1974-11-07

[Stage Direction]
Third report of Standing Joint Committee on Regulations and other Statutory Instruments-Mr. McCleave.
[Editor's Note: For text of above report, see today's Votes and Proceedings.]

Mr. James A. McGrath (St. John's East):: Mr. Speaker, I rise on a question of urgent and pressing necessity in accordance with the provisions of Standing Order 43. The consumer price index released today by Statistics Canada shows the largest September to October change in 24 years. Bread, milk and sugar combined to push the food component up by 1.4 per cent. On September 4, 1973, the Prime Minister introduced a program to subsidize domestic wheat to keep down the price of bread and a five-cent per quart subsidy to keep down the price of milk. In view of the dietary importance of milk and bread and in order to ensure that Canadians on lower and fixed incomes will not be deprived of these two vital elements of an adequate diet, I move, seconded by the hon. member for Peace River (Mr. Baldwin):
That in the opinion of this House the government should give immediate consideration to introduce measures to control the spiralling cost of bread and milk in Canada.


Mr. Speaker:: The House has heard the terms of the motion being proposed pursuant to Standing Order 43. It cannot be debated without the unanimous consent of the House. Is there unanimous consent?


Some hon. Members:: No.


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



ORAL QUESTION PERIOD


Hon. Robert L. Stanfield (Leader of the Opposition):: Mr. Speaker, my question is directed to the Acting Prime Minister. It being reliably reported that the departments of government, and perhaps as well ministers, are receiving reports of Statistics Canada sometimes several days in advance of their being made public, I should like to ask the Acting Prime Minister whether he has any comment to make on this report and whether he will give the House assurance that any such practice will be discontinued immediately?


Hon. Mitchell Sharp (Acting Prime Minister):: Mr. Speaker, may I make one general comment and then ask my colleague the Minister of Industry, Trade and Commerce to answer more fully. My opening comment is that this is not a new policy. It is a policy which has existed since the 1950's and was followed, for example, by the administration of the right hon. member for Prince Albert.


Mr. Diefenbaker:: Mr. Speaker, I rise on a question of privilege to say to the minister that his statement is false. Documents were delivered to the press and to the public on the same day as received and were not kept under cover for several days as is the practice of the present administration.


Hon.. Alastair Gillespie (Minister of Industry, Trade and Commerce):: Mr. Speaker, I should like to tell the House that that is not my information.


John George Diefenbaker: Your information is generally wrong. We have found that out.


Mr. Gillespie:: We have made full and very extensive inquiries and have been assured that this is a long-term practice and I believe for very good reasons. The general public expects ministers to be fully informed of selected indicators of the country's economic performance.


John George Diefenbaker: That is what you have been asleep on.


Alastair William Gillespie: The government at the same time is continually reviewing the needs of departments in this connection and for that reason we have a departmental committee examining the practice at this time.

November 7, 1974
Oral Questions


ALLEGATION ADVANCE INFORMATION AVAILABLE TO MINISTERS-REFLECTION ON CREDIBILITY OF ISSUING AGENCY
Robert Lorne Stanfield: Mr. Speaker, I have a further question for the Acting Prime Minister as the acting spokesman for the government here today. I did not ask whether this had gone on before. We all know there used to be conflicts of interest in bygone days which are no longer tolerated. I ask the Acting Prime Minister whether in fact this is taking place and whether he will give the House assurance that it will be discontinued because its existence in modern day conditions, in view of the importance of Statistics Canada's credibility being beyond question, places that institution in a very bad and very unfortunate light. Also in view of the suggestion that the Chief Statistician has been trying to get this practice stopped I ask the Acting Prime Minister whether he will in fact see this is stopped and not try to talk about what has happened in the past.
O)


Mitchell William Sharp: Mr. Speaker, as my colleague, the Minister of Industry, Trade and Commerce, has said, the government has this under review. I should like to say to the House, however, that the reason I explained that it was a long standing practice was to make it clear that it did not originate with this administration or that there had been any changes that would in any way have reflected on the integrity of Statistics Canada. I think that the information should be made known to the government as soon as possible. As I understand the situation, Statistics Canada does not hold back any publication in order to give the government advance information, either now or in the past. It is simply that when certain crude information is available, it is available to the ministers who can take action on it as quickly as possible. I am sure that the Leader of the Opposition would expect that the government should get vital information of this kind as quickly as possible so that it can adapt its policies as quickly as possible.


Robert Lorne Stanfield: I am surprised that such a Liberal as the Acting Prime Minister would justify some practice because it has been done for years in the past.


John George Diefenbaker: Starting in 1963.


Robert Lorne Stanfield: May I ask the Acting Prime Minister whether this practice does not unfortunately put the Chief Statistician and Statistics Canada in a very bad light. Does not the existence of this practice tend to undermine the impartiality and the independent position of that agency, and if it is the view of the Chief Statistician that this practice should stop and that information should be made public at the same time as it is made available to the government, will the Acting Prime Minister and the government accept that view and remove Statistics Canada from the invidious position in which the government is placing it?
Some bon. Members: Hear, hear!


Mitchell William Sharp: Mr. Speaker, I do not agree with the suggestion of the Leader of the Opposition that Statistics Canada

is put in a compromising position by letting the government have certain vital information as quickly as possible. If there was any suggestion-which the chief statistician has not made-that she was under any pressure, that would be a different matter. She has never alleged that. Indeed, I think it is quite clear that she has never been subjected to any pressure to change any of the figures that have been published.


ALLEGATION ADVANCE INFORMATION AVAILABLE TO MINISTERS-SUGGESTED QUESTION OF PRIVILEGE
Mr. G. W. Baldwin (Peace River):: Mr. Speaker, I have a question of privilege. In light of the very damaging revelations made by the Acting Prime Minister today-


Some hon. Members:: Oh, oh!


An hon. Member:: Headlines!


Gerald William Baldwin: -which support the statement made by the Chief Statistician who is the deputy, under the statute, of the Minister of Industry, Trade and Commerce and in light of the fact that it has obviously been admitted that members of the cabinet who are members of this House and as such in a political sense receive advance statistical information resulting in the delay and the suppression for definite periods of time of this vital information so essential to the members of the House and to the public, if Your Honour finds there is a prima facie case of privilege I would move the following motion:
That the extent to which the government in general and the Minister of Industry, Trade and Commerce has engaged in the practice of suppressing or delaying publication of statistics of urgent public importance for one or more days after Statistics Canada has reported them to him be referred to the Standing Committee on Privileges and Elections.


Some hon. Members:: Hear, hear!


An hon. Member:: Did you have any other dreams last night, Jed?


John George Diefenbaker: I would like to get some of those officials on the witness stand.


Gerald William Baldwin: I will be glad to interpret it for Your Honour.


Mr. Speaker:: Order, please. The hon. member has sought the floor on a question of privilege and has outlined what he alleges to be a prima facie question of privilege. The preamble contains an allegation that there has been disclosure today of some untoward withholding of information by the ministry which is in receipt of that information, particularly the Minister of Industry, Trade and Commerce who I presume, without at least on the face of it further argument, would be in receipt of that information in the course of his duties. At the moment, I cannot be persuaded that that represents a prima facie question of privilege. If further information of that sort comes to light and is pressed by the hon. member for Peace River or any other member, that the hon. Minister of Industry, Trade and Commerce or any other minister has in fact in any way deliberately withheld or in any way used deception in the possession of that information in the carrying out of
November 7, 1974

his duties, that might form the basis of a specific charge to that effect by a member with the concomitant results well known to members on both sides of the House.
I find, however, that the general allegation of a standard of conduct which is perhaps less than the perfect standard which might be observed by other members were they in the position of the minister is perhaps a criticism of the ministry but it does not in my opinion constitute a prima facie case of question of privilege.


Some hon. Members:: Hear, hear!


Mr. Speaker:: The hon. member for St. John's East on a supplementary.


PROPOSAL TO ESTABLISH LOW INCOME EARNERS' CONSUMER PRICE INDEX
James Aloysius McGrath: Mr. Speaker, my question for the Minister of Industry, Trade and Commerce has to do with Statistics Canada. In view of the fact that low income earners in Canada spend a much larger proportion of their incomes on certain components of the Consumer Price Index such as food and shelter than does the average Canadian family, would the minister instruct Statistics Canada to institute a low income earners' index which would adequately reflect the effects of rises in the cost of living specifically on low income earners?


Alastair William Gillespie: Mr. Speaker, I would be pleased to refer that representation to the Chief Statistician.


HOUSING
Mr. Edward Broadbent (Oshawa-Whitby):: Mr. Speaker, my question is directed to the Minister of State for Housing. Since the 10.3 per cent increase in the housing index portion of the cost of living figures released today represents the highest increase for a comparable period of time in the past two decades, and since interest rates account for a major proportion of the increase, can the minister explain to the House the incredible decision made by his department last week to increase the interest rate on money going out to the provinces for public housing from 10 per cent to 10% per cent? Given the need for more public housing and the need to solve the problem of interest rates, can the minister explain why the government last week increased its own interest rate to the provinces.


Hon. Barney Danson (Minister of State for Urban Affairs):: Mr. Speaker, it has been the practice of CMHC to lend the provinces the funds necessary and agreed upon at the rate at which we borrow from the Department of Finance, plus % of one per cent, I believe, to pay for handling. That has been the consistent practice except in specific areas involving programs with interest rate subsi-
Oral Questions
dies. We have done this in previous programs and will in future, and this fact will be reflected in new programs.


REASON FOR DIFFERENCE BETWEEN LENDING RATE TO PRIVATE DEVELOPERS AND TO PROVINCES FOR PUBLIC HOUSING
John Edward Broadbent: A supplementary question, Mr. Speaker. The minister knows very well that that is a matter for his decision. Why is the government lending money to the provinces, for public housing, at 10% per cent, when it is lending money to private developers at 8 per cent? Why is it putting out money for public housing at an interest rate substantially higher than that made available to private developers for limited dividend housing?


Barnett Jerome Danson: Mr. Speaker, it is a judgment which must be made. Interest rates have to reflect costs, to some extent, even when subsidized. In my judgment that is the logical way to provide money to provinces at a lower cost than the one at which they are able to raise it for themselves. They seem quite happy to accept it on that basis and we provide a subsidy in those areas where we see specific benefits.


FINANCE
John Edward Broadbent: Mr. Speaker, may I direct a supplementary question to the Minister of Finance. Since one of the government's stated cures for inflation involves increased supply, will the government consider cutting back on its stated intention to spend some $128 million during the current fiscal year for federal government buildings in the Ottawa area and divert funds to the much needed housing sector?


Hon. John N. Turner (Minister of Finance):: Mr. Speaker, there was a general understanding on the part of the provincial premiers, when they met the Prime Minister and me-


An hon. Member:: Before or after coffee?


John Napier Turner: That was after coffee, Mr. Speaker-there was the general understanding that, in certain overheated areas of the country, it might be wise to postpone or orchestrate capital building in favour of residential housing. This is something I want to take under consideration. I will give the hon. member a fuller answer on budget night.


REDUCTION OR REMOVAL OF SALES TAX ON BUILDING
Mr. Donald W. Munro (Esguimalt-Saanich):: Mr. Speaker, my supplementary question is also addressed to the Minister of Finance. As the consumer price index for

November 7, 1974
Oral Questions
October illustrated that housing costs were again on the increase and as the CPI does not include land costs, which have registered the most dramatic increase in all housing factors in the compilation of the housing component index, would the minister now consider either removing or reducing the 11 per cent sales tax on building materials and including the land factor in future calculations of the CPI, to ensure that Canadians are informed about the true increases in the housing component index.


John Napier Turner: Mr. Speaker, the components of the index are a matter for Statistics Canada. The hon. gentleman's question really relates to a budgetary matter. I might say at this stage that the prime thrust in the rise in the cost of living, although it involves housing and clothing components, was primarily owing to the increase in food costs, particularly foods having a sugar based component.


Gerald William Baldwin: Surely, with four days' notice the minister could have done better than that.


HOUSING
Mr. Adrien Lambert (Bellechasse):: Mr. Speaker, I would like to put a question to the Minister of State for Urban Affairs.
Following the signature of an agreement with the province of Quebec concerning Bill C-133 on urban development, could the minister tell the House whether many municipalities have submitted projects in order to benefit from this legislation?


Barnett Jerome Danson: Mr. Speaker, the agreements were signed fairly recently. I am not aware of the specific projects which have been submitted to the provinces on this matter but I will be glad to get the information and inform the hon. member.


Joseph Adrien Henri Lambert: Mr. Speaker, I would like to ask a supplementary question.
Can the minister tell the House whether, under the terms of this agreement, the Minister of State for Urban Affairs is provided with regular information concerning the application submitted by the municipalities?


Barnett Jerome Danson: Mr. Speaker, I am sure I will be aware of them. However, I believe this will be handled through the Quebec Housing Corporation.


FINANCE
Hon. George Hees (Prince Edward-Hastings):: Mr. Speaker, I have a question for the Minister of Finance. As the minister has stated many times that the only effective way to combat inflation is to increase production, and as Statistics Canada have reported that the index of real domestic product, which is the real industrial growth of the country, has actually decreased during the last six months, showing less than zero growth during that period, will the minister advise if the country can expect programs to be introduced in the budget to increase production in this country which will be far more effective than those which he presented in his last three budgets?


John Napier Turner: Mr. Speaker, the increases in capacity and production, both in the agricultural and industrial spheres, are of course an essential part of the government's program, although not the only part. I will be glad to reply in more detail to the hon. member's representation on budget night. I know he will be here.


STATUS OF MEETINGS WITH VARIOUS GROUPS ON PROPOSALS TO FIGHT INFLATION
Mr. Lincoln M. Alexander (Hamilton West):: Mr. Speaker, I have a supplementary question for the Minister of Finance. For approximately two months now the Minister of Finance and the Prime Minister have been talking about a co-operative effort to fight inflation and fairly share the national pie among wages, prices and profits, something in which we are all interested. Have these get-togethers, referred to by some as social get-togethers, with groups in the economy come to an end and are substantive and formal talks, based on concrete government proposals, about to begin and, if so, when?


John Napier Turner: Mr. Speaker, they have been in progress. I hope to provide further clarification to the House on budget night. As the program develops, it will be fully apparent to the House and the people of this country.


MANPOWER
Lincoln MacCauley Alexander: Mr. Speaker, I wish to direct a supplementary question to the Minister of Manpower and Immigration. It is in the same vein, respecting wages, prices and profits and, in particular, income distribution. In view of the statement made by Mr. Lawson, president of the Canadian Manufacturing Association, that there are labour shortages on one hand and inflated unemployment benefits on the other while employers search for workers to man their plants, and his subsequent call for a national conference to discuss income distribution, composed of governments, organized labour, farmers, consumers and businessmen, will the
November 7, 1974

minister act upon Mr. Lawson's request and call a conference at an early date?


Hon. Robert K. Andras (Minister of Manpower and Immigration):: Mr. Speaker, I will be glad to give the representation of the hon. member and his chum, the president of CMA, full consideration.


CONSUMER AFFAIRS
Mr. J. R. Ellis (Hastings):: Mr. Speaker, my question is for the Minister of Consumer and Corporate Affairs. With the wholesale cost of sugar rising over 400 per cent in 11 months and the industry predicting it will go to $75 in mid-November and $120 by January, when will the minister step in and stop retail prices from this skyrocketing spiral which could bring sugar to $1.50 a pound retail?


Hon. Andre Ouellet (Minister of Consumer and Corporate Affairs):: Mr. Speaker, I previously answered a question relating to sugar in this House and I said that the government would soon announce its policy. I would therefore ask the hon. member to wait for this announcement.


EXTERNAL AFFAIRS
Mr. Douglas Roche (Edmonton-Strathcona):: Mr. Speaker, my question is for the Acting Prime Minister. At the World Food Conference in Rome today, the United States proposed a new export planning group which is seen by many in Rome to be another rich man's club in control of vital commodities. Will the Canadian delegation in Rome be instructed by the government to insist that any such new group have representative membership of rich and poor nations so that a power cartel on food will be avoided?


Mitchell William Sharp: Mr. Speaker, I am inclined to agree with the sentiments expressed by the hon. member. I will take his suggestions under consideration.


Douglas Roche: Recognizing the Acting Prime Minister will want to examine the United States proposal in detail, may I ask whether he will now give his assurance that any food authority established at the Rome conference will be truly international and that Canada will insist on this?


Mitchell William Sharp: Mr. Speaker, that will be in accordance with established government policy.
Oral Questions


CONSUMER AFFAIRS
John George Diefenbaker: A supplementary question to the Minister of Consumer and Corporate Affairs. The hon. gentleman informed the House that he had answered questions on this subject earlier. But the people of Canada are not asking for sugar-coated ministerial statements. They are asking for action.


Some hon. Members:: Question!


John George Diefenbaker: Will the minister tell us whether or not an inventory has been taken of the amount of sugar in storage in Canada? Do present stocks amount to a great deal more than at this time last year? With prices rising at an outrageous rate, and sugar refineries making tremendous profits, surely we are entitled to a better answer than being told that some day, some place, we shall be advised as to what is happening.
Does he realize that the sugar refineries are before the courts today? I do not say whether they are guilty or not guilty. But if they are found guilty, the amount they have been able to mulct from the Canadian public in the last few weeks would pay several of the largest fines.


Some hon. Members:: Hear, hear!


André Ouellet: Mr. Speaker, there are several aspects to the question raised by the right hon. member. I do not think I could examine all of them during the question period; I can however assure him that, as far as I am concerned, my department has assumed its responsibilities and has initiated proceedings against three Eastern Canada refineries. Also, we support the Plumptre board's recommendations concerning rates. Moreover, we are waiting impatiently for the hon. Minister of Agriculture's recommendations as to the possibility of increasing to a certain extent sugar production in Canada. Finally, we support the efforts of the hon. Minister of Industry, Trade and Commerce concerning international agreements.


John George Diefenbaker: We have heard all those exculpatory statements over and over again. Is it not a fact that there are in storage today on behalf of the sugar corporations of Canada larger amounts of sugar than were held last year certainly, or for several years, and that the prices of the stocks on hand and purchased at lower rates than today are now being marked up and up day by day, whereby totally unconscionable increases are taking place?


André Ouellet: If what the right hon. member is saying is true, I hope he will support the steps I will take when I introduce a profiteering bill later on during this session.

November 7, 1974
Oral Questions


REASON CANADA NOT NEGOTIATING WITH CUBA TO PURCHASE SUGAR
Mr. John Rodriguez (Nickel Belt):: My supplementary is to the Minister of Industry, Trade and Commerce, and I hope I don't get any sweet talk. The consumer price index indicates that sugar prices have more than tripled over the last year and I note that Cuban sugar is being sold to us at $4.57 per cwt. while Australian and South African sugar are considerably more expensive at $6.47 and $6.02 per cwt. respectively. Would the minister explain why Canada is not negotiating with Cuba for more substantial imports of raw sugar?


Alastair William Gillespie: The primary reason is, of course, that the sugar trade is carried on by the private sector. In this connection I think the hon. member might be interested to know that imports of sugar from Cuba have increased in recent years. In 1974 it is estimated Cuba will supply between nine and ten per cent of Canadian requirements.


John R. Rodriguez: Can this House and the people of Canada expect that the government will step in to make sure that the public is able to buy sugar and its derivatives at reasonable prices rather than being ripped off by the sugar cartels?


Alastair William Gillespie: I have already informed the hon. member that companies in business in the private sector have increased their imports from Cuba. These amounted to 47,000 tons in 1973 and I understand that imports in 1974 should be in the order of 97,000 tons.


John Raymond Ellis: A point of order, Mr. Speaker. I am not at all sure that this is a valid point of order but when the hon. member for Nickel Belt was asking his question he talked about sugar being sold at $4.00 a cwt. and $6.00 a cwt. and the minister read his answer back, though everyone knows the price of sugar is over $60 per cwt., not $6.00.


An hon. Member:: The minister does not know that.
* *
*


Some hon. Members:: Oh!


Hon. Warren Allmand (Solicitor General):: I will look into that question, Mr. Speaker, but it is my understanding that matters relating to Parliament Hill and its use for demonstrations or otherwise fall under Your Honour's jurisdiction.
* *
*


FINANCE
Hon. Marcel Lambert (Edmonton West):: In view of the fact that the Annual Review of the Department of Finance is released in early spring and would now be many months out of date, does the minister intend to publish an interim review before November 18 so that we can put his budget proposals in proper perspective?


John Napier Turner: The hon. gentleman will recall that in the last three years we have been publishing an Annual Review at that time regardless of the particular date on which the budget is presented. I hope to bring the hon. gentleman up to date as best I can during the budget presentation itself.


Marcel Joseph Aimé Lambert: I ask that question, Mr. Speaker, because in the budget of May 6 the minister was calling for a budgetary deficit of some $450 million during the fiscal year. The other day, however, he indicated that a budgetary surplus of some $598 million was now expected. I should like to know whether this spread, amounting to more than $1 million, is the result of any change in fiscal policy or whether it is a measure of the standard of government forecasting?


John Napier Turner: That is a matter with which I intend to deal in some detail on budget night.
* *
*



PARLIAMENT HILL


Mr. Joe Flynn (Kitchener):: Mr. Speaker, my question is for the Solicitor General. It arises from the increasing number of demonstrations on Parliament Hill, the anxiety these demonstrations cause and the impediments created by them. Would it be possible to restrict these demonstrations to an area of the Hill where they would not interfere with normal business and would not cause consternation-


An hon. Member:: It is their parliament, too!
Mtr. Flynn: -to many Canadians and visitors from abroad who have a perfect right, also, to be on the Hill.


Mr. Roch La Salle (Joliette):: Mr. Speaker, I have a question for the hon. Minister of Consumer and Corporate Affairs.
In view of the fact that last year the NATCD began campaigning to make the government aware that this country's small businesses are disappearing because of the tremendous growth of concerns which resort to more or less fair methods to accelerate their growth, I would like to ask the hon. minister, in view of Bill C-2, whether he would be ready to favour the addition of a clause recommending that the sale of loss leaders become, through that bill, an offence under the act?
November 7, 1974


André Ouellet: Mr. Speaker, I will certainly be pleased to examine clauses of that type, the more so as Bill C-2 provides that such a practice as that mentioned by the hon. member would be illegal, if the price is ridiculously low and likely to limit seriously competition. I think this is another example of the urgency to amend our competition act and I hope the hon. member will persuade his colleagues on the other side to support my action.
[DOT] * *



CONSUMER AFFAIRS


Mr. Bill Kempling (Halton-Wentworth):: Mr. Speaker, is the Minister of Consumer and Corporate Affairs aware of the practices of the big three sugar companies operating in Canada, namely, Redpath, St. Lawrence and Atlantic, of refusing to accept orders for future delivery of sugar to small processors, which is the usual custom for supplying larger firms, and of their only supplying these small processors on a short-term pickup basis?


André Ouellet: Mr. Speaker, I would be very happy to be provided with all the details on the type of activity the Redpath Company is indulging in. If the hon. member wants to give them to me, I will gladly accept them and pass them on to the officials of my department for them to take necessary action.



LABOUR RELATIONS


Mr. Gordon Ritchie (Dauphin):: Mr. Speaker, in view of some uncertainty as to the actual status of the railway walkout, can the Minister of Labour enlighten the House on the actual situation?


Hon. John C. Munro (Minister of Labour):: Mr. Speaker, I believe the matter is presently being resolved and I am awaiting another report at any time.


William Gordon Ritchie: Mr. Speaker, as more than 1,250,000 workers will be involved in wage settlements in the coming year is the minister actively pursuing methods such as voluntary arbitration or final offer in dealing with this type of walkout?


John Carr Munro: Mr. Speaker, the discussion we are now undertaking with labour, business and industry is designed for that very purpose, to see if we can through some type of tripartite arrangement find better ways of avoiding work stoppages of this kind.
Oral Questions
In connection with the hon. member's first question, I think the House will be pleased to know that I think an agreement has now been reached, subject to confirmation, between the railway unions and management in respect of the ensuing year.



MEDICAL RESEARCH AT UNIVERSITY OF BRITISH COLUMBIA-REQUEST FOR INCREASED GRANTS

Mr. Bob Brisco (Kootenay West):: Mr. Speaker, in the absence of the Minister of National Health and Welfare I should like to direct my question to his parliamentary secretary, the hon. member for Southwestern Nova. In view of the fact that federal support of medical research at the University of British Columbia has been significantly decreasing, and that on October 15 the Canadian Medical Science Community presented a brief to the minister on the immediate need for increased funding, does the minister now feel convinced of the need for greater assistance to medical research at the University of British Columbia and across Canada?


Miss Coline Campbell (Parliamentary Secretary to Minister of National Health and Welfare):: Mr. Speaker, I have taken note of the hon. member's question and I will bring it to the attention of the minister.



HOUSING


Mr. Eudore Allard (Rimouski):: Mr. Speaker, my question is for the hon. Minister of State for Urban Affairs.
Would the hon. Minister inform this House whether he has considered the possibility of making the $500 grant provided for new house owners retroactive to July 1, 1974, rather than to November 1, 1974?


Barnett Jerome Danson: Yes, Mr. Speaker, I did consider that and rejected it. I did agree that it would be retroactive from the date of the announcement, when the legislation is passed.


John Edward Broadbent: Mr. Speaker, I rise on a point of order. I had intended to wait until the end of the question period, but since the minister has dealt with a similar question I will raise it now. In response to one of my questions I think the minister inadvertently misinformed the House. The question concerned the new interest rate the government was charging the provinces under section 43, which has gone up to 103/8 per cent. The minister replied that the rate was still such that the provinces would want to borrow money from the government as they could get it cheaper there than elsewhere. I am informed that precisely because it is now at this rate it will undermine the public housing program as provinces can get the money cheaper elsewhere. Would the minister inform the House

Oral Questions
whether he was talking about the old rate or the new higher rate announced last week?


Barnett Jerome Danson: Mr. Speaker, I have had no indication that the program is undermined or that the provinces are rejecting any money at these rates. On the contrary, they seem to be moving forward and we are co-operating with them. I do not say I am satisfied, or that anyone is satisfied with the degree of activity, but we are trying to escalate it. I will be introducing new legislation to this end. We have not had a bad record, or all that we want to see, but we want to build from there.



TRANSPORT


Mr. Lloyd Francis (Ottawa West):: Mr. Speaker, I have a question for the Minister of Transport. In view of the frontpage headline in this morning's Globe and Mail to the effect that the province of Ontario's Go-Urban magnetic train is having difficulties and in view of the fact that this system was intended to be used in other places, particularly Ottawa, has the government of Canada been asked in any way to assist in this matter to overcome these difficulties?


Hon. Jean Marchand (Minister of Transport):: Mr. Speaker, I think the hon. gentleman knows that we are working very closely with the government of Ontario in attempting to form only one corporation for the purpose to which the hon. member has referred. In addition to that, our own transportation development agency in Montreal is working on a device similar to the one which has been put under contract to Krauss-Mafei of Germany.



STATISTICS CANADA


Mr. Joe Clark (Rocky Mountain):: Mr. Speaker, my question is directed to the Acting Prime Minister and is supplementary to those asked earlier by the Leader of the Opposition. Would the minister advise the House whether any advance notice of the report of Statistics Canada referred to earlier goes directly, or is otherwise made available by any means to Senator Keith Davey? Can he give us any guarantee that that is not done or that that has not occurred?


Some hon. Members:: Oh, oh!


Mr. Speaker:: Order, please.



THE CANADIAN ECONOMY


Mr. James Gillies (Don Valley):: Mr. Speaker, in as much as the Minister of Finance has always in the past been willing to express his views on what is happening in the economy, for example in 1973 he said there was basic unemployment and in 1974 inflation, now that the policy of the government has slowed down the economy and we have rising unemployment and inflation at the same time, would he indicate what he considers the most important problem to be dealt with in the forthcoming year?


Some hon. Members:: Oh, oh!



PENITENTIARIES


Mr.   Sean@: Mr. Speaker, in view of the much publicized letter directed to the Solicitor General warning of a "blood bath killing spree" by extremely dangerous escapees from the maximum security block at Laval Penitentiary, would the minister advise the House of the intended response of his government to the threat? In view of the fact the minister almost a week ago received a promised report on the breakout, will he make a full statement on motions regarding this serious situation rather than continuing to ignore this House in favour of government by press conference?


William Warren Allmand: Mr. Speaker, I should like to deny the last allegation. I have answered all questions put to me on this matter in this House.


Some hon. Members:: Hear, hear!


William Warren Allmand: Very often the press has better questions than I get in this House, therefore they get better answers.


Some hon. Members:: Oh, oh!


William Warren Allmand: Yesterday I received a call from a lawyer in Montreal who conveyed to me the contents of a letter he had received from two of the escaped inmates, one being Richard Blass, in which they complained of conditions in cell block one of the Laval temporary maximum penitentiary. They asked that we permit the entry of a group of journalists into the institution and that there be an improvement in the conditions. Let me say that we have always taken the position that we should try to improve and humanize our institutions and also improve the security, but we do not intend to let inmates decide for us how our penitentiaries should be administered.
On the other hand we have always permitted the entry of the press into the institution unless there has been some serious incident. I have consulted with the officials of the
November 7, 1974

Oral Questions CONSUMER AFFAIRS
penitentiary service and we have agreed we will in this case permit entry of some journalists into the Laval maximum security institution under certain conditions. I will be getting in touch with certain journalists in this regard.
With regard to the report in question I received it on Monday this week. There were findings in the report of maladministration and negligence. There were 16 recommendations, 14 of which have to do with improvements in the institution and we are already taking action on this. There is one recommendation in respect of discipline and this is under consideration at the present time.


Mr. O'Sullivan:: I rise on a point of order, Mr. Speaker. I hesitate to do so, but I find myself having to do so because of the minister's continued refusal to make a statement on motions about this very serious situation.


Mr. Speaker:: Order, please. The hon. member knows very well that is not a valid point of order.
The hon. member for Parry Sound-Muskoka.


Sean Patrick O'Sullivan: On a point of order, Mr. Speaker-


Mr. Speaker:: The hon. member indicated at the beginning of his remarks that his alleged point of order had to do with the alleged failure of the minister to make a statement on motions. Unless the hon. member has another reason, that is not a valid point of order.


Sean Patrick O'Sullivan: Mr. Speaker, my point of order refers to Beauchesne's Fourth Edition at page 134, section 159(2) of which I am sure Your Honour is aware. It reads:
A Minister of the Crown is not at liberty to read or quote from a despatch or other state paper not before the House, unless he be prepared to lay it upon the table. This restraint is similar to the rule of evidence in courts of law, which prevent counsel from citing documents which have not been produced in evidence. The principle is so reasonable that it has not been contested; and when the objection has been made in time, it has been generally acquiesced in.
My point of order is that the minister's failure to make a statement on motions makes me very aware of the fact that the minister was reading his answer and the minister must now under the rules table the entire document.


Some hon. Members:: Hear, hear!


Mr. Speaker:: Order, please. The citation to which the hon. member has referred deals only with instances in which a minister of the Crown in making an announcement or in making a comment or speech in the House refers to an existing document of some sort in the possession of the minister of the Crown which is not in the possession of the House in which case he must identify it and lay it on the table. Certainly, documents, in that sense were not intended to cover brief notes the minister may have in order to prepare himself to answer the questions put to him during the question period.
The hon. member for Parry Sound-Muskoka.



DIFFERENTIAL BETWEEN PRICE OF C GRADE AND A GRADE BEEF-STEPS TO PROTECT CONSUMER UNTIL FOOD PRICES REVIEW BOARD REPORT AVAILABLE

Mr. Stan Darling (Parry Sound-Muskoka):: Mr. Speaker, may I direct a question to the Minister of Consumer and Corporate Affairs. Yesterday in the House the minister mentioned a forthcoming report by the Food Prices Review Board concerning the price discrepancies between C grade and A grade beef. Will the minister indicate what intermediary steps he is taking to protect consumers from these price discrepancies until the Food Prices Review Board report is released.


André Ouellet: Mr. Speaker, I think this report will be made public in the near future and I would ask the hon. member to wait for its recommendations before asking me to take action.



ENVIRONMENTAL AFFAIRS


Mr. Wally Firth (Northwest Territories):: Mr. Speaker, my question is directed to the Minister of the Environment. I should like to ask the minister whether the government has undertaken any studies concerning mercury poisoning on the Grassy Narrows and White Dog Reserves in northern Ontario?


Hon. Jeanne Sauve (Minister of the Environment):: Mr. Speaker, studies are presently made on the mercury content in fish, but the regulations on fishing of mercury-contaminated species are made by the Department of National Health and Welfare.


Walter (Wally) Firth: I have a supplementary question for the same minister. Have any negotiations been undertaken with the Ontario government on how to clean up this pollution?


Jeanne Sauvé: Mr. Speaker, I could not answer affirmatively, but I think that it would be advisable to direct that quite specific question to my colleague the Minister of State in charge of Fisheries.



PUBLIC SERVICE


Mr. A. D. Alkenbrack (Frontenac-Lennox and Addington):: Mr. Speaker, my question is for the President of the

November 7, 1974
Oral Questions
Treasury Board as the minister responsible for the Public Service or at least in respect of his capacity as spokesman for the government's bilingualism program. Would the minister tell the House whether the merit system will continue to operate in the government's plan to further increase the number of unilingual French positions in the public service replacing bilingual positions as published in yesterday's press?


Hon. Joan Chretien (President of the Treasury Board):: The answer is yes, Mr. Speaker.


Almonte Douglas Alkenbrack: I have a supplementary, Mr. Speaker. Could the minister tell the House how the merit system can continue to prevail under the program as announced yesterday?


Joseph Jacques Jean Chrétien: I did not announce any program yesterday, Mr. Speaker. Legislation on this matter was passed by Parliament a few years ago. A resolution has been concurred in by the House in 1973, to the effect that there would henceforth be in the Public Service bilingual positions, positions where English would be essential, positions where French would be essential, and positions where both English and French would be required. It is within this policy adopted by the House that this program will be implemented.



CONFLICT OF INTEREST


Mr. Sinclair Stevens (York-Simcoe):: Mr. Speaker, in the absence of the Prime Minister I should like to direct my question to the Acting Prime Minister. Would he indicate if any guidelines have been set for cabinet ministers and their families as to when they may or may not accept directly or indirectly free transportation or other accommodation from those in the private sector and if so would he table the guidelines. If not, will such guidelines be set and tabled?


Mitchell William Sharp: Mr. Speaker, I am not aware of such guidelines. I am sure the cabinet ministers, all my colleagues, observe principles of good sense and avoid becoming in any way indebted to anyone else.


Sinclair McKnight Stevens: Mr. Speaker, I have a supplementary again directed to the Acting Prime Minister. In view of his earlier question and in view of the fact that El Al, Israel's state airline, has two seats available on its regular flight from Israel to Montreal on Monday, would the Acting Prime Minister cause the Minister of National Health and Welfare to be informed that it would be preferable for the minister and his wife to use those seats rather than return on the Bronfman jet as he has so brashly stated he intends to do.


Mr. Speaker:: Order, please. The hon. member for Saskatoon-Biggar.



CENTRAL MORTGAGE AND HOUSING CORPORATION


Mr. Ray Hnatyshyn (Saskatoon-Biggar):: Mr. Speaker, I should like to direct my question, if I may, to the Minister of State for Urban Affairs. In view of the incredible rise in building costs now being experienced in Canada, and the particularly severe restraints being placed upon the provision for and construction of hospitals, nursing homes and low rental housing, would the minister agree to instruct Central Mortgage and Housing Corporation to upwardly adjust its loan ceilings in order to meet this particular pricing problem with very little expense to the Canadian taxpayer.


Barnett Jerome Danson: Mr. Speaker, I should like to assure the hon. member that the loan ceilings are constantly under review in view of the fluctuating situation and variations in different parts of the country, and I think we should bear in mind that the ceilings tend to become minimums. By setting realistic ceilings we have seen programs which have been extremely successful. The minimum price for a house in certain areas has come down to meet the ceilings we have set.


Some hon. Members:: Where?


Barnett Jerome Danson: So long as members ask where, I would ask them to just look at the advertisements in the Toronto Daily Star which appeared on the same day as the announcement which the hon. member for Broadview made that houses were not available at or below the ceiling in Toronto.


Some hon. Members:: Hear, hear!


Mr. Gilbert:: I rise on a question of privilege, Mr. Speaker. Last Friday I invited the minister to take me around metropolitan Toronto and show me any homes that were priced at less than $45,000. He did not take up the invitation. I checked the newspapers on the weekend and I found only one builder who was advertising homes at less than $45,000. He advertised them for $39,000 and up. I would again ask the minister to show me those homes in the Toronto area that sell for less than $45,000.


An hon. Member:: Perhaps a small condominium.


Barnett Jerome Danson: I rise on the same question of privilege, Mr. Speaker. I think the hon. member has put his question of privilege to place allegations on the record which I think should not be allowed to stand, as was the case with the previous reports. I have sent the hon. member a newspaper advertisement showing condominium housing and row housing. If the hon. member is going to delude voters in


his constituency into thinking that inexpensive single family dwellings on inexpensive lots in major municipalities around Toronto are still here, I think it is a delusion.


Some hon. Members:: Oh, oh!



PENITENTIARIES


Mr. Erik Nielsen (Yukon):: Mr. Speaker-


Some hon. Members:: Oh, oh!


Erik Nielsen: It is always nice to know that one is welcome among friends.


Some hon. Members:: Hear, hear!


Erik Nielsen: My question is for the Solicitor General, and it is supplementary to one which was asked by my colleague, the hon. member for Hamilton-Wentworth. I should like to establish what is in the mind of the minister, if anything, in connection with his reply that some members of the press would be admitted to examine cell one and cell one conditions. The question that the press has been putting to him is whether they will be permitted to examine the conditions at cell one, and if there will be a selection, how will that selection process be carried out by the minister. Will all members of the press be invited to visit the cell, if they so please, or will they be selected so that only certain members will be allowed to visit?


John Napier Turner: You can't get them all into the same cell.


William Warren Allmand: Obviously we cannot allow all the journalists in cell block one-it would not be big enough to hold them.


John Napier Turner: Get them in there and keep them.


William Warren Allmand: But we are following a precedent made a few years ago when there were some allegations with regard to one of our institutions. In that case we invited the leading newspapers of Montreal to send anybody they wished to visit the institution. We will do the same thing in this case.


Mr. Dinsdale:: I rise on a point of order, Mr. Speaker, in reference to another example of concealment of information on the part of the ministry. Yesterday, answers, or what purported to be answers, were tabled in reference to several questions. Two questions were submitted by me, Nos. 525 and 526, and another two by the hon. member for Rocky Mountain, questions 159 and 388. The reply from the government in all cases was that the government does not maintain records which would enable it to trace the subsequent careers of those who at one time served ministers in the capacities listed. In order to answer this question, the answer goes, it would be necessary to review the
Construction of Railroad
personal file of every individual employed in the public service of Canada. Obviously, that is false because all that is necessary is to review the files of those who have worked in the offices of ministers, and this is a task that is relatively simple. Our concern in putting these questions is simply that the government is bypassing the Public Service Commission and in its efforts is politicizing the public service of Canada.


Lincoln MacCauley Alexander: I rise on a point of order, Mr. Speaker. The Minister of Labour recently indicated, I believe, that there was a negotiated settlement, temporary or otherwise, regarding the Canadian Brotherhood of Railway Workers. I wonder if he is aware of the fact that according to the Ottawa Journal of today's date there are still some 235 CN employees on strike.


Mr. Speaker:: Order, please.


Lincoln MacCauley Alexander: I resent the attitude of that gang over there. I was going to assist the Minister of Labour, but the government members cannot understand that.


Some hon. Members:: Oh, oh!


Mr. Speaker:: The Minister of Transport seeks permission to revert to motions for the purpose of tabling some documents. Is that agreed.


Some hon. Members:: Agreed.



ROUTINE PROCEEDINGS


Jean Marchand: Mr. Speaker, with the consent of the House, could we revert to motions, because I would like to table a report which the Opposition is looking forward to read. This is the report on the feasibility of constructing a railroad from the Far North to Alberta. I have here four copies in French and four copies in English.


Lincoln MacCauley Alexander: I wish at this point to refer to the settlement which the minister had indicated had been reached. At the same time I am not sure that he is aware of all the circumstances as indicated in the Ottawa Journal of today. Apparently there are some 235 CN employees still on strike. There is no staff at the Ottawa Station or Walkley yard. Ticket sellers, redcaps, baggage, freight and express handlers, have all left to hold meetings.


Mr. Speaker:: Order, please. The question period is concluded. The hon. member may have a further follow up question, a supplementary question, or indeed is endeavouring to assist the minister to clarify his earlier statement, although that may be fortuitous on his part. The question period has come to a conclusion and I can

November 7, 1974
Business of the House
scarcely regard further questioning of the minister on the same subject as a point of order at this time.


BUSINESS OF THE HOUSE
Gerald William Baldwin: Mr. Speaker, I should like to find out from the government House leader what business we will be able to process as rapidly as possible so that we can get to some important measures after the budget.


Mitchell William Sharp: Mr. Speaker, today I hope that we will be able to deal expeditiously with three bills: Bill C-13, the Northern Canada Power Commission Act amendment, Bill C-17, the Army Benevolent Fund Act amendment, and Bill C-18, the Fire Losses Replacement Account Act amendment. After that is concluded we will return to the consideration of Bill C-32, the Petroleum Administration Act, which, after receiving second reading, will be referred to the committee of the whole.
Tomorrow we shall consider Bill C-27, the amendment to the Customs Tariff. Tuesday, November 12, and Friday, November 15 will be allotted days under Standing Order 58. Next week, we shall resume consideration of Bill C-32. Other items which are likely to come up in the near future are Bills C-4 and C-22.


Mr. Speaker:: The hon. member for Nickel Belt on a point of order.


John R. Rodriguez: Mr. Speaker, earlier this afternoon I rose on a question to the Minister of Industry, Trade and Commerce and quoted some figures. The hon. member for Hastings on a point of order sought to correct the figures I used. I want to point out that I was using the figures for raw sugar landed in Canada and I believe the hon. member for Hastings was talking about the price for refined sugar.


Mr. Speaker:: Orders of the day. The hon. member for Winnipeg North Centre on a point of order.


Mr. Knowles (Winnipeg North Centre):: Mr. Speaker, with respect to the weekly announcement of the Business of the House may I ask the President of the Privy Council a question. Will he at an early date, or will the Minister of Veterans Affairs with the approval of the government House Leader, be introducing a motion which I am sure can be passed without debate, giving a term of reference to the Standing Committee on Veterans Affairs so that that committee can hear certain veteran organizations.


Mitchell William Sharp: Mr. Speaker, I can assure the hon. member we will give sympathetic and urgent consideration to his request.


Mr. Speaker:: Orders of the day.



GOVERNMENT ORDERS


Mitchell William Sharp: that Bill C-13, to amend the Northern Canada Power Commission Act, be read the second time and referred to the Standing Committee on Indian Affairs and Northern Development.


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


Some hon. Members:: Agreed.


Erik Nielsen: Mr. Speaker, we are not going to oppose this motion provided we can obtain an assurance from the government House leader that we will not be impeded in calling those witnesses in committee 'whom we on this side of the House consider essential to the clause by clause examination of the bill. If we can have that assurance now, there will be no problem in giving the bill second reading now and sending it to committee; but we do not want to encounter, in committee, a rejection of the request to call witnesses by the government majority on the committee.


Mitchell William Sharp: Mr. Speaker, I am not in a position to commit hon. members. Members of the committee are all members of the House of Commons, just like my hon. friend, and would not want to receive instructions from me.


Erik Nielsen: I am sure, Mr. Speaker, that the government House leader can go so far as to say he will prevail upon his colleague the Minister of Indian Affairs and Northern Development (Mr. Buchanan), and perhaps even the chairman of the committee, to assist in the meaningful work of the committee by providing that there will be no impediment to the calling of witnesses. We are prepared to hasten the bill along by giving it second reading now, as long as we can be given that assurance.


Mitchell William Sharp: Mr. Speaker, of course I cannot give assurances on behalf of other members of the House. I will see that sympathetic consideration is given to the request of the hon. member, but I am in no position to commit my friends on this side of the House or those on the other side.


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


Some hon. Members:: Agreed.


[Stage Direction]
Motion agreed to, bill read the second time and referred to the Standing Committee on Indian Affairs and Northern Development.
November 7, 1974

Mitchell William Sharp: that Bill C-17, to amend the Army Benevolent Fund Act, be read the second time and referred to the Standing Committee on Veterans Affairs.


[Stage Direction]
Motion agreed to, bill read the second time and referred to the Standing Committee on Veterans Affairs.

Mitchell William Sharp: that Bill C-18, to amend the Fire Losses Replacement Account Act, be read the second time and referred to the Standing Committee on Indian Affairs and Northern Development.


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


Some hon. Members:: Agreed.


Erik Nielsen: Mr. Speaker, I seek the same kind of assurance from the government House leader, namely, that he will speak to his colleague the Minister of Indian Affairs and Northern Development (Mr. Buchanan) along the same lines as my representations on Bill C-13.


Mitchell William Sharp: Mr. Speaker, in the spirit of co-operation and friendship which I extend to the hon. member on his return to the House, I give that undertaking.


Gerald William Baldwin: Parliament is alive and working.


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


Some hon. Members:: Agreed.


[Stage Direction]
Motion agreed to, bill read the second time and referred to the Standing Committee on Indian Affairs and Northern Development.

[Stage Direction]
The House resumed, from Monday, November 4, consideration of the motion of Mr. Macdonald (Rosedale) that Bill C-32, to impose a charge on the export of crude oil and certain petroleum products, to provide compensation for certain petroleum costs and to regulate the price of Canadian crude oil and natural gas in interprovincial and export trade, be read the second time and referred to committee of the whole.
Oil and Petroleum
Robert Hylton Brisco: Mr. Speaker, prior to calling it ten o'clock on Monday last I had expressed my concerns and those of my constituents on the issue of resource taxation and the groundwork that this legislation lays for the forthcoming budget proposals of the Minister of Finance (Mr. Turner). While recognizing the need for the paramount position of the federal government in national issue areas such as energy, it has become increasingly evident that the intent of the government is to supersede innately provincial responsibilities.
Moreover, to do so by confrontation can only serve to further damage the economic climate necessary for the resource industries to reinvest in this country. Without the necessary co-operation and co-ordination of policies between the provincial and federal governments, we will continue to see the decline in exploration as witnessed in western Canada by the departure of approximately 28 per cent of the heavy duty capacity oil drilling rigs. The result of this, coupled with continued uncertainties over taxation, the lack of concrete energy policies, aggravated by continual intergovernmental quarrelling, is that resource industries can hardly be expected to remain and continue to reinvest in so hostile an atmosphere. In the end, communities such as I represent in Kootenay West, whose lifeblood is based on the resource and energy related industries, will suffer.
Mr. Speaker, I cannot help observing that the hon. member for Nanaimo-Cowichan-The Islands (Mr. Douglas) could not address himself to this bill without reference to government takeover of companies now drilling for oil. The hon. member wants the federal and provincial governments to drill for oil. With his party's policies now being demonstrated by the Saskatchewan government, it will not be long before that will be precisely the case, because nobody else wants to drill for it. Now that the Saskatchewan drilling rigs have left for the Dakotas and elsewhere, where is the technical know-how, the skill and experience to do the job? That is the very thing this nation neither needs nor wants, namely, another massive bureaucrat created from the monster of nationalization.
Mr. Speaker, many members have expressed grave concern about the constitutional validity of part III of Bill C-32. Certainly I have expressed doubts and concerns, and I urge the Minister of Energy, Mines and Resources (Mr. Macdonald) to demonstrate an understanding of our concern and to recognize that what we in opposition are really saying is that this is a good act; just clean it up a little. We are saying that we support the minister's good intentions. This bill will benefit Canadians, but just as surely as attempts were made in this House on Tuesday to challenge the authority of the Speaker, so part III challenges the authority of the provinces. It is confrontation without consultation, and no good will come of it.
When the people of Canada-who are also the people of the provinces-realize they have been had, they will remember four years hence. I further state that this feeling of national frustration will increase after the Minister of Finance brings down his budget-a budget that I predict will be a further erosion of the British North America Act, a further erosion of the oil and gas industry in Alberta, a further erosion of this industry in Saskatche-

November 7, 1974
Oil and Petroleum
wan, and it will give the mining industry of British Columbia a final shove on the slippery slope of socialism whereon it has already commenced its downward slide. That, Mr. Speaker, in broad terms is the industrial condition. What about the provincial governments and federal government confrontations? I can hear the constitutional battle; this House and all provincial legislatures will ring with the sour notes of bitterness and alarm.
Finally, I would end with a question. In the past few months we have witnessed the uncertainties created in the poultry industry and in the eyes of the consumer over the subject of rotten eggs. The government has responded with a review, a study of the problem. In fairness, we must await recommendations regarding this unsavoury problem before, hopefully, solutions are implemented. For over a year we have witnessed uncertainties in the beef industry. In many cases these uncertainties have been calamities- calamities to cow-calf operations and calamities to the sensibilities of Canadians viewing the slaughter of 600 calves. The government has responded: we will get a review of the beef industry. Again, in fairness, we must await recommendations before, hopefully, solutions are effected.
But once Bill C-32 becomes law and still contains the constitutional glove in the face, part III, how will this government respond? What possible review, what possible recommendations will it make that will not leave the bitter taste of doubt and mistrust in the provinces of this nation. And as an extension to that question, and speaking to the future, I ask, what possible review and what possible recommendations will this government make if the Minister of Finance further erodes federal-provincial relations with a raw resources taxation policy that may well break the back of the mining and petroleum industries of Canada? Let us have an energy policy, Mr. Speaker, but an energy policy that the minister can sleep with, that the opposition can agree with and that governments and the people can live with.
I note from the Ottawa Journal of Thursday, November 7, that the Minister of Finance is now expressing concern regarding the fouled-up federal equalization formula. The minister said he will be presenting a proposition. It has been my experience that every time I have heard a proposition, somebody is had. In this case it will be the provinces. I note, further, that the Minister of Finance is thinking in terms of a short-term arrangement. That, too, sounds like a proposition and a further indication of the failure of this government to develop long-term planning. Again we see, according to the press, the further probability of federal-provincial confrontation. What future propositions will the Minister of Finance and the Minister of Energy, Mines and Resources have in store both for the provinces and for the people.


Mr. Stan Schellenberger (Wetaskiwin):: Mr. Speaker, today we are considering Bill C-32, a bill to impose a charge on the export of crude oil and certain petroleum products, to provide compensation for certain petroleum costs and to regulate the price of Canadian crude oil and natural gas in interprovincial and export trade. This bill is similar to the one introduced last April. Since then, conditions have changed. However, I still feel that some of the

powers proposed in this bill should not be granted. I feel now as I did when I last spoke on this legislation.
Before commenting on any specific clause, may I point out that I have asked the Minister of Energy, Mines and Resources (Mr. Macdonald) and the Minister of Indian Affairs and Northern Development (Mr. Buchanan) questions concerning the export tax on oil produced from lands owned by Indian bands. I refer particularly to Alberta, although this matter applies also to other provinces. So far my questions have been ignored.
In September, 1973, the government introduced an export tax on oil. It promised to give back 50 per cent of the tax to the producing provinces. The other 50 per cent was to be held in the federal treasury, to be used for research in resource development. Subsequently, the government realized that it was levying the export tax on oil produced on Indian lands. That tax money was accumulating in the federal treasury. Although the federal government had collected the export tax from October, 1973, to April 1, 1974, the Indian people have not had the benefit of one dollar of that tax. I raised this matter in my speech of April 8 when we were considering the previous bill, and the minister said he would look into it. Eight months later the money remains in the treasury. At least, I hope it is still there. I do not know how many millions of dollars are there for the benefit of our native peoples. Perhaps the minister will clear up this matter either in the question period or in committee.
When is the government prepared to distribute this money to the Indian bands? Rightfully it is theirs. It will help them to build houses, to buy machinery, to raise their general standard of living and, as in my riding, to purchase the equipment necessary to farm their lands. This would mean they would no longer need to rent land. I submit that although the future development of the tar sands will benefit our Indian people, the bulk of the benefit will go to the rest of Canada. The tax money referred to belongs to the Indian people. They should be allowed to invest it as they see fit in order that they may improve their prospects. As the government has been tardy in turning over this money to our Indian people, it should, when it does pay it back, pay it back with interest accrued for the last eight months. One could argue that the tax collected since April 1, 1974, with respect to oil produced on Indian lands should be returned to our Indian bands. The amount, insignificant on the national scale, is most significant to the Indian people of this country.
The government, in its last budgetary proposals, wanted royalties paid by oil companies to provinces to be not deductible from income tax which those companies might owe the federal government. In essence, that proposal would have resulted in double-taxation of oil producers. Canadian oil and gas companies would pay income tax on moneys collected as royalties by provincial governments. Nowhere else in the world is a company required to pay tax on royalties it pays to a government. Ignoring the constitutional ramifications of the foregoing, which others have dealt with, let us examine how the $11.70 per barrel of oil is broken down. The federal government collects, at present, about $5.20 per barrel in export tax. The provincial government collects $2.60 per barrel as royalty. This leaves the producer with $3.90, $1 of which is consumed in
November 7, 1974

lifting and overhead charges. The producer is ultimately left with $2.90 a barrel, which is the total amount of money available to him for the purchase or lease of acreage, exploration costs, paying the hundreds of small, independent companies to drill the wells, investment in new facilities and, of course, profit.
Should the producer be required to pay a tax on the provincial royalty, the breakdown would be as follows: $5.20 would still go to the federal government as an export tax, $2.60 would still be the provincial royalty. However, there would be $1.96 in income tax, $1.44 of which would go to the federal government. The provincial government would collect an extra 52 cents as its share. This would leave the producing company with $1.94, out of which $1 is taken for overhead and lifting charges. In the final analysis, if this bill is passed the producing company will receive 94 cents to cover all the costs I have mentioned, out of $11.70 for a barrel of oil. That is a mere pittance.
In order to find new oil, oil companies must go to the peripheral parts of the provinces, such as the tar sands in the Athabasca area of Alberta, and the Arctic. They say that to find new oil costs between $3.50 and $6 a barrel. Admittedly, they have old oil which they found at a much lower cost. However, when they average these costs they simply cannot make it on 94 cents a barrel. If the Minister of Finance (Mr. Turner) reintroduces this budgetary measure, the producing companies will receive much less money than at present. This is a matter of grave concern to provinces which are producing oil and natural gas.
Because of the lead time necessary, we must immediately move to construct transportation and production facilities to bring oil and gas to the markets of this country. Capital investment is needed for this development. In the event that the profit margin of the producing companies is substantially decreased, the oil companies will be forced to move out of exploration and go to countries which provide the incentives that so many are now providing. At the moment Canada, at current rates of production, has enough developed, recoverable resources of oil and gas to last between 10 and 15 years. These recoverable resources are estimated to account for only one-third of the oil actually in place. It is possible to guarantee 100 years of oil needs and 250 years of gas needs through coal gasification, and so on. The oil sands of Alberta are estimated to contain 300 billion barrels of oil easily recoverable by the mining method, and perhaps three times that amount through new technology.
Even given the fact that energy demands will increase from present levels, and consumption will double, the resource base is sufficient to ensure that Canada will not run short of energy for many decades. However, only through exploration can such a long-term supply be guaranteed. Without this exploration Canada will face oil shortages in the future, not because of lack of reserves but because of short-sighted policy. Smaller, independent companies recently have been playing an increasing role as explorers in western Canada. These companies do not have sufficient internal cash flow to undertake the required exploration; they, necessarily, rely on capital from investors. But the capital will not be forthcoming should a climate of relatively unstable legislative and
Oil and Petroleum
regulatory conditions prevail. The indecision reflected in government policies concerning an energy policy, and frequent changes to existing legislation, tend to make investors wary of possible future changes.
Other countries, notably the United States, are providing constant incentives to stimulate domestic exploration of oil and gas and to further research development with regard to other possible sources of energy. Proposals for restrictive tax changes are being sidetracked in the U.S. and Americans hope that by 1980 the country will be self-sufficient in its energy supply. If royalties are subject to taxation, significantly more money will be paid in income taxes from the profits earned by oil companies; little will be spent on exploration from retained earnings because the return on investment will be relatively insignificant. A loss of investor confidence will result and will preclude raising funds from Canadian or outside sources.
Surely Canada should follow the example of other nations by allowing the producing companies their present production income. Only this will encourage further resource development. The producing provinces have the right to benefit from their resources. In Alberta, one-third of the population depend on the oil industry, directly or indirectly, for employment. The province could not afford to lose this industry. If royalties are declared no longer tax deductible when the budget comes down, compensation will have to be made to the companies by lowering the royalty rate.
A large portion of the moneys the province collects as royalty must be used for the development of new industry and alternative sources of employment for the time when conventional oil supplies run out. For example, the Leduc field, discovered in 1947, lies entirely within my constituency. It provides employment for many people in the area, and these people are genuinely concerned about the future when the oil supply is depleted. Many are raising families and would like their children to remain in the area. Consequently, it is imperative that the province of Alberta develop new industries in the region, industries that will provide alternate sources of employment when the oil supply exhausts itself.
However, even given the fact that the government of Alberta will, in the face of budgetary proposals, be forded to lower the royalty rate, it may perhaps be too late to assuage the damage. Because of the uncertainty already created by the May 6 budget of this year, and in view of the possible imminent budgetary measures imposing taxation on royalties, the industry may disappear before it can be saved by the provinces.
I strongly feel that there is a dangerous precedent being set in the price-fixing proposals for oil and natural gas as outlined in Bill C-32. The government is seeking to wrest resource control from the producing provinces by giving itself the right to fix prices with or without provincial agreement. For example, should a province withdraw from the agreement or should the agreement be deemed ineffective in the opinion of the governor in council, the federal government may then, unilaterally, by regulation establish the price of oil-clause 36-and natural gas-clause 52-in that province. Surely this represents an infringement on the jurisdictional rights of the provinces. It is questionable how far a federal government may go in

November 7, 1974
Oil and Petroleum
establishing price mechanisms affecting the provinces. What the bill really says is this: I do not wish to play the game if I cannot win.
Part V of the bill, in particular clause 89, gives the government the right to appoint persons who shall have the authority to enter premises and examine and seize records of any company or province importing or exporting oil and natural gas. This provision, again, serves to reinforce my submission that the federal government is attempting to gain control of matters which should rightly rest with the provinces. Not only are the rights of the provinces infringed upon by the legislation presently before us, but total disregard of this House and the parliamentary process is evident in the contents of Bill C-32. The bill contains 95 clauses, 30 of which would confer complete discretionary power on the government, the governor in council, the minister or various boards. Specifically, there are 11 clauses granting power to the governor in council to act by regulation and by order in council. These wide regulatory powers should rest with the House rather than the government.
The government wants freedom at all times to establish an export tax on oil. As a result, the industry would be subject to a tax which varied from month to month according to government whim. The government is also seeking a free rein to grant exemptions from tax to anyone it wishes. That is in clause 12. Surely if these powers are granted, they should be subject to close scrutiny by a parliamentary committee, which in turn would present its findings to the House of Commons.


Lincoln MacCauley Alexander: Hear, hear!


Stanley Kenneth Schellenberger: The imposition of an export tax, particularly one which fluctuates in accordance with the whim of the government, poses a threat to the nation as a whole. It is a dangerous attempt to secure all the finances possible from other countries in order to subsidize our own industry. The minister has stated that the export tax against the United States should be increased. Has he stopped to think of the ramifications of such a move, or of similar moves, upon the economy of Canada? Other nations are likely to react to taxes in a reciprocal fashion. Take, for example, the case of fishmeal from Peru or bauxite from the West Indies. Nations have examined the oil pricing of the OPEC countries and in response have set higher prices for their own rare commodities, even though the price at which they were previously selling those products to Canada was bringing in considerable profit.
Because the imposition of an export tax results in an unstable market, with consequent insecurity of employment and indeterminable profit margins, companies are already moving their expertise elsewhere. There are, in Canada, approximately 360 drilling rigs operated by 55 contracting companies. Of these, 341 rigs and 47 companies are located in western and northern Canada. The drilling contracting industry provides an essential service to the petroleum companies, and any policy designed to squeeze justifiable profits from oil companies will have a more severe impact on independent companies than on the five large international firms. This means the Canadian drill-

ing industry will suffer severely, because it is the smaller, independent companies which carry out the bulk of the drilling operations. Only incentives for increased markets and a higher profit margin would enable these companies to attract the necessary funds to carry out their high level of activity. On Friday, November 1, the Globe and Mail carried an article which read:
A total of 39 drilling rigs has been taken out of Canada this year to work in the United States and overseas along with about 250 key people who own or operate the units ... Most contractors say they are leaving northern and western Canada because of the lure of substantially better financial returns elsewhere... The hardware is in growing demand in the United States where a rush to find new crude oil and natural gas supplies has brought into use almost that country's entire inventory of approximately 1500 land-based units. In addition, Middle East countries, particularly Iran and the Persian Gulf states, require more drilling rigs to develop their production potential. The economics of operations outside Canada are often better... Some contractors say they are "fed up" with uncertainties over taxation and energy policies in Canada. He (Alberta Premier Peter Lougheed) has laid the blame at Ottawa's doorstep for failing to bring about a climate conducive to resource development.
Canada must ensure that her resources are competitive on the international market. We cannot afford to hoard resources which are in plentiful supply, nor can we afford to leave them undeveloped. Mexico has recently found fresh sources of oil, there is great potential from Sweden and Norway in the reserves beneath the North Sea, and Russia and China are self-sufficient in petroleum resources. But Canada, which is probably the most wealthy resource country in the world, whether on a per capita basis or otherwise, may find herself a net importer of oil in as little as eight to ten years. As I mentioned previously, conventional oil supplies already proven will run out in approximately 13 years. If the federal government continues to socialize the industry, we may find ourselves a have-not energy nation rather than one possessing sufficient energy resources to assist underdeveloped countries. Approximately 12 OPEC nations have been discussing the possibility of rationing petroleum and petroleum products for internal consumption in an effort to assist other nations in the event of a crisis arising. If the government fails to provide incentives for the further development of our resources industries, Canada may be one of the needy nations seeking help from other, more developed countries.
I would like to speak for a few moments about the export tax provisions affecting natural gas as outlined in clauses 5 and 7. Natural gas has always been a strictly provincial commodity. Never has an export tax been charged on it. The imposition of such a tax, and the price fixing mechanisms covering gas as outlined in clause 52, are further examples of the government's trend toward socialization of our natural resource industry and the assumption of virtually complete control over it. Is this indicative of a move to gain control over all sources of energy? Will an attempt soon be made to control the pricing policies followed by the hydroelectric power industries of Ontario and Quebec and the coal industries of Ontario and the prairies?
Considerable sums of money are being taken from the provinces, yet they still have the expense of maintaining efficient health care and educational facilities as well as

healthy resource industries. The province of Alberta is showing itself to be a great Canadian citizen by giving up $5.20 per barrel of oil, almost $6 million per day, or $1.3 million per year, to eastern Ontario. Do not misunderstand me: we are giving it graciously to our fellow citizens east of the Ottawa Valley. The wealth of others is of great concern to us.
Before closing I should like to mention one other matter. This party asked that a pipeline be constructed that would secure a supply of energy to eastern Canada and prevent the outflow of money to the coffers of the already overrich. This pipeline should have been built long ago. Its existence would have eliminated much of the discussion in which we are involved today and it would give us security of supply in the event of another energy crisis. In closing, I would offer a word of caution and advice to the government. Do not lose sight of the fact that past experience has proven that free enterprise and initiative are better alternatives to the development of a country than the socialization of its successful industries.


Mr. Real Caouette (Temiscamingue):: Mr. Speaker, I listened with a great deal of attention to the remarks of the previous speaker. Bill C-32 concerns the use of the exportation of our natural resources such as gas, oil, wood, any sector of our economy. It clearly shows that the government cannot make its own decisions, and that it has to rely on the scientific and financial advice it receives from the United States.
Mr. Speaker, I believe that Canada should tell to the United States and to-any other country: "We are our own men. We have natural resources and you envy us for this." They do envy us because they do not have such resources. They are equipped for processing products and we are taken advantage of by those who purchase our raw materials.
Mr. Speaker, I believe it is better to tax Canadian exports to the United States than to tax Canadians. In any event, we note that the United States seem to have complete control over the development of our natural resources, and not only over oil and oil products.
When we listen to Premiers Barrett of British Columbia, Lougheed of Alberta, Blakeney of Saskatchewan and Schreyer of Manitoba, we are astounded to hear that they are threatening to separate from Canada and join the United States if we do not accept their conditions.
I am as much in favour of the Western provinces as I am of the Eastern provinces.
Some 30 or 40 years ago, when there was a drought in the West and oil had not been discovered yet, the Eastern provinces were sollicited, taxed and forced to accept certain conditions to help the Western provinces who were suffering most terrible hardships.
Mr. Speaker, we did not object to that, even though we heard some people say: "We are tired of supporting the West."
Nowadays, we hear the same type of people in the West say: "We have oil." Not so long ago, Mr. Harridence, a separatist from Alberta,-I appeared on television with him in Toronto-was saying:
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"Let those eastern bastards freeze in the dark". Those were the words from your province.


An hon. Member:: No, they were from Alberta.


David Réal Caouette: They speak in exactly the same way as the NDP out there.

Mr. Speaker, the leader of the New Democratic Party (Mr. Broadbent) calls me Real. At least, he knows my first name, as he knows also that I am right, because the situation is the same in Saskatchewan, not in the oil industry but in the potash industry. That government said: "Let us control it". Effectively it took over the industry, but prices are now three times higher in Saskatchewan.


An hon. Member:: What about cars? Tell us about cars.


David Réal Caouette: The same thing applies. Why aren't you going to Europe to buy yourself a car? They are all built in the United States.

Mr. Speaker, I have no objection at all to the Premiers of those provinces standing up and saying: Well, we have resources and Eastern people must suffer because we do have those oil resources.
Mr. Speaker, I never heard anything like this in the province of Quebec, except from the mouth of separatists: Let the Westerners starve, we have too much fish, but let them die and dry up, because we are overproducing.
In 1929, 1930, 1931, 1935 and 1936, that is during the Depression, we in Eastern Canada have made every sacrifice to maintain farmers in Western Canada, and we did it without grumbling.


An hon. Member:: We still are!


David Réal Caouette: We are still making sacrifices without grumbling. Today, we hear these people from Alberta, like Mr. Harradence, a lawyer, trying to teach us something. And a lawyer is supposed to be intelligent.


An hon. Member:: He is supposed to!


David Réal Caouette: But he is not, that is clear, if he says that he was glad to let Easterners freeze in the dark.


An hon. Member:: Tell that to Mr. Wagner.


David Réal Caouette: Repeat that.
The hon. member for Saint-Hyacinthe (Mr. Wagner) is not here at the moment and I want to stay in order.
Mr. Speaker, I cannot understand that kind of attitude. There are in Canada so much space and so many resources, enough to meet the needs of all Canadians, not only in one region, but all across Canada.

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In Quebec, we have huge hydraulic resources. If we said to Ontario: "Listen, you do not have any, so we are going to let you die in the dark. We are not going to sell you any more electricity, because you are Ontario." We could say the same to the United States, because we export electricity there too.
Mr. Harradence, or others who think like him, should realize that if I had to resort once again to candles, to rags soaked in pig or beef fat for lighting I would be one of the first who would get angry and say to Quebec: "Give us electric power, give us power".


Eudore Allard: Give us "juice".


David Réal Caouette: I shall say like my colleague from Rimouski: "Give us 'juice'." That is right.
Mr. Speaker, I do not understand the position of those _who say: "We are against the bill because it has been introduced by this government." What would the Progressive Conservative government do in its place? I followed in 1962 and 1963 with my colleagues then sitting in the House the struggle led by the Premier of British Columbia against Ottawa to obtain recognition of a treaty or trade agreement between the United States and the British Columbia government, namely the Columbia River Treaty.
The then Premier of British Columbia, W. C. Bennett, led the struggle against the then Prime Minister, the right hon. member for Prince Albert (Mr. Diefenbaker) and pursued it under the Pearson administration in 1963 and 1965. It lasted seven years and it was recognized afterwards that the Premier of British Columbia was right. The Prime Minister of Canada, the President of the United States as well as the Premier of British Columbia then signed the treaty which is still in force.
Mr. Speaker, the natural resources belong to a province. Alexandre Taschereau, Maurice Duplessis and Jean Lesage were all for it and so is Robert Bourassa. The natural resources belong to a province, but it does not mean that the province must turn away from the others. We live in the same country, so the provinces should agree about their respective natural wealth. We need the gas of Alberta.


An hon. Member:: Even in Saint-Hyacinthe.


David Réal Caouette: Even perhaps the hon. member for Saint-Hyacinthe is now heated by gas which comes from Alberta.
Mr. Speaker, we may discover within two or five years oil deposits in the Atlantic as extensive as those in Alberta or British Columbia.
They say that there might be enough oil in the Alberta tar sands to meet our needs for the next 300 years. Who can say that, six months from now, in view of the search being carried out in the Atlantic and the Gulf St. Lawrence, there will not be, available to us, reserves easier to tap than the Alberta tar sands?
How short-sighted Messrs. Blakeney, Lougheed and Barrett are! When, five years from now, nuclear energy is used, not to kill people, but to serve them, who knows, natural gas might very well fall out of use. I do not mean

to say that this will necessarily happen, but it might. The coal mines in Western Canada, Nova Scotia, Cape Breton and elsewhere have been inactive for a great many years. Now, they are saying: We could use coal to make electricity. That is why they are trying to find openings on world markets for Eastern and Western coal; the day may come when we are unable to meet the demand for it.
Mr. Speaker, those are the facts of life, as far as energy is concerned: one year, you have enough, the next, you don't. This is not unique, for such is the case also in agriculture. Five years ago, they told cattle producers: "Your increasing production will be our salvation". Today they are saying: "We are in a mess now because you overproduced".
Faced with this dilemma, what are we going to do? Will the government make its position known, or will it let anarchy take over Canada? The same thing will happen in the farming and industrial areas, no matter the level of production or Bill C-32 which will impose an export charge.
I feel we should stop giving away our resources to the United States, saying: "Manufacture this material and rob us clean, selling it back to us whether at wholesale or retail prices".
Since we own the basic resources, Mr. Speaker, why not build our own plants to make manufactured goods and sell them ourselves? This would create jobs and replace the depression forthcoming clearly with prosperity.
Mr. Speaker, as I often say, iron ore is bought at Sept-Iles or Rouyn-Noranda at a rate of 2 or 3 cents per ton, and sent to the United States. It comes back afterwards in the form of cars, refrigerators, television sets, or any other manufactured product sold at prohibitive prices. The price of a car which was sold $2,000 two, three, or four years ago has nowadays climbed up to $5,100, while being made with primary products coming from the Province of Quebec or Canada.


An hon. Member:: Dealers are the ones who make the profit.


David Réal Caouette: Finance companies, rather. The hon. member says to me that dealers are the ones who are making the profits. Mr. Speaker, I for one am a dealer, and I will produce my balances in order to prove beyond any doubt that the Trader's Finance Company is making at least five times more money than I am in my business, by financing while I provide the services. The company is not accomplishing any concrete work and it makes profits, while we do all the job and we are the ones who lay out the money. This is where the difference lies.
Mr. Speaker, such things happen in the automotive industry, as one of my colleagues just said, and the situation is the same as far as energy production is concerned. We sell our energy to the United States, telling them: "Do something with it, then sell it back to us." This is where we get lost in assumptions of all kinds. What they do, we can do it in Canada. We have nothing to learn from them. All a responsible and sovereign government has to do is to make sure that our raw materials are put at the disposal of our secondary industries here.
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Instead of giving them to the United States, let us sell them materials and manufactured products so that our dear friends, the Americans, may proclaim loudly that Canada allows them to go on living. These guys down there cannot live without the natural resources of our country. If we want to become masters in our own house, I think this bill represents a step forward. Let us say to the Americans that we are willing to sell to them but that they will have to pay us. Let us stop them from suckling Canadians. Let us tell them that they will have to pay for the work done by Canadians to serve them the Americans.
It is not because we have a grudge against them or because we hate them. No, we like them. It is because we care for them that we ask them to pay for what they take from Canada. Pay for the work done by Canadians, pay so that workers, farmers may be satisfied; pay so that Canada may be itself and so that the government may be recognized as sovereign.


Charles Joseph Clark: Mr. Speaker, I cannot take part in this debate without making a brief reference to the comments just concluded by the hon. member for Temiscamingue (Mr. Caouette).

As it is not right to say that Mr. Levesque speaks on behalf of the hon. member for Temiscamingue (Mr. Caouette), it is not right to say that Mr. Harradence speaks on behalf of all of us Albertans, especially if he talks as mentioned by the hon. member.

Having said that, I wish to advise hon. members of my concern about the danger that exists, in the sentiments referred to by the hon. member for Temiscamingue, in that in my native province of Alberta feelings might become extreme and serious if there is a continuing belief that it is the repeated thrust of federal policy to go against the interests of that province-just as there was the danger in the province of Quebec of civil unrest spreading when there was a feeling that federal policy was designed to go against the interests of that province. It is important that we recognize, in dealing with the legislation before us, that there is a real feeling that the major thrust of this legislation is directed against the two producing provinces, Alberta and Saskatchewan. There are other aspects of the bill, of course, but there is a real sense that the constitution is being changed in an effort to diminish the authority now enjoyed by those two producing provinces. If that sort of thing continues, I think members from my province, and probably those from Saskatchewan, would agree that there is a danger that we will find ourselves in a situation where the determination to remain a creative part of the Canadian confederation will wane in that part of the country.
I do not intend to take up a great deal of time in this debate, particularly because many of the technical aspects of the bill have been discussed and many of its implications, not simply for the petroleum industry and the province of Alberta but also for the people who work in the industry and count upon the capacity of Alberta to industrialize in a secondary industry way. I share the view
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expressed by my colleague, the hon. member for Wetaski-win (Mr. Schellenberger), that there is a real sense of insecurity now among my constituents with regard to living in the oil patch, as to how long they will be able to continue living in the towns where they are now, as well as how long the industry will continue to be there.
The point I wish to make with regard to this legislation is primarily with reference to the degree to which it represents an extension of federal power, an intrusion into the provincial domain. This bill, as has been noted by many others, is a change from the predecessor bill considered in the previous parliament. It is not, as was the other one, a temporary means to implement an agreement reached by heads of government. Instead, it is now a permanent means by which, to quote the minister himself at page 917 of Hansard, "the federal government will give itself increased powers". The excuse that the minister uses-he used it earlier in his remarks, as recorded at page 915 of Hansard-is that this extension of power is necessary "to provide for oil price restraint in situations where either such agreements cannot be reached or, having been reached, are terminated or are found not to be effective." The danger with that rationale is that it removes from the central government the incentive to come to agreement with the provinces on questions of this kind, and it also grants a most dangerous unilateral power to the federal government to act alone when agreements are not effective and consequently when it is in a position to use the increased power which it seeks in this legislation.
What we have here, when everything else is stripped away, is an attempt to acquire unilateral power to impose a price control system on a commodity regarding which primary jurisdiction has been vested in the provinces, under the Resources Transfer Act, since the 1930s. What is most frightening about this bill is that it does not stand alone: it follows similar action taken in the recent past and it sets a frightening precedent for the future, not only for the provinces directly attacked now, namely, Alberta and Saskatchewan, but for all provinces. The point has been made that this new, extended power would apply not only to oil and gas, and not just to Alberta and Saskatchewan, but to other resources in other provinces, at other times. What has perhaps not been emphasized enough is that this attitude of invading provincial jurisdiction is evident, not just in this bill but in other actions of the government, most notably actions concerning oil and gas but also potential actions concerning other matters over which the federal government has or might be able to concoct some kind of jurisdiction. It is important to note that this bill is part of a pattern of aggression against the petroleum producing provinces regarding the control of their resources. The point has been made several times, but I believe it needs emphasis here, that these are depleting resources and also they are the only means by which Alberta and Saskatchewan can develop the kind of secondary industry base which will ensure the maximum contribution of these provinces-provinces with great potential-to the strength and development of Canada.
I think I should mention, in passing, that another difference between this bill and the preceding legislation on this subject was considered in the last parliament is this: at that time there was general agreement about the need for some kind of quid pro quo; that if we were going to

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legislate an agreement by which the producing provinces surrendered potential revenue, we would have to compensate the producing provinces by recognizing their needs in transportation and in industrial development. I regret that there appears to be no mention now of such quid pro quo, no mention of compensation in other policy fields for the money that has been lost by the producing provinces under the agreement to which this legislation is giving body.
I want to come back to the pattern of aggression that has developed against the producing provinces. It began with the export tax which, whatever its justification, was imposed in a way that was absolutely unjustifiable because it was done virtually without consultation.


Mr. Blais:: Mr. Speaker, a short while ago the hon. member commented on the minister's speech as reported at page 917 of Hansard, from which he quoted the following words: "the federal government will give itself increased powers". However, he neglected to indicate that that particular sentence is preceded by a number of conditions before these powers will be given to the federal government. I think I should draw this fact to the attention of the House.


The Acting Speaker (Mr. Penner):: The hon. member may feel that he wants to draw something to the attention of the House. However, in fact he is not gaining our attention on a point of order but is, rather, intervening in the debate.


Charles Joseph Clark: I am delighted to hear from the closest thing to a prairie member of the Liberal caucus who has become their instant expert on energy questions. I am also pleased to note that he has lost no time in learning the tactics of diversion that have been employed by members of the government party on the front bench, as well as in this bill. I say this because whatever conditions appear to be attached, and however many clauses there are in this legislation, the simple fact is that the bill constitutes an attempt to intrude upon the jurisdiction which was granted to the provinces in the Resources Transfer Act of the 1930s and it is a clear attempt to increase the powers of the federal government.
I want to continue, now that we have witnessed some excitement on the other side, with a review of the pattern of aggression, of which this is only the most recent part, which began with the imposition, without consultation, of an export tax a year ago. It is a pattern which was continued with the proposition of a tax on royalties in the budget speech. I make the point here that whatever the diversionary attempts of the Minister of Finance (Mr. Turner), the thrust of this proposed tax then, as it might be now, was not a question of revenue but of jurisdiction. It is not money that is at issue here; it is the question whether the federal government or a provincial government has the right to exercise a controlling influence over a national resource within a province. As was made abundantly clear by the hon. member for Qu'Appelle-Moose Mountain (Mr. Hamilton) in his opening remarks on this bill, the use of the taxing power to try to accomplish other goals, particularly other constitutional goals, is contrary to the constitutional practice of the country.


Jean-Jacques Blais: Mr. Speaker, I wonder if the hon. member would permit a question at this time with respect to a statement which he just made.


The Acting Speaker (Mr. Penner):: Order, please. Will the hon. member for Rocky Mountain (Mr. Clark) permit a question?


Charles Joseph Clark: Certainly, Mr. Speaker. I am delighted to indulge the hon. member for Nipissing (Mr. Blais).


Jean-Jacques Blais: My question is whether this power would cover distribution of a particular gas and the selection as to where it will be directed within the confederation.


Charles Joseph Clark: Mr. Speaker, I know that the hon. member has a great deal to learn about the constitutional questions involved here, but I thought he knew that question was settled as being within the federal domain. What is not settled, and is being threatened now, is the right of the provinces to enjoy primary authority, as enacted by this parliament in 1930, over natural resources. That is what is at issue in this second act in the pattern of aggression against the producing provinces, of which this bill is the most recent example.
I must say now that in light of unilateral imposition, without consultation, of the export tax, in light of the recognized although unstated goals of the proposed tax on royalties, we on this side of the House, and certainly members from Alberta, must entertain certain suspicions about the government's motive in renewing interest at this point in a formula for repatriation of the Canadian constitution. We have to ask whether the motive for this most recent announcement is, in fact, to repatriate the constitution or whether this might be another instrument of pressure by which the central government can attempt or threaten to limit the provinces.
It was, of course, this proposal for repatriation that was a major priority in the first major speech in this parliament by the Prime Minister (Mr. Trudeau). It is worth wondering why the Prime Minister thought it necessary to raise this question at this time, unless it was in the context of the continuing pattern of pressure that has been brought to bear upon producing provinces in relation to petroleum questions. I think it is clear that if the formula of the Victoria conference was now in force, in an emergency the government could threaten to use it against the producing provinces regarding their constitutional right in relation to natural resources, just as a threat was used in some of the more passionate speeches in the debate of a year ago. There was a suggestion in the press, although I do not believe there was in this House, that the federal government might be able to use its authority on matters in the national interest to intrude upon this particular responsibility, and perhaps they are going to make it part of the thrust regarding the question of repatriation.
At any rate, Mr. Speaker, the bill before us is the third part of the "triple whammy" being used against Alberta by this government. Whether repatriation is used as another weapon, this assault upon the resource provinces must have one of two motives. The motive must be, first,
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political, to try to turn region against region for political purposes. I, personally, suspect that was one of the motives that inspired the predecessor of this legislation, and I have to say it worked; but had it been used by any other party it would have been severely criticized in the country. Second, the motive must be a simple ideological one, a view of federalism which is determined to build up the central power and to resist any effort by any province, even if acting within its own jurisdiction, to develop its particular strength without the outright approval or control of the central government.
There is, naturally, a different perspective on the petroleum question as between western Canada and the rest of the country. In most of Canada it is seen as a question of supply and price. In Alberta and other regions of the west it is also seen as the essential means by which we can industrialize. It is a sad fact of confederation that Ottawa paid little attention to western problems or potential for industrialization when we had no means of our own to accomplish that goal. Now that we have the means to accomplish the goal, there have been attempts to control resources and there has been insistence by the Prime Minister on participation in discussions between the provinces of Alberta and British Columbia and major foreign investors such as Japan. A continuing game has been played with freight rates and other transportation problems on which we can get no responsible answers. Now that we in the western part of Canada have developed a capacity for secondary industry, and consequently can define a regional identity within the context of confederation, Ottawa is clamping down.
The basic assumption of this pattern of acts and the legislation before us is that the provinces cannot be trusted; it is the assumption that provincial governments and legislatures are somehow less patriotic than this parliament or the federal government; the assumption that the tendency of the provinces on questions affecting the national interest inevitably will be to damage the national interest. That assumption of malice has two basic faults. First, there is no evidence that the provinces want to tear down the nation or damage the national interest.
Certainly, on the specific question which this legislation concerns, the question of supplies of petroleum and pricing policies, there is no evidence at all of an intention by the producing provinces to extort high prices from Canadian consumers or to act in any other way, at home or abroad, to hurt the national interest. Quite the contrary: the producing provinces, and perhaps Alberta in particular, have demonstrated clearly their commitment to reasonable prices and guaranteed supply for Canadian consumers and to responsible action abroad. Some petroleum producing regions of the world have recently used their resource wealth to hold up their customers. They have used petroleum ruthlessly, not as a lever in bargaining but as a threatening weapon. That has happened elsewhere in the world, creating an atmosphere of crisis. But it has not been done in Canada. The opposite has happened in this country. The producing provinces met with Ottawa and came to an agreement which many citizens of those provinces saw as not being conducive to their interests. They acted with the utmost responsibility. They have not offered threats, but have received them and, despite being threatened, have acted consistently in a
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way which demonstrates a basic and guiding commitment to the national interest. That is the first fault of this assumption of the malice of the provinces, which is at the basis of this bill. It is an assumption without evidence; indeed, it is an assumption which all the available evidence disproves.
The second fault is that this assumption, and the heavyhanded action that flows from it, offends and denies the very basis of Canadian federalism. The assumption offends our federalism because it suggests that responsible action by a province to improve its economy is harmful to the nation, while the contrary assumption of Canadian federalism is that the whole nation benefits from the development of the special strengths of our diverse provinces and regions. The logic of this bill would lead to a country in which all the important decisions were taken at the centre, where the only power of the provinces was to acquiesce. That notion is a denial of Canadian federalism. The action in this bill denies our federalism because, in effect, it amends the constitution, taking effective jurisdiction over resource policy away from the provinces which, under the law and the constitution, enjoy that jurisdiction.
It is a raid and, as other speakers have said here, could be just the first of several raids on several rights of several provinces. Indeed, it is almost certain that this raid will set a precedent, because this is an attack without provocation, a raid without reason except the reasoning which holds that federalism is dangerous. The resource provinces which are the object of this attack did nothing to deserve it, except to possess a depleting resource whose temporary value could be used to help broaden a local industrial base and help balance the industrial development of the nation. But what would happen if there were provocation?
I am not an admirer of the Minister of Energy, Mines and Resources (Mr. Macdonald). I think he has conducted a portfolio which requires diplomacy with complete lack of diplomacy. I genuinely do not know what inspires this attitude in the Minister of Energy, Mines and Resources. Perhaps it is a simple desire to add to his personal power. Perhaps it is an arrogance that suggests that only he and his fellow elitists in cabinet are competent to discern the national interest. Perhaps it is simple partisanship directed against provinces whose governments are of parties other than his own. Or perhaps he is simply obediently following his leader, the Prime Minister, who does have a philosophy about these things or, if philosophy is too grand a word, at least a bias.
The Prime Minister's bias is that every premier has the potential of becoming a Maurice Duplessis whom the Prime Minister learned to abhor. I suspect that the Prime Minister, in influencing the policies of the government, is haunted by the memory of Maurice Duplessis. I suspect that inspires his attitude to the province of Quebec. I believe that his attitude toward the provinces of Alberta and Saskatchewan is against their capacity to develop and establish their own strengths and identities as full partners within confederation. I am afraid that the Prime Minister equates strong regions with separatism.
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An hon. Member:: What does the hon. member know about Duplessis?


Charles Joseph Clark: That is a highly contestable view, but one that is being imposed on this country. Does the hon. member want information about Mr. Duplessis?


An hon. Member:: Yes.


Charles Joseph Clark: He should consult the resident expert, the Prime Minister, when he returns. As I said, the Prime Minister's fear of federalism is a highly contestable view. It is one that is evident in this legislation and is being imposed upon parliament and upon Canada. There are some Canadians-a minority, I hope- who suspect the Prime Minister of following a calculated plan to turn the nation over to socialism or to some exotic goal. I do not believe that at all. However, I do believe that the Prime Minister is much more deliberate than he seems, and that the offensive against the petroleum producing provinces should not be seen as isolated or erratic.
The next offensive could be against other provinces, on other issues. Naturally, if that happened, some of those other provinces would be tempted to fight back, just as Alberta and Saskatchewan are tempted to respond now. That could lead to an era in which both levels of government spend their energies picking fights with each other. There are a lot of fights to pick, because there are a lot of fields far removed from natural resources, where there is overlapping jurisdiction or where one level of government could cause serious problems for another. There is agriculture, the fisheries, education, environment, native rights- the list is long. And if that kind of atmosphere develops, dominated by bickering and ill-will, it will cause trouble for all of us, diverting us from important problems of substance and inspiring more people and more regions to question the value of confederation.
We should remember, sir-and it is important for this House to remember-that if co-operative federalism is a two-way street, so is unco-operative federalism a two-way street. If it becomes the fashion to get bloody-minded, we could virtually immobilize this country as the current dispute over petroleum has already begun to immobilize the petroleum industry in Canada. But in viewing this escalation of conflict between levels of government, it would be wrong to focus on petroleum. Because if federal aggressiveness moves beyond the resources field-and there are plenty of areas where ministers who want to can find justification for interference as strong, or as weak, as the Minister of Energy, Mines and Resources has found here-the victims will not be big oil companies, which can find other fields to drill in other countries; the victims will be those Canadians who benefit from co-operation between governments and who suffer when that co-operation breaks down. They would include, for example, the Metis who are caught now in limbo between jursidictions and will be left there if Ottawa and the provinces develop an attitude of fighting instead of co-operating. It could affect educational television. It could affect agreement on freight rates and transportation policy.
We have in this bill a precedent for invasion of provincial jurisdiction for unnecessary reasons; indeed, perhaps

simply for reasons which relate to the particular, frightened view of federalism possessed by the Prime Minister and expressed by the government. Members on the other side who are worried about making the nation work should worry about the precedent which, with qualifications, is clearly contained in the bill.


Mr. Peter C. Bawden (Calgary South):: Mr. Speaker, I believe that any look at the subject of energy in Canada requires, if conclusions are to be reached, a look first at the world scenario. In the near and medium term the growth in world energy demand must be met principally from oil and gas. Any review of events in the international energy markets during the past year would focus almost solely on this, one of the most valuable of commodities. Indeed, oil power is now being ranked in importance within the world community along with military power. It is not difficult to understand why.
The oil exporting countries will have earned about $100 billion this year, and next year's total could be as much as 10 per cent higher. It is estimated that by the end of this decade the exporting countries, OPEC, could have a surplus of gold, dollars, pounds, marks, francs and other foreign currencies amounting to $650 billion; by contrast, the present reserves of the United States are now $15 billion. This fantastic transfer of capital is currently the subject of the greatest dilemma the world has ever faced and it is placing almost impossible strains on the international monetary system.
While many of the oil producing nations are raking in riches, most of the underdeveloped nations of the world are doomed to move further into the depths of poverty with little chance of staying even. Mr. Speaker, at the present time this vital matter of oil pricing is very much the subject of international discussion, and the actions of Mr. Kissinger at the present moment are directed toward softening the stand taken so far by the OPEC nations as a group. Foreign oil prices will be influenced not only by world supply and demand balances, but increasingly by the policies of major oil exporting countries with respect to expansion of capacity and determination of production policies and the interrelation between them.
There are several very key factors in the whole matter of oil prices in the near and longer range future. These factors have very direct application to Canada as well as to other world consumers. The most significant of the factors may well be the future rate of growth in the demand for oil. This is now being affected by the present high cost in most countries. It is also affected, and likely to be even more so as time goes on, by the ever increasing efforts by consuming nations toward conservation programs and even rationing. France has been one of the first of the developed countries to act, and has set a dollar limit of about $10 billion on what it will pay for imported oil next year. This will represent a 10 per cent reduction in volume, at today's prices, and stringent conservation action will be needed to live with this reduction.
One particular country stands out amongst the world's producers-Saudi Arabia-by virtue of its huge resource potential. The actions of that country in either expanding its producing capability, shutting in its production or
November 7, 1974

adjusting its prices could well spell the course that producing countries and consuming countries alike will follow in matters of oil pricing and supply.
Hon. members may wonder why such consideration should be given this rather lengthy dialogue on world petroleum, and what effect this might have on Canada. I say that the formulation of Canadian energy policy cannot take place without regard to all of the complex ingredients in the world situation. I think hon. members will agree that the events of last winter and threatened shortages to Canadians, not to mention the harmful effects of higher prices, especially to the maritime provinces, brought home to many the seriousness of cut-offs in supply from those distant parts of the world. Indeed, security of supply is unlikely to be resolved for many years when one views the current powder keg in the Middle East.
The second and decisive key element in the petroleum game as it is played around the world is how quickly sources of production other than those of the Middle East and North Africa can be brought into production. This is the key, not only to our security of supply but also to long-range pricing. At the present time, exciting production possibilities are being developed in the North Sea, the north slope of Alaska and perhaps in Mexico as well.
As in most commodities in the marketplace, Mr. Speaker, nearly everything hinges on supply and demand. The demand in Canada can be reasonably well projected over a period of years to the end of this century. This will be significantly affected, of course, by conservation programs and as well by whether, in fact, we have available either from domestic sources or imported sources the desired supply. A look at projected demand in Canada, based upon a good degree of conservation, indicates that within the next 15 years Canadians will be consuming about three million barrels of oil per day, although if demand continues to increase as rapidly as it has in recent years this figure could be closer to four million barrels per day.
On the supply side, production levels from known reserves of conventional oil production will begin to decline in about 1978, and by 1990 will be below one million barrels per day, less than half the level of today's production. I emphasize, that is production of less than one million barrels a day, with needs in excess of three million barrels a day. One of the facts of life in the energy business, however, is that one cannot simply turn on a valve to start the oil flowing. Tar sands plants require some ten years from initial planning to production. Thus, oil to be utilized in 1984 must be in the planning stages right now. A number of members here may know that several companies are at an advanced stage in oil sands planning but they are holding back on further action. The reason for this is they do not have confidence in either the oil policy or the long-term commitment of this government to the principles of free enterprise.
Arctic and offshore oil exploration is an equally confused situation. Record sums have continued to be spent, notwithstanding the fact that the risk-takers are working without any rules. Over four years ago this government withdrew all regulations relating to frontier lands, and since that time no new permits for exploration have been issued. The oil and gas industry has been running on blind faith. Off the Atlantic provinces alone this year, expendi-
Oil and Petroleum
tures for exploration will exceed $100 million. Continuity of this activity means a lot to the Atlantic provinces and in the longer term it is critical to Canada's continuing security of energy supplies for eastern Canada. However, those programs are winding down. There will be but one offshore drilling rig at work at the year end. One of the reasons is that now some 90 dry holes have been drilled without success-an expenditure of nearly $400 million. Combined with this is the lack of any regulations and the ever increasing lack of confidence in this government.
It must be remembered that the western provinces in Canada have been explored and now might be considered to have found some 75 per cent of their ultimate potential. The frontiers, which are administered for the people of Canada by the federal government, have really only scratched the surface when the vast extent of the lands is considered. I believe the whole question of Canada's security of supply and continued self-sufficiency in oil and gas is bound up in the events starting with the accord reached by the first ministers and the Prime Minister (Mr. Trudeau) at the end of March of this year. Equally important are the events which followed that historic meeting. I refer to the federal budget of May 6 and the introduction of this Bill C-32. All Canadians assumed that when the Prime Minister rose in this House on March 28 to announce triumphantly the terms of agreement with the premiers of the producing provinces. I quote the Prime Minister's words:
It is my privilege to report to the House the details of a national agreement to meet this challenge. An agreement reached yesterday which underlies the goodwill and national feeling that exist in all provinces and regions-which stands as a tribute to the vitality of our Canadian community. As I have said, yesterday was a great day for federalism.
The Prime Minister said later in his statement to this House:
The broader foundation of that agreement has been what I can only describe as a remarkable spirit of co-operation, of understanding and patience, for which I pay tribute to the spirit and generosity of our ten premiers.
At that meeting, Mr. Speaker, it was assumed by all Canadians, and one would assume by all those in attendance, that all parties to such an agreement would have all their cards on the table. The federal budget, which was brought down but a few short weeks later, made clear that the Prime Minister did not have all the cards on the table. The key elements of that agreement were that the wellhead price of crude oil would be increased to $6.50 per barrel, to be maintained until June, 1975; that there would be a single price for crude oil across Canada excepting transportation differences; that the full amount of the export charge would be used for a consumer cushion to bring down the price of imported oil from its international level of about $10.50 per barrel to the new Canadian level of $6.50. Now the government gives us the Petroleum Administration Act which introduces many items that are in direct conflict with the fundamental philosophies upon which that March agreement was predicated.
As we have seen in the past, this government is again demanding far reaching powers, much in excess of any reasonable need in the circumstances, and asks that these powers be bestowed upon the government permanently. This would be bad enough for any government, but when
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Oil and Petroleum
it is this government and this Minister of Energy, Mines and Resources (Mr. Macdonald), Canadians have good reason to fear the consequence. I say to the House that this legislation, following on the heels of the May budget, invites confrontation and distrust from the producing provinces. Surely this action is not in the spirit which brought about the accord at the end of March, nor in keeping with the words uttered by the Prime Minister about goodwill, understanding, co-operation and generosity. Nor is this the kind of legislation that promotes trust, co-operation and goodwill, a vital necessity if Canada's long-term energy needs are to be met.
The bill which we are discussing today, Bill C-32, is one further step toward breaking down any confidence or trust which might have existed between the provinces and the federal government. I suggest that clause 22 in this legislation, which provides that the governor in council may enter into an agreement with the government of a producer province for the purpose of establishing mutually acceptable prices of the various qualities and kinds of crude oil, is in fact just a sham and a farce.
Under clause 36, the consultative process becomes meaningless. The clause would give the federal government the power to set aside any agreement which had been reached with a province after discussion or consultation. What a way to negotiate! What sort of blackmail is that? This action is wrong in principle and, in the view of most people, it violates the traditional constitutional position of the provinces. The bill before us is, in fact, one of the most extreme instruments for the transfer of power to a government that this country has ever witnessed in time of peace. Neither the Prime Minister nor the Minister of Energy, Mines and Resources has sufficiently explained to this House or to the Canadian people why these excessive powers are being demanded.
I think it is safe to say that all Canadians breathed a sigh of relief when it was learned that agreement had been reached between the provincial premiers and the Prime Minister. As the Prime Minister said, it was not an easy agreement. I quote his words:
We have searched hard for solutions which would meet the reasonable aspirations of the producing provinces as well as the immediate and longer term energy needs of all Canadians.
It seemed clear from this statement, and from indications by the premiers, that compromises had been made on all sides to satisfy all needs for the foreseeable future, or at least until June, 1975-the needs of the provinces, of the federal government and, last but not least, of the producing companies. The reference in the Prime Minister's statement to recognition of the "immediate and longer term energy needs of all Canadians" suggests that he, too, saw at that time an agreement which would enable the vital search for oil and gas to continue.
Some time between the end of March and the date of the May budget, something changed. Something new entered the picture. I wish the government would take the House into its confidence and tell us what happened to bring about what amounts to a reneging on the March agreement, rendering it meaningless. In his speechmaking around the country, the Minister of Finance (Mr. Turner)

has made much of the greed of the provinces in raising their royalties so as to take, as he says, too large a share of federal revenues. But why did the Prime Minister not make this important point very clear at the meeting with the premiers on March 27? What has not been made clear to the Canadian people is that the Prime Minister was fully aware of the Alberta royalty rates when the agreement was reached with the premiers at the end of March. Should there be any doubt about this, I would set it to rest by quoting from the Alberta Hansard a statement made by the premier on October 31 of this year:
During my first meeting with the Prime Minister in March, 1974, I informed him it was the Alberta government's decision-which we would be announcing-to increase the royalty rates on incremental price increases to the extent of an average of 65 per cent for price increases over the existing average wellhead price of $3.80 per barrel.
I also pointed out to him that we would end up with an average royalty rate increasing from 22 per cent to 40 per cent of gross production, that we would have a lower rate of about 28 per cent on new oil, and that as of April 1 we would take this production in kind through the Alberta Petroleum Marketing Commission.
The federal government made a reservation with regard to the position we have taken to have access to the various streams of income throughout the country. I noted that reservation and want to refer, Mr. Speaker, because of its importance, to the statements made by the Prime Minister in the House of Commons on Thursday, March 28, 1974, the day after the oil pricing accord.
Quoting the Prime Minister with regard to his announcement of the oil pricing accord, the premier went on:
It was apparent, however, that Canadian oil resources were limited. It was apparent that if we wished to assure the huge investments necessary for adequate future supplies, somewhat higher domestic prices would be essential and that the oil producing provinces, mainly Alberta and Saskatchewan, must be assured a fair return.
The premier continued:
He went on to say that the $6.50 would go entirely to the provinces to divide with the companies as they see fit, subject of course to the federal right to use the federal corporation tax responsibly. At the time that statement was made, and during the month of April, the position was that the federal government-or perhaps I should retract and say, as of March 27 and prior to that-the federal government was aware of our proposed royalty rate structure. We were not aware of any contemplation by the federal government to change, contrary to the spirit of confederation, the historic nature of the deductibility of provincial government royalties which, as the premiers have said, has been historic and traditional in our nation.
Mr. Speaker, Canadians are being told by the Minister of Finance and by the Prime Minister that increases in provincial oil royalties are to blame for all the upset in federal-provincial relations and for the retaliatory actions taken in the May budget. Should there be any doubt about the position of the federal government with regard to provincial royalties, I would refer hon. members to a meeting of the committee on miscellaneous estimates on November 14, 1973, when the Minister of Energy, Mines and Resources replied to a question posed by the hon. member for Waterloo-Cambridge (Mr. Saltsman) as follows:
Mr. Saltsman, we anticipate that the provinces will be moving into the situation with amended royalty programs so as to capture some, at least, of this economic rent for provincial purposes. That is why the government of Alberta has our full support in the proposed change in the royalty legislation. We were of the view a year ago that they had underestimated the capacity of royalty collection in that province. We are glad the premier has changed his mind on that, and now proposes a
November 7, 1974

new royalty collection system. We hope Saskatchewan will follow suit in this regard.
To a further question, the minister replied:
I must say that in terms of the sharing of revenues it is rather a complicated account, but we feel on balance it would be preferable to leave it in provincial hands. But of course it will have some interesting consequences because of our federal-provincial fiscal measures. As time goes on, the return of additional royalties to British Columbia and to Alberta will, of course, mean an increase in the federal obligation to pay to the other provinces under the equalization provision-
The minister added that the royalties derived by Saskatchewan would, in effect, be deducted from the equalization payments the province is receiving. He went on, in his reply, to say:
Basically, at a time when there are extensive pressures on revenue at the provincial level, we feel it would be reasonable to return this royalty to them.
I think this statement makes it very clear that the government was encouraging the provinces to increase their royalties.


Stanley Howard Knowles: Five o'clock.


The Acting Speaker (Mr. Penner):: Order. I regret to interrupt the hon. member but, it being five o'clock, the House must proceed to further business.



PROCEEDINGS ON ADJOURNMENT MOTION


The Acting Speaker (Mr. Penner):: It is my duty, pursuant to Standing Order 40, to inform the House that the questions to be raised tonight at the time of adjournment are as follows: the hon. member for Edmonton-Strathcona (Mr. Roche)-Unemployment insurance-Suggested closing of supplementary office in Edmonton-Government position; the hon. member for Winnipeg South Centre (Mr, McKenzie)-Finance-Government annuities-Reason for failure to adjust interest rates; the hon. member for Bur-naby-Richmond-Delta (Mr. Reynolds)-Canadian Commercial Corporation-Allegation corporation favours certain regions in making purchases-Government action.
It being five o'clock, the House will now proceed to the consideration of private members' business as listed on today's order paper, namely, notices of motions (papers), private bills and public bills. There being no item under the heading notices of motions (papers) on the order paper, the House will proceed to the consideration of private bills.


Mr. Foster:: Mr. Speaker, there have been some discussions among the parties and, as I understand it, Bill S-ll will be under consideration during private members' hour. There seems to be a feeling that it can be disposed of without much delay. I think there has been general agreement that if we should complete this bill within 10 or 15 minutes, we will go back to Bill C-32 for the remainder of
B.C. Telephone
private members' hour, during which time the hon. members for Calgary South (Mr. Bawden) and the hon. member for Palliser (Mr. Schumacher) would speak. Then we will continue debate on second reading of the bill at eight o'clock.


Mr. McKinley:: On a point of order, Mr. Speaker, we have agreed that the hon. member for Calgary South (Mr. Bawden) and the hon. member for Palliser (Mr. Schumacher) be heard and that we then call it six o'clock, unless other hon. members wish to speak, and then continue with Bill C-32 at eight o'clock.


Stanley Howard Knowles: This arrangement is acceptable to us, Mr. Speaker.


Eudore Allard: We agree, Mr. Speaker.


PRIVATE BILLS
Mr. Hugh A. Anderson (Comox-Alberni) moved: that Bill S-ll, respecting British Columbia Telephone Company, be read the second time and referred to the Standing Committee on Transport and Communications.
He said: Mr. Speaker, the bill which I am proposing to the House is to amend a special act passed in 1916 incorporating the B.C. Telephone Company. The B.C. Telephone Company is composed of 12,000 employees, maintaining a service for 1,200,000 telephones, operating through more than 200 exchanges which link the subscribers of Canada's second largest telephone system. The B.C. Telephone Company is an investor-owned company. Nine of the 11 directors of B.C. Telephone, including the chairman of the board and the president, are Canadian citizens, as are the 15 officers of the company. As of December 31, 1973, there were 5,657 shareholders, holding 3,236,674 shares. Shareholders residing in Canada held 95 per cent of the total shares. Preferential or preferred shareholders totalled 18,052, of whom 17,819 were Canadian residents, or 98.7 per cent of the total.
The proposed amendments contained in this bill relate to the capital stock of the company, in order that B.C. Telephone can increase its total authorized capital stock to take care of future capital development. The amendments will also provide the company with a greater range of financing alternatives and arrangements that will be consistent with the Canadian Corporations Act. Of course, existing rights of shareholders, particularly voting rights, will remain unaltered.
At the present time, B.C. Telephone's authorized capitalization is $250 million. As of this date, the company has issued almost $200 million of its authorization. The balance of $50 million will not meet the estimated requirements for capital expenditure through 1976. Construction

November 7, 1974
Oil and Petroleum
programs alone in 1974 are estimated to total $193.7 million. The projected 1975 construction program is $243.4 million. It is estimated gross plant additions required during the period 1975 to 1984 will total $1,582 million, assuming a 15 per cent growth rate for the next five years of the projection, combined B.C. Telephone and Okanagan Telephone which is a subsidiary. The total from 1980 to 1984 is $2,955 million, with the total between 1975 and 1984 being $4,537 million. Of this $4.5 billion, approximately one-half can be generated internally, for example from depreciation, deferred taxes and retained earnings, leaving approximately $2.25 billion of new capital which the company will have to seek over the next ten years.
Assuming a debt ratio of 50 per cent, the company will require over $1 billion in new equity capital in the next ten years and must, therefore, seek to increase the authorized capital of the company and make the capital structure more flexible in order to be competitive with other financial institutions. The company, in its act of incorporation, did not have financial flexibility such as the issue of convertible preferred shares, redemption or retraction privileges at the option of the shareholders, and other corporate financial arrangements which no modern company is now without. In order for the B.C. Telephone to be competitive in attracting investors, these recognized financial concepts must be given the company. Because of the need to obtain funds for heavy capital expenditure and to modernize the methods of obtaining investment funds, this bill is now being presented to the House. The bill deals only with those things I have spoken about and will not effect any other activities of the company.


Mr. John Reynolds (Burnaby-Richmond-Delta):: Mr. Speaker, as a member from British Columbia, I should like to say that my party supports this bill wholeheartedly and was prepared to let it go through a couple of weeks ago, but there was a delay. We are very happy that the hon. member for Comox-Alberni (Mr. Anderson) has presented his bill today and hope our support will help speed his bill through all stages. At a future time when a private member's bill is presented from this side of the House, I trust we will receive the same support from members on the government side.


[Stage Direction]
Motion agreed to, bill read the second time and referred to the Standing Committee on Transport and Communications.


[Stage Direction]
The House resumed consideration of the motion of Mr. Macdonald (Rosedale) that Bill C-32, to impose a charge on the export of crude oil and certain petroleum products, to provide compensation for certain petroleum costs and to regulate the price of Canadian crude oil and natural gas in 
interprovincial and export trade, be read the second time and referred to committee of the whole.
Peter Colwell Bawden: Mr. Speaker, to continue in respect of Bill C-32, I believe the statement of the Hon. C. M. Leitch, attorney general of the province of Alberta, made before a committee of this House during the discussion of Bill C-18 very well sets out the concerns of that province and, indeed, of all the provinces of this country. I quote from his remarks as follows:
If one of the negotiating parties by legislation purports to reserve unto itself powers of the most dubious constitutional validity, it invites the other party to embark upon a course of judicial confrontation which to date all sides have attempted to avoid in the interests of the Canadian nation. In the last analysis and when viewed in practical terms, part III amounts to an assertion by the federal government of a right to regulate the price, the flow, the production and the sale of a provincial natural resource. It embodies a concept which, I am sure, no provincial government after measuring the consequences of its extension to other natural resources such as lumber, hydro power, potash, iron ore, asbestos, nickel, copper and coal, could accept without impliedly acknowledging that in today's economic circumstances the federal government has taken complete charge of the provinces' capacities to determine their future economic development.
In closing, I should like to enlighten the House on some of the facts of life in the province of Alberta, and more particularly in the oil and gas industry. Investor confidence is at its lowest ebb in the history of western oil and gas development. This can best be seen in the figures which indicate the level of exploration and development activity. Last year to this date there were 3,704 well completions. This year the figure to the same date is 3,339. At that time last year, the end of October, 165 drilling rigs were operating. This year there were only 133. In contrast, in many other countries in the world the number of drilling rigs and the number of holes being drilled is increasing as rapidly as those countries can find the funds, the people and the machinery to carry out their tasks.
Many submissions have been made by the oil and gas industry, as well as by the provinces, to the federal government. The industry and the provinces have been alternately warmed and cooled by events and discussions. The Minister of Finance, who seems to be able to handle negotiations much better than the Minister of Energy, Mines and Resources, has visited the provinces and has promoted discussion. On November 18 the Minister of Finance will be delivering his budget to this House, and if the compromise discussions have made progress then the feature of the last budget which disallowed the deduction of oil royalties as an expense in computing income will be dropped or substantially altered.
I wonder if hon. members realize that since the month of March, royalty oil in the province of Alberta is taken directly by the province, is sold by the province, and neither the oil nor the funds realized ever come into the hands of the producing companies. This means that the company involved is paying tax on royalty which can be as high as 65 per cent of its production and averages about 40 per cent, an amount which it never receives or touches. In Saskatchewan, the figure, I believe, is now some 60 per cent. I think that if members were to put themselves or anyone else in this position they would agree that at least it would be very demoralizing.
November 7, 1974

The entire system of export tax collection at the present time, yielding some $1.7 billion to the federal treasury, is one which if continued will eventually wipe out a satisfactory level of exploration and development. I say this because costs of finding oil are increasing at a rate which is much higher than most other costs are increasing in this country. If this should continue, the prices will have to be a great deal higher. The National Energy Board report of December, 1972, just under two years ago, stated:
The capital investment required for oil sands processing plants is in the order of $4,000 to $5,000 for each barrel of daily oil production. Thus, half a billion dollars will be required for each 100,000 to 125,000 barrels per day plant.
In the short span of 23 months this cost figure has gone to $2 billion for a plant, or in the order of $20,000 per day of investment for each daily barrel produced, which at today's price brings $6.50. I think hon. members can place that in its proper context and ask themselves whether this is an investment that would attract their capital. Incidentally, the rate of production from the tar sands projected in that report for the early 1980s is now likely to fall a long way short. This makes it abundantly clear that if the oil sands are to be developed, as they must be very soon, higher prices for crude are a necessity.
In conclusion, I would urge this House, and especially the ministers opposite, to take serious and concerted action to remove the uncertainties that are driving out risk capital from the oil and gas energy industry. J. Arthur Smith, of the Conference Board of Canada, said to the Canadian Conference of Banking in September this year: Two discouraging features of this situation have been emerging. The first is that Canadians have generally been moving towards an increasing mood of nationalism. In many respects this mood is inconsistent with the realities of the need for close international interdependence as a cornerstone for great national achievements within Canada.
Mr. Smith went on to say:
Many estimates have been made about the amount of new capital spending that will be needed in Canada over the next decade to achieve a course of outstanding development of our economic and social system through the mid 1980s. It is difficult to quantify precisely what these requirements would be. But in very round terms, I would judge that these requirements, in total, would be of the order of $500 billion.
A very substantial part of this total must be allocated to meet essential energy investment requirements-at least a quarter of this total; probably much more.
He went on to say:
But present prospects for actualizing energy related investment in this scale are not at all promising under the present combination of federal and provincial policies. Indeed, if the existing federal and provincial direct and indirect taxation of this sector of our economy is not adjusted quickly, not only will the total capital requirements I have suggested not be feasible, but a severe energy crisis will emerge that would simply preclude any capacity by the Canadian economy to advance along the potential growth path I outlined earlier. Governments in Canada now, surely, have a special responsibility to work out appropriate arrangements, with a realistic appreciation for the lead times required to use our vast potential energy resources to meet future needs in relevant and timely ways. At the moment, policies are simply not organized to achieve the needed results.
Madam Speaker, I would urge the Minister of Finance, in considering his new budget, to bring forward some very significant proposals directed toward investment in resources in Canada by Canadians. At the present time there is a very severe reversal of investment, particularly
Oil and Petroleum
by independent companies from the United States, in Canadian oil and gas development. Unfortunately, Canadians are not given the necessary incentives. They do not have the favourable tax treatment that Americans have, and thus they are in a disadvantageous position compared to foreign investors in our country. Surely, one of the most important and vital things in providing that opportunity for Canadians to invest would be for the minister to alter these rules in a way which has been urged upon him for many years.
I say that federal lands at the present time have no royalty and no regulations. At the present moment we can only guess what the minister has in mind in this area, but I say that if the federal government is to attract the type of activity these lands demand and which our future energy needs demand, we will not be able to attract the capital if royalties from federal lands are not deductible. Therefore, I say if the government cannot decide the federal royalty level for its own offshore, Arctic and frontier lands prior to the federal budget, surely the minister can, with some regard to where this level of royalties may be set, provide in the budget that a certain percentage be deductible on royalties paid to the provinces.
I would suggest here that the minister might hit an interim figure of, say, 30 per cent. On this basis I feel the industry could get on with the job. At some future time when federal royalties are decided, then perhaps this figure could be adjusted upward or downward to match the federal royalty level, and thus give the provincial lands, but particularly federal lands administered by this government, the necessary action by developers and explorers. The time is now long since past when we, as Canadians, can delay any longer the resolutions to our energy future. A heavy responsibility rests on the shoulders of this government in a most critical area. I hope and pray that this is recognized by the government and that action will be forthcoming very soon.


Mr. Stan Schumacher (Palliser):: Madam Speaker, in rising to participate in this second reading debate on Bill C-32, I should like to review for a moment, in precise terms, what is before us. Generally speaking, it is a measure to fix the price of petroleum products in Canada, that is, to give the federal government the authority to say that the price of oil shall be $6.50 a barrel until next July, pursuant to a meeting of first ministers last March. It also formalizes the taxing position that the government assumed in September of 1973 when it unilaterally, without consultation with anybody, imposed an export tax. We have seen that tax grow to a rather significant figure.
In addition to those matters, the legislation has changed since it was first introduced last April, in the last parliament, in that it gives the government power to set the price of natural gas. Also, it continues the power that was introduced in the legislation last April to allow the federal government to fix the price of oil and natural gas on a permanent basis. We have heard complaints from many speakers on this side that this legislation flies in the face of the agreement made last March by the first ministers of this country because, as we all know, the agreement was to expire next year, but the price fixing power in the bill

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before us will certainly not expire. Many comments have been made about the credibility of this government on this issue because it has become painfully apparent that the government just cannot be believed or trusted in what it says to the people of Canada on this aspect of our economic life. I think it is also evident in other areas, but it is most evident in this area.
My friend, the hon. member for Calgary South (Mr. Bawden), in the remarks which he just completed referred to some evidence that was given by the Minister of Energy, Mines and Resources (Mr. Macdonald) before the miscellaneous estimates committee last November. Although he applauded the move by Alberta to increase its royalties, and also at that time encouraged Saskatchewan to do the same, on other occasions he hinted that if the provinces did not bring down their royalties to a realistic level, the government would. Very evidently he was threatening the two provinces. What is so frustrating, and what I feel must cause chagrin in the premiers of Alberta and Saskatchewan, is that after they took the hint from the federal minister they were accused, in the last election compaign and in the last budget speech of the Minister of Finance (Mr. Turner), of trying to take all the money from these natural resources and not leaving room for the federal government to take its share from the proceeds of these resources.
First of all, I wonder how effective the government believes its income tax legislation to be. Most people in the country seem to feel, with good reason, that the income tax legislation is pretty efficient in getting money out of people who make a profit. But in listening to ministers talk, one would think that such effectiveness did not exist. They absolutely refuse to give that mechanism a chance to work. If the mechanism is faulty, why do they not change it and make it work? I cannot accept the argument that the provinces have pre-empted the taxing power of the federal government. Of course, one must realize that the federal government has other tax sources in that industry. What about all the income tax paid by the people employed in the industry, and the potential of the secondary industry? They have not given the industry a chance to mature sufficiently to produce income, because it is only now that prices have finally come to a reasonable level in that industry.
Until recently, the price of petroleum products was incredibly low: So when prices go up and the industry is on the verge of making a profit, on 50 per cent of which they would pay substantial income tax, the government moves in and, for all practical purposes, takes 100 per cent of the profit from the enterprise. Then they wonder why people are considering leaving the scene in Canada and moving to greener pastures, as they are doing in fact.
It is of great concern to me that this country might move from a position of self-sufficiency in oil and gas to a position of shortage. I do not know what goes through the collective minds of the government. It strikes me as being a very bone-headed approach to the problems of Canada. We had an international situation in 1973 which caused a crisis in supply. But at the very time that we faced this supply problem, the government introduced measures which inhibited the increasing of that supply. I think I should draw attention to figures which were supplied by

the government itself in a table that was distributed to members of the miscellaneous estimates committee this session when we were considering the supplementary estimates of the Department of Energy, Mines and Resources. They show a steady decrease in the past 11 years, so that in 1974 we will have the least exploration drilling carried out in this country for 11 years. Last year was tenth on the list, so in the last two years there has been the least exploration activity in the country. At a time when we should be increasing this activity, we are actually reducing it, primarily as the result of the actions of the federal government.
It seems to me that any sensible government policy in this area would consist of four things. First, we should ensure continuity of the supply of oil and natural gas. Second, it should be recognized that so far as supply is concerned, the achievement of the goal may take a long time, perhaps 10 or 15 years, because it appears to me that the government thinks that if they really face a problem they can turn on the tap a little more and thus solve supply problems. Of course, that does not work. The magnitude of some energy projects, in relation to the growth of domestic energy requirements, is such that they can probably only be developed efficiently in co-operation with the United States.
Hon. members across the aisle and to my left will say that I am advocating a continental energy policy. I am certainly not doing so, but I think we should face some facts of geography and use a little common sense. In 1969, shortly after I was first elected to the House, I made a speech in which I called for prompt action in the construction of the Mackenzie Valley pipeline, because it was just a few months after the petroleum discovery in Prudhoe Bay. However, in the ensuing years the government has been flipping and flopping around. At times one has the impression that they want nothing to do with it; at other times the opposite seems to be the case. For example, during the 1972 election campaign the Prime Minister (Mr. Trudeau) said the government would build a highway up the Mackenzie Valley in order to develop the valley as an energy corridor. Following that election he appointed Mr. Justice Berger of the British Columbia Supreme Court, one of his New Democratic Party friends whom he had appointed to the bench, to undertake a study of that area. With the bias and prejudices that jurist displayed before his elevation to the bench, I do not look forward to a favourable decision. In my opinion he will do anything he can to sandbag development of the project. That is the ridiculous attitude displayed by the government, Mr. Speaker. It cannot seem to come to grips with the problem at all. It should be recognized that a high degree of risk is involved in this industry, but so far the government has not recognized this.
I have heard via the grapevine that in discussions with the petroleum industry the government is inquiring if it would be happy with a 9 per cent return on the money invested in finding the oil which has been located to date, and perhaps a 20 per cent return on oil found in the future. Surely this is a rather uninformed way of approaching the problem, suggesting 9 per cent as a proper return with regard to old oil.
November 7, 1974

It might be worth looking at the amount of money that has been invested to get us to our present state of self-sufficiency in oil. Between 1947 and 1963 the industry invested $7,576,000,000; in 1964 it spent another $753.7 million, and after that until 1974 costs went up by about one billion dollars a year until they reached $2,206 million in 1974. There has been no return on that investment to date because, until recently, there was no market for the product and it was selling at distress prices.
Carrying charges have had to be paid on the money invested, and of course there has been inflation. Therefore 9 per cent return on money that has been invested for 25 years is little short of insulting, and would not inspire confidence for the future. Even at 20 per cent for new oil the industry cannot have much confidence in view of the government's record of changing its mind. I would not take its word about anything. I would want a notarized statement, or an ironclad contract before I would have any dealings with people such as the Minister of Energy, Mines and Resources.
This bill is a price fixing mechanism. In view of the government's actions to date we can be sure that it is not going to fix prices which would encourage further development of the petroleum industry in this country. Another aspect that we have to consider is the government's budgetary proposals of last May. It is attempting to expropriate all of the price increases that have been allowed by making it impossible for producing companies to deduct the expenses of their provincial royalties.
The government's pipeline policy consists of a line between Sarnia and Montreal which would carry a quarter of a million barrels a day. That is something less than half the requirement of the Montreal market alone, and represents only about a quarter of our total imports.
It is obvious that the government does not want this country to have a national oil policy in its truest sense, that is, having the country produce and distribute its own oil. It still wants to keep the option open-to allow the eastern market the possibility of getting cheaper oil. I will return to that matter later, Mr. Speaker.
Another part of the government's over-all policy in this regard is its inability to come to grips with the land use regulations which were referred to by the hon. member for Calgary South (Mr. Bawden). We have been without regulations for the offshore and Arctic areas for about four years. It is inconceivable to me how the government can expect anybody to go up there and spend millions of dollars without any assurance of what the return on their money will be, but the people who invest money have shown amazing faith to date.
This bill allows the government to tax oil exported at around $5 per barrel at the present time. The tax started in September, 1973, at 40 cents a barrel. On the one hand we have the example of Canada decrying the actions of the OPEC countries in raising the price of their products at the expense of people in Quebec and eastern Ontario while, at the same time, it demands from the United States the highest price possible, knowing that country requires feedstock for refineries that were built as a result of our pleading with them to take oil in the days before the crisis.
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As a Canadian I am not very pleased with some memories of world war II-although perhaps my memories are not too clear because of my age-when we were not selfsufficient in oil and were dependent on the United States. Then, because of world conditions, oil was in short supply. But the United States did not impose an export tax in order to obtain the highest possible price for petroleum. United States prices did not increase at all. They were controlled. The only requirement made of Canada was that we implement a system of rationing similar to that existing in the United States. I do not think we are repaying what we received when we try to extract every last cent from the United States in the present situation. I am not proud of this country's performance in this regard in the last 12 or 14 months.
As I say, the government has proposed a pipeline between Sarnia and Montreal which could carry 250,000 barrels of oil a day. I do not think that would be a wise move. Apparently Interprovincial Pipe Line Company does not think it particularly wise either, as it is dragging its feet in the matter of construction. I do not agree with those in this House who say that the pipeline should be reversible. People who make statements like that are not encouraging the implementation of a national policy with regard to oil. Either we shall become self-sufficient, and we have the resources, or we shall not. If it is government policy that we are not to be self-sufficient, why should the producers of our resources be expected to receive low, controlled prices in time of shortage, but be without protection in times of abundance? That attitude is very selfish on the part of the government, yet that appears to be its policy.
The hon. member for Waterloo-Cambridge (Mr. Salts-man) suggested that Ontario has subsidized western Canada since 1959, when a national oil policy was adopted, by paying two or three cents a gallon more for gasoline. This provided a market for western Canadian crude. He conveniently forgets that these resources were discovered with equipment and material which had mostly been manufactured very close to his riding. That equipment was not sent to western Canada on a subsidized basis. I do not recall people in my constituency buying equipment manufactured in Ontario at prices lower than they could obtain in the U.K. or the U.S.A. There we saw a case of manufacturing industries protected by tariffs making us pay higher prices. On the other hand high freight rates discourage the sale of our commodities in the central Canadian market.
Our industry has not been subsidized. If Ontario has paid a little more for its gasoline, let it remember that it sold goods to western Canada at inflated prices. The oil industry has created many jobs for the people in my hon. friend's constituency for a long time.
I am concerned about the proposed establishment of the national oil company. I understood that, originally, the idea was for this company to explore for oil so that we would become self-sufficient. Apparently the government does not intend to do this. A headline in the Montreal Star of yesterday's date reads, "Macdonald etches in role of state firm. PetroCan would buy".
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Clearly the national oil company will not be set up for the purpose of making us self-sufficient. Rather, it will be the mechanism by which we can buy off-shore oil for lower prices. The Shah of Iran has said that he would be willing to sell oil to a government agency at a lower price. He is not in favour of oil companies collecting any extra profit. If a government agency buys, he is prepared to make oil available at a 3 per cent or 4 per cent discount.
I find this interesting. The government, under the guise of creating a mechanism to bring about a greater degree of Canadian self sufficiency, is actually creating a mechanism which could help to destroy our petroleum industry. That does not say much for the Canadianism of those who support this idea. They are willing to sell out our native industry for a 3.5 per cent discount from the Arabs. That, again, shows the attitude of the government. The Minister of Energy for Ontario, Hon. Darcy McKeough, about one year ago also came out in favour of a national oil company and proposed the building of a reversible pipeline. He wanted the best bargain for oil, but was happy to sell his province's products to what some call the hinterland of this country at exorbitantly inflated prices.
Allow me to quote from the column of the syndicated columnist Bruce Whitestone who, in an article entitled "Apportioning the Blame", written last September, said:
As the energy crisis fades as a topic of popular concern, the public is left not only with sharply higher gasoline prices but also with a distinctly jaundiced view of the oil industry and its relationship with the government.
During the crisis last winter, the public blamed the oil companies-
Largely at the instigation of the Minister of Energy, Mines and Resources, let me add:
-the producer nations, and their governments for the problems.
A significant section of the public believes that the fuel shortage was contrived. The oil companies raised their prices, and their profits soared, and critics contend that the energy crisis was sponsored by the industry with the co-operation of governments both provincial and federal.
As a result of these developments, many oil companies and government officials say that one of the most difficult problems is convincing the public, as it digs into its pocket to pay record prices for gasoline and fuel oil, that profit is not a dirty word.
While most accept the idea of sacrifice, they want to be assured that it is needed and that no one is profiting from the energy problems.
Others question why, with consumers bearing the brunt of the crisis, were the oil companies allowed to reap some of the highest profits in their history. Actually, the public should have had another reaction: with profits soaring, the public could have recognized that the 'shortage' of oil would be ending soon. High profits would ensure that it would be profitable to produce more crude and process it as well. High profits, which guarantee that companies will work aggressively to take advantage of the high rewards that now exist, have two functions. They provide a ready source of capital for investment and serve to attract capital from the outside. Thus, it is not surprising to learn that oil companies are now planning to increase significantly their refining capacity and their drilling activity.
The job of mollifying the public is made more difficult by the misconception of shortages as such. In purely economic terms, in the natural world there never can be a "shortage": the problem is only one of price. If there were free taxicab rides, insufficient taxis would be available for hire. Similarly, free medical service entails an apparent shortage of medical personnel and facilities. Hence, there appeared to be an oil shortage because prices were not at levels to balance demand.
Others could argue that an oil cartel could be artificially boosting prices. However, a monopoly complete or partial, cannot impose higher

prices regardless of the consequences. Prices greatly in excess of market price levels would curb demand and adversely affect prices. Not only would the public cut back on its use of petroleum products, but substitutes would be utilized more extensively. People could use more coal, insulating materials, or even foot power!
It must be acknowledged that some of the actions of the oil companies have been detrimental to their own image and long-range interest. Not too long ago, one of the major oil companies paid a bonus of one month's salary to its non-union employees. Some oil companies have made large acquisitions, such as the purchase of Montgomery Ward.
I believe the writer is referring to the actions of Mobil Oil in the United States. In passing, I suggest the recent announcement of Imperial Oil to contribute several hundred thousand dollars to save the so-called magazine Saturday Night is an example that maybe they are not being taxed high enough. If they have that kind of money to support a magazine like that, perhaps there is something wrong with the taxation policy of this country. However, that is a decision they want to make. Probably my friends to the left applaud the decision of Imperial Oil to do that. It was probably being done with some political motive. I continue the quotation:
As for complaints that the magnitude of the increase was not necessary, that a smaller increase in crude oil would have produced plenty of funds to accomplish the goals of the oil industry, there is no accurate way to assess this claim. However, if the price rise were excessive, it would either attract more producers and greater supplies to the market, or it would curb demand so much that oil companies would have to modify the increase in order to maximize their production facilities.
When the oil producer nations virtually quadrupled oil prices last year, many assumed that these countries were acting like highway brigands. Actually, the sudden rise represented a catch-up as oil prices were level for 15 years, except for a five cent per barrel increase last year and a rise of 10 cents per barrel the year previous. Oil producer nations should not be compelled to shoulder a disproportionate share of the blame for our oil problems, therefore.
Then, cries of government unpreparedness ignore the real difficulties that were interposed whenever a new oil policy was suggested. Only now, when Canadian crude is fixed below the cost of imports is a national pipeline acceptable in eastern Canada.
One area that can be criticized is the effort of the federal government to intrude its presence in the controversy. Neither the arbitrary establishment of a price of $6.50 per barrel of oil, nor the effort to tax "excessive" oil profits in the May budget, could be justified on economic grounds.
It is apparent that if the policies of the government are allowed to continue there will be an oil shortage by 1983. A proper policy of the government should be to allow the price of oil to increase so that the oil sands can become viable. Surely it is in the interest of this country that we be self-sufficient, and not be at the mercy of other nations. It would be better to pay a higher price and have an assured supply than to take the short-run benefit of a lower price and not have a supply. It is better to pay the increased price than not have oil.
This country should be developing the oil sands. To date government policy has been discouraging. We have one plant working, Great Canadian Oil Sands, and another, Syncrude, being built. A third was to be built by Shell Canada Limited and its U.S. counterparts, Shell Explorer Limited. The U.S. part of this deal has been pulled out, and they have gone back to the United States with their money.
We should have a policy that sees further than the tip of the minister's nose. We need a policy to develop our oil sands and have a pipeline from western Canada to Mont-
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real. It must be big enough to supply the requirements of the whole nation. We do not like inflation, but we have to accept the fact it is here. The mere fact that it is here will make these oil sands more viable. We should be working toward self-sufficiency, not suffering from a self-imposed shortage as a result of the policies of this government which will assure that result.


The Acting Speaker (Mrs. Morin):: Order, please. It being six o'clock I do now leave the chair until eight o'clock this evening.
At six o'clock the House took recess.


[Stage Direction]
AFTER RECESS

The House resumed at 8 p.m.
Mr. J. H. Horner (Crowfoot):: Mr. Speaker, much has already been said in this debate on Bill C-32. In fact there appeared to be some willingness before the House adjourned for supper to let the bill go to the committee. However, although I do not intend to cover ground which has already been covered by other speakers, there are several aspects of this question which have not so far been dealt with and which I should like to discuss.
Naturally, when we consider the participation of the federal government in oil marketing our minds go back to the famous meeting in March when there appeared to be agreement between the federal government and the provinces. Bill C-18, which has already been widely discussed, attempted to set forth criteria defining the way in which oil should be marketed in the 15 months following March. The bill before us makes no provision for a time frame, and it deals with hydro and gas, as well as with oil.
Before I address myself to the subject of energy I should like to call attention to an interesting parallel between food and energy in Canada today. Today's world is seriously concerned about supplies of food and energy. Canada itself is concerned about food and the cost of food. The government tells us that the way to bring food prices down is to produce more food-a simple answer.
On the other hand we note that a study is being made of the whole principle of marketing boards-the concept of marketing boards is being thoroughly examined at this moment in a committee, or at least I should like to think it is, Mr. Speaker. However, anyone who has studied the committee reports so far will have reached the conclusion that the necessary degree of co-operation from the provinces is lacking.
British Columbia says it is not co-operating and that it does not intend to in the area of the distribution of supplies. In name, it belongs to CEMA but in fact it does not. Saskatchewan, the next socialist province, says it will co-operate all the way; it believes in a marketing system for agricultural products. But 44 per cent of its production is not involved. You see, Mr. Speaker, it is so much window dressing, so much smokescreen-unless one substitutes a different expression for "smokescreen". We don't really believe it.
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When we move on to Manitoba and study the degree of their participation, we realize that Manitoba is out for Manitoba. There is nothing strange about that. They believe they could produce cheaper than anybody else and they want all the production they can get.
Then we move to Ontario, the biggest province with the greatest consumption and, strangely enough, we find the greatest increase in agricultural production. So what I am really saying is that if one studies the whole thing in an academic way, relating marketing controls to food supply in Canada, this is an absolute farce.
Strange as it may seem, we have before the House a bill which sets up a control system on supply, on price qnd on distribution. I do not see that this is much different from the agricultural situation, because in this regard Ottawa says that it can control production and can get the best price. Let us examine that to see how successful it has been.
If we go back to April 8, 9 and 10 when this matter was before the House for debate, and reflect on what has changed in the thinking of the public, we find there has been a general acceptance of the fact that we are running out of supplies. My gosh, by 1983 we are going to be short of oil and will be net importers of that commodity. We are now really balancing our production.
The National Energy Board has not really published the facts, but there is a general agreement across Canada that our current known reserves will adequately meet our needs until about 1983, after which time Canada will become a net importer of oil. These facts were known in April, 1974.
Let us go back to the food parallel. We realize that controls do not increase supply, just as that is true of the energy situation. One might ask whether controls in the past few years have increased supply, and that is the real question every Canadian must ask himself now. Have interventions and controls by the federal government increased the known reserves or the known supply in Canada? Have they increased the availability of supply on the Canadian market? That is the question we must answer before we pass this bill.
If you ask for an objective point of view from any expert or even from any Joe Blow in Canada, you get the answer that intervention on the part of the federal government has in no way increased our supply. I am sure that the average person and the expert would come to the conclusion that controls and intervention by the federal government have not increased our supply one iota.
I am sure that anyone who went to the trouble of examining the situation in depth would find that over the past two years the interventions by the federal government have, in fact, lowered known reserves and availability of energy in this country. I do not argue with the fact that the federal government may have been responsible for lower costs, and perhaps the government has even been responsible for lowering the cost of distribution, but I ask myself whether these lower costs have been worth the risk of running out of supplies by 1983. That is a question all members of parliament and all Canadians must ask themselves. Was the price we paid in slowing down exploration,
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development and further expansion, worth this lowering of cost?
I hold the view that in 1983 oil will be more expensive than it is today, and I do not think that is an illogical point of view. In spite of the best intentions of governments and banking institutions all over the world, the OPEC countries have learned one thing. They have learned that they have power, and they are going to exercise it.
I well remember last spring when the leader of the Liberal party in Alberta made a trip to Israel. Incidentally, that seems to be the popular thing to do, Mr. Speaker. He came back and told Albertans not to worry because the federal government had set the price at $6.50. He said that was not an unusually low price because by October, 1974, oil would be selling at $6 per barrel throughout the world. He said that countries belonging to OPEC were going to reduce their world price. He said we should fear not because the federal government had been very prudent and wise in setting the $6 ceiling on Canadian oil.
Well, October has come and gone, and in all fairness I think that even the experts would agree that OPEC is not going to lower oil prices. One interesting thing when you consider whether oil prices are going to be lowered is the recent find of an unusually large amount in Mexico. President Ford went to Mexico and wanted to be buddy buddy with those fellows right away, because they have new resources and riches. He wanted to acknowledge their wealth, and he hoped that they appreciated his great country, the United States. The people of Mexico, being the great hosts they are, extended President Ford a fine welcome, but before he left they made it abundantly clear that he should not expect any oil riches from them. They made it clear that they intended to join OPEC as soon as their new oil got into production.
What does that tell any thinking Canadian? I suggest it tells us that countries in OPEC know the power they have, and that they will exercise it. Whether we like it or not, those countries in OPEC will keep the price of oil where they want it. I do not like that, but I have the sense to realize this is a fact of life. I wish most members of the House of Commons would come to that conclusion objectively. Let us forget partisanship. Let us realize that OPEC is in power.
What can we best do to assure Canadians an ample supply of oil after 1983? This bill is to control price setting, supply and flow of production. Price setting has a great deal to do with the control of supply. It is obvious to me, and I hope it is obvious to everyone in this House, that oil is an international commodity. Whether I like it as an Albertan or a Canadian does not matter; oil is an international commodity. We must have additional exploration in Canada because we have to compete for investment dollars with every other country in the business.
The United States imports perhaps 6 per cent, 7 per cent, or at the most 8 per cent of its consumption. It does not want to be beholden to the Arabs. So, huge amounts of money are spent to encourage the international oil companies to spend large amounts of money in that country so that it will be less subservient to the OPEC nations. Yet we sit contentedly in our place and say that by 1983 some

stroke of hope from heaven will save us from being subservient to the OPEC nations. We may not receive that hope from heaven. After 1983 we may be subservient to the OPEC nations, just as the United States is today.
What are we doing contrary to what is being done by the United States? It is not a matter of whether one hates or likes the United States; it is going all out to encourage exploration. What have we done? Just about the opposite. We have gone out of our way to discourage exploration, which is the worst possible course we could have followed.
Some months ago a newspaper article commented to the effect that Texas had been considered drilled out, and that there was no real need for exploration in that state. Today in Texas some 900 drilling rigs are drilling for oil and gas. We must scratch our heads and ask what brought in those 900 rigs. Perhaps 50 of them are from Canada, and maybe 25 of them are Canadian owned. What brought them from our country to that country? Did we feel that we had sufficient reserves and did not have to worry? Possibly it was because oil and energy are international commodities, and they were not aware they could get the best deal in our country.
Whether I, the government, or the Canadian people like it or not, Canadian money left Canada to be used in the search for energy and oil in the North Sea, in the United States and in the Middle East. It did not remain in Canada. I am not talking about the multinational oil companies which may have some loyalty to a parent company in some other country. I am talking about Canadian money which left Canada to be used in the search for oil in the North Sea, in Indonesia and in the United States.
We must recognize that oil, gas and other forms of energy are international commodities. I once argued for years against the social credit philosophy in the province of Alberta. I said it might work if we isolated ourselves completely from the rest of the world. I think it is generally conceded that as much as we might like to isolate ourselves, this is an impossibility. It is certainly an impossibility in respect of world commodities. So, let us recognize some of the basic facts in respect of the present legislation.
I would recommend that the bill be dropped completely, but if it is to be implemented it must be used with the greatest degree of understanding on the part of the industry. Whether or not the purists believe in the marketing board concept, price eventually will determine the supply. I do not like it, you may not like it, Mr. Speaker, and the members of the House may not like it, but it is a fact of life. What do we do from that point on?
We could say that price alone does not necessarily have to regulate supply for Canada. We could say that because of the tar sands our known reserves can supply Canadians with oil any time after about 1983, but we then would have to have a price not necessarily in step with the international price but a price over and above the cost of production in respect of the tar sands.
In other words, if some political party should decide that Canadians, because of our reserves, are entitled to a lower price than the international price, that would be well and good and I would not object to such a political decision. However, how much lower the price should be
November 7, 1974

would have to be determined by our desire to remain forever and a day self-sufficient in respect of energy. I think every Canadian must agree with this, and say that if we have the known reserves let us not ever be subservient to the Arabs in the Middle East. Let us never be placed in the position the United States is in now, of having to depend on others for 7 per cent of our consumption. That country is subservient to the Middle East nations.
If we should reach a decision that we will always, in Canada, be prepared to supply Canadians with energy at something less than the world price, I would not object, but let us not merely pick a figure out of the air as the Minister of Energy, Mines and Resources (Mr. Macdonald) has done. At one time he said $4 was good enough. Then the figure was $6.50, and finally the minister changed the criteria and other things.
We should tell those in the industry the criteria on which our decisions will be based so that they can go ahead with some degree of confidence that the rules of the game will not continually be changed. If they go to the United States, they know the rules. If they go to the Middle East, to the North Sea or to Indonesia, they know the rules. One major country in the world which can remain self-sufficient forever and a day is Canada. Yet we are creating a situation in which the industry does not have any confidence in our rules of the game because these are changed regularly.
Several months ago the price was $6.50 for a 15-month period to end on July 31, 1975. Now we do not know whether the period will be shorter, longer or what. I say that the first decision we should reach on this oil question is that we will remain self-sufficient in respect of oil, and will price it for Canadians at something less than the international price, but that we will lay down some kind of criteria to which the industry can relate so that it will be absolutely clear concerning how that price is to be reached.
The National Energy Board was brought into being by the Conservative government some years ago. The board believed this was what should be done in order to create some kind of confidence on the part of industry. Today that board has become the tool of the present minister of Energy, Mines and Resources. It answers to him while it is supposed to answer to the Government of Canada. It is not supposed to answer to the whims and fancies of some particular minister who may be here this year and gone next year.


An hon. Member:: One can always hope.


John (Jack) Henry Horner: Yes, I had a great deal of hope that he would be gone after the second last election and also the last election, but he was able to survive. But the Prime Minister (Mr. Trudeau) might move him to the Department of Finance tomorrow, and he would be involved in something else. Of course Canada would also be into something else in that case. Again, the Prime Minister might drop him completely from the cabinet. That is an encouraging thought. In any case, the survival of any minister in the cabinet lies in the hands of God, in this case the hands of the Prime Minister.
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An hon. Member:: He thinks he is God.


John (Jack) Henry Horner: But I don't. What I am really trying to point out is that the whole concept behind the National Energy Board was to create certainty in the market and a degree of understanding as to what we are going to do with our energy. That understanding has been seriously eroded under the present minister. Regardless of whether I convinced anybody of anything tonight, I want that fact firmly established.


An hon. Member:: Hear, hear!


John (Jack) Henry Horner: Thank you. That should be clearly established in the mind of every Canadian. The minister has eroded the effective work of the National Energy Board. He has made the National Energy Board into his puppet, and that cannot serve the industry in the years ahead, nor can it serve Canada. It distorts completely the whole purpose of the National Energy Board.
If you have followed me so far, Mr. Speaker, then you will agree that you and I have reached the decision that Canadians should be self-sufficient with regard to oil, and that they may well deserve a lower price than the international price. How can we best arrive at that? By creating some degree of understanding between government and industry; in other words, letting industry know what rules should be followed.
I want to advance a theory as to how much lower the price should be in Canada. The various prices that we have heard mentioned have meant nothing to me so far as some kind of a price level is concerned. These were the prices that the minister pulled out of a hat and on which some agreement was reached between Alberta and Saskatchewan and the consuming provinces, namely, Ontario and Quebec. That is not good enough; it is only a temporary decision reached temporarily by a minority government.
We should examine our known resources. Our known resources and reserves are really the Alberta tar sands. We should examine very closely what it takes to produce a barrel of oil from the tar sands and how much those costs go up every year, because inflation plays a very important part in the development of the tar sands, which development is work intensive.
The development of the tar sands will not be a simple task such as drilling a hole and finding pools of reserves some thousands of feet below the ground. It is work intensive, which means that a great deal of machinery and a great amount of momey will be needed. If you reach that conclusion, then in setting the price of oil, if we want to remain self-sufficient in energy, account must be taken of the falling off in 1983, and therefore the price must be such as to encourage development of the tar sands, and it must be a price that is adjustable, taking into account inflation.
The next question one should ask oneself is what is the cost of money, and what will be required in order to entice money for the development of the tar sands. That is the X in the equation. It is a difficult question to answer. Are there any answers today? Have we failed or have we

November 7, 1974
Oil and Petroleum
perhaps over invested in the tar sands? The obvious answer lies in what Shell did.
We have had three major commitments to develop the tar sands: the Great Canadian Tar Sands Company, Syncrude, and the Shell project. Shell International, the American part of Shell, has said no to the further development of the tar sands. Whether or not I like it as an Albertan, or as a consumer in Ontario, I should realize that that is an indication that our oil prices have not encouraged further money going into the development of the tar sands.
There is obviously one conclusion to be reached: that the price should be below the international price but that it should be higher than it is at present or we will become subservient to the Middle East and to the Arabs by 1983. This is elementary.
The minister, in examining this bill, owes the industry one thing: to tell them how he sets the price today, how he will set it tomorrow, and how he will set it the day after tomorrow. We can then conclude whether government intervention under this piece of legislation is wisdom or folly for Canada. If he does not give the industry that equation, then no matter how pious his dreams may be, and how pious the dreams of most members of parliament are, this piece of legislation will not serve Canada well in the years ahead.
I wish to return to the solution of the problem regarding what is X, and how much X represents. Let us look at the energy requirements of Canada in the years ahead. It has been said that by 1975-76 Ontario will be running short of gas. If we are thinking Canadian, let us ask ourselves why that will occur since now we have ample supplies of gas. Let us consider what is the production formula, and what is the concept of the government in that respect.
In April of last year gas was not included in the legislation. Why is it included now? Will the federal government's intervention do anything to clear the air with regard to gas and oil sales? Let us look at the gas situation for a minute. A tremendous fight is going on, beneath the surface, with regard to gas and gas sales in Canada. I suspect that the minister is fully aware of it.
Let us take a look at the situation. We have Trans-Canada, a major pipeline company, assisting in the movement of gas from the producing to the consuming areas. In my belief Trans Canada should be declared a common carrier. It is a common carrier of a commodity. This is as elementary as the fact that CNR is a common carrier-the term being of particular significance to anyone connected with transportation. This means that TransCanada Pipelines will carry gas for a price, regulated by the board, to a destination which TransCanada is able to serve. Then we have Pan Alberta, a buyer of gas, purchasing gas in Alberta. About 50 per cent of that company is owned by the province of Alberta. But that does not matter, they are a major buyer. Why did they become a major buyer?
They became a major buyer because some years ago the premier of Alberta saw that gas was selling at 16 cents a thousand cubic feet and he wanted to double the price to 30 cents. This happened before the energy scare. The premier of Alberta was considered to be a terrible fellow,

one of the worst. But if you examine the situation, he was just a little ahead of the game.
What is the dispute now? It is pretty well accepted that here in Ontario, in the consuming area, Alberta gas will sell from $1 to $1.25 for a thousand cubic feet. Pan Alberta is bidding for gas at 65 cents a thousand cubic feet, in other words, what is called in the oil and gas language, the field price. TransCanada is bidding 60 cents. There is a neat dispute going on to decide if TransCanada is a common carrier. If it is, then it has to carry Pan Alberta gas; if it is not then it can shut out Pan Alberta and the result will be that Pan Alberta will not be able to deliver what it sells.
This House just sent to committee a bill which was designed to create more competition. If we believe in that, then we have to say of this question that it creates a greater degree of competition and that is what would best serve Canadians. It is then obvious to any thinking Canadian that TransCanada must be a common carrier, and must serve all of the competing purchasers of gas. This is an elementary question which must be settled, and when this bill goes to committee I hope that witnesses will be called in order to help solve it.
The other question I want to deal with is the matter of the supply of oil, gas and energy to the North American continent. It looks as though the Alaska pipeline to Valdez is more probable today than it was last April, when it had a projected capability of 1.2 billion barrels a day. That has been increased now to a capability, when completed, of two billion barrels a day moving into the United States. That will account for about 20 per cent of the U.S. shortfall, or U.S. imports. Mr. Speaker. Thus we can see a major demand for capital in the oil industry in order to complete the Alaskan pipeline rapidly.
If one is to study the whole question of Pan Arctic, one has to study the question of government intervention. It may be said that Pan Arctic was a dream child in order to establish federal sovereignty in the north. That may be so, but is hardly a good reason for private industry to invest money in the Arctic without assurance of a good return on it.
At the moment the industry would seem to favour curtailment of exploration by Pan Arctic because there is a great demand for further exploration in the northern United States, the Middle East, and everywhere else. Pan Arctic has made some interesting discoveries of gas, but if it is to become a successful exploration company a time should be set when the product can be expected at market. Right now the time frame is the mid eighties-say 1985. That means the pipeline from the Arctic would have to be constructed in 1980. I do not say, Mr. Speaker, whether it should be in eastern Canada or western Canada, although it seems obvious now that it will probably go through eastern Canada-through Quebec into the New England states.
We have told the Americans that eventually we will not be giving them any oil at all. That statement is not going to help solve the cost of money for our energy quest. We need to tell the industry what we are going to do. Will some of the Pan Arctic gas be made available to the
November 7, 1974

midwest? If not, we should tell the industry, but if some Pan Arctic gas will be made available to the United States we should say that too. It might help solve the quest for money.
There is the tremendously complex engineering problem of building a pipeline across the Arctic ocean to the North American continent to be considered. The deepest pipeline known in the world today is something like 400 feet down, but in the Arctic it would be necessary to go down 800 feet. The best expertise possible is needed. We will not get that unless we can say that a certain percentage of gas from the Arctic will be available for export. Surely if we can look ahead one year and say that Ontario will be short of gas next year, we should be able to say what Canada will be short of in the years to come.


The Acting Speaker (Mr. Penner):: I regret having to interrupt the hon. member but the time allotted to him under the Standing Order has expired.


John (Jack) Henry Horner: Mr. Speaker, I wonder if I could just finish my remarks.


The Acting Speaker (Mr. Penner):: The hon. member requests consent to continue his remarks. Is there unanimous consent?


Some hon. Members:: Agreed.


The Acting Speaker (Mr. Penner):: The hon. member for Crowfoot.


John (Jack) Henry Horner: Mr. Speaker, I want to assure the House that I appreciate the privilege given me. I would not want to threaten hon. members with the thought that I had just warmed up to my subject, however. It is one I have become very interested in, and I have nailed down a number of very important questions facing the Canadian people today, questions which their government must answer.
In the last few minutes I have been trying to solve the problem of where the money for further development in our country will come from if we are to be self-sufficient in the 1980s, and to find the "X" in the equation. What did the government do in the case of PanArctic recently? Bow Valley Industries wanted to sell 2.2 per cent of PanArctic to SOQUIP, the Quebec government oil company. Remember we are trying to find the "X" and solve the equation of the cost of money in our energy development exercise. The federal government said no. Why? Because it felt a provincial government might interfere in the decision of the exploration route for pipelines, etc. in regard to PanArctic development.
PanArctic has not sold a thing, and will not sell a thing until the middle 1980s, yet the government jealously guards the power it has, and wants no interference from any province. How sensible was that decision? It created difficulties in the quest for money because it excluded a major supplier of money. I recognize, as a Conservative member of parliament, that provincial governments are major suppliers of money, being major collectors.
Oil and Petroleum
When a province of this country wanted to acquire a 2.2 per cent interest in PanArctic, the federal government refused to acquiesce. It did not want to give up any part of its power. Surely the Minister of Energy, Mines and Resources is not so hungry for power? It might be logical to say, in the banking business, that no shareholder shall control more than 10 per cent of outstanding shares. But surely it would do no harm to allow a province even a 10 per cent share in PanArctic. Ten per cent is a nice round figure.


An hon. Member:: How about 5 per cent?


John (Jack) Henry Horner: I prefer 10 per cent. It is an easy figure to deal with, Mr. Speaker. The government refused the request of the province. In my opinion that was a mistake. Why, Mr. Speaker? Any decision made by PanArctic must be supported by at least 60 per cent of the voting shares. The federal government owns 45 per cent of PanArctic, which means that it has the power of veto. If Quebec, owning 2.2 per cent of PanArctic, were to insist on the construction of a pipeline or on exploration in a certain area, then the federal government, which owns 45 per cent of the company, can veto that suggestion, because 60 per cent of outstanding shares would not vote in favour.
Also because of a lack of an in depth study the federal government foolishly stopped the sale of Bow Valley Industries to the Quebec oil company. In so doing it failed to give encouragement to the oil industry, which must remain viable if Canada is to remain self-sufficient in the years ahead.
Owing to the demand for energy, three major pipelines, the Alaskan Pipe Line, the Mackenzie Valley Pipe Line and, probably, a pipeline from the Arctic to the large consuming areas of North America, are to be built. Building them will place a tremendous strain on the international supply of money, especially on oil money. Some say, "Why not use Canadian money?" Social Crediters argue that you only need to print the money. If you did that, it would not have any value and would simply accelerate inflation.
Let me discuss the Sarnia-Montreal pipeline, which may or may not make energy available to areas east of the Ottawa valley. Personally I have never advocated the building of that pipeline, and I said so when we discussed it last winter in committee. I doubted that it would be built. I remember the Minister of Energy, Mines and Resources saying that it would be built and would supply Quebec and the Montreal markets with oil "next year." Well, "next year" is here, and the pipeline has not been built. It has not even been started. Why not? I will tell you why not, Mr. Speaker. Nobody is prepared to guarantee that it will carry oil, that it will be used.
We have heard much in this debate about the two-way pipeline to be built between Sarnia and Montreal. One day it will move oil from the west to Quebec, and the next, so say some, it will move oil from Quebec to Ontario. Mr. Speaker, you cannot reverse oil flow by flicking a switch, as you do on an electric motor. Building a two-way pipeline is a major undertaking, and a very costly one. It will not be built unless the pipeline company is guaranteed a

November 7, 1974
Oil and Petroleum
certain amount of revenue. So, we are once again back to the old equation.
The question is: how much money will this country need to solve its energy difficulties? The point is that building a two-way pipeline between Sarnia and Montreal requires a great deal of money, money which is in short supply. The question then is: is it necessary to build a two-way pipeline and, is the pipeline in itself necessary? That is a political decision. The oil industry will not build the pipeline if it fears that the government will intervene in the market. It is afraid that it will supply the Montreal market one day, and the next day cheaper oil will come in from the Middle East, Venezuela, Mexico and elsewhere, and undercut the market. So the oil industry will not build a pipeline unless it is given a guarantee that it will provide the oil for the eastern Canadian market. Otherwise the Sarnia-Montreal pipeline may not produce a return on investment.
Actually every major pipeline built in North America has been built under a guarantee that it will be used. A similar guarantee was extended to the Pine Point railway which serves the north. We said that we would guarantee that a certain number of tons would move over that railway every year. Similarly, when the St. Lawrence Seaway was built, guarantees were extended. We said that we guaranteed the movement of a certain tonnage, for a certain charge, through the system each year.
The oil companies are merely saying, "Give us the guarantee and we will build a pipeline; otherwise we shall lack confidence in the stability of the market and will be reluctant to build the pipeline." If that does not make sense to any particular member of this House, I say that he has not invested a dollar in anything and is not worth the pay he is drawing. So, if the pipeline is to be built, the government must extend guarantees that it will be used. That is a political decision.
I will not abuse the courtesy of the House. I appreciate the time which has been made available for me. I shall save further remarks for the budget debate. But let me say that in the previous budget the government undermined confidence when it said that royalties that oil companies pay to provinces will not be deductible from the income tax those oil companies owe the federal government. I will not deal with that subject at present. We shall see the government's position when it brings down the budget on November 18.
Surely the government recognizes the uncertainty which the previous budget created. We shall not solve the mythical equation I alluded to earlier with such budgetary policies. That is not the way to provide the money Canada will need if we are to remain self-sufficient in oil after 1983. I, members of this House, and people across Canada will be listening to the budget on November 18, to see whether the government is willing to help you, me and the rest of Canadians solve the problem of energy.


Mr. J. P. Nowlan (Annapolis Valley):: Mr. Speaker, I am glad to participate in the debate on Bill C-32, the petroleum administration measure. I have listened to some of the speeches. As this debate progresses to committee of the whole stage, I must say I feel a lot of sympathy with

Alice in Wonderland, her reactions to the Mad Hatter and to the perambulations of the animals in the animal kingdom in that story.
We are talking about oil and gas. We are getting heavier in its use and shorter on its supply, be it in Canada or any other part of the world. Yet we get involved in the detailed and constitutional machinations of this petroleum administration bill which, while laudable in one sense by trying to bring some order in a centralized way to the petroleum industry, will be and is divisive. It has already had a negative effect in doing what all countries of the world will have to do for their own survival, that is, build up security of supply. They must try to develop as much supply as they can economically within their boundaries.
Clauses 36 and 52 give the minister unilateral power to establish prices for crude oil and natural gas without consultation. This is in complete violation of the constitution. It makes one wonder what we are trying to achieve.
It is rather unique that we are debating this bill at this time. The Secretary of State for External Affairs (Mr. MacEachen) and the Minister of Agriculture (Mr. Whelan) are at a food conference in Rome, where the nations of the world are trying to define some overall plan to help the starving millions on this globe.
Not too many months ago there was a world population conference in Bucharest. The nations of the world tried to see what they could do about the exploding population, especially in those areas where many of the newborn will not see many new days in terms of our mortality tables.
We have the ingredients for an explosive situation that is just as volatile as the subject matter of this bill, be it gas or oil. We have an exploding population and we are trying to develop food resources to feed them. As hon. members know, we live in this finite globe. We knew this before the Club of Rome decided there was something called limits of growth, yet all governments of consuming oil countries in the western world still persist in keeping their heads in the sand, believing that oil and gas will flow from now until doomsday.
This bill does not get down to the basics. I wish to point out several areas of concern.
I see the Minister of Communications (Mr. Pelletier) is leaving the chamber. That is interesting because I was going to mention, in a most unprovocative way, that that minister should be engaged more strenuously in discussions with the provinces on the traditional problems connected with broadcasting, especially cable. If that minister tries to bring in a bill that unilaterally tries to do, in broadcasting and cable, what this minister is trying to do in the petroleum and gas industry, some parts of this country would forever foreclose. They would lock out any federal minister who came to discuss jursidictional problems in broadcasting or cable.
We are talking about natural resources in the provinces. As I say, this bill makes a mockery of the constitution. It is a beautiful example of how the Prime Minister (Mr. Trudeau) wants to revise the constitution and bring home the monitoring formula which he talked about in the Speech from the Throne debate. Why worry about the monitoring formula? Why worry about revision of the constitution when a minister, masquerading as the savi-
November 7, 1974

our, in introducing this bill in the last session in response to the Middle East crisis, tried to assure Canadians we do have oil and gas. Using that laudable objective, he produced this constitutional deformity which will do more to erode constitutional consultations than anything in the past 20 years. As I said, it makes a mockery of Victoria.
We can forget about constitutional reform. The Prime Minister better not continue to hoodwink the press and the people of this country into thinking he is sincerely interested in constitutional reform or in an amending formula. I could go on with more of these paradoxes of the Prime Minister and this government, but I would get a little emotional.
I was going to be non-provocative tonight because I believed another bill was then being moved forward, but I can see how the Canadian public and the fourth estate, the press, are being hoodwinked, sometimes by the philosophy but more often by the platitudes of the Prime Minister.
When in Brussels the Prime Minister talked about supporting Nato. He knows our support has been at such a marginal level that it makes a mockery of every protestation of support for Nato.
When the wandering troubador called the Minister of National Defence (Mr. Richardson) finally comes back from his Middle East junket and gets out of the casbahs of Tangier and Cairo, he should find out what the Department of National Defence is doing in this country. He should condescend to visit the troops in this country where the majority are, rather than making these headline seeking globe trotting trips to try to shore up a faltering ego. He knows he is not doing justice to defence in this country.
The nationalists talk about sovereignty, Reader's Digest, Time magazine and Saturday Night. The Minister of National Defence and the Prime Minister know that at this time we are not doing anything in surveillance off the east or west coasts compared with what we were doing six months ago. How can we have sovereignty in the north when there will be no maritime command flights in the north until the end of this year? When Canadians appreciate what is being done they will start to wonder how true and reliable are these things.
I have been talking about the paradoxes of the Prime Minister. I shifted to external affairs. I was relating the paradoxes in petroleum and gas and constitutional problems as they sometimes have a relationship to other areas. I notice Your Honour is getting uneasy. I was just getting wound up. I would like to develop that, but I will come back to the subject matter of the bill.
First and foremost in this bill there is the fundamental encroachment on provincial rights. It is a mockery of constitutional reform that should make any parliamentarian, and indeed any Canadian, sit up and listen with a great deal of interest to what the minister proposes in committee to resolve this question.
The Minister should look at clauses 36 and 32 and renounce those arbitrary powers which make him more influential with regard to energy than King Midas was with regard to gold. Of course, there is a difference. Every-
Oil and Petroleum
thing King Midas touched turned to gold, but unfortunately when the minister touches things they do not start to gleam and become valuable. They become strange and mixed up. He reminds us of that character in the Li'l Abner comic strip who is followed everywhere he goes by a black cloud. We remember the days when, as "old Thumper", he was demanding changes in the House rules to bring forth a new day. We remember how we battled throughout the long summer heat of July, until finally there was some recognition from across the way and the "Thumper" of that day was put out to pasture.
Here is a government with an anti-industrial bias, whether in the west or in Atlantic Canada, which is forcing exploration teams to other jurisdictions, whether to the south, to the North Sea or elsewhere.
Turning directly to affairs in eastern Canada, let me say that the whole question of jurisdiction over offshore drilling is far from being resolved. No progress has been made. Despite all the powers the federal government presently enjoys in this area there has been no real progress, although attempts have been made from time to time to reach agreement on how yields might be shared.
We in the maritimes believe that offshore mineral rights belong in the first instance to the jurisdiction most directly concerned, though obviously it would be possible to set up a centralized marketing agency charging administrative costs and so on. Yet here we are, moving into a brand new field before any success has been achieved in tactics to reduce a major source of disagreement in this area. Is it any wonder that we in the east are very reluctant to give these powers to the minister, in view of this inability to resolve some of the problems which have faced us for the last 20 years?
As to the proposal to construct a pipeline, I would remind hon. members that my party came out with a firm recommendation that a pipeline should be built from Sarnia to Montreal as long ago as 1969, as a result of a so-called thinkers' conference arranged through the energy and imagination of my hon. friend from Qu'Ap-pelle-Moose Mountain (Mr. Hamilton). I say "so-called" because I happened to be there-greater thinkers than I were present.
I would point out that there have been three wars in the Middle East since 1947. There have been wars in that region right back to biblical times. I do not wish to sound depressing but men have not died peacefully in their beds in the Middle East since the days of Jesus Christ, and I question whether they are going to die peacefully in their beds in the not-too-distant future. Mr. Kissinger, who has been trotting around the globe faster than the Globe Trotters, has not been able to arrange a firm peace in that area, and Canada's own vote in the United Nations when we encouraged the Palestine Liberation Front, allowing them to appear at the United Nations, did not help the situation. However, I shall not go into that aspect of the matter. I suppose the idea of the pipeline will come up again during the next war in the Middle East; perhaps it will start up again before the end of the year.
One of the departments interested in these developments is, of course, the Department of National Defence. It may not do very much under its present minister and perhaps, according to him, it does not have any problems.

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However, you and I, Mr. Speaker, know it does have problems. But what does the government do in its infinite wisdom? It seconds the deputy minister of that department and makes him the chairman of the task force to build a pipeline from Sarnia to Montreal. We deprive the department of his talents, and put him into a task force to build a pipeline. He must have been lassoed pretty well. Some hon. members may recall the days of Tonto and the Lone Ranger. They used to lasso the good guys and the bad guys. This deputy minister must have been well lassoed around the old jugular, the old vocal chords, because we have not heard of him since then. I do not know whether he has yet produced a report on the pipeline. In fact that pipeline may have the same place in Canadian history as the old ICR in our history.


Mr. Oberle:: Tell us about it.


John Patrick (Pat) Nowlan: I am grateful to the hon. member for that intervention, Mr. Speaker. The ICR was short for Inter Colonial Railway. It was built for security reasons to help those of us who lived in the Atlantic provinces to get to Central Canada, without being cut off at the pass by invidious Americans. You know, these feelings of nationalism did not begin with Pierre Berton or even with Peter Newman. Nationalism has for more than a century been a catalyst in the creation of this tremendous country of Canada. Anyway, the government of that day built the ICR so that the perfidious Americans could not cut us off at the pass-so that we could get to Central Canada, and tramp down to York.
It is for somewhat similar reasons we are now considering the building of this pipeline. We are trying to ensure security of supply. But I venture to say it will take another war in the Middle East before we find out what that deputy minister has come up with, Mr. Speaker.
I do not wish to leave this aspect altogether without reminding hon. members that we may have resources of oil in the east. It is not easy, as I have said, to make much progress at the present because of jurisdictional difficulties-people do not know whether to get a provincial licence or a federal licence, or both. However, the prospect is there, so we say the pipeline should not go just to Montreal but that it should be built further east to ice-free water along the St. Lawrence, so that if eastern offshore oil is discovered in the future the pipeline could be used to pump it from east to west.
Rather than always dealing with the Middle East situation and concentrating so much of our time on jurisdictional and constitutional infighting relating to the central authority versus the provincial authority, particularly on those questions which involve the production of oil, we would be much better to concentrate on questions relating to the research and development of new sources of energy.
Not too many years ago there was a gentleman who taught in parables because he found it easier to make people understand through parables than in any other way. That reminds me of the government, which deals in paradoxes. The government would have us think it is seriously concerned about the supply of oil and energy generally, but it has done very little in the way of provid-

ing funds for research and development for other energy sources.
This government's entire emphasis on sciences is bewildering, and I suggest that this is evident in the changes in policy that have occurred in respect of our defence research board and our National Research Council. We continue to see policies change with transfers from one section to another section, with the government playing one department of science against another department of science.
Recently there was a Senate task force in respect of science, and I suggest that confused the situation even more. Now we have a gracious lady who has been given responsibilities in the field of science. I hope she is able to come to grips with this whole science fabrication of the government.


An hon. Member:: She has been shifted.


John Patrick (Pat) Nowlan: Well I knew that her grace and charm would not allow her to content herself in those sterile laboratories of science. I am sure that she is now prepared to accept the wider challenges of the environment. She was not there for very long, but she has left behind her, in those areas of science where the federal government has a concern, a very demoralized staff, and I think particularly of the science aspect of our defence forces.


Some hon. Members:: Oh, oh!


John Patrick (Pat) Nowlan: Anyone across the way who moans and groans about that suggestion, and is a disbeliever, has not really talked to the scientists in the various sections of the federal government. Be that as it may, where is the leadership in respect of providing increased funds for research and development in the search for new energy sources? I am not going to talk about solar energy or nuclear energy, because we have some expertise in these fields. However, it has always been a mystery to me as a member from Atlantic Canada, representing the riding of Annapolis Valley, which borders on the Fundy Bay area, why the government has not done something about harnessing tidal power.
The Fundy tides are the second highest or the highest in the world, depending on how patriotic one is, Mr. Speaker. I do not know how many hon. gentlemen opposite, or in my party, have read the feasibility studies, or the review of the feasibility studies in respect of harnessing the Fundy tides. One of the facts produced by the feasibility study is that in one tide, in the Fundy Bay, there is as much water involved as the amount of water that flows by Prescott on the St. Lawrence with all the potential kilowatt energy there.
For eons that tide has come in and has gone out. We have had a feasibility study, and a review of the feasibility study. I understand we have now had a third study, or a review of the review of the feasibility study, yet there has been no decision taken in respect of the potential hydro power source in that area. That is a fundamental source of renewable energy. It is a more non-polluting source of energy than any other that I can think of, and it is about time a decision was made.
November 7, 1974

Having watched various governments in their efforts to solve the constitutional and jurisdictional difficulties in the smaller provinces, we are rather apprehensive about giving any minister, or any government, the right unilaterally to cut through constitutions and contracts in setting prices for crude oil or natural gas. That must be the fundamental objection to this proposed measure. Hopefully there will be some amendments when, and if, the bill reaches the committee.
The government must reverse its anti-industrial bias. I do not suggest that it should necessarily adopt a proindustrial bias, but it should develop a responsible industrial bias so that we do not continue to force oil drilling crews, be they in the west or in the Atlantic provinces, to move to foreign jurisdictions. That certainly does not assist us in organizing our supply.
In closing I should like to suggest once again that the government give serious consideration to the harnessing of tidal power. We should proceed with the construction of a pipeline, and extend it past Montreal to the Atlantic provinces. That pipeline should have a reversible potential so that petroleum can flow in both directions. We must increase our funding of research and development projects. We must spend more attention and time on developing additional energy sources.
The hon. member for Algoma (Mr. Foster) might well be interested in uranium, but I suggest uranium is just a little pinch in the area of energy source when compared to the potential tidal power in Atlantic Canada. When we see how little progress there has been in ironing out many of our energy problems, one wonders how any member of this House could possibly agree to give the government additional jurisdiction to resolve these problems, particularly when one realizes that these powers will allow the government to cut through the constitution.
I wonder how those members from Quebec, that province where there is great constitutional difficulty and division as between provincial and federal governments, could go along with this bill in its present form. Surely even they will agree that there must be some changes made in committee.
I am sure there are other members who want to contribute to this debate. I hope many of these problems will be resolved when the bill gets to the committee. As I have said before, this whole matter is a little like "Alice in Wonderland". We have a Madhatter atmosphere and on we run blindly.
There are many problems in this country, and in every country of the world, that require immediate solution. I suggest that when the nations of the world get together on our food and population problems, perhaps they can get together also on our oil and gas energy problems. Maybe a solution will be found in Rome to our food and population problems, and that is to be hoped if there is to be any sanity in the world at all.


The Acting Speaker (Mr. Penner):: Is the House ready for the question?


Some hon. Members:: Question.
Business of the House


The Acting Speaker (Mr. Penner):: Is it the pleasure of the House to adopt the said motion?


Some hon. Members:: On division.
Motion agreed to on division, bill read the second time and the House went into committee thereon, Mrs. Morin in the chair.


Mitchell William Sharp: Madam Chairman, I move that the committee rise and report progress.


Some hon. Members:: Agreed.
Progress reported.


CANADA PENSION PLAN
Mitchell William Sharp: that Bill C-22, to amend the Canada Pension Plan, be read the third time and do pass.


Mr. Paul Yewchuk (Athabasca):: Mr. Speaker, in the interest of co-operation this party is prepared to let the bill pass without any further debate. We hope this will expedite the business of the House and that due recognition of this move will be given by the government.


The Acting Speaker (Mr. Penner):: Is it the pleasure of the House to adopt the said motion?


Some hon. Members:: Agreed.
Motion agreed to and bill read the third time and passed.


BUSINESS OF THE HOUSE
Mitchell William Sharp: On a point of order, Mr. Speaker, I wonder whether we could proceed to the consideration of Bill C-27.


Robert Elgin McKinley: I, too, rise on a point of order, Mr. Speaker. I understood it was more or less agreed this afternoon that if the House were to pass Bill C-22 that Bill C-4 would be called. I realize the Minister of Veterans Affairs (Mr. MacDonald) is not here, but that was our understanding. There is an amendment at the report stage of that bill standing in the name of the hon. member for Humber-St. George's-St. Barbe (Mr. Marshall). If the House would give its consent the hon. member for Nor-folk-Haldimand (Mr. Knowles) would move the amendment on his behalf. We would be prepared to proceed in that way, rather than consider Bill C-27 at this time.


Mitchell William Sharp: Mr. Speaker, apparently there has been some misunderstanding. I was lead to believe by a spokesman for the official opposition that there was a desire to postpone consideration of the bill until the hon. member referred to would be in the House, but we are very happy to proceed with Bill C-4 now.

November 7, 1974
Veterans Affairs


STATUTE LAW (VETERANS AND CIVILIAN WAR ALLOWANCES) AMENDMENTS ACT, 1974 AMENDMENTS RESPECTING ENTITLEMENT AND ALLOWANCES
[Stage Direction]
The House proceeded to the consideration of Bill C-4, to amend the War Veterans Allowance Act and the Civilian War Pensions and Allowances Act, as reported (with amendments) from the Standing Committee on Veterans Affairs.
On the order:
November 6-Mr. Marshall-The following proposed motion:-That Bill C-4, An Act to amend the War Veterans Allowance Act and the Civilian War Pensions and Allowances Act, be amended by deleting lines 1 and 2 at page 14 being Sub-clause 11(1) and substituting the following:
"11. (1) (a) Paragraph 31 (3) (b) of the said Act is repealed and the
following substituted:
"(b) who served in the United Kingdom during World War I for at least three hundred and sixty-five days prior to the 12th day of November, 1918: notwithstanding the foregoing requirements of this paragraph, a former member of His Majesty's Canadian forces who has served less than the minimal period so required but otherwise meets the requirements shall be deemed, for the purpose of authorization and payment of an allowance, to be a Canadian veteran of World War I save that the amount of the allowance, having been calculated as if the veteran has served in the United Kingdom at least three hundred and sixty-five days, shall be reduced proportionately to an amount calculated on the ratio that three hundred and sixty-five is to the number of days in fact so served."
(b) Paragraph 31 (12) (b) of the said Act is repealed.".
The Acting Speaker (Mr. Penner):: The Chair has some doubt about this amendment. It would appear to go beyond the scope of the bill. There is some question whether it should be considered at this time.


Mr. William Knowles (Norfolk-Haldimand):: Mr. Speaker, in the absence of my colleague, the hon. member for Humber-St. George's-St. Barbe (Mr. Marshall), I wish to say a few words about this. Before he left he asked me to explain through you, to the House, that he does not want in any way to delay the passage of this very important piece of legislation which promises to do so much for the veterans of our wars. I respect the ruling of the Chair, and I feel that if the hon. member were here he would also realize the correctness of the ruling. As a matter of fact it was discussed at length in the committee.
I think perhaps there are some money items involved in the amendment. On behalf of the hon. member I respect your ruling, Sir, and withdraw the amendment on his behalf, in the hope that the bill will receive speedy third reading and be enacted into law, so that the calculations which are necessary to give effect to this legislation will be done speedily and the veterans will receive their cheques in due time.
I would also ask the minister to take notice of the intent of the amendment. While it goes beyond the scope of the legislation I hope the minister will put into effect the intent of the hon. member for Humber-St. George's-St. Barbe when he placed his amendment on the Order Paper.


The Acting Speaker (Mr. Penner):: The House has heard the request that the amendment be withdrawn. Is it agreed?


Some hon. Members:: Agreed.
Amendment withdrawn.


Mitchell William Sharp: that Bill C-4, to amend the War Veterans Allowance Act and the Civilian War Pensions and Allowances Act, as reported (with amendments) from the Standing Committee on Veterans Affairs, be concurred in.


[Stage Direction]
Motion agreed to.
Mitchell William Sharp: that the bill be read the third time and do pass.


Stanley Howard Knowles: Mr. Speaker, our attitude toward this bill is the same as the attitude expressed a moment ago regarding Bill C-22. We think both these bills are good and have had sufficient discussion. We are glad to see both of them given third reading tonight.


Some hon. Members:: Hear, hear!
Motion agreed to and bill read the third time and passed.


CUSTOMS TARIFF
Mitchell William Sharp: that Bill C-27, to amend the Customs Tariff, be read the second time and referred to the committee of the Whole House.


The Acting Speaker (Mr. Penner):: Is it the pleasure of the House to adopt the said motion?


Mr. Jack Cullen (Parliamentary Secretary to Minister of Finance):: Mr. Speaker, it is a pleasure to see such good legislation being expedited through the House. I hope we will have the same success with this bill, which may not capture the imagination of all hon. members but I hope it will capture the imagination of some.
The bill being considered by the House this evening is Bill C-27, which implements the proposed tariff reductions which were before the House at the conclusion of the last session. On October 3, 1973, the Minister of Finance (Mr. Turner) tabled in the House a notice of ways and means motion proposing the temporary removal of the customs duties on certain petroleum products. These tariff changes are set out in Schedules III and IV to the bill.
On January 10, 1974, the minister tabled another notice of motion providing for the extension until June 30, 1974, and in some cases, until June 30, 1976, of most of the tariff reductions on consumer goods which he introduced in the budget of February 19, 1973. These extensions are listed in Schedules I and II to the bill.
These motions were combined without change in a new notice which he tabled in the House on March 1.
In the budget of February 19, 1973, the customs tariffs were temporarily reduced or eliminated on a broad range of consumer goods. These tariff reductions were an important part of a comprehensive program contained in that
November 7, 1974

budget, designed to provide continuing impetus to economic growth and at the same time to deal with the upward pressure on prices.
In selecting the products on which tariff reductions were made, special attention was given to food and other consumer products in short supply, or subject to rapidly rising prices, or on which tariff rates were higher than average. In drawing up this list of products and in deciding the depth of tariff cuts, care was taken to avoid introducing measures which would jeopardize Canadian production and employment. At the same time the desire was to ensure that the tariff reductions were of sufficient scope and depth to have a dampening effect on rising living costs.
The tariff reductions were introduced initially for a period of one year. Provision was made, however, to restore the tariff on goods to the original level where cases could be established that the reduced duties would result in genuine hardship.
Relatively few complaints were received as a result of the budget tariff reductions, and not all of the objections which were registered were well founded or well documented. In certain cases, where real problems were created, these were resolved by the reduction, by Order in Council, of the duties on materials and components used in the manufacture of end products which were subject to tariff reductions.
The February, 1973, tariff reductions affected trade valued at about $1.6 billion in that year. In line with the assurances given in February, 1973, it was decided that the tariff reductions should not be continued beyond February 19, 1974, on a few products including certain fresh fruits and vegetables, canned fruits and citrus fruit juices. Imports for which the former rates of duty have been restored were valued at under $200 million in 1973.
A number of the complaints which were received were less concerned about the reductions than the fact that they were made on a unilateral basis rather than in return for concessions by other countries. In this connection it was pointed out that the reductions were made for purely domestic reasons and, because they were temporary in nature, they did not in any way impair our future bargaining position.
In the budget speech of February 19, 1973, the minister stated that the tariff reductions would be thoroughly reviewed before they expired in February of this year. The task of monitoring the movement of prices affected by the commodity tax and tariff reductions was undertaken by officials of the Department of Consumer and Corporate Affairs. The monitoring of prices showed that, in general, the benefits of the tax and tariff reductions were passed on in large measure to the consumer.
The government decided that it would be useful to continue most of the tariff reductions until June 30, 1974. The tariff reductions on sugar and related products, however, are being extended until June 30, 1976. These changes, which were based on recommendations by the Tariff Board, are covered by Schedule II to the bill.
Schedules III and IV provide for removal of the duties for certain oil products. The most important products affected are gasoline, aviation fuels, light heating oils and
Customs Tariff
diesel fuel. Heavy fuel oils used by industry are already free of duty under a provision which was to run out on June 30, 1974. It is proposed that this free entry be continued to the same date as that for the other petroleum products, namely, October 23, 1975.
Hon. members will be aware that crude oil imported by Canadian refiners has been free of duty for many years.
In light of the current demand and supply situation for petroleum products, such as gasoline and heating oils, there is clearly no need to maintain the duties on these products. I appreciate that, at current prices, the specific rates of customs duty which vary between one third of a cent and one cent per gallon do not represent a substantial part of the cost on a per gallon basis.


Some hon. Members:: Question.


The Acting Speaker (Mrs. Morin):: Is it the pleasure of the House to adopt the said motion?


Some hon. Members:: Agreed.


[Stage Direction]
Motion agreed to, bill read the second time and the House went into Committee thereon, Mrs. Morin in the chair.
B. Keith Penner: Order. The house in Committee of the Whole on Bill C-27, to amend the customs tariff.
Clauses 1 to 5 inclusive agreed to.
On Schedule 1:


Lincoln MacCauley Alexander: Madam Chairman, I just want to ask one or two questions with respect to schedule 1. Recently I had a letter from a constituent who is very concerned about customs duty or tariff applied to sacred music, and I believe it was a point well taken. Some consideration should be given to the importation of such music. I was trying to find some reference to it in Schedule 1, and perhaps because of my age I cannot seem to find it, or perhaps my bifocals are not working correctly. The only thing I can see with reference to music is something about phonograph records.
I should like to know whether any consideration is being given to the importation of sacred music and whether the government is aware of the need? Is there something that would allow us to say there should be a custom duty in order to protect our own music industry? I hope the parliamentary secretary can enlighten me on this. I did send a letter because I know a great deal of concern is registered by Hamiltonians who deal with music, primarily sacred music. I wonder if the parliamentary secretary is prepared to answer or if I will have to await the official answer. I believe it is important that we show some interest in the need for sacred music.
I see the parliamentary secretary is acquiring some assistance, so I will keep on talking until he can get working on it. I believe he heard the plea I am making with regard to sacred music.


Jack Sydney George (Bud) Cullen: Madam Chairman, I must apologize to the hon. member. I was endeavouring to get the information

November 7, 1974
Customs Tariff
he wanted from the official. I know that basically this particular bill is a housekeeping item, and I doubt if that particular thing was covered. I want to check to see if it is being looked into, however.
I understand that if the representations have been made a decision would be made on the temporary tariff basis. The official is not aware at this time, however, if the representations went directly to the minister or to the department, but they would be considered.


Lincoln MacCauley Alexander: I think I can inform the parliamentary secretary that my case went to the minister in order to register concern, but perhaps that does not make any difference. I understand the parliamentary secretary is stating that the department is aware of the matter and it will be considered. I should like to be sure, so that I can send copies of Hansard to my constituents.


Jack Sydney George (Bud) Cullen: Madam Chairman, knowing the minister as I do, I can assure the hon. member that if that letter is with the minister it will be considered by the department.


Mr. MacLean:: Madam Chairman, I have one brief general question for the parliamentary secretary. In the list of reductions there are quite a number of raw materials for food items such as vegetables, potatoes, certain types of fruit that are widely produced in Canada, and such things as bananas which we have to import. Have representations been received from producer organizations of these types of food products, and do the reductions or changes meet with their approval? Have they acquiesced in these reductions in most cases? I am thinking chiefly of vegetables, potatoes and fruit.


Jack Sydney George (Bud) Cullen: Madam Chairman, representations were made, and as a result the ad valorem rate was removed. The rate is being restored on asparagus, cucumbers, tomatoes, sweet cherries and strawberries because of the seasonal production pattern of those products. Representations were made and were given effect to in this case.
Schedule I agreed to.
Schedules II to IV inclusive, agreed to.


[Stage Direction]
Title agreed to.
Bill reported.
Mr. Deputy Speaker:: When shall the said bill be read the third time?


Some hon. Members:: By leave, now.


Mitchell William Sharp: that the bill be read the third time and do pass.
Motion agreed to and bill read the third time and passed.



PROCEEDINGS ON ADJOURNMENT MOTION

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

Douglas Roche: Mr. Speaker, when man bites dog that is supposed to be news.
I guess it is news when a politician wants to close a government office instead of opening a new one, but these are unusual times. Government is top heavy in this country. The proliferation of social programs threatens to bankrupt us. The bureaucracy which involves their administration threatens to smother us.
I do not think it is good enough to come here and talk in general terms, so I want to be specific and tell the government it will be aiding the taxpayers, not to mention restoring our faith in the governmental process, by closing the unemployment insurance office in Edmonton-Strathcona.
I am not talking about the main office in downtown Edmonton which is capable of serving the whole city. I am not talking about reducing UIC benefits to those who have a legitimate claim. What I am talking about is the superfluous bureaucratic excess which exists in the year old UIC office-the second one in Edmonton-which occupies a floor and a half, plus store front, of the most expensive property on Whyte Avenue in Edmonton.
On October 23 I raised this matter with the Minister of Manpower and Immigration (Mr. Andras), following previous correspondence which he was good enough to acknowledge, in which I had made representation to him that the office should be closed on the basis of a study I had done about its usefulness. He said at that time that, if my observations were proved valid, he would not fail to use the opportunity to reduce the service. Following that I went around and had a long conference in the office with Mr. H. Verheijen, who is the district manager in Edmonton, and with Mr. Jack Nicol, who is the manager of the Edmonton-Strathcona office. This conference confirmed me in my judgment that taxpayers would be benefited by the closing of the office.
The number of employees in the office which, as I mentioned, opened one year ago, had been reduced from 81 to 45. The piece load has dwindled by about one-third within one year; so, too has the caseload of the office downtown. My point is, and I think the facts verify this, that the total number of people in Edmonton now receiving unemployment insurance and the total number of employees processing the claims are both less than they were at the time the Edmonton-Strathcona office was opened.
At the time when this office was programmed, unemployment was high and was forecast to remain high. As we know, unemployment in Alberta is today at 1.7 per cent, surely among the lowest in the country, and there are, according to figures released by Canada Manpower, 5,752 job vacancies in the city of Edmonton alone. There are more than 16,000 vacancies in all Alberta. Actually there are substantially more job vacancies than the figures I have mentioned indicate, because some jobs are open but not registered with Canada Manpower. Actually there is a

November 7, 1974

severe labour shortage in Alberta, particularly in Edmonton.
Only tonight I was on the telephone, talking to employers in Edmonton who assure me right now that people cannot be found to fill jobs open in Edmonton.
The combination of these events has brought us to the situation in which a government service is no longer needed. This raises the interesting question of whether or not social programs enacted by the government to fulfil a legitimate need should be changed, diminished or cancelled when the need changes; or are we stuck forever with a program which is designed to meet the need when the need itself changes?
I contend, and this was reinforced by my visit, that the unemployment insurance service for the people of Edmonton would be just as effective if provided from the central location at dowtown, at a great saving. It costs $575,000 a year to run the Strathcona office. There are 1,500 square feet in this floor and a half of storefront of unused space. There are extra board rooms which are empty of people but full of furniture. They are not being used. The seating arrangement of people working there is extremely loose, and one is under the impression that the management is trying to use all the space available.
We must also consider that the average length of time people are on UIC has dropped from 11 weeks to four and one-half weeks. This reflects the control programs UIC has implemented, as well as the great demand for labour in Edmonton and throughout my own province. I think it is wrong to maintain such expensive service when it is not needed.
Finally, let me add that I wrote to Senator Hastings, of the other place. I thought he could act as a liaison man between Alberta and the government because, as you know, there is a severe shortage on the government side of members from Alberta. I figured that if I could not impress the minister with my own representations concerning Alberta, perhaps Senator Hastings could. So, I wrote to him. I wanted to find out what Senator Hastings could do about this matter.
I challenge Senator Hastings to prove his effectiveness in carrying the Alberta message to the federal government. I challenge him to come to the UIC office and study it the way I did, and they attempt to justify its existence. I challenge him to tell the minister that, if he is smart, he will listen once in a while to what members of this House are saying, because maybe we have our finger on the pulse of Alberta.


Mr. William Rompkey (Parliamentary Secretary to Minister of Manpower and Immigration):: Mr. Speaker, the hon. member in his earlier question referred to the provincial Minister of Labour for Alberta as indicating that there are 40,000 jobs vacant in the forestry and construction industry. Tonight he has given some further figures to try to substantiate his claim. We feel that the earlier figure of 40,000 was not correct and that a more realistic figure would be 12,000 to 16,000. Further, this figure applies to the entire province of Alberta, and is therefore not directly representative of the area served by our Edmonton district office.
Adjournment Debate
From a viewpoint of personal service, which is supported by most members on both sides of the House, discontinuance of the Edmonton south office could prove inconvenient to a significant number of UIC claimants located in the area.
The UIC continuously reviews staff and space requirements in line with operational objectives and anticipated workloads. A recent review has not indicated any potential savings possible in the Edmonton area at this time.
The UIC has already considerably reduced operating costs by effecting a staff reduction of 70 employees in the Edmonton centre office, and 36 employees in the Edmonton south office. These staff reductions represent the difference between January, 1974, and the end of August, 1974.
The UIC review of space requirements has indicated that in total the space occupied in Edmonton meets with the workload requirement expected during the winter, and is well within Treasury Board standards to accommodate the staff levels expected. Prior to the opening of the Edmonton south office the UIC staff's union had raised a number of grievances about the inadequacy of the space available in the Edmonton centre office.
Both the minister and I share the hon. member's interest in ensuring that our UIC offices provide effective service to our claimants within reasonable cost efficiency standards. To this end the UIC will continue to review the workload and staff requirements of all our offices, including the two Edmonton offices, with the objective of maximizing the utility of both the staff and space.
I will ensure that the further facts the hon. member has presented to us this evening will be brought to the attention of the minister and his departmental officials. May I also say it is our feeling that this time of year, with winter coming, probably is not the most appropriate time to close an office. We will review the situation over the winter and possibly consider further action in the spring. I am sure Senator Hastings will be in touch with us. We will take his representations into account as well.


FINANCE-GOVERNMENT ANNUITIES-REASON FOR FAILURE TO ADJUST INTEREST RATES
Mr. Dan McKenzie (Winnipeg South Centre):: Madam Speaker, when the Minister of Consumer and Corporate Affairs (Mr. Ouellet) is investigating cases of profiteering, might I suggest that he look into the subject of Canadian government annuities, a subject that despite its extreme seriousness, his colleague, the Minister of Finance (Mr. Turner), has apparently chosen to ignore.
The minister has received countless inquiries, requests and pleas from concerned constituents and opposition members to take some action. The injustices of the annuity plan, which border on government negligence and fraud, have been publicized by responsible members of the news media.
Elderly Canadians have been misled, or perhaps swindled is appropriate, by their own government out of enjoying some form of independence and security in their retirement years. Instead of the advertised reward for their labour and thrift, they find that the monetary results

November 7, 1974
Adjournment Debate
of perhaps 20 years of diligent toil have been so decimated by the ravages of inflation as to render them useless in coping with today's prices for the necessities of life. The government simply sits back and mutters about a contract being a contract.
When the facts are that a perpetual bond issued in 1936 at $500 is now marketable at a paltry $150, the government says, "We can do nothing," and nothing is exactly what the government has done to arrest the growth of the inflationary disease that is the cause of the worthlessness of these investments.
That was the government's side of the contract, to ensure that the Canadian dollar the annuitants gave to the government for its use would still be worth something when the annuity matured, but through irresponsibility, ineptitude, or both, the government has not fulfilled its half of the agreement, letting inflation stampede ahead unchecked. Therefore the government has an immense moral responsibility to find a fair and just solution for the holders of annuities.
Since the government has these people locked into an annuity plan and there is no chance for them to opt out, it must either bring the annuity interest and payout rates into line with today's prices, or allow the annuitants the opportunity to regain their invested capital so they may reinvest in a program which could contribute some kind of fair return toward their retirement financing. I am quite sure that almost all the people in question would welcome the chance to recover these funds which the government has sequestered and is now making use of at interest rates of more than twice what is being paid the annuitants.
But the government takes no action. As further evidence of the unfairness of this situation I cite the fact that other countries such as the United States and Great Britain have annuity programs with flexible interest rates which are responsive to the current rates in the market place, to ensure a fair return from the program.
At least one private company in Canada offers a tax deductible annuity plan which guarantees 4 per cent compound interest, plus an additional yearly adjusted interest rate determined by the earning record of investments in the previous year. A recent example is an additional payment of 3 per cent, for an actual interest rate of 7 per cent. Not only is there a much more realistic interest rate, but in this plan the principle and the acquired interest can be made liquid at any time by the investor. This is but one example of a private company turning a profit while offering annuity terms which make the government's terms seem criminal by comparison.
But over on this side of Wellington Street it seems that the government's terms cannot be brought up to a humane standard without large subsidies by way of tax dollars. This becomes difficult to believe when one considers the amounts of capital and the interest rates involved. In ball park figures, the government is paying out about $52 million in interest for the use of $1.3 billion. This compares a little too favourably to the $117 million the savings bond plan would have to pay for a similar amount of capital at present interest rates. Moreover, the annuity plan does not ensure return of the principal; this depends wholly on how

long the annuitant can survive on his meagre pension and annuity payout, and in practice we find there is no guarantee he will hold out long enough.
An example is the case of contracts Nos. 160,193 and 429,625 which were combined to produce a monthly return of $100 commencing at age 50, with a 20-year minimum guarantee. At maturity in July, 1973, the annuitant had paid $14,956 in premiums, and interest amounted to $6,227, for an annuity total of $21,183 when the payout began. But after the 20-year period had elapsed, the account would still show $10,683 remaining of the amount of the matured annuity. And if the annuitant were to die, that $10,683 belongs to the government-not a penny to his widow or to his estate. To get his original principal back, the annuitant would have to exceed his normal life expectancy and live to be at least 82 years old. Is this the equitable solution the Minister of Finance (Mr. Turner) claims to be seeking? Does not the gravity of the situation demand that it be more than "kept under consideration"?
The 300,000 unfortunate Canadians locked into this situation need more than feeble excuses to finance their retirement. Rhetoric will not pay their heating bills or their grocery bills. They desperately need responsible government action to improve their plight, and some forward thinking from the other side of the House in order to prevent another investment plan giving cause for honest people to call their government a bunch of swindlers, guilty of fraud and gross negligence, as many people have had cause to do in the recent past when commenting on the present plan.
I would submit that the Canadian government is putting its credibility in serious danger when hard-working Canadians invest in their own government only to find it has been a bad investment.


The Acting Speaker (Mrs. Morin):: Order. I regret to interrupt the hon. member but his time has expired.


Jack Sydney George (Bud) Cullen: Thank you, Madam Speaker. As the hon. member knows, my time is more limited even than his, and consequently I am not able to respond to all the charges and allegations he has made. However, I know from my own experience that this question has been given very careful consideration by the Department of Finance and by succeeding ministers of finance.
What we have endeavoured to do is resolve the matter, but as the hon. member, I hope, appreciates when he looks at the over-all picture, it is not a simple matter to resolve equitably. That is one of the problems faced by the government in hoping to cope with this kind of situation, perhaps not so much as it affects these particular annuitants, but as it affects others with whom the government enters into contract.
The hon. member may scoff and say that the government falls back on that phrase, that it has entered into a contract, but in point of fact that is precisely what was done. Government annuities have always been sold on a fixed premium basis, with the government guaranteeing, through times of depression or inflation, payment of the contracted amount of the annuity.
November 7, 1974

The only way the government could index government annuities against cost of living increases would be to require increased premium payments, or by using tax revenue. As I have said to the hon. member, the government has given very careful consideration to such requests. And as he may realize, this would constitute- that is, what is being suggested-an increase in the annuity payments which the government agreed to pay in return for the premiums paid.
A government annuity is a contract, just as is an insurance company endowment policy, or any other contract whereby the purchaser agrees to pay fixed premiums over a number of years to the government and the government agrees to pay the annuitant a fixed amount in return, commencing at some future date. That is the form of contract which has been entered into in these particular cases.


CANADIAN COMMERCIAL CORPORATION-ALLEGATION CORPORATION FAVOURS CERTAIN REGIONS IN MAKING PURCHASES-GOVERNMENT ACTION
John Douglas Reynolds: I am
here tonight to talk a little about the Canadian Commercial Corporation. When I attended a committee meeting of the Miscellaneous Estimates Committee and we had the president of that corporation, Mr. Glassford, before us, I felt, as I think did a lot of members of the committee, that Mr. Glassford was ill-prepared to answer the questions we had prepared for him that night. As a result, we put a motion on the floor asking for further information. I am pleased to say that the minister, through his department, saw that our request was met right away. I think there was a lot of important information involved.
I am glad to see the minister has recovered from his illness. We missed the opportunity of having him appear before the committee. I am glad to see him back and, hopefully, ready to answer some questions about the Canadian Commercial Corporation.
I want to quote from the annual report of that corporation, for the benefit of those hon. members who do not know its function. On page 4 we find the following:
Canadian Commercial Corporation, which is wholly owned by the Government of Canada, was established in 1946 by an Act of Parliament for the following purposes:
(a)	to assist in the development of trade between Canada and other
nations;
(b)	to assist persons in Canada
(i)	to obtain goods and commodities from outside Canada, and
(ii)	to dispose of goods and commodities that are available for export from Canada-
Another part of the annual report states:
Canadian suppliers are selected from Department of Supply and Services approved source list;
My main complaint is that the source list from which the Department of Supply and Services operates across Canada leaves a lot to be desired. I think that this corporation has not gone across Canada seeking the advice of companies that could be supplying goods. It seems to have concentrated its advertising efforts in central Canada, that is, in the provinces of Quebec and Ontario. This has been pointed out by the complaints of people across
Adjournment Debate
Canada, particularly at either end. They complain that their parts of Canada are being ignored by a centralized government. Possibly that is why it always seems that those parts of the country have more members in the opposition than in the government, no matter which party is in power. Those people feel they are hard done by in such a case.
I would now like to quote some figures from reports we received at the committee's request, showing companies that had tendered for contracts on $10,000 and over with the Canadian Commercial Corporation. We broke them down by provinces to show the amounts and the provinces.
These are figures which were supplied to us by the department. In Prince Edward Island the Canadian Commercial Corporation did no business at all. In Newfoundland 2.3 per cent of the business was placed. Nova Scotia received 4.8 per cent of the business. New Brunswick received .02 per cent of the business. Quebec received 47.9 per cent of the business, and Ontario received 36.7 per cent of the business. Manitoba received 5.3 per cent of the business placed by the corporation. These figures are for 1973-74. Saskatchewan received .02 per cent of the business. Alberta 2.4 per cent and last, but not least, the province of British Columbia, with 10 per cent of the Canadian population, received .4 per cent of the business placed by the corporation.
The amount of business placed by the corporation totals $210,571,315 in the year 1973-74. That is a large amount of business which could be placed in areas of this country where it could do some good.
I think this company should be instructed by the Minister of Supply and Services (Mr. Goyer) to make sure that it co-ordinates its efforts a little more with the Department of Regional Economic Expansion because there might be some businesses which could be put in those areas aided by that department which could fulfil the needs of this corporation.
When you look at a corporation of this size which is doing 85 per cent of its business in the two major provinces, and is doing 15 per cent of its business in six out of the ten provinces, and is doing 15 per cent of its business in eight of the ten provinces, I think this shows the corporation is not doing its work. I would hope the minister would be able to do something about this in the next 12 months so that the corporation will show a business spread equivalent to the population in the major areas of our country.


Hon. Jean-Pierre Goyer (Minister of Supply and Services):: Madam Speaker, I had the opportunity to discuss the question with my hon. friend, and I respect his feelings on the activities of the Canadian Commercial Corporation and the fact that the Corporation does not actually buy in every region of Canada.
I have absolute respect for his views. But, as I have indicated, I believe the activities of the Corporation should be brought into larger perspective, that of my department's activities in overall purchasing.

November 7, 1974
Adjournment Debate
In that context, I would stress that during the 1970-71 period we bought only $100 million's worth in certain areas, while that figure rose to $230 million in 1973-74, and this year we expect to reach the $300 million level, which undoubtedly is an improvement.
Others have also buying power, and that waged by the provinces is enormous. With my colleagues from Western provinces and those from the Atlantic provinces I tried to develop a purchasing strategy for a much closer co-operation between the provincial and federal levels of government.
Fortunately, such action is bringing results. A joint federal-provincial exhibition is scheduled for next February in Manitoba, to tell businessmen there how to do business with provincial or federal governments.
On December 6 of this year, I am going to Saskatchewan to explore the possibilities of holding a similar exhibition there, to better inform businessmen in the province on the sales opportunities offered by both provincial and federal governments.
In the Atlantic provinces, I hope we may develop a similar formula for co-operation, in order that information
be made available to businessmen. We supply data through various publications and programs. But, over and above that, I believe if results are not forthcoming, the government should, and I will most certainly try to send officials on the field in order to reach local businessmen.
They show them how to do business with us, what the future opportunities to do business with us are and how they can develop their own company to make it easier for us to buy from them.
It is therefore in that spirit that I would certainly like to decentralize our purchasing in order to make sure that each area of Canada feels really integrated and that opportunities to do business with the federal government are equal for all. It is also in that spirit that, in my opinion, the remarks of the hon. member will most certainly be welcomed favourably.


The Acting Speaker (Mrs. Morin):: The motion to adjourn the House is now deemed to have been adopted. Accordingly, this House stands adjourned until tomorrow at eleven o'clock.
Motion agreed to and the House adjourned at 10.27 p.m.

Friday, November 8, 1974