1982-05-31

ROUTINE PROCEEDINGS


Mr. Donald W. Munro (Esquimalt-Saanich):: Madam Speaker, because of Argentina's failure to have signed the nuclear proliferation agreement, I move, seconded by the hon. member for Bow River (Mr. Taylor):
That this House commend the dock workers at Saint John for their refusal to load the nuclear bundles which were to have been shipped to Argentina today by a Canadian government agency, AECL.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


THE PRIME MINISTER
Mr. Lome Greenaway (Cariboo-Chilcotin):: Madam Speaker, in 1960 Canada was home to the second-most productive people in the world. By 1970 we had slipped into third place. By 1980 Canada had plunged into eleventh spot in terms of productivity. In light of the fact that the greater part of this slide occurred during the administration of the current Prime Minister (Mr. Trudeau), I move, seconded by the hon. member for Okanagan-Similkameen (Mr. King):
That the Prime Minister resign for having unwisely exploited Canada's natural resources while failing to cultivate our human resources.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


CHARTER OF RIGHTS
Mr. Lome Nystrom (Yorkton-Melville):: Madam Speaker, I have a motion under Standing Order 43. Given that the Canadian Charter of Rights and Freedoms provides in Section 2(d) for freedom of association, and in view of the interpretation of the Acting Minister of Justice before the Special Joint Committee on the Constitution on January 22, 1981, that freedom of association covers the right to organize and bargain collectively, and since exclusion from the Public Service Relations Act effectively denies freedom of association to the messengers, bus drivers, kitchen staff and all other employees of this House, I move, seconded by the hon. member for Churchill (Mr. Murphy):
That this House reaffirm its commitment to the Canadian Charter of Rights and Freedoms by explicitly terminating the extraordinary privileges of the House with respect to its employees.


Madam Speaker:: I am not sure whether this motion is in order. However, I will put it to the House. Is there unanimous consent for this motion?


Some hon. Members:: Agreed.


Some hon. Members:: No.


BILINGUALISM
Mr. Bill Domm (Peterborough):: Madam Speaker, small businesses are under ever-increasing pressure today thanks to ever-increasing government intervention in all phases of their operations. For example, the government is forcing the 38,000 retail grocery stores in Canada to purchase new metric weigh scales from foreign manufacturers. Now it appears that the small franchise operations at Toronto's international airport are being forced to employ bilingual staff in an area which, of course, is multilingual. What a shame that they will have to fire Italians, Portuguese, Chinese or others because they cannot speak French. I therefore move, seconded by the hon. member for North Vancouver-Burnaby (Mr. Cook):
That this order to impose rigid bilingualism at all Toronto airport business operations should be considered insulting and unconstitutional to the immigrant populations of Toronto and an added burden to the already overburdened independent businesses trying to make a living there.


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

May 31. 1982


Some hon. Members:: Agreed.


Some hon. Members:: No.


THE ADMINISTRATION
Mr. Dave Nickerson (Western Arctic):: Madam Speaker, while Canada-wide dissension rages in the Liberal Party, as witnessed by the B.C. affair last weekend when delegates were told that the government has no plans to deal with the economy until after Versailles, and equally at the Ottawa policy convention where eastern Ontario Liberal backbenchers described themselves as "voices crying in the wilderness", I move, seconded by the hon. member for Bow River (Mr. Taylor):
That this House determines to rid itself of the Liberal blight and replace the present incompetent government with the Conservative alternative.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


IMMIGRATION
Mrs. Margaret Mitchell (Vancouver East):: Madam Speaker, I rise under Standing Order 43 on an urgent matter. Amarjit Kaur Sandhu, an East Indian woman whose husband took her dowry and abandoned her, will be forced to leave the country tomorrow, with no place to go. Over 200 appeals to the Minister of Employment and Immigration (Mr. Axworthy) have been ignored, and the minister responsible for the status of women has refused to intervene. Inasmuch as Mrs. Sandhu cannot return to India for economic, cultural and family reasons and she has job offers in Canada, I move, seconded by the hon. member for Winnipeg North Centre (Mr. Knowles):
That this House urge the Minister of Employment and Immigration to have a change of heart and allow Mrs. Sandhu to stay in Canada on humanitarian grounds.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


HUMAN RIGHTS
Mr. Jesse P. Flis (Parkdale-High Park):: Madam Speaker, I seek the attention of all hon. members of the House on a matter of urgent and pressing necessity, under the terms of Standing Order 43. On May 12, 1982, Mr. Sergei Soldatov, a distinguished Estonian political and human rights activist, appeared in Ottawa before the Canadian Parliamentary Helsinki group along with representatives from the Estonian Central Council in Canada. Mr. Soldatov was in prison for six years for alleged anti-Soviet activity. His only son, Aleksander, 23 years of age, has been refused permission to leave Estonia to join his family, which is an obvious violation of the provisions of the Conference on Security and Co-operation in Europe Final Act. In view of Canada's strong support for the principle of family unification, I move, seconded by the hon. member for Etobicoke Centre (Mr. Wilson):
That this House express its deep concern to the government of the Soviet Union and strongly urge that Mr. Sergei Soldatov's son, Aleksander, be permitted to leave Estonia without delay so that he may be reunited with his family.


Some hon. Members:: Hear, hear!


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


Some hon. Members:: Agreed.


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


Some hon. Members:: Agreed.


[Stage Direction]
Motion agreed to.

Mr. Gordon Taylor (Bow River):: Madam Speaker, taxes arising out of the National Energy Program and the November 12 budget are a burden to wage earners and those on fixed incomes and have discouraged investment in and expansion of industry and have, indeed, killed incentive in this country. Therefore I move, seconded by the hon. member for Okana-gan-Similkameen (Mr. King), on behalf of the million plus unemployed, and the thousands more who will become unemployed if things are not changed, and those who would invest in Canada if the government would cut down its present exorbitant "take" in taxes:
That this House demands that the government withdraw the budget and substantially reduce the energy taxes at once.


Madam Speaker:: Is there unanimous consent for this motion?
May 31, 1982


Some hon. Members:: Agreed.


Some hon. Members:: No.


PUBLIC SERVICE
Mr. Sid Parker (Kootenay East-Revelstoke):: Madam Speaker, in view of the fact that the Supreme Court of Canada has today ruled that the government has the right to designate an overwhelming percentage of the membership of the Canadian Air Traffic Controllers' Association as essential, and in view of the fact that that action effectively removes the right to strike for that group of public employees as well as stripping them of their real bargaining power, I move, seconded by the hon. member for Churchill (Mr. Murphy):
That this House condemns the government for its backdoor Ronald Reagan labour policies and calls on the government to cease this continued vicious attack on the men and women who serve the people of Canada.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


THE ADMINISTRATION
Mr. David Kilgour (Edmonton-Strathcona):: Madam
Speaker, the government has given entirely new dimensions to the terms "deserving Liberals", "political patronage", and "appointment by merit". The CNR, the CBC, the CTC, virtually all federal institutions, now have come to be seen by those opposite, Madam Speaker, not for appointing the best men and women to fill the positions but for appointing their political cronies. There has perhaps been no government in Canadian history, federal or provincial, that is worse than this government in that regard. I therefore move, seconded by the hon. member for Esquimalt-Saanich (Mr. Munro):
That the Tammany Hall and Huey Long award of merit for incorruptible government be awarded to those opposite, to be presented to the Prime Minister at Versailles later this week at the home of King Louis XIV, the Sun King.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.
Oral Questions BANKRUPTCIES


INCREASE IN NUMBERS-MOTION UNDER S.O. 43
Mr. Ray Skeliy (Comox-Powell River):: Madam Speaker, whereas bankruptcies in the Province of British Columbia are up by 48.3 per cent, and in mid-May national total bankruptcies were 3,651, up from 2,000 last year, and whereas the debt incurred from the bankruptcies already this year is approximately $627.8 million, double last year's figure, I move:
That this House recognizes that the Minister of Finance in his budget has completely destroyed the operation of small business in Canada and that the Minister of Employment and Immigration has now achieved the record of putting more people out of work than the government can create in job-creation programs.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.



ORAL QUESTION PERIOD


Hon. Ron Huntington (Capilano):: Madam Speaker, my question is directed to the Minister of State for Small Businesses and Tourism. The minister has spent $1.2 million directly and a little over $800,000 in indirect expenditures on a small business financing review which has been under way for over two years. From twelve major reports he has produced a 77-page overview which, apart from the business sector profile of clusters, is probably the most poverty-stricken report in terms of conclusions ever produced by the Government of Canada.
As the Minister of State for Small Businesses and Tourism has had access to the 12 reports for some time, can he tell us what are the priority issues and needs of the business community in Canada?
[ Translation]


Hon. Charles Lapointe (Minister of State (Small Businesses and Tourism)):: Madam Speaker, I have already explained to the House that after reading the reports prepared by various university experts and consultants' firms, I felt it was necessary to analyse the conclusions drawn in these reports with the small business sector itself and with a group of people across the country who could perhaps held me to find new perspectives or confirm existing ones with respect to policies on small businesses. As far as the figures quoted by the hon. member are concerned, when I said that the cost involved

May 31, 1982
Oral Questions
was $1.2 million, I was referring to the total cost. Consultants' fees and private studies carried out over a period of almost two years during which the study was made, amounted to $700,000, and this, with the estimated cost of the work of departmental employees who worked on the special team, added up to $1.2 million.


Arthur Ronald Huntington: Madam Speaker, it is obvious to those of us on this side of the House who know something about the subject matter that the minister is not addressing, nor is he aware of, any of the real gut issues which face this important community which relies on him in its interface with the government.


CREDIT CO-INSURANCE PROGRAM-QUERY RESPECTING INTRODUCTION OF LEGISLATION
Arthur Ronald Huntington: Madam Speaker, the overview speaks positively about the credit co-insurance program, which has been in the Ottawa works for about three years or more. The agreement for the first broker under this program was signed on February 10, 1982. Essential to the implementation of this program, which will be a valuable aid to the long-term financial needs of the business sector, are amendments to the Canadian and British Insurance Companies Act and amendments to the Pension Benefits Standards Act. Why have these amendments not been brought forward so that this new vehicle of financial assistance will finally be able to operate?


Charles Lapointe: Madam Speaker, the hon. member said only one firm was authorized to provide reinsurance. I think he should check his facts, since as far as I know, there are five firms who are allowed to operate in this field at the present time. I have taken note of the two suggestions made by the hon. member.


Arthur Ronald Huntington: Madam Speaker, the minister obviously does not know what is going on in his own department. There is only one broker who has been licensed, and that agreement was on February 10. There are others making applications and taking positions in the marketplace, but they have not been licensed, nor is the legislation in place. I am asking the minister to make sure the legislation is put into place so that that need in the financial markets can be served.


BUSINESS BANKRUPTCIES
Arthur Ronald Huntington: Madam Speaker, the FASCYM report says:
Day to day operating problems far outweigh financing in importance-
Can the Minister of State for Small Businesses and Tourism explain why 300 small businesses per month in the Toronto area alone are closing their doors, why thousands of independent stores cannot pay their bills and are closing their doors, why bankruptcies are accelerating at depression rates, and why transportation companies are closing or going into receivership?


Madam Speaker:: Order.


Charles Lapointe: Madam Speaker, the hon. member does not seem to realize that we are going through an extremely difficult period. Until our economy, with the co-operation of all economic agents including business, consumers, governments and unions, is able to control inflation which at the present time is causing a drop in consumer demand, which in turn is the main cause of the bankruptcies that are taking place right now, until we have dealt with the very basic problem of inflation in our economy, Madam Speaker, I do not think we can expect to see any rapid improvement.


NATIONAL ENERGY PROGRAM
Hon. Michael Wilson (Etobicoke Centre):: Madam Speaker, my question is for the Minister of Energy, Mines and Resources. The minister has announced that at eight o'clock this evening he will make a statement on motions. I think he will understand that this is only the second time in this Parliament that a minister has made a statement on motions, the first being when the Minister of Finance announced very, very extensive changes to his budget last December 18. Will the minister's statement tonight on his energy policy continue in the tradition established by the Minister of Finance?
[ Translation]


Hon. Marc Lalonde (Minister of Energy, Mines and Resources):: Madam Speaker, the hon. member will have to wait until eight o'clock. I may remind him that the National Energy Program has been adjusted regularly since October 1980. A number of adjustments were made when an agreement was signed with the three oil-producing provinces. Further changes representing, in all, about $900 million in additional income for the industry were made since last September, and I am referring to the $900 million spread over the period from 1981 to 1986. My hon. colleague will have to make up his own mind this evening, but I want to make it clear that we have made regular adjustments as the situation has developed.
May 31, 1982


REASONS FOR STATEMENT
Michael Holcombe Wilson: Madam Speaker, maybe I could be more precise. Is one of the reasons for the statement tonight that consumers today are paying 10 to 20 cents more per gallon for gasoline than consumers in the United States? Is it because the goal of self-sufficiency by 1990 has gone out the window? Is it because Canadian-owned oil and gas companies are struggling along today in the position where they are hardly able to survive? Finally, is it because so many jobs have been lost in the manufacturing industry because of the disastrous energy policy which the minister introduced in 1980? Are those the reasons for the statement on motions tonight?


Marc Lalonde: Madam Speaker, I understand that my hon. friend is no longer the energy critic for the opposition. It shows in his question that he has lost touch with the facts. First of all, the average price of gasoline in Canada today is still lower than it is in the United States.


Mr. Thomson:: That is not true.


Some hon. Members:: Oh, oh!


Donald W. Munro: Try the truth for a change.


Marc Lalonde: Secondly, the price for heating oil in Canada is lower by as much as 7 cents per litre than it is in the United States.
Third, the price of natural gas in Canada is very significantly lower than it is in the United States.
These are the facts that the Conservatives, with their blinders on, refuse to see and refuse to notice.
As far as the other points raised by the hon. member are concerned, if he were still energy critic he would realize that Canadians have made great progress in the conservation of energy. This has meant that the objective of self-sufficiency today is clearer and more achievable in 1990 than it was in October, 1980, or than it was when the Conservatives were in office-


Madam Speaker:: Order please. The hon. member for Brant. Mr. Lalonde: Madam Speaker, there was a fourth question.


AUTOMOTIVE INDUSTRY
Mr. Derek Blackburn (Brant):: Madam Speaker, my question is for the Prime Minister. In a few days time he will be in Versailles and will have an opportunity to have a discussion, face to face, with Premier Suzuki of Japan. The Minister of State for International Trade failed to get an 85 per cent
Oral Questions
Canadian content in Japanese automobiles and trucks coming into Canada. I ask the Prime Minister very simply, will he screw up his courage and demand that Premier Suzuki make sure that, within one year to 18 months, 85 per cent of the part content of Japanese cars and trucks will be manufactured here in Canada?


Right Hon. P. E. Trudeau (Prime Minister):: Madam Speaker, I am happy to take notice of the question.


STEPS TAKEN BY AUSTRALIA
Derek Nigel Ernest Blackburn: Madam Speaker, while the Prime Minister is taking notice of the question, will he keep in mind that Australia, which also exports a great deal of raw materials to Japan, has very effectively imposed a 57 per cent tariff on all Japanese automobiles and trucks, as well as the 85 per cent content requirement? Will he remind Premier Suzuki of the Australian deal with Japan?


Mr. Paproski:: Take him on a motorcycle.


Pierre Elliott Trudeau: Madam Speaker, I-that is a very serious question in spite of the hon. member for Edmonton North trying to devalue it. Madam Speaker, I will take notice of that question too.


REQUEST FOR EMBARGO ON IMPORTATION OF JAPANESE MANUFACTURED VEHICLES
Derek Nigel Ernest Blackburn: Madam Speaker, I notice the Prime Minister is in a very noticing way today. While he is at it, will he assure this House-and I think he can answer this question without going to Versailles-that if all else fails, if the Japanese refuse to source up to 85 per cent here in Canada, he will unilaterally impose a 15 per cent embargo on all Japanese cars and trucks until they do agree to source here in Canada up to 85 per cent?


Pierre Elliott Trudeau: Madam Speaker, one of the purposes of the Summit will be to try collectively to avoid returning to the kind of beggar-thy-neighbor policies which ruined the western industrialized societies in the 1930s. So rather than promise to take that kind of protectionist attitude without further discussions, my answer would be that I would not want to give that undertaking.


APPLICATION OF NON-TARIFF BARRIERS TO JAPANESE IMPORTS
Mr. Benno Friesen (Surrey-White Rock-North Delta):: Madam Speaker, in the absence of the Minister of State for International Trade I will direct my question to the Minister of Industry, Trade and Commerce, having to do with the nontariff barriers now being imposed on Japanese automobile imports. The guerrilla tactics adopted by the government are an amateurish and chicken-hearted reaction to the minister's

May 31, 1982
Oral Questions
total inability to negotiate with the Japanese, and simply underscore the immensity of the failure of his negotiations. Because of these tactics, owner-operater truck drivers are in danger of losing their rigs, 100 to 200 jobs have already been lost, and consumers will pay more for transportation. Does the minister think it is necessary and right that these Canadians have to suffer because of his ineptitude and failure at negotiations?


Hon. Herb Gray (Minister of Industry, Trade and Commerce and Minister of Regional Economic Expansion):: Madam Speaker, we are not intending to create suffering for Canadians; we are intending to preserve and maintain the jobs of several hundred thousand Canadians in all parts of this country whose lives are linked with the production, distribution and sale of automobiles and parts. If my hon. friend is serious, he would direct his question, not to me but to his colleagues, such as the hon. member for Halton, the hon. member for Perth, and the hon. member for Mississauga South who call for action even more direct, blunt and severe than the reasonable steps we have been taking over the past few weeks.


CUSTOMS INSPECTION OF SHIPS CARRYING JAPANESE IMPORTS
Benno Friesen: Madam Speaker, the minister will have his opportunity to address himself to those members. At the present time Customs officials are conducting random searches of the crew's cabins on ships bringing in those cars, inspecting the licences of the officers of those ships, and in general harassing the crews. Have officials of the minister's department or that of the Minister of State for International Trade given orders to the customs officials to do that? Also, since Canada sells more to Japan that it buys, why does the minister think these kinds of tactics would induce the Japanese to buy even more from Canada?


Herbert Eser (Herb) Gray: Madam Speaker, it is a fact that Japan sells us $1.5 billion worth of cars and parts. In spite of very strong efforts by our industry, supported by the government, they have bought from us in the past year only $6 million worth in parts, a decline from $8 million in the preceding year.
With respect to the custom procedures that my hon. friend was talking about, all the procedures taken, as far as I am aware are fully prescribed by law. I do not know if he is asking us not to carry out the procedures properly under the customs law or the procedures with respect to anti-pollution or the procedure with respect to safety requirements, but if my hon. friend is so concerned about this matter, why did he not speak up and tell his colleagues, the hon. member for Halton, the hon. member for Perth and others in his caucus, not to press us for the kind of action that we have not yet decided is necessary to take.


Miss MacDonald:: Do something.


Herbert Eser (Herb) Gray: His complaint is against them, not against people like ourselves who are working to get a satisfactory resolution of this matter with the Japanese on a voluntary basis in a way that respects our good commercial relations and in a way that takes into account the needs of Canadian workers which the hon. member does not seem to care about.


Madam Speaker:: The hon. member for Halton.


Mr. Jelinek:: Madam Speaker, we are used to a lot of hogwash coming from that minister, but what he has just said is totally ridiculous. As the minister knows, the automotive industry in this country has lost nearly 50,000 jobs because of a lack of action on the part of the government. The minister should know that these new tactics in Vancouver will not create one new Canadian job.


GOVERNMENT POLICY
Otto John Jelinek: Madam Speaker, will the Minister of Industry, Trade and Commerce tell this House and, more important, will the minister tell the automotive industry once and for all what policy his government has to help those automotive workers who are out of work in Canada? I ask the minister to tell us now because that industry can no longer continue to operate in the vacuum in which it is operating today. I ask the minister to give us an answer.


Herbert Eser (Herb) Gray: Madam Speaker, we have been working to strengthen and preserve our industry, and to strengthen and preserve jobs. But, more important, I would like my hon. friend to tell us what his party's policy is.


Mr. Gamble:: What arrogance.


Herbert Eser (Herb) Gray: Is his policy what the hon. member from British Columbia is saying, or what he has been seeking for over the past several weeks? Why don't you guys get your own act together?


Otto John Jelinek: We have a policy. There is no action on your part.


UNEMPLOYMENT IN INDUSTRY
Otto John Jelinek: Madam Speaker, since we are not getting answers from the Minister of Industry, Trade and Commerce, I will pose my supplementary question to the Right Hon. Prime Minister. After two years of negotiations on the part of the Minister of State for International Trade and the Minister of Industry, Trade and Commerce, which negotiations have failed totally as far as the importation of Japanese vehicles is concerned, could the Prime Minister tell this House and the automotive industry in this country-which is suffering perhaps beyond repair unless some specific action is taken as soon as possible-what his government's policy is with regard to the 50,000 unemployed in this industry and the
May 31, 1982

growing number of unemployed in this important sector of our economy?


Pierre Elliott Trudeau: Madam Speaker, I can only repeat the point excellently made by the Minister of Regional Economic Expansion. We have just had one Conservative member for British Columbia, I believe, indicating that he wants Japanese automobiles to come into Canada in greater numbers and with accelerated frequency. Now we have another member who is asking us to protect the Canadian automobile industry. The hon. minister is absolutely right. If the Tories had a policy, they would not be asking these absolutely contradictory questions.


EFFECT OF CAPITAL COST ALLOWANCE PROVISION IN BUDGET
Hon. Bill Jarvis (Perth):: Madam Speaker, my supplementary question is for the Minister of Industry, Trade and Commerce. If he is so concerned and knowledgeable about the industry, would he tell the House whether he supports that budgetary provision dealing with capital cost allowance which has cost the likely sale of between 50,000 and 100,000 new vehicles since last November? Does the minister support that policy? If he is so anxious to know what the Tory policy is, I will tell him. We are against any budgetary provisions such as the one in last November's budget-


Mr. MacEachen:: Which one?


William Herbert Jarvis: -which cost those thousands of jobs in his riding and in mine.


Herbert Eser (Herb) Gray: Madam Speaker, assuming I am going to refer to the same aspect of the budget which the hon. member is talking about, I have already suggested in answer to a question in this House that the analysis he has put forward is greatly exaggerated and the impact is not at all what he has said it is.


William Herbert Jarvis: How much? How many cars?


Herbert Eser (Herb) Gray: In any event, the question asked by my hon. friend further shows the contradiction. The hon. member for Halton asks us what our policy is and what the cause is of the problems in the industry. He ascribes them not to the pressure from imports of Japanese cars but to a provision in the budget, which we say is greatly exaggerated.


William Herbert Jarvis: Do you or do you not support that budgetary provision?


QUERY RESPECTING POSSIBLE SURCHARGE AND IMPORT QUOTA
Mr. Don Blenkarn (Mississauga South):: Madam Speaker, my question is addressed to the Minister of Industry, Trade and Commerce, and it is along the same line as the one asked by my colleague, the hon. member for Perth. Does the minister
Oral Questions
feel that it is a proper policy for the Canadian government to use harassment techniques rather than amendments to the law, with respect to imports of Japanese cars? Does the minister not think that we should be above that kind of harassment and that we should take some positive action in terms of a surcharge and in terms of an imposed quota, rather than using harassment techniques which are clearly the kind of thing that only a bully boy would do?


Herbert Eser (Herb) Gray: Madam Speaker, I totally reject the premise of my hon. friend's question. We are taking steps that are fully provided for, by law. It is interesting that the hon. member himself is calling for an approach which certainly would have a much more severe impact on the people about whom the hon. member from British Columbia was talking than anything we have done so far.


ENFORCEMENT OF INSPECTION PROCEDURES
Donald Alex Blenkarn: My friend knows, Madam Speaker, that the business of enforcing laws is to enforce them in a reasonable and sensible way. Is the minister's way of handling this import problem that he is taking, and will continue to take, a detailed enforcement of inspection on every single vehicle coming off ships in Vancouver? Will that procedure continue for a long period of time, or is the minister going to do the proper thing under GATT by putting a temporary surcharge on these automobiles coming in, until our industry can recover and re-organize and be competitive on a world basis?


Herbert Eser (Herb) Gray: Madam Speaker, my hon. friend has not told us what impact his idea will have on the jobs of the people in his British Columbia colleague's riding.


Some hon. Members:: Oh, oh!


Herbert Eser (Herb) Gray: He has not responded to my point about the impact on jobs. He wants a more severe effect on those jobs in British Columbia than anything that we are doing in terms of a reasonable enforcement of our existing law. As far as we are concerned the best way to deal with my hon. friend's concern is for the Japanese to respond to our very reasonable approach in a way that will assist our industry to continue its restructuring-


Flora Isabel MacDonald: Tell us about the unemployed in Windsor.


Herbert Eser (Herb) Gray: -and move toward substantial content in Japanese vehicles in a way that recognizes the basic strength and potential of our industry and the workers in it.

May 31, 1982
Oral Questions


PRESENCE IN GALLERY OF MINISTER OF FOREIGN AFFAIRS AND CO-OPERATION OF THE REPUBLIC OF BURUNDI
Madam Speaker:: I wish to draw the attention of the House to the presence in our gallery of His Excellency Mr. Edouard Nzambimana, Minister of Foreign Affairs and Co-operation of the Republic of Burundi.


MEDICAL CARE
Mr. Rod Murphy (Churchill):: Madam Speaker, I have a question for the Minister of National Health and Welfare. However, she is not in the House today, and we have been told by an assistant in her office, Miss Anita Biguzs, that we will no longer know when the minister is coming to the House unless we give her the content of our questions ahead of time.


Some hon. Members:: Shame!


Margaret Anne Mitchell: That's undemocratic and it is disgusting.


Rodney Edward Murphy: Therefore, under those circumstances, 1 will put my question to the Prime Minister. Right now we have five provinces that are levying user fees. We have three provinces that are charging a premium increase each year for medicare, and $55 million is coming from Canadian taxpayers' pockets for extra billing. Will the federal government support universal health care services by amending the Medical Care Act to eliminate all forms of extra billing?


Pierre Elliott Trudeau: Madam Speaker, I would not want to pre-empt the minister on this question. However, I have to remind the hon. member of the New Democratic Party that the law concerning medicare was adopted in this House after agreement with the provinces. The hon. member will recall that the Constitution does not authorize the federal government unilaterally to legislate on the delivery of medical services. The law was a compromise reached with the provinces. I personally think that the minister was very successful in moving the provinces closer to our view on this matter that extra billing should be frowned upon. If we could legislate that, I would be happy to hear from the New Democratic Party under what section of the Constitution they would contemplate legislation.


REQUEST THAT GOVERNMENT TAKE ACTION
Rodney Edward Murphy: Madam Speaker, my supplementary question is directed to the Prime Minister. 1 should like to quote from the absent Minister of National Health and Welfare who is on record as saying, "if you allow surcharges to the system, very soon medicare will collapse". Despite all legal
arguments, we have had the minister saying on a number of occasions that she will not allow extra billing. If that is the position of the government, if that is really the position of the government, then do not call conferences; start the constitutional process.


Pierre Elliott Trudeau: Well, Madam Speaker, the hon. minister is on record, as is the government, as feeling that extra billing is regrettable and should be dispensed with.


An hon. Member:: Withhold it.


Pierre Elliott Trudeau: I put the question to the hon. member that the Constitution does not permit us to legislate in this area. We can only proceed by agreement. I have heard a member of the New Democratic Party shout across the way that we should withhold the money. If that is the position of the New Democratic Party, no doubt it would have effect. It would destroy medicare and extra billing with it. If that is the policy of the hon. member, or if they have some secret approach to the Constitution which will permit us to legislate in areas of health delivery, I would like to hear them.


PUBLIC WORKS
Mr. Jean-Robert Gauthier (Ottawa-Vanier):: Madam
Speaker, my question is directed to the Minister of Public Works. In almost all ridings and municipalities in Canada there is federal property in respect of which the Minister of Public Works annually makes a grant in lieu of real property taxes. The House will recall that Bill C-4 passed on July 15, 1980. The House will also recall that a task force, chaired by Mr. Isodore Pollack, was formed and was asked to consider two questions which arose in committee study-first, the right of municipalities to appeal from the discretionary powers of the minister in respect of assessed value of properties and, second, the right to appeal from certain exclusions from grants in lieu of taxes.
Could the minister tell us whether the task force has made its final report? If it has, could the minister tell us what conclusions were reached and what measures he intends to take to implement the recommendations?


Hon. Paul J. Cosgrove (Minister of Public Works):: Madam Speaker, I thank the hon. member for the question. It will give me an opportunity of responding to other members on both sides of the House who took an interest in the legislation and the issues which were raised in the question. That study has been prepared and made available to my ministry. In committee deliberations I indicated that that report would be made available to the committee. I intend to make it available to the committee, and all hon. members will have an opportunity to
May 31, 1982

look at the results which flow from intensive discussions with the provinces and many municipalities.


NUCLEAR ENERGY
Mr. G. M. Gurbin (Bruce-Grey):: Madam Speaker, in the absence of the Minister of Energy, Mines and Resources I should like to direct my question to the Prime Minister. During the time that the National Energy Program has been in place and the minister has been directing his efforts toward redressing some of the very serious difficulties which have been created by the program-and we hope that we will hear some answers tonight, some things which will redress some of the problems-there has been another sector of the Canadian energy industry which has been in serious difficulty, that is, the Candu, or the Canadian nuclear industry system. The Romanian reactor deal has been lost, and now it appears as though the Mexican reactor deal is doomed. Does the Prime Minister know what is the status of our potential sale to Mexico of the Candu reactor? Does he have any idea what the impact of the loss of that sale will be on the Canadian nuclear industry?


Pierre Elliott Trudeau: Madam Speaker, 1 do not believe the hon. member is stating the facts correctly when he says that the Romanian deal has been lost. There have been some economic difficulties in Romania, as we know, but that does not mean that the contract has been lost. The Canadian bid is still there, the contract is still there, and that reactor has not been lost any more than the Mexican one has. In the case of the Mexican government, I understand that it has delayed the date of decision and purchase, but we on this side are not considering those contracts lost.


FUTURE OF INDUSTRY
Gary Michael Gurbin: Madam Speaker, my supplementary question is also directed to the Prime Minister. 1 have to say that all reports we on this side are able to obtain indicate that indeed both those sales are doomed. In the face of that, there are somewhere between 40,000 and 60,000 skilled and highly technical jobs at stake in the Canadian nuclear industry. If the Prime Minister checks, I think he will know that those jobs are very much at stake right now unless something happens in the near future. Is there anything on the threshold or on the near horizon which he can see which will answer the problem and help the Canadian nuclear industry to survive?


Pierre Elliott Trudeau: Madam Speaker, the Minister of State for International Trade, the Minister of Energy, Mines and Resources and myself in our
Oral Questions
travels in foreign countries have pushed the sale of the Candu. We have in some cases signed contracts. I repeat that it is not our position, as it seems to be that of the hon. member and his party, that these contracts are doomed. Before giving up on the contracts which we already have and declaring them doomed, I think the hon. member should try to encourage and support us in making those contracts effective, rather than asking us what we will do for an encore.


AUTOMOTIVE INDUSTRY
Mr. John Bosley (Don Valley West):: Madam Speaker, I have a question which is supplementary to the earlier one of the hon. member for Perth, for the Minister of Industry, Trade and Commerce. He indicated in response to that hon. member that his estimate of lost car sales as a consequence of capital allowance changes was exaggerated. My question to the minister is simple. Would he please tell the House how many car sales and jobs, in his opinion, have been lost as a consequence of that budget measure? Given that there have been job losses in the minister's own view, why does he continue to support that measure?


Herbert Eser (Herb) Gray: Madam Speaker, I tried to get across that I did not accept the premises of my hon. friend's question because the analysis of the Minister of Finance and his advisers indicates that the impact is not what the industry had originally feared. Therefore, the approach of my hon. friend in his question is not one I would accept.


POSITION OF MINISTER
John William Bosley: Madam Speaker, I repeat my question to the minister; it is a simple one. Does the minister believe that there have been any job losses and car sale losses as a consequence of the capital allowance change? If he believes that there have been, what is the degree, or is he saying to the House that no jobs and no sales have been lost as a consequence?


Herbert Eser (Herb) Gray: Madam Speaker, we are in a situation where the over-all market for motor vehicles has declined in size in both the United States and Canada. There are a number of complex factors involved. The industry continues to argue that it is having some effect, and the analysis we have available indicates that, if the effect is there at all, it is minimal. I think this continues to be a matter of debate.

May 31, 1982
Oral Questions


ENVIRONMENTAL AFFAIRS
Gordon Edward Taylor: Madam Speaker, in the absence of the Minister of the Environment who is responsible for national parks, I direct my question to the first acting minister, the hon. Minister of Fisheries and Oceans. For two months or more the people of Banff have been very concerned, to put it mildly, about a parasite in their water which causes diarrhoea, vomiting, cramps, and sometimes swollen limbs. This parasite is carried by beavers which are a protected species. I advised the minister about this about a month ago. What action is the government taking to make the water safe?


Hon. Romeo LeBlanc (Minister of Fisheries and Oceans):: Madam Speaker, if I may, I will take notice, of what appears to me to be a slightly technical question, for the Minister of the Environment. I will try to bring the hon. member an answer perhaps tomorrow.


Gordon Edward Taylor: Madam Speaker, I thank the minister. I notified the office of the Minister of the Environment about the question. I thought he might have given the first acting minister the information.


NECESSITY FOR FILTRATION PLANT
Gordon Edward Taylor: Madam Speaker, regulations in the Alberta department of the environment give the department the authority to order a filtration plant where the water is of poor quality or where there is a dangerous parasite in the water. This is seldom used, however, because town councils are just as anxious as the department to keep their water supply good. Will the government, since it is responsible for the townsite of Banff, order a filtration plant or instal a filtration plant in order to protect the water for local inhabitants and also for the thousands of tourists who will shortly be coming to that area?


Roméo LeBlanc: Madam Speaker, I will certainly bring that to the minister's attention.


AIRPORTS
Raymond John Skelly: Madam Speaker, my question is directed to the Minister of Public Works. Last week, the government decided to sell off one third of the expropriated land at Mirabel, that is, 35,000 acres out of a total of 96,000. What is the government going to do with the remaining 60,000 acres? Why not get rid of the rest as well?


Paul James Cosgrove: Madam Speaker, as many hon. members know better than I, the decision of the government followed a year-long study by a commission, a company established to take a look at land uses around the airport. It was as a result of those intensive studies and negotiations with all persons affected concerning the airport lands that there was a recommendation that all of the lands, in light of the experience at the airport over the last few years, were not required. Some lands were to be returned to private ownership and other lands were retained on the advice of experts, for example, for the ministry of transportation, who indicated that in order to serve two purposes, that is, to permit the airport to be established, without terrible inconvenience or safety hazard to the people in the area, a certain amount of the acreage could be released back to private ownership, which decision was finally reached.


Raymond John Skelly: It is a very surprising response, Madam Speaker, especially to fall back on the defence that a year-long study was conducted, considering the sabotage done to the Kent Commission. The government really should not have any qualms about proceeding in a more equitable manner, at least in one case.


SELL-BACK PRICE OF EXPROPRIATED LANDS
Raymond John Skelly: I would like to ask the minister a supplementary question. The proposal of the government is to sell back the property at today's market prices, less 15 per cent. In the interest of fairness, would the minister not be prepared at least to allow those individuals whose land was expropriated to purchase back that land at the price at which their land was expropriated plus the accumulated interest?


Some hon. Members:: Hear, hear!


Raymond John Skelly: Fair ball.


Paul James Cosgrove: Madam Speaker, one of the reasons the study did take a year's time was in order to be fair and to find a formula which was, in fact, fair. It was no easy task to hit upon a formula which could be fair to the taxpayer of Canada in general, that is, the person putting up the funds for acquisition of the property, and which would spell out to whom, how, and under what basis we could manage a resale of the property to people in the area. That was difficult, and we did attempt to be fair. It was a complicated question, taking into account assessment of market values. That was a matter involving not only technical advice but also some appreciation by people in the area. That is why we had representatives from a broad spectrum of the community on that committee trying to decide what would be a fair formula to people in the community.
May 31, 1982


THE ECONOMY
John Albert Gamble: Madam Speaker, my question is directed to the Minister of Finance. There are millions of Canadians who are suffering under severe economic pressures, but we are told that nothing in the way of a new initiative of an economic nature will be taken by the government until after the Versailles Conference. Surely the government has contingency plans in place in the event that some of the actions that it intends to take at that conference are not supported by other international governments. Why does the government today not announce what it plans to do within the framework of its power so that Canadians, as soon as possible, can see some hope and expectation for the future?


Allan Joseph MacEachen: Madam Speaker, the hon. member's question is very general indeed, and I am at a loss, because of its general character, to respond to it with my usual specific
answers.


Some hon. Members:: Oh, oh!


Michael Holcombe Wilson: Back to the drawing board, Allan.


Allan Joseph MacEachen: Madam Speaker, we are attending the economic Summit at Versailles and we will be discussing the world economic situation with other Summit members. If, as a result of that meeting, further initiatives should be taken, then, of course, the government would announce them.


Arthur Ronald Huntington: Retired before you start.


Allan Joseph MacEachen: I am not quite prepared to admit to the hon. member that we are just waiting for the Summit, in that
case.


Steve Eugene Paproski: Maybe you should go to Fatima, never mind
Versailles.


Allan Joseph MacEachen: Where?


Pierre Elliott Trudeau: You are the guy who should go to Fatima.


POSITION OF MINISTERIAL ADVISERS
John Albert Gamble: The reason the question is general, Madam Speaker, is because the problem is general, brought about by general misadministration by the government. The one thing the people do not have is hope and expectation for the future, because there has not been one sign of something-


Madam Speaker:: Order, please. The hon. member has been allowed to ask a supplementary question. The first question should obviously be short, but the supplementary should be even shorter.


John Albert Gamble: The best news that could be given, Madam Speaker, would be the resignation of the minister. In default of
Oral Questions
that-and I am sure he will not give us that kind of good news-will the minister at least announce that the general incompetents, those people within his department who brought about that calamity on November 12, have been replaced by people who have some expectation of a bright future for Canadians?


Allan Joseph MacEachen: I think, Madam Speaker, that the hon. member has a very simple attitude toward the current economic situation. If it were simply a question of bad policies in Canada and bad officials and a bad minister in Canada-


William Herbert Jarvis: Mostly the minister!


Allan Joseph MacEachen: -then I would wonder why the unemployment level in the United States is about the same as it is in Canada. I would wonder why the unemployment levels in the OECD area are increasing and are projected to increase, why inflation is a problem in almost every industrialized country-


Arthur Ronald Huntington: Why can we not have energy self-sufficiency?


Allan Joseph MacEachen: -and why the recession exists all over the world. Surely the power of the Minister of Finance and his officials is not great enough to bring about such economic chaos in every part of the world.


AVIATION INDUSTRY
Hon. Allan B. McKinnon (Victoria):: Madam Speaker, my question is directed to the Minister of Industry, Trade and Commerce, who might recall that on February 11 I asked him the following question:
Could he inform the House how much research and development money and other funds went into the stretched version of the Challenger jet before the project was cancelled with a loss of some $500 million worth of orders?
The minister replied that he would "be happy to obtain that information and provide it to my hon. friend as soon as possible." Well, his "hon. friend" has been waiting for three and a half months, and 1 would like him to narrow the date down a bit.


Herbert Eser (Herb) Gray: Madam Speaker, I apologize for not having provided the information to him by now. I will try my best to have it for him by the end of the week.


DEBT STATUS OF CAN ADAIR
Allan Bruce McKinnon: Perhaps while the minister is getting that information for me by the end of the

May 31, 1982
Oral Questions
week, he could explain to the House the debt status of Cana-dair at the present time. I understand that the government is giving it letters of comfort which have enabled it to borrow something over $1 billion. I wonder if the minister could tell the House, within $100 million, how deeply in debt Canadair is at the present time.


Herbert Eser (Herb) Gray: I will be happy to do that, Madam Speaker. Not long ago, the House, in the supplementary estimates, approved authority to the government to guarantee up to $1.3 billion in loans by private sector companies to Canadair to help provide operating capital for the carrying out of its projects.


PROPOSED NATURAL GAS PRICE INCREASE IN ONTARIO
Mr. Geoff Scott (Hamilton-Wentworth):: Madam Speaker, my question is directed to the Minister of Consumer and Corporate Affairs. There are vast numbers of consumers in the province of Ontario who are angry about a proposed huge increase in the price of natural gas after the Government of Canada implored people to convert from oil to gas for home heating fuel. I recognize that permission for Consumers' Gas to raise its rates comes under Ontario provincial jurisdiction, but can the minister say whether there is anything that he can do to temper this increase to these consumers?


Hon. Andre Ouellet (Minister of Consumer and Corporate Affairs):: Yes, Madam Speaker. I suggest that the hon. member who asked the question and who is a distinguished member of the Progressive Conservative Party, speak to his friends who are running the government in Toronto.


REPRESENTATIONS TO ONTARIO ENERGY BOARD
Geoffrey Douglas Scott: Madam Speaker,
I quite realize that Ontario consumers are affected by the government of this province, but will the Minister of Consumer and Corporate Affairs, as a federal minister, also protecting the interests of consumers of this province, join me in persuading the Ontario Energy Board to reduce these proposed gas rates in the interest of keeping prices down and combatting inflation?
[ Translation]


André Ouellet: Madam Speaker, if the hon. member believes that my support could be of any help, with pleasure.


PRIVILEGE
Madam Speaker:: I would like to rule on the question of privilege which was raised by the hon. member for York East (Mr. Collenette). The hon. member raised a question of privilege alleging that on May 25 the hon. member for Leth-bridge-Foothills (Mr. Thacker) imputed motives to Liberal backbenchers.
I just want to say that disrespectful or offensive language is covered by Standing Order 35 and that the unparliamentary words must be brought to the attention of the House by way of a point of order, not by way of a question of privilege. Therefore I cannot accept that the hon. member had the basis for a question of privilege.
Having examined what might have been a point of order, I looked at the words used by the hon. member for Lethbridge-Foothills. I found that he was not exactly addressing his remarks to any member individually. Erskine May says at page 430 of the Nineteenth Edition:
Expressions which are unparliamentary when applied to individuals are not always so considered when applied to a whole party.
In the words of my predecessor, Speaker Lamoureux, I would say that these kinds of exchanges are part of the political life of the House. However, I would urge hon. members to try to use language that is acceptable to all members on all sides of the House.



ROUTINE PROCEEDINGS


Mr. Pinard:: Madam Speaker, I rise on a point of order. I have had consultations with my colleagues on the other side with regard to statements by ministers. 1 would like a House order to ensure that at eight o'clock we will be in a position to revert to statements by ministers in order to allow the Minister of Energy, Mines and Resources to make a statement at eight o'clock this evening. If you seek unanimous consent, Madam Speaker, I think you will find it, following consultations I had with my colleagues.


Madam Speaker:: Does the House give its unanimous consent to revert to statements by ministers at eight o'clock this evening?


Some hon. Members:: Agreed.
May 31, 1982

[ Translation]


ESTABLISHMENT OF SPECIAL COMMITTEE ON STANDING ORDERS AND PROCEDURE
[Stage Direction]
On the order: Government Notices of Motions:
May 28, 1982-The President of the Privy Council:
That a Special Committee, consisting of, notwithstanding any Standing Order, 20 Members, to be named at a later date, be appointed to consider the Standing Orders of the House and procedure in both the House and its committees;
That the Committee be authorized to include in its interim and/or final reports drafts of proposed permanent or temporary Standing Orders drawn to give effect, if concurred in by the House, to any permanent or temporary change or changes proposed by the Committee; and
That the Committee have all the powers granted to Standing Committees by Standing Order 65.
Madam Speaker:: Pursuant to Standing Order 21(2), this notice of motion is transferred to and ordered for consideration under Government Orders later today or at the next sitting of the House.


MISCELLANEOUS PRIVATE BILLS AND STANDING ORDERS
Jean-Robert Gauthier: Madam
Speaker, with the unanimous consent of the House I would like to move, seconded by the hon. member for Nepean-Carleton (Mr. Baker):
That, pursuant to the provisions of Standing Order 99, the petition of J. Paul Robert of the City of Ste-Adele, in the province of Quebec, praying for the passage of an act to revive and to provide for the continuance of E.G. Klein Limited, filed after the time limit specified under Standing Order 90, be referred to the Standing Committee on Miscellaneous Private Bills and Standing Orders, together with the two hundred and forty-fourth report of the Clerk of Petitions thereon, presented to the House on Thursday, May 20, 1982, for any recommendations the committee deems advisable.


Madam Speaker:: Does the hon. member have unanimous consent to move his motion?


Some hon. Members:: Agreed.


Madam Speaker:: Is it the pleasure of the House to adopt the motion?


Some hon. Members:: Agreed.


[Stage Direction]
Motion agreed to.

[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
Order Paper Questions
will be answered today: Nos. 4,117, 4,125, 4,213, 4,214 and 4,296.


Mr. Cossitt: 1.	Did the National Capital Commission at any time state that the cost to the taxpayers of the Winterlude Festival was approximately $350,000?
2.	Did the figure include overtime to employees of the Leisure and Culture Branch and, if not, was that figure estimated to be approximately $100,000?
3.	What was the estimated cost of publicity and promotion and was it approximately $100,000?
4.	What was the cost of piped music and lighting the canal and was it approximately $ 100,000?
5.	What was the estimated cost of all maintenance and was it approximately $150,000?
6.	Were all the extra figures included in the original estimate and, if not, for what reason?


Paul James Cosgrove: 1. Yes
at a press conference held January 17, 1982. Later, the estimate was raised to $473,000.
2.	No. Recreation and Culture Division overtime estimated at $60,000.
3.	Estimated at $100,000.
4.	Cost $30,000.
5.	Estimated at $150,000.
6.	Yes, in revised estimate, except for overtime under 2 above.


Mr. Herbert: Does the Foreign Investment Review Agency, when receiving applications from foreign-owned trucking companies, require that applicants indicate if they are prepared to use Canadian chartered banks and Canadian-owned advertising agencies and to direct their purchasing to Canadian-owned suppliers?


Herbert Eser (Herb) Gray: In so
far as the Foreign Investment Review Agency is concerned:
The Foreign Investment Review Agency, when receiving applications from foreign-owned trucking companies, does not require that applicants indicate if they are prepared to use Canadian chartered banks and Canadian-owned advertising agencies. Nor are applicants required to direct their purchasing to Canadian-owned suppliers.
However, the effects of a foreign investment proposal on the utilization of parts, components and services produced in Canada are required to be taken into account in the determination of whether or not the proposal meets the test of significant benefit to Canada. Accordingly, all applicants, irrespective of the industry sector to which their proposals apply, are required to specify their sourcing intentions. There are no special policies which apply to the trucking sector.

May 31, 1982
Order Paper Questions SECURITY CLEARANCE FOR PUBLIC SERVICE


Mr. Robinson (Burnaby): 1.	How many public service positions require security clearance and what percentage of the total positions does this represent?
2.	What are the criteria currently used to determine which positions in the public service require security clearance?
3.	Since 1977, by year, how many security screening requests went from departments and agencies to the security service?


Yvon Pinard: 1.
Personnel security clearance programs are prepared by departments and agencies to meet their own security requirements. As these requirements vary in intensity from one department/ agency to another, so will the number of positions affected.
2.	A security clearance is mandatory in positions where an employee requires access to classified material in the discharge of his/her duties.
3.	1977-71,689
1978-	67,261
1979-	60,965
1980-	56,199
1981-	59,514
A large proportion of these figures represents rechecks or updating of an earlier screening process; departments/agencies generally review security clearances at five-year intervals. The Security Service is not required to make a statistical distinction between a first screening and an updating process.


Mr. Robinson (Burnaby): What are the criteria currently used to determine which government documents should be classified?


Yvon Pinard: Top
secret: Documents, information and material of paramount security importance, the unauthorized disclosure of which would cause exceptionally grave damage to the nation.
Secret: Documents, information and material, the unauthorized disclosure of which would endanger national security, cause serious injury to the interest or prestige of the nation, or would be of substantial advantage to a foreign power.
Confidential: Documents, information and material, the unauthorized disclosure of which would be prejudicial to the interests or prestige of the nation; would cause damage to an individual; and would be of advantage to a foreign power.
Restricted: Documents, information and material are to be classified restricted when they should not be published or communicated to anyone except for official purposes, and when they are not classified in any of the three previous categories.


Mr. McKinnon: Did the Department of National Defence place a $753,100 contract with Diemaco Inc. for in-service small arms publications under contract number MC50.2550409 (2MC81-02092) and, if so, what types of small arms will be covered in the publications?


Hon.   J.-J. Blais@Minister of Supply and Services: Yes. The Department of Supply and Services awarded a contract on behalf of the Department of National Defence, to Diemaco Inc. in the amount of $753,100. The type of small arms covered in the publications is: pistols and revolvers, rifles, submachine guns, machine guns, small arms weapons turrets and mounts, small arms accessories.


Madam Speaker:: The questions enumerated by the Parliamentary Secretary have been answered.


David P. Smith: Madam Speaker, would you be so kind as to call starred question No. 4,298?


Mr. McGrath: 1.	On what date was the enquiry ordered into the circumstances surrounding the sinking of the Arctic Explorer?
2.	Did the Arctic Explorer sink some time during the morning of July 3, 1981 and, if so, for what reason did the enquiry into the incident not begin until April 27, 1982?
3.	Were SOS distress signals received by the Canadian Coast Guard between 0000 hours and 2400 hours on July 3, 1981 and, if so, what action was taken in response to the signals?


Jesse Philip Flis: Madam Speaker, the reply to question No. 4,298 of the hon. member for St. John's East (Mr. McGrath) is as follows:
1.	July 9, 1981.
2.	The vessel sank on July 3, 1981. The Coast Guard required the normal 2 to 3 months to prepare technical evidence to be presented at the formal investigation. The usual practice, which was followed in this case, is for the Chief Justice of the province concerned to then nominate a judge to be commissioner. Because of the heavy court calendars of the Newfoundland judges at the time, there was difficulty in providing the nomination.
3.	The answers to this question and all others related to the sinking will be examined in public by the Court of Formal Investigation currently sitting in St. John's, Newfoundland. Therefore, it would not be advisable for me or anyone else to make further comment while the investigation is proceeding.
May 31, 1982


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


Yvon Pinard: That a Special Committee, consisting of, notwithstanding any Standing Order, 20 Members, to be named at a later date, be appointed to consider the Standing Orders of the House and procedure in both the House and its committees;
That the Committee be authorized to include in its interim and/or final reports drafts of proposed permanent or temporary Standing Orders drawn to give effect, if concurred in by the House, to any permanent or temporary change or changes proposed by the Committee; and
That the Committee have all the powers granted to Standing Committees by Standing Order 65.


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


Some hon. Members:: Agreed.


Madam Speaker:: Agreed. The parliamentary secretary to the President of the Privy Council.


Yvon Pinard: Madam Speaker, I was promoted two and a half years ago! 1 realize you spoke as you did out of the force of habit, because usually at this point my parliamentary secretary rises to answer the questions on the Order Paper.
I would like to say that I had consultations-

I had consultations with the House leaders of the opposition parties at the end of last week. If you seek unanimous consent, Madam Speaker, to get the approval of this motion without debate, I will believe you will receive it. I know that the deputy House leader of the Conservative Party has a question to ask regarding staff, and 1 will be pleased to answer the question before unanimous consent is sought.


Mr. Doug Lewis (Simcoe North):: Mr. Speaker, our party is prepared to grant unanimous consent to the passage of this motion on the understanding that Standing Order 65 is broad enough to allow the committee to have whatever staff it requires to deal with the matter. I believe the government House leader is prepared to put on the record exactly what staffing facilities will be available to the committee.


Yvon Pinard: Mr. Speaker, as I indicated earlier to my colleague, the committee will have the same advantages as
Urea Formaldehyde Insulation Act
standing committees under Standing Order 65. As 1 told him, the intent is to allow parliamentarians to first have input. We would like to see it as a committee of parliamentarians, mostly backbenchers. If during the process, whether it be two weeks, a month or more down the road, the committee requires technical assistance and requires the right to hire specialized staff, as I told the hon. member, we will consider that request from the committee very seriously. However, in the first instance, we do not intend to give that specific power to hire technicians. Once again, we want it to be a committee of parliamentarians. We have knowledgeable parliamentarians who should first make their input and recommendations on changes in order to make this Parliament more relevant, modern and human.


The Acting Speaker (Mr. Ethier):: Is it the pleasure of the House to adopt the motion?


Some hon. Members:: Agreed.


[Stage Direction]
Motion agreed to.

[Stage Direction]
The House resumed from Monday, May 10, consideration of the motion of Mr. Oueliet that Bill C-109, to provide for payments to persons in respect of dwellings insulated with urea formaldehyde foam insulation, be read the second time and referred to the Standing Committee on Health, Welfare and Social Affairs.
Hon. James A. McGrath (St. John's East):: Mr. Speaker, this is a very important bill. I should declare at the outset that I may be in a conflict of interest situation, as I have a residence that has had urea formaldehyde foam installed in it as insulation. Consequently, I am one of the parties involved and affected, although 1 doubt if I will be one of the persons who will qualify for assistance under the bill because the parameters are so narrow that less than 20 per cent of the houses insulated with urea formaldehyde foam will qualify for assistance.
It is not because I am one of the affected parties, but because there are over 100,000 people out there who are affected and will get virtually no assistance from what was a bad mistake in judgment by this government, that 1 would like to zero in on this matter today in my intervention in this debate.
It is perhaps necessary and well to go back on the events leading up to the ban that was announced by the government in December. Back in May, 1977, the government was being advised through one of its deputy ministers that it should proceed cautiously before approving this material for use in

May 31, 1982
Urea Formaldehyde Insulation Act
home insulation. One of the problems that was identified then by Dr. Ian Efford was that the standards failed to prescribe application procedures critical to the foam's effectiveness. He went on to state, as a result, that no federal department should use the product.
That is very interesting and very germane to my argument, Mr. Speaker, because this product was approved by Canada Mortgage and Housing Corporation for use under the government's home insulation program, the CHIP program, in September of 1977. In other words, the government went against their own advisers. According to the advice they received, it was not good enough to be used in federal government departments. Indeed, there was some question as to whether or not the standards were adequate with regard to how the stuff was to be applied, and, indeed, whether or not there were standards governing application of the material. Notwithstanding that, there were the warnings that the government had, even going back beyond that to April, 1977, when the then minister was advised that there were problems with regard to shrinkage, degradation, the potential of UFFI causing metal corrosion and wood rotting. Because of that, the minister of energy at the time was advised not to recommend the product for use under the CHIP program. Yet it was recommended for use under the CHIP program and was given the seal of approval of Canada Mortgage and Housing Corporation in September, 1977.
There is a combination of errors here that has brought us to this particular situation at this point in time. First of all, we have the government closing its ears, failing to accept the technical advice it was getting from within the government. Secondly, this was a program that was and still is applied across the country without any statutory authority or any statutory provisions. In other words, there is no statute governing the Canadian Home Insulation Program. As a consequence of that, the CHIP program in its early days was responsible for a number of fly-by-night operators. These people knew absolutely nothing about the insulation business, being hastily formed in order to cash in on what was perceived as a bonanza.
We had this dangerous combination of inexperienced insulators, using a material that had inadequate standards for application. That is the combination which I believe has in large measure resulted in the problem that we are faced with today. It is a serious problem, Mr. Speaker, that is facing many home owners today. We do not know what the guidelines are and we will not know until presumably the bill gets to committee. And we may not know even in committee, given the track record of this government. We may not know what the guidelines are until the bill receives third reading and becomes law. Of course, the guidelines are critical in telling us how effective and how fair and just the bill will be in its application. We do not know that.
What we do know is that less than 20 per cent of those affected will qualify for the payment of the $5,000 or up to $5,000 that they can receive under the bill. What about the other 80 per cent? These are people who do not necessarily have a health problem or they have a health problem that they cannot prove meets the criteria set out under the regulations.
They may not have a health problem, but they have an economic problem of enormous proportions. They face the prospect of seeing their life savings-and a home investment usually represents the life savings of a family-depreciate to the point where they cannot sell their homes, where they have difficulty in obtaining conventional mortgages for the home. Up to now they have not been able even to make the case with municipalities that they should receive some consideration in terms of municipal property taxes, although I believe there is a movement in that direction.
So, Mr. Speaker, in my opinion the government has not only a moral responsibility. Given the fact that the minister responsible for housing went against the advice within the government in September, 1977 and approved urea formaldehyde foam to be used under the CHIP program, I believe the government has a legal obligation as well. Once we get to committee or beyond committee and have the guidelines, I suspect that this will be a matter for the courts to decide ultimately. Secondly, the legal responsibility flows from the government's ignoring the advice that came in the first instance, by the way, from the National Research Council in 1978, and from the government's subsequent decision to approve it, as I say, for use under the CHIP program.
By its decision to ban the product in December, 1980, the government assumed responsibility not only for the protection of the health of those using it but also to protect them from financial loss. That is a responsibility to the more than 100,000 Canadians who had this material in their homes.
The bill we have before us today not only fails adequately to address the health problem but totally ignores the very serious and very substantial economic problem created for that 80 per cent of the more than 100,000 homes which will not qualify for assistance under the bill. Incidentally, it should be said in passing that estimates of the number of homes which have had urea formaldehyde foam insulation installed range from 85,000 to a quarter of a million, so we can take our choice of any figure between 85,000 and 250,000 and somewhere between is an accurate figure for the number of homes affected in this country.
Of course, we are not even talking about public buildings, nor does the bill address itself to apartment buildings. That is another problem in itself and one which certainly will have to be addressed, because once we lay emphasis on the problem in terms of addressing it by legislation with respect to the health problem, then that, of course, has to be applied to other buildings as well such as public buildings, apartment buildings and motels and hotels. However, as I said, this does point out what I consider to be a very serious problem.
Was the government right back in December, 1980 in banning urea formaldehyde foam insulation once it had given the material its seal of approval under CMHC standards for use under CHIP? Did the government fully realize the consequences which would flow from its action? I submit that even
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to this day the government still does not appreciate the consequences which have flowed from its decision to ban urea formaldehyde foam insulation back in December, 1980, as evidenced by its failure to address the economic problems as well as the health problems facing those who have urea formaldehyde foam insulation in their homes.
The president of the Canadian Home Insulation Contractors' Association said on May 10: "The mass hysteria that has been created out there has created problems for everyone." I use that quotation advisedly because I suspect there is not a region of this country where a legitimate contractor involved in the home insulation business has not gone under as a consequence of this, because urea formaldehyde foam insulation was the prevalent material used by most legitimate insulators across the country-and I underline and emphasize the words "legitimate insulators"-who were doing an adequate job. They were using urea formaldehyde foam, and as a consequence of the government's decision they were forced out of business. Hundreds, and perhaps thousands, of Canadians lost their jobs as a consequence, so everyone has been affected. Everyone has been hurt.
I am not suggesting for one moment that the government was wrong in making the decision it made back in December of 1980. We will have to wait until the minister comes before us in committee where we will have an opportunity to question him in greater detail. What I am saying is that the government has to take full responsibility for its decision. It has to take full legal as well as full moral responsibility and, in so doing, it has to address the serious economic problems it has created for over 100,000 home owners in this country, a disproportionate number of them in the minister's own province of Quebec. That is my main concern.
I listened with interest to the minister, and if indeed the government was anxious to get this bill out, I just wonder why it waited so long to resume the debate at second reading. Perhaps the minister is trying to drag out second reading debate until we receive the final report of the three-man committee of inquiry which was established under the Hazardous Products Act. It is interesting that that committee has not issued its final report. The committee is still in the process of preparing its final report to the government. We have received a preliminary report. It is conceivable-indeed, it has been predicted-that that committee will criticize the government and say that the government was wrong to ban the use of urea formaldehyde foam insulation in the first place. Whether the committee will do that, of course, remains to be seen, but it seems to me to be passing strange that we as legislators would be asked to give second reading to a bill on which the jury has not come in. In effect, that is what this three-man investigating committee set up under the Hazardous Products Act is.
In any event, given the fact that the chairman of that committee is well known to the minister because he was the minister's campaign manager and there is a very close relationship there, I suspect that the report of the committee and the minister's program with respect to the bill will operate in tandem.
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Having said that, I think it is important for us to make the point that we are concerned about the effect of the government's ban on the investments of thousands of Canadians who are struggling with homes they cannot sell. They are stuck with homes on which they are even finding it difficult to get conventional mortgages. Given our responsibility to these people, it certainly is incumbent upon the government to give us an undertaking, before second reading, that it will at least tell us in the committee just exactly what the guidelines are. Is the minister prepared to give the House that undertaking? Is he prepared to tell the House, before third reading of this bill, that the House will know exactly what the regulations are with respect to the application of the financial assistance provisions of the bill? It is absolutely critical that we know that in order to determine that those who are to be assisted will be assisted as justly as possible and there will be no discrimination with respect to any consideration.
In addition, I believe the government also has a very serious obligation to tell the House exactly what it feels is its responsibility to those who do not have health problems as a consequence of urea formaldehyde foam insulation, and I am one of them. There is no problem in my home. I do not live there all year round. It is in my constituency, but I have no problem there. Indeed, the insulation has worked very well. It has served me very well, but if I were attempting to sell my home, I would have to state that it has urea formaldehyde foam insulation because that is now a regulation of most real estate companies in the country. Of course, the minute that goes down on the sales contract, 1 am out of luck. The property value is gone. I could not give my house away once people knew it had urea formaldehyde foam insulation in it. I think that is a problem.
My good friend, the hon. member for Gloucester (Mr. Breau), usually makes good contributions in the debates of this House. I suspect many of his constituents have urea formaldehyde foam insulation in their homes, and the majority of them, as the hon. member well knows, will not qualify for assistance under this bill. However, they will continue to have very serious problems, and I ask the hon. member to join with me in a bipartisan approach to this problem so that we can help all of our constituents.


Margaret Anne Mitchell: Mr. Speaker, there are many four letter words in our language which are judged to be obscene. I think UFFI, the acronym for "urea formaldehyde foam insualtion", has been added to the list of dirty words in the English language. As we know, urea formaldehyde foam insulation is a dirty, poisonous substance which has been used in some 100,000 homes by people who thought they were using a reliable, safe product recommended by the federal government and sponsored through the CHIP home insulation program.
As we also know, many members of families have suffered very serious health problems as a result of the use of the foam. Others who have not yet had health problems are afraid that,

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with further deterioration of the foam, the formaldehyde gas will be released. We know that under certain weather conditions, such as the high humidity of the west coast, it is possible that there will be health problems in some families in the future.
Some people have a particular sensitivity to urea formaldehyde gas and there is particular risk for infants, elderly people and people with asthmatic conditions, as well as women who spend all day in their homes, those who do not go out into the workforce. The effect of UFFI is now recognized as so potentially hazardous that the real estate value of most homes insulated with this substance is nil. 1 have seen cases where it has actually been below zero-where people have received less than the value of the property when the home is insulated with urea formaldehyde.
Not only are urea formaldehyde foam insulation victims worried about health and economic loss, but many have been under extreme stress for almost two years, since they became aware of the problem. They are also angered beyond tolerance by the hypocritical, uncaring attitude of the government that created the problem in the first place. The government, supposedly set up to protect consumers, advocated the use of this substance to insulate homes and to save fuel costs.
A number of years ago the government was warned by its own researchers that this substance was risky and dangerous, and the Massachusetts experience confirmed this. Tests made over the past year also showed a health hazard, yet even today the government refuses to acknowledge the seriousness of the problem and that it is primarily responsible since it permitted this form of insulation to be used. It ignores the obvious and only solution, which is to provide for the removal of this poisonous substance from contaminated homes.
Let me summarize some of the facts we know about urea formaldehyde foam insulation. There are an estimated 100,000 homes in Canada that had urea formaldehyde foam installed in the walls expecting that it would improve the value and make these homes more comfortable. Through the CE1IP program, the federal government is directly responsible for the insulation in at least 25,000 of these homes. In British Columbia, some 8,000 homes have used urea formaldehyde and, as a result, are at risk. People have found that sealing and ventilation techniques do not guarantee that the gases will be contained or removed. The full cost of removing the foam in most provinces is estimated to be around $25,000 per home.
We know that health problems can occur when there is a very low level of urea formaldehyde concentration. The government uses the level of .1 parts per million foam in the air as the minimum level. I have many examples of people who have a doctor's certificate to testify the foam has caused health problems where there has been a much lower level than the .1 part per million. Symptoms caused by UFFI are nose and throat irritation, breathing difficulties, sore throat, dizziness, nausea, vomiting and asthmatic types of attacks.
We know that despite the promises of the Department of National Health and Welfare to keep physicians and medical experts more informed on this issue, even today many doctors are not aware that the symptoms they are diagnosing as
allergies are probably related to this hazardous foam insulation. Urea formaldehyde foam insulation has also been linked to nasal cancer in laboratory rats and mice. There are health hazards that have been substantiated. They are not evident in every home where this foam has been used but they are very serious and are potentially a risk and a worry for most home owners who have used it.
There are structural problems in the homes that have used this type of insulation as well. For example, there are cases where urea formaldehyde foam insulation has been used and the electrical wiring has been corroded. It also creates rot problems. I understand this is particularly prevalent in a climate of high humidity and that means, of course, in the coastal regions of British Columbia. This structural problem leads to potential fires and contributes to shortening the safe lifetime of the house.
In 100 per cent of the 100,000 homes I mentioned, there are very serious Financial problems. Houses with UFFI show a very dramatic loss in value which can only be changed by removing the foam. Real estate agents are asking whether there is UFFI in a house when it is listed for sale or when its value is assessed. As soon as they know that to be the case, the value drops. This is acknowledged by many provincial and municipal governments which are reducing taxes because the value of the property has fallen. It has been suggested that the form for assessing the value of a house insulated with urea formaldehyde foam used by real estate companies will contain a question about this.
Those are some of the symptoms we know of that have created such a serious problem for many Canadian home owners. The problems with this type of foam came to my attention two years ago, as I am sure it did to many other hon. members. I recall a number of very pathetic human situations that raised serious concern in many of us. I recall, for example, an elderly couple who lived in a very wealthy part of Vancouver coming into my office. They had put all their life savings into their home, and it had beautiful antiques, draperies and in fact gold leaf trimming. Because of health problems they had to move into the basement. They were really wrought with anxiety wondering what to do. The woman had a very serious asthmatic condition and was in bed most of the time. Her husband was completely bowed under with worry. They could not move out of the house and they could not live in it.
Another family with young children, where the wife and one baby particularly affected by the gas, lived in a tent in their backyard. Eventually, after the summer was over, they had to sell their home without knowing what would happen. They had no other choice and took a considerable loss. Even now they do not know whether they will be compensated.
Two years ago a man living not too far from my office came in very, very angry. He is still very, very angry. His name is John Owens and he has been very outspoken on this issue. He had not yet been seriously affected, although members of his
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family woke up every morning with nasal congestion. Headaches and nausea were not uncommon, particularly in the wife, who stayed in the home all day. He was angry because the government was doing nothing, and he did not know what to do about his house. Again, he was an average worker who had put all his savings into fixing up his home. He had worked very hard and now his major capital asset was at risk. Added to this was the complete frustration, month after month, indeed year after year, of the federal government simply not taking this problem seriously and doing nothing to help.
Finally, Mr. Speaker, I would just like to read a letter from the Rapanos family of Carnarvon Street in Vancouver. This is what they say:
In the Autumn of 1978 we decided to take what we felt would be a good step to improve our home which was constructed in 1943 and to help protect our family from the future inflation in energy costs. The CHIP programme was available to provide a further incentive. After obtaining three estimates, we enquired about the contractor's reputation and whether or not the urea formaldehyde foam he was proposing to use was CMHC approved. Everything checked out so the work was done and subsequently we received a CHIP grant. There was some unusual smell and at one place a wet spot appeared on the wall next to an electrical outlet but since we were also painting at the time we attributed some of the smell to this even though it still seemed to continue for a time after the painting had been completed. At this time we had no reason to suspect anything out of the ordinary.
Since 1978 a number of facts have become known to us:
1.	At the end of 1979 we brought our normal, healthy baby home from the hospital. She immediately developed bronchial and breathing problems which we treated with innumerable visits to the doctor. The child has had more antibiotics and prescriptions in her first two years than many people experience in twenty years. She is well below average in terms of her growth today in spite of her being of average birth weight and we are very worried about the long term effects of her ongoing breathing problems in terms of her future health and growth.
2.	We, ourselves, have both noticed, particularly in the winter months when the windows are more likely to be closed, that sore throats in the mornings were an almost daily occurrence for both of us, yet the colds we expected to follow never occurred. It has seemed, however, that we have both experienced a lot more "colds" or precold symptoms over the last few years.
The above observations were prior to our awareness of any potential health impacts of the UFFI. Since the time of the ban on use of the material a number of further facts have come to be known through reading the studies associated with the product, discussing the effects with staff from the Vancouver Health Department and speaking to others who have this insulation in their homes.
3.	The degradation of this unstable UFFI material is a certainty, only the rate is variable and unpredictable and this degradation releases formaldehyde
gas.
4.	There is no established "safe" level for this material for long-term continuous 24-hour per day exposure (as in the case of a mother and child at home). The .1 parts per million is an arbitrary Figure gleaned from research to date. The Final Report of the Department of National Health and Welfare Expert Advisory Committee on Urea Formaldehyde Foam Insulation April 1981 states:
"The Committee is therefore not prepared to recommend any level of
formaldehyde exposure as inherently safe."
The carcinogenic potential of this material is not clear; however, it has been shown to effect rats at 6 ppm which is presumably over a fairly short test
period.
I am sorry the minister has just left us because the letter
goes on to say:
Mr. Ouellet, what is this going to mean to the health of our child as she grows in this environment? Would it be "safe" to have more children? Looking at the health of our child now, we must say we are extremely concerned. We have
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therefore come to the conclusion that this level of uncertainty is too great & that the only thing we can do is have the UFFI removed.
5.	Our home has been tested by the City of Vancouver Health Department (report attached). The tests indicated that the formaldehyde level was approximately .05 ppm in the living space and .66 ppm in the walls, which indicates that the level of gas being produced in the walls is creating a potential to continue to contaminate the home.
There are no new furnishings or finishes in the home which could have contributed to this formaldehyde level and we do not smoke.
I might mention that was the kind of rationalization I recall the minister using in this House to try and get himself and his government off the hook. The letter goes on:
6.	We recently found another home which we were interested in purchasing and have discovered, from speaking to three separate real estate companies, that in spite of the fact that the home we were interested in was assessed at a lower value than ours, because of the formaldehyde ours would in fact be worth much less on the market. Only one company stated that the presence of the foam should result in a lowering of the list price by $25,000, while the other two simply suggested quite low asking prices and said that the "buyer resistance" to homes with UFFI had become "considerable".
One agent advised that several of the major banks were either refusing to write mortgages for such homes while others "reviewed" each case on its own merits.
Well, Mr. Speaker, I think this illustrates again in very human and specific terms the seriousness of this problem and the terrible situation in which home owners find themselves. The letter goes on:
In the case of this insulation, where the Government acted as a promotor through CMHC (and apparently through RAPCO), in the use of this product, action should be immediate and complete. If you do not provide full compensation in this case, how can your ministry ever have any respect from private companies who might be required by your Ministry to recall their faulty products. This is a terrible double standard!
The fact remains that the effectiveness and safety of UFFI were misrepresented when the product was given an endorsation. Since that time, your Government has fully recognized the problem and has established a compensation program.
Mr. Minister, why make this compensation incomplete! We can demonstrate a concrete economic loss and we believe also demonstrate health effects; why then when WE have acted in good faith, should we be penalized either for the full cost or a portion of the cost of removal of this frightening material from our homes. What kind of common justice is there in helping some people but not others? Your proposal is insufficient, unfair and discriminatory.
This stuff decays and a .5 ppm reading today is not either safe or constant over time and we would be irresponsible to raise children in an environment contaminated by the material or the fungus that live in it 24 hours a day-selling the home is a very costly non-solution which simply shifts the problem.
In conclusion, we must say that we believe that this hazardous material MUST BE REMOVED from our home and this conclusion is drawn from the National Research Council data, economic damage and most important, real and rational concern about the PRESENT AND FUTURE OF OUR FAMILY.
That letter was written by Bill and Marilyn Rapanos. It is typical of what so many UFFI home owners across the country feel. I think the only positive thing that we can say about this situation is that home owners in every province of Canada are so incensed that they have formed very militant citizen action groups. They are determined not to accept the insulting kind of compensation program which the government has proposed and which, of course, is legislated in Bill C-109 under discussion.

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Over the past year and a half, as housing critic for our party and as the hon. member representing the riding of Vancouver East, I have spoken many times in the House about the disastrous situation which has affected home owners with UFFI insulation. My constituency office has a headquarters for one urea formaldehyde action group.
The federal government must bear full responsibility for this disaster facing home owners with UFFI. For it to try and say otherwise or even to try to put the responsibility on to the provinces is irresponsible indeed. The federal government endorsed the program and encouraged home owners to use urea formaldehyde insulation under the CHIP program.
For the record, I would like to go over a couple of statements that were made earlier. These will show how long the government has ignored this problem and how long it has been in trying to do something about it. On July 17, 1981, we proposed a financial solution which would help home owners. I demanded in the House that the federal government establish a fund to assist Canadian home owners with the cost of removing UFFI from their homes. After all, we have disaster funds for floods and for fires; surely this is just as great a disaster.
In 1981 we proposed reallocating the $5 million which the minister was proposing to spend on testing homes with UFFI and also that the S330 million which had been allocated in 1981 for new insulation programs be reallocated and used as a good start on a UFFI disaster fund. Of course, the government ignored these proposals, just as it ignored repeatedly the need for a major program for these people, not to give information and to set up action phone lines, to which people could not get through, but something constructive. The federal government talked about several million dollars for informational programs as well which did not even get out to local family physicians about the effects on health of UFFI. But what we wanted were funds to be used immediately for the very obvious and well documented problems which were evident and which should have been acted upon in a direct way.
At that time we said also that public health officials in British Columbia, Alberta and Ontario had already indicated that the federal government's testing program was unreliable and inconclusive. The affected home owners had called for the removal of the insulation as the only way to ensure further problems would not occur in the future. That was in 1981. Then we move to December 24, 1981 when the government was proposing what it saw, after this long delay, might be the solution. At that time I stated:
The federal government, by making a token tax deduction for removal of urea formaldehyde foam insulation, at last has admitted they have a responsibility for the UFFI disaster. However a $5,000 tax deduction for only ten per cent of the affected homes falls far short of solving the UFFI problem which the federal government created.
UFFI homeowners are left with devalued properties with little or no resale value. Many people have their life savings invested in their homes which now are contaminated.
As I said earlier, it would cost between $20,000 and $30,000 to remove the foam. But to remove the foam-the poison-is the only solution. The federal government endorsed and
promoted the use of this insulation material. The federal government ignored earlier warnings from the National Research Council. The federal government is responsible for both the economic as well as the health problems which it created. UFFI action groups across the country and members of the New Democratic Party have said over and over again that the federal government has been hypocritical by pretending to provide remedial help. The phony aid program, which was part of Bill C-109, is just that. It is available to only a few home owners whose homes have a 0.1 parts per million reading, and to people who have serious health problems.
Many people are not yet aware what their health problems are possibly as a result of UFFI. Perhaps their doctors have not yet documented them. But when I questioned the minister about that, he admitted in the House of Commons that 0.1 parts per million was merely an arbitrary figure. The minister also agreed that individuals react differently to the foam. The more a person is exposed to the foam, the more sensitive a person becomes. Those serious health problems occur as the foam disintegrates. I asked the minister why these limits were set. They are just a waste of money and do not get at the real problem. What happens to people who are forced to move out of their homes? Many have already moved. Some people in my riding have actually had their homes torn down without any guarantee they will be compensated for that. They have rebuilt their homes at considerable risk and a lifetime's indebtedness with today's high interest rates.
The idea of paying $100 as a sort of downpayment as a prerequisite for testing is unrealistic. This has been a serious problem for senior citizens. Many of our senior citizens worked hard to insulate their homes. They were the ones with older homes who wanted to conserve fuel costs. Most senior citizens cannot afford this $100 requirement.
There is no real remedy for the disastrous effect of this foam insulation which, as I have said, was sponsored by the government, except for the government to compensate home owners for the complete removal of this insulation.
I might say also, Mr. Speaker, that we have asked the minister, who is so keen on testing and on studies which give him time for the heat to diminish, whether he would do a real estate assessment of the devaluation of property if he feels he needs proof. He has chosen to ignore this request also.
I know we do not need a lot of extra evidence in the record because many people have spoken about this problem. However, I would like to quote from a UFFI Action Association letter. This association operates out of my constituency office. It has members from across British Columbia.


Some hon. Members:: Oh, oh!


Raymond John Skelly: No money or government support was involved.


Margaret Anne Mitchell: This group has been extremely active in research. It has provided valuable data for the government. The December, 1981 letter of the UFFI Action Association of Vancouver reads in part as follows:
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The B.C. UFFI Action Association together with the other UFFI groups across the country reject the federal government's proposed plan of compensation. We reject because the amount (only up to $5,000 remedial action) is too low given the cost we face and is available to only a select few (those with current health problems and/or levels above 0.1 ppm formaldehyde level). The vast majority of UFFI home owners stand to get almost nothing under this plan.
They organized a telegram campaign to the minister. Telegrams flooded in, in the thousands, which read as follows:
I expect nothing less than full compensation for foam removal and restoration of my home.
This is the position of the New Democratic Party. My colleague who spoke on this bill strongly advocated a federal-provincial conference on the matter. We say that effective help does not have to be delayed in the meantime. Surely we all agree that it would be fine if the provinces helped also, but I think the greatest help they could provide at this time would be to assist citizen action groups to move forward with some of their legal cases since the federal government seems to be so slow.
1 should like to use this opportunity to commend particularly the action groups to which I have referred in all provinces. Penny Tilby, president of the B.C. action group, and John Owens, also a very active member, have put hours and hours of work into this entire effort. There are thousands of members of their groups at the present time. They have organized numerous meetings. They have up-to-date research. They have tested any and every suggestion which has been made. Also they developed an information network which is far superior to that of the federal government.
The federal government should make funds available immediately to assist these groups. If ever there was a group committed to research which has a vested interest in arriving at solutions, it is UFFI victims themselves. Despite the promises of the ministers, funds have really not been available. I believe $10,000 was available from the Government of British Columbia to help with some of the administrative and travel costs, but to my knowledge the federal government has not yet made funds available to these groups.
Also we advocate that the least the federal government could do would be to sponsor conferences to bring together organizations in Ottawa and to listen to them. Of course, it is very convenient for the federal government to close its ears when the victims are hundreds, indeed thousands, of miles away. The Minister of Public Works (Mr. Cosgrove) should be an advocate himself because not only did his department sponsor the program in the first place, but many public buildings have been insulated with urea formaldehyde. Also we know that many schools and small trailers have particular problems. There must be action on them.
We have mentioned that we want a federal-provincial conference. However, we do not only want advisory groups, which will be used, as the Liberal government is so fond of doing, to stall, to get the government off the hook, and to do nothing to solve the problem. We want some laws passed which will provide full compensation. Bill C-109 is completely
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inadequate. I have repeated these points over and over again, as have other speakers.
I appeal once again to the minister to sponsor immediately a federal-provincial conference and to provide funds for action groups to meet here in Ottawa, to bring together their research and to take action on their own behalf. They have said that kicking them when they are down and refusing grants is very typical of what they have been led to expect from the government. The last straw with the group with which I am familiar was that they were refused charitable status for their organization, so that people contributing to them cannot even obtain tax deductions. There are over 40 groups in Quebec alone and 24 other known groups across Canada.
I urge these groups to keep the heat on and to keep pressuring. Certainly all of us in the House, including government backbenchers, should keep pressuring for justice in this case. It is a national disaster. We must establish a national disaster fund. We must find ways for the government to change and extend its bill to provide true compensation for urea formaldehyde foam insulation victims.


William Herbert Jarvis: Mr. Speaker, I hope my intervention in the debate on this legislation dealing with urea formaldehyde foam insulation will not be overly long, but I feel compelled to make some contribution. In my view, this legislation, taken in isolation, is woefully inadequate. I am not convinced, although I suspect, that this is the government's sole answer to a very serious emotional, social and economic problem. I would be much comforted if either the minister or perhaps his parliamentary secretary later today allays my suspicions. If this is simply a first step by the government in addressing the problem, I think I would be inclined to be more patient and more understanding. If, on the other hand, this legislation represents the total response to this very, very serious problem, then I suggest there will be difficult times ahead for the minister, for his department and for the government of which he is a member.
If one looks briefly at the history of the problem up until approximately September of last year, I suppose one might adopt the cliche, "a comedy of errors". But the word "comedy" implies that there is some levity or something funny about the situation. There is absolutely nothing funny about it. It is a tragedy of errors rather than a comedy of errors.
In August, 1977, CMHC acceptance numbers were granted by the corporation's acceptance branch. In the next month, September, 1977, urea formaldehyde foam insulation was approved by CMHC for use in the Canadian Home Insulation Program. In November, 1979, some two years later, a complete ban of the product took effect in the state of Massachusetts. Attendant upon that, of course, was significant publicity in our country. In September, 1980, the Minister of National Health and Welfare (Miss Begin) announced the establishment of an expert advisory committee to study the documented evidence available on the product. In December, 1980, the same minister and the Minister of Consumer and Corporate Affairs (Mr. Ouellet) took steps to institute a temporary ban

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on its use. In April, 1981, the Government of Canada made the ban on the use of UFFI permanent.
Following the ban, on June 11, 1981, the Minister of Consumer and Corporate Affairs announced the establishment of an information-co-ordination centre to solicit and register public complaints on UFFI. On the same day the minister announced a board of review pursuant to the Flazardous Products Act to hear submissions from the industry and from other interested parties related to the decision to ban UFFI. Finally, on September 20, 1981 the then parliamentary secretary to the President of the Treasury Board, the hon. member for Hochelaga-Maisonneuve (Mr. Joyal), told reporters in Montreal that Treasury Board "has accepted the principle of evaluation damages and of compensating victims".
I do not claim to represent a riding which, with regard to this issue, is unique. I think we all share, to varying degrees, the problems within our ridings which have arisen from the installation of this product by our constituents, with government encouragement and, indeed, financial support in many cases. Surely there is a very strong moral obligation on the government, and I quote the Minister of National Health and Welfare who said, at a press conference in December, 1980: "I feel that, morally, we were the victims as much as the people were of a lack of knowledge".
I do not know how one might interpret that. If the Minister of National Health and Welfare, by claiming to be a victim, was suggesting in some way that she was sharing the impact of the UFFI ban, then one would have to suggest that the minister was using a very unfortunate choice of language. If, however, one might interpret her remarks to the press on that occasion as indicating a very serious responsibility to her fellow Canadians who were the victims of this government's inadequacy, then this response contained in the legislation is hardly enough to resolve the moral problem that she professed on that day.
I said that the problem was not simply an emotional one, nor simply a social one, nor simply an economic one. I certainly do not claim high seniority in this House. I have been here for something less than 10 years, but I suppose that those of us who have been here any length of time have dealt with problems at various times which one could quite accurately classify as emotional problems and they are often very difficult to deal with. Certainly from time to time and under a certain amount of pressure we have dealt with problems which could quite adequately be described as social problems. In the last few years, particularly in the last few months, we have all dealt with problems that can be described, again quite accurately, as economic. However, I do not recall a challenge or a problem in the few years I have been in the House which has so dramatically combined all the emotional, social and economic elements.
I have read news reports and I have heard it said that the victims of the UFFI disaster were simply reacting emotionally. Well, of course they were reacting emotionally; it would be a natural reaction. I have heard other observers say that the
socio-medical problem was more a problem of the imagination of the users of UFFI than genuine physiological problems. Well, I do not care one wit whether that problem is real in a physiological sense or is simply a medical problem of a psychological nature, because one can be every bit as serious as the other. I would find it hard to find a colleague in the House who would not agree with me it I advanced the proposition that very often the perceived problem on a certain issue is every bit as important and often harder to resolve than the real problem on a certain issue. Therefore, I cannot say whether a person with UFFI in his home who can be diagnosed as having a physiological problem, whether it be akin to an allergy or some form of respiratory problem which can be diagnosed as a particular disease, is in any poorer health than the victim of this foam insulation who is suffering serious mental health.
I have heard other critics and observers say that the economic problem is not nearly as serious as UFFI users are making it out to be, and that if one took masking tape and put it around light switches and that type of thing, then it would resolve the test level and those home owners should be quite able to sell or mortgage their homes on the same basis as a home without the insulation. That is nonsense. It is simply not a fact. Therefore, we have a group which is very small in relation to the total population but which, in terms of the number of users of UFFI, is very significant. On the basis of government advice and in many cases on the basis of government subsidy, these people are now the victims of an emotional, social and economic disaster.
Bill C-109 is the government's response. To repeat what 1 said earlier, if it is simply the first step, that is fine. I will work happily, enthusiastically and energetically with the government on its second, third, fourth and fifth steps. But if it is the total reaction of the government to this problem, if this is the end of it, it is not good enough.
I am happy to see the President of the Treasury Board (Mr. Johnston) in the House. I know of his problems. As a cabinet minister I had the experience of going to the Treasury Board and I know what the President of the Treasury Board faces. But I must suggest to him, through you, Mr. Speaker, that this is an absolutely unique situation and it must be dealt with in that way. Sir, if you put yourself in the place of a home owner with UFFI, I think you would have an appreciation of the frustration, anger and sorrow that these people feel. In my riding there is a very active home owners group composed of people from all age groups and all income sectors. It is a very representative group of my constituency. When I last met with them, I found them to be dreadfully disturbed, not just by the fact that they were the victims, but also by the inadequacy and uncertainty with which they perceived government to be dealing with them. For example, one home owner asked me this question during that meeting: "Having removed my foam insulation, am I entitled to apply for another CHIP grant to replace it with acceptable insulation?" Immediately upon returning to Ottawa following that occasion, I wrote to the minister that this question was asked of me. I did this many
May 31, 1982

weeks ago. What was the answer? 1 have not yet heard. I wrote again last week and said, "Give me the answer; it is a simple question. If the answer is no, and a home owner with UFFI who removes the insulation cannot apply for another CHIP grant, tell me so that I can relay that information to my constituent." I appreciate that this is a very small issue in terms of the total issue, but appreciate the frustration of a home owner who asked his Member of Parliament what he quite accurately considered to be a simple, straightforward question, and weeks go by without any answer whatsoever.
I would like to refer to the testing procedures. Immediately upon the application forms becoming available for this latest testing, those in my riding who had not directly received the application form from the department were supplied with the form by me through the home owners' group, the HUFFI group. Applications, to my direct knowledge, were completed and mailed immediately upon their being available. This was weeks if not months ago. The home owners have heard nothing.
Put yourself, Mr. Speaker, in the position of the home owner who completed an application form weeks and weeks ago and there has been no action. We wonder why there is anger and militancy among the members of these groups! It is the most expected reaction in the world. Naturally, they not only blame the government but blame their Member of Parliament. It is my responsibility to deal with that.
What am I to say to a constituent to whom I supplied the application form and who I know completed it and sent it in in an expeditious way? That home owner sits at home surrounded by UFFI and receives no response to his application. It is absolutely unacceptable and inexcusable that the mechanics did not exist, and maybe still do not exist, for dealing expeditiously and efficiently with those applications.
I said my intervention in this debate would not be long, but I want to deal with what I expect to be a Firm commitment from someone speaking on behalf of the government before the end of this second reading debate regarding the regulations which will be the main vehicle for the implementation of Bill C-109.
We have every right on behalf of our constituents who are the victims of this disaster to be able to inform them before the end of second reading and before this matter goes to committee that these will be the regulations under which the legislation will be implemented. I do not know whether a backbencher or a parliamentary secretary will participate from the Liberal side, but 1 feel not only justified but perfectly reasonable in insisting that we know what these regulations are before we move into committee stage.
If that commitment cannot be made on behalf of the minister, then I have serious reservations as to the efficacy of those committee hearings. Is it the proposal of the government that witnesses representing these home owners' groups come to Ottawa to appear before the committee to discuss this legislation and that parliamentarians on the committee will discuss
Urea Formaldehyde Insulation Act
clause by clause the provisions of this bill without any knowledge whatsoever of the regulations? In terms of this legislation, that is absolutely absurd. One cannot study at committee stage the provisions of this legislation without knowing specifically the regulations. I plead with the government on behalf of home owners everywhere who have UFFI installed to let this House know this afternoon or this evening what these regulations will be.
In conclusion, I want to repeat that if this is the government's total response to a problem that it created, underwrote and issued grants on, a problem of which it is the author, that is not good enough. Second, I want absolute assurance that the department is adequately staffed to deal efficiently, effectively and expeditiously with the applications and to respond. Finally, it is absolutely essential that parliamentarians and witnesses who appear before the committee know the exact content of the regulations before the commencement of committee study of this legislation.


Raymond John Skelly: Mr. Speaker, I rise on a point of order. The hon. member has a certain amount of time left. I wonder whether he would entertain a single question?


William Herbert Jarvis: Yes, Mr. Speaker.


Raymond John Skelly: Mr. Speaker, there is a very vital issue missing in the bill before the House and the debate in public. As the hon. member very ably pointed out in his presentation, we are considering a bill which must go before the Standing Committee on Health, Welfare and Social Affairs. That committee has been given a very rough and rocky time by the Minister of Consumer and Corporate Affairs (Mr. Ouellet). I see that the critic in the opposition party is nodding his head. There has been a question about the procedure and the agenda before the committee.
The hon. member knows very well that if we allow this bill to go to that committee, two arguments will prevail. I am sure he will agree that they would be prepared to shut down that committee by bringing in some form of closure and failing to permit adequate study.
There is another aspect of the question-


The Acting Speaker (Mr. Ethier):: Order. I thought the hon. member had risen to ask a question. We will entertain a question.


Raymond John Skelly: There are some serious considerations as to why we are not prepared to bring this bill forward quickly. One consideration is that the Conservative Party has put absolutely nothing on the record for the home owners. They say there is too much UFFI and it is the fault of the Liberals. Is there a point at which we are going to get the Conservative Party to put something constructive on the record as to what they would do for the home owners should they ever become the government? It is basically a put up or shut up position at this point.


William Herbert Jarvis: Mr. Speaker, I am not sure what the first question was.

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Urea Formaldehyde Insulation Act


James Aloysius McGrath: Don't ask him to repeat it!


William Herbert Jarvis: If the hon. member is asking me whether we want to be party to a delay at the committee stage because the report is not available, I suggest to him that I have some sympathy with that. The down side of that is the problem in coming to grips with what is inadequate. As the hon. member well knows, there is a great deal of legitimate pressure on behalf of some home owners with the problem. I tried to make that clear in my speech. This is a first step.
I do not want to be dogmatic. I understand the great help the board's report would be to committee, not just to parliamentarians but also the witnesses who appear before it. Whether I would like on behalf of our party to be party to a filibuster or a delay or any such thing at committee stage, I am not sure that would get the report in quickly. I do not know if we will get the report or not. I hope the parliamentary secretary to the minister will address that.
In terms of the second part of the problem-and I am sure the hon. member will not take this personally and will forgive me because we have a begrudging but mutual respect for each other-if that party had voted the right way back in 1980, this country would be a lot better off.
Hon. Warren Allmand (Notre-Dame-de-Grace-Lachine
East): Mr. Speaker, some hon. members in this debate have described the urea formaldehyde foam insulation situation as a national disaster. It is. There are approximately 80,000 homes with UFFI in them. It has been said already, but it deserves repetition, that if all those homes were together in one place we would consider it a national disaster. If those 80,000 homes had been hit by a flood or an earthquake or some similar national disaster, this House and the government would have rushed immediately to help them. But because they are spread across the country and because these desolate tales come to us in bits and pieces, slowly, it does not have the impact it should have, yet it really is a national disaster.
During the Easter recess, Mr. Speaker, I attended a meeting in my riding of 300 UFFI victims. These were French-speaking victims, not English-speaking victims. I must tell you that I wished that I had the bureaucrats and government officials with me on that night. Women came to the microphone, wept and broke down in tears, at the situation as a result of the gas emitted from the walls of their homes. Others told stories of having lived in garages outside their homes throughout the winter, of parking cheap mobile homes on their property to live in because of the intolerable situation in their homes. Others told of going to live with relatives because they could not live at home; and because they left their homes vacant the insurance companies were charging them additional insurance for fire and theft because tjiey were no longer living at home. To sit there that night as a federal Member of Parliament and listen to those stories was very difficult. I was wishing that all those who could expedite assistance for them had been there with me.


Some hon. Members:: Hear, hear!


Mr. Allmand:: The problem is not just one of health alone. There are others whose health has not been affected so far, thank God, but they have seen the value of their homes decrease. They do not know from day to day whether there will be some future breakdown in the walls or in the structure with the result that gas will be emitted from the walls. That is to say that in a year's time they may be affected by the gas. They know they have UFFI in their homes, they do not have the health problems yet, but they may have those problems next year or the year after, and they do not know what will happen when the time comes to sell the home when their children grow up. They see their houses decrease in value, they are left in a terrible state of uncertainty and they want corrective measures taken, even though they may not suffer from ill-health right away.
The government says it has no legal responsibility with respect to these people who freely put UFFI in their houses. I think they are correct in that; the government has no strict legal responsibility. If people were to sue in a civil action before the courts, those people would probably fail. But I submit very strongly, Mr. Speaker, that we have come to the aid of people in disaster situations. I refer to earthquakes, to floods and to disasters on the prairies where crops have been destroyed. The government may have had no legal responsibility to do so, but felt it had some responsibility, both politically and morally, to help those people who were in such serious difficulty.


Allan Bruce McKinnon: That is right.


William Warren Allmand: The government has already responded. In December, 1980, by banning the foam, by admitting that it could cause difficult problems. Again, in December, 1981, the government announced a program of testing and assistance. The program has come to us, however, only in bits and pieces. The people I have spoken to in my constituency have not yet received any definite assistance. Some of them have had tests, they have had visits, and there have been letters back and forth. But none of them have got money in their hands to compensate them or to help them rid those homes of UFFI.
With respect to the tests, one man at that meeting of 300 in my constituency to which I referred said he had three tests done on his home and all three came out with different results. The government-sponsored test was done, but he also had tests done by very reliable engineering firms. Even among them, there were two different results. That indicates to me that if we are going to give aid on the basis of these tests, we certainly should not be dogmatic and inflexible. The amount of gas that may be emitted in a home at any one time might depend on weather and other conditions. Otherwise, I do not see how one could explain why the result of the tests were different.
The government has prepared a bill and that bill is before us now. It will go to committee and I am very hopeful that in committee the government will keep an open mind on this issue. I hope it will listen to those groups which represent victims across the country. I hope those representatives will be called to the committee, so that they may give their stories
May 31, 1982

directly to the committee as I was able to hear them at that mass meeting one night in my constituency. It is very important to listen to the representatives of victims. The committee will also wish to listen, of course, to engineers and other people familiar with this foam, but the bill should be given very thorough study in committee. Amendments should be considered to widen the coverage. If we are going to give aid, we should not be niggardly, we should not draw the lines too restrictively. We should reconsider the deadline for helping people retroactively to the announcement of the program. Some people who had UFFI in their homes acted quickly, before the government announced its program. Those people paid a lot of money to do that and have gone into debt. They should not suffer because they took that quick action.
Some members mentioned the regulations. Of course, the regulations are very important. Clause 3 of the bill provides that assistance will be given to applicants, in accordance with the evidence and according to criteria set out in the regulations. At this point we do not know what kind of evidence will be required or what the criteria will be. It is very important that members know those important factors before there is a final vote on the bill at third reading.
I wish to mention a few other steps that might be taken to help these victims. 1 mentioned before, and 1 have repeated- and this has been taken up by others-that we should consider using the tradesmen in the Armed Forces to help take out some of this foam. We have many engineers and tradesmen in the Armed Forces who help in times of national disaster. If there were a flood or something like that, the Armed Forces would come to the assistance of the people concerned. We have these trained tradesmen who are being paid salaries by the federal government and their equipment is covered by the federal government. Could they not be put to work for a year or two to remove the foam insulation? That would save the government moneys they would pay to private contractors or private businessmen. It is not that it is bad to give such contracts, but we are in a period of restraint. We are already paying these tradesmen and engineers; they are not faced with any great military challenge at this time and could be used to great effect in helping individuals remove this foam from their homes.
There is another matter, Mr. Speaker. The government says it is not legally responsible for the damage resulting from this foam insulation, and I agree that that is probably correct. However, should the government not consider that it could take the corrective measures and pay for them, and then be subrogated legally in the right that the victims might have had against those who were responsible, whether it be those two installed the foam improperly, or whether it be those who manufactured the foam. Whoever is found responsible, there is a right of action against them. The government may hesitate to spend sums of money now to compensate these victims, but it could take corrective action and then be subrogated in its legal right to make claims against the people who were really responsible for these serious damages.
Urea Formaldehyde Insulation Act
In his announcement last December the minister spoke about research being undertaken to develop neutralizers to the foam insulation. If such neutralizers could be developed, that would be much cheaper than tearing down walls and buildings, and so forth, to get the foam out because neutralizers could be injected into walls. That would do away with the negative effects of UFFI and probably solve the problem. In his final remarks today or before the committee I would like the minister to tell us what progress has been made by research scientists in developing UFFI neutralizers.
I do not know whether this is correct or not, but some victims have told me that the grants which will be made to them under this program will be taxable and that they will have to include those grants as part of their taxable income. This may be a case of taking away with one hand while giving with the other, and I would like some clarification on that point.
I do not want to give a long speech on this matter. I merely wanted to put on the record my very real concerns about what I believe to be a serious national disaster and a very, very sad situation. I urge the government to act quickly and fairly to bring justice to the home owners affected.


Mr. Keeper;: Mr. Speaker, I wonder if the hon. member for Notre-Dame-de-Grace-Lachine East (Mr. Allmand) would entertain a question.


William Warren Allmand: Sure.


Cyril Keeper: I listened with great interest to the hon. member's speech about urea formaldehyde. He outlined the problem very well. He made it clear that there are people across the country who are suffering very severe health problems because of this insulation. He noted the fact that the government subsidized-we might even say promoted-the use of this kind of insulation in houses across the country. The hon. member made clear note of the fact that while the government may not have a strict or narrow legal responsibility to compensate people and to help them with their financial problems, it has a moral responsibility and should act upon it. The hon. member pointed out that citizens who have put this foam insulation into their houses-


The Acting Speaker (Mr. Ethier):: Order, please. Did the hon. member seek the floor to be recognized to participate in the debate or to ask a question?


Cyril Keeper: Mr. Speaker, I will go straight to the question.


The Acting Speaker (Mr. Ethier):: The House would like to hear the question.


Cyril Keeper: Thank you, Mr. Speaker; I will take your advice to heart.
Having made such a good speech about urea formaldehyde on behalf of the citizens of this country and given the
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May 31, 1982
Urea Formaldehyde Insulation Act
inadequacy of this legislation, is the hon. member prepaped to vote against it?


William Warren Allmand: No, Mr. Speaker. At second reading 1 will not vote against it. In my speech I stated that I want to see this legislation sent to committee. I hope the committee will listen to the associations of victims as to how the legislation can be improved. I would like to know, as would opposition members, what the content of the regulations will be because the regulations will establish the criteria and the evidence required for assistance. After we have finished the committee hearings and the bill returns here for third reading, I will then make a further decision.


Mr. Simon de Jong (Regina East):: Mr. Speaker, I feel honoured to participate in the debate this afternoon because we are dealing with an extremely important question which affects many families right across Canada. Large numbers of Canadian families are concerned and have very deep anxiety with respect to this question.
It would be interesting just to review briefly the history of urea formaldehyde foam insulation. Originally it was banned in Massachusetts in 1976, although it was approved in Canada as a safe product in 1977. The original Canadian approval was given in 1969. That was withdrawn in 1970. In 1977 the National Research Council stated in one of its public releases that urea formaldehyde was a problem. In 1977 the CMHC again endorsed it as a safe product, even though the NRC had recommended against its use in a prior report. Also in 1977 the Canadian Home Insulation Program began, and urea formaldehyde foam insulation was an approved insulation material. In August of 1978 Dr. Vian of the Department of Consumer and Corporate Affairs stated that there were serious problems and complaints about urea formaldehyde foam insulation and advised against its use.
In 1979 the state of North Carolina documented proof of cancer in laboratory animals exposed to low emission rates of urea formaldehyde. In January of 1980 final and conclusive laboratory tests were done by the Department of National Health and Welfare, and those tests showed that urea formaldehyde was a possible source of cancer. In September of 1980 the present Minister of National Health and Welfare (Miss Begin) formed a special committee. Two months later, in November of 1980, the Consumer Product Safety Commission in the United States issued a report on the threat of cancer. In December of 1980 there was a temporary ban in Canada imposed by the Department of National Health and Welfare, and in April, 1981, there was a permanent ban on urea formaldehyde foam.
It is interesting to note that as far back as 1969 concerns were expressed about the safety of this product, and yet we continued through most of the seventies to use it. In fact, it was used widely during that decade. The estimates vary. Government members say 80,000 families have been affected. Conservative members say close to 200,000 families have been affected. Our estimate is that close to 100,000 families have been affected. These are all estimates. Part of the problem is lack of information. We do not even know how many homes are affected.
As we look through the history of the seventies, we see a process whereby this material was approved, then not approved and then deemed to be a problem, and yet nothing was really done about it until the 1980s. There is a problem because, first, this material affects health. Its affects are difficult to pinpoint because they vary. They vary from house to house. They vary depending on climatic conditions. They affect various people living in a home in different ways. Some people are affected more than others. However, what is understood is that this material is not good for people in any dose. As I said, some people are affected more than others. In some homes more gas escapes from the walls and into the homes than in other homes. However, let me state very categorically, very simply and very plainly that any amount is not good. Therefore, we should make our objective the eventual removal of this foam from all homes.
We all recognize that that is easier said than done. Estimates for removing the substance from a home range between $20,000 and $30,000. That would make this a billion-dollar program right across the country. I think there is recognition that the price tag would be high and that the solution to the problem is not simple. However, the bill before us certainly is not the solution.
A government which has not acted with haste all at once acts with too much haste. We are dismayed that this bill is presented to us without the special advisory committee having reported to the government. What is the sense of having the advisory committee if it is not to advise as to what type of remedial action should be taken? Why is the government moving now when its own advisory committee has not even reported? We suggest that there is a bit of folly in that. We also suggest that the home owners who have organized themselves into various associations across Canada should be consulted. Is it not just plain common sense that people whose health of life is affected should be consulted? Unfortunately, the government has deemed it fit not to consult them.
As we look at the problem and realize the anger Canadian home owners feel toward the government and the companies that put the foam in their homes, we must ask who is ultimately responsible. Surely the government must accept a fair amount of responsibility. After all, it did a fair amount of testing and approved the product. The company which manufactured it was even indirectly owned by the government through the Canada Development Corporation. The government should accept a fair amount of responsibility, but instead it has played political games with Parliament and with the home owners across the country. If it were to deal realistically and honestly with the problem, it would meet with home owners in an honest, open and frank way. On all counts the government has failed, however.
Sometimes to the chagrin of some of my fellow members in this party, I have risen to question the testing procedures
May 31, 1982

followed in the areas of pharmaceuticals, herbicides, pesticides, etc. I have drawn to the attention of the government the fact that an outfit called International Biotest Laboratories in the United States, in testing most of the herbicides and pesticides used in Canada today, has deliberately falsified its data. Yet the United States government accepted that data and registered most of the herbicides and pesticides that are on the market today.
Recently I put a question to the Minister of National Health and Welfare about the testing of pharmaceuticals. From freedom of information data obtained in the United States, it was revealed that the U.S. Food and Drug Administration had done a random sampling of 10 per cent of companies and individuals that tested pharmaceuticals and had found that approximately 45 per cent of them did not have good laboratory practices. In fact, because of its investigation it declassified 10 per cent of the companies and individuals that were testing pharmaceuticals.
There is a basic problem in the testing of individual chemical products put on the market every year, and there are thousands of them, Mr. Speaker. The testing has not been adequate or honest. If a problem occurs, very often the government is the last to hear about it. We have found that remedial action by government departments is slow. That is illustrated by the history of urea formaldehyde during the 1970s when various tests showed there was a problem with it. Different government departments ignored the test results and did not act upon them. Even the National Research Council warned the government about it but that warning was ignored. We need a total re-evaluation of the way new products are tested and how the results of those tests are made available to government departments.
1 commend my friends to the right for the initiative they have shown in taking up this issue, Mr. Speaker. However, in the short period that they were in government I brought the problem of urea formaldehyde to their attention. During question period on October 22, 1979, I put a question to the then Minister of Regional Economic Expansion who was also in charge of CHIP and CMHC as follows:
Have other materials, such as styrofoam and treated wood-shavings, been subject to testing methods, and are there any testing procedures to ensure that urea-based foams do not give off highly toxic formaldehyde gas after insulation?
The minister replied:
The testing has been done in the past for CMHC by the Onta.io Research Foundation. CMHC in itself has not taken part directly in the testing but has had to take their word for the results obtained.
We are looking into all aspects of this very important program. It has been generously funded. We hope to improve its administration as more experience is gained.
At the Standing Committee on Health, Welfare and Social Affairs on November 2, 1979 I put the following question to the Conservative minister:
Were there any studies as well conducted with formaldehyde insulation materials in terms of whether they do throw off toxic fumes and whether this is much of a danger?
He replied in part:
Urea Formaldehyde Insulation Act
However, I never had anyone talk to me about this rather exotic-sounding insulation. You brought it up in the House and I am sure some of our officials have looked into it.
Then 1 turned to the official from CMHC who was present and the following exchange took place:


Simon Leendert de Jong: Are the people in CMHC aware of the problem with foam?


Mr.   Hession@: Specifically the urea formaldehyde?


Simon Leendert de Jong: Yes.


Mr.   Hession@: Yes, we are. I think you were inquiring as to the degree of testing there. I think more particularly the standard that is in existence is in the order of a one-part-per-million requirement, which, in the extreme, has suggested to our professional staff, our technical staff, that the toxic difficlty is minimal in this country.
Those were the answers we were getting from government officials when the Conservatives were in power, Mr. Speaker. When I asked particularly about urea formaldehyde at that committee, the minister turned the question over to Mr. Hession, who replied:
I want to assure the member that there are literally thousands of materials every year, new materials, coming into the market, and we make it our business, before accepting them, to be satisfied, either through the industry's own testing or through the testing of third parties, that they are acceptable in professional technical terms.
Those were the answers we were getting not too long ago. I am glad to see the conversion of hon. members opposite to the realization that a problem exists. I am also glad to see that there has been some enlightenment of members of the opposition as well. My short experience in the House has shown that as soon as either party sits in opposition, certain enlightenment occurs and they become good, honest advocates; but once they cross the floor everything seems to be "I'm all right, Jack". In fact, the questions we are hearing from the right now were being stonewalled by them when they were sitting opposite. I must surmise that when hon. members opposite were on this side they were asking the same questions and championing the same sort of causes. But strange things seem to happen when either party crosses the aisle.
Enough politics have been played with this very serious problem, Mr. Speaker. People are angry, and they have every reason to be, at the fumbling and mismanagement and at different departments making conflicting statements. People are seeing the value of their homes being destroyed, and they are angry because they do not see any clear and positive direction which the government is following. They see mass confusion, attempts to evade responsibility, and continued flight into bad weather, as my colleague says.
[DOT] (noo)
I suggest first of all, Mr. Speaker, that the government meet with the citizens concerned. That surely should be obvious as requirement number one; an honest dialogue with those citizens who are losing their homes. Second, the minister should withdraw the bill until he has heard from his own advisory council. Third, the minister and his officials should meet with their provincial counterparts. Then he should come back to the House with a bill which has had input from those three groups of people.

May 31, 1982
Urea Formaldehyde Insulation Act
My other recommendation, Mr. Speaker, is that the government get its act together. The Department of Consumer and Corporate Affairs, the NRC, CMHC, and the officials responsible for CHIP, should get together and devise a co-ordinated and meaningful program. Surely, Mr. Speaker, the government is not so big and insensitive that it cannot do that. Surely the government is not so incapable that it cannot do something in an honest way for the citizens affected by this foam insulation.
The minister advocates civil action. I feel he is somewhat cynical in that suggestion. He surely should know that a civil action on this issue will cost anywhere from $100,000 to $300,000 and most people cannot afford that. He must also know that the statute of limitations, which I recognize is a provincial responsibility, will prevent many people from taking legal action. Perhaps if he is serious about that, however, he can do two things. He can make some money available from the public treasury so that those affected can take action in the courts, and perhaps he can approach his provincial colleagues and suggest to them that they amend the statute of limitations requirements so that people have the time to bring this matter to the courts. I think these are sound suggestions, more so than those my friends to the right have been proposing after discovering this was a problem.
It is all well and good to say a terrible problem exists, but you have to follow it up with something concrete. I recognize and do not minimize the difficulties we face. It is a difficult and costly problem, one which we are not going to be able to resolve overnight. But at least we can put in place a process by which we can begin moving in the right direction: the removal of this insulation from Canadian homes. That is the ultimate goal.
I have tried to tie my remarks, Mr. Speaker, into the much larger question of how new chemical products and technology enter the marketplace. 1 hope the government has learned a lesson from this. I hope the government realizes a very costly mistake has been made, and 1 hope and pray it will go over the existing procedures whereby new products are registered and allowed to enter the marketplace, so that this will not take place in the future.
In conclusion, I am afraid this legislation which is before us is not adequate and does not really meet the concerns of the Canadian people. It is a bill which has been brought forward more, I suspect, out of politics than from a desire to deal honestly with a mistake. As such, Mr. Speaker, we will stand in opposition to this bill.



PROCEEDINGS ON ADJOURNMENT MOTION


The Acting Speaker (Mr. Ethier):: Order! 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 Surrey-White Rock-North Delta (Mr. Friesen)-Automotive Industry-Application of non-tariff barriers to Japanese imports, (b) Customs inspection of ships carrying Japanese imports; the hon. member for Kingston and the Islands (Miss MacDonald)-Status of Women-Voting rights of military personnel spouses, (b) Request that legislation be amended; the hon. member for Algoma (Mr. Foster)-Customs and Excise-Query respecting possible extension of customs area to include continental shelf.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed consideration of the motion of Mr. Ouellet that Bill C-109, to provide for payments to persons in respect of dwellings insulated with urea formaldehyde foam insulation, be read the second time and referred to the Standing Committee on Health, Welfare and Social Affairs.
Mr. Gary F. McCauley (Parliamentary Secretary to Minister of Consumer and Corporate Affairs):: Mr. Speaker, I have been listening carefully to the debate this afternoon, with some interest and a great deal of disbelief at some of the statements made by hon. members opposite. I want to spend the time available to me in responding to a number of the more sensational statements that were made this afternoon, and to touch upon a number of actions the government has taken, is taking and will take.
Let me remind hon. members opposite that the Government of Canada is concerned enough about this problem to allocate over $110 million to a program to assist the victims of urea formaldehyde foam insulation. Let me remind all those members who need reminding that those people with problems are eligible for a tax-free grant of some $5,000. We are told that is not enough. Well, in my riding I have talked to a number of people with UFFI in their homes. They tell me that the bids they are getting from contractors to remove the insulation are well below that $5,000 figure. We are told by scientists at NRC that not only might removal be the most expensive solution, but also possibly the worst one. We are now
May 31, 1982

studying ways and means of doing the job in a better way than that of total removal. We are looking at ways of sealing walls and installing air exchangers which, to the best of our knowledge at this time, are better solutions than total removal.
We are proceeding in a rational orderly way because we take this problem seriously. We have a testing program in place. We have a program in place to certify contractors to do remedial work. We have a program in place for remedial advice which is categorized to specific problems in specific homes. This is not a case of throwing money at a solution hoping that we will get off the hook. It is a case of an intelligent orderly program. However, I just heard the hon. member for Regina East (Mr. de Jong) tell the House and the Canadian public that the only solution is the total removal of this foam. It is typical of the New Democratic Party to suggest that kind of thing which would be total fiscal irresponsibility. To do what the NDP suggests would cost between $1.5 billion and $2 billion. It is not even needed.
This afternoon we heard the hon. member for St. John's East (Mr. McGrath), who has urea formaldehyde foam in his own place, tell us in a honest and forthright way that there is no problem in his home. He is warm, secure and happy in his home. He has even saved money on his heating bill. The media has made this problem sensational. And the problem for the hon. member for St. John's East and for many home owners throughout the country is that the market value of their homes has decreased, not because there is a tremendous problem, but because of sensationalism in the press.
I would like to take this opportunity to read into the record a report that was broadcast on the CBC Radio national news on May 19, 1982, which has to do with the situation in the United States. The report opens with this comment:
The U.S. Congress has been holding hearings in Washington this week into the problems thousands of Americans are having because they used urea formaldehyde foam insulation in their homes. Although there have been calls in the U.S. for an aid program similar to Canada's for these home owners, the Reagan administration doesn't think the health problems warrant it.
Then a reporter from Washington elaborated by saying:
Reagan administration officials said today there is not enough evidence of a health hazard from formaldehyde foam for the government to give aid to people who used the material to insulate their homes. Legislation has been introduced in Congress to establish an aid program similar to one Canada has started, but administration officials down-played the reports of a cancer risk from formaldehyde.
Canadian professor Dr. Michael Newhouse of McMaster University testified at today's hearings. He said there is no health hazard from the insulation, and he said it was a mistake to ban the material.
Dr. Newhouse said:
There is no question that the psychological harm done to date by the ban far exceeds the potential health effects, if such effects exist at all. People may not have had a problem before, but, since all of this stuff has appeared in the press and has not been denied by government health agencies, a huge problem exists.
The reporter concludes by saying:
Congress is expected to take up legislation for the aid program this year, but its prospects of passage are dim.
Urea Formaldehyde Insulation Act
If we keep having filibustering from across the way, the prospects for the passage of this bill will also be dim. But it is some action, and we are proud of it.
We have heard comments that the government is responsible for this mess, that we approved the product. Let us make it clear that every year tens of thousands of new products appear on the market. Some are very useful, some are not. But the government does not approve these new products. The government cannot approve or even test all new products. In order to do so we would need an entire army of employees, inspectors, scientists and experts. That is impossible. If it were possible, the cries of outrage from the official opposition would be so loud that we would not be able to hear ourselves think. Hon. members on the other side would complain about government interference and about free enterprise. Let us make it clear that the government is no more responsible for urea formaldehyde foam insulation than for any other product put on the market by manufacturers.
I have already touched upon some provisions of the bill and some of the action that we are prepared to take if hon. members opposite will allow us to do so. I have reviewed the provisions of the bill, as I have said, but let me enumerate some other actions that have been taken. Let me point out to members opposite who refuse to go into the facts that we have funded through public moneys UFFI home owner groups throughout the country enabling them to get a better reading of the picture and enabling them to do their work in representing their membership. An amount of $40,000 has gone to a group in Quebec; an amount of $39,000 has gone to the association of Ontario home owners with urea formaldehyde foam insulation; an amount of $4,000 has gone to concerned urea formaldehyde foam home owners of St. John's, Newfoundland; and an amount of $7,000 has gone to HUFFI, Manitoba. A co-ordinating grant of $30,000 for the production and distribution of a news letter to UFFI home owners throughout the country was given to a group here in Ottawa.
A national advisory committee has been established to consult and meet with the minister, officials of his department and officials of UFFI centres. The meeting will be held this month. I will be attended by representatives of 12 home owner organizations across Canada from the Atlantic provinces, Quebec, Ontario, the prairies and British Columbia. Mr. Richard Patten, president of HUFFI, Ottawa, has agreed to accept the position of chairman of this council. The purpose is to dialogue and discuss possible remedial measures. UFFI officials from the UFFI centres, the minister and representatives of home owner groups across the country will be able to exchange ideas in a reasonable and orderly fashion and review research. In short, it is for people to come together to see what can be done about this problem and to Find out what advice they have for the government on the best way to proceed.
The hon. member for St. John's East and the hon. member for Perth (Mr. Jarvis) raised the question of regulations today. There was some sinister suggestion that regulations are being hidden or were not forthcoming because there was some purpose in keeping them in the dark. That is not so. The

May 31, 1982
Urea Formaldehyde Insulation Act
minister has made it clear that he will circulate draft regulations at the committee stage of this bill. We have purposely set up the bill in general terms because we want to be flexible. As you know, Mr. Speaker, the best way to be flexible is to incorporate flexibility into the regulations. As long as we can, we want to be open to the new research being done daily and to be open to suggestions from home owner groups across the country so that we can incorporate suggestions into the regulations and thereby improve the bill.
One other thing to which I want to respond concerns a remark made by the hon. member for Regina East who suggested there was some connection between the deliberations of the board of review set up under the Hazardous Products Act and the introduction and presentation of this bill. There is no connection; I want to make that perfectly clear. We are not waiting for the board of review report because we have decided, as a humanitarian gesture, that we must proceed as quickly as possible to assist those who need help the most.
The hon. member for Regina East also accused the government of not consulting. I have already made it clear that we are in the process of consulting with home owners. In fact, we consulted before the bill was introduced. We consulted with the industry and with provincial governments. Unfortunately, neither the industry nor the provincial governments thought the problem was of sufficient merit for them to become involved.
We believe there is a problem for some people-the very young, the very old, those with allergies-and those who are sensitive to gases and associated substances with which they come in contact in their homes. We believe that this bill is a step in the right direction. We would like to have the cooperation of the provinces, but it does not appear to be forthcoming. I suggest to hon. members opposite that there is a saying that the enemy of good is the best. We have a good bill here, and I invite their co-operation to see that it is quickly passed.


Simon Leendert de Jong: Mr. Speaker, would the hon. member accept a very short question?


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


Some hon. Members:: Agreed.


Simon Leendert de Jong: Is the hon. member aware of an exchange which occurred when we met with the National Research Council before the Standing Committee on Miscellaneous Estimates on Thursday, March 18, 1982? At that time I asked Dr. Kerwin, the head of NRC:
Are you at all addressing the long-term problem of devising ways and means in which we can get rid of the urea formaldehyde that is in the walls in an efficient and an inexpensive manner?
Dr. Kerwin answered as follows:
Mr. Chairman, we are not addressing that problem at the moment. The facilities we have are stretched to dealing with the current day-to-day worries and problems-


The Acting Speaker (Mr. Ethier):: Order, please. If the hon. member has a question, I would ask him to pose it. He is just repeating a question which has already been posed.


Simon Leendert de Jong: Is the hon. member aware that Dr. Kerwin stated that they were not addressing the problem of removing urea formaldehyde from walls because their resources were stretched to the limit and they hoped, if they obtained more resources, that they might be able to address the problem?


Gary Francis McCauley: Mr. Speaker, I am not aware of that particular incident. As I tried to make clear in my speech, the problem is not removal. The problem is what we should do with the gas from that particular insulation. The best possible solution is to seal the walls. I assure the hon. member that studies are being conducted at the present time to see what is the possible solution in terms of sealing.


Raymond John Skelly: I wonder whether the hon. member would accept another brief question.


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


Some hon. Members:: Agreed.


Raymond John Skelly: The bill is running into some question in its passage at second reading. Would the minister be prepared to give the draft regulations before second reading of the bill is completed? Also, would he be prepared to meet with home owner advisory groups before the bill leaves this place approved in principle? Third, would he agree to meeting with his provincial counterparts so that we can dispense forever with this question of whether they will co-operate or involve themselves in consultations?


André Ouellet: Mr. Speaker, with the permission of the House I should like to answer these three questions.


Some hon. Members:: Agreed.


André Ouellet: Mr. Speaker, I repeat that at second reading stage we are discussing the principle of the bill. Of course, that is the purpose of second reading. The principle is whether or not we will directly aid home owners who have urea formaldehyde insulation in their homes. If opposition parties agree that we should aid them, then we should send the bill to committee where the methods of helping them will be studied in more detail. Indeed, I will undertake to distribute the regulations and the definition as to how aid will be given to home owners. These regulations will be distributed to members of the committee for study of the bill in committee.
The second question concerned meetings with representatives of home owners. The date has been set for mid-June when they will come to Ottawa for a meeting with officials of my department, with officials of the UFFI centre and with myself. I am looking forward to this meeting for the input of representatives of various home owner associations which have formed across Canada.
The government wants to help home owners and it wants to have the input of the various heads of these groups which
May 31, 1982

represent home owners in various provinces. We are looking forward to their input and their co-operation in finding proper solutions for home owners affected by the product.


Donald Alex Blenkarn: Mr. Speaker, there is one thing in favour of the government in this regard: at least it is bringing in a bill. I should like to deal with a problem which has certainly developed in my constituency and 1 am sure it has developed in the constituencies of other members. It concerns the government's involvement in approving UFFI, having it approved government assistance, government supervision and licensing of contractors, and so on. However, first of all 1 should like to indicate that essentially the bill allows the minister to make regulations with respect to urea formaldehyde foam insulation and appropriates $55 million from the consolidated revenue fund for the period ending December 31, 1982.
The rest of the bill deals with the regulations, although the bill does provide that someone who receives money under the bill, if that in fact is the case, is not prohibited from suing the Crown. But nowhere can 1 find in the bill any provision for a $5,000 payment or indeed payment of any amount of money to anyone. In that respect, Mr. Clark Lowry, director of the UFFI Information Centre, was interviewed on radio by the Canadian Broadcasting Corporation on February 9, 1982. He was asked by the interviewer how one qualified for $5,000. Mr. Lowry said that first of all home owners make an application and then the centre sends out two air metres to their homes which are used to measure the formaldehyde level. If we go through Mr. Lowry's interview, we are left with no answers or suggestions that indicate that the director of the UFFI information Centre knew what was going on with respect to the real problem which affects people.
What is the problem? Let me deal with the matter in a chronological fashion. This material, despite objections by the Department of Energy, Mines and Resources and other real concerns of the Department of National Health and Welfare, was approved by CMHC for the Canadian Home Insulation Program in September, 1977. Until that time no one had given a seal of approval to the use of urea formaldehyde foam insulation in Canada. Prior to that time people may have used the foam at their own risk. They may have insulation with the material. In fact, many people did insulate with the material. But in September of 1977, this government, despite advice to the contrary, despite real concerns expressed by its own departments, approved the material under the CHIP program. In a sense, that program was a something-for-nothing program. Those who went along with the CHIP program received up to $350 for materials and $150 toward labour for installing insulation in their homes. That program still exists. The advantage of urea formaldehyde foam was that it could be pumped into the extension walls of a house without upsetting the decor, it could be done relatively quickly and, in fact, could encase the entire outside perimeter of the building. If properly installed, this type of insulation firms up and works wonders in
Urea Formaldehyde Insulation Act
terms of protecting people from the cold. It does reduce the heating bills, at least in some cases.
There has been some concern expressed that urea formaldehyde foam is not the best type of insulation. Clearly, there are other types which are better, but for a great number of home owners, this urea formaldehyde foam, approved by the government, the installation of which was partly financed by the government, represented a marvellous way to insulate their homes cheaply, quickly and cleanly.
A great number of people insulated their homes with this foam, given the effect of the grant program, the certification program, and the whole series of people who got into the business of installing this foam, going around and knocking on doors. After the spring of 1978, if one's home was constructed prior to 1961, with $500 one could carry out almost the entire job of insulating a home, involving very little of one's own money. Of course, salesmen went around. Indeed, they still go around selling insulation. But they particularly went around selling this type of insulation because it was a no-fuss, no-muss job and the government paid for it.
I point out that the government had information and advice from the Department of National Health and Welfare and the Department of Energy, Mines and Resources expressing concern prior to authorizing the use of this foam, but Canada Mortgage and Housing Corporation went ahead and approved the product. So when one asks about the government's responsibility to people, there should be no doubt. This was a product which the government approved and which it paid home owners to put in their homes. The government cannot back away from that problem. It created a situation where people relied on the foam and, indeed, it paid people to rely on it. People relied on it and have been damaged.
The first question is, what are the real health and physical damage problems? Let me read from the government's booklet produced by the National Research Council, dated April, 1981. On page three it states:
Exposure to formaldehyde can cause eye, nose and throat irritation, coughing and asthma-like symptoms, headaches, dizziness, nausea, vomiting and nose bleeds. The severity of the reaction depends on the formaldehyde concentration, the duration of exposure and the sensitivity of the individual. Although there may be no reaction to a single exposure, repeated or long-term exposure may increase an individual's sensitivity to the gas. When sensitized, a person may suffer serious reactions at very low concentrations.
There is a health problem with the material. But there is no question about the fact that most persons in my constituency who are faced with the problem of this urea formaldehyde foam product in their homes complain of no health problem. However, in the same booklet, the government goes on to state:
UFFI deteriorates continuously at a moderate to rapid rate so it has a short life compared with other building materials. The rate of deterioration depends on the conditions to which it is exposed.
Then the government goes on:
Deterioration of the foam leads to breakage of the cell walls and shrinkage of the insulation decreasing the foam's ability to resist heat and air flow. Formaldehyde gas is released and may be carried into the living space by air infiltration and, at a slower rate, can diffuse through the wall materials-

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Urea Formaldehyde Insulation Act
Where the cavity containing the foam has not dried properly after installation, fungus may grow on the foam or on other materials in the cavity. Fungus spores can be carried into the living space by air infiltration.
That is what the government states concerning the material. What do hon. members think the public would say if the government or the National Research Council said that that is what is wrong with property which is insulated with urea formaldehyde 1770;-1 foam? Well, we know. No one here, not even the minister himself, would buy a house insulated with urea formaldehyde foam, no matter what the level of formaldehyde readings, no matter what tests are taken by those who read the meters. What we have, in effect, is a situation where a relatively small portion of the population has homes badly insulated with urea formaldehyde foam in their homes, where the foam is degenerating, where health is affected, where certain sensitive people are seriously affected by nose bleeds and the rest. But everyone else is destroyed. Why are they destroyed? It is because their homes are totally, completely and absolutely unmarketable.
The parliamentary secretary says that we have created a hype, that there is a big news hype on this matter. I ask the parliamentary secretary, who created the hype? A moment ago I read from the material issued by the National Research Council dated April, 1981. Having read that, were 1 to be faced with the possibility of buying a home insulated with urea formaldehyde foam, I would not buy one. Mr. Speaker, you would not buy one. Of course you would not, because you know the material will disintegrate, the fungus will grow and the formaldehyde will seep into the wood and wall building materials. If you are sensitive and you are exposed to the insulation over a period of time, you could become supersensitive and could be affected by coughing, asthma-like symptoms, headaches, dizziness, nausea, nose bleeds and gosh knows what. So the parliamentary secretary and, I suppose, the minister, say there is a hype. Of course there is a hype. The minister and his department created the hype. Instead of sensibly finding that there was a problem with some of the installations, that the insulation affected some people and some people were ultra-sensitive to the foam, the minister went ahead and completely banned the foam. He turned it over to the National Research Council. They created more hype. The minister says it is not all that bad, that it has not upset most people and that these people have saved money on heat. If they have a high enough level of formaldehyde, they will receive a couple of testing machines. If that does not work, they may be entitled to a grant of up to $5,000.
That is not an answer. The real problem is that between 80,000 and 100,000 people relied on this government and its grant program. They were told this was an improved material and they had it installed in their homes by approved building contractors licensed by the government to instal the material.
When these people try to sell their homes, they find they are not worth anything. I suspect all members have had people with this foam insulation problem visit their constituency offices. The first visit I received was very shortly after the
temporary ban in December, 1979. Then the permanent ban came about.
A constituent, Mr. Stewart, has a century-old home on Clarkson Road. It is a beautiful two-storey brick home built about 1850. Mr. Stewart is retired. That home represents his basic asset. He did not take a nickel of government money. However, he did go to Canada Mortgage and Housing Corporation to get the details on the material. He was told how good it was and who were the licensed contractors. He is not the kind of person who takes money from the Government of Canada. He does not believe in grants. He said he did not need welfare, that he would pay it himself. How his century home is completely unsaleable.
Another constituent spoke to me last Friday. His home is on Martley Drive. I chatted with him. He told me that his home was insulated with urea formaldehyde foam. He is retired and wants to sell his home. He and his wife go to Florida in the winter, and he cannot afford to keep his home in Lome Park. He needs to release the money from his investment for retirement. His pension is not growing. We all know what inflation is. He had a real estate agent visit his home. He was told that if the lot was vacant it would be worth $85,000, but since he had a pile of bricks with UFFI in it, it was only worth $80,000. The agent said it would cost that much to get rid of the house. What a thing to tell a retired man on pension. That home represents his life's savings. It is worth less than if it were a vacant lot.
This man does not have a home. What he has is totally unsaleable. It is a health hazard. It will cost $5,000 to get rid of that health hazard. He could get $85,000 or $80,000 for his lot the way it is and the buyer would have to get rid of the health hazard.
In the government they say it is a hype. The hype has gone across Canada. It has destroyed the savings of thousands and thousands of people. A bill setting aside $55 million and providing testing units is not a proper response. It is not the response we demand from this government. The government should bring in a program whereby all affected homes will benefit from some remedial action and then be certified as health-safe.


André Ouellet: That is exactly our program.


Donald Alex Blenkarn: I am glad the minister interjected. If he will certify Mr. Stewart's home as safe and give him the Good Housekeeping seal of approval so that he can say to the agent from A. E. LePage that he has a Government of Canada guarantee, and if there are any effects from the urea formaldehyde, the government will look after the losses, he will be doing something. If that is what the minister will do, we will be 100 per cent for it. That is all he has to do.


André Ouellet: You should read the documentation. It is all explained.


Donald Alex Blenkarn: I have a file full of documentation from the minister. I receive his press releases every day, his compilation
May 31, 1982

of newspaper and other clippings. My friends in the NDP nod. They receive it as well. If that is what the minister has in mind, I expect someone on the government side to say that the government will certify these properties as health-safe and give them the Good Housekeeping seal of approval. If there are any problems caused by the urea formaldehyde, the Government of Canada should look after the problems right down the line.


André Ouellet: Not the second part.


Donald Alex Blenkarn: The minister says, "not the second part". Even a used car dealer will give a better guarantee than that which the minister is offering.


André Ouellet: We do not know whether the people are allergic. It depends on the people.


Donald Alex Blenkarn: The minister does not know if they are allergic. The question is whether he is prepared to certify Mr. Stewart's home as safe, not only for Mr. Stewart but for anyone who may buy it. If not, then the minister has not done anything for him. This insulation does not bother Mr. Stewart, his wife or his grandchildren. It only bothers his pocketbook because it cannot be sold.
No one will buy a home with urea formaldehyde foam insulation because of what the minister has said and what his research has shown as well as what was produced by the department and the National Research Council. He must now bring in a program that certifies the home as health-safe, not only for the current occupants but for any occupant who might be in that home for at least the next 25 years. That is the kind of certification we need.
The documentation from the National Research Council says that the foam can create fungus. There is an indication that the acid in the foam will deteriorate the metal in the walls. There are some suggestions that the fungus will grow, permeate the wood and brick and seriously damage the structure itself. Where is the guarantee? I do not see that guarantee in anything that has been issued from the department. That is the kind of guarantee the department ought to give. I do not think it would cost all that much. I do not think you have to tear all these houses down, as the members of the New Democratic Party have suggested. I do not think you have to tear all the foam out of all the houses in the country and out of all the apartment buildings. But I say you have to tear up some parts of the foam that have not been installed correctly. You have to do some work on the houses and you have to leave the houses in such a state that the houses can be certified as safe, not only for the current occupants but for any other occupants, with a guarantee that the government will take the house over if it is not proven safe.
There could be some kind of insurance deductible provision that would make some sense, so that people would not take advantage of the government. At least that would be a guarantee to those who invested in a piece of real estate and who have been expropriated by fear or by the kind of information
Urea Formaldehyde Insulation Act
published by this government, a situation that has wiped out and destroyed the savings of many of our citizens.
This is a very serious problem, Mr. Speaker. We have people who rely on the government to certify the quality of a product and then find they cannot rely on the government because the government certification does not mean anything. Then we have a situation where people cease to trust their government. There was nothing that required the government to certify UFFI. The government did not have to certify it. The government could have said, "caveat emptor", let the buyer beware, and could have refrained from commenting one way or the other on this insulation. Indeed, the government could have said it would not even help to cover the cost of insulation. It could have said, "Do it on your own, do what you want." They probably would have been better off. Perhaps the government will learn something from this effort to improve, from this effort to certify and this effort to proclaim as good. Sometimes when you lead people down the garden path, it costs you money. That is where we are now. These people were misled by their government, they were misled by a program initiated by their government. These people have the right to look to their government that certified the program, that advertised the program, the government that indeed financed the program, to come good.
The government has no right to say that the provinces should bear their share. What province certified UFFI? If there was a province that did so, it should come clean, too, and pay. But the provinces did not get into the act at all. For the government to say it can only go this far because the provinces won't join in, that has got to be the worst line. Why should the provinces join in? After all, it was this government that certified the product, against the advice it had received; it was this government that promoted the product.


André Ouellet: No, never.


Donald Alex Blenkarn: You did, you promoted the product. You certified the people who installed it in the first place.


André Ouellet: No.


Donald Alex Blenkarn: As a matter of fact, right now your own program even says that you will not allow who ever installed the stuff before to take it out. I do not know why. There were people who were insulation contractors and got into the business of installing UFFI and who are put out of business now. Part of the application process that this minister has issued provides that if a person ever installed UFFI, anybody who is a contractor or a labourer or whatever, cannot be licensed under the minister's program under this bill. Hah! What discrimination that is! That is what you did. You certified the people who had put it in.


André Ouellet: Never, that is not true.


Donald Alex Blenkarn: At least CMHC did. You licensed the contractors.


André Ouellet: That is not true.

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Urea Formaldehyde Insulation Act


Donald Alex Blenkarn: They received their licence numbers with respect to being licensed installers under the Canada Mortgage and Housing Corporation.


André Ouellet: No, that is not true.


Donald Alex Blenkarn: And you went ahead. The minister says it is not true. Well, I will go over those facts. I say they are true, that this government certified the contractor-


André Ouellet: It is the product.


Donald Alex Blenkarn: -certified the material, certified who should be doing it. Mr. Stewart, whom I spoke of earlier, went back to the Canada Mortgage and Housing Corporation office and they gave him the list of approved contractors and said, "You had better have the approval number of the contractor. Do not hire anybody who is not approved." Well, that is whom he hired, a CMHC approved contractor, that is how he is in trouble, that is his claim against the Government of Canada.


André Ouellet: You are misinformed.


Donald Alex Blenkarn: The minister says I am misinformed. Well, I must say, Sir, that the representations made by installers were that they were approved by Canada Mortgage and Housing Corporation. Indeed, the grant program was to approved installers only.
Sir, let us go further, before I finish what I want to say. This product does in fact reduce heating costs, and reduces them substantially. But this product has been declared by the government to be unsafe or not valid as insulation material. The government has a problem. In effect, the government has a damage action being brought against it. Indeed, it is being sued by all sorts of people across the country. The government has an obligation, the same as I would have if I made an error in judgment and ran into your car in an automobile accident, an obligation to make good your damages. If I were a chartered accountant and I issued a financial statement upon which you relied to buy shares in a company covered by that statement, and if that statement was in error and you were misled by it, then I would have an obligation to pay you for your loss. The government has an obligation to go in and clean up the mess. That does not necessarily mean taking the foam out, but it does mean certifying to the people who own the homes that the homes are safe from now on. It is the obligation of this government, not of the Government of Ontario or of the Government of Quebec. It is the obligation of this government.
1 see it is six o'clock, Mr. Speaker.


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


[Stage Direction]
AFTER RECESS

The House resumed at 8 p.m.

["Order. I do not think I can entertain any more discussion about this particular problem. There is no unanimous consent. This was the request that was made by an hon. member. There is no unanimous consent. In my view, the question is final for the time being and it being ten o'clock-"]
Mr. Penner:: Madam Speaker, I rise on a point of order to seek the unanimous consent of the House to revert to that stage in our proceedings known as presenting reports from standing and special committees.


Madam Speaker:: Does the House unanimously agree to revert to that part of the proceedings?


Some hon. Members:: Agreed.


Some hon. Members:: No.


Madam Speaker:: The hon. member does not have unanimous consent.


Yvon Pinard: Madam Speaker, I understand we now have a House order to revert to statements, but I want it to be noticed that unanimous consent was just denied by the Tory party.
[ Translation]


Madam Speaker:: Pursuant to the order made earlier this day, the House will now revert to statements by ministers.



[Stage Direction]
PRESENTATION OF "NATIONAL ENERGY PROGRAM: UPDATE 1982"
Marc Lalonde: Madam Speaker, I rise in the House tonight to present hon. members with an update report on the National Energy Program. I am pleased to report on what has already been done in just over 18 months and what we will do to maintain our full momentum toward complete success.
Initially, I would like to table, in English and French, a document entitled "The National Energy Program: Update 1982", Mise a Jour: Programme Energetique National, 1982.
On October 28, 1980, my colleague, the Minister of Finance (Mr. MacEachen), rose in the House at about this time in the evening to present our ambitious and comprehensive plan to chart Canada's energy course through this decade and beyond. The energy challenges facing Canada were great, but they also fostered great opportunities. We have come a long way since then. We have made remarkable and sustained progress toward reaching the major goals of the National Energy Program.


Arthur Ronald Huntington: How many barrels have you produced?


Marc Lalonde: This success is all the more notable because it was achieved in the face of difficulties created in Canada by the world economic recession.


Donald Alex Blenkarn: And by the Liberal Party.
May 31, 1982


Marc Lalonde: The National Energy Program is not merely prices and tax. It is much more. The National Energy Program is a dynamic and comprehensive strategy of evolving responses to a changing world. The fundamental strength of the program is that it responds directly to all of Canada's major energy challenges and opportunities.
An hon. Member. Horse feathers.


Marc Lalonde: While the goals are unchanging, the methods we employ will adapt to meet changing conditions.
Hon. members will recall that we set three major goals in the National Energy Program. The first was security of oil supply, with a specific target of oil self-sufficiency by 1990.


Arthur Ronald Huntington: Bankruptcies.


Otto John Jelinek: Higher gas prices.


Marc Lalonde: The second goal was fairness in the distribution of energy benefits and burdens. The third was greater opportunity for Canadians to participate in the oil and gas industry.
Tonight I can report with increased confidence that Canada will achieve oil self-sufficiency by 1990.


Some hon. Members:: Hear, hear!


Marc Lalonde: At the Tokyo Economic Summit in 1979 the Clark government pledged to limit oil imports to 600,000 barrels a day in 1985. Today I expect that Canada's import requirements in 1985 will be cut to half of what the previous government anticipated under its policy.


Some hon. Members:: Hear, hear!


Marc Lalonde: We have not merely passed the test the opposition established; we have surpassed that test. This accomplishment is possible in large measure because Canadians are responding enthusiastically to the program's conservation and oil substitution elements. The results in 1981 were indeed striking.


David Kilgour: We know about that in Alberta.


Marc Lalonde: In home heating, natural gas made inroads against oil, featuring a 13.6 per cent increase in Quebec alone. Heating oil consumption was down 17 per cent across Canada. Gasoline consumption fell by 3.3 per cent. Over-all, crude oil use was down 7 per cent in one year.


David Kilgour: Nothing to do with the recession, eh?


Marc Lalonde: While imports were increasing before the National Energy Program, they did not increase in 1981 and should actually fall this year.


Arthur Ronald Huntington: Tell us about the gross national product.


Marc Lalonde: Oil security cannot be achieved by the petroleum industry alone. It requires the commitment and involvement of every Canadian, and this is what we have seen in 1981 in our conservation and substitution efforts. The opposition says that it had to do with the recession. I remind
National Energy Program
hon. members opposite that those figures were achieved in Canada at a time when the Canadian economy was growing at a rate of 3 per cent a year in real terms. That was not the recession. Canadians have made that commitment. For example, since 1980, over one million Canadian households have been saving money and oil because they have used the $500 grants offered under the Canadian Home Insulation Program. That is over one million Canadians in only one year. In only one year, 200,000 Canadians have received grants of up to $800 under the Canada oil substitution program to switch from oil for heating to gas, electricity and alternative energy. We now know that this program will continue to make a significant contribution to energy security throughout the decade.
The effect of this response from the people of Canada has been immediate and drastic. At the same time, the National Energy Program offers powerful incentives to the petroleum industry to find and develop new supplies of oil for Canadians. There have been many successes in this regard in the last year and a half. We reached a comprehensive agreement with all three western producing provinces and with the province of Nova Scotia, which may soon become a major producer. Of great significance is the accord with Nova Scotia, the first comprehensive long-term agreement for joint management of offshore petroleum resources in this country's history.
These agreements establish oil and natural gas prices and allocate revenues in an equitable and fair manner. They provide a stable climate for investors and producers and certainty and moderation for consumers. In other words, these agreements are fair to all Canadians.
Equally important was the passage of the Canada Oil and Gas Act by this House last December. The bill governs the promising frontier areas where Canada's future supplies are to be found. Therefore, we took strong steps to ensure that Canadians have the opportunity to play a full and vigorous role in petroleum development in these regions. These steps will mean jobs for Canadian workers, investment opportunities for Canadian businesses and a wide array of spin-off economic opportunities for Canadians. However, recent developments in the international energy and economic front threaten to undermine Canada's strong and growing oil and gas industry. The world economic recession and the unanticipated moderation in international oil prices have decreased industry confidence and weakened the energy investment in Canada.
Since the agreement with Alberta last December, the Government of Canada has taken several steps to counteract these conditions. These include, for example, extension of the new oil reference price to most experimental projects; assistance to low productivity wells, and the provision of depletion for ongoing capital expenditures by Suncor and Syncrude.

May 31, 1982
National Energy Program
These measures to assist the industry are valued in the hundreds of millions of dollars.
In addition, the Alberta government announced last April a $5.4 royalty reduction as part of its commitment under the September agreement. We welcome these adjustments but it is clear that additional steps are required. Tonight the Government of Canada is taking those steps to ensure the progress that I have described, is sustained in the months ahead.


Mr. Clark:: You are resigning!


Marc Lalonde: First, the government will assist in further reducing the level of shut-in oil in Canada. Second, the government will strengthen the petroleum industry to expand exploration efforts. Third, the government will accelerate the use of natural gas as a substitute for oil. Fourth, the government will freeze the natural gas and gas liquids tax at its current level for the remainder of this year. Fifth, forecasted increases to the petroleum compensation charge in 1982 are no longer required, thereby further constraining consumer prices.
This evening I have tabled a full description of these measures. However, I should like to draw your attention to the more than $2 billion offered tonight to stimulate an active and aggressive petroleum industry.
The basic petroleum and gas revenue tax rate will be reduced from 16 per cent to 14.67 per cent for the period June 1, 1982 to May 31, 1983. This will result in an effective tax rate on production revenue of 11 per cent after the resources allowance deduction, already available, is included.
In addition, the incremental oil revenue tax on conventional oil will be suspended for the period of June 1, 1982, to May 31, 1983. The wellhead price on oil discovered in the period after 1973 and qualifying for provincial royalties at the new oil rate but not in receipt of the new oil reference price, will rise on July 1, 1982, to 75 per cent of the current world price. After July 1, the price will remain at this level, subject to a ceiling of 75 per cent of world price, until the price of conventional old or pre-1974 oil reaches this level. Thereafter, all oil discovered before 1981 will again be treated in the same manner for pricing purposes.
An annual small producer's credit will be offered of up to $250,000 against the PGRT liability of corporations on their production revenue. This credit, which will be available to offset taxes on revenue earnings after May 1, 1982, will be of particular benefit to hundreds of small producers who will not pay any PGRT. We estimate that less than 100 of the largest Firms will pay PGRT. The net gain to the industry will be about $900 million between now and 1986.
The new oil reference price will be extended as of January 1, 1983, to existing tertiary projects which pay royalties no higher than those applicable to new oil. The Government of Canada will be prepared to provide earned depletion to tertiary recovery projects subject to agreement with the provinces on appropriate levels of royalty relief and provision of data indicating the justification for such support. Eligibility for earned depletion of very large projects, that is, involving more than $100 million, will be considered on a case by case basis.
The new oil reference price will be extended, beginning January 1, 1983, to all experimental projects which pay a royalty no greater than 5 per cent of gross revenue. The new oil reference price will also be extended as of January 1, 1983, to oil wells that have been suspended for a period of at least three years, provided the production from those wells qualifies for new oil royalties.
The rate of PGRT on production and royalty income arising from synthetic oil production from integrated oil sands plants will be reduced from an effective rate of 12 per cent to 8 per cent between January 1, 1983, and December 1, 1984.
These are the main measures applying to the oil and gas industry. They more than restore the industry's share of the revenue pie. Between 1975 and 1980, the industry's so-called golden period, it received 45 per cent of a smaller pie. We estimate that with these measures and those that were announced by Alberta in April, the industry will get 46 per cent of a much bigger pie between now and 1986. Energy development is the engine for economic growth, and we are determined to ensure that it remains so. These measures will restore full health to the oil industry, thereby stimulating greater economic development for Canada and jobs and investment opportunities for Canadians.
When Premier Lougheed announced his government's royalty deductions in April, he was concerned that some of the revenues intended for the industry would flow to the Government of Canada. The measures I have announced tonight show that this is simply not the case. In fact, the Government of Canada is providing more than $2 billion in additional benefits. Approximately $300 million will go directly to the Government of Alberta. I would like in turn to urge Premier Lougheed to return at least some of this gain to the oil industry, especially to promote existing tarsands plants and their development. The Government of Saskatchewan has announced its intention to reduce provincial royalties. This is a welcome, indeed a long overdue, complement to federal action. The government of British Columbia is reviewing its take from the industry and I hope for positive results as quickly as possible.
The penetration of natural gas into oil markets is an exciting success story in Canada. To ensure that it remains a success we are announcing a series of important measures tonight. In the National Energy Program the Government of Canada committed itself to the extension of natural gas service into the maritimes. This commitment remains unqualified.
Since the introduction of the NEP two important developments have occurred. First, important progress has been made with regard to Sable Island natural gas, which may be available as early as 1987. Exploration successes suggest that sufficient reserves will soon be proved to support a pipeline to the mainland. Also, the Government of Canada and the Government of Nova Scotia reached an agreement which encourages rapid commercial development of this resource.
May 31, 1982

Second, the construction timetable of the Trans-Quebec and Maritimes pipeline has slipped and completion to Elalifax is not now expected until well into 1986. The coincidence of these two dates obviously creates the need to consider whether the transmission line should be re-oriented around Sable Island gas. However, the government recognizes that this could cause some financial and operational difficulties for the sponsors of the TQ and M pipeline. Therefore, the government will meet the full cost of engineering and survey work on the pipeline between Quebec City and the Atlantic coast by advancing an interest-free loan to the sponsors to be repaid when the maritime portion is constructed. When this work is done, final pipeline design and construction can start as soon as information on Sable Island gas resources is available. Since natural gas will not be available to maritime consumers as early as anticipated, there is the possibility of pre-building markets for pipeline gas with propane from local and western Canadian refineries. Therefore, the government will make propane an eligible fuel source under the Canada Oil Substitution Program in the maritimes where a residential or commercial consumer is switching off oil.
We are also taking major steps to ensure the greatest possible penetration of natural gas into Quebec markets now served by oil. The government is establishing a fund of $500 million to assist with the construction of branch lines off the main TQ and M trunkline to provide access to important gas markets. Similar measures will be considered for the maritimes as soon as the pipeline to the maritimes is in progress. These measures relate to expanding the natural gas market in Canada. The government recognizes the importance of natural gas exports to the health of the industry. We welcome the recent decision of the National Energy Board to adopt a new formula in determining the amount of natural gas which is surplus to Canada's needs and can therefore be exported. This change will provide welcome export opportunities to the natural gas industry, while at the same time maintaining our all important commitment to ensure that Canadian needs are met before exports are allowed. Further, the government will meet 50 per cent of the cost of converting residual fuel oil boilers in industrial, commercial and private institutions to natural gas, effective June 1, 1982, or from the date that gas becomes available, and applicable for a period of time.
The most important news tonight is that these measures will not increase prices that consumers pay for petroleum products or natural gas by more than the amount forecast in the agreements with the producing provinces. It is often suggested by members opposite that the only way to achieve energy security is to expose all Canadians to the uncertain and sometimes brutal effects of international oil prices.


Mr. Baker (Nepean-Carleton):: Who said that?


Marc Lalonde: If any evidence is needed that there is a better way, the NEP has provided that evidence. Great strides
National Energy Program
towards energy security have been made while providing Canadians with energy prices substantially below world levels. Under a Liberal Government, Madam Speaker, this progress will continue.


Some hon. Members:: Hear, hear!


Marc Lalonde: Over the life of the energy agreement with the provinces, consumer energy costs in Canada will be the lowest-of any industrialized country. The made-in-Canada pricing ensures that conventional oil will not rise above 75 per cent of world levels, and limits natural gas to approximately two thirds of domestic oil prices. Consumers will remember that the Conservative budget linked gas to 85 per cent of oil. Well, we have brought that price down, Madam Speaker.


Some hon. Members:: Oh, oh!


Some hon. Members:: Hear, hear!


Marc Lalonde: Compared with world prices, we estimate made-in-Canada prices will save Canadians-


Charles Joseph Clark: Tell us about 14 cents a gallon. Tell us about your broken promises.


Marc Lalonde: -$39 billion in oil costs, and $21 billion in natural gas costs between 1981 and 1986.


Charles Joseph Clark: Nobody in the country believes you, Marc.


Marc Lalonde: These are huge figures and difficult to comprehend on a personal level, but if you ask a Canadian how much that represents-


Charles Joseph Clark: If you ask a Canadian: can you believe Marc Lalonde? They say "never".


Marc Lalonde: Between 1981 and 1986, Madam Speaker, it represents a saving of $2,500 in energy costs for every man, woman and child in this country.


Charles Joseph Clark: Nobody believes you, Marc.


Marc Lalonde: These are the facts.


Some hon. Members:: Hear, hear!


Marc Lalonde: Our energy prices, Madam Speaker, compare more than favourably with those in the United States.


Some hon. Members:: Oh, oh!


Marc Lalonde: The cost of heating an average home in Canada today is about $1,025 a year, 25 per cent less than the cost of heating a similar home in the United States.


An hon. Member:: Hogwash!


Marc Lalonde: If home owners took advantage of grants under the Canadian home insulation program and the Canadian Oil Substitution Program, they would save an additional $500.
We also offer benefits to consumers of gasoline. However, provincial governments have the constitutional right to take

May 31, 1982
National Energy Program
away the benefits of a made-in-Canada price with made-in-the-province taxes. For example, in Ontario and Quebec provincial retail sales taxes since 1978 have increased 51 per cent and 210 per cent respectively. On the other hand, motorists in Alberta and Saskatchewan, which provinces do not levy sales tax, enjoy gasoline prices below those prevailing in the United States.
Madam Speaker, I said earlier that Canada had made tremendous progress towards achieving the three basic goals set by the National Energy Program in 1980. Our aim was to achieve energy security for Canadians, and especially to achieve oil self-sufficiency by 1990. We have made tremendous progress in this respect, so much so, that while the Progressive Conservative government expected that we would have to import about 600,000 barrels per day by 1985, we can state today, with considerable assurance, that our import requirement will be less than 300,000 barrels a day in 1985, less than half the amount forecast by the previous government. Furthermore, Canadians have taken advantage of programs set forth in the National Energy Program, namely, home insulation and off-oil substitution by natural gas, electric power or other forms of energy. Since 1980 alone, Madam Speaker, over one million Canadians have insulated their homes, and have thus been able to reduce energy costs quite substantially, and in some cases bring them down to half of what they would have had to pay otherwise. In addition, during the last twelve months, over 200,000 Canadians have switched from oil heating to gas, electricity, wood or other forms of energy, again with considerable savings.
We have also promoted the marketing of Canadian natural gas in eastern Canada. We supported construction of the pipeline to the Maritimes, and we continue to support this project very strongly. In fact, the pipeline will reach Trois-Rivieres this fall, and is expected to reach Quebec City next January. In addition, thanks to an agreement concluded recently with Nova Scotia on the development of offshore resources, we now expect it will be possible to bring into production the natural gas reserves around Sable Island off the coast of Nova Scotia. It is quite possible that by 1987, we could have a situation where a gas pipeline would be carrying natural gas, not from west to east, but from east to west, which would greatly enhance the economy of the province of Nova Scotia and of the Maritimes in general. However, we want to make sure that Canadians in Quebec and the Maritime provinces will have access to natural gas as soon as possible. That is why I announced this evening that we shall first provide complete financing for all engineering projects that will have to be carried out between Quebec City and the Maritimes in connection with the construction of the gas
pipeline, to ensure that Canadians in these areas will be able to benefit from this project as soon as possible.
We have also established a special fund of $500 million, that will be used to finance the cost of branch pipelines in Quebec, to ensure that people in the areas of Lac Saint-Jean, Beauce, the Eastern Townships and elsewhere in Quebec will be able to obtain natural gas through branch lines already approved by the National Energy Board, and this without delay and at a cost that is truly reasonable. In fact, Canadians in the Maritimes and Quebec will be paying the same price for natural gas as they would in Toronto.
And this measure we are announcing this evening should ensure a rapid extension of the natural gas distribution system in Quebec.
I have also announced a series of further measures to provide assistance to the oil industry. The amounts involved are considerable, since they will exceed $2 billion between now and 1986. In fact, more than half of this amount will be transferred to the industry within the next eighteen months, and will be especially helpful to small oil industries, a great many of which are of Canadian-owned.
The question we must ask is: Who is going to pay for the benefits or concessions we are providing the industry at a time when it is facing very specific problems? I want to make it quite clear to consumers that none of these measures will involve any price increases for consumers for natural gas or oil over and above the increases provided in the agreements concluded last year with Alberta, Saskatchewan and British Columbia-


Charles Joseph Clark: That is not true!


Marc Lalonde: -so that these measures will not entail any increases over and above those provided in the agreements.
Madam Speaker, our goals were energy security, and we are convinced we shall attain these goals by 1990. Today, we are in a situation where we are importing far less oil than was previously expected, and less than was forecast in the 1980 National Energy Program. We have been able to maintain oil and natural gas prices at levels that are lower than those of any other industrialized country in the world, including the United States.
In some provinces, gas may be more expensive than in some American states, but we must not forget that the retail price for gas depends to a considerable extent on provincial taxes. For instance, in Quebec the retail sales tax has increased by 210 per cent since 1978.


Charles Joseph Clark: Federal taxes-


Marc Lalonde: It is therefore not surprising that the price of gas in Montreal is higher than it is in Plattsburg or Burlington, because they have a provincial tax of 40 per cent added to the cost of gas at the refinery gate.
May 31, 1982

It is interesting to note that in Saskatchewan or Alberta, which have no provincial tax, gas is cheaper than in the neighbouring states to the south. I would invite my colleagues to see for themselves-


David Kilgour: That is a lie!


Madam Speaker:: I ask the hon. member for Edmonton-Strathcona (Mr. Kilgour) to withdraw those words. They are unparliamentary, as he knows.


David Kilgour: Madam Speaker, in my opinion, it is not true. I have the figures here to show he is wrong-


Madam Speaker:: The hon. member will be able to discuss them at the proper time. It is perfectly normal for hon. members to disagree on the facts from time to time. In fact, sometimes the entire debate in Parliament consists in giving varying views of the facts. However, the hon. member knows perfectly well he may not use such unparliamentary language. I would ask the hon. member to withdraw those terms.

The Speaker heard them.


David Kilgour: Madam Speaker, if I can make a phone call, I will return to the House and happily apologize if I am wrong. I am quite certain the minister is not telling the truth on the point he just made in the House.


Madam Speaker:: That is totally irrelevant. It is for the purposes of this procedure that I am asking the hon. member to withdraw his words.
Hon. members may have different opinions as to what is true and what is not true, but they may not use the kind of language which the hon. member has just used to debate that point. I would ask the hon. member to co-operate and simply withdraw those which are unparliamentary. The hon. member knows that.


Some hon. Members:: Withdraw!


Madam Speaker:: Is the hon. member refusing to withdraw those words?


David Kilgour: Madam Speaker, I am almost totally certain that I am correct. I cannot be absolutely certain unless I go and make a telephone call. Will you give me ten minutes to make that decision?


Some hon. Members:: Oh, oh!


Madam Speaker:: I should like to accommodate the hon. member, but I ask him to accommodate the Chair and to withdraw those words which are unparliamentary.


David Kilgour: With due respect to Madam Speaker's charm, I will withdraw the term.
National Energy Program


Madam Speaker:: I will accept that, but in future I ask hon. members not to refer to my charm.
[ Translation]


Marc Lalonde: Madam Speaker, perhaps the following will refresh my hon. colleague's memory and help set his facts straight. I can state positively that in April 1982, the price of a litre of gas in Calgary was 34.5 cents and that in Montana, to the south, it was 37.3 cents, in other words, 2.8 cents more per litre than in Calgary. This was in April 1982. Perhaps my hon. colleague would care the check his facts. Madam Speaker, our oil pricing system is supposed to bring the price of oil up to a maximum that should not be reached until July of next year, namely, 75 per cent of the world price for conventional oil, and as far as the blended price is concerned, which includes the price we must pay for all imported oil and the price of oil from oil sands, we estimate that today's price is still less than 80 per cent of the world price. Those are the facts. If we look at the situation regarding natural gas, Canadians are even better off, since they can buy natural gas for only 65 per cent of the price of Canadian oil. The benefits are such that if we calculate the aggregate of benefits to all Canadians by 1986, the net result is that every Canadian man, woman and child will have saved $2,500 per person by 1986, as a result of our pricing system here in Canada.

One of the major objectives of the National Energy Program has been the opportunity for Canadians to participate. Canadians know with certainty our commitment to energy security and Canadian opportunity. Canadians know the progress we have made over the past 18 months, and Canadians know that we will reach our target by 1990.


Some hon. Members:: Oh, oh!


Marc Lalonde: Canadians should also know that the Conservative Party, which is shouting and complaining on the other side tonight, has regressed just as we are making progress. Eight years ago the Conservative Party made the following commitment:
To maximize the benefits to Canadians the Progressive Conservative Party believes that as a cornerstone of such a policy for the 1970s and the 1980s Canadians must dedicate themselves to acquiring and holding ownership of more than 50 per cent of the non-renewable resources industries in Canada. A Progressive Conservative government would take the lead in this direction-


Some hon. Members:: Hear, hear!


Charles Joseph Clark: That is what the Crosbie budget did.


Marc Lalonde: As a government for nine months and as an opposition party for the rest of the time, the Conservative Party has consistently opposed and obstructed our Canadiani-zation measures while paying lip service to the concept.


Some hon. Members:: Oh, oh!

May 31, 1982
National Energy Program


Some hon. Members:: Hear, hear!


Charles Joseph Clark: Madam Speaker, I rise on a point of order. Naturally I would not want to describe the statements of the Minister of Energy, Mines and Resources (Mr. Lalonde), because that would call for unparliamentary language. But I ask the Chair to consider whether it is appropriate for the minister of energy, under the guise of a statement on motions, to make a speech which is not only, in my submission and to use words which 1 believe are parliamentary, inaccurate, but also to use this opportunity to make a simply unvarnished, partisan speech which does not carry the benefit of the truth.


Some hon. Members:: Oh, oh!


Some hon. Members:: Hear, hear!


Madam Speaker:: To answer that point of order, I am sure the Right Hon. Leader of the Opposition (Mr. Clark) recognizes that the hon. minister is making a statement and that he is free to make a statement in the manner that he wishes. Unfortunately the Chair has no power and no desire to intervene in the style of any hon. member of the House.


Marc Lalonde: Madam Speaker, I only have a few minutes remaining.


Flora Isabel MacDonald: It is tough to back down, Marc.


Marc Lalonde: I am sorry it is getting so close to home for the Conservative Party and its leader. In effect, the record speaks for itself.


Charles Joseph Clark: Yes, indeed.


Some hon. Members:: Hear, hear!


Marc Lalonde: Last year we had Bill C-48, the Canada Oil and Gas Act, which provided for much more Canadian participation and control of Canada lands which belong to the people of Canada. What did we see? We stood for Canadianization at that time, and the Conservatives voted no.


An hon. Member:: We saw confiscation.


Marc Lalonde: There are a number of bills which are now before the House-Bill C-101, Bill C-102, Bill C-103, Bill C-104 and Bill C-105. They all stand for Canadianization. On every one of those bills the Conservatives voted no.
Surely this is evidence, if evidence is needed after Conservative efforts to destroy Petro-Canada, that the Tories have opposed every measure brought forward to promote Canadianization in the country.


Arthur Ronald Huntington: That is because we support the people.


Charles Joseph Clark: Tell us about Alsands.


André Ouellet: Order!


Madam Speaker:: Order, please.


Marc Lalonde: What we are doing now is what the Conservatives promised to do in 1974. This is what they oppose today on every occasion, in every forum, under the guise of any justification. Conservatives now dismiss Canadianization as being confiscation-and I heard that word being used opposite tonight-or theft and piracy. We on this side of the House believe that Canada's natural resources are owned by all Canadians and should be developed to the benefit of the Canadian community.


Charles Joseph Clark: Is this why you chase our producers to the United States?


Marc Lalonde: Petro-Canada today has been restored to full health-


Some hon. Members:: Oh, oh!


Marc Lalonde: We have the evidence tonight that the Conservatives have not accepted it as yet. The Conservative energy critic warned Canadians that "PetroCan is here for the moment and there's not much we can do about it. We'll see what the situation will be once we're back in power".
Finally, a radio interviewer asked the Conservative energy critic to offer a constructive alternative to the NEP. The hon. member for Calgary Centre (Mr. Andre) then replied: "Of course we have alternatives to offer to get rid of the National Energy Program. We would replace it with what you had before." That is the Conservative view of the future-a return to the past.


Some hon. Members:: Oh, oh!


Some hon. Members:: Hear, hear!


Marc Lalonde: For Canadians the choice is clear-


Charles Joseph Clark: Turn and run, Marc!


Marc Lalonde: -this government's National Energy Program or the Conservative Party's no energy program.


Charles Joseph Clark: Turn and run!


Marc Lalonde: The National Energy Program represents a bold initiative. Canadians, under those programs, are taking their energy future in their own hands, determined to build on their energy strengths. Much has been accomplished. Much remains to be done.


Gordon Edward Taylor: More socialism!


Marc Lalonde: Tonight, I have spoken of measures we have taken in the areas of production, conservation and oil substitution. There have been changes in the past. No doubt there will be changes in the future.


Charles Joseph Clark: What's next, Marc?


Marc Lalonde: However, our fundamental commitment-
May 31, 1982


Charles Joseph Clark: When is your next retreat, Marc?


Marc Lalonde: -to provide Canadians with greater opportunities for their oil and gas industry, to ensure a fair deal between producers and consumers and to achieve energy security for all Canadians is there and will remain unchanged.


Some hon. Members:: Hear, hear!


Michael Holcombe Wilson: Madam Speaker, we have just seen the most shameless defence of the worst economic disaster that this country has seen-


Some hon. Members:: Oh, oh!


Michael Holcombe Wilson: -probably in our history.


Some hon. Members:: Right on!


Michael Holcombe Wilson: This major reversal is probably the greatest reversal that we have seen, with one exception, that being the time on December 18 when we stood here and watched the Minister of Finance (Mr. MacEachen) step back and take in all his dirty laundry on the budget. But there is still more to come on that, and we cannot wait for the next one.


André Ouellet: Which multinational do you represent when you are speaking like this?


Michael Holcombe Wilson: Madam Speaker, this National Energy Program has been the greatest disaster that we have seen. We have seen 40 per cent of the rigs leave the country. We have seen 15,000 jobs lost. We have seen the Alsands project killed and the Cold Lake project killed, and the minister has waited 18 months to do something about this disaster.
The Minister of Finance and the Minister of Energy, Mines and Resources (Mr. Lalonde) have used the Canadian economy as an experimental laboratory for their own selfish socialist policies.


Some hon. Members:: Hear, hear!


Michael Holcombe Wilson: It has been a disaster and all Canadians are suffering for it, suffering through high gas prices, through high interest rates, through loss of employment and through greater reliance on unstable sources of oil in the Middle East. First the Minister of Finance and now the Minister of Energy, Mines and Resources have eaten a large plate of crow. The problems were addressed by the minister tonight. Make no mistake about that. These problems were caused, First and foremost, by the energy policy which he announced in October of 1980. This misguided, misunderstood policy, the ivory tower view that he thrust upon all Canadians on that night, has damaged the most promising industry that we have in our country. At that time it was a source of strength for our economy.


Mr. Gustafson:: It was booming.


Michael Holcombe Wilson: It was the one source of strength which could have carried us through the recession that we are in today. But now this industry is struggling for survival. I repeat, the minister has Finally realized, after 18 months of dithering, wondering what he could do to pull himself out of the muck,
National Energy Program
wondering how he could get this industry partly back on the rails again, recognizing that there was a disaster which had to be addressed, the rigs having left the country, the Cold Lake and Alsands projects having failed, that the exploration which was running at a rate of increase of 31 per cent per annum has now, since October, 1980, been reduced by 2 per cent per annum. That is the effect that his policy has had on the industry in this country.


Charles Joseph Clark: Make him stay!


Michael Holcombe Wilson: But let us also look at what he has done tonight.


Flora Isabel MacDonald: He has just left the House.


Michael Holcombe Wilson: The minister has left the House, I see.


André Ouellet: He will be back, do not worry, but with what you are saying, he could go away.


Michael Holcombe Wilson: The minister has put together a patchwork quilt in trying to understand the impact of this on the industry. He is only tinkering with the problems brought about in October of 1980. He must understand that he cannot put Humpty Dumpty together again just by this fragmented policy approach. The loss of confidence in the industry, the lack of trust in government and the lack of credibility of the government in the eyes of many people in the oil and gas industry will take years to regain.
I should draw Your Honour's attention to the fact that in 1974-75, the last time we had this sort of disaster in the oil and gas industry, it took three years to recover, but that was when the oil rigs which had left the country amounted to only about 10 per cent, compared with 40 per cent this time. No one believes the statistics used by the minister tonight. He is well known to be a master at twisting numbers to try to tell a story, but people who know the story never believed and never will believe it. This approach will not regain the conFidence in that industry that we must have if we are to recover.
We should also recognize that the degree of intervention, regulation, big lever-pulling by the Minister of Energy, Mines and Resources stays. Nothing has changed to remedy that major problem which has caused those in the industry to back off and to move their rigs and their people south.
The third point I should like to make concerning the program announced tonight, the update, is that the minister has said that this $2 billion program will save the industry. He takes substantial credit for it, and he says that it is all his doing and that he is paying for it. He said that the consumers will not pay a nickel for it. He has never got it through his head that the consumer pays for everything. Directly, in this program, the consumer will be paying 30 per cent or $600 million of the total program of $2.1 billion. That is the sort of thing that he has laid on the consumer tonight. He has ignored the fact that gasoline prices in Canada are at 10 cents to 20

May 31, 1982
National Energy Program
cents higher per gallon. I have the statistics here if the minister wants to quarrel with those figures. These are figures which are right up to date as of today in May of 1982, compared with the figures of January, 1982, in the document he laid before the House. The situation has changed. The lines are crossing and consumers will be paying more and more because of the program he has announced tonight.
The other point 1 want to raise concerns the fact that the minister said the Conservatives wanted consumers to pay the full world prices. That is absolute nonsense.


André Ouellet: He said 85 per cent.


Michael Holcombe Wilson: He knows that we changed our energy program from what it had been at the time of the last Liberal government. We reduced the relationship to world price by 5 percentage points.


Some hon. Members:: Hear, hear!


Michael Holcombe Wilson: That is the difference. We took that first step. If we had not taken that step, I do not believe that this government would have done anything close to what it is doing today.
The fourth point is that it is very important to recognize that in the announcement tonight there are still many "ifs" and there will be many doubts on the part of the industry. There is no assurance that imports will not be decreased to ensure change to the current shut-in of Canadian production, which is costing Canadians money and jobs. There is no assurance that the natural gas pricing formula, only with regard to the gas which has been authorized for sale to the United States market, will be changed to allow that volume of gas to be sold on the market and to save the many Canadian-owned oil and gas companies which are suffering because such a tremendous amount of natural gas is shut in.
Finally, and this is a key point, there is no assurance that the minister will not again change the rules of the game. There is no assurance that when things improve, as they undoubtedly will in time, he will not change the rules of the game again to the detriment of those people who have invested their hard-earned money in this industry.
Let us make it quite clear, the National Energy Program is a proven disaster. It is a major policy error on the part of that minister. When it was introduced, the energy program was recognized as being a disaster.
The minister showed himself at that time to be totally out of touch with the realities of that industry. He showed no understanding of the impact. He closed his ears. He said he would listen but would not do anything. It has taken him 18 months to do something. He sat in his ivory tower on Booth Street saying he was listening to everybody, but there was no action.
Now the minister has brought in some changes, but they are not the solution. It is too late to bring about the changes that are needed to rebuild that industry to the strong vibrant position it was in two years ago. To say tonight that he is sorry,
to make this public admission that he has been an incompetent, misunderstanding minister, is no substitute for the good judgment that Canadians expect of the Minister of Energy, Mines and Resources when bringing in such a major program as this a year and a half ago.
The credibility of the Government of Canada in the eyes of the industry will not be won back by a single announcement. It will only be time, a stable policy and the positive working relationship with the industry that will allow the Government of Canada to regain the trust and confidence of the industry.
We have seen over the past 18 months and will see over the years and months ahead that Canadians will suffer through higher prices which they will be forced to pay for gasoline and heating fuels. They will have higher interest rate levels than would have been the case had we not had this energy policy. Canadians will suffer through job loss because of the lack of activity resulting from the cancellation of two major projects plus the slowdown in activity in the conventional side of the industry.
Does the announcement tonight stabilize the price to the consumer? I say no. I believe we will see an increase in price as a result. Does this provide any help to the consumer, the home owner, the farmer, the small-business man, the fishermen, who are fighting high interest rates and high costs for energy? There is no relief offered. There is no mention of the energy tax credit that we have been calling for in this House for three years.
We should also recognize that the primary objective of the National Energy Program is out the window. Self-sufficiency for the industry by 1990 is totally out the window. Any knowledgeable observer will tell you that. Anybody who has any understanding of the industry does not believe anything that the minister has been saying time and again. Starting in October, 1980, he has been saying that the goal of selfsufficiency of oil supplies in this country is easily attainable and we will attain it. Each time the minister makes these adjustments or changes to the policy, he admits in public to all Canadians that what he was saying before was not true for he did not understand what he was saying. We will not reach oil self-sufficiency by 1990. Surely that is clear to the minister by now.
The only way to achieve the goal of self-sufficiency is if the minister, together with his colleague the Minister of Finance, runs this country so far into the ground that the demand for oil and gas is reduced so greatly that there is not the need for the oil and gas that we hoped we would have with a vibrant, thriving economy. That is the nature of the problem. That is why we are not going to see oil and gas self-sufficiency in this country. The minister can talk all he wants about this goal, but he knows deep in his own black heart that it will not be reached.
The minister has said all along that the policy he brought forward has been recognized as a very positive development in the country and has been so right from the start. During the
May 31, 1982

course of this afternoon I was looking at a number of statements that had been made over the years. These go back to late 1980 and early 1981, the early days after the energy policy was announced.
This shattered industry did not just happen. It was not brought to its knees by the oil glut, high interest rates or weak international economies. These have been factors. Let us go back to 1980 just after the energy agreement was announced. Data Resources, a very well qualified organization, said that the National Energy Program will be extremely costly for this economy. Let me just quote:
-the costs of the NEP would include foregone economic growth-
We have seen that.
-lower real incomes-
We have seen that.
-lost employment-
We have seen that.
-and a delay in reaching oil self-sufficiency.
Others have commented on this as well. The president of the Toronto-Dominion Bank said, "The energy program could lead to a national economic disaster." Darcy McKeough, the former treasurer and energy minister in the Ontario government-


An hon. Member:: Non-partisan.


Michael Holcombe Wilson: He is a non-partisan gentleman now. He said:
-this country is embarked on courses of action which are destructive in their impact, no matter how superficially attractive they may be in their objectives.
He was pointing out that the attractions of Canadianization are very beguiling. There is a great attraction, as the Minister of Energy, Mines and Resources said.
We recognized the importance of Canadianization and brought this forward in our policies before the Liberal Party even understood the importance of Canadianization. They were still pushing the industry into the hands of multinationals and foreign owners. We recognized the importance of it. We also recognized that it has to be done in a way that can be accepted by the marketplace, rather than have Canadian ownership forced on it. 1 will come back to that in a minute. Others have commented on this as well. The Canadian Institute of Real Estate Companies said there is a fear that the energy program will increase, rather than decrease, Canada's dependence on insecure sources of foreign crude. Another person who commented on this that 1 would like to refer to is Wayne Clendenning of Richardson Securities. He felt that the energy program ought to be changed substantially.
All of these gentlemen, very knowledgeable people in the oil and gas industry, called for these changes in late 1980 and early 1981. Why did we have to wait a full 18 months before the minister saw fit to make a change? The main reason is his inflexibility and arrogant attitude. He said to everyone who told him that he was wrong that he was right and no one would cause him to change? No one could tell him he was wrong.
National Energy Program
It was only when the industry was literally brought to its knees, with 50 to 60 companies coming to Ottawa again and again to plead with the minister to please get some sense into his head and make the necessary changes to bring about some return of health to the industry, that he took some action.
I wish to make some brief concluding remarks. I am glad the minister has returned to the chamber to hear them. Let me say to him that the greatest contribution he could make to the energy future of this country would be to resign.


Some hon. Members:: Hear, hear!


Charles Joseph Clark: We give unanimous consent.


Michael Holcombe Wilson: The display by the minister tonight, practically breaking his arm patting himself on the back, with all the self congratulations that he could muster about the great things of the energy program, shows that he still does not understand the damage that he has wrought upon this industry and the changes that are still necessary to bring that industry back to health.


Walter David Baker: His eyes and mind are closed.


Michael Holcombe Wilson: He should resign and let someone else bring in these policies that will try to undo some of the terrible damage that he has brought upon this industry. He has alienated large parts of western Canada. He has done tremendous damage to the fabric of this country.


Charles Joseph Clark: He doesn't care.


Michael Holcombe Wilson: There is 18 months of delay that he has let go by while the feelings of Canadians in western Canada have become more and more concerned about the impact of central Canadian policies, federal government policies, as they affect western Canada.


Charles Joseph Clark: Lalonde doesn't care.


Michael Holcombe Wilson: Finally, he has set back self-sufficiency probably for a full decade. That is the nature of the damage that he has done to this industry.


Mr. Hnatyshyn:: Shame!


Michael Holcombe Wilson: There is nothing more stupid than a brilliant person who is too arrogant, too stupid and too inflexible to understand the mistakes that he has made and to bring about the changes that are necessary to undo those mistakes. That is the nature of the minister we have today, and that is why 1 say to him that he should resign.


An hon. Member:: Resign.


An hon. Member:: Right on.


Some hon. Members:: Hear, hear!


Michael Holcombe Wilson: Madam Speaker, in closing, let us look at the three elements of the National Energy Policy. The first, Canadianization. The Canadianization policy as it has been

May 31, 1982
National Energy Program
implemented by this minister has been a disaster, because it has given false hope and encouragement to a number of Canadian companies to do something more than what they should have been doing. We have increased Canadian ownership, yes, that is correct, the numbers are there; but we have crippled a number of those Canadian companies who took in the words of the minister. They have found now that they are put in such a desperate position that they are unable to compete in this industry. By comparison, the multinationals are much stronger today, relative to the Canadian-owned companies, than they were back in 1980. The minister would have been much better off doing nothing, letting the market forces move their own way.
The minister commented on the fact that we have voted against some of these bills that are implementing Canadianiza-tion. He is absolutely right, and I am proud of the fact that we have.


Some hon. Members:: Hear, hear!


André Ouellet: He is a true Canadian.


Michael Holcombe Wilson: He said he is going to bring the industry back to full health. If he brings the industry back to full health in anything like the methods that he has used in putting the industry in the position it is in today, God help the industry.


Gordon Edward Taylor: It will be in the coffin.


Michael Holcombe Wilson: When was the last time the minister walked the streets of Calgary talking to the people who have been affected-


Charles Joseph Clark: Without a guard!


Michael Holcombe Wilson: -by the industry that he has damaged so severely? That is the question that the minister should ask: when should he go back to Calgary?
The second element of the energy program was fairness in pricing, fairness in revenue sharing. I look at this program tonight, Madam Speaker, and I see no fairness whatsoever to the consumer. I see high prices, and high taxes to the Government of Canada, continuing as before, some cut-back in the government take but very, very high levels of taxation, and certainly no change in prices. As I said a minute ago, the consumer will be paying 30 per cent of this program.
Let us just look at the fairness to the industry. When we started off on this charade of an energy program in 1980, the minister was concerned because the energy industry had 45 per cent of the revenues. He knocked it down to 36 per cent and said: "That is what we should be doing to bring in a certain degree of fairness." Well, Madam Speaker, you may not have noticed the number in the presentation the minister made tonight. The number that he has brought the industry back to is 46 per cent. What have we been doing for the last year and a half? We went back to where we started as far as it relates to the share of the revenues that the industry has.
Look at what has happened to the industry. It has been decimated by the damage that was done in that intervening period. They will have to use a large part of those revenues to rebuild their financial strength. They will not be able to reinvest those in the development of our energy reserves. The minister should have stayed in bed; he should not have brought in that energy policy a year and a half ago.


An hon. Member:: He should not have got out of it.


Michael Holcombe Wilson: The final objective of that national energy program of October 1980 was self-sufficiency by 1990. That, as I said earlier, Madam Speaker, is totally a lost cause. It has gone out the window, that objective. The only way, as I said, is if we continue in recession the way we are now and the demand for energy products goes down so severely that we just will no longer need it. But that is not the way that we on this side of the House want to achieve self-sufficiency.


Some hon. Members:: Hear, hear!


Michael Holcombe Wilson: The minister has pointed to Hibernia and the Beaufort Sea as the main promising parts of our energy future that will bring about oil self-sufficiency.


Donald Alex Blenkarn: Alsands.


Michael Holcombe Wilson: He never mentioned, not that I heard in his whole speech tonight, he never mentioned the impact of the loss of Alsands and Cold Lake. I refer him back-I do not think he likes to remember this-to the numbers in the energy program itself. It had production of about 1.4 million barrels a day. Of that, 715,000 was from the Alsands and Cold Lake and other synthetic crude projects. Those are gone. He just totally ignored the fact that they are gone. They have disappeared into thin air, and he does not acknowledge the fact that they have had a major impact on the ability of this country to reach self-sufficiency.


Ramon John Hnatyshyn: More business for Mexico.


Michael Holcombe Wilson: Now, Madam Speaker, the minister has supervised the most damaging national policy that we have seen in our history.


Donald Alex Blenkarn: Right on!


Michael Holcombe Wilson: He has bled the oil and gas industry dry. He has bled the country of well qualified technical people. He has bled the country of valuable capital dollars. From the date that he came into office, we have watched the level of the Canadian dollar go from 87 cents to 80 cents. He has also used this energy policy to bleed consumers through the high taxes that have been used to bring in money to that voracious spender, the Minister of Finance.
That is why this minister must resign, Madam Speaker; and I plead with you, and I plead through you to the minister, not to stop now. This energy policy is still a disaster. It still needs major surgery. Either the minister can face up to this or he should move over and let someone else take over his job.
May 31, 1982


Some hon. Members:: Hear, hear!


Mr. Ian Waddell (Vancouver-Kingsway):: Madam Speaker, the member who last spoke, the hon. member from Etobicoke Centre (Mr. Wilson), said "God help the industry", meaning the oil industry. I do not know if he read the same material as I read tonight. I understand that the small producer and other producers got a PGRT credit worth $900 million. The PGRT as a tax was reduced from 12 per cent to 11 per cent, giving the industry $200 million. The PGRT was reduced on the integrated oil sands projects, another $125 million. The IORT, another tax, was suspended for one year, that is $250 million. A new category was created called the old-new oil, meaning $75 million to the industry. The NORP price to existing tertiary recovery meant $300 million to the industry. NORP to experimental projects meant $100 million to the industry, and NORP for suspended wells, meant $100 million to the industry. That is a total of $2,050 million, or $2 billion to the industry. Well, God has helped the oil industry. God has just helped the oil industry, Madam Speaker; the oil industry have drilled for oil, and they have found it here in Ottawa.
Tonight the minister must feel like a Glace Bay coal miner; he has just been through a cave-in. He calls this new program the National Energy Program update. That is doublespeak if I ever have heard it. This is not an update. It is an upper for the oil companies, but it is a tragic downer for the Canadian consumer.
It is true that some small Canadian oil companies were hurting as a result of the National Energy Program and its taxes. They were hurting and needed some help, but under the program tonight Imperial Oil will enjoy-and I have counted them-six changes which will help. There will be changes in the PGRT. Imperial Oil will get help proportional to its production. It will get help with respect to Syncrude, tertiary recovery, enhanced recovery, experimental recovery and the IORT. When we ask for money for medicare in this country, the government cannot find it. When we ask for money for pensioners, the government cannot find it. When we ask for money to help the unemployed get jobs, the government cannot find it. But, boy, it finds $2 billion for Imperial Oil and the others. That is just incredible.


Lorne Edmund Nystrom: Shame. And the Tories want more.


Ian Gardiner Waddell: Not only does the government find the money, but what this money can be used for is also positively dangerous. If we read this program carefully, we find that there is nothing in it like a performance guarantee which would say what this $2 billion has to be used for. The money can be spent by companies abroad. It can be invested abroad. It can be used to pay debts. It can be used to take over Canadian companies. It can be used to pay dividends to American shareholders. This is an industry that is 70 per cent foreign owned, mainly American. There is nothing to protect the consumer. There is nothing to protect the taxpayer.
National Energy Program
Last year there was a 30 per cent increase in the cost of energy to the Canadian consumer, and in the package tonight there is nothing to help the Canadian consumer.
Last September Premier Lougheed and the Prime Minister (Mr. Trudeau) made a deal. They split up the pie. The energy industry lobbied for a year and a half. Every day in the House members of the Conservative Party supported big oil. They constantly stood and asked for a better break for big oil. Tonight they got that break. Tonight they got $2 billion, but who was there to represent the consumer? How was the interest of the consumer protected? There is nothing tonight.
The minister says we are lucky to be paying less than world prices. Since 1980 the price of a barrel of oil in Canada has gone up from $14.75 a barrel to over $30 a barrel. Much of that oil was found when the price of oil was low and it was cheap to explore for oil. Companies used to tell us they could develop tar sands for $6 a barrel. Now oil costs $30 a barrel in Canada. Some of that oil which was found between 1973 and 1980 was what was called old oil. Under the old agreement it was called old oil. Under the package tonight-and this is what really hits the Canadian consumer-there is a new category called "old new" oil. What does "old new" oil mean? "Old new" oil means the companies will get higher prices for it. There will be higher prices for oil as a result of this retreat tonight. Where will the money come from?


Gordon Edward Taylor: Alberta.


Ian Gardiner Waddell: There will be an oil price increase of $2.25 a barrel in July. There will be another increase of, I think, 25 cents in August. I think there will be another $4 increase in January of 1983 and another $4 per barrel increase in July. The government has been collecting a petroleum compensation charge, and that charge has been to make up for buying expensive offshore oil. We buy offshore oil because in the early 1970s we exported all our cheap oil. Now we have to buy offshore oil. The government was in fact making money on the petroleum compensation charge because the price of offshore oil has gone down. Prices in the world market have gone down. Instead of the Canadian government's saying to the consumer that since there is extra money, the consumer will not have to pay increases at the pumps, what does the government do tonight? It recycles the money into the "old new" category and pays the oil companies more money. The consumer is affected directly as well as indirectly. The government is forgoing $2 billion in revenue. The minister says we are not taxing; we are just forgoing revenue. Where is the government going to get the $2 billion? There are two ways by which the minister could get it. He could get it by increasing personal taxes, or he could get it by eliminating government programs. So, the consumer and the taxpayer suffer again tonight.
In 1980-81 the cost of heating an average home with oil in Canada was $770, but last winter that cost rose to $1,170. The annual cost of gasoline for the average motorist in 1980 was $730, and in 1981 it was $945. I do not have the statistics, but I am sure my colleagues from farm areas could tell me about the increased prices farmers have to pay to operate their

May 31, 1982
National Energy Program
vehicles and to supply energy to their operations. There is nothing in the package tonight to help the Canadian consumer.
I just returned from my riding today. I had an open house in my office in the east end of Vancouver. People came to see me. They came with their hydro bills and told me they are going up. They came in with their heating bills and told me that they were going up. Some told me that their pensions are increased by 8 per cent or so but that their energy costs have gone up 30 per cent. There is nothing in this package to help.
What does the government do? Does it give some money to old people? Does it give some money to people on fixed incomes? No, it gives money to Imperial Oil and the rest of the industry. It gives the industry $2 billion. This is an industry which was one of the richest in Canada.


Mr. Benjamin:: Still is.


Lorne Edmund Nystrom: Joe Clark's friends.


Ian Gardiner Waddell: My friends to the right ask for free enterprise. Is free enterprise giving $6.5 billion in PIP grants to this industry? Is free enterprise bailing out Dome Petroleum? Is free enterprise giving super-depletion allowances and further grants? Is that free enterprise? If it is, I would like a little bit of that free enterprise to be given to some of the people who come into my office.


Some hon. Members:: Hear, hear!


Ian Gardiner Waddell: In 1979, the Canadian taxpayers put up 61.7 cents of every dollar of oil company profits. The oil companies in this country have $4.3 billion in deferred taxation revenue. Under PIP some companies will get 93 cents of every dollar spent from the taxpayers of Canada.
My party is not against the small Canadian oil industry. Part of the problem of the National Energy Program is that it has backfired. What has happened is that companies like Imperial Oil, Gulf and Shell, because they have downstream refinery operations and marketing operations, could weather the heavier taxes. Smaller Canadian companies, in the upstream were suffering, so it is partly right that the minister should change the PGRT with respect to small companies. However, the $250,000 minimum amount and which companies will not have to pay the PGRT are not defined. This applies to all companies. It should be better directed and there should be a performance test as to what is done with the money.
I noticed the minister's style and tone tonight. I know when you are in retreat you have to make a defence. The minister is a good lawyer, and he knows that the best defence is a good offence, so he projects a confident style. However, let us look at the National Energy Program and leave aside all the rhetoric about how it is socialist, which it is not. Let us look at it from a practical point of view.
One of the bases of the National Energy Program was that world energy prices were going up. This is hindsight. The Department of Energy, Mines and Resources should have
known last September, as most other competent analysts in the world knew, that there was going to be a glut of oil. I see the minister laugh but I think his department should have known that. This program was based on oil prices continuing to go up, but instead prices have fallen. There has been conservation in Canada and that is a good thing, but I would remind the minister that he is cutting out $23 million for municipalities for energy conservation and, on the other hand, is giving $2 billion to the oil companies. We could have a lot more conservation if we put some of that money into the effort.
The real problem is that there is a recession in this country. That is why energy conservation will come about. I hate to say . that that is part of the reason, but we have had a recession. The problem with the National Energy Program is that the planners in the department looked at the oil industry and thought that it was making tremendous profits. It is different from our manufacturing industries which had to go to the banks to borrow money when they wanted to expand. The oil industry just had to take the money out of cash flow. Any time they were challenged, as the government challenged them in the early 1970s, they just lobbied and had the program changed. History is repeating itself tonight. They had a big cash flow so they explored and found mainly natural gas and some oil. There was tremendous pressure to export that natural gas.
The minister and his department came along with the National Energy Program and started taxing the industry- until the minister retreated tonight. Then the industry found that, like other industries, it had to go to the banks. It spent a lot of money for borrowing and taking over private Canadian companies as the minister encouraged it to do, but suddenly we had recession and high interest rates, and it found it was hung out to dry. That is why the industry is in trouble now.
If the minister really wanted to help the industry he would not go back and give it $2 billion. He would look over to his colleague, the Minister of Finance (Mr. MacEachen), and ask him to lower interest rates. That would help the industry, and that is the way to do it.

I wonder why the Government of Canada, at a time like this, has decided to hand $2 billion over to the big oil companies in Canada. The government does not have the money to spend on health services or education or unemployed workers in this country, so I fail to understand, Madam Speaker, how the Government of Canada is able to find $2 billion to help these big companies which are very, very well off, and why-


Walter David Baker: Shame!


Ian Gardiner Waddell: -the Government of Canada does not have the money to help the poor people in this country.

I wanted to mention that the announcement tonight encourages further gas exports. I just returned from Calgary, and I would point out to the minister that there are other ways of doing this. We do not have to export all our cheap natural gas
May 31, 1982

because if we do, we will have the same problem that we have with oil. When the minister was in opposition he said that it was necessary to work with Alberta to get a pro-rationing system, and that it was necessary to clean up the marketing system. Madam Speaker, the marketing system is in a terrible mess in Alberta.
There is nothing in this announcement about a gas bank, Madam Speaker. The minister spoke about a program of switching from oil to gas, and that is a good program which should be expanded. The pipeline to the Maritimes and other places should be proceeded with. We cannot encourage Canadians to switch to natural gas and then not be able to supply it at a reasonable price in the years ahead. That would be a complete disaster.
The hon. member for Etobicoke Centre (Mr. Wilson) estimated that this package would cost consumers about $600 million. My estimate is that it would cost consumers $1.2 billion. I would remind my friend to my right that both they and the Liberals have, not misled the Canadian people, but have given people the idea that there would be cheaper energy in Canada.
I see an hon. member pointing to the minister. His party, when in government brought down an 18-cent excise tax, but it was projected to go up and up and up. The Conservatives would have brought in a huge increase in the price of energy, and they cannot say otherwise. All they have to do is to read their own budget. Now the minister, in a Liberal government, had a chance to lower the petroleum compensation charge to make energy a little cheaper for the average Canadian, but he opted for aiding the industry. I guess he wants to be Minister of Finance because he certainly aided the industry tonight.
I think I have made the points I have wanted to make, Madam Speaker, and tomorrow 1 hope to suggest some alternative ways to aid the Canadian consumer. Tonight we have seen a sell-out and a retreat. We have seen a rich industry, with some companies that need some help, given general help of $30 billion at a time when there is no money for health, education, employment, job creation, pensions and so on. That money has to come from somewhere, Madam Speaker, so it will come from forgone revenue and from the consumer, it means further cutbacks in government programs.
These are our oil resources, Madam Speaker. We do not have to get on our knees and be grateful to the oil companies. These are Canadian resources, so we should not have to pay OPEC prices. We should be giving the Canadian consumer a break. Of course, we should encourage conservation in all the ways we can. We have to recycle that money.
Judging by some of the public opinion polls, some people in this country think that our attitude toward energy is too conservative and we should Canadianize more quickly and by 1990 have a 75 per cent Canadian-owned industry. Some people think we should make Petro-Canada the leading oil company in Canada. That is not what we get from this announcement, nor do we get a limited amount of help for small companies, but rather this broad brush stroke that will help Imperial Oil and Dome. My colleagues and I sit and cry every night. We are losing sleep over poor Imperial and poor
National Energy Program
Dome which have taken so much money from Canadian taxpayers in the past.
The sad thing about this announcement tonight is that not only is the minister in retreat but that a program which could have been good has been messed up by a tax regime that is getting worse because we are backtracking.


Walter David Baker: You put them there.


Ian Gardiner Waddell: We did not put them there. We voted against an incompetent government with high oil prices. The people put them there.
As Frank Scott the poet said, this country is silent, waiting to be developed and to be born. We have all the resources known to mankind. We have the heavy oil deposits in Wain-wright, Lethbridge and Lloydminster. The oil is out there. We do not have to do what the minister has done. No oil has been produced from the Beaufort Sea, so how is that to bring us self-sufficiency? This energy policy, in spite of the face the minister puts on it, is in tatters. Tonight we are witnessing a retreat which would do Napoleon proud. When there is so much to be done, when there are so many people who call for help to pay for heating oil or gasoline, who is speaking for them? Basically what this program tonight comes down to is more money for oil companies. It is NEP-2.


Michael Holcombe Wilson: Madam Speaker, the minister made reference to the fact that the petroleum compensation charge would be the same or possibly lower. In view of the fact that inflation is such a terrible problem for the country, and many people on fixed incomes are suffering terribly from the increasing prices of energy, why did the minister not make some commitment to reduce the petroleum compensation charge so that Canadians could have some assurance that we will see a levelling off in the escalation of energy prices?


Marc Lalonde: Madam Speaker, the petroleum compensation charge is set at a level to pay for the cost of imported oil, the cost of new oil and oil coming from the tarsands. Under the agreement with Alberta the federal government is not going to make money from that charge. Over the period 1981 to 1986 the moneys received under that charge should balance out. We are working to try to keep it reasonably in balance every year, but there will be years of a relatively small surplus or a small deficit. I can tell my hon. friend that, barring unforeseen developments in the price of oil, towards the end of 1982 1 expect to be able to recommend a reduction in the petroleum compensation charge on January 1, 1983.


Michael Holcombe Wilson: Madam Speaker, it would have been very helpful and reassuring if Canadians could feel that this policy was designed not just for one part of the economy, but to recognize some of the problems consumers are facing. My second question relates to rumours about government assistance to certain Canadian-owned elements of the oil and gas industry which are in some heavy financial difficulties. 1 wonder if the minister regards his announcement tonight as

May 31, 1982
National Energy Program
being a response to those problems, or whether there is a possibility of some further action by the government to respond to the situation?


Marc Lalonde: Madam Speaker, the measures announced tonight are of a general nature to help all the industry. As a matter of fact, as I indicated before, the weight of those measures is directed towards the smaller companies, most of which are Canadian owned. The greater benefits of this program are going to go to the small companies which have proven to be the most dynamic and positive elements in the industry, ones with the highest re-investment rate and ones that work in Canada to create jobs for Canadians. Those measures have to be seen in that respect, but they are of a general nature. Some elements in the program 1 have announced will be of benefit to some of the larger companies, some of which are in the situation referred to by my hon. friend. As far as individual Canadian companies which may have special difficulties at the present time are concerned, that is another issue and I have no comment to make on it.


Rodney Edward Murphy: Madam Speaker, my question to the minister has basically to do with what I think is the misleading nature of this document, and I do not mean that in an unparliamentary sense. The title indicates that it is a National Energy Program update. Yet when we look through it, we find that basically it is another statement on the oil and gas industries alone. If I look at page 67, I find only one paragraph on the western power grid. That is a megaproject which will provide hydro from northern Manitoba to Saskatchewan, and even to Alberta, to provide low cost energy. One paragraph out of this huge report is on the western power grid. The paragraph says that the government will give serious consideration to a request for financial support on that project. For a government which said it had ironclad guarantees on the Alaska pipeline, a government which said it was committed to reducing unemployment and interest rates and strengthening FIRA, if those are the hard words they have used for things they have not done, what the hell does "serious consideration" mean?


Marc Lalonde: Madam Speaker, as my hon. friend may know, there is a new government in Manitoba, and we wish it well. However, there have been some very preliminary discussions between that government and the federal government. There have been telephone conversations between the Premier of Manitoba and the Prime Minister (Mr. Trudeau), discussions between myself and the Manitoba minister of energy, mainly over the telephone, and approaches made to the federal government as to whether it would be ready to consider some form of support to the western grid, particularly through some financial technique, the details of which I would not want to get into at this time. These approaches were of a very general and preliminary nature. The federal government has indicated to Manitoba that it is willing to sit down with them and examine in a very positive way their proposal which, at present, is still very much of a general nature. Therefore, we
are not in a position at the present time to come up with a firm statement on exactly what we could do. Such a statement would be premature for the good reason that we have not yet sat down with the Government of Manitoba in that regard. We have indicated our general positive approach to their request, and this will be pursued over the next little while. 1 do not know whether it is a matter of weeks or months but we have had discussions in this regard.
My colleague, the Minister of Employment and Immigration (Mr. Axworthy), had discussions with some ministers of the Government of Manitoba as recently as last week, and he is following this file very closely indeed, and with great interest.


Rodney Edward Murphy: Madam Speaker, I have a very short supplementary question. I welcome the good news from the minister. However, there is one thing I would like to check. He has given the impression that this is just a new proposal that has come with the New Democratic Party government in Manitoba. Is it not true that this is something which has been under discussion between the previous Conservative Government of Manitoba and the federal government for a number of years? If that is the case, why are we still at the stage of serious consideration?


Marc Lalonde: For a very simple and good reason, Madam Speaker. Until quite recently there was no agreement between the two prairie governments-


Rodney Edward Murphy: Three prairie governments.


Marc Lalonde: Sorry, the three prairie governments, as to whether this particular project would go ahead. There has been nothing precise and formal to consider because the three governments were at odds, and sometimes rather severely at odds, on that particular project. It may have been that some approaches were made over the years of a very general nature, but there was really no project about which people could say it will cost so much and that this will be done this year or next year, etc.
It was not until we had an indication that the three governments were now ready to back the project and go ahead with it that we could start seriously considering the proposal or getting down to the specific points of it. We are quite ready to sit down with the Manitoba government with regard to this.


John William Thomson: Mr. Speaker, 1 have a few short questions. The minister took great pains this evening, both in his documentation and in his speech, to describe to us what a great success the National Energy Program had been. If it is that successful, why did the minister feel it necessary to offer tax relief to the extent of $2 billion to the industry?


Marc Lalonde: Madam Speaker, the success of the program has to be judged on the basis of several elements to which I have referred, namely, security of supply, opportunity for Canadians, and fairness in terms of cost to the consumer.
May 31, 1982

There is little doubt for any objective observer that the National Energy Program has proved to be a great success in that regard. As I have indicated, we have, through conservation and substitution in particular, reduced substantially our projected reliance on imports in this decade. We have increased significantly Canadian participation in the industry. We have a price regime that is fair and advantageous compared to any other industrialized country in the world. These are major achievements in themselves. But this particular industry is facing some difficult problems in terms of cash flow. We believe these problems will remain through 1983. We want this industry to be dynamic and we believe it is the engine of economic development for many areas of this country.


Michael Holcombe Wilson: It was.


Marc Lalonde: It will create jobs. Benefits will accrue all across the country. This is why we have decided to bring additional benefits at this time, bearing in mind and taking into account problems relating to lower sales than had been expected and higher interest rates than had been expected. That industry is facing serious cash flow problems. This is particularly evident in the smaller firms. This is why we have concentrated our efforts to help the small firms, most of which are Canadian.


John William Thomson: Madam Speaker, the minister appears very confident that the alterations he has made this evening will restore investor confidence in the industry. In June, 1980, before the National Energy Program was introduced, 461 rigs were operating in the western Canadian sedimentary basin. This morning only 121 rigs were operating in the western Canadian sedimentary basin. I think the minister may remember that I asked him a question immediately following the introduction of the National Energy Program. At that time the Toronto stock exchange index on oil stood at some 5100 odd points. Today it stands at 2600 points. That is a 50 per cent reduction.
Would the minister, being as confident as he is that these changes will restore confidence to the industry, be prepared to offer his resignation in the event that during the next six months only 50 per cent of the 340 rigs, that is 170 rigs will go back to work? I ask for only 50 per cent of them. If he is so confident that what he has put forward this evening will add perhaps 1,000 points to the oil and gas index on the Toronto stock exchange, which is proof of the pudding, does he have enough confidence to stand up and offer his resignation if we do not achieve those two things?


Rodney Edward Murphy: What about an ironclad guarantee?


Marc Lalonde: Madam Speaker, my friend is concentrating on drilling rigs. I remind him first that the Canadian Association of Oilwell Drilling Contractors before the introduction of the National Energy Program in 1980 said that because there was a surplus of natural gas they were unable to sell gas. That association expected a 40 per cent decline in the number of active drilling rigs in Alberta. That was before the National Energy Program was introduced and before the recession in
National Energy Program
North America which has led to further declines in demand for drilling rig activity.
My hon. friend often refers to drilling rigs that have left Canada for the United States. I remind him that many of these operators have not found the Eldorado they were expecting in the United States. A good friend of my colleague and a good friend of mine moved six rigs to the United States in protest against the National Energy Program. Out of his six rigs, he has five rigs inactive in the United States. They are doing nothing. He has one rig working in the United States.


Charles Joseph Clark: What does that prove?


Marc Lalonde: That is the state of affairs in the United States where there is no National Energy Program. I would urge my hon. friend to bear in mind the general environment and general context of the oil and gas industry at the present time, not only in Canada but around the world.


Charles Joseph Clark: Where is your courage, Marc? Put your seat on the line.


Marc Lalonde: One has to see the situation with that kind of perspective. We expect a large degree of activity in the oil and gas industry. As I have indicated, that industry finds itself now with roughly the same percentage of the total pie it had between 1975 and 1980. The percentage is 46 per cent versus 45 per cent during that period. But it is a much larger pie, a pie with $163 billion in it, while the previous pie had about $60 billion in it. The pie is larger but the percentage is about the same. If the industry cannot make it within that kind of environment, I am afraid even my hon. friend could not make it go.


Mr. Peter Lang (Kitchener):: Madam Speaker, I have a couple of questions for the minister. First, can the minister tell us whether he has taken any measures to alleviate the problem of potential shut-in volumes of oil and gas?
Second, on page 17, there is a table showing a comparison of projected revenues now with those anticipated in September, 1981. In that table, we see a projected decrease in the revenue of $25 billion. Can the minister tell us how much of this had been set aside for government expenditures, and what effect this reduction in revenues will have on the government's fiscal position and current account deficit?


Marc Lalonde: Madam Speaker, as far as shut-in oil is concerned, I have indicated that the government would immediately ask the companies to limit themselves to the minimum required under their term contracts with suppliers from abroad. This means in effect that there should be no purchase of oil on the spot-market outside of Canada. The program also indicates a number of other measures, such as financial support for swaps between Canada and the United States in the west in exchange for swaps in the east. We would want to discuss with the industry the possibility of setting up storage of shut-in oil in the west to take into account the fact that in certain periods there appear to be large shut-ins, while in other periods there is practically no shut-in oil.

May 31, 1982
National Energy Program
As to the last point referred to by my hon. friend, it is clear that the Government of Alberta, the producing provinces generally, and the Government of Canada see their revenues considerably reduced between 1982 and 1986 compared with the forecasts which were made at the time of the Alberta agreement last September because of increases which are less than was anticipated. Obviously this has an impact on fiscal arrangements, and the Minister of Finance will have to bear these facts in mind when he presents a review of the budget estimates over the next few years.


Madam Speaker:: At this point, a motion to adjourn the House under Standing Order 40 is deemed to have been moved and seconded-

The Right Hon. Leader of the Opposition is rising on a point of order?


Charles Joseph Clark: Madam Speaker, I rise on a point of order. I understand that there was unanimous agreement to give the Minister of Energy, Mines and Resources (Mr. Lalonde) the opportunity to make a statement on motions tonight. There are two points which I want to raise. One is that, to my knowledge, there was no indication at that time that there would be a limitation upon the right of Members of Parliament to put questions to the minister in relation to his unusually long statement. Indeed, there was no indication that the normal hour of ten o'clock would be invoked in these circumstances. Second, 1 think there is an open question as to whether or not the House is still at the stage of motions.
The House will recall that at an ealier stage this evening, without any notice to the deputy House leader of the Official Opposition, there was a request made for an opportunity to revert to motions to present a report of the Standing Committee on Indian Affairs and Northern Development. Since the deputy House leader of the Official Opposition had not been advised-and the House knows that the normal practice is to advise the deputy House leader or his representative in such a circumstance-consent was not given.
There has now been, as I understand it, some conversation with regard to the opportunity to have that motion presented again by a member now in the House, with the right under our rules to present that standing committee report. I know the House would not want, perhaps inadvertently, to act in a way which would prevent the will of a standing committee of the House from being heard.
For both those reasons, I beg Madam Speaker's indulgence to allow the House of Commons to continue its work past the normal hour of ten o'clock, first to allow us to question the minister on an unusually important and unusually long statement on motions and, second, to provide the House with an opportunity to consider again, now that all parties have been advised, the wisdom and the possibility of allowing the whole House to receive a report of a standing committee of the
House which, if not received today, would not become effective.


Yvon Pinard: Madam Speaker, the Right Hon. Leader of the Opposition (Mr. Clark) raised two points which are well covered by the Standing Orders. I am sorry to say that he is absolutely wrong on both of them. In the first point he raised he said that he did not expect, since we gave unanimous consent to allow the minister to make a statement in the House as opposed to outside the House, questions to be limited. He should know that in Standing Order 15(3) it is spelled out very clearly that after the statement of the minister Madam Speaker has the discretion to allow a few brief questions on the matter and that the length of time is left to her discretion. I think that after two hours ample time has been given, but in any case it is at your discretion. I am sure the minister will be here tomorrow during question period to answer further questions on the matter.
For the benefit of the Leader of the Opposition, I should like to quote Standing Order 15(3), which reads:
On Statements by Ministers, as listed in section (2) of this Standing Order, a Minister of the Crown may make a short factual announcement or statement of government policy. A spokesman for each of the parties in opposition to the government may comment briefly thereon and Members may be permitted-
It reads, "may be permitted", not must be permitted. It continues:
-to address questions thereon to the Minister. Mr. Speaker shall limit the time for such proceedings as he deems fit.
The standing orders are very clear. It is at Your Honour's discretion. It is not because we agreed to allow the minister to make his statement at eight o'clock tonight in the House of Commons as opposed to outside the House that we should automatically agree to long questions and agree to go beyond Standing Order 15(3). May I add Beauchesne's Citation 263-

-page 87, fifth edition, and I quote:
263. A brief question and answer period may follow the Minister's statement and Opposition comments. The length of this period is left to the discretion of the Speaker by the Standing Order.
Madam Speaker, I think it is quite clear you have been extremely generous and patient. Tomorrow, the minister will be in the House during question period, and at that time he will be able to provide even more appropriate answers to questions which, I hope, will be more sensible than those demanding his resignation, as was the case during the last comments made by hon. members.

The second point raised by the Leader of the Opposition (Mr. Clark) was that consent was denied to allow the chairman of the committee to table the report earlier this day. The chairman told me that there was an understanding among members of that committee that each of them would speak to
May 31, 1982

their own House leader about the requirement for unanimous consent allowing him to table the report at this time. In so far as I am concerned, even if the Tories had played a trick in committee this morning, I was nice and said, "Fine, no problem. We will agree that the report be tabled". But tonight at eight o'clock they denied that consent. We presume that their members on the committee who played the trick were able to put their act together and tell their own House leader that they wanted to give consent so that the report would be presented on time tonight. But they themselves denied that consent. They cannot get their act together, and they must suffer the consequences.
Let me point out also that the Standing Orders are very clear. Under the Standing Orders, when ten o'clock is called, all reports are deemed to have been made. Even if we were to consent now, it would be too late. So for all those reasons, we want Your Honour to call it ten o'clock.


Mr. Deans:: Madam Speaker, I just wanted to add that, from our point of view, we would be happy both to have the hour extended to allow for continued discussion and to have the motion from the standing committee reintroduced. We gave approval for it earlier in the evening. We would be happy to give approval again if the government House leader felt the urge to present once again the standing committee report.


Madam Speaker:: Well, it is past ten o'clock. It is true that I do have the discretion under Standing Order 15(3) to allow hon. members to ask questions when the minister makes a statement in the House, and I have done just that. But that discretion given to me under Standing Order 15(3) is limited by Standing Order 40 which tells me that at ten o'clock I must call the adjournment debate, and that is what I was prepared to do. I received no indication from anyone in the House that we were to go beyond ten o'clock. Therefore, in conformity with Standing Order 40-the Right Hon. Leader of the Opposition.


Charles Joseph Clark: I rise on a point of order, Madam Speaker. First of all, I regret that the government House leader referred to any party suffering the consequences of its actions in the House. That indicates a state of mind in his part which could bode ill for the future conduct in the House of Commons.


Yvon Pinard: Oh, you blackmailer.


Charles Joseph Clark: Let me simply rise at this point, since there has been the expression by the New Democratic Party of its interest in having the committee report of the Standing Committee on Indian Affairs and Northern Development presented. That was moved by an hon. member of the Liberal Party, the hon. member for Cochrane (Mr. Penner), and I believe it was supported by other hon. members of that party. Since the inadvertence, in terms of informing our deputy House leader, was on this side of the House, which I accept, and since our party, now that our deputy House leader has been informed of the circumstances, would certainly be prepared to allow the House to accept a report of a committee of the House, as Leader of the Opposition I would therefore like to ask the unanimous consent of the House of Commons to
National Energy Program
revert to motions to allow the most recent report of the Standing Committee on Indian Affairs and Northern Development to be received by the House as a matter of courtesy to hon. members of the House.


Yvon Pinard: Madam Speaker, there are two points. First, the Leader of the Opposition seems to recognize that it was the error of the Conservative Party that they did not give the appropriate consent earlier this evening. Considering that admission of error, and the fact that they cannot get their act together, I am willing to take their request under consideration and tomorrow see whether we can agree that the motion be moved by the chairman of the committee. I am not in a position tonight to give that consent.


Madam Speaker:: It is quite clear that the House does not give unanimous consent to have the report presented to the House.


Charles Joseph Clark: Madam Speaker, I am sure it was entirely by inadvertence that the government House leader, in offering to consider this matter, has overlooked the consequences of the committee report being considered tomorrow. That report, because of rules with which the Chair is familiar and with which the government House leader on reflection is familiar, if it is not received by midnight mnight, May 31, the end of our sitting for May 31, will be null and void. It will have no effect.
The minister, who spoke earlier of tricks, has, I am sure inadvertently, put himself in a position where he might be practising that sort of thing himself. I know he would not want to do that. I know he would want to give the House of Commons the opportunity to accept the report of the committee of this House. According to the rules of the House, we can only do that before the end of this parliamentary day.
If there is a delay until tomorrow, the Parliament of Canada will have acted deliberately to deny a report of a standing committee of the House of Commons to be considered by the House of Commons. I am sure that is a matter the House of Commons would not want to have occur.
Since the government House leader has indicated his willingness to look at my request in a positive way, now that I have brought to his attention the fatal implications for that report of the standing committee of his not agreeing to have that motion accepted now, in the interest of having some reasonable conduct and courtesy prevail in the House of Commons, he would be prepared now to give me the unanimous consent that I, in my capacity as Leader of the Opposition, request.
I am sure that other hon. members would be quite prepared, as I have been in the past, to extend the courtesy of accepting the request. I am sure they would return that courtesy tonight to allow Parliament to function.
After all, we are but a week away from the introduction of rules to reform the Parliament of Canada. If this is a demonstration of the spirit of a reference to a committee-

May 31, 1982
National Energy Program
Mir. Pinard: That was done today.


Charles Joseph Clark: Indeed it was done today. If on the very day the reference is made to a committee to allow Parliament to consider a reform of the rules the government acts in a spirit which denies Parliament the capacity to act, I am sure that matter would be deeply regretted by all members of the House. It could cast a long shadow over our subsequent ability to work productively together in this chamber.


Madam Speaker:: Before we go any further, I want to tell the House that there are two difficulties. The first is with regard to obtaining unanimous consent. Second, I have to inform the House that I do not have a signed copy of the report by the chairman. That is irrelevant if the House wants to give its unanimous consent. I am in the hands of the House. 1 can do all of these things if the House consents.


Yvon Pinard: Madam Speaker, the Leader of the Opposition (Mr. Clark) with honey voice talks about spirit. He must know what happened this morning. Committees do not usually meet on Monday mornings. The Standing Committee on Indian Affairs agreed to meet at the request of some members of his party who said they wanted to deal with substantive matters, not to vote on the estimates as such. The Tory party members played a trick this morning when they voted on one of the items, surprising the members on the government side because, once again, committees usually do not meet on Monday mornings. The trick was played then. The spirit must be considered in the light of what happened this morning in that committee. The trick was played by the Tories. Having that in mind, we must understand that it is not very easy for us who, knowing that we have been tricked, were willing tonight at eight o'clock, when the chairman of that committee rose to seek unanimous consent to table the report-including the trick of the Tories-to agree to that. The Tories said no. I rose on a point of order, asking it to be noted that the Tories said no. Now they want to play a trick, but they could not put their act together. It is as simple as that. Tonight the Leader of the Opposition talks about good spirit and he says we had better agree to the talking because the spirit might change. Just because of blackmail, the answer is no. We do not agree. We do not consent.


Some hon. Members:: Shame, shame!


Yvon Pinard: We do not like to be blackmailed, Madam Speaker, nevertheless-


Some hon. Members:: Oh, oh!


Yvon Pinard: Nevertheless, he should know that under the rules, by unanimous consent anything can be done. When I said to him that, despite all this, I was willing to consider his request and come back tomorrow, after having talked to the chairman of that committee-who is not here at this time-he
should have known that, by unanimous consent, we can go beyond the rule which says that by midnight a report is deemed to have been made. So I will not give in to his blackmailing tonight. We will give consent only after I have had the opportunity to speak-


An hon. Member:: Order, order.


Some hon. Members:: Hear, hear!


Madam Speaker:: It is obvious to the Chair that there is no unanimous consent for the request to table that report tonight.


Mr. Oberle:: Madam Speaker-


Madam Speaker:: Is it a question of privilege or a point of order?


Frank Oberle: A point of order, Madam Speaker. I must bring to your attention and to the attention of the President of Privy Council, the government House leader (Mr. Pinard) that I and several other of my colleagues in the House tonight are members of this committee. I fail to see that there were any tricks played. I do not know what was reported to the House leader, but there were no tricks.


Madam Speaker:: Order. I do not think I can entertain any more discussion about this particular problem. There is no unanimous consent. This was the request that was made by an hon. member. There is no unanimous consent. In my view, the question is final for the time being and it being ten o'clock-



PROCEEDINGS ON ADJOURNMENT MOTION

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

Benno Friesen: Mr. Speaker, it is clear that we have a problem in this country, and it is not only a problem of procedure in this House. Right now I am considering the problem that we face on the west coast, where customs officers have been directed by one of the ministers, or maybe by several of the ministries, to use banana republic tactics to abuse the Japanese auto importers in the port of New Westminster, the Fraser Harbour Commission and the Annacis Island. Mr. Speaker, that problem is symptomatic of a much deeper problem. The minister has resorted to that particular tactic of dragooning those importers and chastising them and the workers on the west coast, because of his abject failure in negotiating with the Japanese car manufacturers.
May 31, 1982

I think all of us will concede that it is not easy to negotiate with the Japanese manufacturers. They are very shrewd businessmen. They are very hard nosed and they are going to get as much as they can for their country. We understand that, we respect it, but we do not have to accept the failure of these ministers, and then to have that failure compounded by heaping abuse on the workers on the Pacific coast. Why should the workers out there suffer because of the bungling of the Minister of State for International Trade (Mr. Lumley) and the Minister of Industry, Trade and Commerce (Mr. Gray) and then make the Minister of National Revenue (Mr. Romp-key) the lackey to cover up their failures? That is the problem.
Today I asked the Minister of Industry, Trade and Commerce about the fact that bludgeoning tactics are being used on the west coast for a self-serving purpose of his ministry. The minister said he intends to preserve and maintain the jobs of several hundred thousand Canadians in all parts of this country whose lives are linked with the production, distribution and sale of automobiles and parts. Putting that into language all of us can understand, the minister is willing to sacrifice several hundred jobs in British Columbia to save several thousand jobs in Windsor. In terms of mathematics, I can understand that. In terms of morality, it makes no sense at all.
The problem lies deeper than that. There is an inability and an unwillingness on the part of this government to look at the sickness which exists in the car industry in Canada today. The problem is not that the Japanese are making good automobiles. The problem is that the Canadian industry is making automobiles Canadians would like to buy but cannot afford to buy. It is not a matter of price tags; it is a matter of value.
The same edition of the newspaper which reported problems on Annacis Island also reported that Chrysler and Ford have recalled 127,000 cars. Incidentally, that number is about two thirds the total number of Japanese automobiles imported into Canada annually. In one fell swoop the Canadian car industry has to recall 127,000 cars. The Canadian car buyer cannot afford that kind of value! If the Canadian car was one which Canadians wanted to buy because of value, there would be no international problem.
For the benefit of the minister I want to read just two short paragraphs from an editorial in yesterday's Vancouver Province entitled "An obnoxious campaign".
Barry Melchin, whose trucks move imported cars landed in the Lower Mainland to dealers throughout B.C. and Alberta, summed it up: "I don't see why my drivers should have to sit around and my cash flow dry up because they can't build decent cars in Ontario."
The editorial is summarized at the end, where it says;
Smarter people would be devoting their energies to making sure that North American cars are better-designed, better-built and more competitively priced.
That is the problem, and instead of looking at the problem, the minister wants to chastise workers in British Columbia. I know the Canadian car market is in trouble, and I suggest to the minister that we take an honest, unjaundiced look at the
Adjournment Debate
problem and not resort to a cure which is worse than the disease.
The minister keeps saying it is time to impose quotas. Surely elementary economics would tell him that as soon you institute quotas, you drive up the price of cars, and low-income families in Canada particularly could ill afford to purchase them. It would be better to increase Canadian content in those Japanese cars and make the Japanese auto manufacturers use Canadian parts so that the Canadian parts industry in Ontario would prosper, and therefore the automobile industry in Canada as a whole would prosper because it could compete with Japanese imports, which are now inundating the Canadian market.


Mr. Deputy Speaker:: Order. I am sorry to interrupt the hon. member, but the time allotted to him has expired.


Benno Friesen: I need more time, Sir.


Hon. Ed Lumley (Minister of State (International Trade)):: Mr. Speaker, I appreciate this opportunity to participate- even if it is only for three minutes-and to respond to the questions of the hon. member for Surrey-White Rock-North Delta (Mr. Friesen).
Unfortunately, because of other matters, I was not able to get to the House on time today to answer the hon. member's questions in question period. However, it is obvious that the hon. member has not been listening to his colleagues in the Conservative Party for the last three or four months. The hon. member for Ontario (Mr. Fennell) and the hon. member for Halton (Mr. Jelinek) in particular have been screaming day after day, week after week and month after month for the government to take tough action to restrict the imports of automobiles from Japan.
If I remember correctly what the hon. member said a few minutes ago, he said it would be ridiculous to impose quotas at this time. He should tell that to his Conservative colleagues who have been saying for the last three or four months that we should impose quotas of 15 per cent on the import of automobiles into the Canadian market and 8 per cent on the import of trucks.
The hon. member knows that I went to Japan in March and met my counterpart, the minister of industry and trade for Japan. I put before him specific proposals to voluntarily restrict the sale of automobiles to Canada during the next 12 months, to place a ceiling on the sale of commercial vehicles, and to agree to a commitment to negotiate content in some form or other in a long-term arrangement between the two countries. He rejected all three requests.
We are not asking for something that the Japanese did not give to somebody else. In 1980 the Japanese government agreed to give the U.S. industry a one-year period of restraint at a level resulting in a 7.7 decrease from 1980 sales. At the

May 31, 1982
Adjournment Debate
same time, Canada's agreement with Japan resulted in 1980 sales plus 10 per cent. This year all we asked the Japanese authorities for was the same agreement they gave to the United States in 1980.
Consultations presently are going on at the official level between Japan and Canada. As the hon. member knows, the automobile industry is in a serious state in Canada. Thousands of employees have been laid off as a result of the decline in our market plus the import penetration. This is not just in Ontario or Quebec but about 300 dealers have also closed down across Canada.
Until such time as we arrive at a satisfactory settlement we feel there is no alternative, and therefore we have asked Canadian Customs to strengthen customs procedures at the point of entry. That is not something we want to do, as we had hoped to arrive at a mutually satisfactory decision. Unfortunately, that has not happened to date.
I am very hopeful that before long we will reach a decision beneficial to Japan and to Canada and that we will continue, in the long-term interests of both countries, to expand our bilateral trade of over $8 billion.


CUSTOMS AND EXCISE-QUERY RESPECTING POSSIBLE EXTENSION OF CUSTOMS AREA TO INCLUDE CONTINENTAL SHELF
Mr. Maurice Foster (Algoma):: Mr. Speaker, on May 4 this year I put the following question to the Minister of Finance (Mr. MacEachen):
In view of the advantages it would give to Canadian manufacturing industry, and especially the steel industry, of an extension of the Canadian Customs area offshore, to extend it from the 12-mile limit to the continental shelf, as Norway, the United States and the United Kingdom have already done, and the massive drilling and exploration program planned on the east coast offshore, is the government planning to extend our Customs regulations to include the east coast offshore to the continental shelf?
The Minister of State for Finance (Mr. Bussieres) replied that my question was an interesting one-I was glad to hear that-and that it could help certain Canadian companies to gain a competitive edge. He went on to say that the question would require careful study. I hope that the parliamentary secretary who responds tonight will indicate that the study is complete and that we will be able to make decisions in this regard.
The Canadian steel industry which has been operating at a very high level of production for many years, has dropped in recent months to as low as 50 per cent of capacity. There have been extensive lay-offs and some companies such as Algoma Steel have been required to lay-off pretty well all the work force for one week in June.
I think it is important that the government should take every possible action to increase the amount of steel utilized within our borders. This proposal to extend the Customs area to the continental shelf would increase the use of Canadian seamless tube and other metal products.
The oil and gas bill that we worked so hard on in committee last year contains a provision that requires companies going into oil and gas production in the Canada lands to submit a plan to utilize the maximum Canadian content. In the North Sea development in the United Kingdom in the early '70s,
there was only 25 per cent content required. In the course of a decade, that has been increased to 75 or 80 per cent United Kingdom content. That was achieved by having a team work with the oil and gas exploration, production and development companies and another team of about 100 people working with the actual British suppliers. It is a good model, one which Canada will be able to utilize as Hibernia and other similar areas beyond the 12 mile limit come into production.
If we look at our own situation, 85 per cent of the goods and services used in offshore exploration are imported. The rigs come from the U.S., so they naturally deal with their own suppliers. In fact, all this equipment is coming into Canada duty free because it is beyond the 12-mile limit.
So I think it is important that the government act immediately, and I am sure the parliamentary secretary will want to announce something just as soon as possible in this regard. The U.S., the U.K. and Norway have all extended their customs regulations to include the continental shelf, and it just seems to be common sense that Canada do the same in order to assist the steel industry.
We do not actually have production in those areas yet, but we will during the course of the decade, and while we are exploring in areas such as Hibernia we should extend the regulations so that the equipment will have a much higher Canadian content. I am hoping the government will move on this. I do not have an actual estimate on the economic benefits in terms of dollars and jobs, but I am sure that we are talking about literally millions, perhaps hundreds of millions, in goods and services which could be Canadian. We are certainly talking about literally hundreds of jobs in a steel industry which requires them right now in Canada.


Mr. Douglas Fisher (Parliamentary Secretary to Deputy Prime Minister and Minister of Finance):: Mr. Speaker, I would like to compliment the hon. member for Algoma (Mr. Foster) for raising this issue in such a thorough and very practical fashion. The Minister of State (Finance) (Mr. Bussieres) advised the hon. member that the extension of Customs jurisdiction is under very careful study by the government at this time. The study is well advanced and a full policy statement on the matter should be issued soon. At that time we will also be able to announce what we have decided to propose by way of changes in our coastal trade policy and measures of assistance for the shipbuilding industry. Much of this will have a direct bearing on the steel industry and the concerns raised by the hon. member.
Extending Customs jurisdiction beyond the 12-mile limit involves not only the application of regular duty rates from the Customs tariff, but also the provisions for anti-dumping and countervailing duties which can be applied when dumped or subsidized foreign goods cause or threaten to cause injury to Canadian manufacturers. The use of subsidized interest rates to finance the sale to Canada of various kinds of capital
May 31, 1982

equipment is one of the problems we are looking at in this connection. The government has received representations on this issue, not only from the hon. member for Algoma, who has done it so well tonight, but also from the steel and shipbuilding industries, urging Canada to extend its tariff and other protective measures to the outer limits of the continental shelf so that Canadian producers can take full advantage of the economic opportunities presented by offshore resource-related activities. We shall have to decide the scope of activities covered by any extended customs regime. Canadian legislation relating to the fishery already extends beyond the 12-mile limit. I am sure the hon. member for Algoma would agree that foreign fishing vessels operating in our economic zone in compliance with Canadian fishery laws should not be subject to Canada Cus-
Adjournment Debate
toms laws. Under international law we also permit innocent passage through the waters over the Canadian continental shelf.
The hon. member is quite right that a number of other countries have already extended their Customs regimes to their offshore economic zones, and it would certainly be within Canada's rights to take parallel action. This has important ramifications for his riding and the voters and workers who live there, and I congratulate him for raising this matter.


Mr. Deputy Speaker:: Order, please. The motion to adjourn the House is now deemed to have been adopted. Accordingly, this House stands adjourned until tomorrow at two o'clock.
At 10.36 p.m., the House adjourned, without question put, pursuant to Standing Order.

Tuesday, June 1, 1982