1980-12-17

ROUTINE PROCEEDINGS


Mr. Bruce Halliday (Oxford):: Madam Speaker, 1 rise under the provisions of Standing Order 43 on a matter of urgent and pressing necessity. To ensure the viability and the quality of the health care system in Canada, 1 move, seconded by the hon. member for St. John's East (Mr. McGrath):
That the government guarantee to live up to its legal and moral obligations to medicare under the Established Programs Financing Act.


Madam Speaker:: Presentation of this motion requires the unanimous consent of the House. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


ELLIOT LAKE URANIUM MINERS-RESPONSIBILITY FOR SAFETY VESTED IN ATOMIC ENERGY CONTROL BOARD-MOTION UNDER
Mr. Bill Yurko (Edmonton East):: Madam Speaker, I rise on a matter of urgent and pressing necessity under the provisions of Standing Order 43. In light of the Ontario legislature select committee report which specifically states that the federal government has failed to protect the miners and environment of Elliot Lake, I move, seconded by the hon. member for Saskatoon West (Mr. Hnatyshyn):
That this House undertake immediately to consolidate all federal regulatory responsibility for uranium mining and processing in Canada under the Atomic Energy Control Board, and that the Board be requested to deal immediately with all safety and environmental deficiencies at Elliot Lake in consultation with the province of Ontario.


Madam Speaker:: For presentation, this motion requires the unanimous consent of the House. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


ADMINISTRATION OF JUSTICE
Mr. Neil Young (Beaches):: Madam Speaker, I rise under the provisions of Standing Order 43. Over 800 Canadians, many of them mentally retarded individuals, are being detained in institutions for long periods subsequent to being charged with committing a crime. Being found not fit to stand trial or not guilty on account of insanity, they are committed to those institutions under the Lieutenant Governor warrant provisions of the Criminal Code for indefinite periods.
One person who has never had benefit of a trial is Emerson Bonnar of New Brunswick, who has been detained since 1964, at which time he was charged with attempting to steal a handbag. I move, seconded by the hon. member for Winnipeg North Centre (Mr. Knowles):
That this House request the Minister of Justice to investigate immediately the case of Emerson Bonnar with a view to securing his release from this cruel and unusual treatment, and that the minister bring before this House legislative proposals based on the recommendations of the 1976 report of the Law Reform Commission of Canada so that mentally handicapped and mentally disabled Canadians charged with an offence are entitled to a fair trial before the law.


Madam Speaker:: For presentation, this motion requires the unanimous consent of the House. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


INCOME TAX PER DIEM MEALS ALLOWANCE FOR COMMERCIAL TRAVELLERS-MOTION UNDER S O. 43
Mr. Stan Darling (Parry Sound-Muskoka):: Madam Speaker, I rise under the provisions of Standing Order 43 on a matter of urgent and pressing necessity, in particular to the commercial travellers in this country. In light of the fact that commercial travellers are allowed to claim only $15 per day for meals-without vouchers-for income tax purposes while public servants are allowed to claim $21 per day, I move, seconded by the hon. member for Medicine Hat (Mr. Hargrave):
That commercial travellers be allowed to claim the same amount per day as public servants for meals (without vouchers) for income tax purposes.


Madam Speaker:: For presentation, this motion requires the unanimous consent of the House. Is there unanimous consent?

December 17, 1980


Some hon. Members:: Agreed.


Some hon. Members:: No.


PUBLIC SERVICE
Mr. Otto Jelinek (Halton):: Madam Speaker, I rise under the provisions of Standing Order 43. In view of the fact that the fragmentation of union power within each essential service sector contributes dramatically not only to airline strikes, as presently seems to be the case with Air Canada, but affects other essential services like the Post Office and so on, and because of this government's inaction in this regard causing an unprecedented 55,041,600 man-days lost as a result of strikes and walk-outs since the Finkelman report was tabled in 1974, which report recommended, among other things, sector bargaining, I suggest the time is long overdue to take some specific action other than to just hope, as the Minister of Transport (Mr. Pepin) said yesterday. That, of course, is not enough. Therefore I move, seconded by the hon. member for Lisgar (Mr. Murta):
O)
That the President of the Treasury Board be instructed to introduce forthwith legislation requiring union groups in a single public service sector to bargain with the government on a joint basis only, in order to avoid situations such as the pending Air Canada strike, and in the meantime take all necessary and immediate precautions that will assure the hundreds of thousands of Canadians strike-free air travel during the forthcoming holiday season.


Mr. Pepin:: Flight attendants are not civil servants.


Madam Speaker:: For presentation, this motion requires the unanimous consent of the House. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


FORESTRY
Mr. Vince Dantzer (Okanagan North):: Madam Speaker, I rise under the provisions of Standing Order 43. Forest resources are being depleted faster than they can be replaced in north Okanagan, and indeed throughout British Columbia. Since this government annually collects more than $500 million from the forest industry in British Columbia and yet reinvests what amounts to only one cent for each of those dollars, and because this appears to be a further example of Ottawa's concept of sharing-that is, taking from the west and giving nothing in return-I move, seconded by the hon. member for Okanagan-Similkameen (Mr. King):
Thai this government recognize the contribution of over one million Canadians who owe their livelihood to the forest industry and act immediately to return some of the plunder to western Canada to fund, in co-operation with the province, the establishment and maintenance of an effective forest management program.


Madam Speaker:: For presentation, such a motion requires the unanimous consent of the House. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


CANADIAN NATIONAL RAILWAYS
Mr. Les Benjamin (Regina West):: Madam Speaker, I rise on a matter of urgent and pressing necessity under the provisions of Standing Order 43. It concerns the abandonment of CN Express service by Canadian National Railways. In view of the fact that the hon. member for Restigouche (Mr. Har-quail) told a public meeting in Campbellton on Sunday that the Liberal caucus is 100 per cent behind saving CN Express, but the Minister of Transport (Mr. Pepin) is refusing to use existing federal authority to make CN and CP live up to their commitments to provide express service, I move, seconded by the hon. member for Churchill (Mr. Murphy):
That the Minister of Transport tell the House either that he is no longer a member of the Liberal caucus or that he is going to do something to stop CN from abandoning its express service.


Madam Speaker:: For presentation, such a motion requires the unanimous consent of the House. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


INDUSTRY
Mr. Walter McLean (Waterloo):: Madam Speaker, I rise under the provisions of Standing Order 43. There was an announcement that the government will decide shortly on a site for the expansion of the de Havilland Aircraft facility in order to assemble the Dash-8 aircraft. Since the government's objective is to create jobs outside of metropolitan areas, and since there is a pool of skilled labour available in the Kitchen-er-Waterloo, Cambridge and Guelph area due to lay-offs by suppliers to the automotive industry, and there is a receptive community there, I move, seconded by the hon. member for Cambridge (Mr. Speyer):
December 17, 1980

That this House direct the government to instruct de Haviiland officers to meet with elected business and labour leaders in the Waterloo region fully to explore the feasibility of this expansion at Waterloo-Wellington airport.


Madam Speaker:: For presentation, such a motion requires the unanimous consent of the Elouse. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


THE MINISTRY
Mr. Bob Corbett (Fundy-Royal):: Madam Speaker, I rise under the provisions of Standing Order 43. Atlantic Canada has the highest unemployment and the lowest per capita income in the nation. When asked what he intended to do about it, the Minister of Finance (Mr. MacEachen) responded with the curt answer: "Read the budget". When asked what he planned to do to help his neighbours and fellow maritimers to put meat and potatoes on their tables and feed their families, the minister showed his disdain, contempt, arrogance and certainly his lack of concern by not even giving Atlantic Canadians the courtesy of a one-word reply: "Nothing". Rather, he sat and sulked. Therefore I move, seconded by the hon. member for York-Sunbury (Mr. Howie):
That in view of the minister's shameful performance and his callous attitude toward his fellow Atlantic Canadians, he resign immediately.


Mr. Baker (Nepean-Carleton):: He is the "incredible sulk."


Madam Speaker:: For presentation, such a motion requires the unanimous consent of the House. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.



ORAL QUESTION PERIOD


Right Hon. Joe Clark (Leader of the Opposition):: Madam Speaker, my question is for the Prime Minister. It concerns Canadian jobs and Canadian investment that are being unnec-cessarily lost as a result of this government's policies. The Prime Minister will know that Canadian-owned drilling rigs in an industry which is 80 to 90 per cent owned by the people of this country are lining up at the Canada-U.S. border to leave this country. He will know that a survey by The Calgary
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Herald estimates that some 376 Canadian drilling rigs will move to the United States, causing at least 22,500 Canadians to lose their jobs. The drilling association says that this flight of jobs and investment from Canada is a direct result of the government's energy policy.
Will the Prime Minister tell the House whether his government is considering any change in that policy to stop this loss of jobs and Canadian investment?


Right Hon. P. E. Trudeau (Prime Minister):: Madam Speaker, the Minister of Energy, Mines and Resources and his officials have been meeting with various representatives of the industry. We have been asking them to give us their figures indicating what degree of loss, if any, they pretend will happen as a result of the national energy policy.


Some hon. Members:: Pretend?


Pierre Elliott Trudeau: We have been having these meetings. Our figures show that predictions by the industry that they will suffer drastic losses are not justified. This is a matter which can be established by statistical analysis and by facts. We are still expecting from several of them the submission of their failures and the magnitude of drilling which had been projected and so on. When we have these figures, we will be able to see if in fact the new national energy policy does have these dire consequences, which they are naturally talking about because nobody likes to pay increased taxes. If our figures are correct, and we believe they are until they are contradicted with contrary submissions, the petroleum industry and the drilling section of it, and the exploration section of it in particular, will be in a position to have ample cash flow and funds to continue their policy.
I repeat, this is a matter which is trying to be established by the minister and his officials. If we have the co-operation of the industry, which many of the members of it are giving now, we will be able to see if any adjustments are necessary; but as of this date we have no evidence that such adjustments are necessary.


Charles Joseph Clark: Madam Speaker, it might be hard to see that evidence from Saudi Arabia. However, it is very evident when one is in western Canada.


Some hon. Members:: Hear, hear!


Charles Joseph Clark: The Prime Minister talks of pretence. The fact is that at least 66 drilling rigs have already left. If he wants to find more, he can go to Coutts-that is the town in Alberta, not his assistant-and look at the line-up of other rigs standing there ready to leave.
Let me deal with another dimension to this problem because it is not simply in western Canada that jobs are being lost; they are being lost right across this country. I received information this morning that in the rubber industry in southwestern Ontario, if present economic and energy policies continue, there will be a job loss of some 300 to 400 jobs in that industry

December 17, 1980
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alone in Kitchener-Waterloo and throughout southwestern Ontario. That will also occur in the automotive industry, in the service sector and in other Ontario and Quebec industries which count on the oil industry as a customer.
Does the Government of Canada intend any changes to protect the industries of Ontario and Quebec which are being damaged right now, to protect the jobs of central Canadians that are now being lost as a result of the energy policy of the Liberal government?


Pierre Elliott Trudeau: Naturally, Madam Speaker, the policy proposed by the government in the budget will attempt to take more money from the industry than it has been giving in the past to the Government of Canada. As hon. members know, in the past the take from that industry was shared, with 45 per cent going to the government of the province of Alberta, 45 per cent to the industry and only 10 per cent to the Government of Canada.


Some hon. Members:: Not true.


Pierre Elliott Trudeau: We told the government of Alberta that we intended to reduce its take from 45 to 43 per cent. Naturally, nobody likes to receive less money. But we have also told the industry, and we were supported in this by the Premier of Alberta, that the industry itself would have to pay a larger share. Naturally the industry is unhappy and is screaming about it.
The difference is, Madam Speaker, that we are not necessarily falling for the line that they are putting out, as the Leader of the Opposition is apparently doing. He is already, and is always, prepared to cave in to any suggestion by anyone but the federal government that they are right and that the government is wrong. The figures we have show that as of now there are no drastic changes in the situation. I have some figures here indicating that of 587 drill rigs in Canada as of December 9, just last week, 458 were still drilling. If you compare that with a year ago, as one hon. member opposite asks me, there were 436 drilling in December, 1979, at the time of the Tory budget, out of a total of 510 rigs in Canada.


An hon. Member:: What about next year?


Pierre Elliott Trudeau: The hon. member from Toronto keeps asking about next year. I am showing that at the present time there is no drastic departure of rigs or stopping of drilling and there is no drastic increase in the number of people at unemployment offices in Alberta from that industry asking for new jobs.


An hon. Member:: You must be in the Sahara. Get your head out of the sand.


Pierre Elliott Trudeau: Hon. members talk about the Sahara desert. I do not think they have ever been there. I have not been there myself in recent years, but it seems to me to be the kind of dryness that is bringing their own minds to rot.


Some hon. Members:: Oh, oh!


Charles Joseph Clark: Madam Speaker, if the Prime Minister believes that no rigs are leaving, he believes there is no snow on the ground in Ottawa.


Some hon. Members:: Hear, hear!


Charles Joseph Clark: He should free himself from his own propaganda and realize that the problem here is not with the provincial governments and not with the multinationals. The companies which are being driven to leave Canada are small Canadian-owned companies, exempted from the taxes in our budget precisely to keep them here in Canada, but having to face a tax as high from the Liberal party as the multinationals face. They are faced with the choice of going bankrupt or going south, so they are going south and going in large numbers. The Prime Minister apparently does not care about that loss of jobs and that loss of investment.


INQUIRY RESPECTING POSSIBLE REPERCUSSIONS OF PROGRAM IN UNITED STATES
Charles Joseph Clark: Madam Speaker, let me address a supplementary question to the Secretary of State for External Affairs, who will be aware of the provisions regarding reciprocal discrimination of GATT, of OECD and of the United States mineral lands and mining act. Has the Government of Canada yet received, formally or informally-and I emphasize "formally or informally"-any indication that the Canadian energy package is causing the United States to consider actions which might lead to an even greater loss of jobs in Canada in industries other than simply the petroleum and related industries, or which might affect Canada's bargaining position on the fisheries treaty, on the Garrison project, on the "Buy American" program or on any other question?


Hon. Mark MacGuigan (Secretary of State for External Affairs):: Madam Speaker, to the best of my knowledge, and 1 think it is fairly complete on this matter, we have not received any kind of representations from the U.S. government, and we believe our action is fully in accord with our international undertakings. I might say it was within this atmosphere that the U. S. Congress has just allowed us the convention tax exemption which we have been seeking for so long.


Some hon. Members:: Hear, hear!


SHUTDOWN OF DRILLING RIGS IN SASKATCHEWAN
Mr. Bill McKnight (Kindersley-Lloydminster):: Madam Speaker, I should like to address my question to the Prime Minister. Is he aware that his 8 per cent wellhead tax, which in real fact will be much higher, will cause the shutdown of low-producing wells in western Canada, which will cause the manufacturing industry of service equipment to come to a complete stop? If he wants a specific example, Zoron Krac Manufacturing in Kindersley has shut down a contract of 11 service rigs at over $1 million and laid off 14 workers. What is he going to do about it now?
December 17, 1980


Pierre Elliott Trudeau: Madam Speaker, unfortunately I have not been given notice of this question, so I cannot comment on this particular point. The point 1 was making in answer to the question by the hon. member's leader is not that there were no rigs leaving. The point 1 was making was that there is not a fundamental difference between the situation this December, as of last week, and 12 months ago. I have conceded that the national energy policy obviously does expect the Canadian government and the Canadian people to receive more money from the industry.
In so far as the particular case pointed out by the hon. member is concerned, I can look into that. I said, once again in answer to the hon. member's leader, that we are looking at all these problems case by case and testing our national energy policy as it would apply to particular industries and particular corporations. If we have their co-operation, as we have in the case of some of them, it is possible that we will be able to take corrective measures.


William Hunter (Bill) McKnight: Madam Speaker, if the Prime Minister does not care about the 15 workers in Kindersley, Saskatchewan, maybe he cares about the workers in Ontario and Quebec-


An hon. Member:: He did not say that.


William Hunter (Bill) McKnight: -who are going to be done out of their jobs in the auto manufacturing and heavy truck manufacturing industry because of the policies of his government, which are arrogant and inflexible toward the energy area of my part of my country, and also the Prime Minister's country. The Prime Minister is causing unemployment in Ontario and Quebec, not just in western Canada.
What is the Prime Minister going to do about the potentially unemployed of Ontario and Quebec, if he does not care about the unemployed in Kindersley, Saskatchewan?


Pierre Elliott Trudeau: Madam Speaker, 1 fail to see how the hon. member can draw from my answer the conclusion that I do not care about the unemployed in Saskatchewan. On the contrary, I indicated that if he had given me notice of his question 1 would perhaps have been able to look at that particular case and, with the assistance of the Minister of Employment and Immigration and the Minister of Energy, Mines and Resources, indicate if there is anything we can do about that particular case.
For this, we must, first of all, have the co-operation of the industry itself and, second, we cannot assume that any threat by any taxpayer to leave if his taxes are increased is necessarily based on fact. It is certain that all taxpayers-and the petroleum industry is no exception-do not like to pay a higher share of their profits to any government.
The point I am making to the hon. member is that we have to see if our energy policy is good not only for the particular industry about which the hon. member seems to indicate concern, but also if it is good for the taxpayers and consumers
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of Canada. This is the main concern we have expressed in our national energy policy.


FINANCE
Mr. Edward Broadbent (Oshawa):: Madam Speaker, 1 have a question for the Prime Minister. Contrary to what he promised during the election campaign, the Minister of Finance made it clear yesterday that the Canadian interest rate policy will remain inextricably linked to that of the United States. Today a number of major banks in the United States predicted that the prime rate in their country will rise to 25 per cent, an astronomical figure. If this government continues its policy of linking our rate to the American rate, that will mean mortgage rates going up beyond 20 per cent. It will mean that businessmen will suffer. It will mean an increase in debt loads on farmers. Is there any limit which the Government of Canada will set for itself, or will it inextricably follow the United States to the economic disaster which it is establishing and import that disaster to Canada?


Pierre Elliott Trudeau: Madam Speaker, if the hon. member concludes from the answer given yesterday by the Minister of Finance that our policies are inextricably linked to those of the United States, 1 suggest he return to Hansard and read the answer given by the minister. Because the minister said exactly the contrary yesterday. He said that our policies were not set by the United States. He said that the Canadian government was following its own policy, but that naturally the money markets in the world do have an influence on each other. That is not saying that we are linking our policies to those in the United States; rather, it is saying that all the money markets in the world will be inevitably influenced by each other unless a particular country chooses to embark upon exchange controls.


John Edward Broadbent: Madam Speaker, the Prime Minister promised an independent rate during the campaign. Yesterday, the Minister of Finance said that the rates between Canada and the United States are inextricably linked. If that is not saying that we do not have an independent policy, I do not know what one would have to say to make that assertion.
Considering that the Minister of Finance has already acknowledged that his budget forecasts are wrong, that we now have more than one million unemployed-and the Minister of Finance has acknowledged that that number will go up-and that interest rates again are shooting up in both countries, will the Prime Minister recognize that the budget which was brought down a while ago is now completely out of date, will he acknowledge that we have an economic crisis, and will be promise a new budget will be brought down in the new year when Parliament returns?

December 17, 1980
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Pierre Elliott Trudeau: Madam Speaker, I am not sure whether I can convince the hon. member, but there is a difference between being influenced by the monetary situation in the markets of the world, particularly the market in New York which is so important to Canada, and linking our monetary and fiscal policy directly to that of the United States.
I appeal to the hon. member to read again what the minister said yesterday in reply, because he will see that what the minister said is that unless we want to have exchange controls-and the minister has made the point that he is not looking in that direction-any budget made in Canada will necessarily be affected by the economy of the United States, which in turn will have an effect on the Canadian economy. No new budget brought down in January, as suggested by the Leader of the NDP, no matter how perfect, even if it had the approval of the hon. member for Broadview-Greenwood and were countersigned by the hon. member for Winnipeg North Centre, could be absolutely detached from any impact of the American economy, without going the route of exchange controls and a host of other controls. So the hon. member should understand that when he returns, day after day, to the same question and gets, day after day, the same answer which he refuses to understand.


John Edward Broadbent: Madam Speaker, for a minute the Prime Minister was getting near to accepting some good ideas, but I notice that finally he reverted to his old answer. The Prime Minister also knows that there are a number of economists, who are unaffiliated with any political party in Canada, who say we can have an independent interest rate policy which does not entail exchange controls, and the Prime Minister should admit that.
Since in the past few weeks the government has ruled out a fair prices commission, has ruled out income tax cuts for low and middle-income Canadians and has ruled out special programs to assist home owners with mortgages, can the Prime Minister announce one program, one policy, which the government will bring in before Christmas and which recognizes the fact that we have an economic crisis in this country?


Pierre Elliott Trudeau: As the Minister of Finance has repeatedly pointed out to the leader of the NDP and to the members of his party, every suggestion they put forward-and this may be true of the economists he pretends he is quoting-entails new spending and frequently vastly increased spending by the federal government. It is our view that increasing the deficit by new spending at this time, which would involve borrowing or higher taxes, which the hon. member also rejects, would lead to higher inflation and to higher interest rates, which is precisely what the hon. member is lamenting.


HEALTH CARE
Hon. James A. McGrath (St. John's East):: Madam Speaker, I have a question for the Minister of National Health and Welfare. In view of the threat in the budget to cut back on federal funding of social programs, which can only mean the Canada Assistance Plan and funding for medicare, and in light of the failure of the minister to deal in any substantive way or in any way whatsoever with the recommendations contained in the Hall report, thereby creating an air of uncertainty around federal funding under medicare, prompting the provincial ministers meeting in Toronto yesterday to call upon the federal government to make a commitment, I now ask the minister whether she is prepared to give a commitment to the House and to the provinces today that there will be no cutback of federal funding for medicare?


Hon. Monique Begin (Minister of National Health and Welfare):: Madam Speaker, the hon. member has made several mistakes in his question, if I may suggest. First of all, he alleged inaction with regard to Justice Hall's report to restore medicare to its full integrity. His allegation is unwarranted. 1 have begged the provincial ministers to let me know if the immediate implementation of the recommendation of Mr. Justice Hall to the federal government to ban extra billing and to give the medical profession a fair process of negotiation would at all restore medicare. I have asked them to let me know what we can do to strengthen their hand to carry out their responsibility. Their answer was no to that question. They asked me to wait and to consult with them fully, which I promised to do.
I believe that we will not want to disrupt the services to the public given under medicare, and that is why I know that the provincial ministers will come to the same conclusions as are contained in the analysis of Mr. Justice Hall, namely, that there are problems in certain parts of the system and that we must address these problems.
I also read the press release of the provincial health ministers which was put out yesterday. I am very pleased that they recognized the role of the federal government in medicare. They know very well that moneys are being paid fully every month, that the program is up for renegotiation, and I hope that we will strengthen the conditions and their control in these renegotiations. That has nothing to do with cuts.


James Aloysius McGrath: Madam Speaker, I note that the minister avoided very carefully making any commitment on the part of the federal government. The ministers of the provinces did let her know yesterday because the press release said:
If the federal government follows through on those plans when the current arrangements come up for renegotiation next year, provincial medical insurance programs will face severe restraint, the joint statement warned.
That language could not be clearer. In light of the fact that she is about to enter into negotiations and the provinces must be prepared to make budgetary plans, given the fiscal situation of the country today, especially in the poorer provinces, is the

December 17, 1980

minister prepared to give an unqualified commitment on the part of the government that there will be adequate funding over the next five-year period to cover inflation and improvements in the medical insurance program? Can she give the general assurance right now to the provinces so that they can get on with their planning?


Monique Bégin: The analysis of Mr. Justice Hall is very clear as to the funding of the medicare system in Canada. If the hon. member would take the trouble to read the report carefully, he will see that Mr. Justice Hall does not consider that there is underfunding by the federal government. On the other hand, the CMA issued a press release only a few days ago which speaks of underfunding in some of the provinces which led to the erosion of medicare. That is the analysis on which we base our work.
1 said just now in my previous reply that we are not talking of any cuts. The hon. member makes a mistake if he thinks that only CAP and medicare are social programs in the broad sense. We are reviewing our programs with a view to focusing on those most in need. It is obvious, and we have repeated it often, that no cuts are being made to medicare in any way, shape or form, but in the renegotiation we will want more control and compliance with the conditions.


NATIONAL ENERGY PROGRAM
Hon. Michael Wilson (Etobicoke Centre):: Madam Speaker, yesterday the Minister of Energy, Mines and Resources suggested that I should speak directly to the Prime Minister on the question of oil negotiations, so I will address my question to him today. Yesterday his minister indicated some slight flexibility on the whole question of oil pricing in connection with the energy deadlock between the province of Alberta and Ottawa. Since the Minister of Finance previously indicated absolutely no flexibility on this subject, my question for the Prime Minister is: which minister is speaking for the government? Is a price increase of $6 per barrel under consideration, as seemed to be indicated by the Minister of Energy, Mines and Resources yesterday, or is there a further increase of $6.50 to $7.50, including the petroleum compensation charge, as indicated by his former colleague, Donald Macdonald, in a speech yesterday?


Pierre Elliott Trudeau: Madam Speaker, I doubt whether Mr. Macdonald is privy to the kind of negotiation which the federal government would be prepared to embark upon with the government of Alberta. My understanding is that there have been meetings between deputy ministers and officials in the relative departments, but at the ministerial level the Minister of Energy, Mines and Resources merely indicated that we were prepared to resume
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talks, as 1 believe I indicated two or three days after the budget.
That is still our position. We are ready to discuss various aspects of the new energy policy, as I indicated in answer to an earlier question, both with the industry and with the province. However, what must be understood is that in its fundamentals, in the attempt we are making in that new energy policy to get a larger share of petroleum revenue for the federal government, and to ensure this share is employed throughout Canada to develop self-reliance in energy, particularly in the petroleum industry, the policy will not be changed. These are principles upon which the government fought an election campaign, obtained the support of the people, and these are the principles with which we intend to push forward.


An hon. Member:: You are dividing the country.


Michael Holcombe Wilson: Madam Speaker, I understand from that answer that the flexibility on the question of price, as indicated by the Minister of Energy, Mines and Resources, is not under consideration and that the minister was offside in the statement he made to me yesterday when he indicated there was some possibility the government would accept a price increase of up to $1.50 per barrel.
My supplementary question is directed to the Prime Minister. In the event the government decides, to use the Prime Minister's own words, to cave in to the industry, would he make a firm commitment to the House today that any increase in price over and above the price indicated in the energy program would be accompanied by some form of support to low and middle-income earners? I am thinking of something similar to the energy tax credit included in the budget of the hon. member for St. John's West.


Mr. Crosbie:: Hear, hear!


Pierre Elliott Trudeau: Madam Speaker, just responding a moment to the preamble of the hon. member, I should say no, he is not justified in drawing that conclusion. I indicated that the minister and the government were prepared to embark upon new negotiations. I did not exclude or include any particular area of negotiation. I do not see why the hon. member says that there is a contradiction between what the minister said yesterday on prices and what I said today.
As for his second point or his question concerning support to the Canadian consumer, I repeat what has been pointed out by the Minister of Finance, that compared to the previous government's budget and energy policy, which did not even have the agreement and accord of the Premier of Alberta-


Mr. Hnatyshyn:: Wrong.


John Carnell Crosbie: Wrong again.


Some hon. Members:: Table it.


Pierre Elliott Trudeau: I think this is a matter of disagreement on fact. If an agreement has been reached, I wish the party opposite would establish it by tabling that agreement, or at
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least would contradict the position taken at that time by Premier Lougheed that there had been no agreement.


An hon. Member:: Ask Merv Leitch.


Pierre Elliott Trudeau: The failure of the Clark government to reach an agreement with Alberta is something which 1 understand Albertans themselves are trying to forget. But those are the facts as we know them. If there has been an agreement, I wish the Leader of the Opposition would establish that agreement by tabling the text.


Charles Joseph Clark: The tax credit, Pierre, which helps the poor.


HOUSING
Mrs. Margaret Mitchell (Vancouver East):: Madam Speaker, in the absence of the Minister of Finance, I should like to direct my question to the Prime Minister. Last week the Minister of Finance stated that he wanted to see how the burden of high interest rates will be "expressed on affected groups". Canadian banks last year made over $1 billion in profits as a direct result of the escalating "made-in-America" interest rate policy of the government, and surely the Prime Minister knows that the group most affected is young people who will never own homes under this policy. Will the right hon. gentleman now take positive action and instruct his minister to ask the banks to put aside $1 billion of their lending portfolio for stable, low-interest mortgages so that young people under the age of 35 will finally have a chance to own homes?
[ Translation]


Hon. Pierre Bussieres (Minister of State, Finance):: Madam Speaker, the hon. member is drawing somewhat hasty conclusions about the relationship which might exist between bank profits and fluctuating interest rates. She should know that a close evaluation should be made over a rather long period to draw direct conclusions between this phenomenon and the revenues or profits of banks. Moreover, 1 would suggest to the hon. member that the difficult period which we are now going through should not provoke any panic and make us to jump to extreme conclusions or try to introduce shortterm programs which would have only temporary effects and could even cause problems with the long-term projects proposed in the budget speech.


CALL FOR DIRECT LENDING ROLE BY CMHC FOR RENTAL ACCOMMODATION CONSTRUCTION
Margaret Anne Mitchell: Madam Speaker, certainly the young people of Canada would not see it as a
short-term, temporary program; what they want is a chance to purchase homes.
My supplementary question is directed to the Minister of Public Works who is responsible for Canada Mortgage and Housing Corporation. According to the latest CMHC survey, St. John's, Toronto, Regina, Saskatoon, Calgary, Vancouver and Victoria suffer below zero vacancy rates in rental housing. Since the only rental program offered by the government is MURBs-and even CMHC experts admit that high interest rates have discouraged rich investors from using MURBs- will the ministers, instead of apologizing, act now to reinstitute a CMHC direct lending role for rental construction and public housing in the cities I have mentioned where tenants are on the streets or actually sleeping in cars?


Hon. Paul J. Cosgrove (Minister of Public Works):: Madam Speaker, the announcements of CMHC and the government's addressing of the problem indicate that social housing start increases, which address the same market group, have been in direct response to the question of the tight rental market. That non-profit social housing response is directed toward that very market. I do not believe the hon. member was in the House when I indicated that nearly 1,000 additional units were redirected to the city in British Columbia with the lowest vacancy rate.
I think the hon. member put her finger on the problem when she identified in two questions, first, her priority for young people owning homes, and second, a priority in the rental area. If I had the $1 billion to which the hon. member referred in her first question, I would probably respond to a number of priorities rather than the identification of the one she just mentioned.
V * V


FISHERIES
Mr. Alexandre Cyr (Gaspe):: Madam Speaker, my question is for the hon. Minister of Fisheries and Oceans. At the subcommittee on acid rain, Mr. Schmut, chief of the chemical products hazards division of his department, stated that there are five rivers in Nova Scotia where salmon can no longer reproduce. My question is as follows. Is the minister aware of the number of rivers which are threatened in Quebec by high PH levels, and if not, does he intend to make a biological survey of all Quebec rivers in 1981?


Hon. Romeo LeBlanc (Minister of Fisheries and Oceans):: Madam Speaker, I do not have the exact figures before me, but there is no doubt that many rivers in eastern Canada are threatened. As a matter of fact, that is why we have considerably increased the funds allocated for research and control


December 17, 1980

efforts. The problem is less serious in rivers with a large flow, but for smaller rivers, there is no doubt that this problem is becoming alarming.


SMALL BUSINESS
Hon. J. Robert Howie (York-Sunbury):: Madam Speaker, my question is for the Minister of State for Small Businesses. Where high interest rates, high energy costs and severely restricted credit are shattering the resource and service-based economies of the Atlantic provinces, putting small producers and small businesses, which are the backbone of the Atlantic economy, out of business, will the minister tell the House if his government will propose any new initiatives to alleviate this very serious situation and, if so, when?
[ Translation]


Hon. Charles Lapointe (Minister of State, Small Businesses):: Madam Speaker, I believe a few initiatives have already been taken such as, for instance, extending to the end of March the small business development bond programs, and introducing the bill allowing non-incorporated small businesses and small entrepreneurs to deduct the salary of their spouses from their annual earnings. Finally, under the Small Businesses Loans Act small businesses can now borrow up to $100,000 at a rate of interest of 1 percent over the prime rate. To my mind, Madam Speaker, those measures have been implemented precisely to help small businesses cope with this difficult period caused by high interest rates.


J. Robert Howie: Madam Speaker, I thank the minister for his answer. I suggest to him that, while those measures are very important and are certainly respected, they are infinitesimal compared to the problem which exists in the Atlantic provinces. More dramatic measures with a greater economic impact are required. Will the minister take this matter up with his colleagues in an attempt to give us some real action soon?
[ Translation]


Charles Lapointe: Madam Speaker, as I have already had occasion to mention in the House, there is no doubt that we are concerned about high interest rates and their harmful effects on small businesses in Canada. As I have already said, we are in the process of revising completely all means available to small business to finance itself; this revision is being made in co-operation with banks and non-banking financial institutions. We are also in the process of reviewing the activities of the Federal Business Development Bank. I shall endeavour to speed up the study on the financing of small businesses to be able to do something about the concerns of the hon. member and those of all other hon. members in the House.
Oral Questions


AGRICULTURE
Hon. Bill Jarvis (Perth):: Madam Speaker, my question is for the Minister of Agriculture, who will know that while we in this House talk in terms of 17 per cent interest rates, the farmers of Canada, when they go to borrow working capital, find themselves faced with rates of 20 per cent and more. He will know further that these rates are impossible and that, rather than borrow to finance the purchase of cattle and hogs to finish and fatten for the Canadian market, our farmers are selling off their feed grains. The minister's constituents and mine are selling off their corn and western producers are selling off their feed grains.
What does the minister propose to do about these prohibitive interest rates in order to permit Canadian farmers from coast to coast to produce food in reasonable quantities at reasonable prices for Canadian consumers?


Hon. E. F. Whelan (Minister of Agriculture):: Madam Speaker, the hon. member gave a story on interest rates and what they should be, but he did not complete his story. The interest rate of the Farm Credit Corporation, for which I am responsible, is 12.75 per cent. It has been at this level for several months and it will stay there for several months more. We may run out of money in that area due to the high demand and, in fact, in some areas we may have run out of money already.
Many farmers belong to farm organizations, such as the marketing boards, and their cost structure and cash flow is such that they do not need to borrow as much money as the hon. member has suggested. The hon. member has mentioned two groups of farmers, the hog producers and the beef producers, who do, but they have not looked after themselves as have other groups of farmers through organizations which have the cash flow. I just had dinner-


An hon. Member:: Order.


Some hon. Members:: Oh, oh!


Eugene Whelan: -with one of the largest and most successful turkey producers-


An hon. Member:: You're the turkey.


Eugene Whelan: -in Canada and North America, a man the hon. member knows very well, and he said that there has never been a time when there has been so much stability in the agricultural economy and it has never been so healthy.


William Herbert Jarvis: Madam Speaker, that is either hogwash or cattlewash, whichever the Minister of Agriculture prefers.


Eugene Whelan: Ha, ha!

December 17, 1980
Oral Questions


William Herbert Jarvis: Not one hog, heifer or steer is purchased through farm credit financing. It is the chartered banks of Canada to which Canadian farmers look for their financing.
What does the minister propose to do about a situation, current and serious, where Canadian farmers who want to produce meat for Canadians are prevented from doing so by this government's policies or lack thereof, who find themselves forced to sell the feed grain that they would otherwise be feeding their livestock for the Canadian market, and who cannot sow feed because they cannot afford 20 per cent interest rates?


Eugene Whelan: Madam Speaker, the hon. member has omitted the fact that we are giving interest-free loans to farmers for storable crops, as we have never done before, through new programs which we initiated some time ago. The interest-free loans for storable grains such as soybeans and other products which are put on the market also helps the consumer. When the hon. member talks about hogwash, that is about all he is expert on.


William Herbert Jarvis: What are you going to do? You are the minister.


Eugene Whelan: The hon. member may not be very closely associated with agriculture. He has made no real suggestion with regard to interest rates and what should be done. He should check farmers' incomes, the stability in the agricultural economy and the products which they are putting on the market at the present time. Turkey producers in Canada are making money on the sale of utility turkeys at 79 cents per pound in 1980, and I challenge the hon. member to find the same situation anywhere else in the world.


HEALTH CARE
Mr. Bill Blaikie (Winnipeg-Birds Hill):: Madam Speaker, my question is for the Minister of National Health and Welfare, and it deals with the erosion of medicare, a concern which we in the NDP have been voicing for over two years now and which we were concerned about as far back as 1977 when the Established Programs Financing Act was passed in this House over the worried objections of the father of medicare, Mr. Douglas. The minister has been vocal on the subject, but has done nothing concrete to stem this erosion, instead, she first hid behind the fact that the Hall report had not come out; now she is hiding behind the fact-


An hon. Member:: Question.


William Alexander (Bill) Blaikie: The question is coming-that she needs to consult. In view of the fact that the provinces have consulted among themselves without the minister and have decided, with the exception of Saskatchewan, not to endorse the Hall report.
what does the minister plan to do to stem the erosion of medicare?


Monique Bégin: Madam Speaker, I do not know from where the hon. member draws his conclusion because no such communication has been given to me by any health minister of any province. There was quite a difference in the stand which was publicly taken yesterday. I consider it very normal for health ministers to defend their budgets the day before all the provincial finance ministers are meeting here in Ottawa with the federal Minister of Finance. It is very normal that they would be in favour of medicare and require a full budget for medicare.
When the hon. member suggests that we have not done anything, it indicates that he refuses to understand the complexity of the medicare system in Canada. The hon. member wants the usual simplistic answer in black and white, which does not apply here. I have explained more than once that the same Justice Hall report tells us to ban extra billing provincially first and to correct our federal legislation accordingly, to give doctors a fair process of negotiation but not to withhold payments. We are working together, slowly progressing toward an understanding of the medicare erosion.
There are several provincial ministers of health who are new in their portfolio. They were not even ministers when the Hall commission was established by the previous government. These people must go through the process of understanding the problem.


William Alexander (Bill) Blaikie: Madam Speaker, it is a sad day when we come to expect it as normal that provincial ministers of health do not want to do anything about things like extra billing. Perhaps the minister herself does not realize the human reality behind this. The fact is that because extra billing happens in clusters, both geographically and in terms of specialties, there are many Canadian women who cannot find an obstetrician who is not using extra billing.
My question to the minister is this: When will she show some leadership in this country and bring in legislation to stop extra billing?


Some hon. Members:: Hear, hear!


Monique Bégin: I suppose there are some types of flambuoyant leadership, but there is the more modest type of daily leadership in the fight for ideas. This is a case where we are trying slowly, but I think surely, to convince Canadians that they have already paid for their full universal free medical care services. They are understanding and they are pushing through the various layers in the system to make sure that is what they get.
The hon. member does not understand the complexity of an institution which we want to keep alive. He does not understand that, because of the explanations we have given to participants on panels, on hot lines, in discussions and replies to letters, the public has now obtained in some provinces
December 17, 1980

complete withdrawal of financial barriers and degrees of extra billing in Ontario.


Some hon. Members:: Hear, hear!


PRIVILEGE
Madam Speaker:: I would like to give my decision now on a question of privilege which was raised on Monday by the hon. member for Burnaby (Mr. Robinson). The hon. member's question of privilege was based on allegations of misleading information being offered to the House and to one of its committees by the Solicitor General (Mr. Kaplan).
It seems most appropriate that of the three hon. members who also spoke, two were former solicitors general, that is, the member for Notre-Dame-de-Grace (Mr. Allmand) and the member for Northumberland-Durham (Mr. Lawrence). I am grateful for their contribution to the debate.
While the substance of the matter is of very grave importance, that is to say, the treatment of penitentiary prisoners, I must be guided by the practices and procedures of the House. Allegations of misleading the House affect order in the House rather than the privileges of members, or contempt. However, where an hon. member alleges that the misleading is done deliberately, the member must really "charge" the other member with that offence, because to allege that one hon. member deliberately misled another is, of course, quite unparliamentary. There is no suggestion that the House was deliberately misled in this case.
I suggest what we have before the House in this matter is the following: First, the Solicitor General made statements in the House and in one of its committees regarding certain events which occurred in Dorchester Penitentiary. Second, there was a departmental report relating to these same events. Third, the hon. member for Burnaby alleges that in light of, or in his interpretation of that report the Solicitor General misled the House. Fourth, the Solicitor General denies that he misled the House or one of its committees and he states that his construction of that same report does not lead to that conclusion.
Quite obviously this is really a dispute about facts involved in the unfortunate events in Dorchester Penitentiary, and the interpretation of a report based on these events. It is a matter of order or debate. Certainly, on its face it is not a question of privilege, nor, as a matter of fact, is there a valid point of order.


MR. FRIESEN-RESERVATION OF RIGHT TO RAISE POSSIBLE QUESTION OF PRIVILEGE
Mr. Benno Friesen (Surrey-White Rock-North Delta):: Madam Speaker, the hon. member who created the situation which has made me rise to speak to a question of privilege is
Ways and Means
not here today. I would prefer to wait until that hon. member is here.


POINT OF ORDER
Eugene Whelan: Madam Speaker, 1 rise on a point of order. I would not want to leave the House with lack of information. When the hon. member for Perth (Mr. Jarvis) asked me a question, 1 forgot about the $67 million which was given for drought assistance in the west.


Some hon. Members:: Oh, oh!



ROUTINE PROCEEDINGS


[Stage Direction]
Third report of Special Committee on North-South Relations-Mr. Breau (Gloucester).
[Editor's Note: For text of the above report, see today's Votes and Proceedings.]

Pierre Bussières: Madam Speaker, pursuant to Standing Order 41(2), I would like to table a report entitled "Tax Expenditure Account".


WAYS AND MEANS
Pierre Bussières: Madam Speaker, in accordance with Standing Order 60(1), I am tabling a notice of ways and means motion respecting taxation of oil revenues.

December 17, 1980
Order Paper Questions


CRIMINAL CODE
Mr. Don Blenkarn (Mississauga South) moved: for leave to introduce Bill C-623, to amend the Criminal Code (protection of innocent human life).


Some hon. Members:: Explain.


Donald Alex Blenkarn: Madam Speaker, this bill would provide that abortion cannot take place unless there is a danger to the life of the mother, and not just the health, and that a person be appointed by provincial authority to hospital therapeutic abortion committees for the sole purpose of being an ombudsman for the unborn child.


[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. D. M. Collenette (Parliamentary Secretary to President of the Privy Council):: Madam Speaker, the following questions will be answered today Nos.: 1,367, 1,514, 1,690, 1,691, 1,719, 1,821, and 1,826.


Mr. Cossitt: 1.	What is the annual salary, to the nearest dollar, received by Admiral Robert Falls from the Canadian Armed Forces?
2.	What is the annual salary, to the nearest dollar, received by Admiral Falls as special adviser to the Prime Minister on defence matters?
3.	How many times since his appointment have he and the Prime Minister been in touch with each other, directly or indirectly, on matters of defence?
4.	For what reason was it necessary to appoint Admiral Falls as special defence adviser to the Prime Minister rather than making use of one of the senior officials of the Canadian Armed Forces?


David Michael Collenette: 1 and 2. $60,900-$79,300.
3 and 4. See reply to question No. 1,641 answered December 9, 1980.


Mr. Herbert: Does any problem arise within a department or between departments attributable to the use in various geographical regions of computers that are not compatible?


Mr. Peter Stollery (Parliamentary Secretary to Secretary of State and Minister of Communications):: In so far as the
Department of Communications is concerned, the answer to the above question is as follows: Though there are many actual and potential incompatibilities between computers, particularly when they are of different manufacture and different generations, no problems raise within or between departments that cannot be solved operationally. The major difficulty that does arise occurs when there is a need to transfer or communicate data between computers, and this problem is not confined to government departments or to different geographic regions. The operational solution usually involves standardizing the format of the stored data that would be used by different machines, and then transferring magnetic tapes containing the data between the computers, or obtaining a printed "hardcopy" report and re-entering the data into the other machine. The data transfer could be more efficient. The preferred long-term solution to this data transfer problem is to develop a set of interconnection standards or protocols for electronic communication that will be applicable to all types of networks, computers and terminals. A great deal of work is being done at the international, national, industry and government levels to develop such a solution. In particular studies are under way and solutions being developed by the committees of the International Telecommunications Union and the International Standardization Organization. Canadian manufacturers, telecommunications carriers, government departments and the government electronic data processing standards committee are directly involved in this work. An effective solution to the incompatibility problem, in Canada, will be resolved when solutions are adopted as national standards, and services available to all Canadians are implemented.


Mr. Cossitt: 1.	Did the Secretary of State for External Affairs write a letter dated October 20, 1980, to what he referred to therein as "Special Friends" and, if so (a) was the letter written on the letterhead of the Secretary of State for External Affairs? (b) what is the name and address of each person who received the letter?
2.	Did the letter advise recipients in part that the Windsor-Walkerville Federal Liberal Association was to hold a meeting on Saturday, November 1 at 110 Tecumseh Road East to select delegates "for the upcoming convention of the Liberal Party of Canada (Ont.) which will be held on the weekend of November 28, 29 and 30 in Toronto" and, if so (a) under what authority was the letterhead of the Secretary of State for External Affairs used to advise persons of Liberal party meetings (b) was postage paid on the letters and, if not, were they sent postage free by the minister?


Mark R. MacGuigan: The letter described in the question was sent out by the Secretary of State for External Affairs on October 20, 1980, and by error it was sent on departmental letterhead. When the Secretary of State for External Affairs saw and signed the original letter, it was on blank paper with no letterhead. It was subsequently reproduced by accident on departmental letterhead. As the letter itself states it was the first such letter and office procedures have now been established to ensure proper handling procedures for the future.
December 17, 1980

Ninety-nine such letters were sent and the Secretary of State for External Affairs has personally repaid the government for the stationery, envelopes, and postage.


Mr. Cossitt: Did the Secretary of State for External Affairs write a letter dated October 20, 1980, to what he referred to therein as "Special Friends" advising them in part "the government. . . has eased the requirements for claimants of Unemployment Insurance benefits in the auto industry, a condition which applies only to Windsor" and, if so (a) what is this special treatment being received by Windsor (b) is similar treatment being received in regard to UIC by other municipalities where automobiles are being produced such as Oakville and Oshawa and, if not, for what reason?


Mark R. MacGuigan: See reply to question No. 1,690 answered this day.


Mr. Blenkarn: 1.	What was the cost of installing certain spring steel structures on the west side of the Airport Parkway, described as art by the Minister of Public Works, entitled "The Valley of Arches"?
2.	Who is the person in the government who decided this effort by Mr. Louis Stokes was art in the first place?
3.	Did Mr. Stokes receive a grant from the Canada Council and, if so, what was the amount?
4.	What was the total cost to the NCC or the government generally for this art work?


David Michael Collenette: I am informed by the Canada Council and the National Capital Commission as follows:
1.	The installation cost of Valley of the Arches along the Airport Parkway was $1,800.
2.	The work was selected by the National Capital Commission's advisory committee whose members are regarded as experts on Canadian art, and approved by the executive committee of the commission on the basis of their advice.
3.	Mr. Stokes has never received a grant from the Canada Council.
4.	$9,032 for a period of three years.


Mr. McKinnon: Did the Department of National Defence place a $23,900,000 contract with Canadian Arsenals Ltd. for large calibre ammunition cases and, if so (a) for what calibre (b) how many cases are being purchased?


Hon.   J.-J. Blais@Minister of Supply and Services: I. The
contract referred to by the hon. member was awarded by the Department of Supply and Services on behalf of the Department of National Defence.
(a) 1. MI4-105 MM (II) (105 MM cases for field	(b)	1.126,250
artillery howitzer shells)
2. RW175-76 MM	(3 inch-calibre cases for shells	2. 183,370
fired from AVGP main gun)
	Order Paper Questions	
3. 3"/50	(3 inch-calibre cases for shells fired from naval medium calibre pieces)	3. 28,8104. C4 105 MM (T)	(4 inch-calibre cases for shells fired from the Leopard tank main gun)	4. 190,445Total:	528,875


Mr. McKinnon: Did the Department of National Defence place a $534,423 contract with Philips Electronics Ltd., file number 5PE.2759265 for electron tubes and, if so, in what location are the tubes being manufactured?


Hon.   J.-J. Blais@Minister of Supply and Services: Yes. In a Philips plant in Sweden.

[ Translation]


David Michael Collenette: Madam Speaker, if question No. 738 could be made an order for return, that return would be tabled immediately.
Madam Speaker, I ask that the remaining questions be allowed to stand.


Madam Speaker:: The questions enumerated by the hon. parliamentary secretary have been answered. Is it the pleasure ' of the House that question No. 738 be deemed to have been made an order for return?


Some hon. Members:: Agreed.


Mr. Siddon: 1.	How many applicants were granted admittance to Canada under paragraph ll(3)(a) of the Immigration Regulations who did not qualify in (a) 1976 (b) 1977 (c) 1978 (d) 1979 and from which countries did they originate?
2.	How many applicants were refused admittance to Canada under paragraph 11(3)(6) of the Immigration Regulations, who did qualify in (a) 1976 (b) 1977 (c) 1978 (d) 1979 and from which countries did they originate?
3.	How many immigration officers are empowered to use paragraphs 1 l(3)(a) and (b) of the regulations and where are they located?
4.	How many foreign visitors have applied for landed immigrant status while in Canada and how many applications were (a) granted (b) refused and from which countries did they originate?
Return tabled.

December 17, 1980
Motions for Papers


David Michael Collenette: Madam Speaker, would you kindly call notices of motions for production of papers Nos. 8 and 28?


[Stage Direction]
Motion No. 8-Mr. Orlikow:
That an order of the House do issue for copies of all papers, letters and telegrams received by the Prime Minister, the Minister of National Health and Welfare and the Minister of Indian Affairs and Northern Development regarding the announced cutbacks in medical services to native peoples.
[ Translation]
David Michael Collenette: Madam Speaker, several of the papers requested by the hon. member contain personal and private information provided confidentially to the government under the explicit condition that the private lives of the senders will be respected. In addition, those papers are generally so voluminous that the resources necessary in time and manpower to table them would make their cost really prohibitive. I therefore ask the hon. member, Madam Speaker, to withdraw his motion.


Madam Speaker:: Is the notice of motion withdrawn?


Mr. Orlikow:: Agreed.
Motion withdrawn.


[Stage Direction]
Motion No. 28-Mr. Fulton:
That an humble Address be presented to His Excellency praying that he will cause to be laid before this House before January 31, 1981, copies of all correspondence, telegrams or other documents exchanged between the Department of Fisheries and Oceans and British Columbia Hydro relating to joint funding and proposed dams in British Columbia including the names of the 20 salmon streams slated for damming.
David Michael Collenette: Madam Speaker, there has been no letter, telegram nor any other document exchanged between the Department of Fisheries and Oceans and British Columbia Hydro in connection with joint financing and proposed dams in British Columbia nor any selection of 20 salmon streams slated for fishery development of damming. The proposed hydroelectric development was included in an internal government paper solely prepared for study purposes.
I therefore ask the hon. member to withdraw his motion. [English]


Mr. Jim Fulton (Skeena):: Madam Speaker, I ask, that motion No. 28 be transferred for debate.


Madam Speaker:: Transferred for debate.


David Michael Collenette: 1 ask, Madam Speaker, that the remaining motions for papers be allowed to stand.


Madam Speaker:: Shall the remaining notices of motions for papers be allowed to stand?


Mr. Beatty:: Madam Speaker, two weeks ago today the parliamentary secretary indicated in response to my notice of motion for the production of papers No. 24 that it was acceptable to the government. When I spoke to the parliamentary secretary following that, he indicated to me that the document was not ready to the tabled at that point, although my notice of motion has been dropped from the order paper as a result of the agreement by the government to table the document. The parliamentary secretary indicated at that time that the government wanted to get a French translation of the document, which was the contract between the government and the Canadian Media Corporation, which is to act as an agency of record on behalf of the government.
The parliamentary secretary indicated that he had hoped to be able to make this document available by Monday and, as the House is adjourning for a Christmas recess on Friday, 1 wonder whether 1 can obtain the assurance from the parliamentary secretary that indeed that contract will be available to me and other members of the House before the adjournment for the Christmas recess.


David Michael Collenette: Madam Speaker, the facts as outlined by the hon. member are correct, and I shall try to get the copy for him. We have made the commitment that this motion is acceptable to the government. It is a question of paper work, and I must admit that I am sorry that the translation is taking a little longer than necessary, but 1 will try to obtain it by Friday.


Madam Speaker:: Shall the remaining motions stand?


Some hon. Members:: Agreed.



GOVERNMENT ORDERS

[Stage Direction]
[English)

[Stage Direction]
The House resumed, from Tuesday, December 16, 1980, consideration of the motion of Mr. Lalonde that Bill C-48, to regulate oil and gas interests in Canada lands and to amend the Oil and Gas Production and Conservation Act, be read the second time and referred to the Standing Committee on National Resources and Public Works.
December 17, 1980
Mr. Thomas Siddon (Richmond-South Delta):: Madam Speaker, when the House rose last evening at 10 p.m. my remarks were just getting warmed up with respect to the bill which is before this House, Bill C-48. I had indicated that there were a number of defects in this bill, on which I propose to expand further this afternoon. These defects are in four areas, in particular. This bill reflects a lack of trust in the private sector petroleum producing industries in Canada, a lack of consultation, a lack of co-operation, and an absolute lack of realism with respect to the challenges which lie ahead for this country in achieving the very important goal of oil self-sufficiency within the balance of this century.
In particular, the government's actions in relation to this bill and its so-called energy program and budgetary policies are destroying our quest for self-sufficiency in oil, and I would like to expand upon my reasons for making that assertion.
In the offshore and frontier areas of Canada it is anticipated that there will be something in excess of 100 billion barrels of oil and corresponding very massive quantities of natural gas. The oil alone in current dollars would have a value of something in excess of $3 trillion. That is a magnitude which is almost impossible for any of us to comprehend, but the bill before this House provides the foundations upon which those resources, worth something in the order of $3 trillion, will be managed and administered for many years, and perhaps decades to come.
An astonishing feature of this bill is that there is no technical content, and there is no consideration given to the economic criteria which bear upon the producibility of various deposits, whether they be in the high Arctic, off the coast of Newfoundland, or in the Mackenzie Delta.
There are no technical criteria, and the minister is given no tools under this legislation with which to ensure that we achieve optimum rates of production from these deposits. 1 refer not merely to maximum production but to optimum rates of production in accordance with our national goals. In fact the bill, being titled "an act to regulate oil and gas interests in Canada lands and to amend the Oil and Gas Production and Conservation Act", leads me to astonishment that the tools are not provided to the minister in the quest for these very important goals. There are no tools to ensure that we conserve that resource and use it wisely, or that we develop those areas which are most cost effective and most desirable to develop first. There are no means for consulting with industry experts or provincial government experts, who have decades of experience in managing oil and gas resources.
There is no statutory requirement for ministerial advisory boards or groups. It is an empty shell in that regard, in that the government will not consult expertise before making many important decisions. The bill does, however, set out penalties and procedures for dealing with cases where there is a clear lack of compliance with government rules.
Coupled with this lack of technical and economic guidance are vast areas of ministerial discretion. Many clauses in the
Canada Oil and Gas Act
bill grant discretion to a minister who is not required to consult. For example, I quote from clause 14:
The Minister may select any proposal submitted under this section for the purpose of negotiating an exploration agreement and in making the selection may take into account any factors he considers appropriate in the public interest but is not bound to select any proposal submitted.
There is a huge loophole in that type of power being granted to a minister. Similar areas of ministerial discretion are reflected in clauses 12, 14, 44, 46, 48, and in ten or 20 other clauses granting the minister tremendous powers of discretion. When the minister has these powers which are not guided by proper and thorough technical and economic advice, there is the potential for political abuse, indeed the potential for patronage and political favouritism, and for incompetence by the minister, such as the case with the present Minister of Energy, Mines and Resources (Mr. Lalonde) who is totally unschooled and not versed in the realities of the oil and gas producing industry. He is a lawyer, and there is no requirement in this bill for him to consult industry experts before making decisions.
This same minister will have power to allocate an interest held by a corporation which is perhaps not reaching the 50 per cent Canadian ownership requirement; to allocate that shortfall to some other company which is Canadian owned to the tune of 75 per cent or more. One wonders whether that minister could make millionaires of certain industrial interests in this country which happen to be friends of the political party in power. For example, there are several very well-known corporations with which some front bench members are affiliated or have connections. They could become the oil companies of the future by stealing the resources of existing interests and using them to their own personal advantage. That is one of the principal inherent dangers in these immense powers of discretion which are granted to the minister responsible, the Minister of Energy, Mines and Resources. Coupled with those deficiencies, we have to address the punitive financial factors inherent in this bill, punitive compounded taxation which is driving industries and capital from Canada, as we heard once again in today's question period.
In the conventional oil and gas area, the industries of Alberta, Saskatchewan and British Columbia are now to be subjected not only to a 9 per cent federal excise tax on gasoline, an 8 per cent producer tax on gas and oil, a new natural gas tax on export and domestic consumption, an oil export tax and import compensation charge, but also a Canadian ownership charge. There is also the compounding effect of provincial taxes both at the producer and consumer end of the chain. That is the burden of taxation that the conventional oil industry has to contend with in this country.
Under the provisions of this bill, that imposition upon the industry is compounded. There is also written into this bill a requirement for a 25 per cent back-in privilege of Crown ownership in any industry which chooses to seek, explore, and develop hydrocarbon resources in Canada lands. There is that 25 per cent back-in privilege, or an outright confiscation of 25 per cent of the ownership of the production rights of those

December 17, 1980
Canada Oil and Gas Act
resources, under the confiscation powers granted to the minister by this bill.
In addition, there is a 10 per cent base royalty on gross value of production of oil and gas in these lands, plus a 40 per cent progressive incremental royalty on additional earnings after costs have been deducted. Those costs include the 8 per cent producer tax, federal excise tax, natural gas tax if natural gas is being produced, plus federal income tax. Those industries are being taxed to death in a way that is totally unrelated to the realistic demands for a reasonable rate of return on capital to be invested in these industries. This form of socialism is killing the petroleum industry. We increasingly see evidence of that as each day passes.
These unconscionable levels of taxation and state intervention are going to lead to a very bleak future for all Canadians. The spin-off effect of this is severely impairing our whole economy.
As we approach the end of this century, oil and gas are becoming increasingly elusive. They are increasingly hard to find. One only finds scarce resources by prospecting, and prospecting has always been a very competitive business. It requires healthy competition and adequate rewards to risk-taking. These are essential prerequisites if we are ever to achieve self-sufficiency in oil supply. The price has to be right to reward that risk-taking. Exploration must be encouraged. The high costs of exploration in Arctic ice, on the Grand Banks of Newfoundland and elsewhere, and of this very sophisticated technology must in the final analysis be borne by the consumer.
What is Canada faced with today? What are the economic consequences of the policies of this government? I want to say a few words about how that is linked to the world situation. Again yesterday we had an announcement of increases in the price of oil by OPEC countries. That will make it more attractive for investment capital to go to other parts of the world where that price can be realized and a fair rate of return earned on investment in those sorts of ventures.
We are faced with escalating interest rates. The consequences of that, which result from Canada's dependency on imported oil, and the consequences for our national debt are horrendous. This must be coupled with the fact that our oil imports will be paid for with our collapsing dollar. It is now worth 82 cents. I believe that some time in January it will drop to 80 cents if this government does not take immediate action. Oil and gas stocks are declining in Canada. In spite of the denial by the Prime Minister (Mr. Trudeau) that investment capital, drilling rigs and jobs are leaving this country, this is what Canada faces.
If the interest rate is 20 per cent in the United States, that is because there is a shortage of investment capital and of oil. Intense exploration is under way within the continental United States for hydrocarbon resources which are dearly needed to replace their dependency on high cost imported oil. If investment, in searching for those resources, brings a return of 20 per cent in the United States, there is no way that investment capital is going to stay in this country, even though we may
have many more vast deposits and potential in the long-range future.
All of these factors are signs of movement in the wrong direction. We in Canada are doing something wrong. It cannot be denied, nor can it be blamed upon the Americans. I wish to refer to a graph found in the report released this past week by the Economic Council of Canada, entitled "A Climate of Uncertainty".
In chart 1-1 on page 8 of that report it is clear that growth in Canada's output or gross domestic product has been in a state of decline since 1967. In the period 1977-79, the growth rate was 3 per cent. When we compare with the other major industrialized countries shown on that chart, we find that since 1976 the United States has had an economic resurgence, as have Japan, France, West Germany, Italy, and the United Kingdom. They all reached a low point in growth rate from 1974 to 1976, as a consequence of the 1973 oil embargo. However, Canada's growth rate did not bottom out. We are still on the decline. In spite of all the accusations by the Minister of Finance (Mr. MacEachen) and others, about the Americans and the fact that their economy is the source of our problems in Canada, the facts are quite clear. We have a different kind of regime in this country, a socialistic, isolationist regime which does not understand how a free enterprise economy must work and how a government must conduct itself in support of that economy. We cannot blame the Americans for this serious economic difficulty we are having to face in the next few years.
I want to come to the question of Canadian ownership because this is a very central theme to Bill C-48. The desire to achieve increased Canadian ownership of our petroleum industry, indeed, of all our industry, ought to be an important objective of this nation. Therefore, it is with no reluctance that I give my total support to the objectives of clause 19 and other references in this bill which suggest we should try to achieve at least 50 per cent Canadian ownership of our oil and gas industries in all parts of Canada, including the Canada lands.
I want for a moment, however, to address this question of ownership. Who will own these resources, the people of Canada or the Government of Canada? We hear a lot of talk from the other side of the House to the effect that the government paid 95 per cent of the cost of developing projects like Hibernia, therefore it is only "just" the government should reclaim that, under the presumption that the government is the people. In fact the government is but the servant of the people. Nothing the government spends is earned unless the people earn it. Let us not forget that! We hear too much talk of this great generous government which is doing all these great things for the people.
We know by the provisions of Bill C-48 that the government wants to take an interest or a 25 per cent share of the carried interest in all exploration rights and permits approved under the provisions of this act. When those exploration efforts bear fruit, the government will automatically claim a 25 per cent
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working interest as a condition of approval for commercial production.
1 want to ask where the money is to come from to pay for that interest. We hear of federal grants up to 80 per cent of the exploration costs, if that particular industry has achieved at least 50 per cent Canadian ownership, but where is the money to come from? And by what right is the government to be involved in every commercial effort, in every company exploring for oil in our offshore and frontier areas? That destroys the spirit of competition. No one in this House is today opposing a 25 per cent exploration initiative by Petro-Canada or any other government agency, working in competition with private companies or consortia, but by what right does the federal government feel it should take a share, a piece of the action in all these initiatives, even those which are totally or largely Canadian owned? That destroys the spirit of competition.
It seems to me we should be providing incentives for ordinary Canadians to invest in share equity in these petroleum companies. We should provide those incentives as a means of inducing Canadian participation, rather than imposing the government upon the board rooms and policy decisions of private companies.
Why won't Canadians support high risk ventures? Why can they not be enthusiastic about taking the risks involved in looking for oil 100 miles offshore under 400 feet of water, in the midst of icebergs and the like? Why will Canadians not participate? First of all, the return on investment is too low. Profits are not adequate to provide an attractive return, when you have to pay capital gains tax on the marginal return you do receive. Capital gains tax in this country has been a disincentive to investment in high risk ventures.
In order to finance the major portion of the federal government's debt, Canada Savings Bonds are outbidding the private sector for investment capital. Some $40 billion or $50 billion are recycled in order to offset the accumulated debts of this government, in the form of Canada Savings Bonds. Canadians like that guaranteed assurance of 10 per cent, 11 per cent or 12 per cent from CSBs. They will not take the risk. Then we tell oil industry investors that it is not proper if they want to make a profit in the order of 8 per cent on their investments. We are kidding ourselves.
The financial resources, in the final analysis, if we want Canadian ownership, have to come from the people and from nowhere else. But instead, we have people in this country who put their money into secured term deposits, if they do not buy Canada Savings Bonds. We have a lot of money in the residential housing market. How are we going to find oil, with all our money in housing, and how did it get there? One of the reasons there is so much capital money tied up in housing today is because, after 1971 that became the only form of investment which was exempt from capital gains tax. Where did people begin to speculate? They began to speculate in housing and there was a tremendous drain on the available capital to pursue other higher risk initiatives.
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I am not for the moment advocating that we now impose a capital gains tax on housing. I think the converse is true; we should eliminate capital gains tax, and we should provide special investment incentives and special tax credits to people who will put their money into high risk oil and gas exploration initiatives. That is how we will achieve Canadian ownership.
Another great area of capital waste is in the area of public service pension funds. There are some $20 billion now accumulated in these funds, but merely accumulated on paper because the government has spent it all, to do all these grand and glorious things like printing bilingual games, converting Canada to metric, doing all those things that the people, particularly in my part of the country, reject, and over which they are in a rage. They were frills, and non-essential to our economic security and prosperity.
The government takes this $20 billion of pension money, writes it into a book, and then spends it. In fact the employees of the RCMP, the Public Service of Canada, and the Department of National Defence should be in a position to know that those funds are secured by some form of equity investment. Why are those funds not invested in oil and gas, in a dedicated way, rather than squandered by the Government of Canada? Why are the union pension funds not being invested in Canada in oil and gas, and why are incentives not provided for that to occur, instead of having those funds invested in the United States and elsewhere? Why are the Heritage funds of Alberta and Saskatchewan, and the heritage fund that we should begin to accumulate in the north, why are these not invested in trust in the name of the people who own those resources which are being exploited? They should be selectively invested to secure our long-range energy potential.
This bill and the budget provide little in the way of tax incentives to get capital flowing in a different direction, to get people's money out of their pockets and into those high risk areas that will guarantee our economic prosperity in the future. The government says it will finance these initiatives, but it will merely continue to compound our national deficit. Where will the government get the money?
We only have to look in the budget to see that Petro-Canada will be empowered to go to New York, to West Germany and anywhere else, to borrow money. What is the interest rate in the United States today? We pretend in this country that it is better to borrow from foreign sources, where there is no risk required on the part of those lenders, so that the government can have a flag on the side of some Crown corporation and pretend to be doing all the good things Canadians want. The government prefers to borrow, rather than to encourage the people to invest their own money in Canada, taking the risk in Canada and producing jobs in Canada. To say that foreign investment is bad, but foreign borrowing is good, is really at the ludicrous heart of the dilemma this country faces. Yet it is a typical philosophy of the government opposite which must be changed.
Foreign borrowing that makes us ever-increasingly dependent on the whims of those people who lend to us is going to put this country to its knees. Canadian foreign borrowing in the

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period since 1976 has exceeded that of any other country in the world, and the annual reports of the World Bank show that. Canada has borrowed more money, not per capita, but more money in total than any other nation in the world to finance the extravagances of this government opposite, and that is a travesty!
Why does Canada have such a good credit rating? Why are we able to go out around the world and borrow all this money? This may be embarrassing to some members opposite, but it is a true fact that the equity against which that money is being borrowed is the natural resources of this country, particularly the resources of western Canada, the north and the offshore areas of our country. To finance the lifestyle to which we have become accustomed, we are selling out the future of our country, our children's future and their children's future, because we are borrowing far beyond our means to pay. But when the piper calls the tune we will pay, brothers and sisters. 1 tell you, do not ever think otherwise.
There is another clause in this bill which puts important stress on ensuring Canadian content in these drilling and exploration ventures in the frontier and offshore lands. Clause 10(3) gives the minister power to ensure Canadian content. That is a very high-sounding objective. But I ask why is Petro-Canada going to Japan to buy a drilling platform which could have been produced here in Canada? Why is the Minister of Public Works (Mr. Cosgrove) going to Holland to contract with dredging companies to dredge the Miramichi canal, probably Roberts Bank, and to dredge in the high Arctic? Why are we going to Holland, and why are we going to South America and elsewhere to furnish the lavish Petro-Canada office in Calgary? Where is the Canadian content in that, Mr. Speaker? It is high time this government woke up to what is going on in this country, and it is high time that the government woke up to why the people in my part of the country are in such a rage with the absolute incompetence of this government.
1 shall now speak about the concept of resource ownership to destroy some of the NDP and socialistic myths as to who owns these resources. The provinces, as a condition of confederation, own those resources under setion 92 and section 109 of the British North America Act. That is a matter of legality. It cannot be changed unless we change the constitution. The NDP and the Grits seem to accept these guarantees, but only with great reluctance. I suspect they would like to roll back the clock and revert certain provinces to territorial status. As Mr. Lougheed indicated the other night, that will not happen, if Canada is to remain united.
One wonders why, under section 51 of the government's constitutional resolution, the guarantees under section 91 of the British North America Act, which gave the power to provinces over certain listed areas of jurisdiction in section 92, why is that guarantee to be removed? What is the motive further down the stream? Will we have a national referendum whereby Ontario and Quebec will be faced with a referendum
question empowering the federal government to take control of wellheads or take possession of offshore and high Arctic resources? Will we have that kind of a referendum question in this country? If we do, we will not have a country left after it is over.
The provinces were granted the right to resource ownership because these resources are the building blocks of regional economies. The revenues from those resources from the time of confederation have been used as a tool to build roads, schools, communities, and services, and to create employment opportunities in those great reaches of the country which the Ottawa bureaucrats cannot understand, because they do not know much about what lies beyond the Ottawa city limits. These bureaucrats are 2,000 or 3,000 miles away. There can be a much more efficient use made of the capital accruing from those resources, if those revenues are administered on a local basis. That is at the heart of our confederation. Therefore it is an accepted principle and I hope it remains in perpetuity that the provinces own their resources.
What about the offshore areas of Atlantic and Pacific Canada? Why cannot the coastal provinces and the far-flung regions of Canada develop their regional strengths? Why cannot Newfoundland anticipate having not merely control or a share of the return from those offshore resources but also ownership of them? Why cannot the province of Nova Scotia or British Columbia anticipate ownership of those resources?
Bill C-48 attempts to confirm the federal claim to ownership of offshore resources on the east and west coast. This is wrong. The proceeds from those resources, given the generosity of all Canadians, will in any event be recycled through the Canadian economy and will be shared with all Canadians. But the control cannot be centralized in Ottawa and entrusted into the hands of a political system and ministerial powers of discretion which are wide open to political abuse and discrimination.
This brings me to the question of the Canada lands in the north. I know that my colleague, the hon. member for Western Arctic (Mr. Nickerson), has made that aspect very clear but I want to reiterate what he said yesterday. The resources in the offshore areas and in the Mackenzie Delta in the north in the long run should be expected to become the owned resources of those areas, when they achieve provincial status. The federal government should not merely look at this as a land to be raped, as 1 have heard members opposite claim, including the Minister of Agriculture (Mr. Whelan) who spoke on this subject a week or two ago. Those resources should be held in trust. The earnings from those resources should be used for the benefit of all Canadians, but through the mechanism of a heritage fund.
This heritage fund should bear interest and be reinvested in development of those resources. But the basic heritage should remain for those people who will populate the north in the years to come, when we come to realize the great future and potential which lies in that part of Canada.
Let us not kid around about it. What we are talking about here is nationalization of the oil and gas industry in those frontier lands and offshore areas of Canada. It was ironic that

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the Minister of Energy, Mines and Resources in his speech the other night quoted Edmund Burke, who was a small "c" conservative of some two centuries ago. The minister quoted the following statement made by Mr. Burke:
If we command our wealth, we shall be rich and free; if our wealth commands us, we are poor indeed.
What is the point of being free in a country if your wealth is commanded by a centralist government in Ottawa which takes away the individual spirit to compete, to drive, and to advance in accordance with our own sense of priorities and goals?
The Minister of Energy, Mines and Resources had it all wrong when he quoted that phrase. Burke was suggesting that a country's wealth should be entrusted to individuals to be used for the good of all, but that individuals should enjoy the right of ownership, just as provinces enjoy the right of ownership. If we take the position that the federal government should own all, or should own 25 per cent of the interest in every oil and gas producing company, then we are taking that right of freedom away from individuals and we are heading down the road toward becoming a communist society.


Miss Aideen Nicholson (Trinity):: Mr. Speaker, this bill before us, the proposed Canada oil and gas act, is a key element in Canada's National Energy Program. It is a bill which evokes strong feelings. There are deep differences of opinion between those of us who think in terms of a National Energy Program and those who think in terms of a regional oil program. There are different aims to be reconciled between the producer and the consumer. This is a bill which needs to be approached with cool heads and considerable good will, rather than with rhetoric.
In introducing the bill the minister said that he would be prepared to consider amendments at committee stage. It is a technical bill which should be carefully studied at the committee stage, and since it will be some weeks before the committee hearings start, there will be time for interested parties to prepare briefs and submissions, which I know will be examined in detail by the standing committee.
There were three main objectives listed in "The National Energy Program", first, security of supply and eventually energy independence; second, the opportunity for Canadians to participate in energy industries, especially oil and gas; third, fairness in pricing and in the sharing of revenues among governments and industry.
There were a number of measures announced to achieve these objectives. Five of these were: first, energy substitution away from heating oil to natural gas, electricity and other energy sources with federal grants to encourage this process. The goal is to reduce residential, commercial and industrial use of oil to 10 per cent of those sectors' total energy use by 1990.
Second, energy conservation measures will be further expanded, including acceleration of home insulation programs
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to ensure that 70 per cent of Canadian homes will be upgraded by 1987.
Third, renewable energy technologies will be further stimulated through research and demonstration programs and supported by a new alternative energy Crown corporation called Enertech Canada, so their contribution to the total Canadian energy demand will be doubled to 6 per cent by 1990.
Fourth, Canadianization of the petroleum industry which is now dominated by foreign interests will be actively pursued through programs designed to achieve at least 50 per cent Canadian ownership by 1990, Canadian control of a significant number of larger oil and gas firms and an early increase in the share of the oil and gas sector owned by the people of Canada.
Fifth, direct incentive payments for oil and gas exploration and development will supplement reduced depletion allowances and will be structured to favour investment by Canadian companies and individuals anywhere in Canada, with added incentives for exploration on Canada lands in the north and offshore.
Since those measures were announced on budget night there has been a considerable degree of progress. The extension of the natural gas pipeline system to the maritimes is now before the National Energy Board. The renewable energy Crown corporation, Enertech, has been established in Winnipeg, and negotiations are well along with the provinces about off oil energy substitution grants to consumers.
The Canada Oil and Gas Act sets the legislative framework for energy development in the Canada lands. The Canada lands, the lands making up Canada's frontiers, those vast expanses covering a total area almost twice as large as that of the ten provinces combined, comprise some 2.5 million square miles in the offshore and 1.5 million square miles in the Yukon and Northwest Territories. They represent Canada's greatest hope for significant new reserves of conventional petroleum.
In introducing the bill on December 11, the minister summarized the measures in the bill in seven points. He said: "First, there will be . . . work requirements through negotiated exploration agreements which include firm drilling commitments. Second, the bill reserves to the Crown a 25 per cent share of oil and gas rights in the Canada lands, to be exercised through Petro-Canada or some other designated Crown corporation. Third, there will be a minimum requirement of 50 per cent Canadian ownership, through the private or public sector, of production from the Canada lands. Fourth, there will be requirements for "employment of Canadians, and use of Canadian goods and services, in oil and gas activities carried out on the Canada lands." Fifth, there will be "ministerial authority to order production to commence and be delivered to Canadian markets, in quantities and at prices specified in the order." Sixth, there will be a greater degree of control "in the timing, direction, rate, and level of exploration, development and production by various means," which might include "drilling and production orders, earlier release of proprietary information, prior approval of transfers and assignment of rights." Seventh, to "ensure that Canadians receive a fair return for

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their oil and gas resources" there will be "a basic royalty of 10 per cent, with an additional royalty of 40 per cent of the net profits of a field . .. The emphasis in all leases and agreements will be on active development.
Even though, as was pointed out in "The National Energy Program", Canada may not need its northern resources for domestic markets until the 1990s," most people would agree that "we should press ahead with exploration so that Canadians will know that a secure source of oil and gas is available ... for the future-"
The emphasis on early assessment of the oil and gas potential of Canada's frontier regions, however, also includes recognition of the fact that the ecology of the north is fragile and there are measures to protect the environment and fisheries and to fund environmental studies.
This bill does provide indeed a large amount of government control, and one can understand to some extent some of the concerns expressed by the opposition. However, it has not been done without notice. It is now ten years since the industry was informed that the regime for the disposition for oil and gas rights in the frontier regions, the offshore and the territories, would be extensively revised. A bill was introduced earlier, the Canada oil and gas act, but it died on the order paper in 1978. The new act is needed, both from the industry standpoint and from the regulatory standpoint. From the point of view of the industry, there are certain advantages in having clear and firm guidelines. Granted that the industry at the moment is not satisfied with what is being proposed, but there is room for presentation of their point of view in committee. Regulations will be important, and it is important that they should not only be fair but that they should be seen to be fair.
Words like "nationalization" have been used in this debate so far to imply that the government is prepared to act in a very harsh way. The word "confiscation" has also been used, but the whole tradition of Canada's dealings with the oil industry has in fact been based on negotiation and on attempts to conciliate. As a matter of fact I notice that our socialist friends consider that the Liberal government has been too easy with the oil companies.
Why are we talking now about more Canadianization? Well, for one thing not enough research and development is now carried out in Canada. Profits and capital are flowing out of the country. No other country tolerates as much foreign control of its resources. Norway automatically gets 51 per cent of profits. In Mexico, the total resource picture is a nationalized one. The British national oil corporation has first claim on 51 per cent of oil production at market price.
One must ask whether Canada's interests are best served from New York, London, or Houston. Of every dollar that we now spend on energy, 82 cents go to foreign-controlled companies and 18 cents go to Canadian-controlled firms. I was a member of this House in 1975 when we had similarly heated discussions about Petro-Canada. Many members opposite predicted dire things if Petro-Canada were established. But, in fact, we have found that Petro-Canada has been able to work
constructively and amicably with the private sector, and has delivered distinct advantages to Canada.
Finally, I should like to talk briefly about the place of the energy policy in industrial strategy. This is of particular importance to me as a member representing an urban constituency in an industrialized area. Surely the province of Alberta, which is interested in increasing secondary manufacturing, must have some similar concerns.
Last February during an election speech in Toronto, the Prime Minister (Mr. Trudeau) promised that if he formed the government again he would capitalize on Canada's energy base in order to build a world competitive industrial sector. The Canadianization measures which are a large part of the National Energy Program will not only increase the percentage of Canada's oil and gas industry owned by Canadians from 25 per cent to 50 per cent within this decade, but must also have some major secondary benefits for Canada's over-all industrial development.
As we retain in our own country a larger share of the profits of the oil and gas industry for our own use, and as our oil and gas sector comes under Canadian control, the traditional linkages between multinational petroleum companies and their foreign suppliers of machinery, technology and equipment, can be changed to the benefit of Canadian business and jobs. In the new legal framework proposed in the bill there are provisions to guarantee that a high level of Canadian goods and services is employed. Applicants for exploration and production rights will have to demonstrate how their operations will bring industrial and employment benefits to Canadians. This will be monitored by the Department of Energy, Mines and Resources and the Department of Industry, Trade and Commerce in order to provide maximum employment and industrial benefits.
Some members opposite have expressed a fear of this amount of government control, but what is the alternative? The alternative would be control by multinationals which have no commitment to Canada and no particular interest in advancing Canada's aims. I am not one of those persons who greatly believe in extensive government controls. Certainly I would like to see these controls put in place with limits, with appeal procedures, and in ways which make it very clear that they are fair, but I think that we cannot quarrel with the aims.
Once again I should like to quote from the February 12 speech of the Prime Minister as follows:
We need to use Canada's resource base as the fundamental building block of a vigorous industrial sector and to revitalize Canada's industrial capacity so that our industrial sector is better able to create jobs at home and be competitive abroad.


Mr. Nickerson:: Mr. Speaker, I rise on a point of order. 1 should like to draw Mr. Speaker's attention to paragraph 309 of the latest edition of Beauchesne's Parliamentary Rules and Forms, Therein it is indicated quite explicitly that it is a rule of both Houses of Parliament that a member must address the House orally and not read from a written, previously prepared
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speech. Of course there are certain exceptions respecting statements by ministers, members giving their maiden speeches, or members speaking in a language other than their own. 1 respectfully suggest that none of those exceptions was the case as the previous speaker gave her presentation.


The Acting Speaker (Mr. Ethier):: The remarks of the hon. member are well taken. I think it is a custom that all members do not read speeches, but they can refer to notes during their speeches. This is a common practice in the Elouse. Perhaps the hon. member has noticed something which the Chair has not noticed, but I only saw the hon. member quoting from notes. I could not say that the hon. member was reading her speech, therefore I did not interrupt the proceedings at that time.


Aideen Nicholson: Mr. Speaker, 1 had notes to which I was referring. The hon. member is most welcome to look at them. If he can find a speech written there, he will have done more than I, because I did not have a written speech.


Mr. Harvie Andre (Calgary Centre):: Mr. Speaker, I welcome the opportunity to spe-k on Bill C-48, the supposed culmination of what is now i 0.5 years of effort by diligent, able, intelligent, knowledgeable public servants and their ministers who have been working on this problem.
As indicated by the previous speaker and other spokesmen on the other side, the purpose of this bill is to give Canadians, specifically the Canadian government, more control over the oil and gas industry particularly in regard to the Canada lands. One must ask why for goodness sake, given the record, would any sane individual want to give that bunch of incompetents more say.
We must consider the history. The oil and gas regulations pertaining to the Canada lands, north of sixty and offshore, were withdrawn by the Liberal government, by the minister of the day, J. J. Greene, in April, 1970, or 10.5 years ago, with a promise that they would be replaced immediately by a more up-to-date version which would be more appropriate to the modern era. For three years we waited with bated breath while the government struggled internally to come up with the promised national energy policy. The current Senator Austin from British Columbia, was the deputy minister who assured us through his mouthpiece, the then minister, that it was coming.
Finally in July, 1973, an energy policy for Canada was produced. It was a marvellous document representing three years of tremendous labour by the government. It was abandoned six weeks later when the government took unilateral action in response to political pressure from its bedmates, the NDP, on September 4, 1973. Then they went back to the drawing board, struggled, and so on, and produced what ultimately was in the budget of 1974 of the Hon. John Turner, the minister of finance; the Hon. Donald Macdonald, the minister of energy; and assistant deputy minister of finance, Mickey Cowen, who is now the deputy minister of energy. It was a budget which brought the oil and gas industry to its knees. Hundreds of rigs, thousands of Canadian citizens,
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and billions of dollars departed because of the energy policy which arose out of the budget of May, 1974. However, it produced the necessary majority Liberal government, which was its intent; never mind that it did dramatic and drastic harm to Canada.
Then they laboured mightily again. The minister of energy, Mr. Macdonald, having been chastened for the disaster he and his friend, John Turner, perpetrated on the country in 1974, produced a new energy strategy for Canada. Ultimately the document was tabled by Alastair Gillespie, and it was called "A New Energy Strategy for Canada-Policies for Self-Reliance". Finally, six years after the old policy was withdrawn, the new one was introduced. The new document said that we must move to world prices, that we cannot live in a never-never world of trying to have prices that are some fraction of world prices, that we must have equitable revenue sharing, and so on and so forth. However, it never did produce any legislation. We were still without any oil and gas regulations for Canada lands.
What it did, though, based on the philosophy within this document, was that it resulted in an agreement with the producing provinces, and consequently there were two years or three years of stability in federal-provincial relations with regard to energy, substantial growth in the industry and, in fact, a country working toward self-sufficiency. But the temptation to abuse and misuse the regional nature of this country and again stomp on the producing provinces was too much. So the Hon. Alastair Gillespie broke a written agreement which had been arrived at as the result of consultations which occurred when this document was produced.
Still there were no oil and gas regulations for Canada lands. Finally, in August, 1977, there were some tentative oil and gas regulations brought down, seven years and three months after the original set of regulations had been withdrawn. These regulations were put to the industry to determine if there was any interest within the industry to operate under them, and they failed dismally. The industry said that it was not interested. Finally, the federal government produced Bill C-20 in 1978, the proposed Canada Oil and Gas Act. The government was convinced that Bill C-20 was the cat's meow, that it would do the trick.
In June, 1979, the government opened up for bids some northern land and said that it would welcome companies which asked for exploration permits on those northern acreages. One company replied and requested a permit for a small portion of the total available land. That company was Dome Petroleum and the land was close to its existing acreages which it had held for many years. No company was interested in taking on the obligations of maintaining an exploration permit in the north based on the rules outlined in Bill C-20.
Apparently that was not enough of a message for the government because, I believe, just two or three months ago it again opened up some acreage for exploration permits in Canada lands and the number of companies which replied was

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precisely zero-not one single oil and gas company, Canadian owned, foreign owned or any other type, was interested in exploring under the rules of Bill C-20. As a result, the government produced "The National Energy Program" from which Bill C-48 originates and which we are discussing today.
Bill C-48 is the same as Bill C-20, except it is worse. It contains all the negative portions of Bill C-20 which have already been rejected on two occasions by people who are expert in this area, plus some additional, totally offensive provisions under the guise of Canadianization, which is the Liberal-NDP way of nationalization. "The National Energy Program" document is one of the most dishonest, deceitful documents of which I have heard and certainly read produced by any government in this country or, so far as I am aware, by any democratic country in the world.
The National Energy Program document is full of inaccuracies, distortions, information which has no bearing on the truth, and projections which were fished out of nowhere and designed to back up a philosophy and a policy that are clearly untenable. I could use up my entire 40 minutes outlining the errors and inaccuracies in this document. It was drafted by officials and a minister who are either dishonest or incompetent. I do not think these people were deliberately dishonest, but that it is merely a case of incompetence. I do not say a lack of intelligence. I would like to think that it is not from lack of motivation, although I am not so sure. Perhaps it is the fact that they just do not know and they do not know that they do not know. The sad part, though, is that they think they know.
For example, I take the topic of revenues as outlined in the document. The central thrust of the budget and the energy program is to have a more equitable revenue-sharing program. The Prime Minister (Mr. Trudeau) once again today in question period repeated the totally erroneous, totally inaccurate percentages and information that existing oil and gas revenues are shared on the ratio of 10 per cent for the federal government, 45 per cent for the provincial government, and 45 per cent for the industry. Those figures are wrong and inaccurate.
I do not blame the Prime Minister because what does he know? He knows how to dance the moozmaad, but he relies on the advice of his officials. Presumably it is the same officials who advise the Minister of Energy, Mines and Resources (Mr. Lalonde), who produced the disaster of 1974 which brought the oil and gas industry to its knees, and who are giving the same advice today. They are doing it again. I wonder how many times we will have to go down that path before someone says, "Bring me somebody who knows something about the industry".
The Minister of Fisheries, I understand, is sending an assistant deputy minister to British Columbia in order to learn about the west coast fisheries. That is about the most sensible thing this government has done. Why does it not put an assistant deputy minister in Calgary so it can learn about the oil and gas industry, if it is so determined to take over the industry? If the government is so determined to take over the industry, for goodness sake it should learn about the industry and obtain some advice from people who know.
The employees of the Department of Energy, Mines and Resources are intelligent and are motivated in terms of public service but, believe me, they do not know what they are doing. They are causing this country incredible harm. Of course, the Minister of Energy cannot be expected to know that. 1 am sorry that the Minister of Agriculture (Mr. Whelan) has left. I noticed that he was muttering yesterday about the percentage of oil revenues taken by the State of Texas. He said that it is only 20 per cent as compared to 45 per cent in Alberta, and he made some other international comparisons which indicated that we in Canada are not nearly as equitable in the field of energy as in the United States. Once again the Minister of Agriculture was repeating figures which were given to him by the Minister of Energy which were given to him by his officials who produced this inaccurate document, so it is not surprising that he repeats these inaccuracies.
The fact is that today the state of Texas collects more dollars per barrel of oil produced than the province of Alberta. Moreover, the state of Texas does not own the oil because in the United States land surface rights and land mineral rights go together. Therefore, the owner of the farm and ranch also owns the minerals underneath the land. That is not the case in parts of Canada. In Alberta 85 per cent of the oil and gas-producing properties have mineral rights which are owned by the province. The surface rights may be owned by the farmer, logger or somebody else, but the mineral rights beneath the land belong to the Crown. Therefore, when the provinces of Alberta, British Columbia and Saskatchewan collect oil and gas revenues, they collect revenues in two capacities, one as the owner, and one as the operator of the government.
By way of analogy, if the Minister of Agriculture were here he would appreciate the differences between what you earn on land which you lease and what you earn on land which you own. There are two levels of earnings. One, as a farmer you should expect a return on the money you invest by way of seed, plowing, labour, fertilizing and so on. Second, you should expect a rate of return by virtue of the fact you own the land. That is the situation in 85 per cent of Alberta. They are the owners as well as the government. They are the owner through the Crown or Her Majesty in right of Alberta. That is never acknowledged in looking at these numbers and making these international comparisons.
So if you look at the state of Texas and add up what the government collects, plus what the owner of the land collects, you get a net back which is much larger than the province of Alberta gets. Yet that does not prevent the Minister of Agriculture from saying, as he did all around the country, including Olds, Alberta, "Gee, we have to change the system because, after all, even in the state of Texas they do not collect as much as they do here in Canada. We need more equitable revenue sharing".
I have not even dealt with the fact that the government has, in essence, taken half the price of oil, the difference between
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$17.75 and $40, the going world price, and distributed that to the consumer. It is exactly the same as if it collected a tax and then had a subsidy. Ministers chose not to do it because then it would end up in the accounts of Canada, in the "Blue Book," and the public would look at it and they might ask questions. Instead, they caused the same thing to happen through the Petroleum Administration Act, but then they do not have to acknowledge receipt of those revenues. They can then say, "We are only getting 10 per cent; we need more." That is plain deceit, plain dishonesty, and not the kind of posturing which will lead this country to work together in a unified way for the benefit of all Canadians.
As long as the Government of Canada feels it must make war on the provinces and on the private sector it will, as people in wartime do, cook the books and adjust the facts to suit its argument. We will then continue to live in interesting times, the kind of times mentioned in that old Chinese curse, "May you live in interesting times."
Mr. Speaker, this Bill C-48 will be a disaster for Canada if it goes through intact. I acknowledge the minister did say he would consider amendments at committee stage. I hope he means that and that he was not genuflecting in the usual way. I have had experiences with ministers of this government saying they want to be flexible and then finding out such statements are intended more for public consumption than a statement of their intention.
One of the most disturbing aspects of this bill is the amount of discretion allowed the government. There are 86 sections in the act, 32 of which provide for ministerial or cabinet discretion-32. That is almost half of the clauses in this bill which provide for discretion. That does not fit any definition of democratic government that I know. That is a kind of executive dictatorship. What the bill says is that we, the House of Commons, should grant to the minister in 27 of the clauses, and to the cabinet in four of the clauses, the discretion to do whatever suits them. Why are we here? Why is there a Parliament? Where is there a legislative assembly? We could end all of this nonsense, this time-consuming business of having debates, discussions, committees and what not if we would just pass one clause which reads, "The governor in council shall do whatever it wants." That is the most simple thing you could do. The public might wise up to that.
It is easier if you can sneak things through in bills like this, especially if you disguise it as some sort of Canadianization, some sort of attempt to bring under control these ugly multinationals, those parochial premiers, and those awful people in the oil and gas industry.
Let us look at some of the clauses. Clause 12 reads:
The minister may enter into an exploration agreement without a notice calling for the submission of proposals where he does not consider it to be in the public interest to give such notice-
The minister may, whenever he chooses, enter into exploration agreements. So if company XYZ made a good, healthy contribution to the Liberal party last year and the company president is a good guy and well known for his connections in the party, and he has been helpful to some friend, well, why
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not? They could say that under the authority granted by clause 12 they can look after the president of XYZ. He is a nice guy, and why not? It is legal, and we know from this Prime Minister that if it is legal it must be moral. His moral code is the criminal code and nothing more. So if we made it legal we have made it legal for the minister to do that. Mr. Speaker, do you think that is a hypothetical case? It is not hypothetical.
I know of an oil company whose president is a staunch Liberal, who, prior to the promulgation of the manuals and regulations by the Conservative government in 1961 did get a land position in Canada's Arctic through his political connections. This has made that man a millionaire.
Clause 14 reads:
The minister may select any proposal submitted under this section for the purpose of negotiating an exploration agreement and in making the selection may take into account any factors he considers appropriate in the public interest-
In other words, he can do whatever he wants.
Clauses 22, 23, 26 and 27 grant ministerial discretion. He can do whatever he wants. The same is true with clauses 30, 31, 36, 37, 38, sections 1, 2, 3, 8, and on and on it goes.
Clauses 44 and 45 are the ones which are the real dandies. Clause 44 reads:
Where the minister is satisfied that a significant discovery has been made on Canada lands, he may, by order, make a declaration of significant discovery in respect of those lands-
So if the minister is satisfied there is an oil and gas discovery he may declare it is a significant discovery. So what then? If you look at clause 45 you will see why. It reads:
The minister, at any time after making a declaration of significant discovery, may order the drilling of a well or wells on the relevant Canada lands in accordance with such directions as may be included in the order, to commence within one year after the making of the order-
In other words, the minister sitting here in Ottawa being advised by the same people who wrote this bill may declare a significant discovery and order a company to drill a well. He can do that with no regard given to the matter that the company may have committed its exploration budgets to exploration in the offshore, Alberta, Saskatchewan, Manitoba or British Columbia. It does not matter that it may not be the choice of the company geologist, who is expert enough to have made the discovery in the first place, to drill a well. No matter what the circumstances are, the minister can order that a well be drilled.
Mr. Speaker, I ask you to imagine a situation, granted it is a hypothetical one, but one which is very real in the minds of people in the oil and gas industry in Calgary who are looking at potential investments. Imagine the situation in which your company has a piece of land and next door to it is Petro-Canada. Petro-Canada will be in the Arctic, not just as a 25 per cent participant with you but as an independent operator. So, Petro-Canada can have not only 25 per cent of your action, they can have 100 per cent of the action next door, on another piece of land. Petro-Canada and you share the same geology underneath and Petro-Canada says: "Gee, I would like to

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know what is going on down there but it will cost me about $5 million or $10 million to drill that hole." Petro-Canada would ask why it does not have its neighbour drill the hole. The minister will ask that neighbour to drill the hole. He can, under clause 45, and Petro-Canada gets about $10 million worth of free information.
If hon. members do not think that will happen, I remind the House of the fact that the vice-president of Petro-Canada was seconded to Ottawa to draft part of the budget and "The National Energy Program". If hon. members do not think that kind of conflict will occur, I suggest they live in a never-never land.
Under clause 46 the minister may, by order subject to clause 56, make a declaration of commercial discovery. Under clause 48 the minister may require any interest holder to commence production of its well notwithstanding what the company involved may feel in terms of its priorities or its financial situation. The clauses go on until we come to clause 55, which says that if the minister has reason to believe-just reason to believe-that an interest holder is failing or has failed to meet any requirement of this legislation-which means if any company fails to obey these arbitrary powers of the minister-the minister can take away his permit and cancel his interest.
So far there has been a total of $5 billion invested in Canada's Arctic offshore. A particular company may be one of those which has invested $20 million, $30 million, $50 million or $100 million, but the minister can come along and say that he wants that company to drill a hole in a certain place. The company might say that it already has its funds committed for the particular year involved. It may be drilling in British Columbia or Saskatchewan and may not feel that to drill where the minister directs would be in the interest of the company.
The company may feel it could find more oil in Saskatchewan than on the property indicated by the minister. The minister can say, "That's too bad," take away the company's licence and say, "You have just lost your investment of $100 million". And there is no appeal to the courts. The minister has that kind of authority, and there is no appeal. Surely hon. members opposite have some sense of justice and fairness and I ask them if it is moral to vest in a minister the power literally to take away investments without recourse. Accumulatively these investments amount to $5 billion. Colonel Quaddafi can put in place those types of regulations, but surely that should not be so in Canada. Surely we have not arrived at the point in Canada where we sit by and allow that kind of executive authority and that kind of executive dictatorship.
If the morality of this matter does not bother anybody, then let us think about it pragmatically. Let us remember that we are not talking about nationality. A minister could do this to a Canadian company as easily as he could to a foreign multinational. Companies make investment decisions based on money required, risk, and rate of return. One of the factors in risk- and this is increasingly so in today's world-is political risk.
Heretofore Canada has a triple A rating in terms of political risk. Anybody making an investment in this country did not feel that he faced the threat of confiscation, nationalization, retroactive punitive aciton or arbitrary discretion on the part of bureaucrats which would cause him to lose a part or all of his investment. Suddenly, as a result of this bill, we put Canada down among those other countries where political risk is a very real thing.
I am sure some hon. members opposite have been reading articles in magazines, as I have, which tell of a new consulting business. It is called assessing political risk for these multinational companies. These consultants try to assess the political risk in countries like Brazil, Indonesia, Tanzania and so forth. Now they will be making their money assessing political risk in Canada. We have the great distinction of joining countries in which there is significant political risk with respect to making investments.
If there is any doubt about these arbitrary clauses which give the minister such discretionary power, the fact that it might be used and the fact that Canada's government is heading in the direction along the lines of the Colonel Quadda-fis of the world, we need look no further than the provision in this bill which provides for 25 per cent retroactive seizure of the assets of companies which have explored on Canada lands. My colleague, the hon. member for Etobicoke Centre (Mr. Wilson), pointed out the other day that $5 billion has been spent on exploration on Canada lands. With this little bill the government has come along and seized $1.25 billion of that without compensation. I have done as much research as I can in this respect, and there is not a democratic country in the world of which I am aware which has seized private assets without compensation.
With the apparent blessing of the some 145 Canadians sitting on the benches opposite we are now taking the step of acknowledging and accepting the seizure of privately-owned assets without compensation. I really wonder about the morality of that. I am afraid that hon. members opposite will be justifying this with some of the arguments used by the minister. For example, the minister said in his speech as reported at page 5670 of Hansard for December 11, and I quote:
In any event, I would be hard pressed to name any area of the world today where a more favourable exploration situation could be found, both from the standpoint of geological promise and investment climate.
In the United Kingdom, for instance, and I will not talk about the recent 20 per cent tax which the U.K. government has imposed on the oil and gas industry in England, one would encounter a far more severe taxation system involving, in fact, four levels of taxation of petroleum production. In addition, there is one U.K. state enterprise empowered to purchase up to 51 per cent of all oil production, and another one with a monopoly with respect to all gas production.
If we believed that, we would say that we are not as bad as the United Kingdom, that the United Kingdom is obviously exploring in the North Sea and that therefore perhaps this is not so bad. I do not know if the minister is just badly advised or distorting the facts, but the real facts are that in the United Kingdom there is a state company, British National Oil Company, which comes in for 51 per cent. However, a private company drilling in the North Sea gets 175 per cent of its
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capital back before any taxes are collected. This British National Oil Company was created in 1975 and, yes, indeed, from 1975 onward it has been a 51 per cent partner after that private company gets its 175 per cent back. However, there is no participation in leases made before 1975. These was no retroactivity with respect to the British National Oil Company. Only in Canada do we have retroactivity where the state comes in for 25 per cent retroactively with no compensation. That happens only in Canada, not in the United Kingdom, as the minister stated in this House or implied in this House in an attempt to justify this immoral act.
Not only is the government not being honest with the Canadian public and with its own backbenchers, in terms of comparing what we have done with what has been done in the rest of the world, but it has not even informed other members of the government. For example, the Department of External Affairs was quite shocked when it saw the document the same night the rest of the country did on October 28, as was the Department of Industry, Trade and Commerce, because we will be hit with retaliation for our intention to seize 25 per cent of privately-owned assets. If we have not received it yet, we will very soon be receiving a very stiff note from the United States pointing out that it has an act called the mineral lands mining act of 1920 which states that if Americans are treated in one fashion in a foreign country, then nationals of that country will be treated the same way in the United States.
I quote from the act of 1920:
Deposits of. .. oil, or . . . gas and lands containing such deposits owned by the United States,... shall be subject to disposition in the form and manner provided by this chapter to citizens of the United States,... or to any corporation organized under the laws of the United States,. . . Citizens of another country, the laws, customs or regulations of which deny similar or like privileges to citizens or corporations of this country, shall not by stock ownership, stock holding, or stock control, own any interest in any lease acquired under the provisions of this chapter.
That means a whole lot of Canadians are going to find their assets seized in the United States in retaliation for this seizure of assets in Canada under the provisions of the lands and mining act of 1920, unless the government changes its mind and backs off on this provision, which I think it will have to do.
Also, we are in violation of agreements with the OECD. Member countries are required to notify the OECD within 30 days of the introduction of measures which restrict new investment by foreign-controlled enterprises already established in their territory. We neglected to do that. Therefore, we are in violation of our agreement with OECD. American law compels them to retaliate against Canadian companies in the United States. We are also in violation of the General Agreement on Tariffs and Trade. That is all right, though. We have good friends in the sands of Araby. We can all learn to be the muezzin, and we will be very happy.


Mr. Cullen:: Are you still harping on that?
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Harvie Andre: I find it absolutely and totally offensive and immoral that the government of my country would act in a way that would win the applause of Colonel Qaddafi.


Jack Sydney George (Bud) Cullen: You are unbelievable!


Harvie Andre: Morality aside, pragmatically I would ask the members of the government to think what they are doing in terms of future investment and Canada's credibility. Think what they are doing to the credibility of this country if they sanction and support this kind of action, the seizure of assets retroactively. It cannot be rationalized, as members opposite have attempted to do, on the basis that because there were tax incentives in the past the Government of Canada has somehow contributed to the exploration and is, therefore, only taking back that which it already paid for. The reality is that the rules under which companies and individuals operated were established. Those were the rules. We cannot now turn around and say those rules which allowed them to make a successful investment are going to be changed, and we are now going to seize part of your assets and become a 25 per cent owner of what you accomplished under those rules.
Talk about credibility! How can anybody trust this government in the future? If a company which received a DREE grant succeeds, it will now be open to having some of its assets seized by this government because of that grant. What is even more offensive is the notion that tax incentives represent a gift from the government to the individual who takes advantage of that incentive.
I do not think of my registered retirement savings plan as a gift from the government to me. I do not view a dollar of taxes not collected as a gift from the government to me. The money does not belong to the government. It belongs to those who earn it. Governments have to collect money to operate those things we decide have to be operated on behalf of all of us, but the fact that they do not collect some money does not turn that money into a gift from the government. To define a tax not collected as a bequeathment is, at least, intellectually dishonest.
I again ask hon. members to think long and hard about the ramifications this will have on our reputation, not just with foreigners but with Canadians. Capital cannot be kept captive. It goes where it is wanted and rewarded. It is not foreign multinationals that are now leaving Canada. All the foreign multinationals are doing is cutting back on their growth plans. All the government has done to them is restrict their growth potential. In some cases it has seized part of their assets, but it is not driving them out of the country. They have no place to go. Imperial Oil cannot go to the United States.


Jack Sydney George (Bud) Cullen: They have a good deal here; that's why they are staying.


Harvie Andre: The hon. member for Sarnia (Mr. Cullen) should be aware of this. The United States is reserved for Exxon, the North Sea is reserved for Esso U.K., and the Middle East is reserved for another Exxon subsidiary. Imperial Oil has nowhere to go. It is stuck here. You cannot drive them

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out of the country. They cannot go to any other country, but the Canadians can, and they are going in droves. Louis Rukeseyer, an American analyst, wrote an article in the Houston Chronicle entitled "Thank You, Canada". In it he talks about what a great boon to the United States this national energy policy has been.
Skilled geologists, geophysicists and engineers are going to the United States in large numbers. They are taking with them billions of dollars, all kinds of machinery and rigs, and talent. Walking around Denver today is like walking around Calgary five years ago. Several large office buildings are under construction, being built by and filled by Canadians. This government has done more for the economy of Denver than the United States ever has. It has done more for the economy of Denver than it has for the entire eastern half of this country.


The Acting Speaker (Mir. Ethier):: Order, please. I regret to interrupt the hon. member but his allotted time has expired.



THE ROYAL ASSENT

['Black Rod is coming in.']
The Acting Speaker (Mr. Ethier):: I have the honour to inform the House that a communication has been received as follows:
Madam,
I have the honour to inform you that the Honourable Julien Chouinard, Puisne Judge of the Supreme Court of Canada, in his capacity as Deputy Governor General, will proceed to the Senate Chamber today, the 17th day of December, at 5.45 p.m., for the purpose of giving Royal Assent to certain bills.
I have the honour to be,
Madam
Your obedient servant,
Edmond Joly dc Lotbiniere Administrative Secretary to the Governor General



The Acting Speaker (Mr. Ethier):: I have the honour to inform the House that a message has been received from the Senate informing this House that the Senate has passed Bill C-51, to amend the Clean Air Act, without amendment.


CANADA OIL AND GAS ACT
[Stage Direction]
The House resumed consideration of the motion of Mr. Lalonde that Bill C-48, to regulate oil and gas interests in Canada lands and to amend the Oil and Gas Production and
Conservation Act, be read the second time and referred to the Standing Committee on National Resources and Public Works.
Mr. Roy MacLaren (Parliamentary Secretary to Minister of Energy, Mines and Resources):: Mr. Speaker, it is not my intention to comment on the speech of the hon. member who spoke immediately before me. There will be opportunity to deal with some of his points when the bill is before the committee. However, I should say that it is inappropriate in this House, and not in accordance with the traditions of either this House or of the provincial legislatures, to attack public servants, and especially to do that by name. The policies which are embodied in this bill and more generally in the energy policy are policies of the government. The minister, the cabinet and the government generally are responsible for those policies. We do not need to have public servants named and attacked in the House of Commons.
Speaking to the bill itself, Bill C-48, which we have before us, we are dealing with the development of Canada lands, an area of Canada which is more than twice the size of the ten provinces combined, an area of approximately 1.5 million square miles in the territories and the Arctic, and 2.5 million square miles offshore.
Those areas are essential to the energy future of Canada because they contain, or are thought to contain, much of the oil reserves which will enable Canadians to enjoy an energy security that is unparalleled in the industrial world.
We have before us a bill which recognizes the importance to move more decisively and more rapidly toward the development of those new and additional resources. We have before us a bill which takes into account and further elaborates the previous practices developed during an earlier period of Canada's energy history.
Members will recall that when the question of the development of our offshore and Arctic resources was first brought forward, there was an abundance of cheap energy, an abundance of cheap oil. At that time it did not seem to any Canadian that there was any particular urgency to develop the Canada lands. Those were areas of Canada largely unknown in terms of their energy resources. The practices of the government of the day were to permit the licensing of exploration in those areas in what today would seem to be an unnecessarily leisurely fashion.
More than 20 years ago we had exploration practices in place which would allow the interested companies to take licences which enabled them in effect to sit on the land indefinitely, at very little cost, and with no real commitment to exploration or development. Clearly that situation, as the world energy problems increased, became more and more unsatisfactory. Recognition was given to that unsatisfactory state of affairs by the government through developing, in consultation with industry, a new policy which would have accelerated the rate of exploration and development in the
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north and offshore. That concern found expression in Bill C-20 to which reference has been made during this debate.
Some members may recall that under the old system companies applied to the federal government for permission to explore on a block of Canada land and, if an application was approved, an exploration permit with a duration of as much as 12 years was granted. In addition, companies which were entitled subsequently to convert the exploration licence into a development permit or lease had the opportunity to sit on that land for as much as 21 years and, in fact, even renew their opportunity for a period beyond that.
In such circumstances, the public control was limited and scrutiny was weak. Many of the most promising Canada lands, those with the greatest potential for oil and gas development, were effectively alienated from public control and from more vigorous competitors who might have been expected to bring on-stream the resources more rapidly.
Additionally, there was in both the former practices and in Bill C-20 inadequate provision for the protection of a fragile environment both offshore, Atlantic and Pacific, but especially in the high Arctic. There was little in the old act to minimize environmental disruption because that too was not then a subject of great public concern.
Finally, in regard to Bill C-20 and to the practices of two decades or more, there was little recognition given to the situation of small Canadian gas and oil companies. They were few in number at the time and were without any real incentive to participate in the challenging exploration and development possibilities in the Canada lands.
It was as a result of the growing concern that the previous practices were inadequate, that they were not leading to the development which was increasingly recognized as important to Canada's energy future, that the government published a policy statement in May, 1976, which undertook to provide for the governance of oil and gas rights in the frontier lands. That policy statement sought to increase exploration and development, to accelerate the flow of accurate information, of which there was little enough, and to encourage greater Canadian content and participation in the resource development.
The minister of the day noted when referring to Bill C-20, and I would like to quote for a moment from him:
These changes will update the regulations to provide Canadians with increased control over and participation in frontier exploration-
The minister brought that bill forward at the time to do a number of things: to increase the required levels of exploration work; to reduce statutory land tenure; to increase land rentals; and to provide Petro-Canada with an option for a 25 per cent working interest in special renewal permits or provisional leases and an option to acquire existing Crown lands as well as 25 per cent of lands returning to the Crown.
In addition. Bill C-20 provided for a 10 per cent royalty plus a progressive incremental royalty on field profits. The confidential periods of exploration information were reduced, or would have been reduced by that bill, and the minister would have been empowered to do a variety of other essential things
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to ensure the more rapid and orderly development of our frontier lands. The minister would have set prices, taken royalties in kind rather than in cash. He could have ordered drilling on permits or leases where no such drilling was going forward. He could have ordered production to begin or production into specific domestic markets. The minister could have, where discovery had been made, set a minimum level of Canadian ownership as a condition of production and indicate the manner in which that level was to be obtained.
I have spent a moment on those aspects of Bill C-20-which died on the order paper some three years ago-because many of the features of the present Bill C-48 have been before the Canadian public, and before this House of Commons for that period of time. Certainly there are additional features in the new legislation, but the broad outlines of Bill C-48 were adumbrated in Bill C-20. They were also subsequently set forth during the election campaign and in our more recent National Energy Program. Our party indicated during the election campaign that if elected we would move to strengthen the role of Petro-Canada and that we would accelerate the drive toward self-sufficiency in petroleum products. For the same reasons that motivated us then, we believe the reform of our oil and gas regime in Canada lands is even more pressing today.
Those who wanted to anticipate the aspects of Bill C-48 pertaining to Canada lands would have done well to refer to the national energy policy where the commitment is made to accelerate the development of our frontier resources and to enable Canadians to participate in that accelerated development to a degree which has not been the case in the past.
Among the most important provisions in Bill C-48 not included in the former Bill C-20 is one relating to the concept of a 25 per cent Crown share, an aspect of the bill to which reference has been made during this debate. That provision replaces one in Bill C-20 which provided for both a 25 per cent back-in option for the Crown and a special Petro-Canada land selection preference. I believe members of the House will be familiar with that former back-in option. However, with regard to the special Petro-Canada land selection preferences, members may recall this took the form of Petro-Canada's right to select up to 25 per cent of all lands reverting to the Crown during the period of seven years. Neither the 25 per cent back-in or the preferential selection rights are included in the bill because they are being replaced by the 25 per cent Crown share concept.
One or two opposition members have suggested that while it would be fair and just to ask companies applying for new permits to abide by these new and, in our view, welcome rules, all existing permits should be exempted. To me that is a little like saying we are going to increase the income tax but only for new taxpayers and that we will exempt all previous taxpayers. I would suggest to you, Mr. Speaker, that that would be an unfair and unjust policy.

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As other members on this side of the House have mentioned, Canadians, through Petro-Canada or another Crown agency, will participate through the 25 per cent Crown share in the exciting new prospects that await all Canadians in the development of frontier lands. One member in the opposition has described this as confiscation without compensation. 1 would suggest that his statement is merely rhetoric without reality. The resources found on Canada lands are 100 per cent Canadian owned since oil and gas underground is 100 per cent Canadian. Surely it is not unreasonable to expect a 25 per cent share above ground when, in return for the 25 per cent Crown share, the government is giving a minimum 25 per cent cash grant for exploration costs to all companies, whether foreign or Canadian. For Canadian companies of at least 75 per cent Canadian ownership, the incentive is especially encouraging. The grant will increase to 80 per cent for every exploration dollar spent. In other words, the federal government will give a company 80 cents on every dollar spent.
The 25 per cent Crown share is nothing new. It recognizes and replaces the earlier practice of securing a 25 per cent back-in for Petro-Canada. By making the legislation applicable to all permit and leaseholders, we are giving expression to the laudable goal of equal and universal treatment. I might add that companies will have between six months and one year to renegotiate their current leases. If that is not sufficient time for a company and the government to reach a satisfactory agreement, then the company can opt for a provisional lease of up to five years. In essence, the 25 per cent Crown share is in fact a long overdue catch-up for the Canadian people. The taxpayers of this country have paid more than their share of the development costs to provide us all with energy security, which all Canadians have a right to expect.
I might further add that in a policy development as necessarily complex as that in the case of the 25 per cent Crown share in the frontier lands, there will be anomalies. It is our intention to explore, as we have already begun to do with some of the companies involved, any potential situations which would give rise to particular hardship, should such hardship arise unintentionally. It is not our purpose here today to speculate on such problems. I am sure that when we are at the committee stage of our proceedings there will be opportunity to hear those most directly involved in the industry and so benefit from their descriptions of anomalies or particular difficulties which may arise as a result of the legislation before us.
With regard to the development of the exploration permits in the north, should Petro-Canada decide that it is in the best interests of Canadians to become actively involved in production prior to the approval of leases for production, then Petro-Canada will, of course, pay its fair share of production costs, just like any other partner.
As part of our commitment to the greater Canadianization of the petroleum industry, we require by this legislation that companies in a production lease must develop a level of Canadian ownership of at least 50 per cent, including, of course, the Crown share which I have just noted.
The principal purpose of the bill is to encourage Canadian private oil companies to form a consortia necessary for offshore and frontier projects, and equally to encourage private foreign oil companies to enable Canadians to take part in their activities in the frontier lands. We seek from those foreign oil companies greater opportunities for Canadians to participate. The bill encourages large multinational corporations to share their experience and expertise with smaller, less experienced Canadian companies which will gain accordingly from their partners' universal experience. We believe that with the incentives which we are offering in this bill, Canadian companies will be better equipped to take a leading role in the development of our frontier resources.
The final aspect of our Canadianization objective is that companies which apply for exploration and development rights will be required to demonstrate how their operations will bring industrial and employment benefits to Canada. I believe that all of us on both sides of the House are conscious of the enormous benefits which will flow to every region of Canada through the further development of the energy sector.
We have been reminded, during the course of this and other debates, of the fact that the energy industry will act as a major motor for our further industrial development. In this bill, members will find a specific requirement for those participating in exploration and development in the Canada lands to seek the supply of goods and services from Canadian companies rather than from foreign or offshore companies. This means more jobs for Canadians and increased demand for Canadian goods and services.
I want to turn for a moment to the Petroleum Incentives Program which plays a major part in the encouragement of Canadian exploration and development in the frontier areas. Under the program, a generous cash allowance or grant for petroleum exploration and development expenditures incurred after December 31, 1980, will be available to all those entering the frontier areas. It is estimated that the incentives involved may amount to $1 billion annually. These incentives are heavily oriented toward Canadians so that we can all, directly or indirectly, participate more in the development of our Canada lands. The incentives also are intended to replace the so-called super-depletion allowance of the past which the previous government had moved toward reducing and shortly thereafter toward eliminating altogether, and which we in this bill are doing as well. We are replacing the super-depletion allowances by the new Petroleum Incentives Program.
Under this program, enterprises which are at least 75 per cent Canadian owned will receive, as I noted, incentives ranging from 80 per cent of exploration costs on Canada lands to 25 per cent for development costs in the provinces.
The program is self-assessing, that is, industry will be able to calculate the incentives on their eligible expenses according to regulations. An applicant, who may be a corporation or an individual, may submit claims as soon as the program has been formally established by legislation. Eligible expenses under the program will be those incurred on oil or gas projects where the
December 17, 1980

applicant already has an interest or will earn an interest as a result of the expenditures. These and other definitions will be elaborated to provide the industry with the opportunity to discuss the detailed provisions which will flow from Bill C-48 and which are intended to encourage Canadians to negotiate better deals in order to be eligible for maximum incentives.
The program as a whole will be administered by the proposed Petroleum Incentives Board which, I am pleased to say, will have offices both in Calgary and in Ottawa to assist applicants.
I have noted already that the intention of the earlier legislation, Bill C-20, was to help to ensure that companies did not simply sit on resources indefinitely. Under the legislation before us now, those companies will be required to meet more vigorous work or development conditions. The active leadership provided by this legislation will ensure that the projects in our Territories, in the Arctic and offshore will proceed much more quickly than would have been the case under the previous legislation. So, too, will the projects proceed in a more orderly manner as a result of the terms of Bill C-48. The government will be able to direct the rate of exploration, the timing and development and the level of production of oil and gas on Canada lands for the benefit of all Canadians. The minister will have the authority to ensure that leaseholders commence production of oil and gas and continue to produce at specified rates and quantities for the duration of their permits and leases.
Some hon. members have expressed some concern about the possible abuse of ministerial authority because of the discretionary powers which are necessarily entrusted to the minister in the legislation. I would remind the House that any careful reading of the bill will reveal that discretionary powers of the minister can be challenged in the courts and reviewed by the courts. There are appeal mechanisms built into the legislation.
Finally, there are tough new controls provided in the legislation for protecting the environment. Companies will be required to contribute to a fund to provide for the basic knowledge needed to analyse any possible environmental degradation. In addition, should any oil spill occur, the government does not have to prove negligence or fault to secure funds for clean-up or compensation.
These stringent provisions of the legislation provide for the absolute liability of the lead operator of any consortium for any damage caused by any oil spill. I might also add that any development, as is made plain in the legislation, will necessarily reflect the social and environmental concerns and the legitimate aspirations of the native peoples of the north and of the residents of coastal provinces.
In conclusion, I want to note that the legislation before us does provide for more opportunities for Canadians, not only to participate directly or indirectly in the development of our Canada lands, but also more opportunities for Canadians to provide the goods and services to sustain the growth in our petroleum sector. We have no doubt that, given the opportunity, smaller Canadian companies will measure up to the opportunities and challenges embodied in this legislation.
Canada Oil and Gas Act
As the minister said, we shall welcome the referral of this bill to the Standing Committee on National Resources and Public Works to review this legislation. We are eager to see the bill come before committee. It will provide an opportunity to hear the comments of those persons active in the industry, of those persons with environmental concerns, or the interests of native people, so that we can proceed expeditiously to develop the great new opportunities which face us all in the Canada lands in the north, in the ocean areas and in the territories.


Some hon. Members:: Hear, hear!


Mr. Howard Crosby (Halifax West):: Mr. Speaker, Bill C-48, to enact the Canada oil and gas act will govern the exploration and development of the so-called Canada lands. What is equally important is that the bill represents the government's implementation of "The National Energy Program" first revealed on October 28, 1980, on the occasion of the budget speech.
It is claimed that the National Energy Program has two basic goals: first, to develop Canadian energy resources so that energy self-sufficiency will be achieved across Canada, and second, the National Energy Program adopts measures intended to Canadianize the nation's energy industry. At face value these are laudable goals, but closer scrutiny reveals a plan and a policy which, if implemented without regard to the realities of the worldwide energy complex, will at best nationalize and socialize the energy industry.
If that were only my own opinion I would not expect it to be taken too highly, but I notice that an editorial writer in the Halifax Mail-Star took much the same position. He commented upon the remarks of the parliamentary secretary, who just spoke in the House, at a press conference when he said that the new bill was an affirmation of the government's view that offshore resources belonged to the people of Canada. The commentator said that this was quite an interesting statement for many reasons. He indicated that, for one thing, it almost sounded like a socialist battlecry. "Workers of the world unite", said the commentator. Also he said, "It seems to me that the legislation means I own a part of the resource just like Russian citizens own their energy resource". He went on to say that certainly the ownership of a resource like oil is really not the question: the question is how the resources of the country can develop these assets to the benefit of Canadians. Finally he went on to say that while he had not yet seen the details of the new legislation, the press reports were very disturbing. He said that the Trudeau government seemed to have viewed its election mandate as support for the nationalization of an industry and the further socialization of the country as a whole. Those were the remarks of a commentator as reported in the Halifax Mail-Star.
The other real possibility is that the National Energy Program will bankrupt Canadian-owned energy producers in the oil and gas field and drive away from Canada those nonCanadian Corporations and syndicates which, until now, have

December 17, 1980
Canada Oil and Gas Act
spearheaded energy exploration and development on land, on the frontier and offshore. This possibility could well become a reality under the National Energy Program.
The new Canada oil and gas act must then be examined both on its own merits and in the context of the government-sponsored National Energy Program which may well be designed to nationalize and socialize Canada's energy industry under the guise of Canadianization. If this covert action is taken by the federal authority, it is in the face of a constitutional provision which clearly vests ownership and control of natural resources, the life blood of the energy industry, in the ten provinces of Canada. Yet the Government of Canada has the unmitigated gall to treat legitimate provincial concerns and complaints with scorn and cries of disloyal disregard of our natural purpose. What calumny, what cynicism, what naked lust for political power!
Why does the federal authority trammel provincial rights and regional interests in its grab for power and control? The answer is clear-so that it can finance the national works, undertakings and services which have been installed and established. In the years the Liberal government has held office, all these services have taken hold. We can look at the St. Lawrence Seaway with its $600 million write-off of debt. What about Mirabel airport with its $192 million loss? Also there is the Canadian postal service with its $500 million annual deficit. We must not forget the $500 million bribe to obtain the votes of our senior citizens while contributing little or nothing to their general welfare. The list goes on and on.
Let me talk about energy. This very day the Government of Canada is spending $10 million to subsidize the importation of
400,000	barrels of foreign oil for use in eastern Canada. This very week Saudi Arabia, the major source of our foreign oil, increased the cost of its crude oil to $38.50 per barrel to bring its prices in line with other OPEC nations. That means the Canadian government will spend on an annual basis over $4 billion on oil imports which approaches 10 per cent of all government spending. Canadian consumers should realize that a $1 per barrel increase in crude oil can result in a four-cent increase in the price of gasoline at the pump. Gas produced in Canada from Saudi oil will cost almost eight cents more per gallon when delivered to an automobile at a Canadian service station.
Why is there this massive financial problem? It is because the Liberal government did not establish a national energy program in the early 1970s when it became obvious that dependence on foreign oil would result in disaster, nor did the Liberal government recognize the error of its ways when in late 1978 the revolution in Iran further disrupted international oil supplies. It was not until 1980 that the government came forward with a national energy program and any government commitment to Canadian energy self-sufficiency.
It is no wonder that the National Energy Program announced on October 28, 1980, will have to take from the provinces of Canada and the private sector in order to remedy the financial damage and discord created by the total lack of an effective energy policy in force in the 1970s. Is that what
the Prime Minister (Mr. Trudeau) meant when he said, "Welcome to the 1980s". What is the price of this decade of disenchantment for the provinces and the private sector? We have already experienced some very practical aspects and application of private sector disenchantment. Recent announcements indicate a very serious situation in Canada. Today it was disclosed that 60 or more oil-drilling rigs have left Canada to drill elsewhere, with a resultant loss of more than 2,000 Canadian jobs. There are more drilling operators and oil rigs posed to leave Canada for greater opportunities elsewhere.
I have before me a report which indicates the Ottawa Association of Oil Well Drilling Contractors said recently that a survey of its members indicated that some 70 drilling rigs now in Canada are committed to leave the country by June 30. That figure was based upon a December survey. I have another report before me indicating that troubled Canadian oil firms are finding exploration in the United States more attractive. Also it indicates that after five years the western Canadian exploration business seems to have lost its sparkle, and more and more Canadian oil companies are concluding that exploration in the United States looks far more attractive.
The report goes on to indicate that the southward move is well under way and it includes nearly every Canadian-controlled oil company, with the possible exception of the state-owned PetroCan; also the largest multinationals such as Canada's biggest oil company, Imperial Oil, which is 70 per cent-owned by Exxon Corporation, appear to be remaining in Canada, and that by custom such companies do not venture outside Canada. So, that is the strange paradox of Canadian-owned companies leaving Canada for more attractive prospects in the United States and other countries, and the multinationals staying here. What has the Canadianization of the oil industry accomplished for Canadians?
There is another serious difficulty which is caused by this matter, that is, the dispute between federal and provincial authorities over the ownership of offshore oil rights. I will speak more about that later on, but it has resulted in a slowdown in the operations and exploration of the oil fields off the coast of Nova Scotia and in gas exploration off the coast of Newfoundland. We must review this Canadianization and this dispute between the Government of Canada and the provinces on the east coast, with very serious concern.
Let me outline our problems on the east coast with respect to the federal government and its National Energy Program by indicating the extent of the land grab that is represented by this new legislation called the Canada oil and gas act. An editorial writer in the Halifax Mail-Star has pointed out that one of the major disappointments of the constitutional talks which have dominated government concern this year is Ottawa's refusal to recognize the maritime provinces' legitimate claims to ownership of the undersea land around them. What makes the matter particularly appalling is that the federal government has summarily ignored a unanimous


December 17, 1980

request from the other ten partners in confederation, the provinces, that the territory be formally recognized as the property of the provinces by the sea.
What makes this question particularly galling for maritim-ers is that the federal government intends to ask parliamentary approval, which it has now done, for constitutional change which it deems necessary to redress the grievances of one part of Canada. Toward one of the most manifest examples of injustice in Canada's history, however, Ottawa over the years has demonstrated no concern whatever.
The editorial writer referred to the big giveaway of land in the first half of the century to Ontario and the western provinces, and the big take-away of land in the second half of the century. He referred to legislation like this bill which, in effect, expropriates the offshore lands and mineral rights which are contained therein from the eastern coast provinces and particularly from the maritimes. The writer went on to say that he believed that the maritime members of parliament have an obligation to insist that the national government abandon its negative attitude toward the offshore claim and recognize the merits of the case which, as I have said, is supported by all the provincial governments.
In trying to detail and document this land-grab by the federal government I will review very briefly some of the modern legislation which has been passed by this House with respect to offshore interests. In 1964 the Parliament of Canada enacted the Territorial Sea and Fishing Zones Act of Canada. That act was very modest in its intent. It simply established an offshore zone that ran to three miles for certain purposes, and to 12 miles for other purposes. It caused no great concern to anybody.
Later in 1968 Parliament enacted the Oil and Gas Production and Conservation Act. That act applied to the oil and gas in the Yukon Territory and the Northwest Territories. Clearly these lands of Canada were under the control of the federal Government of Canada. It again caused no concern. But subsequently the Parliament of Canada, acting, of course, under the authority and carrying out the intentions of the Government of Canada, amended the Oil and Gas Production and Conservation Act and said that the act applied in respect of oil and gas to any of the areas which it then described as those submarine areas adjacent to the coast of Canada to a water depth of 200 metres or beyond that limit to where that depth of the super-adjacent waters admits the exploitation of natural resources of the seabed and subsoil thereof.
That was the beginning of the federal land grab, the extension of the provision of the Oil and Gas Production and Conservation Act, which formally applied simply to the Yukon Territory and the Northwest Territories, to the submarine lands off the coast of the maritime provinces and the province of British Columbia.
That provision was prompted by a ruling of the Supreme Court of Canada on a case between the federal government and the government of British Columbia involving offshore mineral rights. The case was decided in favour of the Govern-
Canada Oil and Gas Act
ment of Canada and that, I assume, was what prompted that legislation.
Now the federal government is asking the Parliament of Canada to enact quite a different provision in Bill C-48 as part of the new Canada oil and gas act. That piece of legislation not only applies the provisions of the act to the offshore and submarine lands, but it claims that those lands are the property of Canada. That is where the expression "Canada lands" assumes much more significance than in the past. If the Parliament of Canada enacts Bill C-48, it will be saying that those lands off the coast of the province of Nova Scotia, historically claimed by the province of Nova Scotia, will be and are the property of Canada. That is a matter of grave and great dispute and one which will not be let go very simply by the passage of a bill by this Parliament, when Nova Scotia has traditionally laid claim to those lands for years.
I would like to cite an experience I once had. It stems from my employment in the department of the attorney general of the province of Nova Scotia back in 1957. I can recall very vividly in 1958 being asked, as a legislative draftsman, to prepare a statute which involved the exploitation of the seabed adjoining the southwestern shore of Nova Scotia for the purpose of extracting seaweeds, including Irish moss and kelp. I had occasion at that time to correspond with the Department of Justice of the Government of Canada with respect to its attitude to Nova Scotia enacting legislation to control these submarine seaweeds.
At that point in time there was absolutely no objection from the law officers of the Crown to Nova Scotia enacting such legislation to control the harvesting of seaweeds off the coast of Nova Scotia. In fact in 1958 legislation was passed to institute the sea plants harvesting act, which claimed for Nova Scotia the right to deal with those seaweeds off the coast of the province on the basis that the province owned the land and had authority to deal with matter growing on the land.
This attitude on the part of Nova Scotia extends from traditional involvement in the coal mines which run under the submarine lands off the coast of Cape Breton. For years Nova Scotia had, by legislation, controlled the operation of the coal mines, which in some cases extend six or more miles out under the seabed and, with the development of new mines recently, may now extend even further. To my knowledge the Government of Canada has never challenged Nova Scotia's right to legislate in that area, and that legislation is based upon the claim of ownership.
Clearly, under the British North America Act, Nova Scotia has no other claim to enact legislation of that kind apart from its claim to ownership. Let me review very briefly Nova Scotia's claim to ownership of offshore lands. Nova Scotia has always been a seaward-looking province. Fishing, shipbuilding, and ocean trading were the province's lifeblood from the start. More recently the province has become a centre for ocean-related manufacturing and technology. Now there are strong indications that offshore resources will make Nova Scotia an oil and gas producing province as well.
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December 17, 1980
Canada Oil and Gas Act
The origins of Nova Scotia's claim to the offshore go back to the sixteen hundreds. The first colonists were utterly dependent on the bounty of the ocean for food and transportation, and for that reason King James I in 1621 granted the Royal Charter of Nova Scotia to Sir William Alexander which included as part of the territory of Nova Scotia a band of sea stretching about 120 miles southward from the coast. This band easily encompasses Sable Island and much of the Georges Bank and the Scotian Shelf. I would point out that it is the Scotian Shelf which is of great interest in terms of oil and gas exploration. These boundaries were observed for many years, despite numerous conquests and treaty settlements.
Without reviewing all the details of the Treaty of Utrecht of 1713, and without going into all of the historic data related to published maps and charts, I would like to say that the boundaries were redescribed in a major settlement between England and France-the Treaty of Paris of 1763. That description remained fairly constant through the various royal commissions of the nineteenth century, until confederation. The southern boundary was the Atlantic Ocean from Cape Breton to Sable Island, including all other islands within 40 leagues of the coast, with all the rights, members and appurtenances whatever thereto belonging.
Before confederation Nova Scotia exercised its offshore responsibilities and passed many laws regulating piracy, navigation, shipwrecks, and criminal activity at sea. The British North America Act of 1867 provided that Nova Scotia's limits would be exactly the same after confederation as before. These historical references might well cause the Supreme Court of Canada to decide the question of offshore mineral ownership in favour of Nova Scotia because, Mr. Speaker, in the reference to the Supreme Court of Canada made in relation to the British Columbia offshore lands and minerals, the court found no evidence of any kind that the boundaries of British Columbia ever extended west of the Pacific Ocean, or that British Columbia ever exercised legislative jurisdiction offshore. But Nova Scotia, as I have indicated, has quite a different claim based on historical facts.
I would like to say very quickly that legal confrontation is not the route for settling offshore jurisdictional questions. Provincial-federal agreement is an alternative which most favour. Instead of relying wholly on events predating 1867, a negotiated settlement recognizing the needs and means of Canada and the province of Nova Scotia in the 1980s seems a more sensible way to resolve any matters in dispute.
Mr. Speaker, how can this dispute be resolved? Please bear in mind the tremendous effect this dispute can have on reassessing and retrograding the kind of offshore exploration that ought to be taking place right now off the coast of Nova Scotia and off the coast of Newfoundland. In that respect I refer to a November 20 article in The Globe and Mail in which a spokesman for the Mobil Oil Company, which is one of the principal companies involved in the exploration of the Hibernia oilfield, was reported as saying that the federal-provincial dispute could hinder production and exploration on that site. It is said in the article that a production plan for the promising Hibernia oil site in the Atlantic Ocean, off Newfoundland, is now being drawn up but a bitter dispute could cloud the actual start of production. Of course they are referring there to the dispute between the Government of Canada and the government of the province of Newfoundland with respect to the ownership of the submarine lands, which are the site of the Hibernia drilling operations. Mobil Oil has threatened to slow down or stop its operation if the dispute is not settled.
A more recent piece in the same newspaper of December 17, 1980, says that Ottawa, meaning the Government of Canada, has vowed to support the firms which are involved in the Hibernia exploration in any dispute with the government of the province of Newfoundland. I see the hon. members from Newfoundland wince when they hear about this, because what the Government of Canada is saying is that we will use the strength and authority of the Government of Canada to beat down a claim of the government of Newfoundland regardless of the legitimacy of that claim. I say that is not the way in the 1980s to resolve disputes of this kind between governments. It is not the way to resolve disputes, simply to use the power and might of the federal authority against a province like Nova Scotia or Newfoundland without regard to the needs and means of those provinces, and without regard to the historical facts which make up their claim.
How can we then resolve the dispute between the provinces which are interested in offshore development like Newfoundland and Nova Scotia, and the Government of Canada? There is a simple way to do it, Mr. Speaker, and that is to pass legislation in this House extending the boundaries of the province of Nova Scotia and the province of Newfoundland and any other provinces which claim offshore and submarine lands, extend the boundaries of those provinces to include those lands. This is a completely opposite course to that which the government has taken in the introduction of Bill C-48, which extends not the boundaries of the provinces but the boundaries of Canada. In defining Canada lands clause 2 says that included are:
(b) those submarine areas adjacent to the coast of Canada and extending throughout the natural prolongation of the land territory of Canada to the outer edge of the continental margin or to a distance of two hundred nautical miles from the base lines from which the breadth of the territorial sea of Canada is measured, whichever is the greater;
Mr. Speaker, I have introduced in this House a private member's bill which does exactly the same thing for the province of Nova Scotia. But it does it legitimately by extending the boundaries of the province of Nova Scotia, and not in this illegitimate course of action which the government has chosen to follow, by simply extending the boundaries of Canada without the consent and concurrence of the province of Nova Scotia, or any other province.
There is another, second method, to settling the dispute between the provincial governments and the Government of Canada with respect to offshore ownership, and that is a reference to the Supreme Court of Canada. 1 was quite
December 17, 1980

pleasantly surprised to see in "The National Energy Program", introduced in the budget on October 28, 1980, a reference to just that problem and an admission on the part of the Government of Canada in that document called "The National Energy Program" that the federal-provincial dispute could retard the development of offshore lands. I thought, Mr. Speaker, that the Government of Canada had finally agreed to refer this matter to the Supreme Court of Canada and have it resolved, at least at the legal authority level. But I have since found out that that is not the case. The Government of Canada has no intention of referring the dispute to the Supreme Court of Canada for resolution, and the statement in "The National Energy Program" is only intended to mean that if somebody else wants to go to the trouble of bringing the matter before the courts the federal government will not object. We all know the federal government has no right to object in any event. So it is giving us nothing in this gratuitous statement with respect to reference.
Now, Mr. Speaker, I think because of the way that the National Energy Program and this Bill C-48, will reflect on offshore development, and on the provinces which claim offshore resources, we will see the matter go before the courts very soon. It may have, in the case of Nova Scotia, different results than the Government of Canada might have contemplated, particularly when the historical facts relating to the long history of Nova Scotia, its long involvement with offshore activities and offshore mineral exploration, fisheries, aquaculture, and all those things by which Nova Scotia exercised jurisdiction offshore, are brought out. All of these things may add up to a very strong case before the court and the result may come as a surprise to the Government of Canada.
The third and most effective way to resolve the dispute is by agreement, as I have already indicated. The federal government in 1978 proposed an agreement in which it said that the federal government would own and have control over offshore resources through ownership in land, as well as through jurisdiction under the British North America Act, but would return to the provinces involved 75 per cent of the revenues derived from the ownership of offshore resources. The federal government, of course, retains the other 25 per cent. This appeared to be a sensible agreement, but I am sure it was not the ratio which was offered that gave rise to the concern on the part of the provinces. It was what the federal government intended to do with respect to the development of those offshore resources. Would our federal government exercise its control so as to retard development, perhaps in the interests of some other part of Canada? Would it contribute funds and services of the kind which are required to accelerate development? The provinces involved simply could not leave this whole matter to the control and concern of the Government of Canada. So the agreement failed in 1978 when the Liberal government in Nova Scotia was defeated for just those kinds of reasons, that it was dabbling with the rights of the province of Nova Scotia in a manner unacceptable to most of the people. Any hope of an agreement based on a 75-25 split of revenues was abandoned.
Canada Oil and Gas Act
So we are left with the problem. The problem must be resolved, Mr. Speaker. It cannot be resolved by simply bringing before this House a bill which in effect expropriates the interest of the seacoast provinces, and particularly Nova Scotia, in their offshore resources.
Let me speak more generally of Nova Scotia's energy problem, which is very much related to offshore resource development. In Nova Scotia we are still dependent to a large extent on foreign oil, not only for our transportation fuels but also for heating homes and for other purposes. Part of this problem would be resolved, of course, by the discovery off our coast of gas or oil resources, but in order to take full advantage of those kinds of possibilities we must have certain things in place, and work on those projects must start now.
First and foremost is the natural gas pipeline now extended to the city of Quebec by virtue of permission granted by the National Energy Board, but not extended to the province of Nova Scotia by virtue of a refusal to grant permission by the National Energy Board. The Minister of Energy, Mines and Resources (Mr. Lalonde) has said in the House that an extension of the natural gas pipeline is a matter of national priority and, if the current application before the National Energy Board is refused or delayed, he will introduce a bill in this House to ensure that the natural gas pipeline will be extended to the east coast. To the extent that we can rely on government undertakings-and I sincerely hope we can-that part of the problem is resolved.
The next hope for the future in Nova Scotia is the development of a petroleum-based industry, and that involves the location of a liquid natural gas terminal on the Strait of Canso. This project, too, would be related to the natural gas pipeline and, more important, to the Arctic pilot project which involves the transportation of natural gas from the Arctic to a point on the east coast. Again the matter of the Arctic pilot project is before the National Energy Board, and that board, so we are told, will decide the appropriate location for a liquid natural gas terminal as between the Strait of Canso and Gros Cacouna on the St. Lawrence River.
Let met just say in passing that the Minister of Finance (Mr. MacEachen), as a representative from Nova Scotia, has assured Nova Scotians that this decision respecting the location of a liquid natural gas terminal will be made on the merits of the two locations on the Strait of Canso and on the St. Lawrence River. There are some who would doubt that. We in Nova Scotia take him at his word when he says that decision will be made on the merits.
I remind the Minister of Finance that his colleague, the Minister of Energy, Mines and Resources, on November 26, 1980, in Montreal, said something which might be differently construed when he said that things looked very favourable for Gros Cacouna. I think the Minister of Finance might take a look at what his colleague said because he has made it clear that the National Energy Board is a quasi-judicial body which operates on the basis of facts and information before it, and

December 17, 1980
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not on political considerations. One would wonder and question how the Minister of Energy, Mines and Resources would know at this point that things are very favourable for a location at Gros Cacouna. When he has time available to him I hope the Minister of Finance will make that inquiry and tell the members of the public, who are very much concerned about this matter and very much relieved by his public announcements, that the decision will be made on its merits.
There is one other project which is very much a part of Nova Scotia's energy future and it is dependent upon the support of the Government of Canada. And that is the development of the Donkin Coal Mine. This matter has been before both the government of Nova Scotia and the federal government for years now. Report after report has been filed. But so much of the resolution of our energy problem in Nova Scotia is dependent upon the development of the Donkin coal mine that we would be in very difficult straits if any change in policy were adopted by the Government of Canada and the necessary aid was denied, because the conversion of our oil-fired electrical energy plants to coal is an essential element of the solution to our energy problem in the future.
There are several other matters I would like to draw to the attention of this House with respect to Bill C-48. One in particular involves the provision with respect to oil spills. As hon. members know, legislation was previously enacted under which the Government of Canada established a fund.


An hon. Member:: Black Rod is here.


Mr. Knowles:: The Tories have no respect for the Crown.


Howard Edward Crosby: Madam Speaker, would you prefer that I call it six o'clock?


Madam Speaker:: There is a message, so we should deal with that.


Howard Edward Crosby: Madam Speaker, do you wish me to carry on?
As I was saying, the provisions of Bill C-48 respecting-


Mr. Taylor:: Black Rod is coming in.



[Stage Direction]
A message was delivered by the Gentleman Usher of the Black Rod, as follows:
Madam Speaker, the Honourable the Deputy Governor General desires the immediate attendance of this honourable House in the chamber of the honourable Senate.
Accordingly, Madam Speaker with the House went up to the Senate chamber.
And being returned:
Madam Speaker informed the House that when the House went up to the Senate chamber, the Deputy Governor General had been pleased to give, in Her Majesty's name, the royal assent to the following bills:
Bill C-44, an act to amend the Small Loans Act and to provide for its repeal and to amend the Criminal Code-Chapter 43.
Bill S-2, an act to implement conventions between Canada and Spain, Canada and the Republic of Austria, Canada and Italy, Canada and the Republic of Korea, Canada and the Socialist Republic of Romania and Canada and the Republic of Indonesia and agreements between Canada and Malaysia, Canada and Jamaica and Canada and Barbados and a convention between Canada and the United Kingdom of Great Britain and Northern Ireland for the avoidance of double taxation with respect to income tax-Chapter 44.
Bill C-51, an act to amend the Clean Air Act-Chapter 45.
Bill S-12, an act respecting the Canadian Merchant Service Guild.
Bill S-18, an act to amend and repeal an act to incorporate General Security Insurance Company of Canada.

Stanley Howard Knowles: I rise on a point of order, Madam Speaker. Could we be told what the business is for tomorrow?


Mr. Turner:: Madam Speaker, it is my understanding that we will be back on Bill C-48. If there is any change, it will be announced tomorrow at the House leaders' meeting.


Madam Speaker:: It being past six o'clock, this House stands adjourned until tomorrow at two o'clock p.m., pursuant to Standing Order 2(1).
At 6.08 p.m., the House adjourned, without question put, pursuant to Standing Order.


END OF VOLUME V