1981-10-27

ROUTINE PROCEEDINGS


Mr. Gordon Taylor (Bow River):: Madam Speaker, whereas after the last public hearing the CTC ordered that the railway line from Edmonton to Drumheller be retained, I move, seconded by the hon. member for Edmonton North (Mr. Pa proski):
That this House implores the Minister of Transport to rescind the recent order in council that would cancel this VIA line which is the only direct connection that Drumheller has with the city of Edmonton, which many pensioners use to go to Edmonton from Drumheller and intervening points for medical and government services, and permit at least a train twice a week.


Madam Speaker:: Is there unanimous consent for this motion?


Some hon. Members:: Agreed.


Some hon. Members:: No.


EFFECT OF CANCELLATION OF SERVICES ON TOURIST INDUSTRY-MOTION UNDER S O. 43
Mr. Thomas Siddon (Richmond-South Delta):: Madam Speaker, whereas the inexcusable, irrational decision of the government to cancel the western Supercontinental will harm Canada's international reputation by denying to many thousands of visitors from Pacific rim countries and elsewhere the pleasures of a leisurely holiday by train in scenic western Canada, and given the consequent elimination of more than $100 million of tourist revenue to the western provinces, I move under the provisions of Standing Order 43, seconded by the hon. member for Edmonton-Strathcona (Mr. Kilgour):
That the rich Prime Minister and his friend, the wealthy Minister of Transport, be held personally liable for financial losses incurred by communities such as Jasper, Alberta, and by the thousands of Canadians in tourist businesses who will face bankruptcy, unemployment and personal financial hardship as a consequence of the irresponsible actions taken by these ministers.


Madam Speaker:: Is there unanimous consent for this motion?


Some hon. Members:: Agreed.


Some hon. Members:: No.


NUCLEAR ENERGY
Mr. Bill Blaikie (Winnipeg-Birds Hill):: Madam Speaker, I rise pursuant to Standing Order 43 on a matter of urgent and pressing necessity. In view of continuing widespread concern about Canada's undemocratic and tragic pro-nuclear energy policy, and concern in Manitoba in particular about AECL's real intentions for the experimental underground radioactive disposal vault near Lac du Bonnet, Manitoba, and the Lyon government's casual neglect of such concerns in its leasing of Crown land to AECL, I move, seconded by the hon. member for Skeena (Mr. Fulton):
That this House instruct the Minister of Energy, Mines and Resources to hold major open public hearings on the radioactive waste program and underground disposal and, failing this, to respond favourably to the latest proposal of the Committee of Concerned Citizens for Manitoba and, finally, to at last release the conclusions of the infamous internal departmental review of nuclear policy which Manitobans hope will tell us whether the government regards storage for recycling purposes as relevant or not relevant to the assurances that radioactive waste will not be stored in Manitoba.


Madam Speaker:: Is there unanimous consent for this motion?


Some hon. Members:: Agreed.


Some hon. Members:: No.


PETRO-CANADA OPENING OF FIRST SERVICE STATIONS IN EASTERN CANADA- MOTION UNDER S.O. 43
Mrs. Ursula Appolloni (York South-Weston):: Madam Speaker, I rise under the provisions of Standing Order 43 on a matter of urgent and pressing necessity. In Halifax, Montreal and Toronto this past weekend a great event with national significance took place and should be noted. I am referring to the opening of the first Petro-Canada service stations in eastern Canada.


Some hon. Members:: Hear, hear!


Some hon. Members:: Oh, oh!

October 27, 1981


Mr. Nielsen:: What a gas!


Ursula Appolloni: With due encouragement from across the aisle, I move, seconded by the hon. member for Kent (Mr. Bossy):
That this House welcome the introduction to eastern Canada of retail outlets by the people's oil company and that we wish Petro-Canada every success.


Madam Speaker:: Is there unanimous consent for this
motion?


Some hon. Members:: Agreed.


Some hon. Members:: No.


THE ECONOMY
Mr. Peter Elzinga (Pembina):: Madam Speaker, I too rise under the provisions of Standing Order 43. Whereas many sectors of our society are facing disastrous effects because of the Liberal government's deliberate high interest rate policy, I move, seconded by the hon. member for Athabasca (Mr. Shields):
That this House instructs the Minister of Finance to include in his forthcoming budget expansion of the Small Business Development Bond to include non-incorporated farmers and non-incorporated small businesses and to extend the life of the Small Business Development Bond provisions for at least one more year, to the end of 1982, and also to include operating expenses.


Madam Speaker:: Is there unanimous consent for this motion?


Some hon. Members:: Agreed.


Some hon. Members:: No.


HOUSING
Mr. Don Blenkarn (Mississauga South):: Madam Speaker, Canada Mortgage and Housing Corporation borrowed $200 million from the Government of Canada to cover its shortfall as a result of repossessions and its mortgage insurance program. The minister uses this excuse to fail to give persons purchasing repossessed condominiums and townhouses realistic mortgages, and forces these people to borrow on the private market. I move, seconded by the hon. member for Fraser Valley West (Mr. Wenman):
That this House direct the minister responsible for Canada Mortgage and Housing Corporation to sell repossessed homes to individuals for their own occupancy and not to speculators or investors, and to take back first mortgages not in excess of 14 per cent, and direct the Minister of Finance not to demand repayment at this time from Canada Mortgage and Housing Corporation of
moneys advanced, and direct the minister responsible for Canada Mortgage and Housing Corporation, with respect to housing stocks owned by him, to make interest rates on mortgages within the reach of the average home owner.


Madam Speaker:: Is there unanimous consent for this motion?


Some hon. Members:: Agreed.


Some hon. Members:: No.


CALL FOR STUDY OF EXTENSION OF HUDSON BAY SHIPPING SEASON-MOTION UNDER S.O. 43
Mr. Doug Neil (Moose Jaw):: The Canadian Wheat Board has set a target for a 50 per cent increase in grain exports by 1985, which goal can only be attained if our transportation system is expanded. In view of the potential that exists in utilizing the Port of Churchill for the export of grain to Russia, Poland and western European countries, I move, seconded by the hon. member for Swift Current-Maple Creek (Mr. Hamilton):
That the Minister of Transport commission a study to determine the feasibility of extending the shipping season through Hudson Bay, upgrading and enlarging the port facilities and overcoming the problems of permafrost, and, in the interim, direct the Canadian Wheat Board to utilize the present facilities of the port to the maximum.


Madam Speaker:: Is there unanimous consent for this motion?


Some hon. Members:: Agreed.


Some hon. Members:: No.


SMALL BUSINESS
Mr. Nelson A. Riis (Kamloops-Shuswap):: Madam Speaker, I rise under the provisions of Standing Order 43 on a matter of urgent and pressing necessity to Canada's small business community. The small business financing review, under way for some 18 months, has now been completed. To avoid a repeat of the VIA Rail fiasco, I move, seconded by the hon. member for Spadina (Mr. Heap):
That not only the review be made public during this small business week and during these crises times, but also all of the supporting studies which served as part of the review process, and this House urge that the Minister of State for Small Businesses and Tourism conduct small business hearings throughout Canada to seek the response of the small business community to the recommendations contained in the report.


Madam Speaker:: Is there unanimous consent for this motion?


Some hon. Members:: Agreed.


Some hon. Members:: No.

if
October 27, 1981


CHILDREN FOR PEACE
Mr. Norman Kelly (Scarborough Centre):: Madam Speaker, I rise under the provisions of Standing Order 43. Whereas this evening at five o'clock in the Railway Committee Room the Children for Peace will demonstrate for all parliamentarians the necessity for global peace, harmony, and disarmament, I move, seconded by the hon. member for Saint-Henri-West-mount (Mr. Johnston):
That all Members of Parliament be encouraged to demonstrate their support for this worth-while endeavour of our children by attending this presentation.


Madam Speaker:: I hardly think this is a motion acceptable under Standing Order 43.


COMMUNICATIONS
Mr. F. Oberle (Prince George-Peace River):: I rise under the provisions of Standing Order 43. Madam Speaker, 10 per cent of our population, living within two thirds of the total geographic region of our country, is deprived of adequate radio and television service by reason of their dependency on space satellite technology.
Since the regulatory commission of the Department of Communications is laying criminal charges against certain individuals in the north on the strength of statutes in federal law which are no longer consistent with the government's declared policies, I move, seconded by the hon. member for Wetaskiwin (Mr. Schellenberger):
That the Minister of Communications be required to lay before the House immediately proposals for amending certain sections of statutes which underlie his jurisdiction in order to make such statutes consistent with public policy, and to impose on the regulatory commission a moratorium on any further action based on antiquated laws.


Madam Speaker:: Is there unanimous consent for this motion?


Some hon. Members:: Agreed.


Some hon. Members:: No.



ORAL QUESTION PERIOD


Right Hon. Joe Clark (Leader of the Opposition):: My
question is directed to the Minister of Finance, who knows
Oral Questions
today should have been budget day. The Prime Minister's preoccupation with constitutional matters forced the budget to be delayed, delaying attention to our economic problems, Madam Speaker, even though in the period from 1968 to 1980 Canada's standard of living dropped from the third highest in the world to the thirteenth in the world.
The Minister of Finance, when last asked, could not even make up his mind on a budget date. I wonder whether the Minister of Finance could tell the House of Commons now when he will bring in a budget, whether or not it will be a final date, or whether the priorities of the Prime Minister will push the economy further into the background again.


Hon. Allan J. MacEachen (Deputy Prime Minister and Minister of Finance):: Madam Speaker, it was my intention to have a budget on November 3. That date would have been respected had the premiers accepted the Prime Minister's invitation to meet on this very day.


Some hon. Members:: Oh, oh!


Some hon. Members:: Hear, hear!


Allan Joseph MacEachen: They had been asked to meet in Ottawa on this very day. I do not see them doing anything very much else this week. They could have been meeting in Ottawa. Instead, they chose next week, which made a budget date impossible.


Some hon. Members:: Oh, oh!


Allan Joseph MacEachen: As the Prime Minister stated in the telegram to the premiers, their choice of next week necessitated a postponement of the budget for one week.


Some hon. Members:: Why?


Allan Joseph MacEachen: Because of comments which were made in the House with respect to Tuesday of that week, I have now decided that an appropriate date would be Thursday, November 12.


Miss MacDonald:: What about Christmas Eve?


BASIS FOR PREPARATION OF BUDGET
Charles Joseph Clark: Madam Speaker, most of us expect that the budget will be brought in on Christmas Eve, if at all.


Some hon. Members:: Oh, oh!


Some hon. Members:: Hear, hear!


Charles Joseph Clark: Madam Speaker, it is very difficult to put questions with the Liberal party trying to howl down questioners in the House of Commons.


Some hon. Members:: Oh, oh!
12208

October 27, 1981
Oral Questions


Charles Joseph Clark: Let me ask the Minister of Finance, who is the past master in the House of Commons of people not doing anything, whether he is basing his budget on the premise that Canada is in a recession?


Allan Joseph MacEachen: Madam Speaker, it might have been better if the former Prime Minister had brought in his budget on Christmas Eve.


Some hon. Members:: Hear, hear!


Allan Joseph MacEachen: I have no doubt that budget dates constitute a very painful memory for the Leader of the Opposition because the budget he brought down, through his minister of finance, as was stated by a distinguished journalist, destructed upon impact.


DROP IN ECONOMIC INDEXES
Charles Joseph Clark: Madam Speaker, I am not sure whether the Minister of Finance heard the question. We know that he voted against the last true budget brought down in the House of Commons in December, 1979.


Some hon. Members:: Hear, hear!


Charles Joseph Clark: Does the Minister of Finance recognize and accept as true the facts that domestic automobile sales in the country are down as much as 80 per cent, that the demand for steel is soft and softening, that in September employment was down by 63,000 Canadian jobs on a seasonally-adjusted basis, that the forest products industry is in sharp decline, that housing starts are plummeting, that Canadians are being forced off their farms, that fish plants are being forced to close on the east coast, and that Canadians are in crises across the country? Does he accept those facts as describing the economic reality in Canada today? If so, whenever he brings in his budget, this three-times delayed budget, will it address those economic problems and face the economic crisis and the recession which are developing in the country today?


Some hon. Members:: Hear, hear!


Allan Joseph MacEachen: Madam Speaker, the Leader of the Opposition reminded me that I voted against his budget.


Erik Nielsen: Higher fuel prices.


Allan Joseph MacEachen: I remind him that the Canadian people could not wait to get a chance to defeat it in an election campaign.


Some hon. Members:: Try them now, Allan.


Mr. Nowlan:: Try them now with your budget, and you will see that it is Friday the thirteenth.


Madam Speaker:: Order, please. It looks as if we are off to a bad start.


Some hon. Members:: Oh, oh!


Madam Speaker:: I would appreciate not too much heckling.


Allan Joseph MacEachen: I wonder who is howling down whom at the moment. Quite apart from all the erroneous premises stated by the Leader of the Opposition in his question, I should like to tell him that I intend to address the economic problems facing the country, in the budget. I was prepared to bring in the budget next week and would have been on schedule except for the premiers. I want to tell the Leader of the Opposition that I have been reading the speech that he gave in New York yesterday to the Centre for the Study of the Presidency, at Fordham University, and I do not find very much advice in it, I must say.


INCOME TAX
Hon. Michael Wilson (Etobicoke Centre):: Madam Speaker, I am tempted to ask the Minister of Finance whether there was a new tradition, or should we call it a new convention, of asking the premiers when we can have a budget in this House.
The Leader of the Opposition outlined a number of very difficult economic facts about the economy today. He has referred to the very difficult state of the economy. When there are 900,000 people unemployed, when we have 20 per cent plus interest rates which are three or four percentage points higher than in the United States, when we have had energy price increases of 50 per cent in the last year, which are purely and simply increased taxes to the federal government, does the Minister of Finance believe it is appropriate for him to bring in personal tax increases as he has been suggesting over the past few months?


Allan Joseph MacEachen: Madam Speaker, I do not recollect making a suggestion that I intend to bring in personal tax increases. I do not recollect making any such statement. If the hon. member has a quotation to that effect, I would be glad to hear it. Certainly, quite apart from what might have been said in the past year with respect to a budget, I do not propose, in the very few days before such a budget, to begin to disclose the budget policies at this stage.
In the opening sentence of his question the hon. member advised me that I should not ask the premiers about a budget date. I would remind him that, when he was part of a government, it operated on the advice from premiers.


Some hon. Members:: Oh, oh!
October 27, 1981


THE ECONOMY
Michael Holcombe Wilson: Madam Speaker, I am not asking the minister to disclose what is in his budget today, but since he has continued to delay the date of the budget, and since he did hold out in the month of June the possibility of personal tax increases, I am asking him today to ease the emotional stress on Canadians who are suffering such great hardship from the facts I outlined in my first question.
On November 21 there will be a large number of very angry Canadians in Ottawa who will want to meet with the minister to discuss the very difficult state of the economy. Will the minister commit to the House today that he will meet with this group of people, or will he slough them off to the minister in charge of housing, as he did with the convoy of anger in September, or avoid them as he did in the byelection in Spadina, when he left his friend, Jimmy Coutts, swinging in the breeze?


Allan Joseph MacEachen: Madam Speaker, I have not received any such invitation to meet with a group coming to Ottawa on November 21. If I have an opportunity to present my budget before that date they will probably decide it is not necessary to come.


Charles Joseph Clark: What do you mean "if'? Are you delaying again?


AGRICULTURE
Mr. Edward Broadbent (Oshawa):: Madam Speaker, my question is directed to the Minister of Agriculture. This morning's press reported Mr. Robert Macintosh, president of The Canadian Bankers' Association, as making the incredible assertion that very few Canadian farmers are actually suffering because of high interest rates. Will the Minister of Agriculture now confirm that he has sent a document to the Minister of Finance describing the current prices in Canadian agriculture as being a direct result of high interest rates, and furthermore calling for an expansion of the farm interest subsidization scheme, in the same document? Will he first confirm that he has sent such a document; second, tell us what the response was; third, make that document available to all hon. members of the House?


Some hon. Members:: Hear, hear!


Hon. E. F. Whelan (Minister of Agriculture):: Madam Speaker, consultation between myself and the Minister of Finance is so common that I would have to check all the
Oral Questions
documents and letters which are exchanged between ministers, but the hon. member knows that those are strictly confidential at this stage of the game in which we are involved. I would have to review those.
However, the hon. member makes mention of The Canadian Bankers' Association. We dispute the figures which Mr. Macintosh has used. For instance, he said that I have only given ten cases to the association. Our records show that we have given it approximately 80 cases and have had very little response. Therefore, we go directly to the banks with which those people are dealing. I believe about 600 cases have been referred to us.
Also, if the hon. member wants to refer to an article in The Globe and Mail, a report has been put out by my department showing the forecasts and referring to bankruptcies in the agricultural community of Canada. Those are particularly farmers who have not involved themselves in some kind of a marketing organization, and are looking after themselves. Those who are in the red meat industry are the ones who are in the deepest difficulty of all.
Therefore I would say to the hon. member that I am sure he knows that I had many people in my office this morning, and my door is always open. If he wants to come in we can discuss what I think the problems are, so he can have the first hand information that is provided to me.


REQUEST FOR COMMITMENT ON BUDGET
John Edward Broadbent: Madam Speaker, the minister has taken some time to say that he flatly disagrees with the spokesperson for the banks. I want the minister to know that we, over on this side of the House, and all Canadian farmers, flatly disagree with the banks as well. But instead of just following what his colleague, the minister responsible for public housing has done in making nice admonitions about what the banks should be doing, is he now prepared to say to the House of Commons and, more particularly, to the farmers of Canada, that when that budget comes down there will be specific relief directed at the number one cause of their problems, namely, high interest rates? Will he now make that commitment in the House of Commons?


Some hon. Members:: Hear, hear!


Eugene Whelan: Again, the hon. leader of that party over there shows his ignorance of the farming industry by blanket covering the total farming industry. The total farming industry is not in financial difficulty. As I said-


John Edward Broadbent: I didn't say it was.


Eugene Whelan: -certain sectors are quite well off economically. They are not suffering at all. Some have some difficulties, and some have really rough difficulties. I have made my submission to the Minister of Finance. Both he and the Prime Minister have stated that those people in dire need will be looked after. I am talking about those people-

October 27, 1981
Oral Questions


Some hon. Members:: Oh, oh!


Eugene Whelan: -who really need assistance. I still say that under the Bank Act there is room for the banks to do some of the things that we are suggesting they should do and as the minister responsible for public housing has suggested. As early as April 27 I met The Canadian Bankers' Association and suggested some of those things to them. As far as Mr. Macintosh of The Canadian Bankers' Association is concerned, I do not believe he represents the total banking industry because to the submissions that we made to him and his organization-


Some hon. Members:: Order.


Eugene Whelan: -they were not that responsive. We found more direct response from going to the banks concerned.


MINISTER'S REPORTED STATEMENT ON FUTURE COURSE OF ACTION
John Edward Broadbent: Madam Speaker, the minister knows, and the farmers who are directly affected know, that he has been responsible for raising the Farm Credit Corporation loan rate recently by some 3 per cent, and that has not helped farmers who are in difficulty one little bit.
I am well aware that some sectors of the farming community are not in difficulty, but the minister has been saying for weeks that, overwhelmingly, those who are in difficulty are there because of high interest rates. Because the minister has promised, not once but several times, and as recently as October 8, that he would resign unless something were done about bringing down high interest rates which affect farmers, will he now say in the House of Commons that, if we do not get effective programs on high interest rates as they affect farmers, he will give us his resignation?


Eugene Whelan: Madam Speaker, the tape of that statement was made in a great little town that I am sure the hon. member knows.


An hon. Member:: "Dire Straits."


Eugene Whelan: He pretends he is a labour leader. Their headquarters are near Port Elgin where many farmers are located. The tape clearly says something different from what he says I said.


Some hon. Members:: Oh, oh!


Eugene Whelan: It depends on how one interprets things. I said that I would have to reconsider my position as Minister of Agriculture and staying on as Minister of Agriculture-that is clear as a bell on the tape-


Some hon. Members:: Oh, oh!


Eugene Whelan: -if something was not done about bettering the marketing conditions of the farmers. That tape didn't say a word about interest rates.


Some hon. Members:: Oh, oh!


HAZARDOUS SUBSTANCES
Mr. Geoff Scott (Hamilton-Wentworth):: Madam Speaker, since July, 1980, both in committee and in this House, my colleague, the hon. member for Simcoe North, and I have been trying to get answers from the government on what it intends to do about the urea formaldehyde foam insulation mess. Now 100,000 home owners across Canada want answers. People who installed UFFI are today launching a write-in campaign to the Prime Minister and four cabinet ministers. I want to ask one of those ministers, the Minister of Consumer and Corporate Affairs, what will be his response to a form of immediate relief for these people?


Hon. Andre Ouellet (Minister of Consumer and Corporate Affairs):: Madam Speaker, the hon. member knows very well that several months ago, the government announced a five-point program to help people who are facing this problem. Tests are being carried out throughout Canada, and as soon as the results are known, the owners of the homes tested will be informed of the UFFI content. Also, a review board is now holding public hearings in various Canadian cities. The board is acting under the Hazardous Products Act, according to which a company may appeal a decision by the government to ban this product, and a review board must be established to hear the case and to decide whether or not the product is hazardous. I have already informed the House that as soon as the board's work is completed, I shall publish the report, at which time decisions will be made based on the board's recommendations and findings.


COST OF REMOVAL FROM HOMES
Geoffrey Douglas Scott: Madam Speaker, I have a supplementary question. The minister knows as well as I do that whenever the review board makes its recommendations to the government and whenever the testing is finished, it will be some time well into next year. In the meantime hundreds of thousands of people are worried about what to do with the material, whether they should have it removed or whether they should reinsulate their homes. They cannot wait around.
Since the Quebec government tomorrow will officially approve an aid program through the Quebec consumer protection office, will the Minister of Consumer and Corporate
	
October 27, 1981

Affairs tell this House whether the federal government- because it was his government which got these people into the mess in the first place-will give immediate and favourable consideration to paying the cost of removing UFFI and restoring homes to their original condition?
[ Translation]


André Ouellet: Madam Speaker, I think that the hon. member, like many other Canadians, is mistaken when he says it is the Canadian government's fault that this product was used by home owners in the first place. What actually happened, as the hon. member should know, is that the product was approved by a body consisting of representatives from the public and private sectors. A group of 28 representatives approved the product, while setting certain specific conditions for its use. Now, if some contractors, who are licensed by the provinces, failed to instal this product properly, with unpleasant consequences for home owners, the blame lies first of all with the manufacturers of the product, second, with the contractors who did not instal it properly; and finally, much of the blame lies with the provinces which failed to set very specific standards when large numbers of contractors started getting into the home insulation business. If the Quebec government is indeed intending to set up a program to help home owners, I must say I am very pleased, and I hope other provinces will do the same, because at the last conference of consumer affairs ministers, I asked the provinces, through their ministers, to shoulder their responsibilities in this respect.


THE DISABLED AND THE HANDICAPPED
Mr. Bruce Halliday (Oxford):: Madam Speaker, my question is for the Minister of National Health and Welfare. The insert, entitled "Only a Beginning", which was included with the last mailing of family allowance and old age security cheques, dealt with government initiatives pursuant to the recommendations contained in the report entitled "Obstacles", which was the report of the Special Committee on the Disabled and the Handicapped. The insert reads:
To date some 56 of the recommendations have been put into effect.
Will the minister table this up to now secret list?


Hon. Monique Begin (Minister of National Health and Welfare):: Madam Speaker, there is no need for me to say that the member is being dramatic about the situation, something which is unwarranted. In the insert there is a reference to the fact that action has already started on 56 of the recommendations in the very good report called "Obstacles", of the House of Commons Special Committee on the Disabled and the Handicapped. I have just heard that there seems to be no official record of specifically which ones.
Oral Questions


Some hon. Members:: Oh, oh!


Monique Bégin: However, I could probably table them tomorrow. I will make sure it is only a short space of time before this is done. For example, of the 56 recommendations, recommendation number 19 speaks of the affirmative action program for the employment of the handicapped, which I believe my colleague passed last January or February, and so on, with respect to public access to federal government buildings. I will table this as soon as possible.


POLICY ON DISCLOSURE OF CABINET DECISIONS
Bruce Halliday: Madam Speaker, is it the policy of the minister, in view of the fact that members have already been asked what these 56 initiatives are, to distribute at taxpayers' expense decisions which have not yet been approved by cabinet or given to members of the House of Commons?


Monique Bégin: Madam Speaker, the hon. member is making a drama of something that is not. May I repeat to the hon. member that the report entitled "Obstacles" has been, as usual, processed through what is called an interdepartmental committee because all federal departments and agencies are concerned with its implementation. For the sake of practical purposes, I was asked to co-ordinate that. This has gone through our usual government process. As I said, the list will be tabled as soon as possible.


DATES FOR IMPLEMENTATION OF DECISIONS
Mr. Neil Young (Beaches):: Madam Speaker, my question is also for the Minister of National Health and Welfare. The pamphlet to which the hon. member for Oxford referred does not mention the minister or the cabinet contemplating the introduction of those recommendations. What the document refers to is the cabinet having put into effect 56 of the recommendations found in the report entitled "Obstacles". Will the minister tell the House now whether those decisions have been approved by cabinet, and will she tell us when they will take effect, rather than giving us the speculation she gave in her previous answer?


Monique Bégin: Madam Speaker, I shall repeat what I just said. I assume the member was getting ready to ask his question and then felt he could not remain seated, because it seems to me my answer was quite clear. The insert with the October family allowance cheques, which was received today or will be within the next few days, mentions the report's 56 recommendations that are about to be implemented. Obviously, it is due to some lack of communication that the list was not tabled in the House. I was informed of this before entering the House, and I

October 27, 1981
Oral Questions
told the hon. member that I would table the list tomorrow, if possible.


CABINET APPROVAL
Neil Young: Madam Speaker, my supplementary question is directed to the minister. Will the minister simply advise the House whether those 56 recommendations have been approved by cabinet, yes or no?


Monique Bégin: No, I will not answer that, Madam Speaker.
4*4


IMMIGRATION
Mr. Jesse P. Flis (Parkdale-High Park):: Madam Speaker, my question is for the Minister of Employment and Immigration. This past weekend the Polish Alliance of Canada at its thirtieth biannual convention in Toronto raised the question of what the federal government is doing to help Canadians bring over relatives and non-relatives from Poland to Canada. Over a week ago the minister promised to report to this House the results of his consultations with the Canadian Polish Congress and other community groups regarding additional measures to respond to the increasingly serious situation affecting the Polish people. Is the minister prepared to report on the results of his consultations, and to make a statement on this important issue?


Hon. Lloyd Axworthy (Minister of Employment and Immigration):: Madam Speaker, to begin with I would like to thank the hon. member for Parkdale-High Park, as well as other members of this House who, through the special parliamentary committee on the situation in Poland, have been very helpful to me in organizing discussions with members of the Polish community. Those discussions pointed out that the major concern of Polish Canadians was the fact that many of their relatives, faced with very serious uncertainty in Poland, have only the recourse of coming out as visitors or under the self-exile refugee class. Taking this into account, Madam Speaker, we are prepared to initiate a series of special measures designed to help the relatives and families of those in Poland. To begin with, we would be encouraging the people coming out of Poland who have families here prepared to sponsor them, to apply as landed immigrants rather than as visitors, and we are going to ask our officials to relax the criteria for that selection.
Second, for those who are already here as visitors from Poland, we will land them immediately in Canada. For those who do not have families here we will grant them minister's permits for a year, and review the situation and the situation in Poland. I believe these measures respond effectively to the
concerns that were raised and they are very much in the tradition of this parliament and this government in responding to special circumstances, particularly as they relate to families.


Some hon. Members:: Hear, hear!
4	4	4


FISHERIES
Mr. Lloyd R. Crouse (South Shore):: Madam Speaker, 1 wish to direct my question to the Minister of Fisheries and Oceans. The mayor and council of Lockeport and Shelburne, Nova Scotia, have indicated their concern, by telegram to me on behalf of the fishermen of Shelburne County who do not understand and who are not adequately informed by the department about government fisheries conservation policies and how they work. I therefore wish to ask the minister, in view of the impact which the new restrictive quotas on haddock will have on the inshore fishermen and the unemployed in Nova Scotia, will he immediately postpone any further action on this issue until discussions can be held with Nova Scotia's fisheries associations to clarify the matter?


Hon. Romeo LeBlanc (Minister of Fisheries and Oceans):: Madam Speaker, the consultations before such decisions are made are usually exhaustive. It may be in this area of the fisheries that there are fragmented groups and it is rather difficult to get full consensus, but certainly my policy has been very clear. There are exhaustive consultations before decisions are made.


REQUEST FOR REVIEW OF QUOTAS
Lloyd Roseville Crouse: Madam Speaker, my supplementary question is directed to the Minister of Fisheries and Oceans. There is a genuine fear and concern, as the minister well knows, among Nova Scotia fishermen that haddock quota restrictions are based on inadequate scientific research. I would, therefore, ask the minister, since the over-all fishery could be improved, if the government considered a review of the size limit, gear restrictions as they apply to mesh sizes, and closed areas for spawning purposes on Georges Bank, hopefully with consultation with the Americans, so that this plan would be effective, and will he consider a haddock by catch allowance and, if not, what species in his directed fishery will be made available in order to allow the large inshore fishery, which represents something like 90 per cent of the fleet in the area, to continue its operations?


Roméo LeBlanc: Madam Speaker, I will study the hon. member's representations very carefully.
October 27, 1981


VIA RAIL
Hon. Sinclair Stevens (York-Peel):: Madam Speaker, my question is for the Minister of Transport who yesterday stated he would delay the imposition of his cutbacks in VIA Rail if a court decided an injunction was in order. As the minister now knows, an action has been filed by a group in Saskatchewan; a group in Alberta is contemplating action with respect to VIA Rail, and another group in Ontario is likely to file its proceedings sometime later this month, as will possibly a group in New Brunswick. Having acknowledged that he will obey the law if an injunction is issued by one of these courts, will the minister at least facilitate the court actions by having a proper reference to the appropriate court in order to have this matter settled once and for all; that is, does he have the legal right to do what he intends to do on November 15?


Hon. Jean-Luc Pepin (Minister of Transport):: Madam Speaker, I do not know exactly what the hon. member has in mind. I consulted with my lawyers this morning and they were trying to find more information about the way the legal action was taking place. I am going to wait until I have received their report, maybe a little later this afternoon, to see what I can do.


REQUEST THAT MINISTER GIVE FINANCIAL ASSISTANCE TO GROUPS TAKING COURT ACTION
Sinclair McKnight Stevens: Madam Speaker, I have the statement of claim that was filed with respect to the Saskatchewan action and it very clearly claims that the order in council the minister is relying on is invalid and a nullity, and the fact that it has not been registered as is required by the Statutory Instruments Act makes it of no force and effect.
Would the minister indicate, if he is not willing to facilitate the concern and the court actions to which I have already referred, that he will at least meet half way the groups that are concerned, by undertaking to give them some financing to further their actions, and second, delay until the courts have a decent time to adjudicate this matter of the final imposition of his VIA cutback as he contemplates it?


Jean-Luc Pepin: Madam Speaker, I think my friend is sufficiently aware of how these things are done to know that very, very careful reading of the law and opinions of the Justice Department are asked for before action is taken. Last night during the debate I specifically put on the record Section 64 of the National Transportation Act, for those who had not read it yet. A reading of the law itself and of all the interpretations I have seen, and I have checked even on decisions of the Supreme Court, which is usually useful in these matters, indicates that there is no limitation to the action the government can take in this matter. There is no way I can infer, imply or intimate that I am not sure of the grounds we have used. It seems to me it is the responsibility of those who have taken the action to justify it. I was reading an interview with one of them this morning and he
Oral Questions
just said he thought he had a good case. I have never heard a lawyer who did not say that.


RATIONALE BEHIND GOVERNMENT'S POLICY
Hon. George Hees (Northumberland):: Madam Speaker, I should like to address a question to the Prime Minister. Will he outline to the House the rationale behind his government's policy of being willing to spend a very great deal of the taxpayers' money in upgrading fast passenger rail service between the four cities of Quebec, Montreal, Toronto and Windsor, all of which already have a great deal of fast airline service to serve those who wish to travel quickly between those important centres, while at the same time denying to a great many centres in western Canada, Atlantic Canada and Ontario, passenger rail service which they rely on very heavily throughout their daily lives?


Right Hon. P. E. Trudeau (Prime Minister):: Madam Speaker, the rationale is that there is a limit to the absolute number of dollars a government can expend to take up the deficit. We now know from the Minister of Transport that the deficit is approximately half a billion dollars. As the minister pointed out, that is a lot of money. We are trying to reduce that kind of spending.
The hon. member made the point that a lot of people rely on these services. I think he has given the answer to the question. When many people do rely on and use the services, for example, between the cities he mentioned, it becomes economically possible to have that kind of service. In cases where people do not use the service in great number-


An hon. Member:: They do.


Pierre Elliott Trudeau: -it becomes economically difficult to subsidize it forever.


An hon. Member:: What about Mirabel?


Pierre Elliott Trudeau: I was looking at the figures-


An hon. Member:: How about Mirabel?


Pierre Elliott Trudeau: -on transcontinental travel. It appears that for every ticket of $50 paid to move from the Atlantic coast to central Canada-


An hon. Member:: It is $100 at Mirabel.


Pierre Elliott Trudeau: -the taxpayer has to pay $150. In other words, the taxpayer subsidizes each ticket by paying three times as much as the traveller does.


An hon. Member:: Mirabel is $100.


Pierre Elliott Trudeau: If you examine the figures for the service from the west coast, it is almost as great. For every dollar paid by the traveller, the taxpayer pays $2.


An hon. Member:: How about Mirabel?

October 27, 1981
Oral Questions


Pierre Elliott Trudeau: That is the rationale, Madam Speaker. People are not using the railways-


An hon. Member:: It is the same as the airlines.


Pierre Elliott Trudeau: -as they did 100, 50 or 25 years ago. That was the statement made so ably by the Minister of Transport yesterday.


Some hon. Members:: Hear, hear!


QUERY RESPECTING GOVERNMENT POLICY
George Harris Hees: The procedure followed recently by the former Board of Transport Commissioners was to meet and allow a hearing before affected passengers in any part of the country where there was a threatened or proposed discontinuation of passenger rail service. The Board listened to the people concerned and, if they put forth suggestions which the Board considered reasonable, the railways were required to put those suggestions into effect to see if that would bring the revenue up to the required amount. That has all been done away with now.
I therefore ask the Prime Minister if his government's policy in this regard could not best be described as one which says that "if you are a large city with a large preponderance of Liberal members within your borders, nothing is too great, too much to ask for, or receive? If you are not, just forget it. Go to hell."


Some hon. Members:: Hear, hear!


Pierre Elliott Trudeau: Madam Speaker, it seems to me the hon. member has spoiled the seriousness of his question by the ending he put to it. He asked me for a rationale, and I gave him one. If he disagrees with that rationale, I wish he would state it. I think he would be the first to realize that there is a limit to the amount of deficit spending a government can envisage on a service which is losing more and more money every year.


An hon. Member:: What about Mirabel?


Pierre Elliott Trudeau: Surely there has to be in government-


An hon. Member:: What about Mirabel?


Pierre Elliott Trudeau: Madam Speaker, if they want to ask questions about Mirabel I take it you will recognize supplementary questions. I am dealing with one question at a time as is my wont, Madam Speaker.


Some hon. Members:: Oh, oh!


An hon. Member:: Testy!


FISHERIES
Mr. Ted Miller (Nanaimo-Alberni):: Madam Speaker, my question is for the Minister of Fisheries and Oceans. A review of the 1981 fisheries season in British Columbia indicated a marked improvement in the net-caught species while the troll-caught species, chinook and cohoe salmon, were below average.
In view of the fact that the troll fleet has come under very severe regulations which reduced its season, with catches below average, would the minister now have his department assess those regulations after the season, and also review the complaints of many people in the sports fishing industry and troll fishing industry that the same fleet in particular is catching a lot of juvenile stocks and is depleting the juvenile stocks which are in particular difficulty in British Columbia? Would the minister review the regulations and the approach to the same fishery for juvenile chinook?


Roméo LeBlanc: Madam Speaker, I thank the hon. member for recognizing that this has been a reasonably good season. In fact it was quite good in some areas. Conservation measures we took for chinook and cohoe were fully justified. We may quibble over whether or not the share that some particular group took was reasonable. That will be reviewed before the next season.
I certainly thank the hon. member for the support which was contained in his opening statement.


SALMON ENHANCEMENT PROGRAM
Edward Allan Miller: Madam Speaker, this indicates there is some danger in giving credit to any minister for improvement which may generally be an improvement of the year's catch. I think we can safely say we are pleased for the net fishermen that they did have a good season considering the difficulty they had last year.
In view of the importance of the sports fishing industry and the troll industry in British Columbia, the importance of chinook and cohoes to those two industries, and realizing there is some real danger in the stock depletion of both those species, would the minister consider beefing up the salmon enhancement program and budget, to direct a lot more attention to the chinook and cohoe to protect the sports and troll fishing industries in British Columbia?


Roméo LeBlanc: Madam Speaker, I think the hon. member's suggestion is a very good one. As he knows, the salmon enhancement program is not directed on a day to day basis by the minister or by the department, but by a board which has representatives from all segments of the industry. They set the priorities. I do not take issue with that procedure, and I will make sure the hon. member's representations are transmitted to the board.

October 27, 1981


THE ENVIRONMENT
Mr. Maurice Foster (Algoma):: Madam Speaker, my question is for the Minister of the Environment. In view of the minister's announcement today of increased assistance to municipalities in Ontario for sewage treatment systems under the Great Lakes Water Quality Agreement, for which I commend him, and in view of the high interest charges which will be incurred by municipalities in financing these projects during the course of construction, will the minister consider paying these grants to the communities, during the course of construction, rather than at the end of construction, thus avoiding very high interest charges?


Hon. John Roberts (Minister of the Environment and Minister of State for Science and Technology):: Madam Speaker, I thank the hon. member for his commendation. I know there are many members in the House who are interested in the increased grants which we announced this morning of another $65 million, which brings the expenditure by the federal government-


An hon. Member:: It replaces the ones you cancelled.


John (Moody) Roberts: -in assisting in cleaning up municipal pollution to well over $600 million in the past decade. The final stages of this agreement are still being negotiated with the province of Ontario. We made the announcement this morning to give concerned municipalities sufficient time to take advantage of these benefits. I would be anxious, in whatever final arrangements we make, to assist municipalities that are hard-pressed, to meet their costs as efficaciously as possible. I will take the hon. member's suggestion and discuss it with my provincial colleague.


VIA RAIL
Charles Joseph Clark: Madam Speaker, my question is supplemental to the one asked by my colleague from York-Peel. Is the Minister of Transport aware of the decision rendered by Mr. G. C. Eglington, counsel to the Standing Joint Committee of the Senate and House of Commons on Regulations and Other Statutory Instruments, to the effect that the order in council eliminating 19 per cent of passenger rail service in this country, and I quote Mr. Eglington:
-has never been registered at all, as a regulation, and certainly not within seven days of its making pursuant to Section 5 of that act. Never having been registered, it has not come into force and is, therefore, of no effect.
Is the minister aware of that ruling by a recognized legal expert, the counsel to a distinguished committee of the House of Commons and the other place? In light of the apparent fact
Privilege-Mr. Young
that his order in council is illegal will he not now agree to do two things; one, delay the effective date of abandonment of passenger rail service in this country and, two, make a reference to the appropriate court?


Some hon. Members:: Hear, hear!


Jean-Luc Pepin: Madam Speaker, I am not aware, and I will attend to the matter immediately.


PETITIONS
Madam Speaker:: I have the honour to inform the House that the Clerk of the House has laid upon the Table the report of the Clerk of Petitions stating that he has examined the petitions presented by hon. members on Monday, October 26, 1981, and finds that they meet the requirements of the Standing Orders as to form.


PRIVILEGE
Neil Young: Madam Speaker, I rise on a question of privilege. It arises from answers I received to my questions to the Minister of National Health and Welfare (Miss Begin) during question period concerning the pamphlet "Only a Beginning" and the information contained therein. Because of the information that is contained in this pamphlet, my phone has been ringing off the hook, as have those of other members of the Special Committee on the Disabled and the Handicapped, people asking us to provide them with information on the 56 recommendations which the minister's department has claimed to have placed into effect.
I feel that my privileges as a member of this House and as a member of the Special Committee on the Disabled and the Handicapped have been violated by those actions of the minister, who has with deception misled two million disabled Canadians and their families by raising high expectations about what the government-


Madam Speaker:: Order, please. I have to call the hon. member to order. He might have a grievance. He might feel he would have been better off if he had been informed prior to the minister sending this information through the mail to some of his constituents. The fact that constituents are telephoning him and asking him for supplementary information, which information I gather he may obtain in one way or another-and if he does experience difficulties in this respect I can sympathize

October 27, 1981
Petitions
with him-I am afraid does not constitute a question of privilege.


John Edward Broadbent: On the same question of privilege, Madam Speaker, with respect, I am not sure that the point was clearly understood. It was not a request for information. The minister got to her feet today and acknowledged that cabinet has not approved what she said was the case.


Madam Speaker:: Order. That is a matter for debate. The ruling I just made will stand.



ROUTINE PROCEEDINGS


[Stage Direction]
MISS MacDONALD-EFFECTS OF high interest rates on HOME OWNERS
Flora Isabel MacDonald: Madam Speaker, in addition to the 768 names of residents of Kingston and the Islands, home owners who are suffering from the high mortgage interest rate policy of the government, I would like to present a petition of an additional 87 names of residents of Kingston and the Islands who are seeking relief from the government's high interest rate policy and who are facing foreclosures and loss of their homes.


Hon. J. Robert Howie (York-Sunbury):: Madam Speaker, I ask leave to present a petition signed by 850 people from Plaster Rock, New Brunswick, requesting the government to retain VIA Rail passenger train service and the CN station at Plaster Rock. The petition assumes an added urgency with only 19 days left before the government's cruel termination decision takes effect.


Mr. Bob Corbett (Fundy-Royal):: Madam Speaker, I beg leave to present a petition signed by 1,000 home owners in the Kennebecasis Valley region of my constituency of Fundy-Royal who are thunderstruck at the indifference that is expressed by this government to the fact that these people may be in the position of losing their homes.


Mr. Doug Lewis (Simcoe North):: Madam Speaker, I ask leave to present a petition from home owners in Orillia, Ontario, in the riding of Simcoe North who believe that the current high mortgage interest rates are unjust and that no
Canadian family should be forced out of their home. This petition contains some 3,354 names of people calling on the government to ease the burden being placed upon Canadian home owners by the present Liberal government.


Mr. Les Benjamin (Regina West):: Madam Speaker, I gave notice, I believe in the appropriate time, requesting that you accept a motion, seconded by the hon. member for Kamloops-Shuswap (Mr. Riis), to move the adjournment of the House pursuant to Standing Order 26 for the purpose of debating a specific and important matter requiring urgent and immediate consideration, namely, the decision of VIA Rail with regard to the scrapping of railway passenger cars which would make it impossible to restore passenger rail service under order in council P.C. 1981-2171 should it be found to be illegal as a result of legal action started in Winnipeg, October 23, all of which makes it urgent that we have an immediate debate on the matter.


Madam Speaker:: The hon. member is aware that on October 14 last I rejected a request for an emergency debate on a related subject to the one the hon. member is now proposing to discuss. I suggested to the House that other avenues could be sought to raise this subject matter. May I remind the hon. member that Standing Order 26(5) provides that, in determining whether a matter should have urgent consideration, the Speaker shall have regard to the probability of the matter being brought before the House within reasonable time by other means.
Need I remind the hon. member that on Tuesday last the hon. member for Vegreville (Mr. Mazankowski) moved a motion under our supply procedures on the subject matter of VIA Rail, that the House discussed that motion and a decision was taken at the end of the sitting. Only yesterday the question of VIA Rail was again discussed in the House under a motion to concur in a committee report.
For all of these reasons, I regret that I cannot accept the hon. member's application.


Thomas Edward Siddon: Madam Speaker, on a point of order. I know it is not appropriate to contest your ruling on this matter, but this is not a general question regarding VIA Rail. As the hon. member suggested, it has to do with the scrapping of cars.


Madam Speaker:: Order.


Thomas Edward Siddon: This cannot be rescinded later on.



October 27, 1981


Madam Speaker:: That aspect was considered in the ruling 1 just made.


QUESTIONS ON THE ORDER PAPER
[Stage Direction]
(Questions answered orally are indicated by an asterisk.)
Mr. David Smith (Parliamentary Secretary to President of the Privy Council):: Madam Speaker, the following questions will be answered today: Nos. 2,399, 2,410, 2,433, 2,459, 2,658, 2,661, 2,696, 2,750 and 2,753.


Mr. Lewycky: What is the (a) number and rank of postal positions (b) type of postal service in (i) Boggy Creek (ii) Cowan (iii) Dropmore (iv) Eddystone (v) Kinosota (vi) Renwer (vii) Shellmouth (viii) Silver Ridge (ix) Waterhen in the province of Manitoba?


Mr. Gary F. McCauley (Parliamentary Secretary to Minister of Consumer and Corporate Affairs):: (a) All the post offices listed hereunder are group offices and are classified according to the workload and vary in group from one to 12. The Postmaster is the only post office employee.
(b)
(i)	Group 1
(ii)	Group 3
(iii)	Group 2
(iv)	Group 1
(v)	Group 1
(vi)	Group 2
(vii)	Group 1
(viii)	Group 2
(ix)	Group 3
All of the above offices offer a counter service which is a general term describing all services provided to the public at post office counters. In addition, some of these offer a lock box service.


Mr. Malone: 1.	How many persons who held the position of deputy minister, assistant deputy minister or branch head in the Department of Agriculture were (a) born in (b) lived for a period exceeding five years in one of the four western provinces?
2.	(a) What is the number of persons at the executive level in the department (b) what are the names of employees at the top three levels in the department's administration who were born or lived for a period of time exceeding five years in western Canada?


Eugene Whelan: Agriculture Canada's mandate and programs concern agriculture in all parts of Canada and personnel are recruited on the basis of professional background and competence, not geographical
Order Paper Questions
origin. The number of persons at the executive level in the department is 14. Provision by the government of the personal details concerning these individuals requested in this question would be contrary to the spirit of the Canadian Human Rights Act.


Mr. Blaikie: Did the Department of National Health and Welfare conduct studies on the effects of radiation and, if so (a) what were the names and who were the authors of the studies (b) did the studies show that amounts of radiation similar to the amounts that will be produced by the Uranium Trioxide Refinery at Blind River actually will increase the number of cancer deaths in the area and, if so, how many studies showed this?


Monique Bégin: (a)	Yes. The department has conducted one study on the health effects of ionizing radiation on populations exposed to low levels. This was a study by E. G. Letourneau and D. T. Wigle entitled "Mortality and Indoor Radon Daughter Concentrations in 13 Canadian Cities", and was presented to a specialist meeting in March, 1980, in Rome, Italy. With the Ontario ministry of health, the department is sponsoring a "Study of the Health Effects (particularly in respect to cancer) of Low-level Exposure to Environmental Radiation Contamination in Port Hope, Ontario". This research will be conducted by the health research unit, department of community health and epidemiology, Queen's University, Kingston, Ontario.
(b)	No. The study by Wigle and Letourneau showed no evidence of any substantial association between general or lung cancer mortality rates and indoor radon daughter concentrations.
The second study is not yet complete.
Studies of the effects of high background radiation on populations have repeatedly shown no deleterious effects. For example, Denver, Colorado has approximately double the background radiation (164 Mrem/y) than many places in the U.S. and yet the total cancer rate is lower than the 15 compared U.S. cities. (Health Physics Vol. 40 (May) p. 628, 1981).
Genetic studies in areas of high natural radioactivity in Brazil (Health Physics, Vol. 34 (January) p. 61-65, 1978) demonstrated no significant association between the level of radiation and the number of stillbirths, live births, congenital abnormalities and other parameters. This paper also illustrates the difficulty of performing acceptable epidemiological studies, as other factors may have a much greater influence on the data and hide the effects of radiation.
A study of radiation workers by Mancuso, Stewart and Kneale (Health Physics Vol. 33 (November) p. 369, 1977) purported to show a significant increase in deaths attributed to radiation-induced cancers. This work has been severely criticized for statistical shortcomings by many competent experts,

Order Paper Questions
and cannot be accepted at face value. (Health Physics Vol. 37) (August) p. 207-220, 1979). It should be remembered that the doses considered in occupational exposure are many times greater than the background at any site in Canada.
The United States Committee on the Biological Effects of Ionizing Radiations (BEIR III) has published a large volume entitled "The Effects on Populations of Exposure to Low Levels of Ionizing Radiations". On p. 34 the authors state: "We lack adequate information on the effects of low radiation doses in human populations, and in this regard we still depend on concepts that have been developed on the basis of experimental studies". In 1977, the United Nations Scientific Committee on the Effects of Atomic Radiation (UNSCEAR) published its equally large volume entitled "Sources and Effects of Ionizing Radiation". On p. 4 (para. 11) the authors state: "Both for somatic and for genetic effects, it is important to estimate the likely frequency with which harmful effects may follow the low doses of radiation to which people may be exposed from fallout from nuclear explosions, from radioactive consumer products, from many medical uses of radiation and from the environmental or occupational exposures involved in power production from nuclear sources, as well as from natural sources and from human activities resulting in enhanced exposures to natural sources, as discussed below. In most cases, however, the available evidence as to the frequency with which harmful effects are induced by radiation is only obtained following exposure to substantially higher radiation doses".
In summary, it can be said that there is no evidence in the world literature that the minuscule increments in dose predicted at Blind River will have any deleterious effect on the health of the populations.


Mr. Lewycky: What is the (a) number and rank of postal positions (b) type of postal service in (i) Alonsa (ii) Amaranth (iii) Arden (iv) Ashville (v) Barrows (vi) Benito (vii) Birch River (viii) Bowsman (ix) Camperville (x) Cayer (xi) Crane River (xii) Duck Bay (xiii) Durban (xiv) Ebb and Flow (xv) Ethelbert (xvi) Fork River (xvii) Garland (xviii) Gilbert Plains (xix) Glenclla (xx) Grandview (xxi) Inglis (xxii) Kenville (xxiii) Lakeland (xxiv) Langruth (xxv) Laurier (xxvi) Lenswood (xxvii) Mafeking (xxviii) Makinak (xxix) Marius (xxx) McCreary (xxxi) Meadow Portage (xxxii) Minitonas (xxxiii) National Mills (xxxiv) Oak Brae (xxxv) Ochre River (xxxvi) Ogilvie (xxxvii) Pelican Rapids (xxxviii) Pine River (xxxix) Plumas (xl) Roblin (xli) Rorketon (xlii) San Clara (xliii) Short-dale (xliv) Sifton (xlv) Skownan (xlvi) Ste. Rose du Lac (xlvii) Swan River (xlviii) Toutes Aides (xlix) Valley River (1) Waldersee (li) Westgate (lii) Winnipegosis in the province of Manitoba?


Gary Francis McCauley: (a) With the exception of Swan River, all the offices listed hereunder are group and grade offices and are classified according to the workload and vary in group from one to twelve and grade from one to six. Swan River is a staff post office and staff post offices are classified according to the workload and other standards, and vary in grade from seven to thirteen. But even if Swan River is classified as a grade seven post office, it is the
only office in the following list where employees are classified differently.
Number	Rank
(i)	i	Postmaster	Group 4(ii)	2	Postmaster Part time assistant	Grade 1(iii)	1	Postmaster	Group 4(iv)	1	Postmaster	Group 5*(v)	1	Postmaster	Group 3(vi)	3	(2)	Postmaster Part time assistants	Grade 4*(vii)	2	Postmaster Part time assistant	Grade 3(viii)	3	(2)	Postmaster Part time assistants	Grade 3*(ix)	1	Postmaster	Group 4(x)	1	Postmaster	Group 1(xi)	1	Postmaster	Group 3(xii)	1	Postmaster	Group 4(xiii)	1	Postmaster	Group 4*(xiv)	1	Postmaster	Group 2(xv)	3	(2)	Postmaster Part time assistants	Grade 3*(xvi)	1	Postmaster	Group 5(xvii)	1	Postmaster	Group 3(xviii)	3	Postmaster Assistant Part time assistant	Grade 4*(xix)	2	Postmaster Part time assistant	Grade 1*(XX)	3	Postmaster Assistant Part time assistant	Grade 5*(xxi)	2	Postmaster Part time assistant	Grade 1*(xxii)	1	Postmaster	Group 4*(xxiii)	1	Postmaster	Group 1(xxiv)	1	Postmaster	Group 5(xxv)	1	Postmaster	Group 4(xxvi)	1	Postmaster	Group 2(xxvii)	1	Postmaster	Group 4(xxviii)	1	Postmaster	Group 3*(xxix)	1	Postmaster	Group 3(xxx)	3	(2)	Postmaster Part time assistants	Grade 4(xxxi)	1	Postmaster	Group 1(xxxii)	2	Postmaster Assistant	Grade 4(xxxiii)	1	Postmaster	Group 1(xxxiv)	1	Postmaster	Group 1(xxxv)	1	Postmaster	Group 4*(xxxvi)	1	Postmaster	Group 1(xxxvii)	I	Postmaster	Group 2(xxxviii)	2	Postmaster Part time assistant	Grade 2(xxxix)	2	Postmaster Part time assistant	Grade 2(Xl)	5	(2)	Postmaster Assistants	Grade 6*(2)	Part time assistants	(xli)	2	Postmaster Part time assistant	Grade 2(xiii)	1	Postmaster	Group 2(xliii)	1	Postmaster	Group 2*(xliv)	2	Postmaster Part time assistant	Grade 1 *(xlv)	1	Postmaster	Group 2(xlvi)	4	(1) (2)	Postmaster Assistant Part time assistants	Grade 5*(xlvii)	6	Postmaster (PL 1)	Grade 7*(4)	Full time postal clerks (PO 4)	(1)	Part time postal clerk (PO 4)	
October 27, 1981

(xlviii)	1	Postmaster	Group 2(xlix)	1	Postmaster	Group 20)	1	Postmaster	Group 3*(Ii)	1	Postmaster	Group 1(Hi)	3	(2)	Postmaster Part time assistants	Grade 4*
(b) All of the above offices offer a counter service which is a general term describing all services provided to the public at post office counters. In addition, some of these offer a lock box service. Where indicated by an asterisk in part (a) above, there is also rural route service.


Mr. de Jong: 1.	From January 1, 1965 to January 1, 1980, by year, what was the total capital cost of automating lighthouse functions on the (a) west coast (b) east coast?
Order Paper Questions
2.	For the same period, which lighthouses were replaced by automated equipment and on what date for the (a) west coast (b) east coast?
3.	For the same period, by year, on how many days were the automated facilities not operating on the (a) west coast (b) east coast?
4.	For the same period, by year, how many Sperry-Rand videograph fog detection systems were (a) installed at (b) purchased for the (i) west coast (ii) east coast?
5.	For the same period, by year, what was the total capital cost of the Sperry-Rand videograph for the (a) west coast (b) east coast?
6.	For the same period, by year, what was the manpower complement for the actual operation of the manual lighthouse on the (a) west coast (b) east coast?
7.	For the same period, by year, what was the increase in the number of man-years for servicing the manual lighthouse and the automated lighthouse for the (a) west coast (b) east coast?


Mr. Robert Bockstael (Parliamentary Secretary to Minister of Transport):: 1 to 7, see below. The information prior to fiscal year 1970-71 is not available.
1 and 5.	(amounts in thousands of dollars)
70-71	71-72	72-73	73-74	74-75	75-76	76-77	77-78	78-79	79-80I. (a)	West coast	$ 902	310	796	238	111	438	649	101	(b)	East coast	$3,624	930	1,622	459	1,181	451	131	3. (a)	West coast	0	0.5	0	0	.25	0	.75	0(b)	East coast	4.3	10.71	3.25	22.5	2.42	6.88	5.54	0.544. (a)	Installed West coast	2	1	9	7	4	2	3	5	2	East coast	10	52	43	33	16	6	9	3	1	1(b)	Purchased West coast	48	1	East coast	175	22	5. (a)	West coast	$228	5	East coast	$831	99	6. (a)	West coast	105	105	101	101	93	93	93	93	93	89(b)	East coast	480	448	397	397	411*	411	409	399	389	3497. (a)	West coast	2	4	0	3(b)	East coast	3	6	7	3	7
* Increase due to LI collective agreement
2.	(a) West coast None.
(b) East coast
(i) In Maritimes region
Georges Island	1972
Eddy Point	1977
Sydney South Bar	1978
Carters Island	1979
Jerseyman Island	1979
Sandy Point	1980
Chebucto Head	1980
Point Lepreau Laurentian region	1980
Cap de Gaspe	1971
Cap de Rabast	1971
Pointe ouest	1971
Les lies aux Perroquets	1971
lie Plate	1971
Recif de Pile Blanche	1972
Pointe Heath	1972


Mr. Gilchrist: 1.	For each year 1970 to 1980, what percentage of the gross national product was spent on research and development?
2.	For the years 1970 to 1980, what was the trend as a percentage of the GNP?
3.	In each year 1970 to 1980, what was the rate of inflation?
4.	In each year 1970 to 1980, what was the value of the Canadian dollar against the currency of the United States, Great Britain, West Germany, Japan, Sweden, Italy and Switzerland?
5.	In each year 1970 to 1980, what was the rate of unemployment?


Hon.   J.-J. Blais@Minister of Supply and Services: For the
years 1970 to 1980: 1. The percentage of the gross national product spent on research and development is shown in Table

2.	The trends in research and development expenditures as a percentage of the GNP is also shown in Table I.
3.	The rate of inflation, as measured by the consumer price index is shown in Table II.

October 27, 1981
Order Paper Questions
4.	The value of the Canadian dollar against the currencies of the United States, Great Britain, West Germany, Japan, Sweden, Italy and Switzerland is shown in Table III.
5.	The rate of unemployment is shown in Table IV.
Table I
Total R&D and trend as a percentage of GNP
			R&D
	Total R&D		Expenditures
	Expenditures	GNP	as a per cent of GNP
		({millions)	
1970	1,061	85,685	1.241971	1,157	94,450	1.221972	1,184	105,234	1.131973	1,266	123,560	1.021974	1,485	147,528	1.011975	1,663	165,343	1.011976	1,798	191,031	0.941977	2,009	208,868	0.961978	2,328	230,353	1.011979	2,500	261,961	0.951980	2,737	289,859	0.94
Table II
Rate of inflation as measured by the consumer price index
	per cent change in the CPI
1970	3.29
1971	2.88
1972	4.80
1973	7.54
1974	10.91
1975	10.80
1976	7.51
1977	7.99
1978	8.96
1979	9.13
1980	10.15
Table III
Value of Canadian dollar against other currencies
u.s.	British	German	Swiss	Japanese	Swedish	ItalianDollar	Pound	Mark	Franc	Yen	Krona	LireCanadian dollars per unit-Average of noon spot rates	1970	1.0440	2.5016	0.2863	0.2422	0.002916	0.2014	0.0016651971	1.0098	2.4687	0.2900	0.2456	0.002912	0.1979	0.0016341972	0.9905	2.4797	0.3108	0.2594	0.003270	0.2083	0.0016981973	1.0001	2.4533	0.3782	0.3175	0.003696	0.2301	0.0017201974	0.9780	2.2884	0.3785	0.3295	0.003354	0.2206	0.0015041975	1.0173	2.2594	0.4144	0.3942	0.003430	0.2456	0.0015601976	0.9861	1.7811	0.3920	0.3947	0.003327	0.2265	0.0011901977	1.0635	1.8571	0.4586	0.4444	0.003980	0.2378	0.0012051978	1.1402	2.1890	0.5691	0.6432	0.005480	0.2527	0.0013451979	1.1715	2.4855	0.6394	0.7046	0.005375	0.2743	0.0014101980	1.1690	2.7196	0.6444	0.6986	0.005183	0.2765	0.001368
Table IV
Annual Unemployment Rate
	Unemployment Rate
1970	5.7
1971	6.2
1972	6.2
1973	5.5
1974	5.3
1975	6.9
1976	7.1
1977	8.1
1978	8.4
1979	7.5
1980	7.5


Mr. Robinson (Etobicoke-Lakeshore): What amount does the government spend each year to maintain Mirabel Airport and for how many years has it been contributing?


Robert Theodore Bockstael: Mirabel Airport has been operating since October, 1975, and operation and maintenance expenditures are as follows:
Operations &	Less	Less loan+	Net cost tomaintenance	Less revenue	depreciation	interest	government(Smillions)	(Smillions)	($ millions)	(Smillions)	(Smillions)1975/76	24.0	5.6	6.0	8.1	4.31976/77	74.8	25.0	16.1	29.1	4.61977/78	74.3	22.7	18.9	32.4	0.31978/79	78.2	25.8	18.1	35.8	(1.5)*1979/80	47.0	26.6	17.9	-	2.51980/81	45.9	25.8	17.7	-	2.41981/82 estimated	50.0	21.5	18.4	-	10.1
* indicate surplus.
4- includes loan interest which was applicable for years 1975-76 to 1978-79.


Mr. Beatty: 1.	Was Mr. Claude Bruneau appointed to the board of the Canadian Film Development Corporation and, if so, on what date?
2.	What is Mr. Bruneau's full-time job and with which company is he employed?
3.	(a) Did the Minister of Communications state that Mr. Bruneau had a "very strong background in the film business" and, if so, what is the background (b) did Mr. Bruneau supply a curriculum vitae to the minister and, if so (i) did it include a reference to a background in the film business (ii) how many pages was it?


Mr. Jack Masters (Parliamentary Secretary to Minister of Communications):: In so far as the Department of Communications is concerned, the reply to the above question is as follows:
1.	Yes, Mr. Claude Bruneau was appointed to the board of the Canadian Film Development Corporation on June 18, 1981, for a period of five years.
2.	Mr. Bruneau is vice-president of Power Corporation.
October 27, 1981

3.	(a) When announcing Mr. Bruneau's appointment, the minister stated, "Claude Bruneau's background and experience in law and business administration will be a considerable asset to the Canadian Film Development Corporation."
(b) Yes.
(i)	The curriculum vitae was provided to the government on a confidential basis and the minister is not at liberty to release its contents.
(ii)	Two.


Mr. Cossitt: For each year since Confederation, what was the cost of interest on the public debt and what were the public debt charges?


Hon. Pierre Bussieres (Minister of State (Finance)):: The
federal government cost of interest on the public debt and public debt charges are shown in the table below for each year since Confederation.
Federal Government: Public Debt Charges
All Public Debt
Interest on	Charges (incl. interest
Public Debt	on the public debt)
($ Millions)
1867-68	4	41868-69	5	51869-70	5	51870-71	5	51871-72	5	51872-73	5	51873-74	6	61874-75	7	71875-76	6	61876-77	7	71877-78	7	71878-79	7	71879-80	8	81880-81	8	81881-82	8	81882-83	8	81883-84	8	81884-85	9	91885-86	10	101886-87	10	101887-88	10	101888-89	10	101889-90	10	101890-91	10	101891-92	10	101892-93	10	101893-94	10	101894-95	11	111895-96	11	111896-97	11	111897-98	11	111898-99	11	111899-1900	11	111900-01	11	111901-02	11	111902-03	11	111903-04	11	111904-05	11	11
Order Paper Questions
1905-06	11	111906-07	7	71907-08	11	111908-09	12	121909-10	13	131910-11	13	131911-12	12	121912-13	13	131913-14	13	131914-15	16	161915-16	21	211916-17	36	361917-18	48	481918-19	77	771919-20	125	1251920-21	140	1401921-22	135	1351922-23	138	1381923-24	136	1361924-25	135	1351925-26	131	1311926-27	130	1301927-28	129	1291928-29	125	1251929-30	122	1221930-31	121	1211931-32	121	1211932-33	135	1351933-34	140	1401934-35	139	1391035-36	135	1381936-37	137	1411937-38	132	1411938-39	128	1331939-40	129	1351940-41	139	1461941-42	155	1721942-43	189	2031943-44	243	2621944-45	319	3401945-46	409	4381946-47	464	4771947-48	455	4671948-49	465	4751949-50	440	4511950-51	425	4391951-52	520	5311952-53	451	4651953-54	476	4961954-55	478	5021955-56	493	5141956-57	520	5341957-58	539	5671958-59	607	6481959-60	736	7841960-61	757	7981961-62	803	8391962-63	882	9181963-64	955	9941964-65	1,012	1,0511965-66	1,077	1,1111966-67	1,156	1,1911967-68	1,270	1,3011968-69	1,443	1,4801969-70	1,676	1,7171970-71	1,877	1,9201971-72	2,091	2,1371972-73	2,274	2,3011973-74	2,548	2,5661974-75	3,164	3,2391975-76	3,909	3,9721976-77	4,662	4,7211977-78	5,473	5,5501978-79	6,857	7,0581979-80	8,339	8,5241980-81 (Preliminary)	10,500	10,687
October 27, 1981
Order Paper Questions
Note: Figures for 1972-73 to 1980-81 are in line with the accounting changes incorporated on a revised accounting basis in section I of the 1979-80 public accounts. For the years 1867-68 to 1971-72 inclusive, the figures are consistent with each other but are not strictly comparable with 1972-73 and subsequent years. An indication of the non-comparability of the two series is as follows: if 1972-73 had been calculated on the same basis as for 1867-68 to 1971-72 then the 1972-73 interest on the public debt would have been the same at $2,274 million, but the 1972-73 public debt charges would have been $2,321 million instead of $2,301 million. For 1905-06 and earlier years, figures relate to the 12-month fiscal year ended June 30. For 1906-07 figures relate to the 9-month period commencing July 1, 1906, and ending March 31, 1907. For 1907-08 on, figures relate to the 12-month period ending March 31.


David P. Smith: Madam Speaker, if questions Nos. 2,104 and 2,148 could be made orders for returns, the returns would be tabled immediately.


Madam Speaker:: The questions enumerated by the parliamentary secretary have been answered. Shall questions Nos. 2,104 and 2,148 be deemed to be passed as orders for returns?


Some hon. Members:: Agreed.


Mr. McKnight: 1.	For each rural municipality in Saskatchewan, what was the number of applications (a) received (b) approved (c) rejected under the Herd Maintenance Program?
2.	For each rural municipality, what was the total dollar amount and percentage received from the Program?
Return tabled.

Question No. 2,148-Mr. Korchinski:
1.	For each municipality or county in the three prairie provinces, how many applications were (a) received (b) approved under the Herd Maintenance Program?
2.	(a) In each municipality or county, how many rejections were made as a result of the amount of precipitation in each region (b) how many rejections in each case were there as a result of crop yields?
3.	(a) How many applications were received from cattlemen who are not involved in grain farming (b) how many in each municipality in Saskatchewan (c) how many rejections were there in each case?
4.	What is the relationship between the crop yield and hay yield?
5.	(a) On what date was there a general rain recorded in each of the three Provinces (b) what amount of rain was recorded in each of the municipalities or counties?
6.	(a) To be of any appreciable value, when does the Department of Agriculture recommend that hay be cut (b) what amount of rain was received in each of the areas until the recommended date for cuttery (c) would rain that was received in August be of benefit for such hay crop?
Return tabled.
[ Translation]


David P. Smith: I ask, Madam Speaker, that the remaining questions be allowed to stand.


Madam Speaker:: Shall the remaining questions be allowed to stand?


Some hon. Members:: Agreed.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed, from Friday, October 23, consideration of Bill C-48, to regulate oil and gas interests in Canada lands and to amend the Oil and Gas Production and Conservation Act, as reported (with amendments) from the Standing Committee on National Resources and Public Works, and Motions Nos. 21 (Mr. Wilson) and 22 (Mr. Waddell).
Mr. Vince Dantzer (Okanagan North):: Mr. Speaker, I am very eager to speak on Bill C-48, and have been since last July.


Leslie Gordon Benjamin: I rise on a point of order.


Mr. Deputy Speaker:: The hon. member for Regina West on a point of order.


Leslie Gordon Benjamin: Mr. Speaker, in order to give the government an opportunity to reconsider what is being done by VIA Rail on the scrapping of railway cars and abandonment of VIA Rail passenger routes, I move, seconded by the hon. member for Kamloops-Shuswap (Mr. Riis):
That this House do now adjourn.


An hon. Member:: The Chair has already ruled on that.


Mr. Deputy Speaker:: I am not prepared to accept such a motion on a point of order. The hon. member sought the floor on a point of order. This motion cannot be accepted under these circumstances.


Vincent Martin Dantzer: Mr. Speaker, as I earlier indicated, I have been eager to speak on Bill C-48 since last July. I did not like
October 27, 1981

the bill in July. The long, hot summer months have not changed my opinion of this bill.
Unfortunately, even though I do not like the legislation, it is an important piece of legislation, and I think can only compare with the Constitution reference in the effects it will have on this country. I was fortunate to be one of the members to sit on both the constitution and natural resources committees. The country showed great interest in appearing before both committees. It has been said before that some 135 hours was spent studying Bill C-48 in the committee. There were about 140 witnesses. It is interesting to note that of all those witnesses that appeared before the committee in regard to Bill C-48, I do not believe one of them agreed with the general contents or the details of this bill. There was a great deal of opposition to the bill. Most of the people who appeared before the committee sensed what was happening and how important this legislation was.
Perhaps the importance of this legislation has been overlooked by the press and the country. We should know and be aware that it has not been overlooked by the government. Mr. Speaker, I should like to quote what the Minister of Energy, Mines and Resources (Mr. Lalonde) said when he introduced this program. He said:
This new program will impinge on almost every sphere of Canadian activity, on the fortunes of every Canadian, and on the economic and social structure of the nation for years to come.
The minister has at least been honest in telling the Canadian people what he is trying to do. I think we ignore him at our peril, just as we in his country and other countries ignored Adolf Hitler when he tried to warn us what he was about to do. I think we should pay clear attention to what the minister intends to do, because he said that this legislation will impinge on the fortunes of every Canadian. Surely those are true and accurate words.
The opposition parties on the committee put forth many amendments during the committee stage. This is proof that the bill was far from perfect when it was first presented. It is an indication of the government's railroading of this bill and others that they did not accept one single amendment at the committee stage. No one can convince me that all those amendments were bad and were not pertinent to the problems that were brought out at the committee stage. We are now debating a large number of those amendments. We should debate them slowly and carefully, so that the people of this country are fully aware of what drastic changes this legislation will bring.
Motion No. 21 reads as follows:
(2) Her Majesty in right of Canada is hereby vested with and the minister on her behalf shall hold a share sufficient to render the interest holder with a Canadian ownership rate of 50 per cent.
This motion directs itself to ownership and to Canadianiza-tion. Canadianization, like motherhood, is something we all agree with. It is a word often used, and I suggest maligned, by the government in support of this particular measure.
The Conservative party, of course, is in favour of Canadianization. I am sure even the NDP is in favour of Canadianiza-
Canada Oil and Gas Act
tion, as is everyone in Canada, but not the kind of Canadianization practised by this government. We are in favour of Canadianization. We are not in favour of socialization and we are not in favour of nationalization, and this is what Bill C-48 is all about.
The debate on Bill C-48 at the committee level and in this House, and the debate on the Constitution at the committee level and in this House, really stems and flows from an essential difference in philosophy between this side of the House, the Conservative party, and the governing party. The government has indicated quite clearly, through its legislation, both proposed and in progress, that they favour a centralized, unitary form of government, central control, control of resources by the government. In fact, they have indicated they are prepared to go quite a long way down the road to socialism in order to achieve their goal.
The Conservative party has consistently defended the federal nature of this country; the free enterprise, economic nature that we have been adopting so successfully throughout our history. We indicated, and we still feel, that the government perhaps should play the role of umpire, but they should not be a player. That is what Bill C-48 is attempting to make them in the oil industry.
Over the past year and a half to two years, we have had what oge might consider a one-two punch. The first punch was the attempt at legislative control by the Constitution; the second punch is by this legislation. Both of them are leading toward socialization. If the House thinks I am wrong in that respect, let me ask the question, why is not the right to own private property in the constitutional reference? The answer to that question clearly shows what the government intends.
The provinces have fought the Constitution and they are now fighting the effects of the national energy policy. The provinces recognize that this oil policy is an attempt to grab their resources, and in fact it does do that. As the hon. member for Prince George-Peace River (Mr. Oberle) said, what next? Will it be the forest industry in B.C., the mining industry, or the fishing industry? Anything and everything is subject to their claims and to their capacity to legislate control if it is not stopped here.
You may wonder Mr. Speaker why we on this side of the House are so opposed to government control. Let me tell you why. In the past 15 years the government has bungled everything rather badly. I want to read into Hansard a summary of that bungling which says it better than I can say it. It is an article by Douglas Fisher in The Toronto Sun of October 26, 1981. He is speaking about Mirabel airport. He says:
They who gave us Mirabel airport also managed the post office into its disastrous inefficiency.
A week ago a House committee dominated by Liberal MPs sketched 15 years of mismanagement and null achievement in manpower training.
This week the Dubin inquiry revealed an air administration that is ineffective and supervising unsafe practices galore.
The VIA Rail fiasco hgs^uickly become legendary.
And he goes on. Mr. Speaker, that is why I am very much opposed to the legislation before the House. Certainly it will

October 27, 198
Canada Oil and Gas Act
do to the oil industry exactly what the government has done to every other thing it has put its hands on.
The government has said that this is a sharing policy, that all they are trying to do is to share the assets of Canada among the people of Canada. We in the west know what that is all about. We share a two-price wheat system and we share a two-price oil system. We in western Canada share the capacity, the ability and the burden of supporting an inefficient auto industry in eastern Canada which almost doubles the price of our automobiles. Also we share the burden of supporting an inefficient textile industry. A recent study indicated that we would be better off to pay every worker to stay home, that we would save $100 per family, rather than support an inefficient system.
Also we share by our support the equalization system. Roughly $3 billion is equalized in the country from one province to another-$1 billion from British Columbia, $2 billion from Alberta, and approximately $200,000 from Ontario. We in the west understand that that is the philosophy of the government on sharing. Its philosophy is really: What is yours is mine; what is mine is my own. This is the type of sharing the government would like us to accept.
We have fought Bill C-48 because we recognize that it will eventually ruin the oil industry. What will it do specifically? There are massive incentives for the government to take money from the pockets of the western oil industry and to encourage people to work on Canada lands to the detriment of provincial lands. This legislation will also cause a massive transfer of wealth and decision making from the western provinces to Ottawa; $50 billion in five years. This is what is called sharing the Liberal way.
In addition, the bill will undoubtedly go a long way toward nationalizing and socializing the oil industry. Before the national energy policy was put into effect, there was a sophisticated and capable oil industry in western Canada. It was as effective and capable as any in the world. The government's massive intrusion and bureaucratic bumbling changed all that. Last spring when this matter was debated, the government insisted that drilling activity was not down and quoted figures to that effect. Let me put on record the real calculations in that regard.
The national energy policy in Canada has resulted in a decrease of 40 per cent in the May to August period this year compared with the same months in 1980. A total of 441 rigs chalked up 6,756 operating days in the four-month period this year compared with the 12,325 operating days for 525 rigs a year ago. This is a drop of 73 per cent. The biggest decline was in my province of British Columbia. There was a reduction of some 70 per cent and the utilization rate for 36 rigs in that province was only 34 per cent. In Saskatchewan it was down 47 per cent and in Alberta it was down 40 per cent.
The Canada lands on which the government is trying to encourage drilling fared little better. There were only 23 operating days in the Northwest Territories and Yukon compared with the 265 of last year. There were only 165 days in the Arctic Islands, down from 204 days in 1980. I do not believe that that is working toward oil self-sufficiency. The National Energy Program should be termed the national energy disaster. It has turned our oil industry from a competitive, aggressive industry comprised of many small firms to a government-controlled industry with a few large ones, including the government-controlled Petro-Canada.
People ask me what is wrong with that as long as we get our oil. Let me say that it was perfectly apparent from the hearings on this bill that all experts in the oil industry thought it was very bad. Why is this? It is because the finding of oil is still an art. It takes many operators in the field who have innovative ideas and approaches to ensure that oil is found. The bill drastically reduces the number of operators. It follows that the bill drastically reduces the chances of finding new oil either on provincial lands or on Canada lands. This means it drastically reduces our chances of becoming oil self-sufficient in this century.
Hon. members opposite at various times have argued in favour of the bill. One argument was that the government is better equipped through this legislation to deal with the many multinationals. In response to that argument I direct the attention of the House to the mess the government made in the Mexican deal. Canada was committed to a certain amount of oil without any commitment as to quality or price. We received heavy, sulphur-laden oil which could not be used in our refineries. Effectively it closed down the heavy oil plants in Lloydminster.
The government should look to the experience in Russia. It has the greatest reserves in the world at this point, but it is now clear from the experts that Russia will soon be on the open market looking for oil. It cannot get the oil out of the ground because of a bureaucratic mess. We should pay a great deal of attention to this example because it could happen here.
We support Canadianization, but the government has moved to achieve this goal in a clumsy and inefficient manner. First, it has offended our trading partners. Our relationship with the United States has never been worse. We cannot afford to have bad relations with a country upon which we depend so heavily for our mutual trade. Also there is some evidence that the requirements under this bill offend the General Agreement on Tariffs and Trade. Certainly this will have to be changed before the act is passed. The double-dipping provision and the retroactive provisions contained in the bill should be removed. They make a mockery of planning and business. This breaks faith with all people who have spent hundreds of millions of dollars in the oil industry.
It is interesting to note what the government asked Norwegian experts who appeared before the committee. They clearly set forth that the one thing the industry needed was certainty. They would accept almost any proposal if they could make money on it, but they required certainty. This legislation with its ministerial discretion and retroactive legislation ensures that the industry cannot have certainty. Therefore, I suggest we will not receive the response we should so that we will be
October 27, 1981

self-sufficient in oil by 1990, which is the goal of the government. The experts indicated that our situation was different from that of Norway. Therefore, to give the minister so much discretion would make it difficult to find oil in a country where it is dangerous to find it, in the sense that most of our new oil is under the sea. The resource is not proven, as is the case in the North Sea. Therefore this legislation is ineffective.
Motion No. 21 goes some distance toward solving many of the problems. At least it would give operators certainty as to what eventual interest they would have in the Canada lands, and the government would not back in to the extent it intends. Under these circumstances I urge hon. members to support the amendment.


Nelson Andrew Riis: Mr. Speaker, certainly it is a pleasure to rise this afternoon to talk for a few moments to the particular motion put forward by the hon. member for Vancouver-Kingsway (Mr. Waddell) relating to the Canadianization of the oil and gas industry in Canada. We on this side of the House certainly have strong feelings about this, and while they do not differ in intensity they certainly differ in substance in more ways than one from those of my friends to my right.
As the hon. member for Vancouver-Kingsway indicated earlier this week, Canadianization, as written in Bill C-48, is nothing but a sham. There is an assumption that Canadians will assume some type of ownership and control as the result of these policies, but Bill C-48 merely shifts the nationality of some of the players and decision makers and does little toward actual Canadianization of the oil and gas industry.
We recognize that when we talk about Canadianization of an industry we would have different reactions to Canadianiz-ing the television manufacturing industry, the recreation vehicle industry, the sand and gravel industry or sectors of the manufacturing industry. When it comes to oil and gas, however, the most strategic natural resource that we have, we are talking about the very basis of Canadian society and culture. Canadian society, Canadian culture and the Canadian economy depend totally on oil and gas. Surely this sets it far beyond the usual consideration that we give to economic and/or resource issues.
Motion No. 22, which stands in the name of the hon. member for Vancouver-Kingsway, seeks to increase the Crown's share or the public ownership of our interest in Canada lands, those lands that exist on the frontiers of Canada or offshore, from 25 per cent to 50 per cent. This should not be confused with the existing provisions in the bill for a Canadian ownership rate of 50 per cent for production licences. The COR, as it is known, of 50 per cent can be 50 per cent private Canadian ownership or a mixture of public and private ownership.
We must ask what the Liberal record on Canadianization is. In 1980 foreign ownership of oil and gas revenue in Canada amounted to 74 per cent; foreign control of oil and gas revenue
Canada Oil and Gas Act
was 82 per cent. In 1981 foreign ownership of oil and gas production had decreased by about 3.5 per cent, but in spite of new acquisitions, Canadian ownership is still only 34 per cent, leaving 65 per cent essentially foreign controlled and owned.
We hear that the Liberal goal is 50 per cent Canadian ownership by 1990, not Canadian control by 1990. Herein lies a very critical difference-the difference between Canadian ownership and Canadian control of this strategic resource. It is reasonable to ask why foreign control of this strategic resource is such a problem. My friends in the Conservative party suggest that foreign control is not a problem; it is no concern of theirs but it certainly is of ours, for these reasons.
Contrary to the free enterprise argument that Canada benefits from foreign capital, the multinational oil companies remain net capital exporters; they take more money out than they put into Canada. Between 1975 and 1980, the petroleum industry was a net capital exporter to the tune of $4.1 billion. What do the Tories say to that in light of their arguments that the multinational oil companies bring revenue into Canada? This is a reasonably objective statement from the Petroleum Monitoring Agency, that $4.1 billion were exported from Canada over a five-year period. The petroleum industry's assets have risen 359 per cent, from $14.6 billion in 1973 to $52.4 billion in 1980. This capital gain is controlled mainly by foreign shareholders at the expense of Canadian consumers and taxpayers.
We in this corner of the House do not feel that decisions regarding Canada's most strategic resources should be made in Dallas, Houston, New York, London, Zurich and such places. Those decisions should be made by Canadian citizens and preferably in the capitals of Canadian provinces and in our country.
In 1980 oil industry profits alone represented almost 30 per cent of all profits earned by the non-financial sector of the economy, giving foreigners a commanding position in the nation's economy. What other country in the world brags of that particular accomplishment, that foreigners make most of the decisions relating to the economy and the development of the economy? When this power and economic wealth is controlled by foreigners, they can pressure Canadian policy makers. In other words, they can use blackmail techniques; they can use capital strikes, as we have seen with Syncrude and Cold Lake, to bring the Canadian government or provincial governments around to their way of thinking. We have recently seen and are perhaps still seeing a strike by the oil companies in Canada, aided and abetted by their Tory friends in the province of Alberta and in this House.
The Liberals have brought in some half measures in response to some of these concerns. They now admit that foreign control is a problem in Canada but through Bill C-48 they are prepared to take only the weakest of measures to begin to correct it. They argue that if we are too tough, the multinational oil companies will pull out and leave us freezing in the dark, ignoring the fact that the multinationals already operate in countries that have far more onerous ownership and tax regimes than we have in Canada.

October 27, 1981
Canada Oil and Gas Act
Let us consider a few countries that act quite differently from the way we act in Canada. One of our friends, Mexico, has an interesting policy in regard to its oil industry, which has been nationalized totally since 1938. It seems to me that the petroleum industry in Mexico is doing quite well, as is indicated by our Mexican imports and the fact that just a year ago we were proud to be able to make agreements with Mexico because they could guarantee the flow of their resource while we in Canada cannot. The reason for this is that the Mexicans have control and ownership of their resource while we in Canada do not.
Let us look at a country which is closer to us in many respects than Mexico-Great Britain. The British National Oil Corporation has first claim on 51 per cent of all oil production and its purchase is negotiated at market price. The BNOC may offer participation to joint venture partners including foreign-owned firms, but it retains control of all the projects it enters into as a co-partner.
My own home country of Norway with Statoil, the government oil company, can take up to a 70 per cent interest in any block of land that it does not presently own. Since the announcement of finds of natural gas off the north coast of Norway the other day, oil companies are flocking to that part of the country under these provisions. But as weak-kneed and milquetoast Canadians, we are hesitant to begin to implement policies like those in Norway or Great Britain.
Even Australia, which is recognized for its relatively weak position compared to that of many other countries, has a policy where foreign companies are allowed to explore but only Australian and naturalized foreign investors can produce energy resources. To qualify as a naturalized company, a foreign company must have 25 per cent equity owned by Australians, a majority of Australians on its board of directors and a public commitment to increase Australian equity by 51 per cent within a certain period of time. This is a much stronger statement than is found in Canada's policy, by a long shot.
When it comes to Canadian half measures as a result of the Liberal government's program, the Liberal goal is 50 per cent Canadian-meaning mainly private-ownership by the end of the decade. As one energy observer speaking recently in the United States has noted:
Do you suppose that a party proposing to reduce foreign control ... to 50 per cent within ten years would be regarded as anything but cautious to a fault? I doubt that Americans would tolerate anything like 50 per cent foreign ownership in any major industry-let alone a vital, basic industry like oil and gas. And to tolerate it at a time when that industry is claiming an enormous and ever-rising share of the national wealth is simply unthinkable.
Do you know who the author of that quote was, Mr. Speaker? It was the infamous Marc Lalonde in his New York speech a few months ago, indicating again, very clearly, that this was about the smallest, most inconsequential step that a government could take, and was almost apologetic for the cautiousness of this particular bill, Bill C-48.
What about the difference between ownership and control of such a strategic resource? The Liberals' goal of 50 per cent Canadian ownership, if ever achieved, would still mean that the powerful petroleum industry, overwhelmingly foreign dominated, would remain under foreign control. Foreign control would still remain. Because of the way stockholdings can be manipulated, foreigners could still control a company or an energy project even though, technically, it would be Canadian owned. Fifty per cent Canadian ownership does not necessarily mean 50 per cent Canadian control. Even under the government's own provisions in Bill C-48, a joint venture with the multinational Imperial Oil Company controlling 70 per cent of the project, and Petro-Canada controlling only 30 per cent, would be classified as 51 percent Canadian owned. However, it would obviously leave the foreign-controlled Imperial controlling the venture in total.


An hon. Member:: Sham!


Nelson Andrew Riis: Let me be more specific, because this is a very crucial concept. Again, I think we have the impression from the rhetoric surrounding Bill C-48 and from reading the various clauses that, in fact, Canadian control and ownership will be occurring in Canada's frontier lands and offshore developments. However, it works this way: Imperial is 70 per cent foreign owned. Therefore, 70 per cent of 70 shares equals 49 shares foreign owned. Thirty per cent Canadian owned of Imperial's 70 shares equals 21 shares. Petro-Canada, which is in the project for 30 per cent, is 100 per cent Canadian-owned, as we all know; therefore, its 30 shares are Canadian owned. Therefore, Imperial's 21 shares plus Petro-Canada's 30 means a 51 per cent'Canadian-owned project. However, the original partnership still gives Imperial not 51 per cent control but 70 per cent control. Certainly control is where the action is as opposed to the simple ownership.
It is interesting to note that 14 out of the 25 largest oil and gas producing companies are still foreign controlled in Canada. They dominate the industry's sales and cash flows. Unless we obtain control of the largest companies which dominate the market, surely "50 per cent Canadian" has virtually no meaning at all.
We in the New Democratic Party want majority control as well as majority ownership. When we look at countries in situations similar to Canada, virtually every country we can examine has developed a strong policy which would equal Canadianizing as we know it in this country. One might point out that the Americans do not have such a policy, and indeed they do not. But certainly the incentive is not there either; for when one looks at the American petroleum industry, which companies obviously own and control that industry? American companies own and control it. Therefore, there is not the incentive that we find in a country such as Canada which has sold out such a crucial and strategic resource to foreign corporations.
I want to talk for a moment or two about public ownership versus privatization. The Liberal plan of Canadianization really means replacing private foreign ownership with private
October 27, 1981

Canadian ownership. What guarantees do we have that privately owned Canadian oil companies will act much differently from foreign oil companies?


An hon. Member:: None whatsoever.


Nelson Andrew Riis: Does anyone believe that a good part of the $12 billion price rip-off of consumers by the multinationals, documented in the Bertrand report, would not have occurred if Husky, Dome, Norcin and Home Oil had replaced Imperial, Gulf, Texaco and Shell? Would Canadian corporate heads be acting and responding differently from American or Dutch corporation heads?
Privately owned oil companies, whether foreign or Canadian controlled, have as a goal the maximization of profits, to be achieved by one of a number of ways or combinations: higher prices, more exports, or more tax concessions. Canadian consumers and taxpayers lose under this scenario, as is so plainly evident.
While believing in some private ownership in this sector, the NDP wants majority public ownership and control. This is what we see as being true Canadianization. This is why we advocate making Petro-Canada a leader, by advocating a takeover of Imperial Oil, Canada's largest and most powerful oil company. The Liberal plan is to endorse and encourage private Canadian ownership at the taxpayers' expense, rather than public ownership to provide obvious taxpayers' benefits.
I want to emphasize one very critical point. Canadians, whether consumers or people involved in the oil and natural gas industry, are now concerned about exploration in the frontier lands of Canada and in the offshore opportunities. Under the National Energy Program, the taxpayers of Canada will fund a Canadian, privately-owned company to the maximum of 93 cents on every dollar spent on exploration on Canada lands. Ninety three cents out of every dollar will be supported by Canadian taxpayers, after tax, after a grand cost to the company of only seven cents on the dollar.
I suspect that a great number of industries in Canada would love to have the Canadian taxpayers paying 93 per cent of their development and exploration costs. I can certainly identify a number of small businesses in our country which would love to have that kind of government support. Of course, the companies which would be supported by the taxpayers are the same companies which take out full page ads in almost every major newspaper and publication in Canada, decrying the hard times they are facing and how much need there is for the Canadian taxpayer to be coming up front with 93 per cent of their exploration costs.
What kind of equity would the taxpayers get in return? Under Clause 27 of Bill C-48 they would only get a 25 per cent Crown share in federal lands. In this amendment, we say that the minimum public ownership on federal lands should be 50 per cent through the people's Crown agency, PetroCan.
Between 1977 and 1980, the federal Liberals gave income tax breaks to the foreign-controlled resource sector worth a total of over $13 billion without getting any equity or owner-
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ship in return. Over the same period, income tax collected from the petroleum industry was only $5 billion. We in the NDP say that it is time the consumers and taxpayers of Canada, who have funded the growth and profits of this industry, get some ownership in return. If we are paying the piper, it is time we called the tune. We can do that only through majority public ownership and control.


Mr. John Thomson (Calgary South):: Mr. Speaker, as far as I am concerned, the sad thing about the legislation we have before us this afternoon is that the people who wrote it did not have the faintest idea what they were doing. It looks as though some recent graduate in economics has sat down and said, "Look, finding oil is not all that difficult. All one has to do is punch a hole in the ground and up jumps some oil or gas. That is not very difficult, and if these oil companies do not want to do it, the government will do it."
The National Energy Program which has come forth from the Liberal government is playing Russian roulette with the welfare of the people of Canada and their future. I know that hon. members on the opposite side of the House do not believe that. I think they do not believe it because they do not understand the oil and gas industry. I do not think they really understand what they are trying to accomplish in this legislation. What this legislation is trying to say is that if we can destroy foreign investment in this country, and if we can destroy the oil and gas industry in some way, that will lead us to energy self-sufficiency or, more particularly, to oil self-sufficiency. Surely the critical factor in this legislation and in the whole National Energy Program should be energy self-sufficiency, more particularly oil self-sufficiency.
There are two aspects I want to address this afternoon. One concerns our relationship with the rest of the world, our trading partners, the foreign investors on which Canada must rely for its industrial and economic growth and with our friends. The other aspect is oil self-sufficiency. I want to tell hon. members categorically that we do not have a chance in blazes of achieving oil self-sufficiency by 1990. I do not care what the Minister of Energy, Mines and Resources (Mr. Lalonde) says, we will not achieve oil self-sufficiency by 1990. I will relate the reasons why that will not happen.
First, I want to try to put the question of oil self-sufficiency into perspective as simply as I can. Every day in Canada 1.8 million barrels of oil are consumed, of which we import 400,000 barrels a day. We have 1.4 million barrels of oil production within our country. Of that production, 200,000 barrels come from synthetic sources and 1.2 million barrels come from what we refer to as conventional oil production. We use 1.8 million barrels of oil per day. We produce 1.4 million barrels a day and 400,000 barrels of oil a day are purchased from OPEC.
In the 1981 report put out by the National Energy Board the consumption and demand supply relationship over the next ten years was looked at. The board reported that consumption will not increase very much over the next ten years. Therefore,

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we are looking at 1.8 million barrels of oil a day in the year 1990. That figure was predicated on two assumptions; first, that we would replace the 350,000 barrels of oil we are presently consuming by two methods. The first method would be by conservation and the second method by oil substitution. If we do not conserve and if we are unable to substitute, Canadians will be consuming about 2.2 million barrels of oil a day by 1990.
Let us accept the National Energy Board figures. Let us assume that we do conserve and that we do substitute to the tune of 350,000 barrels of oil per day. We will still need about
1.8	million barrels of oil a day. The National Energy Board tells us that in Canada by the year 1990 we will not be able to produce 1.4 million barrels of oil per day. In fact, our conventional oil production, which at present is 1.2 million barrels a day, will decline to 500,000 barrels of oil a day by 1990. That is what the National Energy Board tells us; that is not what I say. By the year 1990, 500,000 barrels of oil a day will be produced, and together with the 200,000 barrels of oil a day that we produce synthetically we will have a total of 700,000 barrels of oil a day.
The National Energy Board tells us that we will consume
1.8	million barrels of oil a day in 1990. We are told that we will be able to produce 700,000 barrels a day from existing conventional reserves and from synthetic production. If my arithmetic is correct, that is a difference of 1.1 million barrels of oil a day, meaning that somewhere in Canada we must find 1.1 million barrels of oil a day. If we do not find it, we will have to buy it. It is that simple. It is either find oil or buy oil from OPEC.
I wonder whether hon. members realize the magnitude of finding one million barrels of oil a day. Do hon. members know what that represents? Does anyone understand the enormity of finding one million barrels of oil production a day? This is not just a question of dollars, this is a question of people, technology and expertise. It is a huge undertaking. I do not know how to express it. It is not sufficient to say that it is a couple of hundred billion dollars.
We must bear in mind that since 1947 when the Leduc field was discovered we have developed about 1.8 million barrels of oil production. Over a period of 30 years, from 1947 to 1981 we have found about 1.8 million barrels of oil a day. But in the next ten years we have to find 1.1 million barrels of oil a day or, alternatively, buy it from OPEC.
Where will we find this oil? This is at the heart of the matter. We will not achieve energy self-sufficiency. I am sure of this because there are only three sources from which oil can come. Oil can come from the conventional oil fields in western Canada, the frontier areas, or it can come from the oil sands. There is no other place.
We may be able to produce oil from coal but I think the technology required is more than ten years away. Therefore, oil has to come from our frontier areas, from the conventional areas of western Canada or from the oil sands.
Let us deal with the oil sands first. I will not get into a long harangue about why the oil sands have not gone ahead. I think the Canadian people understand that. Perhaps hon. members opposite do not understand, but the Canadian people understand that it is because of the foolishness of the National Energy Program and the greediness of this government and other levels of government in terms of the tax regime and the pricing strategy for oil sands plants. If the Alsands and Cold Lake projects went ahead tomorrow morning, they would not produce a barrel of oil until after 1990. That is even if those projects were started tomorrow morning. Let us forget about the oil sands because we know that we will not get a drop of oil from them until after 1990, assuming that they do go ahead at some time.
Let us come to conventional oil production. I read an article the other day. I think the hon. member for Ottawa Centre (Mr. Evans) mentioned it as well. In any event, it was reported that by 1986 we will produce an additional 311,000 barrels of conventional oil in western Canada. Is that correct?


Mr. Evans:: Extra.


John William Thomson: That is 311,000 barrels of oil a day over what we are presently producing. I was in the oil business for a little while, but that statement is a joke. No major discoveries in western Canada of that magnitude, or anything like it have been made since 1957 when the Swan Hills find was discovered. Since 1957 we have not found an oil field that can produce more than 100,000 barrels of oil a day in western Canada. In the last 15 years, apart from a few ups and downs, the oil industry has been making an all-out effort to find oil and gas, except during 1974 when there was another federal-provincial conflict.
Coming back to the potential for finding more conventional reserves in western Canada, I want to point out that a year ago, before this great and wonderful national oil program that will produce all this great oil self-sufficiency for Canada came into effect, we had 600 rigs in western Canada, perhaps not all of them working but available for work. Do you know what has happened in the year since the national energy policy? Some 209 of those drilling rigs have gone across the border to the United States. Today we have 236 rigs working in western Canada with 189 rigs down compared to 455 rigs working last year. We have an industry which a year or 18 months ago was making an all-out effort to find oil and gas in conventional fields in western Canada, yet we have not come up with any major discoveries of oil in the last 15 years. Yet what the government would like us to believe is that we are going to reduce drilling by two thirds and come up with 311,000 barrels per day of conventional production by 1986. Anyone who wants to believe that will believe anything. With the National Energy Program we will be very fortunate if we are able to find 100,000 barrels a day of new oil production by 1985. I would think we would be extremely fortunate if we find 200,000 barrels a day by 1990.
October 27, 1981

I can tell the House one thing for certain. Under the rules of the energy pricing agreement signed between the province of Alberta and the federal government in September, there is not a chance of that in the world. I am not the only one who would not invest a nickel in the oil and gas industry in this country today. There are hundreds of thousands of people who would not invest one cent, because there is no incentive. Understand me, there is no incentive; and that is why I say there is very little chance we are going to make any significant contribution to oil self-sufficiency from conventional fields under this government.
This brings me to the heart of this legislation before us. As I said before, we have three chances of finding one million barrels of oil a day, and that is in the oil sands, through conventional oil discoveries, and in the frontiers. What have we got in the frontier areas today? We have the discovery 200 miles off the east coast of Newfoundland in 250 feet of water, and that is in one of the most hostile environments in the world. We think we have another discovery in the Beaufort Sea. The operator of that property has not said categorically that we do have a discovery. They think it is promising but we do not know the potential. Let us assume that it is promising. Hibernia certainly looks very promising, but I ask hon. members to think about this. Do they know how long it took from the original discovery in the North Sea to put North Sea production onstream? It took over ten years to get that oil to market from the initial discovery in the North Sea. While the North Sea is a very hostile environment, it cannot be compared with the environment at Hibernia. We do not have the technology today to get that oil to market.
The unfortunate part of the discovery is that it lies in 250 feet of water which is scoured by icebergs the better part of the year. We do not know how to stop those icebergs from tearing up whatever we put down there to produce the oil. You have to put a valve on the well casing, and somehow or other you have to protect that valve from all these icebergs. We do not know how to do that, but I am confident they will come up with an answer.
The point I want to get across to members of this House today is that it is very unlikely we will see any production from Hibernia until well past 1990. It will be a miracle if we see production from Hibernia before 1990. We should consider ourselves very fortunate that we found the oil. Please do not misunderstand me.
I do not know how many members have ever been in the Arctic or in the Arctic Islands. I happen to have been there and I can say that it is again a very formidable and hostile climate. If you have to go through 20 feet of pack ice with a tanker to get that oil out, 1 am just not altogether sure you can do it. Perhaps hon. members will remember the Manhattan and Esso's experiment in taking the Manhattan through the Northwest Passage. It had to turn back. There are icebreakers that probably could get through, but we do not have them today. We do not even know what we have today in the Beaufort Sea, but if we did know we would have to develop it, and that means we would have to go out and delineate the
Canada Oil and Gas Act
reserves. We would have to figure out technologically how to raise the oil to the surface and put valves in place above the ice. We would have to figure out a way to protect those valves so that when the pack ice moves it does not wipe out the wellheads. After we have done all that we have to figure out how to get the tankers in, load them up and take them through the Northwest Passage to market.
If anybody believes we are going to have that oil to market before 1990, they are living in a dream world. I sincerely hope we can get some oil from Hibernia and out of the Beaufort Sea before the end of the century. If we can do so we must consider ourselves very fortunate.
Am I coming to the end of my time, Mr. Speaker?


An hon. Member:: Carry on.


Mr. Deputy Speaker:: The hon. member may continue with the consent of the House. Is there unanimous consent?


Some hon. Members:: Agreed.


John William Thomson: What I am saying is that we will not get any oil out of the frontier areas before 1990. We are not going to have very much in the way of new conventional production and the oil sands will not be in production. What is the alternative? We are going to be importing a million barrels of oil a day in 1990. That is how I see it. Are we going to put ourselves in the hands of OPEC, the Arab sheiks, and in the hands of other OPEC countries who may not be quite so friendly? Is that where we want to take our country? Do we want to make our country dependent upon OPEC when we have the reserves to do the job?
This legislation before us in Bill C-48 is not legislation that will encourage production in our frontier areas. The National Energy Program certainly is not going to encourage production from the oil sands or from conventional producing areas. What this legislation before us this afternoon, Bill C-48, does and what the whole National Energy Program does is what I referred to when I said we were playing Russian roulette with the life and economic future of our country. Members opposite do not understand that, and that is why I say I do not think they know what they are doing. Wake up before it is too late.
I had quite a number of other comments to make, Mr. Speaker, but I would like to finish with this. Let us put aside the question of foreign investment in the Canadian oil industry and let us put aside economic nationalism for the moment. Do we want to be known by our friends abroad as a government that steals? Do we want to be known as cheats and thieves? This legislation will put Canada at the top of the list of thieves and robbers. The government is taking property away retroactively. It is confiscating that property with virtually no compensation.
The government says this is not confiscation but compensation for earlier incentives given. If that is so, why were the rules of the game not spelled out when the incentives were

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given? I do not accept that statement and I do not think our friends abroad accept that statement. Nothing in the original exploration conditions indicated that the government would take 25 per cent of any successes. When the government gave permits to search for oil in Elibernia, the Beaufort Sea and Arctic Islands, it never said that in ten years it would come back and expropriate 25 per cent of the winners. The government does not want any part of the losers, but it will take 25 per cent from the winners.
The compensation does not reflect the value of the reserves stolen. All the government intends to pay for is the small portion of successful companies and nothing for the companies which end up with dry wells. Compensation is totally unfair with regard to the reserves found. If the government were honest with itself it would, at the very least, pay the fair market value for the reserves taken.
The compensation is to be made on an ex gratia basis without acknowledging any obligation whatsoever. The government has, in effect, admitted that this compensation is nothing more than political expediency in response to the criticism of the legislation originally planned which was going to give no compensation for the land expropriated.
Canada cannot live as an island unto itself. We must trade for our livelihood. We require large sums of foreign investment capital to develop our industry and resources. Above all, Canada needs some friends. I do not call anybody who steals from me a friend. I do not think the Canadian people want a government which steals from others.


Mr. Blaine A. Thacker (Lethbridge-Foothills):: Mr. Speaker, I would like to speak in favour of Motion No. 21 in the name of the member for Etobicoke Centre (Mr. Wilson). This motion clearly sets out a major difference between the main parties in the House. It clearly combines the Liberals and the New Democrats as a party who hold themselves out to the Canadian people as being in favour of state ownership and control. They are saying to the Canadian people that we can have a bureaucracy in Ottawa and a state-controlled company which can find oil, produce it and sell it to us at presumably competitive prices, if not cheaper. Canadians should understand that I am talking about two parties that believe the means of production in Canada should be owned by the state. That is their philosophy.
In contrast, the Conservative party believes those assets should be owned directly by Canadians. That is what we want for this country, for every Canadian to have a direct share in ownership.
When our ancestors came to this country and they owned a quarter section of land, they felt they owned the country directly. Now, with over 90 per cent of Canadians living in cities, the only way they can own anything directly is to buy shares.


Mr. Waddell:: How many people own shares?


Blaine Allen Thacker: Canadians cannot even afford to buy houses any more as a result of this government's economic policies.
They cannot keep the homes they already have. Our party believes Canadians should own shares directly. That is the real choice Canadians now have to make.
Clause 27 of Bill C-48 provides for the government to confiscate 25 per cent of any oil and gas found from both non-Canadian companies and Canadian companies. That 25 per cent will be vested in our state oil company, that paragon of virtue, Petro-Canada.
I would like to give a quick history of Petro-Canada for the benefit of members of the House. This may allow them to come to a better conclusion as to whether or not we should put our confidence into state-owned companies-whether it be Petro-Canada or some other Crown corporation-controlled by bureaucrats. Let us examine Petro-Canada to see whether it justifies our trust and confidence.
Petro-Canada was formed in 1976 as a Crown corporation. In a Crown corporation, all shares are owned by the Government of Canada rather than by individual Canadians. It is a company owned by our Prime Minister (Mr. Trudeau), who is advised by his cabinet and the bureaucracy. They make the decisions. When Petro-Canada was originally set up, the government, already in a deficit position, decided on behalf of Canadians to borrow $210 million at the going interest rate and buy Petro-Canada shares. It received preferred shares and we should understand what preferred shares are. They do not only represent ownership, they also pay a dividend, assuming they are that type of preference share. The shares that the government takes are non-cumulative dividends. At the end of the year, if Petro-Canada does not pay a dividend, it is lost forever. Canadians therefore will get no return on that money.
We have a company, Petro-Canada, with a 15 per cent interest in Syncrude and a 45 per cent interest in Panarctic Oils. It has a president and staff. What did this company do? Did it start to search for oil and develop the technology to find the oil under the land? No. It went out and bought an existing company. It took the money we paid for our shares and bought Atlantic Richfield. It paid $342.4 million and renamed the company Petro-Canada Exploration. It took over a staff of 300. It obtained existing leases and property. That did not add one barrel of oil to the Canadian market. All it meant was that money left the country.
At the end of 1977 it had net earnings of $3.3 million from an investment of $383 million. That represents a rate of return of about 1 per cent. It did not pay a dividend so Canadians did not receive one cent. This continued through 1977. Petro-Canada presumably went out to explore and drill but it was unable to make a find and was getting into trouble. So the government gave it another $154.5 million-more preferred shares, non-cumulative dividends. It still needed help. Therefore on December 7, 1977, the government passed the Canada Oil and Gas Act. That act gave Petro-Canada preferential treatment in obtaining leases.
When leases were being granted in this country, which company got first choice? Petro-Canada. Why would that be? It would have to be because when we set up a government corporation, we cannot have it fail. If it fails, that reflects on
October 27, 1981

the government. Therefore, it was given preference shares, non-cumulative dividends, priority to get land as compared to the private companies, of which there are over 700 in this country competing and trying to find gas and oil.
Petro-Canada had to have a further advantage. If any private company found oil anywhere in Canada, Petro-Canada could buy it. This was the famous back-in clause. Many of us opposed that. We felt that one should not get something for nothing. We felt the company should not get the right to buy a 25 per cent share unless it found the oil. That was government wisdom, and I will come back to that.
At the end of 1977 we have the company earning some $9.5 million on a government investment of about $540 million, a return of about one half of 1 per cent. No money is actually paid because it is running into more trouble. In 1978, away it goes again. It is out on the frontier, but not finding any new oil. The government has to buy more shares. Petro-Canada thought it had to have more help. Because it could not find any more oil, the government kicked in $239.4 million.
Was Petro-Canada developing any research and development? Not one bit. Was it developing a new seismic method to find oil where the old test could not? There was not one bit of technology. Was it developing better distributing systems? No, it was not doing any of that. The multinational corporations of which substantial shares are owned by Canadians were doing that, but not our own Petro-Canada.
What did it do in 1978? It did not find anything new so it went out and bought Pacific Petroleums. Remember, Pacific Petroleums was trading on the market at $65 a share. The total price was $1.4 billion. Petro-Canada had no money, so what did it do? It used the tax act. Very neat. It borrowed the money from Canadian banks that are operating overseas. Those banks took preference shares, exactly the same type of general share which the government had. However, the bank shares have cumulative dividends as compared to the government preference shares that are non-cumulative. At the end of the year, even if a dividend is not declared, the fixed rate accumulates so that the amount of money owing by Petro-Canada to the banks goes up and up.
In order to sweeten the deal even further so the banks would lend this $1.4 billion to Petro-Canada, they were told that under the tax act, if they lent the money they would not have to pay income tax on the interest. The banks lent the $1.4 billion. It is a good deal for them. They get cumulative preference shares, a guarantee of payment and they do not have to pay income tax on the interest.
That deal closed on November 10, 1978, and the income tax loophole was closed on November 17. Do you know what that meant? It meant that the other 700 oil and gas companies could not take advantage of that provision, just the national Crown corporation. You wonder how they could have got in under the deadline. You find that a director on the national state oil company is also in the finance department. The most recent example of a member of Petro-Canada being on the
Canada Oil and Gas Act
staff of the Minister of Energy, Mines and Resources (Mr. Lalonde) was just a reincarnation of past wrongs. We know that a staff member of Petro-Canada actually wrote the budget that gave Petro-Canada all of these incredible advantages over the other 600 and some companies trying to find oil for Canadians.
Another aspect of that deal with Pacific Petroleums that was very sour was the situation where the government was able to use the Canada Business Corporations Act to force the sale of $430 million worth of shares owned by Canadians to Petro-Canada. That is why we in this party want to have in our Constitution the entrenched right to own property. If we had that right, the government could not force people to sell shares to it; it would have to buy them on the open market. That is why our friends on the left and the Liberals oppose that right to own property. They do not want Canadian citizens to own those assets and to have a direct benefit for themselves and their children. That is the secret behind that.
We now get to the end of 1978. By this time the company has taken over two existing companies, both of which operated in Canada, both of which had some Canadian shareholders. These companies were trying to find oil and gas for us and our descendants. They are now all part of one company. Incidentally, those companies were paying income tax. One paid something like $77 million. Petro-Canada does not pay income tax. When you take the interest we have lost on money we have invested and the lost income tax, it far exceeds the amount of money those companies would have paid to their foreign shareholders by way of dividends.
I have been told by the hon. member for Calgary Centre (Mr. Andre) that historically the amount of those dividends in the oil industry amounts to something like 2 to 3 per cent. We have now borrowed $1.5 billion, put it into Petro-Canada and got back non-cumulative preference shares. The interest cost on that $1.5 billion at 19.38 per cent, which is the last Canada Savings Bonds interest, far exceeds any dividends that used to leave this country.
By the end of 1978 there were net earnings of about $13.7 million and a government investment of $778 million, a return on paper of about 1.5 per cent. Most of that income came from companies that were existing because Petro-Canada had not by the end of 1978 found oil on its own.
In 1979 and 1980 when the Conservative government was in power we put no money into Petro-Canada. We felt it ought to be able to get along on its own. Canadians had already invested over a billion dollars in it. In fact, we wanted to give share ownership to individual Canadians so that at the end of the year the directors and officers of Petro-Canada would have to stand up and give a daily or yearly accounting to their shareholders, the men and women in this country who v/ould have had 15 or 20 shares, the widows who count on their dividends. These people would have been able to look the president in the eye and say, "Where are my dividends? What have you been doing with my money? You are in a trust situation."

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Canada Oil and Gas Act
That did not occur. The Minister of Finance (Mr. Mac-Eachen) does not go to the officials of Petro-Canada on behalf of the main shareholder and ask what is being done for the citizens of Canada. Why would he do that? His reputation is at stake. He has to make the corporation go. After the Liberals came back into power, they put in more money. Another $440 million was put into Petro-Canada, all money to be paid for by the taxpayers of Canada, and all of it had to be borrowed.
The last takeover was Petrofina, another successful public company paying dividends to its Canadian shareholders and foreign shareholders. It is interesting to note that during the forties when the west was trying to develop its oil industry, it went to Bay Street in Toronto to borrow money to develop. Was money made available by Canadians then? Not one cent. They would not give money to develop the oil industry at any rate of return. They would not take any equity. The people of The Netherlands did through Shell; the people of Great Britain did through BP and Gulf; and the Americans did through Imperial Oil. They developed this country and let us have oil when our own citizens would not do it. Before this whole deal arose, the shares of Petrofina were trading at about $60 each. As inevitably happens, the minute there was talk of a possible sale to the government, the price of the shares went up. The people of Canada ultimately bought those shares at $120 per share, more than twice their worth.
It might be said that we got 1,100 used service stations. It is true we did. It is also true that we got some leases. However, did we get the heart and core of Petrofina, the future of Petrofina, its petro-chemical plant? No. That was pulled out of the deal. We paid $120 per share for shares that six weeks before were worth only $60, and we did not even get all the assets. They kept the petro-chemical plant and it is that plant which is the future of this country. We have many old, used service stations. They are not even on the prime corners. It is a crime.
How did the government finance the purchase, Mr. Speaker? There is about $440 million authorized in the blue book, bringing to a total of $1.5 billion the amount which we have put into Petrofina. We have also given Petro-Canada 25 per cent carried interest, which is the expropriation, the confiscation program. The government is going to confiscate 25 per cent of the successful production not only of the multinational corporations, but from our own citizens who have created their small Canadian companies, who went out and created new technology and who found oil and gas where they could. The government will now take it away from them.
To my mind the final humiliation, the final indignity, in order to make this company successful, after having given it $1.5 billion, the preference to get leases, the right for a 25 per cent purchase and an absolute expropriation of 25 per cent, this is still not enough; we have to tax the citizens of Canada. Every time a Canadian drives up to a service station to fill the gas tank, a portion of that money goes directly to pay for the
purchase of Petrofina. All of that money is going out of the country.
Here is the ultimate kicker. We are buying an industry that really is on the tail end. It started in the 1940s, it is peaking now, and by the year 2020 it will be gone. By then we will be into solar, wind and hydrogen power.
Why are we spending our taxpayers' money to buy an industry that is at the end? What are these companies doing? What did Petrofina do with its $1.5 billion? What did Pacific Petroleums do with its $1.5 billion? They are getting in on the next wave of technology, which is the computer industry, the high technology industries, and solar and hydrogen energy. When the petroleum is gone, where will we get our energy? We will get our energy from the multinational corporations that are in on the next wave. It is absolute insanity.
I plead with the members opposite to use some common sense before they get into this nationalization game. Mr. Speaker, think of what $1.5 billion would do today in the computer industry. If we are going to turn to our citizens, I would have no trouble at all in going back to my citizens in Lethbridge-Foothills and saying, "Folks, I want to borrow $1 billion so that we can put it into high technology, so that it will do something for our children and our grandchildren." But I do have trouble going back to my constituents and saying that we are going to buy the tail end of an industry, where the money will go to a multinational corporation to invest in hydrogen technology. We will then have to buy from them in the future. It is absolutely insane.
The last point I should like to make is in reference to my hon. friend from Kamloops-Shuswap (Mr. Riis), who talked about $12 billion being ripped off by the oil companies. His implication was that the private companies, even if owned by Canadians, would not be any better. I say to him that it would be far worse with Petro-Canada. Look at the experience of Atomic Energy of Canada Limited. Does that Crown corporation act in the best interests of Canadians? There is hard-core proof that it entered into an international conspiracy that was equally oppressive to our citizens than what the oil companies might have done.
The hon. member says taxes will increase. I suppose that is true, they might. But corporate taxes just end up flowing through to the people. If you tax my corporation, I will just increase the price of my product. That passes on to the poor citizen at the end of the whip. The long and short of it is that the individual citizen at the end of the shovel is the man who pays the full cost in the end.


Mr. Jim Manly (Cowichan-Malahat-The Islands):: Mr. Speaker, I should like to speak in support of the amendment of my colleague, the hon. member for Vancouver-Kingsway (Mr. Waddell) to increase the level of Canadian public ownership of the oil industry to 50 per cent on new projects on Canada lands. In this and in other amendments that my party has proposed we are calling for an affirmative action program for the Canadian people in the oil industry. We want to see the Canadian people receive a guaranteed part of the action.

My colleagues from Vancouver-Kingsway and the hon. member for Kamloops-Shuswap (Mr. Riis) have clearly shown that present proposals in the bill calling for 50 per cent Canadian ownership are nothing more than a farce. The loopholes are big enough to accommodate a supertanker. A consortium can meet the requirements for 50 per cent Canadian ownership and still be controlled effectively by a foreign-based multinational. Different patterns of ownership and control mean that Canadians could easily have 50 per cent or more ownership; but Canadians would not necessarily have control. This is illustrated very clearly, Mr. Speaker, by the fact that at the end of 1980 foreign ownership stood at 74 per cent, but effective foreign control was still at 82 per cent in the oil industry.
Canadian ownership and Canadian control must go hand in hand and they should be increased to 75 per cent by 1986, as earlier amendments have stated. Amendment No. 22 states that the rate of Canadian public ownership of new projects should go to 50 per cent.
The Tory energy critic opposed the New Democratic Party proposals because he says that these will mean more regulations for the oil industry. As I listened to his speech last Friday, he sounded more and more like a member of the Reagan cabinet in the United States. He appears to support the oil industry in some so-called right to do exactly as it pleases, regardless of the economic consequences for Canada and of our national priorities.
The great hue and cry which he echoes against regulations is really a plea to let the naked self-interest of giant corporations rule in the marketplace. This kind of thinking sees environmental regulations, health regulations, or regulations directed toward any other social goal as a false interference of politics into the sovereign realm of free enterprise.
To listen to the Tories, Mr. Speaker, you would think that the oil industry should operate in some kind of value-free environment, completely beyond the scope of politics. This does not accord very well with the fact that in 1979 the oil companies gave the Liberal and Tory parties some $721,000 in political donations. To me this does not seem to be a hands off policy.
The Tory energy critic objected to our reference to a capital strike by the oil industry. Last Friday he said, to quote him, that "the New Democratic Party calls it a capital strike." Well, if an employee does not like the conditions in a company and he quits to go to work for another company, he has not gone on strike; he has simply quit. He is exercising his individual freedom. A strike is something else again. As a result of the new energy program, the oil industry is exercising its freedom.
That comparison is ludicrous. Equating the economic power of a huge corporation like Imperial Oil withdrawing its funding for Cold Lake with the power of an individual working person quitting his job is nothing short of ludicrous. But it reflects some of the thinking that we find on the benches to our right.
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The Bertrand report makes it very clear that Canada's oil industry has shown a remarkable degree of solidarity in the way it has worked together to gouge the Canadian public. The withdrawal of capital from projects in western Canada over this past year and a half shows a similar tendency. The oil industry is acting in concert and not as a series of isolated and individual companies. Indeed, there has been very clearly a strike of capital.
If we look at the two amendments before us, Mr. Speaker, we see the differences among the three parties. The former energy critic in whose name Motion No. 21 stands, the hon. member for Etobicoke Centre (Mr. Wilson), says, in effect, yes, we favour 50 per cent Canadianization. But the only role he sees for public ownership is to pick up the pieces that the private sector does not want.
Last Friday he called this "picking up the pieces" philosophy the traditional Canadian way. The traditional Canadian way, as seen by the Tory party, involves public corporations taking all the unprofitable operations and private corporations creaming the profits. If there was to be joint ownership of a cow, the Tories would want the private sector to have the part that gave the milk, while the public sector could have the part that did all the eating and required all the attention.
Far from supporting our party's call for 50 per cent public ownership, the present Tory finance critic objected to the back-in provisions by which the Crown could obtain 25 per cent of new development on Canada lands. Several times he complained bitterly that some of these provisions were at no cost to the government or to Crown corporations. But in his speech he completely ignored past concessions. He said nothing about the overly generous grant system by which Canadian taxpayers put up $4 for every $1 which is spent by a 65 per cent Canadian-owned company in frontier exploration. Taxpayers through the government put up over 80 per cent of the money for exploration in these circumstances but get only 25 per cent ownership, while the private company puts up 20 per cent of the money and gets 75 per cent ownership. It sounds like a pretty good deal for the private company as far as I can see, but it is not good enough for the Tory party.
In addition to these grants, tax concessions give even more of a break to private companies, so that taxpayers put in 93 cents on the exploration dollar and private companies put in 7 cents. On that basis I cannot see where they can complain about having a 25 per cent back-in provision. In fact, it is too inadequate and we should be supporting Motion No. 22 which calls for 50 per cent.
With that kind of deal the Tories still object to the public's opportunity to acquire a 25 per cent interest, when in many cases it will have already paid over 90 per cent of the exploration costs. Also taxpayers will have to pay compensation for any of the 25 per cent options they pick up, but as far as the Tories are concerned it is too good a deal for the public.
On the other hand we have the Liberals. Their approach is best understood by reading excerpts from a speech given by

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the Minister of Energy, Mines and Resources (Mr. Lalonde) last March in Toronto, as reported in the June-July issue of "The Canadian Forum". The minister said when talking about the Liberal party:
We saw that since 1974 the oil and gas industry has been a net capital exporter. In spite of all the rhetoric about how much we needed the multinationals and about how they were doing such great things for Canada, all the money that they were spending in this country had been raised inside Canada, out of the Canadian taxpayers and the Canadian consumers, and that since 1974 the industry had been a net exporter to the tune of about $3.7 billion ... We also saw that the decisions affecting the future of the oil and gas industry and therefore the well-being of all Canadians were being made by foreigners in the corporate boardrooms of the foreign parents-
And my experience in the last year as a minister has demonstrated beyond any doubt that when it comes to the issues that count, those decisions are made where the control is, and that is outside of Canada ... I suppose you can blame us for not having seen it before, and indeed I still knock my head on the wall every once in a while and say why didn't we do it ten years ago? ... but that s no reason to abandon the task that's ahead of us.
It is touching to imagine the minister knocking his head on the wall, bewailing his failure to act and the failure of the government to act in past years. This is something which he shares with millions of Canadians who have been gouged by the oil companies, those who have suffered from past decisions of the government. As they face the consequences of the government's policies over the last ten years, they too want to bang their heads against the wall.
But the minister is not being completely candid when he pretends that he has only seen the light of nationalization in the last couple of years. The 1974 Liberal election platform promised a 50 per cent to 60 per cent Canadian ownership for all new energy projects. But of course, being part of the Liberal election platform does not guarantee very much. I remember reading a story about the late Right Lion. Arthur Meighen who at one point defended a policy which he thought was important. Someone shouted from across the floor, "That is in the Liberal platform." Mr. Meighen said:
Mr. Speaker, I am sorry to hear it. Had 1 a wish dearer to my heart than all others, the worst fate I could fear for it would be that some day it would get into a Liberal platform.
We feel that way about some of our programs. We see the Liberals adopting the rhetoric of them but not including any of the substance. The Liberals are the great accommodators. They pick up a few progressive ideas from members of the New Democratic Party, a large measure of reaction from the Tories and bring them both together into a bureaucratic stew, and no one knows what it is.
The minister laments the failure of past policy decisions by the government. He admits that these decisions have not served the needs of the Canadian people. But ten years ago New Democrats were urging the government to obtain control of the oil industry for the Canadian people. Today we are showing the inadequacy of the present legislation. We would like to see some movement which will provide for a larger measure of public ownership, stiffer regulations to identify Canadian ownership with Canadian control, an increase in the percentage of that ownership before companies can obtain maximum benefits, guarantees for Canadian content in spinoff industries, and explicit protection for aboriginal rights and
for the environment. Also we would like to see more emphasis on renewable energy and conservation.
We want to see some movement on these things in this bill. Otherwise, ten years down the road Canadians will be paying for these mistakes just as they are paying for past ones today and Liberals, if there are any left, will be saying, "It was an honest mistake". It will not be an honest mistake; it will be a stupid mistake. I urge support for Motion No. 22 to increase the Crown share from 25 per cent to 50 per cent so as to give the Canadian public some protection from profit seeking and to ensure that some of the benefits of the oil industry stay with Canadians.



PROCEEDINGS ON ADJOURNMENT MOTION


Mr. Deputy Speaker:: Order, please. It is my duty, pursuant to Standing Order 40, to inform the House that the questions to be raised tonight at the time of adjournment are as follows: the hon. member for Nepean-Carleton (Mr. Baker)-Government of Canada-Decentralization program, (b) Justification for program; the hon. member for Winnipeg-Assiniboine (Mr. McKenzie)-Industry-Location of Aerospace Training Centre Institute, (b) Request for commitment to Winnipeg site; the hon. member for Skeena (Mr. Fulton)-Wildlife- Export of falcons to Middle East.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed consideration of Bill C-48, to regulate oil and gas interests in Canada lands and to amend the Oil and Gas Production and Conservation Act, as reported (with amendments) from the Standing Committee on National Resources and Public Works, and Motions Nos. 21 (Mr. Wilson) and 22 (Mr. Waddell).
Mr. Roy MacLaren (Parliamentary Secretary to Minister of Energy, Mines and Resources):: Mr. Speaker, under the motions now before the House we have heard considerable discussion both at an earlier sitting and today about the Canadianization of our petroleum industry. I want to take this occasion before we move to the vote on the motions now before us to clarify some of the major concerns which have
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been raised and to review the intent of government policy in several areas.
First, it is necessary to define clearly what we on this side of the House mean by Canadianization. We mean Canadianiza-tion as being conducted both by the private sector and by the public sector. We look for one half of the oil and gas industry to be controlled by Canadians by 1990. As I have indicated in this House before, for us Canadianization means giving Canadian oil and gas companies, Canadian investors and indeed all Canadians, an opportunity to participate in their own petroleum industry, and an opportunity for Canadian companies to grow more quickly than in the past. Canadianization is not intended to force out foreign companies or make their operations in Canada unprofitable. For example, under the National Energy Program, the net cost to foreign-con-trolled firms exploring in Canada will remain lower than comparable costs in the United States.
Before the announcement of the National Energy Program a year ago tomorrow, an unforeseen ramification of one government policy was increased foreign ownership in the petroleum industry. I refer to our resource taxation policy. Companies already in the industry and with the largest production received large windfall profits due to skyrocketing oil and gas prices as the result of the OPEC increases. Most of these companies were foreign controlled. They were the main beneficiaries of the earned depletion allowance since that deduction from taxable resource income was available only to firms whose principal business was resources and who had existing resource income. Under the old policy, there was a built-in guarantee that foreign-owned firms would become larger. That dilemma was not faced by any other country and clearly was not one that would be tolerated by any other country. Things had to change, Mr. Speaker.
By 1980 the massively foreign-owned and controlled Canadian oil and gas industry accounted for almost one third of the non-financial sector profits in Canada. The government came to the logical conclusion that too much power was destined to reside in the hands of non-Canadians. Unlike the policies of many other countries seeking to redress a similar situation, this government offered profitable inducements to Canadianization, not expropriation, measures. The operations of foreign firms in Canada are very profitable. To the extent that they increase the opportunities for Canadians to participate with them, they can be even more so under the National Energy Program.
Unquestionably, some of the guidelines for companies in the oil and gas sector have changed but the changes are both fair and equitable. The program gives foreign companies an incentive to seek Canadian shareholders and partners. To the extent that they do, they can benefit from the same higher exploration grants that companies which are Canadian controlled already enjoy. Many foreign-controlled companies, recognizing the real concern of Canadians with respect to their own energy future, have begun to rearrange their affairs to take
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advantage of the benefits of the program. In doing so they are prospering under its conditions.
Canadianization is working. Since the National Energy Program was announced, foreign ownership of the petroleum industry has declined by about six percentage points and foreign control by about ten percentage points, to 67 per cent. Endorsement of Canadianization by the government of Alberta, the government of British Columbia and most recently by the government of Saskatchewan illustrates the strong support which the national government's position has gained in this regard.
In the agreement reached with Saskatchewan and announced on Monday of this week, the Premier of Saskatchewan and the Prime Minister (Mr. Trudeau) noted that energy developments in Saskatchewan should proceed rapidly. They went on to say:
The two governments, working in co-operation, will ensure that Saskatchewan will play a significant role in contributing to the attainment of Canadian energy security and further Canadian ownership of the oil and gas industry in this decade.
Such a development is to be warmly welcomed, as is the imaginative and leading role that Petro-Canada has been playing in the Canadianization of our petroleum industry.
Last Saturday I had the pleasure of opening the first Petro-Canada gas station in Ontario in the splendid riding of Etobicoke North, an area of Toronto noted for its progressive thinking! I did so partly in honour of the hon. member for Vancouver-Kingsway (Mr. Waddell), who claims to be from Vancouver but in fact is from Etobicoke!
By mid-October this year some $6.7 billion had been spent on acquisitions of foreign companies in the over $100 million price range. Besides those acquisitions, however, there have been farm-ins by Canadian companies on foreign-leased land and the formation of new exploration companies with foreign and Canadian participation combined. Those types of activity are expected to increase once the Petroleum Incentive Program has been adopted, but I want to make it clear that the majority of Canadianization will be done by the private sector.
I should like to turn now to a point that has been raised in the course of discussion this afternoon. I refer to the question of the 25 per cent Crown share which is to apply to all oil and gas rights except those where commercial production has already been attained.
One must place the 25 per cent Crown share in its proper context. The provision is but one part of a broad and comprehensive new oil and gas regime in the Canada lands. As such, the Crown's share cannot be viewed in isolation from the larger package.
Individual portions of the new oil and gas regime do not replace particular aspects of the previous anachronistic system; rather, the present legislation extinguishes the present system in most of its aspects. In place of the old system, Bill C-48 makes available to current lease and permit holders, as well as to new players, an entirely new package which includes as one element, a 25 per cent Crown share. The new system, includ-

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ing the Crown share, is an instrument designed to ensure that exploration and development of the resources in the Canada lands go forward rapidly.
Novelty has apparently resulted in some confusion. As illustrated in the program, there will be a 25 per cent federal cash incentive grant available to all explorers to offset the 25 per cent Crown share. This grant means that the government will be paying, and ultimately the taxpayer will be paying, its own way. Quite simply, the Crown share will not be a free ride. There is also no discrimination of foreign companies; the 25 per cent cash incentive is available equally to all.
Moreover, if the designated Crown operation converts to a working interest during the exploration stage, the government, in effect, pays almost twice for its interest during the balance of that stage. The private interest holder will continue to receive the minimum 25 per cent exploration grant in respect of his 75 per cent interest, while the Crown corporation will pay for 100 per cent of its working 25 per cent interest.
OO)
Between these two sources of funds, nearly 44 per cent of exploration costs will be met by or on behalf of the federal government. In this light, it is easily seen that the federal government is providing generous encouragement to firms with interests in the Canada lands. Not only is the government prepared to pay to all the minimum of 25 per cent in direct grants to cover exploration costs, but it is also prepared to pay up to 80 per cent in such grants, depending on the level of Canadian ownership.
Those who would criticize these measures should also consider that income tax rules continue to provide substantial indirect subsidies for many companies. The after tax, after grant costs of frontier exploration is greatly reduced as a result of the provisions of the National Energy Program. For example, Canadian companies will have net exploration costs as low as seven cents on the dollar. For others, the cash costs of a dollar expended on Canada lands exploration will be no more than 28 cents.
Against that background, let us consider the "back-in" share. Concerning application of the 25 per cent Crown share to oil and gas rights issued before the passage of the new act, there is a significant difference between the current Canada lands regime and the proposed package in Bill C-48. Under the current regime, holders of exploration rights are required to return to the Crown at least one half of their acreage, which could in certain cases involve up to 30 per cent of their discoveries, prior to obtaining production rights.
It is difficult to understand the argument of those who contend that the current regime's provision for return of acreage does not pose burdens to those exploring. If this were indeed the case, then why have explorers, in several cases, opted for special renewal permits on their entire acreage, thereby accepting a 25 per cent Petro-Canada back-in? They could have chosen to move directly to lease, thereby yielding up one half of their acreage, but avoiding a Petro-Canada back-in. They could have chosen to move directly to lease,
thereby yield up one half of their acreage, but avoiding a Petro-Canada back-in.
Under the legislation before us, holders of exploration rights will not face this situation. They will be allowed to retain production rights to the entire area of an oil or gas field.
The Canadian taxpayer has long been assisting petroleum companies in meeting their expenditures in the frontier regions. Through taxpayers' dollars, Canadians have been funding much more than one quarter of frontier exploration and development costs. It has been common for more than 90 cents of an exploration dollar to be covered by the contributions of the Canadian taxpayer. It is an understatement to say that federal tax incentives have been generous.
There is no doubt that Canadians own 100 per cent of the Canada lands and the oil and gas resources beneath. Private companies are allowed to explore and develop these resources, but on the clear understanding that, as landlord, the federal government can set a regime which is appropriate to the circumstances. Of course, this situation is not unique to the Canada lands. It is the common prerogative of all governments having the responsibility of managing a nation's resource heritage.
There is no basis for charges of confiscation without compensation. The new system, including the 25 per cent Crown share, supersedes the existing regime in every respect. The only exception is in the case of fields which are already in production, for which, as I have said, existing terms will remain in force even after the passage of this bill. The government is satisfied that the proposed regime is equitable in every way. Nevertheless, to dispel any contrary concerns remaining on the part of those who have been critical of the 25 per cent Crown interest provision, we have proposed reimbursement of actual exploration costs already incurred. In that spirit of compromise, we introduced amendments to provide payments in respect of 25 per cent of expenditures made up to the end of 1980 in respect of any petroleum discovery which results from a well prior to that date and which qualifies to be declared a significant discovery prior to the end of 1982. Qualifying expenditures will be determined on the same basis as those eligible for inclusion in the calculations set out for the progressive incremental royalty elsewhere in the bill.
These payments will be made from the Crown share of production. To reflect the value in time of qualifying expenditures, they will be escalated at the rate of 15 per cent annually up to the end of 1980. We shall then pay 250 per cent of this escalated value of eligible expenditures as a first claim on the commercial production attributable to the Crown share. This factor of 250 per cent will ensure that these payments will retain a real dollar value in relation to the past expenditures covered, even if commercial production does not arise until the latter part of this decade.
The provisions for exploration and development on the Canada lands are fair to all interests; but as I mentioned earlier, one emphasis of our program is to reduce foreign holdings in our oil and gas industry to 50 per cent by 1990. This would still leave half of our country's most important
October 27, 1981

resource under foreign control, much more than would be tolerated in other industrialized countries.
It has been asserted that the recent takeovers by Canadians of foreign-controlled subsidiary companies have somehow been at fire sale prices caused by the National Energy Program. In fact, the biggest single takeover since the program was announced, the purchase of Eludson's Bay Oil and Gas from Conoco, was at a price that Conoco itself regarded as "fair and reasonable".
The bill, and the National Energy Program in general, have been developed to take into account the concerns of foreign investors as well as Canadians; but surely our friends must understand our resolve to attain one half share in our own oil and gas resources. We have heard voices in the United States which have apparently not been fully aware of the provisions of the National Energy Program and Bill C-48, and the legitimate concerns in the Canadian gas and oil sector. However, there have also been people in the United States who have grasped the essential element in our Canadianization program. For example, a Congressman from Florida recently noted in the House of Representatives that:
Attention on our (American) side is centred on Canada's new national energy policy .. . Moves by Canadian companies to take over American ones in this country have also caused a reaction here. I suggest that if we understand our own reaction to a handful of Canadian takeover efforts in the United States, we can also understand Canadian concerns when almost three quarters of Canada's energy industry is in foreign hands. In fact some 80 per cent of that foreign participation is American.
I want to note the fact that we have heard voices coming from the United States Congress which do grasp the essence of the Canadianization challenge in Canada. However, I want to conclude by quoting a Canadian. The president of the Trans-Canada PipeLines Company recently stated this in New York:
Americans think Canada's political motivation is hostility to the United States. No matter how much evidence there may appear to be to the contrary, this is a gross misreading of the country.


Mr. Deputy Speaker:: I regret to interrupt the parliamentary secretary but his time has expired. He may continue only with the unanimous consent of the House.


Some hon. Members:: Agreed.


Roy MacLaren: I thank the House for its indulgence, Mr. Speaker. The president of the TransCanada PipeLines went on to say:
Canada's economic policies are not anti-American, they are pro-Canadian. When the motivations are understood, they are eminently reasonable.
In conclusion, it seems clear to me and to all those who are on this side of the House that the Canadianization of the industry as outlined in the National Energy Program and Bill C-48 is both fair and reasonable for all concerned.


Mr. Harvie Andre (Calgary Centre):: Mr. Speaker, I rise in this debate to deal with a few points raised by other hon. members, in particular the Parliamentary Secretary to the Minister of Energy, Mines and Resources (Mr. MacLaren),
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the Parliamentary Secretary to the Minister of Finance (Mr. Evans) who spoke last Friday and those who spoke for the New Democratic Party.
First, I want to deal with this question of the 25 per cent confiscation of privately owned assets, which is part of Bill C-48 and part of the National Energy Program. The lead off spokesman for our party on this motion was the hon. member for Etobicoke Centre (Mr. Wilson). He outlined our position fairly thoroughly, and if anyone wants an accurate view of where we stand, he could read his speech. However, I do want to comment on some points made by the Parliamentary Secretary to the Minister of Energy, Mines and Resources. For example, he mentioned that this 25 per cent confiscation provision is justified because tax incentives were in place when the privately held companies initiated and continued their exploration programs. The assets acquired in Canada lands through the exploration funds spent in that area were supposedly in part paid for by the taxpayers of Canada. Therefore, the Crown was justified in coming along and taking 25 per cent without remuneration.
I cannot think of a more serious precedent for this country to establish than this. Specifically, if tax incentives are in place, this justifies future governments being able to seize part of the assets acquired as part of that tax incentive.
If that principle is accepted, then clearly anyone's registered retirement savings plan falls into that category. If you have a registered retirement savings plan, it was put in place as a result of a tax incentive. In other words, there was an incentive in the system for you to save money in the RRSP. If you invested that money and it is now worth something, based on the principle outlined by the Parliamentary Secretary to the Minister of Energy the government is perfectly justified in taking half of that asset. According to his principle, the taxpayers paid for half of it. That is the principle the parliamentary secretary outlined. It is an absolutely absurd notion. It is intolerable.
I have examined the situation in other parts of the world to see if there were a precedent anywhere in the democratic world where a democratically elected government had seized privately-owned assets, and I could not find an example anywhere. However, what I was able to find is something called "Political Risk Services", a consulting report prepared by Frost and Sullivan, Inc. in New York City. Frost and Sullivan assess the political risk of various countries around the world for the benefit of clients. It is a rather interesting list, alphabetically arranged. It assesses things such as the probability of a regime change, the probability of political turmoil, the probability of expropriation and the probability of repatriation restrictions. There is also a political risk summary.
The expropriation column is most interesting. For example, we find the probability for expropriation expressed in percentage figures is as follows: Algeria, 24 per cent; Argentina, which is not a democratic country, 15 per cent; Australia, 14 per cent; Austria, 10 per cent; Belgium, 10 per cent; Bolivia 18 per cent; Brazil, 20 per cent and Canada, 24 per cent. The probability of expropriation in Canada is exactly the same as

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that for Algeria. The list continues: Chile, 10 per cent; China, 23 per cent; Columbia, 10 per cent.
Then we find a country with a higher expropriation probability than Canada, namely, the Dominican Republic, which has a 34 per cent expropriation probability. Next comes Ecuador with an expropriation probability of 24 per cent, exactly the same as that of Canada; Egypt also has a 24 per cent risk. The probability of expropriation in El Salvador is higher than Canada. It is shown as 58 per cent. Then we find Finland has a 10 per cent risk and France a 22 per cent risk of expropriation. That is interesting. France has just elected a socialist government which is expropriating all of its banks. Canada, which supposedly has a democratic, free enterprise government-at least that is what is claimed-has a risk factor of 24 per cent. India has a 19 per cent risk and Indonesia a 22 per cent risk. Canada is considered a higher political risk in terms of expropriation than Indonesia and all these other countries.
I could go on and on. Without exception, if you look at democratic countries as opposed to totalitarian countries on the right or the left, Canada leads the list. I have talked to people associated with Frost and Sullivan but they were not able to give me an example from anywhere in the democratic world where a democratic government had expropriated privately held assets without remuneration.
The parliamentary secretary did say that as a result of representations the government had made some changes and provided for some compensation for expropriated assets. The compensation would be 250 per cent of the current investment, but paid for out of future earnings. Let me repeat that, paid for out of future earnings. That is a cute trick. Members of the New Democratic Party would say that 250 per cent is outrageous and that was an overpayment.


Ian Gardiner Waddell: Right on.


Harvie Andre: But to anyone who looks at those numbers, the present worth of that payment is, according to one estimate I read, 5 per cent to 7 per cent. That is 5 per cent to 7 per cent of the real value. Another estimate by a company reckons that it would be closer to 1 per cent or 2 per cent. No one says it is worth more than 6 per cent or 7 per cent. They say that at the very outside the present worth of that future payment is perhaps 6 per cent or 7 per cent. Therefore, they are no longer confiscating totally. They will give the holders of the assets a maximum of 7 per cent of what it is worth in today's dollars. That is theft. As I say, no other democratic country has engaged in that kind of activity, which is outright theft, without remuneration. I think it is disgusting. Perhaps more than anything else that is responsible for the outflow of capital from Canada.
A government that would confiscate privately-owned assets without payment obviously would not think twice about things like currency control or putting up the equivalent of Berlin walls to try to keep capital in Canada. Obviously the same mentality that can justify confiscation of privately-owned assets can justify a whole lot of activity. People who are
concerned about that are taking the opportunity to move their money out of the country. They have been doing it this year to the extent of $10 billion. If the minister of housing were really interested in people having to renew mortgages at such high rates, he would be clamouring with the minister of energy to stop this stupidity. After all, the minister of housing is carrying the political cost. Interest rates are 3 per cent or 4 per cent higher than they should be. People are having to pay that rate on their mortgages. The minister of housing is having to attend meetings in London and elsewhere, taking the abuse for that, abuse that more rightly belongs to the Minister of Energy, Mines and Resources (Mr. Lalonde), who put in place the policy that has caused these high interest rates. There cannot be any justification for that kind of confiscation.
The parliamentary secretary said that the Crown interest is not a free ride. The act says that they carry interest. Carried interest is jargon for free ride. That is legalese for free ride, and that is exactly what it means. It is a carried interest. In other words, you have an interest and you are carried by your partners. It is only when production starts that the government gets a working interest. PetroCan goes into a working interest. At that point in time anybody could take on the obligations and pay his share. At that point in time you have revenue coming in. At that point in time Harvie Andre with next to no assets could walk into the bank and borrow the hundreds of millions of dollars necessary to finance his share, because we would have guaranteed cash flow and would be going into production. The money is going to be there to service the debt and pay off the loan. For the parliamentary secretary to say that that represents the government paying its fair share, or PetroCan paying its fair share, is again an absurdity. It is not doing so, Mr. Speaker.
I also want to deal for a moment with the remarks of the Parliamentary Secretary to the Minister of Finance, when he denied in the House last Friday statements of fact by spokesmen of this party that money, equipment, personnel, rigs and everything else were leaving the country. He asked us to provide proof. Let me quote from his remarks. He quoted from an article in The Financial Post and then he said:
That does not sound to me as though the National Energy Program is driving small Canadian companies out of Canada. It sounds to me as if they are saying the NEP is a very good program, that it will lead to additional exploration and development, and that they can hardly wait to get their drills into the ground.
The Parliamentary Secretary to the Minister of Finance should know better than that, and I am sure he does. I am sure he must have blushed a little bit when he made those remarks. I should like to read to him a Canadian Press story of today's date by Steve Mertl, Denver, Colorado. He said in his article, which incidentally is part of a parcel of news clippings collected by the Department of Energy, Mines and Resources, so it is not something I made up:
About 50 U.S. subsidiaries of Canadian-based firms now have offices in Denver. They are here to exploit renewed interest in the potentially-rich Rocky Mountain formations and looking to prospects across the U.S.
October 27, 1981

In the same article in another paragraph he goes on to state:
Oil executives estimate that even under the new price regime the net return after taxes on conventional oil is four times higher in the U.S. than in Canada. And despite the high price accorded new oil from Canadian frontier reserves and enhanced recovery, the producer will receive less than in the U.S. because much of the increase in Canada goes to taxes and royalties.
Then the clipping quotes one Canadian who is now down there. It states:
"I find psychologically I've written off Canada" says Stan Jones, former director of the Canadian Association of Oilwell Drilling Contractors and now Vice-President of Trio Petro Inc. "I'm no longer angry."
That is sad; this Canadian who worked here says he has just written off Canada. He is no longer angry but he just left. He was tired of fighting and he just left. Let me bring a more illuminating fact to the attention of those opposite. This clipping goes on to state:
Perhaps the most ironic illustration of this lack of confidence is Lochiel Exploration Ltd., owned by Alberta Liberal Party Leader Nick Taylor.
Peter Kneeland, Lochiel's Secretary-Treasurer, and Sheldon Crewson, its Vice-President of Exploration, sat in on the conference. Crewson said the company is expanding its projected $10 million U.S. exploration budget, highlighting its Kansan drilling program. Lochiel, which has been here for more than a year, already has some production in Colorado.
Kneeland said Lochiel has been forced to cut back on its Canadian drilling. Not because it wants to, but because needed capital is nowhere to be found. It has fled to other investments or is waiting on the sidelines for better times.
Kneeland betrayed discomfort recalling his boss's initial support for the National Energy Program, but was quick to point out Taylor has attacked the Sept. 1 pricing agreement as a sellout of the industry and consumers.
Lochiel's presence in the U.S. is not hard to understand, says Jones.
When the NEP came out a year ago one of the few people in Canada who said it was a good thing was Nick Taylor, leader of Alberta's Liberal party. He was showing that he was more of a Liberal than he was honest. We now see that he said, for the benefit of his hopes or aspirations to join the Senate or some other body, "Yes, you are doing a good job"; but when it comes to his own oil company he says, "Fellows, you better go to Kansas or Colorado and drill there because there is no future for us in Canada". So he says one thing and does another.
We hear members opposite standing up and asking what we are talking about when we say oil companies are leaving. If they do not believe us I suggest they phone Nick Taylor. He is of their own stripe, the Alberta Liberal party leader. Phone Nick Taylor and ask him why Canadians are leaving to go to the U.S.
The final point I want to talk about is this matter of Canadianization and what it means. We have been accused, particularly by members of the NDP but also by members of the Liberal party, of somehow being against Canadian ownership, or of somehow not favouring Canadians having a larger position in the Canadian oil and gas industry. That is an absolute absurdity. In fact, I will personally put my record in this regard up against that of any member of this House of anybody who has spoken.
I was a charter member of the Calgary section of the Committee for an Independent Canada, now defunct. I joined, as a matter of fact, in indignation and outrage over what was
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then the law in Canada. The law in Canada in 1970 was that an American could drill a well in Canada on pre-tax dollars but Canadians could not. That was the law of this country and it had been the law for decades. It was an absurd law.
In 1947, which really was the birth of the current oil industry in Canada, the majority of the industry was Canadian owned. Through that period of activity during the 1940s and the early 1950s, particularly during the Korean war period, Americans were coming to Canada in great numbers to invest in the oil and gas industry. There was a particularly attractive tax regime in existence which was not available to Canadians. Canadians could not afford to compete with Americans for investments in Canada. That is what it amounted to.
James Gray, a well known Alberta-based author, talks about coming to Ottawa in the early 1950s and talking to the deputy minister of finance who was a personal friend. He asked what was happening with all these foreign-owned companies coming in and buying up all this development when Canadians could not compete. He said the deputy minister of finance said, "We don't give a damn who owns the industry as long as we can tax them". That is what happened as a result of that stupid policy, and that is all you can call it, and by 1975 the industry was foreign owned to the extent of more than 90 per cent.
After I was first elected in 1972, for the next four years this was a project I had in mind and I never lost an opportunity to speak in the House or to lobby ministers about this law. I see the hon. member for Sarnia (Mr. Cullen) sitting opposite. He will recall my lobbying when he was minister of national revenue. I remember lobbying the Hon. Donald Macdonald when he was minister of energy, mines and resources. I remember him saying in exasperation one day, "I agree with you but I am not the minister of finance and I cannot do anything about it". To his credit, when he became the minister of finance he changed the law in his first budget. He removed the principal business test.
What happened in the next five years was that the industry changed from over 90 per cent foreign owned to 70 per cent foreign owned with increased Canadianization. There was a huge increase in Canadian content in that period of time. This was not the result of the establishment of Petro-Canada and not the result of government intervention, but the result of adopting a set of laws which said that Canadians could compete on par. That is what is so phony about this current program. The government claims it invented Canadianization. That is absurd and the record is there. Give Canadians a fair shake to compete at par and they will in fact take up their rightful position as the movers, shakers and doers of this industry.
This is what they were doing until the NEP came along, and now they have all gone south, all in the name of this new discovery or invention "Canadianization". This is an absolutely phony and false declaration of what this government's policy really is. Its policy is to take more control for the bureaucrats, for government, rather than having individual Canadians being the owners, participants, actors and drivers in this industry.
12240

October 27, 1981
Canada Oil and Gas Act


Ian Gardiner Waddell: Mr. Speaker, when I hear the hon. member for Calgary Centre (Mr. Andre), I think of the generals who are preparing to fight their last war. I cannot understand why he gave another 20-minute speech against the National Energy Program when the Premier of Alberta, Mr. Lougheed, has accepted the program in his deal with Ottawa.
Let us deal with reality and with this bill. I am glad to learn the hon. member was a member of the Committee for an Independent Canada, like many of us in this House. But I thought he was a pimp for the oil industry when I listened to some of his speeches.
I should say to the hon. member for Etobicoke North (Mr. MacLaren), whom I see laughing over there, that when he referred to Etobicoke, that great municipality in the west end of Toronto, he reminded me of the time I lived there as a boy. Etobicoke for many years had a reeve named Ozzie Waffle. When I listened to the hon. member for Etobicoke North, he reminded me of the nickname we had for Ozzie Waffle. We used to call him "Woozie Awful". I thank the hon. member for bringing back those memories.


Mr. Regan:: It is a sign of old age to reminisce.


Ian Gardiner Waddell: The hon. minister of whatever he was demoted to over there says it is a sign of old age. He should know.
The Chair ruled that Motions Nos. 21 and 22 were to be debated together, which is a good idea. The Chair also ruled that when Motion No. 21 is disposed of, this would dispose of Motion No. 22. I would ask the Chair to look at that ruling further. The motions are quite different. Motion No. 21 in the name of the hon. member for Etobicoke Centre (Mr. Wilson) deals with the Canadian ownership rate and with bringing more private enterprise into the measure. My motion, Motion No. 22, would have the opposite effect. It deals with giving Petro-Canada 50 per cent backing. In this bill, the government has suggested a 25 per cent interest for Petro-Canada. it is quite clear there are three points of view on this issue. Perhaps the Chair would consider this further. I submit that the votes on Motions Nos. 21 and 22 should be separated. I ask that the Chair reserve judgment on that.
I now wish to speak to Motion No. 22. I saw the hon. member for Athabasca (Mr. Shields) in the House earlier. I met him this summer in Fairmont Hot Springs, a beautiful spot. The beauty has not changed in the last 30 or 50 years. I said to him, "Isn't this a wonderful place?" He agreed with me and asked, "Could you ever develop it?"
Let us look at what we are doing in development. I do not understand the reasoning of other hon. members who have spoken on this motion, including the hon. member for Athabasca. When more than 90 per cent of every exploration dollar has been covered by the taxpayer, how can they say a 25 per cent Crown share is expropriation without compensation? We have to remember who the original owners of this oil and gas are. The hon. member for Calgary Centre asked for a list
of countries which had taken over property. As far as Canada is concerned, surely that property was ours in the first place. It is not theft or confiscation. We own 100 per cent of that oil and gas. I will prove later on that through amendments the government has brought in, the companies are going to be more than adequately compensated.
I heard the argument that we were changing the rules in the middle of the game. When the government introduced the superdepletion allowance, where were my friends to the right? Did they get up and accuse the government of changing the rules in the middle of the game? Not likely. When the budget comes down next week and changes the taxation of some of our constituents, are my friends to my right going to get up and say this is changing the rules in the middle of the game? It is an absurd argument because it is our game and our oil and gas. Perhaps that is Tory logic.
The government has already backed down in dealing with Section 27 of the act. I draw your attention to the remarks of the minister in committee on January 20, 1981. He made all the arguments I have just made. He said in that committee, as reported at page 16-7:
What, then, could anybody mean by terming this a "free ride"? Obviously the Canadian taxpayer is simply getting value for his tax money being used to finance and support oil and gas activities in the frontier regions.
He goes on to talk about the money Canadian taxpayers are contributing to exploration and development. He goes on to talk about the absurd argument about changing the rules in the middle of the game. Yet the minister, in response to the howling of the oil industry and their friends to my right, made changes in the act.
I quote from an article in The Globe and Mail dated May 15, 1981, an article by Jennifer Lewington. It states:
Energy Minister Marc Lalonde has announced a number of limited modifications to the federal government's proposed oil and gas legislation, including compensation for past exploration costs associated with the Crown's retroactive 25 per cent stake in oil and gas rights held by companies. The concession means that the government will make payments in respect of 25 per cent of qualified exploration expenses on an oil and gas discovery resulting from a well started before December 31, 1980, and which is declared a significant discovery before December 31, 1982.
Previously the government offered only to pay its share of costs once the 25 per cent Crown 'carried interest' was converted to a 'working interest', prior to a production licence being issued to industry.
The compensation, based on a formula, will be paid out of the Crown's share of future production.
The formula allows for those expenses incurred up to December 31, 1980 to be escalated at a rate of 15 per cent a year. The government then pays 250 per cent of the escalated value of the eligible expenditures as first claim on the commercial production coming from the 25 per cent Crown share.
Well, Mr. Speaker, the government already knuckled under on this matter. I do not know what my friends to the right are screaming about. What has happened is that in the past we paid 90-cent dollars to finance this exploration, and in the future we will pay 250 per cent. The hon. member for Calgary Centre said I would no doubt raise that point. Well, I am raising that point. It is quite clear that the government is going back and compensating the industry, and so we have to pay twice.
October 27, 1981

Before I sit down I wish to say something about the dangers of cutting back and the pattern emerging from this bill and its amendments. The government is slowly going back and gutting this bill. The whole intent of this bill can be gutted by changing the Canadian ownership rate. The crux of the bill is that 50 per cent Canadian ownership must be there before there is production in Canada lands. Canadian ownership is not defined in the bill. In the definition section of the bill it is merely stated that a definition is to come in this act or any future act. But it will be defined in the energy security act, an omnibus bill awaiting debate.
We are seeing pressure being exerted by the U.S. and by the Conservative party, as well as by the oil industry, to change the bill. The government is slowly backing down. I predict that it will back down on the Canadian ownership rate. The other day I demonstrated that Canadian ownership does not mean much without Canadian control. I predict that when they define the Canadian ownership rate, the government will bow down to pressure from the U.S. and from the industry. That has been the pattern.
Here are some of the concessions:
Extension of the life of an exploration agreement to eight years from five-
Extension of the exploration agreement, if drilling is under way on one or more of the wells required to fulfil the pact; a recognition that difficult conditions may prevent drilling of a well in the year it is started.
Allowing for exploration agreements, even where drilling moratoriums exist, with the permit holder not allowed to be active until the ban ends.
Sourcing of Canadian goods, services and labour was changed. Here is another back-down:
The cut-off date for "pioneer production," covering production not affected by this bill, is moved to December 31, 1980, from January 1, 1976-
We will speak about this on the next motion. Here is another back-down:
Deduction of the 8 per cent petroleum and gas revenue tax-
It is now 12 per cent.
-from the profit-sensitive progressive incremental royalty in recognition that the tax is a legitimate expense.
In other words, more tax deductions. Another back-down:
Widening the scope of three-year holiday from progressive incremental royalty to include fields where the discovery of oil or gas is the result of a well started before December 31, 1980, and qualifies as a significant discovery prior to December 31, 1982.
There are more motions to be debated here. There are a number of back-downs in this bill. What we are advocating in Motion No. 22 is that we go up, that we look at the regimes in the rest of the world. The hon. member for Kamloops-Shus-wap (Mr. Riis) set this out in great detail. Australia has a tougher regime than Canada, as does Norway, Great Britain and Mexico.
We say that if you are going to give the company 93 cents on every dollar, you should not get a 25 per cent Petro-Canada back-in that is qualified. You should get a 50 per cent Petro-Canada back-in right away. Is that too much to ask if you are going to put in that much equity? Ask my good friend who will
Canada Oil and Gas Act
speak next, the good capitalist, whether he would want a 25 per cent return, if he put in 93 cents on a dollar I do not think so. He would want more.
The Government of Canada is entitled to get more from this if it puts in a 93-cent tax dollar. This is the biggest rip-off you can think of, the biggest giveaway in concessions.
Talk about welfare and welfare grants. Look at the welfare we give Dome Petroleum, which has not produced a barrel of oil. The leader of our party in Manitoba, Howard Pawley, who will be the next premier of Manitoba, suggested that $20 million be put into a Manitoba oil company. Lyon and the boys yelled that this would be enough only to drill dry holes. However, when Bill Davis buys 25 per cent of Suncor, something we suggested all along, it is great.


Donald Alex Blenkarn: What's good about it?


Ian Gardiner Waddell: Let the hon. member address that when he speaks. He can tell me how bad that is. Canadians are not stupid. They realize that if they are going to put in 93 cents on a dollar for drilling they should get a fair return. Canadians know that the government is going to spend $4 billion in these PIP, Petroleum Incentive Program, grants. Talk about welfare, $4 billion in grants going to the richest industry in the country!
My friends moan, groan, bleed and suffer for these poor oil companies, the richest group in the country. They make money hand-over-fist. It is the U.S. oil companies that are pressing President Reagan to have bad relations with Canada. When the Americans realize that, the tune will change.
My friend need not look smug, because he is way behind the Canadian public. He should have thought about that when they put up the Petro-Canada sign. Canadians want a few more Petro-Canada signs. The people in this country are way ahead of the politicians. They want Canadianization to mean, basically and fundamentally, public ownership. The way to do that is not by backing out and giving 25 per cent to Petro-Canada. I ask members opposite, where are your guts? Why not support this amendment and allow Petro-Canada to have a 50 per cent back-in? We could then have a regime right up there with Norway, Great Britain and some of the other industrialized countries.


Donald Alex Blenkarn: Mr. Speaker, the hon. member for Vancouver-Kingsway (Mr. Waddell) really indicates to this House and the people of Canada how out to lunch he is. He points out the validity of national oil companies, points out the wonders of Norway, and I suppose he could point out the wonders of the Soviet Union. He can also point out the wonders of Mexico with its national oil company, big oil spills and inefficient operation. That company could not even deliver the 50,000 barrels a day it promised a year ago because it is so inefficient. That is what he would have us become; owned, controlled and run by the state.


Ian Gardiner Waddell: For the state.


Donald Alex Blenkarn: He says for the state. I say it is for the bureaucrats in Ottawa to run, the socialists to run and control.

October 27, 1981
Canada Oil and Gas Act
That is what is wrong with this bill and the attitude of this government. That is the problem we have throughout the economy of Canada.
The hon. member talked about Dome Petroleum and said they were making piles of money. Their stocks only dropped from $25 to $15. An article in the paper this week indicated that, unless they were lucky enough to make a worth-while find in the Beaufort Sea, perhaps their stocks will fall totally out of bed and they will have a serious financial problem on their funded debt.
What we get from the New Democratic Party is the usual drivel. I thought the hon. member for Vancouver-Kingsway took his responsibilities as energy critic for that party seriously. He clearly wants to emphasize their socialist, neo-Communist perhaps, approach to things.


Ian Gardiner Waddell: No, no.


Donald Alex Blenkarn: He says it is not neo-Communist. State ownership controls production and distribution, the hell with individual controls. He says, "Don't let individual Canadians own it; make sure that ownership is in the hands of the bureaucrats." That is what he talks about. That is their policy. That is why the people in Vancouver will tell them what they think in the next go-around. The NDP motion is ridiculous. It is the major reason for our high interest policy, for our unemployment problems, for the flight of capital from this country, for the economic conditions that make things hard on people in Canada. It is this attitude, expressed by the government, egged on by the New Democratic Party, that is a cause of most of the economic problems we face here.
Let us deal with this bill. My friend related the arrangement in connection with Alberta lands; between Alberta and the Government of Canada, and said that Premier Lougheed endorsed this bill. If Premier Lougheed endorsed the bill, I suppose what he was really saying was, "By golly, you'll frighten everybody out of frontier exploration. At least whatever exploration there might be will take place on Alberta Crown lands, not on federal Crown lands".
This bill is dangerous in many ways. What it says is that should someone who has tendered and purchased drilling rights on Government of Canada Crown lands at auction, find something, they will lose a quarter. Sure, they get the money they put into it, the 250 per cent on capital investment as explained by the hon. member for Calgary Centre (Mr. Andre), but in effect they lose the deal. For example, they explore in a frontier area. They use their money. They buy their rights, and they agree to pay royalties. Then, all of a sudden, the government takes away a quarter of the deal. It takes it away without providing any compensation.
A suggestion was made by hon. members in the New Democratic Party that oil companies develop with the people's money. They ask, "What about all these grants we are giving them? What about all these tax allowances we are giving them?" First of all, I have not heard anyone from the oil
industry say that the grants were a wonderful idea; it is the idea of the socialists. More important, they do not realize the enormous risk of frontier exploration. When they talk about the enormous profits of Dome, they do not realize that that company has yet to pump a drop of oil from the Beaufort Sea. Dome has used all its earnings from its interests, from this production in Alberta, all the money it can borrow and all the money it can get in one tax arrangement or another from investors, to pump into the north, and it has not yet been able to get a drop of oil out.


An hon. Member:: How to get rich without producing anything.


Donald Alex Blenkarn: The hon. member says, "How to get rich-" I say to him, if it were such a good buy, then the hon. member from the New Democratic Party would surely have bought some Dome stock with that marvellous increase in salary members have received. Had he done so, he would have suffered the same financial losses that Dome stock investors have suffered.


An hon. Member:: Too bad.


Donald Alex Blenkarn: He said, "too bad". That is their attitude toward Canada. He says, "Too bad about Canada, too bad about investment. We, like the bureaucrats, want to control things. We want to run things. We are the people who can make it go." The record speaks for itself. People cannot get food in Poland and we have to ship boatload after boatload of grain to Soviet Russia. The record speaks for itself. Their attitude is that Big Brother knows best. Maybe these little boyfriends of Big Brother will wake up one of these days.
Let us see what has happened. This bill, which allows the government to back in for 25 per cent of the action, basically for free, has caused us serious problems in the international field, in the money markets of the world. Six nations with OECD, namely, West Germany, The Netherlands, the United States, Belgium, France, and Great Britain, have all protested our handling of their foreign national companies which were invited to Canada to work. Those companies thought they knew the rules of our energy policy. It is the uncertainty of the present policy that creates difficulties. They believe that at one time they could trust Canada but that now they cannot trust us because their assets may be expropriated, seized, without compensation. This concerns them about Canada as a place to invest.
Whether or not that fear is justified, it is there. That is why this year alone over $10 billion in capital has fled Canada. I emphasize the words, "fled Canada". That is why our dollar has shrunk, and that is why we have to have an interest rate factor 4 per cent higher than the prevailing one in the United States to try to protect runs on our currency. People who look at the attitude of the government, such as that expressed by the parliamentary secretary, the hon. member for Etobicoke North (Mr. MacLaren), take their money out of Canada and place it elsewhere, where they perceive there is less risk.
October 27, 1981

It is that very business attitude that we are really talking about in Motion No. 21. We do not object to Canadianization and we think that Canada lands should be developed by companies that are 50 per cent Canadian owned or controlled. But there should be no back-in arrangements, there should be no change in the deal, and there should be no expropriation without compensation. We must not confuse the concept of Canadian ownership with outright nationalization. We half own Canada. This clause of the bill proposes to nationalize in an improper fashion. It seizes, it expropriates without compensation, an asset built up by an explorer. Oil companies are used to paying royalties and are used to paying corporate tax. That is the proper role of government. Pay the necessary requirements of operating a state by taxation. But this is not taxation; this is seizure of assets without compensation. That is not the way it should be done. Seizing someone's asset to pay for whatever it is, is the wrong way to go about it.
May I call it six o'clock, Mr. Speaker?
Mir. Deputy Speaker: It being six o'clock, I do now leave the chair until eight o'clock this evening.
At 6 p.m. the House took recess.


[Stage Direction]
AFTER RECESS

The House resumed at 8 p.m.
The Acting Speaker (Mr. Blaker):: Order, please. When the House rose at six o'clock the hon. member for Mississauga South (Mr. Blenkarn) had the floor.


Donald Alex Blenkarn: Mr. Speaker, when we rose for dinner I was speaking about the effect of the national energy policy on this particular clause and the amendments before us. At this point I want to make it absolutely clear that my party believes fervently in Canadian ownership of the resources and of the businesses of Canada. We are prepared to work with any sensible program which will achieve that end. But the program which is the subject of Motion No. 21, particularly that which refers to Clause 27 of the bill, is a proposal not for Canadian ownership but for nationalization. This particular program has cost my constituents-and I do not know about the constituents of Mr. Speaker-a great deal of money, hardship and fear. The program has resulted in a devaluation of the Canadian dollar and in runs on the Canadian dollar. It has resulted in the high interest rate policy of the government. It is part and parcel of the fact that home owners must pay 20 per cent on their mortgages. It is part of the problem which every farmer in the country faces when he wants to borrow money to buy some cattle. It is part of the problem faced by every small-business man. Many hon. members of the House were small-business men before they were elected to Parliament. They know, as I know, that there are very few businesses which are able to show on their balance sheets earnings of 20 per cent or better year after year. The high interest rate policy caused by such provisions such as Clause 27 of the bill has resulted in
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fear and a flood of capital leaving Canada. This is what small-business men are paying for. What are they receiving for this?
Is there exploration activity under the terms of the bill, when conceivably the government can back into a 25-per cent interest in an oil or gas development? One can only back into something if there is something to back into. The effect of this legislation is to discourage and to impair development. It has already resulted in the flight of capital from Canada, not capital flowing into Canada to explore, create and develop in the north. This flight of capital is shown in the unwillingness or inability of Imperial Oil to complete the Cold Lake project and in the unwillingness or inability of Alsands to put together its tar sands project in Alberta, despite the energy agreement with that province.
There has been a flight of capital from Canada because capital will not be invested in a country where there is a possibility-and indeed under this bill the certainty exists- that the government will take 25 per cent of any find, virtually without compensation. That is exactly what is stupid about it. I say to the parliamentary secretry that the 25 per cent Crown right is only worth something if there is something there to make it worth it. As Canadians, we now own 100 per cent of all the oil and gas under the ground, under the sea, in the Canada lands, or wherever. What will we do about it? It is not doing us any good in terms of the gas pumps, the petrochemical industries or exports, because it is not available to be pumped, burned, used, consumed or sold. A 25 per cent interest in that is equally useless unless it is developed.
In a sense, this clause of the bill goes to the heart of the National Energy Program. It discourages development, initiative and exploration because it seizes from those who would explore and develop a quarter of what they create. What we have today is worth nothing. It is under the tundra. It is only worth something if people will go in there and drill in the snowbanks and marshlands, or build islands in the Beaufort Sea. Unless that is done, what may be under the soil is worthless.
No other government in the world says that it will seize 25 per cent of what people create. Other governments operate in a sensible fashion by taking a royalty, or maybe a percentage of profit royalty, and there is nothing wrong with that. They may want acreage payments for the right to drill, create or explore on that land. That is their approach. They have a corporate tax. The approach of this government is to seize the asset itself, take away the incentive to create, and then expect creation to take place.
The socialist approach will not work, Mr. Speaker. The approach of this government is not working. The danger and the problem with this approach is evidenced by the number of oil drilling rigs that have already left the country. It is evident in the state of our dollar, in interest rates. While there has been a great deal of Canadianization over the year, that has been accomplished by buying out properties owned by foreigners, not by the creation of new wealth.

October 27, 1981
Canada Oil and Gas Act
In the years leading up to the introduction of the National Energy Program, we Canadianized the oil industry and we reduced foreign ownership from 90 per cent to 70 per cent by creating new business and new wealth in Canada, owned by Canadians. The Canadianization that has been taking place as the result of the national energy policy has been to buy up foreigners. Instead of using Canadian money to do what we were doing-and very successfully-in the decade prior to the national energy policy, by creating new energy resources in Canada owned by Canadians, we have driven out the foreign money; and so caused a problem with respect to interest rates for all of Canada; an exchange rates problem, a balance of payments problem, and we have caused trouble with our OECD partners in terms of trust in Canada as a place in which to invest. The NEP has not caused the creation of one drop of new oil. That is really the problem.
This national energy policy is not helping to build Canada. It is not helping to create opportunities for individual Canadians, whether it is to own their own home or have their own business or have a private stake in this land of opportunity. What we have done is to squash them down with an attitude that the state knows best, that Big Brother is superior and Big Brother has the right to take away part of what they create, without giving them compensation.


Some hon. Members:: Hear, hear!


Mr. Stan Schellenberger (Wetaskiwin):: Mr. Speaker, I have listened to the debate on Bill C-48 for some time, both in the House and in committee, and have heard various groups and associations discuss the broad principles of the bill which will take us forward in the Canada lands. I am certain that all members of the House recognize the importance of the bill and the long-lasting effects it will have. As I listened to the debate on the motion before us, it seemed to me that many of us may have forgotten that our basic goals are the same. That discovery may take us by surprise but if we look at what we all want, we will find that it is the same thing-more Canadian control of the oil and gas industry, more efficient development of those resources, resulting in self-sufficiency by 1990, or maybe before or after. We want a healthy oil and gas industry with the benefits it will bring to the Canadian economy and we want to reduce inflation and to see more employment. All of these spin-offs can come from a vibrant oil and gas industry.
I do not think any of these objectives are controversial or any of those priorities different. Perhaps the basic problem is that our philosophies are fundamentally different. I do not think we should lose sight of two things of very grave importance in this legislation, the fact that our goals are compatible and could be more compatible if the government had accepted more of the amendments put forward by all sides.
In Bill C-48 the government has presented its blueprint for resource development in Canada lands. We in the Conservative Party are saying, "Wait a moment." With this motion we are saying there is another way of accomplishing Canadianization than that proposed in the bill. That is our philosophy, if
you will; we believe it will work better in the long run than the approach outlined in Bill C-48.
We believe that the private sector can do a better job of resource and development than the government can. In good faith, I ask members of all parties to consider that Motion No. 21 could accomplish, far more quickly than anything else in this bill, self-sufficiency and the resource development we need in northern Canada.
Let us step back from the specifics of the motion for a moment. I spoke about goals and said that our goals are compatible but that the means of achieving them were different. I asked members to consider how they set their own goals and their own priorities; how they go about reaching those goals.
I believe that when the individual is motivated from within himself to do something that will fulfil him personally, he is far more likely to drive for excellence than if he is told by someone else how to reach his goals, how he must act if he is to do it for someone else. When a person sets his own goals and develops his own strategy for attaining them, then he has all the motivation he needs to do a fine job. If someone else seeks to define his goals and tells him how to achieve them, he will soon find his initiative sapped, and his drive greatly reduced. I think that is one way to define personal fulfilment, that it is the end result of goal setting and goal achievement.
If one takes away an individual's ability to decide upon and to work toward his own goals, one robs him of that end fulfilment. By denying a person his drive, I believe that one encourages mediocrity. I always remember that when I was in school I hated to get involved in group projects. The reason was that no matter how hard one worked by oneself, when the project was completed, everyone received the same grade. It did not matter how much one was motivated or how hard one worked, when the end result came in, it was the same for everyone. I noticed this throughout my school years.
What happened as a result? Soon group projects were not done very well. The people in the lower grades who were initially motivated and who worked hard soon found that there was no benefit coming to them in participating in group projects, and as a result they slacked off. They stopped working as hard and soon lost that motivation which was so necessary to achieve good grades and a good education in school. I had often hoped that teachers would not organize group projects as often as they did, unless it was a type project that was fun rather than one that was meant to teach students, such as a math project.
If goal achievement is what spurs people on, it does not make any sense to say that society would be better off or better served by having government tell us how to attain our goals or how to reach achievement for this country. It saps initiative, promotes mediocrity, weakens drive, and eventually lowers us all to the same common low denominator. That is why I rejected the socialist philosophy at a very young age.
October 27, 1981

The well motivated individual will strive for excellence and perfection. He will use the resources within himself and his intelligence to move ahead. I have always believed that if the government adopted the same principle in this country and put some belief in the intelligence and initiative of the individual, we would move ahead and achieve our goals much faster, than if government decided what these goals will be and forced them upon our people.
A wise man said, and I believe it to be true, that an individual who does not care who gets the credit cannot accomplish anything. It is for these reasons that I and my colleagues on this side of the House feel so strongly about the value of the individual and his initiative being manifest in the private sector, and that is why we maintain that the goal of Canadianization can be achieved through the private sector, which would be much better for this country, rather than through the public sector, the way we seem to be moving now.


Some hon. Members:: Hear, hear!


Stanley Kenneth Schellenberger: Motion No. 21 says, "Yes, We want Canadian ownership." As does every hon. member of this House, we believe that Canadianization will be most effectively and efficiently achieved by promoting individual initiative in the private sector, and not by stifling it through the public sector.
There is a popular misconception that by increasing government ownership, somehow we become more Canadian than if we increased that ownership through the private sector, through private ownership. I say that this is absolutely false, and some of my colleagues demonstrated that by reducing foreign ownership from 90 per cent to 70 per cent in a very few years, before the National Energy Program was brought in.
In my opinion, Canadianization must be done through private individuals. We should be moving toward Canadianization by encouraging people to buy shares and be part of the company. Why do we not understand that principle? I myself did not understand it when I was going through school. We are not taught economics and the principles of the free enterprise system unless we go to university specifically for that purpose. Most people do not understand how the free enterprise system works, how companies work; what profits are. They do not understand how they can accomplish goals that we set in this country; what shares are all about, how one goes about buying them, what they can do for us in our work, and how they can lead toward a decision-making process in a company. They do not understand an individual, by owning a sufficient part of that company-and one does not need to own 51 per cent of it-can lead a company in the direction he wants it to go. Most Canadians do not understand that.
That is why I supported so strongly the transfer of Petro-Canada shares into the hands of millions of Canadian individuals. I fully believe that an individual who received that share would take greater interest in the energy production of this country. He would take some interest in that company, he would feel part of it, and he would encourage it to go forward and achieve its goals.
Canada Oil and Gas Act
We have many examples of people who made that work. Surprisingly, most of them are in Alberta. I remember very well the time when the Social Credit government offered shares in the Alberta Gas Trunk Line, which is now the Nova Corporation, first to individual citizens of the province, and after the people of the province had taken all the shares they wanted, other people in Canada could participate.
The morning that that share issue was offered, people were lined up outside the treasury branches to pick off the shares. I know that the hon. member for Bow River (Mr. Taylor) remembers that much better than I do, because he was a part of that company. Recently, the Alberta Energy Corporation offered shares in that company to Canadians. Many members of my family, who had never before bought a share in their lives, went out and bought shares in that company.
Carl Becker said, and I cannot say it any better:
The primary aim of all government regulation of economic life of the community should be, not to support the system of private economic enterprise, but to make it work.


Some hon. Members:: Hear, hear!


Stanley Kenneth Schellenberger: What we seem to have forgotten in this nation in the last decade is how to set the rules which will make the private enterprise system work.


Some hon. Members:: Hear, hear!


Stanley Kenneth Schellenberger: This is the basic philosophy for which this party stands. It was manifested in two measures which we attempted to introduce in the budget when we were the government. It was the first budget that was long on private initiative and incentives to private individuals. Farmers who sold their farms could invest $100,000 in RRSPs and use the RRSPs to invest in Canadian corporations so that the money would be productive and would not be put in the government treasuries to be frittered away, as it now seems to be so often. The second measure was an incentive to individuals to buy Canadian shares. If they did that and kept the shares for a certain number of years, they would have capital gains forgiveness. That was another incentive to encourage Canadians to take their money out of their socks, or wherever it was, and invest it in Canadian enterprise, and get the feel for it. Once having done that, individuals were surprised at how encouraged they felt to be actively participating in something. Many people in this nation have never had that feeling. As I said before, the second initiative related to getting shares of a large oil company which Canadians owned into the hands of individuals so that, again, they could learn more about the enterprise system.


Some hon. Members:: Hear, hear!


Stanley Kenneth Schellenberger: During the last few minutes I have, I would like to speak about another part of Motion No. 21 which I believe is so important; that is, the back-in provision. But I will be less proud of it when this bill is passed than I was before. Canada was held in high esteem by the world as a safe country in which to invest, a safe place in which to put your

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Canada Oil and Gas Act
capital for interest and investment. However, when a provision such as this is placed in a bill whereby one can retroactively back into an oil play, I believe that we will no longer be able to claim the esteem that we had before. Even if a certain amount, under the back-in provision, is paid back as described in the bill, the government has forgotten that there is much more to it than a basic payment under that back-in provision. I liken it to the situation when somebody expropriates your land in order to build a highway. You have a house on this land, but the land is expropriated. You are not paid anything for the trees that you have planted, the lawn that you have cultivated, or the many improvements you have made to the house before expropriation. Somehow there is a belief that everything goes along with the land. This same principle is placed in this bill. That is why the retroactivity, no matter how it is put together, is basically a confiscation and not the kind of legislation that will retain trust in this nation. I cannot say it any better than have some of my colleagues when they talked about the devastating effect this program was having on our economy. It is counterproductive. On the one hand we have high interest rates in order to attract capital into the country to assist our Canadian dollar. On the other hand, we have a policy which discourages and chases capital out of Canada. We also have a government that is using billions of dollars of taxpayers' money and encouraging Canadian companies to buy foreign controlled companies. That sort of thing does not bring us any more oil. It only chases capital out of the country.
Those are some of the reasons why I feel so strongly about this amendment. It is an option that should be seriously considered by members of this House. It is an option of basic philosophy about the way we forge ahead and govern this country in the future. I am surprised, not at the New Democratic Party because I can understand them, but at the fact that the Liberal Party would accept this kind of clause in a bill without amendment as a blueprint for the future of our country and the way to establish our goals for the enterprise that will go on in the future.


Mr. Bill McKnight (Kindersley-Lloydminster):: Mr. Speaker, I take pleasure in having the opportunity to say a few words on the amendment contained in Motion No. 21 in the name of the hon. member for Etobicoke Centre (Mr. Wilson). It is not something new to our party to find ourselves defending rights and freedoms time and time again. This time we find ourselves defending the principle of fairness that I thought all Canadians believed in, whether they are Liberals or whether they are New Democrats. Canadians are known throughout the world as being fair-minded, tough, strong and energetic people. But when we see a government expressing less than fairness in its motions and bills, it is incumbent upon all Canadians to object, not just Canadians on this side of the House, but also those who sit on the government benches whom I know to be fair-minded men and women. They represent Canadians in constituencies across Canada who are fair-minded and have elected fair-minded people.
The hon. member for Etobicoke Centre moved that Clause 27 be amended by striking out lines 36 to 42 at page 15 and lines 1 and 2 on page 16 in Bill C-48 and that the following be substituted:
"(2) Her Majesty in right of Canada is hereby vested with and the minister on her behalf shall hold a share sufficient to render the interest holder with a Canadian ownership rate of fifty percent".
We have absolutely no disagreement that Canadians should own 50 per cent of their energy resources. I would have no disagreement if a statement were made by the government that Canadians should own 100 per cent of their resources. But I do not think any Canadian would say that he or she wanted to confiscate from someone in good faith and in good conscience that which they have developed.
We can look at the ability of our people who have worked and sweated for the last 114 years, using their initiative because they had the will, the strength and the belief that this country is one of the best countries in the world. I do not think anyone in this House would dispute that. Fifty per cent ownership is a great goal. One hundred per cent ownership is a better goal. But confiscation and allowing the government to back in to lands that have been developed, surveyed and seismographed, and lands in which hundreds of millions of dollars have been invested searching for oil that ended up being dry holes is not fair-minded. These companies that have invested money in dry holes are companies owned by Canadians. Many Canadians have shares in American-owned companies. Therefore, why penalize Canadians who are trying to Canadianize the oil industry? I ask the government, why does it want people who have invested their savings in an American company to suffer because the government says it is the right of this government to have 25 per cent of it?
I want to comment briefly about Petro-Canada. I understand that a PetroCan station opened up over the weekend. There was a service station in the same location before. The sign may have changed now. Although there was a Petrofina station there, people were selling gas and making a livelihood out of operating the station. It was not Petro-Canada who gave them that right. They had their livelihood before. What the government did was to buy an existing gas station. Petro-Canada, since its inception, has not found any more oil than some of the very junior oil companies in Saskatchewan. All that it has done is to use taxpayers' funds to purchase something that already exists. We find that with this amendment the government will not even have to use taxpayers' funds to make a purchase. It will back-in and confiscate something that did not belong to it. The government did not pay for it in the first place.


An hon. Member:: Why are you buying time?


William Hunter (Bill) McKnight: I hear some noise from the left rump of the party over there.


An hon. Member:: The little red rump.
October 27, 1981


William Hunter (Bill) McKnight: I have some comments that many members of the NDP understand. I am referring to the co-op movement.
I come from the province of Saskatchewan. I am proud of the co-op movement in my province. But what is wrong with the co-op movement is that people have decided it is associated with the New Democratic Party. That is what is wrong with it. It is not right. I see one of my colleagues from Ontario on the other side. In Ontario the co-op is a strong movement, but it is not associated with the New Democratic Party there.


Ian Gardiner Waddell: Yes, it is.


William Hunter (Bill) McKnight: We had the ability to form a Canadian co-op, as was proposed in the budget presented by the hon. member for St. John's West (Mr. Crosbie). He offered to the people of Canada the opportunity to buy shares in Petro-Canada. We said that we would help people buy shares in a company, that it would be a co-op and the people of Canada would own it. However, members of the New Democratic Party voted against that.
The only thing that is different between a co-op and a company such as we have now is that you and I as shareholders cannot sit on the board of directors and we cannot control the minister who is responsible for Petro-Canada, the Minister of Energy, Mines and Resources (Mr. Lalonde) in this House. We cannot control an administration that says it is going to provide a window for the world on our oil industry, and administration that states that it is going to create rules and instil faith in our country so the people will invest, and be the referee as well. The government says it is going to be fair. Mind you, it is going to steal 25 per cent of what the companies already have, but on top of that, the government has an adviser to the referee, namely, the minister, a player from PetroCan. Anyone who is familiar with any kind of refereeing or sports knows you cannot play and referee at the same time. That is what this government is doing with Mr. Phelps.
Having regard to the 25 per cent back-in, this may have been as a result of advice given by the PetroCan employee who advises the minister. It is no wonder that corporations involved in the energy field become just a little reluctant to share information with the government. PetroCan, now one of their largest competitors, has an employee sitting beside the minister who is making up the rules for playing the game. This is incredible.
The minister was asked in the House about the agreement with Mr. Phelps which provided for his being hired on June 16, 1980, by Petro-Canada, to be seconded to the political staff of the minister on the same day. That was a long term of employment by PetroCan. He has not worked for PetroCan yet, but the company is paying him a salary to supplement the $35,000 he gets as a government employee so he can have a little bit over and above the average. The company provided him with two interest-free mortgages to the tune of $35,000 to purchase his home in Ottawa. Talking about conflict of interest, the minister was asked in the House about the appoint-
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ment of Mr. Phelps as his executive assistant. He said there was nothing strange about this, it is something that is done all the time.


An hon. Member:: They do it all the time.


William Hunter (Bill) McKnight: My colleague, the hon. member for Esquimalt-Saanich (Mr. Munro) says they do it all the time. They may do it, but this is one of the few times we have found out about it. The minister says it is common with the executive exchange program. The Phelps arrangement had nothing to do with the program which allows executives to exchange jobs temporarily with the public service. He is not a public servant, and the exchange program, quite properly, does not apply to executive assistants who are members of a minister's political staff.
The 25 per cent back-in provision is bad enough. The government has presented a policy which will probably take millions of dollars from companies which have invested in this country in good faith. I would like to suggest that no one in his right mind could say we could have developed our energy resources or any part of this country to the state of sophistication we now enjoy had we not had outside foreign investment. There is nothing wrong with foreign investment, just as there is nothing wrong with Canadian investment in our own country. However, if you are going to change the rules, you should not change them in the middle of the game.


An hon. Member:: Oh?


William Hunter (Bill) McKnight: As an accepted practice, governments should not change the rules in the middle of the game. In the province of Saskatchewan where I come from it is done quite commonly. This has also shown up in Saskatchewan in the exploration holes drilled in that province and also in the finds of natural gas, but that is another matter.
Let me use the example of Hibernia developed by the Chevron people. PetroCan has by legislation already acquired a 25 per cent interest in this field. Through this bill, the Crown reserves to itself a 10 per cent royalty, plus a 40 per cent progressive increment. The royalties, together with a federal 8 per cent petroleum revenue tax, should surely provide the government with more than a fair return on the people's investment in Hibernia. That is a fair share of those revenues. Other revenues would also be derived from production from this discovery, without the outright theft by this government, at a cost to the company, of an additional 25 per cent interest. It is more than difficult, it is impossible to continue to explore for oil and gas in frontier areas with this kind of set-up.
This company originally had no idea it would make a discovery and be able to pay a return to those investors who had confidence in the directorship of the company. This government says that on behalf of the people of Canada it needs a return on investment. I suggest companies also need a return on their investment. Let me say to my friends in the NDP, so do co-ops need a return on investment. Some co-ops pay out shares all the time. My colleague, the hon. member for Wetas-kiwin (Mr. Schellenberger) when he attended the University of Calgary, established a precedent, with the assistance of a

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Canada Oil and Gas Act
gentleman by the name of Grant Devine. Because of the monopoly established by a grocery chain in the city of Calgary, he worked with an existing co-operative movement. That co-op has continued to pay dividends on individual shares. It is probably one of the few co-operative movements that has returned an equity share on investment on a consistent basis. This is done in that big, bad free enterprise province of Alberta.
The retroactive part of the 25 per cent confiscation provision is probably the most repugnant part. What happens as a result of it is something that we as Canadians will have to suffer over the next 25 years. We will continue to feel the effects of a lack of confidence on the part of foreign investors in this country. There is no industrialized country in the world that has been able to build without foreign investment. Probably the most industrialized and enterprising country we can point to is that neighbour to the south which was built on foreign investment. The American people were not born with large corporations or with the standard of living they now enjoy. They worked for it, strived for it and invested in it. They now should be able to enjoy the benefits. We in Canada should also be able to enjoy the benefits of investment, if investment had been encouraged. I cannot understand why a government has to confiscate or nationalize when it has the right of taxation and the right to set rules and guidelines. If it is not receiving enough revenue, it should raise the tax. It should not steal something that does not belong to it, something someone has worked for and invested in. The government cannot take it over just because it wants to change the rules of the game, because what it thought was proper ten years ago, now is improper and bad for Canadians.
If we look at the National Energy Program as a whole-


An hon. Member:: You have that right.


William Hunter (Bill) McKnight: My colleague from Calgary says that I have that right. Unfortunately, it will put us all in the same hole. It is the government's intention to purchase the assets or shares of several of the large foreign-owned companies at a fair price. I find it difficult to understand why we have to spend the dollars of the Canadian people to buy a company that is already drilling for oil and has found oil and to have that company take our money right out of Canada and not find one more barrel of oil for that investment. This is what happened with Petrofina.
I see some members on the government side who are familiar with practical business. They happen to be farmers. They know very well that when one starts a project and works toward its completion, one does not welcome a neighbour coming in to take 25 per cent of it for the good of all. It is the same thing here.
The New Democratic Party, and quite often the Liberal Party, to my amazement, seem to feel that companies are not people. They seem to think that they all have two-storey suites for offices but that they do not represent people, that they are
big, bad businesses. Well, they are people. They own and they have invested in those businesses.


Nelson Andrew Riis: We are talking about Exxon.


William Hunter (Bill) McKnight: If they do not invest in those business they will not continue and neither will you see any benefit or growth.
We hear ripples from the rump over there, the NDP members who, I am sure, have vast business knowledge, who have invested their own time, sweat and labour into creating jobs and have gone to a bank to borrow money to meet that payroll. To turn around and have the government come in and take 25 per cent of that is not socialism; it is stupidity.


Erik Nielsen: Tommy Douglas and Gulf.


William Hunter (Bill) McKnight: Someone said Tommy Douglas and Gulf. It is Tommy Douglas and Husky.


An hon. Member:: That is not a big company. It is a little one.


William Hunter (Bill) McKnight: It is a nice company. It is Canadian. I see nothing wrong with Tommy Douglas sitting on the board of Husky Oil.


Erik Nielsen: He was the leader of the NDP.


William Hunter (Bill) McKnight: If the one-time leader of the New Democratic Party decides he would like to sit in a corporate boardroom up there on high and look down at the small people he purported to protect in my province of Saskatchewan for some 20 years, that does not bother me. I will not criticize Tommy Douglas for doing that. I would not even criticize the present leader of the NDP if he joined the board of General Motors. Although I would be concerned about his business sense if he went on the board of Chrysler.
I cannot understand why governments and parties with political philosophies-especially the NDP party which says it understands co-ops-cannot understand the principle of companies with shareholders to whom they report.
In closing, Mr. Speaker, I wish to say, as an individual member and a Canadian who is fair-minded, that I will be voting for this amendment and that I will be voting against the bill if this amendment is not included.


Mr. Deans:: On a point of order, Mr. Speaker. I would like to draw to the attention of the House that the "P" in "NDP" stands for party. It is therefore redundant to say "NDP party".


William Hunter (Bill) McKnight: On the same point of order, Mr. Speaker. We realize that the "P" does not stand for party. We also realize that it does not stand for "principles".


An hon. Member:: What a wit!
October 27, 1981


The Acting Speaker (Mr. Blaker):: The hon. member for Athabasca on a point of order.


Mr. Shields:: I think we all realize at this time, Mr. Speaker, that there is a lot of pee in the NDP. Thank you.


The Acting Speaker (Mr. Blaker):: The hon. member for Western Arctic, not on the same point of order.


Mr. Dave Nickerson (Western Arctic):: I think we have exhausted that particular point of order, Mr. Speaker.
Mr. Speaker, I would like to thank the intervenors for the information they gave us, but I would like to continue with the discussion of Bill C-48.
The question before us tonight is Canadian ownership. I do not think there is a single member of this House who does not favour an increase in Canadian ownership in the Canadian oil and gas industry. It is pointless to have members on this side getting mad at members over there, saying they are trying to sell out to the Americans, or to have members on that side saying we are trying to sell out.


An hon. Member:: No, you give it away.


Dave Nickerson: The argument is on the process of Canadi-anization and how it should be implemented. My friends to the left, of course, want to nationalize everything in sight. The way members opposite want to do it is to use Petro-Canada, the chosen instrument of policy. The way we on this side would like to do it is through Canadian private investment. We do not want the government to own the oil and gas, the refineries and the distribution network in Canada. These industries should be owned by private individual Canadians.


An hon. Member:: What party is Bill Davis in?


An hon. Member:: Good old Suncor.


Dave Nickerson: The difference in approach, Mr. Speaker, in how we are going to accomplish this-


An hon. Member:: Nationalize the airlines.


An hon. Member:: Do you want me to beat the tan off him?


Dave Nickerson: Let's have a little bit of hush. This is a serious speech! If I might continue, Mr. Speaker. The difference in approach between the members over there and the good guys on this side is the same as the difference between the carrot and the stick approach. Over there, they want to use the big stick approach, use the big Liberal stick on the mean American oil companies. They want to use the big Liberal stick on Canadian companies also. They want to use that stick to take away 25 per cent of everything they find on Canada lands. They want to use that big Liberal club to beat the Canadian taxpayer. Just look at the Petrofina fiasco, the amount of money that cost Canadians and the Petro-Canada tax they must pay every time they buy a gallon of gasoline. That is the difference in approach between this side and that.
When I first read Motion No. 21, I was amazed at the moderation shown by the hon. member for Etobicoke Centre
Canada Oil and Gas Act
(Mr. Wilson). I got to thinking about it. I could see the reason why he presented this motion. It was because there could be no way the Liberal Party could not accept it. It was so reasonable and rational that any right-thinking person would jump at the opportunity to vote in favour of it. It does not purport to get rid of the concept of Crown ownership, or to put Petro-Canada out of business, but to use the concept of the Crown share when it becomes necessary.
We like the Canadian ownership rate of 50 per cent. It is a nice round figure. We would not argue whether it should be 50 per cent or 60 per cent. Over a period of time, we might even adopt the approach of the NDP of 50 per cent one year and maybe 55 per cent a few years later. However, the Crown share should only be used when necessary. When the Canadian ownership rate is less than 50 per cent, the Crown should pick up the balance to bring the Canadian ownership rate to 50 per cent. What could be more reasonable than that?
The proposal of the government would take away 25 per cent from anybody and everybody. It does not matter what the nationality of the particular operator is. The government will take the 25 per cent Crown share, whether it is necessary or not, for the purpose of pursuing a policy of Canadianization. They want to get the bureaucratic tentacles into every acre of oil and gas lands in Canada lands. That is what they are up to. Their intent is plain to see. They want a government say-so. They want somebody from the Department of Energy, Mines and Resources to say what can be done with each little parcel in Canada lands. It will not be very long before that principle is extended to the provinces of Canada, if the government gets its way.


Mr. Munro (Esquimalt-Saanich):: That is why they took property rights out of the Constitution.


Dave Nickerson: That is correct. That is the basis behind that omission.
On a slightly different tack, I want to deal with what happens when the government has a share in an oilfield and the oil and gas rights to a particular parcel of land. This is not new. It exists in the north. It is in existence at the Norman Wells oilfield, approximately two thirds of which is owned by Imperial Oil and one third by our friendly federal government.
How does it operate? What advantages are there to the people who live in the area or, in fact, the rest of Canada in having one third federal ownership in that oilfield? I can think of no advantage. If you look at the efficiency with which that oilfield is operated, you find that it is less efficient because of federal government ownership. There is a disincentive to encouraging efficiency when certain costs can be allocated here and certain costs there so that items do not show up as profit on the government side. There is an inefficiency built into the system when the government takes over a sizeable proportion in that way.
Is it of any advantage to local people who would like to work in the oilfield or refinery? I do not think it makes one bit of difference. The same opportunities exist, regardless of whether

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or not the federal government has a part ownership. I believe it makes no difference whatsoever.
What is most important, as far as the people in the area are concerned, is the price they pay for a gallon of heating oil or gasoline. I can tell hon. members that the price of those commodities right outside the refinery gate is about 20 cents a gallon more than in Ottawa. Therefore, what advantage is there to the people who live there and must rely on the oil and gas production of that refinery? What is the advantage of the one third federal government ownership? I suggest there is no advantage.
What about the people who live there who are involved in exploration, the gamblers? They are willing to risk money to find oil. If they get one break, they come out of the deal financially healthy.
I know quite a few people who were involved in the exploration business in the territories ten and 15 years ago. Because of successive years of Liberal administration and the way the northern oil patch had to be operated, they moved to Alberta. That was the place to make money. Alberta had a sensible government. If you invested your money in Alberta, were lucky and hit oil, you could sell that oil at a reasonable price and make money.
These people who for 15 years have lived on the same street as myself, up to about five years ago, are now leaving Alberta because of policies imposed by the Liberal party. Now they are taking their money and expertise to the United States. Federal policies have chased those people over two borders, the border at the 60th parallel and now the border at the 49th parallel. That is where they are going because that is where the money is.
I want to refer briefly to a matter brought to the attention of this House a couple of days ago by the hon. member for Crowfoot (Mr. Malone). He quoted a speech that had been made in Sherbrooke, Quebec by the Minister of Energy, Mines and Resources (Mr. Lalonde). The minister was speaking there in French to some of his Sherbrooke cronies. He seemed to open up a little more than he does in this House. He was quite frank about the policy of the government. The policy, he said, is to prevent money being made in the hinterlands of Canada. The minister wants to get his hands on the money and funnel it into Quebec, Ontario and other places where there are still a few Liberals around. He was quite frank about stating that policy. There was no argument whatever.
I cannot agree with that policy. In the future, there is going to be a great need for new capital investments in the west, in the maritimes with the Hibernia field, and in the north. The best way to accumulate that capital is to use moneys that have been generated in the oil and gas business in those areas. If that money is siphoned off, brought to central Canada and used to construct airports like Mirabel, or bail out corporations such as Chrysler and Massey-Ferguson, we will not reach our goal of self-sufficiency. There will not be sufficient money to invest in those areas of Canada where investments can pay off and the energy resources can be found.
My final point, Mr. Speaker, is that sometimes I find it difficult to understand why the people on the other side of the House, when it comes to Canadianization, will single out particular industries in particular areas of the country and neglect others. When they talk of Canadianization, the oil and gas industry immediately springs to mind. Why? It is because that industry is removed from their sphere of influence around here. The oil and gas industry, by and large, operates in areas of the country where the government has very little support. Therefore, it does not have to bother about the feelings and the wishes of the people in that industry.
When it comes to other industries where there is a considerable foreign presence, the food or manufacturing industries of this part of Canada, for example-and when I say this part of Canada I mean Canada within a several hundred mile radius of Ottawa-when it comes to those industries, do we hear the same arguments? No, I do not think we do. There is silence on those issues from that side of the House. It seems to me they are singling out industrial areas where they will not really be affected, but it can sure cause a lot of harm to people who live in the regions.
In conclusion, Mr. Speaker, I say we on this side are just as determined to achieve Canadianization as anyone else. But what we want to do is to use a reasonable and rational approach. We do not want to go around banging people on the head with big Liberal sticks.


Jack Wendele Shields: The debate before us today is one of the most critical on the National Energy Program or on Bill C-48. For a brief moment I should like to go back 17 years, particularly as today we are talking in the House about the tar sands, about heavy oil, and the massive amount of crude oil and synthetic crude that is available in these areas. Seventeen years ago in northern Alberta, just north of Fort McMurray, we welcomed with open arms the Sun Oil Co. and encouraged that company to invest millions of dollars in the first tar sands plant ever to be built so it could try to tap the abundant resource that exists in the Athabasca tar sands.
I shall never forget the opening of the plant. The people of the town of Fort McMurray were invited to the plant site, where the premier of the day, at that time Mr. E. C. Manning, said, with considerable pride, "This plant is here in Alberta today, and not one nickel of public funds has been invested in it". The Sun Oil Co., headed by its founder, Mr. Pugh, looked at the potential of the company and foresaw the impending oil shortage in the world. He took an entrepreneurial chance and said, "We are going to build the plant because some day, I think, we can develop the technology".
At least three times during the course of the past 17 years Sun Oil nearly closed the plant. They were not asking for any handouts or for any subsidies, but they were not making money. They were losing millions of dollars every year. But they persevered. They developed the technology. Because they became viable, another plant was built. The price of oil escalated. The OPEC countries which had control of virtually

all the major oil supplies in the western world started to put the noose around their necks. Today we are still at the mercy of the OPEC countries. My God, it staggers the imagination when we sit here and think about how much money has to be invested in the oil industry in Canada for us to even reach energy self-sufficiency or oil self-sufficiency by the turn of the century.
The people who are continually attacking the United States oil companies, the parent companies in the United States, are the same people who turn around and say, "Please come back and invest in our megaprojects. Come and invest in Imperial Oil at Cold Lake, but get out of the conventional areas. We do not want you there any more. You do not serve any purpose there any more." They say, ''Come in, Shell Oil, because we need you up in the Alsands Project in Fort McMurray, but get out of that western basin. We do not want you there. Canadi-anize or you will not have the chance to participate in the oil play in Canada."
The government is moving to Canadianize the oil industry. For the past 20 years we have heard talk about Canadianizing the oil industry, Canadianizing our manufacturing industry, Canadianizing our auto industry, and Canadianizing all our industry. Let us buy Canada back.
I say to you, Mr. Speaker, and to fellow members, you cannot buy Canada back until you have the money to buy it back, if this is what you are talking about. You sure do not do this by using the taxpayers' money to buy Petrofina or to establish a government Crown corporation for show.
What kind of future is there? We have the oil and we have the resources in Canada. Alberta's Energy Resources Conservation Board held hearings last summer. Here are some of the findings that came out of those hearings: there are close to 6 billion barrels of oil in the deep basin area around the province's western boundary, enough to supply the country at current consumption rates for eight years. Whether it is recoverable depends on the price. Of course it depends on the price. What entrepreneur is going to invest in a hole in the ground unless he knows he has a chance to receive a decent return on his investment? I am not just talking about the foreign oil companies; I am talking about the Canadian oil companies.
The Alberta report indicated:
It will take 30,000 more wells to gain maximum recovery from oil reserves now in place. This represents about half the discovered oil in the province.
It is indicated that 30,000 more wells must be drilled in the western basin to recover what they know is there. I urge hon. members to do a bit of arithmetic. Approximately 250 rigs are presently drilling in the western basin. They take anywhere from six months to eighteen months to complete a hole. How long will it take to drill 30,000 holes? The rigs are not staying in Canada. They are pulling out. They are leaving because the incentive is gone. There is no incentive to drill in Canada any more. They are moving out of the western basin. They are moving out of a business climate which was fair, equitable and stable to go to the United States and to Australia. We have
Canada Oil and Gas Act
lost the expertise, the rigs and the people. They will not return because an agreement was signed with Alberta. The government became greedy, took too much, and has not left enough for the industry. In turn they have said that that was it. The report states further:
Alberta wells are now pumping five times as much water for the same volume of crude as they pumped in 1970.
This was eleven years ago. It continues:
Enhanced recovery methods have the capability of producing slightly more than half the oil which Alberta is now pumping.
Before the industry will go into enhanced recovery, it needs the incentive and the dollars to invest in enhancement recovery schemes. It continues:
Though discoveries in the last two years have improved Alberta's supply of conventional crude beyond what was expected in 1978, these improvements have been offset by the fact that existing pools are declining faster than expected.
From 1978 until the national energy policy was brought forward by the government a year ago this month, things looked pretty good, but the amount of oil was declining much more rapidly in existing pools. It continues to read:
The largest pools existing in Alberta have already been discovered and "future discoveries will generally be relatively small and scattered."
This is true except of course for the deep basin. It has not yet been explored but it is there. It continues:
By 1990 production of conventional crude oil from existing pools in the province will have declined to 32 per cent of present production and by 2000 to
10	per cent.
The declining known resources which they are pumping today in the western basin will decline to approximately 10 per cent by the year 2000. Where is that oil coming from? By the year 2000 there may be something from the Beaufort Sea and Hibernia. It will not be from the western basin because the incentive has gone. The industry has been chased out of the country. The report continues:
-The Financial Post predicted that by the mid-1980s Canada would face an
011	supply crisis-
This oil supply crisis will be of severe magnitude. They asked what would cause it. It was the shrinking of supplies from Alberta, coupled with the uncertainty of supplies from overseas. Canada was already importing 18 per cent to 20 per cent of its crude oil supplies. At the ERCB hearings, they talked about how they could get Canadian industry more involved, how they could get them working and searching for oil which is much needed by the economy. The report continued:
"The Petro-Canada forecast of reserve additions and production reflects essentially a continuation of the existing pricing and fiscal regime."
Already they sound like bureaucrats. It continues:
While it is not possible to put great precision on the relationship of additional supply to price increases, there is considerable evidence that the increased netbacks realized by producers of natural gas over the past five years have resulted in a greatly improved supply situation.
Petro-Canada is now adopting this bureaucratic language. What it means in plain, unbureaucratic language is that there was an incentive for people to go out to find natural gas. They knew if they found it, they could sell it. They knew if they sold

October 27, 1981
Canada Oil and Gas Act
it, they could sell it at a profit. That is all that was said in this statement. They found plenty. They found all kinds of natural gas in the Elmsworth field and other fields of like magnitude. Petro-Canada went on to indicate in its report:
If the existing pricing and fiscal regime for crude oil were changed such that producer netbacks were significantly increased, it is very possible that greater reserve addition and production levels could be achieved.
In other words, Petro-Canada indicated that if there were an increase in the netback to producers on the oil discovered in the western basin, they would find more. It is pretty simple.
Now I should like to touch upon the amount of money which will be required to put Canada on the road to energy self-sufficiency in this century by the year 2000. The year 1995 has gone by the wind. There is absolutely no way, despite the promises of the great energy czar, the Minister of Energy, Mines and Resources, and his underling, the Prime Minister (Mr. Trudeau), that we will reach energy self-sufficiency by 1990. We will not do it. It is becoming clearer and clearer every day that we will not reach oil self-sufficiency by 1990. To reach oil self-sufficiency by the year 2000 will require a direct capital investment of at least S260 billion in 1980 dollars in oil-related fields alone. I am talking about drilling in the Beaufort Sea, in Hibernia and in the western basin. Also I am talking about the megaprojects which must come onstream from the Athabasca tar sands, from Imperial Oil at Cold Lake, from Alsands at Fort McMurray, and from at least five more projects. All energy sources and all knowledgeable sources have indicated very clearly that there must be massive capital investment of at least $260 billion in today's dollars. Where will that money come from? We are saying that we are going to Canadianize the oil industry-and I agree with that, but not in the way that the government is going about it. What sense does it make to spend millions upon millions of dollars to buy an existing oil company that is already doing the work we want it to do? If Petro-Canada wants to get into the oil business, let it, but not at the expense of other producers. Let it get out and find oil.
If we want to Canadianize the industry, we could use a taxing structure. Surely there are knowledgeable people on the government benches who could work out a taxing structure that would give an incentive to investors who now invest in foreign oil companies.
We have the technology and we have the resources. That technology was primarily given to us by our good friends south of the border, and I say that in all sincerity. The technology that was developed in the United States by the big, bad multinational oil companies is accessible to us and has been used in Canada.


An hon. Member:: Free?


Jack Wendele Shields: I hear now from the little red rump down there. All they want to do is tax the blazes out of the people and buy everything. We do not have enough money to buy everything, and that is what I am trying to point out to them.
The technology that was available to Canada is not available in the U.S.S.R. We can drill a hole in three months. To drill a similar hole in the Soviet Union would take approximately two years because they do not have the technology. We have the technology, we have the resources and we must invite capital into the country to develop those resources. We must do this immediately or we will all be freezing in the dark.


Some hon. Members:: Hear, hear!


John Patrick (Pat) Nowlan: Mr. Speaker, I am very pleased to participate in the debate on Bill C-48 and the amendment introduced by my colleague, the hon. member for Etobicoke Centre (Mr. Wilson), Motion No. 21 which is before us tonight.
Without any catcalls from left, centre, right or front, let alone from the back, I want to say that I was not going to participate in the debate tonight until I listened to the speech by the hon. member for Westaskiwin (Mr. Schellenberger). As I sat behind the curtain doing what I sometimes do, puffing on a cigar, I was very much taken by his philosophical stance and perception of this very fundamental amendment. This bill has taken many days of the time of the House, but frankly, Mr. Speaker, at this time in Canadian history, I do not know what bill would have more business to be before the House than Bill C-48.
My friends from the left are interjecting, Mr. Speaker, but I am not going to go looking for rabbit tracks. When you are after elephants, you do not follow rabbit tracks; you do not go down a dead-end street that leads you to a rabbit warren that is sterile.
As I sat there-and I admit that I was puffing on a cigar that was not Canadian made but was given to me by a Canadian, but regardless of that-I thought that, in a philosophic sense, this bill does many things and this amendment does many things. We are talking about Canadianization, and this is an interesting time in Canadian history. Next week the premiers and the Prime Minister (Mr. Trudeau) are supposed to get together-and I suppose they will-to try to resolve some of the fundamental problems that have affected the country for some time. In the House today we heard that the Minister of Finance (Mr. MacEachen) has got another Hamlet, a second coming type of thing-now it is the third coming-and we may or may not have a budget, depending upon all these things.
As we are talking about Canadianization, it really hit me tonight that if there was ever a time to demarcate those people on the right of the Speaker and those people on the left-at least those people in the official opposition because there is no opposition to the left of the left ever since the constitutional motion came to the floor of the House-in terms of the House of Commons there has only been one official opposition according to the Speaker and that is absolutely true, and in terms of the constitutional debate there is not only the official opposition, there is absolutely zilch opposition to the left of the official opposition.
October 27, 1981


An hon. Member:: Repeat that.


John Patrick (Pat) Nowlan: I will come now to the topic of Canadianiza-tion. I know that you read history, Mr. Speaker. You used to be a radio broadcaster long before you graced the chair. You will have heard the words of Hugh MacLennan, the Canadian novelist who wrote "Two Solitudes". It used to be that a member could not stand in his place in this House and mention two solitudes, without people immediately thinking of English and French or French and English. MacLennan wrote that book, a book which is still very applicable today but, Mr. Speaker, there are other solitudes. Never have those solitudes been more clear than in this debate on Bill C-48 tonight. Without getting into linguistics or even peoples, we get into the philosophy of people. That is what is missing, Mr. Speaker, and it is one of the problems with this country today-the philosophy of where the country is going.
Stimulated by the speech by the hon. member for Wetaski-win, it hit me, as some things hit if one listens with an open mind, that tonight we are talking about those who are producers and those who are parasites; we are talking about those who believe in the profit motive and those who believe in penalty; we are talking about bureaucracy versus business; about initiative and incentive versus the1 chloroform of controls and regulation ad nauseam. Fundamentally, that is what we are talking about. I think there are some members opposite who share my philosophic view but I am sad to say that, unfortunately, what we are talking about on this bill tonight is the separation of Grits and Tories.
It is a sad irony, a sad paradox, that as the premiers and the Prime Minister sit down around the federal-provincial table at the beginning of next week to try to resolve the problems of the country, it has never been more clear in the House that the problems of the country are right here in this House, becausei we, the representatives of the people, have been separated by fundamental solitudes.
You have been in this House and I have been in this House as other members have tonight, Mr. Speaker. We have also heard some of the debate that has taken place over the last year or several months. What are we talking about? Canadianization.


Ian Deans: That's a very good question.


John Patrick (Pat) Nowlan: Hon. members on the left can indulge in catcalls all they like and pretend they believe in the low income earner and the person who has nothing. I suggest that the persons who are watching the debate tonight in the House1 of Commons are not that excited or uptight on the matter of Canadianization and further extensions of Petro-Canada. They would like to know and have the security that they could Canadianize their homes-


Ian Deans: At a price they can afford.


John Patrick (Pat) Nowlan: -and that the price of the interest rates will allow them to keep their homes. They would like to understand when the Minister of Transport (Mr. Pepin) or the Prime
Canada Oil and Gas Act
Minister (Mr. Trudeau) says, as he did today, "There is a time and a place when governments have to cut and chop because there is no time for government to spend money forever. That is why we cannot spend on trains." There is more than the odd Canadian who would like to believe that if the government can spend $1.5 billion for Petrofina and $650 million for Pacific Pete, surely it can Find $100 million to help subsidize the trains until we can sort out a cost formula. VIA Rail cannot understand that, and CN and CP would never have the nerve to confess how they are raking off VIA Rail, which is supposedly the people's railway.
What else is fundamental to the people of Canada? There is nothing more fundamental to the people of Canada than something called-I do not want to get catcalls-it does not relate to languages but to weights and measures. It is an irony and a fundamental paradox that weights and measures, that is the metric system, and the essence of the metric system, have never been debated in the House of Commons. Does Your Honour know why people outside the House are a little alienated? They are alienated because these things that they think are fundamental are ignored by the House of Commons. What else is there that is fundamental and sacrosanct, without getting too political? It is something called the post office and the lack of service. That is something fundamental, and one can talk all one wants about Canadianization. Many hon. members on this side of the House have talked about Canadianization.
I am from a part of a country which believes that government must help those who cannot help themselves. I am proud to be a member of a party which has done things for this country in the short period of time that we were in office which have helped those who cannot help themselves, be it CBC, the CNR, the BBG, the Board of Broadcast Governors, you name it. In the short period of time we were in power, we added quality to public life, in spite of the narrow perspective of the period of time that we have been in public life, because we have not been in government long enough.
Frankly, I hope this debate continues for days until we really know what the premiers and the Prime Minister have to say about some fundamentals. However, those fundamentals are important for the long term. I am not denigrating the constitutional debate, but I am saying to Your Honour that never have the two solitudes-not meant the way MacLennan meant it, but in terms of a House of Commons-debated in this chamber for hours, ad nauseam, until the people of Canada outside wonder what the devil is going on.
We have had this debate for days. I am saying to Your Honour, with respect, that this House of Commons must start to come to grips with some of the fundamental problems wich affect the people, the philosophy behind this bill. We can have all the federal-provincial conferences we want in the world, but we must define our philosophy. I admit reluctantly that although some of my friends to the left have a philosophy, I do not subscribe to it. That philosophy is not what developed this country into the type of country it is today. That philosophy is not the type which gives so many of those friends of mine in

October 27, 1981
Canada Oil and Gas Act
the NDP a chance to come into this House and espouse their theoritical principles and their theoretical philosophy, because that philosophy forgets one basic ethic. One does not get anything in this world unless one is prepared to work for it. There is no free lunch, as we heard it said around here earlier.
What many of us have been trying to say in Bill C-48 is that one can have all the ministers of energy, mines and resources in the world trying to Canadianize the energy situation in Canada with Houdini's wand, but unless the basic philosophy of producer versus parasite is maintained, the mainstream that we in this House have been given will not continue.
I have been in this House for a few years. There are hon. members who are younger than I am. I will not become overly romantic or sentimental tonight about the heritage we have been given; but a heritage has been given to this country. The two solitudes exist because of the political framework and the make-up of this House of Commons. We would not have this debate in the House of Commons had there been, in the old days of Mackenzie King and St. Laurent, some strong spokesmen in this House from the varied regions of Canada. The government cannot nominate to the upper chamber these political eunuchs who are supposed to be the spokesmen of the main regions of this country. It needs the Stewart Garsons and the Jimmy Gardiners who were Liberals in the classical sense. It needs to balance those voices against those in the time of John Diefenbaker, strong voices from all parts of this country. This press of ours is so mesmerized by television that it does not take the time to really study some of the underlying philosophical and political currents which are affecting this country. It will never get the handle on the federal-provincial conferences coming up.


An hon. Member:: Tommy Douglas.


John Patrick (Pat) Nowlan: I have the fullest respect for Tommy Douglas. The parliamentary secretary-or undersecretary, because he is so far under the secretary of energy, mines and resources, yet he is a fine man in the publishing world-is supposed to do something about Canadian history. However, unless there are people of his ilk who have consciences and some appreciation of history, I am saying in all seriousness tonight that this country, regardless of what happens on Monday or Tuesday, will not be here in my children's time. That is how serious I feefthe situation to be.
I implore hon. members on the opposite side and members of the NDP, who come from a pretty homogeneous group to understand that it takes government members who have serious questions about either the Constitution or Bill C-48 to get a proper perspective, not the smug perspective that radiated tonight from the face of the secretary for energy, mines and resources. Unless hon. members of this House of Commons can get a wider perspective than the narrow constituency one, unfortunately, as this House is divided, I am not optimistic about what will happen to this country. I am an Irish Canadian, a Nova Scotian who has been conditioned to be optimistic about anything, because I have had to be.


Ian Gardiner Waddell: You must have kissed the Blarney stone, too, eh, Pat?


John Patrick (Pat) Nowlan: However, I am not going to go down those rabbit trails of public advocates who have yet to earn their hard dollar in the world of law. After one gets three years of Tommy Berger on that commission in the north, one can come into the House of Commons as knowledgeable in energy as is the hon. member for Vancouver-Kingsway (Mr. Waddell). Regardless of that, I am not talking about individuals; I am talking about a national scene and, frankly, a national sickness. Unless we can start to reflect on the reasons we are here, that it is free enterprise, that it is producer versus parasite, that it is not just profit or penalty, not just bureaucracy and no lack of respect for the business, we will have continuing difficulty here. The fundamental of Canadianization, as much as we want to philosophize in this House, is the right of a Canadian to have his home, to have his family and to have his job. Unless we start to think in that sort of simplistic, general, but fundamental way, we will be debating Bill C-48 and the problems of Canada until the cows come home.


Some hon. Members:: Hear, hear!


Peter Elzinga: Mr. Speaker, in the short period of time left to me prior to the calling of ten o'clock, I will not endeavour to get into the specifics of this legislation as have so many of my colleagues before me. I will leave the energy field to them because they are more knowledgeable than I. However, in speaking to Motion No. 21 before us pertaining to clause 27 in Bill C-48, I would like to philosophize somewhat on the implications of what we stand for in our motion as compared to what the other two parties stand for.
I have found in the seven years that I have served in this House of Commons that the members on the government benches opposite have been so preoccupied with the redistribution of wealth that they have given no concern to the generation of wealth. Unless we have generation of wealth here in Canada, Canadians will suffer. I can think of no better example to share with the House than the budget that we introduced and on which we were defeated in December, 1979.
There are many philosophical undertones to that budget. We have a deep belief in the Canadian individual who built this country. Individuals built this country, not governments. Governments simply take from the people. In our budget of December, 1979, it is interesting to note that we were reducing the government budgetary deficit and government spending. The social policy planning board of Canada indicated that it was the most socially progressive budget that had been introduced in Canada in the ten years prior.


Some hon. Members:: Oh, oh!
October 27, 1981


Peter Elzinga: I hear some heckling from my friends to the left. As our House leader indicated, they are social parasites. I appreciate the comments made by the hon. member for Athabasca (Mr. Shields) who calls a number of them a red wart on the red rump.
This motion points out clearly the philosophical difference between us in the Conservative party and the Liberal and New Democratic Party coalition, as did the constitutional discussion in the House.


Ian Deans: What has this got to do with the bill?


Peter Elzinga: We believe in the individual worth of Canadians. We believe in the free enterprise philosophy. It is quite obvious the other two parties do not. All we have to do is take a look at their actions. They speak for themselves.
As our spokesman has indicated, basically we support the 50 per cent Canadianization content and ownership. We would encourage Canadian ownership. We would encourage it in a totally different way from what this present administration is doing. There is no finer example to illustrate how we would encourage this than that of Petro-Canada, and what we were going to do with the petroleum company of Canada. We were going to allow individual Canadians an opportunity to participate in the development of their resources by participating directly in the development and in the profits of the company. But our friends opposite and our friends to the left would not allow Canadians that opportunity. They feel they are that much wiser than the individual Canadian.


Ian Deans: They went to the polls and turfed you out.


Peter Elzinga: They feel they should control it rather than individual Canadians.
I have never in my life seen a party more hypocritical than the New Democratic Party.


Ian Deans: Take a look around you.


Peter Elzinga: I wish to share with you some specific examples of hypocrisy.


Ian Deans: You epitomize hypocrisy.


Peter Elzinga: The budget on which we were defeated in


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


Mr. Fulton:: Mr. Speaker, I rise on a point of order. I recognize that you have endeavoured at great length to offer as broad a latitude as possible to all members of the House in this debate, but the level of slop that is coming from the right at the moment is irrelevant to the taxpayers of this nation. It is particularly irrelevant and hypocritical when we are discussing a bill that is extremely serious. It is improper for members to come into this chamber completely unprepared and to speak in only vaguely relevant terms on the bill. I would request, as a
Canada Oil and Gas Act
member of this House, that you give some direction to those speakers who are not even vaguely aware of what Bill C-48 is all about.


Peter Elzinga: Mr. Speaker, what we have heard from the hon. member is typical of that party. They are not happy only dictating to the Canadian people. Now they want to dictate to the supreme being in this House, namely, our Speaker.


The Acting Speaker (Mr. Blaker):: Order, please. I have been offered the opportunity to be the supreme being. I have no choice but to seek recognition. I did not take up the point made by the hon. member for Skeena (Mr. Fulton). I think he was arguing on a point of order that there ought to be some greater degree of relevance.


Harvie Andre: The point of order should be more relevant.


The Acting Speaker (Mr. Blaker):: The difficulty is not a new one to either hon. members or to the Chair. As I have done on previous occasions, I would suggest to the hon. member for Pembina (Mr. Elzinga) that he, as well as other members, may wish to consider the suggestion made by the hon: member for Skeena. That is the best that I can do, other than to make an outright ruling that something is not relevant.
Possibly some of the heated language could be moderated. That would perhaps get us through to ten o'clock, which is not far away.


Peter Elzinga: Mr. Speaker, I should tell hon. members in this chamber that I am dealing with the Canadianization clause and the back-in provisions of 25 per cent ownership, but I have some introductory remarks to lead up to that.


Ian Deans: Not at the report stage, you don't.


Peter Elzinga: As I was saying, I want to deal with the hypocrisy of the party to my left. I could deal with that very quickly by mentioning two items that we had in our budget, namely the energy tax credit and the mortgage deductibility program. We advocated the energy tax credit. Hon. members over there voted against it but now they are shouting to have it included. That illustrates one example of the hypocrisy of my friends opposite.


Some hon. Members:: Hear, hear!


Peter Elzinga: We would like nothing better than to have an election now.


Some hon. Members:: Oh, oh!


Peter Elzinga: The second example is the mortgage tax credit program. Our friends were shouting that we should do something for the home owners. They had great concern for them. But when they defeated us in this chamber, interest rates were only 14 per cent. These people have contributed to the rise of interest rates by some 6 per cent to 7 per cent. They are directly responsible, as are hon. members opposite. But now they come out with their deep concern for social causes, such as the need to help the home owner. We advocated that help

October 27, 1981
Adjournment Debate
over a year ago. Where was the New Democratic Party at that time? They defeated us simply for political expediency.
May I call it ten o'clock, Mr. Speaker?



PROCEEDINGS ON ADJOURNMENT MOTION

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

Hon. Walter Baker (Nepean-Carleton):: Mr. Speaker, on October 16 last I asked a question of the President of the Treasury Board (Mr. Johnston) with respect to the infamous decentralization program of the government. I indicated at that time that the program seemed to have some life in it again, marked by the move of the philatelic mail order section of the post office to the riding of the Minister of Finance (Mr. MacEachen), together with the announcement at a management meeting that the citizenship records branch of the Department of the Secretary of State was being transferred. The minister's answer with respect to this is very important. He did not deny the two organizational moves that I mentioned. He went on to say that "the government has never backed off the policy" of decentralization, and that ministers would be making announcements from time to time. I assume these announcements will be timed to suit the political patronage convenience of the respective ministers. That is some program, Mr. Speaker. The old policy has been dusted off and we can now expect its revitalization.
I have to tell the House again tonight that there is yet another proposal before the Treasury Board which has to do with the land engineering test establishment of the Department of National Defence at Orleans, Ontario. The people who realize the importance of the presence of that government high technology establishment in the capital of Canada are saying, "build a building here so we can get on with our work". There are others who are giving active consideration to moving it somewhere away from the centre of high technology in Canada. This is another waste, and I think the government should be condemned for it.
I characterize this return to the policy of decentralization as a return to the most wasteful, cost ineffective, demoralized and patronage ridden program this Liberal government has ever foisted upon the public service, the national capital and the public of Canada.
The Clark government reviewed all decentralization programs of the former Liberal government in the summer of
1979 in the context of expanded priority to restrain government spending as well as to eliminate the negative effect on the delivery of government services. The decision not to proceed at that time in 19 cases effected a savings of at least $200 million, with extended costs of $250 million at that time, and the revitalization of this program means now a cost to the treasury in excess of $300 million, if this proceeds.
This is the extent of the program the minister has indicated is being revitalized: the Farm Credit Corporation headquarters to Camrose; the Department of National Health and Welfare, Bureau of Dangerous Drugs, to North Bay; the Department of National Health and Welfare, a lab to Kamloops, British Columbia; the Department of National Health and Welfare, medical services, Ontario Regional Office, to Thunder Bay, and Statistics Canada, Ontario Regional Office, to North Bay. The list continues: the Department of Energy, Mines and Resources, a subdivision, to Thunder Bay; Canada Employment and Immigration Commission, employer registration division -wage loss insurance-, to Bathurst, New Brunswick; the Department of National Health and Welfare and Department of Supply and Services, income security offices and support services from Halifax, to Sydney, and from Toronto to Peterboro, Chatham and Timmins; the Post Office, philatelic services, we already know about; External Affairs, passport mail service, to Sydney; Revenue Canada Taxation Centre for Career Development, to Rigaud, Quebec; Revenue Canada Taxation Data Centre, to Jonquiere; the Department of Energy, Mines and Services, Survey, mapping branch, to Sherbrooke, Quebec; the Department of Communications, telecommunications regulatory service, to Quebec City; the Canada Pension Plan, claims and benefits, Ontario Region, to Toronto; and the Department of Environment, Hydrology Research Institute, to Saskatoon, Saskatchewan. That is the extent of the program being revitalized and to be announced from time to time as it suits the political convenience of the ministers.
Some 3,200 employees in the national capital region will be affected by the piecemeal revitalization of those plans. This was unaffordable and unwise in 1979, and it is even more unaffordable and unwise to proceed, or even to contemplate proceeding in this way at this time. Aside from the resources I have mentioned, the waste in human terms, the upset in terms of the public servants and their families in regard to this matter is something that is beyond measure.
Certainly if there is to be decentralization, the criterion must be the effective delivery of the services of the Government of Canada. None of those that have been announced and none of those contained in a revitalized decentralization program meet this criterion, and that is the sad case. Of course, with respect to this government, efficiency and effective delivery of service is not the criterion. The criterion is good, old-fashioned patronage; a building here, an extended runway there, and the public interest be damned. That characterized the program at the beginning, and that will characterize the program as it now proceeds.
October 27, 1981

Frankly, I want the minister to cancel this stupidity and put the money and the effort that will be wasted on this program where it will help certain people in the economy; home owners, small business people and farmers, who are the victims of this kind of extravagance and the high interest rate policy of the government.
I see the parliamentary secretary in the House tonight. I ask him to deny that any of those matters are going forward and I ask him to state categorically, on behalf of the government, that once and for all that decentralization program is ended.


Norman Kelly: Mr. Speaker, the subject of organizational decentralization has received much attention in recent days, so I think it is appropriate at this time to review the government's position on this matter. As you know, decentralization has been part of this government's administrative approach for several years. It began in 1975 when the task force on decentralization was established, led by the Treasury Board secretariat. Its purpose was to develop a relocation program within the following framework. First, the location of any government unit must be consistent with an acceptable level of efficiency and effectiveness. Second, within the flexibility afforded by this principle, locations should be determined in terms of such objectives as regional development, urban development, controlled growth in the National Capital Region, and of considerations related to national unity.
As a result of this study, part of a relocation program was developed between May, 1975, and October, 1977. It consisted of nine projects, including the move of the headquarters of the Department of Veterans Affairs to Charlottetown, which is still in progress.
A second announcement in October, 1977, included 15 projects involving 12 departments and agencies, plus an important decentralization of the income security program offices of Health and Welfare Canada in nine provinces. The stated objectives then were: first, to move the administration of federal government programs closer to the people directly affected by them; second, to assist areas of slow economic development and high unemployment; third, to increase the presence of the federal government in communities where it had been low and where activities of a national character could contribute to national unity; and fourth, to lessen the proportion of federal employees in the National Capital Region vis-a-vis the rest of Canada.
It was then understood, Mr. Speaker, that if, in due course, there were to be other worthwhile decentralization projects, they would emerge from the normal annual planning process of the departments and agencies of the federal government. In effect, the responsibility for meeting the thrust of the policy has now been placed on departments and agencies, with emphasis placed on new programs which would have no impact on the National Capital Region. In other words, departments are required to review their geographic distribution at least annually. When changes of any kind are identified or when
Adjournment Debate
new units must be established, various alternative locations must be examined in relation to the efficiency and effectiveness of program delivery and protection of employee rights in areas such as official languages.
This examination of location options will permit the government to bring appropriate considerations to bear on the location of government units. These considerations will obviously include regional economic factors and other matters on which the choice of location can have beneficial results.
Regarding existing decentralization commitments, the government has had to consider how they can be met. Mr. Speaker, we have recognized that the substantial benefits to be obtained are not free but entail additional costs, for removal expenses and new buildings, for example, plus some disruption of programs and, most important, of the people involved.
Mr. Speaker, this government has been very much aware-


The Acting Speaker (Mr. Blaker):: Order, please. I now have to recognize the hon. member for Winnipeg-Assiniboine.


Walter David Baker: That is hardly an answer.


INDUSTRY-LOCATION OF AEROSPACE TRAINING CENTRE INSTITUTE
Mr. Dan McKenzie (Winnipeg-Assiniboine):: Mr. Speaker, on October 16 of this year I directed a question to the Minister of Employment and Immigration with regard to the establishment of an aerospace training centre in Winnipeg. Earlier this year the minister had appointed a 12-member advisory group under retired General A. MacKenzie. This group recommended that the aerospace training centre be established in Winnipeg. I did not receive a satisfactory answer from the minister when I directed my question to him. He just gave me some evasive answer that there was lots of work for everyone. I asked him to give a commitment that the aerospace training centre would be located in Winnipeg. I find it very strange that the minister is not here tonight to answer this question because of the importance it has for Winnipeg and western Canada.
We were disturbed to hear recently that the Quebec caucus of the Liberal party and its chairman have stated that the aerospace training centre will either be in Montreal or will not be built at all. Apparently this was also a Liberal caucus resolution. They have completely overruled the minister's recommendation that the aerospace training centre be located in Winnipeg. I understand that all 74 members of the Quebec caucus and 14 cabinet ministers have stated that the centre will be in Quebec. I find this very strange as the cabinet is to make the final decision. However, the decision has apparently been made at a Liberal caucus meeting that the aerospace training centre will be in Quebec, and the advisory group's recommendation that it go to Winnipeg will be completely ignored.

October 27, 1981
Adjournment Debate
If the Quebec caucus has given the minister an ultimatum that they are going to ignore him, he has no alternative but to put his resignation on the desk of the Prime Minister (Mr. Trudeau). He should state that if it is not to be built in Winnipeg, he will resign. I hope he is man enough to do that. Otherwise he is nothing but a mere figurehead in the Liberal cabinet.
The advisory group made some excellent recommendations as to why the aerospace training centre should go to Winnipeg. They stated that, by virtue of its location in Winnipeg, the institute could undertake basic training courses to address the needs of the aerospace industry. They further stated that Manitoba is the location of the third largest segment of the Canadian aerospace industry and has a diversity of activity which would benefit from manufacturing-related training courses within the institute. The minister has stated that Winnipeg is the cradle of aviation. He should back up his words with actions.
Winnipeg was chosen because no aerospace centre exists in Manitoba or Saskatchewan. Winnipeg is still most unhappy with the Liberal's removal in 1969 of the Air Canada over-all facility. To deprive that city further of a modest share of air space growth will be more fuel for western alienation.
Winnipeg deserves the training centre since Quebec already has 50 per cent of the aerospace industry in Canada. It has a 48 per cent commitment of the NFA fighter aircraft spin-off. The province of Quebec has received millions upon millions in defence contracts.
Canadair and other industries have untold millions poured into their business in the province of Quebec. This is nothing but 100 per cent pure greed on the part of the Liberal caucus which is never satisfied with what it receives. They are still fighting to have the NFA contracts opened up again so that they can get more than 48 per cent.
The advisory group recommended that the startup phase of the centre commence immediately. I was hoping the minister would be here this evening to give a firm commitment to Winnipeg and the west that this aerospace training centre will be built in Winnipeg. I hope he will be man enough to lay his cabinet post on the line if he is overruled by the Liberal caucus and cabinet.
The Winnipeg chamber of commerce has shown a great interest in having this aerospace centre established in Winnipeg. They are distressed about the public disagreement over the Canadian Institute of Aerospace Training and Technology. In a letter to the Prime Minister they stated:
We are sorry to hear that your cabinet minister, the hon. Lloyd Axworthy, and your Quebec MPs choose to disagree over the location of the institute.
They also stated: "Quebec has aerospace training schools and Winnipeg has not". We read regularly in the newspapers that new federal government projects are starting up in Quebec. It now appears that when any project is not located in Quebec, there is a hue and cry that an injustice has been done.
Canada should not be a funnel to locate almost all federal projects in Quebec.
The chamber went on to say:
I request that you and the cabinet impartially review the objectives and recommendations of the report, and come to the logical conclusion of the committee which studied the problem in great detail.
In closing, they said:
I have taken the liberty of sending copies of this letter to some concerned Members of Parliament, as well as to the media.
I hope I was wrong when I said tonight that the decision has already been made that the institute is moving to Montreal and not to Winnipeg. I hope the parliamentary secretary can state tonight that a final decision has not been made and there is still a chance that this institute can be located in Winnipeg, as was advised by the minister's own advisory group.


Mr. Remi Bujold (Parliamentary Secretary to Minister of Employment and Immigration):: Mr. Speaker, as pointed out by the hon. member for Winnipeg-Assiniboine (Mr. McKenzie)-I believe he has clearly demonstrated his interest in advanced technology in the aerospace industry-and in the House as well, we have found that many members are interested in this new technology and in the training aspect which is also very important to Canada. Mr. Speaker, I should like to elaborate on the minister's reply in the House last week. I wish to point out that it is a matter of concern to the minister that all expanding industrial sectors in the country should have an adequate supply of skilled workers commensurate with their needs, and that the minister is examining a number of proposals aimed at increasing the number of skilled Canadian workers in all industrial and developing sectors throughout the country.
Regarding the aerospace industry in particular, a subject that my hon. colleague has just addressed, an advisory group consisting of employer and union representatives has recommended establishing a national aerospace institute whose responsibilities would include:
(1)	providing leadership to the Canadian aerospace industry by keeping it abreast of advanced technology, offering training programs and proceeding with a manpower planning program;
(2)	to co-ordinate present efforts being made by public authorities, the private sector and community colleges;
(3)	to provide information commensurate with the needs of regional industry.
The institute's intended role with respect to manpower co-ordination and planning will be of considerable help to the aerospace industry in planning and co-ordinating the industry's training activities aimed at acquiring sufficient numbers of skilled Canadian workers.
A few months ago, the minister and the Canadian Association of Aerospace Industries concluded an agreement on human resources with a view to finding a solution to the
October 27, 1981

projected manpower shortages in the industry's manufacturing sector. Under the agreement, the commission and the association will co-operate on various manpower aspects such as planning, training and affirmative action and also on carrying out programs.
The projected institute is only one of many recommendations made by the industry with a view to relieving manpower shortages, and the minister is expected to submit recommendations to the cabinet in this regard.


WILDLIFE-EXPORT OF FALCONS TO MIDDLE EAST
James Ross Fulton: My question tonight arises from a question I put to the Prime Minister (Mr. Trudeau) on October 20. It is reported at page 11,968 of Hansard. My first questions was:
Has the Prime Minister at any time asked his staff to arrange for the export of either peregrines or gyrfalcons to the Middle East?
The answer, Mr. Speaker, is clearly yes, although you will note that the Prime Minister said, as reported on that page of Hansard, "no". I am hopeful that tonight 1 will receive some clarification, because I am confident that the Prime Minister would not want to mislead the House on that point.
When I named Mr. Jim MacDonald, who was a member of the staff of the Prime Minister, I made it very clear that he was "recently of his personal staff'. The Prime Minister came back with the following very quick comment:
It seems to me that the hon. member is making at least two mistakes. First, Jim MacDonald is not in my office.
I never intended the Prime Minister to understand that he was. Anyone who checks Hansard will see that that is not what I said. It is at least a strange coincidence that of 24-odd million Canadians the Prime Minister's previous head of communications is involved in what I have described as the "gyr-falcon wildlife scandal."
An interesting thing occurred approximately ten days ago. I had a conversation with Mr. MacDonald, and approximately two days later he came up with a completely different story. At the same time I had conversations with a number of reporters. Certainly he demonstrated how well-heeled he is in the art of media manipulation and of shading the truth. I said in my question that it was a wildlife scandal. Of course it is. There is absolutely no baseline population information available on gyrfalcons in the north.
I should like to quote from two well-known Canadian sources. First, the co-ordinator of wildlife research for Canada with Environment Canada, Mr. Nick Novakowski, who said:
it was a political decision made by the territories. We're not happy about it, but the gyr is not yet on the endangered species list and thus does not have federal protection.
He went on to say:
The problem is, however, that we do not know how many there are in the north.
Adjournment Debate
Another person who should know a great deal about this subject is Mr. Ron Gaf, a wildlife service officer with the Northwest Territories government. It is reported:
Ron Gaf, a territories biologist who accompanied the Inuit, said little is known about the gyr population.
Mr. Gaf went on to say:
The only numbers we have are sightings by wildlife service officers monitoring peregrines.
As if that was not serious enough, let me return to Mr. MacDonald for a moment. Obviously he was a key player in this affair. I should like to demonstrate how the media has been manipulated in this situation. As reported in The Globe and Mail on October 21 in an article by Charlotte Montgomery entitled, "Former PM Aide Denies Role in Gyrfalcon Affair," Mr. MacDonald said that he assisted the Inuit organization with an export proposal which resulted in 50 trapping and 50 export permits being issued to the Inuit by the territorial government. The article continued:
He said he then helped to pre-sell 50 birds to Middle East buyers.
It went on to include a direct quote of Mr. MacDonald:
I really just put together the project.
From where did the headline come? The entire article is about his involvement, that he set up the project, that he made the sales to the Middle East, and he admits putting the whole thing together. But the headline indicated that he was not involved. I find this kind of reporting to be a very serious concern. It is a completely erroneous headline for a newspaper to carry about a very serious environmental issue.
This is where we really get to know something about this fellow, Jim MacDonald. As reported in the same article, he said:
-gyrfalcons are a very common bird-
I have given quotations of Mr. Novakowski, the co-ordinator of wildlife research for Environment Canada, and of a biologist in the Northwest Territories, but here we have a guy who was in communications in the office of the Prime Minister saying that it was a very common bird. In my view it demonstrates the kind of unscientific and really dishonest attitude which has seriously tainted the issue.
Mr. MacDonald went on to indicate that the birds were worth from $5,000 to $12,000 apiece. This has been disputed by every legitimate falconer with whom I have spoken, and many other sources. In fact, Hugh Monaghan, a Northwest Territories wildlife services officer said that for each bird taken under those permits, $5,000 would go to the government of the Northwest Territories. Mr. MacDonald is saying that some of these birds are caught in the Arctic and are brought down for sale, and that all the money is going to the Northwest Territories government. What about the Inuit? Are they to get nothing? As a matter of fact, the vice-president of the Canadian Wildlife Federation indicated publicly that perhaps those birds are worth $50,000 or more each.

October 27, 1981
Adjournment Debate
It goes on and on. Not only have reporters and the Northwest Territories wildlife service director Kuwaitis implied that there are no Kuwaitis in Canada, they have not taken the time, as 1 have, to check into this. Perhaps these reporters who have run so quickly with their pens to write things about this story should contact David Miller of the Toronto Star who, on October 11, pointed out that Nick Novakowski of the Canadian wildlife service said that Kuwaitis have been in the Northwest Territories for a month working with the Inuit, ever since the territorial government issued 50 permits to trap falcons.
That is not just one source, Mr. Speaker. I refer those same reporters to the Montreal Gazette of Tuesday, October 13, which confirmed precisely the same information.
If members on the government side do not believe that Kuwaitis are involved in this hunt, perhaps Mr. MacDonald or the Inuit association should get in touch with the Minister of the Environment (Mr. Roberts). Mr. Novakowski is an employee of the federal government. He is on the public record as indicating that Kuwaitis are involved. I would encourage members opposite to ask the Minister of the Environment to rise in this House and say that Mr. Novakowski's statement is not correct.
It seems clear, Mr. Speaker, that there is, first, a totally inadequate population information base on the gyrfalcon, not only in the Northwest Territories but in Canada as a whole, and the export of birds at this time is scientifically unsound and is a biological travesty for Canada and, second, connections between the gyr export and Prime Minister's office needs some very serious clarification. The Prime Minister's answer to my question on October 20 was really quite unrevealing and perhaps was misleading. I am sure he would not want that left on the record. The Prime Minister indicated that he would inquire into this whole situation, that is, the involvement of Mr. MacDonald in the permit and export of these gyrfalcon. This is an important question and I hope the response that I receive tonight will be something that I can give to all the organizations that have been in touch with me and to the reporters who have raised questions about the information I used.


Norman Kelly: Mr. Speaker, the hon. member for Skeena has indicated that he is not satisfied with the response to his questions in the House the other day.
In helping him understand the issue he has raised, perhaps a little history would be useful. The Government of Canada is a signatory to the 1973 Convention on International Trade in Endangered Species. By that convention, certain species, which are declared by countries to be endangered, are listed in Appendix I and may not be traded in international commerce.
For a number of years, all falcons were listed in Appendix I. However, last March, at the general meeting of the parties in
New Delhi, India, the parties agreed that the North American populations of the gyrfalcon would be downgraded to Appendix II, which permits their movement in commerce under the appropriate permits, of course, and provided the birds were banded in an approved fashion. Changes in the regulations of the Import and Export Permits Act have now been developed which will allow the commercial export from Canada of gyrfalcons taken legally from the wild or bred in captivity.
Now, moving closer to the heart of the matter, an Inuit Association headquartered in Cambridge Bay, approached the government of the Northwest Territories with a plan to trap gyrfalcons in the central Arctic. The executive committee of the NWT approved the capture of a maximum of 50 gyrfalcons in what was to have been an experimental harvest.
The idea behind the trapping and export of gyrfalcons was to generate revenue for both the Inuit Association and for the government of the Northwest Territories to permit further study of gyrfalcon populations in the Northwest Territories. I am sure the hon. member opposite would agree that that is a reasonable and desirable goal. The executive committee of the Northwest Territories, in a responsible way, imposed the following conditions on the harvest: First, there had to be a confirmed order for each of the falcons taken; second, only young-of-the-year birds were to be trapped; third, falconers retained by the Inuit association to assist in the harvest were to be approved by the chief of the Northwest Territories wildlife service and the trapping operation was to be monitored by the Northwest Territories wildlife service officers; fourth, all birds trapped were to be banded in an approved fashion and held individually in a temporary housing facility until their movement from the Northwest Territories was arranged; fifth, four Inuit men were to be trained in the trapping and handling of falcons and four Inuit women were to be hired to care for the birds at the temporary housing facility; sixth, the Inuit association would be charged an export permit fee of $5,000 per bird captured; and seventh, export from Canada would not be permitted until the appropriate regulations under the Import and Export Permits Act were properly in place.
The trapping was to have taken place during the first ten days of October. Participating in the trapping operations were Inuit from the Inuit association-


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


Norman Kelly: -and two professional falconers from British Columbia supervised officials of the Northwest Territories wildlife service.


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


Norman Kelly: No falconers from Kuwait were present


The Acting Speaker (Mr. Blaker):: Order, please. It is regrettable that the Chair has to cut off the hon. member in this fashion but that is the way the Standing Orders read and that is the way they have to be applied at this hour of the night. Perhaps I can indicate for the record that departments
October 27, 1981

that go to the trouble of preparing answers should realize that if the hon. parliamentary secretary does not have enough time to make the answer then it is Canadians who suffer. It is someone's responsibility to see that the information is put into three minutes.
Adjournment Debate
The motion to adjourn the House is now deemed to have been adopted. Accordingly, this House stands adjourned until tomorrow at two o'clock p.m.
At 10.31 p.m. the House adjourned, without question put, pursuant to Standing Order.

Wednesday, October 28, 1981