1982-04-20

ROUTINE PROCEEDINGS


Mr. Lome Greenaway (Cariboo-Chilcotin):: Madam Speaker, one of the Prime Minister's former finance ministers, Mr. John Turner, was recently quoted as saying that "the Prime Minister, when conflict arose, frequently did not support his minister of finance or president of treasury on expenditure restraint."
In view of the fact that the sixfold increase in government spending since 1968 has been frequently cited as a prime cause of inflation and that the inflation rate has in fact increased from four per cent in 1968, when the Prime Minister took office, to a staggering 12.5 per cent now, 1 move, seconded by the hon. member for Erie (Mr. Fretz):
That the Liberal caucus wrestle the Prime Minister from office rather than subject Canada to his further pathetic economic efforts as well as to his obviously poor choice of Finance Minister.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


MOTION UNDER S.O. 43
Mr. John McDermid (Brampton-Georgetown):: Madam Speaker, the Prime Minister today celebrates his 14th anniversary in office.


Some hon. Members:: Hear, hear!


John Horton McDermid: I notice he is the only one wearing a rose. Normally everyone else over there wears one on such an anniversary. He can celebrate, but the rest of Canada cannot. Since his arrival on the scene we have seen the unemployment rate rise from 4.5 per cent to 9.2 per cent and, if we include the hidden unemployed, that rate is actually 13 per cent. Madam Speaker, the Prime Minister has been quoted as saying that he does not intend to retire while the economy is ailing, and he has said that "it certainly wasn't the government's intention to
create unemployment". If in fact he believes that, "the most dangerous thing for the social fabric of a country is when there are a lot of people out of work", I move, seconded by the hon. member for Simcoe North (Mr. Lewis):
That the Prime Minister rightfully take the credit for our economic situation and unemployment rate and tender his resignation.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.



Mr. Tom McMillan (Hillsborough):: Madam Speaker, when the Prime Minister took office in 1968, the home mortgage rate was a mere 9.1 per cent. After 14 years of economic mismanagement under his leadership, the mortgage rate is now more than twice as high, 18.5 per cent. Last summer the rate skyrocketed to well over 20 per cent, the highest in Canadian economic history. I therefore move, seconded by the hon. member for Peace River (Mr. Cooper):
That this House condemn the Prime Minister for embracing policies that have forced many Canadians either to abandon their homes or their dream of ever owning a home.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


CONGRATULATIONS TO PRIME MINISTER ON FOURTEENTH ANNIVERSARY IN OFFICE-MOTION UNDER S.O. 43
Mr. Thomas H. Lefebvre (Pontiac-Gatineau-Labelle):: Madam Speaker, I rise on a matter of urgent and pressing necessity under the provisions of Standing Order 43. I would like to draw the attention of all members of this House and of all Canadians to the fact that today is the fourteenth anniversary of the swearing-in of the Right Hon. Prime Minister (Mr. Trudeau) as Prime Minister of Canada-

April 20, 1982
5.0.	43

And whereas Canada is particularly fortunate to have enjoyed the leadership-


Some hon. Members:: Hear, hear!


Some hon. Members:: Oh, oh!


Thomas Lefebvre: -abilities of this world statesman, I move, seconded by the hon. member for Welland (Mr. Parent):
That this House offer its congratulations to the Right Hon. Prime Minister and wish him many years of continued service to his country.


Some hon. Members:: Hear, hear!


Madam Speaker:: The hon. member for Winnipeg-Birds Hill.


HAZARDOUS SUBSTANCES
Mr. Bill Blaikie (Winnipeg-Birds Hill):: Madam Speaker, if all the homes that had urea-formaldehyde insulation in them were located in the same area, we would call it a disaster area and have some truly adequate aid for the victims of the disaster, but because UFFI victims are spread at random across the country they have been unable to get the attention they deserve. Nevertheless, this is an environmental problem which is easy compared to others. We have identifiable victims and identifiable sources of pollution. If the government does not have the moral will to solve this problem, other more complicated problems are hopeless indeed. I therefore move, seconded by the hon. member for Winnipeg North (Mr. Orlikow):
That this House instruct the government to solve this pressing problem for so many Canadian home owners by massively expanding its UFFI removal program to include all UFFI infected homes, and in so doing also create thousands of worth-while and meaningful jobs for the many unemployed who would be able to do this kind of work.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


THE PRIME MINISTER
Mr. Dave Nickerson (Western Arctic):: Madam Speaker, in 1968 when the Prime Minister took office the federal budgetary deficit was half a billion dollars per annum; today it is $10.5 billion per annum, a 2,000 per cent increase. Therefore I
move, seconded by the hon. member for St. Catharines (Mr. Reid):
That the Prime Minister bow his head in shame and apologize to the Canadian public for his unprecedented 14-years' cruel mismanagement of their affairs.


Some hon. Members:: Hear, hear!


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


THE ADMINISTRATION
Mr. Girve Fretz (Erie):: Madam Speaker, instead of today celebrating 14 years of the Prime Minister's leadership of the Liberal Party, the government should declare a state of mourning for the economic devastation and havoc wreaked by it on the Canadian economy. While small businesses are driven into bankruptcy, workers by the hundreds of thousands are destitute, and home makers are again forced to tighten their belts, this government has escalated its annual spending spree from $12 billion 14 years ago to an unprecedented $75 billion today. Therefore I move, seconded by the hon. member for Grey-Simcoe (Mr. Mitges):
That a breath of fresh air be allowed to permeate these hallowed halls, described by one scribe as "the hot air factory", by Prime Minister Trudeau and his entire cabinet resigning en masse.


Some hon. Members:: Hear, hear!


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


AGRICULTURE
Mr. Terry Sargeant (Selkirk-Interlake):: Madam Speaker, whereas Econ Consulting Limited, a private grain dealer licensed by the Canadian Grain Commission, collapsed recently owing 300 prairie farmers some $4 million; whereas this firm was in violation of the Canada Grain Act by having posted a bond of only $700,000, and by never having filed an audited annual statement with the Commission; and whereas some 30 farmers will have to declare immediate bankruptcy if
April 20, 1982

no federal assistance is forthcoming, I move, seconded by the hon. member for Churchill (Mr. Murphy):
That the Minister of Agriculture commit himself to provide the desperately needed assistance to these farmers, and to take the appropriate action against the principals of Econ Consulting Limited to recover this outlay; and that he establish a commission to investigate all aspects of the Econ collapse, especially the role of the Canadian Grain Commission in policing the statutes and regulations of the Canada Grain Act.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


POLITICAL PARTIES
Mr. Roger Simmons (Burin-St. George's):: Madam Speaker,
I rise under the provisions of Standing Order 43 on a matter of urgent and pressing necessity. Whereas recent press reports have indicated that the forthcoming Tory convention in Toronto will be discussing neither the leadership of their party, nor the taking of any clear-cut policy initiatives-


Mr. Nielsen:: We want to discuss the Newfoundland election.


Roger Simmons: -and whereas such obvious ambivalence indicates that members of the Conservative Party cannot decide whether to be blue Tories who want to cut, cut, cut, or red Tories who want to spend, spend, spend-


Erik Nielsen: Better than a yellow Grit.


Roger Simmons: -I move, seconded by the hon. member for Ottawa-Centre (Mr. Evans):
That copies of the Speech from the Throne be distributed to all Tory members of the House to provide them with some clear-cut and definitive policy options for Canada.


Some hon. Members:: Hear, hear!


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


THE PRIME MINISTER
Mr. Geoff Scott (Hamilton-Wentworth):: Madam Speaker, given the fact that on April 20, 1968, the consumer price index
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was running at a 4.2 per cent rate of inflation, and that a dollar would then have bought you what it costs $2.83 to buy today, or, to put it another way, the April 1968 dollar is now in 1982 worth 35 cents, I move, seconded by the hon. member for Brampton-Georgetown (Mr. McDermid):
That the Prime Minister of Canada, who says he does not intend to resign as long as the economy is in bad shape, consider the other possibility-that the best way to bring down consumer prices is to resign.


Some hon. Members:: Hear, hear!


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


NATURAL GAS TAXES IMPOSED ON MEDICINE HAT. ALTA.- MOTION UNDER S.O. 43
Mr. Bert Hargrave (Medicine Hat):: Madam Speaker, under the provisions of Standing Order 43, and in view of the very unfair, illegal and increasing natural gas taxes presently being paid under protest by the City of Medicine Hat, and in view of the Medicine Hat citizens' petition tabled yesterday in this House with 12,689 signatures protesting this punitive taxation under the National Energy Program, I move, seconded by the hon. member for Red Deer (Mr. Towers):
That the Minister of Finance reassess the propriety of these taxes and allow discussion and referral to committee at the earliest possible date.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.



ORAL QUESTION PERIOD


John Horton McDermid: Madam Speaker, my question is for the Minister of Employment and Immigration who I see is behind the curtains. I wonder if he might take his seat.


An hon. Member:: He is behind the eight ball, too.


Some hon. Members:: Oh, oh!

April 20, 1982
Oral Questions


John Horton McDermid: Statistics Canada confirmed what most Canadians were already tragically aware of, that the unemployment picture is worse than the government has been announcing. Taking into account the 410,000 hidden unemployed, the unemployment rate stands now at 13 per cent. When the Prime Minister took office 14 years ago, the unemployment rate was 4.5 per cent. The minister announced that he plans to import 20,000 to 25,000 skilled workers to meet a perceived demand. Can the minister tell this House whether he intends to adjust the 20,000 to 25,000 figure considering those figures represent estimates given to him last July based on megaprojects proceeding, which have not; a 7 per cent unemployment rate, which is completely false, and do not take into account the hundreds of thousands of unemployed skilled and unskilled Canadian workers?


Hon. Lloyd Axworthy (Minister of Employment and Immigration):: Madam Speaker, the hon. member has previously asked this question. In fact he asked it two weeks ago during a hearing of the Standing Committee on Labour, Manpower and Immigration. I will take the time to repeat the answer we gave to him at that time. We said that the number of skilled workers was determined after fairly extensive consultations across Canada with employers, unions, and provincial governments. We tabled those numbers in the House, and we are constantly adjusting them.
I pointed out to the hon. member at that time, and I suppose I should repeat what I said, that we already adjusted the figures substantially last December when we put a major restraint on skilled workers coming into Canada to the mining industry, the construction industry and in 24 categories of the manufacturing industry. A major adjustment has, therefore, already been made. We will continue to monitor the situation as part of our over-all employment strategy. That is the answer we gave to the hon. member at that time. The situation has now changed, which shows we are making sure that our immigration policies are in complete accord with the employment picture in Canada.


REQUEST FOR PROGRAMS TO RELIEVE UNEMPLOYMENT
John Horton McDermid: Madam Speaker, the minister may have restricted entry in one area but he has increased entry in others. The numbers have stayed the same, and that is sweet comfort for those people in skilled categories who are unemployed today. The minister has been advocating, all across the country, an industrial training program as a panacea to cure all. If the minister took the time to visit his riding and left his little comfortable nest here in Ottawa like most of us do-


Madam Speaker:: Order, please. The hon. member knows that he must ask a question.


Mr. Lalonde:: He does not know what he is talking about.


John Horton McDermid: Madam Speaker, if the minister realized the tragedy that is going on in the country then he might be able to be a little more sympathetic to what is going on in Canada. When will the minister openly join those Liberals who are calling for the Prime Minister's resignation so at least we can give Canadians some hope? When will the minister introduce programs to relieve unemployment?


Lloyd Axworthy: Madam Speaker, all members on this side of the House spend a lot of time in their ridings talking to many Canadians. We are very sympathetic to the situation of those who are unemployed. We are trying to respond in a number of ways and it is for that reason that we have substantially improved and increased the training programs to a total of well over $1 billion this year.
We have established a number of programs. With respect to the work-sharing program, we have signed over 700 agreements in the last three months. This means that we have been able to avert 18,000 lay-offs. We have a number of job creation measures that are providing direct employment to over
100.000	Canadians. It seems to me that shows that we do care. Rather than simply engaging in the flamboyant rhetoric of the hon. member, who is becoming a professional crepe hanger trying to make the worst out of the situation, we are trying to do the best we can for the situation with the resources we have to help those people, instead of trying to inflame the situation as the hon. member is obviously trying to do in this question period.


TRAINING PROGRAMS FOR YOUNG PEOPLE
John Horton McDermid: Madam Speaker, averting 15,000 lay-offs is sweet comfort to the
1.700.000	unemployed. The minister again talks about the training programs initiated, yet over half of the unemployed are under the age of 24. How many young unemployed Canadians are involved in those training programs the minister likes to brag about all the time?


Lloyd Axworthy: Madam Speaker, it comes as some surprise to me that the Conservative Party is so criticizing of training. As far as most Canadians are concerned, young and old, the ability to get new skills and to adjust to the changing work environment is perhaps the most important asset they can acquire. The fact of the matter is that close to 48 per cent of the people enrolled in our training programs, that is 250,000 Canadians, are under the age of 24.


Some hon. Members:: Hear, hear!
April 20, 1982


EMPLOYMENT
[Stage Direction]
INQUIRY WHETHER AGREEMENT WILL BE MADE BETWEEN PRATT & WHITNEY, MONTREAL, AND UNIONS
Hon. Roch La Salle (Joliette):: Madam Speaker, my question is also directed to the Minister of Employment and Immigration. The minister is aware of the substantial and generous government contributions and subsidies received by Pratt & Whitney in Montreal. Despite these subsidies, the company has been obliged to lay off over 1,500 employees, and although the minister has set up a new work-sharing program and the unions seem to be very interested, there is still no agreement with the company on this matter. Since the government, in subsidizing this company, has a certain responsibility, would the minister, for the sake of all the employees involved, be prepared to send one of his officials to make a special effort to conclude an agreement between the company and the unions, and thus prevent the loss of thousands of jobs?


Lloyd Axworthy: Madam Speaker, the discussions between the management of Pratt & Whitney, the union officials and the government have been ongoing now for several weeks. The whole essence of the work-sharing program is based upon the voluntary co-operation of the three major partners. We cannot compel either management or the union to come into an agreement; it must be based upon their willingness to come into that agreement.
We have signed a work-sharing arrangement with the office workers of Pratt & Whitney. It is really up to the union and management to overcome their own jurisdictional disputes as to who is included in the voting arrangements in order for the work-sharing to apply to the general work force. We are providing a member of our manpower consultative services, a separate division of my department, to try to bring that agreement about. We will continue to work with them at any time, but it is based upon mutual co-operation between the three partners. We would ask the hon. member to use his good offices to help that agreement come about. It would be a very important support and assistance for the workers there, if they could get the work-sharing agreement signed.

PRATT & WHITNEY-REQUEST THAT MEASURES BE TAKEN TO MEET WISHES OF UNION MEMBERSHIP


Roch La Salle: Madam Speaker, I understand the principle the minister has just explained. However, the fact remains that I am referring to a company that practically owes its survival to government subsidies. Since the union-and my information gives me every reason to believe this-is in favour of the program created recently by the minister, and considering that the government has an obligation to show some concern for Pratt & Whitney, could the
Oral Questions
minister in some way urge the company to be more receptive to the wishes of union members?


Lloyd Axworthy: Madam Speaker, without taking the time of the House to go into the full details, I do not think it is as necessarily clear-cut that one side is in the wrong and the other side is in the right. It is a dispute about who is to be involved in the voting jurisdiction which would apply to the work-sharing agreement. That is really a matter of collective bargaining between the parties. While the government can facilitate, support and encourage, I do not think it wants to impose.
We are using our good offices to try to bring about that arrangement. I know the hon. member from that area, the hon. member for Longueuil, has provided a lot of support in that regard. I appreciate his help and assistance. We will continue to work with them. If the hon. member would also provide his good offices, I am sure we could bring the two parties to that dispute to the table and to an agreement and provide the kind of outcome we all want to achieve.


THE ECONOMY
Hon. Edward Broadbent (Oshawa):: Madam Speaker, my question is directed to the Prime Minister. Yesterday in Vancouver he threatened Canadians that he would stay on until economic circumstances improved.


Some hon. Members:: Hear, hear!


John Edward Broadbent: I see the Prime Minister has three supporters behind him, anyway. Since he came to office, unemployment has almost doubled and inflation has almost tripled. I would like to ask the Prime Minister why he thinks the people of Canada would turn for a solution to a man who created the problem? Is it not like asking the arsonist to put out the fire?


Right Hon. P. E. Trudeau (Prime Minister):: Madam Speaker


Some hon. Members:: Hear, hear!


Pierre Elliott Trudeau: Madam Speaker, the hon. Leader of the New Democratic Party has quoted some figures about inflation doubling, and so on. During that period the wealth of Canada more than tripled. That should be something which could influence some of the people who are interested in knowing whether I am available or not.


John Edward Broadbent: I would suggest that the people of Canada know that the wealth of virtually every country has improved in the last 14 years, but they are more concerned about the million and a half unemployed in this country, which is a direct result of Liberal government policy.

April 20, 1982
Oral Questions


QUERY RESPECTING PROGRAMS TO COMBAT INFLATION
John Edward Broadbent: Madam Speaker, since the Prime Minister finally did join those in the country who have talked about job insecurity for Canadians for a long time by saying that he recognized that unemployment was a dangerous threat to the social fabric of the country, why should Canadians at this point in his political life believe that he is serious about this? Why should they have confidence that he is any more concerned than he was in the past? Does the government today have one new program to announce which will come to grips with the serious level of unemployment in this country?


Pierre Elliott Trudeau: Madam Speaker, I am interested that the Leader of the New Democratic Party should say that wealth in many other countries has increased as well while wealth in Canada has increased. He fails to recognize that unemployment in other countries has also increased. He fails to see that jobs in Canada during the period in which I have been in office have been created at a rate which far exceeds that of all other major countries. He fails to see that the government which I suppose he supports ideologically-the French government-has higher unemployment than Canada has. He fails to see that the United States has higher unemployment than Canada. He fails to see that Britain has higher unemployment than does Canada. Germany is very close to Canada.


John Edward Broadbent: Oh, watch it.


Pierre Elliott Trudeau: I am watching it, Madam Speaker. I wish that the hon. member would watch it.


REQUEST THAT NEW BUDGET BE INTRODUCED
John Edward Broadbent: Madam Speaker, the figure that overcomes all those that the Prime Minister has alluded to with its impact is the reality that when he came to office we were the second richest nation per capita in the world. We are now down to about thirteenth or fourteenth. The Prime Minister cannot deny that.
Since the Prime Minister has responsibility for what happens in Canada and not in other countries, and since a report which was released today showed that the number of Canadians in the labour force who were unemployed in 1980 amounted to one in five who were out of a job sometime in 1980-and unemployment was lower then than it is today-such disturbing statistics provide the kind of evidence for the statement that I thought the Prime Minister was making seriously when he said that unemployment can threaten the social fabric. If the reality today is that unemployment is devastating in terms of its impact on families throughout Canada, why does the Prime Minister not say that he will bring in a new budget or some other specific measure designed to turn the economy around and provide some economic leadership to Canadians?


Pierre Elliott Trudeau: Madam Speaker, when the hon. member pretends to rank countries by
wealth I suppose he realizes that he is classing, for instance, Saudi Arabia and Nigeria-


John Edward Broadbent: And the Netherlands, Norway, Denmark and Sweden.


Pierre Elliott Trudeau: -and Kuwait. I understand, but would the hon. member wish to subtract from the list those countries which are infinitely poorer than Canada in every sense? But because of OPEC operations-


John Edward Broadbent: Well, we are ninth then.


Pierre Elliott Trudeau: Well, Madam Speaker, the Leader of the New Democratic Party does not want to listen to answers.


DISASTERS
Hon. John C. Crosbie (St. John's West):: Madam Speaker, my question is for the-


An hon. Member:: Welcome back!


John Carnell Crosbie: My question is directed to the Minister of Energy, Mines and Resources. The minister will have noticed that today the United States Coastguard and the National Transportation Safety Board are commencing hearings in Boston into the sinking of the Ocean Ranger, which sank on the Canadian continental shelf on February 15. He will also know that congressional hearings which have already been held have indicated that the whole tragedy had something to do with the breaking of a porthole in the control room, which affected the stability on the port side. He will also know that in Canada not one agency, not one parliamentary committee, not one royal commission nor any official body has done anything in connection with this matter to give information to the public.
When will the joint royal commission start hearings concerning this tragedy? It was appointed on February 25, two months ago. Do we have observers at Boston who are listening to the evidence that the Coastguard and American authorities are giving? Is it not shameful that we must get our information secondhand from hearings held in the United States, when the tragedy occurred here over two months ago?


Marc Lalonde: Madam Speaker, I will try to answer the various points raised by my hon. colleague. The joint commission of inquiry has been set up. All the arrangements, administrative and otherwise, have been settled with the commission and with the government of Newfoundland.
The commission is in a position to proceed. It is proceeding, however, with caution and sensitivity, bearing in mind the importance of the issue and the fact that the commission has
April 20, 1982

been given a very broad mandate indeed. It wants to demonstrate great care and concern for those affected by the offshore drilling operations.
I would remind my hon. friend that the investigations to which he is referring are internal investigations of the existing United States agencies. It is obviously much easier and faster to set up such investigations than a joint inquiry of the type we are setting up. As I said, our inquiry has a much broader mandate. However, there is work being done, both by the companies concerned and by agencies of the Government of Canada, in gathering evidence and carrying out studies to be made available to the commission as soon as the commission requests the information.
Concerning the presence of observers before the United States agencies, I am not in a position to advise my friend as to whether there is an observer today or not. However, we have held meetings with the United States agencies concerned, and they have agreed to co-operate with us fully in all respects and to make all their information available to us. We have also agreed to help them in their investigation.
That is as much as I can say. However, Madam Speaker, if my answer was long, the question was just as long.


REQUEST THAT PARLIAMENTARY COMMITTEE CONDUCT INQUIRY
John Carnell Crosbie: Madam Speaker, my supplementary question is to the same minister. The Ocean Ranger was owned by a U.S. company, but the accident occurred on the Canadian continental shelf. Eighty-two people died in the tragedy, 52 of whom were Canadians, 26 from the district of St. John's West alone. Therefore, I put it to the minister that it is shameful that we have not received any public information concerning the cause of this accident. All of our information comes from the United States, not from private, internal inquiries, but from a congressional hearing, and from a public hearing which is going on today.
I would ask the minister, wfiy not have a committee of this House investigate the matter? It is time that this House ceased to be a eunuch and that it had some function and some purpose. Why not at least have a committee of this House make some initial inquiries of the Canadian authorities into what they consider the causes of this tragedy to be? Would he agree to that so that we do not have to wait two, three or four years for a royal commission report such as the McDonald Commission undertook? Would the government consider that?
Will the minister tell the House whether we have made any changes in our regulations or requirements with respect to offshore safety since that accident occurred? Has the government undertaken its own internal inquiries, and have they resulted in changes and more precautions being taken?
I know that it is a long question, but this is a serious matter.


Marc Lalonde: It is certainly a very serious matter and one to
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which the government and I attach much importance. If my hon. friend feels like a eunuch, I think that is his problem.


Some hon. Members:: Oh, oh!


Marc Lalonde: I do not think that it is a problem which is shared by other members of this Parliament.


John Carnell Crosbie: This House is a eunuch.


Marc Lalonde: As far as the specific questions he has raised are concerned, I want to tell him that steps are indeed being taken. As he knows, the two other offshore rigs which were on the Hibernia field have been brought ashore for full inspection, and the federal agency responsible for the administration of the Canada lands imposed very high and stiff standards and requirements before those rigs were allowed to explore again. The companies have agreed to that, and the government of Newfoundland has also agreed to those particular measures we have taken to ensure the safety of people on board.
As far as the suggestion of the hon. member is concerned, I would suggest to him that we should allow the royal commission, which is a completely independent one, representing both governments, to do its work independently and freely. What is important is that the Canadian public, and the people of Newfoundland in particular, be assured that there will be nonpartisan, objective and complete examination of this situation and that they will be presented with all of the facts. It is important that they be fully satisfied they have the full story and that no partisanship was exhibited concerning this tragedy.


Some hon. Members:: Hear, hear!


FINANCE
Hon. Ron Huntington (Capilano):: Madam Speaker, I would like to ask the Minister of Finance if it is true that the chief draftsman for the Income Tax Act in the Department of Justice has left his post and that the taxation legislation which was to be due in May or June will not be ready for us until November.


Hon. Allan J. MacEachen (Deputy Prime Minister and Minister of Finance):: Madam Speaker, I have no information on that point at all.


Arthur Ronald Huntington: It is rather surprising that the Minister of Finance would not be aware of this and that he cannot confirm the situation.


REQUEST THAT BUDGET BE WITHDRAWN
Arthur Ronald Huntington: Madam Speaker, I am wondering whether the Minister of Finance is aware of the number of capital projects which are on hold in this country,

April 20, 1982
Oral Questions
capital projects which could create many jobs and could put our skilled and unskilled workers back to work. They are on hold until the rules of interest deductibility are stabilized and known. I am wondering if the minister would remove his own ego from being ahead of the plight of the unemployed and hoist the November 12 budget so that some stability could come back into the place of work.


Some hon. Members:: Hear, hear!


Allan Joseph MacEachen: Madam Speaker, the hon. member seems to be exhibiting a fair amount of ego in the flamboyancy of his question.


Some hon. Members:: Oh, oh!


Allan Joseph MacEachen: It seems to me that we have seen that demonstrated every day by hon. members opposite who are spending more time on rhetoric and personal reflections than upon concrete measures.


Arthur Ronald Huntington: What about the unemployed?


Allan Joseph MacEachen: When the hon. member wants to ask about concrete measures, he will get objective replies.


Arthur Ronald Huntington: Great answer!


Mr. Beatty:: What a smug bunch.


HAZARDOUS SUBSTANCES
Mr. Ray Skelly (Comox-Powell River):: Madam Speaker, my question, which is directed to the Minister of Consumer and Corporate Affairs, involves some recent revelations by Dr. Nantel, head of toxicology at Laval, and recent reports by the National Research Council which give indications that urea formaldehyde foam is an inherently unstable substance which breaks down and continuously releases more gas, that safety levels of .1 parts per million are completely arbitrary, with no reference to residential environments, and that there is no safe exposure level. There are indications that impacts on health are not just allergic reactions, but also possible long-term attacks on the immunity system. There is also a possibility that other variances of gas are released from the insulation which may affect health.
Would the minister lay before the House a list of medical studies and other studies related to these problems suggested by the recent studies released? Would he elucidate, for the House, all the information pertaining to the government's programs dealing with these health hazards?
[ Translation]


Hon. Andre Ouellet (Minister of Consumer and Corporate Affairs):: Yes, Madam Speaker. I should be glad to table at the proper time for tabling documents, a list of the studies now in progress. I am surprised at the hon. member's question, because just before the Easter adjournment I sent all members of the House an information document which included a list of research projects started by the National Research Council of Canada and the Department of National Health and Welfare. I should be happy to send the hon. member some more copies.


REQUEST THAT GOVERNMENT CONSIDER FURTHER SAFETY PROGRAMS
Raymond John Skelly: Madam Speaker, the surprise should not overtake the minister considering the amount of fog he has distributed on this subject. Those kinds of questions are being asked by many home owners who are exposed to it. Nevertheless, if there is any substance to those remarks, and there is more and more information indicating that this is the case, is the minister prepared to admit that his program for remediation, based on reducing the concentration of gas in homes, and a grant of up to $5,000, will be totally inappropriate? In future, if the insulation breaks down in those homes, it will create a health hazard and the entire $110 million program will be wasted. Will the minister explain to the House what other options the government is considering when this program fails?


André Ouellet: Madam Speaker, I do not agree with the hon. member. In fact, I must say, which some reluctance, that the Canadian government seems to be the only government to have offered any concrete assistance to UFF1 victims. No other government, either provincial or municipal, has offered any financial assistance to these victims and nowhere else in the world where similar products are sold has there been any effort by government authorities to help these victims. The only government to take any action has been the Canadian government.


AIRPORTS
Mr. Pierre Deniger (La Prairie):: Madam Speaker, my question is directed to the hon. Minister of Transport and concerns the decision on the Dorval-Mirabel matter, which was promised for May. Could the minister inform the House and the Canadian people whether he is prepared to accept the recommendation made by participants in the economic summit
April 20, 1982

on Greater Montreal, namely, to publish the cost-benefit studies on solution 6 and all other studies relevant to this subject, before announcing his decision next May?


Hon. Jean-Luc Pepin (Minister of Transport):: Madam Speaker, I fully intend to publish these studies-my hon. friend is referring more specifically to the second study, since the first has already been published. I think I will do so, after consultation with my cabinet colleagues, as soon as I will be in a position to announce general guidelines with respect to Mirabel.


PIPELINES
Hon. J. Robert Howie (York-Sunbury):: Madam Speaker, my question is to the Minister of Energy, Mines and Resources. Given the delays and significant cost increase affecting construction of the TQM natural gas pipelines from Quebec to the maritimes, will the minister indicate the expected date of completion, and will he confirm that the price of gas delivered to the maritimes will not exceed the citygate price in Toronto?


Marc Lalonde: Madam Speaker, as the hon. member knows, there has been some delay in the completion of the pipeline in Quebec. As far as I am aware, the plan is still for the pipeline to reach the maritimes some time in 1984. With regard to the guarantee to which the hon. member referred, I want to assure him that this is part of the National Energy Program. It has been announced. It is the firm intention of the government, in order to ensure gas consumption in the maritimes, that the price to the maritime consumer will be maintained at the same level as the price in Toronto.


PRICE GUARANTEE
J. Robert Howie: Madam Speaker, I thank the minister for his answer. If the distributor cannot deliver gas to maritime consumers at the Toronto citygate price, is the minister in effect saying that his government is prepared to subsidize the difference?


Marc Lalonde: Madam Speaker, we have taken steps to ensure that this will be the case, that the price of natural gas delivered in the maritimes will be maintained at the same level as the price in Toronto.
Oral Questions


UNEMPLOYMENT INSURANCE
Mr. W. C. Scott (Victoria-Haliburton):: Madam Speaker, my question is for the Minister of Employment and Immigration. It deals with the dramatic increase in lay-offs in the labour force, which in turn has resulted in a comparable increase in applications for unemployment insurance benefits.
I am reliably informed that many Unemployment Insurance Commission offices across the country are laying off casual help while the workload in these offices is increasing, resulting in long delays in the processing of benefit claims. In view of the fact that this is imposing an undue hardship on people with no other source of income, will the minister assure the House that he will look into this situation and take steps to expedite the processing of unemployment insurance claims by providing additional staff positions where needed?


Lloyd Axworthy: Madam Speaker, I believe I answered a similar question in the House a few weeks ago. I indicated that we have been adding officers by inviting former officers of the Unemployment Insurance Commission to come back and work on a temporary basis. In addition, we have been moving staff from areas where the demand is reasonably stable to areas where there is a very high demand. We have been shifting unemployment insurance officers across the country, as well as establishing centralized processing units in each of the areas where demand is high. We have taken a number of steps. We have succeeded in reducing the backlog substantially. From all reports, there are very few areas in which the pressure is extreme. If the hon. member can give me a specific case, I will be glad to look into it.


EXTERNAL AFFAIRS
Hon. James A. McGrath (St. John's East):: Madam Speaker, I have a question for the Prime Minister. During the course of his meetings with President Mitterrand, did the question arise of the stalemated discussions between France and Canada over the boundary dispute, and the 200-mile limit, with the Island of St. Pierre, which is causing considerable fishery difficulties? I ask the question in view of increased French militancy in enforcing their territorial demands.


Pierre Elliott Trudeau: Madam Speaker, the question did not arise. The French President came to Canada in the context of his travels to visit other participants in the Versailles summit in June. It was agreed that we would discuss merely summit-related matters. Bilateral matters, including that one, will be raised when the French Prime Minister visits us the day after tomorrow.
Oral Questions STATUS OF DISCUSSIONS

April 20, 1982


James Aloysius McGrath: Madam Speaker, can the Secretary of State for External Affairs tell the House what exactly is the position on the stalemated talks, in view of the spectre of Canadian economic sanctions that was raised in France by the Islands' representative in the French National Assembly? I ask the question because a failure to bring a satisfactory resolution to this problem will cause serious problems for Canada's fishery, indeed potential problems down the road with respect to offshore oil and gas.


Hon. Mark MacGuigan (Secretary of State for External Affairs):: Madam Speaker, the story in the French press about speculation of some kind of weird connection between the St. Pierre and Miquelon situation and the Falkland Islands is indeed of no service to relations between Canada and France. We are negotiating the water boundary in the normal course of affairs with the French. Our discussions have been proceeding. We have been engaged in offer and counter-offer. The situation at the present time is that we are still in the course of discussion. As one would expect, we are putting forward a very strong case on behalf of Canadian interests.


THE ECONOMY
Hon. George Hees (Northumberland):: Madam Speaker, 1 have a question for the Prime Minister. As he well knows, his government very recently issued a 20-year bond to yield 15.5 per cent interest rates. Obviously this indicates very clearly that the government, the Prime Minister, the Minister of Finance and the cabinet expect that high interest rates and high inflation are going to be with this country for a very long period of time. I would like to ask what caused him, his Minister of Finance and his government to throw in the sponge so early in the fight against high interest rates and high inflation.


Pierre Elliott Trudeau: Madam Speaker, I am surprised that a learned member like my hon. colleague would have such an interpretation. Surely he knows that long-term money is hard to come by now and that, in order to get it, you have to offer high interest rates.


An hon. Member:: Why?


Pierre Elliott Trudeau: The member opposite wants to know why. Because-


Some hon. Members:: Oh, oh!


Pierre Elliott Trudeau: I am sorry, George, but your colleagues don't want an answer to this kind of question. Maybe it is too difficult for them. Perhaps you and I had better discuss it later.


George Harris Hees: Madam Speaker, I have no intention of letting the Prime Minister off the hook.


Some hon. Members:: Hear, hear!


George Harris Hees: It is a very difficult question that obviously he is floundering on.


Some hon. Members:: Hear, hear!


George Harris Hees: Does he not realize that the reason he has to pay a high interest rate today is that the people of this country have no confidence at all in his economic ability and that of his ministers?


Some hon. Members:: Hear, hear!


George Harris Hees: If he does not believe that we are going to have high interest rates and high inflation over the next 20 years, how can he and his government justify paying a 15.5 per cent interest rate over that very long period of time?


Pierre Elliott Trudeau: Madam Speaker, surely the hon. member knows that these are the rates that are prevailing in the United States and in various European countries, France and so on, and that if you do not offer that to Canadian savers, including I am sure my hon. friend-


George Harris Hees: Twenty years?


Pierre Elliott Trudeau: Madam Speaker, if you want to borrow long term you will have to pay what the investor will lend his money at. I am telling the hon. member that the Canadian can move his money to the New York bond market or to the European bond market and get that kind of rate. That means that the-


George Harris Hees: I think you had better sit down, Pierre; you have run out of steam.


Pierre Elliott Trudeau: Madam Speaker, the hon. member wants me to sit down. I see the answer is a bit too difficult for him to follow.


Some hon. Members:: Hear, hear!


HAZARDOUS SUBSTANCES
Mr. Gerald Laniel (Beauharnois-Salaberry):: Madam
Speaker, my question is directed to the hon. Minister for Consumer and Corporate Affairs. I agree that the Canadian government is the only government that has provided some form of concrete assistance to UFFI victims, but I would like to ask the minister whether he is prepared to consider further assistance programs, and if so, is he willing to consider the
April 20, 1982

feasibility of introducing a program of interest-free or subsi-dized-interest loans to help people who want to remove the foam and do not have the resources to do so, a suggestion that was made by my local riding committee?


André Ouellet: Madam Speaker, I can assure the hon. member that this option was considered before we announced the present program which enables homeowners to obtain, not an interest-free loan but a grant, which is not taxable and may go as high as $5,000. Obviously, this is a far more generous offer than any loan, whatever the amount, because in case of a loan, the amount must be repaid by the home owner. However, in this case, the government is giving home owners up to $5,000. I can see why the hon. member and the members of his riding association would like to have the other method as well. I have always maintained that the offer made by the Canadian government should be matched by provincial authorities. If UFFI victims want to get more from government, they should not go to the federal government at this point but to the provincial authorities to obtain the equivalent of what we are offering.


BANKRUPTCIES
Mr. David Orlikow (Winnipeg North):: Madam Speaker, my question is directed to the Minister of Finance. Last month we set a record, a record of which no one can be proud. We had, for the first time, more than 1,000 business bankruptcies in the month of March. Given the fact that we are now seeing bankruptcies of companies which have been in business for a long time, well managed and playing an important role in their regions; given the fact that one of the major reasons, if not the major reason, for those bankruptcies is the high rate of interest with which they cannot live and exist, I wonder if the minister has any idea for braking the high interest rate policy which is leading to the destruction of an increasing number of businesses in this country every month.


Allan Joseph MacEachen: Yes, Madam Speaker, I think the idea is very clear that we can get interest rates down when we can succeed in getting the rate of inflation down; and there is no secret way that I know of, and no one in this House has ever revealed-no secret way to brake the high interest rates until inflation comes down. That is the idea.


REQUEST THAT GOVERNMENT TAKE ACTION
David Orlikow: Madam Speaker, given the fact that the number of business bankruptcies is increasing every month, that it increased in the province of Manitoba by 100 per cent and increased in the province of Quebec by 50 per cent, that every business bankruptcy leads to
Oral Questions
more unemployment, that in the province of Quebec the official rate of unemployment is 14 per cent and the real rate is substantially higher than that, I wonder if the minister is prepared to see the time when we will have 2,000 bankruptcies in a month rather than 1,000, before he does something to lower the rate of interest which is killing so many businesses.


Allan Joseph MacEachen: Madam Speaker, the question of the hon. member is characteristically vague. He invites the government to do something. Day in and day out I have been explaining that the policy of the government is directed to bringing down inflation in order to bring down interest rates, in order to create more jobs. Every proposal made by the New Democratic Party during the question period, if implemented, would have the effect of driving up interest rates and creating more bankruptcies and more unemployment. That is the difference between us.


Some hon. Members:: Hear, hear!


FINANCE
Mr. Bill Yurko (Edmonton East):: Madam Speaker, my question is directed to the Minister of Finance. Some months ago in a First ministers' economic conference some of the premiers recommended that the exchange value of the Canadian dollar versus the United States dollar be allowed to drop to the 75-cent level, to lower interest rates and stimulate the economy. Since then the Canadian dollar has fluctuated, dropping almost below 81 cents and now almost reaching to 82 cents. Has the minister examined seriously, and is the government actively considering, fixing for a period of time the exchange rate of the Canadian dollar at the 80-cent level or thereabouts versus the American dollar, so that the strength of the pegged dollar may provide some stability and may be used to lower Canadian interest rates and also stimulate foreign investment in Canada, particularly in the megaprojects?


Allan Joseph MacEachen: Madam Speaker, it is not the intention to establish a fixed exchange rate.


PUBLIC SERVICE
Hon. Walter Baker (Nepean-Carleton):: Madam Speaker, my question is directed to the President of the Treasury Board. On March 26, the President of the Treasury Board endorsed a proposal to give a parliamentary committee the task of trying to clarify the policical rights of public servants and their right of speech. I have not asked him a question since then because I

April 20, 1982
Petitions
wanted to give him time to consult his colleagues in respect to the matter. Has he yet consulted his colleagues and, if so, what advice can he give the House on whether the government is prepared to go along with the endorsement which he gave to this matter in committee?


Hon. Donald J. Johnston (President of the Treasury Board):: Madam Speaker, I have discussed this issue with a number of my colleagues. The question, as I recall from the member for Nepean-Carleton, arose from the context of the Neil Fraser case, a case which I understand is currently proceeding through the normal appeal procedures. I think it would be helpful to have the decision of the Public Service Staff Relations Board on that case before taking further action.


REQUEST THAT MINISTER REVIEW POSITION
Walter David Baker: Madam Speaker, if the minister will reread the portion of the committee hearings, he will find that it was not taken in the context of the Neil Fraser case, it was with respect to the problem generally. The position has been endorsed by the Chairman of the Public Service Commission, who felt it was time that this matter be aired by the parliamentary committee. Would the minister, given that representation, which he can check, review his position so that we can have this matter cleared generally with respect to people in the Public Service of Canada, as to their rights to speak and their rights to engage in political activity?


Donald James Johnston: Madam Speaker, I think it is indeed an important issue. It was raised, if I recall correctly, by the D'Avignon Committee; and it is a matter which has been under review in the context of the government's co-ordinated response to the D'Avignon committee report and the Lambert commission Report. As I indicated in the committee, I will take the matter up with my colleagues to determine whether the procedure proposed by the hon. member for Nepean-Carleton-and, I understand, endorsed by the Chairman of the Public Service Commission-would be an appropriate avenue to explore.


PETITION
Madam Speaker:: I have the honour to inform the House that the Clerk of the House has laid upon the Table the two hundred and nineteenth report of the Clerk of Petitions stating that he has examined the petition presented by the hon. member for Medicine Hat (Mr. Hargrave) on Monday, April 19, 1982, and finds that the petition meets the requirements of the Standing Orders as to form.



ROUTINE PROCEEDINGS


Allan Joseph MacEachen: Madam Speaker, pursuant to Standing Order 41(2) I wish to table, in both official languages, copies of "The Budget Process", a paper on budget secrecy and proposals for broader consultation.


PETITIONS
Mr. Fred McCain (Carleton-Charlotte):: Madam Speaker, it is my privilege and duty to present a formal petition to the House on behalf of some of my constituents. The subject of the petition is private member's Bill C-451, to amend the Criminal Code as it relates to gun control. The expressed displeasure respecting this bill is built around the fact that if such a bill were to be enforced in our country, it would spell the end of hobbies such as gun collecting and sports hunting and the privilege of handing down a gun collection as an heirloom to an heir. This would be a constraint which has not been imposed upon any other facet of our society.
My petitioners pray that not only should this bill not be given favourable consideration by this House but also that reconsideration be given to the already excessive legislation which imposes control upon guns to the detriment of the wellbeing of our society as a whole.


Mr. Gordon Taylor (Bow River):: Madam Speaker, I take great pleasure in presenting a petition signed by more than 100 Canadians in western Canada from the Bow River constituency-around Airdrie and Crossfield-and from British Columbia.
Your petitioners pray that Bill C-451, to amend the Criminal Code respecting gun control, be not passed. The petitioners believe this bill is an infringement of their rights, that it will not stop the criminal element from obtaining firearms, that it will adversely affect sportsmen, gun collectors, rifle and pistol enthusiasts and that it is the first step toward the total disarmament of the people. Through this petition the petitioners are using their ancient right to present a grievance common to thousands of Canadians and pray that this petition will be given consideration by this House.


Mr. Joe Reid (St. Catharines):: Madam Speaker, I, too, would like to take advantage of the ancient and honoured right of petitioners to present a grievance to this honourable and distinguished House in the hope that a remedy will be found.
April 20, 1982

Over 14,000 residents of the city of St. Catharines and its adjacent areas-14,044, to be exact-have signed a "Measure Canadian" petition sponsored by radio stations CKTB and CJQR-FM indicating that they join with many thousands of Canadians across this country in opposition to this government's arbitrary, mandatory and compulsory imposition of the metric system in Canada. The request in the petition is to allow metrication to proceed where determined voluntarily and to be efficient and competitive, but the petitioners strongly protest the mandatory imposition of metric conversion. Those
14,000	names are contained in the bundle I have in my hand.


Claude Girvin (Girve) Fretz: Madam Speaker, I have the honour and pleasure to present a petition on behalf of 156 constituents from the Niagara Peninsula who oppose the enforced use of the metric system in auction markets and other bid buying operations. These Canadians believe that the pace, the degree and the nature of the change to the System International should, and must, be determined voluntarily, especially because of the uniqueness of the instantaneous judgments which need to be made in bid buying where both the buyer and the seller need to be very familiar with the value of the product and the value of the bid.


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. 3,276, 3,560, 4,064, 4,154 and 4,176.


Mr. McKinnon: 1.	Did the Department of National Defence place a $12,000 contract with E.A.C. Amy and Sons to carry out a seminar on planning requirements to mitigate the effects of an earthquake in British Columbia, under contract No. 19ST 57111-0-A233 (OST80-00123) and was this contract in addition to the $29,400 awarded previously to the same company to conduct a seminar on the effects of an earthquake in British Columbia and, if so (a) on what date was the seminar on the effects of an earthquake held and are the results now available (b) on what date will the seminar on planning requirements be held?
2.	Does the sum of $41,400 represent the total cost of the seminars and, if not (a) what is the estimated total cost to all government departments for this exercise (b) are the provinces going to pay for the transportation, accommodation and honorariums of the invited federal and provincial emergency planners from across Canada?


Hon. Yvon Pinard (President of the Privy Council):: I am
informed by Emergency Planning Canada and the particpating departments as follows:
1.	Yes, on behalf of Emergency Planning Canada, (a) The seminar was held during the week of October 26 to 30, 1981.
Order Paper Questions
The results are being compiled at present and will be available on request to Emergency Planning Canada.
(b) The seminar on planning requirements occupied the last two days of the week (i.e. the October 29 and 30).
2.	No. (a) Participating departments: $13,279.03. Emergency Planning Canada: To the extent possible existing federal facilities were used, thus the additional expenses were at a minimum including some administrative costs and travel expenses to three invited participants and an honorarium to one of them. These brought the total federal costs carried by Emergency Planning Canada to $44,635.
(b) There have not been and will not be any federal charges to any of the provinces in respect of this seminar nor any charges to the federal government for provincial participation.


Mr. Cossitt: What is a current list of all Soviet citizens in Canada on work permits employed with any organization and, in each case, what is the name and address of the employer?


Lloyd Axworthy: As of the date of the question there were 74 Soviet citizens in Canada in possession of employment visas. Information related to their employment is considered by the CEIC as personal and confidential.


Mr. Cossitt: 1.	Is it now the policy of the Department of Employment and Immigration to require working visas for Americans living along the Canada-U.S. border, who play hockey for Canadian teams on the Canadian side of the border but who do not live in Canada and who only cross the border one or two times a week and who are not paid a salary by the Canadian teams involved?
2.	To the knowledge of the government, were such restrictions applied in eastern Ontario and, if so, how can such restrictions be justified when the persons in question are not actually working in Canada?
3.	Is this present policy causing a great amount of paperwork for the department and is the government prepared to order an immediate halt to such procedures and to leave the matter of entry and exit from Canada to the usual border-crossing questions by the immigration officials?


Lloyd Axworthy: 1. Yes.
2.	Yes. When coming to Canada, such persons require employment authorizations (working visas) and in addition, it must be established that their admission will not adversely affect Canadians. While wages are not involved, it must be noted that many of the teams are subsidized in some way by Sports Canada under its Fitness and Amateur Sports Program. The control exercised therefore is to ensure that the money spent in such assistance benefits Canadians first.
3.	No great amount of paperwork is generated by this control measure and no consideration is being given to stopping this procedure.

April 20, 1982
Petroleum Incentives Program Act EVALUATION OF CEIC NEWSLETTER


Mr. Mazankowski: Was a study evaluating the readership of a departmental employee newsletter commissioned by the Canada Employment and Immigration Commission and, if so (a) what is its status (b) what conclusions or recommendations were made (c) how were the conclusions or recommendations followed?


Lloyd Axworthy: Yes. Approximately 4,000 employees across the country received a survey questionnaire from an independent research firm. The completed questionnaires are now being returned and we expect all answers to be in the hands of the research firm by April 9, 1982. Several weeks later the company will provide us with their conclusions or recommendations and we will look into ways of responding to these recommendations.


Mr. Herbert: With reference to the answer to question No. 3,720, what is the percentage excluding the National Capital Region?


Lloyd Axworthy: It is 2.2 per cent.


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


Some hon. Members:: Agreed.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed, from Monday, April 19, 1982, consideration of the motion of Mr. Lalonde that Bill C-104, respecting petroleum incentives and Canadian ownership and control determination and to amend the Foreign Investment Review Act, be read the second time and referred to the Standing Committee on Energy Legislation.
Mr. Doug Lewis (Simcoe North):: Madam Speaker, I am pleased to have this opportunity to enter into debate on this bill, which basically is legislation designed to bring into effect the federal government's petroleum incentives program.
Members of Parliament come to this House from varied occupations and professions, and there is a strength in that diversity. As elected representatives we serve the Canadians who sent us to this House. We also have an opportunity to serve the professions and the occupations at which we once earned a living. This is one of those opportunities when I as a Member of Parliament have an opportunity to serve my former
profession in Parliament. For that reason I intend to be as nonpartisan in my remarks as possible.
I also beg the indulgence of the House to outline the background which lies behind my concerns with respect to this legislation.
Twenty-five years ago I entered upon the study of chartered accountancy as a chartered accountant student with my father's firm in Toronto, Horace G. Lewis and Company. I graduated as a chartered accountant in September, 1962. Although I have not practised regularly, I am still a member in good standing of the Institute of Chartered Accountants of Ontario.
There are five hon. members in this House who are members of the accounting profession. They are the hon. member for Vancouver Quadra (Mr. Clarke), the hon. member for Calgary South (Mr. Thomson) and myself on this side. On the government side there is the hon. member for Duvernay (Mr. Demers) and the hon. member for Dollard (Mr. Desmarais). All of us are proud to be members of the accounting profession.
The Institute of Chartered Accountants of Canada was formed in 1902. It was first named the Dominion Association of Chartered Accountants. There were six provincial institutes at that time, the earliest being the Ontario and Quebec institutes of chartered accountancy formed in 1879. The Canadian Institute of Chartered Accountants has been responsible for setting accounting standards since 1946.
With that background in mind I wish to address two issues with respect to this bill. The first is the generally accepted accounting principles which are applicable to the treatment of payments under the petroleum incentives program. The second is the position of the Canadian Institute of Chartered Accountants and the repercussions if that position is ignored.
The Canadian Institute of Chartered Accountants has an active program of ongoing accounting research which is supported by members of the accounting profession from across Canada. In September 1975, the institute enacted Section 3800 of the CICA handbook to account for direct payments of all types of government assistance. That section was produced as a result of a rigorous discussion and debate of all possible alternatives by members of the CICA accounting research committee, consultation with their associates, exposure of proposed standards to the accounting profession and the business community for comment and consideration of all comments received before the standard was formally issued. Because of concerns as to the proper accounting treatment of the PIP grants, formally known as the Petroleum Incentives Program incentives, the CICA initiated discussions in early 1981 with the oil industry, individual companies, their auditors, and representatives of the federal government.
April 20, 1982

In April, 1981 the accounting research steering committee drafted a proposed accounting guideline for the treatment of PIP incentive grants. The accounting research committee discussed the draft guideline and expressed agreement with the steering committee's position and proposed course of action. The draft guideline was then circulated to interested parties for comment. Government representatives, including the Minister of Energy, Mines and Resources (Mr. Lalonde) and the Minister of Finance (Mr. MacEachen), received the draft guideline but did not offer any comments on it.
In January 1982 a final draft of the guideline was circulated by the accounting research committee to the petroleum industry, through the Canadian Petroleum Association and the Independent Petroleum Association of Canada, and to other interested parties for comment. None of the recipients expressed objections to the final guidelines. At the same time, government representatives, including the Minister of Energy, Mines and Resources, the Minister of Finance and the Minister of Consumer and Corporate Affairs (Mr. Ouellet), were advised of the steering committee's intention to finalize and issue the guideline.
The CICA then issued a formal accounting guideline dated February, 1982 which specified that PIP incentives should be accounted for in accordance with the CICA handbook, Section 3800. Basically, that section specifies that since petroleum incentives are expenditure oriented, they should be taken into income in the same manner as the exploration and development expenditures they support.
Some oil companies have made representations to the federal government as to the acceptability of a different type of accounting treatment. Discussions have taken place between representatives of the oil industry and the Minister of Energy, Mines and Resources which present the possibility of federal action to legitimize an accounting treatment which is contrary to the CICA position and thus contrary to generally accepted accounting principles. The dangers inherent in such actions prompt my remarks today.
One of the most basic of the generally accepted accounting principles is that revenues and expenditures related to those revenues should be matched as closely as possible. The February 1982 accounting guideline issued by the CICA defines the PIP grants as follows:
The petroleum incentives program provides for direct incentive payments for exploration and development to Canadian taxable and non-taxable corporations and individuals. The objective is to encourage oil and gas exploration by Canadian corporations and individuals.
Therefore, the petroleum incentives should be taken into income in the same manner as the exploration and development expenditures they support. On the other hand, the petroleum and gas revenue tax is a tax payable by corporations and individuals, including federal and provincial enterprises, that receive income from oil and gas production. It is levied on net operating revenue related to the production of oil and gas, including income from oil and gas royalty interests.
Petroleum Incentives Program Act
The controversy arises because corporations and individuals qualifying for the PIP grants may waive entitlement to the direct payment of the grant and instead receive the benefits by way of a credit against the petroleum and gas revenue tax. It is then suggested that since the PGRT is a current expense, the PIP grant should be included in current earnings by netting or offsetting the PIP grants against the PGRT in the income statement.
The remarks of my good friend, Gert Mulcahy, F.C.A., CICA accounting research director, are most pertinent and succinct. She said:
The proper accounting for government grants, including PIP grants, is largely a question of timing. PIP grants should be taken into income as the exploration and development efforts they finance result in earnings or the expenditures are written off . .. If such grants were to be taken into income immediately, the result would be current overstated earnings for affected Canadian companies and reduced earnings for those companies in the future ... Economic reality is not reflected if a grant for future benefit is included in income for the current year before the results of the exploration expenditures are known.
There is some suggestion that the oil companies are pressuring the minister to allow the "offset" or "netting" treatment. In my opinion, that is not a generally accepted accounting treatment and I would urge the federal government to support the CICA position rather than enacting an order in council legislating generally accounting principles. We can understand the oil companies's concern to present as favourable an income position as possible but I suggest to the government that this can be accomplished through the statement of changes in financial position included in the companies's financial statements.
As suggested in the accounting handbook, the method by which benefits are received should not affect the accounting treatment. It is also suggested by the oil companies that since the PIP grants were instituted by the federal government because of the elimination of the earned depletion allowances and the super-depletion allowances for frontier exploration, the grants should be allowed as deductions from income.
With respect, Mr. Speaker, that argument does not necessarily apply. No government can eliminate apples and replace them with oranges and then legislate the oranges into apples. That is what the government is trying to do.
That concludes my remarks as to the generally accepted accounting principles and the CICA efforts in this case. I now wish to turn my attention to the position of the Canadian Institute of Chartered Accountants and the possible repercussions of actions contrary to that position.
The Canadian Institute of Chartered Accountants and the related provincial institutes take a back seat to no professional body when it comes to professional research, professional independence and professional responsibility. My previous remarks make it unnecessary for me to elaborate upon the ongoing concerns of the CICA with respect to the need for professional research of a high calibre. This is a perfect example of the methods by which the CICA operates and it would be difficult for any profession to find fault with those methods. If the federal government is putting forth a contrary position, it should prove its point through the force of research

April 20, 1982
Petroleum Incentives Program Act
and logic and through discussion with the accounting profession.
As professionals, chartered accountants guard their independence jealously. Accounts have been lost because chartered accountants refused to bend to the client's interests. Confidence in that independence is reflected in the reported remarks of Henry Knowles, Chairman of the Ontario Securities Commission. He suggests the accounting profession is "a major defender of investor rights" and that if the federal government legislates generally accepted accounting principles "it will destroy the credibility of the accounting profession as a self-regulating and policing organization".
Professions earn respect by being responsible. The easy way out for the CICA would have been to bow to the federal government's wishes and adopt their ideas or accept an order in council legalizing the treatment of PIP grants as an offset to the PGRT. To the CICA's credit, they have not capitulated, but under the leadership of their president, Dennis F. Culver, FCA, they have continued to press their arguments through consultation.
We have recently had an excellent example of the dangers which arise, Mr. Speaker, when government fails to consult industry, labour, or related professions and occupations. The November budget is a perfect example of what can happen when bureaucrats try to legislate tax reform without consultation. The result is chaos. The CICA accounting research guideline is an excellent example of what can happen when a profession takes the initiative and demonstrates professional responsibility. The result is an independent standard which governments, investors, the profession and the industry can look to for guidance. If the federal government legislates a treatment of PIP grants in financial statements which contravenes CICA guidelines, then there are some very real problems ahead. Auditors may be forced to comment upon the treatment in their report, as to whether or not it is in accordance with generally accepted accounting principles, as they are known throughout the world. Securities commissions in Canada and foreign countries may require the CICA treatment, thus leading to investor confusion. The self-governing integrity of the CICA would be damaged.
I suggest to you, Mr. Speaker, that the state may legislate the relevant professional committees of a hospital to ensure a high level of medical competence, but the state does not tell a doctor how to remove an appendix; the profession determines that. The state may legislate legal aid for every accused to ensure a legal defence, but the state does not tell a lawyer how to examine a witness. That is a matter for the profession.
By the same token the federal government may, through this bill, legislate PIP grants; but it is the accounting profession through its committees which should determine how those grants are treated in financial statements.
I close, Mr. Speaker, by urging the minister to adopt the CICA position on this issue because it is in accordance with generally accepted accounting principles, and as an indication
of the respect of the federal government for the efforts of CICA to maintain generally accepted accounting principles and its professional independence.


Mr. Ian Waddell (Vancouver-Kingsway):: Would the hon. member permit a question, Mr. Speaker?


The Acting Speaker (Mr. Breau):: Would the hon. member permit a question?


Douglas Grinslade Lewis: Certainly.


Ian Gardiner Waddell: The energy critic of the Conservative party, the hon. member for Calgary Centre (Mr. Andre), wrote to the minister on December 21, 1981. In his letter he said that "the parts of the proposed bill dealing with the Canadian ownership rate and petroleum incentives program are long overdue and we would be willing to see two relevant acts introduced and dealt with on a priority basis".
I wonder if the hon. member would indicate why his party, having asked that they be brought forward on a priority basis and having said that they are long overdue, is now opposing the Canadian ownership rate and the petroleum incentives program?


Mr. Andre:: Tell the hon. member to read my speech.


Douglas Grinslade Lewis: Mr. Speaker, I tried to approach this subject as a Member of Parliament with some background in the accounting profession. My remarks were specifically directed to accounting treatment. I also commented that I would try to be non-partisan in my remarks. I think you will have noticed, sir, that there were no references to political positions being taken in my remarks.
The remarks of my colleague, the hon. member for Calgary Centre (Mr. Andre), were directed to the bills themselves, and I am perfectly willing to go along with his advice on that. However, what I tried to bring to the House was an understanding of accounting treatment, and an understanding of the importance of having an independent accounting profession. My remarks were simply based on that very important principle.


Mr. Stan Schellenberger (Wetaskiwin):: Mr. Speaker, it is a pleasure to have you in the chair today. I would like to direct some of my remarks to the hon. member's question as to why we oppose the bill in principle at this time. The hon. member for Simcoe North (Mr. Lewis) just spoke with eloquence as to the need for proper accounting procedures. I think we will find many oil companies in Canada will need to acquire many more accountants in order to deal with the petroleum incentives program and the Canadian ownership rate, and the difficulties which will result in the next couple of months as they try to sort out this bill as it passes through Parliament.
At the same time we have seen the tremendous impact the NEP has had on our oil and gas industry. The PIP grants were needed a year or a year and a half ago. They will now do relatively little to assist the industry to get back to the position it was in some while ago. Part of the problem is that by far the
April 20, 1982

majority of people in Canada do not understand the operations of the oil and gas industry. That is a problem which not only Members of Parliament and those people involved in the industry for 40 or more years have to face, but it is also a problem for the industry and its employees. They have over the years done relatively little in the way of educating the public at large as to how their operations work. Then when we are faced with the NEP, faced with a government which has used this industry as a whipping boy for everything that they find people mistrust about capitalism, it is very difficult to put their views forward as to the proper operation of their industry, what alternatives there were to the public Canadianization of the industry, and the kinds of incentives and taxation procedures necessary to take away some of the excess profits of the industry as world prices went up, and yet at the same time not destroy the industry.
The drilling industry, for example, was faced not only with the NEP, but at the same time it was hit with high interest rates. They were drilling at a very high rate and finding lots of natural gas, if not so much oil. They were then faced with an oversupply of natural gas with the resulting low cash flow because they could not market the gas. Then there were the uncertainties involved in a lack of agreement between the federal and provincial governments on taxation. In addition, there was the problem that it has taken over a year to define the National Energy Program by way of legislation. We now find a reluctance on the part of investors, domestic and foreign, to invest in the drilling industry and so we are faced with some very serious difficulties in obtaining the funds to get the drilling industry going again.
Now, in addition to that tremendous lack of knowledge which I spoke of about how the industry works, we have here in Ottawa a group of public servants and deputy ministers along with the minister who, I feel, at that time knew very little about how the industry evolved and how it had been so successful in finding oil and gas. In fact, through natural processes much of the industry was being bought and taken over by small Canadian firms.
That is the way we should have proceeded with a national energy program. But here we had a minister supported and pushed by his public servants to bring in his National Energy Program which has hurt the nation so badly. Think of what has happened to the goal of energy self-sufficiency. Think of the number of jobs lost, rigs lost, the severe damage to small companies, and the increasing number of small Canadian companies declaring bankruptcy. When the program was put in place it affected many more people in this country than the minister or his public servants who supported him could ever imagine. They had no idea of the effect their program would have on this country. Perhaps they were prepared to take the risks because of a feeling that Alberta was doing too well or that the western provinces were doing too well as far as oil and gas revenues were concerned. Maybe it was thought that with drilling taking place offshore on the east coast as well as the Beaufort Sea, some capital should be moved into those areas
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and by doing that we would have some success and it would all be worth it.
However, that has not come about. The people who have been involved in the industry and the provinces so affected by the oil and gas industry cannot trust this government to put forward an objective picture of the oil and gas industry. Many companies, provinces and Members of Parliament have recognized this. Television and newspaper ads are now being placed by the Independent Petroleum Association of Canada, the Canadian Petroleum Association, and other independent companies to show how industry works. These ads show the types of employment the industry creates and the opportunities available to young Canadians for work. There are opportunities to take over parts of companies to a large extent now foreign owned so as to achieve greater Canadian ownership. These kinds of ads and education procedures are continuing. At the same time people are being told about the devastation which has taken place in the industry.
Those of us who represent areas which produce oil and gas are receiving hundreds more calls from people who are being laid off. We are receiving calls from companies that just a year ago were looking at a bright future but are now bankrupt. We realize that we have to do a lot more to educate our colleagues about how this industry works. We have to get across what kinds of alternatives there are in order to see the vision that we wish as far as Canadian ownership is concerned. At the same time we must not create the dilemmas now being faced in the oil and gas industry.
There are alternatives to this bill which introduces the Canadian ownership rate. Some alternatives were put forward in the 1979 budget that was defeated. In it an offer was made to Canadian citizens to invest in oil and gas companies. In return some capital gains relief would be given. There was also a provision for directing the incentives program to the small Canadian-owned oil and gas companies are respecting the taxation procedures to be used as far as profits of the large companies were concerned. Those were the alternatives that were available, but instead the oil industry was used as a whipping boy by this government. It was used to foster Canadian nationalism in the sense of nationalization of companies run by Canadian governments and Crown corporations.
In reply to a question yesterday, the minister in defence of the National Energy Program said that in the last year we have gained 6 per cent more Canadian ownership. That is probably true. If one looks at the acquisitions of Petro-Canada and Dome Petroleum, some large companies were bought out. But what was the cost of doing that? Canadian taxpayers have put over $1.5 billion into Petro-Canada. Petro-Canada itself has borrowed in the billions of dollars in the private sector to buy out some foreign-owned oil companies. They have not found much more oil. All that has been accomplished is the purchase of more oil already discovered.
Another cost of the National Energy Prgram was lost jobs, about which I will go into detail in a few minutes. Also as a

April 20, 1982
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result of this program we have seen the loss of service companies and drilling rigs. The program has also caused the bankruptcies of companies. This program has contributed to the high interest rates that we are facing now as much money flows out of Canada. It was necessary to attract American dollars into Canada in order that we could pay our debts to other countries, and for purchasing offshore oil which had to be paid for in American dollars. Our interest rates had to be raised to attract money back into Canada. We have caused severe damage to the small Canadian-owned oil and gas companies and to the people who serviced those companies in many communities across the nation. Those are the costs of this National Energy Program.
Mr. Don Pack, President of the Canadian Association of Oilwell Drilling Contractors, which association comprises small Canadian-owned companies, has said:
The replacement value of the rigs that have left Canada in the past year exceeds $1 billion. You might equate this loss and the impact on a community, to the loss of one hundred $10 million manufacturing plants, each directly employing 52 people. The difference in operating levels this year and last in the drilling industry alone has resulted in a direct loss of employment for over 8,000 skilled rig crew members.
For 1982, we see a further erosion of the Canadian drilling and service fleet with increasing loss in employment. During 1982 approximately 6,000 wells will be drilled in western Canada, a decline of 33 per cent from the peak established in 1980 and by mid-summer less than 200 rigs will be active. For a country importing approximately 200,000 barrels a day of crude oil from foreign producers at a cost of $8,000,000 per day, this is a tragedy.
I think that figure of 200,000 barrels a day of crude oil is rather low. The figure is more like 400,000 or 450,000 barrels a day. Mr. Pack continues:
The energy balance in the world is finely tuned and vulnerable to disruption and price shock. Disruption in Canada's supply of oil, before we are selfsufficient, is a sure bet.
The following statistics are as a result of the National Energy Program. Drilling activity in Canada is down 25 per cent in 1981 compared to 1980. In the United States in the same period drilling activity was up 26 per cent. A record 78,884 wells were drilled in the United States. That figure increased by 16,000 from the previous year. On the other hand, Canada's figures were down substantially. Our well completions totalled 7,183, down from 9,481 in 1980. Development drilling was down 28 per cent to 4,000 from 5,556 in 1980. Total metres drilled confirmed this decline. The number dropped from 10.27 million metres in 1980 to 7.64 million metres in 1981. This is a decline of 26 per cent.
Since the announcement of the National Energy Program in 1980, 226 drilling rigs have left Canada. At the end of 1981 only 52 per cent of Canada's total of 443 drilling rigs were active and the activities of many seismic crews were down 25 per cent. Many of these people were active in my constituency and in the constituencies of my neighbouring Members of Parliament in Alberta and Saskatchewan.
There are many examples of Canadian entrepreneurs who are suffering the consequences. For example, there is Raydan Transport in Nisku. Statistics do not mean a lot to many people until they are translated into human terms. I have seen the human casualties of the National Energy Program in my
riding. Many companies in a once thriving and prosperous area are starting to sell and move rigs to the United States. Many of them are throwing up their hands and giving up, which is helping the Western Canada Concept party.
I should like to cite an example of something which happened approximately two weeks ago. It shows the effects of the National Energy Program on a trucking company which was once prosperous. Raydan Transport of Nisku was a major rig moving company. It began liquidating $8 million worth of equipment assets. It received a little over $2.6 million for those assets, if I have read the bill of sale correctly. Bill English, the president of the company, said that this action was taken as a result of taking a good look at what was happening to the trucking industry. Until last month Raydan operated 75 trucks and back-up equipment and employed over 100 people. Now it expects to need only five employees and will only operate two to five trucks in 1982.
Why has the company lost over $1 million in the last 18 months? Its problems started with the NEP. Before that Raydan would move anywhere from 150 to 200 rigs per year. This dropped to only 35 rigs in 1981. It obviously had the equipment but the work was not there. On top of that situation, there was an increase in the cost of fuel, skyrocketing costs of equipment and labour, maintenance costs and high interest rates. These factors made the prospect of carrying on until there was light at the end of the tunnel very unattractive. In this instance we are looking at a company which is folding. Approximately 95 people will be out of work as a result of misguided government policy. This is happening all over my riding. The Nisku Industrial Park which was based on oil and gas activities has lost many people and firms in the last year.
What are some people saying in regard to the entire situation? One answer came from the provincial government which brought in a royalty reduction plan. It is intending to rollback royalties. It is an answer to many people involved in the industry. Now they can come to the provincial government and say that they desperately need some assistance until changes are made in the federal government. The provincial government brought in a rollback in royalties which will have an effect upon the industry. Most of the money acquired by the rollback in royalties will be needed to pay off debts which have accumulated in the last 1.5 years. We may not see the activity which is necessary to bring back the oil and gas industry of Alberta.
This morning I spoke with some small businessmen in my riding who are involved in the industry. They said that there has been a great improvement in attitude because of the movement of the Alberta government in rolling back royalties, but they warned that it was not enough. If complementary action is not taken quickly by the federal government as far as the taxes in the National Energy Program are concerned, conditions will revert to where they were beforehand.
As I said, in the last year some huge debts were built up by many of these companies. Many small Canadian companies are involved in the drilling and servicing of the oil industry and do not have much royalty income. As a result, these companies
April 20, 1982

which are facing bankruptcies and laying off employees will not obtain much benefit from the rollback of royalties. Additional incentives to the oil industry are needed. I suppose some will be included in the petroleum incentives program, but much more will be needed, especially as world oil prices and consumption drop. Also we must remember that there is the huge shut-in of oil and gas in Alberta and Saskatchewan at the present time. There is a need to help some companies as far as taxes are concerned if we are to remove some of the suffering from the oil industry. They are truly Canadian companies. They are local, they are Alberta, Saskatchewan and British Columbia operations, yet they are being stifled by federal policies which claim to promote Canadian ownership. This points out the grave contradiction between the philosophy of the National Energy Program and its actual effect. The government must look very seriously at making some changes to get these small operations back on their feet and producing again.
According to Wilfred Gobert of Peters and Co. Ltd. of
Calgary:
The retroactive provincial royalty tax credit, imminent Alberta petroleum incentive payments and gas take-or-pay proposals by TransCanada PipeLines Ltd. of Calgary will all mean additional money for the industry this year.
But like other analysts, he expects that the industry will use the additional funds to pay off debts first before rushing into more exploration and development spending. Mr. Gobert went
on to say:
The Alberta royalty changes could mark an end to the slump in exploration and development this year. We may have hit bottom ...
The worst of the exploration and development activity could be behind us.
It will need an extra push, and that push can only come from the national government in the form of some reduction in high taxes.
We are feeling the downturn in that industry. We are starting to feel it more than ever 1.5 years after the National Energy Program. The cash flows of larger companies are down between 25 to 40 per cent. There is some belt-tightening which is being felt not only by workers but by many executives. Gulf, Turbo Resources and Dome Petroleum have laid off over 1,150 people in the last week. Even Petro-Canada has felt the pinch and is finding that it must release some of its employees. They are all facing as well a tremendous paper burden which results from the bills before the House and the extra accounting procedures being put in place because of federal and provincial programs.
It was interesting to read the words of United States Congressman John D. Dingell who said that this year more than 12 per cent of the oil and gas exploration in the United States will be conducted by Canadian companies, many of which are from my area, using workers and equipment that have shifted drilling to the United States. If past experience is any indication, they will not return to Canada until the government alters its course. In short, the government's policies are having the exact opposite effect to their stated purpose. Those policies have already shown themselves to be actually injuring the Canadian economy, driving venture capital from the nation
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and impairing the strength of the Canadian dollar. That American congressman is seeing the same effects of the National Energy Program as we are seeing on this side of the House. They are reaping the benefits of our expertise and our drilling.
Although we may not have had ownership of the oil industry when the National Energy Program was introduced, we did have control and many of us wonder why we did not use that control to determine the kind of taxation policies we could have put forward so as to use the abundant moneys which flowed from that industry to provide incentives to the small oil companies and start the megaprojects operating in Canada, which would have provided employment and spinoff benefits for thousands of Canadian companies and Canadian workers, instead of taking the gamble which the minister was obviously prepared to take when he introduced the National Energy Program. That gamble, which was to divert money from the prairie provinces, Alberta and British Columbia to provide the needed incentives for projects in the north, on Canada lands and on the east coast, should not have killed the industry which was providing the work and the oil and gas for Canada at the same time. That gamble may not have paid off in terms of oil self-sufficiency by 1990.
The Ocean Ranger, which tragically sank off the east coast, has put back the drilling program in that area for some time. The optimism that many of us felt regarding the Beaufort Sea did not materialize during this year's testing. Instead of a well which was estimated to produce some 30,000 barrels a day, it only produced 3,000 barrels a day. It is still our belief that there are substantial supplies of oil and gas in those areas which we should pursue with all effort, but at the same time we cannot kill an industtry which has been so successful for so many years in this country.
We need a response to the difficulties these companies are facing. In Alberta we presently have shut-in oil amounting to approximately 220,000 barrels of crude oil per day. Why is that oil shut in at the present time? Our federal government has done such an excellent job of negotiating offshore contracts that we are importing Mexican and other foreign crude oil at a rate which forces us to shut down our wells in our own country. This causes a deterioration in the amount of cash flow for those companies and causes further difficulty to that industry even beyond the National Energy Program.
I do not know how I can emphasize any more the effects of the devastation visited on our oil and gas industry by this National Energy Program and the actions of this government. If we look at the unemployment statistics in Alberta, a province that has always had the lowest unemployment in Canada, we discover that after running at less than 4 per cent throughout the 1970s and at 3.5 per cent in 1981, today we are looking at an unemployment rate of 6.7 per cent in that province. That is one of the devastating effects of this program.

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It is impossible for us to support this bill which is before us now because it will not assist the industry in the manner it needs to be assisted, Mr. Speaker.


Hon. Don Mazankowski (Vegreville):: Mr. Speaker, I too would like to speak to this particular piece of legislation. I would like to begin by saying that we in Canada live in very serious and troubled times. A good portion of the difficulty we are experiencing is a direct result of the National Energy Program.
I think that the most disappointing news we Canadians received today was when we read in The Globe and Mail that the Prime Minister (Mr. Trudeau) will not retire at the present time while there still is an ailing economy. Most of us found that to be very disappointing news. Many of us thought that would have been one election promise that he would have upheld. But if he fails to fulfil that promise, then I cannot think of one single election promise which he made during the 1980 election campaign which has been upheld. I can tell you, Mr. Speaker, that this remark in the newspaper will add further to the strains on confederation and the difficulties in our economy, to the alienation and division which he has already created in this land.
I cannot think of a more hypocritical statement than that the Prime Minister cannot leave because of an ailing economy. In my view-a view which I am sure is shared by others as well-the Prime Minister has clearly wasted his mandate in dealing with the economy. He has chosen instead to address more mundane issues and has been more prone to pick fights and argue with the provinces and industry, to divide and create chaos rather than deal with the real bread and butter issues in Canada. Those issues concern jobs, interest rates, housing, energy self-sufficiency and creating a healthy and stable economic environment. He has failed to address the real problems which has affected this nation.
According to the review which was cited by various members on my side of the House which reminded the country of the conditions which existed when the Prime Minister took office, unemployment was 4.5 per cent. Today, unemployment is over 9 per cent, an additional 750,000 people unemployed. When he took office inflation was 4 per cent; today it is 11.6 per cent to 12 per cent. The current account deficit was almost in balance when he took over while today it is close to $7 billion. Bank interest rates were IVi per cent. Today, they are 15.34 per cent. At the time he took office the conventional mortgage rate was 9.2 per cent. It is I8V2 per cent today. An average house cost $21,000 in 1968 and the price today is $78,000. With respect to the post office, we could send a letter for 6 cents; today it costs 30 cents. The growth of the government has risen from 360,000 person-years to 500,000 person-years. The gross national debt was $32 billion in 1968; today it is $135 billion. The value of the dollar was 93 cents U.S. in 1968 and it is 82 cents today. It is a very dismal record and the fact that the Prime Minister will continue in office will clearly downgrade confidence in Canada and create even more anxiety and sense of hopelessness and despair.
The fact is that we live in the most difficult times we have experienced in 35 years. These hardships do not only relate to interest rates. The price of fuel would also be an interesting
comparison. We know that fuel prices have doubled in the last two years despite all those grandiose promises that fuel prices would be kept down.
But what concerns Canadians the most is that there is a feeling of hopelessness and despair in the country. Dreams are being shattered. People who have invested a lifetime of work in their farms and businesses are having their dreams shattered. Their investment of years of hard work, commitment and dedication is going out the window. There is also a fear that the worst is yet to come. The greatest improvement in confidence would be if the Prime Minister would quietly leave the scene. That action would create the greatest upturn in terms of individual confidence, economic confidence and, I am sure, in terms of international confidence.
Coupled with this economic condition which exists in Canada, we all know that there is a very deep-seated division in Canada. It is unfortunate that during the course of the last ten days when we were to have been celebrating the patriation of our Constitution, and while there was a massive celebration on Parliament Hill, there was bitterness felt throughout the country. There is not the unanimous rejoicing there should be. There is not that spirit of enthusiasm and euphoria that we experienced in 1967 during the year of our centennial celebrations. The fact is that there is deep division in this country. There is bitterness.
Much of this has been the product of this government. For example, in western Canada there is a feeling that this government governs one half of the country while it attacks the other half. That is why a separatist movement is making great inroads in western Canada. There is a separatist movement in Quebec. The statement of the Prime Minister to the effect that co-operative federalism is dead is not helping matters either, because it is part and parcel of his style of unilateralism.
I started out by saying that we are in difficult economic times and that one of the problems is directly related to the National Energy Program. There are some other reasons, and I would simply like to cite them as background to the debate on this bill. As I said earlier, the Prime Minister and his government have not really addressed the very important and fundamental issues facing this country; rather, during the last two years the government has dealt with the Constitution and other matters. There has been heavy emphasis on bilingualism, on metric, on gun control, on North-South dialogue, on building emergency civilian internment camps and things of that nature. In the meantime, the economy has been floundering.
There has also been a policy of confrontation. We know the attitude of the Prime Minister with respect to his unilateralist approach to patriation of the Constitution. We know of his approach with regard to the oil pricing agreement with the provinces of Alberta, Saskatchewan and British Columbia and of the threat that he would impose the overriding authority of
April 20, 1982

peace, order and good government to force an energy pricing agreement on the provinces whether they liked it or not. We know that the National Energy Program has been a product, not of consultation and co-operation but, rather, of unilateralism. We witnessed the decision with regard to VIA Rail. With a stroke of the pen, 20 per cent of VIA Rail passenger services were dismantled. We witnessed the actions with regard to the changes to or the emasculation of the Crowsnest Pass freight rates. While there has been some discussion, the Minister of Transport (Mr. Pepin) has suggested-


An hon. Member:: What was your position?


Donald Frank Mazankowski: Well, we have some life over there! We hear the New Democratic Party is now trying to bail out, before the election, the Premier of Saskatchewan who, before the election campaign was very eager to get on with the debate on the changes to the Crowsnest Pass freight rates. That is clearly on the record. A little document was published out in Saskatchewan entitled "Eating Crow". It cites all the very positive statements of Premier Blakeney concerning the Crow and his support for the Minister of Transport's proposals to change the Crow. It is no wonder that the NDP is losing ground and support in western Canada because of the hypocrisy of the positions it takes. It takes one position here and another position out there.


Some hon. Members:: Oh, oh!


Donald Frank Mazankowski: I will not be sidetracked. They will be licking their wounds on Tuesday.
The fact is that the Minister of Transport said: "If there is no consensus and if you cannot agree to do it my way, we will do it that way anyway." That is the kind of unilateralism which has not augured well. It does not provide the kind of harmony and good spirit that is traditional and necessary in order for this nation to function.
The third reason we are experiencing these difficulties is the fact that we have a national economic policy based upon the redistribution of wealth rather than upon the production or generation of new wealth. Essentially, we have experienced zero growth over the last five years. There have been no incentives for the private sector or the producing sector to get on with the job of increasing the size of the national pie. If we continue along in that direction, we will not be able to provide indefinitely the kind of support and resources necessary to ensure medical care, old age pensions and assistance to the disabled. We will not be able to provide those kinds of services which would allow Canadians, who are less fortunate than those able to produce, to live a dignified lifestyle. The fact is that we have suffered zero growth and we cannot continue to support those programs under an economy functioning at that level. The only growth we have seen over the last few years has been the growth in the labour force in government. Quite frankly, about one quarter of the total labour force today is employed by some level of government. This is evident, as 42 per cent, 43 per cent or maybe even 44 per cent of the gross
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national product is now being handled by some level of government. Of course, we cannot indefinitely continue along that path without facing some very serious difficulties.
The fourth reason we are in this period of economic stagnation and difficulty is that government policy has developed along the lines of an economy which is becoming more centrally controlled and dominated. It is a policy which is reflected and endorsed, moreover, by the recent economic development policy outlined in the budget papers. It is quite obvious that, rather than opting for tax incentives and the kind of fiscal regime which would encourage production and growth, a situation has been created in which all the resources and revenue will be recycled through government. The government will decide who the winners and who the losers will be. The government will provide the subsidies and grants and it will pick the winners and the losers. It will establish who will get a grant and where that grant shall be located, whether it will be A, B, C or D, and whether it will be located in region X, Y or Z. However, the government will decide who the winners and losers will be. If we continue to do that, I suggest we will stymie the creativity, productivity and innovation which is so necessary to maintain the growth and generation of wealth we need in this country. Furthermore, I suggest it will certainly stymie our ability to maintain the economic freedom that we want in this country. If we do not have economic freedom, there is no way we can have political freedom.
In my humble estimation, a functioning democracy cannot exist in a controlled economy. We note, with interest, the difficulty that the New Democratic Party is encountering in the province of Saskatchewan. It talks about its family of Crown corporations, some 23 Crown corporations. It refers to it as a big family. I believe the people of Saskatchewan will soundly reject that philosophy. Freedom is the issue-political and economic freedom.
We have a problem in this country which the people of the province of Saskatchewan have witnessed. The people of Saskatchewan have recognized that they can no longer tolerate the years of socialism, the years of government encroachment and the years of government interference which have stymied their economic freedom. That is the real issue in the Saskatchewan election. The people of Saskatchewan own the land. They do not want to be tenants in their own province. The government of Saskatchewan owns some two million acres of farmland.


Some hon. Members:: Oh, oh!


Mr. Kempling:: You've got them upset.


Donald Frank Mazankowski: Your Honour can see that hon. members are as upset as the Premier of Saskatchewan. He has acknowledged the fact that the NDP is losing. He says he thinks his party can still get a majority. I think all of its members will be in for a great surprise when they count the votes on Tuesday. However, that is a tribute to the people of Saskatchewan, because the people of Saskatchewan will be the winners, not the Conservative party. The socialists will be the losers. They
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should be, because they are born losers. That is where they belong.


Some hon. Members:: Oh, oh!


Mr. Regan:: Oh, I cannot agree with that!


Donald Frank Mazankowski: The National Energy Program is part and parcel of the issue of which I speak, the continuing government encroachment, the centrally dominated philosophy that government can make the best decision, or a government organization, structure or board can make the best decision.
I want to say this very bluntly because I have witnessed the effects of the National Energy Program. My colleague from Wetaskiwin (Mr. Schellenberger) talked at great length. He lives in an area that has been both directly and indirectly affected negatively by the effects of the National Energy Program. The small industries, the small entrepreneurs, have been hurt by this program. The National Energy Program will go down in history as the man-made disaster of the eighties; there can be no question about it.
The NDP support this program. They support the principal aims and objectives of it notwithstanding the fact it has destroyed the oil industry in Saskatchewan. They are so silly, stupid and doctrinaire in terms of attitude, they have not looked at the effect of the National Energy Program on the small entrepreneur, small industry, the welder or the fabricator, and they support it.
What freedom is there for those who are employed by these small companies and have lost their jobs? The program has destroyed that industry. It has not hurt the multinationals. It is hurting the small Canadian firms, the truckers, welders, cat operators, construction workers, service workers, rig hands, drillers, those who build the fences and rights-of-way. They are the ones who are affected. They are all Canadians who work for Canadian companies.
As my colleague said, this program is working in reverse. It is destroying the viable Canadian entreprise that has been associated with the oil industry and has been so successful. Exploration was down 25 per cent to 30 per cent in 1981. It will be down another 10 or 15 per cent in 1982. All of this is in the name of Canadianization. It is not working. It is doing directly the opposite. This is really nationalization.
I listened to a couple of NDP members who spoke last night. They are not concerned about Canadianization. Their bottom line is nationalization. That is what they want. If it walks, breathes or moves, they nationalize it. If it produces, by gosh, they nationalize it double! It just does not make sense.
At the same time, the results of this policy are forcing Canadians to pay for imported oil at the rate of 500,000 barrels a day while there are locked-in supplies in Saskatchewan and Alberta. It is estimated that by the end of April, some
300,000	barrels a day of surplus oil will be locked in, not being produced in Alberta. In Saskatchewan, some 50,000 barrels a day are locked in.
The wells are shut down. People are laid off. We are bringing in oil from OPEC countries, Venezuela and Mexico at $40 a barrel. The taxpayers are subsidizing at the rate of $17.32 a barrel while $23.50 a barrel oil is left in the ground. Our work people are being dislocated. They are out of jobs. Businesses are being closed. Foreclosures and bankruptcies are occurring.
We wonder why there is alienation in western Canada. The NDP will have to answer for it. They are part and parcel of the National Energy Program. They put this government in office and are continuing to keep it there. Let them answer the people of Saskatchewan and the rest of western Canada. There are massive lay-offs in the industry. It is not hurting the multinationals. I will tell you what it is doing, Mr. Speaker. It is further eroding our balance of payments, weakening the dollar, raising our interest rates, undermining investor confidence, creating further bitterness in this land and further division. I quote from an article in the Edmonton Journal:
It has become a conventional wisdom in Canada's capital that private industry is essentially in the ripoff business and cannot be trusted. Only when industries fail and actually lay off thousands of workers do they gain credibility in Ottawa. If industries succeed, they attract suspicion among academic mandarins who see them as ripe for tax-picking.
I could include my socialist friends to my left in that category-
And they attract the political sharks who smell money where it is politically cheap to get.
That outlines the current philosophy of this government. It certainly is the philosophy that is shared by those birds over there who have never had to go out and meet a payroll or produce anything. They have been basically living as parasites off the fat of the land.
What has the National Energy Program done to a constituency like mine? In two weeks in the community of Vermilion, a small fabricating firm, Bird Oil Limited, laid off 20 people. They were in the business of fabricating storage tanks for oil. Because of the shutdown of the wells, these 20 people were laid off.
In November, 1981 in Wainwright, Alberta a small firm called Jurassic, according to an article in the Star Chronicle of November 25, was quitting Canada. I quote from the article:
"It was the hardest thing I've ever had to do."
So says Jim Voll, who laid off 30 employees here and will take Wainwright-based Jerassic Well Servicing's remaining rigs south to Oklahoma.
The decision was taken in the light of federal and provincial policies which continue to destroy the small operator, he said .. .
Government-induced depression in the oil industry here has meant there's just too little work here to remain in business, he says.
The Wainwright-based company had operated ten rigs from here, but sent six to the Oklahoma oilfields last spring. The final four will follow by the new year, Voll says, and the Wainwright office closed for good.
That is what is happening. In February, four Lloydminster firms went into receivership, displacing some 150 jobs. Petroserv Management, which also owns and operates Weldex Machine Ltd., Midway Oilfield Services Ltd. and G and W Oilfield Services Ltd. is now in the hands of a receiver. Why?
April 20, 1982

Because of the shutdown of the oil wells and the general depression in the oil industry.
There are hundreds of others, particularly throughout the heavy oil-producing area. These wells are very labour-intensive. They produce 20 to 30 barrels a day. This government with its buying policies would rather buy $40 a barrel oil from Venezuela and the OPEC countries and leave our oil shut in. These people are being forced to close their businesses and lay off people.
We all know of the number of rigs which have left this country; it has been cited many times. Between 235 and 240 oil drilling rigs have left Alberta and Saskatchewan to find work in the United States-in Oklahoma, Wyoming, Texas and other places. In addition, between 100 and 150 service rigs, each employing 40 to 50 people, are gone. It is like little factories being closed in western Canada. I wonder what the people of Ontario would say if they saw this happening before their eyes because of a deliberate government policy. It is a real tragedy that this is being allowed to happen in Canada.
Let us look at some other facts. This is what Bralorne Resources Limited said in its third quarter 1981 report:
The strong growth trend in our United States operations continued while Canadian operations struggled as drilling activity in the third quarter was down by more than 50 per cent from the same period last year. If anything, the decline recorded in the third quarter exceeded that of the previous quarter. ... As a result, the United States percentage of total revenues has increased from slightly more than 50 per cent in the first three quarters of 1980 to approximately 65 per cent in the same period this year ...
Reflecting our policy of increased United States involvement, more than 80 per cent of our 1981 plant expenditures have been on United States facilities.
[DOT]	(1620)
While United States expenditures this year have more than doubled, Canadian expenditures have been halved as a direct result of current pricing and market conditions.
Let us look at the Houston Business Journal, a very interesting item, Mr. Speaker. It is headlined "Canadian Connection: Energy, Money, Politics Blur Borders". It points out that since the passage of the National Energy Program $2.5 billion of Canadian investment capital has found its way into the United States and much of it into the area around Houston.
In the same paper there is a statement from a Mr. Joe Tondue. He is quoted as saying:
"Canadian money is moving in droves to Texas. 1 have joint ventures with three Canadian groups right now where they are paying all my costs and promotions in advance."
Then there is another man, Philip K. Sywden, who is quoted as saying:
"We have seen quite a bit of Canadian money because of our high profile in Western Canada."
He goes on:
Hundreds and hundreds of people who have invested left Canada and have invested in the United States. At least two dozen Canadian companies have opened up branch offices in the area around Houston.
Again, Mr. Speaker, I have another quote. It is from Energy Forum which substantiates the case that I am attempting to make. It says:
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-investors have come to believe that Canada simply cannot be trusted ... The record shows that development of energy resources in Canada is falling off, the Canadian dollar is weaker, Canada's economic growth is also being retarded and jobs are being exported to the U.S. All this means a reduced standard of living in both countries (although less so for the U.S.) and a serious injury to a friendship unique between nations.
It goes on to say:
Joseph E. Seagram & Co. has already refused to repatriate upwards of $4 billion in investment capital to Canada because of the Canadian federal government's policies. This year more than 12 per cent of the oil and natural exploration gas in the U.S. will be produced by Canadian companies using workers and equipment that have shifted drilling to the U.S. and, if past experience is any indication, they will not return to Canada until the government alters course.
In short, the Ottawa policies are having the exact opposite effect of their stated purpose.
Mr. Speaker, we have capital, men, equipment, machines and expertise flowing south of the border. We need that investment capital here, we need that expertise here, we need the job opportunities here. We must stop that flow; indeed, we must reverse that flow of Canadian investment capital south of the border. We must keep that investment capital here in Canada, invest it in Canadian projects and in Canadian enterprises, so that we can preserve the kind of Canadian economic independence that so many people in this House talk about, but who will really not back it up with positive policies.
The fact of the matter is that even Mr. Gorse Howarth, our distinguished head of the Foreign Investment Review Agency, is quoted in an article in the Toronto Star of April 1, 1982 as saying:
Despite a dramatically high level of foreign ownership and control of Canadian industry, Canada has to drum up more business abroad if it wants to survive.
He talks about the need for additional investment capital in this country if we are going to be self-sufficient in energy and able to do those kinds of things which will provide a reasonable and decent standard of living for all Canadians, young and old included.
What about the consumer in all this, Mr. Speaker? We all naturally have to be concerned about the consumer, but the fact of the matter is that today, while our energy prices and our gasoline prices are on the increase, prices in the United States are on the decline. Ours are going up and theirs are going down. In the process, the consumer is being shafted.
Based on statistics which I have before me, the national average for the price of gasoline in December 1979 was $1.14 a gallon; that is the national average right across the country. As of March, 1982 it is exactly $2 a gallon; it has almost doubled in two years. That happened during a campaign which was to have promised cheap energy. As a matter of fact, the price for 1980 was to have been kept below 14 cents. We know that the prices have now doubled. So much for that promise as well. The consumer is indeed being ripped off.
Let us look at the producer. The farmers of Canada are now paying 60 cents a gallon for the diesel fuel that they burn in their tractors and in their combines. It has always been traditional and customary that the producers of food get some fair shake, some exemption, because they are not in a position to pass their additional costs along. The farmer pays 60 cents a

April 20, 1982
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gallon when he fills up his tractor. That money goes into the federal government's coffers. I call that a massive federal government tax rip-off. It should be examined and the tax be reduced. If we are going to pursue a cheap food policy as this government has said, the farmers of Canada must get a break, and a break they should receive.
What about natural gas prices? They too have doubled. In western Canada we use natural gas to heat our homes and we have seen a doubling in the price of our fuel bill. Natural gas has a direct impact on the price of fertilizer. Our fertilizer prices are up by $25 to $40 a ton, and that will increase to about $70 a ton at the end of the energy pricing agreement, because of the increase in the price of natural gas. And the price increase in natural gas is composed, to the extent of 75 per cent or 80 per cent, of federal government taxes.
There you have it, Mr. Speaker. No one has benefited from the National Energy Program-not the people who work in the industry, the people who own the industry or the people who consume the product. It has been an absolute and total disaster and an absolute and total failure; and, above all, it has been a bureaucratic nightmare, as my colleague from Calgary Centre (Mr. Andre) pointed out in his original remarks. The fact of the matter is that the regulations, the myriad of forms and the unwieldy discretionary powers that are given into the hands of bureaucrats in terms of administering this particular program will make it absolutely nightmarish and nothing more than confusion and frustration.
When this bill was introduced by the Minister of Energy Mines and Resources (Mr. Lalonde), he called it the climax of all the measures having to do with Canadianization. He talked about it being the ultimate in achieving all of those things that unanimously Canadians had endorsed during the election campaign of 1980 and continue to endorse.
All I have to say to you, Mr. Speaker, is that if that is the case why are we experiencing the massive exodus of men, equipment, machines and capital out of this country? Why are we experiencing the bankruptcies, the foreclosures, the shutting downs, the dislocation of employees? Why are we experiencing this frustration, this sense of alienation in western Canada? It is because it is seen that the National Energy Program is a direct attack upon the resources of western Canada. It is not achieving the goal for which it was intended. It is destroying a once proud and once viable Canadian energy industry.
This hodge-podge, bureaucratic nightmare that is supported by the NDP is going to continue to frustrate and destroy until it is withdrawn or fundamentally changed. Hopefully, with the common sense and good, sound judgment of Canadians across this country, we may have to wait only a year or 18 months for an election. I am sure that the resourcefulness and the enterprising spirit of western Canadians will be able to live it through somehow until we can turf out this outfit, that Liberal rump over there. If we can turf them out at the same time, we can get on with the job of building a Canada that is based on equal opportunities. We want to have a Canada in which there is fairness and equity in all regions and for all individuals, a Canada which will be governed equally from region to region
rather than attacked at one end and favoured at the other. If we can survive until those changes are put into effect-and I am sure we can-there will certainly be better days ahead.
However, for the time being we have no choice but to condemn this measure because of the government's record in the past. We have no hope that this minister will change and see that he is out in his reckoning. This government is simply determined to forge on a course which has been destructive, and all we can do is point out, on behalf of our constituents and people in the industry, the fallacy of this particular measure. We hope there will be better days ahead, and I am sure there will be because they cannot get much worse than they are at the present time.


Mr. Dan Heap (Spadina):: Mr. Speaker, I rise in opposition to Bill C-104 principally because quite unnecessarily it would give about $6.5 billion to the people in Canada and elsewhere who need it the least and will do the least good with it. The plan over the next five years is to give $6.5 billion to the private oil companies which already have received far too much by way of subsidy from Canadian working people. In this I am speaking particularly for the people of Spadina. There are no oil wells in Spadina, but there certainly are places at which the oil companies are making money. They get their money from the thousands of working people in Spadina and in the rest of the country. Those are the people who are subsidizing the oil companies.
Over the last few years oil companies have committed obvious rip-offs. The previous speaker whined about companies being accused of ripping off, but it has been established by the Bertrand inquiry that oil companies were guilty of ripping off about $12 billion from the Canadian public through rigging the prices of oil products.


Mr. Parker:: The Conservatives support that.


Daniel James Macdonnell Heap: Of course. The Conservatives support that as heartily as the Liberals. Over about 15 years oil companies ripped off at least $12 billion and, according to the Bertrand inquiry, they are continuing to do the same thing. These are the companies we are now asked to entrust with another $6.5 billion. These are the industries which boosted their assets from about $14.5 billion in 1973 to $54.5 billion in 1980. In seven years those assets multiplied four times, and the industry is complaining that multiplying assets four times in seven years is not enough.
In spite of the whining we hear from the far right in this House, according to government estimates, in general the prices and tax policies have provided the industry with the cash flow necessary to finance its expenditures. This means that the oil consumer and the Canadian taxpayer have financed virtually all of the substantial expansion of this industry. This continued into last year. During the first six months of 1981 a few oil companies took over several other oil companies, to the tune of $5 billion. That was only half a year's worth. At the
April 20, 1982

end of that about 70 per cent of the industry was still foreign owned and 70 per cent was still foreign controlled. So much for the Canadianization program of this government.
The government has not seriously tried to put the industry under the control of the Canadian people. It has simply sought to benefit a few individual Canadians by having Canadians buy the industry a second time after it had subsidized the industry over the past decades. The government has allowed the purchase of Canadian control by using Canadians' money against themselves. Having allowed all this to happen at the hands of foreign owners, the government would now like to force Canadian workers to pay for the industry again in order to buy it back. This is not for Canadian workers who are paying the taxes, but it is to buy the industry back for some hungry Canadian entrepreneurs who would like to be little local Rockefellers.
For example, over the past four years the tax concessions to this sector were worth a total of about $13 billion, yet during those years the industry paid only about $5 billion in taxes. In other words, the industry received back better than two dollars for every one dollar it paid in taxes. That is the kind of subsidy the industry has been given by all the other Canadians who are not owners of the oil industry.
The effective tax rate proposed for the oil industry would be about 10 per cent; that is to say, 36 per cent but down to 10 per cent after we knock off all the gifts the government has been giving and will give increasingly to oil companies. This compares with the married taxpayer with two children and an income of $25,000 who has to pay 18 per cent. If a company earns several billion or several million, it pays only 10 per cent in reality, and the people to the extreme right are complaining that oil companies are being hard done by.


Gordon Edward Taylor: We are complaining that the people are being hard done by.


Daniel James Macdonnell Heap: If the tax concessions were ended, the federal government would be about $4 billion better off, and we could do something useful with that money for the people of Canada. We could restore the nearly $1.5 billion which was just chopped out of the annual payments from the federal government to the provinces. We could extend aid to post-secondary education, which is less in this country than it is in the countries with which we have to compete industrially. We could extend the daycare, which certain cabinet ministers keep promising every couple of months they will do but do not do it. We could extend pensions, which they also promise every two or three months to do without doing it. Those would be real benefits to the working people of Canada, but we do not get them because they are carted away by multinational oil companies.
There is another way of reckoning what has happened. In the year 1979 alone, for example, tax revenues from the petroleum industry forgone-that is, tax gifts to the petroleum industry-totalled $3.4 billion, but the industry's taxes amounted to only $1.4 billion. In other words, in that one year
Petroleum Incentives Program Act
all the other taxpayers of Canada were required to subsidize the oil companies to the tune of $2 billion.


Sidney James Parker: That is Conservative policy too.


Daniel James Macdonnell Heap: That is Conservative policy and Liberal policy. The Conservatives preach it; the Liberals practice it. The fact is that this is being continued and, as the Minister of Energy, Mines and Resources said a couple of years ago in Toronto:
It is true we have imposed new taxes on the oil industry ... There have been complaints about this by the oil companies since the budget was brought down. But I can honestly say that their position will be no worse in 1981 than it was in 1979, perhaps even better.
He should know. Past tax gifts to corporations have given them far more than they needed. For example, the $2 billion we gave them a couple of years ago-and this is continuing- was not enough to induce them, according to my hon. friends to the right, to go on drilling for oil. My hon. friends would like us to give them $4 billion or $10 billion and then beg them to come back. In fact, there is no reason to suppose that that will get us any more oil, even if it is more oil that we need.
The government's proposal is that for every dollar the oil companies put up in most cases in Canada, the taxpayer would put up $4; but the taxpayer would get only 25 per cent equity in return. It is the only kind of investment where the major investor gets only a trifling equity and a trifling return.
The maximum benefit for a Canadian-owned company would be 93 cents on the dollar, and even for a multinational company the maximum benefit has risen, so that instead of paying 37 cents on the dollar it will now only have to pay 28 cents. All the rest is paid by the working people of this country.


Sidney James Parker: That could only happen in Canada.


Daniel James Macdonnell Heap: They simply do not need it, Mr. Speaker. They will take it if we give it to them. If we are stupid enough to let them, they will take it away. Countries like Norway do not give it at that rate. Norway will take up to 70 per cent interest in any block of land that it does not already hold if the oil companies find oil on it. That is because the oil belongs to the people of Norway. In Mexico the oil industry has been nationalized for over 40 years and now we see that country moving ahead.
Only a year ago the minister said that "this regime is more favourable to foreign investment than virtually any other country in the world." In that he is stating the truth, or perhaps he is even understating it. In Canada, the return to a taxable foreign company would be 27.7 per cent; to a Canadian company that is taxable it would be 29.7 per cent and to a Canadian company that is not taxable it would be 26.9 per cent. The lowest return on any of these would be that 26.9 per cent. In Norway it is only 18.3 per cent and in the United Kingdom it is 24.4 per cent.
We hear tear-jerking stories about the poor oil rig owners having to take their rigs down to Oklahoma. In Canada they

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were going to get 26.9 per cent so they went to Oklahoma where they will get only 21.6 per cent!


Some hon. Members:: Oh, oh!


Donald Frank Mazankowski: Nonsense. Get your facts straight. Tell the truth for a change.


Daniel James Macdonnell Heap: They are going to get almost 6 per cent less in Oklahoma, but supposedly if we gave them more in Canada they would come back.


Some hon. Members:: Oh, oh!


Daniel James Macdonnell Heap: The jackals to my right have not told us how much more we would have to give them to bring them back to Canada. The fact is that these companies have now so much cash flow-more than they find it worth using for this country's development of oil-


Gordon Edward Taylor: Complete lies.


Daniel James Macdonnell Heap: -that they will probably begin doing what they have already done in the United States. Since they have 30 per cent of the revenue in this country now, they will probably begin doing what they are doing in the United States and unfairly start buying into other industries outside the energy field.


Gordon Edward Taylor: Where do you get that stuff? In fairy tales?


Daniel James Macdonnell Heap: Not only were all these tax subsidies given but there is another kind of subsidy that the working people of this country have been giving the oil companies for many years. Although the oil companies do not have any wells in Spadina, they have something more valuable-their head offices. Many of the people in Spadina built those head offices and banks that are the blood brothers of the oil companies-if they have any blood.
There are about 20,000 or 25,000 people who clean buildings in downtown Toronto-the oil companies and other head offices. These are mostly immigrant Portuguese housewives who spend about five and a half hours in the evening, five nights a week, cleaning those buildings. If they are lucky, after their husbands get home from their construction work they leave their families and go out to clean the buildings, coming home after eleven o'clock.
I have seen some of the conditions under which they work. As a representative of the board of health several years ago, I was called down to look into a dispute. The women were being forced to use stinking, used garbage bags that had been filled and emptied the night before. They were being told to reuse them because the contract cleaning company was too cheap to buy more bags. These women earn the minimum wage or, if they are lucky, 10 or 20 cents above.
There are also probably around 5,000 hospital workers in the Spadina area. We will not have up-to-date figures until the government releases the result of last year's census. There are probably another 10,000 restaurant and entertainment workers. I am not talking about the highly paid singers but about the people who keep the establishments going. Then there are
about 10,000 workers in the clothing and other manufacturing trades in Spadina. This is without the taxi drivers, the caretakers, the file clerks and servicemen of all kinds. There would be about 50,000 of these workers, almost all non-unionized and almost all on very low pay. Toronto has the lowest minimum wage of any city with over 500,000 population in Canada. In fact, the only other jurisdiction I know of with such a low minimum wage is the federal government, where it is $3.50 an hour.
If we estimate that these workers make on average about $4 per hour and work on average a 40-hour week, then in a year they earn in the range of $8,000. That is not much money on which to raise a family, especially with the housing and rental prices they have to pay in Toronto.
But there is more to it, Mr. Speaker. The work they do as cleaners is recognized at least in one part of the federal jurisdiction, the CBC where there is a union, as being worth $6.50 an hour. So most of these workers are in fact working for about $2.50 less than the fair wage. Add to that the fact that in a year they have to pay about $200 in taxes, about $250 in transit fares and probably $3,500 or $4,000 for daycare, and it all adds up. They may not be able to pay that much for daycare and sometimes what they get is rotten care. I am talking about the value of the work that is done to look after a kid or the value of the work that has to be done later done to repair the damage when the kid is not properly looked after, when his parents have to work.
Altogether these workers are subsidizing their employers to the extent of about $9,000 per year if you consider what they are paid, subtracted from the value of their work and the cost to them of performing their work. Instead of being paid $8,000 they ought to be paid about $17,000 if you calculate it on the basis of a low union wage, the cost of looking after their children, the cost of getting to work and taxes. The average person there is subsidizing these companies by about $9,000 per year, and there are about 50,000 of them. That makes a subsidy of about $450 million which the banks, oil companies and some of their confreres are taking away from the working people in downtown Toronto.
Senator Olson, who of course does not undertake to meet workers and ask for their vote, is appointed to be in charge of economic development and he says these are unproductive workers. A few weeks ago he said we are going to get rid of these industries, we are going to stop propping up unproductive industries such as the clothing industry and so on. What he means is that these workers are low paid, and therefore he calls them unproductive. In fact, these workers are subsidizing his favourite, the oil industry. If there is anything which should be phased out on the basis of productivity or on the basis of who is subsidizing whom, it is not the clothing workers, building cleaners or restaurant workers; it is the oil companies. The only reason in the practical sense why the oil companies
April 20, 1982

continue to receive such gifts from the federal government, whether it is Liberal or Conservative, is that they are so reliable in their gifts at election time.


Gordon Edward Taylor: How much did you get from the labour unions?


Daniel James Macdonnell Heap: For example, in just one year the major companies gave $388,166 to the Conservative Party. They gave $332,942 to the Liberal party.


Sidney James Parker: They protect themselves on both sides of the House.


Daniel James Macdonnell Heap: Of course. They do not know which one will win the election-


Mr. Guilbault:: We know you won't.


Daniel James Macdonnell Heap: -but they know whichever one it is, it will give them the taxpayers' money. These people attempted to do the usual thing in Spadina last summer, but not all the money of the oil companies and the banks could elect Jim Coutts in Spadina, last summer or any other summer.


Gordon Edward Taylor: You were elected by a minority.


Daniel James Macdonnell Heap: The fact is that the working people of this country are fed up with subsidizing the banks, the oil companies, the Tories and the Liberals. Our position is getting more and more support. What we are saying is, do not give that $6.5 billion to the private oil companies. If that money is going to be spent in the oil business by Canadian taxpayers, it should be to take control of companies like Imperial Oil. It would be much better to have the major oil companies in Canada controlled by Canada's elected representatives than to have it controlled by the unelected representatives such as Rockefeller.
With that money we could put control of the oil industry in the hands of the Canadian people, not in the hands of the buddies of the Conservatives or Liberals who happen to be the chief shareholders of Nova, Dome, Imperial and companies like that. We could then bring the revenue back to the people from whom it originally came-the building cleaners, taxi drivers, restaurant workers, construction workers and school teachers, the people who produced that $6.5 billion in taxes. They need it for health care, which this government is helping to destroy, and which the Conservative Party would probably destroy a little faster if it had the chance. The people need it for education, which again this government is destroying, as is the Conservative government in Ontario. They need it to institute daycare for the children of working parents, which is becoming a widespread need in this country as more and more families are forced to have two breadwinners. They need it in order to provide low rental housing, which the owners of the very large development companies refuse to provide.
This $6.5 billion comes from the ordinary working people of Canada. It should be spent on their behalf, not on behalf of the
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Gallaghers, the Rockefellers, the Blairs, and the get-rich-quick boys who would like to have private ownership paid for by the public. It is public money, it should be under public control and benefit the public.



PROCEEDINGS ON ADJOURNMENT MOTION


The Acting Speaker (Mr. Blaker):: It is my duty, pursuant to Standing Order 40, to inform the House that the questions to be raised tonight at the time of adjournment are as follows: the hon. member for Vaudreuil (Mr. Herbert)-Federal-Provincial Fiscal Arrangements-Amount of transfers to provinces; the hon. member for Grey-Simcoe (Mr. Mitges)- Government Annuities-Yield to purchasers, (b) Request that government redeem low yielding annuities; the hon. member for Western Arctic (Mr. Nickerson)-Pipelines-Delay in construction of Alaska Gas Pipeline, (b) Construction guarantees.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed consideration of the motion of Mr. Lalonde that Bill C-104, respecting petroleum incentives and Canadian ownership and control determination and to amend the Foreign Investment Review Act, be read the second time and referred to the Standing Committee on Energy Legislation.
Mr. F. Oberle (Prince George-Peace River):: Mr. Speaker, once again it is my privilege, or my lot, to follow one of my friends on the left. We sometimes call these people socialists, but this was a Marxist-Leninist speech by the hon. member. He told us the workers have no control in this country, and the downtrodden are being abused by Liberals, Conservatives and free enterprisers. I have never been one to make apologies for free enterprise and enlightened capitalism, but I would like to ask the hon. member, who just said the people of Canada are waking up and becoming wise to all the schemes that the Liberals and Conservatives have imposed on them, why it is that in the most recent election in Newfoundland the NDP popular vote dropped from 10 per cent to 3.5 per cent?


William James Kempling: The people got wise.

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Frank Oberle: Now, there is a really rich province. There are a lot of workers there who are really rich, yet the NDP popular vote dropped to 3.5 per cent.


Mr. Fulton:: What about Manitoba?


Frank Oberle: These people only enjoy support in areas where there are entrepreneurs, the people that have built this country, that they can leech off of. That is why they have one member from Newfoundland, and that is why they are going to lose the Saskatchewan election a week from now.


Some hon. Members:: Oh, oh!


Frank Oberle: Just listen to them. How delightful; if you do not see them, you hear them! What nonsense. Imagine, the cleaning women employed by the multinational oil companies in Toronto are working at a minimum wage. They are all immigrant women and working at the minimum wage. The cleaning women who work for the CBC are paid three times as much as the people working for the oil companies. He has ignored the fact that the CBC gets close to $1 billion of taxpayers' subsidy every year. He talks about subsidies to the oil companies; what about the subsidies to the CBC?
We have a news team which comes on every night after the news on "The Journal", two women who have been there for ten months and they now need a five-month rest. This is exciting, this is wonderful. The hon. member wants to have complete control of every resource company in Canada so that in some magical way they can redistribute the wealth generated by their activities. The question is, who is going to carry out the activity? I would like to ask the hon. member how much control he exercised over Petro-Canada. We own it, it is ours whether we like it or not, and I would like to know how much control he exercised over it when it bought Petrofina for $1.5 billion. We know Imperial Oil would not have bought it. If Imperial Oil had, it would not have bought a single barrel of new oil. Imperial Oil would not have created a single new job or new enterprise of any kind because it was already in existence.
The hon. member tells us that the oil companies are going to earn $6.5 billion over the next five years.


Some hon. Members:: Oh, oh!


Mr. Kristiansen:: It was just sold out yesterday by your friends in Victoria. Ask them.


Frank Oberle: Mr. Speaker, is it not delightful to get under the skin of the members of the little red rump of the Liberals? The hon. member is talking about the multinationals, the woodworkers and the oil workers. I do not hear the oil workers who are working complaining. I do not hear them at all. I do not hear them talking about multinational unions and the control that American unions exercise over the workers in this country, or about the disunity that exists. I do not hear these great spokesmen of the workers and the downtrodden talking about that.
Let me return to the $6.5 billion which the multinational oil companies are going to be earning over the next five years. We know, and the statistics bear this out, that the price of a litre or of a gallon of oil is broken down in a way where the commercial value of the product is roughly 32 per cent of the pump price. This means that if the oil companies earn $6.5 billion over the next five years, the federal and provincial governments will earn $13 billion. That is my arithmetic.


Daniel James Macdonnell Heap: It is going back to the oil companies.


Frank Oberle: If the hon. member would sit down and figure it out, he would realize that. Oil companies have to drill for oil, bring it to the surface, they have to refine it, they have to load it on to trucks after refining and haul it to service stations. No matter what day the oil reaches the gas station, the service station operator has to be there whether it is seven o'clock in the morning, eight o'clock in the morning or whatever. The operator puts it in your car and washes your windshield. All of this is done for about 16 cents per litre.
The federal government and the provincial government are earning from the same activity 26 cents a litre. But they get this 26 cents without doing a thing. Not only that, there is a margin of profit in the 16 cents which the oil companies receive from each litre. The government will tell them how to invest and reinvest the small margin of profit that is left. What more controls do Canadians need? Why is it that we have to invest another $100 billion of taxpayers' money to attain the same kind of control that we already have?
Since visiting my constituency I am now in the process of putting together a private member's bill which will make it mandatory under the products labelling act that the price be broken down of a consumer product which is heavily controlled by governments and shown on the package. After all, the components of a product have to be listed on the package, and must be done in both official languages. Why should the price of gasoline not be broken down? It should be shown that 16 cents a litre is the commercial value, that the provinces keep 13 cents or 14 cents for themselves for doing nothing and the federal government keeps 12 cents for itself for doing nothing.
Why should we not list the commercial cost of a bottle of rum? A bottle of rum imported from Jamaica costs roughly $3.10. That rum is sold in liquor stores for $19 or $20. Why should consumers not know what their actual tax bill is?
Workers pay for this tax. So do people who put gasoline in their cars to drive to work. What about the farmers who put gasoline and diesel fuel into their tractors and their cars as part of their job of producing food which is nutritious and plentiful? Why should consumers not know what the government is already up to? That is why I am putting together this private member's bill. I recommend it to all members. If we had these kinds of requirements it would make very interesting reading and the people would know exactly where their money is going.
April 20, 1982

The National Energy Program was designed to achieve a 50 per cent or better Canadian ownership content. I have mentioned before that Canadian ownership content has to be defined. The socialists in this chamber have not yet done that. It means government ownership. There are no ifs, ands or buts about that. Canadian ownership would mean that purchase of shares in Petro-Canada or any other corporation would be restricted to Canadians only or that only wholly Canadian-owned companies could operate in Canada lands or in the oil patch. That would be Canadian ownership. But Bill C-48, which is the National Energy Program, is designed to do nothing else but give governments complete ownership of this important sector of our economy. The National Energy Program will not give us energy self-sufficiency by 1990.
Oil is not a tool of production, nor is energy, but you certainly need oil to grease the machine used for that production. We know the Marxist theory that the people have to have control of the tools of production. Labour produces wealth. Labour multiplied by the machine produces more wealth. The government has to have control and ownership of the machine. For the life of me I cannot believe that intelligent people here would tell us that all will be well as soon as we have, as this government or any other government has, even a Conservative government, control and ownership of all the tools of production.
Why is all not well in the Soviet Union or for that matter any other socialist country in the world? Governments own all the resources in socialist countries.


Donald Frank Mazankowski: They cannot feed themselves.


Frank Oberle: Those are the countries that own all their agricultural lands. It is 63 years since the revolution in the Soviet Union, but the Soviet Union has had 63 consecutive crop failures. The gods must have been really angry at the people in the Soviet Union. Imagine, Mr. Speaker-they have had 63 consecutive crop failures! Those failures occurred immediately following the period when the Ukraine fed all of Europe. Then there was the revolution and 63 consecutive crop failures followed.
I suggest that there is something else at play. There is complete Russian ownership of the oil, of the energy sector, of the lumber industry and of the agricultural sector. In fact, in every other resource sector the Soviet Union has complete ownership. That is why the people in the Soviet Union are starving. That is why the Soviet Union has to import wheat from Canada and from the United States. The Soviet Union will not be importing wheat from Canada much longer if these fellows to my left have too much influence on those opposite. They have already asserted too much influence on them. They seem to believe that the state has to own the tool of production so that everything can be equitably redistributed without knowing whether or not people produce or contribute anything to the economy. We all know what the end effect of that kind of policy would be.
We are not here to make excuses for the multinational oil companies if they have been irresponsible. Some have. It is no one's fault but theirs because we have total control over them.
Petroleum Incentives Program Act
We tell them where to drill for oil. We tell them if they find any. It is very seldom they do. We tell them how much to recover, where to deliver it and how much to charge for it. We set the wellhead price, we set the pump price. We do all that. Why do we have to own it?
The government is acting with such indecent haste trying to get the bill through the House because we are already learning the effects of the National Energy Program. The longer it takes, the more people will become aware of what is happening, particularly when this monstrosity of a bill is in place. Approximately $6.5 billion of Canadian investment capital has left the country for the United States. We realize the effects that this will have on the poor workers of the United States. It has been given back to free enterprise. The people of the United States will be ripped off. In the short period of one year since the NEP was announced and parts of it implemented, there has been a decrease in the price of gasoline in the United States. But our prices are still increasing because, after all, we have ownership in Canada! With that $6.5 billion moved Canadian expertise, Canadian technology and Canadian jobs.
I should like to cite one example. Fort St. John is in my constituency-


Some hon. Members:: Oh, oh!


Frank Oberle: If hon. members listened, they might learn something. The truth always hurts. It certainly hurts those people in the corner. The hon. member for Spadina (Mr. Heap) should listen to what I am saying. I do not know why the people of that riding wanted to elect this man to the House of Commons rather than Jim Coutts who had the same theories as he. He wanted to nationalize the farming industry. He did not believe in private ownership of farms or private property. He wanted to do the same things as the hon. member for Spadina.


Daniel James Macdonnell Heap: The Tories placed third in Spadina.


Frank Oberle: I do not know why the people of Spadina wanted the hon. member. At least Mr. Coutts would have had some influence on the other side. Perhaps he would have been able to do these things much faster. As we all know, Canadians will not stand for this radical alternative to a time-honoured system which has served our country well. This system has made us one of the leading industrial nations of the world and one of the most industrious and prosperous peoples of the world.
Returning to the effects of the National Energy Program in some communities, one of these communities is located in my constituency. The entire area of British Columbia which produces oil and natural gas is within my constituency. In Fort St. John and the general northeastern area of British Columbia a couple of years ago 120 oil and gas rigs were active. Each one of these rigs had roughly 60 to 65 jobs attached to it. As we all know, there were incredible spin-off effects on service industries. For example, there were mud

April 20, 1982
Petroleum Incentives Program Act
companies, machine shops, testing companies, water trucks which ran back and forth, welders and trucking companies which moved the rigs. All these spin-off effects have gone. Right now there are 18 rigs working in that entire area of British Columbia. In fact, a couple of years ago there were some Petro-Canada rigs working in northeastern British Columbia, but there are no such rigs working there now.


An hon. Member:: They have gone offshore.


Frank Oberle: They have gone to Senegal and to the North Sea; this is where Petro-Canada is active. Esso Canada is not active in Senegal or the North Sea. It is only active in Canada because multinational companies are active in these other areas and there is no way that Esso Canada can go there.
What are the effects of this massive downturn in the activities of this important industry? The effects are devastating. For example, there have been bankruptcies. We heard some statistics this morning, but specifically there was an increase in unemployment in Fort St. John to 160 per cent from the first three months of January, February and March of 1981 to the first three months of this year. A major car dealer has gone bankrupt. A lifetime of work was invested in this business which was once prosperous and doing well, and the dealer has gone into receivership. He responded to what he heard in the House of Commons a couple of years ago, namely a firm commitment by government that Canada would achieve energy self-sufficiency by 1990. The government indicated that this would require an investment of somewhere between $300 billion and $500 billion, and that all of us would have to use the entrepreneurial spirit for which we are famous to invent new ways to find energy.
My area responded; a lot happened. There was an increase in the number of hotel rooms in Fort St. John from 320 to 1,100 in two years. Now several of the major hotels, including a Holiday Inn, are in receivership. The good local people who invested in motels, coffee shops and machine shops are now trying to find ways to deduct their losses from income tax. This is difficult as they are not paying any income tax, since they have no income.
As I say, the effects are devastating. We will not achieve energy self-sufficiency by 1990. In fact, we will be importing more than 50 per cent of our requirements by 1990 if we proceed with the program. The best we could hope for is that world energy prices continue to decline and that the import compensation which is paid so that people can heat their homes will not be too onerous on us. When I say "onerous on us", I am talking about the government. Of course, the government cannot give anything away which it has not first taken from someone else. I am speaking more about those of us in the west, particularly in the provinces of British Columbia and Alberta, who are paying these import compensation charges, because we are the only "have" provinces in Canada; every other province is in the "have not" category.
It is utterly amazing to sit here in good conscience, knowing the effects of the NEP, assiduously and stubbornly pushing ahead with the scheme. If there were any light at the end of
the tunnel, if it were necessary to destroy in order to rebuild, I could understand it. As in other areas of the economy, if it were an attempt to rearrange the attitudes of people to make them more conscious of the realities of the modern world, I could understand it. But that is not the case.
We had a good industry. A good percentage of the industry was already Canadian. There is a great misconception that the oil sector is totally controlled by multinational companies. Although multinational companies have sometimes been very irresponsible in the arrangement of their corporate structures and the behaviour of their corporate bureaucrats in relation to small businessmen with whom they work in the oil patch, they have always known and understood that the best and most productive way to achieve new wealth and to get the job done is through private enterprise. That is why you do not see an oil rig company out there directly servicing an oil rig; they leave that to private enterprise.
Until a few years ago, when they had to react to certain legislation which was brought in by that socialist government on the other side, they always knew that the best way to sell gas and the best person to be the final chain in the link was an entrepreneur. That is why the service station operator is a private businessman. The oil companies knew that this was the best, most productive and efficient way to deliver oil and gas to the producer. The oil companies always knew that and it is unfortunate that this government does not understand it. Instead, this government wants to tear down this industry and replace it with some radical alternative which has never worked anywhere else in the world. It knows what the effects will be but it is so stubborn in its attempts to break the present system apart in order to try something which we all know will not work.
Socialism has never worked anywhere and those members to my left should know that. They can look anywhere in the world where there is a socialist or communist government and see that there are people starving, being deprived and experiencing shortages in the supply of important consumer goods. If those people can obtain some goods they must buy them in the black market and pay excessive prices for them.


An hon. Member:: When they are exploited they have to turn to something.


Frank Oberle: Those members know that people are exploited and workers are exploited by insensitive centralist, socialist government bureaucracies ten times more than workers who have a choice to work in one free enterprise establishment or another.
The answer is not for all Canadian workers to begin working for the Canadian government. In five years the government will not have enough money to take steps to regain its position in world markets-a position which provided a standard of living which was number three in the world and is now twelve or thirteen. The answer will not be found in government
April 20, 1982

ownership. The answer is in the return of the inspiration of the free spirit and the incentives required for individuals to invest in themselves and their country in order to restore in Canadians a confidence in their ability to produce. The first step towards that goal is to instil confidence in Canadians once again. Without that confidence I am very much afraid that we will have to continue to hope that the Americans will emerge from their dilemma and that their prosperity, which was based on these old principles, will once again spill over into our country.
The hon. member also indicated that in the last ten years the oil companies have increased their wealth by four times. What he neglected to say was that the government has increased its size tenfold during the same period. That is a clear indication of where we are heading, which is toward disaster unless we all screw up our courage. I am particularly looking for the backbenchers in the government to screw up their courage and say that enough is enough. They are representing ridings in the great provinces of Quebec and Ontario where unemployment is far greater than the national average. Businesses in those provinces which produced pipelines for the west, equipment for wells and tools used in the oil patch are going bankrupt because there is no demand. Let those Liberal backbenchers screw up their courage and stand up to the people who are determined to replace our time-honoured system with this radical alternative of government control and ownership, centralist control and socialism. Time is running out. It is time for us and for all Canadians to wake up and call an end to this incredible nonsense.


Mr. Dave Dingwall (Parliamentary Secretary to Minister of Energy, Mines and Resources):: Mr. Speaker, I appreciate the opportunity to participate in this debate. It is interesting to note that the official opposition, the Conservative party of Canada, are opposed to providing moneys under the petroleum incentives program to the oil and gas industry in Canada. Similarly, it is interesting to note that the New Democratic Party of Canada is opposed to this particular piece of legislation as well.
Unfortunately, a number of events have taken place in the last twenty-four hours, particularly with respect to the words used by the hon. member for Calgary Centre (Mr. Andre). At best, I think it can be said that his remarks regarding the role of the Minister of Energy, Mines and Resources (Mr. Lalonde) in providing a direction for Canadians and the government relating to our energy policy has not only been uncomplimentary but bordering on unparliamentary. He made reference to the "battle of the bells". He stated that he would have prevented that battle if he had been assured that this particular piece of legislation on the petroleum incentives program would be given quick passage. I do not wish to debate the substance of his remarks while that hon. member is not in the House, so I will simply refer him to the remarks made by the Minister of Energy, Mines and Resources which were recorded in Hansard on March 1, 1982. I believe that clarifies beyond a shadow of a doubt what transpired between the minister and himself.
Petroleum Incentives Program Act
By objecting to this particular piece of legislation and voting against it, it is evident that the Conservatives are indicating to the oil and gas industry that they will not provide any incentives for exploration and development. I believe it is shameful that they seem to be speaking out of both sides of their mouths. While they say they support the oil and gas industry, when it comes to providing actual incentives they either do not take a position, or if they do, it is not a favourable one for the industry.
The hon. member for Calgary Centre talked about the goal of Canadianization and how he agreed with that goal. Unfortunately, he did not agree with the process for achieving Canadianization. I suggest to him that there is no easy process to accomplish the Canadianization goal. Canadianization has been talked about for many years in Canada. In order to achieve this we will have to go through some difficult times and address a number of concerns over a period of time.
The hon. member also took the opportunity to greatly criticize the officials of the Department of Energy, Mines and Resources. I call that criticism a very cheap shot and very unbecoming of a Member of Parliament. I think each hon. member of this House, regardless of on what side he or she may sit, should hold that hon. member in shame for such despicable and uncomplimentary remarks.
The hon. member for Calgary Centre also made a statement of the effect that there are too many forms to be filled out and too many regulations to be complied with. I suppose if the hon. member had his wish the Government of Canada would provide large sums of money to the oil and gas industry, in excess of a billion dollars, without any strings, conditions, rules or guidelines attached. I ask members of the House, is that responsible government? Inevitably it is not. Nor it is the intention of this government.
Of course, representing his party, the hon. member for Vancouver-Kingsway (Mr. Waddell), that great mini-giant of the working class people of Canada, came to this chamber and said to the Parliament of Canada that he was very concerned that the Minister of Energy, Mines and Resources was not here while he was giving his speech. Therefore, he wanted to call for a quorum and he called for a quorum last night. Your Honour knows what happened when he called for the quorum. He and other hon. members in his party, each and every one, left the chamber.


Some hon. Members:: Shame!


David Charles Dingwall: It was suggested, not by me, that perhaps the reason for calling the quorum was that the hon. member had a more important engagement to attend and that this particular piece of legislation, as it affects energy in Canada, was not a priority with him or his party. I do not know if that is true, but I think the record should very clearly show that the NDP called a quorum. All its members vacated the House of Commons. A quorum was called, we had sufficient numbers,

April 20, 1982
Petroleum Incentives Program Act
and then we came back and resumed debate. That was shameful conduct on the part of the NDP and the hon. member for Vancouver-Kingsway.


Some hon. Members:: Oh, oh!


David Charles Dingwall: I will not quote the hon. member, but the hon. member for Vancouver-Kingsway had the audacity to suggest that perhaps there was an intellectual-I use that term quite loosely-understanding between his party and the government of the province of Quebec, when he referred to Rene Levesque. Is that where the NDP stands? I ask that question quite sincerely.
We have made encouraging progress toward our goal of achieving at least 50 per cent Canadian ownership by 1990. In the past year, with the changes from foreign to Canadian control of such large companies as Hudson's Bay Oil and Gas Limited, Aquitaine Company of Canada Limited and Petrofina of Canada Limited, foreign control declined by about 10.5 per cent to a level of approximately 67.2 per cent. At the same time, the level of foreign ownership of upstream production revenue was 65.5 per cent, a drop of 6.5 percentage points in one year.
While the purchases of foreign-owned oil companies are vital to the government's Canadianization plan; they are not the only means. This bill provides another means by which Canadians can take charge of their oil and gas industry.
There have been some concerns raised by hon. members of the official opposition that the energy legislation, and particularly the bill which is now before us, is discriminatory toward the oil and gas industry in the United States. However, I wish to lay on the record a quote of the former President of the United States, Richard Nixon, who told this House in no uncertain terms on April 14, 1972, that:
No self-respecting nation can or should accept the proposition that it should always be economically dependent upon any other nation. Let us recognize once and for all that the only basis for a sound and healthy relationship between our two proud peoples is to find a pattern of economic interaction which is beneficial to both our countries and which respects Canada's right to chart its own economic course.
I think that statement tells it all. Mr. Nixon made that statement ten years ago. However, I do not have to tell hon. members of this House that Canada still faces the situation whereby we are still dependent upon other nations. This is particularly true in the oil and gas industry.
The petroleum incentives program is a very positive program-


Some hon. Members:: Hear, hear!


David Charles Dingwall: -which offers incentives to Canadians to participate in their own industry. I can understand why the New Democratic Party opposes this. It would perhaps prefer that depletion allowances continue for the multinational oil companies. Then members of that party would perhaps have an opportunity to sit on the board of directors of those companies. That is probably what they want.


William James Kempling: Like Tommy Douglas.


David Charles Dingwall: This petroleum incentives program is one which we believe will lead to increased Canadian control and less dependence on foreign ownership. Our intent, as emphasized in the National Energy Program, is to mobilize predominantly private Canadian investment in the oil and gas industry.


Some hon. Members:: Hear, hear!


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 motion? All those in favour 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 then five members having risen:


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


Madam Speaker:: I declare the motion carried.


[Stage Direction]
Motion agreed to, bill read the second time and referred to the Standing Committee on Energy Legislation.
* *
*

Marc Lalonde: that Bill C-107 respecting motor vehicle fuel consumption standards be read the second time and referred to the Standing Committee on Energy Legislation.
He said: Mr. Speaker with the legislation before the House at the present time the government is acting on a longstanding commitment to Canadians to address the problem of heavy consumption of fuel by motor vehicles. This legislation, the Motor Vehicle Fuel Consumption Standards Act, was first promised in 1976. Since then, as hon. members know, the government has provided a voluntary program while work on drafting and refining the legislation was carried on by the Department of Energy, Mines and Resources and the Depart-
Fuel Consumption Standards
ment of Transport. During that time we have had an American model to consider but not to follow slavishly.
The National Energy Program recognized that transportation uses more oil than any other sector and that conservation efforts would be crucial to moderating that demand. By world standards we waste fuel in this country, so we need an effective program of managing consumption. That is what is stated in the following section of the National Energy Program:
In Canada, standards have been voluntary. However, it has become increasingly clear that the automobiles constructed to suit United States legislative standards do not necessarily reflect the realities of vehicle operation in the colder Canadian climate, nor do they take cognizance of the relation between Canadian fuel types, feedstocks and motor vehicle fuel requirements. As part of a general conservation and liquid fuels policy, Canada will develop its own standards.
This legislation comes to grips with a persistent headache amongst conservationists. We are all familiar with North America's love affair with the automobile and how extensive that torrid relationship has become. In Canada the use of automobiles is more than just whim or fancy. Our country's population is flung across an awesome latitude, and transportation is vital to our way of life.
Much has already been accomplished. One would have to be blind not to see the changes that have taken place in car size and horsepower in recent years. The problem is not so easily solved, however. People have to be shown the substitute fuels that exist and they have to be encouraged to ease up on the accelerator and to make trips count when they pull out of the laneway. They also need information that will enable them to choose vehicles that best suit their needs and resources.
This legislation will make that information available and give the government the ability to make sure the choices are as attractive as possible.
To illustrate the progress that has been achieved, let me give you a few statistics, Mr. Speaker. In 1978 we estimate that new passenger cars in Canada had an average fuel consumption of 11.5 litres per 100 kilometres. Last year that had dropped to 9.5 litres per 100 kilometres, and this year we expect it to be down to 8.5 litres. Such progress is encouraging but it is far from enough. We have to do much more to reduce motor vehicle consumption than we have been able to accomplish with this voluntary program so far. Why? Because last year Canadian consumption of motor gasoline amounted to a staggering 225 million barrels.
I hardly need to remind anyone in this chamber of how important this bill is to our energy program. Throughout the NEP the effort to enhance both supply and conservation is evident. Here we are adopting yet another method to cut into oil imports and preserve for as long as we can the petroleum resources available to us. The transportation sector represents a staggering consumption of fuel. There were approximately seven million private cars on the road in Canada in 1980. They burned somewhere between 18 and 19 billion litres of gasoline travelling an estimated 112 billion kilometres. These statistics do not include trucks or cars in commercial use.

April 20, 1982
Fuel Consumption Standards
[ Translation]
More oil is required in this transportation sector than in any other, and although other fuels such as propane can be substituted for gasoline, this is not sufficient, at least not in the short term. Once again, we must save energy. Since substitutes are known, in abundant supply and ready for immediate use, it is the National Energy Program's aim to provide for efficient management of the demand for oil products in this sector. We shall be able to stabilize, and even reduce, the demand for oil products to a considerable extent through the proposed legislation on motor vehicle fuel consumption standards which is aimed at saving our energy resources. This additional authority would make existing voluntary guidelines for fuel consumption standards official and would give force of law to compulsory standards, should they prove to be desirable or necessary in the future. There are already signs of change in this sector, one example being the installation of relatively inexpensive aerodynamic deflectors on tractor-trailers, which help cut down on fuel consumption.
Carpool programs appear to be spreading, and are another way of reducing our transportation fuel requirements. However, not only the drivers' attitude must be changed. Driving itself must be rethought and revolutionized. This bill is therefore proposing a program that takes into account Canadian conditions and requirements on the basis of which the automobile industry will design and manufacture the cars of this decade. In 1975, the American government adopted legislation that set fuel consumption standards for cars. It is up to the manufacturers and importers to ensure that average consumption, weighted by the number of cars sold each year, meets annual standards. Since these standards are becoming increasingly stricter, the industry has been obliged to change the design of North American cars. Increasingly, however, cars manufactured to U.S. standards do not allow for the differences in climate and fuel encountered in Canada. Because of our energy policy, we need a made-in-Canada program. The bill on motor vehicle fuel consumption standards will authorize the Minister of Energy, Mines and Resources and the Minister of Transport (Mr. Pepin) to continue the voluntary fuel consumption program.
The first part of the Act provides that a fuel consumption number will be given to each vehicle sold in Canada. The numbers will be used on information stickers for each vehicle and also to provide data for the Transport Canada transportation fuel consumption guide. The same figures will also be used by the Minister of Transport to calculate the fuel consumption of vehicles sold by manufacturers in Canada.
The vehicle categories covered by the legislation are to be general. For instance, private cars will form one category. The present voluntary program sets average motor vehicle fuel consumption standards for a company for every year up to 1985. Companies can reduce fuel consumption by selling more energy-saving cars or by refining each model in this respect at the design stage.
The government has decided that the program will remain voluntary unless companies fail to co-operate.

So as to hammer the point home, the authority to set standards and impose penalties is contained in the act. But the government does not intend that these provisions should be proclaimed. Just having written these sections into the law we hope will be enough to accomplish our goals.
We want detailed information for the consumer and for the government. We want to demonstrate to everyone, manufacturers, consumers, and the world that we are truly committed to saving scarce oil supplies and we want to be in a strong position to negotiate with the industry on voluntary standards. Obviously if we cannot achieve all of that without using the legal clout this offers us, we will resort to that approach. But for now the practice of setting voluntary fuel consumption standards will continue along with an improved flow of information.
The primary beneficiary here is not in fact the government but the consumer. We expect automobile manufacturers and dealers to display prominently energy consumption ratings and give the consumer the chance to make intelligent, informed decisions when in the vehicle marketplace. The government will compile the data to monitor the accuracy of the ratings and the progress we are making in getting more kilometres out of every drop of fuel.
We can also get a better idea of what is happening by way of research and how the new technology is performing. Such information is crucial to developing government policy. As the situation stands now we cannot be sure such complete information will be supplied. The consumer will also benefit by having the attention of automobile manufacturers focused on Canadian needs and conditions and on our supplies of gasoline or alternative fuels. Nothing in this bill should cause undue hardship to the industry, which we all know is hard pressed these days. We are really asking for very little additional information beyond what the industry now supplies. This act merely ensures that the information will in fact be forthcoming. The expense will be minor and the benefits potentially great. What it will do is to give us some data and some measurement directly related to the real world that Canadian motorists face. We have to find ways of looking for data which is relevant to the Canadian climate, which we all know has a mean temperature all its own.
If fuel consumption testing does not yield results which are translated into actual fuel consumption when cars and trucks are put into use on streets and highways, it is not of much use. The government needs to be sure it is getting complete and precise information if it is to verify for the consumer the numbers which manufacturers are turning out. We need this legislation to get that data. We also need a not so subtle means of encouraging automobile manufacturers to look at alternative fuels.
April 20, 1982

Again, this legislation focuses attention on the need to reduce fuel consumption in the face of rising prices and increasingly uncertain supplies. Obviously, one solution is using a different fuel. Hon. members will recall that the government has already taken some steps. We have offered grants of $400 under the propane vehicle grant program for those converting their farm or commercial vehicles to a propane fuel system or purchasing such vehicles new. Our target is 100,000 propane-powered vehicles by 1985. Since the program started last June we have received about 2,500 applications for grants. So far, about 3,650 vehicles have been accepted as eligible to receive the $400. That represents a saving of about 955 barrels a day of oil which would otherwise have been consumed as gasoline by these vehicles. The program has dispensed $1,460,800 so far. But it is more than just our grant program that makes propane gas an attractive alternative for motorists. Propane also offers a fuel that is significantly lower in price than conventional gasoline.
We have as well offered contributions to those willing to convert vehicles to compressed natural gas and help us demonstrate, in actual Canadian driving conditions, the value and versatility of this fuel. We are offering $600 contributions to those willling to undertake the conversion and to commit themselves to report back to us on what improvements they enjoyed in fuel consumption as a result.
The government has promised to hold the price of natural gas below that of oil as far as is possible, and that price differential as well should make compressed natural gas attractive as an alternative fuel. There are already more than
350,000	vehicles in the world operating on compressed natural gas, but we in Canada have little experience with the fuel, the hardware to make use of it or the results that can be achieved by making the switch. Our program started only in January, so it is a little early to judge any statistical results. However, we do know that we have natural gas in abundance and that as a fuel, it is less environmentally hazardous than conventional gasoline or diesel fuel.
We want transport fuel consumption in transport brought down. The transport sector is eating up too much of our limited supplies and we want to be in a position to achieve further improvements if this gentle approach does not work. I am sure that it will work because I know the automotive industry is as interested as the rest of us are in fuel consumption and energy self-sufficiency. If 1 needed any reassurance of that, I got it earlier this year when 1 met with the Motor Vehicle Manufacturers' Association. We all showed a great willingness to co-operate at that gathering.
As with other pieces of legislation being put before Parliament this spring, this bill is a means of formalizing the National Energy Program of October, 1980. It is just as important as all of the others, perhaps more so, since it addresses the crucial issue of conservation, the area where the actions of every citizen can mean so much in terms of saving fuel and buying
Fuel Consumption Standards
us time against the day, however distant, when oil wells everywhere run dry.


John Horton McDermid: Mr. Speaker, it is a pleasure for me to lead off the debate for the opposition on Bill C-107 respecting motor vehicle fuel consumption standards. If the minister was serious in some of the comments he has just made, I think it would be very sad indeed. He talked about the importance of conserving gas and that the responsibility of Canadian citizens was to ease back on the gas pedal and to conserve, conserve and conserve. Yet when we come into the House for a vote or a series of votes, we see lining up outside the House-it happened at question period today-a series of limousines, each one belonging to a cabinet minister. Every limousine's engine is kept running waiting for the cabinet minister to come out from the vote or to come out from question period.
One evening I made a point of counting the number of limousines with engines running. It was an evening when five votes took place. This took about an hour. Fourteen limousines were outside the House of Commons with their engines idling during the whole period. They were being kept warm for the privileged bunch over there.
The minister tells us that we have to conserve. It is the same old double standard that we hear around here on everything else. We hear that everybody must tighten his or her belt, except for them. We hear that everybody must conserve, except them. If the minister wanted to do something serious, the first thing he should do after this debate would be to go back to his office, dictate a memo to every member of the cabinet and to every other person who has a chauffeur driven car directing them to turn off the engines when not in use and thus conserve energy. Fourteen cars idling for an hour outside the House of Commons burns up an awful lot of gas. How do you expect the Canadian public to accept what the minister says about conservation when that kind of nonsense goes on here every day when the House is sitting?
In 1976 Canada implemented voluntary fuel efficiency standards for automobiles. Likewise in 1976 the government promised to bring forward legislation to put these standards into law. Well, we have finally seen that done. But it took six years after the government made that promise.
The government has never had to pass any of these efficiency standards into law. The government has been able to rely on the powerful American legislation. More important-and the minister realizes it today, and if he were up front with the Canadian people he would admit it-if he passed some regulations concerning fuel consumption for automobiles it would certainly be the tail wagging the dog because we have a North American auto industry and not a Canadian auto industry, so the minister must follow the regulations of the United States.
This is really a phony bill when one thinks about it. The smartest thing for the minister to do would be for him to say that yes, we have to label the cars here in Canada. It is being done now. All the ads reveal fuel consumption. But the simple

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thing to do would be to follow the lead taken by the environmental protection agency and to co-operate with it and the two levels of government. That would make a lot more sense than going on with this phony bill which says, "We are going to pass the legislation but we are really not going to put it into force unless you misbehave, auto industry". I guess that is a form of blackmail.
We know the Canadian auto market is too small for us to be dictating to the American scene. In the past we have voluntarily formulated standards which are identical to those in the United States. That makes sense. This bill respecting motor vehicle fuel consumption standards continues the conceit of the federal government, except for a new twist. We all remember the former energy minister, Mr. Alastair Gillespie. He pretended that there were standards when there were none. The Minister of Energy, Mines and Resources (Mr. Lalonde) now proposes to implement legislation to create standards, but then he pretends he has no real authority to do anything about it. He is not going to have the bill proclaimed. So we are still doing the same thing. The minister just wants to make it appear that he is being the big tough guy, that he will clamp down on the auto people and will make them toe the line.
The minister said that if the voluntary standards fail to work he would bring in compulsory standards and have the bill proclaimed. But this gives the government the authority to set a fuel consumption standard which the industry must meet. There is no mention at all in the bill of voluntary standards. There are really only two ways the government can implement voluntary standards under this bill. The first would be to set the standards by one regulation; the second would be to exempt everyone from them. Perhaps a third would be to set no standards at all. Really nothing at all has changed from Mr. Gillespie's day. What we have is a big facade. The minister is trying to impress the Canadian people with what he is doing, but he is not doing anything different from what has been done until now. The minister is attempting to drag some information out of the auto industry which heretofore he was unable to obtain. Is it because the auto industry would not produce it. I am not sure why he is doing it.
If we take a look at the American legislation, we will see that in 1973 the environmental protection agency initiated a voluntary fuel efficiency labelling program south of the border. In 1975 it passed amendments to the motor vehicle information cost saving in the United States which stipulated the actual fuel economy standard to be reached for each auto manufacturer for 1978 to 1980 and for 1985. Definite goals were set for the manufacturers. The 1981 to 1984 standards could be set by the secretary. Also they stipulated the means by which labels indicating fuel efficiency should be fixed to automobiles, and that EPA must in fact publish a book listing all efficiency ratings, which book must be available at all auto dealers for the benefit of consumers.
The efficiency testing program is a second aspect of the auto emissions testing program. It is interesting to note that the Americans ran their testing program in California. The minister alluded to the fact that their standards may not be
realistic for our climate. I agree with him, but he should remember that the Americans have just as severe a climate as ours in some parts of their country. There should be cooperation between the two levels of government in setting those standards. There should also be co-operation in testing because we desperately need research and development in Canada.
In reaching some of the levels about which the minister was talking, co-operation should take place between Americans and Canadians. After all, we are dealing with the North American car market, not just the Canadian market. As the minister said, the testing may be somewhat unrealistic, but I think this can be straightened out with the Americans and with auto manufacturers. In fact we do not need this bill which really does nothing; it does not have much teeth in it. I know it includes a fine of $1 million or five years in jail, but I would be interested to find out who would have to serve the sentence if the law as laid down by the minister was broken.
We are talking about no change at all. The bill is phony. As it does in many instances, the government is using a club to try to achieve goals which have already been set. As a matter of fact, the auto industry is moving toward the standards. For example, at present standards require that the new car fleets of each company average no more than 10.7 litres per 100 kilometres in 1981, which for the benefit of the hon. member for Don Valley West (Mr. Bosley) 26.4 miles per gallon, and that it improve to 8.6 litres per 100 kilometres by 1985, which is 33 miles per gallon. As the minister said, naturally companies can improve on these standards. I think many of them are. There are a number of reasons the auto industry is improving on that. First it is the competition with which the industry is faced. For far too long the governments of Canada and the United States have fooled their people. They had phony levels for the price of fuel which maintained the love affair of North Americans with big cars. The North American auto industry kept turning out these large cars because the governments were misleading people into thinking that gas prices would be kept down and that they could continue driving large cars. Now that the competition is here and now that prices have risen, naturally the auto industry will try to compete with some of the more fuel efficient automobiles we see coming into the country. They are making a move toward improving the mileage of their cars.
The minister talked about setting regulations so that people conserve gas, yet his own department brags about how consumption has gone down recently. Everyone knows why. It is because all levels of government are involved in the "big tax grab" and there are rapid increases in the cost of fuel, which in itself will guarantee less driving as people cannot afford to drive like they used to. They are not piling into their cars for Sunday drives, bumper to bumper, to see their friends in the country. This is not happening anymore because they cannot afford it, so consumption has dropped rather drastically.
The minister said that the government would carry on with the voluntary sector and that in fact it would not proclaim this act unless the industry stepped out of line. It is another slam at
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the auto industry which is having an extremely difficult time now. There are thousands of lay-offs in the auto parts manufacturing industry and in the auto industry itself. Also, thousands of lay-offs from spin-offs linked directly to the industry are being experienced, especially in Ontario and Quebec. This is just another threat of this big government. It is telling the industry what to do, how to do it and, if it is not done, that it will be given a $1 million fine and plunked in jail for five years.
As a matter of fact I find one section of the proposed act somewhat interesting. I am referring to the one which allows the minister to take a car, or a component of a car, so that he can tear it apart to see what makes it run. Nowhere in the bill does it say that he must put the car back together. Is this a freebee which is being handed to the minister? Does he hand back the car after he is finished with it? How does it work? When I read that section of the proposed act, 1 chuckled to myself because 1 could see the minister tearing apart an automobile behind the Parliament buildings to see what makes it tick. I would be surprised if he knew where to put the gas in his car because he never has to do it himself.
In concluding my brief remarks on the bill, I should like to talk about the reality of the situation. The reality is that the minister is not doing anything and that the made-in-Canada energy policy about which the minister talks so proudly is not being changed or improved one iota by the bill. If we look at the campaign promises of 1974 and at the Speech from the Throne in 1976, we realize that the government is making it appear as if it were doing something as part of its national energy policy but is really not changing anything. The goals supplied by Transport Canada to be reached by the auto industry are really meaningless. In fairness to Transport Canada, their rationale is that they must compare their data with the American tests. Only that fact makes sense.
When this bill goes to committee, I invite the minister to explain how he will have a different set of criteria when the automobile market is a North American market. There are many other ways in which the minister could likely achieve fuel efficiency. For instance, the reduction in the speed limit in the United States has had a great effect on fuel consumption there. There are still some provinces-I know speed limitation comes under provincial jurisdiction, I have been around a while, and I am glad the minister is listening-that allow a 70 mile per hour speed limit. I know that the minister does not get along that well with the provinces but perhaps he could use his bubbly personality and smiling countenance to persuade these provinces to cut back their speed limits.
Finally, the bill does not seem to accomplish what the government has indicated it will. 1 believe that once discussions have taken place in committee and once the Canadian people have seen this bill-the automobile manufacturers do not even know the bill exists-they will see that nothing has changed. Why are we wasting the time of the House with this bill? It is a public relations endeavour by the Minister of Energy, Mines
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and Resources which in fact will not prove to be an integral part of the energy legislation and should not be lumped in with the National Energy Program because it is such a phony.


Mr. John Bosley (Don Valley West):: Mr. Speaker, I might advise you at the beginning that, like my colleague, it is not my intention to speak to Bill C-107 at any great length. However, there are a few remarks I would like to make.
Like my colleague, I am confused as to why the government desires to create additional regulations. It appears to be creating additional regulations at a time when the automobile industry is facing huge unemployment. It is a concern I would like to address briefly because I believe it is an important part of this issue.
First, I would like to deal with something the minister said in his remarks which I think is extremely valuable to Canadian consumers. I think this must come first and foremost today in terms of our ability to buy the products we make and in order to provide jobs for Canadians. The argument appears to be that Canadians need some type of system to control fuel consumption because it is in their own best interests. According to the minister's rationale-which I think is reasonable-if we are able to persuade Canadians to buy cars which use less fuel we will all be better off in the national sense. I think that this is self-evident. I believe it is also self-evident that it is exactly what Canadian consumers have done because they realize, as I think we all realize, that the price of oil and oil based products will increase owing to the government's deliberately forcing prices up. It is not now the time to comment on the degree to which it will force the prices up. However, I believe that Canadians know the government will force prices up and I believe that Canadians also know that oil will become a scarcer commodity over time.
As the minister pointed out, the fact is that under a voluntary system Canadians have moved toward buying more fuel efficient cars. Therefore, one should perhaps question whether more regulations are needed to achieve that end. The minister suggested they are, but I do not believe that. Canadians have enough intelligence to purchase cars which will get better mileage. The question therefore is, would we ever need the club described by the minister in words to the effect that he needs a not so subtle method of encouraging automobile companies to manufacture cars which would achieve better mileage. My fear is that when we are experiencing unemployment in both the manufacturing and auto parts industry and experiencing a reduction in the world-wide market of cars, and we will be seeing a contraction in the number of jobs on a world-wide basis in a market in which we must compete, another club or direction by the government to the industry will do nothing but exacerbate a problem which is already intense for the Canadian automobile industry.
I say that as someone who is trained as an environmentalist and conservationist and therefore very concerned about our use of oil. I think that the important question to ask the minister in committee is: if the voluntary standards are working as he says they are, why is there a necessity to raise the spectre of
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hope we can persuade the Minister of Energy, Mines and Resources (Mr. Lalonde) and the Minister of Transport (Mr. Pepin) that it is appropriate to look at this question, considering their admitted desire to improve fuel efficiency. Having faced the fact that they cannot order an improvement in car mileage tonight without disrupting the automobile industry, perhaps this could be done within the next two to three years.
Let us assume for the moment that one believes in the principle that the manufacturers themselves have the greatest self-interest in building a car which actually gets better mileage. It is in their own self-interest to keep cars as marketable commodities for as long as it is possible to do so. On the assumption that we will run out of hydrocarbon product to burn in them, it is presumably in their own self-interest to ensure that we can use that fuel efficiently for a long time. If one also accepts the principle that consumers understand what is happening and will buy cars which are more fuel-efficient then, in fact, one does not need to do anything in terms of the minimum consumption standards other than to let the marketplace have its way.
We should consider ways of improving automobile efficiency without getting into greater regulation, greater burden and greater intrusion. The proposals we have brought into law over the years have meant that we now operate cars at about 25 per cent less efficiency. Again I am assuming that it is possible to relax those standards without damaging the market, and I suggest it is possible as shown by the studies carried out in the United States. If we do this, then it makes just as much sense, if not more sense, to begin to look at what is being done in that area in order to achieve the goal the minister says the government wants to achieve; that is, greater efficiency of gasoline usage.
As well, one must recognize the cost of engineering, producing and putting into cars the equipment which had to be brought on stream at an extremely fast rate in order to meet mandated emission control standards. The consumer is at present paying $1500 to $2000 more for an automobile today than he needs to pay for a car which would be 25 per cent more fuel-efficient and would produce no more damage to the environment. The prices of cars in this country have been driven up by that amount. One starts to realize that one of the reasons the automobile industry in North America is in trouble is not simply that the Japanese build cars more efficiently because they started later. It is not simply that the American and Canadian manufacturers in all the automobile plants need to retool and restructure and must have time to do that in the competitive environment. It is becoming increasingly clear that the reason the industry is in trouble is that the government has brought it on through a hastily-drawn regulation in the emission control area. Obviously, very few of those who drafted it are ready to admit it yet. That makes perfectly good sense. After all, if one were responsible for bringing in the emission control regulations, one would realize what the statistics show. One realizes, for instance, that the emission control standards were brought in exclusively with respect to automobiles and trucks affecting only 40 per cent of the transportation sector in terms of fuel consumption. We should consider all of the other machines which emit pollution into
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the atmosphere by burning gas. It may seem incredible but it runs right down to gasoline lawnmowers, snowmobiles and the vast number of machines which actually burn gas which are not subject to emission control standards. If one looks at the statistics, one realizes that if all of the emission control standards were taken off, the increase of nitrous oxides released into the air would be one one-thousandth of 1 per cent, according to the most reliable estimates.
It is therefore not difficult to understand why those who drafted the legislation currently in the United States in response to the democratic political intitiatives in 1968 had to be replaced by a different administration before they could admit it was not having the effect everyone claimed it was having in terms of cleaning up the environment. Similarly, it will be difficult for those responsible for the legislation in Canada for the past 15 years to admit that it has not had the effect of cleaning up the atmosphere that we talk about.
As we begin to look at this approach over the next three of four years, we should look for ways to make our automobiles more efficient, which is good, and keeping our people at work which is also good. We must understand that we are saying to Canadian consumers, no matter whether they live in Flin Flon or St. John's Newfoundland, that they must pay $1,500 or $2,000 more for a car than they would normally pay. This is to try and attack a problem that does not exist. If it did exist, it would only exist in terms of major urban centres if there was a geographic conversion problem.
The only city covered by that is Toronto. We must realize that up to 84 per cent of oxides and sulphides released into the air in the Toronto area are now regarded as coming from generating stations on the other side of the lake. We will be saying to Canadian consumers in other parts of the country that they must pay $2,000 more to purchase a 25 per cent less efficient engine because it might affect me and my constituents in Toronto a tiny little bit. We must begin to look at that. We will conclude over time, as least I hope we will, that the single best way to do what the minister says in this bill needs to be done, on the basis of the best evidence today, to improve the efficiency of automobiles and to use less gas is not to discuss some form of quota, additional regulations or mandatory gasoline consumption standards.
As an aside, I would say that either we will have standards adopted through regulation which the manufacturers agree with, in which case we do not need the legislation, or, if the experience of this government in terms of its regulatory power over the last 15 years is to be believed, we will invent standards through bureaucrats in Ottawa that the manufacturers know will not work, in which case we will impose them if the minister is correct.
The consequence of that will be that we will wind up increasingly disrupting an industry, potentially for what? On an annual basis, that difference may only be 0.2 or 0.5 litres

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per 100 miles of driving. That may be the kind of difference we get in mandated fleet averages. The cost of that disruption in terms of job loss is huge. That is what we now know from the emission control side. We have not achieved major reductions; we have achieved a major loss of jobs.
If we take the time to look at this question, we will inevitably come to this conclusion. The single best way to achieve the objective of reduced consumption of oil in cars is not to talk about mandating industry averages but to begin to review what we have done in a regulatory way in Canada to make the construction of automobiles in this country more time consuming, more expensive and more and more subject to government scrutiny.
I said I would not speak at length. It is not my intention to speak much longer. I will close with this. I hope the minister is correct in his comments on the bill when he says he does not intend to proceed with mandatory minimum standards. I fear that is not the case. I urge all members to look at this question in terms of whether there are better ways to make our automobiles more efficient and to reduce our consumption of gas.
We should look, with the experience of the effect of excessive government regulation over the past 15 years, at better ways of achieving our goal than contemplating additional regulation. As a general rule, we should realize that regulation is useful and important when it serves the public good. For example, no one in the House would quarrel with regulations relating to the safety of automobiles. No one in the House would abandon the idea that automobiles should not be sold in this country unless they are safe to drive. When there is evidence that we must pay more than need be and that energy is being used inefficiently to achieve at best an environmental improvement, if we are to take seriously the issue the minister says this bill is about, I intend to go on urging a review of the regulations, notably in the emissions control area. They are causing job loss, additional cost and cause us to use more oil than need be used for apparently, on the basis of the most recent evidence, no significant benefit. It is only for that reason that I rose to speak tonight. I hope and pray that we will see the wisdom of what transpired in this area in the United States in the last year.


Raymond John Skelly: Mr. Speaker, I wish to place some remarks on the record concerning the bill presently before the House.
We must try to develop an effective program for a fuel-efficient automotive industry. As the minister pointed out, the transportation industry consumes an enormous proportion of the energy that we either develop or import into this country. Any savings in that sector, which is a maximum consumer of that worthwhile energy product, is certainly a worthwhile endeavour.
Unfortunately, when proceeding through the bill we find we are in a very typical situation that we find with the entire energy program. The goals as stated are generally sound in the sense that they purport to implement conservation and to proceed in a very rational manner. However, when we go
through the material in the legislation, we find that it is not a strong program. In fact, the government is backing away from its commitment to conservation and alternate energy. The bill provides loopholes which permit the industry to avoid what is seen by the Canadian public as acceptable and desirable levels of conservation and, in this case, the conservation of liquid transportation fuels. The previous speaker pointed out that conservation is extremely important. Unfortunately, he and his party are mistaken in many ways in believing that the marketplace alone will provide the correct approach to conservation. He is also mistaken in thinking it will develop the correct and acceptable product to serve the long-term interest of all Canadians. Without some form of guidance, some form of incentive, some form of example, the marketplace will probably provide the cheapest product that will return the greatest amount of money to the producer. That goal is not necessarily consistent with the needs of all Canadians. Unfortunately, the bill, although recognizing the need to conserve fuel through more stringent automobile consumption standards, does not provide the mechanism by which the accountability of those corporations can be ensured.
Our intention is to vote against this particular bill. Those consumption standards are not adequate and are not clearly defined, and a progressive and effective program for fuel efficiency standard has not been developed. There is no opportunity to develop conservation in a voluntary program, a program in which the government intends to try to jawbone or sweet-talk the industry into providing these standards.
A colleague who spoke before me hit the nail on the head when he said that the automobile industry is a North American industry; that this, is not a Canadian industry. The Americans will develop those automobiles in such a manner that they can survive in a very tough and competitive industry at this point in time. In the past, the auto industry, along with other industries with a North American orientation, have bashed the Canadian government into the earth when it has attempted to sweet-talk or jawbone them without putting in place an effective program of restraints. So, by and large, I do not think that the government intends to carry this through. This is certainly another Liberal sweet-talking proposition without enforcement. Clearly we support-and I think it has been supported on all sides-the concept of fuel efficiency standards for automobiles.
Again, as the minister pointed out, there is a need to provide for conversion from automobile fuel systems that involve gasoline and oil fuels into propane natural gas and other alternative fuels. Those programs are largely token, and not serious enough at this point in time.
Another objectionable facet of the bill-and again we take exception to the pasture of the previous speaker-is the matter of emission control. There is a recommendation in the report of the subcommittee report on acid rain that Canadian emission standards be brought down to the point where the United
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States emission standards are the ones adopted. The current U.S. standards of one gram per mile emission of nitrous oxides are far superior compared to the situation we have in Canada where we have an allowable emission standard of 3.1 grams per mile.
I would point out that with those emission standards, with the development of engines in Canada that do not recognize the important source of contamination of the environment, we are not going to ensure that those engines will curtail the emission of those contaminants, and therefore we will not support the bill on that basis.
In Clause 3 of the bill there is another point that is not acceptable. Throughout the committee hearings on Bill C-48 the opposition complained bitterly that the legislation did not spell out the goals and the mechanism by which we would reach these goals, this state of Valhalla, how we could reach a new effective national energy policy, but it allowed ministerial discretion. It allows the government, by regulation, to set goals and procedure. The unfortunate point is that this particular legislation in front of us today provides the same type of government by regulation, by ministerial discretion. Certainly, that is an offensive feature of this particular legislation.
In terms of the cabinet's ability to make regulations on fleet consumption standards, there appears to be a bit of contradiction on what the government proposed in the past. The background paper to Bill C-107 indicates that the government's goal is 8.6 litres per 100 kilometres by 1985, yet the Department of Transport announced in October 1981 that the desirable Canadian goal for fuel efficiency was 8.6 litres per 100 kilometres by 1982.
Again the government is backing away from a strong fuel efficiency commitment, and once it backs away from that commitment it will make regulations for enforcement, and then the enforcement will be put in place by ministerial discretion. Our party will not be supporting the bill, on the basis that we have had enough of this legislation, legislation through regulation and ministerial discretion, setting the timing of the policy. It is certainly not acceptable to us. The history of this government is that it has failed when it comes to mustering the resolve, necessary to put forward and enforce those goals in the interests of Canadians.
We find time after time that the interest of the oil companies and other major corporations is chosen, at the expense of the consumers and at the expense of small business. That has been the order of the day. This is government fear and lack of resolve. This is the history that has brought us to the sorry state in which we find ourselves today. As other members have pointed out, it is not the Conservative Party and it is not the New Democratic Party that has brought about this chaos within our energy policy, or the lack of an effective conservation program; it is the Liberal government and its lack of resolve in this area.
Another unacceptable feature in this particular legislation appears in Clause 5 in which the auto companies are given three years' grace before the new standards have to be met. That is unfortunate in some respects, but that is probably not the most offensive part of the legislation. If you are going to
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impose serious fuel efficiency standards on the auto manufacturers, if you are going to encourage Canadian companies or development companies to become involved, certainly there has to be lead time. Lead time for development of fuel efficiency engines is important, and the government must specify very clearly what is expected of the producers, and it must have in place a definition of what is wanted and needed by Canadian people. That is reasonable and just. It shows resolve in bringing about an effective fuel efficiency program. In that way those producers who need the lead time for development know what is expected, they know the targets they are working towards in order to produce the desired results. But when you waiver, when you lack resolve, and say, "Well, we are going to try and sweet-talk you into it," then the ultimate objective becomes the cheapest product possible, the one that will turn the greatest profit. Corporations can then cajole the government out of its commitment to fuel efficiency in favour of the dollar. The three years' period of grace would be an acceptable period and would make sense, if the government were determined to enforce fuel efficiency standards and develop in Canada a more effective conservation program in the utilization of the private automobile. On the basis of the open-endedness of Clause 5, we will not be supporting the bill.
As regards penalties for non-compliance, the minister has said in the House that there will be no proclamation of the legislation, no bringing into force the section on penalties. It is interesting that he said "We are going to let this lie for a period of time, we are going to sweet-talk the companies into voluntary standards for fuel efficiency." The reality, Mr. Speaker, is that the government is not going to last long enough to see the implementation, far less the results or failures of this program.
It is important to those who inherit the task that there be a proper lead time. If standards are to be set, they should be set now. We should let those companies which will be getting involved in research and development into fuel efficiency know where we intend to be down the road three years or down the road five years.
With respect to Clause 11 and the penalties for failure to meet the standards or failure to respond appropriately, it is unfortunate the clause is full of tremendous loopholes. As the previous speaker for the Conservative Party indicated, no company in Canada will every be convicted. No company in North America will ever be convicted of violating this particular provision because, first, I doubt if the Liberal party will be around long enough to be in a position to see the outcome of this legislation, second, the Liberals do not intend to proclaim it and, third, even if it was proclaimed, it is so full of loopholes a company could escape a conviction under almost any imaginable circumstances.
I suppose this bill is not entirely bad. There does appear to be some attempt to use fuel efficiency to shape, or at least protect, small companies with production runs of, I suppose,

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up to 1,000 automobiles a year. They would be exempt from some of the provisions in this legislation. That seems to make sense, and I suppose it is a recognition that Canada does have some footholds in the automobile industry. There are Canadian-owned operations in which specialty equipment, trucks and other vehicles are developed. As well as protecting Canadian industry and encouraging it, the fuel efficiency requirements might also even encourage employment and development. Contrary to what the previous speaker said, they might provide some opportunity or an expanded opportunity for Canadians to develop a presence in the automobile industry and especially in this specialized area.
I would like to take a few moments to develop the idea that the bill is probably another example of a token approach to what is really needed. Instead of considering this piece of legislation before us tonight and the design of this legislation, I would like to point out some of the shortcomings in the philosophy which underpins our whole system. We in our party have argued that strong legislation and programs should be brought forward, but legislation such as this and other programs the government has brought forward are tokens. Energy demonstration projects are certainly a good idea to move communities off oil and on to other more acceptable forms of energy. Conversion to propane and natural gas is certainly an excellent proposal. Insulation programs aimed at conservation are good, with the exception of the colossal failure of the urea formaldehyde mess. With that exception, these are solid programs which take us in the direction we should be going. They are the ones which ultimately will create most of the employment in this country and the development of long-term renewable alternate energy sources which would have fewer detrimental effects on the environment in the long run. I do not think anyone in this House disagrees with that. Such energy sources will be our ultimate security.
Everyone agrees that there must be a dislocation period during which the need for alternate energy and stringent conservation measures must be recognized. Those measures must be developed and implemented, and it will take time before we actually begin to realize the benefits.
Unfortunately, time and time again over the years we have seen examples of the very shortsighted policy of the government, and there has been a message in that. We have always opted for the most expensive and dangerous projects. Down the road when our children are cleaning up the mess we will have left behind those projects will be viewed as some of the most stupid ever developed.
I will touch just lightly on some hard commitments the government has made while it relies on bills like this and other programs which are token commitments. I listened with interest to the minister today as he spoke about the need for alternate energy and conservation methods. We also listened to him the other day when he spoke about his atomic energy program. The government should be prepared to spend some of the money spent on the atomic energy program on research and development into more efficient fuels for transportation or to assist in research and development into more effective
engines for automobiles and aircraft. I have heard my colleagues from Saskatchewan talk about the electrification of railroads. Imagine where we would be if we were serious about alternate fuels for transportation and used some of the money we have dumped into the Candu program over the years for research and development into that. For decades Canadian taxpayers have dumped tremendous amounts of money into the Candu program.
I want to elaborate for a moment on the question of our approach to atomic energy to demonstrate where we will wind up with that approach compared with where we would wind up if we put more emphasis on conservation and alternate energy. We are aware that the Canadian government has made a tremendous investment in the development of nuclear power and the development of nuclear fuels. That investment culminated in 1974, in the fact that India used our technology to explode a nuclear weapon. India became a nuclear power and exacerbated the problem of nuclear proliferation, which is probably the most serious problem human beings have.
Alastair Gillespie was mentioned in the House just a few moments ago. He is a former minister of energy, mines and resources. The previous speaker said much about Mr. Gillespie's contribution to the energy policy of Canada. I have always remembered a statement made by Mr. Gillespie after the Indian government exploded a nuclear weapon. He said he regretted it very much but that Canadians had made a massive investment. He was asked if the Canadian government would stop the production and sale of the Candu reactor, and his answer was no. He said that Canada had made a massive investment in nuclear technology and had a right to expect a return on the investment. That statement stands out starkly in the minds of many Canadians. That is the most blatant gun-seller mentality imaginable. Considering the ultimate price of the proliferation of nuclear weapons and the proliferation of nuclear wastes in the environment for who knows how long, there are not many Canadians who want that return on their investment. However, the government does not learn. Instead of opting for tremendous investments in a secure energy future and in technology for energy conservation and developing alternate sources, we continue to plow money into this very dangerous and expensive lemon.
There is now a problem in Argentina. With respect to weapons, wastes and technology failures, Mr. Gillespie's bottom line was that Canadians have a right to expect a return on their investment. That stands as the guiding policy of the government. Perhaps some hon. members opposite will stand and refute that, but the Canadian government sold a nuclear reactor to Argentina for S500 million. It was a great deal, but the unfortunate thing was that it represented a loss of $130 million to Canadian taxpayers. We paid Argentina a large chunk of money to buy a reactor. Canadian taxpayers are paying for that. Instead of investing $130 million in alternate energy to provide Canadians with a secure and safe energy future, we gave that $130 million to the Argentinians, who would not sign the nuclear non-proliferation treaty. As a matter of fact, their statement on the issue was that Argentina
April 20, 1982

wanted to keep its nuclear weapons options open. The other day the minister stood in the House and said that what the Argentinians had done was crazy. He said that if they had wanted to build a nuclear weapon, they should never have bought a Candu reactor.
On the other side of the coin, the Argentinians seemed convinced that this was the way to travel. There are other authorities who would dispute what the minister said. They would say that probably one of the best investments the Argentinians could make, if they wanted to build a bomb, was in the Candu reactor, especially if Canada was willing to continue to sell the Argentinians uranium to fuel the process. I understand that Argentina is now building two plutonium separators. That is an excellent approach if they want to build a nuclear weapon. Of course, Argentina today is a military dictatorship. It does not have very much concern for the citizens of its own country and is prepared to use military aggression in other parts of the world, and certainly could not be expected to have too much compunction about building a weapon. If that occurs, it will be interesting to see the reaction of hon. members opposite when we have to say again, "We told you so."
Why are we not investing that money in safe, secure sources of alternative energy-not nuclear-and in conservation programs instead? Where did the $130 million go that we spent to build a bomb for Argentina? It went to making a more dangerous world, one that is not safe and secure for Canadians. That is a very sad commentary on the government's policy. We have here a half-hearted bill regarding the conservation of liquid fuels through more fuel efficiency in the automobile engine and, on the other hand, we are making a tremendous commitment to a very dangerous and insecure source of energy.
It has been pointed out many times that we should be moving toward development alternate energy and conservation as our security for the future and that we should be building up the necessary technology. That will not come about tomorrow. There will be some dislocation and problems with putting it in place, but we are not making the financial commitments necessary to do this. This has been remarked upon by backbenchers in all parties except that the government does not seem to have the commitment to carry it out and in the long run we will all suffer.
The nuclear energy example, dangerous and expensive as it is with its lack of security, is not the only example of an insane policy which is being followed, almost in contradiction of the policies that the party opposite has developed.
The offshore oil and gas seems to be the be-all and end-all for Canadians. As in the nuclear case, it is extremely expensive. We have heard many times in the House about the cost of drilling dry holes in the Atlantic Ocean off the coast of Labrador. In the committee hearings on Bill C-48 we heard about the cost of drilling holes in the Arctic Ocean and off the coast
Fuel Consumption Standards
of British Columbia. There are enormous costs and enormous risks involved.
Instead of taking the more appropriate approach of guarding and husbanding the resources that we already have in the conventional area and making the conversion as quickly as we can in other areas where we have conventional fields, we are putting all our effort into the development of the frontier and the offshore. This will cost us dearly, Mr. Speaker.
It is amazing to hear Dome Petroleum asking the Japanese to contribute $400 million in return for one quarter of the oil it discovers-if the Canadian government will rubber-stamp the deal. The Japanese are constructing one of the world's largest icebreaking tankers. That is not for getting oil from Viet Nam, Mr. Speaker; it is for getting it out of the Beaufort Sea. In the past, oil companies have agreed to take the risks if our taxpayers will bear the bulk of the cost and if they are given tax concessions and grants and if the price of the oil is set at what the market will bear. Since there is a glut of oil and the companies need a return on investment and an enhanced cash flow, they expect to export the oil.
It is a vicious circle and an expensive drain on the industrial and economic potential of this country. This is not a secure source of energy; it is expensive and it is extremely dangerous. We saw what happened with the Campeche accident in the Gulf of Mexico. An oil platform broke loose and for months and months it pumped oil into the Caribbean. Yet we are prepared to take risks far greater than were taken at Campeche.
It was interesting to listen to representatives of one of the oil companies who appeared before the committee that was considering Bill C-48. They claimed to have planted a fixture on the bottom of the Arctic Ocean and so they no longer needed the rigs. But what if that should break loose, Mr. Speaker? Would we ever be able to stop the flow? Would we ever be able to deal with it under the ice? We are fooling around with one of the most dangerous and most expensive sources of oil. All our money is going into that and we are ignoring the rational, the safe and the secure future that alternative sources of fuel conservation offer.
Our best course lies with the non-conventional fuels. Tonight the minister said he would put guidelines in place in the first phase with some legislation but that he was not going to bring the second part into force or encourage manufacturers to get serious about fuel efficiency in automobiles. Rather, he seemed to hope that their conscience would dictate the correct course to take.
We have a commitment to back foreign-owned oil companies such as Imperial Oil, Shell Oil, Texaco, Chevron and all those beauties of the past to develop our non-conventional fuel sources. We see them moving into heavy oil development in the Cold Lake project and the Alsands project. We watched them perform with Syncrude. This is a complete repetition of the cycle we have always known when the government chooses this course to be carried out by the multinational oil companies as the major players and as we get into the more expensive options, the more risky options involving large deployment of

April 20, 1982
Fuel Consumption Standards
capital. We are not talking about small entrepreneurs or gas station operators here; we are talking about corporations that are completely integrated, from gas pumps to the exploration and support services.
The small entrepreneurs in the oil business-and perhaps the Conservatives hit the nail on the head here-are not just moving, they are being driven out because we do not have a commonsense, safe and secure approach to energy development. Options are being exercised in these non-conventional areas by companies like Imperial Oil.
I have listened to many of my colleagues on the right say what a terrible thing it would be if we took Imperial Oil over. But Mr. Speaker, that would give the Canadian public a greater window on the industry, and more influence in directing the industry in the husbanding and development of that resource. The attitude has always been to let that go in and develop because they have the expertise and they can generate the capital. But all we get from them is the same old routine that we got from them with the development of conventional sources. They said they want to increase the price. They want more tax incentives, more direct contributions from the tax payers. When that was not enough, they said, "Sorry, we are going to shut it down." Ultimately they will want to export it.
We have been on this route before, Mr. Speaker. The unfortunate aspect is that the cycle of energy development, the mistakes and shortsightedness which have brought us to this very sorry state today, are the product of the inactivity of the Liberal government. In the early days we saw Canadian entrepreneurs moving into development of the oil industry with some relative success. From there we moved into a period of takeovers where the multinational oil companies moved in to gain control because the Liberal government ignored the need to protect Canadian consumers and businesses. We now have hit a period of crisis in which the product is in short supply and manipulations occur. Now the Liberal government is moving forward with some fairly drastic changes which could have been brought in before the takeover occurred. The guidelines could have been laid down in the beginning, saying that we want accountability, we want rational development and exploitation of that product for Canadians, not for the multinationals and their shareholders who live in other countries.
It is interesting that for a period of time those multinational corporations in Canada, led by the energy corporations, became an instrument of American government policy working in Canada. That was an unfortunate extraterritorial application of the laws and policies of the U.S. in this country. Not only was the Liberal government abrogating its responsibilities to the people for the protection of their resources but they allowed, by neglect, the American government to impose their law and economic policies in this country. However, we seem to have come to a transition point in the history of our development of energy resources in which the energy companies are spreading out into other areas such as uranium and coal development. I think they probably recognize that the oil
era is passing and there will have to be development in new areas. We see them moving into minerals and other energy sources, but unfortunately we do not seem to be laying down the guidelines there and history is going to repeat itself. We are still stressing this dangerous approach of high priced conventional energy, or these equally dangerous nuclear alternatives. It is time that we took a step beyond that and said that we as Canadians are going to begin to develop and capture a technology based on safe alternative sources of energy and conservation. Ultimately that will mean a safer and more effective energy future for Canadians.
This, Mr. Speaker, is the kind of alternative we want to have to the rather insane and, if you will, stupid energy policy put forward by the Liberal government. There are aspects of it which, on the surface, look okay, such as the goals, but certainly there is no commitment to demand accountability from the energy corporations, there is no commitment to protect the resource for Canadians. Unfortunately, the bill before us does not represent that kind of commitment, and we will not be supporting it for that reason.


Some hon. Members:: Hear, hear!


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


Some hon. Members:: Question.


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


Some hon. Members:: Yea.


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


Some hon. Members:: Nay.


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


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


Madam Speaker:: I declare the motion carried. The bill is therefore referred to the Standing Committee on Energy Legislation.


[Stage Direction]
Motion agreed to, bill read the second time and referred to the Standing Committee on Energy Legislation.
*
* *

[Stage Direction]
Canada Business Corporations Act and referred to the Standing Committee on Energy Legislation.
He said: Madam Speaker, the bill that we are now considering is Bill C-105, a bill that amends the Canada Business Corporations Act, a piece of legislation that was formerly a part of Bill C-94, the energy security bill. In essence, the changes this bill will make to the Canada Business Corporations Act will allow federally-chartered corporations to place constraints and, in certain circumstances, to acquire their own shares. This will permit firms to obtain and maintain specific levels of Canadian ownership among the shareholders of the firms in a manner that existing shareholders decide is appropriate.
The National Energy Program proposes a reordering of the energy industry in Canada, particularly in relation to ownership and control. Increased ownership by Canadians will help ensure that Canadian supplies will be secured for Canadian use, that Canadians will have full and fair opportunity to participate in the economic benefits that will flow from the massive investments in equipment and labour for energy-related projects, and that such projects will result in fair prices for Canadians.
[Stage Direction]
Hon. members are aware that the Petroleum Incentives Program and the plan for determination of Canadian ownership rate and control status proposed in Bill C-104, an Act respecting Petroleum Incentives and Canadian Ownership and Control Determination, constitute the framework for a Canadian ownership policy as outlined in the National Energy Program. Criteria are to be established to measure the level of Canadian ownership and control in companies operating in the Canadian oil and gas industry. In fact, determination of the Canadian ownership rate is required for a number of programs connected with the National Energy Program.
The most important of these is, of course, the Petroleum Incentives Program, which will provide funds to companies on the basis of their Canadian ownership rate. The Canadian ownership rate is also an indispensable part of other areas of the National Energy Program. For instance, the Canada Oil and Gas Act requires an applicant to have a Canadian ownership rate of at least 50 per cent in order to qualify for a production licence for the Canada lands. The enterprises themselves decide whether they want to raise their Canadian ownership rate and how they want to go about it. Our position in this respect is neutral. However, in some cases, companies may wish to take steps to increase the number of shares held by Canadians. The proposed amendments to the Canada Business Corporations Act, which governs incorporation of companies at the federal level, will enable these corporations to take the necessary steps to have their shareholders meet the conditions laid down in Bill C-104.
Marc Lalonde: that Bill C-105, an Act to amend the Canada Business Corporations Act, be read the second time
Mr. Speaker, these changes in the Canadian Business Corporations Act were necessary. A company's Canadian ownership rate is very important for certain measures of the

April 20, 1982
Canada Business Corporations Act
National Energy Program, and it would not have made sense to set ownership criteria which the corporations would not be able to observe or maintain on a permanent basis. In reviewing the legal framework within which corporations must operate, and especially the Canadian Business Corporations Act, it became clear that the present provisions of the act were incompatible with the objectives of the National Energy Program. For instance, to achieve a given rate of Canadian ownership, a corporation might wish to buy back shares held by non-Canadian shareholders, assuming that the shareholders would be willing to sell their shares, which would then be offered to Canadians. In its present form, the Canadian Business Corporations Act would rule out these possibilities.
Let us take another example. A company might wish to impose constraints on the ownership of new shares the company is issuing. Our present legislation on Canadian business corporations would not allow this. Furthermore, without the changes we are proposing, once a company's Canadian ownership rate was achieved, it would be at the mercy of financial market transactions. New investments made by non-Canadians might substantially reduce the profits of the Canadian corporation by causing its Canadian ownership rate to drop, thus restricting its access to certain advantages under the National Energy Program or even disqualifying it for certain licences or permits.

The challenge to us, then, is to amend the Canada Business Corporations Act so that it provides the necessary mechanisms to allow firms to respond to the opportunities offered by the National Energy Program, while at the same time continues to provide protection to shareholders.
As an example, a firm should not be allowed to acquire its own shares unfettered by any restrictions, because this might allow the management of a firm to entrench itself. Neither should a firm be allowed to place any constraint it might wish on ownership. Such a step could allow a firm to eliminate certain shareholders, as an example, for reasons relating to differences of opinion within the company. Clearly, this kind of result would be unacceptable. As a result, the changes this bill will make, although significant in so far as the National Energy Program is concerned, are strictly limited in their effects.
The two major thrusts of these amendments are as follows: to permit firms to acquire their own shares in accordance with specified terms and conditions, and to give firms the authority to place constraints on the ownership of new classes of shares and to enforce those constraints by permitting the firm to enforce the sale of the shares of a shareholder who contravenes the ownership constraint.
To ensure that shareholders' rights are protected, we have also proposed an amendment to the act in order that these new powers will not be abused. In fact, these amendments are applicable only, and I repeat, only when a firm wishes to qualify for incentives, grants, permits, licences and the like- as an example the petroleum incentives payments-that have
been established under a prescribed Canadian or provincial law, conditional on levels of Canadian ownership. I stress, they cannot be used for any other purpose. We believe these amendments continue to provide shareholders with the kind of protection they have a right to expect under Canadian business law.
First, a corporation cannot acquire its own shares if they are subject to ownership constraints. Further, if a firm acquires shares, that firm can only hold them for two years. If it were to hold them beyond that period, such shares, as is normally the case under the Canada Business Corporations Act, would be effectively cancelled. We regard this period as an adequate time in which any such shares can be resold to new owners.
Second, a firm holding its own shares cannot vote those shares except in the narrow situation where, although it holds the shares, it is the legal representative for someone else. And, third, if a share bears a constraint, that fact must be shown clearly and prominently on the share certificate.
I should also mention that shareholders are also protected if a corporation decides to enforce an ownership constraint. The corporation will be required to notify a shareholder before taking any action to enforce ownership constraints and to give the shareholder an opportunity to sell his or her own shares before the corporation acts to sell the shareholder out. Notice provisions are to be set out in the regulations.
In considering the changes that we are proposing to the Canada Business Corporations Act, there are some points that require emphasis.
I believe that the changes that we are proposing to the Canada Business Corporations Act are fundamentally fair- fair to companies wishing to participate in the development of Canada's energy future, and fair to all investors who have, and who will provide, the capital that allows these firms to grow and thrive.
It was in that spirit, after additional discussions with industry, that we concluded that the provisions allowing for the application of ownership constraints to outstanding classes of shares-as were contained in Bill C-94-were no longer essential.


Some hon. Members:: Hear, hear!


Marc Lalonde: Since there was little indication that firms would use this provision, and because of concerns, however unjustified, that had been raised in the investment community with regard to these provisions, the amendments in this bill have been revised to remove ownership constraints on outstanding issues of shares.
By limiting the imposition of ownership constraints to new shares, I believe we will ensure that there will be no misunderstandings among investors as to whether or not a share is constrained. By allowing firms to place additional constraints only on new classes of shares and by requiring full disclosure of such constraints, the existence of those constraints will be
April 20, 1982

clear to all investors. We will thereby avoid widespread uncertainty in the capital markets that could affect the standing and value of many other stock issues, if ownership constraints could be applied to outstanding classes of shares.
By ensuring that the changes in the Canada Business Corporations Act allow companies to take Canadianization measures only under specific circumstances and for specific reasons, I believe that we have shown once again that the National Energy Program can be, and certainly is, sensitive and responsive to the needs of the Canadian business community and the need that Canadian business has to gain access to the capital markets of the nation and of the world.


Some hon. Members:: Hear, hear!


Hon. Sinclair Stevens (York-Peel):: Mr. Speaker, I am always amazed how a minister of this government can stand up and express, in what appears to be such innocent terms one of the most ominous and offensive pieces of legislation that any government has ever brought into the House.
It would be better to entitle this bill if you would, the predatory practices act, because in fact what we are being asked to endorse here is a piece of corporate legislation which literally will let some of the foxes in the business community of this country into the chicken pen.
Let me explain this. The minister has indicated that the bill's thrust is strictly limited. That is what he said, that it is limited in its effect in that, on the one hand, it will permit companies to buy their own shares under certain circumstances. He then went on to state that it will also allow companies, in effect, to buy shares that are outstanding at certain times and in that way, literally confiscate the shares of a shareholder as the directors from time to time may see fit.
Granted, Mr. Speaker, there are certain requirements that must be met before they can do that; but what I think is particularly important for us in the House to consider is what the precedent is that is being set here.
To suggest that the directors of a corporation at any time should have the right literally to buy out, or sell to others, shares, notwithstanding the fact that those shares may be owned by foreigners or otherwise, is something that is totally offensive to the concept of corporations and corporate law generally.
As you know, Mr. Speaker, the Ontario Securities Commission and certain other regulatory bodies have already expressed grave concern over this legislation. They have indicated that they believe that many individual shareholders will be victimized by those who may, through the boards of director's resolution approach, simply decide to sell out those shareholders, presumably against their will.
Let us put it into focus. Let us put into focus what the minister is really saying here. If we take a look at Bill C-105, we will find that the offensive provisions start on page 4, where it is stated that:
Canada Business Corporations Act
A corporation that has constraints on the issue, transfer or ownership of its shares of any class or series in order to assist the corporation or any of its affiliates or associates-
And here are the interesting words, Mr. Speaker, where it
says:
-to qualify under any prescribed law of Canada or a province to receive licences, permits, grants, payments or other benefits by reason of attaining or maintaining a specified level of Canadian ownership or control may, for that purpose or for the purpose of attaining or maintaining a level of Canadian ownership or control specified in its articles, under such conditions and after giving such notice as may be prescribed, sell, as if it were the owner thereof-
That is, Mr. Speaker, a corporation through its directors may sell a person's shares as if the corporation owned the shares. It continues:
-any of such constrained shares that are owned, or that the directors determine in such manner as may be prescribed may be owned, contrary to the constraints.
Then they go on to say that the directors must at least do it somewhat fairly and they must watch that they do not:
-unfairly disregard the interests of, the holders of the shares in the constrained class or series taken as a whole.
In short, what is being proposed is that the directors, who are normally-bear this is mind-looked upon as some kind of a trustee on behalf of the shareholders, are going to be empowered now, notwithstanding their trustee relationship to those shareholders, to check off individually and buy out certain of those shareholders if the shareholder is deemed to be somehow in a position contrary to the constraints position.
I noticed that the minister skirted around this. But in the press release accompanying this bill he pointed out at that time that he thought he had watered down the provisions a little. Obviously he was feeling the sting of some of the opposition that had already been voiced by such bodies as the Ontario Securities Commission. The minister suggested that the amendment that has been made, compared to the comparable provisions of Bill C-94, that aborted bill, the amendment that he had seen fit to make, really would take away any particular problem with regard to existing shareholders.
Presumably he is referring to the new provision put in at page 9 which says that one of the paragraphs which I have referred to:
-does not permit a constraint on the issue, transfer or ownership of shares of any class or series of which any shares are outstanding unless the shares are already subject to a constraint permitted under that paragraph.
This is what I find to be so devious about this government. It plunks in that provision, puts out a news release to throw people off guard and, in effect, tries to get the Canadian public to buy the proposition that whatever people were worried about as far as amendments to the Canada Business Corporations Act are concerned, they need worry no longer, the government has amended it and it does not affect existing shareholders any longer. Mr. Speaker, you have been in this House long enough to know the tricky nature of this government. You have known the lengths to which hon. members opposite will go to deceive the Canadian public. We know how they deceived the Canadian public simply to get elected back

April 20, 1982
Canada Business Corporations Act
to the government benches of the House back in 1980. Whatever hostility from the Canadian public hon. members opposite are sensing, it has not dissuaded them from trying to deceive the Canadian public once again with Bill C-105.
I know the reason. The little amendment the government put in covers the possibility that a shareholder will have his shares sold out from under him, notwithstanding the fact that he is an existing shareholder, but it does not cover the possibility of somebody now taking advantage of this act, if it is passed, and taking advantage of the provisions of the Canada Business Corporations Act to incorporate a new company under the Canada Business Corporations Act. Under that new company there would be share provisions which would be constrained, and then they move in like the old fox in the chicken house. They make an offer to take over the poor subject company, be it provincial-and let us not forget that-or federal. Once they have at least 51 per cent of that poor subject chicken company, then they can remove the directors of that company, cause those directors either to agree to a wind-up of the company in favour of the parent or to sell the assets of that company in favour of the parent, and guess what they are going to offer in exchange for what you owned up until then? They are going to offer you these constrained shares which this act would permit the directors to gobble up and sell to their Liberal friends-or guess who-in contravention of the Canada Business Corporations Act as it now exists.
The minister says this is a very innocent little provision and that all it is designed to do is to allow people who think they would like to share in the petroleum incentive payments somehow to put their houses in order and look after any of those foreign shareholders who might be out there who somehow or other are beyond the Canadian ownership rating that they may desire.
Let us not be fooled. There are many companies in Canada under federal laws which somehow or other have Canadian ownership requirement tests to meet. I will read out various acts, but I can tell hon. members that if they were incorporated and needed some type of licencing or other arrangements under any of the following acts, they would be subject to the provisions we are being asked to rubberstamp in the House this evening. Acts which have Canadian content requirements are the Aeronautics Act, the Canadian Radio-Television and Telecommunications Commission Act, the Broadcasting Act, the Bank Act, the Canadian and British Insurance Companies Act, the Foreign Insurance Companies Act, the Investment Companies Act, the Loan Companies Act, the Trust Companies Act, the Canada mining regulations, the Canada oil and gas land regulations, northern mineral exploration assistance regulations, the Fisheries Act, the Coastal Fisheries Protection Act, the Canada Development Corporation Act, the Telesat Canada Act, regional development incentives regulations and the Western Grain Stabilization Act. Those are acts passed only under the federal jurisdiction which have requirements within them which say that if you want to get a licence, you
have to meet certain Canadian ownership minimum requirements. That would apply to those who want to utilize that "innocent little provision" that the fox over there is attempting to get this House to endorse.
I have in my hand a volume covering all the provincial acts which would be subject to the same provision. For the benefit of those who have forgotten the wording used by the minister, he covers not only federal laws but also provincial laws. The bill states:
-to qualify under any prescribed law of Canada or a province to receive licences, permits, grants, payments or other benefits by reason of attaining or maintaining a specified level of Canadian ownership or control.
It is intended to catch not just those federal companies which have to qualify under the acts to which I have referred but also provincially incorporated bodies which wish to do things which require licences.
The list of statutes I have in my hand is broken down by province. Perhaps hon. members from provinces other than mine would like to know some of the statutes in their provinces which will be affected if this legislation goes through. The following is a list of the statutes of Ontario which we will have to watch from now on, if the fox gets his way: under "financial" there is the Business Corporations Act, the Collection Agencies Act, the Insurance Act, the Loan and Trust Corporations Act, the Mortgage Brokers Act, the Real Estate and Business Brokers Act and the Securities Act. Those are all Ontario acts requiring licencing. In the energy sector the Ontario Energy Corporation Act would be affected. Under "land" there is the Land Transfer Tax Act and the Public Lands Act. Under "publishing" there is the Paperback and Periodical Distributors Act and the Theatres Act. Under "transportation" there is the Ontario Transportation Development Corporation Act. There is also the Co-operative Corporations Act and the Liquor Licence Act. All of those are Ontario acts requiring some type of licencing to include a Canadian ownership requirement. If the provision we are being asked to consider passes-it is certainly a unique provision in corporate legislation in Canada and possibly in the world-all those Ontario acts cover companies which require licencing only after there is a certain COR rating, and a predator, as I said earlier, could use this new Canada Business Corporations Act to move in on you, gobble you up and give you the shares that he in turn, if a foreign element was involved, could sell out at whatever price the directors felt was fair.
I hope hon. members will not take this lightly. The government has shattered our oil and gas industry dramatically through the National Energy Program. This was discussed, for example, in the April, 1982 edition of Executive magazine.


Marc Lalonde: Don't believe that.


Sinclair McKnight Stevens: The minister says, "Don't believe that". If he has read it, I am sure he wishes that much that was written had never been written. Leave it to him; he would try to shut off that kind of free press.


Some hon. Members:: Oh, oh!
April 20, 1982


Sinclair McKnight Stevens: This is what one columnist had to say in that magazine about the minister's National Energy Program under the heading "Canada's Collapse Began with the NEP":
Before NEP, the strontly rising volume of investment in oil and gas exploration and development had been driving the whole economy forward. Every dollar invested by the petroleum industry multiplied two to three times through the economy in purchases of equipment and services.
Since NEP, the industry's investment here has been drastically reduced, by 30 per cent to 40 per cent through 1981 and by at least that much again this year. These are not now recoverable funds. They have either been committed outside Canada or absorbed by government.


Marc Lalonde: He has got his facts wrong.


Sinclair McKnight Stevens: The minister says he has got his facts wrong. I would challenge the minister to stand up and debate the question that John Meyer is referring to and show us what he believes is wrong about Meyer's statement.


Marc Lalonde: Mr. Speaker, I will be very happy to rise to the challenge and bring to the attention of my hon. friend a report issued by the United States Department of Commerce last week. 1 will not quote a Canadian document because the Conservative party does not believe in anything done in Canada or in Canadianization, so I will go to the Americans and quote the document prepared by the United States Department of Commerce. It foresees that in 1982 the subsidiary companies of American corporations in Canada in the oil and gas business are going to increase their investment by 28 per cent compared to last year. That compares with increases of an average of 18 per cent in the rest of the world by the same corporations. American investors have more confidence in this country that the Conservative opposition does.


Some hon. Members:: Hear, hear!


Sinclair McKnight Stevens: I thank the minister for helping to make my argument, but he missed the point. John Meyer said that investment had been reduced by 30 to 40 per cent in 1981. The government is now collecting figures from the Department of Commerce in Washington that show investment will be up by 18 per cent-


Marc Lalonde: Twenty-eight per cent.


Sinclair McKnight Stevens: -by 28 per cent over last year. But having fallen 30 to 40 per cent last year, if the minister is correct, they are still not back to where they were in 1980!


Marc Lalonde: Try again.


Sinclair McKnight Stevens: The minister has demonstrated that there has been a slowdown as far as the National Energy Program is concerned and that it has affected our economy.
Let me go on and quote what John Meyer said, quite accurately, in other parts of his column. He said:
For the better part of a decade, government has been reaching out to capture key elements in the economy, to transform them into instruments for implementing its vision of the corporate state-that is, one in which political authority is assured by control over investment and production.
Canada Business Corporations Act
How relevant that comment is in relation to Bill C-105. I have dealt generally with the effect Bill C-105 would have and the fact that it would allow companies to become very predatory in the corporate field. But it will also apply to government owned companies, to those that the minister claims he wants to have incorporated under the Canada Business Corporations Act. I can see the possibility that not only would private concerns be taking advantage of these confiscation provisions that the minister wants us to accept, but Crown corporations will be going after other companies in this country.
John Meyer gives figures to demonstrate the deterioration of our economy, faulting the National Energy Program and pointing out that it is this state interventionist type of approach that is causing such dramatic deterioration in our economy. For example, he states as follows:
Many explanations for Canada's fading economic performance were given through the 1970s. The most persuasive was that having passed through its development phase, the economy had now reached a maturity in which policy emphasis should be on the redistribution of wealth rather than the creation of new wealth.
That, unfortunately, appears to be the government's main thrust-do not create something new but concentrate on redistributing what others have built up in the form of wealth.
I would emphasize that this provision is unique. It will set the precedent of allowing the directors of a company literally to have the power to sell out shareholders because those shareholders have, somehow or other, been deemed to have contravened certain share provisions.
Let us not forget the traditional role of a director as far as a corporation is concerned. In England, directors are treated as a profession. They are invited, as professionals, to join a board, and it is clearly understood that their duty on behalf of the shareholders is to supervise, control and regulate the officers of the company so that they will work in the best interests of the shareholders. It is a trustee-shareholder relationship. They find the more Americanized type of approach very strange where officers of a corporation actually sit as directors.
Perhaps if we turned to some of the text books on corporate law we would get a better understanding of how important it is to preserve this fiduciary relationship between shareholder and director. In Fraser's Handbook on Canadian Company Law, Sixth Edition, 1975, which is edited by Horsley and Sutherland, there appears the following passage on page 1:
Among other advantages of incorporation is the control which the shareholders can exercise over those who manage the company's undertaking, viz., the directors. The latter are special agents and have only such powers as are given them by the governing statute and the regulations of the company.
That has been the corporate law, and the tradition up to the present time. What the minister, in his devious way, is attempting to do is basically to change the whole corporate approach in Canada. He is now suggesting that those directors, after having been elected by shareholders, should have the power, in certain circumstances, to sell out the very shareholders who may have voted to put them in power. It is like setting up a trust and, having appointed various trustees to handle the affairs, in turn giving them by statute the power to sell out the

April 20, 1982
Canada Business Corporations Act
beneficiaries because they do not meet certain tests that the directors feel should be met because they want to apply for some licences or get into some other activity. That is what I feel is grossly unfair in the government's approach in this bill.
The same attitude is taken in another text book entitled Canadian Business Corporations, edited by Pilkington and Prichard. At page 286 there appears the following statement:
Since directors and officers are entrusted with the management of the property and assets of the corporation, which in turn is owned by the shareholders, they are subject to fiduciary duties.
That is the essence of what we are talking about. It is not right, through a statutory provision, to allow those directors to literally defeat the fiduciary relationship they have been put in.
The reason that it is important that we persuade the minister to back off his intentions is that not only will it have consequences in Canada on Canadian investment-it may set a very nasty precedent that will be adopted in other statutes- but it is going to advertise to the world that Canada is no longer a country where you can have the economic freedom that people in the western industrialized nations have generally expected.


Mr. Blenkarn:: He wants to make us a banana republic.


Sinclair McKnight Stevens: It will put us in the position where investors from other countries, before they put their money at risk in Canada, will draw back and say that it is a rather peculiar country we have there. At least their government on occasion has empowered people literally to buy us out at some price to be determined by them, selling to some person to be determined by them, and from then on we will have no further rights other than to claim whatever money they deem to be appropriate with respect to our investment. How would you feel if you were thinking of making an investment in New York State or California and your lawyer told you that under certain circumstances you may be sold out with absolutely no control over the proceeds from your initial investment? That is what this minister is proposing.
These proposals are not only with reference to the resource field, as he says. He is proposing a basic change to the Canada Business Corporations Act which will affect any corporation which desires to be licensed under a federal or provincial act, and I have referred to some of them. They need to show a certain Canadian ownership level. That is what he is proposing. That is why I think it is time that we in the House said, "No, Mr. Minister. You may want to help your friends"-and we know the friend he is trying to help-"but you had better find another way rather than changing the whole corporate law of this country." In short, if he feels he has difficulty in allowing people to comply with whatever regulations he is putting in place with respect to Canadian ownership, that is his problem and his friends' problem. It should not only every federal company but, indirectly, every provincial company as well.
There was an interesting article entitled "A Survey of Economic Freedoms" written by Lindsay M. Wright, a
research associate with the Comparative Survey of Freedom. He discusses various aspects of democratic freedoms, including economic freedom. He points out:
In order to determine their personal and collective economic destinies, individuals and groups must be able to enjoy certain economic freedoms that protect them, within the limits determined by society, from arbitrary and illegitimate interference by others in their economic activities. The four basic economic freedoms considered below are (1) freedom to have property, (2) freedom of association, (3) freedom of movement, and (4) freedom of information, as these relate to economic activities.
Hon. members will note that the first one listed is freedom to have property. It is that freedom which we are taking away tonight if we agree to go along with the minister's suggestion that under certain circumstances property can be confiscated in the way he is proposing. Bear in mind that once you detract from economic freedom, you will have an equal detraction from political freedom. In short, this is something which must be resisted, and I only hope that members who feel there is already too much government encroachment in Canada, too much statism, will stand up and be counted on this issue. Thank you, Mr. Speaker.


Some hon. Members:: Hear, hear!


Ian Gardiner Waddell: Mr. Speaker, I could not help hearing the groans from my colleagues behind and around me as the hon. member who just spoke so well went on and on and on. It reminded me of a book I used to read in law school on company law. I suppose some of my colleagues can thank God they never went to law school.
In speaking to this bill I want first to deal with some remarks of the minister and then with some of the points made by the last speaker. I would then like to go into some of our detailed criticisms of the bill. The minister said a few minutes ago, "Increased ownership by Canadians means Canadian energy supplies will be secured for Canadian use". One has to ask, Mr. Speaker, increased ownership by whom, by how many Canadians? The answer is, by few Canadians, by shareholders. Most of the people in my riding do not own shares of companies. As a matter of fact, very few people in the country own shares, considering the total population.
In spite of the rhetoric about property rights we heard from the previous speaker, basically what the government proposes is a Canadianization program through private shareholders. That has been quite clear in the last few days in the House. It will be achieved by the PIP and COR programs, by giving $6.5 billion in grants to private Canadian companies. So the question is, I suppose, if we give control to these shareholders, if we give ownership to these few Canadians, can we have energy security? That raises the question of whether they will act any differently from the way shareholders, directors and officers of oil companies have acted in the past, that is, for-eign-controlled oil companies, because you will recall that this is a country which has let its oil industry be foreign-controlled to the extent of about 70 per cent or 75 per cent. No other OECD country would permit that, as the minister pointed out the other day.
April 20, 1982

We have to look, Mr. Speaker, at the history of how private shareholders of Canadian energy companies and the private companies have dealt with our energy security. I think most Canadians can understand that history, because you do not have to be a historian to understand that. There is a tremendous pressure to export energy when it is found. I was just reading an article by Eric Kierans, a former Liberal minister, entitled "The Day the Cabinet was Misled". He talks about the pressure on cabinet, about the invasion of Ottawa by hordes of industry and association representatives and lobbyists. He talks about how cabinet was misled into authorizing the export of half our daily production of oil and a great deal of our natural gas. Canadian energy companies have always wanted to export because they want to make a buck, and that does not necessarily square with the energy security of Canadians. I think this is the point which perhaps my friends to the right miss.
In addition, history shows that these companies tend to invest a lot of their money abroad. That does not square with the energy security of Canada either. When they do not like taxes, they take the rigs out of the country. We have heard that cry for the last year in the House by spokespersons for the industry. If they do not like the taxes, they go on strike. They will not build the Alsands project or the Cold Lake project. So whom is the minister kidding when he says that increased ownership by Canadians through this fiddling with shares- because that is what it is-means that Canadian energy supplies will be secured for Canadian use? The minister is not kidding the Canadian people nor is he kidding us in this corner of the House.
The key to making energy supplies secure for Canadian use is to put Petro-Canada in the driver's seat. Petro-Canada should be the predominant company in the industry and should direct the exploration and use in the marketing of Canadian energy supplies. No one in the House will go that far. I submit that is what the Canadian people want. That is what any Gallup poll taken in the last few years has shown.


Donald Alex Blenkarn: Don't be too sure.


Ian Gardiner Waddell: My friend says "Don't be so sure." I refer him to a poll taken by the committee to Canadianize the industry in Canada. That poll showed that 70 per cent of the people wanted to make Petro-Canada the predominant company. I know my friends to the right wanted to get rid of Petro-Canada. I do not think people liked that. As a matter of fact, my friends backed off four times. They had four separate policies.
There is one difficult aspect of the debate to get across to the Canadian people. In a committee hearing today, Joel Bell, vice-president of Petro-Canada answered the question: what is the leading oil company in Canada? The answer is, Imperial Oil is. It is controlled by Exxon of the United States. What is the leading Canadian company, Mr. Speaker? Is it Petro-
Canada Business Corporations Act
Canada? No, it is Dome Petroleum. Petro-Canada is about fifth on the list.
The goal of 50 per cent Canadian ownership by 1990-not control but ownership, which is easier to achieve than control by the government is too little too late. This pathetic piece of legislation will not change that situation very much. The minister caved in on that legislation. Contrary to what the member for York-Peel (Mr. Stevens) said, this legislation is really nothing now. It has been gutted. I will enlarge on that in a few minutes. The minister said, "It is no longer essential"- which is an understatement, to put it mildly-"that the legislation contain provisions that existing shares be affected". In other words, this legislation does not affect existing shares. The whole thrust of this legislation has been cut out. I cannot understand the hon. member for York-Peel. I know he is a genius. It takes a genius to bankrupt a bank these days.


Sinclair McKnight Stevens: Who did you have in mind?


Ian Gardiner Waddell: I know he is that kind of corporate genius.


Sinclair McKnight Stevens: Who did you have in mind?


Ian Gardiner Waddell: The Conservatives tried, by ringing the bells and so on, to oppose certain aspects of this bill, not only to break it up, but to oppose certain aspects of the whole energy security bill. One of the aspects they opposed, especially in the negotiations to break up the bill, was this very provision affecting existing shares. Pardon the vernacular, but this is what they are all uptight about. This is what they are really concerned about. The minister caved in on this part. That is why I cannot understand my friend standing up and snatching defeat from the jaws of victory. As I say, it is not logical that he should find what I think are rather extended means of opposition to this bill. I cannot see it. If you cannot sell out existing shareholders, why is it so different if you are talking about future shares? As long as you protect existing shares, you would think the hon. member would be happy. This is not a radical bill by any means.
I want to deal with the bill a little bit. The amendments in the bill are to provide a mechanism whereby corporations will be able to obtain and maintain their Canadian ownership rate required to qualify for the PIP grants. As you know now, Mr. Speaker, the government's method of Canadianization-unlike the method that we would propose, which is to make Petro-Canada the predominant company by taking into public ownership swiftly and fairly, but solidly and soon one of the major foreign-owned oil companies-is to go to a very complicated scheme, I think unworkable, of PIP grants, the COR ratio, with legions of bureaucrats and a lot of paper work. This is what the amendment to the Canada Business Corporations Act deals with.
Last year a draft of the energy security bill was prepared. Then we had Bill C-94. That was subsequently broken up into a number of bills. We are dealing with one of these bills tonight. Originally, Bill C-94, the omnibus energy security bill, allowed Canadian oil companies to buy back, cancel or reclassify the shares held by foreign investors even if the foreign

April 20, 1982
Canada Business Corporations Act
investors objected. The foreign investor would have been reimbursed. But now the government has amended Bill C-105 from the original version, Bill C-94. The addition of Section 168(1) found on page 9 of the bill prohibits a company from constraining existing shares held by foreigners. In other words, companies will only be allowed to constrain future share issues. Foreigners holding existing shares are protected from having to give back their stock.
This is what the minister meant when he said "That is no longer essential." He just gutted his whole bill. This backtract-ing by the Liberals indicates how they bowed to the pressure of foreign investors, particularly in the United States. The Liberals continue to talk a good fight on promoting Canadiani-zation, but their actions are speaking louder than their words. There is a tremendous lobby behind the scenes by the American government, by industry and by members of the Conservative party in the House especially, to get the government to back away from the thrust of the National Energy Program. The lobby is having some success. The government is backing off. What would you expect of the Liberal Party, because when it comes right down to it, in spite of the occasional outbursts of creation like that of Petro-Canada or the original thrust of the National Energy Program, the Liberal Party is still a party which finds its roots and finances in big business. You should not forget that. It is also a party without a philosophy. It can get buffeted about in the pressure of the day. It is, as Eric Kierans said before he quit the cabinet in disgust, easy for the cabinet to get misled. He gave some instances of the cabinet being misled by hordes of industry and association representatives and lobbyists. They have far more power and influence than the ordinary person in Canada has. That is perhaps the great tragedy in the country and in the democratic system. It is those with money, power and influence who have that kind of ability to change government's views and to make government backtrack when coming out with progressive policies.
Had the government stuck by the original draft of this bill, we might have been prepared to support it, but this backtracking is part of a pattern.
I have brought along some clippings. If you follow the government's activities over a period of time, you can see some of the backtracking from the original National Energy Program. In the Alberta report for February 27, 1981, we find the heading "NEP changes make it easier to Canadianize." It reads:
Boasting of his "flexibility and willingness to help the petroleum industry," Ottawa's Energy Minister Marc Lalonde last week announced changes to the National Energy Program he had unveiled with considerably more fanfare in October.
In this particular change they were talking about the new dispensation for the Canadian ownership rate required for maximum grants of 80 per cent for frontier exploration and 35 per cent elsewhere. It was changed from the requirement that the company be 75 per cent Canadian-owned, to 60 per cent Canadian-owned. Also, the Canadian ownership rate will be easier to prove. This was on February 27, 1981.
An article appeared in the February 28, 1981 edition of The Globe and Mail entitled, "Ottawa Plans to Modify Ownership Rules Again". It read:
Harold Renouf, chairman of the federal Petroleum Monitoring Agency, said the Canadian ownership rate . . . rules will be modified to clear up some of the tricky questions arising from stockbrokers, pension funds and nominees holding shares of oil companies.
The pressure was on!
Another article appeared in the October 23, 1981 edition of The Globe and Mail entitled, "PMA Relaxes Canadian Ownership Rules". It reads in part:
The Petroleum Monitoring Agency has relaxed several rules on Canadian ownership to help oil and gas companies qualify for federal and provincial exploration and development grants.
It continued:
Mr. Renouf said the PMA is still reviewing other changes-
In the "Report on Business" which appeared in the February 10, 1982 edition of The Globe and Mail, under the headline "Altered Ownership Rules Held Less Burdensome", the following was reported:
Modified Canadian ownership regulations will lift the administrative burden for a "signifcant" number of small oil and gas companies, according to a federal energy official.
Those are just some examples. There are many more which I could cite, such as the ones on February 27, 1981, February 28, 1981, February 23, 1982, and February 10, 1982. They were all changes with respect to Canadian ownership rules.
Here we have the latest change in the original intent to amend the Canada Business Corporations Act by allowing directors to force foreign shareholders to sell. Now that will not be done. They will only deal with future shares. This is why I call it a pathetic bill. There is nothing in it. The hon. member for York-Peel need not get all excited about it because there is simply nothing in it.
With the approval of two-thirds of a company's shareholders, a company could change the classification of its stock to constrained shares so that only Canadians could own them. As well, the company could buy back some of its shares on the open market and reissue the same number of constrained shares within two years. As a rule, companies are generally not permitted to deal in their own shares. Moreover, a company could issue different kinds of shares, some owned by Canadians only and others by all investors. Probably very few companies will make use of these provisions to bolster their Canadian ownerships levels.
Smaller companies which for the most part are not involved in exploration on federal lands have no incentive to do so because they do not qualify for the lucrative grants associated with Canada lands exploration; nor are the large multinationals likely to constrain shares. For example, if Gulf Canada bought back all its foreign-owned shares, except those held by the parent corporation, it would still not qualify for the next higher level of incentive payments. Gulf Oil United States owns 60 per cent and foreign shareholders own 20 per cent of Gulf Canada, so why would Gulf want to use these provisions to buy back shares? The simple answer is that it would not.
April 20, 1982

These are technical amendments to the act designed to allow Canadian energy companies to increase their Canadian share ownership. I have already said that 1 think they will have very little effect and that they have been gutted of their real power because they do not apply to existing shares. We in the NDP will vote against the bill because it is mainly cosmetic. It will have little influence on the over-all degree of private Canadian ownership. Rather than tinker with share percentages of private companies, we advocate a greater role for public ownership and stress a greater roll for Petro-Canada.
I should like to expand on this just briefly. In the last 1.5 years, $6.5 billion has been spent to increase Canadian ownership of oil and gas production by about 4.5 per cent, to about 30.5 per cent. As I said, anywhere from about 65 per cent to 70 per cent of the industry is still foreign owned, and perhaps 70 to 74 per cent foreign controlled. This is a strange method of Canadianization. People want Canadianization. Why have this strange method of grants to companies which will pretend to be more Canadian?


James Ross Fulton: It would lose its donations from oil companies.


Ian Gardiner Waddell: Perhaps that is correct. If it really wanted to offer Canadians a vision of patriating the oil industry as it patriated the Constitution, it could do so. I think Canadians want it.
The nominal corporate tax rate for the petroleum industry is supposed to be 36 per cent. However, because of the tax concessions given to this wealthy industry, its effective federal tax rate has been only 10 per cent for the period from 1974 to 1980. This compares with a federal income tax rate of 18 per cent in 1980 for a married taxpayer with two children who earned an income of $25,000. Some of my colleagues are required to return to their ridings and face average taxpayers such as married persons with two children paying effective tax rates of 18 per cent. These people see oil companies paying an average rate of 10 per cent, with parliament agreeing to give $6.5 billion to oil companies this afternoon. This is pretty obscene from the standpoint of an average taxpayer. We have to sit here day in and day out listening to hon. members, especially those in the Conservative Party, screaming, shouting and crying for the poor, poor oil companies. Our hearts bleed for them.
One should look at how other countries handle foreign ownership and control. For example, in Great Britain, the British National Oil Corporation has first claim on a 51 per cent share of oil production, and its purchase is negotiated at market prices. BNOC may offer participation to joint-venture partners including foreign-owned firms, but it retains control of all projects. It does not have just a 25 per cent equity, it has control. In Norway, Statoil, the government oil company, can take up to a 70 per cent interest in any block of land it does not already hold. Statoil takes this interest after a find, but before development, and it makes no payment for past exploration expenditures.
There was another change to the original National Energy Program. When industry was up in arms about Bill C-48 at
Canada Business Corporations Act
the hearings, the minister said that the government would pay them for past exploration expenditures. The government caved in on that, but it did not cave in on native rights or environmental changes. It caved in to the big companies which wanted Petro-Canada or the government to pay.


Gordon Edward Taylor: What about property rights?


Ian Gardiner Waddell: My friend refers to property rights. He should look at the giveaway of property. He should remember who owns the oil and gas in the country. Canadian people own the oil and gas in the country, and he should not forget it.
In Australia, foreign companies are allowed to explore, but only Australian and naturalized foreign investors can produce energy resources. To qualify as "naturalized", a foreign company must have 25 per cent of equity owned by Australians and a majority of Australians on its board of directors, and a public commitment to increase Australian equity to 51 per cent.
If you remember what I said about Eric Kierans in his article, he said that Ottawa was terrorized by Washington. He said that he thought of Ottawa in two ways; the capital of his country and the breeding grounds of fears and haunting visions of what Washington may do. Those constant bureaucratic nightmares make Ottawa less of a capital and Canada more of a satellite of the United States. That was not said by a screaming socialist but by a former minister of that government.
The industry in Mexico has been nationalized since 1938. What is the situation in Canada? Here we are seeking 50% Canadian ownership by 1990 as a goal. That is almost laughable. It is too little to late and it is too slow and unimaginative. Although there is a larger role for Petro-Canada, it is not the predominant role. It is the fifth oil company in this country- not the first, but the fifth. There is a requirement for 50 per cent of Canadian ownership but not control. This means that you can still have control in New York or Dallas to obtain a production licence on Canada lands. We give Petro-Canada a 25 per cent carried interest in Canada lands only. Previous owners are to be compensated for the back-in.
The Minister of Energy, Mines and Resources (Mr. Lalonde) told the Globe and Mail on June 20, 1981:
The new regime is more favorable to foreign investment than in virtually any other country in the world.
There it is. Through their past policies the Liberals have put us in this mess of foreign control of our energy sector. They are now proposing to get us out of it by this half measure. Petro-Canada will play second fiddle to the Domes and the Novas. It will leave the petroleum sector to be controlled by private companies. This is not in Canada's energy security future and it is not in the public interest. In the near future a few large Canadian oil companies will be so prosperous that they will begin to take over non-petroleum interests and expand into other areas of the economy such as coal and solar energy, and other areas like shipbuilding and so on.

April 20, 1982
Canada Business Corporations Act
In 1980 the oil industry's profits alone represented almost 30 per cent of all profits earned by the non-financial sector of the economy, giving the industry a commanding position in our country's economy. As we pay more at the pump it represents a massive transfer of wealth from consumers to producers. Every time we buy a gallon of gas we are transferring more money. Given that Canadian consumers and taxpayers have and will continue to finance the growth of this industry, our only guarantee for a fair return on our investment in terms of retail pricing and security of supply is to have control of the petroleum industry rest with publically-owned Crown corporations such as Petro-Canada. It seems to me that this is too important a sector of the economy to be left in the control of the private sector, which will continue to hold the nation up for ransom for higher prices, more tax concessions and more exports of this precious non-renewable resource.
What does the government of Canada propose in the face of that evidence, which I suggest to my friends on the other side is solid and incontrovertible? I ask them to respond to that. The government comes up with these hokey PIP and COR programs which are complicated, convoluted, bureaucratic and unworkable. Even when it introduced this amendment to the Canada Business Corporations Act to allow directors of companies who have foreign shareholders to force the loosening of those shares in some way, it backed off and did not even deal with existing shares as a result of the outcry from the Conservative Party and the industry. This is a sham. There is no way that this party could support this bill.


Donald Alex Blenkarn: Mr. Speaker, 1 had hoped to learn something from the energy critic for the NDP during his remarks on Bill C-105. I heard him talk about Eric Kierans. I heard him talk about taxation and I heard him talk about Petro-Canada five or six times, but I would like to bring it to your attention, Mr. Speaker, that these bills are being debated under special House rules adopted on March 22 and I suspect that the NDP by now has used up more time allocated to them than the Progressive Conservative Party during this debate.
I suspect that they have very little time, if any, to deal with the tax measures which will come before the House because, to my understanding, at this point they are well into their six hours of the total allocation of seven hours for second reading debate.
I suggest that the NDP energy critic should learn to speak faster and to say something when he speaks rather than just use the time of the House as he has done.
It is important that we study this bill and understand that it does not just comprise technical amendments to the Canada Business Corporations Act. This is a serious bill which alters the framework of corporations in Canada. It is not an energy bill at all. It masquerades as part of the National Energy Program because it does not deal specifically with energy corporations. Indeed, it deals with corporations in general
where the percentage of ownership or control of those corporations may in some way entitle a corporation that was Canadian owned or had a certain portion of Canadian ownership to have special privileges in accordance with the laws of a province or the federal government. The corporations could be involved in the manufacture of tractors, liquor or, indeed, in any commodity. Little by little, piece by piece, a province could stipulate that a corporation must have a certain percentage of Canadian ownership, and if that corporation was incorporated under the Canada Business Corporations Act where part of its operation involved a benefit to have constrained shares or shares owned only by Canadians, the provisions of this bill would then come into effect.
Therefore, I suggest that we are not dealing with a measure involving energy security. We are not dealing with Canadian ownership of energy companies in Canada. We are dealing with a very dramatic amendment to the way corporation law exists in Canada.
I say to you and to the House, Mr. Speaker, that when we deal with the basic fabric of the corporate law of Canada we must do it very carefully. We need to understand where we are heading and how Canada works in the capital markets of other countries. We need to know how shareholders and investors in other countries, and indeed other governments, view business conditions in Canada. We must regard the way financiers and lenders and those who buy the shares consider the business organization arrangements in Canada.
There are countries which have massive controls on the ownership of shares where companies can only be incorporated if there is a high percentage of that country's nationals who form the shareholders of the country. If you look at those countries which have imposed these restrictions, you will find that they are primarily undeveloped, have a poor gross national product and do not grow.
The hon. member spoke about Mexico. I am told that the gross national product of the state of Texas is well in excess of the gross national product of the entire country of Mexico. When we regard it in those terms, it becomes evident where we are headed. A free enterprise, open and private market society must be operated with as few restrictions and controls on corporate and business activities as possible.
Before geting into the details of the bill, having in mind the time, perhaps I should call it ten o'clock. I will go into those details tomorrow.



PROCEEDINGS ON ADJOURNMENT MOTION

[Stage Direction]
A motion to adjourn the House under Standing Order 40 deemed to have been made.
April 20, 1982

Mr. Hal Herbert (Vaudreuil):: Mr. Speaker, on March 19, I had a question on the amount of transfers under the federal-provincial fiscal arrangements. Under these arrangements, the Government of Canada will be paying Quebec $35.2 billion. Considering the total population of this country, Quebec is receiving one-third of total transfers to the provinces. Quebec will therefore be receiving $14.6 billion more over the five-year period 1982-83 to 1986-87 than it received during the period 1977-78 to 1981-82. 1 asked this question because quite frankly, when I hear a speech by the Premier of Quebec, he is always talking about cutbacks. 1 feel that it would be an excellent idea to set the record straight once again. For instance, for health services Quebec will receive $13.6 billion over the next five years, which represents an increase of $5.8 billion over the $7.8 billion Quebec received during the past five years. During the next five years, the Government of Canada will be transferring $5.8 billion to Quebec for postsecondary education, representing an increase of $2.5 billion over the past five years. I repeat, from $3.3 billion to $5.8 billion.
Under the item of equalization payments alone, Quebec will be receiving $15.8 billion between 1982 and 1987, compared to $8.7 billion over the last five years, representing an increase of $6.9 billion. This adds up to an average increase, over the next five years, of 10.8 per cent, or a total increase of $15.2 billion. That is why I asked my question about the amount indicated in the federal estimates, and in answer to the question I put to the Minister of Finance (Mr. MacEachen), I received a reply on February 22, indicating that the amount budgeted last spring in 1981 for the equalization program for Quebec was $1.7 billion, and because of changes in the votes this was increased to a total of $2.1 billion at the end of the year, which means an increase of $400 million over the past year.
The Premier of Quebec has never mentioned this increase. And this year, with an increase from $2.1 to $2.5 billion, will bring another increase of $400 million. I should like to obtain confirmation from the parliamentary secretary regarding the amount, which 1 believe to be accurate, to make sure there are no discrepancies in the figures I used this evening.
Supplementary estimates C for last year show fiscal equalization for Quebec at $268 million, and Supplementary estimates E list Quebec at $9 million, for a total of $277 million.
I would like an explanation from the parliamentary secretary to clear up any doubt, since I have referred to an increase of $400 million for last year. Because I want no misunderstanding as to the accuracy of the figures I have read for the current year, the year just beginning, the parliamentary secretary might like to explain the reason for the discrepancy
Adjournment Debate
to which I referred in the question which I put to the minister on March 19 last.


Mr. Douglas Fisher (Parliamentary Secretary to Deputy Prime Minister and Minister of Finance):: Mr. Speaker, may I begin by complimenting the hon. member for Vaudreuil (Mr. Herbert) for correctly underlining the size and the importance of federal transfer payments to the province of Quebec. The hon. member has quite rightly pointed out the significance of these payments to the ordinary people and the quality of life in that province.
There is an increase of $340 million in Quebec's 1981-82 current year entitlement. That represents the difference between the first official estimate of January 14, 1981, which was $1,780 million, and the latest or third official estimate of December 29, which was $2,120 million.
For any given fiscal year, three estimates of current fiscal year entitlements enter into the determination of the actual payments to an equalization receiving province with respect to that fiscal year. Other calculations of prior years' entitlements are also completed during the course of the year and the results of these re-estimates can also have an impact on the actual size of the cheques which are sent to the provinces.
As this information from the current year and prior years becomes available, the remaining payments to the provinces in that fiscal year are adjusted and the next available set of supplementary estimates are used to tell the House of the changes to the cost of the equalization program.
Therefore, starting with the main estimates current year entitlement for all equalization-receiving provinces of $3,627 million, if one then adds the amount in supplementary estimate C of $358 million and supplementary estimates E, $105 million, one arrives at the third official amount of $4,135 million for 1981-82 current year entitlements.
As for the province of Quebec, which receives by far the largest portion of equalization payments, if one adds to the main estimates the amount of $1,842 million, the increase of $268 million listed in supplementary estimates C and $9 million in supplementary estimates E, one arrives at $2,119 million, the level of payments which that province will receive in 1981-82 for the current year.
I again congratulate the hon. member for Vaudreuil for taking the time to bring to our attention this very sizeable payment from the federal government to the province of Quebec.


GOVERNMENT ANNUITIES-YIELD TO PURCHASERS. (B) REQUEST THAT GOVERNMENT REDEEM LOW YIELDING ANNUITIES
Mr. Gus Mitges (Grey-Simcoe):: Mr. Speaker, on Thursday, April 1, as reported at page 16042 of Hansard, I questioned the Minister of Employment and Immigration (Mr. Axworthy) regarding the current yield to purchasers of government annuities.

April 20, 1982
Adjournment Debate
Like many holders of these annuities I am concerned with the fact that since 1976 there has been no increase in the yield from these annuities, in spite of the 1976 recommendations by the minister's department that returns from these investments would be adjusted to reflect the cost of living increases and increases in interest rates. The minister's answer was that he and his department were aware of the situation and that he would be discussing it with the Minister of Finance (Mr. MacEachen).
However, there are several questions that remain unanswered. Positive answers would go a long way to help satisfy the legitimate concerns of annuity holders across Canada. Such questions would encompass why there has been no increase in the yield in these annuities since 1976, in spite of the promise made at that time that such increases would be made to reflect the higher interest rates and the cost of living.
The minister's answer to me indicated, as well, that a study would be made in this regard, and that he would be reporting to Parliament the result of this study. We can only hope that such a study will recommend that some positive action be taken.
I would recommend to the minister, in light of questions raised by several of my constituents who hold government annuities, that consideration be given as well to a possible retroactive increase in the yield, to reflect the upward spiral in the cost of living since 1976.
When the minister is setting up the study, he should be aware as well of the disparity between the rate of return on investment between the government's annuity plan and private annuity plans. Mr. Speaker, a 7 per cent return on investments, which is the return received today from government annuities, is completely inadequate, especially when we compare it to that from comparable policies in the private sector which offer at least double that amount. The government return of 7 per cent may have been a realistic figure back in 1976, but with interest rates and the cost of living at recordsetting levels, the policyholder's savings are eroded very quickly.
I would ask that the government realize this injustice and remedy it as soon as possible, so that these Canadians who invested in their government in good faith will receive a more realistic return. Otherwise, their investment for retirement will wither away to nothing in the face of double-digit inflation.


Mr. Remi Bujold (Parliamentary Secretary to Minister of Employment and Immigration):: Mr. Speaker, in answer to the question put by my hon. colleague, I may remind him that on June 25, 1981, the then parliamentary secretary to the Minister of Finance, the hon. member for Ottawa Centre (Mr. Evans), told the House that after assessing the situation, the conclusion was that there was no reason to increase the yield of government annuities. He pointed out that government annuities were long-term, contractual agreements and that their
yield could not be compared to the rates of interest payable on short-term financial instruments, because of their fundamentally different nature. He went on to say that it was important to bear in mind the contractual nature of annuities and the potential effects of a change to the terms of these contracts on other financial instruments, both in the public and private sectors. He concluded that the only viable solution to this difficult problem lay in the pursuit of monetary and fiscal policies that would serve to reduce inflation and thereby reduce interest rates for all Canadians.
The remarks of the hon. member for Ottawa Centre are as valid today as they were last year. We shall solve the problem by taking steps to moderate inflation and thus bring down interest rates, an objective to which the government is firmly committed. Considering the concerns expressed by many hon. members, both this evening and during the past months, and in view of the fluctuation of interest rates during the past year, the minister is prepared to order another study on the yield of government annuities. Officials of the departments concerned will commence the study within the next few months and will make a decision on the basis of their conclusions.
I am convinced, Mr. Speaker, that the recommendations made by the hon. member, including those concerning a retroactive increase and the disparity between private and public annuities will certainly be considered by the officials who will undertake this review.
Questions concerning redemption of the annuities are also asked occasionally. The policy of the government is to reimburse the amounts paid plus any interest if the annuity amounts to less than $10 a year at maturity. In addition, except if otherwise provided by a particular pension plan, the annuity holder can redeem it if it amounts to less than $120 a year. If not, the Government Annuity Act prohibits redemption by the annuity holder. The only authorized exception is contained in Section 17 of the government annuity regulations, which authorizes the holders of collective annuity certificates who contribute to a federal or provincial employee pension plan to transfer the amount payable to the new pension plan. I therefore hope, Mr. Speaker, that a solution which my hon. colleague will find acceptable can be found as he himself noted in his comments, since the minister has already undertaken to make a review of the system.


PIPELINES-DELAY IN CONSTRUCTION OF ALASKA GAS PIPELINE. (B) CONSTRUCTION GUARANTEES
Dave Nickerson: Mr. Speaker, the matter I wish to bring to the attention of the House tonight arises out of a question I asked of the Minister of Energy, Mines and Resources (Mr. Lalonde) on April 1. It was a two-part question.
The first part was very simple: could he or could he not confirm an announcement made by the Hon. Mitchell Sharp,
April 20, 1982

the northern pipeline commissioner, about five or six days previous to that? The answer to the first question was that the minister did not know and that the proper person to ask resides in the other place. That person is the hon. Senator Olson. If I recall correctly, the order which appointed Senator Olson said that it would be his responsibility to advise and assist the Minister of Energy, Mines and Resources and, of course, there should be-must be-someone in this chamber to answer legitimate questions from the people's representatives.
The answer to the second part of the question was even worse. I asked what the government intends to do and whether it is concerned about the fact that this project, which originally was anticipated to be completed in 1983, would now be delayed five years, to 1988. The response to that question was a rather blase write-off. It was a glib response that there was nothing to be concerned about, that everything was in the hands of the minister and his department and that we on this side of the House should not worry. I can tell hon. members that we on this side of the House are worried about continuing delays, not only in relation to the project about which I asked my question, but also in relation to projects such as Alsands and Cold Lake.
When, in 1977, the question of the Alaska gas pipeline was debated in the House, the gentleman who is now Minister of Finance (Mr. MacEachen), and who was at that time president of the privy council, stated that that project would generate 25,000 man-years of work directly, and some 220,000 man-years of indirect work which would be done in the manufacturing areas of Ontario and Quebec. If we ever needed to get on with a project like that, it is now when we desperately need those types of employment opportunities in Canada.
As I said before, the original treaty entered into between Canada and the United States on September 20, 1977, and the act which incorporated many of the terms of that treaty which was assented to in April, 1978, envisaged a completion date of the project and a start-up of gas transmission through that line on January 1, 1983, just less than a year from now. The project is not even started, let alone anywhere near completed.
Nothing happened until about 1980, and then we had another go-around. I remember the pre-build debate. At that time we were given iron-clad guarantees by the Minister of Energy, Mines and Resources that that project would go ahead until its completion. We received iron-clad guarantees from the Minister of Energy, Mines and Resources. I should like to know what happened to those iron-clad guarantees.
Recent events show that on March 23, the federal inspector of pipelines in the United States, Mr. John Rett, said that the project would not be completed until the winter of 1987, or perhaps January 1, 1988. This was originally denied.by the hon. Mitchell Sharp, but one day later he had to confirm that the dates given by Mr. John Rett were correct.
Even worse things have happened since then, Mr. Speaker. An article in the Toronto Star on April 17 quoted Alaska
Adjournment Debate
Senator Frank Murkowski, a man who is generally optimistic and who supports this project, as follows:
"In my view, the project will be deferred for an indefinite period of time- perhaps two to three years."
The article continues:
A substantial delay could deal a big blow to Canada's hopes for the thousands of jobs and big contracts-
That is what is happening, Mr. Speaker. Delays by the Minister of Energy, Mines and Resources have resulted in the loss of thousands of jobs for Canadians all across the country. I should like to know what the government intends to do about it.


David Charles Dingwall: Mr. Speaker, the concept of the Alaska Highway Natural Gas Pipeline was essentially started in the early 1970s with the Transit Pipeline Treaty.
This treaty was followed by the Canada/U.S.A. Agreement on the Alaska pipeline in 1977 wherein both countries formally undertook to support the project on a priority basis. Canada approved the pre-built segments of the project in the spring of 1980 after President Carter provided assurances that the line would be financed and that his 1977 decision approving the project would be amended to allow pre-commencement billing for the Canadian segments. Further assurances were provided by the joint resolution approved unanimously by the Senate and House of Representatives and the commitment of the industry sponsors to participation in the financing of the project.
With the change in government in the United States there temporarily existed some controversy over the pipeline's scheduling. Nevertheless, President Reagan clearly stated his strong support for the project during a visit to Ottawa in 1981. Last October, in a letter to the Prime Minister (Mr. Trudeau), the President of the United States reiterated his support stating:
I believe that this project is important not only in terms of its contribution to the energy security of North America, but it is also a symbol of U.S.-Canadian ability to work together co-operatively in the energy area for the benefit of both countries.
With regard to media reports earlier this month speculating on a new delay in the Alaska pipeline project, I would like to state that the Northern Pipeline Agency has advised that the 1986 schedule was tight and it has slipped to a 1987 completion as a result of a delay caused by the waiver package proceedings in the American Congress; that the schedule which now appears highly probable involves the completion of financial arrangements by June of this year, the submission of the financial proposal in July, and the final official approval by December of this year; and, finally, with completion of financial arrangements by the end of 1982, the schedule calls for completion of all other regulatory procedures and certifications leading to a completion of the project by late 1987.

April 20, 1982
Adjournment Debate
I would like to comment on a recent news report from Alaska that there may be difficulty in financing the Alaska segment of the pipeline by June of this year and that, if this occurred, completion of the pipeline could be delayed beyond the expected 1987 completion. The U.S. government has not advised of any difficulty in this respect.


The Acting Speaker (Mr. Ethier):: Order, please. A motion to adjourn the House is now deemed to have been adopted. Accordingly, this House stands adjourned until tomorrow afternoon at two o'clock.
Motion agreed to and House adjourned at 10:24 p.m.


END OF VOLUME XIV