1976-05-19

ROUTINE PROCEEDINGS


Mr. Tom Cossitt (Leeds):: Mr. Speaker,


Some hon. Members:: Hear, hear!


Thomas Charles Cossitt: -I rise under the provisions of Standing Order 43 to move a motion of urgent and pressing necessity. I would move, seconded by the hon. member for Winnipeg South Centre (Mr. McKenzie):
That the Minister of Manpower and Immigration and the Solicitor General make available immediately full details of a recent investigation by the Royal Canadian Mounted Police into the infiltration of organized crime into the Unemployment Insurance Commission and, specifically, that the House be told of companies existing on paper only making use of valid names and social insurance numbers and reportedly engaging in the fraudulent collection of a vast number of claims each week from the Ottawa UIC office and possibly other UIC offices amounting to thousands of dollars; and, finally, that full details be made public of fraud charges laid by the Royal Canadian Mounted Police under section 338 of the Criminal Code in connection with this matter during the last several days against Gordon Gunn, former employee of the Unemployment Insurance Commission residing at 1435 Prince of Wales Drive, Ottawa, and when further charges will be laid.


Mr. Speaker:: Order, please. I know that all hon. members, regardless of their sentiments in respect of this particular motion, will know that by moving it the hon. member for Leeds (Mr. Cossitt) shows that he has made a complete recovery. We rejoice.


Some hon. Members:: Hear, hear!


Mr. Speaker:: Notwithstanding that expression of sentiment, the motion, pursuant to Standing Order 43, can be presented to the House only if there is unanimous consent. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.



NATIONAL DEFENCE


Mr. Stuart Leggatt (New Westminster):: Mr. Speaker, I, too, rise under the provisions of Standing Order 43 and commend the urgency of this matter. In view of the decision yesterday by this government to accept a loss to the Canadian people of a minimum of $16 million and possibly more over the Lockheed Orion negotiations, with nothing to show for it; the decision by the Minister of National Defence (Mr. Richardson) to announce agreement in principle prior to approval by Treasury Board, thereby incurring such liability; and the decision of the Minister of Supply and Services (Mr. Goyer) to guarantee such loss by purchasing an extension of the option for $16 million, I move, seconded by the hon. member for Winnipeg North Centre (Mr. Knowles):
That this House refer this matter forthwith to the Standing Committee on Justice and Legal Affairs to determine what legal advice, if any, was given to the responsible ministers throughout the negotiations and, in particular, what legal advice, if any, was given prior to the announcement of approval in principle by the Minister of National Defence on November 27, 1975.


Mr. Speaker:: Order, please. Pursuant to Standing Order 43 the motion requires the unanimous consent of the House. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.



THE CANADIAN ECONOMY


Mr. Leonel Beaudoin (Richmond):: Mr. Speaker, pursuant to Standing Order 43, I request the unanimous consent of the House to present a motion dealing with a matter of urgent and pressing necessity.
Considering that for a few years the world price of cereals will continue to sustain rising food prices which are already subject to quite strong upward pressure, and that the final reports of the Food Prices Review Board and the Canadian Federation of Agriculture recognize that fact and both point out the need for taking immediate measures, I move, seconded by the hon. member for Champlain (Mr. Matte):
That the House discuss right now the board's recommendation stating that the government should introduce grant programs for consumers to protect Canadians, and that the discussion consider our proposition of

May 19, 1976
The Canadian Economy
making up an efficient system of compensating discount for consumers stabilize and balance this sector of our economy.


Mr. Speaker:: Order, please. The House has heard the hon. member's motion. Pursuant to Standing Order 43 provisions, this motion requires the unanimous consent of the House. Is there unanimous consent?


Some hon. Members:: Yes.


Some hon. Members:: No.


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



PUBLIC SERVICE


Mr. Gus Mitges (Grey-Simcoe):: Mr. Speaker, I move under the provisions of Standing Order 43 a motion of national and pressing necessity. In view of the fact that the veterinarians employed by the health of animals branch of Agriculture Canada are now proposing strike action to back up their legitimate grievances concerning working conditions and poor salary schedules, an action that will have dire consequences on the meat packing industry, the livestock producers, meat exports and consumers all across Canada, I move, seconded by the hon. member for Medicine Hat (Mr. Hargrave):
That the President of the Treasury Board take immediate steps to again meet with representatives of the veterinary group to settle their differences and avert a very costly national strike.


Some hon. Members:: Hear, hear!


Mr. Speaker:: Such a motion, pursuant to Standing Order 43, can be presented only with the unanimous consent of the House. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.



V (1410)   THE CANADIAN ECONOMY SUGGESTED PAYMENT OF COMPENSATING DISCOUNT-MOTION UNDER S.O. 43

Mr. Armand Caouette (Villeneuve):: Mr. Speaker, pursuant to Standing Order 43, I ask for the unanimous consent of the House to present a motion on an important and urgent matter.
Considering that the energy policies of this government will result in continuous increases in the price of oil, gasoline and natural gas, and particularly in a nearly immediate increase of 5 cents a gallon for gasoline, and considering that these increases cannot be sustained by low-income Canadians who are now affected by the anti-

inflation policy of the government, I move, seconded by the hon. member for Champlain (Mr. Matte):
That the House consider immediately the possibility of establishing a compensating discount on the price of heating oil, gasoline and natural gas to roll back the price of these essential products down to a level which makes them accessible to low-income Canadians.


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


Some hon. Members:: Yes.


Some hon. Members:: No.


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



ORAL QUESTION PERIOD


Mr. James Gillies (Don Valley):: Mr. Speaker, my question is for the Minister of Energy, Mines and Resources. Will the minister advise whether in his extensive discussions with the provinces and industries, which I am sure took place in setting the new prices for oil and gas, he received guarantees or assurances that these increases in price would be sufficient to generate the exploration and development to meet the goals put down in the energy strategy report? In other words, what I am seeking now is whether the price was arrived at in a random fashion, whether it was worked out in order to get the exploration that is needed or whether it is basically another source of tax revenue for the federal government?


Hon. Alastair Gillespie (Minister of Energy, Mines and Resources):: Mr. Speaker, as I made quite clear in my statement last night, it was a negotiated settlement based on a number of factors; that is to say, the whole question of minimizing the inflationary impact on one hand and, on the other hand, to recognize the legitimate concerns of the producing provinces for revenues from a depleting resource. Third, it had to be a price that was high enough to bring on greater exploration and development. All of those points were made in my statement last night. I invite the hon. member to reread the statement.


James McPhail Gillies: The minister did not answer the question that I raised, namely the relationship between the amount of the increase going to exploration and the expected amount of energy coming forth. In the minister's discussions with the provinces, was a commitment made to the consuming provinces that a change would be made in the excise tax on gasoline as a quid pro quo for the price arrangement that was finally arrived at?
May 19, 1976


Alastair William Gillespie: On the last question the hon. member has asked, Mr. Speaker, there was no understanding of that kind about the excise tax. Let me make this quite clear when he raises the question of taxes. This is not a measure to increase the federal government's tax take. It is a measure designed to increase exploration and development in Canada, particularly in the frontier areas, the cash flow. If that investment takes place, the federal government's tax take will be only 3 per cent of the increase.


James McPhail Gillies: Can the minister tell us whether in the discussions with which took place with the industry he received the impression the industry was satisfied that this change in price was sufficient to develop the cash flow the hon. gentleman believed to be necessary to get the exploration projected in the energy strategy report tabled on May 4?


Alastair William Gillespie: As the hon. member must know by now, if the industry reinvests 50 cents of each dollar of the increase in the oil price in exploration they will have the benefit of that 50 cents and they will retain 3 cents in addition. The federal government backs right off so that its total take is only 3 per cent. That is only one of the measures the federal government has taken to stimulate exploration and development in Canada. The other set of measures I shall be bringing forward this afternoon; they will be announced jointly by myself and my colleague, the Minister of Indian Affairs and Northern Development (Mr. Buchanan). They deal with the fiscal regime, the land tenure regulations, Canadian participation, and a number of other important matters, all specifically focused upon additional exploration and development in Canadian lands and waters.


OIL-GUARANTEE FROM COMPANIES THAT ADDITIONAL MONEY GENERATED BY PRICE INCREASE USED FOR EXPLORATION
Hon. George Hees (Prince Edward-Hastings):: As the oil
and gas companies will be quite free to spend the increase in oil and gas prices in any of three ways, that is they can devote it to exploration, they can put it into reserve funds or they can pay it out in additional dividends. May I ask what guarantees the minister has received from the companies that this additional money which comes out of the pockets of the consumers of Canada will be spent only on exploration for additional resources?


Alastair William Gillespie: Perhaps the best reason it will be spent on exploration and development is that it will be in the self-interest of the companies to spend in this direction.


Some hon. Members:: Oh, oh!


Alastair William Gillespie: If I might be permitted, I should like to finish my answer. I believe the hon. gentleman who asked the question is perfectly well aware that self-interest, the profit motive, is the most important generating force as far as business decisions are concerned and I think there is a built-in incentive for engaging in exploration.
The second reason I think there will be reinvestment in exploration is that we shall require, through legislation,
Oral Questions
mandatory reporting of their cash flows and how much of their cash flow is directed to exploration and development. The public of Canada will then be able to see whether or not those funds are in fact being devoted to the purposes which they, the companies, and we, the government, say are necessary.


George Harris Hees: As the government will obviously not know for many months, until it has had a chance to monitor the expenditures of the oil companies, how the money has been spent, I ask the minister how in the world he could agree to allow these companies to raise prices in absence of iron-bound guarantees from them that they will spend this extra money only in the way that they should, and that is by exploring for additional resources.


Some hon. Members:: Hear, hear!


Alastair William Gillespie: It comes to me as a great surprise that the hon. member should have forgotten all about incentives. He spends a good deal of his time in this House telling the government that they ought to put more incentives into our whole system; he has now turned his back on this completely.


George Harris Hees: The minister is absolutely right, Mr. Speaker. Any incentives that I have urged are the sort that are paid in exact proportion to the efforts that the people who are asked to do these things expend, not some vague promise that makes it possible that the money will be spent in some other way. Obviously the minister is wasting the consumers' money.


Some hon. Members:: Hear, hear!


Mr. Speaker:: Order, please.


INDIAN AFFAIRS
Mr. Wally Firth (Northwest Territories):: Mr. Speaker, in the absence of the minister of Indian affairs may I direct a question to the Prime Minister. Not very long ago there was an apparent suicide of one Nelson Small Legs of Alberta. Before Mr. Small Legs apparently took his own life, he wrote the following words:
I give my life in protest to the present conditions concerning the Indian people of southern Alberta. I also give my life in the hope of a full scale investigation into the department of Indian affairs corruption and also the resignation of Judd Buchanan, Minister of Indian Affairs and Northern Development, and the divide and conquer tactics present on each reservation.
I should like to ask the Prime Minister whether he will take this symbolic act of violence as notice that that department and its policies are not helping the native people as they should; and more specifically, would he see that an investigation is launched into the charges of corruption and mismanagement laid against the Calgary

May 19, 1976
Oral Questions
office of the Department of Indian Affairs and Northern Development?


Right Hon. P. E. Trudeau (Prime Minister):: Mr. Speaker, I am afraid I do not know the details of this matter, but I must say that when a man gives his life for an objective I must respect that and regard it as a very serious matter indeed. I will look into it with all the earnestness that it deserves.
However, I would remind the hon. member and the House that, as a government, we did offer as long ago as 1969 to abolish the department of Indian affairs if that was what the Indians wanted. We made a clear proposition to them and also stated that, in view of their grievances against the department, we were prepared to change the act progressively in that way. The President of the Treasury Board was then minister, and the Indians specifically asked us not to do so. So, in a sense, we are complying with the Indians' own request to keep the department in operation and to continue treating the native population in a special way under the Indian Act. We are doing that at their request.
In the meantime we are trying to meet as many of their grievances as possible. We named Mr. Barber as Indian claims commissioner for a long period, and we are now in the process of negotiating, with various Indian bands in different regions, solutions to their problems.


Walter (Wally) Firth: A supplementary question, Mr. Speaker. What the Prime Minister is saying sounds fairly good to me, but the Indian people across the country are still meeting with frustration in their dealings with this department. It seems that the department is working hard to perpetuate itself without really responding to the wishes of the Indian people across the country. Would the Prime Minister please see that that department makes moves to prevent further violence happening again and that it responds more to the wishes of the native people of this country?


Pierre Elliott Trudeau: Well, Mr. Speaker, in view of my previous answer I must take exception to the suggestion of the hon. member that the department is seeking to perpetuate itself. I repeat that the proposal of the then minister was to the effect that the department should do away with itself, leading to the situation where the Indian population would be Canadians like everyone else and would be treated under federal and provincial laws just like everyone else. I repeat that it was at the request of the Indians that we did not proceed in that direction.
In the meantime, in addition to the various suggestions I have made, we have set up a meeting between the National Indian Brotherhood and a group of cabinet ministers to deal on a continuing basis with the grievances that worry the hon. member and many of us on this side. We have this continuing structure with them at the ministerial level in order to help them make up their minds, as Indians, what the best course in the future is. As the hon. member knows, the Indian people themselves are very much divided on where their future lies and we understand they do not want to take any hard decisions in that regard. For this reason we have not abolished the department. We are meeting with them and we have said we will time our own actions to suit their priorities.


AGRICULTURE
Léonel Beaudoin: Mr. Speaker, I wish to put a question to the Minister of Agriculture.
In view of the fact that industrial milk producers in the province of Quebec now have to throw away 25 per cent of their production and that sooner or later many of them will go bankrupt and that, as a result, there will be a decrease in the amount of milk and powdered milk, can the minister tell the House whether he is considering reducing the levy of $8.60 a hundredweight on the surplus of quotas before next September or October?


Hon. E. F. Whelan (Minister of Agriculture):: Mr. Speaker, it is wasteful if they are throwing away a product. I have not been made aware of this. There is no necessity for them doing it because they are wasting energy producing the product in the first place that has no market. They would be better not to be doing that. Many producers have cut back a great deal on production and are supplying the market in an orderly fashion, which is what we want them to do. If they do that they still can make money. We know that and they know that. No, I am not considering changing the levy.


REQUEST FOR NEW POLICY TO HELP INDUSTRIAL MILK PRODUCERS
Léonel Beaudoin: Mr. Speaker, I wish to ask a supplementary question.
If he did not know, I just told the minister that industrial milk producers now have to throw way 25 per cent of their production. Considering that heifers are hard to sell and that industrial milk producers cannot make money, I would ask the minister whether he would consider the possibility of establishing a new policy to help them on a temporary basis because of their lack of revenue due to the new dairy policy.


Eugene Whelan: Mr. Speaker, they have not been asked to cut production 25 per cent, they have been asked to cut it 15 per cent which would leave production practically the same as we requested last year. They know what markets there are and the provincial marketing boards know what markets are available for this production. This over-production does not make sense, unless we have an orderly, world distribution system. That is not totally my responsibility but is totally a world responsibility in which we would require all governments establishing monetary funds in order to carry out distribution to the needy people of the world. It is not the farmers' or the minister's responsibility to do that. Until we have that kind of a system it can be very wasteful, to repeat, to produce a product that has no known home.
May 19, 1976


AIR TRANSPORT
Mr. Donald W. Munro (Esquimalt-Saanich):: Mr. Speaker, my question is directed to the Minister of Transport and refers to a question of yesterday. In view of the positive response last evening of the spokesman for the air traffic controllers welcoming the minister's offer to broaden the terms of reference of the public commissioner, has the minister approached the commissioner or the interested parties to see whether such action on his part would facilitate solutions to the outstanding issues, or was his offer just a gesture?


Hon. Otto E. Lang (Minister of Transport):: Mr. Speaker, I am sure the hon. member does not mean to add that kind of final phrase, and I would be glad if he would refrain from doing it.


Some hon. Members:: Oh, oh!


An hon. Member:: You are very touchy.


Some hon. Members:: Oh, oh!


An hon. Member:: You are not back in the classroom.


Otto Emil Lang: I simply meant, Mr. Speaker, that he is sometimes better than that. I expect to meet representatives of the controllers this afternoon.


Donald W. Munro: Mr. Speaker, will the minister be taking steps this afternoon when he does meet the Commissioner to extend the time so that all parties directly concerned may reach a solution, especially in light of the complexity of developing satisfactory procedures for IFR through the simulator which, by some accounts, has not yet been activated and made operational?


Otto Emil Lang: Mr. Speaker, the accounts are largely wrong. I am sure the hon. member did not mean to misunderstand me. I did not mean that I was meeting the commissioner this afternoon but rather the representatives of the controllers. I would like him to be more specific about what he wants in respect of an extension of time since the time is indefinite.


ADMINISTRATION OF JUSTICE
Thomas Charles Cossitt: Mr. Speaker, in the absence of the Solicitor General I should like to direct my question to the Minister of Justice. Could he confirm to this House details concerning the recent extensive defrauding of the Unemployment Insurance Commission of thousands of dollars which was investigated by the Royal Canadian Mounted Police. Could he also tell the House whether charges will be laid against bogus companies and individu-
Oral Questions
als involved in addition to charges already laid against Gordon Gunn of Ottawa last Friday.


Mr. Hugh Poulin (Parliamentary Secretary to the Solicitor General):: Mr. Speaker, in the absence of the Solicitor General I should like to advise the hon. member that I do not have the particulars of the allegations in respect of charges to which he has referred. We will look into it, study it and advise the hon. member of whatever the charges are.


UNEMPLOYMENT INSURANCE
Thomas Charles Cossitt: Mr. Speaker, my supplementary is directed to the Minister of Manpower and Immigration. Is the minister in a position to provide the House with full details of the investigation carried on by his officials in co-operation with the Royal Canadian Mounted Police into the extensive defrauding of the Unemployment Insurance Commission, particularly in Ottawa, and can he tell the House when charges will be laid against all those involved in addition to those laid against Gordon Gun of Ottawa.


Hon. Robert K. Andras (Minister of Manpower and Immigration):: Mr. Speaker, I can only indicate to the hon. member, as he pointed out, that this matter is under investigation by the Royal Canadian Mounted Police. Until they have completed their investigation I think it would be a disservice for me to make any detailed comment. Charges, if they are warranted, will be laid. We will encourage that course if that is the case, but we have to await their investigation.


FINANCE
Mr. Sinclair Stevens (York-Simcoe):: Mr. Speaker, my question is for the Minister of Finance. As it is understood that the minister has retained certain outside experts to help him with his budget, would the minister indicate how many of these brains not in the public service have been retained, what type of concerns they come from and, specifically, what is their job in relation to the budget?


Hon. Donald S. Macdonald (Minister of Finance):: Mr. Speaker, the hon. gentleman would be inexact in saying that in respect of the fiscal aspects of the budget. In respect of whether there have been any such outside retainers, it is true that the Anti-Inflation Board and the officials of my department have been in consultation with a number of people in the professions with regard to possible amendments to the anti-inflation program which I indicated would be announced at the same time as the budget.

May 19, 1976
Oral Questions


Sinclair McKnight Stevens: Mr. Speaker, as budget secrecy, certainly relative to tax changes or the spending plans of the government, is of uppermost importance, would the minister indicate what precise guidelines he has established to ensure continued secrecy of budgetary information as this is very much a pool effort behind the presentation of the budget.


Donald Stovel Macdonald: Mr. Speaker, as I just said the discussion was not with regard to tax changes or government spending.



NATIONAL DEFENCE


Mr. Robert Muir (Cape Breton-The Sydneys):: Mr. Speaker, my question is for the Minister of National Defence. In view of the extremely serious unemployment rate on Cape Breton Island, would the minister announce as quickly as possible what programs will be available for students under the SEAP-the Student Summer Employment and Activities Program-in Cape Breton. I understand there are over 1,500 students in the Sydney district area alone registered for employment at the moment.


Hon. James Richardson (Minister of National Defence):: Yes, Mr. Speaker; I will make that information known to the hon. member.


Robert Muir: Mr. Speaker, I thank the hon. gentleman for his reply. I am wondering whether he would give consideration to extending the program under his department for more than eight weeks, so that at least a few students in every community on the Island would be given an opportunity to apply for some of these positions.


James Armstrong Richardson: Mr. Speaker, I can agree to look at that representation.



TRANSPORT


Mr. Eymard Corbin (Madawaska-Victoria):: Mr. Speaker, my question is for the Minister of Transport. In view of the fact that both the CN and the CP have served notice on New Brunswick and Prince Edward Island potato shippers that they intend to raise their agreed charge freight rates by 20 per cent on domestic shipments and 15 per cent on export shipments, as of July 1, would the Minister of Transport have a heart to heart talk with these servants of the national interest so as to convince them of the need for improved rolling stock to substitute for the antiquated and unacceptable railway cars now being provided by U.S. railways, when these are at all available, so that eastern potato growers can receive the same fair treatment accorded to the western wheat producer in this respect.


Otto Emil Lang: Mr. Speaker, I will be glad to raise the question of adequate equipment with the two railways. I perhaps should also make sure that the Canadian Transport Commission has taken note of the rate increase.



CONSUMER AFFAIRS


Mr. Edward Broadbent (Oshawa-Whitby):: Mr. Speaker, I have a question for the Minister of Consumer and Corporate Affairs, if I could get the minister's attention. Would the minister tell the House if a number of officials in his department have been investigating what has been described as a flood of complaints about the practice by a number of insurance companies of refusing renewals of car insurance unless the person applying for insurance would also agree to place his fire and life insurance with the same company.


Hon. Bryce Mackasey (Minister of Consumer and Corporate Affairs):: Mr. Speaker, we are aware of the situation but have not been flooded with complaints.


John Edward Broadbent: Mr. Speaker, would the minister just answer the question. I asked him if his department is investigating this. I understand from reports that it is. If so, has he received a report from his officials and is he taking any action on this deplorable practice.


Bryce Stuart Mackasey: Mr. Speaker, as soon as I receive the report, if action is necessary I will be glad to take it. One of the limitations I find in my role as Minister of Consumer and Corporate Affairs is the quasi-judicial role of the investigator in respect of the Combines Investigation Act means that even I am prohibited from knowing what actions are being taken, if any, unless they are revealed by a third party. This is an embarrassing position to be in because it is very difficult to be forthright with the House.


John Edward Broadbent: Mr. Speaker, if it should turn out that this practice does contravene existing law, which I understand is problematical, and since such a practice really amounts to the consumer being held up to blackmail by the insurance companies because presumably the consumer has other insurance with another company, would the minister take steps to ensure that the law is changed so that the government would be in a position to stop this practice.


Bryce Stuart Mackasey: Well, Mr. Speaker, I think the hon. gentleman's representations are coming at a very appropriate time since the legislation is about to be changed. I certainly will give it full consideration.
May 19, 1976



IMMIGRATION


Mr. P. B. Rynard (Simcoe North):: Mr. Speaker, my question is directed to the Minister of Manpower and Immigration. In view of the astronomical costs being encountered in respect of health care in the treatment of worms and intestinal parasites as well as sickness which, according to experts in the field, is becoming a widespread problem in urban areas, I should like to ask the minister, since this problem is brought into Canada mostly by immigrants from tropical countries, why proper examination and treatment is not carried out before entry of the person into Canada?


Robert Knight Andras: Mr. Speaker, there have been changes in the recent past with regard to examination of immigrants and indeed visitors destined to employment in Canada in terms of health. Those efforts have been stepped up very considerably in recent months. I would be glad to give the hon. member the full details of this and elaborate on it in a letter or make the situation public. There is a further difficulty which bothers us of course with regard to people who come here as visitors and then stay for other purposes, that is to take unauthorized employment. But here again steps are being taken to make it easier for employers, and more likely that they will be able, to identify people who are authorized or unauthorized in terms of the validity of their being in Canada. These steps combined with others will improve the situation which indeed concerns me, as it does the hon. member, although I am not sure it is as prevalent as he is indicating in his comments.



AIR TRANSPORT


Mr. Jack Murta (Lisgar):: Mr. Speaker, I should like to direct a question to the Minister of Transport, and it is basically a supplementary question to the one asked earlier. The minister in his statement yesterday indicated a willingness to look at all aspects of safety. I should like to ask him now whether he could be more specific and indicate exactly what he meant. Is he willing to go as far as the air traffic controllers have asked him to go, that is to include all aspects of bilingualism?


Otto Emil Lang: Mr. Speaker, I think that my answer yesterday speaks for itself adequately. I do not think it would be useful to attempt to spell out in detail what may be the nature of the first proposal, the reply, the second proposal, and later discussions today. I can say to the hon. member, however, that any aspect relating to safety, so far as I am concerned, is something we are certainly willing to establish satisfactorily, that we are concerned and that our procedures take it into account.
Oral Questions
What I am not willing to do is to treat as a bargainable issue a matter which must be a matter of government policy or indeed, in parallel business terms, a matter for management, and that is the fundamental issue of a policy decision about whether or not to provide certain service in a bilingual way. That is a policy decision which the government will take and, with the co-operation of this parliament will continue to take, and that does not become a bargainable issue.



POSSIBILITY OF CANADA CUP HOCKEY GAMES AT QUEBEC CITY

Mr. Roch La Salle (Joliette):: Mr. Speaker, I should like to put a question to the Minister of National Health and Welfare.
On May 7 last, the minister made a statement about the Canada Cup and said that the games would probably be held in Montreal, and Toronto if a satisfactory agreement could be reached with them, and that possibly one or two games might be held in Quebec City. Is the minister in a position to say to the House today whether such agreement has been reached and whether there will be some hockey games of that series in Quebec City?


Hon. Marc Lalonde (Minister of National Health and Welfare):: The organizing committee has the firm intention of scheduling at least one game and perhaps two in Quebec City. I do not know, however, if a formal agreement has been signed, but as far as the organizing committee is concerned, there is no doubt that it will do its utmost to hold at least one game in Quebec City which, as you know, has many hockey fans.



INDUSTRY


Mr. Yvon Pinard (Drummond):: Mr. Speaker, in the absence of the Minister of Industry, Trade and Commerce, I will direct my question to his parliamentary secretary; it is about the recent establishment of a special committee to review the whole Canadian textile and clothing policy. As this committee must report to the minister before June 30 next, and following the interesting meeting last week between CSD representatives and several government members on the matter, will the participation of a union representative on this committee be encouraged to ascertain the constructive and useful views of workers in this major industry who are interested in the safety of their employment?


Mr. Marcel Roy (Parliamentary Secretary to Minister of Industry, Trade and Commerce):: Mr. Speaker, I think I must first outline the composition of this advisory committee: three senior executives of the textile industry, three senior executives of the clothing industry, one provincial

May 19, 1976
Oral Questions
representative each from Ontario, Manitoba and Quebec, and three representatives of the Department of Industry, Trade and Commerce. I want to mention that we have no objection to some members of this advisory committee consulting the unions concerned. A first effort has been made to call the initial meeting for May 25, and the next meeting will be held on June 7 with some members of this advisory committee.



AIR TRANSPORT


Mr. S. J. Korchinski (Mackenzie):: Mr. Speaker, my question is for the Minister of Transport. Since Skywest has been a dead issue for some four or five months and the provinces are apparently not willing to enter into any arrangements with the federal government because of some stipulation which the federal government is apparently making, would the minister indicate what are the immediate prospects of providing air service to the communities of Brandon, Dauphin, Yorkton and his own constituency, Saskatoon, via feeder lines?


Otto Emil Lang: Mr. Speaker, the work is going on with regard to what might be required in the way of particular facilities on those routes. I hope to be in a position to say something definitive before very long.


Stanley James Korchinski: May I ask the minister whether he is consulting any airlines, and is he considering the purchase of a Russian plane Ilyushin 21? Is he still prepared to provide financial assistance to provide this service, even without provincial participation, and what deadline is he aiming for?


Otto Emil Lang: Quite a wide range of consultations are going on. It is not our intention to acquire aircraft ourselves, and the type of aircraft which any carrier might offer is itself part of the discussion, but it would largely be the responsibility of the carrier, depending on the type of service required.



AGRICULTURE


Mr. R. E. McKinley (Huron-Middlesex):: Mr. Speaker, I have a question for the Right Hon. Prime Minister. I have before me a statement issued by the Minister of Agriculture that the Canadian Egg Marketing Agency should be considered the applicant and first receiver of imported eggs under constraints of a system of monitoring all transactions. At about the same time the Minister of Consumer and Corporate Affairs stated in the House that he was in no way in favour of CEMA being the first importer of eggs, even though it would mean an over-all lowering in the

price of all eggs to consumers. Can the Prime Minister advise the House which of the two ministers was expressing government policy?


Pierre Elliott Trudeau: Mr. Speaker, they were certainly speaking very truthfully, one in defence of agriculture and the other in defence of the consumer. I think this is their role. I would point out to the hon. member that he would have to go beyond either statement because the importing permits are not issued by either of the two ministers, they are issued by a third minister, the Minister of Industry, Trade and Commerce. That would indicate to the hon. member that when we have a problem such as this, where ministers are supporting conflicting interests, we solve them in cabinet in a way which is the most profitable for the Canadian people.



CONSUMER AFFAIRS


Robert Elgin McKinley: While we are waiting for the Minister of Industry, Trade and Commerce to come back, may I put a supplementary question to the Minister of Consumer and Corporate Affairs. Why is it that eggs which come to Canada from the United States are marked "product of U.S.A.", but when they get to the Canadian consumer they are marked "made in Canada"?


Some hon. Members:: Oh, oh!


Robert Elgin McKinley: Why should consumers pay Canadian prices for these cheaper imported eggs from the U.S.A.?


Some hon. Members:: Shame, Bryce.


An hon. Member:: Think quickly now.


Bryce Stuart Mackasey: If the hon. gentleman told me that the stamp had been changed to "laid in Canada", I would understand him, but "made in Canada" with the rooster in the U.S.-I cannot even follow the logic. Under our system when there is a shortage of eggs in Canada, a quota of, I think, 100,000 dozen is brought in at a time from the U.S. and is considered part of the Canadian production.


Some hon. Members:: Oh, oh!


Bryce Stuart Mackasey: This is clear and understandable in order to control the market. It is only when that number of eggs is still insufficient that ITC, as the Prime Minister pointed out, designate certain importers to increase the volume of eggs coming in from the United States in order to provide a sufficient quantity for the consumers of this country. Such action in no way affects the producer.
May 19, 1976



VETERANS AFFAIRS


Mr. Joe Flynn (Kitchener):: Mr. Speaker, my question is for the Minister of Veterans Affairs. When considering the matter of the present ceilings on the casual earnings of veterans drawing war veterans' allowances, would the minister look into the possibility that the delay in raising the $1,500 ceiling on casual earnings actually reduces the monthly allowance paid to veterans on war veterans allowances?


Hon. Daniel J. MacDonald (Minister of Veterans Affairs):: Mr. Speaker, we had discussions the other day and the answer is still the same. The department is looking into this. We hope to be able to do some work on it in the near future and have it processed before too long.



ALLEGED DANGER FROM RED FOOD DYES-REQUEST FOR REPORT ON DEPARTMENTAL STUDY

Mr. Howard Grafftey (Brome-Missisquoi):: Mr. Speaker, my question is for the Minister of National Health and Welfare. Little more than two months ago the hon. member for Grey-Simcoe asked the minister if any conclusions had been reached concerning the danger from red food dyes in our foodstuffs. The minister replied that his department was considering in detail the studies made in the United States. I now ask the minister what has been the result of his department's study of the danger of red dyes in foodstuffs? What conclusions have been arrived at concerning this matter?


Marc Lalonde: Mr. Speaker, I do not know whether the hon. member has taken cognizance of the press release issued by me on February 2 on this particular subject. It was a nine-page press release which went into this issue extensively. I can only report to the hon. member that the conclusions expressed by my department in that press release have not changed.


William Heward Grafftey: Mr. Speaker, I have read the press release.


Some hon. Members:: Hear, hear!


An hon. Member:: You are one up on your colleagues.


William Heward Grafftey: I am not interested in press releases; however, I am interested in answers to questions by the minister in the House of Commons.


Some hon. Members:: Hear, hear!


William Heward Grafftey: He was asked in the House to reply in the House and tell what dangers were identified in the study into these red dye in foodstuffs. Would he reply in the House and tell us what the general conclusions were?
Oral Questions


Marc Lalonde: Mr. Speaker, I am not asking the hon. member to be interested in press releases but in their content.


An hon. Member:: Don't be smart!


Marc Lalonde: If he went to the trouble of reading it, he would not need to ask the question. It is all there, he can read it if he wants. I would say that the concern expressed by the United States authorities was not substantiated by the available scientific evidence.



EXTERNAL AFFAIRS


Mr. Lome Nystrom (Yorhton-Melville):: Mr. Speaker, in the absence of the Secretary of State for External Affairs I should like to address my question to his parliamentary secretary or to the Prime Minister. In view of the fact that on Monday the Secretary General of the Commonwealth referred to the common fund as essential to the success of the UNCTAD conference in Nairobi, and in view of the fact that the OPEC nations have now made a large commitment of money for the common fund, I should like to ask the Prime Minister whether Canada is now in a position to make a specific commitment and contribution to the common fund?


Miss Monique Begin (Parliamentary Secretary to Secretary of State for External Affairs):: Mr. Speaker, the hon. member who attended, I believe, the opening of the UNCTAD negotiations knows that Canada naturally approved in principle the setting up of a common fund. As for the details on participation to the fund, I shall be glad to inquire about them from the department; in any event, it would be more appropriate, if only because of my voice, for me to answer tomorrow.


Lorne Edmund Nystrom: Mr. Speaker, may I try a supplementary and say it is the money I want, not the voice. May I ask the parliamentary secretary whether the department is aware that in the opinion of many of those at the conference, if the common fund is not adequately supported, not only the UNCTAD conference but the north/south conference at Paris of which Canada is one of the chairmen, is in danger of breaking down?


Monique Bégin: Mr. Speaker, the hon. member will not get the money, it will go to the Third World countries! He knows very well the concern of the Secretary of State for External Affairs, who represents the Canadian government, and he knows the minister is going to use every platform to promote that idea both at the north/south conference in June and in Nairobi now through our officials there.

May 19, 1976
Oral Questions



UNEMPLOYMENT INSURANCE


Armand Caouette: Mr. Speaker, I should like to put a question to the Minister of Manpower and Immigration.
Does he agree that it is unacceptable and intolerable for a person to be disqualified for unemployment benefits simply because he had the courage and initiative to find himself a job that was terminated six weeks later because his employer went bankrupt? In fact, that individual was penalized because, instead of staying at home and living off unemployment benefits, he chose to work. Having lost his job because his employer went bankrupt, he can no longer get unemployment insurance because of the four-week break in his receiving those benefits. Does the minister agree that it it unfair to penalize the person who tries to find a job, and if so, can he tell us what solution he intends to suggest in the near future with a view to helping those who are in that situation?


Robert Knight Andras: Mr. Speaker, I would need to have the details of that specific case. It sounds like a travesty to me if the facts of the hon. member are totally correct with regard to all the factors. If he will give me details, I shall be glad to look into it and give him a specific response. If there is an injustice I shall do my best to correct it.



AGRICULTURE


Constantine George (Gus) Mitges: Mr. Speaker, I have a question for the Minister of Agriculture. Has a study authorized by his department to examine all aspects of the responsibilities of veterinarians in the federal public service, especially the health of animals branch, now been completed? If it has, could the minister tell us whether the report recommends that the position of veterinarians in the public service be up-graded commensurate with their high responsibility for protecting the health of the livestock industry in Canada?


Eugene Whelan: Mr. Speaker, I am not one hundred per cent sure that it has been completed. I think it has been, but I certainly have not had time to study it. I am sure the hon. member knows that we want to make sure that these people, who are amongst the most dedicated civil servants in Canada and who have maintained a high profile for agriculture Canada especially with regard to health of animals, livestock diseases and poultry endeavours, are properly classified. They have one of the best records in Canada and we want to maintain it.



PUBLIC SERVICE


Constantine George (Gus) Mitges: Mr. Speaker, a supplementary question to the President of the Treasury Board. In view of what the Minister of Agriculture has stated, and in view of the fact that 70 per cent of all wage settlements in the public service, as reported by the Financial Times, have been settled with increases of 20 per cent and more, and also in view of the fact that because of a 27 per cent vacancy rate in the health of animals branch the AIB guidelines do not legally apply, is the minister still insisting on his offer of 8 per cent or 9 per cent despite the fact that veterinarians' salaries have not kept up with inflation over the last five years?


Hon. Jean Chretien (President of the Treasury Board):: First of all, Mr. Speaker, I would like to point out to the hon. member that the statistics he is using are not true. Last year we settled with the federal civil servants for an average of 14.4 per cent; that was for last year, before the implementation of the guidelines. At this time, unfortunately, I have, in the case of all civil servants, to abide by the guidelines issued following the anti-inflation program which was adopted under an act voted by this House.



AIRPORTS


Mr. John Reynolds (Burnaby-Richmond-Delta):: Mr. Speaker, I have a question for the Minister of Transport following upon a question I put to him a couple of weeks ago about illegal immigrants who were arrested and bound working at Toronto airport. Has the minister checked to see if all persons now working at airports, especially Toronto, who have access to security areas at these airports are in Canada legally and have security clearance?


Otto Emil Lang: Mr. Speaker, the original question is being followed up but I do not have a report at this time.



NATIONAL ENERGY BOARD


Mr. Otto Jelinek (High Park-Humber Valley):: Mr. Speaker, I should like to put a question to the Minister of Energy, Mines and Resources. I have in front of me a copy of a recent letter received by the National Energy Board and written by Mr. J. B. Seaborn, Deputy Minister of the Environment, expressing anxieties about the possible environmental effects of power generation by Ontario Hydro for the export market. Can the minister tell the House whether he was consulted by the National Energy Board
May 19, 1976

before it decided to refuse to admit the letter as evidence at recent National Energy Board hearings, and can he further advise the House why this important piece of documentation was refused and under whose instructions it was refused as evidence?


Alastair William Gillespie: Mr. Speaker, I did not in any way refuse to allow that piece of documentation to go forward to the National Energy Board.


Mr. Speaker:: The hon. member is recognized for one supplementary question.


Otto John Jelinek: Mr. Speaker, I am not asking a supplementary, but repeating my request. The minister did not answer my question. The letter was received by National Energy Board from the deputy minister of the environment. My question is, why did the National Energy Board refuse to consider the letter as evidence at the hearing, and was the minister aware that the National Energy Board refused to consider such documentation?


Alastair William Gillespie: Mr. Speaker, I am not aware of the details on a day-to-day basis of National Energy Board decisions of this kind. I think the hon. member will recognize that the National Energy Board, as a quasi judicial body, has a great deal of independence for the making of its own decisions.


Thomas Charles Cossitt: Mr. Speaker, I rise on a point of order to do with the reply of the Minister of Manpower and Immigration (Mr. Andras) to the question I asked him regarding the defrauding of the Unemployment Insurance Commission and when further charges would be laid. He advised the House that the making public of such details could possibly prejudice an investigation in progress. We all share that sentiment, but my point of order is this. I am sure the minister did not intend to mislead the House intentionally. I should tell the House that as 1.15 this afternoon I was informed by sources in the Royal Canadian Mounted Police that the investigation was complete and the raising of it in this House would in no way prejudice the matter.


Mr. Speaker:: Order, please.


Mr.   De Bane@: Mr. Speaker, I rise on a point of order and I ask the House to give unanimous consent for a question to be asked of the Prime Minister (Mr. Trudeau) concerning the tragedy in Lebanon. I am sure all hon. members of the House would grant me the indulgence to ask that question.


Mr. Speaker:: Order, please. It is clear that such a procedure would depart entirely from the practices we follow on a daily basis. Every day members wish to ask questions which are urgent to them, to their interests or the interests of their constituencies, and each day a number of members fail, in the ordinary course of rotation, to gain the floor. I suggest that if such a question is asked at this time, it should be entirely understood that it is only done with the unanimous consent of the House. Is there unanimous consent for the hon. member to ask the extra question on the subject indicated at this time?
Orion Cancellation


Some hon. Members:: Agreed.


An hon. Member:: No.


Mr. Speaker:: Order, please. There is not unanimous consent.



ROUTINE PROCEEDINGS


[Stage Direction]
Fifteenth report of the Standing Committee on Agriculture-Mr. Daudlin.
[Editor's Note: For text of above report, see today's Votes and Proceedings.]

Hon. Ron Basford (Minister of Justice):: Mr. Speaker, pursuant to Standing Order 41(1), I wish to table in both official language copies of the Law Reform Commission Report on Sunday Observance.


NATIONAL DEFENCE
James Armstrong Richardson: Mr. Speaker, at a meeting of the cabinet held yesterday evening it was agreed that the Lockheed Corporation should be informed immediately that the government would only be able to proceed with the purchase of 18 Lockheed long range patrol aircraft if the Lockheed Corporation could provide the required bridge financing.
It was agreed by cabinet as well that if the Lockheed Corporation could provide the required bridge financing, the government would proceed with the purchase of 18 LRPA aircraft from Lockheed.
Yesterday evening, following the cabinet meeting, my colleague, the Minister of Supply and Services (Mr. Goyer), who has the responsibility of negotiating the contract on behalf of the government, met with Mr. Bill Wilson, executive vice-president of the Lockheed Corporation, and informed him of the government's decision. Mr. Wilson advised the Minister of Supply and Services that Lockheed was unable to provide the required bridge financing, and for that reason the government has now abandoned its plans to complete that specific purchase contract with Lockheed.


Stuart Malcolm Leggatt: It's about time.
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May 19, 1976
Orion Cancellation


James Armstrong Richardson: I also wish to advise the House, Mr. Speaker, that prior to these decisions, in spite of the best efforts of all parties concerned, it was not possible to make arrangements whereby Lockheed could conclude a financial agreement with the Canadian banks. Also, it was not possible to accommodate the purchase of the Lockheed LRPA by direct financing without an undue distortion of the government's planned program of expenditure.
At the cabinet meeting yesterday evening to which I have referred, the government confirmed its commitment to contribute its share to collective security and emphasized that the decision not to purchase the Lockheed LRPA did not in any way diminish this commitment.
Anti-submarine patrol continues to be an important task for the Canadian armed forces, and it will continue. It had been planned, even if the Lockheed purchase did proceed, to continue to use our fleet of Argus aircraft on anti-submarine patrol until 1980. The Argus aircraft will, therefore, continue in the anti-submarine role as planned, and the government will immediately renew the search for the most effective way to replace the Argus.


An hon. Member:: Put wings on a crowbar.


An hon. Member:: Are you volunteering?


James Armstrong Richardson: That search will, of course, include any renewed and financeable proposal by the Lockheed Corporation.
Finally, the government wishes to express its appreciation for the full and willing co-operation it has received from the United States government during the period of negotiation with the Lockheed Corporation.


Mr. Allan B. McKinnon (Victoria):: Mr. Speaker, most farces end as fiascoes, and the government farce of re-equipping the armed forces, using promises instead of money, has ended in the predictable fiasco.
I believe that the opposition, in the months leading up to this denouement, has shown a responsible attitude in the questioning and debating both in the House and in committee. In fact more leadership and more understanding concerning the LRPA project have been evident on this side than on the government side. We have, by our questioning and comment, brought out into the open the disadvantages and dangers of the financial arrangements of the Lockheed deal.
It is difficult to pick the proper modifier to describe the performance of those in the cabinet who were involved in this debacle. One can choose between bumbling, obstinate, inept, naive, deceitful, incompetent, and misleading. In fact they are all true.
First we have the Minister of National Defence (Mr. Richardson) in November, 1975, at the end of the $12 million worth final definition phase, announcing that a decision had been made to buy the Lockheed LRPA. He could not wait another few days for the contract signing, but must rush off to NATO to seek praise for his efforts. That piece of vainglorious, self-serving immodesty, will be long remembered by our long-suffering NATO allies.
Then, the hapless Minister of Supply and Services (Mr. Goyer) who, although a senior civil servant from his

department served on the LRPA project staff, was himself never informed that the Department of National Defence did not have the money budgeted to fulfil its financial obligations; nor was he informed that Lockheed could not fulfil its real or imagined-depending on whether you believe the Minister of National Defence or Lockheed- commitment to provide money for interim financing. The position of the Minister of Supply and Services was somewhat further weakened when the official in charge of the project informed the Standing Committee on External Affairs and National Defence that the cabinet had been informed of the problems prior to November 27.
The unkindest cut of all came from the one in charge of this ship of fools, the Prime Minister (Mr. Trudeau)-


Some hon. Members:: Hear, hear!


Allan Bruce McKinnon: -who, in reply to a question in the House, put the whole blame on the Minister of National Defence by saying that minister was responsible for the financing and the execution of the contract, which leaves us wondering if the Prime Minister was only trying to save the Minister of Supply and Services, or is he really ignorant of the role of supply and services in such a situation?
Other ministers played their part. Judging from his answers in the House, the President of the Treasury Board (Mr. Chretien) was obviously not consulted before the matter was before cabinet on November 27. Equally, the Minister of Justice (Mr. Basford) was not consulted concerning the legality of the government paying interest on the bank loan to Lockheed; whether this loan was not in fact a loan on behalf of the government and thus required parliamentary approval was quite apparently not brought to his attention until after the government had announced its support of such a dodge.
Concerning this loan, we have had the unedifying spectacle of the Minister of Supply and Services saying that such a loan would be repaid to the banks if Lockheed defaulted. At the same time he and all other interested ministers were devoutly stating that there would be no guarantee of the loan.
Casey Stengel once, when managing a very poor team, called them together and said, "Doesn't anyone here know anything about this game?" It is now time that someone called this group of minor leaguers, playing in the big leagues, together and told them what is expected of the team in charge of Canada at this time.


Some hon. Members:: Hear, hear!


Allan Bruce McKinnon: Unfortunately the manager in this case seems as incompetent as his players.
In the last several months the Minister of National Defence has been frequently questioned about alternatives if the Lockheed LRPA scheme failed. His answers seemed to indicate it would show a lack of faith in Lockheed to consider alternatives. The Conservative party has always supported and will continue to seek an early and rational replacement for the Argus.


Some hon. Members:: Hear, hear!
May 19, 1976


Allan Bruce McKinnon: I do hope the minister's myopia in this regard will be speedily cured and perhaps the next scheme produced will be rational. I hope it will not be accompanied by the means of self-praise that we were subjected to last December.
I must confess that I was never greatly concerned about the Canadian banks involvement in this deal. Their management is far more capable and far more astute than is the management of the government at this time.


Mr. Speaker:: Order, please. I should remind the hon. member that he has already gone some distance past the time taken by the minister.


Some hon. Members:: Oh, oh!


Allan Bruce McKinnon: Mr. Speaker, I can only say that this is a $1 billion arrangement about which we are speaking, although the minister responsible cut his time, and I ask the indulgence of the House to carry on for about two more minutes.


Some hon. Members:: Hear, hear!


Allan Bruce McKinnon: The attitude of the banks was best summed up by the president of one member of the consortium who said, "No banker in his right mind would lend money to Lockheed without an iron-clad government guarantee". Therefore, Mr. Speaker, the Minister of National Defence has blown $12 million for a final definition phase, plus $16 million for work in progress, plus the cost of the LRPA project office, some $6 million, plus the possibility of a suit by Lockheed; $34 million for sure, and maybe more. And there is nothing to show for it. In addition the minister made a fool of himself on the world stage at NATO last December and greatly eroded Canada's reputation as a responsible nation and ally. Now he has lost the confidence of the cabinet, which is the prime requisite for holding cabinet rank.
What is to become of a minister who shows his unsuitability for his portfolio in such a graphic and expensive manner, rests with the minister and the Prime Minister for the good of the Department of National Defence, and for the sake of Canada's reputation among our allies, the minister should offer his resignation.


Some hon. Members:: Hear, hear!


Allan Bruce McKinnon: He has let down the forces, misled our allies, and wasted $34 millions of the taxpayers' money. He should now move on to lesser things.


Some hon. Members:: Hear, hear!


John Edward Broadbent: Mr. Speaker, listening to the statement by the Minister of National Defence (Mr. Richardson) to the House this afternoon, both in tone and substance, I thought I was listening to the cancellation of a Sunday afternoon church social instead of the cancellation of a project that is going to cost the Canadian people anywhere from $16 million to $30 million, without getting us one aircraft. That is the implication. Money is going right down the drain. The minister is responsible for it, yet he is not at all concerned. Apparently
Orion Cancellation
his cabinet colleagues are, because there is not one left in the House.
Quite apart from the financial mismanagement, there is the very serious military implication. Our armed forces have been waiting, not for months, but for years for a suitable replacement for the Argus aircraft. Therefore we are short militarily, losing millions of dollars, and the minister sits there smiling in benign indifference. Surely something is wrong.
The minister said in his statement that the project has been cancelled because of the incapacity of Lockheed to provide bridge financing. Possibly the minister really thought he was purchasing bridges at one point, and that led to a real entanglement.


Some hon. Members:: Oh, oh!


John Edward Broadbent: The minister knew at least five months ago that the Lockheed Corporation was not in a position to provide that financing. I wish to quote two instances in the House when the minister spoke in rather calm tones about the seriousness of the situation. With reference to negotiations that had taken place some weeks and months prior, the minister said, as recorded in Hansard for March 26:
There was a difference between the amount of funds available in the national defence budget and the progress payments required by Lockheed. We explained this and were told by Lockheed that the difference could be financed by them. Subsequently they told us they could not do it. That is all there is to the misunderstanding. It is serious, but easy to explain.
It is serious alright, but I am not sure it is easy to explain. With reference to his earlier knowledge of his financial position of the Lockheed Corporation the minister said, and I quote:
We then made our decision and entered into detailed negotiations. It was in the final negotiations that it became apparent that what Lockheed had told us they could do they were unable to do.
That is with reference to negotiations and discussions that were taking place last fall. This process of negotiating, ordering, purchasing, and subsequently cancelling the purchase has been a colossal bungle from start to finish. The minister should have got commitments in writing last fall not verbal commitments on the kind of interim or, as he calls it today, bridge financing which was so essential to the whole project.
I support entirely the observation made by the spokesman of the Conservative party that this minister should resign. If ever there was a case of ministerial incompetence, we have had it clearly demonstrated here today. The minister came before the House and announced that a project for which he has been fighting, almost ad nauseam, without sufficient knowledge, is going down the drain.
I want to speak very briefly on the alternative because that is something the government must deal with, and deal with quickly. I hope I have not used all the time that my predecessor used: I will be one or two minutes more at most.
In the view of the NDP there has always been a more sensible alternative to committing ourselves to the $1.1 billion envisaged for the Orion deal. It is one which fits in with the No. 1 priority set out by the Department of
95568-31)4

Orion Cancellation
National Defence in the white paper back in 1971, that priority being the surveillance of our own territorial coastline. The Orion of the kind the minister wanted to purchase had basically nothing to do with that function; it had everything to do with Canada's NATO commitment. We say the government should practice what it preaches and take care of our No. 1 defence priority, which is the surveillance of our own coastline, in order to protect our fisheries or to spot submarine activity.
We are putting forward a straightforward proposal which makes both military and economic sense. The government could refit a dozen or so Argus aircraft-


An hon. Member:: Oh!


John Edward Broadbent: I hear cries of "Oh" from one member of the Conservative Party. I notice it is not their defence critic. Add to that, 18 or 20 Dash-7s produced by the DeHavilland Corporation, thus producing jobs for Canadians in Montreal and Toronto, and you have a package which would cost about $400 million only, and which would adequately meet the demands of our No. 1 defence priority. That is our suggestion to the minister, and I hope he acts on it.


Mr. Gilbert Rondeau (Shefford):: Mr. Speaker, it is strange, after all, that in Canada the Lockheed Corporation should continue for sometime to make the headlines. In all other countries, for at least a year, we have heard that this corporation had been involved in many scandals where politicians were mixed up. Here in Canada, it is the reverse situation. It is the federal government, which will, in the end, pay at least a subsidy directly to the Lockheed Corporation, a subsidy of $16 to $30 million, which will be a loss for the country.
Today, the minister just said that the financial position of the corporation was not good enough to gain the confidence of financial institutions in Canada to achieve this project of the Canadian government.
Yet no later than a few days ago, the situation looked pretty rosy and now we are told that it all seems hopeless. Mr. Speaker, I cannot blame the government for not proceeding with the purchase of those aircraft, as they may have realized that too late, unfortunately and the opposition seems to agree that we realized too late that the government was getting involved into a rather risky venture. However, as they say, better late than never. That may be why the government has decided to cancel the deal. But what upsets me greatly, Mr. Speaker, is to note that the two Lockheed main consultants are both former senior members of the civil service of Canada.
It would be interesting to delve further into that matter to know what role was played by those two former federal government officials who have become consultants for Lockheed. Perhaps the cabinet or some ministers were mislead by the recommendations of those officials who are now on the other side of the fence.
Mr. Speaker, I do not believe that because of the statement made by the minister today we will know all about this important matter which resulted in a loss of between $16 and $30 million for Canadians and which is why we are

now further back than we were seven or eight months ago in our national defence.
Mr. Speaker, in conclusion I would like to say that it is another evidence that we are at the mercy of strangers, that we are unable to solve our transportation problems, both in our merchant navy and our aviation, and as long as we will be at the mercy of foreign companies or governments, we are likely to suffer economic conditions such as those we are faced today, just like small fishes in a big lake.


Allan Bruce McKinnon: Mr. Speaker, I should like to direct a couple of questions to the Minister of National Defence in connection with his statement. I might say that I address them to the Minister of National Defence in the absence of the Prime Minister, the President of the Treasury Board-


Mr. Speaker:: Order. I would remind hon. members that the Standing Order under which we receive statements by ministers indicates that following the statement questions are permitted, at the discretion of the Chair, directed only to the minister who makes the statement, so there is no possibility of questions being directed to other ministers at this time.


Allan Bruce McKinnon: Maybe then I can compliment the Postmaster General (Mr. Mackasey) on sticking with the Minister of National Defence.


Some hon. Members:: Hear, hear!


Allan Bruce McKinnon: Yesterday the Prime Minister said that, using the hypothesis we would not proceed with the Lockheed deal, the government would consider other alternatives. Would the minister enlighten us with regard to any other known alternatives which are acceptable to the Minister of National Defence? If there are any, does he have the support of his colleagues for these alternatives, or even a mandate to proceed?


James Armstrong Richardson: Yes, Mr. Speaker. We clearly have a mandate to proceed, and this was referred to in my statement. I indicated that not only would we look at other alternatives but also that we would consider any renewed and financeable proposal by the Lockheed Company. We shall look at all the alternatives which have been discussed, including the continuation of the Argus, and any suggestions which may be made by the Boeing Company for a less expensive long range patrol aircraft. We are looking at those possiblities on an urgent basis now, because our commitment remains the same-to replace the Argus and to continue our anti-submarine role to meet our commitments to NATO.


Allan Bruce McKinnon: I am pleased the minister has gone further than he did in his written statement which I received at 1.30. Throughout the last few months we have constantly heard about the willingness of the government to table the documents as soon as this could be done without harming us in the negotiations. I now ask the minister when he would be willing to table these documents concerning the contract, as well as the contract itself. I would remind him that someone has "blown" $34 million; the country and the opposition have a right to
May 19, 1976

delve into this matter by perusing the original documents to find out where the truth lies.


James Armstrong Richardson: The contract is the direct responsibility of the Minister of Supply and Services, but it has not come into effect. We were to table it when it was in effect and fully signed, but there is no point in tabling a contract which has not been executed.


Some hon. Members:: Oh!


Mr. Baker (Grenville-Carleton):: Mr. Speaker, the Minister of Supply and Services (Mr. Goyer) is not in the House and therefore we cannot ask him this question-


Mr. Speaker:: Order. May I again state the rules for the benefit of hon. members? Standing Order 15(3) reads as follows:
On statements by ministers, as listed in section (2) of this Standing Order, a minister of the Crown may make a short, factual announcement or statement of government policy. A spokesman for each of the parties in opposition to the government may comment briefly thereon and members may be permitted to address questions thereon to the minister.
There is no provision, as hon. members will see, for questions to be directed to other ministers.


Walter David Baker: I thought I was just repeating the rule, Mr. Speaker.


Some hon. Members:: Oh!


Walter David Baker: My question is directed to the Minister of National Defence (Mr. Richardson), who is here. Would the hon. gentleman undertake to consult with his colleague, the Minister of Supply and Services, to determine whether or not it would be permissible for this document to be tabled in the House under Standing Order 41, whether it is signed or not, so that parliament and the people of Canada might have an opportunity to look into what is one of the biggest fiascoes in Canadian defence or financial history?


James Armstrong Richardson: I will, of course, consult with my colleague. I do not believe that a contract which has not been executed should be tabled, but I am prepared to leave it to his judgment.


Mr. Nowlan:: Both the Minister of Finance (Mr. Macdonald) and the newspapers have indicated that we are talking about a deal with Lockheed involving about $1.1 billion. I was wondering whether the minister could not give us a little more detail than was contained in his statement today so that the Canadian public might appreciate what is involved, not only in the Lockheed proposal but in some of the other areas which are under consideration.
The minister says in his statement that he will renew the search for the most effective way to replace the Argus. The minister has not started to come close to it. I should like to ask him what is the range of cost options of the various other proposals that have been studied over the last ten years, namely, the Boeing 707 proposal, the Phoenix proposal, the Argus refit proposal, and the P3C proposal,
Orion Cancellation
which is an off the shelf aircraft built by Lockheed. Any of these other proposals will cost the Canadian public a very large figure.
As a supplementary question, in the range of options for an effective replacement for the Argus, and supplementary to the question asked by my hon. friend from Victoria about the government's commitment, would the minister tell the House what timetable will be followed in searching for a new proposal, since it has already taken the government 10 years to get this far?


James Armstrong Richardson: Mr. Speaker, if I may answer the second question first, I indicated that in our present planning, even if we had been able to finance and purchase the Lochheed aircraft, we were going to use the Argus fleet until well into the summer of 1979, probably into 1980. That arrangement will continue. We will meet our anti-submarine obligations in that way, exactly as we would have had we made this purchase.
I said a moment ago that we will be proceeding on an urgent basis to find an effective replacement for the Argus, and hopefully that replacement will follow on within the same timetable, or very close to it, unless we decide that the most effective route is the one that the hon. member has suggested. He did make mention of the Phoenix proposal, and that included in part refurbishing some of the Argus aircraft. It was a mixed fleet concept involving other aircraft of long range and some of shorter range capability. It was a very attractive proposal, but one of the disadvantages was the cost of extending the life of the Argus itself. I am sure that we will have to face that increased cost again as we look at the alternatives before us.
Another alternative which we examined exhaustively was the Boeing 707. In round figures it was $400 million more to purchase the Boeing than the Lockheed, and also its operating cost was very much higher, particularly at low level. That was the reason for ruling it out. But this does not mean that we could not have some modified proposals from Boeing, using perhaps one of their smaller jets equipped with long range fuel tanks, or some variation of that kind. These are the kind of proposals that we will be examining.


John Patrick (Pat) Nowlan: I have a final supplementary question, Mr. Speaker. I realize other members want to ask questions on this important matter but I think we should have some clear understanding of some of the problems the minister faced. I also think there should be no misconception on the part of the Canadian taxpayers that some other proposal is going to save us x million or x billion of dollars. The other proposals or options are all in round figures, and these will change with inflation every year.
Having searched for 10 years, would the minister tell the House what the cost has been to date of the whole of this evaluation and revaluation process that has gone on? The hon. member for Victoria spoke in terms of $16 million being spent on the Lockheed project so far, some $6 million on the LRPA office project, and he made reference to the penalty. I am talking about what went on in the years before. Having gone through this trial of searching for the most economic and effective replacement for the Argus,

May 19, 1976
Orion Cancellation
does the minister really think we will end up with anything that is better?


James Armstrong Richardson: Mr. Speaker, it is, of course, not possible to give detailed cost figures for the alternatives because in recent weeks and months we have not been looking at alternatives. We have been working to complete the Lockheed purchase but we have been unable to do so because of their inability to finance the interim payments. I cannot go into further detail than I have already in describing in round figures the cost of the Boeing.
I should like to respond not only to the hon. member but to what the hon. member for Victoria said about the costs that we have already incurred. I believe the hon. member for Victoria said that we have nothing to show for it. Well, Mr. Speaker, there is something to show for it. I should like to put on record the fact that the Government of Canada is the legal owner of the design and project work that is represented by this figure. A portion of this preliminary design work will be common to the avionics system acquired by the government for any long-range patrol program. In short, some value has been received.
Because I think it is important to know what has taken place, I should like also to point out that as far back as 1972 both the Boeing and Lockheed companies placed work in Canada which was related to the long-range patrol aircraft program. Lockheed has placed in Canada to date some $48 million of work and Boeing some $35 million of work, for a total of $83 million of industrial benefit that is related directly and is credited to the long-range patrol program that has just terminated, so it is not accurate for the hon. member for Victoria to say that we have nothing to show for it.


John Edward Broadbent: Presumably, Mr. Speaker, we will have $16 million worth of photographs. I noted two additional references that were added to the copy of the text that we had in advance regarding the possibility of another purchase from Lockheed. If I am correct in assuming that the minister does not purchase any aircraft from Lockheed, would the minister confirm that we will have to pay Lockheed a minimum of $16 million? Is there any amount additional to the $16 million that we will have to pay? Finally, would we have had to pay anything had we not signed an agreement, symbolically enough on April 1?


James Armstrong Richardson: Mr. Speaker, again these negotiations are the direct responsibility of my colleague, the Minister of Supply and Services, but I can reply that the figure of $16 million is not a minimum; it is a maximum figure under the arrangements which my colleague made. In addition, I do not believe that that is necessarily the figure that we will have to pay. I understand from him that there will be negotiations with the Lockheed company to see whether in fact the total funds have been spent. So it will either be $16 million maximum or something less than that.
To answer the second part of the question, it was really to preserve our interests under the contract that he made that arrangement. If we had terminated the contract that had been negotiated up until then, we would have lost, as we have now, the industrial benefits. We would have lost the price that had been negotiated. It was for that reason that we agreed to put the contract into escrow to see

whether Lockheed would be able to achieve this bridge financing through Canadian banks.


John Edward Broadbent: The fact that the government signed that contract on April 1 seems extraordinary to a number of us, given the previous record. Is the minister saying that the development work to which the government now has copyright is worth $16 million? Is the minister telling us that these rights would be worth that in any commercial sense?


James Armstrong Richardson: No, Mr. Speaker. I am saying this is worth something.


An hon. Member:: How much?


James Armstrong Richardson: That will have to be measured. It would not be the full amount, but I was responding to the statement that we have nothing to show for it. We do have something to show for it.


Mr. Jones:: Mr. Speaker, this is a very serious matter and I do not think it should be considered lightly. It is probably one of the more serious matters that this House has considered, involving the defence of our nation. I should like to know whether the interim financing, the so-called problem, was the only real reason the deal with Lockheed fell apart? If there are no documents, agreements or written arrangements, why is Canada responsible to Lockheed for what some suggest is $16 million and others suggest is $34 million? Why are we responsible for any amount, and is it true that this amount, or some part of it, has already been paid to Lockheed, and how much?


James Armstrong Richardson: Mr. Speaker, these are areas to which I cannot respond directly because I do not carry out the negotiations of the contract. The total amount, as I have said, will not be more than $16 million. It will have to be negotiated by the Minister of Supply and Services, and it could very well be below that figure.


Mr. McGrath:: Mr. Speaker, a week or so ago in reply to my colleague, the hon. member for Humber-St. George's-St. Barbe (Mr. Marshall), regarding the deployment of search and rescue aircraft in Canada on the west coast and, more especially, in our own province of Newfoundland, which would help save lives and cut down the action time-we have already lost over ten fishermen this year- the minister said this would not fit the cost effectiveness. Can the minister explain the rationale and show how the writing off of $34 million fits into that cost effective philosophy of his?


James Armstrong Richardson: Mr. Speaker, I do not think the two matters are related. We have proceeded as we had to proceed in these Lockheed negotiations. The Lockheed Company is unable to arrange the financing, and without that the project cannot go ahead. I should like, if I may, to revert for a moment to the question of the hon. member for Moncton (Mr. Jones) as I failed to respond to the first part, which was whether or not there were any other reasons for not going ahead with Lockheed. There were none of any substance or importance. Last night the cabinet agreed, as my statement indicated, that if the bridge financing could
May 19, 1976

be provided by the Lockheed Company we would proceed to purchase the 18 aircraft. There were no other reasons of substance.


Mr. Crouse:: Mr. Speaker, I can assure the minister that his announcement will be a very serious blow to the people of my area, especially those who are looking to the government for some guidance with regard to the surveillance required when we establish the 200-mile limit. We are also concerned over the lack of sovereignty patrol, over the lack in respect of the NATO anti-submarine commitment which is required in Atlantic Canada, and certainly over adequate search and rescue facilities. All of these matters are of life and death concern to our people.
On the international scene the Prime Minister (Mr. Trudeau) stated he was seeking a contractual link with Europe, and we have commitments in Europe to maintain detente in that part of the world.
I would ask the minister whether he really put all his eggs in one basket, so to speak? If that is so, today is a good time to make a new beginning. The fact that the minister has goofed and blundered badly is unfortunate and the taxpayers will have to pay the loss for his incompetence and the incompetence of the government, but today is the time to start anew.


Mr. Speaker:: Order, please. Surely the hon. member will realize he has gone somewhat beyond the bounds of questioning into the area of representations.


Lloyd Roseville Crouse: I will put my question then, Mr. Speaker, and it is simply this: what will the minister tell his NATO allies when he meets with them in the very near future as to what alternative he intends to propose for replacing the Orion?


James Armstrong Richardson: Mr. Speaker, I will reply to that in a moment. I want to respond to the earlier question which was embodied in the statement. There will be no change in our capability for surveillance over the next five years. With our trackers, which are already in operation, and continuing with the Argus which, as I said, would have gone ahead in any case, and if we are successful in finding a replacement for the Argus, then we will have exactly the same degree of surveillance and protection as there would have been had we gone through with this specific contract.
Concerning our commitment to NATO, throughout all these negotiations, and particularly when we made this important decision, we were very conscious of our obligations to the NATO alliance. In my statement I tried to assure the House, and I hope to reassure our NATO partners when I visit with them in Brussels next month, that we are fully committed to meet our obligations to NATO. We are committed to staying in the anti-submarine role, and we intend to perform at the same level as we would have had this purchase gone through, except that we will be achieving that objective in another way.
Reference has been made to the taxpayers. We were very conscious of our obligations to the taxpayers, and that was again one of the reasons for the decision. We did not wish to expose the Canadian taxpayers to undue risk. Above all, we were committed to our obligations to the Canadian armed forces. We have this year increased our expenditure
Orion Cancellation
for new equipment by 34 per cent over last year. We have met our commitment to the forces in that respect, and we will continue to do so as we find the most effective replacement for the Argus.


Mr. Speaker:: Order, please. I have taken note of hon. members who have been seeking the floor since the question part of this procedure began. I think I should therefore conclude the question period by recognizing hon. members in this order: the hon. member for New Westminster (Mr. Leggatt), the hon. member for Halton-Wentworth (Mr. Kempling), the hon. member for Calgary South (Mr. Bawden), the hon. member for Marquette (Mr. Stewart), and the hon. member for Winnipeg South Centre (Mr. McKenzie).


Stuart Malcolm Leggatt: Mr. Speaker, in his statement the minister went out of his way to express appreciation to the United States for its willing co-operation, and I presume he was referring to the permission to increase the ability to lend money under the American Loans Board. Will the minister advise the House whether he requested any assurance at all from U.S. authorities in terms of guaranteeing Lockheed performance under this contract and, secondly, did he ask for any guarantees in the event of the bankruptcy of the Lockheed Company, and were these guarantees forthcoming from the U.S. government?


James Armstrong Richardson: Mr. Speaker, I was primarily referring to the assurance which the United States government had given us concerning its opinion and view of the financial viability of the Lockheed Company, and the company's ability to stay in business and in fact deliver the aircraft to us. The U.S government gave us strong assurances in that respect. It also gave us the assurance that in the unlikely event of bankruptcy we would be protected in the same way as the United States government itself in respect of its own military equipment being purchased from Lockheed.


Mr. Kempling:: Mr. Speaker, the minister in his statement said it was agreed by the cabinet that the government would proceed with the acquisition of 18 LRPA if Lockheed could provide the bridge financing. What intrigues me about this is the way Lockheed's financing is being rearranged. I note that the bank credit facilities Lockheed had were with a consortium of 24 U.S. banks, led mainly by Bank American and Bankers' Trust. These facilities expired on May 15, four days ago, and new credit facilities are being arranged. Why was the decision on this matter not deferred until new bank credit facilities were completed? It would appear to me that an order for more than $1 billion would be a damned good lever for Lockheed in seeking the necessary bridge financing from any banking facilities.


James Armstrong Richardson: Mr. Speaker, I believe the hon. member is speaking about the relationship between American banks and the Lockheed Company.


William James Kempling: Right.


James Armstrong Richardson: They are not directly related to the negotiations and discussions which took place with the Canadian banks. I may say that one of the problems which

May 19, 1976
Orion Cancellation
apparently was faced by the Canadian banks was that they would be subordinated to the position of the American banks. This, among other factors, was a reason for their not wanting to proceed with the interim financing.


Mr. Bawden:: Mr. Speaker, my question is for the Minister of National Defence. In view of the fact that Lockheed indeed was in political and financial difficulty, and that indeed any fool could see from its financial statement that it was virtually bankrupt and likely unable to provide the funds to complete this program and service these aircraft over a period of many years with spares, I should like to ask the minister how he could say in the House today that he was not looking at alternatives in recent months. The fact is that there was absolutely no second line of defence. I ask the minister how he could have risked the reputation of our government, the entire LRPA program, the reputation of Canada in NATO and in Europe, and the morale of our armed forces on a shaky company like Lockheed, with absolutely no back-up plans.


James Armstrong Richardson: Mr. Speaker, we did of course have extensive studies as I indicated in response to earlier questions with regard to other alternatives. The best answer appeared to be the Lockheed aircraft, it was the most cost effective of the alternatives we studied. It is also true that it is the only effective long-range patrol aircraft that is made in this part of the world. The others we were considering were converted passenger aircraft, and smaller aircraft that did not have the range, so I really think we were doing the right thing to try to proceed with Lockheed. But I agree with the hon. member that when it became apparent that we would have to finance the company, and that the banks would not do so, we took the only course which I presume from his statement is the course with which the hon. member agrees. We have ended the contract.


Mr. Stewart (Marquette):: Mr. Speaker, my question is very brief. Because of the minister's mismanagement of this whole affair has the Prime Minister asked for his resignation or, because his cabinet colleagues have deserted him, has he offered his resignation?


James Armstrong Richardson: Mr. Speaker, I have not tendered my resignation. My resignation has not been asked for. My colleagues have not deserted me.


Walter David Baker: Where are they?


Mr. Paproski:: Just look behind you, Jim. You are all alone.


James Armstrong Richardson: Mr. Speaker, I am referring to the decisions that we have made. In that my colleagues are in full support. Mr. Speaker, I should like to say that there is only one clear reason we could not proceed with the purchase of the Lockheed long-range patrol aircraft. That reason is that the Lockheed Company is unable to provide the bridge financing. I have a number of responsibilities. I know what they are. But I am not responsible for Lockheed's inability to provide this financing.


Mr. McKenzie:: Mr. Speaker, last fall in late November in the House, and during the committee meetings on December 1 the minister stated emphatically that work would

start immediately on these aircraft and that Standard Aero in Winnipeg and Bristol Aerospace of Winnipeg would get to work immediately to start manufacturing parts for these Orion airplanes. Could the minister tell us if these two firms in Winnipeg have made any preliminary preparations or have spent any of their own money in preparation for these contracts?
I should also like to ask the minister whether, with regard to any alternate purchases such as from Boeing, the Canadian government will have to put up the money for the financing of a Boeing plane or will arrangements have to be made through Canadian banks, or just how will the financing be arranged if it is decided to purchase the Boeing or any other aircraft that have been looked at.


James Armstrong Richardson: Mr. Speaker, to answer the last question first, clearly if we were dealing with the Boeing Company I think that company, with its great financial strength, probably would find it easier to provide the bridge financing than would some other companies. However, I cannot say until we get down to negotiations exactly what the financing arrangements would be. But clearly it would be easier, I think, financially for this company than it would be for one which has had some financial difficulties.
In answer to what was really the first question, I think the hon. member was not in the House when I pointed out a moment ago that something more than $80 million worth of industrial benefits had come to Canada already, directly credited to the long-range patrol program. This involved some $48 million worth from the Lockheed Company and some $35 million from the Boeing Company. Clearly with the contract not proceeding all the very substantial industrial benefits such as those mentioned by the hon. member will not be going forward, but in the other arrangements that we make, whatever they may be, whether they involve refurbishing the Argus or buying from Boeing, whatever is the best approach, substantial industrial benefits will be provided. We will make certain that they will be provided. In that sense there will not be any loss to the Canadian aerospace industry.


Mr. Speaker:: Order, please.


MESSAGE FROM THE SENATE
Mr. Speaker:: I have the honour to inform the House that a message has been received from the Senate informing this House that the Senate have passed the following Bills to which the concurrence of this House is desired: Bill S-34, an act to amend the Aeronautics Act; Bill S-35, an act to amend an act to repeal the Proprietary or Patent Medicine Act and to amend the Trade Marks Act.


BUSINESS OF THE HOUSE
Mr. Blais:: Mr. Speaker, there have been the usual consultations and there is agreement by all parties that a special order should issue relating to reverting to routine proceed-
May 19, 1976

ings at five o'clock this afternoon to permit the reception by the House of a statement to be made by the Minister of Energy, Mines and Resources. Mr. Speaker, the motion should read as follows:
That the House shall revert to Routine Proceedings at 5 p.m. on Wednesday, May 19, 1976 in order to permit the Minister of Energy, Mines and Resources to make a statement and to table a document; and
That the House shall not adjourn on that day until all proceedings relating to the said statement are completed.


Walter David Baker: Mr. Speaker, there have been the discussions to which my hon. friend alluded, but I think it is only fair to say that this consent has been given, or will be given, because on this particular occasion the ministry has seen fit to provide a copy of the statement in advance in sufficient time for the spokesman for the official opposition to prepare his response. I must say that that was not the case last evening. There may well have been reasons why copies were only provided a few minutes in advance last night in the case of our party and five minutes after the statement was started in the case of the NDP.
It is important that in terms of the procedures of the House, and in terms of the intent of the amendment made to the Standing Orders of the House, a copy of the statement be provided to all parties well in advance so that not only the minister's statement may be made but that the comments that are made and the question period that follows can be completely relevant. Surely the object of the rule under which this is being done is that the matter referred to in the statement can be fully covered in terms of the reply, and also that some questions can be put that are reasonable in all the circumstances, and therefore the House time be best used.
The consent given by us today, Sir, is in the spirit of the rules, and I hope that the parliamentary secretary will transmit this message to his chief, the President of the Privy Council (Mr. Sharp), who in turn will take it to his colleagues, that we will not grant consent on all occasions if reasonable time is not given in advance of a statement. In granting consent today I want to make it quite clear that we are prepared to observe our normal parliamentary customs and I hope the government also will be prepared to observe normal parliamentary courtesy with respect to notice, a courtesy which was not followed last night.


Mr. Knowles (Winnipeg North Centre):: Mr. Speaker, my remarks are essentially the same as those made by the hon. member for Grenville-Carleton (Mr. Baker). As the parliamentary secretary knows, we came very close to denying consent today because we were having difficulty in getting the reports into the hands of our spokesmen on this side. However, there was an agreement to put those reports in their hands; I assume that has been done and on that basis we gave our consent today, but we hope that these remarks will improve the practice in this regard.


Leonard C. Jones: Mr. Speaker, I think unanimous consent is required and I would like the courtesy of a copy of the statement put before me as well.


Mr. Speaker:: Unanimous consent is either forthcoming or it is not-it does not have conditions attached to it.
Order Paper Questions
However, I presume the condition of the hon. member for Moncton (Mr. Jones) can be met, and I therefore assume that unanimous consent has been given and that the House is now prepared to agree that the House shall revert to routine proceedings at 5 p.m. today in order to permit the Minister of Energy, Mines and Resources to make a statement and to table a document, and that the proceedings shall continue, if necessary, beyond normal adjournment in order to allow the Chair to exercise the discretion given to it in the Standing Order to complete the proper period of questioning. Is that agreed?


Some hon. Members:: Agreed.


Mr. Speaker:: It is so ordered.


QUESTIONS ON THE ORDER PAPER
[Stage Direction]
(Questions answered orally are indicated by an asterisk.)
Mr.   J.-J. Blais@Parliamentary Secretary to President of the Privy Council: Mr. Speaker, the following questions will be answered today: 3,865, 3,866, 3,869, 3,893, 3,894, 4,950, 5,033, 5,090, 5,093 and 5,185.


Mr. Nystrom: 1.	Will the RCMP Musical Ride be participating in the Rose Bowl Parade in Pasadena, California, January 1, 1976?
2.	Will the Ride be participating in events occurring in Los Angeles or San Francisco and, if so (a) what are the events (b) on what dates (c) in what locations?
3.	Will the Ride participate in festivities occurring during "Canada Day" at Disneyland?
4.	How many (a) participants of the Ride (b)non-mounted RCMP personnel will be travelling to California and what will be the function of the latter?
5.	Who and on what date (a) invited the Ride to participate in the events in California (b) accepted the invitation on behalf of the Ride?
6.	Other than the normal salaries paid to personnel participating in the California festivities, what is the (a) cost (b) type of transportation for (i) personnel (ii) horses from Canada to California and return?
7.	What is the cost of transportation of (a) personnel (b) horses while in California including a breakdown of cost from one centre to another in the State according to the travel itinerary.
8.	What is the total cost of accommodation of (a) personnel (b) horses on a location to location basis?


Hon. Allan J. MacEachen (Secretary of State for External Affairs):: In so far as the Department of External Affairs and the RCMP is concerned, the reply is as follows:
1.	Yes.
2.	Yes. (a)(i) NBC television Pre-Parade Show, (ii) Tournament of Roses Parade, (iii) College East-West AllStar Game (The Shrine Benefit Game), (iv) Canada Bicentennial Salute Weekend at Disneyland, (b) (i) December 30, 1975; (ii) January 1, 1976; (iii) January 3, 1976; (iv) January 3 and 4, 1976; (c) (i) Burbank, California; (ii) Pasadena, California; (iii) Palo Alto, California; (iv) Anaheim, California.
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May 19, 1976
Order Paper Questions
3.	Yes.
4.	(a) 43; (b) None; (c) Not applicable.
5.	(a) The organizers of the Tournament of Roses Parade invited the RCMP Musical Ride on September 30, 1974; (b) the Department of External Affairs accepted the invitation on behalf of the Government of Canada on January 29, 1975.
6.	(a)(i) Not available; (ii) Not available. The total cost for men and horses was $65,280. This represents the cost of the chartered aircraft which carried both the men and the horses. (b)(i) Aircraft, (ii) Aircraft.
7.	(a) $4,838.53; (b) $7,440. As all transportation arrangements were provided on a charter basis for the period of time that the RCMP element of the Canadian contingent was in California, the figures in (a) and (b) above cannot satisfactorily be broken down to reflect the travel itinerary.
8.	(a) No breakdown of RCMP personnel accommodation expenses is available. See Question 3,869, Question 7.


Mr. Nystrom: 1.	Will a special Scarlet and Brass Band made up of components of the Royal 22nd Regiment (Quebec City) and the Princess Patricia Regiment (Edmonton) participate in American Bi-Centennial festivities in California, and in the Rose Bowl Parade in Pasadena, California, January 1,1976?
2.	Will the bands also participate in events occurring in Los Angeles and San Francisco and, if so, what are (a) the events (b) their locations (c) date of participation?
3.	Will the special band participate in festivities associated with "Canada Day" at Disneyland?
4.	What is the total number of participants in the DND contingent (a) how many band members (b) how many ancillary members (c) the purpose of their function?
5.	Other than the normal salaries paid to participants, what is the cost to DND in this endeavour for (a) transportation from Canada to California and return (b) transportation while in California including a breakdown of cost from one centre to another in the State according to the itinerary (c) accommodations on a location to location basis?
6.	Who and on what date (a) invited (b) accepted the invitation on behalf of the DND Scarlet and Brass Band contingent to participate in the events in California?
Hort. Allan J. MacEachen (Secretary of State for External Affairs): In so far as the Department of External Affairs and the Department of National Defence is concerned, the reply is as follows: 1. Yes.
2.	Yes (a)(i) NBC television Pre-parade Show-Princess Patricia Canadian Light Infantry Band; (ii) Salute to the Bicentennials of the City of San Francisco and of the American Revolution; (iii) Salute to San Francisco-Royal 22nd Regimental Band; (iv) College East-West All-Star Shrine Game in support of Crippled Children-Princess Patricia Canadian Light Infantry Band; (v) Canada Bicentennial Salute Weekend at Disneyland-Royal 22nd Regimental Band; (b) (i) Burbank, California; (ii) Union Square, San Francisco; (iii) Civic Centre, San Francisco; (iv) Palo Alto, California; (v) Anaheim, California; (c) (i) December 30, 1975; (ii) December 30, 1975; (iii) December 30, 1975; (iv) January 3, 1976; (v) January 3 and 4, 1976.
3.	No (See 2(a)(v) above).

4.	(a) 130; (b) None; (c) Not applicable.
5.	(a) Nil; (b) Nil; (c) Nil.
6.	(a) The organizers of the Tournament of Roses Parade, Pasadena, California invited Canadian participation, including the Scarlet and Brass Band in February, 1975; (b) The Department of External Affairs, in consultation with the Department of National Defence, accepted the invitation on behalf of the Government of Canada.


Mr. Nystrom: 1.	Is the government going to be represented in the Rose Bowl Parade in Pasadena, January 1, 1976 and, if so (a) is the means of this representation going to be a floral banner (b) what is the cost of the floral banner?
2.	Are personnel of the Department of National Defence, as well as personnel and horses of the RCMP going to be participating in events in Pasadena as well as other locations in California?
3.	Will the Department of External Affairs be undertaking the cost of transportation of the contingent to California and, if so (a) what is the means of transportation (b) who will provide such transportation (c) what is the cost of such transportation?
4.	Who and on what date authorized the payment of the transportation and how was it contracted out?
5.	Will the Department of External Affairs be undertaking the cost of transportation of the contingent from one location to another within California and, if so, for each portion of the contingent (a) what will be the means of transportation (b) who will provide such transportation (c) what is the total cost of transportation (d) what is the cost of its travel itinerary?
6.	Who and on what date authorized payment of transportation and how was it contracted out?
7.	Will the Department of External Affairs be undertaking the cost of accommodation of the contingent while in California and, if so (a) what are the locations in which accommodation is to be obtained (b) what is the number of people to be housed in each location (c) what are the specific addresses of the accommodations in each location (d) what is the cost of accommodations on a location by location basis?
8.	Who and on what date authorized the use of the specific locations and how was each site of accommodation selected?


Allan Joseph MacEachen: 1. Yes. (a) Yes. The floral banner headed the special Canadian section of the Tournament of Roses Parade; (b) $7,500.
2.	Yes.
3.	Yes. (a) Air charters, regularly scheduled flights and buses; (b) Voyageur Colonial Ltd., CP Air, Air Canada; (c) $84,100.60.
4.	Contracts for the aircraft chartered from CP Air and Air Canada were signed on December 5, 1975. Two tenders were let and contracts were won by Air Canada and CP Air respectively. Charter costs totalled $78,662. Additional air flights and ground transportation were required to connect with the charter aircraft and these were arranged by the Department of External Affairs.
5.	Yes. (a) Travel between Los Angeles and San Francisco was by the air shuttle service. Local ground transportation was by bus, truck or car as circumstances demanded; (b) Air service was provided by Pacific Southwestern Airlines. Local ground transportation was provided by Embree Buses Inc.; (c) $39,209.75; (d) As all transportation arrangements were provided on a charter basis for the period of time that the various elements of the Canadian
May 19, 1976

contingent were present in California, the figure in (C) above cannot satisfactorily be broken down to reflect the travel itinerary.
6.	Authority for the payment of transportation expenses was included in the decision of the Treasury Board dated May 12, 1975, which authorized Canadian participation in the Roses and related Bicentennial activities. The type and nature of transportation in the California activities was the result of numerous operational decisions made by officers attached to the Canadian Consulates General in Los Angeles and San Francisco and with the concurrence of the Department of External Affairs in Ottawa. Each decision was based upon the anticipated requirements, the local knowledge of the officers concerned, and the ability of local firms to provide adequate transportation at the times required.
7.	Yes. (a) and (c): (i) Beverly Wilshire Hotel, Worldway Postal Centre, Post Office; Box 92663, Los Angeles, California, 90009; (ii) Roadway Inn, 840 South Indian Hill Boulevard, Clairemont, California, 90014; (iii) Holiday Inn, 1755 North Highland Avenue, Hollywood, California, 90028; (iv) Royal Inn, 1855 South Harbor, Anaheim, California, 92802; (v) Holiday Inn, 625 El Camino Real, Palo Alto, California; (vi) Holiday Inn, 750 Kearny Street, San Francisco, California; (vii) Fairmont Hotel, Atop Nob Hill, San Francisco, California, 94106; (viii) Holiday Inn, 480 Sutter Street, San Francisco, California; (ix) San Francisco Hilton, Mason and O'Farrell Streets, San Francisco, California; (b) (i) 14; (ii) 43; (iii) 268; (iv) 102; (v) 199; (vi) 199; (vii) 9; (viii) 8; (ix) 8; (d) (i) $3,155.28; (ii) $3,155.43; (iii) $16,126.94; (iv) $3,965.76; (v) $3,084.90; (vi) $5,829.00; (vii) $426.12; (viii) $333.90; (ix) $320.12.
8.	The selection of accommodation for the California activities was the result of numerous operational decisions made by officers attached to the Canadian Consulates General in Los Angeles and San Francisco and with the concurrence of the Department of External Affairs in Ottawa. Each decision was based upon the proximity of the hotels to the performance sites and the ability of the hotels in those areas to provide sufficient space of an acceptable standard.


Miss MacDonald (Kingston and the Islands): 1.	Did the National Committee for Habitat visit certain centres for public bearings and meetings and, if so, which ones?
2.	What are the total (a) fees to be paid to (b) travelling expenses of, the members for such meetings?
3.	How many staff were in attendance at each meeting including administrative, secretarial, information, professional and contract?
4.	What were the total travelling expenses for all staff for such meetings?
5.	What were the total organizing expenses for such meetings including advertising, printed material, hall rentals, etc.?
6.	What is the estimated number of the general public not including employees of any government or the media who attended each meeting?


Hon. Barney Danson (Minister of State for Urban Affairs):: For the Canadian Habitat Secretariat 1. The National Committee for Habitat held public meetings in the following centres: Inuvik, Whitehorse, Prince George, Van-
Order Paper Questions
couver, Quebec City, Edmonton, Montreal, Halifax, Fredericton, Toronto, Thunder Bay, Frobisher Bay, St. John's, Winnipeg, Charlottetown, Regina.
2.	(a) Total fees paid were $7,400; (b) Total travelling expenses were $16,200.
3.	At each meeting the Canadian Habitat Secretariat provided one administrative officer, one program officer, and one information officer to assist and service the members of the National Committee for Habitat. At each meeting, with the exception of Inuvik and Winnipeg, the Secretary of State Official Languages Conference section provided two or three interpreters for English to French and French to English simultaneous interpretation. As the Secretary of State office could not provide interpreters for Inuvik and Winnipeg, the Department of Supplies and Services let contracts to provide for simultaneous interpretation interpreters. At each meeting, the firm of International Translation Services of Toronto provided a technician with simultaneous interpretation equipment. This firm was awarded the contract by DSS.
4.	Total travelling expenses for Canadian Habitat Secretariat staff, Secretary of State interpreters and public relations people, were $22,000.
5.	Organizing expenses, including simultaneous translation, rentals, hospitality and advertising, totalled $75,000.
6.	Attendance by the general public at each meeting was as follows: Inuvik, 70; Whitehorse, 35; Prince George, 45; Vancouver, 250; Quebec, 47; Edmonton, 175; Montreal, 135; Halifax, 30; Fredericton, 30; Toronto, 138; Thunder Bay, 50; Frobisher Bay, 100; St. John's, 85; Winnipeg, 110; Charlottetown, 16; Regina, 90.


Miss MacDonald (Kingston and the Islands): 1.	Have symposia and seminars been organized for Habitat and, if so (a) what are they (b) how many persons attended each (c) how many persons were paid by the government?
2.	What are the total expenses incurred in connection with such meetings?
3.	What provision has been made for distributing the results of such meetings?


Barnett Jerome Danson: For the Canadian Habitat Secretariat: 1. Fourteen symposia were organized by the Canadian Habitat Secretariat and held across Canada in September, October and November 1975. The objective of the symposia was to stimulate an interchange between specialists and concerned citizens about Canadian human settlement issues and alternatives for the next decade. The following table lists the symposia, giving, for each the date, location, topic, number of participants and number of persons who were paid by the government.
95568-32%

Order Paper Questions
Date	Paid by
1975	Location	Topic	Attendance	Government9-10 September	Winnipeg	Factors Affecting Rural/Urban Migration	111	1110-11 September	Whitehorse	Planning for Small Communities	75	412-13 September	Yellowknife	Resource Based One Industry Towns	68	919 September	Ottawa	International Cooperation for Human Settlements	168	326-27 September	St. John's	Provision of Community Services and their Financing	63	93-4 October	Halifax	Housing Types and Life Styles	85	917-18 October	Saskatoon	National Impact of Growth Management Policies	50	524-25 October	Moncton	Employment Opportunities and Development of Communities	65	831 October-1 November	Quebec City	National Impact of Growth Management Policies	58	56-7 November	Red Deer	Planning for Small Communities	86	6 (see item 213-15 November	Toronto	Public Land Ownership	350	below)14-15 November	Charlottetown	Conservation of Land and Energy	60	421-22 November	Vancouver	Environmentally Appropriate Technology and Life Styles in Human Settlements	125	1228-29 November	Victoria	Appropriate Use of Land	212	62.	Symposia expenses, (including simultaneous translation, travel expenses of panelists, speakers and CHS staff, rentals, hospitality, advertising) totalled $112,000, of which $5,000 was contributed by the Canadian Habitat Secretariat to York University for the organization of its symposium.3.	A report on each symposium is being prepared, translated and distributed to all participants. It is also being circulated to approximately 50 persons per symposium who were unable to attend but who requested all information relating to the topic, and to members of the Interdepartmental Task Force for Habitat, the IDTF Working Groups for Habitat, the Canadian National Committee for Habitat, and the Federal Provincial Preparatory Committee for Habitat. Approximately 300 people have requested copies of all 14 reports. In addition, a synthesis of the 14 reports is now being prepared.


Mr. Jones: 1.	What was the total cost of the Fit-Kit recently introduced by the Minister of National Health and Welfare, including (a) salaries (b) binder (c) printing (d) recording (e) cost of cutting the records (f) other expenses?
2.	Did the government copyright (a) all (b) part of the material in the Fit-Kit and, if so, at what cost?
3.	What amounts were paid, or are payable to persons or firms for the publication and/or rights to publish the items contained in the Fit-Kit?
4.	Who authorized the expenditures for the Fit-Kit and under what authority?


Marc Lalonde: 1. (a) to (f) inclusive. The cost of 100,000 copies of the Fit-Kit was $451,678. This figure includes the cost of printing, recording, cutting of the records and all other expenses, with the exception of the salaries of the Fitness Section. Staff salaries are estimated at $15,000 over the last two years. Total amount recoverable to the Department from sales of these Fit-Kits will be $80,000 for the balance of the 1975-76 fiscal year. Based on present sales trends, it is expected that this amount will be considerably greater in the 1976-77 fiscal year. It is anticipated that, ultimately,-production costs will be fully recovered through Fit-Kit sales.
2.	The government did copyright all parts of the material in the Fit-Kit. All material, except as noted below, was original work or contracted research of the department and, therefore, required no financial outlay for copyright.
3.	The Health and Fitness booklet was originally copyrighted by the Scandia Insurance Company in Sweden and this has been produced in Canada and amended by permission of the copyright owners at no cost to the Canadian Government. The music on the Canadian Home Fitness Test was original music developed and purchased by the Canadian Government for $14,087, which includes all future rights for use of this music. $2,000 was paid in residuals for the four artists whose voices were used on the Canadian Home Fitness Test. Except for these, all other contributions from non-government sources have been assigned to the federal government at no cost.
4.	The expenditures for the Fit-Kit were authorized by the Minister or his duly delegated representative under the terms of the Fitness and Amateur Sport Act.
May 19, 1976


Mr. Beatty: 1.	What was the cost to the taxpayer, if any, for the printing and distribution of the booklet entitled Habitat UN Conference on Human Settlement recently distributed by the Commissioner General of the Canadian Habitat Secretariat?
2.	How many were printed and to what categories of persons were they distributed?


Mr. Jean-Robert Gauthier (Parliamentary Secretary to Minister of State for Urban Affairs):: For the Canadian Habitat Secretariat. 1. The printing cost for this booklet totalled $47,338 for the 30,135 copies produced. It will take some time to determine the actual cost of distribution since a large percentage were sent by diplomatic bag to the Canadian Missions abroad who, in turn, distributed the booklets in each country.
2. Of the 30,135 copies printed, 23,684 have already been distributed to the following. Vancouver office of the Canadian Habitat Secretariat, Foreign Embassies in Ottawa, Canadian Missions abroad, United Nations, United Nations Associations representatives, Permanent Missions to the United Nations, CIDA representatives, Habitat Bulletin overseas distribution list, Habitat Forum News distribution list, Canadian Government offices of Tourism, Canadian Consulate, Milan, Provinces, NGO list, The Hague, NGO list, ACSOH, Vancouver, RCMP Commanding Officers/Chiefs of City and Provincial Police, Senators and Members of Parliament, Provincial Premiers and Cabinet Ministers, Foreign Government representatives (from World Travel Directory), National Travel Agents Associations (from World Travel Directory), ASTA Board of Governors, International Division of ASTA, President and Executive Vice-President of ASTA, Host Broadcaster's list, CNGO PG mailing list, Editors, Radio and TV Stations at points of call Mayors, Air Canada, Eastern Pacific and Pacific Western Managers at points of call.


Mr. Caouette (Temiscamingue): What was the total amount spent from 1970 to 1975 under the Manpower Training Programme for (a) men (b) women for (i) training costs (ii) grants in the Constituency of Temiscamingue?


Robert Knight Andras: Institutional and Industrial Training Expenditures!!) Rouyn, Quebec!*)
	1970-71 to 1975-76 Institutional		Industrial*3*
Training	Allowance	TrainingFiscal Year	Costs ($)	Costs ($)	Costs ($)1970-71	813,580	665,656	N/A1971-72	986,903	807,466	174,9581972-73	1,089,441	891,361	160,6121973-74	1,023,808	837,661	29,3401974-75	972,722	795,864	325,3761975-76 April-February	1,002,225	820,002	238,977(0
Order Paper Questions
(1)	Allowance costs are actual, training costs are estimated, industrial training costs are contracted costs.
(2)	The area covered by the Canada Manpower Centre (CMC) in Rouyn most closely matches the constituency of Temiscamingue.
<3) For this CMC, there was only the Training-on-the-Job (T.O.J.) Program in 1971-72, but in 1972-73 and 1973-74 they had both Training-in-Industry (T.I.I.) and T.O.J. These programs were combined in 1974-75 to form the Canada Manpower Industrial Training Program.
<4) Figure is for all of 1975-76.
Note: Expenditures are not available on a calendar year basis or by sex for a CMC.
CANADIAN HOME FITNESS: FIT KIT-INVITATION TO LIFE STYLE PROGRAMME


Mr. McKinley: What was the total cost to the government of the (a) Invitation to Life Style Programme (b) Canadian Home Fitness Test (c) Kit Fit Programme?


Marc Lalonde: (a) Invitation to Life Style Programme, $25,800; (b) Canadian Home Fitness Test, $186,169; (c) Fit Kit Programme, $265,510 (Note: $80,000 recovered to date.).
Note: The answers to questions 5,185 and 4,950 refer only to those items mentioned in parts (b) and (c) of this question.


Mr. Coates: 1.	(a) Who produced the Fit-Kit distributed by the Department of National Health and Welfare (b) were tenders called and, if not, for what reason (c) how was it determined who would purchase the kit and by which department?
2.	How many kits were purchased and what was the total cost?
3.	Were the kits offered for sale and, if so, what department handled the sale?
4.	Was there any recovery from the sale and distribution of the kits and (a) if not, for what reason (b) if so, how much?


Marc Lalonde: 1. (a) The Fit-Kit was designed and produced by Recreation Canada of the Fitness and Amateur Sport Branch of the Department of National Health and Welfare; (b) Tenders were called through the Department of Supply and Services for production of various items such as the record, brochure and calculator; (c) The marketing plan was done in the Fitness and Amateur Sport Branch. This was supplemented by a market survey which confirmed the assumption that the Fit-Kit would appeal to people of all ages and all walks of life.
2.	100,000 Fit-Kits were purchased at a total cost of $451,678.
3.	The Fit-Kit has been on sale since March 9, 1976 through Information Canada (Canadian Government

May 19, 1976
Business of the House
Bookstores) across the country, through major outlets and through some associations.
4.	The Fitness and Amateur Sport Branch recovered $80,000 to date from the initial purchase of 50,000 kits by Information Canada and a commitment from them for re-orders of 10,000 kits at one time. Based on present sales trends, it is expected that this amount will be considerably greater in the 1976-77 fiscal year. It is anticipated that, ultimately, production costs will be fully recovered through Fit-Kit sales.


Mr.   J.-J. Blais@Parliamentary Secretary to President of the Privy Council: Mr. Speaker, if question No. 2,835 could be made an order for return, this return would be tabled immediately.


Mr. Reynolds: 1.	How many men and women were sentenced to life imprisonment in the past fifteen years (a) what were their names (b) what was the date of their sentence (c) what penitentiary were they originally sent to serve out their sentence?
2.	How many such persons have received weekly or temporary absence passes (a) what were their names (b) what were the dates of the passes (c) how many times have they received them?
3.	How many persons were released on parole and what was the date of such release?
Return tabled.


Jean-Jacques Blais: I ask Mr. Speaker, that the remaining questions be allowed to stand.


Mr.   J.-J. Blais@Parliamentary Secretary to President of the Privy Council: Mr. Speaker, I ask that all notices of motions for the production of papers be allowed to stand at this time.


Some hon. Members:: Agreed.


BUSINESS OF THE HOUSE
Jean-Jacques Blais: Mr. Speaker, may I just take this occasion to respond to the comments that were made by the House leaders of the other parties. I would like to point out, with reference to the statement to be made at 5 o'clock, that it is subject to a lock-up. As hon. members know, the subject matter is one that has to remain confidential until such time as the minister is ready to make the statement. I fully agree with the House leaders of the opposition parties that the courtesy of a notice should be extended to the chief

spokesmen for the opposition parties. This has now been extended and I hope it will be the practice followed in the future.
With reference to the statement made last evening, I agree that a copy of the statement was provided to the opposition parties' spokesmen rather late but, as I understand it, the reason was that the statement was being prepared right up to the last minute, negotiations were being carried out, communications were in process with various provincial authorities up to the last moment, so the document was not made available until the minister was ready to make the statement.
I would also indicate to hon. members that I sought the consent of the House to deal with the motion yesterday at a very late stage, and we got the consent around 4 p.m. At that time the statement was not yet ready. The decision to make a statement yesterday by the Minister of Energy, Mines and Resources was a late decision by the government, and effectively that is the reason why a copy of the statement was late in reaching spokesmen of the opposition parties. I should also like to point out that these reasons were communicated to the leaders of the three opposition parties. The hon. member for Moncton (Mr. Jones) was not here yesterday when we disposed of these motions.


Walter David Baker: Mr. Speaker, I rise on the same point of order. I appreciate the explanation, but in order to observe what I previously described as parliamentary courtesies-because as it turns out there was no real import in the timing of the statement-the government might well have considered having the minister make the statement today so that the two statements might better have been made together.
Dealing with the question of the lock-up, I hesitate to remind the parliamentary secretary of this but members of the House are hon. members and I am satisfied that it would not be necessary to lock up any members of the House in order to give them the advance information which is given to the press in these circumstances.
It has been the practice here-and I have been party to it-for the government House leader to indicate well in advance what legislation would be brought forward in case of an emergency, and to ask me, my colleague, the hon. member for Winnipeg North Centre (Mr. Knowles), and the House leader of the Social Credit party to keep the matter confidential. So far as I know these undertakings have never been broken. I hope that the government regards the spokesmen of the opposition parties as hon. members in terms of any undertaking for which they may ask and which they may receive so that the spirit of the rules which I have mentioned could be carried out that notice be given in advance of a statement, and that an opportunity be given to prepare appropriate questions so that the fullest possible examination could take place within the limited time under the rules. I think this practice is a sound one, and it is quite important for the intentions of the drafters of this relatively new Standing Order to be carried out.


Stanley Howard Knowles: Mr. Speaker, on behalf of my colleague, the hon. member for Winnipeg North (Mr. Orlikow), who has gone to a meeting of a
May 19, 1976

standing committee, I should like to raise a point of order. My colleague draws my attention to the fact that his notice of motion for production of papers No. 86 has been on the order paper since February 11. It does not look as if it needed long to produce. I hope that my comment will draw the matter to the attention of the parliamentary secretary and will result in the return being produced very soon.


Jean-Jacques Blais: It usually does, Mr. Speaker.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed, from Tuesday, May 18, consideration of the motion of Mr. Allmand that Bill C-84, to amend the Criminal Code in relation to the punishment for murder and certain other serious offences, be read the second time and referred to the Standing Committee on Justice and Legal Affairs.
Mr.  R. Gordon L. Fairweather@Fundy-Royal: Mr. Speaker, I cannot imagine anything more designed to make one's words disappear than to be interrupted by the clock in the middle of a speech, but because I have had the opportunity to speak on this issue on other occasions I shall not worry too much about timing. Anyway I am not going to take the entire time allocated to me on second reading.
When I was speaking last night at ten o'clock, Mr. Speaker, I was reminding hon. members of a particular person in the city of Moncton whom I want to honour and I did honour him last night. He has provided leadership on this difficult issue not only to his church but to all of us who are New Brunswickers and to other Canadians as well. I refer to the Archbishop of Moncton, Donat Chias-son, who has spoken so eloquently about the issue, has written to the Prime Minister, and has expressed himself publicly in the newspapers. I cannot imagine an archbishop being embattled, but I can imagine there are many people who do not support his Christian point of view on this issue. What excites me about the Archbishop is his obvious courage and leadership characteristics.


Mr. Allmand:: Hear, hear!


Mr. Fairweather:: Having said that about the Archbishop of Moncton, I should like to share the views of others who have spoken who have been immensely comforted or assisted by groups, largely from the Canadian churches, which support the abolition of the death penalty. I think of a wonderful statement by the Mennonite Brethren; the Catholic Conference which after a long period of silence on the issue spoke in eloquent terms when it came up in 1972, of the United Church of Canada, the Presbyterian Church, and many in my own Anglican Church who are convinced abolitionists and who, at the risk of worrying those who
Capital Punishment
profess to be followers, make clear and unequivocal statements in favour of abolition.
There seems to be a wonderful network not only of church people but of those in secular life who hope this debate will mean that at last Canada can join those nations of the world which have abolished the death penalty from their statute books. The network is one of very great comfort and satisfaction because, as the debate goes on through the years, time after time we hear from those people who have espoused this cause, some at rather great risk to themselves and to their political futures.
The importance of the issue we debate has been darkly underlined by the amount of time and energy it has occupied in the life of every thoughtful Canadian. Every newspaper in the country has devoted column inches to the subject. Just a couple of months ago the Ottawa Citizen carried a leading article on the 100 years of that newspaper's crusade for the abolition of capital punishment. If it is risky to be an abolitionist today, I can imagine that in 1875-76 the flak was even heavier. Perhaps to the great advantage of the people who represented us in those days, members of parliament did not take refuge behind Gallup polls to reach their conclusions.
The Ottawa Citizen ran a leading article on its 100 years of involvement; universities have sponsored debates; opinion groups have sent petitions; individuals have written letters-oh, how they have written letters. As I reminded the House last night usually those who wish to hang, wish to hang in red ink. Opinions have been sought-of course they have been sought. Any member who does not seek opinions, who does not wish to debate is failing in his duty to his constituents, I think.
Politicians have made speeches. Surely the purpose of parliament and the legislative process is to provide the time and means for the special study of issues which by their very nature are emotion-charged and terribly complicated, to provide a chance for those of us who have been given the responsibility by our constituents to consider these issues by reason and discussion, rather than by prejudice or passion.
But the debate over this particular issue has been going on for the last ten years. Since 1966 there have been three major debates on capital punishment, 700 pages of debate and discussion have been devoted to it-38 days in the House and committee. That, Mr. Speaker, does not include the over 50 speeches and the 20 hours in this thirtieth parliament. I would now hope, indeed I will venture to suggest, and I did this last night, that surely it is time for this issue to be removed from the agenda of all of us-


Some hon. Members:: Hear, hear!


Robert Gordon Lee Fairweather: -from the agenda of parliament so that the Solicitor General (Mr. Allmand), who in my opinion must have had to spend needless hours on this absolutely minute aspect of the criminal justice system, can get on with the business of dealing with criminal justice, providing good detection methods and certainty of conviction once detection had occurred.
I am not one of those who feel it is wrong to be debating this again because I devoutly hope this will be the debate that ends the issue. When I was in London last September

May 19, 1976
Capital Punishment
I spoke to several members of parliament who had various views on capital punishment, but to a woman and to a man those members at Westminster said the issue is over in Britain; it has been debated ad nauseam; decisions have been made-the issue is moot. I hope very much that this will occur in Canada very soon.
This is not to say that I think the issue is not important, Mr. Speaker. On the contrary I believe deeply in the sacredness of human life. I ask that we bear this in mind; that we bear in mind that a person who commits a crime is after all part of human society, just as his victim is. It occurs to me that although many speeches have been made about the victim, very few comments have been made about the compensation systems in place in many provinces which in money terms-and surely this is a most inadequate way to try to ameliorate the effects of death- but in money terms at any rate various provinces have tried to alleviate the problems of the victim's survivors. I had occasion myself to ask that the Ontario Compensation Fund be used for the burial of a victim of a murder. The fund responded rapidly and with very little red tape.
The taking of human life, I think we must agree, is an act of supreme arrogance. My conviction about the brutality and futility of capital punishment dates from my early boyhood when, if I can use a metaphor, our household was afflicted with the gloom of a veritable Good Friday as my father, who was a Justice of the Supreme Court, was importuned by people connected with the justice system, the judges and those in other walks of life, to spare the life of somebody who would, perhaps in a day or two, be executed. I need not go into the relationships involving the tiral judge in those circumstances; but the request was made, nonetheless. The judiciary was not removed from those pressures. No judge who is human can be removed from them. I can only say that on those occasions in our household the deepest gloom prevailed.
That, of course, is not enough reason for me, now in adulthood, to support abolition. Obviously there are many other aspects of the question to be considered. But I do remember that our household was not a nice place to be in on those occasions. I hope my colleagues think that I have arrived at my present decision by the use of whatever reasoning and rational process are at my disposal.
As I said last night, as I have said 100 times, even 1,000 times, hanging will not save the life of a policeman; hanging is no deterrent to violent crime. It is time we decided the issue once and for all.
My colleagues will be glad to hear that I have almost finished. Yesterday the Secretary of State for External Affairs (Mr. MacEachen) was able to announce that instruments of ratification were in the process of being signed so that Canada could accede to the Declaration of Human Rights of the United Nations. It was a long time a'borning. This will be understood by those who understand the constitutional complexities of this country. Surely it would be the supreme irony if Canada, after waiting literally a generation, would become a signatory to the United Nations Declaration of Human Rights as the very time when parliament should reject this bill and start

again his horrible aspect of the criminal justice system, execution by hanging.
Lastly I ask, as I did at the beginning, must night fall again in this country? Must ministers of the Crown, and must we all, since after all we all have a share in this decision-making, be asked to start this horrible engine again? The discussion has gone on endlessly. Surely it is time for Canada to take its place among the civilized nations of the world which possess certain intrinsic values which tell us that the time has come to abolish capital punishment.


Mr. Bob Kaplan (Parliamentary Secretary to Minister of National Health and Welfare):: Mr. Speaker, this bill has been debated at length, and debate will continue for some time. I listened with interest to the arguments of the hon. member for Fundy-Royal (Mr. Fairweather). Having read what has been said and listened to in this debate, I observe that I do not think much more can be said on one side or the other of the question we are considering.
What has interested me is the extent to which similar arguments have been used on both sides of the question. Members have spoken on the effect of capital punishment. Some members argue that it has a deterrent effect; others, that capital punishment encourages the commission of capital crimes. We have heard arguments based on moral and religious grounds, based on Biblical justification, and so on. These authorities and justifications can be used to support arguments on either side of the question, it seems to me.
The House has discussed rehabilitation and the undeniable possibility of miscarriage of justice, of someone being found innocent, after all, after the sentence of capital punishment is carried out.
The argument which has moved me enormously is the one concerning the social implications of capital punishment, the argument that says that if we examine those who have been the victims of capital punishment over the decades we shall find that they are not a cross-section of Canadians, not even a cross-section of criminals in our system. They have been the poor, the people at the bottom of our economic and social system. They, invariably, seemed to be the ones to suffer the penalty of capital punishment.
Having said that, I wish to make a couple of other observations before putting a proposal to this House. I suggest that public opinion is an extremely important factor in the determination of an issue like capital punishment. The system of justice in our country after all is the people's system. It must be a system which accords with the population' sense of what is right and fair, and which makes the Canadian people feel secure. Although individual members of parliament perhaps spend more time studying this question than the man in the street, and are exposed to a greater cross-section of argument and expertise, all of which must be brought to bear on our deliberations, when you come right down to it we are asked on behalf of the people of Canada to provide a system of justice they think is fair.
I do not see how any member of this House can escape the undeniable fact that the majority of the people of Canada are of the opinion-however you want to measure
May 19, 1976

or count it-that there is a place for capital punishment in our system of justice. I insist that this House must respond to that concern.
It is also true, I think, that there is a great variety of opinion among retentionists about what place capital punishment ought to have in our system. You cannot hold a referendum on the subject because some people feel you should retain capital punishment for hijacking, treason, and kidnapping; others, that it should be retained in the narrow case of murderers who commit murder for pay. Some retentionists also question the power of commutation and how that power ought to be exercised.
Before I make my recommendation, I wish to point out one of the difficulties we shall encounter if we proceed to vote on the bill in its present form. I think that the matter will be decided by a narrow majority on one side or the other. A large minority of members, who will represent a large segment of public opinion, will oppose that decision, no matter how the House decides on that important question. For that reason I wish to make a proposal for an amendment, for which I hope there will be a fair degree of consensus. I will bring forward a proposal which I think can be supported by abolitonists because it recognizes their point of view, but which will preserve capital punishment among the panoply of remedies available under the Criminal Code.


Leonard C. Jones: Mr. Speaker, I rise on a point of order. There is not a quorum present. I think the House should adjourn.


An hon. Member:: The quorum has been called.


Robert Phillip Kaplan: Mr. Speaker, I consider that a solid life sentence is as effective a deterrent, in general terms, as capital punishment. I am prepared to argue, from the moral point of view, that a solid life sentence, if I can put it that way, is just as rigid and just as oppressive a punishment as capital punishment itself.
I listened with interest to the hon. member for Fundy-Royal talk about his experience with the application of capital punishment. I invite him-perhaps he has already done it-to talk to some people who have had imposed on them a life sentence, people who have been in prison for 25 years or more. There are some in Canada who have had that. He should then come to a conclusion about whether the capital punishment that upset him as a youngster is more of a severe penalty than the penalty of life imprisonment.
I now come to the point. What I intend to propose when this bill goes to committee is an amendment that will continue capital punishment, not for the most serious criminal acts in general, but for those acts committed by individuals who are already subject to life imprisonment as a sentence under the bill proposed in the House today. In other words, I am saying that this heavy, solid life sentence is, as far as I am concerned, an effective deterrent in general. However, what is the deterrent in this sentence for a violent crime committed by a lifer while in prison?
As an example, I refer to prison executions. Almost every time convicts take over a prison, they kill two or three of the other prisoners to whom they take strong
Capital Punishment
objection. When the Kingston penitentiary was recently taken over by the convicts, the first people they killed were the criminals serving long indeterminate sentences for sex crimes. Who are they to impose the death penalty on fellow prisoners? They pick the men who have nothing to lose, those already serving life sentences, to carry this out. They are not deterred by the life sentence when trying to escape or from being a danger to the life and safety of prison guards as well as to their fellow prisoners. I want to see us turn to an amendment which would reserve capital punishment for that very narrow area.
I am also going to put into the amendment that capital sentence should be non-cummutable by the cabinet. It should be a definite, emphatic, non-commutable death penalty subject to only one thing, that being if the jury recommends clemency in the case of a lifer who commits a serious capital crime, the cabinet should have the power to review the decision and commute it.
I feel the position I have put forward can be viewed as an abolitionist position because it elminates capital punishment for a very broad range of crimes where the solid life sentence is an equal deterrent. However, I invite those who are concerned about protecting society to consider what deterrent there is for the person I have described who has nothing to lose by committing serious crimes in prison, trying to escape, or endangering the system of order within our penitentiaries, as well as the crimes he might commit after he escapes. This is a real problem where I would argue that capital punishment is an obvious deterrent and I think it ought to be continued.


Mr. A. D. Alkenbrack (Frontenac-Lennox and Addington):: Mr. Speaker, once again this House is debating the question of capital punishment. I have spoken four times in this House on capital punishment over the past ten years; August 4, 1966; November 14, 1967; May 23, 1973; and October 19, 1973.
Sometimes it seems to me that this new liberalism that holds the reins of power in this country has developed and fostered a firm schedule of debate that includes deficit budgets, capital punishment, unemployment, inflation, and scandals in the ranks of the government. I do know that all this debate on capital punishment over the past decade has not availed us of a firm policy in dealing with murderers and other dangerous offenders in our society. It has not accomplished anything to improve the level of public security in our country. Because the government has adopted and maintained a namby-pamby attitude toward the treatment of dangerous criminals, we now have open season on law enforcement officers and prison guards.
The gist of this debate is the traditional basic reason for government; protection of persons and property. Neither the Prime Minister (Mr. Trudeau) nor his government care anything about the protection of persons and property. This has been shown recently in this House. Yesterday during private members' hour from 5 to 6 p.m. Bill C-255, sponsored by the hon. member for Burnaby-Richmond-Del-ta (Mr. Reynolds), came up for debate. This bill would greatly assist in the protection of persons and property. It would provide for the establishment by all Canadian telephone companies of an emergency telephone number.

May 19, 1976
Capital Punishment
The bill has a great deal of merit and should have been passed. It was deliberately talked out by Liberal members-the hon. member for Renfrew North-Nipissing East (Mr. Hopkins) and the hon. member for Niagara Falls (Mr. Young)-much to the disgust of the rest of the House, including many private members on the government benches.
Canada badly needs a universal emergency number. The use of it would no doubt aid in our efforts against capital crime and lawlessness of all kinds. The Liberals talked the same bill out on March 26 last, at which time it was sponsored by one of their own members, the hon. member for Toronto-Lakeshore (Mr. Robinson). This is the new Trudeau liberalism in action at its best, or perhaps I should say at its worst.
We have an opportunity and responsibility in this debate to stop shilly-shallying over the question of capital punishment and do what we should have done many years ago. We should carry the war to the enemy. People who engage in deliberate anti-social conduct, who commit deliberate pre-meditated murders and other forms of violent conduct, are the enemies of our society. They are engaged in war, Mr. Speaker, and we in this House are engaged in a holding action. An analysis of the statistics available to all of us could indicate but one thing; we are losing the war.
The Solicitor General (Mr. Allmand) has declared more than once recently that if anyone hangs in this country he will resign. Now, Mr. Speaker, as an elected servant of the public, and a special one at that, placed in an office of trust, elevated to the cabinet, he should resign for making such irresponsible statements. We are fighting a war against capital crime, and how ridiculous can the Solicitor General make himself when he lowers the prestige and dignity of his office by making such statements? He can be compared to a war minister, a minister of defence, who would declare that he will refuse to fight a war that the country might be engaged in but he still wants his job. Again I say, let him resign.
Many of the hon. members of this House, some of whom are my colleagues, continue to speak out on behalf of the poor, misunderstood and maligned criminals. While I respect their right to hold and express their own views on this or any other subject, I cannot accept the argument that we, the state, do not have a moral right to employ capital punishment as an extreme measure in dealing with violent and capital crime.
Murder is the extreme method in settling an argument, in pulling off a major crime such as a robbery, or to settle any other matter in which a criminal might become engaged. In fact nothing could be more extreme. I simply cannot understand how anyone could become overly sympathetic over a murderer who happens to be unlucky enough to get caught.
I was appalled the other night to hear a tape of a conversation a reporter had with a prisoner in a Montreal jail who had been involved in a hostage-taking incident. When the reporter asked the prisoner whether he would have killed the hostages, the man laughed and said he would not have hesitated. Asked how he could have done such a thing when he had never committed a murder

before, the prisoner laughed again and said he did not say he had never killed anyone, just that he had never been caught.
Arguments that capital punishment demeans a society, or that capital punishment is as barbarous as the crime for which it was originally proposed, are specious and unwarranted. People who argue that the state does not have a legal or moral right to impose capital punishment are using a personal and restricted definition of justice. It is all too easy to "cop out" and say that murder is murder, whether committed by a criminal or by the state. Mr. Speaker, I would accept the proposition that a state can commit murder. A totalitarian state can, but not one such as Canada. But I will not accept the contention that a state can commit murder in the context offered so frequently in these debates as a valid reason for abolishing capital punishment.
When a person is tried in a duly constituted court bound by laws of procedure and evidence, as is the case in Canada, and found guilty by his or her peers, whatever verdict is rendered by that court should determine what the disposition should be. When a verdict calling for execution is rendered by a judge and jury, unqualified by a recommendation for mercy, the state is bound to see that the execution is carried out. This would not be murder. It would be the administration of true justice in consequence of a deliberate murder having been committed-I use the word "deliberate" because we have always made a distinction between deliberate murder and other actions leading to a person's death.
The Minister of Justice (Mr. Basford) went to the Canadian public last Sunday night by way of the television program "The Nation's Business" to present his fatuous argument that capital punishment would not be a deterrent to the crime of premeditated murder, and to try to sell his proposal regarding gun controls. He told his audience that those who have presented counter proposals do not understand the legislation.
I am amazed that the minister would go on national television and try to convince the Canadian people that the spokesmen for the national gun clubs and associations cannot read, that they cannot interpret legislation. They know full well what the intent is of this legislation, just as they know the intent of the legislation which would abolish the death penalty. I am surprised the minister did not use a couple of minutes of his television time to explain what the gun control law is intended to accomplish. Instead he spent the entire program period complaining that people just do not understand him or his legislation. Mr. Speaker, we understand him all too well. He has fallen for the old story that if you take guns away from the law-abiding you will eliminate murder and other crimes committed with guns, with the result that capital punishment to deter people from committing deliberate murder would not be necessary.
The minister also asserted there was no evidence to support the view that capital punishment was a deterrent to murder. How could there be any evidence of that kind when the hon. gentleman and his cabinet colleagues have commuted every single sentence imposed on convicted murderers of policemen and prison guards over the past ten years? In these circumstances, how could there be any
May 19, 1976

evidence that we in parliament could weigh when we are debating measures to protect Canadian citizens from murderers and other violent criminals? We would have some evidence to evaluate if the Minister of Justice had had the courage and the sense of responsibility to allow the sentences of our courts to be carried out. I suggest he has no right to tell the Canadian people there is no evidence to support the position of the retentionists in this House.
For a long time it has been common knowledge that retentionists outnumber the abolitionists throughout the country and, indeed, in this House. The minister knows that if his views prevail and capital punishment is abolished it will be because of the majority which the government commands in this Chamber and the political compulsion imposed on members of the cabinet to vote in favour of the bill before us.
The minister tries to make a case in favour of abolition on the ground that executions carried out by the state amount to murder and that the state does not have the right to commit murder in order to punish the crime of murder. What complete and utter nonsense. A state can commit murder, but not in the way suggested by the Minister of Justice. The Prime Minister's buddy, Fidel Castro, has committed thousands of cold-blooded murders in the name of the state. That great friend of our Prime Minister has condemned thousands of people in his kangaroo courts and then had them murdered in the course of disgusting public executions.
I do not agree with the minister that we will be committing murder if we allow the sentences passed by Canadian courts to be carried out. I would point out that when a person is charged with capital murder and appears in our courts, he or she has recourse to laws of procedure, laws of evidence, and the benefit of adequate legal counsel. The accused has the advantage of being considered innocent until the prosecution can establish guilt beyond a reasonable doubt. Should guilt be established, the accused has the benefit of an avenue of appeal extending through lower court all the way to the Supreme Court of Canada. Anyone who compares this process to the sham and shame of a so-called Cuban or Russian court trial should have his head looked at.
What we are talking about here is the right of the state to adopt stern measures to protect the majority of law-abiding people in our country from an anti-social minority. What we are talking about is whether or not the government opposite will accept its responsibility to the electorate and use all of the weapons available to us so as to win the war against violence and capital crime. The criminals are using all the weapons they have. Can we do any less?
The Canadian government, like all other governments, maintains the armed forces in readiness to defend our people from aggressors. Our soldiers, sailors, and airmen might be called upon as they have been in the past to kill in the defence of our country and our free society. Some of those who spend all their time pleading the cause of murderers and other violent criminals say war is state-subsidized murder. This is a high-sounding phrase and one which gives these people an excuse to "cop out" when they are called upon to defend the society which has defended them. No, Mr. Speaker.
Capital Punishment
While crimes might be committed by individuals in certain wartime situations, under cover of war, as it were, the act of going to war in defence of Queen and country is not in itself a crime. Let the abolitionists dredge up some more credible excuse for the cop out they propose. Let them match their philosophies and their theories against the reality of everyday crime in Canada and tell us that capital punishment is more brutal than the crimes which it is intended to deter. I insist, Mr. Speaker, that a state which maintains a judiciary such as we have in Canada, a state which allows as many opportunities of appeal against court sentences as ours does, cannot commit murder. We can permit murder, we can forgive murder, and we can punish murder. But we cannot commit murder.
I am just as interested in the rehabilitation of anti-social persons and misfits as anyone else, but I think it behoves members of parliament to approach the subject of rehabilitation with somewhat more realism than I have seen exhibited by many so-called experts on human behaviour. In my view, a lot of them have their priorities mixed up. The criminologists and the sociologists are not the only ones who are mixed up, though.
The new Liberals, the disciples of Trudeaucracy, are also mixed up. At the moment they are chasing each other around the Liberal squirrel cage wondering who is leading and where they are going. These new Liberals are those who advocate abolition and who insist, at the same time, that the answer is rehabilitation. At the present time they are confused by the antics of the Minister of Justice who is trying to satisfy retentionists by promising longer prison sentences as the answer to the abolition of the death penalty. He promised to keep convicted murderers behind bars for 25 years. At first the new Liberals accepted this logic, happy that at long last they would see the death penalty abolished. But then the new Liberals-and they are not all from the Liberal party-realized they would not be able to rehabilitate these poor, misunderstood, and maligned capital murderers if those offenders were required to spend 25 years behind bars. They realized that a person 25 years of age would be 50 years old when released from prison. That person's productive life would have been spend in confinement. A person convicted of premeditated murder at age 40, and sentenced to 25 years, would be 65 years old when released, ready for old age security.
This debate is taking place under indeed trying times for parliament and especially for the Liberal government which is now holding the reins of power. They stagger along from day to day in disarray and chaos. It has got so bad that the Prime Minister is now unable to confront the confusion, corruption, influence peddling, graft, and hypocrisy of his own administration and the Liberal party. The latest example is the ineptitude and bungling of the Lockheed Orion deal today and the resultant loss of thirty-four millions of dollars of taxpayers' money. That surely is capital punishment, of a different sort!
This administration will go down in history as one in which the credibility of government, of parliament, and of the individual members thereof, reached its lowest point. The latest polls show the Prime Minister at a new low of unpopularity. Do not be fooled, Mr. Speaker, into thinking

May 19, 1976
Capital Punishment
that this does not affect private members of this House. Our popularity is down too. If you conducted a poll on us you would find that out. Our credibility is down, especially the credibility of those who support the Prime Minister's policies. This is the new Trudeau liberalism. Where is it taking Canada?
What is the history of Trudeau liberalism? Over the past 10 years it has been one of loose government and permissiveness. Its policies have invited an increase in the rate of all crime. In its craven efforts to avoid capital punishment it has disobeyed its own law. It has declared its deep interest in rehabilitation in the past, and has allowed early and easy paroles. The results of this policy have aroused the general public who are convinced that the government no longer cares about protecting persons and property. This is the new liberalism.
Now under the Liberals they bring forth this bill and they say to the representatives of the people here, "We wish to abolish capital punishment and substitute instead 25 years in prison". Through you, Mr. Speaker, I ask the Prime Minister, the Solicitor General, the Minister of Justice, and all the authors of this bill, where is your noble experiment with rehabilitation now? If this bill passes, rehabilitation goes out of the window. Twenty-five years in prison precludes and destroys all hope of rehabilitation for anyone convicted of capital crime. So you see, Mr. Speaker, when you trace the sinuous deviations of the Trudeau government, it is a government with a majority mandate that refuses to govern. It should resign.
The government has a few spokesmen out through the country who are trying to make excuses for this legislation. The other day when I was driving to Ottawa from Napanee, Wednesday, May 5, I was listening to stations CJET, Smiths Falls, and CKWS, Kingston, which were carrying the comments of one named McCaulay, broadcasting over CBC from Moncton, which was the scene last year of the fiendish murder of the two Moncton policemen by Hutchison and Ambrose. You will recall, Mr. Speaker, that these two now convicted men captured the two policemen, took them out into the country to murder them, but made them dig their own graves first. The decision on their appeal is being awaited from the Supreme Court and I think they deserve a punishment commensurate with what they meted out to their two helpless victims.
To get back to Mr. McCaulay, the freelance broadcaster over CBC on that date, he said that Canadians are a blood-thirsty lot in their demands for the exaction of capital punishment for capital crime. He was very slanted and sarcastic in his comment. He said the cross-section of the majority of Canadians who demand the use of capital punishment were rural people, Roman Catholics, the less educated, policemen, prison guards, God-fearing Christians-as though Roman Catholics were not God-fearing Christians-older men, right wingers, residents of Quebec. And to top it all off, Mr. Speaker, he had to return to the Catholics again and say that a Catholic with grade 8 education is a typical Canadian "Archie Bunker". The government is pretty hard up for a spokesman to put that over the CBC air waves.
I say as a supporter of those groups, thank God for the rural people, the Roman Catholics, the less educated, the policemen, the prison guards, the God-fearing Christians,

the older men, the right wingers, the residents of Quebec, and those Canadian "Archie Bunkers" who are trying to preserve Canada and to protect persons and property. Thank God for all those people I have enumerated who stand up for the retention of capital punishment. Thank God for that majority of the Canadian people for whom and for whose opinions the government shows such contempt in this bill.
I regard it as one of the prerogatives of power of a democratic nation, governed by responsible government, that it always reserves and maintains the right to demand the life of any of its citizens as the penalty for premeditated capital crime. Along with capital murder, this also includes those convicted of treason against our country. The abolition bill about to be presented to parliament completely ignores the latter crime, which if successfully committed can mean the destruction of our nation and its form of government.
I have profound respect for the opinions of abolitionists, but there is one point more I must make. When I was first elected to parliament in 1962 capital punishment was one of the laws in force on our statute books, although it was only adivsedly and astutely enforced from time to time. Capital punishment is still on our statute books to be administered to murderers of policemen and prison guards, alghough under Liberal administration, since its inception, all cases have been commuted to life imprisonment.
My point is this. The people of Prince Edward-Lennox, my first constituency, and now the people of Frontenac-Lennox and Addington, through a total of six parliaments did not send me as their representative to Ottawa to abolish capital punishment, for had this been their wish, I certainly would have heard of it on the hustings at each election. I also contend that when the state carries out a sentence of capital punishment imposed by the courts it is not committing another murder but is simply administering justice according to the law of the land.
I believe that the will of the people to maintain the survival and security of the collective whole of a nation, such as Canada, is morally correct, and that the retention and exaction of capital punishment for premeditated capital crime, including treason, is not an immoral act. It is indeed the administration of true and swift justice, and there is nothing more morally correct than justice.


Mr. Marke Raines (Burnaby-Seymour):: Mr. Speaker, I have some comments to make on capital punishment and I am prepared to make them now, but in view of the time I will call it five o'clock and continue at the next available opportunity.


Mr. Speaker:: Order, please. Pursuant to order made earlier this day the House will now revert to Routine Proceedings for the specific purpose of permitting the Minister of Energy, Mines and Resources (Mr. Gillespie) to make a statement.
May 19, 1976



ROUTINE PROCEEDINGS


Alastair William Gillespie: Thank you, Mr. Speaker, and my thanks as well to all members of the House for giving their consent to enable me to make a statement at this time. As hon. members will appreciate, the reason for making the statement at this time is because all the markets of Canada are now closed.
On April 27 I laid before this House a document setting forth the government's strategy for dealing with the energy issues of the next 15 years. That strategy contained nine key policy priorities. Today I wish to advise members of new initiatives which are indicative of the government's decision to move toward self-reliance in energy by 1985 and which support, in particular, the announced policy priorities.
They are, first, increased exploration and development; that is to say, to double at a minimum exploration and development activity in the frontier regions of Canada over the next three years; secondly, increased resource information that is to say, to accelerate the flow of accurate information about the Canadian resource base; and the third priority area, greater Canadian content and participation in resource development.
The new supportive policies are contained in a document entitled "Statement of Policy-Proposed Petroleum and Natural Gas Act and New Canada Oil and Gas Land Regulations" which, with your permission, I will table at the end of my remarks, and copies of this statement are being made available to all members.


An hon. Member:: How many rabbits are in this one?


Alastair William Gillespie: Mr. Speaker, the existing Canada Oil and Gas Land Regulations governing the disposition and administration of oil and gas rights in the north and in the offshore were promulgated in 1961. Since that time there have been major changes in the petroleum situation, both nationally and internationally, and technological advances have changed greatly the capability to explore for and develop oil and gas reserves. It is necessary to up-date the regulations pertaining to Canada's frontier areas so as to provide increased public controls over exploration and production, modernize the system for collecting economic rent, and at the same time continue to encourage exploration for new reserves. As emphasized by our strategy report, all of this must be done under acceptable environmental and social conditions.
The great bulk of Canada's frontier areas that can be considered as prospective for exploration with current technology is already held under permits issued in accordance with the existing regulations. Thus, in order to institute meaningful changes in the existing system, it is necessary to amend substantially the terms and conditions of these permits, which currently contain commitments to
Energy
lease and royalty conditions extending for periods exceeding 50 years. This necessitates the adoption of appropriate legislation designed to impact on present contractual obligations.
However, it cannot be over-emphasized that the continued involvement of industry is essential, not only from the standpoint of providing investment capital but for the source and flow of exploration concepts, as the discovery of new reserves is a function of the input of new ideas engendered by the competitive nature of the business. A discovery may be the result of several successive waves of exploration based on different methods of collecting and utilizing information.
What I should like to do is deal with this very complicated area under six headings with some brief comments on each. The six headings are: period of tenure, new work obligations, new fiscal system, preferences for Petro-Canada, production orders, and last but no means least, Canadian participation and content. First is period of tenure.
Under the current regulations exploration in the frontier areas is undertaken on rights that have been issued by the government in the form of permits. A permit allows the holder to explore a designated area for a period of 9 to 12 years, depending upon regional location, and gives him the exclusive right to drill exploratory wells within that area. Production of oil and gas cannot be undertaken from a permit, the permit must first be converted to lease during which process at least half the acreage must be surrendered back to the Crown. The company then has had an option to reacquire that acreage in return for higher royalties for any oil or gas produced from it. The tenure of a lease has been 21 years, with provision for renewal of a like period if producible.
Under the new regulations existing permits will remain in effect but with modified requirements. However, there will be no 21-year oil and gas leases. Instead, the permittee if still in the exploration stage of operations will be able to go to a 5-year provisional lease covering the entire permit area. Upon commencement of production, where this occurs either in the permit stage or in the provisional lease stage, a 10-year production licence will be issued. Production licences will have a provision for a 10-year renewal period based upon production capability. A new incremental royalty plan for all production replaces the added royalty from the 50 per cent Crown acreage of the present arrangement, to which I alluded a moment ago.
I should like to turn now to new work obligations. Under the new regulations, a combination of incentives and work obligations is designed to impact upon oil and gas rights currently held by industry so as to increase exploration efforts. The minimum levels of work obligations that holders of existing permit rights must satisfy will be increased significantly for most areas. For example, under the new regulations the new work levels for the Scotian Shelf and Grand Banks will be increased threefold.
Under the new regulations the minister will continue to have the power to extend the period of exploration rights through the granting of special permit renewals when permits have come up to the end of their normal life tenure, with such special renewals subject to levels of work as he may order, including the drilling of exploratory

May 19, 1976
Energy
wells, thereby promoting exploration efforts in areas where this may be desirable.
Bequests for special permit renewals will become increasingly frequent over the next few years. By mid-1979 about half of the existing permits will have expired, and the remainder will run out by the end of 1984. Alternatively a permittee may opt to hold some acreage under a provisional lease, in which case it will be subject to payment of annual rentals of $2.50 per acre, versus $1.00 per acre per year for leases under the current regulations. This $2.50 per acre per year may be refunded to the extent that exploration work is carried out on a provisional lease, thus providing another means for promoting the increase of exploration activity.
The pace of exploration may be further advanced by orders to drill exploratory wells on specific oil and gas prospects which are now under permit even though all present permit terms have been met. If the holders of the rights fail to have such drilling done the government may direct that the national oil company, Petro-Canada, drill instead, thereby earning an interest in the prospect. I will expand on this later. Another factor that will act as incentive to exploration is the early release of information, especially seismic data, that has been collected by the oil companies and filed with the federal resource management agencies.
The third section deals with the new fiscal system related to economics of individual fields. Under the new regulations a permittee will be allowed to hold a production licence covering the entire productive area within his permit. Under the old regulations, as mentioned previously, upon conversion of a permit to lease half of the permit acreage had to be returned to the Crown. If the returned acreage was considered sufficiently attractive by the company, it could exercise an option to reacquire the surrendered lands in return for higher royalties on production from those lands. This system was a method of receiving a portion of economic rent in addition to the nominal royalty levied, 5 per cent for the initial 3 years of production and 10 per cent thereafter. Under the new regulations, economic rent beyond the basic royalty, which will be a flat 10 per cent, will be received by the government through a progressive incremental royalty system. "PIR" will be used henceforth in my remarks as progressive incremental royalty system.
Unlike a flat royalty system, which penalizes marginal fields and does not ensure a fair return to the government from highly profitable "bonanza" fields, the PIR system depends on the net revenues generated by a particular field and so is progressive in nature and profit sensitive. The incremental royalty is not payable until the investments in production facilities for a field are largely recovered, the basic 10 per cent production royalty and income tax have been allowed for, and a return of 25 per cent is realized on the development investment as calculated on a field-by-field basis. This level of earnings is designed to allow the recovery of average exploration costs as well as to generate a reasonable level of profits on total investment.
The PIR will provide for a fair return to Canadians from their resources, and it will also allow industry a fair rate of return on its high risk investments. By delaying collection

of the Crown's share of resource revenue until production takes place, the new fiscal arrangement ensures that scarce resource capital is channelled directly into exploration and development rather than into bonus payments and other front-end charges. As a further means of promoting early exploration, the government will allow a 3-year PIR-holi-day in respect of oil and gas discoveries made before June 30, 1980. I wish to stress, however, that contrary to many recent comments the incremental royalty scheme is exactly that-incremental to the basic 10 per cent royalty.
The fourth section referring to Petro-Canada is a very important section. As an agency of the government, Petro-Canada has an important role to play in accelerating exploration for oil and gas in the frontier areas. It will be given certain preferences with respect to the acquisition of oil and gas rights in Canada lands. Petro-Canada, subject to meeting levels of work obligations similar to those imposed upon other companies, will have the right to acquire any existing areas not now covered by permits or leases, as well as 25 percent of any acreage that returns to the Crown upon the termination of permits or leases over the 7-year period following promulgation of the new regulations. Lands in these categories are commonly termed Crown reserves.
Where no prior discoveries have been made, Petro-Canada will also have the option to acquire a working interest of up to 25 percent in permits that are granted special renewals by the minister as well as any provisional leases issued while operations are still in the exploration stage, with no pay-back of past exploration expenditures to the permittee. As extensions of this type will only be sought for attractive prospects, the 25 percent working interest option will be of significant value to the national company.
As mentioned previously, the minister may consider it necessary on a need-to-know basis to order a permit holder to carry out an exploratory drilling program on a prospect within his permit acreage. Should the permittee fail to do so within a reasonable period of time, Petro-Canada may be directed by the governor in council to undertake the drilling program itself, in which case Petro-Canada can earn up to the entire interest in a prospect. In such a case the permittee will be allowed to retain at most a half interest in the subject prospect, and if he chooses not to commit to pay half the drilling costs before the program commences, then he must pay Petro-Canada four times his share after the first well, six times after the second, or eight times after the third to reacquire 50 percent of the prospect under his permit.
In respect of production orders, to support further the attainment of Canadian self reliance the government will be provided with the authority to order a producer in the frontier areas of Canada, the Territories, and offshore, to commence production of oil or gas into domestic markets at prevailing wellhead prices notwithstanding the existence of any arrangement between the producer and a purchaser for purposes of export to a foreign market. Moreover, the government will be able to take both the basic royalty and PIR in cash or production in the case of oil or natural gas. In the latter case, the government's
May 19, 1976

share of production can be directed to domestic markets as considered desirable-an additional option.
The last heading I indicated I wanted to cover with regard to these new and complicated regulations is Canadian participation content. As regards Canadian participation in the petroleum resources under Canada lands, the Minister will be empowered to require a 25 percent minimum level of Canadian ownership in producible properties, and he will be able to exercise discretion as to the method by which this level is attained. Only about one third of existing permits are now held by parties or groups of parties having a level of Canadian ownership which would meet this requirement. Stated another way, 65 per cent of all the acreage under permit at the present time is held by companies which have less than 25 per cent Canadian ownership. We want to change that.
This provision will help strengthen the Canadian presence in an industry at present more than 90 per cent foreign owned. Another aspect is that the use of Canadian goods and services will be enhanced in a number of ways, for example, as a requirement for granting special renewals for permits; as a provision in new exploration agreements; and during the course of granting approvals for work programs and allowable expenditures.
As is readily apparent, the discretionary powers envisaged under the new regulations will be far more extensive than those under the current regulations. There are many difficult decisions to be made as regards existing exploration permits, in particular the need to establish new requirements for widely differing areas as increasing numbers of permits reach the end of their normal life over the next few years. As regards future oil and gas rights, there are the basic decisions as to where and on what terms and conditions such rights should be made available by way of public tender or in some cases issued directly by order in council. In the former case, choosing successful applicants in the future will not be a matter of simply picking the highest bidder; there will be a number of factors to be considered in the best interests of Canada.
Equally important and difficult will be decisions involved after the discovery of producible oil and gas. The new rental collection system will require the determination of a number of factors involving far more than normal accounting procedures, indeed requiring a high degree of oil and gas expertise. The development of the necessary administrative organization and personnel should, therefore, be ideally within one group and the government proposes to set up a new unified resource management agency. This new agency will at the same time provide the vehicle through which preferential treatment as regards Canada lands will be effected for Petro-Canada, and it will maintain an objective balance between Petro-Canada on the one hand and industry on the other in the implementation of matters under the new regulations.
In summary Mr. Speaker, this new policy which will be presented for parliamentary consideration this fall is designed to meet equally important but sometimes conflicting objectives-increased exploration and discovery, and greater control over the activities of the industry which must carry the lion's share of the exploration risk. We are confident that, following extensive discussions with that industry, as well as with the provinces, we have
Energy
reached the fine balance which will prove to be in the national interest.
Mr. Speaker, with your permission-


Mr. Speaker:: Order, please. The minister is indicating his intention to table some documents. Earlier the order was that we would revert to Routine Proceedings, namely, tabling of documents and statements by Ministers in order that the minister might be permitted to table some documents and make a statement.


Alastair William Gillespie: Mr. Speaker, under Standing Order 41(2) I should like to table two copies in the two official languages of "Statement of Policy, Proposed Petroleum and Natural Gas Act and New Canada Oil and Gas Land Regulations".


James McPhail Gillies: Mr. Speaker, we on this side of the House welcome the minister's statement today. I might add that after six years absence of any oil and gas land regulations this statement probably deserves some sort of a welcome. The welcome we give today, however, is a mixed one.
It would be unfair to say that during the past six years, when we have had no regulations, nothing has happened. We on this side of the House have watched with not a little amusement as final draft after final draft has been churned out by the departments concerned, and then returned red pencilled by the oil companies. As each one of these final drafts went out, hope would rise anew that this would be the last.
The Minister of Indian Affairs and Northern Development (Mr. Buchanan) would rise to his feet and tell us, yes they will be out this spring, later to say, sorry they would be delayed to the fall, unfortunately they would not arrive until winter, they would definitely be ready in the spring, and so on-the rhythm of the passing seasons. Well, now the industry is presumably satisfied and the country can get down to business. While congratulating the minister on the fullness of his consultations with interested parties, I might add this-nowhere in this seasonal procession was room found for parliament's view. Apparently we are not to be consulted, only informed.
Yet this delay has not been without its cost to Canada. Investment capital abhors a policy vacuum. Hundreds of millions of dollars cannot be invested in an uncertain regulatory climate, no matter how full consultation is. Capital which might be invested in developing our frontier resources has gone to other areas, such as the U.S. continental shelf and the North sea. Indeed it is a sobering fact that Great Britain, where frontier oil development has been more costly than generally has been the case in Canada, will surpass Canadian oil production in two years. This has happened despite the fact that British reserves are at present approximately equal to Canadian oil resources on which the government places a 90 per cent chance of recovery.
In Canada frontier exploration has suffered while the jury was out on these regulations and, parenthetically speaking, while various budgets dispelled any impression of government competence in resource management. Last year, $332 million was spent on the development of frontier

Energy
resources, a figure which is less in real terms than the 1972 expenditure. This country simply cannot afford energy management which marks time for three years while other countries, even Britain with its socialist government, surge ahead.
Having received these regulations we must now decide whether they emanate from a credible source. Let us look at the record of official ignorance in the question of predicting exactly how much frontier oil there is. In 1969 we were told by the government that if we were lucky we could expect to have four billion barrels of oil surplus to our needs in 1985. If everything went wrong we could expect perhaps only 2.5 billion. In 1973 we were told to expect 780 million cubic feet of gas and 100 billion barrels of oil. Today we are told we have no surplus at all. What they did not tell us then they tell us now, that there was a zero probability of those resources existing, which is about the probability that this government's estimates will ever be taken seriously again.


Some hon. Members:: Hear, hear!


James McPhail Gillies: These regulations come as one more piece of ad hocery in an energy strategy that is held together by guess and wishful thinking. As things stand today we do not even know whether northern development will take place. Judge Berger apparently regards his task as being concerned with this seminal question, and his conclusions are by no means forgone. By the time a decision has been finally reached on the MacKenzie corridor it will be late 1977, or, with the record of the oil and gas land regulations in mind, perhaps 1997 might be more accurate. Once that decision is made we must await the immense lead times required from initiation to production, which today span a decade or more. In the context of the past the idea that we will be burning frontier energy in our homes by 1982 is absurd. It is in the context of these general caveats that we must examine today's statement.
We support wholeheartedly the concept underlying the progressive incremental royalty program. It is natural that we would because an important part of the idea owes its origin to the hon. member for Qu'Appelle-Moose Mountain (Mr. Hamilton) who has been putting such ideas forth for almost a decade. The minister would do well to borrow more of my hon. friend's ideas for Canadian equity participation in frontier development.


Some hon. Members:: Hear, hear!


James McPhail Gillies: As for the rate of the profits tax and the length of the moratorium, full comment will be made after we have had more time to examine them in detail.
The preferential treatment of Petro-Canada under the regulations raises once again the serious question of the government's competence in resource management. This is not the time to build up Petro-Can at the expense of the private enterprise companies in the north. The Canadian people do not need Petro-Can. What they do need is fuel to move their wheels and heat their homes. It is difficult to see how ceding Petro-Can immense tracts of northern and off-shore acreage which it could not possibly handle will help Canadians with their energy problems. It is a looking glass policy-the government biases the system in favour of a company that manifestly cannot do the job and preju-

dices the system against those companies which manifestly can.
As regards the "challenge to drill system" we do not oppose this in principle. What we do oppose is an unwarranted increase in the arbitrary powers of ministerial discretion that this document entails. The minister should realize that in many cases the major asset that smaller independent oil companies possess is acreage. Legislation which compromises this asset will inevitably reduce the ability of a company to raise capital and thus slow down the pace of development. It is unacceptable that no appeal from this arbitrary power to be assumed by ministers will be permitted. When these regulations come before the House, we shall certainly seek to incorporate some sort of appeals procedure.
The regulations also appear to reinforce the dangerous precedent set by the Petroleum Administration Act of giving ministers the power to abrogate contracts. This strikes directly at principles which are at the heart of the enterprise system. Yet the regulations appear to provide for no compensation or recompense for those who have had their property rights diluted in this fashion and who could suffer losses as a result.
There will be widespread concern about the ministerial discretion involved in the determination of a qualified person with respect to exploration agreement.
Although we find ourselves to be in essential agreement with the requirement that oil companies operating in federal territory be Canadian corporations with participation by Canadian citizens, we feel the planned administration of the principle leaves something to be desired. Surely it makes more sense to apply the requirement to exploration licences, that is, at the beginning of the process, than half way through at the exploration agreement stage. We will also seek assurances that present permit holders will not be classified as unqualified with respect to existing agreements.
As regards the increase of information, we are, for the reasons I have elaborated earlier, fully behind any initiative that will help government get some information to dispel the woeful state of inaccuracy on which it has operated in the past.
In short, it seems to me-and we should not neglect or forget this fact-that the proposed regulations which literally empower the minister to set posted prices, to take royalties in kind other than cash, to order drilling on permits and leases, to order production to begin, to order production to certain markets, to require approval of farm-outs, are, in a sense, an absolute revolution in the operation of the energy industry in this country, a managerial revolution. We have seen a movement of the managerial responsibilities of the energy companies in this country from the boardroom, from the company, to the bureaucracy. This is precisely what these regulations have done. Will tbis produce more oil for the Canadian people more efficiently? I doubt it. Is it an attempt by the government to move indirectly into the oil and gas industries? Is it another government power grab? Is this really a regulation, or is it the start of the confiscation of this important industry?


Some hon. Members:: Hear, hear!
May 19, 1976


James McPhail Gillies: These regulations must have, for the sake of all Canadians who depend on the north for their future energy, the most careful scrutiny, and I can assure the minister that when they come to the House they will receive such an examination. They amount to a managerial revolution in the operation of the energy industry in Canada, a revolution which, in our view, may not be in the best interests of all Canadians.


Mr. T. C. Douglas (Nanaimo-Cowichan-The Islands):: Mr. Speaker, the people of Canada have been waiting a long time for these new petroleum and gas regulations covering the Arctic and offshore areas.
I cannot join with the hon. member for Don Valley (Mr. Gillies) in saying that I welcome the statement made by the minister, but since he is a very persuasive and urbane individual I tried very hard to find something in the statement for which I could commend him.
I did not realize it was quite so good until I heard the hon. member for Don Valley objecting to the fact that there was to be any attempt to make oil companies get ready and drill and to use the permits on which they have been sitting and doing nothing for a long time. I want to commend the minister on the fact that he is going to insist that companies which have taken permits, drill, and that he is going to reduce the length of the permit from 21 years to six years and the length of the lease to a provisional period of five years and a production lease of ten years.
The fact is, Mr. Speaker, of the 920 million acres of sedimentary land in the Arctic, 80 per cent is under permit. The companies have been simply sitting there waiting to see what they could do with this asset. They have been sitting on their assets in many cases doing nothing.


Some hon. Members:: Hear, hear!


Thomas Clement (Tommy) Douglas: I commend the minister for saying he is prepared to take the necessary steps to get legislative authority to insist that if they are going to hold these permits they must drill and either produce oil, or get off and let somebody else produce oil. I also agree with the principle of a revenue tax through which the Canadian people will share in the revenue produced from any oil or gas discovered in the offshore areas or in the Arctic.
Having said that, Mr. Speaker, I should like to draw the attention of the House to the fact that if one reads the minister's statement and the documents which accompany it very carefully, it is perfectly apparent that we are now going to turn over millions of acres of potential oil and gas lands to foreign companies on leases. This amounts to nothing less than a gigantic sellout.
In the first half of this century this country made a lot of mistakes as to how it leased out its oil and gas lands. We could perhaps have been excused because of our lack of experience, but surely in the last quarter of this century there is no such excuse. I am afraid this government is something like what Tallyrand said about the Bourbons- they have forgotten nothing and learned nothing. We should have learned something from what happened in the
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southern part of Canada. The minister's statement indicates we have learned nothing at all.
I want to deal with two points, Mr. Speaker. The first point is that the minister says that under the new regulations a permittee will be allowed to hold a production licence covering the entire production area within his permit. Most members of the House know that both the oil and gas lands coming under federal jurisdiction and provincial jurisdiction have always had a provision in the past that 50 per cent of the area which is leased belongs to the Crown. This has been done by having a checkerboard system-I believe Alberta was the first to introduce it-by which the black squares go to the permittee and the white squares belong to the Crown. Those Crown reserves could either be put up for cash bid or could be put up for a percentage of the oil production, to be taken in oil or kind, or they could be used by the Crown itself to extract oil and gas.
In drafting these regulations the government had an excellent opportunity to make sure that in any area where oil and gas was found the Crown had a piece of the action. Those Crown reserves would have provided an opportunity for Petro-Canada, on behalf of the Canadian people, to go into those areas, to produce oil and gas and assure that the Canadian people would get supplies at reasonable prices rather than being at the mercy of a gigantic oil monopoly. The government has not done that.
Speaking in the House yesterday the Minister for Energy, Mines and Resources (Mr. Gillespie) predicted a great future for Petro-Canada. I share his desire that Petro-Canada should have a great future. In the statement he made today, however, I see very little future for Petro-Canada except to be a standby. The minister says that Petro-Canada is going to have certain things; it is going to get 25 per cent of any acreage that is returned to the Crown. Mr. Speaker, any acreage that is returned to the Crown will be leftovers that the oil and gas companies do not want.
The minister also said that where an oil company is not carrying on its drilling obligations the government can order Petro-Canada to go into that area and drill. But, Mr. Speaker, he pointed out that the company which has the lease can either agree to pay 50 per cent of the drilling cost and have 50 per cent of whatever Petro-Canada discovers or, if it does not agree to pay 50 per cent in advance, then if Petro-Canada takes the risk in looking for oil or gas and does not get it, it is out that money. If it does find oil or gas, the company holding the lease can step in and, by paying 50 per cent of the drilling cost and a penalty, can still hold 50 per cent of the area on which it, up to that time, refused to drill.
Is that a great future for Petro-Canada? What we are doing is sitting it on the bench and saying that when nobody else wants a lease and nobody else wants a drilling area or somebody has refused to drill in an area, Petro-Canada will be called in. I do not call that an imaginative program for Petro-Canada. As a matter of fact, if the government were serious about Petro-Canada it would have insisted on holding on to the provision which is still true in southern Canada under provincial jurisdiction, and which has been true up until now under federal jurisdiction, of saying when a permittee wants to lease 50 per cent

May 19, 1976
Energy
of a checkerboard area which belongs to the Crown those areas which the government did not want to put up for a cash bid or royalty bid basis could be used by Petro-Canada.
This afternoon I heard the hon. member for Don Valley make some rather derogatory remarks about the role of Petro-Canada. I want to remind my Progressive Conservative friends that in almost every country of the world today governments of different political stripes have set up government oil companies in order to provide a countervailing power against the oil cartels, whether it is Great Britain, France, West Germany, Japan or Venezuela. Some, of course, have have gone further, as in the Middle East, and virtually nationalized the entire oil industry. The only place left where people still do not have a government agency available to provide some countervailing power in the oil industry is the United States and some of the antediluvians who sit in this House.
The second point I wish to make briefly is this. While the minister has abandoned the idea of holding on to 50 per cent of the leases granted, he says this will be made up by virtue of the fact that the government will share in the production from these oil and gas fields through the progressive incremental royalty, which the minister euphemistically called PIR.
It is worth noting, first, that the royalty to be charged will be only 10 per cent, as compared with 20 per cent in Alaska and 21 per cent in Alberta; that the companies will be able to get back, as the minister said, their payments of royalty, their income tax and their costs; and that the first 25 per cent of their net profits will be exempt. Only when their profits have reached 100 per cent of their investment will the incremental royalty exceed 30 per cent. Let me consider the instance of a company which has invested $100 million. That company will be able to earn, in the last seven years of its ten-year lease, $25 million a year, on which it will not pay incremental royalty; in seven years it will take in $175 million on a $100 million investment. There will be no tax bite, except the 10 per cent royalty which the company will be required to pay.
I began by saying to the minister that I approved the idea of taxing the production of oil and gas companies so that the Crown shares to some extent in the profits made by the oil and gas industry. But this so-called progressive incremental royalty is a farce. A company with $100 million to invest will be able to make a profit of up to $100 million before the royalty exceeds 30 per cent; and that 30 per cent will be imposed only on the amount above the first $25 million of net profit calculated after it has taken into consideration its royalties and income tax.
We shall discuss this matter further when the government brings down the legislation. I appeal to the minister and to the government, to rethink their position seriously on this matter. Future generations will hold us accountable if we turn over 900 million acres in northern Canada, to say nothing of offshore areas, to oil companies, without holding on, as we have the right to do, to 50 per cent of the leases, and without making sure that there is a place for the government-owned oil company to act on behalf of the people of Canada in finding oil and gas. We must make

sure the government-owned company provides sufficient competition in this field, so that the people of Canada are not ripped off by the oil and gas monopoly which has treated our people so badly in years gone by.


Mr. Stanfield:: Mr. Speaker, as the minister recognizes, many questions come to mind. Did I understand the minister to say that the governor in council if it so decides, may direct Petro-Canada to explore in certain areas and drill in others? Did I understand him to say that the governor in council envisages this as part of his program? If so, who is running Petro-Canada, the directors of the company or the governor in council?


Alastair William Gillespie: Mr. Speaker, two points need to be made clear. First, the agency, to which I referred as the new, unified resources management agency, will determine if a promising structure should be drilled. The agency would say to the permittee, or owner of that land, "We think it is promising, you should drill. We will give you a reasonable period of time." The time will be based on a number of factors, such as the availability of equipment, climate, and so on. If the private company decides not to accept that particular challenge from the agency, the federal government, through an order in council, will have power to direct Petro-Canada to drill that particular structure. As the hon. member may know, that particular power is written into the act constituting Petro-Canada. A specific section gives the government authority, through order in council, to direct in writing the activities of Petro-Canada.


Robert Lorne Stanfield: Mr. Speaker, God help us all. May I ask the minister what the current situation is with regard to the offshore rights claimed by the provinces? Has the Government of Canada reached an understanding with the eastern provinces and British Columbia about offshore rights and leases or, will companies operating in those waters find that they must deal with both the federal government and the provinces? Would the minister in a word or two tell us about the prospects of a solution of that problem?


Alastair William Gillespie: Mr. Speaker, I expressed the hope last night when answering a question asked by a colleague of the hon. member-and I am much more hopeful now than I was six months ago-that it would be possible to work out reasonably soon a new understanding with the maritime provinces, including Newfoundland, concerning the administration and division of revenues from offshore resources. There have been recent meetings and I am hopeful that we can proceed quickly to some solution.


James McPhail Gillies: Mr. Speaker, I notice, having perused a copy of the minister's statement, that it says practically nothing about native peoples. Does the government plan to allow the native peoples a proportion of royalty income? Is this to be included in the regulations?


Alastair William Gillespie: Mr. Speaker, I said in the early part of my remarks this afternoon, these regulations, of course, are conditional upon acceptable environmental and social conditions being met. These, of course, are matters on which the Minister of the Environment (Mr. Marchand) and the Minister of Indian Affairs and Northern Development (Mr. Buchanan) can answer. Undoubtedly, as the hon. member
May 19, 1976

knows, consideration will be given to a suggestion already made by some northern peoples, namely, that there should be some participation in the revenues.


James McPhail Gillies: Mr. Speaker, I seek further information. How does the government propose to proceed in view of the highly complicated costing procedure which this regulatory process will involve? Will it act on the basis of regulations which are to be passed by parliament, or on the basis of powers given to the department? I refer, for example, to the allocation of costs as between ring fencing and non-ring fencing activities. Who will determine how costs are to be allocated? Who will make the determination? I ask this because I am concerned about the fantastic involvement of regulations in management functions concerning the development of energy in this country. How does the government propose to deal with the myriads of problems which are implied and inherent in these types of regulations?


Alastair William Gillespie: Mr. Speaker, I thought I made it clear that specialized expertise in this area will be sought. This expertise will repose in the new agency. There will be a period of time, clearly, from the start-up of the new regime until revenues are generated from the ring fence. Clearly this will take some years, in which we can work out the details of that.


Peter Colwell Bawden: Mr. Speaker, the minister said in his summary that changes in the regulations regarding currently held lands will increase the required level of oil exploration work. As the minister seems so sure of his assertions, has he documents or background papers to prove that this will be the case? Can he also say if he has had consultations with industry, and if this activity will increase, or will it decrease?


Alastair William Gillespie: Mr. Speaker, I want to make it very clear that my remarks dealt with the proposed changes in the regulations. The document that I tabled is a statement of policy with respect to the proposed Petroleum and Natural Gas Act, new Canada oil and gas land regulations. Quite clearly, parliament will have an opportunity during the course of consideration of this legislation to make input to those regulations.


Peter Colwell Bawden: The minister obviously did not answer the question. What he said is that he has not done his homework. If he cares to answer my supplementary question, maybe he can prove he has done his homework. What is going to happen to present holdings of land by permit holders? The minister speaks about Canadian ownership, apparently the fact that the government intends to force 25 per cent Canadian ownership. I wonder how they planned that. What if, for example, Canadians are not willing to take up the other 25 per cent? Since the minister quoted statistics that indicate the percentages of foreign ownership are already too high, will he confirm that this will conclusively eliminate any foreign dollars being spent on these lands?


Alastair William Gillespie: Mr. Speaker, the hon. member has asked more than one question. The first question was what will happen to existing permits under the new regime? Quite
Energy
clearly we expect that some of the lands will be surrendered because the work obligations will be higher. We think that will be good. In other words, if a company is not prepared to spend a lot more money than it is presently spending on an attractive acreage, it should surrender and give somebody else a chance. That is the general answer to the first question.
As to the second question, about increasing Canadian ownership, quite frankly I am not as pessimistic as the hon. member about Canadians being ready to invest in their own country. The hon. member forgets that very few of them have had an opportunity to do so. If he were to look at the way those permits are now being held, he would find that the large majority-I already indicated the numbers-are held by companies in which there is a very small Canadian participation. We on this side think that should be changed. He may not.
There are three areas where this new power that we are seeking will come to play. The first is with respect to existing permits, which is retroactive. There is no question, there is a substantial amount of retroactive legislation involved here with respect to existing permits. If an existing permit holder wants a special renewal, or a provisional lease, he is going to be faced with providing an option of a working interest for Petro-Canada. If he wants to go to a production licence, he will have to satisfy the minister that he can meet that 25 per cent ownership I am talking about.
The second has to do with lands which are not now under permit. I think this was referred to by the hon. member for Nanaimo-Cowichan-The Islands (Mr. Douglas). In this instance the minister will have the authority to determine whether that 25 per cent should be met in the exploration permit, quite apart from the production permit, because there we are moving to the future. It is not retroactive. Therefore in a number of very significant ways we want to open up the opportunities for Canadian participation in the north and Canadian ownership.


Mr. Speaker:: Order, please. In order to conclude the questioning, I propose to recognize the hon. member for Calgary South (Mr. Bawden) for a final supplementary, the hon. member for Nanaimo-Cowichan-The Islands (Mr. Douglas), the hon. member for Moose Jaw (Mr. Neil), and the hon. member for Esquimalt-Saanich (Mr. Munro). That will undoubtedly take us past the ordinary hour or adjournment, which was provided for in the order made by the House earlier this day. However, in order to be absolutely sure of the regularity of our proceedings, it ought to be deemed that the order under consideration at the hour of adjournment was Bill C-84 and that the floor was held by the hon. member for Burnaby-Seymour (Mr. Raines). Is that understood and agreed?


Some hon. Members:: Agreed.


Peter Colwell Bawden: Mr. Speaker, I would like to ask the minister a further question. The minister knows very well that the government has been in charge of the rules for most of the time since oil was first discovered in this country. There has never been a climate sufficient to encourage Canadians even to invest in the low risk areas of Alberta. Does the minister propose to recommend to the Minister of Finance, and to take an active role in seeing that the rules

May 19, 1976
Energy
are changed in this country so that Canadians truly have the opportunity to deal with this in a financial way? This has nothing to do with high risk areas where he is saying they will be forced into accepting 25 per cent in the Arctic areas.
Perhaps at the same time he can advise whether this new petroleum revenue tax will be a deductible expense for those companies that ultimately end up paying it. Will it be deductible for tax purposes, as was adjusted in the last budget, or will it not be deductible unless it is a very serious disincentive to expenditure?


Alastair William Gillespie: Mr. Speaker, I again ask the hon. member to look at the document. I realize he has not had much time to do so. He might be very interested in seeing Canadian ownership. If he looks at that he will also see how far back these permits go. It is pretty darn hard to make the argument that Canadians would have invested when there is no way they had a chance because somebody already held their acreage. He seems to have a major blind spot there. As to his second question with respect to the PIR, I am informed that would not be a deductible expense for calculating corporate income tax.


Thomas Clement (Tommy) Douglas: Mr. Speaker, the new regulations propose to set up new work requirements which those holding permits must perform. If these regulations were to come into effect tomorrow, what percentage of the companies operating in the Arctic would qualify as having met those requirements, and what percentage would not?


Alastair William Gillespie: Mr. Speaker, I cannot give the hon. member the percentage of the companies because there is a large number, some with very small holdings. If the hon. member looks at the acreage on the permit he will find that only 35 per cent of the acreage under permit would now qualify under that 25 per cent rule.
Perhaps I might make another point while on my feet. It deals with the question of corridor acreage about which the hon. member for Nanaimo-Cowichan-The Islands made a great deal. I thought he would have known, because I tried to emphasize it in my remarks, that the Crown does not have a completely unencumbered right to the 50 per cent under the old checkerboard system. Indeed the company had the option to possess that additional 50 per cent by paying a higher royalty. That is an important point. Quite clearly, if it was very attractive, the company would do that.
There is a second point worth noting. Generally speaking that corridor acreage was worth between 15 and 20 per cent in terms of the producibility of the area. It is again not accurate to convey that was 50 per cent of the asset.
Third, if you consider the application of the corridor and checkerboard system to the Arctic and Arctic Islands, you have to acknowledge that the situation there is very different from the kind of situation we have with land in a province like Alberta. There is a whole series of points that needs to be made with respect to corridor acreage. The main one I want to make is that the government is giving up 50 per cent of a producing asset under the new system.


Thomas Clement (Tommy) Douglas: Mr. Speaker, I do not want to argue again with the minister. I am only allowed to ask a question. Since he is changing many of the existing agreements I thought he would have changed this one as well to give the government 50 per cent, as does the province of Alberta and the province of Saskatchewan, should they allow a permit to go to lease. In view of the statement he made that Petro-Canada will be given the first shot at any areas which are not under permit, may I ask what acreage that would involve in the Arctic at the present time-what proportion of the total acreage?


Alastair William Gillespie: There are hundreds of millions of acres still available and not under permit. I do not want to make a judgment as to the quality of that acreage. But there are vast tracts.


Thomas Clement (Tommy) Douglas: My
information is that of some 960 million acres about 827 million acres are already under permit, or controlled in some way, that is, about 80 per cent. But I will leave that point and discuss it with the minister at some other time.
The minister said Petro-Canada will also have the option to acquire a working interest of up to 25 per cent in permits which are granted special renewal by the minister. Why should there be a limitation of 25 per cent? I keep noticing that Petro-Canada always gets in at the tail end- they are only allowed in when nobody else is interested, or when the government has ordered them in. Now, in the case of special renewal, they are to get an equity of only 25 per cent, which gives them no control, and unless they are in the marketing business the oil is not of much use to them.


Alastair William Gillespie: That is the kind of figure I would have to put down as a judgment call, one which balances a number of factors involved. The point which needs to be made is that Petro-Canada would have an option to get in at no cost to itself for any previous work which had been done. It would, of course, be obliged to pay its way in all future developments.


Mr. Neil:: Mr. Speaker, my question also has to do with the 25 per cent level of minimum Canadian ownership. In the news release the minister handed out reference is made to this requirement before production is allowed. In response to the hon. member for Calgary South (Mr. Bawden) the hon. gentleman indicated that this also referred to permits. Can the minister advise us what period of time will be allowed a company to qualify under this requirement of 25 per cent Canadian ownership? Will this be set by regulation, will it be part of the act, or will it be up to the discretion of the minister? I should further like to ask whether or not there have been discussions with the industry as far as this provision is concerned, and whether any problems are envisaged by the industry itself.


Alastair William Gillespie: This is a discretionary item as far as the minister is concerned; there is discretion for working out what might be considered a reasonable period, particularly during the transition stage. As to the reaction of the industry to this proposal I can say that in general terms this

principle has been explored with a number of companies. I anticipate that some would think it is a good provision-I say this based on the comments I have heard from them. Others would not be so favourably inclined.


Douglas Charles Neil: With respect to the option that allows the government to take royalties in kind rather than in cash, would the minister advise whether it is the government's intention to use Petro-Can as the vehicle to refine, produce, and market this oil, or has he some other method in mind?


Alastair William Gillespie: Mr. Speaker, that is jumping a long way ahead. Quite clearly Petro-Canada has the power to get into the refining and marketing of petroleum products. We have always made it quite clear that the first priority for Petro-Canada was the exploration of Canadian resources and the development of them. The provision we have been discussing here with respect to the federal government's having the power to take royalties in kind would provide an opportunity for Petro-Canada, acting as the agent of the federal government, to take title to that natural gas or oil and consider marketing arrangements for them. But I put it to the hon. member that that is a power the implementation or use of which would be many years away.
Energy


Donald W. Munro: Mr. Speaker, my question is prompted by the question on off shore jurisdiction asked by the hon. member for Halifax (Mr. Stanfield). Seaward offshore jurisdiction is one thing. In the particular case of British Columbia may I ask the minister whether there has been any resolution of the jurisdictional dispute between the federal authorities and the province of British Columbia over the waters between Vancouver Island and the mainland, and between the Queen Charlottes and the mainland? In other words, who will be empowered to issue exploration licences in these waters, and who will collect the royalties on any finds? In any event, because of the many changes, has there been any consultation on this matter with the province of British Columbia?


Alastair William Gillespie: Mr. Speaker, I am informed that there has been consultation but to date no agreement has been reached with respect to these matters that the hon. member raises. Therefore I cannot answer the second part of his question.


Mr. Speaker:: Order, please. Orders of the day. It being after six o'clock this House stands adjourned until two p.m. tomorrow.
At 6.09 p.m. the House adjourned, without question put, pursuant to Standing Order.

Thursday, May 20, 1976