 up to $10. It should be clearly understood that the passing of the bill on second reading does not involve any agreement on our part to the change.


John Napier Turner: I hope we shall have further consultations about that, but I can assure the Leader of the Opposition that I do not take anything in this House for granted.


John (Jack) Henry Horner: Would the minister permit a question? Since this whole question of oil and the tax has aroused great national interest, will the conference in January be open to the public and will it be televised so that we can take part in it at least as an audience?


John Napier Turner: As I understand it, the Prime Minister is the host of the conference and it is to be an open conference. If the provinces agree, it could be televised, I understand, though I might stand corrected by the Prime Minister. As to whether or not there might be participation by way of a live hot-line, I am not sure this is in the cards.


Thomas Miller Bell: Mr. Speaker, I should like to pose a question for clarification. In response to a question asked this morning by the Leader of the Opposition (Mr. Stanfield), the minister said-I think these were his words-that the charge had to be maintained and there could not be a substitution or a continuation of the excise tax because of international as well as dominion-provincial aspects. He has given us the dominion-provincial reasons and whether they are justifiable remains to be seen; but would he now give us the international reason he needs the charge?


John Napier Turner: Mr. Speaker, it is because of the unpredictability of the international price factor as against the imposition of or voluntary agreement to a price freeze. This is to give us a margin against predictability. It is for that reason I suggested we needed a flexible instrument. The "blues" I received in this respect were a little garbled.


An hon. Member:: We will give you that in about two months.


John Napier Turner: I hope you have a good weekend.


[Stage Direction]
Motion agreed to, bill read the second time and the House went into committee thereon, Mr. McCleave in the chair.
Robert Jardine McCleave: The committee will commence its consideration in respect of clause 2 of the bill.
On Clause 2-Definitions.


William Gordon Ritchie: Mr. Chairman, this bill really establishes two very important departures from established practice and indicates a very drastic and new change in our concept of confederation. I am afraid this will not do anything to decrease the drastic alienation of western Canada. The problem raised is that for the first time, at least to any large extent, non-renewable resources belonging to provinces are to be subject to federal regulation in

order to give what is called by the Minister of Finance a fair oil policy for all of Canada, and at the same time levy an export tax which will not be returned to the provinces in total or will not go through the usual channels of distribution to the companies and eventually to the provinces and to the whole of the country.
Let us consider what is a fair price oil policy. It will consist, so far as the consumers are concerned, of providing the smallest price to be paid by consumers of oil and gas, while still making it economical for oil and gas to flow from the ground. Conversely, the producers will seek the highest price possible. It is fortunate at the moment that this oil and gas is produced in western Canada, because it makes it easier for this administration to continue to discriminate against that part of the country. This direct invasion of provincial rights seems to be unprecedented. This tax bill will do nothing to assuage the feeling that western Canada is cut off from the destiny of the country and that its only value to Canadian confederation is as a resource base.
This past year has seen an increase in the stresses and strains on confederation. These stresses and strains have increased, not diminished. The end of last year saw a call to arms by Alberta and Saskatchewan, with governments of totally different political stripe, to make sure they have control in respect of the price of their own oil. The small possibility which emerged from the Calgary conference that things would be better has obviously become a political mirage. Even at that conference the federal government made little or no promise of substance, even as to regional banking and freight rates. Alberta and Saskatchewan have moved to take new powers unto themselves, and Ottawa is finding this difficult. We may become involved in a constitutional battle. Of course, if the oil and gas were located in central Canada, Ottawa would not have this problem with the legislation which Alberta and Saskatchewan are now enacting.
Perhaps it would be wise to look at the reason the world price of oil has changed and how our Canadian situation fits into the circumstances. There has been a worldwide increase in commodity prices. One cannot really blame the Arabs for increasing the price of their oil. The minister suggested there was a quasi-monopoly situation involved, but in fact they were selling oil for five cents a gallon and finding that it wound up in western Europe selling at $1 a gallon. The price- of their crude oil has increased only 16 per cent in 25 years up until the recent increases. The Shah of Iran, as reported in last week's newspapers, made what I think is a very apt comment when he said the western nations had been buying oil for practically nothing and selling them goods at rates 50 times as high as the increase in the price of oil.
As the minister has said, the price of Arab oil at the end of 1972 was $2.50 a barrel, with much of it ending up in western Europe where consumers were paying over $30 for the resulting gasoline. One cannot really blame the Arabs for asking a higher price for this non-renewable resource. We should perhaps also heed the Shah's statement when he suggested that western civilization should not be burning gas and oil in their cars and homes, but should be conserving it in order that it could be used for
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the manufacture of those things which are so important to our industries.
In addition to the increase in the price of oil there has been an upward revision of the price of renewable and non-renewable resources. I think that is one reason this fair price for oil will create problems. For instance, the world copper price has increased by 300 per cent over the past three years. The price has almost doubled since last year. The prices of lead and zinc have increased respectively by 200 per cent and 800 per cent since 1968. This is much greater than the increase in the price of oil. The price if iron ore has increased by 50 per cent since 1969. The prices of many other commodities have increased substantially in recent years. Nickel prices have increased 50 per cent, grain prices have increased 300 per cent since January, 1972, and lumber prices have increased substantially. In addition, there have been varying degrees of price increases in respect of chemicals which represent over $530 million in exports, with the major source being Ontario and Quebec and oil and gas being the largest base component in their production.
In addition, Mr. Chairman, we export a tremendous amount of electricity, some of which is produced in Ontario by using Alberta gas. Bearing this in mind, should Alberta gas be priced artificially low while Ontario electricity commands the highest possible price on the United States market? It certainly Can be seen that the increase in the price of world commodities and many of our resources has been even greater than the increase in the price of oil and gas. This certainly poses the question: If we are to have a two-price system for oil and gas over a long period of time, particularly when in fact oil and gas can be replaced by other forms of energy in many instances-and the world will have to use these other forms of energy eventually-will this two-price system in the long run be a good thing for Canada?
The export tax applied across the board will, in effect, increase the cost of exports to foreign buyers or, alternatively, reduce the Canadian dollar income to the Canadian producer. If the Canadian domestic price is kept low, the purchasing power of the Canadian dollar within Canada for these products will be increased. Artificially low resource prices within Canada will automatically lead to uneconomical and wasteful use of the resource, particularly in comparison with the situation which exists in the rest of the free world. It also creates an unbudgeted tax bonanza for the federal government at the expense of the purchaser and/or the provincial governments' royalty income and requires a costly bureaucracy to administer it. It does not increase the purchasing power of the Canadian dollar relative to its products or imports.
The export tax on oil has the effect of negating specified prices. It destroys, to some extent, the sanctity of contracts. It is a neat way to increase Canadian income in a period of rising prices and will be just as effective on some of our larger export items such as metals, wood products and grain contracts. But it can work the other way as well. If world prices collapse, will foreign buyers live up to their purchase contracts, or could this start significant unemployment in our mine and forest operations? In a period of rising prices, will foreign buyers live
Oil Export Tax
up to their longer term contracts to supply bauxite or many other products in which we are not self-sufficient?
If a price freeze and export tax is required on oil, it should be equally justified on all other natural resources. A large range of manufactured and semi-manufactured products use oil and gas as one of their major components. Many of these products are exported. If an export tax and price freeze is applied to oil and gas, then it should be applicable to those products which will be subsidized by cheap Canadian energy and sub-stock. Sudden change in the value of base products clearly has an upsetting effect on the economy. Sudden changes create dislocation and require faster adjustments than is humanly possible. I think, therefore, that in the long term the price of oil and gas must approach world prices unless we wish to accept considerable retaliation by our trading partners and create great problems internally.
The price freeze, with all the uncertainty and the problems between the federal and provincial governments, is certainly creating problems for the future in the matter of supply. It is probably only a natural response that most consumers feel there are unlimited supplies of oil and gas at ever decreasing prices. It is wise to look at what the United States did 19 years ago which brought them into this position. At that time prices were placed on products under the guise of providing assistance to consumers. Now it has become apparent that this was a great disservice to the consumer. The incentive for producers to explore was taken away and additional reserves did not keep pace with demand. Wasteful use of energy through the use of automobiles, and so on, permeated the North American economy.
Contrary to what Canada is doing, the United States is taking off price restraints and allowing the market to set prices on new supplies. Record exploration dollars are flowing back to help find the much needed energy. Here in Canada we are following the example of the American administration of 19 years ago. This would make more sense if we had been steadily increasing our reserves, but the last three years have shown a decrease in conventional oil resources by half a billion barrels a year. There is certain to be, until the provincial problems are settled, a very unsatisfactory situation in the structure of the industry.
Then, again, the Mackenzie Valley pipeline must be in a state of great uncertainty. It is generally considered that this would be beneficial to Canada but requires the joint co-operation of the United States and the Canadian governments. But the unilateral application of government must certainly sour our external relations and make the possibility of coming to an agreement on the pipeline much more difficult. It will obviously encourage the Americans to think that the Prime Minister (Mr. Trudeau) and the Minister of Finance (Mr. Turner) are not very sincere and do not have any great conviction that the Mackenzie Valley pipeline could or should be built. This will perpetuate the view of those on the United States side who believe that oil out of Prudhoe Bay should be moved under the guise of the United States flag. Furthermore, with the possible formation of the national petroleum company, all the large integrated companies such as Imperial, Shell, and so on, are a possible takeover. Until

January 4, 1974
Oil Export Tax
the actual framework is decided, the fear of possible takeover is present.
It is certainly small wonder that investment brokers do not recommend the purchasing of stock of the senior integrated companies because they are prevented from going outside Canada, but recommend those small Canadian companies which have acreages outside Canada and which are not affected by the political quagmire in which Canada finds itself. The North Sea especially is attractive. It seems significant, also, that most of these small companies have more Canadian money in them than the large integrated companies which are precluded from going outside Canada. The small company is able to operate outside Canada and indeed around the world. It seems ironic, at a time when we are complaining about the amount of foreign investment in our resource industry, that it is more practical for a Canadian to invest his money in a Canadian company operating outside this country than it is to invest in a company operating inside the country.
I now turn to the application of this tax and the stated intention of the government to keep the price of oil and gas below the world average in order to prevent hardship throughout Canada. However, there are other sides to the coin. Premier Blakeney showed one of these, as reported in a Globe and Mail article, when he pointed out that Saskatchewan, as opposed to Alberta, on the whole is a have-not province except that it does have some extra oil. He points out that as consumers-and the same could be said for Alberta-the people of the province of Saskatchewan depend on the state of the world market for the availability and pricing of commodities such as farm machinery, automobiles, lumber, fruit, vegetables, and so on, which are required by a province with a severe climate.
But this government in Ottawa is saying that it is not right that the province of Saskatchewan should sell its oil at the world market price, and it should be sold at a price related to cost. If Canada is to have a price for oil which in the long run would be below the world price, then this involves really the setting of a political price for gas and oil. If a government must set the price, it will be set on the political pressure of the day and not on any valid market price. A central, national marketing agency for oil will find itself torn between the consumer, who will want oil at as cheap a price as possible, and the producer who naturally will want as high a price as possible. As well as that, conflicts between the various regions of Canada will continue to arise and will become more serious. If these conflicts are not resolved, confederation will become increasingly an empty drum.
I suggest that in the future we should handle so-called windfall profits through a type of excess profits tax. Such a mechanism would allow for further bona fide exploration funds which we need very badly. The minister has said that he has $76 million to give for exploration. I suggest that the federal government is not involved in the exploration of oil and that $76 million will not get it very far. My proposal would not disturb the royalty system according to which the provinces obtain their income and, above all, it would include all the resource companies and all the gold companies which have seen the price of their

product go up three times. It would include the copper companies which have seen the price of their product go up three times, the zinc companies which have seen the price of their product go up eight times, as well as the manufacturing industries which are also making windfall profits as a result of the situation in the world.
Furthermore, if this suggestion were adopted, the tax would not carry the stigma of the present export tax which seems to be directed at one or two of the prairie provinces and these provinces will not be the only ones to carry the brunt of providing cheap oil and gas for Canadian consumers.


Alfred Pullen Gleave: Mr. Chairman, I would like to start by saying that I wondered, when I read the statements of the Prime Minister, of the Minister of Energy, Mines and Resources and of the Minister of Justice, who is from Saskatchewan, whether this government by accident or design is heading toward a confrontation with the provinces. Then, when I saw the proposals in this bill which quite deliberately infringe upon the resource base of the provinces in the proposed charges to be levied on oil from the provinces, I wondered if the stage is being set rather deliberately for the meeting between the first ministers of the provinces and the Prime Minister in the future.
The Premier of Saskatchewan-part of which province I have the honour to represent-felt it necessary to state on the public media the position of that province in respect of the oil resources in Saskatchewan. He did not adopt an attitude of confrontation, or an aggressive or belligerent attitude as did the Prime Minister in Vancouc-er and as did the Minister of Justice when he had the opportunity. In fact, the Premier of Saskatchewan said:
-I want to talk to you about our new oil policy for Saskatchewan.
Before I do let me first say that the Saskatchewan government approves of most of the moves toward a national energy policy announced late last week by the federal government.
We support extension of the oil pipeline to Montreal-
We support the intent of the federal government to hold down the price for Canadian consumers of western Canadian crude.
We do not, however, accept the federal government's division of proceeds from the export tax which gives to the producing provinces only half of the windfall profits on exported oil.
I quote this for the benefit of the members of this committee because I think that the Minister of Finance and those shepherding the bill may not be aware of this fact. The Premier of Saskatchewan continued:
Oil and gas are resources that clearly belong to the provinces. It has been our position from the start that the full proceeds of the export tax, which really represent windfall profits, must be returned to the owners of the resource, the producing provinces.
This is a pretty clear statement. If you look at the bill you will see different sections relating to the export charge which state that those who deliver or handle the fuel shall do so and so, shall keep certain records and do certain things. However, when it comes to what is to be returned to the provinces, the bill states, as the hon. member for Crowfoot mentioned, that the federal government may return half to the province. There is the difference, Mr. Chairman. The premier went on to say:
Our new oil policy ... is to conserve oil for Saskatchewan consumers in the future, to capture for the people of Saskatche-
January 4, 1974

wan the full benefit of all future windfall profits and to encourage further exploration and research in Saskatchewan.
In a statement to the House on December 6, the Prime Minister said that the exploration company would undertake exploration in the Northwest Territories and in the provinces. I wonder whether the federal government will set up an exploration agency which will turn to the provinces of Saskatchewan, Alberta, British Columbia and Manitoba and take out a licence to explore for oil in those provinces. Is that the intention? There are many loose ends lying around here. It was pointed out to the Minister of Finance by the Leader of the Official Opposition and by the energy spokesman for our party in the initial stages of discussion on second reading-


Robert Jardine McCleave: Order, please. I wonder if the hon. member would not agree that this is a good point at which to recognize that it is four o'clock. If so, and I thank the hon. member for his co-operation, it is my duty to rise, report progress and request leave to consider the bill again at the next sitting of the House.
Progress reported.


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


Mr. Reid:: Mr. Speaker, I believe there have been consultations and agreement to take Bill C-46 standing in the name of the hon. member for Surrey-White Rock (Mr. Mather).



PRIVATE MEMBERS' PUBLIC BILLS


Mr. Barry Mather (Surrey-White Rock) moved: that Bill C-46, to amend the Criminal Code (cruelty to animals), be read the second time and referred to the Standing Committee on Justice and Legal Affairs.
He said: Mr. Speaker, Bill C-46 now before the House is one which I introduced five or six years ago, and the government has taken some action along the lines proposed in it. Actually, I had thought of dropping the bill, giving credit to the government for acting in that way and trying to take a little credit myself for inspiring that action. However, as one active in the parliamentary animal welfare committee I am in contact with the Animal Welfare Federation of Canada and I have found from them, from the SPCA and generally speaking from the humane movement throughout the country that there
Cruelty to Animals
is still need for action in line with what this bill proposes. As a result, I have left the bill on the order paper and I am grateful for having these few minutes to explain why I think that at least the subject matter of the bill should be referred to a standing committee for further consideration.
The explanatory notes to the bill state:
The purpose of this bill is to enable a magistrate who has imposed a sentence upon a person convicted of an offence of cruelty to animals to prohibit also such person from owning, harbouring or otherwise possessing an animal or a bird for a stated period of time as part of the sentence.
At present, magistrates are limited to fining or jailing any person convicted of cruelty to animals. The vast majority of magistrates are most reluctant to ever impose a jail sentence for this type of crime.
I have already given some recognition to the fact that the government has taken steps in line with this private member's bill. Actually, this was done when the Prime Minister (Mr. Trudeau) was minister of justice. It would have done a great deal of good except for the fact that the government qualified what was proposed to the extent that persons found guilty of cruelty to animals suffer no prohibition of ownership of animals or birds until they have been convicted for a second time. The power of prohibiting these people from animal ownership is given to magistrates only on a second offence. According to the SPCA and the humane societies, this makes very little sense and I am told that some of the courts are also unhappy with the present legislation. Magistrates will rarely jail a person for animal cruelty to animals. Fines are a most inequitable manner of handing out punishment. A large corporation such as a multimillion-dollar railway company can be, and in fact has been, involved in some phase of cruelty to animals and fined only $100. A pet shop may be fined $50.
The key to curtailing cruelty to animals in this area is to give power to the magistrates to prohibit ownership of pets. For the law to continue to allow the guilty to own animals or birds, thus letting them be mistreated for a further period, is very wrong. As you know, Mr. Speaker, the courts are clogged with various other types of cases. With their limited resources it is most difficult for the humane societies of the country to bring persons to court; and when a person is brought to court he may be released with a warning not to commit the offence again.
It is true that in British Columbia and Ontario under other legislation there is power to remove a mistreated bird or animal from ownership for a limited period of time. But while this may be some help, it does very little to stop the cruelty that goes on, some of it of a rather gruesome nature. What is wanted by the animal welfare movement is a clear provision in the Criminal Code, effective right across the nation, which will on a first offence prohibit ownership or possession of animals or birds for a period of at least, I would say, two years.
There is every protection now in the law for the convicted party to appeal. His rights are well protected in the ordinary way under the present judicial system. Prohibition of ownership is the one effective and exemplary punishment which will ease the suffering of so many birds and animals that are in captivity.
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Cruelty to Animals
I would like to conclude by drawing the attention of hon. members to the existence of the parliamentary animal welfare committee. This is a voluntary, ad hoc group made up of members of both houses and of all parties. We meet from time to time to discuss matters such as those touched upon in this bill. I would hope that many hon. members will introduce themselves to the work of this committee so that from time to time we may all gain factual and useful information on this important subject.
In conclusion, I urge hon. members at least to permit the subject matter of this bill to be referred to a standing committee, presumably the justice and legal affairs committee, where it can be examined in detail.


Mrs. Albanie Morin (Louis-Hebert):: Mr. Speaker, it seems rather ironic that I, who introduced an amendment to Bill C-2, wish to take part in the debate on Bill C-46 aimed at preventing cruelty to animals.
I would like at this point to congratulate the hon. member for Surrey-White Rock (Mr. Mather) for introducing Bill C-46. However I think we should undertake the education of society at large which is rather indifferent about charges laid as regards cruelty to animals.
I more particularly refer to clause 1 of the bill. It is quite commendable, as I said, and I quote:
(7) -the Court may, if it thinks fit, prohibit such person from owning, harbouring, or otherwise possessing any animal, bird, domestic or otherwise, for a period not exceeding two months-
This is the case of a person who has been sentenced previously.
In fact, who will ever go to the police to complain that such a person, previously convicted of an offence, has an animal or a bird at home? It takes a dreamer to introduce such a clause, unless the public is really concerned about eliminating cruelty to animals.
I must say again that I am fully in agreement with the purpose of the bill introduced by the hon. member for Surrey-White Rock. I hope this bill will not end up the way of most private bills, but be referred to the Standing Committee on Justice and Legal Affairs.
It is interesting to note the way people react the cruelty to animals. We have daily evidence of this. On the highways of the province of Quebec, on the great many occasions when an animal has just been hit, how many people will stop to give assistance to the wounded animal? More often than not, a second vehicle fails to stop, runs over the animal and puts it out of its misery.
I now come back to Bill C-46. It is all very well to pass legislation to prevent cruelty but if nobody bothers to lodge a complaint against those who are cruel to animals what is going to be the use of this legislation?
I remember a few years ago going to the country where I happened to see a horse which was blind in one eye. I asked neighbours how come that poor animal had only one eye. I was simply told his owner got mad one day and struck it in the eye. I noted with great stupefaction that no one among that farmer's neighbours had filed a complaint with the police department to have action taken against that farmer who had been cruel to his horse.

Another time in Quebec City I heard about two children who had been very cruel to a cat. They had poured gasoline over the poor cat, then with a match set him on fire and the poor cat was burnt alive. The parents of those children never stopped to think about the poor animal. So once again this Bill C-46 is very commendable but people would have to be educated, particularly children.
I would not want to spend undue time on this because I would like very much this bill to be referred to the Committee on Justice and Legal Affairs. I now stop at clause 1(8) where one can read:
(8) Everyone who owns, harbours or otherwise possesses any animal or bird, domestic or otherwise, during a period for which he is under prohibition as provided is guilty of an offence punishable on summary conviction-
Once again how is this provision going to be applied? If people do not even care about helping injured animals on roads or in farm yards how are the provisions of such a bill going to be enforced? I leave that matter to the hon. member's consideration, and again I congratulate him for aiming at preventing cruelty to animals, but in my opinion the enforcement of the bill seems a little questionable.


Mr. Walter Smith (Saint-Jean):: Mr. Speaker, the subject matter of Bill C-46 is one which is dear to the heart, I am sure, of every member of the House. Indeed, it is a subject matter which can be of far more significance than one might ordinarily ascribe to it. I believe a good deal of the essential character of any society can be learned from an examination of that society's laws with respect to the treatment of animals. If a society, through its laws on the subject, demonstrates a deep respect for the well-being of animals, it can be a reliable indicator that that society is well advanced in human values. The degree of sensitivity and humanity of any society can, in significant measure, be judged by its laws on the treatment of animals. We recall the sage test of simpler times: You may know a good deal of a man's character by the way in which he treats his horses.
Fortunately, I believe our present Canadian law on the treatment of animals reflects well upon Canadian society. Our concerns in this respect, as reflected in our laws in this regard, are well advanced. Our criminal law prohibits anyone from causing or permitting unnecessary pain or suffering or injury to animals or birds; it prohibits abandoning animals in distress, or wilfully neglecting to provide suitable accommodation, food, care and shelter; it prohibits gaming with animals, animal fights for gaming purposes, and so on.
Also, I believe it added appreciably to the law when four years ago the Criminal Code was amended by this government to empower a judge to prohibit a person from owning or possessing an animal or a bird if that person had demonstrated vicious or cruel conduct toward animals. The amendments contained in Bill C-46 would not in themselves substantially alter the current state of the law but would bring about some minor changes. I think none of us would want to argue with the general purport of the bill to strengthen the sanction and deterrence against abuse to animals. In so far as these amend-
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ments would affect that general purport, they would receive my wholehearted support. I believe there is some merit in some aspects of the bill, but unfortunately it seems to me that merit is combined with a principle which is essentially unacceptable.
I can see some merit in permitting a judge to order that a person be prohibited from owning or having in his custody an animal or a bird if that person is convicted of cruelty to the animal or the bird. At present, the law allows the judge to prohibit a person from owning or possessing an animal or a bird only on a second, third, fourth or subsequent conviction for cruelty. There may be some merit in giving a judge the power to prohibit ownership or possession by a person upon his first conviction, but combined with that I see in the bill a principle which always has been fraught with danger and one in respect of which we should always in this House proceed only with the greatest care and caution, and that is the principle of minimum penalties.
Under the present law, if a man is convicted for a second time of cruelty to an animal the judge may prohibit that person from owning or possessing an animal for a period of up to two years. And if the person who is the subject of a prohibition order of that kind breaches that order by taking possession or ownership of an animal while under prohibition, then he is guilty of an additional offence and may be fined up to $500 and imprisoned for a period of up to six months. You will note that the present penalty for disregarding an order of prohibition made by a judge is a fine of up to $500 and/or imprisonment of up to six months. In both cases the penalty is defined in terms of maximum; that is, a maximum fine of $500 and a maximum term of imprisonment of six months.
This is the case with all summary conviction offences. Every summary conviction offence under the Criminal Code, including this summary conviction offence-that is, cruelty to animals-carries with it the penalty of a fine up to a maximum of $500 and/or imprisonment up to a maximum of six months. The bill before the House would alter the penalty on breach of a prohibition order against ownership after conviction. It would impose a minimum fine of $250 and would empower the judge to impose a term of imprisonment for a minimum period of three months. In other words, it would remove the discretion which is currently vested in the judge. If he found the man guilty, he would have to fine him at least $250, and if he imposed a term of imprisonment it would have to be for at least three months. That would be the case, totally irrespective of the circumstances surrounding the commission of the crime.
One can readily see that this amendment removes the flexibility which traditionally is vested in the judge, to fit the sentence to the crime. The seriousness of the crime can range all the way from a rather slight and technical breach of the law to a blatant and horrendous disregard for it. By and large, our law has adopted the principle of permitting the maximum flexibility for judges to impose a sentence which fits the seriousness of the crime. Under the present law we say to the court, in effect, that if a person is convicted of breaching an order of prohibition against owning an animal, it may impose a fine on that
Cruelty to Animals
person of whatever amount it considers to be appropriate, given the seriousness of the offence, and may impose a term of imprisonment from one day, in the case of less serious circumstances, up to as much as six months in the most serious circumstances.
Throughout, it is left to the court to determine what the sentence should be in accordance with the seriousness and the circumstances of the offence. And throughout, of course, the decision by the court is subject to appeal either by the Crown or by the aggrieved person. It is this principle which would be altered if Bill C-46 in its present form were to be approved. It would remove the flexibility in the court to fit the sentence to the seriousness of the crime. It would force the court to impose a minimum sentence of $250 and, in the case of imprisonment, to a minimum term of three months. That sentence may in a particular case be far too severe. In yet another case and in other circumstances it may be far too lenient. By and large and in a general kind of way we have always resisted building into our criminal law precisely defined penalties, as opposed to defining certain parameters within which our courts are left with discretion to be exercised according to the seriousness of the particular offence.
As to the proposed penalty for breach of a prohibition order with respect to this particular crime, I seriously question whether a minimum penalty is really justified. Without in any way condoning cruelty to animals, which is a reprehensible act and ought always to be subject to punishment, I think it is necessary to keep the offence in proper perspective. If a minimum penalty is called for here, then the penalty for many other seriously anti-social acts would have to be reconsidered.
It may display less a faith than is justified in the good sense of the judiciary of our country to prescribe minimum penalties for a situation where there has been flagrant disregard of an order of prohibition made by the court. Indeed, I believe that if we were to accept the principle of minimum penalties with respect to this particular crime, that is, with respect to the crime of cruelty to animals, we would have to reassess the penalties that apply to all summary conviction offences under the Criminal Code. I do not think one could justify the imposition of minimum fines and minimum terms of imprisonment with respect to this particular crime and not have similar minimums in respect of other summary conviction offences which may indeed be more serious than this one. It is for this reason that I say before we accept this principle in the bill we ought to have a full and complete understanding of how it affects other sections of the Criminal Code and other offences.
Let me illustrate my point, Mr. Speaker, with but one example. Under section 245 it is an offence punishable by summary conviction to assault someone else. The penalty for common assault is a fine of up to $500 and a term of imprisonment of up to six months. There is no minimum fine and no minimum period of imprisonment prescribed by the Criminal Code for an assault. I question whether it would be defensible to have a minimum fine and a minimum term of imprisonment for breach of a prohibition order against owning an animal and not have a similar minimum or, indeed, a lesser penalty for assaulting another human being. This is the kind of conflict which I
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Cruelty to Animals
see would be introduced into the sentencing provisions of the Criminal Code if Bill C-46 as presently drafted were to pass this House.
That is why I said at the outset, Mr. Speaker, that while I see some merit in the bill and while I laud the intention of the proposed amendment, I find some portions of it, the one providing minimum penalties in particular, to be quite unacceptable. Before accepting the proposition of a minimum penalty in the case of a prohibition, I think all members would want to see how this would affect other summary conviction offences in the Criminal Code.


Barry Mather: Mr. Speaker, would the hon. member permit a question? Having in mind the fact that the hon. member has found merit in part of this proposal and that he would like to see some aspects of it studied further, would he be prepared to allow the subject matter of this bill to proceed to committee for that further examination?


Walter Bernard Smith: Mr. Speaker, I could agree to that.


Mr. Jack Cullen (Sarnia-Lambton):: Mr. Speaker, I commend the hon. member for Surrey-White Rock (Mr. Mather) for the legislation he has brought forward. We have come to expect from the hon. member legislation and motions to do with the safety of motor vehicles and anti-smoking campaigns. Today the hon. member has brought forward Bill C-46 which seeks to provide an additional penalty to be added under section 402 of the Criminal Code with respect to people who are cruel to animals. Frankly, I am not as hung up on the problem of a minimum penalty as my colleague seems to be. Actually, the individual with whom we are concerned already will have had one chance. He already will have been convicted and fined a certain amount or given a certain sentence in accordance with the facts in the first instance.
I think it is proper to provide for maximum penalties so that judges and magistrates may exercise the greatest discretion in determining the penalty to be imposed for an offence. Once an individual has been found guilty, and disobeys a court order, he may be subject to further penalty. If an individual disobeys an order of a civil court, he may be held in contempt of court. Here we are speaking of an individual who violates a specific court order which requires him not to do something specific. He has already committed a criminal offence. He has already had his first opportunity. He has been given a trial and the discretion of the court has been exercised. In all probability, as the hon. member suggested, the result was a fine. Notwithstanding being given all these opportunities in the first instance, he then violates or in effect contravenes the order or judgment of the court and he is now faced with a minimum fine.
The amendment proposes that the law says, in effect, to the individual, "You have had your first chance. You will have your second chance, but in that situation you know what you will face. You will not face a judge who is lenient, who does not like animals or cannot be bothered with this kind of thing." No judge or magistrate will be able to fine someone $1 or $10 or say, "Don't let it happen again." The individual knows when he contravenes the

order that he will face a particular minimum fine. The judge has no option; he must at least impose that minimum fine.
If this had appeared in section 7 of the amendment I would have agreed, but when it appears in the second section where the individual has already had his opportunity, I think it is appropriate that this particular sentence should apply. I do not know that the analogy is complete, but I know that in the days when I used to practice law and defend people on impaired driving charges, a magistrate had a particular discretion on the first offence: on the second offence it was an automatic jail term. I remember on one occasion hoping that my client would not be convicted of impaired driving because drunk driving was a first offence and he would only go to jail for seven days, whereas on a second conviction for impaired driving he would have gone to jail for 14 days. My point is that on the second offence there is a good case to be made for establishing a minimum penalty.
It bespeaks well of this country that we have in the Criminal Code a section dealing with individuals who commit the offence of cruelty to animals or birds: from the explanatory notes this goes from (a) to (g) and applies to people who do various things wilfully, without reasonable excuse, and so on, and the action they take in one form or another which results in pain or suffering to animals. It bespeaks well that we have in our Criminal Code provisions to protect animals that are unable to protect themselves or are not able to speak on their own behalf. The country is right in having this kind of legislation in the Criminal Code.
I think the amendment proposed by the hon. member is good. For my part, I would like to see more discretion in respect of offences of this nature where an individual who has done something such as abusing an animal would not have the privilege or the opportunity of having an animal in his possession for a certain period of time. Where a person has committed vandalism, that individual should repair the vandalism, be it writing on a school wall, a broken window or vandalism to any public building. The magistrate should have the opportunity to say to the individual that he must Testify the damage he has done. That seems to be the way the law is heading.
I have yet to learn of this type of punishment being criticized by the general public. I know we read more of this in the United States. When a person is convicted of drunk driving, the judge may indicate that he must attent a school of safe driving for the next year or two and lectures on why persons should not mix drinking and driving. That is a much more effective penalty than simply paying a fine. In a positive way judges are reacting to what society is demanding. The individual must not only do these things which are punitive but he must learn something.
I remember reading a placard in front of a Presbyterian church in my area. Different sayings are put up from day to day. On one occasion it read, "If you would learn something, teach it to others." That is the type of punishment the hon. member is suggesting under amendments (7) and (8) to section 402 of the Criminal Code. I feel that when an individual has committed an offence and is guilty of committing a second offence violating a court
January 4, 1974

order, he should know at the outset he is facing a minimum penalty or a minimum sentence. He knows he starts from there and works down, if you will.
I commend the hon. member. I know there are others who want to speak on this bill. I thought I should make the point that I am happy we have this legislation before us. I am pleased to see this type of amendment. Whether the bill or the subject matter of the bill goes to the committee does not bother me too much. I see some hon. members on the edge of their seats waiting to participate in this very important debate. Bearing this in mind, I will resume my seat.


Mr. Albert Bechard (Bonaventure-fles de la Madeleine):: Mr. Speaker, I should like to congratulate the hon. member for Surrey-White Rock (Mr. Mather) for his fine initiative, which is not the first as regards this issue, and I should also like to make a few comments on Bill C-46 sponsored by the hon. member for Surrey-White Rock during the few minutes allotted to me.
At this stage, Mr. Speaker, it would be appropriate to remind the House of the scope of Criminal Code section 402 to which the bill being examined this afternoon refers. Section 402 of the Criminal Code stipulates that:
(1)	Every one commits an offence who
(a)	wilfully causes or, being the owner, wilfully permits to be caused unnecessary pain, suffering or injury to an animal or bird,
(b)	by wilful neglect causes damage or injury to animals or birds while they are being driven or conveyed,
(c)	being the owner or the person having the custody or control of a domestic animal or bird or an animal or bird wild by nature that is in captivity, abandons it in distress or wilfully neglects or fails to provide suitable and adequate food, water, shelter and care for it,
(d)	in any manner encourages, aids or assists at the fighting or baiting of animals or birds,
(e)	wilfully, without reasonable excuse, administers a poisonous or injurious drug or substance to a domestic animal or bird or an animal or bird wild by nature that is kept in captivity or being the owner of such an animal or bird, wilfully permits a poisonous or injurious drug or substance to be administered to it,
(f)	promotes, arranges, conducts, assists in, receives money for, or takes part in a meeting, competition, exhibition, pastime, practice, display, or event at or in the course of which captive birds are liberated by hand, trap, contrivance or any other means for the purpose of being shot when they are liberated, or
Mr. Speaker, although I may seem to wish to extend the debate on this matter, I believe that it is important and relevant to know what section 402 stipulates since the hon. member for Surrey-White Rock wants us to amend it. I continue the quotation:
(g)	being the owner, occupier, or person in charge of any premises, permits the premises or any part thereof to be used for a purpose mentioned in paragraph (f).
(2)	Every one who commits an offence under subsection (1) is guilty of an offence punishable on summary conviction.
Consequently, Mr. Speaker, anyone found guilty of offences such as those I have just mentioned and as described under Criminal Code section 402 is guilty of a criminal offence and punishable on summary conviction. This means, therefore, that in fact anyone found guilty of one of the acts described under section 402 can be con-
Cruelty to Animals
demned to a fine of up to $500, to six months in jail or both.
In addition, under the law as it presently stands, the judge who hears the case has the power to prohibit a person convicted of an offence for a second or any subsequent time from owning or having custody of a bird or animal. The bill before us would change the present law in two respects. One of these proposed changes is of minor concern but the other, I submit, has broader implications and should be fully understood before receiving the approval of this august House. Before discussing the two proposed changes in detail I wish briefly to comment on the history of the current law.
Hon. members will recall that prior to 1969 a judge, on convicting a person of cruelty to an animal or a bird, had no power to prohibit that person from continuing to own or keep animals or birds. Even though a person might have been convicted three or four times of cruelty to an animal or a bird, even though a person might be notorious for his mistreatment of animals or birds, a judge had no power to stop such a person from owning or keeping an animal. In order to rectify this situation an amendment was made to the Criminal Code in 1969. The then minister of justice, under whom I had the honour to work, stated before the Standing Committee on Justice and Legal Affairs on March 18, 1969:
The purpose here is to give us some more effective way of curbing cruelty to animals. Prosecution in itself appears not to have stopped convicted persons pursuing the practice of being cruel to animals. We want the power to prohibit anybody who has been convicted on two or more occasions from owning an animal.
Perhaps it is due to the hard work of the hon. member for Surrey-White Rock (Mr. Mather) that the then minister of justice, now Minister of Finance (Mr. Turner), put forward that amendment to the Criminal Code. Parliament accepted the proposition and amended the Criminal Code accordingly. I understand there is no jurisprudence since the amendment to section 402 which would indicate that the amendment has not been sufficient to achieve its purpose.
As the law now stands, then, anyone convicted of cruelty to an animal or a bird can be fined an amount up to $500. In addition, the judge may order the person convicted to be jailed for up to six months. In the case of a second offence, the judge may again fine the defendant up to $500 and impose a prison term of up to six months. In addition, the judge may prohibit that person from owning or having in his custody an animal or a bird for a period of up to two years.
How would the bill we are discussing affect the present law? In the first place, it would empower a judge to make an order prohibiting a person from owning or having in his custody an animal or a bird for a period not exceeding two months, on a first conviction, not exceeding six months on a second conviction, and not exceeding two years on a third or subsequent conviction. In other words, the first proposed amendment would permit a judge to prohibit on a first conviction rather than on only a second or subsequent conviction. Second, it would precisely

January 4, 1974
Cruelty to Animals
define the period of prohibition, whereas the present law empowers the judge to prohibit for whatever period he considers proper up to two years. In addition, the bill would provide for a fine of not less than $250 or imprisonment for not less than three months, or both, for breach of a prohibition order.
The first of these amendments is, I think, of somewhat small significance. Of far greater significance is the limitation which would be imposed upon a judge in ordering a period of prohibition. Instead of the judge having leeway up to as much as two years, he would by virtue of the passage of this bill be restricted to prohibiting the person from owning an animal or a bird for not more than six months on a second conviction, not more than two years on a third conviction, and not more than two months on a first conviction. The question here is whether it is desirable to impose this kind of limitation on the discretion of the judge.
Let me give an example to show the application of the present law and how it would differ if it were amended by Bill C-46. Supposing a man were convicted today of cruelty to his dog because he kicked it: under the present law the judge would probably fine the man and warn him that if he was convicted again he would be liable to a fine or a term of imprisonment, and in addition could be prohibited from owning an animal or a bird for a period of up to two years. Supposing, then, three months later the same man was again convicted for having similarly beaten the dog to within an inch of its life: under the present law, not amended by Bill C-46, the judge would have the power to fine that man up to $500, place him in prison for a period of up to six months, and in addition he would have the power to prohibit the man from owning a dog for up to two years. That is as the law stands at present.
Under the amendment proposed by the hon. member in Bill C-46, on a second conviction of that man for beating his dog the judge would continue to have the power to fine him $500 and impose a term of imprisonment, but he would be limited to prohibiting the man from owning an animal for a period of six months only. No matter how cruel and vicious the attack on the second occasion, the judge, under this amendment, would be limited to prohibiting that person from owning an animal for six months. Under the present law the judge would have the power to prohibit him from owning an animal for up to two years. In view of what I have just pointed out, I do not know what purpose Bill C-46 would serve. That is why I question whether he would want to, in effect, tie the hands of the judge in this way in respect of a second conviction.
Of far more consequence than either of these results that would flow from the amendment proposed by the hon. member for Surrey-White Rock in Bill C-46 is the proposal to provide for a minimum fine and a minimum term of imprisonment for breach of an order of prohibition. I say this is of far more significance because it introduces into the Criminal Code in respect of this offence a minimum fine and a minimum term of imprisonment. Having done this, you remove any discretion from the judge who has heard the case. I think this is the kind of change which ought to be fully understood and completely considered by the House before the principle is accepted.

Mr. Speaker, during the few seconds left I would like to remind the House that the debate on the bill introduced by the member for Surrey-White Rock reminds me how you can go too far when you sympathize exceedingly with animals' plight. I do not mean to speak against the hon. member's bill or that I am in favour of cruelty to animals. On the contrary, I have at home a few animals which I would not like to be mistreated and which I would never dare to mistreat myself.
However I would remind the House how emotions may be exaggerated when an animal is being mistreated or killed. This reminds me of the foolish propaganda made in connection with the so-called killing and in fact the hunting of seals in the Gulf of St. Lawrence. Totally rigged films were shown as propaganda throughout Europe showing how Canadians could be cruel to animals. And I do say that those films were totally rigged. I am very much involved in this since in my constituency as in several parts of the Maritimes seal hunting is each spring a welcome crop which brings money into the pockets of the poor fishermen who lived through winter thanks to unemployment benefits and social welfare.
You know how harmful this has been to the population of the Maritime provinces and mainly of the Magdalen Islands. This is why I do not want to go overboard about hunting and about whatever can be done to animals because if we sympathize more with animals than with people hunters will no longer be allowed to shoot a moose or to go fishing and catch a good salmon.


The Acting Speaker (Mr. Boulanger):: The time provided for the consideration of private members' business has expired. It being five o'clock, this House stands adjourned until two o'clock next Monday pursuant to Standing Order.
At five o'clock, the House adjourned, without question put, pursuant to Standing Order.

Monday, January 7, 1974