1978-11-13

ROUTINE PROCEEDINGS


Mr. Eldon M. Woolliams (Calgary North):: Mr. Speaker, I rise, under the provisions of Standing Order 43, on a matter of urgent and pressing necessity. This motion deals with Petro-Canada purchasing 48 per cent of the shares owned by Phillips Petroleum in Pacific Petroleums Ltd.
I move, seconded by the hon. member for Red Deer (Mr. Towers):
That the minister in question make a statement on motions, immediately, and table a financial statement of both Petro-Canada and Pacific Petroleums Ltd., as the purchase of these shares will not produce one new barrel of crude petroleum for Canada. The statement should supply the House and the country with full details, particularly as to the amount of money borrowed, and from whom, the rate of interest, the profits of the enterprise, the tax lost to the treasury of Canada, and the future financial commitments of Phillips Petroleum Company so as to explain in detail the full effects of this purchase on the economy of Canada.


Mr. Speaker:: Presentation of such a motion for debate at this time can only be done, pursuant to Standing Order 43, with the unanimous consent of the House. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


ROYAL CANADIAN MOUNTED POLICE
Mr. Andrew Brewin (Greenwood):: Mr. Speaker, I wish to make a motion under the provisions of Standing Order 43. Corporal Radey, of the RCMP, is being charged in a secret RCMP hearing with having entered into consultation or discussion with counsel to the Laycraft judicial inquiry contrary to what is described as the "lawful" commands of Inspector Palmer.
It being apparent that the instruction to Radey that he should not discuss the matters before the Laycraft commission with counsel for that commission was itself, in fact, unlawful and an attempt to restrict the commission from fulfilling its duties, I move, seconded by the hon. member for Nanaimo-Cowichan-The Islands (Mr. Douglas):
That the House instruct the Solicitor General to communicate with the appropriate officials of the Royal Canadian Mounted Police and have the charges against Radey withdrawn, so as to demonstrate that no member of the force can be prosecuted by secret trial or otherwise for disclosure of evidence relevant to a judicial inquiry.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


GOVERNMENT ADMINISTRATION
Mr. Harvie Andre (Calgary Centre):: Mr. Speaker, in accordance with the provisions of Standing Order 43, I wish to move a motion on a matter of urgent and pressing necessity.
In the throne speech of October 11, 1978, the government committed itself to less involvement in the private sector. Specifically, the throne speech stated that the government's objective was "to encourage a more vigorous expansion of the private sector by reducing governments' share of the nation's wealth". In view of the fact that less than 30 days after this statement of intent, the government nationalized an airline and, now, an oil company, I move, seconded by the hon. member for Northumberland-Durham (Mr. Lawrence):
That this House order the government to cease any further nationalization of private sector companies and that the Prime Minister be asked to make a statement on motions detailing which parts of the throne speech are to be accepted as true and which parts are not.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.

November 13, 1978


CANADIAN NATIONAL RAILWAYS
Mr. B. Keith Penner (Thunder Bay):: Mr. Speaker, in view of the announced intention of the CNR to increase its freight rates by as much as 30 per cent for the movement of forest products in northern Ontario, under the provisions of Standing Order 43 I move, seconded by the hon. member for Ottawa West (Mr. Francis):
That this House do instruct the Standing Committee on Transport and Communications to inquire specifically into the operations of the CNR in northern Ontario to determine whether this Crown corporation is, in fact, impeding rather than encouraging regional development.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.
 * *


CONSULTATIONS WITH MUNICIPALITIES TO EFFECT ENERGY SAVINGS-MOTION UNDER S.O. 43
Mr. Dan McKenzie (Winnipeg South Centre):: Mr. Speaker, I rise, under the provisions of Standing Order 43, to move a motion of urgent and pressing necessity.
In light of evidence from a study done by K. M. Jardine, a professional engineer and editor of the Manitoba Association of Professional Engineers' November periodical, which showed that vehicles at one four-way stop intersection in the city of Winnipeg consumed an additional 12,500 gallons of fuel annually and if that figure were applied nationally, the excess fuel consumption figure would be astronomical, I move, seconded by the hon. member for Moose Jaw (Mr. Neil):
That the Minister of Energy, Mines and Resources study the findings of the report and, with an eye to energy conservation, direct his energy-saving officials to consult with municipal officials nationwide to review the necessity for as many four-way stops in Canadian cities and towns.


Mr. Speaker:: Presentation of such a motion at this time would require the unanimous consent of the House. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


FOREIGN INVESTMENT
Mr. Stuart Leggatt (New Westminster):: Mr. Speaker, I rise on a matter of urgent and pressing necessity, pursuant to Standing Order 43.
In view of the recent Science Council of Canada report that Canada has lost some 200,000 jobs because of our foreign-owned, branch plant economy, in view of the fact that FIRA has turned down only 4 per cent of foreign investment applications, and in view of the fact that the prestigious United States business publication, Barrons, summarized FIRA's track record as "the only United States business that wouldn't be welcomed in Canada is Murder Incorporated", I move, seconded by the hon. member for Northwest Territories (Mr. Firth):
That the Minister of Industry, Trade and Commerce resign.


URBAN AFFAIRS
Mrs. Jean Pigott (Ottawa-Carleton):: Mr. Speaker, I rise, under the provisions of Standing Order 43, on a matter of urgent and pressing necessity. In light of the reported highly political statements of the deputy minister of urban affairs, and the vice president of policy for CMHC, to the effect that Canadians are too well housed and Canadian home owners are apparently well-to-do people who do not require government help, I move, seconded by the hon. member for Selkirk (Mr. Whiteway):
That this House direct the Minister of State for Urban Affairs to make the necessary arrangements for a permanent leave of absence for the present deputy minister and replace him with an individual who is sensitive to the realities of the housing situation in Canada, and stop covering up the failures of this government-


Mr. Speaker:: Order, please.


Mr. C. A. Gauthier (Roberval):: Mr. Speaker, we can hardly understand one another in this large room. My question is directed to the Minister of Urban Affairs-


Mr. Speaker:: Order. Proceedings under Standing Order 43.

November 13, 1978


REQUEST FOR WITHDRAWAL OF REMARKS BY LEADER OF OPPOSITION-MOTION UNDER S.O. 43
Mr. Mike Landers (Saint John-Lancaster):: Mr. Speaker, I rise under the provisions of Standing Order 43. In view of the intemperate language used by the Leader of the Opposition on Wednesday last in relation to Liberal members of parliament from New Brunswick, I move, seconded by the hon. member for Middlesex-London-Lambton (Mr. Condon):
That this House urges the Leader of the Opposition to withdraw his offensive remarks and apologize to the hon. members concerned.


Some hon. Members:: Hear, hear!


Mr. Speaker:: Presentation of such a motion for debate would require unanimous consent. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.



ORAL QUESTION PERIOD


Harvie Andre: Mr. Speaker, my question would be for the Prime Minister if he were here, but I will direct it to the Deputy Prime Minister. In a speech on August 1, the Prime Minister stated on national television:
We will remove the intrusion of many government policies from individuals and businesses; in some cases this will mean returning functions to the private sector.
He went on to reaffirm his faith in the private sector. In the throne speech, this pledge was repeated on three or four occasions.
Can the Deputy Prime Minister explain to this House why there has been this failure on the part of the government to fulfil these commitments that were made, and why the government has taken action with regard to Nordair and, now, Pacific Petroleums directly contrary to its own stated policies?


An hon. Member:: Esso is next.


An hon. Member:: Have you given up the ghost?


Hon. Alastair Gillespie (Minister of Energy, Mines and Resources):: Mr. Speaker, the hon. member is referring to the very significant transaction which occurred over the weekend; the acquisition by Petro-Canada of the controlling block of shares in Pacific Pete-


Some hon. Members:: Hear, hear!
Oral Questions


Alastair William Gillespie: This transaction is a major building block for the future energy security of Canadians-


An hon. Member:: A major block in building!


Alastair William Gillespie: It is a major investment in our future. It is no way inconsistent with the statements made in the Speech from the Throne which highlighted the importance of major energy investments for our future.


Harvie Andre: Mr. Speaker, that flimflam does not deserve reply.
My follow-up question to the Deputy Prime Minister is with regard to these commitments made, I thought in sincerity, to the people of Canada on national television and again in the throne speech, that there would be no further nationalization and there would be a return to the private sector on the part of this government. Will the Deputy Prime Minister give his firm commitment that there will be no further nationalization of private companies-


Some hon. Members:: No.


Harvie Andre: -at least until the government works up the courage to seek a renewed mandate from the people to pursue a policy of state ownership of the Canadian economy?


Hon. Allan J. MacEachen (Deputy Prime Minister and President of Privy Council):: Mr. Speaker, I would remind the hon. gentleman that there is no nationalization involved in this particular transaction.


Some hon. Members:: Oh, oh!


An hon. Member:: What do you call it?


Allan Joseph MacEachen: I also ask him to probe more deeply beneath the surface of this transaction to discover for himself that the purchase was made entirely without government funds. It is entirely a commercial transaction. It is not drawing upon the revenue of the Government of Canada. Further to that, probably because of this strengthening of Petro-Canada it will be possible at the same time to strengthen activity in the private sector because, as the hon. member knows, virtually all the projects undertaken by Petro-Canada are joint ventures undertaken in co-operation with private sector firms.
I believe if the hon. member will probe more deeply, he will abandon this effort of his to paint this as a further incursion of the government into the private sector.


Harvie Andre: Mr. Speaker, the Deputy Prime Minister would strengthen the private sector by having those who run the Post Office run the oil industry. If the Deputy Prime Minister is not aware, he should be aware that Petro-Can, by statute, is an agent of Her Majesty; therefore, its expenditures and debt obligations are obligations of the Government of Canada and the taxpayers of Canada. This, obviously, makes a mockery of

Oral Questions
the minister's previous statement and a mockery of any commitment to restraint.
Did the Deputy Prime Minister seek, and get, the approval of the President of the Treasury Board to grossly exceed his commitment to hold expenditures this year to less than the total growth of the gross national product, which is clearly impossible in view of this new commitment of the taxpayers' money?


Allan Joseph MacEachen: Mr. Speaker, the hon. member should realize that all the questions which he put together in his last intervention are totally without foundation, because this does not represent in any way a demand on government resources. It is totally a commercial transaction, financed outside government expenditures by commercial transactions by the private banks of Canada. That is the private sector, in my view.


THE CANADIAN ECONOMY
Mr. Sinclair Stevens (York-Simcoe):: Mr. Speaker, my question is to the Minister of Finance, who is the chief financial minister in this cabinet. As his deputy sits on the board of Petro-Canada, will he tell the House how they arrived at the evaluation of S65 per share for Pacific Petroleums shares, bearing in mind that that is 17 times the diluted earnings for that company, compared to other companies selling at roughly eight times earnings and it compares to the price of $10 originally paid by Phillips for the stock?


Hon. Jean Chretien (Minister of Finance):: Mr. Speaker, I do not think I can add to what has been said by the Deputy Prime Minister. This transaction was made by Petro-Canada in order to strengthen the participation of this company in an area where most of the industry is foreign-controlled. The commercial transaction has been carried out according to the rules of the market. It was approved by the board of Petro-Canada. It was a good transaction.


Sinclair McKnight Stevens: Nobody doubts it was a good transaction for Phillips. My question for the minister is this: The minister states that this is a period of restraint. He has admitted to the House that he will need $11.8 billion for financial requirements in the current year, and another $9.7 billion for the 1980 fiscal year. How can the Minister of Finance justify, in the name of restraint, an expenditure by this 100 per cent Crown-owned company of $671 million, bearing in mind that it will not produce one extra barrel of oil or one job in this country?


Joseph Jacques Jean Chrétien: Mr. Speaker, I just want to say that it is a commercial transaction and Petro-Canada pledged the assets they have gained in making the transaction. This was analysed by those who were loaning the money. They found that the assets being given against the borrowing were very good
{Mr. Andre.]
indeed, so they went along with the transaction. I believe it is a very good transaction for Canada. It will help Canadians to participate in the resources of Canada. I will not apologize for that.


Sinclair McKnight Stevens: The Minister of Finance knows that on behalf of the people of Canada, this government has invested half a billion dollars in the capital of that corporation. Will the minister advise whether it is true that, as well as any Pacific Petroleums stock pledging, the Crown assets of Petro-Canada have also been pledged?


Joseph Jacques Jean Chrétien: Mr. Speaker, I just said that, as a commercial transaction, it is a very valid one. We have acquired a lot of assets in the oil and gas business and other activities in Canada. It is good that Canada is taking some aggressive action here. When this House voted on having a Crown company in that business for Canadians, we said we wanted to have a good one. I repeat, it was a good commercial transaction and I am pleased with it.


REPORTED PROPOSED ACQUISITION BY BANK OF MONTREAL OF NEW YORK CITY BANK BRANCHES
Mr. Edward Broadbent (Oshawa-Whitby):: Mr. Speaker, only an Alberta Tory and a Bay Street banker would make this government look progressive.
1 have a question for the Minister of Finance. Will the minister advise whether his department has been informed by the Bank of Montreal regarding its intention to acquire 89 New York city area bank branches, at a cost of over $1 billion in investment? If so, what has been the government's response?


Joseph Jacques Jean Chrétien: Mr. Speaker, I did not have the opportunity to look into that transaction. The Bank of Montreal, as all other banks in Canada, operates of course under the Canadian Bank Act. I was not notified that there were some unusual aspects in that transaction. I will surely inquire about the matter and report to the hon. member.


John Edward Broadbent: Considering that the $1 billion required for this takeover would create thousands of jobs at home if it were invested here, will the minister tell us whether he is concerned about this outflow of Canadian capital and, if so, what he is prepared to do about it?


Joseph Jacques Jean Chrétien: I think Canadian institutions should have the possibility of expanding, and not only in Canada. If Canadian institutions which can provide good business direction and give leadership wish to expand, we should welcome such efforts which prove that Canadian business is not restricted to Canada but can get into other areas where it can do a good job. This is something which can be looked at positively, rather than negatively as the hon. member does all the time.

November 13, 1978


John Edward Broadbent: I should like the minister to name one benefit to Canada which flows from investing Canadian dollars to acquire new banking assets in the United States. Considering that Sweden, the United Kingdom and a number of other countries in western Europe have established agencies which ensure that before capital is exported for investment purposes, a domestic benefit must be shown, will the Canadian government consider establishing such a mechanism here so that we might get the kind of investment in Canada which would generate the jobs we need?


Joseph Jacques Jean Chrétien: Mr. Speaker, it is obvious that at times I do not share the views of the Leader of the New Democratic Party. I think that if Canadian films can be shown abroad, they will eventually generate profits which would be repatriated to Canada. It would be the reverse mechanism to that of foreign investments in Canada. If we believe in a market economy and in the normal flow of capital between Canada and other countries, it is entirely normal under the circumstances for Canadian institutions to invest abroad.


URBAN AFFAIRS
Charles-Arthur Gauthier: Mr. Speaker, 1 should like to put a question to the Minister of State for Urban Affairs with regard to low-cost housing projects. Anyway, he must have received my letter. I tried to reach him last week. I was unable to do so, but I should have liked to discuss the matter with him.
Some owners are having financial problem since Central Mortgage and Housing Corporation has reduced its assistance from S89 that it was in May to $48. In fact, in May the owners who bought low-cost housing received up to $89 a unit, but since the middle or the end of June that amount has been reduced to $48.
Can the minister say whether that policy of CMHC in this regard applies right across Canada? Is it a national or a regional policy?


Harvie Andre: Mr. Speaker, I do not quite understand the question of the hon. member. I believe he is speaking of one particular case, of a project in his riding. I shall obtain the pertinent information from the hon. member and give him an answer as soon as possible.


Charles-Arthur Gauthier: On a supplementary, Mr. Speaker, so that the minister can study my question in depth. In any event, my letter must be on his desk already.
Oral Questions
That project was authorized in May and until the end of that month Central Mortgage and Housing Corporation granted $89 for each new unit; but now that the tenants are ready to move into their apartments the grant is only $48, which throws off their budgets completely. That is why I am asking the minister to give special attention to this case.


THE CANADIAN ECONOMY
Mr. Allan Lawrence (Northumberland-Durham):: Mr. Speaker, my question is for the Minister of Energy, Mines and Resources and it is also in relation to the Pacific Petroleums transaction.
Because Petro-Canada's subsidiary has already paid out $670 million and has committed itself to a further $730 million on condition that the existing management and personnel of Pacific Petroleums stay on in office, and because they were not consulted in any manner, shape or form prior to the pay-out and the transaction being consummated on Friday morning-there is, therefore, no guarantee that they will stay on-is there any way by which Petro-Canada can recover the $670 million already paid if Pacific Petroleums' people do not stay on?


Alastair William Gillespie: Mr. Speaker, I made it quite clear that this is a major building block for the energy security of Canadians. There is no intention whatsoever on the part of Petro-Canada to back away from this transaction. Indeed, the intention of Petro-Canada is to move forward and to pick up all the shares of Pacific Petroleums.


EFFECT ON ECONOMY OF PURCHASE OF PACIFIC PETROLEUMS SHARES
Allan Frederick Lawrence: Mr. Speaker, I gather that the answer is no. My supplementary question is to the Minister of Finance. The United States Securities and Exchange Commission this morning estimated that 70 per cent of the shareholders of Pacific Petroleums are American. This means that roughly $1 billion Canadian will be flowing south of the border to finalize this transaction.
The Minister of Finance was part of the cabinet which had to approve this transaction. What effect will that $1 billion Canadian flowing south of the border have on the Canadian dollar on foreign exchange markets?


Joseph Jacques Jean Chrétien: Mr. Speaker, I am informed that Petro-Canada will be borrowing the money it needs for this transaction in American dollars, so that will have no effect on the Canadian dollar.

November 13, 1978
Oral Questions


REASON ANNOUNCEMENT OF PURCHASE OF PACIFIC PETROLEUMS SHARES NOT MADE IN HOUSE
Allan Frederick Lawrence: Mr. Speaker, there will still be, obviously, an effect on Canada's credit. My final question is to the Minister of Energy, Mines and Resources. Parliament was ignored in this transaction which calls for a financial commitment of the taxpayers of this country for a back-up of $1.4 billion.


Allan Joseph MacEachen: Wrong.


Allan Frederick Lawrence: The agreement was signed on Friday morning. Trading was stopped Thursday night. The minister left this House on Friday and made the announcement in Toronto at five o'clock Friday night. What possible justification was there for the announcement not being made in this House, so that it could at least have been sensibly discussed in this House on Friday afternoon?


Alastair William Gillespie: Mr. Speaker, the hon. member's facts are not accurate. Trading was not closed off on the Canadian exchange until very early on Friday morning. A few shares did, in fact, trade that morning, but it was closed just as soon as it looked as if it was going to be possible during the course of Friday to put together a very significant transaction.
As the hon. member will undoubtedly understand, this matter had to be handled with very considerable confidentiality, in view of the values involved, and that is the reason the stock exchange ceased all trading. During the course of that day, the financial arrangements were put into final form and the final agreement for purchase and sale was negotiated and settled among the partners. That did not take place until very late on Friday. As a matter of fact, I was present for the final ceremonies, and that was at five o'clock on Friday.


REQUEST FOR TABLING OF FINANCIAL REPORT ON PURCHASE OF PACIFIC PETROLEUMS SHARES
Eldon Mattison Woolliams: Mr. Speaker, I would like to put a question to the Minister of Energy, Mines and Resources.
In light of the answers we received, that it is an independent Crown corporation and the government and the taxpayers of Canada have already bought $500 million into this company, and in light of the fact that the stock was trading on the stock exchange at $45 and they paid $65 a share, and in the last few weeks there was an increase by $7.50 because of rumours of this takeover, I ask the minister-because he has glossed over the truth today-if he would be prepared to table in the House the financial report of Pacific Petroleums on this deal and on the agreement between Phillips Petroleum and Petro-Canada, so that the Canadian people and this parliament will know the real facts from the documents in question, rather than from the rhetoric of the ministers?


Alastair William Gillespie: Mr. Speaker, the hon. member makes much of the fact that this is a government-financed operation. It is not. This deal is a commercial transaction which has been financed without any government assistance, without any government funds and without any government guarantee.


Some hon. Members:: Oh, oh!


Alastair William Gillespie: This a commercial transaction which has been financed by a normal commercial financial instrument-


An hon. Member:: Guaranteed by you.


Alastair William Gillespie: -and it will have the effect of reducing the demand or the requirement for government assistance in the future, because this corporation was highly profitable and has considerable growth possibilities.
As to the question about the tabling of certain documents, I would be very pleased to consider that suggestion. As the hon. member might know, the board of Pacific Petroleums will be dealing with the transaction later this week. There has already been consultation between the senior officers of Petro-Canada and those of Pacific Petroleums and I am told that a meeting will be held later this week, at which time the board of Pacific Petroleums will consider that company's position on this question.


Eldon Mattison Woolliams: I have one further question, Mr. Speaker. In light of that fact, would the minister be prepared to make a statement on motions so that we might have an opportunity to ask questions in reference to this deal, particularly in view of the fact, as I have said, that the Government of Canada and the taxpayers have already put $500 million into this Crown corporation and that the stock, which was trading on the stock exchange at $45, is now selling at $65, not only for 48 per cent but, as I understand the deal, also for the remaining 52 per cent?


Alastair William Gillespie: I believe that that might be a useful suggestion and I will be pleased to consider it. As I have indicated to the hon. member, there is an important meeting this week and I think it should take place outside the political arena, if the hon. member is agreeable. In any event, I will be pleased to discuss the suggestion with the House leader.


ADVERSE REACTION BY ALBERTA LIBERAL PARTY LEADER TO PURCHASE OF PACIFIC PETROLEUMS SHARES
Mr. Gordon Towers (Red Deer):: Mr. Speaker, my question is directed to the same minister. In view of the fact that the leader of the Liberal party in Alberta, Mr. Nick Taylor, was angered at this purchase and said that the purchase is a waste of the taxpayers' money, can the minister state what his reaction is to that statement?

November 13, 1978


REASON CHAIRMAN OF BOARD OF PACIFIC PETROLEUMS DID NOT MAKE ANNOUNCEMENT OF PURCHASE OF SHARES
Mr. James Gillies (Don Valley):: Mr. Speaker, I direct my question to the Minister of Energy, Mines and Resources. If it is the government's position that this is a strictly commercial transaction and the government has nothing to do with it, why did the minister make the announcement, rather than the chairman of the board?


Some hon. Members:: Oh, oh!


Alastair William Gillespie: Quite clearly, this transaction, because of its size and importance in terms of the energy policy of Canada, involves some very important energy policy questions. That is the reason the minister made the statement.


An hon. Member:: Very good.


Some hon. Members:: Hear, hear!


INQUIRY WHETHER PURCHASE OF PACIFIC PETROLEUMS SHARES WILL INCREASE OIL PRODUCTION IN CANADA
Mr. T. C. Douglas (Nanaimo-Cowichan-The Islands):: Mr. Speaker, may I direct a question to the Minister of Energy, Mines and Resources? In view of the statement that the acquisition of Phillips Petroleum will not add one barrel of oil to the production in Canada, and in view of the fact that in 1974 the oil industry in this country sent drilling rigs down to the United States and cut back its drilling program so as to force the government to raise the price of oil, can the minister assure the House that Petro-Canada, with its new acquisition, will be used to ensure that Canadians will be able to get oil produced in this country and will not be held up to ransom by the multinational oil companies in this country?


Some hon. Members:: Hear, hear!


Alastair William Gillespie: Mr. Speaker, there are two points in the hon. member's question with which I would like to deal. The first one is that one of the reasons why it is important that this transaction go forward is the heavy oil potential associated with Pacific Petroleums and the initiatives Pacific Petroleums have taken in recent months which included, right from the very start, Petro-Canada, just as Petro-Canada has been involved in the heavy oil initiatives with respect to Saskatchewan. So I see this transaction as an opportunity for Petro-Canada to accelerate the development of the heavy oil potential in western Canada, for the benefit of Canadians.


Some hon. Members:: Hear, hear!


Alastair William Gillespie: The second point I would make is that this transaction will place Petro-Canada among the top ten petroleum corporations of this country. Therefore, it will be able to take its position alongside many of the multinational corporations on a much more equal basis.
Oral Questions


Thomas Clement (Tommy) Douglas: Mr. Speaker, I have a supplementary question for the minister. In view of the statement that Petro-Canada bid up the market price of Phillips Petroleum, and this involved the sending of Canadian capital out of the country, has the minister investigated the action of Alberta Gas Trunk Ltd. last spring when they prevented Petro-Canada from buying out Husky by running the price up nearly $20 a share?
Did this not involve paying a higher price than the market price, and did this not also involve sending Canadian money out of the country in order to keep Canadians from gaining some control of the heavy oil in western Canada?


Some hon. Members:: Hear, hear!


Alastair William Gillespie: There have been a number of very significant transactions involving the repatriation by Canadians of their oil properties over the past year. I can think of Ashland Oil, in which Canadian participation, for example, will go up significantly as a result of the purchase of Kaiser Resources Ltd. I can think, as well, of the Husky purchase by AGTL. There are a number of other Canadian corporations which were foreign-owned and which have been repatriated recently as a result of new initiatives by significant Canadian corporations. All of those have involved a transfer of funds from Canada to the United States.
This particular transaction has been organized in a different way. The funds have been borrowed in the United States, so there will not be a net flow of funds from Canada to the U.S. and, therefore, it will not have the same negative impact on the value of the Canadian dollar that some of these other desirable transactions have had.


FEDERAL-PROVINCIAL RELATIONS STUDY BY ECONOMIST HAZELDINE OF JOBS WHICH WOULD BE LOST TO QUEBEC IN EVENT OF SEPARATION
Mr. Gilles Marceau (Lapointe):: Mr. Speaker, my question is directed to the Minister of Federal-Provincial Relations.
In view of the study conducted by Mr. Hazeldine, an economist, to the effect that a separate Quebec would lose only 21,500 jobs, can the minister tell the House if this conclusion is realistic, especially since two recent studies conducted by the federal government concluded that, should it separate, Quebec would lose 140,000 and 325,000 jobs?


Hon. Marc Lalonde (Minister of State for Federal-Provincial Relations):: Mr. Speaker, first of all I would like to draw the hon. member's attention to the fact that Mr. Hazeldine's study is but One of the studies conducted by the Economic Council of Canada and that another study, conducted by two renowned economists predicts a possible loss of 152,000 jobs

November 13, 1978
Oral Questions
and an increase in taxes of about 19.8 per cent for Quebeckers, should separation occur.
As for this particular study, I will leave it up to professional economists to analyse it fully and completely. At this point, 1 can tell the hon. member that this morning I have discussed with government economists of these various studies, and they have assured me that the economic analyses contained in the Government of Canada studies concerning sovereignty-association and commercial realities are still quite valid, and that some of the working hypotheses in the Hazeldine study are absolutely unrealistic.


AIR TRANSPORT
Mr. Jack Murta (Lisgar):: Mr. Speaker, I should like to direct a question to the Minister of Transport: it has to do with the purchase of Nordair by Air Canada and what could be termed as a sweetheart deal for the Nordair shareholders, possibly at the expense of the Canadian taxpayers.
My first question to the minister is: what guarantees do we as taxpayers have that the investment of some $28.4 million will be recovered when Nordair is supposedly sold to private hands?


Hon. Otto E. Lang (Minister of Transport and Minister of Justice):: Mr. Speaker, the key question is whether the price is a fair and reasonable one. When a buyer and seller are negotiating, obviously the seller will seek to obtain the highest price possible, and the buyer will seek to obtain the property at as low a price as possible.
I find it strange to have these questions and the similar ones which were posed by the opposition on Friday, since earlier, as the Nordair transaction unfolded, the accusation from the Conservatives was that there were other private buyers willing to pay the same price. That seems to me to be some evidence of the nature of the price which they saw as being available. It was not necessarily quite true, but it was true enough, given normal Tory approaches to the truth.


Some hon. Members:: Oh, oh!


Otto Emil Lang: Of course, the fact of the matter is that it is our belief, and Air Canada's belief, that this was a fair and reasonable price. Having regard to all the facts, I refer hon. members to the testimony given before the Canadian Transport Commission where this matter was canvassed. I think they will find there a good deal of the answer to their questions.


Jack Burnett Murta: Mr. Speaker, the same supply and demand criteria which the minister just used may be the reason why

prospective buyers, knowing what the price is already, will not be willing to pay the amount the government has allowed Air Canada to pay for Nordair.
I have a supplementary question for the minister. Out of the total price, there is a figure which we feel should be questioned in some way, and that is the $1 million which was termed as out-of-pocket expenses and included in the total price of $28.4 million. Can he explain exactly what the $1 million out-ofpocket expenses are for this kind of transaction?


Otto Emil Lang: Mr. Speaker, I am sure in the ordinary course I can provide an answer to that question. Obviously, it is the kind of question which is detailed and more suitable for the order paper. But I will be glad to do it in due course.


URBAN AFFAIRS
Jean Elizabeth Pigott: Mr. Speaker, my question is directed to the Minister of State for Urban Affairs.
In light of the fact that approximately 70 per cent of Central Mortgage and Housing Corporation executive staff have either been replaced or have resigned, and in light of the ongoing Royal Canadian Mounted Police investigation which reveals shockingly inadequate accounting procedures and very questionable management decisions, can the minister assure the House that senior management attention is being given to improving the accounting procedures involving over $1 billion of taxpayers' dollars? Will the minister undertake to direct his department to prepare a full report of the CMHC internal accounting practices and make this report available to the Standing Committee on Public Accounts?


Some hon. Members:: Hear, hear!


Harvie Andre: Mr. Speaker, the two premises of the hon. member's question are totally wrong. To say that 70 per cent of the top direction of CMHC is gone, is untrue. Second, to say that the RCMP is investigating the over-all operation of CMHC also is untrue.
It is accurate that the RCMP is looking at the file of a specific projet named York Place, in Hamilton. The CMHC administration has been willing to co-operate with the RCMP. Indeed, it has given every support asked for by the RCMP to conduct its investigations. To attempt to take one specific case and generalize, as the hon. member is trying to do, is very inappropriate. I am surprised the hon. member acts so irresponsibly in this House.


Some hon. Members:: Shame!


Jean Elizabeth Pigott: Mr. Speaker, my supplementary question is: in light of a confidential cabinet document outlining federal housing priorities for 1978-79-


Some hon. Members:: Oh, oh!
November 13, 1978


Jean Elizabeth Pigott: All right; calm down now.


An hon. Member:: Yes, mother.


Jean Elizabeth Pigott: The cabinet document estimates that there are 438,000 Canadian households paying over 30 per cent of their income for rent and over 155,000 households living in substandard conditions. Can the minister confirm whether it is a policy of the government to ignore these problems and assume, as the Deputy Minister for Urban Affairs seems to, that Canadians are too well housed? Or is the vice-president of CMHC policy, Mr. Adamson, more accurate in describing the principles of government housing policy when he stated on the weekend that home owners are already well-to-do people and therefore do not require government help?


Mr. Ouellet:: Mr. Speaker, there is one thing I want to say. The hon. member referred to a secret document. It is not a secret document. It is a study which has been requested by CMHC to help us to design better policy in the field of housing.


An hon. Member:: You sure need it.


André Ouellet: This study has been completed. I am glad to hear the hon. member has a copy of it. I hope she reads it more accurately and will know a little more about housing in Canada after careful study of this document.


Jean Elizabeth Pigott: What about Mr. Adamson?


André Ouellet: The consequence of this study is that the federal government has changed the over-all position of the government in relation to housing: it has decided to spend more money for low income and old-age people.


Some hon. Members:: Hear, hear!


André Ouellet: This is why we have stopped giving direct loans to the provinces and various groups which are building housing accommodations in Canada. Rather than give loans, we have decided to increase substantially our subsidies in order to help low income and old-age people have better accommodations. If I have to take advice continually I will take it from my officials, rather than from the hon. Leader of the Opposition who favoured a policy which will provide a break for high income home owners while discriminating against renters and the elderly-


Some hon. Members:: Order.


André Ouellet: -a proposal which could disrupt financial markets-


Mr. Speaker:: Order, please.
Ora! Questions


THE CANADIAN ECONOMY
Mr. Maurice Foster (Algoma):: Mr. Speaker, my question is directed to the Minister of Energy, Mines and Resources. The takeover of Pacific Petroleums by Petro-Canada last Friday will give Canada increased ownership in this strategic industry which is over 90 per cent foreign-owned at the present time.
Will this transaction provide the financial position for Petro-Canada to press ahead with the development of frontier oil and gas reserves and transportation systems, as well as heavy oils which the minister mentioned already?


Alastair William Gillespie: Mr. Speaker, yes, the transaction will provide additional financial muscle for the corporation through the profitability of Pacific Petroleums.


Some hon. Members:: Reading!


Alastair William Gillespie: So it will be possible to place less reliance on government investment in the equity of Petro-Canada. It will enable Petro-Canada to focus on some of these major challenges such as liquefied natural gas in the high Arctic, heavy oil and the offshore drilling which is ongoing at the present time, or has gone on during the season, in the eastern offshore of the country.


FISHERIES
Mr. John C. Crosbie (St. John's West):: Mr. Speaker, my question is directed to the Minister of Fisheries and the Environment. As he knows, last February the St. Lawrence fluorspar mine closed, leaving hundreds of men out of work, and a proposal was put forward involving the construction of a fish plant in St. Lawrence by Fisheries Products Ltd., assisted by both governments.
Since August, when construction was to have supposedly started, everyone has been waiting for the minister to give his approval to the acquisition of two Portuguese fishing vessels to deliver fish into that plant. It cannot operate without additional fishing capacity. Will the minister tell the House whether he has made a decision yet? If he has not, when will he make a decision, so that this can get off the ground and employment will be provided in St. Lawrence?


Hon. Rom6o LeBlanc (Minister of Fisheries and the Environment):: Mr. Speaker, from the very beginning we made it clear that we were trying to help the community of St. Lawrence, while not jeopardizing the very fundamental policy of fisheries, which was not to allow for expansion of licences, especially those foreign-controlled and foreign-owned. This is a



November 13, 1978
Oral Questions
policy which goes back to my predecessor. We approved the proposal presented by the company.
However, in August or early September-I would have to check the exact date-we were informed that the proposals, as agreed to, had been changed very substantially, especially in the area of the ownership of the licences involved. I informed the company that this was not acceptable, no more than the Nord Sea proposal which was advocated by the hon. member. We have tried to find an alternative which would allow the plant to go ahead, but under strict Canadian control.


John Carnell Crosbie: Mr. Speaker, as there are a lot of men and women in the St. Lawrence area who are without employment, in an already highly unemployed area of Newfoundland, when will the minister take steps to either come forward with a proposal that is acceptable, or solve his problem so that construction can start?
In answering that, would the minister remember that the St. John's Daily News asks the question whether the minister is completely heartless, excessively stupid, or has somebody failed to inform him of the plight of these 3,000 people? When will the minister act to cut this Gordian knot so that the people in St. Lawrence can be given some hope?


Mr. LeBlanc (Westmorland-Kent):: Mr. Speaker, I do not know what adjectives the member may want to use to describe me, but one which I can apply to him is that he is "misinformed". The proposal was changed very substantially. I could not accept it as it was subsequently put forth. I will be meeting this week with the company and putting forth a proposal which, hopefully, will solve the problem. If the company does not accept the counterproposal which will be made, then we will make other provisions with another organization to move in.


POST OFFICE
Hon. W. G. Dinsdale (Brandon-Souris):: Mr. Speaker, my question is to the Postmaster General. Now that the Postmaster General appears to be changing his posture, and instead of confronting the union is discussing with the four unions vitally involved in the issue the draft of the Crown corporation legislation-as he promised he would in answers to questions in this House-will he indicate whether the response of the unions to the legislative proposals has been positive or negative?


Hon. J. Gilles Lamontagne (Postmaster General):: Mr. Speaker, it is true that we have had consultations with all the unions in the Post Office, including CUPW. For the time being, these discussions are in camera. As soon as we have an agreement-and I can assure hon. members that things are

progressing in a positive manner-we will table it in the House.


Walter Gilbert Dinsdale: Mr. Speaker, in view of the fact that the unions have stated that the draft legislation covers only Mickey Mouse matters, for cosmetic reasons, rather than resolving substantive issues of disjointed collective management and domination of collective bargaining by Treasury Board-which brought about the recent impasse in labour-management relations in the Post Office-will the Postmaster General continue these consultations with a view to resolving these major issues, thereby encouraging the new support for consultation being displayed by the unions as a hopeful policy for the future?


Mr. Lamontagne:: Mr. Speaker, the consultations we have had with the unions are much more serious than the preamble to the hon. member's question. Discussions are going very well, and the hon. member does not have to worry. I am sure that the unions and management in the Post Office will get along well together and provide the best Post Office service possible.


THE CANADIAN ECONOMY
Mr. Walter Baker (Grenville-Carleton):: Mr. Speaker, 1 have a question for the Minister of Energy, Mines and Resources. Having regard to the fact that, under the financing of the Petro-Can takeover, preferred shares are to be issued to the banks as part of that financing proposal, and because Petro-Can's statute is quite clear that preferred shares, if they are issued, are to be sold only to the Crown, is it the government's intention to bring in legislation to amend the Petro-Can statute order to allow this financing to be carried out under the law?


Alastair William Gillespie: Mr. Speaker, the hon. member has misinterpreted the provisions of the statute. There is no intention to bring in any amending legislation.


TRANSPORT
Mr. Fonse Faour (Humber-St. George's-St. Barbe):: Mr. Speaker, my question is to the Minister of Transport. The employees in the marine service of Canadian National's Gulf service on the east coast have expressed concern about CN's recent policy of diverting a portion of its freight traffic from the Gulf run to a Montreal company, Federal Commerce Shipping Company, operating between Halifax and St. John's, and about CN's policy of using private charters on the Labra-
November 13, 1978

dor service when the company has three ships lying idle at North Sydney.
Can the minister explain to this House why Canadian National is adopting this policy, and can he further assure the House that no workers in the marine service of CN on the Gulf run or in Port aux Basques will lose their jobs as a result?


Otto Emil Lang: Mr. Speaker, the general answer to both questions which the hon. member has posed is that Canadian National seeks to accomplish the task facing it, at the lowest cost, and in that sense it examines which vessel is best for it to use and also which route should be used to send goods in order to avoid unnecessary expenditures.
The question of the implications of this with respect to jobs, particularly in places like Port aux Basques and North Sydney, is a matter of great concern to all of us, as was indicated in the House last week to myself and several of my colleagues in the government. We are looking at the situation constantly with CN, in an attempt to provide mechanisms through them and through other ways to offset any job loss which is threatened.


Alphonsus Faour: Mr. Speaker, it appears to me-and, I am sure, to many workers on the railway and in the marine service- that this diversion of freight traffic from the Gulf run to the Halifax run will have the effect of less traffic being carried on the Newfoundland railway and that it is just one further chapter in the downgrading of that railway. Can the minister explain why this is happening, especially in light of his commitment not to further downgrade the service until the final report of the Sullivan commission?


Otto Emil Lang: Mr. Speaker, it is happening, as I say, because of economic considerations which show lower cost opportunities for movement of the same goods. In fact, some of the greatest changes taking place in relation to the Newfoundland railway are changes which have led to a great volume of goods being moved by truck instead of rail. It may sound like and odd development to hon. members, but the figures show that the movement to truck from rail in Newfoundland is behind that kind of switch in other parts of the country. In other words, there are many factors at work, including the size of shipments, particularly small shipments, the flexibility of the vehicle, and so on, which make the truck the best vehicle for a lot of goods.
One of the things we will be doing in our attempt to make sure that an effective railway is operated for the next number of years is to examine all of the shippers involved, most of whom are all good Newfoundlanders themselves, as to why they are moving goods by truck rather than rail, and we will be making every effort to urge them to use rail as much as is practical.
________________________________1049
Oral Questions FISHERIES


SOCIAL BENEFITS AVAILABLE TO PERSONS EMPLOYED UNDER FOREIGN FISHERIES OBSERVER PROGRAM
Mr. Elmer M. MacKay (Central Nova):: Mr. Speaker, I have a question for the Minister of Fisheries concerning the Foreign Fisheries Observer Program, a program which I assume the minister feels is quite important in monitoring the activities of foreign fleets. Is he aware that some of the participants hired under this program by means of personal service contracts have an uncertain status regarding unemployment insurance benefits and perhaps workmen's compensation, and has he taken steps to monitor this program to ensure that these participants are fully protected, keeping in mind that foreign countries are paying for this program in the first instance?


Roméo LeBlanc: Mr. Speaker, I became aware of the problem as a result of the hon. member's and another hon. member's query. Obviously, these are personal service contracts and they normally do not include payment of unemployment insurance and such benefits. The employee is paid at the end of each trip and if a person is satisfactory to his employer, he may be hired again. I should say "he or she", because it is a fully liberated program.
I am concerned perhaps because of the many restrictions that caused us to take that route. I would be interested in seeing the development of a corps of observers who would be competent, experienced and would regard this work as suitable employment and, in fact, would help us in the program.


Elmer MacIntosh MacKay: Mr. Speaker, I appreciate the minister's answer. I would like to ask him about another point concerning this program. Is he aware of statements made by at least one of the participants hired under this personal service contract, that there seems to be a serious variation of job instructions between, for example, the duties on a Russian boat compared to a Japanese vessel? Is there some sort of liaison to make sure that these foreign fleets are given consistent and fair treatment in order to encourage them to co-operate fully with this country as far as the criteria are concerned?


Roméo LeBlanc: Mr. Speaker, we have bilateral agreements with both countries mentioned by the hon. member, and certainly I would want to make sure that there is total fairness in dealing with both of them. There is a period of training before these people are put on board foreign fishing vessels. I shall inquire with regard to the hon. member's question and pass along the information I receive.

November 13, 1978
World War I Veterans THE CANADIAN ECONOMY


PURCHASE BY PETRO-CANADA OF PACIFIC PETROLEUMS SHARES-FINANCIAL RESPONSIBILITY OF GOVERNMENT
Hon. Robert L. Stanfield (Halifax):: Mr. Speaker, my question is to the Minister of Energy, Mines and Resources, to make sure that I understand what he said earlier.
Is the minister saying, in connection with the Petro-Can purchase and the financial transactions involved, that there is absolutely no financial responsibility on the part of the federal government? Is he saying, not only that the federal government did not engage in any express guarantee, but that by virtue of Petro-Can being an agent of the government, and the implications of that under the Financial Administration Act, there is no financial responsibility on the government of Canada in connection with this transaction by way of guarantee or otherwise?


Alastair William Gillespie: Mr. Speaker, I made it very clear that this was a commercial transaction. It was negotiated and financed by normal commercial instruments. There are no government guarantees.


Mr. Speaker:: Orders of the day.


VETERANS AFFAIRS
Mr. Stanley Knowles (Winnipeg North Centre):: Mr. Speaker, with your kind permission there is a word I should like to say about a matter of which I gave Your Honour notice. It has been my privilege to attend a good many functions on Parliament Hill, but I must say I have seldom attended a function that was so delightful and so thoroughly enjoyed by those in whose honour it was given as the dinner given last Saturday evening by the Minister of Veterans Affairs (Mr. MacDonald) in honour of the 89 or 90 veterans of World War I who were in Ottawa over the Remembrance Day weekend.
The minister was a most gracious host, and the members of his staff went out of their way to see that everything was thoroughly arranged. I must also say that those 89 or 90 men really were touched when, at the end of the evening, each was given a special certificate with his name on it, signed by Her Majesty the Queen.
I felt there should be some mention of this in the pages of Hansard. In my view the Minister of Veterans Affairs and the staff of his department deserve full marks for what they did on Saturday evening.


Some hon. Members:: Hear, hear!



ROUTINE PROCEEDINGS


Hon. Iona Campagnolo (Minister of State (Fitness and Amateur Sport)):: Mr. Speaker, under the provisions of Standing Order 41(2) I should like to table, in both official languages, a Memorandum of Understanding between nine provinces and the Government of Canada concerning future arrangements in government lotteries.


QUESTIONS ON THE ORDER PAPER
[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: 133, 156 and 376.
I ask, Mr. Speaker, that the remaining questions be allowed to stand.


Mr. Diefenbaker: What provisions were taken with respect to Loto Canada's draw for $1 million in gold in order to ensure the integrity of the draw and (a) how was the winning number drawn (b) what was the date the number was drawn (c) were all the tickets to the draw distributed prior to the number being chosen?


Iona Campagnolo: Loto Canada's $1 million gold draw was conducted by Roblet Inc., consulting engineers, with 2 amateur athletes to roll the dice. It followed standard Loto Canada procedures and its integrity was certified by:
a member of Samson Belair, external auditors; a member of Blaney, Pasternak, Swela, public attorneys and Loto Canada's operational auditor.
(a)	The winning number is drawn in the same manner as the intermediate and main draws: i.e. computer random selection.
(b)	The Draw for the $1 million in gold was drawn on October 6, 1978 at 6.30 p.m.
(c)	Yes.


Mr. McKinnon: 1.	What was the actual strength of the (a) Regular (b) Reserve Forces as of October 1, 1978?
2.	How many Armed Forces personnel as of October 1, 1978 were (a) male
(b)	female?

November 13, 1978

3.	What was the (a) military (b) civilian strength of National Defence Headquarters as of October 1, 1978?


Hon. Barney Danson (Minister of National Defence):: 1. (a)
79,033; (b) 21,178.
2.	(a) 74,326; (b) 4,707.
3.	(a) 2,753; (b) 4,255 (includes term, casual and FLIP employees).


Mr. Malone: How many items that passed through the Customs Office in Edmonton in (a) 1969 (b) 1976 (c) 1977, were destined for the Alberta towns of (i) Camrose (ii) Hay Lakes (iii) Armena (iv) Kingman (v) Round Hill (vi) Viking (vii) Sedge-wick (viii) Lougheed (ix) Ohaton (x) Bawlf (xi) Daysland (xii) Strome (xiii) Killam (xiv) Forestburg (xv) Heisler (xvi) Ankerton (xvii) Rosalind (xviii) Kelsey (xix) Donalda (xx) Meeting Creek (xxi) Edberg (xxii) Ferintosh (xxiii) Bashaw (xxiv) Duhamel (xxv) New Norway (xxvi) Gwynne?


Hon. Joseph-Philippe Guay (Minister of National Revenue):: The information is not readily available for the following reasons: For shipments arriving by air, highway and mail, customs entries are prepared which show the importer's name and address. These entries are filed in Edmonton by customs entry number and are held on file for five years. All entries for goods cleared at Edmonton, numbering approximately 225,000 for 1976-77 would have to be reviewed to determine if the address of the importer was one of the 26 locations mentioned. For shipments arriving by mail which are released as being free of duty and turned over to the post office for delivery to the importer, Customs maintains no record of the number of parcels so released.


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


Some hon. Members:: Agreed.


Allan Frederick Lawrence: Mr. Speaker, I gave you notice that 1 intended to ask leave today to move the adjournment of the House under the provisions of Standing Order 26.
On Friday afternoon, after the House adjourned for the weekend, Petro-Canada, a federal Crown corporation, committed itself to buy 48 per cent of Pacific Petroleums Ltd. of Calgary, and further committed the government to a potential minimum liability of $1.4 billion, without reference to parliament. This agreement is subject to conditions respecting the management of Pacific Petroleums Ltd. which must be made almost immediately. We heard the minister indicate today that
there is an important meeting on Thursday respecting that very matter.
If parliament is to have any input at all into the decision which substantially alters the nature and structure of the market, and commits parliament to massive but unapproved expenditures, it must intervene, in my submission, to defeat this matter immediately before the transaction is finalized. Therefore I move:
That this House do now adjourn.


Mr. Speaker:: Order, please. The hon. member, of course, would have to have the permission of the Chair to make that motion and then, in accordance with the terms of Standing Order 26, the motion would be made, not at this time but at some time later if it was my disposition pursuant to that standing order to grant his application that this was a proper matter to be discussed within the terms of Standing Order 26.
There are a number of aspects within the standing order to which I want to refer briefly. The first relates to a matter coming under the administrative competence of the government. According to subparagraph 5 of the rule, in determining whether the matter should have urgent consideration I have to give some consideration to the opportunity to discuss it in other ways and the extent to which that might be satisfactory in the circumstances.
Finally, subparagraph (16)(a) of the rule reads:
The matter proposed for discussion must relate to a genuine emergency, calling for immediate and urgent consideration;
There has been some body of law or some argument that under Standing Order 43 the urgency really need only be urgency of consideration, but under Standing Order 26 this subparagraph of the rule certainly takes it simply as urgency of consideration and introduces an element of genuine emergency. In order to accede to the hon. member's request at this time, therefore, it seems to me I would have to find that a transaction, which on the face of it appears to be within the normal orbit of the purpose for which this Crown corporation was set up in the first place, had in some way become an emergency.
While it is obviously an impressive transaction and a very important transaction and, therefore, certainly cannot be brushed aside as an unimportant matter, nevertheless I do have the view, at least on the basis of the information I have at the present time, that there was nothing irregular or extraordinary about the transaction, and that it was within the competence of the Crown corporation which was set up for this kind of transaction by this parliament. It would therefore seem to me that without some element of an extraordinary nature or irregularity, at least by an initial impression, it would not be the proper subject for consideration pursuant to Standing Order 26.
In other words, the Crown corporation, being a creature which is given an independent life and authority by parliament, I think it would be quite extraordinary for parliament to recall the activities of that very independent Crown corporation each time the Crown corporation entered into a transac-

November 13, 1978
Movement of Grain
tion. While it may wish to do so, I think it would have to do so in regular ways, such as the examination of the minister upon his estimates, or by participation in a budget debate, which we know is going to begin later this week. There is nothing to stop discussion of it in parliament obviously, as was evidenced in the question period.
In order to qualify for consideration under Standing Order 26, however, something of an emergent nature or extraordinary nature would have to be demonstrated. Whether that would be in the nature of an irregularity or not, I am not sure, but in any case at this time-always without prejudice to the right of any member upon further information to apply again-upon the information available to me I do not consider it to be a proper subject for consideration as an emergency debate pursuant to Standing Order 26.



GOVERNMENT ORDERS


Mr. Les Benjamin (Regina-Lake Centre) moved:: That this House condemns the government for its failure:
(a)	to require the railroads to add 4,000 hopper cars and 5,000 repaired
boxcars to their grain fleet; and
(b)	to give the Canadian Wheat Board total authority to co-ordinate all
aspects of grain movement and any other authority necessary to protect and
expand grain exports.


Mr. Speaker:: Members will note that proceedings on this motion expire in the ordinary course later this day pursuant to Standing Order 58(11).


Leslie Gordon Benjamin: Mr. Speaker, the purpose of this motion has been apparent during the course of the late summer and this fall. It was obvious in this chamber through the number of questions raised on the matter by members of the opposition parties.
Since we are faced with the requirement to move a record or equal to record volume of grain over the coming winter months, my colleagues and I thought this an appropriate motion through which to bring to the attention of parliament, as well as to the minister, some factors that have put Canada and Canadian producers into the present situation.
This is the situation in a nutshell. In spite of the fact that the minister and the government have provided 8,000 hopper cars, and I am certain he will mention this two or three times in his speech-by the way this was a measure supported by members on all sides of the House-we have a smaller capacity and capability to transport grain now than that existing at the end of 1972.
Further, the reason for the motion is to illustrate how the railroads have betrayed and double-crossed not only the Minister of Transport (Mr. Lang) but the taxpayers and the grain producers in western Canada. While the minister is busy telling us that all is well, in my opinion the railroads are on strike. They are threatening the Canadian Wheat Board's ability to compete for grain sales. When I say railroads on strike, I mean railroad management.
To put it mildly, the Canadian Wheat Board is the farmer's friend. It is doing a good job. It is doing the best possible job it can, but it needs more authority to co-ordinate grain movement in order to protect our present grain sales and to expand them. At present, sir, the Canadian Wheat Board is not in a position to take on new and additional contracts because our capability and our capacity to move grain to export positions has not increased, in spite of the contributions of the Canadian taxpayers. They have, in my opinion, decreased.
More than ever before the Canadian Wheat Board needs more authority. Yet I find this incredible situation where the Leader of the Opposition (Mr. Clark) attacks the principle of orderly marketing in the Canadian Wheat Board itself.


An hon. Member:: Shame!


Leslie Gordon Benjamin: It is bad enough that the Conservatives supported the minister in charge of the Wheat Board when he took feed grains away from the exclusive jurisdiction of the board. But the Leader of the Opposition said in August of last year that the private grain trade should be allowed to compete with the Canadian Wheat Board for export sales. The whole purpose of setting up the Wheat Board in the first place was to eliminate the private grain trade from export sales.


Mr. Mazankowski:: Who set it up, the CCF?


Leslie Gordon Benjamin: That would lead to the ultimate destruction of orderly marketing in the Canadian Wheat Board. What R. B. Bennett gaveth in 1935, the present leader of the Conservative party is going to taketh away. The Wheat Board can sell wheat; it has sold wheat. It needs the support of everyone in this chamber, let alone everyone in this country in order to get on with the job. Let us not burden it with the so-called free market thinkers and, an unco-operative railroad system.
The advisory committee for the Wheat Board has said that transport delays in the last crop year damaged Canada's reputation as a supplier, and cost farmers $150 million in lost grain sales. Canadian Wheat Board spokesmen are now saying that deferred sales so far this calendar year total $350 million and that demurrage charges on ships, mostly waiting in Vancouver harbour, will add another $25 million.
Deferred sales is a nice term for lost sales, or sales for which we did not apply because of the Board's knowledge of our inability to meet those commitments. That is money out of the farmers' pockets. It is a lost opportunity for the Canadian economy. It is money out of the Canadian economy. We cannot expand grain sales because of transport constraints. Once more, once we get behind in shipments of grain, we stay

November 13, 1978

behind. There is no surge capacity between our two major railroads to catch up on shipments. The Canadian Wheat Board just signed a three million tonnes contract with China, not because that is all it wanted to supply to China, not because that is all that China wanted, but because that is all the Wheat Board felt it could live up to in deliveries.
There are two reasons why we are not moving the wheat we could be moving. First, the railroads give low priority to grain movement, and are phasing box cars out of grain service at an excessive rate. Second, the Canadian Wheat Board does not have the authority required to co-ordinate the entire grain movement system. It is compounded by the government's open market feed grain policy, which is plugging the system.


Donald Frank Mazankowski: It is not. Prove it.


Leslie Gordon Benjamin: My colleague, the hon. member for Vegre-ville (Mr. Mazankowski), says it is not. I would refer him to a statement, which I cannot lay my hands on at the moment, I believe from an official of the Canadian Wheat Board-there is also a statement by a minister in the government of Saskatchewan-confirming that off board grain sales are plugging our Canadian country elevator system and preventing the Wheat Board from doing a better job on our export commitments.


Donald Frank Mazankowski: Document your facts.


Leslie Gordon Benjamin: Both of these problems have been caused by private enterprise governments which say they favour competition and free enterprise in transportation and grain markets. They have forgotten about the competition we have with other exporting countries. They have forgotten that Canadian grain producers compete, they have always had to compete, with the treasuries of other grain exporting countries.
Who is running this country? Is it an elected democratic government and a democratic parliament-


An hon. Member:: The CPR.


Leslie Gordon Benjamin: -or is it Cargill Grain Company and the CPR? The railroads, particularly the CPR, are phasing box cars out of grain service at a phenomenal rate. They have reduced our capability to move grain. They are blackmailing the taxpayers and the grain producers. There are not enough railway cars to get the grain to waiting ships even though the government, as I said earlier, has provided the railroads with 8,000 new hopper cars. As the government has bought these cars and put them on stream, the railroads have phased out their own boxcars and utilized these free hopper cars which they got as donations from the taxpayers.
At the end of 1972 the two major railroads had 26,000 boxcars which they owned in grain service. By July 31, 1978, that figure was less than half; there were only 12,800 boxcars available. They had taken 13,200 railway boxcars out of grain movement. The 8,000 hopper cars we provided them is equivalent to 12,000 boxcars. On those figures alone-and there are others to make that picture look even worse-we have some-
Movement of Grain
thing like 1,300 fewer rail cars available for grain movement now than we had before the taxpayers bought any hopper cars six years ago.
The government and the minister have known the railroads are scrapping their boxcars. What have they done about it? The government provided incentives totalling about $4 million a few years ago for repairs. The railroads have been given another 15 per cent depreciation allowance for purchase of new rolling stock. They now have a deal to repair up to 1,000 box cars each, with the government paying half the cost, and the CPR says that it will not do it. Even if the CPR did do it, it just is not good enough. The Canadian Wheat Board says "We need a minimum of 5,000 repaired boxcars returned to the movement of grain." Not only has the CPR refused to co-operate and repair the boxcars, it has said that it will not repair boxcars unless it requires less than 40 man-hours of work.
Since 1955 the railroads have laid off 48,000 employees. According to Mr. Justice Hall, most of the jobs were made obsolete in the repair and maintenance of way divisions. They were made obsolete by the policies of the railroad management. Let's put people back to work. One way of putting some people back to work is repairing railway equipment which the Canadian Wheat Board says is needed for grain movement.
We need 4,000 new hopper cars. That takes time. The railroads should be required to order those new cars now so that when they start coming on stream 12, 15 or 18 months from now, they will be available to add to our grain movement capability. However, that will not get us through the crunch coming this winter.
In addition to phasing out boxcars, the railways are giving grain movement a low priority. That is being done for one reason only, blackmail for abolition of the statutory or Crows-nest grain rate. Last year there were grain cars sitting on sidings all over the prairies waiting for days and weeks to be moved, while trains carrying other goods rushed past. The National Farmers Union, in an aerial survey and other investigation by individual members, found 1,213 boxcars sitting on sidings unused, with only minor repairs needed to put them back into service.
The railways' campaign to bog the system down will intensify this winter. Even if we have no snow, they will close hundreds of miles of branch lines for weeks and months on the excuse it is due to winter conditions. This is something the Minister of Transport has not told parliament or the people of Canada, although I am sure Canadians are intelligent enough they do not need to be told.
When the ground freezes in the winter, you can run trains over railway track even if it is in poor condition. The excuse of heavy snow conditions last year applied in a few small areas. In most of the prairies it was an average or less than average snowfall, yet hundreds, of miles of branch lines were closed, some for as long as three months. Our grain producers are getting fed up. I hope the Canadian people are getting fed up
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November 13, 1978
Movement of Grain
with this kind of blackmail. It is time to legislate the railroads back to work.
The way to get railroads to move grain is not to cave in to their blackmail, but to make them live up to their statutory and historic obligations to provide service. The government can and should require the railroads to add 4,000 new hopper cars, for which they pay, and 5,000-although I would prefer 6,000-repaired boxcars to their grain fleet.
The addition of 4,000 new hopper cars would generate more than $700 million a year in additional foreign sales and foreign exchange for Canada. Therefore, this would not benefit only the grain producers. It would benefit the nation as a whole.
Handing the railroads more money and more hopper cars will not guarantee better service. Surely the minister has been double-crossed enough times to realize that. Grain rates in the United States are more than four times as high as those in Canada, yet they have a chronic shortage of grain cars. In fact they keep trying to use as many of ours as they can. They have a grain movement or railway system that has broken down even worse than our own.
The governments must require the railroads to provide service. The Canadian Transport Commission, which is under the jurisdiction of the Minister of Transport, has that authority under Section 262 of the Railway Act. Why is it not being enforced? Section 262 reads:
The company shall, according to its powers,
(b)	furnish adequate and suitable accommodation for the carrying, unloading and delivering of all such traffic;
(c)	without delay, and with due care and diligence, receive, carry and deliver all such traffic;
(d)	furnish and use all proper appliances, accommodation and means necessary for receiving, loading, carrying, unloading and delivering such traffic; and
(e)	furnish such other service incidental to transportation as is customary or usual in connection with the business of a railway company, as may be ordered by the commission.
The authority is in the law now. Why is the Canadian Transport Commission not enforcing the law? Why is the Minister of Transport, who is in charge of the Canadian Wheat Board, not calling upon the Canadian Transport Commission on behalf of Canada and the Canadian grain producers, to enforce the law which requires the railroads to furnish adequate and suitable accommodation for the carrying, unloading and delivering of all traffic?
The railroads have been treated very generously. They receive $160 million a year in branch line subsidies. They have been given the use of 8,000 hopper cars with which to haul grain. They have been promised something in the order of $700 million over the next eight years to fix up their railroad lines.
Mr. Justice Hall said, "Stop giving out gifts." He said giving $600 million to the railroads is totally unjustified. He said the railroads should continue to charge the Crow rate for moving grain, and any losses they incur for that service should be paid directly to them by the Government of Canada on behalf of the people of Canada. We support that basic and fundamental recommendation of the Hall royal commission.

The statutory grain rate is not some handout or subsidy to western grain producers. It is an essential tool for this nation through the Canadian Wheat Board, to compete with other exporting countries, to allow Canada to place its grain in export position in competition with other grain exporting nations. Any other benefits to the statutory grain rates are ancillary to that basic fundamental principle, the reason for having statutory grain rates.
If there are proven losses in the transport of grain under the statutory rates, we agree with Mr. Justice Hall that, since the nation as a whole benefits from these massive grain export sales, the nation as a whole has an obligation to share in the costs that are incurred in arriving at these benefits.
Mr. Justice Hall also said the railways must be made responsible once the first recommendation that I mentioned has been accomplished. They must be made responsible to use that money to buy grain cars and to fix up their track. The Hall report has provided a framework within which the Canadian Wheat Board and the country elevator system could serve this country even better than they have for many years.
Mr. Justice Hall also recommended that the Canadian Wheat Board be given a greater role in coordinating the movement of grain. He said the railroads must be required, and the minister can do this, to give the Wheat Board all the information the board needs. At present the Wheat Board is not even provided with the serial numbers of individual railway cars in the grain fleet. The Wheat Board therefore cannot check on where the cars are.
The Wheat Board knows how to coordinate the movement of grain. It can look at the whole system, from the farmers' yard to the country elevator system, to the ships in the harbour where the grain is loaded. It knows the kind and quality of grain needed at each terminal to fill waiting boats.
I have not said anything about waiting boats. That problem is not peculiar to Canada. It occurs in all grain exporting nations. Any time there are 15 or 20 ships waiting in Vancouver harbour, you will find either the same or a worse situation in Sydney, or Melbourne, Australia; in New Zealand, Seattle, or Buenos Aires. There is nothing unusual about it. The government through the Minister of Transport and the Canadian Wheat Board, should be getting together with other exporting countries to have some kind of co-ordination in the movement of marine shipping which presently, in my opinion, is operated like a bunch of gangsters.
The Wheat Board needs to be given exclusive authority to market feed grains. In 1974 the minister, with the support of the Conservatives, took that power away from the board and, as a result, the parasites who speculate on the farmers' labour have gained, and the farmers have got less.
The result of this for our transportation system this year will be near disaster unless something is done to remedy the situation. There are no quotas restricting delivery of non board feed grains. The delivery system has been plugged, forcing the Wheat Board to allocate cars, not to move grain to Vancouver
November 13, 1978

or Thunder Bay or Churchill or Prince Rupert for export, but to move the private enterprise off-board grain. The unrestricted delivery of non-board feed grain is destroying the equality of the quota system for which farmers in the west have fought so hard. Every bushel of non-board grain entering the system displaces capacity to handle the export grain which is the bread and butter of the grain farm economy. There will be a serious shortfall of grain movement this winter unless the government finds the will to take action.
In the short-term, we need to speed up grain movement this winter. In the long-run, we need basic structural changes to make sure that railways serve people and serve the country, instead of serving a board of directors concerned only with a profit motive. The CPR does not intend to co-operate with this government. It has not co-operated with any other, so why should it co-operate with this one? For years it has dictated policy to successive old-line party governments. And it has the muscle to do it; it is a large corporation with a lot of friends in political circles. Indeed, one John Turner who used to be in this place is now on the board of directors.
Even the Leader of the Opposition is going in to bat for the CP to get it more airline business. After all the help we have given the railroads, after all we have given CP since 1885, the Leader of the Opposition says "Let's give them some more". If there was any validity to his claim that Canadian Pacific should be given a larger share of the airline business, I would say to the Leader of the Opposition: make it conditional. He should demand that the railway substantially improve tracks and its capacity to move grain, in which case consideration might be given to letting it have more airline business.
I never thought I would have to say this, Mr. Speaker, but the Minister of Transport and Minister of Justice is chicken. I had always thought that was one of the last things he would be. He has been double-crossed by railway management, one publicly and the other privately owned. It is true Canadian National has agreed to repair 1,000 cars, half the number it should be attending to, provided the public pays half the cost. The Minister of Transport, the Minister of Justice, the minister in charge of the Wheat Board-they are all the same person-lets them get away with it. He has the authority under the law or, if he does not, he can damned soon get it either from cabinet or from this parliament.


Stanley Howard Knowles: He should talk turkey.


Leslie Gordon Benjamin: Yet the Leader of the Opposition is so mesmerized by private profit in transportation that he has joined those who do not want to make the CP provide the service it is supposed to offer. The CPR won't carry grain, it won't carry people and, under successive old-line governments, it has the country to gain and nothing to lose except the taxpayers' money.
The Leader of the Opposition defends an outfit like the CPR and wants to give it more. Already that company owes the people of Canada $580 million in deferred income tax. I could be a big wheel private enterpriser too, with a deal like
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that. If it had not been for subsidies paid every year to CP since the middle of the "dirty thirties"-there is no need to go back to 1885-the company would never have shown a profit in all those years. It could not have survived had it not been for largesse from the people of Canada. The company received $102 million in handouts last year. And what do they do? They sabotage grain movement, and the Leader of the Opposition says, "Let's give them some more." He wants to give them more of Air Canada's routes. Those routes were built up by the people of Canada at a time when private enterprise would do nothing. Now that they are established, now that Air Canada is a money-making corporation, along come CP together with the private enterprisers and their supporters, and say, "We want the gravy; we will leave the non-gravy, the money-losing parts, with public enterprise; the taxpayers can pick up the tab."
Canadian Pacific does not even like to tell us how much its president is paid. We had to get that information through the U.S. Securities and Exchange Commission. Poor fellow, he lived up to the guidelines. He only got a 10 per cent increase last year. He went from a salary of $300,000 a year to $336,000 a year. But we had to find that out under the laws of another country. This is symptomatic. It indicates the political power and muscle which the CP possesses. That corporation is a law unto itself. Canadian Pacific is bragging about a record profit of $233 million. But it will not co-operate when it comes to repairing its own equipment even though the taxpayers are prepared to pay half the cost. Of that $233 million profit, $51 million came from CP Rail.
We should not forget that the empire which CP has built up was made possible in the first place by public gifts provided to the company in exchange for a commitment to supply public services under principles enshrined in the statutory grain rate provisions, the Railway Act, the Canadian Pacific Act, and other legislation going back to 1881. Canadian Pacific has chosen to relieve itself of the obligations it assumed in exchange for these gifts from the people of Canada. I might add that these gifts were not looked upon as such at the time they were made. They were regarded as part of a contractual process, part of a bargain under which the company would provide the transportation services required by a country with our geography and climate. That contract has been broken.
The people of Canada have been double-crossed. CP has thumbed its nose at successive national governments and has given the grain producers and the taxpayers to understand that it has no intention of carrying out its responsibility to maintain and increase its grain carrying capability. Canadian Pacific has no intention of fulfilling its responsibility to enlarge its capacity in order to increase still further our grain export sales.
The minister will talk about the movement of 850 million bushels. That is good. That is a large amount. But where do we go from there? If we do not keep moving ahead we shall start falling back, as the figures I have given illustrate. Our capacity is at best only equal to what it was six years ago. I submit that it is, in fact, less than it was six years ago.
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We believe the solution is to make the major elements of transportation a public facility, with public ownership and control, with public accountability-


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. Does the hon. member have unanimous consent to continue?


Some hon. Members:: Agreed.


Leslie Gordon Benjamin: Thank you, Mr. Speaker, and 1 thank my hon. colleagues for giving me a few more minutes. I promise to take only a few more minutes. I will complete the sentence I had begun. Since Canadian Pacific has chosen, being a law unto itself, to relieve itself of the obligations it took on in exchange for the gifts of the Canadian people, the agreements entered into and the law of the land, it is time for Canada to bring the entire operation of Canadian Pacific Limited under public ownership and control. It is past time.
I want to close my argument by spending two or three minutes discussing our grain exports and our capacity to meet increased demand for grain. I mentioned at the beginning of my remarks that the Canadian Wheat Board completed a contract with the People's Republic of China for some three million tonnes. This contract took effect September 1.
Last spring-and I raised this matter in the House in questions to the minister-the U.S. department of agriculture predicted that Canada would not be able to take advantage of increased opportunities for enlarged grain sales to China. The U.S. department of agriculture said that that would be because Canada's capacity to deliver grain was seriously in question and, that this would be evident by November of 1978.
The Americans have not been able to get into the People's Republic of China market for a number of reasons. One has been that some of their own laws have prohibited credit sales to China by either the United States government or any other seller in the United States. However, as of just a few weeks ago the United States completed its first major contract with the People's Republic of China for 3.2 million tonnes of grain. Had our railroads lived up to their responsibilities and transferred some of their activities to the rehabilitation of their plants, the repair of their equipment and the purchase of equipment for grain movement to a greater degree than they did, that would automatically have placed the Canadian Wheat Board in a position to move to even larger contracts.
I do not doubt for a moment that the Canadian Wheat Board could have negotiated a contract with Red China for four million tonnes instead of three. Had the capability been in existence, the Canadian Wheat Board could have negotiated a contract for up to six million tonnes, which would come out of the total Canadian production of 38 million or 39 million tonnes.
Excellent work is being carried on at Vancouver with the expansion of our grain terminals. The minister has mentioned

that. I am sure he will mention it again. We all agree that that is good. United Grain Growers, Saskatchewan Wheat Pool and Alberta Wheat Pool have been and still are expanding and improving their capacities and capabilities at Vancouver. Work is in progress, or will be, in Prince Rupert. There is not much use in doing all that if the key part of the grain movement chain between the farmers' own elevators and those ports remains inadequate to keep doing even as well as we have been doing, and we certainly will not be able to increase our exports to countries such as China.
Mr. Forrest Hetland, a Canadian Wheat Board commissioner, spoke to the Canada Grains Council semi-annual meeting last October 18. Incidentally, I cannot help but say that that was a great day out west, at least in one part of the west. Mr. Hetland said that rapid expansion for world wheat and feed grain export markets is projected. He said that even if Canada's export market share stays where it is, more farm production will be needed and more will be expected from the grain handling system. He said that by 1985 Canada could be exporting about 20 million tonnes of wheat and about 10 million tonnes of feed grains. The most Canada ever exported was 21.4 million tonnes, and that was six years ago. Mr. Hetland said that increased rail capacity, more terminal storage, and aggressive marketing from the Wheat Board is needed if Canada is to reach its potential. He went on to say:
We will have to have a handling and transportation system that can cope, not just with the average months and years, but with the peak months and years as well.
I am happy to see the country elevator system and the grain elevator companies, particularly farmer-owned elevator companies, the pools and the UGG, moving ahead, upgrading and increasing their capacities at their country grain elevators, and upgrading and increasing their capacity at their grain terminals at Vancouver, but that has not been the case with both our railroads. I have said before in this House that we should re-nationalize CN and nationalize CP. Unless there is massive investment to improve railway plants, then the beginning of the system, the country elevator, and the end of the system, the terminal elevator, will sit inadequately used and not capable of living up to their potential. Our railroads are the pipelines between those two systems, and there has been a breakdown.
I urge this government and this minister to accept the recommendations of Mr. Justice Emmett Hall on the matter of statutory grain rates. The railroads should be reimbursed for any deficit on the cost of moving grain. The railroads should be required to purchase equipment. The government should not have to do this. The railroads should be required to live up to their responsibilities.
I urge this minister to enforce the Railway Act. I am not a lawyer. I am just an ordinary, innocent country boy-


An hon. Member:: Innocent?


Leslie Gordon Benjamin: -but as I read the Railway Act and as I understand English, there is authority there for the Canadian Transport Commission and the minister to require Canadian Pacific or any other railroad to live up to its responsibility and
November 13, 1978

to meet the transportation requirements of the people of Canada.
Another reason so much has been done for and given to Canadian Pacific since 1881 is that the people of Canada recognized at that time that our climate and our geography must be taken into account and that, because of the nature of our country, there cannot be competition, duplication, and private ownership in transportation. In a country such as Canada those things do not work. It is totally unfair to expect one individual or company to carry a load and suffer a loss on something which benefits the nation as a whole. I do not expect the board of directors of Canadian Pacific to donate $ 100 million a year to Canada if that means a loss for them in their total operations, but I do expect them to contribute their share.
Surely transportation costs should be shared by the people of the nation as a whole. That sharing can best be done through a publicly owned transportation system which is paid for by the people of Canada, and is accountable to them. With public ownership Canadians would know that they would be provided the kind of service, the amount of equipment and the quality and capability which are needed for our grain production to continue to compete and to allow us to increase our share of the responsibility for feeding the world.
I want to close by saying one last thing. This situation is not peculiar to just the transportation of grain. There has been a never ending problem with our railroads from coast to coast. Newfoundland is still not part of confederation when it comes to transportation. Transportation has been a chronic problem for decades in Prince Edward Island and New Brunswick because of insufficient railway equipment and low locomotive power to move their potato crop.
For decades there has been a never ending problem with transportation in all parts of Canada because of insufficient railway equipment and inefficient locomotive power to move livestock. It has been a never ending problem in southern Ontario and in British Columbia, which has been going on for years because of insufficient railway equipment and insufficient capacity to move our fruit crop.
Every year when it is time to export lumber, there has not been sufficient equipment to meet the demands. So the situation is not just peculiar to the transportation of grain. For decades both our major railroads have set a record in inadequacy. The matter has been brought up in parliament year after year, by members in all parties, and the situation has never been corrected.
This government and its predecessors have continued to cling to and clutch the concepts of the 1890s of competition and profitability in transportation. No other country in the world, other than Canada and the U.S., cling to and clutch that concept any longer. In other countries, private enterprise and governments have taken action decades ago, and have shown what can be done. It is time that this parliament acted.
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Donald Frank Mazankowski: Mr. Speaker, we on this side of the House also welcome the opportunity to debate this very important issue, and I am particularly pleased to enter the debate at this time. It is certain that this debate is timely. With each passing day we find the transportation system in this country becoming progressively worse. There is no question but that it requires some serious attention very soon.
I want to join my friend, the hon. member for Regina-Lake Centre (Mr. Benjamin), in condemning the government for its failure to provide strong and firm leadership in this area. I want to condemn it as well for its failure to live up to its commitments given at the Western Economic Opportunities Conference in July of 1973, and reiterated in the election campaign of 1974. Those of us who campaigned at that time all remember that great declaration by the transport minister, echoed by the Prime Minister (Mr. Trudeau), "Elect us and we will revamp the grain handling system from the granary on the farm to the ship in the harbour." It is significant to note that since that election campaign of 1974, the record will clearly show that the over-all capacity of our grain handling and transportation system has not increased and we have not come close to meeting the targets of which the minister spoke so boldly during that election campaign.
Quite frankly, what is happening is that the producers and the people of Canada simply do not believe the government any longer and do not trust it. Anything that is said by the government is taken with a grain of salt and considered as a measure of jockeying for maximum political advantage.
What is interesting to note as well is that in the throne speech which opened the last session of parliament-I presume it is the last session-no mention was made of grain handling and transportation, notwithstanding the fact that the Speech from the Throne addressed itself to two very important issues in the country, namely, national unity and the economy. I find that very strange, because surely maximizing our grain export opportunities is one way in which we can assist our balance of payments, stimulate the economy, and improve the over-all position of the western grain producers.
Having said that in dealing specifically with the motion, I have to say that I find it far too restrictive and too narrow in its over-all approach. To listen to my friend, the hon. member for Regina-Lake Centre, you would have to conclude that if the minister forced the railways to add 4,000 hopper cars and repair an additional 5,000 boxcars, and gave the Canadian Wheat Board more power, all our problems would be solved.


Leslie Gordon Benjamin: Move an amendment.


Donald Frank Mazankowski: We have not resorted to that rather unorthodox exercise of moving amendments to motions. This has been the habit adopted by the NDP.


Stanley Howard Knowles: Careful! You tried to bring in an S.O. 26 today.

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Donald Frank Mazankowski: Quite frankly, we think this is an opportunity to bring forth comments and recommendations by the respective political parties. To be quite honest, I find the motion very simplistic. We think that the problems with respect to grain handling and transportation require a much more comprehensive analysis and solution, and that simply to confine ourselves to the two elements contained in the motion,
1 do not think, with all due respect to my friend, would resolve the problems in grain handling and transportation.
Once again we have noted today that the NDP is using its age-old whipping boy, the CPR, to advance its solutions to the problem. I was wondering whether the hon. member was going to go so far, but he finally did get to the point when he renewed his party's suggestion and belief that CPR should be nationalized. That too is a very simplistic solution which, in my opinion, does not deserve serious consideration. While saying that, I acknowledge, as, I am sure, do all other members of the House, that certainly the railways must share the responsibility in this very important issue, but it requires a much more penetrating insight than simply to attack the railways, as did the hon. member for Regina-Lake Centre. I suspect he thinks it is great political fodder for him in his constituency and indeed in the province of Saskatchewan, and perhaps to some extent in Alberta. Quite frankly, I think he is less than fair in confining his remarks to that particular sector.
I think he is being unfair, and he should know that there is a whole lot more to the question of grain handling than simply the railways.
There is much hypocrisy which emanates from my friends to the left. We have been talking about the importance of moving grain to export, and yet when the government brings in legislation to end the engineers' strike on the Great Lakes-an action which received almost unanimous support from western Canada, including the socialist premier from Saskatchewan, urging the Prime Minister and the Minister of Transport (Mr. Lang) to end this strike-what did my friends from the NDP do? They voted against that measure.


Some hon. Members:: Shame!


Donald Frank Mazankowski: Whom do they serve, the union leaders or the farmers? They cannot have it both ways. Here is a classic example of the kind of hypocrisy that emanates from those members time after time, and the plot seems to thicken when we get to an election period. My friend cannot have it both ways-he has to serve one master, not two.
The hon. member says that the Canadian Wheat Board should have more authority. I am not sure to what authority he is referring. He also pointed out that one of the problems we have in the country today is that the system is plugged with non-board grains. I challenged him to document that evidence, but he could not or would not. I am not sure whether he has that information, but my figures indicate that the stocks of non-board grains range anywhere from 3.5 per cent to as high as 6 per cent in some elevator systems.

If he and the hon. member for Yorkton-Melville (Mr. Nystrom) knew anything about farming and had to face the challenge of meeting fertilizer and fuel bills, they would know very well that the open market price for barley is the same and sometimes greater than the initial price paid by the Canadian Wheat Board. If farmers want to maintain a cash flow and pay their bills, they are forced to sell on the open market, because the Canadian Wheat Board simply is not selling barley. I challenge the hon. member to telephone the Canadian Wheat Board. He will be given the same answer. There does not seem to be much opportunity for an additional quota on barley in the foreseeable future. At least that is what I have been told by officials in the Canadian Wheat Board.
There are many complexities in the grain handling and transportation system. They involve producers, grain handling companies, railways, workers involved in the various sectors of this business, shipping fleets, the Canadian Wheat Board, and customers. The smooth operation of the grain handling and transportation system is affected by internal and external influences. As a matter of fact the weather has a great bearing on the success of the operation of the entire system.


Leslie Gordon Benjamin: That is Otto's excuse.


Donald Frank Mazankowski: I have to agree with the minister in that regard. Anyone associated with the production and movement of grain would realize that the weather cannot be overlooked.
Today the system is in a mess. The mood is strong in western Canada. There is frustration and disgust over the inability to move grain. The country elevator system literally is plugged. More than 75 per cent of its potential capacity is utilized. The stocks are 40 per cent to 50 per cent higher than a year ago. Producer-farm deliveries this year are down 35 per cent to 40 per cent from a year ago. Farm stocks amount to approximately 42 million tonnes. They have increased 20 per cent from a year ago. I see the minister shaking his head. These figures come from the Canada Grains Council and the Canada Grains Commission. Perhaps they have changed in the last week or so, but they are the ones I have. The terminals are less than half full. There are 35 per cent less stocks than a year ago.
The Canadian Wheat Board stated categorically that it has turned down barley sales. We are losing out traditional markets of Russia and China. I agree with the hon. member when he expressed concern about the fact that we face some stiff competition from the United States in terms of maintaining our market with China. According to the Canada Grains Council, our present stocks of wheat, including the production of this year and the carryover of last year, are in excess of 30 million tonnes. That represents almost half of the total world wheat trade.
There is concern about the breakdown in the co-ordination of the movement of grain in the country and the interface between matching up our markets and our shipping targets. The Canadian Wheat Board has summarized this problem by
November 13, 1978

pointing out three needed requirements to bring about some relief. It suggested that rail rolling stock is declining, rail capacity through the mountains is limited, particularly during the winter when cars are available and demand is the heaviest, and that the terminal capacity on the west coast is not adequate to buffer present shipping variations or to meet the increased requirements of importers in the future. I am referring to an address which was given by Mr. Harold F. Bjarna-son, senior economist of the Canadian Wheat Board, before the Canada Grains Council meeting in Calgary on October 18.
To counter that, we have heard claims by the railways of underutilization of railway capacity. At the present time there are suggestions which indicate that only 50 per cent to 70 per cent of railway capacity is being utilized en route to Thunder Bay, and 40 per cent to 60 per cent is being utilized en route to Vancouver. Those statements seem to conflict. They bear close scrutiny and study. There have been labour problems which affected the Port of Churchill. There were two labour disruptions which affected the Port of Thunder Bay. In some measure that disruption resulted in the differential of 2.3 million tonnes of grain between this calendar year and next. Translated into dollars and cents, it amounts to approximately $350 million to $400 million of loss to Canadian producers.
The Canadian Wheat Board study of the last crop year, which was attested to by its senior economist, Mr. Bjarnason, indicated that we could have sold 25 million tonnes of grain if we had the capacity to move that amount. As it was, we settled for sales in the order of just over 21 million tonnes. That four million tonnes represent a direct loss to the Canadian economy of approximately $500 million. There is a major breakdown in the system. Unless we do something immediately to turn this situation around and correct it, Canada will face the prospect of losing its traditional position of leader in the forefront of world export trade.
We must address ourselves to two matters immediately. First, we should clean up our act immediately. We must utilize to the maximum the existing facilities and capacities. A number of suggested solutions have been advanced, some of which are being considered, some of which have been implemented partially, and some of which are not being considered. Second, we must build in sufficient additional capacity to meet the market projections of the 1980s. We are looking at a very significant quantum leap in our ability to move grain to export markets.
Rather than pointing the finger at the railways, Canadian Wheat Board, or grain companies, I hope we can rationalize this issue in a serious and sensible manner. Structural changes are required, and perhaps there should be changes respecting detail.
I should like to advance some solutions, solutions which can be implemented in the immediate future, and some which will assist us in addressing the challenges of the future. First of all, it has become increasingly clear that we need a minister who can spend more time and give more attention to this very serious problem. I have no qualms about the minister's ability in discharging his responsibilities, but I think, in all fairness
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the farmers in western Canada, indeed, the agricultural sector itself deserves a minister who can spend more time and provide more leadership in addressing this very important issue.
We have studied this system almost to death. There are some very concrete suggestions and solutions that have been advanced by the Hall commission, and my colleagues will be talking about them throughout the course of the debate. We have appointed co-ordinators, commissions, and have had all kinds of studies. It is time we started implementing some of the recommendations which have been advanced.
In this area I do not think that we are moving fast enough. The minister talks of straining the system and seems to sidestep the issue by suggesting, "Well, if we didn't have so much grain produced on the farms, it wouldn't pose the kinds of problems we have." I often wonder what has happened to his great theme "building for a billion." It seems to have gone by the wayside. In that connection we cannot overlook the fact that it was this minister who conceived the idea of operation LIFT which paid farmers not to grow wheat. When he uses this kind of rationale we get a little suspicious.
As my friend from Regina pointed out, the system as it now stands restricts our capability and therefore our potential in the international market, by some 21 million tonnes. I would like to quote again from the speech of Mr. Bjarnason:
A yearly volume of about 21 million tonnes thus seems to be the maximum quantity our present system is capable of moving into export. If we had had greater capacity in our system, we would not have had to defer 1.5 million tonnes of export grain to the 1978-79 marketing year.


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


Some hon. Members:: Agreed.


Donald Frank Mazankowski: Mr. Speaker, under Standing Order 58(13) it says:
-and the member speaking immediately in reply thereto may speak for 30 minutes.


The Acting Speaker (Mr. Turner):: I would suggest that the portion read by the hon. member applies to the member who introduces the motion and the member who speaks for the government side. All other members are allotted 20 minutes.


Donald Frank Mazankowski: In that case, Mr. Speaker, I will be as brief as possible. I would simply point out, as my hon. friend has pointed out, that the current capacity of our facilities restricts our capability of moving more than 21 million tonnes of grain to the export position at the present time. If one looks at the fact that we have problems with respect to co-ordinating our movements, one has to question whether or not we are receiving effective management in that particular area. One wonders why we cannot develop the kind of marketing strategies that would coincide with the low demands in our shipping season.

November 13, 1978
Movement of Grain
As it now appears, the demand to move grain is the greatest in the winter months. It has been pointed out by the railways that the uneven utilization of their capacity, as a result of erratic shipping demands, causes their capacity to be reduced by something in the order of 20 per cent to 25 per cent. There is the problem of reducing the car cycle. If the car cycle were reduced by 10 per cent it would be the equivalent of providing some 2,500 additional box cars. The CN has stated that if they could reduce the car cycle by five days, west coast deliveries would increase from 350 million bushels to 525 million bushels. There is also the cleaning of grain which could be done on the prairies. We should be considering the utilization of the Canadian government elevators and increased utilization of the port of Churchill.
We must move quickly to increase our capacity on the west coast. If we are to export 31.5 million tonnes, it has been suggested that 50 per cent or even 60 per cent of that movement will be through the west coast. The most grain that has ever been moved through the west coast is nine million tonnes. The capacity will have to be increased at least to 15 million or 16 million tonnes, an increase of roughly 70 per cent. This is the area in which the government has failed miserably, because there are interested parties who wish to establish the kind of facilities, as for example, in Prince Rupert, which would give us the capacity or potential of moving 125 million to 150 million bushels annually. As well, we must increase further the terminal capacity in Vancouver. Clearly, it would be in the best interests of the grain producers in Canada and certainly of those producers who hail from the western part of Saskatchewan and the province of Alberta, because there are economic factors to consider as well.
I had a number of other suggestions I wanted to advance. Time does not however, permit. But I would like to conclude by saying that the farmers of western Canada and, indeed, the Canadian economy, can no longer tolerate the chaotic paralysis which presently exists. It seems to resemble the paralytic state of this government, and as a result the whole country is suffering, not only the farmers and the agricultural industry, but the economy as a whole, for when you run that $500 million in grain sales to the export market down through the economy, it has a ripple effect of five and a half times that much and provides jobs, homes, cars, etc. to people clear across the country.


Otto Emil Lang: Before addressing my remarks, Mr. Speaker, to the words of the motion put by the hon. member for Regina-Lake Centre (Mr. Benjamin), I would like to deal with a number of observations we have just heard from the hon. member for Vegreville (Mr. Mazankowski). In the course of his remarks he talked about a problem of credibility for this government. Certainly the misstatement of facts coming from him would scarcely bear out any case for credibility in his direction.
In his opening remarks the hon. member mentioned a transportation system that is getting worse-I forget what he said, whether it was day by day or week by week, but certainly he meant that over time it was deteriorating-and that is

complete and absolute nonsense. We have freight systems, whether by highway or by railway, which are effective and efficient, and more so year after year.
I presume the hon. member was addressing himself particularly to the railway method of carrying freight. The facts there show that the performance of railways is improving in a significant way year by year, measured in terms of productivity and the amount of volume carried, which is increasing, even though at the same time it is going to techniques which are more efficient, effective and are being carried out by a smaller number of people. That is the sign of an improved system and improved productivity, not the reverse.
The hon. member talked loosely of deliveries being down by 35 per cent, I believe his figure was, this year over last year by producers. That, again, is quite wrong. I do not have the latest figures in front of me but I hope to have them before I finish. 1 think they will show that we should be talking about closer to 10 per cent, and this after a year of all-time high producer deliveries. That is what we are comparing it with, not an average performance but an all-time high performance. I think this kind of factor should be known.
It should also be known that we are dealing with deliveries into the world market at record levels. We were within a hair of that last year, and this year with exports running at about
400,000	bushels above last year, it gives us every opportunity to reach a record performance again. These amounts are not insignificant, Mr. Speaker.
The hon. member for Regina-Lake Centre may say that the record we are talking about of nearly 830 million bushels of exports was six years ago. It should be remembered, however, that that particular level of exports and the fact that we were building up to those record levels during the years after I took responsibility for the Wheat Board and the grain business in western Canada-that record was possibly because of the accumulation of grain that farmers had on hand prior to 1970-71 and 1971-72. Prior to that, some individual farmers had unsold grain from three or four total crops on their hands.
That puts an important perspective upon the record deliveries of grain that we are achieving. It is only because we have had, in the current year and the two previous years, three crops which themselves are in the record setting category, that we have enough grain to deliver to go on testing the system year after year.
Let me put this another way, Mr. Speaker. Last year when there were record deliveries by farmers and nearly record exports by the Canadian Wheat Board, we also had the previous year's good production of nearly 44 million tonnes upon which to draw. If the crop had been even 10 per cent smaller we would have ended the year with something like 2'A million tonnes less grain on hand than we had going into the year. It was only because we had the record that we have a marginal increase this year over last year of stocks on hand on the farms. That is important because it bears on the question of how much capacity we ought to have and whether it is right
November 13, 1978

to build a system that can move 30 million tonnes today. I agree with the Canadian Wheat Board that a target of 30 million tonnes going into export in 1985 is realistic. Obviously by that date we will want to have built the parts of the system required to move that volume.
I agree with the faith of the Canadian Wheat Board, along with some significant groups of people, including farmers on the prairies, that we can increase production to sustain those sorts of levels of production which require us to export that amount, if not year after year, at least sufficiently often to require the equipment.
As the hon. member for Vegreville pointed out, I was perhaps one of the first to say that a billion bushels of exports is a realistic target to bear in mind and, when considering our rail system and the equipment we should have, that is the target for which we should aim. The Canadian Wheat Board calculations of earlier this year-not made on October 18 as was referred to by an hon. member but earlier in a meeting at which prairie ministers of agriculture attended to examine these questions with me and with the Canadian Wheat Board-arrived at a figure somewhat higher. The problem is how to build an effective and efficient system and how to do so at least cost.
The hon. member for Vegreville said that this is a complex system and that a very important issue is the interface, that is, the way in which different parts of the system work together. That is precisely why at this point, as part of our over-all move toward the efficient ability to handle 30 million tonnes of export, we have consultants in the field studying the interface. We expect them to come up with practical suggestions on exactly how the grain handling system should be improved to meet the expected growth.
I do not have to apologize that in the year 1978 we have a system which could probably move over 23 million tonnes if it were able to move that volume in a steady way as and when there is space and when the system has the capacity to carry it, and when we will move something in the order of 21 'A million tonnes, even allowing for problems. We want to build properly for the future and, of course, we will do that.
Let me turn now to the motion moved by the hon. member for Regina-Lake Centre. As is not too surprising on an opposition day, he starts by condemning the government, but then when he comes to the failures for which he condemns the government, he says particularly that it is our failure to require the railways to do certain things, such as to acquire
4,000	hopper cars and 5,000 repaired box cars, that should be condemned. Another part of his motion refers to giving the Canadian Wheat Board more authority to co-ordinate grain movement. I have some doubts about whether that additional authority is lacking at the present time, but that is another and complicated part of his motion.
His motion, therefore, says that we should have required the railways to buy these additional hopper cars and repair some additional box cars. He does not say whether we have the power to do so, but he was good enough to say that if we need the power we can quickly come back to parliament and get it.
Movement of Grain
Mr. Speaker, it is not often the government is assured that parliament will give power to it to do several things but, of course, railways are not treated by the hon. member for Regina-Lake Centre like other citizens might be.
Having said we should tell the railways to buy these hopper cars and repair the box cars, the hon. member then went to the question of financing. He criticized us for what he called "give aways"-presumably when we put up money to buy 8,000 hopper cars. He is presumably criticizing us for putting in $100 million last year and this year, and $70 million next year and in the future to rehabilitate branch lines, rebuild them, put on new rails, new ties and new ballast so they can carry fully loaded aluminum hopper cars, if not the steel variety, both of which we purchased. He said these things had been criticized by the Hall commission as well. Of course he is a little inconsistent there because Mr. Justice Hall also said that we need not buy any more hopper cars. The hon. member says that we ought to require the railways to buy them, however. He picks and chooses what we should do from the recommendations of the Hall commission report.
Having said we should not be giving things away to the railways, he made it clear that we should implement the next recommendation of the Hall commission report, that we should, presumably forthwith, begin to pay the railways the difference between what they get for moving grain on the Crow and what it costs them to move that grain. We had the Snaveley report on that, and an update of it will soon be available to the public. I can tell hon. members that the difference in the cost of moving grain and what the railways get for moving it, even after the branch line subsidy is deducted, is in the order of $175 million per year.
The hon. member wants us to stop buying hopper cars, stop rebuilding branch lines-to stop what he calls give-aways to the railways, but on the other hand he wants us to give the railways $175 million per year. I take it that what he is honestly saying with this motion is not that we are failing simply by not requiring the railways to build these cars, but that he is condemning the government for failing to pay the railroads $175 million or more a year and then require them to build some hopper cars and repair some cars. I must say, Mr. Speaker, that the railways would be delighted with that arrangement. They would not quite understand the hon. member's logic of being against give-aways but being in favour of giving away more to the railways for less performance than we are now getting from them. It simply does not make a great deal of logical sense.
In building a railway and transportation handling system which can handle a large volume of grain into export, every part of the system has to be looked at in turn. Hon. members know that in looking at this I had detailed and careful discussions within the government about the question of hopper cars and exactly when they are needed. Let me tell you, Mr. Speaker, there can be two views to that question at any given point in time, whether the hopper cars need to be bought
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Movement of Grain
in 1978 or whether one can indeed wait until 1979 to place the order for them. It is a very complex question based in part upon what consultants will tell us about how fast we can turn hopper cars around.
The reason that Mr. Justice Hall said he thought perhaps no more hopper cars were required-and I am not looking at page 173 of volume 1 of the Hall commission report-was that he noted how quickly improvements in the system in terms of carrying grain can come about if the turn-around of cars improves, that is, if you get more trips out of the same car in a year, obviously you do not need so many cars. With these vehicles costing $40,000 a copy for hopper cars, it is important that we improve the turn-around time.
What Mr. Hall and the commission are saying is that with a reduction of 7.9 days to a 15-day cycle, present equipment could carry a potential 1.1 billion bushels, or a 52 per cent greater rate of volume than is now carried. In other words, with a car cycle reduction of 7.9 days to a 15-day cycle, 1.1 billion bushels of grain could be carried.
We have been working on the system. As we have been bringing the parties together to discuss their problems mutually in a quiet and calm way. We have in fact been improving that turn-around in time. And as we have in place at the terminals in Thunder Bay and in Vancouver co-ordinators who can play a role in trying to make effective use of the system. We have been improving that turn-around time.
The Snavely updating report comparing 1977 with 1974 finds very significant increases in productivity by both CN and CP with regard to the carrying of grain. With regard to car cycle, Mr. Snavely finds that in the three-year period from 1974 to 1977 the car cycle has been reduced by about four days, or 17 per cent, permitting 3.3 more loads per year from all of the cars. If I put that picture in terms of what it would mean in terms of cars required, the reduced car cycle means that 34 per cent fewer cars were required in 1977 than would have been required to move that same amount of grain if the improvements had not been made. Obviously continuing to work on those improvements is the challenge facing us with regard to car building.
I said there could be two views about how many cars are needed. Naturally those of us who are particularly interested in being sure that a peak period can be handled, even though the peak period is a short period, will tend to argue for more cars on the side of safety. It will help. The Canadian Wheat Board will be very conscious that even though they may only use those cars for three or four weeks in the year, it may be useful to them that they are there in that particular year. That will leave the Wheat Board itself to consider what its role should be in assuring that cars are there for that three, four or five weeks in which they may be needed.
The government as a whole has to look with more testing eyes at the question of the investment being made and the short use of time that the equipment is involved. The government will have to look at whether there are other things which need to be done, as important or more important, which may justify that kind of an investment. In particular, at the present

time there are important improvements required on the west coast. Here again it is a matter of action which has led the elevator companies to move forward with expansion of their grain holding capacity.
More than ten million bushels of extra space on the west coast will be there, thanks to specific action by the Alberta Wheat Pool, the Saskatchewan Wheat Pool, United Grain Growers and Pioneer. This space will all be at Vancouver. This government has been concerned that additional growth on the west coast is clearly needed and that that growth should occur at Prince Rupert. That is why we have agreed to investments which will improve the dock and facilities at the present terminal so that it can handle more grain. We have also agreed to a significant investment in the basic infrastructure at a site like Ridley Island where we want to attract an additional grain facility of major proportions.
It will be much better to put that kind of major grain facility in place on the west coast so that it is there to be filled up in those periods of time where we may have equipment which otherwise would be empty, than to spend unnecessarily on cars and equipment. But that is a fine line.
How many cars do we require? An hon. member knows that I have had some discussions with the railways about this. The government has not come to a decision in favour of building more hopper cars at this very point in time, partly, I have to confess, because of fiscal restraint and the careful, careful review of every dollar being spent that that entails. In other words, I say that perhaps a year or so earlier with the same set of figures I might have been able to go after more cars. But we were able to agree that there should be a car rebuilding program. Just as a few years ago we saw that boxcars were coming out of the system faster than they really should because of their natural death, and yet we saw there was going to be a need for boxcars for quite some time to come. At that time we assisted with a program for both railways which cost several million dollars, where we paid half the cost of rebuilding a significant number of these boxcars and so extending their life for the grain movement.
This year cabinet approved a similar kind of program with regard to repairing 2,000 boxcars. I put that proposition to the Canadian National Railway. After they did an analysis of their figures, I received their agreement that they would go ahead with that car program. That repair program is now under way. I put the same proposition to the Canadian Pacific Railway, and their analysis, which coincided with ours in terms of what kind of car supply is required, came back somewhat more optimistic than anything I have been willing to credit. They did not in the first instance at least agree to a car repair program. I say in the first instance at least, because they are reconsidering their figures at my request. Perhaps next week I will have a further answer from them if the speeches in this House are conveying a message to the Canadian Pacific that we would expect them to reconsider carefully, and hopefully to enter into that car repair program. I will be very happy indeed about that.
November 13, 1978

I say to the House that if, in view of the analysis which we and they have made, there is during the course of the year any grounds at all for using the powers which do exist, limited as they are under the Canadian transport legislation which we have, to require the railways to act in a particular way, I will not hesitate to use it to see that that is done.
The grain movement is complex and we do have to work at every aspect of it. It may well be that in Thunder Bay this year problems in regard to how the yard of a particular railway can perform are more important and vital to the issue of how many cars are unloaded, and what kind of a car cycle we have, than the actual number of cars themselves.
It is easy with parts of the system, sometimes inspired by criticism from politicians, particularly in opposition where their role is criticism, in grain handling and transportation, to try to point a finger at other parts of the system and to say that if only such a thing had been done at such a time, everything would have been well. It is very possible for other parts of the system, railways, terminals, Wheat Board or local elevators, to join in that and accuse the other of some failure. I do not believe that kind of accusation is helpful.
I believe the basic motivation of all people involved, from the farm truck right through to the loading of grain on the ship, is to try and make the system work as quickly and effectively as possible. Naturally, when costs are required to be borne by a particular part of the system, there is a tendency to wish that somebody else will solve the problem for them. However, I believe the best way of solving our problems, of hauling more and more grain to export and therefore encouraging more and more production, has been to encourage the participants to sit down together in an atmosphere of trying to work out problems, where the government can be a catalyst in assuring that if one part of the system can do a lot more at low cost to help everybody in the system, that part of the system ought to be urged at the right time to do it. That is the way we have been moving, and that is the way in which we have been making progress. We have been looking at each part of the system.
I mentioned Prince Rupert. There, of course, I should avert to a current problem which is the kind of thing we all regret happening but which, nonetheless, causes significant problems to our grain handling system. There have been slides and problems to the track because of severe weather conditions, putting parts of it out of use for a significant amount of time. There again is demonstrated the need to have some residual capability in the system to handle more grain.
In looking at the movement of products to the west we have to be conscious of the fact that large volumes of traffic are now moving through the mountains to the west coast for export to the world. It is not just grain, but potash, coal, and sulphur. The volumes involved have been increasing very rapidly. This has led us to examine, with the railways, several features of our grain handling system and of our whole transportation system to see what needs to be done to make sure we
Movement of Grain
have the capacity to move the product. Of course our examinations always try to run far enough ahead of the fact of critical capacity limits so that whatever has to be done can be built and completed by the time the need is there.
Hon. members have paid slight attention to changes in the tax structure in relation to railways in the last two budgets. These changes have improved the capital cost allowance position of the railways, making cash available immediately for the construction of improvements in the coast-mountain area of our rail system.
Canadian Pacific, which had the greater problems in this regard, both with regard to cash flow and capacity, has been progressively working toward double tracking or removing difficult grades in its system so that its capacity is increased.
Several years ago we undertook a joint track usage study. It is an examination of the possible increase in capacity from the prairies to Vancouver by treating the two rail lines as though they were in one system for purposes of moving products. With overloaded parts of the system, traffic would move in one direction on one line and in another direction on the other line, thereby increasing the actual train capacity which is possible as a result.
Our studies showed, and these are now available to the railways for their examination and implementation, that until 1985 the changes now in progress will likely provide the kind of capacity required for the prospective freight to be carried. By and after that time, problems could begin to arise.
Those studies also showed that the joint usage of track could indeed be an effective solution to some of those problems. It is not a solution without cost. It is not a solution that takes place without planning, because a variety of structures connecting the two rail lines across the river are needed in order to allow interchanging at different points, depending on construction or repair problems on the line. However, I fully expect that the analysis of these studies, in plenty of time to do the work that is required, will ensure that we have very good results in terms of carrying the grain across our rail system and, indeed, of carrying all the other products which are increasing in volume as well.
The hon. member for Regina-Lake Centre made special reference to the Canadian Pacific Railway. He talked about the need to rearrange its structure and organization. Without ever wanting to become a defendant of a particular rail line, I would only say that it is interesting in its defence to note that until about three years ago it tended to do a little better than Canadian National in terms of responding to the traffic problems and needs of the day. Its branch lines on the prairies were in better shape in terms of weight of steel, and a lot of its other capacity was there in greater supply.
It was only after Canadian National came under renewed management and, perhaps even more important, a spirit of being aggressive about how it is structured and goes about its business, when it was given a mandate of attempting to be effective instead of always simply responding to policy dictates of the moment from one hon. member or another in this
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November 13, 1978
Movement of Grain
Elouse, perhaps through the Minister of Transport, that its performance improved dramatically and tremendously.
While it is beginning to make profits, it is at the same time doing so with these increases in productivity, more freight being carried for more miles at lower rail cost, than in a period three or four years before. That is a sign of an attitude toward trying to do a job effectively. It would be beneficial to both the shareholders and the railway, in this case Canadian National, the people of Canada, and also to the people of Canada in terms of service provided to them. The attitude of trying to be efficient and effective is a good one, not one to be knocked and criticized in terms of how to run a railway system. It reinforces my belief it is not right for us to interfere on a day to day basis with the operation of Canadian National and to ask it to do well and to function effectively in the days ahead.
I appreciate the kind suggestion of the hon. member for Vegreville that it would be useful if I had more time available to spend on the problems of the grain industry and the Canadian Wheat Board. I am happy to tell him that the Manitoba Wheat Pool, with which I met last Friday, passed a resolution that would ask the Prime Minister (Mr. Trudeau) to lighten my responsibilities in order that I can spend more time on grain and Wheat Board problems. I must say I am pleased with the implications of that kind of resolution and attitude. I have no doubt the Prime Minister will be responding-


The Acting Speaker (Mr. Turner):: Order, please. I regret to interrupt the minister, but his time has expired. He may continue with unanimous consent. Does the minister have consent?


Some hon. Members:: Agreed.


Otto Emil Lang: Mr. Speaker, I was at that stage where I was ready to conclude my remarks in any case, by simply saying to the House that I have no doubt the Prime Minister will take note of the request, particularly from the Manitoba Wheat Pool, if not from the hon. member for Vegreville. I am delighted to assure the hon. member I will continue to give good time to this problem.
While I was at the Manitoba Pool meeting, provincial ministers of tourism were complaining because of my absence at a meeting here in Ottawa. 1 do not understand their complaint. As soon as I was told they were interested in having me with them, I let them know I had committed myself to the Manitoba Wheat Pool meeting in Winnipeg and that I could not, therefore, be with them. I do not apologize for having placed that commitment to the Manitoba Pool ahead of the later request of the ministers of tourism. I was a little surprised at the way in which they referred to the matter.
The House can be assured that this government will continue to take action, as required, to improve the grain handling and transportation system. It was this government which did spend $255 million on hopper cars, and which began to take

such action before members of the House had taken note of the need to do so. That is a significant fact, in view of the ease with which it is possible for opposition members to ask that things be done without regard to the expenditure involved.
This government also instituted a rail rebuilding program, having set up the Hall commission to study the question of branch lines to see what ought to be done with them, and, later, the Prairie Rail Action Committee.
It was this go. ernment which faced the tough question of which lines should be identified for rebuilding. It was a reasonable analysis on our part, and on the part of the Hall commission and on the part of the Prairie Rail Action Committee, that not every branch line on the prairies could survive-but with the elevator companies themselves drastically reducing the number of elevators at which grain could be received, it did not make sense to maintain the number of tracks which had been put in place in the horse and buggy days. The cost of rebuilding these lines meant it was not fair to the people as a whole to try to spread those elevators out along the exact lines which had existed, bearing in mind that as convenient an arrangement for farmers could be arranged along a smaller number of lines.
The significant thing is that at the conclusion of the work of the Hall commission and of the Prairie Rail Action Committee, and at the conclusion of the studies carried out under the rail rebuilding program, we will have certainty as to the rail lines which exist, and we will also have certainty that those lines are capable of carrying the grain and carrying it well.
Just as the hopper car is an immensely superior vehicle for carrying grain to the hopper car of old, so the branch lines must be in shape in a way they never were before. The hopper car is top-loaded by gravity. It is unloaded through the bottom by gravity. Members in other parts of the House may never have seen the astonishing sight of an elevator agent having to cooper a boxcar, nail a door against the side of it, or sometimes laboriously repair the pillars upon which the door is nailed. They may never have watched it in the hands of a dumper after it arrives at the terminal, or seen the machinery which crushes that car in order to empty the grain from it.
The modern hopper car carries 50 per cent more grain than the boxcar. It can be loaded and emptied in a matter of minutes and seconds compared to a much longer period.
In the same way the rail system on the prairies, when it is completed, when our rebuilding programs are completed, will have all its mileage in shape to carry fully loaded cars well into the future. Consider the ballast that goes on the line, crushed rock that some of them have never seen in all their days, the weight of rail which would allow these cars to be carried. New ties were required, as well as track widening to ensure that snow does not gather on the lines. Lines must be put in shape so that snow ploughs can clear them, as is not always the case today. The government is spending more than $100 million on this program. That is the figure for last year and this. Next year it is committed to spending $70 million, and has made a general commitment to carry out the program in the seven,
November 13, 1978

eight or nine years to come. The certainty of that commitment is exemplified by the action we have already taken.
Prairie farmers can know that just as we built hopper cars, rebuilt branch lines, and encouraged the railways to improve the handling of cars in their yards, so will we assure that steps are taken progressively in the ensuing years to achieve the one billion bushels about which I spoke some years ago, and that we shall, by 1985, have a system capable of carrying into export the 30 million tonnes to which the Wheat Board referred earlier this year as being a realistic figure. Action taken by this government, which is willing to spend large sums of money in order to make the system better, is surely grounds for confidence that further steps will be taken to produce this result.
The prairie farmer can accept the fact of what we have done and that we are pledged to continue building the system effectively and solidly into the future.


Some hon. Members:: Hear, hear!



PROCEEDINGS ON ADJOURNMENT MOTION


The Acting Speaker (Mr. Ethier):: Order, please. I should like to bring to the attention of hon. members the subjects to be raised on the adjournment motion this evening. They are as follows: The hon. member for Laval (Mr. Roy)-Floods- Flood prevention program in North Montreal-Government position; the hon. member for St. John's West (Mr. Crosbie)- Fisheries-Closing of St. Lawrence Fluorspar mine-Effect on employment in industry; the hon. member for Humber-St. George's-St. Barbe (Mr. Faour)-The Canadian economy- Inquiry whether government has special economic program for Newfoundland.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed consideration of the motion of Mr. Benjamin:
That this House condemns the government for its failure:
(a) to require the railroads to add 4,000 hopper cars and 5,000 repaired boxcars to their grain fleet; and
Movement of Grain
(b) to give the Canadian Wheat Board total authority to co-ordinate all aspects of grain movement and any other authority necessary to protect and expand grain exports.
Jack Burnett Murta: Mr. Speaker, the Minister of Transport (Mr. Lang) has demonstrated one thing with which all members will certainly agree. It is that after the next election he will be a great professor of economics or political history back at the University of Saskatoon. It is obvious he does not make his living selling grain on world markets or he would not have spoken as he did, trying to gloss over problems which are on the minds of many who are concerned with grain handling and transportation at the present time in western Canada. All the minister talked about was what the system would be able to do in the future. That is important, it is true, but there is another and more important aspect still. It is what the system can do now. That is what is important to the pocketbooks of prairie farmers. We can all speculate about what is likely to happen in the future, and I am sure that a number of speakers will do so in the course of this debate.
After talking to a good many grain growers, especially from Manitoba, and after talking to representatives of the Wheat Board, I have come to the conclusion that we are facing a crisis in grain transportation as the motion before us suggests. Responsibility for failures which the minister sought to gloss over must be laid at the door of the government itself. After all, the present administration has been in office since 1968, during which time the present situation was developing. Despite the urgency, little action was forthcoming, other than promises.
I should like to spend a few minutes analysing what is happening to grain transportation. Most of the figures I intend to present were obtained from the Wheat Board. They cover the period ending November 11, just this past week. No one in the grain industry really believes these figures are likely to change significantly during the rest of the winter, though some believe the picture is likely to be less satisfactory than those figures suggest.
The Wheat Board has made predictions, as it does each year, concerning the number of grain car unloadings on a weekly basis at Thunder Bay. If the system were operating as well as could be expected, the projection is that 7,000 cars could be unloaded per week. What is actually happening at Thunder Bay is that 5,500 cars of grain are being unloaded per week. During the recent Great Lakes strike grain stocks built up at Thunder Bay, but since the end of that strike three boats have been waiting. The reality is that at the present time there is not enough grain arriving at Thunder Bay to keep the terminals working on a full-time basis.
The Canadian Wheat Board projected that 3,000 to 3,500 cars per week would be unloaded at Vancouver. As of the week of November 11 some 2,400 cars per week have been unloaded. The port of Vancouver has been and will be operating literally from hand to mouth for the remainder of this crop year. As of the end of last week nine ships were waiting at

November 13, 1978
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Vancouver harbour. Based on what is happening at the present time and on the problems which have become very apparent in the system the projection is that the number of ships which we can expect to be waiting some time in January or February could be in the neighbourhood of 30 or more.
According to the latest Canadian Wheat Board figures, the port of Vancouver will be deferring-or rolling, the term which is used in the industry-some 300,000 to 600,000 tonnes per month, or about 11 million bushels. Those are sales which could be made. In addition, because of problems caused by weather at Prince Rupert, the board is losing sales of an additional 30,000 tonnes per week.
What has happened to the grain transportation system in this country is that it has been allowed to slide into such a state of ineffectiveness that the system does not have any surge capacity. It cannot handle any additional sales opportunities which may, from time to time, be thrust upon it. The truth is that the situation is getting worse every year. Elevators are very nearly full and terminals are less than half full. Producer stocks on the farm are up some 20 per cent. Farmers are holding more grain than they did last year. If the minister responsible for the Canadian Wheat Board and for transportation had to make his income from grain he had to sell through the quota system to the Canadian Wheat Board, he certainly would not have spoken the way he did this afternoon.
At the present time the Canadian Wheat Board is actually working harder at deferring wheat sales than it is at selling grain. That is the state of the industry in 1978.
I am especially concerned about the province of Manitoba. The grain being sold by the Wheat Board at the present time is number one wheat. Movement of that grain is primarily out of Saskatchewan, the tip of southwestern Manitoba and parts of Alberta. Because of this, very little grain is moving out of the remainder of Manitoba. The reason for that is that the grade of grain in Manitoba has not been as high as it is in parts of Saskatchewan. By the Wheat Board's own admission, movement of grain out of the province of Manitoba will be almost non-existent until the first part of January 1979.
Elevators in Manitoba are full. Farmers have very little, if any, cash flow, and the cash advances farmers can get from the Canadian Wheat Board are so small that they are almost useless in terms of the amount of money it takes to operate a modern grain farm. How does the government or any part of the grain industry expect the Manitoba farmer to pay his bills in a time of rising expenses?
Barley is not being sold because number one wheat is the only grain which is being moved. The Wheat Board has said that it has backed away from barley sales. The Board does not even use the expression "deferred barley sales". The Board says it has backed away from barley sales. The government must obviously share much of the blame for this because it has had opportunities to make changes and to accept recommendations.
The railways have also entered into the fray. The problem has been confused. For example, CPR says it has all kinds of

hopper cars and boxcars and that it does not need additional rolling stock. CNR says it does not have enough rolling stock. This confuses the matter and makes it difficult to distinguish the real crux of the problem. The Canadian Wheat Board feels that 4,000 hopper cars are need immediately. The board would like to see a total hopper car fleet of about 20,000 cars in ten to 15 years.
The 1978-79 shipping season looks truly dismal. There will be hundreds of millions of dollars in lost sales. The grain industry is already talking that way. There will be large demurrage payments. That is inevitable. That is coming, as sure as winter comes to the prairies.
Farmers will be frustrated because they will have very little cash with which to operate their farms. This will be especially so for exclusively grain farmers. We might even see China becoming a traditional customer of the United States, if the situation is not corrected relatively quickly.
In view of what I have stated it is no wonder that the present government's electoral fortunes on the prairies are so dismal. Rail problems have mounted while this government has been in power. The Liberal government has done little more than study these problems, and it must bear the blame for the loss of millions of dollars in sales.
Some days ago the minister said to me that the Wheat Board is studying continuous seven-day a week operations. He also said that there are problems with labour unions. Both those statements are true, but the whole question is really academic because there is not enough grain being delivered to Thunder Bay to allow it to be unloaded around the clock on a seven-day a week basis.
The big challenge which we as a country will be facing will be the tremendous leap in capacity which will be necessary to meet increased export opportunities by 1985 and even by 1990. Because of delay and lack of action by this government in moving to a rational grain handling approach, we will have to accomplish this in a very short period of time at possibly much greater cost to the government, industry, and farmers than should be the case. We could have developed this rational grain handling approach over a longer period of time if there had been more rational planning.
Foreign demand for Canadian grain will increase, as will foreign demand for grain from other countries. France is said to be planning a 67 per cent increase in grain exports by 1985. The United States Feed Grain Council thinks its exports will increase by some 50 per cent in the next four years, while Japan and China are said to need between 40 per cent and 50 per cent more production or, very likely, imports by 1985. Canadian Wheat Board officials have said that they feel that these intentions, along with the goals of both the importing and exporting nations, are a positive proof of trends in the grain industry which will certainly continue into the next decade. This is an additional reason why Canada must act quickly to protect its traditional markets, let alone develop new markets to widen the variety of Canadian grain products. Certainly the loss in sales over the past 12 months to the
November 13, 1978

People's Republic of China is an indication of the kind of action the industry and the government must avoid.
If we look into the future there is no question that grain will be one of the major export dollar earners for Canada. In fact, for any of the major exporting countries grain will be one of the major export dollar earners. In my opinion, we must make a commitment to move the kind of grain and volume of grain required. The dollars invested in the grain industry will be numerous but the invested return on those dollars will be four or five times greater than the original investment. Time is of the essence and action must be taken now.
What should be done? The government has spent a large amount of money on numerous studies, but one which we consider to be especially good is the Hall commission report. I believe that action should be taken immediately on some of the recommendations in that report. We, as a party, had hoped that the prairie rail authority, the establishment of which was the cornerstone of the Hall commission report, would have been instituted. Had the prairie rail authority, rather than the Prairie Rail Action Committee which the government established, been instituted, it would have given an over-all coordinated approach to the grain transportation problems in the country. However, that has not taken place because of the reluctance of the transport minister to do anything in terms of that recommendation.
We feel that another recommendation of the Hall commission should have been adopted, that is, that the railways be compensated for the cost of moving grain by rail. Railways must also be responsible for adequate maintenance and upgrading of the lines now within the basic network, or which would be added to the basic network. The latest costing report by the Snavely commission is out and it shows that the cost of shipping grain under the Crowsnest pass rate totalled some $354 million. The railways' cost came to $175 million, the farmers' cost came to $115 million, and the federal government's cost came to $64 million. In view of those costs, I do not think anyone would suggest that the railways could devote much time and money to moving grain at the statutory rate. They lose money on every bushel that is shipped, and the more grain they move, the more they lose. Farmers and farm organizations and governments should not expect the situation to improve. In fact it will only get worse in the months and years to come. When you think of all the problems we have had this year, just think of what will happen in a few years from now if the government continues to adopt the same system.
We on this side of the House believe that the railways should be compensated for hauling grain. We also believe that farmers should continue to receive the benefits of the Crowsnest pass rate, and in return for the money received for hauling Canadian grain, the railways should upgrade western rail lines. We think expenditures should be made on parallel rail lines in certain areas in western Canada, mainly in the mountain
Movement of Grain
areas. We also think that stop-off charges in most cases should be eliminated in moving grain in western Canada.
We believe that the principle of the off line elevators should be adopted as a realistic alternative in those areas of Western Canada that do not have rail service. We also believe that money should be spent in the area of ports and terminals. Expenditures should be made, for example, on dredging at Thunder Bay, on Canadian Wheat Board co ordinators for all grain going through Thunder Bay and on enabling the Canadian Wheat Board to play a more prominent role in the over-all co-ordination of grain movement on the prairies. We believe that all these recommendations should be adopted if we are going to move grain in the volumes mentioned by the minister, by us on this side, and by the NDP. So far the government has shown itself to be sloppy and lacklustre when it comes to most things, but especially in grain transportation.
To conclude, Mr. Speaker, let me say that this year the country will lose hundreds of millions of dollars because we cannot fill our export commitments. That amount of money would buy many hopper cars. We will end up with large demurrage charges and with economic hardship for western farmers. We will also have a loss in foreign dollars to Canada because of losses in sales in western Canada. This is the legacy that the minister and the government will leave to the western grain farmer-


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


Some hon. Members:: Agreed.


Jack Burnett Murta: Mr. Speaker, I was just about to conclude. I said that the mismanagement by the government and the present Minister of Transport will be the government's legacy to the grain farmers in western Canada This is just one reason why, when the next election comes, we expect to see, if not all, certainly most of the seats in western Canada go to the PC party.
In conclusion, I would like to say that the problems are immense and it is most unfortunate that the man at the centre, the Minister of Transport, is not up to coping with these immense problems.


Mr. Doug Neil (Moose Jaw):: Mr. Speaker, I am pleased to have the opportunity to participate in the debate this afternoon. This is a timely motion, but I am surprised that it is the hon. member for Regina-Lake Centre (Mr. Benjamin), a member of the NDP, who should bring forth this motion and cry crocodile tears for farmers in western Canada, remembering that ten days or two weeks ago when a bill was before the House legislating the marine engineers back to work, whose strike was costing the farmers in the Wheat Board area some $10 million a day, the NDP voted against it. They voted against a bill which would mean money in the pockets of western farmers, despite the fact that the premier of the province of Saskatchewan, a New Democratic Party member,

November 13, 1978
Movement of Grain
had sent a wire to the Prime Minister (Mr. Trudeau) asking him to legislate the workers back to work.
The hon. member for Regina-Lake Centre was shedding crocodile tears today. When western farmers learn the way the New Democratic Party voted on that piece of legislation, they will have second thoughts about what those members are doing in Ottawa.
Previous members have supplied many statistics to the House, and I do not propose to go into all of them. The situation in western Canada is very serious. Country elevators are bulging at the seams. The stocks in the terminal elevators in Thunder Bay and on the west coast are low. The movement of grain by railways ranges from 50 per cent to 70 per cent capacity. We have received reports of a deferral in deliveries of some 1.5 million tonnes, cancellation of contracts, and lost sales. The producers in western Canada have lost hundreds of millions of dollars.
For the first time in four years China has purchased wheat from the United States amounting to some 2.5 million tonnes, grain which the farmers of western Canada could have and traditionally would have sold to China. The reason China looked to the United States was because Canada could not guarantee delivery. The figure of the loss to the prairie farmer is not available. If one spent time going through all the papers and listening to the speeches made by representatives of the Canadian Wheat Board and other organizations, one might determine the losses. The producers and members of parliament should know the facts.
On November 7 I asked the minister to make a statement on motions setting out in detail the situation as far as sales, deferrals, and lost sales was concerned. The minister declined to do so, saying that the Canadian Wheat Board had made these facts available to the producers, that it was the appropriate body, and that he did not feel it was up to him to give this report to parliament. It is his responsibility to do so, but of course he has been very busy. He wears three hats as Minister of Justice, Minister of Transport, and minister in charge of the Wheat Board (Mr. Lang). I do not envy him his job. Those three portfolios are more than any man can handle. It is vital that the Prime Minister take immediate steps to divide those responsibilities so that whoever takes charge of the various portfolios can do a proper job.
The grain handling and transportation system is important and vital to the economy not only of western Canada but of Canada as a whole. It brings in billions of dollars in foreign exchange each year. It has a multiplier effect of some 5.5 times the amount which comes into the country, and a domino effect which spurs the economy of the whole country. Yet we continue to lose millions and millions of dollars in sales. Why has this happened?
Why is the grain handling and transportation system in such chaos? One only has to read the report of the agricultural task force of 1969 which was commissioned by this government. At that time it indicated that there was no future in the grain
trade. That was the essence of its report. The task force recommended getting rid of half the farm acreage and two out of three farmers. The government brought in the LIFT program and paid farmers not to grow grain, a form of stabilization program which did not make sense, and a small farm program, and other programs developed to do what the agricultural task force suggested. Later the Prime Minister told the farmers in western Canada to sell their own wheat. He said, "Sell your own wheat".
If we look back over the past few years, we find that there have been a series of studies and royal commissions. Many of their recommendations were ignored by the government. There was the Hall commission report, the Snavely commission, and others. The Hall commission report was an excellent one on the grain handling and transportation system in western Canada. Mr. Justice Hall made some excellent recommendations, one of which was the setting up of the Prairie Rail Authority. Of course that recommendation was ignored by the minister in charge of the Wheat Board. Instead he set up the Prairie Rail Action Committee.
The functions of the proposed Prairie Rail Authority were to examine lines which Mr. Justice Hall said were in doubt, listen to representations, and to monitor these lines to see whether they should remain. But the minister set up the Prairie Rail Action Committee which made a final report and a holus bolus decision to shut down lines, without study and input from the people concerned: the railways, the elevators, and the people on the lines. The chairman of PRAC has indicated that there was too much mileage in the basic network recommended by Mr. Hall. Mr. Hall was not even invited to meet with the minister in charge of the Wheat Board for almost a year. He would not have been invited if it had not been for the fact that members of the opposition were able to pass a resolution in the Standing Committee on Agriculture which requested Mr. Justice Hall to appear before it. Then the minister in charge of the Wheat Board decided to meet with Mr. Justice Hall.
Another of the recommendations of Mr. Justice Hall was the utilization of inland terminals to service primarily the port of Churchill, which I am sure the hon. member for Churchill (Mr. Smith) will speak about later, as well as the port of Prince Rupert. Now the minister is putting the elevators and government inland terminals up for sale with no explanation as to why they are to be sold. The President of the Treasury Board (Mr. Andras), in a statement which he issued, said that selling the government elevators would save the sum of S8.3 million. This was at a time when the elevators at Moose Jaw and Saskatoon were being utilized to maximum capacity and were showing larger profits than ever before. The general manager of the inland terminal system said that he could not understand where the President of the Treasury Board got the figure of $8.3 million because the system, he said, would earn between $4 million and $4.5 million.
I was interested to read in the supplementary estimates which were tabled in this House a few days ago, at page 10

November 13, 1978

under vote 20a, that deducted from the estimates that are supplemental funds available from vote 45 amounting to $930,000, which amount is due to cancellations in respect of the planned sale of Canadian government grain elevators. On the one hand the President of the Treasury Board says that selling these elevators will save $8.3 million; on the other hand the estimates indicate a saving of $930,000. I do not understand it.
It is also interesting to note that we are doing away with the inland terminals in the west but building new terminals in eastern Canada. I received a news release the other day to the effect that four or five elevator companies or private concerns will receive either grants or loans to build terminals in eastern Canada. Two years ago this House passed estimates of $8 million to help build a terminal elevator sponsored by the Ontario co-operatives for the purpose of servicing an oil seeds plant that would be built alongside it in the Windsor area. The oil seeds plant was not viable unless the elevator was built; therefore the government provided $8 million to help and this was at a time when oil seeds plants in western Canada were having difficulty surviving.
The government is not interested in the viability of the agricultural industry in western Canada. They have decided to sell these inland terminals at a price which nobody knows. We do not know if there is a reserve bid or what will happen if they are not sold. We do not know what will happen to the employees.
Both the Minister of Agriculture (Mr. Whelan) and the minister in charge of the Wheat Board have said in the past that these elevators are underutilized. It is true that they are being used only at 20 per cent to 25 per cent of their capacity, but even so a profit has been made. They contend that the reason these elevators have been underutilized is due to the wheat pools and UGG, but it is interesting to note that the elevators in Moose Jaw and Saskatoon are being utilized to capacity now, mostly by the pools.
I do not believe that the Minister of Agriculture and the minister in charge of the Wheat Board have ever sat down and discussed the utilization of those elevators with either the railways or the farm organizations. They are all part of the system which the minister spoke about. Whoever buys the terminals will have to recover from the farmer the interest costs of the purchase price and the capital costs. It may be said that the capital costs should not be taken into consideration, but if the elevators are purchased by a company they must at least recover their investment as determined at the time of sale. These elevators were built in the 1920s.
The elevators should be utilized fully after consultation with the line company elevators, the railways and the farm organizations by supplying their services to the various grain companies at cost. By "cost" I mean the actual cost of operation and cost of keeping the elevators in good repair. The government cannot include capital costs because they have been written off many times over. If this were done, grain could be moved through the system faster to the export position, we would not
Movement of Grain
be faced with bottlenecks on the west coast or with demurrage charges, and there would be a more even flow of grain.
The New Democratic Party has suggested that the government call upon the railways to add 4,000 hopper cars to their fleets. The government has already supplied some 8,000 hopper cars to the railways at no cost to them except that they must keep the hopper cars in good repair. It is my understanding that at the present time the railways are operating at between 50 per cent and 75 per cent capacity. I suggest that possibly we do not need any more hopper cars but instead we should take a look at the utilization of cars, whether they be hopper cars or boxcars.
Perhaps the Wheat Board should, if the minister will not, sit down with the elevator companies, the railways and the farm organizations to determine how they can best utilize the system. I do not believe such a thing has ever been done. There are many other things that could be done in the system through the co-operation of the various organizations and components. This has been the problem, a lack of cohesiveness.
If the grain could be delivered to the west coast or Thunder Bay on time it would save many millions of dollars in demurrage charges. The minister in answer to questions put to him regarding demurrage charges says, "Oh well, we never know when the boats are coming in." He talks as though the boats float out of the sky and land in the harbour. I suggest that these boats are at sea for some considerable time and are always in contact by radio. Contracts are made weeks and months in advance, and the Wheat Board and elevators know when these boats will be coming in.
In closing, I would say that we in Canada have the potential to produce a lot more grain. We have the potential to deliver that grain to export position if the various components of the system would only co-operate and if the minister in charge of the Canadian Wheat Board and the Minister of Agriculture would do their jobs. The markets are available and more will be available. There is a need for more and more food in the world. But if we continue to lose our reputation for delivering grain, then we will continue to lose the markets. The effects on the economy not only of western Canada but of the whole of Canada will be very drastic.


Mr. J. Larry Condon (Middlesex-London-Lambton):: Mr. Speaker, I should like to participate briefly in this debate in order to tell the people of western Canada that we in the east and particularly in southwestern Ontario have concern for them and their problems.
The lament of gloom and doom is with us again in this debate, Mr. Speaker. For the last few years the people of Canada have been told how tough, how really bad, things are. I begin to wonder whether the politicians in this House and the media across the country understand the situation or ever ask people individually what the problems are.
I bring this point up very sincerely because I think one of the problems in Canada today is an illusion of things going bad. This illusion has been fostered by the opposition parties

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Movement of Grain
and in some cases by the media. They have been trying to spread the impression that things are very bad and that this is a very bad government.


Some hon. Members:: Hear, hear!


Joseph Lawrence (Larry) Condon: I hear a comment from a member of the New Democratic Party.


Mr. Nystrom:: No, no.


Joseph Lawrence (Larry) Condon: Well, I should like to comment on the New Democratic Party for a moment. This party is supposed to be backed by labour, is supposed to be leading labour and wants the responsibility that labour could give them after the next election. On two occasions recently, however, the party completely forgot about the people of Canada, once during the marine strike and once during the post office strike. I feel this fact should be brought to the attention of everybody in Canada. If I remember correctly, and I could be mistaken, two and a half or three years ago parliament was recalled to deal with an emergency concerning the grain handlers. On that occasion the NDP again stuck with one particular segment of the country and forgot about the rest of the country.
I will read today's motion just to clarify matters. It says:
That this House condemns the government for its failure:
(a)	to require the railroads to add 4,000 hopper cars and 5,000 repaired boxcars to their grain fleet; and
(b)	to give the Canadian Wheat Board total authority to co-ordinate all aspects of grain movement and any other authority necessary to protect and expand grain exports.
On the one hand the opposition are concerned about grain exports, yet on the other hand they will vote in the House against a motion designed to get products to the export market. This leaves me a little confused. I hope the people of Canada will note this, however, and not forget it at the next election.
I should like to turn now to the condemnation of government policy by the official opposition. In the past two or three years their practice seems to have been to condemn everything. The acquisition of hopper cars was mentioned briefly by the opposition but they maintain they would have done more. In the past the cabinet has recognized the deteriorating condition of the boxcar fleet and has purchased 8,000 hopper cars made up as follows: 2,000 in 1973; 4,000 in 1974 and in 1975, and 2,000 in 1977, at a cost of approximately $260 million. The opposition did not mention that nor the evident success of the program.
These cars have had a significant impact upon the movement of grain as the grain farmers well know. Some of the commitments made to the western farmers will not only help them but help the farmers of eastern Canada as well. I want to say to grain farmers in the west that we in the east are very concerned about them and their problems. When I return to my riding of Middlesex-London-Lambton and hear comments about the problems of the farmers in Canada, I know that although the eastern farmer understands the problems of the western farmer, sometimes there is a lack of communication between them. The farm organizations meet once or twice a

year. I think some of the misunderstandings between east and west could be resolved in the farming community. They have much in common. They depend on the weather, they depend on the soil, they depend on the use of the proper fertilizer; they have a common denominator. All this could serve to unify Canada in the way we all want to see it unified.
The hon. member for Lisgar (Mr. Murta) mentioned that over the last ten years this government has done nothing that will be beneficial to farmers in western Canada in the future. I disagree. I think that under the direction of the Minister of Transport (Mr. Lang), who is in charge of the Canadian Wheat Board, more has been done than was done by anyone who previously held that position. It is very easy to say that more should be done, but I think credit should be given for accomplishments. There is only a certain amount of money available to all the ministries and the 28 or 30 cabinet ministers try hard to get their share of the funds.


Donald Frank Mazankowski: Why did they buy Pacific Petroleums Ltd., Nordair and all that?


Joseph Lawrence (Larry) Condon: Mr. Speaker, obviously I am getting to the core of the problem when I draw comments. Not only does the opposition inadequately condemn but they fail to put forward a platform that would be accepted by the electors.


An hon. Member:: Just call the election.


Joseph Lawrence (Larry) Condon: They say "call the election", but I am sure when it is over they are going to say, "Why did you call the election?"


Sinclair McKnight Stevens: Why wait? Let's go.


Joseph Lawrence (Larry) Condon: Mr. Speaker, I have great respect for the opposition finance critic. He is probably one of the greatest opposition finance critics and I may say that I hope he keeps that position for some time. I notice he takes an interest in the farmers as well as ail other areas that come within his purview. It is amazing that one man can know so much about everything yet never give credit to the government for anything it has done since he has been finance critic. With all this heckling from the opposition, Mr. Speaker, I think I must have hit the core of the problem. It may be a possibility that when the next speaker from the official opposition steps up to express his opinions on this particular motion, he may say at the beginning of his remarks: "You are doing a good job;" but I will not hold my breath. It does not matter if there are a lot of boxcars and a lot of special grain cars, without the tracks to run them on there is a problem. Neither does it matter what expenditure is made on hopper cars. In the recent past, while the Government of Canada has certainly gone ahead strongly on the rehabilitation of branch lines, the rehabilitation and upgrading of the system cannot be carried out until the size and extent of the basic network is known. A start has to be made some place, but it has been let go. I would agree partially with some of the criticism that has been voiced. It has been let go, and maybe for too long. But at this particular time
November 13, 1978

we are moving ahead to make it better than before, and as well looking forward to the next 30 or 40 years.
If I may digress for a moment, we are not as aggressive as we should be. I think in the future Canada will be in a similar position to that of the OPEC nations. I can see in the future the importance of the food dollar with Canada being the centre of the food dollar chain because of Canada's great areas of agricultural land and also because of the productivity of the farmer. I was talking to a farmer the other day in my riding of Middlesex-London-Lambton, just outside of Strathroy, and I said to him: "You are producing so much now; how much could you produce if you had to?" He replied: "If we were pressed to increase our productivity, we could maybe increase it by 150 to 200 times and have the same product we have now." Obviously the farmers are producing; there is no question about that. The figure is 100 per cent in the last ten years. They are the type of people who would do so providing they are compensated in the proper coin of the realm. Sometimes I question whether they are but I think farmers are in an improving position.
Regarding branch line rehabilitation, almost 50 per cent of the existing prairie rail network can carry only boxcars. It is essential to upgrade the lines to be retained in order to gain full impact from the use of the heavier loading hopper cars. New hopper car acquisition must be co-ordinated with improvements to the system. Seventy million dollars has been allocated for this program for the next year.
To date the following improvements have been carried out. Two subdivisions have been upgraded to carry fully loaded hopper cars. Cut widening and track stabilization has been carried out on approximately nine subdivisions. This will help to reduce problems caused by snow drifting and soft tract in the spring and fall. Many of the lines concerned were built to very low standards in the first place and such work represents a permanent, lasting improvement. Because of these expenditures I think we are at the beginning of great things for the western farmer. I believe the farmers' production will increase in proportion to the facilities that we have available in Canada. This will help the export market.
Returning to the question of being critical of government and critical of the Canadian people, we do not realize what we can do until we have to. In the past Canadians have had fairly secure and good lives. Different government agencies have helped out in certain areas. We never get complaints about that, and why should we? We are trying to help people to be more productive, thus making Canada a better country and a leader in the world's export markets.
Permafrost research is being carried out on the Churchill line to establish ways and means to stabilize the subgrade. This section of line, which is unique in the world for its permafrost problems, will remain at boxcar standards until the early 1980s when stability problems will have been resolved. A party of permafrost experts from many parts of the world, including the Soviet Union and the People's Republic of
Privilege-Mr. W. Baker
China, toured the lines this summer. We were seeking the best expert advice available.
Why did we do that? Canada is a complex country. It is a country of differing climates, attitudes and feelings. The most important thing we have in Canada is our land. We have a lot to learn yet about our land. I do not think enough research has been done in that respect. The government is doing more in the area of observation and spending money to make sure that these particular things are good not only for the present but for the next generation and the next century.
In summary, the rehabilitation program will eventually ensure that we have a basic network secure to the year 2000 that will not suffer from winter disruptions by reason of snow drifting. It will not suffer from soft track and drainage problems in the spring and fall. It will not suffer from rail buckling problems in the summer. It will be capable of carrying aluminum hopper cars unrestricted. In short, the rehabilitation program will greatly assist the utilization of the current rail car fleet.
We must recognize that there are problems. Certainly the government has worked very hard to solve them, and it will continue to work to solve these problems not only for this generation of grain farmers but for all grain farmers in the future. This government is thinking not only of today but of the future of this country.


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


[Stage Direction]
AFTER RECESS

The House resumed at 8 p.m.

Walter David Baker: Mr. Speaker, today in the House of Commons I asked the Minister of Energy, Mines and Resources (Mr. Gillespie) a question with regard to the financing of the Petro-Can takeover. I do not want to go into the details of the question and cut into the time of those engaged in the allotted day. However, in his answer, the Minister of Energy, Mines and Resources said: "Mr. Speaker, the hon. member has misinterpreted the provisions of the statute. There is no intention to bring in any amending legislation."
If that is the case, I have no question of privilege. If that is not the case, however, and I have not misinterpreted the statute, the minister may have misled the House, albeit inadvertently. Therefore, I wish to reserve my question of privilege

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Movement of Grain
so that I can go into the statute, because it is rather complicated.


The Acting Speaker (Mr. Turner):: Is that agreed?


Some hon. Members:: Agreed.


The Acting Speaker (Mr. Turner):: It is so ordered.


MR. STEVENS-MISLEADING REPLIES BY MINISTERS
Sinclair McKnight Stevens: Mr. Speaker, I rise on a question of privilege which is somewhat similar to the question of privilege referred to by my colleague, but much more specific. On three occasions during the question period today, ministers of the Crown misled this House by indicating that a certain transaction had been completed, by either a subsidiary or a Crown corporation known as Petro-Can, and that there was no charge against the resources of the Government of Canada as a result of this transaction.
In reply to a specific question raised by my colleague from Halifax (Mr. Stanfield), the Minister of Energy, Mines and Resources (Mr. Gillespie) stated: "Mr. Speaker, I made it very clear that this was a commercial transaction. It was negotiated and financed by normal commercial instrument. There are no government guarantees."
At another point, in response to a question put by my colleague from Calgary North (Mr. Woolliams), a similar comment was made. In response to a question put by myself to the Minister of Finance (Mr. Chretien), dealing specifically with the nature of this transaction, the Minister of Finance stated that "it is a commercial transaction.. . This was analysed by those who were loaning the money. They found that the assets being given against borrowing were very good indeed."
The act incorporating Petro-Can could not be more clear. They act as an agent of the Crown. In similar circumstances, the Export Development Corporation has legal opinions which state in that case that the Crown is bound by every obligation entered into by the Export Development Corporation.
We will be looking into this more fully. However, I would like to give Your Honour notice that we think we have a most substantial question of privilege to be raised at the earliest opportunity.


The Acting Speaker (Mr. Turner):: Is it agreed that we take this as notice?


Some hon. Members:: Agreed.


BUSINESS OF SUPPLY
[Stage Direction]
The House resumed consideration of the motion of Mr. Benjamin:

That this House condemns the government for its failure:
(a)	to require the railroads to add 4,000 hopper cars and 5,000 repaired
boxcars to their grain fleet; and
(b)	to give the Canadian Wheat Board total authority to co-ordinate all
aspects of grain movement and any other authority necessary to protect and
expand grain exports.
Mr. Cliff Mclsaac (Battleford-Kindersley):: Mr. Speaker, this debate on the NDP motion moved by the hon. member for Regina-Lake Centre (Mr. Benjamin) is very important. It is an important topic for all members of the House, particularly those from western Canada. This debate has dealt with a number of circumstances and situations dating back not only to the four or five years I have been here, but many years beyond. That is as good an indication as any that the problems which plague the grain industry do not go away but recur, not only for the grain producer but for the grain industry as a whole.
Hon. members who took part in the debate referred to two issues that continually arise. I refer to labour unrest, strikes in various sectors and by various unions involved with or affecting the movement of grain. That has been referred to by most members who have spoken today. The second is natural disasters, such as extreme snowstorms which plagued a number of branch lines in western Canada last year and the torrential rains in British Columbia this fall which washed out the rail line to Prince Rupert. That will disrupt the movement of grain to that port, as well as shipping and the programs of the Wheat Board and grain companies. Those two situations continue to recur.
I thought either the hon. member for Regina-Lake Centre or the hon. member for Vegreville (Mr. Mazankowski) might have recognized the tremendous progress made over the past eight to ten years in resolving some of the problems which cause difficulty to the grain farmer and grain producer. As usual, opposition members have totally disregarded the tremendous advances made over the years in solving these problems, learning what causes them and dealing effectively with them. Producers and organizations are more effectively involved in developing policies and solutions to many problems that have been with us for a long time.
Hon. members forget the years not so long ago of very poor sales and very poor prices, when there was no real policy on domestic feed grains. It is not so many years ago that damp barley in Saskatchewan next to the Alberta border was 25 cents or 30 cents a bushel; that was in the late 1960s. Next door in Provost and Camrose in Alberta, just across the border, it brought twice that much purely because of a regulation which had been in existence for years of not allowing trade in grain under the Wheat Board between the provinces. So we have seen the clearing away of an awful lot of that kind of pure nonsense which was certainly a hindrance to the development of normal trade and sales as far as grain was concerned.
Many hon. members opposite, whether the hon. member for Regina-Lake Centre, the member for Moose Jaw (Mr. Neil),
November 13, 1978

the hon. member for Yorkton-Melville (Mr. Nystrom) or others, if they were to go back into their constituencies, as I know they do, and travel up and down the grid roads and municipal roads of their constituencies and compare the situation today of their farmer friends, their grain producer friends they have known for years, as I can certainly do in my area, with the economic situation in those very farmyards ten or 15 years ago, I am certain they will find a great difference.
Life then was a great deal tougher than it is today. I suppose that in essence what 1 am saying is this, that while there are problems in the field of grain handling and transportation as well as in grain production generally, there are far fewer problems than there were. In the meantime, despite those problems the grain producer over the last several years has enjoyed an economic benefit which neither he nor any of us in this chamber in any political party might have believed possible five or six years ago. If hon. members from various rural constituencies would do what I suggested, drive through their own areas and look at some of the farm operations and compare them with conditions eight or ten years ago on smaller holdings, contrasting their net worth today with their net worth eight, ten or even 15 years ago, they will find that-


An hon. Member:: What about inflation?


Joseph Clifford McIsaac: -despite inflation and even with an 85-cent dollar they are still immeasurably better off than their brothers who may be working in a small town as mechanics, or working in Calgary or other places. Although they are doing quite well in their own profession, the chap who has stayed home on the farm in Rosetown, Lisgar or any other farming community has also done quite well in the field of grain production over the last number of years, inflation notwithstanding.
The hon. member for Moose Jaw, I think it was, applied some interesting logic which to my mind was somewhat inconsistent with proceedings earlier in the day when there was great opposition from hon. members opposite to more Canadian ownership in the oil industry.


An hon. Member:: Not at all.


Joseph Clifford McIsaac: That is the truth. There is no question about what was involved. They are not concerned or interested in Canadian ownership or government involvement in that area. Yet when it comes to the grain industry, which has traditionally been owned by Canadian farmer-producers, the opposition take a different stance. Years ago the Canadian government put up a number of storage elevators on the prairies, and it seems to me that there really is not very much need to continue inland terminal storage. Major companies which are Canadian-owned, farmer-owned, are engaged in the storage business, as I say, and it seems to me that in an industry which is highly government regulated in any event it makes sense for those elevators, whether they be in Moose Jaw, Saskatoon or elsewhere, to be under the control and jurisdiction of the grain companies themselves.
Movement of Grain
The hon. member for Moose Jaw was very concerned that the government should be getting out of that operation, yet earlier in the day the Conservative opposition was very concerned that the government should be getting into the energy business in an effort to ensure adequate supplies of energy at a reasonable price for prairie farmers.


An hon. Member:: What price would you sell them for?


Joseph Clifford McIsaac: The price and the arrangements can certainly be negotiated, and I am sure both the Minister of Agriculture (Mr. Whelan) and the minister responsible for the Wheat Board have already held discussions with grain companies and other interested groups in that regard. It seems to me to make a great deal of sense to place those facilities under the jurisdiction of the grain companies themselves.
The motion before us condemns the government for its failure to require the railroads to add 4,000 hopper cars and
5,000	repaired boxcars to the grain fleet. It goes on to say the Wheat Board should be given total authority to co-ordinate all aspects of grain movement and any other authority necessary to protect and expand grain exports. I am sure that on reflection the hon. member for Regina-Lake Centre might wish to modify some of the wording of that motion. 1 am sure he does not really want to bring all aspects of the industry under the Wheat Board. He might wish to extend the Board's authority, but I do not believe he would want to see the government or the Wheat Board or any other agency getting into the movement of grain from farm to farm, from farm to feed-lot, what might be termed community sales.
It seems to me that more attention should be paid to the progress which has been achieved in terms of grain movement and storage. This aspect has been touched on by the minister and by some other speakers. It is not only a matter of more boxcars or hopper cars. There are factors involved in grain movement quite aside from boxcars. I am sure most hon. members are aware of the advantages of the hopper cars over the old-fashioned boxcars. In my view, we could use still more but I would question the advisability of turning the money over to the railroads, as was suggested in the Hall commission report and again this afternoon by the hon. member for Regina-Lake Centre, for the purchase of the cars and for the re-grading which must take place if many of these branch lines are to be able to carry those hopper cars. Repairing all those branch lines is a big job. There is a good deal of that going on now.
I am more than happy to see what is going on in my part of Saskatchewan, and I am sure other hon. members are too. On weekends when I go home, I see rebuilding, re-gravelling and new equipment. Going from Saskatoon to North Battleford I see 50 to 60 tanker or ballast cars hauling ballast out to those lines to get them rebuilt. That is a big program which will cost an estimated $700 million. That program will go on into the 1980s before it is completed. About $70 million is projected to be spent in the forthcoming fiscal year. Almost $100 million

November 13, 1978
Movement of Grain
has been allocated or spent this year for new equipment and for upgrading.
The hon. member for Regina-Lake Centre (Mr. Benjamin) and the authors of the Hall report suggest that this government should merely turn over to the railroad companies those large chunks of cash necessary to make grain hauling an economic operation, and that we should ask the railroads to go out and buy boxcars and rebuild rail lines. When they make that suggestion, they are really not looking at the facts and the history of the last eight or ten years.
I remind hon. members of the last time the National Transportation Act was amended by a minority parliament in the 1960s. One of the solutions to the problem of upgrading rail lines at that time was thought to be a provision to allow the railroads to apply to abandon branch lines on which they were loosing money, which, of course, they did. They applied to abandon many lines. The solution decided upon by parliament, which met the approval of most parties in this House ten or 12 years ago, was to say that the treasury should pay by way of branch line subsidies to the railroads the amount of the loss which was estimated. What happened to that subsidy? It grew to be about $100 million in the past year. The money went to the railroads, but did it go to the rebuilding of branch lines? Of course it did not.


Leslie Gordon Benjamin: They took the money and ran.


Joseph Clifford McIsaac: My hon. friend says they took the money and ran. That is why I go back to the point I made earlier. I wonder why my hon. friend gets up, as he did today, and suggests to the government that we continue to pour in $100 million or $200 million a year with no strings attached.


Otto Emil Lang: Or more.


Joseph Clifford McIsaac: This is the suggestion I gathered the hon. member made in his remarks, as did other hon. members opposite. The experience of the last number of years demonstrates to me that the Hall commission made a mistake with that recommendation. I suggest the hon. member is wrong in endorsing it. We cannot give the money directly to the railroads with no strings attached and expect them to build boxcars and rail lines and haul grain. They have not done that in the past, and I am not sure what has changed which would ensure that they will do that in the future.
That is why I endorse the approach taken by the minister, his department and the government in terms of providing funds for specific purposes; for example, the purchase of hopper cars, rebuilding and upgrading equipment or rebuilding specific lines, either CN or CP. The money should be paid when the job is done. It seems to me that is a much better approach than to expect them, as we have in the past-and we

were disappointed-to take that money and make the improvements all of us want to see in the grain handling network.
I mentioned that in the past that not only has the government purchased 8,000 hopper cars, but we have also rationalized the whole rail network. Hon. members will be aware that a problem and an issue for years and years has been the threat of rail and branch line abandonment. That threat has largely been removed and cleared away by the Hall recommendations and that commission's handling of that entire question. There are still some lines which are being dealt with by the Prairie Rail Action Committee.


Leslie Gordon Benjamin: That is the problem.


Joseph Clifford McIsaac: It will not be a problem much longer because that committee's report will be in by the end of the year, and we will finally know what its recommendations are. There will still be an opportunity for the hon. member, for me and for other hon. members to make recommendations to the minister in that respect if we do not like some of the committee's recommendations. Of those lines in doubt, which used to add up to 8,000 or 10,000 miles, today there are less than 2,000 miles of lines in doubt and they are still being dealt with by the Prairie Rail Action Committee. In that respect we have come a long way.
Hon. members referred to improvements in car utilization and in car turnaround. There has been improvement in this regard, and there are railroad figures to demonstrate that. We are moving much more today with the same number of cars and the same kind of equipment than we did in 1974. We are moving about 30 per cent more, but I am sure many hon. members of all parties will also agree that we could continue to improve that car turnaround and car utilization in order to get more mileage out of the equipment which we have in operation.
There have been improvements to the terminal elevator system. At Vancouver expansion is going forward. That in itself will assist a great deal. I think hon. members are aware that there are other bottlenecks associated with getting grain to Vancouver. These are being worked on, and gradually the list of difficulties over the last number of years has been narrowed down quite considerably.
I do not say we do not still have problems. I just say that the system has been substantially improved. I agree that there are improvements yet to be made, and they will be made as the various segments work together to try to resolve the problems they have. I do not think more hopper cars alone or additional and wider powers for the Wheat Board will completely resolve these problems.


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. Does the hon. member have unanimous consent?


Some hon. Members:: Agreed.
November 13, 1978


Joseph Clifford McIsaac: Mr. Speaker, I was at the conclusion of my remarks. I was watching the clock, and I appreciate the fact that my time has expired. I will be interested to hear my hon. friend, the hon. member for Yorkton-Melville (Mr. Nystrom), and others. I hope they will put forward some concrete and specific suggestions.


Leslie Gordon Benjamin: We did. They are in the motion.


Joseph Clifford McIsaac: There were a couple of suggestions, impractical as they may be, from the hon. member for Regina-Lake Centre. We heard a few more today from the Tories, and they were a little more specific than usual. We did not hear just the usual doom and gloom which we have become used to hearing from them; they were a little more specific. They did not bring forward their leader's suggestion of a year or two ago to abolish the Wheat Board or to supplement it with some other export agency.


An hon. Member:: Oh, come on!


Joseph Clifford McIsaac: The Tories were a little more specific today. I hope later hon. members opposite will get into the debate and spell out specific solutions to some of our problems.


Donald Frank Mazankowski: Mr. Speaker, I rise on a point of order. I am sorry to interrupt the proceedings at this time, but I would like to ask the hon. member for Battleford-Kindersley (Mr. Mclsaac) if he would be prepared to quote the reference in which the Leader of the Opposition (Mr. Clark) allegedly said he would abolish the Canadian Wheat Board.


Joseph Clifford McIsaac: Mr. Speaker, I do not have the reference here with me, but I will be glad to check into that. It was a speech made in Manitoba. I may have erred in saying "abolish the Wheat Board", but the suggestion was that the Wheat Board be restricted or that additional agencies be added to take away power from the Wheat Board.


Otto Emil Lang: Mr. Speaker, I rise on the same point of order. I think it might be helpful to hon. members if I make it clear that what the Leader of the Opposition (Mr. Clark) did say was just what the minister of agriculture of Alberta said the other day. He was in favour of letting many other people into the export selling business instead of letting that be the exclusive preserve of the Wheat Board. The hon. member for Vegreville (Mr. Mazankowski) is quite right that this is not quite the same as saying that you would abolish the Wheat Board, but it is really just a way of undermining and destroying the Wheat Board.


Some hon. Members:: Oh, oh!


The Acting Speaker (Mr. Turner):: Order, please.


Harvie Andre: A question of privilege, Mr. Speaker.


An hon. Member:: A point of order.
Movement of Grain


The Acting Speaker (Mr. Turner):: I recognize the hon. member for Calgary Centre (Mr. Andre) on a point of privilege.


PRIVILEGE
Harvie Andre: Mr. Speaker, I give notice of a question of privilege similar to that raised earlier by my colleagues, the hon. member for Grenville-Carleton (Mr. Baker) and the hon. member for York-Simcoe (Mr. Stevens), with regard to an answer given to me this afternoon by the Deputy Prime Minister (Mr. MacEachen) which I believe to be inaccurate. I have just had a chance to peruse the blues and I should like to point out the inaccuracy of his reply that the purchase of Pacific Petroleums by Petro-Canada will not in any way draw on government resources. I would like an opportunity to gather evidence to pursue this later.


The Acting Speaker (Mr. Turner):: This will be brought to the attention of Mr. Speaker tomorrow.


BUSINESS OF SUPPLY
[Stage Direction]
The House resumed consideration of the motion of Mr. Benjamin:
That this House condemns the government for its failure:
(a)	to require the railroads to add 4,000 hopper cars and 5,000 repaired
boxcars to their grain fleet; and
(b)	to give the Canadian Wheat Board total authority to co-ordinate all
aspects of grain movement and any other authority necessary to protect and
expand grain exports.
Lorne Edmund Nystrom: Just so 1 can mediate the dispute between the hon. member for Vegreville (Mr. Mazankowski) and the hon. member for Battleford-Kindersley (Mr. Mclsaac), let me say that by chance I happen to have the quotation of the Leader of the Opposition (Mr. Clark).


An hon. Member:: Let us hear it.


Lorne Edmund Nystrom: The Leader of the Opposition is a real hazard to grain farmers in the west. I am quoting from the Valley Leader issue of August, 1977. In the riding of the hon. member for Lisgar (Mr. Murta), the Leader of the Opposition is quoted as having said:
-marketing boards to be set up only if industries request them.
-expansion of the Wheat Board's selling efforts, but permission given to private organizations to sell grain in competition with the Wheat Board.


Some hon. Members:: Shame.


An hon. Member:: Do you want to emasculate the Wheat Board?

November 13, 1978
Movement of Grain


Lorne Edmund Nystrom: Further, the Leader of the Opposition said that private organizations working alongside the Wheat Board would stimulate the board's efforts, and so on. So here is the Leader of the Opposition saying we should be setting up private organizations to compete with the Wheat Board, which is the first step toward destroying and abolishing the Wheat Board altogether.


Harvie Andre: They cannot compete.


Lorne Edmund Nystrom: Continental Grain and other big grain multinationals in the country competing with the Wheat Board are like having an elephant dance with chickens in the chicken coop. The Wheat Board is a small organization compared with these huge multinationals. I think the position of the Leader of the Opposition is very clear: he would like to abolish the Wheat Board, to get rid of all these public organizations. For the same reason he was opposing today the takeover of the Pacific Petroleum Company by Petro-Canada.


An hon. Member:: You should resign.


An hon. Member:: So should you.


Some hon. Members:: Oh, oh!


Lorne Edmund Nystrom: I see we have ruffled the feathers of the Conservative chicken before he even starts debating.
The motion before the House today is very clear, and I want to point this out in response to my friend, the hon. member for Battleford-Kindersley. It says clearly we want to add 4,000 hopper cars and 5,000 repaired boxcars to the grain fleet, and we want the railways to pay for this. He was criticizing the hon. member for Regina-Lake Centre by saying that that hon. member wanted to give a handout to the railways by subsidizing the railways for the real cost of hauling grain; in other words, covering the difference between the Crowsnest pass rate and the real cost. What we are saying is that if they do not haul the grain, they will not get the money. The quid pro quo here is that if they get the money compensating them for hauling grain, they should damn well pay for hopper cars, repair the boxcars and meet all the other costs required for hauling grain. Railroads have been given sufficient subsidies over the years so that if they are making a decent buck hauling grain, they should darn well pay for the hopper cars and pay for repairing the boxcars needed to haul that grain.
Some Liberal members have asked us why all those boxcars. I just want to quote an article in the Leader Post in which officials of the Wheat Board themselves give us an idea what to say in the motion which is before us. This is an article dated July 22, 1978. At page 22 we find the following:
A spokesman for the Canadian Wheat Board in Winnipeg said the federal government has been told an additional 4,000 new hopper cars plus 5,000 rehabilitated boxcars are required to meet present grain movement needs.
Here is the Wheat Board saying they need these additional cars. The hon. member for Battleford-Kindersley thinks the opposition is often too negative. I agree that some of the speeches we heard from members on my right have been negative, but I think the speech made by the hon. member for

Regina-Lake Centre on the motion was very positive. We have a lot of respect for the Wheat Board, we think they are doing an excellent job, but we also think they need a few more tools with which to do a better job. One is the availability to them of a larger grain-moving fleet. That is what our motion is saying.
If hon. members want to find some other data, look at some of the concerns expressed by some of the commissioners of the Wheat Board about our recent sale to China. As hon. members know, we sold around three million metric tonnes to China. One of the Wheat Board commissioners told my friend, the hon. member for Regina-Lake Centre, that if our grain had been moving efficiently, we could have sold about four million tonnes to China; and if it had been moving really efficiently, we could have sold six million tonnes to China. That is a really big order. It means a lot, not just to farmers, but in terms of Canada's balance of payments, in terms of our dollar, our economic activity and our unemployment situation, and in terms of all kinds of other things that are needed in this country.
We are having such a problem trying to balance those payments that a small investment in boxcars alone would help go a long way toward making our economy more healthy. Commissioner F. Hetland said that if we had some 4,000 extra hopper cars, we would have a net increase in sales of grain worth $700 million a year. That would even help Newfoundland, even though that province does not produce grain, because it would give stimulus to the economy, it would strengthen our dollar, it would create more jobs, it would help our balance of trade, and it would make Canada a much more attractive place economically of which all of us could be proud.
Let me go on to quote the chief commissioner of the Canadian Wheat Board who was speaking at the same convention as that attended by the minister in charge of the Canadian Wheat Board. I am referring to Mr. Esmond Jarvis. On November 9 he said that in the last year we had some $350 million worth of lost sales because of the deferred sales. They turned out to be a real loss to the Canadian economy, according to the chief commissioner of the Canadian Wheat Board.
I think the motion before us today is a very sound one, a very positive and constructive motion. I notice the minister in charge of the Wheat Board himself is waffling on this. He said, if I remember correctly, that if this were last year, if we did not have the cutbacks that the heavies in the cabinet, such as the Minister of State for Federal-Provincial Relations (Mr. Lalonde), had forced on the government, perhaps we would have already put in an order for more hopper cars. But because we have restraint in the government, the minister cannot make that argument forcefully enough at the cabinet table. So I am not sure precisely where the minister stands. He said clearly that there were two arguments. One is: yes, we need more hopper cars; the other argument is: no, we do not need them at this time.
In terms of the second part of the motion which gives to the Wheat Board total authority to co-ordinate grain movement in our country, our party is clear on this. We think all grains should be co-ordinated by one grains board which should have authority on behalf of the farmer. We are talking here about
November 13, 1978

total authority. The minister in charge of the Wheat Board said, if I remember correctly, that he thinks the Wheat Board could have that authority now under the legislation which is being passed through parliament. The minister is a lawyer and it seems strange to hear him say he thinks it might have that power. I should like to hear from him whether or not he really believes it does have that power, and if it does, is he willing to use it? Is he willing to give the Wheat Board power to co-ordinate grain movement in the country, which I know some of the commissioners want?
Those are the two main thrusts of the motion before us today. Now I want to present some arguments as to why I think this House should strongly endorse the position taken by the hon. member for Regina-Lake Centre. I sincerely believe that the CPR in particular, and the railways in general, are on strike against Canadian farmers. Basically they are on strike because they want more money to haul grain. What they are receiving now is the amount guaranteed by the Crow rate. American companies receive approximately three or four times as much for hauling the same bushel of grain over an equivalent distance. This makes our railways very envious, so they continue to run down the service. They deplete services and do not repair boxcars. They put less and less money into the system until the government perhaps bails them out totally and completely. If that is not a strike against Canadian farmers, I do not know what a strike is.
We should use all the available precedents for legislating workers back to work, be they grain handlers, postal workers or any other group. We should legislate the CPR back to work. Under section 262 of the Railway Act, the government has the power to legislate the railways in this country back to work.
I want to illustrate what I really mean when I talk about the railways striking. Through its generosity, the government of Canada in the last few years has purchased 8,000 hopper cars to move farmers' grain. Because of that, many people think that Canada has more grain moving capacity now than prior to the purchase. Back in 1972 the CNR and CPR had 26,000 boxcars moving grain in Canada. In 1978 the number of boxcars was reduced to 12,800. That is a loss of approximately 13,200 boxcars. If one combines the 8,000 hopper cars and the 12,800 boxcars, one will find that Canada's grain moving capacity is less than it was before the hopper cars were purchased. Each hopper car is equivalent to 1.5 boxcars. Thus,
8,000	hopper cars equals approximately 12,000 boxcars. If that is added to the 12,800 boxcars which the railways have presently, one will find that there are 1,200 boxcars less than there were in 1972.


Marc Lalonde: There was more efficiency.


Lorne Edmund Nystrom: If it was for efficiency, I would be very, very pleased. I should like to tell the minister in charge of Canadian unity what he means by efficiency. The National Farmers Union, good friends of the minister in charge of the Wheat Board, had an operation last year which was called "Car
Movement of Grain
Wars" or "Sky Spy". In operation "Sky Spy", they flew over approximately 6,000 miles of railway track in Canada to spy on the minister in charge of the Canadian Wheat Board to see what he was doing about moving grain. They saw the efficiency which the minister in charge of the unity question is so concerned about. They found that hundreds of cars were sitting at delivery points for over a month after being filled but before being moved to the terminal. That is not efficiency. Also they found that thousands of CN and CP cars-I am not talking about hopper cars-had been on the sidings with "bad orders" forms, some as old as 1974.
I should like to refer to part of a brief which was released by the National Farmers Union a couple of months ago and reads as follows:
Our members found thousands of boxcars sitting on sidings or on abandoned lines with "bad order" forms on them. The state of disrepair was assessed by qualified railway engineers and in a substantial number of cases the cars have minimal damage. We have found bad orders forms dating from 1974. That means boxcars have been sitting idle for four years when a small investment on repairs could have put them back into service. Instead they are left abandoned and some cars have been badly vandalized. We have seen a bad order form dated 1975 which indicates the cars merely needed cleaning.
Further on in the brief it continues:
As you already know, we have found CN and CP boxcars in the U.S. hauling American grain. We found, on average, three Canadian cars for every mile of American track flown over. Recently 20 CN hopper cars were seen as far south as Fort Pierre in South Dakota close to the Nebraska border. CP is shipping American grain through Canada on the backaul to help American grain companies get their shipments through to the U.S. west coast ports.
I could refer repeatedly to the study made by the National Farmers Union.


Otto Emil Lang: Will the hon. member permit a question?


Lorne Edmund Nystrom: Yes, Mr. Speaker.


Otto Emil Lang: Would the hon. member make it clear that none of these cars were government purchased hopper cars, and that any hopper car found in the United States may very well have carried Canadian products to the American market, and therefore were perhaps slowly on their way back.


Stanley Howard Knowles: Slowly is the correct word.


Otto Emil Lang: It was as a result of taking Canadian products to the American market that they were there.


Lorne Edmund Nystrom: Slow like molasses, and as an old railroader I am sure Mr. Speaker understands what I mean. I was not referring to government hopper cars. I was referring to hopper cars owned by the railways.


Leslie Gordon Benjamin: They ship American grain to Canada in Canadian cars.


Lorne Edmund Nystrom: Clearly the railways have gone on strike against ordinary Canadians and farmers. They are not repairing their boxcars, and they are being very inefficient about the manner in which cars are allocated. They are going on strike because the rail sectors of the CPR and CNR are not paying

November 13, 1978
Movement of Grain
very much in terms of profit, and they do not believe they are receiving enough for handling grain. As I said before, the railways in the United States receive three or four times as much for hauling a bushel of grain over the same number of miles.
We should legislate them back to work. We believe this can be done under the Railway Act, as the hon. member for Regina-Lake Centre (Mr. Benjamin) and I already have said. If the minister legislates them back to work, I guarantee the support of my party. They should be made to allocate a certain amount of their investment money and cash reserves to purchase hopper cars and to purchase and repair boxcars in order to move grain in the country.
The minister went part way this afternoon by indicating he will ensure that the CPR will repair its cars. I hope he really means that. I hope he uses a heavy fist with the CPR. I hope this is not just rhetoric but that he really means it.
As we have indicated in our motion, 1,000 boxcars are not good enough. Approximately 5,000 in this country require repair. The situation is serious. Some people have asked, "What does repairing a few boxcars really mean? Is the problem not really the production of grain, the over-production of it and the acquisition of more markets?" I should like to refer to my riding and the stockpile of grain in Canada.
Last week a little survey was conducted in my constituency, and we found that most of the elevators were plugged, there is a shortage of boxcars, and there is a lot of concern, as I am sure is the case in the Marquette constituency of Manitoba, about the situation because most of the grain goes through to Thunder Bay. Despite the fact the elevators are plugged, we have found out that there is space in Thunder Bay. That does not make very much sense.
One must keep in mind that in approximately three or four weeks the Thunder Bay route will be frozen due to weather conditions; if we do not move the grain to the terminals in Thunder Bay very quickly, it will be stuck for the winter; and that there are tremendous stockpiles of grain in the country. This year Canada will sell approximately 21 million tonnes of grain. Just a few years ago our biggest sales were 21.6 million tonnes of grain. The most recent estimates of the farm stocks by the Canadian Wheat Board show that we will sell this year 20.4 million tonnes of wheat, 3.3 tonnes of Durum, 1.8 million tonnes of oats, 8.7 million tonnes of barley, .63 million tonnes of rye, .65 million tonnes of flax and 3.7 million tonnes of rape, a total of 39.3 million tonnes. Because of the lack of grain handling facilities we are capable of handling only 21 million tonnes, approximately 50 per cent of the farm stocks.
The Wheat Board talks about the lack of boxcars and hopper cars and the damage it is causing to the Canadian economy. Not until 1985 are we expected to be capable of handling 35 million tonnes a year. This indicates the urgency of the debate before us today and, it is why we must insist that railways repair their boxcars and begin purchasing hopper cars and boxcars from their own funds.


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


Some hon. Members:: Agreed.


Lorne Edmund Nystrom: I shall be finished, Mr. Speaker, in three or four minutes. I would like to remind the House that we have a deficit in our balance of payments this year of $4,150 million. If it was not for the tremendous surplus in wheat and barley sales, that deficit would be well over $6 billion because our sales last year were $2,273 million in those two grains. As Commissioner Hetland said, if we had 4,000 more hopper cars we would have another $700 million in grain sales every year. It is important that this House express very strongly to the minister in charge of the Wheat Board and the railroads, the fact that we are serious about wanting them to repair their boxcars and about having them put more hopper cars on the rails for the farmers of this country.
There is a lot of concern in Saskatchewan that the off-board grain is eroding the superiority of the Canadian Wheat Board and hurting the quota system which is the basis by which farmers have an equal shot at hauling grain to the elevators. Many spokesmen in the west, such as the commissioner of the Canadian Wheat Board and the head of the UGG, are concerned about this very thing. In fact, the only people who are not concerned about the off-board grain situation are the spokesmen for the Conservative party and for Cargill. I have a quote here from Cargill grain about the fact that the Wheat Board is getting tougher in off-board grain and, that they are getting very defensive because they are saying it will destroy competition in the wheat market.
I know that members of the Conservative party are the apologists for the open market, firms like Cargill and Continental. They want to abolish as well the Canadian Wheat Board. That party is the only party in this House that has really come clean and said that they would definitely like to do all these things. The minister in charge of the Wheat Board wants to be half pregnant because sometimes he is on the good side and, sometimes he is on the bad side, but you really never know where he stands. I admire the Conservative party for standing clearly on the side of firms like the Richardson Grain Exchange and the private grain enterprise in this country and for adopting the policies of the nineteenth century. In fact, the hon. member for Vegreville has boasted about barley on the open market and how great the situation is.
The Canadian livestock feed board in its weekly feed grain market report for the week ending October 25, says that the per tonne price of off-board barley was $75.80. If you look at Wheat Board barley, the price was $97.10, substantially higher. If all grain was sold through the Canadian Wheat Board, all Canadian farmers would get a much better price for their barley. However, this is not the philosophy of the Conservative party; their philosophy is to make sure that the grain is sold so that the speculators benefit and be damned the price the poor farmer gets.
November 13, 1978

I can recall the stories of my father and grandfather when the Canadian Wheat Board was formed in 1935. Then the price of a bushel of wheat was only a few pennies, but when it was sold in the spring, after the boys in the grain exchange had finished with it, it was being sold at well over $1 a bushel. They were overcharging the consumers, other nations around the world, and at the same time were parasites, living off the backs of farmers.
Those are the issues confronting us in this debate today. I am very pleased that the Conservative party has taken a clear position, as I said, in its support of the policies of the 19th century. I just hope that the minister in charge of the Wheat Board will get off the fence or fall off on the side of the Wheat Board, giving it more strength; and also that he will get really tough with the railways, as he is being with some of the working people in this country, so that they will do a job on behalf of the farmers and on behalf of each and every Canadian.


Mr. Charles Lapointe (Parliamentary Secretary to Minister of Transport):: Mr. Speaker, the hon. member for Regina-Lake Centre (Mr. Benjamin) is asking me what a bushel of grain looks like. Well, of course no grain is grown in the area of Quebec where I come from and also there is no railway system going through my area, but I can assure him however that the well-being of western farmers and the fact that the greatest possible number of bushels of grains are being moved on Canadian systems and exported is a blessing for the whole economy of this country as much for the constituents of my riding as the constituents of his riding.
Mr. Speaker, after listening today to the speeches made by hon. members on the other side of the House, an unaware listener could be led to believe that there is not an ounce of grain being moved at this time on railway systems in western Canada. Speeches like that, Mr. Speaker, can mislead not only this House but also all Canadians. Of course there are problems in the movement of grain, and we are aware of that; members must not only mention those problems but they should also be aware that this year as in past years more than 700 million bushels will be moved on those systems which members of the opposition consider inefficient and also as being the universal cause of the failure of grain transportation in Canada. There is no failure, Mr. Speaker, quite the contrary, there is a steady increase in the potential of that system. The motion introduced by the hon. member for Regina-Lake Centre is important, and I believe it is essential to discuss the movement of grain as often as possible both in this House and other forums in Canada because it is one of the most important elements of the Canadian economy. And, Mr. Speaker, all Canadians must be aware that grain export is the major factor allowing us to maintain a steady balance of payments in Canada.
Movement of Grain
To improve the system, the mover asks or demands that railways, and I quote:
-add 4,000 hoppers cars and 5,000 repaired boxcars to their grain fleet;-
He also adds that the Canadian Wheat Board should have more authority. That might be a good suggestion, Mr. Speaker, but the hon. member carefully omitted to say what his request means in terms of dollars. He also omitted to put a timeframe on his request. And why did he avoid, Mr. Speaker, setting this timetable and quantifying the amount of money his demand can represent? Simply because the New Democratic Party is most likely a party which will never exercize the responsibility of taking real decisions in this country.
The other solution put forth by the New Democratic Party is to nationalize the Canadian Pacific.


Lorne Edmund Nystrom: It is a very good idea.


Charles Lapointe: I confess that I feel some sympathy for this suggestion and that it may appear to be rather appealing solution in areas of Canada where the railway companies, either Canadian National or Canadian Pacific, have tried not to provide the necessary service for Canadians. However, I think that the middle of the way solution put forth by this government and those which preceded it and which consists in maintaining the powerful state owned network besides a privately owned network is probably the best solution. It is also important aggressively and efficiently with private networks such as Canadian Pacific in such a way that the latter will be compelled to follow the same course and provide the best possible service to the western farmers as well as all Canadians in the field of commodities transportation.
On the Tory side, Mr. Speaker, we have my colleague for Vegreville (Mr. Mazankowski) who naturally deals very seriously with the issue of grain movement as with all the issues in the field of transportation in Canada, with great sincerity I am sure of it. He rightfully tries to find which solutions would be best to provide the best possible service to Canadians, be it in the field of grain movement or in other fields.
However the speeches delivered by my Progressive Conservative friends contain the same basic and unfortunately regular inconsistency of that party. On one hand they ask for additional or increased public funds to enable the railways to purchase their own hopper cars or improve their lines and they say to the government: "Give more money to the railway companies". However, on the other hand, for the sake of the sacrosanct free enterprise and competition they say: "Mind your own business, we have enough state intervention." Now, Mr. Speaker, I think that the inconsistency is apparent and with such a base for discussion, we cannot go very far.
Having briefly dealt with the comments of my colleagues opposite, let us see what the government has done and continues to do to improve the grain transport system. It is appropriate, Mr. Speaker, to remind the House that in 1973 the

November 13, 1978
Movement of Grain
government purchased 2,000 hopper cars. In 1974-75 we added 4,000 new hopper cars and in 1977 we added another
2,000.	In other words, Mr. Speaker, over the last five years the government gave to the grain transport system 8,000 hopper cars at an approximate cost of $260 million, and this is only one of many sides of the governmental action in this field.
Another aspect which is worth mentioning is the upgrading of rails. As the minister said this afternoon, and this was repeated by some of colleagues, it is good to know that last year the government invested $100 million to upgrade rails and that it plans to invest $70 million in similar works next year. Right now, Mr. Speaker, 50 per cent of the rail system in western Canada cannot accommodate these new hopper cars because they are too heavy for the existing rails. So, through this railroad upgrading program in which we already have invested $170 million and in which we have undertaken to invest more than $500 million in the coming years, I believe the improvement of the system will enable us to reach, in years to come, the target of one billion bushels of grain moved over that network, objective set for 1985, I think. It should be achieved easily.
Mr. Speaker, speaking now of another matter, namely increased storage of grains, I should like to quote the excellent reply given by my colleague, the Parliamentary Secretary to the President of Privy Council (Mr. Pinard), to the hon. member for Vegreville in the House last Thursday November 9; I quote from the Hansard for that day, on page 997. The parliamentary secretary was answering the hon. member for Vegreville. After having summed up our interventions with regard to hopper cars, our interventions in the field of railway line improvements, the parliamentary secretary said, and I quote:
The federal government has also contributed to the repair costs of several thousand box cars that will increase our capacity in the short term. Recent improvements to branch lines to Churchill under the prairies branch lines renovation program have also effectively increased our grain exportation capacity through that port.
We are also increasing the capacity of grain terminals in Canada. Under the storage improvement program of the Canadian Wheat Board, the storage capacity should improve by 40 per cent in Vancouver. Half of the storage capacity increase of 5.8 million tons must be done before the coming winter. The rest will be completed by the end of next year.
I should like to quote another paragraph where the parliamentary secretary says, as follow:
Major improvements are being made to increase our present and future export capacity.
We are now studying all possible means to transport a maximum quantity of grain through the St. Lawrence Seaway before its closing, including the extension of operating hours whenever possible. But we do not deal only with those urgent problems, Mr. Speaker, we are also concerned by problems that will be faced in the long term by our grain transportation and hauling system. We commissioned an inquiry, the Hall commission, on complex social and economic factors related to that system. We should soon establish in the prairies a

comprehensive basic branch line system that will be operated at least until the year 2000.
Mr. Speaker, an hon. member, the one for Moose Jaw (Mr. Neil) I think, was telling this afternoon that the grain hauling system out west had been studied to death. Yet it is surprising to note that at the first opportunity opposition members do not hesitate to refer to findings of the Hall commission to state that the government has not been up to its commitments, etc., whereas since the tabling of the commission's major recommendations the government has been busy acting with great celerity to protect immediately, and until the year 2000, all the lines recommended by Mr. Justice Emmett Hall, those which should be part of the basic network of the prairie railway. Also concerning a second category of lines to be studied, jfiie government has acted very rapidly to protect the 2,344 miles of lines which were categorized as "uncertain" and it is expected that by the end of 1980 a decision will be made about those lines. It means, Mr. Speaker, that is in less than a year and a half from now western farmers and all users of the railway service of this region will be able to count on an improved system serviceable all year round.
Mr. Speaker, hon. members readily refer to the conclusions of Mr. Justice Emmett Hall's report, and in the past they used to refer also to another report, namely the Snavely Commission report. But by sheer accident, members opposite have refrained from referring to it because in its final report the Snavely commission states that Canadian products are arriving on export markets faster and in better condition than they have since many years. Of course, by all means our hon. friends opposite will avoid publicizing those positions, those extremely positive conclusions by the Snavely commission. Furthermore, the report indicates that the financial help of the federal government contributed to improve considerably the transportation system since the advisers of the Board have begun studying the cost structure in 1974.
The Snavely report also emphasizes that in 1947 only 9 per cent of grain cars were modern hopper cars whereas in 1977 the proportion was 30 per cent. In addition, more efficient planning enabled us to make better use of the cars since in 1977 an ordinary car made 3.3 more trips than in 1974. This shows that improvements to the system combined with the use of more powerful engines and better tracks reduced by one third the total number of cars which were necessary to transport the grain last year. The report also indicates a marked increase in grain markets in the ports of Vancouver and Churchill. In 1977, 34 per cent of the export business was made in Vancouver compared to 27 per cent in 1974. In Churchill, the export volume increased by 62 per cent between 1974 and 1977 and 3.6 per cent of the total of Canadian exports were handled there last year. Of course, all those conclusions are ignored by our colleagues opposite. And the name of the report, the name Snavely, has totally disappeared from their vocabulary since the publication of this document.
November 13, 1978

My colleague from Regina-Lake Centre says that Mr. Snavely is wrong, Mr. Speaker. I cannot, in tonight's debate, go into a long discussion with him on that issue, but I would be very happy to sit down with him and do so. Together we could review Mr. Snavely's conclusions which show, beyond the shadow of a doubt, that the variable costs of grain transport have risen from $247.1 million to $355.9 million in three years, which means an increase of only 13 per cent per ton. Producers' costs have also gone from $89.7 million to $114.8 million, a comparable increase. So, Mr. Speaker, there are not only negative sides to grain transport, and I think that the government can be proud of the action it has taken in this sector and of the improvements in rolling stock, ways and volume of grain export.
Mr. Speaker, I would like to come back to the importance of this issue for all Canadians. The importance that is recognized by this House and by the government points to one of the most significant facets of our Canadian federation. As I said, grain is one of the key positive factors in our Canadian economy, and grain exports account for some degree of equilibrium in our balance of payments. Quite understandably hon. members from the western provinces and governments of those grain producing provinces as well as farmers in Manitoba, Saskatchewan and Alberta are trying all they can to improve the movement of grain, their potential for larger and larger crops and more and better conditions for maximum revenues. It is quite understandable these concerns are expressed here at the national government level, just as the regional concerns of another province I am more familiar with, the province of Quebec, because we from Quebec have legitimate demands within this federation the same way as the western provinces, the Maritimes or British Columbia. Of course, we all have very strong regional concerns and therein lies the wisdom of our parliamentary system, under which we have a strong central government ensuring some balance between regional interests and a fair redistribution of wealth and interests between the various parts of Canada.
Mr. Speaker, this important debate opened today by the motion put forward by my friend the hon. member for Regina-Lake Centre gives me an opportunity to conclude on that vision of our country that is most important, namely the meeting of regional interests in central parliament where, side by side, whether opposition of government members, we have a duty to try and give Canadians across the country the best possible service, the fairest redistribution of wealth, and I rest assured that the hon. member put the motion forward in the best of spirits, and I would like to commend him for having shown such a spirit of generosity toward all Canadians.


Mr. Gordon Ritchie (Dauphin):: Mr. Speaker, I welcome the chance to speak on the problems of the western grain industry made possible through the motion put by the hon. member for Regina-Lake Centre (Mr. Benjamin) regarding hopper cars
Movement of Grain
provided by the Wheat Board. Being an ex-station agent he is no doubt an expert in this field. This is a problem we have had for a long time. In the issue of the Western Producer for October 26 the headline is: "Railways, Government blame each other for Grain Shortfalls". The article reads:
Railway company spokesmen and government officials pointed accusing fingers at one another when short-falls in the grain handling system were discussed at the Canada Grains Council semi-annual meeting here Oct. 18.
Spokesmen for Canadian National and Canadian Pacific railways said they had sufficient capacity to move grain to export shipping positions if winter shipping surges were spread out over a 300-day shipping season.
I think this is of interest whatever private industry and nationalized industry have to say; they both get together when discussing grain at this time. On a more local level, I remember meeting a grain area supervisor in my riding a few years ago. I asked him, "How is the grain business?" He answered, "When the cars arrive and they are one week late-they are supposed to come on a Tuesday and they arrive on a Thursday-well, we eventually get things done, but sometimes it is rather difficult." We do not know whether the answer lies in more expenditures by the government out of treasury to buy hopper cars. We are not even sure they are being used to full advantage, even when they are under the control of the Wheat Board or the railroads, but this provides them with an opportunity to discuss their problems.
There is no doubt about the seriousness of the transportation problem, at least from an export point of view and the point of view of the good of the Canadian economy. Although sales are good, probably surprisingly good, the farmers have not been able to capitalize on the saleability of their products so that many elevators are congested. While we talk about record grain movement, in some grades such as No. 3 Utility wheat and No. 3 Red there has been little movement, at least in my riding, and the barley producers have been left with little opportunity to sell their grain unless it is to the local feed mill operator. There is practically nothing moving through the board.
It is small wonder that the farmer finds the movement of his grain curtailed or controlled by the Wheat Board. These grain handling companies are often farmer owned, but the farmer finds himself isolated and cut off from the management, all of whom issue contradictory statements and seem to be taking positions antagonistic to what he regards as his best interests. I would like to say that with this conflict of interest coming up, I am glad to have my chance of speaking as a permit holder. Grain is grown by some 200,000 permit holders. It is handled by a monopolistic Wheat Board supposedly working in the farmers' interest and by the railroads and other parts of the transportation system. In many cases the movement of grain seems stymied. Of course, there are government regulations covering the Wheat Board, the railways and the grains commission. Many of these seem to have the effect of limiting the movement of the farmers' grain.
In a general way, I am not in favour of the government of Canada purchasing hopper cars for the use of the railway and

November 13, 1978
Movement of Grain
the grain-handling system, at least without considerable strings attached. As a starter, hopper cars may have seemed a more feasible method of transporting grain than boxcars.
Why are hopper cars not purchased by the railways directly, or even better, by the grain handling companies? Railways purchase their own rolling stock. I understand the oil companies have found it to their advantage to own, manage and route their own cars. If the grain handling companies were charged with moving the grain under their jurisdiction, with the Wheat Board giving them a target to move, they would do better than at present. This possibility deserves to be carefully investigated.
Much better use apparently is made of cars as far as oil companies are concerned when they are owned or at least leased by the oil company. Unfortunately, the manufacture of hopper cars is being directed by the government into areas of high unemployment, and to some extent they represent an unemployment measure rather than their primary purpose of providing service to the western grain producer.
The western grain transportation system is approaching the limit of chaos and recriminations fly thick and fast. The Wheat Board has implied that the railroads are not pulling their weight and in this regard, for once, the railroads have fought back. Both the privately owned CPR and the publicly owned CNR say that their facilities are not being used in a proper manner and that they could haul much more grain if orders were placed in a rational way. Merely increasing the number of hopper cars to sit around deserted sidings or hidden away in isolated gravel spurs is not a particularly good way of moving the grain.
Either the railroads or the grain handling companies should provide the hopper cars or other means of transportation necessary for the movement of grain. Merely the government producing hopper cars is not enough. If the government does pay for the building of those cars, they should be leased to the railways. I understand there is no assessment as to the cost of these hopper cars and no method to provide for their upkeep.
Recently in my constituency there was a shortage of boxcars or hopper cars. It was found they were available, but there were no work crews and no power to haul the cars because of cutbacks and other activities of the railroads which had sopped up their working force. In my constituency, the CNR is the only railway of any consequence.
Obviously one of the important things to consider is who should supply the hopper cars, who should pay their initial cost and who should control them. Should it be the Wheat Board or the grain handling companies? Should producers have the right to order cars? Under the new order of the past few weeks, it seems that right will be taken away from producers or at least be restricted. That right seems to be challenged by the Wheat Board. The producers have fought for these rights over the years. They have fought to order their own cars. At the moment, this right is being jeopardized. It is being challenged by the Wheat Board on the basis that it must control the movement of grain. This is an important principle to consider.
In other words, should we become more and more bureaucratic, controlling the movement of grain in a bureaucratic way, which the NDP would like, or attempt to free it in order to provide a degree of competition that does not seem to prevail at the moment?
Overriding all that, of course, is the problem of the Crows-nest rates. It is now generally realized that it is not practical for the railroads to haul grain at the rates set out in the Crow rates and maintain a viable rail operation. For many years the railways have complained they have not been making money. It seems that the Crowsnest rates were not unreasonable until the last three or four years. While their costs increased, their efficiency increased as well. Therefore, four or five years ago they were still in the black with regard to hauling grain.
Railways are becoming an increasingly expensive operation. Wage structures have continued to rise along with those in other parts of industry. The price of grain at the moment is low. Indeed, in many respects it approaches the low levels of the depression years. It is perhaps fair to say that a grain grower with a section of land might gross $30,000 a year in returns and, after his expenses and a modest return to himself and his living costs are taken out, there is certainly not much left. Can he afford to have his grain hauled down the track by a railroad whose wage structure is much greater than his own? Can he afford to have his grain hauled down the Great Lakes by engineers who earn much more than he would hope to make out of his crop? This gives us considerable food for thought. I would calculate that if present prices in the grain industry are projected, they would probably return something like $3 to $4 an hour for a farmer's work. It certainly puts him in at the lower end of the scale.
The question arises, can the farmer reduce his dependency on the grain handling system and can he profitably take over some of the grain handling transportation that has hitherto been reserved for the railroads? The grain handling system was built for the horse and wagon and elevator points were situated accordingly. But grain hauls of 40 to 50 miles are now common, and as roads improve, highways open up and farms get bigger, transportation is made available. It certainly seems possible that farmers who invest $50,000 or $60,000 in a combine or a tractor would not be able to invest similar prices in a truck to haul their grain to more central gathering points. A haul of 50 or 60 miles may not seem much when the grain is destined for Thunder Bay, a distance of 700 to 800 miles. However, if a producer lives on a branch line, a haul of 50 to 60 miles may well mean that the grain, from an economic point of view, has been hauled half way to Thunder Bay. The farmer's costs may not have been so much out of line with what it costs the railway to maintain a short branch and the attendant large number of people involved in merely standby operations to maintain services.
Construction in the grain transportation system is having some important effects. It seems that with longer hauls by farmers and reduced quotas they have to turn more and more to crops that produce a large amount of money per bushel. Therefore, in areas that are suitable, special crops are receiv-

November 13, 1978

ing more and more attention. The growing of oats has practically ceased, except for local use, as they are pretty well defeated by the high cost of tranportation. Barley is fast approaching the same point and there may well be a reduction in the amount of barley produced if this congestion increases or, conversely, barley will be fed at a local level. We may also be faced with increased pork production.
1 I now wish to refer to the off-board quota. This has become a bone of contention. In fact, if there had not been off-board quotas, many farmers in my area would have delivered no wheat or barley this past season. For instance, we have quotas of, say, five bushels for wheat. But five bushels of No. 1 and five bushels of utility wheat mean a great deal of difference in dollars, because No. 1 brings twice the amount per acre as No. 3 utility, yet for many farmers there was only No. 3 utility wheat last year. Again this year most of the crop seems to be No. 3 red or No. 3 utility. In fact, there was practically no movement of No. 3 utility out of my riding last year. The Wheat Board could not seem to find any sales for it, they said. Without off-board quotas, it does not seem likely any would have moved.
Perhaps this situation will change but the Wheat Board will have to show that it can move the grain. As I understand it, the Montreal feed market is the place where most of the off-board grain is going, so presumably if there are no off-board quotas Wheat Board sales to that market would increase. But there feed grains are in competition with American corn, and in many practical ways it is easier to obtain American corn in the eastern market than western feed grains. A good many farmers have been able to sell grain whereas without the off-board quotas they would have had no market whatsoever and would have been reduced to selling at the local level if they could find any buyers.
It is some years since there has been a glut of feed grains on the prairies, and since then agriculture has changed a lot. There seems less possibility of a greater food-producing industry developing than was the case seven or eight years ago. There are fewer people on the farms and they are not of an age group to be able to involve themselves in the feeding of pigs, always the main meat raised when there is a surplus of feed grains. So the problem becomes relatively greater than it was eight or ten years ago.
Then what about the selling of No. 3 red under the quota system? I am thinking particularly of the Parkland area. It seems likely that with the change in the grading system we shall rarely produce anything more than No. 3 red wheat, at least half of the time anyway. It seems the best the farmers in the Parkland area can get is No. 2 red; with the first shower it is down to No. 3 red and with the second shower it is into the No. 3 utility grade.
The Wheat Board does not seem to be able to move this grain and perhaps I can understand some of the reasons. After all, No. 1 and No. 2 grades bring much more in the way of price, and it costs no more to move than a bushel of No. 3
Movement of Grain
utility. As they bring a dollar or two more a bushel, I can understand the desire of the board to move them. But is this the fairest way of doing things? Should the board be put in the position where it must ration available sales? And what about the barley growers? They are even further down the ladder than the utility wheat people because their grain is less saleable. These are some of the problems which have to be addressed, particularly in the northern parts of the prairie wheat growing area.
I would like to end with one problem of the grain industry which should be set at rest once and for all, and it is this. Does the government intend to put into effect the restricted hours of work for elevator agents? The minister in charge of the Wheat Board is quoted in the Winnipeg papers as telling the Manitoba Wheat Pool that there will be an indefinite suspension of the so-called 40 and eight hours of work by country elevator agents. I think this is important because a great deal of rationalization, a great deal of the future of the country elevator system, is bound up with this apparently simple question. In the elevator system it is a very important factor, and while the minister perhaps does not have full authority to make an announcement, I hope he will prevail on the Acting Minister of Labour (Mr. Ouellet) to make this announcement in the very near future.


Mr. Cecil Smith (Churchill):: Mr. Speaker, we have heard today from non-farmers and retired station agents. I would like to put my two-cents worth in as a member of parliament from an area which has the only inland port in central Canada.
The present government's blatant inability to program grain shipments has cost Canada an additional 4 million tonnes in foreign grain sales and a deferment of 1.5 million tonnes for delivery in 1979. Our grain transportation system is choked by a tremendous backlog in deliveries that has delayed grain shipments right from the start of the 1978 shipping season this spring. Following three record crops, producers have stocks overflowing their on-farm facilities. Prairie grain elevators are stuffed, holding 35 per cent more stock than a year ago, yet deliveries to these primary elevators are lagging behind 1977 figures. At the same time grain stocks at the major export terminals are down 33 per cent from last year. The problem is rail movement of grain to export positions, and more specifically, the scheduling of deliveries.
In this debate on the motion put forward by the hon. member for Regina-Lake Centre (Mr. Benjamin), I am speaking on behalf of the port of Churchill as well as the hinterland to the port of Churchill, which covers most of Saskatchewan where there are at least 118 million bushels of grain which could be destined for shipment through Churchill.
Instead of increasing our grain exports and developing new markets, Canada is losing her traditional customers. Foreign requests to purchase Canadian grain are being turned down because of this government's lack of foresight and initiative to update our transportation system to meet even present demands.

November 13, 1978
Movement of Grain
Our national deficit could be lowered significantly. Instead, grain handling facilities from country elevator to the port terminal limit us to 21 million tonnes of grain exports annually. And as far as this government is concerned, that is all they will supply.
This anomaly in government policy is best exemplified by the port of Churchill. This Manitoba port provides western producers a 10 per cent to 14 per cent higher net return, yet the government refuses to direct more than a nominal shipment of grain through the port. Grain shipments for the 1978 season through Churchill totalled 23 million bushels-down nine million bushels from the expected 32-million bushel quota.
Since only 23 million bushels have been shipped through the port, the port is in a cash loss position. This means that the deficit will have to be picked up by the taxpayers of Canada. Had the port been allocated a few million bushels more, its accounts would have been in the black, and there are not too many ports in Canada which find themselves in the black at year end.
The port of Churchill has a storage capacity of about four million bushels. A few years ago this facility had to be used for grain storage, but for some reason this government takes the approach that it is not going to store grain at Churchill. One of the excuses is that the government does not know just what grain sales it will have next year through that port. However, in this particular year there have already been cargoes sold for shipment next year through the port of Churchill. I therefore see no reason why-with this huge capacity-grain could not be moved into place.
This motion is before us today because there is a shortage of boxcars. It is my understanding that even if boxcars were made available at some later date, the port of Churchill would have to be opened during the winter, which might not be too acceptable. If cars could have been available this fall, the four million bushels could have been put into place before the ice and snow came. It is time the minister took off his blinkers and lifted his eyes to the north.
One-tenth of Canada's total grain exports moves through the port of Churchill. A senior economist for the Wheat Board, Harold F. Bjarnsson, has said that in just six years-by 1985-Canada should be able to export 20 million tonnes of wheat, up to 10 million tonnes of barley and 1.5 million tonnes of oilseeds, for a total of 31.5 million tonnes. That is an increase of 10.5 million tonnes, which will call for a 50 per cent increase in transportation and grain-handling facilities.
The port of Churchill can play a large role in the expansion of Canada's grain export industry. The Hall commission recommended an increase in grain shipments through Churchill to 55 million bushels, but to date this government can see its way clear to allow only a two million bushel per year increase in shipments. With the loss of some nine million bushels this year, it will take us up to five years to make that amount up.
Moreover, the Minister of Transport (Mr. Lang) has virtually ignored the Hall recommendations and commissioned a

second study, the Bryden report, to which I have referred before and which views further development as uneconomic. Now we are waiting for the results of a third report on grain handling and transportation. This government claims to be fighting for a strong federation, but until it can envision Canada as stretching north and south as well as east and west, it cannot hope to maintain a unified and prosperous country.
This year it was expected that the m.v. Arctic would be going to Churchill for a cargo of grain on November 15. I asked if the minister would consider also sending in or having three or four other ships accompany the m.v. Arctic, which is a class two icebreaker. In his reply the minister said he did not think that would be a feasible operation and that no one would want to send ships iri there.
That is not the kind of approach I would like to see taken. I think the minister should have pursued this matter in order to get at least another four million or five million bushels of grain out through the port of Churchill. Because the nine million bushel shortfall at Churchill will have to be made up through Prince Rupert and Vancouver this winter, and looking at the track record of grain handling facilities in this country, I am sure we will end up having that nine million bushels still sitting there next spring.
When I mentioned the m.v. Arctic, the minister said that it had encountered bad ice conditions and that a hole had been ripped in its side. The minister was clouding the issue for the simple reason that at that time the m.v. Arctic was coming from the Nanisivik Mines with a load of ore and it was out on the other side of Baffin Island in Baffin Bay. It was nowhere close to the shipping routes out of Churchill. It was on October 20 that the minister brought to the attention of the House that the m.v. Arctic had encountered ice. The last ship clearing Churchill this year did so on October 24 and encountered no problems whatsoever. I just wanted to clear that up.
The minister was saying that the m.v. Arctic was going to be scheduled for Churchill for November 15. It could not go there because of damage. I understand that it has to go to Rotterdam for complete repair. Because of the slow movement of grain in Canada, 1 ask the government to schedule the m.v. Arctic to go to Churchill by at least July 1, 1979 and to provide at least four or five ships to accompany the icebreaker to Churchill. Let us get the season started so that we can handle not only the anticipated 30 million or 32 million bushels out of Churchill but also set our goal a little higher than that.
I speak for grain handlers and those who work for the National Harbours Board in Churchill. Some of those fellows have lived there for 25 or 27 years, and it is a personal challenge for them to be able to reach and better what they reached in previous years. We have to have a commitment from the government. The minister must work with the Wheat Board, convince it that the CNR can get grain to Churchill and that ships can be scheduled to handle grain through that port.
One other concern to me regarding the port of Churchill also involves the ports of Montreal and Halifax. It is my
November 13, 1978

understanding that an in-house National Harbours Board task force has just been struck to examine the prospects of leasing the ports of Churchill, Montreal and Halifax. I do not know what the idea behind this is. I have not seen the terms of reference. Perhaps the government wants to lease these ports, for example, to Cargill, which would then be responsible for the ports. However, tied to that there would have to be some commitment that Cargill would have the necessary cars to move grain to those ports and thus increase the flow of grain. I look forward to the report of the task force, which is supposed to be released in two months.
The government and the Canadian Wheat Board must think of transportation of grain in this country on a north-south basis as well as on an east-west basis. The old east-west concept which was born at the time of confederation is just not sufficient to handle the amount of grain we are producing in Canada now. We are going to have to use the port of Churchill. When the government is replaced, and I do not think will be too long, 1 am sure the port of Churchill will be used to its maximum capacity in order to relieve the situation on the prairies and get grain moving.
We talk of boxcars' not being available. The distance from Saskatchewan to the port of Churchill is only half the distance from Saskatchewan to Thunder Bay, and it is a little further to Prince Rupert. We must use the port of Churchill so that we can move grain quicker. That is a commitment our party will make to the farmers and producers of this country.


Thomas Gordon Towers: Mr. Speaker, I welcome the opportunity of closing the debate on this major problem which exists in western Canada.
I should say at the outset that history is repeating itself. There is no doubt that today we are going through almost the same thing that grain producers went through 22 years ago. At that time grain was piling up on the prairies and the government of the day was not doing anything about it. It was defeated first in 1957 and then completely defeated in 1958. I see the same thing happening now when I witness the so-called experts on the government side ganging up together with the NDP against the Conservatives. This shows their tunnel vision. They do not realize what the problem is. It is very simple: get out and sell the grain that is there. If you sell it, you move it. These are the two simple things that need to be done.
This is what happened in 1960 and 1961. Hon. members opposite should realize that the then minister of agriculture, the hon. member for Qu'Appelle-Moose Mountain (Mr. Hamilton), made a trip to China at that time. One would have thought the world was coming to an end when those sales were made, and the NDP together with the Liberals of the day criticized those sales bitterly. Now they are following that example.
There is no doubt in my mind that the government will not be in a position to win the next election and that we will have the opportunity to move this grain, because it has to be moved. You can blame whom you like, the government, the railroads
Movement of Grain
or the Wheat Board. Nevertheless, the real crux of the problem is, first of all, to go out into the world market and sell it. We are competing now with other countries for grain sales because of the fact that there is a small surplus.
I am particularly concerned about some of the comments made by the hon. member for Battleford-Kindersley (Mr. Mclsaac) when he said that the western grain grower has fewer problems now than he had eight or ten years ago. He went on to say that if you compare the western grain farmer's net worth now with his net worth a number of years ago, you would find it is a lot greater. It is not the net worth that is important because many cemeteries are full of rich farmers. It is the net income that is important, and this is what members opposite do not seem to realize. The grain farmer must have an increase in profit so as to stay in business.
As much as I do not like statistics, I think I will have to put some on the record to set it straight. In the last five years, if we compare the cost of wheat with the increased cost of production, we find that it would have to sell at approximately $3.62 a bushel. What is it selling at? It is selling at $3.19 a bushel. This means that the western grain producer is falling behind and his costs are increasing tremendously. In the last 27 years the cost of machinery alone has gone up over 100 per cent.
I should like to impress upon members of the House that 30 years ago this fall feed grain in western Canada was selling at exactly the same price as it is this year. How in the world can anyone survive in that kind of situation, with increased cost of production, increased taxes, increased cost of fertilizer? That is why it is so urgent that the government realize the predicament of the grain farmer. Many grain farmers are going further into debt. The farm debt in western Canada has doubled in the last five years. This means added cost in interest. We have seen the cost of borrowing money go up in the last several months. The bank rate has increased six times this year. This is reflected in the cost of operation of the western grain farmer.
We cannot fool around with this situation because it is too important to our economic well-being, too important to those who are involved. Let me show exactly what is happening. I wish the minister in charge of the Canadian Wheat Board, his parliamentary secretary or anybody else on the other side would come over here so that I could show him a picture of farmers loading their own grain on their own cars. They have to go back to doing that because the elevators are plugged. This year alone 1,042 producer cars have been loaded between the beginning of the crop year, that is August 1, and the end of October. This compares with 250 producer cars shipped in the same period last year.
This proves the agility and versatility of the western grain producer, but let me impress upon members that he can only go so far; he can only spread himself so thin. If hon. members opposite, in the short time they have left on the government side of the House, do not do something about this, I can assure them that they, together with the NDP, if the latter continue to support the government, will not find any of their members
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elected in any of the western provinces in the next election, and I would be prepared to wager that with any of them.
There has been a great deal of discussion with regard to the problems associated with the Crowsnest pass rate. I have to impress upon hon. members opposite and on the minister in charge of the Canadian Wheat Board, who is also the Minister of Transport (Mr. Lang), that problems in western Canada connected with the movement and sale of grain have created a schism between beef producers and grain producers. The government, the minister or the cabinet-I do not care who- are the logical people to get busy and alleviate this serious problem.
I hope that as a result of this debate the minister has become cognizant of the serious problem which exists on the prairies, because I have a great fear that hon. members opposite, who have never had to rely on net income from grain to pay for their groceries, to pay their bills or to maintain their families, do not realize the seriousness of this situation. I cannot express more firmly that it is very important that action be taken now.


BUSINESS OF THE HOUSE
Mr. Paproski:: Mr. Speaker, I would appreciate it if somebody on the other side of the House would let us know what the business is for tomorrow. Perhaps the government whip might be able to inform us.


Joseph Clifford McIsaac: Mr. Speaker, tomorrow we will deal, in the following order, with Bill C-7, Bill C-5, and Bill C-10, whether or not we get to the final one. That is the order in which the government will put forward the business tomorrow.


Mr. Deputy Speaker:: It being ten o'clock p.m., the proceedings on the motion have expired in accordance with Standing Order 58(11).



PROCEEDINGS ON ADJOURNMENT MOTION

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

Mr. Marcel Roy (Laval):: Mr. Speaker, first I thank you for giving me this opportunity to rise once again on an issue which

has been the subject of several interventions not only from myself but also from the hon. member who took the floor before me as the representative of Laval riding, our good friend and colleague, Mr. Jean Rochon. It concerns the flood problem. We have been informed of the budget cuts made by the Government of Canada, and I think we all agree that budgets must be seriously trimmed down, but when we are directly concerned we may not agree so readily. So to lessen the effects of those budget cuts, considering the seriousness and the priority of our problem, floods in the Montreal area, I communicated with the Minister of State (Environment) (Mr. Marchand) last October 16 in a letter referring to the agreement made on October 4, 1976 between the Government of Canada and the government of Quebec whereby $5 million were to be earmarked for undertaking works in the Montreal region to reduce damages due to floods.
In August 1977, having examined together the situation, the two government levels agreed to extend the agreement for two years, in other words until March 31, 1980 and the Minister of State (Environment) confirmed that agreement to the Quebec natural resources minister on October 31, 1977. I expressed my concern over the possibility that this budget might be cut due to restraint measures.
I mentioned that I wanted to advise him that a cut would be hardly acceptable to people who live on the shore of the Prairies and Mille-Isles rivers and who must suffer those floods every spring time since almost 30 years. To make the public aware of that situation, all we have to do is to make them read again newspaper reports from 1963-64 and 1971. And now that almost everybody has a television, it is even easier to witness it through images.
Given the importance of those works, I asked a question of the minister last November 7. I asked him if he intended to cut expenses regarding the commitment I referred to earlier, and I learned that the release had been issued by some PQ members coming from that area who had mentioned that we were refusing to go ahead with our commitment before 1980. In his answer, the minister referred to an agreement of 1975.
I have with me a press release mentioning the implementation of a diking program in accordance with an agreement on hydrometrical survey cost sharing which was reached on March 17, 1975 between the Liberal government of Quebec represented by then minister Gilles Masse and the Canadian government. I was not completely satisfied with the minister's answer because it seemed to me that we did not directly tackle the problem I had raised. However I was a bit more optimistic when the minister told me that he would be on the site last Friday. The minister was given the opportunity to fly over the concrete dike built along the river to control the water level and also over the pumping station system established with a view to draining the water which could cause damage in spite of the dikes. I am optimistic about the minister's attitude but I am still concerned with the situation.
November 13, 1978

I suggest, Mr. Speaker, that we put this question on top of our priorities in view of the damages that have been caused by spring floods in 1974. I refer here to a document issued by the department stating that the cost incurred by the Canadian government for damages caused by floods in the Ottawa River, the Mille-Isles River, Bizard Island and the Prairies River amounted to about $25.5 million for 1974 alone. It seems to me as was stated in the agreement, half of this amount would be sufficient to avoid any additional spending and that it would contribute considerably to improve a situation which has already lasted for too long.
Mr. Speaker, I mentioned this problem to make my colleagues in the House aware of the importance of this situation. The time allotted to me is limited but it seems to me we should give consideration to the natural resource contained in these two rivers, the Prairies River and the Mille-Isles River. This touristic attraction, this holiday attraction should not be a polluting factor, this natural resource should become as soon as possible a regional waterway centre, by the development of the Prairies and the Mille-Isles rivers and thus contribute to economic progress of the area north of Montreal. So it seems to me the provincial, municipal and federal governments should join hands in the pursuit of this goal.


Mr. Jack Pearsall (Parliamentary Secretary to Minister of Fisheries and the Environment):: Mr. Speaker, as a result of flooding in the Montreal area in the early 1970s the federal government, in full and equal partnership with the province of Quebec, conducted a comprehensive study of the causes of flooding and developed an integrated plan to remedy the problem. This plan included needed liaison with the bodies responsible for regulating the Great Lakes and in particular the flows in the St. Lawrence River. Schemes were mapped out to enlarge storage capacity in the upper part of the Ottawa basin and to provide for local diking and for control works at the head of the Mille Isles River, the most northerly outlet of Lake of Two Mountains. The integrated plan also included flood risk mapping.
The plan of which I speak was prepared by a federal-provincial committee in 1976. In October of that same year, implementation of its recommendations began. Since then, diking has been completed for three of the communities most severely affected and work should commence soon to protect a fourth community recommended as part of the integrated plan. Mapping of the flood risk areas in the Montreal region at a scale of 1 to 10,000 is complete, and a series of 22 maps is available to ensure that people know where the flood risk is greatest.
On May 11 of this year, the federal Minister of the Environment (Mr. LeBlanc) and the responsible provincial minister jointly designated the flood risk area, thereby assuring that the provincial and federal as well as local governments would discourage development in those areas, development that would be liable to future flooding. All the work that has been
Adjournment Debate
done to date has been done under formal agreement with Quebec, and this includes the studies, the mapping and the diking.
There are a number of communities in the Montreal region which remain unprotected, and discussions have been held with provincial authorities on this problem. Obviously, not all communities can receive protection at the same time, but our record in the Montreal region is one that the federal government can be proud of. Anyone implying anything else just does not understand the complexity of the flooding problem. As I stated earlier, we cannot work everywhere at once.
Flood control is extremely expensive and there are often alternative ways to provide protection. I have already mentioned the use of a storage reservoir in the upper basin and of control works at the upper end of the Mille Isles River. These alternatives to local protective works such as dikes can be just as effective. We-and I speak here of the federal government in conjunction with the province-have not completed all the work we have in the Montreal region; because of the cutbacks, the job will take longer than we previously thought. In the interim, studies are continuing jointly with both Quebec and Ontario on the best way to use the storage capacity of existing reservoirs, and of Lake Ontario, to reduce flooding in the Montreal region.


Mr. Deputy Speaker:: Order, please. I regret to interrupt the hon. member but his time has expired.


FISHERIES-CLOSING OF ST. LAWRENCE, NEWFOUNDLAND FLUORSPAR MINE-EFFECT ON EMPLOYMENT IN INDUSTRY
John Carnell Crosbie: Mr. Speaker, the town of St. Lawrence, Newfoundland, was sentenced to death by Alcan when they decided to close their fluorspar mining operation at St. Lawrence. The provincial government of Newfoundland together with Fishery Products Ltd. devised a scheme together with the local citizens' committee in St. Lawrence to resuscitate the town economically by constructing a fish plant in St. Lawrence, which has a fine harbour, and providing employment in the fish plant for the fishermen in that area who were formerly miners. Everything has been done, everyone is ready to go ahead except the Minister of Fisheries and the Environment (Mr. LeBlanc), who is dragging his feet, who has been delaying for some three months the decision whether or not two Portuguese gill-netting draggers can be permitted to fish into this plant and land their catch there so that there will be enough fish to keep the plant operating a reasonable length of the year to make it economic and viable.
In other words, Mr. Speaker, the situation we are in now is that our fisheries dictator is dithering while the town of St. Lawrence is withering. The people are on unemployment insurance there and their unemployment insurance is starting to run out.
All arrangements were made for construction to start on this plant on August 1. It has been held up because we are waiting
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November 13, 1978
Adjournment Debate
for the Minister of Fisheries of Canada. It is now November 13. The project is going to be supported by DREE. Fishery Products Ltd. is putting up its own money and there is a contribution from the provincial government.
Last January 20, a DREE assistant, Mr. Tom Webb, was quoted as saying that the federal government was a long way from making any decision on the proposed fish plant. Here we are eleven months later and there is still no decision on it. A spokesman in the minister's office on the same date, January 20, was non-committal when asked to predict the future date for a federal decision on the St. Lawrence proposal. He might well be non-committal. All the work has been done and in July, when the minister thought a general election was imminent, he gave general approval to the scheme.
Landed immigrant status was to be granted to Captain Almeida, the Portuguese owner, and his crews. The proposal was that the vessels would operate under a Canadian company. The fishermen would be landed immigrants and teach Newfoundlanders their techniques. Apparently, these vessels are really excellent and with their new methods, they catch a lot of fish. The Portuguese government objected to that method, however, and now the proposal has been before the minister for several months that there be a charter arrangement for these vessels so that they can land their fish under contract to this new fish plant in St. Lawrence. But still the minister does not act.
Today he said he was going to send a changed proposal to Fishery Products Ltd. this week. This means there will be no construction. It will not be ready in the spring. It will not be ready to receive fish next year. People will be coming off unemployment insurance and going on welfare, degraded, because of the lack of action by this minister.
This minister stopped the Nordsee investment in Harbour Grace that would have provided year round employment there. He is against any foreign control, any foreign entry into the fishery in Canada, but he has agreed to all kinds of deals with the Bulgarians and Russians for buying fish from the union in Newfoundland. He has agreed to East German trawlers landing fish at the lake plants on the south coast of Newfoundland-Canadian quota fish for the lake plants. He has agreed with Norwegian vessels landing fish at four fish plants at Conception Bay and one in Trinity Bay, but he will not agree to or make up his mind about this arrangement with two Portuguese vessels so that this new fish plant can be built in St. Lawrence to give those abandoned miners some hope for the future, some employment, some occupation to go back to. Why is it, Mr. Speaker, that the minister is carrying on like this?
It has been stated by the provincial government, by Fishery Products Ltd., by everyone involved, that the only thing holding this plant up now is the minister. I should like to put on the record some quotations from a column entitled "Double 007 Seven" which appeared in the Daily News on November 8. This column is usually very favourable to the minister and to the Liberal party. It reads in part as follows:

Unfortunately Ottawa, in the person of the Minister of Fisheries, Romeo LeBlanc, is being something less than co-operative.
In July, when a federal election appeared imminent, he quickly agreed to the proposal which included the use of two Portuguese-owned vessels to supplement locally caught fish and thus ensure a year-round production at the proposed plant.	.
A little later this statement appears:
His procrastination has prevented a goodly number of St. Lawrence men from obtaining work on the project during the winter months.
And still later the writer had this to say:
Either Mr. LeBlanc is completely heartless, excessively stupid, or someone had failed to inform him of the plight of the nearly three thousand people in the town.
The writer goes on to mention that their only hope is the member for the district, the Secretary of State for External Affairs (Mr. Jamieson). I say, where has the Secretary of State for External Affairs been while this affair has been going on, while this hang-up has been in effect since last August, while St. Lawrence is abandoned, while this fish plant has been stopped? Where is the Secretary of State for External Affairs? Is he going to be dictated to by the Minister of Fisheries who will not move, who is incapable of making up his mind-who only makes his mind up when the president of the fisheries union in Newfoundland, Richard Cashin, tells him to make it up? When is the Secretary of State for External Affairs going to make the Minister of Fisheries move on this matter which is preventing the fish plant from starting production down in St. Lawrence?
The new play is no longer "Waiting for Godot"; the new play is "Waiting for Romeo". There is decision after decision in his department waiting for him to make up his mind on. He has a pathological disdain for anything to do with countries outside of the Iron Curtain apparently. It is all right for East Germans to go and land their fish at lake plants on the south coast under an arrangement, but not for Portuguese to land fish at the town of St. Lawrence on the south coast. It is all right for Bulgarians and Russians too. It is all right for Poles. There is a deal that has been negotiated now with Poles for winter fish, but for some reason when it comes to the West Germans, Portuguese or whatever, he is incapable of making up his mind.
Captain Almeida and his two ships cannot control the fishery of Newfoundland; they cannot control this fish plant. The fish plant is going to be owned by Fishery Products Ltd., fully owned by them. These vessels will come under Canadian control. There is a simple chartering agreement that is put before the minister. He has agreed to charters for all of these other vessels I have mentioned. What is holding them up in agreeing to the chartering arrangements so that construction can start on this fish plant? It is now November 13 and it is unlikely that construction can even be started and be finished for next spring. They are going to lose their whole year's fishing in St. Lawrence. They will lose a year's employment. They will have to go on welfare. These are the people who have been laid off because the fluorspar mine closed down.
November 13, 1978

If the minister can give us some reasonable explanation, Mr. Speaker, we would be pleased to have it. But until we get it, we have to tell the minister that it is time for him to stop dithering and take action on this very serious problem.


Albert John (Jack) Pearsall: Mr. Speaker, no one is more anxious to solve the unemployment problem in the community of St. Lawrence than the Minister of Fisheries (Mr. LeBlanc). This is evidenced by the fact that the minister approved two licences for Fishery Products Ltd. and so advised the company on May 3 of this year. If the company had stuck to this original agreement we would have been able to provide the needed jobs for the community, and at the same time maintained control of fishing licences in the hands of Canadians.
However, this company was not able to stick to the agreed approach. They informed the department on August 15 of this year that they could not carry out the terms of the original proposal. The department immediately exchanged letters with the company and met with their principal officers in Montreal on October 3 in order to try and reach a mutually satisfactory solution. The terms the company was now proposing were considerably different from what they had agreed to earlier. In essence, the new proposal involved foreign ownership of the licences and this is unacceptable to the government and unacceptable to those Canadians in whose name we fought for the 200-mile zone.
The minister informed the House today-and I can only reaffirm it again tonight on his behalf-that the government will be making another proposal to the company which will allow them to proceed with the fish plant and, as a consequence, to supply the much needed employment for this community. The proposal should be made in a matter of days, and certainly no later than the end of this week. It is the minister's hope that the company will be able to proceed with the government's second offer when it is finalized. This offer, like the first, is consistent with the over-all policy for a controlled expansion of the fisheries, with control remaining in the hands of Canadians.
The Minister of Fisheries also assured the House that if the second proposal was unacceptable to Fishery Products Ltd., then other avenues would be quickly explored. In short, the minister has asked me again to assure the people of St. Lawrence that something will be done for them, and done by 1979.


THE CANADIAN ECONOMY-INQUIRY WHETHER GOVERNMENT HAS SPECIAL ECONOMIC PROGRAM FOR NEWFOUNDLAND
Alphonsus Faour: Mr. Speaker, my comments this evening concern a special economic program for the province of Newfoundland in view of the high unemployment in Newfoundland and the sluggish performance of the economy, especially this year. I addressed a question to the Minister of Finance (Mr. Chretien) on October 30, 1978 to that effect and the minister answered by saying that consideration is always given to parts of the
Adjournment Debate
country like Newfoundland. He cited the Department of Regional Economic Expansion and government employment programs such as Canada Works as ways in which the federal government helps. Although DREE and the work programs have been in effect for many years in the province of Newfoundland, we still have a depression level of unemployment.
These programs of the federal government do not get at the root causes of unemployment in Newfoundland. The root causes are not served by these federal programs. Unemployment in Newfoundland is directly related to the province's position with the rest of Canada. A good example of how its position with the rest of Canada has a detrimental effect with regard to government programs was the 3 per cent remission of sales tax enacted by the federal government last spring. It was of little benefit to job creation in Newfoundland.
The benefits of any increased spending in the consumer-purchasing area are felt in Ontario and other areas where manufacturing industries are concentrated. This is, of course, concentrated in central Canada. That area of the country benefits from a policy such as the 3 per cent remission of sales tax, but not an area like Newfoundland, which does not have this type of industry.
The structure of the economy of Canada militates against Newfoundland ever improving its position in the Canadian federation. I quote from the report of the People's Commission on Unemployment in Newfoundland, released earlier this year, page 15:
Tariffs and import duties protect the market for Central Canadian industry, and government stimulants encourage consumption, but there is no such protection for producers or raw materials. If the Aluminum Company of Canada can get cheaper fluorspar in Mexico, the miners of St. Lawrence lose their jobs, but they and their families must still buy goods that are not produced in Newfoundland-
Transfer payments from Ottawa can be viewed as an indirect subsidy to Central Canadian industry: a subsidy which, while keeping Newfoundlanders alive, also serves to keep Newfoundland's economy underdeveloped.
The present structure tends to perpetuate the inequalities of income and opportunity that exist in this country with regard to an area like Newfoundland. Federal programs hailed by the minister as special considerations have been a dismal failure. The minister relied upon DREE as a program to help Newfoundland.
Let us look at DREE. When it was set up in 1969, its stated objective was to redistribute wealth from the have provinces to the have-not provinces on an enduring basis. What has been the result? Up until 1975, $185 million was spent to provide a total of about 3,400 jobs. The Economic Council of Canada in its 1977 report stated that in the period 1970-75 over 8,300 jobs were needed just to reduce unemployment in Newfoundland by one half of 1 per cent.
As for where the money was spent by DREE, I go back to the People's Commission report, page 70, and I quote:
Between 1969 and 1975 DREE spent more than 75 per cent of all its moneys in the province on what the Economic Council of Canada calls "non-rural infrastructure"-

November 13, 1978
Adjournment Debate
The commission finds nothing wrong with the construction of roads and the building of schools. But we must seriously raise the question as to whether DREE has, through its support of urban development, made our rural areas less competitive in terms of economic development and job creation.
DREE seems to have contributed to the non-viability of our rural areas without any redeeming contribution to our urban areas. In view of this type of situation, it is incumbent on the minister to give this House some concrete proposals as to what he is prepared to do in his forthcoming budget to realistically meet the pressing needs of the province of Newfoundland.
I call on the minister to bring in a new deal of a Marshall plan type of economic package that will radically change the position of Newfoundland within the Canadian economy so that real and lasting benefits might result.


Mr. Roger Young (Parliamentary Secretary to Solicitor General):: Mr. Speaker, I should like to respond on behalf of my colleague the Parliamentary Secretary to the Minister of Finance (Mr. Martin) who has been unavoidably detained elsewhere this evening.
As the hon. member for Humber-St. George's-St. Barbe (Mr. Faour) indicated earlier, the Conference Board in Canada has forecast that real output in Newfoundland will decline by almost 2 per cent in 1978. However, it is important to note-as the Conference Board has done-that this contraction is in large part due to the protracted strike, which lasted from March to July, in Labrador's iron mines. Production has since resumed, and indeed the Conference Board forecasts a real growth of almost 4 per cent in 1979 which will more than recoup the losses of the previous two years. In spite of this decline in real output in 1978, the Conference Board also forecasts a growth of 2.9 per cent in employment in Newfoundland in 1978; but as in the case in the rest of the country,
the growth of the labour force is even greater and consequently the rate of unemployment has risen.
As the Minister of Finance (Mr. Chretien) indicated on October 30 when the hon. member first raised the question, the national and regional economic situations are taken into account when the budget is drafted. Moreover, as all hon. members know, the provisions of the budget are not discussed prior to the presentation of the budget, and hence they will have to wait until later this month for the budget.
I should, nevertheless, make note of a few points with regard to the request that some special economic program be set out for the province of Newfoundland. First, as I mentioned at the beginning in noting the Conference Board's forecast, this year's decline in real provincial output is in large part due to strike activity. This is now past and, more important, no structural change had occurred to bring this decline about; consequently, the need for special consideration does not arise because of this forecast decline.
Second, as the Minister of Finance stated on October 30, there already exist numerous provisions and measures which do provide help and incentives to those provinces such as Newfoundland which have higher than average unemployment rates and below-average per capita incomes.
Finally, I should remind the hon. member that the Economic Council of Canada has currently under way a major study of the Newfoundland economy; the government will wish to consider this study and its recommendations when it is completed, and subsequently take appropriate actions.


Mr. Deputy Speaker:: The motion to adjourn the House is now deemed to have been adopted. Accordingly, this House stands adjourned until two o'clock p.m. tomorrow.
Motion agreed to and the House adjourned at 10.30 p.m., without question put, pursuant to Standing Order.

Tuesday, November 14, 1978