1982-05-26

ROUTINE PROCEEDINGS


Mr. Bob Corbett (Fundy-Royal):: Madam Speaker, I rise to move a motion under the provisions of Standing Order 43. During the summer months the port of Saint John lies substantially idle and the dock workers are unemployed. A tremendous assistance to these workers could be provided by the government if they would use their good offices, in the same fashion as the Solicitor General (Mr. Kaplan), to urge the Wheat Board to divert just a few shipments through the port of Saint John during this period to benefit the workers. Therefore 1 move, seconded by the hon. member for Mississauga South (Mr. Blenkarn):
That the government not make a decision on this critical issue to workers in Saint John by refusing the motion but show their concern by agreeing to take it under consideration, by adopting it.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


POLITICAL PARTIES
Mr. Dave Nickerson (Western Arctic):: Madam Speaker, I rise to move a motion under the provisions of Standing Order 43. Whereas the present economic recession is directly attributable to years of Liberal-NDP policies of zero growth, belt tightening, and restraint, 1 move, seconded by the hon. member for Fundy-Royal (Mr. Corbett):
That this House invites the Canadian public to cast aside the present defeatist government and participate in the liberty, prosperity and growth offered by the Conservative alternative.


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


Some hon. Members:: Agreed.


ADMINISTRATION OF JUSTICE
Mr. Svend J. Robinson (Burnaby):: Madam Speaker, I rise to move a motion pursuant to the provisions of Standing Order 43. In view of the fact that the Solicitor General (Mr. Kaplan) is both a cabinet minister and a law officer of the Crown, and should not intervene directly or indirectly in the judicial or quasi-judicial process, and in view of the statements by the Prime Minister that it is more important that justice be done than that it be seen to be done, and that justice must be tempered with mercy, 1 move, seconded by the hon. member for Skeena (Mr. Fulton):
That this House urge the Prime Minister to do justice to all Canadians who believe in the rule of law by firing the Solicitor General forthwith, but that he ensure that this justice be tempered with mercy by firing the minister gently.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


EDUCATION
Mr. Walter McLean (Waterloo):: Madam Speaker, I rise to move a motion under the provisions of Standing Order 43. Reports from student aid officials in six provinces indicate that the expenses of the average aid-receiving student still exceed his or her summer earnings, savings and/or government assistance by some 15 per cent, as First reported by the 1980 federal-provincial task force on student aid. Now, in the coming academic year, fee increases at Canadian universities will be between 10 per cent and 30 per cent. Therefore I move, seconded by the hon. member for Lethbridge-Foothills (Mr. Thacker):
That this House impress upon the Secretary of State, in light of his responsibility for post-secondary payments and the Canada Student Loan Program, the urgent need for immediate financial assistance for most Canadian post-secondary students, many of whom have little hope for summer employment.

May 26, 1982


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


THE ECONOMY
Mr. Don Blenkarn (Mississauga South):: Madam Speaker, yesterday interest rates in the United States on treasury bills fell to 11.48 per cent. The American rate on a T-bill basis is now 3.5 per cent less than the Canadian T-bill rate. Therefore I move, seconded by the hon. member for Lethbridge-Foothills (Mr. Thacker):
That, in view of the fact that the government is blaming the Americans for high interest rates, the government follow American interest policies and reduce our interest rates by 3.5 per cent, so that our interest rates are no more than the interest rates charged in the United States.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


THE PRESS
Mr. Joe Reid (St. Catharines):: Madam Speaker, newspapermen and all of us who support the principle of freedom of the press want to register protest against the imprisonment of three British journalists who are detained in Argentina under charges of espionage. Whereas Canada, as a free and democratic country, cannot condone the trampling of this fundamental right anywhere in the world, I move, seconded by the hon. member for Haldimand-Norfolk (Mr. Bradley):
That the Secretary of State for External Affairs do convey through diplomatic channels Canada's concern with freedom of the press violations in Argentina and Canada's support for the representations made by many Canadians that the three British journalists, now detained, be released as quickly as possible.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


WORLD HEALTH ORGANIZATION
[Stage Direction]
CALL FOR BOYCOTT OF NESTLfi COMPANY PRODUCTS-MOTION UNDER S.O. 43
Mrs. Margaret Mitchell (Vancouver East):: Madam Speaker, I rise under the provisions of Standing Order 43. The Nestle company continues to make huge profits by pushing an infant formula which discourages breast feeding and leads to malnutrition and even death in many Third World countries. Inasmuch as 226 violations by Nestle of the World Health Agreement have been documented, I move, seconded by the hon. member for Saskatoon East (Mr. Ogle):
That this House condemn Nestle for continuing to kill Third World babies and support a renewed boycott of all Nestle products in Canada to enforce World Health Organization requirements.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


HUMAN RIGHTS
Mr. Bill Clarke (Vancouver Quadra):: Madam Speaker, in light of recent reports from Chile of the disappearance of individuals at the hands of the Chilean CIS, I move, under the provisions of Standing Order 43, and seconded by the hon. member for Parry Sound-Muskoka (Mr. Darling):
That this House deplores the actions of the Chilean Central Intelligence Service for the numerous arrests and detention of individuals without trial, and further urges the Secretary of State for External Affairs to raise this important matter at the United Nations.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


FINANCE
Mr. Gordon Taylor (Bow River):: Madam Speaker, the November 12 budget has had untold disastrous effects upon Canadians. One of the provisions thought up by the Minister and the bureaucrats was cutting the capital cost allowance in half for the year of purchase. This has resulted in farmers and businessmen making do with their old equipment instead of buying new equipment, and there has consequently been a string of dire results-no purchases, no sales, no orders, no
May 26, 1982

work, more unemployed; no orders, no work, more unemployed; etc., etc. Therefore I move, seconded by the hon. member for Peterborough (Mr. Domm):
That this House asks the minister to be sensible and withdraw this provision from the budget and get farmers and businessmen buying new equipment, which will put Canadians back to work, which will increase pay rolls, which will give the government more revenue. Only good can result form the cancellation of this ill-thought-out scheme.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


NUCLEAR ENERGY
Mr. Mark Rose (Mission-Port Moody):: Madam Speaker, yesterday the Council on Hemispheric Affairs, a Washington-based human rights research group, condemned the Canadian government decision to continue supplying Argentina with nuclear fuel, characterizing the decision as "cynical economic opportunism", and as being "irresponsible and, indeed, reckless." The Council also reiterated a point already made by many Canadian nuclear experts, that any non-proliferation agreements which Argentina has signed are unenforceable and that Argentina has refused to sign the 1968 United Nations Nuclear Non-Proliferation Agreement or the 1967 agreement signed in Mexico intended to make Latin America a nuclear free zone. Therefore I move, seconded by the hon. member for Beaches (Mr. Young):
That this House instruct the government to stop promoting its economic bailout of Canada's nuclear industry at the expense of non-proliferation, and further, that the government stop supplying nuclear technology and fuel to the military junta in Argentina until such time as we can be sure that our uranium products are not being used to build an Argentinian bomb.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.



ORAL QUESTION PERIOD


Hon. Perrin Beatty (Wellington-Dufferin-Simcoe):: Madam Speaker, my question is for the Minister of State for Multicul-turalism. Yesterday the minister left the House to make an
Oral Questions
announcement of the government's policies to regulate the daily newspaper industry in Canada. What is there in the minister's recommendations that would have led to the Ottawa Journal or the Winnipeg Tribune not being closed? What are the recommendations made by the minister to prevent future closings of newspapers throughout the country?


Hon. Jim Fleming (Minister of State (Multiculturalism)):: Madam Speaker, I believe that the recommendations of cabinet that I announced yesterday respond to the major findings of the Kent Royal Commission, that is, the problem of increasing concentration, conglomerate ownership, cross-media dominance in a particular marketplace, and the right of Canadians, especially when so many Canadian cities have only one newspaper, to have recourse other than to the courts or the benevolence of a publisher or an editor if they believe they have a grievance.
As far as the question about what it has done to reverse the tragic demise of the Tribune or Journal, I do not believe the government is in a position to do that unless the hon. member is suggesting that we directly support newspapers with public funds in their entirety. I do not think that would be appropriate.


Henry Perrin Beatty: The minister concedes that nothing in his recommendations will stop the closing of newspapers in Canada in the future.


ROLE OF RESTRICTIVE TRADE PRACTICES COMMISSION
Henry Perrin Beatty: Madam Speaker, my supplementary question concerns one of the specific recommendations. In the minister's recommendations he proposes that in future non-media companies intending to buy a daily newspaper would be required to justify that action to the Restrictive Trade Practices Commission. In view of the fact that in the minister's own document, a cabinet document dated March 31, 1982, he raised serious doubts as to the legality of such a measure, why does the minister propose that Parliament should pass such legislation which he, himself, feels could be illegal?


James Sydney Clark Fleming: Madam Speaker, under the proposal, the Restrictive Trade Practices Commission would review a company that had interests beyond media interests and greater than those media interests to see that the ownership and running of the newspaper entity being purchased would be undertaken in a manner satisfactory to the Restrictive Trade Practices Commission independent of editorial influence or intimidation from other properties owned by the same company.
We are acting quite within the law. If the hon. member is suggesting that we are in fact acting outside the law, he is not understanding our proposal. He should also note the dating on documents, real or otherwise, which he has, that may or may not be changed by the cabinet process.

May 26, 1982
Oral Questions


Henry Perrin Beatty: It is a novel approach if the cabinet process suddenly changes the legality of something when the Department of Justice says it may be illegal. His document said that even this review process may be struck down by courts.


PROPOSED ESTABLISHMENT OF PRESS COUNCIL
Henry Perrin Beatty: Madam Speaker, I would like to ask the minister about another proposal which was made in his document. It is the proposal to set up a government sponsored press council. Instead of laying on another layer of government bureaucracy at a considerable cost to taxpayers, why would the government not simply ask that existing press councils agree to hear complaints from individuals about non-member newspapers? Why could the situation not have been handled in that manner instead of proposing that the government intervene in the newspaper industry in this way?


James Sydney Clark Fleming: Madam Speaker, with regard to the issue of the right of the Restrictive Trade Practices Commission to review prospective purchases by the newspaper industry, we believe, indeed, in the advice of our counsel, and the Department of Justice says that we are quite within our legal rights. The hon. member is misunderstanding if he suggests otherwise. Perhaps he may be referring to criminal penalties following a rejection by the Restrictive Trade Practices Commission, or a failure to comply. That is quite different from our right to have that review process.
On the question of why do we not simply refer any grievances to the existing councils, we believe that those councils are set up to operate according to a membership that they have established. The proposed Canadian advisory council on newspapers does not force any newspaper to belong to it. It simply has the right of receiving grievances about a newspaper if that newspaper does not belong to an existing press council. As a result of all the discussions I have had with journalists, the public and a variety of interested segments of Canadian society, I believe that that was found overwhelmingly acceptable.
The only complaint 1 would get was from certain publishers who said, "It should rest with us to decide whether or not a grievance is fair." I do not believe that that is fair when there are so many Canadian cities with only one newspaper. 1 believe the public should have the right to go to an independent body, not to a government body. That council is absolutely independent of the government. An endowment fund is the proposal, not paid for by the government, and completely independent of government.


Some hon. Members:: Hear, hear!


Madam Speaker:: The hon. member for Durham-Northumb-erland.


Mr. Lawrence:: Madam Speaker, to no one's surprise, my question relates to the continued existence in the government of the Solicitor General, which only the Prime Minister can answer. He is not here, as I know he has a four o'clock press conference, but he will obviously be turning up in the question period before the conference. May I ask the indulgence of the Chair to defer my question to that time, and ask you to recognize the hon. member for Victoria?


Madam Speaker:: Well, the hon. member simply need not get up and I will not recognize him.


Some hon. Members:: Oh, oh!


Some hon. Members:: Hear, hear!


Allan Frederick Lawrence: She loves me!


Madam Speaker:: The hon. member for Comox-Powell River.


QUERY RESPECTING CORPORATE TAKE-OVERS
Mr. Ray Skelly (Comox-Powell River):: Madam Speaker, my question is also directed to the minister in charge of the Kent Commission. I would like to remind the minister of his own words in Vancouver on February 26, 1982, when he said, "Anybody who tries something fast between the recommendations of Kent and the government's decision on what to do- we'll reach back if you are trying to beat us." Will the minister explain to the House what his recommendations will be in dealing with Torstar's take-over of Inland Publishing and Maclean-Hunter's acquisition of Sun Publishing in Edmonton, Calgary and Toronto?


James Sydney Clark Fleming: Madam Speaker, the situation of Torstar taking over Inland Publishing took place during the course of the Kent recommendations, long before I made the statement that if, between the time of that statement and our recommendations, anything took place, they would face the fact that they had gone in opposition to a direction the government was considering. Concerning the second instance involving Maclean-Hunter, once the direction is given to the CRTC on cross-media ownership in the context of the announcement made yesterday, the CRTC will surely consider that acquisition in the light of that direction.


ALLOWABLE LEVEL OF CONTROL BY NEWSPAPER CHAINS
Raymond John Skelly: A second strange situation arises in this incredible report, Madam Speaker. The minister has proposed a law which will restrict any single corporation to 20 per cent of the national daily newspaper circulation. Will the minister tell this House why he is prepared to place Southam and Thomson above the law by allowing those two firms to control approximately 60 per cent of the circulation of English-language dailies in Canada?


James Sydney Clark Fleming: They are not above the law, Madam Speaker. When these
May 26, 1982

firms, within the context of the laws at the time, grew to the size that they did, it was cabinet's decision that to be retroactive and break them up would be inappropriate. However, if anyone seeks to buy them, or they seek to sell any of their properties, they cannot exchange them and they will gradually have to fall back to that 20 per cent level or less. As 1 say, if anyone purchases either Thomson or Southam, one would only be able to purchase, as a bloc, up to 20 per cent of national average daily circulation.


ROLE OF CANADIAN RADIO-TELEVISION AND TELECOMMUNICATIONS COMMISSION
Raymond John Skelly: Madam Speaker, it is an incredible report, which would only bring joy to the publishers of this country in the Conservative Party.


Some hon. Members:: Oh, oh!


Raymond John Skelly: The third part of my question deals with the responsibility to control cross-media ownership, which will be placed with the CRTC. The record of the CRTC on crossmedia ownership is absolutely abysmal, and the government has already built enormous loopholes into this new policy. There are at least ten cities in Canada in which cross-media ownership creates a serious problem, according to the minister's own criteria. Would the minister table in this House the instructions that the government will give to the CRTC to deal with situations in Vancouver, Calgary, Edmonton, Regina, Hamilton, London, Toronto, Granby, Moncton, and Saint John?


Mr. Hnatyshyn:: You missed Saskatoon.


James Sydney Clark Fleming: Madam Speaker, the government sets a framework for the CRTC to consider when it makes decisions. Then the CRTC looks at those individual cases. The government does not take individual cases and pass judgment on them. 1 believe that would be inappropriate.


Some hon. Members:: Hear, hear!


CANADIAN ARMED FORCES
Hon. Allan B. McKinnon (Victoria):: Madam Speaker, my question is directed to the Minister of National Defence. The war in the Falklands has demonstrated the vulnerability of modern warships, especially those with aluminum superstructures. 1 wonder if the minister could tell the House how many of Canada's warships have aluminum superstructures?


Hon. J. Gilles Lamontagne (Minister of National Defence):: Madam Speaker, as long as I am correctly informed, I do not think any of our ships have complete superstructures of aluminum. On the question asked by the hon. member for Victoria, as we have on the board before two contractors the question of having six more frigates built in the next few years,
Oral Questions
1 think it would be appropriate to look into the matter very seriously.


CAPABILITY OF NAVAL EQUIPMENT
Allan Bruce McKinnon: Madam Speaker, my supplementary is to the same minister. As none of our naval vessels have any capacity to counter incoming sea-skimming missiles such as the Exocet, and as our 16 older destroyers rely heavily on aluminum in their superstructures, will the minister agree that our navy is in no way equipped to fight a naval operation against an enemy?


J. Gilles Lamontagne: Madam Speaker, the hon. member got all the answers from my officials yesterday at the Standing Committee on External Affairs and National Defence. It was clearly stated that our navy is capable of anti-submarine warfare in a most efficient way, but as far as anti-missile defence is concerned it is limited.


UNEMPLOYMENT INSURANCE POSSIBILITY OF REDUCING NUMBER OF RECIPIENTS
Hon. Roch La Salle (Joliette):: Madam Speaker, my question is directed to the Minister of Employment and Immigration. Considering the thousands of Canadians who have been receiving unemployment insurance benefits for a number of months and considering the fact that by December 31, according to information received from the minister's own department, some 500,000 Canadians may no longer be receiving unemployment insurance benefits, could the minister inform the House how many Canadians will no longer be entitled to unemployment insurance by next December 31, and does the minister have any solution or form of assistance for these thousands of Canadians who will be losing their entitlement to unemployment insurance by the end of 1982?


Hon. Lloyd Axworthy (Minister of Employment and Immigration):: As the hon. member knows, Madam Speaker, we have introduced a number of solutions for that problem. In fact just today we announced the extension of the worksharing program which provides coverage for over 70,000 workers under the Unemployment Insurance Act. Therefore we are able to maintain a number of companies in existence and avoid lay-offs right across Canada.
Equally, we have introduced through the unemployment insurance program a number of job-sharing schemes in the areas of fisheries, forestry and mining, again providing alternative employment for people who are covered by UI. It will extend their work opportunities and work benefits by providing

May 26, 1982
Oral Questions
a very valuable type of work through investing in the development of those very critical natural resources. We are quite aware of the situation and are trying to respond to it as well as we can. We have introduced a number of solutions. I will be very happy to provide the hon. member with the information so that he can update himself.
[ Translation]


Roch La Salle: Madam Speaker, I have a supplementary. Given the present situation, I assume the minister realizes the importance of the question and the growing concern of the Canadian people. However, the minister has failed to answer my question. All these programs do not provide the slightest assurance that thousands of Canadians will be able to re-enter the labour market by December 31. In the circumstances, can the minister confirm to the House how many thousands of Canadians will lose their entitlement to unemployment insurance by December 31? That is a question the minister should be able to answer. According to his department, there will be more than 500,000, and if that is the case, it would be an absolute disaster, and the minister probably realizes this, but in any case, I feel the Canadian people have a right to know whether the minister at least realizes that thousands of Canadians stand to lose their entitlement to unemployment insurance, because there is no evidence that government action will provide work for 500,000 Canadians by December 31.


Lloyd Axworthy: Madam Speaker, 1 would prefer to leave the whole occupation of forecasting doom to the members of the Conservative Party because they are so good at it. We are much more interested in putting people to work and in trying to find solutions rather than engaging in that kind of wild speculation which serves no purpose.
One cannot predict those kinds of figures because, under the Unemployment Insurance Act, workers on benefits can develop or acquire a certain number of weeks of benefits for work during that period of time to re-establish their benefits during the work period. The hon. member should know that because he has been doing it long enough. It would be a much greater service if he engaged in trying to help us to help the unemployed rather than simply engaging in that kind of forecasting in the realm of prophecy.


MEDICAL CARE
Mr. Jim Hawkes (Calgary West):: Madam Speaker, my question is for the minister responsible for the social policy envelope. In light of the fact that the Minister of National Health and Welfare has been asking provincial ministers to expand the health care that is available to Canadians under insurance principles, can the minister say where the money is
going to come from for the federal share? Will we get an expanded envelope, or are we going to steal from one purpose to pay for another?


Hon. Jean Chretien (Minister of Justice and Minister of State for Social Development):: Madam Speaker, the minister is not here to answer but 1 would like to say there are some programs in the book, voted by the House, and accordingly we are of the view that the best medical services should be given to Canadians and we ask the provinces to collaborate to achieve this.


PROVISION OF FUNDS FOR SERVICES
Frederick James (Jim) Hawkes: Madam Speaker, 1 would ask the Minister of State responsible for social policy, responsible for the social policy spending envelope, whether or not he has given the Minister of National Health and Welfare a commitment for increased spending that will allow for the increased services which he is saying should be provided by the provinces? Will there be more money for more service, yes or no?


Joseph Jacques Jean Chrétien: Madam Speaker, I think that the estimates of the Minister of National Health and Welfare are in front of the House of Commons and the hon. member should ask these questions of the Minister of National Health and Welfare who is responsible for health services, to the House of Commons.


Mr. Baker (Nepean-Carleton):: 1 thought you were the big cheese-le gros fromage.


ADMINISTRATION OF JUSTICE
Mr. J. R. Ellis (Prince Edward-Hastings):: Madam Speaker, I have a question to put to the Solicitor General. On Friday last Susan Nelles was discharged on four counts of murder and exonerated at a preliminary hearing as a judge found there was no evidence upon which a reasonably instructed jury could convict. There is no way to compensate Miss Nelles for 14 months of embarrassment, anguish, and worry as a result of the charges, but there must be a way in which she could be compensated for her legal costs, which will run to between $150,000 and $200,000. In light of the fact that Clifford Olson could be paid $100,000 as a convicted murderer, by the government, will the Solicitor General consent to compensating Miss Nelles for her legal costs when she had to fight for her life when she was obviously innocent?


Some hon. Members:: Hear, hear!


Hon. Bob Kaplan (Solicitor General):: Madam Speaker, as the House knows, the administration of justice is a provincial matter. The investigation and the charges that were laid were
May 26, 1982

all done under the direction of the provincial authorities. I think, with respect and with the sympathy that I share for her plight, the hon. member should direct his attention to the government responsible for the decision and for the prosecution.


Mr. Nielsen:: Write him a letter.


AUTOMOTIVE INDUSTRY
Hon. Bill Jarvis (Perth):: Madam Speaker, my question is directed to the Minister of State for International Trade. It relates to ongoing negotiations with the Japanese vis-a-vis the automobile market. 1 understand the minister's concern when these questions are raised on the floor of the House because he may feel that they prejudice negotiations. However, may I ask him, not with respect to the completed new vehicles but with respect to automotive parts, not component parts but the after market or replacement parts, has that been a subject matter for negotiation with the Japanese, and could the minister indicate to he House his position with respect to that very significant market?


Hon. Ed Lumley (Minister of State (International Trade)):: Yes, Madam Speaker, that subject has been a part of the discussion with my counterpart in Japan. 1 indicated to him that we were not satisfied with the Canadian share of the parts market retained for Japanese automobiles. As has been indicated, there has been representation to the Japanese automobile manufacturers on our behalf to source more parts from Canada. This was also the subject of discussions at the Japan-Canada businessmen's conference which took place in Sapporo last week.


William Herbert Jarvis: Madam Speaker, I hope the minister will be in a position to report some success with respect to that part of the market.


LEGALITY OF EXCLUSIONARY CONTRACTS
William Herbert Jarvis: The other part which has some significance is access for replacement parts into agencies that sell Japanese cars in Canada. Those agencies have contracts with the Japanese manufacturers which prohibit or inhibit access to that market by Canadian manufacturers. First, has that been raised with the minister's counterpart in Japan and, second, has the minister sought advice from law officers of the Crown as to legality of those contracts that absolutely prohibit a Canadian manufacturer from having any access to that very significant market?


Edward C. Lumley: Madam Speaker, 1 thank the hon. member for bringing this matter to my attention. That is the first time that anyone, even domestically, has brought this matter to the government's attention. Therefore it was not a point of discussion with the
Oral Questions
Japanese authorities. One other point comes to mind, Madam Speaker. I think that if the hon. member will check with the president of the auto parts manufacturers he will find that a couple of the Japanese automobile manufacturers have recently submitted lists to him and to the parts industry in Canada for submissions and possible sourcing of increased Canadian content.


SMALL BUSINESS
Mr. Nelson A. Riis (Kamloops-Shuswap):: Madam Speaker, my question is for the minister responsible for betraying the small business community of Canada yesterday. In early 1980, when the small business community was obviously entering financial difficulties, the minister responsible decided to solve their problems or assist them by marching off on a quick study. That quick study took nearly two years and cost the taxpayers of Canada $1,200,000. After waiting two years for the result, the report that was released yesterday suggested that another year of study is in order-no action, no recommendations. Will the minister please stand in the House today and explain to the small business community of Canada what he plans to do immediately to assist them and to encourage them?


Hon. Charles Lapointe (Minister of State (Small Businesses and Tourism)):: Madam Speaker, once again, 1 am truly amazed at the hon. member for Kamloops-Shuswap. First of all, the facts he mentioned here in the House are not accurate.
1 am not the minister who launched the study on small business financing. The hon. member himself said, in fact, that the study was launched under the previous government in 1980. Madam Speaker, he is surprised that a study of this magnitude should be published without conclusions or recommendations. 1 suppose the hon. member would have preferred that 1, and with me the Government of Canada, should take the word of a small group of academics and experts on the small business sector, without consulting small business itself. Madam Speaker, I feel that comments of this kind are unworthy of a member of this House who is calling for consultation with the people.


REQUEST THAT MINISTER HOLD PUBLIC HEARINGS
Nelson Andrew Riis: Madam Speaker, l do realize that 1 made an error. The minister has corrected me. It actually took three years to conduct this study, and still no action. The minister suggests that he is interested in receiving input from the business community of Canada, yet he suggests that he assemble a consultative committee. To consult about what, 1 would like to ask him? If he wants to

May 26, 1982
Oral Questions
consult with the business community, is he prepared to agree today to conduct public hearings across Canada so that the business people can have ready access to the reports and have ready access to some of the recommendations he will make? Will he hold public hearings across the country to react to this three-year study?


Erik Nielsen: That is a great idea.


Charles Lapointe: Madam Speaker, it is always easier to criticize how something is done than what is done, and I feel that since both the summary and the twelve actual studies prepared by various academics were published yesterday, Canadian businessmen and women, who are more resourceful than the hon. member opposite, will be able to read the studies for themselves and formulate comments without resorting to a formal public forum of consultation.


INDIAN AFFAIRS
Mrs. Eva Cote (Rimouski-Temiscouata):: Madam Speaker, my question is directed to the Minister of Indian Affairs and Northern Development. The minister will recall that, last year, there was a very distressing situation in connection with salmon fishing on the Restigouche River. I am aware that the federal minister has been negotiating for some time with the native people in that area. Could the minister inform us whether an agreement has been reached, and if so, what kind of agreement or settlement was arranged?


Hon. John C. Munro (Minister of Indian Affairs and Northern Development):: Yes, Madam Speaker, negotiations have been going on for two days, and there are many members on both sides of the House who will be very, very happy to hear the news that a settlement has been reached between the chief and ourselves and the Government of Quebec, so this year there will not be the unhappy incidents at Restigouche there were last year over the question of fishing.


Some hon. Members:: Hear, hear!


REPORTED DISTRIBUTION OF MEDALLIONS
Mr. Lome Greenaway (Cariboo-Chilcotin):: Madam Speaker, I also have a question for the Minister of Indian Affairs and Northern Development. Is it the plan of the minister to give every chief in Canada a bronze medallion? If so, why, and how much is this going to cost?


John Carr Munro: Madam Speaker, a week or so ago my predecessor gave me notification of a memo, which obviously he has sent to some of his colleagues in the Conservative caucus, about suggestions of this kind. May I say I think it was probably done in all innocence but, in short, the answer is no.


Lorne Everett Greenaway: Madam Speaker, just to correct the record, I was not given this memo by the previous minister. I was given this memo by an Indian chief at hearings out in Vancouver, and this memo was from the department itself outlining the whole program. In addition to that I have the minister's briefing notes wherein he agreed a year ago that this was a good program, and the minister said, "We are going to go right ahead with it."


Some hon. Members:: Oh, oh!


Walter David Baker: You speak with forked tongue.


GOVERNMENT POSITION
Lorne Everett Greenaway: Madam Speaker, will the minister once again tell us whether this will be done or will not be done?


John Carr Munro: Madam Speaker, my friend, the hon. member for Nepean-Carleton, used to be in the ministry, and he should be aware that ministers do not send briefing notes to their officials. It is usually the other way around.
He should also be aware that ministers do not always accept the advice given in their briefing notes.


Walter David Baker: Perhaps you should.


AGRICULTURE
Hon. Elmer M. MacKay (Central Nova):: Madam Speaker,
I have a question for the Minister of Agriculture. The minister will know that the Department of Regional Economic Expansion has been doing less and less to help agriculture in the Atlantic region. I want to ask the minister once again what progress, if any, is being made in the consideration of removing the PFRA from that department, taking it into his portfolio and expanding it into a national program which would be for the benefit of agriculture right across the country and help strengthen that sector and the economy in Atlantic Canada.


Hon. E. F. Whelan (Minister of Agriculture):: Madam Speaker, I differ with what the hon. member said about what the federal government is doing for Atlantic Canada. I am sure he is aware of the grant which has been given to Scotia Gold in his area, which experienced a disaster last year. The DREE people under the Minister of Regional Economic Expansion

Hi:
May 26, 1982

came through with a big grant. A grant has already been given to the other large food processing company there. Another one will be available shortly. There is only one thing we have not signed, and that is an agreement on agricultural development for Nova Scotia. I am looking forward to that very shortly.
I agree to some extent with the hon. member's last statement about prairie farm rehabilitation, PFRA, coming under the Department of Agriculture but, if it does, it should be for all Canada because it is one of the best programs any government in the whole world has ever developed.


ABSENCE OF AGREEMENT
Elmer MacIntosh MacKay: Madam Speaker,
1 do not know about the whole world, but I would like to follow this up with the minister briefly and remind him that we talked about this once before. He knows there are problems because of the absence of a sub-agreement, which used to be under the regular DREE program. When will the minister be able to tell the House whether he will take this initiative and take this very good PFRA program, which is highly respected in western Canada, and combine it with some scheme like the former Maritime Marshland Rehabilitation Act and apply it right across the country for the benefit of the agricultural industry? If this initiative-which 1 think he will agree is a good one-is to be taken, when will he give us some indication of that?


Eugene Whelan: Madam Speaker, as 1 have said in this House before, this is a joint agreement. The province of Nova Scotia should give agriculture the priority it needs in relation to cost-sharing programs. Nova Scotia gives agriculture a number three rating instead of number one, which I give to agriculture in Nova Scotia. That has made it more difficult to go ahead with that program. If the hon. member can persuade Premier Buchanan of Nova Scotia to give agriculture a number one rating in that province, 1 am sure I will have less difficulty here.


THE CHARTER OF RIGHTS
Mr. Maurice Foster (Algoma):: Madam Speaker, my question is directed to the Minister of Consumer and Corporate Affairs. The proclamation of the Charter of Rights and Freedoms for Canadians was signed by Her Majesty here last month. The Charter of Rights and Freedoms prohibits discrimination on the basis of age. Can the minister say if this will remove the requirement that postmasters must retire at age 65?


Hon. Andre Ouellet (Minister of Consumer and Corporate Affairs):: Madam Speaker, this is a very interesting point which will certainly be looked into by my colleague, the
Oral Questions
President of the Treasury Board, not only as it concerns employees of a Crown corporation such as the Canada Post Corporation but also as it applies to government employees in general.


RAILWAYS
Mr. Vic Althouse (Humboldt-Lake Centre):: Madam Speaker, my question is for the Minister of Transport. Reports from the prairies last week indicate that the draft report from Dr. Gilson is not being well received by all participants in the negotiations on the Crow rate. Is the minister still using the yardstick of consensus to measure the success or failure of these negotiations and, if he is, how does he propose to deal with the situation whereby some participants insist on payments being made directly to the railways while others insist that they be made directly to the farmers?


Hon. Jean-Luc Pepin (Minister of Transport):: Madam Speaker, nobody thought that this Gilson exercise would be easy, so when my hon. friend says there are still some items on which there is not yet a consensus, it is no surprise to me or to anyone else. However, the reports which have come out of the meetings have been generally quite optimistic. There has been agreement on a number of non-monetary items. 1 could list them, but I prefer not to pre-empt the report. It was my impression that some compromises were reached-in any event, were worked hard at-in terms of deciding who should be paid, the farmers or the railways. Some consensus was developing in that respect, and there are still a few days to go, and hopefully all these matters will be resolved.


PRINCIPLE OF EQUAL RATES FOR EQUAL DISTANCE
Victor Fredrich (Vic) Althouse: Madam Speaker, another item on the agenda was the question of equal rates for equal distance which, 1 understand from comments in the House, will be continued, unless the farmers insist otherwise. Is that still the stance of the government? Will equal rates for equal distance continue, and what kinds of conditions would have to prevail before that stance is changed?


Jean-Luc Pepin: Madam Speaker, the information I have is that indeed the principle of equal rates for equal distance will be maintained, but efforts are being made to try to find some incentive rate which will be acceptable to the agricultural community. There are some ideas which have been floated around-my friend is aware of them-respecting rates which would be beneficial for a period of time to help the development of processing, for example, in the west, and I am sure my hon. friend would agree that that would be desirable.
Oral Questions THE JUDICIARY

May 26, 1982


POSITION OF SOLICITOR GENERAL
Allan Frederick Lawrence: Madam Speaker, my question to the Prime Minister relates to the incredible letters the Solicitor General wrote as the Solicitor General, under Solicitor General letterhead, for the purpose of influencing judicial consideration of a serious matter before the courts. The Prime Minister has had 24 hours to make his own inquiries and should tell us whether the Solicitor General is going to continue to embarrass Parliament and the government with his actions, or whether he is to be removed from the government. Is he in or out?


Right Hon. P. E. Trudeau (Prime Minister):: Madam Speaker, the Solicitor General is in, and the hon. member is out.


Some hon. Members:: Hear, hear!


DIRECTIVE CONCERNING COMMUNICATIONS WITH JUDGES
Allan Frederick Lawrence: Madam Speaker, I wonder if I could ask your indulgence to quote from a very clear but short directive from the Prime Minister. As recorded at page 11771 of Hansard for March 12, 1976, the Prime Minister said in the House of Commons:
But, in so far as this government is concerned, I believe that it must be clearly established that in future no member of the cabinet may communicate with members of the judiciary concerning any matter which they have before them in their judicial capacities, except through the Minister of Justice, his duly authorized officials or counsel acting for him-
In the past cabinet ministers have resigned for contravening this unequivocal rule of the Prime Minister. Why has the present Solicitor General not submitted his resignation? If he has, why has the Prime Minister not accepted that resignation?


Pierre Elliott Trudeau: Madam Speaker, the hon. member has read correctly the directive I gave in March, 1976, that no member of the cabinet may communicate with members of the judiciary concerning any matters which they have before them in their judicial capacities, except through the Minister of Justice. The question is whether a minister or anyone else can be said to communicate with a judge when he gives evidence in open court. I submit that if giving evidence in open court can be construed as communicating with a judge in an improper way, it would follow that no minister would be able to appear even as a witness in court.


Some hon. Members:: Oh, oh!


Pierre Elliott Trudeau: Therefore his obligation to appear as a witness under subpoena would be dispensed with. The hon. Solicitor General communicated not with the judge but with counsel for the accused-


Mr. McGrath:: For the purpose of influencing the judge.


Pierre Elliott Trudeau: -who then produced that letter much in the same way he could have called the minister as a witness and the minister would have been obliged to reply. So in my view, Madam Speaker, and I think in the view of any impartial person-


Roch La Salle: That has never been done before.


Pierre Elliott Trudeau: Madam Speaker, I am ready to discuss this as long as the opposition wants. If they hold that to submit a character reference by way of a letter to counsel is an improper way of communicating with a judge, then I suggest they are inventing new guidelines. They are not following the guidelines I established.


Some hon. Members:: Hear, hear!


RETENTION OF SOLICITOR GENERAL IN CABINET
Ramon John Hnatyshyn: Madam Speaker, the guidelines speak for themselves. I understand that the principle on which we operate in this country is that of separation between the executive and judiciary. The Prime Minister has been very vocal over the course of the last few months with respect to Mr. Justice Berger speaking out politically, in view of the fact that the Prime Minister asked for the resignation of the present Minister of Indian Affairs and Northern Development when he communicated with a judge to try and influence the judge's decision and sentence, how can the Prime Minister retain the present Solicitor General who is responsible for the penitentiary system, and what is the basis upon which he can justify a breach of those very clear guidelines?


Pierre Elliott Trudeau: Madam Speaker, the guidelines were issued precisely to cover the case to which the hon. member refers. We recall that the present Minister of Indian Affairs and Northern Development had wanted to submit a character reference. I have not reread the case in any detail to refresh my memory but, as I recall, he had been delayed in some way in submitting a character reference through the lawyer. He explained to the House that he picked up the phone and called the judge directly. As a result of that the hon. minister resigned because he had communicated directly with a judge.


James Aloysius McGrath: What is the difference?


Some hon. Members:: Oh, oh!


John Carr Munro: He did not call the judge.


Pierre Elliott Trudeau: The question then, Madam Speaker, is: should a minister be prohibited from testifying in open court? If the opposition wants to hold the doctrine that that should be prohibited, Madam Speaker, I am suggesting that we might welcome that for the future. It is not in the guidelines, but we would welcome any decision of this House that in the future no
May 26, 1982

minister should be summoned in any way to open court. I would be happy to put that in the guidelines.


Some hon. Members:: Hear, hear!


APPLICABILITY OF GUIDELINES
Ramon John Hnatyshyn: Madam Speaker, this letter was written on the letterhead of the Solicitor General of Canada, a member of the executive, and the one responsible for penitentiaries. The guidelines are very clear. They
say:
-that in future no member of the cabinet may communicate with members of the judiciary concerning any matter which they have before them in their judicial capacities, except through the Minister of Justice-
Do the Prime Minister's answers to date mean that all cabinet ministers are now free to write letters to judges, directly or indirectly, to influence sentencing or disposition of a case by the court? Is that the position the Prime Minister is now putting forward for members of his cabinet?


Pierre Elliott Trudeau: Madam Speaker, the guidelines were obviously intended to meet the specific case just referred to-and another case-where a telephone call or communication was made directly to the judge. That was found to be improper because it was using, in a sense, the authority of office to try to influence the judge in a surreptitious way, as I said yesterday, unknown to the parties in the case. But 1 am holding very firmly, Madam Speaker, to the doctrine that a minister is a citizen; if he is subpoenaed and the court wants to hear him, the court can issue that subpoena. This doctrine will not prevent that.
If a minister cannot testify in open court, as any citizen can, on behalf of a fellow citizen, then I say that is a new doctrine, and a dangerous one, because then we will say that any minister standing in a box is communicating improperly with the court and therefore he should not be subpoenaed, and therefore he should never be in a court of justice.


MINISTERIAL CONDUCT
Right Hon. Joe Clark (Leader of the Opposition):: Madam Speaker, just so that we might understand this new standard the Prime Minister has established-


Some hon. Members:: Oh, oh!


Charles Joseph Clark: As soon as there is some quiet on the other side, Madam Speaker, I would like to ask the Prime Minister if his new standard is that cabinet ministers are allowed to influence judges indirectly but not directly.


Some hon. Members:: Hear, hear!


Pierre Elliott Trudeau: Madam Speaker, to the extent that any witness, character witness or
Oral Questions
otherwise, is influencing the judge by testifying under oath, answering questions from counsel or the court, the answer is yes. Any witness is influencing the judge, and that is the purpose of a witness.


Some hon. Members:: Hear, hear!


Pierre Elliott Trudeau: Therefore the only question is whether he is influencing the judge in an improper way. I can certainly understand, as my guidelines suggest, that it would be improper to try to influence a judge directly or indirectly, but not in open court. That is why the guidelines have been issued; not to prevent ministers testifying in open court, whether by subpoena or voluntarily-


Mr. Crombie:: There is a difference and you know it.


Pierre Elliott Trudeau: Yes, Madam Speaker, I know there is a difference, and if the hon. member for Rosedale wants to ask a question-


David Edward Crombie: Tell the truth.


Pierre Elliott Trudeau: If he does not think his leader is capable, Madam Speaker-


Some hon. Members:: Hear, hear!


David Edward Crombie: Tell the truth.


Pierre Elliott Trudeau: Madam Speaker, the hon. member for Rosedale does not think that his leader is capable of asking questions. I just ask him to be patient.


An hon. Member:: You are not capable of answering them.


Some hon. Members:: Hear, hear!


Pierre Elliott Trudeau: Madam Speaker, the hon. member for Rosedale says that I should tell the truth. That is the kind of insinuation which I find insulting. It is not the kind of thing he would tell me to my face outside of this room.


Some hon. Members:: Oh, oh!


Madam Speaker:: Order, please.


Pierre Elliott Trudeau: Madam Speaker-


Madam Speaker:: Order.


An hon. Member:: The just society.


Pierre Elliott Trudeau: Madam Speaker, I want to make it clear that I am not challenging the hon. member to anything. 1 am just establishing that in this Chamber the standard of debate has degenerated to the point where I do not respect the hon. member any more than he appears to respect me. I do not think that is conducive to the civil dialogue which should take place in this Chamber.

May 26, 1982
Oral Questions


Some hon. Members:: Hear, hear!


Pierre Elliott Trudeau: I think we should attempt to be as polite to each other in this room as we would be outside it, Madam Speaker.


Some hon. Members:: Oh, oh!


Some hon. Members:: Hear, hear!


Mr. Fraser:: That is the pot calling the kettle black.


USE OF MINISTERIAL OFFICE AND STATIONERY
Charles Joseph Clark: Madam Speaker, is it the position of the Prime Minister of Canada that it is appropriate for the office of the Solicitor General of Canada and the stationery of the Solicitor General of Canada to be used to influence a judge directly or indirectly?


Erik Nielsen: In a criminal trial.


Pierre Elliott Trudeau: Madam Speaker, that is a repetition of the previous question.


Walter David Baker: No, it is not.


Pierre Elliott Trudeau: I said that every witness influences a judge indirectly-
[ Translation]


Roch La Salle: It was the Solicitor General, not just any witness.


Madam Speaker:: Order, please. We are running short of time and we cannot hear the answer. If hon. members are interested, I shall again give the floor to the Right Hon. Prime Minister.


Pierre Elliott Trudeau: Thank you, Madam Speaker. The member for Joliette seems to have made a habit of constantly shouting across the floor because he has neither the courage nor the intelligence to rise in the House.


Roch La Salle: At least I am not trying to obstruct justice!


Pierre Elliott Trudeau: Does the hon. member wish to make charges?


Madam Speaker:: Order, please. I must ask the Right Hon. Prime Minister to answer the question put by the Right Hon. Leader of the Opposition, and perhaps ignore for the time being what the member for Joliette is saying, since he does not have the floor. The hon. member for Joliette.


Roch La Salle: I am not trying to obstruct justice. That is what I am saying.


Pierre Elliott Trudeau: Madam Speaker, I must say that if in the opinion of the Leader of the Opposition and the member for Joliette, testifying in an open court like any other witness is to tamper with justice, then, Madam Speaker, I would say yes.


Roch La Salle: The Right Hon. Prime Minister is not answering the question.


Pierre Elliott Trudeau: Madam Speaker, I-


Madam Speaker:: Order.


PRIVILEGE
Mr.  D. M.@: Madam Speaker, you may recall that earlier this day I did give you notice of a question of privilege concerning a matter that took place yesterday during the debates in the House of Commons. I refer Your Honour to pages 17733, 17734 and 17737 of Hansard for May 25, 1982. At the time the hon. member for Leth-bridge-Foothills (Mr. Thacker) had the floor on an opposition day motion. He stated, as reported on page 17733:
The fault lies directly with the cabinet but also with Liberal backbenchers. At the time of each vote in this House they choose to protect their personal incomes rather than choosing to vote against cabinet schemes which aggravate and cause problems rather than solve them.


Some hon. Members:: Hear, hear!


Mr. Coilenette:: Perhaps the applause from the other side underlines the fact that I should rise today and express this case. I rose immediately I heard these words yesterday. Mr. Deputy Speaker was in the chair and was engaged in a conversation with the Clerk of the House. Unfortunately, he did not hear the exact exchange of views. Subsequently, in all courtesy, I waited until the end of the hon. member's speech and I rose again to make the case to the Acting Speaker who was then in the chair. It is my contention, Madam Speaker, that the words spoken by the hon. member for Lethbridge-Foothills yesterday constitute a question of privilege for myself and for other backbenchers especially on this side of the House, but indeed, for all members in this House.
I draw your attention to Beauchesne's Citation 316(e) and (i). This citation reads:
Besides the prohibitions contained in S.O. 35, it has been sanctioned by usage that a Member, while speaking, must not:
(e) impute bad motives or motives different from those acknowledged to a
Member;
(i) reflect upon the past acts and proceedings of the House.
This is substantiated in Beauchesne's Citation 319(3) which reads as follows:
In the House of Commons a member will not be permitted by the Speaker to indulge in any reflections on the House itself as a political institution; or to impute to any member or members unworthy motives for their actions in a particular case; or to use any profane or indecent language; or to question the acknowledged and undoubted powers of the House in a matter of privilege; or to
May 26, 1982

reflect upon, argue against or in any manner call in question the past acts and proceedings of the House, or to speak in abusive and disrespectful terms of an act of Parliament.
I went on to state yesterday that this is clearly upheld in Erskine May's nineteenth edition at page 153. Finally, 1 want to put on the record what is found on page 424 of Erskine May's nineteenth edition under the heading of "Reflecting upon votes of the House." It reads:
The objections to the practice of referring to past debates apply with greater force to reflections upon votes of the House, unless made for the purpose of justifying a motion that the vote be rescinded. Those reflections not only revive discussion upon questions already decided, but are wholly irregular, inasmuch as the member is himself included in, and bound by, a vote agreed to by a majority.
We have been sitting here for the last few weeks and we have seen, in my humble submission, the rules of the House transgressed with some regularity. 1 think it is about time that members, no matter where they sit in the House, put an end to this kind of situation from occurring any further. I would submit-


Madam Speaker:: I would like the hon. member to refrain from referring to the fact that the rules have been transgressed. As far as I know, I have tried not to have those rules transgressed. If the hon. member feels that they have been transgressed then he must tell me exactly on what occasion and I will try to make the necessary redress. I think it would be preferable if the hon. member stuck to the point he wants to make just now.


David Michael Collenette: Madam Speaker, I certainly withdraw my last statement. Perhaps my emotion, as a result of what occurred yesterday, ran away with my reason. But certainly the example that I gave today clearly underlines the fact that there has been a transgression of the rules of the House. When I rose and brought this to the attention of the House yesterday, as reported on page 17737 of Hansard, the Acting Speaker undertook to review the record and reserved judgment on it. This is why I feel it is entirely appropriate for me to raise this matter today in this context.


Madam Speaker:: I was aware the hon. member might raise a question of privilege, but the exact terms of it were only given to me as I came into the House. I knew that yesterday the Acting Speaker had taken the matter under advisement. Unfortunately, I was unable to check Hansard fully to see exactly what the hon. member was referring to. I tried very quickly to examine the quotations from Erskine May to which the hon. member referred but I have been unable to check his other quotations. Therefore, I have to reserve judgment on the matter.


Erik Nielsen: Madam Speaker, I certainly have no objection to your reserving your ruling on the matter. But I trust that you will hear other submissions, if you are going to treat the matter raised by the hon. member for York East (Mr. Collenette) in any other fashion than absolutely frivolous and time wasting-


Some hon. Members:: Oh, oh!


Mr. Cousineau:: You said that, oh, boy.
Point of Order-Mr. Hnatyshyn


Erik Nielsen: Therefore, I would submit, Madam Speaker, that you hear other contributions before coming to a decision-if you are going to treat the matter raised by the hon. member for York East with any seriousness at all. Since he complains about the attribution of motives by one member to another, I would suggest that you also take into consideration page 17738 of Hansard. You will find there that, in response to a submission I was making at the time with respect to extended time, the hon. member for York East interjected an accusation by use of the word "blackmail". He introduced that interjection with the obvious intention of accusing me of attempting to blackmail the House. My motives certainly were not those which the interjection of the hon. member for York East conveyed. My purpose in rising is to suggest that there would be an obligation on the Chair to hear other submissions, if the matter is to be treated seriously at all.


Madam Speaker:: First of all, no one indicated an intention to speak on the particular question of privilege. However, it is still open to the Chair, after examining the first submission by the hon. member for York East (Mr. Collenette), to come back to the House and request further submissions. There is no problem there, if the Chair feels there is any necessity to go further into the matter.
Is the hon. member raising a new question of privilege about expressions which were used yesterday? He is signalling in the negative. That is fine; that is clear.


Erik Nielsen: Madam Speaker, 1 do not like to have my signals interpreted for Hansard. I can say categorically that 1 do not have the kind of thin skin which the hon. member for York East has. Even though his description of my motive leaves something to be desired in so far as his conduct is concerned, I have no intention of wasting the time of the House by raising a question of privilege on it.


POINT OF ORDER
Ramon John Hnatyshyn: Madam Speaker, I rise on a point of order with respect to question period today. During the course of question period the Prime Minister (Mr. Trudeau), in response to questions relating to the guidelines and directives sent to ministers regarding communications with members of the judiciary in the performance of their duties, read from the guidelines. If Madam Speaker looks at the "blues", I think she will see that he was reading, in response to the questions of the hon. member for Durham-Northumber-land (Mr. Lawrence), from the guidelines themselves. Those guidelines have been unavailable to us as Members of Parliament and have been retained as secret documents by the government.


René Cousineau: He read from Hansard.

May 26, 1982
Petitions


Ramon John Hnatyshyn: I should like to refer to Citation 327 of Beauchesne's fifth edition by Fraser, Birch, Dawson with which Madam Speaker will be completely familiar. It reads:
A minister of the Crown is not at liberty to read or quote from a despatch or other state paper not before the House, unless he be prepared to lay it upon the Table.
I could see from my seat that the Prime Minister was reading from a directive as opposed to any other document. I could see the paper from this distance of two sword lengths from the Prime Minister in this place in which I sit. I ask Your Honour to require the Prime Minister to table the directives and the guidelines to his ministers so that we in the House of Commons may see under what restraints and constrictions members of cabinet operate.


Madam Speaker:: The hon. member is correct in quoting that particular reference from Beauchesne's. It is not clear to me-and I will check Hansard-whether the Prime Minister (Mr. Trudeau) was quoting from an official document or from Hansard, as I believe was the hon. member for Durham-Northumberland (Mr. Lawrence). We will check Hansard; the point of the hon. member is well taken.



ROUTINE PROCEEDINGS


Henry Perrin Beatty: Madam Speaker, I have the honour to present the twelfth report of the Standing Joint Committee on Regulations and Other Statutory Instruments, in both official languages.
[Editor's Note: For above report, see today's Votes and Proceedings.]


PUBLIC ACCOUNTS-PRESENTATION OF FOURTEENTH AND FIFTEENTH REPORTS OF STANDING COMMITTEE
William Hillary (Bill) Clarke: Madam Speaker, I have the honour to present the fourteenth and the fifteenth reports of the Standing Committee on Public Accounts.
[Editor's Note: For above reports, see today's Votes and Proceedings.]


PETITIONS
Mr. Jack Shields (Athabasca):: Madam Speaker, I have the duty to present a petition on behalf of a number of my constituents in the riding of Athabasca. The purpose of the
petition, signed by 21 members of the Senior Dew Drop In Club, in St. Lina, Alberta, is to register their protest against the November 12 budget brought down by the Minister of Finance (Mr. MacEachen).
The nature of this petition is to request that the government immediately withdraw this destructive, discriminatory budget which is especially unfair to Canada's senior citizens. The petitioners hope that in your examination of the petition Madam Speaker, you will find the petition in order, sense the urgency of their plea, and that you might use the discretionary powers vested in your office to allow discussion and referral of this petition to the Standing Committee on Finance, Trade and Economic Affairs at the earliest possible moment.


Joseph Lloyd Reid: Madam Speaker, I have the privilege and honour of presenting a petition on behalf of the residents of the city of St. Catharines. The nature of this petition is to show that Canadian home owners are incensed that the budget papers presented earlier in November, 1981, even referred to the possibility of taxing imputed rent.
Home owners are the backbone of the nation. They want to show their opposition now so that any government, at any future date, would be able to look back at the experience of 1982 and take the position that any additional tax on them as home owners would be completely and totally unacceptable.


Mr. Dan Heap (Spadina):: Madam Speaker, I have the honour to present a petition by citizens of the city of Toronto calling on this Parliament to request the Prime Minister (Mr. Trudeau) to refuse to allow the testing of Cruise missiles on Canadian soil.


Mr. Stan Darling (Parry Sound-Muskoka):: Madam Speaker, I am pleased to submit a petition signed by 157 citizens of the district of Muskoka in the province of Ontario who now avail themselves of their ancient and undoubted right thus to present a grievance common to your petitioners in the certain assurance that your honourable House will therefor provide a remedy. They humbly sheweth that the private member's Bill C-451, regarding gun control legislation which deals with the number of firearms in circulation in this country and the control of the number of firearms in Canada; wherefore the undersigned, your petitioners humbly pray and call upon Parliament to oppose this legislation and deal directly with the present gun laws which are cumbersome, expensive to administer, and ineffective except to harass law-abiding people. And as in duty bound your petitioners will ever pray.
May 26, 1982


Mark Willson Rose: Madam Speaker, I am honoured to present a petition on behalf of some 300 residents of the Eagle Ridge subdivision in my riding requesting door-to-door mail delivery. These citizens cannot understand why, especially since it now costs 30 cents to post a letter, they are discriminated against and served by, in theory, a so-called suburban service or corner lock boxes, while their neighbours in older subdivisions receive door-to-door delivery each day.


QUESTIONS ON THE ORDER PAPER
[Stage Direction]
(Questions answered orally are indicated by an asterisk.)
Mr. David Smith (Parliamentary Secretary to President of the Privy Council):: Madam Speaker, the following questions will be answered today: Nos. 2,830, 2,872, 3,677, 3,678, 3,768, 3,771,4,183,4,273 and 4,282.


Mr. Clarke: 1.	With reference to the education leave costs recorded by the Privy Council Office for the Public Service Staff Relations Board at page 13.6, volume I of the 1979-80 Public Accounts of Canada, what guidelines were used to determine (a) which employees should obtain educational leave and whether such employees should be granted (i) leave with pay (ii) travel expenses (iii) payment for tuition (b) whether the skills to be acquired were needed on a permanent basis?
2.	What percentage of the education leave cost of $4,463 was necessitated by the acquisition of new equipment and by the need to have new skills in order to use the equipment?
3.	What percentage of the education leave was necessitated by reason of job redundancy because of the (a) acquisition of equipment (b) change in the role of the employing agency (c) change in the capabilities of employees?
4.	What percentage of employees granted such leave in the past three years have subsequently left the public service?


Hon. Yvon Pinard (President of the Privy Council):: 1. (a)
and (b) A training program for the development of qualified financial administrators was developed jointly by the Public Service Commission and the Office of the Comptroller General. The selection of the employee for participation in this program was based on the interest shown by the employee, the employee's demonstrated potential to successfully complete the program, and the responsibilities of the employee's position in financial administration. The education leave costs were authorized as per Treasury Board policy: chapter 110 subChapter 5 of the Personnel Management Manual-Conditions governing education, training and Development, including Subsidization.
2,	3(a), (b), (c) and 4. None.
Order Paper Questions


Mr. Clarke: With reference to the professional and special services recorded by the Privy Council Office for the Public Service Staff Relations Board at page 32.85, volume II of the 1979-80 Public Accounts of Canada, with particular reference to hospitality services (a) what was the name of each type of service (b) what was the amount paid for each service and, for contracts of a value more than $2,000, to whom was it paid (c) are guidelines used to determine when the Board will pay for hospitality and, if so, what are they (d) of the $4,383 paid for hospitality, what percentage was principally used to entertain (i) foreign visitors (ii) Canadian businessmen (iii) provincial public servants (iv) federal public servants (v) ministerial exempt staff (vi) Members of Parliament (vii) Members of Provincial Parliaments, Legislative Assemblies and the National Assembly (viii) Canadian dignitaries, such as the Governor General and Lieutenant Governors General (ix) federal Crown corporation executives (x) provincial Crown corporation executives (xi) members of federal commissions, boards and councils (xii) any other categories?


Yvon Pinard: (a) and (b) Hospitality by individual
officers:	$4,271
Arbitration Conference:	112
Total	$4,383
Contracts over $2,000-none.
(c)	Refer to Treasury Board Hospitality Policy chapter No. 360 of the Administrative Policy Manuals.
(d)	Records are not maintained in a way that would make it possible to provide this information.


Mr. Cossitt: To the knowledge of the government, how many persons from Poland were refused exit visas during each of the past three years by Polish authorities after approval of entry to Canada was given by Canadian authorities?


Hon. Mark MacGuigan (Secretary of State for External Affairs):: Tabulated below are the known number of refusal decisions made by Polish authorities in respect to applications by Polish nationals to emigrate to Canada. The Canadian Embassy in Warsaw is dependent on the applicant himself for such information. But since not all applicants keep the Embassy informed of such decisions or about changes in their plans to emigrate, the figures below are approximations only. However, as an indication of the co-operation shown by the Polish government prior to the imposition of martial law on December 13, 1981, it should be noted that only five cases were included on the last representational list presented to the Polish government on June 16, 1981, and of those only one is still unresolved.
1979	1980	1981
Emigration refusals by Polish
authorities-cases/(persons)	23/(45)	12/(18)	6/(12)

May 26, 1982
Order Paper Questions


Mr. Cossitt: To the knowledge of the government, how many persons from the Soviet Union were refused exit visas during each of the past three years by Soviet authorities after approval of entry to Canada was given by Canadian authorities?


Mark R. MacGuigan: Tabulated below are the known number of refusal decisions made by Soviet authorities in respect to applications by Soviet citizens to emigrate to Canada. The Canadian Embassy in Moscow is dependent on the applicant himself for such information. But since not all applicants keep the Embassy informed of such decisions, or about changes in their plans to emigrate, the figures below are approximations only.
1979	1980	1981
Emigration refusals by Soviet
authorities-cases/(persons)	55/(129)	35/(99)	13/(30)
1.	Mail received by inmates from Members of Parliament is considered to be privileged and CSC policy is to provide absolute confidentiality of communication. As to correspondence between inmates and legal counsel, it is normally exempt from opening and censorships. The director, however, has the authority to order that an envelope which appears to have originated from or to be addressed to a solicitor be opened for inspection where he has reason to believe that the unrestricted and unexamined passage of mail to or from a particular inmate represents a danger to the safety and security of the institution. The content may be read only to the minimum extent necessary to establish whether it is properly the subject of solicitor-client privilege. In the absence of such an order, the correspondence is forwarded to the addressee unopened. Statistics are not kept on the number of times such letters are opened.
2.	It is not the policy or the general practice of prison authorities to read the correspondence that inmates keep in their cells.


Mr. Cossitt: With reference to the answer to question No. 3,230 which staled that the government will not guarantee that RCMP security files will not be destroyed, altered or changed in any way during and after transfer from RCMP jurisdiction to the new civilian security service (a) what are all the details of government policy with regard to which files would be destroyed, altered or changed (b) what are all the reasons that the government would wish to destroy, alter or change such files in any way (c) will the government immediately reconsider its decision and agree to leave the RCMP security files intact?


Robert Phillip Kaplan: (a) No file destruction is taking place in the Security Service at this time. In response to recommendation No. 14 of the McDonald Commission report, I am presently considering a revised policy on the retention and disposal schedules for Security Service files.
(b)	Revised destruction and retention schedules are required for the efficient operation of the Security Service; also, see part (b) of reply to question No. 3,230 printed in Hansard February 9, 1982, at page 14814.
(c)	No.


Mr. Cossitt: 1.	Is it the practice of federal penal authorities to open or in any way inspect the mail received by inmates from Members of Parliament or from solicitors acting for the inmates and, if so, in how many cases was this done during the past three years?
2.	Is the mail at any later time read or noted by prison authorities visiting the cells of the inmates concerned and, if so, in how many cases did this happen in each of the past three years?


Robert Phillip Kaplan: In so far as the
Correctional Service of Canada is concerned:


Mr. Lewis: 1.	Were arrangements made for Mr. Clifford Olson's wife to visit him at government expense while he is in Kingston Penitentiary and, if so, at what cost?
2.	(a) Does Mr. Olson have a private cell in the Kingston Penitentiary (b) does he have a television set in his cell (c) are meals served to him in his cell (d) does he have a private exercise area away from other inmates?
3.	Does Mr. Olson or any other person designated by him receive any regular remuneration as a result of his confession and subsequent conviction and, if so, what amount?


Robert Phillip Kaplan: In so far as the
Correctional Service of Canada and the Royal Canadian Mounted Police are concerned: 1. No.
2.	(a) Yes, Mr. Olson has an individual cell as do all inmates incarcerated in federal institutions, (b) No. (c) No.
(d)	No, he exercises with other inmates on his range.
3.	No.


Mr. MacKay: 1.	Is the government involved in any way in Canarctic Shipping Company Ltd. of Ottawa and, if so, in what way?
2.	Is the Canarctic Shipping Company Ltd. operating the M. V. Arctic?
3.	Was the M. V. Arctic ever on time-charter to the U.S.S.R. chartering agency Sovfracht and. if so (a) what were the main contractual provisions of the time-charter (b) did the government approve the lime-charter?
4.	Has the M.V. Arctic any equipment, heretofore unknown to the U.S.S.R., for navigating in ice conditions?


Mr. Jesse P. Flis (Parliamentary Secretary to Minister of Transport):: Transport Canada advises as follows:
1.	Yes. Majority shareholder.
2.	Yes.
3.	Yes. Canarctic time-charters this vessel to North Water Navigation Ltd. of Montreal each winter. North Water Navi-

May 26, 1982

gation Ltd. sub-chartered it to Sovfracht for Baltic trading during winter period 1980-81 and 1981-82. (a) Unknown. This is commercial proprietary information of North Water Navigation Ltd. (b) No.
4.	No.


Mr. Herbert: What was the amount in the last year for which the information is available of the government contribution in (a) Ontario (b) British Columbia (c) Alberta to the costs of premiums for public service employees under provincial health insurance plans?


Mr. Norman Kelly (Parliamentary Secretary to President of the Treasury Board):: The total of the government's contributions made in fiscal year 1980-81 to the provincial authorities in Ontario, Alberta and British Columbia, on behalf of employees as a portion of their provincial health insurance premium costs, was as follows:
Ontario	$25,938,919.41
Alberta	3,398,217.62
British Columbia	9,241,861.05


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


Madam Speaker:: The questions enumerated by the parliamentary secretary have been answered. Shall the remaining questions be allowed to stand?


Some hon. Members:: Agreed.


David P. Smith: Madam Speaker, I ask that all notices of motions for the production of papers be allowed to stand.


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


Some hon. Members:: Agreed.
Taxation



GOVERNMENT ORDERS


[Stage Direction]
The House in committee on Bill C-l 12, to amend the statute law relating to certain taxes-Mr. Bussieres-Mr. Blaker in the chair.
On Clause 1-
Mr. Thomson:: Mr. Chairman, the latest financial reports of larger Canadian oil and gas companies such as Dome, Sulpe-trol, Turbo and a good many of the smaller Canadian-owned companies as well have revealed substantial losses in the first quarter of this year. I would like to ask the Minister of State for Finance to what extent this has been brought about through the petroleum gas and revenue tax which has seriously reduced the cash flows of all oil and gas companies.


Mr. Bussieres:: Mr. Chairman, the hon. member is making an assumption he has yet to prove, and 1 think that before drawing any conclusions on the basis of that assumption, he should establish a relation of cause and effect between the facts he is trying to connect. There is no clear evidence that the conclusion he is drawing is valid, and that the effect he is describing is produced by the causes he is willing to identify. So I would ask the hon. member to prove his case if he really wants to get it onto solid ground.


John William Thomson: Mr. Chairman, the losses which have been experienced by the companies engaged in the oil and gas business are self-evident. I would like to ask the Minister of State for Finance if he or his department have undertaken any studies which would show that the PGRT in itself has, in effect, produced cash losses in these companies? That is the question I am asking. There are many gas and oil companies, particularly the smaller Canadian oil and gas companies, that would have had positive cash flows in their financial statements if it were not for the PGRT. I am saying to the minister that in the case of Sulpetro, if he will take the time to look at the financial statement for Sulpetro, he will see that a cash loss in fact occurred because of the PGRT. If it had not been for the PGRT, that company would have had a positive cash flow. In making that statement I want to point out to the Minister of State for Finance that he cannot take the PIP grant as income.


Pierre Bussières: I may remind the hon. member of what I said earlier. If we look at the general state of the economy, it is quite obvious that there are certain enterprises involved in oil and gas exploration or development which are having prob-

May 26, 1982
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lems. However, the hon. member may recall that many enterprises operating in other industrial sectors are also experiencing financial difficulties, so that instead of saying that the petroleum and gas revenue tax is causing the temporary financial difficulties of certain companies operating in the sector and that this tax is the specific cause, I feel the hon. member should take a closer look at each individual case. He should also realize that if we look at the National Energy Program, there are many incentive measures-also mentioned in the bill now before the House-which are aimed at helping companies involved in oil and gas exploration and development and are indeed helping them to step up exploration and development activities and thus improve their financial position.


John William Thomson: How can the minister stand up and say that the government is trying to help the oil and gas business to find oil when we have 55 rigs running in western Canada today and prior to the National Energy Program we had 455 rigs working? Would you not say that that is ample evidence of the fact that the National Energy Program is not working and not providing an incentive? The government has taken all the cash flow away from the industry so there is nothing left for them to explore with. In spite of the fact that the government may be giving a 30 per cent PIP grant to encourage an oil and gas company to search for new oil and gas in western Canada in the conventional areas, the companies still have to come up with 70 per cent of the cost themselves. The problem is that they do not have the 70 per cent, so it does not matter what the government is prepared to give them.
Furthermore, even in the frontier areas where the government puts up 80 per cent of the grant, if a well costs $40 million in the Beaufort Sea and the company has to put up 20 per cent of that, that is $8 million. Has the government made any study of the number of companies that are in a position to put up $8 million to explore in the Beaufort? In the case of a $70 million well in Hibernia, how many companies can put up $6 million? Has the government made any study of that?
[ Translation]


Pierre Bussières: Mr. Chairman, I must say I am somewhat surprised. Allow me to turn the question around. If the hon. member were to analyse the Petroleum Incentives Program, he would realize that a grant of up to 80 per cent of exploration costs will be given to this enterprise. Assuming that a similar refund or grant were available to other industrial sectors, I wonder whether the latter would not see this as an incentive to invest in and develop their business. I may also point out that the bill before the House today, especially the second part, implements an agreement negotiated between the government of Alberta, among others, and the federal government, and that according to the terms of the new agreement, the oil and gas pricing system will, in fact, make it possible for oil companies to increase their income and thus have access to
greater cash flow for continuing their exploration and development activities.


John William Thomson: Mr. Chairman, the proof is in the pudding. The fact of the matter is that oil and gas exploration is at an all-time low. Would the minister tell me why companies are not looking for oil and gas today? 1 can tell him the reason. They do not trust the government. I do not see what bearing the fact that an agreement was reached between the government of Alberta and the federal government has to do with the issue. The fact that the federal government and the Alberta government took the lion's share of the pie and left nothing for the industry is the reason why companies are not looking for oil. Would the minister comment on that?
[ Translation]


Pierre Bussières: Mr. Speaker, I think the hon. member can probably try to find all kinds of causes for the fact that there is, or there may have been, a slowdown in some operations in the oil and gas industry. However, I may remind the hon. member of what I said earlier, namely, that the economy in general is in serious difficulty, and that not only investment but also the actual operations of businesses in general have slowed down considerably, and that is caused by a drop in over-all demand which has effected the general state of the economy. I may also remind him that there has also been a decline as far as energy is concerned. There has been an unexpected drop in world oil prices, and there has also been a substantial decline in energy demand. So, instead of trying to prove that the National Energy Program has caused a slowdown in some areas of oil and gas exploration or development, the hon. member should look at the measures the Program contains to stimulate investment and the exploration and development of our natural resources, namely, oil and gas.


John William Thomson: Mr. Chairman, 1 have examined the National Energy Program in depth ever since it was presented. With all due respect to the minister, I would suggest that I know more about the National Energy Program than anyone on the other side of the House, including the Minister of Energy, Mines and Resources.


Some hon. Members:: Hear, hear!


John William Thomson: The Minister of State for Finance is standing here in the House, trying to tell the Canadian public that the reason the Canadian oil and gas industry is not going out and exploring is the price. That is what he said, that the world price of oil has declined. That is true, except that we still do not happen to be anywhere near or even close to 75 per cent of world price in Canada, so I do not see how that has a bearing on it.
He also said that general economic conditions are the cause of the decline in the oil and gas business. That is simply
May 26, 1982

tommyrot, and he knows it. I would like him to stand up and at least admit that the price and the general economic conditions-well, let us put it another way-that the National Energy Program has exacerbated the problems the oil and gas industry is experiencing. At least, let us get that on the record.


Pierre Bussières: Mr. Chairman, considering the aggregate of possible causes, I would like to ask the hon. member whether he has had a look recently at the statistics on natural gas sales, and whether he could not find another explanation here for some of the slowdowns in exploration and development. I repeat that this would be oversimplifying and even distorting the situation. Since he is so well acquainted with the National Energy Program, he will agree that it would be entirely false to say that the program discourages investment and that it has reduced exploration and development activity, when in fact it contains very generous provisions for stimulating oil and gas exploration and development.


John William Thomson: Has the Minister of State for Finance had the opportunity to look at the number of Canadian companies whose bond ratings have deteriorated in the last eight months, particularly companies involved in the Canadian oil and gas industry?
[ Translation]


Pierre Bussières: Mr. Chairman, I think that if the hon. member wants us to sit down and analyse specific cases, we can always take the time to do this. However, I feel that if the hon. member wants to proceed with an exhaustive analysis of this bill, we will not have enough time this afternoon to examine the financial statements of companies involved in oil and gas exploration and development.


John William Thomson: What I was trying to determine was whether the Minister of State for Finance knows of the very significant deterioration in the financial position of major Canadian and foreign companies engaged in the Canadian oil and gas industry. Anyone who had any appreciation whatsoever of the industry would surely want to take a look at the macro impact of the National Energy Program on the bond ratings of those companies engaged in our Canadian industry today. 1 will say that if the minister does not know the answer, 1 will tell him the answer. The bond ratings of many Canadian companies and foreign companies have deteriorated very significantly because no one wants to invest in Canada any more. That attests to the fallacy and the disastrous consequences of the National Energy Program.
Let me move on to one further question. Does the government feel that it has been honest with the Canadian public in revealing the cost of its policies of Canadianization? Day in and day out we hear that the government is fully supported by the Canadian people in its Canadianization program. Does the minister know whether the Canadian people are really aware
Taxation
of the effect this policy has had on their mortgage interest rates, on the value of the Canadian dollar and on investor confidence? Can the minister say that the Canadian public is aware of those conditions and costs? Is the minister confident that Canadians are aware of the cost to them of the Canadianization program?


Pierre Bussières: Mr. Chairman, I am convinced that Canadians are well aware of the benefits of the National Energy Program and also of Canadianizing a major sector of our industry which concerns mostly the oil and gas sectors. However, Canadians see economic developments much more as a whole than the hon. member, and they consider them as interrelated elements instead of trying simplistically to blame a single cause for our present problems. The indicting statement just made by the hon. member would have us believe that Canadians see the National Energy Program as the cause of the high level of our interest rates. Furthermore, we would have to conclude that the Canadian people consider the National Energy Program as the only cause of the extremely difficult and painful unemployment rates which prevail at this time.
Well, I would like to point out to him that the many Canadians with whom I have had an opportunity to discuss the matter have a much more Complex view of the situation. On the one hand, they see the benefits of the National Energy Program. They also know that we must pay the price if we want to achieve a certain rate of Canadian ownership in our industry. They also realize that the government is showing good judgment when it comes to the pressure which must be brought to bear for this Canadianization to take place, but they also know that, like all other industrialized countries, Canada is facing an extremely difficult and severe economic crisis which forces us now to live with high interest rates, high inflation and also high unemployment. Canadians also recognize, with the government, that to create again a climate of confidence conducive to capital investments in oil and natural gas pros-pection and development, we must establish an economic climate capable of restoring the investors' confidence and encouraging them to make the wheels of the economy turn once again, which will also bring down interest rates and unemployment. However, the fundamental cause of these problems is the climate of uncertainty resulting from a high level of inflation. This is the general picture of the economy which Canadians have. They support the government in its ongoing fight against inflation, and most importantly, they avoid blaming a single cause, namely the National Energy Program, for everything that is going wrong in this country.


John William Thomson: I do not know who the Minister of State for Finance is talking to. He cannot be talking to the same Canadians that I am talking to. I am not trying to imply that

May 26, 1982
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the National Energy Program is the cause of all of our problems with respect to inflation, unemployment and high interest rates. That is not what 1 said. That is what the Minister of State tried to impute to my remarks. 1 am saying that the National Energy Program has exacerbated all these problems. It has increased unemployment &ed440;-l in this country. It has increased the rates of interest that would otherwise prevail and has increased the rate of inflation in this country.

If the minister does not realize what the National Energy Program has done to investor confidence in this country, all he has to do is to talk to Canadians and ask them whether they want to invest in anything in this country today. They have completely lost confidence in this country.
Let me ask one final question of the minister. Is he aware of the workings of the machinery associated with the incremental oil revenue tax? Is the minister aware, and this is a simple question, how many producing oil wells there are in Canada today?


Pierre Bussières: Mr. Chairman, the hon. member probably would have us take a catalogue, go through the pages and have a look at it. I think the exercise he would indulge in is not that serious. He goes all the way from gross allegations as to the consequences of the National Energy Program to asking how many bolts there are on a cart's wheels. My view is that kind of exercise is entirely specious.
He suggested the Canadian oil industry was facing serious problems. I would remind him that according to data from the petroleum monitoring agency, financial results and total revenues from overall activities in the oil industry for the first quarter of 1981, which is not 20 or ten years ago, but for the first quarter of 1981, total revenues increased by 22 per cent. The hon. member suggests that things go wrong because of the National Energy Program. The NEP was in force, and nonetheless the 22 per cent increase during the first quarter amounted to some $24 billion. This is what he calls a drop in revenues. This is what he calls an energy program that threatens the whole oil industry. The hon. member should look at his figures. Net revenues, after tax profits in the oil industry from all other activities experienced a 21 per cent drop to $1.8 billion. And what caused that drop? A slowdown in certain activities. However, increased net revenues from the three other main segments of the industry made up for that decrease in activities and revenues.
I would remind the hon. member that when looking at momentary difficulties that may be experienced by an individual segment, he should look at the figures, for instance, of natural gas sales to the U.S. for the last three months, and he should state what those figures are. Because they also were affected by the American recession. Can he also give us drilling activity figures in the United States? Can he note that there are also decreases in that area south of the border? I
therefore suggest to the hon. member that when he blames the National Energy Program only, he oversimplifies.


The Assistant Deputy Chairman:: Order, please. The Chair is in somewhat of a difficulty. Because the hon. member is the first spokesman for his party, I permitted him to speak for almost five minutes over his normal allotted time. Perhaps in the present case I should seek unanimous consent to see if that is agreeable. Is there unanimous consent for the hon. member for Calgary South to put a final question?


Some hon. Members:: Agreed.


John William Thomson: Mr. Chairman, I have one further comment. Yes, drilling activity is down in the United States by almost 30 per cent. I am prepared to admit that. As I said, Canadian activity has gone from 455 rigs down to 55 rigs in western Canada. United States activity has declined from 5,000 rigs to 3,500. That is somewhat different.
My last point is that I find it incredible that the Minister of State would stand up and quote figures from the petroleum monitoring agency for the first quarter of 1981, the three months ended March, 1981, when the National Energy Program came into effect in October, 1980.
Is the minister's knowledge of the industry so limited that he believes the industry would flip that quickly in the space of five months, that a whole industry would, all of a sudden, turn off the taps? Is his knowledge so limited that he would try to relate figures for the first quarter of 1981 to something that occurred in 1980? That is absolutely ludicrous.


Pierre Bussières: Mr. Chairman, I could turn the hon. member's argument against him and ask him if he also believes that a single cause can explain some difficulties experienced by investors in that area? The hon. member is also very much aware that when he tries to blame the National Energy Program as the sole cause of all evil in Canada, he is dead wrong. He should admit it in his comments and in the way he puts his questions.


Mr. Waddell:: Mr. Chairman, I have three or four questions for the Minister of State for Finance-

-I am not an expert, self-proclaimed or otherwise, with regard to the energy industry in Canada. I represent a riding of little people, consumers, the ordinary people in the east end of Vancouver.
When the National Energy Program came out, along with some other people I supported the thrust of that program. I did so for two reasons. First, we wanted the Canadian consumer to get as much of a break as possible with prices, at the same time considering that we have to receive good value for western Canadian resources. Also, we do not have to follow slavishly the OPEC cartel prices. That was the feeling at home. Also
May 26, 1982

we wanted to help support Canadian companies in the industry as much as possible. We thought it terrible that such a vital industry as oil and gas should be 70 per cent controlled by foreign companies, mostly American. There was a lot of good will. Perhaps 1 was in a unique position to look at this as I represent a western Canadian riding, unlike most hon. members opposite, and also have a consumer's point of view. After two years we have the worst of all possible worlds. We have high prices continuing to go up, with both the Liberal and Conservatives being high-priced parties, with nothing coming back to people who cannot afford to pay those prices. There are no grants, tax credits or whatever.
There is a second problem which I have been told about by members of the Canadian industry. The minister can see that the president of Sulpetro and his assistant are in the gallery. He might talk to the president afterwards. I am told that the Canadian companies are not being helped. In fact, Canadian companies have suffered dramatically and drastically in their cash flow.
I say to my friends on the right that it has taken me a while to see that but I am starting to see it. The big companies like Imperial have been able to survive the National Energy Program. They can ride it out. We have the worst of all possible worlds.
1 want to put my question to the minister on the basis of what I have just said. First, I am informed that the natural gas and liquids tax which is levied after the gas has reached the city gate represents a tax on gas consumers equal to about 65 cents of the burner tip price of $5.51 per MCF. This tax, plus the general gas price increases, has meant the following increases for home heating with natural gas, and I cite these costs: In Ontario, in the winter of 1980-81, the average home cost was $727; in Alberta, $425; in my own province of British Columbia, $447. In the winter of 1981-82 it went up in Ontario to $848; in Alberta to $544; and in British Columbia, way up to $708. Could the minister confirm these figures? Would he agree with me that the consumers have been hit by the National Energy Program and the agreement with the western producing provinces, and that the government does not have in place any way of helping old people and people on fixed incomes, pensioners, and poor people who are faced with this tax? Would the minister agree that this is a regressive tax on people, and would he indicate to the House what benefit the government is prepared to provide in this bill or otherwise to help people with these dramatic increases in the price of home heating?
[Translation}


Pierre Bussières: Mr. Chairman, first of all, I am not sure I could either confirm or deny the figures given by the hon. member for heating costs in the various provinces. I would have to look at these figures and compare them with the increase in the price of fuel and the increased tax component of that price. However, I should like to point out that the price
Taxation
of gas is still 65 per cent of the price of oil, and that the tax system resulting from the agreement with Alberta was actually a compromise reached by the two levels of government. I think it is very unrealistic to state that the government has no right to impose a tax or to derive income from the oil and gas industry, when that same government is setting up programs to help the industry and to help expand user capacity for gas and other energy products.
The hon. member made a point of stressing the regressive nature of a tax levied on a consumer commodity. I feel there is another aspect we must not forget. Of course, people on low incomes also have to pay taxes on heating fuel and they have to pay their heating bills just the same as people on high incomes. But the hon. member will recall that we have other ways of compensating for such increases, to provide relief for persons on fixed incomes, including senior citizens, or those on very low incomes. I may impress on the hon. member that in Canada, for instance, because of the fact that the basic tax exemption and the tax tables are totally indexed, the individual's purchasing power is, as it were, protected against increases in the cost of living.
The hon. member mentioned the case of senior citizens who, in fact, have no choice because they are often living on barely sufficient incomes and cannot do any extra work since they are retired. The government has substantially increased the guaranteed income supplement, and Canada Pension Plan benefits are also indexed. Where people on low incomes are concerned, I already mentioned the cost-of-living indexing in our tax tables. This also applies to family allowance payments, which are also a form of income supplement, a social measure, so that any increase in the cost-of-living caused either by rising oil prices or other increases is absorbed, as it were, by the cost-of-living indexing applied to the Canadian government's social measures and also to the personal income tax system.


Ian Gardiner Waddell: I would say to the minister, with respect, that I think there is a little bit of nonsense there. One aspect is that, with the index, the older people may get an increase in their pensions of perhaps 9 per cent, on account of the cost of living, but two things happen. One is that energy costs go up by 18 or 24 per cent. They have to pay that. The second thing is that in my province they get the pension and then a supplement from the province, and as soon as the pension is increased the province comes and reduces the supplement, so they are put in the same position, and they are suffering.
Let me ask the minister this short question and then a long one. What happened to the gas bank in the National Energy Program? It is not in the bill. It is a way of helping small producers whose gas is shut in, to stop them from all that continued pressure in the export of gas. If we had the gas bank as was originally proposed in the National Energy Program, we could help some of the cash flow of the small producers and help some of the Canadian companies.

May 26, 1982
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[ Translation]


Pierre Bussières: Mr. Chairman, 1 would like to be able to answer the hon. member's question about the gas bank. Unfortunately, 1 am not that well informed; although I was very careful to examine very closely the provisions related to the excise tax and to the Petroleum and Gas Revenue Tax, 1 must confess my ignorance and admit that my knowledge does not go that far. 1 know the hon. member punctiliously attends the hearings of the committee which is studying the energy bills and I feel confident that he will have an opportunity to direct that question to my colleague the Minister of Energy, Mines and Ressources (Mr. Lalonde) and that he will not hold it against me if I am not as knowledgeable as he is.


Ian Gardiner Waddell: I thank the minister for his answer. I might suggest that that is one way the government could help the small companies. Another way the government could help small companies is by changing the filling out of forms in this PGRT and lORT, which is just horrendous, 1 am told. We should not make it any more difficult for these small Canadian companies than is necessary. That is part of the reason they are so alienated from Ottawa. The minister might want to have a look at changing those forms.
On October 1, 1981, the wellhead price of conventional oil increased by $2.50 a barrel. This brought the wellhead price to $21.25, or $2.50 more than the planned increase of $18.75 under the 1980 NEP price schedule. It was as a result, I think, of the agreement with Alberta. However, there is the incremental oil revenue tax, which is supposed to prevent a windfall gain, between the higher priced schedule and the September 1981, agreement on conventional oil, and the old National Energy Program price. It does not come into effect, by this bill that we are studying here, until January 1, 1982. As a result, no lORT was levied between October 1 and December 31, 1981, when the price went up $2.50 a barrel more than allowed by the NEP. In addition, the old PGRT rate of 8 per cent, as opposed to the new rate of 12 per cent, also applied to that price increase between October and December. I estimate that the loss of tax revenue to the government was about $160 million because it did not apply that tax.
Could the minister tell us why the government decided to give the industry this windfall at that point and, if the minister agrees with what 1 am saying, is he prepared to accept an amendment, or to move an amendment, to collect those taxes from October to the December 1981 price increase?


Pierre Bussières: Mr. Chairman, the different method of tax collection to which the hon. member is referring must be examined and understood in the context of the general agreement which was signed by the province of Manitoba and the Government of Canada because it was an integral part of the negotiations. It is important to remember that if we keep in
mind the starting positions of the parties and the agreement, there were compromises throughout the negotiation process and, as it happens, that particular development to which the hon. member is referring is one aspect of that compromise. Therefore I very humbly suggest that if we were to accept his proposal we would be breaking one part of the agreement and showing bad faith toward the province with which we have negotiated that agreement.


Ian Gardiner Waddell: Mr. Chairman, I wonder if the minister would consider a suggestion. It involves the whole basis for the PGRT and the IORT. Let us be frank; the reason these taxes were imposed was that in one period the oil industry was making a lot of money. The industry is in trouble now; I have acknowledged that before, but their situation last year was like that of the banks. The industry was making piles of money, and now it has been cut down somewhat. The oil industry made money; it was bound to do so as prices went up. When the market price in the United States went up to the world price, what the Americans did was to bring in a windfall profits tax. What we in Canada have done has been to bring in this PGRT.
I pointed out a few minutes ago that there seem to be at least two problems. One is that there is a lot of paper work. The second problem is that it is very difficult for small Canadian companies. They are getting it right off the bottom, and they just do not have the extra money big companies are getting. We are hurting small Canadian companies, the very companies we want to help.
Will the minister consider what I am suggesting as an alternative? Why did he not? Perhaps that should be the question. Perhaps he can enlighten me on this. I suggest one source of collection, a provincial royalty, and then the federal government could get a slice of that provincial royalty. It could be added on. There could be one royalty so that companies do not need to go to this government over here and that government over there. They could have one royalty to pay, and the federal government could get its share out of that royalty. I know that means co-operative federalism, but would that not be a possible way of collecting the money the federal government needs, instead of going by way of the PGRT and the IORT? An accountant told me she has been trying constantly for the last three months to understand how to assess these taxes. People are having a great deal of difficulty.
What does the minister think of my suggestion of proceeding with a different method of taxation and getting the same result?


Pierre Bussières: Mr. Chairman, 1 appreciate the concerns of hon. members and I think that the great majority of hon. members are aware of the problems faced by the industry as a result of red tape as such, which is a sort of phenomenon of inertia, and also because there are many kinds of taxes to be collected which are applicable at various levels.
May 26, 1982

The hon. member suggests that paperwork and levels of tax collection could be eliminated through a single tax system, and then the money collected would be divided among the federal and provincial governments concerned under an agreement, according to standards and volumes to be determined. That is a suggestion. The agreement will expire in a few years. When the next agreement comes up, the hon. member's suggestion could certainly be considered.


Mr. Benjamin:: You don't have to wait that long.


Mr. Peterson:: Mr. Chairman, in the midst of this debate about our National Energy Program and the PGRT, which is an integral part of the program, I think it is very useful for us as parliamentarians on all sides of the House to recall where we have been in the past, what we have come through and where we are today. The PGRT is a very integral part of a very complicated but critical and important program for the future of Canadians.
In this exercise I would like to take the House right back to the time of the last election, at which time a number of promises were made by the then official opposition. After I have gone through those promises, hon. members will find that they are all incorporated in the National Energy Program as well as in the agreement reached with Alberta, British Columbia and Saskatchewan, the producing provinces. At the time of the last election campaign we promised there would be no 18-cent excise tax increase. We also said the 1980 increase in the wellhead price would be under $4 a barrel. Third, with respect to price we said that over a four-year period the cost to consumers would be less than the cost under the Crosbie budget. We also said we would accomplish these three objectives through a mechanism known as a made-in-Canada price, a blended price.
Let us look at the record. It is obvious we did not introduce the 18-cent excise tax increase. What we have is a three cents a gallon tax which goes into the Canadianization fund, which is designed to promote one of the other major legs of our program.
With respect to the promise for 1980 pricing, we felt-and we agreed-that the price should not go up as much as the Crosbie budget had indicated, $4 a barrel, and the actual price increase which we negotiated for 1980 was $3.
Let us look at the four-year period and the predictions we made respecting cost to consumers, because it is consumers 1 am concerned about. I am concerned about the consumers who live in Willowdale. Consumers are the ones who are affected most directly by the entire impact of our National Energy Program. The National Energy Program is designed to provide assistance and to help and benefit our consumers. We have to admit that our producers are an integral part of this. The producers and the provinces play a key role in this, but the thrust of the program is to assist and be of maximum benefit possible, recognizing the exigencies consumers have.
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Let me repeat again that the promise was that over a four-year period the cost to consumers would be less than it would have been under the Crosbie budget. The Crosbie budget predicted that by taking consumers to 85 per cent of world price, by 1984 the price would be up to $53.70 per barrel. In reality, our program as worked out in conjunction with Alberta last year was 22 per cent lower than that at $41.75 a barrel.
This has very important implications for the consumer. For example, the cost of heating oil would be 12 cents less per gallon, for gasoline 37 cents less per gallon, and for natural gas used to heat homes it would be $3.11 per thousand cubic feet less. Over a four-year period, comparing the Crosbie budget with the agreement we arrived at with Alberta-I think these are the important figures because they affect consumers-it will mean a saving of $450 for the average oil-heated home, $1,290 for natural gas, or an average household saving over that four years of $890.


Mr. Siddon:: Tell the truth. What is the world price?


James Scott (Jim) Peterson: How have we achieved this result, Mr. Chairman?


Thomas Edward Siddon: By chicanery.


James Scott (Jim) Peterson: It is very simple when you break it down. The Crosbie budget promised 85 per cent of world price by 1984. Our price, which was lower, was not a floor price but a ceiling beyond which prices would not go. If the orderly increases we provided for during that period of time were met, we would have achieved that ceiling by approximately 1986. What has happened-and I welcome it as a boon to the consumer-is that the world price has fallen. It has not risen as high as we or the Crosbie budget anticipated, the budget on which the opposition members based their energy program and, incidentally, all their criticism of our program. The world price has just been reconsolidated by OPEC at $34 a barrel. I welcome that news, although it has caused some strain because the predicted increases have not come about. But we should be applauding that, and we are.
There is another important aspect which cannot be ignored when dealing with the National Energy Program. I just talked about price. How was that price divided among the three major players involved in producing and distributing energy to consumers? Before the NEP was brought in, the share was roughly 11 per cent for the Government of Canada, 42 per cent for the government of Alberta, and 47 per cent for the industry. Pursuant to the agreement between the federal government and the government of Alberta on September 1, 1981, the federal government's share has increased to 25 per cent, Alberta's share has declined to approximately 30 per cent, and the industry's share has declined to 45 per cent.


Thomas Edward Siddon: What do you do for your share?


James Scott (Jim) Peterson: The price agreement and revenue sharing are just two portions of the NEP, Mr. Chairman. What I am
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May 26, 1982
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happy about in dealing with those two aspects is that we were able to honour all of our election commitments. We are able to give Canadians a made-in-Canada price lower than predicted by the Crosbie budget, which is to the benefit generally of consumers, but obviously also to the benefit of the people of Alberta because their government accepted that price and that regime for revenue sharing. Yes, the industry took a cut, but it was from 47 per cent to approximately 45 per cent.
Two other aspects of the NEP were conservation and Canadianization, and they are critical to the over-all program the thrust of which is designed to benefit the consumer. It might legitimately be asked: What do we mean by conservation? Well, number one, we want to cut down the use of energy by Canadians as much as we can. This has involved programs designed to help Canadians consume less energy. We have seen in automobiles a reduction in the size of engines and downsizing of the automobile itself. We have seen insulation programs for plants and factories through tax incentives which have been aimed to help industry enter into conservation. We have seen conversion programs to get off the expensive fuels in short supply and on to fuels which are in abundance. If we have an energy shortage, it is only a shortage of oil. That is evident because we have to import approximately 30 per cent-


Thomas Edward Siddon: It was 20 per cent in 1979.


James Scott (Jim) Peterson: -of our oil needs at this time. None of us want to be dependent on imports at world prices, so what have we done? Under the Canadian Home Insulation Program we will give home owners up to $500 to insulate their homes and improve the efficiency of their heating plant by as much as 40 per cent, or 50 per cent in some cases, through judicious use of insulation. The government has stepped in and said to Canadians that conservation is important to them because they can save money. We have also said to home owners who use oil that we will help them get off oil and on to alternate heating fuels such as gas. We have over 100 years proven reserves of gas in Canada at this time, and if you add the reserves which are not hooked up or presently too far from a pipeline, or not adequately proven, we would have even more.
1 am so confident about the future of natural gas in this country that you might say I am talking almost like some of the western explorers for gas who are very bullish about our future. The problem is not that the explorers are not finding gas, Mr. Chairman; the problem is that they cannot sell it. They have no market for that gas. What have we done? More than a year ago, over the objections of the NDP, we entered into an export arrangement whereby we would have the prebuild to take Canadian gas south of the border. I am happy that we have the markets developing because of the courage we had at that time, without support from the Tories until a few of the oil companies out west started to pressure them.


Mr. Huntington:: That is totally misleading.


James Scott (Jim) Peterson: The Tories were reluctant to talk about the pre-build. They were pretty reluctant to stand up and encourage us to get ahead with the pre-build.


Donald Alex Blenkarn: Keep talking, you are doing a fine job.


James Scott (Jim) Peterson: Maybe the Tories were worried about the NDP. I am glad that in the end the Conservative Party sided with our party against the NDP and authorized the construction of the pre-build.
I am happy about that because we can use those gas revenues from the export of gas to help us with other national programs, including the National Energy Program. &rfl400;-1
We have also encouraged the construction of gas pipelines, which will increase the use by eastern consumers of western production for which they would not otherwise have markets. This is good for the western producer and it is very good for the eastern consumers. The hallmark of our National Energy Program was the fact that gas would be priced at only 67 per cent of the price of oil. There again is an added incentive that we have built into the National Energy Program to assist consumers conserve our precious oil resources and switch to the bountiful gas reserves that we have in Canada. Again, this is a program that 1 have indicated is beneficial to consumers in Canada and to producers. 1 want to see far greater utilization of gas. But this does not mean only gas. Again, we are looking at the resources that we have.
I have said already that we have an almost infinite store of energy reserves here in Canada. Maybe we do not have them right at this present moment. Maybe they are not here exactly this day, but when we look at alternative energy sources, renewable energy, such as wood and biomass, which can constantly be replenished through adequate conservation measures, we can cater to and provide for the heating requirements of many Canadians in many parts of our country.
When we look at alternative energy, such as solar, and the use that can be made of the sun when it shines, even in a cold climate by trapping its energy and using it to help us-


Thomas Edward Siddon: Can you prove that?


James Scott (Jim) Peterson: Can I prove that, the hon. member opposite has asked. Can I prove that solar energy can be trapped and tapped in Canada to help us heat our homes? Yes, we are doing that now.


Thomas Edward Siddon: It is very costly and it is not practical.


James Scott (Jim) Peterson: It is costly, but we are doing it. Research and development is going ahead at a very fast pace. We have also introduced a program to help people who drive automobiles to convert to the more ready sources of energy. I have talked about programs through which we will put up $400 for each vehicle that will be converted from gasoline use to propane use. Propane is cheaper. It can be manufactured from the vast reserves of the natural gas that we have. This is a progressive program.
May 26, 1982

We have many alternative sources of energy, from nuclear, to solar, to biomass, to forest products, and we have hydrogen. An excellent report was released concerning hydrogen by the Special Committee on Alternative Energy and Oil Substitution chaired by the hon. member for Pontiac-Gatineau-Labelle. We do have these alternative energy sources available to us.
We have introduced a program of development so that we can get at them. The third aspect of our program, apart from the pricing and revenue sharing regime and apart from the conservation conversion scheme, is our program for Canadiani-zation. We have said that what we want to do over the ten-year period during which the National Energy Program is in effect is to reduce foreign ownership in this key sector from 75 per cent to 50 per cent.
1 know some hon. members opposite have criticized us. If they are on the far right of me and belong to the New Democratic Party, they have criticized us for not going far enough and not going all the way. If they belong to the official opposition, they have criticized us for going too far and for a program which we call Canadianization but which they, in their rhetoric, refer to as nationalization.


Thomas Edward Siddon: That is why everybody is unemployed.


James Scott (Jim) Peterson: We have introduced a program which has made possible the existence of what, I think, is one of the great institutions and hallmarks of Canadian economic development.
I am referring, of course, to Petro-Canada. Again, the roots of Petro-Canada go right back to the election of 1980.


Thomas Edward Siddon: How much cheaper is Petro-Canada's gas at the pumps?


James Scott (Jim) Peterson: At that time, the Conservatives were saying "We will abolish Petro-Canada."


Thomas Edward Siddon: How many bargains have they passed on to the consumer?


James Scott (Jim) Peterson: We stood up and said that Petro-Canada must be an integral part of the development of Canada's resources. Petro-Canada is now playing a major role, not just in owning a vertically integrated oil and service company, one that goes right from producing fields to the gas pump, one to which people from coast to coast can drive to fill up their cars with gasoline made in Canada and sold by a totally Canadian company, which the taxpayers own, but it has given us a window on the energy industry. It has given us the method to determine what the facts are out there. I am proud of the role being played by Petro-Canada. But this is not the key part of our Canadianization program, it is only one small portion of it. The major aspect is to determine that the private sector in Canada has an opportunity to expand, grow and flourish. We have seen that happening.


Thomas Edward Siddon: That is why people cannot afford mortgages.


James Scott (Jim) Peterson: I would like to take the liberty, Mr. Chairman, of-[DOT]
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Denis Éthier: Order, please. I am sorry but I have tried to catch the hon. member's attention to advise him that his time has expired and that he can proceed only with the unanimous consent of the House. Is there unanimous consent for the hon. member for Willowdale to continue his remarks?


Some hon. Members:: Agreed.


Some hon. Members:: No.


Donald Alex Blenkarn: Mr. Chairman, we heard a rather interesting exercise from the hon. member for Willowdale. I hope he has an opportunity to have a chat with his brother, in the Ontario provincial Liberal Party. I hope he will talk about the ownership of oil companies by the state and the way in which the party his brother operates in the province of Ontario criticizes the national energy policy and the energy policy of the province of Ontario at every possible opportunity. I thought perhaps we might have heard something illuminating from the hon. member from Willowdale. We thought that he would have read the title of the bill, it being an amendment to the Excise Tax Act. We reflected on his opening remarks that the Liberal Party had promised not to change or increase the excise tax. Of course, what this bill contains is an enormous increase in excise taxes, not only with respect to gasoline because it does not affect gasoline as such, but it affects the raw product at the wellhead prior to its going to the refinery. Instead of having an excise tax at the refinery gate with respect to separate products produced from that refinery so that the tax might be more heavy on gasoline and no tax on home heating oil and no tax on gas used for the production of fertilizer for farmers, we wind up with this horrendous tax that is impoverishing farmers and impoverishing people who are forced to heat their homes with oil. It is an unfair tax that has nothing to do with ability to pay. It is a tax on heat in a cold country. It is a tax on energy required to make farms and the rest of the country prosper. It is a tax at the base of the product. The tax is passed on with each add-on, as it passes through the system, and mark-ups are placed on the tax by people who refine and distribute the products and by people who manufacture with the products, the chemicals and other materials from gas and oil. It is a bad tax.
I want to ask the minister some questions. The hon. member for Calgary South asked the minister, in connection with the profitability of certain Canadian oil companies, whether the effect of these taxes had so hurt their cash flow as to make them incapable of performing in the marketplace. We know from the newspapers that the cabinet or the minister is inquiring into Dome Petroleum. Could the minister advise us on how the impact of the PGRT, the incremental oil tax and the other taxes in the bill have affected the cash flow of Dome Petroleum, so that the government may well have to advance to the company as much as $1 billion? Could he perhaps explain that to the House?

May 26, 1982
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Pierre Bussières: Mr. Chairman, my answer to the hon. member is the same I gave his colleague a while ago. The hon. member is referring to an individual oil company and asks: Since apparently this company is experiencing difficulties, what proportion of these difficulties is ascribable to our tax system? Well, let me tell the member that there is no way we could determine such a proportion, and he is only taking a simplistic approach or trying to distort reality if he seeks a direct cause-effect relationship in a situation which results from a fairly large number of factors and tries to limit them to only one single factor. And 1 add that his question, as asked, is a distortion of facts.


Donald Alex Blenkarn: Mr. Chairman, the minister knows about the problem with Dome Petroleum. I presume the matter has been discussed in cabinet. If not, then all the speculation on the street with respect to government support to that company is just pure drivel. Perhaps the minister could advise us whether that company has been studied in cabinet. Could he tell us the tax effect of the PGRT on the cash flow of Dome Petroleum? If it were not for this horrendous tax on this primary producer, the primary producer would have the cash flow to make its payments, would not be defaulting and would not have a problem.


Pierre Bussières: Mr. Speaker, the hon. member can speculate if he so wishes and try to establish a cause and effect relationship between the situation of a specific company and the taxation system. I would simply point out that he is trying to look into a crystal ball and that I do not want to become involved in such speculations or such a completely useless exercise.


Donald Alex Blenkarn: Mr. Chairman, if the minister will not tell us about the Dome situation, whether he will tax the industry with a PGRT and what hand-out payments or whatever he will make to oil companies to bail them out, then perhaps he could tell us something about the incremental oil tax and how he proposes to deal with that tax in view of the fact that the province of Alberta has rolled back its royalties and that the effects of the incremental oil tax will increase federal government revenues. This is not because there is more profit or any increase in price, but because the provincial royalty has been rolled back to assist the industry. Will the government give the industry credit for that rollback, or will it try to grab a hunk of the rollback in further taxes to the federal government?


Pierre Bussières: Mr. Chairman, as I recall, when the agreement was negotiated with Alberta, the Alberta government had accepted the formula. I am told that representations have been made to the Minister of Finance on behalf of Alberta concerning this particular problem and that the request of the
Alberta government is now being considered by the Minister of Finance.


Donald Alex Blenkarn: Well, that is not really a satisfactory answer. We have the bill before us. Is the minister proposing to introduce later an amendment to the bill to reduce the incremental oil tax or oil charge so that the tax will not be increased or the government's revenue will not be increased just because the province of Alberta reduced its royalties on a short-term basis in order to help the industry?
The minister knows from the representations which the government has received from the province of Alberta that the industry is in trouble and that it is being overtaxed. This is why Alberta cut back its taxes, despite what the agreement in September indicated. Why would the minister take advantage of that reduction in tax in order to increase federal taxes, and where are the amendments to cover that situation?


Pierre Bussières: Mr. Chairman, as I have just told the hon. member, this matter has been referred to the Minister of Finance on behalf of the Alberta government, and I do not intend to table any amendment concerning this specific issue today. As I have already stated, the Minister of Finance is now considering the request made by the Alberta government.


Donald Alex Blenkarn: Mr. Chairman, if the minister will not take into account the difficulty in the industry, the particular help which the province of Alberta has given the industry, or the fact that the province of Alberta recognizes that the agreement in September was based on false precepts, will the minister withdraw the bill now or delay it today so that he can look again at the situation? Clearly the bill was drafted and these taxes were calculated on the basis of some kind of huge increase in oil prices behind the contemplation in the Alberta agreement. The facts are that oil prices are going down and world energy prices are going down and that companies producing energy are having a hard time because their prices are going down, their taxes are going up and their costs of production, by the very nature of inflation, are going up. Obviously they are having a hard time, and the minister knows this; he and his colleagues are dealing with the problems of Dome Petroleum right now. Will he withdraw the bill and renegotiate the agreement with Alberta to make some sense out of it? The taxes set out here are too high for the industry to bear.


Pierre Bussières: Mr. Chairman, it is quite obvious that, for the moment, there is no question of withdrawing the bill at this stage of the proceedings. The hon. member says that it is the whole energy agreement that should be revised. I would simply note that when specific issues are raised, such as that which he has mentioned, they are taken into consideration. However, there is no need to delay the passing of a piece of legislation
May 26, 1982

until a decision has been made or even to withdraw a bill. The hon. member is familiar enough with the practice of the House to know that the government can introduce another bill at any time to make changes and that this does not prevent Parliament from working. 1 therefore suggest in all humility that we should go on considering this bill and that if the Minister of Finance were to arrive at certain conclusions as a result of his discussions with the province of Alberta, he could always say so in the House and ask us to examine any new proposals. However, this does not prevent any progress being made with respect to a piece of legislation, especially as concerns this bill.


Donald Alex Blenkarn: I know that the person piloting this bill is the Minister of State for Finance. Presumably he is piloting the bill as an associate of the Minister of Finance and presumably is able, with a bill of this nature, to commit the government. To suggest that the Minister of Finance is the only person who can commit the government with respect to this tax matter seems rather strange to me. Surely in the Committee of the Whole we should have a minister who can commit the government. That is the purpose of having bills put before the committee. If we have a situation where we have a minister before the committee who is not able to commit the government, then the whole process is called into question.
There are many definitions in this bill, such as definitions of old oil and new oil. These definitions are left to ministerial discretion. 1 would like to ask the minister what expertise he has in his department or that the Minister of Energy, Mines and Resources has in his department which can really define and determine what field is old oil and what field is new oil and when new oil becomes old oil.


Pierre Bussières: Mr. Chairman, on the first point which has to do with his preliminary remarks, I would like to say to the hon. member that we are dealing with the bill. It is quite proper, of course, for members to point out some of the difficulties which they are uncovering in the bill. They can also indicate the concerns of that industry or other groups, but the hon. member should not suggest that any issue or problem should be solved right now. 1 think he understands well enough how this House operates to know that an issue can be under consideration, that some decisions could be taken subsequently and that Parliament could be called to reconsider the existing legislation. We never pretend when we consider a bill that it will ever solve all problems once and for all.
The member refers to the definitions of oil as it appears in the bill. Surely he has noted in the bill that there are specific definitions for old oil and for new oil. 1 could also refer him to the agreement signed between the governments of Canada and Alberta also specifically defining the various kinds of oil which enabled us to set up a blended price for Canadian oil. In the same legislation and in the agreement concluded by the
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governments of Canada and Alberta, there were provisions defining the various kinds of oil.


Donald Alex Blenkarn: Earlier the hon. member for Vancouver-Kingsway asked the government why it had not studied different forms of taxation like a windfall profits tax and the concept of an energy bank. The minister will know, of course, that the reason the government did not look at that is that it was in the Crosbie budget and was part of the program of the Progressive Conservative Party when it was in government. It did not want to bother looking at that aspect. I thought we should let the House appreciate that matter.
What provision is the government prepared to make to alleviate the cost of these taxes to people who are forced to heat their homes with oil? There are different classes of users of petroleum products. A number of people in my constituency cannot hook up to natural gas because it is not available to them in their particular parts of Mississauga. On the other hand, the price of oil keeps rising. While those who are able to use natural gas can perhaps take advantage of a slightly lower price for natural gas, people who are heating their homes with oil are faced with the enormous taxes provided for in this bill, not only royalties but the PGRT and all sorts of other taxes. Those taxes are rather significant. Would the government do something to alleviate the cost of home heating oil to some extent?


Pierre Bussières: Mr. Chairman, in a previous answer, I referred to some of the provisions that exist in the Income Tax Act as well as to certain indexation mechanisms that allow us to compensate for the increase in the cost of living, the cost of living index includes a component which refers to energy cost increases. I would have a few comments to add to what I said earlier. For instance, I would like to remind the hon. member that the Department of Energy, Mines and Resources administers a very generous program to help consumers insulate their homes.
By promoting better home insulation, this program allows home owners to substantially reduce their heating costs and save money. I would also like to remind the hon. member that the Department of Energy, Mines and Resources has a program which encourages homeowners who use oil to heat their homes to convert to other forms of energy, and this also produces savings. Let us take for instance the case of the homeowner who replaces his oil-heating system with a gas system. Since gas prices will be as much as 60 per cent lower than oil prices, the oil substitution program will allow him to reduce his heating costs.
These are two programs which can help reduce heating costs brought about by the increase in energy prices. All this, Mr. Chairman, is in addition to the indexation mechanisms that apply to basic income tax deductions, taxation tables, family

May 26, 1982
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allowances, old age security pensions and guaranteed income supplement and help those who need it the most to assume the burden of cost of living increases which, as 1 noted earlier, also include energy price increases.


Denis Éthier: I recognize the hon. member for Sarnia-Lambton.


Some hon. Members:: Hear, hear!


Mr. Cullen:: Thank you, Mr. Chairman.


Denis Éthier: Order, please. It may be that the hon. member for Mississauga South wants to seek unanimous consent to make a last comment.


Mr. Blais:: No.


Denis Éthier: But other than that, the time allotted to him has expired. Perhaps I should explain that in Committee of the Whole, the time allotted to individual members takes into account the time used by the minister in replying.


Jean-Jacques Blais: Agreed.


Denis Éthier: The Chair will recognize the hon. member for Sarnia-Lambton.


Some hon. Members:: Hear, hear!


Jack Sydney George (Bud) Cullen: I thank the hon. member for Mississauga South for being so reasonable in his understanding of the time available. 1 make no comment on the fact that he is leaving because many of us must attend committees. 1 have just come from a committee myself.
Needless to say, as an individual who represents an area which has been called, at least in our part of the country, the centre of the petro-chemical industry, I have a very vital interest in the National Energy Program and, more particularly, in the negotiations which were carried on, happily and satisfactorily to the benefit, or at least to the mutual credit, I would say, of the three producing provinces and the federal government.
I read the speech of the hon. member for Calgary Centre with some interest and it made me realize why we sometimes have difficulty getting our messages across in western Canada, because without any Liberal members in the province of Alberta, all we hear, of course, is one side, or all that the people of Alberta are hearing-


Thomas Edward Siddon: Why can't you elect any?


Jack Sydney George (Bud) Cullen: -is one side of the energy issue, as though the federal government were doing something unique in endeavouring to secure some revenue from the production of oil in the province of Alberta. An hon. member across says to get out and tell them. 1 certainly do tell them, at every opportunity.


Thomas Edward Siddon: How do they receive you?


Jack Sydney George (Bud) Cullen: They receive me very well because they are quite often surprised to hear that there is another side to the issue and that countries with oil production feel it is appropriate to receive revenue when they sometimes give depletion allowances and, in other cases, capital cost allowances. They are all significant areas of federal tax concessions which made it possible to discover this oil in the first place. Legislation was passed which stated that we would pay more than the world price for oil so that the oil industry could be developed. I think that that was an appropriate and co-operative effort, and the people of eastern Canada were prepared to go along with that.
When one speaks in a reasonable and rational way with the people of western Canada, they are prepared to appreciate that the federal government, given its myriad responsibilities and the concessions of the Canadian taxpayers right across Canada, is certainly entitled to some revenue from oil production. The hon. member for Calgary Centre has a rather selective memory of the history or sees fit to ignore it, because Premier Lougheed proceeded in the past in a way which was not as democratic as we had a right to expect.
I remember, and it was not that long ago, that we had a one eighth royalty for oil which was allowed by the federal government as an expense of doing business, finding the oil, producing the oil and marketing the oil. Overnight, the government of Alberta made a decision to move from that one eighth royalty to a 45 per cent per barrel share of the benefits from the production of oil. At that time it was not the federal government which took the initiative in condemning this particular move; rather, it was the multinational corporations. 1 well remember the president of Imperial Oil, and I believe he was the chief executive officer, Mr. Twaits, who said that Premier Lougheed had thrown away the rule book. There was certainly no consultation or discussion with the federal government. As I understand it, there was not even any discussion with his provincial counterparts. Simply on his own initiative, unilaterally, that whole system of one eighth royalty for oil moved up to 45 per cent overnight. What a bonanza there was when the OPEC countries said, "No, we will not allow oil to be priced at $3 or $3.50; we will quadruple the price of oil overnight." There was Premier Lougheed with his 45 per cent share, finding that he could not spend all that money. Hence the birth of the Heritage Fund.
I do not begrudge Alberta's Heritage Fund. I do not begrudge the people deriving a significant benefit from a natural resource which is in their particular province. The Constitution was amended because the federal government formerly had title to the natural resources in the provinces. In the interests of giving the provinces some economic benefit, it was amended so that they could have ownership of these natural resources. Surely, in the long run, Canadian federal
May 26, 1982

taxpayers right across Canada, in every province and in the territories, who are picking up the tab for part of the development of the oil industry in Canada, have a right to share in the benefits accruing from oil production in Canada.
There have been suggestions that there has been a rape of the resources, that we are trying to take more than we should be taking, or that it is inappropriate action by the federal government. It is inconceivable to me that anyone could actually say it is inappropriate for the federal government to contemplate a tax on the production of oil and gas or their products. Surely, the Canadian public has a right to expect more than that.
I hear gratuitous insults from the hon. member for Calgary Centre concerning the civil servants who work on these particular projects. The initiative and the idea for this has come as a Liberal policy. It was discussed during the election campaign, we brought it to fruition, and we said that we would negotiate with the producing provinces to see if we could come up with some regime which would provide the federal government-the federal taxpayer, in effect-the provinces and the corporations with sufficient funds so that the oil industry could be developed. We said that the province which owned the natural resource should derive significant benefit, but that the federal government was also surely entitled to some revenue.
There were long and skilful negotiations. I believe the minister used the word "skilful" when making his remarks on second reading. 1 believe the Minister of State for Finance was bang on when he indicated that appropriate, but skilful negotiations had taken place. It should be understood that it was not the federal government which acted unilaterally to impose a tax on a natural resource which was the property of a province. 1 repeat that it was not the federal government. This tax came about as a result of negotiations and not because the federal government imposed its will on the provinces.
There were other areas in which we thought we were entitled to some more revenue from taxes on gas and there were concessions. The federal government did not get everything it was looking for in the negotiations but, most assuredly, neither did the provinces. 1 think there is room for all to benefit. The oil companies, the provinces which own the resources and the federal government can benefit.
We have come up with an appropriate agreement for the benefit of all. Nobody will lose as a result of this particular negotiation. Again, it was not a negotiation with only one of the producing provinces; in effect, we reached an agreement with Alberta, Saskatchewan and British Columbia. Therefore, as the minister said earlier, this House has been asked to approve the agreement signed by the Government of Canada and those producing provinces. This agreement has already been reached and we are simply being asked to endorse an agreement by the people most directly involved in the benefits accruing from oil production in Canada.
In another area, 1 am hearing the suggestion that "Canadi-anization" means "nationalization". Maybe this suggestion is deliberate and maybe it is not. We all know of this, we must
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consider it and I think we must be careful. 1 would say to the official opposition, stop trying to fool the Canadian public. Stop calling it nationalization. The Conservatives know what nationalization is. They know-


Arthur Ronald Huntington: It is nationalization. Bud. Be honest.


Jack Sydney George (Bud) Cullen: -what Canadianization is, and there is a significant difference. "Canadianization" means something which will be beneficial to Canadians, not just Canadians in the producing provinces, but Canadians right across the country, all of whom have made tax concessions so that we could, in fact, have an oil industry in Canada.


Arthur Ronald Huntington: That's state ownership, Bud. You know it.


Jack Sydney George (Bud) Cullen: Now we hear another hon. member from the opposition yelling. Unfortunately, he is not yelling into a microphone; I can only hear the noise. 1 cannot hear his words, so it is very difficult to respond.
I am simply saying, Mr. Chairman, that it is inappropriate, either in hyperbole or in deliberately making these comments, to suggest that Canadianization is nationalization. I would not be in favour of that. I doubt that there are many Liberals who would be in favour of nationalizing the industry, although 1 know the little blue rump over there does not feel that way.
[DOT] (noo)
We should be very careful not to underestimate the Canadian public, particularly in the province of Alberta. They recognize what Canadianization means. They realize it is not nationalization. The people know the benefits that will accrue to Canada, not to other countries, as a result of multinational involvement.
Another area that should be highlighted is conservation of oil, our depleting natural resource. We have to find other areas where oil can be produced. One does not have to be a genius, which seems to be the suggestion of the hon. member for Mississauga South, to determine the difference between new oil and old oil. It may become complex and there may be some areas where it is necessary to have an honest debate and where a judgment call will be made. It will not be made in a unilateral fashion but as a result of discussion with the industry, the producing provinces and the federal government.
With regard to the Constitution, the criticism we are now getting is for all of those things that we took out of the Constitution as a result of negotiating a settlement. All the criticism I have heard about the content of the Constitution has been about those things we have taken out of it. That is because we could not get agreement with the opposition or the provinces.


Gordon Edward Taylor: You took out property rights.


Jack Sydney George (Bud) Cullen: I wondered how long it would take my hon. friend to start interrupting. I do not want to get into another debate on the Constitution, but it was a criticism from a member opposite. The record should be clear that the provinces were not very keen about property rights. They said that property and civil rights were their jurisdiction.

May 26, 1982
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Gordon Edward Taylor: The Liberals and the NDP took them out.


Jack Sydney George (Bud) Cullen: It is a great Constitution. It can be improved upon. Now that members of the opposition have taken the Constitution to their heart, as they took the flag to their heart, they will now work hard to improve upon it. I am sure we will get that kind of contribution.
I want to talk about the area of conservation. Canadians can play a role in this area. They are being encouraged to do so by this kind of legislation and other agreements under the National Energy Program which were criticized out of hand by the hon. member for Calgary Centre. There were gratuitous insults to civil servants which were unfair. He suggested there was something wrong with the federal government moving in this way. He says there is something wrong with the government, which says we have scads of gas, certainly a lot more gas than oil, so let us put some incentives in place so that people will switch from oil to gas. I am sorry the hon. member for Mississauga South in all of his constituency does not have the opportunity to take advantage of clean-burning, non-smelling, safe gas. He should be encouraging the province of which he is a member and the companies to get into that area and distribute this natural gas.
There is not much more I want to say at this time about the bill because the minister spelled it out so beautifully at the second reading stage. However, I did want to set the record straight with regard to the suggestions made by the hon. member for Calgary Centre. I have had the opportunity of working with the civil servants he has gratuitously insulted by calling them eager beavers and other names not nearly so complimentary. It is my experience that the Canadian government and the Canadian people are well served by their civil servants. If we could bring their spirit of dedication to all people across this country, this would be a much better country than it is at the present time.
Attacking a piece of legislation is one thing. Attacking civil servants who are giving effect to policies, not policies which come from civil servants but from this government and this party, implementing them and showing how they can be carried out effectively, is wrong. They deserve praise, not criticism from members opposite.
If I might repeat myself, this bill is an agreement between the federal government and three producing provinces. It provides adequate compensation to the oil companies. We are only being asked to endorse it because there has been agreement by all three parties involved in the production of oil. This bill should receive quick and speedy passage.


Thomas Edward Siddon: Mr. Chairman, earlier in his remarks, the hon. member for Sarnia was singing the praises of the Canadianiza-tion initiatives which he is somewhat sensitive to when they are called nationalization initiatives. He will appreciate that if we lived in a country which produced more than it consumed and invested more than it squandered, private individuals might be able to afford to invest in the patriation of our oil and gas industry. However, when we have to go outside Canada, as Petro-Canada has, to borrow large blocks of money at guaranteed rates of return to foreign lenders, that in no way helps to
Canadianize our oil and gas industry. It merely furthers our ludicrous rush toward national bankruptcy of which there are evident signs throughout this country today.
The hon. member knows that this is a mockery. The government is using sleight-of-hand to suggest that its initiatives are designed to Canadianize the oil and gas industry, at a time when people cannot afford to borrow the money required to maintain the loans against their farms or businesses or to renew their mortgages. He knows that this so-called Canadian-ization program is merely another government power grab designed to make Canadians more and more dependent on the state and to destroy their individual rights and freedoms to invest and save as they wish.
I want to deal with Bill C-112 from the point of view of the impact of the regressive tax measures included in it, particularly the natural gas and gas liquids tax, upon consumers, especially those in western Canada.
I take hon. members back to the fall of 1980 when the residents of British Columbia en masse, to the tune of some
30,000,	petitioned this House through petitions filed by various members of Parliament from British Columbia, expressing their absolute rejection of any attempt by the Government of Canada to impose a federal excise tax on natural gas. The petition expressed their "absolute rejection of any attempt to impose a federal excise tax against the export of natural gas and hydroelectric power from British Columbia." It further states that "such action would constitute a disguised form of supplementary income tax against every resident of British Columbia" and finally stated "We will not accept it."
The government and the Minister of Finance must have been pretty concerned about those 30,000 signatures. The Minister of Finance presented a budget on October 28 in which he said that, as a consequence of the representation from the western provinces, the government had decided not to impose an excise tax on natural gas. The way in which the paragraphs were structured was very clever. I quote from page 8 of that budget speech:
In these circumstances and after careful consideration, the Minister of Energy, Mines and Resources and I have concluded that it would be desirable to abandon our preferred plan-
That being an export tax.
-and seek an alternative approach which we hope will meet the concerns of the producing provinces.
He then went off on a tangent without telling the audience in this House of Commons what that approach was. In the next paragraph he stated:
This alternative approach involves the imposition of a new uniform federal tax on all natural gas.
Subsequent to that budget speech, the level of taxation has been increased further through the provision of these amendments we are now dealing with. A very neat agreement was achieved between the province of British Columbia and the federal government which essentially renounces the concept of an export tax by a bit of sleight-of-hand. It says that we set the tax rate to zero, but maintain the domestic natural gas tax,
May 26, 1982

which adversely affects every resident of western Canada, and increasingly Ontario and Quebec, who must consume natural gas or would prefer to consume natural gas as an alternative to oil.
This tax against consumers, Mr. Chairman, is in no way compensated for by the indexation of pension benefits and the guaranteed income supplement increases that the Minister of State for Finance referred to earlier. In fact, this is a quantum jump in the tax bills of the residents of western Canada and also of the residents of central Canada.
1 asked the Minister of Finance on October 31, 1980, in this House whether he did not feel that this tax was discriminatory in any way because of the way it impacted the residents of certain provinces. The Minister of Finance responded as follows:
-the increased tax is in lieu of an increase in price which is not to take place and that the increases in gas prices that will take place over the next several years will be lower than those projected in the December budget.
I would like the Minister of State for Finance to clarify that. Does he not agree that this natural gas tax is discriminatory against people who have had to convert and have found it very convenient to convert to natural gas? Does he not agree that it provides a disincentive for conversion to tax all of the ratepayers and taxpayers of Canada, including the old age pensioners, the widows and the disabled, at amounts which in the first year approached $100 for one heating season and which now amount to an increase of something of the order of $300 or $400 a season? Is this not discriminatory against home owners who must use natural gas? Is this not inflationary? And how does he justify this substantial increase in home-heating costs, given that the Minister of Finance said that this tax is in lieu of an increase in price?


Pierre Bussières: Mr. Chairman, I do not believe the natural gas tax is discriminatory. In order to dispel the notion that it is, one must realize that the tax applies to natural gas right across Canada. It does not apply to one area only, but throughout Canada, so that natural gas users pay the tax no matter where they are located geographically. I should also like to point out to the hon. member that the tax has a redeeming feature in that, because of the price scales, natural gas will always cost 65 per cent less than oil, and therefore will always carry a lower price, so that in fact it will still be preferable to use it as a source of energy, for instance, to heat one's home, precisely because of that difference in price. Those then are two aspects one must keep in mind in attempting to prove that the natural gas tax is discriminatory, or that it might discourage its use as a source of energy.


Thomas Edward Siddon: Mr. Chairman, if we look at the amount of revenue from new energy taxes that is set out in the 1980 budget of October 28 and in the 1981 budget of November 12, we see that there is some $ 15 billion projected to the end of the
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1983-84 fiscal year. In the 1980 budget $6.6 billion is predicted to come from the natural gas and gas liquids tax, and some $5.1 billion due to the 8 per cent PGRT in the 1980 budget. In addition, some $2.6 billion more is projected in 1981 in supplementary energy taxes, which are spelled out in the Minister of Finance's budget of November 12, 1981. As well we have the Canadian ownership charge, the special levy, the PGRT increase to 12 per cent, effective with this legislation, and the IORT. All of these amount to some $15 billion of revenue, which will be extracted from the residents of western Canada principally over the next two or three years, until the end of the 1983-84 fiscal year.
1 have to ask the minister again, is that not discriminatory? What is the return for the residents of western Canada? How does he answer to the individual residents who must heat their homes with natural gas, or who live in apartments, as in the case of some senior citizens in my riding who got a supplementary bill in December, 1980, because of this discriminatory natural gas tax, leading to a monthly bill increase of some 30 per cent?
How does he answer to correspondence of the following type, of which I have received many letters. I am reading from a letter to the Hon. Minister of Energy, Mines and Resources dated April 2, 1982. It says:
Dear Sir:
The recent increases in residential natural gas prices are a real concern to me. I am on a monthly instalment plan with B.C. Hydro and have just received my statement of account. Although my consumption is slightly down, my monthly payments have increased from $79 to $106 per month. This is a 34 per cent increase. Obviously, I have asked some questions.
He goes on to point out that the cost to the consumer in British Columbia of residential natural gas has risen from $1.90 per thousand cubic feet in November, 1980 to $3.70 per thousand cubic feet at the present time. That is almost a doubling of his natural gas cost. Where is the equity in that? He states:
This increase is imposed 85 cents by federal and 77 cents provincial and 30 cents by B.C. Hydro. That represents an 80 per cent increase in government taxes in 16 months.
Those figures are per thousand cubic feet. The federal tax is a major element in that. I must say that the provincial government of British Columbia has been "complicit" in this perpetration on the residents of British Columbia. In their selfrighteousness they too said: "We do not want an export tax on natural gas." But they were quite pleased to conspire with the Minister of Energy, Mines and Resources and stick it to the domestic consumers, to the extent of these massive tax increases, amounting in total to 80 per cent, on natural gas in 16 months.
My question goes as follows, in the words of my constituent:
Your government is calling on Canadians for restraint. That makes sense and many companies and citizens are doing just that.
But my constituent continues:
My salary increase this January was 10 per cent. In the light of these facts, how can you conscientiously make such gas increases? Furthermore, how can you expect home owners to pay such increases?
I have two questions:

May 26, 1982
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1. Why was such a large increase necessary, and how can it be justified?
2.1 understand 15 cents is designated to pay for PetroCan. Please advise the
advantages to me as a taxpayer in buying PetroCan.
He concludes:
1 would appreciate simple clear answers, not the typical political jargon which is so often offered by politicians.
Mr. Chairman, I ask the Minister of State for Finance to answer those questions for my constituent. How can he sit there and say that the natural gas taxes, the PGRT and other energy taxes, are not discriminatory, faced with evidence of that nature?
[ Translation]


Pierre Bussières: Mr. Chairman, in his remarks the hon. member denounced the conspiracy between the government of his province and the government of Canada in the establishment of a taxation system. 1 think that he is using an overly strong word. All hon. members, including him, have certainly wished at a certain point in time-in any case, 1 do recall that before we reached the first agreement with the province of Alberta 1 heard members of his party express the fervent hope that the government of Canada would conclude an agreement with the producing provinces along the lines of a sharing formula with respect to profits from the development of natural resources, particularly gas and oil. In his remarks the hon. member indicated that a petition tabled in the House had been signed by several thousands of residents of his province urging that exports of natural gas not be taxable. That issue was indeed a major factor in the negotiations.
And as the hon. member mentioned, the government-this is confirmed in the bill under consideration-has reduced to zero, in other words has cancelled the tax on exports of natural gas. However, it did reach agreement with the producing provinces on another type of system. Out of the total $1.80 increase per cubic metre to which the hon. member referred, the tax on gas, which is the federal government revenue, amounts to 45 cents, and 15 cents are levied for the Canadian ownership program. In other words, the federal government is not the only one that gets money through taxation.
Within the over-all scope of those agreements, one must keep the objectives in mind. First, we must come up with an appropriate system satisfactory to the parties, namely the provinces and the central government whose responsibility is to maintain the great national objectives in the field of energy as well as in others. Those national objectives, which hon. members know as well as I do, consist in achieving self-sufficiency as early as possible and a degree of Canadian ownership in the gas and oil development and exploration sector. Naturally it will cost money to reach those great objectives and all Canadians are expected to pay part of those costs. As I said earlier, the tax does not apply in only one region, it will be levied in all regions of the country and, the tax notwithstanding, the use of natural gas still remains an advantage over other energy sources. I also pointed out that the government has established certain programs aimed at encouraging people to rely on a
different source of energy, oil or natural gas for instance, and despite the tax system Canadians fully understand and realize that it is indeed an advantage to use natural gas to heat their homes.


Thomas Edward Siddon: Mr. Chairman, the Minister of State for Finance knows it is the height of hypocrisy, a ridiculously phony argument and virtually dishonest, to say that if some 30,000 residents of British Columbia were vigorously opposed to an export tax, they would somehow accept a domestic tax on natural gas. That is just the phoniest excuse which could ever be offered by the Minister of State for Finance or anyone else on the government side to justify a general tax on natural gas. It is utterly ridiculous and it is insulting to the people of British Columbia to suggest that, because they oppose an export tax, somehow they would be more favourably inclined to accept a domestic tax which would hit every one of them in the pocket book.
I have just one final short question. When is the Minister of State for Finance going to tell us-and can he tell us right now-how much spending has been undertaken in the name of that elusive western development fund which was promised in the budget of October 28, 1980? Two billion dollars were earmarked to be spent by the end of 1983, with a total commitment of $4 billion. How much money is in that fund at present, how much has been expended and are the revenue flows coming up to the levels predicted in the budget of 1980? How much is there, and how much has been spent? I think the people of this House and the people of western Canada would certainly be interested in knowing that, considering that all of these energy taxes are collected by ripping off western Canadian residents to the extent of $ 15 billion.


Leslie Gordon Benjamin: They also promised that fund in 1972, in 1974 and in 1979.


Pierre Bussières: Mr. Chairman, I did not mean to say that because the citizens in British Columbia or other producing provinces did not want an export tax, a tax was forced on them. This is not at all what I said.
What I said is there were representations made, as the hon. member indicated, there were negotiations involving producing provinces and the Canadian government, during which we attempted to reach a harmonious agreement for the sharing of resource exploration and production revenues between the various levels of government and the industry. In that context,
I would suggest to the hon. member that the Canadian government's share of the oil and gas revenues, under the agreement between the Canadian government and the province of British Columbia, is $3.2 billion; the British Columbia government's share is $4.6 billion, so it is higher than the Canadian government's share, and the industry's share is $4.5 billion. In other
May 26, 1982

terms, the Canadian government is getting the least from the total tax base.
The hon. member is asking: How much of that money comes back to western Canada, British Columbia and the other provinces? Unfortunately 1 cannot give fhim those figures which pertain to the western fund. However, I would like to tell him that the Minister of Transport already had an opportunity to announce substantial expenditures for the improvement of transport infrastructures in western Canada, and this is part of the moneys the federal government will collect and reinject in that area.
However, the hon. member will certainly agree that within a federal system, under the principles of federalism, we cannot- and 1 am sure this is not what he is trying to do-balance everything we get and we give in double-entry form. I think the hon. member subscribes to the principles of our Canadian federalism, that wealth should be shared across the land, with have-not regions benefiting from the wealth of richer provinces, through major redistribution programs administered by the Canadian government.
I am also convinced that his objectives are also shared by Canadians in British Columbia.


Mr. Hargrave:: Mr. Chairman, I have a series of five questions I hope to put to the Minister of State for Finance, but before 1 do that I want to say to the House that this has been a very frustrating and trying afternoon. 1 have very high respect for the Minister of State for Finance. 1 worked with him on the Standing Committee on Finance, Trade and Economic Affairs when we were revising the Bank Act and when I was involved in agricultural matters, but we are dealing with the wrong minister here today. Even though the bill is in the name of the Minister of State for Finance, these are energy matters.
When my colleague, the hon. member for Calgary South, was opening the discussion this afternoon, the Minister of Energy, Mines and Resources did come in, but he did not sit in his own seat; he sat behind it for ten or 15 minutes and visited. I think the least we could expect is that the Minister of Energy, Mines and Resources would be here to listen. He also should be able to respond. This is a very frustrating afternoon because our concerns about these three natural gas taxes are not being satisfied.
These taxes really concern me. Natural gas is part of my heritage. It is part of the heritage of the city of Medicine Hat. It all began over 100 years ago.
My first question deals with a situation in the city of Medicine Hat. As a result of these taxes the people of Medicine Hat have already paid over $15 million, but they have done so under protest. They have already paid, so they have done nothing illegal, but they have paid under protest. They have initiated court action on which, for obvious reasons, I will not expand now. But some of the citizens of Medicine Hat are
Taxation
refusing to pay that portion of their utility bills which is due to these natural gas taxes.
On April 19, 1982,1 submitted a petition in this House with the names of 12,689 very upset people on it. I have never seen my constituents so concerned about a punitive and discriminatory tax in the nearly ten years I have been here. My first question to the Minister of State is whether he is even aware of this petition and what is behind it. Would he comment on that, please?
[ Translation]


Pierre Bussières: Mr. Chairman, 1 remember quite well that the hon. member has already drawn the attention of the House to the special case of the city of Medicine Hat and to the natural gas tax which affects the citizens of that city. His colleague from Esquimalt-Saanich tells me that my preamble is phrased in some kind of vernacular. As the hon. member pointed out, we worked together on various other bills and I will add that 1 am not trying to hide behind some vernacular. The problem faced by his city has already been drawn to my attention and I do sympathize with what he said. However, I understand that court action has been initiated. I think that the hon. member himself has been very cautious in his comments and it would be rather inappropriate for me to be more specific with regard to that particular case considering that it is already before the courts.


Herbert Thomas (Bert) Hargrave: Mr. Chairman, it is not so much the case involving the city which may affect us, it is the case involving the government of Alberta which has been upheld in that government's favour by a five to one decision so far. However, that is another matter.
My second point deals with the greenhouse industry. It is a huge industry in Alberta, the fourth largest in Canada, and the heart of it lies in southern Alberta. The implications of these taxes for the greenhouse industry are such that in one year the cost of heating fuel has increased six times.
This is a 100-year-old industry which was started there because we did have at one time cheap natural gas. The percentage increases in the cost of natural gas in that industry are the highest in Canada. As an example, Redcliff Greenhouses, a firm just five miles west of Medicine Hat, paid $9,130 for natural gas in 1979, just 1.3 per cent of their gross costs. In 1981 it had increased to $40,000, or 4.5 per cent, and it is estimated at $83,800 for this year, or 9.9 per cent of gross costs.
That industry is facing the real possibility of not being able to function at all next winter. If you multiply that one example by the hundreds there are throughout Alberta, you will appreciate how serious this situation is to that industry.
My second question to the minister is whether he has any feeling for what it does to an industry which was once one of the largest employers in my city of Medicine Hat.

May 26, 1982
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Pierre Bussières: Mr. Chairman, I know that the Minister of Agriculture has already raised with the Minister of Finance the concern stated by the hon. member. It is a special matter that will have to be considered. The problem could be solved either through the tax system or through the Department of Agriculture. However, the matter will have to be looked at very closely if we are to establish whether that sector is more penalized than others and to what extent a special compensation should be provided. I can assure the hon. member that his representations and those made by the Department of Agriculture will be carefully considered by the Minister of Finance.


Herbert Thomas (Bert) Hargrave: Mr. Chairman, my third question is more general and relates to the cost of raising food. In Alberta there are 85,000 farmers, 80 per cent of whom now have natural gas as the result of a huge rural gasification program which was really quite an achievement on behalf of Alberta farmers. Those farmers are now, of course, subject to these natural gas taxes and they have had a significant impact on their cost of production. It is not only the cost of heating their farm homes, barns and that sort of thing, but more importantly it is what these taxes have done to the cost of commercial fertilizer. I am sure the minister is aware of that, and if he multiplies that situation by the thousands who use commercial fertilizers he will get an idea of what the added costs have been. More specifically, in southern Alberta natural gas has now become the most expensive form of energy for operating sprinkler irrigation systems, especially the automated pivots which will sprinkle an entire quarter section. All of this adds significantly to the cost of producing food.
I would like to ask the minister if he appreciates the reality of this situation and if there is any indication at all that the government will recognize in this bill, by way of amendment or otherwise, the high cost of natural gas used in the production of food.


Pierre Bussières: Mr. Chairman, the increase in energy costs as a factor in the cost of production of farm products and foodstuffs is consistent with the general increase in energy costs and thus contributes to the increase of that part of the food basket that is affected by this factor. Should a special tax system apply to regulate these cost factors when they increase because of a rise in energy costs? I suggest that if we replied affirmatively and provided the necessary amendments and adjustments in the taxation area for the production of energy and food, we would have to use the same mechanism to deal with other sectors also using natural gas and which could be affected. I am not saying that the problem does not exist, for it does exist. I am just saying that if we make adjustments in this sector, for that part of energy costs which is a factor in the production of food, we will have to make adjustments also for this factor in other areas of production, which would result in a
very complex tax system that would be very difficult to administer. However, the problem which the hon. member described does exist.
Mr. Chairman, while I am on my feet, I should like to remind the House that as a result of the discussion I had with the hon. member for Calgary Centre, it had been agreed that-


Arthur Ronald Huntington: They don't want it from the west, they want it from the south.


Pierre Bussières: I had the discussion with the hon. member for Calgary Centre regarding the amendment to Clause 7-

-in view of representations made in this debate on second reading as to the disposition of Clause 8 of the original bill, which has become Clause 7 of this bill, I should like to move an amendment and, instead of having a total maximum tax rate as provided by Clause 7 of the new bill, there would be a period of time equal to the duration of the agreement which we want to approve, there would be a maximum established in respect of each year for the various taxes. So, as this amendment appears in Clause 7, I ask that we deal first with Clauses 1, 2, 3, 4, 5, and 6, and when we reach Clause 7, I could read the amendment which, if I understand correctly, has been accepted by all hon. members.


Denis Éthier: The hon. member for Medicine Hat has a few moments left. I see the hon. member for Calgary South indicating that he wants to speak. He has been kind enough to advise the Chair that he may want to move certain of the clauses.


Herbert Thomas (Bert) Hargrave: Mr. Chairman, I have two very quick questions. They relate to the oil and gas-well servicing industry which is so important to the town of Brooks and also to Medicine Hat in Alberta. That industry has had a terrible time as a result of the National Energy Program and that is well known. Is the government giving any consideration whatever to matching the recent proposal by the Alberta government which recognized what that particular servicing industry is going through? Is the government giving any consideration to that in light of the fact that all of these servicing industries are Canadian owned, small entrepreneurial type businesses and in many cases individually owned?
Is the government also giving any consideration to the situation with respect to the heavy crude, which is all through southwestern Saskatchewan and part also on the Suffield block, where these wells are pretty well all capped because it is uneconomic to produce and there is no upgrading station. Is there anything new on the question of an upgrading station which at one time had been planned in Saskatchewan?
May 26, 1982

[ Translation]


Pierre Bussières: Mr. Chairman, 1 think the Minister of Energy, Mines and Resources would be in a far better position than 1 am to answer the hon. member with regard to the heavy crude upgrading plant. Unfortunately, 1 do not have the information requested and I would suggest that he put his question, which by far extends beyond the scope of this tax, to the Minister of Energy, Mines and Resources.


Herbert Thomas (Bert) Hargrave: Mr. Chairman, how about the natural gas servicing industry?


Pierre Bussières: About the natural gas servicing industry, I must admit to the hon. member that that proposal is not now under consideration.


John William Thomson: Mr. Chairman, as agreed with the Minister of State for Finance, we are prepared to accept Clauses 1 through 6 and 8 through 33 on division. Perhaps the minister would care to make his motion amending Clause 7. The hon. member for Calgary Centre has had to be absent from the House today and is the only one who is aware of the precise details, but I can accept the amendment that has been made in principle. However, I would ask the minister to be good enough to confirm that he has conveyed the precise amounts that are contained in the amendment to the hon. member for Calgary Centre when he moves his motion to amend Clause 7.


Pierre Bussières: Mr. Chairman, I can confirm to the hon. member that I have had the opportunity of giving the hon. member for Calgary Centre a copy of the amendment as worded here. He confirmed to me by telephone last week that he agreed with the terms of the amendment I intend to move. When you so advise me, 1 shall be ready to move it.


Ian Gardiner Waddell: Mr. Chairman, on behalf of the New Democratic Party, 1 am prepared to give our unanimous consent. As 1 understand it, and I want to put this on the record, the original bill had a high ceiling on the taxes that are mentioned in this amendment. It meant the government would not have to come back to Parliament, perhaps never, to get those taxes changed. The opposition did not like that. The opposition wanted the government to be more accountable to Parliament, especially in tax matters. The government said it had to be flexible. The government has made somewhat of a compromise now, and I think we can accept that. The government has said that it will phase in the taxes to give it some room to manoeuvre. It means that if the government wants to bring in a dramatic increase in taxes, it would have to come back to Parliament and we would have some accountability.
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In any event, we welcome the amendment. It would be better if the government withdrew the act, but I am prepared on behalf of the New Democratic Party to give our consent to the amendment.


Denis Éthier: Shall Clauses 1 through 6 inclusive carry?


Some hon. Members:: On division.
Clauses 1 to 6 inclusive agreed to.


Denis Éthier: The Chair will stand Clause 7 for a moment.
Shall Clauses 8 through 15 carry?


Some hon. Members:: On division.
Clauses 8 to 15 inclusive agreed to.


Denis Éthier: Shall Clauses 16 to 33 inclusive carry?


Some hon. Members:: On division.
Clauses 16 to 33 inclusive agreed to.
On Clause 7-


Pierre Bussières: That subclause 7(2) of Bill C-112 be amended by striking out lines 18 to 37 on page 7 and substituting the following:
"(d) prescribing, for the purposes of paragraph 25.13(5)(d), a rate of tax, not exceeding
(i)	one dollar per gigajoule in 1982 and 1983
(ii)	two dollars per gigajoule in 1984, and
(iii)	three dollars per gigajoule in 1985 and thereafter, and the date on which the rate becomes applicable;
(e)	prescribing, for the purposes of subparagraph 25.14(4)(a)(iv), a rate of tax, not exceeding
(i)	nineteen dollars per cubic metre in 1982 and 1983,
(ii)	thirty-eight dollars per cubic metre in 1984, and
(iii)	fifty-six dollars per cubic metre in 1985 and thereafter, and the date on which the rate becomes applicable;
(f)	prescribing, for the purposes of subparagraph 25.14(4)(b)(iv), a rate of tax, not exceeding
(i)	twenty-seven dollars per cubic metre in 1982 and 1983,
(ii)	fifty-three dollars per cubic metre in 1984, and
(iii)	Seventy-nine dollars per cubic metre in 1985 and thereafter, and the date on which the rate becomes applicable; and
(g)	prescribing, for the purposes of subparagraph 25.14(4)(c)(iv), a rate of tax, not exceeding
(i)	twenty-nine dollars per cubic metre in 1982 and 1983,
(ii)	fifty-eight dollars per cubic metre in 1984, and
(iii)	eighty-six dollars per cubic metre in 1985 and thereafter, and the date on which the rate becomes applicable."


Denis Éthier: Is it the pleasure of the House to adopt the motion?


Some hon. Members:: On division.
Amendment (Mr. Bussieres) agreed to.
Clause 7, as amended, agreed to.

May 26, 1982
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Denis Éthier: Shall the title carry?


Some hon. Members:: On division.


[Stage Direction]
Title agreed to.
Denis Éthier: Shall the bill, as amended, carry?


Some hon. Members:: On division.
Bill reported.


The Acting Speaker (Mr. Blaker):: The business of the House as established in the House order to the effect that committee stage of the bill be completed before six o'clock this evening has now been done. Although the House order does not mention the matter of concurrence and a division, 1 presume that is what hon. members would expect the House to proceed with.


Some hon. Members:: Agreed.
[ Translation]


Pierre Bussières: that Bill C-112, to amend the statute law relating to certain taxes, as amended, be concurred in.


The Acting Speaker (Mr. Blaker):: Is the House ready for the question?


Some hon. Members:: Question.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


The Acting Speaker (Mr. Blaker):: All those in favour of the motion will please say yea.


Some hon. Members:: Yea.


The Acting Speaker (Mr. Blaker):: All those opposed will please say nay.


Some hon. Members:: Nay.


The Acting Speaker (Mr. Blaker):: In my opinion the yeas have it.
And more than five members having risen:


The Acting Speaker (Mr. Blaker):: Call in the members.


Madam Speaker:: I declare the amendment carried.


[Stage Direction]
Motion agreed to.
It being after six o'clock, this House stands adjourned until tomorrow at two o'clock in the afternoon, pursuant to Standing Order 2(1).
At 6.18 p.m. the House adjourned, without question put, pursuant to Standing Order.
[Stage Direction]
Thursday, May 27, 1982