1984-02-08

OFFICIAL REPORT


[Stage Direction]
33 Elizabeth II

[Stage Direction]
f' *
dbrary of parliament
[Stage Direction]
™ 28 1989
! SfSLfOTHfeQUE DU

[Stage Direction]
Published under authority of the Speaker of the House of Commons by the Queen's Printer for Canada
Available from Canadian Government Publishing Centre, Supply and Services Canada, Ottawa, Canada K1A 0S9.
[Stage Direction]
Wednesday, February 8, 1984


Mr. Gus Mitges (Grey-Simcoe):: Mr. Speaker, once again, I would like to speak out about tourism and the importance of doing everything possible to bolster up this sagging industry. Over the last several years Canada has become less popular as a travel destination for both Canadians and foreigners. In contrast, Mr. Speaker, the percentage of Canadians travelling outside Canada has been growing by 5 per cent yearly.
There are a number of problems affecting our declining tourist industry, the most serious being that of cost. Canada has become over-priced as a tourist destination largely because of excessive taxation by all levels of government on accommodation, gasoline, and spirits.
In addition, government decisions are often made without regard to their detrimental implications on the tourist industry. There is a lack of co-ordination between the various government Departments regarding regulations which end up being detrimental to the tourist industry. More co-operation is needed between all levels of government to co-ordinate and carry out positive plans for the betterment of tourism.
Therefore, I call on the federal Government to take the initiative and the necessary action to raise the tourist industry in Canada to its full potential, which would drastically help to produce much needed additional employment in this time of economic stagnation.



POLITICAL PARTIES


Mr. John Evans (Parliamentary Secretary to President of the Privy Council):: Mr. Speaker, as the Lord High Executioner sang in the Mikado, "As some day it may happen that a victim must be found, I have a little list; I have a little list." The Official Opposition has revealed that it, too, has a little list. Like the Queen of Hearts in "Alice in Wonderland", the
Hon. Member for Calgary Centre (Mr. Andre) and his cohorts scream, "Off with their heads", to more than 3,000 persons now serving the people of Canada in appointed positions within the government structure. Some of these people are even Tories, Mr. Speaker. They will all go, irrespective of the quality of their work or their dedication to the people of Canada.
One has to wonder what other "little lists" the Tories are compiling for the day they want victims to appease the blood lust of their membership. Are there lists of diplomats who must be eliminated? How about specific public servants? Instead of dynamic government from the Tories, the people of Canada may well be awaiting, as Gilbert and Sullivan put it, " .. . the sensation of a short, sharp shock, from a cheap and chippy chopper on a big black block."



AUTOMOTIVE INDUSTRY


Mr. Joe Reid (St. Catharines):: Mr. Speaker, the motor vehicle manufactured in Canada has a favourable major impact on the Canadian economy. Steel, rubber and plastic manufacturers, and a host of related workers, all rely heavily on the continued existence of a Canadian automobile industry. Even after a series of disastrous years for North American car sales, and when imports account for one-third of the Canadian market, the Government's sales tax system continues to discriminate in favour of offshore vehicles. This federal sales tax makes it up to $400 cheaper for a Canadian to buy a Japanese-made car, for instance, rather than one produced at home, supplying jobs to Canadians.
It is a simple matter-if the Government only had the will-to change. The Minister of Finance (Mr. Lalonde) can accept this as a challenge to make this change in his forthcoming budget speech. As it is, the tax on domestic automobiles is levied on the retail value, while the tax on imports is on the smaller duty-paid value. Why discriminate against the North American built car? The Minister of Finance's own federal sales tax review committee reported as long ago as May, 1983, that this was an inequity. The task force set up by the former Minister of Industry, Trade and Commerce refers to it as a blatant inequity.
In view of the size and importance of the Canadian automobile industry, and the lip service given to it by so many Cabinet Ministers, it is difficult to understand the Government's apparent reluctance to correct that which is recognized by all as an obvious inequity.

February 8, 1984
[ Translation]



INDUSTRY


Mr. Marcel Roy (Laval):: Mr. Speaker, I have good news and bad news regarding the development of high-tech industries in the Montreal region. A study prepared by Fantus, a company in Chicago, for the Department of Regional Economic Expansion, to assess the suitability of the Montreal region as a location for high-tech industries, confirmed and showed that Canadian Government subsidies provide a significant advantage over other North American centres such as Boston, Chicago, San Francisco, Los Angeles and New York. The federal Government has invested about $2 billion during the last six months in the high-tech industry for the Montreal area. However-and this is the bad news-the study pointed out in a note from the Vice-President that the advantages of lower installation and operating costs tended to be offset by Quebec legislation that provides for higher taxes for executives, and also by the political uncertainty, certain government regulations such as Bill 17 and compulsory licences.
Mr. Speaker, we hope that these constraints which have had a definite influence on the decision of businesses to invest will be given serious attention. Mr. Levesque's announcement that the election will be run on Quebec's independence is certainly not going to promote investment, either in the Montreal area or anywhere in the province.
Mr. Speaker, this is a serious matter, because thousands of jobs are involved.



FISHERIES


Mr. Jim Manly (Cowichan-Malahat-The Islands):: Mr. Speaker, in British Columbia, where our forest economy is in crisis, the response of the Social Credit Government has been to lay off 500 forestry workers. This is like laying off the fire brigade in the middle of a fire. The Tories now want to get into the act. In Friday's debate on the crisis in the fishing industry in British Columbia, the Tory Member for Capilano (Mr. Huntington) suggested that the Fisheries Department had too many employees. He said: "Perhaps it is time to thin the operation out."
The Hon. Member for Capilano is not the fisheries critic for the Tories, but he is their Treasury Board critic. Last September he suggested that the entire Public Service should be cut back by 20 per cent.
The British Columbia economy is in a tail-spin and public sector lay offs have made matters worse. Some 15.2 per cent of our work force, over 200,000 people, are now officially unemployed. By laying off forestry workers we destroy not only present jobs but future jobs. Now the Hon. Member for Capilano says that is what we need in fisheries. Already such areas as enforcement of habitat regulations are short of personnel. Unless we begin to protect habitat, we will not have any fisheries left.
The Liberal approach to the fisheries crisis is to eliminate fishermen, and the Tories want to eliminate public sector jobs. The people of Canada should know that both Liberals-


Mr. Speaker:: I regret to interrupt the Hon. Member but his time has expired.



FINANCE


Mr. Bill Domm (Peterborough):: Mr. Speaker, Liberal MPs received $500,000 each to create jobs in their ridings while Opposition MPs did not. This is a sleazy, porkbarrelling act, so crass in nature as to offend the most hardened citizen. In Peterborough, during 1983, the same period, I collected a list of $460,000 worth of work for two projects submitted by Trent University, six projects from Sir Sandford Fleming College, nine from the volunteer sector, including Planned Parenthood Resource Centre, Women Against Assault, a program for psychiatric patients at the Civic Hospital, the YMCA usage study, job creation for senior citizens, conservation programs, YWCA programs and skills, Native Alliance needs and assessment, to name but a few. This $460,000 in Peterborough would have created 84 permanent jobs, and 1,514 work weeks for some of the projects, and all this for federal funding of only $460,000. Why do Liberal Members of Parliament get $500,000 and Members in Conservative ridings receive zilch?



POLITICAL PARTIES


Mr. Gaston Gourde (Levis):: Thank you Mr. Speaker. The Leader of the Opposition forgot to answer four questions that were put to him last Monday during the period set aside for Members' statements.
I would therefore ask him again to clarify several facts of national interest. Was the Leader of the Opposition aware of the alleged payment of $25,000 or $250,000 by Mr. Wolf, a non-resident, to an anti-Clark coalition, when the Leader of the Opposition and his friend, Michel Cogger, gave their support to the ex-Leader, the Member for Yellowhead, at the end of 1982? Could he inform the House even if he was not aware of the fact, which I doubt, whether he supports such action by a non-resident?
February 8, 1984

The Leader of the Opposition ought to know that Section 76 of the Canada Elections Act prohibits anyone residing abroad from soliciting or in any way seeking to urge voters to vote for a candidate or to refrain from doing so-it is against the law.
It hardly matters that no election had been called at the time these events took place, since the Progressive Conservative Party and its Leader have created a dangerous precedent that could lead to a general deterioration of our electoral practices. The Leader of the Opposition has a duty to state publicly whether he supports such indefensible behaviour. In addition to ignoring the principles generally adhered to when there is a leadership campaign within a party, he has failed to explain his attitude at the end of 1982 and whether Joe Clark received the Judas kiss at that time, just before the organized rebellion that materialized in Winnipeg in 1983.



NORTHERN AFFAIRS


Mr. Dave Nickerson (Western Arctic):: Mr. Speaker, the foolishness of the Minister of Indian Affairs and Northern Development (Mr. Munro) and his strategy of conducting land claim negotiations under a veil of secrecy, without conferring with interested third parties, has been amply demonstrated by the recently initialed COPE agreement. Apparently no serious attempt was made to reconcile the overlap problem with neighbouring claimants, and the inclusion of a 10 per cent bid differential on both public and private tenders to be based upon the ethnic origin of the bidder has incensed the business community and has wide ranging implications right across Canada.
Despite the Minister's reluctance to listen to reasonable arguments in the past, he ought now to heed the advice of the northern business community and of the Dene-Metis land claimants so that the Inuvialuit settlement might be finalized in an equitable and fair manner without further undue delay.



NATIONAL REVENUE


Mr. Neil Young (Beaches):: Mr. Speaker, Revenue Canada is trying to collect $70,000 in sales tax and penalties in connection with Metro Toronto's purchase of specially equipped busses for the handicapped. The Government agency has decided that amputees and patients in wheelchairs cannot be defined as handicapped for the purposes of the Excise Tax Act if they are travelling to hospitals for treatment of unrelated illnesses. That ruling is totally contradictory to the position that the Government took as a result of the International Year of Disabled Persons. It is also contradictory to the recommen-
Oral Questions
dations that were made in the "Obstacles Report", which was the report of the Special Committee on the Disabled.
Inherent in this ruling, Mr. Speaker, is the erroneous assumption that disabled people are sick. Disabled people are anything but sick, and it is totally unfair for the Government to perpetuate that stereotyping, particularly through such a basic measure as taxation. The members of my Party insist that the Government reverse this ruling by Revenue Canada which is indirectly penalizing disabled people who do not need that further obstacle in their lives.



ORAL QUESTION PERIOD


Hon. Perrin Beatty (Wellington-Dufferin-Simcoe):: Mr. Speaker, my question is for the Minister of National Revenue. Yesterday he assured the House that quotas on auditors were contrary to the policies of his Department. He also assured the House that at no time during his tenure had there been quotas on auditors in the Customs and Excise department. How does the Minister reconcile that statement which he made yesterday with a memorandum from the district manager of the Kitchen-er-Waterloo office of Customs and Excise dated May 2, 1983, entitled, "Profitability of Cell Audits and Tax Change Per Audit Day", which sets specific quotas for auditors, indicates that these quotas were being set as a result of pressure from headquarters, and says that the key concern will be profitability? It makes no mention of the question of equity and fairness in dealing with the people who are being audited.


Hon. Pierre Bussieres (Minister of National Revenue):: Mr. Speaker, I repeat what I said in the House yesterday, and I would invite the Hon. Member to enquire about procedures existing within the Excise Division for planning audit operations.
I may also point out to the Hon. Member that this practice has been in existence for about ten years, and that it is not a new method, although it may be new to him. I thought his short stay at Treasury Board would at least have taught him the basic principles of government management and its application to specific departments. I can also inform him that with this method we are able to set up procedures by which the person-years at our disposal are used in the best interests of holders of excise licenses and of the Government itself.
Mr. Speaker, there are two factors we must bear in mind: the tax changes made at the end of an audit and the "profitability" concept, to quote the expression used in the memoran-

February 8, 1984
Oral Questions
dum. The concept of changes in taxation or tax value is applied both in cases where the changes are in the taxpayer's favour, in other words, when the taxpayer has overestimated the amount payable, and in cases where the amount is later reassessed in the Government's favour. When the "profitability" concept is applied, both aspects are taken into account. After the audit, amounts going back to the taxpayer, because of overpayment, are considered as well as assessments that add funds to the Treasury. I think it is important to realize-


Mr. Speaker:: I would ask the Hon. Minister to be brief, if possible.


PER DIEM MONETARY STIPULATION
Henry Perrin Beatty: Mr. Speaker, the House will note that in that windy answer the Minister did not deal with the question. The question was how he squares the fact that quotas have been imposed, at the insistence of headquarters, on auditors in Customs and Excise, with the statement he made yesterday that they were contrary to government policy and second, that they had not existed in Customs and Excise. The Minister denies that quotas exist.
What is the difference between a quota and a requirement that auditors in the PM-2 category have a change of $330 per day? What is the difference between the two if that is not simply spelling out precisely what the quota is?
[ Translation]


Pierre Bussières: Mr. Speaker, first of all, I would like to point out to the Hon. Member that on the occasion of a review of Excise management practices, the Auditor General approved a practice that has been in existence for ten years and is still being used to set up audit mechanisms within the Department as the most productive approach in order to deal fairly with both licence holders and the Government, since the study is to cover cases where reimbursements are due to taxpayers as well as those where, if I may use that expression, the Government has the advantage.
The Hon. Member ought to realize that to establish and manage this practice and measure the effectiveness of audit procedures, we are acting on the basis of statistics on previous audits, and we are using those statistics to develop an audit method that is the most suitable and the most advantageous, both for the licence holder and the Government.
I may add, Mr. Speaker, that last year, for example, out of a total audit rate of $3, $2 was in the Government's favour and $ 1 was to the advantage of the licensee.


DEPARTMENT'S POLICY
Henry Perrin Beatty: Mr. Speaker, what we have just heard is a defence of the quota system, not a denial that quotas exist.
I want to draw the Minister's attention to this statement in the document: "I draw to your attention that where an audit is not profitable or where it is determined that additional time would not be-


Mr. Speaker:: Order, please. The practice of additional supplementaries has been well established in the House, but the question of reading documentation on a second supplementary question is a practice that gives the Chair concern. Would the Hon. Member put his question?


Henry Perrin Beatty: Yes, Mr. Speaker. I want to ask the Minister- I hope I will get a straight answer from him for a change-if there has been a change in the Department's policy where profitability of audits, how much money can be brought in, is now the guiding criterion, rather than justice to make sure that everyone pays his fair share, no more and no less.


Pierre Bussières: Mr. Speaker, the Hon. Member was in the Government for a short time. However, instead of adding to his knowledge, it seems the experience has increased his ignorance.
I would refer him to the Auditor General's Report tabled in the House for the fiscal year ending March 31, 1979, on page 456, and as a Member of Parliament, he should already have read it. On that page, the Auditor General of Canada explains the concept of "profitability" as it applies to Excise audits. The Hon. Member will see that the Auditor General explains the concept in the same way this was done in the memorandum the Hon. Member failed to read properly. He will also see that the Auditor General of Canada confirms this is an effective concept for proper audits of taxpayers' accounts.
I may remind the Hon. Member that while for the year 1982-1983, $95 million went to the Government, after audit, $41 million was returned to taxpayers because they had declared excise taxes in excess.


Mr. Speaker:: I might remind Hon. Members about the length of both questions and answers. Apparently minor debates are what are evolving instead of a Question Period. The Chair is in the hands of the House. Sometimes the nature of the question invites a longer response, and the Chair is trying to sharpen this procedure to make it more parliamentary if possible. The Hon. Member for Waterloo.
February 8, 1984


TAX ON BUSES FOR HANDICAPPED
Mr. Walter McLean (Waterloo):: Mr. Speaker, my question is also for the Minister of National Revenue. He is aware, of course, of the report in The Globe and Mail this morning which has been alluded to already in a statement by the Hon. Member for Beaches. That story is about the harassment by the Minister's officials, in this case the harassment of Metro Toronto over its specially equipped buses for the handicapped, and an effort to collect some $70,000 in taxes. This is symptomatic of the situation I raised last week, what I am raising again, and what my colleagues have been raising, in regard to the actions of his Department. Mr. Ken Christie spells out the problem. The Minister will agree with me that the officials are obviously out of order. They have erred. Has the Minister already asked that this action been undone? Has he taken action to correct it?


Pierre Bussières: The
ruling to which the Hon. Member is referring is related to the municipality of Metropolitan Toronto. The buses in question are used for the transportation of handicapped and sick people, and the taxable status is based on a previous decision of the Tariff Board. We have stopped any collection of the money and we have invited the company to appear before the Tariff Board again to obtain a decision on whether or not the our present ruling is in conformity with the previous decision by the Board or whether it should be changed.


Mr. Nielsen:: You will be taxing seeing eye dogs next.


TREATMENT OF THE HANDICAPPED
Walter Franklin McLean: Mr. Speaker, no matter how the Minister may respond, it is harassment. The action of Revenue Canada is described as having changed in the last two years. The Minister indicated that there was to be some sympathy, some humanity, in the application of the Tax Act. Where is the humanity on the part of his officials in terms of the handicapped? Will he go after the blind next? Where is the compassion? The Act was intended to protect the very people it is now penalizing. Can the Minister tell me why his officials are so mean spirited in interpreting the Act?


Pierre Bussières: Mr. Speaker, I have made it quite clear that the decision of the Department was based on an earlier ruling of an agency called the Tariff Board, which the Hon. Member has undoubtedly heard of.
Given the nature of the transaction, we have decided not to levy the money collected from the Municipality of Metropolitan Toronto and to wait for a Tariff Board ruling after it has reviewed this case.
I would hope that the Hon. Member did not imply in his question that the Department should disregard the law and quasi-judicial agencies such as the Tariff Board. I think that
Oral Questions
the Department's position is quite clear. The situation stems from an earlier ruling of a quasi-judicial agency, the Tariff Board, which has ruled that it is taxable. However, we do acknowledge that there might be a grey zone and we say "We will not collect the money-Use the bus, keep the money". Should the Tariff Board-a quasi-judicial agency-confirm its ruling, we will take action, and should the Tariff Board rule in your favour, very well, no payment will be sought, and indeed no money has been collected so far. Therefore, no harm has been done to the organization involved or to the others.


REQUEST THAT MINISTER INSTRUCT TARIFF BOARD TO REVERSE DECISION
Neil Young: Mr. Speaker, my supplementary question is directed to the same Minister. The Minister has indicated that he would ask the Tariff Board whether it would reconsider that decision. Would he go even further and instruct the Tariff Board, because there is a difference between the ruling made in Calgary and the one made in Toronto, to reverse the decision that was made, so there is no such discrimination against disabled individuals?


Pierre Bussières: Mr. Speaker, I am convinced that the Hon. Member would be First to blame a Minister who would give such instructions to a quasi-judicial agency such as the Tariff Board.


Neil Young: As the Minister knows, the Government makes policy, not public servants.


REQUEST THAT MINISTER CHANGE POLICY
Neil Young: Mr. Speaker, will the Minister change the policy, if that indeed is the policy, so that there is no more discrimination against disabled individuals? That is the simple question. The Minister is responsible for policy; change the policy.


Pierre Bussières: Mr. Speaker, I would urge the Hon. Member to consider the question more closely. To begin with, he should realize that laws are not arbitrarily administered. First, in this instance, the administration of the acts is based on tariff items which have been approved by Parliament. Second, when there is a case for interpreting the decisions taken by agencies concerning those tariff items-and again 1 am referring to the Tariff Board-I am sure the Hon. Member would not want the Minister to change the legislation or the rulings of the courts without first introducing in the House the appropriate motion which would have to be subsequently approved by Parliament before he could take any action whatsoever. I think that our

February 8, 1984
Oral Questions
position ... If only his colleague would leave him alone, perhaps he would understand the situation! The Hon. Member should understand that the Tariff Board has already ruled and that we are not collecting any money because we know there is a possibility of disagreement, that in fact there is disagreement between both parties concerning the interpretation of the Tariff Board ruling. We have asked the transport company involved to appeal its case before the Tariff Board and we will not collect any money until the ruling is out.


FINANCE
Hon. David Crombie (Rosedale):: Mr. Speaker, in the absence of the Minister of Finance I will direct my question to the Prime Minister. As he may know, on November 25 at a meeting of the Standing Committee on Labour, Manpower and Immigration, a commitment was made by officials of the Department of Employment and Immigration to make public a list regarding job-creation projects in the Special Employment Initiatives Program. Indeed, it was indicated at the committee that that information would be coming forward in a matter of days. That was in November. The fact of the matter is that the information did not come forward on those specific projects. That is why my colleague, the Hon. Member for St. John's East, in January asked again in the House in written form for a list and information on the projects. The information is still not available.
Why are the Prime Minister and his Government refusing to provide the specific information on those projects so that the list can be made available and the Government can live up to a commitment which it made 2.5 months ago?


Right Hon. P. E. Trudeau (Prime Minister):: Mr. Speaker, the Hon. Member talks about a commitment made in November. I must confess that I was not a member of that committee. I do not know who made the commitment. If it was an official, as I understand from the questioner, then indeed the work should be well advanced on it.
I referred yesterday to a request on the Order Paper made less than three weeks ago, if my memory is correct, on which work is being done. The Minister, who is attending the OECD meetings in Paris this week, will be in the House on Monday, and I am sure he will be able to give a precise date on which the list of all job-creation projects, which have gone forward under the various programs put forward by the Minister in his Budget, can be produced.


David Edward Crombie: I hope the Prime Minister will bring it to the Minister's attention. I have been through this route once before in the previous 1982-83 allocation when I asked the Minister and the Government for a specific answer on projects
in that program. It is now 15 months later, and I have not received the answer yet. That is why we have concern.


REQUEST THAT INFORMATION BE MADE PUBLIC
David Edward Crombie: Mr. Speaker, will the Prime Minister remind the Minister that we are talking about funds for unemployed people and that it is very important the information be made public. The public and those people have a right to know. Will he give the House an undertaking that the information which is now available to the officials in that Department will be given the political okay so that it could be made public? Will he give that undertaking?


Pierre Elliott Trudeau: Mr. Speaker, I understand that the issue is not whether the moneys are being spent for unemployed people. They are. It was, in the Minister's own words, in his Budget. He was fast-tracking these funds.


Some Hon. Members:: Oh, oh!


Pierre Elliott Trudeau: Indeed, I understand that one of the complaints of the Opposition members has been that most of these funds have been spent before they had a chance to grab them. If that is the complaint-


Mr. Epp:: Greasing the Liberal track.


Pierre Elliott Trudeau: Well, it is the complaint I have heard from across the aisle in recent days. Much of the money has been spent. Hon. Members want to know where it has been spent. I am telling them that the list is being compiled. The Minister will be in the House on Monday. He will be able to give a date when it can be produced. However, the issue is not whether the funds are going to the unemployed. They are. The Minister was giving examples of projects in the riding of the Hon. Member for Kingston and the Islands. I could give other examples.


Mr. Munro (Hamilton East):: Yukon.


Pierre Elliott Trudeau: The moneys are going to create jobs for the unemployed.


Arthur Jacob (Jake) Epp: Somebody has the list. Try John next door.


Pierre Elliott Trudeau: Therefore, the issue is in what particular ridings, and is it with the right kind of justification. The Hon. Member can make his judgment when he has the list of total government spending of these funds.


Mr. Clark (Yellowhead):: When will that be?
February 8, 1984


ESTABLISHMENT OF PAPER MILL IN MALAYSIA-GOVERNMENT FINANCING
Hon. Ray Hnatyshyn (Saskatoon West):: Mr. Speaker, my question is directed to the Minister of International Trade. Charges laid in 1980 against Stadler Hurter Ltd. officials are still pending, including charges against Peter Oberleitner. Stadler Hurter Ltd. is a company which was folded into Klockner-Stadler Hurter Ltd. which was a recipient of financing by the Government -and the Minister's press release indicated this-to the extent of $144 million U.S. with respect to a pulp and paper complex in Malaysia.
In view of the fact that Mr. Oberleitner is the senior vice-president in charge of international finance and continues on with the successor corporation, has the Minister satisfied himself with respect to the reliability of the corporation in terms of this very substantial funding by the federal Government?


Hon. Gerald Regan (Minister for International Trade):: Mr. Speaker, I am really not sure what the Hon. Member is getting at. There was a corporation which had some difficulties. It is not a question of folding in, but rather of a new incorporation, and a very new presence by the Klockner people in the corporation that is presently seeking the sale of Canadian goods and services in various parts of the world.
This company, in competition with those of all other competing nations, was successful in achieving a contract for the construction, in South Sabah, Malaysia, of a fine paper mill which will result in the creation of jobs in Canada and the sale of $144 million worth of Canadian goods. It is a pretty darned good deal as far as I am concerned.
The money is not advanced to that company. The money is advanced as a loan to Malaysia which it pays back over the regular course of the loan, providing in the meantime jobs in Canada and the sale of goods over there. I do not know if the Hon. Member would suggest that it would have been better to have allowed Japan to win that contract, or France, or one of our other competitors, with the jobs going to those countries, or whether he feels that as part of an enlightened trade policy we should be prepared to sell machinery as well as raw materials when there are opportunities which otherwise would be lost to other countries.


NEGOTIATION OF FINANCING
Ramon John Hnatyshyn: Mr. Speaker, the people at the Bowater mill in Newfoundland, and the 12,000 Canadians not now working in the forest industry in British Columbia, will be interested in the Minister's answer.
I will address my supplementary question to the Prime Minister. Did Senator Jack Austin, who was a director of Klockner-Stadler Hurter until he was appointed to the Cabinet, participate in the negotiation or approval of the financing to this corporation, Klockner-Stadler Hurter Ltd?
Oral Questions


Gerald Augustine Regan: Mr. Speaker, I first want to say that the negotiations were conducted through my Department and EDC, and that Senator Austin was not involved, to the best of my knowledge, in any manner, way or form, and I cannot see how he could have been without me knowing.
Second, the Hon. Member touched on an important point when he referred to the workers in Corner Brook in particular, and he mentioned others. There is a very important difference between enlightened trade policy and the position he seems to be taking. I am sure the Leader of the Opposition does not condone that position. The mill in South Sabah is making a product totally different from that of Corner Brook and in no way affects the future of that mill. May I say to the Hon. Member in that regard that if we do not sell the machinery and do not sell the ability to make that plant to Malaysia, then 15 other competitors would have done so. Are we going to deny Canadians the job of making and exporting machinery because of misguided thinking such as the Hon. Member has just shown?


FISHERIES
Mr. Ted Miller (Nanaimo-Alberni):: Mr. Speaker, in the absence of the Minister of Fisheries and Oceans, who, I appreciate, is meeting with fishermen at this time, I will direct my question to the Secretary of State for External Affairs. The survivors' coalition of the fishermen from British Columbia pointed out in their brief two concerns that they have which involve us internationally.
Is the Minister aware of the high seas Japanese interception of Canadian salmon, in particular the 107,000 chinook salmon and the 1.2 million coho salmon that have been taken by the Japanese fishery on the high seas in large gillnet factory ships? What can he do immediately to stop that interception of Canadian fish so that we can preserve not only the salmon resources but also some jobs for Canadian fishermen who are in dire straits at the moment?


Mr. Brian Tobin (Parliamentary Secretary to Minister of Fisheries and Oceans):: Mr. Speaker, I say to the Hon. Member that he is correct, that the Minister is meeting with the entire delegation of fishermen from British Columbia at this very moment. The question he asks has been raised and acknowledged by the Minister. It is one we are going to look into. As he knows, we do not have jurisdiction as we might have within the 200-mile limit, on the high seas, but this will be raised and explored.
It needs to be said, and I know the Hon. Member appreciates that there is a whole variety of very complex issues and different user groups accessing salmon on the West Coast. It is in that spirit of trying to have co-operative discussion versus confrontation that a meeting is taking place at this moment between the Minister and those fishermen. I hope that the

February 8, 1984
Oral Questions
desire to consult and to find solutions being demonstrated in that room can be repeated in this Elouse, rather than the example we had last Friday of the Opposition carping, with no real serious solutions or suggestions being offered.


CANADA-UNITED STATES NEGOTIATIONS
[Stage Direction]
Mir. Ted Miller (Nanaimo-Alberni): Mr. Speaker, it is interesting to note that 117 fishemen had to come to Ottawa to meet with the Minister of Fisheries and Oceans.
I will direct my supplementary question to the Secretary of State for External Affairs. We have been attempting to get an agreement with the United States on salmon interception on the West Coast since 1971, to no avail. The negotiations are often stalled by very powerful political figures from Alaska, Oregon, and Washington. We have had no leadership from the federal Government in trying to negotiate an agreement acceptable to the people of British Columbia, particularly to the fishermen. Will the Minister insert himself into those negotiations to see that we get an acceptable agreement with the United States to protect our resources and the jobs of Canadian fishermen?
Brian Vincent Tobin: Mr. Speaker, I say to the Hon. Member that I find it more interesting that 117 fishermen had to come to Ottawa before the Opposition even realized there was a problem on the West Coast.
With respect to the problem of negotiations on the West Coast with the United States on a salmon treaty, it needs to be said and repeated in this House that Canada and the United States reached a treaty arrangement in 1983. It was signed. It was believed that, with good faith and good will, that treaty would be ratified. We have not been able to ratify that agreement.
Canada's position was quite simple. It was either to say to the fishermen of British Columbia, as I hear being suggested, that we backtrack on a treaty that we have already signed with the Americans, or we say the cost to Canada of backing up, of giving away more fish, of allowing an Alaskan lobby to dictate to the United States administration, is not acceptable, and walk away from the table until realistic discussions can occur and the rights of our fishermen can be protected. That is the issue.

[Translation)


INDUSTRY
Marcel-Claude Roy: Mr. Speaker, my question is for the Minister of State for Science and Technology.
A report drawn up by the FANTUS company of Chicago showed and confirmed that the Montreal area would have a marked advantage as a development site for high technology
companies as compared with cities like Boston, New York, Los Angeles, and others. However, such benefits related to development and operation costs were lessened by some of the policies of the Quebec Government, such as its craving for independence and Bill 17, which both curtail whatever advantages there may be for these industries.
I therefore ask the Minister of State for Science and Technology whether he has contacted his Quebec counterpart to inform him of the contents of this report and of the dangers that separatism creates for the future of high technology in the Montreal area, which would jeopardize thousands of jobs in Quebec.


Hon. Donald J. Johnston (Minister of State for Economic and Regional Development and Minister of State for Science and Technology):: Mr. Speaker, it seems to me that this report merely confirmed what was already a well known fact, namely that the Montreal area, in fact the whole Province of Quebec, is a most important and attractive location for industries. However, there is a need for political stability. I have not yet talked with my counterpart, but I plan to send him a copy of this report, because as I have already said, it does confirm without any doubt the statements we have made in the past following public studies carried out here and in Quebec.


NORTHERN AFFAIRS
Mr. John McDermid (Brampton-Georgetown):: Mr. Speaker, my question is directed to the Minister of Indian Affairs and Northern Development. There have been a couple of agreements on land claims one, with the Council of Yukon Indians, and the agreement commonly referred to as COPE. Some excellent negotiations have gone on and the negotiators are to be congratulated. However, there are two major problems. One is the overlap problem which the Minister discussed last week in the House, and the one that is causing a great deal of concern to a number of groups, including the Council of Yukon Indians, the Old Crow band, the Dene, the Metis, and the Canadian Federation of Independent Business. That is the clause where a 10 per cent preferential treatment is given to one group within the signatories to the COPE Agreement. The Minister is aware of this. What does he plan to do regarding this clause?


John Carr Munro: Mr. Speaker, from a pragmatic point of view the clause may have little application because the CYI have indicated in their agreement that they are not prepared to give preference to the COPE constituents within the area of their agreement. The reciprocity is dead, because COPE then will not give it to the CYI. Therefore, the Yukon people do not
February 8, 1984

have to worry about a proliferation of beneficiaries under the COPE Agreement coming into the Yukon.
As far as the 10 per cent itself is concerned, the first meeting was useful because the business community found out that the interpretation, as verified by Mr. Reisman and the COPE negotiator, was that it only applied to federal contracts, not the wider application that they first reacted toward rather violently.
As I undertook to the Yukon Government and others, I met this morning with Mr. Reisman and Mr. de Leury to see what could be done about examining further alleged detrimental defects as a result of the 10 per cent. We are working on that to see what can be done. I hope to meet with the coalition of businessmen who are concerned about this matter in the North some time within the next seven or eight days. It is too early to predict a solution, except to tell the Elon. Member that we are certainly working on it.


REQUEST THAT FINALIZING OF AGREEMENT BE POSTPONED
John Horton McDermid: Mr. Speaker, will the Minister give a commitment today that that agreement will not go ahead until the particular matter regarding the 10 per cent preferential treatment, no matter where it goes to, is cleared up? It is not just businessmen in the North who are concerned, but native peoples, the Dene, the Metis, the Canadian Federation of Business, and the Canadian Construction Association are all very concerned about it.
The Minister's own policy which says, "in all fairness" all of a sudden does not become quite as fair in this particular instance. I think the Minister will agree that it would be damaging to the Inuit themselves if a preferential treatment were given and caused polarization in the North. That is the last thing we need in these agreements.


John Carr Munro: Mr. Speaker, the last comment of the Hon. Member rather surprises me. After all the lectures I have received from the Opposition about adopting a rather patronizing, condescending attitude toward native groups, for the Hon. Member to stand up and say that the COPE negotiators did not know what was good for them when they negotiated this clause, is pretty offensive, I find, and I am sure they will too.
Let me tell the Hon. Member that there are other precedents for this type of preference that have been adopted by northern Governments themselves. It is not a new thing; there have been affirmative action programs and preferences under federal Government procurement policies. There are also possibilities for northern native businessmen through joint ventures to get the benefit of this 10 per cent.
1 do not want to argue the merits or demerits of the 10 per cent of the floor of the House of Commons, because obviously the Hon. Member has made up his mind. Frankly, I am not
Oral Questions
making up my mind and I am not taking this particular issue to the Government until I have had the other meeting with the businessmen. Until we have had those final meetings which I undertook to have, I do not think it would be proper to come down definitely on one side or the other. I do not think that the Hon. Member should either. We should give both sides a chance to explain their points of view.


NATIONAL REVENUE
Mr. Chris Speyer (Cambridge):: Mr. Speaker, my question is addressed to the Minister of National Revenue. As the Minister will remember, in his cable on December 22 last year, with respect to the district offices terminating quotas, one item was as follows: "If any of the supervisors have used quotas which include income or recovery targets for the individual auditor, you are to advise the inquirer that the practice was contrary to departmental policy and has ceased and the director will issue a letter to all employees cancelling those targets".
May I have the unqualified assurance of the Minister that none of the yearly records of all the employees have in any way been altered since the appointment of Mr. Farlinger of Woods Gordon? May I also have the assurance that all memoranda indicating the existence of quotas as a matter of practice, are still in place?


Pierre Bussières: Mr. Speaker, to offer this assurance, I would first have to check with all district offices and get in touch with all division directors in those offices. However, I would like to point out to the Hon. Member that Mr. Farlinger is already preparing his study and has been in touch with many senior officials in the Department. He is anxious to fulfil his mandate, and I am sure he will be able to count on the co-operation of all district office managers and all heads of the various sections in each district office, and that he will have access to all the documents he will need to evaluate existing or previous management practices, depending on what he decides to examine in our district offices and at headquarters in Ottawa.


EMPLOYEES' PERFORMANCE SHEETS
Chris Speyer: Mr. Speaker, will the Minister undertake to the House to make enquiries about whether any of the performance sheets of employees of Revenue Canada have in any way been altered, or in any way changed, since the appointment of Mr. Farlinger, or even before the appointment, so that they do not disclose the existence of quotas, which in fact did exist? Would he please undertake to the House to make those inquiries?

February 8, 1984
Oral Questions


Pierre Bussières: Mr. Speaker, as I just pointed out, Mr. Farlinger will be able to draw on the most relevant and most recent documents that describe certain management practices within the Department. I can inform the Hon. Member that I shall make enquiries to find out whether measures inconsistent with the facts were taken and whether such documents might have been withdrawn. However, considering the ease with which the Hon. Member has been able to obtain such documents, 1 am sure there are thousands more waiting for Mr. Farlinger, who will be able to examine them as he sees fit.


FINANCE
Mr. Lome Nystrom (Yorkton-Melville):: Mr. Speaker, my question is directed to the Right Hon. Prime Minister in the absence of the Minister of Finance and of the Minister of Employment and Immigration. Yesterday I raised the question of the Immediate Employment Stimulation Program in Saskatchewan, the fact that Senator Hazen Argue is sitting on a $4 million fund, and that he and his office are the sole access to that fund. Public servants are not involved in screening the cases or applications or in analysing the applications. Federal MPs in this Party and in the Conservative Party were not notified about the fund. The fund is for capital works.
In light of all that information, can the Prime Minister tell the House what right the Government has to give the Senator $4 million to spend in an unconditional way in the Province of Saskatchewan without the help of the Public Service, or without notifying Members of Parliament? If he disagrees with that, would he be prepared to table documents in the House proving that departmental officials were involved in all Saskatchewan decisions prior to a decision being made by Senator Hazen Argue?


Pierre Elliott Trudeau: Mr. Speaker, I have many reservations about the premises of the question. I will take careful notice of them, investigate them, and have the Minister advised of the concern of the Hon. Member.


Lorne Edmund Nystrom: Can the Hon. Minister confirm whether it was his officials who recommended a few weeks ago to the Minister of Employment and Immigration a $300,000 grant for converting a municipal garage into a judo club in Quebec City? The club is known as the Club de Judo de Giffard and is in the constituency of Montmorency-Orleans.


Mr. Speaker:: Questions should better be placed on the Order Paper which relate to an individual situation.


Some Hon. Members:: No, no.


Mr. Speaker:: The Hon. Member for Yorkton-Melville. [Translation]


Lorne Edmund Nystrom: I shall ask my question straightforwardly. Did the officials make a recommendation or was the recommendation made unilaterally by the Hon. Member for Montmorency-Orleans?


Mr. Speaker:: Questions relating to individual projects are the kinds of items that should be on the Order Paper when they relate to individual situations. The Hon. Member for Restigouche.


AIR SAFETY
Mr. Maurice Harquail (Restigouche):: Mr. Speaker, I should like to address a question to the Minister of Transport. In the last session I raised with the Minister of Transport and his predecessor the serious question of smoking on aircraft. You will recall the disaster that occurred with 23 lives lost in Cincinnati, and recently, if it is possible to accomplish, an employee-


Some Hon. Members:: Order, order!


An Hon. Member:: Order Paper.


Mr. Speaker:: Order, please. The Chair was temporarily distracted and did not hear the Hon. Member. Would the Hon. Member repeat what he said?


Maurice James Harquail: Mr. Speaker, my question is a very serious question that is being interfered with by Members of the New Democratic Party who do not care about the safety of people flying on aircraft in Canada. They will pay for this attitude, Mr. Speaker.


Some Hon. Members:: Oh, oh!


Mr. Speaker:: It is quite impossible for the Chair to hear the Hon. Member's question at this moment.


Maurice James Harquail: Mr. Speaker, I have not had the opportunity to be heard because of the howling of the New Democratic Party. I have a serious-


Mr. Speaker:: Order, please. Will the Hon. Member please ask his question? The Chair will pay careful attention.


Maurice James Harquail: Thank you, Mr. Speaker. My question has to do with whether or not the Minister is disposed to look at the matter of employees of airlines, at least, not smoking in the cabins of aircraft, if not at the broader question of the health
February 8, 1984

and safety of the Canadian public travelling on the airlines. We should be protecting their safety, not putting them at risk because of a minority of people who wish to smoke during the duration of flights.


Hon. Lloyd Axworthy (Minister of Transport):: Mr. Speaker, I am pleased that the Hon. Member finally had a chance to raise a very serious and important question relating-


Mr. Nowlan:: He raised it with you yesterday.


Lloyd Axworthy: -to the safety of the air travelling public. I am pleased to report to the Hon. Member that, due to his very effective representations-


Some Hon. Members:: Oh, oh!


Lloyd Axworthy: -we are now investigating that very important subject.


Mr. Hees:: At least Lloyd has a sense of humour. At least he has that. That is all he has.


NATIONAL REVENUE
Erik Nielsen: Mr. Speaker, I have one brief supplementary for the Minister of National Revenue with respect to the matter raised by the Hon. Member for Cambridge. We know that the Minister has it within his power to issue instructions very quickly to change quotas to targets, and targets to objectives. Will the Minister issue instructions immediately to all district taxation offices for which he is responsible, instructing his officers in no uncertain terms that all documents which are related to the matters raised by the Hon. Member for Wellington-Dufferin-Simcoe and the Hon. Member for Cambridge will not be tampered with, are not to be tampered with, are not to be hidden, so that his Wood Gundy commission will be able to examine the original material and not something which may now sit in its place?


Pierre Bussières: Mr. Speaker, if the House Leader of the Official Opposition had listened to my previous answer, he would have understood that 1 want Mr. Farlinger to have in his possession all the existing documents which describe our managerial practices in all sections and district offices of the Department.


Erik Nielsen: Will you issue the instructions? Will you issue the instructions?
Business of the House


Pierre Bussières: If the Hon. Member fails to understand what this means, he probably needs a bit more reassurance than common sense requires!


BUSINESS OF THE HOUSE
Erik Nielsen: Mr. Speaker, I have the usual Thursday point of order, since the Minister of National Revenue will not issue those instructions-


Mr. Pinard:: Wednesday.


Erik Nielsen: The usual Wednesday question of privilege, sorry.


Some Hon. Members:: Oh, oh!


Erik Nielsen: In view of the nature of tomorrow's debate- and we have had discussions on it-so that all Hon. Members might be as well informed as those on this side of the House, would the Government House Leader outline the order of business for tomorrow, the nature of the debate, and the manner in which it is to be conducted?


Yvon Pinard: Mr. Speaker, there is nothing very special about the rules to be followed tomorrow except, as I indicated last week, the Prime Minister will be the first speaker tomorrow morning, speaking on the main motion.
Since I mentioned that last week, I believe that the Hon. Member is justified in asking if we have come to some kind of an understanding as to the order of debate for the last day of debate on the Speech from the Throne. We have an understanding that following the speech of the Prime Minister- which under the rules is of unlimited duration-the Leader of the Official Opposition, by consent, will be allowed to speak again on his own motion for an unlimited time, of course, under the rules. We welcome this opportunity for the Hon. Member's Leader to express some views and ideas.
The speech of the Leader of the Official Opposition will be followed, by consent, by the speech of the Leader of the New Democratic Party, who also by consent in this case I should say, will have unlimited time.
Following those three speeches, Mr. Speaker-and I understand we will be sitting the normal hours-the other speeches will be limited according to the existing rules. I understand that at the end of the day the question on the main motion will be put.
Essentially, that is the understanding we had at the meeting of House Leaders yesterday. Therefore, it is agreed that the first person to be recognized tomorrow at eleven o'clock, after prayers, will be the Prime Minister of Canada.


Mr. Deans:: Mr. Speaker, with regard to the House order, I just want to make it clear that we are, of course, prepared to

February 8, 1984
The Late Hon. James Sinclair
give the necessary consent to allow the Leader of the Official Opposition to speak tomorrow. The understanding, as set out by the President of the Privy Council with regard to the unlimited time available to the Leader of the New Democratic Party, is gratefully accepted. We look forward to hearing what the Prime Minister has to say.


THE LATE HON. JAMES SINCLAIR TRIBUTES TO FORMER MINISTER OF THE CROWN
Hon. Stanley Knowles (Winnipeg North Centre):: Mr. Speaker, I appreciate your giving me the opportunity to express my own personal feelings of regret and sorrow over the loss to this country of a gentleman who was a tremendous and very effective Member of the House of Commons. I am referring to the Hon. James Sinclair who died yesterday in Vancouver.
May I say about him that our terms paralleled here for a long time. He was first elected in 1940. I was elected in 1942. Both of us lasted until 1958. It was on that occasion that the then Prime Minister, the Right Hon. Mr. Diefenbaker, was calling for an arrangement to avoid Parliament having an election. It happened that there were two Hon. Members who protested and the same words were said by James Sinclair and myself.
What I would most like to say about him is that those of us who knew him in those years, knew that he was a very able Member of Parliament, an able speaker, and was one who could get into debates and arguments and be fair back and forth, both ways. He became in due course a Cabinet Minister under the Right Hon. Mackenzie King and later under the Right Hon. St. Laurent, and his term, as I say, ended in 1958.
James Sinclair was a very effective person about the House of Commons. He also solved a number of problems regarding the rights of Members of Parliament. Hon. Members might be surprised to learn that he made the first arrangements for a certain amount of flying to be included in the travel arrangements of Members of Parliament. He did other things. The few of us who remember those 18 years when that gentleman was here, remember him as a person who was a very able and an effective and honest Member of Parliament.
We are sorry for this loss to the Prime Minister, who is his son-in-law, and also for the loss to his three grandsons. We express our sorrow to them. I believe all of us in Parliament appreciate what this gentleman did in this House of Commons and we join with the country today in paying tribute to James Sinclair and in expressing our sorrow at his loss to us.


Some Hon. Members:: Hear, hear!


Erik Nielsen: Mr. Speaker, on behalf of Her Majesty's Loyal Opposition, I would like to associate this Opposition Party entirely with the remarks made by the hon. gentleman who has been with us very many years himself. It is not difficult for us to associate ourselves entirely with those
remarks. When I first entered this Chamber in early 1958, having been elected in late 1957, I was very familiar with the good work of the late James Sinclair. But I had the advantage, as did the Deputy Prime Minister (Mr. MacEachen) for a while in his life, of watching the action from the galleries until I took my seat. I came to admire the late Mr. Sinclair very much from the very brief period of observation I had of him. Like the Hon. Member for Winnipeg North Centre (Mr. Knowles), who has raised this matter, we, too, extend our sympathies to those he leaves behind and we mourn him.


Hon. Allan J. MacEachen (Deputy Prime Minister and Secretary of State for External Affairs):: Mr. Speaker, I think it was a good thought for the Hon. Member for Winnipeg North Centre (Mr. Knowles) to draw to our attention the passing of the Hon. Jimmy Sinclair, who served in the House for quite a long time and who, subsequent to his departure from the House in 1958, spent a very successful career in private business. I had the opportunity when I first entered the House to observe Mr. Sinclair as a Minister. He was, as the Hon. Member for Winnipeg North Centre has stated, a brilliant and dynamic personality who participated in debate with a liveliness that is not frequently seen, today certainly, in the House of Commons. Of course, his great talent as a debater and as an analyst seemed to become even more outstanding in the short period he served in the Opposition during that short Parliament from 1957 to 1958, to which the Hon. Member for Yukon (Mr. Nielsen) has referred. I would like to recall those days, as the Hon. Member did, and note as both he and the Hon. Member for Yukon did, his service to Canada and his service to the House of Commons. I particularly join them in expressing the sympathy of this Party to his wife Kathleen, who was a strong support to him not only when he was in politics but later, to his five daughters, his five grandchildren and to his son-in-law.



ROUTINE PROCEEDINGS


Mr. Ray Skelly (Comox-Powell River):: Mr. Speaker, I have the honour to present a number of petitions today. The first one is signed by a number of West Coast fishermen and it indicates that the majority of people involved in and dependent on the fishing industry on Canada's West Coast have lost confidence in the ability of the Department of Fisheries and Oceans to manage effectively and objectively the West Coast fishery resource. Be it therefore resolved that the Government of Canada implement the following consultative process. The Government must provide a consulting committee composed of
February 8, 1984

elected representatives of various user groups. The Government must commit itself to developing a fisheries management policy based on consensus and consultation with user groups.
Your petitioners humbly pray that the House of Commons will urge the Government to implement an effective policy of consultation and consensus in the development of a fisheries policy rather than continuing its course of unilateral action.


Raymond John Skelly: The second petition is signed again by a number of fishermen from the West Coast who are vitally concerned about the nature of the industry at this time. Whereas the high cost of fuel, interest rates, mooring and other factors which have driven up the cost of fishing are a direct result of the Government's policy, and whereas fishermen contribute to the welfare of all Canadians by providing a vital food stuff through the harvesting of fish resources, therefore your petitioners humbly pray that the House of Commons will take immediate steps to relieve fishermen from these undue Government costs.


Raymond John Skelly: The third petition, Mr. Speaker, relates to one of the most important issues concerning the West Coast fishing industry, that is, habitat protection. Whereas the conflict between resource users in logging, mining land development and fishing are leading to extensive and permanent destruction of critical fish habitat on the West Coast, be it therefore resolved that the federal Government implement the following actions to protect fish habitat: Developing specific legislation to designate areas as inviolable fish habitat area throughout the-


Mr. Speaker:: Will the Hon. Member get to the point of the petition, please.


Raymond John Skelly: The point is that the fishermen involved wish to have some definite, positive action from the Government in protecting fish habitat rather then the weak approach it has followed. Your petitioners humbly pray that the Government act immediately to provide this support.


Raymond John Skelly: The second to last petition deals with a very recent event. It is again signed by a number of fishermen. Whereas the Unemployment Insurance Commission's Board of Referees ruled that special regulations for fishermen were in violation of the Charter of Rights, and whereas such decisions throw into question the Government's authority to set unemployment insurance regulations in fisheries matters, and whereas the regulations at the present cause untold hardships for already financially disadvantaged fishermen, therefore, your petitioners humbly pray that the House of Commons will take steps to introduce and improve amend-
Order Paper Questions
ments to the unemployment insurance legislation to remove this discrimination against fishermen.


Mr. Speaker:: The Hon. Member could sign his petitions before bringing them in the House. Will the Hon. Member deal with his last petition?


Raymond John Skelly: I would appreciate dealing with the last petition tomorrow, if that is convenient.


Mr. Speaker:: Fine.


Mr. Jesse P. Flis (Parkdale-High Park):: Mr. Speaker, I have the honour and duty to present a petition of the undersigned residents of Ontario, who now avail themselves of their ancient and undoubted right thus to present a grievance common to your petitioners in the certain assurance that your honourable House will therefore provide a remedy, humbly sheweth that the undersigned strongly request that steps be taken by the federal and provincial Governments to help Polish refugee doctors obtain licences in as short a possible time by creating more internship positions and by establishing financial assistance for the members of this group during their period of training. And as in duty bound your petitioners will ever pray.



BELL CANADA REORGANIZATION ACT


Hon. Francis Fox (Minister of Communications) moved: for leave to introduce Bill C-20, an Act respecting Bell Canada and to amend the Canadian Radio-television and Telecommunications Commission Act, the Broadcasting Act, the Canadian Film Development Corporation Act and the Radio Act.


[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.)
John Leslie Evans: Mr. Speaker, the following questions will be answered today: Nos. 40, 379 and 400.

February 8, 1984
Order Paper Questions


Mr. Beatty: In 1982, what was the total amount the Government paid for long distance telephone calls not placed through Government operators or on government long distance lines?


Francis Fox: In so far
as the Department of Communications is concerned, the reply to the above question is as follows:
Based on information reported by departments on their 1982 information technology and systems plans and to the Government of Canada banking and accounting branch of Supply and Services Canada, it is estimated that, during the 1982/83 fiscal year, $33,500,000 was billed directly by the carriers to departments for long distance telephone calls not placed through government operators or on government long distance lines.
It is estimated that only 9.2 per cent of the calling represented by this $33,500,000 could have been placed on the government intercity network. The remaining 90.8 per cent represents commercial (DDD) calling either from or to locations not served by the network. Examples of this would be calls to the United States and abroad or to Canadian locations where it is not economical to have government circuits.


Mr. Howie: 1.	In the current fiscal year how many persons are employed in the office of the Economic Council of Canada and what is the total estimated cost of salaries?
2.	For each of the two preceding fiscal years what amount was spent for salaries?


John Leslie Evans: 1. As of January 17, 1984, there were 136 persons employed by the Economic Council of Canada for an estimated salary cost of $5,159,000.
2. Amount spent for salaries:
1981-	82-$4,552,901
1982-	83-$4,791,923


Mr. Howie: Did the Department of Justice create a special unit to identify and to define the rights of aboriginal people which are to be included in the Constitution of Canada and, if so (a) how many units were created (b) what was the total cost of each unit (c) what was the purpose of the structure (d) on what date will the unit or units complete its/their work?


Hon. Mark MacGuigan (Minister of Justice):: In so far as
the Department of Justice is concerned: No. The Department of Justice did not create a special unit for this purpose. Rather, the work has been carried out through the Native Affairs Section, which has been in place since February, 1976, with intensive participation by the Deputy Minister, Associate Deputy Minister (Litigation), and the Public Law Section of the Department.


John Leslie Evans: I ask, Mr. Speaker, that the remaining questions be allowed to stand.


Mr. Speaker:: The questions enumerated by the Parliamentary Secretary have been answered. Shall the remaining questions be allowed to stand?


Some Hon. Members:: Agreed.


John Leslie Evans: Mr. Speaker, I ask that all notices of motions for the production of papers be allowed to stand.


Mr. Speaker:: Shall all notices of motions for the production of papers stand?


Some Hon. Members:: Agreed.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed consideration of the motion of Mr. MacLaren that Bill C-14, an Act to amend an Act to amend the Excise Tax Act and the Excise Act and to provide for revenue tax in respect of petroleum and gas, be read the second time and referred to a Committee of the Whole.
Raymond John Skelly: Mr. Speaker, 1 would like to summarize the remarks I placed on the record yesterday concerning this proposed legislation. In our opinion it has some very offensive features. The Bill proposes to reduce the petroleum and gas revenue tax on oil companies. It will provide what appears, by and large, to be a unilateral reduction in that tax without conditions. The fact that the tax will be reduced without condition means that Canadian taxpayers will have to pick up an additional share of the costs of operation in this country. Reducing that tax on the oil companies will mean that there will be less revenue available for the disabled people. Many individuals on each side of the House indicated that there were many worthwhile projects for the disabled. The concern here is how you can reduce taxation of a group which, by and large, has done well throughout recent history and at the same time cut opportunities for disabled people. You just cannot do that. There are many pensioners and individuals along that line who will be affected. This unilateral, unconditional cut in the tax rate of oil companies is going to mean that there is even less revenue available for the
February 8, 1984

disabled, job creation, pensioners and a host of worthwhile projects.
It would be instructive, Mr. Speaker, to note that we are going to give Imperial Oil a cut in taxes. Over the last three years Imperial Oil earned something in the order of $600 million. Throughout this recession period their earnings dropped to approximately $400 million. In the last year they earned $200 million and change. Many other businesses are experiencing severe problems and going bankrupt. The Seven Sisters, which have always done well in Canada, are continuing to do well. In this Party, Mr. Speaker, we find that offensive. Those companies are doing well off Canada, the Canadian people and their resources. It is our feeling that they do not carry their fair share and that the Government and the Conservative Party are quite prepared to see them do even better at the expenses of many others. We feel that the tax cut will not benefit the smaller Canadian companies. There should be direct programs to provide benefits to those smaller Canadian companies which we want to see active and growing. We are not impressed with a tax cut which provides the majority of its aid and relief to the seven sisters operating in this country. That is wrong and offensive.
The second thing is the absolute blindness in the Government's and the Official Opposition's position. They are prepared to give unconditional tax cuts. The Minister of State for Finance (Mr. MacLaren) said that he wants to improve and increase Imperial Oil's cash flow position. He wants to improve the cash flow position of the seven sisters. We are very concerned about that. We know from the Bertrand Commission that it is those same companies that ripped off $12 billion from the Canadian people between 1958 and 1973. The Bertrand Commission was put in place by the Government to expose an enormous rip-off of the Canadian people. That Commission produced numerous results and recommendations. To date we have not seen one of those recommendations implemented. That is tragic, stupid and offensive. We have got to become very specific in the way we deal with major corporations in this country, which are continuing to profit and whose cash flow picture is better than almost any other company's. We could insist, if we are going to give them a tax cut, that it be tied specifically to their investment in projects that would create employment. There should be no tax relief, benefit or break unless it is tied directly to a specific job-creation project which will improve employment and the viability of communities.
Yesterday the spokesperson for the Official Opposition stood up in the House and told us about the problems of a gas plant in Grande Prairie. There are many examples of areas where we could tie tax cuts to corporations to specific projects. We could make it a condition to get a cash flow improvement at the expense of the taxpayers that it must be tied to a project which will create employment.
The third critical point on this particular break, Mr. Speaker, is that this is a tax break for oil companies. I do not know why the Government continues to have an absolute fixation on protecting banks and oil companies. It certainly does. How
Petroleum and Gas
Canadian people can tolerate that kind of a situation is beyond me. The present Government and the Official Opposition are interested in granting this tax relief only to oil companies. There is no attempt to see this tax break carried on down the line to the consumers. There is no effort by the Government to create a downstream tax relief program or to see any of these benefits passed on to the consumers.
It is extremely unfortunate, Mr. Speaker, that the Government has not developed a downstream policy. Every time we go to the gas pumps we see that the price of fuel is rising. Yet in the House we are going to authorize a tax cut to give major oil companies maximum benefits and improved cash flows without any guarantee that they will produce job-creation projects or that they will pass any of these benefits on to consumers, small businesses, fishermen or farmers. No one benefits except the oil companies. Mr. Speaker, that is wrong, stupid and offensive.
In our Party we would like to see the reverse happen. We would like to see the Government admit that its National Energy Program has created a tremendous hardship to Canadians and that it has not looked seriously at a downstream policy. There is no attempt to give some relief at the gas pumps.
Let us review what has happened. Whenever there has been agreement to increase the wellhead price, it would appear the oil companies have added a price increase as those costs were passed down the line. Currently there is no accurate method to determine what a justified price is for fuels such as gasoline, heating oil and others. The Government is not interested in what happens at the gas pump because it is more interested in bashing the provinces for it.
In reality it would appear that every time there is a price increase, the oil companies have not only taken a share to the producer off the wellhead price but have also added their own price increase that has gone to the gas pump.
The Government has also been absolutely negligent in its treatment of consumers by its failure to introduce a competition policy in the House. It has not introduced a policy that would protect the small independent gasoline dealers. We have seen the major oil companies attempt to drive them out of business, purchase them, cut off their supplies or launch price wars against them. It is very interesting to note what happens in a gas war. While we watch the major companies attack the independents here in Ottawa in a gas war they are simultaneously driving up their prices on Vancouver Island in order to pay for that gas war against the independents in Ottawa. They are making the people on Vancouver Island pay for these gas wars in other parts of the country. This means that the major companies never lose, no matter what they do.
The Government has failed to protect consumers by not insisting on a long-term pricing policy or a fair competition policy to protect the independent gas dealers. When will we see such a system that will permit a competitive force rather than the kind of tacit agreement with multinationals and major oil

February 8, 1984
Petroleum and Gas
companies? Frankly, I am convinced that there will be no competition legislation in this Parliament. I am sure this session will end before consumers are given any break or we see any improvement to a national energy policy that has collapsed.
Our Party has called upon the Government and the Minister of Energy, Mines and Resources (Mr. Chretien) to take a number of initiatives in energy. First, the Minister should stop paying so much attention to his own leadership aspirations and spend more time and pay more attention to his Department. We would also like to see the Minister take the initiative of providing a new approach to the national energy policy. Certainly we would like to see a revamped Petroleum Incentives Program. There are many instances in the country where the money that is invested is being pumped into the ocean or used to drill dry holes. Rather, this money could be used to produce immediate benefits for energy security in the country, reduce the costs of energy to Canadians and provide many energy alternatives in this country.
The Minister of Energy, Mines and Resources could authorize a government inquiry into the nuclear fuel cycle immediately. Such an inquiry could look into the problems that have been caused by the dilemma at Key Lake. It could also look into the problem which has been raised repeatedly in the House and the Ontario legislature concerning the apparent failure of the nuclear program in this country and internationally. It seems that Canadians have paid a terrible price for that particular energy initiative.
The Government is proposing to give tax cuts to oil companies when that tax revenue perhaps could be used to fund an inquiry into the nuclear fuel cycle. The other day the Official Opposition complained that the Government was giving our complete nuclear technology to South Korea, which would allow South Korea to function as a competitor on a world-wide basis. It is absolutely insane that Canadian taxpayers would pay to develop a technology, be it positive or negative, and then find that the Government would turn around and sell that technology to a country like South Korea, which will undoubtedly become a competitor for the supply of those products to other nations. It just does not make sense.
The fact of the matter is that the Minister of Energy, Mines and Resources could authorize the expenditure of that tax revenue, which he proposes to return to the oil companies, on the establishment of an inquiry into the entire nuclear fuel cycle. This can be justified since the whole question of the nuclear industry being of any benefit to Canadians is unsettled, especially with respect to the long-term disposal of wastes. The possibility remains that thousands of years from now those wastes may pose a tremendous problem to future generations. It has been said, perhaps tongue in cheek, that one of the major growth industries in this country could be the closing down and mothballing of nuclear power plants.
I challenge anyone in the Government to tell me what harm there would be in gathering information and public opinion about the nuclear fuel cycle through an inquiry. I give credit to the Official Opposition when it was in government in 1979 for
at least contemplating the creation of an inquiry into the nuclear industry in this country. However, I certainly have not seen any policy commitments from the new Leader of the Conservative Party who is attempting to come to power without any policies. I am sure a statement about this issue would be welcomed by the whole country. It might even give the tired Government across the way, which seems bereft of ideas, some incentive to begin that inquiry now. It could be a constructive effort made by the Official Opposition for a change.


Mr. Shields:: Liberal Party West.


Mr. Fisher:: Such dulcet tones!


Gerald Augustine Regan: Don't say such things.


Raymond John Skelly: One cannot even promote that.
In any event, I will continue to discuss alternative energy opportunities and conservation. An amazing thing happened in the House approximately a month ago during a discussion with the Minister of Energy, Mines and Resources about the Petroleum Incentives Program. The Minister was asked why his Department was taking $50 million out of the Canadian Home Insulation Program so that it could be put into the Petroleum Incentives Program. The Minister stood in the House to say that he would be prepared to inquire into that matter, when in reality that shift of expenditure was already in the Estimates we were to deal with that evening. The Minister was not even sufficiently informed about proposals, which his Department was asking Parliament to authorize, to provide an answer in the House.
That $50 million in the Canadian Home Insulation Program would provide insulation improvements to thousands of Canadian homes. Furthermore, a proper initiative to get that program under way would represent enormous net savings to Canadians in terms of energy. Yet the Minister's Department-I do not believe the Minister was aware of it-was to take that $50 million and pour it down one dry hole. In fact, it probably would have cost more than $50 million. What was the logic behind such a proposal? When there could have been a certain continuing reduction of energy use under the Canadian Home Insulation Program, the Minister was quite prepared to take that $50 million of taxpayer's money from a sure thing and gamble in the offshore or pour it down one dry hole in the hope of producing something positive for Canadians in terms of energy security. That kind of logic is absolutely wrong because it is shortsighted, short-term and will cause Canadians no end of problems in the future.
The other extreme disappointment is the Government's lack of action on alternative energy uses. There is a great deal of interest in the country in trying to develop the soft paths or alternative approaches to energy use. Several months ago there was a great controversy when the Government was attempting to determine what allocation it would make for the development of alternative energy sources, such as solar energy, and the development of other types of energy alternatives. What the Government said is, "We do not have enough money to do it". Instead of doing that-a paltry sum which really means
February 8, 1984

nothing-the Government proposes to take the money it has available and give it in the form of a tax grant to oil companies to improve their cash flow without the condition that they build an employment development project.
1 see you are signalling me to come to the end of my remarks, Mr. Speaker. 1 have one final point. This money is unconditional to creating any worthwhile projects. It will mean improvement of multinational cash flows. Second, the Government does not intend to pass this along in any way to consumers. There are so many other worthwhile projects in the energy field on which this money could be spent. It could be spent in social fields. The proposal in this Bill is really a tragedy.


Mr. Scott Fennell (Ontario):: Mr. Speaker, I would like to take a moment to congratulate you on your appointment and also to congratulate Mr. Deputy Speaker (Mr. Corbin) and the Acting Speaker (Mr. Guilbault). I would like to mention that we hope the former Speaker regains her health quickly so she can take on her new responsibilities and that we miss her in the House.
It is a great pleasure to speak once again on energy. I have done this quite a number of times since I came to Ottawa in 1979. I listened to the rhetoric of the Hon. Member for Comox-Powell River (Mr. Skelly). He talked about the Seven Sisters and that they might be getting a deal that is a little better. If you go back in history you will find it was the Seven Sisters that came to Canada and found oil. Bay Street could not raise the risk capital to find oil in the western Provinces. We have something to thank the Seven Sisters for. I accept the fact that those companies are greedy. They jump in. They are opportunists. But thank God those companies came and brought their expertise to Canada. I think those companies have been ill treated by the National Energy Program. Prior to the National Energy Program those companies were spending in Canada in excess of 100 per cent of their cash flow. Today I understand they are spending less than 50 per cent of their cash flow. I believe they have been an asset to this country. They would have, if given a chance, proceeded with the heavy oil sands and probably in 1985 we would have been producing oil from known reserves, from heavy oil and the oil sands.
The NDP's old complaint is, "Let's nationalize everything." Let me say to the Hon. Member for Comox-Powell River, thank God for the multinationals. In his own Leader's riding is General Motors. 1 say, thank God for General Motors. General Motors has introduced new technology into Canada and created jobs at a time when many people in Canada have been unemployed.
1 am not a multinational basher. We must build up Canadian ownership. But the multinationals have contributed a great deal to our economy.
The Hon. Member for Comox-Powell River and I agree on one thing, namely, changes to the Petroleum Incentives Program. I disagree with how he would change them, but I believe they should be changed. I will be dealing with that point later
Petroleum and Gas
on in my remarks. It is interesting to note that the Minister of State for Finance (Mr. MacLaren) is the same individual wo at the time of the energy hearings was the Parliamentary Secretary to the Minister of Energy. He is still backing the same loser. At that time, the present Minister of State for Finance gave the same rhetoric that he gave us yesterday. It is the same wonderful bonanza to the oil industry.
I want to correct the record, and I will be quoting some statements made two years ago when the National Energy Program was being discussed in committee. As you know, Mr. Speaker, there were eight weeks of intensive hearings. We tried to change something in the Act. The one important point we changed in the Act, I think, was Subsection 79(1), which in this Bill is Clause 1(1) and refers to the Federal Court. I would like to tell you the importance of that amendment that was brought in by the Conservative Party, Mr. Speaker. Prior to the time of its being introduced with the assistance of the Canadian Bar Association, it appeared that the final voice and decision would rest with the Minister of Energy, Mines and Resources. This frightened us because there was no higher court to which the oil industry could go. We insisted on an appeal to the Federal Court. What this Government is doing is adjusting the Clause. It is a technical adjustment. However, the reason the Federal Court is mentioned is that members of the Conservative Party who sat on this committee fought for that amendment throughout the eight-week period. I think it is very important. The fact that it comes under the same court as income tax appeals, I am not too sure about that after listening to all the rhetoric in the House about the attitude of Revenue Canada.
I recall the original National Energy Program very clearly. There was one thing on which we agreed with the Liberals and that was fairness, self-sufficiency and Canadianization. But first, the NEP was not fair. It was not fair to the West nor to the industrial heartland of Canada, Ontario and Quebec. As far as self-sufficiency is concerned, at the present time we are importing 33 per cent of our oil needs. Prior to the National Energy Program we were importing 25 per cent of our oil needs.


Mr. MacLaren:: Those are net figures.


Thomas Scott Fennell: I took the figures out of official documentation which the former Minister of Energy told us was the documentation he used.


Douglas Glenn Fisher: How much are we selling?


Thomas Scott Fennell: They can argue over there, but I am using the same documentation the Minister told me he was using.
What we have in this Bill are back-in changes. I want to tell you how they came about, Mr. Speaker. Shortly after the energy hearings we were called to a meeting in Room 229 North by the Assistant Deputy Minister of Energy. After he went through all the changes in what we called "baby NEP", I asked what it amounted to. He answered that it amounted to a gross error in the black box, in other words, the computer printout had to be changed. There was no dramatic change. It

February 8, 1984
Petroleum and Gas
was a necessity. What the Government projected would happen to the price of oil did not happen. Further, the price of oil has gone in the reverse direction from that which the Government intended. What the Government has done by this change in this Bill is to try to say to Canadians, "We are giving some of it back". It is too little too late. As well, it is too late to save that Government. The Government has gone too far to recover.
I have an active interest in victims of violence. The gentleman with whom I have been working asked me to get a copy of the Bill introduced yesterday. I got a copy of it right after it was presented in the House while I was waiting to speak on this Bill. I noticed that the amendments to the Criminal Code are in another omnibus Bill. This reminded me of the days when we had the ringing of the bells. I thought the Government would learn from experience that it is not acceptable in the House of Commons to have an omnibus Bill.


Mr. Malone:: An octopus Bill.


Thomas Scott Fennell: We proved that in the energy Bill. The Government had to make major changes from the original Bill that was presented. The Government had to break it up. The Government had to put things in a proper format.
At that time I gave an extended speech. This was prior to the change in rules. My speech was an hour and fifteen minutes long. I will be quoting some statements I made at that time two years ago that are so accurate. I am not often that accurate. But what I said then has happened now. This Bill removed cash flow from the oil industry in western Canada. Now the Government is telling us that through the changes the Government is giving a $2 billion incentive for heavy oil.
I read a very interesting report written by a graduate student of the University of Alberta. This report was contained in the recent list of the Library of Parliament. It pointed out that over five years it will be less than S900 million. Also it anticipated that when it is all in, it will be less than $500 million, this is misleading the public. This is not telling the facts as they are. It indicates that it will give back much more than what will really be given back.
As I indicated in a previous statement, this year BP Resources is showing quite a fantastic growth in profit. I have talked with its officials. They are pleased to be rid of the marketing arm which was dragging it down into a loss position. This Government went out, created COR, collected money from every taxpayer to purchase BP, and it was purchased when the market was at its highest. We know for sure that the Government paid at least $200 million more than it was worth. To date I have found out-and I am having this proven-that it will probably turn out to be more like $500 million in excess of the asset value of BP.
On April 22, 1982, as reported in Hansard, I stated:
This is not Canadianization. Canadianization means looking back to our roots to see how our country began. This country was started by private enterprise and entrepreneurs. This is not Canadianization. It is government intervention and
nationalization. Nationalization has not worked in one country in the world and it will not work here. It is a disgrace. The Canadian ownership charge, which I will call a slush fund because that is how the government treats it, does not have a beginning or an end. It will just continue to be another tax grab by the Liberal government.
I knew it then. We knew it then. They have proven it now. We were told that it was to buy BP. We were then told that another half a billion dollars was required to bail out Dome. The Minister rose and said that that would be put into general revenue. That is a tax on every Canadian citizen, every day of the week. I maintain that it should be removed. We were right then. We stated the facts then. They laughed at us, they screamed at us and yelled at us here in the House. They said that it would not be that way. It is that way, and our point has been made.
The one thing to which I really object in the Petroleum Incentive Program is that the Government and the bureaucracy running it-it is the bureaucracy which runs the Government; the Government does not run the bureaucracy any more-have been incapable of picking out the winners and losers. I will not even quote the names of the companies. We all know them. I have said them enough times. They maintain that they are better qualified to decide where the money should be invested. This is taking it right out of the private sector. The Minister of State for Economic and Regional Development (Mr. Johnston) made a statement at the time that it was up to the private sector to make the profits and create the funds and that it was up to the Government to redistribute the wealth. What they have done is to eliminate the wealth. They have tried to pick where they will have winners. They have gone to the frontier on the East Coast. I think it is marvelous that that much development is going on there. They have gone to that part of the country. However, we still do not know how much it will cost to bring that product onshore. Yet we know that by spending funds on heavy oil upgrading and oil sands there is no question of our being self-sufficient by 1990. We do not have a hope in Hades of being self-sufficient between now and the year 2000, and from the year 2000 on we will be on a downward scale.
If the cash flow had been left in the oil companies, they could have built megaprojects without grants, without assistance from the Government, without the Government telling them where to do it. They could have done it on their own. This has been unsuccessful and is unacceptable to my Party. We have fought it. We have been against it and will continue to be against it.
They did some good things in the Bill, but again it is too little, too late. They gave a $250,000 corporate tax credit to small Canadian companies. The reason for that is that those companies could not have survived without it. I have talked with representatives of the oil industry. They could not have survived the period since the inception of the National Energy Program if they had not been given that incentive. It is not a great bonanza to them. It only permitted them to remain in the black as opposed to being in the red.
Another change in the Bill is the rate reduction for resource royalties. Back in 1982 we argued-and I will raise it again-
February 8, 1984

that under the Constitution the resources rest with the provinces. However, for some unknown reason, the Government has decided that that is not a fact, that the resources rest with the Government of Canada. It has decided that they rest with the Government of Canada, not with the people of Canada. The people of Canada are paying the price, and the Government of Canada is collecting the money. It is allocating those funds as it sees fit. This is unacceptable to us.
They tell us what a bonanza it has been for Canada. I am afraid that out West it is a disaster. The Province of Alberta had no unemployment at the time the National Energy Program came in. Today, droves of people have left and returned to Ontario, Quebec and the Maritimes. Those people are so discouraged that they would never go out West again. They were hurt by the National Energy Program. Not only the West was hurt by the National Energy Program, but the Province of Ontario was hurt as well. There was a ripple effect about which I spoke on April 23, 1982. At that time I indicated the ripple effects which would result, and they have happened. I talked about the building of compressors in Quebec and the building of pipe in Ontario. That whole group of industries went down.
What would it have done to the steel industry if they had proceeded with two or three megaprojects? What would it have done to Ontario? I admit that in my riding at the present time things are pretty good. It has a very low unemployment ratio. The reason for it is that the Americans finally picked the right car to produce at the right time. General Motors is now building a big car which is in great demand in the United States. We are lucky, but not as a result of planning by the Government. It is as a result of the planning of General Motors.
I think it is very important to indicate that the petrochemical industry in Canada is suffering. It is really hurting. The report is out now that we must have a 15 per cent cut in the cost of gas. Instead of making a cut the federal Government, being big boys, decided to give $50 million to Petrosar. To Petrosar that was nothing more than a sop, a band-aid. It does not solve their problem. How many $50 million hand outs are they going to give as opposed to cutting the cost of that gas by 15 per cent?
I will wind this up, Mr. Speaker, but I would like to point out that in Saskatchewan there are billions of cubic metres of gas locked in, and western gas producers would love to be selling that at a much reduced cost. Because of this Government and its taxes, they cannot sell it at a reasonable level to allow the petrochemical industry to survive in Canada.


Mr. Speaker:: I believe the rules provide for a ten minute question and answer period. Are there Hon. Members rising to ask questions or make short comments?


Mr. Hovdebo:: Mr. Speaker, I wanted to comment on the suggestion of the Hon. Member for Ontario and his support in defence of the Seven Sisters and the multinationals generally.
Petroleum and Gas
The definition of multinationals is that they are corporations that use your money to buy you. That is exactly what the oil companies have done in Canada. Over the years the industry has taken out of Canada $1.25 for every 25 cents it has put in. That does not include the money they have invested in Canada which they earned in Canada. It is the amount they brought in originally or brought in at various times. They have been using our money to buy us. They continue to do that.
This Bill is a good example of the multinationals, in this case the oil companies, being allowed to buy us out. Under this Bill we give them another one point something per cent which they can use to reinvest. In the process of reinvesting, they continue to increase their ownership of the oil industry in Canada. Will the Hon. Member for Ontario comment on that?


Thomas Scott Fennell: Mr. Speaker, I am delighted to comment on that because there are so many inaccuracies. That gentleman and his Party "represent labour" in eastern Canada. I believe that I do a better job of representing labour. It is the multinationals that have created jobs for Canadians, particularly union jobs.
With regard to the Hon. Member's comment that they take out $1.25 for every 25 cents they put in, that is nonsense. I will use Imperial Oil as an example. Part of Imperial Oil is held by every major pension fund in Canada. It is the future of people's needs in their retirement. Beyond that, they paid a fair return on money the borrowed in Canada. That has been a revenue cash base brought into Canada. It forms part of the tax receipts the Government takes in. The Hon. Member does not understand economics. He should study the Japanese model. They encourage foreign technology coming into their country. They know they must have it to keep their people working. We should be encouraging foreign technology to come in now because we are so far behind. It would create jobs. The critical problem in Canada today is that there are 1.5 million people unemployed. Until we can resolve that problem, we had better encourage every nickel and dime we can get from anywhere in the world to create jobs in Canada.
The Hon. Member had better go back and look at his statistics a little more carefully before talking about the amount that goes in and the amount that goes out. It is inaccurate, not factual and is misleading to the Canadian public.


Mr. Althouse:: Mr. Speaker, I wonder if the Hon. Member who just spoke would give us an indication based on the fact that approximately 54 per cent of last year's Canadian production was from old oil, pre-1974 oil and was produced at about 82 per cent of world price, on average. The other 46 per cent of our Canadian oil was produced at world price. How does the Hon. Member propose to deal with the problem of price? His remarks sounded as though he were prepared to go to world price for all oil. Is that what he means? Did he mean what he seemed to be saying? How does he propose to explain to Canadians the extra 9 per cent or 10 per cent that would be required to cover this extra cost so that all oil produced in Canada could be produced at a low price?

February 8, 1984
Petroleum and Gas


Thomas Scott Fennell: Mr. Speaker, we are currently paying more than world price for gasoline and heating oil. What the Hon. Member is saying is inaccurate. It is tax that is going in. On every gallon of gasoline there is 66% cents tax. It has nothing to do with money going back to the oil companies. It is tax. They say that goes into the PIP grants, and the PIP grants go to Nova Scotia and to the Beaufort Sea. It does not go back to the traditional area of oil discovery.
If we went to world price today, the price of gasoline and heating oil would go down. If that were the solution, I would endorse it because it would assist the consumers of this country whom that Party stands up and says it is defending. They are hurting. They are trying to build in more nationalization. They would like us to have more Canadairs and more Eldorado's, which'needed $400 million to save it. They would like the taxpayers to keep paying these deficits of Crown corporations. As far as I am concerned, if we went to the world price today I believe the price of gasoline and heating oil would go down.


Raymond John Skelly: Mr. Speaker, it was fairly entertaining listening to such complete nonsense. I honestly wonder how the previous speaker could stand up with a straight face and present such malarkey to the House. Obviously he has not read The State of Competition in the Canadian Petroleum Industry. It simply is not possible to believe the line that the Hon. Member has put forward. Is he prepared to clarify one small point? He mentioned the Japanese were interested in obtaining foreign technology. Did they, like Canadians and like his Party, want foreign equity investment and control along with the technology?
The Hon. Member's Party appears to be interested in bringing in foreign ownership and control as a mechanism for getting our technology. We in Canada developed an enormous amount of technology that has not been held in this country. In fact, it has left. We pay for research and development which multinationals ship out of the country. Will the Hon. Member admit to the House that he was just joshing us, that in fact it is not good enough to have foreign equity investment and control in place of Canadianization-not nationalization, but Canadi-anization?


Thomas Scott Fennell: Mr. Speaker, we support Canadianization. I did not talk about control. I would be delighted to have equity in foreign corporations that would bring new technology to this country. I agree that not only has multinational technology left the country but Canadian technology has left as well. That is because we have not given those companies the incentive to stay.
What I stated is fact and can be proven; what the Hon. Member stated is socialist rhetoric. We are on the opposite sides of the fence and will never agree on anything, except that PIP grants should be changed. The way the Hon. Member wants to change them and the way I want to change them is different, however.
I do not agree with his stand that we are totally in favour of foreign control; we are not. We are in favour of Canadianization and putting more money from Canadians into equity in this country and getting rid of foreign control.


Jack Wendele Shields: Mr. Speaker, it is a pleasure to participate in debate on Bill C-14, which tidies up some of the action taken by the Government over the last couple of years.
I should like to comment on the remarks made by the Hon. Member for Comox-Powell River (Mr. Skelly). He spoke about the great disservice that Imperial Oil Ltd, for example, has done to the country and chides it for its investment in places like Cold Lake and Grand Centre and says that it is looking for handouts. I have to remind him that when Imperial Oil was attempting to build a heavy oil plant in Cold Lake and Grand Centre, using brand new technology that had never been tried before on a commercial basis, it was faced with an investment of $12 billion or $13 billion. That investment equalled the total asset base of the company in Canada. The board of directors had to make a decision on whether to go ahead or to withdraw. Under the National Energy Program, the company could not see the prospect of a return on the original investment which would protect the pension funds that are invested in Imperial Oil or the individuals and trust companies that have invested in it.
I find it difficult to entertain for a moment the rhetoric coming from the left-hand corner of the House when it is obvious that Members there do not present the facts because they do not know them.
I should like to touch upon three measures outlined in the Bill because I think they are important. The Bill points out very dramatically the disastrous effect of the slowdown in the energy industry, particularly in western Canada. The Government was trying to take action without admitting it had made a mistake. Slowly, it has been introducing certain measures to try to get things rolling again. Action in the western sedimentary basin came to a stop. Drilling rigs left the area, small service companies lost everything, small entrepreneurs just starting business lost everything, and an incalculable number of jobs were lost in the process. The ripple effect was felt in communities like Grande Prairie, Fort McMurray, Bonnyville, Grand Centre, Cold Lake, Slave Lake and High Prairie- communities in the northern part of the provinces and many in the south.
The Bill will allow corporations an annual credit of up to $250,000 that may be deducted from its petroleum-gas revenue tax liability. That is a good measure, Mr. Speaker, as it gives a company a little more cash flow and will spur investment. There is a small reduction in royalties from 12 per cent to 11 per cent. The Bill also tidies up the enhanced oil recovery program that was introduced by the Government.
I am not going to talk too much about the Bill today, Mr. Speaker, but I want to use it to focus on some things that happened under the National Energy Program. I should like to present to the House some alternatives that I think should be
February 8, 1984

included before the oil industry can get moving in the way it should to lead us out of recession.
The Minister of Energy, Mines and Resources (Mr. Chretien) took strong issue with statements made in Calgary by the Leader of this Party. At a Liberal meeting in Ottawa, the Minister took the opportunity to make some scathing comments about it. He also defended very eloquently, as only he can, the National Energy Program, saying what a good thing it was for Canada. Our Leader had said that oil production was declining by 30,000 barrels per year. The Minister quoted the forecast of Oilweek that production would increase by 3.4 per cent in 1983 over 1982. That is true, but I want to show how the Minister twists the figures that he is fed by his civil servants. Indeed, this is the way that the Government attacks every problem, instead of facing it squarely.
The Minister neglected to say that the conventional crude oil production in 1983 would be 16 per cent less than in 1979 and that much of the gain in 1983 reflects record output of the two oilsands plants which just about doubled their 1979 production. They are located north of Fort McMurray. The Minister failed to mention that the discovery that started the oil industry in Canada in 1947, the Leduc field, is now dry. He also failed to mention that there is a continual decline of conventional oil reserves in Canada because the emphasis for drilling and exploration has been shifted dramatically by government intervention from the western sedimentary basin to the offshore and the so-called Canada Lands. He quoted Oilweek estimates that expenditure in the industry for exploration and development in 1983 was $5.6 billion, and noted that costs would be more than 70 per cent higher than the $3.2 billion spent in 1979. That is also true, but the Minister failed to mention that of the estimated $3.7 billion which will be spent on exploration in 1983, more than $3 billion will be spent on Canada Lands and only $700 million in the established western sedimentary basin.
I speak now of duck hunters, Mr. Speaker. If you want to hunt ducks you do not go to the mountains, you go where the ducks are. We have a government which wants to find oil. We have an established western sedimentary basin. We have the oil sands in place. We have the production capabilities. What we are doing by government policy is to redirect this into the so-called Canada Lands where not one significant find has been made to date, and I am talking about the Beaufort Sea and the Mackenzie Delta.


An Hon. Member:: What about the future?


Jack Wendele Shields: An Hon. Member asks about the future. Obviously, he has not listened and will not listen. What I said was that if one is going duck hunting, one goes where the ducks are. There is oil in the western sedimentary basin. It needs to be explored and to be produced at reasonable cost, which will in turn produce jobs. We have two million unemployed in this country. That is the problem. Certainly we have a future. Certainly it does not mean that we do not search in Canada Lands for oil. However, you do not take 75 per cent or 80 per cent of
Petroleum and Gas
the exploration dollar and move it-by government decree- from the western sedimentary basin and from the oil sands deposit to the Beaufort Sea and to the Canada Lands, where not one significant oil discovery has been made. That is the problem.
We in Canada have now switched to the few extremely high cost wells on Canada Lands away from a healthy industry in the conventional area. That is what we have done by government decree. That is what this Government has done.
On the plus side, there are some 1.5 billion barrels of oil in Hibernia. However, I have an estimate here that the first possible production from Hibernia will be in 1995, a good 11 years away. Canada is now moving out of recession to economic recovery, and it means that these past four years have been literally wasted, because we are going to be bringing in oil and spending Canadian dollars to buy oil offshore. This will amount to billions of dollars, if the recovery takes place in the way we all hope it does.
I would like to point out some of the things said by the Minister of Energy just for a moment, Mr. Speaker, which show that the Minister obviously does not know his own Department and does not understand the energy problem. In one example, he said, "The market for gas will not change unless Mulroney decides to give our gas away". Just moments before that in the same speech, in the same locality, he said, "Mulroney should tell Peter Lougheed to reduce the price he sets for gas. Such action would do more to promote and expand use of gas in Canada than all the rhetoric against the NEP". On the one hand he says the Conservatives want to give our gas away and, on the other hand, he says the Leader of our Party should go to the Premier of Alberta and tell him to sell his gas cheaper and that would solve everything for the gas industry and would do a lot more good than just to talk about the national energy policy. That is the kind of doubletalk we have been getting from this Government for too long. The people of Canada know it and are going to render their judgment come the next election day, mark my words.
The Petroleum Service Association of Canada, which represents service and supply companies and not drilling and service rig contractors, found that member companies had reduced employment in the last three years by 40 per cent-which translates into 20,000 to 30,000 jobs-because of the national energy policy. And that is a service industry which is 98 per cent owned by Canadians. It is not foreign owned. It is owned by Canadians who built up a service industry and it has become renowned the world over. I wonder if Hon. Members of this House of Commons realize that on the outskirts of Edmonton and Calgary there are manufacturing firms which manufacture drilling rigs which are acknowledged in the industry to be of the most superior quality and design in the world. These rigs were being shipped literally all over the world. Members of the New Democratic Party talk about technology. That is technology which we as Canadians developed and we as Canadians are shipping all over the world.

February 8, 1984
Petroleum and Gas
It takes the same number of people to drill a $100 million wildcat well in the frontiers as it does to drill a $500,000 wildcat well in the western sedimentary basin. Therefore, if we are talking about creating jobs and the amount of money we spend on creating jobs, we should consider that we create the same jobs when we wildcat at $500,000 for a well in the western sedimentary basin as we do with a $100 million well offshore, and we have fewer of them because they are so darn expensive.
I would like to point out, Mr. Speaker, what I believe must be done to turn the industry around and allow it to lead us out of the recession. I believe we have to go to market pricing. I heard the New Democratic Party a few moments ago question my colleague, the Elon. Member for Ontario (Mr. Fennell), saying, "How can you justify going to world price?" 1 will tell you, Mr. Speaker, how I would justify it. I only have to look south of the border to the United States where oil has been at market price for a long time now. It deregulated about 18 months to two years ago. I can now pull up to the pumps in the United States and fill my car with gasoline and I pay 30 cents a gallon less than I pay in Canada.
The problem in Canada today is that we are paying more than world prices, as the Hon. Member for Ontario indicated, and it is because of the ad valorem taxes. It is because of the federal taxes, the petroleum-gas revenue tax, and the Canadi-an-ownership charge-which was supposed to be a temporary tax. Look to the taxes. That is where the problem is. We have a bankrupt Government which spends money like a drunken sailor. That is the problem, not going to market pricing. Market pricing benefits the consumer because it increases the available supply. It encourages people to get out there and get it. They know they will get world price. They know that Government will not interfere with them. It provides competitive prices at the pump or the burner tip. Regulated pricing in Canada includes excessive taxes imposed by the federal Government, and by some of the consuming provinces, which has resulted in consumers paying higher than would be the case under a market pricing system.


Mr. Munro (Esquimalt-Saanich):: Fishermen, too.


Jack Wendele Shields: Of course, fishermen and farmers. It reflects all the way through. I believe we must look at investment opportunities for Canadians. We want to Canadianize the industry. I believe we have to encourage Canadians to invest in their own industries. How do we do that? We can do it with the tax system. We can do it with some type of energy registered retirement savings fund, using it in an energy investment way, giving the same kind of tax incentives which are attached to RRSPs which are locked up in insurance and trust companies. We can declare money earned from investment in the oil industry to be non-taxable. There are all sorts of ways to encourage people to invest in the industry.
We have to go to an equitable tax system. I like to think of the PGRT in this way. It is like opening up a hamburger stand, maybe a McDonald's or Dairy Queen. You have a franchise and you must pay the franchisor a percentage of your volume. It does not matter whether you make a profit or not, you have to pay that percentage off the top. That is what the PGRT is. It does not matter a damn whether the company is making any money, the producer must pay that tax at the wellhead. You cannot do that, Mr. Speaker. You have to make it equitable and you have to get rid of that production tax, because all it does is go after the ones who are trying to develop the resource. It hits the young Canadian companies.


The Acting Speaker (Mr. Guilbault):: We now have a ten-minute period for questions and comments.


Raymond John Skelly: Mr. Speaker, although we agree with the Hon. Member that the tax problem is important, the fact that he can go across the line and fill up at gas pumps in the United States cheaper than he can in Canada is not exactly true. There are some areas in the U.S. where gas is more expensive than in Canada and other places where it is much cheaper.
Would the Hon. Member be prepared to admit that, while the situation in the U.S. is much different in terms of taxation, it is also different in terms of competition? The majors are much more competitive with each other and therefore the market share seems to be more evenly balanced and the price is right down, giving consumers a break. In this country the majors set and control prices. When the product leaves the wellhead, there is a tacked-on piggyback price that the majors manage to hold on to. Through price wars they have disciplined the independents, the majors have then bought them out and they have ghost companies working for them.
Would the Hon. Member get up and honestly state his Party's position on competition policy as it applies to keeping independent petroleum dealers in position so we get fair competition and consumers can get a price break through competition? Why is his Party against that?


Jack Wendele Shields: Mr. Speaker, I do not mind a question but I do resent the Hon. Member attempting to put words in my mouth. My Party stands for competition. That is what we are talking about. When governments come in and start to regulate everything in the way they have done, of course you have a lack of competition. That is the kind of thing he is talking about. He said there is a tacked-on piggyback price. Of course. If he had listened to what I was saying, it does not matter whether the company is making money or not, whether it is a large company or small company, they must pay the petroleum gas revenue tax, the Canadian ownership charge and those ad valorem taxes right at the wellhead. What can they do? As I tried to point out, it is no different from my saying that I will let you use my name to start a business but you have to pay me 5 per cent whether you make money or not. That is what we are talking about. It is a production tax. They do not have a production tax in the U.S.
February 8, 1984

The Hon. Member said there are places in the U.S. where you can get gas cheaper than you can in Canada, and in other places it cost more. Certainly, I am sure if you go to Alaska you will pay a little bit more than you do in Canada. But the average price across the U.S. compared to the average price across Canada is lower by 30 cents a gallon. Some people tell me it is even more than that, but I worked that out myself. I got the statistics and I know it to be true. The Hon. Member indicates there is a lack of competition. You are going to have a lack of competition if you do not allow Canadians to invest in an equitable way in the oil industry so they can get out and compete. It is basically that.


Raymond John Skelly: Mr. Speaker, from my perusal of Conservative policy, as inappropriate as it is, and considering the source, I can understand why even the statistics are out of whack. It is difficult to draw conclusions on the price when you look at the eastern states with areas where the price is higher than in Canada. I am not trying to justify that. I am suggesting that the real problem we have here is that we could have better prices in Canada if the Conservative Party did not oppose the introduction of sound competition legislation to protect independent dealers who can compete with the majors who really have a monopoly position.
How can the Member deny the material in the Bertrand report? Did that commission lie to us, did it give us false information? Why is the Hon. Member against competition? Their former leader said that competition was a back burner issue, and that was quoted in a business magazine. What the Hon. Member is saying is different from what the leaders of his Party are saying. They are against competition until one of them stands up and puts on the record that they are in favour of competition legislation. Talk is cheap, Mr. Speaker. Let us get some policy down in front of the public in writing.


Jack Wendele Shields: Mr. Speaker, it is hardly worth responding to that typical NDP doctrinaire rhetoric. They have aligned themselves so closely to the Liberal Party in western Canada that they are known throughout the western provinces as the Liberal Party West. I can remember the energy spokesman for the NDP saying, when the National Energy Program was introduced, that this Canadian ownership charge is a heck of an idea but do not go after just Petrofina, go after the big ones. Let us buy some of those big ones. They did not care how many people they put out of work, Mr. Speaker. The whole philosophy is that money falls from trees. No one is accountable to anyone. We just buy, take over, and we will tell you little people exactly what you should buy and what you should not buy.
The Conservative Party is for free enterprise. My God, that is one of the basic planks of our Party. Free enterprise and competition. All the National Energy Program did was stifle free enterprise and stifle competition. I think 1 could talk until I was blue in the face, Mr. Speaker, but the Hon. Member would still stand up with his socialist rhetoric that we are going to buy everything, we are going to control everything
Petroleum and Gas
and tell the people exactly what they are going to do. I do not buy it and I am sure the electorate do not buy it either.


Mr. McKenzie:: I have a few comments and a question for my colleague from Athabasca. I would like to get it on the record and get it straight that in the Thirtieth Parliament all Parties in the House agreed that there had to be a gradual movement toward world prices for oil. That is on the record and the NDP supported it.
I would also like to point out that the Hon. Member is saying we are against independent petroleum dealers. If he would re-read all our speeches during the debates on the NEP, he would see we pointed out time and time again what a disastrous effect it was going to have on the Canadian oil industry. We were not speaking for the multinationals. It was the Canadian oil industry and all the firms that supply equipment to it that were affected. The National Energy Program cost Canada something like 60,000 jobs, most of them in the Province of Ontario. With incentives under the free enterprise system in the Province of Saskatchewan today and with a Conservative Government, there is an oil boom there. We encourage the free enterprise system and competition.
Does the Hon. Member think that some more Petrofina deals and more nationalization will help employment in Canada?


Jack Wendele Shields: Mr. Speaker, I appreciate the question. The Canadian ownership charge is in place and the people in this country and all Members of the House of Commons know that it costs the normal consumer across Canada about $60 a year. This money is accumulating in the federal coffers in Ottawa of the rate of $75 million to $85 million per month. This works out to close to $1 billion per year. At the present time there is $1 billion in that fund. It was designed to buy foreign oil companies.


The Acting Speaker (Mr. Guilbault):: Order. The Hon. Member's time has expired.


Jack Wendele Shields: I have not finished the answer.


The Acting Speaker (Mr. Guilbault):: This put an end to the
question period.


An Hon. Member:: What happened to consent?


The Acting Speaker (Mr. Guilbault):: Is someone asking for unanimous consent? Do I have consent for the Hon. Member to continue his answer?


Some Hon. Members:: Agreed.


Jack Wendele Shields: Mr. Speaker, market analysis by the leading brokerage firms in Canada and the United States clearly point out that Canada, through Petro-Canada, paid $300 million to $500 million more for the company than we would have paid had we bought it on a normal basis. We paid much too much. The people of Canada recognize this and some of the problems

February 8, 1984
Petroleum and Gas
that this caused the Canadian economy. The dollars that were spent on Petrofina left Canada. This contributed to the high interest rates. People then said there was no way they wanted the Government to buy another oil company in this manner. It did not do anything for us. It did not create any jobs, find any more oil, or add to the production levels of oil in the country. All it did was to take over something that was in place. The Government has gotten that message clearly. The Minister of Finance (Mr. Lalonde) indicated that the Government is going to use that Canadian ownership charge to help Canada reach oil self sufficiency. That could mean anything. We will have to wait and see.


George Harris Hees: Mr. Speaker, in 1980 the federal Government introduced the Canadian ownership charge on gasoline at the pumps for the purpose of raising the money needed to pay for the takeover of Petrofina, which then became Petro-Canada. Nine months ago the takeover was completed. The four cents a gallon which had been added to the price of gasoline at the pumps to finance the takeover was no longer justified and should have been cancelled. The Government did not cancel the ownership charge. It continued to collect S65 million a month from Canadian car and truck owners, for a total of S600 million today. If this money had been left in the hands of the car and truck owners, it would have greatly increased retail sales in this country and many thousands of Canadian workers would have ceased to be unemployed. They would have had jobs producing the extra products which the additional $600 million would have financed.
If the money had been used to reduce the cost of gasoline at the pumps, it would have made Canada a far more attractive place for tourists to visit. Eighty-five per cent of our dollars from foreign tourists comes from Americans visiting Canada. Of these, 74 per cent travel by automobile. Tourism Canada has identified that the growth in Canada's travel trade deficit is directly attributed to the decline of automotive travel from the United States.
In a brief prepared for the Minister of Finance (Mr. Lalonde) by the Canadian Automobile Association this month, figures supplied by Tourism Canada were documented which clearly should be given careful consideration. They report that had Canada maintained the share of the world tourism pie in 1981 which it had enjoyed 10 years previously, Canada would have enjoyed the following. First, an additional $2.2 billion Canadian in receipts; second, 154,000 new jobs created; third, the elimination of the $1.1 billion travel deficit; fourth, the realization of personal income of $3.9 billion; fifth, the collection of an additional $1 billion in taxes; and sixth, $350 billion more in potential reinvestment income would have been available.
It is essential, Mr. Speaker, that immediate action to increase automobile tourism be taken to ensure positive economic recovery for Canada. No matter what legislation is before the House in Bill C-14, the fact remains that in taxation the Government has received an amount of $600 million without a specified purpose.
I have a suggestion to make to the Government regarding where this $600 million should be spent. There is a very important group of people in this country who are in dire financial straits and to whom the Government has a very direct responsibility. These are the people who were born without benefit of maternity grants and grew up without child care allowances. They were fed, clothed and educated without benefit of government grants. They were doctored without health care.
These Canadians have probably contributed more to Canada through minor and two great wars, in peace, and in the 1929 Depression, than any other Canadians in the history of our country. They were not the cause of inflation, nor are they responsible for the national debt. They are the victims. They are no longer able to speak forcefully for themselves and few speak for them. Their below-the-poverty-line incomes are the most vulnerable and first in the line of attack in hard times.
Many of these people retired before 1966 when the Canada Pension Plan was introduced and therefore have no entitlement to either the Canada Pension now or death benefits later. I have written to the Minister of National Health and Welfare (Miss Begin) repeatedly about the needs of elderly constituents, many of whom are existing on sums which are clearly inadequate for their needs. The Minister replied to me on October 6, 1983 and said:
Since single guaranteed income supplement recipients are not yet guaranteed an income adequate to meet their basic needs, the Government intends to increase their benefits as soon as resources permit.
The Government promised to help this particular group of Canadians in the Throne Speech of December 7. In the speech it said:
Legislation will be introduced to increase the supplement for single pensioners providing additional assistance to more than 700,000 Canadians.
It is now almost two months since the Throne Speech, Mr. Speaker. Other legislation has been brought forward but the Government obviously lacks the commitment to these elderly people to produce the required legislation on a priority basis.
What does the Minister mean when she says "when resources permit"? Sixty-five million dollars a month has been coming to the Government for the past nine months with no identified purpose, for a total of $600 million in the Government's cash box. This $600 million should be immediately used for the purpose of bringing the guaranteed income of these needy senior citizens up to and preferably above the poverty level as defined by the National Council on Welfare. The Minister should bring in legislation on a priority basis, as she has promised to do so often and which was again promised in the Throne Speech, so that increases can continue after the fund runs out.
This completely unauthorized tax should be discontinued immediately so that the four cents per gallon can remain in the pockets of car and truck drivers, where it so rightfully belongs. This $65 million in circulation each month will greatly
February 8, 1984

increase retail sales and create the favourable setting for many thousands of new jobs. With the high unemployment in Canada today, a reduction in the price of gasoline will go a long way to help Canada get moving again.


Mr.   Gimai@: Mr. Speaker, what does the Hon. Member think about some provincial policies on sales tax on fuel, especially in Quebec and Ontario? In Quebec the sales tax at the pump is 30 per cent and I believe it is a 20 per cent sales tax at the pump in Ontario. 1 am interested in knowing the Hon. Member's opinion about those provincial taxes.
What is the effect of those taxes on the senior citizens of this country who, as the Hon. Member said, are the most affected by those taxes and the high price of some energy sources, especially when those taxes are not particularly meant to help the country become self-sufficient in oil and gas but are meant to bring more money to provincial government assets?


George Harris Hees: Mr. Speaker, as the Hon. Member knows, taxes have to be raised to pay for the many things that Canadians need in the various provinces of Canada. The provincial governments have used taxes on gasoline and oil to help raise the money that all of us very gladly use. In 1980 this four cents a gallon tax was passed by the House. The Opposition agreed to it. As long as it was being used for the purpose for which it was specified, to pay for the takeover of Petrofina, nobody objected.
The Hon. Member must realize that for the last nine months there has been no justification for the continuation of this tax. There has been $600 million taken from the pockets of Canadian car and truck owners that should have remained in their pockets, because the tax was not justified once the purpose for which it had been passed had been eliminated. That is the sum and substance of the argument. We have no objection to proper taxes being raised provincially or federally to pay for useful things. But when the purpose for which the tax was passed by Parliament has expired, there is no justification for that tax to be continued and it should be eliminated.
What I have said is that the $600 million that has been collected by the Government could have been used to increase the pensions which desperately need to be raised for pensioners. That would have been a good and justifiable cause at that time. That is why I have asked for this $600 million to be used in that way.


Mr. Gimaiel:: If I understood the Hon. Member correctly, he is saying that this tax would disappear because it is no longer useful for the purpose for which it was passed because the Government has bought Petrofina. At the same time, I understand that provincial taxes-


Arnold John Malone: That is their business.


Pierre J.J. Georges Adelard Gimaïel: I am not speaking about royalties; I am saying that the sales tax that some provinces, Ontario for example, have on gasoline are not humane taxes. They are taxes which create inflation and increase the cost of everything that must be transported throughout the country. They increase the cost
Petroleum and Gas
of production throughout the country. It is a tax that affects all senior citizens and their needs, especially transportation needs. When the Hon. Member says that the special federal tax would be lifted, it would be mean that those provincial taxes would disappear also.
I would be very happy if the Hon. Member would let the Premier of Ontario, for example, know that the Progressive Conservative Party is against energy taxes that are not imposed to help the Government develop energy needs for the country. We would then see those inhumane taxes, especially provincial sales taxes, disappear from the country because they are very inflationary and inhumane.


George Harris Hees: Mr. Speaker, the Hon. Member is being rather tiresome and obtuse. Taxes are raised by provincial and federal governments for certain specific purposes. Tax proposals come before legislatures and are debated. If they are passed by the majorities of those legislatures they become law and the taxes are levied.
I have no objection to that legislative process going on. It is up to the legislatures provincially and the Parliament of Canada federally to decide whether or not certain taxes are justified and should be levied. As I say, this tax was passed by the House. I do not claim for a moment that we in the Opposition were in favour of this tax. As I remember four years ago, we opposed it. I said that the Parliament of Canada voted in the majority to pass this tax and make it legal. When the majority of Parliament votes for something, that is the law.
That tax was justified for one specific purpose, to buy Petrofina. Once Petrofina was bought there was no more justification for that tax being levied and it should have been cancelled. It is as simple as that.


Mr.   Gimai@: I understand, then, that the Hon. Member and his Party agree with the fact that the provincial governments can impose provincial sales tax on gasoline. That is my question. Does his Party agree with provincial sales taxes on gasoline?


George Harris Hees: Mr. Speaker, I am saying to this very obtuse Member that if a provincial legislature passes by a majority vote a law that a certain tax shall be raised in a certain way and spent in a certain way, that is exactly what is done.


Pierre J.J. Georges Adelard Gimaïel: Do you agree?


George Harris Hees: I hope I have spoken clearly and simply. I have stated it as clearly and simply as I can. I hope the Hon. Member understands the process.


Douglas Glenn Fisher: You are evading the point.


Raymond John Skelly: Mr. Speaker, in light of the contribution made by the previous speaker, would he be in a position to elaborate somewhat on the price of fuel from the point of view of competition? It is very difficult to extract any constructive comments from other members of his Party. With the Hon. Member's long experience, and I would say the tremendous contribution he has made, would he venture into making some

February 8, 1984
Petroleum and Gas
comments on his Party's position on competition as a mechanism for setting price in the petroleum industry, particularly on his Party's position on competition legislation that would be designed to protect the smaller players in the industry against predatory practices by the larger players?


George Harris Hees: Mr. Speaker, I am first, last and all the time a free enterpriser. I do not see any better way of setting prices on any commodity than by the free play of the marketplace. If the price of gasoline is set by competition, in my experience, as in my experience with the price of any commodity, if there is free, wide open, unhindered competition in the marketplace, the public gets the best break possible and gets the lowest price possible. All of those competing for the business bring down the price as low as they can to stay in business and enable them to keep supplying the consumer.


The Acting Speaker (Mr. Guilbault):: Order, please. This puts an end to the question period. The Hon. Member for Vancouver-Kingsway (Mr. Waddell).


Mr. Ian Waddell (Vancouver-Kingsway):: Mr. Speaker, if we had had more time to ask a question of the last Member, I might have asked him the following question, which I ask him rhetorically. The Hon. Member said that he is in favour of the free market for the price of gasoline. Does he consider the OPEC oil cartel a free market? The OPEC cartel were setting the prices. I am sorry the Hon. Member is leaving the House.


George Harris Hees: I have no alternative. I am more and more bored every minute.


The Acting Speaker (Mr. Guilbault):: Order, please. May I ask Hon. Members to respect decorum. A Member just passed between the Chair and the Member who has the floor. That Member is outside the chamber now. This situation should not be tolerated.


Ian Gardiner Waddell: Perhaps the Hon. Member is relying on his senility and not his ability.


Some Hon. Members:: Order.


Douglas Glenn Fisher: That is pretty juvenile.


Arnold John Malone: He just passed in front of the Member for Vancouver-Kingsway (Mr. Waddell), that is all.


Ian Gardiner Waddell: Mr. Speaker, I just began to speak-


John Leslie Evans: Withdraw.


Arnold John Malone: To prove you are senile.


Ian Gardiner Waddell: The Hon. Member surely has not had a chance yet to hear anything I have said. I raised a question that pertained to the whole nature of politics in Canada in the last five years. The Conservative Government lost the 1980 election on the whole issue of oil pricing. It was precisely because of the rather ill-informed remark of the last Member
who spoke, who I think should know better because he has been around this House for a long time, that Canadians were not prepared to accept the notion of a free market in oil.
If the House bears with me, I will tell you why, Mr. Speaker. The Clark Government fell over a budget that basically had as one of its central pieces the notion of very steep rises in the price of gasoline.


Arnold John Malone: Eighteen cents.


Ian Gardiner Waddell: The acceptance of this by the Conservative Party was dictated at the time by an Alberta caucus which wanted-and the Alberta people were pushing their own interests which is exactly what they should do-world price for oil. The Canadian people had difficulty seeing that. The reason for that difficulty was that they saw the same oil which had been $3 a barrel in 1970 was suddenly $28 a barrel. To people it was the same oil and to them the resources were not the resources of the oil companies or even the resources of one province or one part of the country; they were resources belonging to all Canada. Thus the Canadian people could not see why the price should go up so steeply to world price which the Conservative Member who spoke before me just advocated; he said that there would be world price for oil.
In effect, that is what a lot of the politics in this country have hinged upon in the last five or six years. Canadians saw that was an artificial price, fixed basically by the Arab countries, the oil exporting countries. Our producers wanted to go along with that because they would get windfalls from it. Governments would get windfalls in their taxes. The federal Government, of course, wanted the windfall as well. This is where, if I might say so, the Clark Government was very weak and was unable to deal with the provincial Premiers, one in Alberta pulling one way and one in Ontario pulling the other. I think that is one reason, when history is written, why that Government fell.


Arnold John Malone: Tell us about Laxer.


Ian Gardiner Waddell: The Hon. Member says "tell us about Laxer". I am going to deal with Laxer in a minute and, indeed, I will tell him about Laxer.
This Bill-and I want to tie in what I have said with this Bill-reduces the effective rate of tax at the wellhead from 12 per cent to 11 per cent. This is what the PGRT, the petroleum and gas revenue tax amendments, does. It is easy for all these people in the oil and energy industry to throw around these terms, but for the average Canadian it is helpful to think that what we have is basically a pie. That pie is our oil and our gas resources in this country, and we have to split up that pie. That is what all the fights between the provinces and the federal Government have been about. That is what the National Energy Program-


The Acting Speaker (Mr. Guilbault):: I am just making a remark once again. I will make it in French this time.
February 8, 1984



An Hon. Member has just passed once again between the Chair and the Hon. Member who has the floor. If he does it once more, I shall call the name of his riding.


Arnold John Malone: Ha, ha, just been named!


Some Hon. Members:: Oh, oh!


Ian Gardiner Waddell: Mr. Speaker, it is impossible to speak in this House. There is talk going on. There is no one interested. I want to make a contribution to this debate. I was energy critic for my party for years. I think I know a little bit about this area. I would ask Members to bear with me and to let me continue.
As 1 was saying, there is the question of a pie and how to split up that pie. That is what the National Energy Program is about, that and Canadianizing the industry. That is what the fights with Alberta, Saskatchewan and British Columbia are all about. That is what the 1980 election was about. We have forgotten about that so soon, but that really is what we are dealing with.
This Bill is very interesting. It gives more money to the oil industry. The industry says that it wants to improve its cash flow at a time when its profits have gone up 38 per cent over the last year. The industry always says it wants to improve its cash flow. We would all like to improve our cash flow. It means getting more money in your pocket. The industry always uses that phrase.
Let us go back to 1970, Mr. Speaker, and I will tell you why we in the New Democratic Party look at this, hear the industry saying it wants to improve its cash flow and know what that really means. In the early 1970s the president of Imperial Oil and other oil companies said: "There is lots of oil in Canada; we need to export the oil to the United States to improve our cash flow.


Arnold John Malone: They are right.


Ian Gardiner Waddell: They exported over half of our conventional petroleum reserves.


Arnold John Malone: Hear, hear!


Ian Gardiner Waddell: The Hon. Member says hear, hear. They exported it at a price of about S3 a barrel. Then what happened? A Minister was misled. He got up in the House of Commons and said we have enough oil for 300 years and enough natural gas for 900.


Arnold John Malone: We have and we still have.


Ian Gardiner Waddell: The fact was that we exported our cheap conventional oil until the oil companies stood up again, after the first OPEC oil price shock in 1973, and said: "We cannot export. We do not have any more resources. We are really
Petroleum and Gas
running out. We will run out in eight years". The fact is that we are running out of conventional oil resources in Canada.


Arnold John Malone: That is the point, not the first one.


Ian Gardiner Waddell: The Hon. Member will get his chance in a minute.


Arnold John Malone: You bet.


Ian Gardiner Waddell: He should not use his open microphone to heckle my speech. It is not fair. He will get his chance. This is very important. What happened-


Arnold John Malone: And false.


Ian Gardiner Waddell: Mr. Speaker, I do not do this to him when he is speaking. It is pretty easy to heckle into an open microphone.


Mr. Parent:: Mr. Speaker, I rise on a point of order. In all fairness to all Hon. Members who are present in the House, I think we should hear what the Hon. Member of the New Democratic Party has to say, although I do not agree with what he is saying. I suggest with all respect that if the microphone to his right is bothering him, Mr. Speaker, you should order it shut off so that I can hear what he has to say.


The Acting Speaker (Mr. Guilbault):: I ask the operator to do so.


An Hon. Member:: It cannot be done.


The Acting Speaker (Mr. Guilbault):: I believe each Member who has the floor is entitled to speak and have calm so that he can be listened to, even if those who listen do not agree. I ask everyone to listen to the Hon. Member, if not religiously, at least politely.


Ian Gardiner Waddell: I thank the Hon. Member opposite. I will try to come to the point a little more quickly. The fact is that we had a tremendous oil price increase in the early 1970s. It began the round of inflation which we suffered. That, plus the further increase in 1978, killed the western economies. That is why there has been so much trouble. That is why there have been questions day after day about high unemployment rates, high inflation rates and so on. That was the beginning of our problems.
For our part in Canada, it was compounded because we were running out of cheap conventional oil.


Arnold John Malone: Right.


Ian Gardiner Waddell: We had listened to the companies which had told us that we had lots.


Arnold John Malone: No.


Ian Gardiner Waddell: Suddenly we were importing oil and it was costing Canadian taxpayers billions of dollars to import oil in the last few years. Now we are on a much more even keel, but we were importing oil. That has raised the deficit of the

February 8, 1984
Petroleum and Gas
federal Government, which is another problem. When the oil companies say "Help our cash flow", we know what will happen. There is a pattern in Canada. The pattern is that they say we have to export-and this is what is happening with natural gas-and that they need to increase their cash flow. Then the Government allows them to export, they make money, and then they come back and say: "We do not have enough resources. We need more money to find resources". Then they are given more breaks, more cash flow, with which to find resources. They find the resources and they say: "Now we have the resources, we have to export them".


Arnold John Malone: Tell us about the NEP.


Ian Gardiner Waddell: Tommy Douglas once said that Canadians were fools to get saddled with an energy shortage in oil and that we were double fools to have a gas shortage in the future.
I want to say what is wrong with the NEP, and I will mention John Laxer as well. My friend wishes me to do that. The problem with the NEP is that it was flawed in a number of ways, one of which we are dealing with in this Bill, The PGRT. It was a difficult task for small oil companies and so on. It was flawed because it shifted exploration with all the tax breaks from Alberta and in the western sedimentary basin in Saskatchewan, where it really should be, to the Beaufort Sea and offshore. It did that because it was a power struggle. It was the federal Government trying to get power in areas which it controlled-the north and offshore. It does not have power in Saskatchewan, Alberta and British Columbia. Part of it was a power struggle.
I spoke out against the NEP and Jim Laxer said that I should have supported it. The NEP was flawed because a good energy policy should have focused on developing the resources of Alberta, Saskatchewan and British Columbia. I believe even my friend to my right will agree with that. He understands that; he is from western Canada. It was flawed because it tried to Canadianize the industry in a very complicated and expensive way by these Petroleum Incentive Program grants. They were going to give away $8 billion from 1982 to 1986 in PIP grants, yet we have trouble obtaining money for post-secondary education and pensions. That was $8 billion to the oil companies to help their cash flow; from 80 cents to 93 cents in some cases, on every dollar.
I say to Jim Laxer and to the House-and I have already said it, as has the Leader of my Party-that we would have done it in a more simple way. We would have spent the money by nationalizing or taking over one of the major oil companies, such as Imperial Oil, and not giving PIP grants. We would have had 50 per cent Canadian ownership by 1990 by doing that alone, and we would have saved money in the process compared with these expensive PIP grants. That was our policy. It was a clear policy. We will stand by that policy anywhere in the country.


Arnold John Malone: You're darned right, 50 per cent taxes.


Ian Gardiner Waddell: We are seeing a retreat from the NEP. That is what we see in this Bill. We predicted a retreat from the
NEP after all the heat came on the Liberals from the industry. It is a powerful industry, aided by Americans who now have a new poodle in Canada. That poodle is called "Brian, Brian Mulroney".


Mr. Taylor:: Mr. Speaker, I rise on a point of order. The Hon. Member has no right to use the man's name. We are always cautioned on that. Why does it not apply to everybody?


The Acting Speaker (Mr. Guilbault):: It should apply to everybody.


Ian Gardiner Waddell: I agree. I will say, then, that the Americans have the Hon. Member for Central Nova (Mr. Mulroney) on a leash and they are taking him out for a walk almost daily, when we listen to his speeches on energy.
As I was saying, we are seeing a retreat from the National Energy Program. We see it in these amendments. Does the Government want higher prices for oil companies? I will tell the House how it can be done. It is simple. We have a regime in which there is a thing called old oil at a controlled price. There is also new oil, which is at world market price or even higher. What does a smart Minister of Energy who wants to acquiese with the oil companies do? All he has to do is call old oil new oil. That is what part of this Bill or part of the taxing statute does. He simply changes the definition of old oil and then it is new oil and it gets world price; or he extends the period, as this section does, for when old oil becomes new oil or when new oil starts to become new oil. It is very simple. That is all he has to do. What we are seeing here is a retreat from the National Energy Program.


Arnold John Malone: Hear, hear!


Ian Gardiner Waddell: The thrust of the National Energy Program was dead right. The thrust is that we have to Canadianize our industry. The Conservatives were wrong there. They just want us to be a colony of the United States. The energy industry is a vital industry. It should be Canadian-owned. It does not have to be totally public-owned. As I said a minute ago, we would have taken Imperial Oil under public ownership. That is true and I gave reasons for it. It is going to be a mixed industry. We have a mixed economy in Canada, but let us not have it controlled by Gulf, Texaco, Imperial, which is Exxon, and the rest of the Seven Sisters. They will not act in the interests of Canada. That has been well documented and well proven. There are instances where they have not acted in the interests of Canada. Energy is a vital commodity. We have to have some control over it. We have to have a National Energy Program. I agree with that, even as a westerner. I agree that the federal Government has a role to play.


Arnold John Malone: You are not a westerner.


Ian Gardiner Waddell: I disagree with the way in which the federal Government is playing the role. I want to say something positive about this Bill.


Arnold John Malone: Good idea.
February 8, 1984


Ian Gardiner Waddell: It is with respect to the role the Government should be playing. I notice the taxes in the Bill exempt investments and enhanced oil recovery from the PGRT. In other words, there are some breaks in terms of enhanced recovery. Enhanced recovery does not simply mean conventional oil. Wells have to be dug deeper. There have to be different methods. They have to go into things which are not tar sands but are heavier oil and so on. As the Hon. Member to my right might point out if he were asked-


Arnold John Malone: Your far right.


Ian Gardiner Waddell: -we have a Saudi Arabia of oil in Canada. It is not necessarily off the coast. It is in the heavier oil deposits along the border between Saskatchewan and Alberta. If we develop that area, as we will some day, we will find plenty of oil. However, it will be costly to develop. Unfortunately, we sold out most of our conventional sources at cheap prices. They are gone. We made that mistake. This other oil will be expensive to develop. That is what we should be doing. To the extent that the amendments to the tax helps the enhanced oil recovery, they are good amendments.
I have spoken on two aspects. I do not know whether I dealt with Mr. Laxer completely. Maybe I can summarize what I said. It would not have been right for the New Democrats to have supported the National Energy Program with those kinds of flaws. I do not believe I have said this before, but during the height of the pricing disagreement, the struggle between Premier Lougheed and the federal Government when Alberta was shutting off the tap and there was the problem of national unity, seeing that my Party represents both western and eastern areas I felt it incumbent upon me to try and work out a policy with respect to pricing.
I went to Edmonton and I also went to the Government of Saskatchewan, which was then an NDP Government. I met and worked with them as well as the NDP leader in Edmonton, Grant Notley. We sat down and negotiated an oil deal. It did not matter in the sense that we did not have power, but it mattered in that we started to understand all the difficulties. I say to Premier Lougheed and to the Minister of Finance (Mr. Lalonde) that it was not easy. It was very difficult for them, having to do the real thing. We tried to negotiate a blended price. The Liberal price was a blended price. I agreed with that.
I will wind up with this, Mr. Speaker. We took this pie and we said that if the provinces want world price for their share, they get world price, and if the federal Government wants less than world price for its share, it gets less than world price. We worked out a price. Unfortunately we never had to apply that price. We tried to work out a deal. That was very important in the interest of national unity.
I say to Mr. Laxer and to others that the New Democratic Party, representing both the east and the west, was together on its energy program. That was politically important. I am pleased that we were when I was energy critic, and we still are.
Petroleum and Gas


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


Ian Gardiner Waddell: May I conclude with one sentence?


An Hon. Member:: No.


The Acting Speaker (Mr. Guilbault):: There is not consent. 1 heard a "no".


Raymond John Skelly: Mr. Speaker, I feel that the presentation by the Hon. Member for Vancouver-Kingsway (Mr. Waddell) was excellent.


Some Hon. Members:: Oh, oh!


John Leslie Evans: Surprise, surprise!


Raymond John Skelly: It was the one important and constructive contribution that has been made in the latter hours of this debate in Parliament.


Arnold John Malone: Mirror, mirror on the wall.


Raymond John Skelly: After delving in detail into the topics that he discussed, does the Hon. Member have any conclusions that he would like to draw from the presentations? Are there any conclusions that he has?


Ian Gardiner Waddell: Mr. Speaker, to be fair to other Members, I will try to conclude in one sentence.


Arnold John Malone: Thanks for the fairness.


Ian Gardiner Waddell: The other day in my community office a student asked me about the PGRT and the National Energy Program. It goes out and out and out. There is so much to discuss that it is difficult to bring it into something that is understandable. I tried to deal with some of the good aspects of this Bill, some of the difficulties with the PGRT, what it means in the context of the National Energy Program, why we needed the National Energy Program, the flaws in the National Energy Program as I see them and the difficulty of getting an oil price deal. It was more difficult than what the Member thought. I should not have criticized the Hon. Member for Northumberland (Mr. Hees) in the way I did. Sometimes one's tongue runs away. The Hon. Member is a senior member of this House. However, neither should he have left before I had anything to say.
What I wanted to say to him in conclusion, and he can read it in Hansard, was that while you can say world price or let the free market fix it, you cannot say that about oil. It is very difficult. That is why we are dealing with a very difficult tax statute here.


Arnold John Malone: Mr. Speaker, had the Hon. Member not said what he did about the Hon. Member for Northumberland (Mr. Hees) at the start, he would have had a full speech without any comment from me. Bearing in mind that he spoke in favour of Canadianization, an objective that I believe is the goal of virtually every Party in this House-


Mr. Ferguson:: You should tell your Leader that.
1206

February 8, 1984
Petroleum and Gas


Arnold John Malone: -as a result of the NEP, can he tell us how many foreign rigs left the Provinces of Alberta and Saskatchewan?


John Leslie Evans: And how many foreign rigs came back into Canada last year?


Ian Gardiner Waddell: Mr. Speaker, there have been numerous speeches given in this House with respect to rigs leaving Canada. I do not have the statistics on the number of foreign rigs, but I can answer in a general way about rigs leaving Canada. Yes, some rigs left and went to the United States. The fact is that some came back. There was a downturn in the industry as OPEC broke up. This bit about rigs going in and rigs going out is a false means of measurement.
I did acknowledge in my speech that I thought the taxes had hurt the Alberta industry and that there was a downturn in Alberta. I said that in Alberta, and that I thought it was wrong. There was heavy taxation at the beginning that really hurt.
1 want to conclude by saying to the Hon. Member that I absolutely disagree with his statement that all Parties agree with Canadianization. He should read the speech of his Leader, the Leader of the Opposition. The Leader of the Opposition is not in favour of Canadianization. He is in favour of Americanization of the oil industry. He is going to open the doors to complete American investment. Once again this will mean up to 70 per cent or 80 per cent control of the industry. That is obvious to me. There is no consensus on Canadianization. The Conservatives do not believe in it. We in the NDP do and 1 have proposed measures where we could reach it very rapidly.


Gerald Augustine Regan: Mr. Speaker, I would like to ask the Hon. Member if he is serious in the opposition that he has expressed to investments in the offshore, investments that have meant so much for the economy of the Provinces of Nova Scotia and Newfoundland. Does he really believe that a policy that merely encouraged continued investment in areas where the reserves had been reasonably defined is adequate, that there should not have been any encouragement for the more expensive search, a necessary search if we are to have reserves for the future in the offshore area? I know that the Conservative Party opposed the grants for the offshore in Nova Scotia. The Leader of the Opposition (Mr. Mulroney) said in Halifax that he was against the grants and therefore in favour of a policy that would shut down oil exploration in the Halifax area. I am rather shocked to find that the NDP also say that it was an error to establish that program for the encouragement of our offshore exploration.


Ian Gardiner Waddell: Mr. Speaker, that is a good question, but the fact is that I did not say that, I said we should develop first the oil in the western sedimentary basin. It is a cheaper oil to develop. We know it is there. It is not an easy matter. Then we have to ensure our energy security in the long run, which means going offshore.
Perhaps I can say this because I have the liberty. The Minister is very rarely smug, but he is a bit smug right now. The Members from Nova Scotia and the Premier of Nova Scotia have been giving a bit of a clap-trap to the people of that area. They promised them this pie in the sky development, these poor people who are dying for industrial growth because they have been so misgoverned for a long time. They promised them this great oil bonanza. They have the people hooked on that. They think it is the greatest. I dare tell a little bit about the truth. Maybe it is not as big a bonanza as that.
The fact is that we have to explore offshore. Let us be fair with the people. It is going to cost money to go to Hibernia. It is cheaper to buy oil in Libya and Nigeria but we cannot rely on those places. We have to develop the offshore but it is going to be expensive and long-term and dangerous. Let us be honest with the people of the Maritimes and not say that we are against the development. I say let us go with the more economic development first and then expand.
It seems to me that the Beaufort Sea is a welfare ripoff for Dome Petroleum. We have not seen one barrel of oil from the Beaufort after all these years. We should go to Hibernia. There is gas in Nova Scotia but I do not think there is oil. There is gas in Hibernia and in the western sedimentary basin and that is where we should go.


Gordon Edward Taylor: Mr. Speaker, I want to take the strongest possible exception to the comment to the effect that the Leader of the Official Opposition (Mr. Mulroney) wants to make an American colony. That remark is unworthy of any Hon. Member in the House. We will become a stronger Canada under our Leader. We will let the Americans come in and invest, but under our rules and our guidance, just as was done in Alberta. We would not have an oil supply today if we had taken that attitude and stopped the Americans from finding oil and gas. Two hundred dry holes were drilled before anything was found. Because it was done under our rules and regulations, Canada is a stronger country. That is what the Hon. Leader of the Opposition will do. He will not make this country an American colony by any means and I strongly object to that type of comment, which is completely untrue.


Ian Gardiner Waddell: May I reply briefly?


The Acting Speaker (Mr. Guilbault):: No, that was not a question. The Hon. Member for Crowfoot (Mr. Malone).


Arnold John Malone: Mr. Speaker, first of all I should like the Hon. Member for Vancouver-Kingsway (Mr. Waddell) to tell us what the price of oil is in Libya. In the spirit of Canadianization, would he also tell us how many service industries in the oil park that went bankrupt as a result of the NEP were foreign and how many were Canadian.


Raymond John Skelly: Mr. Speaker, I have a point of order. I am reluctant to intervene in a question but there is a point on which clarification by the Chair would be useful. For a Member to stand up and make a comment, especially one so
February 8, 1984

provocative and outrageous as that made by the Hon. Member for Bow River (Mr. Taylor)-


Gordon Edward Taylor: It was true, that is why.


Raymond John Skelly: 1 wonder whether a person would be denied the opportunity to respond and set the record straight. Is it the intention of the Chair not to allow Members who have spoken to reply?


The Acting Speaker (Mr. Guilbault):: I think that is not the
question; the question is that the Chair recognizes people as they rise and at the discretion of the Chair. We are now back in debate.


Ian Gardiner Waddell: Mr. Speaker, I rise on a point of order. I know there is a period of time allotted for asking questions and answering them, but I think that if there is a point of order on a procedural matter in that time, the time taken for it should be subtracted from the debating period. It seems to me that I still have the opportunity to answer in a brief way the question raised by the Hon. Member for Crowfoot and the other Member.


The Acting Speaker (Mr. Guilbault):: No, the time for the question period had expired at the moment the Hon. Member for Comox-Powell River (Mr. Skelly) rose on a point of order. The question period is definitely completed. It may be prolonged by unanimous consent if that is the wish of the House. Do I have unanimous consent to prolong the question period?


Some Hon. Members:: No.


The Acting Speaker (Mr. Guilbault):: There is not unanimous consent so we are back in debate. The Hon. Member for Crowfoot (Mr. Malone).


Douglas Glenn Fisher: Mr. Speaker, I rise on a point of order. It is my understanding that we rotate speakers and I thought we had just heard from the Hon. Member for Crowfoot.


John Leslie Evans: We heard all we want to hear.


Arnold John Malone: Mr. Speaker, I heard from the other side of the House that they had heard all they want to hear. If they would like to go for their supper early, that is fine with me.
There is so much that I would like to talk about at the present time, Mr. Speaker, that I almost do not know where to begin.


John Leslie Evans: Try the Bill.


Arnold John Malone: Without defending multinationals of any kind, be it General Motors, General Foods or general oil companies, as an Albertan I should like to give some history of what happened in that province.
First of all, Alberta, along with Saskatchewan, felt that it suffered a tremendous injustice in the early part of the century. It was not a province like other provinces. When every
Petroleum and Gas
other province became a part of Confederation, one fact was known, that the resources belonged to the provinces. As British Columbia, Manitoba and the Atlantic provinces became part of Confederation, they too knew that the resources belonged to them. That was not the case with Saskatchewan and Alberta. For the first 25 years in the history of those provinces, from 1905 to 1930, the bitter fight around the farm kitchen tables was about how they could be like the rest of Canada.
In those days those provinces took in, through taxes, only 30 per cent of what it cost to run the universities, schools and hospitals. The dominion government kept the right of royalty from all the resources. For the first 25 years in the history of those two prairie provinces, they struggled to become equal with the others. It was in the period following 1930 that cap in hand, time after time, they came to the federal Government of Canada, to James Street in Montreal, to Bay Street in Toronto, pleading for money.
The oil sands are not something new. In the late 1700s the trappers who moved through the Northwest Territories knew that oil was seeping into the tarsands. In their journals they wrote about the oil that was leaking through. Yet in the early history of the provinces when oil came to this country from elsewhere, they did not receive a penny from central Canada. They were the poorest of the "have-not" provinces-dirt poor, never able to be out of debt, until the 1940s. Before that they always ran a deficit. Then Imperial Oil came along and found Leduc No. I. That was the first bright day in the history of the Province of Alberta.
Today, the NDP talks about the multinational oil companies, spewing hydrogensulphide out of their mouths as they say it, reeking with what we think of as "H2S" making us believe that these companies are so foul and so wrong. I dare any Member of Parliament or Canadian to go into a supermarket and buy any liquid as cheaply as gasoline. You cannot buy Coca-Cola as cheaply as gasoline, you cannot buy peroxide as cheaply as gasoline and you cannot even buy distilled water for your iron as cheaply as gasoline.
You do not have to drill 80 or 90 dry Coke holes before you get Coca-Cola. You do not have to find a dozen producing Coke holes before you can make Coca-Cola into a Coca-Cola field and you do not have to ship it off to some refinery to crack it, break it down and distribute it to the stations. I am not trying to say that Coca-Cola is just as important as gasoline; I recognize the nonsense of that part of my argument.


Stanley J. Hovdebo: It is also produced by multinationals.


Arnold John Malone: Good morning! I woke up an NDPer so I am okay after all!
The truth of the matter is that there is efficiency in the oil industry. When my friends to my left say that these are foul multinational oil companies, I wonder why they never attack any other multinational industry-the Royal Bank of Canada or the multinational automobile industry. That is because the Leader of the New Democratic Party (Mr. Broadbent) comes

February 8, 1984
Petroleum and Gas
from the home of the multinational automobile industry. But he does not mind attacking the oil industry.
We live in a multinational world, Sir. The greatest exporter of oil supply materials in the world is based in Calgary. We have been exporting technology from the oil industry which is bought in Houston and Denver. There are millions of dollars of Canadian outflow of great technology. However, the New Democratic Party would not want to even live in that multinational world because it thinks that the multinationals only attack us. It is time that we, as Canadians, woke up and realized we had better get into the world of the multinational, because if we do not, they will cut us off and throw us away.
What is it the NDP cower from, that it so fears, that it does not want to get into the world at large? Does that Party think that if we open the doors, that we Canadians are so weak we cannot compete? The truth of the matter is, Sir, that we have some of the best educated people and the greatest volume of resource of any nation of the world. If we cannot compete with the doors open, without all of these protections of nationalizing, my goodness, what a slam that is against the people of Canada.
What is this great nationalization monument which the New Democratic Party would like to throw at us? That Party praises PetroCan. It thinks PetroCan is the greatest thing in the universe. In downtown Calgary the two tallest buildings, Sir, are PetroCan buildings. They are monuments, Sir, to nationalization. They are 500 acres of marble, cut in Finland and polished in Italy. It was shipped to the East Coast of Canada and then shipped by rail to Calgary. The tallest buildings in Canada are now in Calgary. They are tributes to nationalization. We cannot run away from Petro-Can. It does not matter which station we use, which independent, every time that attendant squeezes the pump we are paying tax to build those two buildings. That is a pretty good system.
I am a farmer. I could farm very well if all the Canadian people would just take four cents of the price of every litre of gas-or gallon of gas, I am sorry-and give it to me. It would be very simple to farm, but that is unaccountable and irresponsible. I say thank goodness that Bill C-14 is before the House now because at least it is a recognition that the Government has committed hara-kiri in what it calls the "new energy program".
I would like to say a few words about the advantage of having a strong western Canada because it implies an impact and spinoff to central Canada. There is an unfortunate myth that if we did not nationalize the oil industry, what would happen is that western Canada would become too strong.
I will tell you, Mr. Speaker, that one of the very important pieces of research was done by J. C. Underhill of the Alberta Chamber of Commerce-


Raymond John Skelly: That is the Canadian intelligence service, is it?


Arnold John Malone: The Hon. Member for Comox-Powell River (Mr. Skelly) thinks the chamber of commerce, those small businessmen who produce jobs in the towns and villages in our constituencies, even in his own riding, is the Canadian intelligence service, that there is some underground movement. I can understand why the New Democratic Party would think that.
I would like to say a few words about what the production of oil and gas in western Canada would have meant to central Canada. In the 25-year lifetime of one plant-and I am talking about a tar sands plant-we could expect a cost of some $60 billion to $65 billion to sustaining investment, the majority replacement for wells running into some 20 billions of dollars. If you take the multiplier effect of CPA to that, you would come up with $290 billion working through the Canadian economy, if those tar sands plants which were on stream prior to the last election would have continued to stay on stream.
What that would have meant is an enormous impact on central Canada. First of all, the Canadian debt would not have been nearly so severe. If we take a look at today's situation in light of our tremendous unemployment, the estimated impact of the oil sands plant on the income of Ontario households would be $108 billion. It would do that in the following way: iron and steel production, $800 million; metal fabrication and machinery, $370 million; transportation equipment, $325 million; manufacturing and processing, $740 million; in financing, $370 million; and in trades and services, $750 million. In short, Sir, as the oil industry of western Canada is enhanced, the manufacturing base of Ontario and Quebec is also enhanced.
We have no steel in western Canada. We cannot make our own pipelines. We cannot do the manufacturing and fabrication of products. That is what central Canada does. But whether it is east, north or west, when the regions get richer, the centre gets richer, because we are a country which is interlocked and interdependent one on the other. The truth of the matter is that a great deal of unemployment today all over Canada is a result of the NEP which cut down the potential which was making this country work.
Before the National Energy Program the strongest industry in the whole country was the oil industry. It was the one industry which was the engine which was working. The present Government killed the engine and started the trend of following the NEP, heading over the cliff to the disaster of high unemployment.
The Hon. Member for Vancouver Kingsway (Mr. Waddell) talked about Canadianization. I will give some statistics of May 21, 1980, before the NEP. At that time. Sir, we had in this country operating 324 oil rigs. We had 37 rigs moving. We had 12 rigs rigging and 46 rigs down. The May 18, 1983 statistics show 51 rigs are drilling, 17 rigs are moving and 388 rigs are just sitting around. That is what the National Energy Program did.
We import today, Sir, something like 200 million barrels of oil per day. That is down considerably from the 500 million barrels of about four or five years ago. However, the fact is that when we buy that oil and bring it into Canada, we are a
February 8, 1984

part of the Mexico works program. We are creating employment in other countries. We trade, and naturally we will trade with other countries, I can appreciate that. We have to. However, I do not understand for one moment why, in a country which has a resource, we know the potential is there and the volumes are there, we cannot put in place the infrastructure to feed Canada first from our own feedstocks. But not this Government. It prefers to go to some other country. It prefers to take tax money out of all of our people and send that money off to other countries. It prefers to help build up employment in other countries at the expense of its own because there is some unfortunate mythical east-west fight where the Government could not stand to see the oil industry thrive in western Canada. It could not stand success. It thought somehow if it killed the oil industry, if it nationalized it, somehow it was going to be good for central Canada. The fact is, Sir, that one oil company which used between 500 and 600 half-ton trucks every year bought zero a year ago. Does that not have an impact on Ontario, the automotive centre? Does that not have an impact on Sudbury which mines iron? All of a sudden industries basically collapse and fold. The oil industry was the only successful engine in the whole of the country at the time when this Government brought in the National Energy Program, and that hurt every province, not just western Canada.
I want to speak for a moment about those rigs which moved out of Canada, not only to make the claim that they were Canadian, which they were; not only to say the service industry was Canadian, which it was; but also because I think many people who read Hansard, listen to us on TV, and even Members on the other side, do not really know what we are talking about when we say a "rig". I think they conjure up in their mind this derrick standing there and a few people standing around it.
About 16 trucks are required to move a rig, Mr. Speaker. It is not just the rig; it is the compressors and a whole battery of equipment which go with it. To move a rig from Alberta to Texas costs some $500,000. What happened in Canada? In 1980 there were 324 rigs drilling. In 1983 there were 51. The Government killed the industry.
There was all this talk of self-sufficiency but what did the Government do? It created PetroCan. Do you know what Government Members cannot do, Mr. Speaker? They cannot hold up one quart, cup or even teaspoon of oil that that company ever found. It has not found any oil. All it managed to do was build twin office towers in Calgary, take over other companies to run them as they had been run previously, but it has not found a single drop of oil. The Government has not enhanced the oil industry in this country, it has not made us more self-sufficient. What it did was destroy our economic base. That program alone cannot be blamed for unemployment in this country, but it certainly can be blamed for a large measure of unemployment. It had a very significant impact.
Petroleum and Gas
Had the two tar sands projects gone ahead, Mr. Speaker, as originally intended prior to the re-election of this Government in 1980, the impact on Ontario alone was some $800 million for metal fabrication, $370 million for transportation equipment, $325 million for manufacturing and processing, $740 million for financing, and $370 million for trade and services. The numbers go on and on. The Government tried to destroy not just the oil industry but it tried to destroy western power. This Government believed that somehow there was just too much power out west.
The truth is that we were Canadianizing the oil industry faster before the NEP than we are after. The service industry was Canadian and it has been driven out. The rigs were Canadian and they have been largely driven away. We did not cause the multinationals to go into bankruptcy, just Canadian companies. I dare the Liberals to go into Nisku and give a speech on oil. I dare Liberals to go into Brooks, Alberta and try and defend the NEP. They would come out of the riding on a long pole because the people are bitter and angry. I dare them to go into Coronation, Alberta and defend the NEP. The Liberals hurt those people, put them out of work and made it so that they could not buy the manufactured products of central Canada.
I do not know why they are afraid of a regional person making money because every time that happens he does exactly what you do, Mr. Speaker; he spends it. If he buys a refrigerator and it is Canadian, it is made in central Canada. If he buys carpeting and it is Canadian, it is made in central Canada. If he buys an automobile and it is Canadian, it is made in central Canada. If he buys a toaster and it is Canadian, it is made in central Canada. If you make Prince Edward Island wealthy, you make central Canada that much more wealthy. If you make western Canada wealthy, you make central Canada that much more wealthy. Surely we must come to the point where we quit fighting one with the other and realize that this great country is interdependent; as one gets better, we all get better. We do not need to kill an industry somewhere in the name of preserving power elsewhere. The then Minister of Energy, now the Minister of Finance (Mr. Lalonde), said that we needed the NEP because otherwise Alberta would get rich beyond your wildest imagination. He said that in a speech from the Chateau Lacombe in Edmonton. That should not be the fear because we are all Canadians and we ought to benefit together.


Mr. de Corneille:: Mr. Speaker, I am surprised that the Hon. Member's message is to leave the impression that policies are created in order to pit one region against another. That is a most unfortunate suggestion. One of the things that concerns me about the specifics, although within the context I think it is most shameful to undertake to pit one region against another in that way, is that the Hon. Member has been very selective in his information and his memory. He has not brought to our attention the comparable problem faced by the oil and gas industry in the United States. His selectivity of statistics brings us information about the problems of oil rigs in Canada and that they moved to the States, but how much does he tell

February 8, 1984
Petroleum and Gas
us about what happened to those rigs when they got to the U.S.? How many did not get into operation? The U.S. has had exactly the same problem with a gas bubble, problems with rigs and with an industry suffering very greatly.
Those are my comments, thank you.


Raymond John Skelly: Could the Hon. Member for Crowfoot (Mr. Malone) give us an indication of why his Party is opposed to enhancing Canadianization? He indicated almost total opposition to Canadianizing the industry. Why is his Party against establishing competition in the industry so that Canadian consumers would benefit? He knows that the Seven Sisters, the ones he claims built Canada, will ultimately drive the small entrepreneur out of business. Those people are in a position to make a better deal for consumers. They are really the backbone of the free enterprise system. Why did his Party cause such harm to the industry by supporting the high interest rate policy? I recall the Hon. Member for Etobicoke Centre (Mr. Wilson) saying that they could see no alternatives to high interest rates. We are prepared to admit that probably one of the worst governments this country has seen since
Confederation is this Liberal Government. I am sure the Hon. Member agrees. The only thing that would be worse is the Conservative Government which is likely to follow.
Can the Hon. Member indicate why his Party is against competition, against free enterprise and for high interest rates?


Arnold John Malone: Mr. Speaker, the Hon. Member for Comox-Powell River's imagination is made out of latex. There was so much false innuendo in his comments and questions that they do not deserve an answer from me or anyone else. The public knows very well the history of our two Parties and the Party opposite. We do not need him poking holes in the air with his finger or casting aspersions. I would not lend any credence to such statements because they simply do not deserve it, Sir.


The Acting Speaker (Mr. Guilbault):: It being 6 p.m., the House stands adjourned until tomorrow at 11 a.m. pursuant to Standing Order 2(1).
At 6 p.m., the House adjourned, without question put, pursuant to Standing Order.

Thursday, February 9, 1984