1978-02-20

ROUTINE PROCEEDINGS


Mr. Lincoln M. Alexander (Hamilton West):: Mr. Speaker,
I have a motion under Standing Order 43 on a matter of urgent and pressing necessity. If hon. friends would listen to the motion, I am sure they would agree with the sentiments expressed in it. Given the fact that 20 years ago today the Hon. Ellen Fairclough was Acting Prime Minister, being the first and only woman in Canadian political history to hold such a position, I move, seconded by the hon. member for Yukon (Mr. Nielsen):
That this House extend its sincere congratulations to the Hon. Ellen Fairclough for the significant contribution she made to Canadian political life, for being, 20 years ago today, the only woman in Canadian political history to serve as Acting Prime Minister; and requests that the Speaker write a letter of congratulations to the Hon. Ellen Fairclough on this very significant anniversary.


Mr. Speaker:: Presentation of such a motion for discussion, pursuant to the Standing Order, requires unanimous consent. Is there unanimous consent?


Some hon. Members:: Agreed.


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


[Stage Direction]
Motion agreed to.

Mr. Stanley Knowles (Winnipeg North Centre):: Mr. Speaker, this is a significant day in yet another way. I hope the House will all agree with the motion that I should like to present. I therefore move, seconded by the hon. member for Timiskaming (Mr. Peters):
That this House, taking note of the fact that today is Heritage Day, warmly commends those who are recognizing how great is our heritage, reprimands the government for having refused to proceed with its own Bills C-30 and C-32 of last session that would have made this day a holiday, and calls on the government to proceed with the necessary legislation during the course of this session, so that in February, 1979, Heritage Day will be celebrated in fact as well as in spirit.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


POST OFFICE
Mr. Ray Hnatyshyn (Saskatoon-Biggar):: Mr. Speaker, I rise under the provisions of Standing Order 43 to move the following motion on a matter of urgent and pressing necessity. In view of the announced intention of the Postmaster General to carry on the ill-conceived freeze on postal delivery to new urban subdivisions on the basis of the size of the deficit in the Post Office, and in view of the fact that this growing lack of service will cause a shift to alternative services, thus exacerbating the growth of the deficit in the Post Office operation, and also in view of the heavy representations made to the Postmaster General typified by petitions from city council and citizens of Saskatoon for full delivery service, I move, seconded by the hon. member for Parry Sound-Muskoka (Mr. Darling):
That this House direct the Postmaster General to implement immediately steps to provide full delivery service to Canadians and repudiates the position taken by the Prime Minister that consideration be given to terminating postal delivery service.


Mr. Speaker:: Presentation of such a motion for discussion requires the unanimous consent of the House. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.

February 20, 1978


AGRICULTURE
Mr. R. E. McKinley (Huron-Middlesex):: Mr. Speaker, I rise under the provisions of Standing Order 43 on a matter of urgent necessity. Because of the fact that the agricultural rehabilitation development agreement of the government with the province of Ontario ran out in 1975, was extended to 1977 and has been extended again to 1979,1 move, seconded by the hon. member for Perth-Wilmot (Mr. Jarvis):
That the government negotiate the normal term agreement before this latest extension runs out, and that the province of Ontario be offered agreements on projects similar to those given to governments of some other provinces in Canada.
Anything less would be nothing short of outright discrimination.


Mr. Speaker:: Presentation of such a motion for discussion can only be done with unanimous consent. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


SUGGESTION DATES OF PARLIAMENTARY SESSIONS BE FIXED IN ADVANCE-MOTION UNDER S.O. 43
Mr. Adrien Lambert (Bellechasse):: Mr. Speaker, under the provisions of Standing Order 43, I seek the unanimous consent of the House to introduce a motion which, I hope, will be accepted to solve once and for all a very important procedural matter of pressing necessity.
Considering that many members of the House have already expressed the desire that, for maximum efficiency, the sessions of this House be held on dates fixed in advance, I move, seconded by the hon. member for Villeneuve (Mr. Caouette):
That the beginning and the end of the sessions be fixed in advance by the Committee on Procedure and Organization so that Parliament may operate at maximum efficiency.


Mr. Speaker:: Order. Such a motion can be presented for debate, pursuant to Standing Order 43, only with unanimous consent. Is there such consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


EXTERNAL AFFAIRS
Mr. Otto Jelinek (High Park-Humber Valley):: Mr. Speaker, pursuant to the provisions of Standing Order 43, I rise on a matter of urgent and pressing necessity dealing with a family reunification problem. Mrs. Xenia Elfvengren, now a Canadian citizen, has been attempting through all channels to bring her German-born daughter to Canada from the Soviet Union where she is being held against her wishes for reasons unknown. Since this attempt for family reunification has been going on unsuccessfully for 2Vi years, I move, for humanitarian reasons, seconded by the hon. member for Saskatoon-Biggar (Mr. Hnatyshyn):
That the minister of external affairs take all possible action with the Soviet Union in making it possible to unite Sonya Vasichina with her mother here in Canada.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


HEALTH AND WELFARE
Mr. Mike Landers (Saint John-Lancaster):: Mr. Speaker, I rise on a matter of urgent and pressing necessity under the terms of Standing Order 43. In view of the fact that obesity is one of the major causes of heart disease, and in view of the fact that the Weight Watchers' program is a proven method of weight reduction and weight control, I move, seconded by the hon. member for Malpeque (Mr. Wood):
That this House urges the Minister of National Health and Welfare to review the food and drug regulations with a view to allowing Weight Watchers' food products to be sold in Canada.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.
February 20, 1978


SENIOR CITIZENS
Mr. Derek Blackburn (Brant):: Mr. Speaker, I rise under the provisions of Standing Order 43 on a matter of urgent and pressing necessity. In view of the fact that the government chose not to continue to fund a group in my constituency which assisted senior citizens in filling out their income tax forms, in view of the fact that many senior citizens cannot afford the professional assistance of accountants, and in view of the fact that this is a nation-wide problem, I move, seconded by the hon. member for Winnipeg North Centre (Mr. Knowles):
That the government provide direct personal assistance to senior citizens who need help in filling out such income tax forms, which are becoming increasingly more complicated for the elderly.
Oral Questions AGRICULTURE


GOVERNMENT ACTION TO CORRECT DROP IN FARM INCOME-MOTION UNDER S.O. 43
Mr. Paul Yewchuk (Athabasca):: Mr. Speaker, I rise under the provisions of Standing Order 43 to move a motion of urgent and pressing necessity. In view of the fact that since the Minister of Agriculture (Mr. Whelan) has been appointed, net farm income has dropped sharply, and there appears to be a direct relationship between his tenure of office and this sharp drop, I move, seconded by the hon. member for Provencher (Mr. Epp):
That the Prime Minister explain on motions the reasons for the sharp drop in farm income and whether he plans to take any corrective action.


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


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


PUBLIC SERVICE
Mr. Dan McKenzie (Winnipeg South Centre):: Mr. Speaker, I rise on a matter of urgent and pressing necessity pursuant to the provisions of Standing Order 43. In light of the fears expressed by Ottawa employees of the export and import permits branch, a division of Industry, Trade and Commerce, and the Canada Employment and Immigration Union of Ontario and Quebec, that employment agency employees in the federal civil service will be made term employees and will start paying into federal pension plans, starting this month, to beat the April 1 deadline when DSS will become the sole contracting authority for temporary help services, I move, seconded by the hon. member for Grenville-Carleton (Mr. Baker):
That this House direct the President of the Treasury Board to order all federal government departments and agencies to put an immediate halt to making temporary employees permanent, and that all his cabinet colleagues follow out his directive immediately to put a stop to the state of utter confusion over hiring in the federal civil service.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


Some hon. Members:: Agreed.


Some hon. Members:: No.


PRESENCE IN GALLERY OF PRESIDENT OF SENATE OF MEXICO AND DELEGATION
Mr. Speaker:: Before beginning the question period, I know that all hon. members would want to join with me in calling attention to the presence in our gallery of a very distinguished group of visitors, headed by the President of the Senate of Mexico. I refer to a delegation of Mexican parliamentarians who are here to arrange further meetings with their counterparts in Canada. The group is headed by the very distinguished President of the Senate, President de la Gran Comi-sion of the Senate of Mexico, Senator Joaquin Gamboa Pascoe.


Some hon. Members:: Hear, hear!



ORAL QUESTION PERIOD


Mr. Joe Clark (Leader of the Opposition):: Mr. Speaker, in light of the continuing drop in the value of the Canadian dollar, I would like to direct a question to the Minister of Finance which he declined to answer last week. Can the minister tell us whether it is the intention of the government to trigger higher interest rates to stem the flow of funds from Canada?

February 20, 1978
Oral Questions

Elon. Jean Chretien (Minister of Finance): Mr. Speaker, I did not refuse to answer that question. If we changed the policy of the government, we would announce it in the usual way.


USE OF STAND-BY CREDIT TO BOLSTER VALUE OF CANADIAN DOLLAR
Charles Joseph Clark: Mr. Speaker, the minister has declined to answer the question again. Let me try another question related to the problems being encountered with the Canadian dollar. As the minister will recall, last September the government announced the negotiation of a stand-by credit of $1.5 billion. Is it the intention of the government to draw on that stand-by credit in the foreseeable future?


Hon. Jean Chretien (Minister of Finance):: The answer is no, Mr. Speaker.


DATE OF INTRODUCTION OF BUDGET
Charles Joseph Clark: Mr. Speaker, the major problem in the country now is lack of direction on national economic policy. It is always possible that some kind of direction might come with a new budget. Can the minister tell the House, either specifically or in terms of the month, when he intends to introduce a new budget?


Joseph Jacques Jean Chrétien: Mr. Speaker, as we stimulated the Canadian economy, mostly beginning January 1, to the tune of $3 billion in tax cuts, we will have to wait to see the results of that stimulative policy before coming forward with another budget. I have stated many times that I am not planning to introduce another budget before the end of March.


Charles Joseph Clark: Just so I might be clear on this point, is the Minister of Finance now telling the House that he intends to wait a fairly long time before deciding whether he is going to introduce a budget? In other words, is he delaying setting in motion the process for preparing a budget until he has some sense of the stimulative impact of such measures as were taken last fall?


Joseph Jacques Jean Chrétien: Mr. Speaker, less than five weeks after I was named Minister of Finance I came into the House with what some called a mini-budget, some called a budget and others called an economic statement. When I say there will be no budget before the end of March, I do not think I will be short of time with regard to preparing a budget. The very diligent members of the Ministry of Finance are always working on the fiscal and monetary policies of the government.


STEPS BY GOVERNMENT TO REDUCE RATE OF INFLATION
Mr. James Gillies (Don Valley):: Mr. Speaker, I have a supplementary question for the Minister of Finance. Given the fact that the dollar is dropping in the foreign exchange markets, and every one dollar drop causes the rate of inflation to rise four-tenths of 1 per cent over two years, how does the minister plan to start getting the inflation rate in this country down, as long as the devaluation of our dollar continues?


Joseph Jacques Jean Chrétien: Mr. Speaker, we have shown what we are planning to do in that field. We had a conference last week on the fiscal, monetary and economic policies of the government. We stated our policies to the provincial governments at the ministerial meeting three weeks ago, and again last week. There was no quarrel with the economic policies of the government.


James McPhail Gillies: It must be apparent to everyone, and certainly to the Minister of Finance, that the continued devaluation of the Canadian dollar is having an enormous impact on the inflationary rate in this nation. As long as this continues, and as long as the government is not prepared to change the framework within which the value of the dollar is set in international exchanges, we will have more inflation. It makes no sense for the minister to talk about a declining inflation rate unless he is prepared to do something about the external value of the dollar. Is something going to be done about this problem, or shall we have to count on more inflation during the next six months?


Joseph Jacques Jean Chrétien: Mr. Speaker, it is very evident that the Canadian position, in terms of our competitive position and the Canadian economy, has suffered over the last three or four years. We are in a process of adjustment which is being determined at this time by the marketplace.


NORTHERN PIPELINE-CANADIAN CONTENT AND EFFECT ON CANADIAN JOBS
Mr. Edward Broadbent (Oshawa-Whitby):: Mr. Speaker, 1 have a question for the Deputy Prime Minister. The National Energy Board, in its decision today, has recommended the use of low-pressure pipe for the Alcan route. The only significant benefit to Canada in the Alcan pipeline project is jobs that may occur in this country. It is in this context I would like to ask my question.
Is the Deputy Prime Minister aware that an American government interdepartmental study estimates that approximately 30 per cent of the pipeline, with regard to durable equipment for the Canadian section, will be produced in the United States? That is not from the Wall Street Journal; it is from an American intergovernmental study. Is he aware of that? If so, how does he square it with his assurance to the people of Canada that 90 per cent of such products will be made in Canada?
February 20, 1978


Hon. Allan J. MacEachen (Deputy Prime Minister and President of the Privy Council):: Mr. Speaker, as the hon. member knows, no decision on pipe size can be made by the National Energy Board until Bill C-25 is enacted. However, in the report of the National Energy Board which I shall table at three o'clock, the board states its intention, subsequent to the enactment of the legislation, to include within its specifications for the pipeline approval of 56-inch, low-pressure pipe.
It should be borne in mind that this particular pipe size can be manufactured both in Hamilton and Regina and is not presently manufactured in any plant in the United States. That ought to be of some assistance to the hon. member in realizing that the high Canadian content which I have predicted will be possible and will be achievable, notwithstanding the interdepartmental report to which he has referred but which I have not seen. I prefer to rely on statistics given in Canada, rather than those from the United States.


John Edward Broadbent: I find it an extraordinary admission from the minister, who was in charge of negotiations for Canada, that he has not seen the report. I have a copy of it right here and would be glad to send it over to him. I repeat, Mr. Speaker, it is an American government interdepartmental study which estimates they are going to get 67 per cent, up to two-thirds, of the business-if not more-in the United States. The minister has not seen that report. I also have here the study done by our Department of Regional Economic Expansion, which reaches precisely the same conclusion as the American study.


Lincoln MacCauley Alexander: Oh!


John Edward Broadbent: The Canadian study says, on page 9:
Unless there is effective control ensuring Canadian content, 67 per cent may be a more realistic projection.
In other words, the Canadian study agrees with the findings of the American study that without guarantees the minister's promise to the Canadian people is hogwash. How does the hon. gentleman account for this?


Allan Joseph MacEachen: Mr. Speaker, there are two points one must make in reply to the hon. gentleman's question. The first is that the Department of Regional Economic Expansion developed a "worst possible" scenario. This indicated the vulnerabilities to which Canadian competition might be exposed. It seems to me it was very wise for the department to make that kind of "worst case" scenario in order that it could be avoided. The hon. member quotes from the report as saying that unless effective control or effective monitoring-


John Edward Broadbent: Control.


Allan Joseph MacEachen: All right, effective control. He says unless effective control is possible, then 67 per cent might be the worst possible result. I want to assure the hon. member that when he reads the bill presently before the House, he will realize there is a provision in the legislation giving the agency,
Oral Questions
and finally the minister, a very obvious way of maintaining effective control over Canadian content. Certainly, I would not bring a bill before the House of Commons and ask that it be passed unless there were to be effective control by the agency and the government over the Canadian content provisions.


John Edward Broadbent: My final supplementary, Mr. Speaker, is this. The minister has misinformed the House about the DREE report. The DREE report refers to the minister's estimate of 90 per cent content as being wishful thinking. It is the minister who has taken the most optimistic forecast of possibilities and has made a promise to Canadians. The DREE report, produced by his own government, said it would be more like 67 per cent, and that this was not a "doomsday" forecast; it was a more realistic projection. So the minister has quite categorically misinformed the House about what this report says.
By way of a final question to the minister, having had some discussions with leaders of the steel industry in Canada, is he aware of the fact that our steel industry is not concerned about competition from the U.S. steel industry, but is very much concerned about the Japanese steel industry which produced the pipe for Alaska, and about the Italian and German steel industries which produced the pipe for the Soviet Union?


Allan Joseph MacEachen: I find it surprising that the steel companies now find the hon. member to be the appropriate interlocutor to serve their interests. The "corporate welfare bums" have now become the "corporate welfare chums" of the hon. member.


Some hon. Members:: Hear, hear!


SOCIAL SECURITY
Joseph Adrien Henri Lambert: Mr. Speaker, my question is directed to the Minister of National Health and Welfare.
Representations were made to me by several groups following publication in a newspaper of an article according to which the New Horizons program is due to expire on March 31, 1978. I promised those organizations to put the question in the House, which I am doing now.
Will the New Horizons program continue beyond March 31, 1978? Are credits now before the Treasury Board which would ensure its application and continuation?


Hon. Monique Begin (Minister of National Health and Welfare):: Mr. Speaker, it is not easy to answer that question in view of the presence by my side of my predecessors who would never have had the bad taste of presenting cabinet with

February 20, 1978
Oral Questions
a plan providing for termination of the New Horizons program on March 31, 1978. I can therefore assure the hon. member that the New Horizons program will continue, though I must frankly point out to him that after two consecutive renewals each of eighteen months a group of senior citizens must apply for a new and different project if it wants to obtain a third grant.


Joseph Adrien Henri Lambert: Mr. Speaker, I thank the minister for her excellent answer. Now, could she tell the House whether the groups which have already received two grants are aware of what the minister has just said, which would enable them to prepare their third application and achieve their ends? By the way, I must tell the minister and her predecessor that this program is of great interest to elderly people, because I feel it is completely free from political patronage, I must say. I would like to know if these groups are aware of the procedure to follow in the third phase?


Monique Bégin: Mr. Speaker, some time ago, I met in Montreal as well as in Quebec city with all the departmental officials and we discussed in detail their animation works with senior citizens. Of course, they pursue their policy of openness and explain the rules, the procedures, the means of obtaining grants, of redefining projects so as to be eligible for grants. Here is a question which might interest the hon. member and about which I would welcome the opinion of the House: only about 25 per cent of senior citizens in Canada benefit from grants, and I feel it is my duty to take steps in order to diversify the distribution of grants and reach the people who do not succeed in forming themselves into groups. I would appreciate any suggestions in this regard.


FINANCE
Mr. Ron Huntington (Capilano):: Mr. Speaker, I have a question for the Minister of Finance. The temporary hoist, under section 17 of the Financial Administration Act, of the 30 per cent dumping duty on wide-flange steel beams gives needed and just relief to steel fabricators working on fixed-price contracts. However, as the minister must know, it does absolutely nothing to resolve the present and future injury to the economies of British Columbia and Newfoundland, and it does nothing to remove the uncertainty facing some 1,000 to 2,000 steelworkers jobs in British Columbia.
Can the minister help clear the uncertainty that clouds the B.C. scene by advising whether, in using the f.o.b. Portland price as the definition of "fair world price", that f.o.b. Portland price will be free and clear of any effect the U.S. trigger price formula might have on it for Canadian purposes?


Joseph Jacques Jean Chrétien: Mr. Speaker, we said in our statement that we have to remit a dumping duty to give relief in that field until June 29, because we have to go by the decision of the Anti-dumping Tribunal which established that this type of steel was being dumped on the Canadian market. After that date, any steel that will be coming into Canada will have to be at the international price.


Arthur Ronald Huntington: Mr. Speaker, I would ask the minister to consider the question asked. I thank him for the answer he has given. We know that the government, as a result of its decision, recognizes the very serious situation that exists in certain parts of Canada in this respect. As we all know, the final determination of duties can go on forever. Could the Minister of Finance remove the continuing uncertainty that is leading to a crisis situation in steel fabricating industries in some regions by announcing what the final dumping duty will be? In other words, will it be nominal, at 3 per cent, for example, or will it close the lid on regional steel fabricating industries by remaining at 30 per cent?


Joseph Jacques Jean Chrétien: Mr. Speaker, if the steel is not dumped, there will be no special duty applied; it will be just the normal duty.


Arthur Ronald Huntington: Mr. Speaker, in the absence of the Minister of Industry, Trade and Commerce, I would like to direct this question to the right hon. Prime Minister. The heart of much of the regional antagonism caused by federal rulings on matters like the dumping duty on wide-flange steel beams seems to be in our failure to recognize that often more than one market can exist in a country as vast as Canada.
Can the minister, or the Prime Minister, advise whether the government is negotiating an amendment under article 4(A) (ii) of the GATT agreement to reflect the fact that transportation costs and other regional marketing factors may create in Canada two or more markets, where in at least one Canadian producers sell none or almost none of their goods?


Joseph Jacques Jean Chrétien: Mr. Speaker, I would like the Acting Minister of Industry, Trade and Commerce to answer that question. I have replied already to it. We have recognized that there is a short-term problem in British Columbia. Of course, when we have one Canadian market we have to maintain a tariff and have an adjudication by the tribunal when it looks into a dumping case-whether it be steel or any other product- because we cannot accept dumping of products on the Canadian market. I am sure the hon. member would not be pleased if we did not protect, in the eastern market, the price of plywood that very often comes from B.C.


INTENTION OF GOVERNMENT TO REVIEW ANTI-DUMPING TAX
Mr. F. Oberle (Prince George-Peace River):: Mr. Speaker, following the answer to the question of the hon. member for Capilano, I would ask the Minister of Finance whether it is the intention of the government to review the imposition of this import tax as it affects the steel industry, and whether such review will be carried out against the background of the
February 20, 1978

realities of our country, namely, that there are legitimate interests in both eastern and western Canada in the steel industry? Also, will these interests be protected against the central domination of the industry?


Joseph Jacques Jean Chrétien: Mr. Speaker, the government had nothing to do with the imposition of that duty. It was as the result of a decision by the tribunal set up by this parliament. It made the decision that steel coming into the western ports was dumped. We welcome steel from any country in the world, as long as the price at which it is offered to Canadians is the price at which it has been offered in international markets. Of course, B.C. producers will always have access to international steel as long as it is not dumped on the Canadian market.


NORTHERN AFFAIRS
Mr. Erik Nielsen (Yukon):: Mr. Speaker, I have a question for the President of the Privy Council concerning the attention that the national media is now giving the matter, an indication that the government's concern is serious in respect of the controversy swirling around the heads of senior officials of the Department of Indian Affairs and Northern Development in the Yukon.
Since these controversies involve the minister's officials not only in matters concerning interference with the judicial process, but with the current RCMP investigation into allegations of forgery and the swearing of false affidavits-both indictable offences-regarding the alleged involvement of the minister's commissioner in the Yukon and Senator Lucier of the other place, is the minister at least considering requesting, or having his colleague request the commissioner to relinquish his position on a temporary basis until these matters-that is, the Stratton inquiry and the RCMP investigation-are concluded; and bringing back ex-commissioner James Smith on an interim basis in order to restore public confidence in the government and revitalize the very urgent planning required for the pipeline project?


Allan Joseph MacEachen: Mr. Speaker, these matters are within the jurisdiction of the Minister of Indian Affairs and Northern Development and I will draw them to his attention.


An hon. Member:: That's a great help.


Erik Nielsen: Mr. Speaker, because I am sure the government is concerned that these matters will cause delay in the pipeline project which could very well prove fatal to its viability, and having regard to the very serious responsibility of the minister and the government to ensure that the pipeline project, so vital to the national interest, is not allowed to fail by their own failure to recognize the seriousness of these
Oral Questions
events in the Yukon and the extent to which vital planning and preparation for the pipeline is being imperilled by the credibility cloud that is hanging over the present administration in the Yukon, can the minister or the Minister of Justice inform the House whether any positive action is being taken to bring these matters to a head, that is, the investigation and possibility of charges being laid under the Criminal Code? It is necessary to clean house as quickly as possible to restore confidence there.


Allan Joseph MacEachen: Mr. Speaker, we have undertaken, with the government of the United States and, indeed, with the House of Commons, that we will do everything possible to ensure the construction and operation of this pipeline within the time-frame that is proposed. That objective will apply to all the activities of the government of Canada.


Erik Nielsen: One short, final supplementary question, Mr. Speaker. In view of the fact that the Stratton inquiry has been adjourned from time to time and its official report probably will not be in until some time in April-perhaps late April which is beyond the tolerance time, as I understand it, which the construction industry is conveniently prepared to accept- will the government immediately look into these matters with a view to finding a solution such as the one I have suggested, temporarily suspending the commissioner, without any admission of guilt or whatever, much along the same lines as the McMurtry example during the Hamilton harbour episode, and bringing in the credible ex-commissioner to put things back on the road and allow the proper and urgent planning to be done now?


Allan Joseph MacEachen: Mr. Speaker, without prejudging the decision that might be taken by my colleague, it would seem to me that the suspension of an official, anywhere, while his conduct is under examination might not be a very fair or wise thing to do. I will certainly refer the hon. member's question to the minister for final judgment.


POST OFFICE
Mr. Arnold Malone (Battle River):: Mr. Speaker, my question is directed to the Postmaster General. I ask him to confirm or deny rumours apparently circulating through weekly newspaper associations that he intends to remove the free mailing service for weekly newspapers within a 20-mile radius of their publication.


Hon. J. Gilles Lamontagne (Postmaster General):: Mr. Speaker, I am not aware of such a decision having been made, and I do think such rumours are unfounded, but I will inquire into this matter and give a relevant answer.

February 20, 1978
Oral Questions


Arnold John Malone: Mr. Speaker, I would suggest, by way of a supplementary question to the minister, that he might give us the assurance that no change is about to be made, since it is widely believed at the present time among weekly newspaper associations that this is the case, and since the weekly postage for some of the smaller weekly newspapers will increase from $12 to $260.


Mr. Lamontagne:: Mr. Speaker, 1 strongly doubt such a conclusion will be reached, leading to such a high raise, but again I will inquire to find out if those rumours, as the hon. member so aptly put it, are founded or not.


CONSUMER AFFAIRS
Mr. Dean Whiteway (Selkirk):: Mr. Speaker, in the absence of the Minister of Fisheries and the Environment, I should like to direct my question to the Minister of Consumer and Corporate Affairs. It concerns the Freshwater Fish Marketing Corporation and stories appearing in the Winnipeg press regarding activities of the corporation in changing labels, the destruction of tens of thousands of pounds of fish, and fish being returned by government inspectors with freezer burn due to four and five years of storage. Can the minister tell the House what his investigations have found and what action he has taken?


Hon. Warren Allmand (Minister of Consumer and Corporate Affairs):: Mr. Speaker, this is the first time this matter has been brought to my attention. I will be pleased to look into it and report to the hon. member.


REQUEST FOR IMMEDIATE INVESTIGATION
Dean Waldon Whiteway: Mr. Speaker, my supplementary question is directed to the right hon. Prime Minister. In view of the fact this is not the first time the matter has been raised in the House, nor is it the first time the matter has been raised with the Minister of Fisheries and the Environment, would the Prime Minister undertake to consult with the Minister of Fisheries and the Environment and ask for an immediate investigation into the financial practices and marketing procedures of the Freshwater Fish Marketing Corporation?


Right Hon. P. E. Trudeau (Prime Minister):: Mr. Speaker, I heard the minister deal with this question last week: my recollection is that he gave the hon. member a very satisfactory answer. When he returns, I will remind him that the hon. member has asked the question again.
[Mr. Lamontagne.)


SALE OF PRODUCTS BEARING RABBINICAL SEAL
Mr. Jake Epp (Provencher):: Mr. Speaker. I have a supplementary question for the Minister of Consumer and Corporate Affairs. In his investigation of the Freshwater Fish Marketing Corporation, would he not only investigate the changing of labels to make the product appear to have an age other than it actually had, but indicate to the House if the products, which were to be sold with a rabbinical seal, in fact received that seal without the proper authority and without a rabbi being present?


William Warren Allmand: Mr. Speaker, I will obtain information on that matter as well.


CRIMINAL CODE
Mr. Jean-Robert Gauthier (Ottawa-Vanier):: Mr. Speaker, my question is directed to the Minister of Justice. Last Friday the right hon. Prime Minister told the House that consultations with the provinces to amend the Criminal Code to allow all Canadians the freedom of choice of language in the courts would be tabled soon. Can the Minister of Justice tell us when he intends to table this bill?


Hon. Ron Basford (Minister of Justice):: Mr. Speaker, I read the Prime Minister's answer and I agree with it. We cannot specify a precise date the legislation will be introduced, because it is being drafted and is subject to further discussion in cabinet as to the precise language. I hope it will be introduced soon.


NATIONAL UNITY
Mr. Allan Lawrence (Northumberland-Durham):: Mr. Speaker, my question is for the right hon. Prime Minister. Can he tell us how soon, or even when, an Ontario replacement will be made on the Robarts-Pepin task force on national unity to replace John Evans, Q.C.?


Pierre Elliott Trudeau: Mr. Speaker, I have not been notified formally by Mr. Pepin and Mr. Robarts that they have accepted the resignation of Mr. Evans. If they seek a replacement, I will gladly oblige them.


Allan Frederick Lawrence: Mr. Speaker, will the Prime Minister be good enough to confirm or deny the ugly rumours which are circulating that because he was promised a position in order to move him out of the House, the new replacement will be Mr. Joe Flynn?
February 20, 1978


Pierre Elliott Trudeau: Mr. Speaker, I think Mr. Flynn would be immensely more capable than the hon. member who asks the question.


POST OFFICE
Mr. Eldon M. Woolliams (Calgary North):: Mr. Speaker, I should like to ask the Postmaster General a question. There is some question about postmen in Calgary being fired because they have delivered mail too early. With the service we are receiving from that department, either deliveries are delayed or they never take place. Why are postmen in Calgary being faced with this situation?


J. Gilles Lamontagne: Mr. Speaker, I think the answer is quite simple. The reason for the dismissals, or at least the suspensions, is not that the mail was delivered prematurely but simply that the employees had not obeyed their supervisors' instructions.


Eldon Mattison Woolliams: Mr. Speaker, do 1 take it from the Postmaster General's answer that it is now a crime, or a sin in his department to deliver mail on time or too early? Is that the policy? Everyone in Canada is complaining about no delivery at all, or late delivery.


Lincoln MacCauley Alexander: Or they throw the mail on the street.


Maurice Lamontagne: Mr. Speaker, it would be very easy for me as Postmaster General, with Treasury Board, to settle all the problems in the Post Office in five minutes.


Some hon. Members:: Go ahead.


Maurice Lamontagne: But that would mean a complete sell-out of all the conditions asked for by the unions and it would be a policy of administering the Post Office at any cost. I do not think this is what Canadians want. I am not that kind of administrator, nor is the present government.


Some hon. Members:: Hear, hear!


GLACE BAY, N.S.-SUGGESTED DISCRIMINATION IN AECL PAYMENTS IN LIEU OF TAXES
Mr. Andy Hogan (Cape Breton-East Richmond):: Mr. Speaker, my question is directed to the minister in charge of Atomic Energy of Canada Limited, to whom I have given notice. At the outset, I wish to express my happiness at the $17 million expenditure which will be made to upgrade the heavy
Oral Questions
water plant at Glace Bay. According to a statement made by the mayor of Glace Bay, the town of Glace Bay is being discriminated against by payments in lieu of taxes from Atomic Energy of Canada, when compared with communities in Ontario, such as Deep River, and in Manitoba, such as Pinawa. Will the minister please explain why this discrimination against Glace Bay is being carried out by this federal Crown agency?


Hon. Alastair Gillespie (Minister of Energy, Mines and Resources):: Mr. Speaker, there is no discrimination. As the hon. member perhaps knows, there is nothing in law which requires the Crown corporation to pay municipal taxes, but grants are made in lieu of taxes. Normally, with a corporation of that kind, taxes would be payable when the corporation was viable. As the hon. member knows, the government of Canada acquired ownership of the corporation some years ago and set about the stripping down and rebuilding program. That is well advanced now, but is not yet complete. Thus, it is quite clear the corporation is not yet viable. I am happy to say, however, that negotiations have taken place with the municipality and with the government of Nova Scotia. I believe a solution has been worked out whereby there will be an increase in the municipal taxes paid by AECL.


Andrew Hogan: Mr. Speaker, I agree that renegotiations have taken place, but according to the statement of the mayor of Glace Bay it has been far from satisfactory because it is not retroactive from the 1972 to 1977 period. If a Crown corporation is not making money in a particular area, is it normal that that affects the payment in lieu of taxes, as the hon. minister has indicated is the reason for the discrimination against Glace Bay? Is that normal across this country?


Alastair William Gillespie: Mr. Speaker, as I made very clear in my opening statement, there was no discrimination in this instance. I pointed out to the hon. member that the corporation was not viable when the government of Canada took it over and started the rebuilding process. During that period of time, municipal grants were paid in lieu of municipal taxes. Those grants have now been increased in size.


FINANCE
Mr. J. R. Ellis (Hastings):: Mr. Speaker, my question is for the Minister of Finance. The minister's predecessor, together with myself, processors and producers in the tomato industry, arranged last year to have a three-cent tariff on Taiwanese tomatoes. Now that the processors and producers are planning for this year's crop, can the minister tell us if he intends to have the tariff increased from three cents to five cents, or perhaps even to four cents? Second, will the tariff be extended beyond the August 10 deadline, which would come much too soon to allow this crop to be handled properly?

February 20, 1978
Oral Questions


Joseph Jacques Jean Chrétien: Mr. Speaker, I will have to inquire, I do not have the information at this time. I do not know if the rates will have to be changed. I would ask the hon. member to wait. I could give him an answer in a few days.


CANADA-U.S. STUDY ON STRATEGIC OIL STORAGE-USE OF CANADIAN SITES
Mr. Janies A. McGrath (St. John's East):: Mr. Speaker, I have a question for the Minister of Energy, Mines and Resources. Can the minister give the House an assurance that the recently announced joint study by Canada and the United States on strategic oil storage in Canada will not, in fact, virtually eliminate consideration of a decision to use one of at least two sites in Canada, including Bell Island, Newfoundland, for phase two of the U.S. strategic oil storage program, and even for phase three?


Alastair William Gillespie: Mr. Speaker, I can give the hon. member that assurance. The joint study which has been undertaken by the federal government and the United States government will establish the need for such a facility. That study has to take place in any event. In all likelihood, the study will also bring forward the time when such a facility can be used.


James Aloysius McGrath: Has any decision been made with regard to Canadian participation and Canada's having access to these strategic oil storage facilities for emergency purposes; and is this a factor in the delay of this feasibility study?


Alastair William Gillespie: Mr. Speaker, again I would like to emphasize that there is no delay involved. The process has been accelerated through the agreement between the two governments to enter into the joint study assessing the feasibility of the two sites. The study will also address itself to the question of the proportion of the total that might be made available to Canada, and under what conditions.


FINANCE
Otto John Jelinek: Mr. Speaker, I have just one clear question for the Minister of Finance, and I hope his answer will be just as clear. Can the minister advise the House whether he is content with the alarming devaluation of the Canadian dollar? If not, what steps does he intend to take to reverse this dangerous trend? If he is content-as he appears to be-what reasons can he give for
[Mr. Ellis.)
not resigning and allowing a responsible minister who is concerned about the matter to take some action in this regard?


Joseph Jacques Jean Chrétien: Mr. Speaker, I am following the situation very closely. I have stated the policy of the government many times and I have nothing to add at this moment.


AIR TRANSPORT
Mr. Jack Murta (Lisgar):: Mr. Speaker, I would like to direct a question to the Prime Minister. As the Prime Minister probably knows, Suntours Limited of Toronto is seeking to provide passenger air service for most major Canadian cities at charter prices lower than anything now available. The company wants to take its proposal to the Canadian Transport Commission. Since the plan seems sensible, and since it is certainly long overdue to have Canadians travelling in their country at fares which are as equitable or as cheap as fares outside the country, will the proposal which Suntours will be putting to the CTC receive full government support?


Pierre Elliott Trudeau: Mr. Speaker, 1 am sure the hon. member would not want me, as a member of the government, to interfere with a quasi-judicial body like the Canadian Transport Commission. The proper course established for that, under our guidelines, is that if communication is to be made with a quasi-judicial body, it should be made by the minister responsible for that body. I therefore assure the hon. member that the Minister of Transport, who is presently meeting with the Canadian Wheat Board in the west, will consider this representation.


Jack Burnett Murta: Mr. Speaker, the Prime Minister undoubtedly knows that the CTC in the past has been an arm or an extension of the cabinet. Since the cabinet has exercised authority over the CTC in the past, will the Prime Minister assure the House, because this particular plan is attractive and sensible with regard to travelling in Canada, that the government will consider this kind of action on behalf of the Canadian travelling public?


Pierre Elliott Trudeau: Mr. Speaker, the hon. member knows, or should know, that the government has taken many steps to permit Canadians to visit each other and to know their country better. We took such a step about a month ago with reference to a decision referred to us by the Canadian Transport Commission. But I repeat that there is a procedure for this type of government position becoming known by the CTC, and that is through a representation by the Minister of Transport.
February 20, 1978


FINANCE
Mr. Stan Darling (Parry Sound-Muskoka):: Mr. Speaker, my question is directed to the Minister of Finance. Will the minister ask the government to take specific steps to reverse the industrializing process by adopting a program of some federal sales tax reductions at this time, or in the immediate future?


Joseph Jacques Jean Chrétien: Mr. Speaker, I have discussed with my provincial colleagues the possibility of cutting sales taxes, but we felt it most effective to cut provincial sales taxes. I made an offer to the provincial ministers of finance but they were not in agreement, so we decided to choose another route. In January and February we are cutting the income taxes of 7 million taxpayers by $700 million. I am afraid that cuts in the federal sales tax are not necessarily felt by the consumer, because the consumer does not pay the tax directly and would not feel the effect of such a cut.


SOCIAL SECURITY
Mr. Allan B. McKinnon (Victoria):: 
Allan Bruce McKinnon: Mr. Speaker, three months ago, with considerable fanfare, the Prime Minister signed an agreement with the Italian prime minister to extend reciprocity of social security benefits between Italy and this country. Will the minister tell the House how soon reciprocity of pensions between Italy and Canada will be in effect, or is this another of those ill-fated promises which Liberals tend to make in Toronto just before elections?
Oral Questions


Monique Bégin: Mr. Speaker, in my opinion the second part of the question is absolutely needless. We signed an agreement, on November 19 last I believe, with Prime Minister Andreotti, and our officials have already had their first meeting to discuss technicalities, because administrative agreements between the provinces, the federal government and the Italian government on each of the systems must be described in a detailed manner.


ADMINISTRATION OF JUSTICE
Mr. Stuart Leggatt (New Westminster):: Mr. Speaker, my question is directed to the Minister of Justice. It concerns the provisions of the mail-opening bill. Can the minister advise the House why in that legislation there is provision for reporting to the House in cases where the Narcotic Control Act and the Food and Drugs Act are involved, but in the case of the Official Secrets Act there is no requirement for the Solicitor General to report to the House the number of mail openings which take place? Can the Minister of Justice advise why there is this discrepancy in the bill, and why it is required that there will be reporting in one instance and not in another?


Stanley Ronald Basford: Mr. Speaker, I should like to examine the provisions of the bill very carefully, because it was our intention that the scheme now set out in the Criminal Code should apply mutatis mutandis to the measure that is now before parliament. I should like to examine the specific wording very carefully, before answering.


THE CANADIAN ECONOMY
Mr. Gordon Ritchie (Dauphin):: Mr. Speaker, my question is for the Minister of Finance. As part of the government's strategy, the minister's department has forecast modest growth in the Canadian economy being dependent upon strong exports, particularly to the United States, and as the United States economy now seems headed for a recession, what effect will this have on these forecasts? Will they still be valid? Or did the forecast take into account the possibility of a growth of recession in the United States.
[ Translation]


Joseph Jacques Jean Chrétien: Mr. Speaker, there is no reason at this time to change the predictions we made on the performance of the Canadian economy.

February 20, 1978
Resources and Technical Surveys Act



ROUTINE PROCEEDINGS


Allan Joseph MacEachen: Mr. Speaker, I should like to table, in both English and French, the statement of position regarding the selection of pipe for the Whitehorse, Yukon, to Caroline, Alberta, segment of the Foothills pipeline system submitted by the National Energy Board.


IMMIGRATION
Hon. Bud Cullen (Minister of Employment and Immigration):: Mr. Speaker, pursuant to Standing Order 41(2) I should like to table, in both official languages, the immigration agreement entered into between Canada and the province of Quebec and Canada and the province of Nova Scotia.


RESOURCES AND TECHNICAL SURVEYS ACT
Mr. Eymard Corbin (Madawaska-Victoria) moved: for leave to introduce Bill C-421, to amend the Resources and Technical Surveys Act (map quality control).


Some hon. Members:: Explain.


Eymard G. Corbin: Mr. Speaker, this bill is aimed at standardizing the quality control of the maps which are published on behalf of the government of Canada. This way it would be possible to avoid embarrassing errors or omissions, such as the transfer of half Madawaska to the Republic of the United States as a result of badly traced border lines, as well as the mysterious disappearance of Magdalen Islands from the waters of the Gulf of St. Lawrence. The bill would also do away with artistic licence in cartography.


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

[Stage Direction]
(Questions answered orally are indicated by an asterisk.)
Mr. Roger Young (Parliamentary Secretary to Minister of Justice):: Mr. Speaker, the following questions will be answered today: Nos. 1,109 and 1,132.


Mr. Rodriguez: 1.	For the last three months of 1977, how many times were private rail cars used by Cabinet Ministers?
2.	In each case, what was the date, the minister involved, the cost involved and the reason for the private rail car being used instead of some other form of transportation?


Hon. Otto E. Lang (Minister of Transport):: See response to question No. 11, page 459 of Hansard of October 26, 1976.


Mr. Rodriguez: For each Fiscal year since 1970, what amount was spent in the Constituency of Nickel Belt by the Department of National Revenue and those agencies that report to it?


J. Gilles Lamontagne: Mr. information requested is not readily available; our expenditure report systems are not designed to provide the information by constituencies but rather on a postal district basis for management purposes.

[ Translation]


Roger Carl Young: Mr. Speaker, if questions Nos. 32 and 475 could be made orders for returns those returns would be tabled immediately.


Mr. Speaker:: The questions listed by the parliamentary secretary have been answered. Is it the pleasure of the House that questions Nos. 32 and 475 be deemed to have been made orders for return?


Some hon. Members:: Agreed.
[ Text]


Mr. Cossitt: 1.	Are there presently any vacancies existing in county court judgeships and, if so (a) how many (b) is it the intention of the government to fill these positions with known supporters of the Liberal Party and, if so, for what reason?
2.	(a) How many county court judges have been appointed by the government in each of the past three years (b) what are their names and the counties and provinces involved (c) to the knowledge of the government, how many were known supporters of the Liberal Party?
3.	Is the government appointing county court judges on the basis of political affiliation and, if so, is it prepared to change this system to one which will have
February 20, 1978

judges appointed strictly on the basis of judicial ability with no consideration to political services rendered?
Return tabled.


Mr. Elzinga: 1.	Under the Official Minority Group Programme of the Department of the Secretary of State, what was the total amount of funds granted, by province and territory in (a) 1973 (b) 1974 (c) 1975 (d) 1976?
2.	By province and territory, what (a) were the names and addresses of the organizations who received such grants and what was the amount in each case (b) was the specific reason for each such grant in (i) 1973 (ii) 1974 (iii) 1975 (iv) 1976?
Return tabled.


Mr. Speaker:: Shall the remaining questions be allowed to stand?


Some hon. Members:: Agreed.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed, from Wednesday, February 15, consideration of the motion of Mr. MacEachen that Bill C-25, to establish the Northern Pipeline Agency, to facilitate the planning and construction of a pipeline for the transmission of natural gas from Alaska and northern Canada and to give effect to an agreement between Canada and the United States of America on principles applicable to such a pipeline and to amend certain Acts in relation thereto, be read the second time and referred to a special committee on a northern gas pipeline.
Mr. Donald W. Munro (Esquimalt-Saanich):: Mr. Speaker, before resuming my comments on this bill I should like to thank the minister and his officials for providing me with the guidelines which had not been distributed-and I underline they had not been distributed-prior to the beginning of this debate though, according to the date I have here they were issued in December, 1977. They ought to have been available to all members participating in the debate, but I found them on my desk when I returned to my office after speaking last Wednesday. It is a deferred acknowledgment and I am sorry it had to be this way, but we now have the guidelines and I think they are very important.
When I called it six o'clock on Wednesday evening I had reached the point of examining the provisions of the bill that will permit more extensive inquiries into the environmental impacts that are likely to occur and the inquiries that will be carried on under the provisions of the bill that were mentioned
Northern Pipeline
either in the Lysyk inquiry or in the environmental assessment and review panel study.
I think it ought to be mentioned as a general comment about the Alaska Highway part of the pipeline that there has been reference to the need to take permafrost into account. Those who have not been in the Yukon may not be aware that the permafrost problem does not apply all the way along the Alaska Highway. It is the Dempster cut-off that would have the problems of permafrost.
I think it should be said, however, that perhaps partly because of the short time available to Dean Lysyk to prepare his report, he devoted little space to the environmental problems likely to arise, whereas the Berger inquiry, which had more time at its disposal, covered environmental problems more fully. The other reason the Lysyk inquiry did not deal with environmental issues was that its terms of reference provided for representation from the environmental assessment and review panel which allowed those elements to be taken into account. It may have been that Dean Lysyk felt that the strictly environmental problems could be left to be dealt with by the panel.
I feel it is necessary to point out that one of the principal differences between the Lysyk and the Berger inquiries is that the Berger inquiry covered all aspects of the matter, while there is no reference whatsoever in the Lysyk inquiry, or by the panel, to British Columbia or Alberta. The Lysyk report dealt solely with the Yukon. I think this oversight will have to be taken into account. Fortunately, a clause in Schedule III of the bill requires that the pipeline company carry out the necessary studies into fisheries, environmental and socio-economic problems.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


Alastair William Gillespie: Mr. Speaker, I welcome the opportunity to take part in this historic debate dealing with one of the largest undertakings ever addressed by a group from the private sector. In many ways I think it is not only an historic debate but an historic project in the development of our country-to link the third sea, the Arctic Sea, to the Atlantic Ocean; indeed, perhaps of linking the Arctic Sea to the Atlantic Ocean. I will have more to say about that in my remarks to follow.
In the time available to me I shall attempt to deal with three areas, first of all the size of the pipe, secondly the need for Canada to gain access to Canadian natural gas resources in the Mackenzie Delta area, and thirdly I will talk about the attractiveness of the option which has been opened up for
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February 20, 1978
Northern Pipeline
Canada as a result of the pipeline treaty negotiated with the United States.
The President of Privy Council (Mr. MacEachen) has already tabled the report of the National Energy Board dealing with the question of what should be the appropriate size of pipe for the section of the line from Whitehorse to Caroline. There may have been some surprise that the stated position of the National Energy Board came down in favour of the 56-inch option rather than the one which has received a good deal of attention in the press, that is to say, the 54-inch option and the option included in the pipeline treaty with the United States.
I would like to take a few moments to deal with the question of the 56-inch pipe. Its origin comes from the initiative of United States officials during the December meeting of the technical committee which addressed itself to these questions. At that time the suggestion was made that a 56-inch pipe at 1,080 psi should be considered as an alternative to the 54-inch pipe at 1,120 psi because there was more world experience in manufacturing and installing 56-inch diameter pipe than in the 54-inch diameter pipe. While at the time Canada and United States negotiations were continuing, 54-inch diameter pipe had been shown as the appropriate larger diameter pipe for consideration, Foothills agreed that it would have been just as logical to have selected the 56-inch diameter pipe in relation to the 3.6 billion cubic feet a day of gas anticipated as the throughput.
The United States response included the consideration of the use of 56-inch diameter pipe as one alternative. This has been taken into account in the Board's analysis. I understand that it was concluded in the U.S. reply that any of the systems under consideration, high pressure or low pressure, could be built and operated with equal safety and reliability. It is the view of the National Energy Board, however, that selection of the 48-inch high pressure system, because of the extensive new technology involved and the lack of experience in its use, would present risks.
The Board states in its report that safety and reliability are matters of primary concern to it. There has been a good record in the Canadian pipeline industry in this regard. Also there has been steady improvement in standards related to quality of steel, manufacturing procedures, pipe welding and other construction procedures.
The Board believes that moving from the general operating pressure of 1,000 psi, which is the present practice in North America, to that proposed of the 48-inch 1,680 psi system represents a large step in new technology. The Board would require thorough testing of the 48-inch 0.72 inch wall thickness before approving that design. Foothills has estimated there could be a delay of up to two years in completion of the pipeline in order to carry out such testing before ordering the pipe. This would not be in the interests of the United States or of Canada. On the other hand the board is prepared to approve the use of .54 inch wall thickness pipe of the specifications proposed by Foothills, in 48-inch, 54-inch or 56-inch diameter pipe subject only to confirmatory burst testing prior to com-

mencement of construction. From a design point of view this means there would be no delay in ordering pipe and that planning for all other aspects of the pipeline construction could proceed.
As has been pointed out on many occasions in the House, Mr. Speaker, another important feature in the selection of the .54 inch wall thickness pipe is the fact that two Canadian pipe mills could supply pipe of the quality required and in diameters up to 56 inches. In the case of the heavier wall pipe only one Canadian mill has the manufacturing capabilities, thus reducing reliability and possibly affecting Canadian content. The Board has concluded that from a safety and reliability point of view the final choice of pipe to the pressure range achievable with .54 inch wall thickness, that is to say the 48-inch diameter pipe, the 56-inch diameter pipe and 54-inch diameter pipe should be chosen on the basis of economics. I should add that the 48-inch low pressure pipe should not be considered an option because the pipeline itself, that is the Dempster connection, will be needed before 1990.
The United States response indicated, as I have already stated, that based on the design volumes of 2.4 billion cubic feet a day from Prudhoe Bay, and 1.2 billion cubic feet a day from the Mackenzie Delta, its first choice would be the 48-inch high pressure pipe with its second choice being the 56-inch 1,080 psi pipe.
With respect to the choice of pipe, mention should be made here of paragraph 10 in the Canada-United States Agreement. This particular provision allowed for consideration of any combination of pressure and diameter of pipe which would achieve safety and reliability and economic efficiency. Annex III to the Agreement relating to cost allocation contained cost estimates for 48-inch and 54-inch diameter pipe. If 56-inch diameter pipe was chosen it would require an addendum to Annex III to include costs for the 56-inch alternative which had been agreed on by the two parties to the Agreement. It is the understanding of the government that such an addendum would be considered a technical change. This could be accomplished by an exchange of notes following a meeting of Canadian and United States officials to agree upon the appropriate figures to include in the annex. Inasmuch as the Canada-United States Agreement is contained in Bill C-25 as Schedule I, a corresponding amendment would be required in the bill as well. This could be introduced when the bill is considered by the committee.
As was pointed out to the House, Mr. Speaker, on February 13, no decision could be made by the National Energy Board regarding pipe size until Bill C-25 is enacted. However, in its report the board has indicated that subsequent to enactment it intends to include in its approval of pipeline specifications the 56-inch 0.54 inch wall thickness pipe for that portion of the pipeline between Whitehorse and Caroline. That could provide significant economic benefits to the United States in the order of close to $100 million based on the assumption over 20 years with the choice of 56-inch pipe over 54-inch. Taking the value of the gas at $1.60 mef and assuming an additional throughput
February 20, 1978

of 65 billion cubic feet, there would be a saving to the United States consumer of roughly $100 million.
There would be a comparable saving to the Canadian consumer, again assuming the same time period, but assuming that the gas is not made available until five years later than it becomes available in the United States, using the same figure per 1,000 cubic feet and an additional throughput of 25 billion feet, a saving of $40 million. In summary, economics favour the 56-inch over the 54-inch diameter pipe, with potential savings collectively of $140 million.
I would now like to move to the part of my remarks dealing with the questions of, first, the need for the pipeline and of access and, second, the full question of cost and benefits to Canadians. There have been a number of suggestions to the effect that the Alaska Highway pipeline will do nothing for the Canadian energy situation, that it is designed solely for the United States. It has also been suggested that Canada has no need for the frontier gas, that we already have enough gas in Alberta. I believe that both of those statements are false. I wish to review some of the reasons for believing that to be so.
The bill before the House is designed to give effect to the Canada-United States Agreement. I am sure hon. members are aware this agreement was reached after many, many hours of negotiation with our neighbours to the south. One of the most important issues in those negotiations, perhaps the one most difficult to resolve, was the terms under which Mackenzie Delta gas would be connected into the Alaska Highway pipeline system. The problem is that Canadian gas from the Mackenzie would be expensive. For example, it would be more expensive than gas which is available in the southern basin, although less expensive than gas from the High Arctic and some other alternate energy sources in Canada.
The objective of the Canadian negotiators was to ensure that Canada could obtain access to Delta gas at costs that were not prohibitively high. The Canadian team was able to strike a very good bargain for us in this regard.
The present bill assures Canada the cheapest possible access to our own Delta reserves. It provides that U.S.A. consumers will pay the full cost of shipping the Canadian gas from Dawson to Whitehorse if the Canadian section of the line through the Yukon comes within 35 per cent of the estimated cost of that line and will pay not less than two thirds of the total cost of building that spur from Whitehorse to Dawson if the escalation is greater than the amount 1 just mentioned. The exact share will depend on the final cost of the completed pipeline. In any event, Canadians will be able to get Mackenzie gas in Canadian markets transported from the Mackenzie Delta to southern gas markets at a lower cost than Americans would be able to get American Alaska gas transported from Prudhoe Bay to their markets. That is clearly a significant benefit to Canada.
The existence of the Alcan pipeline, the Foothills (Yukon) pipeline, is the only way at the present time of ensuring access to presently proven reserves in the Delta. These reserves will
Northern Pipeline
provide a significant addition to Canada's proven accessible reserves, but they are simply not large enough to justify a Canadian pipeline at the present time.
My first point then is that this legislation assures Canadians of access to our own Delta gas. Without the pipeline, there is no such assurance. It also assures us we will get that gas at a lower cost than the Americans will get their Alaska gas in the United States. It assures us the lowest possible cost. These benefits clearly are not insignificant. Hon. members who suggest this pipeline does nothing for Canada's energy needs are simply misrepresenting the facts.
I now wish to turn to my second point. Many people are saying that access to gas in the Mackenzie is of dubious value, that we have as much as we possibly need in Alberta and this will look after us until at least the 1990's. There are a number of basic flaws in that argument. There are three basic flaws I want to attack.
The first flaw is that that argument confuses short-term deliverability surplus with long-term reserve availability. Second, that argument ignores the large extent to which natural gas could reduce our reliance on imported oil, is assured long-term supplies of gas were not available. This is a very important point. The third flaw in that argument is that it ignores, by implication, the gravity of the world oil supply problem. I will deal very briefly with the latter point first, the gravity of the world oil supply problem.
A few statistics might place this problem in context because Canada is very much involved in the international oil context. The western world is now consuming about 50 million barrels of oil every day, about 18 billion barrels in the course of the year. Second, the largest oil accumulation ever discovered in North America, that is to say at Prudhoe Bay, ten billion barrels of oil, works out to not much more than six months' supply in terms of the world's consumption at current consumption rates.
The North Sea accumulation was roughly 23 billion barrels. In terms of world supply at current consumption rates, this would add another year and a half. Taking these two very significant discoveries together, they add no more than two years to world supplies at current consumption rates.
All discoveries in the last 15 years, those in North Africa, West Africa, the North Slope, and the North Sea, amount to about 100 billion barrels. That is no more than six years' supply at current consumption rates. Perhaps I have said enough to indicate the horrendous dimension of the oil supply problem in the western world.
More often than not, we are using more oil than we are discovering. More often than not, at the end of the year there is less oil available than there was at the beginning of the year. At the same time, at the end of the year we are consuming more than we were at the beginning of the year. Quite clearly this will lead the western world to an oil crunch, and that crunch may not be far away. Estimates indicate it could occur about 1985, give or take a year or two.
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February20, 1978
Northern Pipeline
Also, new oil discoveries are proving more expensive. Accumulations are smaller. Canada is no exception to this general rule. Current projections indicate a continuing decline in production from conventional sources over the next ten years, which means increasing reliance on costly unconventional sources such as the tar sands. All this has to be seen against the background of the western world's massive consumption of oil, its apparent inability to decrease its demand, and the reluctance of oil-rich countries in Arabia to increase supplies.
This situation leads inexorably to one conclusion: our dependence upon oil supplies from the Middle East must be reduced. I need hardly remind hon. members of the instability of the area-the tragic events in Cyprus over the week end are, in themselves, an illustration. Take the situation affecting the Horn of Africa, a confrontation between two nations on the edge of the Red Sea right opposite Saudi Arabia. This is yet another reminder of the vulnerability of oil supplies from the Middle East. Saudi Arabia is presently pumping about nine million barrels of oil a day. The best estimate 1 have seen is that it would be required to produce between nine million and 16 million bairels by 1985. Then there is a big jump from 1985 to 1990, a jump which could take the requirement to 23 million or even to 35 million barrels a day.
On the basis of nine million barrels a day, Saudi Arabia is presently generating something like $50 billion a year in foreign exchange. Figures like these stretch the imagination and there is no point spending much time on them except to make the fairly obvious comment: why would a small country of some six million people, which cannot even use the foreign exchange it is generating from oil sales today, want to increase its production significantly in the future? Why would not the leaders of that small country say to themselves, "We would much prefer to keep this important resource in the ground, under our own control rather than exchange it for bank accounts in foreign banks which we do not control." Much of the current debate on the world oil situation focuses on questions of this kind.
Will Saudi Arabia produce at the levels required to meet rising international oil demand? Quite simply, we do not know. But I do not believe Canada and the rest of the western world can afford to take a chance. We have to look to ourselves in order to protect our interests. We have done this collectively through the International Energy Agency and we have set an import target of no more than 26 million barrels a day by 1985. Canada has participated in agreeing to this collective target.
We in Canada have set ourselves an import target of one third of our consumption, or 800,000 barrels a day, whichever is the lesser. That goal will not be easy to reach. We are already net importers of some 200,000 barrels a day. Between 1980 and 1985, Canadian conventional oil production is expected to fall off quickly, perhaps by 500,000 barrels per day. And, inevitably, demand will continue to increase. To reach our import target we shall have to move on several fronts.
Hon. members will be familiar with the three basic principles of Canada's energy policy. First is conservation. We have to accelerate our efforts to conserve and develop renewable energy supplies. Second, we have to develop new, indigenous supplies of oil from sources such as the tar sands. Third, we must direct increasingly more attention to energy substitution. This latter process will involve massive sums of money; many of these projects were identified last week at the first ministers' conference. Natural gas offers the greatest possibility at the present time of decreasing our present dependence on foreign oil. Let me give the House some indication of the way in which this might work.
There is a wide variation across Canada in terms of total energy consumed from oil by the various regions. For example, Albertans consume only about 30 per cent of their total primary energy in the form of oil. But as we move further east, dependence upon oil increases. In Quebec, close to 70 per cent of the primary energy consumed by the population is in the form of oil, and further east still, in the Atlantic provinces, between 80 per cent and 90 per cent is consumed in the form of oil. Roughly two-thirds of that oil is foreign oil. In other words, the region east of Ontario is most vulnerable to any cessation of that foreign oil supply. This does not exclude Ontario because, as conventional sources become depleted, Ontario too could be affected. That pipeline, which was built to be reversible, may yet be used as such. All of which means that the centre of the country would be more dependent on foreign oil than in the past.
Natural gas is one of our great opportunities to reduce dependence on imported oil. By moving natural gas, whether from the Mackenzie Delta or Alberta or the High Arctic into eastern Canada by means of the pipeline presently under consideration, as well as by others which may be built, such as a Quebec and maritimes pipeline, a project which the first ministers endorsed for early application at their meeting last week, a pipeline could carry gas from the Mackenzie all the way to Halifax, a pipeline which could be reversed so that if significant finds of natural gas were proved off Sable Island or off the Labrador shore-


An hon. Member:: That's more like it.


Alastair William Gillespie: -liquefied natural gas from the High Arctic could be brought into Canso, or Lorneterm at Saint John, for instance, and that gas could be moved back, and the pipeline would be forging a new band of steel across the country. But before this can happen there has to be an assurance of supply. A bubble is not enough. That is why this bill addresses itself to the most important aspect which we are considering, the reduction of our reliance on imported oil.
But some hon. members might still say: Surely Alberta has all the gas we need; why go up to the Mackenzie? In the report of the National Energy Board tabled today by my colleague, the President of the Privy Council (Mr. MacEachen), we find this reference to the pipeline on page seven:

February 20, 1978

While recognizing that there has been continuing exploration success in the western Canadian sedimentary basin since the time of the board's report, it is the board's expectation that a detailed review of gas supply and demand in Canada, which will undoubtedly be undertaken within the next year, will still indicate a need for the Dempster lateral prior to 1990.
The words "prior to 1990" are tied in to the question of the 48-inch low pressure pipe which was raised by certain members of the technical team on the U.S. side. My answer is that we cannot rely solely on Alberta. We have to distinguish between a long term deliverability shortage and a short term deliverability surplus. I should expand on those two particular distinctions.
First, I should like to comment on the long term outlook. Alberta has sufficient long term deliverability to satisfy current levels of Canadian consumption, plus small levels of demand growth, but only until the mid-1980's. Our most recent estimates suggest that with modest increases in the share taken by natural gas, long term deliverability from Alberta will only be sufficient to meet demand until the mid-1980's. With luck, the results of the intense drilling now taking place in Alberta will enable us to extend this date by a few years, but not by much.
Even Alberta's resources are finite. The new discoveries being made there are similar to the oil and gas discoveries being made elsewhere in the world. The pools are smaller; they are harder to find; and recovery is more costly. These facts only serve to confirm the belief that the long term availability of gas is still very much in doubt. This is one of the basic constraints that is at present inhibiting the expansion of gas markets in eastern Canada. It is one of the basic reasons why substitution of natural gas for oil is not taking place at a rate that would be consistent with Canada's long term interests.
This fundamental point is often missed, however, because of the second phenomenon now being experienced in Alberta; a short term deliverability surplus. Alberta could now supply, for a five or six year period, more gas than is required to meet Canadian and current export needs. This is why several proposals have been made to increase gas exports to the U.S. on a swap basis.
This short term deliverability surplus should not obscure the basic facts, however. Canada still does not have enough gas to meet its long term needs, where "need" is here defined so as to include a rapidly increasing market share for natural gas. The current rates of discovery in Alberta are certainly encouraging, and it would indeed be fortunate if large, new accumulations proved up in Canada's western basin. But I do not think we can afford to take such a gamble. We cannot afford to say we are sure that these reserves will be proved up. It is quite clear that we need to develop other gas producing areas in Canada as well, and we have to take advantage of every opportunity we have in this country. The Mackenzie Delta-Beaufort Sea region is one such area of large new potential, and Canadians simply cannot afford to ignore it. Access to the gas in the Mackenzie-Beaufort is crucial to Canada's energy future. It is
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for this reason that I urge an early passage of the bill now before us.
The Alaska highway project will provide Canada with much more than employment and industrial benefits. It will also play a key role in the attainment of our long term energy objectives.


Mr. Gus MacFarlane (Hamilton Mountain):: Mr. Speaker, I am pleased to give my support to this historic piece of legislation. It offers tremendous economic potential for Canada as a whole, including my constituency of Hamilton Mountain and the Hamilton area.


Some hon. Members:: Hear, hear!


Angus (Gus) MacFarlane: A pipeline would involve 2,000 miles, requiring about 1.3 million tons of steel. The money involved would be about $800 million. It would require about 4,000 man-years to make the steel plate and employ 675 people for four years to turn it into pipe. These are rough figures, but they are very important in my area.
No one can really estimate the demands that would be generated by the increased production of turbines, trucks, housing, etc., associated with a pipeline.
The basic steel and pipe making jobs might be divided between Stelco, Algoma Steel and Ipsco. We are talking about a $700 million order with Arctic gas, and of course we expect to Figure strongly in that, perhaps one million tons for the Hamilton and Welland plants-approximately 3,000 man-years in Hamilton plus several hundred man-years in Welland. Ipsco would probably get the rest in its Regina and Edmonton plants. Dofasco, which would be involved in lighter gauge steel, could not expect that kind of production, but any spinoffs in the auto industry and other industries would benefit. Estimates indicate that at least 100 jobs will be created as a result of the spin-off benefit. All of this is a guessing game, but, after all, it is guessing in the right direction. It is guessing and, 1 hope, working toward a bright new future and toward a technology of which Canada could have command. As we all know, if we ourselves can be involved in the development of that technology, that is where the jobs are. Also the jobs are in the new technology which produces new jobs which the rest of the world can observe.
In addition to the production of pipe for the main lines, there are the 300,000 tons which would be needed for the Dempster. Once Canadian gas was being brought on stream, another 900,000 tons would be needed to expand or loop the TransCanada pipeline. All this depends on the building of the Dempster.
In addition, there is Westinghouse to consider in my area. At least one of their turbines would be used in the pipeline. This is important as a stimulus to Westinghouse overseas sales where difficulties are created by the fact that there are no demonstration projects of its highly efficient equipment in Canada. Even Canadians are overly influenced by foreign technology.
Approximately 90 gas turbines will be needed for the pipeline. Each turbine order Westinghouse receives means about

February 20, 1978
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60 man-years for the company in Hamilton. These figures are conservatively estimated but they are very important. When you argue about the pipeline, you should realize that the Deputy Prime Minister and President of Privy Council (Mr. MacEachen) is working on behalf of all Canadians. Indeed, it is very appropriate that a man from Cape Breton should be the one who is involved in this, with his negotiating ability, and his ability to talk with a foreign power such as the United States and to discuss with them terms which would achieve an agreement.
Let me say a few words now about job guarantees. We hear much said about job guarantees. Stelco and the rest of the Canadian steel industry want to compete on a purely business like basis. So long as the government enforces anti-dumping regulations and watches out for steel producers from other countries who receive substantial government subsidies, Stelco believes it will get the lion's share of the pipe order. In fact job guarantees can hurt our steel firms since other countries will retaliate with similar guarantees on their projects, thus depriving efficient Hamilton steel firms of the chance to secure international contracts. Stelco and the other Canadian firms want the business, but they want it because they deserve it in terms of service, price, and quality.
Stelco believes in the free enterprise system. It has never said that the pipe must be produced in Canada no matter how high the price. The steel firms are efficient, and the competition for the order, plus the increased production resulting from it, will make them even more so. Surely that is one of the goals of our evolving industrial strategy. I know my comments are narrow, very limited to the Hamilton area. But, after all, that is one of my privileges in representing my constituency, as other hon. members represent theirs. That is not to say that in the larger sense we do not all have a great deal more to say to the rest of Canada and to each other when thinking of the total Canadian situation, but we should not forget that it is important for us in our areas and in our ridings to talk definitely of the benefits that can come from any Canadian project to us, and particularly to our people.
This bill was not developed overnight; it is the culmination of many studies by numerous private sector interests as well as government related bodies. It has been known for years that oil and gas reserves were located in the Arctic. In the 1920's oil wells were drilled at Norman Wells and a U.S. navy petroleum reserve was established in Alaska. However, the remoteness of the area discouraged development in favour of more accessible reserves.
The latest interest in the Arctic occurred following the 1968 discovery by the United States of major oil and gas reserves in the Prudhoe Bay area of Alaska. Interest grew rapidly as the easily tapable reserves ran low. Actually, a year earlier, in 1967, the northwest project study group was formed, and in 1972 it became part of Canadian Arctic Gas Pipeline Limited.
Exploration, production, and transmission companies formed study groups to examine various routes and technolo-

gies involving Prudhoe Bay and the Mackenzie Valley. The federal government as early as 1970 established pipeline guidelines for establishment of a pipeline corridor for oil and gas transmission. It was almost four years ago, in March, 1974, when Chief Justice Berger was appointed to investigate the environmental and social impacts of a Mackenzie Valley pipeline route as proposed by Canadian Arctic Gas.
The National Energy Board held hearings for over a year, from April, 1976, to May, 1977, to consider a northern pipeline to supply U.S. gas to Americans and Canadian gas to Canadians. In July of last year the NEB favoured the Foothills or Yukon Limited proposal along the Alaska Highway with some re-routing and other conditions. It is this proposal which we are considering now, one that is also known as the Alaska Highway project and the Alcan route.
Meanwhile, the Berger Report recommended a ten-year moratorium on a Mackenzie Valley pipeline, and the Lysyk Report concluded that undesirable social and economic consequences could be kept within acceptable limits through several key conditions. Therefore I believe the government has had the pipeline proposal thoroughly studied and has followed closely the various recommendations made. This pipeline route is cheaper, quicker, and will have less environmental impact than the El Paso tanker proposal which the Americans might have undertaken had we not approved the joint line.
The National Energy Board sees Delta gas as the lowest cost new large source of energy over the period 1980 and onward. It considers the environmental and social problems of the Foothills proposal solvable due to the existing transportation corridor, and the National Energy Board points to the key factors of majority Canadian control, no government back stopping, and an accessible construction and supply route.
The figures as to manpower requirements, size, and economic impact are most astounding. It is estimated that, directly and indirectly, the pipeline development will create 100,000 man-years of employment. This includes about 28,000 man-years for construction and 40,000 man-years to manufacturers. The objective-


An hon. Member:: That does not mean too much to the million who are unemployed.


Angus (Gus) MacFarlane: I did hear one remark, but I do not like to reply when I am reading figures. I am really an arts man and not quite as adept as many others in amassing a great number of figures, but in reply to that interruption about the one million unemployed let me say I always remember the beggar who said "You only dropped a penny but I appreciate it because nobody else dropped anything". I do not think I should knock the jobs that might be created because of the fact people are unemployed. I hope we can create more and more and more, but surely we should not knock the jobs that might be created through the 100,000 man-years.
The project involves construction of 2,765 miles of pipeline in Canada, slightly more than one half of the total of 5,487 miles. Cost of construction in Canada is estimated at $4.2
February 20, 1978

billion, excluding the Dempster lateral, or almost one half of the $10 billion estimated total cost of the pipeline.
The government is not rushing into this enormous project, yet is placing all urgency on keeping a tentative schedule of construction commencement in 1980-81 in northern B.C. and the Yukon, together with a start on pipeline laying in the Yukon by January, 1981. The beginning of operations is expected by January, 1983.
I am saying, coming from my area and thinking of the jobs the hon. member opposite mentioned, it is not too soon to start immediately building stockpiles. I say that knowing my voice will be listened to and considered by as honourable a man as the Deputy Prime Minister, who is concerned about Canadians. Let us start the stockpiles as soon as possible, let us start the storehouses of pipes because we need them all across the country so that we will have the pipe when we commence the pipeline.
It is significant to note that a northern pipeline agency is to be created to maximize economic benefits and minimize social and environmental impacts. Legislative powers now exercised by several other governmental departments and agencies will be transferred to the northern pipeline agency in order to create a single regulatory authority over this project. Designs, specifications, and routing will be subject to approval by this federal agency.
I will not repeat in detail the administrative plans which include a designated officer and a deputy head in Ottawa, together with an administrator in Calgary responsible for day-to-day operations. Foothills (Yukon) is required to cover the cost of this agency and the National Energy Board planning and overseeing until one year after project completion. The minister responsible for the project will be undertaking consultations with the United States, the provinces and the territories in Canada concerned, in order to co-ordinate all aspects of this project. An immediate appeal procedure will be provided through the Federal Court of Appeal.
Companies involved in the project will be required to provide extensive information on such matters as cost, financing, and shipper producer contracts. In the words of the Deputy Prime Minister, "the effort will be to maximize Canadian input and also look after the critical interest of Canadian gas consumers in seeing that the pipeline is built as efficiently and cheaply as possible".
Indeed, consumers in Canada will have a relatively greater stake in the pipeline than their American counterparts. By the mid-1980's Arctic gas will supply about 10 per cent of our domestic needs while Alaska gas will supply only about 5 per cent of the United States needs.
There is ample provision in the legislation to protect the interests of the Yukon. The territory will receive up to $200 million against future tax liability, and $35 million in property taxes before completion of the project. In addition, Foothills will be required to spend up to $5 million for lateral lines to supply gas to areas along the route. Preference will be given to
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Yukon residents in training and hiring for construction and operation of the pipeline.
Access to Mackenzie Delta reserves provided for in this legislation is an important part of our national strategy. Provisions in the bill call for the lateral to be ready to go when the need arises to draw on this frontier gas. The pipeline should provide a strong stimulus to further exploration in this area.
I must note that Canada and the United States, through this pipeline agreement, already overwhelmingly approved by the U.S. Congress, have joined in one of the largest private projects ever undertaken to satisfy the pressing energy needs of consumers of both countries. This, we all hope, will be the basis of further co-operation between the United States and Canada.
If there were no agreement with the United States on this pipeline it is unlikely there would be any opportunity in the future for us to gain access to Delta gas reserves. As my colleague, the President of Privy Council, said, the pipeline project will provide a "substantial stimulus to Canadian production and employment and assist in the achievement of Canada's national goal of energy self-reliance."
This will give Canadian personnel and suppliers full opportunity to compete in goods and services for the construction of the project. It should provide a needed boost to consumer and business confidence in both Canada and the United States. Our balance of payments position will get support through capital inflows to this country and tariffs on American gas transported through the Canadian system.
Canadian companies sought no monopoly, as would have been inherent in a guaranteed percentage of Canadian content. As the Deputy Prime Minister said, we have in this country highly developed companies in these fields that have requested no more than a fair and competitive opportunity to participate in the supply of goods and services for the pipeline.
I should like to echo the comments of the hon. member for Welland (Mr. Railton) when he indicated that we should build this pipeline cheaply, efficiently, and make certain there are no unnecessary delays. In today's economy, delays cost dearly, considering what inflation can do to the construction dollar. The hon. member for Welland also indicated that Canadian companies are not worried about the thickness of the pipe, or about its diameter and whether it is high or low pressure. We should get on with this debate, without undue attention being paid to needless haranguing.
We have shown that our friends to the south are indeed our friends. We have shown that we have the kind of person who can deal in a foreign affairs manner not only with the President of the United States but with many of his representatives. It is a proud moment for me, representing the riding of Hamilton Mountain, to stand with the Deputy Prime Minister, a man from Cape Breton, who has stood so strongly for Canadians and who is now able to bring forward a proposal in a bill which will produce many, many jobs for Canadians in the future.

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


Mr. Harvie Andre (Calgary Centre):: Mr. Speaker, the speech of the hon. member for Hamilton Mountain (Mr. MacFarlane) represents a change of view from his first public utterances about the capabilities of the Canadian steel industry. It struck me as strange when he publicly announced that the Canadian steel industry did not have the capacity to build the pipe. Earlier he admitted to being an arts man and uncomfortable with numbers. One would think by osmosis he would come to realize the Canadian steel industry is at the technological forefront of the world. As a general rule, Canada is far more advanced than most of its competitor nations.
Given the situation where governments do not become involved in oddball ways in subsidies and so forth, there should be no great fear that the Canadian steel industry cannot compete under normal market circumstances. I am pleased the hon. member for Hamilton Mountain now realizes the error of his ways and has corrected himself.
I regret that the Minister of Energy, Mines and Resources (Mr. Gillespie) did not remain in the Chamber after making his remarks. He offered his impressions to the House as to the value of the pipeline, the reasons for the 56-inch pipe decision, and why the pipeline will be of benefit to Canada. He made a lot of observations which indicated that he has been reading the policies put forward by my party, as well as correcting his previous position. I see the minister for unemployment is chuckling. Perhaps he should read the last few publications of the Department of Energy, Mines and Resources, in particular the energy policy of 1973 and the energy strategy which followed. If he did so, he would notice a remarkable change in view from what the government published as a policy and what was articulated today. We welcome that change in view, but four years have been lost. Government members should have read our speeches earlier.
The Minister of Energy, Mines and Resources indicated that the pipeline would provide easier access to Delta gas. In view of uncertain world supplies, uncertain domestic supplies in southern Canada, uncertain political situations and so on, he indicated that it would be necessary to use that gas. I could not agree more. It is vitally important, but more important is the land use regulations, the royalty structures, the permit structures, and the licensing structures which will pertain to noth-ern Canadian lands under federal jurisdiction. Canada can have the most beautiful pipeline in the world, but it cannot deliver anything unless someone explores for stocks of oil and gas to fill the pipeline. That will not happen unless the government does something soon with respect to royalty structures in the Northwest Territories and the High Arctic.
The royalty regulations which were brought in by the hon. member for Qu'Appelle-Moose Mountain (Mr. Hamilton) were kept in place until April, 1970. At that time the government withdrew them and indicated that it would be making changes. Approximately Vh years later the government introduced a new set of regulations which are totally hopeless in terms of encouraging exploration. These were introduced last August through an order in council. If anyone makes a cursory

examination of what is happening in the north he will find that exploration is tailing off substantially. The people of that region realize a pipeline company is coming, but exploration is not being increased by them because, under the present rules, it is not worth attempting to find oil and gas in the north.
The minister has indicated quite accurately that Canada needs oil and gas to satisfy its needs and to protect us from the vagaries and uncertainties of a world which is running short and is politically uncertain in some areas. When he makes that case he should realize that for anyone to have confidence in the government it is necessary to put rules and regulations in place which will encourage industry representatives to find oil and gas in the north.
I see the Minister of Energy, Mines and Resources is re-entering the Chamber. He seemed to state a new policy of the government, but it was previously articulated on this side of the House, namely, that the nation should pursue an energy policy of displacing the consumption of crude oil with natural gas.


Alastair William Gillespie: Is that new to the hon. member?


Harvie Andre: I have just found out that the hon. minister has been reading the speeches of Conservative members. I am pleased to see a change of mind on the part of the minister. The minister had great confidence in the exploration activities taking place in southern Canada, and in particular in Alberta. He indicated that those activities were producing fair volumes of natural gas. He expressed the thought that we could not rely on that effort to produce all our gas requirements, and that we would need more from the High Arctic and offshore.
In his discussion of the so-called gas bubble in Alberta and the exploration effort there, the minister failed to acknowledge that many of the explorers are small Canadian companies, the so-called independents. These companies are without large cash flows from existing production. They raise their money to a large extent through new investment and, as such, do not have the capability of discovering reserves of gas and leaving them for five, ten or 20 years, until such time as the market opens up so that they can sell them. In other words, they need cash flow from their discoveries in order to finance further exploration.
Waiting until 1983 or 1985 or beyond-until 1990-when Delta gas may be brought down to pursue this policy of replacement of natural gas and to work toward increasing the consumption of natural gas as opposed to crude oil, has the effect of denying these independents cash flow at this point in time when they are able to go out, and want to go out, to continue to explore and discover more gas. What I am leading up to is that if the minister felt, and was genuine in his feeling, that it is in our interest as a nation to pursue replacement of crude oil with natural gas, in other words, to increase the total proportion of national consumption of gas-we should be negotiating a swap arrangement with the United States right now or accelerating existing exports in order to provide these
February 20, 1978

small independents with cash flows so that they can maintain their current, aggressive exploration efforts.
I am absolutely convinced that these small independents need more cash flow. Let us remember that with a swap arrangement or an acceleration of existing exports we do not at all diminish our long term security position. We simply provide cash flow at this point to those who are demonstrably using it to find more gas, so in fact we increase our security by finding more natural gas. If it is government policy that Canadians will use more natural gas, this seems a logical and sensible extension, and I hope the minister will pursue that policy.
We hope Bill C-25 will eventually lead to the construction of this pipeline, but as we look back at the process involved, expressions like "horrendously expensive", "political sham", "world's largest poker game" and "hodge-podge" come to mind. When we look back at the whole process the overwhelming impression which is left is one of incredible size and magnitude. It has been an incredibly inefficient way to reach a decision. The costs have been staggering. Canadian Arctic Gas is estimated to have spent $130 million on its unsuccessful attempt to secure the right to bring Prudhoe gas to the United States border. It is estimated that the Foothills group spent about $40 million. If we add up all the money spent by the National Energy Board, the Berger Commission, the Lysyk Commission, and internal government operations, it is not unreasonable to come up with a total of about $250 million in basically a non-productive exercise. Granted, some money was spent on accumulating engineering knowledge which will be used in the pipeline project, but only a small portion. The remainder was spent just on reaching this decision. If we had the same kind of decision-making process then as we do now, I wonder if we would ever have had the CPR.
There have been some suggestions, although they are abating these days, that the National Energy Board made a political decision as opposed to a technical or correct one. Frankly, I have read the documentation quite thoroughly and I find little evidence of that. I do not think such a position can be substantiated, but there is an extremely unfortunate perception of the integrity of the National Energy Board when we consider the way the decision was made. 1 hope that never again will we have in this country two or three separate boards or inquiries looking into the same question.
The government should be eternally thankful that the NEB did not make a recommendation contrary to the recommendation of Mr. Justice Berger because, if there had been two or more government commissions or boards making opposite decisions, the political chaos would have made life just a little uncomfortable. I wonder what discussions have taken place in the cabinet in this regard, and I wonder what decision-making process was involved.
We have had various ministers stating various things. One stated that no pipeline can be built until land claims are settled. Another stated that land claims settlements are quite a separate question and that one does not necessarily have to precede the other. In his speech on the resolution introduced
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by the Deputy Prime Minister (Mr. MacEachen) last August, my leader referred to what I think is an "Alice in Wonderland" attitude with regard to the decision-making process. My leader said the following:
Mr. Justice Berger, having studied the Mackenzie Valley route, prefers the Alcan route, which he has not studied. The NEB, having studied Berger, recommends access to the Dempster route, which it has not studied. The Lysyk group, the third inquiry in a venture conceived, originally, to achieve Canadian access to the Canadian reserves, recommends a route which gives American access to American reserves, with the possibility of connection to Canadian reserves, assuming the viability of the Dempster connection, which nobody has studied.
The way which has been used to arrive at a decision is incredibly complex and bizarre. The only thing more bizarre is the way in which the Prime Minister (Mr. Trudeau) has assigned responsibility. One might describe the northern pipeline as a northern development project, yet the Minister of Indian Affairs and Northern Development (Mr. Faulkner) has not had any responsibility, nor did the previous minister, the current Minister of Consumer and Corporate Affairs (Mr. Allmand).
If it is not a northern project, it seems logical that it could be an energy project. Indeed the Minister of Energy, Mines and Resources did try to negotiate a pipeline treaty with the United States about two years ago. However, when the resolution of the House of Commons was passed and when the decision of the NEB came down and it was time for the government to sit down with our friends and neighbours, the Americans, to negotiate a pipeline treaty, it was not the Minister of Energy, Mines and Resources who participated. It was not the Secretary of State for External Affairs (Mr. Jamieson), even though international relations would normally come under his authority. It was not the Minister of Industry, Trade and Commerce (Mr. Horner), even though trade and commerce are related to this.


Stanley Howard Knowles: Did you want any of them?


Harvie Andre: It turned out to be the Deputy Prime Minister and President of Privy Council who, in the years I have been here, has never to my knowledge had anything to do or say with regard to energy or pipelines. Perhaps there is something magic in the background of a Cape Breton economics professor which makes him so superior to the other options available to the Prime Minister. Frankly, I wonder about the esteem of the Minister of Energy, Mines and Resources, the Minister of Indian Affairs and Northern Development, the Secretary of State for External Affairs and the Minister of Industry, Trade and Commerce that they would take this slap in the face from the Prime Minister, who clearly indicated he had no confidence in their abilities and turned to the Deputy Prime Minister and asked him to negotiate this treaty. The Prime Minister has treated his ministers shabbily. The Deputy Prime Minister has obviously taken that as an example to follow in the treatment he has given us in the House of Commons with regard to this bill.
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February 20, 1978
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As indicated by the hon. member for Yukon (Mr. Nielsen), there was no reason for this bill not to have been introduced in November or December. It was ready. Negotiations with the United States had been conducted. Nothing substantial has changed between then and now. Why has there been delay in bringing forward this bill, which we are now told is vitally important and must be passed quickly? One cannot help but speculate on the possibility that there may be some ulterior political motive in the mind of the Deputy Prime Minister. That is sad from a couple of points of view, sad that he would treat the House of Commons in that manner and sad that he would play politics with a project so important to the nation.
A further example of the lack of common decency shown by the Deputy Prime Minister is that when the bill was introduced the press release and background material which accompanied it were not made available to members of this House until a week later. That is either an example of sloppiness in the minister's office or of the disdain he feels toward the House of Commons. Perhaps he hoped to derive some political gain from this course.
Another example of disdain was the tabling of the National Energy Board's report regarding the size of pipe to be used at three o'clock today when, at 2:40 this afternoon, the Canadian Press had already issued a bulletin on the subject. In other words, the people of Canada knew the decision some minutes before this House knew it. If the minister has a genuine interest in working with members of the opposition so that the business of the country may proceed in an efficient manner, why did he show this lack of courtesy?


An hon. Member:: Tradition.


Harvie Andre: I suppose it is tradition. They treat each other that way and perhaps feel they should treat us in the same way.
The Minister of Energy, Mines and Resources then read a prepared text dealing with the National Energy Board's recommendation. Again the House of Commons was relegated to a position of low priority by that minister. This hardly creates a mood conducive to the rapid conduct of business. One has to ask if it is a deliberate attempt by the government to create friction so that it can then go to the people claiming that it must get rid of the opposition and elect more Liberals in order that the country may be run more efficiently.


Some hon. Members:: Hear, hear!


Harvie Andre: I see the Deputy Prime Minister nodding in agreement but I do not think that little sham will turn the attention of the people away from the performance of this government over the last ten years. We are not worried about the outcome of the election, whatever it may be. I am confident we will be given the responsibility of clearing up this mess within the next few months.
This is an important project for Canada and we want to co-operate. In August we agreed that the pipeline should go

through, and we have not changed our view. Several members on this side have given details of things we would like to see modified in the bill. We hope there will be more flexibility and willingness to co-operate when it reaches committee than have yet been demonstrated by the government. We want to pass the bill with dispatch and efficiency and this is possible if there is a willingness to co-operate on the other side. If that is not the case, however, it may take some time for the bill to go through. That would be unfortunate for the country, but it would not be the fault of this side.
This project is important for the country psychologically, Mr. Speaker. It is a $10 billion project, but we must remember that the Canadian portion only amounts to $3.8 billion. It is not as complex, for example, as the Syncrude tar sands plant in terms of the technology, the construction and environmental impact. The hon. member for Hamilton-Mountain referred to exciting new technology but, Mr. Speaker, it is the oldest technology in the world. As a matter of fact, building pipelines is a simple engineering task, and Canada is probably one of the world's best at it. We can do it quickly, effectively, and more efficiently than any other country. We are also in the forefront of the communications industry, so to describe this as some big research and development project just is not correct. It is something that Canada has been doing well for a number of years and we have no need to be frightened of it.
A very small portion of the project will go into territory that has not had pipeline before, and that is the part in the Yukon. Northern British Columbia has all kinds of pipeline already so they know how to lay and maintain pipe. It is not a frontier in any sense of the word. Alberta has thousands of miles of pipe. Indeed, I think the hon. member for Medicine Hat (Mr. Hargrave) probably has more pipe running under his ranch than will be running in territory that has not been pipelined before. We have no need to be concerned about the magnitude of the project.
I wonder why the National Energy Board, or the Minister of Energy, Mines and Resources, or the President of Privy Council has not referred to the Energy Resources Conservation Board in Alberta or its equivalent in British Columbia for guidance on the operation and management of the project. Both provinces have thousands of miles of pipe. This would seem to be a good area for federal-provincial co-operation, and since these provinces already have the expertise, their help could mean a substantial saving in expenses.
A stimulus of $4 billion to the Canadian economy is of great importance but I want to point out, particularly to members of the New Democratic Party, that the money will not be spent primarily in British Columbia, Alberta, or even the Yukon. Most of it will be spent in the rest of the country.
Some years ago an economist at McGill University undertook a study of what happens to a dollar spent for oil exploration in Alberta. Some 65 cents of that dollar ended up in central Canada in the hands of suppliers, bankers, and transportation companies. That is from oil exploration only. For pipelining, the spread of money will be much larger. Out of that $4 billion a very large percentage will end up in other
February 20, 1978

regions of the country apart from where the pipeline itself is located. With co-operation for the government, the benefits of the pipeline could easily be expanded into Quebec and Atlantic Canada where there is a real need for jobs today. The government could help in locating suppliers, removing transportation bottlenecks and in acquainting producers and manufacturers and service operations with the opportunities; the government could bring together the contractors and the suppliers from Atlantic Canada and Quebec, and this could ease the serious unemployment problems they are experiencing.
The government could do a lot toward spreading the benefits of this project right across the country. That is what I would call positive government action. That is the sort of effort it should be directing itself toward now. It does not need legislation, or new hiring of hundreds of civil servants. It does not need to create new authorities or regulations. All that is required is for the Minister of Industry, Trade and Commerce and the Minister of Regional Economic Expansion (Mr. Les-sard) to get to work and do their jobs. They can spread the wealth across the country.
Another aspect of this project I will just touch on because it will be discussed in greater detail by my friend, the hon. member for Qu'Appelle-Moose Mountain (Mr. Hamilton). I am sure the Deputy Prime Minister and the Minister of Energy, Mines and Resources have heard of the proposal from this party to provide an opportunity to Canadians to participate in the equity position of this pipeline. It will be a good investment. There has never been any pipeline which has lost money. However, that is not to say pipelines are free from risks, they are not.
Who will have the chance to invest in this venture? Clearly the Foothills and AGTL group have put a lot of money into this project and they deserve an opportunity to participate. If other people are to be given an opportunity to participate in the profits and equity position, to whom should it be given? Our proposal, as the hon. member for Qu'Appelle-Moose Mountain will point out, is that all Canadians should be given that opportunity as was the case in 1957 when the government of Alberta gave its citizens the opportunity to participate in the Alberta Gas Trunk Line shares when that company was formed.
In fact if members opposite would read my speech on February 2, an allotted day, they will see that this party is encouraging that kind of approach to be used in many activities. Instead of creating Crown corporations or granting special privileges to special groups, use the Alberta Gas Trunk Line model and let individual Canadians participate in the equity position.
The hon. member for Yukon in leading off our party's debate on this issue indicated the importance of parliamentary monitoring of the activities of the pipeline authority. One aspect of this bill troubles me. That is the discretionary authority given to government. It is a typical theme which is included in a lot of legislation put forward by this government.
Northern Pipeline
We find it offensive in general for governments to ask parliament to give them discretionary authority to do whatever they want. It is a principle which the government applies far too frequently. It may be too late to do anything in this regard now, but one of the checks we can impose is that of parliamentary monitoring of what is happening. It is an after the fact method, that through knowledge the activities of government will be exposed to the light of day through a parliamentary committee. We feel that it will provide a control on potential abuses or misuses of the power we will be granting by the passage of this bill. We strongly recommend that when this bill goes to committee the government give favourable consideration to our amendments in this regard.
We do not intend to delay this bill, Mr. Speaker. We think the project is important and we think it will have tremendous advantage to Canada. It is important to Canada's long term energy situation. The process the government used in coming to this point was abysmal, to say the least. It was extremely costly and chaotic. It took it a long time to arrive at this juncture. We do not quite understand how the Prime Minister could have an energy minister and yet not allow that minister to have anything to do with the largest energy project that this country has ever undertaken. We cannot understand why an energy minister would take that slap in the face and not resign.
Finally, I take off my MP's hat and put on my chemical engineer's ring and talk about a 56-inch pipeline. I cannot see how the National Energy Board could have arrived at any other decision. Once they had decided on capacities, the size was dictated. To have gone to a higher pressure pipeline would have represented a step out in terms of technology that had too many risks associated with it. The problem, in my opinion as an engineer, is less pipe than it is everything else-valves, fittings, compressors. I am sure we can build a pipe, weld it and install it, a pipe which will withstand those kinds of pressures. We do not know how much extra precautions would be necessary and therefore costs might escalate. There are always unforeseen costs in making that kind of technological advance.
Frankly, as an engineer, what would have scared me most of all in choosing these very high pressure pipes was the questions of valves, compressors, etc. This is especially so in the northern sectors where there are extreme climate changes. It is difficult to have equipment that will operate properly even under moderate situations. When you experience great temperature changes and a technological step like that is made to very high pressures, the risks are inordinate.
The 56-inch size pipe, of course, is based on a decision to provide now for the capacity to bring down Delta gas through the Dempster line. Having made that decision there is no reason for any delay in proceeding with the study of the Dempster Highway connection to the Mackenzie Delta. If you are installing 56-inch pipe it is because you expect the Dempster lateral to be built. They follow one after another. It would be stupid to instal 56-inch pipe if there was a significant possibility that the Dempster lateral would not be built. Money would be wasted. By adopting a 56-inch pipe the government is
80031-50%

February 20, 1978
Northern Pipeline
saying the Dempster lateral has a very high probability of being built. If that is the case let it come out and say it, and we can proceed with the necessary studies and analyses to make sure the time lag between now and when it is built, with the costs involved, and disruption, are less significant than they have been in this instance.


Mr. Wally Firth (Northwest Territories):: Mr. Speaker, I am pleased to take part in this debate. I wish to make a few comments on Bill C-25 for the building of the Alcan pipeline. It will be the largest and costliest in the history of this country and will have far reaching implications, particularly for those in the north, far reaching, socially, politically, economically, and environmentally.
My colleagues in the New Democratic Party have raised a number of very serious issues in this debate. I join with them in stating that, as the pipeline legislation now stands, this project will be one of the biggest sellouts in our history. If that happens to be the case, there are not many of us here today who will be proud to have been a part of allowing that to happen.
A great deal has been said during the debate on the economic aspects of building the pipeline. I strongly support the criticisms of the legislation that have been made by my colleagues. I am not happy that the government has introduced this bill at this time as it offers no guarantee that this project will generate jobs for Canadian workers. I say this particularly in view of the fact that there are now over one million people in this country who are unemployed.
There is only one guarantee in the legislation. That is that within a few years time a pipeline will run through Canada moving American gas to American markets. As the bill now stands, that is the only guarantee.
Leaving aside the economic issues for a moment, I wish to address a few remarks to the human aspects of this legislation. This area of concern has received very little attention. The government seems to have overlooked this important fact. I refer to those who live along the proposed route in the Yukon, northern British Columbia and northern Alberta. They are the ones who will bear the brunt of this project both during and after construction.
I do not know how to get this fact across to the government. Following their planned show in Alberta in March of this year, perhaps it would help if the Prime Minister (Mr. Trudeau) and his travelling cabinet visited Whitehorse and other parts of the Yukon. In any event, the lives of those in that part of the country will be very deeply affected by the building of this pipeline.
The impact on the local economy will be disruptive and lasting. How will the people of the Yukon minimize the adverse effects of the project on the people themselves and the economy as it is now?
There is no way the Alcan pipeline can be justified in terms of benefit to the local economy. It cannot be justified in terms

of benefits it will bring to people of the Yukon. It appears the Yukon communities will not even benefit from cheap fuel supplies as a result of the pipeline. There will be the same situation as occurred in Alaska. That pipeline brought Alaskan gas past the doorsteps of people who paid very high rates for fuel to heat their homes. It was exported to the lower 48 and they had to buy it back. That is exactly what will happen to the Yukon.
The Foothills construction schedule calls for roughly 2,000 or more workers to be employed on pipeline construction during the peak period, and the majority of these workers will come from outside the Yukon. Although the Yukon Territorial government is making some preparations to see that Y ukoners will be hired for work on the project, the job situation remains in a shaky position. We have no real guarantees that Yukoners will be given preference in hiring. The skilled construction workers necessary for pipeline work do not exist in the Yukon and Northwest Territories.
All we have is a statement by the Minister of Employment and Immigration (Mr. Cullen) that he expects arrangements will be made with the pipeline companies to have interested Yukon residents sent out for training and experience on pipeline jobs. This is definitely not the kind of guarantee on which people in the Yukon and Northwest Territories, especially in the western Arctic along the Mackenzie Valley, can rely.
Furthermore, it seems very unrealistic that the companies are going to lay off skilled pipeline workers who have been involved in the project in the southern section in British Columbia and Alberta when they reach the Yukon border because of some definition which states that these workers are not sourdoughs.
There are no guarantees that Yukon workers will have first crack at pipeline jobs. The government has not said how it plans to enforce any regulations that will guarantee jobs to people in the Yukon and Northwest Territories. Nothing in the legislation is strong enough. If those in government have given this serious thought since debate on this bill started, perhaps we will hear about that today or within the next few days.
Yukon communities will have to accommodate the needs of in-migrants at considerable financial and social cost. Most of the workers will leave the Yukon when the project is finished. We have seen that happen time and again. It happened with the building of DEW line sites, the town of Inuvik, and the building of a few gravel highways. What was left behind was usually not good.
During construction of the Alyeska pipeline in Alaska, the influx of people led to the disruption of local economies, an increased demand for government and commercial services, and a rate of inflation that was double the United States rate of inflation at the time the pipeline was built. There is no sensible reason to suggest that the Yukon experience will be any different.
Surely we have something to learn from the Alaskan experience. During the period of pipeline construction several important changes occurred in the city of Fairbanks, for example.
February 20, 1978

This affected drastically the lives of the local people. Unemployment rose, prices went up, nearly one half the work force suffered a loss of real income, taxes increased, and inflation went crazy.
Migration into a community causes serious shortages. There is an increased demand for services, utilities, and commodities, not excluding housing. This is what the people of Whitehorse, one of the largest communities along the route of the proposed pipeline, have to look forward to now. There is no way in which one can justify the building of the pipeline in terms of benefits it will bring to people of the north.
The Lysyk inquiry clearly stated:
The Foothills project relative to the Yukon economy is at least comparable to the size of the Alyeska pipeline in relation to the Alaskan economy.
Is this what the government has in mind for the people of the Yukon-higher prices, unemployment, and a drop in real income? For example, public service accounts for between 25 and 30 per cent of the Yukon work force. Public servants have endured the inflation of recent years. They have been obliged to pay steadily increasing rents because no rent controls were enacted in the Yukon, even after the formation of the AntiInflation Board. Now public servants may be left out in the cold, their wages frozen despite the rapid inflation we can expect in the local economy during the construction period.
Evidence before the Lysyk inquiry suggested that a significant increase in the cost of living in the Yukon could be expected while wage increases would not be uniform. This was the experience in the Fairbanks area of Alaska. Incidentally, I understand that banks, police forces, and even schools were affected by the project. People left their jobs to take on temporary work at higher pay. Police forces lost some of their men who preferred to take on jobs as security officers along the route. This is not the kind of thing which brings long lasting benefit to an area.
There is only one Canadian city where the cost of living is higher than in Whitehorse and that is Yellowknife in the Northwest Territories. However, it seems the people of Yellowknife can expect to lose that dubious distinction because the hon. member for Yukon (Mr. Nielsen) and his collegues seem determined to ensure that Whitehorse experiences the highest cost of living in Canada; he and his party want this legislation even more than do members on the government side of the House.
So far I have not mentioned the social problems. We shall be facing many of these in the building of this pipeline. It is inevitable that social problems will accompany high unemployment, a loss of real income, increased abuse of alcohol, increased drug abuse, prostitution, family breakdown, mental strain and, most probably, increased criminal activity resulting from in-migration into the Yukon.
Health, social and educational services will be strained to the breaking point and beyond. Most of these services are already strained to the limits of their capacity. Government services will expand, and the people of the Yukon will end up
Adjournment Motion
paying for them. During the construction of the Alaska Highway the Yukon witnessed the effect of the migration of some 30,000 people. One presentation to the Lysyk inquiry estimated that as many as 30,000 people could be drawn into the Yukon during the peak period of pipeline construction. Whitehorse still bears traces of the planning problems which were encountered as a result of the building of the Alaska Highway some 30 years ago.
Today, Whitehorse is a city of some 12,000 people. I remember when they extended the boundaries. They boasted about being one of the largest cities, in area, in Canada. Whitehorse has an area of about 162 square miles, and the operation and maintenance of services in such an area require considerable expenditure. So services will be strained to their limit, or beyond, during the peak period of the building of the pipeline.
I have mentioned the Lysyk inquiry several times. I should now like to ask this question: what has happened to the recommendations of that inquiry? In the short space of just three months the commission was able to respond quite effectively to the concern of those living in the Yukon by putting forward a number of specific recommendations. First, what happened to the undertaking to hold a second stage inquiry? I would remind the government that the native people and the environmental groups took part in that inquiry on condition that there would be a further investigation, a second stage inquiry. The government promised that such an inquiry would be forthcoming, bearing in mind that Lysyk had only three months in which to do his work.
May I call it five o'clock, Mr. Speaker?



PROCEEDINGS ON ADJOURNMENT MOTION

["Order, please. I regret to interrupt the hon. member. The hour allotted for the consideration of private members' business has expired. I do now leave the chair until eight o'clock tonight.\nAt six o'clock the House took recess."]
The Acting Speaker (Mr. Turner):: Order, please. It is my duty, pursuant to Standing Order 40, to inform the House that the questions to be raised tonight at the time of adjournment are as follows: the hon. member for Grenville-Carleton (Mr. Baker)-Finance-Relocation of civil servants-Effect on economy of Ottawa area; the hon. member for Madawaska-Victoria (Mr. Corbin)-Agriculture-potato action committee-Progress report on study; the hon. member for Provench-er (Mr. Epp)-External Affairs-Roseau River project-Violation of Boundary Waters treaty-Government position.
It being five o'clock p.m. the House will now proceed to the consideration of private members' business as listed on today's order paper, namely, notices of motions and public bills.

February 20, 1978
Western Canada Development Centre



The Acting Speaker (Mr. Turner):: Order No. 4, the hon. member for Ottawa West (Mr. Francis). Stand by unanimous consent?


Some hon. Members:: Agreed.


The Acting Speaker (Mr. Turner):: Order No. 5, the hon. member for Egmont (Mr. MacDonald). Shall the item stand by unanimous consent?


Some hon. Members:: Agreed.


The Acting Speaker (Mr. Turner):: Order No. 11, the hon. member for Don Valley (Mr. Gillies). Shall the item stand by unanimous consent?


Some hon. Members:: Agreed.


WESTERN CANADA DEVELOPMENT CENTRE
Mr. Douglas Roche (Edmonton-Strathcona) moved:: That, in the opinion of this House, the government should consider the advisability of establishing a western Canada development centre to assemble and monitor, on a continuing basis, data concerning energy, construction, transportation, investment, housing, education and population as the basis for federal and provincial government policies to ensure integrated economic and social development in western Canada; such centre to be funded by a partnership of the federal, western provincial and northern governments and business, labour and academic bodies, who would prepare an annual report and public conference on growth in western Canada.
He said: Mr. Speaker, the focus of my address this afternoon in this private members' hour is on improving the quality of life in western Canada, not just the quantity. The new west contains within its vast areas perhaps the highest potential for personal fulfilment the world has ever known, provided we find a way to integrate economic and social planning to make a more human society.
When I use the phrase "new west", I mean the four western provinces, the Yukon, the Northwest Territories, a region that covers 70 per cent of the total land area of Canada and has a population of six million, or 27 per cent of the population of Canada as a whole. Here is found 80 per cent of Canadian farmland, more than half the merchantable timber, and almost all the proven economic reserves and potential resources of oil and gas.	-
By now everyone has heard that the new west has taken off on an economic boom so strong that the financial centre of gravity in Canada is moving westward. The list of construction projects is dazzling. They involve the $10 billion Alcan gas pipeline, which the House is now debating, the largest private construction project in history; the $2.15 billion Syncrude plant at Fort McMurray, now almost ready to start oil sands
[The Acting Speaker (Mr. Turner).]
production; the $2.5 billion steam injection oil sands plant to be built at Cold Lake; huge coal and uranium mining projects, and petrochemical plants.
These energy projects are truly spectacular, but the new west is more than a storehouse of mineral resources. It has an enormous food production capacity, an unlimited supply of fresh water, and growing entrepreneurial and management skills. The benefits are already felt throughout British Columbia, Alberta, Saskatchewan and Manitoba where the gross provincial product for the four provinces in 1976 was $8,850 per capita, which exceeded the Ontario and Quebec per capita of $8,280.
It is clear that the economic balance of power in Canada has shifted. We have the resources, the technology, the talent, and the money to keep expanding. The Alberta Heritage Fund has accumulated nearly $3 billion and will soon be growing at the rate of $1 billion a year. The new west is an attractive investment, and thus we are emerging as the principal economic force in Canada. In fact the strength of Canada as a whole now depends on the west. Last fall's Financial Post conference on western Canadian development, "Think West", was well named.
Western development is all the more remarkable considering that national economic policies have always been directed to the benefit of central Canada. The development of federally assisted petrochemical plants in the industrial heartland of Ontario, rather than policies directed toward upgrading at the source, is but one example. Inequitable freight rates have been a longstanding sore in western Canada.
Our resources in energy have enabled the west to emerge, but the new wealth will prove fleeting if industrial diversification does not follow. The west needs more industrial and processing diversity to upgrade and add value to its rich agricultural and resource base, to provide permanent jobs and business stability, to avoid vulnerability to big-project boom-or-bust cycles and the growing instability of farm and other primary product prices. This is why Alberta's premier, Peter Lougheed, is now calling for a new national economic policy involving "co-operative federalism in the fullest sense of mutually agreed upon economic policy and direction".
The idea of co-operation is well understood in western Canada. Indeed the western provinces have found sufficient common ground on which to base a lasting environment for strong co-operation and collaboration. The most prominent rallying point among the western provinces which sparks this co-operative spirit is our desire to pursue the economic destiny which we feel is ours. By having the opportunity to develop to our fullest potential, the western provinces feel this is the manner in which we can make the maximum contribution to Confederation.
Reviewing the history of western provincial co-operation, Dr. Gerry T. Gartner has written in Canadian Public Administration that it is becoming increasingly more difficult for a single province to muster the resources necessary to research, plan, and develop policies and programs. "To some
February 20, 1978

extent, western provincial co-operation is a creature of necessity".
As far back as the first meeting of the prairie economic council in 1965, the western governments have seen the benefits of co-ordinating economic development policies on a regional basis. The one prairie province conference in Lethbridge in 1970 focused on wide constitutional, political, social, economic, and regional development issues. When the Western Economic Opportunities Conference was held in 1973 the west was ready to present Ottawa with a single regional position on agricultural, energy, and transportation policies that transcended their diverse political ideologies.
The Western Economic Opportunities Conference was not, of course, a flaming political, or economic, success. But it showed westerners themselves, as well as Ottawa, the shared common interests in the west. All four provinces want greater interprovincial trade and a larger role in Canada's export of manufactured goods. They want an efficient, economic, and stable grain handling and shipping system. They want a shared power of determination in federal-provincial cost-sharing programs. Undoubtedly the future of Canadian federalism will depend, in large part, on the resolution of these problems which threaten national unity.
Because of gains through co-operative economic analysis, it is distressing to note that similar progress has not been made on issues that have a social theme. Dr. Gartner and other analysts have concluded that the least effective co-operation is found in the social area: social policy, cultural policy, educational policy and justice. Topics such as social service costs, native problems, billingualism, school curriculum content, and corrections and law reform have been discussed by the western premiers, but little in the way of co-operation has resulted. This is unfortunate because the spectacular economic growth of western Canada is obscuring deep social problems. The evidence is mounting to convince anyone who still needs convincing that economic growth alone does not make a healthy or beneficial society.
Consider just the situation in Alberta which is the cutting edge of western growth. In 1976 Alberta led the nation in the rate of both drugs and sexual offences and in violent crimes. Drug offences jumped 55.8 per cent over the preceding year. The rate of sexual offences, 60.57 per 100,000 population, was well above the national rate of 46.07.
Social problems are by no means confined to the criminal element. Though Alberta is one of the most blessed spots in the whole world, the divorce, alcoholism, abortion, and suicide rates are the highest in the country. There is discrimination against native peoples. Welfare rolls have soared. Major transportation bottlenecks have occurred in Edmonton and Calgary. Real estate prices and rentals have risen at unconscionable rates. Farmers are alarmed at the rate at which prime farmland is being gobbled up by housing and industrial developments. There is a desperate shortage of accommodation for senior citizens. Four thousand people a month are migrating to Alberta in search of jobs; and because the western boom is principally technological, not labor-intensive, many unskilled
Western Canada Development Centre
and semi-skilled remain unemployed, thus swelling the demand for social services.
In the midst of boom, there is not enough money for social services. What a paradox! Is it any wonder that family breakdown has become the most serious social problem of our time despite new-found wealth? As the Edmonton Journal drily observed:
We have not been very successful in coping with the negative aspects of economic growth.
It is imperative that we upgrade the quality of life in western Canada by more attention to the social factors affected by economic boom. The problem is not wealth; the problem is people: people being increasingly excluded from what should be the real benefits of wealth while a few are increasingly favored. It is undeniable that people in all walks of life feel excluded from work, from status, from identity, from meaningful living.
When I talk about "quality of life" I am not talking about some vague comfort. I mean those areas that are regarded internationally as social indicators of the quality of life: health, individual development through learning, employment and quality of working life, leisure, command over goods and services, physical environment, personal safety and the administration of justice, and social opportunity and equality.
In the development of Canada so far, the accent necessarily has been on building and growth. Our success has been measured in the production of goods and services. But the conditions of modern society have changed dramatically in the past few years as a result of the technological and cultural explosions. Technology has brought many benefits-communications and transportation are just two examples-but it has also been a chief source of anxiety and spreading frustration that characterize modern life. The acquisition of more goods has not by itself made us a happier people.
Affluence makes sense only if it leads to increased social justice and personal fulfilment. In this way economic growth may become a means to the end of an enhanced quality of life. We are not without human concern in our institutions including this one, but we frequently express it in the wrong way. We add on humanizing factors to public policy rather than starting from the base of the human being, his rights and dignity. Our social security policies in pensions and unemployment insurance allocations are a prime example of this "adding on" humanization. In other words, we create a system which generates casualties and then add on another huge system to compensate the casualties.
These disorders stem from a distortion of values. The value of the human being is measured by his ability to buy, and hence consume. Those who are materially poor have failed. Measuring the worth of persons by their income level and buying power encourages social discrimination that compounds that harm. A subtle discrimination segregates rich and poor in housing developments, schools, law enforcement and health care. It is easy to enunciate a clear principle of justice:

February 20, 1978
Western Canada Development Centre
every member of the Canadian society has a right to a share of the national wealth sufficient to enable him to participate fully in society. But it is very difficult to put this principle into practice while there is so much public confusion and resentment of the present social security system.
A more human society in Western Canada cannot be brought about solely by the relentless march of technology any more than by unfettered individualism. It can only be brought about by an orderly co-operative approach in which the individual and special interest give way to public concern for the common good. As Harleigh B. Trecker points out in "Goals for Social Welfare", 1973-1993,
The individual must be seen and understood in society in a much more complete way than in the past. The intervening act of helping must focus not only on the individual but on the interaction of the individual in his groups and in society. Many of the pressures on the individual are societal in origin and no amount of working on or with the individual alone can relieve these pressures. Society must be changed.
We have to begin somewhere. The new west, because it is a dynamic that will affect all of Canada, is the place to start. I am calling for the development of an indepandent organization that will not only analyze the economic factors of growth in the four western provinces and the north but will promote sound social policies. It must speak courageously of values and desirable social objectives, but remember that resources are not unlimited. It must remain non-partisan but skilled in the work of governments which have the final responsibility for public economic and social policy. The organization must have enough financial support to operate with a high degree of professional competence.
In short, the time has come to co-ordinate systematically all the data concerning energy, construction, agriculture, transportation, investment, housing, education and population so that a clear picture emerges of what is happening to society in western Canada. Then, as my motion proposes, this complete picture would serve as the basis for federal and provincial government policies to ensure integrated economic and social development in the west.
Here I wish to pay tribute to the Canada West Foundation, a small, independent group of business leaders formed four years ago in Calgary to conduct research programs into western problems and to stimulate greater public awareness of the future of the west. Headed by Arthur J. E. Child, President of Burns Foods Ltd., the Foundation concentrates on an orderly development of the resources of the west. It has so far completed eleven research projects and its study of the energy and mineral resources of Canada is the definitive work on the subject. In process now are studies on agriculture, water resources and coal. Valuable though it is, Canada West Foundation, as Mr. Child himself has described it, is "an elitist organization" because it is small and highly specialized. Nonetheless, it is not a closed organization and its executive director, L. A. Thorssen, recognizes that a wider approach is necessary for material and human development and says: a co-ordinated and well-planned, total Canadian strategy could provide all Canadians with an enhanced quality of life.

The aims of the organization I envisage are contained in the name I am proposing: a Western Canada Development Centre. For me the word development signifies not only things but persons. Development means not only acquisition but victory over social scourges; the growth of knowledge, an expression of culture. Development is a whole. It is an integral, value-loaded, cultural process. It encompasses the natural environment, social relations, education, production, consumption and wellbeing. The development I seek for western Canada is an integral humanism. This requires the involvement of business, churches, universities, ethnic groups, credit unions, social agencies and others.
I should like to refer to one example of a human problem looming in the west. An economic boom has traditionally meant jobs. The trek of the unemployed to the west is well under way, but the chief characteristic of the new boom is that it is capital intensive and not labour intensive.


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


Some hon. Members:: Agreed.


Douglas Roche: Mr. Speaker, I thank hon. members for their co-operation. The major projects require more than $1 million of investment for each job created. Because of the boom, people are trekking west for jobs only to find that it is a capital intensive boom and not the kind which creates many permanent jobs. Construction jobs to start up resource extraction are short lived. No wonder the Alberta labour movement wants permanent secure jobs which will allow the work force to live the kind of meaningful, dignified, and orderly community life which we all have the full right to expect. I believe the answer to this problem is found in the housing construction industry, which is the greatest source of long term jobs.
Family formation and earning power are strong factors in the west. What is needed to stimulate the housing industry is better mortgage financing and more government action to make land available for housing. There is a joint responsibility of private enterprise and government to do an in depth assessment of the kind of industrial growth which will support future breadwinners and be good for family life. That is one example to indicate the integration between economic and social development. On one hand, the economic factors which have led to this boom are studied and, on the other hand, what the boom does to family life is studied, as well as what should be done to help family life achieve the true benefits of the boom.
In this new economic era the west will be challenged as never before to create secure jobs and to maintain stable communities. Public participation in the work of the Western Canada Development Centre is therefore essential. This can best be promoted through the publication of an annual report on the west by the development centre, which would provide the basis for an annual public conference to enable a flow of ideas and reactions concerning western growth to reach gov-
February 20, 1978

eminent leaders. Parenthetically, should the west really have to depend on the eastern based Financial Post to hold a conference in the west to tell them about themselves?
It is possible to tap the knowledge and wisdom of a wide range of individuals and organizations in western Canada whose common goal would be to promote the development of the new west as a centre of excellence. Canada West Foundation could indeed be a core group. The information already acquired on the people, land and heritage of the west by the Canadian Plains Research Centre at the University of Regina would surely be a valuable academic basis.
With a credible community base, a flow of funding should be available from the federal, western provincial and northern governments, business, labour and academic bodies. It is in the interests of all these groups to continue and enlarge the process of co-operation which was begun early in this decade. It is especially in the interest of the federal government for such a western Canada Development Centre to come into being because in the future our confederation will undoubtedly see wider sharing of jurisdiction between Ottawa and the provinces. The west wants not only a marked reduction in interference by the federal government but a shift westward in decision-making on public policy. As the west becomes a stronger component of Canada, our entire country benefits. The improvements in the quality of life which will come about through integrated economic and social planning in the west will benefit surely our whole people. The role of the federal government, then, is to leave the management of those centres to the local people.
The complexity of modern government has often been called a jungle. Here is a way to promote co-operative federalism, at the same time as restoring the belief of people that they can share in creating their own future.


Some hon. Members:: Hear, hear!


Mr. Cliff Mclsaac (Battleford-Kindersley):: Mr. Speaker, I congratulate the hon. member for Edmonton-Strathcona (Mr. Roche) for his very thoughtful and excellent presentation on the subject of his motion before the House today. His speech reflects his very genuine and deep concern for the improvement and betterment of human opportunity in western Canada, as well as elsewhere in the world. His speech was very worth while, although it was somewhat in a different direction than I anticipated when 1 looked at motion No. 12. Perhaps that is a reflection of our experience in this place where we tend to look more at hardware and economic aspects of development.
The debate which is ongoing now as to whether there should be a pipeline and, if so, on what terms, etc., is an important aspect of the development in western Canada, from which flow many of the social problems that were highlighted, pinpointed, ant outlined so clearly in the hon. member's remarks. He touched upon problems common to all prairie provinces, as well as British Columbia. Perhaps these problems are more common to Alberta, and if some of my references stem from
Western Canada Development Centre my somewhat better knowledge of Saskatchewan than Alberta, I am sure the hon. member will understand that.
The hon. member is attempting to provide a format for a human resource development effort which will parallel the natural resource development taking place in the new western Canada. He elaborated by giving a number of specific examples of that. One point which clearly comes to mind with respect to Saskatchewan-and perhaps to a lesser proportion and extent in Alberta and Manitoba-is the growth in the population of Indian, Metis and native people in northern centres all across the northland of the prairies. These people are seeking jobs and economic opportunities on their own home ground. Despite all of the economic activity ongoing in western Canada, the federal and provincial governments have not yet been able to incorporate those people into some of that economic development. There are problems concerning different value systems, traditional lifestyles and so on. All of these things tend to complicate the situation.
Society has tended to resort to the modern day solution of more welfare and more income support, which is not the correct direction. Many of the present day leaders of the native people are very much aware of that fact and are looking to the federal government, provincial agencies and other agencies for the correction of that particular direction. Whether it is through an agency such as that proposed by the hon. member or not, I hope something is achieved.
1 support the objectives and the theme put forward by my hon. friend, although I expected his remarks to relate more to hardware and economic aspects. I am not convinced that the western Canada development centre he proposes is the best route. Having said that, I have no better alternative to offer. I suppose some of my reservations stem from the fact that I have watched both federal and provincial governments for a number of years, and I tend to be a bit cynical when we set up more and more structures, agencies and frameworks. We have many of them in place now, and one problem referred to at the conclusion of my hon. friend's remarks was the problem of a jungle of agencies, whether they be governmental, intergovernmental, private or whatever. The public is confused by the wide variety and scope of agencies. Hence, my concern is whether another major agency covering a broad range of activities and interests would highlight the problems and zero in on them. Would it work fast enough and soon enough? Perhaps an expansion of some of the present agencies would be beneficial.
I recall that the Saskatchewan Research Council at one time was looking very hard at whether it should expand into the social side of things as well as looking at research only from the point of view of economics, pipelines for solids and other topics which had been studied and worked on by both the Alberta and Saskatchewan Research Councils. They were trying to decide whether there should be some mixing of the social problems referred to in this debate. That was explored

February 20, 1978
Western Canada Development Centre
but was not proceeded with, unless that has been done in the last year or so.
As far as the agency being a western Canadian agency is concerned, I support that. As a matter of fact, at the present time the federal government, the Minister of Transport (Mr. Lang), the western premiers and western farm groups are considering the advisability of establishing a prairie rail authority which would handle some of the functions which are now in the hands of the Canadian Transport Commission. In other words, it would bring a better regional flavour and hopefully a better regional appreciation to the problems of rail and railroads in western Canada. If that idea goes forward, there is a precedent in that respect, perhaps not in the same sense that Judge Hall and his commission reported on, but something close to that idea, although expanded somewhat. Here again we have the concept of a former all-federal agency being broken down to look at western Canada alone.
The pipeline debate indicates the very timely nature of this motion. My hon. friend outlined a number of other energy related projects, the magnitude of which is very difficult for most of us here or most Canadians in the west, in the east or in central Canada to comprehend fully. If we are going to proceed with such a centre, I am convinced that it must be a top notch, high calibre institution comprising very capable people who have earned their credentials elsewhere. This is necessary if their work or pronouncements are to have any real effect. Anything less would be of no real value. We have had enough ministerial committees, subcommittees, ad hoc committees and so forth. Some of that is necessary on a time to time basis, there is no question about that; but if this agency is to do the job my hon. friend holds out for it-and I share his objectives-it has to be an agency with some real statute. Of course, that will not happen overnight. That will take some time to develop, but I suppose a beginning must be made somewhere.
Perhaps there is a lack of private, independent spokesmen or agencies in the social field. We can look to the Science Council of Canada, to the Economic Council of Canada, or to the Conference Board. There are a number of agencies in the economic field, but there is not a long list of primarily social agencies, at least any which have any tremendous clout. There are federal energy regulatory bodies, provincial energy regulatory bodies and so forth. As everyone recognizes, the track record of those bodies with regard to energy supplies over the last few years has certainly not been good. The entire energy picture in this country was clouded, first of all, by the OPEC cartel of several years ago which brought about dramatic increases in prices which, in turn, brought about bickering and fighting between the federal and provincial governments about who should get all or most of the tax revenues from the various resource companies. That has tended to cloud the whole question of energy development in the country over the last few years.
Again I compliment the hon. member for raising the social side of the whole question. As far as western regional matters are concerned, I think we have done not too badly. We can

look back to the PFRA of the 1930s. We can look to the Prairie Economic Council of 1965. I was with the provincial government of Saskatchewan when the first meeting was held. It was interesting to see premiers of diverse political views at that time-and that has not changed very much since- continuing that work and that liaison. We can look to what has resulted from those beginnings. We now see the premiers of the prairie provinces getting together. The PFRA and the concerted efforts of those years were seen again last year when it did not take the various governments and federal authorities very long to zero in on the 1977 drought threat which faced many parts of western Canada. The machinery was there. Work experience and the idea of getting together to tackle problems were not new to anyone.
Another agency which has come along but perhaps has not yet zeroed in on the social side of development in western Canada or, indeed, elsewhere in Canada, is the federal Department of Regional Economic Expansion which, as hon. members know, was set up in 1969. DREE has zeroed in on specific industrial enterprises and assistance in terms of job creation. It has gone a considerable distance. The general development agreement is now signed with each province. We can go from there and point out specific things, such as a coal agreement with respect to British Columbia and a steel agreement related to Saskatchewan. The development of Ipsco has been timely because that company is now in a position, if there is further expansion, to take advantage of some of the opportunities which will be coming to western Canada if the pipeline project is proceeded with. That is another example of federal-provincial co-operation. It is the result of effort and study on the part not only of provincial and federal governments but also of other groups and agencies located in the prairie provinces. I think we should give some credit to officials in the Department of Regional Economic Expansion for developments in this area in recent years.
[DOT] (W42)
My hon. friend referred to the conference that took place in Lethbridge. I believe the mere fact that people came together and discussed the various subjects that came up without concern about provincial rights and so forth is a good omen. The Western Economic Opportunities Conference was mentioned as well. That was also the product of hard work and effort on the part of everyone concerned. Of course, like the conference that took place just last week, it could be called either a success or a failure, but I believe the WEOC which took place in Calgary in 1973 was a good beginning. A number of good things came out of that conference and action is being taken in many areas, such as transportation, agriculture and the western Canada northland agreement in the three provinces. These are what we might call "hardware" programs even though some are related to energy. But they create a climate for co-operation.
I should like to turn to my personal concern about whether an agency of the type suggested by my hon. friend will ever be established. I think we need to hear from the provincial governments and their agencies as well as the Canada West
February 20, 1978

Foundation as to whether they support this concept or would rather expand existing machinery. I cannot help but be a little concerned about establishing a sort of blanket agency. I think something with clear-cut objectives would have more chance of success. I support the concept in principle, however, although I think it needs further consideration about whether it is the correct route to follow. I commend the hon. member for bringing the motion forward and I hope the idea can be pursued not only in this House but in other fora.


Stanley Howard Knowles: Mr. Speaker, there is a sense in which the debate this afternoon is typical of the kinds of debates we have in private members' hour. The hon. member for Edmonton-Strathcona (Mr. Roche), a member of the opposition, has put forward an excellent idea and backed it with a very effective speech. The hon. member for Battleford-Kindersley (Mr. Mclsaac), a member for the government, has found no course but to agree with the ideas put forward. In fact, his speech was also a very good one in which he strengthened the case; but in the end he says he is not sure that we should let the motion pass because, in his view, it sets up another body or agency. I suppose that means that my hon. friend from Edmonton-Strathcona will get praise for the rest of the afternoon but that at six o'clock the motion will not be passed; it will be talked out.
Not only do I think the motion is a good one and that the hon. member for Edmonton-Strathcona made an excellent speech, but I believe the House ought to pass the motion this afternoon. I emphasize that even if it were passed it would not set up the development centre. All it would do is to express the opinion of the House. It would be up to the government whether it acted on that opinion.
As for the criticisms from across the way to the effect that the motion seemed to talk too much in terms of hardware, I emphasize that the gist of the motion was to have an institute that would be concerned about policies to ensure integrated, economic and social development in western Canada. The whole proposal is concerned with the quality of life as opposed to the hardware that dominates the way we live.
I am reminded of the debate we had seven days ago on the motion presented by the hon. member for Grenville-Carleton (Mr. Baker)-one that used to be presented from time to time by the former member for Malpeque, Angus MacLean. In that case, he was concerned about a certain aspect of life, namely the environment; he was concerned because of what it does to the quality of life.
This afternoon the hon. member for Edmonton-Strathcona is likewise concerned about the quality of life. I thought his dissertation was first rate when he tried to find a balance between the material and the spiritual, between whether we should try to get individuals to become perfect or reform society to make it possible for us to become individuals. I subscribe to the philosophy he presented. If I might be so presumptuous as to sum up what he said, he was saying that man cannot live by bread alone, but man cannot live at all if there is no bread, and perhaps there has to be a quite a bit of bread if we are to have the kind of life that is possible today.
Western Canada Development Centre
As the hon. member for Battleford-Kindersley pointed out, there are plenty of agencies that deal with so-called hardware matters-the Economic Council of Canada, the Conference Board in Canada and various research bodies. The country is full of them. But there are not very many instances where studies are made, under government auspices, of what our economic development is doing to the quality of life of human beings in this country.
I belong to a generation that long ago was deeply concerned about the indignities human beings were suffering because economics went completely haywire. I think I can say for that generation that in our younger days we were determined not only to solve the economic problems but to build the kind of Canada in which human beings would not suffer the terrible indignities and heartbreaks that we went through in a decade, four or five decades ago.
I believe that today, even with the greater affluence that is around, mixed as it is with unemployment, there is a subconscious realization that we have to build not only railroads, pipelines, transportation and all the rest, but also a real quality of life. It would not hurt us in this House this afternoon to pass a motion saying that, in our view, the government ought to consider setting up a western Canada development centre to be concerned about the quality of life in this new and growing part of the country. I am pleased with the speech my hon. friend made this afternoon. I support his motion.


Arnold John Malone: Mr. Speaker, my remarks will be brief because, like the hon. member for Winnipeg North Centre (Mr. Knowles), I should like to see this motion come to a vote and pass. All three parties have expressed the opinion that this is a very reasoned and responsible motion, with a well thought out and researched speech delivered by the hon. member for Edmonton-Strathcona (Mr. Roche).
It would be appropriate for me to try to qualify what are a couple of misconceptions put forward by the hon. member for Battleford-Kindersley (Mr. Mclsaac). I want to commend him because his reply to the motion was responsible comment and his reasoning was one that we on this side of the House would want to applaud. He said that one of the things in this country which we do not need is a proliferation of agencies; that is not a direct quote but the gist of his remarks. It is also the mutual feeling of the majority of members in this House.
There is a misunderstanding of what the hon. member for Edmonton-Strathcona is trying to propose in motion No. 12 today. First of all, he is asking the government to give consideration to establishing such an agency, which would be an all encompassing group, but in essence its input would be from the grassroots and from the conferences the agency would hold throughout the provinces. In other words, it is not an attempt to establish something that is bureaucratic in nature, but rather is information collection for recommendation to governments at all three levels.

February 20, 1978
Western Canada Development Centre
Because that is the principle, we are not looking at something we can really refer to as being of bureaucratic nature. It is not an attempt to establish some new branch or department of the government. It is not an attempt to develop a several tiered bureaucracy. It is simply a case of trying to establish an agency which sets up a mode of communication through which the people of western Canada can touch bases with governments at all levels.
I have several pages of notes, but I do not want to delay a vote on this issue. I just want to illustrate one example of the importance of what the member for Edmonton-Strathcona has been saying. We have talked about the pipeline labour pressure. We predict they will be there with the pipeline coming from Alaska, the Yukon and the province of Alberta and with it its accompanying influx of labour. Fort McMurray is a town in the province of Alberta. Fort McMurray is a wealthy town with a lot of money per capita. There is a very high ratio of males over females. It is also a place no one really calls home. In the supermarkets, stores and hotels of Fort McMurray, people when they meet and greet each other ask: "Where are you from?" The answer will be that they are from Oklahoma, Texas, Ontario, and so on. They are not from Fort McMurray. Many of these people have lived there five, six and 10 years, but they do not think of it as home. The result is a community with a lot of money, and unbalanced sex ratio and a high crime rate. It houses one of the busiest police forces in Alberta. That is one example of an economic boom taking place without concern for the social stress that it will cause for a community.
I would like to conclude by asking that all members of this House cease speaking at this time and let come to a vote a very worthy and justifiable motion, one that should receive the consideration of this House.


Mr. Hugh A. Anderson (Parliamentary Secretary to Minister of Fisheries and the Environment):: Mr. Speaker, I would also like to compliment the hon. member for Edmonton-Strathcona (Mr. Roche) for the second point which he stressed in his dissertation, that being the quality of life. Many of us in this House do not consider that question as much as we should. I congratulate him for his continuing interest in an area which I consider important.
Someone said to me a short while ago: "There is an interesting situation that is happening in this world, Mr. Anderson. We have aircraft which can fly at twice the speed of sound. One can fly from Paris to New York in four hours and save five or six hours in travelling time. What is the point in getting there that fast if when you arrive you have no purpose in being there early?" In other words, we have developed a society where technology perhaps has outpaced our values in life. As a result, some things happen in society as a result of our not paying attention to the quality of life which the hon. member has stressed.
I agree with the comment which the hon. member for Battleford-Kindersley (Mr. Mclsaac) made that there has been a long history of co-operation in western Canada. There has had to be, I suppose. It was the situation of necessity being the mother of invention. It is also true that the west has not

had the same amount of economic clout and attention which central Canada has had for a number of years. I can understand why that economic clout has not been there. The day is coming where the centre of gravity in this country will move to the west. The potential of the west is being realized. The hon. member is right in pointing out that as a shift occurs there must be more attention paid to the area which has not received the same amount of attention from various groups-the Economic Council of Canada, for instance.
In the province of British Columbia we have a grassroots situation where regional districts are being funded by DREE. Economic advisers are paid for by the federal government so that at the regional level as well as at the municipal and city level there are people making decisions in small communities which are appropriate only to their own area. Councils, regional districts, municipalities, provinces and the federal government are all becoming involved in a variety of economic chores and economic decisions which each one has to make in its own sphere of activity. At this point is it wise to bring in a further group?
I am not speaking against this suggestion, but I am saying we have these groups established at the present time. Should we have another body involved in economic decisions in western Canada? The hon. member for Edmonton-Strathcona realizes the difficulty we have in getting provinces to agree with the federal government. We are aware also of the sometimes confrontation situation that exists between provincial and municipal governments. And now, in the case of British Columbia, we have regional districts, which is another form of government.
1 wonder if, in view of the good intentions of the proposals in the motion the hon. member has put forward, he has a solution-


Some hon. Members:: Question.


Lincoln MacCauley Alexander: You are talking it out, sir.


Mr. Deputy Speaker:: Order, please. I regret to interrupt the hon. member. The hour allotted for the consideration of private members' business has expired. I do now leave the chair until eight o'clock tonight.
At six o'clock the House took recess.


[Stage Direction]
AFTER RECESS

The House resumed at 8 p.m.
February 20, 1978


[Stage Direction]
The House resumed consideration of the motion of Mr. MacEachen that Bill C-25, to establish the Northern Pipeline Agency, to facilitate the planning and construction of a pipeline for the transmission of natural gas from Alaska and northern Canada and to give effect to an agreement between Canada and the United States of America on principles applicable to such a pipeline and to amend certain acts in relation thereto, be read the second time and referred to the special committee on a northern gas pipeline.
Walter (Wally) Firth: Mr. Speaker, in my earlier remarks on Bill C-25, I referred to the Lysyk report. I asked questions regarding the second stage inquiry. Evidently we are not going to get this. The second study to be conducted by the pipeline monitoring agency is not the type of second stage inquiry that the Canadian people, specifically those in the Yukon, were promised.
The second question I asked was what had happened to the strong, unanimous recommendation that, in order to avoid prejudice to a just settlement of the Yukon Indian land claims, pipeline construction should not proceed before August 1, 1981. If those in the government and the people to my right have their way, construction will begin prior to that. Indeed, judging from their remarks, many of those to my right would like to see the building of that pipeline start tomorrow morning. Settlement of the land claims will not be accorded the priority and urgency they deserve.
Third, what happened to the $200 million heritage fund which was recommended by the National Energy Board? We did not get that. Instead, the people in the Yukon got the right to borrow up to $200 million. They will have to pay interest on that loan. I do not know what the people in the Yukon can expect other than, as I mentioned earlier, the building of this pipeline through their territory and not too much good along with it.
There is provision in the legislation for the establishment of an agency to monitor construction of the pipeline. Such an agency was called for by the Lysyk inquiry and by the leader of my party when we supported the Alcan proposal in principle last August. At that time we demanded as much public input and scrutiny over the project as possible. However, the monitoring agency which this bill proposes is not at all what we had in mind.
What we will get is another government body responsible to a minister. We will get a group of bureaucrats in Ottawa & Calgary who will operate beyond the scrutiny of parliament. What we will have is a very powerful instrument in the hands of the government, with a very limited appeal procedure which stops at the Federal Court.
Northern Pipeline
What is missing from this legislation is far more important than what is included. We do not have the grassroots participation of those in the Yukon in the monitoring agency. We do not have massive participation on the part of the Yukon people or on the part of people along the route of this pipeline.
There is no public involvement in the establishment of the conditions and terms of this agency. Instead, there is token participation on the advisory council. I am afraid as much attention will be paid to the advisory council as was paid to the recommendations of the Lysyk inquiry. I ask: How is this agency going to protect the rights of Yukoners? What steps will be taken to prevent environmental damage? How will the agency be staffed?
Will the government appoint as commissioner a person who has good understanding of the northern people and of the land of the north as well as having proven administrative capabilities? I think, for example, of Mr. Stewart Hodgson who is presently Commissioner of the Northwest Territories. I believe the government should have a talk with him and find out whether he would agree to take this position. If he did, it would create a vacancy in the administration of the Northwest Territories. The government could then move to bring in legislation whereby the position of Commissioner would be up for election. This would mean a greater degree of autonomy for the Northwest Territories. If the present Commissioner would like to head up this monitoring agency, I think he would do a good job.
What of native claims? The legislation makes no mention of them. During the debate in the Commons on August 4 and 5 last, concerning a northern gas pipeline, my party moved an amendment to the motion before the House as follows:
That no pipeline construction precede a fair settlement of native land claims.
That is still our position. As things stand, the Yukon Indians are being asked to negotiate under duress. I would draw your attention, Mr. Speaker, to a statement made by the United States secretary for energy on September 23, 1977:
The Canadian government has made a clear public statement that settlement of native claims in the Yukon will neither delay the project nor increase costs.
I need not repeat the recommendation of the Lysyk inquiry with regard to native claims. As recently as January 25 of this year I sought to move under the provisions of Standing Order
43:
That this House is of the opinion that the government should begin negotiations immediately with a view to settling the land claims of the Yukon native Indians in principle prior to the commencement of the construction of the proposed northern pipeline.
Again I strongly urge the government to reach a settlement in principle with the Yukon Indians as soon as possible. This should be done not only quickly but efficiently and to the satisfaction of all parties. I cannot help thinking of the recent first ministers' conference which was held here in Ottawa recently. Although major topics were under discussion, northerners were not represented at the conference. The government continues to treat the northern territories as colonies to use as

February 20, 1978
Northern Pipeline
Ottawa sees fit. The elected councillors in the Yukon and in the Territories are not treated by the government as governments but as an administrative extension of the federal department concerned. This is not satisfactory to the people who live in the north.
Finally, since the government and hon. members to my right are determined to build this pipeline regardless of the adverse effects the project will have on the Yukon, I can only say that the bill in its present form is a shameful piece of legislation. The long term effects will be seen in the years to come and I am not at all sure they will be anything to be proud of. Surely, legislation could be brought down which would be responsive to the concerns and needs of northerners. My hon. friends and I will continue to speak out on their behalf.
Has the government really thought about the way in which the lives of the people in the north will be affected by the Alcan project? There are a number of guarantees which should have been written into this bill. My leader has been talking about one of them across the country for months. I refer to a guarantee of jobs. Guarantees should have been written into the legislation ensuring first priority for the people of the north-and here I am talking not only of the population of the Yukon but of those who live along the Mackenzie Valley. Arrangements should have been made for the shuttling of workers between the Mackenzie, the Western Arctic, the Arctic in general and the Yukon. Travel facilities should be upgraded. Improvements should be made at a number of airports. We need more VOR's as soon as possible to improve the safety of navigation, particularly one at Mayo and another at Fort McPherson. Also, I think it is necessary that the Alaska Highway be paved. The United States should be asked to defray a good deal of this expense because Alaskans make a lot more use of the highway than does the Canadian public. The highway will be used very heavily during the construction of the pipeline.


Hon. Jack H. Horner (Minister of Industry, Trade and Commerce):: Mr. Speaker, I can assure you and the House that although I have not been in the chamber for much of this debate I have been following it very closely and have read many of the speeches which have been made. I listened to most of the debate on the northern Canadian pipeline last August and I was particularly unimpressed by the ability of some hon. members to sit on the fence to determine what decision would be made, so that they could rely on their ability to be in a position to criticize. I recall in particular the speech made by the hon. member for Yukon (Mr. Nielsen). After he had finished I found myself wondering whether he was for or against a pipeline.


Erik Nielsen: That was the way you used to be in caucus!


John (Jack) Henry Horner: 1 listened to the hon. member for the Northwest Territories (Mr. Firth). He was against the bill. He thought it was a terrible agreement. Then he ended up by saying he wanted to have the jobs. Well, it is hard to have the jobs without the project.

I sympathize with the hon. member for Yukon because in his speech to the House of Commons he demonstrated beautifully the difference that exists between one who is in the opposition and one who is in the government making decisions. He likes being a member of parliament and he would like to take part in making decisions, but he does not really want any of the responsibilities involved in making the decision as to whether or not a pipeline should go through the Yukon. That was clearly evident in his speech made in August.
The main thrust of his speech to the House was to require the pipeline authorities to report to a parliamentary committee every three months.


Erik Nielsen: That is what you once wanted.


John (Jack) Henry Horner: In my opinion, Mr. Speaker, we have had too many regulations and controls in the private sector in the past number of years.


Some hon. Members:: Oh, oh!


John (Jack) Henry Horner: I have consistently attempted to remove many of the regulations and controls and to let people get on with their work. The government has made the decision that there will be a northern pipeline going through Canada delivering American and Canadian gas. Parliament can question that decision, but surely requiring pipeline authorities to report to a parliamentary committee on a quarterly basis would only hinder and handicap the building of this pipeline. Certainly, once the pipeline is built, if the hon. member for Yukon wants to set up a task force to inquire into whether or not the pipeline is well built and whether or not overruns were necessary, he has the right to ask for it and it is within the jurisdiction of the government to grant such a request. But I do not see the necessity for the business community, the financial community and the pipeline authorities to run to parliament every three months asking: "Mother, is it all okay?" I want to say to them: "It is your responsibility to build the pipeline. Build it under the criteria established and we trust you will do a good job".


Some hon. Members:: Oh, oh!


The Acting Speaker (Mr. Turner):: Order, please. The minister has the floor. I suggest we all listen.


Some hon. Members:: Hear, hear!


John (Jack) Henry Horner: The agency we are setting up will do an admirable job in policing the work and ensuring that the pipeline is built to the specifications laid down in the agreement.
With regard to the speech made in the House by the hon. member for Nanaimo-Cowichan-The Islands (Mr. Douglas), my only regret is that I was not present in the House to hear it. I would call it one of those terrific speeches of which the hon. member has been capable during his long career in politics in the last 40 or so years. He was at his best in that speech. He
February 20, 1978

lamented the fact that we in Canada were the little guys, that those terrible Americans, our enemies, were the big guys and there was no way we could make a deal which would benefit us, the little guys. If they were hard bargainers, he said, then you would know because they would have stolen your shirt, or something like that. It was a typical speech of the kind he used to make in his early days in Saskatchewan when he was premier of that province. He continues to be afraid of development, fearful of being the small participant who might eventually be robbed by the big guy.
His party speaks of creating jobs. No other province in Canada lost more jobs than Saskatchewan when the hon. member was premier of that province in the early days of his premiership. They left in droves. I cannot believe he was particularly concerned about jobs at that time. Nor does he seem to be concerned about them now. He is still, as he was in those days, a tremendously entertaining speaker, a very concerned member, but has little confidence in Canada and Canadians and in our ability to deal with those who may appear to be bigger than we are.
I read the speech of the hon. member for Lambton-Kent (Mr. Holmes) with regard to native claims. I looked through it carefully in search of his solution to that difficult problem, but I failed to find it. He dealt with the subject but failed to come up with a solution. It is easy to complain about a problem. It is far more difficult to find a solution to it. I admit the problem is a difficult one.
Last but not least I come to the hon. member for Oshawa-Whitby (Mr. Broadbent). He has been crying out in the House for jobs, more jobs, yet his party cannot even say whether or not they are in favour of the pipeline agreement. The NDP must make up its mind. Do they want to see development, do they want to see Canada make the best of what we have available so that we can enjoy some of the benefits that jobs can bring?
The hon. member has tried his utmost to create a climate of insecurity and instability with regard to the building of the pipeline. He lamented at length the small Canadian content in the project and spoke about the big steel corporations in Canada not being capable of meeting world competition. Yet if we give the big steel corporations a chance to make a profit, he will be the first to claim on the hustings that they ripped us off in some way or another. His lamenting is discouraging investment in Canada, and yet it is investment in this as in many other projects that is needed to create the jobs to employ those who need work today.
Let us look at this decision to build the pipeline. There is no question in my mind that one of the reasons for choosing the Alcan route is that it would make more jobs available to Canadians.


Erik Nielsen: That is not what you said in Inuvik.


John (Jack) Henry Horner: I am telling the hon. member why the decision was made. If he does not like to hear it, he can go back to the Yukon.


Some hon. Members:: Hear, hear!
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John (Jack) Henry Horner: There is no doubt in my mind that one of the reasons the Alcan route was chosen was to ensure that the maximum number of Canadian jobs would be provided. I am certain that Canada has both the management and the engineering capability to carry out this project as well as other such major projects. Major contractor groups in charge of design, procurement and construction and major pipeline operating companies are available in Canada to perform these tasks. More practical pipelining and northern experience is available in Canada than anywhere else in the world.
The magnitude of the projects and the anticipated difficulty of construction provide a significant opportunity to Canadian industry. The proven capability of Canadian firms in the international marketplace would be enhanced by their successful completion of this project. I should emphasize the last sentence, because it is important for us all to contribute to the successful building of this pipeline now that we are about to embark on it. It can only benefit our nation if we can assure the world that we can undertake projects of this magnitude and succeed in carrying them out.


Erik Nielsen: Put on your hard hat, Jack.


John (Jack) Henry Horner: The hon. member suggests I put on my hard hat. Let me inform him that I am a competent welder and could well be in the Yukon making big money in that capacity.


Some hon. Members:: Hear, hear!


Erik Nielsen: You've got a hard enough head for it.


John (Jack) Henry Horner: There has been much talk about Canadian content. The hon. member for the Northwest Territories spoke about the 200 man agency which will be set up. I should like to assure hon. members that the machinery division in my department will be working in close conjunction with that agency to ensure the maximum Canadian content in the pipeline project.


Lincoln MacCauley Alexander: How do you ensure that? I want to hear it, Sir.


John (Jack) Henry Horner: Countervailing duties could be imposed on those imports which benefit from export credit subsidies from the exporting country. A regulation promulgated only in the last year or so permits Revenue Canada to impose countervailing duties in such cases. In this regard 1 am particularly referring to DISC and the advantage a competing company may have in bidding on pipe for this job in Canada. We could set that advantage aside. In essence, I think that was what the hon. member for Nanaimo-Cowichan-The Islands (Mr. Douglas) was worried about.
Action under the Anti-dumping Act could be taken in cases where exports into Canada are financed under more favourable terms than are available to the foreign manufacturer for its domestic sales. Under regulation (11 A) of the Anti-dumping regulations, credit and other financing terms can be taken into account in determining the normal value, export price,

February 20, 1978
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and, hence, the margins of dumping under the meaning of the act.
It should be noted that neither (11A) of the Anti-dumping regulations nor the imposition of countervailing duties for reasons of export financing subsidies appear to have been tested as yet. Moreover, the anti-dumping option would really only come into play after the fact, which renders its use, other than as a threat mechanism, somewhat ineffective.
Let me say too that the northern gas pipeline project is primarily intended to deliver gas to U.S. customers. Therefore, there should be little or no subsidization of U.S. consumers through the mechanism of financing the construction of the pipeline. It is not in the interests of the Canadian and U.S. governments to subsidize their own consumers in respect of energy costs at a time when it is the policy of both governments to emphasize energy conservation and discourage energy use wherever possible. For the United States to provide concessional financing through the Export Import Bank on the grounds that the transit pipeline is in another country would be contrary to the policy objective.
The main section of the northern gas pipeline to be built in Canada is being designed to accommodate-this was spoken about before and I am attempting to cover those things which were not covered as yet-2.4 Bcf of Alaskan gas and 1.2 Bcf of Canadian gas to the southern markets. The Prudhoe Bay supply will represent approximately 5 per cent of U.S. consumption. Canada is currently producing about 8.5 Bcfs a day of natural gas, 2.7 BcFs of which are exported to the United States.


An hon. Member:: What does "Bcf' mean, Jack?


John (Jack) Henry Horner: You should know. The total system, excluding the Dempster lateral, will consist of some 4,700 miles of pipeline, 2,000 in Canada, 700 in Alaska and 2,000 in the lower 48 states. On that point, let me point out quite clearly what the 56-inch diameter pipeline really means. From the Alaska-Yukon border it is estimated that the line will be 48 inches in diameter, .54 inches thick, a distance of 265.6 miles with a total tonnage of 191,917. From Whitehorse to James River the pipe will be 56-inch diameter, .54 inches thick for a distance of 1,080 miles with a total tonnage of 912,000. The pipeline from James River to Monchy-and this is a point I would like to bring to the attention of those who are concerned about 56-inch diameter pipe-will be 42-inch diameter, .473 inches thick for a distance of 394.6 miles with a total tonnage of 218,486.
I might add for the benefit of those yapping jackals over there that-


Some hon. Members:: Oh, oh!


Lincoln MacCauley Alexander: On a question of privilege, Mr. Speaker.


John (Jack) Henry Horner: -the Stelco steel mill at Camrose is quite capable of rolling-


Some hon. Members:: Oh, oh!


The Acting Speaker (Mr. Turner):: Order. I suggest we listen to the minister.


Some hon. Members:: Hear, hear!


Lincoln MacCauley Alexander: Did you hear what he called us?


John (Jack) Henry Horner: I might add, Mr. Speaker, for those who appear to find this whole subject matter rather humorous, the 42-inch line from James River to Monchy, a distance of 394 miles, could quite conceivably be rolled at the Camrose steel mill. Camrose being in the new constituency of Crowfoot, of which I am the member, naturally I am interested in that.


Some hon. Members:: Oh, oh!


John (Jack) Henry Horner: From James River to Kingsgate the pipe diameter is estimated to be 36 inches, .405 inches in thickness, a distance of 281 miles with a total tonnage of 114,457. One can readily see that there is something in the neighbourhood of 700 miles of the 2,000 miles of pipe in Canada less than 56 inches in diameter and which could quite conceivably be rolled by some of the smaller pipe rolling mills, one in Edmonton and the other in Camrose, as I suggested.


An hon. Member:: Who wrote this, Jack?


John (Jack) Henry Horner: Wouldn't you be surprised. The hon. member for Calgary South (Mr. Bawden) flatters me by suggesting that I am reading a speech this well. That is a compliment, because-


Stanley Howard Knowles: You can't read!


Some hon. Members:: Oh, oh!


John (Jack) Henry Horner: Because I can't read, you are right. I suppose that, because it is flowing from me so well, this tends to make the hon. member think I am reading, but it is just that I know the subject that well.


Some hon. Members:: Oh, oh!


John (Jack) Henry Horner: The interesting thing to me, which I wanted to point out, has reference to the manufacturing content of this pipeline. As I just pointed out, about one-third of the pipeline, in fact about one-half if you add it up, will consist of pipe less than 56 inches in diameter.


An hon. Member:: Say that again.


John (Jack) Henry Horner: About half of the length of the pipeline will be less than or about 56 inches in diameter. The total rolling of the pipeline will represent only 58 per cent of total manufacturing involved in constructing the pipeline.


An hon. Member:: How much of it is going to be laid?


John (Jack) Henry Horner: I would like to think that the hon. member would realize that if you are building a pipeline the whole distance has to be laid before it can be used.


Some hon. Members:: Oh, oh!
February 20, 1978


An hon. Member:: That's a little difficult for them to understand.


John (Jack) Henry Horner: There are many other component manufacturing parts that go into the building of a pipeline which should be of great interest to Canada in that they will create a great many jobs in many parts of Canada, some as far away from the pipeline as Nova Scotia. I am thinking particularly of compressors, valves, pipeline fittings and other things. The main line compressors will amount to something over 7 per cent of the total manufacturing bill of the pipeline itself. There are also generators, compressors and turbines required to move the gas, all of which are within the capability of Canadian manufacturers to make. We also require refrigeration units for that part of the pipeline which has to be in the permafrost area. We also require coating on the inside of the pipe, which can and will be done in Canada. We require coating on the outside of the large diameter pipe, and Canadian manufacturers have the capability of doing that. This will also be done in Canada.


Mr. Benjamin:: "Liberal sugar coating".


John (Jack) Henry Horner: The hon. member suggests that these are both "sugar" coatings. I suppose in the mind of someone inexperienced they are something like that, but they are far more permanent than a little bit of sweetness. The pipeline and the manufacturing of the pipe means a great deal to Canada. The pipe manufacturing accounts for approximately 58 per cent of the total manufacturing bill. It is one more thing the Canadian steel industry is capable of doing.
The total amount of tonnage required will be 1,436,000 tons of steel rail. That steel rail will be required to construct the line with 56-inch pipe. If one refers to the summary of the Canadian primary iron and steel industry, which was prepared by my department seven weeks ago, one will realize that only accounts for 3.5 or 4.1 per cent of the projected Canadian steel consumption. That should give hon. members some idea how large the Canadian steel industry is, how competent it is, and how well it can meet the challenge presented to it by the pipeline bill.
Concern has been expressed as to whether our industry is competent and can compete pricewise. I should like to put some figures on the record in regard to that.


Eldon Mattison Woolliams: Sure you do!


John (Jack) Henry Horner: I know the hon. member for Calgary North (Mr. Woolliams) will be interested. I should like to refer to a document entitled "Historic Price List Relationships For Canadian and U.S. Pipe Mills". With respect to September 1977, 42-inch diameter by .5-


Eldon Mattison Woolliams: By five what?


John (Jack) Henry Horner: By .5 inches. I thought everyone was versed in the terminology. I am sorry if I take it for granted that hon.
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members opposite are as well informed as myself. With respect to September 1977, 42-inch diameter by .5, the Stelco price was $551 per ton and the American price was $646 per ton. Of course, I am rounding these figures off. With respect to the larger pipe, the same difference exists, but it is very difficult to get. Also it is very difficult to get prices from the United States on larger sized pipe because they do not have the capability to roll any pipe larger than 48-inches.
I wanted to draw that to the attention of hon. members to indicate that the Canadian steel mills are competitive with the American ones. Certainly we are prepared to meet that competition. If those who are vitally concerned with the cost of production of steel had looked at the iron and steel industry profile prepared by my department, they would see a table outlining the cost of production. If anyone wants to check my figures, he can turn to page 6 which indicates that Canadian iron ore scrap is indexed at 22.5 and the United States scrap is 23.3; the cost of energy going into making that steel is indexed in Canada at 17.35 and is indexed in the United States at 17.65; labour in Canada is indexed at 23.1 and in the United States is indexed at 27.04; the amortized capital is indexed at 36.81 in Canada and at 31.94 in the United States. Canada falls short in the amortized capital area. This is affected by the amount our steel mills are used in comparison to the American ones, as well as the fact that our mills are new and the ones in the United States are somewhat old. The Americans have lower amortization costs with respect to the manufacture of steel because their mills are used to supply a larger market, are a little older and do not have the same high cost of capital charged against the making of steel.
Those figures indicated that Canada can compete. We have a number of pipe building mills which can compete. Those informed on the subject matter regarding the rolling of large diameter pipe will realize that Stelco may be short of pipe steel. However, this shortage could be offset by the Algoma steel mill in Sault Ste. Marie.
1 look forward to the pipeline going ahead. As the hon. Minister of Energy, Mines and Resources (Mr. Gillespie) pointed out, Canada will benefit a great deal from the construction of the pipeline. It will provide us with an access to Delta gas. Our gas will be brought down from the Delta cheaper than the American gas will. With respect to the benefits alluded to by the hon. member for the Northwest Territories, the pipeline will increase substantially the tax bases of the Yukon, British Columbia and, to a certain extent, Alberta.


Erik Nielsen: You will not let us have them.


John (Jack) Henry Horner: The hon. member indicates that we will not let them have them. We are advancing $200 million on that tax base.


Erik Nielsen: A line of credit.


John (Jack) Henry Horner: One interesting thing about this pipeline in relation to the Alyeska route is that the Alyeska route was taxed at a depreciating value.

February 20, 1978
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Eldon Mattison Woolliams: With Japanese pipe.


John (Jack) Henry Horner: 1 am not talking about the pipe. I wish the hon. member for Calgary North would listen. I was referring to the tax base.


Eldon Mattison Woolliams: You mentioned there was never a pipeline built-


John (Jack) Henry Horner: I said that there had not been a pipeline built with Japanese pipe recently in the province of Alberta. If the hon. member would return to Alberta and inquire about that, he would find out that is true. 1 was dealing with the difference between this pipeline and the Alyeska route. The Alyeska route pays taxes on a depreciating value. This pipeline will pay taxes on an increasing value, because an inflationary factor is built into the capital cost of the pipeline and taxes are charged accordingly. There is no question this pipeline will bring substantial long term benefits to Canada and will bring some immediate benefits to the Canadian manufacturing industry.
From time to time I have heard hon. members opposite express concern. If the House gets on with the job, and the bill reaches committee stage, some advance contracts could be made with the steel-making empire of this country in order for them to commence rolling plate and pipe. We want to see jobs created in this country. We want to see immediate action to create jobs in this country. If hon. members who are demanding jobs in this country want to do something concrete, they could pass this bill. In later years they could look back and realize they knew the bill would create jobs. There are a large number of people unemployed. We should get on with the job and pass this bill. It should be passed through committee stage quickly. All suggestions and advice will be listened to in the House of Commons during the oral question period from time to time. The minister in charge of this pipeline will be more than willing to listen to constructive advice which hon. members opposite may want to lay down.


Arnold John Malone: Mr. Speaker, it is very exciting for me to be able to participate in what is obviously an historic debate.


John (Jack) Henry Horner: I can't hear anybody talking.


Arnold John Malone: This will be the largest project in Canadian history. It will be bigger than the St. Lawrence Seaway. It will be bigger than the construction of the CPR. It will be a very great project for Canadians because it will contribute to the prosperity of this country.
I am privileged this evening to follow the Minister of Industry, Trade and Commerce (Mr. Horner), that gentleman who made Judas look like an amateur. Many of the things I want to say tonight are things with which the minister cannot disagree. We know that the pipeline will extend prosperity to Canada. I also know that is the position the Minister of Industry, Trade and Commerce will take, because on January 8, 1976 he stated:

Stopping (Trudeau) is the duty of every Conservative in Canada. It is the task of every Canadian who cares about the freedom and prosperity of our land.
The minister obviously is concerned about the prosperity of our country. In his speech tonight he said that hon. members on this side of the House, in asking for a parliamentary committee to review the project from time to time, are really trying to obstruct the private sector of this country. I was appalled to hear that because the minister knows very well that this party has been attempting to restrict the government of this country and its heavy hand. In this regard I would like to quote what the minister once said about this government and its high-handed tactics. On a previous occasion the minister likened the Prime Minister (Mr. Trudeau) to Napoleon, but he also saw a similarity with Hitler. He stated that on January 15, 1976.


Lincoln MacCauley Alexander: Did he say that about the Prime Minister?


Harvie Andre: Shame.


John (Jack) Henry Horner: Mr. Speaker, I rise on a question of privilege. The hon. member has just quoted something which I have never at any time said. I have always denied saying that. I cannot keep up with the kind of garbage hon. members opposite keep repeating. There is an indication that hon. members read my speeches, and I am flattered. I do not mind their reading my speeches, if they can show me what I said and where I said it. I would like them to read the end of every speech I have ever made in this House, because when I was in the opposition I offered constructive solutions to the problems of the day. But I have never said what the hon. member just quoted me as saying.


The Acting Speaker (Mr. Turner):: Order, please. I suggest to the minister that that is a matter of debate and not a question of privilege.


Lincoln MacCauley Alexander: That is just what I was trying to say. You have no question of privilege, sir.


Mr. Harquail:: You are not Mr. Speaker.


Lincoln MacCauley Alexander: I did not say I was. The minister said that, and he knows it.


John (Jack) Henry Horner: I did not.


Lincoln MacCauley Alexander: You did.


Some hon. Members:: Oh, oh!


Arnold John Malone: Mr. Speaker, I would like to make the point that our party would like to have a parliamentary committee which could review from time to time-


Some hon. Members:: Oh, oh!


The Acting Speaker (Mr. Turner):: Order, please. The hon. member for Battle River (Mr. Malone) has the floor for the purpose of making a speech, and I suggest hon. members listen.



February 20, 1978


Arnold John Malone: I would like to point out why there is a need for a parliamentary committee. Here again I find that the Minister of Industry, Trade and Commerce is in complete agreement, because he stated at a Toronto press conference on January 13, 1976 the following:
Trudeau considers Canada a nation of spiritless, helpless and faceless people in his game of national socialism.
It is because of that national socialism that we distrust the government opposite, and that is why we want a parliamentary committee. The Minister of Industry, Trade and Commerce fully agrees with the kind of position we are taking. In case there is some doubt that he is convinced that we need a parliamentary committee to review monthly or quarterly, I would like to point out what is recorded in Hansard on page 6662 for June 11, 1975. At that time the minister said:
In the past six or seven years we have seen a tremendous shift in the Liberal Party's philosophy, a shift away from belief in the individual and a shift towards governmental involvement in the individual's business. The Liberal Party thinks that the government should interfere as much as possible in the individual's business and no longer be content to play the part of referee.


Lincoln MacCauley Alexander: Did he say that?


Arnold John Malone: We have been asking for a parliamentary committee which could review the progress of the pipeline and report back to parliament on a monthly or quarterly basis. The reason for that is that we want to have some control and some checks on the government itself. Tonight the minister confused his thoughts with the stable thoughts he had some years ago. He told us that we are trying to muzzle the private sector. The whole purpose of this proposed parliamentary committee, which has been recommended by the hon. member for Yukon (Mr. Nielsen), is to free the private sector from the heavy handedness of a locked up and secretive cabinet, with which we know the minister himself fully concurs. On that basis I ask again that a parliamentary committee be set up.
It is unfortunate that some sanctimonious members are attempting to filibuster this bill. I refer to members of the New Democratic Party, who state that United States companies need this legislation prior to the end of March. We know that that is the situation, but filibustering this bill will cause more jobs to be lost. If the pipeline does not go through, the New Democratic Party's holding out for extra guarantees will result in no jobs at all. If this bill is not passed through the House quickly and through the committee stage as a result of the filibustering of the New Democratic Party, that party will set an example of gross irresponsibility. Having that party involved in major money matters is like sending a tom cat to guard mice.
By their actions the Liberals have dangerously delayed this bill, and I want to emphasize "dangerously". The Liberals have risked the destiny of Canada with the political game they have been playing and with what I submit they have been attempting to do with this bill. It was drafted and prepared before Christmas. The bill was not brought to this House until just this past week. I submit that what the Liberals were attempting to do was to bring this bill in late in the hope that, because of its complexity, the Conservative Party would, in an
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attempt to get answers, debate it long enough that there would be a risk of losing the pipeline.
I submit that the Liberals might play that kind of politics in the hope of demonstrating to the people of Canada that we on this side killed the bill. We have news for them. We are not going to shirk our duty. We are going to study this bill, but we are not going to filibuster. We will let this bill pass as soon as we can, but the government knows that it must go to the committee, that there must be a report stage and third reading, and that if it is not passed by the end of March this pipeline might never be constructed. One of the facts to which this government must face up is that, because of its delay in introducing this bill, it has risked losing the largest project ever in Canadian history. I think that albatross has to rest on the necks of members of the Liberal party, and it will certainly be theirs to wear if this bill is passed too late and if that pipeline is not built. The Liberal party hoped we would drown the bill in our own oratory, but I assure the House that that will not be the case. The project is too big. It means too many jobs. It means too much hope, too much opportunity for Canadians.
While the official opposition will not neglect its duty, it will be putting up only a few speakers who will not speak for long. The partisan political engineering of the Liberal party will be their own albatross-theirs to wear if this pipeline is delayed.
In my role as ground transportation critic for Her Majesty's loyal opposition I have a few specific comments to make in that domain. First of all, I should like to refer to the Foothills gas studies which indicate that the Welland-Stelco pipe may well be shipped through the Panama Canal to Alaska, rather than overland by rail through Canada. The reason for this is that overland rail transportation in this country is far too expensive. It may be a surprise to many people in central Canada to learn what the west has always known-that Otto Lang does not seem to know anything about running a railway.


The Acting Speaker (Mr. Turner):: Order please. I would suggest to the hon. member that he refer to a member of this House by this title or his riding, and not by name.


Arnold John Malone: Mr. Speaker, I appreciate your admonition very much. I shall never use those foul words in this House again.
The report that Stelco is considering shipping pipe to the north by way of the Panama Canal gives the reason as the high cost of rail transportation in Canada. If there is any truth in this report, then U.S. steel production at Baytown, Texas, being closer, would have a distinct competitive advantage.
We must recognize the advantages of water routes over railways. In this connection the following information may be useful. The most recent statistics issued by the Canadian Transport Commission show that in 1973 users of railways paid 74 per cent of the cost, users of highways paid 64 per cent of the cost, users of civil aviation paid 31 per cent of the cost, and users of marine services paid 19 per cent of the cost.

February 20, 1978
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With respect to your comments of a few moments ago, Mr. Speaker, I should like to say that the Minister of Transport (Mr. Lang) knows nothing about running a railway when he has a user-pay system where railway users pay 74 per cent of the cost and marine service users pay only 19 per cent of the cost. With these costs we are liable to lose the chance to ship steel by rail across the country and see it go instead through the Panama Canal, that being the cheaper route.
The lesson is simple, Mr. Speaker. First of all, let us pass this bill and then let us have an election so that we can get a government that will allow Canadians the opportunity to afford Canadian products.
This is an expensive project, Mr. Speaker. We note that it is going to cost $10 billion and could run up immense interest costs through borrowing on the foreign money market. Today, we have an 89 cent dollar which the Minister of Industry, Trade and Commerce (Mr. Horner)-Your Honour will note that I did not use any abusive language that time-says is good for us even though we know it is costing us a tremendous amount of money just to pay interest on our foreign debt. We must remember that even if this is to be a Canadian project it will involve an infusion of foreign capital and that we will have to pay for the money that we have borrowed with a cheaper dollar.
The Progressive Conservative party demands that the bill include effective monitoring capability of the proposed pipeline agency by parliament so that the Canadian content requirement might be met. We expect that the agency would make available to parliament both monthly and quarterly progress reports, outlining the specific Canadian content objectives of the agency and its progress in achieving such objectives. We note with concern that the aforementioned government report on Canadian content concluded that Foothills' commitment to Canadian content could be achieved only if the government instituted appropriate guidelines, controls and monitoring. Mr. Speaker, we believe that but we also believe that those monitoring controls must be out in the open. That will only happen if we have a parliamentary committee make the decision, not if it is left to cabinet.
The decision on the size of pipe was solely the responsibility of the National Energy Board. I appreciate that and have no quarrel with the fact that they decided on 56-inch pipe, as this will be of benefit to Canada. Naturally I think that the community of Camrose will benefit from some of the spin-off coming from the main pipeline. It is also important that plants in Camrose, Regina, Edmonton and Welland be given the opportunity to produce pipe. 1 am sure that the pipeline will be a real boost to the economy of the country as a whole.
Before I conclude I should like to comment on some aspects of the Alaska Highway. The Liberal government has been derelict in its duty in regard to this highway and has shown a miserable lack of vision when it comes to the north and its resources.
The Alaska Highway was built in nine months in 1942. For years Canada was blind to the potential of the north and failed to recognize the potential to the economy of resources and

tourism in that part of the country. It was a former government under the right hon. member for Prince Albert (Mr. Diefenbaker) that built the "roads to resources" and started paving sections of the Alaska Highway. A former Prime Minister, Mr. Pearson, referred to that program as the government spending money in the Yukon like a drunken sailor- "building highways from igloo to igloo." That was being short-sighted, Mr. Speaker. Today, we have a major highway there and plans for a major pipeline. Before the highway is paved there will undoubtedly be changes in its route.
Pipe will not be laid in the Yukon before 1981. Meantime the government should study the highway in the Yukon immediately and consider its route before it is all paved. It does not make sense for a pipeline to dictate where the highway should go, nor does it make sense for them not to run parallel. Had the previous plan been followed, the Alaska Highway would be paved today; but as it is not, there is still time to survey and reroute it if it is considered necessary.
For the information of this government, Mr. Speaker, tourism makes money. Our present tourism deficit is approximately $2 billion but we could attract many American tourists were it not for that dusty, rocky road. A paved road through the Yukon would bring many more American dollars to this country.
There are others in my party who want to speak this evening. I conclude by emphasizing that the pipeline should be an investment opportunity for all Canadians. I believe in the concept of equity participation. An example of this is Alberta Gas Trunk Line, in which the people of Alberta were allowed to buy shares. We do not need another Crown corporation; this government already have so many that they cannot count them all. The people should be allowed to participate in a venture like this by subscribing for shares. When Alberta Gas Trunk Line put their shares on the market they were soon oversubscribed.
I note the Minister of Industry, Trade and Commerce is still talking quite a bit. He may want a seance with Mackenzie King. I would like to give one more quote to the Minister of Industry, Trade and Commerce. I note tonight there is a significant change in his position. On September 20, 1977 in a press interview with the Calgary Herald he said that-
-his department will ensure Canadian companies have the inside track on bidding, as well as insisting on a high degree of Canadian content in the manufactured goods used on the project. . . intends to play an integral role-


John (Jack) Henry Horner: Right on.


Arnold John Malone: We discovered that the minister in his negotiations did not in any way ensure that Canada would receive any guarantee of content. Now the pipeline debate is before us and we have to take it as it is. The Canadian content requirement came as a result of the National Energy Board's recommendations or by chance. The minister is here to applaud that the luck happened to go his way. He is not to be applauded for anything that he did. Let us hope that the minister's luck
February 20, 1978

continues. This bill must pass and the pipeline must be built. We need some assurances in committee, and we will be seeking them at that time.


Roger Carl Young: Mr. Speaker, I want to assure all hon. members at the outset that my intervention this evening will be a brief one. There are people who are more expert than I in the technicalities of building pipelines in this country.


An hon. Member:: Not on your side.


Roger Carl Young: There have been some very good speeches from this side, and particularly the one made by the Minister of Industry, Trade and Commerce (Mr. Horner) who has just spoken.


An hon. Member:: I used to say that too.


Roger Carl Young: Let me hasten to assure some of my detractors on the other side, Mr. Speaker, that I do not pretend to have full range of knowledge concerning pipelines which they may have. However, let me point out that I have been a pipeline layer. I have worked in trenches. It may not have been an oil or a gas pipeline, but a few years ago I did spend-


An hon. Member:: You are the Art Carney of the Liberals.


Roger Carl Young: Mr. Speaker, there is a chap on the other side who shoots from the lip far too fast. I have spent some time in the trenches laying pipe in this country, whether it be water or services piping, and I know what it is like to be in the trenches and to work outside in temperatures at eight or 10 degrees below zero.
In this debate on the pipeline issue there are those on the other side of the House who have been saying for so long there is too much control, too much government intervention in the lives of people in this country. To me that is ironic. For suddenly the NDP are saying: "Come on, government, you must guarantee our workers these jobs and you must guarantee a certain amount of Canadian content. You must reach into our lives and pocketbooks and guarantee our livelihood for us". I find it strange that people who, on certain days of the week, do not want controls, on other days, when we debate the pipeline, such as today, do want controls, guarantees and everything else handed to them.


An hon. Member:: We want jobs for Canadians.


Roger Carl Young: We are all interested in jobs for Canadians, Mr. Speaker. To those who spend so much time badgering for job guarantees for Canadians, I say I have yet to hear them talk about the ultimate cost to Canada if it was to provide those guarantees, what it would amount to in terms of contracts to be signed as well as involvement in the livelihoods of Canadians. Even those with the least amount of common sense in this House, looking at the question of guaranteeing work, putting an absolute guarantee on these jobs and on content, would see that the first thing that would happen is that the lid would blow off the cost of the pipeline. The moment a guarantee
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went into the jobs, the content or whatever, you could well expect that the cost would substantially escalate. Everyone would want to grab the biggest piece of the pie that they could. There would be no control left. How long would it be before the cost of that pipeline would double or triple?
The government has said to workers and to companies in this country: "There is every opportunity for you to obtain work on this pipeline, there is every opportunity for you to supply Canadian goods which go into the building of the pipeline and there is every opportunity for Canadians to come off the unemployment rolls and secure jobs in building the pipeline or making parts for it. But to do that you must stay competitive."
This pipeline is not only important to this country between now and 1982, 1983 or 1984. What will happen to our economy when the pipeline is completed and when we begin to ship the oil and gas? We have to have a sound economy, and we cannot continue to do so if, during the course of building the pipeline, wage rates, the cost of equipment, goods and so on completely skyrocket and get out of line. This will destroy the prosperity not only of people who work on the pipeline or who make products for it, but the rest of the economy as well, because so much of our economy is fed by the energy which is delivered to run plants that produce other products.
All of us in this House have a common interest in Canadian plants doing work and in Canadian workers getting jobs to build a pipeline. Everyone is I am sure very hopeful that the maximum benefits to Canada will result from the building of the pipeline. It is a joint project between two countries, and when you have a situation like that no one country can expect it to go all one way. I have a lot of confidence in what the Canadian worker can do on the pipeline and what good Canadians can produce for the pipeline. When I look at the cost of the pipeline and see that two-thirds is taken up in building the United States portion and about one-third in building the Canadian portion, I would like to think that Canadians could be competitive enough, and are competitive enough, not only to bid for, build and work on the pipeline in Canada, but that they will be able to look forward to bidding for, building and working on a portion in the United States as well.


Mr. Deputy Speaker:: Order, please. Does the hon. member wish to ask a question or rise on a point of order?


Derek Nigel Ernest Blackburn: Mr. Speaker, I am sorry but the hon. member indicated that his speech would be short.


Mr. Deputy Speaker:: Will the parliamentary secretary allow the hon. member to ask a question?


Roger Carl Young: Mr. Speaker, I would appreciate its being asked at the end of my remarks, if the hon. member would allow me two or three more minutes.
We have a good deal in this pipeline. If we manage to stay competitive and manage to build the Canadian section of the pipeline with no more than 35 per cent cost overrun beyond

February 20, 1978
Northern Pipeline
our present projections, we will virtually have the Canadian side built and maintained for nothing. That is a good deal for this country and a compliment to the hon. House leader who negotiated the arrangement. We also receive an insurance protection fund for the Yukon and the northern territories which is far greater than what Dean Lysyk expected would be coming forward.
It is important that the Canadian people understand one thing. The gas Canadians will eventually receive via the pipeline once the Canadian section is built will be twice as important to us as the gas which will be shipped to the Americans in the lower 48 states.
I am afraid I am competing against the rest of the House. I beg their indulgence for about two minutes. That gas being shipped through the pipeline to the United States will be sufficient to serve 5 per cent of their energy requirements. Canadian gas shipped through that pipeline to the Canadian market will supply 10 per cent of Canadian energy requirements. Therefore, the gas going through the pipeline will be twice as important to us as that going to the United States. If our costs go up through the building of that pipeline as a result of letting them get out of control and not remaining competitive, the ultimate effect will reflect twice as hard upon the Canadian economy as the American economy. That is something we cannot stand and do not need.
I will sum up by asking a few short questions of my friends from the New Democratic Party. For weeks they have been saying there must be a flat-out guarantee of jobs for Canadians, of Canadian content going into the building of the Canadian pipeline, and of Canadian workers being employed. Has anyone yet heard the leader of the NDP or one of his spokesmen offer corresponding guarantees in return, not just to this House, but to the Canadian people? They are asking for guaranteed jobs for Canadians and a guarantee that Canadian pipe will go into the pipeline. Has anyone from the NDP yet said to the Canadian people they will guarantee workmanship going into the pipe? Has anyone yet said that they will guarantee to keep the cost of the pipe down, guarantee delivery on time and guarantee workmanship? I have not yet heard one guarantee corresponding to the guarantee for which they ask.
Not one of us would hire a doctor, plumber, lawyer or any artisan to do work for us, saying that we will give him a blanket guarantee, without asking in return for a guarantee of workmanship, quality and delivery. We would also like to be assured that workers will not go out on strike, so that the job will be done on time. No one in the NDP has offered a guarantee like that in return for the guarantee for which they are asking. The best guarantee, the best way to achieve that, is to leave it up to the free enterprise system. When you have people competing for the jobs, wages and the products going into the pipeline, the best result comes from allowing the free marketplace to prevail.

I agree it is necessary to put on controls so that the Canadian competitor has a fair and equitable chance. We do that by setting up the control and review agency as expounded by the House leader. That is the guarantee of control. It ensures that Canadians get a fair deal in this pipeline project.
I find it strange that our friends in the NDP who purport to act for the little guy, who represent the workers of this country, have less faith in the ability of the Canadian workman, less confidence in his competence and desire to do a job, than the president of the steel company. I find that very strange.
I said I would be short, Mr. Speaker.


Mr. Deputy Speaker:: The hon. member for Brant (Mr. Blackburn) wishes to ask a question which will be accepted by the parliamentary secretary.


Derek Nigel Ernest Blackburn: Mr. Speaker, I am not going to get into polemics. There is one question I wish to ask the hon. member for Niagara Falls (Mr. Young). He talked about competition with regard to equipment and contracts for the pipeline. He made a very fine case for free enterprise competition among the various steel corporations.
How can he reconcile what he calls a good, healthy, free competitive market for pipeline material, which in turn means jobs for Canadians, when steel companies in Japan, West Germany, Italy, and indeed the United States through DISC, have decided advantages and in some cases are very heavily subsidized by taxpayers through government aid? If he can say that our steel companies are in the same competitive position as those in Japan, West Germany, Italy and the United States, I will accept his argument. I want him to substantiate his charge that it would be a free competitive-


Mr. Deputy Speaker:: Order, please. The hon. member is making a statement, not asking a question.


Ramon John Hnatyshyn: Put a question mark on it and sit down.


Roger Carl Young: Mr. Speaker, during the course of my remarks I stated that I believe the Canadian steel industry is competitive. I believe Canadian workers can do the job. The companies can turn out the products, whether it be Stelco, Ipsco, or the myriad of smaller companies that will in fact be making parts that go into the pipeline. I believe they are competitive.
In my remarks I stated that it is essential to create a situation where the free enterprise system would prevail. We must ensure that everyone remains competitive and that Canadians remain just as competitive for the long run improvements in our economy as the short run improvements. I also said that I am not naive about what goes on in the world, that there is international commerce, trade and competition and that it is necessary to have a control mechanism, a watchdog body or review agency. We have in terms of the legislation set one up which can look at the bids as they come in. It will ensure that Canadians get a fair chance to bid competitively and equitably on the materials that go into the pipeline; that is set up by the control mechanism. Since the
February 20, 1978

permits given are conditional on the proposal made and the proposal says we are trying to reach at least 90 per cent Canadian content, we will watch the progress in that regard. We will ensure the companies do their utmost to do that. We will ensure they are not faced with unfair competition.


Hon. Alvin Hamilton (Qu'Appelle-Moose Mountain):: Mr. Speaker, my speech tonight is on how to make money. I have listened to some very fine speeches in the House, all dealing with the amount of Canadian content, the man working in the steel mill, the man who makes the valves, pumps and so on in Quebec or the Atlantic provinces. That is all good material to be talking about. However, for too long this House has forgotten the main objective that this pipeline gives us.
As I said in August, I speak with great sadness on this subject because never has there been a crime committed against the Canadian people greater than the crime that the Liberal party of this country has committed on the subject of pipelines over the past 25 years.


Some hon. Members:: Hear, hear!


Francis Alvin George Hamilton: I am old
enough to remember, as is the House leader, that when Canadian companies tried to build a pipeline from the Peace River in British Columbia to service Canadians who lived in the city of Vancouver and needed a few extra thousand cubic feet of market to make that pipeline a paying proposition, they got that market. They got it because El Paso came in from the United States and said: We will buy that extra 200,000 cubic feet if you will give it to us for 50 per cent less than Canadians pay for it. The men who formed this company took all the risks of building that pipeline through high mountains-the highest mountains a pipeline has ever been built through-and did it without any protection from the government of Canada. Before they could get that extra sale they had to accept a price of 22 cents a thousand when Canadians closer to the source had to pay 33 cents.


Some hon. Members:: Shame!


Francis Alvin George Hamilton: Moreover, the Liberal government of that day sat here and did nothing when that same American company asked for 50 per cent of the shares in addition as a sweetener to the low price they were paying. It finally got 25 per cent. So great was the outrage among those of us who were beginning to take an interest in these matters at that time that an attack began to develop on the federal Liberals, culminating in the debates surrounding the trans-Canada pipeline which was the Liberals' next great hurdle.
The head of the Department of Trade and Commerce at that time believed that Canadians were not competent to finance a pipeline or to build a pipeline or even to run a pipeline. And almost all of the trans-Canada pipeline, which ran from the border of Alberta and Saskatchewan right down to the heartland of our industry in Toronto and Montreal, was
Northern Pipeline
built; not only with American financing by way of bonds but with American equity money. Finally, toward the end of that campaign, to get the government to speak up for Canada and Canadians they finally allowed Canadian citizens to buy a few million dollars worth of equity. If you bought a $100 bond they would let you buy five shares at $10 apiece. The issue was oversubscribed many times; we never even found out by how much we had oversubscribed it. These are memories of the sell-out of the Canadian people to the Texas buccaneers by those who sat on the other side of the House in 1956.


Mr. Paproski:: That includes you Allan!


Allan Joseph MacEachen: 1 was so far away on the backbenches you couldn't even see me.


Francis Alvin George Hamilton: When I heard the Minister of Industry, Trade and Commerce (Mr. Horner) stand up and read a statement prepared by people who had given him a lot of figures to quote, it was hard to realize that the minister comes from a proud political family, a family proud of its services to this country, proud of being devoted to principles for which they have always fought. Better the hon. gentleman should have been back out in Crowfoot trying to save himself than be associated with a group of people like those around him now on an issue such as this. I felt very sorry for him. I felt very sorry for his family which for four generations has fought for the fundamental principles which have put this country together. I was sorry he had to make a speech like that. And all he could do, with the name-calling which went on across the House, was to lose his temper. I do not blame him, thinking, as he must, of all the men who have gone before him and carried his name. Birds of a feather must flock together. The "same old bunch" all over again.
This bill, as has been explained by the minister, carries out, in effect, one of the duties of the National Energy Board, namely, to give a certificate of convenience and public necessity to this pipeline. It has been made very clear to us that primarily we are talking about a pipeline of convenience intended to move American gas to Americans. It is true that a few cubic feet will be supplied to towns in Canada along the route of the line. We are doing this as a good neighbour should to provide a convenience for our American friends. They were ready to assist us, too. In 1966, just 12 years ago, we wanted to build a loop in our major pipeline across from Manitoba into Ontario passing through their territory. We got a pipeline through there. But notice what they did: they asked for and got, as they thought was their due, 50 per cent of the equity. This brings me around full circle to where we stand tonight.
This bill suffers from the fact that it was not brought in last fall when it should have been brought in. Had that timetable been followed, we could have used the power of this House by putting in one or two conditions which would have helped this Canadian consortium composed of Westcoast Transmission and Alberta Gas Trunk. This consortium could have used some help. The Canadian portion of the line was going to cost less than $4 billion. To many people this looked like a big

February 20, 1978
Northern Pipeline
project. But Canadians can carry it without too much sweat if we pull together. We could have helped this Canadian company to get the necessary financing if we had done certain things for which there is a precedent.
During this debate almost every speaker for the official opposition has mentioned the technique-that is, equity. A great majority of people, I am afraid, do not understand the significance of equity when it comes to pipeline financing. I think it can be best understood if one realizes that the people who put up the equity must wait for a return on their money; the first charge on the earnings of a pipeline company goes to pay off bond holders. We have in place, thanks to the government of my right hon. friend from Prince Albert (Mr. Diefen-baker), the National Energy Board Act of 1959 which provides that in future a National Energy Board shall lay down conditions which ensure that a private company operating a pipeline is working in the interests of Canada-and those interests include many things, among them financing.
Where do we find in this bill any mention of conditions laid down with regard to the financing of the pipeline to make sure that Canadian content where it really counts-ownership- will be protected? There is nothing of that kind in the legislation. It never crossed the minds of members sitting on the treasury benches opposite, those great minds still living in awe of C. D. Howe who thought Canadians were not brainy enough, not gutsy enough, not sufficiently well financed to build a pipeline. This group of people opposite, this crowd of nitwits, are surrounded by experts who know nothing about anything, as we saw tonight by that speech given by the minister.


An hon. Member:: Experts anonymous!


Francis Alvin George Hamilton: The Department of Industry, Trade and Commerce, had it known what it should know-because at one time pipelines were within its jurisdiction-should have provided the minister with a series of speeches setting out all that had been done during the negotiations with the Americans and with the private companies to show, above all, that they were backing up this Canadian company and securing for Canadians the first opportunity to finance it.
I do not intend to examine the whole of the financial structure of Westcoast or Trans-Canada Pipeline or Great Lakes in detail. I have lived through the events connected with each one of them. Now I am living through the fourth one. And when I see a government which has not learned from these mistakes, when we have to work with a government which has no shame, a government which will not take advantage of the possibilities open to it, I can only shake my head. The real value of a pipeline is not in hardware. It lies with the person who owns it. It lies with ownership of the equity shares.
The Conservative party from time immemorial has been the only party which clearly states that our objective is to have Canadians as individuals owning this country.
I congratulate the hon. member for Nanaimo-Cowichan-The Islands (Mr. Douglas). Thank goodness that, with all his

experience and knowledge, he had enough brains to come to the House and say he supports this equity approach, that he does not support doctrinaire socialism, not when it comes to his country. He gave his promise in 1953 in Saskatchewan as a premier that so long as he was premier he would see to it that the oil and gas companies, which had promised to develop that province, would never be nationalized or socialized. He has lived long enough to see doctrinaire socialists break his word. He has seen how Saskatchewan has been put on its back. But here he stood up and said that equity is worthwhile.
He supported the hon. member for Yukon (Mr. Neilsen) who said that we must have some parliamentary control, not so much over the companies but over this crowd of people who have a record of 25 years of selling out the Canadian people at every opportunity they get. There has been no greater demonstration of this than in the pipeline fiasco over the last 25 years.
Fortunately for this country the National Energy Board Act is in place. Fortunately for this country, even though the National Energy Board has been emasculated by the officials of the Department of Industry, Trade and Commerce who have not given the board an opportunity to carry out its full functions, the board is still there, even though it has been pushed around and interfered with by this government. When the board sets its rate of return on the rate base for this pipeline for the partners in Canada, it will make certain that the rate of return on equity is based on the full amount of money borrowed plus the amount of equity. That is called the rate base. So the money that equity gets, if they want to get more money, depends on the size of the rate base.
It is true that the National Energy Board over the years has assumed that when the pipeline is built and is operated it will not be a risky enterprise but a success, and they do not give a rate of return that is as high as it used to be when interest rates were 6 per cent. I am simply pointing out that sooner or later the National Energy Board will discover what is the true function of setting the rate of return, namely, some relationship to competitive risk costs around the world. Today if you want to know what risk money draws, you should go and look at countries such as the United Kingdom. They have been developing the North Sea fields at great speed, which got them off the economic hook. What rate of return did that socialist government in name offer to private industry to develop the North Sea oil? They offered approximately 25 per cent on the rate base.
The effective rate base we have in Canada, on the basis of most decisions I have seen, is around 14 per cent or 15 per cent. Sooner or later that rate of return has to match the rate of return in other countries. I am simply saying that the only chance Canadians have-whether they live on a farm, work in a factory or work at any other white collar or blue collar job, apart from steel workers, construction workers and a few others-to make any money out of this is if an opportunity is provided them to buy that equity.
February 20, 1978

The companies that I have mentioned, such as Westcoast and Alberta Gas Trunk, are both Canadian. They know what I am talking about because one of them was gored in 1954 and the other happened to have a government in charge in Alberta which put in statutory terms what we should have in front of us here. Sure enough, the statute of 1954 was replaced. I may mention a few of the changes later, but now I will ask members on the government side to follow the precedent set by the government of Alberta, composed of a mixture of farmers, professional people and average folk such as we have in this House. I should like to read a clause from chapter 37 of the 1954 statutes. It reads:
Capitalization
5. The capital stock of the company shall consist of
(a)	eight million Class "A" common shares of the par value of five dollars with no voting rights attached to the shares, and
(b)	two thousand and two Class "B" common shares of the par value of five dollars with voting rights attached to the shares.
The ordinary people of Alberta were authorized under this statute to acquire eight million common shares at $5 apiece. All the big companies that were out finding the oil or gas, distributing it and selling it, were allowed 2,000 shares, and the act specifically allocated the number of shares to each class.
People who were expert in financing in those days said the Canadians were not able to finance a pipeline. I happened to be in Alberta on that day, as were a large number of Saskatchewan residents, all of us trying to pass ourselves off as Albertan residents to get access to these common shares. Because the regulations said that first chance would be given to the residents of Alberta if they appeared in person before a branch of the treasury office, which exists in every town in Alberta, or a branch of a national bank.
I found every type of person, working people, waitresses, truck drivers, doctors, lawyers, preachers and even a few school teachers, lined up trying to get access to those shares. The figures are not precise but they are close enough. So heavy was the subscription to the shares available that they had to divide them among all the adults who appeared and each adult received a maximum of 20 shares at $5 apiece. So great was the demand by over 100,000 adult Albertan citizens that they could only give them $100 worth of shares apiece.
That is not the end of my story. I have the financial records of that company up to the last year. After years, those shares at $5 were split four ways. At one time the shares reached a peak of $45 and $50, and they were split five ways. Now they are averaging $14 and $16. So if you still have shares for $5 which you bought in 1954, and you now have four, at $16 apiece they would be worth $64. That ain't bad, Mr. Speaker. That $5 has got you $64 in 20 years. In the meantime dividends were paid and on the $16 share today the last dividend I saw was 60 cents. Sixty cents on one of your four shares is the same as $2.40 on your four shares. Any time you have a hot little share in your hand that you bought for $5, it will give you $2.40 dividend every year. That ain't bad, Mr. Speaker.
Northern Pipeline
When you take a look at the total value of the investment in the pipeline you see that large amounts went to pay the interest and pay off the capital on those orginal bonds. But who got the money? The millions of common people, each of them, got as much as 2,002 shares at $5 apiece. So if you were a big company in those days finding gas in Alberta, you probably got 50 shares at $5 apiece. Those of Class B type were multiplied by four, so there would probably be 200 shares. All the dividends they would get would be on the 200 shares.
I am simply suggesting that we should have done as the Leader of the Opposition (Mr. Clark) suggested last August when we met here and in effect approved the route. The minute the negotiations were over in the United States the government should have brought in legislation including some of these clauses and we could have had financing arranged similar to this precedent. Time has passed and I am sure these Canadian companies have gone out and arranged the financing of this pipeline with other companies. It they followed the usual precedent, with a total cost of roughly $4 billion, $1 billion will probably be the equity and $3 billion the amount of bonds.
Every one of us here, representing, as we do, every Canadian, should be asking ourselves whether these Canadian companies who are going to take the risk of backing up this equity of $1 billion will make any of these shares available to us and to every other Canadian as an individual. That is the question we should be asking. It is too late now to bring in an amendment to this bill and to get it into law, which I hope will be next month, because I am sure the financing has already been arranged.
I would like to see a monitoring committee of this House representing the people. Whether it sits every three months or two and a half weeks is immaterial, just so long as there is somebody representing the people and reminding not only the government but this company of their many promises. The company promised that if it ever got this certificate of convenience it would give Canadians a chance to invest. We want to know how the company financed the project and if it has made the shares available.
I happen to believe that the working man in Hamilton wants the extra 2 per cent or 3 per cent of business this project will bring to him next year. He is the most efficient steel producer in the world and he knows it. He can match any steelworker in the world for price per unit, and he knows that. He also knows he gets better wages than most of them too. He will accept that 2 per cent or 3 per cent of extra income in business next year.
What he would like for the next 30, 40 or 50 years, as long as gas goes through the pipeline-and whether it is U.S. gas or American gas is immaterial-is an opportunity to share in return on equity. Every time the pipeline is repaired or restored the equity life is extended. I do not think one will ever
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February 20, 1978
Northern Pipeline
get the amount of return one could get from the Alberta Gas Trunk because that was a brand new situation.
However, what we should be thinking about here as members of parliament is not just the failures of this government in respect of Westcoast 25 years ago, in respect of Trans-Canada Pipelines 22 years ago, or in respect of the Great Lakes application ten years ago; rather we should be thinking about all the other pipelines we are going to be building over the next ten or 20 years. These pipelines will be built not just to bring gas or oil from our remote areas, and not just to move the products of the forest in gas and oil form from east to west, west to east and north to south, but to move coal. We are going to move coal and a whole variety of products like potash in liquid form. We will have the pipelines. We have the best track record in building pipelines in the world. Above, all let us keep our eye on the ball.
The thing that gives Canadians the deepest satisfaction of all is not just the fact that Canadians own the pipeline but that Canadians get these dividend cheques every three months. One thing that the Americans have taught us is to go after the equity, because that is where you get the money. It comes in year after year after year. Just try to find on the stock markets of the United States or of Canada today any single common stock that has almost a guaranteed return of 15 per cent or more, as will be the case under this National Energy Board power to set the rate of return on the rate base. I hope it will be a lot more than 15 per cent.
In the case of Alberta Gas Trunk Line the regional guys can still get 100 per cent a year. If you get $5 a year including capital gains on a stock worth only $5, that is 100 per cent. Even if the fellow only had a couple of hundred dollars' worth, that is better than anything else he can see or buy. He will never get that again.
Maybe the next pipeline will be built as a brand new venture right here in Canada. Maybe the next time this government will be thinking of Canadians owning these things, and will have brought in changes to the capital gains tax and changes to the deferral of incomes sections of the Income Tax Act. If the government says to a man or a woman that it will defer the tax on up to $1,000 a year if they put the money into a retirement savings plan for their old age, on which the returns are pretty hairy these days, then surely it can allow the same persons to put that money into stocks in respect of which the government cam make sure they cannot lose. If that were done the workers would soon let you know where they stand. A worker knows now that on a fixed pension he is doomed when he reaches the end of his working period. He wants something indexed so it will grow with inflation; his pension will not. This is what the working man in Canada wants, and what a glorious opportunity this government had; but it failed to take advantage of it on this occasion.
I would think that if it has not learned the lessons of the last 25 years there is not much hope that this government will ever learn them. That is why I know in my heart that 50 per cent, 60 per cent or 70 per cent of the people who live in the western part of this country pray every night: "Dear God, let's get rid

of this outfit. Please God, no matter how terrible the opposition is, change the government".
Those people know that in the last 50 years the only hope they ever had was during the five years under the right hon. member for Prince Albert. They want another chance to have five, ten or 15 years of growth instead of this "stagflation". This government ran out of steam 35 years ago. It relied entirely on the mandarins of the civil service to direct it. The civil service died in 1948 and hasn't come alive since. It is still hanging on to ways of doing things that are wrong. We took the wrong fork in the road during the war years; we must have a change in government to get back on the right road so that Canadians can restore their pride in their own ability to save for their old age and, at the same time, produce the things that make this country grow and be strong.


Eldon Mattison Woolliams: Mr. Speaker, may I call it ten o'clock?


Mr. Deputy Speaker:: Order, please.



PROCEEDINGS ON ADJOURNMENT MOTION

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

Mr. Walter Baker (Grenville-Carleton):: hopeful legislation would be brought in during the lifetime of this parliament. If I am to judge from the propaganda I hear from the government side of the House, we are getting close to the end of that lifetime. Meetings have been held recently with municipal officials at which the promise was made again. Many people in the national capital region are awaiting an answer as to when this belief will be forthcoming.
Although the question was related to the national capital area, it is a national problem in that it affects every municipality in which there are formidable federal institutions. It hits Ottawa particularly hard because its major employer is the government of Canada. The federal government does not pay a business tax or anything like it. The government of Canada owns 40 per cent of the land in the area. In 1977 the Regional Municipality of Ottawa-Carleton suffered a shortfall in projected revenue of $18 million. As the cost of doing local government business increases, the burden increases.
It is not just a burden on the Regional Municipality of Ottawa-Carleton but also on people who own property and pay rent. The mayor of the city of Ottawa has estimated that the burden on his ratepayers is approximately $150 per household as a result of this. Throughout the townships of Nepean, Gloucester, Rideau and Osgoode it varies, but it approaches that figure.
This problem was brought to the attention of the Prime Minister. Two years ago he responded to it by indicating the legislation was forthcoming. When, in what form and to what extent will this relief be forthcoming? It has been promised. I hope the promise will not be recycled by announcing once again in or around April that relief is on its way. That would cause the people of Ottawa-Carleton to wonder.
The decentralization program, which is a rather perverse form of patronage, coupled with the relocation program has aggravated the situation. The Woods-Gordon report indicates a $500 million loss over the next ten years; an economic crisis which may last 15 years; $13 million in lost office revenues over the next ten years; and property value decreases, as a result of lost revenues, of approximately $30 million in that same period.
Clearly it is a serious problem for Ottawa. It means the tax base of the Ottawa-Carleton region is shrinking; the burden on the homeowner and the renter is correspondingly increasing. The federal government has promised to assist in solving the problems of the area. We would like some action on the promise which was made when relocation was announced. The federal government said it would give us assistance.
I know the parliamentary secretary is not blind, deaf or dumb. He must understand the difficulties which are faced by small business people and restaurateurs. There are problems with respect to buildings. The government of Canada pays something equivalent to property taxes. It pays water rates, police rates and so forth to a fairly large extent, but not in full. There are certain government buildings, particularly cultural ones, which should be brought within the ambit of those
Adjournment Debate
property taxes, and somehow the way has to be found within a short period of time to commence the process of rectifying this situation. The government should finally accede to the wishes of the people and local government and bring to our area some equity to match the immense power and influence it has. For many years the government has not been paying its way completely. On behalf of ratepayers and tenants in the Ottawa area, I ask that that legislation be brought forward quickly so that the House and the public can examine it.
[ Translation]


Mr. Raymond Dupont (Parliamentary Secretary to Minister of Employment and Immigration):: Mr. Speaker, the Minister of Finance intends to introduce a bill amending the Municipal Grants Act in 1978. There is no draft bill but the Department of Finance is already working hard and systematically considering the various decisions to be taken before preparing the bill itself. The Minister of Finance has asked his officials to be ready to introduce such a bill at the beginning of the session this fall. The legislation will be retroactive and enforced for the municipal taxation years from January 1, 1978.
The grant program in lieu of taxes is a national program and the amendments which will be suggested by the Minister of Finance will benefit municipalities throughout Canada, including the municipalities in the national capital area. The minister has received representations about amendments to the act from the City of Ottawa, the Federation of Canadian Municipalities and many other agencies.
All these representations are being considered. It will also be necessary to review carefully many technical problems. Everyone understands that these questions will polarize much time and resources in a year that promises to be a busy one. I can, however, assure hon. members that the schedule I have prepared will be followed. The grants in lieu of taxes program was introduced several years ago by a Liberal government and since that time more than 2,000 municipalities across the country have taken advantage of it. The new act will update the program and Canadian municipalities should welcome it.


AGRICULTURE-POTATO ACTION COMMITTEE-PROGRESS REPORT ON STUDY
Eymard G. Corbin: Mr. Speaker, on February 17, I asked the Minister of Agriculture (Mr. Whelan) what has become of the federal-provincial committee which was responsible for setting up a marketing plan for potatoes in eastern Canada. That group is called the Potato Action Committee or PAC and that is the abbreviation I am going to use whenever I mention it. The minister told me that this committee had made recommendations but could not force the provinces to do anything. Fine, and I too agree on the principle that we should let producers organize together and decide on the best means to take to market their product in each province.
In his answer, the minister also stated that because they had refused to establish a marketing board, producers of one of the
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February 20, 1978
Adjournment Debate
provinces are now getting $2 to $3 dollar per hundredweight less than they are getting in Alberta. Without naming that province, the minister was referring of course to my province of New Brunswick. But Prince Edward Island and Ontario are in no better position.
The minister knows as well as I do that it is not the lack of a marketing board which can explain the difference in prices between New Brunswick and Alberta. Do they have a marketing board in Alberta? Unless I am mistaken, the answer is no. Moreover, the minister himself stated before the agriculture committee two years ago that a distinction had to be made between eastern and western Canada. He even went so far as to suggest that two different potato marketing boards were necessary, in order to take fully into account the particular circumstances and markets of both regions. Therefore the minister's argument is a sham. The problems and challenges involved are quite difficult and cannot be met simply by setting up marketing boards. The situation varies from one region to the next. No universal panacea exists in this area. This brings me back to the PAC which was my original concern. Last Friday, the minister did not reply to my question, and I hope his parliamentary secretary can tell us tonight whether this committee still exists, what it is doing, and whether its objectives have changed since its creation in April 1976.
One thing is sure, Mr. Speaker: The PAC will never succeed if the producers are not seriously involved in those discussions. The days when the farmers were presented with a fait accompli are a thing of the past. If they do not participate in the decisions, they will refuse to co-operate in the implementation of any proposal, no matter how good it seems to be. Should some provinces be taken to task for not having set up a potato marketing board, for having failed to find a formula that would appeal to the majority of producers? When one knows the sad story of the potato growers in New Brunswick, can the farmers be blamed for being overly careful, for not having reached a consensus? They did reach a consensus in Prince Edward Island; yet, did they get a better price for their produce this year? Not much better than in New Brunswick, and what has happened in Ontario? I shall read to the House what Farm and Country, an agricultural paper, published recently, on February 14, under the title "Potato Growers Study Board Idea", and I quote:
Both American and Prince Edward Island potatoes found their way onto the Ontario market and forced local prices below cost of production.
That is what happened, Mr. Speaker. Is that a healthy situation, when one has to sell below cost? The same newspaper also quoted Mr. Harry Fraser, editor of Fraser's Potato Newsletter of Prince Edward Island, and I quote:
New Brunswick's crop should not be a factor in the Ontario marketing decision. New Brunswick is now shut out of quality markets.
Nothing could be further from the truth, nothing could be more irresponsible. After having read that comment, I cancelled my subscription to that paper. That type of gratuitous

statement only leads to chaos. It is said, and the minister can confirm it, that Quebec and Ontario have been increasing their potato production considerably in the past few years in order to be in an excellent negotiating position if ever this happens when the quinquennial production averages will be distributed to establish provincial quotas. Where will that leave New Brunswick and Prince Edward Island whose domestic market situation is worsening year after year? If these two provinces do not have access to the central Canada market, the only solution will be processing, and here we are dealing with problems of another nature.
There is a serious problem this year, Mr. Speaker, just as there was two years ago, four years ago and so on. Cycles come back with the same frequency and potato growers disappear at the same rate. Family farms are vanishing from the picture. The point I want to make here is that marketing in itself will not settle anything. It is only an important starting point. We will have to come to an agreement in New Brunswick and elsewhere. The provinces will also have to agree among themselves, and this will not be easy. We will have to face the other problems of transportation, storage, quality of seeds, inspection, negotiations and arbitration, disease control and so on. If the PAC is always in operation, I hope it will give the leadership which is necessary to the potato industry in order to establish the consensus which all parties concerned are so eagerly seeking.
I think that the federal Minister of Agriculture (Mr. Whelan) can and should show leadership too. It will be a wasteful exercise to blame here and there or at random. Therefore, I urge the minister to stop taking shots at New Brunswick. This province is not the only one in the picture. New Brunswick probably deserves better leadership at the provincial level, and here I agree with him. What should be done is to inspire confidence, to lead the way, and New Brunswick farmers are able to carry out their responsibilities.


Mr. Yves Caron (Parliamentary Secretary to Minister of Agriculture):: Mr. Speaker, I am very pleased to answer the questions of the hon. member for Madawaska-Victoria (Mr. Corbin). And I am particularly pleased, Mr. Speaker, in view of the fact that the hon. member for Madawaska-Victoria is one of those in the House who rise the most often to discuss and defend the interests of the potato producers of New Brunswick and eastern Canada. He rises because he has a good knowledge of their marketing problems and a true desire to find a solution as soon as possible, with the help of the federal Department of Agriculture.
As the Minister of Agriculture (Mr. Whelan) said, the Potato Action Committee, to which I will refer as the PAC, as my colleague from Madawaska-Victoria did, made a number of recommendations and proposals regarding the establishment of potato marketing facilities for eastern Canada. The establishment of these facilities has unfortunately been delayed by its dependence on provincial authorities and by the fact that a number of producers and provinces have been unable to de-
February 20, 1978

velop appropriate organizations in their own field. Following considerable research on this subject at the producer level in the five participating provinces, the PAC got the approval of potato producers' representatives to set up a project, on July 9, 1976, in Fredericton. The essential part of this project is first to establish in each of the five provinces an agency representing the producers; second, a regional agency whose members would be delegated by the provincial organizations. The latter would be a forum and a means of coordination for regional and interprovincial aspects. It is apparent that the formation of a provincial producers' body is crucial. At the Fredericton meeting it was decided to form a producers' committee to help the PAC implement the report of the conference that took place in Montreal in 1975 and the committee at that time in fact became the proposed regional board. The board met on several occasions and is united and supported by provincial and federal officials who work in co-operation with the management of the PAC. At the beginning there was only one potato marketing agency-in Prince Edward Island. Subsequently, considerable progress was made in the development of producers' organizations. I am certain that the hon. member for Madawaska-Victoria will be as concerned as I am about the situation in New Brunswick and Prince Edward Island. During the 1974-75 season those provinces received substantial financial assistance through the work of the PAC, and in New Brunswick marketing remained disorganized, as it has been for the past three years.
And it is that unfortunate fact that is the main cause of the economic problems presently facing potato producers in that province, and also the main obstacle to the PAC and the interprovincial agreement that is being sought. I must reassure the hon. member that the Potato Action Committee is very much alive and active. Its next meeting will take place on this coming March 2.


Mr. Deputy Speaker:: Order. I must interrupt the hon. member because I tried to give him a little time but he is taking a bit too long.


EXTERNAL AFFAIRS-ROSEAU RIVER PROJECT-VIOLATION OF BOUNDARY WATERS TREATY-GOVERNMENT POSITION
Arthur Jacob (Jake) Epp: Mr. Speaker, today I want to expand on the question I asked the Secretary of State for External Affairs (Mr. Jamieson) on February 14 which appears at page 2833 of Hansard. It related to questions 1 asked the minister many, many times about the position of the Canadian government with regard to the so-called Roseau River project.
The Roseau River project primarily is a channel-widening project of the Roseau River south of the forty-ninth parallel in the state of Minnesota. The purpose of that project is primarily twofold: first, to add additional land through drainage for purposes of agriculture; second, to control flooding in the state of Minnesota, especially during spring runoff.
Adjournment Debate
The effect of the Roseau River project as visualized by the U.S. army corps of engineers would have two influences on Canada which are not acceptable to Manitobans. First, the volume of flow would increase by approximately 25 per cent during peak spring runoff. We have had difficulties with flooding along the Canadian portion of the Roseau River. Second, the speed of flow would increase, especially during peak runoff periods, thus adding to erosion and to the carrying of silt along the river.
As is the procedure of the International Joint Commission, hearings were held in Manitoba in order to get the reaction of Manitobans to this project. The previous New Democratic government generally favoured the project, despite the fact that officials of the department of mines and resources and environmental management in the hearings at Dominion City on January 14, 1976 admitted under questioning that there was a possibility that article IV of the Boundary Waters Treaty could be violated if the project were to go forward as planned by the U.S. army corps of engineers.
Further, after a second study, the International Joint Commission recommended that if the project were to go ahead, the United States would be obligated to pay approximately $3.1 million in mitigating works. This figure was later increased to $4 million. This was not acceptable to Manitoba. The U.S. army corps of engineers was ready to modify the program, namely through an impoundment system whereby dams and dykes would be built and the water would be released during the low runoff period.
My question is simply this. With the change of government in Manitoba, the present Manitoba government, and I as a member of parliament throughout the years that the Roseau has been discussed, have objected to the plans because we see absolutely no benefits to Manitoba. In fact, the amount of money that would have to be paid for mitigating works simply is not sufficient, not even for the known factor projects that would have to be put into place, much less the unknown ones.
Therefore, on February 14, I specifically asked the minister what was the government of Canada's position on the Roseau River project, whether they still supported the position of the government of Manitoba, namely that the Roseau River project had no benefit to Manitoba and in fact had many detrimental effects. The minister replied at page 2833, as follows, and I think it is important to put this reply on the record:
Mr. Speaker, I would prefer to withhold the answer on that question for at least 24 hours. I had a preliminary discussion with the responsible minister from Manitoba this morning. As soon as question period is over, I will be meeting him at the Conference Centre to discuss these questions, so 1 might be in a better position to elaborate tomorrow or the next day.
I am not standing here accusing the minister for not having given me the answer. Possibly the parliamentary secretary can explain to Manitobans, specifically the constituents of Provencher and their member of parliament, the position of the government of Canada at this time. Does the government of Canada still support the position of the government of Manitoba, namely that the project should not go forward until all mitigating works are in place and are clearly understood? Are

February 20, 1978
Adjournment Debate
they also taking the position that, if these mitigating works are not regarded as adequate the recommendation should be forwarded to the International Joint Commission and to our American counterparts that the project is not acceptable? That is the issue and I await the reply of the parliamentary secretary.


Mr. Robert Daudlin (Parliamentary Secretary to Secretary of State):: Mr. Speaker, I thank the hon. member for having brought this question forward again so that a further answer might be provided to him.
Discussions with the United States regarding the effects on Canada of proposed flood control works along the Roseau River in Minnesota have been under way since the 1920's. An International Joint Commission report was released last fall on works planned by the U.S. corps of engineers. The report recommended that the project be allowed to go ahead, but that the United States pay $3 million to $4 million for the construction of control works in Manitoba to protect the province from possible increased flood damage. The U.S. has agreed in principle with this recommendation and has forwarded a draft agreement on the question for our examination.
The IJC was, it should be noted, requested to perform essentially an engineering study of the effects of higher flood flows. In its report, the Commission also noted, however, that
there might be other significant environmental effects above and beyond the question of flooding.
Last month, the Manitoba government indicated to the SSEA that the province had concerns over this question of unforeseen environmental effects, and that it wished to suspend further talks with the United States on Roseau until the matter had been resolved. The Canadian government is fully aware of the importance of the environmental aspects of Roseau, and has suggested that federal and provincial officials work together to clarify the matter.
We have informed United States authorities that we are currently reviewing the question of environmental effects. We have also requested further clarification of the exact form of the proposed works. The corps of engineers is currently modifying its original plans to reduce wetlands drainage, and there have been suggestions for modification of the whole concept of the scheme. The current absence of precise information on that design of the system makes it difficult for us to assess exactly the project's potential impact on Canada.
Given the forthcoming attitudes of the parties involved in the Roseau question, there is no reason to believe that a mutually satisfactory resolution cannot be achieved. We will continue to ensure that Canadian interests are fully protected.


Mr. Deputy Speaker:: The motion to adjourn the House is now deemed to have been adopted. Accordingly this House stands adjourned until tomorrow at 2 p.m.
Motion agreed to and the House adjourned at 10.29 p.m.

Tuesday, February 21, 1978