1985-11-19

[Stage Direction]
The House resumed from Monday, November 18, consideration of the motion of Mrs. McDougall that Bill C-82, an Act to amend the Petroleum and Gas Revenue Tax Act and the Income Tax Act, be read the second time and referred to a legislative committee.
Mr. Claude Lanthier (Parliamentary Secretary to Minister of Finance):: Mr. Speaker, I rise to express my support for the motion so admirably presented by my colleague, the Hon. Barbara McDougall, Minister of State (Finance), and 1 share the enthusiasm with which she tabled this Bill.
It is high time the House legislated measures to counter the unfair and paralyzing effects of this regressive petroleum and gas revenue tax which has created considerable, and 1 may say regrettable, economic problems for Western Canada.
If we could turn back the clock, we would be delighted to do so, but we cannot. We do not have that power. We cannot compensate people for lost income nor for the psychological disruption produced in Western Canada. Nor can we resurrect lost business opportunities, but we can, however, create a climate conducive to economic recovery and investment growth.
Mr. Speaker, the purpose of the Bill before the House today is to put the oil and gas industry back on the road to recovery, and to do so, it will make four major changes in the petroleum revenue taxation system.
These changes signify a clear recognition of the failure of this regressive tax introduced by the previous Government. The changes will eliminate the disastrous effects of attempts by the unfortunate previous Government to increase its revenue, in a highly questionable manner, by penalizing an industry and a region in this country that until then had been strong and dynamic.
The proposed changes are as follows:
-Gradually phase out the regressive tax on petroleum revenue by 1989;
-Provide welcome tax deductions for unused exploration and development expenditures;
-Exempt new oil and gas production and new oil and gas installations from the PGRT;
-Reduce cumbersome administrative procedures and accounting costs for thousands of Canadians who receive income from oil and gas wells, by allowing a basic deduction of $10,000;
Finally, eliminate the incremental oil revenue tax, as a stimulus for the successful entrepreneur.
Its confidence restored by the promise made by the Progressive Conservative Party to establish a more equitable tax system, in 1984 the petroleum and gas industry started on its difficult but nonetheless encouraging road to recovery.
Clear signs of this recovery have become increasingly frequent since the former National Energy Program was replaced by the Western Accord on March 28, 1985.
This growing activity is reflected in statistics on the number of active drilling platforms and the increasing number of oil and gas wells that will soon be in production.
During the first quarters of 1985, the utilization rate of petroleum and gas drilling platforms was 64 per cent, which is higher than it was during all four quarters of the last three years.
It is expected that a total of over 11,000 wells will be drilled in 1985, which means an increase of about 26 per cent over the record number reached in 1980, before the industry felt the negative impact of the National Energy Program which subsequently was to have such disastrous effects.
It is indeed a spectacular increase-almost double the number of wells drilled in 1982 at the peak of the disastrous energy program launched by the previous Government.
Unfortunately such statistics may well make some people yawn openly, but they do reflect encouraging employment prospects. These new figures are encouraging as well because industry is banking on the adoption of amendments proposed in this Bill and on incentive measures related to provincial royalties.
Since the memorable Western Accord was signed, many companies have said they intend to boost their investments.

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Among others, Imperial Oil has announced investments of about $1 billion in 1985, not bad by Canadian standards.
Shell Oil recently unveiled capital investment projects of some $500 million for 1985, not to mention the $200 million earmarked for expanding its oil sands processing plant near Peace River, a project which entails over 900 person-years in direct employment and 1,800 person-years in related works. Mr. Speaker, that is the outcome of an election promise which has been honoured after we took office and which was our campaign rallying cry: jobs, jobs, jobs,
Canterra's capital investment budget for western Canada has gone up 34 per cent in 1985.
Nova Corporation will spend some $500 million to expand its natural gas pipeline network.
BP Canada will invest $450 million to beef up its Wolf Lake crude oil development project.
These are all private sector initiatives.
We could go on and on listing the many concrete projects which have been hatched as a result of the renewed confidence of Canadians in their oil and gas industry.
Mr. Speaker, it has become obvious that the oil and gas sector has at last regained confidence and that such brightening prospects have prompted other provincial Governments and private interests to make further investments.
Average Canadians can also be optimistic and confident, and higher consumer spending reflects their buoyant mood.
In the first half of 1985 Alberta consumers spent 10 per cent more than they did during the same period last year.
In British Columbia-a dynamic province which was hard hit by the latest recession-retail sales did rise by 7 per cent in the first seven months of this year as compared with the same period in 1984.
In Saskatchewan, where some of my cousins live, employment growth in the first half of 1985 was much stronger than the national average.
The amendments contained in this Bill will be the starting point of Western Canada's economic revival so that our energy industry as a whole will benefit. The economic fallout will also be felt in a number of other regions and sectors.
As my colleague said yesterday, Mr. Speaker, and as other Members on this side pointed out, this Bill will mark the end of an era of unfair and discriminatory taxes.
I therefore suggest that we give it quick passage to provide a healthy economic climate in the oil and gas industry and at least attempt to help those who have been hit so hard directly and indirectly by the taxes on oil revenues.
Mr. Speaker, I would like to add a very personal note to this nearly official speech and say that the constituency of LaSalle benefits directly from the increased growth of the Western Canada oil industry. Indeed, yesterday, in preparing my intervention for today, I made a survey of some of the industries in my constituency. I can tell you that no fewer than 12 industries will benefit directly from increased orders as the result of the economic recovery in Western Canada.
I believe that it is somewhat inaccurate to say that recovery in Western Canada is concentrated only in that region. In my opinion, our country is truly integrated and it was a real discovery for me to find-and maybe I learned this rather late-that Canada is truly integrated and that the East-West market still exists.
I therefore urge this assembly to give passage to this Bill which will do something to compensate for the misfortunes which have hit one region in our country and affected all Canada.


Mr. Waddell:: Mr. Speaker, I have listened to the Hon. Member for LaSalle (Mr. Lanthier) and I would like to ask him a question. The Hon. Member spoke about new activities by the big oil companies. He spoke about the oil and gas sector. If all this activity is taking place, why do we still have to provide an additional amount of $5.6 billion to the oil industry by agreeing to this Bill?


Claude Lanthier: Mr. Speaker, the Hon. Member seems to be confusing cause and effect. What I have given is a list of the effects of the general resurgence of confidence amongst Canadians since our financial statement of November 1984 and the realistic Budget brought down last May. What we have here are projects not financed by the state, projects which do not exist for nothing, projects which are based, first of all, on our general financial situation and on the fact that our Government has put some order in our financial affairs, and second, on the energy program put forward by our Government. What we are doing today with this Bill is to put in practice the principles which were stated a long time ago. The investments now being announced have not been made yet. These are projected investments to which we have opened the door.
Obviously, if we do not give passage to this Bill, which will put into practice the principles already expounded, the door could close back just as quickly. Indeed, we saw this with the oil and gas policy implemented by the previous Government, supposedly to canadianize the industry. What was canadian-ized was the closing of doors! This was not very progressive. What we want is to canadianize development, and the Hon. Member should not confuse cause and effect. What I have described are the direct results of our new policy, and if we made the mistake of withdrawing this Bill now, the doors would close much more quickly than they opened.
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To use the language of construction, Mr. Speaker, when you throw a bomb on a building, you cannot throw another bomb beside it to rebuild it. Reconstruction takes much longer. It took some time to rebuild confidence in our Canadian economy. We should not now close the doors once more on a Parliamentary whim. I believe that the doors are open and that we must tell the oil and gas industry that it has the support not only of this Government, but of all Canada.


The Acting Speaker (Mr. Paproski):: The Hon. Member for Vancouver-Kingsway (Mr. Waddell) for a supplementary.


Ian Gardiner Waddell: 1 listened to the Hon. Member as well as to the Parliamentary Secretary to the Minister of Energy, Mines and Resources (Mr. McDermid) who spoke yesterday about the record drilling and so on.
I came across a news clipping in my files. It is a Canadian Press story from Calgary. The headline is: "Oil and gas drilling nears record''. It states:
More oil and gas drilling took place in Canada last year than since the record year of 1980, according to figures compiled by the Daily Oil Bulletin.
The publication, whose statistics are considered authoritative by the industry, said its records show 9,031 wells were drilled in Western Canada and on the East Coast and Arctic frontiers in 1984.
The Member talks about the record drilling last year. Why does the Government get so sucked in by the oil industry to give it, up to 1990, $5.6 billion? This is what this Bill does, and it phases out the petroleum gas revenue tax. The industry had just adjusted to the National Energy Program and was back drilling.


Mrs. Sparrow:: That is nonsense.


Ian Gardiner Waddell: Once you have a tax system in place, why give in to the demands of the industry? I remind the Hon. Member that he is not talking about western Canada, there are three western Canadas. There is Manitoba, Saskatchewan and Alberta, and within Saskatchewan and Alberta there is the oil industry and there are the other people, and then there is British Columbia. You are talking about a very small sector that has a lot of economic power and a lot of clout. I just draw that to the Member's attention.
I want to ask two short questions. Does the Minister not acknowledge that the National Energy Program, which he said did nothing, in fact, brought Canadianization from 28 per cent to 47 per cent and made Petro-Canada the largest refiner and retailer in the country?


Some Hon. Members:: Boo!


Ian Gardiner Waddell: I notice Hon. Members are booing that. The Member says oui. He boos it too. Petro-Canada is our company. It is unlike Texaco which is based in New York. If Members want to boo that, fine. Canadians will hold them to it.
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I did not agree with everything in the National Energy Program, but in Quebec it kept the price of gasoline at $28 a barrel when the world price was $37 a barrel. In other words, for three years people in the Member's constituency were getting lower gasoline prices. Why is the ranting against the National Energy Program?

My other question is also for the Hon. Member for LaSalle (Mr. Lanthier). What is now the price of regular yellow gasoline in his own constituency?


Claude Lanthier: Mr. Speaker, I ask the Opposition Members to come back to our Canadian reality. This is 1985. The old 1984 statistics indulged in by the previous Governments which established all kinds of state ownerships and nationalizations are something that belongs to the past. That was rejected by the people of Canada, who support private enterprise. 1 would therefore ask him to please do two things: first, get rid of that old regressive mentality of state ownership and nationalization, and fall into step with the Canada of 1985. His statistics are not up to date, in the first place. And, second, Mr. Speaker, what we have been doing since last November is building up a climate of confidence.
When I am confronted with statistics that prevailed in 1984, well, it should not be forgotten that 1984 was the year we came to power, the year the people of Canada were not merely expecting, but were in the process of making sure there would be changes. And God knows how clear the message has been. Our response was to foster private enterprise in the first place. And to suggest that only a small area was involved in oil and gas development, is totally false. He should have listened to my speech in which I explained that, within the constituency of LaSalle alone, at least twelve industries are directly involved.
Well, Mr. Speaker, I would ask the Opposition members, those socialist bed-fellows from both Opposition parties, to update their statistics, to bring them up to 1985, and to stop singing their old socialist tunes or munching rundown statistics.


Mr. Kindy:: Thank you for recognizing me, Mr. Speaker, because I would not have missed this opportunity to comment on the speech made by the Hon. Member for LaSalle (Mr. Lanthier). I would also like to point out that the Hon. Member for Vancouver-Kingsway (Mr. Waddell) has never understood anything about the oil industry. He is always disparaging the companies. He depreciates them when they make money that provides people with jobs. In my view, he represents a party that would nationalize the whole oil industry. That might make him happy, but then we would not be paying 50c. a litre for gas, but probably $2 because we would be totally inefficient.

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The Acting Speaker (Mr. Paproski):: I am sorry to interrupt but the time has expired for questions and comments. Resuming debate, the Hon. Member for Cape Breton-East Richmond (Mr. Dingwall).


Mr. Dave Dingwall (Cape Breton-East Richmond):: Mr. Speaker, I want to join in this debate with regard to Bill C-82. Much has been said in this Chamber today and on previous occasions. In fact, when one considers this piece of legislation, we have to go back a period of time when many Members were concerned, as I was, with regard to the world situation of oil and gas and the pricing of that commodity. If we go back to the OPEC crisis of 1974 and to the situation with Iran and Iraq in 1978 and 1979, there was a clear obligation on the part of the Government of the day to come up with a policy to encompass the goals now contained in the National Energy Program. I think many Members on all sides of the House were perhaps in agreement with those goals but differed, and differed greatly, with the way in which the goals were to be achieved.
Looking back to 1979 and at the Government of the day, we had distinguished Ministers of Fitness and Amateur Sport and other individuals who served in different capacities in the House. An attempt was made by the Government of the day to conclude a pricing agreement with the western producing provinces. Unfortunately, Mr. Speaker, that agreement was never consummated. There was a lot of talk and suggestions but there was never any clear written arrangement between the national Government, the Government of Canada, and the western producing provinces concerning the price of oil and gas.
We all know what took place in the election and the defeat of the Government. Certain individuals were no longer occupying senior positions in Government, they were elevated, if you will, downward. The National Energy Program was then brought in-


Mr. Siddon:: It was imposed.


David Charles Dingwall: When you try to separate the rhetoric from what actually did take place, you know that there was an obligation on the part of the Government of Canada to proceed with a national oil and gas policy. Unfortunately, government Members today who were in opposition at that time when I was on the Government side of the House debated vigorously, and rightly so, with the way in which the methods of the National Energy Program were to be implemented. Never in the Chamber did they take the opportunity to debate or to question the goals and the objectives of the National Energy Program.


Some Hon. Members:: Oh, oh!


Thomas Edward Siddon: 1 did.


Mr. Mayer:: What a windbag.


David Charles Dingwall: Never, Mr. Speaker. The Conservatives sat like pussycats with regard to the National Energy Program.


Thomas Edward Siddon: Nonsense.


Some Hon. Members:: Never.


David Charles Dingwall: The Minister opposite perhaps was one of the demonstrable pussycats that one would see in the House of Commons. He sat on his hands time and time again-


Thomas Edward Siddon: Rubbish.


David Charles Dingwall: -when it came to the over-call goals and objectives of the National Energy Program.
Let us look at the context in 1980 regarding the National Energy Program. The Government of the day had to react, based upon its election promises, to the world situation which existed at that time. There was a need for Canada to have a national oil and gas policy. I recall with great clarity the huge revenues which were going to the multinational, foreign-con-trolled oil and gas companies. We know about the deficit of the various provinces and indeed of the national Government at that time. There was an obligation on the part of the national Government to come in with a set of policies. I had no difficulty with Hon. Members opposite, as they were then, debating the various measures and how those objectives were to be achieved. I want to make the point that they never disagreed with the goals and objectives of the National Energy Program. It was the view of the Government of the day, in 1980, that with the various megaprojects which could initiated across the country, that particular sector of our economy, which was growing at that time because of world conditions, would be an engine for economic growth in Canada, whether it be in western Canada or in other parts of the country.
Recently John Ferguson indicated in an article that just about everyone who knew anything about energy then had a chart on the wall with a line which looked like a hockey stick, showing prices heading toward $50, $60 and even $80 per barrel. That is what predicated the various taxes on that particular sector of the economy, to which the Minister has made reference. It was the view of the Government of the day, which was not shared by the then Conservative Opposition, that revenues from that particular sector would be taken and distributed throughout Canada for a variety of measures, whether they concerned social issues, promoting or trying to enhance the sagging fishing industry in Atlantic Canada, assisting a conservation program in the Province of Quebec or attempting to assist the Province of Prince Edward Island. By any stretch of the imagination, it has the highest energy costs of any province. That was the purpose. Unfortunately, we know what happened in the international community. World oil prices did not rise to what was anticipated.
Also I recall with great clarity that the Premier of Alberta objected pretty strongly to the ways in which the National Energy Program was to be implemented. However, that was in
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1980, and 11 months later he agreed to what was best as the national energy update and some of the provisions contained in it.
Had prices continued to spiral upward, there would have been enough money to keep everyone happy, including the provinces, the industry and the federal Government. The fact of the matter is that because of international conditions, the world price for oil and gas had a devastating effect upon an energy program. I do not think anyone can dispute that; no one can dispute that.
Let us look at the PGRT and the money transferred by it to the national Government. Perhaps the Minister could indicate at some point in time just how much money will be transferred away from the federal Treasury. What will that add to the already high deficit in Canada? Will it be $1 billion, $2 billion or $3 billion? Some people have indicated that by 1990-91 the transfer away from the federal Treasury will total in excess of S5.5 billion. Will it be $5.5 billion? That is money which could be used by the national Government to create jobs in the Province of British Columbia or perhaps in Atlantic Canada. It could be used to provide a homemaker's pension, which has been advocated by the Government as one of its priorities. It could also be used to provide much needed housing across the country. Perhaps that money-and rightly so-could be spent on our farmers. Because of the devastating economic situation in which they find themselves, they could certainly use significant, additional financial input from the Government of Canada. What about the provision of daycare facilities in a national daycare program? We have heard very little from the Government about that. I would think with an exodus in excess of $5.5 billion away from the federal Treasury, that the issues of housing, daycare, job creation and regional development which have not been a priority of the Government will drop even lower on the list of priorities as a result of moving away from the PGRT.
One argument indicates that the elimination of the PGRT will create all sorts of new jobs and wealth and prop up the oil and gas sector. That argument can be stated. Whether or not it can be proved is another matter. I do not see any strong evidence which would convince me-and I stand to be corrected if other Hon. Members have evidence and information- that it will in any way significantly add to the revenues of the Government of Canada, revenues it would normally have under the PGRT, or create the thousands upon thousands of new jobs to which the Prime Minister (Mr. Mulroney) alluded on numerous occasions.
This particular policy is typical of the Conservative Government. It is typical of its ideology. In fact, many people are confused by the different signals which are coming from the Government. With regard to its energy policies in total, of which the PGRT erlimination is one example, perhaps consideration has to be given to its elimination. However, the Government has eliminated a number of things in the energy sector which will be devastating to other regions. I do not want to suggest to Hon. Members that the West should be against the East or Quebec should be against Ontario. However, what
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I am suggesting is that the leasts prosperous area of the country, using any yardstick in any Department of the Government, is Atlantic Canada. Unfortunately, the energy policies of the Government will add greatly to the economic chaos in that particular region. We have already seen the effect of the elimination of the Petroleum Incentives Program, PIP. We now have fewer rigs drilling in the offshore than we had a year ago. That is not political rhetoric, that is a fact.


Barbara Jane (Bobbie) Sparrow: It is called geology.


David Charles Dingwall: I hear an Hon Member saying that that is geology, that it has to be that way.


Barbara Jane (Bobbie) Sparrow: No.


David Charles Dingwall: There is a role and obligation on the part of the national Government to explore in the frontier regions of the country for quantities of oil and gas and perhaps coal or other resources. To take that away, to eliminate that in its entirety, as I said earlier, will add tremendously to the eco-monic hardships in the offshore. Hon. Members opposite do not like to hear that. They do not like to hear bad news. 1 do not like to tell them bad news.


Mr. Scowen:: Let's face it: You love it!


David Charles Dingwall: The fact is that people who were meaningfully employed offshore in Newfoundland and Nova Scotia are no longer employed. The number of drilling rigs has been substantially reduced. However, what is our policy? It is a policy of smoke and mirrors. The Government has not taken its responsibilities seriously. It has not differentiated between Canadian-owned and foreign-owned companies. It treats everyone equally: small, big; domestic, foreign. I do not agree with that. I think Canadians ought to be given preference in drilling for oil and gas, whether it be in Alberta, British Columbia or off the coast of Nova Scotia or Newfoundland.
What about the 25 per cent Crown share? This was something talked about by the Minister when she was in Opposition. The Premier of Newfoundland and the Premier of Nova Scotia did not raise a great furor over that issue; they agreed with the Government of Canada's back-in provisions. Now the Government intends to eliminate the Crown share in those two provinces, but how are they going to be compensated? Is there any agreement in place? Not at all. The promise is: tomorrow. We cannot put bread on your table but wait until tomorrow and we will see what we might be able to do. Tomorrow. That is not good enough from a national Government elected to protect and enhance the interest of all Canadians, not just a select few involved with the multinational oil companies.
The Government has changed to an auction system which, among other things, defers exploration of less attractive areas. It tends to exclude companies with small financial and technical resources and generally gives Governments little direct control.


Barbara Jane (Bobbie) Sparrow: What about joint ventures?

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David Charles Dingwall: This provision gives preference to the big multinational oil companies. Of course, this is the philosophy that the Conservative Party has been advocating since it came to power. The philosophy is to help those who already have everything and somehow they will create enough wealth to trickle down to the less fortunate regions of this country. I have to say, and I say it sincerely, that 1 disagree with that type of policy. I do not think it is in the best interests of Canada. It is wrong. The national Government has to be an active player in enhancing the economic livelihood and viability of the various communities across the country. To cut the PIP grants and replace them with what is at best a meagre incentive program to explore the offshore is to be totally insensitive to the concerns of my region. We are Canadians too. We have the same rights as anyone else to expect some sensitivity and financial assistance from the national Government. We do not like this caution system which has now been put in place because we believe it to be preferential treatment of the multinationals. The elimination of the 25 per cent Crown share will be devastating to these two Atlantic provinces.
In closing, I want to say that the goals and objectives of the NEP, which I think were agreed to and fully applauded by all Members of Parliament, were indeed goals that Canadians should continue to strive for. Yes, there has to be a toning up of the various tax measures, and a toning down of some. However, I think the NEP was a good program, but it did not work as well as it could have because of international market conditions.


The Acting Speaker (Mr. Paproski):: Questions or
comments?


Thomas Edward Siddon: Mr. Speaker, I would like to make a brief comment in rebuttal to the very interesting perspective which the Hon. Member has placed on the NEP. If one were sitting in Atlantic Canada listening to the Hon. Member, one would have to conclude that all those years of Liberal Government gratuities given to the part of Canada he represents, indeed to all of Canada, should have produced a great increase in employment and a strong surge in our economy. Indeed, if the Liberal approach of liberally taking money from private sector pockets and redistributing it to other parts of the country had worked, we would not have seen unemployment rise from one million people in 1980 to 1.5 million by the time that Government left office in 1984.
We agree that benefits were delivered to provinces and regions such as Cape Breton which the Hon. Member represents. However, if we were to plot on a graph the data regarding the transfer of funds to the Atlantic provinces under Liberal programs and the impact on unemployment and the health of the economy, the level of disposable income and the new economic initiatives by private interests in that region, we would find the results were inversely proportional to the assistance given. That is, the more money we pumped in by way of Liberal Government hand-outs, the more unemployment increased. As the Government in Ottawa mounted a
major war with the Atlantic provinces, particularly Newfoundland, unemployment continued to rise.
The Hon. Member asked us to show what improvements in the economy this Government has brought about in the 14 months it has been in office. Over the last 14 months, more than 300,000 jobs were created, bringing unemployment down to 1.1 million from 1.5 million under the Trudeau regime. That is the evidence that the private sector incentive driven approach is far superior to the Liberal approach of taking money from one region of Canada and handing it out holus-bolus in the form of grants to another region.
This Government does indeed take a new approach. It places the incentives in the hands of those who can take greatest advantage of them. That is the purpose of the $250 million of drilling incentives to be made available annually. This will ensure the pace of offshore drilling in his region, and ensure that the benefits are returned to the people of those regions through the private companies and individuals who will make such investments.
In conclusion, let me say that the Hon. Member tended to mislead this House when he implied that Members sitting on the Government side today did not resist vehemently the Draconian and confiscatory nature of the NEP. If he consults Hansard and the record of the debates on Bill C-48, the Canada Lands Act, if he would consult in particular the record of committee hearings in response to the budgetary measures flowing from the NEP, he would find indeed that members of this Government resisted most vocally not only the goals and objectives of the NEP, but the very divisive and impudent way in which it was foisted upon this country by the Government of which he was a part. I would ask the Hon. Member to clarify for the record that indeed it was the outspoken objection on the part of members of this Party that led to an unprecedented overthrow of a Government and its replacement with one which is devoted to creating a stronger economy and thousands and thousands of new jobs.


David Charles Dingwall: Mr. Speaker, 1 am not going to try to respond to all of the comments made and the innuendo which was tied into them. However, I think it has to be clearly stated that unfortunately, and I say this with great sincerity or, as the Prime Minister would say, with great civility, this Minister has not got one iota or one clue about regional development in Canada. He is so ignorant with regard to the issue of regional development that it is sickenening. It is sickening to have a Minister of the Crown rise in his place to suggest that we in Atlantic Canada can run the economy solely and completely through the private sector. The Premier of Nova Scotia himself has said recently in La Presse that the Atlantic region has been ignored by the Conservative Government and it is now time for the Prime Minister to shift focus away from the private sector.
This Minister has demonstrated beyond comprehension his total inability to understand regional development. I am sure there is no one with any degree of intelligence or intellectual
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ability who would say that the development of regional development policies in Canada or anywhere else in the world is easy. It is not easy.
Yes, the Minister made reference to the fact that there have not been thousands of new jobs created in Atlantic Canada. Let him remember that regional disparities existed some time ago prior to the national policy of the Liberal Party which tried to alleviate some of those disparities. That policy brought untold benefits to those in Atlantic Canada. We do not have the migration out of the province that we once saw under former Governments. We have an educational system which is being torn asunder by this national Government, an educational system which is very important to Atlantic Canadians. We have a health care system in that particular region.
This particular Minister does not understand one iota about regional development policies. I would like him to take the opportunity to rise in his place to dissociate himself from his previous comments. He knows that regional development in Canada is tough business and requires an active, progressive national Government leading the way. It does not require a national Government which abandons the regions as this Government has done, whether it has done so through the Minister's own Department, through the Department of Regional Industrial Expansion, through the Department of Finance or through any other Department. The Minister ought to be ashamed of himself.


Mr. Kilgour:: Mr. Speaker, I would like to ask one question of the Hon. Member. I have never in the six years I have been here seen such a performance in this House of Commons. The Hon. Member has been here for the last five years and he knows that we fought the National Energy Program.
Last week I saw a woman in Edmonton, who may even live in your riding, Mr. Speaker, who was obliged to move out of her house and into her garage with her family because of what the economy and in large part what the National Energy Program had done to her family. Does the Hon. Member seriously believe that Hon. Members on this side of the House had anything but contempt for the National Energy Program? I put it to him that he obviously does have that belief.
Does the Hon. Member know, for example, that oil companies halved their exploration budgets because of the National Energy Program? Does he know that the National Energy Program threw thousands and thousands of people out of work in Alberta, Saskatchewan and British Columbia? Does he know that in Edmonton there are about 69,000 people who are unemployed including my neighbour? Does he realize that these people are unemployed in large measure because of the National Energy Program and the recession which the National Energy Program worsened for Alberta, British Columbia and Saskatchewan?


David Charles Dingwall: Mr. Speaker, unlike the Minister who had spoken previously, I will respond to the Hon. Member's question.


Thomas Edward Siddon: With civility.
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David Charles Dingwall: No one, and particularly no one in this Party, would take great delight in seeing any Canadian unemployed. That is point number one. Point number two is that 1 have said in the Chamber during the National Energy Program debates that I know that Hon. Members opposite, during that period of time, objected vigorously to the way in which the National Energy Program was implemented. There is no question about that.
Is the Hon. Member now saying that the goals of the National Energy Program were not good goals? Is he going to contradict himself? Is he going to contradict his Party by saying that the goals of the National Energy Program were no good and that Canadianization is no longer an important feature of our energy policy? The Hon. Member and all Hon. Members opposite cannot have it both ways. They cannot talk out of both sides of their mouths.


Charles James Mayer: And nobody has tried.


David Charles Dingwall: Why don't you stand up and be counted?


Mr. Lome Nystrom (Yorkton-Melville):: Mr. Speaker, Tory Members are talking about civility, that is one of the favourite words of their leader. I have never seen a leader fall so quickly from public esteem as the Prime Minister of Canada (Mr. Mulroney) has done. Perhaps that is why he hides from the House. Every time he shows up, the Conservative Party drops a point in the Gallup polls. One reason for that, of course, is the kind of Bill that is before us today.
It is almost Christmas and we see a Bill before the House that indicates that the Government is going to play Santa Claus to the big oil companies to the tune of $5.6 billion. That should make members of the Conservative Party from Cape Breton and elsewhere ashamed.
[ Translation]
Mr. Speaker, this is $5.6 billion given away to the large foreign oil corporations in this country, by the Canadian Government. A handout! They are playing Santa Claus to the rich in this country.

We have heard comments made in the House about the National Energy Program and how it just destroyed western Canada. I speak as a western Canadian and I think that some of those sweeping comments are over-generalized. The Hon. Member for Edmonton-Strathcona (Mr. Kilgour) said that in large measure, people are unemployed because of the NEP. 1 do not agree with everything about the NEP, but let us keep things in perspective.
The National Energy Program was brought in at a time when world oil prices were falling and interest rates around the world were skyrocketing. Oil-producing provinces, states and countries, regardless of where they were, were thrown into a massive recession or depression. I think we should keep this kind of debate in perspective. It is not quite as simple as black and white.
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Farm prices are also falling. I would ask Conservative Members across the way, if they are so sanctimonious about what the NEP did, to tell us where the assistance is for the farmers of Canada. The Minister responsible for the Wheat Board (Mr. Mayer) is not responsible for the entire drought package of the federal Government. However, the Government is complaining about the deficit while giving $5.6 billion to the oil companies between now and 1990. What about giving some assistance to drought affected farmers in southern Saskatchewan?
Back on August 6, the Hon. Member for Assiniboia (Mr. Gustafson) was appointed by the Prime Minister, as his Parliamentary Secretary, to come up with recommendations. That Hon. Member did his job. He made a recommendation to the Prime Minister several weeks ago, and yet there has been no assistance whatsoever given to the farmers in the south. I was in Bengough just about a week ago. In fact, it was a week ago this afternoon. Farmers down there are getting damn mad and their Member of Parliament is getting damn nervous. He is getting very nervous because his report and his recommendations are being ignored by Cabinet and by his own Prime Minister. I say to Members of the House that farm prices have also fallen. However, where is assistance from the federal Government?
I think the Bill before the House today is a classic example of the type of discrimination we are seeing in the country by a Government which is biased toward the wealthy and the big companies vis-a-vis poor and ordinary Canadians. There is provision for some $5.6 billion in the Bill, which is a gift to the large oil companies of the country-$5.6 billion. I remind Members of the House that the oil companies in the country are extremely wealthy. 1 will give just a couple of examples of what I mean.
In 1984, just last year, Gulf Oil made a profit of some $308 million. Imperial Oil, which operates in our country, made a profit of some $533 million. Shell Oil made a profit of $158 million, while Texaco made a profit of $423 million. Despite these immense and massive profits, the Government of Canada has its hand in the cookie jar and is handing out $5.6 billion of your money, Mr. Speaker, and of mine and the money of our families, our friends and our constituents to these big oil companies. That is not fair. That is not fair from a Government which preaches that the deficit is too high.
The Government says the deficit is so high that we had better cut back with respect to the kids of Canada by partially deindexing family allowances. Sitting close to me is an Hon. Member and a friend from Calgary who is practically sobbing in his seat. He is a Conservative Member of Parliament who does not agree with his own Government. I know he is itching to get up and say so. The Government cuts back with respect to the kids of the country on the one hand and on the other it shovels tons of money to the big foreign oil companies. I think this is sheer unfairness.


Alex Kindy: I rise on a point of order, Mr. Speaker. I disagree with what my dear friend says.


The Acting Speaker (Mr. Paproski):: I regret but that is not a point of order. The Hon. Member for Yorkton-Melville (Mr. Nystrom) still has the floor.


Charles James Mayer: That is unfortunate.


Lorne Edmund Nystrom: Thank you, Mr. Speaker. I am sure my hon. friend from Calgary will be on his feet soon during the time allotted for questions and comments to make some comments.
I am sure he will reveal that he is a red Tory and that he is progressive. He will reveal that he is concerned about the kids of the country and the fact that their family allowances are being cut back while at the same time billions of dollars are being shovelled out of the money bins to the big oil companies. That is grossly unfair.


Thomas Edward Siddon: Don't be ridiculous.


Lorne Edmund Nystrom: I am not being ridiculous, Mr. Speaker. I ask the Hon. Member to look at the figures. The Bill before the House would give over $5 billion to the oil companies between now and 1990 - over $5 billion.


Thomas Edward Siddon: It does not give them anything.


Lorne Edmund Nystrom: At the same time the Government is saying that the deficit is too high. The Government cuts back on family allowances-


Thomas Edward Siddon: What makes you think it is yours?


Lorne Edmund Nystrom: Mr. Speaker, the Hon. Member says from his seat-he is actually interjecting from his seat-what makes me think that it is ours. The oil of this country is ours.


Thomas Edward Siddon: The money.


Lorne Edmund Nystrom: That is ours. It is our money and our resources as Canadians. 1 would not give these companies a hand-out; I would take more for the people of Canada.


Thomas Edward Siddon: It belongs to the provinces.


Lorne Edmund Nystrom: Mr. Speaker, that is the difference between the New Democratic Party and the Conservative Party, which is one reason we can see Conservative after Conservative in trouble in the West today. Poor Grant Devine in Saskatchewan is shaking in his boots. The Minister of Labour (Mr. McKnight) who ran his campaign at one time is shaking in his boots. In fact, I can hear them rattling from here.


Thomas Edward Siddon: He is laughing.


Lorne Edmund Nystrom: The reason for that is that the Prime Minsiter of Canada, through his unfair policies, is turning off western Canadians and turning them in droves toward the New Democratic Party. If Hon. Members opposite do not believe me then they can check the most recent Gallup poll.


Some Hon. Members:: Oh, oh!
November 19, 1985


Lorne Edmund Nystrom: 1 hope that the Prime Minister of Canada will continue on the same line he is taking month after month because we will soon have NDP Government in Manitoba re-elected with a massive majority. We will see re-elected NDP Governments in Saskatchewan and in British Columbia; and even that bastion, Alberta, will be in a bit of trouble because of the policies of the Prime Minister of Canada.
It is a very simple question of fairness with which we are dealing.


Thomas Edward Siddon: You lack credibility.


Lorne Edmund Nystrom: The Minister across the way says that we lack credibility. What he is doing is making a comment to the people of Canada. Results of a Gallup poll were published just the other day which pointed out that the overwhelming majority of Canadians have no confidence in the federal Government. Only 20-odd per cent of Canadians think the Government is doing a good job while over 40 per cent say it is not doing a good job.


David Kilgour: Look at the way the question was worded.


Lorne Edmund Nystrom: I have never seen a Government lose credibility so quickly in such a short time as did the Government which is in office today. I think it is probably setting a record in that respect. The Prime Minister knows that, which is why he very seldom shows up in the House of Commons.


Some Hon. Members:: Oh, oh!


Mr. McDermid:: His attendance is as good as your Leader's.


Lorne Edmund Nystrom: The Bill before us is a very unfair Bill. Ordinary Canadians should rise up, telephone their Conservative Members of Parliament and ask them why they can give $5.6 billion to the oil companies when there are loggers in northern British Columbia who are unemployed. The people of Canada should be saying to Conservative Members of Parliament: "Why can you give $5.6 billion of our money-our grandmother's and our cousin's money-to the oil companies and yet cut back with respect to the kids of Canada, many of whom are not receiving proper nourishment?"


John Horton McDermid: That is a red herring.


Lorne Edmund Nystrom: This is not a red herring. A conservative Member across the way says that it is a red herring-it is a blue herring. It shows exactly where the Conservative Party stands. It has tons of money for the wealthy and very little for the ordinary citizens of Canada.


Charles James Mayer: If you have nothing to say then why don't you sit down? You are an embarrassment to us all.


Lorne Edmund Nystrom: I say to my friends in the Conservative Party that they are being very unfair. I have friends in the Conservative Party, including the man who is sitting in the Chair. There are a great many people in the Conservative Party who are very ashamed of the Government.
Petroleum and Gas Revenue Tax Act


David Kilgour: Name one.


Lorne Edmund Nystrom: There was a Conservative convention in Toronto last weekend at which a guy named Larry Grossman was elected as Leader of the Party. Hon. Members will have noticed that not one person at the Conservative convention in Toronto once mentioned the name of the Prime Minister of Canada from the podium. That is because that man and his Government are dragging down the Conservative Government's credibility.


John Horton McDermid: I rise on a point of order, Mr. Speaker. I know that the Hon. Member opposite would not want to mislead the House deliberately. I was at the convention to which he referred. I can inform him that the Prime Minister's name was mentioned many times from the podium and that cheers went up every time.


The Acting Speaker (Mr. Paproski):: I would like to remind the Hon. Parliamentary Secretary that he is getting awfully close to the point where he may have to retract one of his statements one of these days. I will leave it at that. The Hon. Member for Yorkton-Melville has the floor.


John Horton McDermid: Why would I have to retract it?


Thomas Edward Siddon: He just stated the truth.


Lorne Edmund Nystrom: Mr. Speaker, I certainly hope that they did mention his name from the podium because every time his name is mentioned the results of the Gallup poll go up for us.
The Bill before us will give $5.6 billion to the oil companies. The deficit is too high. Thus, if $5.6 billion is given to the oil companies, where will the money come from? It will have to be collected from ordinary Canadians-the poverty-stricken farmers in Saskatchewan, the unemployed forestry workers in northern British Columbia, and the poor people from coast to coast. The Government will raise the money by raising the excise tax on gasoline. You will notice, Mr. Speaker, that the tax on gasoline has recently risen. The Government will also raise the money by increasing the federal sales tax, which hits people unfairly because, rich, poor or middle class, the same hidden federal sales tax is paid regardless of income. The Government takes money out of the pockets of ordinary Canadians by increasing income taxes. If the Government is to give companies such as the oil companies which are very wealthy over $5 billion then that money must be raised from the ordinary citizens of the country. That is why the Bill which is before the House is so unfair and why it should be defeated at the second reading stage.
We have heard comments today about PetroCan and state-ism, socialism and so on. I would like to ask those Conservative who make these comments what their reaction is to their own Government expanding PetroCan through the Gulf takeover? It seems to me those Hon. Members are speaking out of both sides of their mouths. On the one hand they are saying it is very bad to have this kind of expansion which was started

November 19, 1985
Petroleum and Gas Revenue Tax Act years ago and, on the other hand, there was a major takeover only a few months ago under the same Conservative Government which sits across the way. Perhaps this is what "Progressive Conservative" means, trying to be all things to all people, although I thought that is what the Liberal Party stands for.
1 would like to hear comments about that from Hon. Members of the Conservative Party when they rise to criticize PetroCan. 1 remember very well the PetroCan debate prior to the 1979 election campaign. 1 remember that the short-term Conservative Prime Minister was going to get rid of PetroCan. One of the reasons he was trounced in the 1980 federal election campaign was that he wanted to get rid of the people's oil company, but the people of this country wanted to keep that oil company. And he was trounced so badly on that issue that within two or three months of the federal election campaign in 1980, he changed his mind and the Conservative Party said: "Yes, we'll keep PetroCan". Now, thank goodness, the Government is expanding PetroCan. There might be some very reactionary dinosaurs in the Conservative Party who would disagree with that, but their Leader and the Cabinet are expanding PetroCan.


An Hon. Member:: Yes.


Lorne Edmund Nystrom: The Hon. Member from Ontario says: "Yes", and he has a frown in his voice and a snarl on his face. I don't think he is too happy with that because he is one of the Hon. Members who said to the people of Canada: "Elect us in the Conservative Party and we'll get rid of PetroCan". Perhaps one reason those Hon. Members are losing so much support from the population, according to the polls, is that they said one thing before the election and they are now doing something else after being elected.
PetroCan is very important. It is important that Petro-Canada stay, be expanded and become the largest oil company operating in this country from coast to coast, and that is what the people want.


David Kilgour: Or the only one?


Lorne Edmund Nystrom: I never said "the only one". I am a very strong supporter of co-oped oil in the city of Regina and the co-operative movement. I would like to see that expanded. I support the small operators as well.


John Horton McDermid: Where should they get their supplies from?


Lorne Edmund Nystrom: One of the small operators was quoted in the newspaper very recently as saying that the policy of the Government was too generous. I have here an article from the Toronto Star dated April 2, 1985. The Hon. Member for Calgary East (Mr. Kindy) would be interested in this article. Perhaps it is about a buddy, I don't know. The article begins, and I quote:
Calgary oilman Joe Mercier couldn't be happier with Canada's new energy deal. But, as a Canadian citizen, he believes Ottawa is giving away too much to his industry.
That is what an oilman from Calgary believes. Perhaps he is a liberal oilman. 1 do not know the fellow at all. I assume he
must be a Tory. Almost every oilman in the City of Calgary is a Tory.


Barbara Jane (Bobbie) Sparrow: No, no.


Lorne Edmund Nystrom: Perhaps he is not. I assume he is not NDP.


Charles James Mayer: That's your trouble. You assume too much.


Lorne Edmund Nystrom: The article continues, and I quote:
"I'm no hypocrite; this deal makes us richer, "Mercier, President of Universal Explorations ('83) Ltd., told the Star yesterday.
"Our bank just informed us that our security (the value of oil and gas in the ground) is up by $8 million as a result of the Western Accord, and our line of credit has been increased by that much.
"But from the point of view of a Canadian, I'm really concerned we're giving away more than we have to."
That is a Calgary oilman speaking about the Western Accord signed by the Minister of Energy, Mines and Resources (Miss Carney) and western governmental officials a few months ago. If an oilman says it is a good deal for him as an oilman but, as a Canadian, it is a bad deal because it gives away the store, then I tend to believe that man. I am sure the Hon. Member for Calgary East will have an interesting comment to make on these statements by Mr. Mercier.
As a westerner, I would like to say that I think Mr. Mercier's point is well taken. We have Conservatives opposite saying that these moves are good for western Canada, but 1 ask, who are they good for in western Canada? I think they are good for a very small interest group in the West, the oilmen and a few people who work around the oil industry. I represent a riding of 70,000 people. I do not have oil wells. I do not have an oil patch in my riding. But I have thousands of farmers who must pay a higher price for gasoline because of the Conservative Government. There are thousands of farmers in my riding who must pay a greater amount of their revenue just to keep their farms going because the Conservative Party is giving billions of dollars to the oil industry. There are also thousands of consumers, including older women who are widowed and have retired to the towns and villages across my riding, who have to pay more for heating their homes because the Conservative Party is raising revenue for oil companies by raising the excise tax. There are thousands of workers in my riding, which is a rural riding, who must travel mile after mile to get to work, who now have to pay more to put gasoline in their cars and pick-up trucks because the Conservative Party is being Santa Claus to the big oil companies outside of this country.
As a westerner I can assure Hon. Members that the majority of westerners do not agree with this Bill. The majority of westerners are interested in jobs. Westerners are trying to produce food, but this Bill increases their costs. This Bill makes it more difficult for them to produce on a day-by-day basis.
I do not want to listen to these red herrings that this is a great Bill for western Canada. Mr. Mercier is right. It is a great Bill for oilmen and wealthy oil producers, but it is not a great Bill for western farmers. It is not a great Bill for the
November 19, 1985

farmer in Bengough who is suffering from a drought and it is not a great Bill for the kids of this country who, as a result of this Bill, are getting their family allowance cut back by a callous government.
This Bill is unfair. It is unjust. It is not proper. It tells us exactly where the Conservative Party of Canada stands. We have $5.6 billion for the oil companies, a huge deficit and cut-backs for kids and that Party tried to cut back on pensions for senior citizens, the pioneers of this country. We face tax increases. The old fellow in my riding who has to drive his car from his farm into town to buy his groceries has to pay more for gas because the Government has raised the excise tax on gasoline. Those people will not forget. Those people are receiving a very good education about what the Conservative Party stands for. it is no different in 1985 than it was under R. B. Bennett in 1935 during the Great Depression.


Thomas Edward Siddon: Look at the employment figures.


Lorne Edmund Nystrom: That is one reason we are seeing such a massive turnabout in public opinion. We have never seen a Government which was elected with such a massive majority fall as fast as this Government. I would love to see some by-elections right now so we can find out whether the people of Canada support this Bill.


Some Hon. Members:: Oh, oh!


The Acting Speaker (Mr. Paproski):: Order. I believe the period for questions and comments is now in order.


Mr. Oberle:: Mr. Speaker, every once in a while we are forced to sit here and listen to this socialist diatribe. The problem with the socialists and their friends in the Liberal Party is that there are too many adults and not enough children who believe in Santa Claus. They believe in the equal distribution of misery, and since they do not have anything, they believe they should have the right to share everything with everybody.
I would like to invite the Hon. Member to visit Fort St. John, British Columbia. There are two main economies in that area, the first is agriculture. It is one of the most productive wheat producing areas in Canada. The second major economy is oil and gas. I understand quite well what the Hon. Member is saying in terms of the crisis and problems experienced by the agri-food sector over the last three years. However, he suggests that somehow the Government can make the weather and can regulate the atmospheric pressures to suit farmers. We have been able to create a climate within which the oil and gas sector can achieve, as an instrument of national purpose, the goals that we have all set for ourselves: energy self-sufficiency, and the greatest component of Canadian-not necessarily government-ownership of the oil and gas sector.
If the Hon. Member were to come to Fort St. John he would find that literally half the city was boarded up after the implementation of the national energy policy. I was up there
Petroleum and Gas Revenue Tax Act and spoke to the Chamber of Commerce the other day. In his introduction, the President said that the Liberals in Ottawa in Question Period are like a bunch of retired prostitutes campaigning against prostitution.
When the Liberals brought in this national energy monster, with the consent and acquiescence of the NDP, we told them that it was a monumental fraud, that it was an outright confiscation of private assets, that it would destroy the energy sector and deprive us of any opportunity to use the strength we have in energy, oil and minerals as an instrument for growth and economic renewal. It deprived us of that. We were net exporters of oil when these socialist schemers, reformers and engineers came along to build their new society. We benefited from the oil crisis at that point. We are now in a situation of having some catching up to do and the Hon. Member will have to let us do it in our own way, a proven way, a way that will produce new wealth, which we can then use to restore and strengthen the social infrastructure and benefit structure which we have put in place in our country.


The Acting Speaker (Mr. Paproski):: Would the Hon. Member for Yorkton-Melville (Mr. Nystrom) like to wait until the Hon. Member for York East (Mr. Redway) has asked his question or made his comment in order that he can answer both at the same time?


Mr. Redway:: Mr. Speaker, 1 was interested in the two main themes of the speech of the Hon. Member for Yorkton-Melville (Mr. Nystrom). The first theme had to do with the question of fairness and the second had to do with the impact that this Bill will have on the ordinary or average Canadian.
With respect to the matter of fairness, I know that the Hon. Member is aware of the impact which the national energy policy and the two taxes that are dealt with in this Bill as a part of it have had on the average Canadian. I know, as well, that, because of his sense of fairness, he feels that the impact of these taxes in the national energy field are just as unfair as I feel they are with respect to the following matters: First, the Petroleum and Gas Revenue Tax had the effect of taxing revenues rather than profits; second, it had the effect of being discriminatory in that there were no similar taxes placed on any other natural resources or any other forms of energy. Third, it was unfair in that it had the impact of effecting double taxation, through the PGRT and through corporate income tax. I know that the Hon. Member is quite aware of this tax and feels that it is unfair.
I also know that the Hon. Member similarly feels that the other aspects of this tax, the incremental oil revenue tax, was unfair in that it only taxes one oil company, namely, Suncor. I know that the Hon. Member realizes that all the taxes which we are doing away with today were unfair. I would like him to confirm that he disagrees with this unfair quality and that he is supportive of this Bill today in that respect.
He talked about the impact which this Bill will have on average Canadians. He knows that the national energy policy and these taxes had a devasting effect on ordinary Canadians in that they put so many people out of work and created so

November 19, 1985
Petroleum and Gas Revenue Tax Act many bankruptcies in the country that, in effect, they made everyone poorer. The recent report relating to poverty in the country clearly demonstrates that fact and the impact that all of these things had on the ordinary and average Canadian.
Since the present Government has done away with the national energy policy and these taxes, which policy is implemented by this Bill, we have had stimulation and growth in the oil and gas industry. We now have something like ten thousand more people directly employed in that area than we had before. Similarly, there has been a spinoff effect for all other parts of the country. The Elon. Member referred to the lumber industry. Obviously, those who work in that industry are gaining a benefit through the spinoff effect. He referred to the farmers who are gaining a benefit due to the spinoff effect as well. He referred, also, to the senior citizens who are gaining a benefit because their pensions will be more secure when more Canadians are working and the economy is growing. I know that the Hon. Member feels that this is a fair Bill and that it will benefit average and ordinary Canadians. 1 would like him to confirm that for us.


Lorne Edmund Nystrom: Mr. Speaker, the Member for Prince George-Peace River (Mr. Oberle) made comments about how things are going in the oil industry and said that there was a proven way, which is through the big multinationals based in the United States. After all, the oil patch is 60 per cent American owned. Mr. Speaker, 1 disagree. I think that what he calls the proven way was a big failure in the country in the pre-1975 and pre-1970 era. That has not been the proven way to produce jobs and good results for Canadian consumers. The proven way is to Canadianize the oil industry by ensuring that it is in the hands of the ordinary people of Canada. That is the way that we want to go and I am sure it is the way that most of the people in the country want to go.
With regard to fairness, the Member for York East (Mr. Redway) mentioned the PGRT. 1 think the PGRT was the most effective way to tax oil companies in the country because that tax was applied on general revenues at the well head. It was effective. The other way of doing it provides the oil companies with all kinds of loopholes. The oil companies have been masters of loopholes in the country. We had an effective tax, and the result of abolishing it will be to give the oil companies an extra $5.6 billion.
Is it fair to give $5.6 billion to the oil companies when the Government is asking the mothers of the country to cut back on expenses for their children through the deindexation of family allowances? Is it fair to give $5.6 billion to the oil companies when taxes are increased on ordinary Canadians through the income tax system? Is it fair, Mr. Speaker, to give the oil companies $5.6 billion while increasing the federal sales tax in Canada? Is it fair, Mr. Speaker, to give $5.6 billion to the oil companies and give nothing at all to the farmers in my province who are suffering from a drought? Mr. Speaker, farmers are hard-working Canadians. The oil patch is 60 per cent American and is already much too wealthy because it makes millions and millions of dollars in profits off the backs of ordinary Canadians.


The Acting Speaker (Mr. Paproski):: The period for questions and comments is terminated. Is the House ready for the question?


Barbara Jane (Bobbie) Sparrow: Mr. Speaker, it is with a considerable degree of relief that I can stand and support Bill C-82, an Act to amend the Petroleum and Gas Revenue Tax Act and the Income Tax Act. One of the most important items announced in the Western Accord last March was the elimination of the federal oil and gas taxes or charges, including the petroleum and gas revenue tax, the petroleum compensation charge and the Canadian ownership special charge together with the incremental oil revenue tax. Following the announcement by the Minister of Finance (Mr. Wilson) in his May Budget, the legislation now before us will formally mark the elimination of both the PGRT and the IORT. No westerner who experienced the devastating effect of the National Energy Program, the most punitive measure of which was this PGRT that was imposed on January 1, 1981 for oil and natural gas production revenues and royalties, can underestimate the value of the steps now being taken in this respect.
Since the Western Accord was announced last March, and on a comparison of 1983 with 1985, drilling is up by 60 per cent, exploration and capital expenditures are up by 50 per cent and direct employment has created an additional 25,000 jobs.
The spinoffs in Alberta alone are significant. Employment in other industries has increased significantly. Retail sales have improved and real estate sales are up, with vacancy rates showing the first decline in some five years.
The current rate of PGRT is 16 per cent, with an effective rate of 12 per cent on conventional oil and gas and 8 per cent on synthetic oil, after the resource allowance, where applicable.
Under the terms of the Western Accord and this legislation, the PGRT will be totally eliminated by January 1, 1989. In addition, the PGRT will not apply to approved major new energy projects or to any new production of conventional oil, natural gas or natural gas liquids brought on stream after April 1, 1985. Under the schedule for phasing out, the rate of PGRT will be cut in half and will be totally eliminated by 1989.
The Government of Canada has agreed to reduce further the burden of PGRT on individuals by making the first $10,000 of income exempt from the tax. This will mean that an estimated two-thirds of those individuals who are currently paying PGRT will no longer be required to do so. The PGRT was perhaps the most bitterly criticized aspect of the National Energy Program. Being levied on revenues rather than profits or even cash flow, this tax was closely related to a federal royalty.
The tax also has been plagued by technical and administrative difficulties. The preceding Government subjected the
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Petroleum and Gas Revenue Tax Act to numerous amendments, many of which were not legislated until a considerable time after coming into effect. This left the industry in limbo. Our Government has stated that the PGRT would be removed and this commitment is being fulfilled.
No PGRT will be levied with respect to new production of oil, natural gas or gas liquids after March 31, 1985. New production has been defined to include production from new wells spudded after March 31, 1985, plus incremental production as a result of enhanced recovery schemes, including waterflood schemes commencing operation after March 31, 1985. New production will include production from new development wells on proven acreage but not production from currently shut-in wells that came on stream after March 31, 1985.
The federal and provincial Governments have agreed that the phase-out of the PGRT is necessary to stimulate reinvestment in Canadian exploration for the development and release of new oil and gas reserves. New exploration and development activity will potentially be rewarded by allowing non-taxable corporations to apply a portion of their newly incurred income tax write-offs, otherwise available as a credit, against their PGRT liability.
The Western Accord has provided the industry with strong incentives to explore and produce, which contrasts strongly with the policies in effect between 1973 and 1984. In general, those policies restricted Canadian resource development through various combinations of low oil prices, high taxes and restricted markets. There was a decline in Canadian spending in 1981 and 1982, in response to the National Energy Program, shut-in gas markets and other factors.
It became more apparent in 1984 that the Canadian energy policy had to be completely overhauled and petroleum industry expenditures came back strongly, in anticipation of this revised policy. It is anticipated that capital and development expenditures during 1985 will be some 20 per cent higher than last year and some 30 per cent higher than in 1983. Drilling activity in this country set an all time record last year, a record which this year's drilling has already surpassed. That 1984 record was based on anticipation that the Conservative Government would come through with its promises, as we have.
Now, with a realistic energy policy, with exploration at high levels and with a number of new oil sands projects under development, the outlook for the next few years is extremely good. While global expenditures are down drastically, expenditures are setting new records in Canada. Global drilling has undergone a decline, especially in the United States, while in Canada drilling is at record levels. Globally, there are surpluses of crude oil and many Third World producers are permitting their production capacity to decline. However, in Canada the industry is spending record amounts on projects and geological prospects which will increase crude oil production capacity over the next many years.
Although Canada has abundant resources, national and provincial energy policies effectively put a damper on their development from the 1970 to 1981-82 era. The policies
Petroleum and Gas Revenue Tax Act during that era included excessive taxation, controlled prices and a great deal of political uncertainty. As a result, crude oil development, particularly during that period, was extremely constrained. However, the situation is greatly different today.
Because of our completely overhauled energy policy, our favourable resource base and our proximity to the United States oil and gas markets, the Canadian sector of the petroleum industry is likely to see continuing high levels of activity throughout the remainder of this decade. The Western Accord swept away artificial elements of Government-controlled and administered economics of the industry's production sector. It ushered in an era which will see further dramatic changes in the way the Canadian upstream sector operates and in the style in which it is managed.
Our Government recognized that the oil and gas industry could provide important national economic opportunities. Our energy resources can be produced and sold at internationally competitive prices. Canada's energy policy during the last decade prevented it from fully capitalizing on the development of its hydrocarbon resources. Governments at both the provincial and federal levels agreed that the federal Government should treat the petroleum industry like other industries, by taxing profits rather than revenues, and everyone applauds the demise of that most discriminatory petroleum and gas revenue tax over the next four years.
The special significance of the elimination of this tax is that it has already greatly improved the economics of oil and gas production. Since it is being eliminated over the next few years, the industry will experience annual improvements to cash flow as the tax burden is eased. With the acceptance of the principles of market pricing and the taxation of profits, the federal-provincial revenue sharing dispute has been settled. Disagreements based upon those particular issues were a major irritant and a source of uncertainty for the industry, and led to a full decade of political acrimony, during which time many opportunities were lost. At least this is all behind us now, Mr. Speaker.
Through the energy accords, this legislation, coupled with the frontier package and gas deregulation initiatives, the Canadian petroleum industry is likely to experience sustained high levels of activity, continuing good earnings and diversification into non-conventional resources. Unless there is a precipitous drop in oil prices, the future of this industry in this country is bright.
Our Government has recognized the dramatic shift in the public's perception of the Government and its policies. We have proclaimed our faith in the strengths and the virtues of the private sector. The current atmosphere is certainly more conducive to some form of rapport than it was even a year ago. We believe in a tripartite consultative process between Government, business and labour so that when public policy is formulated, the affected Parties have had an opportunity to express their views. We have lent an ear to what the business community has to say, and should the labour movement seek

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Petroleum and Gas Revenue Tax Act
the same access, 1 am confident it would meet the same reception. In my view, labour's participation is vital to any meaningful dialogue regarding public policy formulation.
Government ought to and is providing the framework within which the private sector is encouraged to get things done. Implicit in our oil policy is an attitude of trust and confidence in the private sector. We want to facilitate the private sector rather than regulate it. It is up to the private sector, as I said, to get on with the job.
Export of goods and services rose from 16 per cent to 18 per cent of the Gross National Product in the 1950s, to 20 per cent by the late 1960s, and now stands at 26 per cent. In effect, Mr. Speaker, Canada is more heavily dependent on world trade than any other industrialized nation. Yet, with a productivity performance up until now among the worst, we face increasing competition, not only from other industrialized nations but also from developing countries seeking to exploit their resources.
While faced with high-tech and resource competition abroad, Canada at home will have a rapidly aging population over the next 20 years and changing demand patterns that will cause major industrial restructuring and significant shifts in skill requirements in the labour force.
We face the necessity of decision times being reduced, and this means decentralization of decision responsibility to a much greater extent. It means less involvement of Governments in this process, and a greater reliance on the resource allocation properties of markets. A reduction in system rigidities caused by Government regulation and intervention is also a necessity.
Government programs, once in place, tend to be perpetuated and, I believe, a regular cost benefit review is required to ensure that resources available to Governments are being used most effectively.
Canada's budgetary deficits are a cause for overriding public concern, and the actions taken by our Government in restoring buoyancy to the energy industry are a palliative to that concern.
The need for an industrial strategy in Canada is not so much a call for a greater degree of Government involvement in the affairs of specific industries, but rather for a co-ordinated approach to an economic policy involving trade, taxation, competition, labour, research and development, industrial and stabilization policies. We have the policies in place to encourage the development of one of the world's most envied resource endowments.
Canada's geological potential is enormous. The western sedimentary basis, the source of most of Canada's conventional oil, has been drilled only one-tenth as much as similar regions in the United States. Our established resources are dwarfed by the potential of the oil sands, heavy oil and the frontiers.
Foreign investors have recognized the positive changes in Canada. In August, the Salomon Brothers of New York published a report that amounts to a ringing endorsement of Canada's new energy industry. The authors of that report said:
As a result of the overwhelmingly favourable policy changes that have occurred in Canada over the past year, the Canadian energy industry today has the opportunity to meet the challenges of domestic and world markets unfettered by onerous government regulation.
In an interview on Canadian radio, they said that Canada's geology offers great promise for future development and that investment prospects in Canada's oil industry are greater than in the United States, the United Kingdom, Norway and other areas around the world. By our energy policies, we now have access to energy markets. We have the technology to develop conventional and non-conventional sources. Above all, we have a revitalized oil and gas industry operating with confidence in a radically transformed policy environment.
In closing I want to point out that it has been one full year since this country voted overwhelmingly for a change. During the summer, 1984, the Progressive Conservative Party promised economic renewal and promised to create jobs.
Canada's resource sector has long been the bedrock of regional economic strength. In an effort to rebuild that vital sector and create hundreds of thousands of new jobs, the Progressive Conservative Government has been quick to take action. We have had the Atlantic Accord and the Western Accord, and two weeks ago the Minister of Energy, Mines and Resources (Miss Carney) put forth the new terms for the Canada Petroleum Resources Act and the new policy for gas deregulation in Canada. All such steps are welcomed by Canadians from coast to coast. We are now clearly pursuing a path which will lead Canada to greater prosperity. Working together, we can build on the greatness of Canada for today and for the future.


Some Hon. Members:: Hear, hear!


Ian Gardiner Waddell: Mr. Speaker, I have a comment and a short question. I appreciate the speech made by the Chairman of the Standing Committee on Natural Resources and Public Works, the Hon. Member for Calgary South (Mrs. Sparrow). I understand her position in putting forth some of the views that reflect the interests of certain people in her area.
I would like to point out that there is a certain myth inherent in her speech, the myth of competition in the industry. We are dealing with big cartels, like OPEC. We are dealing with some of the largest companies in the world, such as Exxon which owns Imperial Oil, and Texaco. Their interests are not necessarily the interests of Canada. They have their own interests, but they are not necessarily the same as our interests or the interests of ordinary Canadians. We are dealing an important resource, a vital industry and a depleting resource, namely, oil and gas-energy.
The Canadian Government was faced with an oil crisis in 1979. There were tremendous implications for inflation, economic growth and unemployment. The federal Government saw excessive surpluses in Alberta with the Alberta Heritage Trust Fund. It saw there was not enough money in taxes going to the federal share. It was losing money in revenue sharing. It saw gas prices and oil prices rising. Of course, that was the mistake of the national energy policy; the prices went down.
November 19, 1985

However, at that time it thought that the prices would continue to rise. It was faced with a taxation system which was not very good. Oil companies are notorious for using loopholes, tax write-offs and so on. Therefore, in a national energy policy, the Government increased the taxes on the industry, and that is why we have the PGRT.
The industry squealed about that because it was an effective tax. It was almost too effective, and that is why I had criticisms of it. I criticized that tax as hurting smaller Canadian companies and I wanted modifications of the tax. I criticized the National Energy Program for shifting all the exploration away from Calgary and Edmonton or away from the western sedimentary basin into the frontier. That was the basis of my criticisms, and I think they were valid criticisms. I ask Hon. Members-and I am sure the Hon. Member for Calgary South has read it-to read what I think is the best book on this subject. It is entitled The Politics of Energy: The Development and Implementation of the NEP. It is not my book; it was written by G. Bruce Doern and Glen Toner. It summarizes the situation. If Hon. Members read it, they will stop speaking in myths.
According to the polls, the Canadian public liked the thrust, not of that particular National Energy Program, but of some sort of national energy program. It was popular, and it is being continued by the Government in many ways.
How does the Hon. Member feel about her Government expanding Petro-Canada into the retail field and so on with the purchase of Gulf? Surely that is contrary to some of the things she said in her speech. Again it is an attempt to have a national energy program in the sense of expanding Petro-Canada across the country. Did she agree with the Government's expansion of Petro-Canada in this way?


Barbara Jane (Bobbie) Sparrow: Mr. Speaker, I would be glad to take a few hours and discuss Petro-Canada and the take-over with the Hon. Member for Vancouver-Kingsway (Mr. Waddell), but I do not think that it is directly relevant to the Bill we are discussing today.
He mentioned competition, and I strongly believe in competition. I believe in supply and demand as well. We in the Conservative Government, by removing unfair taxation of revenues and treating the oil industry like any other industry, have opened it up to more competition. Canada certainly welcomes foreign investment. Canada is looking for increased economic activity and increased productivity.
The Hon. Member also mentioned Canadian ownership. Certainly my Government believes in Canadian ownership. It has risen by 5 per cent during the past year. We are working toward that.
I spoke a great deal about Alberta and western Canada in my speech, but perhaps I could diversify a little and refer to Fort McMurray. Fort McMurray is perhaps the centre of the Syncrude oil sands area. It has a population of about 35,000 people. Between 7,000 and 8,000 of those people come from
Petroleum and Gas Revenue Tax Act
Newfoundland. I call this wonderful. We are obviously expanding our resource activity in Alberta, but we are also providing jobs for people in other parts of the country. When we start back in the hole, making holes out West, we buy our steel, perhaps from Hamilton. We buy all our whoopees- pick-ups for those people who do not know what a whoopee is-from either Windsor or Oshawa. We buy a lot of our compressors out of Quebec and, yes, we even purchase some of our valves from New Brunswick.
I had the opportunity of visiting Fort McMurray and Cold Lake last spring with a few of my colleagues. I would suggest that some of the other people in the House should expose themselves to what are the oil and gas industry spinoffs. What helps one region can certainly help another. In conclusion, I want to say that it is not just-


Ian Gardiner Waddell: What about Petro-Canada?


Barbara Jane (Bobbie) Sparrow: I will discuss Petro-Canada with the Hon. Member, but it would take two or three hours and it is not relevant to this particular Bill.


Charles James Mayer: Mr. Speaker, I should like to make a brief comment, if I may. For those of us who are in the House and spend some time here, 1 should like to congratulate the Hon. Member for Calgary South (Mrs. Sparrow), who just made her speech, and the Hon. Member for Vancouver-Kingsway (Mr. Waddell), who just asked a question. We do ourselves some service when we have civility and serious debate in the House. It is really unfortunate that people like the Hon. Member for Yorkton-Melville (Mr. Nystrom) and the Hon. Member for Cape Breton-East Richmond (Mr. Dingwall) could not be in the House a little more regularly. We should act as though we are people trying to do the best we can on behalf of the people who sent us here. It is unfortunate for people who choose to watch this kind of debate to see the harangues which occur all too often. When we have a useful discussion, Hon. Members rise, talk about the issue and put some points on the record. They should be commended for the way in which they conducted themselves.


Some Hon. Members:: Hear, hear!


Alex Kindy: Mr. Speaker, I should like to make a comment. I appreciated the speech of the Hon. Member for Calgary South (Mrs. Sparrow). I think she indicated the reality of the situation. The reality is that when the national energy policy was brought in, the prices of oil and gas were rising, contrary to what the Hon. Member for Yorkton-Melville (Mr. Nystrom) said. Once the national energy policy was established, things deteriorated. There was unjust treatment of the oil industry. Whether they are small or large firms, they are working for Canadians. Whether they are foreign-owned or Canadian-owned, they produce goods and services in Canada.
Our Government has given us the opportunity to re-establish confidence in the oil and gas sector, and I am very proud to be part of the Government.

November 19, 1985
Petroleum and Gas Revenue Tax Act


John Horton McDermid: Mr. Speaker, my question is directed to the Hon. Member for Calgary South (Mrs. Sparrow). As 1 understand it, she has been involved in the energy industry. There is a perception across Canada, among those people who do not know the industry, that five or six large companies do all the work. We hear about exploration. I think many people picture Imperial Oil picking up its rigs, heading out and doing exploration work; that just the big companies are involved.
Could she enlighten the people who are watching the debate today, as well as those who will read Hansard, about the myriad of people involved? Who does the exploration, the supplying and that type of thing of this kind of work?


Barbara Jane (Bobbie) Sparrow: Mr. Speaker, I thank my hon. colleague for his question. He is quite right that there is a myth out there that perhaps five or six multinational companies do most of the exploration, development and production.
With regard to conventional oil, most exploration and production is done by small independents. In the frontier areas or on the Canada Lands, most of it is done by major companies; there is no doubt about that. However, we have joint ventures. Oftentimes two or three smaller independent companies will work together in a consortium, put up so much of the working principal and take back some of the funds on a percentage basis. A number of small independents are involved. If I were to quote the figure, I am sure it would be close to 400.
The small independents are really the big workers in western Canada; there is no doubt about that. I am speaking about Saskatchewan, Alberta and into B.C. where we have more gas plays. They lend themselves not only to exploration and production; they are also what I would call the hard community workers in terms of various community operations or even into oil and gas, like 1PAC and CPA. These gentlemen participate in and help oil companies to work together. Independents are by far the biggest explorers in Alberta and Saskatchewan. However, when we get into the frontiers, it is definitely the larger companies, that are involved.


The Acting Speaker (Mr. Paproski):: The period provided for questions and comments is now terminated. I see the Hon. Member for Thunder Bay-Nipigon (Mr. Epp) seeking the floor. Is he prepared to call it one o'clock?


Mr. Epp (Thunder Bay-Nipigon):: Yes, Mr. Speaker, I would like to call it one o'clock and be held over until after three o'clock.


The Acting Speaker (Mr. Paproski):: Yes, the Hon. Member will be recognized then.
It being one o'clock, I do now leave the chair until two o'clock later this day.
At 1 p.m. the House took recess.


[Stage Direction]
AFTER RECESS

The House resumed at 2 p.m.


Hon.   Chas. L. Caccia@Davenport: Mr. Speaker, the lesson we are learning from the St. Clair River is that whatever industry discharges into air, water, and soil eventually becomes a burden to the public purse. What Occidental Chemicals did in the Love Canal has become a threat to health in communities taking drinking water on either side of the Niagara River. Now we learn of Dow Chemical's nine spills into the St. Clair River at Sarnia between January and August, 1985. These consisted of 8.9 million litres of dirty acidic water; 4,400 litres of ethylene glycol; 2,500 kilograms of ethylene dichloride; small amounts of perchloro ethylene, a cancer-causing drycleaning substance; 800 litres of styrene and ethylbenzene; 13,368 litres of propylene oxide derivatives which cause cancers in animals; 41,000 litres of perchloro ethylene. Industry knows what it discharges daily into the environment. The public does not.
The St. Clair River is international water. So is the Niagara River. We have a responsibility to keep them clean because of the 1978 Great Lakes Water Quality Agreement. If industry does not know how to police itself, then Governments must impose stiff controls and penalties. The Canadian Environmental Law Association is right in demanding a judicial inquiry. At the same time the Government of Canada must impose along the St. Clair River stringent controls on daily industrial discharges to protect public health from now on.
If we do our part in implementing the Water Quality Agreement in the St. Clair River, then we will have a stronger voice-


Mr. Speaker:: The Hon. Member's time has expired.



WAR CRIMINALS


Abram Ernest Epp: Mr. Speaker, the concern many Canadians feel about the Royal Commission given Mr. Jules Deschenes to inquire into the presence in Canada of alleged Nazi war criminals has led to the establishment of a parliamentary study group on the Canadian Nazi war criminal inquiry. Media reporting of the activities of this group has, unfortunately, tended to increase rather than allay concern.
Almost two weeks after the members of this group heard a critical treatment of the U.S. Office of Special Investigations which has been pursuing deportation proceedings against alleged war criminals in the U.S., The Globe and Mail reported the meeting and described members of the group as opposed to the commission seeking evidence in the Soviet Union. The
November 19, 1985



[Stage Direction]
Globe and Mail has not yet reported that I, as one member, believe Canadian courts could make proper use of Nazi records and other legitimate evidence to be found in the Soviet Union. Nor has it reported on the presentation that the group heard the next day, November 6, from Professor Irwin Cotier, speaking on behalf of the Canadian Jewish Congress.
Many members of this parliamentary study group are determined to maintain the balance required of Members of Parliament. They wish to inform themselves in anticipation of the Government's receiving the report of the commission. They are also concerned about achieving better understanding among the ethnocultural communities of Canada and think that their activities may contribute to that end.


Mr. Bill Attewell (Don Valley East):: Mr. Speaker, I wish to applaud and endorse the basic thrust and direction of the Marchment committee's report on the mandate and productivity of the Canada Post Corporation. Over the past year 1 have received many complaints from residents of Don Valley East, most of whom are upset about the quality of service. It simply takes too long for a letter to be delivered. Seniors are hard pressed when pension cheques arrive late. Small-business owners are pressed to the wall when delays occur in receiving orders and payments. Most of the people I spoke to were against the decision to increase postal rates a few months ago. They wanted the service to improve first.
Now, at last, we have a set of strong recommendations and sensible objectives. The new standards of delivery for first and second class mail will be welcomed. A letter must be delivered in two days.
There is also a huge public relations job to be done. Most people speak well of individual postal employees they meet. However, they are fed up with the threats of strikes and the below par service. It was encouraging to see that the committee recommends a contingency delivery system in case of a national emergency. The recommendation to reduce absenteeism to normal industrial levels is a must.
While privatization was rejected at this time, I was pleased to see it will be considered in 1990 if service and financial self-sufficiency goals are not met. Most Canadians will welcome the committee's tough-


Mr. Speaker:: I regret to advise the Hon. Member that his time has expired.



COMMISSION'S DECISION TO SECURE EVIDENCE IN SOVIET UNION

Alex Kindy: Mr. Speaker, Justice Jules Deschenes has delivered his decision with regard to the taking of Soviet evidence. This decision falls far short of the expectations of many Canadians.
Presently the Soviet Union is engaged in a war in Afghanistan, a war the Soviet Union began as an invader in 1980. Since that time about 5,000 Soviet soldiers have been killed and an unknown larger number wounded. The Afghans have had their homeland ravaged and five million refugees have fled their homes. They have been uprooted by an invader that has the audacity to claim it was invited. These tactics are not unlike the tactics of Nazi Germany and the Soviet Union during the Second World War. There is no regard for the inviolability of borders, there is no regard for the population, and there is no regard for their own military forces.
It is ironic that the Deschenes Commission feels evidence can be gathered in the Soviet Union, a country with a record on human rights violations that is second to none. It is not inconceivable that five million innocent victims of the war in Afghanistan may some day be accused of war crimes and one can be sure that the Soviet Union will be more than willing to supply evidence against them.



TAXATION


Mr. Alfonso Gagliano (Saint-Leonard-Anjou):: Mr. Speaker, the Conservative Government is considering the possibility of introducing a value-added tax system to replace the federal sales tax. Such a decision would be disastrous for small businesses. The administrative costs would be very heavy, for exemptions would very likely create confusion. A value-added tax system would require 1.4 million new tax licenses and an extension of the bureaucracy.
One of the hundreds of promises which the Conservative Party had made before the September 4, 1984, election was to ease quickly and significantly the burden resulting from overwhelming regulations and red tape.
In Sherbrooke, on July 26, 1984, the Prime Minister stated: "Private sector is the engine of economic growth, and small and medium size businesses are its key elements". Now that he is in power, the same leader is entertaining the notion of setting up a tax system which would betray the promises he had made before the election.

November 19, 1985



AGRICULTURE


Mr. Vic Althouse (Humboldt-Lake Centre):: Mr, Speaker, last Thursday Agriculture Canada officials overruled the recommendations of the Department's study by announcing the privatization of the only cattle and horse blood-typing laboratory in Canada. This action shocked livestock breeders and could cost the industry millions of dollars.
Using the same principles of blood-typing used in human paternity suits, this lab solves disputes involving embryo transfers in cattle and resolves questions of parentage in expensive thoroughbred horses. Clearly, large amounts of money are at stake.
In view of this, and in view of the obvious need for the strict integrity, confidentiality, and continuity well provided by the federal lab, it seems absurd that this important service will be privatized on April 1. What makes it seem even more absurd is that the program did not cost the Government a cent. It was run on a break even basis.
Quite understandably, the breeders are worried and upset. They are concerned about the prospects of higher testing prices as a result of a private monopoly taking over, but they are also concerned about a sudden decline in international confidence in the records of Canadian breeders. On behalf of the cattle and horse breeders of Canada and on behalf of the livestock industry in general, I call for this decision to be rescinded immediately.



WAR CRIMINALS


Mr. William G. Lesick (Edmonton East):: Mr. Speaker, yesterday the Deschenes Commission decided that it would send representatives to the Soviet Union and Poland to obtain evidence on possible war criminals in Canada. In Edmonton,
80,000	Canadians of Ukrainian origin, as well as Canadians of Lithuanian, Latvian, Estonian and other origins are deeply concerned over this decision. This decision leaves me asking a number of questions about the safeguards and conditions requested by the Commission to protect our own citizens. Our primary concern should be to protect Canadians from potential falsified evidence used against them by the Soviet Union.
Can we trust Soviet authorities to respect the independence of our own inquiry? Will they not interfere with our Canadian legal traditions while the Commission is conducting examinations in the Soviet Union? If the Commission is to seek Soviet evidence then it must agree, first, to guarantee in writing that all documents are absolutely genuine; second, evidence heard by witnesses will be obtained according to Canadian law free
from Soviet interference; and, third, interpreters must be Canadian.
We should always be mindful that the Soviet Union has rewritten its own history to fit its own views and philosophy. The Commission should not use any information that cannot be verified through sources and evidence obtained in the democratic and free world. To do otherwise could condemn innocent Canadians.



ENVIRONMENTAL AFFAIRS


Mr. Ken James (Sarnia-Lambton):: Mr. Speaker, 1 am pleased to inform all Members and the Canadian public that the Ministry of the Environment tests of treated water samples at four St. Clair area water treatment plants have shown no detectable dioxins in any form. We are assured that the St. Clair River area drinking water poses no threat to our health.
I would like to applaud the Minister of the Environment (Mr. McMillan) for responding in a most responsible and effective manner. Mobilizing an urgent scientific investigation into the sources of chemicals and directing water samples to be taken every two hours are proof positive that the Government is committed to acting in a professional and positive manner on environmental concerns. The St. Clair River issue has been plagued by many who inaccurately reported the events. Such irresponsible actions have, unfortunately, caused undue stress for many and a possible blight on our community. This should never have happened. The Minister recognized this. He exercised great care to ensure that the reports were completely and professionally reported. The St. Clair River situation is being addressed by four Government agencies spending a total of $8 million over the next two years. Those who have spoken on this issue should make sure that they are bound by the standard practice of data quality assurance. Failure to do so indicates an unseemly haste to condemn an entire area by innuendo, a practice which serves no one.



EQUALITY OR INDEPENDENCE

Mrs. Lucie Pepin (Outremont):: Mr. Speaker, I want to inform one of my colleagues, who was amazed and felt betrayed by the absence of any Canadian symbol and by the presence of an alleged separatist poster at the Quebec Trade Mission in New York. I had a chance to go to New York last week for the Conference of Women Leaders in North America.
I was therefore able to have a look at what the Hon. Member referred to two weeks ago. Contrary to what he
November 19, 1985

suggested, there is no separatist poster in the office of the Mission head, but rather a poster with the slogan "Equality or Independence".
For the benefit of those men and women who are not aware of the meaning, 1 want to emphasize that this is the title of an important report published by the Quebec Council on the Status of Women. That report dealt with the Quebec Government's action strategies for implementing non-sexist policies, policies that would better respect the rights of women. This is indeed one of the most significant reports on feminist policy in Canada.
That therefore is in no way a separatist poster, unless feminists are to be branded as such. Further, 1 would invite him to come and see that poster in my own office here in Ottawa. My honourable colleague had no reason to feel humiliated by the Quebec Government. The next time he sees what to him looks like a separatist poster in French, I will be pleased to translate it for his benefit.



WAR CRIMINALS


Mr. Andrew Witer (Parkdale-High Park):: Mr. Speaker, although Justice Jules Deschenes' decision on the taking of Soviet evidence has outlined several safeguards, it has ignored safeguards which must be in place before any agreement is reached.
Justice Deschenes makes no mention of the right of the accused to be represented by counsel and to receive notice. There is no mention that examination of evidence will be taken on neutral territory where forensic examination and verification of the authenticity of the documents will be guaranteed. There is no mention that witnesses should and would be free to travel to Canada to give their testimony, and that they and their families would be free from retribution after testifying.
Before any travel is undertaken all the conditions must be agreed to in writing, and all the conditions must be maintained. The slightest deviation from the conditions set out should immediately nullify the agreement. There can be no allowance for the taking of evidence by anyone other than Canadian authorities. Justice Deschenes' conclusion that, barring unforeseen circumstances, the evidence be elicited by deputy commissioners leaves the door wide open for Soviet authorities to impede the justice procedure.
The rights of Canadians must be protected, and every guarantee protecting those rights must be in writing. It is not enough to say that the Commission will insist that they be accepted and observed. All the conditions must be accepted in writing and observed, or they will not be worth the paper they are written on.
Oral Questions HOUSE OF COMMONS



PRESENCE IN GALLERY OF NEWFOUNDLAND MINISTER OF THE ENVIRONMENT

Mr. Speaker:: May I advise Hon. Members of the presence in our gallery today of the Hon. John Butt, Minister of the Environment for Newfoundland and Labrador.


Some Hon. Members:: Hear, hear!



ORAL QUESTION PERIOD


Mr. Jacques Guilbault (Saint-Jacques):: Mr. Speaker, 1 would like to direct my question to the Prime Minister who has just entered the House.
Yesterday I asked him whether he could indicate to the House the nature and extent of the federal Government's participation in the Hyundai project, but he declined to answer.
Now that he realizes the growing interest in this matter, and given the fact that his planning and priorities committee met this morning, or so I have been told, is he now in a position to tell the House the nature and extent of the federal Government contribution, and what conditions Hyundai will have to meet to obtain Government assistance?


Right Hon. Brian Mulroney (Prime Minister):: The answer will be given at the proper time, Mr. Speaker, but I can say that, as far as I know, considerations at the provincial and federal levels have been deemed to be objective and quite reasonable under the circumstances.
Last August 27 the federal Government announced that Hyundai had decided to come to Canada, and a research program was begun to find a location satisfactory to the company, and this has been done. There was such a program and I should think that the results are promising for Quebec and Canada as a whole.

November 19, 1985
OraI Questions


INQUIRY WHEN GOVERNMENT WILL GIVE DETAILS ON HYUNDAI PROJECT
Jacques Guilbault: Mr. Speaker, the Prime Minister keeps repeating that he or his Government reached an agreement with Hyundai nearly three months ago, last August 29, yet it would seem that the federal Government has been unable to make a decision on the nature of its own participation in this project. Just how much longer will Canadians have to wait to know where the matter stands? The agreement was concluded over two and a half months ago.


An Hon. Member:: There was no question.


Mr. Speaker:: Questions? The Right Hon. Leader of the Opposition.


REQUEST FOR DETAILS CONCERNING HYUNDAI PROJECT PERTAINING TO CANADIAN CONTENT
Right Hon. John N. Turner (Leader of the Opposition):: Mr. Speaker, my question is directed to the Right Hon. Prime Minister.
Car manufacturers in Canada have always been obliged to provide guarantees they would use made in Canada parts in their assembly plants, before they would be allowed to sell their cars in Canada.
Apparently, the Canadian Government neglected to insist on this kind of guarantee in the case of Hyundai, thus depriving Quebecers of 16,000 jobs-


An Hon. Member:: 1,600 jobs.


John Napier Turner: -I meant 1,600 jobs.
My question is as follows: Why did the federal Government neglect to negotiate a guarantee with Hyundai that the Canadian content rule would be followed as it always has been in Quebec?


Hon. Andre Bissonnette (Minister of State (Small Businesses)):: Mr. Speaker, first of all, the Leader of the Opposition may not have all the facts. Last February, Hyundai announced it would be investing $25 million in Ontario to set up an automobile parts plant. This proves that the company is prepared to manufacture parts in Canada, and 1 can inform the House that the President of the Automobile Parts Association, Mr. Lavelle, was both very interested and very satisfied at the time.


REQUEST FOR CLARIFICATION CONCERNING 1,600 JOBS THAT COULD BE SACRIFICED IN HYUNDAI PROJECT
John Napier Turner: Mr. Speaker, I have a supplementary. Unfortunately, there is no
agreement between the Government of Canada or the Government of Quebec and Hyundai to ensure that the Canadian content rule is followed in manufacturing parts for Canadian automobiles. There is no guarantee, and the Government has therefore sacrificed 1,600 more jobs in this matter.
Would the Minister care to comment?


André Bissonnette: Mr. Speaker, I see the Leader of the Opposition does not have his facts straight and is relying on rumours.
The fact that Hyundai has already started investing $25 million means that the company and the Canadian Government are already communicating and negotiating satisfactorily-
Mr. Speaker, in any case, Hyundai and the Canadian Government have not yet concluded an agreement. We are still at the negotiating stage.


SAFEGUARDING OF JOBS IN QUEBEC-GOVERNMENT POSITION
John Napier Turner: Mr. Speaker, the agreement was even announced by the Government of Quebec as a fait accompli.
My question is still directed to the Minister. If we let Canadians buy more cars containing parts manufactured in Southern Korea instead of here in Canada, this is going to cost us jobs at General Motors in Ste-Therese and elsewhere.
Could the Minister inform the House how he intends to safeguard jobs in Quebec, considering the agreement with Hyundai?


Martin Brian Mulroney: Mr. Speaker, I know that the Liberals, especially the Quebec Liberals and in fact all Quebec Liberals remain silent when 2,000 new jobs are about to be given to this province.
I know you are upset and I know they are upset. 1 know they are upset, because for the first time in 20 years, a major part of the automobile industry is going to be shared fairly across the country, including Quebec.
We are concluding agreements pursuant to our joint agreements with the Government of Quebec, and in view of the absence of the Minister of Regional Industrial Expansion, details will be announced when and as appropriate. I can tell you one thing: Quebecers and Canadians will be very pleased with Hyundai's coming to Canada.


INQUIRY WHY CERTAIN GUARANTEES HAVE NOT BEEN OBTAINED
Mr. Mike Cassidy (Ottawa Centre):: Mr. Speaker, my question is for the Prime Minister. It does not concern the jobs
November 19, 1985

which have been created, but the 1,600 jobs which are indirectly involved and which will not be created without a guarantee from the company to the Government.
Can the Prime Minister explain why the Government did not obtain a guarantee from the Hyundai Company to create indirect employment in the manufacture of automotive parts since this was done in the case of other investments made by automobile companies in Canada? Why has no guarantee been given, according to the administrators of the company itself?


Martin Brian Mulroney: Mr. Speaker, the Hon. Member will see that the conditions for job creation in the case of Hyundai will be at least as interesting as they have been for all other automobile companies in Canada.
Quebec and Canada will benefit from this new high technology industry which will locate in this country.


INQUIRY WHY GOVERNMENT HAS NOT DEMANDED PRECISE GUARANTEES
Michael Morris Cassidy: Mr. Speaker, my supplementary is as follows. No Canadian consumer would purchase a Pony, a GM car, a Renault or any other kind of automobile without a specific guarantee that this car would receive maintenance services for one, two or four years.
Why did the Government not obtain a similar guarantee from Hyundai in return for its investment of $200 million in this company? Why is there no guarantee?


Martin Brian Mulroney: Mr. Speaker, that is so negative. All the usual conventional guarantees will be announced in due time, as they should be.
1 would have thought that the NDP Members who rise in this House to speak about job creation problems in Montreal East would be unanimous today in congratulating us on this magnificent achievement of job creation in Quebec. Stop complaining!
Oral Questions
In the role that Mr. Reisman will play on a temporary basis, will he be involved in discussions on trade negotiations with the cabinet committee? Will he be involved in laying out the strategy and developing plans with the individual sectors? If so, does the Prime Minister believe that it is proper under the circumstances, when Mr. Reisman still has his private business attachments?


Martin Brian Mulroney: Mr. Speaker, may I say that I saw the quite unseemly and pejorative allusions made by the Hon. Member about Simon Reisman and I think he should take them back, because Simon Reis-man's record of accomplishment in this country in the service of Canada is second to none.


Some Hon. Members:: Hear, hear!


Martin Brian Mulroney: As I indicated yesterday, when we receive the signal-as I hope we shall-that would transform this into the kind of employment that my hon. friend refers to, obviously all the appropriate steps will be taken and there will be no difficulty at all. I know that my hon. friend would agree that that is the honourable course.


Mr. Axworthy:: I suggest to the Prime Minister that he go back and read the articles. I was questioning his bad judgment, not Mr. Reisman's character.


REQUEST FOR COMMITTEE REFERRAL OF APPOINTMENT
Lloyd Axworthy: Mr. Speaker, the Prime Minister will recall his September statement about the reference of Order in Council appointments to a committee of Parliament. Will the Prime Minister make a commitment now that Mr. Reisman's appointment will be submitted to a committee of Members of Parliament so that we can properly question him about his terms of employment, his views on trade, and his business attachments?
* *
*


ROLE OF CANADIAN NEGOTIATOR
Martin Brian Mulroney: Mr. Speaker, I will be delighted to do that if the Hon. Member will promise that when Mr. Reisman comes he will not hightail it out of town and hide again.


Lloyd Axworthy: Mr. Speaker, my question is directed to the Prime Minister. Yesterday the Prime Minister said that the employment of the chief negotiator for trade would be on a part-time, temporary basis. I believe those were the words he used in the House. An incredible amount of work must be done in preparation since there has, as yet, been no consultation with the provinces or the private industrial groups. Surely it is necessary to have someone without corporate attachments doing this job on a full-time basis.


Some Hon. Members:: Hear, hear!


Some Hon. Members:: Oh, oh!


Lloyd Axworthy: At least 1 wasn't in Florida, Mulroney.


Some Hon. Members:: Oh, oh!


Mr. Speaker:: Order.

November 19, 1985
Oral Questions
[ Translation]


AUTOMOTIVE INDUSTRY
Hon. Edward Broadbent (Oshawa):: My question is for the
Minister of State (Small Businesses). The Minister has indicated that the Government is negotiating with the Hyundai firm, but the Government has already made a decision concerning the financial assistance. My question is simple: Why guarantees to the firm first and negotiations later?


Martin Brian Mulroney: Mr. Speaker, I have already answered that question and said that the whole thing was being done under objective criteria and following the proper procedure, and that a statement would be made in due course.


REQUEST FOR CLARIFICATION
John Edward Broadbent: Mr. Speaker, will the Prime Minister clarify for the House if he is saying that the Government of Canada has put up hundreds of millions of dollars in taxpayers' money-from Quebecers as well as other parts of Canada-and has already guaranteed that to Hyundai so that they know they will get their money, but has not obtained a commitment from Hyundai to install a parts production facility? What kind of nonsense is that?


Martin Brian Mulroney: First, Mr. Speaker, both aspects of the premise to the question are false. There is no question of hundreds of millions of dollars being put up. I believe that the amounts being discussed are very reasonable in the circumstances and are pursuant to objective standards. I can assure my hon. friend that all the appropriate and conventional guarantees in this area will have been secured before the matter is finally concluded.


John Edward Broadbent: We are seeing the kind of negotiation we can expect between the Government and the United States on much broader and more serious matters. We will not hold our breath.


Some Hon. Members:: Oh, oh!


FEDERAL FUNDING
John Edward Broadbent: Is the Prime Minister telling the House that he acknowledges that at least millions of dollars of taxpayer money have been offered to Hyundai but they have not committed themselves to producing parts which would provide additional thousands of jobs in the Province of Quebec? Is that what the Prime Minister is telling us?


Martin Brian Mulroney: Mr. Speaker, why is the Hon. Member so persistently silly?


Some Hon. Members:: Oh, oh!


An Hon. Member:: He works at it.


Martin Brian Mulroney: I know he works at it. Do not hold your breath.


Some Hon. Members:: Oh, oh!


Martin Brian Mulroney: In point of fact-


An Hon. Member:: What will be the Canadian content? Answer that question.


Martin Brian Mulroney: I can hear an Hon. Member from Quebec who is whining. You are unhappy, I know, because we are creating jobs in Quebec! You are unhappy because of that.

I thought that I had responded fully to my hon. friend.
On August 27 last the company announced its intention to come to Canada. In the same press statement there was an indication that an engineering firm had been retained to seek an appropriate location in the country. That was found.
Whatever assistance is provided by provincial and federal Governments is entirely conventional and appropriate. It is helpful to the attraction of this very important industry to a province which has suffered very high unemployment rates, and I know my hon. friend wants to be helpful in bringing those down. It was all done in the normal and helpful course of business, and I know that my hon. friend agrees with that. There have been no undertakings that in any way vitiate our commitment to those guarantees. This will all be made abundantly clear.


John Edward Broadbent: What guarantees?


INQUIRY IF CANADIAN CONTENT GUARANTEED IN HYUNDAI AGREEMENT
Mr. Jean-Claude Malepart (Montreal-Sainte-Marie):: Mr. Speaker, my question is directed to the Prime Minister.
Mr. Prime Minister, I am under the impression that once again Quebec is being taken for a ride. With respect to the Hyundai contract in Bromont, could you tell the House whether the company has guaranteed a Canadian content not only for the assembly line but also for the manufacturing of parts? Has the company guaranteed a given Canadian content and if so, what is the figure?


Martin Brian Mulroney: Mr. Speaker, I will not comment on my friend's remark but 1 can tell him that Quebecers from all over the province are tired of his vulgar remarks in the House.
November 19, 1985

A good 2,000 jobs have been created in the car industry in Quebec and the Member for Montreal-Sainte-Marie is unhappy. All Quebecers are most pleased with the agreements concluded between Quebec and the federal Government in compliance with the fair criteria used to settle all issues.


INQUIRY CONCERNING CANADIAN CONTENT IN AGREEMENT
[Stage Direction]
Mir. Jean-Claude Malepart (Montreal-Sainte-Marie): Mr. Speaker, I have a supplementary. I should like to say to the Prime Minister that 52 per cent of Canadians disagree with his policy. I should like him in the first place to answer our questions. Quebecers want to know whether they were taken in. Has the company given some guarantees about the Canadian content in the manufacturing operations? And 1 would like to remind the Prime Minister that Bromont is not in the East End of Montreal. He was mixed up a while ago. Can he answer yes or no that the company has agreed to a Canadian content?
Martin Brian Mulroney: Mr. Speaker, actually, Quebecers on September 4, 1984, came to the conclusion that they had been taken in during the past 16 years and that it was time for a change. This is why they elected a new Government. We barely missed him the last time but it will be better next time. Carry on with your stupid remarks and the voters in Quebec will settle your case, and in a very short time.


AGRICULTURE
Victor Fredrich (Vic) Althouse: Mr. Speaker, my question is for the Minister of Agriculture. It concerns the western drought agreement, or the lack of an agreement. The Minister told this House on October 25 that the provinces were not required to declare the drought zone a disaster area, that that was not necessary. Yesterday, however, the Minister indicated in the press that the federal decision is being delayed pending further discussions with the provinces.
Can the Minister tell the House specifically what are the provinces now being asked to do or to agree to before federal assistance can be announced? Specifically, what is being asked of them?


Hon. John Wise (Minister of Agriculture):: Mr. Speaker, my comments to the press yesterday were accurate. The Member should know that the Government is fully committed to providing some reasonable level of financial assistance to drought stricken western farmers. This Government is one that does not act unilaterally, and is one that believes in co-operation and consultation with the provinces, which is exactly what we are doing.
OraI Questions SIZE OF FEDERAL ASSISTANCE


Victor Fredrich (Vic) Althouse: Mr. Speaker, can the Minister tell us specifically how many federal dollars he is prepared to put on the table? What is under discussion here in terms of dollars as the federal contribution?


John Wise: Mr. Speaker, I appreciate the Hon. Member's interest with respect to the dollars, but the Member will know that this is not the time nor the place to make such an announcement.


Some Hon. Members:: Oh, oh!


CANADIAN RADIO-TELEVISION AND TELECOMMUNICATIONS COMMISSION DECISION ON THIRD SASKATCHEWAN TELEVISION NETWORK
Mrs. Sheila Finestone (Mount Royal):: Mr. Speaker, my question is for the Acting Minister of Communications. Yesterday the Minister advised the House that the main purpose of the Cabinet's intervention into the CRTC licensing of the third TV channel in Saskatchewan was simply to seek information and not to question the CRTC ruling. Your cabinet order, Mr. Minister-


Some Hon. Members:: Order.


Sheila Finestone: -clearly refers the decision back to the CRTC for reconsideration and hearing, not for information. The Minister misled the House-


Some Hon. Members:: Oh, oh!


Sheila Finestone: -and I think was unaware of that.


Mr. Speaker:: A question please.


Sheila Finestone: Would the Minister care to admit that he misled the House, and would he care to withdraw his remarks?


Hon. Benoit Bouchard (Secretary of State and Acting Minister of Communications):: Yesterday, Mr. Speaker, I tried to explain the process to the Hon. Member. 1 will try again today.
What we did was to ask the CRTC to reconsider some information concerning the Regina and Saskatoon markets as well as the situation in terms of revenue to make sure that surveys on contents were accurate and did not warrant a further ruling. Period! That is all we asked. We do not seek to change the ruling, we simply want additional information, and I suggest that it is exactly what the CRTC will provide.

November 19, 1985
Oral Questions


GOVERNMENT POSITION
Sheila Finestone: Mr. Speaker, I would suggest that the Minister read the Privy Council order that came out of the office and then determine whether or not he has misled the House.


Some Hon. Members:: Question.


An Hon. Member:: Are you the Speaker?


An Hon. Member:: Mind your own business.


Some Hon. Members:: Keep quiet.


Sheila Finestone: Excuse me.


Mr. Speaker:: Order, order. A supplementary question. Just a question, please.


Sheila Finestone: I would like to know whether the Minister now agrees that the Cabinet has set a dangerous precedent and that the Government is basically saying that the arms length independent CRTC regulatory body is not doing the job it is supposed to do. Is that what you are saying?


An Hon. Member:: Order.


Benoît Bouchard: No, Mr. Speaker.


Some Hon. Members:: Hear, hear!


ADMINISTRATION OF JUSTICE
Alex Kindy: Mr. Speaker, my question is for the Minister of Justice. It concerns Charles Ng and Joseph Kindler. People in my riding are fed up about keeping these people in Canada.
We hear that the Minister of Justice has decided to give an extension of two weeks for the submission when he will hear arguments. Could the Minister tell us why he gave that extension?


Hon. John C. Crosbie (Minister of Justice and Attorney General of Canada):: Mr. Speaker, with respect to the case of Mr. Kindler, his counsel wished to have more time because he was recieving some evidence, I think it was from a psychiatrist. Therefore, I agreed to give another two weeks for him to make his submission.
The matter was dealt with justly. It will be seen to be dealt with justly. I am a just Minister of Justice, and that is why I gave the additional two weeks.
[ Translation]


AUTOMOTIVE INDUSTRY
Lorne Edmund Nystrom: Mr. Speaker, I have a question for the Right Hon. the Prime Minister.
As the Prime Minister would know, other car companies in Canada have to buy at least 50 per cent of their components in this country.
Here is my question: Mr. Speaker, what will be the Canadian content under the provisions of the agreement with Hyundai? Will the company have to buy at least 50 per cent of its components here in Canada?


Martin Brian Mulroney: Mr. Speaker, I have already answered such questions on several occasions.


INQUIRY IF HYUNDAI WILL GUARANTEE 52 PER CENT CANADIAN CONTENT AS DID AMC IN BRAMPTON
Lorne Edmund Nystrom: In fact, Mr. Speaker, I think the answer is no. However, I have another question: Will Hyundai's Canadian content in Quebec be the same as that of AMC in Brampton, Ontario, which has to buy 52 per cent of its supplies here in Canada?


André Bissonnette: Mr. Speaker, Hyundai does not build cars in Canada, yet it already buys a lot of its parts in Canada. That is one proof. Besides, we have explained very-


John Napier Turner: Answer the question.


André Bissonnette: Besides, if the Leader of the Opposition would listen, we have explained very clearly a few moments ago that last February the company had already announced a $25 million investment to make parts in Canada. Negotiations have been going on and you ought to be pleased about the number of jobs which will be created in Canada.
I can tell the Leader of the Opposition that I have seen Japanese and other foreign cars on Canadian roads for the past 15 years. What have you done during those 15 years?


ENVIRONMENTAL AFFAIRS
Hon.   Chas. L. Caccia@Davenport: Mr. Speaker, my question is directed to the Minister of the Environment. The
November 19, 1985

Minister has repeatedly assured the House that he wants the best team of scientists available in the country to study the toxic chemical situation in the St. Clair River. Yet it now appears that the Great Lakes Institute in Windsor, which collected the samples in August, 1984, and is a key source of expert knowledge in this area, will be denied $100,000 to participate in the study. Could the Minister explain why?


Hon. Tom McMillan (Minister of the Environment):: Mr. Speaker, I do not think any institute, even one as reputable as the one to which the Hon. Member referred in his question, has a monopoly on scientific truth. We have mobilized a high-powered team of scientists from across the country and the United States, involving many institutes, several universities, and different Departments of Government, both federal and provincial. If the Institute in question thinks that it can be more usefully involved in our activities, I would be glad to entertain a proposal from it directly.


INSTITUTE'S PROPOSAL
Hon.   Chas. L. Caccia@Davenport: Mr. Speaker, I have a supplementary question. There is a proposal and, not only that, there is a willingness on the part of the Institute to participate in the study. I would rather hear the answer of the Minister of the Environment as to whether he can reassure us that the Institute was not denied $100,000 because of the desire of his Department to keep a lid on information.


Thomas Michael McMillan: Mr. Speaker, I find that question to be as offensive as it is unfair and inaccurate. The fact is that in a few moments time I will be releasing more scientific information on any environmental question of import to the Canadian people than has ever been released before by any Minister of the Crown.


ABORIGINAL RIGHTS
Mr. Jim Fulton (Skeena):: Mr. Speaker, my question is directed to the Prime Minister. Yesterday he ducked questions about the Haida Nation and what was happening in South Moresby. This is not an environmental issue. This is a constitutional issue which clearly falls under the purview of the Prime Minister. The fact is that the Haida claim is legally filed here in Ottawa with the Government of Canada. Will the Prime Minister do what he has done in other areas of Canada and open negotiations with the Council of the Haida Nation with regard to the South Moresby area? Right now they are being treated as criminals on land which they have occupied for more than 10,000 years.


Thomas Michael McMillan: Mr. Speaker, frankly I am not sure why the Hon. Member continues to persist with this same line of questioning. I do not think it furthers the goals of either Parliament or the Haida people.
Oral Questions
It is exactly the same question which I was asked not once, not twice, but three times yesterday. My answer is the same. Those negotiations have been opened. We are proceeding with them. They are going well, and we have received no indication whatever from the Haida people that they are disgruntled with the way in which we are performing.


OPENING OF NEGOTIATIONS-GOVERNMENT POSITION
James Ross Fulton: Mr. Speaker, my supplementary question is directed to the Prime Minister. I hope, before he goes to Geneva, that he will take some action on this matter. The Constitution recognizes the aboriginal rights of the Haida people. They need to be affirmed through a legal negotiation process which only the Prime Minister can undertake-


Mr. Speaker:: Question, please.


James Ross Fulton: I ask my question on behalf of Canada's first citizens and the people of British Columbia. Will you get on your feet today and simply say that yes, you are prepared to open those negotiations, as you have in other areas of Canada? It is a crucial matter in British Columbia, and I plead with you again that you answer it in the affirmative-


Mr. Speaker:: Order please. Questions and answers should be put through the Chair.


Martin Brian Mulroney: Mr. Speaker, the question has been answered yesterday. My hon. friend does not have to issue any plea in this regard. He is aware of the commitment of the Government on behalf of the native peoples of Canada when we met with the provincial Premiers and tried urgently and desperately to seek a fair agreement on behalf of the native people of Canada. That we were unsuccessful at that time in no way diminishes our commitment toward equality, fairness, and justice for the native people. That has been the motivating force and will continue to be so in this case as well.


ESTIMATES
Bill Attewell: Mr. Speaker, my question is directed to the President of the Treasury Board. He will know that Canadians continue to be disappointed at the rising cost of Government. While the increase in expenditures was comparatively modest in the recent Supplementary Estimates, when will the major impact of cost savings from the Nielsen task force be reflected in Supplementary Estimates? When will we see absolute decreases in Estimates as Canadians are demanding?


Hon. Robert de Cotret (President of the Treasury Board):: Mr. Speaker, there is no question that the Supplementary Estimates which I tabled last week indicated a very modest rise. As a matter of fact our programmed expenditures for the

November 19, 1985
OraI Questions
first five months of the year are up by only 2.8 per cent, which is the lowest rate of increase in many years indeed. The Supplementary Estimates were well within the fiscal framework. We are tracking it and monitoring it on a very regular basis. We fully expect to be able to live within that fiscal framework for the rest of this year.


FISHERIES
Mr. Keith Penner (Cochrane-Superior):: Mr. Speaker, my question is directed to the Acting Minister of Fisheries. Could he explain to the House why he has deliberately refused to attend a Montebello workshop to develop a policy on northern fisheries and oceans, sponsored by his own Department, when his predecessor made a firm commitment to be there? Even more puzzling, why has he ordered his senior officials not to participate in that workshop, offending many northern native groups and industrial representatives?


Hon. Erik Nielsen (Deputy Prime Minister and Acting Minister of Fisheries):: Mr. Speaker, the allegation contained in the last part of that question is utterly false, and in respect of the first part of the question, I was not invited.


John Napier Turner: We can understand why.


APPOINTMENT OF NEW MINISTER
B. Keith Penner: Mr. Speaker, the Prime Minister will know better, because he had a telephone call about this.


Erik Nielsen: I didn't.


B. Keith Penner: When will the Prime Minister appoint a fulltime Fisheries Minister so that we do not have groups, like those at Montebello, being offended as they were yesterday and today, and so that our fishing industry is not ignored and confused as it has been for the last many months?


Martin Brian Mulroney: Tomorrow morning.


EMPLOYMENT
Mr. John R. Rodriguez (Nickel Belt):: Mr. Speaker, my question is for the Minister of Employment and Immigration. It concerns the fact that International Nickel Company of Canada has to reduce its workforce in the Sudbury basin by 1,200 workers. It has tried an early retirement plan, and only 375 workers took advantage of it. The company is now threatening 32-hour work-weeks, lay-offs, and plant shut-downs.
What will the Minister do about this very sad and very serious situation?


Hon. Flora MacDonald (Minister of Employment and Immigration):: Mr. Speaker, it is my understanding that some 354 employees have agreed to early retirement. Another 217 have applied for special disability pensions. I also understand that the company is discussing with the union other measures which would ensure that no permanent long-term lay-offs take place.


CREATION OF JOBS
John R. Rodriguez: Mr. Speaker, the Minister's answer does not square with the facts. When can we expect some particular measures to create employment in the Sudbury Basin? We think this matter is very serious.


Flora Isabel MacDonald: Mr. Speaker, I agree with the Hon. Member. The matter is serious. That is why we are working under the Canadian Jobs Strategy to ensure jobs are created this winter as well as training for these people. As I mentioned to the Hon. Member earlier, we are also working with the province of Ontario to ensure special measures in this case. When that is finalized I have invited him to participate in that particular venture.


FINANCE
Mr. John A. MacDougall (Timiskaming):: Mr. Speaker, my question is directed to the Minister of Finance. Each year at this time mining and exploration companies have run into difficulties with flow-through shares are exploration work. Could the Minister tell this House if his Department will look into the possibility of extending the year end to January or February of the following year so the exploration work can be done in a more detailed manner?


Hon. Michael Wilson (Minister of Finance):: Mr. Speaker, I know the Hon. Member is expressing some very serious concern for the interests of the mining industry. I want to assure him that 1 have discussed this matter with members of the mining industry as well as with the Minister of State for Mines. It is under consideration and I very much appreciate his comments.
November 19, 1985


AUTOMOTIVE INDUSTRY
Hon. Jean Lapierre (Shefford):: Mr. Speaker, my question is directed to the Right Hon. Prime Minister.
1 was at the press conference when it was announced that Hyundai would be coming to the Eastern Townships. We were told the Prime Minister had agreed to this major investment being announced, and I was given the assurance the federal Government had made a deal with Hyundai for construction of the plant in Bromont.
1 would now like to know from the Prime Minister: Was there a deal when he talked about Florida with the Premier of Quebec? And is he now telling me that the deal is off and that the people of the Eastern Townships can no longer count on the federal Government going along with this venture?


Martin Brian Mulroney: Is the Hon. Member for Shefford against Hyundai coming to Quebec? Is that what he is trying to say? In that case, the question is-
Oral Questions


Martin Brian Mulroney: I know that my hon. friend would like to sow the seeds of uncertainty in Quebec with respect to Hyundai. I think he has received all the normal and usual assurances that Hyundai is coming to Canada and Quebec, with all the advantages that entails.
I can give him further assurances. After the next federal election, I promise you will get a Hyundai dealership in the Eastern Townships, and then you can sell the cars!


REQUEST FOR BAN ON CIGARETTE ADVERTISING
Ms. Lynn McDonald (Broadview-Greenwood):: Mr. Speaker, my question is directed to the Minister of Health and concerns a very broad policy issue surrounding cigarette advertising. Instead of relying on a counter advertising program to discourage people from smoking, which of course will only be a drop in the bucket compared to what the tobacco companies can put out, would the Minister not agree that it would be a far better policy to ban cigarette advertising altogether?


John Napier Turner: He is asking you a question!


Martin Brian Mulroney: The Leader of the Opposition says he is asking a question. I answered the question and I say this is an entirely normal transaction. It is the kind of criteria that have been used to attract industry to various parts of the country.
The Government of Quebec and the Government of Canada have been working on this matter for some time.
I think that if we refer to these basic objective criteria, the Government has been successful in attracting this major industry to Quebec, on the basis, as I said before, of entirely conventional criteria.
So I would say that this is reason for the Hon. Member to rejoice, not to criticize.


ROLE PLAYED BY PRIME MINISTER
Jean-C. Lapierre: Mr. Speaker, what I am asking the Prime Minister is: Did he make a deal? What is the federal Government's contribution going to be? At the press conference, we were given to understand there would be 1,200 jobs plus 1,600 jobs indirectly, through sub-contractors.
Is the Prime Minister prepared to rise in the House and say: Yes, our signatures are on it, we have a deal; here is our contribution; here is the number of jobs guaranted? That is what we want to know. We will certainly be rejoicing, but we want no surprises. We want to know whether the Prime Minister was playing politics or economics with respect to the assurances we were given.


Hon. Jake Epp (Minister of National Health and Welfare):: Mr. Speaker, I agree with much of what the Hon. Member says, as well as in terms of the capacity, be it voluntary organizations or Government at both levels, to deal with it. There are other options to consider as well. 1 want to assure the Hon. Member that other policies on convincing Canadians that smoking is detrimental to their health will be forthcoming.


ANTI-SMOKING ADVERTISING CONTRACT
Lynn McDonald: Mr. Speaker, would the Minister now admit that there is some hypocrisy and conflict of interest in awarding the counter advertising program contract to McKim Advertising, a company which has a much larger contract to convince people to start smoking? We are giving them a few hundred thousand dollars to discourage people from smoking, when they make a lot more money encouraging people to smoke.


Arthur Jacob (Jake) Epp: Mr. Speaker, both myself and others who have looked at it feel that the advertising campaign going forward is a good one. It is directed at youth. We have up to 30,000 smoke-related deaths in Canada in a given year and I think the Hon. Member should keep in mind that whatever measures we can use, and whatever number of young Canadians we can convince not to start smoking, that is a great advantage.


Lynn McDonald: It is not enough.


Arthur Jacob (Jake) Epp: My point is, yes, I would like to see even more money expended on that program. I do not see a

November 19, 1985
Oral Questions
conflict because the contract was awarded on the basis of a recommendation by six civil servants.


AUTOMOTIVE INDUSTRY
John Napier Turner: Mr. Speaker, my question is directed to the Prime Minister and it relates to Hyundai and whether or not there is a deal. The Minister responsible for Small Business indicated that the deal had not yet been finalized. We are interested in the Canadian content involved. The vice-president of Hyundai said that last year they purchased $25 million worth of Canadian parts, which is about 2.5 per cent of the total deal. Is there a Canadian content guarantee? Do we have a contract? Did the Government of Quebec break out of the traces as the Minister of Public Works indicated? Do we have a deal or not, and what is the Canadian content? That is what we are asking for here.


Martin Brian Mulroney: Mr. Speaker, I have indicated that the transaction will be made public in the normal course of events. It follows conventional and objective criteria which will neither offend nor surprise Members of this House. It meets the objectives of successive Canadian Governments, including job creation.


AGRICULTURE
Mr. Nelson A. Riis (Kamloops-Shuswap):: Mr. Speaker, my question is directed to the Minister of Agriculture who will know that British Columbia cattlemen in the drought zone have not yet received assistance and, as a consequence, are forced to reduce their herds. Is the reason for the lack of assistance the inability of the Government to enter successful negotiations with that Province? Is this also causing the hesitation in signing an agreement for all of western Canada?


John Wise: Mr. Speaker, I appreciate the Hon. Member's question. The difficulty arises from the original assessment. Certain areas of B.C. were identified as being in the drought area but, unfortunately, others were not. I have had a number of representations made to me over the past number of weeks on this issue. I have asked our people in the field to try to secure funds which have already been committed. If there are some funds left over, and I hope there are, we can take a second look at some of the areas in his Province.


SURVEY OF AFFECTED AREAS
Nelson Andrew Riis: Mr. Speaker, when the Minister takes a second look does he take into consideration the geographical differences based on elevation as opposed simply to an aerial basis as applies to the Peace River country and the plains area? The problems in central British Columbia are often vertical in the sense that they are high up in the hills.


John Wise: Mr. Speaker, the Hon. Member makes a very valid observation and recommendation. Had some of these matters been taken into consideration at the time of the original evaluation, then perhaps we would not find ourselves in these difficulties. However, the Hon. Member can rest assured that I am well aware of it and I will do my best in the final analysis, as I indicated earlier, to come up with a few extra dollars, dollars that have already been committed. If I do, I can assure him that they will be redirected in that area.


Mr. Speaker:: One very short question. The Hon. Member for Laurier.


RESEARCH AND DEVELOPMENT
Mr. David Berger (Laurier):: Mr. Speaker, my question is directed to the Prime Minister. Last week Allan George, dean of the largest mathematics faculty in the country at the University of Waterloo, announced that he would be leaving Canada to go to the University of Tennessee. He said that he was leaving Canada because of the negative research climate in this country-


Mr. Speaker:: Order, please. I asked the Hon. Member for a very short, immediate question.


David Berger: Is this what the Prime Minister had in mind when he promised us jobs in the last election? Will the Prime Minister keep his promise to provide money for research in Canada and not the United States? Will he keep the jobs in Canada?


Martin Brian Mulroney: Mr. Speaker, when we talked about creating jobs in the election campaign, that meant the 333,000 jobs the Government created in its first year.


Some Hon. Members:: Hear, hear!


Martin Brian Mulroney: That compared with an average of about
70,000	jobs created by the previous Government will give the Hon. Member an idea of how far and quickly the country has come in terms of realizing its capacity. Part of that is stopping the brain drain to which my hon. friend referred, which
November 19, 1985

became a haemorrhage under the Liberal Government which drove them out of the country along with the job-creating equity capital. We are starting to bring it back so the country can realize some of its growth potential.


CLERK OF PETITIONS' REPORTS
Mr. Speaker:: Order, please. I have the honour to inform the House that the petition presented by the Hon. Member for York South-Weston (Mr. Nunziata) on Monday, November 18, 1985, meets the requirements of the Standing Orders as to form. The petitions presented by the Right Hon. Member for Yellowhead (Mr. Clark) and the Hon. Member for Swift Current-Maple Creek (Mr. Wilson), by filing with the Clerk of the House, also meet the requirements of the Standing Orders as to form.
[ Translation]


Mrs. Mailly:: Mr. Speaker, I rise on a point of order.


Mr. Speaker:: The Hon. Member for Gatineau (Mrs. Mailly) on a point of order.



POINT OF ORDER


Claudy Mailly: Contrary to what was reported in yesterday's Hansard, I have never refused to go to a meeting last week-end to deal with family allowances. The Hon. Member for Montreal-Sainte-Marie (Mr. Malepart) has made an allegation to that effect during a debate and I want to set the record straight.
Such dishonest and devious methods are an insult to the House of Commons, Mr. Speaker. I have never been-


Mr. Speaker:: Order, please!

I think the Hon. Member has learned about the unhappy practice of claiming a point of order to make a statement.



ROUTINE PROCEEDINGS


Ms. Pauline Jewett (New Westminster-Coquitlam):: Mr. Speaker, I have the honour to present a petition from a very large number of residents of British Columbia, and particular-
Petitions
ly residents of Vancouver Island, who have become very concerned over the years about the radiation monitoring tests of waters adjacent to the base at Nanoose Bay, British Columbia. They have become concerned that there has been no monitoring of the procedures used for these tests and that there has been no public inquiry to hear the concerns of the people about the tests, and they therefore humbly beg the House to ensure that a public inquiry is held before the agreement between Canada and the United States on testing is renegotiated.


Victor Fredrich (Vic) Althouse: Mr. Speaker, I have a petition from some people in Canada who are protesting the deindexation decision on family allowances. They point out that the accelerated cut-backs in child benefits, which will reach $600 million annually by 1990, on top of other increases to sales taxes, excise taxes and so on make it very difficult for middle and low-income families and they therefore request the Parliament of Canada to rescind the unfair tax measures.


Mr. Bill Blaikie (Winnipeg-Birds Hill):: Mr. Speaker, I have the honour to present two petitions. One is signed by Canadians from Winnipeg who are also concerned about the present agreement between Canada and the United States with respect to the Canadian Forces maritime experimental and test range in Nanoose Bay and who ask that a public inquiry he held before the present agreement is renegotiated.


William Alexander (Bill) Blaikie: Mr. Speaker, I also have the pleasure to present a petition on behalf of many of my own constituents and others from Winnipeg who are protesting the deindexation of the family allowance and who want Parliament to do something about the deindexation and have full indexing reinstated.


John R. Rodriguez: Mr. Speaker, I also have two petitions. 1 have the honour to present first a petition from-

-the Federation of French Canadian Women of the Sudbury area, including the municipality of Chelmsford.

These persons who have signed the petition call upon the Government to withdraw the deindexing of the family allowances and they call upon the Government specifically to re-establish full indexation to family allowances.

November 19, 1985
Petitions


John R. Rodriguez: Mr. Speaker, my second petition comes from members of the United Food and Commercial Workers Ontario Retail Council which covers the Province of Ontario. There are some 300 signatures to this petition and those who signed it protest the changes in the unemployment insurance program which would see pension income used as earned income for unemployment insurance purposes. They call upon the Government to return the unemployment insurance program to its original position whereby pension income was not considered earned income for unemployment insurance purposes.


Mr. Neil Young (Beaches):: Mr. Speaker, I too have several petitions to present today. The first one is signed by a number of individuals from various communities across the country including my own constituency who state that the agreement between Canada and the U.S. that authorizes the use of Nanoose Bay in British Columbia as a maritime experimental test range is inadequate in several areas and does not safeguard Canada's sovereignty. They ask that a public inquiry be held prior to the present agreement's renegotiation in order to investigate those concerns and to recommend appropriate action.


Neil Young: Mr. Speaker, my second petition is from Canadians who live in Montreal and other Quebec centres who state that the deindexation of the universal family allowance is an unfair attack on women and families. They state further that this attack will not be offset by changes to the child tax credit and that other tax increases in the May Budget will place an unfair burden on low and middle-income earners.


Michael Morris Cassidy: Mr. Speaker, I wish to table two petitions. The first one is signed by a number of my constituents from Ottawa Centre and some other people of the Ottawa area who oppose the Government's decision to deindex family allowances and urge the House of Commons to reinstate full indexation of family allowances and rescind unfair tax increases.


Michael Morris Cassidy: The other petition is from Canadians residing in the Province of Quebec who are concerned about the presence of Americans on the Maritime Experimental Range in Western Canada as well as the presence of nuclear weapons on board American ships, urging the
House to hold a public inquiry before an agreement is negotiated with the Americans on the use of the Maritime Range.


Mr. Cyril Keeper (Winnipeg North Centre):: Mr. Speaker, 1 have the honour to present a petition which was circulated by the Letter Carriers' Union of Canada and it contains some
70,000	names. I would like to inform the House that these petitions are continuing to come in. What they call for is that the service of Canada Post be made a number one priority-


Some Hon. Members:: Oh, oh!


Cyril Keeper: Hon. Members opposite may laugh but Canadians want better service.
These petitioners call for basic customary services, such as door-to-door delivery, six day delivery to rural areas, six day accessibility to wicket and postal services and prompt service at reasonable rates. They call upon the Government to cease and desist its plans to privatize Canada Post.


Some Hon. Members:: Hear, hear!


Mr. Jim Manly (Cowichan-Malahat-The Islands):: Mr. Speaker, it is my honour and responsibility to present a petition from citizens of Cowichan-Malahat-The Islands regarding the Canadian Forces Maritime Experimental and Test Range at Nanoose Bay, British Columbia. They are very concerned about the radiation monitoring situation and about the naval policy of the United States which neither confirms nor denies the presence of nuclear weapons. They are concerned about the economic impact of the testing agreement. Therefore, they call upon the House to hold a full public inquiry before the present agreement is negotiated.


Abram Ernest Epp: Mr. Speaker, it is an honour and my duty to present petitions from residents of northwestern Ontario, primarily from the City of Thunder Bay, who protest the deindexation of the universal family allowance program. They point out that this will not be offset by changes to the child tax credit and that even the poorest families will be worse off by 1990 and will fall further and further behind. They call upon the House of Commons to reinstate full indexation of the family allowance.


Mr. John Parry (Kenora-Rainy River):: Mr. Speaker, I have the honour and the privilege today to present a petition signed by residents of the communities of Hudson and Sioux Lookout
November 19, 1985

who call upon Parliament and the Government to intervene on their behalf by discouraging the United States Congress from passing into law unfair protectionist measures aimed at Canada's forest industry.


John Edmund Parry: Mr. Speaker, I have the privilege to present a petition signed by numerous residents of the communities of Armdale, Elalifax and Dartmouth, Nova Scotia, concerning the Nanoose Bay test range in British Columbia. They state their concerns and worries about the use of this range by the United States of America and petition Parliament to authorize a public inquiry into its use and misuse.


Nelson Andrew Riis: Mr. Speaker, I have the honour to present a petition signed by 60 people from the northern Okanagan area of British Columbia regarding the procedures for and the results of the radiation monitoring tests of waters part of and adjacent to the Canadian Forces maritime experimental and test range at Nanoose Bay, British Columbia. They ask that these be made public. They are concerned about the presence of nuclear weapons on board U.S. vessels entering the said area. They suggest that the test range is unacceptable and are concerned about the economics of the test range on the local community. They are calling for a public inquiry.


QUESTIONS ON THE ORDER PAPER
[Stage Direction]
(Questions answered orally are indicated by an asterisk.)
John Horton McDermid: Mr. Speaker, the following questions will be answered today: 86 and 474.


Mr. Nickerson: Is the Department of National Defence aware of the presence of polychlorinated biphenols at old DEW line sites in northern Canada and, if so (a) on what date does DND plan to remove these dangerous chemicals (b) what means of transportation would be used and what would be the method and location of ultimate disposal (c) what would be the estimated cost of satisfactorily removing and disposing of the PCBs?


Mr. Robert Wenman (Parliamentary Secretary to Minister of National Defence):: 1. Yes. (a) The Department of Indian Affairs and Northern Development (DIAND) is responsible for the old DEW Line sites. DND agreed to provide assistance to DIAND in a clean-up project during the summer of 1985. DND personnel and aircraft were involved. Environment Canada provided on site advisors to ensure all contaminants were removed.
Petroleum and Gas Revenue Tax Act
(b)	Helicopters have been used to transport packaged equipment and contaminants to active DEW Line sites. Arrangements have been made with the United States Air Force to fly the materials, along with other U.S. materials from the DEW Line, to a proper disposal site in the United States.
(c)	The cost for the clean-up is not available at this time.


Mr. Allmand: Did the Minister of Employment and Immigration mail a press package (communique and clippings) dated August 29, 1985 and, if so (a) what was the postage cost, per package (b) how many were sent through the post?


Flora Isabel MacDonald: Yes. (a) Postage cost per package averaged 921/2 cents. Total cost $2,944.33. (b) 3,180 press packages were mailed.


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


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


Some Hon. Members:: Agreed.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed consideration of the motion of Mrs. McDougall that Bill C-82, an Act to amend the Petroleum and Gas Revenue Tax Act and the Income Tax Act, be read the second time and referred to a legislative committee.
Abram Ernest Epp: Mr. Speaker, I appreciate this opportunity to join in the debate on Bill C-82 this afternoon because it provides us with an opportunity to appreciate important fiscal and economic matters which should be in the minds of the Canadian people. It provides us with an opportunity to appreciate the policy directions which the Government is taking. It gives us the opportunity to discover choices made by the Conservative Party, choices which will not redound, I suggest, to the prosperity of the country, choices which are very closely related to the fact that corporate enterprises in the country may do very well with the present Government. I suppose its leaders will be happy about that fact.

November 19, 1985
Petroleum and Gas Revenue Tax Act
The ordinary people of Canada, the payers of taxes in the middle and lower ranges in particular, will suffer from the decisions which this Government has made. The result of the economic and social suffering they undergo will be to make Canada a poorer country than it might be. It will quite possibly have the effect of nipping in the bud this fragile recovery, some manifestations of which the Government is using so strongly to try to maintain its standing with the Canadian public.
We know that as far as the polls are concerned the Government is in some difficulty with the Canadian public and that its standing has fallen markedly. I suggest this afternoon, in the context of debating the Petroleum and Gas Revenue Tax, that that fall in public standing does not relate only to mistakes which Ministers made during September and October and evidences of Government bungling of matters as varied as the inspection of tuna in New Brunswick to the propping-up of a bank which should have been allowed to fall last March as a consequence of the mismanagement of that bank. I suggest that this fall in standing of the Government reflects choices which have been made, including the one that we are debating this afternoon, choices which will impoverish ordinary Canadians while enriching a small number of oil companies. These are companies which have done very well in the past and which will be pursuing the process of their own enrichment more and more strongly thanks to the decisions of the Government.
1 was interested to note before we rose for lunch the comments of the Minister of State for the Canadian Wheat Board (Mr. Mayer) who commended friends and colleagues from my caucus for the fine tone the debate had taken between them. I hope this afternoon that in considering some of these questions we might maintain that particular level of debate, even if I do aim at the bone and marrow of Government policy in these matters in suggesting the nature and the consequences of decisions which the Government is taking.
If we are to appreciate the nature of Bill C-82, and if all Canadians who are watching us are to appreciate the nature of the Bill, it is necessary to look back over a dozen years or so of the petroleum industry in Canada and place this particular decision of the Government in context. It will be of no surprise to the Canadian people, nor to any of my colleagues here I would think, to suggest that what happened in the petroleum industry beginning about 1973 was one of the most incredible pieces of cartel action ever seen by the human population of this globe. The increase in petroleum prices which OPEC was able to carry through beginning in 1973-74 led to one of the most massive and certainly rapid transfers of wealth which we have ever seen. It had the effect of enriching producers of petroleum, initially perhaps the companies, but, in the Middle East in particular, also the owners of the resource, and a variety of countries and governments in the most remarkable way. Inevitably, given the global nature of the oil business, that impact was felt in Canada as well. Those who were experiencing this transfer, those who were paying the rise in costs of gasoline and other petroleum products, were faced with a situation in which wealth could end up in very few
hands or could very easily leave the country. In fact, during the 1970s that clearly happened. If one examines the figures for the petroleum industry, one will discover that the total revenues to be shared in 1975 were $5 billion. Two years later it had hit $7.5 billion. By 1979, it had reached $10.9 billion. These very rapid increases in revenue to the oil companies were taken from the petroleum users.
The question is, what should the Government do in these circumstances, are the oil companies to be enriched and able to transfer great amounts of capital out of Canada, or are the people of Canada to be able to share in this enormous economic rent, as the economists would surely label it? Whether or not it was possible for the people of Canada to share in the consequence of cartel action was a very important question which faced the Canadian Government in the late 1970s and early 1980s because the profits of the leading oil companies in Canada rose so very sharply. For example, the profits of Imperial Oil rose from $290 million in 1974 to $471 million in 1979, and they went as high as $601 million in 1980. That was a reflection of the consequences of the process I am describing.
During the 1970s the industry succeeded in holding percentages ranging from 56 per cent down to 45 per cent in 19771978 and down still more to 42 per cent in 1979, but then they rebounded in 1980 to 56 per cent of the revenues. The province took practically all of the rest. The federal Government received very little of this. It received 6 per cent of the total, a mere $300 million, in 1975. The percentage dropped to 4 per cent in 1977 and in 1980 it actually fell as low as minus 10 per cent. The Government ended up a net loser in the petroleum revenue sharing in which the people of Canada surely had a right to share. The oil companies made enormous gains which were largely transferred out of the country. The evidence from 1974 to 1980 is that there was a net capital export of $4.1 billion by the oil industry. It is in the context, then, of the oil companies largely involved in transferring these monopoly gains, the economic rent, out of the country. So the establishment of the petroleum and gas revenue tax in 1981 was a sensible decision by the Government. Its repeal now under Bill C-82 is a stupid decision, fiscally and economically, as one can appreciate in perusing these statistics. As a consequence of the changes carried through by our last Government it became possible for Ottawa to join in the sharing of these revenues which had resulted from the OPEC cartel power. In fact, in 1981 the federal Government was able to achieve a 22 per cent share of those revenues. In 1982 that went up to 26 per cent although the percentage and the absolute totals fell off from $5.3 billion in 1982 to $4.6 billion in 1983 and only $3.8 billion estimated for 1984.
The significant thing of this process of achieving some gain for the Government of Canada, for the people of Canada, out of the consequences of cartel success, was that the people of Canada were able to see the Government taking in revenues and using them for the great variety of national purposes for which the Government of Canada exists. The oil companies did not suffer from all of this. One of the quite remarkable
November 19, 1985

things is that the revenues of the petroleum industry continue to rise. In 1980 the revenues were $11.3 billion to be shared between industry, the provinces and Ottawa. In 1981 they increased by almost one-half, to $15.8 billion. In 1982 they shot up to $20.4 billion and then levelled off a little.
With respect to these incredible revenues coming to the industry for potential sharing, the significant thing is that in spite of the petroleum and gas revenue tax, the gains which the industry had after the tax was applied, continued to increase in absolute figures. In 1980 the industry had taken in $6.3 billion. The following year, under the tax, it took in $6.7 billion. In the following year the total rose to $9.4 billion and then to $10.6 billion and $11.6 billion. In fact, the industry was moving towards keeping one-half of the revenues which were produced from petroleum and gas in this country. That is evidence of the extent to which the industry continued to flourish in spite of the tax. During the years 1981 to 1983- that three-year period-the oil companies transferred out of this country another $3.5 billion.
The decision of the Conservative Government to cancel the petroleum and gas revenue tax means that this revenue will no longer come to Government to cover the costs of Government, that great variety of things we need to do, such as keeping family allowances indexed, maintaining the old age pension at the proper level, and covering the cost of Government mistakes like the $1 billion it is going to cost to take care of the depositors of the Canadian Commercial Bank. Perhaps even more things, such as job-creation activities, could be paid for by a fair sharing of this revenue.
It is the decision of the Conservative Government to allow the oil companies to take the boodle again, to operate on the same patterns of the early 1970s and the 1960s. It has decided to allow these companies and their shareholders to enrich themselves outside of the country while individual Canadians pay two cents per litre more for gasoline in September and an additional one cent per litre in January, the increase in the sales tax which the Liberals put through in October of 1984 and another percentage point on the sales tax in 1986, and so it is nickel and diming the Canadian people to death. It is loading more and more of the burden of taxation on individual Canadians while it lets the oil companies get away with these enormous amounts in profits. The oil companies are able to enjoy again the unrestricted use of the profits which result from cartel activity. Here is a Government which is prepared to sock it to individual Canadians, to take money out of their pockets, and restrict the amount of business which can be done in any community because of the levels of taxation which it imposes, while letting the oil companies-which are undoubtedly good supporters of the Conservatives at election time- run off with billions and billions of dollars, sweep it out of the country, making precious little contribution-as others have noted before me-to the economy of this country.
Those are the kinds of decisions the Conservatives have made. Do they care about ordinary Canadians? Don't make me laugh. Are they concerned about the profits of their corporate friends? Obviously. That is the point of the
Petroleum and Gas Revenue Tax Act
petroleum and gas revenue tax changes which are before us this afternoon.
The Canadian people expected something different than that. The oil companies, I am sure did not. However, ordinary Canadians, the people who voted for the Conservatives on September of 1984, expected them to take a leading part in getting this country moving, not selling it out as the Government will do with this Bill. I speak in strongest opposition to this Bill.


The Acting Speaker (Mr. Paproski):: Are there questions or comments?


Ian Gardiner Waddell: I want to comment, but if there is an opposition Member who wants to ask a question first, I would be prepared to wait.


Mr. Ravis:: I will listen to you comment.


Ian Gardiner Waddell: Mr. Speaker, I think I am entitled to make this comment. The Member who spoke talked about the revenues and the difficulty of giving $5.6 billion to the oil companies, as this Bill does, in the period until 1990. We must talk about where the federal Government is going to get the revenue. I would like to put on the record two letters which I have with respect to revenue sharing between the federal and provincial Governments. I wrote to Paul Tellier, then the Deputy Minister of Energy, Mines and Resources, on June 27 of this year. My letter is very short. It reads:
Dear Mr. Tellier:
According to your Department's paper "Energy Policy Overview", it is estimated that the revenue sharing between the federal and provincial governments and industry for 1984 will be, in percentage terms, 17 per cent, 31 per cent and 52 per cent, respectively.
Would you please advise me by return of what the revenue sharing split is now as a result of the Western Accord, both in percentage terms, and in dollar terms.
Thank you for your assistance in this matter.
This is very important, Mr. Speaker, because this is how the pie will be sliced up and this will be the way in which the federal Government can finance a lot of its social programs and so on. I received a reply on September 19 of this year from Mr. de Montigny Marchand who is the new Deputy Minister. It reads:
Dear Mr. Waddell:
Thank you for your letter of June 27, 1985, in which you requested information on energy revenue shares. You referred to EMR estimates for 1984 that were produced late last year, and asked how these figures compare to the shares under the Western Accord.
The Petroleum Monitoring Agency has recently published its annual monitoring survey for 1984. I understand you have received a copy of the report. It shows the following actual breakdown of revenues for 1984:
	$ Billion	%
Federal	3.4	14.9Provinces	7.3	31.5Industry	12.4	53.6
November 19, 1985
Petroleum and Gas Revenue Tax Act
The differences between these results and the earlier departmental estimates to which you referred are the normal result of receiving more accurate data on which to base the calculations.
Although it is still too soon to know with any degree of certainty what the total revenues available for "sharing" or the percentage splits will be for 1985, we expect that the results will be quite similar to those for 1984.
With respect to projections beyond 1985-
This is after the Western Accord and after this Bill.
-we have produced several different, internal forecasts of energy revenues. However, in the midst of so much uncertainty regarding international oil prices, levels of domestic oil and gas production, export volumes and natural gas prices, these projections are highly speculative in nature and, in fact, could be very misleading. Therefore, no single forecast has been adopted as the "official" departmental forecast, and I am of the opinion that it would be inappropriate to put any on the public record at this time.
Yours sincerely, de Montigny Marchand
What he is telling me, and the point I raise, is that we are asked to approve $5.6 billion to be given to the oil companies without putting this tax on. We do not know what the federal Government's share will be. We do not know whether it will get less of a share or how much it will get. It is incredible that the Conservative Party, which was dedicated to freedom of information, will not release the information as to how much money the federal Government will get. Through this Bill we are, in fact, bankrupting the federal Treasury.


Donald Paul Ravis: Mr. Speaker, I would like to ask the Member for Thunder Bay-Nipigon (Mr. Epp) a question with regard to the bank bail-outs that we keep hearing about. I think the people of Canada are getting a little tired of hearing the NDP talk about this bail-out. I want to ask him a specific question. What would his Party have done with the municipalities, the credit unions, the pension funds and the individuals that were caught in that squeeze? I ask this question as a Member of the House from western Canada because that side of the issue must be touched upon. It is very easy to say that there is a billion dollar bail-out, but I do not hear too many people in the NDP from western Canada saying that we should let these little people fall by the wayside. What is the Member's response to that?


Abram Ernest Epp: Mr. Speaker, 1 thank the Member for that question because it allows us to be quite clear about our position on this particular matter. I will say at the outset that the mistakes that were made last March are at the root of the difficulty. If there had been a thorough examination of the Canadian Commercial Bank, the kind of examination that could, I believe, have been undertaken over the weekend that the Government had, it would have been realized that the bank was beyond saving. Responsible Ministers of Finance who deserve the position that they have in the Canadian Government, recognizing that and appreciating that this amounted to 2.5 per cent of the assets of the Canadian banking system, which banking system has prided itself on its standard and probity in years past, would have said that the bank does not deserve to exist. They would have said that we should drive it into receivership. We should have had a royal
commission, or whatever you would choose in the way of an investigation, to determine how, in the history of Canadian banking, something of that sort could have happened. That commission could have been empowered to consider hardship cases among the depositors who were involved in the bank and could have been asked to recommend to the Government action that might have been taken in case of a genuine hardship.
Remember, Mr. Speaker, that we are dealing with depositors who have more than $60,000 in the bank because those with up to $60,000 on deposit are covered by the Canada Deposit Insurance Corporation. If there were hardship cases among those who had more than $60,000 in the bank last March, let the Parliament of Canada consider what could be done. There is no question that we could have had a sound policy for dealing with the hardship cases and the Canadian people would not have had loaded upon them the consequence of mistakes made by Ministers of Finance and of stupid and naive decisions made last March which could lead those Ministers to resign their positions. The Canadian people would then not have to pay $1 billion for a bail-out in September resulting from the repeated assurances that the Canadian Commercial Bank was fine. Sometimes bad business is done, and when bad business is done Government does not prop it up and the people of Canada do not pay the shot.


Donald Paul Ravis: Mr. Speaker, I want to ask the Member specifically what his response would be. I received a song and dance about what his Party would have done, but what, specifically, would the answer have been to the municipalities which had a couple of million dollars each in that bank, to the credit unions, the pension funds and the individuals?
I would also like to ask a supplementary question, Mr. Speaker. What would have happened if we had not looked after these people? What stance would the New Democratic Party have taken then? I suggest that it would have been here to clobber us over our heads at every chance. You cannot win with those people. It is a no-win situation. You are damned if you do, and damned if you don't.


Abram Ernest Epp: Mr. Speaker, I am not quite sure what I am being asked to add to my response. 1 have suggested that there could have been consideration of hardship cases among the depositors. Perhaps the $60,000 level is inadequate and the Canada Deposit Insurance Corporation should be reformed. I have already said that provision could have been made to deal with those cases. We could have had a royal commission to recommend to us what should be done.


The Acting Speaker (Mr. Paproski):: I believe the period for questions and comments is now terminated. Is the House ready for the question?


Some Hon. Members:: Question.


The Acting Speaker (Mr. Paproski):: Mrs. McDougall, seconded by Mr. Hnatyshyn, moves that Bill C-82, an Act to amend the Petroleum and Gas Revenue Tax Act and the
November 19, 1985

Income Tax Act, be read the second time and referred to a legislative committee. Is it the pleasure of the House to adopt the said motion?


Some Hon. Members:: Agreed.


Some Hon. Members:: No.


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


Some Hon. Members:: Yea.


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


Some Hon. Members:: Nay.


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


The Acting Speaker (Mr. Paproski):: Call in the Members.


Mr. Speaker:: I declare the motion carried.
Bill read the second time and referred to a legislative committee.



PROCEEDINGS ON ADJOURNMENT MOTION


Mr. Speaker:: It is my duty, pursuant to Standing Order 46, to inform the House that the questions to be raised tonight at the time of adjournment are as follows: the Hon. Member for Don Valley East (Mr. Attewell)-External Affairs- U.S.S.R.-Emigration of Jews; the Hon. Member for Broadview-Greenwood (Ms. McDonald)-Canadian Sovereignty- Flight over Polar Sea in Canadian waters, (b) Dropping of Canadian flag on United States vessel; and the Hon. Member for Levis (Mr. Fontaine)-Small Business-Compatability of federal and provincial fiscal investment advantages.
Criminal Code



GOVERNMENT ORDERS

[Stage Direction]
November 19, 1985

John Carnell Crosbie: that Bill C-49, an Act to amend the Criminal Code (prostitution), as reported (with an amendment) from a legislative committee be concurred in.


[Stage Direction]
Motion agreed to.
John Carnell Crosbie: that the Bill be read the third time and passed.


Mr. Chris Speyer (Parliamentary Secretary to Minister of Justice):: Mr. Speaker, I am pleased to have this opportunity to begin the final debate in this House on Bill C-49, an Act to amend the Criminal Code in relation to prostitution. I might say that this will be the first of three Bills which will reach the final stage of debate. In the ensuing days and weeks we will have a Bill before the House for final reading with respect to divorce, for amendment of the Judges Act, and very soon there will come into force and effect the new legislation which was passed in this House, Bill C-18, with respect to drunk driving.
As you know, Mr. Speaker, the legislative committee which reviewed Bill C-49 made just one amendment to the Bill as introduced by the Minister of Justice (Mr. Crosbie). That amendment, which clarified the meaning of the application of the Bill to customers of prostitutes, was welcomed by the Government as a successful attempt to clarify a meaning which was somewhat nebulous.
The committee had the benefit of the evidence of witnesses both for and against the Bill. Their testimony has, for the most part, reinforced my belief that Bill C-49 is not only needed urgently, but that it is the only possible way to deal effectively and efficiently with the problems related to street soliciting for the purpose of prostitution. None of the witnesses heard by the committee seriously question that Bill C-49 is the only legal, constitutional and practical way to return to the residents of our major urban centres the freedom to enjoy their homes and the streets of their communities without the interference of those who now use those streets to buy and sell sex.
May I add at this point, Mr. Speaker, that I was very impressed by the fact that over the past few years included in the people who appeared before our committee were the mayors of every major city from Vancouver to Niagara Falls to Halifax to Toronto. These are duly elected officials who represent their constituents and with one exception-that is the mayor of the City of Ottawa-everyone agreed that this is a good Bill. May I also point out that Mayor Drapeau came from Montreal to appear before our committee to support this Bill in circumstances where the City of Montreal has a by-law.
There are some who are opposed to this Bill. Their numbers do not include the mayors of the major municipalities of Canada which are afflicted with the blight of street prostitution. With the one exception I mentioned, that of the outgoing mayor of Ottawa, the elected representatives of the people at the level of government most directly affected by the problem endorsed the Government's response. Moreover, the Minister of Justice has the support of the chief law officers of the Crown in the provinces, the Attorneys General, in his effort to deal with the problem. It is worth noting that the newly elected Attorney General of Ontario, the Hon. Ian Scott, wrote to express his support for this legislative initiative. It is unfortunate that his colleagues in this House do not choose to follow his advice.
The opposition to this Bill focuses essentially on two criticisms; first, that the Bill does not deal with all of the problems associated with prostitution, including those relating to the exploitation of children and to the economic status of prostitutes. The second criticism is that the Bill creates a risk of abuse by the police. I would like once again to respond to these concerns. First, it is not, and it has never been, the objective of Bill C-49 to deal with all aspects of prostitution. What we are going to do is review the Badgley Report, and the report of the Fraser Committee, and in the new year there will be more legislation with respect to this particular topic. The purpose of this Bill is, plainly and simply, to deal with the very serious situation which exists in many cities in Canada, that of street solicitation.
Despite the evidence, a few persons continue to maintain that this is a minor problem. With respect, I cannot agree. Both in the view of the Fraser Committee and in the view of the citizens who are living with the problem on a day-to-day basis, it has been proven beyond any doubt that other legal and non-legal administrative means cannot deal effectively with the situation. That is not to say that social and economic approaches should not be undertaken to deal with the problems associated with prostitution but, first and foremost, we need a strong and forceful law to deal with the urgent problem of public prostitution which faces communities across Canada. Proposals for response to other problems associated with prostitution are under review. These other recommendations, as I said, will be coming forward in the new year.
With respect to the argument that Bill C-49 hypothetically could be abused by the police, there is always an element of risk when criminal law is used for the protection of the public interest. This is true for the enforcement of any sanction involving the Criminal Code.
Nothing in this Bill alters the fundamental rights of Canadians guaranteed by the Charter. Nothing in the Bill changes the basic substantive, procedural and evidentiary rights enjoyed by anyone suspected of an offence in the country. A lawful arrest requires reasonable and probable grounds to believe that an offence has been committed and the prosecution must prove every element of the offence beyond a reasonable doubt. The courts have made it clear that the control of soliciting for the purpose of prostitution is a function of the criminal law. The provinces and the municipalities do not have
November 19, 1985

the legislative authority to resolve the problem. That responsibility rests with Parliament and we have an obligation to the public to exercise our duty.
May 1 very briefly, Mr. Speaker, tell the House a little about the history of the Criminal Code as it affects prostitution and street soliciting. During the eighteenth and nineteenth centuries there evolved in England, for reasons I am not sure I can tell you about, a notion of what was called a "street walker". When our Criminal Code was codified in 1892 it contained certain offences known as vagrancy offences. No matter how the Criminal Code changed in terms of numbers, there was always the section with respect to vagrancy.
This law was in effect until 1972 and, although it was a very, very effective law, many of us felt that it was not a good law because it said that anyone who was known as a common prostitute and who loitered in a public place had to give the police a good account of herself or else she would be convicted of an offence. In many cases in those days prostitutes were picked up on the street, there were disputes as to the accounts they gave of themselves and it became, quite literally, a status offence. It was decided in 1972 that, as effective as this law was, it was not a good law. We changed the law in Parliament in that year and as a result of a judicial decision made in 1978 on what the word "soliciting" meant, it was decided that the conduct had to be "pressing and persistent". To this day, in spite of many, many cases that have gone to the Supreme Court of Canada, people still do not know precisely what the limit of "pressing and persistent" is.
As a result the Fraser report said that there is no doubt that there has to be a change in the law. It is not something that should be dealt with by way of municipal by-laws but is the responsibility of Parliament. There is no doubt, as evidenced by the surveys which were taken by the Fraser Commission, that 84 per cent of the people wanted something to happen in order that we could enforce a law with respect to prostitutes in the streets of our major cities because they are an absolute blight. Whether the political persuasion of people was NDP, such as that of the Mayor of Vancouver, or Conservative, or Liberal as it is in the City of Toronto, all of the duly elected mayors came before committees and said that we must do something.
I think, Mr. Speaker, that this law which we are about to implement is going to be an effective law. It is an important law. Let us not lose sight of the fact that it is not the be-all and end-all. It is not an express train to Utopia. It is meant to be an effective law to clean up the streets of our major cities so that people can enjoy freedom from interference.
I am very happy that after two weeks in committee and a debate on second reading we have reached the final stages without amendment. I hope that there is expenditious passage of this Bill. I hope that Members of the House agree with me in order that we can get it through as quickly as possible and ensure that it is in full force and effect very, very soon.
Criminal Code


Lucie Pépin: Mr. Speaker, 1 welcome this opportunity to take part in today's debate on third reading of Bill C-49, an Act to amend the Criminal Code (prostitution).
I think it is a pity the Bill is being pushed through so quickly. This is probably an indication of the Progressive Conservative Government's political will to adopt the prostitution Bill, despite the many protests it has raised in committee.
First of all, I would like to point out that Bill C-49 is in no way an intelligent response to the Fraser and Badgley reports. In fact, the members of the Special Committee on Pornography and Prostitution made it clear that a comprehensive strategy, covering both legal and social aspects, was necessary to find answers to the prostitution problem.
Bill C-49 amends only a very small part of the Criminal Code that deals with prostitution, thereby rejecting the comprehensive approach outright, and it should now be obvious to Canadians that the Minister of Justice (Mr. Crosbie) has been looking at prostitution through the wrong end of the lens.
I heard the Parliamentary Secretary to the Minister of Justice (Mr. Speyer) say earlier that all mayors of Canada's major cities came to testify before the Committee and supported Bill C-49, with the exception of one mayor, the Mayor of the City of Ottawa.
I want to say that I support the brief presented by the Mayor of the City of Ottawa to this Committee.
When I heard Mayor Drapeau tell us how terrible the problem was in Montreal and that the streets had to be swept clean once again, I reminded him that 30 years ago, when he first campaigned for mayor of the City of Montreal, he had swept the streets clean in exactly the same way. In fact, he did it so well that now they have to start all over again.
My point is that today, Bill C-49 does not deal at all with the real problem of prostitution.
Pressure groups have been very active in their protests against Bill C-49. In fact, there were a great many protests by these groups, reflecting a number of legitimate concerns.
The Canadian Federation of Rights and Freedoms wanted the Fraser recommendations to be implemented. According to the Federation, the current wording of Bill C-49 is too general where the authority granted police officers is concerned, and will prove ineffective in the long run, because its effect will only be to have prostitution go underground.
Mr. Speaker, the Canadian Federation of Rights and Freedoms firmly believes that decriminalizing prostitution is the one and only reasonable solution that should be put forward.
In its submission to the legislative committee a few weeks ago, the Criminal Justice Section of the Canadian Bar Asso-

November 19, 1985
Criminal Code
ciation reminded us that criminal law should only be used under certain conditions.
One thing I want to emphasize is that criminal law should only be used when other means of social control are inadequate or inappropriate. Criminal law should only restrain rights and freedoms when required by the goals pursued. Male and female lawyers question the far-reaching implications of the proposed amendments. They said: "Any innocent person coming into contact with a male or female prostitute could face criminal action". Asking a prostitute what time it is can also become very dangerous in Canada.
Mr. Speaker, I believe the Criminal Justice Section of the Canadian Bar Association is worth being quoted:

It said that if there is going to be any amendment made to the Criminal Code in regard to prostitution it should not be a makeshift or temporary thing, but that any proposed amendment to the Criminal Code should be enacted as part of a broader legislative package dealing with other changes to prostitution under the Criminal Code including those changes recommended by the Fraser committee designed to move prostitution from the street into private settings. Amendments to be enacted should not be enacted as a separate section of the Criminal Code dealing with prostitution but, rather, they should constitute a specific and properly defined type of nuisance under the appropriate provision of the Criminal Code. Legislative changes concerning prostitution should contain a more realistic definition of an offence, addressed to the elements of nuisance and disturbance. The present wording of the legislation is much too broad and it is not directed to this aspect.
The proposed amendment is, in fact, to criminalize acts surrounding the provision of the services of the prostitutes and is, therefore, in direct contradiction to the recommendation of the Fraser Report.

Mr. Speaker, women's groups also were very much disappointed by Bill C-49. The National Association of Women and the Law is alarmed by the content and ramifications of the provisional measures to reduce the inconvenience for the public of prostitution on public thoroughfares. The ramifications of prohibiting any communication.


The Acting Speaker (Mr. Paproski):: I am afraid that I must call it five o'clock. It being five o'clock, the House will now proceed to the consideration of Private Members' business as listed on today's Order Paper.


PRIVATE MEMBERS' BUSINESS-MOTIONS   FARM CREDIT CORPORATION ROLE OF THE CORPORATION VIS-A-VIS OTHER LENDING INSTITUTIONS
Mr. Jean-Guy Guilbault (Drummond) moved:: That, in the opinion of this House, the government should consider the advisability of reviewing the role of the Farm Credit Corporation, in order to make clear to the farming community, its position vis-a-vis other lending institutions.
He said: Mr. Speaker, thank you for this opportunity to introduce my motion in the House. Last April 23 I asked that the role of Canada's Farm Credit Corporation be re-examined so as to shed light on its position concerning farmers and Canadian financial institutions. I think that, in the not too distant future, we will have to define more clearly what this Crown corporation can do to help the many Canadian farmers who are in dire financial straits. As spokesman for a riding where most residents earn their living on farms, I think it is imperative to take action.
Mr. Speaker, the first thing to do is to explain the situation the farming community was in when the Progressive Conservative Party took office, and the best way to do that is to ask Hon. Members a few questions.
Among other things, for instance, do you know that between 1961 and 1981 the price of land rose four times faster than the price of farm products? Do you think it is easy to turn a farm business into a paying proposition under such circumstances? Do you also know that, according to a 1984 Farm Credit Corporation survey, close to 20 per cent of Canadian farmers experience serious financial problems? Do you also know that farm investments controlled by Canadian farmers declined by $1.2 billion-that is 1 per cent between 1981 and 1984- whereas the consumer price index jumped from 100 in 1981 to 124 in 1984?
Perhaps Hon. Members are wondering why I should be so concerned over these figures? Maybe I should sit down and let my western Canada colleagues have the floor, because they have been pushing the panic button all these years? Well, no way! In my own riding, in my own area, farmers are faced with serious problems, and an organization such as the Farm Credit Corporation could provide them with a more structured and efficient assistance.
Mr. Speaker, I should like to ask a few more questions: Have you ever heard about the Movement for the Survival of Farmers? Have you ever heard about la Cour des miracles'? I am not joking; this is serious indeed! Such a thing exists in my own riding. It is an organization of Quebec farmers faced with financial difficulties. Have you ever heard of Mr. Marcel Talbot? Well, in August 1984, during the election campaign,
November 19, 1985

this man and a number of others, including Jean-Claude Boucher, went on a hunger strike in Saint-Cyrille de Wendov-er, in the Drummond riding. This man and the other strikers who were involved in various farming ventures had a great many horror stories to tell about their financial predicaments.
Mr. Speaker, I have also a number of press clippings-you can see that I have several of them-which I have collected in my area and especially from Mr. Gerald Prince, a journalist with the La Tribune newspaper. 1 used these clippings as a basis for my remarks.
To understand the important role which the Farm Credit Corporation could play today, we should look at the important role it played in earlier times. For instance, when its ancestor the Canadian Farm Loan Board was established in 1927, it was for very specific reasons. Canadian farmers were facing a very difficult situation. They were compelled to take short term loans at very high interest rates. Do you think the situation today is quite different? In order to address this problem, the Government established the Canadian Farm Loan Board. For 32 years, farmers could rely on an institution which adequately met their needs.
During this period, agriculture also experienced unprecedented growth. During the 50's, the whole context of agricultural financing changed. The situation became very different. The Canadian Farm Loan Board was granting loans nearly exclusively to consolidate middle term debts into long term debts. There were no lenders to serve newcomers in agriculture and farmers wishing to expand or modernize their farm. Have things really changed? The Board was no longer playing the dynamic role for which it had been created. Its terms of reference had to be changed and this is what the Government of Mr. Diefenbaker did in 1959. Desperate ills demand desperate measures. A new Act was passed and the Farm Credit Corporation was created. To give it the tools it required to be effective, the Conservative Government of the time increased the maximum amount of loans. It allowed the FCC to grant loans to farmers with lower net assets if they were willing to have their management methods monitored.
In 1964, the Farm Credit Act was amended to allow the FCC to lend money to associations of farmers and promote the pooling of financial resources. In the same spirit, the Act was again amended in 1975 to make it easier for new farmers to get started. This amendment allowed them to continue to have outside income in addition to their farming income during the first five years of the term of the loan.
By creating the Farm Credit Corporation, the Government put in place all the elements required to achieve the growth we have seen in Canadian agriculture since the beginning of the 60's until approximately three years ago.
It is interesting to note that, very soon after its creation, the Farm Credit Corporation held a large share of the farm credit market. As soon as 1965, it held 69 per cent of the market. I
Farm Credit Corporation
would like to point out that its share has now gone down to less than 25 per cent.
The 70's were certainly prosperous times. The value of land increased constantly and interest rates remained relatively low. In absolute figures, people often borrowed large amounts instead of using their capital because it was more economical to do so.
The arrival of the banks on the farm credit market was beneficial. They were able to offer middle and short term loans. Many farmers, after acquiring healthy net assets, no longer needed the security offered by long term loans.
They therefore turned to the banks because, even though their long term interest rates were higher than those of the corporation, their short and middle term rates were very attractive. This led many farmers to do business with them. This proved to be by far the most advantageous method of financing until interest rates began to climb. From then on, many farmers started to feel the pinch and have a lot of difficulty balancing their budget.
Moreover, at the same time the sales of farm products began to slow down and the growth of the 70's was replaced by a slow compression of incomes. Exports went down significantly, the production capacity of producers began increasing and prices fell.
The Farm Credit Corporation no longer plays the role which farmers expect it to play. It has been overtaken by the changes which have occurred in the financial structure of Canadian farming.
It is not recently that the situation of farmers has begun to deteriorate. The Government should have taken action three years ago, but it did nothing.
In 1959, when the corporation was created, there was a major problem which it helped to solve. Sources of financing and funds available for farm credit were inadequate. Today, we know that there is no shortage of money for lending.
Farmers are now facing another problem. Their level of indebtedness is too high. In addition, their incomes are not high enough to enable them to repay their debts. The problem also is that capitalization costs are too high and young farmers have to mortgage all their assets.
Now, Mr. Speaker, what happens to a pork producer when the selling price falls? What will happen to an apple producer in my riding when he incurs a $100,000 loss as a result of an early spring frost in April as it happened in 1981? Yes, a compensation was paid but three years later. Fortunately for that apple producer, Mr. Omer Blanchard, he had over 30 years of experience. What would have happened if a young man had bought that business one, two or five years ago?
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November 19, 1985
Farm Credit Corporation
Do you know also that 60 per cent of farm bankruptcies in Quebec in 1983-84 occurred within 40 miles from Drummond-ville? And according to the newspaper La terre de chez-nous which reported those statistics, they were generally well-equipped farms with new crops and producers arriving late on that market. Now where are the lenders who could have helped those farmers during those gloomy days? Do you not think that should be the actual role to be played by the Farm Credit Corporation?
The Farm Credit Corporation should be in a position to face the true problems and find original and effective solutions. It should not go on granting loans along the same old lines. The assets of a farmer should be better managed to increase his net worth as quickly as possible. Thus, a farmer would be in a stronger position.
It is known that one of the major problems faced by farmers since the beginning of times is income fluctuation. Their incomes fluctuate with the weather, with production elsewhere in the world, and with the prices they get. In economic terms, that is reflected in cash flow problems. It is imperative that the Farm Credit Corporation develop ways of repayment that would allow farmers to compromise with those kinds of situations.
Formerly, the solution was to arrange a loan at the lowest possible rate, with the longest possible term, in order to stabilize the expenses. The corporation is offering a product based on that model, which has already proved to be efficient but is now obsolete, because the terms and conditions of the loans it is offering do not meet with the particular needs of farmers anymore. In order to become efficient, the corporation would have to be provided with the means to reduce its interest rates to make them compatible with actual farm income, the actual income derived by a farmer from his investment.
In a column written by Mr. Andre Goulet in the Drum-mondville newspaper L'Express of November 12, 1985- which is very recent, only last week-reference is made to the case of Mario Sarrazin, a 21-year-old from Wickham, a very beautiful community in my constituency. From a very early age, he has been helping his father on the family farm, a beautiful farm with a hundred or so heads of Holstein cattle. In Quebec, the dairy cows that belong to the Sarrazin families-and I say families because there is more than one on the same range in Wickham, and they are tremendously successful-the Sarrazin dairy cows have an excellent reputation, and the prizes they have won over the years point to that high quality. Also, young Mario often meets with foreign visitors, even from Europe, who come to benefit from his father's expertise.
So you may ask me what is so special about Mario Sarrazin? You may not think there is anything really special, except that he is taking over from his father. At least he would like to, after finishing high school. 1 believe he studied farming techniques at the CEGEP de Victoriaville, and went through
farm administration and management training sessions. He has also been through a practical training period on another farm, in order to further his practical experience. He will also be attending this week, on November 22, 23, and 24, a provincial seminar on "The place of young people in farming".
So what did young Mario, age 21, have to say to the reporters? He referred, like any other farmer, to the high cost of investment, high risk income, loans and variable interest rates, the scarcity of farm labour, the high cost of quotas, which in many cases exceed the value of the farm itself. So this is what Mario had to say in connection with his own plans. Is that not what is on the mind of a very serious young businessman?
1 would like to ask the Hon. Member for Richmond-Wolfe (Mr. Tardif) who in this House would dare to launch a business costing $500,000, $700,000 or even a million dollars if he risks losing everything after a few years because of a natural disaster or the fluctuation of the interest rates? Who in this House would be willing to say: "1 can lend Mario the money he needs?1
What do these young people like Mario need? They need the lowest possible interest rates because they must invest very large amounts at first. They need help in managing the financial aspects of their business. If we could help them to get through the first five years without too many problems, 1 am convinced that the future would not be as bleak as it now seems for our young farmers.
There is work to do because the Farm Credit Corporation could be a lot more effective than it is now. However, it needs a lot of flexibility. Its programs are outdated and are no longer adequate to meet the needs of farmers.
Mr. Speaker, all realistic and intelligent solutions will receive my support. 1 believe that it is possible to make a positive contribution to change this situation without spending enormous amounts of money. However, we must act; otherwise, if it remains unchanged for years, what encouragement can I give the potato producers of my constituency? What can I tell the thousands of dairy producers who deliver their milk to Agropur? What can 1 tell the pork producers of my region, whose largest slaughterhouse is called Olympia and has annual sales of $300 million?
We have to take action so that the Farm Credit Corporation will stop having about $600 million to lend with no takers. This is ridiculous. We must not forget that only 5 per cent of Canadians produce the food needed to feed the remaining 95 per cent of the population. If we don't back them up, our supplies in food products will be at stake.


The Acting Speaker (Mr. Paproski):: I am sorry to interrupt the Hon. Member for Drummond. The Hon. Member for Richmond-Wolfe.
November 19, 1985


Mr. Alain Tardif (Richmond-Wolfe):: Mr. Speaker, 1 am very pleased to have an opportunity to speak to this motion. First of all, I would like to congratulate the Hon. Member for Drummond (Mr. Guilbault) on his motion, and I realize how relevant his words are, since the Hon. Member's riding is next to mine, and 1 know that in both ridings, agriculture is one of the major industries, and that the situation of many Quebec farmers is simply appalling.
Mr. Speaker, I get the impression, after listening very carefully to the Hon. Member's speech, that he is acting on, and as a result of, pressure from and meetings with producers and farmers, and informing Hon. Members of the nature of the problems they are facing. Unfortunately, it seems to me the action he is taking is not quite strong enough and his objectives are scarcely defined and even rather obscure, if we consider how the Hon. Member is presenting the issue. For the sake of argument, I shall, if I may, read the motion before the House.
That, in the opinion of this House, the government should consider the advisability of reviewing the role of the Farm Credit Corporation, in order to make clear to the farming community, its position vis-a-vis other lending institutions.
You will agree that upon reading the motion, I had to wonder about the significance and the meaning of the motion, and also after listening to the Hon. Member for Drummond who, I admit, gave a pretty accurate and a pretty honest description of the kind of problems farmers are facing. Considering these extremely critical and extremely urgent concerns, I deplore the fact that we do not have a motion before the House today that defines objectives and suggests some concrete ways of dealing with the problems the Hon. Member's constituents and mine are facing, problems that exist in the vast majority of Quebec ridings and everywhere else in this country.
Mr. Speaker, the fact is that during the election campaign, formal and concrete commitments were made which recognized the need to redefine the mandate of the Farm Credit Corporation. Everyone agreed at the time that since the situation and changed, the Corporation as such no longer played the role it was supposed to play in meeting the farmers' needs. The Government knows the problems, it knows where the difficulties lie, and in fact it is aware of a number of solutions that could be suggested. Now, after a year and some months in power, they are presenting a motion that seems to be very obscure and fails to propose anything that is the least bit concrete or significant. The only attempt to deal with this problem since the new Government came to power consisted in reducing the interest rate by a few percentage points. I remember statements by people in the industry in which they said it was very restrictive, very selective, and that in the final instance, these were just a few trifles, and that Quebec farmers could do without these trifles. What they needed was concrete solutions to their problems.
Farm Credit Corporation
1 think that the motion as such is very relevant and deserves support for its objectives and its potential for bringing about, 1 hope, some improvement, however minor, in the present situation. However, I think that when the Farm Credit Corporation is being discussed we have in the first place to accept or acknowledge a number of premises which seem to me to be absolutely essential and basic, premises which should acknowledge that farming or the food producing sector is a basis priority in our society.
We must also admit that our society cannot get along without the farming community, a sector which must have the priority and face a series of problems and barriers against which we absolutely cannot do anything. I refer of course to the weather, the international markets, a set of barriers which our farmers must face but which remain beyond their control. Now as a result of that reality or that premise, I think that we should consider the future while keeping those absolutely essential facts in mind.
The present situation is simply disastrous. I remember that a few months before it was defeated, the former government had introduced in the House a Bill to improve considerably the lot of farmers, those especially who had obligations they simply could not meet. 1 have always been quite surprised to see this corporation which administers public funds for the purpose not of helping agriculture but seemingly of killing it. 1 could give a whole series of examples.
Fairly recently, 1 asked the Chairman of the Committee on Agriculture how much it cost annually the Department, the Corporation, to repossess farms. In other words, my question was this: When the Corporation repossesses a farm which it was financing, does it recover its costs? When it sells the farm at a later date, does it recover its investments? The Chairman did not hesitate: No, the Corporation loses tens of millions of dollars every year because when it repossesses a farm, such a farm is abandoned for a period of one, two, three, four years and, when it is finally resold, the sale price is considerably lower than the amount guaranteed. Under such circumstances ... statistical data are there to prove it... the Corporation is worse than the banks. Why is not the Corporation doing what the banks are doing?
When the going gets tough, when a real problem occurs, a person goes to his or her banker, explains the situation and submits a proposal for settlement, a plan for the next few years. Often, not to say most of the time, the banker will make concession, increase grant delays to help the debtor reimburse his debt, and even reduce the principal owed to the financial institution. This will sometime give the person breathing space, as well as the desire to continue and save his business. So when a farmer is faced with similar difficulties, there is absolutely nothing he can hope for from the Corporation in terms of compromise, because all he hears is this: You owe us money, you pay; failing which, we will seize your property.

November 19, 1985
Farm Credit Corporation
Currently, I am dealing with a number of cases one of which seems to me absolutely unbelievable. It involves a small farm that this gentleman is operating with his wife and children, the value of which clearly exceeds $100,000. That farmer has no other debt than his loan from the Farm Credit Corporation, which comes close to $50,000. That man had an accident while cutting his wood for the winter, so he was forced to let go his operations over a period of some months. He fell behind and failed to meet his instalment. He went to the Farm Credit Corporation, and all these people could find to say to that man was: "Sell part of your farm or part of your quota and you will have the money for your instalment".
How ridiculous, how grossly unacceptable can that be! There is no sympathy whatsoever for an undertaking which from the start is viable, which has no financial difficulty of any sort, where the operator has just suffered an accident, and which could perfectly well have regained its viability without any problem whatsoever. But nonetheless, that man was asked to forsake a part of his income, a part of his quota, or to sell a part of his land.
This is simply ridiculous. No banker would have dared propose such a thing that verges on indecency.
I am amazed, now that 15 months have already gone by, that this Government has not taken concrete steps to introduce a specific piece of legislation with really identifiable goals, that would give the Farm Credit Corporation a new mandate because the corporation could make a really worthwhile, relevant contribution to the maintenance and development of our agro-food industry.
I am also concerned, since no such legislation has been introduced to this day, about a few statements made by the Minister to the effect that free trade was the new challenge for Canada. What concerns me is that the dairy policy that was to be announced on August 1st is not yet known on this 19th day of November. 1 am concerned because a firm commitment was made to pay a substantial amount to hog producers. It has not been done yet. Besides, they gave up on that one a long time ago.
I am concerned because the Minister seems to consider the agricultural sector in the same way as all other economic sectors, like the small and medium-sized businesses, like the manufacturing of chairs and desks, or furniture, in fact like all other sectors of economic activity.
Once you have reached the stage where you consider the future in that light, there is reason for concern and it is even tragic for those who have huge financial obligations to meet within the next months or years.
I say to myself that in our statements and in our political customs, we agree to help private enterprise through grants. We agree to encourage a company to establish itself in a
specific area by contributing up to 50 per cent, 60 per cent or 70 per cent, in some cases, of the business or entrepreneur's investment. And the amount that is provided or given to the company is a payment in cash made within the year following the setting up of the business or industry. The yield on that investment that is called grant is translated of course in job creation and spin-offs generated by those new jobs. To this I agree wholeheartedly. As a policy, it appears essential to me, a vital contribution to regional development.
However, from the moment we accept this approach towards supporting private industry, it seems to me that we should be even more generous, more interested by the agrifood industry since society needs and will always need farmers, and the consumer will always need a healthy, lively and very dynamic agricultural sector.
We accept to make enormous concessions to oil multinational companies apparently, and rightly, to generate employment. Yet we are very hesitant and really neglectful about giving farmers what they fully deserve, what they absolutely need.
In my opinion, as I said before, we should redefine in depth the role of the Farm Credit Corporation. We should give it a completely different direction where its fundamental purpose would be to support and to help directly and indirectly by the agri-food industry under all its forms. The present reality is however completely different.
That direction, that redefining of the corporation should be based first on a reduced interest rate, which should not exceed a real rate of 5 per cent, in my opinion. That is to say 5 per cent plus inflation, up a maximum of 8 per cent. For example, should the inflation rate be 2 per cent one year, the interest rate on loans would be 7 per cent.
In this way, it would not be very costly and furthermore, in my opinion, it would be less than what we are presently giving to the small and medium-sized businesses and to industry as a whole.
The advantage or the consequence of such a redefinition would be an agri-food industry in which people would invest. In agriculture investment also means new jobs, increased exports, better productivity and a whole range of positive improvements in the economy. It seems to me very important that we recognize the very particular nature of farming.
We are willing to help the business sector, but when it comes to the agri-food industry we are far less generous and more reluctant to provide the help which, obviously, is so badly needed.
I regret to say that farmers are presently in a situation where the future is more like the great unknown. It looks very worrisome. And you know, as well as I do, that people who are traumatized, who are worried, who do not know what future holds for them do not invest and are far less determined in the way they work and produce.
November 19, 1985

In conclusion, Mr. Speaker, personally, I want to support the motion so that it can go through, as I hope, as quickly as possible. 1 also wish that in the next few days, weeks and months, we will be able to improve it so that there will be practical solutions to the very real problems that were outlined by the Hon. Member for Drummond (Mr. Guilbault), and there will soon be applied remedial action to bring back confidence in that sector that society cannot do without.
At the present time, the Farm Credit Corporation is considered in Quebec somewhat as a Shylock. Nobody wants to have anything to do with it, except as a last resort.
Indeed, as confirmed by statistics, the Farm Credit Corporation is not very much present in Quebec, not to say totally absent. I think that if we redefined the role of the Corporation, it could become an instrument for development and promotion, for the greatest benefit of Quebec's as well as Canada's agriculture, and for the greatest benefit of society which obviously includes all electors and consumers.


Mr. Stan J. Hovdebo (Prince Albert):: Mr. Speaker, 1 would like to congratulate the Hon. Member for Drummond (Mr. Guilbault) for bringing this motion before the House. It is something that we can support. I suppose it is a motherhoodlike motion in that it asks the Government to consider the advisability of reviewing the role of the Farm Credit Corporation in order to make clear to the farming community its possible position relative to other lending institutions.
Because the Farm Credit Corporation has not fulfilled its mandate for providing adequate financing to a very depressed farm industry in the last few years, there is no doubt that we need to look at the issue again. Consequently, I believe it is very important that this motion at least be passed so that it may give some direction to the Government.
In the process of discussing this motion, it would become us to bring forward some of the situations in agriculture that are causing the kinds of problems we are seeing. I suggest that the debt that farmers carry, something around $22 billion these days, is a symptom of the problem and not really the problem itself. If we had an agricultural structure with some stability and security, the farmers would not have that kind of debt. The amount of farm debt can be found in every statistic at which one can look regarding agriculture.
The Farm Credit Corporation issued a press release some time ago which suggested there should be a real concern in the agricultural industry in recognizing that the high-debt low-equity group of farmers comprise the most productive group of farmers in Canada and that one-third of the farmers who have the lowest equity are responsible for the largest share of farm sales. On the surface of it, that is not surprising because the statistic indicates that a large group of those farmers are probably the young farmers who are just getting started and consequently may be more aggressive about the way in which they farm. At the same time, we must recognize that many of
Farm Credit Corporation
those farmers are being forced to produce more than they really think they should from the same land and in that process are mining the soil rather than building it up.
The presentation to which I just referred also indicated that except for Quebec farmers, low-equity farmers borrow more than they invest in their capital purchases. In other words, statistically most farmers who are borrowing the most or have very little equity and high debts borrow money to operate. That is the thing about which we should be worrying.
The Canadian Federation of Agriculture made a presentation not too many weeks ago in which it made the same suggestion as the one contained in this motion. The Federation suggested that we need to review the role of the Farm Credit Corporation as a lending institution for farmers. It was indicated that the idea of the Farm Credit Corporation being a body of last resort is not what the Farm Credit Corporation was mandated to be and therefore we should be looking at what happened to it and what we can do to return the Farm Credit Corporation to a position in which it will be the source of funds that are needed for farming. Therefore, I agree with and support this motion and suggest that the Government get with it and move in that particular direction.
Doing something about the Farm Credit Corporation so that it can make more money available to finance the farming community will not solve the problem in agriculture. Debt is a symptom of the real problem and is not the problem itself.
We should realize that there must have been a time when the farming community was doing well. There have been a few years in the last 20 years when the farming community has done well. In 1973, for example, everyone thought the farming community was on its way up and that there was no way to stop it. The statistics for the years 1943 to 1953 show that farmers received an average of about 6.6 per cent of the national income. Those were the 10 years immediately after the war. At that time, there was a certain amount of stability and growth in the farming community. It is very interesting to note that during that time, most people in this country felt that there was a balanced economy because no group was doing particularly better than any other group. Farmers were doing pretty well, small businessmen were doing pretty well and even those earning rental income were doing pretty well. The corporations that had had some difficulties during the War were re-establishing themselves and were doing pretty well. The banks did not complain. They were not doing as well as they are doing now but they did not complain. The employees of all of these groups, unionized and non-unionized, felt that they were getting a fair share of the national income.
Let us look at what happened in the next 20 or 30 years. Between 1943 and 1952, the economy seemed to be very stable and the average portion of the national income earned by farmers was, as I mentioned, 6.6 per cent. Since that time, the portion of national income going to farmers has been declining. In 1983, the farmer's portion of the national income was .5 per cent. It went up in 1984, I understand, to 1 per cent. Perhaps the portion of everyone's income fell as dramatically as well, but obviously it did not because someone has to use up

November 19, 1985
Farm Credit Corporation
that 100 per cent of income. By the way, that is a reduction for the farmers of 84.9 per cent. We wonder why they are in trouble and why they are borrowing money.
Let us look at the other side of this matter. Back in 1943, the banks collected 1.26 per cent of the national income in interest payments. By 1983-84, they were collecting 9.7 per cent of the national income. In other words, while the farmer's portion of the income went down by 85 per cent, the financial institutions' portion went up by 662 per cent. So their portion of the national income was increased by 660 per cent while the portion of farmers went down to 85 per cent. Surprisingly, when compared to financial institutions other groups which have been in trouble are not doing as well. I will deal with this now although it is not the topic today. It is rather worth-while to consider. For instance, in the period 1943-1953 small business took in 10.5 per cent of the national income. In 1983-84 small business was down to 4.3 per cent of the national income. In other words, small business has decreased its share of the national income by 59 per cent. This is not as large a reduction as that seen in the agricultural industry but it is a significant one.
One group which has stayed fairly level is that group which deals with compensation to employees. During and after the war years the salaries of people employed in union and nonunion jobs was 66 per cent of the national income. Some 30 years later they now take in 73 per cent of the national income. They have increased their take by 10.9 per cent.
In terms of agriculture, we need not consider the displacement of the national banking operation in order to turn that debt over to the Farm Credit Corporation. We must not ignore the system in which we live because we have to work within that system. However, let us do something more concrete in terms of the agricultural industry. Let us not continue with reductions in this sector, although I do not know how it can be reduced much more when it is already down to 1 per cent of the national income. I do not know how one can go much lower and still survive, which is the problem with which we are faced. I am sure the Hon. Member for Drummond brought forward his motion on the basis which I am now pointing out. We must do something now about the agricultural industry. We must do something about that one-third of young farmers who have the lowest equity and the highest debt and who produce a good portion of our products. If we do not do something about this problem then these farmers will be lost to the agricultural industry. If this review of the Farm Credit Corporation will start us in the right direction toward some type of comprehensive solution to the farming problem along with stabilization, parity pricing and other issues, then we should carry it out. We should not leave the industry in the state it is in presently.
It is interesting to note that farmers have only two possibilities. They can either increase the price of their products or they can decrease their input. Over the last few years in the farming community interest on debt has increased by 322 per
cent. The cost of petroleum products has increased by 284 per cent while the cost of fertilizer has increased by 218 per cent. The cost of chemicals has increased by 274 per cent. If one were to take the time to add up those figures it would be seen that for over 30 years total operating expenses for farming have increased by 1,053 per cent. During the same period of time the total receipts have only increased by some 688 per cent. This leaves a deficit of 365 per cent, which illustrates the point I have been making all along. We used to receive 6 per cent of the national income and now we receive only 1 per cent. The 365 per cent deficit with respect to reduction, in terms of actual intake compared with what we used to make per dollar spent and what we now make, has just about disappeared. I hesitate to say that by the year 1985 we will be down to 0 per cent as far as our portion of the national income is concerned. That is to say, we will be spending as much on debt as we will be taking in. That will be the case even when we take in dairy farmers, who are at least getting by.
Although I support the motion which is before us, I would have supported it more enthusiastically had it contained a resolution suggesting that the Government take a look at the pricing structure in terms of the whole agricultural industry. Regardless of whether this review is done in part or in whole it will result in us looking at every part of the agricultural industry if we expect it to survive in the way in which we think it should survive.


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


Some Hon. Members:: Question.


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


Some Hon. Members:: Agreed.


[Stage Direction]
Motion agreed to.
Mr. Blais:: I call it six o'clock.


The Acting Speaker (Mr. Paproski):: Is it agreed?


Some Hon. Members:: Agreed.



PROCEEDINGS ON ADJOURNMENT MOTION

[Stage Direction]
A motion to adjourn the House under Standing Order 46 deemed to have been moved.

Bill Attewell: Mr. Speaker, on October 28 last I asked the Parliamentary Secretary, in the
November 19, 1985

absence of the Secretary of State for External Affairs (Mr. Clark), about word which was coming out of Israel that Russia might be relenting and letting some of the Soviet Jews emigrate to Israel, Canada and other countries. We were encouraged by that piece of news. I asked the Parliamentary Secretary whether there was any foundation for our very strong hope that this might be true. Regrettably, it does not appear that there is any foundation to it. However, I look forward to the Parliamentary Secretary's response in which he may have something further to add.
Tragically, the number of Jews being permitted to leave Russia has dropped to a mere trickle in the last few months and years. I hope that if there is some foundation to the rumour, if I may call it that, it is simply not a public relations attempt on the eve of the Geneva conference. This is really a human rights issue. Russia, of course, was a signatory of the 1975 Helsinki Accord. We are pressing the Soviets to honour their word and allow refusniks to leave the country. I would like to make a number of remarks on this issue.
From time to time we have heard bits of good news in this regard. I heard recently that Yelena Bonner, wife of Nobel Peace Prize Laureate Andrei Sakharov, will be released from exile in the Soviet Union and will be allowed to go to the West for medical treatment. That is good news. There is also news which is not so good. It concerns people such as Andrei Sakharov and Anatoly Shcharansky, who is only 37 years of age. These men have been jailed or subjected to internal exile for years. They are both sick and the indications are they have been subjected to mindbending drug torture. Their terrible crimes include daring to ask the Soviet Government to honour its Constitution on citizens' rights in the 1975 Helsinki Accord on Human Rights.
There are many organizations and many individuals who work very hard on behalf of the Soviet Jews. There is an organization in Ottawa called the Canadian Parliamentary Group for Soviet Jewry. It has, I believe, some 272 members from both the House of Commons and the other place. We are honoured to have a person like the Hon. Member for Edmonton Strathcona (Mr. Kilgour) as Chairman of that group. I am honoured to be one of the seven-person executive committee.
Different steps have been taken over the last year. There was a special trip to Russia to plead the case of Soviet Jews. Our Chairman, the Hon. Member for Edmonton-Strathcona, sent a letter to President Reagan on the eve of the Geneva Conference and I would like to quote the last paragraph of that letter:
We wish to assure you of the support which exists in Canada for Soviet Jews. We trust that on this issue you will speak with Mikhail Gorbachev on behalf of all peoples concerned with human rights.
The National Council of Jewish Women of Canada is also very active. It has a separate committee on world Jewry headed by Eti Young. In Don Valley East there are several residents who are very concerned and hard working on this issue. I think of people like Mrs. Patti Starr, Mrs. Arlene
Adjournment Debate
Goldwater and Mrs. Joyce Zweig. It was Arlene Goldwater who introduced me to my refusnik. I have adopted a refusnik. His name is Simon Shnirman. He was born in 1957. He married his wife Leah in 1983 and they have a daughter Yona whom Simon has not yet seen.
One of Simon's recent crimes is that he gave two postcards, probably blank, which he had received through the mail, to one of the prisoners, and he washed his clothes by hand after working hours at a time and place not intended for this purpose. For these crimes he was given five days in an isolation cell without food or drink. For the past two years in the labour camp he has suffered great harassment and has been asked to do the hardest jobs. His basic right to receive packages has been denied. I could go on with the various forms of harassment but time is not available.
I wrote to his wife Leah on April 17, 1985 to basically introduce myself and give her a bit of my background. I mentioned the four children my wife Sandy and I have and the grandchild we were expecting. I was thrilled on August 21 to receive a letter, via Joyce Zweig, from Leah. Time does not permit me to read everything in the letter but I would like to quote just one part as follows:
God knows I tell the truth. Simon is not well, I am afraid of his health. He needs now, and after this camp of strict regime, good medical help. I thank you for your supporting and hope you won't forget us in this difficult time.
This is an important issue, Mr. Speaker; it is a human rights issue.
I recently had a letter from Eti Young concerning a telegram that had been sent to three officials in Russia on Simon Shnirman's behalf. The National Council of Jewish Women, the Soviet Jewry Committee, has adopted Simon as its refusnik in the Toronto area. The Hon. Member for Edmonton-Strathcona (Mr. Kilgour) and I jointly signed a letter to the Right Hon. Member for Yellowhead (Mr. Clark) which was sent on September 25, 1985 pleading the case of Simon. This is just one individual, Mr. Speaker, but an important one.
There is a family network in Canada working on behalf of these important people. We ask the people of Canada to lend their prayerful support to the plight of these people in Russia whose only crime, in most cases, is simply wanting to speak their mind and enjoy the freedoms that we take for granted in this country.


Mr. Gerry Weiner (Parliamentary Secretary to Secretary of State for External Affairs):: Mr. Speaker, it is such support as this that gives strength to the Jewish people in the Soviet Union. We cannot let them be forgotten because that is just what the Soviet Union would hope for. The Member, his confreres on the committee and the Parliamentary Secretary to the Minister for External Relations (Mr. Kilgour) have always shown that same dedication to care and concern.
I wish I could give a more positive report, but the Government is closely monitoring developments in the Soviet Union and recognizes that there are some signs of positive movement

November 19, 1985
Adjournment Debate
on the human rights front in general, and in Soviet Jewry in particular. These, however, remain to be confirmed. Indeed, speculation continues that Jewish emigration from the Soviet Union may be on the way up.
While emigration statistics do not support the notion of an easing in the situation of Soviet Jews-130 exit visas were issued in October-there are unconfirmed reports that a number of prominent refusniks may be released after the Geneva meeting between U.S. President Reagan and Soviet Secretary General Gorbachev.
Canada has repeatedly urged the Soviet Union to adhere to internationally recognized fundamental human rights which include freedom of religion, cultural expression and emigration. We would welcome any and all indications that Soviet authorities are beginning to re-examine their policy on these matters.
For its part, the Government is involved in various initiatives to impress upon the Soviets the importance and positive ramifications of an improvement in their human rights record. Most recently, for example, senior Canadian officials have made representations in Moscow and in Ottawa on family reunification cases. In addition, officials have stressed to Soviet authorities the constraints on popular support and confidence in our bilateral relations which the Soviet human rights performance and its policy toward Soviet Jews generate.
In conclusion, Mr. Speaker, the Government would commend all positive developments relating to Soviet Jewry and would welcome a Soviet decision to permit increased Jewish emigration.


CANADIAN SOVEREIGNTY-FLIGHT OVER POLAR SEA IN CANADIAN WATERS. (B) DROPPING OF CANADIAN FLAG ON UNITED STATES VESSEL
Lynn McDonald: Mr. Speaker, on October 29 I raised a question of great concern to Canadians involving the repercussions from the incursion of the Polar Sea icebreaker in Canadian waters in the Arctic earlier this summer. I want to deal with the issue broadly rather than just with the very particular issue of the investigation of the pilot of the Twin Otter who dropped a Canadian flag on our behalf on the Polar Sea and claimed Canadian sovereignty of these waters.
The facts are that the United States Coastguard icebreaker, the Polar Sea, entered Canadian waters in the summer, making this trip without asking the permission of the Canadian Government. Our Government, in a way very humiliating to Canadians, responded by offering permission, when it was not even asked for, demonstrating throughout a thorough incompetence in not understanding the seriousness of the matter.
When I raised this issue on October 29 the Government acknowledged the fact of an investigation of the pilot concerned, and the Prime Minister (Mr. Mulroney) blamed former Liberal Governments for their failure to provide adequately for Canadian sovereignty in the north, certainly a
cop-out if ever there were one. The present Conservative Government was amply warned of the seriousness of the situation by Canadians, members of the Opposition and by Inuit who, of course, are very intimately concerned with sovereignty of our Arctic waters. The Conservative Government discounted all these concerns.
When the Government failed to act, Canadians acted for themselves. 1 am proud to say that the Council of Canadians organized an expedition to claim Canadian sovereignty on behalf of Canadians and, on August 8, dropped a canister from a Twin Otter. The canister contained a Canadian flag and messages claiming Canadian sovereignty, asking the United States ice-breaker to go back. Canadians then went on to another island, Princess Royal Island, and planted Canadian flags there, again to demonstrate Canadian concerns in the Arctic.
No harm was done either to persons or property. This was an important symbolic gesture that was made for all Canadians. These people represented us there when our Government failed to act responsibly.
Let me point out that this was not even a hostile act in any ordinary sense of the term. Canadians, certainly the Council of Canadians, do not want hostile relations with the United States, but friendly relations between mature nations as equals and people who consider each other's needs, and respect each other's interests and rights. When the Government simply agrees with another nations and allows it to do what it wants, being reluctant to assert what is clearly our rights, is not being friendly, but undignified and irresponsible to other Canadians.
A positive result from this incident is that the Government was forced to think about this position and take action. I welcome the statement made in the House by the Secretary of State for External Affairs (Mr. Clark) on September 10 that in the future Canada will exercise full sovereignty in northern waters and islands. This is not to say that the measures which were proposed are the best measures possible, i would certainly advocate discussion with northern peoples because the Northwest Territories Council is concerned about some of the measures that were proposed.
The commissioning of an ice-breaker, the plan for increased surveillance and the removal of a bar on appeals to the World Court are positive measures. Canada will now permit an appeal to the World Court and I believe that will clearly demonstrate that our claim to sovereignty is a most reasonable claim and recognized in international law.
Negative measures, such as an investigation of the pilot concerned, are reprehensible. The Government is taking a petty step in possibly punishing the pilot for making a harmless but important symbolic gesture on behalf of us all. The Inuit people are most concerned, as is the Council of Canadians and other Canadians.
I repeat the suggestion I made on October 29, that the people who represented us in the Arctic waters and made this symbolic gesture deserve our appreciation. Rather than con-
November 19, 1985

duct a further investigation against them, they should be awarded medals.


Gérard (Gerry) Weiner: Mr. Speaker, as Hon. Members of the House know from having passed the amendments to the Aeronautics Act, Bill C-36, earlier this summer, the Minister of Transport (Mr. Mazankowski) has a statutory responsibility to supervise all matters connected with aeronautics. Part of that mandate includes ensuring that operators are in compliance with air safety regulations. On August 8, 1985, the Department received a complaint that an aircraft had made two low passes over the Polar Sea. Two objects were dropped from the aircraft, one of which landed on the ship.
It has been the Department's experience, in over 40 years of concern with flight safety, that unauthorized low flying presents a great hazard to persons both in the aircraft and on the ground. Furthermore, the risk created to persons and property on this ship by the dropping of a canister weighing several pounds at flying speed clearly required a thorough investigation. The applicability of Air Regulation 508 which the Minister quoted in the House on November 1 may relate directly to this incident. The investigation is now nearing completion.
As a routine procedure in such administrative cases, both the pilot who flew the aircraft and the co-pilot who dropped the object have been issued allegation letters seeking their explanation of their involvement in this incident. These explanations were to be submitted by November 19, 1985. The pilot has responded, the co-pilot has been granted an extension to November 23, 1985.
In keeping with Departmental guidelines that are available to the public, the facts presented by both the investigator and the two pilots will be reviewed by a third party. If no violation is found, no sanction will be imposed. However, if a violation is found, then administrative sanctions will be imposed commensurate with the nature and gravity of the offence.
Hon. Members of this House will certainly appreciate that while the matter is outstanding it is not appropriate for me to comment further; until a final decision is taken by the Minister in this matter.


SMALL BUSINESS-COMPATIBILITY OF FEDERAL AND PROVINCIAL INVESTMENT ADVANTAGES
Mr. Gabriel Fontaine (Levis):: On November 5, Mr. Speaker, I asked the Minister of Finance whether he had the intention of granting tax incentives to the Small Business Investment Corporations and the Societes de placement dans Ventreprise quebecoise-SPEQs for short. I asked him whether it was his intention to provide some incentives for Quebec investors and to grant them comparable tax benefits if they bought shares through the SPEQs program. In his reply the
Adjournment Debate
Minister did mention incentives with respect to small business investment corporations but did not refer to SPEQs. That is why I want to clarify my question today in an attempt to elicit a more formal explanation from the Minister.
As you know, in its April 23, 1985 Budget the Government of Quebec announced the creation of SPEQs and unveiled regulations governing them. The purpose of the program is to promote investments of risk capital in private corporations known to be small- and medium-sized businesses. Quebec residents who should decide to invest in these SPEQs will be given generous tax incentives.
The general goals of the SPEQs are as follows: to increase the shareholders' equity capital in the financial structure of Quebec small and medium-sized businesses; to encourage the shareholders of small and medium-sized businesses to invest more in their own businesses; to make it possible for those shareholders to involve other investors in the financing of their businesses; and, finally, to make it easier for small and medium-sized businesses to get started and to expand.
In order to further increase the funding opportunities of small and medium-sized businesses, the Quebec government, through its Industrial Development Corporation, decided to set up as well a capitalization loan program involving a loan granted by a private financial institution and fully guaranteed by the Quebec Industrial Development Corporation for a maximum of 10 years.
The CAPI or capitalization loan is so called because it is designed to encourage the capitalization of the recipient business. The QIDC subject to regulations will agree to guarantee this business capitalization loan for an amount equivalent to the subscribed capital by a Quebec business investment corporation in a small and medium-sized business in Quebec. The Quebec Government will thus be doubling the equity capital of Quebec investors in small and medium-sized businesses. Moreover, in addition to guaranteeing the capital, the Quebec Government will reimburse the borrowing business for the interest paid which, however, should not exceed the preferential rate plus 1 per cent. For the first two years of the loan, 100 per cent of the interest will be reimbursed, and 50 per cent for the next three years.
This is an important incentive for our businesses, and what I want to know exactly is this: Since this promotes investments by Quebecers and reduces their cost by 25 per cent, will the Federal Minister of Finance, in view of the timeliness and relevance of this method of financing Quebec businesses, allow Quebecers who invest in SPEQ's to deduct the amounts invested not only from their provincial taxable income, but also from their federal taxable income? That is my question. Thank you, Mr. Speaker.


John Horton McDermid: Mr. Speaker, I rise this evening to reply to the question asked by the Hon. Member for

November 19, 1985
Adjournment Debate
Levis (Mr. Fontaine) about the small business investment proposals announced by the Government in its Budget last May 23. The question of the Hon. Member concerns the compatibitily of the federal proposals and the tax incentives for small businesses recently announced by the Quebec Government.
The factors relevant to this matter are complex. I would like briefly to provide some background information before addressing the specific question of the Hon. Member.
As he knows, the tax measures to stimulate small business investments introduced by the federal Government in the May Budget are quite extensive. For example, measures were introduced to expand the list of qualifying investments for deferred income plans, such as RRSPs, to include securities issued by smaller Canadian businesses. Important incentives were also introduced to encourage pension and other deferred plans to undertake these investments. Furthermore, the federal proposals provide for a number of tax measures to facilitate the channelling of such funds to small business. These include the creation of special partnership, trust and corporate fund pooling vehicles which will receive certain preferential tax treatment.
The Hon. Member's question refers to one of these pooling vehicles, the small business investment corporation or SBIC. I would point out that the SBIC is a special type of non-taxable corporation designed exclusively for pension funds to assist them in making their small business investments. I think, therefore, that the Hon. Member's question is really about the more general relationship between the federal Government and the Quebec Government, in particular, whether investors in Quebec SPEQs, or Societe de placements dans I'entreprise quebecoise, will also qualify under the provisions of the federal small business legislation.
This by no means is a simple matter. Its various ramifications are currently being explored by both the federal and Quebec Governments. In this regard, the federal Government has recently received a formal request from the Government of Quebec. I can tell the Hon. Member that the feedback to date has been impressive. All indications are that there will be a substantial increase in available small business financing as a result of the measures being discussed. We are actively exploring ways in which federal and provincial efforts can be coordinated to enhance further the effect of the measures.
[ Translation]


The Acting Speaker (Mr. Paproski):: The motion to adjourn the House is now deemed to have been adopted. Accordingly, this House stands adjourned until tomorrow at 2 p.m., pursuant to Standing Order 3(1).


[Stage Direction]
The House adjourned at 6.22 p.m.
[Stage Direction]
Wednesday, November 20, 1985