1978-06-20

ROUTINE PROCEEDINGS


Mr. Ray Hnatyshyn (Saskatoon-Biggar):: Mr. Speaker, in view of the disclosure of the establishment of a summary service for the Prime Minister at a stated annual cost of $43,000, and in view of the necessity of doing something to bring hard news of what is happening in our country to the Prime Minister's attention, I would move under the terms of Standing Order 43, seconded by the hon. member for Annapolis Valley (Mr. Nowlan):
That this House recommend to the Prime Minister that he save the taxpayers this $43,000 by occasionally attending debates in the House or, at least, reading Hansard.


Mr. Speaker:: Is there unanimous consent for the presentation of such a motion?


Some hon. Members:: No.


DRAFTING OF JUNIOR HOCKEY PLAYERS-MOTION UNDER S O. 43
Mr. Otto Jelinek (High Park-Humber Valley):: Mr. Speaker, I rise on a matter of importance under the terms of Standing Order 43. In view of the fact that the government underwrites, through CAHA, the development of junior hockey in Canada, and because foreign professional hockey teams have taken to raiding the junior ranks without in any way compensating for development fees which directly affect Canadian taxpayers, as witness last week, for example, in the signing of 17-year old Wayne Gretzky by the Indianapolis Racers of the WHA, I ask leave to move, seconded by the hon. member for Edmonton Centre (Mr. Paproski):
That the Minister of State for Fitness and Amateur Sport introduce forthwith a program which would make it compulsory for all professional hockey teams and leagues drafting Canadian players to reimburse junior hockey in Canada to an amount equivalent to their over-all development and administrative costs.


Mr. Speaker:: Under the terms of Standing Order 43, such a motion requires the unanimous consent of the House. Is there such consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


LABOUR RELATIONS
Mr. Edward Broadbent (Oshawa-Whitby):: Mr. Speaker, pursuant to Standing Order 43, 1 seek the unanimous consent of the House to move a motion on a matter of urgent and pressing necessity.
In view of the fact that the 30 employees of Quebec city radio station CJRP have been fighting since September 1974 to obtain a collective agreement and were certified as a union in July 1975; and in view of the fact that this union has no guarantee that it will be covered by the provisions of the Canada Labour Code, as amended by Bill C-8, providing for the settlement of first collective agreements and this, not because of the principle of the act, but because of its retroactive effect to December 31, 1975, I move, seconded by the hon. member for Winnipeg North Centre (Mr. Knowles);
That the House request the government to amend the first subsection of section 171.1 of the Canada Labour Code and replace "December 31, 1975" by "July 31, 1975".


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


Some hon. Members:: Agreed.


Some hon. Members:: No.

June 20, 1978


PROPOSED AMENDMENT TO STANDING ORDERS CONCERNING
Mr. Eudore Allard (Rimouski):: Mr. Speaker, under the provisions of Standing Order 43, I ask for the unanimous consent of the House to move a motion dealing with an urgent matter.
Considering that under Standing Order 2(3), June 24 and July 1 are legal holidays on which there is no sitting of the House; considering that this year, June 24 and July 1 fall on a Saturday when usually parliament does not sit, and to prevent the staff of the House of Commons as well as members of parliament from losing the holidays on June 24 and July 1, I move, seconded by the hon. member for Bellechasse (Mr. Lambert):
That the House authorize an amendment to Standing Order 2(3) by adding the following: When the holidays of June 24 and July 1 fall on a Saturday or a Sunday, the House will not sit on the Friday preceding June 24 and July 1.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


DECLARATION OF SOUTHEASTERN MANITOBA AS DISASTER AREA-MOTION UNDER S.O. 43
Mr. Jake Epp (Provencher):: Mr. Speaker, I rise on a matter of urgent and pressing necessity under the provisions of Standing Order No. 43. In view of the unfortunate loss of life and devastation of property caused by two tornadoes which struck southeastern Manitoba on June 19, 1978, namely, in the areas of Morris, Aubigny, St. Pierre, St. Elizabeth, Greenland and Ste. Anne, I ask leave to move, seconded by the hon. member for Lisgar (Mr. Murta):
That the Government of Canada co-operate with the province of Manitoba in assessing the damage with the view of declaring the affected area a disaster area.


Mr. Speaker:: The presentation of such a motion for debate, pursuant to the Standing Order, requires the unanimous consent of the House. Is there unanimous consent?


Some hon. Members:: Agreed.


Mr. Speaker:: The House has heard the terms of the motion. Is it the pleasure of the House to adopt the said motion?


[Stage Direction]
Motion agreed to.

Mr. Andy Hogan (Cape Breton-East Richmond):: Mr. Speaker, I rise on a matter of urgent and pressing necessity. 1 know that a similar motion was presented on this matter previously: I reintroduce it now in the hope of getting unanimous consent without debate.
A pornographic film made in Sweden depicting Jesus Christ, who many of us believe is the Son of God in human flesh-as we acknowledge in the prayers opening parliament- and who even humanists and agnostics acknowledge as one of the greatest, if not the greatest, man who ever lived, is allegedly to be allowed to come into Canada with the permission of the customs and excise branch of the Department of National Revenue. In view of the sacrilegious and extremely offensive nature of this film, which has already been banned in England, France and Israel, I move, seconded by the hon. member for Brant (Mr. Blackburn):
That the minister in charge of customs and excise prevent the movie "The Many Faces of Christ" coming into Canada.


Mr. Speaker:: Such a motion can be presented for debate at this time only with the unanimous consent of the House. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


NATIONAL UNITY
Mr. John C. Crosbie (St. John's West):: Mr. Speaker, I rise under the provisions of Standing Order 43 on a matter of urgent and pressing necessity. In view of the fact that members and staff of the task force on national unity are resigning from time to time to become Liberal candidates in federal and provincial elections, apparently having obtained whatever publicity value they could squeeze out of the task force itself, I move, seconded by the hon. member for Hamilton West (Mr. Alexander):
That the task force be requested to complete its report immediately so that members and staff are still available to complete the report, and that a grateful government arrange to provide automatic Liberal nominations in federal and provincial districts for the redundant members and staff or award the Order of Canada to former members and staff as they depart from their duties inspired by the realization that government constitutional proposals have not had to await their recommendations.


Mr. Speaker:: The presentation of such a motion requires unanimous consent. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.

June 20, 1978


FISHERIES
Mr. Stuart Leggatt (New Westminster):: Mr. Speaker, 1 rise under the provisions of Standing Order 43. In view of the fact that the International Whaling Conference commences in London on June 26 of this year, in view of Canada's failure in the past to support a moratorium in spite of worldwide scientific support for such a moratorium, in view of the decimation of the North Pacific sperm whale by Russian and Japanese fisheries, and in view of Canada's role in allowing a massive increase in North Pacific sperm whale quotas, I move, seconded by the hon. member for Brant (Mr. Blackburn):
That the Canadian delegation to the London conference be instructed to end its support for whaling and to support a ten-year moratorium so that this magnificent creature can have some chance of survival.


Mr. Speaker:: Presentation of such a motion requires unanimous consent. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.



ORAL QUESTION PERIOD


Mr. Jack Murta (Lisgar):: Mr. Speaker, since the Minister of Labour is not in the House today, I would like to direct my questions to the Minister of Transport. My questions deal with the potential Air Canada strike, which is a very serious issue and will affect business, travel and tourism to quite an extent if it is allowed to go ahead. Will the Minister of Labour or the Minister of Transport personally intervene in the dispute to try to get both sides to the bargaining table once again?


Hon. Otto E. Lang (Minister of Transport):: Mr. Speaker, the Minister of Labour is offering various services to the parties in this dispute. He and I share the view, which I am sure is shared by all hon. members, that it would be very unfortunate for a disruption of travel plans to occur and to do damage to many Canadians, particularly in a year when so many more seem to be planning to travel in Canada. I presume that all hon. members share the view that the parties ought to be urged to bring this dispute to an early conclusion.


Jack Burnett Murta: Mr. Speaker, the minister started off on the wrong foot: he did not answer my question. Does the government intend to intervene in this dispute, presumably through the Minister of Labour or the Minister of Transport?
Oral Questions


Otto Emil Lang: I did answer that question, Mr. Speaker. The Minister of Labour is directly involved. I do not choose to use the hon. member's word "intervene", but I do not think I should.


Jack Burnett Murta: As the minister knows, the dispute arose over the status of the letter of intent signed by Air Canada at the time of the last contract negotiations. Has the minister had any consultations with the president of Air Canada on whether he intends to honour the provisions of the document and, if so, would he indicate to the House what discussions he has had in the last 24 hours with the president of Air Canada and what Air Canada intends to do in this regard?


Otto Emil Lang: I have had discussions with the president, but I do not think it would be useful for me to attempt to take part in the negotiations. I think it is best if Air Canada's position and the pilots' position are put to the public by those parties to the extent necessary. I will content myself with the hope, with regard to both sides of the dispute, that a solution is found so that inconvenience is not caused to Canadians.


MINISTER'S MEETING WITH PARTIES IN DISPUTE
Mr. Don Mazankowski (Vegreville):: Am I to take it from the response of the Minister of Transport that he does not intend to intervene? Does he not intend to meet with the officials of Air Canada, because the threat of a strike would be disastrous to the country? Last time Air Canada struck, they lost $22 million. Also, will the minister undertake to meet the president of Air Canada to discuss possible contingency plans in the event a strike is called? Will he also undertake to assure the many people who have arranged charter flights that other arrangements might be made or, at the minimum, that they will be refunded their fares?


Otto Emil Lang: Mr. Speaker, I do not have any magic solutions in the event that a strike occurs. There is no doubt that such an event would cause a good deal of harm and inconvenience to many people. However, I do not think it would be helpful for me to attempt to get into the dispute in a public way. The Minister of Labour, through very senior officials, will be directly involved today in the matter and I think that is where the government's role should rest for the moment. In the meantime, there is a burden on both parties to attempt to find a solution in the next day or two, if possible, so that plans need not be in jeopardy even ahead of the time when they would be interfered with.


Donald Frank Mazankowski: I am advised that the president of Air Canada has formally requested that the Minister of Labour intervene in the dispute. I ask the Minister of Transport, as the spokesman for Canada's national airline, whether he will, in effect, offer his services in the negotiations and in the discussions that may take place so that this matter may be resolved. Using the clout of these two ministers, perhaps we will be able

June 20, 1978
Oral Questions
to avert the very serious misfortune of a strike which could occur as soon as next Sunday.


Otto Emil Lang: 1 think I gave the hon. member that assurance in my opening answer. Obviously, the Minister of Labour and I want to do anything we can to help. At the moment, I think that includes not trying to get into the dispute in this forum.


POST OFFICE
John Edward Broadbent: Mr. Speaker, I have a question for the Postmaster General: it concerns the report in the news last night about our troubled postal system. According to that report, the Post Office has installed $1 billion worth of new mail handling equipment, much of which is virtually inoperative. As a result, letters mailed in Toronto and destined for locations in Toronto are now routed all the way to Cornwall for sorting. I should like to ask the Postmaster General whether he will confirm the report of this deplorable situation from the point of view of both efficiency and cost.


Hon. J.-Gilles Lamontagne (Postmaster General):: Mr. Speaker, 1 listened very carefully last night to the CBC broadcast about the Post Office and to the information which was given in that broadcast, and 1 wondered where some of it came from. One item on which I can answer the hon. member is that the report of a $1 billion investment in mechanization is absolutely false. The $1 billion investment also went into the modernization of equipment, of our plants and our buildings. The project, in all, cost $1 billion; it did not all go into automation. Also it is very easy to take pictures of an idle mechanization plant. Sometimes it happens that the mechanization does not work temporarily or accidentally.


Some hon. Members:: Oh, oh!


Mr. Lamontagne:: If hon. members want to listen, I would like to explain. I listened to the CBC broadcast and 1 am very apprehensive about what is coming in the next few nights on the same telecast. It was part of an interview given by the United States postmaster general, myself and some of the officials of the Post Office Department. The person interviewed yesterday was the regional vice-president of CUPW. I wonder if the hon. member would like to have all the details. We are taking note of all the newscasts and will make a full report at the end of the week.


John Edward Broadbent: Mr. Speaker, the minister took an awfully long time but did not answer the question. I ask him to take another shot at answering a question about the same region. According to the same report, the reason for major delays at the Toronto terminal centres is failure of the principal computer in the Toronto postal system. Will he confirm that the cost

of this computer has escalated from an originally estimated figure of $1.5 million to $8 million? Will he confirm that the cost has gone up in that range? Also, will he tell us when Canadians can expect that computer facility to be operating and providing efficient mail service to the people of this country?


Maurice Lamontagne: Mr. Speaker, the hon. member of the opposition should understand in the end that a few years ago we planned a program of modernization for the Post Office. The technology we adopted then is about the best in the world. However I would like to point out to the hon. member that we are now going through an experience which is somewhat similar to that, for instance, of the Canadian National when they put the first turbo locomotive on the tracks. It did not work out the first time. It is true that the computer must be readjusted by technicians. Also, 1 would like to revert to the first question concerning the inverview on CBC yesterday. They should broadcast the whole interview given by the postmaster general of the United States, who was interviewed at the same time I was, and not take only five or ten seconds from a four or five-minute interview, which is taken out of context and which does not present facts as they are and does not reflect the opinion of the people interviewed. As regards costs, Mr. Speaker, I would like to say to the hon. member of the opposition that it is true that costs have gone up, but even there I think it is normal. When we use new technology, we must be ready for some experimentation and those costs are practically unpredictable.


John Edward Broadbent: Mr. Speaker, while the minister is gathering experience, the mail of Canada is being gathered in postal offices and is not being delivered to the people who want it. Since he has taken some time to express his concern about short clips providing information, which he thinks distort the picture, 1 should like to point out that television crews were denied access to the postal facilities and, presumably, to interview people on the spot. Thus, he cannot have it both ways. They were not providing information which was requested.
In all seriousness, and in the hope of improving mail service, will the minister agree to an all-party committee of this House making a quick, serious visit to the postal facility, investigating this particular problem and reporting back within a week to the House?
[ Translation]


Maurice Lamontagne: Mr. Speaker, I doubt that we have ever denied anyone a chance to visit our postal services. I believe hon. members of the opposition even sent a delegation to visit them. Last week the United States postmaster general visited them, and any citizen can do as much. I must add that we plan to open those postal services to the public in Toronto on Canada Day, July 1.
June 20, 1978



It will be open house then and every citizen will be able to visit our postal installations. They will then see there is nothing to hide.

[ Translation]


FINANCE
Mr. Adrien Lambert (Bellechasse):: Mr. Speaker, because of the absence of the Minister of Finance, I should like to put my question to the Deputy Prime Minister.
In view of the dispute between the federal Minister of Finance and his Quebec counterpart regarding a tax cut from which all Canadian taxpayers would benefit during fiscal year 1977-78, can the Deputy Prime Minister tell the House whether the amount of $225 million corresponds exactly to reimbursement of $85 to each taxpayer who nows pays taxes and paid some in 1977?


Hon. Allan J. MacEachen (Deputy Prime Minister and President of Privy Council):: Mr. Speaker, the subject matter of the hon. member's question is presently before the House. We came out of committee of the whole only last night and I am sure the hon. member is well aware of all the details of the bill. There is no change from the details which have been presented.


Joseph Adrien Henri Lambert: Mr. Speaker, on a supplementary.
I can understand the reply of the Deputy Prime Minister to the effect that the bill was passed last night by committee of the whole by virtue of an arbitrary rule, closure. Can the Deputy Prime Minister tell us whether the global amount, as well as the nature of the taxes which are the cause of the two-month dispute, corresponds exactly to the real reimbursement Bill C-56 proposes to make to the Quebec taxpayers?


Allan Joseph MacEachen: Yes, Mr. Speaker, the bill does contain all the information that would be of interest to the hon. member.


Joseph Adrien Henri Lambert: Mr. Speaker, on June 8, 1978, from my seat here, 1 promised the Minister of Finance that I would bring him suitable technical means to enable him to reduce or abolish the tax at the manufacturing level to give Canadian taxpayers a tax reduction which would increase their purchasing power in order to stimulate the consumption of Canadian products.
Oral Questions
Mr. Speaker, I want to ask you for leave to hold my promise, and to give immediately to the Acting Prime Minister, according to the commitment I made at that time-


Mr. Speaker:: Order.


ATOMIC ENERGY CONTROL BOARD
Mr. Allan Lawrence (Northumberland-Durham):: Mr. Speaker, my question is for whichever minister of the Crown is responsible this afternoon for reporting to the House in relation to the affairs of the Atomic Energy Control Board. It relates to certain press reports this morning which are serious enough they are causing enough disquiet and concern throughout the country that 1 am sure at least one minister, if not more than one, has been briefed about the problem. These reports have never been made public. They indicate that our nuclear power plants are seriously deficient in some of their safety functions. My question, to whichever minister is responsible this afternoon, relates to public access and lack of knowledge of those reports and the complaint about conditions. For instance, in December a report was made-


Mr. Speaker:: Order. If the hon. member has a question, would he put it forthwith.


Allan Frederick Lawrence: My question is this. In view of one of those reports, a copy of which I have, recommending that the original licensing standard for nuclear plants be seriously reviewed or substantially altered, why have these scientific and technical concerns and the reports themselves never been made public?


Hon. James Hugh Faulkner (Minister of Indian Affairs and Northern Development):: Mr. Speaker, I will raise the question with the Minister of Energy, Mines and Resources and he will report to the House.


Allan Frederick Lawrence: Mr. Speaker, among those recommendations, one full report was considered by the Atomic Energy Control Board on March 28 and 29 of this year. My question to the minister, and 1 would have thought the situation was important enough for him to have been briefed on it, is this. What has been the result of this consideration by the Atomic Energy Control Board and, again, why has there been no public disclosure of the recommendations and scientific concerns?


James Hugh Faulkner: Mr. Speaker, I think that on both questions the Minister of Energy, Mines and Resources will want to report to the House.

June 20, 1978
Oral Questions


THE CANADIAN CONSTITUTION
Right Hon. J. G. Diefenbaker (Prince Albert):: Mr. Speaker, my question is for the Minister of Justice. However, he is not here and I direct it to the Deputy Prime Minister. Approximately three years ago, the Prime Minister made the statement in a speech in Quebec city that this government intended to achieve the end of the monarchy by placing the Governor General of Canada in the position of being able to do all those things that Her Majesty the Queen could do.
I ask the Deputy Prime Minister, why did the government, having this idea in mind all that time, wait three years before doing the proper, appropriate and constitutional thing of advising Her Majesty as to the changes to be made? I also ask why the government has decided to place before parliament such a bill, when section 91 of the BN A Act reads:
It shall be lawful for the Queen, by and with the advice and consent of the Senate and House of Commons, to make laws for the peace, order, and good government of Canada-
The proposed bill would delete the name and expression "The Queen" and substitute the Governor General of Canada in her place, thereby placing an end, in effect, to the monarchy in this country.


Allan Joseph MacEachen: Mr. Speaker, the right hon. gentleman maybe aware that it is the intention of the government to give first reading to a constitutional bill this afternoon. 1 understand that copies have been made available on a confidential basis. It is not my intention to debate or comment upon the contents of that bill until it comes before the House in the normal way, except to say that the allegations made by the right hon. gentleman will be proved to be totally wrong when the words of the bill are made known to the public of Canada.


Some hon. Members:: Hear, hear!


John George Diefenbaker: Mr. Speaker, I am using the Prime Minister's own expression in a speech in which he said three years ago, "We will put an end to the Queen of England having any authority over Canada." That, I am informed, is being effected by the simple means of repealing a portion of section 91, removing the expression "The Queen" and substituting the Governor General of Canada.


Some hon. Members:: Order.


John George Diefenbaker: If the Deputy Prime Minister thinks 1 am wrong in that regard, all I can say is that he had better reread it and explain to the House later today why we have this complete travesty of our constitutional system in order to get the support of individuals such as those who now interrupt and are not even fit to be parliamentary secretaries.


Allan Joseph MacEachen: Mr. Speaker, as I said earlier, it is very difficult to anticipate in the question period a bill which has not yet been presented to the House of Commons. But I

believe that on policy grounds alone it ought to be stated to the right hon. gentleman, members of the House of Commons and the public of Canada, that under any proposal made or supported by this government the Queen will continue to be the Queen of Canada and the sovereign of this country.


Mr. Alexander:: Mr. Speaker, my question is for the Postmaster General. He seems to have vacated the premises, trying to solve the dilemma of the Post Office. 1 would ask that you keep me on your list until he returns.


FOREIGN INVESTMENT
Hon. Herb Gray (Windsor West):: Mr. Speaker, 1 have a question for the Minister of Industry, Trade and Commerce in his capacity as minister responsible for the administration of the Foreign Investment Review Act. My question is with respect to the apparent desire of those controlling Husky Oil to accept the offer to purchase their interest made by Occidental Oil.
I ask the minister if he will make a commitment now, on behalf of himself and the government, that if Occidental does not file an application for the approval of the Canadian aspects of this takeover by the government under the Foreign Investment Review Act, he will not condone any end runs by Occidental around the act but, instead, will formally demand the filing of such an application, thereafter taking every other step provided for in the act to ensure that this important transaction is fully reviewed by FIRA and the cabinet in terms of whether it would provide the necessary degree of significant benefit to Canada.


Hon. Jack H. Horner (Minister of Industry, Trade and Commerce):: Mr. Speaker, as far as 1 am aware, there has been no expression in the papers, certainly not to me privately, of Occidental's desire to escape or to do an end run around FIRA. As I understand it, the application to purchase Husky shares by Occidental would definitely have to come before FIRA, and I would certainly think the board and the commissioner would view it as they have all other applications and look for significant advantage to Canada.


CANADIAN WHEAT BOARD
Mr. Gordon Ritchie (Dauphin):: Mr. Speaker, I have a question for the minister in charge of the Wheat Board. In view of the annual renewal of the Chinese wheat contract, can the minister tell the House and the western producers-I know he cannot give an exact price-whether the price will be high enough to give a final payment for the next crop year, because
June 20, 1978

there will be little or no final payment for this year, as the minister himself has said?


Otto Emil Lang: Mr. Speaker, I am delighted to have the opportunity to join with the hon. member in being pleased about the completion of another contract with China in our long-standing relationship of being prime suppliers to them. This three million tons is a very notable sale. 1 do not think 1 would want to even begin speculating about price. The hon. member knows that current card prices are well over the initial price paid to the producer and that, obviously, has a very positive impact upon income.


William Gordon Ritchie: Mr. Speaker, as the Wheat Board has announced the loss of $81.5 million, sterling, in the years 1961 to 1976 in dealing with China-many producers feel it is even greater-can the minister tell the House why this was announced through the board's publication, "Grain Matters," rather than through the annual report of the Canadian Wheat Board?


Otto Emil Lang: Mr. Speaker, 1 believe the Wheat Board, having put some information into the annual report, felt that farmers wanted a further explanation. Therefore, they published it in "Grain Matters." I would also inform the hon. member that the current contract with the Chinese is in Canadian dollars.


COMMUNICATIONS
Mr. Les Benjamin (Regina-Lake Centre):: Mr. Speaker, in the absence of the Prime Minister, may I ask the Deputy Prime Minister and President of Privy Council a question? In view of the publication of the Prime Minister's press office media summary and the official line of the press office, I ask if that document is just a time saver and is not the sinister tool for media manipulation that it might appear to be.
I ask the Deputy Prime Minister if the government will provide this media summary each morning to at least the leaders of the other parties, to the House leaders or, for that matter, to all members of parliament if there is no desire to manipulate the press.


Allan Joseph MacEachen: Mr. Speaker, the purpose of providing the media summary is to monitor both the electronic and print media with a view to saving time. I have been receiving the summary for some time and find it very useful. 1 gather that the leaders of the other parties have staff at their disposal who undoubtedly are providing them with a relevant update of current events in one form or another as they are reported in the media. I would see no reason to duplicate that service by providing a service from the PMO.
Oral Questions


Leslie Gordon Benjamin: A supplementary question, Mr. Speaker. In view of the fact that the media summary is not only a summary of news but reports the names of reporters and various members of the media and quotes people such as Hargreaves for being dry, Henderson for being more enthusiastic, and Michel Guenard for being straightforward and rather enthusiastic-this sort of assessment-could the Deputy Prime Minister tell the House if the summaries are being computerized? Is this an effort to separate the good guys from the bad guys in the press gallery? Can he tell the House the justification for this expenditure in addition to the PMO press office? Is this work being contracted out, or is it being done in the Prime Minister's office?


Allan Joseph MacEachen: Mr. Speaker, it would be foolish of the hon. member to try to convince me that this practice is not followed in the office of the leader of every responsible party. There is a system by which news items are brought to the attention of the leader of the party. Many years ago, when 1 worked for a leader of the opposition, it was quite common to prepare a daily print summary. This is merely an update of a practice that has prevailed for a long time. The hon. member might be able to sell to someone else the idea that this is a new concept, but he should not try to sell it to me.


REPORT ON GATT NEGOTIATIONS
John Carnell Crosbie: Mr. Speaker, my question is addressed to that consummate actor, the Deputy Prime Minister and President of Privy Council who is in charge of the GATT negotiations. Would he bring us up to date? There is a western economic summit beginning on July 16. Mr. Jake Warren is now in Washington, meeting with Mr. Strauss and representatives of the EEC and Japan. We understand that U.S. officials have said they are beginning to see a pattern of agreement emerge in the GATT negotiations.
In view of the importance of these negotiations to Canada, particularly to central Canada, could the minister tell us what pattern of agreement is starting to be seen? What is this pattern of agreement? Could he give the House some details? Would he even agree to speak on motions some time before the House adjourns on June 30 to bring us up to date on this most important matter?


Allan Joseph MacEachen: Mr. Speaker, last Wednesday, along with a number of my colleagues, I had a meeting with Mr. Warren prior to his departure for Washington to meet with the United States and the community in Japan on multilateral negotiations. Certain views were conveyed to our chief negotiator as to how he ought to respond to prospective developments at that meeting. It is not possible to say that a pattern of settlement had emerged by last Wednesday. It may well have emerged, or will emerge at the meeting in Washing-

June 20, 1978
Oral Questions
ton, and if it does 1 will be glad, either by question or some other method, to convey the information to members of the House.


John Carnell Crosbie: Mr. Speaker, a supplementary question. As the Deputy Prime Minister knows, this is also a very important subject with respect to Quebec, because Quebec industries are threatened by tariff cuts if we should just have the tariff cut. I should like to ask the President of Privy Council this question. The new tariff cuts sought were about 40 per cent for certain countries, the New York Times service reports, and exclude textiles, steel products, shoes and televisions from the general, over-all tariff cut.
Has Canada informed the other countries at GATT that we want to exclude textiles, shoes and televisions, or what items have we told the other countries that we want to except from the general decline in tariffs that is likely to come about?


Allan Joseph MacEachen: Mr. Speaker, we are in the preliminary stage of a negotiating session. Countries are providing offer lists and request lists. There is an exchange, obviously, on the part of each country to improve the response from other countries. For that reason, generally the request lists have remained confidential, except that there have been exchanges with provincial governments, members of private industry and trade unions, I understand, on a confidential basis. That is the general situation.
I have stated in the House already, with respect to shoes and textiles, that there is not likely to be any general desire on the part of GATT negotiators to undertake extensive cuts in either of these sectors which are facing difficulties in many of the countries at the GATT table.


POST OFFICE
[Stage Direction]
stated-and 1 repeat-there is no question of curtailing the existing service. On the contrary, I think we are improving it considerably. We give service to what we call fill-ins in certain areas. At the moment we are studying the possibility of enlarging again, if at all possible, taking into consideration the cost in man-years and within our financial capabilities.
Lincoln MacCauley Alexander: Mr. Speaker, I am sure the minister would not mind my saying that in future he should not make such stupid statements. It does not show concern for the people of Canada who want their mail. The Postmaster General is presently studying proposals which, as he says, will bring about an improvement in labour relations and achieve a faster and better mail service. At the same time, a press release of June 7 from the Post Office quotes the minister as saying:
Naturally, it would be premature at this stage to make public the measures being examined to bring about the desired changes, but I hope to be able to make some of them known at a later date.
Given the fact that CUPW says a strike is imminent, will the Postmaster General disclose these proposals to the Canadian people, or is he going to be secretive about them as he was about the 1975 Hays report? According to that report, there is a lot of mismanagement and mess in the Post Office. Are we going to be faced with the same secretive attitude?


Maurice Lamontagne: Mr. Speaker, I think 1 will not say anything about some of the adjectives used by the hon. member for Hamilton West. I am not used to them. However, I will get right to the point and tell him that at the moment we are negotiating with the Letter Carriers Union in a most progressive and understanding way. We hope to be able to get a settlement very soon. As far as CUPW is concerned, we are in conciliation at the moment. It would be very unwise for me at this time to take on the responsibility of the conciliation board. Let them take their responsibility, and we will take ours when the time comes.


Lincoln MacCauley Alexander: Mr. Speaker, my question is for the Postmaster General. At present the minister is studying proposals which, as I understand it, will bring about improved labour-management relations and achieve faster, more reliable mail service, the two most serious problems. In the Ottawa Citizen of June 3, 1978, the minister is quoted as saying:
"In the old days, milk and bread and groceries were delivered to your door-now there's no milk at the door. We are living in 1978.
"You can't distribute six billion pieces of mail the same way as one billion."
I am sure the minister appreciates the fact that the letter carriers are concerned about that matter, as are the people of Canada. Is this one of the proposals the minister is presently studying? In other words, what is he doing about door-to-door mail delivery?


J. Gilles Lamontagne: Mr. Speaker, I should like to tell the hon. member for Hamilton West that as far as letter carriers are concerned, 1 have


FINANCE
Mr. Peter Flzinga (Pembina):: Mr. Speaker, my question is for the government House leader. Can he advise whether any decision has been made by cabinet with regard to federal funding for the International Year of the Child?


Allan Joseph MacEachen: Mr. Speaker, 1 have absolutely no responsibility for that program.


DUMPING DUTY ON WIDE-FLANGE STEEL BEAMS
Mr. Benno Friesen (Surrey-White Rock):: Mr. Speaker, my question is to the Prime Minister. In his answer yesterday to the hon. member for Capilano regarding anti-dumping duties, the Prime Minister said:
June 20, 1978

Mr. Speaker, the producers in Canada expect to be able to produce for the entire Canadian market. If they are precluded from producing for a province-
Since Algoma produces only 13,000 tons, and Canadian consumption is 17,000 tons, obviously Algoma cannot produce for the entire Canadian market. Algoma has already put western fabricators on an allocation system, thereby permanently ensuring they cannot supply that market. Will the Prime Minister now recognize the reality of the regional market that exists in British Columbia and give assurance that the anti-dumping duty will not be reinstated at the end of this month?


Right Hon. P. E. Trudeau (Prime Minister):: Mr. Speaker, I believe the Minister of Finance dealt with that part of the question yesterday. 1 can repeat to the hon. member that when we suspended the anti-dumping duties some months ago, it was a temporary measure made with the agreement of British Columbia and other provinces which expressed satisfaction with it in order to permit all parties to readjust to the current situation. I believe the answer I gave yesterday had to do with a question posed in economic terms. I indicated that surely it is the objective of producers in Canada, including Algoma, to try to produce for the entire Canadian market. Because they were not doing that some months ago, we did allow for a period of readjustment. Whether this period should be prolonged or not is something to which the Minister of Finance says he is giving consideration.


Benno Friesen: Mr. Speaker, it seems strange that if the province of British Columbia was in favour of it, they submitted a lengthy brief to the tribunal opposing it. How long will fabricators in British Columbia have to wait, or are they even going to be in existence by the time Algoma optimizes its production so they can be supplied? In the meantime, will the federal government do something to provide a supply for these fabricators so they will not be run out of business?


Pierre Elliott Trudeau: Mr. Speaker, the hon. member is repeating the kind of question which was put to the government as the result of a situation which developed more than six months ago. We acted, at that time, in a special or temporary way in order to permit the various parties to adjust to the current reality. Yesterday, the Minister of Finance again said in this House that he would examine the situation to see if there had been adjustments and whether further measures were needed.


COMMUNICATIONS
Mr. J. P. Nowlan (Annapolis Valley):: Mr. Speaker, my question is directed to the Minister of Communications. In view of the many and different communications problems which are ending up in the courts, before the CRTC or before the Restrictive Trade Practices Commission-quite a few of them involving Bell Canada-has the minister considered, and does she think there is any merit in the suggestion of the
Oral Questions
president of Bell Canada, Mr. de Grandpre, that it is time for many of these problems to be brought together under one roof at a national communications conference? If she thinks it has any merit, what has she done about it?


Hon. Jeanne Sauv6 (Minister of Communications):: Mr. Speaker, there is always merit in getting all people concerned in the same room in order to discuss pertinent problems. I have looked at Mr. de Grandpre's suggestion. The provincial ministers of communications have also asked me to meet on the particular problems which are currently preoccupying the industry. There is some chance that the interested parties, the telephone company and the other carriers, might be included in that meeting.


John Patrick (Pat) Nowlan: Mr. Speaker, I was most interested in the minister's reply because there seems to be a problem of communication here in the chamber, mechanically anyway, judging by the noise we hear from outside. I wonder if it is sabotage by one of the communications people. Be that as it may, I was interested in the part of the minister's answer that I could hear.
Do I understand that she is giving serious consideration to a national communications conference so that the problems of interconnection, terminal connection, Telesat, earth station policy and many other diverse problems can be brought under one roof, so we can start to get a coherent policy in such a vital field rather than having decisions made on a piecemeal basis by regulatory bodies and/or the Supreme Court of Canada?


Jeanne Sauvé: Mr. Speaker, regardless of the problems we have had with communication in this chamber, I have always managed to have priority over any means of communication that we have. As to the question put by the hon. member, that agenda is quite an important one. It spans the complete range of activities of the whole of my department. If the hon. member is thinking specifically, because it is the first thing he mentioned, of interconnection, 1 remind him that this matter is presently before the CRTC for examination. It would, therefore, be quite improper for me to comment on it. However, the case which is presently being studied is very important. I shall look into it further to see whether there is any possibility of developing policies regarding this important question.


INDUSTRY
Mr. Perrin Beatty (Wellington-Grey-Dufferin-Waterloo):: Mr. Speaker, my question is for the Minister of Industry, Trade and Commerce. Why did the Metric Commission fly to Whitehorse, in the Yukon, last week for routine working meetings on the metric system in the meat packing industry of Canada? In particular, how can the minister justify the expenditure of some $20,000 for this two-day trip, particularly in view of the fact there is no meat packing industry in the Yukon?

June 20, 1978
Oral Questions
Hon. Jack H. Horner (Minister of Industry, Trade and
Commerce): Mr. Speaker, I will take the question as notice and try to find that out.


NATIONAL MUSEUMS
Mr. Stanley Knowles (Winnipeg North Centre):: Mr. Speaker, may I direct a question to the Prime Minister? In view of the fact that in announcing a few days ago the appointment of a new Secretary General for the National Museums of Canada, the Prime Minister went out of his way to praise Miss Jennifer McQueen for the work she had done as acting secretary-general, stating that during that period Miss McQueen had demonstrated all the qualities necessary for a promising career in the public service, why was Miss McQueen not appointed to the post for which she was a natural?


Pierre Elliott Trudeau: Because somebody else was more qualified, Mr. Speaker.


Stanley Howard Knowles: How does the Prime Minister expect the people of Canada to believe that this government is committed to equality between men and women when so soon after passing up Dr. Marguerite Ritchie for another post, another qualified woman has been pushed aside?


Pierre Elliott Trudeau: Mr. Speaker, the hon. member might remember that a very short while ago there was an acting head of the Economic Council of Canada who was replaced by a woman who was not on the Economic Council of Canada. It can happen on both sides, Mr. Speaker.


ELECTIONS
Mr. Walter Baker (Grenville-Carleton):: Mr. Speaker, my question is for the Prime Minister. Some time ago I asked what his intention was with regard to the seven by-elections which have not been called. He indicated that he would observe the law. I assume that is so. Can he tell us his intentions with regard to that matter, and when will he be making an announcement about the setting of the date for those by-elections?


Pierre Elliott Trudeau: My intentions have not changed, Mr. Speaker. I still intend to abide by the provisions of the legislation.


Walter David Baker: Given that the Standing Committee on Privileges and Elections seems to be one jump ahead of the Prime Minister with regard to this matter and has come to some consensus as to how the Election Expenses

Act might apply to candidates in by-elections, does the government House leader have any intention of bringing that legislation forward within the next few days?


Allan Joseph MacEachen: I understood that consensus existed among the parties, but I have been recently informed that no such consensus exists with respect to bringing in legislation, as I was prepared to do to clear up this matter.


PRIVILEGE
Mr. G. W. Baldwin (Peace River):: Mr. Speaker, I rise on a question of privilege of which I have given you notice. It has to do with the case of Dr. Alexander Peter Treu.
In the first place I want to make my own position clear. I am acting as one of the legal counsel to Dr. Treu. I am receiving no fee now, nor will I be receiving any fee, so I have no pecuniary interest at all. 1 think the House is entitled to know this.


Some hon. Members:: Hear, hear!


Gerald William Baldwin: I was greatly disturbed to read in Hansard some of the statements made by the Prime Minister (Mr. Trudeau) yesterday in answer to questions asked by my hon. friend from Halifax and other members of this party. Either the right hon. gentleman was devious, or he was ignorant. Because of the rules of the House I will accept the latter explanation. As reported at page 6517, the Prime Minister said, in connection with the contracts Dr. Treu received after his persecution by the government had commenced:
The simple answer, as the Minister of Justice indicated, is that the contracts received from NATO during the latter period were not classified as confidential.
This is a very natural thing. These are commercial contracts and no one suggests that commercial contracts are classified. But out of those contracts received by Dr. Treu, while he was being prosecuted, while his documents were taken away during the two years of his trial, some 2,000 products and/or documents of a classified nature were processed by Dr. Treu and forwarded by him to the NATO centres at which they were received. The contracts may not have been classified but the end products were, to the extent of some 2,000.
In the second place, as far as I am able to gather in a limited time, Dr. Treu did receive at least two classified documents, one in April, 1975, and a second document dated June 21, 1976, after his trial had commenced, which he received with an attached list of a classified nature on June 26, 1976, and of course he sent the classified material back. So much for the question of classified documents.
Dealing with a further aspect, the right hon. gentleman said with regard to the security classification:
June 20, 1978

When he left the company his security clearance ceased by the very fact of his leaving.
Later on, as reported on the right hand side of the same page and speaking about Dr. Treu, the Prime Minister said:
" . .. he concluded he no longer had the clearance of that job ..
The facts are that in December of 1972 Northern Electric, with whom Dr. Treu had been working as one of the advisers in connection with a most complex and useful scheme in relation to the NATO countries, of which Canada is still a part, got out of the business. At the strong urging of both the government and Northern Electric a company was formed by Dr. Treu to take over in December of 1972.
In June of 1973 Dr. Treu was among those attending a security meeting of a classified nature where he was "badged" and security cleared, and during which he talked to Mr. Jenkyns, the security clearance officer acting as liaison with NATO. Mr. Jenkyns was the security officer for the Department of Supply and Services. In June of 1974, Dr. Treu, security cleared and wearing his badge, attended a similar meeting. Finally, a letter dated January 5, 1976, over the signature of Hugh Grant, director of the defence programs branch of the Department of Industry, Trade and Commerce, invited Dr. Treu to attend a meeting of that branch which was to be held in Ottawa during the week of April 5, 1976.
I sincerely hope that the Prime Minister will set the record straight with respect to these issues, and I hope that, as he continues to play around with his constitutional tinkertoys, someone who has some knowledge of the law and human rights and natural justice will see that the proper kind of arrangements are written into the constitution in that regard.


Some hon. Members:: Hear, hear!


Pierre Elliott Trudeau: Mr. Speaker, the hon. gentleman stated at the beginning of his question of privilege that he was acting on behalf of a person who is pleading his case before the appeal court. Obviously he is acting as a lawyer properly should before the courts. He is pleading the case of his client. The courts have already decided the client is guilty under the law. I take it that if the lawyer opposite us wants to continue pleading the case, he can go before the courts and do so.
The hon. member is now presenting a case not as a member of parliament but as a party to litigation in a criminal matter. He is apparently giving evidence which he got from his client. I have contrary evidence. I have evidence from the government that the contracts received from NATO during that period were not in classified areas. In some subtle way the hon. member admits this, but he says the results of the contracts, presumably work that Mr. Treu did, ended up being classified, I suppose by NATO. That is not surprising. A person who is not classified can do work for a government or for the private sector, or for an international organization, which can then decide to classify it. The person doing the work is not the one who is going to decide whether the receiver of the work will communicate it to the enemy or not.
Order Paper Questions
I think it is interesting that the hon. gentleman should be using the House of Commons to plead a case which is before the appeal court, but I suggest he be properly qualified before the bar and get along with pleading his case in the proper place.


Some hon. Members:: Hear, hear!


Mr. Speaker:: Order. It may be that the hon. member for Peace River (Mr. Baldwin) as drawn attention to what is essentially a disagreement with respect to the Prime Minister's statement of an earlier day. in the final analysis, from a procedural point of view, I note he has attached no motion to his remarks, obviating the need for action by the Chair.



ROUTINE PROCEEDINGS


Pierre Elliott Trudeau: for leave to introduce Bill C-60, to amend the Constitution of Canada with respect to matters coming within the legislative authority of the Parliament of Canada, and to approve and authorize the taking of measures necessary for the amendment of the constitution with respect to certain other matters.


Some hon. Members:: Hear, hear!


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

[Stage Direction]
(Questions answered orally are indicated by an asterisk.)
Mr. Yvon Pinard (Parliamentary Secretary to President of Privy Council):: Mr. Speaker, the following questions will be answered today: 1,465, 1,710, 1,711 and 1,837.
I ask, Mr. Speaker, that the remaining questions be allowed to stand.


Mr. Alexander: What building projects are in the five years capital works budget for the southern Ontario region (Niagara Falls to Woodstock) by (a) the Department of Public Works (b) the Department of Transport (c) the Department of External Affairs (d) the Department of National Defence (e) the Department of Industry, Trade and Commerce (0 Central Mortgage and Housing Corporation (g) other Crown corporations?

June 20, 1978
Order Paper Questions


Yvon Pinard: (a) Information dealing with proposed expenditures beyond the current fiscal year are not publicly available until estimates are tabled in parliament. The estimates list, in the case of Public Works Canada, all capital projects estimated to cost $250,000 or more and on which work is estimated to start in 1978-79. The 1978-79 estimates list one Public Works Canada-funded building project for southern Ontario (Niagara Falls to Woodstock) on page 21-28: Niaga-ra-on-the-Lake post office. In addition, two minor building projects are under construction: Virgil post office, Winona post office, (b) None, (c) None, (d) There are two capital building projects in the DND program for the southern Ontario region in London, an extension to a military garage-estimated at $450,000 and a new training building estimated at $560,000. (e) None, (f) CMHC does not plan any construction on its own account in the southern Ontario region in the next five years. Its capital investment budget is dependent upon provincial agencies, municipalities, and private organizations in the housing field, (g) In so far as the Canadian Broadcasting Corporation is concerned: Windsor-replace French and English television transmitters. London and Sarnia-new English FM stereo radio transmitters. Other projects are planned for the area under the CBC's accelerated coverage plan. The ACP is a large, complex and highly integrated undertaking which now involves some 300 locations and 650 engineering projects. Names of the locations and the nature of the service to be provided are made public, step by step, as applications for licences are made to the CRTC. In so far as the Canadian National Railways is concerned: Building projects included in its five-year plans of capital requirements for the southern Ontario region between Niagara Falls and Woodstock are: 1. Additions or revisions to trackage at Brantford, Caledonia, and Jarvis as required to meet traffic from the new Stelco plant at Nanticoke. 2. Additional tracks in Parkdale yard. In so far as Export Development Corporation is concerned: By tradition and as a matter of commercial principle Crown corporations have not been required by parliament to answer detailed questions on their administration and operation, and in the case of Export Development Corporation, the Export Development Act places the responsibility for such matters on its board of directors. In so far as the St. Lawrence Seaway Authority is concerned: Bridge over Welland Canal at Port Colborne, channel improvements, bridge No. 10 to Port Robinson, Welland Canal. In so far as the other proprietary Crown corporations are concerned: None.


Mr. Brisco: 1.	Who owns Provident House in Toronto?
2.	Are any experiments being conducted at Provident House and, if so, who monitors the experiments and what is the nature of the experiments?
3.	Who, and in which department, monitors Provident House?
4.	What was the cost of Provident House?
5.	What are the ongoing annual costs?
[Mr. Alexander.)
6.	(a) How much is paid in salary to Provident House staff and to whom (b) what is the nationality of the occupants?
7.	How many technical papers have been written by the occupants of Provident House?


Hon. Judd Buchanan (Minister of Public Works and Minister of State for Science and Technology):: In so far as the
National Research Council is concerned the answer is as follows: 1. The Provident House is owned by: McClintock Homes, 3251 Sheppard Avenue E., Agincourt, Ontario.
2.	The thermal performance of the solar space and service water heating systems, as well as the performance of the collectors and annual heat storage unit, are being scientifically monitored with instrumentation installed by the National Research Council in 1976. The project is being monitored by the firm of: Hooper and Angus Assoc. Ltd., 980 Yonge Street, Toronto, Ontario.
3. The division of building research of the National Research Council is responsible for the monitoring contract on the Provident House.
4.	The design of the Provident House experiment was initiated under the Canadian Urban Demonstration Program of the Ministry of State for Urban Affairs in 1975. Financial support for the concept and working design was $90,430. Cost of solar hardware purchase and installation, as well as cost of modifying house design for solar system, totalled approximately $55,000, and was supported by the Ontario government ministry of energy.
5.	Annual operating costs has been absorbed by the owner of Provident House, and is therefore unknown.
6.	The owner, McClintock Homes, has a field man at the housing development containing Provident House. Part of his duties is to care for the Provident House. His salary is unknown. The house is currently rented by a Canadian couple with no children.
7.	The occupants and owners of the Provident House have not written any technical papers on the project. The designers, Mr. John Hix and Mr. F. C. Hooper, have prepared a number of articles on facets of the project. Mr. Hooper is currently preparing an assessment paper on the project for the annual meeting of the Solar Energy Society of Canada Inc. in London, Ontario, August 20-24, 1978.


Mr. Brisco: 1.	Has a condominium building recently been funded for solar energy experiments in Kitsilano, British Columbia?
2.	Who owns the building?
3.	(a) How much funding has been provided and was it in the nature of a grant or loan (b) what conditions are attached to the provision of this funding?
4.	(a) Who applied for the funding and to whom was it paid (b) who approved it?


J. Judd Buchanan: In so far as the
National Research Council is concerned the answer is as
June 20, 1978

follows: 1. Yes. A solar heating system trial has been funded in Kitsilano, B.C.
2. The eight-unit row housing project is owned by: Kitsilano Housing Society, Broadway and Vine, Vancouver, B.C.
3	and 4. The project is one of 15 initiated in FY 1977-78, under the National Research Council Solar Energy Research and Development Program. Part of this program is for trials of solar heating systems in multi-unit residential buildings. Over 80 groups responded to an announcement of the system trial program. These were screened by members of the division of building research. Thirty-five of the respondents were invited to submit detailed proposals, and 15 were finally awarded contracts. Final selection was by building research staff. The contracts cover the cost of designing the solar system; purchasing the solar heating components, and installing the solar system in the building. The contractor is reimbursed costs as they are incurred. At the end of the contract, the solar system must be demonstrated as being operational, and the building owner must reimburse the government a percentage of the solar component cost. The building owner is then the owner of the solar heating system. A condition of the contract is that the NRC or its agent have access to the building and system, for five years, to monitor the thermal performance of the solar heating components and system. The contract with Kitsilano housing authority is for $71,298.


Mr. Epp: Is the present Minister of National Revenue collecting both a ministerial and a senatorial salary and (a) if so, in what amount in each case (b) if not, what salary is he receiving and what is the amount?


Yvon Pinard: See Beauchesne's Parliamentary Rules and Forms citation No. 171 (m) and (ff).


Mr. Speaker:: The questions enumerated by the parliamentary secretary have been answered. Shall the remaining questions be allowed to stand?


Some hon. Members:: Agreed.



GOVERNMENT ORDERS


Mr. T. C. Douglas (Nanaimo-Cowichan-The Islands) moved:: That, in the opinion of this House
Natural Resources
(a)	all major new resource developments should be majority Canadian controlled as promised by the government during the 1974 federal election campaign; and
(b)	in order to avoid further domination and ownership of Canada's oil resources by foreign multi-national oil companies, and a continuing financial rip-off of the Canadian consumer, the development of Husky Oil Company's heavy oil resources should be undertaken by Petro-Canada in co-operation with the provinces directly affected.


Mr. Speaker:: The motion is debatable, and hon. members will want to be reminded that proceedings on this motion shall expire in accordance with Standing Order 58(11) at the ordinary hour of adjournment later this day.


Thomas Clement (Tommy) Douglas: Mr. Speaker, the House has just given first reading to a bill designed to patriate the Canadian constitution. That ought to remind us that one of the factors which motivated the Fathers of Confederation in bringing together the various provinces which now make up Canada was the fear that Canada would be overwhelmed and absorbed by the emerging giant to the south of us. 1 submit that this is still one of our major concerns. In the years which have transpired since 1867 we have gone a long way toward economic absorption, social assimilation, and political domination by the United States.
The Leader of the New Democratic Party, the hon. member for Oshawa-Whitby (Mr. Broadbent), in the policy paper which he presented to the New Democratic Party council- about which he has spoken in this House-called "An Industrial Strategy for Canada", contended that economic growth in Canada depends upon retaining our valuable resources under Canadian ownership and control.
The Liberal party in Canada has always paid lip service to the idea of maintaining economic independence for this country. Many members who have sat in the House in the Liberal ranks over the last 15 years have been members of the committee for an independent Canada, but the fact is that the record of their performance with respect to maintaining Canada as an independent economic entity has been a dismal one.
The present government has been in office for 15 years. In 1963, headed by Walter Gordon, Donald Macdonald, and Judy LaMarsh, a group came marching into the House of Commons to the tune of "Oh Canada, we stand on guard for thee". However, in the years which followed there was no change with respect to the steady encroachment upon our economic independence by large United States controlled multinational corporations. Then in the election campaign of 1974 the Prime Minister (Mr. Trudeau) made a commitment to the people of this country. This is what he said:
The Liberal Party of Canada sets as an objective that major new projects in the natural resource field should have at least 50 per cent, and preferably 60 per cent, Canadian equity ownership.
I asked the Prime Minister yesterday if that commitment still stood, and the Prime Minister answered in the affirmative. All the facts prove him to be wrong and, if he were on to his job, he would know that he was wrong. For instance, if he takes a look at the long list of oil and gas companies which have been taken over by foreign corporations since June, 1974,

June 20, 1978
Natural Resources
he will realize that the 50 per cent to 60 per cent Canadian ownership clause has not been applied. If he takes the trouble to look at the figures which were put out by corporations under the Corporations and Labour Unions Returns Act, he will find that in the last year for which figures are available, which was 1975, of foreign companies in the petroleum and coal products field foreign ownership is 95 per cent in equity, 95 per cent in sales, and 95 per cent in profits.
However, 1 think probably the most damning indictment of the Prime Minister's failure to uphold his commitment to maintain 50 per cent to 60 per cent Canadian ownership is to be found in the document I hold in my hand, which is a copy of a document over the signature of the Minister of Industry, Trade and Commerce (Mr. Horner). It is a review of the matter of Canadian ownership compared with foreign ownership in this country. It shows, in the first place, that consistently there have been takeovers by foreign corporations which have not involved 50 per cent Canadian ownership. The document says that in most instances so far it has not proven feasible to secure full compliance with the objective of Canadian ownership of resource-based companies. The Prime Minister put forward this policy in June, 1974. He said yesterday that it still stands, but the Minister of Industry, Trade and Commerce says that it has not been found feasible to put it into effect. Who is telling the truth, the Prime Minister or the Minister of Industry, Trade and Commerce?
In this document the Minister of Industry, Trade and Commerce admits that most investors know very little about this policy. He says, and I quote:
-at present many, perhaps most, foreign investors are not aware of this policy objective. There has been very little publicity and the last statement on the subject is three years old.
In this same document the Minister of Industry, Trade and Commerce suggests the advisability of dropping this provision, but he adds that the public should not be told about it because, and again I quote:
-it would be preferable that there be no public statement to that effect so as to minimize the danger that the change of practice would be seen as a fall-back by the government.
The government's commitment to maintain 50 per cent to 60 per cent Canadian ownership has proved to be a farce. The government has proved that it has not seriously attempted to carry out its policy or to maintain the level to which the Prime Minister committed his government in 1974. I know of no better illustration of this than the oil industry, which is the best example of creeping economic continentalism and the growing U.S. domination of our resource industries.
In the last 50 years the control of light oil in this country has been taken over almost entirely by U.S. majors. Virtually 100 per cent of the light crude oil in this country is now under the control of U.S. petroleum companies. The result is that they have raped this resource to the point where we have only about ten years' supply left. Sixty per cent of our production of oil and natural gas for years went to the U.S., even though it

was well known that the amount of reserves, we had on hand was perilously low.
Now that we have only ten years' supply left, the industry began to look at other sources. The next area it looked at was the tar sands. One might have thought that we would have learned from the light oil experience, and that there would have been some public participation or Canadian ownership in the development of the tar sands. But no, we allowed the three large U.S. companies which form Syncrude not only to take over the development of a large area of the tar sands but to do so with the financial assistance of the Government of Canada and of the governments of Ontario and Alberta. As a matter of fact the Canadian people are putting up a major part of the money in return for a minor interest in that development, and it is interesting that the next company in line is the Shell Oil Company, another U.S. company which is going to develop the tar sands.
That brings us to the present situation when we find that the only remaining oil acreage we have in this country which is not completely under foreign domination is the heavy oil deposits on the Saskatchewan-Alberta border. These oil deposits may be very important for the future industrial development of Canada, because at present we see from the 1977 figures that Canada has a net deficit in oil production of approximately 100,000 barrels a day. The result is that in 1977 we had a deficit, as a result of imported oil, of $1.5 billion, and with our exports being phased out because of our diminishing reserves it is estimated that by 1985 our deficit could reach $5 billion. In light of that fact, the heavy oil acreage in western Canada becomes of tremendous importance. That area is largely controlled by the Husky Oil Company which has over 1.5 million acres under lease or under option. It is estimated that with the new technology now available, it has 16 billion barrels of recoverable oil.
Joseph Baird, the president of Occidental Oil, is reported in this morning's paper as having said, "This is a real carrot". Yes, 16 billion barrels of recoverable oil in a good area, reasonably accessible, not like oil in the Arctic or in the ocean, but a supply of oil which would meet Canada's needs and save us from being importers of oil and from becoming increasingly dependent upon the oil producing countries which at present have such tremendous power around the world, is a real carrot.
For over a year Petro-Canada has been endeavouring to persuade Husky to begin a large scale development of this heavy oil, but no action has taken place. I am told that it even offered a partnership to help them raise the necessary capital, but that was not acceptable. As a matter of fact I suspect that the oil industry is not averse to having Canada find it necessary to import some of its oil, particularly if they buy that oil from sources which the multinational oil companies control. Finally, Petro-Canada did what seemed to me was the logical thing to do. It made an offer to purchase the Husky Oil Company and to develop that field, either alone or in partnership with the Saskatchewan and Alberta governments, and I want to point out that they did so with the approval of the
June 20, 1978

cabinet, as the Minister of Energy, Mines and Resources (Mr. Gillespie) has stated in the House.
This was a logical step to take, but what do we find? We find that whereas on Monday, June 20, as reported at page 6268 of Hansard, the Minister of Energy, Mines and Resources said that this development by Petro-Canada of the heavy oil deposits was "in the national interest", by the end of the week the picture began to change. We see it, first of all, in the words of the Minister of Industry, Trade and Commerce who criticized the decision made by Petro-Canada, and when Occidental made counter offers to Petro-Canada's offer to buy Husky, he said, "I'm not shedding many tears over Petro-Canada", and Alberta's energy minister, Don Getty, said on television the other night that they "don't want a publicly owned company" in the field.


Mr. Lambert (Edmonton West):: Nor does Canada, if it is based on your Saskatchewan government's policies!


Thomas Clement (Tommy) Douglas: I see this is endorsed by some of the Progressive Conservative members who share that view.
I want to remind the House that the U.S. and Canada are probably the only two industrialized nations in the world that do not have a publicly owned oil company which controls the major part of the oil industry in their countries.
The gentlemen to my right might hold back the forces of progress for a while, but the fact is that eventually the Canadian people will insist on having a voice in determining the development of their own resources.


Some hon. Members:: Hear, hear!


Some hon. Members:: Oh, oh!


Thomas Clement (Tommy) Douglas: The hon. member for Edmonton West (Mr. Lambert) may make all the speeches he wants when I am through. He does not need to bust his gut shouting from his corner of the House. As a matter of fact, he cannot spare any of that.


Some hon. Members:: Oh, oh!


Thomas Clement (Tommy) Douglas: Last
Thursday, as reported at page 6432 of Hansard, the Minister of Energy, Mines and Resources had changed his mind and said that it was no longer "in the public interest" for Petro-Canada to develop the Husky Oil acreage. He then took the position that it was in the national interest that the oil deposits be developed, irrespective of who develops them. That is quite a switch. He went on to say further that if it were guaranteed that Occidental would develop the field, then the Canadian objective would have been achieved. That change of pace in two days is difficult to understand. First of all, it was a clear signal to FIR A that there would be no objection from the cabinet if FIRA decided to allow the transfer of the Husky Oil assets to Occidental which is bidding against Petro-Canada. But I ask, what kind of sellout are we witnessing?
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Why was Petro-Canada bidding for Husky Oil in the first place if it is not important that Petro-Canada develop this oilfield, and if Occidental is now interested in developing that field, what has Occidental been doing until now when Petro-Canada and the government were trying to find some person or persons to develop that field? The result is that Petro-Canada has become the birdie in sort of a badminton game between two American companies, which are bouncing it back and forth. Every time Petro-Canada makes a bid, Occidental tops it. I ask the House to consider what this does to the status of Petro-Canada in this country and the international petroleum business. The government's treatment of Petro-Canada, in saying that it does not matter who develops the field so long as it is developed, demeans Petro-Canada. The cabinet is demeaning itself by making it appear to all the world that it is manipulated by the oil cartel, which has been calling the tune up until now, and apparently is still doing so.
This topic is very important because a great deposit of oil either will be developed by Canadians for Canadians, or it will pass into the control of a foreign corporation over which we will have little control. If the government was not able to persuade Husky to develop the field with sufficient urgency, we have no guarantee that Occidental will develop the field with sufficient urgency to meet the oil needs of Canada.
The first line of defence is FIRA. It has the power to recommend that there be no transfer from Husky to Occidental, or to recommend that the transfer be permitted. Up until now, in my opinion, FIRA has been a comparatively toothless tiger. It has allowed transfer after transfer, although the memo of the Minister of Industry, Trade and Commerce showed that there was not 50 per cent Canadian ownership. This time FIRA has a chance to redeem itself. My hope is that it will be seized of the importance to Canada of applying the 50 per cent to 60 per cent Canadian ownership commitment and insist that no transfer be permitted.
Our second line of defence is the cabinet. They are the body who must make the final decision on the basis of a recommendation from FIRA. I am not overly optimistic. Certainly the cabinet has not been very diligent in applying the 50 per cent to 60 per cent rule which was set forth by the Prime Minister in June, 1974. I hope public opinion in this country will be so aroused that pressure will be brought upon cabinet to apply the 50 per cent to 60 per cent ownership provision, and to say that the development of heavy oil deposits on the Alberta-Sas-katchewan border will not be transferred to the Occidental Oil Company, but that they will be developed by the people's own company, Petro-Canada.


Mr. Bawden:: At what price?


Thomas Clement (Tommy) Douglas: The offer is $52 a share. That is the offer which is going out to them right now. As far as Occidental is concerned, it is not an outright purchase; it is a trade. I think many people would rather take the cash than the trade.

June 20, 1978
Natural Resources
According to this morning's paper, the president of Occidental said that if they go ahead they want concessions on taxes and royalties, and also they would be quite willing to let the two provincial governments and Petro-Can put up the major part of the money to build a tertiary recovery plant, but of course they insist on retaining the acreage and control of the feed stock. Anyone silly enough to put up extraction facilities and leave the oil supplies in the hands of a company over which he has no control, certainly would be buying a pig in a poke.


Peter Colwell Bawden: What about Saskatchewan?


Thomas Clement (Tommy) Douglas: 1 cannot answer all the hon. member's questions because my time is limited.


Peter Colwell Bawden: Well, you were the premier.


Thomas Clement (Tommy) Douglas: Today first reading was given to a bill dealing with our Constitution. The House, and particularly the government, must realize that people are not made great by a constitution. It is the people who make a constitution.


Some hon. Members:: Hear, hear!


Thomas Clement (Tommy) Douglas: It is the
people who make a nation great.


The Acting Speaker (Mr. Turner):: I regret to inform the hon. member that his allotted time has expired. He may continue with unanimous consent. Does the hon. member have unanimous consent?


Some hon. Members:: Agreed.


Stanley Howard Knowles: Mr. Speaker, 1 rise on a point of order. The hon. member for Nanaimo-Cowichan-The Islands (Mr. Douglas) did not start until 3.13, and he has until 3.43.


Some hon. Members:: Hear, hear!


Thomas Clement (Tommy) Douglas: In closing, what makes a nation great is not just its constitution. A constitution is an attempt to put into legal form the hopes, aspirations, and objectives of free people. A nation only becomes great when that nation has a sense of pride and purpose. It cannot have that if its resources are to be owned outside its own borders, and if it is to have no voice whatsoever in the determination of its own economic destiny.


Some hon. Members:: Hear, hear!


Thomas Clement (Tommy) Douglas: The
Canadian historian, Frank Underhill, whom many of us remember with admiration and affection, once said that a nation is a collection of people who have done great things together in the past and who are determined to do great things together in the future. Canadians have done great things in the

past. There is a long litany of accomplishments in peace and in war of which we can be proud. Nothing would do more to galvanize Canadians and make us a great nation than to have a sense of purpose in respect of developing our own resources, to do it with our own money and our own effort, and to be the arbiters of our own destiny. In order to do those things we need courageous leadership, and an opportunity to develop our resources. Neither the leadership nor the opportunity has been given to us by the government. If the government and the House fail to deal courageously with this problem, then we and those who come after us will have to pay the price of our inertia and apathy.


Some hon. Members:: Hear, hear!


Allan Frederick Lawrence: Mr. Speaker, hon. members present will be glad to know that I do not intend to take up my full allotment of time in respect of this matter, simply because we do not think there is enough merit in the concept indicated by the New Democratic motion today to take up too much of the time of the House. This is not to say that we disagree with everything in the motion by any means, nor do we disagree with all the sentiments expressed by the hon. member for Nanaimo-Cowichan-The Islands (Mr. Douglas).
In this House, in the political field of this country, and as far as public opinion is concerned, nationalistic sentiment is not solely the prerogative of the New Democratic Party, the Liberal party or the Progressive Conservative party by any means. Certainly, for one, I agree it is long past due when Canada's national resources should be developed by and for the Canadian national interest. But in many respects we certainly do not agree with the nationalistic sentiments expressed by the hon. member who was the mover of the motion and who has just sat down.
Contrary, however, to the merits of his argument, and contrary to the main thrust of the socialistic dogma to which he adheres, and from which, unfortunately, there is no difference in concept, principle or policy on the part of the federal Liberal government of the day, we emphatically do not believe, as the hon. member just indicated, that there are only two choices or two alternatives.
That hon. member said there are only two alternatives. One of those alternatives, in his mind, obviously is the continued domination of the Canadian oil industry by foreigners, and perhaps even a consolidation through the offer or the bid by the Occidental Oil Company of California to take over Husky Oil of Canada. That is the one choice the hon. member graphically describes for us. That is not his choice, that is not my choice, and it is not our party's choice.
The other alternative he presented to the House and the public, however, as the only way Canadian resources can be preserved for Canadian use and, in the long term, for the Canadian national interest, is to have a Canadian federal governmental agency take it over.


Some hon. Members:: Hear, hear!
June 20, 1978


Allan Frederick Lawrence: Obviously the applause from the NDP benches for that type of program comes as no surprise. What was surprising, however, was that from the federal Liberal benches during the course of the remarks by the hon. member for Nanaimo-Cowichan-The Islands, there was equal applause for some of those sentiments respecting a governmental Crown agency. The minister of the day nodded his head and grinned, indicating that is perfectly correct.
Those two are not the only alternatives; they are not the only choices, no matter how much the socialists and near socialists believe those are the choices to be presented to the Canadian people.
There is another choice, and that other choice is obviously far preferable, not only in the short run but in the long-term interests of the development of Canadian resources by and for Canadians, and that other choice has to be, and it should be our position, that Husky Oil and the development of the heavy oil fields be undertaken by Canadian interests, by Canadians through the Canadian private sector, not the Canadian public sector.


Some hon. Members:: Oh, oh!


Allan Frederick Lawrence: I suggest that is completely distinct from the position taken by the hon. member who has just sat down, for the NDP socialists, and completely distinct from the position which I know the minister has taken, and the Prime Minister (Mr. Trudeau) undoubtedly has taken through this whole sorry mess which has led us to this situation today. That position has been that the only answer has to be Petro-Can or a Canadian government agency bidding for the shares of Husky. 1 say we disagree profoundly with the principle that a federal governmental agency is the only answer to Canadian control of Canadian resources. Specifically in relation to this matter, we believe that Petro-Can should not control the Canadian development of heavy oil in this country.
Our position is that Canadian private interests can and should be encouraged to develop Canadian resources, and the very obvious and determined present national federal government policy and concept, directed right out of the Prime Minister's office, has been and still is to discourage any other development but that of Petro-Can. We think this is wrong, that it is folly, that it is unfair and highly discriminatory, and it certainly can never serve the Canadian long-term interests either in heavy oil, energy generally or, for that matter, in the Canadian resources field generally.
Heavy oil development has not proceeded as it should have, and there are many reasons for this. We just heard the argument presented to us, and the socialists and the Liberals of this country both claim this, that it is the fault of foreign, specifically American, management and control of the present land-the present land owners, in particular, Husky Oil of Canada. Husky Oil of Canada at the moment is obviously controlled by foreign interests-by American interests. We believe it takes at least two to tango.
Natural Resources
Our enquiries, and I have reason to believe they have a very great modicum of authority, have led us to believe there certainly has been a concept and plan, emanating from the very top of our present federal government, which have brought home to Husky over a period of the last three months, in no uncertain terms, that come hell or high water this present federal government is going to permit only Petro-Can to develop the heavy oil potential. We say this is wrong, heavy handed, and discriminatory. It is against our concept of what Petro-Can was set up for in the first place, and it is against the long-term interests of Canada.
How many more federal government agencies will be required to bail out, take over, or buy back some of these fields when they come on market? Are we forever going to be required to rely on the half knowledge of federal governmental people, in particular of persons in the federal government at the political level, in taking over these fields as they may become available in the future?
I agree completely that control should not have passed from Canada in the first place, and perhaps that is a damning indictment not only of this government but of all past governments. In any event, it has happened, and it has happened by a number of ways and means which can be directly related to the policies and principles of successive federal governments, not only in the energy field and not only in the resources field, but also in the tax field. There is no question about that. Nevertheless, it has happened, and the facts speak for themselves.
The Canadian resources industry generally is dominated by foreigners. The Canadian energy field industries are dominated by foreigners, and the Canadian petroleum industry is dominated by foreigners. However, do you really think it is the government of the day that we should continually be looking to in order to bail us out of the situation we are in as a result of these past errors and failures? God forbid! I do not care what the political complexion is of the government of the day. This is a wrong, heavy-handed move. If I had my "druthers", for instance, not only would I move specifically to make sure that that the Occidental bid was never countenanced by the government of the day, but I would also move to make very sure that the Petro-Canada bid was withdrawn as well. It is a wrong move to encourage, and it is wrong to use a heavy hand, as this government has been using over the last few months, to discourage and to drag its feet in respect of that heavy oil development.
The heavy oil development should have been well on its way by now, but it is not. It is not the fault of foreigners but of the footdragging of this government and its numerous agencies in the field. Husky Oil has known for some time, and let us make no bones about it, that they were not going to be permitted under this government to develop that heavy oil field. There is no question about that whatsoever.
The hon. member spoke the other day of collusion between Occidental Oil and Husky Oil, and that may well be the case.
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June 20, 1978
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I simply ask you, Mr. Speaker, would you not do exactly the same if you knew that the people who wanted to take you over cared less about efficiency or where they were getting their money? These companies knew that behind the agency which would eventually take over, there was the unlimited resources of the poor Canadian taxpayer. Of course the present moves are a giant poker game designed to up the ante. The only problem is that the poor sucker who is going to pay in the long run will be the Canadian taxpayer, and this is very wrong.
I suggest to you, sir, that that was not the purpose of Petro-Canada. Petro-Canada, surely, was set up by this House, and 1 will not go back and read the speeches, as a governmental move for a Crown agency to create something new in this country, not to follow the jaded policies of the CDC and attempt to buy back some of those endeavours. It is a wrong, false move at the moment for Petro-Canada to do just exactly that. If we had our way we would say, "A pox on all of them and their alternatives." The alternative is not the government versus the Americans.
There is another alternative, but it has been almost completely destroyed by the inepteness of the government of the day and the Petro-Canada management coming forward on at least two occasions; and I am sure that it will happen more and more as the crunch finally comes. It has been destroyed by successive counter offers made by companies which may not really be in the game on the one hand, and a governmental agency on the other hand which feels it has no restriction or limitation whatsoever on the amount of money it can pay. As I say, the people who will pay in the end will be the taxpayers of this country.
I ask you, Mr. Speaker, what new oil resources are going to be available to the people of Canada that we do not know about now? What new development, what real initiative and leadership are taking place that will bring new wealth and new industry to Canada as a whole? What is going to happen to that $500 million to $800 million that will be spent under this scheme, which was devised in the Prime Minister's office and encouraged by the socialists on our left, those socialists who like to wrap themselves in the flag and indicate what great patriots and nationalists they are? I will tell you what is going to happen, Mr. Speaker. Under this scheme that $800 million of Canadian taxpayers' funds are going to travel south of the border. What good, Mr. Speaker, is that money going to do Canada when it crosses the border? What new development is that going to foster in this country? Absolutely none!
The minister is about to speak when I sit down, and I hope he will give us a lot more detail than has been provided so far. This is not the sole and exclusive policy of a governmental Crown agency that we are talking about when we talk of Petro-Canada and its two offers so far; we are talking about a policy that has been devised and initiated not even, I suspect, in the offices of the hon. ministers but in the office of the Prime Minister of this country. There are many, many close connections between what has happened over the last four months and individuals who deal with and have connections with the Prime Minister's office itself.
We on this side of the House suspect that a concerted, intentional, and prejudicial series of moves have been put into play on Husky in order to get it out of the picture and to make sure that everyone else is scared off due to some of the unreal statements and offers that have been made. If the Petro-Canada offer is so closely connected with the policies and principles of this government, I hope that the minister of the day will tell us what the basis of the Petro-Can offer is. How do they arrive at the figure which they have just come along with, because this is not his money or Petro-Can's money; this is the money of the people of this country? It is a very high trust, and burden, placed on the minister of the Crown responsible for this agency to the people of this country.
1 would like a very detailed explanation. Why is it $58; why is it not $78; why is it not $38? How are these things devised. The second figure that has now come along is different from the first, and I would like to know how they arrived at the first figure. I hope we are going to get an explanation, because it is owed to us in view of the fact this government is spending the taxpayers' money. 1 am also looking for an explanation of the great volume of share selling and buying and the activity that occurred prior to the public announcement of Petro-Canada's offer. It is great for the minister to come along, as I am sure-


The Acting Speaker (Mr. Turner):: Order, please. I regret to inform the hon. member that his allotted time has expired. He may continue with unanimous consent. Is there unanimous consent?


Some hon. Members:: Agreed.


Mr. Gillespie:: You have had only 20 minutes.


Allan Frederick Lawrence: 1 shall sum up, Mr. Speaker. There are a great many facets of this whole transaction which are wrapped in mystery. In the long term interest of investment in Canada's resources by Canadians with Canadian capital, to have the heavy hand of the government intrude in a way such as this one has will not encourage that investment. There will be no investment in Canadian resources, energy, or in particular the Canadian petroleum field from either side of the border. We need that type of investment, and we need changes in our tax laws to encourage it. It must be as profitable for Canadians to invest in Canada as it is for the Americans. This situation simply does not apply today.
We must not let the socialists or the near socialists in the government today pull the wool over our eyes, or permit them to pull the wool over the eyes of the Canadian public when they say there are only two alternatives, those two alternatives being the continued domination by the United States in this important field, or for a Canadian governmental agency to act as "Big Brother" and take over.
The third alternative and the only answer in the long run is for the Canadian private sector to be given some breaks by the government such as investors in other countries receive. That is where the change has to come, Mr. Speaker.


Some hon. Members:: Hear, hear!

June 20, 1978


Alastair William Gillespie: Mr. Speaker, I welcome the opportunity to participate in this debate this afternoon which addresses itself to two very important issues. The first issue is that of Canadian ownership and control of resource developments in Canada, and the second issue, the current one, is whether development of Husky's heavy oil resources should be undertaken by Petro-Canada in co-operation with the provinces directly affected.
1 listened to the speech of the hon. member for Nanaimo-Cowichan-The Islands (Mr. Douglas) with great interest and care. This is an area with which 1 was associated in my previous portfolio and with which I am very much involved in my present porfolio. I should like to tell the hon. member for Nanaimo-Cowichan-The Islands that 1 thought he made a very good speech but, of course, that does not mean I agree with everything he said. Many of us on this side of the House could agree with the sentiments he uttered today and the degree to which he put Canada first in his remarks.
By contrast, I was appalled when the official spokesman for the Conservative party, the hon. member for Northumberland-Durham (Mr. Lawrence), said he was not going to take all the time allotted to him today-although he was able to, with our encouragement. I think it is appalling when the official spokesman for the official party-the party that would like to become the government of this country-


Mr. Paproski:: Will become.


Alastair William Gillespie: -says that he is not going to take all his time to address himself to this issue because in some way this issue is not important to him or his party. That is a shocking situation. Clearly the Conservative party is retreating once again in a major policy area. They are running away from responsibility; they are hiding their heads because they do not want to state their position. 1 have heard comments to the effect that they may not have one. That is probably the kindest thing we could say. There is so much contention within the party that they cannot make up their minds.
I could not but reflect upon a phrase the hon. member for Northumberland-Durham used. I think his words were to the effect that we should bail ourselves out of past errors. I could not think of a better description of the mandate he was given by his own party in this House-"to bail us out of our past errors." Quite clearly their past error is that they are still living with it and do not know what to do with it. That error was that they voted against the creation of Petro-Canada.
I was appalled that the energy spokesman of the official opposition was not prepared to address himself to the question of energy policy. We on this side of the House would have liked to hear what the Conservatives have to say. I think a lot of people in the country have been wondering for a long time what the position of the Tory party is on energy.
In my opening remarks, Mr. Speaker, I referred to the two parts of this resolution. 1 should like to deal briefly with a review of the policy initiatives, the legislative action, regulato-
Natural Resources
ry action, and legislative proposals of this government in the last four years.
The hon. member for Nanaimo-Cowichan-The Islands referred to FIRA. This legislation was originally passed by the House in 1973. Part I was proclaimed in the early part of 1974, but part II was not proclaimed until this parliament. The Foreign Investment Review Agency was a very significant piece of legislation in the development of Canadian policy for the development and protection of Canadian resources. Hon. members are aware of the one test contained in the Foreign Investment Review Agency Act, the phrase "significant benefit to Canada". The act was not set up to block foreign investment unless that investment does not provide significant benefit to Canada.
The second significant event 1 should like to refer to was also referred by the hon. member for Nanaimo-Cowichan-The Islands, and that is the election promise made by the Prime Minister (Mr. Trudeau) in the Sault in the late spring of 1974. When I was minister of industry, trade and commerce I referred to that promise as reported in the Commons Debates for October 10, 1974, when I said:
The Prime Minister said that the Liberal Party of Canada sets as its objective that new, major projects in the natural resources field should have at least 50 per cent, and preferably 60 per cent, Canadian equity ownership. As there are overlapping responsibilities for the development of Canada's natural resources shared by both the federal government and the provinces, he said we would hope to pursue this objective jointly with the provinces.
I will return later in my remarks to the part the provinces might and should play in this area of ownership and the question of the percentage of Canadian equity participation.
Yesterday the Prime Minister was asked whether he stood by that statement, and he replied very quickly that he does. That was an important statement in 1974, and that was an important statement yesterday.
Perhaps I might refer in passing, Mr. Speaker, to that statement about 50 per cent and preferably 60 per cent Canadian equity ownership, which today is seen as part of that policy in respect of resources. One can think back to the government of the day and the policy with respect to uranium in this country-that Canadians should hold 67 per cent of all new projects. In a few moments I will refer to the oil and gas bill now before the House which takes the same kinds of proposals a step further in that industry. The result of that uranium policy was to ensure that a project at Key Lake, Saskatchewan, will be Canadian controlled. More than that, a Canadian Crown corporation, Eldorado, will participate in that project because Inexco, the American corporation which was a one third partner in the deal, decided it would sell its ownership. It provided an option to Eldorado, which in turn has set up one half of that development to the Saskatchewan government. As a result of that, there will be greater Canadian participation in the uranium industry.
The next significant event in this parliament was the passage of the Petro-Canada Act in July, 1975. It is worth
80045-49^2

June 20, 1978
Natural Resources
quoting for the record and for the edification of members of the official opposition the purposes of the act:
The purpose of this Act is to establish within the energy industries in Canada a Crown owned company with authority to explore for hydrocarbon deposits, to negotiate for and acquire petroleum and petroleum products from abroad to assure a continuity of supply for the needs of Canada, to develop and exploit deposits of hydrocarbons within and without Canada in the interests of Canada, to carry out research and development projects in relation to hydrocarbons and other fuels, and to engage in exploration for, and the production, distribution, refining and marketing of, fuels.
About a week ago another member of the official opposition, the hon. member for Calgary Centre (Mr. Andre), raised a question during question period which suggested that the Crown corporation, Petro-Canada, did not have a mandate for the acquisition of other companies. I draw his attention to the objectives, powers and duties set forth in the Petro-Canada Act. 1 quote paragraph 6:
The objects of the Corporation are
(a)	to engage in exploration for and the development of hydrocarbons and other types of fuel or energy;
(b)	to engage in research and development projects relating to fuel and energy resources;
(c)	to import, produce, transport, distribute, refine and market hydrocarbons of all descriptions;
(d)	to produce, distribute, transport and market other fuels and energy; and
(e)	to engage or invest in ventures or enterprises related to the exploration, production, importation, distribution, refining and marketing of fuel, energy and related resources.
The mandate of Petro-Canada is very clear in this area, although the official opposition may not be very clear about it.
On July 18, 1975, the government promulgated a new set of principles for international business conduct. It might be worth referring to those principles because they have not received the attention they deserve. These principles in July, 1975, served notice on companies doing business in Canada that there were certain expectations which the government had with regard to their conduct. 1 quote the preamble:
Foreign-controlled businesses in Canada are expected to operate in ways that will bring significant benefit to Canada. To this end they should pursue policies that will foster their independence in decision-making, their innovative and other entrepreneurial capabilities, their efficiency, and their identification with Canada and the aspirations of the Canadian people.
There are 14 separate principles set out. 1 wish to refer to Nos. 1 and 9. The first one reads:
Pursue a high degree of autonomy in the exercise of decision-making and risk-taking functions, including innovative activity and the marketing of any resulting new products.
Number 9 reads:
Create a financial structure that provides opportunity for substantial equity participation in the Canadian enterprise by the Canadian public.
The next move that was taken was a year ago in August. This is a significant one. Again there has been very little reference to it by the official opposition. I refer to the new regulations that were established for the exploration and development of oil and gas on federal lands. There were three particular principles which were set out at that time and which are now operative.

The first one provides a preference for Petro-Canada with regard to Crown lands. We gave Petro-Canada an option to look over the then existing Crown lands which were not out to permit or to lease, and to choose from those lands 25 per cent.
The second preference was that Petro-Canada could select up to 25 per cent of any lands surrendered back to the Crown by other oil companies. This is over a period of seven years following promulgation of the regulations. In those two ways regulations have been made to give Petro-Canada a preference in the development of Crown land under federal control.
The third regulation promulgated at that time had to do with the back-in provision for Petro-Canada when a permit came up for special renewal. This special renewal is not an automatic decision on the part of the administrative authority. It is a discretionary one.
The government at that time introduced a back-in provision which in effect stated that if there is no more than 10 per cent Canadian ownership in a particular project, Petro-Canada would have a 25 per cent right to back in and then pay its way from then on in. If there is 35 per cent Canadian participation in a project, Petro-Canada would not have any right to back in.
There was a heavy emphasis on getting Canadian ownership into that particular phase of the exploration cycle. If Canadian ownership was already there, Petro-Canada had no right up to 35 per cent. However, between 10 and 35 per cent the Crown corporation would have special rights.
In January, 1976, Petro-Canada started up. In August, 1976, it acquired the assets of ARCAN, which was the Atlantic Richfield subsidiary operating in Canada. As hon. members will recall, that corporation was not able to hack it with the Syncrude project. It was the withdrawal of ARCAN which created the condition of near disaster for that project, and the governments of Alberta and Ontario, as well as the federal government, had to move in to salvage this project for the benefit of Canada.
The assets were acquired in August, 1976, by Petro-Canada. 1 do not recall the official opposition raising any objection at that time. If they did, I am surprised that they did not remind us today. It is another clear example of the inconsistencies and inability of the official opposition really to decide how they are going to treat the Crown corporation.


Donald Frank Mazankowski: When did you discover heavy oil?


Alastair William Gillespie: I would like to carry on. I am sure the hon. member opposite will have an opportunity to make his remarks.
Early this year we gave first reading to the Canada Oil and Gas Act. That act provides further Canadian ownership opportunities in the sense that it will require 25 per cent Canadian participation in producing facilities under the new oil and gas regulations. This is not 50 per cent, but it is an important step toward that objective of increasing Canadian participation in the oil and gas industry under federal jurisdiction.
June 20, 1978

In conclusion, with regard to the foreign investment side, I believe that any fair minded person will have to say that the record shows a very strong commitment on the part of the government to increasing Canadian participation and control in Canadian resource development. These measures have been taken during the life of this parliament, over the past four years. We have seen no comparable commitment to these issues by the official opposition.
The official position of the official opposition is that they would dismantle Petro-Canada if they were to form the next government. They would rely more on the national oil companies of other countries than they would on the national oil company of Canada. They seem to have forgotten that a national oil company, British Petroleum, operates in Canada. They seem to have forgotten that the French government has a national oil company investing in Canada. The official opposition seem to have forgotten that the Italian government has a national oil company operating in Canada. They have forgotten that the German government has an investment in the oil and gas industry in this country. They have forgotten that the Japanese government has an investment in this country. What they are saying to the Canadian people is that they are quite prepared to accept the national oil companies of other countries, but they are not prepared to accept our own national oil company. 1 think it is about time members of the Conservative party moved into the twentieth century because the position they have taken on this issue is to return to the colonization approach, the colonial attitude of their heyday.
I should like to turn, now, to the subject of the development of heavy oil in Saskatchewan in the context of our policy of self-reliance for Canada. It is important that hon. members should recognize that this policy of reducing our dependence on foreign oil was endorsed by the provincial premiers at the first ministers' conference in February. Moreover, the heavy oil of Saskatchewan was singled out for special treatment by the premiers, including the premier of Saskatchewan, presumably.
Hon. members will realize how important the heavy oil resources of Canada are if they have referred recently to a booklet put out by my department "Oil Sands and Heavy Oils-the Prospects." I would refer them to page three which sets out the proportion of oil sands which are available commercially, the economic possibilities, and attraction to investors. In the Lloydminster area alone these deposits are the equivalent of about half the recoverable reserves in the conventional fields of Alberta. That is how important they are.
The corporate sector, more particularly Husky, has its own time frame from the point of view of the development of company assets. We are dealing here with a classic situation in which the legitimate time frame of the private sector does not conform with the time frame which the government has determined to be in the national interest. Petro-Canada, along with the government of Saskatchewan, the federal government and Husky, held a number of discussions about the development of
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these sands. It was the view of Petro-Canada that it would not be possible, given the sense of urgency attached to the matter by the Government of Canada, to reach a solution without making a take-over bid. This bid, together with the counter bid by Occidental and the further bid by Petro-Canada, is now history, and time alone will tell what the result will be. But I believe Canadians can feel reassured by the presence of the Foreign Investment Review Act. Occidental has already noted the importance of that legislation and made its offer conditional not just upon the basis of 80 per cent acceptance but on the basis of its approval under the act. The corporation has also stated it wants Petro-Canada along with it. Petro-Canada, for its part, has announced that it is preparing its own offer.
The other main conclusion we might draw at this time reflecting on both issues, this project and the Canadian development of resources, particularly the ownership criteria which might apply, is that the provinces have remained silent for too long. It is up to the provinces, now, to accept the Prime Minister's invitation to discuss this question of 50 per cent, preferably 60 per cent, Canadian equity ownership of resource projects. Too much time has gone by. There seems to be too much emphasis on the part of the provinces on questions having to do with their jurisdiction and ownership of the resources. It is time to let Canadians know what share of the equity participation Canadians should enjoy in major new projects.
The time has come for the Tories to address themselves to this question, too. We know how they stand with regard to Petro-Canada. They would dismantle it. This may be a very uneasy policy position for them to live with. I would welcome a change of mind on their part; it is long overdue. But I would welcome it if they would address their attention to this question of Canadian participation. The hon. member for North-umberland-Durham talked about straw men. He never once dealt with the question of what his party believed to be a reasonable degree of participation of Canadians in the resource development of our country.
The people know where the Liberals stand; our record in this parliament is clear. I think the time has come to hear from the official opposition. Canadians would also welcome a statement from the provincial premiers.


Eudore Allard: Mr. Speaker, first I would like to congratulate my colleague, the hon. member for Nanai-mo-Cowichan-The Islands (Mr. Douglas) for having moved this motion.
Last week, the hon. member proved his awareness of the problem by raising this issue several times in questions put to the Minister of Energy, Mines and Resources (Mr. Gillespie). Though he did not obtain all the explanations he sought, he still made the House more aware than before of this serious problem.

June 20, 1978
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Mr. Speaker, the Husky Oil affair underlines once more the need for Canadians to control their natural resources. At the federal-provincial conference of the ministers of energy last year, one of the items on the agenda was the problem of heavy oil development. The final paper stated that it would cost from $3 to $5 a barrel to convert this heavy oil into useful resources on a large scale. The development of heavy oil therefore requires large investments. According to the Saskatchewan premier, Husky Oil alone cannot support the cost of building a plant for this purpose. Last Wednesday, he estimated the cost of developing the Husky Oil supplies and of building a heavy oil extraction plant at about $2 billion. Heavy oil reserves on the Saskatchewan-Alberta boundary are evaluated at five billion barrels. This may not seem a lot if we think about the estimated supplies of 900 billion barrels in the Alberta tar sands. But extracting oil from the tar sands also involves certain problems. In the case of Husky Oil, you would simply have to inject hot water, in other words use a thermal process, to help the flow of the oil which is too heavy. This development therefore involves only a technological problem since the capital is virtually assured following the offers of Petro-Canada and Occidental. Last June 15, I was listening to the Minister of Energy, Mines and Resources and to the Prime Minister (Mr. Trudeau) who replied to my colleague for Nanaimo-Cowichan-The Islands that whoever the final owner of the Husky Company may be, what counts is that these resources be developed and that they be developed in the national interest.
Mr. Speaker, I believe that when we have a Canadian company, publicly owned to boot, which wants to purchase an oil company which on its own cannot develop oil deposits for the benefit of Canadians, we cannot sit quietly by and let an American company take the development of our energy resources which are vital for the progress of our economy. National interest does not call only for the resources to be developed for Canadians, but also for these resources to be developed by Canadians. The interference of a foreign company in this shameful bargaining has inflated the market value of Husky Oil shares to such a point that Petro-Canada had to raise its offer to $52 a share last week. Frankly I wonder if the Occidental company from California, which indulges in such a financial scheme, deserves our confidence since that increase in value of the stock will result in higher costs and eventually all Canadians will have to pay for it through government subsidies or a price increase. The rich will get even richer at the expense of others.
Mr. Speaker, let us not forget that the large majority of our resource companies are under foreign control. In certain circumstances a Canadian company can be taken over by an American company because there is no Canadian company to buy it. But in the present circumstances, a bid has been filed by a Canadian corporation-Petro-Canada which is owned by all Canadians-to purchase another Canadian corporation.

Then, Mr. Speaker, in light of the financial bargaining that forced Petro-Canada to increase its initial offer of $45 a share to $52 to control Husky Oil, only to see Occidental offer $55 a share, I simply believe that our interests are far from being protected. Petro-Canada will have no control over the development of those important resources. I know that Occidental propose that Petro-Canada participate in a consortium to develop heavy oils in Lloydminster and acquire a third of the shares in the development of those deposits. But who will get control over those deposits? Foreign interests.
Then, Mr. Speaker, when the Prime Minister (Mr. Trudeau) told us during the last election that all major new resource developments should be Canadian controlled, was he joking or did he only try to fool Canadians? The fact is that Petro-Canada has been had by a foreign company. The Foreign Investment Review Agency might accept the proposals of Occidental and authorize it to take over Husky Oil. Where are we going? When will Canadians have a word to say about the control and development of our resources?
Mr. Speaker, our natural resources are not the only things under foreign control, there is also our economy where at least 90 per cent of business is controlled by foreigners, who are often our nearest neighbours, our neighbours to the south. The commitments made by the Prime Minister during the 1974 election have been forgotten to the extent that the government itself is prepared to surrender our birthrights to foreigners against a mess of pottage. Mr. Speaker, this is the work of a government which has had the majority for almost four years.


Mr. Harvie Andre (Calgary Centre):: Mr. Speaker, as I start off in this debate I must correct the minister, who again has misinformed the House. I cannot say whether it was intentional or through ignorance, but following the earlier example of my friend and colleague, the hon. member for Peace River (Mr. Baldwin) with regard to the Prime Minister (Mr. Trudeau) I will concede that it was probably the latter.
The Minister of Energy, Mines and Resources (Mr. Gillespie) claimed that we were inaccurate in describing the mandate of Petro-Canada. I refer the minister to a document put out by his predecessor called "An Energy Policy for Canada", published in early July of 1973, in which is contained an analysis of the worth of a national oil company. The analysis contained arguments for a national oil company and arguments against. Anyone reading these arguments without any built-in bias would come to the conclusion that there was not a good argument for a national oil company. The argument against was not strongly against, but on the basis of the analysis done by the Department of Energy, Mines and Resources of the Liberal government under the hon. Donald Macdonald, who was then the minister, one would come to that conclusion.
However, in the fall of 1973 and in 1974, because of the Middle East war the OPEC nations gained strength, and there
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were fears about shortages of oil in Canada. It was largely on the strength of the newfound realization that, as a country, we could not count on cheap foreign oil to supply our needs, that the government came to the conclusion that one of the vehicles to be used to improve Canada's security of supply would be a national oil company. That was the main reason for the establishment of Petro-Canada, in the face of the government's own analysis which indicated that such a national oil company would probably not be a good idea.
That was not very long ago, and the minister can check the record. If he wants to check the March 12, 1975, issue of Hansard, he will see a speech by his predecessor indicating that in order to promote more security of energy supply for Canada the government was establishing a national oil company to be called Petro-Canada. The original mandate of Petro-Canada when the act was written-and it was written like all acts are written by this government, with a huge, broad brush-was to make sure Petro-Canada could do anything, including pumping gas and changing tires, if that was deemed to be in the national interest. So the act indeed empowers Petro-Canada to do anything. No one ever claimed that what Petro-Canada was doing in trying to take over Husky is in contravention of the act. But it is certainly not in keeping with the original reason given by this government for the establishment of Petro-Canada.
Then, to bolster his argument, the minister brought in the question of the northern regulations establishing the rules which will prevail for exploration of federal lands in the high Arctic. I am appalled that he could use that argument. He said what a great thing it was that Petro-Canada had this favoured position. As the minister should be aware, since the promulgation of those regulations the private sector has abandoned federal lands in the high Arctic and there is virtually no exploration occurring up there, other than that which is captive, namely, PanArctic, with Petro-Canada being the owner of 45 per cent of it.


Gerald William Baldwin: The minister thinks that the north is everything north of Toronto.


Harvie Andre: The net result of the minister's regulations, for which he takes credit, is the cessation of exploration in Canada's Arctic. How that will help us achieve self-sufficiency or self-reliance is beyond me. Apparently what the government has done, without admitting it to the Canadian people, is to abandon the notion of self-sufficiency, the idea of Canada producing as much energy as it needs. The government is prepared to see Canadians rely on insecure offshore sources of oil and gas. If, heaven forbid, the day comes when those supplies are cut off and Canadians start freezing in the dark, the credit for that can go right to this minister and his government.
Questions are raised as to why we should dismantle Petro-Canada. There are lots of reasons, and I could debate this for a long time, but I will give just a few arguments based on the annual report of Petro-Canada for 1977. Some people may have seen press releases on Petro-Canada stating, for example,
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that Petro-Canada had $88 million in revenue in 1977, which is pure flimflam. It is true that their total revenues were $88 million, but you have to pay salaries and things like that, and when you take off expenses for salaries and rent, you get a revenue of $30 million, that is on assets of $878 million or equity of $551 million-$538 million at the start of the year.
In other words, the profit of that company before tax was 5.5 per cent on equity. The taxpayers put in $538 million, and the company did such a marvellous job of investing it that we got 5.5 per cent return on it, when the Minister of Finance (Mr. Chretien) is not in New York borrowing money at 9 per cent. It is a hell of a deal. We borrow at 9 per cent, give it to Petro-Canada, and then get 5.5 per cent on that. Then you wonder why we want to dismantle the company. By the way, the after tax return, which is what is really important, is 1.7 per cent on equity. In comparison, the average for the industry is in the vicinity of 17 per cent or 18 per cent, so Petro-Canada is doing one tenth as well as the average oil company in Canada. Small wonder! Who can expect any better?
We are talking about the same people who run the Post Office, for goodness sake. If they cannot deliver a letter, how the heck are they going to find oil and gas? Have they contributed to Canada's long term security supply? Let us look at the figures. They found 21 billion cubic feet of gas, but they sold 32 billion cubic feet, meaning they suffered a net depletion of 11 billion cubic feet of gas. They found 2.9 million barrels of oil, but they sold 10.2 million barrels of oil, meaning there was a net depletion of 7.3 million barrels of oil. So if you put a gas value on that in company terms, it comes out to $27 million of inventory that was sold. If you subtract that from the $30 million of net profit, you wind up with the large figure of $3 million on an investment of $538 million by the people of Canada. If that is not reason enough to dismantle the company, there are plenty of others.


Alastair William Gillespie: What are some of them?


Harvie Andre: The minister would like more reasons. Let him read the document produced by his own department back in 1973 and he will get lots of reasons there.
The hon. member for Nanaimo-Cowichan-The Islands (Mr. Douglas), who introduced the motion, ended his speech with the rhetorical question, what makes a nation great? He went on to state that it was a sense of purpose, a sense of pride, having goals and objectives, none of which I disagree with. It was well stated and nobody in this party would disagree with that. But then somehow, by some magic, he associated that directly with state ownership, with socialism. He said that the only way a nation can be great is if the state runs everything. That misses the fundamental elements of a nation, namely, the people.
It is the people, not bureaucracy, not government, that make a nation great. It is the releasing of the creative drive in people, the energy in individual Canadians who operate in a free economy where there are opportunities and where government is an assistance, not a hindrance by encouraging the growth of a huge, oppressive bureaucracy which the hon.

June 20, 1978
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member is advocating. The effect of that can only be to stifle the individual and to prevent Canadians from taking on those activities which lead to greatness on an individual basis and as a nation.
Like my friend and colleague, the hon. member for North-umberland-Durham (Mr. Lawrence), I object most strenuously to the notion that only socialists are nationalists and patriots. I was a founding member of the committee for an independent Canada, and I believe that far too much of our economy is owned by foreigners. I know why that is so. It is because the oil industry is owned primarily by foreigners and it is because of the stupid tax laws in this country which have existed for too many years.
I do not know how many members in the House realize that until the budget of 1975 an American could invest in Canadian energy development on free tax dollars but a Canadian could not, so that we had the ludicrous situation where it was cheaper for an American to invest in Canada than for a Canadian to do so. That was the kind of tax law that existed in this country? Why? Because the Liberals, with the encouragement of the CCF and the NDP, wanted a tax system that gouged Canadians. They did not want incentive in the system so that Canadians could invest on an equal basis with foreigners in our own country.
When the hon. member for Nanaimo-Cowichan-The Islands was the premier of Saskatchewan, he was not in Ottawa saying that he wanted to change the law so that Canadians could develop the oil reserves of Saskatchewan; he was inviting Husky to participate. He is more responsible than anybody for Husky having the position it has in Saskatchewan, if you want to assess how Husky got to that position.
Today the hon. member for Nanaimo-Cowichan-The Islands stood and sanctimoniously said that a true Canadian stands for more and more government and a state owned company to take over everything. Of all the sanctimonious-


An hon. Member:: Hogwash?


Stanley Howard Knowles: Flim-flam?


Harvie Andre: I think the word I was about to use was unparliamentary.
I hope the Minister of Energy, Mines and Resources will listen to what I am saying. The tax provision has a built-in sunset clause. It will change on July 1, 1979. If we want to return to the situation where Americans can invest in Canadian energy supplies tax free, then all we have to do is allow that provision to lapse. It will lapse on July 1, 1979, unless some changes are made. If the New Democratic Party is serious about wanting Canadians to develop our resources, they should join with us in pressuring the government to extend that date, or eliminate it altogether. The tax law could be left as it is now so that we are on a par with foreigners when it comes to investing in our own country.

Also I should like to comment on the apparent ability of the New Democratic Party to be on both sides of the fence at the same time without hurting itself. During oral questions today, the hon. Leader of the New Democratic Party (Mr. Broad-bent) stood and condemned the government's handling of the Post Office. He indicated how outrageous it was that letters were not being delivered, were being shipped all over the country, and that the management of that government-run operation was horrendous. Then the hon. member for Nanaimo-Cowichan-The Islands said that we should turn over the entire oil industry to the same people who are running the Post Office. He did not even display a shred of embarrassment about the obvious contradiction. It baffles me.


Thomas Clement (Tommy) Douglas: Those are the last people I would want to run anything.


Harvie Andre: At one time I heard an interesting comment by a Mr. Schumiatcher, whom the hon. member for Nanaimo-Cowichan-The Islands knows well. This gentleman went to Saskatchewan to work for the socialist government of that province. Eventually he became quite a staunch, small "c" right winger. He was asked why he changed fom an avid socialist to a small conservative at the other extreme. In reply, he said that any person who is 20 and not a socialist has no heart, and when he is 40 and not a conservative, he has no brains.


Stanley Howard Knowles: He borrowed that from 100 years ago.


Harvie Andre: I do not know if that is his theory or that of someone else. Given the quality of the argument today, despite the actual age, immaturity certainly is evident. The apparent unwillingness of the NDP to see the obvious contradiction is unbelievable. On the one hand the NDP say that the government messes up everything it touches, and on the other hand it says that we need more government.
Why did Petro-Can become involved in the first place? It was negotiating with Husky and Gulf Oil to develop heavy oils. Husky was awaiting a response to a suggested arrangement, when Petro-Can came along with its raid. Then Husky was in contact with Occidental. Occidental came up with a higher offer, and we know the story from then on. Why did Petro-Can do that? Why did it operate that way? There were at least two Canadian consortiums which were ready to make offers for Husky. They were upstaged by Petro-Can.


Leslie Gordon Benjamin: Why did they not make the offers?


Harvie Andre: Because of the treacherous behaviour of Petro-Can. Petro-Can was supposed to be negotiating, and instead it pulled out its raid. Petro-Can cannot outbid Occidental. It will be an impossibility because of American tax law. If Petro-Can pays cash, it is a taxable capital gain in the hands of the present owners. Thus, they get to keep half, and the American government will get the other half. That will put Canadian tax dollars into the American treasury. However, Occidental's paper value is not taxable, even though it is a second rate issue
June 20, 1978

of a preferred share. Given that it does not involve a cash outlay by Occidental, the paper value does not really matter. There is a 10 per cent interest rate, but that is not a big deal. The cash outlay in that regard is minor. Occidental can outbid Petro-Can no matter where it goes. For the sake of the poor Canadian taxpayer, the minister should tell Petro-Can to get out of the action quickly. Also he should tell Occidental to quit as well, and tell Husky to get busy developing the heavy reserves. If Husky cannot do it-


The Acting Speaker (Mr. Turner):: I regret to inform the hon. member that his allotted time has expired. He may continue with unanimous consent. Is there unanimous consent?


Some hon. Members:: Agreed.


Thomas Clement (Tommy) Douglas: How can
Husky do this?


Harvie Andre: I hear the question I am being asked. Over 50 licences and permits are required to undertake any significant energy project in this country. Every one of those licences and permits is given by the government. If that is not control, what is?


Thomas Clement (Tommy) Douglas: It is not
done by the federal government. It is done by provincial governments.


Harvie Andre: Petro-Can will spend approximately $600 million of our tax moneys if it is successful. On top of that, to upgrade the physical plant, approximately $1 billion is needed. As well, unknown hundreds of millions are required for the development of the field itself. We are looking at an approximate $2 billion expenditure, which will not add one single barrel of proven recoverable reserves to Canada. It will not contribute one single iota to improving our position.
Last week the President of the Treasury Board (Mr. Andras) stood in the House and gave us a half hour lecture on how responsive the government has been in terms of spending, and how it is cutting back in government expenditures. It realizes that government expenditure is creating havoc in the economy and is causing taxpayers to be upset. He blamed the previous high level of government spending on a minority government. At the same time as we were receiving this sanctimonious lecture, another government agency committed Canadian taxpayers to over $2 billion of expenditure. There is not even a hint of embarrassment anywhere along the line.


Alastair William Gillespie: That is false.


Henry Perrin Beatty: The minister is embarrassed.


Harvie Andre: Yes, the minister is embarrassed. Where will that money come from, if not from the taxpayers?


Donald Frank Mazankowski: Petro-Can will borrow the money.


Harvie Andre: Yes, Petro-Can will borrow the money. The minister thinks the situation is different if the money is borrowed by Petro-Can rather than the Minister of Finance. What is the difference? They are both agents of Her Majesty and of the federal government. If the Minister of Finance
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borrows $11 billion and Petro-Can borrows another $2 billion, the total government borrowing is $13 billion.


Donald Frank Mazankowski: Then the government writes it off, as it did for the CNR.


Harvie Andre: That is right, it will be written off. It will be disguised and will never show up in the estimates. The public will not know that the money is coming out of their jeans. The economy will remain sick, as will the country. It is time for the government to be more honest. It is time for the government to display more willingness to be truthful and open with Canadians. The government should stand behind the statements made by the Prime Minister recently. He claimed that he believed in the private sector, as we approached an election. That faith should be demonstrated.
We should let the private sector get on with developing the heavy oil reserves. Let us allow Canadians as individuals and as entrepreneurs to use their creativity and energy to satisfy these national goals. Let us not fool ourselves by believing that big government-"Big Brother"-here in Ottawa is somehow more capable, efficient, and effective in fulfilling these national goals than is the private sector, because the facts just do not bear that out, Mr. Speaker.



PROCEEDINGS ON ADJOURNMENT MOTION

[Stage Direction]
SUBJECT MATTER OF QUESTIONS TO BE DEBATED Mr. Deputy Speaker: Before recognizing the hon. parliamentary secretary, it is my duty, pursuant to Standing Order 40, to inform the House that the questions to be raised tonight at the time of adjournment are as follows: the hon. member for Simcoe-North (Mr. Rynard)-Health and Welfare-Emigration of doctors from Canada; the hon. member for Red Deer (Mr. Towers)-Post Office-Unfilled orders for Olympic coins; the hon. member for Churchill (Mr. Smith)-Grain- Shortage of boxcars at Churchill, Manitoba.


[Stage Direction]
The House resumed consideration of the motion of Mr. Douglas (Nanaimo-Cowichan-The Islands):
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[Stage Direction]
June 20, 1978
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That, in the opinion of this House
(a)	all major new resources developments should be majority Canadian controlled as promised by the Government during the 1974 federal election campaign; and
(b)	in order to avoid further domination and ownership of Canada's oil resources by foreign multi-national oil companies, and a continuing financial rip-off of the Canadian consumer, the development of Husky Oil Company's heavy oil resources should be undertaken by Petro-Canada in co-operation with the provinces directly affected.
Mr. Maurice Dupras (Parliamentary Secretary to Secretary of State for External Affairs):: Mr. Speaker, I would like to begin my remarks by trying to reply to the last question of my colleague, the hon. member for Calgary Centre (Mr. Andre), who asked where the funds to finance such an undertaking would be coming from. For the information of my colleague, I would like to tell him that Canadians are indeed the most thrifty people in the world since they have the highest savings. In spite of a denigration campaign about everything that is Canadian, I am still confident that Canadians will recognize a good bargain when they see one and that they wil take the opportunity to make investments, not in a credit union or in a bank but in a Canadian business to develop the Canadian economy.
If Canadians do so, Mr. Speaker, they will be doing exactly like some twenty countries throughout the world. For example, allow me to point out that there are at least 25 French public agencies involved in mining operations in Canada. I will spare you, Mr. Speaker, the enumeration of the 25 organizations or agencies of the French government involved in Canada. There are also six German public agencies, five from the United Kingdom, five from Italy, two from the Netherlands, four from Japan and finally two from Spain, for a total of 45 government agencies of all those countries which have confidence in the Canadian economy and find it is excellent to invest and be involved in mining operations in Canada.
And it is that kind of astuteness, Mr. Speaker, to find such economic potential in Canada, which lacks in the provinces and which the provincial governments of Canada lack. The provinces' lack of enthusiasm is something scandalous, Mr. Speaker, because they do not contribute to the development of natural resources, especially of strategic resources like energy. It is this part of the excellent motion of my friend and distinguished colleague the hon. member for Nanaimo-Cowi-chan-The Islands (Mr. Douglas) that I find the most important, that is the end of the second paragraph, paragraph (b), where he says, and I quote:
... the development of Husky Oil Company's heavy oil resources should be undertaken by Petro-Canada in co-operation with the provinces directly affected.
It is precisely, Mr. Speaker, because of this practically complete absence of contribution from the provinces in such undertakings, that so many foreign companies participate in them.
It is not surprising, Mr. Speaker, because it seems that anything coming from the Canadian government is depreciat-

ed, not only by persons whose interest is to depreciate our country, but also by several members of the opposition as well. And once again, one can see that Petro-Canada, which was established in spite of the opposition of the Progressive Conservative party, is a corporation which will guarantee all Canadians reliable energy resources, energy resources we can control. I do not understand the position of my colleague from Calgary Centre (Mr. Andre) when he objects to the establishment or the development of Petro-Canada. Yet I did not hear any objection from him when his provincial government in Alberta nationalized Pacific Western Airlines. I wonder if the provincial government has made a mistake in launching such an undertaking. In his next speech, Mr. Speaker, the hon. member might let us know how he sees this action of the provincial government in the operation of an airline.
That is precisely the problem, Mr. Speaker. They are not consistent, they are not consistent with themselves. One day they have one policy, one way of doing things, and the next they have an entirely different way. But with this Liberal government, Mr. Speaker, it is always the same way. During a speech on the government's policy concerning the expansion of the industry and the development of natural resources which the Prime Minister (Mr. Trudeau) delivered in Sault Ste. Marie on June 28, 1974, he stated, and I quote:
The Liberal Party of Canada has set as its objective that new, major projects in the natural resources field should have at least 50 per cent, and preferably 60 per cent, Canadian equity ownership. As there are overlapping responsibilities for the development of Canada's natural resources shared by both the federal government and the provinces, the federal government hopes to pursue this objective jointly with the provinces.
Mr. Speaker, we know the provinces have always lagged behind; we have seen it happen in two easily identifiable undertakings, namely Petro-Canada and Syncrude. It was quite a job convincing the provinces to become involved and join the federal government. Later on during that same campaign, the Minister of Energy, Mines and Resources (Mr. Gillespie) reaffirmed and dealt in depth with that policy objective in a statement to the House of Commons.
The Prime Minister stated in the House yesterday that that policy objective of the government had not changed. Contrary to what we often see our friends do across the way.
Everyone knows that foreign investments have played an extremely important part in the development of our natural resources in Canada and will continue to do so in the future. This influx of foreign capital in the past has resulted, among other things, in a large number of our resource industry in Canada belonging and being controlled today by foreign interests. Those industries are found predominantly in the sector of combustible minerals; they also assume a relatively important role in mining and forestry operations, and a comparatively small though not negligible one in the Canadian fishing sector.
However, there has been very little change in the level of foreign ownership in natural resources development industries.
June 20, 1978

The changes which actually took place over the last five years were aimed mainly at reducing the level of foreign ownership and raising the level of Canadian participation in these industries. The government has committed itself to promote higher Canadian participation and has passed a certain number of measures to that effect.
In 1970, the government adopted a policy limiting to 33 per cent the level of foreign ownership in uranium mining. The Minister of Energy, Mines and Resources has stated that he will table a bill designed to implement this policy as soon as possible. Canadian participation in the development of petroleum and gas resources in the Arctic regions of Canada has been ensured by the direct involvement of the government in the PanArctic consortium.
Petro-Canada is a mechanism which we have created in spite of the Conservative opposition, as I indicated earlier, so that the federal government and Canadians generally could participate in the exploitation and the development of petroleum and gas resources of Canada.
Last year we amended the regulations governing petroleum and gas deposits in Canada in order to apply the policy which the government had already announced and whereby the authorization to produce crude oil from federal lands would be granted only if the enterprise had a Canadian financial involvement of at least 25 per cent. The government's commitment towards the increase of the Canadian content and participation in the development of resources has been reiterated in the document regarding the energy policy of the government entitled "An Energy Strategy for Canada". In keeping with the implementation of the Foreign Investments Review Act, we have paid particular attention to the government's objective concerning wider Canadian participation in natural resources development projects. Mr. Speaker, the results are quite eloquent.
Tremendous capital funds will be required for the expansion of natural resources industries in Canada in the next 10 or 12 years. In the area of energy alone, expenditures during the period from 1978 to 1990 should reach $188 billion. On the short run, capital expenditures in the field of energy should soar from $9.4 billion in 1977 to over $19 billion by 1982.
Foreign capital will obviously be required to support the Canadian economies if we are to reach the objective of selfsufficiency in energy and fully develop the important resources that exist in other sectors. Consequently, by pursuing its objective of boosting Canadian ownership in natural resources industries in Canada the government must take into consideration not only what is desirable but also what is achievable. Those claiming that Canadian resources should be exclusively developed by Canadians would unfortunately be postponing indefinitely a number of important projects which are now on the drafting board and which would create thousands and thousands of jobs for Canadians, contribute substantially to
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the correction of our balance of payments and stimulate considerably the Canadian economy as a whole.
Mr. Speaker, those are all reasons which prompt the government of Canada not to delay its involvement in the development of natural resources, more particularly energy resources. By doing that, Mr. Speaker, we are only showing as much managerial astuteness and skillfulness as those I named earlier, those seven or eight industrialized countries which chose to come and settle in Canada and contribute with Canadians to our economic development.


Donald Frank Mazankowski: This is a very important debate, Mr. Speaker, as has been pointed out by the other members who have preceded me. I think it is fair to say that it is fundamental to our continuing desire to achieve self-sufficiency in the supply of gas and oil for Canada's domestic needs. It brings up once again the important subject of ownership and control of our gas and oil resources in this country.
We in Canada may not have the luxury of ownership in this very important sector, but it is fair to say that we do have the opportunity to exercise control, and it is very important that we exercise that control, as we must and as we should. The important thing in this ongoing debate about the control and ownership of our natural resources is not so much a matter of whether we own them but, more important, a matter of whether we have the capability of controlling the manner in which these resources will be developed, that we have that capability at the federal and provincial levels and, to some extent, at the local levels.
It is also important that we put the whole question of the creation of Petro-Canada into its proper context. The minister took a great deal of his time today in his speech defending Petro-Canada, as he must, but we should be cognizant of the fact that the creation of Petro-Canada was not the result of de facto Liberal policy or philosophy; it was part and parcel of the Liberal survival package which was so important during those very difficult years they experienced between 1972 and 1974 when they had to call upon the support of the NDP to maintain power. When the NDP presented its so-called shopping list to the government as a condition of their support, the national oil company, which later became Petro-Canada, was an item on that list, and to be assured of their continuing support the government had to act upon that item. The Liberals buckled under the pressure of the NDP, and now this minister and this government are doing everything in their power to ensure that Petro-Canada becomes a viable participant in the oil industry in this country.
As I see it, the most important part of this debate is simply that the heavy oil reserves in the Lloydminster area must be developed. Indeed, it is important in the ongoing process of our attempt to achieve self-sufficiency and security of supply that this resource be developed. It is important too from a technological point of view because we are entering into an area in the development of the petrochemical industry where there is a
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Natural Resources
great deal of technical expertise yet to be developed. We are relatively elementary in that particular area because the heavy oil industry per se has not been looked upon over the years as a viable means by which we could achieve that goal of self-sufficiency, simply because heavy oil was used for other than traditional petroleum requirements. Essentially, heavy oil was used for asphalt paving, manufacturing of building materials, et cetera.
Development of the heavy oil reserves is important from an over-all economic point of view to Canada in terms of stimulating economic activity and of our desire to engage further in the processing and developing of our natural resources in secondary and tertiary ways. It is important furthermore that this resource be developed from the standpoint of Canada's endeavour to achieve an acceptable level in its balance of payments problem.
The prospect of Canada having to import a million barrels of oil a year has a very detrimental impact on the economic welfare of this nation. I would like to quote Jack Gallagher, the president of Dome Petroleum, when he spoke to the Canadian Institute of Strategic Studies last October. I have used these figures before, but I think they are important and they should be reiterated because they demonstrate and, indeed, highlight the impact of depending to any extent upon foreign oil to meet our domestic demands. He stated:
The economic impact of importing one million barrels per day of foreign oil at $15 per barrel has a negative effect on the economy of $5.5 billion per year. In contrast, using one million barrels per day of domestically produced oil at the same cost delivered in Toronto creates a positive annual economic benefit of $15.6 billion which includes payments to the various levels of government of $6.2 billion... In addition to the economic benefit of $15.6 billion from domestic oil. .. (Canada would realize) a saving in foreign exchange of $5.2 billion per year.
From a national economic point of view as well as in the area of security of supply, and our attempts to achieve the degree of self sufficiency we want in this country, it is important that these resources be developed.
It is worth mentioning that, according to the National Energy Board statistics, by 1985 we could be importing 52 per cent of our oil. If we take a figure of $20 per barrel that would work out to $8.5 billion per year, a huge drain that would be devastating to our balance of payments.
It has been suggested that if we proceed to establish a heavy oil upgrading facility, one that would produce 100,000 barrels of oil per day, our imports could be reduced by $730 million per year. The economic benefits to governments should be considered.
In the package put together by Pacific Petroleums Ltd., the company that is spearheading the heavy oil upgrading facility in Alberta, it is indicated that over a 20-year period taxes and royalties accruing to the federal government would amount to $2 billion, and to the provincial government, $2.6 billion. If the facility is not developed the oil will stay in the ground or be used to pave roads and parking lots and as a component in the manufacturing of building materials.

As one who resides in and represents the constituency where the city of Lloydminster is located, I think it is important to note the impact that this resource has and will have on the area. The Lloydminster type heavy crude oil pool affects in an economic way an area approximately 100 miles in radius. It has been estimated that some 75,000 people are affected by this industry, directly or indirectly.
It should be noted too that the heavy oil industry is very labour intensive, much more so than the conventional type of oil industry. It has been stated that approximately 34 per cent of the direct and secondary employment in Lloydminster is related to the heavy crude industry. It has been estimated that it takes the labour of one man for each producing well. Currently, in the immediate area, there are more than 3,000 producing wells which, using that formula, directly account for some 3,000 jobs.
Construction of a heavy oil upgrading plant costing $500 million to $700 million, and producing in the range of 100,000 barrels per day, would involve the employment of some 1,500 people. It is estimated that after completion 150 to 200 permanent staff would be required to operate it. There are, of course, the spin-off advantages of the development of the resource that would add to the already significant number of jobs created by the facility.
It has been pointed out by the members who have spoken earlier that current estimates suggest there are 16 billion barrels of heavy oil in the Lloydminster district. Using existing methods of extraction and even those methods in the process of being established, it is considered that only 5 to 10 per cent of the oil can be recovered. Methods being developed are so promising that it is hoped that it will be feasible to recover as much as 25 per cent to 30 per cent of the resource.
I think it is important that we get on with the job of building one upgrading facility at least in order to stimulate research into technology and the expertise that will be required if we are to recover a greater percentage of the available reserves.
I think it is wise to recap some of the history when we analyse the development of this important industry, Mr. Speaker. Heavy oil has been around for a long time. Husky Oil Ltd. has been involved in the Lloydminster area for many years. It is not something that has just been discovered, although I think the Minister of Energy, Mines and Resources (Mr. Gillespie) may just have found out about it recently.
In the days of cheap oil, there was no call on the resource. It was used to make asphalt for paving roads and for making other related items. The price increase by the OPEC cartel in 1973 changed this. Before the thought of establishing a heavy oil upgrading facility became popular, the industry was put in very serious jeopardy in 1974-75 through the export tax and the establishment of export quotas which affected this oil reserve as well as conventional reserves and put the heavy oil industry in a very serious position.
The bulk of this resource was exported to the United States because we did not have the capability in this country of upgrading it in our conventional refineries. Because of export
June 20, 1978

cutbacks and the export tax, that marketing opportunity was lost. When the markets dried up in the winter of 1975-76, hundreds of wells were closed. This had a very serious impact upon the industry because it costs so much to start up production again after closure, and some wells never regained their productive potential. This was a very serious set-back.
We brought this matter to the attention of the minister of this House. The hon. member for Battleford-Kindersley (Mr. Mclsaac) and I made representations to the minister, and I must commend him for his response to them. He visited the area and Lloydminster, and saw first hand the impact that government policies were having upon this very important industry. As a result he set out to make some changes in the regulations, which in effect caused Husky Oil Ltd. and the other companies involved in the extraction of the resource to get back into the business.
At that time the minister realized the importance the heavy oil industry would have upon our over-all efforts to achieve self-reliance or self-sufficiency. I think the experience he gained there was part and parcel of the government's over-all policy to bring about the further development of this resource.
I should also say that Husky was at that time embarking upon an expansion program, a program to bring in a new refining facility, it was not as elaborate as the one talked about in recent days. However, they were initiating action on their own; it was not at the cajoling of the government or Petro-Canada.
When the minister expressed government policy, that it would encourage the further development of this resource and come up with some government programs and incentives to make it attractive, they immediately became interested in the establishment of an upgrading facility. They set out immediately to engage in discussions, consultations and negotiations with both the federal government and the provincial government of Saskatchewan, and later with Petro-Canada.
What looked like a very promising situation back in 1977 has been clouded by the foot-dragging of this minister, his inability to get the province of Saskatchewan and other interested parties together to provide the kind of leadership to back up this statement of producing a million barrels of synthetic oil a day by the year 1985 or 1990.
Having given that background, we now have to look at the best route and best method to develop this resource. We must ensure that the heavy oil which is extracted can be brought up to a specification suitable for our existing conventional refineries.
To be absolutely frank and honest, whether this resource is developed by the private sector or by a Crown corporation, it will only happen if we have a favourable climate in terms of a federal tax policy and in terms of what the provincial government and its royalty and tax structure will bring. We must bear in mind that we have to call upon the company that has proven expertise and experience and is prepared and willing to put its head on the line, so to speak, to develop this resource.
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In my view, Husky have pioneered the heavy oil industry. They are well prepared and have indicated a willingness to work with Occidental. Occidental expressed a willingness and, I am sure, are prepared to meet the deadlines and challenges in the development of this resource.
I urge the minister to forget his pet project, Petro-Canada, and to get on with the job of developing this resource. We need this resource. It can be used to the best advantage of all Canadians. It can be a very important element in our over-all objective of achieving that degree of self-sufficiency which we need in this country. Let Petro-Canada go into the boondocks to find some extra oil. As the hon. member for Calgary Centre (Mr. Andre) stated, they have yet to prove that they are able to discover one barrel of oil.


Mr. Alan G. Martin (Parliamentary Secretary to Minister of Consumer and Corporate Affairs):: Mr. Speaker, I am pleased to join in this debate on a most important and interesting topic. I commend the distinguished member for Nanaimo-Cowichan-The Islands (Mr. Douglas), whom all members of this House will be most sad to see take his retirement at the end of this parliament. He came here originally as a younger member of parliament, 1 believe as long ago as 1935. That was at a time when a Liberal government was returned once again by the majority of the Canadian people after five years of rather disastrous results. After nine years here, the hon. member went on to an illustrious career as premier of his native province of Saskatchewan for a further 17 years.


Stanley Howard Knowles: Native? He was born in Scotland.


Alan Gray Martin: I presumed it was his native province. He returned to Ottawa as a leader of a newly labelled party and continued in that position for ten years. He spent another seven illustrious years in what I consider to be, with a little bit of bias, a most important role in this House, and that is simply a member of parliament.
I wish to deal with the second part of the hon. member's motion, which reads:
-in order to avoid further domination and ownership of Canada's oil resources by foreign multi-national oil companies, and a continuing financial rip-off of the Canadian consumer, the development of Husky Oil Company's heavy oil resources should be undertaken by Petro-Canada in co-operation with the provinces directly affected.
We are looking at this Husky-Petro-Canada-Occidental issue of redevelopment of heavy oil when the total proven reserves of conventional oil in Canada stand at somewhere between six billion and seven billion barrels. As I understand it, that is enough to meet total Canadian needs for ten years at our present rate of consumption. That is really not very much oil.
This situation has received very critical and close attention by this government since the double whammy in 1973 when we experienced a quadrupling of world prices. There was an acknowledgement by our National Energy Board that our proven reserves were far less than what most Canadians had assumed prior to that time. Suddenly Canadians were faced

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with the fact that we were no longer a country with boundless reserves of oil and gas. That is the first point that has to be made, and it is an important one.
The next point is that there are still some Canadians who are understandably confused about this over-all picture. They do not really believe that there is a worldwide crisis developing in the near to immediate future in this area.
It is important to put a few figures on the record. My understanding of the world picture is that at the present time there are 646 billion barrels in place. That is being used up at the rate of 22 billion barrels a year. At most, this gives us about a 30 year supply at current consumption. That does not allow for any expansion in future.
By the turn of the century it is clear that we will have a worldwide problem on our hands. There is no point in our looking to the United States for potential support. Even at this time that country is importing 45 per cent of its needs.
What are we to do to counteract the problem? What have we done and what are we doing? First, we are moving to eliminate completely our exports of conventional crude to the United States. We are quickly moving to a point in the future where there will be no further exports. At the same time, this government has shown considerable leadership across the country in conservation measures. Canadians are subscribing to those measures more and more. They are doing everything they can both individually and collectively to keep down the further increasing demand which has been a normal factor in this country up to this time. On the one hand we are closing down exports, and on the other we are reducing demand. Both these actions have the combined effect of making a significant dent in the over-all demand for oil that ultimately becomes available to Canadians.
The next step I suggest is to look beyond the normal conventional sources to some of the more remote sources of potential oil supply. I think of the tar sands, the Beaufort Sea, the high Arctic and, of course, the heavy oils in the Lloydmin-ster area. In the meantime, until such resources are proven we must get along as net importers to the tune of some 250,000 barrels a day. We will probably continue in a net import position for many years into the future. The question we face is how to keep imports to the minimum.
What are we talking about when we refer to heavy oils? As a layman in this subject, I understand we are talking of a very thick, tacky substance which differs as much in texture from conventional western crude as day differs from night. We are speaking of a resource which, in order to be used in a conventional way, as we wish to use it, has to undergo an incredibly expensive upgrading process after extraction from the ground, the achievement of which is in itself extremely complicated and fantastically expensive. In essence, we are dealing with a quality of oil which modern scientific development enables to be extracted and ultimately used at a price which is far out of line with any cost we have heretofore

experienced in obtaining like quantities of oil from conventional sources.
The potential quantity of this oil is, indeed, impressive, so impressive that we cannot afford to ignore it in the face of the situation in which Canadians find themselves. I mentioned earlier that conventional reserves stand at between six and seven billion barrels. Heavy oils are conservatively estimated to contain 16 billion barrels and possibly as much as 20 or 25 billion barrels if we go all the way to tertiary recovery methods. At present we foresee ultimate production of anywhere up to 100,000 or 200,000 barrels per day from these various production methods. The figures I have used may be a little on the high side and be realized only in the distant future, but that is the potential.
Stated another way, the rate of production of heavy oils could ultimately cover up to 50 per cent of our current rate of imports. We are today producing in Canada some 1.4 million barrels of oil per day. Steadily decreasing resources of conventional supplies will reduce this figure to 400,000 barrels a day by 1995. By that time our over-all needs are estimated to reach two million barrels per day. Thus one can see a clear shortfall of 1.6 million barrels a day or, stated another way, we shall only be producing from conventional sources some 20 per cent at most of our over-all needs.
Therefore, unless in the next 15 years we can proceed with developments such as the tar sands, heavy oils, as well as continuing our exploration in the Beaufort Sea and the high Arctic, we shall be in a very vulnerable position at a time when world oil supplies will be shrinking in a very drastic way. There is certainly no guarantee that the problem will have been resolved by the discovery of great globs of oil from offshore.
Alternative resources are not only in themselves extremely expensive but will require dramatic lead-in periods of anywhere up to 30 or 40 years before they can be called upon to make a significant improvement in the over-all energy supply picture. What I am really saying, then, is that Canadians and the government which has duly been elected by them must show leadership in these nonconventional oil resource areas. We shall be facing very significant problems indeed if we fail to do so.
It is estimated that by 1995 some 800,000 to one million barrels per day of the then anticipated shortfall of 1.6 million barrels could be met from these new sources. In other words, if we get on with the job we could be curing some 50 per cent of the shortfall which will exist some 15 years hence. This is without giving any credit to potential discoveries in the Beaufort Sea or in the high Arctic. The reason no figures are projected in these areas is because the potential is still looked upon as simply that, and we do not have any significant proven figures available at this point.
As I have already said, we have to take action soon. The question is: how should we proceed? It is important that we waste no time in developing our heavy oil deposits. What mechanism should be utilized for this purpose? The technology is there. The heavy oil is there. How should this important new
June 20, 1978

Canadian oil resource be developed and by whom? Do we really care, Mr. Speaker? These questions have to be answered.
Allow me at the outset to state my bias in this regard. I consider myself to be as good a Canadian as any other member in this House. I believe in the strength of our country now, in its strength in the future, in its ability eventually to resolve issues relating to differing regional viewpoints across our vast land mass, in our ability to resolve difficulties arising from the adoption at the national level of two official languages, and in our ability to absorb and appreciate the benefits of a multicultural make-up.
I am sure 1 share with other members of this House pride at being a Canadian. I am proud of my country. But this does not mean that all developments in this country must be wrapped in Canadian ownership. Had this view been adopted in 1867, we would today in all likelihood be without a transcontinental railway, perhaps even an oil and gas industry. We are a trading nation and we must never forget it. Even Venezuela, from which we get a great deal of our imported oil, is an important buyer of Canadian goods at present. The Venezuelans want to continue to trade with Canadians in the years ahead and surely will do so. It is not necessary, in order to have social value, that everything must be Canadian.
What about the following situation-a situation where already over 80 per cent of our industry is controlled by persons outside Canada, by non-Canadians? Suppose that, in addition, we are facing a crisis of grave proportions. Husky Oil Limited has, I think, proved itself to be a good corporate citizen from the time of its inception some 40 years ago when it had 19 employees. What do we do, given these other parameters I have mentioned, when the Canadian corporation or its U.S. parent wants out? Should we be hiding our heads in the sand? Should we be saying: "Oh well, important resource or not, this company wants out; it is owned by non-Canadian interests so why not let non-Canadian interests replace it as new owners? Who cares about the 80 per cent non-Canadian ownership of the industry? After all, it has been there for years, so why bother?"
Well, Mr. Speaker, I believe the people of Canada do care and have cared for some time. The difficulty, as always, is how best to overcome an ownership imbalance of the present extent. My conclusion is this: an opportunity has been provided in the present instance and, in my view, it should be pursued-not at all costs but in a reasonable and rational way that is capable of being supported by the vast majority of Canadians.
This, 1 suggest, is what indeed is happening. The government-not with much encouragement or help from the official opposition, 1 must say-has created a Crown corporation to be an arm of the people in this great industry at a critical period. We were one of the last industrial nations to do so. This Crown corporation has, most properly in my view, made a bid to take over the Husky Oil Company. The company virtually controls most of the acreage in the Lloydminster area where the heavy oil play is taking place. People in my constituency and Canadi-
Natural Resources
ans at large would not want to see Petro-Can buy out Husky at an unreasonable price, unsupportable by the assets and potential on hand. However, I suggest most Canadians would indeed like to see Petro-Can actively involved in the takeover battle- as it seems to be developing-and not prepared to bow out at the first yelp from a giant non-Canadian counterbidder. That is what is taking place.
Personally, I hope Petro-Canada wins fairly and at a price supportable by the facts at hand. Alternatively, should the other bidder win-a non-Canadian corporation-it is my firm request to this government that before ever approving such a takeover it ensure through the mechanisms available to it and with approval from this parliament that beyond a shadow of a doubt the real interests of, and benefits to, Canadians are proved, perhaps in the Standing Committee on National Resources and Public Works of this House. This should be the assurance prior to any such approval being given.


Mr. Cliff Mclsaac (Battleford-Kindersley):: Mr. Speaker, I am very pleased to be able to participate in this debate on the development of heavy oil reserves. I happen to share with my friend, the hon. member for Vegreville (Mr. Mazankowski), representation of the city of the Lloydminster, Alberta-Saskat-chewan, which is the centre, geographically at least, of the Lloydminster heavy oil fields, as they have become known.
The hon. member for Vegreville spoke earlier this afternoon in this debate. He stressed, among other things, the importance of heavy oil development to that city and to that region of Alberta and Saskatchewan which will be directly affected. In that respect, as is indeed quite often the case, I share that concern with my hon. friend. We should welcome that economic development not only for what it will do in the way of reserves of oil for the nation as a whole but also for the people and businesses in our constituencies who will be involved directly and will benefit from this development.
Today's opposition motion involves a resource which has become a great deal more newsworthy and of much more concern to all Canadians, particularly those of us who represent areas where there are oil resources. The heavy oil reserves of Canada are centred around the Lloydminster area, as has been pointed out by other speakers. I am happy to say that the governments of Saskatchewan and Alberta and the federal government, despite their different interests, responsibilities and roles, have been involved in encouraging the development of these reserves as well as the exploration which is so important to learning more about this great resource.
Various figures and statistics have been put on the record here this afternoon to indicate the scope of these reserves, and it is interesting to note how in recent years the scope and importance of those reserves have changed almost from year to year. I have here a clipping from the Edmonton Journal dated October 16, 1976. The headline reads: "Husky Oil sets Lloydminster heavy oil at 12 billion barrels". Part of the article reads as follows:

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Natural Resources
Husky Oil Ltd. says the Lloydminster heavy oil deposit... contains 12 billion barrels of oil or three times the amount given in earlier estimates.
I think that is noteworthy. The article goes on to discuss additional reserves and says the following:
Additional reserves can undoubtedly be found in other sands... Husky has interests in 1.6 million acres of the three million acre area involved in the study.
Mr. Nielson-
Mr. Nielson is the president of Husky Oil.
-said it is difficult to estimate how much of the 12 billion barrels of oil in place can be recovered because of difficulties involved in producing heavy oil.
This question was discussed by my friend, the hon. member for Scarborough West (Mr. Martin) who just resumed his seat. The article goes on:
The company has operated for 30 years in the Lloydminster area and has achieved 4 per cent recovery of the oil in place by conventional or primary production methods.
1 think the last statement relative to the very low rate of recovery is another important aspect of this whole debate on heavy oil, whether that recovery is accomplished by Husky or any other company, privately owned, Crown owned or whatever. We need two things. We need upgrader facilities, but above all we need better and improved technology to get a greater and better recovery rate. Those two factors are very much involved in any discussion of heavy oil development.
I think it was the hon. member for Vegreville who mentioned earlier that the heavy crude reserves in the Lloydminster area were associated, up until the last four, five or six years, primarily with the construction industry. They were associated with the asphalt industry, whether for highways, parking lots or shingles. As a result it was largely a seasonal operation and production was geared to market demands which were pretty well localized. If we check the figures for production by Husky and other producers of heavy oil in the Lloydminster area over the years, we find that production gradually climbed to accommodate that market until 1973 when the importance of any reserve of oil became much more pronounced. The picture had changed dramatically. I suppose it also changed with the development of sour crude or heavy crude refineries to handle that kind of crude oil. Incidentally, these refineries were not located in Canada and still are not located in Canada. They have been in existence to date only in the United States of America.
That is some of the background which forms the basis for the current importance we place on these reserves and on our search to become more energy self-sufficient. As we look down the road and as we listen to the figures in this debate it becomes obvious to anyone that it is important that this country get on with developing the heavy oil reserves located in the Alberta-Saskatchewan border area.
The politics of oil in recent years have certainly been well known to all of us. I suggest that has been in a direct way because of the dramatic price increases with which we as individuals and industries have been faced in this country and in others which have been directly affected by the dramatic increase following the formation of the OPEC cartel. Mr. Speaker, I see that you are ready to call it six o'clock.
[Mr. Mclsaac.l


Mr. Deputy Speaker:: It being six o'clock, I do now leave the chair until 8 p.m.
At 6 p.m. the House took recess.


[Stage Direction]
AFTER RECESS

The House resumed at 8 p.m.
Joseph Clifford McIsaac: Mr. Speaker, just before we adjourned for supper at six o'clock I spent a moment or two emphasizing the importance, not only to all of Canada but to my part of Saskatchewan and that part of the province represented by my hon. friend who participated in the debate this afternoon, the hon. member for Vegreville, of the development of heavy oil. 1 commented on the size of the reserves and on other factors affecting their development. In that respect, a pamphlet referred to by the minister in his remarks earlier this afternoon entitled "Oil Sands and Heavy Oils: The Prospects", contains a paragraph on page 14 which, I think, sums up very well the whole picture of the heavy oil reserves in the Lloydminster area. It reads:
The range of estimates of recoverable oil could therefore give rise to ultimate total production from Lloydminster-type heavy-oil tertiary recovery projects ranging from 100,000 barrels per day to as much as 300,000 barrels per day or more. As mentioned, such development may take a decade or longer to achieve-
So we are not speaking about something that is likely to happen tomorrow or next week. It reads that that development-
-will depend heavily upon the continued successful development and application of tertiary recovery methods and will require the establishment of an economic environment receptive to enhanced recovery projects... an essential part of such an environment.
That, more or less, sums up the potential and the possibilities for Canada of that reserve.
Going back to the time of the OPEC crisis which brought all of us in Canada to take a second look, and indeed more than a second look, at the energy picture in this country, I think it was about that time when those of us not directly involved in the oil industry suddenly came to realize that we in Canada were not floating on a sea of oil, a conviction which was generally and widely held by Canadians. I am not sure it is fair to say this but perhaps this was encouraged by governments and by the oil companies themselves. That conviction was certainly shattered for us as we became more aware of the real facts and figures with respect to our oil reserves.
I say "real facts" with full knowledge that real facts are somewhat difficult to come by and to translate in that sense. It is one thing to speak about potential reserves, recoverable reserves, proven reserves, and so on, and these terms in themselves were not that familiar, I am sure, to many of us. Perhaps they lulled us into believing that we thought we had ample reserves here in the country, that we did not need to import oil, and therefore we were sitting pretty, happy with a good and cheap source of oil. But we suddenly realized at
June 20, 1978

about that time that we were not self-sufficient as a nation. We also came to realize that some of the great reserves we have here in Canada are still unproven, particularly in the case of the northern and the Arctic reserves, and that they are very costly to develop, and we have had Syncrude and the tar sands efforts to prove it. In this motion we are discussing the possibility and the potentiality of heavy oil development.
Again at that time we had it brought home to us that these energy reserves were almost entirely foreign owned by the same companies which were active in the Middle East and the North Sea and other areas around the world. As has been pointed out in the debate this afternoon, governments are in the oil business in almost every oil-producing country, and they are in it today more so than ever before.
To listen this afternoon to some of my friends from the Conservative party taking part in the debate one would think that Canada had the monopoly on a new or innovative idea or project to legislate into existence a Crown-owned resource company now known as Petro-Canada. In this particular case we were not leading the pack. Instead, as a nation we are trailing the pack in so far as the oil-producing countries of the world are concerned.
The concept of Petro-Canada is not new. Certainly it has my support. I do not share the concern of some hon. members opposite that this agency must be in conflict with the private sector in oil. The private sector must be maintained and encouraged. There is ample room for both. At this time Canada requires both the publicly owned Petro-Canada on the one hand and the private sector on the other. Much of the conflict is in the minds of some members opposite.
In 1973, 1974 and 1975 the Canadian oil industry faced some adjustments which were unique to Canada because of its federal nature. The oil industry spokesmen were quite vocal in their criticism, much of which was justified.
As a result of the dramatic rise in the world price, a see-saw developed between the federal and provincial governments over the windfall margins. One can sympathize with the oil companies which operated during the period when governments at both levels re-examined their interests in oil development, whether it be in the form of royalties, income taxes or other regulations pertaining to oil policies. One's sympathies must be tempered to some degree by the healthy balance sheets which continued to appear in the year-end reports of oil companies. The oil companies came out of that tug-of-war fairly well. Exploration activities in Alberta and Saskatchewan have increased dramatically. The results have been good. Over the last number of months the stock market has been good evidence of that recovery as well.
The motion before the House is in two parts. The first part asks for new resource developments in Canada to be majority Canadian controlled. I am sure that principle is supported by all parties in this House.


Some hon. Members:: Hear, hear!
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Joseph Clifford McIsaac: 1 have enough respect for Canadian oil companies to believe that they can do the job. We have no guarantee that development will occur otherwise. It will occur only, outside of Canadian ownership and involvement, if such development in Canada fits within the over-all, worldwide scheme of things. I am sure the plans of large oil companies are changed quite often on the basis of good businesslike decisions, rather than anything the government or the country does. That does not serve the interests of Canada in becoming self-sufficient, nor does it keep our priorities in order.
Some members of the Conservative party indicated that Petro-Can should not develop Canadian heavy oil. Others in the past have indicated that they would scrap and abolish that company. The hon. member for Northumberland-Durham (Mr. Lawrence) implied that Husky, which has a very large stake in Canadian heavy oil, has been prevented by the government from developing those great stocks and reserves. Husky has not done badly by the federal government or the two provinces involved. The management of Husky Oil has not made such charges against the government. Husky has been in Saskatchewan and Alberta for many years. It has had discussions with Petro-Can and others over recent months regarding the possibility of sale or partnerships. It is not necessary to recount the recent offers and activities in that sense; the papers have performed an adequate job in that regard. The business section of today's Globe and Mail carried several articles containing a good deal of background elaboration on these proposals.
Hon. members of the Conservative party asked how much oil Petro-Can has discovered. The question is a good one but it is not relevant to this debate. In so far as heavy oil is concerned, it is not a question of discovery; it is a question of recovery.


The Acting Speaker (Mr. Turner):: Order, please. I regret to interrupt the hon. member but his allotted time has expired. He may continue with unanimous consent. Is there unanimous consent?


Some hon. Members:: Agreed.


Joseph Clifford McIsaac: Heavy oil reserves exist. It is a question of getting a greater percentage of those reserves to the surface. It has been estimated that approximately 16 billion barrels of oil are under the 1.6 million acres which Husky Oil controls. Primary recovery of heavy oil is very low; it is 4 per cent to 6 per cent, and perhaps up to 10 per cent. Improved recovery technology is an important factor in this debate. It must proceed and go hand in hand with building an upgrader.
For Canadians to utilize the energy reserves of heavy oil, two things must happen. We need an upgrader plant or facility to handle the heavy oil, and we need improved technology for tertiary recovery of the raw resource so that we can feed oil stock into it. The federal government and the provincial government of Saskatchewan signed a $16 million agreement to stimulate research in this area. As I understand it, Husky Oil submitted an application which was later withdrawn for

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unknown reasons. Other small oil companies in the area have initiated programs to move in this direction.
The federal government must do all it can to ensure that heavy oil development takes place as soon as possible in the interests of this country. As a beginning step, the government can deal very quickly with the purchase bid by Occidental. FIRA should be able to determine, without any great lengthy study, that Occidental may have a pretty hefty cheque book but has no expertise in the heavy oil development field. Husky Oil has such expertise. According to telephone calls which I received, Petro-Can has some expertise and is acquiring more. So that expertise is available in the country.
The second part of the hon. member's motion indicates that Petro-Canada should develop Husky Oil's heavy oil reserves together with Alberta and Saskatchewan. In principle I support that, if Husky Oil does not show more determination to put forth the required initiative and drive to bring about that development than it has. I have no objection to private Canadian oil interests being involved as partners. In fact, I welcome that. When the private sector cannot or does not, for whatever reason-and there may be good reason from their point of view-develop Canadian resources in accord with the expressed national interests of this country, the question is, what is our next step?
I suggest that Husky has, indeed, had ample time to make its intentions known. I agree Husky has been negotiating, but it is my view that the company has not been sufficiently forthright in telling any level of government what its firm intention is. That is my view as an observer; I am not thoroughly acquainted with the oil industry. I just suggest that we should not wait years or even months, but perhaps a few weeks, before asking Petro-Can to continue to get on with the job, hopefully in co-operation with the private sector and provincial governments.
In that regard I want to commend the minister for his interest and the efforts he has made to bring about heavy oil development. The minister announced a $16.4 million program a year or two ago. Every budget in the last three or four years has contained steps and measures devised to encourage and bring about oil exploration and development. The most recent budget that came down, the one we are continuing to debate in the House, contains special measures for the development of heavy oil reserves in western Canada. I welcome these changes, but would ask how much more we have to do before that development takes place, or how much longer we have to wait for Husky Oil to announce its intention to proceed with the development-because, indeed, Husky Oil is a key player in this particular field.
Thank you very much, Mr. Speaker, and I thank my colleagues for allowing the additional time.


Leslie Gordon Benjamin: Mr. Speaker, I am delighted to take part in the debate on the motion of my colleague, the hon. member for Nanaimo-Cowichan-The

Islands (Mr. Douglas). This motion relates to an issue that directly affects the province of Saskatchewan and the province of Alberta, as well as the entire country.
I listened this afternoon to my friends and colleagues in the Conservative caucus making statements to the effect that Petro-Can should be disbanded and that the whole development of heavy crude oil in the Lloydminster area of Saskatchewan and Alberta should be left in the hands of private Canadian investors and companies. The hon. member for Calgary Centre (Mr. Andre) made reference to two Canadian consortiums which were prepared to make offers to Husky. I have a question that I hope some members in the official opposition will answer. Where the hell were those private Canadian investors and companies in the past when we needed them and where are they now that we need them again?
In fact, who are those two alleged Canadian consortiums? I am satisfied that a Liberal private enterprise government would not go to the length of having Petro-Can bid for Husky unless all other opportunities and sources had been exhausted. It would be the last, along with the official opposition, to get into some kind of public ownership in the petroleum industry. Surely it is obvious that the so-called Canadian entrepreneurs, private investors and companies in the petroleum industry have let us and Canada as a whole down.
The official opposition condemns Crown corporations because of the "incompetence" of Crown corporations. I notice members of that party go to great lengths in condemning Crown corporations that have usually been established and operated under the Liberals and Conservatives. The question is not so much one of whether the operation is private or public, but rather how well the operation is run and who are the people running it.
The hon. member for Calgary Centre complains about our tax laws. As a result of talking to relatives, friends and other people in the petroleum industry on the telephone in the last day or two, as well as over the years since 1947, I am convinced that since the Leduc discovery Canadian companies and Canadian investors, no matter what the ills associated with our tax laws, have done very well thank you. But that is not a sufficient excuse for an alleged Canadian consortium or company letting us down.
When it gets to the point where a private enterprise Liberal government is encouraging and assisting a Crown corporation such as Petro-Can in making bids for shares of the Husky Oil Company, this tells us something about the private sector in Canada, the petroleum industry. What is even more important is a consideration of the outfit that is bidding for Husky shares in competition with Petro-Can. I talked with a knowledgeable person today from the oil industry in Western Canada whose opinion of Occidental can be given as follows: It does not have a lot to offer; it is primarily a gas company; it does not have any particular skills in heavy crude production or refining and will rely on Husky for that expertise; and it has done no research and development in respect of upgrading or refining of heavy crude oil.
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What is also interesting is that in the deal Occidental is offering Husky it is not putting up much, if any, money. It is offering a straight trade-off of shares. 1 am sure the management or board of directors of Occidental are not stupid. They are offering to buy Husky through a trade-off of shares with no expenditure of money. They are doing this because they think there are some bucks to be made out of it, and for no other reason. 1 do not want anybody in this House to suggest to me that Occidental is making this offer in competition with a Canadian Crown corporation because management of that company has some particular worry or fear about the welfare and good order of Canadian energy supplies or the development of Canadian crude oil.
I wish the Minister of Energy, Mines and Resources (Mr. Gillespie), or his government, had made it plain some two or three weeks ago that, no matter what Occidental bids, it will not be allowed in here. I wish the minister had said: "We neither need them nor want them, and certainly in view of what that company is offering, we certainly do not need them".
There are some 2.1 million acres in the heavy crude area of Lloydminster presently held by various companies. Husky Oil holds about 1.6 million acres, 70 per cent being on the Saskatchewan side of the border and 30 per cent on the Alberta side. A few other companies hold a small number of acres each, including Murphy Oil, Mobil Oil, Imperial Oil and Petro-Can. Petro-Can bought a few acres not long ago, and Saskoil holds a few acres as well. They do not count for much separately. Husky holds the major portion of the area.
At the present time about 50,000 barrels of heavy crude are being produced for which there is a market. The hon. member for Battleford-Kindersley (Mr. Mclsaac) and the hon. member for Vegreville (Mr. Mazankowski) mentioned this. It is used for asphalt and asphalt shingles. It is actually an assured market. Even when Husky proposed late last year an upgrading and refining capacity of up to 100,000 barrels a day, during discussion with the provinces of Alberta and Saskatchewan and the federal authorities the idea all of a sudden dried up. Husky chickened out; cut and ran.
There is good reason for that. What is commonly not known is that Husky Oil does not have the needed cash flow. They do not have the muscle or the borrowing capacity to move in; otherwise they would not be considering offers from Petro-Canada, Occidental or anyone else. Husky Oil is not noted in the industry for research and development, expansion or further development of heavy crude production. They have simply been sitting on it. This may be good for the Nielson boys and the present shareholders of Husky, but I submit it is not very good for the people of Canada, or the self-sufficiency of this country which members on all sides of the House have been talking about.
From the Saskatchewan point of view, where most of this acreage is, the Husky holdings should remain in Canadian hands. From a developmental point of view, if it remains in
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Canadian hands the pace of development will be in the hands of the federal government and the two provinces concerned. If it is in American hands, however, how much incentive will those two provinces and the national government have to give them to get a good pace of development? The pace of production and development must be set at a rate which we think is best for Canada. If the ownership and control of that acreage and that production remains in American hands, we will have to pay more in order to get a pace of development in production which will suit our needs and our requirements.
For Canada to have that development, whether it is in production of heavy crude or the construction of pilot projects, and upgrading capacities of heavy crude, we must have the control to set a pace which we think is best for us and best to further Canadian self-sufficiency. Husky has refused to move. Of course, they were pioneers in the heavy crude business, and they were in it at the beginning. I gave them credit for that and for being smart in amassing a large acreage of land. But they do not have a large cash flow and they have had small growth because they have been more interested in truck stops and service stations than in research and development in the production of heavy crude. They have made no breakthrough in the area of development and their research has been minimal.


Peter Colwell Bawden: Who has?


Leslie Gordon Benjamin: None of the private sector has, Mr. Speaker. It is only now that a so-called free enterprise Liberal government has realized that the private sector, both Canadian and American, have let the country down. There have been no breakthroughs on development. There has been insufficient money from Husky to do it, and everybody in the oil industry, the two provincial governments and the national government darn well know that. The final criticism of Husky, while they were sitting on their fat acreage, is that they themselves have not developed much expertise in the upgrading of heavy crude oil. They have been sitting waiting for windfalls since 1973, and they landed one when the Minister of Energy, Mines and Resources and the government allowed their own creature, Petro-Canada, to be bounced back and forth between Husky and Occidental in a crap game which has increased the value of Husky shares far out of proportion to their real worth on the open market.
My hon. friend the member for Calgary Centre was talking before supper about the Canadian taxpayer paying for Petro-Canada. He failed to mention that Canadian consumers have paid for all the profits and the expenses, including operational and development costs. The Canadian consumers by buying heating oil or by buying gas at the pumps have paid the entire bill, so I do not want to hear any more nonsense about the private enterprise entrepreneur who took all the so-called risks. Any of them who lost money recovered it one way or another, whether it was through tax losses or profits made in some other operation. The Canadian consumer, not the Canadian taxpayer, whether or not they paid income taxes or corporation

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taxes, paid for and continue to pay for all the developmental costs.
The Minister of Energy, Mines and Resources has allowed a company owned by the people of Canada to be put into a position of having to fork over $200 million or $250 million because Occidental has got in the game. They would not know a barrel of heavy crude if it hit them in the face. This is not leadership, Mr. Speaker. This is not exercising sovereignty or nationhood. We neither earn nor deserve respect from other governments or, more particularly, from foreign-owned corporations that know they can play games with weak-kneed, lily-livered, nervous-Nelly governments. This government wants to be a little public and a little private, and they cannot make up their minds which one.
I can say for the Tories that at least you know where they stand, Mr. Speaker. As far as they are concerned, Occidental Oil is welcome to come up here; Occidental Oil can have a deal which would make you and I look brilliant, if we could have an operation like that. Occidental has proposed a scheme which says that the Saskatchewan and Alberta governments can put up $200 million or $300 million apiece on the one hand, and Petro-Canada can put up $400 million to $600 million. It works out to approximately one-third each, one-third for the two provinces, one-third for Petro-Canada and the other third for Occidental.
Let us look at what Occidental wants back for their investments. This, Mr. Speaker, is what you would call real private enterprise. Occidental would continue to retain all the rights for the primary and secondary production in heavy crude in the acreage which they have developed, which is only approximately 280,000 acres. They have about one million other acres yet to drill in. Occidental would also retain all the conventional rights. Occidental is not interested in keeping the rights of the highly expensive tertiary recovery system but they would retain everything else.
I do not know if the Minister of Energy, Mines and Resources is high-handed or easily taken, but with a deal such as that it is no wonder Occidental is offering to trade shares with Husky at $2 or $3 a share more than what Petro-Canada is bidding. In fact, if the minister rose in his place, or preferably the Prime Minister (Mr. Trudeau), and made it known publicly that no matter what Occidental does they will not be approved to operate in this country, they would save the investors of Canada.


An hon. Member:: They are already here.


Leslie Gordon Benjamin: They are not here in heavy crude, and the government could put a stop to them tomorrow. In fact, they could turn Husky into a whimpering poodle overnight, if you will pardon the expression.


Peter Colwell Bawden: Like you did during the minority government.


Leslie Gordon Benjamin: Petro-Canada's original purpose was to give the public a right to share in the oil industry growth in Canada. The governments of Canada, both Conservative and

Liberal, since 1947 have provided all kinds of opportunities for the Canadian private sector, the so-called Canadian entrepreneur, the so-called Canadian company or consortium. It is no wonder the Americans are laughing at us all the way to the bank. Those same Canadian entrepreneurs have let us down. If they are not prepared to do the job they should get out of the way and let the people of Canada do it.
This whole business between Husky Oil Ltd. and Occidental is another CPR wreck. There is nothing new about this kind of profit-taking-not honest profit-making, but profit-taking. Yet the Minister of Energy, Mines and Resources sits there on his fat acreage and fails to ask the government to give some leadership.
I am confident, Mr. Speaker, that the government of Saskatchewan and Saskoil are prepared to co-operate and to help. But we are not going to be party to a crap game in which a United States corporation can hold a Canadian corporation to ransom. The government have neglected to carry out their promise; they have neglected to carry out a part of the mandate on which they were elected in 1974.
I hope this government will remember why they created Petro-Canada in the first place. Both Petro-Can and the cabinet have agreed that rapid development of the heavy oil deposits around Lloydminster is a national priority, yet they sit around and let an outfit like Occidental mess it up, a company that has no expertise in heavy oil and which is not putting up any money for Husky Oil Ltd.
The minister has allowed Petro-Can to be put in the position where to outbid Occidental will cost another $200 million or $250 million. The Petro-Can bid for control of Husky was made about a year after Husky had made proposals to develop heavy oil deposits on its own or in a joint venture of private and public capital. Husky could not possibly succeed because it had such a small cash flow and did not have financial muscle. What alternatives did the government have? No matter what party was in power-


The Acting Speaker (Mr. Turner):: Order, please. I regret to interrupt the hon. member but his allotted time has expired. He may continue with the unanimous consent of the House. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


Marcel Joseph Aimé Lambert: Mr. Speaker, the motion before the House today gives us an opportunity to discuss a matter which divides and shows up the difference between political parties in this House. This motion is an example of the doctrinaire policy of the NDP. Socialism in the development of this country's resources of this country, whether it be at the start through a Crown company or later on through the provincial government stepping in or interfering in
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the potash industry, as it now exists in Saskatchewan, constitutes, as we have always claimed on the side of the opposition, interference in terms of the constitution on the part of the federal government in the development and control of the resources of the provinces.


An hon. Member:: What about Pacific Western Air Lines?


Marcel Joseph Aimé Lambert: When I am discussing natural resources, the hon. member for Sault Ste. Marie (Mr. Symes) comes up with a question dealing with the province of Alberta which has proved, once and for all, that we acquired control of an airline out west for the people of the west; but he knows nothing about the west. He is totally ignorant about conditions out there.
But I want to say that in today's debate we have a motion which is composed of two parts, and this implies not only what happened in the past, but also any new development of natural resources, because the first paragraph of the motion reads, and I quote:
(a) all major new resource developments should be majority Canadian controlled as promised by the government during the 1974 federal election campaign;
How can this be achieved? It is very simple. First of all, the federal government does not have the right to step into natural resource development, which belongs to the provinces. The NDP does not recognize this at all. For the New Democrats, whether socialism is federal or provincial does not matter. It is socialism anyway.

I have listened to these people on the political left talk about resources. It is just pitiful. Even before the hon. member for Nickel Belt (Mr. Rodriguez) was into short pants the Alberta oil industry was developing. He is a newcomer to this particular subject because of his age. I do not care where he comes from but he is a short pants individual.
When it came to the development of the oil industry in the province of Alberta, if we Canadians lost control of the freeholds it was because of our tax system. We have nobody to blame but ourselves. Amendments have now been made to the Income Tax Act but there is no freehold any more. The government made a great show of locking the door after the horse was stolen.
How are we to guarantee that Canadians will be in charge or have financial control of all new major developments of natural resources? Not through the doctrinaire remedy of public ownership. Public ownership has proved that it cannot get itself out of a paper bag in the development of natural resources such as oil and gas.
The proposer of today's motion is a former premier of the province of Saskatchewan. If any government was responsible for driving the explorers and developers of oil and gas resources out of the province of Saskatchewan, it was that of the hon. member for Nanaimo-Cowichan-The Islands (Mr. Douglas). Do you know, Mr. Speaker, what happened? The
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population flowed out of Saskatchewan into Alberta. We inherited valuable people from Saskatchewan. That is the way the tide turned. I recall going to high school in the late thirties before World War II. Alberta had 775,000 people, Saskatchewan had 1,250,000. What is it now? Saskatchewan can barely scrape up 900,000 people. Who drove them out? NDP administrations during the fifties drove them out. Those people came from Saskatchewan into British Columbia, and they are still coming.


Stanley Howard Knowles: They are missionaries.


Marcel Joseph Aimé Lambert: We talk about the development of heavy oil on the Saskatchewan side and the Alberta side. Where do those individuals who want to invest in this development want to go? On the Alberta side of the boundary. Where is the big development in Lloydminster? It is on the Alberta side of the boundary, not under the NDP government in Saskatchewan.
We talked about Petro-Can being able to develop this oil because of expertise. Where does Petro-Can get its expertise? It is from those people who are left over from the rest of the industry. That is what they have been able to recruit. We have indicated that Petro-Can will be the first expendable Crown corporation.


Alastair William Gillespie: The first to go.


Marcel Joseph Aimé Lambert: It will be the first to go. I know the minister very well and I know how much he knows about the oil and gas industry. It is zilch.


Mr. Bechard:: What do you know?


Marcel Joseph Aimé Lambert: I was raised in the oil and gas industry. I invite the hon. member for Bonaventure-Iles-de-la-Madeleine (Mr. Bechard) to come to Alberta and learn how to put it together.

-but I will say to the hon. member that the development of sands and oil in the Cold Lake and Lloydminster region will not survive the project considered by the government with Petro-Canada. That is infringement.

My colleague from Northumberland-Durham (Mr. Lawrence) put on record this afternoon that Husky Oil has been under the greatest pressure from Petro-Can to yield the resources. Why? Because Petro-Can wants to get its foot in the door of resource development.
The power to spend by Petro-Can is backed by the government of Canada. There is an unlimited purse. The hon. member for Nanaimo-Cowichan-The Islands has called for a public inquiry into why the shares of Husky advanced $200 million in this bidding between Petro-Can and Occidental. Petro-Can is being taken to the top. It could be taken to $1

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billion and the government would still pay. It does not have to be accountable to any shareholders. Its investment will be there.
If the federal government wants to move into the heavy oil development in the Lloydminster-Alberta-Saskatchewan boundary area, there is nothing to prevent it from a financial point of view because it has an unlimited purse, unless controlled by this House.


Some hon. Members:: Oh, oh!


Marcel Joseph Aimé Lambert: The trained seals do not know anything about the practicalities of the oil business. I have known the minister for some 30 odd years.


Albert Béchard: They must have been odd.


Marcel Joseph Aimé Lambert: I can write on the back of a dime that I have in my pocket all that he knows about the oil business.


Alastair William Gillespie: Arrogance.


Marcel Joseph Aimé Lambert: If we want Canadian investment to be in charge of our development, there is a very simple formula for it: amend the Income Tax Act in order to induce Canadian residents and Canadian corporations to invest. There I am being very definite-that they shall be Canadians. I will exercise all prejudice and favouritism on behalf of Canadian residents and bona fide companies. I repeeat the proposal I put forward with regard to the Alaska pipeline. We would utilize a measure within the Income Tax Act right now, the capital gains tax. It is greatly favoured. I would use it as a favourable weapon.
If there is to be an alternative to this Occidental-Petro-Can proposition, then we can organize as we did with the Alberta gas pipeline company and develop these heavy oils financed by Canadians. This can be done through the sale of shares, first of all uniquely to Canadians. This can be done on the basis that they keep expenditure within ball park-and I use the word perimeters, not parameters-on resource research and development. If the individual or company keeps the investment within the ball park for five years, there shall be a forgiveness entirely of the capital gains tax.


Mr. Rodriguez:: No way. Sell out!


Marcel Joseph Aimé Lambert: That includes the hon. member for Nickel Belt. If he had two nickels to rub together, he could buy into it. He might have something in his shoe.


John R. Rodriguez: Sell out! You would sell out tomorrow if the price was right.


Marcel Joseph Aimé Lambert: After four years it would be 80 per cent, after three years 60 per cent, and so on as long as they stayed within the ball park. That would be an incentive and it is what Canadians need, not the big stick of the socialists. I hope that the financing of the Alaska pipeline, or a portion of it, will be reserved for Canadians entirely, on the

basis of those in the provinces through which the pipeline passes having first crack at it and then Canadians as a whole. The people of Alberta and Saskatchewan should have this opportunity. The resources are theirs. I have not heard of the resources of Ontario or Quebec being open to the people of Alberta.


John R. Rodriguez: That does not mean they should not be.


Marcel Joseph Aimé Lambert: There could be ownership on a secondary basis. There are provincial governments which consider Canadians outside their provinces to be some kind of foreigners, and that is an attitude we must get rid of. God knows, we need to develop some of these resources.
However, I am not concerned about wailing Willies who say that by 1985 we shall be out of conventional oil. No way. Hon. members need only look at the last issue of "Oilweek". Let them read the figures of Canadian well completions. In 1977 there were 2,022 total completions of which 1,266 were gas wells, 224 were oil wells and 532 were dry. That is in Alberta. There were a bare 300 wells in the rest of Canada. Saskatchewan had 118 wells in 1977 to this date. Now look at the figure for the current year. In Alberta 243 oil wells have been completed besides 1,037 gas wells, for a total of 1,804. There were 524 dry wells which, incidentally, have to be paid for- they do not come off any money tree notwithstanding the New Democratic Party. In Saskatchewan 153 wells were completed, 104 of these being oil wells.
I invite hon. members to turn their attention to the rig activity. On June 7 there were 158 rigs working, 15 in Saskatchewan and 213 in the rest of Canada. Incidentally, Ontario had 20 drill rigs working; maybe that is something the hon. member does not know.
What we must do today is encourage Canadians to invest in these drilling companies, in exploration companies, in development companies and to do so by offering incentives. After all, control of the industry was assumed by the Americans by reason of incentives incorporated into the U.S. tax system- incentives which we did not enjoy. It was pitiful to see American land men moving against Canadian land men on freehold. They could always outbid them.


The Acting Speaker (Mr. Turner):: Order. 1 regret to interrupt the hon. member but his time has expired. He may, however, continue with unanimous consent.


An hon. Member:: No!


Mr. S. Victor Raiiton (Welland):: Mr. Speaker, as usual, the opposition day dedicated to Petro-Canada, Husky Oil and the heavy oil deposits in Alberta and Saskatchewan focuses on a few features which I would like to name. First is the role of Petro-Canada in the Canadian energy picture and the socialistic imputations of the NDP demand for government takeovers. Second is the ability of FIRA to determine a foreign take-over bid in terms of being likely to help Canada, and third is the suggestion in the motion that we should make sure
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50 per cent or 60 per cent of the capital in all the take-overs or branch plants here is Canadian. Finally, there is the whole question of a branch plant economy in Canada.
The hon. member for Nanaimo-Cowichan-The Islands (Mr. Douglas) gave an excellent speech today. He fears the eventual economic absorption of Canada by the United States of America. Like many of us on both sides of the House, he wants to see this country's natural resources completely under Canadian control. Everybody would like to see that if possible. But to underline, as he did, that the oil companies get 95 per cent of equity, sales and profits is to tell only half the story. Mr. Speaker, the provincial and federal governments get a great deal more out of a barrel of oil produced in Canada than do the oil companies.
This, of course, is due to taxes and royalties. After all, income tax is charged against Canadian-owned and United States-owned branch plants alike. Then, of course, the branch plant pays income tax again to its own government. There is an implied criticism of the government for not ensuring that the 50 per cent or 60 per cent investment clause is enforced. Mr. Speaker, investments made by Canadians are free to go anywhere. There is no mandatory requirement for investment to be made only in Canadian securities and companies. In fact, to recall all our foreign investment and to force all Canadian capital into Canadian enterprises could only be done by an authoritarian or Marxist government. What is more, it would limit and cramp the flow of capital and affect international interdependence and our foreign trade balance. In a short time we would be financially worse off.
As the minister said in his speech today, Canada has 14 principles for the guidance of foreign companies operating in Canada. Two of them require the companies to operate in Canada's interests, and to enable Canadians to buy into such companies because private capital was not in great enough supply to ensure sufficient Canadian representation. For that reason Petro-Canada was given certain exploration rights and opportunities to buy into firms where only a minimum amount of Canadian money had been subscribed.
Despite the charge by many nationalists that Canada is only a branch plant economy, we still do very well in our foreign trade balance. It was said recently by the Minister of Finance (Mr. Chretien) in this House:
Canada has shown a positive trade balance for the last 17 consecutive months whereas in the U.S.A., which invests heavily in Canada, the foreign trade balance has been adverse for 32 months.
That is almost twice as long as Canada's favourable balance has lasted. So I suppose if we were a socialist state-and I hope to goodness we never are-we would take over or nationalize foreign companies in Canada just as is done in Venezuela or Saudi Arabia. Those are not socialistic states, of course; they are authoritarian. We could even demand that branch plants, after a period of time, be given the right by their foreign parent to compete for domestic, United States and foreign markets and, equally, initiate their own research and development. I believe that eventually this would be a good policy to adopt.
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I would very much 'ike to see all branch plants doing their own research and development eventually, but that would be Utopia. It is, though, a possible target to bear in mind. The fear that Occidental would not operate in Canada's best interests seems to me to be unfounded because the American capital and profits would have brought much revenue to provincial and federal governments.
The concept of Petro-Canada must be much better understood than it is. The corporation was created for more than one reason. At the time of its inception exploration for oil and gas, which is almost completely in private hands, had begun to wind down. Drilling rigs were moving to Venezuela, the Gulf of Mexico or to the North Sea. Canada was importing several hundred thousand barrels of oil daily at an almost quadrupled world price. The prospect of serious energy shortages in the 1980s emphasized the need for energetic exploration and development of our oil and gas resources on the prairies, in the Arctic and offshore on our eastern continental shelf. In other words, Canada needed to become self-reliant, if not self-sufficient, in energy. It goes without saying that our oil, gas and coal, which are present in large quantity, must all be developed before renewable energy resources come on stream because of the time lag in their technical application.
I would like to refer to a speech made by the Hon. Donald Macdonald on March 12, 1975. In that speech he said:
The best way to secure a Canadian presence, a rate of development consistent with our national interest, a proper share of the income generated by such activity and full access to new technology, is by a direct government involvement in key ventures through a corporation which can develop the necessary expertise. Our national petroleum company would then be in a position to act as a catalyst for succeeding projects, assisting in their planning and financing as well as participating ultimately in their revenues.
Part of our national energy policy is to keep costs to the consumer fairly equal from east to west and also to keep the Canadian price below the world price. It cannot be too far below or our income from taxes, royalties and duties will not allow the revenue from our own resources to ensure continued exploration and development in our costly Canadian geographical position.
The "rip-off' argument, which is that we are determined to raise Canadian oil prices on July 1 in spite of the freeze by OPEC, is not substantiated. Our Canadian crude oil price will still be $2.50 below the world price, even with the increase of $1 a barrel. We will still be well below Washington, London and Paris in our cost of heating oil. Even if the price of our gas is not lower than the U.S. price, it is about the same, and at least our supply will continue for a much longer time, while the future for American gas consumers is rather uncertain.
So it has been Petro-Canada's strategy to become interested in diverse fossil fuels. There are huge deposits of coal present in Nova Scotia, B.C., Alberta, Saskatchewan and also in the Arctic, for instance, on Baffin Island. A major intention is to develop coal as a substitute for imported oil-many oil companies are diversifying like that-or as a supplement or to assist as a fuel in extracting more oil from both the heavy oil

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deposits and the tar sands themselves. Eventually coal will offer great potential for electricity generation. Many new technologies are becoming practical, and combinations of coal powder and oil may soon be in use. Eventually coal may be liquefied and produce methanol and low Btu gasification.
Right now Petro-Canada is taking a leading role in evaluating our northern oil and gas reserve potential. By far the largest proportion of the country's oil and gas resources is in the far north. This becomes one of the most important tasks now laid on the shoulders of this national oil company. By 1990, 45 billion 1975 dollars will have to be spent on exploration and development in our frontier region. The role of Petro-Canada is very important. It is easy for many of us on both sides of the House to understand this frontier exploration and its importance because the Standing Committee of National Resources and Public Works toured the tar sands, the Mackenzie Delta, the high Arctic and Alaska. It was a very memorable trip which contributed greatly to our understanding. There is now increased interest on the part of the Canadian people in our frontier resources.
Recently Petro-Canada became interested in coal as well as oil and gas because of significant discoveries. There is now the promise of significant fossil fuels offshore in the Greenland-Labrador-Newfoundland triangle as well as on the Grand Banks, the Scotia Shelf and in the Gulf of St. Lawrence. Without the leadership and intense effort exhibited by Petro-Canada, these resources might lie dormant and unexplored for many years.
This agency is not entirely profit-motivated. Although it is happy to increase its earned income, it is principally a government corporation bent on finding fuel reserves of many kinds which will insulate us from future early disappearance of our national energy self-reliance, and it will provide catalytic action in technology for refining and supply.
Finally, we on the government side are intensely interested in the orderly development of our fossil fuel reserves. We intend to use Petro-Canada to fulfil its function in petroleum supply, in exploration of our frontiers and in development of the very unique technology required so that we can use our gas, oil and coal properly. These fuels are in abundant supply. All that is needed is leadership. This, I can truly say, is being provided by this government and its energy agent, Petro-Canada.


Peter Colwell Bawden: Mr. Speaker, we have heard many statements tonight, including statements from hon. members to my left, and one of the things about the remarks of the hon. member for Nanaimo-Cowichan-The Islands (Mr. Douglas) which struck me, was his statement that Canada has done many great things in the past. There is no doubt that Canadians have done much in the past of which they can be proud, but I think it goes almost without question that the things which have been done by Canadians in the past have been done by the private sector. They have been done by free enterprise. It was the private sector which built this country.
[Mr. Railton.l
I do not think any of us can point with pride to anything which the Government of Canada has been involved in, created or is presently involved in. We only have to look at Atomic Energy of Canada Limited. What a sorry example! If the government would concentrate on delivering the mail, it probably would be taxing its abilities, and that has been proved.
We are discussing the question of foreign ownership of petroleum reserves in Canada. Surely it is better to have reserves in Canada which are foreign owned, if necessary, than to import foreign owned crude from other lands where supply is not secure. Surely it would be better to have crude oil produced by Occidental Petroleum, Exxon, or any other company, for that matter, coming from Alberta wells than crude oil coming from those same companies in Libya or the Middle East. Heavy capital needs are a fact of life in the petroleum industry, and in my view it is immaterial who owns the reserves. The vital question is not whether a company is French, Canadian or American. The vital question is whether we have supplies of oil for Canada's future. Because I do not think for one minute that even a member of the NDP would turn down a barrel of oil, if that is what is required to heat his home, or a cubic foot of gas just because it carried the label of an American company. When it gets right down to supply, even members of the NDP would be just as anxious to have a foreign label as a Canadian label. I do not give a damn, and I do not think Canadians should, about who owns the oil. I think the crux of the matter is whether we have it.
In spite of that, I do not think there is any question, and Canadians have always said they want to own as much of their own oil as they can. That was well stated by my hon. colleague who spoke last. However, the tax laws of Canada have prevented Canadians from owning this important resource. Only recently and at the urging of this party did the government finally cave in and make rules to encourage Canadian capital. That was a little late, and that is the reason we now face the fact that a large percentage of our crude oil is owned by foreign companies.
We also heard from the hon. member for Nanaimo-Cowichan-The Islands that we have only a ten-year supply. If the matter of future supply is so critical, it seems to me that if Canadians were given incentives and had the good sense to go out and explore for oil, they could provide supplies for beyond 10 or 15 years at a time when present supplies are dwindling seriously.
Another statement made by the hon. member for Nanaimo-Cowichan-The Islands was that Canada's oil reserves are not in the control of Canadians. There is no other industry in Canada that is more controlled than the oil and gas industry. The producing rate is controlled by the provincial governments; the price is controlled by the federal government; there is presently an export tax-the federal government takes the difference between the world price and the fixed Canadian price; the royalties are set and collected by provincial governments; income tax, through depletion allowances and tax rates,
June 20, 1978

is collected by the federal government. Also transportation tariffs are set by the federal government; pipeline construction routes and approvals are dictated by the federal government; companies under the new petroleum monitoring act, which this minister is trying to have passed, will have to report to the government on what they did with their income and they will have to prove that it was spent on finding new reserves; the sales tax on gasoline is payable to the federal government and to the provincial governments on gasoline that is sold, and this amounts to something in the order of $5 a barrel; and finally, it is the right of this government to determine through the Foreign Investment Review Board whether the reserves or shares of a company may be sold to those outside of Canada. So there is no question that Canada controls its oil and gas. It always has and there is no reason to think this is going to change.
When it comes to the rewards for oil and gas that is produced-and this was stated in a report put out by the Canada West Foundation Study-taxes and payments to all levels of government now represent approximately 70 per cent of the mineral resource industry's pretax profits, compared to 53 per cent five years ago. Any oil man with good sense who owns all the land and has all the royalty rights would much prefer to farm out his land to someone who would put up the risk dollars and give to that owner 30 per cent. 1 can tell the House that that is a very good deal for investors, and it is on the basis of the government not putting up risk moneys but just sitting back and collecting what is its due under our terms. Incidentally, this is comparable with or perhaps better for Canada than the situation in most countries where foreign oil companies go to search for oil and gas.
Let us look at the specifics of the motion, which states that the development of Husky Oil Company's heavy oil resources should be undertaken by Petro-Canada in co-operation with the provinces directly affected. In the past-and I guess it will be the same in the future-when socialists have seen something big which worked, they wanted to nationalize it. I have heard a lot said about Husky Oil tonight. The hon. member for Regina-Lake Centre (Mr. Benjamin) made many serious allegations about a company which would be regarded by most as a good company and a good corporate Canadian citizen. When I arrived in the city of Edmonton from the Peace River country in 1952, Husky was one of the big names in heavy oil development at that time. They were drilling wells, they were building rigs, they were getting their refinery going, and that was 25 years ago. Since then others have come into the picture, but this company has pioneered in heavy oil development. They just happened to have the foresight or the luck to be today in the right place at the right time.
The minister is blaming energy shortfalls on all kinds of things, but the fact of the matter is that it is his responsibility. This government has done more to inhibit oil and gas exploration in recent years than any other factor in the realities of the Canadian oil and gas industry. More momentum has been lost and more rigs have been moved out.
Natural Resources
The setbacks caused by the two or three years of confrontation which was provoked by this government have been a big factor in lost reserves. The momentum has now returned, but I can tell hon. members that the losses experienced in those three or four years will never be regained. The Husky poker game is just another factor that has caused loss of confidence among investors in the Canadian oil and gas industry. Maybe it is the government's policy not to want Americans to invest in our oil and gas industry. Or that may be the policy of the NDP. But if Canadians do not have enough capital or resources to develop our reserves, I say we should invite foreign capital to assist and participate in this with us.
However, the government is trying to solve through its instrument, Petro-Canada, a problem that it has created itself. The government seems to go around creating problems so it will have something to solve. If we look at the problem which faces the Husky Oil Company, we find that it is a pretty serious one. The government is concerned because Husky Oil is not moving fast enough; but in every business plan and in every equation you must have all the squares and all the lines filled in, and there is a big X in the equation of anyone who wants to build an oil plant and extract heavy oil or, as in the case of Husky, build an upgrading plant.
This big X results from a number of considerations. The first is uncertainty of market. There is no guarantee of market. This is something for which these companies have been asking for some time. There is no certainty of price. These companies have sought the world price because everything is founded on that price so the capital investment can be made and the return on the investment realized. There is no royalty regime in the provinces of Saskatchewan or Alberta. How could anybody build a plant and plan to produce oil at very great cost and with heavy capital investment if they do not even know what the royalty will be? Presumably the federal initiatives in one of the Turner budgets which made royalties paid to the provinces non-deductible as an expense-in other words, companies paid tax on something they did not get-is still a matter that has never been resolved. When it comes down to financing a plant, it is not simply a question of whether the company wants to puts its money into the project but rather whether the bankers want to put their money into it. This is not dictated simply by oil company executives or by boards of directors, but by bankers. Nevertheless, governments are the problem-no royalties, no rules, no price.
I suggest that no other company could have put this together. Husky Oil Company is probably the most prominent in making frequent visits to this city and in dialoguing with members of the House in its attempts to keep us abreast of what is going on and what their problems are. I suggest, quite differently from my colleagues in the NDP, that Husky has been a good citizen, and I am very surprised to hear the hon. member for Regina-Lake Centre say that they are too small a company to carry out this project. Certainly it is a big project and I suppose that what the NDP expects is bigness; but I think it is important in our country that small Canadian

June 20, 1978
Natural Resources
companies carry out and finance these projects. We are not all for bigness. Our small companies must also be able to do this.
Now we come right down to the question of solutions. I say that it is the minister who has failed to give us the solutions, and it is the minister who should have brought the parties to the table to sort these problems out. He should have brought the companies, the provinces, the federal government and, if necessary, Petro-Canada to the table to solve this problem, not have a confrontation.
A purchase by Petro-Canada achieves nothing except the fact that some $300 million to $500 million will go out of Canada at a time when our exchange rate is low. When the former minister of energy, mines and resources introduced his bill, he said, as reported in Hansard for March 12, 1975:
This bill is a most important element in the government's long term planning to secure adequate supplies of energy to meet our national needs. It is firmly rooted in the basic objectives of our energy and resource policies which are, to ensure for Canadians adequate and reliable supplies at reasonable prices-
Most people knowledgeable in the industry say that the way to achieve reasonable prices is to have some experts, some keen minds, figuring out where to drill and how to get this oil out of the ground, not to buy oil. Purchasing oil from others results in high cost oil. Those who took the risk and found oil obviously want more money. This does not seem to be included in what Petro-Can was originally asked to do. However, the emphasis by the minister and the government at that time was on future supply of oil and gas. This transaction, which involves a very large amount of money, does not find or produce for Canadians one single barrel of oil.
Perhaps an additional offer will be made by a Canadian company for the shares of Husky. We will have to wait and see. In the meantime, I propose that the government should urge the partnership of Occidental and Husky to come before the Foreign Investment Review Board so they can put forward their proposal. We must see what it is. Presently it is cited as a plan of significant benefit to Canada. If it is of significant benefit to Canada, and if their proposal contains any realism, surely their plan will provide the upgrading plant, the well drilling and the facilities in order for this project to go ahead.
The oil and gas industry is founded on partnerships. Very seldom does any company go it alone. The reason for partnerships is that the capital amounts required are too large. Even Petro-Canada cannot go these things alone. Since billions of dollars are needed, the solution is partnership. Perhaps Petro-Canada has a role to play. It has an interest, and it has capital. As has been said, this company, Husky, is a small one. One of the objectives of Petro-Canada was to assist smaller companies in participating in these things. Here is their chance.
The minister should come forward, take the lead and take the initiative to bring the provinces to the bargaining table. The royalties must be sorted out. Petro-Canada cannot sort out the royalty problems of the provinces any better than Husky can. Petro-Canada is the catalyst to make all this happen. I hope we hear from the minister and the Prime

Minister (Mr. Trudeau) soon. The time is now. The lead time is long and our time is short. We will run out of oil in the 1980's. The absence of leadership and horrendous internal battles accomplish nothing. These battles direct the energies of people toward infighting in Canada, rather than getting on with the job of finding and producing the oil we need.


John R. Rodriguez: Mr. Speaker, I am very pleased to take part in this debate tonight. I am glad my chance has come after listening to the oil lobby.
I was somewhat confused today when I heard the contributions of hon. members of the Conservative party. The hon. member for Calgary Centre (Mr. Andre) said that there are two Canadian consortiums waiting to develop the Husky project. Where are they? Where have they been? I suspect they are like Moses, hiding in the bulrushes.
The hon. member for Edmonton West (Mr. Lambert) said that when the Tories come to power they will disband Petro-Canada. The same thing was said by the hon. member for Calgary Centre. The hon. member for Calgary South (Mr. Bawden) said that Petro-Canada should be put into the picture. These stories have more positions than the Happy Hooker. I cannot keep up with them.


An hon. Member:: Did you read the book?


John R. Rodriguez: My book was autographed. Earlier this afternoon the hon. member for Northumberland-Durham (Mr. Lawrence) indicated that past governments have created the problem. He ought to know. He was the minister of mines and resources for Ontario over a long period of time. In his run for the Tory leadership he was defeated, and now he participates at the federal level. We know what he did for the nickel industry. We know the kind of deals he allowed Falconbridge to participate in. That company continued to ship raw materials to Norway for processing. We know the kinds of deals he was into. I am not surprised we are faced with this mess.
The hon. member for Edmonton West blamed Saskatchewan socialists for not being able to develop the resources of that province. Well, the socialists are still in power in Saskatchewan. It was the government of the hon. member for Nanaimo-Cowichan-The Islands (Mr. Douglas) which said to the gas companies, "Move over, boys". It was his government which effected the delivery of gas to hundreds of rural communities. His government supplied electricity to hundreds of farms in Saskatchewan, while the private sector was indicating that it could not be done because it was unprofitable. We keep on hearing that same argument.
I was amazed when I saw the Latin inscription on the emblem for Ontario Hydro. The other day when I was at the provincial legislature, I noticed that emblem. It read as follows: "Dona Naturae Pro Populo Sunt". The translation of that is: "To the people belong the resources". I have never heard truer words spoken. Ontario Hydro is an efficient operation. It came into being because of a Tory government.
The hon. member for Edmonton West said that the Petro-Canada intervention into the Husky Oil deal is a government
June 20, 1978

intervention into the private sector. When Peter the Red intervened in the airline business of Alberta and bought the controlling interest of Pacific Western Airlines, no one said that he was a socialist. We all know him as Peter the Red. He recognized a good deal when he saw one. He recognized that the interests of Albertans had to be placed over and above the narrow interest of profit.
The hon. member for Northumberland-Durham indicated that three options were available. One option was that Occidental should take over the company, which he was against. Of course, we are opposed to that idea as well. Then we proposed Petro-Canada ownership of this operation, and he did not agree with that. I am glad the Tories are on the side of the capitalistic oil companies. I am glad they are putting themselves in that spot. The hon. member indicated that there was a third alternative, that is, to get private Canadian entrepreneurs into the operation. Where have they been? Why have they not come forward and made an offer in order to become involved?
That brings me to the gutless wonder who is in the portfolio of the Minister of Energy, Mines and Resources (Mr. Gillespie).


Some hon. Members:: Hear, hear!


John R. Rodriguez: If it is in the interests of Canadians, as far as Petro-Canada is concerned, for it to become involved in the heavy oil processing operation, why do they not expropriate the company at $45 a share? Somewhere down the road it will become essential for Canadians to have this oil. An investigation ought to be conducted into the mismanagement of Petro-Canada. If it was so essential for Petro-Canada to become involved, why are little handsy-pansy games being played? Why are Canadian taxpayers being taken to the cleaners? The price of a share has now escalated to $52.
There is a principle involved here, and I think it is that principle described in that latin inscription on the coat of arms of Ontario Hydro: Dona Naturae Pro Populo Sunt. That is the crux of the matter. The question is how we view the nonrenewable resources of the country. This involves an important concept. The minister can do all the grinning and smiling he wants. We saw him smile right through the crisis of the Inco and Falconbridge layoffs.
There is a principle involved in respect of non-renewable resources and how we as Canadians view those resources. We on this side of the House happen to recognize that these non-renewable resources represent the key to sources of wealth for future generations of Canadians. In fact, how those resources are used not will determine to a large extent the way in which we are going to conduct our lives in the future.


An hon. Member:: Our national heritage.


John R. Rodriguez: There is one thing I have never failed to observe, having lived in the Sudbury basin for some 16 years, and it has followed a regular cycle. The wealth generated by
Natural Resources
those non-renewable resources in Canada is not used for the benefit of Canadians but to extend the wealth of the corporations which have exploited those resources.
It was not surprising, for example, that in 1973 when Inco made some $300 million profit after taxes it used its profit to diversify its operations. Inco bought itself a battery company in the United States, ESB. That is the nature of the capitalist system. That company could not give a damn about laying off 2,000 Canadians in the Sudbury basin. That was not the important matter. The important matter was the extension of the corporation's diversification to increase the size of its empire. That company plans with the interests of Inco and its shareholders in mind.
Let me put the same question to this government. Does it do any planning, and whose interests does it have in mind if it has any plans? This brings us back to the question surrounding non-renewable resources. It seems to me there is only one way to guarantee that the revenues derived from non-renewable resources in this country are put into developing the way of life of Canadians and providing the services for which Canadians have a need, and to which they aspire, and that is through public ownership of those non-renewable resources. There is no question in my mind whatsoever about that, Mr. Speaker.
We have also heard that the private operators, Occidental and Husky, are proposing to put up some money in partnership or in tandem. That is not their main proposal. They are prepared to put up some money and then invite the governments of Saskatchewan and Alberta to come into the operation. It seems to me that in the final analysis it is clearly the taxes of the people of Canada which are somehow drained off and used by the private sector for its risk operations.
We all heard the hon. member for Calgary Centre say he has no use at all for public investment. It seems to me I recall that when we were in that great crisis of 1973 and the private sector discovered it could get into the Syncrude operation it came to the federal government for $300 million. Did the federal government obtain any ownership in this regard? The private sector then went to the provinces of Ontario and Alberta and asked them to put up some of the money. It then turned around and said this was too big an operation for little companies and that governments should give financial support.
This is all rather strange because at that time we were being told we had to let the private sector carry out these operations because that sector has the required capital resources. At the same time I find that this government is lending through the Export Development Corporation billions of dollars to multinational corporations in order that they can extend their tentacles into places with such exotic names as Guatemala, The Philippines, Indonesia, Chile and Namibia. Surely there is ample opportunity to invest Canadian taxes in resource development to the benefit of the Canadian public.
We know that the Prime Minister went on record during the 1974 election campaign as promising that we would work toward 50 per cent, preferably 60 per cent, ownership of any new resource development in Canada. That started out as a promise in 1974. We all remember the other promises-for

June 20, 1978
Natural Resources
example, that we would have no wage controls. You remember that, Mr. Speaker, as well as the other promise that he would put public funds into the development of public transportation. He promised Toronto would get $160 million or $200 million. That election is over and it looks like we are into the fifth year of that five-year mandate, and these election promises are now forgotten. Of course, things are different now. The former Conservative member for Crowfoot (Mr. Horner) has crossed the floor. I think he is a Conservative Trojan stocking horse. 1 think the Tories have planted him on the government side, because we now see all that Tory philosophy emptying out of the belly of this Trojan horse.


An hon. Member:: You have the wrong part of that horse.


Some hon. Members:: Oh, oh!


John R. Rodriguez: That hon. member is now sending memos to his cabinet colleagues. He is saying: "The Prime Minister promised us 50 per cent, preferably 60 per cent, public ownership. Fellows, let us forget about that. This is a hot potato and it is better forgotten. Let the dead bury the dead". He suggests that if they do not talk too much about this the public will not remember the Prime Minister's promise.
We are telling the nation now, because we are on television-


An hon. Member:: No you aren't. The lights are off.


John R. Rodriguez: The lights are not off until 10:30, brother. The lights in Nickel Belt are on right now. They haven't put the lights out there yet because we have Ontario Hydro. Thanks to the example set by the CCF government of Saskatchewan, Ontario Hydro decided to electrify the rural areas of Ontario. Maybe we are even doing it with potash.
We know hon. members over there would like to forget about that promise. We are saying right now that the Prime Minister has forgotten that promise, and he has backed away from another promise. He has backed away from the promise to develop, from here on in, all Canadian resources with 50 per cent, preferably 60 per cent, Canadian public participation.


An hon. Member:: Horner says we won't weep tears for the passing of Petro-Canada.


Some hon. Members:: Oh, oh!


John R. Rodriguez: He is still a Tory, the hon. member for Crowfoot, and he sent that memo to his fellow cabinet members, that we should not weep tears for the passing of Petro-Can. I guess he can again shake hands with the hon. member for Edmonton West, the hon. member for Calgary Centre and the hon. member for Northumberland-Durham.
One thing we in this party felt we had obtained during the tenure of the minority government was the promise to establish a Canadian petroleum corporation owned by the Canadian public; a corporation that would get itself involved in the ownership of the petroleum industry from the wellhead to the gas pump. We in this party figure that that was one of the

positive results of the minority government. The other one was getting Thomas Berger appointed as commissioner of the Berger inquiry.
The next thing would be for Canada to get itself involved in the heavy oil development which is going to be needed very much down the road, especially since we can see the cost rising to $25 a barrel. Obviously Husky has sat on these resources and has not had the capital to develop them. Canada now has an opportunity through collective taxes to develop this nonrenewable resource for the benefit of Canadians-not for the benefit of the boys in Texas, not for those privateers that sit to the right, those so-called minions of the corporate oil sector.
1 have had occasion to be in committee with the hon. member for Edmonton West when he huffs and puffs and blows himself into a great big ball to defend the corporate sector.


Leslie Gordon Benjamin: Oil maggots.


John R. Rodriguez: The hon. member for Regina-Lake Centre calls them oil maggots. I would not be so unkind as to call them oil maggots, because what they have is a very pliant government that takes the attitude that if rape is inevitable, lie back and enjoy it. If the government had any courage at all- and I would hope that they have some courage-they would say, "Here is an opportunity for the people of Canada to get involved in the ownership of a non-renewable resource". Since the minister considers that a desirable objective, I suggest to him that he quit pussyfooting around and expropriate the resources of Husky at what was the first offer, $43 a share.


Peter Colwell Bawden: What about the Canadian shareholders? You are not worried about the little holders of shares.


John R. Rodriguez: I just heard, Mr. Speaker, the hon. member for Calgary South mention the little shareholders in Husky. That is a perfect example-


Mr. Deputy Speaker:: Order. Order.


An hon. Member:: There is the loss to the little old ladies in there.


Mr. Deputy Speaker:: Order. 1 regret to inform the hon. member that his allotted time has expired. He may continue with unanimous consent.


Some hon. Members:: Agreed.


Some hon. Members:: No.


Mr. Frank Maine (Parliamentary Secretary to Minister of Public Works and Minister of State for Science and Technology):: indeed, Mr. Speaker, we are very lucky to have this motion which was brought forward by the hon. member for Nanaimo-Cowichan-The Islands (Mr. Douglas). I doubt that he realizes the favour he has done the House and the country in exposing the Tory party for where they stand and what they
June 20, 1978

really are. The official critic for the official opposition has said they do not want Petro-Canada, they do not want Occidental Petroleum, they do not want anything. He merely stands there with his face hanging out and says, "We want nothing". That is their policy-do nothing.
His colleague, however, the hon. member for Vegreville (Mr. Mazankowski) says, "We do not want Petro-Canada, but Occidental Petroleum, we could get along with them." In true Tory fashion they cannot agree among themselves what they do or do not want. To do nothing or not to do nothing; that is their question.


Steve Eugene Paproski: That is a great remark.


Francis William (Frank) Maine: The most important matter was not raised by the Tories at all, the question of research and development. It had to be raised by the NDP, one of the truly good contributions the hon. member for Regina-Lake Centre (Mr. Benjamin) has ever made in this House. But what is the Tory stand on this situation? Once again, they cannot agree among themselves. Their leader says they want 2.5 per cent of the gross national product to be devoted to research and development. The hon. member for Calgary Centre (Mr. Andre) an ex-university professor in chemical engineering at the University of Calgary says, "We don't want research and development in Calgary, we want research and development in California where Occidental Petroleum is." Petro-Canada intends to put its research and development centre in Calgary.


Peter Colwell Bawden: Who said that?


Francis William (Frank) Maine: Now I hear the hon. member for Calgary South (Mr. Bawden), who has been often called "the hon. member from Houston." The constituents of Calgary South have sent him here to Ottawa, but how does he represent his constituents? He does not want to see a research and development centre in Calgary, he does not want to see jobs created there for the university graduates that the whole innovation spectrum creates. He does not want to see that happen in Canada, he wants to see it happen in Texas or California.
The oil companies which are over 90 per cent foreign owner-controlled say they are quite happy doing their research and development in Houston and they do not intend to do it anywhere else. In other words, to hell with Canada. That is the Tory position if they support that policy. The two members from Calgary, Calgary South and Calgary Centre, are following a policy which is not representative of their constituents nor supportive of their leader when he says they would like to have 2.5 per cent of the gross national product devoted to research and development. I ask you, Mr. Speaker, how can you increase research and development in this country when you support having it done in Houston or California?
This has occurred before in the oil sands in Alberta. The Great Canadian Oil Sands Company has done all of its research and development, not in Fort McMurray, Edmonton or Calgary, but in Philadelphia. This is the policy the official opposition supports.
Adjournment Debate


An hon. Member:: They don't even have any sand down there.


Francis William (Frank) Maine: The National Research Council developed a spherical agglomeration process which is able to separate the oil from the tar sands in a more economical way which is now being scaled up in Calgary. This government is responsible for creating these jobs in Calgary, but the official opposition does not support this job creation which is so essential to the future of our country, to our industrial economic climate and to our competitive capability in the international marketplace. They would rather see these jobs go to California, Texas or New Jersey.


An hon. Member:: That's bunk.


Francis William (Frank) Maine: That is the Tory policy-"bunk", in capital letters.


Alastair William Gillespie: They can agree on nothing.


Francis William (Frank) Maine: I just did not think the Tories could be so stupid as they have been tonight. I just cannot believe that a matter so crucial and so important to this country, research and development, which is needed to increase our industrial capability and to help the free enterprise system work, would prompt the response from the hon. member for Calgary South of: "Let free enterprise do it." How much money has free enterprise devoted to research and development in this country? This government is constantly having to stimulate and goad them and write letters to their parent companies in the United States. Still, they ignore the question. It is true that the automotive industry is carried on in Detroit, and it is true the Tory party would like that trend to carry on in the oil industry.


Mr. Deputy Speaker:: Order. It being ten o'clock p.m., it is my duty to inform the House that, pursuant to section (11) of Standing Order 58, proceedings on the motion have expired.



PROCEEDINGS ON ADJOURNMENT MOTION

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

Mr. P. B. Rynard (Simcoe North):: Mr. Speaker, on June 8 1 asked the Minister of National Health and Welfare (Miss Begin), in view of the loss of almost 4,000 doctors from Canada during the years 1967 to 1977 and with increasing losses possible for the future, what plans she had to rectify the situation so that she could assure the Canadian people there will be a sufficient number of doctors graduated to meet, not

June 20, 1978
Adjournment Debate
only the present medical care level, but also the increasing care level of an aging population which requires more geriatricians all the time. Those 60 years of age and older require three times as much health care as they did at 35 years. Added to that is the earlier increase in cardiovascular disease, cancer, diabetes and other medical problems. Thus more physicians are required.
1 would also like to ask the minister how she expects to keep up the quality of medical care when among those leaving are well-trained professional men, such as teachers and scientists in whom millions of Canadian dollars have been invested in training. Now this knowledge and experience is going south of the border to be an asset there. Many leave with at least two or three decades of earning power before them. That is a prospective $3 million or $5 million, depending on their training. Taking the middle figure of $4 million and taking the minister's figure of 650 doctors emigrating-instead of my own which is much higher-it means that we are giving about $2.6 billion to the United States every year.
Canada simply cannot afford to present those billions of dollars to the United States even though that country is our friend. We do not have the money to enable us to play Santa Claus. Each one of those doctors has cost us between a quarter of a million dollars and half a million dollars, depending upon whether they are trained as general practitioners, have received special training or have gone into scientific research.
There will be a need in Canada for more physicians. According to my information and also that of the minister, there will be no increase in the numbers of doctors graduating even though more will be required. We have now passed the two million mark of those 60 years and over, according to the last figures available in 1976.
The minister has made a statement to the effect that Canada might have too many physicians. That is not correct as the figures include specialist physicians, doctors working in public service, working privately as administrators or for insurance companies, et cetera. Some work part-time. The general practitioner would not average 50 per cent of those, and in actual practice the GP should account for 60 per cent to 70 per cent of physicians. Ruling out part-time physicians, we have one general practitioner for roughly every 2,000 people.
The minister has also stated that the majority of those doctors emigrating were not Canadians. Surely she knows that in January 1977 the United States was asking for and admitting Canadian born doctors and that in the last three years there has been an increase of 300 per cent in those emigrating.
The problem is frightening in that our health care system may break down. It was a Liberal government that brought in the national health program, but over the years it has been using its child like an illegitimate or orphan child. It starves it of research, driving thousands of our young scientists outside the country.
The minister knew the tax position of the doctors. She was well aware that a doctor could not deduct the interest on a

bank loan on this tax return. He could not deduct the cost of mechanical equipment he needed to increase his knowledge, even though it increased his earning power, and as a result of that the government took increased taxes. The minister knew all this because of her previous portfolio as minister of national revenue.
No Canadian born doctor wants to pull up his roots and leave his home and friends. But because of the bureaucracy- the forms that take a quarter of his time to fill in, the wrangling with the bureaucrats of medicine and, finally, the high taxes and frustration, he leaves.
The minister must face those facts. There is a deterioration in the quality of medical service due to the loss of professors and researchers who trained the doctors. There is attrition and the increased service demands of an aging population. There is a breakdown of medical service because of the shortage of doctors, and this is compounded by the increasing number of people over 60 years of age who require service. These days people aged 50 are regarded as being in the geriatric class, and 1 would remind hon. members of this.


Mr. W. Kenneth Robinson (Parliamentary Secretary to Minister of National Health and Welfare):: Mr. Speaker, the hon. member has once again brought before this House a matter of continuing importance and concern to all members. The hon. member is considered a specialist in the area of geriatrics and is appreciated for the work he has done in the House and the contribution he has made in this regard.


Some hon. Members:: Hear, hear!


William Kenneth Robinson: The hon. member referred to the emigration of doctors. I am sure he will agree this is a provincial matter and a provincial concern as well. He also referred to the harassment of doctors as a result of the multiplicity of forms they are required to prepare. I am sure he understands from the recent statement by the minister when her estimates were before the committee that this would be reduced to a considerable extent.
With regard to the emigration of doctors, let me say this to the hon. member. If emigration of physicians from Canada during the years 1967 to 1977 is almost 4,000, the loss of manpower in this field has been more than compensated for by immigration which was 10,704. The total number of active civilian physicians in 1968, excluding interns and residents, was 22,969, giving a physician-population ratio of one to 909. In the year 1977 the total figure was 34,860, with a ratio of one to 673.
This ratio of physician supply compares very favourably with most other developed countries, and the attrition arising from emigration and from other reasons has not prevented the steady increase of the ratio. Our medical schools are producing over 1,700 new physicians each year and immigration, which was around 1,000 four years ago, had to be controlled but was still around 300 in 1977. Therefore, there is no indication of shortage of physicians in Canada for the foreseeable future.
June 20, 1978

Concerning the treatment of older people, we see an increased interest amongst the medical profession, nurses and social workers in gerontology. A bureau on aging is being established in the welfare section of the department and a national conference is planned on the subject for the fall. As for geriatrics, a recent survey in March 1977 by the Association of Canadian Medical Colleges shows that medical schools are introducing more and more education of geriatric medicine as an identifiable component of their under-graduate curriculum. The Canadian Association of Gerontology is devoting time and effort, together with other medical associations, to increasing the number of specialists in geriatrics.
On the other hand, the treatment of older people has been carried out in this country for a long time by competent people in every specialty of medicine, except pediatrics and obstetric-gynecology, and by general and family practitioners. It is clear that ophthalmologists and optometrists will continue to treat aging people for their vision problems; that specialists in orthopedic surgery, in urology and in cardiovascular disease and other areas as well will continue to provide good care, together with general and family physicians, in the primary care area; and that a certain number of medicogerontologists and geriatricians will evolve with the increasing demand to look at special problems related to old age. We are certain that the total number of physicians is fully satisfying the demand for candidates in a new specialty which is developing as a support for existing medical care.


POST OFFICE-UNFILLED ORDERS FOR OLYMPIC COINS
Mr. Gordon Towers (Red Deer):: Mr. Speaker, 1 appreciate the hon. member for Toronto-Lakeshore (Mr. Robinson) remaining to answer my dissatisfaction with the way the government has handled the Olympic coin program. The Olympic coin program was established by legislation of the federal government. Dealers who purchased and sold Olympic coins were agents of the federal government, and this government is responsible for fulfilling agreements of dealers who received payment and did not supply the coins ordered. What would happen to any corporation in Canada which carried on that kind of business?
The customer relations group, supposedly set up to intercede for purchasers who were cheated out of their coins or could not obtain delivery, admits it cannot now do anything to ensure the orders will be filled. Has the cabinet never heard of bonding companies or of legislation to force dealers to take out a bond? Some of the coin dealers have gone bankrupt. Since the federal government minted and furnished the coins and presumably was paid for them, I maintain that, in addition to being responsible for its agents, the coin dealers, the government should stand behind those who paid for Olympic coins in good faith but were left without coins or compensation.
What action would the government have taken had it not received full payment for the coins purchased by the coin
Adjournment Debate
dealers? Would the government be satisfied to be left without coins or payment?
The Olympic coin report listed a reserve fund of over $18 million for the winding down of the program by the end of this year. The Postmaster General (Mr. Lamontagne) stated he would seek money from the cabinet to refund the purchase price to those who had been cheated. Why place an additional burden on Canadian taxpayers? Is there any reason compensation for the $300,000 worth of unfilled orders cannot be made out of the reserve fund?
A further point arises. Some orders for Olympic coins have been outstanding for over two years. Many purchasers have sent in photostat copies of confirmed orders and their deposited or cashed cheques three or four times, to no avail. Are they not entitled to interest on their money? In some cases the orders amounted to $400 or $500. The government is apparently prepared to set up bureaucracies but is unwilling to stand behind taxpayers who have lost money on a government-initiated program.
Canadians are asking many questions about the whole Olympic coin operation. Many MPs were concerned at the time the relevant legislation was passed. Our cause for concern has now been substantiated. Were any of the unsold Olympic coins eventually sold to a financial institution at face value or at least at a lower rate than the coin dealers or the general public were charged? My information is that a coin dealer offered to purchase unsold coins at a reasonable price, higher than that alleged to have been paid by the financial institution, but did not receive even an acknowledgement of his bid.
There are many questions, so far unanswered, to which I hope the parliamentary secretary will be in a position to reply this evening. 1 am not the only member who has been approached by constituents in an attempt to get this unacceptable transaction sorted out. Although I welcome the minister's assurance that refunds will be made to those who placed orders, 1 cannot agree with the suggestion that additional funds be spent out of the public purse. Surely the balance held in reserve in the Olympic coin fund could be used for that very purpose.
This debate affords the Postmaster General an opportunity to clear the air with regard to what the government intends to do in this scandalous situation. Time is running out. We have only until December 31, 1978, to clear up this intolerable mess.


William Kenneth Robinson: Mr. Speaker, the hon. member for Red Deer (Mr. Towers) has made a very strong representation this evening, as he did on June 5, 1978. He will appreciate that when he raised this subject previously the minister indicated, as the hon. member acknowledged in the course of his remarks, that he was very sympathetic toward those who do not seem to have been dealt with fairly. He also pointed out that the Olympic coins corporation has no legal responsibility whatever in respect of these distributors. It is, however, a most unfortunate situation which has developed.

June 20, 1978
Adjournment Debate
Mr. Speaker, the Olympic (1976) Act was passed by this House on July 27, 1973. Minting and sale of Olympic coins followed during the next five years. Almost $400 million worth of coins were sold to an estimated two million customers in 63 countries. The result to this point is a profit of $105.5 million which has gone to help cover the cost of the games in Montreal, plus $8.4 million to assist amateur sport.
As hon. members will understand, any sales effort as large as the Olympic coin program, involving several million customers, is very slow to wind down due to illness or death of many of the customers and the complexity of the marketing effort. However, the wind-down program is now at its final stages, and all individual customer complaints have been acted upon, except for approximately 100 cases still to be resolved within the next couple of months. This does not, however, include the special circumstances involving two distributors, Fred Samuels Limited of Montreal and Western Coin Distributors of Regina, Saskatchewan, who experienced financial difficulties and were unable to fill their orders.
The minister has said before that we are sympathetic toward the people who ordered and paid for their coins through these distributors, but the question of finding a way to help them get their coins is complex because of the legalities involved in coins which are legal tender in Canada. Section 5(2) of the Olympic (1976) Act states, and 1 quote:
An Olympic coin shall not be issued or sold by the Government of Canada at less than the face value of the coin and under any arrangement whereby the net consideration received by the Government of Canada for the coin is less than its face value.
As the distributors in question have no money to pay for at least the face value of the coins as referred to in section 5(2), a move by the government to supply coins on an ex gratia basis to the customers might be regarded as violating this section. We do not at this stage have the legal authority to make ex gratia payments to the people whose orders were not filled by the distributors in question.
The officials of the department have been advised to contact Treasury Board to see if anything further can be done to resolve these customers' difficulties.


GRAIN-SHORTAGE OF BOXCARS AT CHURCHILL, MAN.
Mr. Cecil Smith (Churchill):: Mr. Speaker, 1 would like to thank the hon. member for Toronto-Lakeshore (Mr. Robinson) for remaining to answer my questions regarding the port of Churchill. He has been a busy man tonight. He is the only one on the benches opposite to answer all our queries.
On June 12 1 asked the Minister of Transport (Mr. Lang) what guarantees he could give to ensure the delivery of 30 million bushels of grain from Churchill. I asked that question because of the track record of this government in getting grain to Vancouver, Prince Rupert and other locations, and I thought it was very important to find out if some thought was being given to the port of Churchill. There are less than 100

days in the shipping season at Churchill. The season runs from July 24 to October 20. The minister takes a very partisan approach to anything 1 say about the port of Churchill. If 1 took the approach this government takes to Churchill, we would be lucky if 10 million bushels of grain went through.
The minister said that a record 30 million bushels will reach Churchill this year. I want to put the record straight. That record has never been reached. Last year we came very close to it. We shipped 27.4 million bushels through Churchill, but unfortunately the last two ships which came to the port were diverted to Montreal.
Much work has been done by various groups. Good work is being done by the Hudson Bay Route Association and by the Churchill Development Board in trying to increase grain shipments.
The Hall commission suggests that 55 million bushels of grain could go out through the port of Churchill annually without too much additional expense for the upgrading of that facility. I understand that now the CNR is upgrading two passing tracks between Gillam and Churchill. It will be possible to despatch more trains, and they will not have to have a long waiting time for meeting. What we really need is a firm commitment from this government that when those passing tracks are completed there will be a percentage increase in the amount of grain which goes through the Port of Churchill. Just last week 51 ships were waiting for grain at eastern and western Canadian ports. Twenty-one ocean ships were waiting in Vancouver, ten in Montreal and 20 at St. Lawrence ports. Our ports are experiencing a bottleneck which is worse than that which occurred at the end of World War II. This is costing taxpayers an estimated $2 million a week. Of course, it is mostly the farmers who are paying that. Some ships have been waiting in Vancouver and the St. Lawrence ports for as long as six weeks, and some of them are costing $5,400 a day in demurrage charges.
The cause of the shortage of boxcars to transport grains to these ports has been that many of them are down in the United States, and have been there for some time. Many of the hopper cars are being used for storage of potash instead of for moving grain. The Canadian government is now in the position of not being able to deliver the record 850 million bushels of grain, or $2.5 billion worth, which it sold abroad last year to the Soviet Union, Japan and China. We notice also that another big sale of grain has been made to China. I think the government must understand that we will have to use every port we have in Canada to its full capacity if we want to reach the $1 billion mark in grain shipments out of Canada.
As I have said many times in the House, the port of Churchill is the most efficient grain handling port in Canada. That comment was made by the Board of Grain Commissioners. I cannot for the life of me see why the government could not have made arrangements to extend the season each year. The season was established some 20 years ago when we did not have the technology we now have in the port of Churchill. We
June 20, 1978

now have an ice patrol and every ship is equipped with radar. We could extend the season by one month and thus increase the amount of grain going out of the port by at least 10 per cent per annum over the next five years in order to reach the 50 million bushel mark.
The minister has now decided to have another study carried out with regard to grain movement, called the grain transportation study. I wonder if it is not just a way of slowing things down and taking the pressure off the minister. I would also like to know why we really need this report. 1 would also like to know to whom the terms of reference are extended and who was invited to bid on this study. It is my understanding that some of the people who were invited to bid are in the international world of transportation. Also I notice that the Rod Bryden report on grain handling in the prairies went beyond its terms of reference and included the port of Churchill. Bryden wrote a devastating report against the port of Churchill and its transportation facilities, and it would now appear that he is getting all the creamy jobs from the Department of Transport.
I should like to see the facilities at Churchill used to their maximum capacity and at least 50 million bushels of grain shipped out of there annually.


William Kenneth Robinson: Mr. Speaker, the hon. member for Churchill (Mr. Smith) has once again brought before the House a matter which is of continuing concern, particularly with reference to the openness of the port. There are some 100 days or less when port facilities are open for grain movement purposes. I hope that this year the port will be used to its maximum potential and I am assured that we can expect a third record year.
The hon. member also brought forth a number of other questions which were not contained in his original question. I hope these questions can be answered at a later date.
I would like to assure the House that every effort will be made to again use the port of Churchill to the maximum extent for the third year in a row. There is currently pressure on all parts of the transportation system to move the grain that has been sold this crop year. However, Churchill will most likely find itself again in the advantageous position of experiencing its greatest demand on the transportation system
Adjournment Debate
late in the crop year after the tight situation elsewhere has eased. The Churchill season from July to October normally requires boxcars after the system has had time to recover from the delays which often occur during the winter. This situation can be expected to occur again this year.
The government is committed to maximizing the use of the port of Churchill. In our current rehabilitation program for prairie rail lines, $1,610,000 has been allotted by the federal government to improve the rail line into Churchill. The work to be undertaken involves bank widening and drainage, rail relay and extending the sidings along the line. These improvements are expected to double the capacity of the port.
The grain transportation situation is under constant review by the government. Continually we are searching for ways to improve efficiency in the utilization of present facilities. Examples of the benefits of this study abound. The most obvious example of the improvements which have been made is the fact that car turnaround time for grains moving to export position has been reduced to 17 or 18 days from the 22.9 days determined by the Hall commission report one year ago. The government will continue to analyse the system looking for new ways of improving its operation, with a view to providing adequate facilities to moving to market the increasing production which is expected in the next few years.
Recently the government has announced an intensive investigation of the operating procedures used by the railroads, grain handling companies and the Canadian Wheat Board, as they work together moving Canada's grain production to market. This project is expected to provide additional recommendations which will further improve the utilization of the railroad facilities currently available.
Through its purchase of 8,000 hopper cars and its commitment to a $700 million rehabilitation program, the government has shown a willingness to step in and provide the necessary transportation facilities when warranted.


Mr. Deputy Speaker::