1982-02-26

ROUTINE PROCEEDINGS


Right Hon. Joe Clark (Leader of the Opposition):: Madam Speaker, I rise under the provisions of Standing Order 43 to seek unanimous consent to move a motion on a matter of urgent and pressing necessity. Noting that since the member for Mount Royal (Mr. Trudeau) first became Prime Minister in 1968, the federal government's share of total government spending in Canada has increased from 40.5 per cent to 41.9 per cent, and noting that the actions of the present federal government have contributed to division in the country, the election of a separatist government in the province of Quebec, and the election of a separatist member to the Alberta legislature, I move, seconded by the hon. member for Provencher (Mr. Epp):
That this House condemns the deliberate abandonment by the federal government of the principles which have kept Canada together since 1867.


Some hon. Members:: Hear, hear!


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


AGRICULTURE
Mr. Lome Greenaway (Cariboo-Chilcotin):: Madam Speaker, in the February 12 edition of The Financial Times of London it was reported that the Spanish Minister of Agriculture had created a $700 million loan and aid program for farmers. The Spanish government and the banks are cooperating in making available to Spanish farmers ten-year loans at 7 per cent interest. In light of this farsighted action by Spain, I move, seconded by the hon. member for Capilano (Mr. Huntington):
That the Minister of Agriculture instruct his officials to investigate this program with the view to initiating a similar plan in Canada in aid of our hard-pressed agricultural sector.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


REGIONAL ECONOMIC EXPANSION
Mr. Albert Cooper (Peace River):: Madam Speaker, the city of Grande Prairie was excluded from the special investment tax credit program in 1980. This area recently has experienced severe hardship, thanks to the National Energy Program and the recent knock-out blow from the budget, and now Proctor and Gamble has begun laying off employees. Therefore I move, seconded by the hon. member for Haldimand-Norfolk (Mr. Bradley):
That the Minister responsible for regional economic expansion administer immediate first aid through this tax credit program so that we may once again see this area recover and grow.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


RAILWAYS
Mr. Laverne Lewycky (Dauphin):: Madam Speaker, I rise under the provisions of Standing Order 43 on a matter of pressing and urgent necessity. Considering that over 300 farmers in Swan River met on February 22 at a meeting sponsored by the local of the Manitoba Pool and passed the following resolution:
Whereas the federal government has announced its intention to break the historic Crowsnest Pass Agreement, and whereas the statutory Crow rate is a historic right of western farmers and the only concession ever granted to western

February 26, 1982
Canada, and whereas an increase of the Crow rate by 5.1 times as recommended by the last Snavely report would cost rural Manitoba 90 million dollars and individual farmers an extra $20 to $25 per acre in production costs, therefore be it resolved that the meeting declare that the statutory Crowsnest Pass rates are not bargainable.
I therefore move, seconded by the hon. member for Hum-boldt-Lake Centre (Mr. Althouse):
That the government stop the Pepin proposal to plunder the west dead in its tracks.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


SEARCH AND RESCUE
Mr. George Baker (Gander-Twillingate):: Madam Speaker, I rise on a matter of urgent and pressing necessity. Because of repeated demonstrations of the need to station fixed-wing aircraft in Newfoundland to complement our search and rescue squadron, and because this need was demonstrated again less than 48 hours ago when a stern trawler sank 120 miles north of Newfoundland at 2 a.m. yesterday morning, and since that ship, after losing its steering in high seas, began to swamp and requested search and rescue assistance which was denied, and since the two fixed-wing aircraft which just happened to be at a Newfoundland airport but were from another province were unable to bring pumps to the ship to keep it afloat, because the aircraft maintenance crews are stationed in another province and the aircraft needed maintenance, I move, seconded by the hon. member for St. John's East (Mr. McGrath):
That this House recognize that enough is enough and request the government to station fixed-wing aircraft and maintenance crews in Newfoundland on a permanent basis.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.

[DOT] (mo)


ENVIRONMENTAL AFFAIRS
Mr. Tom McMillan (Hillsborough):: Madam Speaker, in a news release earlier this week the Minister of the Environment (Mr. Roberts) announced details of Canadian government
proposals to United States officials in the current round of negotiations toward a bilateral agreement on acid rain. In the release the minister said Canada is "prepared to cut sulphur dioxide emissions in eastern Canada, including Manitoba." I move, seconded by the hon. member for Don Valley West (Mr. Bosley):
That this House calls upon the Minister of the Environment to enrol immediately in a primary school geography class so that in his negotiations with the United States he will at least know where the great province of Manitoba can be found on the Canadian map.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


NUCLEAR ENERGY
Mr. Thomas Siddon (Richmond-South Delta):: Madam Speaker, in view of the fact that large amounts of uranium hexafluoride are being shipped from Canada to the Soviet Union where it is processed into nuclear fuels and weapons-grade uranium, I move, under the provisions of Standing Order 43, seconded by the hon. member for South Shore (Mr. Crouse):
That the government be instructed to table a complete inventory of all uranium shipments from Canada to the Soviet Union, and of all nuclear materials produced therefrom, together with a thorough description of all control measures required by Canada, to include site inspections of the Soviet enrichment facility, tests and measurements performed to determine quantities of uranium produced, and a detailed explanation of all record-keeping methods.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


FISHERIES
Mr. Lloyd R. Crouse (South Shore):: Madam Speaker, I rise to move a motion under the provisions of Standing Order 43. During the past few months winter storms have been extremely severe along the south shore of Nova Scotia, causing an excessive loss of lobster traps. Since the full responsibility for the saltwater fishing industry lies with the Minister of Fisheries and Oceans (Mr. LeBlanc) and the federal government under our Constitution, I move, seconded by the hon. member for Halifax West (Mr. Crosby):
February 26, 1982

That the Minister of Fisheries and Oceans in co-operation with the Minister of Employment and Immigration set up a work project for unemployed fishermen and pay them wages instead of unemployment insurance benefits for the construction of at least 10,000 lobster traps to be held in reserve and sold at cost to licensed lobster fishermen who suffer losses when disastrous storms destroy their means of livelihood.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


IMMIGRATION
Mr. Dan Heap (Spadina):: Madam Speaker, I rise on a matter of urgent and pressing necessity, under the provisions of Standing Order 43.
In view of a statement by the Minister of Employment and Immigration (Mr. Axworthy) that a country is judged on the way it treats its refugees, and considering the fact that the security certificate issued against Salvadoran refugee Regalado Brito deprives him of his fundamental rights, that only two federal ministers know the contents of the certificate,' that the charges have never been proven and that this constitutes a travesty of justice, I move, seconded by the member for Beaches (Mr. Young):
That the House demand the withdrawal of the security certificate, the immediate release of Mr. Regalado and his admission into Canada as a political refugee.


Madam Speaker:: The House has heard the motion of the hon. member. Under the provisions of Standing Order 43, this motion requires the unanimous consent of the House. Is there unanimous consent for this motion?


Some hon. Members:: Agreed.


Some hon. Members:: No.


SEARCH AND RESCUE
Hon. James A. McGrath (St. John's East):: Madam Speaker, the loss of the Ocean Ranger and 84 lives tragically points out the gross inadequacy of air-sea rescue in Newfoundland. I find it regrettable that the motion of my colleague, the hon. member for Gander-Twillingate (Mr. Baker), did not receive
Oral Questions
unanimous consent, so therefore I will try again. I move, seconded by the hon. member for Gander-Twillingate:
That this House instructs the Minister of National Defence to order immediately the installation of weather radar on the air-sea rescue helicopters at Gander and, further, that he immediately order the deployment of fixed-wing aircraft to eastern Newfoundland and the establishment of a rescue co-ordination centre at St. John's.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


MUNICIPAL AFFAIRS
Mr. Bill Yurko (Edmonton East):: Madam Speaker, I rise under the provisions of Standing Order 43 on a matter of urgent and pressing necessity. The federal government should move quickly to pass on to the municipalities increased responsibility for the financing, construction and management of public housing. In doing so it should provide the municipalities with increased fiscal capacity. Therefore, Madam Speaker, I move, seconded by the hon. member for Hastings-Frontenac-Lennox and Addington (Mr. Vankoughnet):
Thai the federal government consider bringing forth legislation permitting municipalities to issue tax free bonds in the Canadian financial market and that a per capita ceiling be placed on the maximum borrowing capacity for such purposes.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


Madam Speaker:: Oral Questions.



ORAL QUESTION PERIOD


Mr. Harvie Andre (Calgary Centre):: Madam Speaker, my question is addressed to the Minister of Energy, Mines and Resources. Yesterday the minister said that he was confident that Alsands would go ahead because he had other companies ready to replace the five companies that have withdrawn from this consortium. Could he tell the House who these companies

February 26, 1982
Oral Questions
are and when he is going to tell the remaining partners of Alsands who they are, because the partners do not know? Could he tell the House when this project is going to commence? When will construction start?


Hon. Marc Lalonde (Minister of Energy, Mines and Resources):: Madam Speaker, what I said in the House yesterday was that there were other potential partners with whom I had discussions and with whom the partners of Alsands had discussions. Two days ago I had a meeting with officials of Shell Canada in Toronto and they indicated to me that they had approached some potential partners themselves. I do not think it would be appropriate to reveal any particular names of companies in that case. The initiative lies with the consortium. These are confidential, commercial discussions taking place between private companies, and I do not intend to reveal any particular names.


REQUEST FOR COMMITMENT THAT PROJECT WILL PROCEED
Harvie Andre: Madam Speaker, yesterday in spite of a higher bank rate the Canadian dollar fell by two fifths of a point to $81.68. This morning the dollar opened at $81.42, down another quarter of a point. This, of course, is inflationary and/or will lead to higher interest rates. Given that analysts attribute this fall to the news about Alsands, will the minister help stop this free fall of the Canadian dollar and give his ironclad commitment to the House that the Alsands project will go ahead?


Marc Lalonde: Madam Speaker, 1 think one great contribution to help strengthen the Canadian dollar would be a change in the type of rhetoric used by the Tory opposition in this House on many subjects, including the subject of energy.


Charles Joseph Clark: Invoke martial law!


SELF-SUFFICIENCY PREDICTION
Harvie Andre: Madam Speaker, I will take responsibility for a lot of things but not for the failure of the National Energy Program.
In the National Energy Program the minister said that we would be self-sufficient in oil by 1990, partially because of the new supplies brought on by heavy oil and tar sands projects. Now that those projects are falling by the wayside one by one, he says we do not need the tar sands for self-sufficiency because we have Hibernia and east coast developments, in spite of the fact that he has yet to reach agreement with the coastal provinces. Could the minister tell the House why we should consider his latest prediction to be any more accurate than the prediction he made 15 months ago in the National Energy Program?
Hon. Marc Lalonde (Minister of Energy, Mines and
Resources): Madam Speaker, it is our view that every effort should be put into the implementation of the Alsands project in particular. We think it would be very helpful, in terms of
our goal of self-sufficiency by 1990. I must add, however, that in the last 15 months a lot more information has been gathered about reserves in the Beaufort Sea and the offshore east coast. That information is very encouraging and would indicate that, indeed, we can achieve oil self-sufficiency by 1990 with the help of the offshore discoveries and the Beaufort Sea discoveries.


DEVELOPMENT OF EAST COAST OFFSHORE RESOURCES
Mr. Howard Crosby (Halifax West):: Madam Speaker, my question to the Minister of Energy, Mines and Resources concerns settlement of the dispute with the Atlantic coast provinces respecting control and ownership of offshore resources. The minister knows that much of the hope for the future in Atlantic Canada is based on the accelerated development of submarine resources and that this development has been delayed and retarded by federal-provincial disputes. What is the state of the negotiations at the present time, particularly in Nova Scotia? Will the minister assure the House that the provinces of Nova Scotia and Newfoundland will receive a reasonable settlement from the federal government that will allow them not only to participate in development of those resources, but will also give them a fair share of the revenue?


Marc Lalonde: Madam Speaker, I am pleased to advise the House that an agreement in principle has been reached with the province of Nova Scotia during the night.


Some hon. Members:: Hear, hear!


Marc Lalonde: That agreement in principle was reached in the course of discussions which took place last night. There are a few points which still need to be ironed out. I expect that these points will be ironed out by the middle of next week. If that agreement is reached, indeed it will be of great benefit to Nova Scotia and will be an event which will be welcomed by everybody in Canada. It should ensure that development which is already under way will not be delayed. Contrary to what the hon. member said concerning the dispute about jurisdiction, that development will go ahead at an even faster speed in years to come.
Obviously the nature of the agreement will be revealed once everything has been ironed out and once it is ready for signature. But today I can announce that we have made a great deal of progress with Nova Scotia. In light of this development, I hope we can now make similar progress with the government of Newfoundland, and that the government of Newfoundland
February 26, 1982

will show the same spirit of co-operation which the governments of Nova Scotia, Saskatchewan, Alberta and British Columbia have shown in the last year.


PORT TERMINAL FOR LIQUEFIED NATURAL GAS PROJECT
Howard Edward Crosby: Madam Speaker, I suppose it is prudent to reserve judgment on the terms of the settlement. We can only hope that they will be beneficial to the people of Nova Scotia, as well as to all people in Canada. But I must correct the minister on one matter. It is not members who are saying that development has been retarded, it is officials of the oil companies, such as the Mobil Oil company, who have made that claim.
I want to ask the minister about another important project which affects the east coast, energy self-sufficiency, and security of supply; that is, the LNG project called the "Arctic Pilot Project". Could the minister ensure that this project is receiving the full support of the government? Will he also assure people on the east coast that the Nova Scotia port will be considered as the terminal for the LNG plant and that there will be no political action intended to have it located elsewhere, particularly on the St. Lawrence River?


Marc Lalonde: Madam Speaker, I am surprised by the allegation of the hon. member that he does not trust the Premier of Nova Scotia and the minister of energy for Nova Scotia to negotiate a good deal for their own province. I can tell him that I have more confidence in them to negotiate such a deal than in anybody in the Tory opposition in that regard.


Howard Edward Crosby: Not with a gun to their heads.


Marc Lalonde: With regard to the question he raised, the issue is before the National Energy Board. It is being heard by that body, and we will await its conclusions. Private parties and provincial governments are welcome to make their cases and to be heard by the board. We will await its recommendations. There has been no interference-and I do not expect any-in the operations of the board. It has always operated as a quasi-judicial agency, and I do not know of any interference which has ever taken place in the activities of the board.


CANADIAN FEDERATION
Mr. Edward Broadbent (Oshawa):: Madam Speaker, in the absence of the Prime Minister I should like to direct my question to the Deputy Prime Minister. Yesterday the Prime Minister said that co-operative federalism is dead. Since the essence of federalism is that different politicians have different legitimate responsibilities at different levels of government, inevitably from time to time they lead to conflict. Does the Deputy Prime Minister not agree that to minimize inherent structural conflicts in the federal system of Canada requires a co-operative attitude, especially on the part of the central
Oral Questions
government? Therefore would he not agree that the statement of the Prime Minister yesterday is in itself destructive of the very essence of federalism?


Hon. Allan J. MacEachen (Deputy Prime Minister and Minister of Finance):: Madam Speaker, the hon. member should look more closely at what the Prime Minister said. He went on to give a description of what, in his view, had been cooperative federalism, which he said was no longer applicable. I do not think that from that statement the hon. member ought to draw the conclusion that co-operation between the federal government and provincial governments has ended. I believe there will be co-operation, but probably in a different way, and probably more in keeping with some provincial aspirations expressed in the past to do their own thing and to avoid overlapping with federal activities.


FEDERAL CONTRIBUTIONS TO BLOC FUNDED PROJECTS
John Edward Broadbent: Madam Speaker, the minister's attempt to pour oil over troubled waters will not take away the actual words, including the actual context, which the Prime Minister uttered. But in pursuing the subject I want to get into an area in which the minister himself has been actively involved. I am referring to the block funding projects, which seem to illustrate clearly the lack of a cooperative attitude coming from the central government.
Considering that the federal government itself proposed to the provinces the bloc funding scheme to apply to post-secondary education and to health services, and is now cutting back on the amounts of money going to those funds, leaving the provinces with the responsibility, will the minister not admit that by this attitude it is the central government itself that is destroying the notion of co-operative federalism in Canada?


Allan Joseph MacEachen: Madam Speaker, the hon. member has mentioned that we are intending to reduce the rate of growth in transfers to the provinces. I have made it clear, and the Prime Minister has made it clear, that under the proposals made to the provinces, including equalization, the cash transfers under EPF and tax transfers, the growth will be close to 12 per cent a year. That is about the same rate of growth that we plan for federal expenditures. It seems to me that is a fair and a co-operative way to behave, namely, to treat the provinces in the same way you treat your own government. I do not see any difficulty with defending that approach in the country as being one of co-operation and, indeed, equal treatment.


QUERY RESPECTING POLITICAL CREDIT FOR FUNDS
John Edward Broadbent: Madam Speaker, everyone knows the government is cutting back on funds. The universities have said it; the provinces have said it; the opposition parties have said it. Only the Liberal Party of Canada is denying that everyone else takes to be the case. What lies

February 26, 1982
Oral Questions
fundamentally behind this approach, is the sheerest, crudest kind of politics. Isn't this a new attempt by the federal Liberal government to undermine the provinces and the old costsharing arrangement, on the backs, by the way, of sick people and students who need the money? They are the innocent victims. Is it not an attempt to get more political credit for the federal Liberal Party of Canada? Isn't that what is behind it?


Mr. Baker (Nepean-Carleton):: They do not have any credit.


Allan Joseph MacEachen: No, that is not the point at all, Madam Speaker. The hon. member should know that in the proposals made to the provinces there is absolutely no reduction in the support for post-secondary education. There is absolutely no reduction in the field of medicare. Neither of these have been touched in our proposals. Even the premiers of the provinces when they released information on federal contributions to medical care and post-secondary education this past summer did not include the revenue guarantee as part of that contribution.


Mr. Blaikie:: You did for five years. You have changed your tune now, and you want to get away with it.


Allan Joseph MacEachen: It is true that we intend to eliminate the revenue guarantee, which was an adjustment made to the provinces in 1972 to compensate them for the unpredictability that had been created at that time in their minds because of tax reform. Surely it is reasonable ten years later to remove that kind of element from the federal-provincial situation?


CANADA POST
Mr. Bud Bradley (Haldimand-Norfolk):: Madam Speaker, in the absence of the Minister of Labour I will address my question to the President of the Treasury Board. I have a recent directive from the Canada Post Corporation outlining the holiday policy in relation to letter carriers this coming summer. It also outlines the policy to be followed when hiring short-term summer replacements. The directive says in part:
These term employees are to be selected from the families of members of the Letter Carriers' Union of Canada bargaining unit.
I ask the minister, is this the standard policy of this government's Crown corporations and, if so, does he not feel this return to the practice of nepotism is definitely discriminatory, and in fact an embarrassment to the letter carriers?


Hon. Donald J. Johnston (President of the Treasury Board):: Madam Speaker, I will be pleased to take notice of the question. The Canada Post Corporation does not fall under the jurisdiction of the Treasury Board. The personnel practices of
Crown corporations are not subject to Treasury Board control. However, I have noted the point raised by the hon. member and I will draw it to the attention of the responsible minister.


HIRING POLICY OF CROWN CORPORATIONS
T.A. Bud Bradley: Obviously the minister is not aware of the actions of Crown corporations under his jurisdiction.


Mr. Blais:: It is not under his jurisdiction.


T.A. Bud Bradley: My supplementary is for the Acting Prime Minister, Madam Speaker. Could the minister tell us if this is the standard hiring policy of the Crown corporations of this government?


Allan Joseph MacEachen: Madam Speaker, I cannot give the hon. member the details on that subject. I would be glad to look into it for him, but I do not want to give him an answer on a subject which I have not looked at.


Charles Joseph Clark: Why did you sign the budget, then?


REGIONAL ECONOMIC DEVELOPMENT
Mr. Bob Corbett (Fundy-Royal):: Madam Speaker, my question is addressed to the Minister of Transport. He will be aware of the dredging project which had been under way on the Miramichi for some little time, having been started only after substantial pressure had been brought to bear on the government. Unfortunately, because of bottom conditions, the dredging equipment called for in the original contract was inadequate and the project was subsequently called off. That area has been badly hurt in many ways, including the recent announcement by the government that CFB Chatham is being closed down, and it badly needs this project to continue. Will the minister tell the House if it is his intention to resume the project with the proper equipment and, if so, when?


Hon. Jean-Luc Pepin (Minister of Transport):: Madam Speaker, I must admit that I am not up to the hon. member's information level regarding the Miramichi. I will inform myself and answer the question in more specific terms as early as I can.


INCLUSION OF WHARF AREAS
Robert Alfred Corbett: Madam Speaker, I would ask the minister, when he does that, to recognize the fact that in the original contract no allowance was made to dredge the wharf sites to the same depth as the river, which makes the project questionable in the minds of a good many people.
If it is his intention to resume the project, will the minister assure this House that the work will include the wharf areas so
February 26, 1982

that ships which do manage to make it up the river will be able to tie up alongside the wharves and load their goods?


Jean-Luc Pepin: I will add that to my inquiry, Madam Speaker.


HOUSING
Mr. Bill Wright (Calgary North):: Madam Speaker, my question is directed to the Minister of Public Works. The cost of government advertising next year will increase by 14 per cent, to $70 million. I ask the minister, would that money not be put to better use in housing?


Hon. Paul J. Cosgrove (Minister of Public Works):: Madam Speaker, for the last three days this House has been debating a bill on housing whereby the government is most anxious to put into effect a budget provision of $350 million to provide housing. I think the energy of the hon. member opposite would be more fruitfully directed toward expediting that legislation in order to assist the government in providing housing.


INQUIRY RESPECTING MINISTER'S VIEW
Frederick William Wright: Madam Speaker, last night I told the minister I thought his bill stinks.


Some hon. Members:: Hear, hear!


Frederick William Wright: I ask him again, would it not be more useful to put that $70 million into housing?


Paul James Cosgrove: Well, Madam Speaker, that is the depth of the opposition's response and feeling to an attempt by this government to provide 70,000 jobs to people in the construction industry, and 30,000 units of modest housing to assist those people most desperately in need of housing in Canada.


CANADIAN NATIONAL RAILWAYS
Mr. Ian Deans (Hamilton Mountain):: Madam Speaker, my question is for the Minister of Transport. On January 27 a tank car carrying butane was removed from train number 386 en route to Hamilton from Sarnia because it had no brakes. It was subsequently discovered to be leaking butane so badly that it took the fire department eight hours to bring it under control and stop the leaks. Subsequent investigation uncovered the fact that 28 similar incidents had occurred within a month. I ask the minister what is wrong with the inspection procedures of the CNR whereby those tank cars could have travelled from
Oral Questions
Sarnia to Hamilton through all the intervening municipalities? Does he understand that this could well be occurring in every other municipality across the country, and is he simply waiting for a disaster to occur before he takes action?


Jean-Luc Pepin: No, Madam Speaker, I am not waiting for a disaster.


An hon. Member:: You are a disaster.


Mr. Nystrom:: Crow, Crow, Crow.


Jean-Luc Pepin: My friend is aware that we have had a very important inquiry into transportation of dangerous goods, the Grange inquiry. He is aware that subsequently the CTC had hearings and they are implementing recommendations with respect to speed, equipment, and inspections. Those recommendations will then become the regulations. I will be providing a full progress report on the Grange inquiry in a few days.
My hon. friend is aware that a couple of years ago this House passed a bill on the transportation of dangerous goods. Regulations have been worked on since then and will be published this summer. A tremendous effort has been made in Canada to cover this area of the transportation of dangerous goods, and progress is being made. The provinces are cooperating. There will be accidents, indeed, but the fact that the hon. member himself indicates that they have been identified and corrections made is a clear indication of progress.


REQUEST THAT ALL TANK CARS BE INSPECTED
Ian Deans: Madam Speaker, surely the minister understands that there would have been no identification of those leaks had it not been for mechanical problems. The problem is that, while the country waits for the minister to act, there is the distinct possibility that there could be a major catastrophe in any one of a number of municipalities in this country.
Will the minister today instruct the CNR that every single tank car carrying flammable or dangerous liquids should be inspected at its source, and inspected periodically along the line it travels, in order to guarantee public safety?


Jean-Luc Pepin: Madam Speaker, that is exactly what I am trying to say. It is not my job; it is the job of the CTC to make sure that these things are done-


Charles Joseph Clark: Like holding hearings on VIA Rail.


Jean-Luc Pepin: -which is what I have indicated is being done. Inspection is governed by a number of CTC regulations. The new regulations will indicate how the inspections should be carried out, when, and in what manner, either by equipment or by an individual. Therefore this is all covered in the regulations of the CTC.

February 26, 1982
Oral Questions


FINANCE
Mr. Arnold Malone (Crowfoot):: Madam Speaker, I have a question for the Minister of Finance, based on a letter which I received from officials in his department with respect to the income-averaging annuity and those cases where farmers and small businessmen had made sales just before or just after the November 12 budget. They state, in one sentence of that letter, that the income averaging annuity would have been continued had they had a pre-budget agreement in writing with the issuer of the purchase of the IAAC.
Knowing Canadians, as we presume he does, in the small communities across Canada, how many Canadians does the minister know whose bankers or accountants have told them that they could have such contracts, that they had until February to get them, and who would also say they want to have it in writing because the government might change its mind before February? How many does he know who would do that?


Allan Joseph MacEachen: Madam Speaker, I cannot give the hon. member a count on that matter. 1 do know that agreements in writing exist in a good many transactions that take place.


REQUEST THAT MINISTER ADJUST BUDGET PROVISION
Arnold John Malone: Madam Speaker, 1 suspect that there are a few cases in which the minister is right, where there is something in writing. Does the minister not see a great discrimination where accountants say that they have had agreements, knowing that their clients were intending to buy before February? Their lawyers say that verbally and their banker says that verbally. If somebody has that written down, they get the service. However, others are denied the total advantage of their whole retirement fund from sales of farms simply because they do not have something in writing. Can the minister make some adjustment for those people who have no other method of providing for their retirement, except at the time of the sale of their farm, to put some of that money into an income-averaging annuity? Can he make some exception in that regard?


Allan Joseph MacEachen: Madam Speaker, I believe we made an adjustment which would permit individuals to purchase a one-year income averaging annuity contract which could be transferred into a forward averaging system in the following year. That was the second adjustment that we attempted to make in order to accommodate the transition from one system to another, which I believe in general will probably be more favourable to the farmers than the one to which they have become accustomed.


NATIONAL ENERGY PROGRAM
Mr. Jack Shields (Athabasca):: Madam Speaker, my question is for the Minister of Energy, Mines and Resources. Has the Alsands consortium indicated to him at what point in time, if negotiations are not completed, the Alsands project will fall by the pulling out of the remaining companies? If the negotiations are not complete, does the minister have a target date in mind that the Alsands consortium will not proceed?


Marc Lalonde: No, Madam Speaker. I have not had an indication of the specific date in my discussions with the consortium partners. As the hon. member knows, there is an agreement between the consortium partners, the remaining partners that would take them to the end of June, I believe, in terms of proceeding with their own expenditures on the engineering and related matters. Obviously the consortium partners can revise those agreements at their discretion, but I have had no specific indication from any of the partners.


REQUEST FOR IRONCLAD GUARANTEE
Charles Joseph Clark: Madam Speaker, I have a supplementary question for the Minister of Energy, Mines and Resources. In his response to the hon. member for Calgary Centre, he declined to give his ironclad guarantee that Alsands will go ahead. Will he give the House of Commons today his ironclad guarantee that Alsands will go ahead?


Marc Lalonde: Certainly not, Madam Speaker.


INQUIRY RESPECTING NEW PARTNERS
Jack Wendele Shields: Madam Speaker, my question is again to the Minister of Energy, Mines and Resources. He has had a very positive attitude that this plant will proceed. He has indicated that there are people waiting to invest in it. Are those he is talking to about investment in the Alsands project, members of the OPEC nations?


Marc Lalonde: No, Madam Speaker.



PUBLIC SERVICE


Mr. Hal Herbert (Vaudreuil):: Employer-Employee Relations in the Public Service. That report contained 72 recommendations on which there has been no legislative action. When can we expect the official government response to the 72 recommendations in that report?


Donald James Johnston: Madam Speaker, I must say I was not aware that today was the sixth anniversary. 1 hope to be able to report a great deal of progress in this area. The cabinet now has before it for consideration a number of recommendations respecting employer-employee relations in the public service. I would like to assure the hon. member for Vaudreuil that, in developing those proposals, we have relied very heavily on the very fine work done by the parliamentary joint committee and on the work done by Mr. Finkelman.



PUBLIC UTTERANCES BY PUBLIC SERVANTS

Walter David Baker: Madam Speaker, I have a supplementary question on the general question of the public service. When we had our exchange in the House the other day, the minister seemed quite sure about what his position and the position of the government ought to be with respect to public servants and public utterances by public servants. When he went outside the House, he was not quite so clear. He admitted to reporters that the situation of civil servants might not be that clear cut. He says one thing inside the House and something else outside the House. Given that situation, are the specifics of the kind of issues that are extant in the case of Neil Fraser also before the cabinet, because the law is unclear, and public servants are in danger of being pilloried as a result of the government's attitude to rules that are unclear and rules that are unevenly enforced within the public service?


Donald James Johnston: Madam Speaker, I do not recall saying anything in the House that was incompatible with anything I said outside the House with respect to the Neil Fraser case. I certainly do not have the capacity to speak out of both sides of my mouth as the hon. member seems to do on occasion.


Charles Joseph Clark: Stay on the high road, Don.


Donald James Johnston: This whole question is subject to the grievance procedure. 1 understand the employee in question is exercising his right in accordance with the grievance procedure. If I said outside the House that these cases are not black and white, they certainly are not. There are obviously grey areas in any kind of procedure. Dismissals, whether they be in the public service or the private sector, are subject to the same kind of considerations.



REPRESENTATIONS BY OTTAWA LIBERAL MEMBERS

Walter David Baker: Madam Speaker, it is interesting that in the grey area the government moved so precipitously in this important case. Has the President of the Treasury Board received representations with respect to this
Oral Questions
case from the hon. member for Ottawa West, the hon. member for Ottawa-Vanier, and the hon. member for Ottawa Centre? What views have they expressed to the President of the Treasury Board with respect to the case under discussion?


Donald James Johnston: Madam Speaker, whatever representations may or may not have been made to me as President of the Treasury Board have little to do with the case in question.


Some hon. Members:: Oh, oh!


Charles Joseph Clark: That settles that.


Donald James Johnston: As I explained in this House, and as I will again explain to the hon. member, the code of conduct with respect to each department is the responsibility of the deputy minister in that department. The decisions that are made with respect to discipline of the kind which took place in the Neil Fraser case is the responsibility of that deputy minister. The grievance procedure provides for an appeal to that deputy minister. As I said before, that is the procedure which is in place. It has always been satisfactory in the past. I gather it is proceeding in accordance with the established rules in the Department of National Revenue.
Mr. Neil Fraser will obviously have every opportunity to present his views and to exercise all the recourses available to him under the law. I would be happy to hear representations from him with regard to that. If he is not satisfied that the appeal to the PSSRB is a satisfactory recourse, let him say so. We will be happy to look at it. However, to my knowledge, to this day the procedures which are in place have been entirely satisfactory in resolving grievances of employees who feel that they have been unfairly treated.



FINANCE


Mr. Ted Miller (Nanaimo-Alberni):: Madam Speaker, my question is for the Minister of National Revenue who is responsible for the audit of fishermen which has resulted in garnisheed wages, remortgaged homes, and exorbitant loans to pay back-owing income tax. With regard to a letter which I sent to the minister on December 10 which asked for an independent commission to investigate that tax audit and how fishermen are being treated, does the minister have such a report? His reply was that he would have his department carry out a report on that audit. Does the minister have that report now and is he prepared to divulge that information to the House?


Hon. William Rompkey (Minister of National Revenue):: Madam Speaker, the audit is going ahead on the east and west coasts. There is no independent assessment of the audit. I

February 26, 1982
Oral Questions
receive reports from the department from time to time on the progress of the audit both on the east and west coasts. I do not have the figures in front of me for the west coast audit but 1 would be glad to get those and discuss them with the hon. member.



TAX DEDUCTIONS AT SOURCE

Edward Allan Miller: Madam Speaker, the minister had indicated in a letter from his office that he would be carrying out an investigation with regard to an independent audit, or at least providing a tax lawyer for those people wishing to appeal their audit.
In the motions tabled on November 12 in the budget there was the suggestion that fishermen will be required to pay income tax "at source", that is, when they sell their fish to the processors. Is the minister aware of the financial burden that this will place on fishermen in terms of trying to find capital at the beginning of a fishing season, and is he aware that it is an added burden which may drive more fishermen out of the industry than have been driven out already by this government?


Bill Rompkey: Madam Speaker, the policy of having taxes for fishermen deducted at source was a request that indeed came from the fishermen themselves. At least the fishermen on the east coast requested that, and people who were supporting the fishermen and helping them with their tax returns said that this would be a good measure. It was a suggestion which we made to the Minister of Finance and he agreed that it was a proper measure, and indeed did insert in the budget ways and means to have fishermen's taxes deducted at source.
We believe that this is a good measure which would eliminate possible inaccuracies which may occur through reporting in other ways. If there is a different feeling on the west coast I would be glad to hear from the fishermen there, but it is quite clearly the position of fishermen on the east coast that they would like to have taxes deducted at source.



FEDERAL-PROVINCIAL FISCAL ARRANGEMENTS FEDERAL SHARE OF GOVERNMENT SPENDING

Thomas Michael McMillan: Madam Speaker, my question is for the Minister of Finance. Yesterday the Prime Minister stated that the federal share of total government spending in Canada, including municipal expenditures, had dropped steadily since 1959 in favour of provincial spending. Would the minister confirm that since the Prime Minister took office in 1968 the federal share of government spending in Canada has in fact risen, and will he therefore admit that the Prime Minister's rationale for killing co-operative federalism in Canada is just an excuse to grab more power and even more money for the federal government at the expense of the health
and education of Canadians, especially in the poorer provinces?


Allan Joseph MacEachen: No, Madam Speaker, I would not admit to something which is totally incorrect. As I stated earlier in reply to a question from the hon. member for Oshawa, in the proposals before the provinces at the present time we intend to maintain our level of support for the provinces, not only to maintain the level but to increase it annually by up to 12 per cent in transferring billions of dollars to the provinces not only in cash but also in tax points.



PRIME MINISTER'S STATEMENT ON CO-OPERATIVE FEDERALISM

Thomas Michael McMillan: Madam Speaker, for my supplementary question I will refer the minister to a document from his own department entitled "Economic Review" dated April, 1981, and specifically to page 194, which makes it clear that the Prime Minister's statement yesterday about federal-provincial spending is totally false. In light of that fact would the Minister of Finance tell the House and the people of Canada, especially in the provinces which may be concerned, what is the rationale for the Prime Minister wanting to put an end to co-operative federalism in this country? Is it simply that he enjoys fighting with other Canadians?


Allan Joseph MacEachen: Madam Speaker, obviously the hon. member does not want any information. If he did he would not put a question in that offensive way, just to score some points against the Prime Minister.


An hon. Member:: What about the Prime Minister yesterday?


Allan Joseph MacEachen: If the hon. member wants to ask a serious question I will be glad to answer, but I will not engage in a petty exchange with him in which he is scoring some political points.



SEARCH AND RESCUE


James Aloysius McGrath: Madam Speaker, my question is for the Minister of National Defence. Can the minister tell the House, especially in the aftermath of the most recent tragedy on the east coast, why he has not complied with the recommendations of a federal inquiry set up in 1970 which recommended in 1971, following the sinking of two ships with the loss of lives on the east coast, that fixed-wing aircraft be deployed to Newfoundland? Why was that recommendation not followed and how can he justify serving an area of five million square kilometres from two fixed-wing bases within close proximity to each other in the maritimes?
February 26, 1982


Hon. J. Gilles Lamontagne (Minister of National Defence):: Madam Speaker, first of all I would like to repeat what I said yesterday, that I understand the concern of the hon. member for St. John's East very well, and I also appreciate the motion presented today under Standing Order 43 by the hon. member for Gander-Twillingate, and the hon. member for St. John's East.


An hon. Member:: Why did you say no?


Mr. Lamontagne:: I can assure hon. members that I will do everything I can in this matter and, further to that, I have already asked my department to examine the possibility of reinforcing the air rescue capabilities in Newfoundland as much as possible, without disrupting the effectiveness of other areas.
As for the recommendations in 1970, to which the hon. member referred, as I said yesterday, a lot has been done as far as improvements to our search and rescue capabilities over the last few years. As I said yesterday, we have initiated many improvements for our helicopters, such as providing long-range fuel tanks, rescue hoists, high-powered search lights, and some improved navigational avionics. In addition, we are currently working on new radar and improved instrumentation. Therefore I think a lot has been done about improving our search and rescue capabilities.


An hon. Member:: Not enough.


Maurice Lamontagne: Maybe in the opinion of some hon. members not enough has been done, but what is enough when we consider the length of coastline we have to cover? I think that this is the important question with which we must deal.



LACK OF RADAR EQUIPMENT ON HELICOPTERS

James Aloysius McGrath: Madam Speaker, could the minister state why the rescue helicopters in Newfoundland have not been equipped with weather radar, a fact which rendered them useless during the Ocean Ranger tragedy, and why these helicopters do not have the support in Newfoundland of fixed-wing aircraft, which was recommended by a federal inquiry established by the government in 1970?


J. Gilles Lamontagne: Madam Speaker, I have just mentioned to the hon. member the improvements we have made to our search and rescue operations. I think that the hon. member understands the complexity of such an operation. Even with new radar our helicopters would have been unable to take off, in the Ocean Ranger incident.
There is another incident off the Magdalen Islands which happened this morning. The aircraft are ready on standby but they cannot reach the area off the Magdalen Islands immediately because of bad weather.


Charles Joseph Clark: We have a first-class good-weather rescue capacity.
Oral Questions


Maurice Lamontagne: I repeat again that with all the opinions, and with people giving all sorts of reactions to the incident, I think the best way to deal with it is to wait until the inquiry recommends what the improvements should be. In the meantime we are doing a lot to improve our capabilities even in Newfoundland. If it is at all possible I will try, on a trial basis, to put fixed-wing aircraft in Newfoundland.



FINANCE


Mr. F. Oberle (Prince George-Peace River):: Madam Speaker, my question is for the Minister of Indian Affairs and Northern Development who has assumed the lead role for the responsibility of finding an alternative to the remission order affecting northern benefits. I would like to ask the minister today whether he has reached a decision on the technique or the regime which should be put in place before the end of this year to replace the remission order. In other words, will the Income Tax Act be used to compensate northerners for the excessive living costs they experience every day?
I would also like to know whether the minister is aware that his responsibility extends below Sixty. There are all kinds of uncongenial isolated environments in the country which lie below Sixty.


Hon. John C. Munro (Minister of Indian Affairs and Northern Development):: Madam Speaker, in answer to the hon. member's question I would first like to say that I appreciate the work the hon. member has put into the whole question of northern benefits, and we have examined in some detail some of the proposals he has put forward.
Yes, I have had many meetings with some of my colleagues, including the Minister of Finance, with respect to how we should go about doing something constructive about northern benefits, especially once the "moratorium" is over. Various techniques are being explored at the moment. I do not think it would be helpful to speculate at this stage on what technique may be adopted, inasmuch as they are all under active consideration. There has been no firm policy decision taken in terms of my submitting it at this stage to my cabinet colleagues. I can only tell the hon. member we are weighing all the alternatives. We are doing so in a very thorough way, and I hope in combination with my colleagues to have a definite proposal for implementation soon, possibly prior to the end of the moratorium.



INQUIRY WHETHER HEARINGS WILL BE HELD

Frank Oberle: Madam Speaker, in coming up with a final position with respect to this crucial problem, which is a very high priority in the north, can the minister tell me what technique he intends to use for the

February 26, 1982
Committee reports
rest of the year to broaden the input? Will he hold hearings in the north? Will northerners have a say? Will there be a sectoral analysis including mining, Indian affairs, and other legitimate minority groups which will be affected in the north? What technique will the minister use to broaden the input and the public information that is necessary to make the right decision finally?


John Carr Munro: Madam Speaker, the hon. member is well aware that the input already over the last couple of years has been very significant. We have heard from mining interests. We have certainly heard from the oil and gas people. We have heard from the chambers of commerce. We have heard from all the resource-oriented people. We have heard from native groups. We have heard from the territorial governments themselves on this question, and we are continuing to hear from them with respect to this, so the input has been gigantic. Some of the suggestions have been very good.
As the hon. member is aware, one impact on the whole question of northern benefits is the energy situation as far as north of Sixty is concerned. An energy task force has been working with the territorial governments and native interests. The report of the task force is almost ready for publication. Perhaps the draft is already in the hon. member's hands; I do not know. However, we are coming out with our own energy paper following that task force, and northerners have been very much part of that. It will have a very significant impact on what form northern benefits take because, as the hon. member knows, a very significant portion of the higher cost of living in the north relates directly to energy costs.



ROUTINE PROCEEDINGS


Mrs. Eva Cote (Rimouski-Temiscouata):: Madam Speaker, I have the honour of presenting the sixth report of the Standing Committee on Agriculture, in accordance with the orders of reference of Tuesday, February 2, 1982.
The committee has studied Bill C-88, an Act respecting loans to farmers, and has agreed to report on the subject without amendment.
A copy of the proceedings and statements relating to the bill have been tabled.
[Editor's Note: For text of above reports, see today's Votes and Proceedings.]


TABLING OF ORDER IN COUNCIL APPOINTING PARLIAMENTARY SECRETARIES
Hon. Yvon Pinard (President of the Privy Council):: Madam Speaker, pursuant to Standing Order 42(1) I am tabling Order in Council P.C. 1982-670 appointing several parliamentary secretaries, effective Monday next.


ENERGY SECURITY ACT, 1982 MEASURE TO ESTABLISH
Marc Lalonde: for leave to introduce Bill C-94, to establish the Energy Security Act, 1982.


[Stage Direction]
Motion agreed to, bill read the first time and ordered to be printed.

[Stage Direction]
(Questions answered orally are indicated by an asterisk.)
Mr. Jim Peterson (Parliamentary Secretary to Minister of Justice and Minister of State for Social Development):: Madam Speaker, the following questions will be answered today: Nos. 2,264, 3,302, 3,684, 3,685 and 3,721.


Mr. Herbert: 1.	In the last year, how many pregnant women were drawing unemployment insurance benefits and were not entitled to regular benefits during confinement?
2.	Does the government consider that from eight weeks before the week of the confinement until six weeks after the confinement women are incapable of and unavailable for work?
3.	For what period is an unemployed woman not entitled to regular benefits during confinement and is a woman who is available for work and actively seeking employment two weeks after confinement subject to a change in this period?


Hon. Lloyd Axworthy (Minister of Employment and Immigration):: 1. In 1980 a total of 107,336 women were drawing unemployment insurance benefits during confinement.
February 26, 1982

2.	No. As the legislation permits only the payment of maternity benefit during the period in question, the requirements of capability and availability, necessary for regular benefit, are not issues to be considered.
3.	Unemployed women may not receive regular benefit during the period that commences eight weeks before the expected date of confinement and terminates six weeks after the actual week in which the confinement occurs. As this period is set by legislation, and there are no exempting provisions, any change in the claimant's availability will not affect the duration. It should be noted that the specific problems arising from the application of the legislative provisions dealing with benefits for reasons of maternity, were extensively reviewed by a task force which, among other things, has recommended major changes. These, however, are subject to approval by the government and the final decision has not yet been made.


Mr. Cossitt: Did the Department of Employment and Immigration hold a competition, number 402 for a CR-5 position, bearing the code number 0437-34-EIC-3133 and, if so (a) what were the names of those who applied under this competition and what were the names of those actually interviewed (b) has the position been filled and, if not, will immediate consideration be given to one of the applicants, Mr. James A. Windsor of 366 James Street East, Prescott, Ontario?


Lloyd Axworthy: No such competition, bearing code number 0437-34-EIC-3133 has been issued by the Canada Employment and Immigration Commission/Department, and therefore, the Commission/Department is unable fo offer any comment.


Mr. Herbert: 1.	Were public servants receiving the bilingualism bonus required to take a second test to determine their continuing eligibility for the bonus?
2.	Is it the government's intention to introduce such a retesting procedure and, if so, at what time intervals?
Order Paper Questions


Mr. Norman Kelly (Parliamentary Secretary to President of the Treasury Board):: 1. Yes, a number of them were. Since April 1, 1980, bilingualism bonus recipients have had to be confirmed annually, at the time of their official employee performance appraisal, as still meeting the language requirements of their position in order to continue receiving bonus payments. The Language Knowledge Examination (LKE) can be used for this purpose under the following circumstances:
(a)	when there is no linguistically qualified supervisor to confirm the employee's eligibility;
(b)	if the employee is not exempted from further testing by the Public Service Commission as a result of demonstrated high proficiency in the second official language;
(c)	if the employee does not possess LKE results which fall within the one and two year periods of validity established by the Public Service Commission; and
(d)	if an employee does not agree with the supervisor's assessment, he or she may have recourse to an LKE
2. See 1 above.


Mr. Herbert: In each of the past five years, by province and by stated first official language of the individual, how many public servants were receiving the bilingualism bonus?


Norman Kelly: The table below presents a breakdown by province (or by region where applicable), and by stated first official language of the individual, of the number of public servants which were eligible to receive the bilingualism bonus in each of the past five years.
In order to ensure consistency of the data supplied, figures for February, 1978, have been provided instead of those for December, 1977, as these were calculated by using slightly different criteria. Similarly, and as they are still eligible to receive the bilingualism bonus, employees of the Canada Post Corporation are included in the December, 1981 figures.
February '78 FOL FOL English French
December '78 FOL FOL English French
December '79 FOL FOL English French
December '80 FOL FOL English French
December '81 FOL FOL English French
British Columbia	74	26	95	28	81	31	97	29	93	43Alberta	77	II	99	22	87	21	91	29	88	43Saskatchewan	36	15	43	15	36	17	37	19	38	18Manitoba	149	67	180	62	161	67	167	95	165	121Ontario	874	544	1020	613	1056	675	1126	717	1214	834National Capital Region	12710	13408	13513	14545	13498	14955	13713	15901	14042	17664Quebec	1196	11287	1293	12613	1266	13344	1283	13779	1296	14208New Brunswick	480	702	592	785	625	842	673	952	646	1141Prince Edward Island	10	5	14	10	20	9	49	31	54	57Nova Scotia	196	82	169	91	217	105	241	113	242	164Newfoundland	13	3	17	7	24	11	28	10	29	7Northern Canada	3	5	4	8	6	13	7	15	4	20Outside Canada	15	14	139	52	152	62	155	70	169	74Total	15833	26169	17178	28851	17229	30152	17667	31760	18080	34394
February 26, 1982
Order Paper Questions OFFICIAL LANGUAGES


Mr. Herbert: What percentage of public servants working in the Department of Energy, Mines and Resources in Quebec indicate English as their First official language?
Hon. Marc Lalonde (Minister of Energy, Mines and
Resources): The Department of Energy, Mines and Resources reports as follows: 39.1 percent.


James Scott (Jim) Peterson: I ask, Madam Speaker, that the remaining questions be allowed to stand.


Mr. Young:: Madam Speaker, I have a question for the parliamentary secretary. Over the past several weeks I have been asking when I can expect an answer to questions Nos. 3,380 to 3,438 concerning the recommendations in the "Obstacles" report. 1 have been advised consistently that the parliamentary secretary has been "in hot pursuit" of answers to these questions. I am beginning to think what we are getting here are repeat shows of the "Bugs Bunny Road Runner Hour".
These questions are extremely important. The minister responsible previously advised us that these questions have already been responded to by the cabinet. I fail to see what possible reason there can be for not providing the answers to these questions on the Order Paper.


James Scott (Jim) Peterson: Madam Speaker, I thank the hon. member very much for drawing this matter to our attention.


Neil Young: Again.


James Scott (Jim) Peterson: It is a matter I will be prepared to bring to the attention of my hon. colleague on his return.
Just for the information of this House, I would like to draw to its attention that to date we have answered 2,809 questions, including those which have been answered today. We are working very hard to respond in a responsible parliamentary fashion to the questions which have been brought to our attention.


Some hon. Members:: Hear, hear!


Madam Speaker:: Shall the remaining questions stand?


Some hon. Members:: Agreed.



GOVERNMENT ORDERS


[Stage Direction]
ALLOTTED DAY, S.O. 58-CROWSNEST PASS FREIGHT RATES Hon. Don Mazankowski (Vegreville) moved:
That this House condemns the government for abandoning the historical and statutory rights of western grain producers by proposing an end to the Crowsnest Pass freight rate, thereby giving guarantees to the railways and not to the producers; regrets that an inquiry has been established without clearly defined terms of reference, without adequate provision for producer participation and without reference to Parliament; approves in principle the payment by the government on an annual basis of an amount equivalent to the 1981-82 railway revenue shortfall, provided that adequate performance and capacity guarantees are met by the railways; and, calls on the government to refer the document "Policy Statement on Western Rail Transportation" to the Standing Committee on Transport for full consideration.
He said: Mr. Speaker, on February 8 the Minister of Transport (Mr. Pepin) made a major policy statement on western rail transportation on behalf of the Liberal government in the city of Winnipeg, to the effect that the government proposes substantially to alter a historic and statutory provision which affects not only the producers of Canada but the whole economy of western Canada. The implications of this policy are enormous.
At the outset, Mr. Speaker, I would like to say on behalf of this party that we protest in the strongest way possible the fact that the minister chose to make the announcement outside the House. We find this particularly offensive inasmuch as the House was in session at the time. This is a matter of vital importance to western Canada, Mr. Speaker, and it is also an issue of national importance. It could change in a fundamental way the lifestyle of many Canadians. The statutory rate could be considered the pillar of western Canadian society and the western Canadian economy. It should be recognized that there is a tremendous amount of emotion in the west about the subject of statutory change.
In view of all this we would have thought that the minister would have had the common sense to stand in his place in the House and make his announcement and then be available to respond to the questions of Members of Parliament from that region in order to clarify matters.
It appears that Parliament and parliamentary committees are going to be ignored in this process. It also appears that in the next four to six months a backroom deal will be negotiated in private, that Parliament will stand idly by while a group appointed by the minister strikes up a deal in camera. The minister has told us that if farmers do not like it or do not agree, then he will proceed unilaterally. In other words, the terms of the agreement will be imposed; the government will go ahead anyway.
What I find even more disturbing is a report which appeared in The Globe and Mail on February 8 in which the minister is reported as saying that the government cannot indulge in a great consultative process with the public. I am not sure
February 26, 1982
[Stage Direction]
whether that means more unilateralism or not; it probably does. The minister will likely claim that there has been a tremendous debate, and there has, Mr. Speaker, but his particular proposal has not been debated at any length.
Is it any wonder that a mood of suspicion, anxiety and mistrust is growing in western Canada? There are two reasons for this, Mr. Speaker. First of all, most people in western Canada do not trust Liberal governments, and second, most people in western Canada put little trust in the railways.
This is a two-pronged situation. Surely the minister does not expect members of the House to stand idly by, a mere rubber stamp in the process? Surely he does not expect the farmers of Canada to accept a pig in a poke-an expression used by a former member of the House who found comfort and rest in the Liberal ranks. That is really what the minister is asking the farmers of Canada to do.
The process upon which the minister has embarked should be rejected on two counts. First, it should be rejected because he has chosen to circumvent the parliamentary process, thereby denying their legitimate role to elected Members of Parliament who should have a say in it. There is a double standard here, Mr. Speaker, and a contradiction. The minister very graciously referred a document on a new domestic air policy to the transport committee for study. I understand many hearings have already been held involving the industry, other interested parties and Members of Parliament and these are expected to be helpful. In the case before us, however, the minister has chosen not to take that route, thereby denying Members of Parliament, interested groups and producers the opportunity to debate the issue in a formal way.
On the second count, we believe that the process should be rejected on the basis that it denies the producers of Canada their legitimate right to be heard. I cannot emphasize too strongly that if this policy is implemented it will have a most profound effect upon the producers of Canada. They view it with fear, anxiety and apprehension because it could very dramatically alter the social and economic lifestyle of many people in western Canada. I am concerned about the way this policy has evolved and how the legislation will be drawn up, Mr. Speaker. I know the minister to be a reasonable man but I say to you, Sir, and to the House that the only word to describe his actions in this regard is contemptuous. I warn him that his actions will further fuel the fires of suspicion and mistrust that exist in western Canada.
It must not be forgotten that this process is being introduced by a government which does not have an elected member from rural western Canada in the House.
Mr. Munro (Esquimalt-Saanich);: And it never will.


Mr. Mazankowski:: I should like to deal briefly with the main objectives of the proposal introduced by the minister. First of all, it sets out to abandon the existing statutory freight rate; it commits the government to a level of funding equal to the 1981-82 railway revenue shortfall and it calls upon producers to meet any future cost increases beyond the 1981-82 shortfall in negotiation with the railways. One must pause and think about that, Mr. Speaker. What chance would producers have to negotiate freight rates with the railways? That would
Transportation
be very, very difficult indeed. Large corporations have tried to tackle the railways in an effort to gain a fair freight rate and have not succeeded. That is a serious weakness in the proposal.
While acknowledging the importance of the federal government's commitment to meet the current shortfall, I have to say that this party cannot accept a freight rate structure which will have an open-ended escalation clause that would result in increased charges being put on the backs of the producers. There is no way we can accept that, Mr. Speaker. Nor can this party accept the removal of the statutory freight rate assurance. This would have the effect of relieving the railways of a continuing obligation and shift it on to the backs of the producers as well.
The proposal also sets out to place a fixed ceiling on further federal contributions. That would mean that the government would be relieved of any additional burden over and above the 1981-82 shortfall while the producers would be bearing the brunt of any inflationary or cost increase associated with the movement of grain.
The minister has made this quite clear but other ministers have expressed different views. Apparently a "Crow rift" exists between the minister and the minister in the other place who is in charge of the Canadian Wheat Board. It is not the first time there has been a rift between the two ministers but this creates even more uncertainty in the minds of producers and others who are watching the debate with keen interest.
The minister in the other place says that a change will not be imposed but the minister across the way says that it will be, regardless whether there is agreement or not. These conflicts and varying interpretations must be cleared up.
When methods are being developed to establish a system of periodic reviews to provide railways with adequate compensation, in effect they remove statutory protection. They are couched in such subtle terms that many people have difficulty discerning them. We must ask ourselves what are the implications for producers, or what is the basis for calculating railway revenue shortfall? Also we have heard comments to the effect that any future increases to producers may well be tied to increases in grain prices.
What are the implications? If we look at Mr. Snavely's last report, we see that he indicated that if the gross revenue shortfall continues to increase at the same rate in the future, it will exceed $1 billion by 1986. Given the shortfall of $600 million and the prospect of a $1 billion shortfall in five years, it seems to me that in five years producers may very well be looking at increased transportation costs in the order of $400 million.
I say as simply and bluntly as I can that farmers cannot afford it, particularly at this time. It is estimated that next year farm income will drop by 15 per cent. Statistics reveal that fuel costs will rise by 25 per cent in 1982, and this is on top of a 63 per cent increase over the last two years. This

February 26, 1982
Transportation
amounts to an 89 per cent increase in fuel prices over a three-year period. Between 55 cents and 60 cents of that fuel price increase goes to the coffers of the federal government. It is a massive rip-off on the backs of producers. When we consider what the federal government will cash in on from its energy agreement or its oil pricing agreement signed with the western provinces-something in the order of $51 billion-the subsidies to meet the Crow deficit are pretty small and pale by comparison. The fact of the matter is that Canadian farmers are hurting with high interest and depressed commodity prices. The budget provided no relief, there are bankruptcies, dreams are being shattered, young people are losing confidence, a lifetime of investment in long hours and hard work is vanishing. In short, there is hopelessness and despair in the farming community.
We in this party want to know, and producers must know, what the minister had in mind when he asked Professor Gilson to consider the application of variable freight rates. We should like to know how the government sees the subsidy being distributed. We should like to know what the minister would like to see in terms of how the $600 million should be distributed; obviously he has some ideas. We should like to know what the minister had in mind when he referred to guarantee mechanisms to ensure adequate performance and capacity. Will it be only through legislation? Will it be through penalties or a performance bonus? What about investment guarantees? The House and producers of Canada need assurances that the investment provided through the funding of the federal government goes into beefing up the railway system rather than shopping centres, oil companies and hotels. With due respect, I do not think the minister dealt seriously with this issue; he was far too casual. Also we should like to know what mechanisms the minister has in mind to remove existing freight rate anomalies and to provide some semblance of parity between processed and unprocessed products. Also we should like to know what the government has in mind. We should like some enlightenment when the minister talks about economic diversification. How will it help western Canadian farmers? There is much at stake, much too much to be left solely to the task of the negotiator.
The policy enunciated was extremely vague in many areas; it is open to different interpretations. Someone suggested that it was a policy slathered in grease. Parliament should not be a bystander in the process; Parliament and its membership should be active participants. There should be no question about the fact that producers must be involved. It is an issue that is far greater than a simple freight rate adjustment. It strikes at the very fabric of the social and economic lifestyle of western Canada.
I remind the House that the west is in a rebellious mood; there is a feeling of volatility out there. Sometimes the volatility in the House reflects the mood in western Canada. The move to dismantle Crowsnest Pass freight rates is perceived to be yet another attack upon western Canada and a further escalation of the climate of confrontation we have witnessed of the government which generated intense mistrust and suspicion. There is a difference in the mood out there today compared with the mood when my party formed the Government
of Canada. At that time there was a mood of co-operation, a feeling of harmony and a feeling that we could do things together. There was a feeling of confidence and stability; promises and commitments were being kept and acted upon. We all know the mess in grain transportation when our party took over government. We had just come through a year when there was a loss of $1 billion worth of grain sales because of breakdowns in the transportation system. We sought and obtained the co-operation of all parties, including the provincial governments of western Canada. We appointed a railway co-ordinator. We worked together with the railways. We promised action on Prince Rupert, and action was taken. We promised action on preserving branch lines, and branch lines were preserved. There was a positive mood, not a negative one. Now the mood is really desperation.
I should like to turn to the question of mandate. Does the Liberal government have a mandate to abandon the Crowsnest Pass freight rates? Of course it does not. The Liberal government not only failed to live up to its promises to provide such things as cheap energy, energy self-sufficiency, low interest rates, a well-managed economy, jobs, adequate housing and a healthy agricultural climate, but it failed to tell Canadians what it intended to do. For example, it did not tell Canadians during the election campaign that it would embark upon a policy of confrontation which is literally tearing the country apart. It did not tell Canadians that it would spend the first 18 months of its term of office talking about a new Constitution and discarding the problems of the economy. It did not tell Canadians that it would bring in a devastating National Energy Program which is seeing men, equipment, capital and expertise flowing south of the border. It did not tell Canadians that it would tax them to the hilt, directly and indirectly, and literally double the price of energy. It did not tell Canadians that it would dismantle DREE or destroy the private sector. It did not tell Canadians that it would dismantle 20 per cent of the VIA Rail passenger route structure or that it would abandon Crowsnest Pass freight rates. I ask hon. members of the House whether the Liberal Party would have obtained its mandate from the Canadian people if it had told the truth? No, never!
Many of these crucial policies affect western Canada where there are no elected Liberal members west of the city of Winnipeg. Does one still wonder why there is alienation out there, mistrust or suspicion? Alienation and political reaction are ticking away like time bombs.
What is Liberal policy? The Liberal policy on the Crow, as indicated in its policy manual in 1980, was that it was committed to preserving statutory freight rates. As late as July 4 to July 6, 1980, at the Liberal Party convention, it was stated that the Liberal Party reaffirmed its determination to preserve statutory freight rates. The minister in this House acknowledged and agreed that the statutory rate must remain. There is a significant passage in Hansard for May 2, 1980 at page 693.
I had the floor at that time and said:
February 26, 1982

We have been saying that the Crow rate in statute form enshrined in law must remain. We have also said, and the hon. member is now saying it in this motion, that the railways should be adequately compensated for the movement of grain.
Then there is an interjection by the Minister of Transport (Mr. Pepin), as follows:


Jean-Luc Pepin: Right on.
In other words, he was agreeing with that statement.
As I said, there is no disagreement on that. Where there is debate and discussion but no clear consensus, it is on how the federal government will pay the difference. I repeat what I said on May 2, 1980:
We have been saying that the Crow rate in statute form enshrined in law must remain.
The minister at that time agreed. Today the minister says that a new statutory freight rate, which will have an increased freight rate for the producers, which will have built in a periodic escalation clause which will be paid for by the farmers after negotiations with the railways, is now being put into effect. That is entirely different. We have the deputy minister of transport suggesting in his comments to the press that the farmers will likely pay double or triple the Crow. If the cost triples, that means another $275 million to $300 million which will come from the pockets of the producers.
The deputy minister, when pinned down by reporters, said that he could not answer in any detail because "There were too many permutations and combinations." That is a far cry from the Liberal policy that was proposed during the election of 1980 and during a policy convention held in Winnipeg that year.
I repeat, the farmers simply cannot afford this additional cost. They are being strangled at the present time by high interest costs, high energy costs, high fertilizer costs, high machinery costs and high chemical costs. Most of those conditions are the product of this government. The farmers are facing reduced commodity prices. All of this is doing nothing more than driving nails further into the coffins of many progressive farmers in western Canada. The additional freight rate will simply add to that burden.
Our party has stated that the status quo, that is the existing arrangement, is not satisfactory. We have said that because it has brought us to the kind of chaos, breakdown and collapse in grain transportation which we see from time to time. We have said as well that the railways should be adequately compensated for hauling grain; that is, given a fair rate for hauling grain. We have said that the existing statutory freight rates should remain. We have said that the shortfall should be met by the federal treasury and that adequate guarantees must be provided to ensure adequate capacity and performance. When we say that, we are talking not simply about legislation but about penalties and/or rewards for extra, laudable performance.
As I have said before, we commend the minister for coming forth and telling the House and the country what the government is prepared to do in terms of meeting that shortfall. We have said that had to be done in order to proceed. We have also said that the anomalies of freight rates between processed
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and unprocessed products must be resolved. There should be no question about that. We have said as well that this can be done and must only be done with the provision that there is full and adequate consultation with the producers of Canada. Furthermore, we believe as well that the railways should not be relieved entirely of their statutory obligations. We believe they have an ongoing obligation and should continue to shoulder that ongoing obligation.
We believe as well that the federal government has an ongoing responsibility, in addition to the provision of the 19811982 shortfall, because there are a number of artificial and natural advantages that our competing countries have when it comes to getting our fair share of the export market potential. We believe that export grain, being a national asset, is an issue that has to have support in financial terms, in marketing terms and in moral terms in ensuring that we can maintain a healthy production in the export market of grains.
Furthermore, I believe that a very strong argument can be made for no further payments to the railways until they at least demonstrate to the satisfaction of the producers of Canada that they have installed adequate capacity, that they have put in place the kind of performance that will assure producers that they will deliver the grain on time in a reliable and effective fashion and, I stress again, to the satisfaction of the producers.
Some people believe that the Crowsnest Pass freight rates have always been a losing proposition for the railways. I want to tell this House that it has not been a losing proposition for 85 years. Up until about 1967, the Crowsnest Pass freight rate was compensatory. The railways made money on it. They built up vast empires during that period of time. They branched out into various activities.
I put to this House a very serious suggestion. It seems to me that if the railways could deliver grain in this country for half a cent a ton mile for 85 years, there may very well be an excellent argument made for the fact that surely they can deliver grain at a half a cent a ton mile plus $612 million for at least another 20 years. Maybe that is something the minister should consider. That would take us to the year 2000. I ask the minister to consider that proposal seriously. That would give the railways an opportunity to prove what they can do with $612 million annually. It would give the railways an opportunity to prove that they are serious about beefing up capacity and improving the service.
I have said before, and some people will argue, that that is quite a bit of money and we are tapping the federal treasury too severely. But I repeat again that this government is extracting a substantial amount of revenue out of western Canada in the form of energy taxes to the tune of $51 billio&ed-4n or $52 billion over the next Five years. Every time a farmer fills up his tractor or combine, between 55 cents and 60 cents on every gallon of fuel that goes into his machine goes to the federal coffers. That is almost outright confiscation against our food producers.

February 26, 1982
Transportation
I turn now to the New Democratic Party. The federal NDP say they want to retain the status quo, yet they want the Hall recommendations implemented. They cannot have it both ways. If the Hall recommendations are implemented, that is not the status quo. That is quite a change. The NDP should not argue that. They should be saying they are in favour of change. They offer as a panacea to improving the system the proposal to nationalize the CPR. They seem to be more interested in pursuing a philosophical objective than in improving the grain transportation system. Quite frankly, it would cost billions of dollars to do that and it would not move one additional bushel of grain.
The minister of transport of Saskatchewan says as well that he wants no change, but he is advocating change by recommending that we follow the Hall recommendations. He, too, wants to buy a railroad. He has a heritage trust fund in Saskatchewan that he is going to tap. He wants to buy the CPR. The minister there wants to spend the taxpayers' dollars in Saskatchewan in a way which will not improve the transportation system one iota. He is offering a Crow rate guarantee plan. Here again he is prepared to tax the people of Saskatchewan to fund a major portion of the freight bill to move processed products.


Jack Wendele Shields: No damn principles.


Donald Frank Mazankowski: Then I come to the Premier of Saskatchewan. Well, he favours a statutory rate but not necessarily the Crow. He says he is prepared to negotiate future cost increases as long as the producers keep the benefit of the Crow. But then he signed a document just the other day which says he is not prepared to accept any changes. Mr. Speaker, how can the New Democratic Party be taken seriously when they say they are going to fight, but when the crunch comes they become merely an appendage to the Liberal government in office?


Jack Wendele Shields: Always have been, always will be.


Donald Frank Mazankowski: When the chips are down they fall in line and bolster the hopes of the Liberal Party, a party which occupies the seat of a Treasury Board which is bankrupting this country. I say shame on them.
I say to you, Mr. Speaker, that if this country is in a mess today, the New Democratic Party of Canada must share the blame. I say to you as well that if the farmers of Canada lose their statutory rights, they must blame the NDP as well as the Liberals because the NDP put this government in office.


Some hon. Members:: Hear, hear!


Mr. Vic Althouse (Humboldt-Lake Centre):: Mr. Speaker, I have to take a moment to compose myself. I have been sort of snickering as I listened to the last speaker outline his perception of my party's position on the Crow. I would point out to the House and to the country, Mr. Speaker, that our party has been consistent this year, last year, during the most recent
election and in previous elections with regard to the Crow rate issue. I would point out that the hon. member's party still has members taking a different stand from the one he outlined. They are actively pursuing a program of doing away with the Crow, and they are unabashed critics of the Crow.
Before commencing my formal remarks I would just like to make a short comment about the allegation concerning the cost of nationalizing the CPR. If the hon. member was honest and looked at the amount of public money which has already been put into the CPR, and if he translated that into present day values and considered the time they have had the use of those assets, the difference between that and the current book or market value-whichever you want-of the CPR is less than $1 billion. Two or three years of the Crow subsidy would purchase the CPR and we could put the railway system on a national basis and operate it as a part of this country's national policy once more.


Some hon. Members:: Hear, hear!


Jean-Luc Pepin: It could hardly pay for the operating costs.


Victor Fredrich (Vic) Althouse: I am going to talk about the economics of the Crow rate but I want to put it in context by explaining to some extent the background. I think the reasons given for changing the Crow have essentially been described by the government and by those members of the Conservative Party who advocate change as being progressive reasons, reasons which are tied to economics and the philosophy of user-pay. I will get back to that, but I just want to point out that this country does not make very much sense from an economic point of view. This country is not something that would go together in an economic textbook if you were drawing boundaries and throwing people together. To quote a recent article by Don McGillivray:
The fact that Canada exists shows that an economic absurdity can become a political reality.
I think when we review the history behind the Crow rate we will see that there were a great many of what would now be called economic absurdities but which were in fact political realities which had to be faced up to and solved with a creative pragmatism in order that Canada could continue as a country.
Canada developed in spite of geographical, language, racial and cultural barriers. There are two languages and many races and cultures. No one, Mr. Speaker, would ever propose a change to the basic and fundamental framework of this country by saying that, because of economics, bilingualism should no longer exist. We live with the cost of two languages, and there is some cost, with no complaint because it is part of the way this country was put together. It came about because we did not want to fight a big and expensive war over it. We decided that compromise made more sense than worrying about future economic considerations. So we have a bilingual country. The same thing applies to the signing of native treaties. We guaranteed certain native rights, not thinking about future economics but because it made sense, at the time,
February 26, 1982

for political and defence reasons, to avoid bloodshed. And it allowed us to develop the whole of this country by following that route.
I began my remarks in this way because the Crowsnest agreement was developed for those same reasons. Even though there was a railway across Canada connecting the west to the centre, southeastern British Columbia was, in effect, being invaded by Americans. The states of Oregon and Washington were once British territories, but American settlers moved in and they became American. That was happening to the mineral rich area of southeastern British Columbia, and so that province urged the Government of Canada to run a branch line into the Crowsnest Pass in order to maintain our hold on that part of the country. There were political, military and economic reasons for this. They were good reasons in 1896 and there continue to be good reasons today.
When the then provincial government of Manitoba heard of the proposed gift to the CPR to compensate them for moving a line into that part of the country, they pointed out that a lot of farmers were very unhappy with the actions of the CPR. It was a monopoly and was behaving like one. It was laying down the rules as to where the little towns would be built, where the farmers could deliver their grain and which elevators would be situated on which sidings.
Now, there was quite a lot of separatist talk at the time, and part of the agreement reached was that farmers and settlers in western Canada would be guaranteed a rate based on equal distance, equal rates. That was the compromise reached at that time. The provinces of Saskatchewan and Alberta were established after 1905, and changes to the rate did not take place until World War I when it was allowed to lapse for a while. Following World War I there was a great deal of farmer unrest because of falling grain prices and freight rate inequities. We must remember that only those points which existed in 1896 and 1897 received the benefit of the Crow rate originally. All points developed since on other rail lines and in other towns and villages were not eligible for the rate. There were great inequities.
In 1926 a new statute was passed, not because of economics but because there were 65 progressive members mainly representing that part of the country here in the Parliament of Canada. The statute of 1926 was put in place and has remained ever since. It has not been an unchanging statute; the benefits have not remained unchanged.
The railways have been allowed to abandon some lines in order to cut costs. They have received branch line subsidies, free hopper cars and free repairs to rail cars. Therefore, the rate is not the same as it was in 1926.
On top of that, the Wheat Board marketing system came in. It was part of the tumult of the early 1920s when the wheat pools were set up following the establishment of the Canadian Wheat Board. That form of orderly marketing allowed an improved use of cars and a faster turnaround. Management of the system has to some extent been borne by the farmers
Transportation
through the Canadian Wheat Board. All this reduced railway costs and made the system more equitable. It was more able to survive.
I want to follow up on a point made by the hon. member for Vegreville (Mr. Mazankowski). He pointed out that the railways did not always lose money with this rate. We must remember that the land has always been and will continue to be there. Prices go up and down. Years ago Parliament granted the railways a similar long life. It is a corporation which will not die. It has to take the ups with the downs.
When the minister announced changes to the rate, he pointed out that at current grain prices it only takes between 2 per cent and 3 per cent to pay the transportation costs. That may be true in this day and age. I would like to point out something that no western Canadian has forgotten. In the 1930s, 85 per cent to 100 per cent of the price of grain was taken up with freight rates. One can go into any community and find an old-timer who recalls the time he shipped a carload of barley or oats and received a bill from the company saying he owed so much for freight. Everyone knows the standard response-"We have no money but we have more grain." The situation was a little like the current interest rate policy.
The supposed advantages touted by those who think the rate should change are as follows. They assume there will be increased livestock production in the west in spite of the fact that the increase will not be more than the losses in the grain sector. That argument is still being made by proponents of the rate in spite of the fact that the livestock industry in this country has been encouraged to diversify. There have been active programs to force livestock production in Ontario, Quebec, the maritimes and central British Columbia. Doing away with the Crow rate will disrupt that, yet we are told there will be more livestock production. We are not given any source for this information.
We have to compete in world markets. That is why grain farmers insist that the Crow rate remain. This country does not have the same cheap water transportation as other countries. In order to be competitive with the United States, our main competitor, there must be additional subsidies for grain transportation. The United States grants massive subsidies to its inland waterways. The river system is maintained by direct payments from the U.S. treasury at no cost to the users. We cannot compete without a comparable program. The Crow rate has served as that program.
If the Crow disappears, livestock producers will have some difficulty. When we talk of transportation subsidies, what about the At and East rates and the feed grain policy in all their various permutations? Therefore, there is an advantage to those outside western Canada.
The basic question is, where will this increased meat production be sold? This country now imports meat from the United States and the European Economic Community. Very little is sold to Japan and the eastern bloc countries. Those countries prefer to bring in feed grains and hire their own people to feed the livestock.

February 26, 1982
Transportation
Where will we find a 65 per cent increase in sales of our livestock production talked about in such rosy terms by the Minister of Transport (Mr. Pepin) and the Minister of Agriculture (Mr. Whelan)? Where is the market? There is none. What is the incentive? Producers are now losing between 18 and 20 cents a pound. They are losing between $200 and $300 on each animal. What kind of incentive is that?
If we follow the bookkeeping or Snavely kind of economics, it will cost $12.50 to produce a bushel of wheat. What compensation will there be for the farmer? If that kind of economics and accounting is good enough for the railways, why does it not make sense for the farmers? Why does it not apply to agriculture? It is grossly unfair to look only at this in terms of the railway package and commitment. If this is going to be opened up, it should be opened up all the way. Look at the compensation which was received in the past. Put that into present day values. At least make it fair on both sides of the table.
At the moment the farmers are being asked to give up the agreement. The railways are getting off scot-free. That is grossly unfair. We say the Crow rate should be kept and the system should be improved. It would be disruptive to all of Canada to do away with it.
(Translation]


Mr. Deputy Speaker:: It being one o'clock, I do now leave the chair until two o'clock.
At one o'clock the House took recess.


[Stage Direction]
AFTER RECESS

The House resumed at 2 p.m.
Jean-Luc Pepin: Mr. Speaker, recently I just spent a number of days in the west, in Delisle and Lethbridge, among other places. I met a number of people there who were wondering-and more of them are wondering-what kind of minister of transport my hon. friend from Vegreville (Mr. Mazankowski) would have been if he had had the good fortune to remain minister of transport for a longer period of time.
One way to answer this question is to see what he was asking of me this morning and judge him, at least in part, by that. He mentioned six or seven conditions I should have met prior to presenting the policy on western transportation.
First, he said that I should have held an inquiry of some sort. He is not satisfied with the degree of inquiry that has taken place up to now. Presumably the inquiry he asks for would have taken some time. I might say that his view does not correspond to the generality of views expressed to me by westerners. Nevertheless, he would have asked me to have an inquiry.
Second, he mentioned that there should have been a study by Parliament. Presumably what he has in mind is a committee of the House of Commons which would analyse the issue in depth. This would also have taken time.
He suggested, with a smile, that I should have a change made in the resolutions of the Liberal Party on the Crow rate. That might have taken a few days or months-


Mr. Lewis:: Or years.


Jean-Luc Pepin: That is assuming one is not satisfied with the present resolution, which I am.
He also mentioned that I should have had a national mandate, presumably in an election of some kind. We would have had to wait another few years for that.
He also mentioned I should have had some elected members from western Canada on this side of the House. That might be done faster but, nevertheless, it might take some time also.


Philip Derek Lewis: It might be difficult too.


Jean-Luc Pepin: He also mentioned that I should be able clearly to demonstrate that the railways can and will carry grain in the most efficient way. I am satisfied that the railways are now able to do so but others might have taken more time to accept that proposition. Finally, he said that I should wait until all economic circumstances were more favourable.
I suggest very humbly and sincerely that he would have wanted me to wait and not do anything. The implication is that this is what he would have done. If he had practised what he is telling me to do he would not have remained very popular in the west.
Westerners believe that he would have done something to the Crow rate, but, again, if the hon. member had applied the same standards for himself which he is suggesting to me, we would be talking about it for years to come.
I believe that western Canada cannot wait that long. I suggest to you, Mr. Speaker, that the need for a strengthening of the main line of the railway in western Canada is extremely urgent. If there is anything which is urgent, this is it.
Since I have already spent a considerable amount of time on the road explaining the statement we made on February 8 in Winnipeg, I will not dwell on it for long. However, it is an absolute necessity that people read and understand that statement well.
There are three essential parts to that statement. The first includes a number of firm principles that the government states as its own beliefs. These are firm principles and they will be found in the statutory document we will end up with at the end of this current exercise. The statutory framework itself is a firm concept. The adequate compensation concept of the railway is a firm concept although not yet defined in detail. It will be. The guarantee of the responsibilities of the railways is
February 26, 1982

also a firm statement. The federal contributions are firm and the obligation for producers to pay more is also a firm concept, as is the necessity to increase the efficiency of the railways.
O)
That is the first part. The second part brings up a number of the issues or debatable items which are-and this will be the third part-given to a federal representative, Dr. Gilson, with the mandate of going to the interested parties trying to maximize the consensus, to bring it out, to define it, make it more specific and precise than it is now.
That is in the second part. It includes concepts like the proper level of compensation to the railways and the manner of payment of federal government subsidies; will it be to the farmers or will it be to the railways? It includes a discussion on performance guarantees, what they should be and how they should be given and implemented. It includes also a resolution of the debate on variable rates. Are there some that are acceptable? Are they all not acceptable? Another question is, what is the best way of supporting diversification and processing in western Canada? What should be included in the final statute the House will be asked to pass in due course?
That is the second part of the statement of February 8. I repeat that it involves a number of questions on which the government, in a very democratic fashion, would like to have the contributions and views of the interested parties in a very democratic fashion. I say that with great emphasis, because much of what comes out by way of condemnation of what we are doing is a misunderstanding, willingly or not, of the statement itself.
The article I have in my hand is entitled "Saskatchewan Challenges The Pepin Plan". The title itself is already a mistake. There is no Pepin plan now. There is only part of one, and the reason is that the government has in the most democratic fashion, asked interested parties to complete the "Pepin Plan", if that is what you want to call it.


Mr. Hovdebo:: You have just said to us there are three nonnegotiable points.


Jean-Luc Pepin: I will answer all questions later with great pleasure. Again there is misinformation. On page 2 the article says:
What is not in the Pepin plan is protection of the two fundamental principles of the Crow rate. There is no fixed rate for the producer.
And there will not be any, but I am in a pretty good position on that, because Premier Blakeney himself was saying a few days ago, "Perhaps a revision of the deal makes sense." All virtue does not lie with the New Democratic Party on this matter. Far from it. They are parsimonious, occasionally; even when they start reasoning with their heads instead of their
Transportation
feet, they are most reactionary. But this is not the important point.
There is no equal rate for equal distance.
That is the question on variable rates. That is the very question the government has asked Dr. Gilson to help us elucidate in consultation with the interested parties. It was very wrong, undemocratic and unfair of the government of Saskatchewan to accuse us of not having proclaimed as a principle a concept that we have asked the interested parties to debate first.
So much for the statement we made on February 8. Let us look now at the motion we have before us today. Let us analyse it in some depth. We are told that the author of this motion:
-approves in principle the payment by the government on an annual basis of an amount equivalent to the 1981-82 railway revenue shortfall-
Thank you very much. That is a good start. If we take the shortfall to mean essentially the losses incurred by the railways, $376 million in the last year, plus the subsidies paid by the government, $236 million, that should give us about $600 million a year of federal contribution to grain transportation in western Canada.
We are willing to go further than that, and hon. members will find in the future statute a confirmation of the branch line rehabilitation program and also the purchase of another 1,280 hopper cars in addition to the 10,000 the government has already paid for. The degree of subsidy would be more, as recognized by the government now, on an annual basis- something like $800 million-than the $600 million the hon. member for Vegreville is willing to go along with.
We start parting ways when he does not come out for any increase in the participation of the farmer in the transportation of his grain. I am not absolutely sure, but I gather from what he said today that he does not want to change anything in that particular area.
With respect to the Crow gap being more than the money the federal government is willing to put into filling it now, if the hon. member for Vegreville had his way, he would have a continuation of the gap, he would have a continuation of the inadequacy of railway compensation for the transportation of grain. What he has recommended is simply again to postpone the problem, not to resolve it now. What he would have is a continuation of the problem and a continuation of the anxiety of westerners as to the adequacy of their transportation system. That is what this government does not want to continue. We think the time has come to give western Canada an adequate transportation system. The time has not only come but perhaps has to a great extent passed.
A number of other things are said in the motion that need to be underlined. The author of the motion regrets that an inquiry has been established without clearly defined terms of reference. Let me tell my good friend, the hon. member for

February 26, 1982
Transportation
Vegreville, that this is not an inquiry. This is a negotiation. Everyone-brother, sister or his mother-whom 1 have met in the west has said to me, "Pepin, no more royal commissions. What we need is negotiation; get on with it". The mention of the lack of an inquiry will not be particularly welcomed in the west. Westerners think, generally, that the time has come to negotiate. The time has come to deal. This is what the interested parties want and this is what we are giving them.
The hon. member for Vegreville says the terms of reference are not clear enough. The statement we made on February 8 in Winnipeg was to represent the terms of reference of Dr. Gilson. In the coming days I intend to be even more specific and refine further the job he has been asked to do, and I will table that document in the House in due course.
The third point the hon. member makes has to do with our not making adequate provision for producer participation. As I have already indicated, I cannot accept that. Everybody says, "Get on with the job." Everybody would like to be there, obviously, but the interested parties themselves, grouped in the Western Agricultural Conference and in the Prairie Commodity Coalition, will select the members they want to be at the negotiating table with Dr. Gilson.


Stanley J. Hovdebo: Anyone from the farmers' union?


Jean-Luc Pepin: Anyone who wants to negotiate. As I understand it, the National Farmers' Union is not too keen on negotiating. They are like the New Democratic Party. They say, "No, no, no; no change." They are reactionary. Hell will freeze and they will not change. Anyone who wants to negotiate is allowed to be represented at the table, and Dr. Gilson will report in due course on the consensus he obtains so everyone will be in a position to compare that with what the different farm organizations have said before, and everyone will be in a position to compare that with what the government will come up with by way of a final policy position on this matter.
My friend the hon. member for Vegreville also regrets that there was no reference to Parliament. I do not know what he has in mind. Does he have in mind that the negotiations should have been given to a committee of Parliament? I do not think he has that in mind. Does he have in mind that we should have had a meeting or a set of meetings in the Standing Committee on Transport to look at the documents?


Donald Frank Mazankowski: Just like the air policy.


Jean-Luc Pepin: Indeed, we could do that; I have no philosophical opposition. I just want to remind the House that in due course the statute will be presented to the House and there will be ample opportunity to debate it.


Donald Frank Mazankowski: Just like the air policy.


Jean-Luc Pepin: There are three related matters that I should like to raise in the ten minutes left to me, Mr. Speaker. The first concerns the guarantees that the railways will be asked to provide. A number of questions were raised this morning. Some people are afraid that the government is not going to protect the farmer against the "ogreness"-if that word is English-of the railways. Let me emphasize the fact that the original Crow rate was not a subsidy, it was a protective system. We want to keep it that way.
What we will have in the future is a statutory framework instead of a statutory rate. The statutory rate was very comfortable but my friends in the NDP know that the railways, being obliged to carry grain at that cost level, did not do it with very much enthusiasm until the federal government brought in plans for the rehabilitation of branch lines and started to buy hopper cars. In other words, the railways are not held to the impossible. As a matter of fact, according to some decisions of the Supreme Court they can only be held to a reasonable effort. A number of people have said that the Crow rate died when the federal government started buying hopper cars, and a lot can be said for that view.
I want to emphasize that we are going to have a statutory framework on grain transportation in western Canada. This will include, first of all, a mechanism or process or formula for the determination of a compensatory rate. That will most probably be in the bill.
Second, there will be a set of guarantees with respect to railway performance, railway investment and developmental rates for products, etc. Third, there will be a right to access to data. A monitoring system will be set up, possibly with a set of rewards or penalties, for the railways regarding their guarantee of performance and investment.
May I repeat that the system that will come out of this exercise will be a statutory one. It will be better than the statutory fixed rate the western farmer has now. Most of them realize that the fixed rate is not realistic any longer. That is what I wanted to say about railway guarantees, Mr. Speaker.
The next item I should like to tackle is the question whether the farmer can afford to pay more than the Crow rate, and in that regard I should like to make five points for the record.
First of all, there is no doubt that some farmers are going to be affected-I recognize that. So the government is being quite generous in this instance by allocating $1.35 billion for this purpose in the budget. Second, in the past the western farmer has paid more for transportation of grain, proportionately, than he pays now. There was a time, in 1958, when the Crow rate represented 75 per cent of the true value of transportation. There was also a time, in 1960, when transportation represented 8 per cent of the revenue of the farmer for his grain at Thunder Bay. Now it represents only 2.2 per cent. One could make the case that there were times in the past
February 26, 1982

when transportation was a more costly item in the production of grain in western Canada.
Third, the farmer will not pay the full rate. In other words, transportation in western Canada will always be at a special rate and grain will always be a special commodity. The railways will never have to pay commercial rates for the transportation of grain. Obviously the concept of a compensatory rate is a limited one in comparison to what the railways would like.
The federal government is going to put a lot of money into easing the pain of western farmers when it comes to the transportation of grain. I have already mentioned how this will come about. The federal government will pay the current Crow benefit representing about $600 million per year. In the statement I made in Winnipeg I also envisaged that money might be made available, within the budgetary framework we now have, for a contribution to the added cost after 1981-82.1 have already referred to the continuation of the branch line rehabilitation program and the purchase of hopper cars.
But the main point I want to make here is that western farmers stand to gain by having a damn good transportation system-sorry for the "damn", Mr. Speaker! I was the minister in charge of the Canadian Wheat Board in the late sixties, so I have seen the uncertainty that exists among farmers about the adequacy of the transportation system. It is the intention and purpose of the government to put an end to this uncertainty about the transportation of present volume, and the uncertainty about the transportation of future volume. I do not have to wonder too much about the reaction of the western farmer when he is told he could sell a lot more grain. First of all he wants to be certain that the grain will be hauled.
There should also be a savings for the farmers on storage and on the purchase of hopper cars.
This morning a newspaper reported that the Canadian Wheat Board complained it was losing sales internationally because the system was not good enough to make it possible for more grain to be shipped.
Another thing that is changing in the west is that the western farmer-in Saskatchewan as elsewhere-is realizing that indeed he has an interest in transportation as the producer of raw grain, but he also has an interest as a processor of grain. The western grain producer who is a member of a wheat pool is interested in the maintenance of the best possible rate, but as a processor-for example, the Saskatchewan wheat pool accounts for 35 per cent of all rapeseed crushed in this country-is also interested in his processed products getting good transportation at good rates.
These are also ideas that are being expressed which might only make it more palatable for the western farmer to accept an increase in the basic rate. The rate might be tied to the grain stabilization program or to the cost of grain nationally
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and internationally. These ideas are being debated and no doubt will result in acceptable compromises.
The third matter being raised these days in western Canada concerns variable rates and whether they are tolerable. Mr. Speaker, some may be and others may not. On this subject the Saskatchewan government is making a big fuss about what it calls the fact that the policy we have announced would contribute to a deterioration of rural life in western Canada. It is inventing all sorts of things to demonstrate that. Anyone who has knowledge of the facts knows that consolidation of rural life in western Canada is a historical trend. It has been going on for a number of years with the Crow being the basic rate for the transportation of grain. Essentially it has been caused by the economics of primary elevators. As old elevators become obsolete they are replaced with others that have a much larger throughput. In many cases changes have also been caused by events that come under the control of provincial governments, such as building highways, integrating of schools and hospitals and so on.
If anyone is guilty of having contributed to the deterioration of rural life in Saskatchewan, it is likely to be the government of Saskatchewan. I do not blame it, however, because these events are the result of decisions made by individuals.
My friends opposite who love Hall so much should read the Hall report, on that subject, but, in any case, 1 should like one day to put some quotations from the report on the record. The truth of the matter is that a decision has not been made on variable rates. I repeat that this is one item which is on the table for discussion with the Gilson group.
I should like to reflect for a minute upon change. There is no doubt that everyone theoretically loves change, as far as it affects others. We have introduced an important statement which I think is but a recognition of changes which have already taken place. Knowing that people do not like to adjust to change, the policy presented by the government on western transportation was very democratic in the sense that we constantly took into account the view of interested parties, which I have demonstrated. Also I and many others think the government has been quite generous in the amount of money it is putting on the table to cushion the adjustments farmers will have to make. Finally and fundamentally, in order to protect farmers even better than in the past, we will in due course present a bill to the House that will consecrate the guarantees to which I have already referred.


Hon. Alvin Hamilton (Qu'Appelle-Moose Mountain):: Mr. Speaker, it is a very unique occasion when a westerner hears the account of the Minister of Transport (Mr. Pepin) about the problems of being understood in western Canada. After the speech which he just delivered, I can understand why farmers are somewhat confused. If the minister would just sit back in calm reflection and visualize the facts of life in the country, he

February 26, 1982
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would not be guilty of the type of confused statement he just made.
The debate on the Crow is not just a matter of dollars and cents or a matter of giving in to the promotion and con job of railways over the last 50 years. It is not just a question of trying to negotiate in a democratic fashion. What the minister said out of his own lips indicated that he did not understand democracy. I do not intend to become involved in a dog fight with the minister. I just want to make my points simply and occasionally take a crack at something the minister said which was pretty silly in relation to the facts, in the hope that every person in the country knows what this debate is all about.
Rightly or wrongly, Crow rates are part of the agreement which built Canada. Years ago the people of Quebec and Ontario were faced with the rush for land by Americans from the south. That was stopped in 1812-1819. Later on, to stop the rush for land, people from all over the world-people from Europe and Asia and even people from Quebec, Ontario and the maritimes-were asked by the federal government to settle in the west, which was described at that time as a desert unfit for human habitation. The key to bringing the population there was the railway.
The government which formed the nation sold its soul and its wealth to bribe the company to come in and construct a railway. As part of the deal a pledge was made to the immigrants who came. We tried to protect them in various ways. An agreement was made, the details of which are not important to this debate. Advertisements were placed in newspapers across the country and in Europe guaranteeing that if people came to western Canada they would always have an opportunity to market their grain. We settled the desert and made it one of the most productive places in the world in three generations. Always in the back of our minds we knew that we had a protection, a maximum rate on the hauling of grain to export position. This agreement became a statute in 1926. It has been amended, changed, confirmed and reconfirmed. The Crow rate is a mighty important but small part of our national Constitution.
When the report of the Hall commission came down five years ago, I stood in my place in the House and said on behalf of all westerners that the report was our Magna Carta, and it was. When the Minister of Transport made his statement in Winnipeg just last week, once again I rose in my place and questioned the Minister of Agriculture (Mr. Whelan) in the House. I asked him to protest this betrayal of the Railway Act, the National Transportation Act and the agreement on the Crow by threatening to resign if the government did not change its direction. This is our Magna Carta; this is part of the Canadian Constitution.
In its judgment a few months ago, the Supreme Court of Canada made it very clear to the whole world that our Constitution is not only comprised of written law. Our Constitution is comprised of the common law, customs, beliefs and oral agreements. It is comprised of the statutes of the nation, as well as the bills of rights of various provinces and at the national level. I hope it will be comprised of the new Canada
Act some day. The decision of the Supreme Court made clear that the Constitution was not just what a bunch of lawyers wrote down or what the statutes provided. It is comprised of many things. They call them "conventions"; I just call it the understanding of the rights of people. What we have had for years and years is our right.
I will not enter into academic, legalistic high school arguments about right or wrong in this issue, but we should not change the Magna Carta every 85 years, even if the Prime Minister (Mr. Trudeau) and the Minister of Agriculture say we should. A fundamental right cannot be changed in a year or two. It is only changed by agreement of all parties, not by agreement of just a few.
I should like to refer to an editorial which appeared in the Saskatoon Star-Phoenix, a newspaper which has supported, as have many westerners, a re-examination of the Crow on a rational basis and a change to this part of the Constitution by discussing the actual situation. As I read the article, the minister will know that there is no animosity in the heart of this newspaper toward him. It reads:
Jean-Luc Pepin made his presence felt as never before in Saskatchewan this week. He left in his wake the impression of a personable, even charming, individual but one who unfortunately failed to grasp the mood of a province wherein many are feeling a sense of betrayal over proposed changes to the long-cherished Crow rate.
What this means is that the main message the transport minister should have delivered did not come through. He spoke in glowing terms and with impeccable logic of the ideal transport system to come as result of finally breaking the logjam over the Crow rate.
The idea of tackling the Crow rate issue is one whose time has come.
But Pepin did not implant the belief that the vast improvements he forsees are guaranteed. He assumed a trust in his faraway central government that has become battered in recent years in the west. He assumed a trust in railway companies that has never been widely felt here.
He left worried Saskatchewan residents in his wake. They are saying, in effect, "but what if we pay all this extra money and the system is not improved? What if the railways are saying five years from now that yes, they have more revenue, but it's still not enough?"
They have been doing that for 50 years. The editorial continues:
That is admittedly what politicians call the worst-case scenario. It reflects the emotion that surrounds the Crow rate issue. It reflects the symbolism to many Westerners in the act of striking down the 1897 statute that enshrined this one great concession from the centre of power.
That article was from a western newspaper. An eastern paper, The Globe and Mail, writes the same thing only in a different way. On February 9, 1982, the following appeared in an article in that paper:
The fact is that the prairies do not trust the federal government. They have no faith in any promises Mr. Pepin may make, no faith in any promises his government may make. They have the Crow. They'll stick to the Crow.
Will the federal government ever grasp the idea that it takes action, not promises, to win back a totally disillusioned electorate?
If that does not impress the House, I have another article published in a local paper from Renfrew county, Ontario. The paper is called the Renfrew Mercury and the article appeared
February 26, 1982

February 17, 1982. The writer is explaining the Crow rate to the Renfrew reading public as follows:
For us here in Renfrew county, it is sometimes difficult to understand what the Crow rate is all about. The Crow rate was the name given to an agreement signed by the federal government, the CPR and the farmers of the west some 85 years ago. It was part of Confederation.
That is all the writer has to say. The eastern farmers and the eastern people know that the Crow rate is part of the building of this nation.
Let us put all of this into perspective. We are in the middle of a centralizing movement that has existed since the war. Everyone knows what I am talking about. We have listened to the constitutional debate. We have seen the National Transportation Act of 1967 passed with its centralizing power. We have seen the energy policy of this government over the last two or three years deliberately unconstitutionally taking an extra $50 billion in taxes from the western provinces.
We have witnessed the unilateral attempt by the government to change the Constitution. We have seen the pressure of various ministers to set up national marketing boards, not to sell stuff but to control people. I could give a thousand other examples, but people know that the politicians in government have put their faith in experts. Experts have a record of being wrong, a record which has been unsurpassed in the last 20 years.
The Hall commission report dealing with this subject recommended no change in the Crow. The Hall commission heard all of the same arguments from the railways. All the groups said "Keep the Crow. Set up a prairie rail authority run by prairie people, and we will take all the lands on which you claim you are losing money and we will run them. We will make money out of them and then we will give them back to you." They brought in the concept that instead of pulling back and raising rates, they should help develop the west.
This could be stated to be a farm position of all parties, of all politicians. No one should ask the farmers of western Canada to give one inch on this Crow issue until the government does a number of things. First, the government should stop interfering with the Canadian Wheat Board and the Board of Grain Commissioners. Those boards should have the independence and the right to carry out their functions without interference. Every farmer knows what 1 am talking about, particularly when it comes to these low prices of $1 below what they should be. They are the result of this type of interference.
Second, a prairie rail authority should be in place looking after the 2,000 miles of railroad on which they claim they lose money. Some centralized group should not be trying to run it. That is mentioned in the Hall commission report.
Third, the railways should railroad and carry out the terms of the Railway Act, the National Transportation Act and other directives of the government. No amount of guarantees by a government that has a record of not keeping the law will suffice, because for 50 years the railways have ignored all directives from government. Metric conversion is supposed to be taking place. Are the railways converting to metric? They have never even thought about it. The railways do not bother
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about the nitwits we have around here. Why should they? They would never force it on the railways.
Fourth, we want from this government less talk about some mysterious development program. We want to know what the government is going to do about the development of the geothermal resources, which admittedly belong to the provinces. We want to know what is going to be done about the gas reserves. We want to know what is being done with all of the coal in Saskatchewan, Alberta and British Columbia. We want to know what we are going to do with all the water that is available.
In particular, we want to see a transportation system outlined in black and white and in the actual state of being built. We have to have a railway that is non-stop from the south of Saskatchewan to Churchill to haul potash, coal, grain, for eight to ten months of the year to Churchill. This proposal has been before the western provinces for 60 long years. If all of this were formulated over the next five, ten or 15 years and it is shown that you mean business and action, then I think the farmers would be willing to sit down and consider rationally what should be done.
I am confident that if the government goes forward with this development program, it will make so much money for the railroads and so much money for the provinces, will create jobs and give additional taxes to the federal government, that we will not hear of the Crow rate for a long time.
This has happened before. The railways came roaring in here several times asking for changes in the Crow rate. In 1967 they admitted publicly, and every party in the House admitted, they were making money out of the Crow rate. So we voted them down. Parliament would not even give up the right to maintain that Crow rate to any board that we set up, like the national transportation board.
I know the history the hard way, but I am simply saying to all Canadians that when one is caught breaking the law, when one is caught breaking the Constitution, one has no way of getting this proposal through. There has to be trust and there is none.
Then there is the crowning insult. Think of the fact that, after all this bad advice we have received from economists in the last 25 or 30 years, they went out and said there is no future for farmers in any part of Canada. They said we had to get rid of two out of every three farmers. They would not agree there was a world market, they would not agree there were hungry people out there willing to work and pay for food. In a report to the government in 1969 they recommended we get rid of two out of three farmers. We should be kind to the old ones by paying them to get off, but get rid of the young ones First. All they held out in the future for westerners was the export of 360 million bushels a year. What are we exporting now? Over one billion bushels a year, and exports are going up all the time because the world needs them and we can produce. But we have to have a railway system to get the produce out.

February 26, 1982
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Now, my final worlds are this. How can we expect trust from farmers when they read who wrote these words? It is all in this book. The man I am talking about is the head of this so-called negotiating team. He did awfully good work for me when I was the minister, yet his name appears in here. How would you like it, Mr. Speaker, if you were a chicken and you were told that a weasel was being put in charge of the hen house? That is all I have to say, thank you very much.


Mr. Pierre Deniger (Parliamentary Secretary to Minister of State (Multiculturalism)):: Mr. Speaker, I am very proud to be taking part in this very important debate today. After the briefing I had last night and this morning, and on the basis of my experience in the office of the former minister of transport and also as a lawyer for the Railway Transport Committee of the Canadian Transport Commission, I must, first of all, render unto Ceasar the things that are Ceasar's and say that the speech by the member for Qu'Appelle-Moose Mountain (Mr. Hamilton) is indeed typical of those people who do not want the Crowsnest Pass rate to be changed the slightest bit. That is most unfortunate, Mr. Speaker, and I am sure it is not a matter of a generation gap between myself and the hon. member who spoke before me. I certainly do not think so. But first, if I may, I shall quote from a speech made by the Premier of Alberta, the Hon. Peter Lougheed, in the Alberta legislature on October 14, 1981:
In our view, the entire question of the Crowsnest Pass rate should now be given a priority in decision-making in Canada instead of being left to gather dust.
That is what the Premier of Alberta said, also the provincial premier of the member for Vegreville (Mr. Mazankowski). I therefore fail to understand, Mr. Speaker, why the former minister of transport is criticizing us for taking action. It seems obvious to me that if the hon. member has had a chance to stay on as minister of transport, he would have taken action. And if he has to blame someone, I think he should be blaming his leader, the former prime minister, who brought about the election that put him out of a job, Mr. Speaker. Westerners know all about the Crowsnest Pass. For most wheat producers, it is like an insurance policy, but easterners, and perhaps Quebecers even more so, are certainly not all very familiar with my version of the history of the Crowsnest Pass.
We have heard the New Democratic Party's version, and we have heard that of the Progressive Conservative Party, and now I should like to have an opportunity to give Quebecers and all Canadians who are listening to me today, my version of the Crowsnest Pass agreement concluded by the government and Canadian Pacific in September 1897. The agreement provided that the government would subsidize the construction of 300 miles of track between Lethbridge and southern British Columbia, through the Crowsnest Pass, if the railway company promised to apply reduced freight rates. That was the deal, Mr. Speaker. In 1925, the agreement became an integral part of legislation applying to all railway companies operating
in the Prairies. I shall digress, if I may, and examine some of the statements by the member for Vegreville, who was saying earlier in his speech that this should have been referred to the Standing Committee on Transport.
I myself am a member of the Standing Committee on Transport. As a politician, of course I want everything to be considered in the transport committee, but at the appropriate time, which is when an amendment to legislation is proposed. I feel that at this stage, it would have been premature to refer to the transport committee a decision that has yet to be made. Regarding our domestic air policy, to which the member for Vegreville alluded, not legislation but policy is being amended, and I want to congratulate the minister for deeming this the appropriate time for referring the policy to our committee. The situation is therefore as follows: In 1926, the Crow was part of the Railway Act. So what has happened since that time? Well, today, the agreement applies to 16,500 miles of railway lines, and not 2,915 as was the case in 1926. There are 1,245 delivery points and not 289, and the agreement applies to exports carried to Vancouver, Prince Rupert, Churchill, Armstrong and Thunder Bay instead of Thunder Bay alone. Clearly, and the member for Qu'Appelle-Moose Mountain was absolutely right, it was a very effective instrument of national policy, until the fifties when, unfortunately, inflation caught up with the freight rates. Thus, the artificially low rates for the transport of wheat, as provided under the 1897 Act which was renewed in 1926, have had major consequences for the west today. It is as clear as the nose on your face. First of all, grain processing did not develop in the production area, for very obvious reasons. Second, though grain was produced in the west, other industries in this area, such as animal production, which is carried out in an area dear to the heart of the member for Medicine Hat (Mr. Hargrave), were unable to reap the same benefit. Third, low freight rates for six types of unprocessed grain-note that these were designated-did not encourage grain growers to diversify.
Obviously, if only six types of grain are going to benefit from this rate, it does not pay for farmers to grow other kinds, so they do not. So what is the end result? Well, perhaps it takes an easterner or a French Canadian to notice the obvious, namely, that the Crow has distorted the economy of western Canada and nipped in the bud what would have been a sensible urge to diversify. The development of eastern Canada and Quebec is closely linked to its many ports, and the development of western Canada has depended on its railway network. The west, which has already become the growth centre of Canada today, will grow if it has an effective railway network, and it is clear that if there is no immediate increase in the number of railway lines in western Canada, that growth is in jeopardy. It will stagnate. Now we must clear up, once and for all, the problem of who is going to pay the piper. The railways
February 26, 1982

will have to pay a larger share, but the wheat producers will have to pay as well. That is the answer and it is very straightforward. Western economy is changing and nothing should prevent its development and its diversification. The west should develop its full potential in its own interest and in the interest of Canada as a whole. It is now forecast that the existing railway capacity will no longer meet the demand by the mid-eighties if new commitments to invest in development projects are not made this year. Politically, we have only two members from western Canada, and I would like to remind the members opposite of what might have been the most important part of the Speech from the Throne given on April 14, 1980, and I quote:
Like all of your colleagues in the House of Commons, you who represent the people of Saskatchewan, Alberta and British Columbia, have a responsibility to represent your constituents to the nation. You also have an extra responsibility in the present circumstances to represent the nation to your constitutents. It is a task no one else can fulfil. My government is prepared to co-operate fully in helping you to achieve this.
Mr. Speaker, something had to be done and we are doing it. If we do not act and nothing happens, history will not blame this government but rather the elected representatives of the western provinces for their lack of vision, because western economy is growing more rapidly than the railroad network, and if, for instance, 10 per cent of the bulk exports expected to be moved toward the west in 1985 are not transported, it will mean an export loss of nearly $1 billion. What is the position of the various parties, Mr. Speaker? In short the government is willing to allocate nearly $3.2 billion for grain shipment over the next four years. First, there is the amount of $1.85 billion which the government is committed to spend under the existing programs. Of course, everyone knows what this includes. It includes the branch subsidies, improvements to existing programs and car purchases. Second, there is an amount of $1.35 billion allocated in the budget of last November, which represents the full amount of the government commitment for the western rail network in the current fiscal year. That is our position.
What about the railways? They are of course the victims of these artificially low rates. I think that I agree with the hon. member for Qu'Appelle-Moose Mountain that there was a time when the railways were making money. That is certain. Flowever, it is not the case in 1981-82. We only have to recall that in 1958 the producers paid about 75 per cent of the total costs and that, in 1981, this share has fallen to 24 per cent, while the railways have lost $244.4 million in spite of a direct surplus of $170.2 million. We can reasonably forecast that they will lose $1 billion in the eighties in spite of the increased shipments of other grains. Other products such as coal, sulphur and potash have been threatening to decline since the seventies, and as we all know, these products are bottling up the western rail network. No one can deny the present needs. Those who have lived in the west and who know the Rocky Mountains are aware of the long lineups of railway cars and
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the tie-up this creates. If nothing is done the traffic will remain bottled up.
What is the position of the grain farmers? They are the producers and they will have to pay in the end. We are lucky to have them, Mr. Speaker, because these people have provided Canada with wheat and grain exports of $4.6 billion, which is the fourth largest contribution to our balance of payments in Canada. I have met with grain producers, Mr. Speaker, since coming to Ottawa, and even before when I was in the Minister of Transport's office. Since the hon. member for Qu'Appelle-Moose Mountain quoted from newspaper articles which obviously supported his arguments, I believe that it is important that I also be allowed to quote from a few articles, which are naturally more favourable to my position than to that taken by the hon. member for Qu'Appelle-Moose Mountain. First, I would like to mention two names, the Western Agricultural Conference and the Prairie Farm Commodity Coalition, two agencies which speak on behalf of most major western farm organizations. They themselves agree that the railways should receive adequate compensation to cover grain freight costs, and that any arrangement should be enshrined in appropriate legislation. They are prepared to negotiate issues such as who will have to bear the burden of inflation in the future, and how large their contribution will be. This month, presidents of prairie organizations have been supporting the decision by the Minister of Transport (Mr. Pepin). 1 shall quote some of them. Mr. Ivan McMillan, President of the Prairie Farm Commodity Coalition, said in an article in the Winnipeg Free Press of February 9, 1982, and I quote:
There is really no alternative, someone has to take action.
Mr. Howard Falkenberg, President of the Western Agricultural Conference, said in an article by Canadian Press of February 8, 1982, and I quote:
We must get something started as soom as possible.
In The Globe and Mail of February 9, 1982, I quote the following:
Much remains to be done to help western agriculture achieve its full development.
Other major western freight customers have welcomed the government's comprehensive approach. For instance, Mr. Garnet Page, President of the Coal Association of Canada, told Canadian Press on February 8, 1982 that he felt, and I quote:
-it is extremely important that the railways and the government should undertake large-scale, long-term projects and that they do so this spring.
This spring means in two months, Mr. Speaker. On February 8, 1982, a task force on railway transportation in Canada said in a press release, and I quote:
It is essential that new investments that are needed to expand the capacity of our railways be made this year.
At the annual meeting of the Palliser Wheat Growers Association held in Winnipeg on January 5, 1982, President George Fletcher told his 2,000 fellow members, and I quote:

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The Crowsnest Pass Agreement has seriously distorted the development of agriculture in the prairie provinces by keeping us tied to monoculture and discriminating against animal production and meat processing in the Prairies. Our fears were justified, and the situation has become far worse.
There are many others, including the Edmonton Journal, which on February 9, 1982, started its editorial with: Well done, Ottawa. On February 8, 1982, the Canadian Press reported that the Premier of British Columbia said, and I quote:
A logical development of government policy, the need for which has been felt for a long time.
And there are many more. My time is almost up, Mr. Speaker, and we should now listen to what the members opposite, the members of the official opposition are going to say, because the position of the New Democratic Party is quite clear. Its members are against any development and against all progress. As my colleague from Lac-Saint-Jean (Mr. Gimai'el) said, NDP means non-development party. So what is the position of the Progressive Conservative Party, Mr. Speaker? The member for Vegreville, the former Minister of Transport, rose in the House on June 30, 1981, and asked a question, as reported in Hansard on page 11080, to which he supplied the answer, when he asked the minister how he was going to, and I quote:
-move the anticipated 70 per cent increase in rail tonnage over the next five years-?
That is ample proof of how urgent the matter is, Mr. Speaker. The former minister of transport, in an article published in the Regina Leader-Post of January 20, 1982, said, and 1 quote:
"Reform to the Crow would reduce discriminating rates against the oilseed crushing industry in western Canada."

Here are more examples. Perhaps I ought to remind the hon. member for Vegreville of the statement made by one of his constituents, Mr. Norris Hartwell of the United Oilseed Products Ltd. of Lloydminster in Alberta, as reported in the Globe and Mail of February 9, 1982, and I quote:

If the Crow issue can be resolved, it will be for the good of western Canada.
[ Translation]
Here is how the position of the hon. member for Vegreville is described in a Canadian Press article dated February 9, 1982, and I quote:

The short lived Conservative government, of which he was transport minister, was working on a plan to change the Crow. If his plan was to pay the railways for their grain losses for 1980, that, plus federal purchases of hopper cars and branch
line rehabilitation, would have restored the health of the railway system. In future years there would be negotiation among the railways, farm groups and the government on how the three would share increases in the rates caused by inflation.
[Translation[
That looks very much like what we are doing, Mr. Speaker. I have others like that, I have more. Of course, the position of the hon. member for Medicine Hat (Mr. Hargrave) is clear: as a beef producer he feels he is being penalized by the current situation. That is clear. He said so in the House on July 6, 1981 and again on July 17, 1981, but I will not quote him because my time is running out. The hon. member for Lisgar (Mr. Murta) said this in the House about Mr. Clay Gilson, the man who is responsible for getting the groups together, and 1 quote:
It is now up to the farm groups to work out the process for changing the Crow with as little political interference as possible.

Mr. Speaker, here is a statement made in the House by the hon. member for Lisgar on December 11, 1981, and I quote:

Farm groups in Manitoba and Saskatchewan and virtually all farmers in western Canada are in favour of a change of some sort.
[Translation[
It is interesting to note, Mr. Speaker, that on the same day his colleague from Saskatoon West (Mr. Hnatyshyn) said, and I quote:

The people of Saskatchewan do not want anyone fooling around with the Crow rate.
[Translation[
Yet, the hon. member for Qu'Appelle-Moose Mountain is singing a different tune. The hon. member for Portage-Marquette (Mr. Mayer) will rise later, but we know already from press reports that he is in favour of the changes. So is the hon. member for Provencher (Mr. Epp). As to the hon. member for Edmonton West (Mr. Lambert)-I do not know yet.
What is clear, Mr. Speaker, is that the Conservatives are divided on this issue. Some are in favour of the changes, others are against. As to those members over there, we are not paying too much attention to them, for we already know they are against any changes. But Progressive Conservative members have something to say, and we want to hear them.


An hon. Member:: Oh, oh!
February 26, 1982


Pierre Deniger: I am glad the former minister of transport is listening to me, for I should like to quote from a very important statement which he made in the House on January 21, 1981, and 1 quote:

We have a transportation system which 1 know will work. It requires cooperation and leadership, but it will work. There are some things which will always be a problem. But someone has to take charge. 1 call upon the Minister of Transport to take charge.

That is exactly what the former minister of transport said to the Minister of Transport, and I must commend him for heeding this wise suggestion and acting on it, because had he failed to do so, we would have blamed him, and rightly so, for abandoning western Canada.


Mr. Doug Neil (Moose Jaw):: Mr. Speaker, I appreciate the opportunity to participate in this debate. It is a debate on a very historic subject which is vital to the future economy of western Canada.
I was interested in the comments of the hon. minister and the previous speaker, the hon. member for La Prairie (Mr. Deniger). They made some comments with respect to the hon. member for Vegreville (Mr. Mazankowski) who was the former minister of transport. I suggest that the record of the former minister stands by itself. Undoubtedly he was one of the best ministers of transport in Canada's history. He never acted at any time in an arbitrary or unilateral manner. He would not have cut services of VIA Rail by order in council rather than through hearings. He would never have attempted to dismantle the branch lines which have been guaranteed by his predecessors. He would never have arbitrarily cut back on Maritime freight rates.
I suggest to you, Mr. Speaker, that he would have held more than an inquiry which the Minister of Transport (Mr. Pepin) is talking about. The minister says that it is not an inquiry that he has directed Mr. Gilson to hold, but negotiations. When negotiations are held, the indication is that the instructions given to that commissioner, or whatever his title is, are predetermined. He is just working with figures.
The Crow rate goes back approximately 80 years. To read the history of the Crow rate is to read the history of the railways, the history of western Canada, the development of agriculture in western Canada and, indeed, to read the development of our nation.
I had the opportunity to conduct some research on the Crow rate. In my research 1 came upon an interesting document entitled "In Defence of the Crowsnest Pass Grain Rates". It was a submission made by Mr. Brownlee, president and general manager of the United Grain Growers Limited to the MacPherson royal commission in 1959. It is very interesting reading and I would like to quote from that submission.
On page 7 of the submission under the heading "National Purpose Served by Statutory Grain Rates", it reads as follows:
Transportation
The fact that certain grain freight rates in western Canada are statutory and are thus withdrawn from jurisdiction of the Board of Transport Commissioners identifies them as connected with national policy. They reflect an enduring national purpose rooted in Canadian history and dating back to confederation. That purpose was to develop agriculture in the area now comprised in the prairie provinces and formerly under administration of the Hudson's Bay Company.
Such agricultural development was to be based, and could only be based, upon growing grain for export. That enterprise required railway building in the first place, and in the second place permanent assurance of railway rates which would make grain production economically feasible.
It goes on to say:
Development, although slow to start, was to gather strength and move forward in a tremendous surge during the first 30 years of the present century-
It further states:
During that period central Canada reaped rich rewards with the growth of its industries based upon the domestic market opened up in the prairie provinces, and retained for it by protective tariffs. Throughout that period it was the wheat growing industry of western Canada which provided the chief stimulus for growth in the Canadian economy-
One final paragraph in this report I would like to read is as follows:
It is not to be assumed that Canadian Pacific entered into the contract reluctantly or only for the purpose of securing a subsidy. On the contrary, the new policy greatly benefited the railway. It assured settlement and made saleable the railway's vast holding of agricultural lands and gave these lands a selling value greater than they otherwise would have had-
Again, I would like to refer to a statement which was made by the Right Hon. John G. Diefenbaker. He made this statement in the House of Commons on May 13, 1959. The right hon. gentleman said at that time:
-the Crowsnest rates are part of a bargain which was made between the railways and the government on the one hand and the settlers who went west on the other hand.
The statements to which I have referred are as true today as they were in 1960, but of course the Crow rates have always been under attack by the railways, not only the CPR but the CNR as well.
My friends on the left talk about the nationalization of the Canadian Pacific Railway as if that were the answer to our problems, but the Canadian National Railways have been nationalized or made into a Crown corporation throughout its whole life-


An hon. Member:: No.


Douglas Charles Neil: -and it has not done any better and has no better record than the Canadian Pacific Railway. I say to my friends on the left that the nationalization of the Canadian Pacific Railway would not do a thing for the western farmer as far as the movement of grain is concerned.


Victor Fredrich (Vic) Althouse: How come they did not supply cars when we were short of cars but CN always did?


Douglas Charles Neil: In reality, of course, the railways have not been carrying grain at the Crow rate for many years because there have been branch line subsidies and rehabilitation programs, and they have been supplied with in excess of 10,000 hopper

February 26, 1982
Transportation
cars, some by the Government of Canada, some by the three prairie provinces and some by the producers through the Canadian Wheat Board. Over the years these benefits have amounted to many millions of dollars. However, when the former minister of transport in the Liberal government, the hon. Otto Lang, who was then the hon. member for Saskatoon-Humboldt, became minister of transport, he and his colleagues in the Liberal Party adopted a policy of what he called user pays. This policy not only has continued to be followed by the government and Mr. Lang's Liberal successor in office, but now it is also being forced on the grain producer of western Canada.


Jean-Luc Pepin: And everybody else too.


Douglas Charles Neil: It can be forced upon the producer because this government has a majority in Parliament. It has no members west of the Manitoba-Saskatchewan border, and that is evidenced today by the fact that the government has no speakers from western Canada.


Jean-Luc Pepin: Come on, now. Bockstael is coming.


Douglas Charles Neil: I am pleased to hear that a member from the city of Winnipeg will be talking about the Crow rate. However, it appears that it is the intention of this government to force a change regardless of the consequences. Farmers on the prairies have been struggling to survive. They have been faced with high interest rates. They have been faced with high input costs, particularly for fuel. In the last year the tax farmers have paid to the federal government on gasoline alone has increased to about 50 cents a gallon.


Jean-Luc Pepin: Don't change the subject.


Douglas Charles Neil: I do not intend to change the subject of the cost of the operations of farmers because the farmer today is producing at less than the cost of production, and his income is dropping year by year. Yesterday in the mail I received from Statistics Canada a document entitled "Farm Net Income". If one examines this document, one will note that in 1980-and I am referring specifically to Saskatchewan-the total net income was $820 million. One year later it was down to $602 million, a drop of over 25 per cent in net income in one year.
The Minister of Agriculture (Mr. Whelan) made a speech in Winnipeg at the annual meeting of Co-op Implements on Thursday, February 18, and this is what he said:
Between 1975 and 1981, the ratio of farmers net income to farm cash receipts dropped from 39 per cent to 21 per cent.
He went on to say:
This could get even worse in the coming year as net farm income is expected to drop another 15 per cent to 20 per cent in 1982.
Grain producers in western Canada cannot afford to pay any additional amount to move grain. According to newspaper reports of the speech of the Minister of Agriculture made in London, Ontario, a few days ago-and he confirmed his
comments in the Standing Committee on Agriculture yesterday-he said that the government is looking at the review and revival of the old Farmers' Creditors Arrangement Act. That is how bad the situation of farmers is. The government is looking at an old piece of legislation which was brought into being during the depression years to save farmers from bankruptcy. That is how bad the Minister of Agriculture feels the cash situation of farmers is. Yet here we have the Minister of Transport bringing in a user-pay policy to make the western grain producer pay more to move his grain.


Jean-Luc Pepin: Not true.


Douglas Charles Neil: Under present circumstances there is just no way the western grain producer can pay any more money to move grain.


Jean-Luc Pepin: We have $3.2 billion worth of user-pay policy.


Douglas Charles Neil: The Minister of Transport has said from time to time in news releases and in the House that there is consensus in western Canada.


Jean-Luc Pepin: Get on with the job.


Douglas Charles Neil: I have not found that consensus, and I have talked to many producers. Without exception they all say it is possible that the Crow should be changed or at least the railways should be paid for moving grain, but in no way, they say, can farmers pay any more.


Jean-Luc Pepin: So the government should pay it all?


Douglas Charles Neil: If the Government of Canada undertakes to pay the difference between the 1981-82 Crow rate and the compensatory rate to the railways, that should be sufficient for the time being. Let us see how the railway companies will operate. Will they give service? Will they move the grain? However, let us not, as the leaked cabinet document said, expect the producer to pay any future increase over the 1981-82 figure because that figure could amount to between $400 million and $500 million in five years.


Jean-Luc Pepin: What would you do then?


Douglas Charles Neil: There is no doubt that there are certain anomalies in the transportation system in the west with respect to the livestock industry, the oilseed industry and the secondary industries for value-added products, and these matters should and must be addressed.


Jean-Luc Pepin: Now.


Douglas Charles Neil: But they must not be dealt with at the expense of the grain producer.


Jean-Luc Pepin: Just prolong the agony.


Douglas Charles Neil: I suggest that the whole matter should have been referred either to the Standing Committee on Transport or to a special committee for consideration.


Jean-Luc Pepin: Delay, postpone.
February 26, 1982


Douglas Charles Neil: Then that committee would have reported to the government. However, what is going to happen is that Dr. Gilson will hold his hearings. I call them hearings; the minister calls them negotiations. Those hearings will be held in camera so that producers and Members of Parliament will not know what representations are made to Dr. Gilson. Surely the western grain producer is entitled to know what representations are being made on his behalf. Why are these negotiations being held in secret, Mr. Speaker? Why are they not being held in the open when they affect every grain producer in western Canada? No doubt the minister will claim that the farm organizations represent the farmers, and perhaps they do but if that is the case, why are the hearings not held in the open so that the farmers know what their farm organization representatives are saying and what the railways are saying about costs so that they and we as Members of Parliament, can judge the result.
No doubt when Dr. Gilson is through with these in camera meetings he will make a recommendation to the minister. Legislation will be drafted, and then the minister will tell the committee that it is the result of a consensus negotiated by the farmers of western Canada or their representatives and that we will have to pass it. We will not have, as is our right, the opportunity to discuss the matter. The fact that the negotiations are to be held in camera has cast a cloud of suspicion over the whole procedure.
In closing, Mr. Speaker, I should like to say that an election is to be held in Saskatchewan very soon.


Jean-Luc Pepin: That is not true. There will not be an election in Saskatchewan.


Douglas Charles Neil: It is unfortunate that Mr. Blakeney and members of his government are using this matter as an issue for an election. The premiers of every province in western Canada should set up a joint committee to study the anomalies in the movement of grain. The minister should set up a standing committee in Ottawa to do the same thing. Then the two committees could get together in an effort to arrive at a consensus.
Agriculture is the most important issue in Canada today. Mr. Speaker, It is an absolute shame that at the present time an attempt is being made to use it as an election issue. The future of western agriculture is at stake. The provinces should be concerned about agriculture and the federal government has to be concerned about it so there ought to be input from both sources and non-partisan discussions in an effort to arrive at a solution.
Unfortunately, that will not happen because the minister and the government have decided that they will unilaterally take steps to deal with the issue of the Crow rate. The minister says that the amount will be negotiated, but I regard his actions as unilateral action. It is actions such as this which create the alienation which exists in the country, Mr. Speaker. We know about separatism in Quebec but now there is a
Transportation
separatist MLA in Alberta. This type of unilateral action can do nothing except feed the fires of separatism.


Some hon. Members:: Hear, hear!


Mr. Robert Bockstael (Parliamentary Secretary to Minister of Transport):: Mr. Speaker, as I complete my term as parliamentary secretary to the Minister of Transport (Mr. Pepin) it is as a result of first-hand observation that I can assure hon. members opposite that the minister has worked steadfastly and unrelentingly to resolve these issues to the benefit of the west. The efforts of the minister go far above and beyond the call of duty. He has tried to do what is necessary to resolve the problems of the west. Perhaps the minister does not realize it but I think there is something of overcompensation in his efforts because we do not have many representatives from the west on this side of the House. He spends his energy unrelentingly. He has travelled and met the people of the west and is well aware of their problems.
I am pleased to speak against this opposition motion. It is misleading and smacks of political opportunism. Hon. members opposite are taking this position to be able to tell their electors that they opposed any change in the Crow rate. In fact, several members opposite have admitted to us privately, and some even have said in their own communities, that the time has come to do something about the Crow rate, that a change is long overdue. Some tell me privately that the Minister of Transport is taking the correct approach.
I think we should reverse the motion which says, "we condemn the government." I think we should condemn the opposition for the stand it takes in attempting to thwart the progress of our efforts to meet the needs of transportation in the country. The opposition is doing a disservice to the country by perpetuating old myths and even by inventing new ones.
Let us look at the chronology of the Crow rate, Mr. Speaker. In 1897 an agreement was made between the Government of Canada and the CPR. In 1901 the province of Manitoba obtained better rates from the Canadian Northern Railway than the Crowsnest Pass rate. In 1903 the CPR had to meet the competition and lower the Crow rate to meet that of the Canadian Northern Railway. There is an effort to persuade people in Saskatchewan that the Crow rate was a condition of their entry into confederation. That is not the case. In World War I the Crow rate was suspended but it was brought back in 1925. In that year an application was made to the CPR for a rate for the transportation of grain from the west to the Lakehead. In 1927 a rate was implemented for the transportation of grain to the west coast and was applied to all railways. It is not a part of the Constitution, Mr. Speaker. In 1931 the Crow rate was applied to grain being shipped to Churchill.
In the 50 intervening years there have been commissions, studies and reports that have confirmed the adverse impact of the status quo on our national economy.
Today another myth is fostered by the opposition motion which holds that the government wants to put an end to the Crow rate. On the contrary, Mr. Speaker, we are enshrining the Crow benefit by statute at the 1981-82 level. We are
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February 26, 1982
Transportation
setting a datum at which the Crow rate will be considered and guaranteed henceforth.
In a letter addressed to the Hon. Allan Blakeney on February 23, the minister wrote that the Crow benefit, the difference between what producers pay under the existing statutory rate and the real cost of moving grain, which is estimated at $600 million per year, will be continued and guaranteed by statute. It cannot be tampered with easily, Mr. Speaker, because it will be enshrined in law.
Farmers in the west are being told by some people that they will have to pay five times as much to move their grain as they are presently paying. This is absolutely false. Nothing like that is intended. The farmers will pay the basic rate and the government will take up the difference. We are talking about negotiating and meeting the people face to face concerning what portions shall be absorbed by the railways and by farmers or producers. Also they said that the railways will receive more money. On the contrary, the third condition implied by the proposal of the government is that railways will be called upon and required to act on several fronts. They will have to give a performance and service guarantee related to grain transportation. They will have to make commitments regarding additional investment programs which they will be undertaking, such as building a double track to the west coast. They will have to make adjustments to other rates in order to promote agricultural diversification and processing in western Canada. They will have to present data concerning their revenues, costs and investment plans. These are the guarantees which we will expect to receive from the railways before the legislation comes before us to be discussed in the House and in committee and ultimately passed.
The government has a record of always helping producers. If we look at the record since I have been in government, we have had the drought assistance program, crop insurance, hail insurance, embargo compensation, branch line rehabilitation, subsidies, hopper car programs and so on. I have here what the Government of Canada has spent since 1970 on hopper cars, boxcars, branch-line subsidies, branch-line rehabilitation, the port of Churchill, the Port of Prince Rupert, rapeseed assistance, export flour and grain subsidy, and stop-off charges. It was $1,798,800,000. We are intending on guaranteeing subsidies for as long as the statutes are not amended by some subsequent government in the far distant future.
The minister has the foresight to come to grips with the capacity problems of the west. I should like to give two analogies. I come from the province of Manitoba where at one time I was a city councillor. In 1982 we have an aquaduct in the city of Winnipeg from Shoal Lake which was built in the early 1900s. This aquaduct was to serve the city for only 30 years, and even today it is more than adequate to serve a population of over 600,000 people in metropolitan Winnipeg. Now people say, "What foresight our forefathers had in designing that aquaduct!" Today some would say that they were stupid to
make it that large. But in retrospect it is realized that they did a wonderful job.
In 1950 the city of Winnipeg was encountering floods. At that time everyone made fun of Senator Duff Roblin who was the premier of Manitoba. They said that he wanted to build Duffs ditch and that it was a waste of money. He built Duffs ditch at a cost of $80 million, and I cannot count the number of times since the construction of the floodway around the city of Winnipeg that the citizens have been spared many millions of dollars by not being flooded. This is thanks to Duffs ditch and Duffs foresight. Now they want to erect a plaque to honour him. We should realize today that the Minister of Transport has the foresight to know the transportation capacity which production in the west warrants. Perhaps we should take the opposition's point of view. Perhaps we should stick our heads in the sand like ostriches and say, "Maybe if we keep quiet, the problem will go away". Perhaps someone else will come along and pay for it. We are facing reality.
From 1940 to 1970 grain was sold at $28 to $67 per tonne. Producers were paying $4.78 to ship their grain at the Crow rate or approximately 7 per cent of their production. In 1980 when wheat was $219 per tonne, producers were still paying $4.78 or 2.2 per cent of their production to ship grain. It is perfectly in order that consultations are ongoing and that Dr. Gilson is heading these negotiations. The Minister of Transport should be commended for what he is doing.
I should like to refer to some quotations which appeared in the newspaper. Ted Turner, president of the Saskatchewan Wheat Pool, as reported in the February 18, 1982 edition of The Western Producer said:
-the Pool will enter into discussions with Gilson.
Wallace Fraser, president of the Manitoba Wheat Pool, as reported in the same issue, said:
We are pleased that a process has now been set down for reform, since the problem of rail capacity is becoming more real all the time.
Allan Macpherson, president of the Alberta Wheat Pool, as reported in the same newspaper, said:
-Alberta Wheat Pool will take part in the coming negotiations in a positive manner. We are happy the government has committed itself to making the annual gap payment.
In the same February 18 edition of The Western Producer, the Alberta economic development minister, Hugh Planche, and the Alberta agriculture minister, Dallas Schmidt said:
-the federal proposal addresses "one of the major concerns of the Alberta government and provincial farm organizations through the removal of economic distortions created by the present statutory rate".
Also the article indicated:
The Alberta ministers said the federal plan takes an important step to resolving the economic distortions caused by the different rates for processed and raw products.
It also begins the process of determining how to expand the rail capacity vital to future economic expansion in the west.
The Minister of Transport is seeking to give the Canadian railway system the capacity to provide for other agricultural products and to take care of the diversification and processing of products. We look forward to the transportation of coal,
February 26, 1982

potash, sulphur and many other products such as forestry products from British Columbia. The minister is working toward meeting a shortfall in our transportation system. Many organizations, such as the various provincial prairie wheat pools, the Western Agricultural Conference, and the Prairie Farm Commodity Coalition, have submitted briefs, made representations and passed resolutions at their annual conventions indicating that it is time the federal government did something. Because the federal government is now showing initiative which is long overdue, it is being criticized. This initiative should have been taken by Conservatives when they were in power, because they knew the needs of the west. They did not do it, and now because the government is doing it they object to the manner in which it is being done. They have said that we are not going about it the right way and that we should have consulted them First. We are going about it in the right way. Rather than criticizing the process, they should get behind it and say, "We will help you make it come to pass". For the benefit of the nation it is necessary to have a guarantee that the transportation will be adequate to carry our exports to the seaboard, so that they can be sent off to our customers. We should lend our support to the Minister of Transport and back him all the way. This is what I propose to do.


Stanley J. Hovdebo: First I should like to congratulate the Parliamentary Secretary to the Minister of State for Mines (Mrs. Killens) on her elevation to the chair. 1 should like to deal with the various positions of the Liberal and Conservative parties. For example, as late as February 12, 1982, the hon. member for Lisgar (Mr. Murta), was reported in the Winnipeg Free Press. It reads:
Murta, who favours changing the Crow rates, said he supports the government's position because the issue has been debated long enough.
The Calgary Herald reported the following on February 13, 1982:
The conventional wisdom is that Vegreville MP Don Mazankowski, transport minister at the time, would have proceeded along lines very similar to the course Pepin has struck.
On October 9, 1981, the minister responsible for the Canadian Wheat Board indicated the following:
-because I'm convinced the Crow rate will stay and producers will produce if market returns remain good.
Since then he has made other statements of that kind.
The hon. member for Medicine Hat (Mr. Hargrave) said "All I can say is that there has to be some other way devised to return the benefits of the Crow rate to grain farmers."
The Conservatives' attempt to confuse the issue probably comes from the fact that they are having a little trouble with the kind of support they should expect on a general basis.


Walter David Baker: Do you remember the Constitution?


Stanley J. Hovdebo: The hon. member for Saskatoon West (Mr. Hnatyshyn) introduced a motion under Standing Order 43 on
Transportation
February 10. He quoted the premier of Saskatchewan out of context.


Some hon. Members:: Oh, oh!


An hon. Member:: He wouldn't do that.


Stanley J. Hovdebo: 1 would like to quote from the same interview as follows:
It recommended that farmers retain the benefit of the Crow rate. That was the basic recommendation which the government of Saskatchewan fully concurred with-the difference between the compensatory rate and the Crow rate being made up by the government.
As late as November 24, 1981, Mr. Justice Emmett Hall made a statement supporting the Crow rate. I want to read into the record part of that statement:
If once tampering with the statutory rate is accepted or condoned or as an item on the bargaining table, all will be lost. For once the subject is on the bargaining table, it will be only a matter of time until it is lost step by step.
Transportation has always been and will always be an instrument of national policy in Canada. The government of Canada has been making deals in transportation since it First came to power.
In 1881, the federal government needed a national railway. A deal was struck. In 1897, the federal government needed a rail line into the Crowsnest Pass. Again a deal was struck. In 1925, Mackenzie King needed new legislation. The farm labour members from western Canada had seen the exploitation of the farmers by the railways. They insisted on a Fixed rate in statute for the producer. Mackenzie King needed the support of the western Progressives. A deal was struck. That deal was the statutory Crow rate.


Walter David Baker: That is right. That is history.


Stanley J. Hovdebo: That statute did two things. First, it gave the producers of grain a fixed freight rate with which the railways could not tamper. This was a guaranteed rate. Second, it gave the producers a delivery system. The guaranteed rate was an equal rate for equal distance, a so-called non-variable rate. Equal rate for equal distance guaranteed that we had a system in the west which would work. It was guaranteed that elevators could be built close to farms and the rates to port would be the same for the same distance wherever they were built. The country elevator system was built. The family farms and the rural communities grew up around the country elevators. The family farm and the rural communities gave us the world's most efficient producers of top-quality grain and built a certain quality of life.


Walter David Baker: You still see that in Saskatchewan.


Stanley J. Hovdebo: On Monday, February 8, 1982, the Minister of Transport (Mr. Pepin) announced a plan to change the structure under which grain will move. That so-called Pepin plan-


Mr. Rose:: That is not a plan.

February 26, 1982
Transportation


Stanley J. Hovdebo: -guarantees something quite different. It guarantees to the railways adequate compensation for the movement of grain. That guarantee to the railways is to be statutory.
Second, it guarantees that the producer will pay more.


An hon. Member:: It is a statutory rip-off.


Stanley J. Hovdebo: The interpretation of the accompanying papers to the announcement indicate that even with some government subsidy, the producer is likely to pay five or six times more than the Crow rate by 1985.
Third, the plan guarantees there will not be a fixed rate for producers. In other words, they cannot be sure what they are going to be charged. The minister has indicated that these three guarantees are non-negotiable. The minister confirmed that just about an hour ago in the House.
Possibly as important to the farmers as what is in this proposal is what is left out. Two fundamental principles of the Crow agreement were left out. First, there is no fixed rate for producers. Second, there is no equal rate for equal distance. There is no non-variable rate.


Jean-Luc Pepin: That is the subject of the Gilson discussion.


Stanley J. Hovdebo: The minister went on to appoint a negotiator. No doubt he is sincere.


Walter David Baker: But there are no public hearings.


Stanley J. Hovdebo: He has been given instructions to find a consensus in private, in camera. We know that the minister looks on consensus having to do with the Crow as acceptable only if it is in agreement with his position.
We can give significant demonstration of public opinion. For instance, I can suggest that possibly there is no consensus between the whole of the Liberal Party in Saskatchewan and the minister.


An hon. Member:: Right on. In the whole west there is no consensus.


Walter David Baker: And Ralph Goodale.


Stanley J. Hovdebo: Some other Liberal parties in other areas have not yet indicated, but I think they are probably likely to take the same position. We have been getting petitions from all parties in Canada, petitions to retain the Crow rate as it is from Quebec, Ontario, Nova Scotia, British Columbia, and all of the prairie provinces. We have thousands of signatures from farmers, asking that the government consider keeping the Crow rate.
Just a couple of weeks ago a television station in Saskatoon asked a question "Should the railways be paid more money to improve grain transportation?" In the course of one hour 173 answered yes and 629 answered no. That is the kind of interest there is in the Crow rate and the kind of support there is for the Crow rate.
The National Farmers Union took a survey in south central Saskatchewan which discovered that 80 per cent of the farmers they contacted were in favour of retention of the Crow rate.
Can West did a marketing survey for the pools. This survey divulged that 53 per cent were in favour of the status quo, and the question did not even mention the Crow rate. That particular group is also the group which the minister quotes quite often as having done a survey for the CNR. He quotes, but he never produces. I would challenge the minister right now to table that full study carried out by CanWest.
Many of the farm organizations said to be supportive of the Crow need to be canvassed more thoroughly. I am not so sure whether the membership follows the same position as the leadership. At a meeting sponsored by a local of the Manitoba pool on February 22, 300 farmers unanimously passed a resolution as follows:
Therefore be it resolved that the meeting declare that the statutory Crowsnest Pass rates are not bargainable.


Jean-Luc Pepin: I will give you some which says the opposite.


Stanley J. Hovdebo: That was in Swan River, part of the riding of the hon. member for Dauphin (Mr. Lewycky). I would like to go back to the appointee who is to conduct the hearings on behalf of the Minister of Transport (Mr. Pepin). This man was a member of the task force which produced "Canadian Agriculture in the Seventies", and I will read from that report:
The purpose of effective government action must be to assist the transition from what agriculture is today to what it should be in 1980, which is of course, only a mile post on the journey to 1990 and beyond.
... we must consider the model toward which we are aiming.
They then refer to some trends, which I will read:
-decreasing numbers of farms, farmers, farm labour force and farm population. -fewer family farms.
-increasing farm size.
Two out of three farmers must go; that is the basic thrust of that report. This from the man who was a member of the task force which recommended the disastrous LIFT plan. Hardly a friend of the farmer.
Apparently, Mr. Speaker, this government does not recognize the economic advantages bestowed by statute as being an obligation they must live up to. The Crow rate is recognized by all as being of some advantage to grain producers. In 1881 the Railway Act bestowed on the CPR the mineral rights to 25 million acres. That statute was of considerable economic advantage to the CPR. If it is considered fair to take away the economic advantage of the Crow rate from the producers of grain, is it not fair to open up the Railway Act of 1881 and take away the tremendous economic advantage given to the CPR by that statute? If it is fair for the farmer, it is fair for the corporation.


Jean-Luc Pepin: You should read the Alberta Wheat Pool publications on the subject. You should read more on the subject.
February 26, 1982


Stanley J. Hovdebo: Now, let us look at the claim of the railways for a reasonable return on investment. We recognize and agree that no business can operate without a reasonable return on investment. The Snavely report says the railways lose $335 million a year hauling grain, but if we are going to apply this costing yardstick to railways, it is only fair to apply that same yardstick to the producers. If we use the Snavely formula for farmers, it costs farmers $12.94 to grow a bushel of wheat. The current price is $5.94, which indicates that farmers must be losing $7 on every bushel that they grow. That is a $7 billion loss annually.
Now, the federal government proposes legislation which will guarantee the railways the Snavely shortfall in 1982, indexed for inflation. If you can give that kind of a COLA clause to the railways, why can you not give it to the farmers? Some say that farmers should pay more. Well, net farm income in real terms right now is half what it was in 1970. The average Canadian farmer today makes a 7 per cent return on investment before income taxes, based on deflated 1975 land and machinery values, which would not hold very well now. The government says farmers and taxpayers must pay the railways $752 million to transport grain in 1982. The Snavely formula includes a 25 per cent return on investment and an additional 22.5 per cent in add-on profits. There would be a lot of happy farmers if they could get that kind of return. Yet farmers are being asked to expand production based on a 7 per cent return on investment, which return will be much lower if the Crow is taken away. If it is a good formula for the railways, why is it not a good formula for the farmers? The door must swing both ways.
If farmers operated under straight business principles, Mr. Speaker, they would stop growing food and invest it in shopping centres and oil wells the way the CPR does. Were it not for a dedicated farm population taking low, sometimes no, return on investment, Canada and much of the world would starve. Before we irreversibly uproot our prairie society, let us examine the alleged benefits of killing the Crow. Some say that farmers will get better service. Well, there are ironclad guarantees in the Railway Act which have not made any difference, and we are not likely to get better service.


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


Stanley J. Hovdebo: I still have five minutes, Mr. Speaker.


The Acting Speaker (Mr. Blaker):: The hon. member has had 20 minutes to speak, which is a proper amount of time. I sense from his remarks that perhaps he was not aware his time had expired at 4.08 p.m. However, with the consent of the House the hon. member might take a moment to wrap up.


An hon. Member:: No.


The Acting Speaker (Mr. Blaker):: There is not unanimous consent.


Mr. S. J. Korchinski (Mackenzie):: Mr. Speaker, I have tried to be interested in the comments of the hon. member for Prince Albert (Mr. Hovdebo). Having heard another member from Prince Albert I guess I am not too enthusiastic over the
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remarks made by the present member. I have to admit they are probably sincere, but not necessarily as convincing as they have been in the past.
Now, Mr. Speaker, we are seized with a problem at the moment involving western farmers. And I must say as a practising farmer I know what added costs mean to a farmer. There is no way the farmer can have another cost added to the burden of maintaining his farm. No amount of statistics will rationalize the fact that we have lost many farmers. That is not the important point. The important point is that every farmer is hanging on by his fingernails. He is hurting.
In addition to the interest rate problem, the minister has added the problem of energy price increases. There is nothing we can do about that. It was caused by the stupidity of Liberal governments over the past ten years, going back to the time when John Turner was minister of finance. I was here at that time. He came on very strong. It was not important whether the country survived, only that the Liberal government should survive.
The whole press seemed to think that John Turner would be our salvation. I would like in my own simple way to make the press realize that it was the beginning of the end. That is my message to the Press Gallery. The Minister of Transport (Mr. Pepin) knows what I am talking about. It was important in 1972 that the Liberal government survive. It did what it thought necessary for its survival. Now we are seized with the problem where we have accumulated a $100 million debt over a ten-year period.
Now the minister wants to go to western Canada, because that is where the money is. That was not always the case. Western Canada has fed eastern Canada for many years and will continue to do so for years to come. We do not mind that, but the government must not zero in on the grain-producing economy just because that is where the dollar is.
The former minister of transport indicated very vividly that the moneys generated from the Crowsnest agreement were adequate to carry the railways. This administration has not taken account of that. In his comments, the Minister of Transport did not take that fact into account.
The CPR seems to be the main source of attack for the New Democratic Party. That is rather silly because attacking the CPR is really an attack against the development of the west. My grandparents settled in the west. This was possible because of CPR and CNR. I give credit to the governments of that time. I do not think that the railways should be attacked now simply because they are not making a buck. That is not right.
Look at past statistics. They show that when the most grain was moved, the railways made a profit. The minister has those statistics. I will not quote them because my time is limited.
I repeat, the NDP members are very vocal in their attack against the CPR. I have CPR and CNR lines in my constituency. Are the NDP members interested in destroying the

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system rather than developing it? I do not think it matters whether the CPR is financed privately or in any other way. What is important is that we get the grain moving. I suggest that the minister ignore those stupid comments from the NDP.
If I were to quote the Premier of Saskatchewan or the Minister of Agriculture (Mr. Whelan), I would find a very contradictory situation. Let me quote from a speech by the Minister of Agriculture at the Hotel Beausejour in Moncton, New Brunswick, on February 9, 1982. He said:
They show that in 1979, farmers' average income from farming was only $7,744.
Which member of the press or which member of the House could live on that? Who could say that is a fair and reasonable income to support one's family?
Regardless of what the rationale is of the Minister of Transport, I would like him to take that into consideration. Does he realize that the number of permit-book holders has dropped from 210,000 to 140,000? Why? You do not stay in business if you do not make a buck. That message should be passed on to the Minister of Finance (Mr. MacEachen). The government must understand that this country will not survive on charity, or this government's version of benevolence. There is only one way this country will survive. I say to the minister that I do not care who it is, including those on the government side, if there is a buck to be made we will reach for that answer.
I have never in my 24 years as a Member of Parliament apologized for the fact that there was a buck to be made in anything. I thought it was good for the government and I thought it was good for the people of Canada. I will never apologize for telling the government that it must proceed in the direction which shows Canadians that they have an opportunity, a chance and a way out of their dilemma. They will find their own way.
When I look at the statistics which the Minister of Agriculture gave in the committee, I find he told us that the simple reason he was zeroing in was that Saskatchewan had a 25 per cent increase in the value of its land. He thought they were rich. At the same time he made a speech like this to the Canadian Federation of Agriculture, which I have quoted from and will not quote again.
I ask the Minister of Transport to rationalize and consider his position. I will send statements to my constituents which indicate that the Premier of Saskatchewan is willing to negotiate. My colleague from Kindersley-Lloydminster (Mr. McKnight) asked an important question in the house because the Premier of Saskatchewan wanted to call a meeting of the federal government and other interested parties and he wanted to know what he was going to negotiate. It is important to know that despite all the depredation that he makes in western Canada now, he was willing to negotiate something. He was either prepared to hand over money or prepared to listen to the Minister of Transport. I would like to know from the minister
February 26, 1982
or one of his spokesmen what it was that the Premier of Saskatchewan wanted to negotiate. Tell us what he wanted to negotiate.


Jean-Luc Pepin: He did not want to negotiate anything at all.


Stanley James Korchinski: I want to know because I believe it is important since he may be planning to call an election. If the minister has any information which would lead us to believe that he was prepared to offer anything, I would like to know about it. I already know about the previous commitment that the farmers had made through the Wheat Board for the purchase of hopper cars and so on but I would like to know where my premier stands on this issue.
Unfortunately, I have used up my time and must end my remarks but I would like to have a response from the minister or one of his spokesmen. I repeat that I want to know the position of the Premier of Saskatchewan on this issue.


The Acting Speaker (Mr. Blaker):: I do not know whether the hon. Minister of Agriculture (Mr. Whelan) is standing in order to reply to the suggestion of the hon. member. It would have been the Chair's intention to recognize the hon. minister shortly. However, the proper procedure now is that I will recognize the hon. member for Portage-Marquette (Mr. Mayer).


Mr. Charles Mayer (Portage-Marquette):: Mr. Speaker, this truly is a historic and important debate for western Canada. Many of us who come from western Canada realize its importance when we return to our constituencies. Personally, I believe I understand the issue somewhat differently from other people because I grew up and lived most of my life in Saskatchewan and have lived in Manitoba for 15 years. I think I have an understanding about what many of the farmers are thinking in western Canada when they hear the prospect of the Crow rate being changed. Before I discuss that, I would like to discuss what has been said about Premier Blakeney.
In many ways, I am surprised by the reaction of the NDP because according to the statements of the Premier of Saskatchewan in January of this year I would have thought that the NDP would be supporting the proposals of the Minister of Transport (Mr. Pepin). I will tell you why, Mr. Speaker. On November 18, 1981, the Canadian Press reported the Premier of Saskatchewan as saying, "The federal government should clarify its position on the Crow rates for moving grain." He proceeded to make some more statements, and at the end he said, "We clearly can't be asked to commit ourselves until the federal cabinet commits itself."
What the premier is saying there is that the provinces cannot be expected to commit themselves until the federal government does. That is essentially what the minister did in Winnipeg on February 8, and I was present at the press conference which was held by the minister.
On January 10, 1982, while speaking on the CBC public affairs program "The Food Show" on a Sunday morning, the premier said:
February 26, 1982

-obviously they (federal government) wish to have the matter debated and for that I do not criticize them. I think that the issues involved should be better known. I think that there are, clearly, as I indicate, a number of issues involved. Perhaps a revision of the deal makes sense-
That is precisely what the Premier of Saskatchewan said on January 10, 1982, that "-perhaps a revision of the deal makes sense." Therefore, I do not understand why the NDP to my left takes such great exception to what the minister is doing.
There is more. An interview with Premier Blakeney was printed in the January issue of Business Life on pages 22 and 23. I will read part of that into the record to further question why the NDP federally is not going along with the Saskatchewan NDP. The hon. member for Prince Albert (Mr. Hovdebo) quoted Mr. Blakeney, and I will quote what premier Blakeney said in this interview. He said:
But the perception of our government really is that the farmers ought to keep the benefit of the Crow rate.
The NDP and the Farmer's Union make big mileage out of the difference between the benefit of the Crow rate and the Crow rate. Here, the Premier of Saskatchewan is saying that the farmers should keep the benefit of the Crow. The premier goes on to say:
If we want to address the issue of who is to pay the additional compensation to the railways, we are prepared to address that issue.
I think most members would agree that the compensation should come from the federal government. The premier goes on, and this is interesting because he says:
We make one other narrow point: in this discussion it is very important to distinguish between the current level of the Crow rate and the principle of having a statutory rate.
He does not say "the present statutory rate", he says "a statutory rate". To me, that clearly means a new statutory rate. This is precisely what the minister is doing.
Again, I find it difficult to understand why the NDP is not getting up and applauding the minister for his actions, because he is doing precisely what Premier Blakeney has suggested he do during the last three or four months.
There is more, Mr. Speaker. He said:
Some people take the position that there ought not to be a rate for the movement of grain set by the Government of Canada. With that position we are absolutely and unalterably in opposition.
I think we agree with that. It is interesting that the NDP attacks this party for not having a position, but clearly when the main spokesman for the NDP is Premier Blakeney in Saskatchewan-and 1 think that the federal NDP would agree with that-and he is on record as saying on three different occasions that he agrees with what the Minister of Finance is doing, it boggles my mind as to why the NDP complains about what the minister is doing. The minister is doing precisely what the Premier of Saskatchewan has asked him to do. Members of the New Democratic Party had better make up their minds as to which way they are going and what position they are going to take. If they do not, perhaps the Minister of Finance (Mr. MacEachen) and the Premier of Saskatchewan should get together on that issue.
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Mr. Kilgour:: The Minister of Transport.


Charles James Mayer: The Minister of Transport (Mr. Pepin), excuse me. The Minister of Finance is another story.
I would like to talk about process, because it is important to understand what transportation is to western Canadians. It is the reason that part of the country was settled. It is part of our heritage. We are proud of it, and it is very recent to us. As I said, I lived on a farm in the middle of Saskatchewan. I do not consider myself a has-been or very old yet, but I had an opportunity to plough land for the first time ever with the use of modern machinery. That is how recent our history in western Canada is, and transportation is very much tied up with that history.
It has been mentioned several times in this debate-by the hon. member for Vegreville (Mr. Mazankowski), a distinguished former minister of transport of this country, and by the hon. member for Qu'Appelle-Moose Mountain (Mr. Hamilton)-that transportation is more than simply moving goods around the country and doing it efficiently. It is part of our guts. It is almost a religion to us. If we want to be esoteric and academic about it, we could say it is metaphysical. The minister smiles, but I think he would agree with me because I heard him say in Winnipeg at his press conference that the way people in the west feel about transportation is similar to the way Quebecers feel about some of their cultural and language issues. If one can understand that, one can understand why we approach this revision of the Crow rate with such apprehension.
I would like to make a comparison. The hon. member for La Prairie (Mr. Deniger) spoke today. His total claim to the opportunity to speak about western transportation is the fact that his riding is called "La Prairie". That is his sole claim. My riding is called "Portage-Marquette", and my name is pronounced "Mayer" in French. I receive a certain amount of French mail in my office. I lament the fact that I cannot speak and write French as well as I should, having studied French at high school and university. Had I been a better student, I probably would understand French better. However, the minister is from Quebec, as is the hon. member for La Prairie who spoke today about issues affecting western Canada. His doing so is tantamount to the hon. member for Vegreville's going to the province of Quebec and talking about a new deal respecting language for Quebec. I could just imagine the hue and cry that would go out if that ever happened. Yet in many ways that is precisely what the Minister of Transport is doing so I urge him to understand the way we in western Canada feel as we approach this issue. I am sure he does in many ways, but he must understand the depth of feeling we have about this kind of issue.
It might be presumptuous on my part, but I submit that it is very difficult for one to understand that kind of feeling unless one grew up and lives in that part of the country. This is important. It is something which is inside us. It is the raison d'etre of the west. We are in western Canada because of

February 26, 1982
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transportation, and when we approach the revision of the Crow rate, we find it very difficult because it is so important to us historically.
Another issue I think the minister should consider carefully when he deals with this is the history of the Liberal Party in western Canada. In recent times it has not been a party in western Canada, and that is our problem. The Parliamentary Secretary to the Minister of Transport (Mr. Bockstael) spoke this afternoon. He is from St. Boniface. He is in no way a westerner, and that is not to take anything away from the parliamentary secretary. I have a high regard for him, but he is asked to speak and to take a position on something about which he knows nothing. He does not understand it. He does not feel it like westerners do. That is the kind of problem the minister faces in addressing this issue. The minister is dealing with issues which are much more important than simply the fiscal arrangements for some tracks and the moving of freight around the country.
There is one other point which needs to be made. I am not so sure it has been made yet in this debate on an opposition day. Incidentally, the Conservative Party chose to debate this issue. I will digress a minute here. It boggles my mind to know why the New Democratic Party, which wants to champion itself as the defender of the Crow rate, did not take the opportunity it had to put its own motion on this issue. I cannot understand why the New Democratic Party did not take its first opportunity. If I am not mistaken, the leader of the New Democratic Party moved a motion under Standing Order 26, the day after the announcement on Tuesday, February 9, to adjourn the House for an emergency debate on the Crow. Yet when the New Democratic Party was given the opportunity, it did not take it. This party took it. It is our responsibility to talk about the Crow rate because it is very important to us in western Canada, and it was this party which did so.


Victor Fredrich (Vic) Althouse: We had our opportunity last week, and you took it away.


Charles James Mayer: The New Democratic Party did not take that opportunity to show how sincere it is about the Crow by debating the issue. We look forward to seeing what members of the New Democratic Party do with the remaining opposition days in this supply period.


Victor Fredrich (Vic) Althouse: Do you think you will give us one some day?


Donald Frank Mazankowski: You had this one.


Charles James Mayer: The hon. member for Humboldt-Lake Centre (Mr. Althouse) wants to know if we will give him a day. Actually, it is not in the power of the official opposition to determine when the NDP has an opposition day. As I understand the situation among House leaders, the NDP clearly had the opportunity to have this opposition day as its own but turned it down. I do not understand what kind of reasoning the hon. member for Humboldt-Lake Centre is using when he asks if we are prepared to give him a day, we being the official opposition.
Let me deal with what westerners think of the railroad companies. In many ways the railroads are mistrusted. CP is the largest Canadian company. According to "The Financial Post 500" CP is the largest company in Canada. It is larger than General Motors, larger than George Weston, larger than the Ford Motor Company of Canada and larger than Imperial Oil. CP is the largest Canadian company and, in many ways, the most profitable company. If I read the table I have before me correctly, its net profits last year amounted to $583 million. That is a tremendous amount of money, yet CP wants more. It is not prepared to talk about going ahead with necessary expenditures on rail and on double tracking through the mountains because it wants an increase in freight rates from grain producers. Grain producers are facing tremendous increases in costs on the one hand and, on the other, they are being asked to pay more for moving their grain. They will be in such a position that when it comes to filling up their tractors with diesel fuel in the morning to go out to their fields, it will cost between $400 and $500. That is the cost producers see in the next two or three years. It is understandable that producers face this revision of the Crow rate with some apprehension.
The hon. member for Vegreville very ably pointed out this afternoon that producers do not want to get themselves into a position of looking at open-ended escalation of freight rates without knowing what they will get in return.
I have before me the Revised Statutes of Canada. If producers are going to pay more, they would like to know what they will get in return. I refer to page 6438 of the Revised Statutes of Canada. Section 262 of the Railway Act dealing with accommodation states:
The company shall-
(a)	furnish, at the place of starting, and at the junction of the railway-
The company is supposed to furnish equipment.
(b)	furnish adequate and suitable accommodation for the carrying, unloading and delivering of all such traffic;
(c)	without delay-
(d)	furnish and use all proper appliances-
(e)	furnish such other service incidental to transportation as is customary or usual in connection with the business of a railway company-
That guarantee is now in statute form. The government set up a situation whereby the railways must guarantee performance.
I see my time is running out. Let me make a final point about another reason why producers in western Canada are concerned about the Liberal government and its attitude about the Crow rate.
On January 18, 1967, Bill C-231, dealing with the National Transportation Act, was before the House. One of the clauses in that bill was the following:
No later than three years after the coming into force of this section, the Commission (CTC) shall inquire into the revenue and cost of railway companies subject to the jurisdiction of Parliament that are attributable to the carriage of grain and grain products at the level of rates established or maintained pursuant to Section 328-
In effect, that was an attempt in 1967 to remove the Crow rate. This matter was debated in the House, and it is recorded
February 26, 1982

in Hansard at page 11959 for January 18, 1967. That amendment was voted down in the Committee of the Whole which studied that legislation by a vote of 59 to 58.1 am told by hon. members who were here at that time that it was the Conservative Party which saw to it that the Crow rate remained in effect. Had we not done that, the Crow rate would have been long gone. Is it any wonder we feel some mistrust about some of the things which are going on in terms of the Crow rate?
I could go into the whole issue of the process and our feeling that Dr. Gilson should make his hearings as public as possible so that producers know exactly what is being said on their behalf behind the doors. I think that is very important. If Dr. Gilson cannot make his hearings public, he should be willing to hold press conferences with all parties involved after his sessions so that producers will know exactly what they are getting. This goes back to the old dictum of English jurisprudence that justice should not only be done but also be seen to be done. If we do not heed that dictum, no matter how glowingly the minister will describe the agreement that will be reached and subsequently come to the House in the form of legislation, if he does not make producers understand that they are being treated fairly, it will not work and we will be worse off than if we had left the whole thing alone.


Some hon. Members:: Hear, hear!


Hon. E. F. Whelan (Minister of Agriculture):: Mr. Speaker, I thank the opposition for giving the government this opportunity today to debate the merits of our February 8 announcement about expanding western railway capacity. My colleagues and I welcome the chance to correct any wrong impressions that some hon. members may have had about the government's intention in acting on the grain transportation issue at this time.
This is a subject of utmost importance for all Canadians, particularly the citizens of the four western provinces. It deserves to be given a full and informed discussion, both in the House and in the country. But there can be no informed discussion of this issue while some are basing their opinions on myths and misconceptions.
With your indulgence, Mr. Speaker, I think it would be useful if I took a few minutes to clear up some of these unfounded points of contention.
The first is the accusation that the federal government is unilaterally imposing a change in the Crow rate on western grain producers. This is certainly not the case. As the Minister of Transport (Mr. Pepin) made clear in his announcement of the government's decision, our action at the present time is a response to a series of requests from various groups in the west, including most farm organizations. It should not be forgotten that the Western Agriculture Conference and the Prairie Farm Commodity Coalition had petitioned us to do something to improve western railway capacity. In making this request, both groups had put forward their own suggestions about possible
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solutions to the problem. These positions included a recognition that the grain producer should pay more to ship grain in exchange for an improved level of service.
Moreover, the government has not chosen simply to impose a new rate structure in place of the existing statutory rates. It has put up a strong financial commitment to improving the railway system through branch line rehabilitation and the purchase of an additional 1,280 hopper cars. And it is offering to bridge the current Crow gap with public moneys and to confirm this ongoing benefit to western grain growers in legislation. As we pointed out in our announcement, grain will continue to have a special status where transportation is concerned.
The Government of Canada is willing to spend $3.2 billion over the next four years on western grain transportation. This is the public's contribution to solving the impasse over the Crow rate which has existed for a number of years. It amounts to about $23,000 for every grain grower in the west. Now we are turning to the private sector, to the railway companies and the western farmers and asking what their contribution will be.
The government is not imposing its will on the west, as some critics have said. It is acting responsibly and very much in the interests of western Canadians-especially farmers-and is looking for a shared solution that is worked out in consultation with the groups affected.
Another piece of misinformation that has been spread by the critics is the notion that the federal government has already made up its mind about all the issues like variable rates, how much the farmers should pay, how the Crow benefit will be paid out and so on. They say that the consultations led by Dr. Gilson will be just a sham.
That is not true. The government is bargaining in good faith. We have not made any final decisions about variable rates, the manner in which the government will pay the Crow benefit, nor any hard and fast formulas on how much producers should pay for transporting grain in future years. The government's position is outlined in the policy statement issued on February 8. That is the framework we have established for Dr. Gilson's discussions with the railways and farmers. Nothing more and nothing less.
I know that there have been some other pieces of paper floating around and a lot of talk about leaked cabinet documents. I see the hon. member opposite who was minister of transport in the last Conservative government is in the House.


Donald Frank Mazankowski: I know nothing about them.


Eugene Whelan: As he knows and as anyone who has been in cabinet knows, officials may submit several documents to a minister before one is accepted. Officials had presented the various documents to my cabinet colleagues and I, in consideration of this issue and some of the information, was questioned. Perhaps some of the documents that the official opposition found when it was in government are documents which we discarded. They could come into my office today and look at my desk. If there is anything secret there that they want, they can have it. There are probably some of those old

February 26, 1982
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documents still around. They cannot look at this material and say that it represents the government's position.
It is not true, for instance, that deals have already been struck with the three prairie wheat pools, yet that is one accusation that has been made. Of course, I have met the people concerned at different times but we have not struck any deals. I repeat, the government's position is as set out in the policy statement.
Another untruth that has been spread in the west is that grain growers will be asked to pay Five or ten times the current freight charges for grain. Mr. Speaker, there was a political leader who once said that if you were going to tell a lie, you should tell a big one and then people would believe you. He started a world war. In order to enrage people you just have to be as false as you possibly can be!
I have been a politician for 36 years, Mr. Speaker, I do not have much going for me except honesty. The opposition continually tries to attack that by attacking me for wearing a green hat or things that have nothing to do with making decisions. You would think it was a crime to wear a green hat. The opposition tries to downgrade the government in any way it can, but that is being dishonest too.
Producers currently pay 15 cents per bushel. The total cost of transporting a bushel of grain to export points has been estimated at around 75 cents a bushel. That means that farmers are now paying only about 20 per cent of the real transportation costs. Many farmers have said to me, "Look, Mr. Minister-look, Gene, or look, Whelan-we are ready to pay more. You just make those trains move. We will grow more, we will ship more grain and sell more grain." The hon. member for Vegreville (Mr. Mazankowski), who was the minister of transport in the Clark government, used to say, "Keep those trains moving". That is what it amounts to, Mr. Speaker.
If we were still growing grain in the way we grew it in 1879, Mr. Speaker, we would not be one of the world's leading exporters. No country in the world exports as high a percentage of the grain it produces. No country has to haul it as far to port. In some years we export over 70 per cent of the wheat we produce. The United States may export more in actual tonnes but it does not have to be hauled as far. In fact, I think they export about 50 per cent of the wheat produced.
We faced a lot of different challenges in this land that is 4,000 miles from sea to sea. Over our rough terrain and in our cold winters the trains lose one third of their pulling capacity through the mountains and across the prairies. This year we will move the largest amount of grain we have ever moved-26 million tonnes, or two million more than ever before. That will be with what some people say are inadequate facilities. I have received various letters and petitions from farmers. I have had occasion to meet with various people. With the exception of the National Farmers Union, they have all said, "Keep the Crow." They have refused to look at anything else. They have also said, "Whelan, why are you doing this?" I said, "I am keeping part of the Crow; I am keeping the part of the Crow which will fly." I am referring to the one which will make the grain move. The Minister of Transport said that he would keep
that part of the Crow as well. He will not charge them full transportation costs. We have made the commitment that our commercial grain producers will not be put at a disadvantage with any other commercial grain producer in any other part of the world. I know we will be able to do this with an improved transportation system.
We must remember that the governement is offering to pay the current Crow gap in future years. Therefore, it is ridiculous to say that farmers' share of increased costs will lead to immediate five or tenfold jumps in charges. I say to these people, whoever they may be, that they are wrong and dishonest; it is a terrible thing to be saying.
Some people are saying that the Crow rates should not be changed because they were part of the original confederation pact and represent a permanent commitment to the west. Crow rates have nothing to do with any bargain on confederation. They are not some kind of Magna Carta. I have heard people say that they are the Magna Carta of the west. Lord help us if any other Magna Carta was similar to the Crow rates. They are not some kind of Magna Carta of inalienable western rights. The original Crowsnest Pass agreement was signed in 1897 and applied only to eastbound grain and flour shipped from some 289 CP grain delivery points. These rates were not extended to other delivery points until 1925. Moreover, westbound export grain and flour were not put under the Crow rates until 1927, and shipments through the port of Churchill did not qualify until 1931. Let us be honest and say that this is not something which is holier than anything else. Some people say, "Holy Crow". No Crow was as holy as they make out this Crow to be. No Crow could be as holy as leaders of the National Farmers Union like to indicate. I agree with them on some matters, but I have always disagreed with them on this. Should we refuse to change? No, we would be the most backward country in the world if we accepted that attitude and refused to accept change for the better. I say that this is better for all industries, not just the agricultural one, but first and foremost I think about the agricultural industry and its great potential.
There is also a myth that Crow rates are tied in with the land grants given to Canadian Pacific at the time the first transcontinental railroad was built. Some people say that CP should be forced to use profits from other operations to keep the Crow rates at their current level, because it received millions of acres of land grants and $25 million when the railway was built through the west a century ago. There is nothing in the 1880 agreement to suggest that these grants or any returns from them should be used to offset the operating costs of the railway; not a thing. The MacPherson royal commission investigated this question in 1961. Who was in power then? It was not us. At that time it found that the sole reason for the original grants was to build the railway through to the west coast. CP received land grants of 33 million acres, and all but 1 per cent of this land was subsequently disposed of. About 6.8 million acres were returned to the federal
February 26, 1982

government in payment of the loan, and 24 million acres were sold to settlers at prices of about 50 cents to $1 per acre. I just wanted to put this information on the record.
It does not make sense to waste time now questioning the wisdom or fairness of dealings between the CPR and the Dominion Government more than 100 years ago. We clearly face a situation now where western rail capacity is not adequate to meet the needs of western farmers and other rail users. We must get on with doing something about it.
We have also heard the Premier of Saskatchewan and others, including the hon. member for Oshawa (Mr. Broad-bent) and a couple of other NDP members, charging that changes to the Crow will wipe out hundreds of small rural communities in the west. This relates to the question of variable rates, in other words, rates which would vary on volumes shipped, location, shipping season and other factors. The government has not advocated variable rates. What we have said in our policy statement is that we would consider suggestions from western agricultural associations concerning variable rates, provided that they are, and I quote from the policy statement:
-consistent, however, with the principle that such rates should not work to the detriment of the individual producer.
In other words, producers, not the railways, will decide if they want variable rates and, if so, what kind of rates. The government will seek to protect the interests of individual producers.
This question of decline in rural communities is of concern to me and other members of government. We are not insensitive to the situation. How could anyone be insensitive to such a situation? We are not about to contribute to decline in rural communities in Canada. There are many factors at work which are causing rural change, quite apart from the Crow rates. A change in Crow rates will not likely materially affect current trends. As the Hall commission pointed out, it is the people and the spirit of the people which give a community viability; not railways and elevators. The commission found no evidence that any community which was already declining would be saved by the retention of the railway. Nonetheless, the government has guaranteed by order in council until the year 2000-and I may still be Minister of Agriculture at that time-that about 16,000 miles or about 83 per cent of the original rail line system will be maintained. We have also announced our intention to legislate that Parliament, not the railways, will decide on the framework and conditions for future changes to the railway system.
Transportation
Another myth about changing the Crow is that the livestock industry in eastern Canada, particularly in Quebec, will be placed at a severe competitive disadvantage by any change in Crow rates. Premier Blakeney of Saskatchewan has been quoted as saying that the help western hog and cattle producers receive as a result of changing the Crow will be at the expense of eastern livestock farmers. He is trying to divide the country; he is hoping to do that. I am glad the Saskatchewan government recognizes that the Crow has distorted the use of agricultural resources in the west between grain and livestock production. This is one of the reasons the federal government is anxious to see the Crow changed, but increasing Crow rates will have little or no effect upon the livestock industry in eastern Canada. Some people may ask, "Why?" It is because Ontario produces 400,000 tonnes of surplus grain over and above its need at the present time. Quebec will be doing that within five years. The Livestock Feed Board has a surplus of $1.5 million this year because there was not much grain moved under the livestock feed grain program.
Let us take the price of feed grain, for example. This price is directly linked to the price of United States corn. Prices for Canadian grains are determined on world markets, and there is little chance to pass on higher freight rates to foreign buyers. Therefore, feed grain prices at Thunder Bay will not change as a result of revising the Crow. Similarly, an increase in western grain transportation tariffs for hogs and cattle will not affect the basic price relationships between Omaha, Calgary, Toronto and Montreal.
Changing the Crow will decrease the relative price of feed grains on the prairies, enhancing the profitability of livestock production in the west. The main idea behind all this is to improve the general economic structure of the west, to provide jobs and to process products there. I see that my time is up. I would love to debate at any time, in any place with anyone, why we are changing the Crow. It will be the best thing which has ever happened for the west and all of Canada, as far as 1 am concerned.
[Translation\


The Acting Speaker (Mr. Blaker):: Order, please. It being Five o'clock, it is my duty to inform the House that under the provisions of Standing Order 58(11), the debate on the motion has been concluded. Therefore, the House stands adjourned until Monday at two o'clock p.m., pursuant to Standing Order 2(1).
At 5 p.m. the House adjourned, without question put, pursuant to Standing Order.

Monday, March 1, 1982